Annual Report 2013 IPDC

32
Annual
Report
2013
Industrial Promotion and Development Company of Bangladesh Limited

www.ipdcbd.com
Contents
Notice of the 32nd Annual General Meeting 03

Corporate Information 04
Chairman’s Message 07
Managing Director’s Message 08
Directors’ Report to the Shareholders 09
Corporate Governance Compliance Certificate 28
Report of the Audit Committee 29
CEO and CFO’s Certification to the Board 31
Auditors’ Report to the Shareholders 32
Audited Financial Statements 34
Notes to the Financial Statements 39
Disclosure on Capital Adequacy and Market Discipline (CAMD) 71
Notice of the 32nd Annual General Meeting
Notice is hereby given that the 32nd Annual General Meeting of the shareholders of Industrial Promotion and Development
Company of Bangladesh Limited will be held on May 15, 2014 (Thursday) at 10:00 a.m. at the Conference Hall No. 3 of
BRAC-CDM, Rajendrapur, Gazipur to transact the following proceedings:
1. To receive and adopt the Directors’ Report, Auditors’ Report and Audited Financial Statements of the .................
....................Company for the year ended December 31, 2013;
2. To declare dividend for the year ended December 31, 2013;
3. To elect Directors;
4. To appoint Auditors and to fix their remuneration;
5. To confirm the appoinment of Mr. Shaffiq Dharamshi, Nominee-Director, AKFED;
6. To transact any others bunisess (if any) with the permission of the chair.
By Order of the Board
Samiul Hashim
Company Secretary
Dated: Dhaka
April 24, 2014
Notes:
March 27, 2014 shall be considered as the Record Date for entitlement of the Dividend for the year ended
..................December 31, 2013
Admission into the venue of the AGM will be allowed on submission of the attendance slip.
Only the shareholders or their appointed proxies will be allowed to attend the meeting.
A shareholder, intending to appoint a Proxy, must deposit the duly stamped Proxy Form at the Company’s
..................registered office no later than 48 hours before the day of the AGM.
Except the shareholders or valid proxies, no one will be authorized to complete registration process.
Annual Report 2013 03

Corporate Information
REGISTERED NAME OF THE COMPANY
Industrial Promotion and Development Company of Bangladesh Limited.
LEGAL FORM
A public limited Company incorporated in Bangladesh under The Companies Act 1913 (now the Companies Act 1994),
listed with the Dhaka and Chittagong Stock Exchange Limited since December 3, 2006.
Licensed as Financial Institution under the Financial Institutions Act 1993 on February 7, 1995.
Date of Incorporation: Auditors:
November 28, 1981 Hoda Vasi Chowdhury & Co.

Chartered Accountants
Company Registration No.: BTMC Bhaban (8th floor)
7-9 Karwan Bazar Commercial Area
C- 9566 of 1981-1982 dated 28.11.1981 Dhaka 1215
392
Corporate Governance Auditors:
Bangladesh Bank License No.:
Rahman Rahman Huq
BCD(Non Banking)/Dhaka/3/'95 dated 7.2.1995 Chartered Accountants
9 Mohakhali C/A (11th - 12th floors)
Dhaka 1212
Registered Office:
Hosna Centre (4th floor) Tax Consultants:
106 Gulshan Avenue, Dhaka 1212
PABX : (+88 02) 9885533-8 Rahman Rahman Huq
Fax : (+88 02) 9885532, 9885529 Chartered Accountants
E-mail : [email protected] 9 Mohakhali C/A (11th - 12th floors)
Web site : www.ipdcbd.com Dhaka 1212
Dhanmondi Branch:
Khandaker & Associates
Bikalpa Dental Clinic & Commercial Complex Eastern Commercial Complex
(3rd floor), House # 74, Road # 5A Room No. 4/3 (4th floor)
Satmasjid Road, Dhanmondi R/A, Dhaka 1207 73 Kakrail, Dhaka
Tel : (+88 02) 9614734-35, Fax : (+88 02) 9614736
Chittagong Branch: Legal Advisors:
Avenue Tower (3rd floor) A Hossian & Associates

115/134, Lalkhan Bazar Dr. M. Zahir
Chittagong 4100 A Rahman & Associates
Tel: (+88 031) 2866892-4, Fax: (+88 031) 2866895 Law & Remedy
Motijheel Branch: Mamun Chowdhury & Associates
Sarder Jinnat Ali
Surma Tower (4th loor)
59/2 Puran Paltan, Dhaka 1000 Principal Bankers:
Tel: (+88 02) 9551704, 9570666, Fax: (+88 02) 9564044
Sylhet Branch: Standard Chartered Bank
Prime Bank Limited
Khalil Trade Center (3rd floor) Uttara Bank Limited
House No. 01, Block D, Main Road AB Bank Limited
Shahjalal Uposhahar, Sylhet 3100 Commercial Bank of Ceylon PLC
Tel: (+88 0821) 711112, 711128, Fax: (+88 0821) 711177 Dutch Bangla Bank Limited

Board of Directors
Standing from (Left to Right): Ms. Ashraf Ali, Mr. Alauddin A. Majid, Mr. Md. Nazrul Huda, Mr. Shaffiq Dharamshi,
Mr. Mominul Islam- Managing Director & CEO, Mr. Amin H. Manekia, Mr. Altaf Ramzi
and Ms. Afroza Khan
Sitting from (Left to Right) : Mr. Jalal Ahmed, Mr. Sulaiman Ajanee- Chairman and Mr. Altaf Hussain
Management Committee
Front Row (Left to Right): Mr. Fazle Quayum - Head of Credit Risk Management, Mr. Md. Zakir Hossen- AGM Operations,
Mr. A.F.M. Barkatullah - DMD, Mr. Mominul Islam- MD & CEO, Mr. Mohammad Ruknuzzaman -
Head of Corporate Investment, Mr. Dilip Kumar Mandal - CFO
Back Row (Left to Right): Ms. Uzma Tahiya Khan - Human Resources, Mr. Shaheen Ahmed - Head of Special Asset
Management, Mr. Kazi Samiur Rahman - Head of Retail Business. Mr. A.S.M. Shahin - Head of
SME & MME, Mr. Samiul Hashim - Company Secretary & Head of Legal Affairs, Mr. Rizwan
Dawood Shams - Head of Channel Financing

Moments of 31st Annual General Meeting
Honorable Chairman of the Company delivering his speech The Board of Directors in the 31st Annual General Meeting
in the 31st Annual General Meeting
Managing Director & CEO of the Company addressing One of the Honorable Shareholders addressing in the 31st
queries from the shareholders in the 31st Annual General Annual General Meeting
Meeting
One of the Honorable Shareholders addressing in the 31st The Board of Directors along with few Shareholders in the
Annual General Meeting31stAnnual General Meeting 31st Annual General Meeting

Chairman's Message
Bismillahir Rahmanir Rahim
Distinguished Shareholders, Assalaamu A’laikum,
It is a great pleasure and a true honour to welcome you all to I want to take this opportunity to extend my sincere gratitude
the 32nd Annual General Meeting of your Company. To begin to our valued customers for their continued support and
with, let me express my heartfelt gratitude and appreciation loyalty, all our regulatory bodies for their kind cooperation,
for your kind patronage and continued trust in the Board and the Board of Directors for their leadership and the entire
the management of IPDC. IPDC Team who, in a year of change, has exceeded
expectations and delivered positive results for the benefit
I am pleased to report that 2013 was a year of achievement for of all our stakeholders.
your Company due to continued focus on cost containment,
effective risk management increased operational efficiency, and Lastly, I want to thank you, our esteem shareholders, for
above all, concentrating on the Company’s sustainable your generous patronage and the unwavering confidence
business model in the midst of a turbulent socio-economic that you have in your Company.
landscape. Our performance clearly shows that the
Company is forging ahead with a sound business strategy, I wish IPDC every success in the approaching year and
strong governance and the right leadership for delivering beyond.
sustainable value proposition to the shareholders.
Being the Chairman of this esteemed organization, I feel an

immense sense of pride in IPDC’s achievements over the
last 32 years. We have ended 2013 with good momentum SULAIMAN AJANEE
and the Board remains confident for the times ahead. Chairman
Though the coming year will bring its own challenges, Board of Directors
including changing market scenarios, we will remain Dhaka, March 16, 2014
focused on achieving long-term success by upholding our
core values – innovation, performance, dedication and
commitment to provide quality service to our clients.

