LankaBangla Annual Integrated Report 2017

1
Annual Integrated
Report 2017
VISION MISSION CORE VALUES

To be the most preferred financial  Be a growth partner for our We have strong values that are
service provider in creating, customers, ensuring financing well embedded in our culture.
nurturing and maximizing value and superior experience Our values create the following
to the stakeholders, thereby,  Maintain a culture of goals to help us deliver our
GROWING TOGETHER. meritocracy in the DNA of strategy:
the company  Cherish a sense of ownership
 Be sustainable and ensure  Be customer centric
quality returns to our valued  Grow as a team
shareholders  Act with integrity and
 Uphold efforts to develop our professionalism
community  Deal with respect
MAKING A DIFFERENCE, DIFFERENTLY

LankaBangla Finance has been paving the way to bring in newness, innovation and difference for more than a
decade to empower lives and inspire changes. In doing so it has enhanced its capacity with required changes.
These changes are also necessary to bring about a stable, financially sound structure that exercises due
care when providing financial services to customers. Technology has become a powerful disrupting factor
and it will increasingly shape FI's competitive position. Customer experience, efficiency and security are the
key challenges. LankaBangla finance being a forward thinking company has been adopting these advanced
innovation solution with enhanced adaptability. These changes are related to the mission of the company
and inline with supervisory authority. These also include adjustment to strategy, core values, resolution plans
and specific products, services and partnering stakeholders. These are far reaching measures that benefit
customers and also bring in difference. We at LankaBangla Finance, at all levels are highly motivated to bring
about difference successfully.
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LankaBangla
CONTENTS
Notice of 21st Annual
General Meeting 05
01
Brief about Integrated Reporting 06
Brief about LankaBangla
LankaBangla in 2017 08
Message from Pg 55
the Chairman Organizational Overview 10
Code of Conduct Guiding Principles 10
Forward Looking Statement 11
Success Stories 12
Corporate Information 13
Branches and Subsidiaries 14
Group Structure 18
Message from Pg 128 Business Divisions of LankaBangla Finance 19
the Managing Subsidiaries of LankaBangla Finance 23
Director & CEO
Product Portfolio of LankaBangla Finance 30
Projects Financed by LankaBangla 31
An Eventful Year for LankaBangla 32
Awards and Recognitions 35
Milestones of LankaBangla 36
Corporate Governance
CFO's Statement Pg 131
02
on Performance Shareholding Structure 39

Profiles of the Directors of the Board 40
Board Committees and MANCOM 45
Profiles of the Management Team 46
Organogram of LankaBangla Finance 54
Message from the Chairman 55
Directors' Report 57
Statement on Corporate Governance 70
Certification on Corporate Governance 84
Board Audit Committee Report 95
Statement on Directors’ Responsibilities 98
Directors' Statement on Internal Control 99
Management Credit Committee Report 100
Human Resources & Remuneration Committee Report 101
Responsibility Statement of MD and CFO 103
Statement on Ethics and Compliance 104
Corporate Governance Disclosure Checklist 106
Risk Management
03
Statement on Risk Management 110

Capital Adequacy and Market Discipline 118
Statement on NPL Management 123
Report on Going Concern 126
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Annual Integrated
Report 2017
Management Discussion and Analysis
04
Review from the Managing Director & CEO 128
CFO's Statement on Performance 131
Financial Highlights 140
Horizontal & Vertical Analysis 146
Value Creation Structure 150
Business Model 152
How We Create Value 154
Delivering Value through Our Business 156
Key Resources of LankaBangla 158
Stakeholders Analysis 163
Economic Outlook 171
Business Environment Analysis 174
Drivers Guiding Our Strategies 180
Material Matters that Affect Our Strategies 181
Strategic Focus Areas 183
Human Resource Accounting 186
Human Capital Report 192
Sustainability
194
05
Sustainability Report
Statement on Green Banking 200
Corporate Social Responsibility of LankaBangla 203
Value Added Statements 207
Statement on Contribution to Government Exchequer 211
Audited Financial Statements

06
Independent Auditors' Report 213

Consolidated Financial Statements-LankaBangla Group
Consolidated Balance Sheet 215
Consolidated Profit and Loss Account 217
Consolidated Statement of Cash Flows 218
Consolidated Statement of Changes in Equity 219
Financial Statements-LankaBangla Finance Limited
Balance Sheet 220
Profit and Loss Account 222
Statement of Cash Flows 223
Statement of Changes in Equity 224
Consolidated and Separate Statement of Liquidity 225
Notes to the Consolidated and Separate Financial Statements 227
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LankaBangla
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Financial Statements of Subsidiaries
LankaBangla Securities Limited
Consolidated Statement of Financial Position 294
Consolidated Statement of Profit and Loss and Other Comprehensive Income 295
Consolidated Statement of Cash Flows 297
Statement of Financial Position 298
Statement of Profit and Loss and Other Comprehensive Income 299
Notes to the Financial Statements 302
LankaBangla Investments Limited
LankaBangla Asset Management Company Limited
Reporting Checklists
07
SAFA Best Presented Accounts Checklist 364

Integrated Reporting Checklist 367
Communication to Shareholders 370

08
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Annual Integrated
Report 2017
Safura Tower (Level 11), 20 Kemal Ataturk Avenue, Banani, Dhaka-1213
Notice is hereby given that the 21st Annual General Meeting of the Shareholders of LankaBangla Finance Limited will be held on March
29, 2018 at 10:00 a.m. at MIDAS Centre (12th Floor), House No. 05, Road No. 16 (New), 27 (Old) Dhanmondi, Dhaka-1209, Bangladesh to
transact the following businesses:
To receive and adopt the Directors' Report, Auditors' Report and Audited Financial Statements for the year
AGMA-01-21-18
ended December 31, 2017
AGMA-02-21-18 To declare dividend for the year 2017
To elect Directors in place of those who shall retire by rotation in accordance with the provision of Articles of
AGMA-03-21-18
Association of the Company
AGMA-04-21-18 To appoint Auditors of the Company for the year 2018 until conclusion of 22nd AGM and to fix their remuneration
AGMA-05-21-18 To transact any other business with the permission of the Chair
Dated, Dhaka By Order of the Board

March 08, 2018
Mostafa Kamal FCA

Company Secretary
Notes:
 The record date is fixed on March 08, 2018. The Shareholders, whose names will appear in the Share Register of the Company at the
close of business on the record date, will be eligible to attend the meeting and get dividend.
 The Board of Directors has recommended 15.00% Dividend out of which 7.50% Cash Dividend (i.e. BDT 0.75 per share of BDT 10.00
each) and 7.50% Stock Dividend (i.e. 75 shares per 1,000 shares held)
 A shareholder eligible to attend and vote in the AGM may appoint a Proxy to attend and vote in his/her behalf. The Proxy Form duly
completed and stamped must be deposited at the registered office of the Company not later than 48:00 hours before the time fixed
for the meeting.
 Admission into the meeting room will be allowed on production of the Attendance Slip attached with the Proxy Form.
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Brief about Integrated Reporting
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LankaBangla BRIEF ABOUT
INTEGRATED REPORTING
Annual Integrated Report
Annual Report for the year 2017 of LankaBangla Finance has been to-day stakeholder engagements, going beyond these engagements
presented as an ‘Integrated Report’ with the aim to utter how and placing particular emphasis on aspects that are likely to
LankaBangla, as a growing organization, has effectively managed influence the social, economic and physical environments in which
its business to deliver consistent value to its stakeholders. It we operate. Our material issues have been revised and are outlined
incorporates ‘efforts’ the company has undertaken on the way on pages from 180 to 182 of this report.
to contributing towards economic prosperity, environmental
Based on our leadership engagement, governance processes
sustainability and social well-being for a brighter future.
and our formal and informal stakeholder engagement initiatives,
particularly with investors, we are confident that all material matters
Scope and boundary have been identified and disclosed in this report. Management
Our 2017 annual integrated report covers the period between 1st of group functions and the business units approved the relevant
January 2017 and 31 December 2017. All materials that matters, content in the annual integrated report.
up to group board of directors (Board) approval on 13 Feb 2018,
are included here. The annual integrated report reflects operations External Assurance
of LankaBangla Finance Limited (LBFL) and its subsidiaries. Unless
indicated otherwise, all data pertains to the group, which includes Sl. Assurance on External Assurer
our financial operations and subsidiaries.
ACNABIN, Chartered
In presenting the Annual Integrated Report, we have consistently Consolidated and Separate Financial Accountants,
followed the guidelines issued by the Institute of Chartered 1 Statements of LankaBangla Finance an independent
Accountants of Bangladesh (ICAB) in the form of ‘Integrated Limited member of Baker Tilly
Reporting Checklist’, which is in congruence with the integrated International
reporting framework prototype issued by the International Consolidated and Separate Financial
Integrated Reporting Council (IIRC). Ahmed Zaker & Co.
2 Statements of LankaBangla Securities
Chartered Accountants
Limited
In explaining the Company’s operations and financial performance,
financial information has been extracted from the Audited Financial
Statements for the year ended 31 December 2017 with relevant Financial Statements of LankaBangla Syful Shamsul Alam
3
Investments Limited & Co. Chartered
comparative information. The financial statements consistently
comply with the requirements of: Accountants
Financial Statements of LankaBangla A member of UHY
 Bangladesh Accounting Standards (BASs) and Bangladesh 4 International Limited
Asset Management Company Limited
Financial Reporting Standards (BFRSs),
 Relevant rules & regulations of Bangladesh Bank (The Central
5 Corporate Governance Howlader Maria & Co.
Bank);
 Companies Act 1994; Syful Shamsul Alam&
6 Provident Fund
 Financial Institutions Act 1993; Co. Chartered
Accountants
 Securities and Exchange Rules 1987; A member of UHY
7 Gratuity Fund
 The Income Tax Ordinance 1984; International Limited
 And other applicable laws and regulations of the land.
ACNABIN, Chartered
Eligibility Compliance of LankaBangla
The Sustainability requirements, as elaborated separately in our Finance Limited for participating
Accountants,
Sustainability Report, adhere to the guidelines issued by the Global 8 an independent
in the Investment Promotion and
Reporting Initiative (GRI)-G4 Framework. member of Baker Tilly
Financing Facilities (IPFF) project
International
To report our corporate governance practices, we have followed
the revised Corporate Governance Guidelines (CGG) issued by Responsibility of the Annual Integrated Report
Bangladesh Securities and Exchange Commission (BSEC).
Managing Director of LankaBangla finance Limited acknowledges the
The scope of our Annual Integrated Report comprises of activities responsibility to ensure the integrity of the disclosure contained in the
that have been carried out within the geographical boundaries of Integrated Report presented herewith that comprises the discussion
Bangladesh, as we do not have operation or subsidiary in other and analysis, disclosures pertaining to stewardship, which should
countries. be read in conjunction with the audited financial statements. In his
opinion, the integrated report, incorporated in this annual report has
Materiality been prepared in accordance with the IIRC’s international integrated
reporting framework and addresses all material issues and fairly
Our annual integrated report aims to present a balanced and presents the group’s integrated performance.
concise analysis of our strategy, performance, governance and
prospects. In determining the content to be included in this
report, we considered the issues that are material to maintain the
commercial viability and social relevance required to achieve our
vision in the medium term.
We show the process of determining material issues as a
business tool that facilitates integrated thinking. The materiality Khwaja Shahriar
determination process undertaken in 2017 complemented our day- Managing Director & CEO
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BRIEF ABOUT Annual Integrated
Report 2017
LANKABANGLA FINANCE LIMITED

LankaBangla is the country’s leading
provider of integrated financial services LankaBangla in 2017 08
including corporate financial services, Organizational Overview 10
retail financial services, SME financial Code of Conduct Guiding Principles 10
services, stock broking, corporate Forward Looking Statement 11
advisory and wealth management Success Stories 12
services. Under the broadest umbrella
Corporate Information 13
of products and service offerings, we are
the lone financial institution to operate Branches and Subsidiaries 14
credit card (MasterCard and VISA) and Group Structure 18
also provide third party card processing Business Divisions of LankaBangla Finance 19
services to different banks in Bangladesh. Subsidiaries of LankaBangla Finance 23
Since 2006 LankaBangla has been listed Product Portfolio of LankaBangla Finance 30
in both DSE & CSE in Bangladesh. 31
Projects Financed by LankaBangla
An Eventful Year for LankaBangla 32
Awards and Recognitions 35
Milestones of LankaBangla 36
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Brief about LankaBangla Lankabangla in 2017
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LankaBangla
LANKABANGLA
IN 2017
LankaBangla is the country’s leading provider of integrated
financial services including Corporate Financial Services, Net profit after Tax of LBFL crossed the
Personal Financial Services, SME Financial Services, Stock landmark of BDT 1,000 million for the third
Broking, Corporate Advisory and Wealth Management Services.
consecutive years
LankaBangla Finance Limited (LBFL)
As one of the leading Financial Institutes in Bangladesh, LBFL’s
asset base was BDT 78 billion as at the end of 2017. Fund Under Increase its Paid-up Capital through
Management crossed BDT 146 billion by the end of 2017 which is
at its highest level since the inception of LBFL. LBFL’s Investment
issuance of 2:1 right shares
portfolio (Leases, loans & advances and investments) reached
to a new height of BDT 80 billion by the end of 2017 which was
possible only after registering yearly asset disbursement of Issued Commercial Paper of BDT 1,150
nearly BDT 58 billion.
million as the pioneer in the NBFI Industry
Net profit after Tax of LBFL crossed the landmark of BDT 1,000
million for the third consecutive years and for the year 2017
LBFL’s Net profit after Tax was BDT 1,353 million.
LBFL has been rated “AA3” for long term
LBFL on the verge of expanding its wings and drive for reaching
to the furthest ends. With this sentiment LBFL has opened 5 and “ST-2” for short term as at 31 July 2017
new branches in the year 2017 and reached to a total tally of 25
Branches within the jurisdiction of the country and is planning
to open 5 more branches in the year 2018. LankaBangla Securities Limited (LBSL)
LBSL’s business performance was remarkable in the year 2017
LBFL has always been very passionate about Human Capital
which was pretty much in line with the glittering Capital market
Management within the organization. It is the employees who
throughout the year. Daily turnover in both the stock exchanges
are fuelling the performance of LBFL bring it to the position
increased significantly during that time. LBSL was able to register
where it is now. Total employees of LBFL as at 31 December
7.64% market share in DSE and 10.88% in CSE which is so far the
2017 was 1,828, which consists of 584 Full Time Employees
highest market share retention in LBSL’s history.
(FTE), 241 Business Support Officer (BSO) and 1,003 Product
Marketing Officers (PMO). Shareholders equity is gradually increasing year on year which
shows the company’s commitment to protect the interest of its
In order to facilitate the continuous Asset growth, LBFL executed shareholders as well as increase the wealth of its shareholders.
a 2:1 right issue of shares at the end of this year. Thus the capital
base of LBFL has been further strengthened targeting the In the year 2017 the main source of income of the company
facilitation of the above average growth of assets compared to was revenue from brokerage which contributed 53% of the
the industry. total income of the company. The other two sources of income
of the company were Interest Income and Capital Gain from
As an alternate source of funding, LBFL, being the pioneer in Investment on the stock market which were 28% and 17% of the
NBFI industry, issued Commercial Paper amounted to BDT 1,150 total income of the company respectively.
million in the year 2017.
In 2017 Earnings per Share (EPS) was also increased significantly.
The touch of excellence in operation resulted in boosting EPS reached to BDT 3.07 per share in 2017 which was BDT 0.71
the solvency and efficiency of LBFL and which as a logical per share in previous year.
consequence improved its Credit Rating. LBFL’s Credit rating has
been done by Credit Rating Agency of Bangladesh (CRAB) and There’s a significant improvement in revenue from brokerage in
LBFL has been rated “AA3” for long term and “ST-2” for short the year 2017. It has touched a billion mark in 2017 which is the
term as on 31 July 2017. highest in last five years.
Prudent and transparent reporting is in the philosophy of LBSL saw a significant surge in Net profit after tax (NPAT) in the
LankaBangla. LBFL has been awarded in both National and year 2017. NPAT was BDT 826.15 million which was BDT 174.43
International level on a continuous basis. In the year 2017 LBFL million in 2016.
has been awarded with the following recognitions For the year 2017, Return on Asset (ROA) was 7.63% which was
 SAFA Best Presented Annual Report Awards 2016
1.74% in 2016. Return on equity (ROE) of LBSL was 17.44% in
2017 which was 4.17% in 2016.
 17th ICAB National Award for Best Presented Annual Report,
2016
 17th ICAB National Award for Corporate Governance, 2016 LBSL ranked Number One consecutively in
 ICMAB Best Corporate Award, 2016 last 12 years in DSE and 13 years in CSE
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Brief about LankaBangla Lankabangla in 2017
9
Annual Integrated
Report 2017
Country’s first ever online payment Arranged BDT 2,770 Million for its clients
gateway for stock brokerage company through Preference Share Issuance, Equity
Arrangement and Commercial Paper
LankaBangla Investments Limited (LBIL) Issuance
The Primary Market Services Department of LankaBangla
Investments Limited specializes in providing one stop equity LankaBangla Asset Management Company Limited
financing solutions for corporate clients that includes expert
(LBAMCL)
corporate advisory services, innovative financial solutions for
arranging funds through structuring of financial strategies, 2017 was first full year for LankaBangla Asset Management
detailed execution and making use of comprehensive access Company Limited (LBAMCL) for Fund Management. As the
to capital markets that LBIL possesses. Year 2017 has been yet wealth management wing of LankaBangla Finance Limited,
another glorious year for LBIL PMS Team. Four deals have been LBAMCL kept signature mark of the LankaBangla brand in capital
signed during the year and in the process heavily enhanced its market operations and generated impressive return in its first
presence. In addition of that two local conglomerate appointed fund namely LankaBangla 1st Balanced Unit Fund (LB1stBUF)
LBIL as Issue Manager for their prospective IPO. LBIL is in the and declared 15% dividend for the year 2017. Looking forward
advanced stage of signing on board as the issue manager for IPO in 2018, two new mutual funds namely LankaBangla Al-Arafah
of a prominent market player in the engineering sector. Shariah Unit Fund and LankaBangla Popular Life Growth Fund
are expected to be launched. In Alternative Fund Management
In its continuous effort to satisfy its stakeholder’s interest side, we are hopeful to launch our First Private Equity Fund
and for the development of Capital Market of Bangladesh, in 2018. We expect capital market in Bangladesh to enter in
LBIL actively participate as change maker and set the market another era that will shaped with technology and new product
standard. In continuation of the legacy, LBIL acted as the Issue proliferation i.e. ETF, Derivatives. We are building capacity along
Manager of aamra networks limited (ANL), the first IPO under with these developments to facilitate the market with right kind
book-building method under reformed Bangladesh Securities of technology and skill set that would be required in foreseeable
and Exchange Commission (Public Issue) Rules, 2015. The issue future.
size was BDT 562.50 Million and the trading started on October
2017. LBIL also acted as the Issue Manager for Energypac
Power Generation Limited under book-building method and LBAMCL launched an open ended mutual
successfully completed the roadshow. The issue size is BDT 1,500 fund named “LankaBangla 2nd Balanced
Million. In 2017, LBIL signed Issue Management Agreement with
Baraka Patenga Power Limited and KYCR Coil Industries Limited Unit Fund” for investors with an initial size
for their prospective IPO. LBIL shall act as Registrar to the Issue of BDT 500 million
Modern Steel Mills Limited. PMS department also provide
advisory services for the valuation of investee companies of
BD venture Limited-the first venture capitalist in Bangladesh,
where a comprehensive valuation model was developed that
suit the business strategies, financial dynamics and growth
opportunities of the promising ventures.
Investment Banking Services (IBS) of LBIL has increase its
portfolio in Arrangement Business as well as diversified the
Advisory Business. IBS has arranged BDT 2,770 Million for its
clients through Preference Share Issuance, Equity Arrangement
and Commercial Paper Issuance.
Issue Manager of Energypac Power

Generation Limited (Issue size BDT 1,500
million under book building matter)
In Advisory Business we have worked as Transaction Advisor

in divestment of a Foreign Investment and provided Valuation
advisory services for repatriation of a foreign investment. We
also engaged in Demerger, Merger and Corporate Restructuring
of local conglomerates.
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Brief about LankaBangla Organizational Overview & Code of Conduct Guiding Principles
10
LankaBangla ORGANIZATIONAL
OVERVIEW
Growing Together...
Two decades back LankaBangla Finance Limited started its journey professional wealth management services to some of its customers.
in 1997 as a joint-venture financial institution in multinational In quest of sustainable business, LankaBangla is positioning itself
collaboration with a license from Bangladesh Bank under Financial to provide enduring value to the people, customers, shareholders
Institution Act-1993. Today, LankaBangla is the country’s leading and the communities. There are other key divisions involved in
integrated financial services provider that include Corporate setting up strategic priorities and upholding the living standard of
Financial Services, Personal Financial Services, SME Financial our community. These divisions are involved among many others
Services, Liability Management, Stockbroking, Corporate Advisory in prudent balance sheet management operation and maintenance
and Wealth Management Services. of a strong IT infrastructure and recruiting as well as nurturing top-
notch human resources.
LankaBangla has implemented business process re-engineering
to build capacity for its clients’ superior service experience. LankaBangla Finance is the recipient of National Award for Best
The company now operates from a centralized administrative Published Accounts and Reports for the past few years announced
framework through cutting edge technological environment. by the Institute of Chartered Accountants of Bangladesh (ICAB).
LankaBangla is fueling a wide operational periphery covering major It also received “Best Presented Annual Report” for consecutive
business hubs of the country. three years (2014, 2015 & 2016) from South Asian Federation of
Accountants (SAFA) (an Apex body of SAARC). This is undoubtedly
Under a wide umbrella of products and services, LankaBangla is the
an igniting accomplishment and it is a reflection of ethical practices,
only financial institution to operate credit card (Master and VISA)
right compliance and a great team work.
and also provide third party card processing services to different
banks in Bangladesh. LankaBangla practices participatory management and adheres to
industry's best practices in all its endeavors. Increasing stakeholders’
LankaBangla is the market leader in the capital market services and
value is a natural driving force for the people at LankaBangla.
has been giving an all-out effort to develop an efficient, vibrant
and transparent capital market in Bangladesh. Its subsidiary, Our long-standing sustainability efforts are creating environmental
LankaBangla Securities Limited is providing top-notch brokerage and social value while we move forward. By embracing high ethical
services and leading the industry with cutting edge trading, top standards, governance, and transparency, LankaBangla dreams
rated research information, and customer service. The group to go further and grow bigger. Its ethos is simple. The company
has another subsidiary, LankaBangla Investments Limited. It is envisions its success lies in becoming the growth partner of its
a premier investment bank in the country providing corporate enterprising clients. LankaBangla is committed to empowering lives
advisory, issue management, and portfolio management services. and inspire changes in community.
LankaBangla Asset Management Company Limited is providing
CODE OF CONDUCT
GUIDING PRINCIPLES
LankaBangla is a value driven organization with strict adherence do. Complying with law is mandatory for everyone and is not
to principles even if the situation sometimes provides temporary subject to business priorities or individual decision.
benefit to the company. The guiding principles are set with the
objective of upholding the company’s reputation and dignity Personal Responsibilities
and treating them as absolutely priceless. The company’s affairs  Be an ethical role model by maintaining integrity and
get the utmost priority of all the employees. devotion to work
 Protect and enhance company’s interest, dignity and
Our reputation not only affects whether or not someone will be reputation
our customer, it also determines whether we are proud to be  Act in accordance with the highest standards,
associated with this organization. professionalism and excellence in quality output
The Code of Conduct is designed to guide the employees of  Adherence to the company’s policies, rules and regulations
the company to observe, comply with the prudential norms that obviously apply to the job
of conduct, manner and behavior. It is in alignment with the  Always act and behave like an ambassador of the company
Company’s Vision and Values to achieve the Mission and
Objectives, and aims at enhancing the ethical and transparent Workplace Responsibilities
process in managing the affairs of the Company. It also applies  Treat colleagues with respect and dignity
to every employee of LankaBangla and may be furnished  Support the company’s commitment to diversity and equal
to others for discharging the responsibilities. In addition to employment opportunity
the ethical guidelines included in the code, there are many  Provide a positive work environment free from
laws and regulations that affect each of the business that we intimidation and harassment
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Brief about LankaBangla Forward Looking Statement
11
Annual Integrated
Report 2017
 Do not hold any outside positions with, or accept  Safeguard the privacy, confidentiality and security of
business opportunities from anyone who does business or customer data
competes with the company  Make only factual and truthful statements about
 Ensure that financial records are accurate and complete company’s products and services
and also ensuring cost efficiency.  Gather business intelligence properly and ethically
 Maintain an effective system of internal control and  Prevent the use of company’s services against money
compliance over financial reporting and operational laundering purposes
activities
 Protect company’s assets and properties Corporate Citizenship
 Support all communities and optimize contributions to the
Marketplace Responsibilities society
 Act responsibly in all sorts of communications with  Protect general safety of the environment
customers, suppliers, vendors, partners and regulatory  Respond to public and cooperate with the government
authorities
FORWARD LOOKING
STATEMENT
LankaBangla Finance being a forward thinker, has been adopting  We believe product diversification is the key to achieving
advanced innovation solution with enhanced adaptability. It has customer satisfaction by meeting the tailor made needs of
enhanced its capacity with required changes to bring about a customers. Innovation would be a continuously sought out
stable, financially sound structure that exercises due care when strategy in the foreseeable future.
providing financial services to customers. As near future, the  In 2018, more emphasis will be given to running the
world is likely to have changed drastically from what we know branches more independently so that we can deliver the
now, and the planet's economic and financial landscape will be finest customer service. Branch will be the main focal
no exception. What would be that next big leap in the financial point and one stop service delivery center for business
landscape of Bangladesh, is well deemed and happening NOW acquisitions, retention and development, and for providing
in our territory. customer care and maintaining relationship with all parties.
 LankaBangla Finance group will look for success by  Cost control will be one of the top strategies for 2018. We
combining business domain, analytics, and artificial would take initiatives to reduce cost to income ratio as
intelligence(AI) experts who understand algorithms and minimum as possible.
new techniques, as well as data engineers/scientists who  Continuous monitoring will be done to restrict NPL at a
can work with cloud technology and machine learning tolerable low level. Initiatives will be taken to increase the
systems. efficiency level of Recovery & Monitoring team and Special
 In 2018, we would put high emphasis on the Retail and Asset Management Team to reduce NPL at minimum level.
SME Financial Services to achieve a fragmented portfolio  While we engage in our activities we will be maintaining strict
to diversify risk and high yield. Through establishing credit compliance and good governance in norms and regulations
delivery channels, staffed with the required skill sets, to ensure long term sustainability of the company. Putting
making improved process flow, and decentralizing credit priority in ecological balance of the environment, we plan
decisions, we will expand our business at high pace. to grow together with our stakeholders.
 With the objective of optimizing the Company’s funding
mix, we would look forward to more diversified sources of
fund. The Cost of Fund is also anticipated to come down
with the diversification of the Company’s’ funding portfolio.
ALCO will be more vibrant in 2018 to tap market level
opportunities.
 We would be upgrading our interface and functions by
using latest technology, systems and tools. This will increase
operational efficiency, reduce lead time, and speed up
customer service. It will also enable quicker information
dissemination to loan and liability clients, thereby saving
cost.
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Brief about LankaBangla Success Stories
12
LankaBangla
SUCCESS
STORIES
The tale behind Nipun Traders Creating the Legendary Legend Batteries Limited
“I always wanted to be self sufficient” – these words of When Mr. Mobarak Hossain was an employee at a
Jahanara Akhter can be seen as inspiration by women renowned battery company in the country he had
all over the country. What started as a dream turned only one goal-to learn as much about the industry
to reality with a little help from LankaBangla. Jahanara as possible. Because underneath the 9 to 5 job was
Akhter’s career started as any other, initially working the mentality of a latent entrepreneur. In 2013, with
for UNICEF on different projects. She also acquired some personal goals in mind that many people just
some experience helping with her father’s business, termed as “stubborn”, Mr. Hossain quit his job, and
which mass produced ball bearings and other such thus began his journey on his own.
mechanical products. Then, as time passed, Jahanara
looked around and saw that the scope of work for A business is often easy to perceive on pen and paper,
women was increasing in the country. The daughter but the most difficult of feats to conceive in reality.
of an established businessman, Jahanara naturally With nobody to back him up, Mr Hossain looked
wanted to start her own business. up every possible source of finance. At last, at the
suggestion of a well-wisher, he visited LankaBangla.
Jahanara initially contacted LankaBangla’s SME LankaBangla has always been a name that has
department, not being sure of what their response believed in the small but promising aspects of the
would be. LankaBangla believes in the empowerment small enterprises in the country. Mr. Hossain’s case
of women in the country and has been striving to was no different, and soon, equipped with his very
provide the necessary support to women all along. first SME Loan, Mr. Hossain set the course of his
The SME department looked into Jahanara’s business voyage towards a business he had learned the ins and
proposition. She wanted to start her own company in outs of, but this time as the captain of his own ship.
the same mechanism of her father’s company.
Legend Battery Limited started its journey in 2014.
Armed with the backing of LankaBangla, within the
Jahanara’s dreams saw the path to success when her
first three months, Mr. Hossain made sure that he
loan for 25 lakh taka was approved. And her dream
was sailing towards the right goal. A start up with
world of Nipun Traders began on the path to reality.
three employees, Legend Battery Limited soon grew
Slowly, step by step, the wheels of Nipun Traders
up to become a family of six, then outgrew every
began to turn towards a positive future. Today five
other competitor in its business realms. Today, with a
years later, Nipun Traders is a business worth 4-5 crore
business worth several crores in volume, Mr. Hossain
taka, a dazzling example of woman empowerment,
has one suggestion for everyone- “Stay motivated,
and a name in the industry as a dependable business,
stay committed, and find a partner like LankaBangla.
mass producer of ball bearings and other mechanical
Success will be yours”
products.
www.lankabangla.com
Brief about LankaBangla Corporate Information
13
CORPORATE Annual Integrated
Report 2017
INFORMATION
Registered Name of the Company LankaBangla Finance Limited
Public Limited Company, listed with Dhaka Stock Exchange and Chittagong
Legal Form Stock Exchange, having incorporated in Bangladesh on November 5, 1996
under Companies Act, 1994
Company Registration Number C-31702 (823)/96
Bangladesh Bank License No. FID(L) - 1053/41-1088
Safura Tower (Level 11)

Corporate Office 20 Kemal Ataturk Avenue, Banani, Dhaka-1213, Bangladesh
Phone: (880-2) 9883701-10, Fax: (880-2) 58810998
Company E-mail [email protected]
Company Website www.lankabangla.com
Assurance Nazir Tower, (Level-9), 65/B Kemal Ataturk Avenue, Banani,

Corporate, Personal, Liabilities & SME Dhaka-1213, Bangladesh
Financial Services Division Phone: (880-2) 9883701-10, Fax: (880-2) 8810998
Email: [email protected]
Assurance Nazir Tower, (Level-6), 65/B Kemal Ataturk Avenue, Banani,

Card Centre Phone: (880-2) 55035243-55
E-mail: [email protected]
Safura Tower (Level 8)

20 Kemal Ataturk Avenue, Banani, Dhaka-1213, Bangladesh
Contact Centre & GIS Contact Centre Number:
Local-16325, Overseas-0961101632
SMC Tower (Level 17)

33 Banani Comercial Area, Banani, Dhaka-1213, Bangladesh
Operations Division
Phone: (880-2) 9883701-10
Fax: (880-2) 58810998
Adil & Associates

Tax Consultant
50, Purana Paltan Line (3rd floor), Dhaka-1000, Bangladesh
Sadat Sarwat & Associates

Legal Advisors House # 28, Road # 23
Gulshan-1, Dhaka-1212
ACNABIN
BDBL Bhaban (Level 13 & 14)
12 Kawran Bazar Commercial Area, Dhaka-1215, Bangladesh
Auditors Phone: (880-2) 8144347-52 & 8189428-29
Fax: (880-2) 8144353
www.acnabin-bd.com
www.lankabangla.com
Brief about LankaBangla Branches and Subsidiaries
14
LankaBangla
BRANCHES AND SUBSIDIARIES OF
Branches of LankaBangla Finance Limited Branches
Assurance Nazir Tower, 65/B Kemal Ataturk Avenue

(Level-3), Banani, Dhaka- 1213, Bangladesh
Banani Branch
Phone: (880-2) 55034079-90
MIDAS Centre (8th Floor, North Side)

House No # 05, Road No # 16 (New), 27 (Old)
Dhanmondi Branch Dhanmondi-1209, Dhaka, Bangladesh
Phone: (880-2) 9114460, 9114451, 9114648, 9114574
Uttara Tower (4th Floor), Plot # 1,

Jasimuddin Avenue, Sector # 03, Uttara C/A
Uttara Branch Uttara Model Town, Dhaka- 1230, Bangladesh
Phone: (880-2) 7914230, 8931412-3
Northern Khan Height Tower (Level 3)

Plot No # 34, Road No # 03, Block # D
Section # 11, Mirpur, Dhaka-1216, Bangladesh
Mirpur Branch
Phone: (880-2) 9037841, 9037842-8, 9037851-2
Fax: (880-2) 9037848
Peoples Insurance Bhaban (10th Floor)

36 Dilkusha C/A, Dhaka- 1000, Bangladesh
Motijheel Branch
Phone: (880-2) 9514570-2, 9513714-16, 9514767-8
Hal’s Aster Anwer (14th Floor), 1728 Sheikh Mujib Road,

Agrabad Branch Agrabad, Chittagong 4100, Bangladesh
Yunusco City Centre (8th Floor)

807/1056, CDA Avenue, OR Nizam Road
CDA Avenue Branch Khulshi, Chittagong 4000, Bangladesh
Phone: (880-31) 2868901-3
Khoirun Bhaban (Level 3)

Holding No # 118, Azadi, Mirboxtula, Sylhet 3100, Bangladesh
Sylhet Branch
Phone: (880-821) 728420
Omri Mansion (3rd Floor), 349/KA (new)

Badurtola, Kandir Par, Comilla 3500, Bangladesh
Comilla Branch
Phone: (880-81) 73371-2
56/1 Jalpatty Road (2nd Floor)

Madhabdi Bazar, Narsingdi 1604, Bangladesh
Narsingdi Branch
Phone: (880-2) 9446730-31
www.lankabangla.com
15
Annual Integrated
Report 2017
Mohashin Super Market (2nd Floor)

10 R. N. Road, Jessore 7400, Bangladesh
Jessore Branch
Phone: (880-421) 71146-47
Yunus Plaza (1st Floor), 444 K.B. Hemayet Uddin Road
Barisal 8200, Bangladesh
Barisal
Phone: (880-431) 61884, 65030, 61225
Bogra Trade Center (Level-4), Dotto Bari, Borogola
Bogra 5800, Bangladesh
Bogra
Phone: (880-51) 71031-35
Sabit Sharif Bhaban (2nd Floor), 55/A BoroBazer
Mymensingh Mymensingh 2200, Bangladesh
Phone: (880-91) 62901-2
Tribune Tower (2nd floor), 2/A KDA Avenue

Khulna Khulna 9200, Bangladesh
Phone: (880-041) 731480, 731513
Ahmed Plaza (2nd floor), 182-Alo Patti, Ghoramara

Rajshahi Boalia, Rajshahi, Bangladesh
Phone: (880-0721) 771216, 771035-6
Akter Square-1 (3rd floor)

Narayangonj 68, B.B. Road, Narayangonj, Bangladesh
Phone: (880-0671) 7631342-3
Morshed Alam Complex (3rd floor),
South west corner, Karimpur Road,
Chowmuhani
Begumgonj, Chowmuhani, Noakhali, Bangladesh
Phone: (880-0321) 54411-6
5 Old Bangshal Lane, 57 New shahid Sayed Nazrul Islam Sharani (Level-3),
Dhaka- 1000, Bangladesh
Bangshal
Phone: (880-2) 9586007-9, 9513822, Fax: (880-2) 7112904
Rangolal Plaza (Level - 3), 103 Goalchamot Mouza,
Faridpur Branch Holding No. 30, North Faridpur,
Faridpur-7800, Bangladesh
Omar Ali Plaza (Level - 3),Holding No. 309, Ward No. 30, Mymensingh Road,
Board Bazar, Gazipur Kolomeshor, National University, Board Bazar, Gazipur,
Dhaka - 1704, Bangladesh
MK Tower (Level - 4), B16/1, Jaleshwar, Shimultola, Savar,

Savar
Dhaka 1340, Bangladesh
Northen Plaza (Level - 4), Goneshtola,

Dinajpur
Dinajpur-5200, Bangladesh
Hazi alimullah complex (level -3), aganagar, south keraniganj, keraniganj,

Keraniganj
Dhaka – 1310, Bangladesh
www.lankabangla.com
16
LankaBangla
Branches of LankaBangla Securities Limited
A. A. Bhaban (Level 5)
LankaBangla Securities Limited 23, Motijheel Commercial Area, Dhaka-1000, Bangladesh
(Subsidiary of LankaBangla Finance Limited) Tel: (88 02) 9563901-5, Fax: (88 02) 9563902
Web: www.lankabangla.com
DSE Annex Building (1st Floor)

9/E, Motijheel C/A, Dhaka-1000
Phone: (88 02) 9561868, Fax: (88 02) 9562207
Principal Branch, Motijheel ANNEX:
Eunoos Trade Center (Level 15)
52-53, Dilkusha, Dhaka-1000
Phone: (88 02) 9581629, 9581630
Assurance Nazir Tower (Level-6)

65/B, Kemal Ataturk Avenue,Banani, Dhaka-1213
Banani Branch
Phone: (88 02) 55035306-8, Fax: (88 02) 55035309
MIDAS Centre (8th floor)

House No: 05, Road No: 16(New) 27 (Old)
Dhanmondhi Branch Dhanmondhi, Dhaka-1209
Phone :+880-2-9112650,9137159, Fax : +880-2-9112648
Uttara Tower (4th Floor), Plot-1,

Jasimuddin Avenue, Sector-03, Uttara C/A
Uttara Branch Uttara Model Town, Dhaka-1230
Phone: (88 02) 8958575, 8951658, Fax: (88 02) 8959286
Haji Plaza (2nd Floor), 53/1, S.M. Maleh Road

Tan Bazar, Narayangonj
Narayangonj Branch
Phone: (88 02) 7632352, 7630582, Fax: (88 02) 7630560
HAL’S ASTER ANWAR, 13th floor

1398(Old), 1728(New), Sk.Mujib Road
Agrabad Branch Agrabad, Chittagong
Phone: (880-31) 2525836-8, Fax: (880-31) 2525839
E-mail: [email protected], [email protected]
Asma Chamber, 1016 (Old)

Ram Joy Mohajan Lane, Khatungonj, Chittagong
Khatungonj Branch
Phone: (880 31) 630011, 632276, 626709, Fax: (880 31) 627312
www.lankabangla.com
17
Annual Integrated
Report 2017
Rahima Center (5th Floor)

1839, CDA Avenue, Nasirabad, Chittagong
Nasirabad Branch
Phone: (880 31) 2554171-3, Fax: (880 31) 2554174
J.R. Tower (3rd Floor),Jail Road, Sylhet-3100

Phone : (880-821) 711143,711752,711912
Sylhet Branch
Fax: (880-821) 711918
Nahar Plaza (1st Floor)

67/58, Nazrul Islam Avenue, Kandirpar, Comilla
Comilla Branch
Phone: (88 081) 62117, 62109, 61768, Fax: (88 081) 62116
LankaBangla Securities Information Center

Yunus Plaza (1st floor)
Barisal Branch
444 KB Hemayet Uddin Road, Barisal-8200
Phone : 0431-63105,61641
City Centre (Level 24), 90/1

LankaBangla Investments Limited Motijheel C/A, Dhaka-1000, Bangladesh
(Subsidiary of LankaBangla Finance Limited) Phone: (880-2) 9512621, 55110910-16,Fax: (880-2) 9561107
Web: www.lankabangla-investments.com
Praasad Trade Centre, 4th Floor, 6 Kemal Ataturk Avenue

LankaBangla Asset Management Company Limited Banani C/A, Dhaka-1213, Bangladesh
(Subsidiary of LankaBangla Finance Limited) E-mail: [email protected]
Web: www.lankabangla.com
LankaBangla Information Systems Limited
LankaBangla Information Systems Limited

20, Kemal Ataturk Avenue, Level-11, Banani, Dhaka-1213
(Subsidiary of LankaBanglaSecurities Limited)
BizBangla Media Limited
BizBangla Media Limited 12, Kazi Nazrul Islam Avenue, BDBL Bhaban (Level-17), Kawran Bazar,
(Subsidiary of LankaBanglaSecurities Limited) Dhaka-1215
www.lankabangla.com
Brief about LankaBangla Group Structure
18
LankaBangla
GROUP
STRUCTURE
The Group consists of a total of six companies including the Parent LankaBangla Finance Limited(LBFL). LBFL has direct holding on
three companies LankaBangla Securities Limited (LBSL), LankaBangla Investment Limited (LBIL) and LankaBangla Asset Management
Company Limited (LBAMCL). LBFL has indirect holding on two companies LankaBangla Information System Limited (LBiS) and
BizBangla Media Limited.
LBISL
LBSL
BizBangla
LBFL LBAMCL
LBIL
The table below shows the Group Shareholding Structure of LankaBangla Finance Ltd.
Direct Indirect Total

Sl. Name Place of business
Ownership Interest Ownership Interest Ownership Interest
1 LankaBangla Securities Limited Bangladesh 90.9091767% 5.6339838% 96.5431606%
LankaBangla Investments
2 Bangladesh 99.9999964% 99.9999964%
Limited -
LankaBangla Asset
3 Management Company Bangladesh 99.9999980% 99.9999980%
-
Limited
LankaBangla Information
4 Bangladesh 96.3500742% 96.3500742%
System Limited -
5 BizBangla Media Limited Bangladesh 77.2345285% 77.2345285%

-
www.lankabangla.com
Brief about LankaBangla Business Divisions of LankaBangla Finance
19
BUSINESS DIVISIONS OF Annual Integrated
Report 2017
LANKABANGLA FINANCE
Corporate Financial Services Division
The Corporate Financial Services Division of LankaBangla is effective cash management of business. To overcome the
responsible for proving the full spectrum of corporate finance challenges of cash constraints in everyday business, the
advice to middle market businesses, both public and private. Emerging and Commercial Unit offers working capital solutions
Proper guidance to access various lease, loans and advances is to give business a positive cash flow boost − freeing up
provided to corporate and institutional clients and also providing working capital, giving the financial freedom and flexibility to
access to the company’s extensive branch network. The division grow business. These are uniquely structured working capital
delivers services through 4 (four) units, namely Corporate solutions against receivables, lifting orders, confirmed payables,
& Institutions , Project & Structured Finance, Emerging & credit advisory, collections, etc. The procedure is relatively kept
Commercial Business and Corporate liability. simple for the convenience of the clients. Through the products/
services offered by this unit, LankaBangla intends to be an active
Corporate and Institutional Unit partner in the management of the client’s supply/delivery
Corporate and Institutional unit prides at being the leader chain. The followings are the products offered by Emerging and
in providing the right funding ideas to its clients. It offers Commercial Business Unit:
a comprehensive range of lending solutions that can turn  Factoring Finance
ambition into accomplishment. The unit has a team of  Distributor Finance
professionals who works within specialized industry groups,  Reverse Factoring
enabling them to understand each client’s specific needs and
determine the most cost-effective way to access the necessary Project and Structured Finance Unit
funds. From a straightforward Term Loan to complex Club Project & Structured Finance Unit is comprised of specialized
Financing, the Corporate and Institutional Unit can help by professionals with capabilities to successfully manage the unique
providing a range of options and solutions. LankaBangla Finance and multi dimensional process of project finance transactions.
Limited combines broad knowledge of the industry with a deep The unit conducts the necessary technical, financial and economic
understanding of the unique circumstances of the client. The feasibility of all types of projects and product structuring in a
smart and experienced team will help the client to integrate customized manner as per clients’ requirements. By engaging
these two perspectives into a cohesive strategy, developing the from the very early stages of implementing projects, analysis
most appropriate financial solutions. The unit is equipped with of various perspectives as to the viability of the project can be
relationship managers with efficient management skills and taken. At the post-booking stage, monitoring the progress of the
sound knowledge of the industry and market which is necessary project implementation is undertaken. The unit devises solutions
in providing a complete range of corporate financial solutions that balance the requirements of customers, suppliers and capital
suited to the respective clients. To better understand customers, providers. Financial solutions like syndicated loan, preference
different distinct units are created each with a focus area. Each share, bond etc. are some in its wide array of services. Long
specialized group has its own Relationship Management Teams and well established relationships with the financial community
that pride themselves on their sub-specialties. Through their allows for efficient syndication of loans.
focus on industry sub-specialties, the teams have developed a
Apart from being a corporate entity with successful business
wealth of understanding about the industry. The organization
track records and sound repayment history, the entity must have
must be a legitimate corporate entity with potential business
credit sales and a minimum of one year continuous operation.
prospects in order to avail the loan facilities. Also the entity must
The followings are the products offered by Project and Structured
have a successful business track record with sound repayment
Finance Unit:
history. The followings are the products offered by Corporate
and Institute Unit:  Syndicate Finance
 Project/Infrastructure Finance
 Lease Finance
 Private Placement of Equity
 Term Finance
 Preferred Stock
 Short Term Finance
 Fixed Income Securities (Bond)
 Revolving Finance
 Advisory Service
 Loan against TDR
 Work Order Finance Corporate Liability Unit
 Club Finance LankaBangla Finance welcomes the opportunity to establish
 Bridge Finance relationships with corporate clients willing to keep their funds
 Project Finance with the company. Over the years we have received large deposits
from various corporate houses which benefited us to enrich our
Emerging and Commercial Business Unit portfolio. We understand that our corporate clients seek qualified
At LankaBangla, we understand the importance of adequate and committed financial partners for investment of their funds.
cash flow working as a blood circulation for live-running of Our endeavor to reduce dependencies on bank borrowing has
a business. With this objective in mind, the Emerging and been facilitated by collection of large corporate deposits. In this
Commercial Unit of LankaBangla Finance constantly strives to regard, we have formed a separate corporate TDR team with
provide innovative financial solutions to meet working capital professional Relationship Officers who are concentrating solely
needs of businesses. The unit helps to manage cash flow for on providing RM based services to corporate houses.
www.lankabangla.com
Brief about LankaBangla Business Divisions of LankaBangla Finance Limited
20
LankaBangla
Personal Financial Services Division following features differentiate Home Loan from that of the
The Personal Financial Service division offers a variety of competitors:
personal financial services to fulfill the needs of individuals. By  Highest loan ceiling of BDT 100 million
providing innovative, customized solutions and services, the  Loan term up to 25 years including maximum 12 months
Retail division of LankaBangla Finance is one of the leaders in moratorium period
the market of personal financial services. The division currently  EMI calculation on Monthly Reducing Balance Method
provides services through two different sectors namely Loan  Partial Prepayment or Early Settlement options at any time
Unit and Card Center. The division delivers services through on outstanding principal amount.
6 (Six) units namely Auto Loan, Home and Mortgage Loan,  Approval of home loan before purchase of apartment for
Personal Loan, Credit Card, Retail Liability and Alternative high net worth customer
 Loan disbursement during the construction stage
Delivery Channel (ADC).
 Disburse against tripartite agreement or registered
mortgage
Auto Loan Unit
 Top up facility
The Auto Loan Unit specializes in car financing for individuals  Loan takeover facility
and institutions alike. It deals with all sales, marketing, business  Semi Fixed and Variable interest rate – anyone can choose
promotional activities, as well as relationship management  Loan facilities for Non-Resident Bangladeshis
with individuals, corporate customers and auto dealers. It
also engages in customer service activities including planning, Personal Loan Unit
budgeting, target setting & allocation, and also execution,
The Personal Loan Unit offers any purpose loans for personal
monitoring & evaluation of sales deal, customer service quality,
exigencies. The unit deals with all sales, marketing, business
etc. The unit has also started providing Motor Cycle loan to
promotional activities, as well as relationship management with
individual professional and corporate houses. The loan facilities
corporate houses, and other customer service activities such
are at competitive rates with convenient repayment options.
as planning, budgeting, target setting and allocation,and also
Auto Loan of LankaBangla has the following features:
execution, monitoring and evaluation of sales deal, customer
 Loan facility up to 90% of vehicle price but not exceeding service quality, etc. Doctors Loan, Travelling loan, Marriage loan
BDT 15.00 million for individual client and Loan for Land lord/ lady are offered under this unit. Short
 Up to 100% loan facility for institution/organization term loan against lien of deposits, shares of listed companies,
 100% loan facility for the individual customer secured savings instruments etc. are also offered under this unit for
by full or partial TDR/ FDR and for the employee of any purpose. The following features make the personal loan of
specialized corporate LankaBangla a leading financial product in the market:
 Three (3) months grace/moratorium period facility for
 Highest loan ceiling of BDT 25 lac
salaried individual
 Highest loan tenure up to 60 months
 Loan tenure from 12 to 72 months
 Top up loan facility
 Loan facility for both individual and institution/
 Partial disbursement options
organizational name
 Partial prepayment option
 Early settlement & partial pre-payment facility
Home & Mortgage Loan Unit Credit Card Unit

LankaBangla is the lone Financial Institute that offers cards and
With a host of Home Loan options, the Home & Mortgage
provides third party card processing services through its state-of-
Unit aims to meet the individual needs for housing solutions.
the-art card software. Card Centre deals with issuing of MasterCard
The activities of Home & Mortgage Loan Unit include sales,
and VISA credit cards. There are mainly three categories of
marketing, business promotions, and relationship management
MasterCard-Titanium, Gold and Classic and two categories of VISA
with customers and developers. The unit provides customer
card-Gold and Classic for individual and corporate clients.
service management like planning, budgeting, target setting
and allocation, and also execution, monitoring and evaluation Place of
Sl. Name Valid in Limit Range
of sales deal, customer service quality, etc. Home loan serves business
the following purpose: MasterCard BDT 20,000 –
1 BDT Bangladesh
 To buy a new or used apartment or ready home & Classic BDT 59,999
commercial space 2
MasterCard
BDT Bangladesh
BDT 60,000 –
 To renovate existing apartment & home & commercial Gold BDT 149,999
space 3
MasterCard
BDT Bangladesh
BDT 150,000 –
 To construct apartment or home Titanium BDT 500,000
 Existing loan pay off/ loan takeover 4 VISA Classic BDT Bangladesh
BDT 20,000 –
BDT 59,999
Proposed property and/or any property acceptable to
LankaBangla may be taken as collateral. Property is required to BDT 60,000 –
5 VISA Gold BDT Bangladesh
BDT 10,00,000
be Registered Mortgage through TPA (Tripartite Agreement) or
Registered Mortgage as per Law prevailing in Bangladesh. The Corporate
6 BDT Bangladesh BDT 500,000
Card
www.lankabangla.com
21
Annual Integrated
Report 2017
The basic features of LankaBangla Credit Card are as follows: and development of Small and Medium Enterprises by providing
 Unsecured & revolving credit line credit support to potential entrepreneurs. LankaBangla Finance
 Safer substitute to cash Ltd., with the belief of ‘Growing Together’, has focused in SME
 Monthly billing on purchases & cash withdrawals business and performed well so far. Through the SME Financial
 Partial payment options Service division, the company offers various SME products based
 Card members can pay outstanding in full to avoid any on the needs of the business. The value created by this unit is
interest payments demonstrated through the unique relationship model, industry
 Minimum required payment per month: 5% or BDT 500 expertise, and local market advantage. The SME division deals
whichever is higher with all sorts of activities- sales, marketing, business promotions,
 Interest free periods – Minimum of 15 days or Maximum 45 relationship management, customer service, budgeting, target
days setting and allocation, and also execution, monitoring and
 Cash Withdrawal Facility – 50% of Credit Limit, No Interest evaluation of sales deals.
Free period on Cash Advance
 Interest calculated daily, applied monthly on billing date Some of the value addition activities of the SME Financial
Service division are as follows:
Retail Liability Unit  Flexible Collateral norms based on client’s financials,
The core objective of Retail Liability Department is to focus on business and nature of Collateral.
retail deposits. Different Liability products are being offered to  No hidden costs on loan sanction.
customers to cater their requirements. Considering the nature  Working capital limits to support growth plans and
of retail clients and to provide the best customer service through enhancements based on the client’s further requirements
strong relationships, various retail deposit teams consisting of - ranging from BDT 0.3 million to BDT 200 million.
a large pool of product marketing officers have been deployed  E-mail & Mobile alert supports to existing client.
throughout the branches all over Bangladesh. All members of  Choice of fixed tenure for repayment (12 months to 60
the teams work under predefined monthly targets. months).
SME Division of LankaBangla has created a sound footprint in
Alternative Delivery Channels (ADC) the year 2015 and it enjoyed higher growth in every parameter
LankaBangla Finance has been launched Alternative Delivery than that of previous year and is expecting to excel further. The
Channels (ADC) department with an objective to create, division is working on new product introduction, cluster analysis
develop & manage an integrated, customer focused, alternative and finding out prospective sectors. The focus on SME growth
way of customer serving, branding, business promotion and is reflected by various campaign arrangements, SME Fair, etc. A
development. dedicated team for each branch is working to develop woman
entrepreneurship in Bangladesh. LBFL is providing SME finance
ADC has started its function from 01 November 2016. At facilities to different types of sector with increased focus on
this moment, ADC is entrusted with the responsibilities of women. By availing the refinancing facility through Bangladesh
supervising, monitoring of LankaBangla website, social media Bank, LBFL is able to offer attractive rates for prospective women
(like facebook page, Linkedin page & Youtube), online leads and entrepreneurs of Bangladesh.
any other digital channels for smooth Operation & Branding for The services offered by the SME Financial Division can be
further business promotion. summarized as following:
The responsibilities of ADC are given below:  Limits offered to Small Enterprise: loan amount from BDT
 Manages leads with concerned product heads and their 0.3 million to BDT 30 million
focal points for eCRM (electronic Customer Relationship  Limits offered to Medium Enterprise: loan amount from
Management) and also with concerned branches BDT 30 million to BDT 200 million
 Concerned departments and branches address the  Collaterals: Funding against commercial, industrial,
Leads(prospective customer) immediately and update the residential property & liquid securities
follow up with ADC  Facilities offered: Term Loan, Short Term Loan, Revolving
 ADC maintains the MIS of all Leads generated through loan, Structured Finance
website and social media and contact center  Management Services
 ADC ensures all updates at LankaBangla website & posts  Fast processing and quick availability of loans
for social media and customer database  Best suited for: Retailers, Traders, Manufacturers,
Wholesalers, Distributors, Importers, Exporters, and
SME Financial Services Division Dealers
 Pre-requisites: Minimum two years business experience
Small and medium enterprises (SMEs) are acknowledged
worldwide as lifeblood of local trade, commerce and industry.
The followings are the products offered by SME Financial
With lower energy supply, lesser infrastructure facilities and
Service segment:
minor environmental risk, SMEs contribute notably to alleviation
of poverty, creation of employment opportunities, women Small Business Unit
empowerment and equitable distribution of income as well  Ahona (Unsecured loan)
as diversification of industrial sector in Bangladesh. A strong,
 Biswas (Partial Secured Loan)
vibrant financial sector can play a significant role in the growth
www.lankabangla.com
22
LankaBangla
 Anonnya (Women Entrepreneur)  Money Market Operation, i.e. Dealings with Overnight/
 Abash (Loan for Construction Mess) Placement/Treasury Line etc.
 Dealings with Govt. fixed income securities
 Durbar (Commercial Vehicle Finance)
 Striking of deals (trading) and ensuring profits from
 Somporko (Startup Finance) arbitrage dealing
Medium Business Unit  Credit relationship with Banks & FI’s
 Astha (Fully Secured)  Seeking the alternate source of fund, e.g. issuing of debt
instrument, foreign loan etc.
 Swarnali (Agro Processing Industry Finance)
 Maintenance of CRR & SLR
 Ejara (Lease Finance)
 Liquidity Management by prudent Cash Management
Treasury & FI Division  Repo & Reverse Repo dealings i.e. ALS/LS, Repo & Special
In a financial institution, fund management function is Repo with Central Bank, Interbank repo
traditionally known as treasury activities. Treasury is a financial  Investment in commercial paper and other money market
hub which operates as a financial clearing house for all other instrument to genarate revenue
parts of the organization. Funding and transaction processing
are the key activities of treasury department and therefore, it Treasury Mid Office
is known as the heart of the company and equally important
 Set up Treasury policies and strategies
for both internal and external stakeholders. Treasury ensures
the availability of funds as required at the minimum cost  Monitoring, measurement, analysis and reporting of risks
possible. Managing maturity schedules of deposits and credit namely
lines coincide with the demand for loans while ensuring the  Interest rate risks
adequate liquidity of the funds is the most crucial aspect of  Liquidity risk
treasury division. In LankaBangla, Treasury & FI division is
internally structured in four major units, namely – Asset Liability  Asset Liability Management (ALM)
Management unit, Money Market Unit, FI & Central Bank
Dealings Unit and Capital Market Unit. Capital Market Unit
Capital Market Unit at LankaBangla is responsible for formulating
Treasury performs its responsibility under two broad heads: equity and fixed income investment strategies, trading at
Treasury front office & Treasury mid office. The core functions proprietary fund and effectively managing risks thereon. The
of Treasury & FI’s are as follows: portfolio is managed following a rigorous top down-bottom up
investment process driven by economic, sector and company
Treasury Front Office fundamental research and technical quantitative analysis.
 Significant interactions with various counterparties
www.lankabangla.com
Brief about LankaBangla Subsidiaries of LankaBangla Finance
23
SUBSIDIARIES OF Annual Integrated
Report 2017
LANKABANGLA FINANCE
LankaBangla Securities Limited Brokerage Services
LankaBangla Securities Limited (LBSL) is committed to providing With an efficient trade management process and smart pool
top notch brokerage services and leading the industry with of traders, LBSL helps to minimize hidden transaction costs
cutting edge trading, top rated research and customer service. which range from market impact to delay costs to missed trade
LankaBangla Securities began as Vanik Bangladesh Securities Ltd opportunity cost. LBSL provides “Trade Execution Service” for its
in 1997 with their activities confined only within the Chittagong clients in Dhaka and Chittagong Stock Exchange. It trades in the
Stock Exchange (CSE) Ltd. A year later, they made a step ahead portfolio accounts maintained with LankaBangla Investments
and introduced themselves to the Dhaka Stock Exchange (DSE). Limited and IDLC Finance Ltd as well as providing custodial
It rebranded to LankaBangla Securities Ltd. in 2005 following a services to clients for safe custody of securities. In addition,
restructuring of the company. The company is 90.91% owned extended credit facilities are provided through margin trading
subsidiary of LankaBangla Finance Limited (LBFL) which is services. Relevant information to assess the costs and risks of
one of the leading listed non-banking financial institutions in trading is provided to give the client strength of buying and
Bangladesh engaged in Leasing, Credit Card Services, Corporate selling interest. LBSL is not merely an agent of a client’s order.
Financing, and Financial Consultancy. LBFL is owned, by a Apart from representing order to the market, the company
group of highly successful local business entrepreneurs of always takes care of every valuable transaction. This is reflected
Bangladesh- Sampath Bank Limited of Sri Lanka, One Bank in the belief “Brokerage is more than Commission.” LBSL actively
Limited of Bangladesh, and the general public. With all these assists in block trade whereby the opposite side of the trade is
on the back, our house LBSL is undoubtedly a global one which actively sought.
knows clients’ preferences, acts on their choice, and guarantees
the most comfortable investment environment while investing NITA (Non Resident Investors’ Taka Account)
in Bangladesh. LankaBangla Securities Ltd. is the leader in LBSL has been successfully providing services of NITA Trading
customer transactions. The ability to meet the demands through which Non-Resident Bangladeshis (NRBs) are able to
considering every client’s time horizon, goals, and risk tolerance transact under Non-resident Investor’s Taka Account (NITA). The
have made the company settle relations with thousands of retail company is also dedicated to using extensive resources to offer
and institutional clients all over the globe. This is reflected in new products and services to the existing clients and also to
the fact that the brokerage house is crowned as the largest in attract new clients. The choice of an object oriented approach
terms of transaction value for the 9th consecutive time in DSE and using the latest technology has given them the flexibility
and 10th in CSE in 2014. At LBSL, people specialize in developing to extend their product and service range as well as ensuring
the country’s most efficient stock brokerage workforce with performance, security and scalability.
unmatched skills and consummate perfectionism. Also, in
whichever corner of the country the customers are, LBSL gets Internet Trading Services
them covered with their 10 branches spread in the leading LBSL has adopted internet trading facilities for its distance clients
cities and towns. Quality, convenience, and reliability are some for trade execution. LBSL’s step toward internet trading is not
things that LBSL provides the customers at the highest level only enriching the door of potential clientele but also ensuring
and which the customers can expect from their brokers. This the company’s participation in the overall development of
is the key as LBSL has a strong network of key clients all over Bangladesh Capital Market. With an understanding of the need
the world. Furthermore, the local and international recognitions of information as source of quicker decision making, LankaBangla
from financial institutions, custodian banks, corporations, Securities Ltd. is the first to launch a full-fledged financial portal
international fund managers, and other fellow brokers for its in Bangladesh. LankaBangla Financial Portal is designed to bring
professionalism has laid the foundation of strength and further all possible information to the client’s doorsteps. From market
success. Apart from NITA trading, LankaBangla Securities Ltd. news to DGEN graph and from Economic Indicators to various
(LBSL) is offering trading facilities to foreign institutional clients Analyst Tools, everything is available in this information hive.
comprising of different funds, international brokers, banks, etc. As the portal is updated on a real-time basis, one can never
who are interested in trading Bangladeshi securities. Throughout fall behind. The portal is intended to provide a fast and cost
the world, any client of an international broker can trade in the effective way for a company to deliver shareholder value, over
Bangladesh Capital Market through LBSL. To make it better, LBSL and beyond expectations, and stay ahead of BSEC legislation.
foreign trade execution team has a Bloomberg terminal on its LankaBangla Financial Portal is providing “Investor Relationship
dedicated foreign trade desk which connects the team with Pages” so that companies can add value to their company
every fund manager around the globe assuring 100% compliant websites by strengthening the investor relationship section.
trading for the foreign clients. Possessing a strong equity base, LBSL provides the necessary solutions by delivering complex
LBSL focuses on the diversification strategy following which LBSL financial data and news correctly and consistently to all the
has made an equity participation in BizBangla Media Limited stakeholders of a company at the same time.
which is publishing the country’s first Bengali business daily Activities of the World class Investor Relation Pages through
‘The Daliy Bonik Barta’. Besides, LankaBangla Securities Limited LankaBangla Portal are as follows:
is one of the directors of MIDAS Financing Limited, a renowned  Keep existing shareholders transparently informed and
financial institution. LBSL has already initiated establishing an engaged with the financial progress of the company.
independent IT subsidiary LankaBangla Information Systems  Become the focal point for the client’s financial information
Limited. towards potential investors.
www.lankabangla.com
Brief about LankaBangla Subsidiaries of LankaBangla Finance Limited
24
LankaBangla
 Stay compliant with BSEC regulations. Cutting Edge IT Infrastructure

 Transparency and engagement, driving economic growth. With IT endeavor, LankaBangla Securities Ltd. has successfully
 Investors can obtain all Investor Relations contents from implemented Enterprise Resource Planning (ERP) in its
the relevant Listed Company Website. entire sister ventures. Apart from this, the other most recent
 The listed company could choose to subscribe to a few or all implementation and development of LBSL IT includes the Tier
data services provided by LankaBangla Financial Portal. II Data Center, Market Data Service with Financial Information
 Once subscribed, LankaBangla Financial Portal would Exchange (FIX), deployment of Oracle Database Appliance
provide i-frames for each service. (ODA) for the first time in Bangladesh, and introduction of
 I-frames are customizable in themes to match the look and Strong Backup System with EMC Avamar aimed for ensuring
feel of the listed company website. data availability. In 2013, the 24-hour call center (16325:
 I-frames should be integrated on to the company website. local; +8809611016325: international) got opened up. Most
 LankaBangla Financial Portal will assume full responsibility importantly, LBSL’s IT advancements have found new heights
for maintaining the services and providing updated through recognition in the Oracle website. Also, the group
information to the clients. website for LankaBangla got launched by end of the year. As part
of the ongoing ventures, Fixed Assets’ QR Coding is going on
Foreign Trading Services across the 25 branches of the company spreaded countrywide.
LBSL has in place world-class equity trading platform for Much effort has been put to reorganize the back office software
foreign institutional investors. It has dedicated foreign trading as well. The implementation of the OMS (Order Management
team with separate booth especially for foreign trade with System) for direct market access (DMA) is on process and the
access to Bloomberg terminal on the trading desk. The team team is closely working on it with the Chittagong Stock Exchange
stays connected 24X7 with foreign clients ensuring smooth (CSE); investors will get the flavor of DMA through LBSL OMS
communication, efficient execution and successful settlement very shortly. This is the first time in Bangladesh to provide DMA
by maintaining maximum confidentiality. Fulfilling the clients’ through Broker House instead of exchange provided application.
needs has always been the top most priority for the company. It offers multi-channel e-trading to its customers (web, mobile,
and client server) and advantages of Multi Asset Class (Equity,
CDBL Services Derivatives, Bond, Commodity, etc.) trading option, smart
LBSL operates as a Full Service DP at both DSE and CSE. Apart order routing, multiple exchanges and Cross Border supported
from their BO Account Opening and Maintenance services, application, MIS & centralized risk management. It has ability to
they provide their clientele with De-materialization and create interfaces to other systems such as accounting systems
Re-materialization services. They offer safe transfers and banking solutions and depository systems; and real time access
transmission through CDBL as well as they provide their charting with strategies, indicators and patterns. The Algo
customers with customized services related to Pledging, Un- trading (VWAP, TAWP, POV, IS, etc.) and STP-Gate/FIX protocol
pledging and Confiscation of Securities. supported system is the advanced option for the futuristic
capital market. It requires Ultra low latency bandwidth and
Research Services configurable network architecture for Broker and Investors.
LBSL firmly believes in the knowledge based investment in the The LBSL OMS is the open platform to integrate with other
capital market to keep pace with the advanced market and stock exchange trading engine. It is the new milestone for the
sophisticated clients. Apart from efficient and effective brokerage capital market in Bangladesh. Dealers and inventors can place
services, LBSL is backed by the strength of a comprehensive the order based on conditions and strategies using real time
Research Unit, which provides a range of services from technical analysis and risk management.
company, industry and country research to corporate valuation.
One of the important functions of LBSL is to carry out capital New Products of LankaBangla Securities Limited
market research for themselves and their valued customers.
LBSL IPO
Their Research & Analysis Department is one of the most
important departments solely dedicated to these functions. The Thanks to the online interface provided by LankaBangla
Capital Market Research Department is continually generating Securities Limited, investment in IPO is now an easy activity. An
knowledge based reports on the overall capital market, the investor does not have to go through the hassle of waiting in
macro economy, and the individual companies listed on the line for hours with application. Rather, investment can be made
stock exchanges. The team puts its effort to analyze the capital in IPO online, irrespective of the location. For investing in IPO
market along with the fundamental and technical indicators of online, a registered customer just needs to select the IPO, and
listed securities of DSE and CSE. The approach is to understand the IPO will be processed automatically. In other words, LBSL
the psychology and trend history of the market, and most takes full responsibility once the IPO application form has been
importantly the actions of investors. The flagship magazine submitted. Alternatively, LBSL allows the option to physically
“Market Pulse” published from the Publication Department come to its office and fill out the IPO application form.
has continued drawing attention and appreciation from readers
here and outside the country. Other efforts involve publishing LBSL Easy Investment Plan (EIP)
Daily Market Report, Weekly Market Report, Macro Economic Regardless of age, income and experience, similar to a deposit
Review, Sector Updates, Specific Company Valuations, and IPO pension scheme, Easy Investment Plan (EIP) facilitates a simple
analysis. and convenient way of investing in the stock market.
www.lankabangla.com
25
Annual Integrated
Report 2017
LBSL Premium Corporate Advisory

To value its premium clients, LankaBangla Securities Limited. The pursuit of a long term financial goal begins with a
provides a suite of exclusive equity investment privileges and Corporate Advisor who can help you reach it. Armed with a
services not available elsewhere. With LBSL premium account, deep understanding of your distinctive needs, LBIL as Corporate
an investor will always remain on top of his investments. Advisor can plan and execute strategies from the products and
services of Investment Banking suite.
LBSL Beginner
Equity is an important asset class to participate in the underlying Bond Issuance
growth story of the country, industry and company. But LankaBangla Investments Limited combines expertise on
investment in equity requires in depth knowledge and analysis debt origination and structuring with established distribution
about different variables which an investor finds difficult to capabilities to a large base of investors. The origination team
process. LankaBangla Securities Ltd. provides an investor works directly with issuers, including corporations, banks and
with the necessary information and knowledge, and provides other entities that seek funding. LBIL advises these clients on
confidence to invest. debt financing strategies from a wide range of Bond Structures.
LBSL Halal Alternative financing

LBSL Halal has been designed to accommodate the value of a LBIL provides Issue Management and Subscription Arrangement
client’s special circumstances. Many investors want to make in case of Preference Share issuance, Commercial Paper issuance
the stock market investment sharia compliant and thus LBSL and Equity arrangement through Private Placement. With the
facilitates the investor with a list of Sharia Compliant Companies market insight and expertise LBIL provides best possible services
(Baskets) included in DSE shariah index where necessary to its clients.
investment can be made.
Mergers and Acquisitions
LankaBangla Investments Limited (LBIL) LankaBangla Investments Limited acts as the financial advisor
LankaBangla Investments Limited is a premier investment bank for all transections related to Merger or Acquisitions, whether
in the country providing corporate advisory, issue management the client is the bidder or the target. Our service starts from
and portfolio management services. It is a fully owned subsidiary designing the scheme to Post-merger compliance.
of LankaBangla Finance Limited, one of the leading Non-Banking
Financial Institutions in Bangladesh. LBIL was incorporated in Joint Advisory Services
Bangladesh with the Registrar of Joint Stock Companies and
Firms (RJSCF), vide registration no. C 83568/10 dated 29 March LBIL provides Advisory services for the Joint Venture projects.
2010 as a Private Limited Company under the Companies Act, Regular services under this segment includes aligning both
1994. LBIL inherited its merchant banking operation from its local and foreign investors, assisting in legal and regulatory
parent company, LankaBangla Finance Limited, which was the compliances, research support for both the investors, designing
first merchant bank to offer discretionary portfolio management the financial structure of the joint venture etc. Notable
services back in 1997. The Company obtained Merchant achievements of the Investment Banking Services (IBS) of
Banking license (registration certificate no. MB-57/2010) from LankaBangla Investment Ltd. are as follows:
the Securities and Exchange Commission on 2 January 2011 and  Successfully issued and arranged fund of BDT 400 million
spun off its merchant banking operation as a separate company. through preference share issuance for Doreen Power House
Later on the company converted itself into a public limited & Technologies Limited (DPHTL). BSEC accorded consent
company with effect from 12 June 2013. LBIL has positioned for raising capital through preference share issuance of
itself prominently in investment banking arena of Bangladesh DPHTL in 2015. The Investment Banking team acted as the
through its wide range of services including Primary Market Lead arranger of the issue and successfully completed the
Services and Portfolio Management Services. Financial Closing in 2016
 The Investment Banking team prepared the Feasibility
LBIL has competent human resources with a combination Report on PowerPac Economic Zone under Corporate
of experience, diversified knowledge, and knowledge on Advisory Services provided to PowerPac Holdings Limited.
regulations, which makes LBIL a major force in investment This feasibility report was first ever feasibility report for
banking business of Bangladesh. Our human resources are well an Economic Zone under PPP model completed by any
capable of providing optimum financial solutions for our clients. investment banks in Bangladesh
LBIL values on long term sustainable business operation and  SSD-TECH operates in VAS and ISP Business and is considered
relationship with clients. We provide tailored financial solution as one of the leading VAS providers. IBS team prepared the
for client with in-depth analysis. valuation report on SSD-TECH under Corporate Advisory
Services. It was a completely new experience for LBIL to
Services of LankaBangla Investments Limited complete a valuation report of a company operating in VAS
LBIL offers a wide selection of Investment Banking Services industry
for institutional clients seeking to raise finances for business  Ajinomoto Bangladesh Limited is foreign entity operating
development, to merge with or acquire another business, to in Bangladesh. The IBS team provided Corporate Advisory
re-structure for better performance, or to grow business by Services for BDT 210 Million Foreign Equity arrangement of
exploring new territories. Ajinomoto Bangladesh Limited
www.lankabangla.com
26
LankaBangla
Primary Market Services Value Added Services

LBIL provides assistance to institutional clients seeking to raise We offer value added services which are unique, 1st time in
funds through Issue Management, Capital raising & Private Bangladesh and Global Standard. It includes:
Placement business. The Primary Market Services Team has  Compliance Guideline
wide range of experiences in managing different types of  IPO Readiness
issues across various industries, leading to obtaining of indepth  Customized Equity Financing Strategy
knowledge of the regulatory framework and processes. Since the beginning from 2015, Primary Market Service
department of LBIL have successfully completed a number
Capital Raising for Private & Public Ltd. Companies of landmark transactions worth around BDT 7,650 million
Services include Transaction feasibility analysis, Capital Raising, including 4 Initial Public Offer and 2 Rights Offer for reputed
Pricing & Valuation, Negotiating with Investors, and Effective conglomerates in diversified sectors.
Project Management to successful closing.
Portfolio Management Services
Issue Management Portfolio management refers to investment in diversified types
LBIL assists companies with good growth potential and excellent of assets such as different equity securities and bond securities.
business ideas to raise fund through initial public offering. With Two types of accounts are available in LankaBangla Investments
the finest issue management services LBIL not only aids clients Ltd. One of them is discretionary portfolio account, “AlphaPlus”
to increase the value of their companies but also assists in (managed by Investment Team of LBIL) and other one is Non-
increasing the supply of quality shares in the capital market. Discretionary portfolio account (Managed by clients). In the
LBIL acts as issue manager for Private Placement, Initial Public portfolio management services, LBIL do vast research and
Offering (IPO), Direct Listing, Rights Offering and Repeat Public maintain proper combinations of securities that gives maximum
Offering (RPO). return with minimum risk for LBIL discretionary clients.
LBIL’s portfolio management service is designed to provide
Corporate Advisory Services personalized, secure and simple financial solutions for a wide
Our Corporate Advisory Services in this segment include: range of investors, who wish to enhance their opportunities
 Capital Restructuring: Our expert team of professionals is
while minimizing their administrative burden. With an objective
adept in rebuilding the existing capital structure of client’s of introducing new investment avenue for potential investors
Company which will derive optimum value in changing under the Discretionary Portfolio Management Services,
business conditions. Our methods are especially focused Investment Banking Services of LBIL developed new Product
on improving the operational efficiency of the client named “LankaBangla Nishchinto” in end 2015. This product is
 Financial Consultancy: We provide in-depth and complete designed to facilitate the investment in capital market, through
financial solutions which include advice, guidance and a monthly investment scheme like DPS. This new product has
service to the issuer especially in ensuring compliance added strength to the discretionary product portfolio of LBIL.
related to financial disclosure requirements
 Feasibility of IPO: We determine the feasibility of an IPO Discretionary Portfolio Management
given the company’s fundamentals including business In the ever changing capital market, managing investment has
model and management capability, growth potential and become an increasingly complex and time consuming process for
market size, financial track record, shareholders’ objectives a company or an individual to handle in isolation. For effective
etc. investment, one has to go through the hassle of following tons
 Post Issue Services: The transformation from a private of financial data and market information continuously. LBIL
company to a public enterprise is a life-changing process for provides Discretionary Portfolio Management Services which
any organization and it will continue long after the actual
relieves the investors from the hassles and burden of following
IPO transaction. Our Post Issue Services ease the activities
market information as well as investment management. LBIL
of the company that has gone public
 Company Valuation: In the quest for discovering the offers three Discretionary products for its clients.
economic value of an owner’s interest in business, we
conduct business valuation, where we consider the AlphaPlus (Investments Best Managed)
relevant industry and business aspects along with historical Discretionary Portfolio Management Service offers a number
performance and future growth of the business entity of benefits to clients. It frees them from the burden of making
 Corporate Governance Structuring: We assist companies to day-to-day investment decisions, which may be better made by
adapt its internal structure to meet the requirements of the a qualified portfolio manager who is attuned to the vagaries of
Corporate Governance framework guideline authorized by the market. Delegating the investing process to a competent
the regulators manager leaves the client free to focus on his/her priorities.
Efficient trade execution by LBIL team also ensures optimum
Underwriting benefit for the client.
LBIL provides underwriting services for public issues to create
efficiencies in the capital markets and reduce risk for Public AlphaPlus INITIAL
Issues, Repeat Offering and Rights Issue. LBIL has underwritten Some potential investors having small savings left for investment,
a large number of issues in various industries. faces problem in making investments, as their
www.lankabangla.com
27
Annual Integrated
Report 2017
investment amount in most cases is too small for investment strict investment processes that are followed are in the best
in secondary market and little opportunity is available to invest interest of the clients.
that small amount in fixed income securities. Moreover, the The investment approach of LBAMCL is founded on the belief
potential return from investment in fixed income securities is that both fundamental and technical analyses are related to
very low. On a condition like this, AlphaPlus INITIAL will pave the returns. Special attention is given to minimize downside volatility
way of investment in primary market with least hassle for those while evaluating the risk embedded in portfolio construction.
investors and reducing risks arising out from secondary markets. LBAMCL takes benefits of the tactical asset allocation in the
short or midterm but maintains the strategic asset allocation in
LankaBangla Nishchinto the long term.
LankaBangla Nishchinto is a monthly savings instrument with
monthly fixed deposit for 3 years, which will be invested in Products and Services of LBAMCL
selected Blue Chip stocks, Mutual Funds and Fixed Income
instruments. Any individual can start LankaBangla Nishchinto LBAMCL offers various investment choices, including mutual
funds, discretionary portfolio management, provident fund
by depositing minimum BDT 5,000 each month for three years.
management etc. Followings are the financial products offered
Profit along with the invested amount will be distributed to the
by LBAMCL:
client after maturity.
Non-Discretionary Portfolio (IPA Scheme) Closed-end Mutual Fund

A closed-end fund is a publicly traded fund that raises a fixed
LankaBangla Investments provides comprehensive
amount of capital from sponsors, institutional investors and
nondiscretionary services including trade execution and margin
from initial public offering (IPO). The fund comes with a fixed
loan under its Investors Portfolio account called ‘IPA Scheme’.
number of units and the units can only be purchased and
We are capable of executing proper and efficient trades through
sold in the market. LBAMCL manages different closed-end
our designated sister concern ‘LankaBangla Securities Limited’,
mutual funds with different investment strategies like current
the largest stock broker of the country. income, balanced growth capital appreciation etc. Extensive
research and fundamental analysis is undertaken to achieve the
LankaBangla Asset Management Company Limited investment objectives of the funds.
(LBAMCL)
Established in 2007, LankaBangla Asset Management Company Unit Fund
Limited is a 99.99% owned subsidiary of LankaBangla Finance In the unit fund, the investors can buy or sell as much amount
Limited, one of the leading NBFIs in Bangladesh. It received its
license from Bangladesh Securities and Exchange Commission as they want. The fund has virtually no limit of units. The buying
(BSEC) on June 24, 2012 to operate as a full-fledged asset or selling price of a unit is always tied to the Net Asset Value
management company. LBAMCL is the official asset management (NAV) of that unit. It is not traded in the stock exchanges but
wing of LankaBangla group, and is deeply committed to providing can be bought or sold very easily from selling agents. LBAMCL’s
client driven solution and superior risk adjusted performance to management of open end mutual funds is also based on specific
its valued clients. Backed by the group’s strong operating history strategies as per the demand of different type of investors. Units
and strong footprint in the financial sector LBAMCL makes can be bought or sold in any working day from a list of easily
continual investments in the asset management and client available selling agents.
service platform, resulting in a client-focused, solutions-driven
orientation. LBAMCL values original thinking, due diligence, first Discretionary Portfolio Management
hand research and investment discipline. By keeping the target LBAMCL offers the service of discretionary portfolio
investors in focus, it opts to become one of the leading asset management where experienced and seasoned portfolio
management companies in Bangladesh very soon. managers take investment decisions to manage clients’ money.
Risk-return profiles of the investors are carefully extracted. The
The mission of LBAMCL is to provide a diverse array of investment
investment policy statement (IPS) are then prepared, and the
choices and the best possible investment management service
fund managed according to the investor specific IPS. LBAMCL
to investors and institutions. also builds portfolio according to different investment style and
LBAMCL is focused to meet the professional investment investors can put funds in any style specific portfolio. The fund
management demand of a wide range of Investors. It will management fee structure of LBAMCL is very competitive.
undertake management of funds of institutional investors like
banks, insurance companies, other financial institutions, and Islamic Shariah based Products
other corporate bodies as well as funds of the high net worth There is a heavily growing demand of Islamic Shariah (IS) based
individuals. With LBAMCL, a client can stay focused on what products. Keeping this in mind LBAMCL offers a full range of IS
matters to long term success. Smart decisions are ensured based products for both institutional and individual investors.
by providing the information and perspectives to the clients, LBAMCL’s IS based products and services range from mutual
thereby increasing the chances of success. LBAMCL has utmost funds of both closed-end and open end types to discretionary
dedication towards superior service, outstanding performance, portfolio, provident fund, and investment advisory services. An
low costs, and commitment to integrity, loyalty, and respect for independent Shariah council provides and updates approved IS
the investors. It ensures that the investment principles and the based securities to best serve the clients’ needs and demand.
www.lankabangla.com
Brief about LankaBangla Finance Limited Subsidiaries of LankaBangla Finance Limited
28
LankaBangla
Provident Fund, Pension Fund, and Gratuity Fund Market Data Service
Management This is a FIX protocol based server side engine. This disseminates
Employees are the key to building a successful organization. To DSE market data to subscribed FIX clients and clients can feed
attract and retain employees for the long term, an organization it to its simulation engines to demonstrate the market. This is a
offers contributory provident fund and gratuity fund to new concept and LBIS is the first to implement it in Bangladesh.
employees. On behalf of the organization and the employees In other words, LBis is the pioneer in this arena. This is a
LBAMCL offers provident fund, pension fund and gratuity fund complete solution and it is delivered to Vienna Stock Exchange
management services. LBAMCL have the size, scope and expertise to meet the requirement of Swiss Pro Invest.
to meet the clients’ specific requirements, which include liability
matching, accounting solutions and growing assets for meeting Project Management
obligations well into the future. LBAMCL helps to minimize the
clients’ funding volatility while systematically improving the LankaBangla Information System focuses on helping small and
funding positions of their portfolios, and providing research mid-sized businesses to manage their IT infrastructures and
tailored to the specific needs of the organizations. It also help software implementations. It has a well reputation of working
an organization build such fund for the first time, and to look with clients to maximize their returns on IT investment. All
after the regulatory affairs like taking permission of NBR for a LBIS team members are trained in professional IT project
recognized provident fund or pension fund. management tools and techniques. This ensures that the clients
are working with a team of experienced and knowledgeable
Financial Planning Services Engineers who have experience working with a broad range of
Different individuals have different investment bases and IT systems. LBIS team members assist clients in every aspect of
different liquidity needs. Different organizations have different IT planning, procurement, implementation and operation. The
asset-liability structures. With this in mind, LBAMCL offers team of expert consultants can help with all of the following IT
financial planning services for both individual and institutional issues:
clients. It provides advice on appropriate asset allocation  Information Technology
strategies on the basis of risk return profile and different  IT Project Management
constraints of the investors.  Systems Analysis and Design
 Market Data Service
LankaBangla Information System Limited (LBiS)
LankaBangla Information System is a leading information Consultancy
technology service provider in the country. LBIS started its LankaBangla Information System Consulting can give you
journey on May, 2013. LBIS’s strong base of expertise and the business analyses you need and follow through with
technical know-how is built on the firm belief that “Technology implementation. LBIS can deliver a depth of resources
Serves the Business”. This belief enables us to deliver IT services unsurpassed by other firms. We have the flexibility to deliver
that match and grow with clients requirements as they evolve. solutions quickly and cost-effectively. Our confidence in our
LankaBangla Information System is an IT Management Services ability to think ahead makes us willing to be measured against
outsourcing and consulting company providing IT solutions, any business outcomes. This means that with LankaBangla
project management and comprehensive infrastructure support Information System Consulting, you get the advantage of future
and monitoring. With well understanding of the communications thinking - along with the advantage of being your partner or
industry, access to current and emerging technologies, mature future endeavours. LBIS Consulting provides services through
development processes, global resources and a proven track
following practices:
record, LBIS creates complete solutions to help clients succeed.
In today’s world, organizations will have to quickly reengineer  Project Management
themselves and be more responsive to changing customer  IT Audit
demands. LBIS is well positioned to be a partner and coinnovator  IT Services
to businesses in their transformation journey, identify new  Software Procurement
growth opportunities and facilitate their venture into new
sectors. The value is in the unification of proven experiences, Cloud Services
skilled expertise and defined thought leadership. In this constant and rapidly evolving cloud market, the battle for
dominance is raging. Infrastructure, Platform and Software as
Products and Services of LankaBangla Information Service providers are all locked in an increasingly competitive
System fight for service superiority and market share. The scalability
Virtual Office Dynamics and rapid deployment characteristics of a cloud environment
can be the perfect solution for many of clients’ applications. To
ERP is an enterprise re-engineering solution that uses new
determine exactly where, when and how cloud infrastructure
business computing paradigms to integrate IT processes across
company divisions and departments. LBIS has developed a web should be implemented, however, thorough analysis of the
based ERP (HR, Payroll, Fixed Asset etc.) solution namely Virtual level of security, control, customization and support of the
Office Dynamic (VOD) which is currently running in LankaBangla customers’ applications is required. LBIS also provides physical
Finance Limited, LankaBangla Securities Limited, LankaBangla and logical space at state of art data center to share server/data
Investment Limited and LankaBangla Asset Management to its clients. LBIS cloud service includes Software as a service
Company Limited. (Saas), Platform as a service (Paas), Infrastructure as a service
www.lankabangla.com
29
Annual Integrated
Report 2017
(Iaas), Data as a service (Daas) and Backup as a service (Bass). sustainable growth in quality business reporting and large
Server Management and Storage as a service is also a part of clientele base, thereby leading to a strong market positioning
LBIS cloud service. in the market. Today this highly regarded business daily has an
extensive network of circulation across the major operation i.e.
Outsourcing business hubs/outlets across the country. In the recent years
with a consolidated effort and prudent Management leadership,
Information Technology outsourcing has become a popular
BizBangla has attempted to position itself within the top
trend since the beginning of the millennium. Due to better cost
performing (Bengali) business newspapers in Bangladesh. This
incentives and high availability of skilled resources, outsourcing has resulted to emergence as one of the major Department of
has gained momentum to a scale that it has become a global Film & Publications (DFP) compliant organizations. This rating by
standard in software development. LBIS provides solutions to its the DFP provides a very important indication of the integrity and
clients in time and in budget, helping them to quickly adapt to strength of the organization and the concerned Newspaper and
changing needs of their businesses. With technologies changing is particularly relevant to its ultimate readers/ consumers and
at rapid speed, LBIS continues to remodel its applications other stakeholders such as the strategic partners, shareholders
through migrations, integration and development services. and lenders. Value adding activities for BizBangla Media are as
Within the outsourcing model, offshore web application, follows:
software development, and custom application development  Placing the trade & commerce sector’s interest and
services are provided to clients. LBIS prides in being the best IT satisfaction as first priority by providing updated, full proof,
outsourcing companies in Bangladesh on custom application & scrutinized information
software product development.  Adding value to the stakeholders through attaining
excellence in daily operation
Mobile Application Development
 Maintaining high ethical standard and transparency in
Mobile technology has progressed significantly since the advent publication
of Apple iPhone and iOS platform. All users whether enterprises
 Being a compliant institution through adhering to all
or others want to be connected all the time. Businesses are
regulatory requirements
now looking to build competitive advantages by expanding the
reach of essential business and consumer information to the  Contributing significantly to the betterment of the society
fingertips of the users. LankaBangla Information System has A commitment to be a partner to the growth of the nation
a good understanding of the mobile application development strong and reliable partnership with the trade and commerce
processes. We have focused our efforts in the three most community, the Government Sector, the MNCs has led to a
popular operating systems and platforms - Apple iOS, Google broader opportunity to serve the market. Through the extensive
Android, and Microsoft Windows Phone OS. level of news coverage network, focus on Generalized News,
Telecom & Technology, the Editorial, International Trade, the
BizBangla Media Limited Global Business, the Commerce & Industry and the Financial
BizBangla Media Limited is an 80% owned subsidiary of Institutions Industry, Life Style, Talkies, the Commodities Market,
LankaBangla Securities Limited, a leading brokerage service the Stock Market, Sports and the Domestic Market, BizBangla
company in Bangladesh. BizBangla Media Ltd. is committed to Media Ltd. offers a smooth service across all the major operating
publishing the country’s first Bengali business daily ‘The Daliy hubs wherever there is a bureau present. All this is seamlessly
Bonik Barta’. Since 2011, Bonik Barta (BB) has been ensuring done by the efficient employees of the company.
www.lankabangla.com
Brief about LankaBangla Product Portfolio of LankaBangla Finance
30
LankaBangla
PRODUCT PORTFOLIO OF
LANKABANGLA FINANCE
PRODUCT PORTFOLIO
Corporate Personal SME Financial

Financial Services Financial Services Services Liability
Corporate & Auto Loan Small Business Retail / Corporate

Institution Liability
Auto Loan Ahona
Lease Finance Periodic Return
Auto Lease Term Deposits
Term Finance Biswas
Auto Loan
Cash Covered Cumulative
Short Term Finance Term Deposits
Auto Lease Anonnya
Cash Covered
Short Term Double Money Term
Transitory Finance Deposits
Home & Abash
Revolving Finance
Mortgage Loan Money Builders
Scheme
Loan Against TDR Commercial Durbar
Home Loan
Work order Finance Fixed Term Deposit
Loan Against Somporko
Property
Club Finance Home Loan Term Deposit
BB Refinance Earn First
Bridge Finance
Home Plan Finance Medium Business Term Deposit
for Professionals Shohoj Sanchoy
Project Finance
Affordable Housing Astha
Finance Term Deposit
Quick Sanchoy
Emerging & Personal Loan
Swarnali
Commercial Term Deposit Triple
Term Money
Factoring Ejara
Loan- Commercial
Term Deposit (Fixed
Loan Against Term)-3 Months
Reverse Factoring Deposit
Term Loan- Term Deposit Agroj
Distributor Finance Cashback Security (Senior Citizen)
Marriage Loan
Term Deposit Classic
Project and Doctor's Loan TDR 2 to 3 Years
Structured Finance
Loan for
Syndication Finance Land Lord / Lady
Project/Structured Demand Loan
Finance
Private Placement Travelling Loan
of Equity
Preferred Stock Credit Card
Fixed Income
Securities Master Card
Loan Against TDR VISA
www.lankabangla.com
Brief about LankaBangla Projects Financed by LankaBangla
31
PROJECTS FINANCED BY Annual Integrated
Report 2017
LANKABANGLA
Power Generation Plant Ship Building
Steel Manufacturing Plant Spinning Mill
Textile Mill Washing Plant
Ready-Made Garment Oil Refinery Plant
www.lankabangla.com
Brief about LankaBangla Projects Financed by LankaBangla
32
LankaBangla
AN EVENTFUL YEAR FOR
LANKABANGLA
20th AGM of LankaBangla The Directors of LankaBangla Finance on Audit Committee Meeting
The Directors of LankaBangla Securities on Audit Committee The Directors of LankaBangla Investments on Audit Committee
Meeting Meeting
The Directors of LankaBangla Asset Management Company on The Directors of LankaBangla Finance on Board Meeting
Audit Committee Meeting
The Directors of Securities on Board Meeting The Directors of Asset Management Company on Board Meeting
www.lankabangla.com
Brief about LankaBangla An Eventful Year for LankaBangla
33
AN EVENTFUL YEAR FOR Annual Integrated
Report 2017
LANKABANGLA
The Directors of LankaBangla Investment on Board Meeting LankaBangla Finance Corporate Office Ground Breaking
ICAB National Award SAFA Best Presented Annual Report Awards
Business RM Meeting Womens Day 2017
SME Night 2017 Football Fest 2017
www.lankabangla.com
Brief about LankaBangla An Eventful Year for LankaBangla
34
LankaBangla
AN EVENTFUL YEAR FOR
LANKABANGLA
Sales Night Dhaka 2017 Pohela Baishakh Art Compitition 2017 Dhaka
Branch Launching Program Gazipur LankaBangla Seedstar 2017 Program
Town Hall 2017 Branch Launching Program Keraniganj
Branch Launching Program Savar REHAB Winter Fair 2017
www.lankabangla.com
35
AWARDS AND Annual Integrated
Report 2017
RECOGNITIONS
This is undoubtedly an igning accomplishment that will work as an inspiration for us to reach the summit
of success. It is a reflection of our ethical practices, true compliance and a great team work.
SAFA Best Presented

Annual Report
Awards 2016
ICMAB Best Corporate ICAB National Award

Award 2016 for Best Presented
Annual Reports 2016
www.lankabangla.com
Brief about LankaBangla Milestones
36
LankaBangla
MILESTONES
Our Journey so far
21 years of achieving and sustaining excellence
1 Nov
Trading of Shares in
Stock Exchanges
05 Nov 16 Aug 31 Oct

Incorporation of Issuance of First Listing on Chittagong
the Company Credit Card Stock Exchange
05 Nov 30 Mar 17 Oct 18 Feb

Commencement Signing of First Listing on Dhaka First Disbursement
of Business Lease Agreement Stock Exchange of Mortgage Loan
1996 1997 1998 2005 2006 2007 2008 2009
03 July 05 Sep 10 Feb 27 Apr

Registration of First Launching of Commencement Commencement of
Subsidiary (LBSL) MasterCard of Operation of Operation of Sylhet
Chittagong Branch Branch
30 Oct 16 July 23 Nov

Licensed as a Registration of Second Licensed as Primary
Financial Institution Subsidiary (LBAMCL) Dealer
by Bangladesh Bank
11 Dec 24 Nov
First Disbursement of Issuance of First
Domestic Factoring VISA Card
01 Dec
First Particiapation in
the Auction of
Govt. Securities as
Primary Dealer
www.lankabangla.com
37
Annual Integrated
Report 2017
26 Dec
Issuance of Zero Coupon Bond
11 Dec
Commercial Launching 31 Oct
of Dhanmondi Branch Approval of Right Issuance by BSEC
12 Nov 31 Mar
Commercial Launching Commercial Launching
of Banani Principal of Keraniganj
Branch
27 Apr
Commercial Launching of Board
13 Feb 29 Jan Bazar-Gazipur Branch
Commercial Launching Commercial
of Jessore Branch Launching of 04 May
Mirpur Branch Commercial Launching of
Dinajpur Branch
03 Feb 24 May
Commercial Launching Commercial 18 May
of Comilla Branch Launching of Commercial Launching
Bogra Branch of Faridpur Branch
29 Mar 28 Jan 24 June 25 May

LankaBangla Commercial Launching Commercial launch Commercial Launching
Investments Ltd. of Narsingdi Branch of Barisal Branch of Savar Branch
2010 2012 2013 2014 2015 2016 2017
21 Jan 09 Mar
Launching of Commercial launching of
31 Jan Contact Center Mymensingh Branch
Approval of Right
Issuance by BSEC
03 Mar 14 Mar
Commercial Launching Commercial launching of
10 Jan of Uttara Branch Khulna Branch
Signing of Agreement
with Leads Corporation
for Bank Ultimus (CBS) 25 May 21 Mar
Commercial Launching of Commercial launching of
CDA Branch, Chittagong Rashahi Branch
15 Dec 31 July
Issuance of Commercial launching of
Zero Coupon Bond Narayanganj Branch
23 Dec 31 July
Commercial Launching of Commercial launching of
Motijheel Branch Chowmuhani Branch
23 Dec 24 Oct
Commercial Launching of Increase of Authorized
Motijheel Branch Capital to BDT 10,000 million
www.lankabangla.com
38
CORPORATE
LankaBangla
GOVERNANCE
Our practice to remain within the Shareholding Structure 39
guideline for strategic and steady journey Profiles of the Directors of the Board 40
towards progress is being governed by Board Committees and MANCOM 45
our percipient leaders harmonized by
Profiles of the Management Team 46
our Board of Directors and the Chairman.
This practice ensures transparent and Organogram of LankaBangla Finance 54
winning corporate governance for Message from the Chairman 55
LankaBangla. Directors' Report 57
Statement on Corporate Governance 70
Certification on Corporate Governance 84
Board Audit Committee Report 95
Statement on Directors’ Responsibilities 98
Directors' Statement on Internal Control 99
Management Credit Committee Report 100
Human Resources & Remuneration Committee Report 101
Responsibility Statement of MD and CFO 103
Statement on Ethics and Compliance 105
Corporate Governance Disclosure Checklist 106
www.lankabangla.com
Corporate Governance Shareholding Structure
SHAREHOLDING 39
Annual Integrated
STRUCTURE Report 2017
As on December 31, 2017
Authorised Capital: No. of Share Taka

(Ordinary Shares of TK. 10.00 each) 1,000,000,000 10,000,000,000
Paid up Capital: No. of Share Taka

(Ordinary Shares of TK. 10.00 each) 318,250,941 3,182,509,410
Details of shareholding structure is as under:
Sponsor Total Holding (No. of Share) % of Shareholding
a) Foreign Institution:
Sampath Bank PLC (Sri Lanka) 30,143,437 9.47%
Sub-Total 30,143,437 9.47%

b) Local Institution:
ONE Bank Limited 12,026,719 3.78%
Sub-Total 12,026,719 3.78%

c) Individuals:
Mr. Mohammad A Moyeen 13,491,355 4.24%
Mrs. Aneesha Mahial Kundanmal 24,513,161 7.70%
Mr. Mahbubul Anam 14,174,230 4.45%
Mr. Tahsinul Huque 12,399,383 3.90%
Mrs. Jasmine Sultana 46,000 0.01%
Sub-Total 64,624,129 20.31%
Sponsor Local 76,650,848 24.09%
Sponsor Total 106,794,285 33.56%
General Shareholders 211,456,656 66.44%
Grand Total 318,250,941 100.00%
www.lankabangla.com
Corporate Governance Profiles of the Directors of the Board
40
LankaBangla
PROFILES OF THE
DIRECTORS OF THE BOARD
MR. MOHAMMAD A. MOYEEN

Chairman
Nationality: Bangladeshi
Board
Committee(s): Chairman of Board Executive Committee & Member of Board Audit Committee
Academic /
Professional Bachelor of Architecture degree from Bangladesh University of Engineering and Technology
Qualification(s):
Present Air Line Cargo Resources Limited, Arrow Aviation Limited, Anyeshan Limited, AVS Cargo Management Services
Directorship(s): Limited, APS Logistics International Limited, BizBangla Media Limited, Bengal Meat Processing Industries
Limited, Colloid Enterprises Limited, Cross Freight Lines Limited, Cross Freight Limited, Datafort Limited, Expo
Express Services Limited, Expo Holdings (BD) Limited, Freight Care Aviation Services Limited, First Forwarding
Limited, Freight Options Limited, Global Aviation Services Limited, Interairsea Limited, Innoweb Limited,
Infosapex Limited, LankaBangla Investments Limited, LankaBangla Information System Limited, LankaBangla
Securities Limited, S.G Logistics (Pvt.) Limited, Standard Paper Products Limited, STS Educational Group Limited,
STS Holdings Limited, Swift Logistics Services Limited, The M & M Limited, Tropica Garments Limited, UCL
Logistics Limited, Uniworld Logistics Limited, Voytech Limited, WAC Logistics Limited, Wings Express Limited,
Wings Logistics Limited, Wings Ocean Freight Limited, Wings Aviation Limited, Wings Spence Aviation Limited,
Wings Tours & Travels Limited, Wings Classic Tours & Travels Limited.
MR. I. W. SENANAYAKE
Director (Representing Sampath Bank PLC)
Nationality: Sri Lankan

Board
Committee(s): N/A
Academic /
Professional Graduated in Technical Engineering
Qualification(s):
Present American President Lines Lanka (Pvt.) Limited,

Directorship(s): I.W.S. Holdings (Pvt.) Limited.
www.lankabangla.com
41
Annual Integrated
Report 2017
MR. NANDA FERNANDO

Director (Representing Sampath Bank PLC)
Nationality: Sri Lankan

Board
Committee(s): N/A
Academic /
Professional He is an Associate member and a Senior Fellow member of Institute of Bankers of Sri Lanka and holds Masters
Qualification(s): of Business Administration degree specializing in Marketing from Sikkim Manipal University, India.
Present Managing Director of Sampath Bank PLC, Director of Lanka Financial Services Bureau Limited, a Governing
Directorship(s): Board Director of the Institute of Bankers of Sri Lanka and a Director of Lanka Clear (Pvt.) Limited.
MR. MAHBUBUL ANAM

Director
Board
Committee(s): Member of Board Executive Committee & Board Audit Committee
Academic /
Professional Bachelor of Architecture degree from Bangladesh University of Engineering and Technology
Qualification(s):
Present Allied Aviation Bangladesh Limited, Air Line Cargo Resources Limited, Airlines Services Limited, Aramex Dhaka
Directorship(s): Limited, Aeroness International, Anyeshan Limited, Aristeus Agriculture Limited, BizBangla Media Limited,
Bengal Meat Processing Industries Limited, Bollore Logistics Bangladesh Limited, Cargo Centre Limited, Colloid
Enterprises Limited, Datafort Limited, Expo Freight Limited, Expo Express Services Limited, Eastern Cables
Limited, Expo Holdings (BD) Limited, Freight Care Aviation Services Limited, First Forwarding Limited, Global
Aviation Services Limited, Interairsea Limited, Innoweb Limited, Infosapex Limited, LankaBangla Securities
Limited, LankaBangla Information System Limited, Orchid Air Limited, Masco International Limited, S.G Logistics
(Pvt.) Limited,Standard Paper Products Limited, STS Educational Group Limited, STS Holdings Limited, The M
& M Limited, Tropica Garments Limited, UCL Logistics Limited, Voyager Airlines Limited, Voytech Limited,WAC
Logistics Limited, Wings Spence Aviation Limited,Wings Classic Tours & Travels Limited, Wings Express Limited,
Wings Ocean Freight Limited.
www.lankabangla.com
42
LankaBangla
MR. M. FAKHRUL ALAM

Director (Representing ONE Bank Limited)
Board
Committee(s): Member of Board Executive Committee & Board Audit Committee
Academic /
Professional MBA from the Institute of Business Administration (IBA), University of Dhaka
Qualification(s):
Present
Directorship(s): N/A
MR.TAHSINUL HUQUE
Director
Nationality: British (Original Nationality-Bangladeshi)

Board
Committee(s): N/A
Academic /
Professional Mr. Huque graduated from Williams College, Massachusetts, USA with major in Economics and Political Science
Qualification(s):
Present
www.lankabangla.com
43
Annual Integrated
Report 2017
MRS. ANEESHA MAHIAL KUNDANMAL

Director
Board
Committee(s): N/A
Academic /
Professional Mrs. Kundanmal has completed B.A. (Honors) in Public Administration from University of Dhaka
Qualification(s):
Present
Directorship(s): Royal Park Residence, GDS Chemical Bangladesh
MR. AL MAMOON MD. SANAUL HUQ

Independent Director
Board
Committee(s): Chairman of Board Audit Committee & Member of Board Executive Committee
Academic / Mr. Huq accomplished his post-graduation diploma in Management Accounting from Highbury College of
Professional Technology, Ports-mouth, UK. He has also completed his Bachelor of Science and Master of Science in Applied
Qualification(s): Chemistry from University of Dhaka.
Present Independent Director of LankaBangla Securities Limited, LankaBangla Investments Limited , LankaBangla Asset
Directorship(s): Management Company Limited.
www.lankabangla.com
44
LankaBangla
MRS. ZAITUN SAYEF

Independent Director
Board
Committee(s): Member of Board Audit Committee
Academic /
Professional MBA from Institute of Business Administration (IBA) of Dhaka University
Qualification(s):
Present
MR. KHWAJA SHAHRIAR

Managing Director & CEO
Board
Committee(s): N/A
Academic / Mr. Shahriar completed his BA (Hons’) and MA in English from University of Dhaka. He also obtained his
Professional Bachelor of Business in Banking and Finance from Monash University, Melbourne and Master of Business
Qualification(s): Administration in Finance from Victoria University, Melbourne, Australia.
Present
www.lankabangla.com
Corporate Governance Board Committees and MANCOM
45
BOARD Annual Integrated
Report 2017
COMMITTEES
Executive Committee
Sl. No. Name Status in the Organization Status in the Committee
1 Mr. Mohammad A. Moyeen Chairman Chairman
2 Mr. Al Mamoon Md. Sanaul Huq Independent Director Member
3 Mr. M. Fakhrul Alam Director Member

(Representing ONE Bank Limited)
4 Mr. Mahbubul Anam Director Member
Audit Committee
Sl. No. Name Status in the Organization Status in the Committee
1 Mr. Al Mamoon Md. Sanaul Huq Independent Director Chairman
2 Mr. Mohammad A. Moyeen Director Member
3 Mr. Mahbubul Anam Director Member
4 Mr. M. Fakhrul Alam Director Member

5 Mrs. Zaitun Sayef Independent Director Member
MANAGEMENT COMMITTEE (MANCOM)

Sl. No. Name Designation Status in the Committee
1 Khwaja Shahriar Managing Director Chairman
2 A. K. M. Kamruzzaman Head of Operations Member
3 Khurshed Alam Head of Personal Financial Services Member
4 Quamrul Islam Head of Treasury & FIs Member
5 Mohammed Kamrul Hasan Chief Risk Officer Member
6 Mostafa Kamal Group Company Secretary Member Secretary
7 Kazi Masum Rashed Chief Credit Officer Member
8 Mohammad Shoaib Head of Corporate Financial Services Member
9 Shamim Al Mamun Chief Financial Officer Member
10 Sheik Mohammad Fuad Head of ICT Member
11 Mohammad Faruk Ahmed Bhuya Head of Asset Operations Member

12 Md. Kamruzzaman Khan Head of SME Financial Services Member
13 Md. Shariful Islam Mridha Head of Human Resources Member
14 Ummay Habiba Sharmin Head of Legal Member
15 Muhammad Habib Haider Head of GIS Member
www.lankabangla.com
Corporate Governance Profiles of the Management Team
46
LankaBangla
PROFILES OF THE
MANAGEMENT TEAM
01 02
01. 02.
Khwaja Shahriar A. K. M. Kamruzzaman, FCMA
Managing Director & CEO Head of Operations
Mr. Khwaja Shahriar joined LankaBangla Finance as Managing A. K. M. Kamruzzaman, FCMA, is working as the Senior Executive
Director on May 21, 2017. Prior to that he was the Deputy Vice President & Head of Operations, with the responsibility of Asset
Managing Director and Head of Business of LankaBangla Operations, Collection & Monitoring, Special Asset Management
Finance since June 2012. Before joining LankaBangla Mr. (SAM), Liability Operations, Treasury Operations, Asset Accounts
Shahriar worked in various Banks and Financial Institutions for Maintenance, Closing & Clearance and MIS & Regulatory Reporting.
almost two decades. He served BRAC Bank Limited for almost During his long fifteen and half years’ tenure with LankaBangla, he
a decade in different positions and capacity including Head has got the rare opportunity to work in almost all the functional
of Corporate Banking, Head of Cash Management and Head areas of the company in different capacities as Head of Business,
Head of Credit & Investment, Head of Credit Administration, Head
of Probashi Banking. He also served in various positions in
of Accounts, Company Secretary and Head of Administration.
both GSP Finance Company Limited and Bangladesh Finance
He is a nominated Director in the Board of LankaBangla Asset
& Investment Company Limited. Mr. Shahriar also worked
Management Company Limited.
for Uttara Bank Limited, AB Bank Limited and Green Delta
Insurance Company. Mr. Kamruzzaman is a post graduate in Accounting from the
University of Dhaka; he is also an MBA from the Institute of
Mr. Shahriar attended a good number of trainings, workshops Business Administration (IBA) of the University of Dhaka and a
and seminars at home and abroad including USA, UK, Dubai, Fellow Member (FCMA) of the Institute of Cost & Management
Hong Kong, India during his long professional career. Accountants of Bangladesh (ICMAB). Currently he is the Chairman
He obtained his Bachelor of Business in Banking & Finance of Dhaka Branch Council (DBC) of ICMAB.
from Monash University, Melbourne and Master of Business
Administration in Finance from Victoria University, Melbourne, MC RMF MCC ALCO CCU ITDC HRC
Australia. He also completed his BA (Hons’) and MA in English BIC PC ICCC IC
from University of Dhaka.
MC RMF MCC ALCO CCU ITDC HRC

BIC ICCC CMFC IC
Management Committees
MC Management Committee ITDC IT Development Committee ICCC Internal Control and
(MANCOM) Compliance Committee
RMF Risk Management Forum HRC Human Resource Committee CMFC Capital Market
Operations Committee
MCC Management Credit Committee BIC BASEL II Implementation GBU Green Banking Unit
Committee
ALCO Asset Liability Committee (ALCO) PC Purchase Committee IC Integrity Committee
CCU Central Compliance Unit (Anti

Money Laundering Committee)
www.lankabangla.com
47
Annual Integrated
Report 2017
03 04 05
03. 04. 05.

Khurshed Alam Quamrul Islam Mohammed Kamrul Hasan, FCA
Head of Personal Financial Services Head of Treasury & FI Chief Risk Officer
Khurshed Alam, Senior Executive Quamrul Islam, Senior Executive Vice Mohammed Kamrul Hasan, Executive Vice
Vice President joined the then Vanik President joined erstwhile Vanik Bangladesh President and Chief Risk Officer heads
Bangladesh Limited in July 1998. He Limited on October 7, 1997 which was later the Risk Management Division which is
is currently looking after the Personal renamed as LankaBangla Finance Limited. responsible for managing the Enterprise
Financial Services Division. As a long term During his tenure of office he held different Risk at LankaBangla and its subsidiaries.
serving employee, he worked in various positions and looked after the functions Mr. Hasan was appointed as Vice President
departments of the Company including of Finance and Treasury. Currently he is in February 2007. He possesses extensive
Finance, Administration, HR, Portfolio discharging the responsibility as Head of experience in Accounting, Auditing and
Management, Credit Card, Home Loan, Treasury & Financial Institutions. Finance.
SME Finance, Auto Loan, Personal Loan Mr. Islam obtained his graduation with Mr. Hasan holds a Bachelor Degree in
and Secured Loan. Honors and post graduation in Accounting Accounting from the National University
Mr. Khurshed started his career in 1992 from the Faculty of Business Studies of Dhaka of Bangladesh. He is a Fellow member of
as a Probationary Officer-Finance & University. He started his career with “PRAN the Institute of Chartered Accountants of
Accounts in Rupali General Insurance Group” one of the largest conglomerates Bangladesh (ICAB).
Company Limited. He obtained his of the country as a Management Trainee
Honors and Masters in Management Officer in early 1997. Mr. Quamrul is the MC RMF ALCO CCU
from the University of Dhaka. He also got Joint Secretary of Bangladesh Money Market
Dealers' Association (BAMDA). BIC ICCC GBU IC
his Post Graduate Diploma in Personnel
Management (DPM) from Bangladesh
Institute of Management. He has MC RMF ALCO CCU
attended a good number of training,
ITDC BIC PC ICCC
workshop and seminar in home and
abroad. CMFC
MC RMF MCC ALCO
CCU ITDC BIC ICCC
IC
Committee

www.lankabangla.com
48
LankaBangla
06 07 08
06. 07. 08.

Mostafa Kamal, FCA Kazi Masum Rashed Mohammad Shoaib
Group Company Secretary Chief Credit Officer Head of Corporate Financial Services
Mostafa Kamal, Executive Vice President, joined LankaBangla Kazi Masum Rashed, Executive Mohammad Shoaib, Executive
in February 2009. Currently, he is working as the Group Vice President, Chief Credit Vice President, joined LankaBangla
Company Secretary of LankaBangla Finance Limited and its Officer, is responsible for Finance as Assistant Vice President
subsidiaries. He also worked in the company as Head of HR Credit Risk Management in May 2007. He is currently working
and Administration. Mr. Kamal completed his B.Com. (Hons.) Division of LankaBangla as the Head of Corporate Financial
and M.Com. in Accounting from University of Dhaka. He is a Finance Limited. He joined Services Division looking after the
Fellow member of the Institute of Chartered Accountants of LankaBangla Finance Limited Corporate Asset & Liability Portfolio.
Bangladesh (ICAB). Prior to joining in LankaBangla he was the in June, 2011 with more Mr. Shoaib has around 15 years of
Head of ICC of IPDC of Bangladesh Limited and also served than ten years experience in financial services experience and held
Rahman Rahman Huq, Chartered Accountants, (Member banking sector with exposure various senior management positions
Firm of KPMG International) as Manager, Audit and Advisory
in Credit and Foreign Trade. in credit & investment, corporate
Services from September 2003 to June 2006.
finance, retail finance, SME finance,
Mr. Masum obtained his
Mr. Kamal held the position of the Chairman of Dhaka credit administration and corporate
M.Com from Finance and
Regional Committee of ICAB for the year 2010-2011. He has liability. Prior to joining LankaBangla,
been elected Council Member of ICAB for the term 2016- Banking Department and
he was the Branch In-charge of
2018. He was elected Vice President (Education & Training) MBA from the Institute of
Chittagong Branch of Prime Finance &
of ICAB for the year 2017. Mr. Kamal played a very vital role Business Administration (IBA)
Investment Limited. He is a Bachelor in
in opening Dhaka Chapter of Information System Audit and of the University of Dhaka.
Business Administration with Honors
Control Association (ISACA) of USA. He is the Founder Director, He has attended a number
in Accounting and a Master’s in
Communication and Ex-Director, Academic Relations of ISACA of trainings, seminars and
Business Administration in Accounting
Dhaka Chapter. workshops both in home and
& Information Systems from the
abroad.
Mr. Kamal is also a Founder Member and the General University of Dhaka. He has attended
Secretary of Vision Care Foundation (a non-profit MC RMF MCC a good number of trainings, seminars
organization). He is the Executive Director and a member and workshops both in home and
of Policy Advisory Committee of Bashundhara Eye Hospital ALCO ITDC HRC abroad.
and Research Institute, a non-profit and most modern Eye
Hospital in Bangladesh. Currently, Mr. Kamal is Government BIC ICCC IC MC RMF MCC ALCO
nominated Board Member in two state owned organizations
namely Bangladesh Cable Shilpa Limited and Telephone Shilpa CCU BIC ICCC IC
Sangstha Limited.
MC PC ICCC
Committee

www.lankabangla.com
49
Annual Integrated
Report 2017
09 10 11
09. 10. 11.

Shamim Al Mamun, FCA Md. Kamruzzaman Khan S. M. Abu Washib
Chief Financial Officer Head of SME Head of Corporate Liability Management
Shamim Al Mamun, FCA brings 10 Md. Kamruzzaman Khan, Senior Vice S. M. Abu Washib Joined LankaBangla
years of professional experience in President joined LankaBangla Finance Finance Limited as Head of Corporate
various institution. He is working as Limited as Head of SME in December Liability on December 26, 2013. Prior to his
Chief Financial Officer of Lankabangla 2013. He is currently working as the Head current position he held different positions
Finance since April 2013. Before of SME of SME Financial Services Division. in the banking sector & has more than
joining this Company, he was the 13 years of experience with exposure in
Mr. Khan has over 14 years of Banking and
CFO & Company Secretary of Fareast Consumer Banking. He served ICB Islamic
Financial Services experiences. Prior to
Stocks & Bonds Limited. He is a Fellow Bank Ltd. for quite some time as an Assistant
joining LankaBangla Finance Limited, he
member of the Institute of Chartered Vice President & Branch Manager. He also
served in BRAC Bank Limited under SME
Accountants of Bangladesh (ICAB). served Eastern Bank Ltd as an Assistant Vice
Division in different positions including
President and Sales & Service Manager for
He obtained his Bachelor degree in Manager and Senior Manager. Mr. Khan
over six years. At the beginning of his long
Computer Science from American has obtained an M. Com in Accounting
successful career he also served in Vanik
International University of Bangladesh and also attained an MBA from State
Bangladesh Limited & BRAC Bank Ltd.
(AIUB). He is also an ex-cadet and University of Bangladesh with Major in
completed his secondary education Finance & Banking. He participated in Mr. Washib completed his Bachelor &
from Sylhet Cadet College. Mr. Shamim advance training programme on Financing Master degree in Economics from Dhaka
possesses extensive competencies SMEs in NIBM, Pune (India) organized International University.
and experiences in Strategic Planning jointly by Frankfurt School of Finance and
& Forecasting, Process design and Management, Germany. Currently Mr. Khan MC RMF ALCO CCU
Productivity improvement, Financial also participated in strategic Planning &
Governance & Modelling, Financial Thinking programme on SME financing in BIC ICCC IC
Reporting and Financial Management. SIM (Singapore). Mr. Khan also attended
He is also a resource person of a good number of trainings, seminars and
ICAB in the capacity of providing workshops both in home and abroad.
training to students and in the
process of educational development. MC RMF MCC ALCO
MC RMF ALCO CCU CCU BIC ICCC IC
HRC BIC ICCC IC
Committee

www.lankabangla.com
50
LankaBangla
12 13 14
12. 13. 14.

Mohammad Faruk Ahmed Bhuya Sheik Mohammad Fuad Md. Shariful Islam Mridha
Head of Asset Operations Head of IT Head of Human Resources
Mohammad Faruk Ahmed Bhuya joined Sheik Mohammad Fuad, Head of Md. Shariful Islam Mridha, Head of Human
LankaBangla Finance Limited on April 01, Information & Communication Technology Resources, has been working in LankaBangla
2013. He is currently working as Head Division, has been working in LankaBangla Finance since 2014. Prior to joining
of Asset operations and responsible Finance Limited since 1999. He has LankaBangla Finance, he was the Head of
to take care of Loan Documentation, more than 15 years of experience in IT Recruitment, Performance Management and HR
Disbursement, Credit Card Operation, Operations, IT Project Management, IT Relationships of BRAC Bank Limited. He started
Post Dated Cheques (PDC) and Un-dated Governance and Risk Management. As his career in 2005 with a renowned law firm
Cheque (UDC) management. Prior to this, the Head of ICT, Mr. Fuad is responsible for ‘Sadat & Sarwat Associates’ and later switched
he was working as manager at BASIC Bank enabling various business requirements to Human Resource Division of Grameenphone
limited in different branches and divisions through development and successful Limited in 2006. He possessed almost 11 years of
as well as at Head Office from June 2000 deployment Information Technology professional experience in the arena of Human
to March 31, 2013. He started his banking features. He also contribute to the strategic Resources.
career in 1999 with Prime Bank Limited as planning of the organization as a member
Mr. Mridha obtained his Bachelor of Laws (Honors)
a Management Trainee Officer (MTO) . Mr. of the Management Committee.
and Master of Laws from University of Dhaka. He
Bhuya is a post graduate in Management Here in LankaBangla Mr. Fuad is also did his post-graduation diploma in Human
from the University of Dhaka. leading a team of highly professional Resources Management from Association of
He brings with him 17 years of long and personnel experienced in various wing of Business Practitioners (ABP), UK through Dhaka
diversified banking experience in Credit, Information & Communication Technology Campus. He attended American Management
Trade Finance and General Banking. Mr. such as Infrastructure & Network, ICT Association’s 5-day “MBA” workshop from
Bhuya attended a number of professional Security & Risk, Application & Database Singapore Institute of Management (SIM),
Training, workshops and seminars at home Management, Project Management. Singapore. He also completed 6 week weekend
and abroad. He is a Diplomaed Associate course on “Human Resource Management
Mr. Fuad has attained professional Competencies (HRMC)” from IBA, University
of the Institute of Bankers, Bangladesh credentials such as ITIL(F), COBIT 5, PRINCE
(DAIBB). Mr. Bhuya is a widely travelled of Dhaka. Currently, he is enrolled in Master of
2, MCP, CDCP. Professional Human Resource Management
person.
(MPHRM) Program under faculty of Business
MC RMF ITDC PC Studies, University of Dhaka. He has attended
MC RMF MCC HRC various job specific and leadership trainings in
ICCC home and abroad.
IC
MC ITDC HRC ICCC IC
Committee

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51
Annual Integrated
Report 2017
15 16
15. 16.
Ummay Habiba Sharmin Muhammad Habib Haider
Head of Legal Affairs Head of GIS
Ummay Habiba Sharmin working as Head of Legal Affairs Muhammad Habib Haider, Head of GIS, is responsible for
Division of LankaBangla Finance Limited is entrusted with the General & Infrastructure Services Division of LankaBangla
responsibility to oversee the legal issues of the Company. She Finance Limited. He has joined LankaBangla Finance in February
joined 2015. Prior to joining LankaBangla Finance Limited, he served
in BRAC Bank Limited under GIS Division in different roles.
LankaBangla in the year 2009 as Head of Legal and
He has over 10 years’ experiences in Banking and Financial
Documentation. Prior to joining LankaBangla, she worked
Institution sector with exposer in supply chain, logistics, and
as an advocate at a renowned corporate law firm namely
projects. He obtained his Honors degree from University of
Lee, Khan & Partners. As a practicing lawyer, she worked
Dhaka and MBA from Southeast University. He has attended a
with numerous local and multinational banks, financial
number of trainings and workshops both in home and abroad.
institutions, corporate bodies of the country regarding various
legal matters like acquisition, due diligence, loan and security MC PC RMF
transactions, trust-agency transactions, commercial issues,
labour law issues, litigation etc. She was involved in plentiful
large project financing of various modalities.
Ms. Habiba is a post-graduate in law from University of
Chittagong and is an enrolled advocate at the Supreme Court
of Bangladesh with around 13 years of experience in the legal
profession.
MC
Committee

www.lankabangla.com
Corporate Governance Mancom Members
52
LankaBangla
MANCOM
MEMBERS
LankaBangla is a value driven organization with strict adherence to principles even if the situation sometimes provides
temporary benefit to the company. The guiding principles are set with the objective of upholding the company’s
reputation and dignity and treating it as absolutely priceless. The company’s affairs get the utmost priority of all the
employees.
Sitting Standing from the left

Ummay Habiba Sharmin Mohammad Shoaib
Head of Legal Affairs Head of Corporate Financial Services
Standing from the left Quamrul Islam
Head of Treasury & FI
Mohammad Faruk Ahmed Bhuya
Head of Asset Operations S. M. Abu Washib
Head of Corporate Liability
Md. Shariful Islam Mridha
Head of Human Resources Khurshed Alam
Head of Personal Financial Services
Muhammad Habib Haider
Head of GIS
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53
Annual Integrated
Report 2017
Sitting Standing from the left

Khwaja Shahriar Mohammed Kamrul Hasan, FCA
Managing Director & CEO Chief Risk Office
Standing from the left Sheik Mohammad Fuad
Head of Information & Communication Technology
A. K. M. Kamruzzaman, FCMA
Head of Operations Kazi Masum Rashed
Chief Credit Officer
Shamim Al Mamun, FCA
Chief Financial Officer Kamruzzaman Khan
Head of SME Financial Services
Mostafa Kamal, FCA
Group Company Secretary
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Corporate Governance Organogram of LankaBangla Finance
54
LankaBangla
ORGANOGRAM OF
LANKABANGLA FINANCE
Board of Directors
Board Audit Committee
Chairman
Board Secretariat
Managing Director
Risk Management Credit

Risk Management
Deputy Managing Director
Treasury & FI's
Finance & Accounts Corporate Financial Service
Operations Personal Financial Services
Information & SME Financial Services

Communication Technology
Human Resources Branch Distribution & Management
Legal Affairs Brand Marketing & Communications
General & Infrastructure Service
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Corporate Governance Message from the Chairman
55
MESSAGE Annual Integrated
Report 2017
FROM THE CHAIRMAN
Dear Stakeholders,
I begin my message with a sense of gratitude and pride about has reached to BDT 85,443 million at the end of 2017 from BDT
LankaBangla Finance Limited that has grown stronger over the 64,044 million at the end of 2016 showing 33.41% growth year-
course of time. It is indeed a proud moment for me to present on-year basis. Our consolidated investment portfolio grew 27.95%
to you the audited financial statements of LankaBangla Finance and stood at BDT 72,014 million at the end of the year.
Limited for the year 2017. On behalf of the Board of Directors and
everyone from LankaBangla, I welcome you all to the 21st Annual In addition to keeping a clear focus on customers and clients, our
General Meeting. growth strategy includes growing within a clear risk framework
so that we can maintain our balanced, stable and financially
Bangladesh economy continued to show a solid performance in strong platform. It means we proactively and thoroughly assess
2017. One of the major achievements of the economy has been risk and reward so that we can provide sustainable returns to our
7.28% economic growth in FY 2016-17 breaking the six percent shareholders over time. During 2017 loans, leases, and advances
cycle that continued for a decade. Major boost of growth has come increased by 29.86%; whereas NPL declined to 2.85% from 3.22%
from the industrial sector followed by the services sector. Though in 2016, which demonstrates our focus on growing the right way.
interest rate remained considerably low during most part of the
year, in the later part of 2017 interest rates were on an upward Capital Adequacy Ratio (CAR) stood at 11.95% on consolidated
trajectory led by scarcity of liquidity in the market. Bangladesh basis against regulatory requirement of minimum 10.00%. At the
Bank initially continued its accommodative monetary stance for beginning of 2018 we have issued Rights share which will have
H1FY18, but eventually has adopted a somewhat contractionary a positive impact on the capital base of the Company. We have
monetary policy for H2FY18. taken necessary measures to remain compliant, in line with the
regulatory requirements, with regard to forecasted future growth.
You will be happy to know that LankaBangla Finance Limited
reported strong results for the year 2017 with consolidated To grow our business and to reach out to more customers and
profit after tax of BDT 1,926 million i.e. BDT 5.97 per share. The cater our services we have expanded our distribution network
Company reported ROA of 2.58% and ROE of 25.66%. Net profit and opened five new branches in 2017. We will continue to widen
after tax increased 142% compared to the previous year. The our reach through extended branch network by launching five
standalone net profit after tax increased by 26.19% from the prior more branches in 2018 at major townships and industrial hubs of
year and amounted to BDT 1,353 million. Consolidated total asset the country.
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Corporate Governance Message from the Chairman
56
LankaBangla
We strongly believe that our most important long-term We duly acknowledge the
competitive advantage is our people. Our commitment to attract contribution of our human
and retain the most talented people in our industry and beyond is resources who have delivered
of vital importance to the company and the perennial foundation the results by working tirelessly
of our success. I am pleased to report that LankaBangla Finance to meet customers’ expectations.
Limited remains a highly attractive place to work. We work hard On behalf of the Board, as well as
to make LankaBangla a place where our people can have long and personally, I would like to thank
successful careers. We have a history of investing in our people them all for their dedication
at every level, in number of training sessions and leadership and commitment. I extend my
development programs to our continuous work on talent mobility. profound gratitude to Bangladesh
We understand that the success of our company is directly
Bank, Bangladesh Securities and TOTAL ASSETS
linked to the success of our communities. For us, corporate Exchange Commission, Dhaka increased by
33%
responsibility is a strategic imperative. We see corporate Stock Exchange Limited, Chittagong
responsibility as an opportunity to work to advance societal Stock Exchange Limited, Registrar
needs. We have continued our support to underprivileged people of Joint Stock Companies and
of the community to ensure their health, shelter and education Firms, National Board of Revenue
through LankaBangla Foundation. Through conscience corporate and all other regulatory authorities
governance and effective business model we have contributed for their valuable guidance,
towards a sustainable society. support and cooperation.
Taking into account our current capital structure and future I am proud of the progress that we
business plan, the Board has recommended 7.50% cash dividend have made during the year 2017
and 7.50% stock dividend for the year 2017. We realize that our and excited about the opportunity
dividend pay-out ratio is slightly low compared to previous years, for even more progress in the
but we will reap the benefit of ploughing back more resources in year ahead. We anticipate new
growing the business in the coming days. challenges in 2018 from political
developments, tightened money
ICT division is constantly working towards the development and supply and regulatory matters.
implementation of new technologies to enable the organization Nevertheless, we firmly believe that
to meet future market demand. The year 2017 was special year the diverse challenge of tomorrow
for the Company in the arena of technological advancement. opens up new opportunities for
Our operational activities were upgraded with integration of further growth and progress. On OPERATING
advanced IT based solutions namely payment collection through behalf of the Board of Directors, REVENUE
mobile banking, development of automated backup procedure I pledge that we will continue to increased by
37%
for Mastercard, upgrading virtual environment for enhancing add value for the stakeholders
services and completed partial Disaster Recovery Infrastructure. through formulation and execution
LankaBangla, through LankaBangla Foundation has extended its of prudent business strategies
support for underprivileged people of the community. In 2017, we and practices whilst ensuring
have extended support to unprivileged brilliant student to pursue that we contribute towards the
their education, provided financial assistance for education achievement of national priorities.
for children of deceased ex-officio of LankaBangla, promoted I would like to thank all our
creativity and cultural development of children through arranging shareholders and customers
art competition, distributed relief among poor flood victims at
whose commitment is a sign of
Kurigram district, distributed bicycle among female students of
appreciation and trust. We will do
Birol Upazila, Dinajpur, organized tree planataion program for
everything within our capacity to
protecting environmental and ecological degradation, distributed
ensure that LankaBangla Finance
blankets among the poor people to protect them from cold
Limited remains an attractive
wave. Also LankaBangla and OCAS jointly distributed relief and
investment and a reliable and
arranged medical camp among flood victims of South Sunamganj,
Sunamganj. future-oriented company that
justifies your trust.
I take immense pride in informing you that in 2017 LankaBangla NET PROFIT
Finance Limited received SAFA Best Presented Annual Report 2016, AFTER TAX
ICAB Best Presented Annual Report Award 2016, ICAB Corporate Yours sincerely, increased by
142%
Governance Award 2016, and ICMAB Best Corporate Award 2016.
These awards and recognitions are testament to our continuous
effort towards reaching excellence in terms of adoption of best
practices and transparency. Our subsidiary company, LankaBangla
Securities Limited, has secured 1st position in terms of turnover
for 12 consecutive years in Dhaka Stock Exchange and for 13 Mohammad A. Moyeen
consecutive years in Chittagong Stock Exchange depicting our Chairman
consistent strong presence in Bangladesh Capital Market.
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Corporate Governance Directors' Report
57
DIRECTORS' Annual Integrated
Report 2017
REPORT
Dear Stakeholders, Real Estate Finance, Credit Card Operation, SME, Auto loan,
On behalf of the Board of Directors of LankaBangla Finance Personal Loan, Factoring, Syndication Finance, Revolving
Limited, I am very happy to welcome you in 21st Annual General Credit, Loan against Deposit, Term Deposit etc.
Meeting of the Company.
Organization Principal Business Activities
The Board of Directors of LankaBangla Finance have pleasure
in presenting their Annual Report for the year ended 31st
December 2017 which includes reports on business strategy The principal activities of
and review, risk management, corporate governance, investor the company are to act as
relations and a sustainability supplement. It includes Audited a member of Dhaka Stock
Financial Statements of the Organization, Consolidated Exchange Limited and
Financial Statements of the Group for the year and the Auditors’ Chittagong Stock Exchange
Report on those Financial Statements. The Financial Statements Limited to carry on the
LankaBangla Securities
were reviewed and approved by the Board of Directors on 13 business of brokers or
Limited
February 2018. dealers in stocks, shares
In the year 2017, LankaBangla Finance recorded remarkable and securities, commercial
growth on its core business. With a good penetration in loan papers, bonds, debentures,
products, LankaBangla made good profit growth in 2017. We debentures stocks, treasury
are pleased to report that during the year 2017, LankaBangla bills and/or any financial
Finance Limited earned consolidated after tax net profit of instruments.
BDT 1,926.29 million, meeting or exceeding all financial and
operational objectives.
The activities of the Company
In each quarter of 2017, we have achieved consistent result
include services broadly
and had good performance ensuring strong organic growth
classified as interest income
and increasing contributions. This has consistently proven to
and fee based services, such
be very beneficial throughout the challenging global economic LankaBangla Investments
as underwriting of securities,
conditions. These results continue to demonstrate that we have Limited
issue management, register to
the right strategy and we are executing it well.
issue, portfolio management,
1. General corporate advisory services
LankaBangla Finance Limited (LBFL) started commercial etc.
operations since 1997 obtaining license from Bangladesh Bank
under the Financial Institutions Act, 1993. LBFL also obtained The principal activities of the
license from Securities and Exchange Commission vide No. MB- company include:
1.064/98-05 to transact public shares in the Capital Market as  Manage the assets of any
a Merchant Banker. The Company went for public issue in 2006 trusts or fund of any type
and its shares have been listed in both Dhaka Stock Exchange and/or character and hold,
and Chittagong Stock Exchange on 17 October 2006 and 31 acquire, sell or deal with
October 2006 respectively. such assets of any trust.
The corporate office of LBFL is located at Safura Tower (Level  Float, administer and
11), 20 Kemal Ataturk Avenue, Banani, Dhaka-1213, Bangladesh. manage any mutual fund,
growth fund or any other
2. Vision, Mission, Core Values & Code of Conduct allotted scheme approved
LBFL’s Vision, mission, core values and code of conduct are given LankaBangla Asset by the Government for the
in the page number 01 & 10 of the Annual Integrated Report. Management Company time being.
The business activities of the organization are conducted at a Limited
high level of ethical standard in achieving its Vision.  Manage and administer
mutual fund, provident
3. Principal Business Activities fund, pension fund for
3.1 LBFL purpose of investment
and carry on the business
The activities of the company include services broadly classified or undertaking and
as fee based and fund based services: execute trusts and
 Fee based services include Credit Card Membership Fees, also to act as executor,
Merchants Commission, Underwriting of Securities, IPOs, trustee, custodian and/or
Portfolio Management, and Corporate Financial Services otherwise as per relevant
etc. rules and regulations.
 Fund based services include Lease Finance, Term Finance,
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58
LankaBangla
However, advanced-economy growth was 1.8% in 2017. In

ERP, Consultancy & Training, the United States, manufacturing activity will likely rebound,
Market Data Service to contributing to a mild pickup in growth. In the Euro Area and Japan,
International Fund Manager supportive monetary and, to a lesser extent, fiscal policies should
and Exchanges, develop help support activity this year.
specialized simulation tools
In emerging and developing economies, growth was 4.2% in
for trading, outsourcing,
2017 compared to 3.4% in 2016. With the recovery in commodity
Private Cloud Computing, ITES,
prices, particularly oil, the divergence in growth outlooks between
Project Management, Process
commodity exporters and importers is set to narrow. In China,
Management, Cloud Services,
growth was 6.5% in 2017. This outlook reflects soft external
LankaBangla Information Business Process Outsourcing
demand, heightened uncertainty about global trade and slower
System Limited (BPO), Registered Educational
private investment.
Provider (REP) affiliating with
world recognized companies, Hence, Global growth is expected to be sustained over the next
System Integrator (SI), couple of years—and even accelerate somewhat in emerging
E-Commerce, M-Commerce, market and developing economies (EMDEs) due to a rebound in
IT Audit, Trading of PC, commodity exporters. Although near-term growth could surprise
Servers, Network, Security and on the upside, the global outlook is still subject to substantial
Accessories and many more downside risks, including the possibility of financial stress, increased
with changes of technology protectionism, and rising geopolitical tensions. With output gaps
and business diversities. closing or closed in many countries, supporting aggregate demand
with the use of cyclical policies is becoming less of a priority.
The financial markets have also seen strong growth both in
Printing and publishing of
developed and emerging markets. The US equity markets continued
newspaper, Journals, magazines,
BizBangla Media Limited their growth momentum, shaking off political uncertainties in
periodicals, books any other
the wake of the 2016 Presidential Elections. The new tax reform
literary and non-literary works.
package passed by the US Congress in 2017 boosted the equity
markets due to lowered corporate tax rates and measures which
encourage investment.
4. Economic Review of 2017
The tax reform package is expected to boost short term growth,
4.1 World Economy but the increased fiscal deficit resulting from the tax reforms is
The global cyclical upswing that began midway through 2017 expected to reduce long-term sustainability of the growth boost.
continues to gather strength. Only a year and a half ago, the world The strong performance of US equity markets has, however, led to
economy faced stalling growth and financial market turbulence. historically high valuations for US equities, with the S&P 500 trading
The picture now is very different. Global growth, which in 2016 at a CAPE ratio of over 30.
was the weakest since the global financial crisis at 3.2 percent, Downside risks to global economic recovery also exist to balance
have grown by 3.7 percent in 2017. The growth forecasts for 2018 out growth momentum. Political uncertainty has increased acutely
is 0.2 percentage point stronger compared with the 2017 which is in the US under the Trump administration. Any potential adoption
supported by higher investment, trade and industrial production of trade restrictions or protective tariffs are likely to lead to a
coupled with increasing business and consumer confidence. widening cycle of more protectionist measures potentially resulting
Financial conditions remain buoyant across the world, and financial in a trade war with major trade partners in Asia and elsewhere.
markets seem to be expecting little turbulence going forward, At the same time, political fallout continues from the conduct of
even as the Federal Reserve continues its monetary normalization the 2016 Presidential Elections, with the various investigations and
process and the European Central Bank inches up to its own. inquiries and associated protests likely to pose a threat to stability
These positive developments give good cause for greater of the Trump administration. With the US government already
confidence, but neither policymakers nor markets should be lulled having shut down once and major midterm elections scheduled for
into complacency. A closer look suggests that the global recovery 2018, the political climate in the US unlikely to stabilize anytime
may not be sustainable—not all countries are participating, soon. Any major political shock in the US could cause a major
inflation often remains below target with weak wage growth, correction to the US equity markets, which are trading at historically
and the medium-term outlook still disappoints in many parts of high valuations, which could in turn precipitate a financial crisis.
the world. Global inflation rose in 2017, reflecting the continued Aside from the political instability in the US, the ever-continuing
cyclical recovery in demand and higher commodity prices. The US geopolitical tensions in the Middle East and Korean Peninsula could
consumer price inflation was 2.1% in 2017, up from 1.3% in 2016, pose threats to commodity prices and international trade.
and the euro area inflation reached 1.4% in 2017, up from 1.1%
in 2016.The recovery is also vulnerable to serious risks. The global 4.2 Regional Economy
unemployment rate has risen modestly from 5.7% to 5.8 % in 2017 After leading global growth for two years, South Asia has fallen to
representing an increase of 3.4 million in the number of jobless second place, after East Asia and the Pacific. The region’s slowdown
people. is due to both temporary shocks and longer-term challenges.
Regional economic growth was moderately slow to 6.9% in 2017
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59
Annual Integrated
Report 2017
from 7.5% in 2016, but growth could rebound to 7.1% in 2018 with Bangladesh In Percentage Rebased
the right mix of policies and reforms. Macro
Indicators FY15 FY16 FY17 FY18F FY15 FY16 FY17 FY18F
Given its weight in the region, India sets the pace for South Asia.
Its Gross Domestic Product (GDP) growth reached 7.0% in 2017, GDP Growth 6.6 7.1 7.28 7.4 100 108 110 112
due to surging imports and declining private investment along Headline
with the effects from withdrawing large amounts of banknotes Inflation (point- 6.3 5.5 5.35 6.0 100 87 85 95
to point)
and the introduction of the Goods and Services Tax (GST).
Current Account
However, India’s growth is expected to rebound to 7.3% in 2018. Balance 1.5 1.7 -0.6 -1.7 100 113 -40 -113
(% of GDP)
In Pakistan, major economic reforms are working in tandem with
Private Credit 13.2 16.8 15.7 16.8 100 127 119 127
an improved security situation to push growth to an estimated Growth
5.5% in 2018—the highest rates the country has seen in recent Interest Rate 11.7 10.4 9.6 xx 100 89 82 xx
years. (Avg. Lending)
Sri Lanka’s economic growth has reached 4.6% in 2017 and 4.4.1 Fiscal Management
is estimated to achieve 5% growth in the years ahead. Public
Budget for FY’18 has been marked high ambition with a vision of
finances and reserves have improved despite a high budget
attaining the middle income goal. The country’s biggest ever budget
deficit and public debt. Frequent natural disasters continue
size is BDT 4002.66 billion which is 17.52% higher compared to FY’17’s
to weaken economic performance and are likely to increase
budget. It has revenue target of BDT 2879.91 billion which is 18.66%
poverty. Accelerating reforms to promote competitiveness,
higher than that of the FY17’s budget. Gross Domestic Product (GDP)
better governance, and a more balanced budget are critical to
has been estimated to grow at a rate of 7.4% in FY’18, a slight increase
ensure sustained growth and development.
from the previous year’s target of 7.2%. Budget deficit is projected to be
In South Asia’s smaller economies—Maldives and Afghanistan— BDT 1,122.76 billion which is 5% of the GDP. Of this deficit, BDT 603.52
modest growth was maintained despite significant challenges. billion will be collected from savings certificates and other non-banking
With tourism weak for a third straight year, Maldives is sources and remaining BDT 519.24 billion will be raised from external
nevertheless forecasted to register growth of 4.1% for 2018. In sources. The new budget also emphasized on power and energy sector,
Afghanistan, agriculture is expected to help spur growth 3% in ICT sector, education, and industrialization in the country.
2018. This will build on a gradual upward trend in growth over
recent years. 4.4.2 Current Account Balance
The current account balance went into negative territory in FY17 for
4.3 World Commodity Price the first time in 5 years, dragged down by negative trade balance and
Prices of industrial commodities continued to strengthen, while decline in remittance inflows. The current account balance continued
most agricultural prices remained broadly stable in 2017. In the to deteriorate throughout the first half of FY18, reaching a record
oil market, inventories continue to fall amid strong demand, OPEC deficit of USD -4.4bn in November 2017. The current account deficit
production restraint, and stabilizing U.S. shale oil production. Crude is forecast to recover to USD -4.34 in June 2018, on back of stronger
oil prices are expected to rise $56/bbl in 2018, a small downward export growth and remittances on one hand, and restrained import
revision from the April 2017 forecast. Metals & rice are expected growth on the other, all riding on the depreciation of the BDT.
to surge 22 percent in 2018 due to strong demand and supply
constraints. With the exception of iron ore, metals prices are 4.4.3 Import
expected to increase moderately in 2018. Agricultural prices are Imports amounted to USD 43.5 billion for FY17, an 8.7% growth
anticipated to gain marginally in 2018. Most food markets are well- over the previous fiscal year. Import of Capital Machinery registered
supplied and the stocks-to-use ratios of some grains are forecast to the highest year on year growth, of 37.4%, reflecting the increased
reach multi-year highs. investment from both the public and private sectors especially in
the power sector. These imports are expected to have a lagged
4.4 Bangladesh Economy positive effect on export growth as the machineries are brought
The year 2017 saw Bangladesh achieve its highest ever GDP growth into production.
in recent years, with revised GDP growth hitting 7.28% as against
the target of 7.2%. This was the highest growth achieved in South
Asia for 2017, and one of the highest GDP growth rates among
major economies in the world. The average GDP growth now
stands at 6.26% over the past 10 years, and at 6.6% over the last
5 years, showing an increasing trend in GDP growth. The political
situation also remains stable, with the internal security situation
greatly improving after the 2016 Dhaka terrorist attack as a result of
sustained police operations dismantling terrorist cells throughout
the country. The government has set a GDP growth target of 7.40%
for the 2018 fiscal year, which is achievable given the stable political
climate, investments in power and transport infrastructure and the
high private sector credit growth rates. Given current trends, GDP
growth is likely to cross 8% in a few years.
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4.4.4 Remittance Inflow

Remittances declined 14% in FY17, due to a combination of from the start of 2017, which was countered by the government
poor economic conditions in the Middle East and usage of repealing import duties on rice and undertaking efforts to
informal channels (hundi) by workers to send back remittances import rice from abroad. These steps managed to stem the
due to stringent AML/CFT compliance by financial institutions. spike in inflation, stabilizing it around the 6% level. Inflation
New overseas employment, however, has continued to grow, stood at 5.83% in December 2017 on a point-to-point basis. Oil
with the 2017 growth standing at 10% over the previous fiscal prices have increased in the international market due to strong
year. Over 1 million workers went abroad in 2017, the highest global economic growth, and this could lead to higher non-food
level achieved to date. Remittances have started to show signs inflation.
of reversal, with remittance levels in January 2018 registering a
37% growth year-on-year. The depreciation of the BDT against
the USD is likely to lead to an uptick in remittances as workers
move towards official channels to send remittances rather than
use informal channels.
4.4.5 Foreign Exchange Reserve

Foreign exchange reserves reached a new record high of USD
33.5 billion in FY17, buoyed by strong financial account surplus
to overcome a growing current account deficit. The foreign
exchange reserves are set to decrease in the future as Bangladesh
Bank intervenes in the currency exchange market to stem the
slide of the BDT. Until the current account deficit stabilizes, the
foreign exchange reserves are expected to decrease.
4.4.6 Inflation However, once subsequent rice crops are harvested, food
Inflation was kept largely under control until the end of 2016, inflation is expected to come back down. With a contractionary
reaching a low of 5.04% in December 2016, before massive monetary policy statement for the second half of FY18, and
floods caused a loss of the import Boro rice crop in the fertile resultant cut in the advance to deposit ratio, inflation is likely to
northern regions. This caused food inflation to spike up sharply be contained below the 6% level.
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Annual Integrated
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4.4.7 Money Market

The money market comprising banks and financial institutions its state of affairs. The Directors are of the view that these Financial
demonstrated steadiness in FY17. Overall interest rates received Statements appearing on pages from 215 - 362 have been prepared
significant fall. Interest rate in call money market rate ranging from in conformity with the requirements of the Bangladesh Financial
3.68 percent to 3.93 percent during this year. The average volume Reporting Standards, Companies Act 1994, Financial Institutions
of money transaction in the call money market decreased to BDT Act 1993 and amendments thereto, the Listing Regulations of Dhaka
1152.75 billion in the year 2017 which was 4.67 percent lower Stock Exchange & Chittagong Stock Exchange, Bangladesh Bank’s
than the year 2016. Repo rate and Reverse Repo rate remained Guidelines and the Corporate Governance Code. The Statement of
unchanged from the year 2016 for achieving broad objective of Directors’ Responsibility for Financial Reporting is given on page 98
monetary policy. Whereas Private sector credit growth hit 18.1 and forms an integral part of the report of the Board of Directors.
percent at the end of December, up from the central bank's target
of 16.2 percent for the July-December period. Business confidence 9. Auditors Report
is improving and the stable exchange rate has led to higher import The Auditors of LBFL are M/s. ACNABIN Chartered Accountants
of machineries. The falling interest rates will boost private credit carried out the audit on the Financial Statements of LBFL and the
growth next year. Group for the year ended 31st December 2017 and their report on
those Financial Statements, as required by the Companies Act 1994
5. Review of Operation of LankaBangla is given on 13 February, 2018.
A review of financial and operational performance of LBFL and the
Group together with important events that took place during the 10. Significant Accounting Policies
year 2017 are contained in the Chairman’s Message (pages 55 - 56), Significant Accounting policies adopted in the preparation of the
the Managing Director’s Review (pages 128 - 130), and the CFO's Financial Statements are given on pages from 227 to 243 which
Reviews (pages 131 - 139). These reports form an integral part of comply with provisions of BFRSs and the Companies Act 1994.
the Annual Report of the Board of Directors.
11. Financial Review
6. Future Developments In line with overall economic growth, LankaBangla also exhibited a
LBFL focuses on a business expansion drive through its existing substantial progress in many of the business lines during 2017. Total
and extended branch network, concentrating more on Retail asset of the group grew by 33.41% from BDT 64.04 billion in 2016
and SME business to increase its market share and profitability. to BDT 85.44 billion in 2017. Significant amounts of disbursements
This will be further accompanied by a more vigorous drive on were made in Corporate, Retail and SME business. Furthermore,
innovative product development, process improvements and staff cautious investment in capital market and correct on time decisions
development, aimed at fulfilling the rapidly changing customer have led to an overall success for the company. Cost of borrowing
needs in the challenging market conditions and maximizing the has slightly increased in 2017 compared to 2016 due to liquidity
value that we create for all the stakeholders. Five new branches crisis in the 2nd half of the year.
were opened during the year 2017 and further few branches are Total Asset disbursement of LankaBangla Finance for the year
set to be open in the year 2018. Further an overview of the future 2017 grew by 24.57% compared to 2016, largely on the back of
development of LBFL and the Group is given in the Chairman’s stronger performance across all our business divisions and through
Message (pages 55 - 56), the Managing Director’s Review (pages increased concentration on due diligence in credit approval. Total
128 -130), and the CFO's Reviews (pages 131 - 139). These reports disbursed amount in 2017 was BDT 56,726 million compared
form an integral part of the Annual Report of the Board of Directors. to BDT 45,539 million in 2016. On the deposit side, our term
deposits grew by 28.78% from BDT 40,033 million in 2016 to BDT
7. Financial Statements 51,553 million in 2017, largely driven by our strong liability sales
The Financial Statements of LBFL and the Group have been prepared team who has provided uncompromised service. The company’s
in accordance with Bangladesh Financial Reporting Standards (BFRS) investment portfolio reached BDT 74,966 million in 2017 compared
laid down by the Institute of Chartered Accountants of Bangladesh, to BDT 55,176 million in 2016. NPL showed a positive picture as the
and comply with the requirements of DFIM circular No # 11 dated percentage of classified loans for the company decreased to 3.07%
23 December 2009 issued by Department of Financial Institutions in 2017 compared to 3.52% in 2016. Groups NPL is well placed at
and Market of Bangladesh Bank and Bangladesh Bank’s other 2.85% at the end of 2017.
circulars and guidelines or directives, the Companies Act 1994,
the Securities and Exchange Rules 1987, the Listing regulations 12. Core Business Review
of Dhaka and Chittagong Stock Exchanges. The aforementioned
Financial Statements for the year ended 31st December 2017 duly 12.1 Corporate Financial Services
signed by the Company secretary, Managing Director, the Chairman LankaBangla's focus on extending its Corporate Business portfolio
of the Audit Committee and the Chairman of the Board are given has continued throughout 2017. A total of BDT 26,211 million of
on pages from 215 - 362 which form an integral part of this Annual corporate lending has been disbursed for the year 2017 compared
Report. to BDT 28,544 million of 2016. Of the total, BDT 12,384 million was
disbursed as Short Term Loan in 2017. Disbursement in Corporate
8. Directors’ Responsibility for Financial Reporting Business has decreased due to the less emphasis on Corporate
The Directors are responsible for the preparation of Financial Business because of low margin. Disbursement in 2017 was driven
Statements of LBFL and the Group to reflect a true and fair view of mostly by Factoring and Short Term Loan.
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LankaBangla
12.2.1 Home Loan

Total Home Loan disbursement in 2017 was BDT 7,564 million
comprising of Mortgage Loan of 7,542 million and Staff Home
Loan of BDT 22 million. Home Loan portfolio grew by 92% in
2017, greater than the growth that was achieved in 2016. At the
end of 2017, Home Loan portfolio stood at BDT 12,250 million
which was BDT 6,393 million in 2016.
12.2.2 Auto Loan

In 2017, BDT 5,269 million has been disbursed as auto loan
compared to 3,090 million in 2016 resulting an 70.55% growth
in disbursement. Also the auto loan portfolio grew by 50% in
2017 from BDT 4,080 million in 2016 to BDT 6,128 million at the
end of 2017.
12.1.1 Corporate Liability Management
Corporate Liability portfolio consists of a diverse deposit portfolio 12.2.3 Personal Loan
of corporate clients. The value of the portfolio stands at BDT
Disbursement of Personal Loan has been strong in 2017 with a
24,027 million at the end of 2017 achieving a growth of 12.09%
total figure of BDT 4,439 million. The Personal Loan portfolio is
from 2016 portfolio and having a budget achievement of 89.14%.
comprised of Loan against Deposit, Term Loan and Staff Loan.
Corporate liability mobilization for the year was BDT 14,782
Portfolio for the Personal Loan in 2017 was BDT 5,794 million,
million compared to BDT 14,211 million in 2016. Contribution
which grew by 70% from BDT 3,403 million in 2016.
to such achievement is made possible with the team of qualified
relationship officers within the Corporate Liability team. 12.2.4 Credit Card
During 2017, a total of 36,788 new credit cards were issued by
LankaBangla. The card portfolio grew by 40% in 2017 to BDT
2,878 million from BDT 2,050 million in 2016. Number of active
credit card users has increased from 54,988 in 2016 to 79,272
in 2017 resulting in a growth of 44.16%. This was the highest
number of active card users in the industry. Monthly average
spending by all credit card users has significantly increased in
2017 in comparison to previous year due to Company’s prudent
strategies to motivate customers to use LBFL’s card by giving
various promotional offers including attractive discounts in
prominent outlets, gifts, etc. Average monthly credit card usage
in 2017 has increased to BDT 514 million from BDT 344 million
in 2016 resulting in a growth of 49.27%.
12.2 Personal Financial Services 12.2.5 Retail Liability Management

During the year 2017, the Company has continued to Retail Liability’s core focus on retail deposits has resulted in a
concentrate more on this segment by expanding several portfolio of BDT 10,610 million at the end of 2017 which shows
branches and increasing manpower in retail financial activities. a growth of 32.17% from 2016 portfolio and having a budget
Total BDT 23,442 million was disbursed during 2017 under retail achievement of 103.24%. Retail liability mobilization for the
financial services in the form of auto loan, home loan, personal year was BDT 5,947 million compared to 2016 figure of BDT
loan, credit card and staff loan. The amount of disbursement 4,184 million. This is made possible due to strong personnel of
helped the Company to achieve 78.54% growth in this segment product marketing officers.
and exceeded the budgeted disbursement by 37.66%.
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12.3 SME
SME, the heart of worldwide growth of economies, is emerging high volatility in deposit mobilization. Cash management has
as the most powerful and sustainable pillars of Bangladesh played a very pivotal role in channelling all the cash flows of
economy. Our country is moving towards SME led industrial the company in a very effective and an efficient way, so that
development, and as such growth of SME Financial Service optimum utilization of fund is achieved throughout the year. It
in LankaBangla Finance is also remarkable. In 2017, SME loan has continued to play an important role in managing cost of fund
disbursement of BDT 7,074 million has been made compared of the company. During 2017, the overall cost of fund has been
to BDT 3,865 million in 2016, thereby resulting in an 83.01% reduced mainly due to Treasury’s adherence to proactive policy
growth. At the end of 2017, SME portfolio stood at BDT 15,949 of bringing down the cost of fund by seeking cheaper borrowing
million compared to BDT 6,905 million in 2016 resulting in sources. Utilization of maximum exposure in money market
131% growth in portfolio. Management has taken a series of and reduced deposit rate in the market has contributed to the
strategies to foster more disbursement in this sector and boost reduction of cost of fund. All of these contributed to higher
the portfolio size to a sizeable amount as this sector is less rate earnings and lower fund cost, and ultimately had a positive
sensitive and more profitable. impact on profit. Dynamic approach to matching investments
taken by treasury’s dealing room has also contributed to profit
in 2017.
There was a strategic shift in borrowing mix during 2017
undertaken by Treasury. To get more advantage of liquid money
market, Treasury department of LBFL largely concentrated on
borrowing from other treasuries. Among the funding mix of
LBFL at the end of 2017, public deposit contributed to 52.11%,
followed by money market exposure of 25.28%, while bank
borrowing, zero-coupon bond, and commercial paper made up
for the remainder of the funding mix.
13. Credit Rating

Credit Rating Agency of Bangladesh Ltd. (CRAB) has rated the
Company on 13 July 2017 with “AA3” (Pronounced as AA Three)
12.3.1 SME Liability Management in the long term and ST-2 for the Short Term based on audited
SME Liability Division started its operation in December 2017 financial of FY2016 and other available information up to the
and has achieved the portfolio of BDT 75 million at the end of date of rating declaration. The outlook on the rating is Stable.
the year. With plenty of expertise on hand, It is expected that
The rating reflects the strengths of the Company which is
the portfolio of SME Liability would increase tenfold within the
backed by a strong team of management, growth in the non-
next year.
interest income, deposits and investments, adequate capital
12.4 Treasury Operations coverage with high Tier-1 capital, improved asset quality and
well controlled liquidity position.
In view of the rising market risk and the Company’s ambitious
growth trajectory, treasury in LankaBangla assumed greater 14. Financial Results and Appropriations
importance. Treasury is using its internal expertise successfully
in reading the market, gaining market entry in a timely manner 14.1 Revenue
and availing itself of arbitrage opportunities thereby enabling Total Revenue of the Group for the year 2017 was BDT 9,981
the company to improve its revenue. It is also engaged in million registering a 36.62% growth over 7,306 million of 2016.
increasing the sources of funding, proprietary trading, as well Total revenue of LBFL for the year 2017 was BDT 7,819 million
as managing the maturity mismatches arising from short-term which was 30.39% higher than the previous year’s BDT 5,997
financing to long term lending in its attempt to sustain the million. An analysis of the revenue is given in pages from 134 to
Company’s margins. 137 of the annual report.
Treasury Department of LankaBangla Finance plays a crucial role
with regards to understanding the market, taking advantage 14.2 Profitability
of arbitrage opportunities, and fund management. Treasury The Group has recorded a growth in operating profit and profit
investments cover deposits with other banks and financial after tax of 84.07% and 142.10% respectively in 2017. LBFL’s
institutions, investments in capital markets and commercial operating profit and profit after tax grew by 38.88% and 26.19%
papers. It strengthened its creditworthiness to counterparties respectively in 2017. Consolidated net profit after tax for the
in 2017, and thereby ensuring strong dominance in the market. year 2017 was BDT 1,926.29 million which was BDT 795.64
Treasury investment portfolio at the end of 2017 was BDT 8,433 million in previous year. LBFL's net profit after tax for the year
million which grew by 95% during the period. 2017 was BDT 1,352.79 compared to BDT 1,072.05 million in
2016.
Treasury relentlessly catered to the demands of business despite
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LankaBangla
Consolidated LBFL 16. Key Operating and Financial Data

Particulars Key operating and financial data for last five years as per
2017 2016 2017 2016
Notification No. SEC /CMRRCD /2006-158/129/Admin/44 dated
Total Revenue 9,980.78 7,310.93 7,818.98 5,996.60 07 August 2012 is shown in pages 140 to 145.
Total Expenses 7,510.02 5,968.62 6,176.06 4,813.60
Operating Profit 2,470.76 1,342.31 1,642.92 1,183.00 17. Plan for Utilization of Undistributed Profits
Provisions 206.95 395.65 245.53 75.66 The Company requires substantial funds every year to carry out
its regular business operation. The undistributed profits will be
Profit before Tax 2,263.81 948.66 1,397.39 1,107.34
utilized to disburse fund for its new investments and will be used
Tax 337.52 151.02 44.60 35.28 to meet contingencies in future as authorized under Article 100
Profit after Tax 1,926.29 795.64 1,352.79 1,072.05 of Schedule I of the Companies Act 1994. Additionally, with this
retention a reasonable debt equity ratio would be maintained &
14.3 Appropriation the borrowing power of the Company would enhance.
Particulars BDT 18. Capital Expenditure

Net Profit After Tax for the year 2017 1,352.79 Total capital expenditure on acquisition of property, plant and
equipment and intangible assets of LBFL and the Group for the
Retained Earnings brought forward 1,370.15
year ended 31 December 2017 amounted to BDT 495.74 million
Profit available for appropriation 2,722.95 and BDT 190.67 million respectively which were BDT 186.41
Less: Statutory Reserve 270.56 million and BDT 244.12 million respectively for the year 2016.
Details are given in Annexure A & B of Financial Statements.
Amount available for declaration of dividend 2,452.39
Less: Dividend(Proposed 7.5% Stock & 7.5% Cash) 716.06 19. Capital Commitments
Retained Earnings carried forward 1,736.32 Capital expenditures approved and contracted for, as at the
reporting date is given in note number 40 (g) of the financial
14.4 Dividend statements.
Considering the overall environment of financial market, current
financial strength of the Company, and future investment 20. Property, Plant & Equipment (PPE)
prospect the Directors recommended that dividend of BDT 1.50 Details of property, plant and equipment are given on note
per share in comparison to BDT 3.00 per share of the year 2016 number 8 to the Financial Statements.
is to be paid for the year ended 31 December 2017. This will
be paid by BDT 0.75 per share as stock dividend and remaining 21. Share Capital and Bonds
0.75 per share in the form of cash dividend compared to BDT
1.5 per share stock and BDT 1.5 per share cash dividend for the 21.1 Equity Capital
year 2016. Paid-up Capital of LankaBangla Finance Limited as at 31
The dividend is subject to approval of the shareholders at the December 2017 amounted to BDT 3,182.51 million consisting
Annual General Meeting. of 318,250,941 ordinary shares as against BDT 2,767.40 million
consisting of 276,739,949 Ordinary shares as at 31 December
The Board was satisfied that LBFL would meet the solvency test
2016.
immediately after the proposed dividend, which will be paid
in 2017. Further details on liquidity position is given in page The increase in number of share is the result of payment of
number 225 of this report. stock dividend at a rate of 15% for 2016. Details about share in
issue are given in note number 13 of the financial statements.
15. Reserves
A summary of the consolidated reserves along with the reserves 21.2 Debt Capital
of LBFL is as follow: On 15 December 2014, the Company issued Zero Coupon Bond
with face value of BDT 3,000 million. After discounting the Bond
Consolidated LBFL at 11.5%, the Company received BDT 2,478,093,342. The mode
Particulars
2017 2016 2017 2016 of payment of the Bond was 6 equal instalments (2 instalments
Share premium 1,090.9 1,090.9 - - in a year, BDT 500 million each instalment). Total transaction
Share money deposit 160.3 - 160.3 - costs incurred for issuance of the Bond was BDT 39,031,137.
Subsequently, the Zero Coupon Bond was measured at
Statutory reserve 1,472.6 1,202.0 1,472.6 1,202.0
amortized cost using the effective interest method. The effective
General reserve 50.9 46.8 - interest rate for this bond stands at 12.51% as per Para 9 of BAS
Retained earnings 2,369.8 1,579.5 2,452.4 2,200.4 39. Initially the Zero Coupon Bond was measured at fair value
Total reserves 5,144.5 3,919.2 4,085.3 3,402.4 (BDT 2,478,093,342) less transaction costs (BDT 39,031,137),
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Annual Integrated
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i.e., as per para 43 of BAS 39. The Zero Coupon Bond, on arriving Particulars Name of Director Position
maturity on 15 December 2017, was completely amortized and
1) Mr. Mohammad A. Moyeen Chairman
repaid in full.
2) Mr. I.W. Senanayake
On 26 December 2017, the Company issued the first tranche of (Nominated by LankaBangla Director
the second Zero Coupon Bond with face value of BDT 742,998,000 Finance Limited)
(with approved face value of BDT 3,000 million). The Company 3) Mr. B. W. Kundanmal Director
received BDT 654,466,856 after discounting the Bond at 7.5%.
The bond will be repaid in 6 equal instalments (semi-annually). 4) Mr. Mahbubul Anam Director
Total transaction costs incurred for issuance of the Bond was BDT 5) Mr. Al-Mamoon Md. Sanaul Huq
12,195,023. Subsequently, the Zero Coupon Bond was measured (Nominated by LankaBangla Director
LankaBangla Finance Limited)
at amortized cost using the effective interest method. The
effective interest rate for this bond stands at 8.66% as per Para Securities 6) Mr. Mohammed Nasir Uddin
Limited Chowdhury
9 of BAS 39. Initially the Zero Coupon Bond was measured at fair (Nominated by LankaBangla Director
value (BDT 654,464,856) less transaction costs (BDT 12,195,023). Finance Limited)
Details about Zero coupon bond is given in note number 10.1.5 of 7) Mr. Khandoker Saffat Reza
the financial statements. (Nominated by LankaBangla Director
Finance Limited)
22. Share Information
Information relating to earnings, dividend, net assets and market 8) Mr. S. A. R. Md. Muinul Islam
(Nominated by LankaBangla Director
value per share is given in the Financial Highlights on pages 140 Finance Limited)
to 145. Information on trading of the shares and movement in
the number of shares of LankaBangla is given in the Investor 1) Mr. Mohammad A. Moyeen Chairman
Information section on page 265. 2) Mr. Al-Mamoon Md. Sanaul Huq
23. Shareholding Finance Limited)
LankaBangla
There were 15,325 nos. of registered ordinary shareholders as at Investments 3) Mr. Abdullah Al Karim Director
31st December 2017 (2016: 12,314). Information on distribution Limited
of shareholding and the respective percentages are given on page 4) Mr. Mohammed Nasir Uddin
Chowdhury
39 of the Annual Report. Director
(Nominated by LankaBangla
Details of shareholder’s composition and percentage holding of the Finance Limited)
public are given in the Investor Information section on page 265.
1) Mr. Abdul Malek Shamsher Chairman
The shareholding pattern as per Clause 2(k) of SEC Notification
2) Mr. Al-Mamoon Md. Sanaul Huq
No. SEC/CMRRCD /2006-158/Admin/02-08 dated February 20, (Nominated by LankaBangla Director
2006 is shown in Annexure-iii, page 94. Finance Limited)
3) Mr. Khwaja Shahriar
24. Equitable Treatments to Shareholders LankaBangla (Nominated by LankaBangla Director
LankaBangla has at all times ensured that all shareholders are Asset Finance Limited)
Management
treated equitably. Company 4) Mr. Abul Kalam Mohammad
Limited Kamruzzaman Director
(Nominated by LankaBangla
25. The Board of Directors Finance Limited)
The Board of Directors of LBFL consists of nine Directors with
wide commercial knowledge and experience. The names of the 5) Mr. Quamrul Islam
Directors of LankaBangla during the period 1st January 2017 Finance Limited)
to 31st December 2017 are mentioned in Report on Corporate
Governance (page 93) and their brief profiles are given on pages 1) Mr. Mohammad A. Moyeen Chairman
40 to 44 of the Annual Report. LankaBangla 2) Mr. Mahbubul Anam Director
Information
26. Changes in the Board System 3) Mr. S. A. R. Md. Muinul Islam
Limited
Mr. Mirza Ejaz Ahmed has resigned from the Board of LankaBangla (Nominated by LankaBangla Director
Securities Limited)
Finance Limited w.e.f. August 5, 2017.
27. List of Directors of the Subsidiaries BizBangla
Media 2) Mr. Mahbubul Anam Director
Names of the Directors of Subsidiary companies are as follows: Limited
3) Mr. Dewan Hanif Mahmud Director
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28. Board Sub Committees

The Board, while assuming the overall responsibility and accountability for the management oversight of the organization, has also
appointed Board Sub Committees to ensure that the activities of LankaBangla at all times are conducted with the highest ethical
standards and the best interests of all its stakeholders. The Board formed two Sub Committees named Executive Committee and
Audit Committee. The compositions of these Sub Committees as at 31st December 2017 were as follows:
28.1 Executive Committee

The Executive Committee of the Board of LankaBangla Finance Limited was re-constituted in the 99th Board of Directors meeting
held on May 12, 2016.
28.2 Audit Committee

In Compliance with the requirement of Bangladesh Bank Notification No. DFIM-13, dated 26 October, 2011 and Bangladesh
Securities & Exchange Commission (BSEC) Notification No. SEC/CMRRCD/2006-158/134/admin/44, dated 07 August 2012 the Audit
Committee of LankaBangla Finance Limited was re-constituted in 107th Board of Director’s meeting held on October 23, 2017.
29. Directors' Meeting

The details of Directors meetings which comprise Board meetings and the Board Sub Committee meetings and the attendance of
Directors at these meetings are given in the Corporate Governance Report on pages 93 to 94 of the Annual Integrated Report.
30. Related Party Transactions

Directors have also disclosed transactions, that could be classified as Related Party Transections in terms of Bangladesh Accounting
Standard - BAS 24 (Related Party Disclosure) which is adopted in preparation of the Financial Statements. Those transactions
disclosed by the Directors are given in note number 37 to the Financial Statements which form an integral part of the Annual Report
of the Board of Directors.
31. Directors’ Interest in Ordinary Shares

The shareholdings of Directors are as follows:
Number of shares Number of shares
Sl. No. Name of Director as on 31 December 2017 as at 31 December 2016
1 Mr. Mohammad A. Moyeen 13,491,355 11,731,614
Mr. I.W. Senanayake

2 (Representing Sampath Bank PLC)
30,143,437 26,211,685
Mr. Nanda Fernando
3 (Representing Sampath Bank PLC)
Mr. M. Fakhrul Alam 12,026,719 10,458,017
4 (Representing ONE Bank Limited)
Mrs. Aneesha Mahial Kundanmal 24,513,161 21,315,793
5 (Mr. B. W. Kundanmal- Alternate Director)
6 Mr. Mahbubul Anam 14,174,230 12,325,418
Mr. Tahsinul Huque

7 12,399,383 10,782,073
(Dr. M. Mahbubul Huque- Alternate Director)
8 Mr. Al Mamoon Md. Sanaul Huq Nil Nil
9 Mrs. Zaitun Sayef Nil Nil
32. Substantial Shareholdings

BSEC’s Corporate Governance Notification dated August 7, 2012 requires a listed company to disclose in the Directors’ Report,
the list of shareholders holding ten percent or more voting interest in the Company. None of the shareholders hold ten percent
or above shares in LankaBangla Finance Limited. The shareholding status of all sponsors shareholders as on December 31, 2017 is
given in page 94 of this report.
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Annual Integrated
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33. Directors’ Interest in Ordinary Shares of Subsidiaries as on December 31, 2017

Shares held on Shares held on
Sl. No. Name of Director Position 31-Dec.-2017 31-Dec.-2016
Mr. Mohammad A. Moyeen
1 Chairman 122,290 111,173
(Representing LankaBangla Finance Limited)
Mr. I.W. Senanayake
2 Director Nil Nil
3 Mr. Mahbubul Anam Director 119,841 108,947

Mr. Al-Mamoon Md. Sanaul Huq
4 Director Nil Nil
LankaBangla Information System Limited

1 Mr. Mohammad A. Moyeen Chairman 100 100
2 Mr. Mahbubul Anam Director 100 100
BizBangla Media Limited

1 Mr. Mohammad A. Moyeen Chairman 100 100
2 Mr. Mahbubul Anam Director 100 100
34. Directors' Remuneration

Details of directors’ emoluments paid during the year are given their knowledge and belief LankaBangla has complied with the
in note number 28 to the financial statements. relevant environmental laws and regulations.
35. Team Members (Employees) 37. Statutory Payments

LankaBangla believes that its real potential rests on the strength The Directors, to the best of their knowledge and belief, are
and capabilities of its team members in a rapidly changing satisfied that all statutory payments due to the Government,
environment. All efforts are directed at having a motivated other regulatory bodies and related to the employees have
and competent team in order to grow and achieve results as been paid on a timely basis.
projected in the Strategic Plan and the Budget.
Details about contribution to government exchequer is given in
As at 31st December 2017, the number of employees on the page 211 of this Annual Report.
payroll of LankaBangla was 832 which was 672 in previous year.
Details discloser related to human resource are given pages 186 38. Outstanding Litigations
to 192 of this report which form an integral part of the Annual In the opinion of the Directors and in consultation with the
Report of the Board of Directors. LBFL’s lawyers, litigation currently pending against LankaBangla
will not have a material impact on the reported financial
36. Environmental Protection statements of future operations of LankaBangla. Details of
To the best knowledge of the Board, LankaBangla has not litigation pending against LankaBangla are given in note number
engaged in any activity that is harmful or hazardous to the 2.38 to the Financial Statements.
environment. The Directors also confirm that to the best of
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39. Events after Reporting Period The Company has provided in a separate note to the financial
No circumstances have arisen since the Statement of Financial statements regarding the Company’s exposure to each of the
Position date which would require adjustments to, or disclosure above risks, the Company’s objectives, policies and processes for
in, the accounts, except those disclosed in note number 40 (e) measuring and managing risks and management of its capital.
to the Financial Statements. Details about risk management is given in Risk management
report on pages 110 to 117 of this Annual Report.
40. Going Concern
The Directors after making necessary inquiries and reviews 43. Corporate Governance
including reviews of the budget for the ensuing year, capital In the management of the Company, the Directors have placed
expenditure requirements, future prospects and risks, cash emphasis on confirming to the best corporate governance
flows and such other matters required to be addressed in the practices and procedures. Accordingly, systems and structures
Code of Best Practice on Corporate Governance issued jointly have been introduced or improved from time to time to enhance
by the Institute of Chartered Accountants of Bangladesh risk management measures and to improve accountability and
and the Bangladesh Securities and Exchange Commission transparency. A separate report on Corporate Governance is
LankaBangla has adequate resources to continue operations given on pages 70 to 83.
into the foreseeable future. Accordingly, they continue to adopt Pursuant to Clause 5.00 of SEC Notification No. SEC/ CMRRCD
the going concern basis in preparing the Financial Statements. /200658 /129/ Admin/44 dated 07 August 2012 the Company’s
Details about going concern assessment of LankaBangla is compliance status is shown in Annexure-i page 85 - 89.
presented in Statement of Going Concern in page no. 126 of the
Annual Report. 44. Additional Disclosures
The Directors, in accordance with SEC Notification No. SEC/
41. Risk Management and Internal Control CMRRCD /200658 /129/ Admin/44 dated 07 August 2012;
confirm compliance with the financial reporting framework for
41.1 Material Foreseeable Risk Factors the following;
LankaBangla has an ongoing process in place to identify,  The financial statements prepared by the management
evaluate and manage the risks that are faced by it. This process present fairly the Company’s state of affairs, the result of its
is detailed in the Risk Management Report on pages 110 to 117. operations, cash flows and changes in equity.
The Directors, on a regular basis review the above mentioned  Proper books of accounts of the Company have been
process. maintained. Appropriate accounting policies have been
consistently applied in preparation of the financial
41.2 Internal Controls statements and that the accounting estimates are based on
The Directors of LankaBangla have taken reasonable steps open reasonable and prudent judgment.
to them to safeguard the assets of the Group and to prevent and  International Accounting Standards and International
detect frauds and any other irregularities. For this purpose, the Financial Reporting Standards, as applicable in Bangladesh,
Directors have instituted effective and comprehensive systems have been followed in preparation of the financial
of internal controls for identifying, recording, evaluating and statements. The system of internal control is sound in design
managing the risks faced by LankaBangla throughout the year and has been effectively implemented and monitored.
and it is being regularly reviewed by the Board of Directors.
This comprises internal reviews, internal audit and the whole  There are no significant doubts upon the Company’s ability
system of financial and other controls required to carry on the to continue as a going concern.
operations in an orderly manner, safeguard the assets, prevent  There is no extraordinary gain or loss during the year.
and detect frauds and other irregularities and secure, as far as  No significant difference occurs between quarterly financial
practicable, the accuracy and reliability of the records. performance and annual financial statements.
 There are no significant changes in the Company or its
42. Financial Risk Management subsidiaries’ fixed assets and the market value.
LBFL’s management has overall responsibility for establishment  The company had not enabled any of its directors to acquire
and oversight of its risk management framework. The Company’s benefits by means of acquisition of share or debentures of
management policies are established to identify and analyse the company or anybody corporate.
the risk faced by the Company to set appropriate risk limit and
controls and to monitor risk. 45. Audit Information
Risk management policies, procedures and systems are The Directors who held office at the date of this Directors'
reviewed regularly to reflect changes in market conditions and Report confirm that:
the Company’s activities. The Company has exposure to the
following risks from its use of financial instruments:  So far as the Directors are aware, there is no relevant audit
information of which the company’s auditors are unaware;
 Credit risk
and
 Liquidity risk
 The Directors have taken all the steps that they themselves
 Market risk
ought to have taken as Directors in order to make themselves
 Operational Risk
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aware of any relevant information and to establish that the expresses its deep gratitude to Bangladesh Bank, Bangladesh
company’s Auditors are aware of that information. Securities & Exchange Commission (BSEC), Dhaka Stock
Exchange (DSE), Chittagong Stock Exchange (CSE), Registrar of
46. Auditors Joint Stock Companies and Firms, National Board of Revenue
The Board in its 109th meeting held on February 13, 2018 (NBR) and other regulatory bodies for their help, assistance,
recommended the shareholders to appoint M/s. S. F. Ahmed & valuable guidance and advice being extended to the Company
Co. Chartered Accountants at a remuneration of BDT 5,00,000 from time to time. The Board also thanks M/s ACNABIN,
plus VAT. LBFL has also taken prior approval from Bangladesh Chartered Accountants, the Auditors of the Company, for their
Bank to appoint M/s. S. F. Ahmed & Co., Chartered Accountants, efforts for timely completion of audits.
until conclusion of 22nd AGM. Since 2006, LankaBangla Finance has recorded rapid and
Based on the declaration provided by M/s. S. F. Ahmed & Co. consistent growth, outperforming its competitors. One of the
and as far as the Directors are aware, the Auditors do not major reasons for this success was possible with a strong work
have any relationship with or interest with LankaBangla that ethic which has improved productivity at all levels. My high and
in their judgments, may reasonably be thought to have a sincere appreciation, on behalf of the Board of Directors, is due
bearing on their independence within the meaning of the Code to the management and all members of staff of the Company,
of Professional Conduct and Ethics issued by the Institute of for their outstanding efforts, loyalty, sincere services and
Chartered Accountants of Bangladesh, applicable on the date dedication.
of this report. I would like to take this opportunity to thank my colleagues on
Details about auditors of subsidiaries and auditor for other Board, who have extended their all sorts of cooperation, in the
audit services are given in page number 6 of the annual report. face of adverse internal and external conditions, and made the
year 2017 another year of success for the Company. Finally,
47. Recognition the Board of Directors thank the respected shareholders and
assure them that they will continue to add value to maximize
As a reward of our relentless efforts to the best practices of the shareholders’ wealth through further strengthening and
corporate and financial reporting, LBFL is being recognized development of the Company in which they have placed their
by South Asian Federation of Accountants (SAFA), Institute of trust and confidence. Let us work together in a spirit of open
Chartered Accountants of Bangladesh (ICAB) and Institute of and honest partnership. The Board’s pledge to you is that we
Cost and Management Accountant of Bangladesh (ICMAB) on a will listen your criticisms carefully, will at all times take those
continuous basis. Some of the awards we achieved are: very seriously and will make clear cut decisions for the greater
 SAFA Best Presented Annual Report 2014 interest of the Company.
 SAFA Best Presented Annual Report 2015 For and on behalf of the Board of Directors
 SAFA Best Presented Annual Report 2016
 ICAB Best Presented Annual Report 2016
 ICAB Corporate Governance Award 2016 Mohammad A. Moyeen
Chairman
 ICMAB Best Corporate Award 2016
LankaBangla Securities has achieved certificate for outstanding
performance for being ranked 1st in terms of turnover for
consecutive twelve years from 2006 to 2017 by Dhaka Stock
Exchange (DSE) & for consecutive thirteen years from 2005 to
2017 by the Chittagong Stock Exchange (CSE).
48. Notice of Meeting

The 21st Annual General Meeting of LankaBangla Finance will
be held at 10:00 am on 29th March 2018. The Notice of Meeting
is given on page number 5 of the Annual Report.
As required by Section 168 (1) (k) of the Companies Act the
Board of Directors hereby acknowledge the contents of this
report.
49. Acknowledgement
The Board of Directors takes this opportunity of expressing
its heart-felt appreciation and gratitude to the valued clients,
depositors, lenders, bankers, patrons and business partners
for their continued support and cooperation. The Board also
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Corporate Governance Statement on Corporate Governance
70
LankaBangla
STATEMENT ON
CORPORATE GOVERNANCE
1. Overview 3. Corporate Governance Structure
Corporate Governance is the system by which a Company is
directed, controlled and managed. In LankaBangla Finance Shareholders
Limited (LBFL), the Corporate Governance Framework
guides our drives towards progress by way of developing and
implementing appropriate corporate strategies. The approach External Auditors
to governance is predicated on the belief that there is a link
between high-quality governance and the creation of long-term
stakeholder value. In pursuing the Corporate Objectives, we Board of Directors
have committed to the highest level of governance and strive
to foster a culture that values and rewards exemplary ethical
standards, personal and corporate integrity and mutual respect. Board Sub-Committees
The Board of Directors, led by the Chairman, is responsible for
the governance of LBFL, and developing effective Governance
Framework to meet challenges, both in the short and long term.
The Board is committed to reviewing and improving our
Managing Director
systems to provide transparency and accountability, and initiate
transformational changes whenever necessary to ensure
best practices are maintained and enhanced according to the MANCOM
principles of Corporate Governance.
We continually review our systems and procedures to provide
transparency and accountability, and update our Corporate Group Risk Officer
Governance policies to keep in line with the stipulated
guidelines. Company Secretary Internal Control
2. Framework and Regulations Applied & Compliance
LankaBangla has incorporated in its Governance Framework the
guidelines prescribed in the Code of Best Practice on Corporate Internal Audit
Governance issued by the Bangladesh Securities and Exchange
Commission (BSEC), Bangladesh and the Bangladesh Bank on
Corporate Governance for Financial Institutions in Bangladesh.
Chief Credit Officer
The following Acts, Regulations and Circulars have been used:
Sl. No. Particulars Employees
1 The Companies Act, 1994
2 The Financial Institutions Act, 1993

The Code of the best Practice on Corporate 4. Governance Systems
Governance issued by the Bangladesh Securities and
3
Exchange Commission (SEC) vide notification no. SEC/
CMRRCD/2006-158/134/Admin/44, dated: 07/08/2012.
Bangladesh Bank circular DFIM Circular No. 07, dated; 25 Stakehloder
4 engagement and
September, 2007.
management
Listing Regulations of Dhaka Stock Exchange and
5
Chittagong Stock Exchange Strategic
planning
The following internal principles and guidelines have been
followed; Risk
Management
Sl. No. Particulars & Compliance
1 Vision and Values IT
2 Articles of Association Governance
3 Code of Conduct
Talent
4 Code of Ethics Management
5 Board and Board Sub Committee Charters
6 Policies, Procedures, Directives
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5. Key Activities of the Board in 2017 so that each member has time to be conversant with the issues
by timely dissemination of meeting papers, presentations and
5.1 Strategy reports. The Company Secretary and the Chief Financial Officer
attend all Board meetings and ensure that all relevant regulations
Having considered the outlook for global, Asian and Bangladesh
and established procedures regarding the conduct of the Board are
economies, market perceptions and expectations, the board
complied with.
approved the Budget and Annual strategy for LankaBangla as a
whole, together with the decisions required to implement the The Board also delegates its authority and powers to specialized
strategy. committees to undertake detailed monitoring, advisory and
oversight of tasks, such as financial audit, risk management,
5.2 Operational and Financial Performance Internal Controls, credit controls and approvals, compensation and
 Considered strategic and operational updates from the management development for leadership. These committees confer
Managing Director, as well as matters highlighted for the greater quality on the stewardship and fiduciary responsibilities of
board’s attention at board meetings. the Board.
 Reviewed quarterly financial Statements against the group's In addition, the Board constantly places emphasis that not only
budget. the Board, but the Company and its employees operate with
 Approval of the group’s annual report and financial results, professionalism, integrity and ethics.
and agreed dividend payments.
 Appointment of Two Non-Executive Independent 6.2 Selection and Term of Appointment of New Director
Director in compliance with the SEC Notification No. SEC/ The Board of Directors has the following duties and
CMRRCD/2006-158/129/Admin/44 dated 07 August 2012. responsibilities in connection with the selection and
 Re-Constitutions of the Board Audit Committee and Board appointment of new directors; -
Executive Committee.
 Regularly review the size and composition of the Board and
 Strengthening the process of business operations through
the mix of expertise, skills, experience and perspectives
rearrangement of Corporate Organogram.
that may be desirable to permit the Board to execute its
 Revision of the Credit Policy and incorporation of
functions;
Environment Risk Management Procedure (following
 Identify any competencies not adequately represented
guidelines of Bangladesh Bank) by the Board Audit
and determine the process necessary to be assured that
Committee and Board of Directors.
a candidate nominated by the shareholders with those
 Approval of ICT Policy of the Company by the Board of
competencies is selected;
Directors.
 The Directors are appointed by the shareholders in the
 Approval of Green Banking Policy.
Annual General Meeting (AGM). Casual vacancies, if any,
 Review of the Product Program Guidelines (PPG) on Home
are filled by board in accordance with the stipulation of
Loan, Auto Loan, Credit Cards, SME Loan, Personal Loan.
the Companies Act 1994 and the Articles of Association of
 Strengthening the process of identification, recording and
LankaBangla Finance Limited.
disclosure of Related Party Transactions.
 Any change in the members of the Board requires
 Expansion of geographical presence to cover more customer
intimation to the Bangladesh Bank, Bangladesh Securities
base by opening new Branches countrywide.
and Exchange Commission (BSEC) and the stock exchanges
5.3 Governance and Risk Directors usually serve three year terms, which the Board
considers an appropriate length of time for directors to immerse
 Re-Constitutions of the Board Audit Committee and Board
Executive Committee. themselves fully in the Company’s affairs and gain sufficient
 Reviewed of Anti-Money Laundering Policy & Guidelines understanding of the Company’s operations so as to make an
and Business Continuity Plan. effective contribution as a director.
 Reviewed risk reports and the preparation of the financial
statements on a going concern basis. 6.3 Independence of Directors
 Reviewed the Internal Audit Committee Report forwarded Pursuant to the Notification No. SEC/CMRRCD/2006-158/129/
to the Board by Board Audit Committee. Admin/44, dated; - 07 August 2012, in LankaBangla, the Board
comprises of ten non-executive members, of which two are
6. Functioning of the Board and its Governance Processes totally independent, being 1/5th of total number of Director. The
purpose of appointing non-executive and independent directors
6.1 Board Composition and Frequency is first to provide the Board with knowledge, objectivity, and
The present Board comprises of ten non-executive directors judgment and balance which may not be available if the Board
of whom four are nominee directors and two are independent consists only of full time executives; and secondly to ensure
directors. This number is appropriate for the current scope of the that the performance of the non-executive directors and the
company’s operations. The Board meets not less than four times management of the Company are up to the standards required.
in any given calendar year, with at least one meeting per quarter. Independent directors of LankaBangla bring their special
The Board sets its agenda for Board meetings well in advance with expertise and knowledge to bear on the strategy and enterprise
items proposed by the Managing Director and senior management, of the company. They each bring an independent judgement on
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LankaBangla
issues of conformance and performance.  Maintaining records of all meetings of the Board and Board
Committees, in particular records of discussion on key
6.4 Role and Responsibilities of the Board deliberations and decisions taken
Surrounded in the principles of corporate governance is
that the Board has a fiduciary role responsible for setting Statement on Directors' responsibilities is presented on page
the strategic direction and long-term goals of the company. no. 98 of this Report.
As elected representatives of the shareholders, the Board is
expected to use its integrity and capability to vet corporate 6.5 Chairman of the Board of Directors
strategies, policies, plans and major decisions, and to oversee The Chairman of the Board is elected by the directors. The Board
and monitor management in the interests of the shareholders considers that the Chairman is independent.
of LankaBangla. Key to good governance in LankaBangla is an
informed and well-functioning Board of Directors.
6.6 Role of the Chairman
Broadly, the responsibilities of the Board includes the following: The Chairman leads the Board. The Chairman serves as the
 Reviewing and approving overall business strategy, as well primary link between the Board and management, and works
as organization structure, developed and recommended by with the Managing Director and the Company Secretary to set
management; the agenda for Board meetings. It is the Chairman’s responsibility
 Ensuring that decisions and investments are consistent to provide leadership to the board and ensure that the Board
with long-term strategic goals; works effectively and discharges its responsibility as directors
 Ensuring that LankaBangla is operated to preserve its of the Company.
financial integrity and in accordance with policies approved
by the Board; 6.7 Separation of the role of Chairman and the
 Overseeing, through the Audit Committee, the quality and
integrity of the accounting and financial reporting systems,
Managing Director
disclosure controls and procedures and internal controls; At LankaBangla, in accordance with the DFIM Circular No.
and through the Risk Management Committee, the quality 07, dated 25-09-2007, a clear division of responsibilities
of the risk management processes and systems between The Chairman and The Managing Director, allows
 Providing oversight in ensuring that LankaBangla’s risk the Chairman to assume the formal role of an independent
appetite and activities are consistent with the strategic leader that chairs all Board meetings and lead the Board in
intent, operating environment, effective internal controls, its oversight of management. At annual general meetings and
capital sufficiency and regulatory standards; other shareholder meetings, the Chairman plays a pivotal role
 Overseeing, through the Risk Management Committee, in fostering constructive dialogue between shareholders, the
the establishment and operation of an independent risk Board and management. Any questions from shareholders are
management system for managing risks on an enterprise attended to and addressed at such shareholder meetings.
wide basis, the adequacy of the risk management function
(including ensuring that it is sufficiently resourced to 6.7.1 The Chairman’s responsibilities include
monitor risk by the various risk categories and that it has  Leading the board and ensuring its effective functioning.
appropriate independent reporting lines), and the quality  Setting the ethical tone for the board and company
of the risk management processes and systems;
 Setting the board’s the agenda, in consultation with the
 Reviewing any transaction for the acquisition or disposal of
Managing Director and the Group Company Secretary.
material assets.
 Ensuring that the necessary human resources are in place  ensuring that the board observes the highest standard of
to meet its objectives, as well as appointing and removing integrity and good governance
executive officers, as deemed necessary;  Conveying feedback in a balanced and accurate manner
 Reviewing management performance and ensuring that between the board and Managing Director.
management formulates policies and processes to promote
fair practices and high standards of business conduct by 6.7.2 The Managing Director’s responsibilities include
staff;  Appointing the executive team and ensuring proper
 Establishing corporate values and standards, emphasizing succession planning and performance appraisals
integrity, honesty and proper conduct at all times with
 Developing the company’s strategy for consideration and
respect to internal dealings and external transactions,
approval by the board
including situations where there are potential conflicts of
interest;  Developing and recommending budgets to the board that
 Providing a balanced and understandable assessment support the group’s long-term strategy
of LBFL’s performance, position and prospects, and this  Monitoring and reporting to the board the performance of
extends to interim and other price-sensitive public reports, the group and its conformance with compliance laws
and reports to regulators;  Establishing an organisational structure for the group which
 Ensuring that obligations to shareholders and others are is appropriate for the execution of its strategy
understood and met; and  Setting the tone for ethical leadership and creating an
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Annual Integrated
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ethical environment  A detailed overview of LBFL and its subsidiaries, its

 Ensuring that the group complies with all relevant laws and strategies, operational structure and core business activities
corporate governance principles.  General and statutory duties and responsibilities of a
Director
6.8 Appraisal of Performance of the Board  Comprehensive discussion with senior executives and
The Board performs three major roles in LankaBangla- it provides business heads of the company
direction (i.e. sets the strategic direction of the company), it  Detailed induction program on risk profile and risk appetite
controls (i.e. monitors the management), and provide support of the Company and the Group.
and advice. Board evaluation examines these roles of the Board
 Directors are provided with the Code of Conduct for the
and the entailing of responsibilities, and how effectively these Board members on general aspects of their Directorship
are fulfilled by the Board. Appraisal of the performance of the and industry-specific matters.
Board is conducted considering the following parameters:
 In case of any new rules, regulations or changes in existing
regulations the Board is immediately informed of.
 Board and committee
 Direction towards Business  In order to assist them, the Board is always kept updated on
composition and constitution
 Diversity Strategy governance any development and changes in the business environment,
 Competencies of the members  Monitoring of policies, systems risk and industry outlook.
 Board and committee charters and strategy implementation
 Frequency of meeting  Supporting and advisory role
 Board process 6.11 Financial and Accounting Knowledge, Management
Skills, Experience and Diversity of Directors
Board Board's The board members’ collective experience provides a balanced
Structure Role in
Governance mix of attributes to fulfil its duties and responsibilities. The
board’s breadth of experience includes retail and investment
banking, risk management, legal and regulatory, finance and
accounting, marketing, public sector, remuneration and overall
Dynamics Financial business. Four out of ten directors are current or former CEO or
and
process,Internal MD of different Banks and Financial Institutions at home and
controls, Risk abroad.
Management
One of the Board member is a Fellow Member of Chartered
 Annual Board calendar  Interiority and robustness of
Institute of Management Accountant of United Kingdom.
 Information availability financial and other controls Among others, one of the Board Member worked as Controller
 Interaction and communication  Risk management General of Accounts, Ministry of Finance, Government of
with CEO and Senior executives Abusive Related party
 Board Agenda

transactions
People’s Republic of Bangladesh.
 Cohesiveness and quality of  Whistle blower mechanism
participation in Board meeting
 Chair Person's Role 6.12 Retirement and Re-election of Directors
The Articles of Association requires one-third of the Board
(being the longest in office) to retire from office every year
at the annual general meeting. Therefore, by rotation, every
6.9 Annual Evaluation of Managing Director by the Board
director is required to submit themselves for re-nomination
Assessing the performance of the Managing Director is the and re-election by shareholders at regular intervals of at least
responsibility of the entire Board. At LankaBangla, Managing once every three years. A retiring Director shall be eligible for
Director’s performance is monitored and constructive feedback re-election.
is given by the Chair (after consultation with the board) on an
on-going basis rather than once or twice a year only. The Board 6.13 Directors’ Remuneration
believes that this alerts him to potential issues or problem arising
and provides opportunities for the Board and the Managing Other than attending the meeting of the Board and its sub-
director to overcome them before they escalate. committees Directors are not entitled to any remuneration to
be paid by the company.
6.10 Learning and Development Program of Directors With reference to the Bangladesh Bank’s DFIM Circular No. 13
Each and every Directors are expected to make important dated November 30, 2015 each Director of LankaBangla Finance
contributions based on industry knowledge, understanding of Limited is entitled to receive BDT 8,000 for attending each
the Business model of the company and the key challenges meeting of the Board and its Committees.
faced by the Group as a whole. The details of the attendance along with of the amount of the
The Chairman ensures that all Directors receive a complete remuneration paid to the Directors for the meetings of the
formal induction on joining the Board, facilitated by the Board and its committees are given in the later segment of this
MANCOM members which includes: report.
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LankaBangla
6.14 Directors’ Report on Preparation and Presentation ensuring that employees reporting legitimate concerns on
of Financial Statements and Corporate Governance potential wrongdoings occurring within the organization are
guaranteed complete confidentiality. Such complaints are
The Companies Act, 1994, requires the Directors to prepare
investigated and addressed through a formalised procedure
financial statements for each accounting year. The Board
and brought to the notice of the Chairman of the Board Audit
of Directors accepts the responsibility for the preparation
Committee. The procedure is made available through the
of the financial statements, maintaining adequate records
intranet to ensure awareness by all employees.
for safeguarding the assets of the Company, preventing and
detecting fraud and/ or other irregularities, selecting suitable
accounting policies and applying those policies consistently 6.19 Communication and Relationship with Stakeholders
and making reasonable and prudent judgments and estimates LankaBangla strongly believes that all stakeholders of the
where necessary. company should have reasonable access to complete information
The Board of Directors are also responsible for the on its activities, performance and product initiatives.
implementation of the best and the most suitable corporate LankaBangla maintains an active dialogue with shareholders. It
governance practices. A separate statement of the Directors’ holds in-person briefing sessions or telephone conference calls
responsibility for financial reporting and corporate governance with the media and analysts when quarterly results are released.
is given on page no. 98 of this Annual Report. All press statements and quarterly financial statements are
published on the national Daily Newspapers and DSE & CSE
6.15 IT Governance websites. A dedicated investor relations team supports the
Information Technology Governance forms an integral part of the Company’s CEO, Chief Financial Officer (CFO) and Company
NBFI’s Corporate Governance. It deals primarily with optimizing Secretary in maintaining a close dialogue with institutional
the linkage between Strategic Direction and Information Systems investors.
Management of the Company. In this regard, implementation The Company embraces and commits to fair, transparent
of the organizational structure with well-defined roles for the and imely disclosure policy and practices. All price-sensitive
responsibility of information, business processes, applications, information or data are publicly released, prior to individual
infrastructure, etc. generates value for our stakeholders while sessions held with investors or analysts.
mitigating the risks associated with incorrect deployment and
use of Information Technology. 6.19.1 Communication through Quarterly Reports
LBFL reports to the shareholders four times a year through
6.16 Ethics and Compliance quarterly and half yearly report and a detailed Annual Report
LankaBangla has adopted more stringent policies than the
prescribed guidelines issued by BSEC and has a policy against 6.19.2 Communication through Annual General
insider trading. LankaBangla employees are prohibited Meeting (AGM)
from dealing in securities of LankaBangla during the period
The shareholders are always encouraged to attend the AGM
commencing from two months before the announcement of the
and, in case of their inability to attend the meeting, to appoint
financial statements for the financial year, and ending on the
proxies. LBFL believes that all shareholders have the right to
date of the announcement of the relevant results. Employees
attend the AGM where they can meet and communicate with
with access to price-sensitive information in the course of their
the Directors and express their views regarding the Company’s
duties are instructed to conduct all their personal securities
business, its future prospects and other matters of interest.
transactions through the LankaBangla’s stock broking subsidiary.
The Board is committed to ensure highest level of Ethics and
Compliance by itself and by the employees of LankaBangla. 6.19.3 Communication through Digital Media
Statement on Ethics and Compliance is provided on page no. The company’s website www.lankabangla.com is a robust
104 of this Annual Integrated Report. website which displays details information about its general
business activities, Annual Reports, Half-yearly Reports,
6.17 Human Capital Quarterly Reports, product offerings, recent announcements
and event updates.
LankaBangla has always been very passionate about human
capital management. Description about Human Resource Disclosures required by Bangladesh Bank, Bangladesh Securities
plolicies and procedures are provided as Human Resource and and Exchange Commission (BSEC) and listing regulations of
Remuneration Committee Report from page no. 101 to 102. Dhaka and Chittagong Stock Exchange are made promptly and
Quantifiable information about Human resource and Human adequately.
Capital is portrayed in details on page 186 to 191 Human
Resource Accounting and page 192 Human Capital. 6.20 Environment and Social Obligation
Organizational Chart is given on page no. 54. At LankaBangla, we believe in concept of sustainable business,
one that integrates good governance, environmental issues and
6.18 Whistle Blowing Policy social awareness with our business strategies to maximize value
for stakeholders.
LBFL has a Whistle Blowing Policy in place, which serves as a
channel for early identification of corporate fraud or risk by Accordingly, we has aligned our CSR initiatives to deliver on this
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Annual Integrated
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commitment and aid community empowerment and sustainable 8.1.2 Summary of Key Terms of Reference
environment management is a suitable manner.  Provides effective leadership based on an ethical foundation
Details about Environmental and Social Obligation and  Approves the strategy and ensures that the group’s
Performance in portrayed on Sustainability Report (Page objectives take into account the need to align its strategy
194 -199) Green Banking (Page 200 - 202) and statement on and risk profile, together with the performance levels and
Corporate Social Responsibility ( Page 203 - 206) sustainability concerns of stakeholders
 Reviews the corporate governance and risk and capital
7. LBFL’s Vision, Mission and Strategies management processes, and ensures that there is an
effective risk management process throughout the group
7.1 Board approved Vision and Mission statements  Delegate relevant authority to the Managing Director
of the Company  Determines the terms of reference and procedures of all
board committees
The Board of Directors clearly set the Vision, Mission and the  Reviews the board and committees’ performance annually
Core Values of the Company, which is periodically reviewed by  Reviews reports and minutes of board and committee
the Board. meetings
LBFL’s vision, mission and Core values are portrayed on page 01  Ensures that the Group Audit Committee is effective and
of this Annual Integrated report independent
 Considers and approves the audited annual financial
7.2 Strategies to achieve Company’s Business statements and the annual integrated report, interim
Objectives financial results, dividend announcements and notice to
Aligned with our vision of maximising stakeholders’ value and shareholders
thus Growing Together our Strategic Focus areas are described  Monitors stakeholder relations
on Page 183 to 185 of this Report.  Approves significant acquisitions, mergers, takeovers,
divestments of operating companies, equity investments
and new strategic alliances
8. Board and Board Committees  Assumes ultimate responsibility for financial and IT
8.1 Board governance, operational and internal systems of control,
and ensures adequate reporting on these by the respective
8.1.1 Members and 2017 Meeting Attendances committees.
Members and 2017 Meeting Attendances

Sl. No. Name Position Appointment Date Attendance
1 Mr. Mohammad A. Moyeen Chairman Since November 5, 1996 5/6
2 Mr. I. W. Senanayake Director Since November 27, 2008 5/6

(Representing Sampath Bank PLC)
3 Mr. M. Y. Aravinda Perera Director Since March 28, 2012 3/6
4 Mr. M. Fakhrul Alam Director Since July 30, 2013 4/6
5 Mr. Mirza Ejaz Ahmed Director Since March 8, 2005 3/6
(Representing SSC Holdings Limited)
6 Mrs. Aneesha Mahial Kundanmal Director Since November 5, 1996 3/6
(Alternate Director - Mr. B. W. Kundanmal)
7 Mr. Tahsinul Huque Director Since November 5, 1996 6/6
(Alternate Director - Dr. M. Mahbubul Huque)
8 Mr. Mahbubul Anam Director Since November 5, 1996 3/6
9 Mr. Al Mamoon Md. Sanaul Huq Independent Director Since March 28, 2012 6/6
10 Mrs. Zaitun Sayef Independent Director Since July 31, 2016 6/6
 Director who could not attend meetings were granted leave of absence by the Board.
 Mr. Mirza Ejaz Ahmed has resigned from the Board of LankaBangla Finance Limited w. e. f. August 5, 2017.
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8.2 Audit Committee  Annually reviews and approves the policy setting out the
nature and extent for using external auditors for non-audit
8.2.1 Appointment of members and composition of work.
the Audit Committee 8.2.4.2 Internal Audit and Financial Crime
LBFL’s Audit Committee is a sub-committee of the Board  Reviews, approves and monitors the internal audit plan
formed in compliance with the requirements of DFIM Circular  Reviews and approves the internal audit charter as per the
No. 13, dated 26 October 2011 of the Bangladesh Bank and board’s delegated authority
relevant BSEC notification(s) and international best practices on  Considers and reviews the internal auditors’ significant
corporate governance. findings and management’s response
Composition of the Audit Committee consisting of an  Annually re-evaluates the role, independence and
Independent Director and Non-Executive Directors effectiveness of the internal audit function in the overall
context of the group’s risk management system
In compliance with the DFIM Circular No. 13, dated 26 October
 Reviews the reports and activities of the financial crime to
2011 of the Bangladesh Bank and Corporate Governance
guidelines of BSEC, the Committee consists of five (5) non- ensure the mitigation and control of fraud and related risks.
executive members of the Board including an Independent 8.2.4.3 Compliance
Director who is the Chairman of the Committee. The quorum of  Reviews, approves and monitors the group's compliance plan
the meeting shall not be filled until and unless the Independent  Monitors compliance with the Companies Act, Financial
Director attends the meeting. The Company Secretary acts as Institutions Act, the BSEC Rules and Listings Requirements,
the secretary of the Audit Committee. and all other applicable legislation and governance codes.
Head of Internal Audit has direct access to the Audit Committee 8.2.4.4 Financial Reporting and Financial Controls
which can be ensured by our Corporate Organogram portrayed  reviews the group’s audited annual financial statements, interim
on page 54 Of this Report. financial results, summarised financial information, dividend
announcements and all financial information in the annual report
8.2.2 Members and 2017 Meeting Attendances and recommends them to the board for approval
Sl. No. Name Status Position Attendance

1 Mr. Al Mamoon Md. Sanaul Huq Independent Director Chairman 4/4
2 Mr. Mohammad A. Moyeen Director Member 3/4
3 Mr. M. Fakhrul Alam Director Member 1/4
4 Mr. Mirza Ejaz Ahmed Director Member 4/4
5 Mr. Mahbubul Anam Director Member 1/4
6 Mrs. Zaitun Sayef Independent Director Member -
 Mrs. Zaitun Sayef has been appointed as a member in the Board of Audit Committee of LankaBangla Finance Limited w.e.f. October 23, 2017.
8.2.3 Qualification of the members including the  evaluates the adequacy and effectiveness of the group’s
Chairman: accounting policies and all proposed changes in accounting
All the members of the Audit Committee including the Chairman policies and practices
vastly experienced with strong professional background. Details  reviews the basis for determination as a going concern
profile of Audit Committee members are provided on note 38 of  reviews the effectiveness of financial management, including
the financial statements on page 284. the management of financial risks, the quality of internal
accounting control systems and reports produced including
8.2.4 Summary of key terms of reference: financial reporting risks and internal financial controls
 Reviews the impact of new financial systems, tax and litigation
8.2.4.1 External audit matters on financial reporting
 assesses the independence and effectiveness of the external  Monitors the maintenance of proper and adequate
auditors on an annual basis accounting records, and the overall financial and operational
 oversees the appointment of external auditors, their terms of environment
engagement and fees
 reviews significant differences of opinion between external 8.2.4.5 Risk Management
auditors and management  Reviews the quarterly risk management report noting all
 Reviews the external auditors’ management reports significant financial and non-financial risks that may have
concerning deviations from and weaknesses in accounting an impact on the group.
and operational controls, and ensures that management  Considers any significant matters raised at RMC meetings.
takes appropriate action to satisfactorily resolve any issues
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8.2.4.6 Information Technology

 Considers the auditors’ use of relevant technology and techniques to improve audit coverage and audit efficiency
 Considers the impact of IT on financial controls.
8.2.5 Summary of Key Focus Areas in 2017

 Reviewed the financial information published by the group, including the content of the annual report and all other financial
reports such as the annual financial statements and interim reports, and recommended them to the board for approval
 Evaluated financial accounting and reporting issues that affected the group
 Reviewed, approved and monitored the external audit, internal audit and compliance plans
 Considered tax matters, including current and upcoming tax legislation
 Considered reports from internal audit, compliance and financial crime control, and monitored responses from management
where required
 Considered the group’s external auditors’ annual assessment of internal audit against the International Standards on Auditing,
which confirmed that the external auditors could place reliance on internal audit’s work for the purpose of the external audit
 Considered the routine independent quality assurance review of audit execution, the results of which confirmed that internal
audit had generally conformed with the International Institute of Internal Auditors Standards for the Professional Practice of
Internal Auditing
 Considered the requirements of the Companies Act in terms of assessing the independence of external auditors
 Approved the audit committee report for publication in the financial statements
8.2.6 Board Audit Committee Report

Board Audit Committee Report is given in page no. 95 to 97
8.3 Executive Committee

8.3.1 Members and 2017 Meeting Attendances
Sl. No. Name Status Position Attendance
1 Mr. Mohammad A. Moyeen Chairman Chairman 11/11
2 Mr. Al Mamoon Md. Sanaul Huq Independent Director Member 11/11
Mr. M. Fakhrul Alam
3 Director Member 9/11
4 Mr. Mahbubul Anam Director Member 6/11
8.3.2 Summary of Key Terms of Reference

The primary responsibility of the Board Executive Committee is to provide advice and support the Chief Executive Officer and
the Senior Management of the Company on strategic and business decision making within the guidelines of the Board and the
regulatory authorities. Delegated authority to the Board Executive Committee (BEC) includes the followings:
 To review and give approval of lease/loan proposal of the management, if deemed appropriate.
 To give approval on fixation of interest rate against the facilities.
 To review and monitor the recovery process particularly classified loan/leases.
 To address the issues that may be assigned by the Board.
If in the Committee’s opinion, any matter arises in the course of exercising the delegated authority that warrants the attention of
the Board, the Committee will refer that to the Board for its direction or resolution.
The Company Secretary of LankaBangla Finance Limited shall act as Secretary to the Committee and ensure the followings:
 Maintenance of the records of the Committee including the Terms of Reference as approved by the Board of the Company
together with any variation to those Terms of Reference from time to time.
 Preparation of minutes of the meeting of the Committee and place the same to the following meeting of the Board on regular
basis.
8.3.3 Summary of Key Focus Areas in 2017

Approval of Loans and advances amounted up to One Hundred Crore.
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9. Management Committees
9.1 Management Committee (MANCOM)
6. Mostafa Kamal Group Company Secretary Member Secretary
9.2 Risk Management Committee

5 Mohammed Kamrul Hasan Chief Risk Officer Member Secretary
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9.3 Management Credit Committee

4 Kazi Masum Rashed Chief Credit Officer Member Secretary
9.4 Asset Liability Committee (ALCO)

4 Quamrul Islam Head of Treasury & FIs Member Secretary
10 S.M. Abu Washib Head of Corporate Liability Member
11 Nazimuddin Ahmed SAVP- Treasury, FI & Central Bank dealing Member
12 Syed Mohammed Shamsul Arifeen Manager -Asset Liability Management Member
9.5 Central Compliance Unit (Anti Money Laundering Committee)

1 Mohammed Kamrul Hasan Chief Risk Officer & CAMLCO Chairman
2 A.K.M. Kamruzzaman Head of Operations Member
3 Khurshed Alam Head of Retail Finance Member
4 Quamrul Islam Head of Treasury Member
7 Rajib Roy Deputy CAMLCO Member Secretary
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9.6 IT Development Committee

ICT Steering Committee
8 Sheikh Mohammad Fuad Head of ICT Member Secretary
ICT Security Committee

4 Sheik Mohammad Fuad Head of ICT Member Secretary
6 A.B.M. Ahasan Ullah Head of ICT Security & Risk Member
9.7 Human Resource Committee

7 Md. Shariful Islam Mridha Head of Human Resources Member Secretary
9.8 Purchase Committee

1 A.K.M. Kamruzzaman Head of Operations Chairman
5 Muhammad Habib Haider Head of GIS Member Secretary
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9.9 Internal Control and Compliance Committee

5 Mohammed Kamrul Hasan Chief Risk Officer Member Secretary
9.10 Capital Market Operations Committee

4 Mohammad Nazmul Hasan Tipu Unit Head Corporate Credit Member
5 A M Margub Ahmed Manager-Capital Markets Member Secretary
9.11 Sustainable Finance Committee

2 Khurshed Alam Head of Retail Financial Services Member
8 Md. Kamruzzaman Khan Head of Personal Financial Services Member
9 Ujjal Kumar Manager-Risk Management Member Secretary
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9.12 Integrity Committee

1 A. K. M. Kamruzzaman Head of Operations Chairman
2 Mohammed Shoaib Head of Corporate Financial Services Member
3 S.M. Abu Washib Head of Corporate Liability Member
4 Md. Moniruzzaman Head of Emerging & Commercial Business Unit Member
5 Md. Minhaz Uddin Head of Personal Loan Member
7 Mohd. Shafiqul Islam Audit & Inspection Member
8 Arif Hasan Head of Retail Credit Member
9 Muhammad Azharul Islam Head of Retail Liability Member
10 Md. Nurul Islam Head of Small Business Member
11 Md. Moshiur Rahman Unit Head–Admin and Logistics Member
12 Abdullah Al Rajib Unit Head-Contact Center Member
13 Syed Mohammed Shamsul Arifeen Manager-Asset Liability Management Member
14 Md. Farhad Ul Alam Manager-Human Resources Divisioin Member Secretary
9.13 Innovation Committee

1 Mohammad Nazmul Hasan Tipu Unit Head Corporate Credit Chairman
2 Mohammad Hasan Hafizur Rahman Head of Gulshan Branch Member Secretary
3 Afzal Ahmed Head of Accounts Member
4 Md. Shahinur Rahman Head of Project & Structured Finance Member
5 Kazi Mohtasim Bellah Alom Head of Application & Database Services Member
6 Khandakar Zakaria Head of Auto Loan Member
7 Md. Nurul Islam Head of Small Business Member
8 Muhammad Habibur Rahman Head of Retail Asset Operations Member
9 Sharmin Sultana Senior Manager -Liability Operations Member
10 Reazul Haque FAVP-Human Resources Division Member
11 Md. Raziuddin Head of Brand Marketing & Communications Member
12 Tahmina Tawhid Senior Manager -Corporate Liability Member
13 Syed Mohammed Shamsul Arifeen Manager -Asset Liability Management Member
14 Md. Rubel Ahmed CSM-Banani Branch Member
15 Md. Jahangir Hossain Manager-ADC Member
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9.14 Business Review Management Committee (BRM)

7 Shamim Al Mamun Chief Financial Officer Member Secretary
9.15 Loan Monitoring & Recovery Committee

1 A. K. M. Kamruzzaman Head of Operations Chairman
2 Mohammad Faruk Ahmed Bhuya Head of Asset Operations Member Secretary
6 A. K. M. Rezaul Karim Head of Special Asset Management Member
8 Abu Md. Hasan Masud Head of Monitoring & Collections Member
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Corporate Governance Certification on Corporate Governance
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Certificate on Compliance of Conditions of Corporate Governance Guidelines to the Shareholders

of LankaBangla Finance Limited
We have examined the compliance of conditions of corporate governance guidelines of the Bangladesh Securities and Exchange
Commission (“BSEC”) by LankaBangla Finance Limited (the “Non-Banking Financial Institution”) as stipulated in the BSEC notification
no SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 and subsequent modification SEC/CMRRCD/2006158/147/
Admin/48 dated 21 July as 2013 as at 31st December 2017.
Management’s Responsibilities
Those charged with governance and management of LankaBangla Finance Limited are responsible for complying with the conditions
of corporate governance guidelines as stated in the aforesaid notification and reporting of the status of compliance in the annual
report.
Our Responsibilities
Our examination for the purpose of issuing this certification was limited to the checking of procedures and implementations thereof,
adopted by LankaBangla Finance Limited for ensuring the compliance of conditions of corporate governance and correct reporting
of compliance status on the attached statement on the basis of evidence gathered and representation received.
Conclusion
To the best of our information and according to the explanations given to us, we certify that LankaBangla Finance Limited has
complied with the conditions of corporate governance stipulated in the above mentioned BSEC notification and reported thereon.
Howlader Maria & Co.,

Dhaka, 28 February 2018

BSEC guidelines for Corporate Governance: Compliance Status
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Annexure-i
Status of Compliance with the conditions imposed by Bangladesh Securities and Exchange Commission (BSEC)’s notification No. SEC/
CMRRCD/2006-158/134/Admin/44, dated August 07, 2012 and subsequent modification SEC/CMRRCD/2006158/147/Admin/48 dated
21 July as 2013 issued under section 2CC of the Securities and Exchange Ordinance, 1969, is presented below:
(Report under Condition Number 7.00)
Compliance Status
Condition
Title Not Remarks
No. Complied
Complied
1. Board of Directors
1.1 Board Size (number of Directors - minimum 5 and maximum 20) 

1.2 Independent Directors
Independent Director(s) (at least one fifth of total number of Directors shall be
1.2 (i) 
Independent Director)
1.2 (ii) Independent Director means-
Who either does not hold any share in the company or hold less than one percent (1%)
1.2 (ii) (a) 
shares of the total paid-up shares of the company
Who is not a sponsor of the company and is not connected with the company’s any
sponsor or director or shareholder who holds 1% or more shares of the total paid up
1.2 (ii) (b) 
shares of the company, and his/her family members should not mention shares of the
company
Who does not have any other relationship, whether pecuniary or otherwise, with the
1.2 (ii) (c) 
company or its subsidiary/associate companies
1.2 (ii) (d) Who is not a member, director or officer of any stock exchange 
Who is not a shareholder, director or officer of any member of stock exchange or an
1.2 (ii) (e) 
intermediary of the capital market
Who is / was not a partner or an executive during the preceding 3 (three) years of the
1.2 (ii) (f) 
concerned company’s statutory audit firm
1.2 (ii) (g) Who shall not be an Independent Director in more than 3 (three) listed companies 
Who has not been convicted by a court of competent jurisdiction as a defaulter in
1.2 (ii) (h) 
payment of any loan to a bank or a Non-Bank Financial Institution (NBFI)
1.2 (ii) (i) Who has not been convicted for a criminal offence involving moral turpitude 
The Independent Director(s) shall be appointed by the Board of Directors and approved
1.2 (iii) 
by the shareholders in the Annual General Meeting (AGM)
The post of Independent Director(s) cannot remain vacant for more than 90 (ninety)
1.2 (iv) 
days
The Board of Directors shall lay down a code of conduct for all the members of the
1.2 (v) 
Board of Directors and annual compliance of the code to be recorded
The tenure of office of an Independent Director shall be for a period of 3 (three) years,
1.2 (vi) 
which may be extended for 1 (one) term only
1.3 Qualification of Independent Director
Independent Director shall be a knowledgeable individual with integrity who is able
1.3 (i) to ensure compliance with financial, regulatory and corporate laws and can make 
meaningful contribution to business
The person should be a Business Leader/Corporate Leader/Bureaucrat/University
Teacher with Economics or Business Studies or Law background/Professional like
1.3 (ii) Chartered Accountant, Cost & Management Accountant, Chartered Secretary. The 
Independent Director must have at least 12 (twelve) years of corporate management/
professional experiences
In special cases, the above qualifications may be relaxed subject to prior approval of
1.3 (iii) N/A
the Commission
Chairman of the Board of Directors & Chief Executive Officer should be different
1.4 person. The BOD should clearly define the roll and responsibilities of the Chairman 
and CEO
1.5 The Directors’ Report to Shareholders shall include
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Compliance Status
Condition
Title Not Remarks
No. Complied
Complied
1.5 (i) Industry outlook and possible future developments in the industry 
1.5 (ii) Segment-wise or product-wise performance 
1.5 (iii) Risks and concerns 
1.5 (iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin 
1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss N/A

Basis for related party transactions- a statement of all related party transactions should
1.5 (vi) 
be disclosed in the annual report
Utilization of proceeds from public issues, rights issues and/or through any others
1.5 (vii) 
instruments
An explanation, if the financial results deteriorate after the company goes for Initial
1.5 (viii) N/A
Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.
If significant variance occurs between Quarterly Financial performance and Annual
1.5 (ix) Financial Statements, the management shall explain the variance on their Annual N/A
Report
1.5 (x) Remuneration to directors including independent directors 
The Financial Statements prepared by the management of the company presence fairly
1.5 (xi) 
its financial position, the result of its operations, cash flows and changes in equity
1.5 (xii) Proper books of account of the company have been maintained 
Appropriate accounting policies have been consistently applied in preparation of
1.5 (xiii) the financial statements and the accounting estimates are based on reasonable and 
prudent judgment
International Accounting Standards (IAS) /Bangladesh Accounting Standards (BAS) /
International Financial Reporting Standards (IFRS) /Bangladesh Financial Reporting
1.5 (xiv) Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of 
the financial statements and any departure from those standards has been adequately
disclosed
The system of Internal Control is sound in design and has been effectively implemented
1.5 (xv) 
and monitored
There is no significant doubt upon the company’s ability to continue as a going concern.
1.5 (xvi) If company is not considered to be a going concern, the fact along with reasons thereof 
should be disclosed
Significant deviation from the last year’s operating results of the company shall be
1.5 (xvii) N/A
highlighted and the reasons thereof should be explained
1.5 (xviii) Key operating and financial data of at least 05 (five) preceding years shall be summarized 
If the company has not declared dividend (cash or stock) for the year, the reason shall
1.5 (xix) N/A
be given
Number of board meetings held during the year and attendance by each director shall
1.5 (xx) 
be disclosed
The pattern of shareholding shall be reported to disclose the aggregate number of
1.5 (xxi) 
shares.
1.5 (xxi) (a) Parents/Subsidiary/Associate Companies and other related parties (name wise details) 
Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of
1.5 (xxi) (b) 
Internal Audit and their spouse and minor children (name wise details)
Executives (top 5 (five)) salaried employees of the Company, other than the Directors,
1.5 (xxi) (c) 
CEO, CFO, Company Secretary and Head of Internal Audit
1.5 (xxi) (d) Shareholders holding 10% (ten percent) or more voting interest (name wise details) N/A
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Compliance Status
Condition
Title Not Remarks
No. Complied
Complied
1.5 (xxii) Appointment/Reappointment of Directors-
1.5 (xxii) (a) A brief resume of the director 
1.5 (xxii) (b) Nature of his/her expertise in specific functional areas 
Names of companies in which the person also holds the directorship and the
1.5 (xxii) (c) 
membership of committees of the board
2 Chief Financial Officer (CFO), Head of Internal Audit (Internal Control & Compliance) and Company Secretary (CS)
The company shall appoint a Chief Financial Officer (CFO), a Head of Internal Audit
(Internal Control & Compliance) and a Company Secretary (CS). The Board of Directors
2.1 
should clearly define the respective roles, responsibilities, and the duties of the CFO,
Head of Internal Audit and CS
2.2 CFO and the Company Secretary shall attend the meeting of the Board of Directors 
3 Audit Committee
3 (i) The company shall have an Audit Committee as sub-committee of the Board of Directors 
The Audit Committee shall assist the Board of Directors to ensure that the financial
3 (ii) statements reflect true and fair view of the financial position of the company and a 
good monitoring system within the business are in place
The Audit Committee shall be responsible to the Board of Directors. The duties of the
3 (iii) 
Audit Committee shall be clearly set forth in writing
3.1 Constitution of the Audit Committee
3.1 (i) The Audit Committee should be composed of at least 3 (three) members 
The Board of Directors shall appoint the members of the Audit Committee who shall be
3.1 (ii) 
Directors of the company and shall include at least 1 (One) Independent Director
All members of the Audit Committee should be “financially literate” and at least 1 (one)
3.1 (iii) 
member shall have accounting or related financial management experience
When the term of service of the committee members expires or there is any
circumstances causing a committee member to be unable to hold office until expiration
of the term of services, thus making the number of the committee members lower of
3.1 (iv) the prescribed number of 3 (three) member, the Board of Directors shall appoint the 
new committee member(s) to fill up the vacancy(ies) immediately or not later than 1
(One) month from the date of the vacancy(ies) in the committee to ensure continuity of
the performance of work of the Audit Committee
3.1 (v) The Company Secretary shall act as the Secretary of the Committee 
The quorum of the Audit Committee meeting shall not constitute without at least 1
3.1 (vi) 
(one) Independent Director
3.2 Chairman of the Audit Committee
The Board of Directors shall select 1 (one) member of the Audit Committee to be
3.2 (i) 
Chairman of the Committee, who shall be an Independent Director
Chairman of the Audit Committee shall remain present in the Annual General Meeting
3.2 (ii) 
(AGM)
3.3 Role of the 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 
Review, along with the management, the annual financial statements before submission
3.3 (v) 
to the Board of Directors for approval
Review along with the management, the quarterly and half yearly financial statements
3.3 (vi) 
before submission to the Board Directors for approval
3.3 (vii) Review the adequacy of internal audit function 
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Compliance Status
Condition
Title Not Remarks
No. Complied
Complied
3.3 (viii) Review statement of significant related party transactions submitted by the management 
Review Management Letters/ Letter of Internal Control weakness issued by statutory
3.3 (ix) 
auditors
When money is raised through Initial Public Offering (IPO)/ Repeat Public Offering (RPO) /
Rights issue, the company disclosed to the Audit Committee about the uses/ applications
of funds by major categories (Capital Expenditure, Sales & Marketing Expenses, Working
3.3 (x) 
Capital etc.), on a quarterly basis, as a part of their quarterly declaration of financial
results. Further, on an annual basis, the company prepares a Statement of Fund utilized
for the purposes other than those stated in the office documents/ prospectus
3.4 Reporting of the Audit Committee
3.4.1 Reporting to the Board of Directors
The Audit Committee shall report on its activities to the Board of Directors 
The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:-
3.4.1 (a) Conflict of interest N/A

Suspected or presumed fraud or irregularity or materials defect in the internal control
3.4.1 (b) N/A
system
3.4.1 (c) Suspected infringement of laws, including securities related laws, rules and regulations N/A
Reporting of any other matter which shall be disclosed to the Board of Directors
3.4.1 (d) N/A
immediately
Reporting to Authorities
If any report which has material impact on the financial position & results of operation
which has been discussed with the Board of Directors and the management that any
3.4.2 rectification is necessary and which is unreasonably ignored, the Audit Committee shall N/A
report such findings to the Commission upon reporting of such matters to the Board of
Directors three times or completion of a period of 6 (six) month from the date of first
reporting to the Board of Directors whichever is earlier
Reporting to Shareholders and General Investors
3.5 Report on activities carried out by the Audit Committee including any report made to N/A
the Board of Directors under condition 3.4.1 (ii) above during the year, shall be signed by
the Chairman of the Audit Committee and disclosed in the annul report of the Company
4 External/Statutory Auditors shall not be engaged to perform the following services of the company:
4 (i) Appraisal or valuation services or fairness opinion 
4 (ii) Financial Information System 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 services that the Audit Committee determines 
No partner or employees of the external audit firms shall possess any share of the
4 (viii) 
Company they audit at least during the tenure of their audit assignment of that Company
Audit/certification services on compliance of corporate governance as required under

4 (ix) 
clause (i) of condition No. 7
5 Subsidiary Company
Provisions relating to the composition of the Board of Directors of the holding company
5 (i) shall be made applicable to the composition of the Board of Directors of the subsidiary 
company
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Compliance Status
Condition
Title Not Remarks
No. Complied
Complied
At least 1 (one) Independent Director on the Board of Directors of the holding company
5 (ii) 
shall be Director on the Board of Directors of the subsidiary company
The minutes of the Board of Directors meeting of the subsidiary company shall be
5 (iii) 
placed for review at the following Board of Directors meeting of the holding company.
The minutes of the respective Board of Directors meeting of the holding company shall
5 (iv) 
state that they have reviewed the affairs of the subsidiary company too
The Audit Committee of the holding company shall also review the financial statements,
5 (v) 
in particular the investments made by the subsidiary company
6 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
The CEO and CFO shall certify to the Board of Directors that:
They have reviewed financial statements for the year and that to the best of their
knowledge and belief:
These statements do not contain any materially untrue statement or omit any material
6 (i) (a) 
fact or contain statements that might be misleading
These statements together present a true and fair view of the companys’ financial
6 (i) (b) position and are in compliance with existing accounting/reporting standards and 
applicable laws
There are, to the best of knowledge and belief, no transactions entered into by the
6 (ii) company during the year which are fraudulent, illegal or violation of the company’s 
code of conduct
7 Reporting and Compliance of Corporate Governance:
The Company shall obtain a certificate from a practicing Professional Accountant/
Secretary (Chartered Accountant/Cost & Management Accountants/Chartered
7 (i) Secretary) regarding compliance of conditions of Corporate Governance Guidelines of 
the Commission and shall send the same to the shareholders along with the Annual
Report on a yearly basis
The Board of Directors of the company shall state, in accordance with the Annexure of
7 (ii) notification Number: SEC/CMRRCD/2006-158/134/Admin/44, dated 07 August 2012 in 
the Directors’ Report whether the company has complied with these conditions
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Annexure-ii
Statement of compliance on the Good Governance guideline issued by the Bangladesh Bank, vide the DFIM Circular No. 7 dated 25
September 2007, Bangladesh Bank issued a policy on responsibility & accountability of Board of Directors, Chairman & Chief Executive
of the financial institution. The Board of Directors of the Company has taken appropriate steps to comply with the guidelines and
implemented the same.
Sl. No. Particulars Compliance Status
1. Responsibilities and authorities of the Board of Directors:
(ka) Work-planning and strategic management:
(1) The Board shall determine the objectives and goals and to this end shall chalk out strategies
and work-plans on annual basis. It shall specially engage itself in the affairs of making strategies
consistent with the determined objectives and goal and in the issues relating to structural change and Complied
reorganization for enhancement of institutional efficiency and other relevant policy matters. It shall
analyze/monitor at quarterly rests the development of implementation of the work-plans.
(2) The Board shall have its analytical review incorporated in the Annual report as regard the success/
failure in achieving the business and other targets as set out in its annual work-plan and shall apprise Complied
the shareholders of its opinions/recommendations on future plans and strategies.
(3) The Board will set the Key Performance Indicator (KPI)s for the CEO and other senior executives
Complied
and will evaluate half yearly / yearly basis.
(kha) Formation of sub-committee:
Executive Committee may be formed in combination with directors (excluding any alternate Director)
and management of the Company only for rapid settlement of the emergency matters (approval of Complied
loan/lease application, write-off , rescheduling etc.) arisen from the regular business activities.
(Ga) Financial management:
(1) Annual budget and statutory financial statements shall be adopted finally with the approval of
Complied
the Board.
(2) Board shall review and examine in quarterly basis various statutory financial statements such as
statement of income-expenses, statement of loan/lease, statement of liquidity, adequacy of capital, Complied
maintenance of provision, legal affairs including actions taken to recovery of overdue loan/lease.
(3) Board shall approve the Company’s policy on procurement and collection and shall also approve
the expenditures according to policy. The Board shall delegate the authority on the Managing Director Complied
and among other top executives for approval of expenditure within budget to the maximum extend.
(4) The Board shall adopt the operation of bank accounts. Groups may be formed among the
Complied
management to operate bank accounts under joint signatures.
(Gha) Management of loan/lease/investments:
(1) Policy on evaluation of loan/lease/investment proposal, sanction and disbursement and its regular
collection and monitoring shall be adopted and reviewed by the Board regularly based on prevailing
Complied
laws and regulations. Board shall delegate the authority of loan/lease/investment specifically to
management preferably on Managing Director and other top executives.
(2) No director shall interfere on the approval of loan proposal associated with him. The director
Complied
concerned shall not give any opinion on that loan proposal.
(3) Any syndicated loan/lease/investment proposal must be approved by the Board. Complied
(Uma) Risk management:
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Annual Integrated
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Risk Management Guideline framed in the light of Core Risk Management Guideline shall be approved
Complied
by the Board and reviewed by the Board regularly.
(Ca) Internal control and compliance management:
A regular Audit Committee as approved by the Board shall be formed.