Managing Director's Message
Success in difficult times calls for holding true to basic as by building appropriate organizational capacity. One of
tenets of effective behavior. our key priorities in 2014 will be to further develop our
capacity in soliciting quality credit proposals and
During 2013, we produced solid improvements in all the key fast-tracking the approval process. On the deposit side we
operational and financial parameters amidst serious disrup- will continue to focus on small ticket deposit mobilization
tions in the economy. IPDC posted Tk. 325.11 million in through our micro-marketing initiatives. In 2014 we will
operating profit for the year, up 56.68% from the previous also focus on corporate tie-ups for retail business expansion.
year, while the Company’s pre-tax profit surged by 80.44% Implementing responsibility center accounting along with
to Tk. 241.78 million. This is a demonstration of the true the new financial system will be another key priority which
character of the Company which did not only withstand but will enhance accountability of revenue and costs at the
also flourished in an adverse market condition. Despite business unit or functional level and will foster leadership in
facing multifarious challenges we remained faithful to our accelerated growth down the line. IPDC remains committed
business model which is built upon robust risk management to distinctively identify itself as the best customer service
framework, ethical business practices, continuous improve- provider in the financial sector and our pursuit towards this
ment in operational efficiency and a relentless pursuit for goal will continue in 2014 and beyond. Last but not the least,
creating extraordinary customer experiences. compliance remains a cornerstone in our organizational
culture and business processes and we will continue to focus
However, there is little room for complacency. We do not on maintaining strict compliance to all local regulations as
only need to meet short term earning targets but we have to well as adhering to international standard of corporate
also ensure adequate investments for the future for sustain- governance.
able growth over time. In a sluggish investment climate our
credit portfolio grew by 2.86%, somewhat at a lower pace I thank you all and wish you a meaningful year ahead.
than anticipated. However we have significantly improved
the credit quality during the year bringing down Gross Sincerely,
Classified Loan ratio to 5.95 % in 2013 from 9.66% in 2012.
The Net Classified Loan ratio has also dropped from 3.98 %
in 2012 to 2.37% in 2013 with Tk. 49.34 million additional
provision kept in the balance sheet on top of regulatory
requirement considering uncertain economic condition in
2014. This will help us to withstand any external shocks of MOMINUL ISLAM
considerable magnitude with relative ease. Customer depos- Managing Director & CEO
its, our core source for external funds, grew by 5.21% in Dhaka, March 16, 2014
2013 in line with the credit growth. However, individual
deposit grew by impressive 10.94% during the year which
remains our strategic priority. Most importantly in 2013
retail customer base has increased by 34.12% which will
have significant impact in reducing cost of fund over long
term.
With an aim to improve customer service and management

efficiency, IPDC undertook the project of Core Financial
Software implementation in 2013 which is expected to go
live in second quarter of 2014. IPDC re-launched its
Company webpage as well as launched its Facebook page at
the end of 2013. Going forward digital marketing will
remain our preferred route for brand promotion side by side
with micro-marketing programs. Human resources remain
our key differentiator in the market and we invested signifi-
cantly in people development in 2013. Total 40 employees
participated in local training programs while 6 employees
attended overseas training programs; in addition in-house
customer service and credit training programs and team
building events were arranged. We remain committed to
maintaining the best working environment for our employ-
ees which remains our competitive edge in attracting and
retaining talents.
The road ahead remains challenging and we stay focused on

combating the challenges by adopting fitting strategy as well
Annual Report 2013

Directors’ Report (continued)
Credit Risk In the normal course of business, IPDC has entered into
various transactions with related parties during the year 2013.
Credit risk is the potential loss arising from failure of a debtor Parties are considered to be related if one party has the ability
or counterparty to meet their contractual obligations resulting to control or exercise significant influence over the other
in a financial loss to IPDC. Credit risk includes concentra- party in making financial or operating decisions. These
tion risk which can result from interdependencies between transactions have taken place on an arm’s length basis and
counterparties and concentration of exposure to industry include rendering or receiving of services. The details of
sectors and geographical regions. Credit risk management related party transactions are disclosed in note number 50 of
processes involve identification, measurement, monitoring the Financial Statements.
and control of credit exposures. At IPDC, credit risk may
arise in the following form: exposure risk, counterparty risk Contribution to the National Economy
and default risk.
IPDC is the first private sector Non-banking Financial Institu-
Market Risk tion in Bangladesh and was established in 1981 by the Govern-
ment of Bangladesh and a number of distinguished multilateral
Market risk is the potential of loss arising from adverse developing agencies. IPDC was established with an aim to
changes in interest rates and changes in the price of securities. promote private sector industrial ventures in the country at a
Being a Financial Institution, the primary risk that arises for a time when all the banks in Bangladesh remained nationalized.
FI is interest rate risk. The immediate impact of changes in
interest rates is on the Company’s earnings due to changes its Since its inception IPDC has played a pivotal role in develop-
Net Interest Margin (NIM). ing the private sector industrialization in Bangladesh through
Liquidity Risk
The financial statements prepared by the management
Liquidity risk is the risk of being unable to meet financial
of IPDC presents fairly its state of affairs, the results of
obligations as they fall due. This arises mainly due to
its operations, cash flows and changes in equity.
mismatch in maturity of assets and liabilities. The overall
responsibility for measuring and monitoring the liquidity risk Proper books of accounts of the Company have been
for FI rests with the Asset Liability Management Committee maintained.
(ALCO).
Appropriate accounting policies have been consis-
Operational Risk tently applied in the preparation of financial
statements and accounting estimates are based on
Operational risk is the risk of loss resulting from inadequate reasonable and prudent judgment.
or failed internal processes, people and systems or external
International Accounting Standards (IAS)/Bangladesh
factors. It includes legal, regulatory, fraud, business continu-
Accounting Standards (BAS)/International Financial
ity and technology risk. In order to control its operational
Reporting Standards (IFRS)/Bangladesh Financial
risk, IPDC primarily relies on its internal audit and internal
Reporting Standards (BFRS) as applicable in Bangladesh
control systems.
have been followed in preparation of the financial
statements and any departure there from has been
Compliance Risk
adequately disclosed.
Compliance risk is the risk which is arises due to legal or The system of internal control is sound in design and
regulatory breach. The Company may suffer material has been effectively implemented and monitored.
financial loss or loss of reputation as a result of its failure to
comply with the requirements of relevant laws, regulatory There are no significant doubts upon the Company’s
bodies etc. ability to continue as a going concern.
Reputational Risk
Directors’ Meetings, Attendance and Remuneration
Reputational risk arises from negative perception on the part
of customers, counterparties, shareholders, investors,debt During the year ended December 31, 2013 a total 5 (five)
holders, market analysts, regulators and other relevant Board Meetings were held and attendance by the Directors
parties. This risk may adversely affect the Company’s ability along with remuneration paid to them are summarized in
to maintain existing business relationships or impede the Annexure - IV in this annual report at page no 17.
establishment of new relationships.
Related Party Transaction

Annexure - I
Key Operating and Financial Data of Preceeding Five Years
Taka in million
2009 2010 2011 2012 2013 Growth (%)
Operational Result
Operational Income 654.28 567.24 692.58 861.41 1,019.25 18.32%
Financial Expenses 360.22 298.53 431.52 554.66 627.68 13.16%
Operational Expenses 81.04 117.90 133.58 131.63 153.18 16.37%
Operating Profit 216.86 230.30 132.10 207.50 325.11 56.68%
Profit Before Tax 142.42 206.21 139.60 134.00 241.78 80.43%
Net Profit After Tax 1 136.61 176.20 111.67 128.60 141.98 10.40%
Financial Perfomance
Disbursement - Loans, Leases, Advances etc. 1,216.21 1,608.66 1,979.82 3,316.94 3,492.20 5.28%
Outstanding Loans, Leases and Advances 4,548.49 4,150.96 4,325.02 5,585.64 5,745.51 2.86%
Property, Plant and Equipment 73.57 80.69 81.02 76.21 107.83 41.49%
Total Assets 6,042.82 6,241.91 6,761.09 7,114.51 7,758.92 9.06%
Term Deposits 2,329.40 3,180.86 3,798.24 4,208.01 4,427.09 5.21%
Borrowings 782.65 123.84 104.02 29.70 413.98 1293.87%
Total Liabilities and Equity 6,042.82 6,241.91 6,761.09 7,114.51 7,758.92 9.06%
Equity Information
Shareholders' Equity 1,610.85 1,787.05 1,898.72 2,027.33 2,064.97 1.86%
Paid up Capital 783.92 862.31 948.54 1,043.39 1,043.39 0.00%
Number of Ordinay Shares2 7,839,162 8,623,078 94,853,850 104,339,235 104,339,235 0.00%
Net Asset Value Per Share (NAV)3 205.49 207.24 20.02 19.43 19.79 1.85%
Earnings per Share (EPS)4 17.43 18.6 1.07 1.23 1.36 10.57%
Rate of Dividend 10.00% 10.00% 10.00% 10.00% 15% 50.00%
Year end Market Price per Share5 451.00 687.75 31.80 18.00 20.00 11.11%
Market Capitalization6 3,535.46 5,930.52 3,016.35 1,878.11 2,086.78 11.11%
Financial Ratios
Current Ratio (Times) 1.07 1.06 1.36 1.39 1.18 -15.11%
Debt Equity Ratio (Times) 0.13 0.52 0.26 0.23 0.20 -13.04%
Interest Coverage Ratio (Times) 3.74 11.60 4.70 6.36 7.28 14.47%
Return on Asset 6.19% 3.00% 1.72% 1.85% 1.91% 3.24%
Price Earning Ratio (Times) 31.93 24.28 29.71 14.60 14.70 0.68%
Rate of NPL 27.15% 26.98% 13.04% 9.66% 5.95% -38.41%
Rate of net NPL 6.42% 8.65% 1.87% 3.98% 2.37% -40.45%
1
PAT of year 2009 - 2010 has been restated due to adjustment of deferred tax in compliance with Bangladesh Bank circular
number DFIM 07 dated July 31, 2011.
2
Denomination of face value of shares has been converted to Tk. 10 from Tk. 100 w.e.f. December 4, 2011.
3
NAV for the year 2009-2010 has been calculated using the face value per share of Tk. 100 each.
4
EPS has been restated for the year 2009 - 2011 due to issuance of bonus shares.
5
Year end Market Price per Share for the year of 2009-2010 has been considered having face value of Tk. 100 each.
6
Market Capitalization for the year 2009-2010 has been calculated using Market Price per Share with face value of Tk. 100
each.

Annexure - II
Assessment Report on the Going Concern of IPDC
Going concern is one of the fundamental assumptions in the Creditability in Settlement of Obligations
preparation of financial statements. As per the requirements
of Bangladesh Accounting Standards, Companies Act, The Company has strong credibility in terms of settlement of
Listing Rules and Bangladesh Securities & Exchange its obligations to the lenders and has no default history for
Commission Guidelines, management and directors should settlement of its obligations.
satisfy themselves about the appropriateness of using going
Growth in Operating Profit
concern assumption in the preparation of the financial
statements. The management of an entity therefore has a In the year 2013, IPDC achieved 56.68 percent growth in
responsibility to assess the entity’s ability to continue as a operating profit compared to previous year which reflects its
going concern in the foreseeable future. Under the going efficiency and success story of its policies.
concern assumption, an entity is normally viewed as
continuing in business for the foreseeable future with neither Growth in Lending Portfolio
the intention nor the necessity of liquidation, ceasing trading
In the year 2013 performing portfolio of loans, leases and
or seeking protection from creditors pursuant to laws or advances increased by 7.08 percent over 2012 which
regulations. represents the positive indication of business growth of the
The management and directors of the Company has made Company.
annual assessment for the year ended December 31, 2013 of Other Indications
whether the Company is a going concern, which involves
making appropriate inquiries including review of budget and Employee Satisfaction and Working Environment
future outcome of inherent risk associated in the business. IPDC is one of the employee friendly organizations in the
The management and directors of the Company are satisfied financial sector. There is a very good corporate environment
from the following factors that the preparation of Financial within the Company. The Company pays a very competitive
Statements for the year ended December 31, 2013 on the compensation package with fringe benefit like car facilities,
basis of going concern assumption is appropriate. provident fund, performance bonus, gratuity, group
Financial Indications insurance, hospitalization insurance, reward and recognition
program etc.
Positive Net Current Assets
IPDC has favorable net current assets of Tk. 598.29 million Maintenance of Capital Adequacy Ratio (CAR)
as at December 31, 2013 which indicates Company’s ability As per DFIM circular number 14 dated December 28, 2011 of
to meet its short term obligations out of the short term assets. Bangladesh Bank regarding Capital Adequacy and Market
Less Dependency on Borrowings Discipline for Financial Institutions, each Financial Institu-
tion is required to maintain Capital Adequacy Ratio (CAR) at
As at December 31, 2013 total borrowing of the Company least 10.00 percent of the total risk weighted assets. As at
was Tk. 413.98 million which is 7.27 percent of the total December 31, 2013 CAR of IPDC is 24.36 percent vis-à-vis
liabilities which indicate that Company has no dependency requirement of 10.00 percent which is 14.36 percent higher
on bank borrowings. than the required CAR.
Continuous Support from the Depositors Strong Equity Base
The Company enjoys good relationship with the depositors of IPDC is one of the highest equity based Company among the
the Company and maintains an excellent track record and Financial Institutions. As at December 31, 2013 total equity
reputation in settlement of its obligations towards the deposi- of the Company is Tk. 2,064.97 million which includes paid
tors. As at December 31, 2013 total customer deposits stood up capital of Tk. 1,043.39 million. This reflects long term
at Tk. 4,427.09 million with the growth of 5.21 percent over viability and sustainability of the Company.
previous year. This indicates that the Company has been
successful in building up confidence amongst the depositors Changes in Government Policy
and is very optimistic to further develop it in coming days. Management and the directors anticipate no significant
change in legislation or government policy which may
Favorable Key Financial Ratio
materially affect the business of the Company.
Company’s financial ratios (Please see the Key Operating and
Financial Data at page number 14) reveal the sound financial Based on the review of the major indicators, the management
health and future strength of the Company. and directors of the Company is of the view that the prepara-
tion of the financial statements of the Company for the year
Regular Payment of Dividend ended December 31, 2013 on the basis of going concern
assumption is appropriate.
IPDC has been paying dividend on a regular basis to the
shareholders over the years.