Board shall evaluate the reports presented by the Audit Committee on compliance with the Complied
recommendation of internal auditor, external auditors and Bangladesh Bank Inspection team.
(Cha) Human resource management:

Board shall approve the policy on Human Resources Management and
Service Rule. Chairman and director of the Board shall not interfere on the administrative job in line Complied
with the approved Service Rule.
Only the authority for the appointment and promotion of the Managing Director/Deputy Managing
Director/ General Manager and other equivalent position shall lie with the Board incompliance with
Complied
the policy and Service Rule. No director shall be included in any Executive Committee formed for the
purpose of appointment and promotion of others.
(Ja) Appointment of CEO:
The Board shall appoint a competent CEO for the Company with the
Complied
approval of the Bangladesh Bank and shall approve any increment of his salary and allowances.
(Jha) Benefits offer to the Chairman:
Chairman may be offered an office room, a personal secretary, a telephone at the office, a vehicle in
Complied
the business-interest of the Company subject to the approval of the Board.
02. Responsibilities of the Chairman of the Board of Directors:
(Ka)Chairman shall not participate in or interfere into the administrative or operational and routine
Complied
affairs of the Company as he has no jurisdiction to apply executive power;
(Kha) The minutes of the Board meetings shall be signed by the Chairman; Complied
(Ga) Chairman shall sign-off the proposal for appointment of Managing Director and increment of his
Complied
salaries & allowances;
03. Responsibilities of Managing Director:
(Ka) Managing Director shall discharge his responsibilities on matters relating to financial, business
and administration vested by the Board upon him. He is also accountable for achievement of financial
Complied
and other business targets by means of business plan, efficient implementation of administration and
financial management;
(Kha) Managing Director shall ensure compliance of Financial Institutions Act 1993 and other relevant
Complied
circulars of Bangladesh Bank and other regulatory authorities;
(Ga) All recruitment/promotion/training, except recruitment /promotion/training of DMD, shall be

vested upon the Managing Director. He shall act such in accordance the approved HR Policy of the Complied
Company;
(Gha) Managing Director may re-schedule job responsibilities of employees; Complied
(Uma) Managing Director may take disciplinary actions against the employees except DMD; Complied
(Cha) Managing Director shall sign all the letters/statements relating to compliance of polices and
guidelines. However, Departmental/Unit heads may sign daily letters/statements as set out in DFIM
Complied
circular no.
2 dated 06 January 2009 if so authorized by MD.
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Risk Management Guideline framed in the light of Core Risk Management Guideline shall be approved
Complied
by the Board and reviewed by the Board regularly.
(Ca) Internal control and compliance management:
A regular Audit Committee as approved by the Board shall be formed.
Board shall evaluate the reports presented by the Audit Committee on compliance with the Complied
recommendation of internal auditor, external auditors and Bangladesh Bank Inspection team.
(Cha) Human resource management:
Board shall approve the policy on Human Resources Management and
Service Rule. Chairman and director of the Board shall not interfere on the administrative job in line Complied
with the approved Service Rule.
Only the authority for the appointment and promotion of the Managing Director/Deputy Managing
Director/ General Manager and other equivalent position shall lie with the Board incompliance with
Complied
the policy and Service Rule. No director shall be included in any Executive Committee formed for the
purpose of appointment and promotion of others.
(Ja) Appointment of CEO:
The Board shall appoint a competent CEO for the Company with the
Complied
approval of the Bangladesh Bank and shall approve any increment of his salary and allowances.
(Jha) Benefits offer to the Chairman:
Chairman may be offered an office room, a personal secretary, a telephone at the office, a vehicle in
Complied
the business-interest of the Company subject to the approval of the Board.
02. Responsibilities of the Chairman of the Board of Directors:
(Ka)Chairman shall not participate in or interfere into the administrative or operational and routine
Complied
affairs of the Company as he has no jurisdiction to apply executive power;
(Kha) The minutes of the Board meetings shall be signed by the Chairman; Complied
(Ga) Chairman shall sign-off the proposal for appointment of Managing Director and increment of his
Complied
salaries & allowances;
03. Responsibilities of Managing Director:
(Ka) Managing Director shall discharge his responsibilities on matters relating to financial, business
and administration vested by the Board upon him. He is also accountable for achievement of financial
Complied
and other business targets by means of business plan, efficient implementation of administration and
financial management;
(Kha) Managing Director shall ensure compliance of Financial Institutions Act 1993 and other relevant
Complied
circulars of Bangladesh Bank and other regulatory authorities;
(Ga) All recruitment/promotion/training, except recruitment /promotion/training of DMD, shall be
vested upon the Managing Director. He shall act such in accordance the approved HR Policy of the Complied
Company;
(Gha) Managing Director may re-schedule job responsibilities of employees; Complied
(Uma) Managing Director may take disciplinary actions against the employees except DMD; Complied
(Cha) Managing Director shall sign all the letters/statements relating to compliance of polices and
guidelines. However, Departmental/Unit heads may sign daily letters/statements as set out in DFIM
Complied
circular no.
2 dated 06 January 2009 if so authorized by MD.
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Annual Integrated
Report 2017
Annexure -III
Compliance Report on BSEC’s Notification
Compliance of Section 1.5(xx)
Board of Directors meeting held during the year 2017 and attendance by each Director:
Sl. No. Composition of the Board Meeting held Attended
1 Mr. Mohammad A. Moyeen 6 5
2 Mr. I. W. Senanayake 6 5
3 Mr. M. Y. Aravinda Perera 6 3

Mr. B. W. Kundanmal
4 6 3
(Alternate Director of Mrs. Aneesha Mahial Kundanmal)
5 Mr. M. Fakhrul Alam 6 4
6 Mr. Mirza Ejaz Ahmed 6 3
7 Mr. Mahbubul Anam 6 3

Dr. M. Mahbubul Huque
8 6 6
(Alternate Director of Mr. Tahsinul Huque)
Mr. Al Mamoon Md. Sanaul Huq
9 6 6
(Independent Director)
Mrs. Zaitun Sayef
10 6 6
(Independent Director)
Notes:
 Director who could not attend meetings were granted leave of absence by the Board.
Board of Executive Committee meeting held during the year 2017 and attendance by each Director:
Sl. No. Composition of the Committee Meeting held Attended

Mr. M. Fakhrul Alam
3 11 9
4 Mr. Al Mamoon Md. Sanaul Huq - Independent Director 11 11
Notes:
 Directors who could not attend meetings were granted leave of absence by the Board.
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Board of Audit Committee meeting held during the year 2017 and attendance by each Director:
Sl. No. Composition of the Committee Meeting held Attended

1 Mr. Al Mamoon Md. Sanaul Huq 4 4
Mr. M. Fakhrul Alam
3 4 2
Mr. Mirza Ejaz Ahmed
4 4 1
(Representing SSC Holdings Limited)
Notes:
 Directors who could not attend meetings were granted leave of absence by the Board.
 Mr. Mirza Ejaz Ahmed has resigned from the Board of LankaBangla Finance Limited w. e. f. August 5, 2017
Compliance of Section 1.5(xxi)

The Pattern of Shareholding
a) Parent/Subsidiary/Associated companies and other related party :
Name Relation Shares Held
Sampath Bank PLC, Sri Lanka Related Party 30,143,437
b) Directors, Chief Executive Officer/Managing Director, Company Secretary, Chief Financial Officer, Head of Internal Audit and
their spouse and minor children :
Name Designation Shares Held
Mr. Mohammad A. Moyeen Chairman 13,491,355
Mr. I.W. Senanayake
Representative of Sampath Bank PLC 30,143,437
Mr. M.Y. Aravinda Perera
Mr. M. Fakhrul Alam Representative of ONE Bank Limited 12,026,719
Mrs. Aneesha Mahial Kundanmal Director 24,513,161
Mr. Tahsinul Huque Director 12,399,383
Mr. Mahbubul Anam Director 14,174,230
Mr. Al Mamoon Md. Sanaul Huq Independent Director Nil
Mrs. Zaitun Sayef Independent Director Nil
Mr. Khwaja Shahriar Managing Director Nil
Mr. Mostafa Kamal FCA Company Secretary Nil
Mr. Mohammed Kamrul Hasan FCA Head of Internal Audit Nil
Mr. Shamim Al Mamun FCA Chief Financial Officer Nil
c ) Executives (Top five salaried employees of the company, other than Directors, CEO, CFO, Company Secretary and Head of
Internal Audit)
Name Designation Shares Held
Mr. A K M Kamruzzaman FCMA Senior Executive Vice President None
Mr. Quamrul Islam Senior Executive Vice President None
Mr. Khurshed Alam Senior Executive Vice President None
Mr. Kazi Masum Rashed Executive Vice President None
Mr. Mohammad Shoaib Executive Vice President 8,100
d ) Shareholding ten percent (10%) or more voting interest in the company: None
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Corporate Governance Board Audit Committee Report
95
BOARD AUDIT Annual Integrated
Report 2017
COMMITTEE REPORT
1. The Composition of the Committee to financial and other connected affairs of LankaBangla. The
In accordance with the currently accepted Best Practice and Committee is empowering to monitor, review and examine:
Corporate Governance Guidelines, the Board appointed Audit  The integrity of the financial statements of LBFL and all
Committee comprising of the following Directors of the Company: subsidiaries;
 The Company’s external auditors' qualifications and
 Mr. Al-Mamoon Md. Sanaul Huq- Independent Director
independence, the performance and effectiveness of
(Chairman)
the Company’s internal and external audits, internal
 Mr. Mohammad A Moyeen
controls and the measurement of operational risk, and
 Mr. Mahbubul Anam the compliance by the Company with legal and regulatory
 Mr. M. Fakhrul Alam requirements.
 Mr. Mirza Ejaz Ahmed  Examine any matter relating to the financial and other
The Chairman of the Committee was a Consultant of World Bank connected to the company.
Dhaka Office, Controller General of Accounts and Comptroller  Monitor all internal and external audit and Bangladesh
& Auditor General of Bangladesh and possesses considerable Bank’s inspection program.
experience in the field of Audit, Finance & Management. The  Review the efficiency of Internal Control systems and
Portfolios of the members are given in pages 40 to 44. procedures, in place.
 Review the quality of Accounting Policies and their
The Committee is responsible and reports to the Board of
adherence to Statutory and Regulatory Compliance.
Directors. The Managing Director and the Chief Financial Officer  Review the Company’s Annual Report and Accounts and
attend committee meetings by invitation. The Board Secretary Interim Financial Statements prepared for disclosure,
functions as the Secretary of the Committee. before submission to the Board
2. The Charter of the Audit Committee  Ensure that a well managed sound financial reporting system
is in place to provide timely reliable information to the
The Audit Committee charter is periodically reviewed and Board of Directors, Regulatory Authorities, Management
revised with approval of the Board of Directors. The Terms and all other stakeholders.
of Reference of Audit Committee is clearly defined in the  Ensure Company’s policies are firmly committed to the
Charter of the Audit Committee. The process ensures that new highest standards of good corporate governance practices
developments and concerns are adequately addressed. The and operations conform to the highest ethical standards
Committee is responsible to the Board of Directors and reports and in the best interests of all stakeholders.
on its activity regularly. The functions of the committee are
geared to assists the Board in its general oversights on financial 5. Meetings
reporting, internal audit, internal controls, risk management The Committee held on four (4) meetings during the year under
and external audit. review. The attendance of Committee members at meetings
Bangladesh Bank's DFIM Circular No. 13, dated; 26/10/2011, on is stated in the table on page 76 Members of the senior
formation of Audit Committee and its subsequent amendments management of the company were invited to participate at
and The Securities and Exchange Commission Notification no. meetings as and when required. The proceedings of the Audit
SEC/CMRRCD/2006-158/134/Admin/44, dated: 07/08/2012, Committee meetings are regularly reported to the Board of
on “Code of the best Practice on Corporate Governance” for Directors. On invitation of the Committee, the Engagement
Partner of Company’s external auditors, ACNABIN, Chartered
listed companies further regulate the compositions, roles and
Accountants attended two (2) Committee meetings during
functions of the Audit Committee.
the year. The Committee continued guiding the management
3. Terms of Reference with the selection of the new Accounting Policies which is
The Terms of Reference of the Audit Committee clearly defines
required under the aforesaid new Accounting Standards and
the roles and responsibility of the Audit Committee. The Terms of implementing same.
Reference is periodically reviewed and revised with the concurrence 6. Activities
of the Board of Directors. The Audit is responsible to and reports
to the Board of Directors. The Role and functions of the Committee The Committee carried out the following activities during the
are further regulated by the rules governing the Audit Committee year 2017:
as specified by the “Conditions on Corporate Governance” issued 6.1 Financial Reporting
by the Securities and Exchange Commission and Guidelines on
Corporate Governance & Responsibilities of Audit Committee The Committee supports the Board of Directors to discharge
issued by Bangladesh Bank. their responsibility for the preparation of Financial Statements
that reflect a true and fair view of the financial performance and
4. Roles and responsibilities of the Audit Committee financial position based of the Company’s accounting records
The role and functions of the Committee are further regulated and in terms of the Bangladesh Accounting Standards, by:
by the rules governing the Audit Committee as specified by the  Reviewing the systems and procedures to ensure that all
Guidelines of Bangladesh Bank on ‘Corporate Governance for NBFI’s transactions are completely and accurately recorded in the
in Bangladesh’ and also ‘Conditions on Corporate Governance’ by books of account.
the Securities and Exchange Commission.  Reviewing the effectiveness of the financial reporting system
The main objective of the Audit Committee is to assist the Board of in place to ensure reliability of the information provided to the
Directors to effectively carry on its responsibilities relating stakeholders
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 Reviewing the Accounting Policies and to determine the most independent and reasonable, but not absolute, assurance that
appropriate accounting policies after consideration of all the LankaBangla system of risk management, control, and
choices available governance processes, as designed and implemented by senior
 Strict adherence and compliance with the Bangladesh management, are adequate and effective. Internal Audit reports
Accounting Standards and recommended best accounting on the adequacy of the system of internal controls to the Audit
practices Committee and management, but does not form any part of
 Reviewing the Annual Report and Accounts and the Interim the system of internal controls. Internal Audit has implemented
Financial Statements prepared for publication, prior to risk-based audit processes. Audit work is prioritized and scoped
submission to the Board according to an assessment of risk exposures, including not only
financial risks, but operational, compliance and strategic risks
Having assessed the internal financial controls, the Committee is
as well.
of the view that adequate controls and procedures are in place
to provide reasonable assurance that the Company’s assets are The work undertaken by Internal Audit includes the audit
safeguarded and that the financial position is well monitored. of the Company’s system of internal controls over its key
operations, review of security and access controls for the
6.2 Regulatory Compliance Company’s computer systems, review of control processes
The Company’s procedures in place to ensure Compliance within and around new products and system enhancements,
with Mandatory Bangladesh Bank’s instructions and statutory and review of controls over the monitoring of market, liquidity,
requirements were under close scrutiny. The Committee and credit risks. Internal Audit also participates in major new
monitors the due compliance with all requirements through system developments and special projects, to help evaluate
the quarterly statements submitted by the Internal Audit risk exposures and to help ensure that proposed compensating
Department. The Committee monitors the due compliance with internal controls are adequately evaluated on a timely basis. It
all requirements through the quarterly statements submitted also ascertains that the internal controls are adequate to ensure
by the Internal Audit Department. The Committee monitors prompt and accurate recording of transactions and proper
due compliance with all relevant Laws, Regulations and timely safeguarding of assets, and that the Company complies with
settlements of Statutory dues. laws and regulations, adheres to established policies and takes
appropriate steps to address control deficiencies.
6.3 Identification of Risk and Control measures
In view the fact LankaBangla has adopted a risk-based audit The Audit Committee is responsible for the adequacy of the
approach, the effectiveness of internal control procedures internal audit function, its resources and its standing, and
in place to identify and manage all significant risks are being ensures that processes are in place for recommendations raised
reviewed by the Committee throughout the Company and other in internal audit reports to be dealt with in a timely manner
Group entities. The Risk Management was invited to make and outstanding exceptions or recommendations are closely
presentations on Risk Management measures adopted in their monitored. Internal Audit reports functionally to the Audit
areas of responsibility. Risk rating guidelines with an appropriate Committee and administratively to the Managing Director,
Risk Grading Matrix has been formulated for assessing and and has unfettered access to the Audit Committee, Board and
measuring the operational risks identified during inspections. senior management, as well as the right to seek information and
The Committee seeks and obtains the required assurances from explanations. The Audit Committee approves the appointment
the Business Units on the remedial action in respect of the and removal of the Head of Internal Audit.
identified risks in order to maintain the effectiveness of internal 6.6 External Audit
control procedures in place.
The Committee met with the Auditors prior to commencement
6.4 Corporate Governance Report and at the conclusion of the Annual Audit to discuss the audit
As required by the provisions of Corporate Governance scope, approach and methodology to be adopted and the
Guidelines issued by the Bangladesh Securities & Exchange findings of the audit. The Committee subsecuently reviewed
the external auditor's findings in order to be satisfied that
Commission (BSEC) through notification Number: SEC/
appropriate action is being taken. Non-Executive Directors had
CMRRCD/2006-158/134/ Admin/44, dated 07 August 2012
separate meetings with Auditors to ensure they had no cause
Corporate Governance for Licensed Financial Institutions in to compromise on their independence. Auditors' Management
Bangladesh, Annual Corporate Governance Report for 2017 Letter together with the Management's response thereto and
is provided on pages 70 to 83. The external auditors have the Audited Financial Statements were reviewed with the
performed procedures set out by the Bangladesh Securities Auditors. The Committee reviewed the non-audit services
and Exchange Commission (BSEC), to meet the compliance provided by the Auditors to ensure that such services do not fall
requirement of the Corporate Governance directive. Their within the restricted services and provision of such services does
findings presented in their report, addressed to the Board are not impair the External Auditors independence and objectivity.
consistent with the matters disclosed above and did not identify
any inconsistencies to those reported by the Board on pages 84 6.7 Internal Controls
to 94. The Board believes, with the concurrence of the Audit Committee,
that the system of internal controls, including financial,
6.5 Internal Audit Function operational and compliance controls and risk management
The Audit Committee approves the terms of reference of systems, maintained by the Company’s management and that
internal audit and reviews the effectiveness of the internal was in place throughout the financial year and up to and as
audit function. In line with leading practice, it to provide of the date of this report, is adequate to meet the needs of
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Annual Integrated
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the company in its current business environment. The system 6.10 Appointment of the External Auditor
of internal controls provides reasonable, but not absolute, The Audit Committee has recommended to the Board of
assurance that the Company will not be adversely affected by any Directors that M/s. S. F. Ahmed Chartered Accountants, may
event that could be reasonably foreseen as it strives to achieve be appointed for the financial year ending 31 December 2018,
its business objectives. However, the Board also notes that no subject to the approval of shareholders at the next Annual
system of internal controls can provide absolute assurance in General Meeting.
this regard, or absolute assurance against the occurrence of
material errors, poor judgment in decision-making, human 7. Evaluation of the Committee
error, losses, fraud or other irregularities.
An evaluation on the effectiveness of the Committee was
6.8 Ethics and Good Governance carried out by the other Members of the Board of Directors and
Highest standards in Corporate Good Governance and strict the Committee has been found to be effective.
adherence to the requirements of LBFL's Code of Ethics are
ensured through close monitoring. Through the Code of Ethics
all levels of staff have been educated and encouraged to resort
to whistle blowing, when they suspect wrong doings or other
improprieties. The Committee also ensures that appropriate
procedures are in place to conduct independent investigations
into all such incidents.
6.9 Bangladesh Accounting Standards
The Committee continued to monitor the progress of the
mandatory implementation of Bangladesh Accounting Standards
Al-Mamoon Md. Sanaul Huq
(BAS) with converged with International Financial Reporting
Chairman – Audit Committee
Standards (IFRS). Committee reviewed the revised policy
decisions relating to adoption of new and revised BAS applicable
Dhaka
to the Financial Institutions and made recommendations to the
13 February, 2018
Board.
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Corporate Governance Statement on Directors’ Responsibilities
98
LankaBangla
STATEMENT ON
DIRECTORS’ RESPONSIBILITIES
The statement sets out the responsibility of the Directors, in  The Directors also have taken reasonable measures to safeguard
relation to the Financial Statements of the LankaBangla Finance the assets of the Company and the Group and to prevent
Limited (The Company) and the Consolidated Financial Statements and detect frauds and other irregularities. In this regard, the
of the Company and its subsidiaries (Group). The responsibilities of Directors have instituted an effective and comprehensive
the External Auditors in relation to the Financial Statements are set system of internal controls comprising of internal checks,
out in the “Auditors’ Report” given on page 213. internal audit and financial and other controls required to carry
In terms of the sections 181, 183, 185, 186, 187 and 189 of the on the business of financial institution in an orderly manner
Companies Act, 1994 (Act XVIII of 1994), the Directors of the and safeguard its assets and secure as far as practicable, the
Company are responsible for ensuring that the Group and the accuracy and reliability of the records. The Directors Statement
Company keep proper books of accounts of all the transactions and on Internal Control is given in page 99 of this Annual Report;
prepare Financial Statements that gives a true and fair view of the  To the best of their knowledge, all taxes, duties and levies
financial positions of the Company and the Group for each financial payable by the Company and its Subsidiaries, and all other
year and place them before a general meeting. The Financial known statutory dues as were due and payable by the Company
Statements comprises of the Statements of Financial Positions and its Subsidiaries as at the reporting date have been paid or,
as on 31 December 2017, Statements of Comprehensive Income, where relevant, provided for ;
Statement of Changes in Equity, Statement of Cash Flows for the  As required by the Sections 183(2) of the Companies Act, 1994,
year then ended and notes thereto. they have prepared this Annual Report in time and ensured that
a copy thereof is sent to every shareholders of the Company,
Accordingly, the Directors confirms that the Financial Statements of who have expressed desire to receive a hard copy or to other
the Company and the Group give a true and fair view of: shareholders a soft copy each in a CD containing the Annual
 The financial position of the Company and the Group as on 31 Report within the stipulated period of time as required by the
December 2017; and Clause 22 of the Listing Regulations 2015 of the Dhaka and
 The financial performance of the Company and the Group for Chittagong Stock Exchanges;
the financial year then ended.  That all shareholders in each category have been treated
equitably in accordance with the original terms of issue;
Compliance Report  That after considering the financial positions, operating
The Board of Directors also confirms that: conditions, regulatory and other factors and such matters
 Appropriate Accounting Policies have been selected and required to be addressed in the “Code of Corporate Governance”
applied in preparing the Financial Statements exhibited issued separately by Bangladesh Securities and Exchange
on pages 227 to 243 based on the latest financial reporting Commission and Bangladesh Bank for the financial institutions,
framework on a consistent basis, while reasonable and prudent the Directors have a reasonable expectation that the Company
judgments have been made so that the form and substances of and its Subsidiaries possess adequate resources to continue
transactions are properly reflected and material departures, if its operation for the foreseeable future. For this reason, we
any, have been disclosed and clarified; continue to adopt the going concern basis in preparing the
 The Financial Statements for the year 2017, prepared and Financial Statements;
presented in this annual report have been prepared based on  The Financial Statements of the Company and the Group have
the Bangladesh Accounting Standards (BAS) are in agreement been signed by two Directors, the Managing Director and the
with the underlying books of account and are in conformity Company Secretary of the Company on 13 February, 2018 as
with the requirements of the Bangladesh Financial Reporting required by Section 189(1) of the Companies Act, 1994 and
Standards (BFRS), the Financial Institutions Act, 1993, the other regulatory requirements ;
Companies Act, 1994, the Securities and Exchange Rules, 1987  The Company’s External Auditors, ACNABIN who were appointed
and other applicable laws & regulations; in terms of Section 210 of the Companies Act, 1994 and in
 These Financial Statements comply with the prescribed format accordance with a resolution passed at the last Annual General
issued by the Bangladesh Bank vide DFIM Circular No. 11, Meeting, were provided with every opportunity to undertake
dated; 23/11/2009 for the preparation of annual Financial the inspections they considered appropriate. They carried out
Statements of financial institutions; reviews and sample checks on the system of internal controls as
 Proper accounting records which correctly record and explain they considered appropriate and necessary for expressing their
the Company’s transactions have been maintained as required opinion on the Financial Statements and maintaining accounting
by section 181 of the Companies Act, 1994 to determine at any records. They have examined the Financial Statements made
point of time the Company’s financial position, in accordance available to them by the Board of Directors of the Company
to the Act to facilitate proper audit of the Financial Statements; together with all the financial records, related data and minutes
 The Directors have taken appropriate steps to ensure that the of shareholders’ and Directors’ meetings and expressed their
Company and the Group maintain proper books of accounts opinion which appears on page 213.
and review the financial reporting system directly by them Accordingly, the Directors are of the view that they have discharged
at their regular meetings and also through the Board Audit their responsibilities as set out in this statement.
Committee, the report of the Audit Committee is given in
By Order of the Board
pages 95 to 97. The Board of Directors also approves the
interim Financial Statements prior to their release, following a
review and recommendation by the Board Audit Committee;
 The Board of Directors accepts responsibility for the integrity and
objectivity of the Financial Statements presented in this Annual Mostafa Kamal, FCA
Report; Group Company Secretary Dhaka, 13 February 2018
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Corporate Governance Directors’ Statement on Internal Control
99
DIRECTORS’ STATEMENT ON Annual Integrated
Report 2017
INTERNAL CONTROL
Responsibility  The Audit Committee of the Company reviews internal
control issues identified by the Internal Audit Division, the
As per the Bangladesh Bank's DFIM Circular No. 07, dated; 25-
external auditors, regulatory authorities and management;
09-2007, DFIM Circular Letter No. 09, dated; 08-10-2007, DFIM
and evaluates the adequacy and effectiveness of the risk
Circular Letter No. 18, dated; 26-10-2011 and DFIM Circular management and internal control systems. They also review
Letter No. 06, dated; 17-06-2012, which clearly define the the internal audit function with particular emphasis on the
Responsibility of the Board of Directors on Internal Control of scope of audits and quality of the same. The minutes of the
the Company. Audit Committee meetings are tabled for the information to
The Board of Directors (“Board”) is responsible for the the Board on a periodic basis. Further details of the activities
adequacy and effectiveness of internal controls of LankaBangla undertaken by the Audit Committee of the Company are set
Finance Limited (LBFL). However, such a system is designed to out in the Audit Committee Report on pages 95 to 97.
manage the LBFL’s key areas of risk within an acceptable risk  The Risk Management Forum (RMF) is established to assist
profile, rather than eliminate the risk of failure to achieve the the Board to oversee the overall management of principal
business objectives and policies of the Company. Accordingly, areas of risk of the Company. The Risk Management Forum
which includes representation from all key business and
the system of internal controls can only provide a reasonable
operating units of the Company, assists the Board with the
but not absolute assurance against material misstatement of
implementation of policies advocated at the Board Audit
management and financial information and records or against Committee.
financial losses or fraud.  Board Executive Committees have also been established with
The Board has established an on-going process for identifying, appropriate empowerment to ensure effective management
evaluating and managing the significant risks faced by the and supervision of the LBFL’s core areas of business operations
Company and this process includes enhancing the system of and investments.
internal controls as and when there are changes to business In assessing the internal control system over financial reporting,
environment or regulatory guidelines. The process is regularly identified officers of the Company collated all procedures
reviewed by the Board in accordance with the guidance for and controls that are connected with significant accounts and
Directors of FIs on the DFIM Circulars on Internal Control issued disclosures of the financial statements of the Company. These in
by Bangladesh Bank. As per the said guidance, significant turn were observed and checked by the internal audit department
processes affecting significant accounts of the Company were for suitability of design and effectiveness on an ongoing basis.
assessed along with the key risk areas of the Company.
The Company adopted the Bangladesh Accounting Standards
The management assists the Board in the implementation Comprising BAS & BFRS. Since adoption of such Bangladesh
of the Board’s policies and procedures on risk and control by Accounting Standards, progressive improvements on processes
identifying and assessing the risks faced by the Company, and to comply with new requirements of recognition, measurement,
in the design, operation and monitoring of suitable internal classification and disclosure are being made whilst, further
controls to mitigate and control these risks. The Board is of strengthening of processes will take place pertaining to impairment
the view that the system of internal controls in place is sound of loans and advances and financial statement disclosures. They
and adequate to provide a reasonable assurance regarding the also recognized the need to introduce an automated financial
reliability of financial reporting, and that the preparation of reporting process to more effectively comply with the requirements
financial statements for external purposes is in accordance with of recognition, measurement, classification and disclosures of
relevant accounting principles and regulatory requirements. financial instruments. The assessment did not include subsidiaries
of the Company. The recommendations made by the external
Significant Internal Control Processes auditors in connection with the internal control system in previous
The key processes that have been established in reviewing the years were reviewed during the year and appropriate steps have
adequacy and integrity of the system of internal controls include been taken to implement those.
the following: Confirmation
 The Board Sub Committees are established to assist the Board Based on the above processes, the Board confirms that the
in ensuring: financial reporting system of the Company has been designed to
- the effectiveness of the LBFL’s daily operations. provide a reasonable assurance regarding the reliability of financial
- that LBFL’s operations are in accordance with the reporting and the preparation of financial statements for external
corporate objectives and strategies. purposes has been done in accordance with Bangladesh Accounting
- that the operations of the Company are in line with Standards and regulatory requirements of the Bangladesh Bank
the annual budget as well as the policies and business and the Bangladesh Securities and Exchange Commission.
directions that have been approved by the Board.
 The Internal Audit Division of the Company checks for
compliance with policies and procedures and the effectiveness
of the internal control systems and highlights significant
findings in respect of any non-compliance. Audits are carried
out on majority of units and branches, the frequency of which
is determined by the level of risk assessed by the internal audit,
Mohammad A Moyeen
to provide an independent and objective report on operational Chairman Dhaka, 13 February 2018
and management activities of these units and branches. The
annual audit plan is reviewed and approved by the Audit
Committee and the findings of the audits are submitted to the
Audit Committee for review at their periodic meetings.
www.lankabangla.com
Corporate Governance Management Credit Committee Report
100
LankaBangla
MANAGEMENT
CREDIT COMMITTEE REPORT
Composition of the Management Credit Committee (MCC)
The following members who serve on the Committee are:
Position in the
Sl. Name Designation Committee
1 Khwaja Shahriar Managing Director Member
3 Khurshed Alam Head of Personal Financial Service Member
4 Kazi Masum Rashed Chief Credit Officer Member Secretary
5 Mohammad Shoaib Head of Corporate Financial Service Member
 Review credit policy changes including Delegation of

Credit Approval Authority initiated by the management of
the FI and recommend them to the Board of Directors for
its approval.
 Ensure compliance by the FI’s credit policies with the
statutory requirements prescribed by the regulatory/
supervisory authorities.
 Request rapid portfolio reviews or sector/industry
reviews, where deemed appropriate.
MCC 2. Maintain adequate controls over credit risk
Economic ROLES &
awareness  Monitor capital allocation and define limits in line with
RESPONSIBILITIES
risk appetite.
 Ensure credit risk exposure is kept within acceptable
limits to maximise the FI’s risk adjusted rate of return.
3. Maintain appropriate credit administration, measuring
Adequate and monitoring process
control over  Review credit approval framework and assign credit
Credit Risk
delegated limits in line with the Bank’s policy.
 Review and recommend to the Board, facilities that they
believe should have Board approval.
4. Identification and Administration of problem credits
 Monitor on an ongoing basis the Bank’s credit quality,
Duties and responsibilities:
review periodic credit portfolio reports and assess
The purpose of the Committee is to oversee the credit and portfolio performance.
lending decisions & strategies. This includes:
 Ensure post-credit monitoring and postmortem reviews
(i) Overseeing the credit management, including reviewing are performed, where deemed appropriate.
internal Credit Policies/PPGs, Delegation of Credit Approval
authority and establishing portfolio limits. 5. Aware of the cyclical aspects of the economy (both
(ii) Recommending credit related proposals to the Board internal and external)
Executive Committee/Board for approval.  Monitor the resulting shifts in the composition and quality
(iii) Reviewing the quality and performance of the credit of the loan portfolio.
portfolio. 6. Ensure all new credit risk related products are reviewed
In addition, the Committee is responsible for any other matters from a credit risk management perspective.
delegated to it by the Board. Hence, it is the responsibility of the
Committee to: Review of the committee
Members of the Committee work closely with the Board of
1. Operate a sound credit granting process
Directors to maintain proper credit standards for the Bank. The
 Review and approve credit proposals in accordance with Board undertakes a review of the Committee’s performance,
Board approved credit policies and standards. Where objectives and responsibilities according to its terms of
required, submit credit requests beyond the Committee’s reference to ensure that it is operating effectively.
scope to the Board for a decision.
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Corporate Governance Human Resources & Remuneration Committee Report
101
HUMAN RESOURCES & Annual Integrated
Report 2017
REMUNERATION COMMITTEE REPORT

1. Overview
LankaBangla has always been very passionate about human remuneration packages, annual increments and bonuses of all
capital management and takes responsibility for developing the employees having evaluated their performance against the
employee potentials and leveraging employee skills in the set goals and targets.
organization. LankaBangla guards with care the great resource of The organizational structure is also reviewed periodically and
intelligent, experienced, disciplined, clear-thinking and energetic adjustments are made according to the focus of the Strategic
people who continuously drive growth and innovation, within Plan. An ongoing priority is to ensure proper succession for
clear risk boundaries. LankaBangla continues to implement HR key posts. In doing so, the aspirations for career progression
policies and practices that are aimed at growing and developing of Management are taken into account. Recruitments and
employees and ensuring their active contribution towards the promotions of staff at management level are also considered
achievement of corporate goals. LankaBangla believes that the and approved based on proposals submitted by the Head of
skills and enthusiasm of its employees are major forces that Human Resource following a formal process of evaluation and
help it to achieve sustainable results. thereafter recommended to the Board for ratification.
2. Composition of the Committee 5. Meetings
The Human Resources & Remuneration Committee (the
The Committee met eight (08) times during 2017. Other Board
Committee), appointed by and responsible to the Board of
Members may attend meetings on invitation.
Directors comprises the HR & Remuneration Committee of
LankaBangla Finance Limited:
6. Major Task Done By the HR and Remuneration
Sl. Name Designation
Committee
Organization wide the role of HR and Recruitment Committee
1 Khwaja Shahriar Managing Director is clearly visible. The committee is more focused on employee
engagement activities that make the basic essence of
2 A. K. M. Kamruzzaman Head of Operations LankaBangla which is “Growing Together”. The major task done
by the committee can be divided in below segments:
Head of Personal Financial  Employee Development: We consider our human resources
3 Khurshed Alam
Services as our asset. For the development of our asset, we provide
4 Quamrul Islam Head of Treasury various in-house, external & foreign trainings. In 2017, we
have provided 129 numbers of training.
5 Kazi Masum Rashed Chief Credit Officer  Employee Recognition: We are a performance driven
organization. Promoting the best performer is our motto.
6 Shamim Al Mamun Chief Financial Officer To encourage our employees to excel in their area of work,
we have developed several recognition programs such as
7 Md. Shariful Islam Mridha Head of Human Resources “Heros@Work” for our FTEs & HRCs, “Dine with MD” for
PMOs and “Icon BM” for best Branch Manager. On top of
The Head of Human Resources functions as the Secretary to the that, we also organize town-hall meeting twice in a year
Committee. for our staffs and the best performers are also rewarded by
our honourable Chairman and Managing Director. Crest, gift
3. Policy hampers, cash incentive and certificates are awarded in this
LankaBangla’s remuneration policy aims to attract, motivate program. All these efforts are taken only to boost the morale
and retain employees in a competitive environment with the of our employees and to motivate them to perform at their
appropriate professional, managerial and operational expertise best.
necessary to achieve the objectives. It is the focus of the  Employee Engagement: LankaBangla is like home out of home
Committee to ensure that the total remuneration package is as we spend most of our time here. So we celebrate different
sufficiently competitive to attract the best available talent to occasions together like Women’s Day, Pohela Boishak, Kids’
LankaBangla. Art Competition to enhance the bonding with our colleagues
and with LankaBangla.
4. Scope  Health & Refreshment: To get rid of our monotonous daily
The Committee is vested with power to examine, evaluate and life, we arrange different sports among our subsidiaries such
recommend to the Board of Directors on any matter that may as table tennis, football, badminton. We also participate in
affect the human resources management of LankaBangla within corporate football program and have been awarded as the
its Terms of Reference (TOR) and any other matters as may be “Emerging Team of the Tournament”. Beside this, we organized
referred to it by the Board. It reviews all significant Human in-house health check-up program for our employees.
Resource policies and initiatives, salary structures and terms
and conditions relating to staff at senior management level. In  Insurance Coverage: LankaBangla also provide health &
this process, necessary information and recommendations are life insurance to its employees. Health insurance covers
obtained from the Head of Human Resource. The Committee employee, spouse and their kids. The premium is born by the
deliberates upon and recommends to the Board of directors the company. HR Division manages all administrative activities
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Corporate Governance Human Resources & Remuneration Committee Report
102
LankaBangla
for any insurance claim. Even HR arranges direct payment managers and staff to help them develop both professionally
facility for its employees. We have also introduced parent’s and personally and to position the organization for future
insurance coverage facility for our employees. This is one of success. Talent and development activities are aligned to three
a mile stone achievement in the industry. The premium of priorities: building leadership capabilities and developing future
parents’ insurance is borne by the employee itself but parents leaders; fostering an environment that supports sustainable
can avail similar facility as the employee is getting from the performance; and promoting continual professional and
insurance company. personal development for all employees.
 Participation in Career Fairs: HR team has participated
in 3 career fairs such at Shahjalal University of Science & 9. Aligning the Reward System to Evolving
Technology (SUST), Southeast University (SEU) and American Requirements
International University of Bangladesh (AIUB). We have Compensation plays an integral role in the successful delivery
recruited a significant number of employees from career fair. of LankaBangla’s strategic objectives. Attracting and retaining
 Development in ERP: As a part of automation and reducing the most capable employees is central to the LankaBangla’s
man hour, the committee has given a significant effort in compensation strategy. The corner stone of this concept is pay for
the development of ERP. A major achievement was creating performance, within a sound risk management and governance
online recruitment portal. Through this we have done our framework, and with due consideration of market factors and
MTO recruitment without any manual intervention within societal values. As the organization seeks to align compensation
shortest possible time. evolving external and internal expectations, reward structures
are regularly reviewed and changed as needed.
7. Developing and Managing Talent at Lankabangla LankaBangla historically established a close link between
Against the backdrop of strategic repositioning and the challenges employees’ compensation and their performance and behaviour
ahead, LankaBangla has adopted a balanced approach to talent at all levels and across all divisions of the organization. This takes
acquisition. It relies both on leveraging the skills and experience into consideration a host of factors including, but not limited to,
already available within the organization, while bringing in the the Company’s performance, divisional performance and the
necessary capabilities that will help position LankaBangla for employee’s individual performance.
long-term sustainable performance.
10. Succession Planning
7.1 Internal Recruitment: As companies move through various stages in their life cycle
In 2017, LankaBangla continued to strengthen its internal and build growth strategies to deal with changing business
career mobility activities to drive greater career development environments, the issue of leadership becomes critical and with
and retention of employees. Total 33 employees have been it, the related issue of succession. In view of that, LankaBangla
internally recruited during the year. implements succession planning for its management. This
requires forecasting and planning appropriately to ensure
7.2 Building New Talent that there is continuity and the right kind of leadership in the
Another key aspect of LankaBangla’s hiring strategy is to ensure business.
a steady pipeline of junior talent, including permanent hires and
investment in this area will continue. The year 2017 saw more 11. Grievance Management and Counseling
than 298 graduates hired, 19% of whom are female. There has LankaBangla Finance Limited (LBFL) is committed to provide
also been a particular strategic focus on integrating Management the best possible working conditions for its employees and
Trainee Program to build a broader and more flexible talent pool associated members. LBFL strives to ensure fair and honest
for the future. Additionally, LankaBangla continued to expand its treatment for all employees. Head of the Divisions, Managers,
presence and engagement on social media platforms to ensure Supervisors and Employees are expected to treat each other
it is accessing the relevant target groups through the channels with mutual respect.
they use to explore career and employment opportunities.
Part of this commitment, LBFL does encourage an open and
LankaBangla is also strengthened its governance, ensuring that
frank atmosphere in which any grievance may be shared
consistent, structured, merit-based hiring practices for all target
with management to get it resolved. LBFL does believe that
groups are in place.
most of the work related problems can be resolved through
mutual understanding and discussion without initiating formal
8. Developing Employees and Creating Future Leaders grievance procedure.
LankaBangla’s business performance relies, first and foremost,
on its employees. LankaBangla seeks to build the capabilities of
www.lankabangla.com
Corporate Governance Responsibility Statement of MD and CFO
103
RESPONSIBILITY STATEMENT OF Annual Integrated
Report 2017
MD AND CFO
The financial statements of Lankabangla Finance Limited Their report is given on page 213 of this Annual Report. The
(LBFL) and the consolidated financial statements of LBFL and Board Audit Committee of LBFL meets periodically with the
its subsidiaries as at 31st December 2017 are prepared and Internal Auditors and the independent External Auditors to
presented in compliance with the requirements of the following: review the manner in which these auditors are performing
 International Financial Reporting Standards (IFRS) adopted their responsibilities and to discuss issues relating to auditing,
by the Institute of Chartered Accountants of Bangladesh internal to ensure complete independence, the External
(ICAB); Auditors and the Internal Auditors have full and free access
 Companies Act 1994; to the members of the Board Audit Committee to discuss any
 Income Tax Ordinance 1984; matter of substance. The Board Audit Committee report is given
 Financial Institution Act 1993 (as amended); on page 95 The Board Audit Committee approves the audit
 Bangladesh Securities and Exchange Rules 1987; and non-audit services provided by Messrs ACNABIN, in order
 Listing Rules of the Dhaka Stock Exchange; to ensure that the provision of such services does not impair
 Bangladesh bank guidelines. Messrs ACNABIN’s independence.
The formats used in the preparation of the financial statements We confirm that,
and disclosures made comply with the formats prescribed by  LBFL and its subsidiaries have complied with all applicable
the Bangladesh Bank, the Central Bank of Bangladesh. laws, regulations and prudential requirements;
The Accounting Policies used in the preparation of the financial  There are no material non compliances;
statements are appropriate and are consistently applied by the  There are no material litigations that are pending against
Group. There are no departures from the prescribed Accounting the Group.
Standards in their adoption except for as mentioned in note  Required and adequate provision has been made for
number 2.5 of the Audited Financial Statements (Pages 230 to the overdue loans and advances, marketable and non-
231). Comparative information has been reclassified wherever marketable shares as per the Bangladesh Bank regulation
necessary to comply with the current presentation. and IFRS.
The significant accounting policies and estimates that involved
a high degree of judgment and complexity were discussed with
the Audit Committee and external auditors.
The estimates and judgments relating to the financial
statements were made on a prudent and reasonable basis; in
order that the financial statements reflect in a true and fair Khwaja Shahriar Shamim Al Mamun, FCA
manner, the form and substance of transactions and that LBFL’s Managing Director & CEO Chief Financial Officer
state of affairs is reasonably presented. To ensure this, LBFL has
taken proper and sufficient care in installing a system of internal
control and accounting records, for safeguarding assets and for
preventing and detecting frauds as well as other irregularities,
which is reviewed, evaluated and updated on an ongoing basis.
It is confirmed that LBFL has adequate resources to continue
its operations in the foreseeable future. Therefore, LBFL will
continue to adopt the ‘going concern’ basis in preparing these
financial statements.
Our internal auditor has conducted periodic audits to provide
reasonable assurance that the established policies and
procedures of LBFL were consistently followed. However, there
are inherent limitations that should be recognized in weighing
the assurances provided by any system of internal controls and
accounting.
Directors' Report on page 57 report on Internal Control
over Financial Reporting. In addition, report on Directors’
Responsibility on Financial Reporting and Internal Control is
provided on pages 98 & 99. LBFL’s External Auditors, Messrs
ACNABIN, Chartered Accountants have audited the effectiveness
of the LBFL’s Internal Controls Over Financial Reporting.
The Financial Statements of LBFL were audited by ACNABIN,
Chartered Accountants, the independent External Auditors.
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Corporate Governance Statement on Ethics and Compliance
104
LankaBangla
STATEMENT ON
ETHICS AND COMPLIANCE
Acknowledgement
The Board of Directors (the ‘Board’) is committed to the LBFL’s and active participation by everyone in Lankabangla since the
values of dependability, openness to different ideas and cultures, Code spells out the expected standards of behavior and sets the
and connection with customers, communities, regulators and operating principles to be followed. Every official should ensure
each other. The Board ensures that each employee is aware that the company at all times maintains high ethical standards
of the obligation to ensure that his or her conduct consistently and adequate internal control measures are in place guarding
matches LBFL’s values so as to serve positively the customers against unethical practices and irregularities.
who entrust their financial needs to LBFL. The Board is proud
of the fact that LBFL and its subsidiaries (the ‘group’) has a Code of Ethics & Principles of Conduct
solid corporate governance framework and code of conduct for
True spirit of ethical practices is at the core of what LankaBangla
employees and directors that is built around the principles of
secures in the course of business. We fondly believe that
control and accountability. This culture stems from a philosophy
our achievement can only be sustained by creating effective
that puts the protection of investors and the interest of
corporate governance, professionalism among its staff and
customers at the forefront.
strictly adhering to rules and regulations designed in high
The Chairman exercises independent judgement even though ethical standard. Principles of conduct at LankaBangla govern
he is appointed by the majority shareholder. He leads the Board, each employee to act ethically in daily activities. Our employee
sets the agenda and ensures that the Directors receive precise, Code of Ethics & Principles of Conduct applies to everyone who
timely and objective information and at the same time ensures works at LankaBangla, including employees (both permanent
effective communication with shareholders. The Chief Executive and contractual), contractors and consultants. The Code is
Officer/MD develops, drives and delivers performance within supported by a number of more detailed policies that form part
strategic goals, commercial objectives and business plans agreed of the Conduct and Ethics Policy Framework. These cover issues
by the Board. He effectively leads the senior management in such as anti-bribery, fraud and corruption, equal opportunity,
the day-to-day running of the Company, ensures compliance bullying and harassment, conflicts of interest and work
with appropriate policies and procedures and maintains an expenses. Our ethical acts eventually turns to the commitments
effective framework of internal controls over risk in relation we make to our stakeholders.
to the business. He is also responsible for the recruitment and
Our codes do not permit engaging in transactions or activities
appointment of senior management, after consultation with
that are a conflict of interest. When entering purchase
the Board. The Board develops the bank’s strategy, policies and
requisitions, employees must certify that they don’t have a
business plans. The Board of Directors monitors effectively the
conflict of interest. To better protect the company and our
implementation of strategy and policy by management within
shareholders, we regularly review our codes and related policies
the parameters of all relevant laws, regulations and codes of
to ensure that they provide clear guidance to our directors,
best practice. The Board ensures that a balance is maintained
executives and employees.
between enterprise and control. The Board ensures that the
bank has appropriate policies and procedures in place that We have established a corporate hotline and dedicated email
guarantee that the bank and its employees adhere to the highest to allow any employee or other stakeholders to confidentially
standards of corporate conduct and comply with the applicable and anonymously lodge a complaint about any accounting,
laws, regulations, business and ethical standards internal control, auditing or other matter of concern. Employees
are encouraged to report suspected conflicts of interest to
Approach their manager or human resources representative or through
the hotline. We have a strict “no retaliation” policy regarding
We believe that the integrity with which we conduct ourselves
reports of activities that run counter to our ethical expectations.
and our business is key to our ability to running a successful,
If an employee is found to have violated either the Code of
innovative business and maintaining our reputation. We expect
Conduct or any policy, rules and regulations applicable to the
our directors, executives and employees to conduct themselves
Company, we take appropriate actions up to and including
with the highest degree of integrity, ethics and honesty.
termination of employment.
LankaBangla pays close attention to the moral concerns in order
to make the right ethical decisions on a day-to-day basis over Effectiveness of Code, Efforts of the Company
and above observing the law, one of the basic professional
 To apply core values and principles embodies consistently
requirements for the NBFIs. We at LankaBangla believe that the  For management to display the fullest support to the Code
upholding of an ethical culture in financial sector is of critical and serve as role models for compliance
interest to the customers, employees, regulators alike and to  To ensure that all personnel strictly comply the code
the NBFI itself as a secured, reliable and efficient financial sector  To fair rewarding and punishment be effective under a
system in one of the pillars of economic stability of any country. transparent system
Hence, nurturing an ethical culture is of utmost importance  To communicate the contents to all employees and even
for financial institutions, like any other organization. Our core make the Code available to those outside the Company
ethical values include honesty, integrity, fairness, responsible  To review and revise regularly
citizenship, and accountability.
Enforcing a corporate code of ethics requires understanding
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Corporate Governance Statement on Ethics and Compliance
105
Annual Integrated
Report 2017
Additionally,
 Establishing the relevant facts and indentifying the ethical issue the Code's principles, have complied with them over the
 Taking stock of all stakeholders or parties involved previous 12 months and agree to comply with them in the
 Having an objective assessment of each stakeholder’s future. Compliance is a Key Result Area examined as part of
position our Performance Management Process and failure to complete
 Indentifying viable alternatives and their efforts on required compliance training can be a factor in determining the
stakeholders employee’s entitlement to performance-based remuneration
 Comparing and evaluating the likely consequences of each and could lead to termination of employment in serious cases.
alternatives with reference to the standards expected
 Selecting the most appropriate course of action In a Additionally, employees are required to undertake issue-specific
nutshell, our business ethics means, “Choosing the good training for topics such as money laundering, counter terrorist
over the bad, the right over the wrong, the fair over the activity, fraud, corruption and privacy.
unfair and the truth over the untruth”. Strict compliance, Our ‘HR Manual’ covers our Code of Conduct and Ethics,
confidentiality, avoidance of conflicts of interest,
encouraging the reporting by the Officers of the Company standards and behaviours, and important policies and
on illegal and unethical behavior is also amongst the guiding procedures such as our Anti-Bribery Policy and Fraud and
principles of the Company’s Code of Ethics. Corruption Policy. All Management Cadres must complete an
annual attestation that they have read and understood these
Monitoring Compliance ground rules and failure to complete this may result in a ‘flag’
being raised in an individual’s performance review.
Compliance with our Code of Conduct and Ethics is embedded
in our employment contracts, recruitment and performance
management activities. We have set explicit targets for Reporting Compliance
compliance, commencing at executive management level. All We have reported breaches of our Code of Conduct and Ethics
employees are required to comply with our Code of Conduct framework yearly. Breaches of operational, regulatory and
and Ethics and report conduct that may be in breach of the law, compliance requirements are tracked and case management,
the Code or policy. Advice on LankaBangla policies, practices with corrective action closely monitored until ‘closed’. All
and management systems is available via our Human Resources breaches of the Code are reported annually to our Management
department. Any employee, contractor or consultant can Committee and form part of regular risk reporting to the
confidentially report concerns about conduct, practices or Management Credit Committee.
issues to our HR department. Compliance with our Code of Conduct and Ethics is monitored
To help our employees in applying the principles of our Code by Internal Audit, who ensures processes are in place to
of Conduct and Ethics and the Conduct and Ethics Policy appropriately investigate alleged breaches of the Code. We also
Framework, we have developed a training course regularly for conduct annual testing of the controls that support our Code of
the newly appointed employees, Case studies are provided Conduct and Ethics, which forms part of our financial reporting
to assist staff in translating the Code and related policies into governance program and the results are made available to
real-life situations. All employees are required to complete External Auditors in connection with their external audit of the
this training course each year. Declarations within the course Group's consolidated financial statements.
require each employee to confirm whether they understand
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Corporate Governance Corporate Governance Disclosure Checklist
106
LankaBangla
CORPORATE GOVERNANCE
DISCLOSURE CHECKLIST
Pg. & Seg.
Particulars
Ref.
1. BOARD OF DIRECTORS, CHAIRMAN AND CEO
1.1 Company's policy on appointment of directors disclosed. 71(6.2)
1.2 Adequate representation of non executive directors i.e. one third of the board, subject to a minimum
71(6.3)
of two
1.3 At least one independent director on the board and disclosure / affirmation of the board on such
71(6.3)
director’s independence.
1.4 Chairman to be independent of CEO 72(6.7)
1.5 Responsibilities of the Chairman of the Board appropriately defined and disclosed. Disclosure of 72(6.7.1),
independence of Non Executive Directors 71(6.3)
1.6 Existence of a scheme for annual appraisal of the boards performance and disclosure of the same. 73(6.8)
1.7 Disclosure of policy on annual evaluation of the CEO by the Board. 73(6.9)
1.8 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 73(6.10)
annual appraisal of the boards performance
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 73(6.11)
reporting.
1.10 Disclosure of number of meetings of the board and participation of each director (at least 4 meetings
75(8.1.1)
are required to be held)
1.11 Directors issue a report on compliance with best practices on Corporate Governance that is reviewed
84-94
by the external auditors
2. VISION / MISSION AND STRATEGY
01,
2.1 Company’s vision / mission statements are approved by the board and disclosed in the annual report.
75(7.1)
2.2 Identification of business objectives and areas of business focus disclosed 75(7.2)
2.3 General description of strategies to achieve the company's business objectives 183-185
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107
Annual Integrated
Report 2017
Pg. & Seg.

Particulars
Ref.
3. AUDIT COMMITTEES
3.1 Appointment and Composition
3.1.1 Whether the Audit Committee Chairman is an independent Non – Executive Director and Professionally
76 (8.2.1)
Qualified
3.1.2 Whether it has specific terms of reference and whether it is empowered to investigate / question
76 (8.2.4)
employees and retain external counsel
3.1.3 More than two thirds of the members are to be Non Executive Directors 76 (8.2)
3.1.4 All members of the audit committee to be suitably qualified and at least one member to have
77 (8.2.3)
expert knowledge of finance and accounting.
3.1.5 Head of internal audit to have direct access to audit committee 76 (8.2.1)
3.1.6 The committee to meet at least four times a year and the number of meetings and attendance
76 (8.2.2)
by individual members disclosed in the annual report.
3.2 Objectives & Activities
3.2.2 Statement on Audit Committee’s review to ensure that internal controls are well conceived properly
95
administered and satisfactorily monitored
3.2.3 Statement to indicate audit committees role in ensuring compliance with Laws, Regulations and
104
timely settlements of Statutory dues
3.2.4 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
76(8.2.4.1)
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 / re-appointment
3.2.5 Statement on Audit Committee involvement in selection of appropriate accounting policies that are
in line will applicable accounting standards and annual review.
3.2.6 Statement of Audit Committee involvement in the review and recommend to the board of directors,
76(8.2.4.4)
annual and interim financial releases
3.2.7 Reliability of the management information used for such computation
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Pg. & Seg.

Particulars
Ref.
4. INTERNAL CONTROL & RISK MANAGEMENT
4.1 Statement of Director's responsibility to establish appropriate system of internal control

4.2 Narrative description of key features of the internal control system and the manner in which the
99
system is monitored by the Board, Audit Committee or Senior Management.
4.3 Statement that the Director's have reviewed the adequacy of the system of internal controls
4.4 Disclosure of the identification of risks the company is exposed to both internally & externally
113-117
4.5 Disclosure of the strategies adopted to manage and mitigate the risks
5. Ethics and Compliance

5.1 Disclosure of statement of ethics and values, covering basic principles such as integrity, conflict of
interest, compliance with laws and regulations etc.
5.2 Dissemination / communication of the statement of ethics & business practices to all directors
and employees and their acknowledgement of the same
104-105
5.3 Board’s statement on its commitment to establishing high level of ethics and compliance within the
organization
5.4 Establishing effective anti-fraud programs and controls, including effective protection of whistle
blowers, establishing a hot line reporting of irregularities etc.
6. REMUNERATION COMMITTEE
6.1 Disclosure of the charter (role and responsibilities) of the committee 101(4)
6.2 Disclosure of the composition of the committee 101(2)

6.3 Disclosure of key policies with regard to remuneration of directors, senior management and
101(3)
employees
101(5,6),
6.4 Disclosure of number of meetings and work performed
102
94, 272,
6.5 Disclosure of Remuneration of directors, chairman, chief executive and senior executives.
285
7. HUMAN CAPITAL
7.1 Disclosure of general description of the policies and practices codified and adopted by the company with
respect to Human Resource Development and Management, including succession planning,
186-192
merit based recruitment, performance appraisal system, promotion and reward and motivation,
training and development, grievance management and counciling.
7.2 Organizational Chart 54
8. Communication to Shareholders & Stakeholders

8.1 Disclosure of the Company's policy / strategy to facilitate effective communication with 169-170,
shareholders and other stake holders 371
8.2 Ensuring participation of shareholders in the Annual General Meeting and providing reasonable
5
opportunity for the shareholder participation in the AGM.
9. Environmental and Social Obligatoins
9.1 Disclosure of general description of the company's policies and practices relating to social
194-206
and environmental responsibility of the entity
9.2 Disclosure of specific activities undertaken by the entity in pursuance of these policies and practices 203-206
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RISK Annual Integrated
Report 2017
MANAGEMENT
LankaBangla's overall approach to risk
management is supported by a well- Statement on Risk Management 110
defined risk appetite, comprehensive Capital Adequacy and Market Discipline 118
policy framework, effective governance Statement on NPL Management 123
structures and appropriate tools and Report on Going Concern 126
techniques to identify, measure and
manage risk.
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Risk Management Statement on Risk Management
110
LankaBangla
STATEMENT ON
RISK MANAGEMENT
1. Introduction:  Qualitative and quantitative evaluations – Risks are
Strong risk management capabilities as vital to the success of evaluated both qualitatively and with appropriate
a well-managed financial institution. The Risk Management quantitative analyses and robust stress testing. Risk models
function is the central resource for driving such capabilities in are regularly reviewed to ensure they are appropriate and
LankaBangla, and complements the risk and control activities of effective.
other functions including Internal Audit and Legal & Compliance. The Board of Directors and senior management provide
The key components of LBFL’s risk management approach are: the direction to the Company’s effective risk management
strong risk governance; robust and comprehensive processes that emphasizes well-considered risk-taking and proactive
to identify, measure, monitor, control and report risks; sound risk management. This is reinforced with appropriate risk
assessments of capital adequacy relative to risks; and a rigorous management staff, ongoing investments in risk systems,
system of internal control reviews involving internal and external regular review and enhancement of risk management policies
auditors. and procedures for consistent application, overlaid with a
strong internal control environment throughout the Group.
2. Risk Management in LankaBangla Accountability for managing risks is jointly owned among
customer-facing and product business units, dedicated
We believe that sound risk management is essential to ensuring functional risk management units, as well as other support units
success in our risk-taking activities. Our philosophy is to ensure such as Operations and Technology. Internal Audit also provides
risks and returns remain consistent with our established independent assurance that the Company’s risk management
risk appetite. To achieve this, we regularly refine our risk system, control and governance processes are adequate and
management approaches to ensure we thoroughly understand effective. Rigorous portfolio management tools such as stress
the risks we are taking to identify any emerging portfolio threats testing and scenario analyses identify possible events or
at an early stage, and to develop timely and appropriate risk- market conditions that could adversely affect the Company.
response strategies. The key elements of enterprise-wide risk These results are taken into account in the Company’s capital
management strategy are: adequacy assessment.
 Risk appetite – The Board of Directors approves the
Company’s risk appetite, and risks are managed in 3. Risk Governance and Organisation
alignment with the risk appetite. Risk-taking decisions must The Board of Directors establishes the Company’s risk appetite
be consistent with strategic business goals and returns and risk principles. The Board Audit Committee is the principal
should compensate for the risk taken. Board committee that oversees the Company’s risk management.
 Risk frameworks – The Company’s risk management It reviews and approves the Company’s overall risk management
frameworks for all risk types are documented, philosophy; risk management frameworks, major risk policies,
comprehensive, and consistent. and risk models. The Board Audit Committee also oversees the
 Holistic risk management – Risks are managed holistically, establishment and operation of the riskmanagement systems, and
with a view to understand the potential interactions among receives regular reviews as to their effectiveness. The Company’s
risk types.
Discuss business and risk strategies,
capital requirements and budget
CFO Business Units CRO

Coordinates, mentions and reports on • Receive operational risk limits Oversees risk management
firm-wide and business lines earnings, • Establish processes to manage risks, e.g. Risk Management Function
capital requirements, and budget monitoring and de-escalation of breaches • Develops risk metrics to reflect RAS
of risk limits • Monitors and reports on risk metrics
• Adhere to and report on risk metrics • De- escalares breaches of risk metrics
• Conducts stress tests
Internal Audit CEO

Assesses and opines on the adequacy of Develops and recommends overall
internal controls, risk appetite and risk business strategy, risk strategy, risk
governance appetite framework and RAS
Board
Approves and oversees the firm’s risk appetite
framework, including the risk appetite
Audit Committee statement (RAS), risk limits by business units Risk Committee
Overseas the review of the independent consistent with the RAS and policies and Reviews and recommends the risk strategy,
assessment of the risk governance processes to implement the risk management oversees implementation of the risk
framework framework management framework
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various risk exposures, risk profiles, risk concentrations, and  Ensure roles and responsibilities are agreed and clearly
trends are regularly reported to the Board of Directors and senior understood by all management levels.
management for discussion and appropriate action.  Ensure all staff, in business and support functions, is aware of
their responsibilities for company’s overall Risk management.
The Board Audit Committee is supported by Risk Management  Ensure there are structured processes at each department
Division, which has functional responsibility on a day-to-day level to report control failures to designated individuals and
basis for providing independent risk control and managing credit, escalate material issues to RMF.
market, operational, liquidity, and other key risks. Within the  Establish workable Business Continuity Plans (including
division, risk officers are dedicated to establishing Company-wide Disaster Recovery and Crisis.
policies, risk measurement and methodology, as well as monitoring  Management procedures) to minimize the impact of unplanned
the Company’s risk profiles and portfolio concentrations. The events on business operations and customer service.
Company’s risk management and reporting systems are designed
to ensure that risks are comprehensively captured in order to 5. Risk Analysis Unit (RAU) at LankaBangla
support well-considered decision making, and that the relevant
Broadly, Risk Analysis Unit (RAU) will be responsible solely to identify
risk information is effectively conveyed to the appropriate senior
and analyze all sorts of risks appropriately and timely. It (RAU) will
management executives for those risks to be addressed and risk act as the secretariat of Risk Management Forum. Incompliance
response strategies to be formulated. To ensure the objectivity of with the Bangladesh Bank guidelines RAU is work independently
the risk management functions, compensation of risk officers is from all other units/divisions of the FI, e. g. no member of this unit
determined independently of other business areas and is reviewed will be involved in any sort of ratings of transactions, or setting/
regularly to ensure compensation remains competitive with market working to achieve any target imposed by the FI. S/He will not also
levels. be involved in the process of determining any standard or threshold
Credit officers are involved in transaction approvals, and personal ranges for risk management goals.
approval authority limits are set based on the relevant experience Risk Analysis unit will be responsible only for the followings:
of the officers and portfolio coverage. Representatives from the
 Promote broader understanding of risk and work closely with
division also provide expertise during the design and approval risk management to ensure risk management initiatives are in
process for new products offered by the Group. This ensures that place for risk controlled LBFL practices.
new or emerging risks from new products are adequately identified,  Work as an active risk associate by identifying departmental
measured, and managed within existing risk systems and processes. risk issues and perform analysis.
 Escalate respective risk issues to risk management unit in a
4. Risk Management Forum at LankaBangla monthly basis for discussion and enforce mitigation in monthly
Risk Management Forum (RMF) and Risk Analysis Unit (RAU) of risk associates forum.
LankaBangla has been established in LankaBangla during 2013  Assist RMF to plan and reduce operational surprises and losses
incompliance with the Bangladesh Bank’s DFIM Circular No. by recommending risk mitigation strategies.
 Finalize enterprise level risk issues to RMF meeting for
01 of 07 April, 2013. Risk Management Forum is headed by the
management evaluation and resolutions.
Managing Director of the Company and Chief Risk Officer is the
 Implement RMF resolutions and monitor the risk mitigation
Secretary, all the business and operational heads are the members process within the given deadline & update status to RMF.
of the RMF. The main responsibility of the Risk Management  Interact with all the relevant stakeholders of LBFL to create risk
Forum is includes the following: awareness and encourage control of risk at enterprise level.
 The Risk Management Forum members will parameterize the  Business and Support functions risk associates will escalate
Internal Environment of the Company including risk appetite, risks to this forum under supervision of Chief Risk Officer
integrity and ethical values and the environment in which is (CRO).
operated.
Other Risk management committees have been established for
 The MANCOM must form the objectives so that they
active senior management oversight, understanding, and dialogue
can identify potential events affecting the achievement
on policies, profiles, and activities pertaining to the relevant risk
unenthusiastically and consistent with its risk appetite.
types. These include the the Management Credit Committee,
 The management will identify the internal and external
the Asset and Liability Management Committee, the Steering
events affecting company’s achievement and distinguish
Committee for BASEL-II Implementation, Central Compliance Unit
between risks and opportunities.
for Anti-Money Laundering and the ICT Committee. Both risk-
 It is the management responsibility to assess and measure taking and risk control units are represented on these committees,
the potential risks. emphasizing shared risk management responsibilities. LBFL Internal
 The management selects risk responses-- avoiding, accepting, Audit conducts regular independent reviews of loan portfolios and
reducing or sharing risk-- developing a set of actions to align business processes to ensure compliance with the Company’s risk
risks with the company’s risk tolerances and risk appetite. management frameworks, policies, processes, and methodologies.
 The management will take policies and procedures and
implement it to help ensure the risk responses are effectively
carried out. 6. BASEL II
 The managerial authority will identify generate and LankaBangla has implemented Bangladesh Bank’s Guidelines (Basel
communicate the relevant information in a form Accord for Financial Institutions) on Risk Based Capital Adequacy
and timeframe that enable people to carry out their Requirements for FIs incorporated in Bangladesh with effect from
responsibilities. 1 January 2011. Bangladesh Bank adopts the Basel Committee on
 The entirety of enterprise risk management will be monitored and Banking Supervision’s proposal on “International Convergence
it will be accomplished through ongoing management activities. ofCapital Measurement and Capital Standards,” commonly referred
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LankaBangla
to as BASEL II. This framework provides a stronger linkage between capital requirements and the level of risks undertaken by banks to
enhance their risk management practices and establishes minimum capital requirements to support credit, market, and operational risks.
As part of enhanced public disclosures on risk profile and capital adequacy required under the mentioned guidelines.
7. Stress Testing
Stress testing is a simulation technique, which are used to determine the reactions of different financial institutions under a set of
exceptional, but plausible assumptions through a series of battery tests. At institutional level, stress testing techniques provide a way to
quantify the impact of changes in a number of risk factors on the assets and liabilities portfolio of the institution. Therefore as a part of
risk management unit we prepare stress testing report at each quarter to check out four major shocks (interest rate risk, credit risk, equity
price risk, liquidity risk) under different magnitude level to ensure optimum allocation of capital across its risk profile.
The Company has adopted the standardized approaches for market risk and operational risk. Market risk-weighted assets are marked to
market and are risk weighted according to the instrument category, maturity period, credit quality grade, and other factors. Operational
risk-weighted assets are derived by applying specified beta factors or percentages to the annual gross income for the prescribed business
lines in accordance with regulatory guidelines. Initiatives are in place to move toward Internal Model Approach for market risk. Capital
adequacy assessments and Plans, incorporating stress test results, are submitted quarterly to Bangladesh Bank. Implementing the Basel
II framework is an integral part of our efforts to refine and strengthen, as well as to ensure our management of risks is appropriate for
the risks we undertake. Company management remains vigilant to ongoing industry and regulatory developments, including risk-adjusted
compensation and new standards established in the Basel II Framework published in December 2010. We are constantly reviewing to
further improve and refine our businesses and risk management capabilities as well as engaging in dialogue with industry peers and
regulators to position ourselves for the far-reaching consequences of these reforms.
8. Risk Management Structure
Risk Management Structure
Managing Director Board Audit Committee
Chief Risk Officer Business/ Functional

Division Heads
Notes:
Each Business line has
designated Risk Associates Basel-II
as part of broader job Implementation & Risk Reporting Operational Risk
Stress Testing & Monitoring Management
Operations Market Risk Credit Risk Technology Risk Financial Risk Internal Control
Risk Management Management Management Management
Business & Functional Reporting Lines
Head of HO Treasury Chief Credit Head of ICT Chief Financial Head of Internal
Operations & FI Officer Officer Control &
Compliance
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9. Credit Risk Management Division through the respective Business Division

along with a credit recommendation.
9.1 Definition
The Credit Risk Management (CRM) Division: All credit
LBFL defines credit risk as the risk of losses arising because
applications are submitted to the CRM Division for approval.
counterparties fail to meet all or part of their payment
The CRM division approves the credit proposal within the
obligations to the Group.
limit set by the Board of Directors. Other application those
9.2 Policy exceeds the limit, CRM division coordinates and prepares credit
recommendations to The Management Credit Committee
The Board of Directors sets the overall policies for the LBFL’s (MCC), the Board Executive Committee and to the Board of
credit risk exposure. The LBFL’s risk appetite framework is Directors.
determined in accordance with these policies. The LBFL’s aim
is to build long-term relationships with its customers. For the The Management Credit Committee (MCC): The MCC reviews
vast majority of products, credit is granted on the basis of all applications beyond the Credit Department’s credit line. The
the customer’s financial circumstances and specific individual MCC conducts credit meetings on a weekly basis. The purpose
assessments. Ongoing follow-up on developments in the of the Credit Committee is to:
customer’s financial situation enables to assess whether the
basis for the credit facility has changed. The credit facilities  Process credit applications exceeding the credit line of the
should match the customer’s credit worthiness, capital position Credit Department;
and assets. Further and in order to increase the mitigation of  Process and provide recommendations for all credit
credit risk, LBFL as a general rule requires collateral. LBFL aims applications to be submitted to the Board of Directors;
to assume risks only within the limits of applicable legislation  Implement the guidelines for the credit area as approved
and other rules, including rules on best practices for financial by the Board of Directors; and
undertakings.
 Supervise the overall credit granting procedure.
9.3 Credit process Board of Directors: The Board of Directors reviews all
In order to ensure a consistent, coordinated credit granting applications that are beyond the MCC’s credit line.
process of a high quality all credit applications are handled
according to a pre-defined procedure that provides a consistent, Credit processing must be conducted on the basis of extensive
high credit processing quality: knowledge of the risks inherent to each individual exposure for
the purpose of striking a balance between risk and earnings
Branches: All branch managers process all credit applications opportunities and in compliance with the overall goals defined
and then the applications are submitted to the Credit Risk. by the Board of Directors and Bangladesh Bank.
9.4 Credit Profile

9.4.1 Sector wise Credit concentration with sectoral NPL Figures in BDT Million
2017 2016
Sector Total Total
NPL Sectoral NPL Sectoral
Outstanding Outstanding
Amount NPL % Amount NPL %
Amount Amount
Garments and Knitwear 2338.24 167.01 7.14% 1894.19 252.38 13.32%
Textile 1161.73 88.66 7.63% 2209.53 12.95 0.59%
Food Production and Processing Industries 4326.35 22.96 0.53% 4722.68 22.96 0.49%
Jute and Jute-Products 347.76 0.00 0.00% 301.83 0.00 0.00%
Leather and Leather-Goods 533.11 0.00 0.00% 63.79 0.00 0.00%
Iron, Steel and Engineering 1933.14 91.63 4.74% 3300.47 91.63 2.78%
Pharmaceuticals and Chemicals 891.62 0.00 0.00% 929.40 0.00 0.00%
Cement and Allied Industry 1113.59 8.30 0.75% 358.56 8.30 2.31%
Telecommunication and IT 842.46 0.81 0.10% 726.11 25.79 3.55%
Paper, Printing and Packaging 540.91 11.30 2.09% 581.37 11.30 1.94%
Ship Manufacturing Industry 0.00 0.00 - 0.00 0.00 -
Glass, Glassware and Ceramic Industries 18.62 18.62 100.00% 537.59 19.62 3.65%
Power, Gas, Water & Sanitary Service 710.18 25.34 3.57% 639.18 8.82 1.38%
Transport and Aviation 1249.06 145.83 11.67% 641.42 150.61 23.48%
Trade and Commerce 10201.34 276.29 2.71% 6031.68 288.60 4.78%
Agriculture 860.01 34.92 4.06% 255.53 34.40 13.46%
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LankaBangla
Figures in BDT Million

2017 2016
Sector Total Total
NPL Sectoral NPL Sectoral
Outstanding Outstanding
Amount NPL % Amount NPL %
Amount Amount
Housing 12284.33 314.53 2.56% 6543.90 303.06 4.63%
Brokerage & Securities 3537.03 - 0.00% 3128.67 - 0.00%
Others Loan 19024.10 693.16 3.64% 13883.31 362.31 2.61%
Total 61913.59 1899.36 3.07% 46749.20 1592.73 3.41%
9.4.2 Ten Large Credit as a % of Total Exposure  Hypothecation: Leased assets are primary security which are
inherently provide some degree of protection against credit
2017 2016 risk. Hypothecated capital machinery and stock of goods is
Ten large credit as a % of an usual primary security measure whereas marketability and
10.24% 15.90% control of the asset is important in credit risk mitigation.
exposure
Ten large credit 6,342 7,433  Guarantee: Guarantee of high net worth individuals/directors
and corporate guarantee with good business standing usually
Total exposure 61,914 46,749 provides credit enhancement. Cross default option plays a vital
role because due to guarantee of an entity favoring a borrowing
9.4.3 Classification Status of Loans and Advances concern is also reflected in CIB report. Bank guarantee is also a
prolific credit enhancement instrument.
2017 2016  Risk transfer: Comprehensive Insurance against assets
Performing Loans 60,014 45,102 covering loan amount is a usual risk mitigation measure in the
event of unforeseen event that may occur in future.
Unclassified 58,717 44,336
 Exposure management: Single borrower exposure limit and
SMA 1297 766 sectoral exposure limit are both used as risk management tools
and in the credit policy both issues are addressed complying
regulatory stipulations.
Non-Performing Loans 1,899 1,339
 Risk-based pricing: Risk based pricing method is being used for
SS 480 271 the customers where there is a probability that the borrower
will default on the loan. A risk premium is added to the base
DF 231 312
price considering the risk profile. Different factors like Credit
BL 1188 756 risk grading score, credit history, property use, property type,
loan amount, loan purpose, income, and asset amounts, as
well as documentation levels, property location, and others,
Total Outstanding 61,914 46,749
are common risk based factors currently used.
Besides diversifying credit risk through extending small
9.5 Credit Risk Mitigation sized loan to numerous borrowers across different customer
From forward looking perspective borrower selection process is segments who are essentially unrelated with each other may be
the most important credit risk identification measure employing considered policy level credit risk diversification strategy.
fundamental analysis of credit including purpose and utilization
of loan, company analysis including cash flow, industry analysis,
9.6 Credit Monitoring and Portfolio Management
credit rating , credit risk grading, entrepreneurial track record, The Board and senior management get timely and appropriate
repayment performance including CIB status among others. information on the condition of the LBFL’s asset portfolio,
Identifying the extent of credit risk eventually determines the including classification of assets and the level of provisions
and reserves. The information includes, at minimum, summary
scope of credit risk mitigation measure.However following results of the portfolio review, comparative trends in the overall
credit risk mitigation measures are typical employed by lenders quality of problem assets, and measurements of existing or
 Collateral coverage: Collateral coverage may be in the form of anticipated deterioration in asset quality and losses expected
land and building, financial instrument such as TDR, Marketable to be incurred on the portfolios. Significant concentration risk is
securities etc. In the event of downside, value from liquidation also reported to the Board and senior management for review
of collateral securities may provide some degree of protection and deliberation. Stress tests is conducted regularly to assess the
against credit risk. Valuation of land and building is usually risk in a particular market segment under adverse conditions.
done third party surveyor. Cash security by default provides Appropriate measures has been taken to mitigate undue
maximum protection against credit risk and exposure is usually concentration risk such as pricing for additional risk, unwinding
calculated net-off cash security. of positions, increasing capital or reserves, securitisation etc.
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10. Market Risk

LBFL defines market risk as the risks taken in relation to price note of the continued decline in rates observed. LBFL by having
fluctuations in the financial markets. Several types of risk may a strict monitoring system maintains its interest rate risk at
arise and LBFL manages and monitors these risks carefully. moderate levels despite volatility in rates in the market.
Market risk arises when the fair value or future cash flows The Treasury Division was able to pursue cheaper sources of
of financial instruments of the Company fluctuate due to funding to bring down overall weighted average cost in the year
changes in market variables, mainly interest rates and equity under review. The division was able to seek optimal funding
prices. The risk of exchange rate movements does not impact with the advice of ALCO, maintaining monthly overall-weighted
LBFL directly because as a NBFI, LBFL cannot deal with foreign average cost of funds at low levels throughout as depicted.
currency. Interest rate risk, being a significant risk factor for the
industry, is managed closely by the Company, to ensure there 10.2 Equity Risk
are no erosion of spreads and no impact to final profitability. It’s the potential loss due to an adverse change in the stock
Equity risk remains the other main market risk, considering price. NBFI can accept equity as collateral for loans and purchase
the Company has an equity portfolio in excess of Taka 1 billion. ownership stakes in other companies as investments from free
This is managed at individual investment level, as well as on a or investible cash. Any negative change in stock price either
portfolio basis, based on whether the portfolio is trading or non- leads to a loss or diminution in investments’ value.
trading or strategic Ivestment. These two main market risks are LBFL needs to be cognisant of equity price risk as Company holds
discussed separately below: Taka 4.2 billion in trading and held-to-maturity share portfolios
as at the balance sheet date. The Company’s accounting policies
10.1 Interest Rate Risk ensure that we reflect share investments at fair value recognising
Interest rate risk arises when changes in interest rates have any realised gains/losses through the profit and loss.
an impact to the future cash flows of financial instruments’
fair values. This remained a potential concern for the finance 11. Operational Risk
industry, as market interest rates continued to fall during the Operational risk could arise from inadequate or failed internal
period. As LBFL deals in a number of interest bearing financial processes, people and systems or risks arising from external
assets that are mainly grouped under loans and advances there events, leading to financial losses. LBFL has instilled various
was close focus on safeguarding core business interest spreads. internal controls to detect possible human errors, fraud, faulty
Downward movements in interest rates were continued both internal processes and systems, non-adherence to procedures
and non-compliance to regulations. A company-wide effective
for lending and borrowing to be influenced by monetary policy
internal control system is in place, requiring all staff to adhere
changes whereas the decrease in lending rates remained at a
to set policies and procedures. To ensure clarity in required
relatively faster pace and resulting decreases in interest income practices, the Company has developed a comprehensive
too then the decrease in the borrowing rates. Apart from the procedure manual, covering all key functions. Failure to manage
resulting pressure exerted on our core margins, interest rate operational risk can often result in other risks emerging such
fluctuations continued to also influence; as reputational losses, which may also cause brand erosion and
 our ability to canvass deposits would raise regulatory penalties.
 the fair values of financial assets and liabilities and Operational risk management techniques adopted directly
 Average duration of mortgage backed lease portfolios and linked to people including segregation of staff duties, job
other interest earning assets.To stay competitive, LBFL had rotation, staff training and development, employee operations,
to revise deposit rates during various times of the year while inbuilt ICT controls, maintaining of documentation and
through the ALCO committee. keeping backup of documents and systems remain other forms
of measures.
ALCO is the main committee that regularly oversees the interest
rate risk of the Company and initiate appropriate action to
minimise overall interest risk exposure within the Company’s 12. Liquidity Risk
risk appetite limits. Treasury division is responsible to manage Liquidity risk arises when a Company encounters difficulty in
funding and the market rates on an ongoing basis and uphold meeting its obligations associated with financial liabilities that
the optimal interest rate structure of all products of LBFL. require to be settled either through cash or any other financial
asset. The sector assets and liability portfolio is such that
In maintaining an optimal level of return for our core business,
there is a general vulnerability to liquidity problems resulting
average yield levels and cost of funding is monitored on a
from assets and liability mismatches. Therefore, purpose of
monthly basis and presented at ALCO meetings to decide on
liquidity risk management is to assess the necessity of funds
pricing matters. The ALCO evaluates any potential adverse effects
to meet financial obligations on time and to ensure adequacy
that may arise from situations when the cost of funding rises at a
of funding to fulfil short-term and long-term financial needs
relatively higher pace than the yield earned on lending and other
appropriately even under stressed conditions. LBFL has in place
investments. ALCO reviews current interest rate environment
a comprehensive in-built liquidity monitoring process that has
and monitors the movement of key interest rate indices and
been enhanced in the past few years by embracing stringent
interest sensitive assets and liabilities maturity gap analysis.
liquidity review and safeguard measures imposed by regulator
ALCO reviewed impact of interest rate change on the bottom
on the sector.
line by carrying out sensitivity analysis/rate shock analysis taking
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To strengthen liquidity management we have formed a Board 13.2 ICT Risk

approved Asset and Liability Management Committee (ALCO) Risks arising due to system breakdown, non-availability of systems,
to overlook the liquidity status of the Company. ALCO being errors and disruptions or not keeping pace with the technological
the overall supervisory in managing liquidity risk of LBFL meets changes. There was continuous monitoring of employees and
monthly to oversee adequacy of overall liquidity aspects from users of ICT systems to ensure strict adherence to information
other obligations. The impact arising from all strategic and security policies, pertaining to safeguard confidentiality of
medium term decisions taken by the Board and the corporate information and to secure accuracy of information. Company’s
management on liquidity is also ascertained by this high level ICT Division conducted a comprehensive staff training program
committee comprising key divisional heads. on information system security awareness to all users.
LBFL is a financially sound institution that has been strong in Future technological needs of the Company were reviewed
liquidity right-throughout. In meeting liquidity requirements, and identified as part of the strategic plan development
the Company resorts to an array of diversified funding sources in process for next three financial years. ICT Division reviewed
addition to its core deposit mobilisation business. Similarly, LBFL policies in relation to, hardware and software procurement
adopts a strict policy of managing its assets keeping liquidity as and maintenance procedures, business contingency plan on
a vital focus and therefore monitors liquidity on a daily basis. ICT, system licensing procedures etc. Updates were done in
accordance with best practices in the industry. Risk review of
13. Other Risks the ICT systems has already been done by the independent
consultant KPMG and contingency plans incorporated as a part of
the BCP for key ICT dependent processes in order to successfully
06 face any unpredictable technological contingencies.
01
13.3 Reputation Risk
It is a threat or danger to the good name or standing of a
business or entity. As an institution of financial services sector, it
is key to maintain sound reputation for long-term organisational
survival and success. Public is highly receptive to negative factors
05 considering past experiences.
OTHER ICT Risk LBFL has implemented required corporate governance practices;
RISKS risk assessment measures, departmental procedure manuals
02
02 and carried out due compliance checking to ensure business
is conducted in a professional, ethical and prudent manner.
Suggestion boxes have been placed in all branches and customer
survey carried out to obtain customer feedback to enhance
customer relationship. Regardless of corporate hierarchy, all the
employees are expected to live by core values of the Company.
04 Deviation to LBFL’s strict policies and procedure guidelines and
03 rules result in strict disciplinary action for employees.
In sustaining company’s vision providing a deep sense of social
responsibility, a number of worthy projects were initiated for the
13.1 Legal Risk benefit of the society and the environment as explained in the
Legal risk can arise due to several reasons such as section on sustainability.
 A defective transaction or;
 A claim (including a defence to a claim or a counterclaim)
13.4 Human Resource Related Risk
being made or some other event occurring which results in a Being a service organisation, there is high dependency on our
liability for the Company or other loss (for example, as a result human capital in driving our business forward, in meeting
of a termination of a contract) or; anticipated service standards. Lot depends on the performance
 Failing to take appropriate measures to protect assets (for of our workforce in the achievement of organisational objectives
example, intellectual property) owned by the Company or; and other aspirations to remain successful. Hence attractingand
 Changes in law. retaining high calibre staff, who possesses the necessary
experience and skills to perform duties is integral if LBFL is to
LBFL deals in financial transactions with higher scrutiny in continue on its path to success. This of course has become
a highly regulated finance industry. We understand that a challenge especially since the job market is flooded with
regulatory changes may result in additional cost of compliance, numerous job opportunities for capable individuals both within
may limit the type of financial services and products that could and outside our sector. This risk is relevant especially because most
be offered in the market and in certain instances increase
of our staff have been with us for at least five years or more, who
chances of competitors capitalising on their own offerings. It is
have gained enormous experience in their related fields. Losing
therefore essential that legal risk be managed appropriately to
avoid undue impact to business financially and to avoid damage services of these experienced personnel hence at any point in
to reputation that could lead to loss of confidence. time can create a vacuum in meeting anticipated standards and
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may disrupt smooth running of operations at least temporarily. number of institutions competing aggressively to secure relative
We are mindful of the fact that finding suitable replacements market share. NBFI sector caters to a wide customer audience
in the short-term would not be easy. A proper employee through a broad product range that has expanded from mere
succession plan in place to mitigate the risk of loss key people. financing and deposit taking to tailor-made product offerings
that meet varying customer needs. It is therefore vital to be
13.5 Strategic Risk receptive to customer needs in a highly competitive market
Strategic risk is defined as the risk associated with existing like ours if the organisation is to thrive and succeed. Number
strategy, future business plans and strategies, including plans on of finance companies were introduced during this financial
entering new business lines, expanding existing services through year. Banking and NBFI sector margins have narrowed while
organic business growth, mergers and acquisitions or exposure the market is set to widen exponentially with enhanced public
loss resulting from a strategy that turned out to be defective perception towards the sector Owing to the plethora of other
or inappropriate. Management reviews performance against investments and borrowing options available to customers in
expected targets periodically, referring to devised strategies and the market, competition remained high for the sector players.
success of their implementation. Our style of management attempts to secure employee morale
and motivation most of the time as means of sustaining optimal
13.6 Competitor Risk productivity levels in all our operations. In meeting future
challenges, we are fortunate to possess a strong capital structure
Financing being a popular method of sufficing funding needs that gives us the opportunity and the needed flexibility to make
of people and institutions has gained momentum, with a large broad strategic decisions.
As one of the leading financial institutions in Bangladesh,

managing risk is integral to our everyday activities. In
2017, the risk function played a vital role in working
with the Group’s businesses to navigate an extremely
complex environment and manage the associated risks.
This was done in a manner that balanced the interests
of clients and other key stakeholders with protecting the
safety and soundness of the Group. Key to LBFL’s long-
term sustainable growth and profitability is to manage
risk on a consistent basis across the Group, and to ensure
our risk appetite is clear and aligned to our strategy.
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Risk Management Capital Adequacy and Market Discipline
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CAPITAL ADEQUACY AND
MARKET DISCIPLINE
Significance of Capital Adequacy
Capital is the foundation of any business. In a Financial Institution, Common capital ratios as per the regulatory requirements are as
capital is a prime factor to consider when assessing the safety follows:
and soundness. It acts as a cushion in case the value of the bank’s
assets decline and liability rises. Maintaining a minimum capital Statutory
Capital Ratios
level is of paramount importance for a Financial Institution so that Limits
adequate protection against risk can be ensured. A strong Capital = Core Capital
Core Capital Ratio >= 5%
Management Policy protects an organization by identifying and Risk-adjusted assets
mitigating risks, as well as establishes a base of confidence by Total Capital (Core and =Total Capital
depositors, creditors, and other stakeholders. Supplementary Capital) (Core+Supplementary) >= 10%
Capital Adequacy gives a view on a Financial Institution’s financial Ratio Risk-adjusted assets
strength and stability. Adequate capital provides assurance to
the stakeholders on the company’s ability to provide consistent Effective risk management is considered as a central part of the
services. financial and operational management of any company, whereby
company sustainability and consistent profit generation are
Capital Adequacy is a basis for measurement of the amount of ensured. Only by adopting and strengthening risk management
capital that the FI needs to hold to ensure that no excess leverage measures can the company deal with the complex and dynamic
is taken that would lead to insolvency. Capital Adequacy is best business environment.
expressed as the Capital Adequacy Ratio (CAR), also known as
Capital to Risk Weighted Assets Ratio. CAR is a measure of a FI’s Group Risks are managed on an integrated basis. Risk management
eligible capital expressed as a percentage of its risk weighted asset. is incorporated in the Group decision making with regards to
The objective of CAR is built around the Market Discipline, whereby strategic planning. The diagram below illustrates this concept.
depositors’ get a standardized measurement on the extent to which
their wealth is exposed to risk, and thereby establish confidence on Board of Directors
the Financial Institution’s operations. The CAR measurement is also
directed towards making a FI’s capital more risk sensitive and shock
absorbent. Audit Committee Internal Audit
Basel II guidelines are formed on three features as Management Risk Management

follows Committee Committee
Accountability
Responsibility
 Minimum capital requirements to be maintained by a bank

against credit, market, and operational risks. Risk Management
Division
 Process for assessing the overall capital adequacy aligned with
risk profile of a bank as well as capital growth plan.
 Framework of public disclosure on the position of a bank’s risk Departmental Head
profiles, capital adequacy, and risk management system. This
forms the basis of Market Discipline.
Non-Management
The two tiers of regulatory capital are as follows: Tier 1 Capital and Staff
Tier 2 Capital.
 Tier 1 Capital,also called the ‘Core Capital’, is the core measure The risks which form the basis for effective risk management are:
of a bank’s financial strength from a regulator’s point of view. credit, market, operational, and liquidity risks.
Banks have to maintain at least 50% of required capital as Tier  Credit Risk is a risk that the FI will not be able to recover the
1 capital. money it has owed. It occurs due to failure of the counter party
 Tier 2 Capital is called the ‘Supplementary Capital’ and to meet its obligations to pay the company in accordance with
represents other elements which fall short of some of the the agreed terms. The risk depends on the financial strength
characteristics of the core capital but contribute to the overall of the party owing to the bank as well as market factors that
strength of a bank. affect the value of assets used as lien against the loan.
The computation of the two capital grades are subject to the following Credit risk calculation recognizes and adjusts for two factors:
conditions (according to Bangladesh Bank’s Guideline for NBFI):  On Balance Sheet credit exposures refer to the credit risks
 Tier 2 Capital amount will be limited to 100% of the amount of that the various assets in the balance sheet are exposed to.
Tier 1 Capital. These assets are weighted according to the degree of the risks
 50% of revaluation reserves for fixed assets and 45% for exposed.
securities, and 10% of revaluation reserves for equity  Off Balance Sheet credit exposures refer to the credit risks on
instruments are eligible for Tier 2 Capital. the credit equivalent amounts of the various off balance sheet
 General provision in the Tier 2 Capital can be up to a limit of items.
1.25% of Risk Weighted Asset for Credit Risk
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 Market Risk is the potential for loss in earnings or in economic governance and process framework are in place for effective risk
value of the FI’s asset portfolio due to adverse changes in management. Material capital risk is assessed periodically which
financial market rates or prices. The preferred approach to supports the company’s internal capital adequacy requirements.
calculating this risk is VaR (Value at Risk). The scope of application of such guidelines applies to ‘Solo’ as well
 Operational Risk is the risk of a change in value caused by as to the ‘Consolidated’ basis.
the fact that actual losses, incurred for inadequate or failed
 ‘Solo Basis’ refers to all position of the FI and its local and
internal processes, people and systems, or from external
overseas branches/offices.
events (including legal risk), differ from the expected losses.
The risk can be deliberate, accidental or natural. The FI’s  ‘Consolidated Basis’ refers to all position of the FI (including
objective is to minimize the operational risk exposure within its local and overseas branches/offices) and its subsidiary
a framework of policies and procedures. companies engaged in financial (excluding insurance) activities
like merchant banks, brokerage firms, discount houses, etc.
Risk Weighted Assets (RWA) is a Financial Institution’s assets
or off-balance-sheet exposures, weighted according to risk. By Since LBFL has subsidiary companies, the guidelines apply to both
adjusting the amount of each asset for an estimate of how risky it ‘Solo’ and ‘Consolidated’ basis.
is, a rough measurement of the company’s financial stability can Breakdown of each category of eligible capital is given below.
be determined.
 Core Capital of LankaBangla Finance Ltd. is as follows:
Capital Adequacy Details of LankaBangla Figures in BDT Million
Capital Adequacy Solo Consolidated

Particulars
At LankaBangla, Capital Management Policy sets out the principles
2017 2016 2017 2016
and guidelines for effective and prudent capital planning, usage,
and management. The policy delineates the minimum criteria for
Fully paid-up capital/capital
ensuring that adequate capital is met and effective management 3,183 2,767 3,183 2,767
lien with BB
is performed.
Capital Adequacy is explicitly followed in adherence to the statutory Statutory reserve 1,473 1,202 1,473 1,202
compliance and regulatory requirements of Basel II guidelines,
affected by Bangladesh Bank from 1st January 2010. The guidelines
are prudently followed to safeguard the LBFL’s ability to continue Non-repayable share
- - 1,091 1,091
as a going concern, by establishing a strong capital base, and to premium account
maintain high credit rating as well as the confidence of the investors
and creditors. General reserve - - 51 54
At LBFL, capital planning is done in alignment with the company’s
risk appetite and profile. Capital goals are set to incorporate both Retained earnings 2,452 2,200 2,369 1,572
normal and stressful business conditions. As such, the goals take
into considerations current and future regulatory requirements and
economic conditions, and the expectations of stakeholders. Minority interest in
- 101 85
subsidiaries
Capital targets accommodate forward looking viewpoints on
economic outlook, company’s current financial condition, and Non-cumulative
future uncertainties inherent in capital planning. irredeemable preferences - - -
share
In line with this objective,capital base is set at 1% to 2% higher than
the minimum CAR. This ensures full compliance as well as a buffer Dividend equalization
- - - -
against capital loss during stressful situations. account
The company emphasizes on strong capital management through Other (if any item approved
the followings: by Bangladesh Bank)- Share 160 - 160 -
money deposit
 Oblige to regulatory requirements of capital base maintenance.
Less Shortfall in provisions
 Supply and demand forecast of capital to support business required against investment - - - -
strategy and continuity. in shares
 Incorporate rolling capital plan covering a time horizon of two
to three years. Less: Book value of goodwill - - 234 234
 Internal Controls and Governance to manage company’s risk,
performance and capital.
Total 7,268 6,170 8,194 6,537
Capital strategies are periodically reviewed to ensure that strong
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 Supplementary Capital of is as follows: the overall responsibility of ensuring that the risk-taking within
Figures in BDT Million the organization is disciplined and focused.
 Accountability is ensured by taking risk agreed by the
Solo Consolidated respective company authorities and also assuring that the risks
Particulars taken are transparent, controlled, reported and falls within the
2017 2016 2017 2016 appropriate infrastructure and resource.
General provision  Future risk emergence is identified and necessary steps taken
(unclassified loans up to to anticipate its impacts.
534 449 534 449
specified limit + SMA + off
 Effective Risk Management Policy and Controls are founded to
Balance Sheet exposure)
use the risk as a competitive advantage.
50% of Asset Revaluation
- - - -  Continuous improvement of the risk management approaches
Reserve
and methodologies to enhance current risk policies.
10% of Securities
- - -  Analyze and establish any new or improved policy to strengthen
Revaluation Reserve
the company’s risk management position.
All other preference shares - - - -  Ensuring consistent statutory compliance with regards to
capital adequacy and risk management.
Other (if any item approved
- - - - In accordance with the Basel II guidelines, LBFL takes precautionary
by Bangladesh Bank)
methods against credit, market, operational, and liquidity risks.
Total 534 449 534 449  Credit Risk is effectively measured and managed through a
framework of policies and procedures. All credit exposures
undergo proper approving authority as a mean of effective
Risk Management management of counter party credit risk. A defined structure
is established for delegation of credit approval authority and
At LankaBangla Finance Ltd, disciplined risk management is
for monitoring compliance with appetite.
considered as the key to organizational success. With that objective
in mind, strong management structure and risk management system, Proper due diligence is applied to review the credit
along with robust policies,are developed to allow the company to applications. Defined processes and procedures are used
manage the internal and external, and regulatory environments. to support credit underwriting activities at levels of the
A robust risk management framework is built to effectively cover business. As a part of proper underwriting standards,
the necessary requirements of managing risk. Establishment and appropriate valuations of collaterals are done for secured
oversight of the Group’s risk management framework lies with the credits.
Company’s Board of Directors. The risk management policies are
A counter party is also required to have an approved limit in
established to identify and analyze the risks faced by the Group,
place, prior to draw down of funds. Every credit party is subject
to set appropriate risk control standards, and to monitor the risks
to credit rating, and the rating is actively monitored as a part of
and adhere to defined policies. Protocols and responsibilities are
effective credit risk management. Account level activity along
clearly delineated such that decision making with regards to risk
with limit utilization monitoring is set as a part of risk trigger
management are taken positively. LBFL contemplate on having the
mechanisms. This helps to identify early alert situations based
industry practices of identifying, measuring and controlling risks.
on which the company can take proper actions. Potential
The Risk management policies and systems are reviewed regularly
problem accounts are identified, investigated, controlled and
to reflect changes in market conditions and operations. The Group,
monitored.
through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment Past dues and impaired exposures are defined in accordance
in which all employees understand their roles and obligations. with the relevant Bangladesh Bank regulations. Specific and
By implementing rigorous risk management policy, risk adjusted general provisions are computed periodically in accordance
returns are maximized, while ensuring that the company with the Bangladesh Bank regulations. The Group writes
off a loan or an investment debt security balance, and any
remainswithin its desired risk appetite. Emphasis is given on
related allowances for impairment losses, when Group Credit
establishing a risk management culture which takes into account
determines that the loan or security is non-collectable. This
the underlying assertions:
determination is made after considering information such
 Risk considered must be in line with the company’s goals, and as the occurrence of significant changes in the borrower’s /
also must support the company’s risk appetite. issuer’s financial position such that the borrower/issuer can no
longer pay the obligation, or that proceeds from collateral will
 Responsibility of identifying and taking risks within the not be sufficient to pay back the entire exposure.
organization lies with every employee. The company carries
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The table below gives details of Credit Risk:

Solo Consolidated
Distribution of risk exposure by claims
2017 2016 2017 2016
Cash and Cash Equivalents - - - -
Claims on Bangladesh Govt. & Bangladesh Bank - - - -
Claims on NBFI and Banks 1,450 448 1,851 870
Claims on Corporate 15,545 19,179 15,545 19,179
Claims categorized as retail portfolio & Small Enterprise 10,781 2,391 10,781 2,391
Consumer Finance 12,711 7,696 12,711 7,696
Claims fully secured by residential & comercial property 5,846 3,041 5,846 3,041
Past Due Claims 1,968 1,175 1,968 1,175
All other assets (restated) 11,273 11,157 9,476 9,700
Total 59,574 45,087 58,178 44,053
 Market Risk management is set as per the parameters business and group level. Management of operational risks
defined in the policy. The objective of the Group’s market is an integral part of the roles played by business and the
risk management is to manage and control market risk functional teams.
exposures set within the acceptable parameters, thereby
The Risk Management Division oversees whether the
ensuring solvency while optimizing the Group’s risk return
strategy. operational risk exposures fall within the policy. Defined
standards of measurement are also outlined which plays one of
Sufficient oversight and reporting are conducted for
the critical roles of ensuring that the risks are managed within
management of market risk profile. Overall authority for
the acceptable tolerance limits. The policies and standards are
market risk rests with the ALCO. Setting market liquidity as the
also reviewed periodically to keep the framework updated.
primary factor for determining the level of limits for portfolio
trading, ALCO provides limits for each type of risk in aggregate The types of events that could result in material operational
and for individual portfolios. risk loss or business disruptions are as follows:
The table below gives details of Market Risk:
 Internal and external fraud
Figures in BDT Million  Damage to physical assets
Solo Consolidated  Business process disruptions and system failures
Capital Requirements
2017 2016 2017 2016  Failure in service executions and deliveries, as well as process
management
Interest Rate Risk - - - -  Liquidity Risk is managed by the ALCO team within the pre-
defined liquidity limits set by and in compliance with the
Equity Position Risk 354 283 1,113 903 policies and regulatory requirements. The Treasury division
oversees the implementation of policies and other controls
Foreign Exchange Risk - - - -
relating to liquidity risks while managing the liquidity position
Commodity Risk - - - - of the company on a day to day basis.
RWA figure is calculated on the basis of credit, market, and

Total 354 283 1,113 903
operational risks. Total RWA is determined by first multiplying the
amount of capital charge for market risk and operational risk with
 Operational Risk framework is designed to ensure operational the reciprocal of the minimum CAR. The resulting figure is added to
risk identification, assessment, control and monitoring at the sum of the risk weighted assets for credit risk.
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Total Risk Weighted Asset

Solo Consolidated
Particulars
2017 2016 2017 2016
Credit Risk
1. On- Balance Sheet 59,574 45,087 58,178 44,053
2. Off - Balance Sheet - - - -
Market Risk 3,537 2,826 11,134 9,029
Operational Risk 2,932 2,143 3,713 3,040
Total RWA 66,043 50,056 73,026 56,122
Based on the data derived, the Capital Adequacy Ratio (CAR) is calculated. LankaBangla Finance Ltd. follows the standard CAR measurement
method.
Core Capital + Supplementary Capital

Capital Adequacy Ratio (CAR) =
Risk Weighted Assets
Capital Adequacy
Figures (except percentage) in BDT Million
Solo Consolidated
Particulars
2017 2016 2017 2016
Core Capital 7,268 6,170 8,194 6,537
Supplementary Capital 534 449 534 449
Total Eligible Capital 7,802 6,619 8,728 6,987
Risk Weighted Assets (RWA) 66,043 50,056 73,026 56,122
Capital Adequacy Ratio 11.81% 13.22% 11.95% 12.45%
Core Capital to RWA 11.00% 12.33% 11.22% 11.65%
Supplementary Capital to RWA 0.81% 0.90% 0.73% 0.80%
Minimum Capital Requirement (10% of RWA) 6,604 5,005 7,302 5,612
Excess Capital Over Regulatory Requirement 1,198 1,614 1,426 1,375
CAR of LankaBangla can be seen to be comfortably above the Bangladesh Bank’s CAR requirement of 10%. This is in line with the LBFL’s
approach to being compliant, establish investors’ confidence, and demonstrate company stability.
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Risk Management Statement on NPL Management
123
STATEMENT Annual Integrated
Report 2017
ON NPL MANAGEMENT
1. Introduction
Non-Performing Loan (NPL) is a debt obligation where the and overdue status reminders through SMS, e-mails, letters,
borrower has not paid previously agreed upon interest and telecommunications, meetings, discussions, visits, etc with
principal repayments to the designated lender for an extended the clients are consistently carried out by the department
period of time. The nonperforming asset is therefore not yielding which facilitates managing NPL at the lowest possible level.
any income to the lender in the form of principal and interest  For managing NPL cases arising out even after all the efforts
payments. Therefore, managing NPL to keep it at the lowest as mentioned above, a dedicated department namely
possible level is at the core of our business priorities. We have SAM (Special Asset Management) Department is in place
embedded the essence of asset quality in our business values, to directly monitor, put into action and intensify recovery
therefore, instituted the best local as well as international and settlement drives through dedicated internal recovery
industry practices throughout our business processes. officers and also third party collection service providers,
where necessary. Litigation Unit of Legal Affairs Department
2. Business Processes and Structures to Facilitate is well organized with the assistance of leading law firms of
NPL Management: the country to ensure all out legal actions for collection.
NPL management is one of the topmost priorities of the  Risk Management Division and its Internal Control &
management. At LankaBangla, NPL management starts from Compliance (ICC) Unit, Enterprise Risk Management (ERM)
the very beginning of our business process. Step by step NPL Unit and Audit & Inspection (AI) Unit are consistently
management flow is as under: reviewing and monitoring the implementation and
 We have developed credit policies in line with the best execution of the policies, procedures, and systems; blowing
practices which are the guiding principles for sales and whistles where necessary; updating with approval of
relationship teams which drive their business efforts competent authority the policies, procedures, and systems
towards quality business through systematic management with the assistance of the Information Technology (IT)
of any potential risk of NPL. Division and other stake-holding divisions;
 Credit Risk Management (CRM) division independently  The senior management is vigilant to monitor and review
reviews the credit proposals, approves (as per approved all the relevant aspects; provides necessary directions and
delegated authority) or recommends for onward approval guidance time to time; all to ensure asset quality maintaining
those cases which are screened off of potential risks the NPL ratio towards its desired goals outperforming the
ensuring adequate protection against any potential NPL. industry ratio.
The reporting authority of CRM division is also independent  On top of all, the Board of Directors periodically monitors
of reporting line of business division. and reviews the NPL movements and performance of
 The credit proposals recommended by CRM are reviewed the management in arresting NPL; provides necessary
by Management Credit Committee (MCC) consisting of the directions and guidance, thereby ensures highest quality of
Managing Director, Deputy Managing Director and Heads assets of the company to ensure a quality asset portfolio
of business divisions, operations division and CRM division, thereby maximize business and profitability growth.
who put into a wide variety of inputs from different aspects
ensuring the least possibility of NPL. 3. Strategies for NPL Management
 Thereafter, credit proposals recommended by MCC The recovery strategies are formulated based on analysis carried
out through the following three sub-functions:
are reviewed and if found acceptable, approved by the
 Classification of loan portfolio
concerned authority which may be the Managing Director,
the Board Executive Committee (BEC) or the Board of  Trend analysis of the overdue installments
Directors (BOD) independently.  Processes of recovery
 Even after approval of credit facilities, the post approval
activities like credit facility documentations and 3.1 Classification of Loan Portfolio
executions are carried out by separate department Loans are classified into the following categories:
namely Asset Operations Department and vetting of  Regular payees
credit facility and collateral documentations are taken  One monthly installment overdue
care of by separate department namely Legal Affairs  Two monthly installment overdue
Department under centralized Operations Division
 Three monthly installment overdue
which are independent of reporting line of business
departments and divisions to avoid conflict of interests.  Four monthly installment overdue
 For post disbursement activities like monitoring, collection,  Five monthly installment overdue
early alerts, etc. sales and relationship teams hold prima-  Six monthly installment overdue
facie responsibility to ensure their accountability towards  Suspended account (Special Asset)
quality asset portfolio, However, to put into more and
rigorous monitoring, separate department namely Asset The above mentioned classification is based on the age of the
Recovery & Monitoring Department continuously thrives loan portfolio. The strategy of recovery is based on the age of
for protection before assets turn into NPLs. Regular due date overdue of the loan facility.
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3.2 Trend Analysis of the Overdue Loans  2nd Reminder

The data of the outstanding loan portfolio is analyzed in two  Visit conducted by higher level employee/s
respects, namely, Sector-wise Age Analysis and Client-wise  Letter to guarantor/s
Age Analysis. From each of these two reports a trend analysis  Final letter for legal notice
is carried out. The details are given below. External data are  Legal Notice
utilized to do the analysis:  Report to Central Bank and to other agencies
 Terminate the loan
3.2.1 Sector-wise Age Analysis  Ask the guarantor of payment/ encashment of security
This report provides information on the sectorial default levelof  Litigation
the loan portfolio. If the default happens to be random in nature The application of the above mentioned options are contingent
for a particular sector, the client-wise age analysis is emphasized. upon the age of the overdue installments, causes of the overdue,
If any sectorial default is evident the following further analysis etc. Few of the application are as follows:
is carried out.  Immediately after overdue of one installment, telephonic
3.2.1.1 Industry Sales Analysis communication/ SMS is initiated by monitoring officer. Upon
failing to obtain positive result default letter is issued to the
This analysis is carried out by collecting data from the external
client after closure of the due month. If the letter does not
sources to find the causes of the sectorial sales decline. The
bring in result an official visit is made by a collection officer to
nature of the causes (temporary or permanent) is also analyzed.
resolve the matter.
3.2.1.2 Industry Profitability Analysis  If two installments are overdue, the case is analysed and
This analysis is carried out in order to find out the fluctuation of necessary corrective action is taken by sending an overdue
the profit margin of the sectors. The causes of the fluctuations status and a claim letter; simultaneously telephone calls and/
are also analyzed to uncover the nature of the fluctuations or visits are made to give the continuous reminder.
(temporary or permanent).  If the above actions fail a second reminder is given to the client
through letter along with telephonic conversation.
3.2.1.3 Industry Liquidity Analysis  If consecutively three installments are overdue the client is
This analysis is carried out in the context of national economic taken as problem case. In this case a higher level management
activity, monetary condition to find out the immediate liquidity meeting is conducted, to take corrective action with respect to
situation of the industry and be prepared to face the reality of rescheduling, early realisation, etc.
the business.  If the above measures fail a letter showing the details of
overdue and a list of already taken corrective actions is sent to
3.2.1.4 Industry Change Analysis the client with C.C. to the guarantor and security provider.
This analysis is carried out to find out changes in the industry  After six monthly installments overdue, or the account is
in terms of technology, investment, development of substitute overdue for six months, the case is taken as suspended case
product, etc. The objectives of the sector-wise age analysis are and legal notice, reporting to central bank, termination of
following: loan, security encashment, final provisioning, litigation etc. are
carried out chronologically.
 Take immediate action to realize the default outstanding
by way of rescheduling, suspending or terminating the
agreement.
5. NPL Status as on December 31, 2017:
 Provide investment advices to the client to help them
During the year 2017, the NPL ratio of the Company slightly
recovering from turmoil.
decreased to 3.07% from previous year’s 3.52%. The absolute
 Adopt alternate strategies with respect to loan finance to figures show the increase in classified portfolio from BDT
the sector. 1,647.65 million in 2016 to BDT 1,899.36 million in 2017. Special
 Adopt new criteria for future reference in appraisal efforts were made during the course of the year, which were
procedure. further intensified during last quarter of the year and it helped
reduce the impact of stressful economy on NPL to a sizable
3.2.2 Client-wise Age Analysis extent comparing to the industry.
This analysis is carried out to discover the clients’ integrity and The movement in NPL accounts during the year 2017 has been
sincerity to pay the loan installments, their business profitability, depicted in following table:
and affectivity of their business strategy in the context of present
business situation. The objective is to adopt correct strategy to Particulars BDT Million
recover the investment.
Opening Balance as on January 1, 2017 1,647.65
4. Recovery Processes Add: Addition During the Year 605.22
The various recovery actions in order of intensity is given below: Less: Collection During the Year 261.13
 Phone Call/ SMS
 Letter/ E-mail Less: Write-offs 92.38
 Visit Closing Balance as on December 31, 2017 1,899.36
 Reminder
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125
Annual Integrated
Report 2017
6. Write offs
During the year 2017, the movement in write-offs accounts is as under:
Particulars No of Accounts BDT million
Opening Balance as on January 1, 2017 11 502.96
Add: Addition During the Year 3 92.38
Less: Collection During the Year - 6.89
Closing Balance as on December 31, 2017 13 588.45
7. Sector-wise NPL Status

Following table shows sector-wise exposure vis-à-vis sector-wise NPL of LankaBangla.
Total Credit Credit NPL
NPL % of
Sl. Particulars Portfolio Portfolio Portfolio
Total Portfolio
(in BDT mn) (in %) (in BDT mn)
1. Trade and commerce 10,201.34 16.48% 276.29 2.71%
2. Industry - - -
a) Garments and knitwear 2,338.24 3.78% 167.01 7.14%
b) Textile 1,161.73 1.88% 88.66 7.63%
c) Jute and jute -products 347.76 0.56% - 0.00%
d) Food production and processing industry 4,326.35 6.99% 22.96 0.53%
e) Plastic industry 841.05 1.36% - 0.00%
f) Leather and leather goods 533.11 0.86% - 0.00%
g) Iron, steel and engineering 1,933.14 3.12% 91.63 4.74%
h) Pharmaceuticals and chemicals 891.62 1.44% - 0.00%
i) Cement and allied industry 1,113.59 1.80% 8.30 0.75%
J) Telecommunication and IT 842.46 1.36% 0.81 0.10%
k) Paper, printing and packaging 540.91 0.87% 11.30 2.09%
l) Glass, glassware and ceramic industry 18.62 0.03% 18.62 100.00%
m) Ship manufacturing industry - 0.00% - -
n) Electronics and electrical products 394.85 0.64% - 0.00%
o) Power, gas, water and sanitary service 710.18 1.15% 25.34 3.57%
p) Transport and aviation 1,249.06 2.02% 145.83 11.67%
Industry Total 17,242.67 27.85% 580.45 3.37%
3. Agriculture 860.01 1.39% 34.92 4.06%
4. Housing 12,601.60 20.35% 571.89 4.54%
5. Others - - - -
Merchant Banking (Loan to LankaBangla
a) 2,390.75 3.86% - 0.00%
Investments Limited)
b) Margin Loan 1,146.28 1.85% - 0.00%
C) Others 17,470.94 28.22% 435.80 2.49%
Others Total 21,007.97 33.93% - 0.00%
Grand Total 61,913.59 100.00% 1,899.36 3.07%
In order to arrest NPL our focus is not only reducing existing NPL any further significant NPL, we have extensively reorganized our
portfolio, but also avoiding further NPL. In line with that we have Organogram, separated business division, CRM division, Operations
strengthened our recovery & monitoring team, deployed external division, strengthened pool of qualified human resources in the
sources where found suitable, strengthened our legal team, thereby departments, enhanced lawyers’ panel incorporating leading law
intensified recovery drive which brought in defaulting clients under firms, strengthened Risk management division, reengineered
negotiation and thereby sizable recovery was possible in year business and operational processes putting into a strong risk
2017 like-wise 2016. We hope further improvement in year 2018 management framework in place which is expected to result in
in recovery of NPL accounts.On the other hand, in order to check significant improvement in year 2018.
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Risk Management Report on Going Concern
126
LankaBangla
REPORT
ON GOING CONCERN
Every company requires assessing its ability to continue as a going LankaBangla gives due importance on product diversification, a key
concern. The Board of Directors of Lanka Bangla has made annual strategy to achieve customer satisfaction by tailoring the need of
assessment about whether there exists any material uncertainty customers. In 2017 Lease, Loans and Advances has increased by
which may cast significant doubt upon the Company’s ability 32% and Term Deposit has increased by 29% compared to that of
to continue as going concern. This assessment involves making 2016. This is indicative of the impact of our sound organizational
appropriate inquiries including review of budget and future structure, skilled and dedicated work force and business strategies
outcome of inherent uncertainties in existence. The Directors are through which we were able to achieve such results. Fund under
convinced from the following indications, which give reasonable Management grows by 36% and reaches to BDT 152,283 Million
assurance as to Company’s continuance as a going concern for the in 2017 compared to BDT 112,348 Million of previous year.
foreseeable future. LankaBangla’s Management has positive intent to maintain this
growth in future years which represent Company’s intention to
Financial Indications perpetuity.
Performance Growth Consistent Payment of Dividends
LankaBangla’s performance growth indicates the excellence it has
LankaBangla has been paying consistent dividend to its shareholders
shown in its operating performance over the last year. The Company’s
over many years, which reflects company’s long term vision and
Consolidated Total Asset grew by 34% in 2017, from BDT 63,935
firm commitment to its shareholders.
Million in 2016 to BDT 85,443 Million in 2017. Consolidated Earning
Assets of LankaBangla reached BDT 80,889 Million in 2017 which Corporate Environment and Employees’ Satisfaction
grew by 33% from BDT 60,624 in 2016. Consolidated Operating LankaBangla is an excellent work place with a friendly working
Revenue shows a growth of 37% from last year; it amounted to BDT environment. Communication among the employees is admirable.
9,981 Million in 2017 from BDT 7,311 Million in 2016. Consolidated The organization endeavours to be honest and practices fair
Net Interest, which is one of the major performance indicators, treatment to all employees which ensures healthy corporate
amounted to BDT 2,237 Million for the year 2017 compared to BDT environment. The company pays a very competitive compensation
1,697 Million of 2016. The Consolidated Net Interest grew by 32% package and there are a good number of employee benefits
over the last year, even though the industry has continued to show like provident fund, gratuity fund, Home and personal loan for
downward trend in interest rates in 2017. employees at a reduced rate, employees’ health insurance,
Credibility in Payment Obligations incentive bonus, transport facility to the eligible employees. Pay
scale are frequently revised to give effect of inflation as well as
LankaBangla has strong credibility in terms of payment of its
to align with the industry level. These factors are instrumental for
obligations to the lenders and suppliers. The Company is very
employee satisfaction.
particular in fulfilling the terms of payment or repayment
agreements without any exception. This has resultant from our Maintenance of Sufficient Capital
effective liquidity management plan. As per BASEL-II, an NBFI should maintain total capital of at least
Positive Key Financial Ratios 10 percent of Risk Weighted Asset (RWA). LankaBangla maintains
its capital well above the required level consistently even though
Financial ratios are indicative of a company’s financial strengths and
growth of RWA is significant. As on 31 December 2017 Consolidated
prospects. The key financial ratios of LankaBangla for the year 2017
Capital Adequacy Ratio (CAR) of Lanka Bangla is 11.95%.
indicate a very positive picture as evident from financial highlights
and graphical presentation of financial position given separately in Other Indications
this annual report. Satisfactory Credit Rating
Cash Flow Analysis Credit Rating Agency of Bangladesh Ltd. (CRAB) has rated the
LankaBangla’s cash flow analysis represents its strengths about Company on 31 July 2017 with “AA3” (Pronounced as AA Three) in
its ability to repay its obligations, ability to adapt in changing the long term and ST-2 for the Short Term based on audited financial
circumstances and generate sufficient cash and cash equivalents of FY2016 and other available information up to the date of rating
which will lead the organization to a sustainable future growth. declaration. The outlook on the rating is Stable. The rating reflects
Consolidated Operating Cash Flow before changes in operating the strengths of the Company which is backed by a strong team
assets and liabilities increase by 90% in 2017 compared to 2016; of management, growth in the non-interest income, deposits and
BDT 2,817 Million as against BDT 1,479 Million of previous year. investments, adequate capital coverage with high Tier-1 capital,
However, Net Operating Cash Flow after changes in operating assets improved asset quality and well controlled liquidity position.
and liabilities shows net outflow of BDT 1,550 Million, whereas Changes in Government Policy
there was an inflow of BDT 2,496 million in the previous year. LankaBangla Management anticipates no significant change in
Expansion of Business legislation or government policy, which may materially affect the
business of LankaBangla.
LankaBangla continues to expand its segment geographically by
Based on the above mentioned indications, Directors feel it is
opening new branches in different places considering the economic
appropriate to adopt going concern assumptions. Adequate
significance. In 2017 LankaBangla opened 5 new branches and
disclosures have been made in the financial statements and
initiatives have been taken to open 5 more new branches in 2018
different sections of the annual report to understand the
at different places across Bangladesh. As on 31 December 2017
appropriateness of going concern basis in preparing the financial
LankaBangla has 25 Branches.
statements.
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127
MANAGEMENT Annual Integrated
Report 2017
DISCUSSION AND ANALYSIS

The primary role of LankaBangla is to Review from the Managing Director & CEO 128
facilitate the movement of capital and CFO's Statement on Performance 131
flow of money from where it is to where Financial Highlights 140
it is required to meet stakeholder needs.
Horizontal & Vertical Analysis 146
It is through the meeting of these needs
that we enable a thriving society and Value Creation Structure 150
create long-term value. Business Model 152
How We Create Value 154
Delivering Value through Our Business 156
Key Resources of LankaBangla 158
Stakeholders Analysis 163
Economic Outlook 171
Business Environment Analysis 174
Drivers Guiding Our Strategies 180
Material Matters that Affect Our Strategies 181
Strategic Focus Areas 183
Human Resource Accounting 186
Human Capital Report 192
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Management Discussion and Analysis Review from the Managing Director & CEO
128
LankaBangla
REVIEW FROM
THE MANAGING DIRECTOR & CEO
Over the last few years we have been

able to successfully embedded a culture
of change and constant improvement into
the organisation. We will now leverage
our strengths, capitalise on opportunities
and share our success with all our
stakeholders in the journey of GROWING
TOGETHER.
Khwaja Shahriar
Dear Stakeholders,
Pursuing a clear strategic vision and rising to a variety of growth development programme supported by a fast-track
challenges, we have been consistently achieving impressive implementation will help our nation to achieve higher growth
results over the past few years. We have also upgraded and in the near future. In this backdrop we as a financier will enjoy
strengthened our internal systems and processes to ensure that higher credit growth to support private sector activities linked
we serve our customers better and through that added value with these developments. Armed with sense of collective
to all our stakeholders. Our strong work force spread across achievement we look forward to the next phase of our journey
the country have embraced this vision as one and working with towards growth and prosperity which will consolidate and build
commitment, professionalism and an excellent team spirit has on the good work done so far.
taken us along the path to high growth prospect.
Year-end Highlights-2017
The year 2017 saw Bangladesh achieve its highest ever GDP
As on December 2017, our SME portfolio stood at BDT 15,949
growth in recent years, with revised GDP growth hitting 7.28%. million, showing a growth of 131% during the year. In order
This was the highest growth achieved in South Asia for 2017, and to exploit the huge opportunities in SME sector, we deployed
one of the highest GDP growth rates among major economies different strategies aimed to grow and achieve a diversified
in the world. The political environment also remained stable. portfolio. These strategies are aligned with our strategy of
The government has set a GDP growth target of 7.40% for the branch growth, and we are planning to ensure our presence in
2018 fiscal year with higher gear in investments in power and the major SME business hubs all over the country.
transport infrastructure and higher private sector credit growth
rates. Given current trends, Bangladesh is clearly entering to yet In 2017, we focused heavily on personal financial services and
another higher growth trajectory. SME financial services. Our credit card department has shown
significant growth and client base is growing sharply. Our Home
For us 2017 is the culmination of the first stage of a journey Loan portfolio has grown 92% from last year; BDT 12,250
undertaken along the path defined by our last Strategic Plan. million in 2017 from BDT 6,393 million in 2016. The Personal
We believe that the Government’s ambitious infrastructure Loan division also achieved commendable success with the
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Annual Integrated
Report 2017
achievement of portfolio growth of 70% from last year. Our

prime vision for 2018 is to ensure that branches play a bigger ROA
role in promoting retail and SME lending and driving medium For the year 2017, our Consolidated Return on Assets (ROA)
term business goals. was 2.58% compared to 1.39% of 2016. Efficient Asset
Management of the group plays a significant role in increasing
Our term deposit has grown by 29% in 2017. This is in line of the ROA in 2017.
reducing dependency on bank borrowing which is a major
prerequisite for a NBFI to have sustainable future.
ROE
Financial Highlights Consolidated Return on Equity (ROE) for the year 2017 was
As on 31st December 2017, our asset portfolio has reached 25.66% which was 12.29% in 2016. The outcome has been
at 61,914 million which indicates a growth of 32%. Overall the result of increased profitability.
disbursement was 56,726 million showing a growth of 25%.
Other major highlights are shown below.
EPS
Revenue Consolidated Earnings per Share (EPS) for 2017 stood at BDT
Consolidated revenue for 2017 has been BDT 9,981 million 5.97 compared to BDT 2.50 in 2016. This indicates increased
which shows a growth rate of 37% from the previous year, profitability and stable asset base despite fierce competition
of which 71% was from interest earning products, 9% from amongst the players within the market.
investment income, 11% from commission & brokerage
income and rest 9% from other income sources.
Activities of Subsidiaries
With the launching of fund management service through
Profitability LankaBangla Asset Management Company Limited, now
Consolidated Pre-tax profit was recorded at BDT 2,263.81 LankaBangla is the pioneer financial institution in Bangladesh to
million for the year 2017, which was BDT 946.66 million in operate full scale in capital market of Bangladesh. LankaBangla
the previous year, resulting in a growth of 139%. Consolidated Securities Limited (LBSL) maintained its leadership in both of the
Post-tax profit also shows an impressive growth of 142% from exchanges (DSE & CSE) in terms of turnover for the last 12 years and
the previous year. 13 years respectively. Daily turnover in both the bourses increased
significantly in 2017 and LBSL was able to register 7.64% market
Portfolio share in DSE and 10.88% in CSE which is so far the highest market
share retention in LBSL’s history. In 2017, brokerage revenue from
Lease, Loans & Advances Portfolio of LBFL shows a growth of
LBSL touched a billion mark, highest in last five years. LankaBangla
32% from 46,749 million in 2016 to 61,914 million in 2017.
Securities Limited has won the “Dream Company to Work for-Best
Retail portfolio grew 70% and now stands at BDT 27,050 Workplace Practices” award at the Global CSR Excellence and
million, whereas corporate portfolio has gone down from Leadership Awards-2018. This is a testament that we could set an
23,918 to 18,915 million. SME financial services division exemplary leadership in the industry.
shows a huge growth of 131% from 6,905 million in 2016 to
15,949 million in 2017. LankaBangla Investments Limited (LBIL) worked on quite a few
deals in merger & acquisition and corporate advisory maintaining
Credit Quality and NPL its leading position in primary market operations. Gradually
We have been successful in reducing our stand alone NPL this merchant banking wing of LankaBangla Finance Limited is
ratio from 3.52% in 2016 to 3.07% in 2017. Overall NPL ratio shifting from fund based earning sources to non-funded earning
of the Group was well placed at 2.85%. This shows that we sources. LBIL has arranged BDT 2,770 million for its clients through
have displayed growth without sacrificing our credit quality. Preference Share Issuance, Equity Arrangement and Commercial
Paper Issuance. Advisory Service from LBIL has been strengthened
and LBIL has worked as Transaction Advisor in divestment of a
Liquidity and Capital Adequacy Ratio Foreign entity and provided valuation advisory services in several
Capital Adequacy Ratio (CAR) for 2017 stood at 11.81% on mandates.
separate basis and 11.95% on consolidated basis against the
2017 was the first full year for LankaBangla Asset Management
Bangladesh Bank’s stipulation of 10%. This shows the strength
Company Limited (LBAMCL) in Fund Management. As the wealth
of Capital and the level of compliance of LankaBangla with
management wing of LankaBangla, LBAMCL kept signature mark
the regulatory requirements with regards to a sustainable
of LankaBangla brand in capital market operations and generated
growth.
impressive return in its first fund namely LankaBangla 1st Balanced
Unit Fund (LB1stBUF) and declared 15% dividend for the year
Share Performance 2017. Looking forward in 2018, two new mutual funds namely
Market price of our share had shown fluctuation throughout LankaBangla Al-Arafah Shariah Unit Fund and LankaBangla Popular
the year in between BDT 35.9 and BDT 69.3 and finally settled Life Growth Fund are expected to be launched. In Alternative Fund
at BDT 47.8 at the end of 2017, which is up by 37% than 2016- Management side, we are hopeful to launch our First Private Equity
year end. Fund in 2018.
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LankaBangla
We are building capacity along with these developments to

facilitate the market with right kind of technology and skill set that
would be required in foreseeable future.
Economic Outlook and Competitive Challenges for 2018