Annexure – III
Pattern of Shareholdings as at December 31, 2013
Name Position No. of shares
Parent/subsidiary and Directors

Parent/subsidiary/associates and other related parties Not Applicable Nil
Mr. Sulaiman Ajanee, his spouse and minor child Chairman 11
Mr. Altaf Hussain, his spouse and minor child Director 11
Ms. Ashraf Ali, her spouse and minor child Director 11
Mr. Alauddin A. Majid, his spouse and minor child Director 660
Top Executives
Mr. Mominul Islam Managing Director & CEO Nil
Mr. Dilip Kumar Mandal Chief Financial Officer (CFO) Nil
Mr. Samiul Hashim Company Secretary (CS) Nil
Mr. Muhammad Sami Ul Hoque Incharge - Head of Internal Audit (HIA) Nil
Top Five Executives other than CEO, CFO CS and HIA

Mr. Abul Fazal Muhammad Barkatullah Deputy Managing Director Nil
Mr. Mohammad Ruknuzzaman Deputy General Manager Nil
Mr. Fazle Quayum Deputy General Manager Nil
Mr. Rizwan Dawood Shams Deputy General Manager Nil
Mr. A. S. M. Shahin Deputy General Manager Nil
Shareholders’ holding 10% or more voting right

Name of shareholder No. of shares %
Government of the People’s Republic of Bangladesh (GoB) 22,828,971 21.88
Aga Khan Fund for Economic Development (AKFED) 53,267,467 51.05

Annexure – IV
Meeting Attended by the Directors during 2013
Board of Directors Meeting Executive Committee Meeting Audit Committee Meeting

Total no. of Total no. of Total
Annual Report 2013

Name of Director meetings held Remuneration meetings held Remuneration meetings held Remuneration Total
Meetings Meetings Meetings
during paid for attending during paid for attending during paid for attending remuneration Remarks
attended attended attended
director's the meetings director's the meetings director's the meetings paid in 2013
Tenure tenure tenure
Taka Taka Taka Taka
Mr. Sulaiman Ajanee 5 5 - - - - - - - - Nominated by AKFED
Mr. Md. Nazrul Huda 5 5 25,000 - - - 5 5 25,000 50,000 Independent Director
Mr. Alauddin A. Majid 5 5 25,000 12 11 55,000 - - - 80,000 Independent Director
Mr. Jalal Ahmed 5 5 25,000 12 10 50,000 - - - 75,000 Nominated by GoB
Ms. Afroza Khan 5 5 25,000 - - - 5 4 20,000 45,000 Nominated by GoB
Mr. Altaf Hussain 5 5 25,000 12 12 60,000 - - - 85,000 Nominated by AKFED
Mr. Shaffiq Dharamshi1 2 2 - 3 2 - - - - - Nominated by AKFED
Mr. Altaf Ramzi 5 5 25,000 - - - 5 5 25,000 50,000 Nominated by AKFED
Mr. Amin H. Manekia 5 4 20,000 - - - 5 4 20,000 40,000 Nominated by AKFED
Ms. Ashraf Ali 5 5 25,000 - - - 5 4 20,000 45,000 Nominated by AKFED
Mr. Mansoor Ali Halari1 3 2 10,000 9 5 25,000 - - - 35,000 Nominated by AKFED
Total Remuneration paid 205,000 190,000 110,000 505,000
Note:
Leave of absence was granted in all cases of non attendance
1
Mr. Mansoor Ali Halari was a nominee director of AKFED, he was replaced by Mr. Shaffiq Dharamshi on 03.10.2013.
17
Annexure - V
The Brief Profile of the Board of Directors
Sulaiman Ajanee, Chairman – Nominated by AKFED Director since 21 January 2004
Mr. Ajanee is the member of the Board since January 2004. He Other Interests:
is the Director nominated by Aga Khan Fund For Economic President: His Highness Prince Aga Khan Shia
Development(AKFED) and has been serving as Chairman of Imami Ismaili Council, Bangladesh
the Board since October 2010. He was also the member of the Vice Chairman: Aga Khan Foundation, Bangladesh
Board Executive Committee. Managing Director: World Com Limited.
Managing Partner: Standard Finis Oil Company.
Mr. Ajanee is a renowned business personality of the country Qualifications:
and has extensive experience in chemical and insecticide Associate in Industrial Engineering, USA.
business.
Age: 50 years
Alftaf Hussain, Director – Nominated by AKFED Director since 23 January 2006
Mr. Hussain is a Director of the Board of IPDC since January Other Interests: None
2006 and serving as Chairman of the Board Executive
Committee. Qualifications:
B.Com (Hons); M. Com from Hailey College of
Mr. Hussain is a veteran banker and served Habib Bank Commerce, Punjab University, Pakistan.
Limited, a leading international bank of Pakistan for about 39
years in various positions. He has extensively worked on Age: 70 years
overseas assignments which include his posting as Regional
General Manager-Gulf, General Manager-Bahrain and
Managing Director of a Finance Company in Kuwait. Prior to
his retirement, he was the Senior Executive Vice President of
Habib Bank Limited.
Ashraf Ali, Director – Nominated by AKFED Director since 29 October 2006
Ms. Ali is on the Board of IPDC since October 2006 and Other Interests: None
member of the Board Audit Committee since December 2012. Advisor: Form Icon Limited.
Ms. Ali worked for British Airways as Sales Manager for 22 Qualifications:
years and took early retirement in 2000. During her tenure M.A. in Political Science from the University of
with British Airways she won many awards for outstanding Dhaka.
performance. She is involved with community work and
served as the President of the Aga Khan National Council for Age: 65 years
Bangladesh from 1993-1999 and a member of the National
Committee of Aga Khan Foundation, Bangladesh.
Altaf Ramzi, Director – Nominated by AKFED Director since 07 October 2008
Mr. Ramzi is on the Board of IPDC since October 2008 and he Other Interests:
is a member of the Board Audit Committee since April 2009. Director:
Signet Enterprise Ltd
Mr. Ramzi was a banker in profession. He started his career Scotia Services Ltd
with the Bank of Credit and Commerce International (SA) Apparel Connection
Limited (BCCI) in 1981 as an officer in International Cadre. Ismailia Co-operative Society
He then served in BCCI in various capacities and was posted
in Egypt, Pakistan and London. He was also Consultant in Qualifications:
Deloitte Touche Tohmatsu – a London-based global Chartered Master in Accounting, University of Karachi,
Accountants firm. He also held the position of Marketing Pakistan.
Manager of Signet Enterprises Limited, UK. Coming to
Bangladesh in 1996, he has been serving as the General Age: 56 years
Manager of Signet Enterprises Ltd. and Scotia Services Ltd.
Currently, he holds the position of Director in both Compa-
nies.