The monetary policy for H2 FY 2018 has set the private sector credit
growth target at 16.8%, tighter than 18.13% growth achieved in
December 2017. Bangladesh Bank mulls to tighten credit supply
and curb excessive lending due to prospective inflationary pressure FUND UNDER
on economy. The ADR of all banks has been re-fixed at 83.50% for MANAGEMENT RETURN ON
conventional banks and at 89% for Shariah-based Islamic banks reached to ASSETS
152 2.58%
from the existing 85% and 90% respectively. The revised limit will
come into effect from December 2018. This directive put pressure
on banks to attract more deposits. In the backdrop of decreasing BDT bn
liquidity in the banking system due to higher lending and lower
deposit growth, this measure will pop up interest rates in 2018.
NIM would be under pressure throughout the year as we see it.
Political risk is also heightening ahead of national election in late
2018. We would remain cautious in lending and will rebalance our
portfolio to higher yield segments as measure to keep our desired
margin.
While we are investing more on technology to ensure seamless
operations and customer service, innovation would remain a top TOTAL GROSS
LOANS AND RETURN ON
priority in 2018. With few other new branches, we will reach to
customer doorsteps with higher concentration in personal financial FINANCING EQUITY
25.66%
services and SME financial services. ASSETS
increased by
30%
Our Footprint
In expanding our footprint our desire is to project our presence
selectively in strategically important places for SME & Personal
Financial Services. We envisage that all our branches will be
advanced in state-of-the-art technology and client service. We are
conscious of the immense potential in the new growth areas of
the Bangladesh economy, and will invest in preparing our human
resources to cater to these specific market segments. Our branch
network already comprises 25 locations country-wide. As we grow
in geographical presence and strength, we are committed to be
most preferred financial service provider of the country.
TOTAL EARNING PER
Appreciations DISBURSEMENT SHARE
5.97
increased by
Our achievements have always been made possible through a
team effort where everyone – from the members of the Board
to the newest recruits manning our counters – have contributed
wholeheartedly towards achieving our goals and I sincerely thank
25% BDT
the Board of Directors, members of Management Committee and

all members of our staff for their contribution.
Finally, none of this would have been possible without our investors,
loyal customers and all other stakeholders who have reposed their
confidence, unwaveringly in LankaBangla. We look forward to
continue our journey towards mutual growth and prosperity.
Thank you!
OPERATING NET ASSET
REVENUE VALUE
increased by per share
Khwaja Shahriar
37% 26.16
BDT
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Management Discussion and Analysis CFO's Statement on Performance
131
CFO's STATEMENT Annual Integrated
Report 2017
ON PERFORMANCE
ROE is our most critical measure of

shareholder value creation. The group’s
ROE was 25.66% in 2017. To this end, we
remain steadfast in our commitment to
partnering with our clients on their growth
journeys and we will concentrate on
optimising resource allocation across the
group, coupled with tighter management
of capital supply and a diligent focus on
improving our JAWs ratio while improving
the cost to income ratio of the Group.
Shamim Al Mamun, FCA

Chief Financial Officer
Review of 2017 Financial Results

LankaBangla Finance Limited (LBFL) continued to produce robust growth in non-interest revenue (NIR) and improvement in Non-
results in 2017, supported by good performance across the performing Loans (NPL) resulted in reduction of Loan loss provisions.
segments. This was evident in increase of Net Interest Income (NII), All three subsidiaries set the momentous to contribute to Group profit.
Consolidated Consolidated
Gross Revenue Return on Equity (ROE)
grew by of
36.62% to BDT 9,981 million 25.66% which was 20.13% considering LBFL
as a separate entity
Consolidated Consolidated
Cost to Income Ratio EBITDA
reduced to grew by
51.95% in 2017 from 59.83% of 2016 44.86% to BDT 7,255.51 million
LBFL’s Consolidated
Net Asset Value Net Asset Value
increased by increased to
17.80% to BDT 22.84 per share BDT 26.16 per share in 2017 which was
BDT 21.01 per share in 2016
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LankaBangla
Consolidated Earnings per Share (EPS) have been increased by BDT 4.25 per share for the year 2017 compared to BDT 3.37
138.69% to BDT 5.97 per share in 2017 compared to BDT 2.50 per share of previous year. As LanglaBangla along with its all
per share in previous year. LBFL’s Earning per Share stood at subsidiaries is growing sustainably future seems more promising.
The Group’s balance sheet is well positioned with our Basel Total Asset
II Capital Adequacy Ratio (CAR) at 11.95%. CAR is well above In terms of Asset Growth, LankaBangla is growing faster than the
regulatory requirement of 10% even after 29.86% growth of Industry. From the year 2013 to 2017 Asset base of NBFI Industry
investment portfolio. Increase in Tier 1 eligible capital was grew at a Cumulative Average Growth Rate (CAGR) of 16.33%.
possible because of profitability. Funding and liquidity level At the same time LBFL’s asset base grew at a CAGR of 30.93%.
remain sound, with increasing statutory liquid asset and cash LanakaBangla is sustainably maintaining its asset growth. Market
reserve resulting in positive liquidity coverage ratio which share in terms of Asset is also growing. As at the end of 2017 LBFL
was well above the regulatory requirement. holds 9.79% of the total Assets of NBFI Industry which was 6.10%
way back in 2013.
BDT Billion
LBFL’s Performance against the Industry
Market Industry LBFL’s
Year Industry LBFL
LankaBangla continued keeping pace outperforming the Share Growth Growth
industry in 2017 in terms of growth of different performance 2013 436.3 26.63 6.10% 30.67% 36.56%
and financial position measures. The impetus of growth 2014 520.05 32.35 6.22% 19.20% 21.48%
could be accentuated comparing financial data of LBFL with 2015 611 44.61 7.30% 17.49% 37.90%
annualized industry’s financial data sourced from Bangladesh
2016 713.9 57.62 8.07% 16.84% 29.16%
Bank Report.
2017 799.10 78.25 9.79% 11.93% 35.80%
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133
Annual Integrated
Report 2017
Total Deposit BDT Billion

Market Industry LBFL's
Total Deposit in NBFI Industry mainly sourced through Term Year Industry LBFL Share NPL% NPL%
Deposits. LBFL maintains a well-diversified term deposit
2013 16.8 0.93 5.54% 6.14% 4.83%
portfolio with a good number of products depending on the
depositors’ preference. CAGR of 47.54% against industry CAGR 2014 19.7 1.23 6.24% 5.28% 5.07%
of 23.34% over the last five years describes the depositors’
confidence on LBFL. In 2013 LBFL’s market share in terms of Total 2015 40.0 1.34 3.35% 8.92% 3.72%
Deposit was only 5.49% and as at the end of 2017 it reached to 2016 38.7 1.65 4.26% 7.29% 3.53%
a commendable position holding 11.24% of the Total Deposit of
the Industry. 2017 56.68 1.90 3.35% 8.87% 3.07%
BDT Billion
Year Industry LBFL Market

Share
Industry
Growth
LBFL’s
Growth
Return on Asset (ROA)
LBFL’s ROA for the year 2017 was 1.99% compared to .80%
2013 198.3 10.88 5.49% 36.38% 41.67% Industry’s ROA. Despite of a modest growth of its asset base
LBFL maintained average ROA above the industry ROA for the
2014 238.5 16.72 7.01% 20.27% 53.68%
last five years. LankaBangla’s consolidated ROA for the year
2015 318.1 30.08 9.46% 33.38% 79.90%
2017 was 2.58%
2016 382.43 40.03 10.47% 20.22% 33.08%
2017 458.85 51.55 11.24% 19.98% 28.79%
Leases, Loans and Advances

LBFL offers well-diversified and need based loan products for its
valuable clients. In case of growth in leases, loans and advances
portfolio LBFL outperformed Industry in the last five years. From
2013 to 2017 NBFI Industry grew at a CAGR of 23.63% and in
comparison LBFL’s CAGR was 33.90% for the same duration.
In the year 2017 LBFL’s Loans portfolio increased by 32.44%
compared to Industry growth of 20.45%. LBFL’s market share for
leases, loans and advances grew to 9.69% by the end of 2017 Return on Equity (ROE)
which was 7.04% in the year 2013. LBFL’s ROE for 2017 was 20.13% against the Industry ROE of 5.9%.
LBFL has been maintaining an above average ROE compared to
BDT Billion the Industry for each of the last five years along with maintaining
Market Industry LBFL’s a stable equity growth. LankaBangla’s consolidated ROE for
Year Industry LBFL Share Growth Growth
2017 was 25.66%.
2013 273.6 19.26 7.04% 8.53% 39.87%
2014 372.8 24.27 6.51% 36.26% 26.01%
2015 448.5 36.02 8.03% 20.31% 48.41%
2016 530.7 46.75 8.81% 18.33% 29.79%
2017 639.20 61.91 9.69% 20.45% 32.44%
Asset Quality
Maintaining the soundness of the asset quality is one of the
major strategic focus areas of LBFL. As at the end of 2017 LBFL’s
stand-alone NPL ratio well placed at 3.07% against the Industry
figure of 8.87%. By the end of 2017 LBFL holds only 3.35% of the
total non-performing assets, even if it holds 9.69% of the total Key Developments in 2017
loan portfolio of the Industry. Despite maintaining a sustainable Our 2017’s financial results reflect both the benefits of strategic
growth in Loan portfolio LBFL’s NPL% is gradually decreasing actions taken over the past few years and the impact of strategic
against the gradually increasing trend of the Industry. actions and restructuring which were continued this year.
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134
LankaBangla
Corporate loans and advances were our strength for a number

of previous years. Considering current business trends, risks and
profitability, we tend to focus more on Retail and SME sector.
Like 2016 we continued to cash the benefit of our strategic tilt
as Retail and SME disbursement grew by 78.54% and 83.01%
respectively and respective portfolio grew by 70% and 131%
correspondingly.
Total Loan portfolio increased by 29.86% in the year 2017
supported by a modest 24.57% growth in Lease & Loan
disbursement. LankaBangla is growing with its subsidiaries
and branches. In 2017, 5 new branches have been opened and
another 05 new branches will start operation in 2018.
We focused meticulously on human resource as one of our
major strategies. Recruitment of quality resources continued in
2017. We invested a lot to improve the quality of the existing
employees in form of both local and foreign training which is
supported by 40% rise of group training cost over that of 2016.
Employee motivation is prominent in LankaBangla by means
of smart compensation package, increment and performance
bonus, family involvement events and so on.
Succession planning has been introduced in LBFL. We have
planned a two to three level backup and career succession plan.
In LankaBangla we encourage leadership and provide ample
opportunities to the successor to come forward. Two week
annual leave is a must for each and every employee and during
the leave the work has to go on.
Analysis of our Financial Performance

Profitability Position:
For the financial year ended 2017, the profitability indicators
showed significant improvements posting a consolidate net
profit before tax of BDT 2,264 million compared to BDT 947
million achieved in the previous year reflecting a y-o-y growth
of 139%. Consolidated net profit after tax for the year 2017 was
BDT 1,926 million which was 142% higher than BDT 796 million
of 2016. LBFL’s net profit before and after tax was BDT 1,397 Where the industry is facing numerous challenges in growing up
million and BDT 1,353 million respectively. revenue lines we have succeeded in reaching BDT 9,981 million of
group revenue achieving 37% growth over last year’s BDT 7,306
We were focusing more on our primary line of business and
million. Keeping pace with our strategic plan, management was
2017’s financial result is the evidence of the outcome. We kept able to maintain a strong momentum in revenue growth.
focusing on keeping overall average cost of funding at idyllic
levels and tackled overhead cost escalation through concise Gross Revenue BDT in million Y-O-Y Growth
means of cost management to reach current level of profitability. Segments 2017 2016 Amount %
Corporate 2,353.44 2,764.85 (411.41) -15%
Group BDT in million Y-O-Y Growth
Retail 3,376.45 2,206.94 1,169.51 53%
Years 2017 2016 Amount %
SME 874.49 458.88 415.61 91%
Net profit before tax 2,263.81 946.66 1,317.15 139%
Treasury 677.61 239.97 437.64 182%
Net profit after tax 1,926.29 795.64 1,130.65 142% LankaBangla 2,273.46 1,346.04 927.41 69%
Securities
LBFL BDT in million Y-O-Y Growth LankaBangla 375.56 256.75 118.81 46%
Investments
Years 2017 2016 Amount % LankaBangla Asset 49.78 32.13 17.65 55%
management
Net profit before tax 1,397.39 1,107.34 290.05 26%
Total Group
Net profit after tax 1,352.79 1,072.05 280.74 26% 9,980.78 7,305.56 2,675.22 37%
Revenue
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Retail segment is the highest contributor to the LBFL Group's In boosting revenue core contributor was interest income. Interest
revenue in 2017 which was Corporate in 2016. In 2017, 34% of the income contributed 71% in the total revenue where investment
Gross revenue came from retail. In this segment LBFL is the aspiring income, commission & brokerage income and other income
market leader in the industry. Even in the extreme competitive and contributed 9%, 11% and 9% respectively. Commission and
reducing interest rate regime retail segment nearly earn BDT 3.4 brokerage income got 103% growth in 2017 which was only 1% in
billion of revenue in the year 2017 which is 53% higher than that 2016. It implies nice market impact.
of previous year. These signify the strategic focus of LBFL and rapid
growth in this segment. Interest Income
Despite we are focusing more on Retail and SME 24% of the gross Interest income is the core component of revenue for LBFL group.
revenue came from Corporate segment. Although its revenue With loan portfolio sustaining a resilient 30% growth, interest
growth shows negative trends still corporate is second big income grew by 25% to BDT 7,076 million in 2017 which was
contributor of revenue after Retail. BDT 5,662 million for the year 2016. Acquisition of new clients,
SME is comparatively a new segment of LBFL and we are structuring increase in volume of business with existing clients and expansion
our self to make it one of the important core segments of LBFL. In of products and services helped to boost interest revenue in the
2017 SME revenue grows by 91% compared to last year. Revenue year 2017.
contribution by SME segment increased to 9% which was only 6% in
previous year. We are forecasting rapid growth in coming years also.
Treasury is a very important business segment of LBFL. Our treasury
not only manage fund for internal uses but also actively participate
in the revenue through dealing in the money market and managing
diversified Investment portfolio. Treasury tends to maintain its
position through efficiency of money market dealing and conscious
invest decisions even in a very challenging business condition.
After experiencing negative growth in last few years our subsidiaries'
(LBSL and LBIL) revenue grows by 69% and 46% which entails good
impact of the Share Market in Bangladesh. LBIL started to contribute
to profit and LBSL is moving towards achieving its old momentum. In 2017 LBFL experienced 76% negative growth in interest suspense
Being the Market Leader for many years LBSL is expecting a modest account. World class client service with rigorous monitoring of
growth in revenue and profit in coming years as the Bearish trend asset clients make this possible. We are looking forward to keep
of share market is reversing.
the same trend for the upcoming years.
LBAMCL responded positively to its restructuring project of 2016 BDT Million
and contributed BDT 6.91 M to group profit in 2017. In coming Y-O-Y Growth
Interest
years we are expecting more volume growth as the market is very income 2017 2016
responsive towards the new products and services of LBAMCL. Amount %
BDT Million Corporate 2,281.41 2,676.27 (394.86) -15%
Gross Revenue Y-O-Y Growth
Retail 2,937.63 1,919.26 1,018.37 53%
Elements 2017 2016 Amount %
Interest income 7,076.09 5,661.54 1,414.55 25% SME 832.68 434.11 398.57 92%
Income from 914.22 483.53 430.70 89% Treasury 401.54 132.46 269.08 203%
investment
Commission Debit balane of
1,136.00 560.86 575.14 103% 126.94 401.49 (274.56) -68%
and brokerage income share clients
Other Margin loan 495.89 97.96 397.93 406%

operational income 854.47 599.63 254.83 42%
Total Interest
Total Revenue 9,980.78 7,305.56 2,675.22 37% 7,076.09 5,661.54 1,414.55 25%
Income
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LankaBangla
the years. LBFL remained vigilant to mitigate any significant margin

erosion that may occur by ensuring pricing is based on a proper
trade-off between risks and returns on asset side, and looking for
longer term funding to mitigate the negative assets and liabilities
maturity mismatch.
Giving more emphasis on Retail/Personal finance division was

one of the major strategies following from the year 2016. Our
planned strategy resulted in 53% growth in interest income from
Retail segment to BDT 2.94 billion in 2017 which is 29% of the total
consolidated revenue earned by LBFL group for that year. 42% of Non-Interest Revenue (NIR)
the total interest income came from Retail finance segment which NIR grew at an average compound rate of 19.32% from 2013 to
held 41% of the Loan portfolio. 2017 supported by continuous progress in number of asset clients,
credit card operation and impact of conscious investment decisions.
SME finance division of LBFL has started to stretch its wings as part
In 2017, as a result of efficient strategic actions NIR increased by
of long term strategic goal of the group. Interest income from SME
76.68% to BDT 2,905 million.
division achieved a growth of 92% to BDT 832.68 million in 2017
from BDT 434.11 million of 2016.
Interest Expenses
In the year 2017 consolidated interest expenses increased by 22%
to BDT 4,838.84 million from BDT 3,964 million of 2016. During this
time total deposit and borrowings experienced a growth of 38%.
Despite growth of interest expenses is higher than last year, liquid
market scenario and efficient liability and treasury management
keep control the growth of interest expense by means of reduced
in average funding cost.
BDT Million
Y-O-Y Growth
Interest Expenses 2017 2016
Amount %
Term deposits 3,662.13 2,966.47 695.67 23%
Term loan- 309.70 428.52 (118.82) -28%
commercial bank
Zero Coupon Bond 82.31 187.94 (105.63) -56%
Short term loan 503.64 193.07 310.57 161%
Bank overdraft 106.08 79.17 26.91 34%

Call loan 58.80 60.89 (2.09) -3%
Term loan- 54.31 48.03 6.28 13%
Bangladesh Bank
Commercial paper 61.87 - 61.87 -
Bangladesh Bank REPO - - - -
The underlying drivers of NIR growth included:
Total Interest 4,838.84 3,964.08 874.76 22%  Investment income increased by 89.07% from BDT 484 million
Expenses
in 2016 to BDT 914 million in 2017. It includes BDT 771 million
from investment in shares, BDT 107 million of income from
Net Interest Income (NII) dividends earned from strategic investment portfolio and 36
LankaBangla was able to achieve 32% growth in NII in 2017. Even in million incomes from commercial paper.
excess liquidity regime where the industry is experiencing reducing  Fees and documentation income increased by 55% in 2017 to
trend of spread it is the growth of the volume and diversified asset BDT 392 million from BDT 253 million in 2016. Retail segment
portfolio which help us to maintain a sustainable growth of NII over continued to contribute a massive 73% of this revenue and the
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major contributors were Credit card, Home loan and Personal Y-O-Y Growth
loan. Operating Expenses 2017 2016
Amount %
 Membership fee and other income from Credit cards increased
by nearly 52% to BDT 151 million in 2017 from BDT 100 million Legal and professional
33.42 30.01 3.41 11%
fees
in 2016.
Postage, stamp,
Our NIR-to-Operating expenses ratio was 108.74% and NIR grew by 28.82 20.64 8.18 40%
telecommunication etc.
77% in 2017. It indicates efficiency gains and we are committed to Stationery, printing,
perform better in coming years. 66.04 47.49 18.55 39%
advertisement
Repairs, maintenance and
Investment Income depreciation 183.40 123.48 59.92 49%
9% of the total revenue for the year 2017 has come from investment Other expenses 828.07 585.65 242.41 41%
income. Strategic investment decision has paid off in terms of 212%
increase in Income from investment in shares, realizing more than Total Operating Expenses 2,671.18 1,999.17 672.01 34%
BDT 76 million of Provision for diminution in value of investments
and resulted in capital gain even in the reign of bearish capital The main expense growth contributors were:
market. Our Strategic Investments provide us with BDT 107 million  Staff related cost increased by 30%, comprising-
of dividend income in 2017.  Growth in number of employees to 832 by the end of
BDT Million
2017 from 673 at the same time in 2016
Income from Y-O-Y Growth
2017 2016  Growth in remuneration and other staff costs
investment Amount %
 Increase in incentives provided to employees in line with
Income from strong financial performance for the year 2017
770.75 246.76 523.99 212%
investment in share
 Rent, insurance and electricity expenses increased by 18%
Dividend income 107.10 155.63 (48.52) -31% along with 49% rise of Repairs, maintenance and depreciation
due to expansion of branch distribution network and
Commercial paper 36.36 80.49 (44.12) -55%
restructuring and extension head office premises
Coupon income from  Bigger business dealings, supporting enlarged number of
- 0.65 (0.65) -100%
treasury bond
clients, larger number of personnel raised cost of Postage,
Total Investment stamp, telecommunication etc. by 40% and Stationery,
914.22 483.53 430.70 89%
Income
printing, advertisement by 39%
 Other expenses increased by 41% in the year 2017 compared
to 2016. Major contributors were marketing expenses,
Legal charges, Business promotion, training expenses, office
maintenance
Provision charges on Loans and Investments

In LankaBangla Group we focus on quality of asset with great
consciousness. As a result of our rigorous before and after sales
monitoring NPL remained at 3.07 at the end of 2017 which was
3.53% in 2016 and 4.83% in 2013. Provision for Margin Loan
decreased by 88%, provision for leases and loans slightly increased
on the other hand provision for Investment reduced in 2017.
Provision charges for leases and loans for the year 2017 was BDT
248 million which was BDT 199 million in 2016. Provision charge
Operating Expenses for diminishing value of investments was negative BDT 76 million
Operating expenses growth of 34% to BDT 2,671 million in 2017 in 2017 i.e. there was a recovery of provision charged in previous
compared to BDT 1,999 million of 2016 is reflective of continuous years. As Capital market condition was improving, quality of Margin
investment in human resource to enrich human capital, expansion
of branch distribution network to cover more areas of the country
and to help the Company to mobilize more public funds and to
reach to more Retail and SME clients and investment in marketing
and promotional expenses.
BDT Million
Y-O-Y Growth
Operating Expenses 2017 2016
Amount %
Salary and allowances 1,310.87 1,004.84 306.03 30%
Rent, taxes, insurance, 220.56 187.07 33.50 18%

electricity etc.
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LankaBangla
Loans simultaneously enriched and provision charge requirement BDT Million

for Margin Loan reduced to BDT 36 million in 2017 which was BDT Y-O-Y Growth
314 million in 2016. Loans and Advances 2017 2016
(Portfolio) Amount %
Balance Sheet-Strong Metrics and well positioned Corporate Financial 16,316.44 21,150.72 (4,834.28) -23%
for Economic Headwinds: Services
Retail Financial
Loans and Advances Services 27,094.87 15,966.61 11,128.26 70%
The positive growth trend in loans and advances continued Auto Loan 6,164.33 4,110.06 2,054.26 50%
into 2017, resulting in four-year CAGR of 33.90%. In the year
2017 advances grew 29.86% to BDT 66,544 million excluding Home Loan 12,249.99 6,393.41 5,856.59 92%
intercompany loans and advances supported by gross new Personal Loan 5,802.19 3,413.09 2,389.10 70%
disbursement of BDT 56,726 million.
Credit Card 2,878.36 2,050.05 828.31 40%
SME Financial Services 15,948.71 6,905.10 9,043.61 131%
LBIL- Margin loan to 5,268.88 2,473.81 2,795.07 113%

share trading clients
LBSL- Debit balance of 1,915.46 4,748.06 (2,832.61) -60%
share trading clients
66,544.36 51,244.30 15,300.06 30%
Corporate portfolio has been reduced by 23% to BDT 16,316

million in 2017 compared to BDT 21,151 million of 2016.
Besides Term loans LBFL offers factoring, syndicated financing
arrangements and short term financing also to accomplish the
motive of providing corporate bodies need based services.
Corporate disbursements in the year 2017 were BDT 26,211
Million which was 8.17% slighter than BDT 28,544 million of
2016.
Retail loans and advances portfolio grew by massive 70% to BDT
27,095 million in 2017 which was BDT 15,967 million in 2016.
Retail loans comprises of auto loans, Home loans, Personal
loans and Credit Cards. Auto loan portfolio experienced a y-o-y
growth of 50% to reach BDT 6,164 million in 2017. Auto loan of
BDT 5,269 million has been disbursed in the year 2017 which
was 71% superior to last year’s BDT 3,090 million. Home loan
portfolio grows by 92% to BDT 12,250 million in 2017 compared
to BDT 6,393 million of 2016. Fresh home loan disbursed during
2017 was BDT 7,563 million which was 137% higher than 2016’s
disbursements of BDT 3,189 million.
Both the portfolio and disbursement grew intensively in the
year 2017 compared to the year 2016. At the end of the year
2017 Personal loan portfolio reaches to BDT 5,802 million
experiencing a 70% over BDT 3,413 million of 2016. BDT 4,439
million personal loans have been disbursed in the year 2017 SME portfolio more than doubled by the end of 2017 compared
which was 63% higher than that of 2016. to the year 2016. SME portfolio reached to BDT 15,949 million
grew at a rate of 131% from BDT 6,905 million of the year 2016.
Credit Card is a distinctive feature for LankaBangla Finance as We are focusing more on SME business and it was evident from
we are the only NBFI in the industry to deal with Credit Card disbursement of BDT 7,074 million to SME clients during the
Business. Credit card portfolio increased by 40% to BDT 2,878 year 2017.
million in 2017 from BDT 2,050 million of 2016. Credit Card
usage boosted up by 49% in 2017, during the year LankaBangla Margin loan is a product of LankaBangla Investment Limited.
Master and Visa Card uses reached the milestone of BDT 6,170 In the year 2016 the exposure of Margin Loan was BDT 2474
million which was BDT 4,134 million during 2016. million. As the capital market trended optimistic, margin loan
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became productive and improved the exposure. Hence, in 2017

margin loan portfolio increased by 113% to BDT 5,269 million.
Balance of share trading clients refers to the facility provided to
the clients by LankaBangla Securities Limited (LBSL) against the
purchase of shares in the secondary market. Debit balance to
clients reduced to BDT 1,916 million which was 60% lower than
that of 2016.
Funding and Liquidity

LBFL’s consolidated balance sheet remain well funded with deposits
and borrowings increasing 38% to BDT 70,116 million in 2017 from
BDT 50,908 million of 2016.
Deposit growth was supported by 29% growth in Term Deposit.
Compared to 2016 corporate department increased by 12% in Capital
2017, Retail and Bank deposit grew by 32% and 59% respectively.
LankaBangla Group remains well capitalized, with all capital
Overall Bank Borrowing increased by 71% in 2017 compared to that adequacy ratios well above the Basel II minimum regulatory
of 2016. Our strategy was to take the benefit of reduced rate of capital requirements. At LankaBangla, Capital Management
bank borrowing to cut down the overall cost of fund. policy sets out the principles and guidelines for effective and
prudent capital planning, usage and management.
LBFL maintained a sound liquidity position, with contingent liquidity
well in excess of prudential liquidity requirements. Tier I Core Capital of LBFL Group and LBFL as at 2017 were BDT
8,194 million and BDT 7,268 million respectively. LBFL’s core
BDT Million
capital increased by 17.80% in 2017 compared to that of 2016
Deposit and Y-O-Y Growth boosted by solid financial performance by means of Net Profit
2017 2016
Borrowings Amount % after tax of BDT 1,353 million. Group’s equity increased by 25%
supported by Consolidated Net Profit after Tax of BDT 1,926
Term Deposit 51,553 40,033 11,520 29%
million.
Corporate TDR 24,027 21,435 2,592 12%
Tier II Supplementary capital of the Group and LBFL comprises
Retail TDR 10,610 8,028 2,582 32% of General provision for leases and loans. As both the
SME TDR 75 - 75 75% disbursement and portfolio of leases and loans increased so did
Bank & FI 16,840 10,570 6,270 59% the requirement for general provisions. Supplementary capital
increased by 19% to BDT 534 million in 2017 from BDT 449
Bank Borrowing 18,564 10,875 7,689 71% million of 2016.
Bank overdraft 1,484 1,242 243 20%
Total eligible capital of the group stood at BDT 8,729 million in
Long term loan 3,205 1,689 1,516 90% 2017, 25% higher than that of BDT 6,987 million of previous
Call loans 1,280 980 300 31% year. LBFL’s total eligible capital increased by 17.87% to BDT
7,802 million in 2017 compared to BDT 6,619 million of 2016.
Short term 11,153 5,648 5,505 97%
borrowings Compared to 2016, Consolidated Risk weighted asset grew by
Zero Coupon 30% in 2017 and so does our capital requirement. We not only
942 1,317 (375) -28% maintain the required level of capital, we had a good surplus.
Bond
Commercial The surplus eligible capital of the group and the company at the
500 - 500 - close of business on 31 December 2017 were BDT 1,424 million
Paper
and BDT 1,196 million respectively.
Total Deposit and 70,116 50,908 19,208 38%
Borrowings
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Management Discussion and Analysis Financial Highlights
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FINANCIAL HIGHLIGHTS OF
LANKABANGLA GROUP
All figures in BDT million except (%)
Growth of 5 Year
Financial Position 2013 2014 2015 2016 2017 2017 over CAGR (%)/
2016 Average*
Total Assets 32,648 39,129 50,448 63,935 85,443 33.64% 27.19%
Total Liabilities 25,619 31,997 44,099 57,164 77,014 34.73% 31.67%
Business Disbursement 11,070 19,750 35,770 45,539 56,726 24.57% 50.46%
Property Plant and Equipment 291 311 1,292 1,430 1,762 23.24% 56.80%
Current Assets 19,281 13,316 19,146 33,088 35,318 6.74% 16.34%
Current Liabilities 14,965 9,381 17,301 29,043 31,959 10.04% 20.89%
Net current assets 4,317 3,935 1,845 4,045 3,359 -16.96% -6.08%
Non Current Assets 13,367 25,813 37,132 30,847 50,124 62.49% 39.16%
Long Term Liabilities 10,654 22,616 26,798 28,121 45,055 60.22% 43.40%
Loans and Advances 24,841 30,396 41,819 51,244 66,544 29.86% 27.93%
Term Deposits 10,827 16,683 29,992 40,033 51,553 28.78% 47.72%
Total Investment Portfolio 31,265 37,217 47,605 60,595 80,800 33.34% 26.79%
Operational Performance
Operating Revenue 5,189 5,100 6,237 7,306 9,981 36.62% 17.77%
Operating Expenses 892 1,285 1,612 1,999 2,671 33.61% 31.55%
Financial Expenses 2,731 3,033 3,715 3,964 4,839 22.07% 15.37%
Non Interest Revenue 1,433 1,135 1,449 1,644 2,905 76.68% 19.32%
Net Profit Before Tax 997 434 533 947 2,264 139.14% 22.75%
Net Profit After Tax 955 454 421 796 1,926 142.10% 19.19%
EBITDA 4,369 3,909 4,340 5,008 7,256 44.86% 13.52%
Turnover of Share Trading by LBSL 135,795 181,674 148,645 166,902 363,646 117.88% 27.92%
Financial Ratios
Gross Profit Ratio 52.63% 59.47% 59.57% 54.26% 48.48% -10.65% 54.88%
Operating Profit Ratio 30.18% 15.34% 14.59% 18.37% 24.76% 34.73% 20.65%
Return on Capital Employed 3.66% 1.41% 1.04% 1.55% 2.83% 83.05% 2.10%
Cash reserve ratio/ liquidity asset ratio (Required 2.5%) 2.58% 2.64% 2.51% 2.52% 2.92% 16.07% 2.63%
Statutory Liquidity Reserve (Required 5%) 6.52% 6.00% 5.05% 5.08% 5.10% 0.34% 5.55%
Capital Adequacy Ratio (2011: Test Run. Effct. From 2012) 20.75% 17.26% 13.41% 12.45% 11.95% -4.02% 15.16%
Gross Non performing assets to gross advances/Non 4.84% 4.05% 3.20% 3.22% 2.85% -11.36% 3.63%
performing loans (assets) to total loans (assets)
Cost to Income Ratio 36.29% 62.16% 63.92% 59.83% 51.95% -13.17% 54.83%
Current Ratio 1.29 1.42 1.11 1.14 1.11 -3.00% 1.21
Debt Equity Ratio 3.28 4.09 6.23 7.61 8.42 10.60% 5.93
Financial Expense Coverage Ratio 1.57 1.26 1.24 1.34 1.51 12.85% 1.39
Return on Equity (%) 14.34% 6.59% 6.37% 12.29% 25.66% 108.80% 13.05%
Return on Assets (%) 3.29% 1.26% 0.94% 1.39% 2.58% 85.39% 1.89%
Equity Parameters
Authorized Capital 3,000 3,000 3,000 3,000 10,000 233.33% 35.12%
Paid-up Capital 2,083 2,188 2,406 2,767 3,183 15.00% 11.17%
Shareholders' Equity 6,840 6,947 6,262 6,687 8,327 24.53% 5.04%
No. of Share Outstanding 208 219 241 277 318 15.00% 11.17%
Net Asset Value (NAV) Per Share* 21.49 21.83 19.68 21.01 26.16 24.53% 5.04%
Earnings Per Share (EPS)* 2.94 1.39 1.33 2.50 5.97 138.69% 19.37%
Market Price Per Share (Closing) 57.58 40.00 29.00 34.80 47.80 37.36% -4.55%
Price Earnings Ratio (Times) * 19.59 28.79 21.74 13.92 8.01 -42.45% 18.41
Dividend Payment (C- cash & B- bonus) 5% B 10% B 15% B 15% B 7.5% B - -
15% C 10% C 15% C 15% C 7.5% C - -
Profit Per Employee (mn) 1.79 0.59 0.55 0.84 1.60 90.62% -2.71%
Credit Ratings
Long Term A2 A1 AA3 AA3 AA3 AA3 -
Short Term ST-3 ST-3 ST-2 ST-2 ST-2 ST-2 -
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Net Profit before Tax (NPBT) increased significantly in 2017 registering a Net Profit after Tax (NPAT) registered a massive growth of 142.10% in
significant growth of 139.14% triggered mostly by increase in operating 2017 Increase in net operating income has mostly triggered the rise in
income. NPAT.
Growth in Operating Revenue in 2017 has been commendable. Operating Shareholders' Equity rose by 24.53% in 2017 to reach BDT 8,327 million.
revenue grew by 36.62% in 2017 triggered by interest income revenue, Profit has been the main contributor to the rise in equity.
investment income and brokerage income.
Huge growth in net profit (138.69%) results substantial upward NAV increased by 24.53% in 2017 to reach a figure of BDT 26.16. The
movement of EPS. increase is caused by the high increase in net assets of the Company
indicating effective management of resources thereby contributing to
value creation.
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Return on Assets (ROA) also saw a high increase in 2017 by 1.19 The sharp rise in Return on Equity (ROE) in 2017 has been triggered
percentage points due to sharp increase in net profit. by the massive increase in Net Profit after Tax during the year.
NPL has been at a decline since 2013 indicating quality portfolio Although CAR decreased in 2017 by around 0.6 percentage point, the
management by the Company. group always endeavors to keep more than adequate capital in order
to be compliant and risk free through continuous monitoring.
Costs to income ratio decreased in 2017 by 7.88 percentage points Profit per employee increased significantly from 2016 and has
as a result of increased operating income during the year while maintained a stable figure of 1.60 in 2017.
controlling the operating expenses from significant rise.
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FINANCIAL HIGHLIGHTS OF Annual Integrated
Report 2017

All figures in BDT million except (%)
Growth 5 Year
of 2017 CAGR
Financial Position 2013 2014 2015 2016 2017
over (%)/
2016 Average
Total Assets 26,630 32,353 44,615 57,622 78,248 35.79% 30.93%
Total Liabilities 22,315 27,705 39,156 51,453 70,980 37.95% 33.55%
Business Disbursement 11,070 19,750 35,770 45,539 56,726 24.57% 50.46%
Property Plant and Equipment 73 129 878 999 1,073 7.37% 95.51%
Deposits 10,876 16,717 30,081 40,033 51,553 28.78% 47.55%
Total Investment Portfolio 25,732 31,228 42,600 55,176 74,966 35.87% 30.65%
Operational Performance
Operating Revenue 3,490 4,090 5,298 5,997 7,819 30.39% 22.35%
Operating Expenses 407 718 957 1,248 1,634 30.89% 41.52%
Financial Expenses 2,409 2,631 3,219 3,565 4,542 27.40% 17.18%
Net Profit Before Tax 344 465 1,046 1,107 1,397 26.19% 41.95%
Net Profit After Tax 448 652 1,030 1,072 1,353 26.19% 31.82%
EBITDA 3,103 3,415 4,310 4,737 6,048 27.70% 18.16%
Financial Ratios
Gross Profit Ratio 30.96% 35.69% 39.25% 40.55% 41.91% 3.36% 37.67%
Operating Profit Ratio 19.28% 18.14% 21.19% 19.73% 21.01% 6.51% 19.87%
Return on Capital Employed 2.09% 2.36% 2.85% 2.22% 2.10% -5.31% 2.33%
Capital Adequacy Ratio (2011: Test Run. Effct. From 2012) 16.76% 15.07% 14.17% 13.23% 11.81% -10.73% 14.21%
Gross Non performing assets to gross advances/Non
4.84% 5.08% 3.72% 3.51% 3.07% -12.54% 4.04%
performing loans (assets) to total loans (assets)
Cost to Income Ratio 37.71% 49.18% 46.01% 51.35% 49.86% -2.89% 46.82%
Debt Equity Ratio 4.75 5.53 6.67 7.86 9.18 16.86% 6.80
Financial Expense Coverage Ratio 1.28 1.28 1.35 1.33 1.36 2.24% 1.32
Return on Equity (%) 10.95% 14.54% 20.38% 18.44% 20.13% 9.20% 16.89%
Return on Assets (%) 1.94% 2.21% 2.68% 2.10% 1.99% -5.05% 2.18%
Equity Parameters
Authorized Capital 3,000 3,000 3,000 10,000 10,000 0.00% 35.12%
Paid-up Capital 2,083 2,188 2,406 2,767 3,183 15.00% 11.17%
Shareholders' Equity 4,315 4,647 5,459 6,170 7,268 17.80% 13.92%
No. of Share Outstanding 208.35 218.77 240.64 276.74 318.25 15.00% 11.17%
Net Asset Value (NAV) Per Share * 13.56 14.60 17.15 19.39 22.84 17.80% 13.92%
Earnings Per Share (EPS) * 1.41 2.05 3.24 3.37 4.25 26.19% 31.82%
Market Price Per Share (Closing) 57.58 40.00 29.00 34.80 47.80 37.36% -4.55%
Price Earnings Ratio (Times) * 40.90 19.53 8.96 10.33 11.25 8.85% 18.19
Dividend Payment (C-cash & B- bonus) 5% B 10% B 15% B 15% B 7.5% B - -
15% C 10% C 15% C 15% C 7.5% C - -
Dividend Payout Ratio (%) 142.06% 97.67% 92.69% 89.06% 35.29% -60.38% -29.40%
Dividend Coverage (Times) 2.29 1.49 1.43 1.29 2.83 119.67% 5.46%
Dividend Yield (%) 3.01% 4.55% 10.34% 8.62% 3.14% -63.60% 5.93%
Profit Per Employee (mn) 1.37 1.38 1.98 1.59 1.63 2.07% 1.59
"Credit Ratings"
Long Term A2 A2 A1 AA3 AA3 - -
Short Term ST-3 ST-3 ST-3 ST-2 ST-2 - -
*restated
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In 2017 Total Assets grew by 35.79% compared to 2016 maintaining Investment portfolio has been growing at a rapid pace due to
an average growth of 30.93% over the last 5 years. It is a result of excellent growth in loan disbursement and vigilant investment
company's relentless effort to disburse quality loans and planned decisions. Total Investment portfolio grows by 35.87% in 2017 from
expansition of LBFL network. that of 2016 registering an average growth of 30.65% in last 5 years.
30.39% growth of operating revenue in 2017 over 2016 is evident Net Profit after Tax reaches to a figure of 1.353 million for the year
of a sound operating activities. Income has been boosted as a result 2017 registering a relatively higher growth of 26.19% over 2016.
of goodquality assets and effective management of PAR. Profit after tax has seen a growing trend since 2013.
Growth in net profit has resulted in the upward movement of EPS. NAV increased to 22.84 compared to 19.39 in 2016 indicating a
EPS grew by 26.19% in 2017 to reach 4.25. Healthy growth in EPS growth of 17.80% and an average growth of 13.82% over the 5
indicates the soundness of financial performance of the company. year period. Value per shares increases and it is evident that the
company is managing its resources effectively and efficiently to
create value towards the investors.
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Operating margin increased by 1.28 percentage points to reach Although the CAR has reduced to 11.81% in 2017 compared to
21.01% in 2017. This is mostly due to a higher increase in operating 13.23% in 2016, this is well above the Bangladesh Bank requirement
revenue during 2017 compared to the increase in operating revenue. of 10%. The Company always endeavors to keep more than adequate
capital in order to be compliant and risk free. Continuous monitoring
of capital adequacy is undertaken
Quality of loan portfolio has improved as is visible from the reduction Costs to income ratio decreased to 49.86% in 2017 compared to
of NPL ratio to 3.07% at the end of 2017 from 3.51% in 2016. 51.35% in 2016. The downward is mostly triggered by the significant
increase in operating revenue in 2017. In comparison, operating
revenue grew by a higher percentage in 2017.
Return on Average Assets declined slightly to 1.99% at the end of In 2017 ROE experienced a growth to reach a figure of 20.13%
2017 which was 2.10% in 2016. Decrease in ROA is caused by the compared to 18.44% in 2016. The ratio is evident of effective
high investments in total assets of the company in 2017. management of shareholders' funds thereby contributing to a rapid
growth in shareholders' returns.
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Management Discussion and Analysis Horizontal and Vertical Analysis
146
LankaBangla
HORIZONTAL
ANALYSIS
For the last 5 years
Consolidated Statement of Comprehensive Income
2017 2016 2015 2014 2013

Operating Income
Net interest 218% 166% 105% 91% 100%
Interest income 188% 151% 127% 106% 100%
Less : Interest expenses on deposits & borrowings 177% 145% 136% 111% 100%
Income from investment 122% 65% 58% 27% 100%
Commission, exchange and brokerage income 238% 117% 118% 142% 100%
Other operational income 412% 289% 218% 125% 100%
Total operating income 209% 136% 103% 84% 100%
Operating Expenses
Salary and allowances 295% 224% 186% 153% 100%
Rent, taxes, insurance, electricity etc. 249% 211% 180% 130% 100%
Legal and professional fees 195% 175% 115% 148% 100%
Postage, stamp, telecommunication etc. 274% 196% 162% 166% 100%
Stationery, printing, advertisement 322% 232% 196% 169% 100%
Managing director's salary and allowance 88% 144% 138% 116% 100%
Director fees and expenses 155% 168% 118% 101% 100%
Audit fees 181% 203% 111% 226% 100%
Changes on loan losses - - - - -
Repairs, maintenance and depreciation 253% 170% 151% 129% 100%
Other expenses 362% 256% 187% 136% 100%
Total operating expenses 299% 224% 181% 144% 100%
Net Operating Income 158% 86% 58% 50% 100%
Provisions for loans / investments 37% 71% 67% 62% 100%

Provisions for leases and loans -32% -49% 117% 11% 100%
Provision for margin loan -24% 0% -98% 30% 100%
Provision for diminution in value of investments -952% -221% 1243% 335% 100%
General provision for other assets - - - - -
Profit before tax and reserve 227% 95% 53% 43% 100%
263% -48% 263% -48% 100%
Provision for tax made during the year 1268% 563% 425% -58% 100%
Deferred tax expense or (Income) 20% 17% -1% -31% 100%
Net profit after tax 225% 101% 44% 48% 100%

Earnings Per Share (EPS) 203% 85% 45% 47% 100%
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31 December 31 December 31 December 31 December 31 December

2017 2016 2015 2014 2013
PROPERTY AND ASSETS
Cash 594% 360% 266% 174% 100%
Cash in hand 259% 428% 182% 88% 100%
Balance with Bangladesh Bank 595% 360% 266% 174% 100%
Balance with other banks and financial institutions 378% 185% 61% 81% 100%
Inside Bangladesh 378% 185% 61% 81% 100%
Outside Bangladesh
Money at call and short notice
Investment 156% 143% 124% 138% 100%

Government securities 0% 0% 0% 100% 100%
Other investments 218% 201% 174% 153% 100%
Leases, loans and advances 262% 202% 164% 120% 100%
Lease portfolio, term finance, short term loan, etc.
Fixed assets including land, building, furniture and fixtures 605% 491% 443% 107% 100%
Other assets 188% 148% 117% 142% 100%

TOTAL PROPERTY AND ASSETS 262% 196% 155% 120% 100%
LIABILITY AND SHAREHOLDERS' EQUITY
Liabilities 313% 227% 174% 127% 100%
Borrowings from Bangladesh Bank, other banks and
160% 94% 78% 101% 100%
financial institutions
Term deposits 476% 370% 277% 154% 100%
Other liabilities 216% 199% 160% 138% 100%
TOTAL LIABILITIES 301% 224% 172% 128% 100%
Shareholders' Equity 122% 98% 92% 89% 100%
Paid up capital 153% 133% 115% 105% 100%
Share premium 15% 0% 100% 100% 100%
Statutory reserve 167% 167% 152% 120% 100%
General reserve 3214% 2623% 118% 115% 100%
Fair value measurement reserve 73% 68% 0% 0% 100%
Retained earnings 82% 54% 59% 68% 100%
Non controlling interest 54% 45% 46% 67% 100%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 262% 196% 155% 120% 100%
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VERTICAL
ANALYSIS
For the last 5 years
Consolidated Statement of Comprehensive Income
2017 2016 2015 2014 2013

Operating Income
Net interest 22.42% 23.24% 17.19% 18.29% 19.76%
Interest income 70.90% 77.50% 76.76% 77.75% 72.39%
Less : Interest expenses on deposits & borrowings 48.48% 54.26% 59.57% 59.47% 52.63%
Income from investment 9.16% 6.62% 7.00% 3.90% 14.41%
Commission, exchange and brokerage income 11.38% 7.68% 9.01% 13.28% 9.21%
Other operational income 8.56% 8.21% 7.23% 5.07% 3.99%
Total operating income 51.52% 45.74% 40.43% 40.53% 47.37%
Operating Expenses
Salary and allowances 13.03% 13.52% 13.17% 13.20% 8.50%
Rent, taxes, insurance, electricity etc. 2.21% 2.56% 2.56% 2.25% 1.71%
Legal and professional fees 0.33% 0.41% 0.32% 0.50% 0.33%
Postage, stamp, telecommunication etc. 0.29% 0.28% 0.27% 0.34% 0.20%
Stationery, printing, advertisement 0.66% 0.65% 0.64% 0.68% 0.39%
Managing director's salary and allowance 0.11% 0.24% 0.27% 0.28% 0.23%
Director fees and expenses 0.02% 0.04% 0.03% 0.03% 0.03%
Audit fees 0.01% 0.02% 0.01% 0.03% 0.01%
Changes on loan losses 0.00% 0.00% 0.00% 0.00% 0.00%
Repairs, maintenance and depreciation 1.84% 1.69% 1.76% 1.84% 1.40%
Other expenses 8.26% 7.96% 6.81% 6.05% 4.39%
Total operating expenses 26.76% 27.37% 25.85% 25.19% 17.19%
Net Operating Income 24.76% 18.37% 14.59% 15.34% 30.18%
Provisions for loans / investments 2.07% 5.42% 6.04% 6.78% 10.78%

Provisions for leases and loans 2.49% 2.73% 2.13% 3.27% 5.36%
Provision for margin loan -0.76% -1.60% 4.49% 0.52% 4.63%
Provision for diminution in value of investments 0.37% 4.29% -0.44% 3.00% 0.79%
General provision for other assets -0.02% 0.00% -0.14% 0.05% 0.18%
Profit before tax and reserve 22.68% 12.96% 8.54% 8.50% 19.22%
1.12% -0.28% 1.79% -0.40% 0.82%

Provision for tax made during the year 3.35% 2.03% 1.80% -0.30% 0.51%
Deferred tax expense or (Income) 0.03% 0.04% 0.00% -0.10% 0.31%
Net profit after tax 21.56% 13.24% 6.75% 8.90% 18.40%
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2017 2016 2015 2014 2013

PROPERTY AND ASSETS
Cash 1.35% 1.09% 1.02% 0.86% 0.60%
Cash in hand 0.00% 0.00% 0.00% 0.00% 0.00%
Balance with Bangladesh Bank 1.35% 1.09% 1.02% 0.86% 0.59%
Balance with other banks and financial institutions 10.39% 6.78% 2.83% 4.88% 7.20%
Inside Bangladesh 10.39% 6.78% 2.83% 4.88% 7.20%
Outside Bangladesh 0.00% 0.00% 0.00% 0.00% 0.00%
Money at call and short notice
Investment 6.40% 7.86% 8.67% 12.40% 10.77%

Government securities 0.00% 0.00% 0.00% 2.59% 3.09%
Other investments 6.40% 7.86% 8.67% 9.82% 7.68%
Leases, loans and advances 77.88% 80.01% 82.90% 77.88% 77.87%

Lease portfolio, term finance, short term loan, etc.
Fixed assets including land, building, furniture and fixtures 2.06% 2.23% 2.56% 0.80% 0.89%
Other assets 1.92% 2.01% 2.02% 3.18% 2.67%
TOTAL PROPERTY AND ASSETS 100.00% 100.00% 100.00% 100.00% 100.00%
Liabilities 82.06% 79.49% 77.30% 72.75% 68.69%

Borrowings from Bangladesh Bank, other banks and financial
21.73% 16.98% 17.85% 30.01% 35.52%
institutions
Term deposits 60.34% 62.51% 59.45% 42.74% 33.16%
Other liabilities 8.07% 9.94% 10.11% 11.31% 9.78%
TOTAL LIABILITIES 90.14% 89.43% 87.41% 84.06% 78.47%
Shareholders' Equity 9.75% 10.44% 12.41% 15.62% 20.95%

Paid up capital 3.72% 4.32% 4.77% 5.61% 6.38%
Share premium 0.19% 0.00% 2.16% 2.79% 3.34%
Statutory reserve 1.28% 1.70% 1.96% 2.00% 1.99%
General reserve 1.72% 1.88% 0.11% 0.14% 0.14%
Fair value measurement reserve 0.06% 0.07% 0.00% 0.00% 0.21%
Retained earnings 2.77% 2.47% 3.42% 5.08% 8.88%
Non controlling interest 0.12% 0.13% 0.17% 0.32% 0.58%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 100% 100% 100% 100% 100%
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Management Discussion and Analysis Value Creation Structure
150
LankaBangla
VALUE CREATION
STRUCTURE
Inputs:
Our Value Creation Structure is inspired by
our Vision, mission and Core Values. “Creating
Value to each stakeholder and the economies Financial Capital (page no. 159)
and the society in which we operate” is our  Equity
Corporate Philosophy.  Deposite & Borrowings
 Profitability
To implement the Corporate Philosophy, we
are drawing on our strengths, and taking into
consideration the growing sophistication of Manufactured Capital (page no. 160)
customer needs and the changes occurring in  Branches
the business and social environment.  Call Centers
 IT Infrastructure
We utilize our resources (Inputs) through our
Complexities , interdependencies and tradeoffs
business activities to generate outputs not
only in form of Product and service offering to
our customers but also valuable outcomes for Intellectual Capital (page no. 161)
other stakeholders.  Processes
 Culture
 Knowledge
Our business model requires us invest heavily  In House Software
on IT infrastructure and Human development.  eLearning
Sustainable IT infrastructure helps us to
extend our presence not only physically
but also virtually. Proper Human Resource
development will boost up the social and
relationship Capital as well as Intellectual Human Capital (page no. 159)
Capital to ensure business growth through  Experienced and competent
human resources
professional networks, innovation in offerings
 Technical and managerial skills
and to attain process efficiency.
In the process, we ensure our business

activities are aligned with our core values
and well guided by our corporate governance Social & Relationship Capital (page no. 161)
framework.  Investment in brand awareness
 service assurance
 Uncompromised customer service
 CSR Activities
Natural Capital (page no. 162)

 Utilities
 Policy inputs and initiatives
 from the company
Useful references:
Business Model How we create Key Resources Economic Business Environment Strategic Focus
page no. 152 value of LBFL Outlook Analysis Areas
page no. 154 page no. 158 page no. 171 page no. 174 page no. 183
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Outcomes:
Operating environment and competitive landscape Financial Capital

 25.66% Consolidated Return on Equity
(page no. 177 - 179)
 142% Growth in Consolidated NPAT
 19.19% 5-year CAGR in NPAT growth
 27.93% 5-year CAGR in portfolio growth
Vision (page no. 01) Mission (page no. 01) Values (page no. 01)  Quality of Asset Portfolio maintained as
NPL ratio reduced
Manufactured Capital
Governance Structure (page no. 70)  Geographically well distributed
network coverage
Risks and opportunities Strategic focus  Efficiency gain in operating capability
(page no. 174 - 177) (page no. 183)  Reduction in TAT (turnaround time)
Intellectual Capital
 Speed of approval process and
Business Model (page no. 152) operations improved over the year
 FinSmart
Activities (page no.154) Outputs (page no.154)  iBroker
 Trade Express
Human Capital
Performance Outlook  BDT 1,359 million paid for Employee
(page no. 131 - 145) (page no. 171 - 173) Benefit
 32,334 hours of training
 Incentive bonus as 8% of NPBT
 Rise in employee productivity
 Career Advancement
Social & Relationship Capital

Required changes in business model in  Dividends paid to shareholders
response to market forces and pressures  Paid Internship opportunities for Fresh
Graduates
 Support for the underprivileged
 Rehabilitation programs
Natural Capital
 LEED Certified LankaBangla Tower
 Green Branch
 Growth in Green Financing
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Management Discussion and Analysis Business Model
152
LankaBangla
BUSINESS
MODEL
The primary role of LBFL is to facilitate the movement of capital and flow of money from where it is to where it is required to
meet stakeholder needs. It is through the meeting of these needs that we enable a thriving society and create long-term value.
Our business model can be understood from multiple perspectives. The primary lens is through the various activities that a
financial services institution performs.
Key Stakeholders
Key Activities
 Staff
 Deposit & Borrowing from Individuals, Corporate & Banks
 Clients  Loan to Businesses and consumers
 Shareholders  Credit Cards
 Financial services including syndication and factoring
 Suppliers & Business Partners  Brokerage Services
 Lenders  Research services
 Investment banking services
 Regulators Business
 Advisory services
Subsidiaries How We Divisions
 Society  Portfolio management of LBFL Create Value of LBFL
 Asset management page no. 23 page no. 154 page no. 19
 Environmental Groups
Stakeholders Analysis
page no. 163
Key Resources
 Financial Capital
 Manufactured Capital
 Human Capital
 Intellectual Capital
 Social & Relationship Capital Key Resources of LBFL
 Natural Capital page no. 158
Cost Structure
 Interest Expenses
 Personnel Expenses
 Operating Expenses
How We Create Value
 Tax page no. 154
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Value Propositions
 Client centered innovation Customers Segments
 Grow our business network Customer Relationships  Corporate Borrowers
 Investing in our staffs  Need based products  Corporate Depositors
 Delivering consistently to  Before & After sales services
our shareholders  Retail Borrowers
 Advisory support to clients
 Partnering with our  Customer Reward  Retail Depositors
regulators
 Customer awareness program  Consumers
 environmental awareness
 Social Contribution  Suppliers
 Online trading services
Stakeholders Analysis Product Portfolio  Traders
page no. 163 page no. 30
 SME
Delivering Value through
Our Business  Investors
page no. 156
Business Divisions
Value Added Statements of LBFL
HR Accounting Subsidiaries of LBFL

page no. 186
Channels Manufactured page no. 23
Capital
 Branch offices page no. 160
 PMOs
CSR Product Portfolio
page no. 203  SME Booth page no. 30
 Call Centers Branches and
Subsidiaries
 Online Trading Portal page no. 14
Contribution
to Government
Exchequer
page no. 211
Revenue Streams
Green Banking
page no. 200  Interest Income
 Investment Income
 Fees & Commission Income
How We Create Value
 Other Operating Income page no. 154
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Management Discussion and Analysis How We Create Value
154
LankaBangla
HOW WE
CREATE VALUE
We manage our business activities in a way that connects profitability to socially beneficial outcomes.
1
Lending enables individual customers to create wealth and generate income,
helps business clients remain sustainable and supports employment and Lend money to clients,
economic growth in Bangladesh. Regulatory capital requirements and risk which creates assets from
appetite limit our ability to lend, and deteriorating economic conditions which we derive interest
may limit the ability of clients to borrow or service their loans. income over time
Investment
2 in Govt.
securities, FDRs,
Investments support economic activity and enable wealth strategic and trading
investment in primary
creation. However, regulatory capital and risk appetite limits
1
and secondary market create
our ability to invest to ensure we deliver appropriate risk- group’s investment asset and
adjusted returns. generate revenue in the form of
investment income including
revenue & capital
gain
2
3
Through traditional financial services we attempt to Provide traditional
connect the lives of our clients with progress and financial services and
3
happiness. Our knowledge-based services, which
include corporate advisory and loan structuring
knowledge based services
to clients BUSINESS
services, allow our clients to benefit from our
experience and track record on the country.
4
4
Through our brokerage services we offer clients with Brokerage and underwriter
hassle free online trading facilities, offer guidance and services generate income in
advice, provide access to our valuable research and help the form of brokerage and
them to achieve their business objectives. underwriting commission
5
Credit card operation
5 generate assets from
which we derive interest
income and also served as a
Credit Cards enable the card holder facility of not having to carry cash source of membership and other
in pocket everywhere, providing safer interest free purchase facility up fees related to cards
to 45 days, installment facilities, discounts and rewards. Most importantly it
facilitates the card holders with emergency cash.
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Income Expenses Impairment
Taxes to Dividend to Retained for

Government Share holders reinvestment
Invest in our
operation including
physical and IT infrastructure,
to enhance our capabilities 6
and to improve operational
Various activities contribute towards revenue from other
efficiency
Investment
sources. Through our portfolio & issue management,
in our people corporate finance and other advisory services we tend
to align them to our to maximize the return of our clients and help them act
as a link towards investment market. Our research based
10 objective of consistently
delivering excellent client advisory services helps clients to get the best value for their
investments.
experiences through efficient
back and front office services
7
9 Funding provides our depositors and lenders with returns
while protecting against the erosion of capital due to
Impairment
inflation. We need to meet liquidity requirements (CRR &
charges on leases, SLR) to protect depositor funds, our own sustainability and
loans & advances refer to that of the broader financial system. Cost of funding depends
ACTIVITIES
general and specific provisions
against loans & advances on the interest rate regime.
8 FID Circular No. 08, dated 03
August 2002, FID Circular No.
11, dated 31 October 2005, and 8
FID Circular No. 06, dated 20
August 2006. Impairment charges Impairment charges on Lease, loans & advances refer to
on investments refer to the
provisions against diminishing general and specific provisions against loans & advances FID
value of investments Circular No. 08, dated 03 August 2002, FID Circular No. 11,
dated 31 October 2005, and FID Circular No. 06, dated 20
7 August 2006. Impairment charges on investments refer to
the provisions against diminishing value of investments.
Source funding
from clients deposits,
institutional deposits and bank 9
6 borrowing to enable lending,
creating liabilities that As a significant employer we hire locally, wherever
generate interest expense possible, and through our activities sustain other jobs in
Revenue local economies. Training and development enhances the
from other
sources linked with level of financial services and related skills in Bangladesh.
portfolio and issue Digital transformation in financial services requires greater
management, corporate investment in people which includes hiring new skills and
finance and other advisory training interventions for current employees.
services, advertisement
and circulation income, gain
on sale of assets and 10
miscellaneous
activities Investing in our operations enables us to continue meeting
our clients’ needs, contribute positively to host economies
and strengthen our competitive position. Although our
investment in technology is currently reducing our return
on equity (ROE), it will ensure future income-enhancing
opportunities as well as access to new markets, thereby
supporting our growth and sustainability.
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Management Discussion and Analysis Delivering Value through Our Business
156
LankaBangla
DELIVERING VALUE
THROUGH OUR BUSINESS
Group LBFL LBSL LBIL LBAMCL
Uncompromised and Country’s Number one Premier investment Official asset

well diversified array leading provider brokerage house in bank in the country management wing
of financial services of integrated the country. LBSL providing corporate of LankaBangla
Brokerage Services financial services. is crowned as the advisory, issue group, and is
Operation LankaBangla is largest in terms of management deeply committed
Overview Asset Management the lone Financial transaction value for and portfolio to providing client
Research based Institute that offers the 12th consecutive management driven solution
cards and provides time in DSE and 13th services. It is a fully and superior
Advisory services
third party card in CSE in 2017. It owned subsidiary of risk adjusted
processing services has a fully phased LankaBangla Finance. performance
through its state- research unit which LBIL has positioned to its valued
of-the-art card is engaged in both itself prominently clients. LBAMCL is
software. It has wide macroeconomic in investment focused to meet
spectrum of product and microeconomic banking arena of the professional
range that can cater research. LBSL Bangladesh through investment
to any demand of published a monthly its wide range of management
a client whether research paper services including demand of a wide
a client is person namely “Market Primary Market range of Investors.
having personal Pulse” which is Services, Investment
requirement or a considered the Banking Services
corporate house with only research and Portfolio
business expansion based capital Management
plan. Its Liability market journal of Services.
Management the county. LBSL is
division offers a wide the first brokerage
range of deposit house of the county
products which can offering Bloomberg
be both beneficial services to its client.
and profitable as per LBSL has two
the client’s needs. subsidiaries:
The unit provides
high quality services * LankaBangla
coupled with Information Systems
maximum security. Limited and
*BizBangla Media
Limited
2,201 1,828 305 51 17

Staff
Total Assets
100% 84.07% 11.60% 3.21% 1.12%
Revenue
100% 61.89% 37.60% 0.20% 0.32%
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Group LBFL LBSL LBIL LBAMCL
 Diversifying  Distinctive client  Providing  Providing Value  Extensive

Portfolio with centered product efficient trade added service research
sustainable experience. management to client e.g. and strong
product  A rigorous service to all Compliance fundamental
innovation approach to clients with least guideline, IPO analysis to
Strategic Readiness,
 Creating capturing cost. achieve the best
Focus Area Customized
Convenience for circle and  Enabling client result in close
Equity Financing end fund.
our Customer interdependen- with best strategy.
 Triple bottom cies between convenience to  Meeting the
client segments.  Offering wide heavily growing
line market through
range of
 Create a  Robust risk Internet trading demand of
investment
Sustainable management system. Islamic Shariah
banking service
Brand supporting  Updating client to institutional (IS) based
strong product with best client seeking to products
 Prudent with carefully
Balance Sheet niches. information and raise finances
 A sustainable research possible for business designed product
Management line.
strength to take the best development, to
in liability investment merge with or  Minimizing the
management. decision. acquire another clients’ funding
business, to volatility while
 Collaborative and  Offering multi- re-structure
people centered channel e-trading systematically
for better improving the
culture. to its customers performance, or
(web, mobile, funding positions
to grow business of their portfolios
and client server) by exploring new
and advantages and providing
territories.
of Multi Asset research tailored
 Sharing the best to the specific
Class (Equity, experience with
Derivatives, needs of the
institutional organizations
Bond, client seeking
Commodity, etc.) while managing
to raise funds
trading option, Provident fund,
through Issue
smart order Pension fund and
Management,
routing, multiple Capital raising & Gratuity fund.
exchanges and Private Placement  Providing advice
Cross Border business. on appropriate
supported  Providing retail strategic asset
application, MIS client with best allocation
& centralized risk capital market strategies on
management. exposure the basis of risk
through its two return profile
unique product and different
“AlphaPlus” and constraints of the
“LankaBangla investors
Nishchinto”.
2.58% 1.99% 7.91% 0.14% 0.68%

ROA
ROE
25.66% 20.13% 18.60% 0.98% 0.70%
NAV
26.16 22.84 17.45 2.67 20.41
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Management Discussion and Analysis Key Resources of LankaBangla
158
LankaBangla
KEY RESOURCES OF
LANKABANGLA
Financial Capital
 Consolideted PAT BDT 1,926
million (LBFL BDT 1,352
million)
 Consolideted Shareholders'
Equity BDT 8.3 billion
 Total Deposit & Borrowings 70
billion
 Consolidated Fund Under
Management BDT 152 billion
Human Capital
 837 talented employees
(FTE & BSO)
 Human Capital of BDT
21.61 billion
Manufactured Intellectual Capital

Capital  Leadership
 25 LBFL Branches in areas such
along with a SME as corporate
booth and 10 finance, personal
LBSL Branches and Auto loans
 24/7 Call Center  Leading
 State of the art brokerage house
online trading in terms of
window transaction both
in DSE & CSE
 Only NBFI in
Bangladesh
to have Card
operation
Social & Relationship Natural Capital

Capital  Green Financing
 Stakeholder  Green Banking
engagement initiatives
 Voluntary
contributions towards
Corporate Social
Responsibility (CSR)
 Committed towards
sustainability
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FINANCIAL CAPITAL
The money we obtain from providers of capital that we use to support our business activities and invest in our strategy. Financial
capital, which includes reserves generated through share capital, other equity-related funding and retained profits generated from
our operations, is used to fund our business activities.
BDT Million
Growth
2017 2016
Amount %
Shareholders' Equity 8,327.00 6,686.61 1,640.39 25%
Growth
Net Profit After Tax 2017 2016
Amount %
LBFL 1,352.79 1,072.05 280.74 26%
Group 1,926.29 795.64 1,130.65 142%
Growth
2017 2016
Amount %
Term Deposit 51,552.81 40,033.00 11,519.81 29%
Borrowing from BB and other Banks & FIs 18,563.69 10,875.00 7,688.69 71%
Total Deposit and Borrowing 70,116.49 50,908.00 19,208.49 38%
Growth
2017 2016
Amount %
Cash & cash equivalents 10,030.21 5,043.58 4,986.63 99%
Investments 5,469.17 5,036.65 432.52 9%
Lease, loans & advances 66,544.36 51,244.30 15,300.06 30%
Total deposit & borrowings 70,116.49 50,908.00 19,208.49 38%
Fund Under Management 152,160.23 112,232.53 39,927.70 36%
HUMAN CAPITAL
Our people and how we select, manage and develop them. This enables them to use their skills, capabilities, knowledge and
experience to improve and develop products and services that meet the needs of our clients across the diverse regions in which
we operate.
BDT Million
2017 2016
Total employee benefits 806.28 652.45
Training Cost 12.74 11.01
Employee Benefit Per Employees 1.08 1.09
Training Cost per Employees 0.017 0.016
Gross Revenue per employee 9.48 8.92
Total Expenses per employees 7.49 7.16
Operating cost per employee 1.98 1.86
Operating profit per employees 1.99 1.76
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MANUFACTURED CAPITAL
The tangible and intangible infrastructure that we use to conduct our business activities, including our infrastructure, network,
information technology (IT) assets, and the national infrastructure of the country in which we operate.
Our parent company LBFL has 25 Branches and our major subsidiary LBSL has 10 branches distributed all over Bangladesh to cover
more horizon and to serve greater number of people with our valued services. We invested substantial amount in Information
Technology to get better efficiency in operation that resulted in more comfortable services for our valued clients. Online trading
window of LBSL provides its clients with easy access to the stock market from remote places and facilitate them with hassle-free
trading services.
We are committed to further strengthen our branch network to supersede the potential for expanding our footprint in new frontiers.
We are also committed to cater more investment in information technology to increase our service efficiency and to achieve the
vision of becoming the most preferred financial service provider in Bangladesh.
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INTELLECTUAL CAPITAL
Intellectual capital is the group of knowledge assets that are attributed to our group and most significantly contribute to our
improved competitive position by adding value to defined key stakeholders. The knowledge of our people and our intellectual
property, brand and reputation, which is closely related to financial, human and manufactured capital given the nature of our
businesses, provide us with competitive advantage in the industry.
Culture
Physical
Stakeholder infrastructure
Human
Resource
Financial
success
Intellectual
Property
Value creation map as figured above shows the pathways of and in the group’s revenue credit card segment contributed
how value is created in LBFL. Knowledge assets are represented BDT 523 million of gross revenue which was 5.24% of the
in bubbles linked with arrows. The size of individual bubbles total gross revenue of LBFL group for the year 2017.
represents stocks of particular knowledge assets in terms of
strategic importance and arrows of different thickness show the SOCIAL AND RELATIONSHIP CAPITAL
transformations and relationships between knowledge assets Social and relationship capital refer to the cooperative
and stakeholder needs. relationships with our customers, clients, capital providers,
Our intellectual capital along with our restructured infrastructure regulators and other stakeholders that we create, develop and
maintain to remain commercially and socially relevant, and
helped us by means of:
operate as a responsible corporate citizen.
 Achieved market leadership in areas such as Auto loans,
Personal loan. Corporate Social Responsibility (CSR) of LankaBangla is a form
of corporate self-regulation integrated into our business model
 LBSL is the leading brokerage house of the country in terms
based on the objective of good business for good society. We
of transaction both in DSE and CSE. LBSL transacted 7.64%
focus on social and environmental concerns in all business
and 10.88% of total transaction of DSE and CSE respectively.
operations and interactions with its stakeholders including
Transaction volume of LBSL for the year 2017 in DSE and
shareholders, customers, employees, suppliers, business
CSE was BDT 331 billion and BDT 32 billion respectively.
partners, local communities and other organizations.
 LBFL is the only NBFI in Bangladesh having Credit Card
operation. We are one of the leading market players in With our CSR policies & principles, our organization
credit card business. Including both MasterCard and VISA believes in achieving a balance of economic, environmental
our credit card usage in the year 2017 was BDT 6,170 million and social imperatives (“Triple-Bottom-Line- Approach”)
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LankaBangla
besides safeguarding interest of stakeholders. We have also funded refinance from Bangladesh Bank under the
considerablyachieved efficient business operations and ‘Refinance Scheme of Brick Kiln Efficiency Improvement.
conscience corporate governance and compliance to facilitate  Assisting the entrepreneurs of the relevant businesses avail
smooth and effective business. As a result we have been able to the Bangladesh Bank own funded refinance in the specified
contribute towards a sustainable society. LankaBangla through
sectors as per the BB guidelines.
its Foundation extends its support for underprivileged people of
the community in particular to ensure their education, health We take every effort to delight our clients being the growth
and living. partner in financing environment friendly products or initiatives.
Followings are some of the CSR activities we performed in the LankaBangla takes pride in being one of the financiers of a
year 2017: project having one of the largest biological Effluent Treatment
 Supporting education of underprivileged brilliant students Plant (ETP) of the world, the first auto brick manufacturing
project to implement flexible fuel technology trapping harmful
 Financial assistance for education for Children of deceased
CO2 emissions and also to trade Certified Emissions Reductions
Ex-Officers
(CERs) to the World Bank, country’s first lube-recycling plant
 Protecting Environmental & Ecological Degradation through
and so forth. Green financing has been growing steadily in our
Tree Plantation portfolio.
 Support for local community to protect from Cold Wave
We have established our office environment and only allow
 Creativity and Cultural Development of children through art
rational use of energy and promote the spirit of environment
competitions
friendly action plans. Our policy allows only energy savings
bulbs at all of our service points and Head Office. While
NATURAL CAPITAL furnishing our office premises we use ISO certified paints. On
top of that, LankaBangla introduced automated e-alert system
Natural Capital refers to the natural resources on which we
to ensure secured financial information flow to its clients in
depend to create value and returns for our stakeholders. As
a financial service group we always carry a positive mentality Bangladesh. The launch of e-mail based Customer Statement
to deploy our financial capital in a way that promotes the Delivery System, added an important service to support the
preservation, or at least minimizes the destruction, of natural clients’ needs, providing superior customer service to ensure
capital. delivery of account statements and transaction advices to
the designated e-mail addresses of clients on time. This new
LBFL being Participating Financial Institution (PFI) of the system also helps to protect the environment by eliminating
Investment Promotion and Financing Facility (IPFF) assist the paper-based activities at office, protecting and preserving
clients to obtain the low cost funding through Green Banking & our environment for the next generation. In future we dream
CSR Department of Bangladesh Bank: to enhance our effort on preserving ecosystems, land air and
 Assisting the green bricks manufacturer avail the ADB water, in line with our broad corporate mission we defined.
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Management Discussion and Analysis Stakeholders Analysis
163
STAKEHOLDERS Annual Integrated
Report 2017
ANALYSIS
We recognise that we compete and operate on the basis of trust, and that it is our stakeholders who are the ultimate arbiters of our
legitimacy, and therefore our sustainability.
Our stakeholders are those individuals or organisations who have direct or indirect interest in our success or failure and whose opinions
and actions can impact our ability to execute our strategy and conduct our business activities and without whose continuing participation,
LBFL cannot survive as a going concern. For reporting purpose, we identified following parties as our key stakeholders, from a sustainability
perspective.
Customers Employees
Investors/ Suppliers
Shareholders and business
partners
Board Lenders
members
Environmental Regulators
groups
Society
Influence by
LBFL’s Influence
Stakeholder Importance of Stakeholder Stakeholder
on Stakeholder
on LBFL
Investors remain LBFL’s key stakeholder, who having invested
Investors/ capital, requires information on a continuous basis to
High High
Shareholders track LBFL’s performance and achievements in enhancing
shareholder wealth.
We consider customers as the bread and butter of LBFL’s
business, who remain interested as they transact with LBFL
Customers on an ongoing basis. It is important for LBFL to sustain High High
business and build bonds with them and also to attract new
customers.
Employees are considered LBFL’s most valuable asset and
key to LBFL’s continued success. Employees are deemed key
stakeholders as they drive LBFL’s business forward. They
Employees High High
wish to grow with the Company and develop their careers
to that they aspire to be, hand-in-hand, whilst the Company
progresses.
Material suppliers have become increasingly important
Suppliers &
to LBFL with the expansion of its network and increasing Medium Medium
Business partners
requirement for stationery and other related supplies.
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LankaBangla
Influence by
LBFL’s Influence
Stakeholder Importance of Stakeholder Stakeholder
on Stakeholder
on LBFL
Funding providers, mostly LBFL’s banking partners are an
important component of LBFL’s business as they support
Lenders LBFL in meeting funding needs, when need arises. It is High Medium
necessary to sustain a continued relationship, which will
yield mutual benefit for both parties.
As a listed Finance Company and a holder of public deposits,
various regulatory bodies continue to be interested to know
Regulators High Medium
LBFL’s progress, to establish level of safety, soundness and
compliance status.
Society has varying expectations of LBFL especially

from a broader sustainability perspective. Apart from
Society Medium Medium
financial needs, they require corporates to act in a socially
responsible manner, for societal benefit.
In an era where protection of environment and its resources

Environmental has become vital, LBFL considers environment aspects of
Medium Low
Groups high importance, particularly when LBFL continues to build
greater presence across the country.
Board members are part of the investors/shareholders. But

Board Members for the roles and responsibilities, Board members remain High High
vital for LBFl’s success.
LBFL and its stakeholder’s relational influential matrix can be chalked out as follows:
 Investors/ Shareholders
Customers
High

 Employees
Influence by LBFL on Stakeholder
 Board Members
Medium
 Suppliers & Business partners  Lenders

 Society  Regulators
Low
 Environmental Groups
Low Medium High
Influence by Stakeholder on LBFL
Investors/Shareholders
Investors/Shareholders are the provider of financial capital to remain fully transparent in our communication and disclosure
the group. with the investment community.
We strive to be a great place to invest – providing attractive and LBFL has a total 15,326 shareholders with 82.08% domestic
sustainable financial returns, protecting against downside risks holding and 17.92% foreign holding. Details of shareholding
and unlocking growth opportunities. At the same time we will structure is provided in page no 39 of this report.
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Annual Integrated
Report 2017
Shareholders needs and expectation  Financing the aspirations of clients, while protecting against
over indebtedness.
The core needs of our shareholders are as follows:
 Providing convenient access to LBFL’s financial services with
 Relevant timeous information on our strategy, prospects less complexity and improved flexibility.
and financial and non-financial performance so that the
LBFL group can be fairly valued and appropriate credit  Protecting clients and their assets through secured IT
ratings assigned systems and infrastructure.
 Consistent financial performance, delivering attractive  Providing value added services that are competitive and
returns (increasing ROEs) and solid dividend income, transparent in pricing.
underpinned by a sound balance sheet  Providing sound financial advice and financial education.
 Good and experienced management
 An attractive and sustainable growth strategy How did we deliver value to our customers in 2017
How did we deliver value to our shareholders in 2017 Emerging and commercial business unit constantly striving to
provide innovative financial solutions to meet working capital
 Achieved economic value addition of BDT 1,417 million in needs of our existing and prospective clients. With this intent
2017 LBFL has designed products like Factoring, Reverse factoring,
 Consolidated Net profit was BDT 1,926 million distributor finance etc.
 LBFL achieved net profit after tax of BDT 1,353 million in
solo basis Project and structured finance unit comprising of experienced
 Paid a full-year dividend of BDT 1.50 per share, 7.50% stock professionals who are expert in conducing the technical,
and 7.50% cash dividend. financial and economic feasibility of projects. Financial solutions
 Maintained world-class transparent reporting and increased like syndicated loan, preference share, bond etc. are some of its
our disclosure related to financial statements. wide array of services.
 Experienced smooth leadership transitions, with one of the  Growing and protecting client investments and wealth:
most experienced management teams in the NBFI industry Y-O-Y Growth of 29% in Term deposit in 2017 is evident of
of Bangladesh increasing clients’ confidence on us. We always focusing of
providing best value for investment to our depositors by
Customers offering need based liability products and attractive return
Customers are the most important stakeholder for any on their investments.
organisation. They are the resources upon which the success  Financing the aspirations and dreams of clients:
of our business depends. When thinking about valuing the
Altogether 813 new home loans and 1,903 cars were
customers we consider following points:
financed and we supported many of our business clients in
 LBFL is dependent upon their customers. If we do not their endeavors to start and grow sustainable business.
develop customer loyalty and satisfaction, we could lose
our customers.  Providing convenient access to clients with less complexity
 Without customers the existence of LBFL would not be and improved flexibility:
justified. LBFL continued to invest in its physical distribution,
 The purpose of LBFL is to fulfill the needs of the customers. expanding its footprint with 5 new branches in the year
 The customer makes it possible to achieve our business 2017. All LBFL employees are well trained to deliver
aims. uncompromised client services. 24/7 helpline service is
there to help our valued clients as and when required.
Our Customers
FinSmart, LankaBangla mobile application has been
 The full spectrum of individual demographics in Bangladesh launched to reach the services of LankaBangla to the
from entry-level to high-net-worth individuals fingertips of the valued customers.
 Various legal entities from trusts, non- governmental
organisations and associations, to small businesses up to  Protecting clients and their assets through secured IT
the largest corporates and the public sector systems and infrastructure.
 Those who are engage with us even on single product LBFL invested meticulously in its IT structure and committed
classes, such as advance, deposit, asset management and to invest more in upcoming years to align with latest state
investment or finance solutions. of the art technology for the smoothness of its operation,
 Foreign traders who trade in the secondary market of strengthen data security and ensure protection for clients
Bangladesh assets.
Needs and expectations of our customers  Providing competitive and transparent pricing and giving
value back to clients We always strive to ensure best value
 Offering innovative solutions and services. for money for our clients by means of competitive pricing of
 Growing and protecting client investments and wealth. our products and services. We not only charge competitive
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LankaBangla
interest to our asset clients but also ensure transparent and significant needs and expectations:
reasonable pricing for documentation and other fees.
 Career development opportunities
We have maintain agreements with good number of
 Adequate training facilities
vendors which helps our credit card customers to avail
attractive discount offers and credit purchase facilities (up  Effective performance management and recognition
to 24 months) with interest facilities.  Effective employee relations
We also offer attractive reward points to the credit card
customers which they can cash in by means of different free  A healthy and safe work environment
gifts on the basis of their uses.
How we deliver value to our staff
 Providing sound financial advice and financial education
Career development opportunities
LBFL along with its subsidiaries provide financial advice All employees of the company irrespective of their gender
and financial education to the valued clients by means
of interactive consultation and professional investment received formal performance and career development reviews
advices. during 2017. Annual performance reviews and the reviews
conducted upon completion of probationary periods help the
LBFL has strong research units which rigorously analyze
company in identifying and enhancing the salient skills and
market data and economic trends to produce weekly and
monthly market pulse and other research papers to educate developing them as needed. A significant number of contractual
the investors and prospective LBFL clients. employees have been absorbed under Management Cadre in
2017.
Employees Our Investment on Training
To further strengthen the staff development process, the company
Employees are the most valuable resources of LBFL. We have
increased its concentration on training and development of
always been very passionate about human capital management
and takes responsibility for developing employee potentials employees. This concentration will also support our intensive
and leveraging employee skills in the organization. LankaBangla efforts to improve customer experience across all business units,
continues to implement HR policies and practices that are with long term benefits accruing to the company. In 2017, we have
aimed at growing and developing employees and ensuring also launched E-Learning training system for our Management
their active contribution towards the achievement of corporate Cadres.
goals. LankaBangla believes that the skills and enthusiasm of its Given the company’s strong commitment towards developing a
employees are a major force that helps it to achieve sustainable learning culture, it is pertinent to note that employees underwent
results. a total of 32,334 man-hours of training during the year on various
knowledge-building programs compared to 27,705 man-hours of
the year 2017.
Effective performance management and recognition
In LankaBangla, Management is very much concerned about
performance management of its employees and to ensure proper
recognition. LBFL has followed a systematic approach to the
identification of high performers among its employees to motivate
them with good incentive bonus and promotion if deserved.
Management also tend to identify the training needs of individual
employees and through training, leadership competencies are
identified and a pool of talent is created to serve the long term
needs of the Company.
More details about employees is provided in page number 186 Effective employee relations
to 191 (HR Accounting) and page number 192 (Human Capital). LBFL always value its employees through maintaining effective
employee relations from top to bottom. Our approach to employee
Needs and expectations of our staff relations ensures that we recognise our employees’ rights to fair
A central component of the achievement of our vision to be the and equitable employment practices and to freedom of association.
most preferred financial service provider is delivery on our own LBFL follows a policy of continuous improvement in respect of the
sustainability objectives and commitments. Our staff play a key working lives of its employees. In addition to this, management has
role in this, so we strive to create and maintain a positive and taken further steps to enhance the facilities and benefits afforded
productive working environment that embraces and respects to its staff:
diversity and enables the personal and professional goals of all  Festival Bonus
our employees. In achieving this, we engage constantly with our
workforce to establish their priorities, needs and expectations.  Provident Fund
In 2017, the following were identified as our employees’ most  Gratuity
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Annual Integrated
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 Staff loan facility at concessionary interest rate Suppliers and business partners
 Home loan facility at concessionary interest rate Suppliers have become increasingly important to LBFL with
 Medical benefits enjoyed by all employees including life the expansion of its network and increasing requirement for
insurance and hospitalization insurance to tide over any stationery and other related supplies. To ensure uninterrupted
personal exigency day to day operational activities we should maintain smooth
 Annual increment flow of all related supplies and thus maintain good relations
 Performance related bonus with our suppliers.
 Mobile allowance for all permanent employees Needs and expectations of our suppliers
 Motorcycle for employees who need to visit outside office in  Compliance to contractual terms
regular basis
How we deliver value to our suppliers
 Travel allowance & daily allowance
 Cost sharing for Professional qualification LBFL operates with its suppliers based on a registered supplier
list, which ensures LBFL’s expectation of quality versus price is
 Fuel allowance and transport allowance maintained while dealing with reputed parties in a mutually
 Disturbance allowance for temporary transfer benefiting manner. We are committed to comply with all the
 Reward and Recognition is created to set up a systematic contractual regulations with our suppliers and timely payment for
process of expressing appreciation for employees’ hard work, supplies is our reputation.
dedication and contribution to the company
Lenders
 LBFL plan, design and arrange various job specific soft skills
and technical training based on individual need assessment Funding providers, mostly LBFL’s banking partners are an important
and business requirement component of LBFL’s business as they support LBFL in meeting
 E-Learning for all Management Cadres funding needs, when need arises. It is necessary to sustain a
continued relationship, which will yield mutual benefit for both
A healthy and safe work environment parties.
LBFL and all of its employees are to protect and enhance the
Needs and expectations of our lenders
environment in which they live. Everyone will comply with all
laws and strive to do more. LBFL do not compromise safety or  Competitive interest rate
environmental protection for profit. LBFL believes environmental  Compliance to contractual terms
stewardship as an obligation and support this commitment with  Building business relationships
the necessary personnel and financial resources.
How we deliver value to our lenders
The following principles will guide and measure our corporate
goals and objectives in Health, Safety and Environment: Finance is the solution that assists in our businesses operation,
and allows us to take advantage of opportunities to grow. Our
 We are committed to continuously improving our Health, lenders support to excel our advance growth and expanding our
Safety and Environment performance;
operations. We value our lenders through:
 We will continually promote employee safety on and off the
job;  Providing them with market competitive interest rate on
their invested fund
 We conduct our business so it meets or exceeds all applicable
laws and regulations and minimises risk to our employees, the  Meticulously comply with all the contractual term and
public and the environment; conditions
 We will endeavour to do business with companies and  Our treasury division is always keen to build and maintain
contractors that share our expectations for Health, Safety long term relationship with our lenders. In 2017 Treasury
and Environment performance and commitment and we will division organized a successful treasury night to promote
regularly assess their performance; and value such relations.
 We will use our influence with companies in which we have
partial ownership so they will want to meet the Health, Safety Regulators
and Environment Commitment of the Company;
Compliance and regulatory risk has become increasingly
 We believe all employees are responsible and accountable for
significant given the more stringent regulatory environment
Health, Safety and Environment performance.
in which LankaBangla operates. As a listed financial institution
LBFL provides the training necessary to ensure that all the and holder of public deposit LBFL is regulated by following
Company personnel are sensitive to the importance of our regulators:
Health, Safety and Environment policy, understand the nature  Bangladesh Bank
of the laws and regulations that govern our activities and have
skills to implement our policy and comply with Health, Safety  Bangladesh Securities and Exchange Commission (BSEC)
and Environment requirements.  National Board of Revenue (NBR)
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Needs and expectations of our regulators Society

 Ensure effective corporate governance As a member of the society LBFL has responsibilities towards
 Compliance with rules and regulations the society from a broader sustainability perspective. Apart
from financial needs, LBFL have to act in a socially responsible
 On time regulatory reporting manner, for societal benefits.
 Timely submission of VAT and Tax
Needs and expectations of the society
 Ensure value for the general shareholders
 To act in a socially responsible manner
How we deliver value to our regulators
In LBFL we firmly believe that our regulators guided us towards How we deliver value to the society
our journey to ultimate success. We maintain regulatory LBFL always act considering itself as a part of the society.
requirements with top priorities. Corporate Social Responsibilities (CSR) of LankaBangla is a form
of corporate self-regulation integrated into our business model
Ensure effective corporate governance based on the objective of good business for good society.
Our practice to remain within the guideline for strategic and
steady journey towards progress is being governed by our In 2017 we performed following CSR activities:
participant leaders harmonized by our Board of Directors and
 Supporting education of underprivileged brilliant students
Chairman. These practices ensure transparent and winning
corporate governance for LankaBangla.  Financial assistance for education for children of deceased
Ex-officials
Compliance with rules and regulations
 Support local community to protect from cold wave
LBFL upholds a strong compliance culture within the organisation
and maintains a close dialogue with regulators to ensure required  Protecting environmental and ecological degradation
regulations are followed to expectations. Our Risk Management through tree plantation
division closely monitors our operations, activities and compliance  Support the renovation and modernization of library of
with all the regulatory requirements. different colleges
On time regulatory reporting
Environmental Groups
As a public limited financial institution LBFL has to submit a
Environmental groups are organizations coming out of the
good number of regulatory reporting on regular basis. In LBFL
conservation or environmental movements that seek to
our regulatory reporting responsibilities are decentralized. It is
protect, analyse or monitor the environment against misuse or
designed is such a way that concerned division or department
degradation from human forces.
or concern individual employee will prepare and submit
respective reports to the respective regulatory body. A concrete Needs and expectations of the environmental groups
review process is predesigned to ensure correctness and timely
submission of all the regulatory reports.  Protection of environmental and ecological balance
Timely submission of VAT and Tax How we deliver value to the environmental groups
Being a legitimate and ethical company, LankaBangla contributes In an era where protection of environment and its resources
to the Government Exchequer when the necessary amounts fall has become vital, LBFL considers environment aspects with high
due. For the year 2017, LankaBangla Finance and its subsidiaries importance, particularly when LBFL continues to build greater
made a handsome contribution to Government Exchequer of an presence across the country. LBFL has already established its
amount equal to BDT 1,030 million, composed of income tax, Green Banking policies. LBFL promotes its operation in a Green
withholding tax, VAT, withholding VAT and excise duty. This is way with less use of paper and increase the use of electronic
in comparison to BDT 637 million in 2016, reflecting its fair and documents. LBFL is also playing leading role in the banking and
consistent commitment towards national contribution. financial sector of Bangladesh in introducing and executing Green
Ensure value for the general shareholders Finance.
Transparent and fair reporting of its financial information is
Board Members
backbone of LankaBangla’s success stories so far. Our financials
show our growing picture that we are consistently increasing the LBFL has a group of experienced and professional Board members
value of our shareholders with all our efforts. Our Transparency in its Board. With immense experience and professionalism the
and fair reporting was not only recognized in national level but Board of LankaBangla is conducting its Business for the last 21
also in International level. For the last consecutive three year years and ensuring proper corporate governance since then.
we have been awarded SAFA Best presented Annual Report Our Board members are as follows:
Award.
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Annual Integrated
Report 2017
Name Designation How we deliver value to the Board

LBFL management faces the Board on a quarterly basis. Quarterly
Mr. Mohammad A. Moyeen Chairman financial statements along with detailed financial analysis and
rationale for the results has been presented to the board. After
Mr. Mahbubul Anam Director
detailed discussions and fact finding analysis the board approved the
Mr. I. W. Senanayake Director
Based on the financial position and data with explanation presented
Mr. M. Y. Aravinda Perera Director by the management the board guide the management for the
future courses of action. Management adherence with the guidance
Mr. M. Fakhrul Alam Director operate the business to get desired result and hence strive towards
increasing the wealth of the shareholders.
Mr. Tahsinul Huque Director
Our relationships with all our stakeholders impact directly and
Mrs. Aneesa Mahial Kundamal Director indirectly on our business activities and reputation. We proactively
engage with stakeholders to inform our business strategy and
Independent
Mr. Al-Mamoon Md. Sanaul Huq operations, shape our products and services, manage and respond
Director
to social expectations, LBFL’s reputational risk and influence the
Independent environment in which we do business. The ways in which we
Mrs. Zaitun Sayef
Director engage with our stakeholders, and the frequency with which we
Mr. Khwaja Shahriar Managing Director do so, varies according to each stakeholder group. Engagement is
based on identified issues and areas of concern that may impact
our stakeholders. We use a decentralized stakeholder engagement
Needs and expectations of the Board model in which individual business units undertake stakeholder
 Sound Financial position engagement appropriate to their areas and are responsible for
 Efficient Financial performance identifying stakeholder concerns and taking appropriate action. At
the center, the board, oversees all engagement and plays a key role
 Effective Corporate Governance in analyzing our business relevant issues and concerns and providing
 Protecting shareholders wealth guidance on appropriate responses.
Key topics related to

Engagement Frequency of Expectations of Mechanisms adopted by LBFL to respond
Stakeholder stakeholder identified
methods engagement stakeholder to topics/concerns
during engagement
Annual General Annual - Effectiveness of business - Higher return on - LBFL ensures that the AGM is held in March each
Meeting (AGM) strategy in delivering equity year and there is constructive dialogue between
anticipated financial results. - operating efficiency management and shareholders and follow up on valid
- Effective cost material investor concerns and recommendations
- Slow improvement in ROE management - As LBFL is in growth mode operating cost is a bit high
at this moment and will be reduced when we will
- Cost efficiency finish the branch expansion activity though the cost to
income ratio is reduced to 59.89% from 63.92%
- LBFL will give best effort to reduce the fund cost
Annual Report Annual Overall Financial Performance of - Sustainable business The Company presents annually a comprehensive Annual
the Company growth. Report backed by necessary disclosures on LBFL’s progress
for the period, in terms of shareholders wealth created.
Integrated Annual The value creation and value For the first time LBFL is presenting a comprehensive
report distribution Integrated Report backed by necessary disclosures on
LBFL’s progress for the period, in terms of shareholders
Investors/ value created. LBFL is committed to continue with annual
Shareholders integrated report for upcoming years.
Announcements Ad hoc as necessary Financial Performance of the
to Shareholders (Interim accounts – Company
quarterly)
Extraordinary Ad hoc as and when Appraising plans, future
General necessary prospects, in relation to core
meetings business growth.
One-to-One As necessary Improvements in relation to LBFL
Meetings operations.
LBFL website On a regular basis Strengthening governance and
information risk management mechanisms.
updates
Press releases At least one release Financial Performance of the
and articles in per quarter Company
magazines
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LankaBangla
Key topics related to

Engagement Frequency of Expectations of Mechanisms adopted by LBFL to respond
Stakeholder stakeholder identified
methods engagement stakeholder to topics/concerns
during engagement
Customers awareness Annually in every - Compliance and rights to the Efficient and customer - To invest more in Information technology
programs branch customers oriented business - To increase delivery channel to reach more
- Product information to environment marginal customer segments.
customers. - To introduce new product to cater customer
- Combating financial crimes. needs
- Anti-money laundering issues
Direct customer On a regular basis - Aspects on attractive pricing Fulfill one’s financial - Product diversification is part of LBFL’s growth
feedback to any of and customer service. needs to better strategy and is pursued on a continuous
LBFL service points - Customer specific problems prospects or meeting basis to see how best customer needs can be
personal requirements. fulfilled. Both lending and deposit businesses
are highly geared and well receptive to
changes in customer preferences and remains
flexible to cater to growing needs
of customers.
Marketing visits/ - Credit customers - Identification of customer needs To derive optimum - LBFL shall devise mechanism to manage
Field visits mostly once prior - Assessment of customers benefit/satisfaction from customer expectations to yield high level
to transacting offered products and of customer satisfaction to ensure superior
- Deposit customers services. customer service quality
on an ad hoc basis - Through continuous training and
Customers and selective development, we gear our employees to
deliver a quality service and to be better
equipped to face complexities evolving in our
sector.
One to one As necessary - Standards of service and related Ensuring safety of one’s There is persistent investment in technology, to
Meetings improvements. investment. enhance ICT capabilities to remain competitive in
- Customer convenience. the market. This is done without compromising
on data security. We audit our systems closely to
ensure required ICT standards are met.
Customer suggestions Ad hoc Stability of LBFL and its reputation Maintaining

via suggestion boxes as a trustworthy transparent confidentiality of
and follow up partner. information placed.
Telephone On a regular basis Confidentiality of customer

discussions/Emails information.
Media campaigns As necessary
LBFL corporate On a regular basis Through the Risk and Compliance function, risk
Website management and compliance is strengthened
constantly.
Inculcating an 'open On a regular basis Professionalism and diligence Having clear LBFL upholds a strict performance based
door policy' level expected in executing duties. understanding of culture across all job functions. Employees
for employees to individual performance are evaluated by their superiors based on a
freely interact one goals, for its formal evaluation process, and high performers
-on-one with MD, achievement. rewarded biannually.
other senior officers.
Management As and when
Meetings necessary
Employees Performance appraisal Annual Sustaining a creative and

and individual review innovative culture.
meetings
Town hall Meeting Biannual Bi Annual performance of the Ability to express ideas, concerns and
company and to recognise the grievances freely.
best performers for the period
Internal Newsletter Monthly Sustaining a creative and

communiqués innovative culture.
Corporate Regular Knowledge-based environment

communiqués via and career development.
circulars, memos and
e-mails
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Management Discussion and Analysis Economic Outlook
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ECONOMIC Annual Integrated
Report 2017
OUTLOOK
Global Outlook
The global economy is experiencing a cyclical recovery, Source: World Bank, Global Economic Prospects I January 2018
reflecting a rebound in investment, manufacturing activity, and
trade. This improvement comes against the backdrop of benign Growth among EMDEs is estimated to have accelerated to
global financing conditions, generally accommodative policies, 4.3 percent in 2017, reflecting firming activity in commodity
rising confidence, and firming commodity prices. Global GDP exporters and continued solid growth in commodity importers.
growth is estimated to have picked up from 2.4 percent in Most EMDE regions benefited from a recovery in exports.
2016 to 3 percent in 2017. The upturn is broad based, with The improvement in economic activity among commodity
growth increasing in more than half of the world’s economies. exporters took place as key economies—such as Brazil and the
In particular, the rebound in global investment growth—which Russian Federation—emerged from recession, prices of most
accounted for three quarters of the acceleration in global commodities rose, confidence improved, the drag from earlier
GDP growth from 2016 to 2017—was supported by favorable policy tightening diminished, and investment growth bottomed
financing costs, rising profits, and improved business sentiment out after a prolonged period of weakness. EMDE growth
across both advanced economies and emerging market and is projected to strengthen to 4.5 percent in 2018 and to an
developing economies (EMDEs). This synchronous, investment- average of 4.7 percent in 2019-20. This outlook is predicated on
led recovery is providing a substantial boost to global exports improved global manufacturing activity and robust global trade,
and imports in the near term. broadly favorable financing conditions, and firming commodity
Global growth is projected to edge up to 3.1 percent in 2018, as prices, amid an investment led recovery in advanced economies.
the cyclical momentum continues, and then slightly moderate Source: Global Economic Prospects I January 2018, World Bank
to an average of 3 percent in 2019-20. This broadly steady
forecast masks marked differences between the outlook
for advanced economies and EMDEs. Growth in advanced Bangladesh Economy:
economies is projected to slow, as labor market slack diminishes The Bangladesh economy has been able to maintain sustained
and monetary policy accommodation is gradually unwound, economic growth. The economy grew at a rate of 7.28 percent
moving closer to subdued potential growth rates, which remain in FY2016-17, satisfactorily up from 7.11 percent growth in
constrained by aging populations and weak productivity trends. FY2015-16. The recorded GDP growth of 7.28% in FY17, beating
Conversely, growth in EMDEs is expected to accelerate, reaching both the target of 7.2% and also India's growth rate of 7.1%. As a
4.5 percent in 2018 and an average of 4.7 percent in 2019-20. result, Bangladesh achieved the highest GDP growth rate in the
This mainly reflects a further pickup of growth in commodity South Asian region in 2017, and one of the highest GDP growth
exporters, which is forecast to rise to 2.7 percent in 2018 rates among major economies in the world. Among the broad
and to an average of 3.1 percent in 2019- 20, as oil and other sectors of GDP, the contribution of agriculture and service sector
commodity prices firm and the effects of the earlier commodity to GDP slid down by 0.61 percentage point to 14.74 percent and
price collapse dissipate. Growth in commodity importers is by 0.27 percentage point to 52.85 percent which was offset by
projected to remain stable, averaging 5.7 percent in 2018-20, as
an increased share of industry by 0.88 percentage point to 32.42
a gradual slowdown in China is offset by a pickup in some other
percent in relation to the preceding year.
large economies. Within the broader group of EMDEs, growth
in low-income countries is projected to rise to 5.4 percent in
2018 and to 5.6 percent on average in 2019-20, as conditions
gradually improve in oil and metals-exporting economies.
Real GDP (Percent change from 2015 2016 2017E 2018F 2019F 2020F
previous year)
World 2.8 2.4 3.0 3.1 3.0 2.9
Advanced economies 2.2 1.6 2.3 2.2 1.9 1.7
Emerging market and
3.6 3.7 4.3 4.5 4.7 4.7
developing economies:
East Asia and Pacific 6.5 6.3 6.4 6.2 6.1 6.0
China 6.9 6.7 6.8 6.4 6.3 6.2
Europe and Central Asia 1.0 1.7 3.8 2.9 3.0 3.0
Latin America and the
-0.6 -1.5 0.9 2.0 2.6 2.7
Caribbean
Middle East and North Africa 2.8 5.0 1.8 3.0 3.2 3.2
South Asia: 7.1 7.5 6.5 6.9 7.2 7.2
India 8.0 7.1 6.7 7.3 7.5 7.5 The government has set a GDP growth target of 7.40% for the
Pakistan 4.1 4.5 5.3 5.5 5.8 6.0 2018 fiscal year, which is achievable given the stable political
Bangladesh 6.6 7.1 7.2 6.4 6.7 6.7 climate, investments in power and transport infrastructure and
Sub-Saharan Africa 3.1 1.3 2.4 3.2 3.5 3.6 the high private sector credit growth rates among others.
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LankaBangla
Medium Term Macroeconomic Framework, FY2017-18 to narrow money and time deposit (from 12.31 percent to 10.24
FY2019-20: Key Indicators percent) were responsible for the slower growth of broad money
compared to the preceding year.
14-15 15-16 16-17 17-18 18-19 19-20 Looking into the sources of broad money reveals that slow growth
Actual Budgeted Projection in Net Foreign Assets (NFA) and substantial decrease in public sector
Real GDP credit pushed the broad money growth much below the target.
6.6 7.1 7.2 7.4 7.6 8.0
growth (%) On the backdrop of robust import growth, slow export growth and
CPI Inflation (%) 6.4 5.9 5.5 5.5 5.5 5.4 shrinking remittances inflow the growth in NFA decreased to 14.40
percent from the previous year’s growth of 23.20 percent.
Investment 28.9 29.7 30.3 31.9 32.8 34.5 Broad money growth stood at 10.7% as of December’17, while
(% GDP)
Reserve Money growth was 12.8% against previous MPS target
Private 22.1 23.0 23.0 23.2 23.9 25.4 of 13.9% and 12.0% respectively for FY18. Bangladesh Bank has
reduced its target for both M2 in the latest MPS (H2 FY18), while
Public 6.8 6.7 7.3 8.7 8.9 9.0
leaving the Reserve money growth expectations unchanged. Due
Source: Finance Division, Ministry of Finance to imports ballooning in FY18, net foreign asset growth in FY18
is expected to be flat. This coupled with continued negative govt
Continuing the upward trend per capita GDP of Bangladesh
borrowing from banking system has caused the downward revision
reached US$1,544 in FY2016-17 from US$1,385 a year earlier.
of M2 growth. The moderate outlook for reserve money is retained
Likewise, per capita national income increased to US$1,610 in
at moderate levels. These growths are seen as close enough to
FY2016-17, US$145 higher than the previous year as per the
the initial targets for meeting the inflation and economic growth
final estimates of BBS.
targets.
Item 2014-15 2015-16 2016-17 Private sector credit witnessed a decent growth of 15.7% in FY17.
GDP (In Crore Tk.) 1515802 1732864 1975815 Continued political stability, coupled with declining interest rates
GNI (In Crore Tk.) 1614204 1832675 2060716 and advances in power infrastructure has created a strong base
for the private sector to invest and grow. Huge amount of public
Population (In Crore) 15.79 15.99 16.18
investment in infrastructure projects are expected to stimulate
Per Capita GDP (In Tk.) 96004 108378 122152 private investment while the projects themselves are expected
Per Capita GNI (In Tk.) 102236 114621 127401 to solve infrastructural bottlenecks standing in the way of further
Source: Bangladesh Bureau of Statistics (BBS) industrial expansion. The Padma Bridge is slated for completion in
Investment-to-GDP ratio crossed 30% threshold for the first time 2019, which is expected to greatly boost economic growth in the
as reflecting the government’s increased focus on infrastructural south-western regions
development in recent years. The government has allocated BDT Private sector credit came in to stand at 15.66%, just under the
306bn, or one fifth of the total Annual Development Program MPS target of 16.5% in June 2017 and at 16.2% for December 2017.
(ADP) budget to fast track six megaprojects, namely, the Padma Due to high credit demand, private sector credit growth reached
Bridge project, Dhaka Metro Rail, Payra Deep Sea Port, the 19% in November’17 and eventually ended the year at 18.1% in
Rampal and Rooppur power plants and an LNG terminal. These December. The MPS (H2, FY18) target for private sector credit
public sector investments in infrastructure are expected to spur growth has been set at 16.80% for June 2018. As credit growth
private sector investments and enable sustainable long term outpaced deposit growth, the average Advance/Deposit Ratio
economic growth. (ADR) of banking sector raised from 73.9% in June 2017 to 75.9% in
December 2017. Although current ADR limits for traditional banks
14-15 15-16 16-17 16-17 17-18 18-19 19-20 is set at 85% (the limit is 90% for Islamic banks), the ADR for private
Actual Budgeted Revised Projection commercial banks stood at 89.4% for the private commercial
Domestic Credit 10.0 14.2 15.0 16.4 16.5 17.2 17.4 banks on September 2017. The continuation of such aggressive
Credit to the
lending could have repercussions for the liquidity situation of the
13.2 16.8 15.0 16.5 16.5 16.8 17.0 whole financial sector. As such, this MPS (H2 FY18) describes a
Private sector
Broad Money 12.4 16.4 15.4 15.5 15.6 15.8 16.1 few macro-prudential steps to curb imprudent and unproductive
lending. These are:
Private 22.1 23.0 23.4 23.0 23.2 23.9 25.4
Public 6.8 6.7 7.6 7.3 8.7 8.9 9.0  Intensive surveillance on compliance of Asset-Liability
Source: Finance Division, Ministry of Finance
Management and Forex Risk Management guidelines
 Issuing a new directive requiring banks to rationalize their
In FY2016-17 narrow money (M1), broad money (M2) and Advance/Deposit Ratios
reserve money (RM) progressed at a slower pace compared to  Increased surveillance on the end use of bank loans including
the preceding fiscal year. The substantive decline in the growth import finance
of M1 was mainly attributable to the significant shrinkage in
These measures would focus on quality and sector composition of
growth of both currency notes and coins with the public (from
credit flows and prioritize implementation of existing standards,
38.81 percent to 12.66 percent) as well as demand deposit
rather than regulations directly restricting access to credit for
(from 23.99 percent to 13.49 percent). Slow growth of both
productive pursuits.
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Credit to Government Sector continued on a declining trend be on the upside as demonstrated by BB’s inflation expectation
mainly due to government borrowing through National Savings survey. Expectation of one year ahead average inflation is around
Certificates (NSCs). Sales of National Savings Certificates reached 6-7 percent.
new records in FY17, with BDT 54.48 bn BDT being bought by the
public. The total stock of outstanding National Savings Certificates External Sector Factors:
stands at a record BDT 2,039bn as of September 2017. The External Sector
increased reliance on NSCs increases the government’s financing Economic
costs, as NSCs carry interest rates which are much higher than Indicator FY 13 FY 14 FY 15 FY 16 FY 17 FY18 Outlook
market rates. However, since a wide section of the population of Export Growth Likely to
11.20% 11.70% 3.40% 9.80% 1.70%
Bangladesh invest their savings in NSCs, including retirees, NSC Rate (%) increase
rates are a politically sensitive matter and the government is Import Growth Likely to
Rate (%) 5.00% 8.90% 0.20% 6.00% 8.70%
hi ghly unlikely to cut rates on NSCs at least until after the next increase
Remittance Growth (14.40%) YOY growth
scheduled elections in 2019. Rate (%) 12.60% -1.60% 7.70% (2.50%) expected
In the meantime, public sector credit growth has dipped into Current Account 2,388 1,406 2,875 4,382 (1,551) (4,340)
negative territory, standing at -13.48% in September 2017 as the Balance (mn USD)
government drastically reduces its borrowing from the banking Forex Reserve
(mn USD) 15,315 21,558 25,025 30,168 33,493 N/A
system due to the huge volume of sales of NSCs. The MPS target Exchange Rate
of public sector credit growth is 8.30% for June 2018. (BDT/USD) 77.8 77.6 77.67 78.27 79.12 N/A
Source: Bangladesh Bank
The external sector has been a source of strength for the Bangladesh
economy for several years. This has changed in recent periods.
Export growth in FY 2016-17 was only 1.7 percent as opposed to the
target of 8 percent. A glimmer of hope is in the horizon with both
RMG and total exports picking up during July-December of FY 2017-
18. However, imports growing at a higher rate than exports led to a
negative current account balance that continued during July-October
of FY 2017-18. In FY 2016-17 remittance earning growth experienced
a negative growth of (14.40) percent despite increase of manpower
export. One important reason for low remittances despite high
growth of manpower exports is the flow of remittances through
informal channels. Strong Bangladeshi Taka against the US Dollar
Inflationary outlook also played a role for low export and remittances growth to some
extent. Though remittances have started to pick up in recent months
Inflation in Bangladesh had been on a declining trend since the it is not significant since it was negative during the last fiscal year.
beginning of FY15, reflecting favorable domestic production and
reduced prices in the global commodity markets. This declining In 2017, the banking sector exposed further weaknesses through
trend continued in the first half of FY17. General P2P inflation got major indicators such as rise of non-performing loans (Bangladesh's
down to 5.03% in Dec’16. However, inflation started to rise again Non Performing Loans Ratio stood at 10.7 % as of Sep 2017), lower
in Jan’17 driven largely by higher food prices. This was caused capital adequacy and the overall lack of governance in the sector.
largely by the floods in the country’s Northeastern region which Though the period of BASEL III implementation is approaching
resulted in huge loss of crops. Higher crude oil and rice prices and a in 2019, most banks are not prepared. The government has been
depreciating BDT further augmented inflationary pressure. General recapitalizing the state-owned banks for their loss every year
P2P inflation rose to 6.12% in September 2017 and crossed the without any fruition. This has been an unfortunate example of
6.00% mark for the first time since it went down below this level using public money towards compensating for the greed of bank
in Jan’16. However, inflation went down somewhat over the last defaulters. The proposed law allowing more members of the same
quarter of 2017 and the 12 month average inflation in Dec’17 was
family to be directors of the privately-owned banks and extension of
5.70%, slightly below the upper limit of the inflation projection of
their tenure are apprehended to further deteriorate the governance
5.5%-5.9% in the last MPS. Looking ahead inflation risks appear to
in private banks. Despite the central bank's attempt to improve
performance of the banking sector, improvements are not visible
yet. The independence of the central has been gradually diminishing
due to political influence. If reform measures are not taken, the crisis
of the banking sector will have serious implications for the economy.
Way Forward,
Political uncertainty looming over national election which can
further affect private investment, rising food inflation, being on track
with respect to SDGs, challenge of growth of exports and remittance,
governance issues around the banking sector, volatile money market,
uptrend in interest rate and finally geo-political issues of Rohingyas
from the Rakhine state of Myanmar are most critical challenges for
the Bangladeshi economy in 2018.
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BUSINESS ENVIRONMENT
ANALYSIS
1. SWOT Analysis for LBFL
Sl. No. LBFL’s Key Strengths Outlook on Key Strengths Key actions taken to build on Strengths
1 Having the broadest umbrella of A broad category of product can attract  LBFL has well diversified financial products
products and service offerings and serve the people with different to serve its diverse customers
financial need. It will diversify the revenue  More focus on segmented approach with
stream and reduce the dependency on dedicated team to strengthen the product
single products line
 LBFL is the only NBFI having the credit card
business in Bangladesh.
2 Offering highest loan ceilings High loan ceilings and LTV ratio can  LBFL offers highest credit ceiling to their
and LTV ratio attract and serve people with immediate retail and SME clients. A ceiling of BDT 2
solutions to their financial needs. It million for unsecured credit facility is the
ensures portfolio growth and healthy highest in the market.
revenue streams as well as a competitive  Besides, LBFL offers lease facility with the
maximum Loan to Value ratio, which is up
edge over peer organizations, like to 100%
commercial banks.  To attract home loan and SME clients, LBFL
facilitates them with the maximum limit of
BDT 100 and 200 million respectively.
3 Having a reputation as a stable Public will continue to pursue  Attracting customers from other investment
Financial Institution for two institutions that remain reputed and act options
decades with utmost corporate responsibility.  Enhanced financial, governance and
operational reporting to make public more
aware of LBFL’s financial stability
 Introducing Integrated Reporting
 Keep improving on regulatory compliances
 Keep investing on building a reputed brand
value
 Actively participating in the CSR activities
through LankaBangla Foundation
4 Strong capital base with a As LBFL’s business is growing at a rate  Planning for healthy profitability growth
sound capital adequacy ratio of more than 30% annually, we could  More focus on Retail and SME business
position expect capital adequacy ratios to be  Focus on lending to good rated corporate
pressured downward on account of houses
anticipated growth in credit business.  New Capital issue in the form of rights share
(2:1)
 Planning to issue Zero Coupon Bonds, if
required
 Developed a Capital planning for next five
years for anticipating business growth
5 Having a skilled human To hire and retain skilled human  Investing more on training key skills and soft
resource base with the lowest resource will be key to succeed in the skills
average age of employees coming years as there are few new  Planning for an in-house training institute
Banks and NBFIs in the market. to train the employees
 Introduce a reward recognition policy under
which the most performing employees are
being awarded twice in every year.
 For improvement of the performance,
LBFL also introduce different programs like
HEROES @ WORK, DINE WITH MD in every
two months
 Organize different events for the employees
like Annual Football, Annual Badminton,
Family day, New year celebration, women’s
day, mother’s day etc. to motivate the
employees.
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Annual Integrated
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6 Establishing a diverse delivery Increased expansion would lead to greater  LBFL will look forward to expand its delivery
channel across the country decentralization of LBFL’s work operations channel to cater new more people.
to reach more clients. This will also  Where there are no branch networks LBFL
Increase operational risk. will use Hub and Spoke model and will
employ mobile lending officers with state of
the art technology.
7 Possessing an effective ICT IT will be a key factor to improve the  Introducing new ERP
environment supported by service quality, imposing controls and  Investing more on IT hardware
right IT hardware and software reducing the cost in coming days.  Improving the Call center
systems, IT support staff and an  Enhanced certain core system features
IT savvy workforce
 Training users on effective use of these IT
tools across the branch network.
8 Online presence through user- Online presence can be as much about  LBFL maintains its web presence through
friendly website and mobile customer service as it is about selling website, financial portals, social networking
application products and services. A dynamic website sites and its unique mobile application
or application can create a good impression “Finsmart”.
about the organization, as well as ensuring  Clients can reach LBFL through these
faster services and accessibility channels and the Alternative Delivery
Channel (ADC) division of LBFL facilitates
the requests received from these sources.
 LBFL’s clients can avail different services
like balanced information, card-check
processing requests, form filling, etc.
through its mobile application “Finsmart”.
9 Discount and Ezypay Privileges To attract new and retain existing clients,  LBFL has agreement with more than 2000
for Credit Card clients promotional offers like discounts, cash- merchants across the country to offer
back, reward point etc. can play a vital discount facilities to its clients.
role. Moreover, Ezypay or EMI facilities  EMI scheme allows clients to convert the
can release clients from their immediate big-ticket retail purchases made by their
payment burden. LankaBangla Credit Card and LankaBangla
Card Cheque into an installment scheme.
 LBFL clients can enjoy 0% interest per
month on their EMI purchases (BDT 10,000
and above) from its 0% merchant partners
in different product and service sectors.
10 Having a knowledgeable and A visionary and knowledgeable Board  The Board will keep guiding the company
prudent Board of Directors will guide the company to a sustainable with all their valuable knowledge
growth over the period
Sl. No. LBFL’s Key Weaknesses Outlook on Key Weaknesses Key actions taken to counter Weaknesses
1 Large concentration on Traditional lending on corporate product  Increased emphasis placed on Retail and
Corporate portfolio volume could be hampered with rising SME business.
intensity in competition.
2 Comparatively high cost of fund Absence of CASA deposits increases bank  Increased focus placed on long term public
dependency and reduces bargaining deposit, especially scheme deposits.
power to bring public deposits resulting
high cost of fund and low spread
3 Strong Presence in the Capital Exposed to highly sensitive and volatile  To reduce the dependency on the capital
Market income which depends on market markets, more focus was given to the core
conditions. products of the company.
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4 Lowering Yields on traditional In churning higher income, the needfor  To retain the profitability, LBFL focus on the
lending products. more innovative products and wider increased volume of business in Retail and
customer choice will be pivotalin the years SME.
to come.  Focus on the higher margin products
5 Less flexibility in the money Banks affording very competitive Cost of  Reduce dependency on bank borrowing
market Borrowing as well as interest rates for fixed  More focus on the term deposits from the
deposits will continue to add pressure to retail customers
the NBFI sector.  Introduced new deposit products for senior
citizen, female and other niche market.
 Quick decision making to respond the
Market situation
6 Below one year asset and liability The possibility of interest rates moving  In accordance with ALCO recommendations,
mismatch (any interest rate hike upward again is high in the medium to the Liability Division was able to offer
would impact core spreads as long-term and hence itis vital to pursue attractive rates to secure greater level of
funding cost will tendto go up in long-term funding for sustaining healthy one year and longer deposits during the
such a situation) margins. period.
 Managed to secure long-term borrowings
between two to three years at fixed rates
Sl. No. LBFL’s Key Opportunities Outlook on Key Opportunities Key actions taken to build on Opportunities
1 Growing middle income group More than 10% people are moving from  More focused on the Retail and SME
and increase in purchasing the low income group to middle income business.
capability group  Increased distribution channels to reach
out to more people.
 Required ICT environment is in place
2 Reducing deposit rates in Due to the presence of excess liquidity,  More focus on public deposit collection
commercial banks commercial banks are reducing deposit with varieties of deposit products with
rates, which could be LBFL’s way of attractive rates
lowering its cost of fund
3 Introduction of dual Currency Services like dual currency and online  Focus on dual currency credit card and
credit cards and online transaction facilities will attract more offering online transactional facilities
transaction facilities customers from different market niches to enhance brand image, attract new
customers, and avoid losing existing
customers.
4 Introduction of Mobile banking Current trend and success of mobile  Steps have been taken to allow our deposit
services banking in grass root level indicates the clients to pay their installments through
huge growth potential in this segment different mobile banking service vendors,
and few more services will be up and
running by 2018
5 Expected sound GDP With GDP growth set at 7.4%, we could  Maintaining commendable core business
growth levels and improved expect financial service sector to sustain growth, taking advantage of the positive
infrastructure would continue credit growth well above 15%. business conditions and steady economic
to give impetus to financial growth trajectory.
products.  In spite of being in a highly competitive
market, our total lending and deposit
growth YOY stood commendable.
6 People prefer fixed income Term The stock market remains volatile  Management continued to implement
Deposit products as opposed to and property value is declining. These successfully planned deposit mobilization
risky investments in the Stock two trends should continue to boost strategy which sustained envisaged growth
Market investment in fixed income securities. levels.
 Our branch network played a more
significant role in mobilizing deposits,
taking advantage of the expanded reach
taken place within the last three years.
7 More funding opportunities from We could expect greater number of  International funding sources remain a
the foreign market international deals to be struck by the viable option and the company will look
sector in terms of funding. Rating will play into these sources when optimal pricing can
a significant part. be obtained.
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Sl. No. LBFL’s Key Threats Outlook on Key Threats Key actions taken to counter Threats
1 Wide range of product choice for We could expect real estate prices to move  Sustained an aggressive deposit
the depositors to invest, such as upward and the stock market to remain mobilization drive with attractive returns
Government Sanchaya Patra, the attractive with better foreign investments. to investors throughout the year, supported
share market, real estate and by continuous advertising and promotion.
other fixed income securities.
2 Growing competitive pressures More fierce competition is expected from  Customer oriented services should be in
the competitors. Quality and timeliness of place.
services offered would be key in attracting  Intensive customer awareness campaigns
business and retaining existing portfolios. in key operating locations should be
undertaken.
3 Shrinking margins due to heavy In gaining strategic advantage, the sector  More focus on high yieldgenerating lending
price competition would continue to pursue low cost funding products such as personal loan, credit
options and high yield lending avenues to cards, mortgage loan, auto loan, etc.
improve margins.
4 Newly licensed NBFI and Banks More fierce competition in acquiring  More focus on building a stronger client
clients base through uncompromised quality to
retain and attract new business.
5 Turnover of skilled employees Due to the skills and learning obtained  Regular reward campaigns, motivational
through quality training in LBFL, the and other non-financial programs are
employees attract employers in the same conducted throughout the year to retain
industry. skilled employees.
2. PESTEL Analysis
Influencing Factor Impact on LBFL LBFL’s Approach
 Political Stability  Stable political situation has a positive  LBFL always try to negate the unstable
 Annual Budget impact on LBFL and unstable political political situation by taking prompt strategic
situation has negative impact on LBFL action on interest rates, business volume,
POLITICAL
 Change in different components of strategic shift on business focus etc to

yearly budget like tax rates, interest generate the business and achieve lending
waivers, refinancing facilities has target.
impact on different products and  In the stable situation try to generate a
projections of LBFL synergy.
 LBFL always adjusts their internal guidelines
and projections as per the directives
provided by Bangladesh Bank
 Around 7% stable GDP  Due to subdued inflationary level  LBFL pursues core business growth in
growth and increasing income level, retail Retail and SME capitalizing on emerging
 Growing economic business will enjoy above average opportunities, supported by our increased
development activities business growth. presence across the country.
 Lowering interest rate  Corporate and deposit business  Initiating prompt recovery action on overdue
regime remain very competitive as interest contracts through close supervision and
 Inflation control rates falling to one digit level. effective recovery strategy.
ECONOMIC
 Increasing income level  Rise in overall NPL of the country as  Expand delivery channels
 Fluctuations in capital some of the regional clients find it  As a highly customer receptive organization,
market indices difficult to repay. we continued to identify ways of expanding
 Rise in capital market indices our product offerings and services to cater to
might encourage people to choose wider customer requests.
investment options over safe saving  Generate a strong MIS system to gather
instruments, which in result, could and disseminate economic and business
cause liquidity crisis and vice versa information.
 Make quick decisions on product pricing
through ALCO responsive to the market
need.
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LankaBangla
 Increased Income level  Growing GDP and per capita  We emphasized the importance of creating
improved the standard of income driven by the economic customer awareness and building customer
living. progress have paved the way for relationships.
 Growing competition better social conditions and quality  We revisited our internal core operational
 Improved access to of life for society. processes, for purpose of streamlining parts of
financial services  LBFL can be the substitute for our work process to cut down on lead times
 Financial Inclusion region or community-based lending and to afford a more effective service to our
 Customer sophistication authorities who charge very high customers.
 Changing Lifestyle interest rates  We afforded greater autonomy to branches to
 Non-Regulated lending handle deposits affording them full technology
authorities support and manpower to cater to wide
 Population and literacy ranging customer requests.
rate  Being a people-oriented Company, we
remained receptive to people’s needs as a
socially responsible corporate and a caring
employer.
SOCIAL
 Numerous CSR initiatives were initiated for

the betterment of society beyond commercial
boundaries. Internally, we continued to adopt
sound human resource practices to nurture
our valued staff.
 LBFL has shifted its focus towards retail
business and introduced products like Titanium
Credit cards et. to meet growing customer
needs efficiently
 LBFL has 25 operational branches all over
the country and our Mobile lending officers
working in different areas are paving the way
for future branches
 We emphasized the importance of creating
customer awareness and building customer
relationships. So, we always consider areas
with high population and literacy rate as
potential business operation region
 Rapid technological Role that ICT plays in creating operational  Required updates were made to the core ICT
advancement. efficiency and generating Management system to make it more effective and meet
 Decisive factor to gain Information Systems (MIS) for effective user requirements and also to accommodate
TECHNOLOGICAL
competitive advantage decision making has become vital for rapidly changing demands of the industry.
 Growing demand for LBFL  Additional MIS reports were developed on a
mobile banking services periodic basis to cater to information needs of
Ways through which LBFL can use this key divisions, for decision-making.
trend in its best interest  We have already introduced mobile banking
services for our deposit clients in collaboration
with Bkash and Surecash and going to expand
these services in near future
Green Banking initiatives Green banking initiative has a long Green banking initiative has a long term effect on
ENVIRONMENTAL
term effect on both environment and both environment and economy of the country and
economy of the country and helps in helps in cost reduction as well
cost reduction as well
Highly regulated business LBFL is regulated by the FI act 1994 and Apart from FI act 1994 and other prescribed
environment other periodic guidelines provided by guidelines, LBFL also follows the instructions
Bangladesh Bank from time to time regarding bank rates, repo & reverse repo and
statutory reserve requirements mentioned in
LEGAL
monetary policy statements published semi-

annually by Bangladesh Bank
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Annual Integrated
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3. Industry Forces Analysis

Influencing Factor Influence on LBFL LBFL’s Approach
 Customer perceptions of LBFL  Effect on customer relationships thereby  Strategic emphasis on serving particular
Customers
brand. impacting long term revenue. customer segments (Retail and SME).
 Switching of customers.  Customer focused strategy
 Brand loyalty.  Delivering uncompromised service to
 Customer relationship. retain customers.
 Upholding and strengthening LBFL brand
to avoid switching.
 Supply of funds (deposits and  Impacts on interest rate  Appropriate sourcing of fund as per the
borrowings)  Effect on revenue and margin. company policy (reducing dependency
 Interest rates on borrowings  Operational efficiency on bank borrowing).
Suppliers
and deposits  Offering competitive interest on deposits

 Supply of materials and good relationship with banks for
better negotiations of borrowing rates.
 Proper selection of vendors to ensure
smooth supply of materials.
 Number of players in the  Impact on the market share  Engage in competitor analysis to
industry  Loss of revenue to competitors understand the competitors’ strategies
Competitors
 Strategic directions of  Customer switching and respond accordingly.

competitors  Develop or revise short and long term
 Generic strategies followed- strategies in relation to competitors’
Focus/Differentiation/Cost movement and impact on market share.
leadership  Give emphasis on innovative value
creation ideas to outplay the competitors
 Availability of substitute  Threat of loss of market share with  Undertake competitors’ product
products increasing substitutes in the industry. market analysis to understand their
 Aptness of substitute products.  Impacts of service quality leading to price structure, product features, and
 Relationship Management. customers switch brands. performance.
 Carry out product aptness analysis to
Substitute
 High number of commercial  Loss of revenue to substitute products

bank and FIs  Fierce competition among banks and FIs. understand the threat of substitutes at a
continuous basis.
 Differentiating products to lock in
customers and reduce substitute effects.
 Adopt appropriate relationship
management techniques to retain the
company’s profitable customers.
 Emergence of new Banks and  Threat on market share and possible  New product development to take first
New Entrants
NBFIs in the industry licencing reduction in industry dominance. mover advantage and deter possible
through Bangladesh Bank  Employee poaching competition from new entrants.
 Patents and protection of  Enhance the brand value of LBFL
intellectual property  Maintain a sound and healthy employee
friendly environment within the
organization
 Government regulations for the  Regulations affecting operations- source  Thorough compliance of laws and
financial sector. of funds and channelling of funds. regulations as per Bangladesh Bank and
 Local and Foreign investment  Taxation policies impacting profits. other Government Bodies.
limits.  Laws and regulations limiting  Maintaining good and professional
relationships with Government
Government
 Taxation policies. businessoperation and revenue streams.

 Government stability. representatives to lobby for policy
 Frequency of changing laws and implementation which is beneficial to
regulations. the company and the industry.
- Policy includes taxation rules,
capital limits, FDI limits, government
subsidies, etc.
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Management Discussion and Analysis Drivers Guiding Our Strategy
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LankaBangla
DRIVERS GUIDING
OUR STRATEGY
LankaBangla believes in long term growth story of Bangladesh. However, at the same time we must acknowledge that connecting
short term goals are vital to reach our long term dream to live as a developed nation eradicating many dimensions of poverty,
promoting gender equality, promoting peace and security and sustainable human development.
Bangladesh has been experiencing 6%+ GDP growth over the last few years. Our rising per capita income, growing export basket,
higher contribution in UN peace keeping force is a testament that we are rising as a nation. However, there remains a series of
social, environmental and economic challenges to reach our long term goals. We recognize the interdependence between economic
success, social well-being and environment health of the country and the long term sustainability of LankaBangla as a financier. We
want to contribute in the long term goals we have developed for a prosperous future we want.
Long Term Goals
KEY INPUTS MATERIAL MATTERS STRATEGIC FOCUS AREAS

Material Matters are derived Credit Growth in Banking Diversifying Portfolio with
from major macro trends, our Industry sustainable innovation
unique strategic context, an
Understanding Our Clients Creating Convenience for our
analysis of our business risks Customer
and opportunities and most Motivating Our People
importantly, the needs of our People are the business
Embracing Innovation
key stakeholders- staff, clients, Create a Sustainable Brand
shareholders, regulators and the Leveraging Our Investments in
communities and environment in Information Technology Prudent Balance Sheet
which we operate. Management
Increased Demand on
Governance and Risk
Major Macro Trends Management
Lankabangla’s Unique Growth Opportunities in Retail
Strategic Orientation and SME Segment
Needs of Our Stakeholders
Material Matters that Affect Our Strategies Strategic Focus Areas

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Management Discussion and Analysis Material Matters that Affect Our Strategies
181
MATERIAL MATTERS Annual Integrated
Report 2017
THAT AFFECT OUR STRATEGIES

Our material issues are those issues that we believe could seriously affect our commercial viability and our social relevance. These
include factors influencing economic growth and political and social stability, and those which impact on how our stakeholders
perceive the group and its role in society. Effectively managing our material issues is critical to achieving our strategic objectives
and meeting our stakeholders’ expectations.
Materiality Determination Process:
The materiality determination process complemented our day-to-day stakeholder engagements, going beyond these engagements
to place particular emphasis on aspects that are likely to influence the social, economic and physical environments in which we
operate. Our material matters are our primary risks and opportunities. These have been the key factors that have significant impact
on our ability to deliver sustainable value to our stakeholders. Our approach in identifying and evaluating material matters is very
comprehensive. Below is our approach of chalking out material matters that guides our strategic priorities and our future.
Identification of Prioritizing Business level Continuous

potential material potential issues integration assessment
matters From the universe of The prioritized The process of
The identification of the potential matters potential matters identifying and
potential material identified in the 1st provide basis for the prioritizing the material
matters is an enterprise step, we prioritize the formulation of the matters is an ongoing
wide phenomenon. issues that have the long term/short term process. We make
All business units and greatest relevance business strategies and continuous assessment
divisions are engaged and highest potential plans. of the previously
to put import on this. impact on our identified material
Alongside, all other business and in line matters. This is the
stakeholders’ feedback with the stewardship step where we always
is considered. Potential of the environment focus most to remain
areas of impact and community competitive in the
that are assessed commitments we have. business.
include financial, The responsibility
environmental, social, of the prioritizing
competitive, legislative rests on the top level
and regulatory. management and
board of the directors
give the endorsement.
Material Issues and Strategic Response:

Following engagement with certain internal and external stakeholders, we have determined our material issues into the following
matters.
Material Issue Strategic Context Strategic Response of LankaBangla
Credit Growth Private sector credit growth, which  Private sector credit growth momentum in 2017
is often believed to be one of the proved to be very beneficial for LankaBangla as we
most important leading indicators for have already laid foundation for SME and Retail
business in the preceding years.
macroeconomic growth, is projected to
edge up marginally in FY17 at 15.8% and  The declining interest rate environment would be
gradually consolidated at 16.8% in FY18 helping in tapping good SME Clients.
as targeted in the national budget. The
gradual acceleration in private sector  LankaBangla has the strength to go for retail financing
credit is a good indicator for the economy business more aggressively.
to head towards 7%+ growth.
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Management Discussion and Analysis Material Matters that Affect Our Strategies
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LankaBangla
Material Issue Strategic Context Strategic Response of LankaBangla
Understanding Our Clients Our clients are the reason we are in  Instill a culture that values excellent client experiences,
business. To provide them with the ethical and fair conduct and market integrity.
products and services they need, we
must understand the environments in  Constantly leverage new technologies to meet
which they live and work, their immediate changing client expectations and enter partnerships
needs, and their long-term plans in to drive innovation.
respect of their careers, their businesses,
 Ensure appropriate technical capability and skill to
their personal lives and their families.
prevent our clients from being exploited.
Motivating Our People Our ability to meet our objectives,  Ensure that we have a diverse workforce with the
deliver value to our clients, comply with right skills and capabilities to successfully execute our
our regulatory obligations and create strategy.
shareholder value depends on our people.
We strive to work with people who share  Maintain an ethical and risk-aware culture that
our passion for Lankabangla, who see the upholds our principles and values.
opportunities inherent in the diversity
 Capacitate our people to perform in a world of rapidly
and its people, and who are committed
changing client expectations, technology and ways of
to putting the client at the center of working.
everything we do.
Embracing Innovation In a world of constant technological  Deliver new products and services to market quickly
evolution, we need to be at the forefront without compromising system stability.
of new ideas and leverage technology to  Develop a culture that encourages innovation
provide exceptional client experiences and and challenges established processes, with a view
gain competitive advantage. Innovation to delivering excellent client experiences that
extends beyond our products and services differentiate us in a low-cost competitive environment.
to how we operate by way of our internal  Build resilience to change among our people.
processes and systems. These must all  Find ways to address social challenges through
innovation.
fulfill the ultimate objective of placing our
clients at the center of everything we do.
Leveraging Our IT enables us to serve our clients in a way  Balance client expectation for innovation against
Investments in that is more convenient and that makes maintaining system stability.
Information Technology their financial transactions more reliable
and secure. In addition to being an enabler  Constantly monitor and anticipate criminal
of our strategy, IT is also a competitive exploitation of our systems and cyber-attacks on
advantage. We use our understanding of cloud services, and deploy prevention and mitigation
measures.
our clients to provide them with value-
added, uninterrupted IT products and
 Ensure that our systems maintain the privacy of client
services. Many of the Bangladesh’s people information and put additional measures in place to
still live in remote areas, where IT can be protect our data stores.
used to overcome challenges in delivering
services.
Increased Demand on The latest loan scams in the financial sector  Focus on risk management on enterprise level.
Governance and Risk brought the onset of increased regulation
Management to ensure the soundness of the financial  Ensure closer working relations and partnerships with
sector. The increased reporting to central regulators.
bank, offsite supervision and regulatory
requirements like Basel III would justify  Implement capital adequacy and liquidity
for more disciplined financing, more requirements.
compliance and more efforts to avoid
 Focus not only on returns but also on the risk and
reputational risk.
capital requirements of these returns.
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Management Discussion and analysis Strategic Focus Areas
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STRATEGIC Annual Integrated
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FOCUS AREAS
People are the

business
Creating Convenience Create a

for our Customer Sustainable Brand
Diversifying Portfolio with Strategic Prudent Balance Sheet

sustainable innovation Focus Areas Management
LankaBangla Finance Limited – reinforces companies’ commitment to has been disbursed in the year compared to BDT 6,427 million
its most significant constituency in 2016. Annual growth of total disbursement stands at 46%.
 Develop deep insight into customers’ needs Factoring portfolio reached at 1,940 million as at the end of
 Deliver pioneering products of outstanding quality and value 2017 experiencing a 68% Y-O-Y growth.
 Delight our customers at every touch point During the year 2017, the Company has continued to
Our Five strategic focus areas support the achievement of our delivery
concentrate more on Retail segment by expanding several
targets which are measured and re-evaluated on an ongoing basis.
branches and increasing manpower in retail financial activities.
These delivery targets are reflected in the strategic focus areas referred
The Company achieved 70% yearly growth in this segment.
to below.
Retail disbursement for the year 2017 was BDT 23,442 million
compared to BDT 13,130 million of previous year.
1. Diversifying Portfolio with sustainable
innovation 1.3 “Super shop” service in Capital Market
Developing a range of options for growth, including Retail & LankaBangla through its market leader subsidiary LankaBangla
SME exploration, new opportunities for promoting Corporate Securities ltd provide one stop Brokerage services, NITA
growth, value-accretive opportunities at capital market both and Internet Trading Services, Foreign Trading Services,
in Primary market supply creation as well as secondary market CDBL Services etc. We are backed by the strength of a
vibration, and maximizing the relationship with large corporate comprehensive Research Unit, which provides a range of
house of the country within our portfolio is our focus strategic services from company, industry and country research to
area from business arena. corporate valuation of the important functions of us is to
carry out capital market research for ourselves and our valued
1.1 Momentum in SME customers. Our Research & Analysis Department is one of the
SME, the heart of growth of economies worldwide, is emerging most important departments which is solely dedicated to these
as the most powerful and sustainable pillars of Bangladesh functions. A competent Publication Department publishes the
economy. Our country is moving towards SME led industrial monthly magazine Market Pulse on regular basis that provides
development, and as such growth of SME Financial Service in a thorough overview of the current state of economy and
LankaBangla Finance is also noteworthy. In 2017, SME loan stock market. Our another hand LankaBangla Investment is the
disbursement of BDT 7,074 million has been made compared market leader in supply creation of primary market in capital
to BDT 3,865 million in 2016, thereby resulting in a 83% growth. market. It completed price discovery of 1st issue under revised
At the end of 2017, SME portfolio stood at BDT 15,949 Book- building Method in 2013 and Launched AlphaPlus-Initial
million compared to BDT 6,905 million in 2016 resulting in Received Consent for Public Subscription of UPGDCL under
131% growth in portfolio. Management has taken a series of Revised Book Building Method
strategies to foster more disbursement in this sector and boost
the portfolio size to a sizeable amount as this sector is less rate
2. Creating Convenience for our Customer
sensitive and more profitable. LankaBangla Finance Limited has reached to the major cities
and townships of the country by this time. We have 25
1.2 Extended focus in Emerging and Retail Business branches across the country to serve even retail businesses/
In 2017 LankaBangla continues its focus on extending Emerging clients with a close proximity. LankaBangla Securities has
and Commercial Business segment. A total of BDT 9,358 million another 10 branches around the country.
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LankaBangla
2.1 Doing Business with Smart Phone ensures that diverse perspectives are integrated into business
We have launched “FinSmart” for our customers successfully objectives and key human resources processes.
from 13-Apr-2016. LBFL Mobile App “FinSmart” is a smart 3.1 Nurture High skilled talent pool
solution to get Products and Services related information
At LankaBangla, we are powered by talent. We consider our
of LankaBangla Finance Limited. For Example: If you have
human resources as the most important asset and mobilize
LankaBangla Credit Card, you can see your credit limit,
people and teams by engaging them in cutting-edge financial
outstanding amount, minimum dues etc.
industry practices. An attractive employer, we offer a broad
2.2 The Portal spectrum of opportunities for both professional and personal
The financial world around us is changing with an inevitable development as well as encourage a work environment that is
power of information. The one who has it right on time characterized by respect, trust, cooperation and collaboration.
acquires an ability to change the world around him. The faster We do so because the skills and enthusiasm of our employees
a person has the access to information, the better decisions are a major force that helps us achieve sustainable results.
he makes. To cater to this demand, we are the first to launch 3.2 Work life Integration
a full-fledged financial portal in Bangladesh. This is a platform
We encourage employees and managers to discuss both
that will not allow you to leave the page for even one second
business and personal goals. Work/life flexibility creates a
because you will not want to! Every possible information that
competitive advantage and addresses the needs of our multi-
you might be requiring, LankaBangla Financial Portal brings
generational workforce. We conduct different recreational
that at your desktop. From market news to DGEN graph and
program with our jems like Football tournament, Family day,
from Economic Indicators to various Analyst Tools, everything
women’s day throughout the year.
is available in this information hive. As the portal is updated on
a real-time basis, it will never let you fall behind. 3.3 Creating Satisfaction at resources end
LankaBangla has always been passionate about Human capital
2.3 I Frame
management and takes responsibility for developing employee
LankaBangla Financial Portal proudly presents “Investor
potentials and leveraging employee skills in the organization.
Relationship Pages” so that anyone can add value to his/her
LankaBangla continues to implement HR policies and practices
company website by strengthening the investor relationship that are aimed at growing and developing employees and
section. We will provide the solution and maintain it for clients. ensuring their active contribution towards the achievement
Complex financial data and news, delivered correctly and of corporate goals. LankaBangla believes that the skills and
consistently, equally to all stakeholders at the same time. How enthusiasm of its employees are a major force that helps it to
important are your existing shareholders and new potential achieve sustainable results. LankaBangla significantly considers
investors to your Listed Company? Presenting a fast and cost human resources at corporate level, professional level, social
effective way for you to deliver shareholder value, over and level and overall national level. In this process LankaBangla not
beyond expectations, and stay ahead of BSEC legislation. only identifies the value of human resources but also identifies
3. People are the business and report investment made in human resources.
Our executive leadership team, led by our CEO, champions 4. Create a Sustainable Brand
diversity and inclusion at LankaBangla. To enable us to work
LankaBangla is one of the most trusted and respected
together effectively across the Company, the leadership team
Line ownership with

specialist support
Roles are clear- define the responsibi-

lites and accountabilites, and exactly Capable, engaged and
effective employees People Results
how they are connected to every part of
the business
Employees invloved
and engaged
Leadership
Technical, commercial
and operating systems
Business process-detailing how all the
tasks flow and fit together, and excatly In control and capable Systems Results
how people interact within the operating plan of work
system to get work done.
Measure and review
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Annual Integrated
Report 2017
financial institutions of Bangladesh. The Company is engaged 4.3 Support to underprivileged

in the country’s economic progress through fostering LankaBangla is an inseparable and embedded part of the
entrepreneurship by disbursing loans to SME and arranging society. In addition to its economic role in society, LankaBangla
and disbursing loans to corporate customers. LankaBangla also has several other roles and responsibilities towards society
provides a better standard of living to the country’s citizens by viz. responsible conduct of business activities while pursuing
disbursing a wide range of retail loans. The Company ensures economic gains; the social and environmental responsibilities
the financial security of a large population cross section by of the business towards its stakeholders; and business’s
providing access to high-quality, interest-yielding deposits. contributions that would benefit the society at large. Our
4.1 Investment in Brand major CSR focus is to identify and support the underprivileged
residing within the society.
LankaBangla is continuously persuing to uphold his Brand
value to Existing/Prospective Customers, Business Partners, 5. Prudent Balance Sheet Management
Investors and other stakeholders. We are arranging Corporate
Night, Treasury Nights to celebrate our relationship with 5.1 Strengthening our Capital Base and Improve
growth partners. Our customers are honoring throughout the Our Funding positions
year in different festivals to remind them that LankaBangla At LankaBangla Finance Ltd, Capital Management Policy sets
feels their precious support to us in every step of success. out the principles and guidelines for effective and prudent
capital planning, usage, and management. At LBFL, capital
4.2 Assume Environment Stewardship planning is done in alignment with the company’s risk appetite
LankaBangla Finance has already established its “Green and profile. Capital goals are set to incorporate both normal
Banking Policy”. A Green Banking Unit (GBU) has been formed and stressful business conditions. As such, the goals take into
with the task of developing policies, planning and administering considerations current and future regulatory requirements and
the initiatives. economic conditions, and the expectations of stakeholders.
LankaBangla takes pride for being one of the financiers of a
project having 5.2 Diversify our Funding Sources
 one of the largest biological Effluent Treatment Plant As per our plan to become self-reliant and reduce the pie of bank
(ETP) of the world, intermediary financing, Liability division has been encouraged
 the first auto brick manufacturing project to implement to increase the Term deposit portfolio in last couple of years.
flexible fuel technology trapping harmful CO2 emissions, Public deposit to back up the aggressive business growth was
 Country’s first lube recycling plant and so forth. our key strength in last few years. It helps us to reduce our cost
of fund significantly and make our borrowing side less sensitive
Moreover as part of our response to the environment we at office;
to interest rate change. Beside this sustainable source of fund
 Only allow rational use of energy and promote the spirit
we raised BDT 3,000 million in 2014 through an issuance of
of environment friendly action plans
Zero Coupon Bond. It was the largest issuance of such kind of
 Use ISO certified paints while furnishing our office premises.
Bond till early 2016. LankaBangla is the most active money
 Introduced automated e-alert system to ensure secured
market player with different short term instruments in the
financial information flow to its clients in Bangladesh.
country.
 Launch of e-mail based Customer Statement Delivery
System to protect the environment by eliminating paper-
based activities at office, protecting and preserving our
environment for the next generation.
www.lankabangla.com
Management Discussion and Analysis Human Resource Accounting
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HUMAN RESOURCE
ACCOUNTING
Key performance indicators of HR practices and
decent work responsibility
Employment: Total by Employee type, Region and Gender
The tables and graphs given below provide information on total
workforce by region, employment type, age analysis, service
analysis, gender.
LankaBangla has opened 05 new branches in 2017 to serve the
countrymen. These new branches are in Keraniganj, Board Bazar-
Gazipur, Faridpur, Dinajpur and Savar. Now the total number of
branches stood 25 including Head Office and 1 Booth in Dhaka.
Few new branches are in pipe line for opening in 2018 as we are
planning to reach every divisions of the country.
Division-Wise Breakdown of Human Capital as at December 31
2017 2016
No. of No. of Employees No. of No. of Employees

Divisions Branches Male Female Total Branches Male Female Total
Dhaka 13 535 115 650 9 430 89 519
Chittagong 4 73 8 81 4 67 5 72
Sylhet 1 16 2 18 1 13 2 15
Khulna 2 30 4 34 2 26 1 27
Rajshahi 3 26 4 30 2 17 3 20
Barisal 1 11 2 13 1 9 2 11
Mymensingh 1 10 1 11 1 8 0 8
Total 25 701 136 837 20 570 102 672
Employment Type: Full-Time, Contractual and PMO Employment Type: Full-Time, Contractual and PMO
As we have opened 05 new branches, to boost-up the liability Employment
sales and sales of personal and corporate products and to explore No. of Employees Composition in % Growth %
Type
the lending opportunity in the market, we have recruited new
employees in 2017 as well. The percentage of full-time, contractual Full-Time 2017 2016 2017 2016 2017
and PMO has increased by 21.04% in 2017 comparing to 26.01% Male 534 450 90% 91% 18.67%
in 2016. There is a growth of 39.20% in contractual employment Female 58 46 10% 9% 26.09%
and 18.27% in PMO in 2017. There is only 19.35% growth in full
time employment in 2017. This full time employment growth is Total 592 496 100% 100% 19.35%
due to opening of new branches. LBFL provides equal employment Contractual 2017 2016 2017 2016 2017
opportunity to both male and female. There is a significant growth
Male 167 120 68% 68% 39.17%
in female employees in full-time and contractual positions which
is 26.09% and 39.29% respectively. Overall the number of female Female 78 56 32% 32% 39.29%
employee has increased by 15.44% compare to 33.33% in 2016. Total 245 176 100% 100% 39.20%

PMO 2017 2016 2017 2016 2017

Male 832 684 82% 80% 21.64%
Female 178 170 18% 20% 4.71%
Total 1010 854 100% 100% 18.27%
All Employees
2017 2016 2017 2016 2017
of LBFL
Male 1533 1254 83% 82% 22.25%
Female 314 272 17% 18% 15.44%
Grand Total 1847 1526 100% 100% 21.04%
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Age Analysis of Employees as at December 31

Non-Management
Management Cadre Total 2017 Total 2016
Category Cadre
Male Female Male Female Male Female Male Female
51-60 years 4 0 0 0 4 0 4 0
41-50 years 63 5 8 0 71 5 54 4
31-40 years 331 29 44 19 375 48 307 31
21-30 years 125 24 126 59 251 83 205 67
20 years & below 0 0 0 0 0 0 0 0
TOTAL 523 58 178 78 701 136 570 102
Service Analysis of Employees as at December 31

Non-Management
Management Cadre Total 2017 Total 2016
Category Cadre
Male Female Male Female Male Female Male Female
16 years & above 19 1 3 0 22 1 17 0
11-15 years 11 1 7 0 18 1 16 2
6-10 years 56 10 14 0 70 10 59 8
5 years & below 437 46 154 78 591 124 478 92
Total 523 58 178 78 701 136 570 102
Employees by Grade
We have only two grades; Management Cadre and Non-Management
Cadre. Number of Management Cadre has increased by 17.14% in
2017 compare to 23.63% in 2016 and Non-Management Cadre
by 45.45% compare to 67.62% in 2016. Now Management Cadre
accounting around 69% of the total staff strength and Non-
Management Cadre accounting for 31%. The number of employees
of all grades increased over the previous year with the expansion of
new branches. This growth in Non-Management Cadre helps us to
reduces the staff cost in 2017.
2017 2016
Category No. of No. of
Percentage Percentage
Employees Employees
Employment Status
Number of confirmed employees have increased by 15.68% compare Management Cadre 581 69% 496 74%
to 11.38% in last year and employees under probation have increased Non-Management
256 31% 176 26%
by 40.00% compare to 102.70% in 2016. Percentage of contractual Cadre
employees have decreased by 39.20% compare to 67.62% in 2016. Total 837 100% 672 100%
This decline in growth is the impact of learning curve that helps us to
increase the market share without acquiring additional headcount. New Employees Hired
No. of LBFL is a performance driven organization. We have focused more
Status of Employment as at Composition in %
Employees on improving the performance of existing employees rather than
December 31
2017 2016 2017 2016 recruiting new employees to generate our business. During the
Confirmed in Service 487 421 58% 63% period 2017, we have to hire 296 new employees which is -0.67%
Undergoing Training or on compare to a high growth rate of 122.39% in 2016. Although we
105 75 13% 11% have opened new branches as well as we had high achievement
Probation
Contractual 245 176 29% 26% targets but the rate clearly indicates our performance driven
Total 837 672 100% 100% culture. Details of which by employee grade are given below:
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No. of Employees Hired Geography-wise Employee Turnover:

Category
2017 2016 Turnover (No.) Turnover %
Category
Management Cadre 165 156 2017 2016 2017 2016
Dhaka 104 115 16% 22%
Non-Management Cadre 131 142 Chittagong 12 13 15% 18%
Sylhet 1 5 6% 33%
Total 296 298
Khulna 6 4 18% 15%
Rajshahi 7 4 23% 20%
Employees Attrition Barishal 3 3 23% 27%
Though the financial market is very competitive and there is good Mymensingh 0 1 0% 13%
employment opportunity for business and back office employees Total 133 145 16% 22%
in the market, attrition rate has decreased marginally compared
to last year. A total of 133 nos. of employees have resigned from
service during the year under review which includes both full
time employee and contractual employee comparing to 145 nos.
of resignations in 2016. So we can say that attrition rate for the
year 2017 is 15.89% comparing to 16.96% in 2016. Of the total
employees resigned, 83% were male and 17% were female.
Gender-Wise
Gender-Wise Percentage of
Percentage of
Turnover Employees
Category Attrition
2017 2016 2017 2016 2017 2016
Male 111 119 83% 82% 16% 21%
Female 22 26 17% 18% 16% 25%

Benefits Policy and Regime
The company follows a policy of continuous improvement in
Total 133 145 100% 100% 16% 22% respect of the working lives of its employees. In addition to this,
LankaBangla Finance Limited has taken further steps to enhance
the facilities and benefits afforded to its staff:
 Festival Bonus
 Provident Fund
 Gratuity
 Staff loan facility at concessionary interest rate
 Home loan facility at concessionary interest rate
 Medical benefits enjoyed by all employees including life
insurance and hospitalization insurance to tide over any
personal exigency
 Annual increment
 Performance related bonus
 Mobile allowance for all permanent employees
 Motorcycle for employees who need to visit outside office on
regular basis
 Travel allowance & daily allowance
Employee Attrition Rate by Age Group:  Cost sharing for Professional qualification and annual
membership fees.
No. of Employees Left  Fuel allowance and transport allowance
Category  Disturbance allowance for temporary transfer
2017 2016  Reward and Recognition is created to set up a systematic
51-60 years 0 1 process of expressing appreciation for employee's hard work,
41-50 years 5 8 dedication and contribution to the company
31-40 years 60 62  LBFL plan, design and arrange various job specific soft skills
21-30 years 68 74 and technical training based on individual need assessment
20 years & below 0 0 and business requirement
 E-Learning for all Management Cadres
Total 133 145  Health insurance for parents of the employees
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Occupational Health and Safety- Employee Representation external, e-Learning and overseas training. Given the company’s strong
on Health and Safety Committees commitment towards developing a learning culture, it is pertinent to
note that employees underwent a total of 32,334 man-hours of training
LBFL and all of its employees are to protect and enhance the environment during the year on various knowledge building programs whereas it was
in which they live. All will comply with all laws and strive to do more. 27,507 man-hours in 2016. It is to be noted that we are also focusing on
LBFL do not compromise safety or environmental protection for profit. providing trainings to our PMOs and HRCs as well.
LBFL believes environmental stewardship as an obligation and support
this commitment with the necessary personnel and financial resources. 2017 2016
Training
The following principles will guide and measure our corporate goals and Type No. of No. of Person No. of No. of Person
objectives in Health, Safety and Environment: Programs Participants Hours Programs Participants Hours
 We are committed to continuously improving our Health, Safety and Overseas
25 29 720 11 23 680
Environment performance; Training
 We will continually promote employee safety on and off the job; External
 We conduct our business so it meets or exceeds all applicable laws 57 189 2,836 67 209 3,934
Training
and regulations and minimises risk to our employees, the public and
the environment; In-House
21 2,320 16,562 54 3,192 17,479
 We will endeavour to do business with companies and contractors Training
that share our expectations for Health, Safety and Environment E-Learning 26 6,108 12,216 16 2,707 5,414
performance and commitment and we will regularly assess their Total 129 8,646 32,334 148 6,131 27,507
performance;
 We will use our influence with companies in which we have Composition of Training Program
partial ownership so they will want to meet the Health, Safety and
Environment Commitment of the Company;
It is to be mentioned that, LBFL always focuses on internal training
 We believe all employees are responsible and accountable for
rather than external training in the year under review. We have
Health, Safety and Environment performance.
prepared our own customized course contents and hired specialist
for those programs. In some training, we have our own resources to
LBFL provides the necessary training to ensure that all the Company conduct the training. In 2017, of the total training, 16% was internal
personnel are sensitive to the importance of our Health, Safety and training, 44% was external training, 20% was overseas training and
Environment policy, understand the nature of the laws and regulations rest 20% was e-learning.
that govern our activities and have skills to implement our policy and
comply with Health, Safety and Environment requirements.
Learning & Development: Learning and Professional

Development
LankaBangla Finance is dedicated in improving the professional
competencies and performance of all its employees. In the year under
review, the company spent a total of BDT 14.36 million on training and
education programs for employees which is 15.26% more than the last
year. All employees are subject to an annual performance review, at
which they receive feedback on their performance and their development
needs and potential as identified by the reviewers. A new dimension in
Learning & Development is the introduction of E-Learning (Phase-2) for
all full time as well as for contractual employees. From business divisions, Training Hours by Employee Grade
each employee has to complete at least 9 mandatory modules and rest of
For creating a learning and development culture throughout
the divisions has to complete at least 6 mandatory modules. Each module
LankaBangla Finance Limited, we have provided training to our
is equivalent to 2 hours of training.
contractual staffs as well as our sales forces. This will be a continuous
In 2017, LankaBangla Finance has developed Branch Operation Manual learning process for them and helps them in honing their skills to
(BOM) which has been released on May 02, 2017. The BOM has been penetrate the market effectively and efficiently. Since we believe in
prepared to provide guidelines to the Branch personnel of LankaBangla “Growing Together”. We will design and conduct more specific training
Finance in daily branch operations. The manual has been processed for our sales forces and for our contractual employees as well in coming
on the basis of banking and financial institutions laws & practices and days.
is an attempt to provide guidance to the front office functionaries.
Besides e-Learning (Phase-2), BOM was launched in e-Learning in order 2017 2016
Training Type
to enhance the process of branch operations of LankaBangla Finance Male Female Male Female
Limited.
Management Cadre 19,293 1,892 19,034 2,226
Since 2011, the company has followed a systematic approach to the
identification of high performers among its employees. Through training, Non-Management Cadre 4,101 1,613 1,050 597
leadership competencies are identified and a pool of talent is created to
Product Marketing Officer 4,577 858 3,611 829
serve the long term needs of the company.
LankaBangla Subsidiaries 0 0 160 0
A total of 129 training programs involving 8,646 nos. of participants were
executed during the year. These programs were categorized as in-house, Total 27,971 4,363 23,855 3,652
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LankaBangla
Our Investment on Training key employee. This can happen along with the promotion
or performance appraisal decisions. At the same time, the
To further strengthen the staff development process, the company management may decide to groom potential talent among
increased its investment on training from BDT 12.46 million in the staff through training and development efforts and also
2016 to BDT 14.36 million in 2017. This approximately 15.26% ensuring the retention of the said talent within the Company.
increase will also support our intensive efforts to improve customer The HR Committee will review and develop structured Talent
experience across all business units, with long term benefits Identification Process along with required development
accruing to the company. In 2017, we have successfully completed interventions in this connection.
our E-Learning training for our Management Cadres and Non-  Succession Planning: Succession plans establish the
Management Cadres. identity of the individual who will step in and assume the role
of departed key employees, allowing companies to manage
Local Training Foreign Training the transition and continue performing. To ensure this, we
Year provide a mandatory of 10 days or more leaves at stretch to
Total Tk. in Total Tk. in employees so that their senior subordinate can play the role of
Hours Hours
Participants mil. Participants mil. leader and can have on hand experience of leading a team.
2017 8617 31,614 92.83 29 720 50.80 All employees of the company irrespective of their gender received
formal performance and career development reviews during 2017.
2016 6108 26,827 61.28 23 680 63.32 Annual performance reviews and the reviews conducted upon
completion of probationary periods help the company in identifying
2015 1846 16,790 49.17 9 224 20.63 and enhancing the salient skills and developing them as needed. As
mentioned earlier, as a part of promoting our internal resources, a
2014 1096 13,925 46.80 9 53 10.89 significant number of contractual employees have been absorbed
under Management Cadre in 2017.
Career Development Review & Succession Planning
In the context of complex and special condition of the relevant No of Employees
Year Growth Trend
industry, the primary assets of a business are the talents of its under Review
people, not the tangible and financial assets that make up the 2017 462 15.21%
balance sheets. The cost of finding key talent and replacing key
staff that leaves is expensive and time consuming. As a result, LBFL 2016 401 15.90%
has the following procedure to ensure that they can continually 2015 346 14.95%
develop and retain the talent that they groom through proper
recognition and career enhancement. At the same time, we try 2014 301 49.75%
to ensure that our operations do not become jeopardized due to
2013 201 53.44%
the sudden departure of any key staff, so this policy also allows for
some precautionary measures in terms of manpower planning.
 Human Resources Planning: Through Human Resources
Planning (HRP), we analyse our human resources needs under
changing conditions and develop the activities necessary to
satisfy these needs. It helps to ensure that the right numbers
of the right kinds of people are available at the right times
and in the right places to shape the organisational plans into
reality.
 Human Resources Information: In order to use the HR
data effectively, it is important to update and manage Human
Resources Information System in a structured manner. The
data can be easily managed by a customised database to suit
the management decision process of the Company regarding
HR. The following information is essential in order to come to
a sound and transparent decision regarding all HR issues such
as transfer, promotion or redundancy:
 Education record Employee Counseling
 Basic Personal Information For the sake of development of performance of employees,
 Training received they are to be counselled on one to one basis by their
respective supervisor in presence of HR and Cross Functional
 Job history Representative and provide deadline for improvement. HR will
 Performance rating review the improvement along with the Concerned Division
 Extraordinary awards achieved Head and decide next course of action. In case of Divisional/
Departmental Head himself/herself, MD/DMD will counsel the
HR Division, with the help of the ICT Division, ensures the design,
implementation and continued updating of the database. personnel and take corrective measures. After the given time if
their is no satisfactory result, HR in consultation with the Division
 Career Management: Based on the accumulated data, Head & the management; can take any decision regarding the
the management decides on the career progression of the concerned employees.
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Reward and Recognition

Reward and Recognition is a way to express appreciation for most of the work related problems can be resolved through
another employee's hard work, dedication and contribution to mutual understanding and discussion without initiating formal
the Company. There are many levels of Reward and Recognition, grievance procedure.
to ensure both small contributions as well as the larger ones is
recognized. Public recognition creates an environment in which Nonetheless, employees do get dissatisfied with various aspects
all employees feel positive about the work place and sets a good of employment at workplace that may not be resolved through
example and motivates others to perform at a higher level. informal procedure. Hence, this policy is framed to ensure that
Moreover, the person feels that his/her contribution is valued employees can seek redress for any work related grievances
by the organization. from superior authority.
We have different reward categories: Outlook

 Chairman’s Eminence Award: Once in a year In the coming year, through development of our ERP and
 MD’s Brilliance Award: Twice in a year core banking software, steps will be taken to further enhance
productivity, including a closer alignment of the workforce plan
 Departmental Proficiency Award: Twice in a year with the business plan.
 Individual Aptitude Award: Twice in a year
Feedback received during informal employee survey identified
 HEROES@WORK: By-monthly basis
specific areas where action is needed. This includes devising
 Dine with MD: Quarterly basis viable career paths for all staff categories; improving process
 “ICON” - A Recognition Program for Branch Managers efficiency by effecting transfers with a minimum of disruption
(BMS): Once in a year to the business; developing service level agreement at all levels,
 On top of it, we run several campaign for both assets and reducing turnaround time for service delivery and improving the
liability product throughout the year. support services available to employees.
We are working on creating an internal talent pool that is
Grievance Management competent to fill the vacancies that we currently have in
LankaBangla Finance Limited (LBFL) is committed to provide some positions, by enhancing managerial competencies
the best possible working conditions for its employees and through specific development interventions and by fast-
associated members. LBFL strives to ensure fair and honest tracking employees with high potential as well as by maintaining
treatment for all employees. Head of the Divisions, Managers, transparency with respect to the career progression and mobility
Supervisors and Employees are expected to treat each other for all staff. We will also strive to improve engagement amongst less
with mutual respect. productive staff.
Part of this commitment, LBFL does encourage an open and LankaBangla Finance Limited will continue to benchmark and
frank atmosphere in which any grievance may be shared provide a fair and attractive compensation package for all levels of
with management to get it resolved. LBFL does believe that staff, while improving the quality of the staff appraisal process.
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Management Discussion and Analysis Human Capital
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LankaBangla
HUMAN
CAPITAL
LankaBangla has always been very passionate about human capital  Annual increment is estimated to be granted at 10% on
management and takes responsibility for developing employee average over the years
potentials and leveraging employee skills in the organization.  Only FTEs and BSOs are considered and PMOs are excluded
LankaBangla continues to implement HR policies and practices from our calculation as they are not enrolled in the payroll
that are aimed at growing and developing employees and ensuring
system
their active contribution towards the achievement of corporate
goals. LankaBangla believes that the skills and enthusiasm of its  The future benefits of all employees in each year are
employees are a major force that helps it to achieve sustainable discounted at 10.84% to calculate present value, which
results. comes with the last on the run 20 years Treasury bond rate
plus 2.50% premium for risk.
LankaBangla significantly considers human resources at corporate
level, professional level, social level and overall national level. In  The value herein is an internal assessment based on above
this process LankaBangla not only identifies the value of human stated assumptions and subject to change for any deviations
resources but also identifies and reports investment made in with the assumptions.
human resources. As per model we have capitalized the total value of employees as
BDT Million Human Capital. Growth of 26% in the total value of human capital
in 2017 over 2016 was due to net addition of 153 head counts
2016 2017 of experienced and fresh recruitments that was required for the
expansion of the business and ensuring better quality of service as
Total employee benefits 652.45 806.28 well as customer satisfaction.
BDT Million
Training Cost 11.01 12.74
31-Dec-16 31-Dec-17
Employee Benefit Per Employee 1.09 1.08 Assets
Training Cost per Employee 0.016 0.017 Cash 700 1,155

Balance with other banks and 2,230 6,868
Gross Revenue per employee 8.92 9.48 financial institutions
Total Expenses per employee 7.16 7.49 Investment 2,130 2,128

Leases, loans and advances 46,749 61,914
Operating cost per employee 1.86 1.98
Fixed assets including land, 999 1,073
Operating profit per employee 1.76 1.99 building, furniture and fixtures
Human Assets 17,095 21,610
Total value of Human Capital has been ascertained BDT 21,610 Individuals' value 17,086 21,597
million in the year 2017 which was BDT 17,095 million in 2016
using present value of future earning model (Lev & Schawrtz) Value of Investments 9 13
by discounting total benefit payable to employees, which
Other Assets 4,814 5,111
was considered minimum expected benefits for them up to
retirement. Total Assets 74,718 99,857
2016 2017
Capital & Liabilities
Human Capital (BDT Million) 17,095 21,610
Borrowings 8,334 15,062
No. of employee 672 825 Term deposits 40,033 51,553
Per Capita Value (BDT Million) 25.44 26.19 Other deposits 115 122
Shareholders' equity 6,170 7,268
Assumptions used in Human Capital Valuation:
Human Capital 17,095 21,610
 All existing employee will continuously serve the company
up to their respective retirement. Other liabilities 2,970 4,243
 Average age of LankaBangla employees is around 32 and Total Capital & Liabilities 74,718 99,857
hence it has been assumed that present set of employees
will serve for another 28 years till the retirement age of 60
years.
 Employee payouts include all direct and indirect benefits
provided to them
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SUSTAINABILITY
Being focused on our strategic priorities,
our redefined approach towards Sustainability Report 194
sustainability has built us a sustainable Statement on Green Banking 200
business that tends to continue without Corporate Social Responsibility of LankaBangla 203
any pause. We have been offering Value Added Statements 207
financial products and services that
Statement on Contribution to Government Exchequer 211
directly or indirectly lead us along
with all our stakeholders to long-
term environmental benefit and social
developments.
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LankaBangla
SUSTAINABILITY
REPORT
“Our sustainability position in the market is based on our sustainable business model and long term objective to stimulate
growth and provide responsible lending and capital to the economy such that long term trust is built.”
Khwaja Shahriar
Managing Director
Total Lease & Loans Interest Gross Economic

Asset portfolio Income Income value added
78,248 61,914 6,623 7,819 1,417

million million million million million
increased by increased by increased by increased by increased by
36% from 57,622 32% from 46,749 22% from 5,433 30% from 5,997 156% from 5,54
million in 2016 million in 2016 million in 2016 million in 2016 million in 2016
1. Report parameter
This sustainability report is presented as part of annual integrated report 2017. Publishing of this report is a continuous process
and will be released annually as efforts to improve our economic, social and environmental impacts change. We have followed G4
guidelines to make the report accountable to all internal and external stakeholders.
1.1 Scope and Boundary of the report: 1.2 Report Quality:

All references, unless otherwise noted, are to LBFL’s financial We aspire toward providing a transparent report to our
year, which ends December 31, 2017. The context of this stakeholders and believe that this report sustains both the
sustainability report includes the sustainable operations of positive aspects of the company’s performance as well as the
LBFL’s Head office and its branches as well as limitations and areas where there are amenities to improve.
scope of improvements of the company. The operations of Further information about sustainability report parameter are
LBFL’s all subsidiaries are broadly described all over the annual narrated in page 06 of this annual integrated report.
integrated report except this sustainability report.
2. Material Aspect and boundaries:

Material issue Material Boundaries
Ethical Conduct Corporate Governance is related with ethical conduct and the material boundaries extend to every
aspects of economic, social and governance aspect of boundaries
Contribution to the economy LBFL always feels responsible in providing financial support to the economy of Bangladesh. The
company along with its shareholders and employees participate in contributing to the national
exchequer.
Market presence and product LBFL strives to penetrate in market by providing all types of financial products which has a direct
portfolio economic, social and environmental impact.
Responsibilities to the community LBFL is educating the local communities where it is operating its business by strengthening the
ecosystem of the boundaries which helps the local communities to establish themselves.
Human Development LBFL provides equal opportunity to all employees to brings out the hidden talent of employees. LBFL
also provide diversified trainings and education which increases the efficiency and effectiveness of
every employees.
Waste management and energy LBFL believes in keeping the environment safe and clean as it helps the community to keep healthy
efficiency which is ultimately beneficial for all. LBFL also encourage its employees to be aware in consuming less
energy which will lead our economy to a sustainable development.
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Total Total Training Profit Contribution to Total

Investment Hour After Tax National Exchequer Workforce
Portfoilio
74,966 61,914 1,353 1,030 1,828

million Hours million million increased by
increased by increased by increased by increased by 20% from 1,527
36% from 55,176 32% from 46,749 26% from 1,072 62% from 634 in 2016
million in 2016 million in 2016 million in 2016 million in 2016
3. Focus on Sustainability
Sustainability
Long Term Creating Values

Relationship
Service Diminishing
Responsibility Cost of Fund
Efficiency of Technology
Employees
3.1 Building long term relationship with Stakeholders: the Board on wide-ranging issues. With an increasing focus on
ethics and sustainability, the priority of the Board of Directors is
Transparency is another key success factor to build a healthy to assess and encourage the work of the executive team to build
economic nation, hence we believe in a transparent financial an institution that puts customers’ interests first and embeds
statements along with all reports published. We are committed sustainable banking. At the same time integrity is imperative
to maintaining an open and transparent dialogue with all of our in everything we do. It underpins our work, our relationships
stakeholders to revisit our policies and practices in light of the and the products and services we provide. Everyone in the
company’s environment, social and economic impacts, in order company is expected to behave with integrity and we have
to strike the right balance of interests among the stakeholders. comprehensive policies/frameworks and compliance measures
We host regular themed sessions with external stakeholders, as well. In addition to that, we have training programs to support
where participants have the opportunity to speak directly to our people in maintaining the highest professional standards.
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LankaBangla
The institution is committed towards a stance of zero tolerance on bribery and corruption, including facilitation payments across
all areas of the business, regardless of jurisdiction.
3.2 Creating values to our customers:
At the outset it can be demonstrated that as a corporate participant, we recognize the responsibilities to the development of the society
and the country as a whole. We aspire to be known as an institution that builds enduring relationships with and delivers value for our clients,
shareholders, employees and the community where we function. At LankaBangla, we define sustainability in the broadest possible terms. It
is about conducting our day to-day business the right way and continuing to play a part in addressing some of the biggest challenges faced by
society. Within a short span of time our operational branch network has reached 25 and we are moving ahead with further expansion plan.
In 2017, another 5 new branches have been opened at major townships within the country for better customer reach.
Creating values to our customers
Ensuring Basic Providing Developing Providing service

Rights to superior and products for to wider section
customers unparalleled social benefits of population
experience within short time
3.2.1 Basic Rights to customers: clients without delaying. The company provides solutions within
shortest possible period through its branches all over the country
LankaBangla Finance Ltd. believes in promoting its financial
with the help of intellectual support of department of IT. During
operations by providing delicate financial services along with its
claims adjusting process, LBFL resolve issues claimed by clients and
distinct products which can be consumed by all level of customers
develop the causes so that the issues can’t be repeated in future.
of the society. LBFL believes in growing together with its all
customers, hence it came up with user friendly product as well as
services to make sure that all kind of customers get benefited and 3.3 Reducing cost to Income ratio:
they can grow along with the company. Cost efficiency is the strategic choice for LankaBangla Finance
Limited to minimize the cost-income ratio. By appraising this
3.2.2 Providing superior and unparalleled experience purpose to the top, LankaBangla Finance Limited reduces its
to customers: costs as much as possible in every steps of its operation without
Since LBFL’s inception, LBFL is sincere about its duties and compromising the service quality. On the other hand, LBFL gives
responsibilities to its customers as customers are one of the key significant preference to increase its income growth from its
success factor. LBFL is originating customer satisfaction rate by services and other non-banking operations.
brand enhancement, user-friendly loan amortization method
as well as personalized services. LBFL also believes that it can 3.4 Using advanced technology and applying newness
help ensure a dependable, adequate and accessible product and in workplace:
services to meet the customers’ needs and wants which allows our
Today’s world is mostly dependent on innovation. Nowadays
customers to get benefited.
companies, which are applying advanced technologies, are more
3.2.3 Developing products for social benefits: successful compare to other companies. Innovation is a key
parameter of sustainability as it expresses how we excel at securing
Operations of LBFL and the communities where it operates are
and enhancing the financial well- being of people, businesses,
mutually dependent. Corporate citizenship has long been attached
into LBFL’s norm and guides its interactions with employees, and communities. Among the commendable technological
customers and regulators. LBFL is also maintaining a positive as establishment is a full-fledged contact centre at LankaBangla to
well as productive relation with its community and we also consider connect with our customers in real time in order to provide 24/7
it as an investment for LBFL’s all stakeholders. By making positive financial services. With modern IVR (Interactive Voice Response)
contribution LBFL improves the lives of its neighbours. technology, our contact centre is one of its kinds in the Non-
Bank Financial Institutions industry. The contact centre is
3.2.4 Providing service to wider section of population handling customer complaints, raising product awareness by
within short time: providing product specific information, generating sales references
As LankaBangla Finance Limited believes that they are liable to and contributing effectively in preventing fraud of credit card
their clients, they offer a solution to all problems enquired by its transactions.
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LankaBangla trains its employees to be updated with new brand enhancement, user-friendly loan amortization method
technologies so that they can adapt new gadgets without any as well as personalized services. LBFL also believes that it can
trouble. We, at LankaBangla, recognize our capacity to achieve help ensure a dependable, adequate and accessible product and
the ultimate goal of creating both social and business value services to meet the customers’ needs and wants which allows our
by incorporating social and environmental responsibilities customers to get benefited.
into our core fundamental business operations and stakeholder
LBFL believes in engaging its stakeholders in every steps of its
management. Similar to our preceding years, we are strongly
operations and ascertains its internal and external stakeholders
motivated to deliver to all sub-divisions of society and through
through governing impact analyse in respect of
careful customer segmentation, provide financial access and
 Policy and strategic intent: Valuable statements along
services to a wide range of socio demographic groups.
with significant policies are addressed by key stakeholders.
 Proximity: LBFL interacts the most with its customers as
3.5 Efficiency of employees: they have deep influence on our day to day activities.
HR department of LankaBangla provides the highest priority  Responsibility: LBFL has financial, legal and operational
to recruit top-notch and skilled employees to provide the best responsibilities to Securities and Exchange Commission,
services to their customers. As the employees at LankaBangla are Bangladesh Bank, CRAB along with other regulators.
the greatest assets who with their determination and dedication,  Influence: Employees, local authorities and shareholders
and work towards achieving the company’s goals, and in the of LBFL have decision making power so they have great
process create long-term value to our shareholders and make influence on taking decisions to reach its goals.
lasting contributions to our communities. As of 2017 end, total  Dependency: We are dependent on our customers,
workforce stood at a number of 1,828. At the core of our efforts is shareholders and regulators etc. On the other hand,
a focus on nurturing and sustaining a diverse workplace, because employees and business partners are dependent on us.
we have experienced the power of bringing different perspectives  Representation: Employees, Board and in some different
of employees to address the complex and diverse situations our cases, local communities represent as stakeholders to
clients face. We pursue to instill the values in our people that will present various decision making purpose
encourage them to respect and abide by the social, economic and
Appropriate initiatives are taken and applied by stakeholders to
environmental commitments of the company. We encourage our
identify and address significant issues to develop in near future.
people to participate in development programs to ensure that they
Details about stakeholder engagement and relationship is described
are equipped with the tools they need to succeed. In line with this
from page 163 to 170 of this annual integrated report.
view, we arrange various training programs for our employees,
in- house, external, and overseas in order to enhance knowledge
and skills as well as develop a learning culture. We also encourage 5. Sustainable HR Development
our employees to generate new ideas which will be helpful for our Sustainable development requires contribution from people across
business as well as the society. all operation of the organization. HR department is responsible
for employee recruitment and retention along with providing
motivation to employees. HR department of LBFL is responsible
3.6 Service Responsibility: to regulators, management committee as well as wider business
LankaBangla always believes in providing top notch and equal community. By providing training and creating corporate culture,
customer service to every customers of the company. We have a HR department building future leaders to enhance employee
separate unit where our customers can contact with us and we are performance and efficiency.
committed to response to our customers’ complains immediately.
We solve our customers’ problems within 3 days. Our business 5.1 Employee profile:
model is structured with the purpose of delivering superior To provide a sustainable workforce within the company LBFL
customer service and ensuring excellent customer experience that created a domestic culture where employees have opportunities
acts as the background for sustainable growth and performance. to show their skills and LBFL reward employees for good
behaviour, taking accurate decisions and actions
Here are services we provide to retain our customers pleased:
 Dedicated Business Relationship to provide superior customer 5.2 Salary Policy:
solutions. LBFL follows a transparent policy which makes sure an equal
 Diversified product and service basket, designed to meet and non-biased salary policy. LBFL promotes its employees
unique and changing customer needs. based on employees’ performance. Salary policy is same in all
 Quick turnaround time, ensuring that the client receives the branches and works are allocated among all employees based
funds when needed. on their skills and field of expertise. The company also provide
equal priorities to both male and female employees in term of
 Flexible repayment options that suit client’s cash-flow patterns.
remuneration.
 Continuous process improvements and automation to ensure
better service delivery. 5.3 Benefits to employees:
 Wider branch network to ensure better access for all.
Each and every employees of LankaBangla Finance Limited gets
his/her salary on a monthly basis and the salary is transferred
4. Stakeholder Engagement and relationship on 25th day of each month but not after the last date of every
management month. To keep motivated employees, LankaBangka Finance
Since LBFL’s inception, LBFL is sincere about its duties and Limited provides facilities and benefits to its staffs.
responsibilities to its customers as customers are one of the key Details about Human resorce development is potrayted on page
success factor. LBFL is originating customer satisfaction rate by no 186 to 192 of this Annual Integrated Report.
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LankaBangla
6. Triple Bottom Line 6.2 Planet:

6.1 People: LBFL insists to invest in those projects which are environment
friendly. We invest almost 2,230 million taka on green banking
LBFL always participates in contributing financial support to the
projects as well. 1,526 man hours of training are provided to our
society all over the fiscal year and it will be a continuous process.
The company invested BDT 12.74 million taka this year for employees on green banking. We also encourage our branches
32,334 man hours of traning to it's employees. It also provided to invest in eco-friendly projects which will be helpful in the long
foreign training to its employees as well. LBFL also developing run. Our corporate building which is now under construction
the training method every year to keep updated its employees will be green certified building.
with newness and the company also review the whole session
by taking test on the employees. 6.3 Profit:
To work with different kind of customers, regulators and LBFL has generated 1,353 million taka from its all services
suppliers, LBFL works with transparency and fairness to create provided by both head office and branches in 2017.
trust among all stakeholders which also create values.
Triple Bottom Line Highlights:

Financial Highlights – LBFL
Actuals 2017 Actuals 2016 Change
BDT M BDT M %
Results for the year
Gross Income 7,819 5,997 30.39%
Interest Income 6,623 5,433 21.91%
Interest Expenses 4,542 3,565 27.40%
Profit before Tax 1,397 1,107 26.19%
Provision for Taxation 45 35 26.41%
Profit after Tax 1,353 1,072 26.19%
Financial Position at the year end

Shareholders' Fund (Stated Capital and Reserves) 7,268 6,170 17.80%
Deposits from Customers 51,553 40,033 28.78%
Lease, Loans & Advances 61,914 46,749 32.44%
Total Investment 2,128 2,130 -0.11%
Fund Under Management (FUM) 142,825 104,272 36.97%
Total Assets 78,248 57,622 35.79%
Investors
Gross Dividend 477 830 -42.50%
Earnings per Share (BDT) 4.25 3.37 26.19%
Dividends per Share (BDT) 1.50 3.00 -50.00%
Net Assets per Share (BDT) 22.84 19.39 17.80%
Ratios
Return on Shareholders' Funds (%) 20.13% 18.44% 1.70%
Return on Average Assets (%) 1.99% 2.10% -0.11%
Year on Year Growth in Dividends on Ordinary Shares (%) -42.50% 15.00% -57.50%
Interest Cover (Times) 1.36 1.33 2.99%
Equity : Assets (%) 9.29% 10.71% -1.42%
Debt : Equity (%) 918% 786% 132.46%
P/E Ratio (Times) 11.25 10.33 91.44%
Non-Performing Loans Ratio (%) 3.07% 3.52% -0.46%
Advance Growth (%) 32.44% 29.79% 2.65%
Deposit Growth (%) 28.78% 33.09% -4.31%
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Statutory Ratios
Capital Adequacy Ratio (CAR) - Min. Req. 10% 11.81% 13.22% -1.41%
Core Capital to RWA - Minimum Required 5% 11.00% 12.33% -1.32%
Supplementary Capital to RWA 0.81% 0.90% -0.09%
Cash Reserve Ratio (CRR) - Minimum Required 2.5% 2.92% 2.52% 0.40%
Statutory Liquidity Reserve - Minimum Required 5% 5.10% 5.08% 0.02%
Statutory Ratios
Capital Adequacy Ratio (CAR) - Min. Req. 10% 11.81% 13.22% -1.41%
Core Capital to RWA - Minimum Required 5% 11.00% 12.33% -1.32%
Supplementary Capital to RWA 0.81% 0.90% -0.09%
Cash Reserve Ratio (CRR) - Minimum Required 2.5% 2.92% 2.52% 0.40%
Statutory Liquidity Reserve - Minimum Required 5% 5.10% 5.08% 0.02%
Non-Financial Highlights
Actuals 2017 Actuals 2016
BDT M BDT M
Economic Sustainability
Direct Economic Value generated & distributed 3,728 2049
Economic Value Addition 1,417 554
Community Investment Cost 7 5
Number of new branches launched 5 5
Employee benefit fund 313 296
Environment Sustainability
Electricity Consumption in value 14.859 13.605
Fuel Cost 1.51 0.841
Gas Cost 0.634 0.443
Water Consumption in value 2.92 2.059
Paper consumption in value 2.418 1.581
Significant environment fines Nil Nil
Environment protection expenditure 0.1 0.1
Number of environmental grievances Nil Nil
Labor Sustainability
Total Workforce in number 1,838 1,527
Recruitments in number 296 298
Attrition rate 16% 22%
Retention rate after parental leave 100% 100%
Number of injuries Nil Nil
Average Training hours per employee 42 41
Employee performance appraisal as a percentage of total workforce 100% 100%
Human Rights Sustainability

Incidents of discriminations Nil Nil
Incidents of child labor (below 18 years) Nil Nil
Incidents of forced labor Nil Nil
Human rights incidents reported and resolved Nil Nil
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LankaBangla
STATEMENT ON
GREEN BANKING
Using Training Building an

eco friendly Invest in employees eco friendly
electronic eco friendly to achieve tower to
gadgets to projects of Green Banking save energy
minimize technology Policy Guidelines and better waste
paper work Implementation management process
Green Banking Green Banking Unit

The concept of green banking has been integral in LankaBangla, As per the Bangladesh Bank Circular No. 04 on “Policy Guidelines
and goes hand in hand with our stance on sustainable business for Green Banking”, LankaBangla Finance has established
model. With the constant headway of our Green Banking Unit “Green Banking Policy” which is approved by the Board. A
(GBU), we have been a successful team in green banking. Using separate Green Banking Unit (GBU) was required to be formed
smart innovative financing techniques and market development for designing, evaluating and administering activities related
tools, we aim to stimulate investments in clean technologies to green banking issues of the company. As per the set BB
and hence contribute to societal welfare. To seek increased circulation, this unit will report to the high powered committee
deployment of clean energy and more efficient use of funds, from time to time. GBU will be comprised of the representatives
we introduced Green Finance, initiated in-house management, from each relevant division.
created Climate Risk Fund, Green Marketing, and supported
employee training.
Sustainable Finance Committee Members:

2 Khurshed Alam Head of Retail Financial Services Member
8 Md. Kamruzzaman Khan Head of Personal Financial Services Member
9 Ujjal Kumar Manager-Risk Management Member Secretary
Followings are the GBU members who will work together for providing input, data and preparing relevant reports as per green
banking policy guidelines and Bangladesh Bank requirements.
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Statement of Green Banking Initiatives Introducing Green Marketing

In response to increasing awareness of climate change, and Green Marketing incorporates a broad range of activities,
environmental degradation, urgent measures for sustainable including products/services design, engineering, modification,
development have been addressed by some of the stake holders new product innovation, changes to the production process
all over the world .Banking system holds a unique position in and packaging, in order to encourage potential clients to
an economy that can affect production, business and other design Green Project or environmentally safe products and
economic activities through their financing activities which also to modify advertising. Besides, company effectively uses
would in turn contribute to economic development as well as green marketing channels more for widening target markets of
protect environment/climate from pollution and degradation. usual products. Financial Institution takes steps that will help
Through green banking, LankaBangla concentrates on financing build awareness among common people to promote products/
commercially viable technologies that consume less fossil services which cause least harm to the environment. Corporate
fuel and have lower impacts on the environment. Moreover,
implementing green banking concept within the organization Affairs Division shall plan for developing & marketing Green
through efficiency in energy use, water consumption and waste Banking products to offer to the customers.
reduction may significantly contribute towards controlling
operating costs.
Supporting employee training, Consumer Awareness
and Green Event
Policy formulation and Governance Exclusive training programs or specialized/befitting classes in
In line with the global development and response to the foundation or other credit related courses for incorporating
environmental degradation and as per instructions of Bangladesh Green Banking Policy Guidelines as a part of awareness building
Bank, LankaBangla Finance has already established its Green among the employees of the Company are arranged by the
Banking Policy. A Green Banking Unit (GBU) has been formed Human Resources Department in consultation with the Green
with the task of developing policies, planning and administering Banking Policy Guidelines Implementation Unit (GBPIU). Training
the green banking initiativesof the company. programs on environmental and social risk and employee
awareness development should have to be implemented by the
Incorporation of Environmental Risk in CRM HR Department as a continuous process.
(Core Risk Management)
The Company conforms to the instructions stipulated in the Environment Related Initiatives
detailed guidelines on Environment Risk Management (ERM) of LankaBangla takes environmental stewardship ahead of each
Bangladesh Bank in consideration to the Green Banking policy. year realizing the present generation’s responsibility to the
Clear identification of the problems related to environmental future. By adopting Environmental Risk Management (ERM)
risks important for effective risk management as measures can be Guidelines for Banks and Financial Institutions in Bangladesh,
taken to address any environmental incidents. At LankaBangla, LankaBangla closely monitors the environmental impact of
risks are prioritized based on the established processes in every step and effectively mitigates any risks that arise thereon.
order to respond to unforeseen environmental happenings. A With more emphasis on environmental risk management
comprehensive risk exposure matrix is established for assessing programs at LankaBangla, a noticeable increase has occurred
environmental risks and then reported to management credit in the amount of screening and due diligence efforts to gather
committee of the company by the branches. information on potential environmental risks.
Introducing Green Finance We take every effort to delight our clients being the growth
partner in financing environment friendly products or initiatives.
Financing in eco-friendly and environmentally sustainable
LankaBangla takes pride for being one of the financiers of a
business activities and energy efficient industries shall be
project having one of the largest biological Effluent Treatment
extended through preference by all the credit delivery points.
Plant (ETP) of the world, the first auto brick manufacturing
Environmental infrastructures such as renewable energy
project(s), Liquid Waste Management, Alternative Energy, project to implement flexible fuel technology trapping harmful
Fire Burnt Brick, Non Fire Block Brick, Recycling & Recyclable CO2 emissions and also to trade Certified Emissions Reductions
Product, Green Industry, Safety and Security of Factory, etc. are (CERs) to the World Bank, country’s first lub-recycling plant
encouraged and those will be financed by the company with and so forth. Green financing has been growing steadily in our
priority. portfolio.
Viability of environmental infrastructures for financing We have established our office environment and only allow
shall be assessed in line with the environmental issues i.e. rational use of energy and promote the spirit of environment
how the purpose of the project(s)/business (es) & to what friendly action plans. Our policy allows only energy savings
extent this/these is/are rewarding to the environment. Most bulbs at all of our service points and Head Office. While
viable project(s)/business (es)/ sector(s) shall be prioritized furnishing our office premises we use ISO certified paints. On
for financing to position the financial institution gradually top of that, LankaBangla introduced automated e-alert system
as a “Carbon Neutral Financial Institution” first and then as a to ensure secured financial information flow to our clients in
“Climate Positive Financial Institution”. Bangladesh. The launch of e-mail based Customer Statement
Delivery System, added an important service to support the
Creation of Climate Risk Fund clients’ needs, providing superior customer service to ensure
The financial institution addresses environmental issues and delivery of account statements and transaction advices to
assesses environmental risks (high/ moderate/low) of projects/ the designated e-mail addresses of clients on time. This new
businesses of different sectors in different areas. At the same system also helps to protect the environment by eliminating
time, climate risk fund is created for “Green Banking” may be paper-based activities at office, protecting and preserving our
used as a part of CSR activities at the time of emergency. environment for the next generation. In future we dream
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to enhance our effort on preserving ecosystems, land air and around the construction plant. We are also fully aware about
water, in line with our broad corporate mission we defined. the protection of our workers who are fully trained hence
provide safety nets, guardrail systems as well as personal fall
Environmental sustainability: arrest system to our workers. We have designed our tower to
At LankaBangla, we have long acknowledged that a healthy keep enough space inside and outside of the building in such a
environment is the foundation for economic progress and way so that our employees can feel it as home in working hours.
the well-being of society. As a leading financial institution,
we are committed to finding market solutions that benefit Water Efficiency:
the environment. As per our long term commitment to We will install water efficient instruments to save waters which
our community, we continued to invest both in nurturing will have good influence on our environment. We will set up
underprivileged people of our society, and to the environment water harvesting system on the tower’s rooftop to preserve
we breathe in. We provide loans to customers carrying out due raindrops and to put less pressure on underground and surface
diligence and considering the environment and social impact. water.
In all credit delivery points, we have focused on financing eco-
friendly and environmentally sustainable business activities Energy and Atmosphere
and energy efficient industries. Environmental infrastructure To save energy and protect the environment, we will use
projects such as clean water supply, waste water treatment daylight as much as possible in our workplace in working hours.
plants, solid and hazardous waste disposal plants, Effluent To implement this, we will install glass facade system around
Treatment Plants, Bio-gas plants, Bio-fertilizer plants and energy the building to consume more sunlight and put less pressure on
efficient/low carbon emission projects like Auto Bricks using electricity. We will also use energy efficient LED lights which is
Hybrid Hoffman Kiln, Vertical Kiln, Zig-Zag Kiln etc. are always also cost efficient and long lasting.
encouraged and dealt with top priority.
We are considering to use renewable energy system by installing
LankaBangla Tower solar power plant on the rooftops of LankaBangla tower as well
to use less electricity and reduce electricity expenditure.
LankaBangla Finance Limited believes that a hygienic
environment is a key element for healthy consumers which Recyclable materials and resource
leads to a strong business circumstances. In believing this,
LankaBangla Finance Limited is constructing its own building LankaBangla Finance Limited has planned to install water
named “LankaBangla Tower” which will be one of the LEED recyclable system to diminish the consumption of water which
(Leadership in Energy and Environmental Design) certified is also cost efficient. Through this system, water will be filtered,
building consistent with the green banking policy provided by disinfected and recycled to use afresh for toilet flushing. This
Bangladesh Bank. Having 13 floors along with four basements, will decrease our water consumption by 50% and it will reduce
the tower will be both environmental friendly and energy environmental impact.
efficient which will save both energy and expenditures and will
have a good impact on environment.
Indoor Environment quality
We will apply eco-friendly painting to have good impact on our
To make a sustainable environment, we are creating our building environment as well as employees. Our air ventilation system
based on these following activities: will be based on natural air and we will apply HVAC (Heating,
Ventilation, Air Conditioning) system hence using of fan and air-
Sustainable Sites: condition will be reduced and the electricity consumption will
be comparatively declined.
Our architectures, designers and engineers are instructed very
strictly to maintain a healthy construction guideline to keep We will strictly prohibit smoking inside the building to make a
our eco-system safe and sound and to protect public health sustainable environment and protect our employees.
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Sustainability Corporate Social Responsibility of Lankabangla
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CORPORATE SOCIAL RESPONSIBILITY (CSR) Annual Integrated
Report 2017
OF LANKABANGLA
Educational Tree Rehabilitation
support plantation program
4.23 mn 0.284 mn
2.791 mn 0.33 mn 3.00 mn
Contribution for Cultural

natural disaster development
Corporate Social responsibility (CSR) of LankaBangla is a form CSR is a concept whereby companies integrate social and
of corporate self-regulation integrated into our business model environmental concerns in their business operations and in
based on the objective of good business for good society at the their interactions with their stakeholders on a voluntary basis.
moment and in near future. LankaBangla in its core management Integrating CSR with business presents a more sustainable
concept and corporate responsibility integrated CSR with focus business case in that:
on social and environmental concerns in all business operations  Social responsibility can become an integral part of the
and interactions with its stakeholders including shareholders, wealth creation process which, if managed properly, can
customers, employees, suppliers, business partners, local enhance business competitiveness and maximize value
communities and other organizations. creation.
With these CSR policies & principles, our organization believes  If conducted from a strictly philanthropic point of view, such
to achieve a balance of economic, environmental and social expenses will always be the first to go during hard financial
imperatives (“Triple-Bottom-Line- Approach”) besides times, whereas there will be more incentives to practice
safeguarding interest of stakeholders.We have also considerably CSR further and better during such crises.
achieved efficient business operations and conscience However, in different countries and cultures, there will be
corporate governance and compliance to facilitate smooth and different priorities and values to dictate how businesses should
effective business. As a result we have been able to contribute act and manage their impact on the environment and the
for our sustainable society. LankaBangla through its Foundation society.
has extended its support for underprivileged people of the
community in particular to ensure their education, health and At LankaBangla Finance, Corporate Social Responsibility (CSR)
living. has always been an integral part of the company’s culture and
the cornerstone of core values of good corporate citizenship.
The Financial System holds a unique position in an economy CSR is considered as an integral part of the organization’s
that can affect production, business and other economic strategy, operations and management in order to create the
activities through their procedure of financing activities which maximum value. The concern for stakeholders, community, and
would in turn contribute to protecting the environment/ environment is reflected in our actions, and which strengthens
climate from pollution. Moreover, efficiency in energy use, our position as a responsible and sustainable business. The
water consumption and waste reduction may significantly business financing goal is not only to tie with the business
contribute towards controlling the operating cost of many of progress but also with the development of overall economic
the Banks/NBFIs of the country. All these make Corporate Social growth that drives the development of the nation at large.
Responsibility (CSR) a vital factor to consider.
The term Corporate Social Responsibility or CSR has evolved
over the last few decades to broaden its scope from mere
philanthropic contributions to strategic business decisions.
The CSR definition used by businesses globally revolve around
the notion of “Operating a business in a manner that meets or
exceeds the ethical, legal, commercial and public expectations
that society has of business.”
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LankaBangla
CSR activities of 2017 of LankaBangla Foundation:

1 Rehabilitation program to
flood affected people
Cultural 6 2 Empowering
Development female student
by providing
bicycles
Supporting 5 3 Tree
education Plantation
Economic support to flood and

4 cold affected People
1. LankaBangla’s Rehabilitation Project in Kurigram:

Employees of LankaBangla and LankaBangla Foundation undertook latrine, a tube well and some wood bearing trees for each family.
a joint massive Rehabilitation Project for the worst affected flood We have completed and handed over 65 tin-shed houses, 65
victims of different remote islands (chars) of Kurigram district. sanitary latrines, erected and handed over 25 tube wells and
planted more than 300 wood bearing trees (surrounding the 65
houses) among the flood victims. Under the leadership of Mayor of
UlipurPouroshova, Ulipur, Kurigram Mr. Tariq Aul Ala and with the
relentless hard work of his volunteer team during last 03 (three)
months finally we have implemented the project successfully.
The volunteer team and LankaBangla visited remote islands (chars)
of Kurigram district, identified & listed most affected vulnerable
families, assessed their needs, arranged & transported materials
for final execution of different components of the project and beat
the challenges of doing this project in different distant remote
islands (chars) of Kurigram district and happy to see the smile on
the faces of homeless people.
Mr. Mohammed Nasir Uddin Chowdhury, Managing Director,
LankaBangla Securities; Mr. Khwaja Shahriar, Managing Director,
This massive LankaBangla Rehabilitation Project was planned just LankaBangla Finance; Executive Vice President & Chief Risk Officer
immediate after the flood this year (2017) when we witnessed the of LankaBangla Finance Limited, Mr. Mohammed Kamrul Hasan,
untold suffering of flood victims of different remote islands (char FCA and Honourable Mayor of UlipurPouroshova, Ulipur, Kurigram
areas) while distributing relief goods in these chars at the end of Mr. Tariq Abul Ala in presence of Mr. Haider Ali Mia, Upazila
July & beginning of August 2017. Chairman, Ulipur, renowned social worker Mr. Star and Lecturer
Mr. Bulbul Ahmed and Mr. Md. Jahangir Hossain, Head of ADC of
All employees of LankaBangla Finance, LankaBangla Securities, LankaBangla officially handed over houses, sanitary latrines, tube
LankaBangla Asset Management, LankaBangla Investment wells to each family on 26 December 2017 in a small ceremony.
voluntarily contributed 02 million taka and Foundation contributed
01 million taka for the initiative of LankaBangla Rehabilitation Besides, we have also distributed 1,000 blankets among ultra-
Project in Kurigram. poor people of UlipurUpazila of Kurigram district on the same
day. Blankets are also given to the beneficiaries of the project. The
The Rehabilitation Project includes a tin-shed house, a sanitary project costs 3.0 million.
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2. Bicycle Distribution among female students of LankaBangla Foundation undertook a tree plantation program
Ranipukur Union, BirolUpazila, Dinajpur: on 09 August 2017 at Ramu Cantonment, Cox’s Bazar. A total of
6,000 mango saplings are planted at lake side road in this new
To facilitate education of poor school going female students of Cantonment. The plantation was supported by the 2 Infantry
northern region of Bangladesh, LankaBangla Foundation took Brigade.
the initiative to distribute bicycles among school going poor
female students of 10 Nos. Ranipukur Union, BirolUpazila, GOC and Area Commander, 10 Infantry Division, Maj. Gen.
Dinajpur. Mohammad Maksudur Rahman, psc; Commander 2 Infantry
Brigade, Brig. Gen. Abu Syed Mohammod Bakir of Ramu
Cantonment; Mr. Mohammed Nasir Uddin Chowdhury, Managing
Director, LankaBangla Securities Limited and Mr. Khwaja Shahriar,
Managing Director, LankaBnagla Finance Limited jointly opened
tree plantation program in a small ceremony. The plantation began
by planting lengra mango sapling by each of the above personalities.
LankaBangla undertakes tree plantation program every year as part
of its CSR responsibility for protecting environment. Commander 2
Infantry Brigade and his team managed and executed the overall
plantation in a smooth manner. LankaBangla emphasized on green
revolution through tree plantation in remote areas to create a
LankaBangla Foundation undertook bicycle distribution program
healthy environment for locality. Total plantation costs 0.33 million.
among 100 female students from different high schools of Dinajpur
district.
4. Financial support to victims of natural disasters
Bicycle has become very popular among female high school and cold wave:
students of different northern districts. LankaBangla undertakes
bicycle distribution program every year as part of its Corporate
Social Responsibility (CSR) activities. This year the distribution took
place at Dinajpur with focus to empower females of backward
northern region of the country.
Executive Vice President & Chief Risk Officer of LankaBangla Finance
Limited, Mr. Mohammed Kamrul Hasan, FCA and Chairman of 10
Nos. Ranipukur Union, BirolUpazila, Dinajpur – Mr. Faruk Azam in
presence of Mr. Md. Jahangir Hossain, Head of ADC of LankaBangla;
Mr. Nafees, Head of Branch, LankaBanglaDinajpur; Mr. Md.
Fazlay Rabbi & other local dignitaries distributed bicycles among
needy talent female high school students of different schools of
BirolUpazila, Dinajpur in a small ceremony.
On the other hand, we have also distributed 1,000 blankets among
the ultra poor people of the area to support them to get rid of 4.1 LankaBangla and OCAS jointly distributed relief
severe cold in this region during winter. Every year LankaBangla also goods and arranged medical camp among flood victims
distributed blankets among poor segment of the society as part of of Birgaon, South Sunamganj, Sunamganj
its Corporate Social Responsibility. Total cost incurred 0.627 million.
In 2017, unusual early flood in haor areas of Sunamganj damaged
3. Protecting Environmental & Ecological Degradation crops and put the people of the area in disaster condition. An
through Tree Plantation: emergency respond was required to help the people to survive.
Protecting environmental & ecological degradation through tree In response to this emergency call - LankaBangla Foundation and
plantation every year is another core area of CSR of LankaBangla Old Cadets’ Association of Sylhet (OCAS) jointly undertook a relief
Foundation. distribution program and medical camp among flood victims of
Birgoan village of East Birgaon Union, South Sunamganj Upazila,
Sunamganj on 25 May 2017.
Relief materials were distributed among 750 families of
Birgoanviallge. Relief materials included rice (20 kg), pulses (2 kg),
soyabean oil (2 lit), cheak peas (1 kg), potato (5 kg), onion (3 kg),
sugar (2 kg), salt (1 kg) and medical facilities with free consultation
& medicines from volunteer doctors.
LankaBangla Foundation as part of its CSR activities every year
extended support for health, education & environment sectors
and undertakes different projects and programs. This time jointly
with OCAS distributed relief materials and facilitated medical
camp for 750 flood affected families of Birgoanviallge of South
Sunamganjwith a total contribution of 2.0 million.
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206
LankaBangla
4.2 Distribution of Relief among poor flood victims of 5. Educational Support to the community:
Kurigram district: 5.1 Financial Aid to Underprivileged Brilliant Students:
In Bangladesh, flood hits the country almost every year. This year LankaBangla Foundation continues its stand to support the
flood was more devastating and prolonged and repetitive. Many underprivileged brilliant students to pursue their higher
education. Scholarship program of the Foundation for these
students is a significant support to ease the challenges to reach
their aim in life. We extend this continuous financial support to
make their dreams come true. Supporting education sector for
building an enlightened society is not new for LankaBangla. We
have started the scholarship program from 2010 and continues
till to date with an immense priority on education for building
knowledge based society.
We provide educational support to a SSC completed
underprivileged brilliant student to continue his/her HSC and
graduation with an objective to help the student to become
self-sufficient in life. Scholarship program is one of the major
programs of CSR of LankaBangla Foundation.
ultra-poor people of different districts were the worst victims. In 2017, a total number of 50 students received financial
LankaBangla Foundation took the initiative to distribute relief assistance of 2.0 million to pursue their higher education.
materials among the poor victims of different char areas of the During 2017, 5 more students have completed their graduation.
worst affected Kurigram.
5.2 Financial Assistance for Education for Children of
LankaBangla Foundation undertook a relief distribution program deceased Ex-Officio of LankaBangla:
among flood victims of remote villages of UlipurUpazila, Kurigram
on 28 July 2017as part of its CSR activities. LankaBangla Foundation continues its support for education as
part of its CSR activities. This support is extended to one female
More than 25 metric tons of Relief goods were distributed among student who is the daughter of one deceased official of sister
2,000 destitute families stranded by flood water of the area. concerns of LankaBangla Finance Limited.
Relief goods included rice, pulses, flattened rice (beaten rice),
Foundation contributed an amount of Tk.164,000/= (in two
gur(jaggery), orsaline, edible oil, medicines, biscuits and other dry
installments- for one year support) to Ms. Nora Sumlina
food items.
(daughter of Late Mr. M. Shakil Islam Bhuiyan, Ex-CEO,
Head of Branch Distribution and Management Division, Mr. LankaBangla Investments Limited) to continue her studies.
Mahbubur Rahman from LankaBangla Finance Limited, Mayor Mr.
Tariq Abul Ala of UlipurPouroshova and UlipurUpazila Chairman 6. Developing Young Children’s Creativity through
Mr. Haider Ali distributed relief goods among marooned families of the Arts an integral part of CSR of LankaBangla:
different flood affected areas of the Upazila. Focusing Creativity & Cultural Development of young children
Other Officials from LankaBangla Head Office, Bogra&Dinajpur is an integral part of CSR of LankaBangla Foundation. With
branches and other local leaders attended the relief distribution this objective, Foundation organizes art competition for the
young school children every year with focus on psychological
program. The relief distribution program costs 1.43 million.
and cultural development. Our endeavor is to help children
to become familiar with our rich cultural heritage and also to
4.3 Support for local community to protect from Cold Wave: explore their hidden creativity.
In Bangladesh, during winter ultra-poor people fight against cold
every year and LankaBangla Foundation distributes blankets every
year to facilitate better comfort to the ultra-poor people. This
year Foundation distributed more than 3,000 blankets on 26, 27
& 29 December 2017 among poor people of remote villages of
UlipurPouroshova, Kurigram; 10 Nos. Ranipukur Union, BirolUpazila,
Dinajpur and and different remote areas of Khulna.
In 2017, LankaBangla Foundation arranged 5th Art Competition

for children in Chittagong. “MonerRongeSajaiDesh” was the
theme of art competition of this year. LankaBangla Finance
Limited selected top 17 arts works and printed in the calendar
of 2018 of LankaBanglamentioning names of the respective
children and his/her schools. This unique facilitation definitely
This year Foundation has made an extensive effort for proper boosts up the children who won the competition and also
distribution of blankets by identifying & listing ultra-poor people keep alive the intention of others to compete in future. The art
ofKurigram, Dinajpur& Khulna. Total cost incurred 0.8 million. competition program of 2017 costs 0.284 million.
www.lankabangla.com
Sustainability Value Added Statements
VALUE ADDED 207

Annual Integrated
STATEMENT Report 2017
For the year ended 31 December 2017

The value added statement represents the value created by LankaBangla Finance and its subsidiaries through operational activities and
shows how it was distributed among major stakeholders of the Company (Shareholders, Government & Employees) to meet certain
obligations. A portion of added value has also been retained in the company for future investment and expansion.
2017 2016 2015

% % %
BDT Mn BDT Mn BDT Mn
Value added
Operating revenue 9,981 7,311 6,237

Cost of borrowing (4,839) (3,964) (3,715)
Provisions (207) (396) (377)
Operating expenses excluding staff cost and
(1,207) (902) (681)
depreciation
3,728 2,049 1,464
Distribution of value addition
Employees as remuneration 1,311 35% 1,005 49% 838 57%

Government 334 9% 148 7% 112 -1%
Shareholders as dividend 716 19% 722 35% 438 35%
2,361 90% 1,875 90% 1,388 90%
Retained for expansion and future growth
Value retained in the business 1,210 32% 74 4% (17) 2%
Deferred tax 3 0% 3 0% (0) 0%
Depreciation 153 4% 98 5% 93 7%
Amount distributed 3,728 100% 2,049 100% 1,951 100%
Number of employees at the end of the

673 673 520
year*
Value created per employee (Mn BDT) 5.54 3.04 2.81
Number of shares (Mn) 318.25 318.25 318.25

Value created per share (BDT) 11.71 6.44 4.60
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208
LankaBangla MARKET VALUE ADDED (MVA)
STATEMENT
Market Value Added (MVA) statement reflects the Company’s performance evaluated by the market through the shares. MVA is the
difference between total market value and total book value of the share of the company. A high value of MVA indicate that company
has created substantial wealth for the shareholder. The share market value of the Company stood at Tk 15,212 million whereas the
book value of the shares stood at Tk 9,631 million, resulting a Market Value Addition of Tk 12,030 million as of December 31, 2017.
The calculation of Market Value Added is given below:
2017
Particulars
No. of Share (Mn) Price per share BDT Mn
Market Value 318 47.8 15,212
Book Value 318 10 3,183
Market Value Added 12,030
2016
Particulars
Market Value 277 34.8 9,631
Book Value 277 10 2,767
2015
Particulars
Market Value 241 29 6,979
Book Value 241 10 2,406
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ECONOMIC VALUE ADDED (EVA) 209

Annual Integrated
STATEMENT Report 2017

"Economic value added is a value-based financial performance measure which reflects the absolute amount of shareholders’
value created or destroyed during each year. It provides a measurement of a company’s economic success or failure over a period
of time. Such a yardstick is useful to investors who wish to place confidence with the Company to retain their fund for better
earnings as compared to other similar companies or similar industry. Economic value added is calculated by taking a company’s
net operating profit after tax, subtracting from it, the cost of average equity. EVA is calculated by applying following formula:
EVA = (NOPAT – Cost of average equity)
NOPAT
NOPAT is the net operating profit after tax which is calculated by deducting the income tax expense from operating profit.
2017 2016 2015

BDT Mn BDT Mn BDT Mn
Operating income 9,981 7,311 6,237
Operating expenses (7,510) (5,969) (5,327)
Operating profit 2,471 1,342 910
Income tax (338) (151) (112)
NOPAT 2,133 1,191 798
Equity
Shareholders' equity is the total amount of equity at the year end plus accumulated provision for doubtful losses.
2017 2016 2015

Shareholders' equity at year end 8,327 6,687 6,262
Accumulated provision for doubtful losses 1,434 1,464 1,509
Equity 9,761 8,151 7,771
Average equity
Average equity is calculated by averaging opening and closing equity of a year.
2017 2016 2015

Shareholders' equity 9,761 8,151 7,771
Average equity 8,956 7,961 7,619
Cost of equity
Cost of equity reflects shareholders' expected return. Eventually this is the opportunity cost for shareholders for investing their funds in
the company. Interest on 5 years Government Treasury Bond plus a standard risk premium has been assumed to be the cost of equity.
2017 2016 2015

Interest rate on 5 Years Government Treasury Bond as on 31 December 5.94% 6.00% 6.00%
Standard Risk premium 2% 2% 2%
Cost of equity 7.94% 8.00% 8.00%
ECONOMIC VALUE ADDED

Cost of equity reflects shareholders' expected return. Eventually this is the opportunity cost for shareholders for investing their funds in
the company. Interest on 5 years Government Treasury Bond plus a standard risk premium has been assumed to be the cost of equity.
2017 2016 2015

NOPAT 2,133 1,191 798
Cost of average equity 711 637 610
Average Shareholders' equity 8,956 7,961 7,619
Cost of capital 7.94% 8.00% 8.00%
EVA 1,422 554 188
Number of shares (Mn) 318 318 318
Economic Value Added Per Share 4.47 1.74 0.59
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210
LankaBangla
Amount In Million BDT
Amount In Million BDT
www.lankabangla.com
Sustainability Statement on Contribution to Government Exchequer
STATEMENT ON CONTRIBUTION TO 211

Annual Integrated
GOVERNMENT EXCHEQUER Report 2017
Government is considered as one of the most important stakeholders which play a critical role in the economic development of
the country. Being a legitimate and ethical company, LankaBangla contributes to the Government Exchequer when the necessary
amounts fall due. For the year 2016, LankaBangla Finance and its subsidiaries made a handsome contribution to Government
Exchequer of an amount equal to BDT 635.85 million, composed of income tax, withholding tax, VAT, withholding VAT and excise
duty. This is in comparison to BDT 467.03 million in 2015, reflecting its fair and consistent commitment towards national contribution.
Figures in BDT
Forms of Contribution 2017 2016
Income Tax 840,332,857 528,201,799
Source tax on Salary u/s 50 53,738,907 38,207,299
Source Tax on Interest on savings deposit u/s 53F 311,084,278 266,026,408
Source tax on Payment to Supplier u/s 52 12,387,694 7,456,010
Source tax on Payment to Landlord u/s 53 A 7,206,519 6,647,201
Payment on transaction of Securities 179,909,613 83,450,975
Source tax on payment of commission 8,792,544 6,093,190
Payment of Advance Corporate Tax u/s 64 141,118,669 999,256
Tax payment at the time of Return Submission u/s 74 11,380,435 3,735,025
Source Tax on Dividend Payment u/s 54 114,589,303 115,428,448
Others 124,895 157,988
VAT 118,873,554 79,187,402
VAT on House Rent 20,947,353 15,147,248
Collection of VAT on Processing, Documentation Fee etc. 34,699,559 20,415,374
VAT on Procurement of goods and services 10,752,216 9,725,212
VAT on Legal, Professional & Technical Fees 3,081,800 2,549,161
Others 49,392,627 31,350,408
Excise Duty 71,213,121 28,468,093
Collection of excise duty from clients 68,922,370 27,188,416
Excise duty deducted by bank 2,290,751 1,279,677
Total Paid to Government Exchequer 1,030,419,533 637,136,971
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212
AUDITED
LankaBangla
FINANCIAL STATEMENTS
Over the last few years, LankaBangla
has exhibited newer dimensions Independent Auditor's Report 213
in performance and redefined its Consolidated Financial Statements-LankaBangla Group
financial position as an enterprise in Consolidated Balance Sheet 215
the unpredictable financial market Consolidated Profit and Loss Account 217
of Bangladesh. Our energetic effort Consolidated Statement of Cash Flows 218
and endless inspiration have led us to
introduce an understandable, relevant,
reliable, and comparable financial Financial Statements-LankaBangla Finance Limited
statements to our stakeholders. Balance Sheet 220
Profit and Loss Account 222
Consolidated and Separate Statement of Liquidity 225
Notes to the Consolidated and Separate Financial Statements 227
Financial Statements of Subsidiaries
LankaBangla Securities Limited 292
LankaBangla Investments Limited 321
LankaBangla Asset Management Company Limited 345
www.lankabangla.com
Audited Financial Statements LankaBangla Finance Limited
213
Annual Integrated
Report 2017
Independent Auditor's Report

To the Shareholders of
LankaBangla Finance Limited
We have audited the accompanying consolidated financial risk assessments, the auditor considers internal control relevant
statements of LankaBangla Finance Limited and its subsidiaries to the entity’s preparation of consolidated financial statements
(“the Group”), as well as the financial statements of LankaBangla of the Group and separate financial statements of the Company
Finance Limited (“the Company”) which comprise the that give a true and fair view in order to design audit procedures
consolidated and the separate balance sheet as at 31 December that are appropriate in the circumstances. An audit also includes
2017, and consolidated and separate statements of profit and evaluating the appropriateness of accounting policies used
loss accounts, consolidated and separate statements of changes and the reasonableness of accounting estimates made by
in equity and consolidated and separate statements of cash management, as well as evaluating the overall presentation of
flows for the year then ended, and a summary of significant the consolidated financial statements of the Group and also the
accounting policies and other explanatory information. The separate financial statements of the Company.
financial statements of subsidiaries disclosed in note # 36.1 We believe that the audit evidence we have obtained is sufficient
to these consolidated financial statements were audited by and appropriate to provide a basis for our audit opinion.
other auditors and we have relied on those audited financial
statements for the purpose of consolidation. Opinion
Management’s Responsibility for the Consolidated In our opinion, the consolidated financial statements of the
Financial Statements Group and the separate financial statements of the Company
give a true and fair view of the consolidated financial position
Management is responsible for the preparation of the of the Group and the separate financial position of the Company
consolidated financial statements of the Group and also the as at 31 December 2017, and of the consolidated and the
separate financial statements of the Company that give a true separate financial performance and cash flows of the Group
and fair view in accordance with Bangladesh Financial Reporting and the Company for the year then ended in accordance with
Standards (BFRS), the Financial Institutions Act 1993, the rules Bangladesh Financial Reporting Standards (BFRS) and comply
and regulations issued by Bangladesh Bank, the Securities with the applicable sections of the Financial Institutions Act
and Exchange rules 1987, the Companies Act 1994 and other 1993, the rules and regulations issued by Bangladesh Bank, the
applicable laws and regulations and for such internal control as Companies Act 1994, the Securities and Exchange Rules 1987
management determines is necessary to enable the preparation and other applicable laws and regulations.
of financial statements that are free from material misstatement,
whether due to fraud or error. Report on Other Legal and Regulatory Requirements
We also report that:
Auditor’s Responsibility
i. We have obtained all the information and explanation which
Our responsibility is to express an opinion on the consolidated to the best of our knowledge and belief were necessary for
financial statements of the Group and the separate financial the purposes of our audit and made due verification thereof
statements of the Company based on our audit. We conducted and found satisfactory;
our audit in accordance with Bangladesh Standards on
Auditing (BSA). Those standards require that we comply with ii. in our opinion, proper books of account as required by law
have been kept by the Company so far as it appeared from
ethical requirements and plan and perform the audit to obtain
our examination of those books;
reasonable assurance about whether the consolidated financial
statements of the Group and the separate financial statements iii. the consolidated balance sheet and the consolidated profit
of the Company are free from material misstatement. and loss account of the Group and the separate balance sheet
and the separate profit and loss account of the Company
An audit involves performing procedures to obtain audit together with annexed notes from 1 to 40 dealt with by the
evidence about the amounts and disclosures in the consolidated report are in agreement with the books of account;
financial statements of the Group and the separate financial
statements of the Company. The procedures selected depend iv. the expenditure incurred was for the purpose of the Group
on the auditor’s judgment, including the assessment of the and the Company’s business;
risks of material misstatement of the consolidated financial v. the consolidated financial statements of the Group and those
statements of the Group and separate financial statements of of the Company have been drawn up in conformity with the
the Company, whether due to fraud or error. In making those Financial Institution Act 1993 and in accordance with the
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214
LankaBangla
accounting rules and regulations issued by Bangladesh Bank Bangladesh Bank and the instructions issued by Bangladesh
to the extent applicable to the Company; Bank and other regulatory authorities have been complied
vi. the record submitted by the parent company and the properly;
subsidiary companies have been audited and consolidated xiii. the internal control and the compliance of the Company
properly in the financial statements; is satisfactory, and effective measures have been taken to
vii. the records and accounts of the branches have been properly prevent possible fraud, forgery and internal policies are
maintained and consolidated in the financial statements; being followed appropriately;
viii. adequate provisions have been made for leases and advances xiv. the Company has complied with relevant laws pertaining
and other assets which are, in our opinion, doubtful of to capital, reserve and net worth, cash and liquid assets
recovery and Bangladesh Bank’s instructions in this regard and procedure for sanctioning and disbursing loans/ leases
have been followed properly; found satisfactory;
ix. statements sent to Bangladesh Bank have been checked on xv. the consolidated financial statements of the Group and the
sample basis and no inaccuracy has come to our attention; separate financial statements of the Company conform to
x. taxes and other duties collected and deposited to Government the prescribed formats and standards set in the accounting
treasury by the Company as per Government instructions regulations issued by Bangladesh Bank after consultation
found satisfactory; with the professional accounting body of Bangladesh;
xi. nothing has come to our attention that the Company has xvi. we have reviewed over 80% of the risk weighted assets of
adopted any unethical means i.e. ‘window dressing’ to inflate the Group and the Company during the course of our audit
the profit and mismatch between the maturity of assets and and we have spent over 1,650 person hours for the audit of
liabilities; books and accounts of the Group and the Company; and
xii. proper measures have been taken to eliminate the xvii. all other issues which are important for the stakeholders of
irregularities mentioned in the inspection report of the Company have been adequately disclosed in the audit
report;
Dhaka, ACNABIN
13 February 2018 Chartered Accountants
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LANKABANGLA FINANCE LIMITED AND ITS SUBSIDIARIES 215

Annual Integrated
CONSOLIDATED BALANCE SHEET Report 2017
As at 31 December 2017
Amount In Taka
Notes
31.12.2017 31.12.2016
PROPERTY AND ASSETS
Cash 1,155,230,423 700,351,241
Cash in hand (including foreign currencies) 3 476,721 786,380
Balance with Bangladesh Bank and its agent banks (including 4 1,154,753,702 699,564,861
foreign currencies)
Balance with other banks and financial institutions 5 8,874,982,033 4,343,232,588
Inside Bangladesh 8,874,982,033 4,343,232,588
Outside Bangladesh - -
Money at call and short notice - -
Investment 6 5,469,169,711 5,036,650,257

Government securities - -
Other investments 5,469,169,711 5,036,650,257
Leases, loans and advances 7 66,544,357,447 51,244,299,783

Loans, cash credit and overdraft etc. 66,544,357,447 51,244,299,783
Bills discounted and purchased - -
Fixed assets including land, building, furniture and fixtures 8 1,761,772,474 1,429,556,859
Other assets 9 1,637,203,086 1,289,422,836
Non-Banking assets - -
TOTAL PROPERTY AND ASSETS 85,442,715,174 64,043,513,565

Liabilities
Borrowings from Bangladesh Bank, other banks and financial institutions 10 18,563,686,212 10,874,998,487
Deposits and other accounts 11 51,675,158,138 40,148,492,755

Current deposits and other accounts etc. - -
Bills payable - -
Saving bank deposit - -
Term deposits 11.1 51,552,816,766 40,033,189,441
Bearer certificate of deposits - -
Other deposits 11.2 122,341,372 115,303,314
Other liabilities 12 6,775,350,993 6,248,591,612

TOTAL LIABILITIES 77,014,195,343 57,272,082,854
Shareholders' Equity 8,327,000,468 6,686,609,319

Paid up capital 13 3,182,509,410 2,767,399,490
Share money deposit for right issue 160,307,660 -
Share premium 1,090,888,800 1,090,888,800
Statutory reserve 14 1,472,602,021 1,202,043,919
General reserve 50,867,438 46,768,017
Retained earnings 15 2,369,825,140 1,579,509,093
Non controlling interest 16 101,519,363 84,821,392

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 85,442,715,174 64,043,513,565
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216
LankaBangla
Amount In Taka
Notes
31.12.2017 31.12.2016
OFF-BALANCE SHEET ITEMS
CONTINGENT LIBILITIES
Acceptances and endorsements - -
Letter of guarantee 670,068,707 241,148,846
Irrevocable letters of credit - -
Bill for collection - -
Other contingent liabilities - -
TOTAL CONTINGENT LIBILITIES 670,068,707 241,148,846
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 8,554,741,350 6,156,822,112
TOTAL OTHER COMMITMENTS 8,554,741,350 6,156,822,112
TOTAL OFF BALANCE SHEET ITEMS 9,224,810,057 6,397,970,958
The annexed notes form an integral part of these consolidated financial statements.
Director Director Managing Director Company Secretary
This is the Consolidated Balance Sheet referred to in our separate report of even date.
Dhaka, ACNABIN
www.lankabangla.com

Annual Integrated
CONSOLIDATED PROFIT AND LOSS ACCOUNT Report 2017
Amount In Taka
Notes
2017 2016
Operating Income
Interest income 17 7,076,089,286 5,661,544,246
Less : Interest expenses on deposits & borrowings 18 4,838,840,868 3,964,079,328
Net interest income 2,237,248,418 1,697,464,918
Income from investment 19 914,222,486 483,526,596
Commission, exchange and brokerage income 20 1,136,001,530 560,859,417
Other operational income 21 854,466,614 599,634,180
Total operating income 5,141,939,047 3,341,485,111
Operating Expenses
Salary and allowances 22 1,300,145,142 987,348,613
Rent, taxes, insurance, electricity etc. 23 220,562,073 187,066,477
Legal and professional fees 24 33,424,026 30,013,397
Postage, stamp, telecommunication etc. 25 28,819,579 20,638,151
Stationery, printing, advertisement 26 66,035,302 47,485,747
Managing director's salary and allowance 27 10,726,667 17,489,000
Director fees and expenses 28 2,387,300 2,591,389
Audit fees 29 1,092,500 1,227,625
Repairs, maintenance and depreciation 30 183,401,905 123,478,392
Other expenses 31 824,585,567 581,834,581
Total operating expenses 2,671,180,060 1,999,173,372
Net Operating Income 2,470,758,986 1,342,311,739
Provisions for loans, investments and other assets 206,948,220 395,649,328
Provisions for leases and loans 32 248,441,162 199,224,797
Provision for margin loan 36,766,605 313,531,665
Provision for diminution in value of investments (76,109,546) (117,107,133)
General provision for other assets (2,150,000) -
Profit before tax and reserve 2,263,810,766 946,662,411
Provision for tax 337,521,607 151,019,485

Current tax 33 334,274,885 148,304,531
Deferred tax 3,246,722 2,714,954
Net profit after tax 1,926,289,159 795,642,925
Attributed to
Shareholders of the Company 36.4 1,898,845,450 795,521,340
Non controlling interest 27,443,709 121,585
1,926,289,159 795,642,925
Appropriations 274,657,522 207,329,782

Statutory reserve 270,558,101 214,410,834
General reserve 4,099,421 (7,081,053)
Retained surplus 1,624,187,928 588,191,558
Earnings Per Share ( 2016 restated) 34 5.97 2.50
This is the Consolidated Profit and Loss Account referred to in our separate report of even date.
Dhaka, ACNABIN
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218 LANKABANGLA FINANCE LIMITED AND ITS SUBSIDIARIES

LankaBangla
CONSOLIDATED STATEMENT OF CASH FLOWS

Amount In Taka
2017 2016
A) Cash flows from operating activities
Interest received 7,000,853,944 5,643,928,216
Interest paid (4,364,777,925) (3,736,524,929)
Dividend received 91,737,809 267,597,867
Fees and commission received 1,655,361,503 919,862,071
Income from investment 834,879,162 294,121,128
Cash paid to employees (including directors) (1,239,038,975) (1,020,466,579)
Cash paid to suppliers (133,776,169) (101,908,389)
Income taxes paid (334,203,698) (235,715,801)
Received from other operating activities 332,160,541 242,891,136
Paid for other operating activities (1,065,727,673) (794,659,621)
Cash generated from operating activities before changes in operating assets and liabilities 2,777,468,520 1,479,125,099
Increase/ (decrease) in operating assets & liabilities
Loans and advances to customers (16,136,077,333) (9,799,853,088)
Other assets 45,612,368 (183,113,452)
Deposits from customers 11,526,665,383 10,041,785,026
Other liabilities 196,817,863 957,913,557
Total increase/ (decrease) in operating assets & liabilities (4,366,981,719) 1,016,732,044
Net cash flow from operating activities (1,589,513,199) 2,495,857,143
B) Cash flows from investing activities
Investment in securities (682,519,454) (543,795,463)
Purchase of property, plant and equipment (455,798,713) (244,124,515)
Investment in commercial paper 250,000,000 (120,000,000)
Sales proceeds of fixed assets 8,057,460 8,984,971
Net cash used in investing activities (880,260,707) (898,935,006)
C) Cash flows from financing activities
Receipt of term loan, overdraft and REPO 7,688,687,726 1,868,180,506
Dividend paid (392,592,853) (365,181,408)
Net cash flow from financing activities 7,456,402,533 1,502,999,099
D) Net increase in cash & cash equivalents 4,986,628,627 3,099,921,236
E) Cash and cash equivalents at the beginning of the year 5,043,583,829 1,943,662,593
F) Cash and cash equivalents at the end of the year 10,030,212,456 5,043,583,829
* Closing cash and cash-equivalents
Cash in hand (including foreign currencies) 476,721 786,380
Balance with Bangladesh Bank and its agent bank (s) 1,154,753,702 699,564,861
Balance with other banks and financial institutions 8,874,982,033 4,343,232,588
10,030,212,456 5,043,583,829
Dhaka, ACNABIN
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LANKABANGLA FINANCE LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2017 Amount in Taka
Equity attributable to the shareholders of the Company
Non
Particulars Share money Controlling Total Equity
Share Statutory General Retained
Share Capital deposit for Total Interest
Premium Reserve Reserve Earnings
right issue
Balance as at 01 January 2017 2,767,399,490 - 1,090,888,800 1,202,043,919 46,768,017 1,579,509,093 6,686,609,319 84,821,392 6,771,430,711
Items Involved in Changes in Equity

Right share money deposit received - 160,307,660 - - - - 160,307,660 - 160,307,660
Changes of non controlling interest - - - - - (3,652,034) (3,652,034) (1,347,967) (5,000,000)
Net profit for the year - - - - - 1,898,845,450 1,898,845,450 27,443,709 1,926,289,159
Appropriation to statutory reserve - - - 270,558,101 - (270,558,101) - - -
Appropriation to general reserve - - - - 4,099,421 (4,099,421) - - -
Dividend
Interim cash dividend - - - - - - - (9,397,772) (9,397,772)
Stock dividend (15%) 415,109,920 - - - - (415,109,920) - - -
Cash dividend (15%) - - - - - (415,109,927) (415,109,927) - (415,109,927)

Balance as at 31 December 2017 3,182,509,410 160,307,660 1,090,888,800 1,472,602,021 50,867,438 2,369,825,140 8,327,000,468 101,519,363 8,428,519,831
Balance as at 01 January 2016 2,406,434,340 - 1,090,888,800 987,633,085 53,849,069 1,722,988,700 6,261,793,994 87,458,943 6,349,252,937
Items Involved in Changes in Equity
Adjustments of non controlling interest - - - - - - - - -
Changes of non controlling interest - - - - - (9,740,864) (9,740,864) (2,759,136) (12,500,000)
Net profit for the year - - - - - 795,521,340 795,521,340 121,585 795,642,925
Appropriation to statutory reserve - - - 214,410,834 - (214,410,834) - - -
Appropriation to general reserve - - - - (7,081,053) 7,081,053 - - -
Dividend
Stock dividend (15%) 360,965,150 - - - - (360,965,150) - - -
Cash dividend (15%) - - - - - (360,965,152) (360,965,152) - (360,965,152)
Balance as at 31 December 2016 2,767,399,490 - 1,090,888,800 1,202,043,919 46,768,017 1,579,509,093 6,686,609,319 84,821,392 6,771,430,711
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Report 2017
Annual Integrated

220 LANKABANGLA FINANCE LIMITED AND ITS SUBSIDIARIES

LankaBangla
BALANCE SHEET
Amount In Taka
Notes
31.12.2017 31.12.2016
PROPERTY AND ASSETS
Cash 1,155,072,909 699,874,581
Cash in hand (including foreign currencies) 3 319,207 309,720
Balance with Bangladesh Bank and its agent banks (including 4 1,154,753,702 699,564,861
foreign currencies)
Balance with other banks and financial institutions 5 6,867,656,341 2,230,011,116

Inside Bangladesh 6,867,656,341 2,230,011,116
Outside Bangladesh - -
Money at call and short notice - -

Investment 6 2,127,660,042 2,130,061,460
Government securities - -
Other investments 2,127,660,042 2,130,061,460
Leases, loans and advances 7 61,913,587,489 46,749,199,258

Loans, cash credit and overdraft etc. 61,913,587,489 46,749,199,258
Bills discounted and purchased - -
Fixed assets including land, building, furniture and fixtures 8 1,072,694,198 999,057,016
Other assets 9 5,110,935,231 4,814,291,262
Non-Banking assets - -
TOTAL PROPERTY AND ASSETS 78,247,606,210 57,622,494,692

Liabilities
Borrowings from Bangladesh Bank, other banks and financial 10 15,061,790,454 8,333,852,304
institutions
Deposits and other accounts 11 51,675,158,138 40,148,492,755

Current deposits and other accounts - -
Bills payable - -
Savings bank deposits - -
Term deposits 11.1 51,552,816,766 40,033,189,441
Bearer certificate of deposits - -
Other deposits 11.2 122,341,372 115,303,314
Other liabilities 12 4,242,851,226 2,970,331,482

TOTAL LIABILITIES 70,979,799,818 51,452,676,540
Shareholders' Equity 7,267,806,392 6,169,818,152

Paid up capital 13 3,182,509,410 2,767,399,490
Statutory reserve 14 1,472,602,021 1,202,043,920
Retained earnings 15 2,452,387,301 2,200,374,742
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 78,247,606,210 57,622,494,692
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Annual Integrated
Report 2017
Amount In Taka
Notes
31.12.2017 31.12.2016
OFF-BALANCE SHEET ITEMS
CONTINGENT LIBILITIES
Acceptances and endorsements - -
Letter of guarantee 670,068,707 241,148,846
Irrevocable letters of credit - -
Bill for collection - -
Other contingent liabilities - -
TOTAL CONTINGENT LIBILITIES 670,068,707 241,148,846
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 8,554,741,350 6,156,822,112
TOTAL OTHER COMMITMENTS 8,554,741,350 6,156,822,112
TOTAL OFF BALANCE SHEET ITEMS 9,224,810,057 6,397,970,958
This is the Balance Sheet referred to in our separate report of even date.
Dhaka, ACNABIN
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LankaBangla
PROFIT AND LOSS ACCOUNT
Amount In Taka
Notes
2017 2016
Operating Income
Interest income 17 6,623,172,217 5,432,663,241
Less : Interest expenses on deposits & borrowings 18 4,542,057,908 3,565,181,315
Net interest income 2,081,114,310 1,867,481,926
Commission, exchange and brokerage income 20 - -
Total operating income 3,276,926,181 2,431,418,914
Operating Expenses
Salary and allowances 22 795,440,906 634,844,436
Legal and professional fees 24 30,932,570 23,863,346
Postage, stamp, telecommunication etc. 25 22,355,446 14,987,359
Stationery, printing, advertisement 26 52,134,306 37,743,769
Managing director's salary and allowance 27 10,726,667 17,489,000
Director fees and expenses 28 752,000 736,000
Audit fees 29 575,000 718,750
Other expenses 31 438,343,936 313,674,123
Total operating expenses 1,634,004,803 1,248,419,196
Net Operating Income 1,642,921,379 1,182,999,718
Provisions for loans, investments and other assets 245,531,162 75,663,937

Provisions for leases and loans 32 248,441,162 199,224,797
Provision for diminution in value of investments - (123,560,860)
General provision for other assets (2,910,000) -
Profit before tax and reserve 1,397,390,217 1,107,335,782
Provision for tax 44,599,710 35,281,610
Provision for tax made during the year 33 44,599,710 35,281,610
Deferred tax expense or (income) - -
Net profit after tax 1,352,790,507 1,072,054,172
Appropriations 270,558,101 214,410,834

Statutory reserve 270,558,101 214,410,834
General reserve - -
Retained surplus 1,082,232,406 857,643,338
Earnings Per Share (2016 restated) 34 4.25 3.87
This is the profit and loss account referred to in our separate report of even date.
Dhaka, ACNABIN
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LANKABANGLA FINANCE LIMITED 223

Annual Integrated
STATEMENT OF CASH FLOWS Report 2017
2017 2016
Taka Taka
Interest received 6,547,807,238 5,413,751,225
Interest paid (4,090,518,475) (3,327,572,519)
Fees and commission received 428,193,512 274,762,656
Income from investment 384,499,532 94,190,730
Cash paid to employees (including directors) (796,120,318) (632,272,854)
Cash paid to suppliers (109,732,080) (56,018,261)
Income taxes paid (80,821,830) (116,685,640)
Received from other operating activities 138,472,707 92,634,103
Paid for other operating activities (634,160,851) (472,324,201)
Cash generated from operating activities before changes in assets and liabilities 2,057,936,115 1,337,360,574
Increase/ (decrease) in operating assets & liabilities
Loans and advances to customers (15,195,306,939) (10,684,775,913)
Other assets (86,594,649) 39,693,610
Deposits from customers 11,526,665,383 9,952,488,088
Other liabilities 480,326,629 (147,711,083)
Total (decrease) in operating assets & liabilities (3,274,909,577) (840,305,297)
Net cash (used in)/ flow from operating activities (1,216,973,462) 497,055,277

Investment in securities (247,598,582) (173,777,212)
Net proceeds from Treasury bills - -
Purchase of property, plant and equipment (150,726,517) (186,414,731)
Sales proceeds of fixed assets 4,897,260 1,115,500
Investment in commercial paper 250,000,000 (120,000,000)
Investment in subsidiaries (50,000,000) (62,500,000)
Net cash used in investing activities (193,427,839) (541,576,443)
Receipt of term loan, overdraft and REPO 6,727,938,150 2,097,933,682
Dividend paid (385,000,956) (365,138,883)
Net cash flow from financing activities 6,503,244,854 1,732,794,799
D) Net increase in cash & cash equivalents 5,092,843,553 1,688,273,633