Ms. Khan joined the Bangladesh Civil Service (BCS) Admin- Qualifications:
istrative Cadre in 1988. Her career with the Government of Master of Soil, Water and Environment, University of
Bangladesh spans over 24 years during which she has served in Dhaka
various Ministries in different capacities, particularly the Master of Public Health, University of North Carolina,
Ministry of Health and Family Welfare, Ministry of Posts and Chapel Hill, USA
Telecommunications and Ministry of Public Administration.
Ms. Khan has also worked as a consultant for the ILO, Dhaka Age: 54 years
Office, and is a member of different professional bodies
concerning Civil Service in Bangladesh. At present Ms. Khan
is serving as a Joint Secretary in the Ministry of Industries
where she is a senior team member in the International
Cooperation Wing.
Md. Nazrul Huda - Independent Director Director since 20 December 2012

Mr. Huda has been appointed as an Independent Director on Other Interests:
the Board of IPDC since December 2012, he is also the Advisor: BRAC Bank Limited
Chairman of the Board Audit Committee since his induction on Director: Securities and Investment Co. Ltd.
the Board.
Mr. Huda’s impressive career serving the Government of Qualifications:

Bangladesh includes 35 years of central banking experience, M.A. (Economics), University of Dhaka
namely in Banking Policy and Banking Supervision. Most M.A. (Economics) University of New England,
recently Mr. Huda held the post of Deputy Governor of Australia
Bangladesh Bank and was actively involved in policy, institu-
tional and legal reforms relating to the banking sector and has Age: 60 years
made numerous contributions in this regard.
Shaffiq Dharamshi, Director – Nominated by AKFED Director since 03 October 2013
Mr. Shaffiq Dharamshi is a professional banker with over Other interest: None
twenty years of senior management experience in the Middle
East and Africa. He is Head of Banking for Aga Khan Fund for Qualifications:
Economic Development (AKFED), and responsible for BSc in Economics from Trent University, Ontario
providing oversight on operations of financial institutions in MSc in Economics & Information System from
the AKFED portfolio across Asia and Africa. Prior to taking London School of Economics
this position, Mr. Dharamshi was Senior Vice President,
Wholesale Credit Risk Management at Mashreq Bank in Age: 49 years
Dubai. Before joining Mashreq Bank, Mr. Dharamshi spent 17
years with Citibank in a variety of positions across different
areas of the bank in Africa and the Middle East. His last
position with Citibank was Country Risk Head for Kuwait and
Levant.
Mominul Islam, Managing Director - Ex Officio Managing Director since 04 January 2012
Mr. Islam is holding the position of Managing Director & Other Interests: None
CEO since January 2012. Prior to that he was the Deputy
Managing Director of the Company from July 2008 to Qualifications:
December 2011. Mr. Islam joined IPDC in the year 2006 as BBA from IBA, University of Dhaka.
Head of Operations. During his tenure at IPDC, he has played
pivotal role in reshaping the organization through strategic Age: 37 years
planning, organizational restructuring, automation, process
reengineering, control and compliance, service quality etc.
Prior to joining IPDC he worked in American Express Bank
(AEB) and Standard Chartered Bank (SCB) for more than 7
(seven) years with an enriching career in different areas of the
Banks e.g. General Banking, Reengineering, Service Quality,
Risk Management, Project Management, Business Contin-
gency Planning etc. During his tenure at AEB he went through
the Six Sigma Black Belt training at Brighton, UK and
managed several Six Sigma projects for AEB Bangladesh,
Singapore, UK, Hong Kong, India and USA.

Annexure - VI
Corporate Governance Compliance Report on BSEC’s Notification
Status of compliance with the conditions imposed by Bangladesh Securities and Exchange Commission’s notification
No.SEC/CMRRCD/2006-158/134/Admin/44 dated August 07, 2012 issued under section 2CC of the Securities and
Exchange Ordinance 1969. The status report on compliance with those conditions is furnished below:
Condition Compliance
No. Title Status Remarks
1.0 Board of Directors

1.1 The number of board members should not be less than 5 (five) and more Complied
than 20 (twenty)
1.2 Independent Directors
1.2 (i) At least one fifth (1/5) of the total number of directors should be Complied
Independent Directors.
1.2 (ii) Meaning of Independent Directors
1.2 (ii)(a) Who either does not hold any share in the Company or hold less than 1 Complied
(one) percent shares of the total paid up shares of the Company
1.2 (ii)(b) Who is not a sponsor of the Company and is not connected with the Complied
Company’s any sponsor or director or shareholder
1.2 (ii)(c) Who does not have any other relationship, whether pecuniary or Complied
otherwise, with the Company or its subsidiary/associated companies
1.2 (ii)(d) Who is not a member, director or officer of any stock exchange Complied
1.2 (ii)(e) Who is not a shareholder, director or officer of any member of stock Complied
exchange or an intermediary of the capital market
1.2 (ii)(f) Who is not a partner or an executive or was not a partner or an executive Complied
during the preceding 3 (three) years of the concerned Company’s statutory
audit firm
1.2 (ii)(g) Who shall not be an independent director in more than 3 (three) listed Complied
companies
1.2 (ii)(h) Who has not been convicted by a court of competent jurisdiction as a Complied
defaulter in 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 Complied
turpitude
1.2 (iii) Independent Director (ID) shall be appointed by the board and approved Complied
by the shareholders in the AGM.
1.2 (iv) The post of Independent Director(s) cannot remain vacant for more than No such
90 (ninety) days vacancy
created
1.2 (v) The Board shall lay down a code of conduct of all Board members and Complied
annual compliance of the code to be recorded
1.2 (vi) The tenure of office of an Independent Director shall be for a period of 3 Complied
(three) years, which may be extended for 1 (one) term only
1.3 Qualification of Independent Director
1.3(i) Independent Director shall be a knowledgeable individual with integrity Complied
who is able to ensure compliance with financial, regulatory and corporate
laws and can make meaningful contribution to business
1.3(ii) The person should be a Business Leader/Corporate Complied
Leader/Bureaucrat/University Teacher with Economics or Business Studies
or Law background/Professionals like Chartered Accountants, Cost &
Management Accountants and Chartered Secretaries. The Independent

Director must have at least 12 (twelve) years of corporate

management/professional experiences
1.3(iii) In special cases the above qualifications may be relaxed subject to prior No such
approval of the Commission deviation
occurred
1.4 Chairman of the Board and Chief Executive Officer
The Chairman and the Chief Executive Officer should be different Complied
persons. The Chairman shall be elected from among the directors and
Board shall clearly define the roles and responsibilities of the Chairman
and the Chief Executive Officer.
1.5 The Directors’ Report to Shareholders shall include the following statements
1.5(i) Industry outlook and possible future developments in the industry Complied
1.5(ii) Segment-wise or product-wise performance Complied
1.5(iii) Risks and concerns Complied
1.5(iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Complied
Margin
1.5(v) Discussion on continuity of any Extra Ordinary gain or loss Complied
1.5(vi) Basis for related party transactions a statement of all related party Complied
transactions should be disclosed in the annual report
No such item
1.5(vii) Utilization of proceeds from public issues, rights issues and/or through exists
any others instruments
No such event
1.5(viii) An explanation if the financial results deteriorate after the Company goes occurred
for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights
Offer, Direct Listing, etc.
1.5(ix) If significant variance occurs between Quarterly Financial performance Complied
and Annual Financial Statements, the management shall explain about the
variance in their Annual Report.
1.5(x) Remuneration to directors including Independent Directors. Complied
1.5(xi) Fairness of Financial Statements. Complied
1.5(xii) Maintain proper books of accounts. Complied
1.5(xiii) Adoption of appropriate accounting policies and estimates and have been Complied
applied consistently
1.5(xiv) International Accounting Standards(IAS)/Bangladesh Accounting Complied
Standards(BAS)/International Financial Reporting Standards(IFRS)/
Bangladesh Financial Reporting Standards(BFRS) as applicable in
Bangladesh, have been followed in preparation of Financial Statements
and any departure there from has been adequately disclosed
1.5(xv) System of Internal Control is sound in design and has been effectively Complied
implemented and monitored.
1.5(xvi) Ability of the Company to continue as a Going Concern Complied
1.5(xvii) Highlighted the significant deviation of operating results from prior year. Complied
1.5(xviii) Summarized the key operating and financial data of at least preceding 5 Complied
(five) years.
1.5(xix) Declaration of dividend Complied
1.5(xx) Number of Board Meetings held during the year and attendance by each Complied
Director
1.5(xxi) The pattern of shareholding Complied

1.5(xxii) In case of Appointment/re appointment of Directors, the Company shall

disclose the following to the shareholders:
1.5(xxii)(a) A brief resume of the Director Complied
1.5(xxii)(b) Nature of his/her expertise in specific functional areas Complied
1.5(xxii)(c) Name of companies in which he/she holds the directorship and the
Complied
membership of the committees of the Board
2.0 Chief Financial Officer (CFO), Head of Internal Audit (HIA) and
Company Secretary (CS)
2.1 Appointment of CFO, HIA and CS and board shall clearly define the Complied
roles, responsibilities and duties of CFO, HIA and CS
2.2 The CFO and CS shall attend the Board Meeting except such part of the Complied
meeting which involves consideration of agenda relating to them
3.0 Audit Committee
3.0(i) An Audit Committee as sub committee of the Board of Directors Complied
3.0(ii) The Audit Committee shall assist the Board of Directors in ensuring that Complied
the Financial Statements reflect true and fair view of the state of affairs of
the Company and in ensuring a good monitoring system within the
business
3.0(iii) The Audit Committee shall be responsible to the Board of Directors. The Complied
duties of the Audit Committee shall be clearly set forth in writing
3.1 Constitution of Audit Committee
3.1(i) Audit Committee should be composed of at least 3 (three) members Complied
3.1(ii) Members of the Audit Committee should be appointed by the Board with Complied
at least 1 (one) Independent Directors
3.1(iii) All members of the Audit Committee should be “financially literate” and Complied
at least 1 (one) member shall have accounting or related financial
management experience
3.1(iv) The Board will ensure continuity term of the Audit Committee and Complied
maintain the minimum number of members of the Committee and if any
vacancy arises the Board will fill up the vacancy within 1 (one) month
3.1(v) The Company secretary shall act as the secretary of the Committee Complied
3.1(vi) The quorum of the Audit Committee meeting shall not constitute without Complied
at least 1 (one) independent director
3.2 Chairman of the Audit Committee
3.2(i) The Board of Directors shall select 1 (one) member of the Audit Complied
Committee to be Chairman of the Audit Committee, who shall be an
Independent Director
3.2(ii) Chairman of the Audit Committee shall remain present in the Annual Complied
General Meeting (AGM)
3.3 Role of Audit Committee
3.3(i) Oversee the financial reporting process. Complied
3.3(ii) Monitor choice of accounting policies and principles Complied
3.3(iii) Monitor Internal Control Risk management process Complied
3.3(iv) Oversee hiring and performance of external auditors Complied
3.3(v) Review along with the management, the annual Financial Statements Complied
before submission to the Board for approval
3.3(vi) Review along with the management, the quarterly and half yearly Complied
Financial Statements before submission to the Board for approval
3.3(vii) Review the adequacy of internal audit function Complied
3.3(viii) Review statement of significant related party transactions submitted by Complied
the management

3.3(ix) Review Management Letters/ Letter of Internal Control weakness issued Complied
by statutory auditors
3.3(x) When money is raised through Initial Public Offering (IPO)/Repeat Public Not There was no
Offering (RPO)/Rights Issue the Company shall disclose to the Audit Applicable IPO/PRO/Right
Committee about the uses/applications of funds by major category (capital Issue in 2013.
expenditure, sales and marketing expenses, working capital, etc) on a
quarterly basis, as a part of their quarterly declaration of financial results.
Further, on an annual basis, the Company shall prepare a statement of
funds utilized for the purposes other than those stated in the offer
document/prospectus.
3.4.1 Reporting of Audit Committee to the Board of Directors
3.4.1(i) Audit Committee reports on its activities to the Board of Directors Complied
3.4.1(ii) The Audit Committee shall immediately report to the Board of Directors on
the following findings, if any:
3.4.1(ii) (a) Report on conflict of interest No such event
occurred
3.4.1(ii) (b) Any suspected or presumed fraud or irregularity or material defect in the No such event
internal control system occurred
3.4.1(ii) (c) Suspected infringement of laws, including securities laws, rules and No such event
regulations occurred
3.4.1(ii) (d) Any other matter which shall be disclosed to the Board of Directors No such event
immediately occurred
3.4.2 Reporting to Authorities
If any report which materially impacts the financial condition & results of
operation has been discussed with the Board of Directors and the management
and that any rectification which is necessary is unreasonably ignored, No such event
Audit Committee shall report such finding to BSEC upon reporting of such occurred
matters to the Board for three times or completion of a period of 6 (six)
month from the date of first reporting to the Board whichever is earlier
3.5 Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee including any No such event
report made to the Board under condition 3.4.1 (ii) above during the year, occurred under
shall be signed by the Chairman of the Audit Committee and disclosed in condition
the annual report of the issuer Company 3.4.1 (ii)
4 External/Statutory Auditors should not be engaged to the following services

4(i) Appraisal or valuation services or fairness opinions Complied
4(ii) Designing of Financial Information System and implementation Complied
4(iii) Book Keeping or other services related to the accounting records or Complied
Financial Statements
4(iv) Broker Dealer services Complied
4(v) Actuarial services Complied
4(vi) Internal Audit services Complied
4(vii) Any other services that the Audit Committee determines Complied
4(viii) No partner or employees of the external audit firms shall possess any Complied The Audit firm
share of the Company they audit at least during the tenure of their audit has declared that
assignment of that Company. none of them
holds any share
in the Company.

4(ix) Audit/certification services on compliance of corporate governance as Complied

required under clause (i) of condition number 7.
5 Subsidiary Company
5(i) Provisions relating to the composition of the Board of Directors of the Not The Company
holding company shall be made applicable to the composition of the Applicable does not have
Board of Directors of the subsidiary company. any subsidiary.
5(ii) At least 1 (one) Independent Director on the Board of Directors of the Not Do
holding company shall be a director on the Board of Directors of the Applicable
subsidiary company
5(iii) The minutes of the Board Meeting of the subsidiary company shall be Not Do
placed for review at the following Board Meeting of the holding company. Applicable
5(iv) The minutes of the respective Board Meeting of the holding company Not Do
shall state that they have reviewed the affairs of the subsidiary company Applicable
too
5(v) The Audit Committee of the holding company shall also review the Not Do
Financial Statements, in particular the investments made by the subsidiary Applicable
company
6 CEO and CFO’s Certification of Financial Statements to the Board
6(i) They have reviewed Financial Statements for the year and that to the best
of their knowledge and belief:
6(i)(a) These statements do not contain any materially untrue statement or omit Complied
any material fact or contain statements that might be misleading
6(i)(b) These statements together present a true and fair view of the Company’s Complied
affairs and are in compliance with existing accounting standards and
applicable laws
6(ii). There are, to the best of knowledge and belief, no transactions entered Complied
into by the Company during the year which are fraudulent, illegal or
violation of the Company’s code of conduct
7 Reporting and Compliance of Corporate Governance
7( i) The Company shall obtain a certificate from a practising Professional Complied
Accountant/Secretary (Chartered Accountant/Cost & Management
Accountants/Chartered Secretary) regarding compliance of conditions of
Corporate Governance Guidelines of the Commission and shall send the
same to the shareholders along with the Annual Report on a yearly basis
7(ii) The Directors of the Company shall state, in accordance with the Annexure Complied
attached, in the directors’ report whether the company has complied with
these conditions