E) Cash and cash equivalents at the beginning of the year 2,929,885,697 1,241,612,064
F) Cash and cash equivalents at the end of the year* 8,022,729,250 2,929,885,697
* Closing cash and cash-equivalents

Cash in hand (including foreign currencies) 319,207 309,720
Balance with Bangladesh Bank and its agent bank (s) 1,154,753,702 699,564,861
Balance with other banks and financial institutions 6,867,656,341 2,230,011,116
8,022,729,250 2,929,885,697
The annexed notes form an integral part of these financial statements.
Dhaka
13 February 2018
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LANKABANGLA FINANCE LIMITED 224
STATEMENT OF CHANGES IN EQUITY
LankaBangla

Amount in Taka
Share money
Share General Total
Particulars deposit for right Statutory Reserve Retained Earnings
www.lankabangla.com
Capital Reserve Equity
issue
Balance as at 01 January 2017 2,767,399,490 1,202,043,920 - 2,200,374,742 6,169,818,152
Items involved in changes in equity

Right share money deposit received - 160,307,660 - - - 160,307,660
Net profit for the year - - - - 1,352,790,507 1,352,790,507
Appropriation to statutory reserve - - 270,558,101 - (270,558,101) -
Stock dividend (15%) 415,109,920 - - - (415,109,920) -
Cash dividend (15%) - - - - (415,109,927) (415,109,927)
Balance as at 31 December 2017 3,182,509,410 160,307,660 1,472,602,021 - 2,452,387,301 7,267,806,392
Balance as at 01 January 2016 2,406,434,340 - 987,633,086 - 2,064,661,706 5,458,729,132

Items involved in changes in equity
Net profit for the year - - - - 1,072,054,172 1,072,054,172

Appropriation to statutory reserve - - 214,410,834 - (214,410,834) -
Stock dividend (15%) 360,965,150 - - - (360,965,150) -
Cash dividend (15%) - - - - (360,965,152) (360,965,152)
Balance as at 31 December 2016 2,767,399,490 - 1,202,043,920 - 2,200,374,742 6,169,818,152
Dhaka
13 February 2018

Annual Integrated
CONSOLIDATED STATEMENT OF LIQUIDITY Report 2017
Amount in Taka
Not more than 1-3 months 3-12 months 1-5 years above 5-years
Particulars Total
1 month term term term term term
Assets
Cash in hand (including balance with
476,721 - 1,154,753,702 - - 1,155,230,423
Bangladesh Bank)
Balance with banks and financial
5,998,214,122 1,550,000,000 1,326,767,911 - - 8,874,982,033
institutions
Money at call and short notice - - - - - -
Investments 130,475,248 236,009,826 1,190,371,855 753,777,620 3,158,535,162 5,469,169,711
Lease, loans and advances 4,321,974,821 5,633,911,534 13,054,953,027 21,802,838,346 21,730,679,719 66,544,357,447
Fixed assets including land, building, furniture
12,971,932 25,943,864 116,747,387 748,133,878 857,975,413 1,761,772,474
and fixtures
Other assets 103,717,818 171,582,844 289,402,479 208,060,472 864,439,473 1,637,203,086
Non-banking assets - - - - - -
Total Assets 10,567,830,662 7,617,448,067 17,132,996,362 23,512,810,316 26,611,629,767 85,442,715,174
Liabilities
Borrowing from other banks, financial institutions
2,868,258,404 2,467,055,177 6,280,717,835 2,768,196,840 4,179,457,956 18,563,686,212
and agents
Deposits and other accounts 4,478,546,634 3,298,178,345 10,267,264,544 16,317,009,786 17,314,158,829 51,675,158,138
Other liabilities 283,179,736 794,569,321 1,221,314,134 3,255,612,034 1,220,675,767 6,775,350,993
Total Liabilities 7,629,984,775 6,559,802,843 17,769,296,513 22,340,818,660 22,714,292,552 77,014,195,343
Net Liquidity Surplus or (Gap) 2,937,845,888 1,057,645,224 (636,300,152) 1,171,991,656 3,897,337,215 8,428,519,831
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LankaBangla
STATEMENT OF LIQUIDITY
Amount in Taka
Not more than 1-3 months 3-12 months 1-5 years above
Particulars Total
1 month term term term term 5-years term
Assets
Cash in hand (including balance with Bangladesh
319,207 - 1,154,753,702 - - 1,155,072,909
Bank)
Balance with banks and financial institutions 3,982,467,535 1,550,000,000 1,335,188,806 - - 6,867,656,341
Money at call and short notice - - - - - -
Investments 50,758,522 91,814,426 463,087,958 293,240,585 1,228,758,552 2,127,660,042
Leases, loans and advances 4,021,211,963 5,241,852,022 8,097,646,015 20,285,595,823 24,267,281,666 61,913,587,489
Fixed assets including land, building, furniture
- - - - 1,072,694,198 1,072,694,198
and fixtures
Other assets 11,774,297 11,479,108 314,302,049 627,442,815 4,145,936,963 5,110,935,231
Non-banking assets - - - - - -
Total Assets 8,066,531,524 6,895,145,556 11,364,978,530 21,206,279,222 30,714,671,379 78,247,606,210
Liabilities
Borrowing from other banks, financial
2,830,000,000 2,390,538,369 4,849,826,791 1,639,533,286 3,351,892,008 15,061,790,454
institutions and agents
Deposits and other accounts 4,478,546,634 3,298,178,345 5,621,207,078 16,317,009,786 21,960,216,295 51,675,158,138
Other liabilities 186,594,196 539,743,269 1,177,243,682 1,583,011,497 756,258,582 4,242,851,226
Total Liabilities 7,495,140,831 6,228,459,982 11,648,277,551 19,539,554,570 26,068,366,885 70,979,799,818
Net Liquidity Surplus or (Gap) 571,390,693 666,685,574 (283,299,021) 1,666,724,652 4,646,304,494 7,267,806,392
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LANKABANGLA FINANCE LIMITED AND ITS SUBSIDIARIES Annual Integrated
Report 2017
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
As at and for the year ended 31 December 2017
1 Legal status and nature of the company

1.1 Domicile, legal form and country of operation
LankaBangla Finance Limited (hereinafter referred to as “LankaBangla” or “the Company”), a joint venture non-banking financial
institution, was incorporated in Bangladesh with the Registrar of Joint Stock Companies and Firms (RJSCF) vide registration no.
C-31702(823)/96 dated 05 November 1996 as a Public Limited Company under the Companies Act, 1994 in the name of “Vanik
Bangladesh Limited”. Subsequently, it was renamed as LankaBangla Finance Limited on 27 April 2005. It started commercial
operations since 1997 obtaining license from Bangladesh Bank under the Financial Institutions Act, 1993. LankaBangla also
obtained license from Securities and Exchange Commission vide No. MB-1.064/98-05 to transact public shares in the Capital
Market as Merchant Banker. The Company went for public issue in 2006 and its shares are listed in both Dhaka Stock Exchange and
Chittagong Stock Exchange on 17 October 2006 and 31 October 2006 respectively.
Consequently the company has acquired the following Licenses and legal approvals:
Sl. No. Name of License Registration of License Date of License Renewed up to
1. Trade License 0341132 - 2017-2018
2. Bangladesh Bank License DFIM(L)/15 30.10.1997 N/A
3. Tax Identification Number (TIN) 210-200-6736 N/A N/A
4. VAT Identification Number 18131009113 N/A N/A
5. Import Registration Certificate BA159696 01.01.2006 2017-2018
6. DCCI Membership Certificate 2857 23.12.2008 2017
7. Board of Investment 9803054-H 30.03.1998 N/A
8. Registration Number C-702(823)/96 05.11.1996 N/A
1.2 Subsidiary companies

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until
the date on which control ceases.
1.2.1 LankaBangla Securities Limited
The Company is holding a subsidiary company named “LankaBangla Securities Limited” (formerly Vanik Bangladesh Securities
Limited) with an equity interest of 96.543161% in the subsidiary company. The subsidiary is a private limited company which was
incorporated with the Registrar of Joint Stock Companies and Firms (RJSCF) vide registration no. C-33276(22)/97 dated 03 July 1997
under the Companies Act, 1994. The principal activities of the company are to act as a member of Dhaka Stock Exchange Limited
and Chittagong Stock Exchange Limited to carry on the business of brokers or dealers in stocks, shares and securities, commercial
papers, bonds, debentures, debentures stocks, foreign currencies, treasury bills and/or any financial instruments. The company
has ten branches in Bangladesh namely Dhaka-Principal, Banani, Dhanmondi, Uttara, Chittagong-Khatungonj, Nasirabad, Agrabad,
Sylhet-Sylhet, Comilla-Comilla and Narayangonj- Narayangonj Branch. LankaBangla Securities Limited has two subsidiaries-
I) LankaBangla Information System Limited
LankaBangla Information System Limited (LBIS) was incorporated with the Registrar of Joint Stock Companies and Firms (RJSCF)
vide registration no. C-108903/13 dated 02 May 2013 as a Private Company Limited by Shares. Its registered office is situated at
Safura Tower, 11th Floor, 20 Kemal Ataturk Avenue, Banani, Dhaka. The Operational activities are carrying out from AA Bhaban
(Level 6), 23 Motijheel C/A, Dhaka-1000. The Company was entitled to commence its business from 02 May 2013. LBIS has a TREC
(Trading Right Entitlement Certificate) in DSE and CSE.
II) BizBangla Media Limited
BizBangla Media Ltd. is a Private Limited Company incorporated on January 18, 2011 under the Companies Act 1994 with the
Registrar of Joint Stock Companies & Firm of Bangladesh vides Reg. No. C- 89751/11. The Registrar office of the company is
situated at 12, Kazi Nazrul Islam Avenue, BDBL Bhaban (Level - 17), Karwan Bazar, Dhaka-1215.
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LankaBangla
1.2.2 LankaBangla Asset Management Company Limited

The Company has another subsidiary company named “LankaBangla Asset Management Company Limited” with an equity interest
of 99.999998% in the subsidiary company. LankaBangla Asset Management Company Limited was incorporated with the Registrar
of Joint Stock Companies and Firms (RJSCF) vide registration no. C-67738(289)/2007 dated 16 July 2007 under the Companies Act,
1994. LankaBangla Asset Management Company Limited got license from Bangladesh Securities and Exchange Commission (BSEC)
on June 24, 2012 vide registration no: SEC/Asset Manager/2012/17 to operate as a full-fledged asset management company.
1.2.3 LankaBangla Investments Limited
The Company has also another subsidiary company named “LankaBangla Investment Limited” with an equity interest of
99.999996% in the subsidiary company. LankaBangla Investment Limited was incorporated as private limited company with the
Registrar of Joint Stock Companies and Firms (RJSCF) vide registration no. C-83568/10 dated 29 March 2010 under the Companies
Act, 1994. Later on the company converted itself into a public limited company with effect from 12 June 2013. LankaBangla
Investment Limited also applied for registration to the Bangladesh Securities and Exchange Commission for approval to operate in
the Capital Market.
1.2.4 Group Structure of LankaBangla
Direct Indirect Total

Sl. Name
Ownership Interest Ownership Interest Ownership Interest
1. LankaBangla Securities Limited 90.9091767% 5.6339838% 96.5431606%
2. LankaBangla Investments Limited 99.9999964% - 99.9999964%
3. LankaBangla Asset Management Company Limited 99.9999980% - 99.9999980%
4. LankaBangla Information System Limited - 96.3500742% 96.3500742%
5. BizBangla Media Limited - 77.2345285% 77.2345285%
1.3 Company’s activities
The activities of the company include services broadly classified as fee based and fund based services:
• Fees based services include Credit Card Membership Fees, Merchants Commission, Underwriting of Securities, IPOs, Portfolio
Management, and Corporate Financial Services etc.
• Fund based services include Lease Finance, Term Finance, Real Estate Finance, Hire Purchase, Credit Card Operation, SME
Finance, Auto loan, Personal Loan, Emerging and Commercial, Syndication Finance, Revolving Credit, Loan against Deposit, and
Staff Loan etc.
• LankaBangla also provides brokerage services, Merchant Bank services and Asset Management Services through its majority
owned subsidiary company.
2. Basis for preparation and significant accounting policies
2.1 Statement of compliance
The consolidated financial statements and separate financial statements of LankaBangla have been prepared on a going concern
basis following accrual basis of accounting except for statement of cash flows as per DFIM circular No # 11 dated 23 December
2009 issued by Department of Financial Institutions and Market of Bangladesh Bank with reference to the provisions of Financial
Institutions Act 1993 and Bangladesh Bank’s other circulars and guidelines or directives and in accordance with Bangladesh
Financial Reporting Standards (BFRS1), the Companies Act 1994, the Financial Institutions Act 1993, the Securities and Exchange
Rules 1987, the Listing Rules of Dhaka and Chittagong Stock Exchanges.
In several cases, the laws, circulars, guidelines or directives of Bangladesh Bank differ from those of financial reporting standards
as promulgated by International Accounting Standards Body (IASB) and as adopted by national standard setter, i.e., Institute of
Chartered Accountants of Bangladesh (ICAB), the requirements of Bangladesh Bank prevails and these financial statements have
been prepared by departing from those requirements of BFRS with a view to comply with the regulatory requirements .
The requirements of accounting standards as per BFRS that have been departed to comply with Bangladesh Bank requirements
have been disclosed in detail in Note - 2.5.
However, this departure with BFRS has been made by following all of the relevant provisions of BAS – 1 and the details disclosures
are given in Note - 2.5 by following the provision of Para 20 of BAS – 1 (Presentation of Financial Statements).
1
The term “BFRS” refers to all standards and interpretations adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) in compliance with those
promulgated and adopted by International Accounting Standards Board (IASB). Therefore, BFRS includes all BAS and BFRS along with all of the relevant interpretations
adopted by ICAB.
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2.2 Presentation of financial statements

The presentation of the financial statements has been made as per the requirements of DFIM Circular No: 11, dated 23 December
2009 issued by the Department of Financial Institutions and Markets of Bangladesh Bank. The activities and accounting heads
mentioned in the prescribed form, which are not applicable for the financial institutions, have been excluded in preparing the
2.3 Basis of measurement and consolidation
These financial statements have been prepared on the historical cost convention other than the finance lease asset and finance
lease obligations which were measured at present value of the minimum lease payments. No adjustment has been made for
inflationary factors affecting the financial statements. The accounting policies, unless otherwise stated, have been consistently
applied by the Company and are consistent with those of the previous year.
The accounts of all the subsidiaries of the Company have been fully consolidated as the Company directly controls more than 50%
of the voting shares of these entities.
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized
gains, but only to the extent that there is no evidence of impairment.
2.4 Non-Controlling Interest
Non-Controlling Interests are measured at their proportionate share of the acquires identifiable net assets at the date of acquisition
as per Para 19 of BFRS – 3 “Business Combinations”.
The company presents the non-controlling interests in the consolidated balance sheet within equity, separately from the equity of
the owners of parent as per Para 22 of BFRS – 10 “Consolidated Financial Statements”.
Changes in Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transaction as per Para
23 of BFRS – 10 “Consolidated Financial Statements”.
The company attributes the profit and loss to the owners of the parent and to the non-controlling interests even if the results in
the non-controlling interest having a deficit balance as per provision of Para B94 of BFRS – 10 “Consolidated Financial Statements”.
When the proportion of the equity held by the non-controlling interests changes, the company adjusted the carrying amounts
of the controlling and non-controlling interests to reflect the changes in their relative interests in the subsidiary and recognized
directly in equity for any difference between the amount by which the non-controlling interests are adjusted and the fair value
of the consideration paid or received, and attribute it to the owners of the parent by as per provision of Para B96 of BFRS – 10
“Consolidated Financial Statements”.
Further details about non-controlling interest are given in Note – 16 and Note-36.4 of Financial Statements.
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2.5 Disclosure of departure from few requirements of BFRS due to mandatory compliance of Bangladesh Bank’s requirements 230
Bangladesh Bank is the ultimate regulatory body for Non-Banking Financial Institutions (NBFI) in Bangladesh. Some requirements of Bangladesh Bank’s rules and
regulations contradict with those of BFRS. As such the company has departed from those contradictory requirements of BFRS in order to comply with the rules and
LankaBangla
regulations of Bangladesh Bank which are disclosed below along with financial impact where applicable:
Sl. Nature of Treatment of BFRS Treatment Adopted as per Bangladesh Bank Financial or Presentation
Departure Title of BFRS Effect of the Departure
1 Measurement BAS 39 "Financial An entity shall assess at the end of each reporting period As per FID circular No. 08 dated 03 August 2002, FID circular No. 03, In separate Financial Statements,
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of provision Instruments: whether there is any objective evidence that a financial asset provision has been kept for 2017
dated 03 May 2006 and FID circular No. 03, dated 29 April 2013, a general
for leases, Recognition and or group of financial assets measured at amortized cost is equivalent to BDT 248.44 million as
provision at 0.25% to 5% under different categories of unclassified loans
loans and Measurement" impaired. (good/standard loans) has to be maintained irrespective of objective per Bangladesh Bank guidelines among
advances evidence of impairment on lease, loans and advances. which BDT 85.66 million is general
If any such evidence exists, the entity shall measure the
(financial provision on good loan. Also, as at 31

amount of the loss as the difference between the asset’s
assets Also provision for sub-standard investments, doubtful investments and December 2017, accumulated provision
carrying amount and the present value of estimated future
measured at bad losses has to be provided at 20%, 50% and 100% respectively for for lease, loan and advances stand at BDT
cash flows (excluding future credit losses that have not investments depending on the duration of overdue.
amortized 1,243.36 million.
been incurred) discounted at the financial asset’s original
cost)
effective interest rate. The carrying amount of the asset shall In consolidated financial statements,
be reduced either directly or through use of an allowance provision has been kept for 2017
account. equivalent to BDT 248.44 million as
per Bangladesh Bank guidelines Also,
as at 31 December 2017, accumulated
provision for leases, loans and advances
stand at BDT 1,434.42 million.
2 Valuation of BAS 39 "Financial Investment in shares falls either under “at fair value through As per FID circular No. 08 dated 03 August 2002 investments in quoted During this year there is no impact in
Investments Instruments: statement of comprehensive income” or under “available for shares and unquoted shares are revalued at the year end at market the financial statements due to this
in quoted and Recognition and sale” where any change in the fair value (as measured as per price and as per book value of last audited balance sheet respectively. departure as total market value of all
unquoted Measurement" BFRS 13 "Fair Value") at the year-end is taken to statement Provision should be made for any loss arising from diminution in value of shares of the group are more than the
shares of comprehensive income or revaluation reserve respectively. investment; however in case of any unrealized gain, no such gain can be cost price.
recognized and investments are recognized at cost only.
3 Recognition BAS 39 "Financial Income from financial assets measured at amortized cost is As per FID circular No. 03, dated 03 May 2006 , once an investment At year end, in separate Financial
of interest Instruments: recognized through effective interest rate method over the on leases, loans and advances is termed as "Special Mention Account Statements interest suspense account
income for Recognition and term of the investment. Once an financial asset is impaired, (SMA)", interest income from such investments are not allowed to has increased to BDT 385.62 million
SMA and Measurement" investment income is recognized in profit and loss account on be recognized as income, rather the respective amount needs to be from 349.91 million resulting increase of
classified the same basis based on revised carrying amount. credited as a liability account like: interest suspense account. BDT 35.71 million of interest suspense.
lease, loans This amount has been shown in other
and advances liabilities in note 12.3, rather shown as
interest income.
4 Presentation BAS 7 "Statement Cash equivalent are short term, highly liquid investments that Bangladesh Bank has issued templates for financial statements vide Presentation of financial statements is
of cash of Cash Flows" are readily convertible to known amounts of cash and only DFIM Circular# 11 dated December 23, 2009 which will strictly be not fully aligned with the requirements
and cash include those investments which are for a short tenure like: 3 followed by all banks and NBFIs. of BAS. Thus items which should be
equivalent months or less period. presented as “investment activities”
The templates of financial statements provided detail of presentation of
as per BAS is shown as cash & cash
In the light of above, balance with Bangladesh Bank and fixed statement cash flows.
equivalent.
term deposits should be treated as investment asset rather
than cash equivalent as it is illiquid asset and not available for
use in day to day operations.
5 Measurement BAS 12 "Income A deferred tax asset shall be recognized for all deductible As per DFIM circular No. 7 dated 31 July 2011, no deferred tax asset During this year there is no impact in
of deferred tax Tax" temporary differences to the extent that it is probable that can be recognized for any deductible temporary difference against lease, the financial statements due to this
asset taxable profit will be available against which the deductible loans and advances. departure as the Company has no taxable
temporary difference can be utilized. income in near future.
Sl. Nature of Treatment of BFRS Treatment Adopted as per Bangladesh Bank FFinancial or Presentation
Departure Title of BFRS Effect of the Departure
6 Presentation BAS 1 Other Comprehensive Income (OCI) is a component of Bangladesh Bank has issued templates for financial statements vide DFIM Presentation of financial statements is not
and disclosure "Presentation financial statements or the elements of OCI are to be included Circular# 11 dated December 23, 2009 which will strictly be followed by all banks fully aligned with all requirements of BAS.
of Financial of Financial in a single Other Comprehensive Income statement. and NBFIs.
Statements Statements"
BAS 1 requires separate line item for intangible assets on the The templates of financial statements issued by Bangladesh Bank do not
and Financial
BAS 32 “Financial face of statement of financial position. include Other Comprehensive Income (OCI) nor are the elements of Other
Instruments
Instruments: Comprehensive Income allowed to include in a Single Comprehensive Income
BAS 32 and BFRS 7 require specific presentation and disclosure
Presentation" Statement.
relating to all financial instruments.
BFRS 7 "Financial Intangibles assets are not separately presented on the face of statement of
Instruments financial position; rather it is presented along with the line item of fixed assets.
Disclosure"
As per Bangladesh Bank guidelines, financial instruments are categorized,

recognized and measured differently from those prescribed in BAS 39. As such
some disclosure and presentation requirements of BFRS 7 and BAS 32 have not
been made in the accounts.
7 Preparation of BAS 7 "Statement The Cash flow statement can be prepared using either the As per DFIM Circular-11, Date-23 December 2009, Cash flow statement has Presentation of financial statements is not
“Statement of of Cash Flows" direct method or the indirect method. The presentation is been guided by the Bangladesh Bank which is the mixture of direct and indirect fully aligned with all requirements of the
Cash Flows” selected to present these cash flows in a manner that is most method. BAS.
appropriate for the business or industry. The method selected
is applied consistently.
8 Current/ BAS-1 As per Para 60 of BAS-1 “Presentation of Financial statement” As per DFIM Circular-11, Date-23 December 2009, Bangladesh Bank has issued Presentation of financial statements is not
Non-current “Presentation An entity shall present current and non-current assets and templates for financial statements which is applicable for all the Financial fully aligned with all requirements of the
distinction of Financial current and non-current liabilities as separate classification in Institutions. In this templates there is no current and non-current segmentation BAS. Moreover, the liquidity statement
Statement” its statement of financial position. of assets and liabilities shows the current/non-current portion of
assets and liabilities in this regards.
9 Off-balance BAS 1 There is no concept of off-balance sheet items in any BFRS; As per DFIM Circular-11, Date-23 December 2009, off balance sheet items (e.g. Presentation of financial statements is not
sheet items "Presentation hence there is no requirement for disclosure of off-balance letter of credit, letter of guarantee etc.) must be disclosed separately on the face aligned with requirements of the BAS 1.
of Financial sheet items on the face of the balance sheet. of the balance sheet.
There is no financial impact for this
Statements"
departure in the financial statements
10 Impairment BAS-39 “Financial Measurement after initial recognition at amortized cost and As per Bangladesh Securities and Exchange Commission (BSEC) circular # BSEC/ As per the requirement of the BSEC
of Margin instruments: recording of changes through profit and loss. Mukhpatro (Ditio Khondo)/2011/2205 dated 30 November 2015 provisions for circular 20% of erosion of principal portion
Loan Recognition and the year 2017 on impairement of principal portion of margin loan may be kept at of margin loan is kept as provision in the
(Loans and measurement” 20% on each quarter for the five quarters starting from December 2015. financial statement amounting to BDT
receivables 36.76 million.
11 Complete set BAS 1 As per BAS 1”Presentation of Financial Statements’’ complete As per DFIM Circular-11, Date-23 December 2009, complete set of financial Presentation of financial statements is not
of fi nancial "Presentation set of financial statements are statements are aligned with requirements of the BAS 1.
statements of Financial i) statement of financial position, i) balance sheet,
There is no financial impact for this
Statements" ii)statement of profit or loss and other comprehensive ii) profit and loss account,
departure in the financial statements.
income, iii) statement of cash flows,
iii) statement of changes in equity, iv) statement of changes in equity,
iv) statement of cash flows, v) statement of liquidity,
v) notes, comprising significant accounting policies and other vi) notes, comprising significant accounting policies and other explanatory
explanatory information and information.
vi) statement of financial position at the beginning of
preceding period for retrospective restatement.
12 Intangible BAS 1 As per BAS 1"Presentation of Financial Statements’’ para 54 As per DFIM Circular-11, Date-23 December 2009, there is no option for separate Presentation of financial statements is not
asset "Presentation the statement of financial position shall include separate line line item for intangible asset in the balance sheet. aligned with requirements of the BAS 1.
of Financial item for intangible assets.
We present intangible asset in the balance sheet as part of fixed assets and There is no financial impact for this
Statements"
provide details in annexure- A as separate line item. departure in the financial statements.
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2.6 Components of the financial statements

The financial statements comprise of (As per DFIM Circular-11, Dated 23 December 2009 and as per the para 10 of BAS 1:
Presentation of Financial Statements):
a) Consolidated and Separate Balance Sheet as at 31 December 2017;
b) Consolidated and Separate Profit and Loss Account for the year ended 31 December 2017;
c) Consolidated and Separate Statement of Cash Flows for the year ended 31 December 2017;
d) Consolidated and Separate Statement of Changes in Equity for the year ended 31 December 2017;
e) Consolidated and Separate Liquidity Statement for the year ended 31 December 2017;
f) Notes to the Consolidated and Separate Financial Statements for the year ended 31 December 2017.
2.7 Presentation and functional currency and level of precision
The financial statements are presented in Bangladesh Taka (BDT) currency, which is the Company’s functional currency. All financial
information presented in BDT has been rounded off to the nearest BDT.
2.8 Use of estimates and judgments
The preparation of financial statements in conformity with Bangladesh Financial Reporting Standards (BFRS) requires management
to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. It also requires
disclosures of contingent assets and liabilities at the date of the financial statements. Provisions and accrued expenses are
recognized in the financial statement in line with the Bangladesh Accounting Standard (BAS) 37 “Provisions, Contingent Liabilities
and Contingent Assets” when
• the Company has a legal or constructive obligation as a result of past event.
• it is probable that an outflow of economic benefit will be required to settle the obligation.
• a reliable estimate can be made of the amount of the obligation.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the result of which form the basis of making the judgments about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Significant areas are where management requiring the use of estimate and judgment
• Useful life of depreciable assets (see policy note-2.21.3).
• Provision for leases, loans, advances and investments for future impairment (see policy note-2.26).
• Provision for Gratuity scheme (see policy note-2.36.2).
However, the estimates and underlying assumptions are reviewed on an ongoing basis and the revision is recognized in the period
in which the estimates are revised.
Changes in accounting estimates
During 2017, the Company has not adopted any change of accounting estimates and consistency applies same accounting estimates
of the year of 2016.
2.9 Contingent asset and contingent liability
The Company does not recognize any Contingent Asset and Contingent Liability; but discloses the existence of contingent liability
in the financial statements. A contingent liability is a probable obligation that arises from the past events and whose existence will
be confirmed by the occurrence of uncertain future events beyond the control of the Company or a present obligation that is not
recognized because of outflow of resources is not likely or obligation cannot be measured reliably.
2.10 Going concern
The Company has adequate resources to continue in operation for foreseeable future. For this reason the directors continue to
adopt going concern basis in preparing the accounts. The current credit facilities and resources of the Company provide sufficient
funds to meet the present requirements of its existing businesses and operations.
2.11 Materiality and aggregation
Each material item as considered by management significant has been presented separately in financial statements. No amount
has been set off unless the Company has a legal right to set off the amounts and intends to settle on net basis. Income and
expenses are presented on a net basis only when permitted by the relevant accounting standards.
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2.12 Directors' responsibility statement

The Board of Directors takes the responsibility for the preparation and presentation of these consolidated and separate financial
statements.
2.13 Statement of cash flows
Statement of cash flows has been prepared in accordance with the template provide with DFIM circular no.-11, Date-23 December
2009 which is a mixture of Direct and Indirect method of BAS 7 “Statement of Cash Flows”.
2.14 Branch accounting
The Company has 24 branches and a SME Booth, with no overseas branch as on 31 December 2017. Accounts of the branches are
maintained at the Branch level, and consolidated through the Accounting software automatically in head office from which these
accounts are drawn up.
2.15 Cash and cash equivalent
Cash and cash equivalents comprise cash in hand, current account with Bangladesh Bank, interest bearing and non-interest bearing
bank deposit, fixed deposits and investments in call loan that are readily convertible to a known amount of cash, and that are not
subject to significant risk of change in value. Cash and cash equivalents are used and maintained for day to day operation of the
company and for CRR and SLR requirements of Bangladesh Bank.
2.16 Investments
Investments comprise of equity, debt, government securites and unit funds. All investments are initially recognized at cost, being
fair value of the consideration given, including cost of acquisition associated with the investment. The valuation methods of
investments used are:
Held to maturity (HTM)
Investments in Government Treasury Bills and Government Treasury Bonds classified as “Held to Maturity” are non-derivatives
financial assets with fixed or determinable payments and fixed maturities that the management has the intention and ability to
held to maturity (HTM).
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 impairment in
the fair value is recognized in the statement of comprehensive income for the period in which it arises. However, as referred in
Note – 2.5, no gain is recognized in statement of profit and loss account as per BB guidelines.
Investment in shares are classified broadly in two categories and accounted for as under:
Investments in marketable shares
Investments in listed securities are carried at cost. Adequate provision has been made considering each individual investment
(where market price is less than cost) as guided by Bangladesh Bank. Unrealized gains are not recognized in the profit and loss
account.
Investments in non-marketable shares
Investments in unlisted securities are 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 subsidiaries
Investments in subsidiaries are accounted for under the cost method of accounting in the Company’s separate financial statements
in accordance with BAS-27. Accordingly, investments in subsidiaries are stated in the Company’s statement of financial position at
cost, less impairment losses (if any).
2.17 Accounting for leases
The company, through implementation of BAS 17 “Leases”, has been following the finance lease method for accounting of lease
incomes. The aggregate lease receivables including un-guaranteed residual value are recorded as gross lease receivables while the
excess of gross lease receivables over the total acquisition cost and interest during the acquisition period of lease assets constitutes
the unearned lease income. Initial direct costs (if any) in respect of lease are charged in the period in which such costs are incurred.
The unearned lease income is usually amortized to revenue on a monthly basis over the lease term yielding a constant rate of
return over the period. Unrealized income is suspended, in compliance with the requirements of circular issued by the DFIM of
Bangladesh Bank.
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2.18 Accounting for term finance

Books of account of term finance operation are maintained based on the accrual method of accounting. Outstanding loans, along
with the accrued interest thereon, for short-term finance, and unrealized principal for long-term finance are accounted for as term
finance assets of the company. Interest earnings are recognized as accrual basis.
2.19 Accounting for margin loan
Margin Loan to Portfolio investors is given at an agreed ratio between investors deposit and loan amount to purchase securities
against respective investor account. The investors are to maintain the margin as per set rules and regulations. The margin is
monitored on daily basis as it is changes due to changes in market price of share. If the margin falls below the minimum requirement,
the investors are required to deposit additional fund to maintain the margin as per rules otherwise the securities are sold to bring
the margin to the required level.
Interest on Margin loan is charged on client’s portfolio value on daily basis at the applicable rate. Whenever the probability arises
that the benefit will flow to the Company this is recognized to income as per para 29 of BAS 18 ‘Revenue’.
2.20 Financial liabilities
Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of financial
liability. After initial recognition, all financial liabilities are measured at amortized cost using the effective interest method. The
amortized cost of a financial liability is the amount at which the financial liability is measured at initial recognition minus principal
repayments, plus the cumulative amortization using the effective interest. The effective interest method is a method of calculating
the amortized cost of a financial liability and of allocating the interest expense over the relevant period. The effective interest rate
is the rate that exactly discounts estimated future cash payments through the expected life of the financial instrument.
2.21 Recognition of fixed assets
2.21.1 Assets acquired under own finance
These are recognized initially at cost and subsequently at cost less accumulated depreciation in compliance with the BAS 16,
“Property Plant and Equipment”. The cost of acquisition of an asset comprises its purchase price and any direct cost attributable
to bringing the assets to its working condition for its intended use. Expenditure incurred after the assets have been put into use,
such as repairs and maintenance is normally charged off as revenue expenditure in the period in which it is incurred. In situation
where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefit expected
to be obtained from the assets, the expenditure is capitalized as an additional cost of the assets. Software and all up-gradation or
enhancements are generally charged off as revenue expenditure unless they bring similar significant additional benefits.
The company purchased land at Tejgaon Industrial area measuring 20 (twenty) katha in 2015 for the purpose of construction of
a high raise building (LankaBangla Tower) for its Head Office. For purchasing the said land the company borrowed a fund of Tk.
643,801,400. Recently the govt. has declared Tejgaon zone as commercial area instead of industrial area. In this regard a bill related
to commercialization of the said zone has already been passed in the National Parliament and Gazette Notification thereof is in
process. Legal, technical and administrative procedures from the part of LankaBangla Finance Limited are yet to be completed to
make the Land ready for its intended use, i.e. construction of the Building and as such the borrowing cost related to the purchase
of the said land has been capitalized as per para 19 of BAS- 23: Borrowing Cost.
2.21.2 Assets acquired under finance lease
Assets acquired under finance lease are accounted for by recording the assets at the lower of present value of minimum lease
payments under the lease agreement and the fair value of the asset. The related obligation under the lease is accounted for
as liability. Financial changes are allocated to accounting period in a manner so as to provide a constant rate of charge on the
outstanding liability. Depreciation on fixed assets acquired under lease has been charged in the accounts following the principal
recovery method.
2.21.3 Depreciation on fixed assets
Depreciation will be charge from the day of acquisition of assets and depreciation will be charged on daily basis. However, the
depreciation method on fixed assets is charged using straight-line method at the following rates:
fixed assets Rate
Furniture and fixture 20%
Office equipment 20%
Motor vehicle 20%
IT equipment 33.33%
Building 2.5%
Land Nil
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2.21.4 Depreciation of leased assets

Leased assets in the use and possession of the Company are depreciated in the books of the Company over the lease terms. The
principal portions of lease installment paid or due are charged as depreciation in the period to which it relates.
2.21.5 Subsequent expenditure on fixed assets
Subsequent expenditure is capitalized only when it increases the future economic benefit from the assets and that cost can be
measured reliably. All other expenditures are recognized as an expense as and when they are incurred.
2.21.6 Disposal of fixed assets
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.
2.21.7 Intangible assets
Intangible assets comprise the value of computer software. Intangible assets acquired separately are measured on initial recognition
at cost and are carried at cost less accumulated amortization and accumulated impairment losses if any.
Intangible assets include accounting software, credit card software, other software and integrated systems along with related
hardware.
Amortization
Amortization is calculated using the straight line method to write down the cost of intangible assets to their residual values over
their estimated useful lives based on the management best estimates of four (4) years.
Subsequent expenditure
Subsequent expenditure on software assets is capitalized only when it increases the future economic benefits in the specifications
to which it relates. All other expenditure is expensed as incurred.
2.22 Other assets
Any assets which do not appear as separate line item in the face of the balance sheet of the company are categorised as other assets
as per DFIM circular No # 11 dated 23 December 2009 issued by Department of Financial Institutions and Market of Bangladesh
Bank.
Other assets include advance office rent, payment of advance income tax for which assessment of tax has not been closed yet and
all other financial assets, fees and other unrealized income receivable, advance for operation and investment in subsidiaries etc.
However, investment in subsidiaries is eliminated at time of consolidation in accordance with BFRS -10 ‘Consolidated Financial
Statements’.
2.23 Borrowings from Bangladesh Bank and other banks and financial institutions
Borrowed funds include call money deposits, borrowings, re-finance borrowings and other term borrowings from banks and
financial institutions. These are stated in the statement of financial position at amounts payable. Interest paid or payable on these
borrowings is charged to the statement of comprehensive income.
2.24 Term deposits and other deposits accounts
2.24.1 Term Deposits
Term Deposits by customers and banks/NBFI are recognized when the Company enters into contractual provisions of the
arrangements with the counterparties, which is generally on trade date, and initially measured at the consideration received.
2.24.1 Other deposits
Other deposits include advance rentals/installments received from assets clients against leases, loans and advances which will be
adjusted at the end of termination/settlement of leases, loans and advances in accordance with terms and conditions mentioned
in the sanction letter.
2.25 Provision for liabilities
A provision is recognized in the profit and loss account when the Company 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".
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2.26 Provision for leases, loans and advances

Generally, provision against classified loans and advances is made on the basis of quarter end review by the management and
instruction contained in Bangladesh Bank FID Circular No. 08, dated 03 August 2002, FID Circular No. 11, dated 31 October 2005,
and FID Circular No. 06, dated 20 August 2006. However, at the discretion of management, provision against classified loans and
advances may be made on monthly basis. The provisions rates are given below
Particulars Rates
General Provision on:
Unclassified of leases, loans and advances except SME 1%
Unclassified of Small and Medium Enterprise(SME) 0.25%
Special Mention Account of leases, loans and advances 5%
Specific Provision On:
Sub-standard of leases, loans and advances 20%
Doubtful of leases, loans and advances 50%
Bad/loss of leases, loans and advances 100%
See details in Annexure-C
2.27 Interest suspense account
In compliance with Bangladesh Bank FID Circular No. 08, dated 03 August 2002, FID Circular No. 11, dated 31 October 2005, and
FID Circular No. 06, dated 20 August 2006, interests on leases, loans and advances overdue beyond three months period (in case
of loan duration is within 5 years) and overdue beyond six months period (in case of loan duration is more than 5 years) are not
recognized as revenue and credited to interest suspense account.
Interests on mortgage finance overdue beyond nine months are not recognized as revenue and credited to interest suspense
account.
See details in Annexure-C
2.28 Borrowing cost
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of fund.
The Company capitalized borrowing costs that is directly attributable to the acquisition, construction or production of qualifying
asset form part of the cost of that asset. Other borrowing costs are recognized as an expense as per BAS 23 ‘Borrowing Costs’.
2.29 Consistency
In accordance with the BFRS framework for the presentation of financial statements together with BAS 1 and BAS 8, LankaBangla
Finance applies the accounting disclosure principles consistently from one period to the next. In case of selecting and applying new
accounting policies, changes in accounting policies applied and correction of errors, the amounts involved are accounted for and
disclosed retrospectively in accordance with the requirement of BAS-8.
2.30 Liquidity statement
The Liquidity Statement has been prepared in accordance with remaining maturity grouping of assets and liabilities as of the close
of the period as per following bases:
a) Balance with other banks and financial institutions, money at call and short notice etc. are on the basis of their term.
b) Investments are on the basis of their residual maturity term.
c) Loans and advances are on the basis of their repayment or maturity schedule.
d) Fixed assets are on the basis of their useful lives.
e) Other assets are on the basis of their adjustment.
f) Borrowings from other banks and financial institutions as per their maturity or repayment term.
g) Deposits and other accounts are on the basis of their maturity period and behavioral past trend
h) Other long term liability on the basis of their maturity term.
i) Provisions and other liabilities are on the basis of their settlement.
2.31 Books of account
The Company maintains its books of account for main business in Electronic Form through soft automation.
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2.32 Foreign currency transaction

Foreign currency transactions are translated into Bangladeshi Taka at exchange rates prevailing at the respective dates of
transactions, while foreign currency monetary assets at the end of the period or year are reported at the rates prevailing on the
Balance Sheet date. Exchange gains or losses arising out of the said conversions are recognized as income or expense for the period
or year are charged in the profit and loss account after netting off.
2.33 Revenue recognition
As per BAS 18, “Revenue” is recognized when it is probable that the economic benefits associated with the transaction will flow
to the Company and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be measured
reliably.
2.33.1 Income from lease finance
The Company follows the finance lease method for accounting of lease incomes in compliance with BAS 17. Interests are recognized
as and when interest or incomes are accrued. Lease interests outstanding over 3 months are not recognized as revenue, and used
to keep under interest suspense account.
Fee based income charges from lease operations are accounted for on cash basis.
2.33.2 Interest income from term finance
Interest income is recognized when interest is accrued. No interest on loan (except mortgage loan) is accounted for as revenue
where any portion of capital or interest is in arrears for more than 3 months for the loan tenure of which is within 5 years or in
arrears for more than 6 months for the loan tenure of which is more than 5 years. In case of mortgage loan, no interest on loan
is accounted for as revenue where any portion of capital or interest is in arrears for more than 9 months. Moreover, the amounts
that were previously recognized as revenue in respect of such outstanding loans are also transferred from lease income to interest
suspense account.
Fees based income and delinquent charges from loan operations are accounted when they arise.
2.33.3 Interest income from credit cards
Interest on credit card is accrued and taken to accounts up to 03 (three) months. Interest accrued on credit card for more than
three months is accounted as Interest-in-Suspense and is not added to revenues. Thereafter, interest is recognized on cash basis
reversing the suspense account. Fee based income from credit card operations are accounted for on accrual basis
2.33.4 Interest income from fixed deposit receipts
Interest on fixed deposit receipts is recognized on accrual basis.
2.33.5 Investment income
Interest income from investments in commercial paper is recognized on accrual basis as per para 30 (a) of BAS 18 ‘Revenue’.
Capital gain/ (loss) on investments in shares is recognized when it is realized.
Dividend income on shares is recognized during the year in which it is established the right to receive the payment as per para 30
(c) of BAS 18 ‘Revenue’.
2.33.6 Portfolio management fee
Portfolio management fee are recognized on the market value of the client’s portfolio on daily basis at the applicable rate.
2.33.7 Issue Management and Corporate Advisory Fee
Issue management fee and corporate advisory fees are recognized according to the stage of completion of services as agreed and
defined in Issue Management and Corporate Advisory agreement between company and clients.
2.33.8 Fees and commission based income
Fees and commission based income arising on services provided by the company are recognized on a cash basis. Commission
charged to customers on is credited to income at the time of effecting the transactions.
2.33.9 Other income
Fee based incomes other than above are recognized as income at the stage of completion of transaction when the amount of
revenue can be measured reliably and economic benefits associated with the transaction flows to the company.
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2.34 Write off

Write-off describes a reduction in recognized value. It refers to recognition of the reduced or zero value of an asset. Generally
it refers to an investment for which a return on the investment is now impossible or unlikely. The item's potential return is thus
cancelled and removed from ("written off") the business's balance sheet.
Recovery against debts written off or provided for is credited to revenue. Income is recognized where amounts are either recovered
and/or adjusted against securities, properties or advances.
2.35 Operating expenses
Major component of operating expenses other than salary and allowances are office rent, printing and stationery, postage and
stamp, telecommunication, legal and professional fees and other miscellaneous expenses. All expenses are recognized on accrual
basis of accounting.
2.35.1 Salary and allowances
Salary and allowances comprise basic salary, house rent, medical allowance, conveyance allowance, festival bonus, leave fare
assistance etc. All expenses related to salary and allowances are recognized on accrual basis of accounting.
2.36 Employees benefit plans
LankaBangla Finance Limited offers a number of benefit plans which includes contributory provident fund, gratuity plan, Profit
participation scheme and Group Life Insurance Scheme and Health Insurance. The retirement benefits accrued for the employees
of the Company 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 are outlined below:
2.36.1 Provident fund
The Company maintains a contributory employees Provident Fund recognized by National Board of Revenue within the meaning of
section 2(52), read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984 for its permanent employees.
The Fund is administered by a Board of Trustees and is funded equally by the employer and the employees @ 10% of their basic
salary as contribution of the fund. Provident Funds are invested in Fixed Deposit with other financial institutions and to the
Government Treasury Bills and Bonds. Interest earned from the investments is credited to the members' account on yearly basis.
2.35.2 Gratuity fund
The Company operates an unfunded gratuity scheme. Employees are entitled to gratuity benefit at the following rates:
Year of Services % of entitlement
3 years and above but less than 4 years 50% of Last Basic Salary
5 years and above 150% of Last Basic Salary
The actuarial valuation has not yet been made to assess the adequacy of the liabilities provided for the scheme.
2.36.3 Profit participation scheme
Every confirmed employee will be entitled to participate in the profit participation scheme (on a pro-rata basis in case of new
joiners) based on the performance.
2.36.4 Group life insurance scheme and health insurance
The Company has a group life insurance scheme for all of its permanent employees. It has also a health insurance scheme for all of
its permanent employees including their spouse and children.
2.36.5 Employees home loan scheme
The Company also has real estate loan for its permanent employees at 7% simple interest rate. Employees are entitled for real
estate loan after satisfying of minimum loan eligible criteria.
2.37 Corporate tax
a. Current tax
Provision for current income tax has been made as prescribed in Finance Act 2016 on the profit made by the Company considering
major taxable allowances and disallowances and the same is understated or overstated to that extent. Any shortfall or excess
provision will be duly adjusted after final assessment.
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b. Deferred tax
Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets are the amount of income taxes recoverable in future periods in respect of deductible temporary differences.
Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences arising between the carrying
values of assets, liabilities, income and expenditure and their respective tax bases. Deferred tax assets and liabilities are measured
using tax rates and tax laws that have been enacted or substantially enacted at the statement of financial position date. The impact
on the accounts of changes in the deferred tax assets and liabilities has also been recognized in the profit and loss account as per
BAS-12 "Income Taxes".
2.38 Legal proceedings
The Company is not currently a defendant or a plaintiff in any material lawsuits or arbitration. From time to time, however, the
Company is involved as a plaintiff in some actions taken against the default clients in the ordinary course of business for non-
payment of rentals/installments. We believe that the ultimate dispositions of those matters will be favorable and will have no
material adverse effect on business, financial conditions or results of operations.
2.39 Earnings per Share (EPS)
The company calculates EPS in accordance with the requirement of BAS – 33: “Earnings Per Share”, which has been shown on the
face of the Statement of Comprehensive Income and the computation is shown in Note - 34.
Basic earnings
This represents earnings for the period ended on 31 December 2017 attributable to the ordinary shareholders.
Weighted average number of ordinary shares outstanding during the year
This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued
(as bonus share) during the year multiplied by a time weighting factor. The time-weighting factor is the numbers of days the
specific shares are outstanding as a proportionate of the number of days in the year.
Basic earnings per share
This has been calculated by dividing the basic earning by the weighted average number of ordinary shares outstanding for the year.
Diluted earnings per share
Diluted EPS is calculated if there is any commitment for issuance of equity shares in foreseeable future, i.e., potential shares,
without inflow of resources to the Company against such issue. This is in compliance with the requirement of BAS – 33” Earnings
Per Share”.
2.40 Credit rating
Credit Rating Agency of Bangladesh Ltd. (CRAB) has rated the Company on 13 July 2017 with “AA3” (Pronounced as AA Three) in
the long term and ST-2 for the Short Term based on audited financial of FY2016 and other available information up to the date of
rating declaration. The outlook on the rating is Stable.
The rating reflects the strengths of the Company which is backed by a strong team of management, growth in the non-interest
income, deposits and investments, adequate capital coverage with high Tier-1 capital, improved asset quality and well controlled
liquidity position.
2.41 Impairment of assets
The company has assessed 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 exists, or when an annual impairment testing for an asset is required, the Company makes an estimate of the assets
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 impaired and is written down to its recoverable amount by debiting to statement of
comprehensive account. Fixed assets are reviewed for impairment whenever events or charges in circumstances indicate that
the carrying amount of an asset may be impaired. This is in compliance with the requirement of BAS – 36 “Impairment of Assets”.
2.42 Statutory reserve
The Financial Institutions Act 1993 requires the Company to transfer 20% of its current year's profit after tax to reserve until such
reserve equals to its paid up capital.
2.43 Events after the Reporting Period
Where necessary, all the material events after the reporting period have been considered and appropriate adjustments / disclosures
have been made in the financial statements.
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The proposed dividend for the year 2018 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 Company’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.
2.44 Corporate governance
The company recognizes the importance of high standards of corporate governance and corporate social responsibility. Through
regular Board Meeting and documented procedures of independence, the company endeavors to meet the standards expected.
The company has taken note of the recently prescribed measures by the Bangladesh Securities and Exchange Commission in this
regard and intends to introduce the concept of independent Director at the earliest possible opportunity. An Audit Committee is
already in place. The Company also prohibits provision of non-audit services by the external auditors. The Audit committee keeps
under review the independence and objectivity of the external auditors.
The Board is also committed to effective communication between the company and its subsidiaries, investors, regulators and third
party interests.
2.45 BASEL II and its implementation
To cope with the international best practices and to make the capital more risks sensitive as well as more shock resilient, guidelines
on ‘Basel Accord for Financial Institutions (BAFI)’ have been introduced from January 01, 2011 on test basis by the Bangladesh
Bank. At the end of test run period, Basel Accord regime will be started and the guidelines on BAFI has come fully into force
from January 01, 2012 with its subsequent supplements/revisions. Instructions regarding Minimum Capital Requirement (MCR),
Adequate Capital, and Disclosure requirement as stated in these guidelines have to be followed by all financial institutions for the
purpose of statutory compliance.
In line with Bangladesh Bank requirement, the Company has already formed BASEL Implementation Unit (BIU) to ensure timely
implementation of BASEL II accord.
2.46 Financial risk management
The Group has exposure to the following risks from financial instruments:
• Credit risk
• Liquidity risk
• Market risks
• Operational risks
The chart below provides a link between the Group’s business units and the principal risks that they are exposed to. The significance
of risk is assessed within the context of the Group as a whole and is measured based on allocation of the regulatory capital within
the Group.
LankaBangla
Group Treasury & Liability Liquidity risk High
Management Market risk Medium
Credit risk Low
Corporate, Retail Brokerage Business Asset Investment

& SME Financial Management Banking
Market risk High Market risk High Operational risk Medium Credit risk High
Credit risk High Credit risk High Market risk High Market risk High
Operational risk Medium Operational risk Medium Operational risk Medium
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Board of Directors has established the Asset Liability Management committee (ALCO) and Risk Management
Forum by following the relevant directives and guidelines of Bangladesh Bank, which are responsible for developing and monitoring
Group risk management policies.
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The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards
andprocedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group
Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk
management controls and procedures, the results of which are reported to the Group Audit Committee.
A. Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s loans and advances to customers and other banks.
For risk management reporting purposes, the Group considers and consolidates all elements of credit risk exposure (such as
individual obligor default risk and sector risk).
The Board of Directors has delegated responsibility for the oversight of credit risk to its Group Credit Committee. A separate
Group Credit Risk Management department, reporting to the Managing Director and Executive Committee, is responsible for
management of the Group’s credit risk, including:
Formulating credit policies in consultation with business units, covering collateral requirements, credit assessment, risk grading
and reporting, documentary and legal procedures, and compliance with regulatory and statutory requirements.
Establishing the authorization structure for the approval and renewal of credit facilities. Authorization limits are allocated to
business unit Credit Officers. Larger facilities require approval by Group Credit, Head of Group Credit, Group Credit Committee or
the Board of Directors as appropriate.
Credit Risk Management assesses all credit exposures in excess of designated limits, prior to facilities being committed to customers
by the business unit concerned. Renewals and reviews of facilities are subject to the same review process.
Limiting concentrations of exposure to counterparties, geographies and industries (for loans and advances, financial guarantees
and similar exposures), and by issuer, credit rating band, market liquidity and country (for investment securities).
Providing advice, guidance and specialist skills to business units to promote best practice throughout the Group in the management
of credit risk.
Each business unit is required to implement Group credit policies and procedures, with credit approval authorities delegated from
the Group Credit Committee.
Regular audits of business units and Group Credit processes are undertaken by Internal Audit.
The Group writes off a loan or an investment debt security balance, and any related allowances for impairment losses, when
Group Credit determines that the loan or security is uncollectible. This determination is made after considering information such
as the occurrence of significant changes in the borrower’s / issuer’s financial position such that the borrower / issuer can no longer
pay the obligation, or that proceeds from collateral will not be sufficient to pay back the entire exposure. For smaller balance
standardized loans, write-off decisions generally are based on a product-specific past due status.
B. Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset.
The Group’s Board of Directors sets the Group’s strategy for managing liquidity risk and delegates the responsibility for the
oversight of the implementation of this policy to ALCO. ALCO approves the Group’s liquidity policies and procedures. Treasury
division manages the Group’s liquidity position on a day-to day basis and reviews daily reports covering the liquidity position of the
Group. A summary report, including any exceptions and remedial action taken, is submitted regularly to ALCO.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Group’s reputation. The key elements of the Group’s liquidity strategy are as follows:
• Maintaining a diversified funding base consisting of customer deposits (both retail and corporate), zero coupon bond and
different types of bank borrowing ranging from very short nature call loan to short term loan to long term loan and maintaining
contingency facilities;
• Carrying a portfolio of highly liquid assets, diversified by currency and maturity;
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• Monitoring liquidity ratios, maturity mismatches, behavioral characteristics of the Group’s financial assets and liabilities, and
the extent to which the Group’s assets are encumbered and so not available as potential collateral for obtaining funding;
• Carrying out stress testing of the Group’s liquidity position. Treasury division receives information from other business units
regarding the liquidity profile of their financial assets and liabilities and details of other projected cash flows arising from
projected future business. Treasury then maintains a portfolio of short-term liquid assets, largely made up of short-term
liquid investment securities, loans and advances to banks and other inter-bank facilities, to ensure that sufficient liquidity is
maintained within the Group as a whole.
C. Market Risk
Market risk is the risk that changes in market prices, such as interest rates, share prices and credit spreads will affect the Group’s
income or the value of its holdings of financial instruments. The objective of the Group’s market risk management is to manage and
control market risk exposures within acceptable parameters in order to ensure the Group’s solvency while optimizing the return
on risk.
Overall authority for market risk is vested in ALCO. ALCO sets up limits for each type of risk in aggregate and for portfolios, with
market liquidity being a primary factor in determining the level of limits set for trading portfolios.
D. Operational risks
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s processes,
personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks, such as those
arising from legal and regulatory requirements and generally accepted standards of corporate behavior. Operational risks arise
from all of the Group’s operations.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Group’s
reputation with overall cost effectiveness and innovation. In all cases, the Group policy requires compliance with all applicable
legal and regulatory requirements.
The Board of Directors has delegated responsibility for operational risk to Management Committee which is responsible for the
development and implementation of controls to address operational risk. This responsibility is supported by the development of
overall Group standards for the management of operational risk in the following areas:
• requirements for appropriate segregation of duties, including the independent authorization of transactions;
• requirements for the reconciliation and monitoring of transactions;
• compliance with regulatory and other legal requirements;
• documentation of controls and procedures;
• requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address
the risks identified;
• requirements for the reporting of operational losses and proposed remedial action;
• development of contingency plans;
• training and professional development;
• ethical and business standards; and
• risk mitigation, including insurance where this is effective.
Compliance with Group standards is supported by a program of periodic reviews undertaken by Internal Audit. The results of
Internal Audit reviews are discussed with the Management Committee with summaries submitted to the Audit Committee and
senior management of the Group.
2.47 Segments
After incorporated the company started with lease and loan as its core financing business. By times, it diversified its business among
Asset Management Operations, Merchant banking business and brokerage business. The company has decided it various operating
segment considering nature of segmental business. Thus four operating segments of the Group are reported and presented.
Profit and loss account of above operations and other operation have been prepared in accordance with Bangladesh Accounting
Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), and results of its operation have been combined, item by
item, with the financial results of the Company. Information about operating segment has been presented in Note-35.
2.48 Comparative figures
Comparative information has been disclosed in respect of the period ended 31 December 2017 for all numerical data in the
financial statements and also the narrative and descriptive information when it is relevant for better understanding of the current
year’s financial statements. Figures of the year 2016 have been restated and rearranged whenever considered necessary to ensure
comparability with the current period.
2.49 Date of authorization
The Board of Directors has authorized these financial statements for public issue on 13 February 2018.
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2.50 Compliance of Bangladesh Financial Reporting Standards (BFRS)
Sl # Name of BAS/BFRS Status

01 BAS 1: Presentation of Financial Statements Partially Complied
02 BAS 2: Inventories Not Applicable
03 BAS 7: Statements of Cash Flows Partially Complied
04 BAS 8: Accounting Policies, Changes in Accounting Estimates and Errors Complied
05 BAS 10: Events after the Reporting Period Complied
06 BAS 11: Construction Contracts Not Applicable
07 BAS 12: Income Taxes Partially Complied
08 BAS 16: Property, Plant and Equipments Complied
09 BAS 17: Leases Complied
10 BAS 18: Revenue Complied
11 BAS 19: Employee Benefits Complied
12 BAS 20: Accounting for Govt. Grants and disclosures of Govt. Assistances Not Applicable
13 BAS 21: The Effects of Changes in Foreign Exchange Rates Complied
14 BAS 23: Borrowing Costs Complied
15 BAS 24: Related Party Disclosures Complied
16 BAS 26: Accounting and Reporting by Retirement Benefit Plan Not Applicable
17 BAS 27: Separate Financial Statements Complied
18 BAS 28: Investments in Associates Not Applicable
19 BAS 29: Financial Reporting in Hyperinflationary Economics Not Applicable
20 BAS 32: Financial Instruments: Presentation Partially Complied
21 BAS 33: Earnings Per Share Complied
22 BAS 34: Interim Financial Reporting Complied
23 BAS 36: Impairment of Assets Complied
24 BAS 37: Provisions, Contingent Liabilities and Contingent Assets Complied
25 BAS 38: Intangible Assets Complied
26 BAS 39: Financial Instrument: Recognition and Measurement Partially Complied
27 BAS 40: Investment Property Not Applicable
28 BAS 41: Agriculture Not Applicable
29 BFRS 1: First-time adoption of International financial Reporting Standards Not Applicable
30 BFRS 2: Share-based Payment Not Applicable
31 BFRS 3: Business Combinations Not Applicable
32 BFRS 4: Insurance Contracts Not Applicable
33 BFRS 5: Non-current Assets Held for Sale and Discontinued Operations Not Applicable
34 BFRS 6: Exploration for and Evaluation of Mineral Resources Not Applicable
35 BFRS 7: Financial Instruments: Disclosures Partially Complied
36 BFRS 8: Operating Segments Complied
37 BFRS 10: Consolidated Financial Statements Complied
38 BFRS 11: Joint Arrangements Not Applicable
39 BFRS 12: Disclosure of Interests in Other Entities Complied
40 BFRS 13: Fair Value Measurement Complied
41 BFRS 14: Regulatory Deferral Accounts Not Applicable
42 BFRS 15: Revenue from Contracts with Customers Not Applicable
Partially Complied standards are those requirements of which are different from those of Bangladesh Bank. Note – 2.5 contains details about such departure
from BFRS requirements to comply with Bangladesh Bank.
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31.12.2017 31.12.2016 31.12.2017 31.12.2016
Taka Taka Taka Taka
3 Cash in hand
See accounting policy in note (2.15)
Local currency 476,721 786,380 319,207 309,720
Foreign currency - - - -
476,721 786,380 319,207 309,720
Cash in hand represents the amount under impress system of petty cash to meet daily petty cash expenses requirement both for
head office and branch offices.
4 Balance with Bangladesh Bank and its agent banks
Local currency 1,154,753,702 699,564,861 1,154,753,702 699,564,861
Foreign currency - - - -
1,154,753,702 699,564,861 1,154,753,702 699,564,861
Balance with Bangladesh Bank has been maintained as Cash Reserve Requirement (CRR) of Bangladesh Bank through non-interest
bearing current account.
4.1 Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR)
Cash Reserve Requirement and Statutory Liquidity Reserve have been calculated and maintained in accordance with Financial
Institution Act, 1993 and Financial Institution Regulations 1994 and FID Circular No. 06 dated 06 November , 2003 and FID Circular No.
02 dated 10 November, 2004.
Cash Reserve Requirement (CRR) has been calculated at the rate of 2.5% on ‘Total Term Deposits’ Term or Fixed Deposit, Security
Deposit against Lease/Loan and other Term Deposits, received from individuals and institutions (except banks and financial institutions).
Statutory Liquidity Reserve (SLR) has been calculated at the rate of 5.0% on total liabilities, including CRR of 2.5% on Total Term
Deposit. SLR is maintained in liquid assets in the form of cash in hand (notes and coin in BDT), balance with Bangladesh Bank and other
banks and financial institutions, investment at call, unencumbered treasury bill, prize bond, savings certificate and any other assets
approved by Bangladesh Bank.
Cash reserve requirement (CRR) 2.50%
The Company requires to maintain cash with Bangladesh Bank current account equivalent to 2.50% of Term Deposits other than
deposit taken from banks and financial institutions.
Required reserve (2.50%) 841,150,408 704,477,490 841,150,408 704,477,490
Actual reserve held (2017: 2.92%, 2016: 2.52%) 984,131,658 708,967,039 984,131,658 708,967,039
Surplus/(deficit) (2017: 0.42%, 2016: 0.02%) 142,981,250 4,489,549 142,981,250 4,489,549
Statutory liquidity requirements (SLR) 5.00%

The Company requires to maintain SLR equivalent to 5% of total liability including 2.50% of CRR and excluding loans and deposits taken
from banks and financial institutions.
Total required reserve (5%) 1,794,842,716 1,481,167,221 1,794,842,716 1,481,167,221
Actual reserve held (2017: 5.10%, 2016: 5.08%) 1,829,837,682 1,505,869,487 1,829,837,682 1,505,869,487
Total surplus/(deficit) (2017: 0.10%, 2016: 0.08%) 34,994,967 24,702,267 34,994,967 24,702,267
5 Balance with other banks and financial institutions

Inside of Bangladesh
Local Currency
Non interest bearing current account (Note - 5.1) 88,667,007 28,945,635 88,667,007 28,945,635
Interest bearing short term deposit account (Note - 5.2) 2,439,419,780 2,127,724,715 473,673,193 54,794,691
Fixed deposit account (Note - 5.3) 6,346,767,912 2,186,444,399 6,305,188,806 2,146,152,952
8,874,854,698 4,343,114,749 6,867,529,006 2,229,893,278
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LankaBangla Group LankaBangla FinanceLimited

31.12.2017 31.12.2016 31.12.2017 31.12.2016
Taka Taka Taka Taka
Foreign Currency
Dhaka Bank Ltd.-USD A/C (Exchange Rate Tk. 82.7000) 90,176 85,814 90,176 85,814
Dhaka Bank Ltd.-POUND A/C (Exchange Rate Tk. 111.7442) 29,700 25,804 29,700 25,804
Dhaka Bank Ltd.-EURO A/C (Exchange Rate Tk. 99.2069) 7,458 6,220 7,458 6,220
127,335 117,839 127,335 117,839
8,874,982,033 4,343,232,588 6,867,656,341 2,230,011,116

Outside of Bangladesh - - - -
8,874,982,033 4,343,232,588 6,867,656,341 2,230,011,116
5.1 Non interest bearing current account
Bank Asia Limited 1,000 655 1,000 655
BRAC Bank Limited 1,205,947 263,972 1,205,947 263,972
Dhaka Bank Limited 39,387 6,605 39,387 6,605
Dutch Bangla Bank Limited 1,475 2,060 1,475 2,060
Eastern Bank Limited 357,883 120,281 357,883 120,281
Jamuna Bank Limited - 295 - 295
Mercantile Bank Limited 5,665,572 10,963,087 5,665,572 10,963,087
Mutual Trust Bank Limited 1,650 1,800 1,650 1,800
ONE Bank Limited 15,387,359 3,451,773 15,387,359 3,451,773
Prime Bank Limited 471 1,249 471 1,249
Standard Chartered Bank 64,976,553 8,594,968 64,976,553 8,594,968
Trust Bank Limited 1,029,710 5,538,889 1,029,710 5,538,889
88,667,007 28,945,635 88,667,007 28,945,635
5.2 Interest bearing short term deposit account
AB Bank Limited 3,841,632 452,098 3,841,632 452,098
Bangladesh Development Bank Limited 28,463 51,868 - 2,405
Bank Asia Limited 18,181,526 2,480,164 18,181,526 2,480,164
BASIC Bank Limited 4,270 - 4,270 -
Commercial Bank of Ceylon PLC 45,480,214 37,689,297 - -
Dhaka Bank Limited 3,719,865 16,454,019 795,156 3,914,159
Dutch Bangla Bank Limited 15,934 1,912,151 15,934 1,912,151
Eastern Bank Limited 303,934 - 303,934 -
Exim Bank Limited 82,595 - 82,595 -
Islami Bank Bangladesh Ltd 1,131 - - -
Jamuna Bank Limited 55 8,229 55 8,229
Meghna Bank Limited 3,757 5,252 - -
Midland Bank Limited 169,540 1,419 - -
Mutual Trust Bank Limited 461,350 678,657 461,350 678,657
NRB Bank Limited 11,944,787 - 11,944,787 -
National Credit and Commerce Bank Limited 1,726,523 24,976 - -
ONE Bank Limited 1,837,414,989 1,991,054,418 163,283,029 2,653,354
Prime Bank Limited 471,227 239,217 471,227 239,217
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Taka Taka Taka Taka
Shahjalal Islami Bank Limited 1,172,300 314,510 - -

Sonali Bank Limited 277,646 - - -
South Bangla Agriculture and Commercial Bank Limited 52,305 383,542 - -
Standard Bank Limited 126,475 229,094 - -
The City Bank Limited 4,207,680 1,107,010 4,127,935 1,026,575
The Premier Bank Limited 4,618,766 3,897,455 4,618,766 3,897,455
United Commercial Bank Limited 695,431 82,911 695,431 82,911
Uttara Bank Limited 5,000 - - -
Woori Bank 67,218 - 67,218 -
2,439,419,780 2,127,724,715 473,673,193 54,794,691
5.3 Fixed deposit receipt account
AB Bank Limited 600,000,000 - 600,000,000 -
Brac Bank Limited 200,000,000 - 200,000,000 -
Commercial Bank of Ceylon PLC - 62,969,129 - 62,969,129
Exim Bank Limited 350,000,000 100,000,000 350,000,000 100,000,000
Islamic Finance and Investment Limited 200,000,000 - 200,000,000 -
Jamuna Bank Limited 600,000,000 149,970,000 600,000,000 149,970,000
Meghna Bank Limited 500,000,000 - 500,000,000 -
Meridian Finance and Investment Limited 200,000,000 - 200,000,000 -
Midas Finance Limited 100,000,000 250,000,000 100,000,000 250,000,000
Midland Bank Limited - 50,000,000 - 50,000,000
National Bank Limited 800,000,000 - 800,000,000 -
One Bank Limited 201,107,669 1,057,089 200,000,000 -
Phoenix Finance & Investments Limited. 100,000,000 - 100,000,000 -
Shahjalal Islami Bank Limited - 200,000,000 - 200,000,000
Social Islami Bank Limited 800,000,000 450,000,000 800,000,000 450,000,000
South Bangla Agriculture and Commerce Bank Limited 400,000,000 299,970,000 400,000,000 299,970,000
Standard Bank Limited 700,000,000 250,000,000 700,000,000 250,000,000
Standard Chartered Bank 40,471,436 39,234,358 - -
The Premier Bank Limited 35,188,806 33,243,823 35,188,806 33,243,823
Union Bank Limited 170,000,000 300,000,000 170,000,000 300,000,000
Union Capital Limited 350,000,000 - 350,000,000 -
6,346,767,912 2,186,444,399 6,305,188,806 2,146,152,952
Disclosures in compliance to the FID Circular # 6, dated 06 November 2003 of the Bangladesh Bank consist of the following:
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5.4 Maturity grouping of balance with other banks and financial institutions
Up to 1 month 5,998,214,122 999,063,474 3,982,467,535 999,063,474
Over 1 month but not more than 3 months 1,550,000,000 3,207,724,715 1,550,000,000 1,130,179,379
Over 3 months but not more than 6 months 1,326,767,911 136,444,399 1,335,188,806 100,768,264
Over 6 months but not more than 1 year - - - -
Over 1 year but not more than 5 years - - - -
Over 5 years - - - -
8,874,982,033 4,343,232,588 6,867,656,341 2,230,011,116
6 Investment
Government securities - - - -
Treasury bills - - - -
Treasury Bonds - - - -
Other investments 5,469,169,711 5,036,650,257 2,127,660,042 2,130,061,460

Non marketable ordinary shares (Note - 6.1) 211,347,010 145,175,450 73,569,450 73,569,450
Marketable ordinary shares (Note - 6.2) 4,807,822,701 4,191,474,807 1,604,090,592 1,356,492,010
Investment in Commercial Paper 450,000,000 700,000,000 450,000,000 700,000,000
5,469,169,711 5,036,650,257 2,127,660,042 2,130,061,460
Investment is Designated as follows:
Held for Trading 1,838,422,593 1,380,621,153 325,471,423 191,252,901
Held to Maturity 3,630,747,118 3,656,029,105 1,802,188,618 1,938,808,558
5,469,169,711 5,036,650,257 2,127,660,042 2,130,061,460
6.1 Non marketable ordinary shares
Al-Arafah Shariah Unit Fund 60,000,000 - - -
Aman Cotton Fibrous Limited 1,255,400 - - -
BD Venture Limited 20,000,000 20,000,000 20,000,000 20,000,000
Bashundhara Paper Mills Ltd. 6,916,160 - - -
Bengal Meat Processing Industries Limited 50,000,000 - - -
CAPM Unit Fund 2,000,000 2,000,000 2,000,000 2,000,000
Central Depositary (Bangladesh) Limited 1,569,450 1,569,450 1,569,450 1,569,450
Chittagong Stock Exchange Limited* 5,000,000 5,000,000 - -
Dhaka Stock Exchange Limited* 11,606,000 11,606,000 - -
Financial Excellence Limited 3,000,000 3,000,000 - -
LankaBangla 1st Balanced Unit Fund 50,000,000 102,000,000 50,000,000 50,000,000
211,347,010 145,175,450 73,569,450 73,569,450
*LankaBangla Securities Limited has received the following shares from DSE and CSE against the membership under
demutualization scheme of the stock exchanges
Number of Face Value
Stock Exchange Type of Shares Face Value
Shares amount
Dhaka Stock Exchange Floated (40%) 2,886,042 10 28,860,420
Blocked (60%) 4,329,064 10 43,290,640
7,215,106 72,151,060
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Chittagong Stock Exchange Floated (40%) 1,714,932 10 17,149,320

Blocked (60%) 2,572,398 10 25,723,980
4,287,330 42,873,300
Valuation of membership has been shown at cost in the accounts.

6.2 Marketable ordinary shares
Bank 1,323,183,684 809,129,774 805,192,437 550,133,484
Cement 40,587,091 58,583,784 - -
Ceramics 7,276,255 8,380,136 7,276,255 7,276,255
Engineering 85,125,590 142,611,712 36,283,688 21,044,022
Food and Allied 29,479,416 31,112,147 - 21,941,045
Fuel and Power 512,590,560 416,670,388 14,810,870 9,875,272
Insurance 593,838,699 483,243,887 144,481,779 121,793,929
IT Sector 61,431,967 65,185,399 4,180,602 6,586,026
Miscellaneous 24,047,959 211,633 - -
Mutual Funds 134,974,872 181,378,635 74,200,945 85,756,500
Non-Bank Financial Institutions 816,958,153 727,197,726 217,436,920 165,290,369
Pharmaceuticals and Chemicals 594,412,647 646,109,542 116,369,568 212,026,585
Services & Real Estate 5,349,564 - - -
Tannery Industries 100,002,589 139,181,617 49,907,721 22,369,720
Telecommunication 3,639,075 30,206,785 - -
Textile 474,924,578 452,271,641 133,949,806 132,398,803
4,807,822,701 4,191,474,807 1,604,090,592 1,356,492,010
All investments in marketable ordinary shares are valued at average cost price as on reporting date and adequate provision has
been made as per Bangladesh Bank Guidline.*
Investments in non-marketable ordinary shares are valued at cost due to fair value cannot be measured reliably.
*As at 31 December 2017 there was Tk. 164,259,219.50 (Gross unrealized gain was Tk. 221,153,336.58 and gross unrealised
loss was Tk. 56,894,117.08) net unrealized gain of LankaBangla Finance Limited and there was 759,322,687.32 (Gross unrealized
gain was Tk. 1,078,193,224.22 and gross unrealised loss was Tk. 318,870,536.90) net unrealized gain of LankaBangla Group on
investment in marketable ordinary shares which is not charged in profit and loss account in compliance with the DFIM circular
No. 11 dated; 19 September, 2011 and DFIM Circular No.02 , dated; January 31, 2012 issued by Bangladesh Bank.
6.3 Strategic classification of investment in shares
Non-strategic investment in shares 1,838,422,593 1,380,621,153 325,471,423 191,252,901
Strategic investment in shares 2,969,400,108 2,810,853,655 1,278,619,168 1,165,239,108
4,807,822,701 4,191,474,807 1,604,090,592 1,356,492,010
6.4 Maturity wise grouping of investments
Up to 01 Month 130,475,248 842,733,314 50,758,522 624,246,899
More than 01 Month to 03 Months 236,009,826 320,704,343 91,814,426 28,482,661
More than 03 Month to 01 Years 1,190,371,855 756,666,269 463,087,958 360,317,271
More than 01 Year to 05 Years 753,777,620 1,269,588,241 293,240,585 311,773,608
More than 05 Years 3,158,535,162 1,846,958,090 1,228,758,552 805,241,021
5,469,169,711 5,036,650,257 2,127,660,042 2,130,061,460
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7 Leases, loans and advances

Loans, cash credit and overdraft etc. (Note - 7.1) 66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
Bills discounted and purchased - - - -
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
7.1 Loans, cash credit and overdraft etc.
See accounting policy in note (2.17),(2.18) and (2.19)
Corporate finance
Lease finance 3,382,638,157 2,665,476,658 3,382,638,157 2,665,476,658
Secured Overdraft 6,085,285 69,181,435 6,085,285 69,181,435
Short term finance 4,419,891,075 6,721,743,056 4,419,891,075 6,721,743,056
Short term loan to subsidiaries (Note - 7.1.1) - - 2,598,171,054 2,766,873,714
Term loan 8,054,756,449 11,140,969,605 8,054,756,449 11,140,969,605
Term loan syndication finance 449,615,282 513,713,742 449,615,282 513,713,742
Work order finance 3,454,296 39,633,510 3,454,296 39,633,510
16,316,440,544 21,150,718,006 18,914,611,598 23,917,591,720
Retail finance
Auto loan (Note - 7.1.2) 6,164,325,270 4,110,062,974 6,128,136,112 4,080,064,608
Credit card receivables (Note - 7.1.3) 2,878,358,344 2,050,046,922 2,878,358,344 2,050,046,922
Home loan (Note - 7.1.4) 12,249,994,362 6,393,409,195 12,249,994,362 6,393,409,195
Personal loan (Note - 7.1.5) 5,802,188,398 3,413,086,327 5,793,776,914 3,402,987,543
27,094,866,374 15,966,605,419 27,050,265,732 15,926,508,268
SME finance
Term loan 8,626,401,633 4,273,609,056 8,626,401,633 4,273,609,056
Lease finance 1,504,813,529 383,432,083 1,504,813,529 383,432,083
Auto loan 2,192,624,134 946,813,033 2,192,624,134 946,813,033
Emerging and commercial 1,939,520,603 1,153,867,627 1,939,520,603 1,153,867,627
Home Loan 789,737,623 124,036,997 789,737,623 124,036,997
Real state developer finance 34,334,968 - 34,334,968 -
Secured Overdraft 29,634,345 479,301 29,634,345 479,301
Short term loan 706,176,417 5,196,873 706,176,417 5,196,873
Syndication finance 107,802,607 - 107,802,607 -
Work order finance 17,664,300 17,664,300 17,664,300 17,664,300
15,948,710,159 6,905,099,269 15,948,710,159 6,905,099,269
Others
Debit balance of share trading clients 1,915,459,377 4,748,064,585 - -
Margin loan to share trading clients 5,268,880,993 2,473,812,503 - -
7,184,340,370 7,221,877,089 - -
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
Place of disbursement
In Bangladesh 66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
Outside of Bangladesh - - - -
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
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7.1.1 Short term finance-subsidiaries
LankaBangla Investments Limited - - 2,390,752,778 2,525,206,559
LankaBangla Securities Limited - - 207,418,276 241,667,154
- - 2,598,171,054 2,766,873,714
7.1.2 Auto Loan
Commercial loan 6,050,506,949 4,030,474,829 6,050,506,949 4,030,474,829
Staff loan 113,818,321 79,588,145 77,629,163 49,589,779
6,164,325,270 4,110,062,974 6,128,136,112 4,080,064,608
7.1.3 Credit card receivables
Master card 1,784,931,047 1,294,155,294 1,784,931,047 1,294,155,294
VISA card 845,968,975 621,443,146 845,968,975 621,443,146
Master card ezypay settlement account 173,845,100 95,222,640 173,845,100 95,222,640
VISA card ezypay settlement account 73,613,222 39,225,843 73,613,222 39,225,843
2,878,358,344 2,050,046,922 2,878,358,344 2,050,046,922
7.1.4 Home loan
Bangladesh Bank refinance loan 485,525,640 546,894,455 485,525,640 546,894,455
Commercial loan 11,528,831,861 5,636,037,368 11,528,831,861 5,636,037,368
Staff loan 235,636,860 210,441,372 235,636,860 210,441,372
12,249,994,362 6,393,409,195 12,249,994,362 6,393,409,195
7.1.5 Personal Loan
Loan against deposit 364,318,158 177,886,763 364,318,158 177,886,763
Term loan 5,341,719,927 3,135,420,137 5,341,719,927 3,135,420,137
Staff loan 96,150,313 99,779,427 87,738,829 89,680,643
5,802,188,398 3,413,086,327 5,793,776,914 3,402,987,543
7.1.6 Maturity wise grouping of leases, loans and advances
On demand 4,321,974,821 3,187,364,282 4,021,211,963 2,771,621,114
Not more than 3 months 5,633,911,534 8,868,861,510 5,241,852,022 7,918,626,349
More than 03 month to 01 years 13,054,953,027 13,590,362,270 8,097,646,015 11,325,301,892
More than 01 year to 05 years 21,802,838,346 15,762,712,928 20,285,595,823 15,453,640,125

More than 05 years 21,730,679,719 9,834,998,793 24,267,281,666 9,280,009,778
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
7.1.7 Classification wise leases, loans and advances
Unclassified
Standard (UC) 63,347,727,912 48,830,884,347 58,716,957,955 44,335,783,821
Special Mention Accounts (SMA) 1,297,268,946 765,769,034 1,297,268,946 765,769,034
64,644,996,858 49,596,653,381 60,014,226,900 45,101,552,856
Classified
Sub-standard (SS) 376,858,799 392,822,434 376,858,799 392,822,434
Doubtful (DF) 334,349,319 177,580,680 334,349,319 177,580,680
Bad/loss (BL) 1,188,152,471 1,077,243,288 1,188,152,471 1,077,243,288
1,899,360,589 1,647,646,402 1,899,360,589 1,647,646,402
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258

See details in annexure-C
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Loans, advances and lease on the basis of significant concentration

a) Loans, advances and lease to the institutions in which - - 2,598,171,054 2,766,873,714
Directors have interest
b) Loans, advances and lease to Chief Executive and Other 105,684,841 78,946,246 105,684,841 78,946,246
senior executives
c) Loans, advances and lease to customer groups:
i) Real estate finance 11,528,831,861 5,760,110,365 11,528,831,861 5,760,110,365
ii) Car loan 6,050,506,949 4,977,287,862 6,050,506,949 4,977,287,862
iii) Personal loan 5,341,719,927 3,135,420,137 5,341,719,927 3,135,420,137
iv) Loan against deposits (LAD) 364,318,158 177,886,763 364,318,158 177,886,763
v) Small and medium enterprises 15,948,710,159 4,209,185,984 8,626,401,633 4,209,185,984
vi) Special program loan (Bangladesh Bank refinancing scheme) 485,525,640 546,894,455 485,525,640 546,894,455
vii) Staff loan 445,605,495 389,808,944 401,004,853 349,711,794
viii) Industrial loans, advances and leases 16,316,440,544 22,775,781,262 18,914,611,598 25,542,654,976
ix) Other loans and advances 10,062,698,714 9,271,924,011 10,200,666,870 2,050,046,922
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
d) Details of industrial loans, advances and leases
1) Trade and commerce 10,201,338,331 6,031,675,690 10,201,338,331 6,031,675,690
2) Industries
i) Garments and knitwear 2,338,242,343 1,894,189,916 2,338,242,343 1,894,189,916
ii) Textile 1,161,725,343 2,209,527,265 1,161,725,343 2,209,527,265
iii) Jute and jute -products 347,763,548 301,832,652 347,763,548 301,832,652
iv) Food production and processing industry 4,326,349,697 4,722,684,265 4,326,349,697 4,722,684,265
v) Plastic industry 841,049,103 1,184,009,391 841,049,103 1,184,009,391
vi) Leather and leather goods 533,109,763 63,787,555 533,109,763 63,787,555
vii) Iron, steel and engineering 1,933,135,749 3,300,467,817 1,933,135,749 3,300,467,817
viii) Pharmaceuticals and chemicals 891,621,721 929,396,014 891,621,721 929,396,014
ix) Cement and allied industry 1,113,589,834 358,564,274 1,113,589,834 358,564,274
x) Telecommunication and IT 842,460,879 726,113,898 842,460,879 726,113,898
xi) Paper, printing and packaging 540,912,315 581,370,549 540,912,315 581,370,549
xii) Glass, glassware and ceramic industry 18,615,081 537,586,008 18,615,081 537,586,008
xiii) Ship manufacturing industry - - - -
xiv) Electronics and electrical products 394,846,776 278,485,406 394,846,776 278,485,406
xv) Power, gas, water and sanitary service 710,182,455 639,180,336 710,182,455 639,180,336
xvi) Transport and aviation 1,249,063,645 641,419,399 1,249,063,645 641,419,399
17,242,668,252 18,368,614,744 17,242,668,252 18,368,614,744
3) Agriculture 860,013,586 255,531,746 860,013,586 255,531,746

4) Housing 12,601,598,184 6,714,351,530 12,601,598,184 6,714,351,530
5) Others
i) Loan to subsidiaries companies - - 2,598,171,054 2,766,873,714
ii) Others 25,638,739,094 19,874,126,073 18,409,798,082 12,612,151,834
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
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7.1.8 Particulars of loans, advances and leases
i) Loan considered good in respect of which the Bank/ FI
35,177,210,669 16,808,856,818 37,775,381,723 16,322,978,455
is fully secured
-
ii) Loan considered good for which the Bank/FI holds no

10,107,299,356 6,059,269,084 2,878,358,344 2,050,046,922
other security than the debtor’s personal security.
-
iii) Loan considered good and secured by the personal

security of one or more parties in addition to the personal 21,259,847,422 28,376,173,881 21,259,847,422 28,376,173,881
security of the debtors.
-
iv) Loan adversely classified; for which no provision is

- - - -
created.
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
v) Loan due by directors or officers of the Bank/ FI or

any of them either jointly or separately with any other 445,605,495 389,808,944 401,004,853 349,711,794
persons.
vi) Loan due by companies and firms in which the directors
of the Bank/FI have interests as directors, partners
- - 2,598,171,054 2,766,873,714
or managing agent or in case of private companies as
members.
Note: These loans, advances and leases are given to
subsidiaries companies where some of the
Directors of LankaBangla Finance Limited are
Directors in those subsidiaries companies
vii) Maximum total amount of advances, including
temporary advances made at any time during the year to
153,907,227 183,110,972 153,907,227 183,110,972
directors and managers or officers of the Bank/ FI or any
of them either severally or jointly with any other persons.
viii) Maximum total amount of advances, including
temporary advances granted during the year to the
companies or firms in which the directors of the Bank/ FI - - - -
have interests as directors, partners or managing agents
or, in case of private companies as members.
Note: These loans, advances and leases are given to
subsidiaries companies where some of the
Directors of LankaBangla Finance Limited are
Directors in those subsidiaries companies
ix) Due from other bank/ FI companies 2,559,014 3,524,497 2,559,014 3,524,497
x) Information in respect of classified loans and advances:
a) Classified loans for which interest/ profit not credited
1,899,360,589 1,647,646,402 1,899,360,589 1,647,646,402
to income
b) Amount of provision kept against loans classified as
709,251,765 482,570,155 709,251,764 482,570,155
bad/ loss as at the Balance Sheet date
2,608,612,353 2,130,216,557 2,608,612,353 2,130,216,557
c) Amount of interest credited to the interest suspense

173,123,310 151,352,690 173,123,310 151,352,690
account
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xi) Cumulative amount of written off loans:

Opening Balance 1,387,997,697 959,567,143 502,956,794 494,701,972
Amount written off during the year 235,668,242 440,680,553 66,627,999 20,504,822
Amount received from written off during the year 6,996,674 12,250,000 6,996,674 12,250,000
Balance of written off loans and advances yet to be recovered 1,616,669,265 1,387,997,697 562,588,120 502,956,794
The amount of written off loans for which law suits have been filed.
Leases, Loans, and advances -geographical location-wise
Inside Bangladesh
Urban
Dhaka 49,538,124,981 38,021,896,089 46,532,635,425 34,847,433,610
Chittagong 10,544,733,743 10,290,089,641 9,389,440,770 9,198,273,248
Sylhet 855,206,228 632,720,554 718,381,273 532,583,623
Jessore 1,468,815,161 927,089,693 1,468,815,161 927,089,693
Narshindi 641,719,189 368,916,795 435,663,250 286,725,713
Comilla 559,456,769 327,505,436 509,073,672 327,505,436
Bogra 725,550,996 253,255,486 725,550,996 253,255,486
Barisal 324,056,055 153,593,269 323,680,701 153,592,151
Khulna 382,754,381 69,527,190 382,754,381 69,527,190
Mymensingh 700,404,533 104,588,195 700,404,533 104,588,195
Narayangonj 358,105,618 65,430,371 281,757,535 18,937,849
Rajshahi 226,180,856 28,177,611 226,180,856 28,177,611
Chowmuhani 103,504,027 1,509,453 103,504,027 1,509,453
Dinajpur 58,852,759 - 58,852,759 -
Faridpur 56,892,151 - 56,892,151 -
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
Outside Bangladesh - - - -
66,544,357,447 51,244,299,783 61,913,587,489 46,749,199,258
8. Fixed assets including land, building, furniture and fixtures

Freehold assets (Note - 8.1) 1,454,307,178 1,137,914,155 1,011,466,754 955,869,126
Intangible assets (Note - 8.2) 284,452,459 282,295,846 45,156,908 39,260,132
Lease hold assets (Note - 8.3) 23,012,838 9,346,858 16,070,537 3,927,757
1,761,772,474 1,429,556,859 1,072,694,198 999,057,015
Details are given in Annexure - A and Annexure - B
8.1 Freehold assets
Land (Note - 8.1.1) 779,519,083 739,573,710 779,519,083 739,573,710
Freehold asset other than land (Note - 8.1.2) 674,788,095 398,340,445 231,947,671 216,355,417
1,454,307,178 1,137,914,155 1,011,466,754 955,929,126
8.1.1 Land
Opening Balance 739,573,710 686,921,231 739,573,710 686,921,231
Add : Addition/(Disposal) during the year 39,945,373 52,652,479 39,945,373 52,652,479
779,519,083 739,573,710 779,519,083 739,573,710
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8.1.2 Freehold asset other than land

A. Cost 739,209,801 623,628,908 406,420,164 311,962,401
Opening Balance 409,199,647 167,799,329 111,270,675 114,682,377
Add : Addition during the year 1,148,409,448 791,428,237 517,690,839 426,644,778
Less: Sales/ disposal during the year 57,669,414 52,218,436 52,742,811 20,224,614
1,090,740,034 739,209,801 464,948,028 406,420,164
B. Accumulated depreciation
Opening Balance 340,869,356 309,986,739 190,124,748 155,540,050
Add : Charged during the year 124,969,307 77,223,070 88,111,332 53,906,831
465,838,663 387,209,809 278,236,080 209,446,881
Less: Adjusted during the year 49,886,724 46,340,453 45,235,723 19,322,133
415,951,939 340,869,356 233,000,357 190,124,748
C. Written down value Total (A-B) 674,788,095 398,340,445 231,947,671 216,295,416
8.2 Intangible assets
Goodwill (Note - 8.2.1) 234,143,286 234,143,286 - -
System Software (Note - 8.2.2) 50,309,173 48,152,561 45,156,908 39,200,132
284,452,459 282,295,846 45,156,908 39,200,132
8.2.1 Goodwill*
Opening Balance 234,143,286 234,143,286 - -
Add: Addition during the year - - - -
234,143,286 234,143,286 - -
Less : Impairment during the year - - - -
234,143,286 234,143,286 - -
* Intangible asset, goodwill arises as a result of acquisition of 80% shares of BizBangla Media Limited by LankaBangla Securities Limited,
a subsidiary of LankaBangla Finance Limited as on 31 May 2015.
8.2.2 System software

A. Cost
Opening Balance 167,031,090 143,358,383 82,215,183 63,135,308
Add: Addition during the year 26,277,066 23,672,707 24,375,842 19,079,875
193,308,156 167,031,090 106,591,025 82,215,183
- - - -
193,308,156 167,031,090 106,591,025 82,215,183
B. Accumulated amortization
Opening Balance 118,878,529 101,096,392 42,955,051 33,981,026
Add : Amortized during the year 23,626,643 17,782,137 17,985,256 8,974,025
142,505,172 118,878,529 60,940,307 42,955,051
Less: Adjustment during the year (493,810) - (493,810) -
142,998,983 118,878,529 61,434,117 42,955,051
C. Written down value 50,309,173 48,152,561 45,156,908 39,260,132
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8.3 Lease hold assets

A. Cost
Opening Balance 42,004,990 43,605,030 9,777,000 9,777,000
Add: Addition during the year 20,322,000 - 15,080,000 -
62,326,990 43,605,030 24,857,000 9,777,000
Less: Adjusted during the year 4,290,990 1,600,040 - -
58,036,000 42,004,990 24,857,000 9,777,000
B. Accumulated depreciation
Opening Balance 32,658,132 28,720,419 5,849,243 4,625,494
Add : Charged during the year 6,656,020 5,537,753 2,937,220 1,223,749
39,314,152 34,258,172 8,786,463 5,849,243
Less: Adjustment during the year 4,290,990 1,600,040 - -
35,023,162 32,658,132 8,786,463 5,849,243
C. Written down value (A-B) 23,012,838 9,346,858 16,070,537 3,927,757
9. Other assets
Non income generating assets
Advances and prepayments (Note - 9.1) 1,364,656,798 1,111,543,492 850,730,827 651,690,725
Income generating assets 272,546,288 177,879,344 4,260,204,404 4,162,600,536
Interest and other receivables (Note - 9.2) 272,546,288 177,879,344 114,267,441 66,663,573
Investment in subsidiaries: - - 4,145,936,963 4,095,936,963
LankaBangla Securities Limited - - 1,546,237,023 1,546,237,023

LankaBangla Asset Management Company Limited - - 929,700,000 879,700,000
LankaBangla Investment Limited - - 1,669,999,940 1,669,999,940
1,637,203,086 1,289,422,836 5,110,935,231 4,814,291,262
9.1 Advances and Prepayments
Advance office rent 106,467,479 68,874,613 68,398,430 57,958,865
Advance for expenses 18,116,405 2,600,285 10,146,591 520,433
Advance insurance premium 7,045,533 1,939,450 2,397,042 1,939,450
Advance to suppliers and others 38,952,861 10,157,183 38,952,861 10,157,183
Advance income tax* 789,328,748 459,670,758 400,365,777 319,543,947
Advance interest payment 7,317,708 6,729,787 7,317,708 6,729,787
Advance against floor purchase - 191,968,000 - -
Security and other deposit receivable 25,125,472 114,755,038 10,884,317 6,822,208
Advance for bank guarantee margin 163,706 1,058,401 - -
Prepayments and others 372,138,886 253,789,979 312,268,101 248,018,852
1,364,656,798 1,111,543,492 850,730,827 651,690,725
*Advance income tax represents corporate income tax paid as per Section- 64 of the Income Tax Ordinance 1984 and the amount of income
tax deducted at source (TDS) by different financial institutions on the interest on bank balances of LankaBangla Finance Limited.
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9.1.1 Prepayments and others
Advance for land** 182,935,000 182,935,000 182,935,000 182,935,000
Advance for Lankabangla Tower 58,041,606 - 58,041,606 -
Receivables against share trading - - 4,191,269 34,371,969
Receivables DSE and CSE 46,241,107 33,964,790 - -
Deferred tax asset (Note -9.1.1.1) 22,198,464 21,132,613 20,670,433 20,670,433
Dividend receivables 19,930,328 4,563,703 4,307,975 2,067,953
Capital work in progress (Note -9.1.1.2) 41,058,027 5,342,062 41,058,027 5,342,062
Other receivables 1,734,355 5,851,812 1,063,790 2,631,435
372,138,886 253,789,979 312,268,101 248,018,852
**LBFL has purchased a plot (9.07 katha of Land) from RAJUK. After completing necessary formalities, RAJUK duly allotted Plot
no. 6 Road no. 3 Motijheel C/A to LBFL. The registration of the said Land is under process.
9.1.1.1 Deferred tax asset
Deferred tax has been calculated based on deductible taxable temporary difference arising due to difference in the carrying
amount of the assets and its tax base in accordance with the provision of Bangladesh Accounting Standard (BAS) 12 “Income
Taxes”.
Accounting Tax base
Tax base
Particulars base carrying carrying
amounts
amounts amounts
Deferred tax asset is arrived at as follows
Assets:
Fixed assets net of depreciation including leased hold assets as on 31 231,947,671 731,788,360 499,840,689
December 2017
Liabilities:
Employee gratuity as on 31 December 2017 58,564,778 - 58,564,778
Total 290,512,449 731,788,360 558,405,467
Applicable tax rate for fixed assets and employee gratuity @40% 223,362,187
Deferred tax asset as on 31 December 2017 223,362,187
Deferred tax asset as on 31 December 2016 20,670,433
Deferred tax income need to account for during the year 202,691,754
However, as per BAS 12 deferred tax asset shall be recognized to the extent that it is probable that taxable profit will be available
against which the deductible difference can be utilized. However, due to having huge amount of accumulated business loss as
per tax laws, it is not probable that there will be future taxable profit against which these deductible temporary difference can
be utilized. Hence, no additional deferred tax asset has been recognized during the current year.
In addition to that subsidiary companies recognized its respective deferred tax assets to the extent of its available taxable
profit.
9.1.1.2 Capital work in progress**
Opening balance 5,342,062 370,000 5,342,062 370,000
41,058,027 5,342,062 41,058,027 5,342,062
Less: Transfer to fixed assets - - - -
41,058,027 5,342,062 41,058,027 5,342,062
** Capital work in progress includes BDT 26,295,972 paid for construction of building for Lankabangla Head Office and
BDT 14,762,055 paid for implementation of IFS ERP software.
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9.2 Interest and other receivables
Interest receivables from fixed deposit account 105,733,690 30,498,349 104,800,774 29,435,796
Interest receivables from Commercial Paper 9,466,667 37,227,778 9,466,667 37,227,778
Issue management fees receivable 14,622,354 3,772,500 - -
Account receivable from PO department 23,051,916 30,663,233 - -
Account receivable from advertisement 97,823,773 68,116,232 - -
Account receivable from circulation 5,894,045 5,193,890 - -
Corporate advisory fees receivable - 1,112,150 - -
Receivable from Vision Capital Management Ltd. 9,186 - - -
Receivable from LankaBangla Al-Arafah Shariah Unit Fund 2,277,243 - - -
Receivable from CAPM Unit Fund 8,722,500 - - -
Receivable from LankaBangla 1st balanced unit fund 4,944,915 1,295,212 - -
272,546,288 177,879,344 114,267,441 66,663,573
10 Borrowings from Bangladesh Bank, other banks and financial institutions

Inside Bangladesh (Note - 10.1) 18,563,686,212 10,874,998,487 15,061,790,454 8,333,852,304
Outside Bangladesh - - - -
18,563,686,212 10,874,998,487 15,061,790,454 8,333,852,304
10.1 Inside Bangladesh

Secured:
Bank overdraft (Note - 10.1.1) 1,484,406,014 1,241,715,754 1,484,406,014 1,241,715,754
Long term loan (Note - 10.1.2) 3,204,556,576 1,688,521,479 2,162,101,502 1,003,630,699
4,688,962,590 2,930,237,233 3,646,507,516 2,245,346,454
Unsecured:
Call loans (Note - 10.1.3) 1,280,000,000 980,000,000 1,280,000,000 980,000,000
Commercial Paper 500,000,000 - 500,000,000 -
Short term borrowings (Note - 10.1.4) 11,153,130,809 5,648,192,316 8,980,000,000 4,190,000,000
Zero Coupon Bond (Note - 10.1.5) 941,592,813 1,316,568,938 655,282,938 918,505,850
13,874,723,622 7,944,761,254 11,415,282,938 6,088,505,850
18,563,686,212 10,874,998,487 15,061,790,454 8,333,852,304

10.1.1 Bank overdraft
Secured by FDR
Standard Chartered Bank - (40,312,965) - 110,559,894
Commercial Bank of Ceylon PLC (69,945,249) 110,559,894 (69,945,249) (40,312,965)
(69,945,249) 70,246,929 (69,945,249) 70,246,929
Secured by Pari Passu sharing agreement
Bangladesh Development Bank Limited - (2,698) - (2,698)
Midland Bank Limited 75,757,757 155,207,230 75,757,757 155,207,230
Bank Asia Limited 22,443,031 3,585,741 22,443,031 3,585,741
BASIC Bank Limited 200,291,667 - 200,291,667 -
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Prime Bank Limited 189,779,047 184,770,465 189,779,047 184,770,465
Dhaka Bank Limited 177,018,283 3,237,424 177,018,283 3,237,424
Dutch Bangla Bank limited 20,627,860 46,782,697 20,627,860 46,782,697
Modhumoti Bank Limited 289,468,512 168,671,147 289,468,512 168,671,147
Mutual Trust Bank Limited 11,787,594 263,963,714 11,787,594 263,963,714
The Premier Bank Limited 2,266,874 - 2,266,874 -
United Commercial Bank Limited 455,274,240 299,640,918 455,274,240 299,640,918
1,554,351,264 1,171,468,825 1,554,351,264 1,171,468,825
1,484,406,014 1,241,715,754 1,484,406,014 1,241,715,754
10.1.2 Long term loan

Opening Balance 1,688,521,479 2,665,656,043 1,003,630,699 1,432,163,901
Add: Addition during the year 2,047,628,595 318,117,949 1,342,386,595 218,342,388
3,736,150,074 2,983,773,992 2,346,017,294 1,650,506,289
Less: Adjusted during the year 531,593,498 1,295,252,513 183,915,793 646,875,589
3,204,556,576 1,688,521,479 2,162,101,502 1,003,630,699
Details of the above balance is presented below:
From Bangladesh Bank and its agents Bank

Bangladesh Bank (under Re-Finance)- Women Entrepreneur 148,033,967 160,753,737 148,033,967 160,753,737
Bangladesh Bank (under Re-Finance)- Home Loan 485,501,314 547,061,546 485,501,314 547,061,546
Bangladesh Bank (under Re-Finance)- IPFF Fund 198,358,403 189,000,000 198,358,403 189,000,000
Bangladesh Bank (Under Re-Finance)- Agro Processing Industry 69,393,910 24,347,769 69,393,910 24,347,769
Bangladesh Bank (Under Re-Finance)- JICA Assisted Project-
148,843,746 - 148,843,746 -
FSPDSME
1,050,131,340 921,163,051 1,050,131,340 921,163,051
From other than Bangladesh Bank and its agents Bank
Dutch Bangla Bank Limited 45,030,235 78,211,725 45,030,235 78,211,725

Hajj Finance Company Limited - 75,449,998 - -
Investment Corporation of Bangladesh (ICB) - 10,789,043 - -
Midland Bank Limited 40,769,554 49,255,458 - -
Phoenix Finance & Investment Ltd 181,683,310 - - -
Prime Bank Limited 800,000,000 - 800,000,000 -
Shahjalal Islami Bank Limited 103,822,264 100,201,608 - -
South Bangla Agriculture and Commerce Bank Limited 484,858,607 436,950,663 - -
Standard Bank Limited 219,579,888 - - -
Woori Bank 250,000,000 - 250,000,000 -
Lease obligation 28,681,378 16,499,933 16,939,927 4,255,923
2,154,425,236 767,358,427 1,111,970,162 82,467,648
3,204,556,576 1,688,521,479 2,162,101,502 1,003,630,699
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Bank borrowings are secured by:
a. First ranking pari passu charge on present and future fixed and floating assets of LankaBangla Finance Limited with the
future and existing lenders.
b. Usual charge documents (Letter of Hypothecation, Promissory Notes, Letter of Continuation, Letter of Arrangements, etc.)
c. Funds required for the operation of business are primarily obtained from various banks and financial institutions. Secured
loans are covered by way of first priority floating charge with full title guarantee ranking pari-passu among all the lenders
of the company.
10.1.4 Call loan
Agrani Bank Limited 150,000,000 - 150,000,000 -
Bangladesh Commerce Bank Limited - 100,000,000 - 100,000,000
Basic Bank Limited - 40,000,000 - 40,000,000
Dhaka Bank Limited - - - 100,000,000
Dutch Bangla Bank Limited - 100,000,000 - -
Janata Bank Limited 200,000,000 150,000,000 200,000,000 150,000,000
Meghna Bank 190,000,000 - 190,000,000 -
Mutual Trust Bank Limited 240,000,000 70,000,000 240,000,000 70,000,000
Pubali Bank Limited - 90,000,000 - 90,000,000
Sonali Bank Limited 350,000,000 50,000,000 350,000,000 50,000,000
Southeast Bank Limited - 100,000,000 - 100,000,000
Uttara Finance & Investments Limited 150,000,000 - 150,000,000 -
United Commercial Bank Limited - 280,000,000 - 280,000,000
1,280,000,000 980,000,000 1,280,000,000 980,000,000
10.1.4 Short term borrowings
Brac Bank Limited - 1,200,000,000 - 1,200,000,000
Dhaka Bank Limited - 300,000,000 - 300,000,000
Eastern Bank Limited 2,700,000,000 740,000,000 2,700,000,000 740,000,000
Hajj Finance Limited 201,134,697 - - -
Jamuna Bank Limited 350,000,000 500,000,000 350,000,000 500,000,000
Meghna Bank Ltd 500,000,000 - 500,000,000 -
Midland Bank Limited 102,766,955 102,827,789 - -
Mutual Trust Bank Limited 600,000,000 - 600,000,000 -
National Bank Limited 1,000,000,000 - 1,000,000,000 -
National Credit and Commerce Bank Ltd. 250,000,000 - 250,000,000 -
One Bank Limited 712,173,106 612,786,442 - -
Phonix Finance Limited 204,644,444 - - -
Prime Bank Limited 500,000,000 700,000,000 500,000,000 700,000,000
Shahjalal Islami Bank Limited 148,491,305 100,919,167 50,000,000 -
South Bangla Agriculture and Commerce Bank Limited 205,400,680 17,513 - -
Standard Chartered Bank 1,472,582,122 787,266,405 1,080,000,000 400,000,000
Trust Bank Limited 800,000,000 100,000,000 800,000,000 100,000,000
United Commercial Bank Limited 650,000,000 - 650,000,000 -
United Finance Limited 255,937,500 254,375,000 - -
Uttara Bank Limited 400,000,000 250,000,000 400,000,000 250,000,000
Woori Bank Limited 100,000,000 - 100,000,000 -
11,153,130,809 5,648,192,316 8,980,000,000 4,190,000,000
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10.1.5 Zero Coupon Bond
A. K. Kham Co. Ltd. 110,135,694 - 110,135,694 -
Bangla Telecom Limited 23,859,156 33,171,924 - -
Central Depository Bangladesh Limited - 30,617,474 - 30,617,474
Delsey Cotton Spinning Mills Limited - 45,925,293 - 45,925,293
Faisal Spinning Mills Limited 47,718,313 66,343,848 - -
Grameen One: Scheme Two 23,859,156 33,171,924 - -
Janata Jute Mills Limited 71,577,468 283,216,942 - 183,701,170
Mr. Mahmudul Huq 47,718,313 66,343,848 - -
Ms. Monisha Anwar Huq 47,718,313 66,343,848 - -
Prime Bank Limited - 30,615,637 - 30,615,637
Reliance Insurance Limited 23,859,156 33,171,924 - -
Sk. Akijuddin Limited - 398,019,814 - 398,019,814
Square Pharmaceuticals Limited 220,488,346 45,925,292 220,488,346 45,925,292
Super Petrochemical Ltd. 60,075,000 - 60,075,000 -
Universal Jeans Limited 264,583,898 91,850,585 264,583,898 91,850,585
Uttara Motor Corporation Limited - 91,850,585 - 91,850,585
941,592,813 1,316,568,938 655,282,938 918,505,850
On 15 December 2014, the Company issued Zero Coupon Bond with face value of BDT 3,000 million. After discounting the Bond
at 11.5%, the Company received BDT 2,478,093,342. The mode of payment of the Bond was 6 equal instalments (2 instalments
in a year, BDT 500 million each instalment). Total transaction costs incurred for issuance of the Bond was BDT 39,031,137.
Subsequently, the Zero Coupon Bond was measured at amortized cost using the effective interest method. The effective
interest rate for this bond stands at 12.51% as per Para 9 of BAS 39.
Initially the Zero Coupon Bond was measured at fair value (BDT 2,478,093,342) less transaction costs (BDT 39,031,137), i.e.,
as per para 43 of BAS 39. The Zero Coupon Bond, on arriving maturity on 15 December 2017, was completely amortized and
repaid in full.
On 26 December 2017, the Company issued the first tranche of the second Zero Coupon Bond with face value of BDT 742,998,000
(with approved face value of BDT 3,000 million). The Company received BDT 654,466,856 after discounting the Bond at 7.5%.
The bond will be repaid in 6 equal instalments (semi-annually). Total transaction costs incurred for issuance of the Bond was
BDT 12,195,023.
Subsequently, the Zero Coupon Bond was measured at amortized cost using the effective interest method. The effective
interest rate for this bond stands at 8.66% as per Para 9 of BAS 39.
Initially the Zero Coupon Bond was measured at fair value (BDT 654,464,856) less transaction costs (BDT 12,195,023), i.e.,
642,269,833 as per para 43 of BAS 39.
Maturity grouping of borrowings from other banks and financial institutions
Payable on demand - - - -
Up to 1 month 2,868,258,404 1,032,514,845 2,830,000,000 1,032,514,845
Over 1 month but within 3 months 2,467,055,177 3,434,000,000 2,390,538,369 3,434,000,000
Over 3 months but within 1 year 6,280,717,835 1,914,354,584 4,849,826,791 1,914,354,584
Over 1 year but within 5 years 2,768,196,840 1,145,427,764 1,639,533,286 1,145,427,764
Over 5 years 4,179,457,956 3,348,701,293 3,351,892,008 807,555,110
18,563,686,212 10,874,998,487 15,061,790,454 8,333,852,304
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11 Term deposits and other deposits
Term deposits (Note - 11.1) 51,552,816,766 40,033,189,441 51,552,816,766 40,033,189,441
Other deposit (Note - 11.2) 122,341,372 115,303,314 122,341,372 115,303,314
51,675,158,138 40,148,492,755 51,675,158,138 40,148,492,755
11.1 Term deposits
Product wise break-up of term deposit
Periodic return term deposits 940,800,739 775,408,411 940,800,739 775,408,411
Cumulative term deposits 126,886,874 161,926,770 126,886,874 161,926,770
Double money term deposits 2,684,636,084 2,527,202,910 2,684,636,084 2,527,202,910
Money builders scheme 467,609,486 239,849,222 467,609,486 239,849,222
Fixed term deposit 17,533,669,679 14,950,824,477 17,533,669,679 14,950,824,477
Flexi Deposits 10,353 - 10,353 -
SME term deposits 75,250,000 - 75,250,000 -
Retail institution deposit 120,807,962 - 120,807,962 -
Term deposit earn first - 55,244,384 - 55,244,384
Term deposit shohoj sanchoy 728,168,802 835,056,966 728,168,802 835,056,966
Term deposit quick sanchoy 3,381,555 1,355,359 3,381,555 1,355,359
Term deposit triple money 374,156,386 292,650,588 374,156,386 292,650,588
Term deposit (fixed term)-3 months 154,344,966 257,245,771 154,344,966 257,245,771
Term deposit Earn First Fixed Rate 159,701,060 139,766,600 159,701,060 139,766,600
Term deposit Agroj (Senior Citizen) 2,344,603,880 1,166,872,301 2,344,603,880 1,166,872,301
Term deposit Classic TDR 2 To 3 Years 25,838,788,940 18,629,785,682 25,838,788,940 18,629,785,682
51,552,816,766 40,033,189,441 51,552,816,766 40,033,189,441
11.2 Other deposits against leases, loans and advances

Other deposits
Corporate Clients 52,993,870 100,410,905 52,993,870 100,410,905
Retail Clients 53,266,626 8,947,298 53,266,626 8,947,298
SME Clients 16,080,876 5,945,111 16,080,876 5,945,111
122,341,372 115,303,314 122,341,372 115,303,314
11.3 Group-wise break-up of term deposits and other deposits
Bank and Non Bank Financial Institute (NBFI) 16,740,000,000 10,720,847,500 16,740,000,000 10,720,847,500
Corporate houses 24,364,085,213 16,138,228,539 24,364,085,213 16,138,228,539
Individual 10,571,072,925 13,289,416,716 10,571,072,925 13,289,416,716
51,675,158,138 40,148,492,755 51,675,158,138 40,148,492,755
11.4 Remaining maturity grouping of term deposits and other deposits
Payable on demand - - - -
In not more than 01 month 4,478,546,634 2,768,224,030 4,478,546,634 2,768,224,030
In more than 01 month but not more than 06 months 6,596,356,689 12,808,854,650 6,596,356,689 12,808,854,650
In more than 06 months but not more than 01 year 6,969,086,199 5,115,830,062 6,969,086,199 5,115,830,062
In more than 01 year but not more than 05 years 16,317,009,786 12,384,294,888 16,317,009,786 12,384,294,888
In more than 05 years but not more than 10 years 17,314,158,829 7,071,289,126 17,314,158,829 7,071,289,126
In more than 10 years - - - -
51,675,158,138 40,148,492,755 51,675,158,138 40,148,492,755
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12. Other liabilities
See accounting policy in note (2.25),(2.26),(2.27) and (2.35)
Accrued expenses 31,444,401 26,789,849 22,672,532 17,729,386
Salaries and related expenses payable 75,836,803 21,269,432 1,474,166 771,626
Office rent payable 4,716,983 3,111,159 1,010,100 556,043
Utility bill payable 3,887,897 3,066,481 2,457,296 1,819,214
Advance receipt against leases-adjustment A/C 528,791,439 142,756,424 528,791,439 142,756,424
CDBL expenses payable 2,482,835 3,549,078 - -
Client positive balance 85,466,875 69,238,819 - -
Deferred liability-employee gratuity (Note -12.1) 70,683,138 51,615,460 58,564,778 43,434,906
Deferred tax liability 7,004,484 2,691,911 - -
Employees provident fund payable 10,180,661 9,595,576 (309,668) 4,723,489
Interest payable (Note - 12.2) 1,479,420,311 964,824,075 1,438,357,354 946,284,627
Interest suspense account (Note - 12.3) 559,724,716 1,160,076,143 385,621,388 349,912,097
IPO subscription payable 51,794 51,794 51,794 51,794
ITCL settlement A/C 15,961,293 3,942,809 15,961,293 3,942,809
Insurance premium payable for asset clients - 57,657 - 57,657
Payable against MCBS charges 8,891 8,538 8,891 8,538
Payable against merchants claims and others 952,825 892,270 952,825 892,270
Payable against receipt from other card holders 4,237,462 3,319,119 4,237,462 3,319,119
Payable to LB Foundation 22,009,465 12,590,284 13,664,551 10,828,830
Payable DSE and CSE 51,620,807 177,154,351 - -
Payable to share trading clients 1,397,710,049 1,569,689,521 - -
Provisions for loans / investments (Note - 12.4) 1,434,422,523 1,460,992,545 1,243,366,277 1,061,553,115
Provision for other assets - 2,910,000 - 2,910,000
Provision for taxation (Note - 12.5) 705,475,270 375,746,093 259,370,032 214,770,322
Receivables/(payables)-other MasterCard operator (Note - 12.6) 25,084,555 13,641,531 25,084,555 13,641,531
Payable to right share holder 214,123 214,123 214,123 214,123
Payable against legal and professional fees 8,024,345 3,401,659 7,898,345 3,275,659
Payable against redemption of mortgage property 831,750 371,750 831,750 371,750
Provision for audit fee 1,052,079 1,487,225 575,000 858,750
Sundry creditors 33,204,524 21,664,757 33,131,916 21,664,757
Safety net deposit-factoring and others 3,917,332 3,020,178 3,917,332 3,020,178
Security Deposits 202,212 - 202,212 -
Unpaid dividend 81,370,520 49,455,675 76,442,200 46,333,230
Privileged creditors (Note - 12.7) 117,344,982 74,772,274 116,354,476 73,991,939
VISA settlement A/C 1,838,909 526,490 1,838,909 526,490
Brokerage sharing 9,725,852 13,512,653 - -
Other liabilities 340,989 473,102 - -
Mobile phone bill payable-Handset 45,185 110,809 45,185 110,809
Payable against parent helth insurance 62,715 - 62,715 -
6,775,350,993 6,248,591,612 4,242,851,226 2,970,331,482
12.1 Deferred liability - employee gratuity

Opening Balance 51,615,460 87,910,169 43,434,906 27,534,735
Addition during the year 33,280,513 52,642,228 29,027,280 25,139,378
Received cash - 490,050 - 490,050
84,895,973 141,042,447 72,462,186 53,164,163
Payment during the year 14,212,835 89,426,987 13,897,408 9,729,257
Closing Balance 70,683,138 51,615,460 58,564,778 43,434,906
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12.2 Interest payable
Term deposit receipts 1,386,265,862 916,994,439 1,386,265,862 916,994,439
Long term loan-Commercial Bank 6,565,249 - 6,565,249 -
Long term loan-Bangladesh Bank - 3,658,533 - 3,658,533
Long term loan-Bangladesh Bank-IPFF 2,462,765 24,919,097 2,462,765 24,919,097
Long term loan-Bangladesh Bank-Agro Processing Industry 830,846 160,475 830,846 160,475
Long term loan-Bangladesh Bank-JICA Assisted Project-
941,435 - 941,435 -
FSPDSME
Short term borrowings 56,338,304 18,739,447 15,275,347 200,000
Lease finance 63,350 - 63,350 -
Commercial paper 25,312,500 - 25,312,500 -
Call loan borrowings 640,000 352,083 640,000 352,083
1,479,420,311 964,824,075 1,438,357,354 946,284,627
12.3 Interest suspense account

Lease finance 92,195,601 83,798,612 92,195,601 83,798,612
Term finance 162,263,048 152,000,644 162,263,048 152,000,644
Credit card 27,215,607 25,901,238 27,215,607 25,901,238
Home loan 103,947,132 88,211,602 103,947,132 88,211,602
Margin Loan 174,103,328 810,164,046 - -
559,724,716 1,160,076,143 385,621,388 349,912,097
12.3.1 Movement of interest suspense account

Opening Balance 1,160,076,143 1,093,964,825 349,912,097 283,800,779
Add: Transferred to interest suspense during the year 173,123,310 151,352,690 173,123,310 151,352,690
Less: Interest suspense realized during the year 111,660,967 84,711,021 111,660,967 84,711,021
1,221,538,486 1,160,606,494 411,374,440 350,442,448
Less: Write off during the year 661,813,770 530,351 25,753,052 530,351
559,724,716 1,160,076,143 385,621,388 349,912,097
12.4 Provisions for loans / investments

Provision for leases and loans 1,243,366,277 1,061,553,115 1,243,366,277 1,061,553,115
Lease finance 354,727,693 363,976,057 354,727,693 363,976,057
Term finance and short term loan 535,074,151 461,682,149 535,074,151 461,682,149
Credit card 210,012,665 170,520,249 210,012,665 170,520,249
Home loan 143,551,768 65,374,659 143,551,768 65,374,659
Margin loan 191,056,246 323,329,884 - -

Provision for diminution in value of investment in equity
- 76,109,546 - -
shares
1,434,422,523 1,460,992,545 1,243,366,277 1,061,553,115
12.4.1 Movement of provision for loans / investments

Opening Balance 1,460,992,545 1,506,023,770 1,061,553,115 1,006,394,000
Provision required for the year 331,401,780 515,042,889 370,744,722 195,057,497
Provision released during the year (122,303,560) (119,393,560) (122,303,560) (119,393,560)
Provision charged for the year 209,098,220 395,649,328 248,441,162 75,663,937
Write off during the year 235,668,242 440,680,553 66,627,999 20,504,822
Closing Balance 1,434,422,523 1,460,992,545 1,243,366,277 1,061,553,115
During the year 2017, the Company had written off its receivables of contracts as per write off policy of the Bangladesh Bank
(FID circular No. 03 dated 15 March 2007) and no written off its receivables of contracts during the year 2017.
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12.4.2 Grouping of Provision for leases, loans, advances and investments
General Provision
Standard (UC) 472,964,577 413,556,962 472,964,577 413,556,962
Special Mention Account (SMA) 61,149,937 35,859,341 61,149,937 35,859,341
534,114,513 449,416,303 534,114,513 449,416,303
Specific Provision
Sub-standard (SS) 52,808,550 52,000,640 52,808,550 52,000,640
Doubtful (DF) 100,433,666 36,238,736 100,433,666 36,238,736
Bad Loss (BL) 556,009,548 523,897,436 556,009,548 523,897,436
709,251,764 612,136,812 709,251,764 612,136,812
Provision for margin loan 191,056,246 323,329,884 - -

Provision for investment in shares - 76,109,546 - -
1,434,422,523 1,460,992,545 1,243,366,277 1,061,553,115
Details see in Annexure-C
12.5 Provision for taxation
Opening Balance 375,746,093 342,360,205 214,770,322 179,488,712
Add: Provision during the year 334,274,885 148,304,531 44,599,710 35,281,610
710,020,978 490,664,736 259,370,032 214,770,322
Less: Adjusted during the year 4,545,708 114,918,643 - -
705,475,270 375,746,093 259,370,032 214,770,322
12.6 Receivables/(payables)-other Master Card operator
This represents receivable/payables from the other master card operators which is created due to the use of credit card
systems at the point of sales.
Bank Asia Limited (1,829,851) (929,773) (1,829,851) (929,773)
City Bank Limited - 1,730 - 1,730
National Bank Limited - 15,570 - 15,570
Premier Bank Limited - 7,757 - 7,757
Balance for Master Card operation (Nostro A/C) 5,584,533 5,584,533 5,584,533 5,584,533
25,084,555 13,641,531 25,084,555 13,641,531
12.7 Privileged creditors

Three major categories of Government dues are reported. Tax deduction at source, VAT, Excise duty payable to govt. exchequer.
VAT at source 16,594,755 12,739,673 16,354,794 12,624,733

Tax deducted at source (TDS) 51,007,996 40,320,491 50,257,452 39,655,096
Excise duty deducted form customer accounts 49,742,230 21,712,110 49,742,230 21,712,110
117,344,982 74,772,274 116,354,476 73,991,939
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13 Share capital
Authorized 10,000,000,000 10,000,000,000 10,000,000,000 10,000,000,000
100,000,000 ordinary shares of Tk.10/- each
Issued, subscribed and paid up 3,182,509,410 2,767,399,490 3,182,509,410 2,767,399,490
13.1 Given below the history of raising of share capital of LankaBangla Finance Limited
Number of Shares Issued Amount of
Amount of
Paid up Shares Shares
Allotment Particulars Shares
(Cumulative) Capital (BDT)
Year Bonus Shares Subscription Capital (BDT) (Cumulative)
First ( Subscription as per
Memorandum and Articles
1996 - 500,000 500,000 5,000,000 5,000,000
of Association) at the time of
Incorporation
1998 Subscription - 9,500,000 10,000,000 95,000,000 100,000,000
2003 Subscription - 10,105,363 20,105,363 101,053,630 201,053,630
2004 Subscription - 4,000,000 24,105,363 40,000,000 241,053,630
2005 Subscription - 1,894,637 26,000,000 18,946,370 260,000,000
2006 IPO - 9,000,000 35,000,000 90,000,000 350,000,000
2008 10% Stock Dividend for 2007 3,500,000 - 38,500,000 35,000,000 385,000,000
30% Stock Dividend for 2011 24,705,450 - 107,056,950 247,054,500 1,070,569,500
2012
1:1 Right of 82,351,500 Shares - 82,351,500 189,408,450 823,515,000 1,894,084,500
2013 10% Stock Dividend for 2012 18,940,845 - 208,349,295 189,408,450 2,083,492,950
TOTAL 3,182,509,410
Details of shares holding position are as under:

2017 2016
Percentage
Sponsor shareholders: Number of Number of
31.12.2017 Taka Taka
shares shares
a. Foreign sponsors
Sampath Bank Limited, Sri Lanka 9.47% 30,143,437 301,434,370 26,211,685 262,116,850
b. Local sponsors 24.09% 76,650,848 766,508,480 66,912,915 669,129,150

ONE Bank Limited, Bangladesh 3.78% 12,026,719 120,267,190 10,458,017 104,580,170
Individuals 20.31% 64,624,129 646,241,290 56,454,898 564,548,980
General shareholders 66.44% 211,456,656 2,114,566,560 183,615,349 1,836,153,490

100.00% 318,250,941 3,182,509,410 276,739,949 2,767,399,490
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Shares groups Number of share Percentage Number of share Percentage

Less than 500 949,064 0.30 824,795 0.30
501 to 5,000 14,819,145 4.66 12,808,522 4.63
5,001 to 10,000 11,504,239 3.61 10,054,174 3.63
10,001 to 20,000 13,431,657 4.22 11,518,221 4.16
20,001 to 30,000 8,876,649 2.79 7,558,307 2.73
30,001 to 40,000 7,225,137 2.27 5,674,440 2.05
40,001 to 50,000 7,142,891 2.24 5,347,664 1.93
50,001 to 100,000 21,486,351 6.75 13,756,619 4.97
100,001 to 1,000,000 82,162,974 25.82 53,931,911 19.49
Above 1000000 150,652,834 47.34 155,265,296 56.11
318,250,941 100.00 276,739,949 100.00
The company increased its paid-up capital from Tk. 2,767,399,490 to Tk. 3,182,509,410 by issuing 41,510,992 bonus share to
the shareholders as approved in 20th Annual General Meeting (AGM) held on 30 March 2017.
The shares were listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited on 17 October 2006 and 31
October 2006 respectively, also trading in the both houses form 01 November, 2006. Share trade Tk. 47.80 and Tk. 47.90 At
Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited respectively at the end of the year 2017.
13.2 Name of the directors and their shareholdings as at December 31, 2017
Share Holding Share Holding % of Share
Sl No. Name Status as on as on helding as on
31.12.2016 31.12.2017 31.12.2017
1 Mr. Mohammad A. Moyeen Chairman 11,731,614 13,491,355 4.24%
Mr. I. W. Senanayake
2 Director
(Representative of Sampath Bank PLC)
26,211,685 30,143,437 9.47%
Mr. M. Y. Aravinda Perera
3 Director
(Representative Sampath Bank PLC)
Mr. M. Fakhrul Alam
4 Director 10,458,017 12,026,719 3.78%
(Representative ONE Bank Limited)
5 Mrs. Aneesha Mahial Kundanmal Director 21,315,793 24,513,161 7.70%
6 Mr. Mahbubul Anam Director 12,325,418 14,174,230 4.45%
7 Mr. Tahsinul Huque Sponsor 10,782,073 12,399,383 3.90%
8 Mrs. Jasmine Sultana Independent Director 300,000 46,000 0.01%
9 Mr. Al-Mamoon Md. Sanaul Huq Independent Director - - 0.00%
10 Mrs. Zaitun Sayef Independent Director - - -
Total 93,124,600 106,794,285 33.56%
13.3 Rights Share Issue
The Board has duly recommended the Right Issue in its 101st Meeting dated October 25, 2016. The Shareholders approved the
Right Issue in 10th EGM held on June 15, 2017.
Bangladesh Securities and Exchange Commission vide its letter number BSEC/CI/RI-112/2017/591 dated October 31, 2017
approved Right Issue of LankaBangla Finance Limited.
In compliance with the approval letter of BSEC and Securities and Exchange Commission (Right Issue) Rules, 2006 the relevant
information are as follows:
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Sl. # Particulars Remarks

1 No. of Right shares offered 159,125,470 nos. of ordinary shares.
2 Ratio of the issue 1R:2 i. e. 1 (one) Rights share for 2 (two) existing shares held on the record date.
3 Issue price per share Taka 10.00 each.
4 Total amount of Right shares to be issued Taka 1,591,254,700
5 Record Date for entitlement of Right Shares November 26, 2017
6 Subscription Opening Date December 17, 2017
7 Subscription Closing Date January 14, 2018
8 Manager to the Issue AFC Capital Limited
• ONE Bank Limited
9 Banker to the Issue
• Investment Corporation of Bangladesh
• MIDAS Investment Limited
• AFC Capital Limited
10 Fully underwritten by
• Banco Finance and Investment Limited
• Citizen Securities & Investment Limited
Till 31 December 2017 the collection of subscriptions for right issues was not completed and as such no right shares were issued
till that date against the above said right issue approval.
Upto 31 December 2017 a sum of BDT 160,307,660 has been received against subscriptions of right issue which has been
reported as ‘Share Money Deposit for Right Issue’ under Shareholders' Equity .
Right issue process has been completed in January 2018 and right shares have been issued and alloted on 31 January 2018.