Annexure-VII
Statement of Compliance on the Good Governance Guidelines
Issued by Bangladesh Bank
In terms of DFIM Circular No. 07 dated September 25, 2007 of Bangladesh Bank, Financial Institutions are required to
comply with the policy on role and responsibility of the Board of Directors and Chief Executive Officer. The Company has
implemented those guidelines as per the directives of Bangladesh Bank.
Status report on compliance with those guidelines is given below:
Sl. Particulars Compliance Status
01. Responsibilities and authorities of the Board of Directors
A. Work Planning and Strategic Management

i. The Board shall determine the objectives and goals and to this end shall chalk out Complied
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 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.
ii. The Board shall have its analytical review incorporated in the Annual Report as regard the Complied
success/failure in achieving the business and other targets as set out in its annual work-
plan and shall apprise the shareholders of its opinions/recommendations on future plans
and strategies.
iii. The Board will set the Key Performance Indicator (KPI)s for the CEO and other senior Complied
executives and will evaluate half yearly / yearly basis.
B Formation of sub-committee
To expedite the process of decision making, (e.g. approval of loan/lease, write off, Complied
rescheduling etc.) Board may form Executive Committee with the Director (excluding
any alternate director)
C Financial Management
i. Annual budget and statutory Financial Statements shall be adopted finally with the Complied
approval of the Board.
ii. Board shall review and examine on quarterly basis various statutory Financial Statements Complied
such as statement of income-expenses, statement of loan/lease, statement of liquidity,
adequacy of capital, maintenance of provision, legal affairs including actions taken to
recovery of overdue loan/lease.
iii. Board shall approve the procurement policy and shall accordingly the delegation of the power Complied
for making such expenditure. The maximum delegation of power shall rest on the CEO
and top management. However, decision relating to purchase of land, building and
vehicles shall remain with the Board.
iv. The Board shall adopt the operation of bank accounts. Groups may be formed among the Complied
management to operate bank accounts under joint signatures.
D Management of loan/lease/investments
i. Policy on evaluation of loan/lease/investment proposal, sanction and disbursement and its Complied
regular collection and monitoring shall be adopted and reviewed by the Board regularly
based on prevailing laws and regulations. Board shall delegate the authority of
loan/lease/investment specifically to management preferably to Managing Director and
other top executives.
ii. No Director shall interfere on the approval of loan proposal associated with him. The Complied
Director concerned shall not give any opinion on that loan proposal.
iii. Any syndicated loan/lease/investment proposal must be approved by the Board. Complied
E. Risk Management
Risk Management Guideline framed in the light of Core Risk Management Guideline Complied
shall be approved by the Board and reviewed by the Board regularly.
F. Internal Control and Compliance
A regular Audit Committee as approved by the Board shall be formed. Board shall Complied
evaluate the reports presented by the Audit Committee on compliance with the
recommendation of internal auditor, external auditors and Bangladesh Bank Inspection
team.

G. Human Resource Management

i. Board shall approve the policy on Human Resources Management and Service Rule. Complied
Chairman and director of the Board shall not interfere on the administrative job in line
with the approved Service Rule.
ii. Only the authority for the appointment and promotion of the Managing Director (MD), Deputy Complied
Managing Director (DMD), General Manager (GM) and other equivalent position shall lie with
the Board in compliance with the Policy and Service Rule. No Director shall be included in any
Executive Committee formed for the purpose of appointment and promotion of others.
H. Appointment of CEO
The Board shall appoint a competent CEO for the Company with the approval of the Complied
Bangladesh Bank and shall approve any increment of his salary and allowances.
I. Benefit to the Chairman
Chairman may be offered an office room, a personal secretary, a telephone at the office, a Complied
vehicle in the business-interest of the Company subject to the approval of the Board.
J. Responsibilities and Duties of the Chairman
i. Chairman shall not participate in or interfere into the administrative or operational and Complied
routine affairs of the Company as he has no jurisdiction to apply executive power;
ii. The minutes of the Board Meetings shall be signed by the Chairman; Complied
iii. Chairman shall sign-off the proposal for appointment of Managing Director and increment Complied
of his salaries & allowances;
K. Responsibilities of Managing Director & CEO
i. Managing Director shall discharge his responsibilities on matters relating to financial, Complied
business and administration vested by the Board upon him. He is also accountable for
achievement of financial and other business targets by means of business plan, efficient
implementation of administration and financial management;
ii. Managing Director shall ensure compliance of Financial Institutions Act 1993 and other Complied
relevant circulars of Bangladesh Bank and other regulatory authorities;
iii. All recruitment/promotion/training, except recruitment/promotion/training of DMD, GM Complied
shall be vested upon the Managing Director. He shall act such in accordance with the
approved HR Policy of the Company;
iv. Managing Director may re-schedule job responsibilities of employees; Complied
v. Managing Director may take disciplinary actions against the employees except DMD and Complied
GM;
vi. Managing Director shall sign all the letters/statements relating to compliance of polices Complied
and guidelines. However, Departmental/Unit Heads may sign daily letters/statements as
set out in DFIM circular no. 2 dated 06 January 2009 if so authorized by the Managing
Director

Certificate on
Compliance with Conditions of Corporate Governace Guidelines to
the Shareholders of
We were engaged by Industrial Promotion and Development Company of Bangladesh Limited (the "Company") to provide
certification whether the Company has complied with the conditions of corporate governance guidelines issued by the
Bangladesh Securities and Exchange Commission in its notification number SEC/CMRRCD/2006-158/134/Admin/44
dated 7 August 2012 and SEC/CMRRCD/2006-158/147/Admin/48 dated 21 July 2013 (the "conditions of corporate
governance guidelines") for the year ended 31 December 2013.
The Company's Responsibilities

Those charged with governance and management of the Company are responsible for complying with the conditions of
corporate governance guidelines. Those charged with the governance of the Company are also responsible for stating in the
director's report whether the Company has complied with the conditions of corporate governance guidelines.
Our Responsibilities
Our responsibility is to examine the Company's status of compliance with the conditions of corporate governance guidelines
and to certify thereon in the form of an independent assurance conclusion based on the evidence obtained. For the purpose
of the engagement, we comply with ethical requirements, including independence requirements, and plan and perform our
procedures to obtain assurance whether the Company has complied with the conditions of corporate governance guidelines.
Our conclusion has been formed on the basis of, and is subject to, the matters outlined in this report. We believe that the
evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Conclusion
In our opinion, the Company has complied with the conditions of corporate governance guidelines for the year ended 31
December 2013.
Dhaka, 6 March 2014

Report of the Audit Committee
Role of Audit Committee
The Audit Committee is a sub-committee of the Board and formed by the Board of Directors of the Company. The Audit
Committee assists the Board of Directors in ensuring that the Financial Statements reflect true and fair view of the state of
affairs of the Company and in ensuring a good monitoring system within the business. The Audit Committee makes
recommendations on the reporting, control and compliance aspects of the Directors’ and the Company’s responsibilities,
providing independent monitoring, guidance and challenge to executive management in these areas. Its aim is to ensure that
high standards of corporate reporting, control and compliance are achieved, in the belief that excellence in these areas
enhances the effectiveness, and reduces the risk of the business.
Structure of Audit Committee
Status with Status with