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13.4 Capital Adequacy Ratio (CAR)

“As per section 4(GHA) of the Financial Institution Regulations 1994, the minimum paid up capital of the Financial Institution
(FI) shall be Tk. 100 crore; Provided that the sum of paid up capital and reserves shall not be less than the minimum capital
determined by the Bangladesh Bank under the Risk-Based Assets of the Company. The surplus eligible capital of the Group
as well as the company at the close of business on 31 December 2017 were Tk.1,425.88 million and Tk. 1,197.62 million
respectively.”
Core Capital ( Tier-1)
Paid-up capital (Note - 13) 3,182,509,410 2,767,399,490 3,182,509,410 2,767,399,490
Share premium 1,090,888,800 1,090,888,800 - -
Statutory reserves (Note - 14) 1,472,602,021 1,202,043,919 1,472,602,021 1,202,043,920
General reserves 50,867,438 46,768,017 - -
Dividend equalization reserves - - - -
Other (Share money deposit for right issue) 160,307,660 - 160,307,660 -
Retained earnings (Note - 15) 2,369,825,140 1,579,509,093 2,452,387,301 2,200,374,742
Non-controlling interest 101,519,363 84,821,392 - -
Sub-Total 8,428,519,831 6,771,430,711 7,267,806,392 6,169,818,152
Deductions from Tier-1 (Core Capital)

Goodwill and value of any contingent assets which are
234,143,286 234,143,286 - -
shown as assets
Total Eligible Tire - 1 Capital 8,194,376,545 6,537,287,425 7,267,806,392 6,169,818,152
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Supplementary capital (Tier -II)
General provision (unclassified loans up to specified limit
534,114,513 449,416,303 534,114,513 449,416,303
+ SMA + off balance sheet exposure)
Assets revaluation reserves up to 50% - - - -
Revaluation reserve for securities up to 10% - - - -
All others preference shares - - - -
Others (if any other item approved by Bangladesh Bank) - - - -
Sub-Total 534,114,513 449,416,303 534,114,513 449,416,303
A) Total capital 8,728,491,059 6,986,703,728 7,801,920,905 6,619,234,454
Total assets including off -balance sheet exposures 94,667,525,231 70,441,484,523 87,472,416,267 64,020,465,650
B) Total risk weighted assets 73,026,050,283 56,121,952,259 66,042,974,022 50,056,222,400
C) Required capital based on risk weighted assets (10% on B) 7,302,605,028 5,612,195,226 6,604,297,402 5,005,622,240
D) Surplus capital (A-C) 1,425,886,030 1,374,508,502 1,197,632,503 1,613,612,214
E) Capital Adequacy Ratio 11.95% 12.45% 11.81% 13.22%
F) Core Capital to RWA 11.22% 11.65% 11.00% 12.33%
G) Supplementary Capital to RWA 0.73% 0.80% 0.81% 0.90%
14. Statutory reserve

Opening Balance 1,202,043,919 987,633,085 1,202,043,920 987,633,085
Add: Transferred from profit during the year @ 20% 270,558,101 214,410,834 270,558,101 214,410,834
1,472,602,021 1,202,043,919 1,472,602,021 1,202,043,920
15. Retained earnings
3,478,354,543 2,518,510,040 3,553,165,249 3,136,715,878
Opening Balance 1,579,509,093 1,722,988,700 2,200,374,742 2,064,661,706
Add: Profit for the year 1,898,845,450 795,521,340 1,352,790,507 1,072,054,172
Less: Adjustment during the year: 1,108,529,403 939,000,948 1,100,777,948 936,341,136
Transfer to statutory reserve during the year 270,558,101 214,410,834 270,558,101 214,410,834
Transfer to general reserve during the year 4,099,421 (7,081,053) - -
Changing effect of non controlling interest - - - -
Adjustment of non-controlling interest 3,652,034 9,740,864 - -
Transferred of stock dividend 415,109,920 360,965,150 415,109,920 360,965,150
Cash dividend 415,109,927 360,965,152 415,109,927 360,965,152
2,369,825,140 1,579,509,093 2,452,387,301 2,200,374,742
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16. Non-controlling interest

LankaBangla Group
Percentage of
Equity as on
Non-controlling
31.12.2017 2017 2016
interest
Taka Taka
Name of Subsidiaries
LankaBangla Securities Limited 3.4568394% 4,737,910,646 163,781,964 146,044,904
LankaBangla Investments Limited 0.0000036% 446,110,205 16 16
LankaBangla Asset Management Company Limited 0.0000020% 1,020,925,910 20 1,927
LankaBangla Information System Limited 3.6499258% 2,430,762 88,721 62,584
BizBangla Media Limited 22.7654715% (273,885,644) (62,351,358) (61,288,039)
101,519,363 84,821,392

2017 2016 2017 2016
Taka Taka Taka Taka
17. Interest income
See accounting policy in note (2.33.1) (2.33.2), (2.33.3) and (2.33.4)
Lending Finance
Lease finance 331,180,146 260,642,122 331,180,146 260,642,122
Lending to subsidiaries - - 272,621,168 325,965,295
Real estate developers Finance 4,542,134 1,343,114 4,542,134 1,343,114
Short term lending 596,054,701 864,639,604 596,054,701 864,639,604
Term finance 1,118,552,712 1,380,902,854 1,118,552,712 1,380,902,854
Term loan secured overdraft 3,627,560 6,295,292 3,627,560 6,295,292
Term loan syndication finance 50,992,581 57,838,401 50,992,581 57,838,401
Auto loan 781,314,305 514,479,186 781,314,305 514,479,186
Credit card (Note- 17.1) 523,052,175 403,552,585 523,052,175 403,552,585
Home loan (Note- 17.2) 1,030,771,307 574,210,038 1,030,771,307 574,210,038
Personal loan (Note- 17.3) 602,487,745 427,013,795 601,308,702 425,689,291
Emerging and commercial 176,460,113 104,606,664 176,460,113 104,606,664
SME finance 832,679,279 434,105,938 832,679,279 434,105,938
6,051,714,759 5,029,629,594 6,323,156,884 5,354,270,384
Treasury finance
Fixed deposit accounts 299,241,348 78,688,051 297,978,710 75,045,134
Short term deposit accounts 102,302,013 53,771,683 2,036,623 3,347,723
401,543,360 132,459,734 300,015,333 78,392,856
Others
Debit balance of share trading clients 126,936,747 401,494,843 - -
Margin loan to share trading clients 495,894,420 97,960,075 - -
622,831,167 499,454,918 - -
7,076,089,286 5,661,544,246 6,623,172,217 5,432,663,241
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17.1 Credit Card

Master Card 350,138,639 274,809,480 350,138,639 274,809,480
Visa Card 172,913,536 128,743,105 172,913,536 128,743,105
523,052,175 403,552,585 523,052,175 403,552,585
17.2 Home loan

Bangladesh Bank refinance loan 37,345,459 68,680,888 37,345,459 68,680,888
Commercial loan 978,032,409 493,985,029 978,032,409 493,985,029
Staff loan 15,393,438 11,544,121 15,393,438 11,544,121
1,030,771,307 574,210,038 1,030,771,307 574,210,038
17.3 Personal loan
Loan against deposit 565,047,664 20,427,756 565,047,664 20,427,756
Staff loan 26,808,734 10,898,218 26,808,734 9,573,713
Term loan 10,631,347 395,687,822 9,452,304 395,687,822
602,487,745 427,013,795 601,308,702 425,689,291
18. Interest expenses on deposits and borrowings
Other than Bangladesh Bank
Bank overdraft 106,080,475 79,171,499 106,080,475 76,882,259
Call loan 58,800,528 60,888,472 58,800,528 60,888,472
Short term loan 503,636,025 193,066,734 503,636,025 193,066,734
Term deposits 3,662,132,401 2,966,465,005 3,662,132,401 2,970,681,267
Term loan- commercial bank 309,698,264 428,516,617 12,915,303 27,691,582
Zero Coupon Bond 82,312,231 187,941,863 82,312,231 187,941,863
Commercial paper 61,875,000 - 61,875,000 -
4,784,534,924 3,916,050,190 4,487,751,963 3,517,152,178
Bangladesh Bank
Bangladesh Bank REPO - - - -
Term loan- Bangladesh Bank 54,305,944 48,029,138 54,305,944 48,029,138
54,305,944 48,029,138 54,305,944 48,029,138
4,838,840,868 3,964,079,328 4,542,057,908 3,565,181,315

19. Income from investment
See accounting policy in note (2.33.5)
Commercial paper 36,363,889 80,486,354 36,363,889 80,486,354
Coupon income from treasury bond - 649,711 - 649,711
Dividend income 107,104,435 155,628,524 272,556,701 67,820,926
Income from investment in share (Capital gain) 770,754,162 246,762,009 320,374,532 46,831,610
914,222,486 483,526,596 629,295,121 195,788,600
20. Commission, exchange and brokerage income
See accounting policy in note (2.33.8)
Brokerage commission 1,134,600,280 556,565,866 - -
Underwriting commission 1,401,250 4,293,551 - -
1,136,001,530 560,859,417 - -
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21. Other operational income
See accounting policy in note (2.33.6),(2.33.7),(2.33.8),(2.33.9), (2.21.6) and (2.34)
Lending finance
Portfolio and issue management fee 41,595,472 35,697,750 - -
Write off recovery 6,996,674 12,250,000 6,996,674 12,250,000
Membership fees of credit card 35,964,100 21,185,600 35,964,100 21,185,600
Other income from credit card 115,196,815 78,328,932 115,196,815 78,328,932
Fees and documentations (Note-21.1) 392,229,412 252,669,035 392,229,412 252,669,035
591,982,473 400,131,316 550,387,001 364,433,566
Others
Advertisement 130,717,503 95,371,440 - -
Circulation 12,353,621 10,604,270 - -
Late payment charge-factoring 997,443 908,022 997,443 908,022
Corporate finance fees 11,046,696 7,389,500 300,000 -
Foreign exchange gain/(loss) 9,496 (4,926) 9,496 (4,926)
Income from CDBL 21,884,805 21,617,332 - -
Income from research project - 1,500,000 - -
Income from unit fund operation 11,497,244 5,764,725 - -
Miscellaneous 6,097,117 3,443,677 4,538,696 2,060,097
Profit on sale of fixed asset 2,946,099 3,106,988 (149,469) 751,630
Round Table Conference 1,670,845 2,146,000 - -
Redemption income against mortgage property 105,000 - 105,000 -
Scrap sales 3,133,984 2,537,144 - -
Settlement fee 48,573,547 43,175,650 - -
Sponsorship 5,872,157 1,943,043 - -
Management fees - - 4,750,000 -
Good borrower incentive 5,578,584 - 5,578,584 -
262,484,141 199,502,864 16,129,750 3,714,822
854,466,614 599,634,180 566,516,751 368,148,389

21.1 Fees and documentations
Lending finance
Lease finance 4,456,082 8,306,257 4,456,082 8,306,257
Revolving credit -secured 10,000 3,379,621 10,000 3,379,621
Short term loan 6,747,533 5,262,537 6,747,533 5,262,537
Term loan 17,077,348 9,722,822 17,077,348 9,722,822
Term loan syndication finance 18,012,154 137,508 18,012,154 137,508
Work order finance 266,369 187,500 266,369 187,500
Zero coupon bond - 586,957 - 586,957
Auto loan 32,459,962 17,314,442 32,459,962 17,314,442
Credit card 136,049,302 105,219,449 136,049,302 105,219,449
Home loan 68,324,213 39,177,996 68,324,213 39,177,996
Personal loan 50,273,621 26,453,803 50,273,621 26,453,803
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2017 2016 2017 2016
Taka Taka Taka Taka
SME finance 41,658,053 24,778,158 41,658,053 24,778,158
Emerging and commercial 16,894,775 12,141,985 16,894,775 12,141,985
392,229,412 252,669,035 392,229,412 252,669,035
22. Salary and allowances

See accounting policy in note (2.35.1) and (2.36)
Salary and allowances 1,160,453,415 870,360,251 701,412,072 557,914,991
Provident fund contribution 32,125,177 26,406,706 15,724,907 13,326,002
Festival bonus 57,954,902 40,809,065 49,611,648 40,809,065
Gratuity fund 49,611,648 49,772,590 28,692,280 22,794,378
1,300,145,142 987,348,613 795,440,906 634,844,436
23. Rent, taxes, insurance, electricity etc.
Electricity 26,692,224 22,422,045 16,310,356 12,630,542
Insurance premium 30,583,036 22,563,315 22,592,350 15,496,175
Office rent 163,286,813 142,081,118 112,634,369 96,580,666
220,562,073 187,066,477 151,537,075 124,707,382
24. Legal and professional fees 33,424,026 30,013,397 30,932,570 23,863,346

25. Postage, stamp, telecommunication etc.
Postage and courier 3,942,543 2,432,624 3,539,224 2,190,920
Stamp charges 3,172,813 1,840,826 3,138,055 1,811,836
Telephone bill 21,704,224 16,364,702 15,678,167 10,984,604
28,819,579 20,638,151 22,355,446 14,987,359
26. Stationery, printing, advertisement
Advertisement 31,626,373 22,287,951 28,947,476 20,246,961
Printing and stationery 34,408,929 25,197,795 23,186,830 17,496,808
66,035,302 47,485,747 52,134,306 37,743,769
27. Managing director's salary and allowance
Salary and allowances 9,833,333 13,000,000 9,833,333 13,000,000
Provident fund contribution 558,333 804,000 558,333 804,000
Festival bonus - 1,340,000 - 1,340,000
Gratuity fund 335,000 2,345,000 335,000 2,345,000
10,726,667 17,489,000 10,726,667 17,489,000
28. Director fees and expenses
Board meeting and audit committee attendance fees 2,387,300 2,591,389 752,000 736,000
Other financial benefits - - - -
2,387,300 2,591,389 752,000 736,000
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2017 2016 2017 2016
Taka Taka Taka Taka
29. Audit fees

See accounting policy in note (2.35) 1,092,500 1,227,625 575,000 718,750
30. Repairs, maintenance and depreciation
Depreciation 152,867,828 97,747,605 109,033,809 64,104,605
Repairs and maintenance 6,347,819 6,961,749 5,379,139 3,237,081
Software maintenance 24,186,257 18,769,038 16,793,949 12,313,345
183,401,905 123,478,392 131,206,897 79,655,031
31. Other expenses
AGM and related expenses 3,981,815 699,174 3,913,348 659,174
Bank charges 3,617,222 2,814,018 2,212,910 1,393,668
Bkash commission 321,609 202,438 321,609 202,438
Business promotion 68,774,642 58,037,946 40,360,925 33,422,079
CDBL fee 47,246,348 26,243,377 485,201 912,826
CIB Charge 7,556,260 5,145,710 7,556,260 5,145,710
Commission on bank guarantee 12,863,244 6,566,590 - -
Computer accessories 699,202 553,029 675,137 517,414
Contact point verification fees 6,207,766 6,157,823 6,207,766 6,157,823
Conveyance 8,799,890 5,993,548 8,485,151 5,919,148
Cost of Newspaper, P. S Plates & Polyester film 23,830,946 21,900,083 - -
Credit card accessories 5,109,259 2,747,108 5,109,259 2,747,108
Documentation fee 1,047,951 298,660 31,183 177,740
Donation and miscellaneous expenses 846,299 448,768 692,799 307,158
Educational expense reimbursements 162,329 403,737 115,607 398,358
Entertainment 14,177,798 10,425,639 6,553,627 3,940,062
Excise duty 1,861,000 1,238,027 1,827,000 1,150,527
Factory overhead 73,174,707 71,266,643 - -
Fair and conference 1,070,922 1,530,243 - -
Fuel expense 3,025,929 2,930,522 1,615,912 1,636,215
Hawla charges 926,578 847,498 - -
HR event 2,810,760 1,845,981 2,810,760 1,845,981
Internet and e-mail 20,957,343 18,058,655 8,458,133 5,924,832
Laga charges 82,947,130 38,156,413 - -
LB foundation 22,009,465 12,590,284 13,664,551 10,828,830
Loss on sales of fixed asset 3,165,139 1,131,245 2,954,170 538,610
Marketing expenses 141,335,543 81,753,160 141,335,543 81,753,160
Master Card-Stand By Letter of Credit issuance charge 989,063 1,019,197 989,063 1,019,197
Master Card Consolidated Billing System charges 31,705,028 18,720,526 31,705,028 18,720,526
Meeting expense 3,038,745 2,648,599 3,038,745 2,648,599
Membership and regulatory fees 9,350,392 16,686,515 4,139,617 13,061,237
Networking charge 272,924 294,357 - -
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2017 2016 2017 2016
Taka Taka Taka Taka
News paper and periodicals 1,163,693 1,203,819 219,400 157,888

Office maintenance 69,727,833 51,510,373 51,965,175 37,621,014
Other expenses 93,802 117,229 - -
Other operational expenses credit card 20,279,238 16,346,240 20,279,238 16,346,240
Recovery commission 800,842 1,214,778 800,842 1,214,778
Recruitment expense 787,338 782,073 786,338 780,773
Selling & distribution expenses 11,194,255 6,338,716 - -
SMS service charge 3,926,778 1,329,605 3,926,778 1,329,605
Staff welfare 1,579,493 956,577 1,579,493 956,579
Subscription 6,707,955 153,478 - -
Training 15,993,211 11,425,699 12,740,832 8,956,877
Travelling 38,231,574 31,036,073 29,310,157 27,040,249
Vehicle maintenance/registration 48,168,976 38,307,020 20,306,134 17,201,880
Water and sewerage bill 2,047,332 1,757,387 1,170,248 1,039,821
824,585,567 581,834,581 438,343,936 313,674,123
32. Provisions for loans, investments and other assets
Provisions for leases and loans 248,441,162 199,224,797 248,441,162 199,224,797
General provision 85,665,893 92,864,546 85,665,893 92,864,546
Specific provision 162,775,268 106,360,251 162,775,268 106,360,251
Provision for margin loan 36,766,605 313,531,665 - -

Provision for diminution in value of investments (76,109,546) (117,107,133) - (123,560,860)
Specific provision for other assets (2,150,000) - (2,910,000) -
206,948,220 395,649,328 245,531,162 75,663,937
33. Provision for tax made during the year
Current tax expense 334,274,885 148,304,531 44,599,710 35,281,610

Deferred tax expense/ (income) 3,246,722 2,714,954 - -
337,521,607 151,019,485 44,599,710 35,281,610
34. Earnings Per Share (EPS)
Earning attributable to ordinary shareholders 1,898,845,450 795,521,340 1,352,790,507 1,072,054,172
Number of ordinary shares outstanding (Note - 34.1) 318,250,941 318,250,941 318,250,941 318,250,941
Basic earnings per share (Restated- prior year) 5.97 2.50 4.25 3.37
34.1 Number of ordinary shares outstanding

Balance on 01 January (Restated- prior year) 276,739,949 276,739,949 276,739,949 276,739,949
Bonus issued 41,510,992 41,510,992 41,510,992 41,510,992
318,250,941 318,250,941 318,250,941 318,250,941
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35 Segment report
35.1 Basis for segmentation

The Group has the following four strategic divisions, which are reportable segments. These divisions offer different products and services,
and are managed separately based on the Group’s management and internal reporting structure.

Reportable Segments Operations
Fees based services include Credit Card Membership Fees, Loan
processing fees etc.
Core Financing Business Fund based services include Lease Finance, Term Finance, Real Estate
Finance, Hire Purchase, Credit Card Operation, SME, Auto loan, Per-
sonal Loan, Emerging and Commercial, Syndication Finance, Revolving
Credit, Loan against Deposit, and Staff Loan etc.
Act as a member of Dhaka Stock Exchange Limited and Chittagong
Stock Exchange Limited to carry on the business of brokers or dealers
Brokerage Business in stocks, shares and securities, commercial papers, bonds, debentures,
debentures stocks, foreign currencies, treasury bills and/or any
financial instruments.
Investment Business Trading, margin loan and corporate finance activities
Asset Management Business Fund management activities
The Group’s Management Committee reviews internal management reports from each segment at least monthly.
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35.2. Information about reportable segments

Information related to each reportable segment is set out below. Segment profit before tax, as included in internal management reports
reviewed by the Group’s management committee, is used to measure performance because management believes that this information
is the most relevant in evaluating the results of the respective segments relative to the other entities that operate within the same
industries. Inter-segment pricing is determined on an arm’s length basis.
Amount in Taka
For the year 2017
Particulars Asset
Core Financing Brokerage Investment
Management Consolidated
Business Business Business
Business
Revenue from external customers
Interest revenue 6,350,551,049 595,106,033 130,098,348 333,855 7,076,089,286
Revenue from investment 369,662,561 364,010,592 142,599,682 37,949,651 914,222,486
Commission, exchange and brokerage income - 1,134,600,280 1,401,250 - 1,136,001,530
Other operational income 561,766,751 179,741,105 101,461,514 11,497,244 854,466,614
Total revenue from external customers 7,281,980,361 2,273,458,010 375,560,795 49,780,750 9,980,779,915
Revenues from transactions with other

operating segments of the same entity :
Interest revenue 272,621,168 - - - 272,621,168
Revenue from investment 259,632,560 - - - -
Other operational income 4,750,000 10,119,756 - - 14,869,756
Total revenues from transactions with other
537,003,728 10,119,756 - - 287,490,923
operating segments of the same entity
Total segment revenue 7,818,984,089 2,283,577,765 375,560,795 49,780,750 10,268,270,839
Interest expenses
Segment interest expenses 4,542,057,908 296,297,211 - 485,750 4,838,840,868
- 22,896,347 249,724,821 - 272,621,168
Total segment expenses 4,542,057,908 319,193,558 249,724,821 485,750 5,111,462,036
Operating expenses
Segment operating expenses 1,514,851,238 890,681,482 79,888,257 32,891,255 2,518,312,233
10,119,756 - - 4,750,000 14,869,756
Total segment operating expenses 1,524,970,994 890,681,482 79,888,257 37,641,255 2,533,181,988
Depreciation and amortization 109,033,809 35,575,056 4,060,264 4,198,699 152,867,828
Net operating income 1,642,921,379 1,038,127,670 41,887,452 7,455,045 2,470,758,986
Material non-cash items other than
depreciation and amortisation
Provision for leases, loans and
245,531,162 (76,109,546) 37,526,605 - 206,948,220
advances/investments
Profit before tax and reserve 1,397,390,217 1,114,237,216 4,360,848 7,455,045 2,263,810,766
Provision for tax made during the year 44,599,710 288,059,813 - 1,615,362 334,274,885
Deferred tax (expense)/ Income - 4,312,573 - (1,065,851) 3,246,722
44,599,710 292,372,386 - 549,511 337,521,607
Net profit after tax 1,352,790,507 821,864,830 4,360,848 6,905,534 1,926,289,159
Total segment assets 78,247,606,210 10,792,052,131 2,989,287,609 1,042,652,712 93,071,598,662
Inter segmental assets 2,598,171,054 - - - 2,598,171,054
Net segment assets 75,649,435,156 10,792,052,131 2,989,287,609 1,042,652,712 90,473,427,608
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Amount of addition to non-current fixed assets 187,714,299 300,888,952 3,551,669 631,575 492,786,495
Segment capital employed 7,267,806,392 4,639,841,096 446,110,205 1,020,925,910 13,374,683,604
Segment liability 70,979,799,818 5,944,792,759 152,424,625 21,726,802 77,098,744,005
Inter segmental liabilities - 207,418,276 2,390,752,778 - 2,598,171,054
Total segmental liability 78,247,606,210 10,792,052,131 2,989,287,609 1,042,652,712 93,071,598,663
Amount in Taka
For the year 2016
Asset
Particulars Core Financing Brokerage Investment
Management Consolidated
Business Business Business
Business
Revenue from external customers
Interest revenue 5,106,697,946 454,317,319 98,711,229 1,817,751 5,661,544,246
Revenue from investment 195,788,600 196,151,360 67,043,121 24,543,515 483,526,596
Commission, exchange and brokerage income - 561,932,464 4,293,551 - 566,226,015
Other operational income 368,148,389 139,015,893 86,705,174 5,764,725 599,634,180
Total revenue from external customers 5,670,634,934 1,351,417,037 256,753,074 32,125,991 7,310,931,037
operating segments of the same entity :
Interest revenue 325,965,295 - - 4,216,262 330,181,557
Revenue from investment - 9,901,875 - - 9,901,875
Total revenues from transactions with other

325,965,295 9,901,875 - 4,216,262 340,083,432
Total segment revenue 5,996,600,229 1,361,318,912 256,753,074 36,342,254 7,651,014,469

Interest expenses
Segment interest expenses 3,560,965,053 398,395,344 2,340,195 2,378,736 3,964,079,328
4,216,262 29,788,215 296,177,080 - 330,181,557
Total segment expenses 3,565,181,315 428,183,560 298,517,275 2,378,736 4,294,260,885
Operating expenses
Segment operating expenses 1,174,412,716 636,316,154 69,011,240 27,052,256 1,906,792,366
Inter segment operation expenses 9,901,875 - - - 9,901,875
Total segment operation expenses 1,184,314,591 636,316,154 69,011,240 27,052,256 1,916,694,241
Depreciation and amortization 64,104,605 27,014,891 3,614,115 3,013,994 97,747,605
Net operating income 1,182,999,719 269,804,307 (114,389,556) 3,897,268 1,342,311,738
Material non-cash items other than
depreciation and amortisation
Provision for leases, loans and advances /
75,663,937 7,490,868 313,531,665 (1,037,141) 395,649,328
investments
Profit before tax and reserve 1,107,335,782 262,313,439 (427,921,220) 4,934,409 946,662,410
Provision for tax made during the year 35,281,610 110,728,820 - 2,294,102 148,304,531
Deferred tax (expense)/ Income - 2,738,065 - (23,111) 2,714,954
35,281,610 113,466,885 - 2,270,991 151,019,485
Net profit after tax 1,072,054,173 148,846,554 (427,921,220) 2,663,419 795,642,925

Total segment assets 57,622,494,692 9,870,999,395 3,250,767,211 983,064,122 71,727,325,420
Inter segmental assets 2,766,873,714 - - - 2,766,873,714
Net segment assets 54,855,620,978 9,870,999,395 3,250,767,211 983,064,122 68,960,451,706
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Amount of addition to non-current assets 186,414,731 32,760,764 9,848,962 15,100,058 244,124,515

Segment capital employed 6,216,729,301 4,140,537,360 436,703,014 963,419,895 11,757,389,571
Segment liability 51,452,676,540 5,488,794,881 283,811,293 19,644,227 57,244,926,941
Inter segmental liabilities - 241,667,154 2,525,206,559 - 2,766,873,714
Total segmental liability 57,669,405,842 9,870,999,395 3,245,720,867 983,064,122 71,769,190,226
35.2. Information about reportable segments (continued)

Revenue
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36. Group subsidiaries
36.1 List of significant subsidiaries

The table below provides details of the significant subsidiaries of the Group
Place of
Sl. Name of the subsidiaries Name of Auditors Ownership Interest
business
1 LankaBangla Securities Limited Ahmed Zaker & Co. Bangladesh 96.5431606%
2 LankaBangla Investments Limited Sayful Shamsul Alam & Co. Bangladesh 99.9999964%
3 LankaBangla Asset Management Company Limited Sayful Shamsul Alam & Co. Bangladesh 99.9999980%
4 LankaBangla Information System Limited Sayful Shamsul Alam & Co. Bangladesh 96.3500742%
5 BizBangla Media Limited Ahmed Zaker & Co. Bangladesh 77.2345285%
36.2 Financial support given to structured entities
All the transactions with or among the subsidiaries are arms length transactions and are properly disclosed in the related
party disclosure (Note-36). Other than those no other financial support has been given to any of the subsidiaries in the period
of 2017.
36.3 Significant restrictions
The Group does not have any significant restrictions on its ability to access or use its assets and settle its liabilities other
than those resulting from the supervisory framework within which financial subsidiaries operate. The regulatory frameworks
require financial organizations to keep certain level of regulatory capital and liquid assets, limit their exposure to other parts
of the Group and comply with other ratios.
36.4 NCI in subsidiaries
Profit allocated to NCI

Name % of NCI 2017 2016
Taka Taka
LankaBangla Securities Limited 3.4568394% 28,558,557 6,091,637
LankaBangla Investments Limited 0.0000036% 0.16 (15)
LankaBangla Asset Management Company Limited 0.0000020% 0.15 5
LankaBangla Information System Limited 3.6499258% 26,753 28,725
BizBangla Media Limited 22.7654715% (1,141,601) (5,998,767)
Total 27,443,709 121,585
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37.00 Related party disclosure

i) Names of the Directors together with list of entities in which they have interest are stated below:
Status in
Name of the firms/companies having interest as proprietor,
Sl. No. Name of Director LankaBangla
partner, director, managing agent, guarantor, employee etc.
Finance Limited
1 Air Line Cargo Resources Limited
2 Arrow Aviation Limited
3 Anyeshan Limited
4 AVS Cargo Management Services Ltd.
5 APS Logistics International Limited
6 BizBangla Media Limited
7 Bengal Meat Processing Industries Limited
8 Colloid Enterprises Limited
9 Cross Freight Lines Limited
10 Cross Freight Limited
11 Datafort Limited
12 Expo Express Services Limited
13 Expo Holdings (BD) Limited
14 Freight Care Aviation Services Limited
15 First Forwarding Limited
16 Freight Options Limited
17 Global Aviation Services Limited
18 Interairsea Limited
19 Innoweb Limited
20 Infosapex Limited
21 LankaBangla Investments Limited
22 LankaBangla Information System Limited
23 LankaBangla Securities Limited
24 S.G Logistics (Pvt.) Limited
25 Standard Paper Products Limited
26 STS Educational Group Limited
27 STS Holdings Limited
28 Swift Logistics Services Limited
29 The M & M Limited
30 Tropica Garments Limited
31 UCL Logistics Limited
32 Uniworld Logistics Limited
33 Voytech Limited
34 WAC Logistics Limited
35 Wings Express Limited
36 Wings Logistics Limited
37 Wings Ocean Freight Limited
38 Wings Aviation Limited
39 Wings Spence Aviation Limited
40 Wings Tours & Travels Limited
41 Wings Classic Tours & Travels Limited
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Status in
Finance Limited
Mr. I.W. Senanayake
Director N/A
2) (Representing Sampath Bank PLC)
Mr. M. Y. Aravinda Perera
3) Director N/A
Mr. M. Fakhrul Alam
4) Director N/A
1 Allied Aviation Bangladesh Limited
5) Mr. Mahbubul Anam Director 2 Air Line Cargo Resources Limited
3 Airlines Services Limited
4 Aramex Dhaka Limited
5 Aeroness International
6 Anyeshan Limited
7 Aristeus Agriculture Limited
8 BizBangla Media Limited
9 Bengal Meat Processing Industries Limited
10 Bollore Logistics Bangladesh Limited
11 Cargo Centre Limited
12 Colloid Enterprises Limited
13 Datafort Limited
14 Expo Freight Limited
15 Expo Express Services Limited
16 Eastern Cables Limited
17 Expo Holdings (BD) Limited
18 Freight Care Aviation Services Limited
19 First Forwarding Limited
20 Global Aviation Services Limited
21 Interairsea Limited
22 Innoweb Limited
23 Infosapex Limited
24 LankaBangla Securities Limited
25 LankaBangla Information System Limited
26 Orchid Air Limited
27 Masco International Limited
28 S.G Logistics (Pvt.) Limited
29 Standard Paper Products Limited
30 STS Educational Group Limited
31 STS Holdings Limited
32 The M & M Limited
33 Tropica Garments Limited
34 UCL Logistics Limited
35 Voyager Airlines Limited
36 Voytech Limited
37 WAC Logistics Limited
38 Wings Spence Aviation Limited
39 Wings Classic Tours & Travels Limited
40 Wings Express Limited
41 Wings Ocean Freight Limited
1 Royal Park Residence
6)_ Mrs. Aneesha Mahial Kundanmal Director
2 GDS Chemical Bangladesh Limited
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Status in
Finance Limited
7) Mr. Tahsinul Huque Director N/A
8) Mr. Al Mamoon Md. Sanaul Huq Independent 1 LankaBangla Securities Limited
Director
2 LankaBangla Investments Limited
3 LankaBangla Asset Management Company Limited

9) Mrs. Zaitun Sayef Independent
N/A
Director
ii) Significant contracts where Company is a party and wherein Directors have interest during the period of 31 NIL
December 2017
iii) Shares issued to Directors and Executives without consideration or exercisable at a discount NIL
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iv) Related party transactions
The company in normal course of business has entered into transactions with other individuals/ entities that fall within definition of related party contained in Bangladesh
Accounting Standards-24 (Related Party Disclosures) as noted below:
Amount of transaction during Outstanding

Name of Related Percentage of Outstanding Nature of
SL No. Relationship the year 2017 Outstanding 2017 balance
Party Holding 2016 Transaction
present in note
Debit Credit
Concern related
1 STS Holdings Limited - 106,005,666 156,038,681 78,029,352 27,996,338 TDR 11.1

to Directors
Colloid Enterprises Concern related
2 - 9,971,522 89,254 752,541 10,634,809 TDR 11.1
Limited to Directors
Global Aviation Concern related
3 - 16,000,000 1,180,000 1,180,000 16,000,000 TDR 11.1
Services Limited to Directors
Concern related
4 WAC Logistics Ltd. - 2,300,000 22,400 8,184,000 10,461,600 TDR 11.1
to Directors
WINGS SPENCE Concern related
5 - - 839,980 124,534,805 123,694,824 TDR 11.1
AVIATION LIMITED to Directors
LankaBangla Subsidiary
6 96.49 241,667,154 23,150,855 57,399,733 207,418,276 Short term loan 7.1
Securities Limited Company
LankaBangla Subsidiary
7 99.99 2,525,206,559 249,764,821 384,218,602 2,390,752,778 Short term loan 7.1
Investment Limited Company
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LankaBangla
Disclosed
v) Disclosure of transaction regarding Directors and their related concerns
above (iv)
vi) Lease agreement made with the Ex-Sponsor Director and Existing Depositor Director NIL
vii) Investment in the Securities of Directors and their related concern NIL
38. Audit committee disclosures
In compliance with the requirement of Bangladesh Bank’s Circular No. DFIM-13, dated October 26, 2011 and Notification No.
SEC/CMRRCD/2006-158/134/admin/44, dated August 07, 2012 of Bangladesh Securities & Exchange Commission (BSEC) Audit
Committee of LankaBangla Finance Limited (LBFL) was re-constituted in 107th meeting of the Board of Directors held on October
23, 2017.
Sl. Status in the Status in the

Name of Member Educational Qualification
No. Organization Committee
B. Sc. (Hons) and M. Sc. in Applied Chemistry
Independent with post-graduate Diploma in Management
01 Mr. Al- Mamoon Md. Sanaul Huq Chairman
Director Accounting from Highbury College of
Technology, Portsmouth, UK.
02 Mr. Mohammed A. Moyeen Director Member B. Arch. from BUET
03 Mr. Mahabubul Anam Director Member B. Sc. Engineer from BUET
04 Mr. M. Fakhrul Alam Director Member MBA
Independent
05 Mrs. Zaitun Sayef Member B.Sc (Hons.) and MBA from IBA
Director
The Company Secretary is to act as Secretary of the Audit committee of the Board.
During the year 2017, the Audit Committee of the Board conducted 4 (four) meetings in which among other things, the following
issues were reviewed/discussed.
a) The integrity of the financial statements of LBFL and all subsidiaries;
b) The Company’s external auditor’s qualifications and independence,
c) The performance and effectiveness of the Company’s internal and external audits,
d) Internal controls and the measurement of operational risk, and
e) The compliance by the Company with legal and regulatory requirements.
f) Examine any matter relating to the financial and other connected to the Company.
g) Monitor all Internal and External Audit and Bangladesh bank’s Inspection Program.
h) Review the efficiency of Internal Control systems and procedures, in place.
i) Review the Quality of Accounting Policies and their adherence to Statutory and Regulatory Compliance.
j) Review the Company’s Annual Report and Accounts and Interim Financial Statements prepared for disclosure, before
submission to the Board.
k) Ensure that a well-managed sound financial reporting system is in place to provide timely reliable information to the
Board of Directors, Regulatory Authorities, Management and all other stakeholders.
l) Ensure Company’s policies are firmly committed to the highest standards of good corporate governance practices and
operations conform to the highest ethical standards and in the best interests of all stakeholders.
39. Impact of inflation and changing prices
Financial Institutions are affected differently by inflation than those of industrial ventures. While industrial and manufacturing
companies generally have significant investments in inventories and fixed assets, financial institutions ordinarily do not have such
investment. As a result, financial institutions are generally in a better position than industrial ventures to respond to inflationary
trends by monitoring the spread between interest cost and interest income yields through adjustments of maturities and interest
rates of assets and liabilities.
Financial statements presented herein have been prepared in accordance with International Accounting Standards and
International Financial Reporting Standards as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), which
required the measurement of the financial position and operating results in terms of historical costs. However, in some cases,
particular BAS/BFRS specifically suggests to measure some assets/liabilities at fair value. Such as, BAS 39 suggests to measure
investment in tradable securities at its fair value by crediting shareholders’ equity.
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40. Others
a) Board meeting and directors’ remuneration
Each director is entitled to receive Tk. 8,000 for attending each Board Meeting. No other remuneration or special payment
was made to the directors for attending the Board Meetings or otherwise during the year 2017. Nothing is due from
any director of the Company as on the date of closing the accounts. During the year under audit six meetings of Board of
Directors were held. Details are as under:
Sl. Number of
Meeting No. Date of Meeting
No. presences
01 103rd Board meeting February 13, 2017 8
02 104th Board meeting May 14, 2017 7
03 105th Board meeting July 26, 2017 7
04 106th Board meeting August 24, 2017 6
05 107th Board meeting October 23, 2017 9
07 108th Board meeting November 21, 2017 7
Notes:
• Director who could not attend meetings were granted leave of absence by the Board.
• Mr. Mirza Ejaz Ahmed has resigned from the Board of LankaBangla Finance Limited w. e. f. August 5, 2017.
b) Executive Committee (EC) meeting and directors' remuneration
Each director is entitled to receive Tk. 8,000 for attending each meeting of the Executive Committee. No other remuneration or
special payment was made to the directors for attending the meetings or otherwise during the year 2017. During the year under
audit eleven meetings of the Executive Committee were held. Details are as under:
Sl.
Meeting No. Date of Meeting Number of presences
No.
01 63rd EC meeting January 16, 2017 3
02 64th EC meeting February 27, 2017 4
03 65th EC meeting March 22, 2017 3
04 66th EC meeting May 9, 2017 3
05 67th EC meeting May 31, 2017 3
06 68th EC meeting June 18, 2017 3
07 69th EC meeting July 12, 2017 3
08 70th EC meeting August 20, 2017 4
09 71st EC meeting October 15, 2017 3
10 72nd EC meeting October 30, 2017 4
11 73rd EC meeting December 14, 2017 4
Notes:
c) Audit Committee meeting and directors' remuneration
Each director is entitled to receive Tk. 8,000 for attending each meeting of the Audit Committee. No other remuneration or
special payment was made to the directors for attending the meetings or otherwise during the year 2017. During the year
under audit four meetings of Audit Committee were held. Details are as under:
Sl.
Meeting No. Date of Meeting Number of presences
No.
01 47th Audit Committee meeting February 09, 2017 3
02 48th Audit Committee meeting May 9, 2017 3
03 49th Audit Committee meeting July 20, 2017 3
04 50th Audit Committee meeting October 18, 2017 4
Notes:
• Mr. Mirza Ejaz Ahmed has resigned from the Board of LankaBangla Finance Limited w. e. f. August 5, 2017.
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d) Employees’ details
Year-2017 Year-2016
No. of employee received TK.3,000 per month 0 0
No. of employee received more than Tk.3,000 per month 832 673
832 673
e) Event after the Reporting Period

Dividend Information
The Board of Director in its 109th Meeting held on 13 February 2018 has recommended to the shareholders @7.5% of
Stock Dividend and @7.5% of Cash Dividend for the year ended 31 December 2017. This will be considered for approval of
shareholders at 21st Annual General Meeting (AGM) of the company scheduled to be held on 29 March 2018.
f) Capital expenditure commitment
There was no capital expenditure contracted but not incurred or provided for other than LankaBangla Tower amounting to
Tk. 25 crore (approx.) as at 31 December 2017. There was no other material capital expenditure authorized by the Board but
not contracted for as at 31 December 2017.
g) Foreign remittances
During the period 2017, the company remitted USD 701,650.07, GBP 5,982.20, SGD 6,822.00 and RS 536,000.00 (Total in
BDT 58,555,458.10) against Various Technical Service Fees to the Foreign Shareholders and training provider.
Sl # Purpose Pay to USD* GBP* SGD* RS* BDT

Various Training
01. Training Fee -2017 11,407.00 - 6,822.00 536,000.00 2,068,583.77
provider abroad
02. Annual Maintenance Fee TSYS Card Tech 45,782.57 - - - 3,742,160.97
03. Annual Service Fee TSYS Card Tech 13,712.30 5,982.20 - - 1,787,424.71
04. Additional License Fee TSYS Card Tech 55,500.00 - - - 4,602,975.65
Sampath Bank PLC 488,113.32 - - - 39,317,528.00
05. Dividend Payment
Mr. Tahsinul Huque 87,134.88 - - - 7,031,785.00
Total 701,650.07 5,982.20 6,822.00 536,000.00 58,550,458.10
*USD=United States Dollar
*GBP=Great Britain Pound
*SGD=Singapore Dollar
*RS= Indian Rupees
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i) Financial highlights
Key financial highlights of the Company are annexed as “Annexure-D”.
j) Interim financial statements
LankaBangla Finance Limited published its quarterly interim financial statements as requirement of the Bangladesh Securities
and Exchange Commission and as per BAS 34 “Interim Financial Reporting”.
Interim Reporting Period Publication Date

January to March (1st quarter ended) 15 May 2017
January to June (Half Year ended) 27 July 2017
January to September (3rd quarter ended) 24 October 2017
k) Change in and disagreement with Auditors

There were no changes and disagreement with the Auditors on accounting and financial disclosures.
l) Numerical presentation
Figures shown in the accounts have been rounded off to the nearest Taka. Previous year figures have been re-arranged where
necessary to conform to current year’s presentation.
m) General
i) All shares have been fully called up and paid up.
ii) Company Balances shown in the accounts are duly reconciled.
iii) No amount was spent by the Company for compensating any members of the board for special services rendered during
the period.
Dhaka, 13 February 2018
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Annexure -A
LANKABANGLA FINANCE LIMITED AND ITS SUBSIDIARIES
288
CONSOLIDATED FIXED ASSETS SCHEDULE

LankaBangla
As at 31 December 2017 Amount in Taka

COST DEPRECIATION Written
Balance Sales/ Balance Balance Charged Balance down value
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Particulars Addition during Adjustment
as at Adjustment as at Rate % as at during as at as at
the year during the year 31.12.2017
01.01.2017 during the year 31.12.2017 01.01.2017 the year 31.12.2017
I. Freeholds assets
Land 739,573,710 39,945,373 - 779,519,083 - - - - 779,519,083
Building 106,454,150 237,249,700 - 343,703,850 2.5 14,691,050 5,626,975 - 20,318,025 323,385,825

Furniture and Fittings 219,110,635 39,423,211 18,126,235 240,407,611 20 89,180,276 42,059,641 16,562,438 114,677,479 125,730,132
Office Equipment 189,758,111 38,503,571 25,532,712 202,728,970 20 132,699,361 27,418,921 36,261,781 123,856,501 78,872,469
IT Equipment 108,894,806 62,645,658 11,528,961 160,011,503 33.33 37,259,498 30,717,217 (5,378,369) 73,355,084 86,656,419
Office Renovation 75,550,920 25,989,507 2,326,505 99,213,922 20 45,374,784 12,940,902 2,326,505 55,989,181 43,224,741
Motor Vehicles 39,441,179 5,388,000 155,000 44,674,179 20 21,664,387 6,205,650 114,368 27,755,669 16,918,510
1,478,783,511 449,145,020 57,669,414 1,870,259,117 340,869,356 124,969,307 49,886,724 415,951,939 1,454,307,178
II. Intangible assets
Goodwill 234,143,286 - - 234,143,286 - - - - - 234,143,286
Systems and Software 167,031,089 26,277,066 - 193,308,155 25 118,878,529 23,626,643 (493,810) 142,998,982 50,309,173
401,174,375 26,277,066 - 427,451,441 118,878,529 23,626,643 (493,810) 142,998,982 284,452,459
III. Lease Hold Assets
Motor Vehicle 42,004,990 20,322,000 4,290,990 58,036,000 20 32,658,132 6,656,021 4,290,990 35,023,163 23,012,838
At 31 December 2017 1,921,962,876 495,744,086 61,960,404 2,355,746,558 492,406,017 155,251,971 53,683,904 593,974,084 1,761,772,475
As at 31 December 2016 Amount in Taka

COST DEPRECIATION Written
Sales/ Charged down value
Particulars Balance as at Addition during Balance as at Balance as at Adjustment Balance as at
Adjustment Rate % during as at
01.01.2016 the year 31.12.2016 01.01.2016 during the year 31.12.2016 31.12.2016
during the yearr the year
I. Freeholds assets
Land 686,921,231 52,652,479 - 739,573,710 - - - - 739,573,710
Building 106,454,150 - - 106,454,150 2.5 12,029,697 2,661,354 - 14,691,050 91,763,100
Furniture and Fittings 183,159,339 60,049,048 24,097,751 219,110,635 20 86,103,358 24,926,315 21,849,398 89,180,276 129,930,360
IT Equipment 59,031,158 52,464,042 2,600,394 108,894,806 33.33 22,021,968 17,467,855 2,230,325 37,259,498 71,635,308
Office Renovation 69,395,465 13,533,662 7,378,207 75,550,920 20 47,134,617 5,618,374 7,378,207 45,374,784 30,176,136
Motor Vehicles 36,540,144 10,511,085 7,610,050 39,441,179 20 22,527,167 4,163,435 5,026,215 21,664,387 17,776,792
1,310,550,139 220,451,808 52,218,436 1,478,783,511 309,986,739 77,223,070 46,340,453 340,869,356 1,137,914,155
II. Intangible assets and goodwill
Goodwill 234,143,286 - - 234,143,286 - - - - - 234,143,286
System Software 143,358,383 23,672,707 - 167,031,089 25 101,096,392 17,782,137 - 118,878,529 48,152,560
377,501,669 23,672,707 - 401,174,375 101,096,392 17,782,137 - 118,878,529 282,295,846
III. Lease Hold Assets
Motor Vehicle 43,605,030 - 1,600,040 42,004,990 20 28,720,419 5,537,753 1,600,040 32,658,132 9,346,858
At 31 December 2016 1,731,656,838 244,124,514 53,818,476 1,921,962,876 439,803,550 100,542,959 47,940,493 492,406,017 1,429,556,859
Annexure -B
SCHEDULE OF FIXED ASSETS
Amount in Taka
COST DEPRECIATION
Written
Particulars Sales/ down value as at
Balance as at Addition during Balance as at Balance as at Charged during Adjustment Balance as at
Adjustment Rate % 31.12.2017
01.01.2017 the year 31.12.2017 01.01.2017 the year during the yearr 31.12.2017
during the year
I. Freeholds assets
Land 739,573,710 39,945,373 - 779,519,083 - - - - 779,519,083
Furniture & Fittings 190,946,678 29,111,254 17,834,325 202,223,608 20 80,355,702 37,924,763 16,349,187 101,931,279 100,292,329
IT Equipment 106,638,494 62,108,655 11,503,961 157,243,188 33.33 35,926,102 30,200,008 (5,389,369) 71,515,479 85,727,710
Motor Vehicles 16,554,935 2,768,000 - 19,322,935 20 11,876,405 2,998,125 - 14,874,530 4,448,405
1,145,993,874 151,216,048 52,742,811 1,244,467,111 190,124,748 88,111,332 45,235,722 233,000,357 1,011,466,754
Systems and Software 82,215,183 24,375,842 - 106,591,025 25 42,955,051 17,985,256 (493,810) 61,434,117 45,156,908
III. Leaseholds Assets
Motor Vehicles 9,777,000 15,080,000 - 24,857,000 20 5,849,243 2,937,220 - 8,786,463 16,070,537
At 31 December 2017 1,237,986,057 190,671,890 52,742,811 1,375,915,135 238,929,041 109,033,809 44,741,912 303,220,937 1,072,694,198
Amount in Taka
COST DEPRECIATION
Written
Particulars Sales/ down value as at
Balance as at Addition during Balance as at Balance as at Charged during Adjustment Balance as at
Adjustment Rate % 31.12.2016
01.01.2016 the year 31.12.2016 01.01.2016 the year during the yearr 31.12.2016
during the year
I. Freeholds assets
Land 686,921,231 52,652,479 - 739,573,710 - - - - 739,573,710
Furniture & Fittings 159,437,491 44,885,873 13,376,685 190,946,678 20 72,226,584 21,211,879 13,082,761 80,355,702 110,590,976
IT Equipment 57,660,750 51,393,798 2,416,054 106,638,494 33.33 21,015,962 16,963,038 2,052,898 35,926,102 70,712,393
Motor Vehicles 16,407,945 146,990 - 16,554,935 20 10,330,703 1,545,702 - 11,876,405 4,678,530
998,883,632 167,334,856 20,224,614 1,145,993,874 155,540,050 53,906,831 19,322,133 190,124,748 955,869,126
Systems and Software 63,135,308 19,079,875 - 82,215,183 25 33,981,026 8,974,025 - 42,955,051 39,260,132
III. Leasehold Assets
Motor Vehicles 9,777,000 - - 9,777,000 20 4,625,494 1,223,749 - 5,849,243 3,927,757
At 31 December 2016 1,071,795,940 186,414,731 20,224,614 1,237,986,057 194,146,570 64,104,605 19,322,133 238,929,041 999,057,015
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Annual Integrated
Annexure -C
290
CLASSIFICATION OF LEASES, LOANS AND ADVANCES WITH PROVISIONS AND INTEREST SUSPENSES
LankaBangla
As on 31 December 2017 Amount in Taka

Balance Outstanding Base for Provision
Amount of Interest in Suspense
Unclassified (UC) Classified Sub
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Products Total Doubtful Bad/ Loss Provision
Sub Standard SMA Standard
Standard Standard-SME SMA Doubtful (DF) Bad/ Loss (BL) (DF) (BL) Required SMA Classified Total
(SS) (SS)
Corporate Finance
Lease finance 3,382,638,157 3,000,780,317 31,511,055 1,355,467 20,075,010 328,916,308 30,028,093 739,866 5,522,833 190,869,625 225,288,222 1,482,962 72,230,104 73,713,066
Secured overdraft 6,085,285 6,085,285 - - - - - - - - 60,853 - - -

Short term finance 4,419,891,075 4,227,969,760 - - 191,920,298 1,017 - - 149,586,661 - 117,073,528 - 42,333,637 42,333,637
Short term loan to subsidiaries 2,598,171,054 2,598,171,054 - - - - - - - - 25,981,711 - - -
Term loan 8,054,756,449 7,569,648,445 210,880,421 116,883,711 22,232,084 135,111,788 197,680,137 102,841,881 5,445,171 35,493,226 144,364,679 13,200,283 47,857,875 61,058,158
Term loan syndication finance 449,615,282 449,615,282 - - - - - - - - 4,496,153 - - -
Work order finance 3,454,296 - - - - 3,454,296 - - - 1,704,296 1,704,296 - -
SUB-TOTAL 18,914,611,598 17,852,270,144 242,391,475 118,239,179 234,227,392 467,483,408 227,708,230 103,581,747 160,554,666 228,067,147 518,969,442 14,683,245 162,421,616 177,104,861
Retail Finance
Auto Loan 6,128,136,112 5,812,527,155 - 260,262,835 34,459,114 1,239,931 19,647,077 255,279,939 33,186,325 1,120,581 17,442,214 95,529,038 4,982,896 3,597,002 8,579,898
Home Loan 12,249,994,362 11,752,761,489 - 182,706,873 20,387,552 39,693,039 254,445,409 163,487,713 328,165 3,059,086 15,177,896 142,475,072 19,219,160 68,666,917 87,886,078
Credit Cards 2,878,358,344 2,546,738,915 - 120,188,796 19,413,016 13,309,875 178,707,742 106,313,278 16,766,980 11,479,078 170,136,677 210,012,665 13,875,518 13,075,645 26,951,163
Personal Loan 5,793,776,914 5,525,326,521 - 164,768,444 66,104,550 19,274,931 18,302,467 160,957,380 62,416,293 16,477,856 14,773,205 98,796,526 3,811,065 9,473,814 13,284,879
SUB-TOTAL 27,050,265,732 25,637,354,080 - 727,926,949 140,364,232 73,517,776 471,102,695 686,038,310 112,697,763 32,136,601 217,529,991 546,813,301 41,888,639 94,813,378 136,702,017
SME
Term loan 8,626,401,633 - 8,248,360,876 88,792,768 111,753,206 26,604,151 150,890,634 86,321,659 46,733,199 8,176,066 81,221,109 119,592,767 2,471,109 38,153,296 40,624,405
Lease finance 1,504,813,529 - 1,372,853,917 107,952,677 5,391,854 - 18,615,081 97,974,331 - - 18,278,042 26,608,893 9,978,346 221,805 10,200,151
Auto loan 2,192,624,134 - 2,113,464,283 75,654,057 1,108,757 - 2,397,037 74,640,772 1,029,162 - 1,974,118 11,195,649 1,013,285 502,515 1,515,800
Emerging and commercial 1,939,520,603 - 1,936,308,966 1,828,096 1,571 - 1,381,970 1,588,088 881 - 1,174,341 6,094,694 275,262 208,319 483,582
Home Loan 789,737,623 - 731,120,277 - - - 58,617,346 - - - - 1,827,801 - 14,994,994 14,994,994
Real state developer finance 34,334,968 - 4,739,699 29,595,269 - - - 27,858,284 - - - 1,404,763 1,736,985 - 1,736,985
Secured Overdraft 29,634,345 - 29,634,345 - - - - - - - - 74,086 - - -
Short term loan 706,176,417 - 683,048,762 23,127,655 - - - 20,869,062 - - - 2,751,075 2,258,593 - 2,258,593
Syndication finance 107,802,607 - 107,802,607 - - - - - - - - 269,507 - - -
Work order finance 17,664,300 - - - - - 17,664,300 - - - 7,764,300 7,764,300 - - -
SUB-TOTAL 15,948,710,159 - 15,227,333,731 326,950,521 118,255,388 26,604,151 249,566,367 309,252,196 47,763,241 8,176,066 110,411,910 177,583,535 17,733,581 54,080,929 71,814,510
Total 61,913,587,489 43,489,624,223 15,227,333,731 1,297,268,946 376,858,799 334,349,319 1,188,152,471 1,222,998,736 264,042,751 200,867,332 556,009,048 1,243,366,277 74,305,465 311,315,924 385,621,388
* Segregation of outstanding (Unclassified and Classified), base for provision, provision and interest suspense have been calculated based on Bangladesh Bank guidelines
* Base for provision for SMA has been calculated according to total outstanding minus interest suspense
* Base for provision for SS, DF and BL have been calculated according to total outstanding minus interest suspense minus eligible securities
* Provision has been calculated according to below rates of Bangladesh Bank guidelines
Particulars Percentage
Standard except SME Standard (UC) 1.00%
Standard-SME (UC) 0.25%
Special Mention Account (SMA) 5.00%
Sub Standard (SS) 20.00%
Doubtful (DF) 50.00%
Bad/ Loss (BL) 100.00%
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Annual Integrated
HIGHLIGHTS Report 2017
(As per Bangladesh Bank guidlines)

Annexure-D
Amount in taka (million)
Sl no. Key indicators
2017 2016 2017 2016
1 Paid-up capital 3,182.51 2,767.40 3,182.51 2,767.40
2 Total capital 8,327.00 6,686.61 7,267.81 6,169.82
3 Capital surplus 1,423.93 1,374.51 1,195.67 1,613.61
4 Total assets 85,442.72 64,043.51 78,247.61 57,622.49
5 Total deposits 51,675.16 40,148.49 51,675.16 40,148.49
6 Total loans, advances and leases 66,544.36 51,244.30 61,913.59 46,749.20
7 Total contingent liabilities and commitments 8,554.74 6,156.82 8,554.74 6,156.82
8 Credit deposit ratio 1.29 1.28 1.20 1.16
Percentage of classified loans against total loans,
9 2.85% 3.22% 3.07% 3.52%
advances and leases
10 Profit after tax and provision 1,926.29 795.64 1,352.79 1,072.05
11 Amount of classified loans during current period 1,899.36 1,647.65 1,899.36 1,647.65
12 Provisions kept against classified loans 709.25 612.14 709.25 612.14
13 Provision surplus against classified loan 3.30 3.30 3.30 3.30
14 Cost of fund 7.82% 7.80% 7.82% 7.80%
15 Interest earnings assets 75,780.55 56,258.47 69,142.45 49,650.15
16 Non-interest earnings assets 9,662.17 7,785.04 9,105.16 7,972.35
17 Return on investment (ROI) 2.72% 1.47% 2.08% 2.19%
18 Return on assets (ROA) 2.58% 1.39% 1.99% 2.10%
19 Income from investment 914.22 483.53 629.30 195.79
20 Earnings Per Share (EPS) (restated :2016) 5.97 2.50 4.25 3.37
21 Net income per share (restated:2016) 5.97 2.50 4.25 3.37
22 Market price per share 47.80 34.80 47.80 34.80
23 Price earnings ratio 8.01 13.92 11.25 10.33
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Auditors’ Report
We have audited the accompanying consolidated Financial internal control relevant to the entity’s preparation and fair
Statements of LankaBangla Securities Limited, which comprise presentation of the financial statements in order to design audit
the consolidated and the separate Statement of Financial procedures that are appropriate in the circumstances, but not
Position as at December 31, 2017 and the Statement of profit or for the purpose of expressing an opinion on the effectiveness of
loss and other Comprehensive Income, Statement of Changes
in Equity and Statement of Cash Flows for the year then ended the entity’s internal control. An audit also includes evaluating
and a summary of significant accounting policies and other the appropriateness of accounting policies used and the
explanatory notes. reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial
Management’s Responsibility for the Consolidated statements.
Financial Statements
We believe that the audit evidence we have obtained is sufficient
Management is responsible for the preparation and fair and appropriate to provide a basis for our audit opinion.
presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards Opinion
along with Rules & Regulations Issued by the Securities and In our opinion, the consolidated Financial Statements have been
Exchange Rules 1987, Dhaka Stock Exchange, Chittagong Stock prepared in accordance with International Financial Reporting
Exchange, the Companies Act 1994 and other applicable laws Standards (IFRS) give a true and fair view of the state of the
and regulations and for such internal control as management affairs of the Company as of December 31, 2017 and of the
determines is necessary to enable the preparation of financial results of its operations and its cash flows for the year ended
statements that are free from material misstatement, whether and comply with the Companies Act 1994, Bangladesh Securities
due to fraud or error. and Exchange Commission Rule 1987, and other applicable laws
Auditor’s Responsibility and regulations.
Our responsibility is to express an opinion on these consolidated We also report that;

financial statements of the company based on our audit. The a. we have obtained all the information and explanations
assets and liabilities as at December 31, 2017 and revenue which to the best of our knowledge and belief were
and expenses for the year ended December 31, 2017 of the necessary for the purpose of our audit and made due
company’s Two subsidiaries namely BizBangla Media Ltd. and verification thereof;
LankaBangla Information system Ltd. have been consolidated b. in our opinion proper books of account as required by law
and accounted for in the consolidated financial statements. The have been kept by the company so far as it appeared from
financial statements of the subsidiary LankaBangla Information our examination of those books;
system Ltd. is audited by other auditor whose report has been
c. the company’s Consolidated Statement of Financial Position,
furnished to us and our opinion is as so far as it relates to the
Statement of profit or loss and other Comprehensive
amounts included in respect of the company’s subsidiaries
Income and Statement of Cash Flows dealt with by the
based on the reports. In addition, we have performed our
report are in agreement with the books of accounts;
audit procedure for consolidated purpose, based on which the
financial statements of the subsidiary have been consolidated.
We conducted our audit in accordance with International
Standards on Auditing. Those standards require that we comply
with ethical requirements and plan and perform the audit to
obtain reasonable assurance whether the financial statements
Place : Dhaka Ahmed Zaker & Co.
of the company are free from material misstatement.
Date : February 13, 2018 Chartered Accountants
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
judgments, 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
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LankaBangla LANKABANGLA SECURITIES LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amount In Taka
Particulars Notes
31.12.2017 31.12.2016
ASSETS
Non-current assets
Property, plant and equipment 4.00 431,357,912 168,614,026
Long term loan to employees' 5.00 27,159,251 24,083,909
Long Term Investment in Shares 6.00 1,621,485,668 1,495,889,918
Intangible Assets 234,143,286 234,143,286
Total non-current assets 2,314,146,116 1,922,731,139
Current assets
Advances, deposits and prepayments 7.00 54,379,097 222,270,181
Advance income tax 8.00 350,493,534 108,356,776
Investments 9.00 902,855,166 874,333,046
Inventories 10.00 556,720 218,940
Current portion of loans and advances 11.00 13,838,172 13,728,962
Accounts receivable 12.00 5,429,703,372 4,953,354,354
Accrued interest 932,916 1,062,553
Cash and cash equivalents 13.00 1,725,403,022 1,883,300,219
Total current assets 8,478,161,999 8,056,625,032
TOTAL ASSETS 10,792,308,115 9,979,356,171
SHAREHOLDER'S EQUITY AND LIABILITIES

Shareholder's Equity
Share capital 14.00 2,690,303,320 2,445,730,290
Share premium 15.00 1,200,000,000 1,200,000,000
General reserve 16.00 52,688,811 48,460,890
Retained earnings 751,381,185 446,346,180
Shareholder's Equity 4,694,373,316 4,140,537,360
Non controlling interest (54,772,267) (53,770,809)
Total equity 4,639,601,049 4,086,766,551
Liabilities
Non-current liabilities
Term loan 17.00 846,504,838 594,301,425
Zero cupon bond 286,309,875 398,063,088
Deferred tax liabilities 18.00 7,004,484 2,691,911
Finance lease obligation 19.00 5,195,419 1,911,106
Total non-current liabilities 1,145,014,616 996,967,530
Current liabilities
Accounts payable 20.00 1,627,788,911 1,879,941,226
Short term loans 21.00 2,173,130,809 1,458,192,316
Provision for current tax 22.00 419,586,060 131,526,247
Current portion of lease obligation 23.00 2,492,781 5,469,408
Current portion of term loan 24.00 391,627,062 309,223,456
Provision for negative equity & others 25.00 149,970,230 260,529,069
Interest Suspense 26.00 174,103,328 810,164,046
Other liabilities 27.00 68,993,269 40,576,323
Total current liabilities 5,007,692,450 4,895,622,090
Total liabilities 6,152,707,065 5,892,589,620
TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES 10,792,308,115 9,979,356,171
The accompanying policies and explanatory notes 1-46 form an integral part of these financial statements.
Director CEO & Director Company Secretary
Signed as per our separate report of same date

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LANKABANGLA SECURITIES LIMITED Annual Integrated
Report 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended December 31, 2017
Amount In Taka
Particulars Notes
31.12.2017 31.12.2016
Revenue
Interest Income 28.00 594,360,758 453,192,265
Income from investment 29.00 364,010,592 196,151,360
Brokerage income 30.00 1,134,600,280 556,565,866
Revenue from advertisement & circulation 31.00 143,071,124 105,975,710
Other operational income 32.00 33,574,413 30,648,019
Total Revenue 2,269,617,167 1,342,533,220
Cost of services (543,481,512) (582,459,396)
Interest expenses 33.00 319,193,558 428,183,560

Other costs directly attributable to services 34.00 224,287,954 154,275,836
Gross profit 1,726,135,654 760,073,824
Other non-operational income 35.00 13,960,599 13,419,094

Operating expenses (701,968,583) (503,688,611)
Salary and allowances 36.00 432,930,625 298,293,130
Rent, taxes, insurance, electricity etc. 37.00 61,391,697 52,112,720
Legal & professional fees 38.00 2,009,430 3,598,719
Postage, stamp, telecommunication etc. 39.00 5,503,092 4,941,061
Stationery, printing, advertisement 40.00 12,619,602 9,312,572
Director fees and expenses 41.00 845,250 915,839
Audit fees 42.00 304,750 212,750
Repairs, maintenance and depreciation 43.00 36,537,986 28,671,207
Other expenses 44.00 149,826,152 105,630,613
Operating profit before provisions 1,038,127,670 269,804,307
Other Provisions 76,109,546 (7,490,868)
For diminution in value of investment (76,109,546) 7,490,868
Profit before tax (PBT) 1,114,237,216 262,313,439
Income tax income/ (expense) (292,372,386) (113,466,885)

Current tax expense 288,059,813 110,728,820
Deferred tax expense 4,312,573 2,738,065
Profit after tax (PAT) 821,864,830 148,846,554
Attributable to
Shareholders of the company 822,866,288 154,108,321
Non controlling interest (1,001,457) (5,261,768)
821,864,830 148,846,554
Earnings Per Share (EPS)
Basic 45.00 3.05 0.55

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LANKABANGLA SECURITIES LIMITED 296
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
LankaBangla

Share Share General Retained Non Controlling
Particulars Total Total
Capital Premium Reserve Earnings Interest
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Balance at January 01, 2016 2,223,391,170 1,200,000,000 55,943,075 507,094,794 3,986,429,039 (48,509,041) 3,937,919,998
Changes in equity for 2016
Total comprehensive income for the year - - - 154,108,321 154,108,321 (5,261,768) 148,846,554
Stock dividend 222,339,120 (222,339,120) - - -
Transfer to general reserve - - (7,482,185) 7,482,185 - - -
Balance at December 31, 2016 2,445,730,290 1,200,000,000 48,460,890 446,346,180 4,140,537,360 (53,770,809) 4,086,766,551
Total comprehensive income for the year - - - 822,866,288 822,866,288 (1,001,457) 821,864,830
Stock dividend 244,573,030 - - (244,573,030) - - -
Interim cash dividend - - - (269,030,332) (269,030,332) - (269,030,332)
Transfer to general reserve 4,227,921 (4,227,921) - - -
Balance at December 31, 2017 2,690,303,320 1,200,000,000 52,688,811 751,381,185 4,694,373,316 (54,772,267) 4,639,601,049
Signed as per our separate report of same date.


Annual Integrated
CONSOLIDATED STATEMENT OF CASH FLOWS Report 2017
Amount In Taka
Particulars
31.12.2017 31.12.2016
Cash Flows from Operating Activities
Brokerage income 1,134,600,280 535,442,759
Interest Income 594,393,383 453,701,992
Received aganst revenue 123,567,799 96,613,296
Capital gain from investment in shares 307,448,514 126,525,938
Cash dividend income 45,698,624 69,625,422
Other operational income 22,165,655 21,868,901
Non-operating Income 10,865,031 11,026,929
DSE/CSE (payment)/received (222,520,246) 163,389,274
Payment to suppliers & others (142,034,427) (133,715,744)
Payment to CDBL (44,146,541) (21,089,456)
Gratuity Payment (24,499,130) (79,330,065)
1,277,558,594 828,272,365
Other Operating Activities
Advance, deposits & prepayments (27,662,746) 13,033,162
Income Tax paid (242,136,758) (108,356,776)
(269,799,504) (95,323,615)
Net cash used in operating activities 1,007,759,090 732,948,750
Cash Flows from Investing Activities

Investment in Shares (154,117,869) (358,253,138)
Margin loan to clients (1,092,474,886) 575,926,114
Leased assets (4,097,118) (3,437,159)
Sale of fixed assets 3,136,200 5,025,460
Acquisition of fixed assets (103,678,952) (32,760,764)
Net Cash used in Investing Activities (1,351,232,625) 186,500,512
Cash Flows from Financing Activities

Long Term Loan from Bank & Other Institutions 700,000,000 336,452,715
Zero Cupon Bond (111,753,213) 398,063,088
Repayment of Loan (366,230,176) (603,481,047)
Interim Cash dividend (267,224,457) (436,243,529)
Interest payment (296,605,014) (98,403,368)
Clients deposit/(withdrawals) (187,549,296) 1,079,832,709
Short term Loan 714,938,494 (344,677,002)
Net Cash flow from Financing Activities 185,576,337 331,543,566
Net increase in Cash and Cash Equivalents (157,897,198) 1,250,992,828
Cash & Cash Equivalent as on January 01, 1,883,300,219 632,307,391
Cash & Cash Equivalent as on December 31, 2017 1,725,403,022 1,883,300,219

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STATEMENT FINANCIAL POSITION
As at December 31, 2017
Amount In Taka
Particulars Notes
31.12.2017 31.12.2016
ASSETS
Non-current assets
Property, plant and equipment 4.00 414,872,640 148,315,914
Long term loan to employees' 5.00 27,159,251 24,083,909
Long Term Investment in Shares 6.00 1,940,483,668 1,814,887,918
Total non-current assets 2,382,515,559 1,987,287,742
Current assets
Advance income tax 8.00 347,064,462 106,722,378
Investments 9.00 901,747,497 873,275,957
Current portion of loans and advances 11.00 13,463,494 13,018,104
Accounts receivable 12.00 5,325,985,554 4,880,044,232
Accrued interest 932,916 1,062,553
Cash and cash equivalents 13.00 1,722,437,821 1,881,289,035
TOTAL ASSETS 10,826,628,289 10,036,006,973
SHAREHOLDER'S EQUITY AND LIABILITIES

Shareholder's Equity
Share capital 14.00 2,690,303,320 2,445,730,290
Share premium 15.00 1,200,000,000 1,200,000,000
General reserve 16.00 52,688,811 48,460,890
Retained earnings 794,918,515 486,603,332
Total equity 4,737,910,646 4,180,794,512
Liabilities
Non-current liabilities
Term loan 17.00 846,504,838 594,301,425
Zero cupon bond 286,309,875 398,063,088
Deferred tax liabilities 18.00 7,004,484 2,691,911
Finance lease obligation 19.00 4,241,213 -
Total non-current liabilities 1,144,060,410 995,056,424
Current liabilities
Accounts payable 20.00 1,610,660,216 1,870,096,680
Short term loans 21.00 2,130,785,736 1,435,305,874
Provision for current tax 22.00 418,092,863 130,954,733
Current portion of lease obligation 23.00 1,568,632 4,664,963
Current portion of term loan 24.00 391,627,062 309,223,456
Provision for negative equity & others 25.00 149,970,230 260,529,069
Interest Suspense 26.00 174,103,328 810,164,046
Other liabilities 27.00 67,849,166 39,217,215
TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES 10,826,628,289 10,036,006,973

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LANKABANGLA SECURITIES LIMITED Annual Integrated
Report 2017
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Amount In Taka
Particulars Notes
31.12.2017 31.12.2016
Revenue
Interest Income 28.00 594,263,745 453,044,894
Income from investment 29.00 364,010,592 196,151,360
Brokerage income 30.00 1,134,600,280 556,565,866
Other operational income 32.00 22,165,655 21,868,901
Total Revenue 2,115,040,272 1,227,631,021
Cost of services (443,010,888) (487,182,588)
Interest expenses 33.00 315,728,587 426,073,478

Other costs directly attributable to services 34.00 127,282,301 61,109,110
Gross profit 1,672,029,384 740,448,433
Other non-operational income 35.00 13,892,031 12,126,929

Salary and allowances 36.00 411,223,467 278,994,268
Rent, taxes, insurance, electricity etc. 37.00 55,949,947 46,679,451
Legal & professional fees 38.00 1,534,430 3,218,969
Postage, stamp, telecommunication etc. 39.00 5,139,645 4,565,323
Stationery, printing, advertisement 40.00 11,280,884 7,950,809
Director fees and expenses 41.00 845,250 915,839
Audit fees 42.00 143,750 143,750
Repairs, maintenance and depreciation 43.00 34,153,843 25,875,852
Other expenses 44.00 124,162,577 89,600,368
Operating profit before provisions 1,041,487,623 294,630,732
Other Provisions 76,109,546 (7,490,868)
For diminution in value of investment (76,109,546) 7,490,868
Profit before tax (PBT) 1,117,597,169 287,139,864
Income tax income/ (expense) (291,450,703) (112,709,786)

Current tax expense 287,138,130 110,017,875
Deferred tax expense 4,312,573 2,691,911

Basic 45.00 3.07 0.65
The accompanying policies and explanatory notes 1-46 form an integral part of the financial statements.

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STATEMENT OF CHANGES IN EQUITY
Share Share General Retained

Particulars Total
Capital Premium Reserve Earnings
Balance at January 01, 2016 2,223,391,170 1,200,000,000 55,943,075 527,076,343 4,006,410,588

Total comprehensive income for the year - - - 174,383,924 174,383,924
Stock dividend 222,339,120 - - (222,339,120) -
Transfer to general reserve - - (7,482,185) 7,482,185 -
Balance at December 31, 2016 2,445,730,290 1,200,000,000 48,460,890 486,603,332 4,180,794,512
Total comprehensive income for the year - - - 826,146,466 826,146,466
Stock dividend 244,573,030 - - (244,573,030) -
Interim cash dividend - - - (269,030,332) (269,030,332)
Transfer to general reserve - - 4,227,921 (4,227,921) -
Balance at December 31, 2017 2,690,303,320 1,200,000,000 52,688,811 794,918,515 4,737,910,646

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Annual Integrated
STATEMENT OF CASH FLOWS Report 2017
Amount In Taka
Particulars
31.12.2017 31.12.2016
Cash Flows from Operating Activities 1,134,600,280 535,442,759

Brokerage income 594,393,383 453,701,992
Interest Income 307,448,514 126,525,938
Capital gain from investment in shares 45,698,624 69,625,422
Cash dividend income 22,165,655 21,868,901
Other operational income 10,865,031 11,026,929
Non-operating Income (222,520,246) 163,389,274
DSE/CSE (payment)/received (44,146,541) (21,089,456)
Payment to CDBL (24,499,130) (79,330,065)
Gratuity Payment (527,976,656) (415,178,043)
Operating expenses 1,296,028,913 865,983,651
Other Operating Activities

Advance, deposits & prepayments (34,662,746) (16,966,838)
Income Tax paid (240,342,083) (106,722,378)
(275,004,830) (123,689,217)
Net cash used in operating activities 1,021,024,084 742,294,434
Investment in Shares (154,067,289) (359,117,206)
Margin loan to clients (1,092,474,886) 575,926,114
Leased assets (4,097,118) (3,437,159)
Sale of fixed assets 3,027,000 1,100,000
Acquisition of fixed assets (102,682,875) (24,376,229)
Net Cash used in Investing Activities (1,350,295,168) 190,095,519
Long Term Loan from Bank & Other Institutions 700,000,000 334,392,715
Zero Cupon Bond (111,753,213) 398,063,088
Repayment of Loan (365,392,982) (602,886,829)
Interim Cash dividend (267,224,457) (436,243,529)
Interest payment (293,140,043) (96,293,287)
Clients deposit/(withdrawals) (187,549,296) 1,079,832,709
Short term Loan 695,479,862 (358,394,959)
Net Cash flow from Financing Activities 170,419,871 318,469,907
Net increase in Cash and Cash Equivalents (158,851,213) 1,250,859,861
Cash & Cash Equivalent as on January 01, 2017 1,881,289,035 630,429,174
Cash & Cash Equivalent as on December 31, 2017 1,722,437,821 1,881,289,035

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302
NOTES TO THE FINANCIAL STATEMENTS
1.00 Company and its activities

1.01 Legal status of the company
LankaBangla Securities Limited (here in after referred to as “LBSL” or “the Company”) was incorporated with the Registrar of Joint
Stock Companies and Firms (RJSCF) vide registration no. C-33276(22)/97 dated July 03, 1997 as a Private Company Limited by
Shares namely: Vanik (BD) Securities Limited. Subsequently the company renamed as LankaBangla Securities Limited on April 27,
2005. On March 02, 2010 the Company was emerged as a Public Limited Company with its registered office at Safura Tower, 11th
Floor, 20 Kemal Ataturk Avenue, Banani, Dhaka. The Company was entitled to commence its business from July 03, 1997 and the
Company is a subsidiary of LankaBangla Finance Limited, a Non Banking Financial Institution incorporated in Bangladesh under the
Bangladesh Bank.
1.02 Principal activities of the company
The principal activities of the company are to act as a member of Dhaka Stock Exchanges Ltd. and Chittagong Stock Exchange Ltd.
to carry on the business of brokers or dealers in stocks, shares and securities, commercial papers, bonds, debentures, debentures
stocks, foreign currencies, treasury bills and/or any financial instruments. The company has ten branches in Bangladesh namely
Dhaka-Principal, Banani, Islampur, Uttara, Chittagong-Khatungonj, Nasirabad, Agrabad, Sylhet-Sylhet, Comilla-Comilla and
Narayangonj- Narayangonj Branch.
1.03 Information regarding subsidiary companies
As on 31 December 2017 LankaBangla Securities Limited has 02 (Two) subsidiaries company to include for preparation of
consolidated financial statements as per International Financial Reporting Standard (IFRS) 10, ‘Consolidated Financial Statements’.
A brief description of the companies is described below:
LankaBangla Information System Limited (Subsidiary Company)
LankaBangla Information System Limited is a private limited company incorporated on 02 May 2013 in Bangladesh under the
Companies Act 1994. The main objectives of the company are to restructure and improve the infrastructure to ensure the security,
mobility, enhancement and service to all business concerns. LankaBangla Information System Limited holds 99.8 percent shares in
its subsidiary.
BizBangla Media Limited (Subsidiary Company)
BizBangla Media Limited is a private limited company incorporated on 18 January 2011 in Bangladesh under the Companies Act
1994. The main objectives of the company are to carry on business of printing publishes of newspaper, Journals, magazines,
periodicals, books, pamphlets and other literary and non literary works and undertakings, radio, television broadcastings and any
other media to deal with copy right, patent, trade mark, intellectual property and IT related products. BizBangla Media Limited
holds 80 percent shares in its subsidiary.
2.00 Basis of preparation and Significant Accounting Policies
The financial statements referred to here comprise:
a) Statement of Financial Position;
b) Statement of Profit or Loss and Other Comprehensive Income;
c) Statement of Changes in Equity;
d) Statement of Cash Flows; and
e) Notes to the Financial Statements.
The financial statements have been prepared on a going concern basis following accrual basis of accounting except for statement
of cash flows in accordance with the Companies Act 1994, Bangladesh Securities and Exchange Rules 1987, the Listing Rules
of Dhaka and Chittagong Stock Exchanges and International Accounting Standards (IAS) and International Financial Reporting
Standards (IFRS) as adopted in Bangladesh by the Institute of Chartered Accountants of Bangladesh as International Financial
Reporting Standards (IFRS’s) including International Accounting Standards (IASs) and other applicable laws and regulations.
2.03 Basis of measurement
The financial statements have been prepared based on historical cost convention basis, except Investment for Membership in
Dhaka Stock Exchange and Chittagong Stock Exchange which have been re-measured at fair value. No adjustment has been made
for inflationary factors affecting the financial statements. The accounting policies, unless otherwise stated, have been consistently
applied by the Company and are consistent with those of the previous year.
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Annual Integrated
Report 2017
2.04 Basis of consolidation

The financial statements of the company and its subsidiary have been consolidated in accordance with International Financial
Reporting Standard (IFRS) 10: 'Consolidated Financial Statements'. The consolidation of the financial statements has been prepared
by using uniform accounting policies and after eliminating all material intra group balances, income and expenses arising from
intra-group transactions.
The total profits of the company and its subsidiary are shown in the consolidated profit and loss account with the proportion of
profit after taxation pertaining to minority shareholders being deducted as ‘Non-controlling Interest’. All assets and liabilities of the
company and of its subsidiary are shown in the consolidated Statement of Financial Position. The interest of minority shareholders
of the subsidiary are shown separately in the consolidated Statement of Financial Position under the heading ‘Non-controlling
Interest’.
The Board of Directors accorded its approval and authorized these financial statements on 13 February, 2018.
2.06 Presentation and functional currency and level of precision
The financial statements have been presented in Bangladesh Taka (BDT) currency, which is the Company’s functional currency. All
financial information presented in BDT has been rounded off to the nearest integer.
The preparation of financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue and expenses. It also requires disclosures of contingent assets and liabilities at the date of
the financial statements.
Provisions and accrued expenses are recognized in the financial statements in line with the International Accounting Standard (IAS)
37 “Provisions, Contingent Liabilities and Contingent Assets” when
- The Company has a legal or constructive obligation as a result of past event.
- It is probable that an outflow of economic benefit will be required to settle the obligation.
- A reliable estimate can be made for the amount of the obligation.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the result of which form the basis of making the judgments about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. However, the
estimates and underlying assumptions are reviewed on an ongoing basis and the revision is recognized in the period in which the
estimates are revised.
2.08 Going concern
The Company has adequate resources to continue its operation for foreseeable future. For this reason the directors continue
to adopt going concern basis in preparing the financial statements. The current credit facilities and adequate resources of the
Company provide sufficient funds to meet the present requirements of its existing businesses and operations to continue.
Each material item as considered by management significant has been presented separately in financial statements. No amount
2.10 Property, Plant and equipment
i) Recognition and measurement
Freehold Assets
The cost of an item of property and equipment is recognized as an asset if, it is probable that the future economic benefits
associated with the item will flow to the company and the cost of item can be measured reliably.
Property and Equipment are stated at cost less accumulated depreciation. Cost represents the cost of acquisition includes purchase
price and other directly attributable cost of bringing the assets to working conditions for its intended use as per International
Accounting Standard (IAS) 16 “Property, Plant and Equipment”.
Leasehold assets
Leasehold assets of which the Company assumes substantially all the risks and rewards of ownership are accounted for as finance
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LankaBangla
leases and capitalized at the inception of the lease at fair value of the leased property or at the present value of the minimum lease
payment, which ever is lower as per International Accounting Standard (IAS) 17 “Leases”. The corresponding obligation under the
lease is accounted for as liability.
ii) Subsequent expenditure on property and equipment

Subsequent expenditure is capitalized only when it increases the future economic benefit from the assets and that cost can be
measured reliably. All other expenditures are recognized as an expense as and when they are incurred.
iii) Depreciation
Depreciation is calculated on the cost of fixed assets in order to write off such amounts over the estimated useful lives of such
assets. The rates of depreciation used on a straight-line method are as follows:
Building 2.5%
Furniture and fixtures 10%
Office renovation 20%
Motor Vehicle 20%
Data Center & Dr. 30%
Lease Assets 20%
Half year’s depreciation is charged in the year in which the related assets are put into use and disposed off irrespective of the date.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and
the carrying amount of the asset and is recognized in the Comprehensive Income statement.
2.11 Intangible assets and amortization of intangible assets

Intangible assets acquired separately are measured on initial recognition at cost and are carried at cost less accumulated
amortization and accumulated impairment losses, if any. Amortization is calculated using the straight line method to write down
the cost of intangible assets to their residual values over their estimated useful lives based on the management best estimates.
Subsequent expenditure on software assets is capitalized only when it increases the future economic benefits in the specifications
to which it relates. All other expenditure is treated as expense as incurred.
2.12 Investment in stock exchanges for membership

In accordance with section 8 (Gha) of the Exchanges Demutualization Act. 2013, both stock exchange membership has been
converted into shares through the issuance of “Trading Right Entitlement Certificate (TREC)” by the DSE & CSE. Currently Trading
Right Entitlement Certificate has no value due to the stock exchanges did not issue any TREC other than existing members
2.13 Investment in securities

Investment in quoted shares and unquoted shares are initially recognized at cost plus transaction costs that are directly attributable
to the acquisition of the shares. After initial recognition, investment in quoted shares has been revalued at cost at reporting date.
Net of unrealized gain and loss has not been recognized in profit and loss account.
2.14 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand, bank balances and deposits held with banks and financial institutions and short
term liquid investments that are readily convertible to known amount of cash and that are subject to an insignificant risk of change
in value.
Cash flow statement has been prepared in accordance with the International Accounting Standards (IAS) 7, “Cash flow statement”
under direct method.
2.15 Provision for tax
Current tax
Provision for current tax is made in accordance with the provision of Income Tax Ordinance, 1984 and subsequent amendments
made thereto from time to time.

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Deferred Tax
Deferred Tax is calculated as per International Accounting Standard (IAS) 12 “Income Taxes”. Deferred Tax is recognized on
differences between the carrying amount 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 recognized for all taxable temporary differences. Deferred Tax assets are generally recognized for all deductible temporary
differences.
Deferred Tax is measured at the tax rate that is expected to be applied to the temporary differences when they reverse based on
the laws that have been enacted or substantively enacted by the reporting date
2.16 Revenue Recognition
Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the enterprise
the revenue during the year and in accordance with the International Accounting Standard (IAS) 18 “Revenue Recognition”:
a. Brokerage commission
Brokerage commission is recognized as income when selling or buying order executed.
b. Interest Income from margin loan
Interest Income from margin loan is recognized on accrual basis. Such income is calculated on daily margin loan balance of the
respective parties. Income is recognized on monthly basis.
c. Dividend income and profit/ (loss) on sale of marketable securities
Dividend income is recognized when right to receive payment is established whereas profit or loss arising from the sale of securities
is accounted for only when shares are sold in the market and profit is realized or loss is incurred.
2.17 Earning per share
The Company calculates earning per share in accordance with International Accounting Standard (IAS) 33 “Earning per Share”
which has been shown in the face of the Profit and Loss Account.
2.18 General reserve
The Board of LankaBangla Securities has decided to create a general reserve by 1% on outstanding margin loan provided to the
client against marketable securities. Add or adjustment with general reserve will depend on size of outstanding margin loan for the
respective year.
2.19 LB Foundation
The Board of LankaBangla Securities Limited has decided at 69th Board Meeting to contribute 1% of net profit after tax to LB
Foundation for CSR.
2.20 Employee benefit Obligation
a. Defined contribution plan
The Company operates a contributory provident fund for its permanent employees. The fund is approved by the National Board
of Revenue (NBR), administered separately by a Board of Trustees and is funded by the equal contribution both by the Company
and employees at a predetermined rate. This fund is invested separately from the Company’s assets and is audited by an external
auditor.
b. Defined benefit plan (Gratuity scheme)
The Company has an unfunded gratuity scheme for all eligible employees who have completed minimum 02 (two) years of
confirmed service with the Company. Required amount of gratuity is calculated on the basis of last basic pay depending on the
length of service for every completed year as well as proportionate to the fraction period of service as of the respective financial
year.
Following benefits are payable on retirement, death or leaving service:
Year of confirmed service % of entitlement
2 years and above but less than 4 years 50% of last basic salary
4 years and above but less than 5 years 100% of last basic salary
5 years and above 150% of last basic salary
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As per International Accounting Standards (IAS)-24 “Related Party Disclosures”, parties are considered to be related if one of
the parties has the ability to control the other party or exercise significant influence over the other party in making financial
and operating decisions. The Company carried out transactions in the ordinary course of business on an arm’s length basis at
commercial rates with related parties.
Related party disclosures have been given in Note- 46.
2.22 Proposed Dividend
Proposed dividend has not been recognized as a liability in the Statement of Financial Position in accordance with International
Accounting Standard (IAS)-10 “Event after the Balance Sheet Date.
Interim Cash Dividend
The Board of Directors in their meeting held on June 01, 2017 recommended 01 and paid 10% interim cash dividend to the
shareholders of the company.
2.23 Reclassifications
To facilitate comparison, certain relevant balances pertaining to the previous year has been rearranged/ restated/reclassified
whenever considered necessary to conform to current year’s presentation.
2.24 Branch accounting
The Company has a total ten number of Branch offices (excluding Head Office), with no overseas branch as on December 31, 2017.
Accounts of the branches are maintained at the head offices which are included in the accompanying financial statements.
2.25 Comparative:
Comparative information have been disclosed in respect of the previous year for all numerical information in the financial
statements including narrative and descriptive information when it is relevant for understanding of the current year’s financial
statements.
Previous year’s figure has been re-arranged whenever considered necessary to ensure comparability with the current year’s
presentation as per BAS-8 “Accounting Policies, Changes in Accounting Estimates and Errors”. During the year prior year adjustment
has been made in the interest income, Provision for negative equity shares & others and provision for doubtful loan & advances.
2.26 Application of International Accounting Standards (IASs):
The Financial Statements have been prepared in compliance with requirement of IAS as adopted by The Institute of Chartered
Accountants of Bangladesh (ICAB) and applicable in Bangladesh. The following IASs are applicable for the financial statements for
the period under review:
IAS- 1 Presentation of Financial Statements
IAS- 7 Statement of Cash Flows
IAS- 8 Accounting Policies, Changes in Accounting Estimates and Errors
IAS- 10 Events after the Reporting Period
IAS- 12 Income Taxes
IAS- 16 Property, Plant and Equipment
IAS- 17 Leases
IAS- 18 Revenue
IAS- 19 Employees Benefit
IAS- 23 Borrowing Cost
IAS- 24 Related Party Disclosure
IAS- 32 Financial Instruments Presentation
IAS- 37 Provisions, Contingent Liabilities and Contingent Assets
IAS- 39 Financial Instruments : Recognition and Measurement
IFRS- 7 Financial Instruments : Disclosures
IFRS- 10 Consolidated Financial Statements
IFRS- 13 Fair Value Measurement
3.00 Directors’ responsibility statement
The Board of Directors takes the responsibility for the preparation and presentation of these financial statements as per section
183 of companies Act 1994.
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Amount in Taka
Consolidated Separate
31.12.2017 31.12.2016 31.12.2017 31.12.2016
4.00 Property, Plant & Equipment
Cost:
Opening balance 402,156,581 391,330,257 353,218,364 342,315,050
703,045,533 424,091,021 653,111,239 366,691,279
Less: Disposal during the year 8,967,495 21,934,440 8,812,495 13,472,915
Closing balance 694,078,039 402,156,581 644,298,745 353,218,364
Depreciation:
Opening balance 233,542,555 222,453,358 204,902,450 193,811,439
Add: Charged during the year 37,959,199 29,810,246 33,190,913 24,219,536
271,501,755 252,263,604 238,093,364 218,030,975
Less: Adjustment made during the year 8,781,628 18,721,048 8,667,260 13,128,524
Accumulated depreciation 262,720,127 233,542,555 229,426,104 204,902,450
Carrying amount 431,357,912 168,614,026 414,872,640 148,315,914
A schedule of property, Plant & Equipment is given in Annexure-A
5.00 Long term loan to employees
Staff transport loan 25,241,094 20,397,550 25,241,094 20,397,550
Loan against salary 1,918,157 3,686,359 1,918,157 3,686,359
27,159,251 24,083,909 27,159,251 24,083,909
6.00 Investment
Investment in equity of unlisted company (Note-6.01) 133,064,080 101,606,000 452,062,080 420,604,000
Investment in equity of strategic company (Note-6.02) 1,488,421,588 1,394,283,918 1,488,421,588 1,394,283,918
1,621,485,668 1,495,889,918 1,940,483,668 1,814,887,918
6.01 Investment in equity of unlisted company
Particulars
Financial Excellence Limited 3,000,000 3,000,000 3,000,000 3,000,000
DSE Membership at Cost (Note-6.01.A) 11,606,000 11,606,000 11,606,000 11,606,000
CSE Membership at Cost (Note-6.01.A) 5,000,000 5,000,000 5,000,000 5,000,000
LankaBangla Information Technology Limited - - 998,000 998,000
LankaBangla 1st Balance Unit Fund - 52,000,000 - 52,000,000
Bengal Meat Processing Industries Limited 50,000,000 - 50,000,000 -
Al-Arafah Shariah Unit Fund 60,000,000 - 60,000,000 -
Bashundhara Paper Mills 3,458,080 3,458,080
Pacific Denims Limited - 30,000,000 - 30,000,000
BizBangla Media Limited - - 318,000,000 318,000,000
133,064,080 101,606,000 452,062,080 420,604,000
6.01.A DSE and CSE Membership at Cost
LankaBangla Securities Limited has received the following shares from DSE and CSE against the membership under demutualization
scheme of the stock exchanges:
Stock Exchange Type of Number of Face Value
Shares Shares
Dhaka Stock Exchange Limited Floated (40%) 2,886,042 10
Blocked (60%) 4,329,064 10
7,215,106
Chittagong Stock Exchange Limited 1,714,932 10
2,572,398 10
4,287,330
Valuation of membership has been shown at cost in the financial statements.
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Amount in Taka
31.12.2017 31.12.2016 31.12.2017 31.12.2016
6.02 Investment in equity of strategic company
Engineering - 94,683,662 - 94,683,662
IT 23,564,676 23,565,216 23,564,676 23,565,216
Textiles 319,872,838 319,872,838 319,872,838 319,872,838
Non Banking Financial Institution 335,912,204 335,912,204 335,912,204 335,912,204
Pharmaceuticals & Chemical 38,461,538 44,076,462 38,461,538 44,076,462
Mutual Fund 9,139,000 9,139,000 9,139,000 9,139,000
Insurance 433,147,206 341,057,226 433,147,206 341,057,226
Bank 328,324,125 225,977,311 328,324,125 225,977,311
1,488,421,588 1,394,283,918 1,488,421,588 1,394,283,918
7.00 Advances, Deposits and Prepayments
Advances
Office rent 35,280,549 10,791,248 35,280,549 10,791,248
Advance for Bank guarantee margin 163,706 1,058,401 163,706 1,058,401
Advance against floor purchase - 191,968,000 - 191,968,000
BizBangla Media Limited - - 82,000,000 75,000,000
Advance against expenses 5,955,086 1,351,323 4,791,278 40,001
41,399,341 205,168,972 122,235,533 278,857,650
Deposits
Clearing house 25,000 25,000 25,000 25,000
Lease Deposit 2,277,772 374,702 2,277,772 374,702
Loan Deposit - 8,752,870 - 8,752,870
PCS Bangladesh (Pvt.) Ltd. 64,000 64,000 64,000 64,000
Jai Jai Din Printers 500,000 500,000 - -
Md. Abdur Roup Hayder - 648,510 - -
Security deposit with agencies 270,069 497,568 - -
Security deposit with CDBL 102,500 102,500 102,500 102,500
Security deposit for office space 5,263,454 3,464,160 3,299,220 2,458,350
8,502,795 14,429,310 5,768,492 11,777,422
Prepayments
Group and health insurance 3,426,268 2,227,261 3,426,268 2,227,261
Insurance for office equipment 832,099 293,662 832,099 293,662
Insurance for motor vehicle 218,595 150,977 218,595 150,977
4,476,962 2,671,900 4,476,962 2,671,900
54,379,097 222,270,181 132,480,986 293,306,972
8.00 Advance Income Tax
Opening Balalce 108,356,776 - 106,722,378 -
Add: Paid during year
Advance tax 41,122,896 3,755,210 40,926,054 3,735,025
Advance tax deducted at source 21,104,249 21,150,591 19,506,417 19,536,378
Tax deducted at source on turnover 179,909,613 83,450,975 179,909,613 83,450,975
242,136,758 108,356,776 240,342,083 106,722,378
350,493,534 108,356,776 347,064,462 106,722,378
Less: Adjusment during the year - - - -
350,493,534 108,356,776 347,064,462 106,722,378
9.00 Investments
Investment in listed securities (Note-9.01) 861,276,061 834,041,599 861,276,061 834,041,599
Fixed deposits receipt (FDR) (Note-9.02) 41,579,105 40,291,447 40,471,436 39,234,358
902,855,166 874,333,046 901,747,497 873,275,957
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Amount in Taka
31.12.2017 31.12.2016 31.12.2017 31.12.2016
9.01 Investment in listed securities
Pharmaceuticals & Chemical 377,263,667 301,769,116 377,263,667 301,769,116
Cement - 5,953,962 - 5,953,962
Fuel Power 421,806,232 350,928,067 421,806,232 350,928,067
Tannery 50,094,868 113,558,147 50,094,868 113,558,147
Non Banking Financial Institution - 46,000,000 - 46,000,000
Miscellaneous - 111,003 - 111,003
Engineering 127,046 - 127,046 -
Food Allied 2,605,507 109,090 2,605,507 109,090
Insurance 8,866,000 8,866,000 8,866,000 8,866,000
Mutual Fund 499,982 6,789,080 499,982 6,789,080
Cash form 12,758 (42,867) 12,758 (42,867)
861,276,061 834,041,599 861,276,061 834,041,599
9.02 Fixed deposit receipts (FDR)
FDR with Standard Chartered Bank 40,471,436 39,234,358 40,471,436 39,234,358
FDR with One Bank Limited 1,107,669 1,057,089 - -
41,579,105 40,291,447 40,471,436 39,234,358
10.00 Inventories
Newspaper 522,315 157,650 - -
P. S plate 11,200 38,000 - -
Polyester film 23,205 23,290 - -
556,720 218,940 - -
11.00 Current portion of loans and advances
Loan Against Salary 2,890,108 9,600,816 2,515,430 9,600,816
Staff Transport Loan 10,948,064 4,128,146 10,948,064 3,417,288
13,838,172 13,728,962 13,463,494 13,018,104
12.00 Accounts receivable
Receivable from clients (Note - 12.01) 5,383,462,265 4,920,226,241 5,279,744,447 4,846,916,119
Receivable from DSE & CSE (Note - 12.02) 46,241,107 33,128,113 46,241,107 33,128,113
5,429,703,372 4,953,354,354 5,325,985,554 4,880,044,232
12.01 Receivable from clients
Chittagong Stock Exchange Limited - 836,677 - 836,677
LankaBangla Investments Ltd. - 98,014,857 - 98,014,857
Sundry debtors against advertisement 97,823,773 68,116,232 - -
Sundry debtors against circulation 5,894,045 5,193,890 - -
Cash dividend receivalbe 10,863,454 - 10,863,454 -
Other clients 5,268,880,993 4,748,064,585 5,268,880,993 4,748,064,585
5,383,462,265 4,920,226,241 5,279,744,447 4,846,916,119
Other clients
Other clients includes receivable from share trading.
12.02 Receivable from DSE & CSE
ABG&N - - - -
ABG&N 7,209,109 - 7,209,109 -
ABG&N (Spot) - - - -
Z 3,898,800 2,446,440 3,898,800 2,446,440
Z 6,739,740 2,703,830 6,739,740 2,703,830
Z 3,490,527 2,930,042 3,490,527 2,930,042
Z 1,776,114 769,154 1,776,114 769,154
Z 4,811,793 2,462,901 4,811,793 2,462,901
Z 3,679,861 4,077,455 3,679,861 4,077,455
Z 2,441,573 6,500,779 2,441,573 6,500,779
Z 2,820,248 5,043,933 2,820,248 5,043,933
Z 7,495,545 3,726,102 7,495,545 3,726,102
Total DSE 44,363,309 30,660,637 44,363,309 30,660,637
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Amount in Taka
31.12.2017 31.12.2016 31.12.2017 31.12.2016
ABG&N - - - -
ABG&N (Spot) - - - -
Z 357,402 281,840 357,402 281,840
Z 110,024 155,353 110,024 155,353
Z 75,683 96,266 75,683 96,266
Z 206,696 101,891 206,696 101,891
Z 644,472 25,184 644,472 25,184
Z 106,723 116,034 106,723 116,034
Z 109,599 297,510 109,599 297,510
Z 179,570 71,557 179,570 71,557
Z 87,629 1,321,842 87,629 1,321,842
Total CSE 1,877,798 2,467,477 1,877,798 2,467,477
Grand Total DSE & CSE 46,241,107 33,128,113 46,241,107 33,128,113
13.00 Cash and Cash Equivalents
Cash in hand 131,456 460,205 85,470 445,544
Cash at bank (Notes 13.01) 1,725,271,566 1,882,840,014 1,722,352,351 1,880,843,491
1,725,403,022 1,883,300,219 1,722,437,821 1,881,289,035
13.01 Cash at Bank /NBFI
ONE Bank Limited 1,437,671,718 1,811,225,945 1,435,624,896 1,809,383,226
Commercial Bank of Ceylon 45,480,214 37,689,297 45,480,214 37,689,297
Shahajalal Islami Bank limited 1,026,956 167,867 1,026,956 167,867
South Bangla Agriculture & Commerce Bank 52,305 383,542 52,305 383,542
Standard Bank Limited 126,475 100,516 - -
Bangladesh Development Bank Ltd 28,463 49,463 - -
National Credit and Commerce Bank Ltd 1,726,523 24,976 1,726,523 21,151
Uttara Bank Limited 5,000 - - -
Sonali Bank Limited 277,646 - - -
Midland Bank Limited 169,540 1,419 169,540 1,419
Meghna Bank Limited 3,757 5,252 3,757 5,252
1,725,271,566 1,882,840,014 1,722,352,351 1,880,843,491
14.00 Share Capital
Authorized Capital
500,000,000 ordinary shares of Taka 10 each 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000
Issued, Subscribed and Paid-up Capital 2,690,303,320 2,445,730,290 2,690,303,320 2,445,730,290

269,030,332 ordinary shares of Taka 10 each fully paid 2,690,303,320 2,445,730,290 2,690,303,320 2,445,730,290
Detail of Shareholding Position of the Company
Name of the Sponsor & Directors Shareholders No. of Shares
LankaBangla Finance Ltd. 244,573,260 2,445,732,600 2,223,392,790
Mr. Mohammad A. Moyeen 122,290 1,222,900 1,111,740
Mr. Mahbubul Anam 119,841 1,198,410 1,089,470
Mr. B W Kundanmal 2 20 20
Mr. Mohammed Nasiruddin Chowdhury 2,797 27,970 25,430
244,818,190 2,448,181,900 2,225,619,450
General Shareholders 24,212,142 242,121,420 220,110,840
269,030,332 2,690,303,320 2,445,730,290
15.00 Share Premium
Premium amount received against issue of
5,000,000 shares @ 240 per share in 2010. 1,200,000,000 1,200,000,000 1,200,000,000 1,200,000,000
1,200,000,000 1,200,000,000 1,200,000,000 1,200,000,000
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Amount in Taka
31.12.2017 31.12.2016 31.12.2017 31.12.2016
16.00 General Reserve
Opening balance 48,460,890 55,943,075 48,460,890 55,943,075
Add: Addition during the year 4,227,921 - 4,227,921 -
52,688,811 55,943,075 52,688,811 55,943,075
Less: Adjustment during the year - 7,482,185 - 7,482,185
Closing balance 52,688,811 48,460,890 52,688,811 48,460,890
The Board of Directors of LankaBangla Securities has decided to create a general reserve by 1% on outstanding margin loan
provided to the client against marketable securities. Add or adjustment with general reserve will depend on size of outstand-
ing margin loan for the respective year.
17.00 Long Term Loan

Opening balance 594,301,425 825,150,538 594,301,425 825,150,538
Add: Drawdown during the year 700,000,000 334,392,715 700,000,000 334,392,715
1,294,301,425 1,159,543,253 1,294,301,425 1,159,543,253
Less: Payment during the year 56,169,525 256,018,372 56,169,525 256,018,372
Less: Conversion to Short term 391,627,062 309,223,456 391,627,062 309,223,456
Closing balance 846,504,838 594,301,425 846,504,838 594,301,425
Detail of long term portion of the above balance is presented below:
Shahjalal Islami Bank Limited 12,615,117 41,478,597 12,615,117 41,478,597
Shahjalal Islami Bank Limited 2 40,713,319 - 40,713,319 -
LankaBangla Finance Limited 168,257,969 207,989,116 168,257,969 207,989,116
South Bangla Agriculture & Commerce Bank Ltd 67,366,581 140,846,149 67,366,581 140,846,149
South Bangla Agriculture & Commerce Bank Ltd 2 55,689,831 103,736,757 55,689,831 103,736,757
South Bangla Agriculture & Commerce Bank Ltd 4 143,317,481 - 143,317,481 -
Standard Bank Limited 141,208,887 - 141,208,887 -
Phonix Finance ltd 147,563,678 - 147,563,678 -
Sub total 846,504,838 594,301,425 846,504,838 594,301,425
18.00 Deferred tax Liabilities
Deferred Tax has been calculated based on deductible/ taxable temporary difference arising due to difference in the carrying
amount of the assets / liabilities and its tax base in accordance with the provision of Bangladesh Accounting Standard (BAS) 12
''Income Taxes''.
Amount In Taka
Taxable
Carrying
/Deductable
Particulars Amount at Tax Base
Temporary
Balance Sheet
Difference
Assets:
Fixed assets net of depreciation 414,872,645 394,859,835 20,012,810
Total 414,872,645 394,859,835 20,012,810
Applicable Tax Rate 35%
Deferred Tax Liability/(Asset) 7,004,484
Deferred Tax Liabilities as on 31st December 2017 7,004,484 -
19.00 Finance lease obligation
Opening balance 1,911,106 5,683,353 - 4,728,179
Add: Addition during the year 5,242,000 2,060,000 5,242,000 -
7,153,106 7,743,353 5,242,000 4,728,179
Less: Conversion to Short term 1,957,686 5,832,247 1,000,787 4,728,179
Closing Balance 5,195,419 1,911,106 4,241,213 -
20.00 Accounts payable
Payable to clients (Note-20.01) 1,483,355,222 1,668,140,870 1,478,492,701 1,666,041,997
Payable to DSE and CSE (Note - 20.02) 51,620,807 177,154,351 51,620,807 177,154,351
Accrued expenses (Note - 20.03) 92,812,882 34,646,005 80,546,708 26,900,332
1,627,788,911 1,879,941,226 1,610,660,216 1,870,096,680
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Amount in Taka
31.12.2017 31.12.2016 31.12.2017 31.12.2016
20.01 Payable to Clients
Payable for IPO clients 700,000 690,110,000 700,000 690,110,000
IDLC of Bangladesh Ltd 147,518 1,616,650 147,518 1,616,650
LankaBangla Investments Ltd. 78,039,822 - 78,039,822 -
Prattashee Traders 564,137 562,989 - -
Reaz Enterprize 3,031,464 - - -
Jai Jai Din Printers 1,266,920 1,535,884 - -
Payable suspense 1,000,500 - 1,000,500 -
Other client 1,398,604,861 974,315,347 1,398,604,861 974,315,347
1,483,355,222 1,668,140,870 1,478,492,701 1,666,041,997
Other Clients
Other clients includes payable from share trading.
20.02 Payable to DSE & CSE
ABG&N 464,686 155,372,001 464,686 155,372,001
Z 6,152,713 4,964,729 6,152,713 4,964,729
Total DSE 6,617,399 160,336,729 6,617,399 160,336,729
ABG&N 44,522,623 15,938,133 44,522,623 15,938,133
Z 480,786 879,489 480,786 879,489
Total CSE 45,003,409 16,817,622 45,003,409 16,817,622
Grand Total DSE & CSE 51,620,807 177,154,351 51,620,807 177,154,351
20.03 Accrued Expenses
Telephone bill 114,321 90,580 74,878 66,717
Electricity bill 1,201,280 993,491 957,827 800,484
Office rent 3,706,883 2,555,116 2,240,978 1,533,063
Printing & stationeries 529,637 609,450 529,637 609,450
News paper and periodicals 49,226 58,300 - -
Office maintenance 832,285 579,143 581,710 362,351
Vehicle maintenance 142,700 107,185 - -
Water and sewerage bill 118,914 99,397 118,914 99,397
Audit fees 259,730 327,750 144,730 258,750
Legal and professional fees 126,000 126,000 - -
News agency service charge 667,361 723,413 - -
Incentive 73,465,591 20,016,897 73,465,591 20,016,897
Contribution to provident fund 7,180,059 2,623,715 - -
Honorarium 1,986,452 2,553,345 - -
Salaries & Allowances 40,000 51,830 40,000 22,830
CDBL charges 2,392,444 3,130,392 2,392,444 3,130,392
92,812,882 34,646,005 80,546,708 26,900,332
21.00 Short Term Loan
Opening Balance 1,458,192,316 1,793,700,833 1,435,305,874 1,793,700,833
Loan taken during the year 714,938,493 - 695,479,862 -
2,173,130,809 1,793,700,833 2,130,785,736 1,793,700,833
Re-scheduled/repayment during the year - 335,508,517 - 358,394,959
Closing Balance 2,173,130,809 1,458,192,316 2,130,785,736 1,435,305,874
Detail of the above balance is presented below:
Loan taken as a short term
One Bank Limited 712,173,106 612,786,442 669,828,032 589,900,000
United Finance Limited 255,937,500 254,375,000 255,937,500 254,375,000
South Bangla Agriculture & Commerce Bank Ltd 205,400,680 17,513 205,400,680 17,513
Hajj Finance Limited 201,134,697 - 201,134,697 -
Sub total 2,173,130,809 1,458,192,316 2,130,785,736 1,435,305,874
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Annual Integrated
Report 2017
Amount in Taka
31.12.2017 31.12.2016 31.12.2017 31.12.2016
22.00 Provision for Current Tax
Opening Balance 131,526,247 20,797,427 130,954,733 20,936,859
Add: Provision during the year 288,059,813 110,728,820 287,138,130 110,017,875
419,586,060 131,526,247 418,092,863 130,954,733
Less: Adjustment during the year - - - -
419,586,060 131,526,247 418,092,863 130,954,733
23.00 Current portion of lease obligation
Opening balance 5,469,408 3,668,537 4,664,963 3,373,943
Add: Conversion from Long Term 1,957,686 5,832,247 1,000,787 4,728,179
7,427,094 9,500,784 5,665,750 8,102,122
Less: Paid during the year 4,934,313 4,031,376 4,097,118 3,437,159
Closing balance 2,492,781 5,469,408 1,568,632 4,664,963
24.00 Current portion of term loan
Opening balance 309,223,456 346,868,458 309,223,456 346,868,458
Add: Conversion from Long Term 391,627,062 309,223,456 391,627,062 309,223,456
700,850,518 656,091,914 700,850,518 656,091,914
Less: Paid during the year 309,223,456 346,868,458 309,223,456 346,868,458
Closing balance 391,627,062 309,223,456 391,627,062 309,223,456
Detail current portion of long term loan above balance is presented below:
Shahjalal Islami Bank Limited 2 8,466,661 8,466,661
LankaBangla Finance Limited 39,160,309 33,678,038 39,160,309 33,678,038
South Bangla Agriculture & Commerce Bank Ltd 74,191,273 67,062,060 74,191,273 67,062,060
South Bangla Agriculture & Commerce Bank Ltd 4 33,905,979 - 33,905,979 -
One Bank Limited - 75,449,998 - 75,449,998
Standard Bank Limited 78,371,001 - 78,371,001 -
Sub total 391,627,062 309,223,456 391,627,062 309,223,456
25.00 Provision for negative equity & others
Provision for negative equity (Note-25.01) 149,970,230 184,419,523 149,970,230 184,419,523
Diminution value of investment (Note-25.02) - 76,109,546 - 76,109,546
149,970,230 260,529,069 149,970,230 260,529,069
25.01 Provision for negative equity
Opening balance 184,419,523 355,884,791 184,419,523 355,884,791
Add: Addition during the year* - - - -
184,419,523 355,884,791 184,419,523 355,884,791
Less: Write off during the year 34,449,293 171,465,268 34,449,293 171,465,268
Closing balance 149,970,230 184,419,523 149,970,230 184,419,523
25.02 Diminution value of investment
Opening balance 76,109,546 68,618,678 76,109,546 68,618,678
Add: Addition during the year - 7,490,868 - 7,490,868
76,109,546 76,109,546 76,109,546 76,109,546
Less: Adjustment during the year 76,109,546 - 76,109,546 -
Closing balance - 76,109,546 - 76,109,546
26.00 Interest Suspense
Opening balance 810,164,046 810,164,046 810,164,046 810,164,046
Add: Addition during the year - - - -
810,164,046 810,164,046 810,164,046 810,164,046
Less: Write off during the year 636,060,718 - 636,060,718 -
Closing balance 174,103,328 810,164,046 174,103,328 810,164,046
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LankaBangla
Amount in Taka
31.12.2017 31.12.2016 31.12.2017 31.12.2016
27.00 Other Liabilities
Interest on short term loan 41,062,957 18,474,413 41,062,957 18,474,413
Liabilities for other expenses 4,265,357 3,062,163 3,787,123 2,346,250
Brokerage sharing 6,105,019 11,711,172 6,105,019 11,711,172
Liabilities for security deposit 72,608 72,608 - -
Premium brokerage service 3,620,833 1,801,481 3,620,833 1,801,481
LB Foundation 8,344,914 1,761,454 8,344,914 1,761,454
Cash dividend payable 2,941,013 - 2,941,013 -
Tax and VAT deducted at source 593,261 570,587 - -
Un-claimed cash dividend 1,987,307 3,122,445 1,987,307 3,122,445
68,993,269 40,576,323 67,849,166 39,217,215
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Annual Integrated
Report 2017
Amount in Taka
2017 2016 2017 2016
28.00 Interest income
Interest on debit balance of clients 495,894,420 401,494,843 495,894,420 401,494,843
Interest on bank deposit (Note-28.01) 98,466,339 51,697,423 98,369,326 51,550,052
594,360,758 453,192,265 594,263,745 453,044,894
28.01 Interest Income

Interest on Bank Deposit
One Bank Limited 94,865,050 49,768,925 94,768,037 49,621,554
Commercial Bank of Ceylon 331,551 296,252 331,551 296,252
National Credit and Commerce Bank Ltd 1,926,414 25,061 1,926,414 25,061
South Bangla Agriculture & Commerce Bank 48,145 23,690 48,145 23,690
Shahajalal Islami Bank limited - 208 - 208
Midland Bank Limited 32,541 555 32,541 555
Interest on FDR 1,262,638 1,582,732 1,262,638 1,582,732
98,466,339 51,697,423 98,369,326 51,550,052
29.00 Income from investment
Capital gain from shares investment (Note-29.01) 307,448,514 126,525,938 307,448,514 126,525,938
Dividend 56,562,077 69,625,422 56,562,077 69,625,422
364,010,592 196,151,360 364,010,592 196,151,360
29.01 Capital gain from shares investment
Sales price of shares 2,550,140,826 936,566,086 2,550,140,826 936,566,086
Less: Cost price of shares 2,242,671,446 809,932,799 2,242,671,446 809,932,799
307,469,379 126,633,287 307,469,379 126,633,287
Less: CDBL & Other charges 20,865 107,348 20,865 107,348
307,448,514 126,525,938 307,448,514 126,525,938
30.00 Brokerage income
DSE 1,040,277,123 512,819,038 1,040,277,123 512,819,038
CSE 94,323,157 43,746,828 94,323,157 43,746,828
1,134,600,280 556,565,866 1,134,600,280 556,565,866
31.00 Revenue from advertisement & circulation
Revenue from advertisement 130,717,503 95,371,440 - -
Revenue from circulation 12,353,621 10,604,270 - -
143,071,124 105,975,710 - -
32.00 Other operational income
Service charge from clients for CDBL 21,724,305 21,356,382 21,724,305 21,356,382
Income from Research project - 1,500,000 - -
Round table conference income 1,670,845 2,146,000 - -
Sponsorship income 5,872,157 1,943,043 - -
IT enable and Cloud services 1,031,672 1,067,650 - -
Scrap sales 3,133,984 2,537,144 299,900 414,719
Monthly review 141,450 97,800 141,450 97,800
33,574,413 30,648,019 22,165,655 21,868,901
33.00 Interest expenses
Interest on term loan 318,485,572 426,829,902 315,320,210 425,123,796
Interest on lease finance 707,987 1,353,657 408,378 949,682
319,193,558 428,183,560 315,728,587 426,073,478
34.00 Other costs directly attributable to services
Service charge paid to CDBL 43,408,593 22,105,199 43,408,593 22,105,199
Material consumption 23,830,946 21,900,083 - -
Factory overhead 73,174,707 71,266,643 - -
Hawla charges 926,578 847,498 926,578 847,498
Laga charges 82,947,130 38,156,413 82,947,130 38,156,413
224,287,954 154,275,836 127,282,301 61,109,110
35.00 Other non-operational income
Income from office space rent 10,119,756 9,901,875 10,119,756 9,901,875
Interest on loans and advances to employees 745,275 1,125,054 745,275 1,125,054
Gain on disposal of fixed assets 3,095,568 2,392,165 3,027,000 1,100,000
13,960,599 13,419,094 13,892,031 12,126,929
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LankaBangla
Amount in Taka
2017 2016 2017 2016
36.00 Salary and allowances
Salary and allowances 320,857,848 248,271,427 300,004,773 229,566,915
Provident fund contribution 14,123,917 11,200,204 13,780,094 10,867,639
Gratuity 25,009,390 23,505,500 24,499,130 23,243,714
Incentive 72,939,470 15,316,000 72,939,470 15,316,000
432,930,625 298,293,130 411,223,467 278,994,268
37.00 Rent, taxes, insurance, electricity etc.

Office rent 45,739,952 37,827,511 42,247,182 34,353,592
Insurance premium 7,171,762 6,443,538 6,413,310 5,647,411
Electricity 8,479,984 7,841,670 7,289,455 6,678,448
61,391,697 52,112,720 55,949,947 46,679,451
38.00 Legal and professional fees
Legal and professional fees 2,009,430 3,598,719 1,534,430 3,218,969
2,009,430 3,598,719 1,534,430 3,218,969
39.00 Postage, stamp, telecommunication etc.
Postage and courier 366,269 213,759 326,287 190,672
Telephone and mobile bill 5,136,823 4,727,302 4,813,358 4,374,651
5,503,092 4,941,061 5,139,645 4,565,323
40.00 Stationery, printing, advertisement
Printing and stationery 10,245,884 7,383,714 8,924,416 6,110,701
Advertisement 2,373,718 1,928,858 2,356,468 1,840,108
12,619,602 9,312,572 11,280,884 7,950,809
41.00 Director fees and expenses
Director fees and expenses 845,250 915,839 845,250 915,839
845,250 915,839 845,250 915,839
42.00 Audit fees
Audit fees 304,750 212,750 143,750 143,750
304,750 212,750 143,750 143,750
43.00 Repairs, maintenance and depreciation
Repairs and maintenance 962,930 1,656,316 962,930 1,656,316
Depreciation 35,575,056 27,014,891 33,190,913 24,219,536
36,537,986 28,671,207 34,153,843 25,875,852
44.00 Other expenses
Training 2,137,750 1,017,762 2,121,653 727,844
Membership and renewal fees 5,013,346 3,241,892 4,719,691 3,059,556
Traveling and conveyance 3,977,336 3,010,306 3,561,674 2,809,132
Internet and e-mail 12,118,841 11,840,701 11,266,258 11,107,752
News paper and periodicals 911,313 935,572 197,727 166,229
Fuel expenses 463,622 437,687 463,622 437,687
Vehicle maintenance/Registration 27,138,363 20,324,473 25,621,198 18,921,405
Water and sewerage bill 877,084 717,566 877,084 717,566
Office maintenance 14,121,701 11,189,589 11,568,483 8,436,615
Entertainment 7,233,920 6,354,913 6,688,897 5,768,685
Business promotion 26,309,212 15,996,439 19,929,536 15,070,880
Bank charges 1,262,154 1,360,598 1,150,421 1,278,566
Loss on disposal of fixed assets 145,235 580,097 145,235 344,391
AGM related expenses 68,467 40,000 68,467 40,000
Documentation fees 992,794 109,420 992,794 109,420
LB Foundation 8,344,914 1,761,454 8,344,914 1,761,454
Software maintenance fee 6,873,725 5,841,494 6,873,725 5,841,494
Subscription for Bloomberg & Portal 6,281,623 6,281,623 6,281,623 6,281,623
Commission of bank guarantee 12,863,244 6,566,590 12,863,244 6,566,590
Fair and conference 1,070,922 1,530,243 - -
Selling & distribution expenses 11,194,255 6,338,716 - -
Subscriptions 426,331 153,478 426,331 153,478
149,826,152 105,630,613 124,162,577 89,600,368
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Annual Integrated
Report 2017
Amount in Taka
2017 2016 2017 2016
45.00 Earnings per Share (EPS):
Net profit after Tax 821,864,830 148,846,554 826,146,466 174,430,078
Number of Ordinary Shares Outstanding 269,030,332 269,030,332 269,030,332 269,030,332
Earnings Per Share (EPS) 3.05 0.55 3.07 0.65
Earnings per Share has been calculated in accordance with BAS-33: "Earnings Per Share (EPS)".
*** Previous year's EPS has been restated by the current year's outstanding shares.
46.00 Related Party Disclosure
During the year the Company carried out a number of transactions with the related parties in the normal course of business on
arm's length basis. Name of those related parties, nature of those transaction and their total value have been shown below in
accordance with the provisions of IAS-24- "Related Party Disclosure."
Nature of Transaction
Name of the Party Relationship
Transaction Opening balance Addition Adjustment Closing balance
LankaBangla Finance Ltd. Sponsor Shareholder Term Loan (241,667,154) - 34,248,878 (207,418,276)
LankaBangla Investment Ltd. Sponsor Shareholder IP Accounts 98,014,857 - (176,054,679) (78,039,822)
BizBangla Media Limited Subsidiary Advances 75,000,000 7,000,000 - 82,000,000
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Annexure -A
318
Consolidated Schedule of Property, Plant & Equipment
LankaBangla
For the year ended December 31, 2017 Amount in Taka

COST DEPRECIATION
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Carrying
Charged Disposal amount as on
Particulars Balance as Additions Disposal Balance on Rate Balance as Balance on
of
during the during the
on January during the during the December on January December December 31,
Depreciation year year 2017
1, 2017 year year 31, 2017 1, 2017 31, 2017
Building 106,454,150 237,249,700 - 343,703,850 2.5% 14,691,050 5,626,975 - 20,318,025 323,385,825
Furniture & Fixtures 12,277,923 8,157,468 195,623 20,239,768 10% 5,011,355 1,575,505 119,398 6,467,462 13,772,306
Office Equipment 84,396,084 19,729,053 1,999,377 102,125,760 20% 64,069,785 7,938,450 1,930,367 70,077,868 32,047,891
Data Center & Dr 73,280,677 439,000 - 73,719,677 30% 68,481,513 2,211,776 - 70,693,289 3,026,388
Office Renovation 75,550,920 25,989,507 2,326,505 99,213,922 20% 45,374,784 12,940,902 2,326,505 55,989,181 43,224,741
Motor Vehicle 11,194,670 2,620,000 155,000 13,659,670 20% 4,074,412 1,759,525 114,368 5,719,569 7,940,101
Software 6,774,168 1,462,224 - 8,236,392 33.33% 5,030,767 2,187,266 - 7,218,033 1,018,359
Leased Asset 32,227,990 5,242,000 4,290,990 33,179,000 20% 26,808,890 3,718,800 4,290,990 26,236,700 6,942,300
Total December 31, 2017 402,156,581 300,888,952 8,967,495 694,078,039 233,542,555 37,959,199 8,781,628 262,720,127 431,357,912
Total December 31,2016 391,330,257 32,760,764 21,934,440 402,156,581 222,453,358 29,810,246 18,721,048 233,542,555 168,614,026
Annexure -B
Schedule of Property, Plant & Equipment
For the year ended December 31, 2017 Amount in Taka
COST DEPRECIATION
Carrying
Balance as Additions Disposal Balance on Rate Balance as Charged Disposal Balance on amount as on
Particulars
on January during the during the December of on January during the during December December 31,
Depreciation 2017
1, 2017 year year 31, 2017 1, 2017 year the year 31, 2017
Building 106,454,150 237,249,700 - 343,703,850 2.5% 14,691,050 5,626,975 - 20,318,025 323,385,825
Furniture & Fixtures 11,589,514 8,114,024 195,623 19,507,915 10% 4,817,761 1,521,679 119,398 6,220,043 13,287,872
Office Equipment 62,787,502 18,817,927 1,999,377 79,606,052 20% 50,244,848 6,199,496 1,930,367 54,513,977 25,092,074
Data Center & Dr 73,280,677 439,000 - 73,719,677 30% 68,481,513 2,211,776 - 70,693,289 3,026,388
Office Renovation 63,961,710 25,948,000 2,326,505 87,583,205 20% 38,026,716 12,084,372 2,326,505 47,784,583 39,798,622
Motor Vehicle 1,360,000 2,620,000 - 3,980,000 20% 408,000 534,000 - 942,000 3,038,000
Software 2,956,822 1,462,224 - 4,419,046 33.33% 1,927,673 1,473,015 - 3,400,688 1,018,358
Leased Asset 30,827,990 5,242,000 4,290,990 31,779,000 20% 26,304,889 3,539,600 4,290,990 25,553,499 6,225,501
Total December 31, 2017 353,218,364 299,892,875 8,812,495 644,298,745 204,902,450 33,190,913 8,667,260 229,426,104 414,872,640
Total December 31,2016 342,315,050 24,376,229 13,472,915 353,218,364 193,811,439 24,219,536 13,128,524 204,902,450 148,315,914
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Report 2017
Annual Integrated
320
STATEMENT FINANCIAL POSITION
As at December 31, 2017
Amount In Taka
Particulars Notes
31.12.2017 31.12.2016 Budget 2017 Variance %
Revenue
Interest Income 28 594,263,745 453,044,894 511,009,686 16.29
Income from investment 29 364,010,592 196,151,360 244,143,121 49.10
Brokerage income 30 1,134,600,280 556,565,866 1,345,975,968 (15.70)
Other operational income 32 22,165,655 21,868,901 15,656,545 41.57
Total Revenue 2,115,040,272 1,227,631,021 2,116,785,321 (0.08)
Cost of services (443,010,888) (487,182,588) (528,731,192) (16.21)
Interest expenses 33 315,728,587 426,073,478 373,914,782 (15.56)

Other costs directly attributable to services 34 127,282,301 61,109,110 154,816,410 (17.79)
Gross profit 1,672,029,384 740,448,433 1,588,054,129 5.29
Other non-operational income 35 13,892,031 12,126,929 11,754,500 18.18
Operating expenses (644,433,792) (457,944,630) (559,157,513) 15.25

Salary and allowances 36 411,223,467 278,994,268 352,136,420 16.78
Rent, taxes, insurance, electricity etc. 37 55,949,947 46,679,451 54,195,878 3.24
Legal & professional fees 38 1,534,430 3,218,969 1,500,000 2.30
Postage, stamp, telecommunication etc. 39 5,139,645 4,565,323 5,614,557 (8.46)
Stationery, printing, advertisement 40 11,280,884 7,950,809 12,234,995 (7.80)
Director fees and expenses 41 845,250 915,839 1,035,000 (18.33)
Audit fees 42 143,750 143,750 143,753 (0.00)
Repairs, maintenance and depreciation 43 34,153,843 25,875,852 26,374,881 29.49
Other expenses 44 124,162,577 89,600,368 105,922,029 17.22
Operating profit before provisions 1,041,487,623 294,630,732 1,040,651,116 0.08
Other Provisions 76,109,546 (7,490,868) - -
For diminution in value of investment (76,109,546) 7,490,868 - -
Profit before tax (PBT) 1,117,597,169 287,139,864 1,040,651,116 7.39
Income tax income/ (expense) (291,450,703) (112,709,786) (302,678,146) (3.71)

Current tax expense 287,138,130 110,017,875 297,678,146 (3.54)
Deferred tax expense 4,312,573 2,691,911 5,000,000 (13.75)
Profit after tax (PAT) 826,146,466 174,430,078 737,972,970 11.95

Basic 45 3.07 0.65 2.74 11.95
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Audited Financial Statements LankaBangla Investments Limited
321
Annual Integrated
Report 2017
LANKABANGLA INVESTMENTS LIMITED
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322
LankaBangla
Independent Auditors’ Report

We have audited the accompanying financial statements We believe that the audit evidence we have obtained is sufficient
of LankaBangla Investments Limited (“the company”), and appropriate to provide a basis for our audit opinion.
which comprise the Statement of Financial Position as at
31 December 2017, and the Statement of Profit or Loss and Opinion
Other Comprehensive Income, Statement of Changes in In our opinion, the financial statements give a true and fair view
Equity, Statement of Cash Flows for the year then ended, of the financial position of the company as at 31 December 2017
and a summary of significant accounting policies and other and of its financial performance and its cash flows for the year
explanatory information. then ended in accordance with Bangladesh Financial Reporting
Standards (“BFRS”) and comply with the Companies Act 1994
Management’s Responsibility for the Financial and other relevant laws & regulations.
Statements
Management is responsible for the preparation and fair Report on Other Legal and Regulatory Requirements
presentation of these financial statements in accordance
with Bangladesh Financial Reporting Standards (BFRS), the
Companies Act 1994, the Securities and Exchange Rules 1987 i) We have obtained all the information and explanation which
and other applicable laws and regulations and for such internal to the best of our knowledge and belief were necessary
control as management determines is necessary to enable the for the purposes of our audit and made due verification
preparation of financial statements that are free from material thereof;
misstatement, whether due to fraud or error. ii) In our opinion, proper books of account as required by law
have been kept by the company so far as it appeared from
Auditors’ Responsibility our examination of those books;
Our responsibility is to express an opinion on these financial
iii) The Statement of Financial Position and the Statement of
statements based on our audit. We conducted our audit in
Profit or Loss and Other Comprehensive Income dealt with
accordance with Bangladesh Standards on Auditing (BSA). Those
by the report are in agreement with the books of account.
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.
evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors' Place : Dhaka Syful Shamsul Alam & Co.
judgement, including the assessment of the risks of material Date: 13 February 2018 Chartered Accountants
misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, we consider
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,
statements.
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LANKABANGLA INVESTMENTS LIMITED 323

Annual Integrated
STATEMENT OF FINANCIAL POSITION Report 2017
Amount In Taka
Particulars Notes
31.12.2017 31.12.2016
Assets
Non-current assets
Property, plant and equipment 4 10,958,350 11,490,014
Intangible assets 5 125,669 178,334
Investments 6 205,359,352 286,364,785
Deferred tax asset 20 - -
Other non-current assets 7 3,815,254 2,431,064
Total non-current assets 220,258,625 300,464,197
Current assets
Margin loan 8 1,915,459,376 2,473,812,503
Investments 10 464,583,185 207,084,447
Accounts receivable 11 120,468,243 37,946,133
Cash and cash equivalents 12 237,698,683 177,739,112
Total assets 2,989,287,609 3,250,767,211
Equity and liabilities

Equity
Share capital 13 1,670,000,000 1,670,000,000
Retained earnings (1,223,889,794) (1,228,250,642)
Total equity 446,110,206 441,749,358
Liabilities
Non current liabilities
Non Current Portion of Term loan 14.01 - -
Defined benefit obligations (gratuity) 15 10,383,654 7,097,964
Total non-current liabilities 10,383,654 7,097,964
Current liabilities
Accounts payable 16 86,127,246 107,405,706
Short term loans 17 2,390,752,778 2,525,206,559
Current portion of term loan 18 - 10,789,043
Provision for current tax 19 14,533,934 19,079,642
Provision for margin loan & others 21 41,086,016 138,910,361
Other liabilities 22 293,777 528,578
Total equity and liabilities 2,989,287,609 3,250,767,211
Director Director Chief Executive Officer Company Secretary
This is the Financial Position referred to in our separate report of even date.

Place : Dhaka Syful Shamsul Alam & Co.
Date: 13 February 2018 Chartered Accountants
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324
LankaBangla LANKABANGLA INVESTMENTS LIMITED
Amount In Taka
Particulars Notes
2017 2016
Revenue 375,546,995 256,698,651
Interest income 23 126,936,747 97,960,075
Fee based income 25 102,010,307 90,556,451
Cost of services 253,076,875 301,799,703

Interest expenses 27 249,724,821 298,517,275
Other costs directly attributable to services 28 3,352,054 3,282,428
Gross profit/(loss) 122,470,120 (45,101,051)

Other non-operational income 29 13,800 91,229
Operating expenses 80,596,467 69,379,733
Rent, insurance, utilities etc. 31 10,772,232 14,134,773
Legal & professional fees 32 464,776 469,693
Postage, stamp, telecommunication etc. 33 892,620 756,166
Stationery, printing, advertisement 34 2,635,049 914,445
Director fees and expenses 35 569,250 672,750
Audit fees 36 143,750 195,500
Other expenses 38 7,374,784 3,103,122
Net Operating Income/(Loss) 41,887,452 (114,389,556)
Provisions for loans / investments 37,526,605 313,531,665

Provision for margin loan 36,766,605 313,531,665
Provision for diminution in value of investments - -
Provision for other assets 760,000 -
Profit before tax (PBT) 4,360,848 (427,921,221)
Income tax expense / (income) 19.01 - -
Current tax expense / (income) - -
Deferred tax expense / (income) - -
Profit after tax (PAT) 4,360,848 (427,921,221)
Other comprehensive income/(expense), net of tax - -
Total comprehensive income 4,360,848 (427,921,221)
Earning Per Share(EPS) 39 0.03 (2.56)

This is the Statement of Comprehensive Income referred to in our separate report of even date.

Date: 13 February 2018 Chartered Accountants
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LANKABANGLA INVESTMENTS LIMITED Annual Integrated
STATEMENT OF CHANGES IN EQUITY Report 2017
(Amount in Taka)
Particulars Share Capital Retained Earnings Total Equity
Balance at 01 January 2016 1,670,000,000 (800,329,421) 869,670,579
Total comprehensive income for the year - (427,921,221) (427,921,221)
Balance at 31 December 2016 1,670,000,000 (1,228,250,642) 441,749,358
Balance at 01 January 2017 1,670,000,000 (1,228,250,642) 441,749,358

Total comprehensive income for the year - 4,360,848 4,360,848
Balance at 31 December 2017 1,670,000,000 (1,223,889,794) 446,110,206
Place : Dhaka
Date: 13 February 2018
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STATEMENT OF CASH FLOWS
For the year ended December 2017
Amount In Taka
Particulars
2017 2016
Cash received from:
- Fees and other income 24,071,818 27,952,667
- Repayment of staff loan 1,780,900 5,310
Cash paid for:
- Rental expenses (9,421,768) (12,344,169)
- Advance for office rent (293,400) (2,640,436)
- IT related expenses (588,482) (492,902)
- PF bank account (3,649,376) (3,040,093)
- Employees' salaries and allowances (46,392,648) (35,139,201)
- Staff loan (3,855,000) (1,775,000)
- Other operating expenses (18,708,007) (13,959,586)
Cash generated from operating activities before changes in operating assets (57,055,963) (41,433,409)
and liabilities
Settlement with LankaBangla Securities Limited 555,494,172 996,160,532
Client deposits 461,582,421 317,803,871
Own portfolio investment (10,000,000) (7,155)
Client withdrawals (473,840,147) (210,381,832)
533,236,445 1,103,575,417
Cash generated from operating activities 476,180,482 1,062,142,007
Income taxes paid-Corporate - -
Income taxes paid-Others (1,191,006) (55,170)
Net cash from operating activities 474,989,476 1,062,086,837

Proceeds from sale of own portfolio securities 37,500,000 54,500,000
Proceeds from sale of disposed assets 24,000 41,500
Dividend on own portfolio investment 10,778,800 26,685,078
Return for Non-allotted securities 4,438,530 258,100
Advance for Right Shares (4,120,000) (16,460,946)
Advance for Bidding/Underwriting share (64,471,190) (21,858,997)
Advance for Capital Working in Progress (627,046) (7,195,350)
Procurement of property, plant and equipment (3,510,320) (1,651,435)
Net cash used in investing activities (19,987,226) 34,317,949
Repayment of loan from ICB (10,789,043) (41,332,214)
Interest payment on Loan from ICB (65,034) (2,579,202)
Repayment of loan from LankaBangla Finance Limited (133,620,273) (569,941,723)
Interest payment on loan from LankaBangla Finance Limited (250,568,329) (310,137,176)
Net cash used in financing activities (395,042,679) (923,990,316)
D) Net increase/(decrease) in cash and cash equivalents (A+B+C) 59,959,571 172,414,471
E) Cash and cash equivalents at beginning of the year 177,739,112 5,324,642
F) Cash and cash equivalents at the end of the year 237,698,683 177,739,112

Place : Dhaka
Date: 13 February 2018
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LANKABANGLA INVESTMENTS LIMITED 327

Annual Integrated
NOTES TO THE FINANCIAL STATEMENTS Report 2017
1.00 Reporting entity

1.01 Company profile
LankaBangla Investments Limited (hereinafter referred to as “LBIL” or “the Company”) was incorporated in Bangladesh with the
Registrar of Joint Stock Companies and Firms (RJSC) vide registration no. C 83568/10 dated 29 March 2010 as a private limited
company under the Companies Act, 1994. Later on, the company converted itself into a public limited company with effect
from 12 June 2013. The Company has obtained Merchant Banking license (registration certificate no. MB-57/2010) from the
Bangladesh Securities and Exchange Commission on 2 January 2011. The registered office of the Company is 20, Kemal Ataturk
Avenue, Banani, Dhaka-1213; Besides the registered office, corporate address of the company is City Center, Level # 24, 90/1
Motijheel C/A, Dhaka-1000. This Company is a fully owned subsidiary of LankaBangla Finance Limited.

Currently the company has following licenses, Membership and legal approvals :
Sl Registration/
License/ Membership Date of issue Issuing Authority Renewed up to
No. Membership No.
Registrar of Joint Stock
1 Registration Number C 83568/10 29 March 2010 Companies and Firms N/A
(RJSC)
Dhaka South City
2 Trade License 0532513 07 July 2010 FY 2017-2018
Corporation (DSCC)
Bangladesh Securities
3 Merchant Banking License MB-57/2010 2 January 2011 and Exchange N/A
Commission (BSEC)
National Board of
4 Tax Identification Number 383900505101 30 July 2013 N/A
Revenue (NBR)
National Board of
5 VAT Registration Number 19031087563 15 November 2016 N/A
Revenue (NBR)
Membership of Dhaka Dhaka Chamber of
6 Chamber of Commerce & 01302 27 April 2013 Commerce & Industries N/A
Industries (DCCI)
Membership of Bangladesh Bangladesh Merchant
7 Merchant Bankers' N/A N/A Bankers' Association December 2018
Association (BMBA) (BMBA)
1.02 Nature of business

The activities of the Company include services broadly classified as interest income and fee based services, such as underwriting of
securities, issue management, register to issue, portfolio management, corporate advisory services etc.
2.00 Basis of preparation
The financial statements comprise of :
a) Statement of Financial Position as at 31 December 2017;
b) Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2017;
c) Statement of Changes in Equity for the year ended 31 December 2017;
d) Statement of Cash Flows for the year ended 31 December 2017; and
e) Notes to the Financial Statements.
The financial statements have been prepared in accordance with Bangladesh Financial Reporting Standards (BFRS), rules and
regulations issued by Bangladesh Securities and Exchange Commission and Companies Act 1994. In case of any rules and
regulations issued by Bangladesh Securities and Exchange Commission differs from those of other regulatory authorities, the
rules and regulations issued by Bangladesh Securities and Exchange Commission shall prevail.
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2.03 Disclosure of departure

The departures from BAS and BFRS in the financial statements for 31 December 2017 are stated below:
Sl Nature of Title of the Treatment of the Treatment adopted as per Financial or presentation
No. Departure BAS/BFRS BAS/BFRS regulator effect of departure
1 Valuation & BAS-39 : Investment in As per DFIM circular No. 11 dated If the BAS would be followed
impairment 'Financial quoted share falls
23 December 2009, investment value of investments presented
of Instruments: under the category
in quoted share is revalued at would be higher by BDT
Investments Recognition and the year end at market price and
of either ' at fair 553,281,737 and the same
in quoted measurement' value through profit
provision should be made for figure would be for 'Unrealized
shares or loss' or 'available
any loss arising from diminution Gain'. There is no unrealized
for sale' wherein value of investment; however loss(portfolio basis) as at
any change in the
in case of the unrealized gain 31 December 2017 and no
fair value at the
no such gain can be recognized requirement to keep provision
and investments are presented
year end is taken as per the stated circular.
through Income at cost only. As per circular
Statement or of Bangladesh Securities and
Exchange Commission circular #
Statement of Other
Comprehensive SEC/CMRRCD/2009 - 193/203)
Income and dated 28 December 2017,
respectively. the required provisions for the
year 2017 on principal portion of
margin loan is to be kept at 20%
in the five installments starting
from December 2017.
2 Provision BAS-39 : Measurement of As per circular of Bangladesh As per the requirement of the
for Margin 'Financial loan after initial Securities and Exchange BSEC circular LBIL kept only
Loan Instruments: recognition at Commission circular # SEC/ erosion of principal portion
(Loans and Recognition and amortized cost and CMRRCD/2009-193/203) and of Margin Loan as provision.
receivables) measurement' recording of changes dated 28 December 2017, the As on 31 December 2017
through profit and required provisions for the year provision on margin loan is
loss. 2017 on principal portion of amounting BDT 41,086,016.
margin loan is to be kept at 20%
in the five installments starting
from December 2017.
2.04 Basis of accounting and measurement

The financial statements have been prepared on a going concern basis following accrual basis of accounting except for cash flow
statement and financial instruments at fair value through profit or loss.
2.05 Functional and presentation currency and level of precision
The financial statements are presented in Bangladesh currency Taka (Taka/Tk), that is the Company's functional currency. All
financial information presented in Taka has been rounded to the nearest Taka.
The preparation of the financial statements in conformity with BFRS requires management to use judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised.
2.07 Going concern
The Company has adequate resources to continue in operation for foreseeable future. For this reason the directors continue to
adopt going concern basis in preparing the accounts. The current credit facilities and resources of the Company provide sufficient
funds to meet the present requirements of its existing businesses and operations.
Each material item as considered significant by management, has been presented separately in financial statements. No amount
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2.09 Consistency
In accordance with the BFRS framework for the presentation of financial statements together with BAS 1 and BAS 8, LankaBangla
Investments Limited applies the accounting disclosure principles consistently from one period to the next. In case of selecting
and applying new accounting policies, changes in accounting policies applied and correction of errors, the amounts involved are
accounted for and disclosed retrospectively in accordance with the requirement of BAS-8.
2.10 Contingent asset and contingent liability
The Company does not recognize any Contingent Asset and Contingent Liability; but discloses the existence of contingent liability
in the financial statements. A contingent liability is a probable obligation that arises from the past events and whose existence
will be confirmed by the occurrence of uncertain future events beyond the control of the Company or a present obligation that
is not recognized because of outflow of resources is not likely or obligation cannot be measured reliably.
2.11 Books of account
The Company maintains its books of account for main business in Electronic Form through soft automation.
2.12 Reporting period
The financial period of the Company has been determined to be from 1 January to 31 December each period. These financial
statements cover the period from 01 January 2017 to 31 December 2017.
2.13 Events after the Reporting Period
Where necessary, all the material events after the reporting period is considered and appropriate adjustments /disclosures is
made in the financial statements in accordance with BAS 10 - Events After Balance Sheet Date.
Comparative information has been disclosed in respect of the period ended 31 December, 2017 for all numerical data in the
financial statements and also the narrative and descriptive information when it is relevant for better understanding of the
current year’s financial statements. Figures of the year 2016 have been rearranged whenever considered necessary to ensure
comparability with the current period.
2.15 Directors’ responsibility statement
The Board of Directors takes the responsibility for the preparation and presentation of these financial statements.
The Board of Directors has authorized these financial statements for public issue on 13 February 2018.
3.00 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
3.01 Recognition and measurement (PPE)
Items of property, plant and equipment are measured initially at cost and subsequently at cost less accumulated depreciation
in compliance with Bangladesh Accounting Standard (BAS) 16 Property, Plant and Equipment. The cost of acquisition of an asset
comprises its purchase price and any direct cost for bringing the asset to its working condition for its intended use. Expenditures
incurred after the assets have been put into use, such as repairs and maintenance is normally charged off as revenue expenditure
in the period in which it is incurred. Software and all upgradation/enhancement are generally charged off as revenue expenditure
unless they bring similar significant additional benefits.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
3.02 Subsequent costs of PPE
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured
reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in the Statement of Profit or Loss
and Other Comprehensive Income as incurred.
3.03 Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and
if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item
of property, plant and equipment. For addition to property, plant and equipment, depreciation is charged from the month of
capitalization and no depreciation is charged in the month of disposal. Land is not depreciated.
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The rates at which property, plant and equipment are depreciated for current and comparative years are as follows:
Category of assets Rate of Depreciation
Office equipment 33.33%
Furniture and fixture 15%
Motor vehicle 25%
Interior works movable 15%
Interior works immovable 18%

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
3.04 Disposal of PPE
Gains and losses on disposal of an item of property, plant and equipment are to be determined by comparing the proceeds from
disposal with the carrying amount of the property, plant and equipment disposed off and are recognized net with “other non-
operational income” in profit or loss.
3.05 Impairment of PPE
The carrying amounts of PPE are reviewed at each reporting date to determine whether there is any indication of impairment.
An impairment loss is recognized in profit or loss if the carrying amount of an asset exceeds its estimated recoverable amount.
However, no such condition that might be suggestive of a heightened risk of impairment of assets existed at the reporting date.

3.06 Margin Loan
Margin loan represents outstanding loan balance provided to portfolio clients. Margin loan is provided as per the guidelines of
Bangladesh Securities and Exchange Commission (BSEC). Margin loan is provided only against the purchase of marginable shares.
Margin loan is created if a client purchases shares in excess of his own fund. Margin loan is presented in the financial statements
as net of suspense (if any) created against the loan.
Intangible assets are to be initially recognized at cost including any directly attributable cost. Intangible assets that have finite
useful lives are measured at cost less accumulated amortization and accumulated impairment losses. Subsequent expenditure
is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. Intangible
assets include software, integrated systems along with related hardware. Amortization is to be provided on a straight-line basis
at 20% to write off the cost of intangible assets. Amortization methods, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
3.08 Financial instruments
Non-derivative financial instruments comprise investments in shares and FDR, trade receivables, cash and cash equivalents,
margin loans, share capital and interest - bearing borrowings.
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A
financial asset is considered to be impaired if objective evidence indicates that one or more events have occurred indicating a
negative effect on the estimated future cash flows from that asset. All impairment losses are recognized in Statement of Profit or
Loss and Other Comprehensive Income.
3.09 Investment in FDR (Fixed Deposit Receipt)
If the Company has the positive intent and ability to hold FDR to maturity, then such financial assets are classified as held to
maturity. Held-to-maturity financial assets are recognized initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, held-to- maturity financial assets are measured at amortized cost using the effective interest
method, less any impairment losses.
3.10 Advances, deposits and prepayments
Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions, adjustments or
charges to other account heads such as property, plant and equipment or expenses. Deposits are measured at payment value.
Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to statement of
comprehensive income.
Cash and cash equivalents comprise cash balances and all call deposits with original maturities of three months or less.
Bank overdrafts that are repayable on demand form an integral part of the Company's cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
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3.12 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 Company.
3.13 Share capital
Only ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary share are
recognized as a deduction from equity, net of any tax effects.
3.14 Borrowings
Interest-bearing borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortized cost using the effective interest method.
3.15 Employee benefits
The Company operates an unrecognized gratuity scheme, provision in respect of which is made periodically covering all its
permanent eligible employees. This scheme is qualified as defined benefit plan. There is also a recognized provident fund for all
permanent employees of the Company. This qualifies as defined contribution plan.
3.15.1 Defined contribution plans (provident fund)
Defined contribution plan is a post employment benefit plan under which the Company provides benefits to one or more
employees. The recognized Employees Provident Fund is being considered as defined contribution plan as it meets the recognition
criteria specified for this purpose. All permanent employees contribute 10% of their basic salary to the provident fund and the
Company also makes equal contribution.
The Company recognizes contribution to defined contribution plan as an expense when an employee has rendered services in
exchange for those contribution. The legal and constructive obligation is limited to the amount it agrees to contribute to the
fund.
3.15.2 Defined benefit plans (gratuity)
Defined benefit plan is a retirement benefit plan under which amounts to be paid as retirement benefits are determined by
reference to employees' earnings and/or year of services. The Company's obligation is to provide the agreed benefits to current
employees as per condition of the fund.
The Company operates an unfunded gratuity scheme. Employees are entitled to gratuity benefit at the following rates:
Year of Confirmed Services % of entitlement

5 years and above 150% of Last Basic Salary
The actuarial valuation has not yet been made to assess the adequacy of the liabilities provided for the scheme.
3.15.3 Group life insurance scheme and health insurance
The Company has a group life insurance scheme for all of its permanent employees. It has also a health insurance scheme for all
of its permanent employees including their spouse and children.
3.16 Corporate Tax
3.16.1 Current tax
Income tax expense is recognized in profit or loss. Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
years. The Company qualifies as a "Merchant Bank"; hence the applicable corporate tax rate is 37.50% as per the Finance Act
2017.
3.16.2 Deferred tax
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied
to the temporary differences when they are reversed, based on the laws that have been enacted or substantively enacted by the
reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity.
A deferred tax asset/liabilities is recognized to the extent that it is probable that future taxable profits will be available against
which temporary differences can be utilized. Deferred tax assets/liabilities is reviewed at each reporting date and are reduced to
the extent that it is probable that the related tax benefit will be realized.
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3.16.3 Tax exposures

In determining the amount of current and deferred tax, the Company takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve
a series of judgments about future events. New information may become available that causes the Company to change its
judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period
that such a determination is made.
3.17 Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

3.18 Contingencies
Contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has
been incurred and the amount can be reasonably estimated.
As per Bangladesh Accounting Standard (BAS) 18 Revenue, revenue is recognized when it is probable that the economic benefits
associated with the transaction will flow to the Company and the amount of revenue and the cost incurred or to be incurred in
respect of the transaction can be measured reliably.
3.19.01
Interest on Margin Loan
Interest is charged on client's balance (due to LBIL) on daily basis at the applicable rate. Interest charged to margin loan that
results to negative equity is not probable that the economic benefit associated with that portion will not flow to the company.
So, as per paragraph 29 of "BAS-18 : Revenue" this is not recognized in income. Whenever the probability arises that the benefit
will flow to the company this is recognized in income.
3.19.02
Management fee
Management fee is charged on client's portfolio value (at market price) on daily basis at the applicable rate. Management fee
charged to a client that results to negative equity is not probable that the economic benefit associated with that portion will not
flow to the company. So, as per paragraph 20 of "BAS-18 : Revenue" this is not recognized in income. Whenever the probability
arises that the benefit will flow to the company this is recognized to income.
3.19.03
Fee based income
Fee based income is recognized when a service is rendered in line with the related agreement.
3.19.04
Investment income
Interest income on investments is recognized on accrual basis. Capital gain on investments in shares is also included in investment
income. Capital gain is recognized when it is realized.
3.19.05
Dividend income on shares
Dividend income on shares is recognized during the year in which it is declared and ascertained.
3.19.06 Earnings Per Share (EPS)
Earnings Per Share (EPS) is calculated by dividing total earnings available for ordinary share holders by weighted average number
of shares outstanding for the year.
3.20 Statement of cash flows
The net cash flow from operating activities is determined for the year under direct method as per Bangladesh Accounting
Standard (BAS)- 7 Statement of Cash Flows.
3.21
Financial risk management
The company has provided in separate notes the information about the company's exposure to each of the following risks, the
company's objectives, policies and processes for measuring and managing risks and the company's management of capital.
• Credit risk
• Liquidity risk
• Market risk
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Amount In Taka
31.12.2017 31.12.2016
4.00 Property,plant & equipment
Cost
Opening balance 25,961,033 24,623,653
Add: Addition during the year 3,551,669 9,848,962
29,512,702 34,472,615
Less: Disposal during the year 225,098 8,511,582
Closing balance 29,287,604 25,961,033
Less: Accumulated depreciation

Opening balance 14,471,019 19,464,526
Add: Charged during the year 4,007,599 3,442,268
Less: Adjustment on disposal 18,478,617 22,906,794
Closing balance 149,364 8,435,775
18,329,253 14,471,019
Carrying amount 10,958,350 11,490,014
A schedule of property, plant & equipment is given in Annexure-A.
Cost
Opening balance 1,045,654 1,045,654
Add: Addition during the year - -
1,045,654 1,045,654
Less: Disposal during the year - -
Closing balance 1,045,654 1,045,654
Less: Accumulated amortization
Opening balance 867,320 695,473
Add: Charged during the year 52,666 171,847
919,985 867,320
Less: Adjustment on disposal - -
Closing balance 919,985 867,320
Carrying amount 125,669 178,334
A schedule of intangible assets is given in Annexure-B.

6.00 Investments
Non-Current portion:
Investment in equity of strategic company (Note-6.01) 202,359,352 286,364,785
Investment-LankaBangla Equity Sharing Scheme 3,000,000 -
205,359,352 286,364,785
6.01 Investment in equity of strategic company
Market Price as Unrealized

Particulars Cost Price
on 31.12.207 Gain/(Loss)
Engineering 1,168,950 2,994,000 1,825,050
IT Sector 33,686,689 73,272,000 39,585,311
Financial Instutions 160,160,000 715,200,000 555,040,000
Insurance 7,343,713 7,150,000 (193,713)
202,359,352 798,616,000 596,256,648
7.00 Other non-current assets
Non current portion:
Advances (Note- 9.01) 2,790,334 1,699,544
Deposits (Note- 9.01) 1,024,920 731,520
3,815,254 2,431,064
8.00 Margin loan
Revolving margin loan to clients 1,915,459,376 2,473,812,503
1,915,459,376 2,473,812,503
Margin loan refers to the amount provided by the company to the clients for buying shares in proportionate to their own
equity as per SEC guideline.
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Amount In Taka
31.12.2017 31.12.2016
9.00 Advances, deposits and prepayments
Advances (Note-9.01 and 9.02) 33,355,529 55,195,654
Deposits (Note- 9.01) 1,024,920 731,520
Prepayments (Note- 9.01 and 9.02) 254,300 224,709
34,634,749 56,151,883
9.01 Non current portion
Advances
Loan to employees 2,790,334 1,699,544
2,790,334 1,699,544
Deposits
Security deposit 1,024,920 731,520
1,024,920 731,520
3,815,254 2,431,064
9.02 Current portion
Advances
Advance to Employees 812,886 584,735
Advance against expenses 143,730 154,064
Advance income tax 24,295,139 22,657,311
Advance for capital expenditure 600,000 100,000
Advance for investment in shares 4,713,440 30,000,000
30,565,195 53,496,110
Prepayments
Prepayment against expenses 254,300 224,709
254,300 224,709
30,819,495 53,720,819
9.02.01 Advance income tax
Opening balance 22,657,311 18,934,223
28,840,847 28,608,352
Less: Adjustment for prior year:
Correction for assessment year 2013-2014 - (2,530,355)
Assessment year 2014-2015 - 3,803,831
Assessment year 2015-2016 - 3,254,706
Assessment year 2016-2017 - 1,422,859
Assessment year 2017-2018 4,545,708 -
4,545,708 5,951,041
24,295,139 22,657,311
*As assessment year 2014-15, 2015-2016, 2016-2017 and 2017-2018 have been completed, so respective assessed
amount has been reflected in the accounts in accordance with BAS 10.
10.00 Investments
Current portion :
Investments in listed securities (Note-10.01) 464,583,185 207,084,447
464,583,185 207,084,447
10.01 Investments in listed securities
Bank 146,888,474 136,433,893 (10,454,581)
Cement 40,587,091 33,392,500 (7,194,591)
Engineering 47,418,858 42,945,331 (4,473,527)
Financial Institutions 13,166,561 13,430,758 264,197
Food & Allied 13,707,348 12,973,500 (733,848)
Fuel & Power 75,973,458 68,612,900 (7,360,558)
Miscellaneous 21,047,959 19,239,000 (1,808,959)
Mutual Funds 51,134,945 48,822,912 (2,312,032)
Pharmaceuticals & Chemicals 28,206,991 23,461,100 (4,745,891)
Services & Real Estate 5,349,564 3,773,000 (1,576,564)
Textile 21,101,934 18,523,380 (2,578,554)
464,583,185 421,608,274 (42,974,911)
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Break-up of Investment in listed securities

Non-current portion (Note - 6) 202,359,352 798,616,000 596,256,648
Current portion (Note - 10.01) 464,583,185 421,608,274 (42,974,911)
Total 666,942,537 1,220,224,274 553,281,737
Amount In Taka
31.12.2017 31.12.2016
Receivable from group entities (Note - 11.01) 78,040,781 -
Other receivables (Note - 11.02) 42,427,463 37,946,133
120,468,243 37,946,133
11.01 Receivable from group entities
LankaBangla Securities Limited 78,040,781 -
78,040,781 -
11.02 Other receivables
Registrar to the Issue fees receivable 1,900,000 -
Issue management fees receivable 7,822,354 3,772,500
Corporate advisory fees receivable 4,900,000 1,112,150
Accounts receivables - PO department 23,051,916 30,663,233
Dividend Receivable-Own Portfolio 4,753,193 2,375,750
Receivables for Reinbursable Expenses - 22,500
42,427,463 37,946,133
Cash in hand 10,580 11,512
Cash at bank (Note- 12.01) 237,688,103 177,727,600
237,698,683 177,739,112
12.01 Cash at bank
One Bank Limited 236,411,606 177,171,325
Dhaka Bank Limited 204,912 200,618
Shahjalal Islami Bank Limited 145,344 146,644
The City Bank Limited 79,745 80,435
Standard Chartered Bank 845,365 128,578
Islami Bank Bangladesh Ltd 1,131 -
237,688,103 177,727,600
13.00 Share capital
Authorized:
300,000,000 Ordinary shares of Tk 10 each 3,000,000,000 3,000,000,000
Issued, subscribed and paid-up:
167,000,000 Ordinary shares of Tk 10 each 1,670,000,000 1,670,000,000
13.01 Particulars of shareholdings
The shareholding position at the date of statement of financial position was as follows:
December 2017 December 2016
Name of shareholders Number of Value of % of share Number of Value of % of share
shares shares Taka holding shares sharesTaka holding
LankaBangla Finance Limited 166,999,994 1,669,999,940 99.99999618% 166,999,994 1,669,999,940 99.9999962%
Mr. Mohammad A. Moyeen 1 10 0.00000064% 1 10 0.0000006%
Mr. Md. Abdullah Al Karim 1 10 0.00000064% 1 10 0.0000006%
Mr. Al-Mamoon Md. Sanaul Huq 1 10 0.00000064% 1 10 0.0000006%
Mr. Mahbubul Anam 1 10 0.00000064% 1 10 0.0000006%
Mr. Khwaja Shahriar 1 10 0.00000064% 1 10 0.0000006%
Mr. Mohammad Amir Hossain 1 10 0.00000064% 1 10 0.0000006%
167,000,000 1,670,000,000 100% 167,000,000 1,670,000,000 100%
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognized as a deduction from equity, net of any tax effects. The holders of ordinary shares are entitled to receive
dividends as declared from time to time, and entitled to vote per share at meetings of the Company.
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Amount In Taka
31.12.2017 31.12.2016
14.00 Term loan
Opening balance 10,789,043 52,121,257
Add: Adition during the year - -
10,789,043 52,121,257
Less: Repayment during the year 10,789,043 41,332,214
Closing balance - 10,789,043
A loan (principal amount Tk.108,982,553 ) has been taken under Pronodona Package from Investment Corporation of
Bangladesh (ICB) in June 2014. Amount due within next 12 months has been shown as a current liability.
Segregation between Current & Non-current portion
Non current portion of Term loan - -
Current portion of Term loan (Note-18) - 10,789,043
- 10,789,043
14.01 Non-current portion
Investment Corporation of Bangladesh (ICB) - -
- -
14.02 Current portion
Investment Corporation of Bangladesh (ICB) - 10,789,043
- 10,789,043
15.00 Defined benefit obligations (Gratuity)
10,699,081 7,203,844
Less: Paid during the year 315,427 105,880
Closing balance 10,383,654 7,097,964
Payable to clients (Note-16.01) 85,466,875 69,238,819
Payable to group entities (Note - 16.02) - 36,520,322
Accrued expenses (Note - 16.03) 660,371 1,646,565
86,127,246 107,405,706
16.01 Payable to clients
Client positive balance (IPA) 75,091,818 65,991,503
Client positive balance (BDA) 7,356,876 2,365,599
Client positive balance (Nischinto) 2,776,515 881,717
Client positive balance-Equity share 133,551 -
Customer Deposits -LBIL Islamic Investment Scheme 108,114 -
85,466,875 69,238,819
16.02 Payable to group entities
LankaBangla Securities Limited - 36,520,322
- 36,520,322
16.03 Accrued expenses
Audit fee 143,750 195,500
CDBL charges 90,392 418,686
Security service payable 51,750 51,750
Office maintenance 30,000 23,000
Electricity bill 100,000 63,798
Fuel costs - 37,823
Telephone and mobile payable 15,000 13,500
Accrued interest payable - 65,034
Vehicle maintenance payable - 2,505
Liabilities for Fixed Assets 189,206 422,250
Payable for other expenses 40,274 352,719
660,371 1,646,565
17.00 Short term loan
LankaBangla Finance Limited 2,390,752,778 2,525,206,559
2,390,752,778 2,525,206,559
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Amount In Taka
31.12.2017 31.12.2016
18.00 Current portion of term loan
Investment Corporation of Bangladesh (ICB) (Note-14.02) - 10,789,043
- 10,789,043
19.00 Provision for current tax

Opening balance 19,079,642 25,030,683
Add: Provision made during the year - -
19,079,642 25,030,683
Less: Adjustment for prior year:
Correction for assessment year 2013-2014 - (2,530,355)
Assessment year 2014-2015 - 3,803,831
Assessment year 2015-2016 - 3,254,706
Assessment year 2016-2017 - 1,422,859
Assesment year 2017-2018 4,545,708 -
4,545,708 5,951,041
Closing balance 14,533,934 19,079,642
LBIL has kept Tk. 14,533,934 as excess provision which resulted from the previous financial years. As in 2017, assessment
of 2017-2018 has been completed, required provision of income tax has been adjusted. As a result no provision has been
kept for current year' income tax.
The company adjusts its provision for tax upon receiving income tax clearance certificate from the National Board of
Revenue (NBR).
19.01 Tax expense
Current tax - -
Deferred tax expense/(income) - -
-
20.00 Deferred tax asset/liability
Deferred tax assets are arrived at as follows:
Carrying amount (Taxable)/
on the date of Tax base deductible
statement of Taka temporary
financial position difference
Taka Taka
Year: 2017
Property, plant and equipment (Note: 4) 10,958,350 13,581,539 2,623,188
Provision for Gratuity 10,383,654 3,593,410 6,790,243
Temporary difference 9,413,431
Income tax rate 37.50%
Deferred tax asset (B) 3,530,037
Year: 2016
Property, plant and equipment (Note: 4) 11,490,014 12,363,882 873,868
Provision for Gratuity 7,097,964 3,277,983 3,819,981
Temporary difference 873,868
Income tax rate 37.50%
Deferred tax asset (A) 327,700
Deferred tax income for 2017 (A-B)* (3,202,337)

*Deferred tax assets (income) amounting Tk. 3,202,337 has not been recognised due to prudence concept of accounting.
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Amount In Taka
31.12.2017 31.12.2016
21.00 Provision for margin loan & others
Provision for margin loan (Note-21.01) 41,086,016 138,910,361
41,086,016 138,910,361
21.01 Provision/suspense for negative equity

Opening balance 138,910,361 74,089,160
Add: Provision during the period * 36,766,605 313,531,665
175,676,966 387,620,825
Less: Adjusted /(Reversal) during the period 134,590,950 248,710,464
Closing balance 41,086,016 138,910,361
* As per circular of Bangladesh Securities and Exchange Commission circular # SEC/CMRRCD/2009-193/203) and dated 28
December 2017, the required provisions for the year 2017 on principal portion of margin loan is to be kept at 20% in the
five installments starting from December 2017.
21.02 Provision for other assets
Opening balance - -
Add: Provision during the period * 760,000 -
760,000 -
Less: Writeoff/(Reversal) during the period 760,000 -
Closing balance - -
22.00 Other liabilities

Deposit suspense account 70,034 473,103
Withholding tax payable (Note-22.01) 223,743 55,475
293,777 528,578
22.01 Withholding tax payable

TDS from suppliers 22,966 4,325
TDS payable on director fees - 12,000
TDS from Rent 31,966 -
VAT payable on suppliers 43,602 8,430
VAT Payable on Others 29,311 12,720
VAT payable on director fees - 18,000
VAT Payable on Rent 95,898 -
223,743 55,475
Amount In Taka
2017 2016
Interest on margin loan 126,936,747 97,960,075
126,936,747 97,960,075
Dividend income 15,822,189 16,579,676
Realized gain/loss on listed securities 126,777,493 50,463,445
142,599,682 67,043,121
24.01 Realized gains on listed share
Sales price of securities 1,013,988,545 300,856,544
Less: Cost price of securities 887,211,052 250,393,099
126,777,493 50,463,445
25.00 Fee based income
Management fees 19,723,960 20,849,618
Settlement fees 48,573,547 43,175,650
Underwriting commission 1,401,250 4,293,551
Issue management fees 19,164,854 13,548,132
Registrar to the Issue fees 2,400,000 1,300,000
Corporate advisory fees 10,746,696 7,389,500
102,010,307 90,556,451
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Amount In Taka
2017 2016
26.00 Other operational income
Documentation charges 258,000 62,500
Gain on CDBL annual fees payment 160,500 260,950
Gain on IP client dividend collection 113,499 64,401
Client portfolio maintenance 306,658 -
Interest income on STD balances 2,727,833 551,703
Interest income on staff loan 433,768 199,450
4,000,258 1,139,004
Interest on term loan - 2,340,195
Interest on short term loan (Note-27.01) 249,724,821 296,177,080
249,724,821 298,517,275
27.01 Interest on short term loan
Interest on short term loan (group entities) 249,724,821 296,177,080
249,724,821 296,177,080
28.00 Other costs directly attributable to services
CDBL settlement trarnsfer fee 3,339,720 3,218,053
CDBL CDS connection fee 6,000 6,000
Corporate action 6,335 58,375
3,352,054 3,282,428
29.00 Other non-operational income 13,800 91,229
Salary and allowances 44,909,143 37,138,810
Provident fund contribution 1,824,688 1,520,046
Gratuity fund 3,601,117 3,025,823
50,334,947 41,684,680
31.00 Rent, insurance, utilities etc.
Office rent 8,905,048 11,971,626
Insurance premium 597,337 499,779
Utilities 1,269,847 1,663,368
10,772,232 14,134,773
Regulatory Fees 119,500 97,865
Membership and renewal fees 226,328 176,328
Other Professional Fees 118,948 195,500
464,776 469,693
Postage and courier 36,655 27,670
Stamp charges 24,113 19,570
Telephone and mobile bill 548,280 465,254
Internet expense 283,572 243,672
892,620 756,166
34.00 Stationery, printing, advertisement
Printing 532,451 117,340
Stationery 110,024 84,932
Advertisement 251,515 58,938
Promotional expense 1,741,059 653,235
2,635,049 914,445
35.00 Director fees and expenses 569,250 672,750
569,250 672,750
36.00 Audit fees 143,750 195,500
143,750 195,500
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Amount In Taka
2017 2016

Repairs and maintenance (Note-37.01) 3,348,795 3,834,491
Depreciation (Note-4 & Annexure-A) 4,007,599 3,442,268
Amortization (Note-5 & Annexure-B) 52,666 171,847
7,409,059 7,448,606
37.01 Repairs and maintenance
Office maintenance 1,386,482 1,561,320
Office maintenance-supplier 498,374 507,032
Software maintenance fees 48,331 183,136
Vehicle maintenance 555,298 643,054
Repairs 5,750 -
Cleaning 246,790 248,400
Fuel costs 607,770 691,549
3,348,795 3,834,491
Travel and accomodation (Note- 38.01) 5,180,207 985,518
Training and business development (Note- 38.02) 947,561 951,060
Irrecoverable receivables (Note- 38.03) - 80,000
Bank Charges 117,664 47,575
Security expenses 621,000 566,664
Newspapers and journals 104,891 95,140
Other IT and telecommunication 272,924 294,357
Client portfolio maintenance - 139
Gain on disposal of fixed assets 51,734 36,807
Other expenses - own portfolio 36,802 29,562
Staff recruitment expense 1,000 1,300
Other fees and charges 41,000 15,000
7,374,784 3,103,122
38.01 Travel and accomodation
Conveyance 270,626 174,943
Traveling 4,617,014 515,646
Airfare 107,000 176,229
Per diem 109,240 57,200
Accommodation 76,327 61,500
5,180,207 985,518
38.02 Training and business development
Meeting
Corporate conference - 53,627
Training and development 400,658 585,053
Welfare 500,503 274,880
46,400 37,500
947,561 951,060
38.03 Irrecoverable receivables
Writeoff of loans & receivables - 80,000
- 80,000
39.00 Earnings Per Share (EPS)
Earnings attributable to ordinary shareholders outstanding 4,360,848 (427,921,221)
Weighted average number of ordinary shares 167,000,000 167,000,000
0.03 (2.56)
40 Events after reporting period
Income tax assessment of LBIL for the AY 2017-2018 have been completed. As per BAS 10- Events after reporting balance
sheet date, Tk. 4,545,708 has been reflected in the financial statements as adjusting events.
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40.01 Related parties

40.01.01 Parent company
LankaBangla Finance Limited has 99.9999618% shareholdings of the company. As a result, the controlling party of the
company is LankaBangla Finance Limited.
40.01.02 Related party disclosures
During the period, the Company carried out a number of transactions with related parties in the normal course of business.
The names of the related parties and nature of these transactions have been set out in accordance with the provisions of
BAS 24: Related Party Disclosures.
Relationship
Name of the party Nature of transaction 2017 2016
with the entity
LankaBangla Finance Funding 133,620,273 1,558,926,771
Parent
Limited Interest expense 249,724,821 296,177,080
Share trading settlement 1,372,340,818 1,665,508,811
LankaBangla Securities Subsidiary of
LBIL Portfolio 77,537,550 61,494,535
Limited parent
LBSL Portfolio 588,258 (18,424)
LankaBangla Asset Subsidiary of LBAML Portfolio 942 10
Management Company parent
Limited
41 Financial risk management

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management
framework. The Company's risk management policies are established to identify and analyze the risks faced by the Company, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies, procedures and
systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The company has exposure
to the following risks from its use of financial instruments:
* Credit risk
* Liquidity risk
* Market risk
41.01 Credit risk
Credit risk is the risk of a financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the company's receivables from customers.
41.01.01 Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
Amount In Taka
2017 2016
Margin loan 1,915,459,376 2,473,812,503
Investments 669,942,537 493,449,231
Receivable from group entities(LBSL) 78,040,781 -
Other receivables 42,427,463 37,946,133
Cash and cash equivalents 237,698,683 177,739,112
2,943,568,841 3,182,946,980
41.02 Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The Company's
approach to managing liquidity (cash and cash equivalents) is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company's reputation. Typically, the Company ensures that it has sufficient cash and cash equivalents to
meet expected operational expenses, including financial obligations through preparation of the cash flow forecast, prepared
based on time line of payment of the financial obligation and accordingly arrange for sufficient liquidity/fund to make the
expected payment within due date.
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41.03 Market risk

Market risk is the risk that any change in market prices, such as interest rates and capital market condition will affect the
Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters.
42 Contingencies and commitments
There are no contingent assets or liabilities and unrecognized contractual commitments at the date of statement of financial
position.
43 Number of employees
Year 2017 Year 2016
No. of employees received Tk. 3,000 per month - -
No. of employees received more than Tk. 3,000 per month( including contractual) 51 44
51 44
44 Capital expenditure commitment

There was no capital expenditure commitment as at 31 December 2017.
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Annexure-A

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT
Amount in Taka
Office Furniture Motor Interior work Interior work
Particulars Total
equipment and fittings vehicles (movable) (immovable)
Cost
Balance at 1 January 2016 7,728,121 1,128,643 6,701,574 2,220,801 6,844,514 24,623,653
Acquisition/addition during the period 4,867,268 291,480 - - 4,690,214 9,848,962
Disposal/adjustment 1,443,937 1,975 - 250,640 6,815,030 8,511,582
Balance at 31 December 2016 11,151,452 1,418,148 6,701,574 1,970,161 4,719,698 25,961,033
Balance at 1 January 2017 11,151,452 1,418,148 6,701,574 1,970,161 4,719,698 25,961,033
Acquisition/addition during the period 1,397,180 60,850 - - 2,093,639 3,551,669
Disposal/adjustment 128,810 96,288 - - - 225,098
Accumulated depreciation
Balance at 1 January 2016 6,709,907 799,720 4,909,902 1,304,821 5,740,177 19,464,526
Depreciation for the year/period 1,093,193 155,987 554,169 323,754 1,315,165 3,442,268
Disposal/adjustment 1,443,929 1,358 - 175,466 6,815,023 8,435,775
Balance at 31 December 2016 6,359,171 954,349 5,464,071 1,453,109 240,319 14,471,019
Balance at 1 January 2017 6,359,171 954,349 5,464,071 1,453,109 240,319 14,471,019

Depreciation for the year/period 2,089,120 140,212 450,000 295,554 1,032,713 4,007,599
Disposal/adjustment 70,014 79,350 - - - 149,364
Carrying amount
At 1 January 2016 1,018,214 328,923 1,791,672 915,980 1,104,337 5,159,127
At 31 December 2016 4,792,280 463,799 1,237,504 517,052 4,479,379 11,490,014
At 31 December 2017 4,041,544 367,499 787,504 221,498 5,540,305 10,958,350
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Annual Integrated
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SCHEDULE OF INTANGIBLES
Annexure-B
Intangible-Assets
Particulars Total
Software
Cost
Balance at 1 January 2016 1,045,654 1,045,654
Acquisition/addition during the period - -
Disposal/adjustment - -
Balance at 31 December 2016 1,045,654 1,045,654
Balance at 1 January 2017 1,045,654 1,045,654
Acquisition/addition during the period - -
Balance at 31 December 2017 1,045,654 1,045,654
Accumulated amortisation
Balance at 1 January 2016 695,473 695,473
Amortisation for the period 171,847 171,847
Balance at 31 December 2016 867,320 867,320
Balance at 1 January 2017 867,320 867,320
Amortisation for the period 52,666 52,666
Balance at 31 December 2017 919,985 919,985
Carrying amount
At 1 January 2016 350,181 350,181
At 31 December 2016 178,334 178,334
At 31 December 2017 125,669 125,669
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Audited Financial Statements LankaBangla Asset Management Company Limited
345
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Report 2017
LANKABANGLA ASSET
MANAGEMENT COMPANY LIMITED
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INDEPENDENT
LankaBangla
AUDITORS’ REPORT
Independent Auditors’ Report

To the Shareholders' of
We believe that the audit evidence we have obtained is sufficient
We have audited the accompanying Statement of Financial and appropriate to provide a basis for our audit opinion.
Position of LankaBangla Asset Management Company
Limited (“the company”) as at 31 December 2017 and the
related Statement of Profit or Loss and Other Comprehensive Opinion
Income, Statement of Changes in Equity, Statement of Cash In our opinion, the financial statements present fairly, in all
Flows for the year then ended, and a summary of significant material respects, the financial position of the company as at
accounting policies and other explanatory information. 31 December 2017 and of its financial performance and its cash
flows for the year then ended in accordance with Bangladesh
Management’s Responsibility for the Financial Financial Reporting Standards (“BFRS”).
Statements Report on Other Legal and Regulatory Requirements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance with
Bangladesh Financial Reporting Standards (BFRS), the Companies (i) We have obtained all the information and explanation
Act 1994 and other applicable laws and regulations and for which to the best of our knowledge and belief were
such internal control as management determines is necessary necessary for the purposes of our audit and made due
to enable the preparation of financial statements that are free verification thereof;
from material misstatement, whether due to fraud or error. (ii) In our opinion, proper books of account as required by
law have been kept by the company so far as it appeared
Auditors' Responsibility from our examination of those books;
Our responsibility is to express an opinion on these financial (iii) The Statement of Financial Position and the Statement of
statements based on our audit. We conducted our audit in Profit or Loss and Other Comprehensive Income dealt with
accordance with Bangladesh Standards on Auditing (BSA). Those by the report are in agreement with the books of account.
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.
evidence about the amounts and disclosures in the financial Place: Dhaka Syful Shamsul Alam & Co.
statements. The procedures selected depend on the auditors' Dated: 13 February, 2018 Chartered Accountants
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, we consider
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,
statements.
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LANKABANGLA ASSET MANAGEMENT COMPANY LIMITED 347

Annual Integrated
STATEMENT OF FINANCIAL POSITION Report 2017
Amount in Taka
Notes
31-Dec-2017 31-Dec-2016
ASSETS
Non-Current Assets
Property, plant and equipment 4 11,511,210 13,902,655
Intangible assets 5 981,850 2,171,529
Investments (Long Term) 6 799,386,283 794,386,283
Deferred tax assets 7 1,528,031 462,180
Total Non-Current Assets 813,407,373 810,922,647
Current Assets
Advances, deposits and prepayments 8 18,259,022 42,258,979
Investments (Current Term) 9 188,818,162 113,165,182
Accounts receivable 10 19,365,759 4,349,961
Cash and cash equivalents 11 2,802,395 12,367,353
Total Current Assets 229,245,339 172,141,475
TOTAL ASSETS 1,042,652,712 983,064,122
EQUITY AND LIABILITIES

Equity
Share capital 12 500,000,000 500,000,000
Share money deposit 13 429,701,000 379,701,000
Retained earnings 14 90,624,429 83,718,895
Total Equity 1,020,325,429 963,419,895
Liabilities
Non-Current Liabilities
Finance lease obligation (Non-current portion) 15 3,151,054 4,053,250
Total Non-Current Liabilities 3,151,054 4,053,250
Current Liabilities
Accounts payable 16 213,264 496,534
Provision for current tax 17 11,985,245 10,369,883
Finance lease obligation (current portion) 18 902,196 810,246
Payable to gratuity fund 19 1,734,706 1,082,590
Other liabilities 20 4,340,818 2,831,724
Total Current Liabilities 19,176,230 15,590,977
Total Liabilities 22,327,284 19,644,227
TOTAL EQUITY AND LIABILITIES 1,042,652,712 983,064,122
Signed as per our report of the same date

Dated: 13 February, 2018 Chartered Accountants

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Amount in Taka
Notes
Jan - Dec'17 Jan - Dec'16
Revenue
Income from unit fund operation 21 11,497,244 5,764,725
Interest income 22 333,855 6,034,014
Total Revenue 49,780,750 36,342,254
Cost of Services
Interest expenses 24 485,750 2,378,736
485,750 2,378,736
Gross Profit/(Loss) 49,295,000 33,963,518
Operating Expenses
Legal and professional fees 27 17,250 2,081,639
Postage, stamp, telecommunication etc. 28 351,994 197,237
Stationery, printing, advertisement 29 387,403 168,196
Director fees & expenses 30 220,800 266,800
Audit fees 31 69,000 100,625
Other expenses 33 7,705,067 5,266,851
Total Operating Expenses 41,839,955 30,066,250
Net Operating Income/(Loss) 7,455,045 3,897,268
Provision for Investment

Provision for diminution in value of investments - (1,037,141)
Profit Before Tax (PBT) 7,455,045 4,934,409
Income Tax Expense/(Income) 549,511 2,270,991
Current tax expense/(income) 1,615,362 2,294,102
Deferred tax expense/(income) (1,065,851) (23,111)
Other comprehensive income, net of tax - -
Total Comprehensive Income 6,905,534 2,663,418
Earnings Per Share 34 0.14 0.20
Signed as per our report of the same date

Dated: February 13, 2018 Chartered Accountants

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LANKABANGLA ASSET MANAGEMENT COMPANY LIMITED Annual Integrated
STATEMENT OF CHANGES IN EQUITY Report 2017
Share Capital Share Money Retained Earnings Total Equity

Particulars Deposit
Taka Taka Taka Taka
Balance as at 01 January 2016 100,000,000 717,201,000 81,055,476 898,256,476

Share Money Deposit - 62,500,000 - 62,500,000
Issue of share capital 400,000,000 (400,000,000) - -
Total comprehensive income - - 2,663,418 2,663,418
Adjustment in Retained Earnings - - - -
Balance as at 31 December 2016 500,000,000 379,701,000 83,718,895 963,419,895
Changes in Equity for 2017

Share money deposit - 50,000,000 - 50,000,000
Issue of share capital - - - -
Total comprehensive income - - 6,905,534 6,905,534
Adjustment in Retained Earnings - - - -
Balance as at 31 December 2017 500,000,000 429,701,000 90,624,429 1,020,325,429
Place : Dhaka
Dated: February 13, 2018
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STATEMENT OF CASH FLOWS
Amount in Taka
31-Dec-2017 31-Dec-2016
Cash Flows from Operating Activities
Interest received 310,115 6,284,306
Received from unit fund operation 5,655,999 4,572,361
Paid to employees (18,169,832) (9,063,703)
Bank charges paid (24,410) (12,002)
Withholding Tax and VAT payment (2,410,788) (2,280,741)
Income taxes paid (654,381) -
Paid for other operating expenses (15,387,219) (12,811,084)
Cash Generated from Operating Activities before changes in operating assets and liabilities (13,153,684) (12,124,862)
Increase/(decrease) in Operating Assets & Liabilities
Settlement with LankaBangla Securities Ltd. (25,550,000) (103,737,997)
Settlement with LankaBangla Investments Ltd. - (1,470)
Settlement with LankaBangla 1st Balanced Unit Fund - 81,724
Settlement with Vision Capital Management Ltd. - (5,000,000)
Settlement with Al-Arafah Shariah Unit Fund (85,700) -
Advance & Prepayment (1,188,226) (2,965,341)
Total Increase/(Decrease) in Operating Assets & Liabilities (26,823,926) (111,623,084)
Net Cash used in Operating Activities (39,977,610) (123,747,947)
Investments in securities (18,169,710) (12,500,000)
Changes in investment in FDR - 114,281,938
Acquisition of fixed assets (607,392) (9,279,042)
Proceeds from sale of fixed assets - 1,673,766
Net Cash from Investing Activities (18,777,102) 94,176,662
Proceed from share money deposit 50,000,000 62,500,000
Proceed from short term loan - (21,213,687)
Repayment of lease finance (810,246) (126,504)
Net Cash from Financing Activities 49,189,754 41,159,809
Net increase in Cash and Cash Equivalents (9,564,958) 11,588,525

Opening Cash & Cash Equivalents 12,367,353 778,828
Closing Cash & Cash Equivalents 2,802,395 12,367,353
Closing Cash & Cash Equivalents include:
Cash in hand 15,478 4,943
Dhaka Bank Limited (A/C No: 206.150.1590) 2,719,797 12,339,241
Standard Chartered Bank (A/C No: 01-1184160-01) 18,485 19,376
One Bank Limited (A/C No: 018 1020001469) 2,643 3,793
One Bank Limited (AIFM) (A/C No: 0183000000657) 45,993 -
2,802,395 12,367,353
Place : Dhaka
Dated: February 13, 2018
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LANKABANGLA ASSET MANAGEMENT COMPANY LIMITED 351

Annual Integrated
NOTES TO THE FINANCIAL STATEMENTS Report 2017

1 Company and its activities
1.1 Legal status of the company
LankaBangla Asset Management Company Limited (herein after referred to as "LBAMCL" or "the company") was incorporated
with the Registrar of Joint Stock Companies and Firms (RJSCF) vide registration # C-67738(289)/2007 dated July 16, 2007
under the Companies Act, 1994. It got license from Bangladesh Securities and Exchange Commission (BSEC) on June 24,
2012 vide registration code: SEC/Asset Manager/2012/17 to operate as a full-fledged asset management company. It also
received registration certificate from BSEC on December 20, 2016 vide registration number: AIFM-06/2016 to act as an
Alternative Investment Fund Manager. The address of the company's registered office at Safura Tower (11th Floor), 20,
Kemal Ataturk Avenue, Banani, Dhaka - 1213. The company is a subsidiary of LankaBangla Finance Limited.
The Board of Directors of the company in its 52nd meeting has decided to convert the company from private limited company
to public limited company. Application regarding this conversion has been submitted to the Registrar of Joint Stock Companies
& Firms (RJSC), which is currently under processing.
1.2 Principal activities of the company
The principal activities of the company include the following:

a. To manage the assets of any trusts or fund of any type and/or character and hold, acquire, sell or deal with such assets
of any trust as relevant rules.
b. To float, administer and manage any mutual fund, growth fund or any other allotted scheme approved by the Government
for the time being as relevant rules.
c. To manage and administer mutual funds, provident funds, pension funds, royalty funds,alternative investment funds,
hedge funds, private equity funds, venture capital funds, mezzanine funds, leveraged buyout (LBO) funds, growth capital
funds, fixed-income funds, bond funds, money market funds, specialty funds, ethical funds, index funds, exchange
traded funds (ETF), funds of funds and other collective investment schemes for purpose of investment and carry on the
business or undertaking and execute trusts and also to act as executor, trustee, custodian and/or otherwise relevant
rules and regulation permit.
1.3 Asset management
LBAMCL has launched an open end fund in the capital market of Bangladesh named ‘LankaBangla 1st Balanced
Unit Fund’. The initial size of the fund is BDT 25 Crore with face value per unit of BDT 10. LankaBangla Finance Limited
is the ‘Sponsor’ of the fund whereas Bangladesh General Insurance Company Limited is the ‘Trustee’ of the fund.
LBAMCL is going to launch another open end fund named 'LankaBangla Al-Arafah Shariah Unit Fund' in the capital market
of Bangladesh shortly. The fund was formally launched on 17th May, 2017 in the form of Trust Deed registration of the
fund. Initial Fund Size is BDT 50 Crore with sponsor contribution of BDT 10 Crore. Al-Arafah Islami Bank Limited Employees’
Gratuity Fund Trust is the 'Sponsor' of the fund whereas Investment Corporation of Bangladesh is the 'Trustee' of the fund.
2 Basis of preparation of financial statements

The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BASs) and Bangladesh
Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable
laws and regulations.
2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis, and therefore, do not take into consideration the
effect of inflation. The accounting policies, unless otherwise stated, have been consistently applied by the company and are
consistent with those of the previous year.
2.3 Functional currency
The financial statements are presented in Bangladesh Taka (BDT/Taka/Tk.) currency, which is the Company's functional
currency. All financial information presented in Taka has been rounded off to the nearest Taka.
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The preparation of these financial statements in conformity with Bangladesh Accounting Standards (BASs) and Bangladesh
Financial Reporting Standards (BFRSs) requires management to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimates are revised and in any future periods affected thereby.
2.5 Reporting period
The financial period of the companies covers one year from 01 January to 31 December and is followed consistently. However,
quarterly reporting is required as prescribed by Bangladesh Securities & Exchange Commission (BSEC).
2.6 Cash flow statement
Statement of cash flows is prepared principally in accordance with "BAS 7: Cash Flow Statement" and the cash flow from
operating activities have been presented under Direct Method as required by the Securities and Exchange Rules 1987 and
considering the provisions that "Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct
Method".
2.7 Corporate Accounting Standards Practiced
The following BAS's are applicable to the financial statement under review:
BAS 1 Presentation of Financial Statements
BAS 7 Cash Flow Statements
BAS 8 Accounting policies, Changes in Accounting Estimates and Errors
BAS 10 Events after the Balance Sheet date
BAS 12 Income Taxes
BAS 16 Property, Plant and Equipment
BAS 17 Leases
BAS 18 Revenue
BAS 19 Employee Benefit
BAS 23 Borrowing Costs
BAS 24 Related Party Disclosures
BAS 32 Financial Instrument: Presentation
BAS 33 Earnings per Share
BAS 37 Provisions, Contingent Liabilities and Contingent Assets
BAS 38 Intangible Assets
BAS 39 Financial Instrument: Recognition and Measurement
3 Significant accounting policies
3.1 Property, plant & equipment

3.1.1 Recognition and measurement
Freehold Assets
Tangible fixed assets are accounted for according to "BAS 16: Property, plant and equipment". Items of property, plant and
equipment are measured at cost or revaluation less accumulated depreciation. The cost of acquisition of an asset comprises its
purchase price and any direct attributable cost of bringing the assets to its working condition for its intended use. Expenditure
incurred after the assets have been put into use, such as repairs and maintenance is normally charged off as revenue expenditure
in the year in which it incurs. In situation where it can be clearly demonstrated that the expenditure has resulted in an
increase in the future economic benefit expected to be obtained from the assets, the expenditure is capitalized as an additional
cost of the assets.
Leasehold Assets
Assets acquired under finance lease are accounted for by the recording the assets at the lower of present value of minimum
lease payments under the lease agreement and the fair value of the asset. The corresponding obligation under the lease
is accounted for as liability.
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3.1.2 Depreciation
Depreciation is calculated using 'Straight Line Method' at the following rate so as to write off the assets over their expected
useful life. Depreciation is charged in month in the year of acquisition while no depreciation is charged in the month of
disposal.
Rates of depreciation of assets considering their useful lives are as follows:
Furniture & Fixtures 15%
Computer Equipment 33%
Electric Equipment 20%
IT Equipment 33%
Motor Vehicle 20%
3.2 Intangible Assets

Intangible assets that are measured at cost less accumulated amortization and accumulated impairment loss, if any. Intangible
assets are recognized when all the conditions for recognition as per BAS 38: Intangible Assets are met. The cost of an intangible
asset comprises its purchase price, import duties and non-refundable taxes and any directly attributable cost of preparing
the asset for its intended use.
3.2.1 Amortization
Amortization is calculated using straight line basis over the estimated useful lives of intangible assets, from the month that
they are available for use. The estimated amortization rate is as follows:
Computer Programs (Software) 33%
3.3 Investment
Investment in securities is measured at cost.
a. Income from management fee is recognised on accrual basis. Such income is calculated considering average weekly Net
Asset Value of the fund.
The company charges management fee on the fund managed by them which is paid to the company on semi-annual or annual
basis. The annual rates of management fee on weekly average Net Asset Value are as follows:
Weekly Average Net Asset Value at market price Rate
1 - 50,000,000 2.50%
50,000,000- 250,000,000 2.00%
250,000,000 - 500,000,000 1.50%
500,000,000 & Over 1.00%
b. Interest income is calculated on a time proportion basis.
c. Dividend income is recognized on the declaration of dividend and subsequently approved in the Annual General Meeting.
d. Gain/losses arising on sale of investment are included in the statement of comprehensive income on the day at which
transaction takes place.
Cash and cash equivalents consist of cash in hand and with banks on current and deposit accounts and short
term investments which are held and available for use by the company without any restriction. There is insignificant risk of
change in value of the same.
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3.6 Taxation
3.6.1 Current Tax
The Company has made income tax provision for quarter concerned as per Finance Act 2017 and also in compliance with
Bangladesh Accounting Standards -12 (BAS-12: Income Taxes).
3.6.2 Deferred Tax

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they are reversed, based on the laws that have been enacted or substantively
enacted by the reporting date.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which
temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realized.
3.7 Provisions
As per "BAS 37: Provisions, Contingent Liabilities and Contingent Assets" a provision is recognized on the date of statement
of financial position if, as a result of past events, the Company has a present obligation that can be estimated reliably, and
it is probable that an outflow of economic benefits will be required to settle the obligation.
3.8 Employee benefits

a. Provident fund
The company operates a contributory provident fund for its permanent employees. All permanent employees contribute
10% of their basic salary to the provident fund and the company also makes equal contribution.
b. Gratuity
The company has an unfunded gratuity scheme for all eligible employees who have completed minimum 03 (three) years
of confirmed service with the company. Employees are entitled to gratuity benefit at the following rates:
Year of confirmed services % of entitlement

3 years and above but less than 4 years 50% of last one month basic salary for each completed year
4 years and above but less than 5 years 100% of last one month basic salary for each completed year
5 years and above 150% of last one month basic salary for each completed year
3.9 Contingencies
Contingencies arising from claim, litigation assessment, fines, penalties etc. are recorded when it is probable that a liability
has been incurred and the amount can be measured reliably in accordance with "BAS 37: Provisions, Contingent Liabilities
and Contingent Assets".
3.10 Earnings Per Share

This has been calculated in compliance with the requirements of "BAS 33: Earnings Per Share" by dividing the basic earnings
by the weighted average number of ordinary shares outstanding during the year.
3.11 Basic earnings
This represents earnings for the period attributable to the ordinary shareholders. As there was no preference dividend,
minority interest or extra ordinary items, the net profit for the period has been considered as fully attributable to ordinary
shareholders. Basic earnings per share have been calculated by dividing the net profit or loss by the number of ordinary
shares outstanding during the period.

Comparative figures and account titles in the financial statements have been rearranged/reclassified where necessary to
conform with changes in presentation in the current year.
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Amount in Taka
31-Dec-2017 31-Dec-2016
4.00 Property, plant and equipment
Cost
Opening balance 16,954,858 5,002,640
Addition during the year 631,575 15,100,058
17,586,433 20,102,698
Adjustment / (Disposal) during the year (25,000) (3,147,840)
Closing balance 17,561,433 16,954,858
Less: Accumulated depreciation

Charged during the year 3,009,020 1,787,909
6,061,223 4,513,739
Adjustment / (Disposal) during the year (11,000) (1,461,536)
Carrying amount 11,511,210 13,902,655
A schedule of property, plant and equipments are given in Annexure-A

Cost
Addition during the year - -
3,715,408 3,715,408
Adjustment / (Disposal) during the year - -
Less: Accumulated amortization

Opening balance 1,543,879 317,794
Charged during the year 1,189,679 1,226,085
2,733,558 1,543,879
Adjustment / (Disposal) during the year - -
Carrying amount 981,850 2,171,529
A schedule of intangible assets are given in Annexure-B
6.00 Investments (Long Term)

Strategic equity investment (Note:6.01) 799,386,283 794,386,283
799,386,283 794,386,283
6.01 Strategic equity investment
Particulars No. of Shares Cost Price Market Price
LankaBangla Securities Limited 15,157,125 799,386,283 N/A
15,157,125 799,386,283 -
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Amount in Taka
31-Dec-2017 31-Dec-2016
7.00 Deferred tax assets
Deferred tax has been calculated based on deductible / taxable temporary difference arising due to difference in the carrying amount
of the assets / liabilities and its tax base in accordance with the provision of Bangladesh Accounting Standards (BAS)-12 : Income Taxes.
(Taxable)/
Carrying Amount at Deductible
Particulars Tax Base
December 31, 2017 temporary
difference
Property, plant and equipment 11,511,210 10,832,034 (679,176)
Gratuity payable 1,734,706 - 1,734,706
Payable to provident fund 3,310,271 - 3,310,271
Total 16,556,187 10,832,034 4,365,801
Applicable Tax Rate 35%
Deferred tax asset as on December 31, 2017 1,528,031
Deferred tax asset as on December 31, 2016 462,180
Deferred tax income accounted for during the year 1,065,851
8.00 Advances, Deposits and Prepayments
Advances ( Note-8.01) 15,190,993 39,249,056
Deposits (Note-8.02) 2,772,000 2,772,000
Prepayments (Note-8.03) 296,029 237,923
18,259,022 42,258,979
8.01 Advances
Advance income tax 14,174,297 9,112,723
Advance for investment in securities - 30,000,000
Advance for expenses 1,016,696 136,333
15,190,993 39,249,056
8.02 Deposits
Security deposit - Office Rent 2,664,000 2,664,000
Security deposit - Lease Finance 108,000 108,000
2,772,000 2,772,000
8.03 Prepayments
Prepayment for office rent 124,500 124,500
Prepayment for insurance 171,529 113,423
296,029 237,923
9.00 Investments (Current Term)
Investments held for trading (Note : 9.01) 184,104,682 113,165,182
Investment in non listed securities (Note : 9.02) 4,713,480 -
188,818,162 113,165,182
9.01 Investments held for trading
Particulars Cost Price Cost Price
Bank 42,778,648 26,910,226
Financial Institutions 103,449,030 19,835,153
Insurance - 4,183,020
Pharmaceuticals & Chemicals 34,110,883 26,762,613
Fuel & Power - 9,596,334
Textile - 12,442,614
Engineering 127,046 6,842,038
Cement - 5,388,673
Ceramics - 1,103,881
Telecomunication 3,639,075 -
Tannery Industries - 100,630
184,104,682 113,165,182
Note:
The investment in listed securities are measured at cost. As the market value of the above listed securites are above the cost price as of cut off period
31 December 2017, no provision was required in the financial statements.
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Amount in Taka
31-Dec-2017 31-Dec-2016
9.02 Investment in non listed securities
Particulars No. of Shares Cost Price Market Price
Bashundhara Paper Mills Ltd. 43,226 3,458,080 N/A
Aman Cotton Fibrous Limited 31,385 1,255,400 N/A
74,611 4,713,480 -
Interest receivable 5,844 -
Dividend receivable 5,706 120,000
Receivable from LankaBangla Investments Ltd. 942 10
Receivable from LankaBangla Securities Ltd. 3,399,423 2,627,702
Receivable from LankaBangla 1st Balanced Unit fund 4,944,915 1,295,212
Receivable from Vision Capital Management Ltd. 9,186 307,036
Receivable from LankaBangla Al-Arafah Shariah Unit Fund 2,277,243 -
Receivable from CAPM Unit Fund 8,722,500 -
19,365,759 4,349,961
11.00 Cash and cash equivalent
Cash in hand 15,478 4,943
Cash at Bank (Note: 11.01) 2,786,917 12,362,410
2,802,395 12,367,353
11.01 Cash at bank
Dhaka Bank Limited (A/C No: 206.150.1590) 2,719,797 12,339,241
Standard Chartered Bank (A/C No: 01-1184160-01) 18,485 19,376
One Bank Limited (A/C No: 018 1020001469) 2,643 3,793
One Bank Limited (AIFM) (A/C No: 0183000000657) 45,993 -
2,786,917 12,362,410
12.00 Share Capital
Authorized Capital
100,000,000 Ordinary Shares of Taka 10 each 1,000,000,000 1,000,000,000
Issued, subscribed and paid up capital
50,000,000 Ordinary Shares of Taka 10 each fully paid up 500,000,000 500,000,000
Detail of Shareholding Position of the Company
Name of the Sponsor & Directors % of share
No. of Shares
Shareholders holding
LankaBangla Finance Limited 49,999,900 99.99980 499,999,000 499,999,000
Mr. Mahbubul Anam 90 0.00018 900 900
Mr. A. Malek Shamsher 10 0.00002 100 100
50,000,000 100.00 500,000,000 500,000,000
13.00 Share money deposit
Opening balance 379,701,000 717,201,000
429,701,000 779,701,000
Less: Issue of share capital - (400,000,000)
Closing balance 429,701,000 379,701,000
14.00 Retained earnings
Opening balance 83,718,895 81,055,476
Add: Profit during the year 6,905,534 2,663,418
90,624,429 83,718,895
Less: Adjustment during the year - -
Closing balance 90,624,429 83,718,895
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Amount in Taka
31-Dec-2017 31-Dec-2016
15.00 Finance lease obligation (Non-current portion)
Opening balance 4,053,250 -
Add: Addition during the year - 4,990,000
4,053,250 4,990,000
Less: Paid during the year (810,246) (126,504)
3,243,004 4,863,496
Less: Conversion to short term (91,950) (810,246)
Provision for audit fees 73,599 105,225
Professional fee payable - 247,250
Accrued expenses 139,665 144,059
213,264 496,534
17.00 Provision for current tax

Opening balance 10,369,883 8,686,607
Add: Provision made during the year 1,615,362 2,294,102
11,985,245 10,980,709
Less: Adjustment during the year - (610,826)
Closing balance 11,985,245 10,369,883
18.00 Finance lease obligation (current portion)

Opening balance 810,246 -
Add: Conversion from long term 91,950 810,246
902,196 810,246
Less: Paid during the year - -
Closing balance 902,196 810,246
19.00 Payable to gratuity fund

Opening balance 1,082,590 111,063
Add: Provision made during the year 652,117 971,527
1,734,706 1,082,590
Less: Payment during the year - -
20.00 Other liabilities

Withholding Tax Payable 102,351 78,483
Withholding VAT payable 71,150 75,790
Payable to employees' provident fund 3,310,271 2,248,372
Salary & related expenses payable 857,046 429,079
4,340,818 2,831,724
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Amount in Taka
Jan-Dec' 17 Jan-Dec' 16
21.00 Income from unit fund operation
Management fee - Unit Fund 11,497,244 3,264,725
Formation fee - Unit Fund - 2,500,000
11,497,244 5,764,725
Interest on Fixed Deposit Receipt (FDR) (Note: 22.01) - 5,577,373
Interest on Short Term Deposit (STD) account 333,855 456,640
333,855 6,034,014
22.01 Interest on fixed deposit receipt
Interest on FDRs in LankaBangla Finance - 4,216,262
Interest on FDRs in Mutual Trust Bank - 1,361,111
- 5,577,373
Net income on sale of securities 16,153,623 22,941,015
Dividend income 21,796,028 1,602,500
37,949,651 24,543,515
Interest on loan - 2,289,240
Interest on lease finance 485,750 89,496
485,750 2,378,736
Salary and allowances 20,334,882 11,719,023
Provident fund contribution 451,666 360,454
Gratuity fund 652,117 446,890
21,438,664 12,526,367
26.00 Rent, taxes, insurance, electricity etc.
Office rent 6,127,200 5,603,190
Insurance premium 221,587 123,823
Utility expenses 632,037 286,465
6,980,824 6,013,478
Legal and professional fees 17,250 2,081,639
17,250 2,081,639
Postage and courier 395 275
Stamp charges 10,645 9,420
Telephone and mobile bill 340,954 187,542
351,994 197,237
29.00 Stationery, printing & advertisement
Printing and stationery 333,739 115,002
Advertisement 53,664 53,194
387,403 168,196
30.00 Director fees & expenses
Director fees & expenses 220,800 266,800
220,800 266,800
31.00 Audit fees
Audit fees 69,000 100,625
69,000 100,625
Repairs and maintenance - -
Software maintenance 470,252 431,063
Depreciation 3,009,020 1,787,909
Amortization 1,189,679 1,226,085
4,668,951 3,445,057
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Amount in Taka
Jan-Dec' 17 Jan-Dec' 16
Training, Seminar and Meeting 167,068 500,000
Regulatory fees and charges 85,477 194,928
Membership & Annual fee 80,000 -
Registration Fee 31,952 188,458
Conveyance 44,113 74,400
Travelling expenses 34,501 -
Data connectivity charge 96,797 49,450
Computer accessories 24,065 35,615
Fuel expenses 338,625 165,071
Vehicle maintenance / registration 169,182 137,613
Office Cleaning and maintenance 539,170 645,173
Management fee 4,750,000 -
Business promotional expense 363,445 1,684,570
Entertainment expense 390,251 130,664
Bank charges and others 24,493 12,177
Other fees & charges 23,975 -
CDBL fee 500 1,300
Share Bidding Fee 16,000 5,000
Office Plantation maintenance 2,800 7,200
Newspaper & periodicals 32,980 15,219
Educational expenses reimbursement 46,722 5,379
Documentation fee - 11,500
Office relocation expenses - 1,029,783
Loss on disposal of assets 14,000 12,538
Security Services 207,000 182,850
Overtime allowance 34,450 19,700
Excise duty 34,000 87,500
Share trading service charge - 9,153
Donation 100,000 -
Miscellaneous 53,500 61,610
7,705,067 5,266,851
34.00 Earnings per Share (EPS)

Earning attributable to ordinary shareholders 6,905,534 2,663,418
Weighted average number of ordinary shares outstanding 50,000,000 13,333,333
Earnings Per Share (EPS) 0.14 0.20

During the period, the company carried out a number of transactions with related parties in the normal course of business.
The names of the related parties and nature of these transactions have been set out in accordance with the provisions
of BAS 24 : Related Party Disclosures.
Amount in Taka
31-Dec-2017 31-Dec-2016
Name of the Party Relationship Nature of transaction
LankaBangla Finance Limited Parent TDR - -
LankaBangla Investments Ltd. Subsidiary of Parent Strategic Investment & Others 942 10
LankaBangla Securities Ltd. Subsidiary of Parent Investment in Securities 3,399,423 2,627,702
36.00 Events after reporting period

There are no events after reporting period
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Annexure-A
LANKABANGLA ASSET MANAGEMENT COMPANY LIMITED
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT
Amount in Taka
COST DEPRECIATION
Written
Balance Addition Adjustment / Balance Rate (%) Balance Charged Adjustment / Balance
Particulars down value
as at during (Disposal) as at as at during (Disposal) as at
as at
01.01.2017 the year the year 31.12.2017 01.01.2017 the year the year 31.12.2017 31.12.2017
Furniture & Fittings 7,778,027 - - 7,778,027 15 1,150,938 1,090,894 - 2,241,832 5,536,195

Office Equipment 1,840,613 14,072 - 1,854,685 20 268,031 370,702 - 638,733 1,215,952
Computer Equipment 1,042,521 523,553 - 1,566,074 33 509,338 348,173 - 857,511 708,563
Electric Equipment 89,906 80,500 - 170,406 20 50,337 32,215 - 82,552 87,854
IT Equipment 1,213,791 13,450 (25,000) 1,202,241 33 824,058 169,036 (11,000) 982,094 220,147
Motor Vehicle 4,990,000 - - 4,990,000 20 249,500 998,000 - 1,247,500 3,742,500
Total: 16,954,858 631,575 (25,000) 17,561,433 3,052,203 3,009,020 (11,000) 6,050,223 11,511,210
Amount in Taka
COST DEPRECIATION
Written
Balance Addition Adjustment / Balance Rate (%) Balance Charged Adjustment / Balance down value
Particulars as at during (Disposal) as at as at during (Disposal) as at as at

Furniture & Fittings 3,315,180 7,270,847 (2,808,000) 7,778,027 15 1,559,068 785,271 (1,193,400) 1,150,938 6,627,089
Office Equipment 95,496 1,745,117 - 1,840,613 20 45,335 222,696 - 268,031 1,572,582
Computer Equipment 431,928 610,593 - 1,042,521 33 325,672 183,666 - 509,338 533,183
Electric Equipment 221,556 23,850 (155,500) 89,906 20 115,421 25,625 (90,709) 50,337 39,569
IT Equipment 938,480 459,651 (184,340) 1,213,791 33 680,334 321,151 (177,427) 824,058 389,733
Motor Vehicle - 4,990,000 - 4,990,000 20 - 249,500 - 249,500 4,740,500
Total: 5,002,640 15,100,058 (3,147,840) 16,954,858 2,725,830 1,787,909 (1,461,536) 3,052,203 13,902,655
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361
Report 2017
Annual Integrated
Annexure-B 362
LANKABANGLA ASSET MANAGEMENT COMPANY LIMITED
LankaBangla
SCHEDULE OF INTANGIBLE ASSETS

www.lankabangla.com
Amount in Taka
COST AMORTIZATION
Written
Rate
Balance Addition Adjustment / Balance Balance Charged Adjustment / Balance down value
Particulars (%)
as at during (Disposal) as at as at during (Disposal) as at as at
Computer Programs 3,715,408 - - 3,715,408 33 1,543,879 1,189,679 - 2,733,558 981,850

(Software)
Total: 3,715,408 - - 3,715,408 - 1,543,879 1,189,679 - 2,733,558 981,850
Amount in Taka
COST AMORTIZATION
Written
Balance Addition Adjustment / Balance Rate Balance Charged Adjustment / Balance
Particulars (%) down value
as at during (Disposal) as at as at during (Disposal) as at as at
Computer Programs 3,715,408 - - 3,715,408 33 317,794 1,226,085 - 1,543,879 2,171,529

(Software)
Total: 3,715,408 - - 3,715,408 - 317,794 1,226,085 - 1,543,879 2,171,529
363
Annual Integrated
Report 2017
REPORTING CHECKLISTS
www.lankabangla.com
Integrated Annual Report Review Checklists SAFA Best Presented Accounts Checklist
364
LankaBangla
SAFA BEST PRESENTED
ACCOUNTS CHECKLIST
Items Page Ref.
Corporate Objectives, Values & Structure
 Vision and Mission 01
 Overall strategic objectives 180, 183-185
 Core values and code of conduct/ethical principles 01,10
 Profile of the Company 10
40-44, 54,280-
 Directors' profiles and their representation on Board of other companies & Organization Chart
282
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 8-9
 Description of the performance of the various activities / products / segments of the company and its
61-64, 131-
group companies during the period under review. (Weightage to be given for pictorial / graphical / tabular
139, 128-130
presentations used for this purpose)
 A brief summary of the Business and other Risks facing the organization and steps taken to effectively manage such risks 113-117
11, 130, 171-
 A general review of the future prospects/outlook
173, 176
 Information on how the company contributed to its responsibilities towards the staff (including health & safety) 166-167, 186-191
 Information on company's contribution to the national exchequer & to the economy 211
Sustainability Reporting
 Social Responsibility Initiatives ( CSR) 203-206
 Environment Related Initiatives 200-202
 Environmental & Social Obligations 194-206
Appropriateness of Disclosure of Accounting policies and General Disclosure

 Disclosure of adequate and properly worded accounting policies relevant to assets, liabilities, income and
227-243
expenditure in line with best reporting standards.
 Impairment of Assets 239
 Changes in accounting policies/Changes in accounting estimates 232
 Accounting policy on subsidiaries
 LankaBangla Securities Limited 302-306
 LankaBangla Investments Limited 327-332
 LankaBangla Asset Management Company Limited 351-354
Segment Information
 Comprehensive segment related information bifurcating Segment revenue, segment results and segment capital
employed
 Availability of information regarding different segments and units of the entity as well as non-segmental
entities/units
 Segment analysis of
 Segment Revenue 275-278
 Segment Results
 Turnover
 Operating profit
 Carrying amount of Net Segment Assets
Financial Statements (Including Formats)
216, 221, 286,
 Disclosures of all contingencies and commitments
332
 Comprehensive related party disclosures 280-283
 Disclosures of Remuneration & Facilities provided to Directors & CEO 272
215-216, 220-
 Statement of Financial Position / Balance Sheet and relevant schedules
221
 Income Statement / Profit and Loss Account and relevant schedules 217,222
 Statement of Changes in Equity / Reserves & Surplus Schedule 219,223
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365
Annual Integrated
Report 2017
Items Page Ref.

 Disclosure of Types of Share Capital 265
 Statement of Cash Flows 218, 224
 Consolidated Financial Statements (CFS) 215-222
 Extent of compliance with the core IAS/IFRS or equivalent National Standards 230-231, 243
 Disclosures / Contents of Notes to Accounts 227-291
Information about Corporate Governance
 Board Of Directors, Chairman And CEO 40-44
45, 94-97,
 Audit Committee (Composition, role, meetings, attendance, etc)
76-77
 Internal Control & Risk Management 110-117
 Ethics And Compliance 104
 Other Committees of Board 45,75-77
 Human Capital 186-192
 Communication to Shareholders & Stakeholders
- Information available on website 5, 371
- Other information
 Management Review and Responsibility 103, 128-139
 Disclosure by Board of Directors or Audit Committee on evaluation of quarterly reports 61, 98-99
 Any other investor friendly information 140-149
Risk Management & Control Environment

 Description of the Risk Management Framework 112
 Risk Mitigation Methodology 113-117
 Disclosure of Risk Reporting 113-114, 120
Stakeholders Information
 Distribution of shareholding (Number of shares as well as category wise) 39, 265-267
 Shares held by Directors/Executives and relatives of Directors/Executives 66-67, 94
 Redressal of investors complaints 169
Graphical/ Pictorial Data:
 Earnings per Share
 Net Assets
130-134 , 141-
 Stock Performance
142, 144-145
 Shareholders’ Funds
 Return on Shareholders Fund
Horizontal/Vertical Analysis including following. Operating Performance (Income Statement) (2.5 Marks)
 Total Revenue
 Operating Profit
 Profit Before Tax
 Profit After Tax
146-149
 EPS
Statement of Financial Position (Balance Sheet) (2.5 Marks)
 Shareholders Fund
 Property Plant & Equipment
 Net Current Assets
Profitability/Dividends/ Performance and Liquidity Ratios
 Gross Profit Ratio
 Earning before Interest, Depreciation and Tax
 Price earning ratio 140-145, 291
 Current Ratios
 Return on Capital Employed
 Debt Equity Ratio
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366
LankaBangla
Items Page Ref.

Statement of Value Added and Its Distribution
 Government as Taxes
 Shareholders as dividend
207
 Employees as bonus/remuneration
 Retained by the entity
 Market share information of the Company’s product/services 132-133
 Economic value added 209-210
Additional Disclosures
 Human Resource Accounting 186-191
 Human Capital 192
 Report on Going Concern 126
 Statement on NPL Management 123-125
 Green Banking 200-202
 Sustainability Report 194-199
 Social Responsibility Initiatives ( CSR) 203-206
 Contribution on Government Exchequer 211
 Stakeholder Analysis 163-170
Specific Areas for Banking Sector
Disclosure of Ratings given by rating agencies 63
Details of Advances portfolio Classification wise as per the direction issued by the central bank of the respective
290
countries
Disclosure for Non Performing Assets
 Movements in NPA 124-125
 Sector-wise breakup of NPA 125
 Movement of Provisions made against NPA 263
 Maturity Pattern of Key Assets and Liabilities (ALM) 225-226
 Classification and valuation of investments as per regulatory guidelines/Accounting Standards 230
Business Ratio/Information
 Statutory Liquidity Reserve (Ratio)
 Return on Average Asset
 Cost / Income Ratio
 Net Asset Value Per Share
 Profit Per Employee 140-145, 291
 Capital Adequacy Ratio
 Cash Reserve Ratio
 Dividend Cover Ratio
 Gross Non-Performing assets to gross advances / Non-Performing Loans (Assets) to Total Loans (Assets)
Details of credit concentration / Sector wise exposures 113-114
The break-up of ‘Provisions and contingencies’ included in the Profit and Loss Account 274
Disclosure under regulatory guidelines 280-291
Details of Non-Statutory investment portfolio 247-248
Disclosure in respect of assets given on operating & finance lease 233, 237
Network : List of Centers or Branches 13-15
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Integrated Annual Report Review Checklists Integrated Reporting Checklist
367
INTEGRATED REPORTING Annual Integrated
Report 2017
CHECKLIST
SL. No Page
Chapter/ Section reference
Particulars reference
1. Elements of an Integrated Report
1.1 Organizational overview and external environment
An integrated report should disclose the main activities of the organization
and the environment of which it operates.
An integrated report should identify the organization’s mission and vision, and
provides essential context by identifying matters such as:
The organization’s:
 Culture, ethics and values 10 Code of Conduct Guiding Principles
01 Core Values
 Ownership and operating structure including size of the organization, 39 Shareholding Structure
location of its operations) 10 Organizational Overview
13-18 Corporate Information
 Principal activities and markets 19-22 Business Divisions of LBFL
23-29 Subsidiaries of LBFL
154-155 How we creat value
 competitive landscape and market positioning (considering factors
such as the threat of new competition and substitute products or 179 Industry Forces Analysis
services, the bargaining power of customers and suppliers, and the
intensity of competitive rivalry)
 Key quantitative information 140-145 Financial Highlights
198-199 Triple Bottom Line Highlights
291 Highlights
 Significant factors affecting the external environment and the rganization’s 174-177 SWOT Analysis for LBFL
response(include aspects of the legal, commercial, social, environmental
and political context that affect the organization’s ability to create value in 177-178 PESTEL Analysis
the short, medium or long term)
 The legitimate needs and interests of key stakeholders 163-170 Stakeholders Analysis
 Macro and micro economic conditions, such as economic stability, Economic Outlook
171-173
globalization, and industry trends
 Market forces, such as the relative strengths and weaknesses of Industry Forces Analysis
179
competitors and customer demand
 Environmental challenges, such as climate change, the loss of ecosystems,
and resource shortages as planetary limits are approached
 The legislative and regulatory environment in which the organization
operates 177-178 PESTEL Analysis
 The political environment in countries where the organization operates and
other countries that may affect the ability of the organization to implement
its strategy
1.2 Governance
An integrated report should how does the organization’s governance
structure support its ability to create value in the short, medium and long term.
An integrated report needs to provide an insight about how such matters as the
following are linked to its ability to create value:
 The organization’s leadership structure, including the skills and diversity (e.g., Profile of Board Directors
40-44
range of backgrounds, gender, competence and experience) of those Profiles of the Management Team
46-51
charged with governance and whether regulatory requirements influence Corporate Organogram of
54
the design of the governance structure LankaBangla Finance
 Specific processes used to make strategic decisions and to establish and Statement on Ethics and Compliance
104
monitor the culture of the organization, including its attitude to risk and Risk Management Structure
mechanisms for addressing integrity and ethical issues 112
 Particular actions those charged with governance have taken to influence
and monitor the strategic direction of the organization and its approach to 110-117 Statement on Risk Management
risk management
 How the organization’s culture, ethics and values are reflected in its use of 163-
and effects on the capitals, including its relationships with key stakeholders 164,169- Stakeholder Analysis
170
 The legislative and regulatory environment in which the organization 99 Statement on Internal Control
operates 177-178 PESTEL Analysis
104 Statement on Ethics and Compliance
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368
LankaBangla
SL. No Page
 The responsibility those charged with governance take for promoting and
enabling innovation Human Resources & Remuneration
101-102
Committee Report
 How remuneration and incentives are linked to value creation in the short, 186-191 Human Resources Accounting
medium and long term, including how they are linked to the organization’s
use of and effects on the capitals.
Stakeholder Identification/ relationships

An integrated report should identify its key stakeholders and provide insight
1.3 into the nature and quality of the organization’s relationships with its key 163-170 Stakeholders Analysis
stakeholders, including how and to what extent the organization understands,
takes into account and responds to their legitimate needs and interests.
Capitals
An integrated report needs to provide insight about the resources and the
relationships used and affected by the organization, which are referred to
collectively as the capitals and how the organization interacts with the capitals
to create value over the short, medium and long term.
Key Resources of LankaBangla
An integrated report need to identify the various forms of capitals which are 158-162
essential for the success of its business operations. Finance Limited
Eg: financial, manufactured, intellectual , human, social and relationship, and
natural,However an entity can do its own classification of capitals based on
its business activities. An entity needs to ensure that it does not overlook a
capital that it uses or affects.
Business model 150 Value Creation Structure
1.4
An integrated report should describe the organization’s business model 152 Business Model
An integrated report need to describe the business model, including key:
 Inputs 158-162 Key Resources of LBFL
10 Organizational Overview
19-22 Business Divisions of LBFL
 Business activities
23-29 Subsidiaries of LBFL
154-155 How we create value
30 Product Portfolio of LBFL
 Outputs
150-151 Value Creation Structure
140-145, Financial Highlights
291
154-155 How We Create Value
 Outcomes 156 Delivering Value
207-210 Value Added Statements
211 Contribution to Government
Exchequer
1.5 Performance
An integrated report needs to explain the extent to which the organization has
achieved its strategic objectives for the period and what are its outcomes in 198-199 Triple Bottom Line Highlights
terms of effects on the capitals?
An integrated report should contain qualitative and quantitative information 55-56 Message from the Chairman
about performance that may include matters such as:
Quantitative indicators with respect to targets and risks and opportunities, 128-130 Review from the MD
explaining their significance, their implications, and the methods and
assumptions used in compiling them 131-139 CFO's Statement on Performance
 The organization’s effects (both positive and negative) on the capitals,
including material effects on capitals up and down the value chain 140-145 Financial Highlights
 The state of key stakeholder relationships and how the organization has
responded to key stakeholders’ legitimate needs and interests 291 Highlights
 The linkages between past and current performance, and between
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369
Annual Integrated
Report 2017
SL. No Page
1.6 Risks and opportunities
An integrated report should explain what are the specific risks and opportunities
that affect the organization’s ability to create value over the short, medium and
long term, and how is the organization dealing with them? 110-117 Statement on Risk Management
This can include identifying:
 The specific source of risks and opportunities, which can be internal, 174-177 SWOT Analysis
external or, commonly, a mix of the two.
 The organization’s assessment of the likelihood that the risk or opportunity 177-178 PESTEL Analysis
will come to fruition and the magnitude of its effect if it does.
 The specific steps being taken to mitigate or manage key risks or to create 179 Industry Forces Analysis
value from key opportunities, including the identification of the associated
strategic objectives, strategies, policies, targets and KPIs.
1.7 Strategy and resource allocation
An integrated report should describe it strategic direction (Where does the
organization want to go and how does it intend to get there)
Drivers Guiding Our Strategy
An integrated report need to identify: 180
 The organization’s short, medium and long term strategic objectives Material Matters that Affect Our
 The strategies it has in place, or intends to implement, to achieve those 181
Strategies
strategic objectives
 The resource allocation plans it has to implement its strategy 183
Strategic Focus Areas
 How it will measure achievements and target outcomes for the short,
medium and long term.
1.8 Outlook
An integrated report should explain what challenges and uncertainties is the
organization likely to encounter in pursuing its strategy, and what are the
potential
 implications for its business model and future performance?
11 Forward Looking Statement
An
 integrated report should highlight anticipated changes over time and
provides information on: 130 Review from the MD
 The organization’s expectations about the external environment the
 171-173 Economic Outlook
organization is likely to face in the short, medium and long term 174-179 Business Environment Analysis
 How that will affect the organization

 How the organization is currently equipped to respond to the critical

challenges and uncertainties that are likely to arise.
1.9 Basis of preparation and presentation
An integrated report should answer the question: How does the organization
determine what matters to include in the integrated report and how are such
matters quantified or evaluated?
An integrated report describes its basis of preparation and presentation,
including: 06 Brief about Integrated Reporting
A summary of the organization’s materiality determination process 181-182 Material Matters that Affect Our
Brief description of the process used to identify relevant matters, Strategies
evaluatetheir importance and narrow them down to material matters
Identification of the role of those charged with governance and key 194 Sustainability Report
personnel in the identification and prioritization of material matters.
A description of the reporting boundary and how it has been determined
A summary of the significant frameworks and methods used to quantify
or evaluate material matters
2. Responsibility for an integrated report
06 Brief about Integrated Reporting
61 Directors' Report
An integrated report should include a statement from those charged with
governance that includes: 95 Board Audit Committee Report
 An acknowledgement of their responsibility to ensure the integrity of the Statement on Directors’
integrated report 98
 An acknowledgement that they have applied their collective mind to the Responsibilities
preparation and presentation of the integrated report 99 Directors’ Statement on Internal
 Their opinion or conclusion about whether the integrated report is Control
presented in accordance with the Framework
103 Responsibility Statement of MD
and CFO
www.lankabangla.com
Communication to Shareholders
370
LankaBangla
COMMUNICATION TO
SHAREHOLDERS
LankaBangla Finance Limited is listed in both the bourses of the country. Investors can monitor the ticker in the name of LANKABAFIN
in both DSE and CSE. Any price sensitive information is disseminated timely. Annual Report of the company summarizes the company’s
financial performance and provides an overview of the company’s major activities. The annual report is duly submitted to Bangladesh
Securities and Exchange Commission, Dhaka Stock Exchange & Chittagong Stock Exchange in timely manner. Each stockholder is sent
copy of the report before AGM. Annual Report, Quarterly Reports and Supplements to the reports are available on the company’s
website, www.lankabangla.com or copies are available with the Board Secretariat at LankaBangla Finance Limited.
On top of the above information, the company makes available each material information or achievement to the shareholders through
the company’s web portal. For additional information about the subsidiary companies and the financials, the investors can visit our
web portals, www.lankabangla.com.
Redressal of Investors’ complaint
Investor Relations Department of LankaBangla Finance Limited always gives extreme priority in mitigating investors’ complaints (if
any) regarding any inconvenience. Investors can approach to Investor Relations Department with a complaint or can make an email at
company’s designated e-mail id for investor relations at [email protected]. An Investor can make a written complaint to LankaBangla
Finance Limited also. Upon receipt of the compliant, designated cell at LankaBangla takes immediate steps to resolve the complaint.
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371
Annual Integrated
Report 2017
Notes:
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www.lankabangla.com
Safura Tower (Level-11), 20, Kemal Ataturk Avenue
372 Banani, Dhaka-1213. Phone: +88 02 988 3701-10
LankaBangla Fax: +881 0998, E-mail: [email protected]
Proxy Form
I/ We .................................................................................................................................................................................................................
of ......................................................................................................................................................................................................................
being a shareholders of LankaBangla Finance Limited do hereby appointment Mr./Mrs.................................................................................
of .......................................................................................................................................................................................................................
(or failing) Mr./ Mrs. ..........................................................................................................................................................................................
of .......................................................................................................................................................................................................................
and vote on my/our behalf at the 21st Annual General Meeting of the Shareholders of LankaBangla Finance limited to be held on March
29, 2018 at 10:00 a.m. at MIDAS Centre (12th Floor), House No. 05, Road No. 16 (New), 27 (Old) Dhanmondi, Dhaka-1209 or at any
adjournment thereof or any ballot to be taken in consequence thereof.
Signed this ..................................................... day of March, 2018
(Signature of the proxy) Revenue Signature of shareholder (s)

Stamp
Tk. 20/-
BO ID No. ...................................................................

No. of shares being held ............................................
Note
• This form of proxy, duly completed, must be deposited at least 48:00 hours before the meeting at the company’s registered office.
Proxy is invalid if not signed and stumped as indicated above.
• Signature of the Shareholders should agree with the Specimen signature registered with the Company.
Safura Tower (Level-11), 20, Kemal Ataturk Avenue

Banani, Dhaka-1213. Phone: +88 02 988 3701-10
Fax: +881 0998, E-mail: [email protected]
Attendance Slip
I/We hereby record my/our attendance at the 21st Annual General Meeting of the Shareholders of LankaBangla Finance limited to be
March 29, 2018 at 10:00 a.m. at MIDAS Centre (12th Floor), House No. 05, Road No. 16 (New), 27 (Old) Dhanmondi, Dhaka-1209.
Name of the Shareholder(s)/Proxy (in Block Letters)
(Signature of the Proxy) Signature of the shareholder(s)/Proxy

BO ID No. ................................................................ No. of shares being held ............................................
N. B.: Shareholders attending the Meeting in person or by Proxy are requested to complete Attendance Slip and deposit the same at the
entrance of the Meeting Hall.
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1

VISION MISSION CORE VALUES

MAKING A DIFFERENCE, DIFFERENTLY

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on Performance Shareholding Structure 39

Statement on Risk Management 110

Management Discussion and Analysis

Audited Financial Statements

Independent Auditors' Report 213

Audited Financial Statements

SAFA Best Presented Accounts Checklist 364

Communication to Shareholders 370

Safura Tower (Level 11), 20 Kemal Ataturk Avenue, Banani, Dhaka-1213

AGMA-02-21-18 To declare dividend for the year 2017

Dated, Dhaka By Order of the Board

Mostafa Kamal FCA

LANKABANGLA FINANCE LIMITED

Issue Manager of Energypac Power

In Advisory Business we have worked as Transaction Advisor

Company Registration Number C-31702 (823)/96

Bangladesh Bank License No. FID(L) - 1053/41-1088

Safura Tower (Level 11)

Company E-mail [email protected]

Company Website www.lankabangla.com

Assurance Nazir Tower, (Level-9), 65/B Kemal Ataturk Avenue, Banani,

Assurance Nazir Tower, (Level-6), 65/B Kemal Ataturk Avenue, Banani,

Safura Tower (Level 8)

SMC Tower (Level 17)

Adil & Associates

Sadat Sarwat & Associates

Assurance Nazir Tower, 65/B Kemal Ataturk Avenue

MIDAS Centre (8th Floor, North Side)

Uttara Tower (4th Floor), Plot # 1,

Northern Khan Height Tower (Level 3)

Peoples Insurance Bhaban (10th Floor)

Hal’s Aster Anwer (14th Floor), 1728 Sheikh Mujib Road,

Yunusco City Centre (8th Floor)

Khoirun Bhaban (Level 3)

Omri Mansion (3rd Floor), 349/KA (new)

56/1 Jalpatty Road (2nd Floor)

Mohashin Super Market (2nd Floor)

Tribune Tower (2nd floor), 2/A KDA Avenue

Ahmed Plaza (2nd floor), 182-Alo Patti, Ghoramara

Akter Square-1 (3rd floor)

MK Tower (Level - 4), B16/1, Jaleshwar, Shimultola, Savar,

Northen Plaza (Level - 4), Goneshtola,

Hazi alimullah complex (level -3), aganagar, south keraniganj, keraniganj,

Branches of LankaBangla Securities Limited

DSE Annex Building (1st Floor)

Assurance Nazir Tower (Level-6)

MIDAS Centre (8th floor)

Uttara Tower (4th Floor), Plot-1,

Haji Plaza (2nd Floor), 53/1, S.M. Maleh Road

HAL’S ASTER ANWAR, 13th floor

Asma Chamber, 1016 (Old)

Rahima Center (5th Floor)

J.R. Tower (3rd Floor),Jail Road, Sylhet-3100

Nahar Plaza (1st Floor)