Name Educational Qualification
the committee the Board
Independent M.A. (Economics), University of Dhaka; Master of Economics,
Mr. Md. Nazrul Huda Chairman
Director University of New England, Australia
Master of Soil, Water and Environment, University of Dhaka;
Ms. Afroza Khan Member Director
Master of Public Health, University of North Carolina, USA.
Ms. Ashraf Ali Member Director Master of Political Science, University of Dhaka
Mr. Amin H. Manekia Member Director MBA (Major in Finance & Marketing), Babson College, USA
Mr. Altaf Ramzi Member Director Master in Accounting, University of Karachi
The Company Secretary acts as the secretary to the Audit Committee
Terms of Reference
The Terms of Reference of the Audit Committee clearly defines the roles and responsibility of the Audit Committee. The
Terms of Reference is periodically reviewed and revised with the concurrence of the Board of Directors. The Audit Committee
is responsible to and reports to the Board of Directors. The role and functions of the Committee are further regulated by the
rules governing the Audit Committee as specified by the ‘conditions on Corporate Governance’ issued by the Bangladesh
Securities and Exchange Commission and guidelines on Corporate Governance and Responsibilities of Audit Committee
issued by Bangladesh Bank.
Scope of work of Audit Committee

The Committee is authorized to monitor and review the effectiveness of the Company’s internal audit function in the context
of the Company’s overall risk management system. The Committee performs its activities within the Terms of Reference of
the Committee; seek information from any director or employee of the Company from time to time as it thinks fit. The
Committee presents a summary of its activities to shareholders and other interested parties by means of this report.
Review of Financial Statements by the Audit Committee
Audit Committee reviewed the Annual Financial Statements for the year 2013 and placed its recommendations to the Board
of Directors.
External Auditor
Hoda Vasi Chowdhury & Co, Chartered Accountants, a partnership firm registered in Bangladesh and Independent Correspondent
Firm to Deloitte Touche Tohmatsu, were re-appointed as statutory auditors of the Company at the 31st Annual General Meeting
held on April 25, 2013. As a part of ensuring highest level of corporate governance, the committee prohibits the external
auditors from performing any work that they may subsequently need to audit, or which might otherwise create a conflict of
interest. The Committee has ascertained that the external auditors’ of the Company has not been engaged to any one of the
following material non-audit services:
Appraisal or valuation services or fairness opinions.
Financial information system design and implementation.
Book-Keeping or other services related to the accounting records or Financial Statements.
Broker-dealer services.
Actuarial services; and
Internal Audit services.

The Committee has also ascertained the followings:
None of the partners or employees of the external audit firms possesses any share of IPDC at least during the tenure of their
audit assignment.
The external audit firm is not receiving any fee which is contingent upon such factors like achieving targeted Non Performing
Loan ratio by the Company, loan disbursement target etc.
The Audit Committee evaluated the expertise, resources, independence and objectivity of the external auditors’ and also
reviewed their effectiveness as external auditor before recommending their appointment to the Board.
Major activities of the Audit Committee

The Committee met five times during the year 2013 to carry out the following major activities:
Reviewed and recommended to the Board the Annual Financial Statements for the year ended December 31, 2012.
Reviewed the Management Letter from external auditors for the year 2012 together with management’s responses to the
findings.
Reviewed the Auditor’s Certificate on Corporate Governance compliance under sec 2CC of the Securities and Exchange
Ordinance 1969 for the year ended December 31, 2012.
Approved the Internal Audit Plan for the year 2014.
Reviewed and ascertained that the internal control system including financial and operational controls, accounting
system, and reporting structure are adequate and effective.
Reviewed the periodical inspection reports of the Company conducted and submitted by the Internal Auditors and
recommended necessary instructions to the management for proper and prompt resolution of the
irregularities/objections stated therein.
Reviewed the actions taken by the management for implementation of Audit Committee’s observations on issues
deliberated in Audit Committee Reports.
The Committee placed its reports regularly to the Board of the Company for review and monitoring the activities with
recommendations on internal control system, compliance with rules and regulation of the regulatory bodies.
The Committee reviewed the inspection report for the year ended December 31, 2012 issued by Bangladesh Bank and
management action plan against thereof.
The Committee reviewed first quarter, half-year and third quarter ended financial statements for the year 2013 and
recommended to the Board;
Reviewed issues within the following areas, however, no such instances were identified and reported to the Board of
Directors.
-Report on conflicts of interests.
-Suspected or presumed fraud or irregularity or material defects in the internal control systems.
-Suspected infringement of laws, including securities related laws, rules and regulations.
Based on the above review and discussions, the Audit Committee is of the view that the internal control and compliance
procedures are adequate to present a true and fair view of the activities and financial status of the Company.
Md. Nazrul Huda

Chairman, Audit Committee

DUTIES OF CHIEF EXECUTIVE OFFICER (CEO)
AND
CHIEF FINANCIAL OFFICER (CFO)
In compliance with the condition conferred by the Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated August 7,
2012 issued by Bangladesh Securities and Exchange Commission (BSEC), this is to certify to the Board of the Company that:
(i) We have reviewed financial statements for the year 2013 and that to the best of our knowledge and belief:
a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading;
b) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing
accounting standards and applicable laws.
(ii) There are, to the best of knowledge and belief, no transactions entered into by the Company during the year which
.........are fraudulent, illegal or violation of the Company’s code of conduct.
Dilip Kumar Mandal Mominul Islam

Chief Financial Officer Managing Director & CEO
Date: March 06, 2014

Notes to the Financial Statements
as at and for the year ended 31 December 2013
2.3 Disclosure of deviations from the requirements of
1. Reporting entity
BAS/BFRS due to mandatory compliance with
1.1 Company profile Bangladesh Bank's guidelines
With a mandate to promote economic growth in the country, Bangladesh Bank, the Central Bank of Bangladesh, is the
Industrial Promotion and Development Company of prime regulatory body for Non-Bank Financial Institutions
Bangladesh Limited ("IPDC" or the "Company") was (NBFI) in Bangladesh. Some requirements of Bangladesh
incorporated in Bangladesh in 1981 as the premier private Bank's rules and regulations differ from those of BAS/BFRS
sector long term lending institution with the Registrar of regarding presentation of financial statements and
Joint Stock Companies and Firms, Dhaka. The Company provisioning requirement of loan, leases, advances and
also registered itself as a financial institution under the investments. As such the Company has departed from those
Financial Institutions Act 1993 on 07 February 1995. The contradictory requirements of BAS/BFRS in order to comply
registered office of the Company is situated at Hosna Center with the rules and regulations of Bangladesh Bank which are
(4th Floor), 106 Gulshan Avenue, Dhaka, Bangladesh. The disclosed below along with financial impact where
Company was went for public issue of its shares in 2006 and applicable.
its shares are listed with the stock exchanges of Bangladesh.
The Company has four branch offices located at Dhaka, 2.3.1 As per FID circular No. 08 dated 03 August 2002
Chittagong and Sylhet. investments in quoted shares and unquoted shares are
revalued at the year end at market price and as per book
1.2 Nature of business of the Company value of last audited balance sheet respectively. However, as
IPDC specializes in providing long term & short term per requirements of BAS 39: Financial Instruments:
financing, project financing, lease financing, equity Recognition and Measurement, investment in shares falls
financing, syndication finance, work order finance, mortgage either under “at fair value through profit and loss account” or
finance, channel finance, SME & medium market enterprise under “available for sale” where any change in the fair value
finance, asset backed securitization through issuance of at the year-end is taken to profit and loss account or other
zero-coupon bond and related consultancies to both local and comprehensive income respectively.
foreign private investments in Bangladesh.
2.3.2 As per FID circular No. 08 dated 03 August 2002 and
2. Basis of preparation FID circular No. 03 dated 03 May 2006 issued by
Bangladesh Bank, a general provision is required to be
2.1 Statement of compliance maintained at 1% on standard loans/leases and 5% on
The financial statements have been prepared on a going loan/leases classified under category of Special Mention
concern basis following accrual basis of accounting except Account (SMA). At the year end the Company has
cash flow statement in accordance with the Companies Act recognized an accumulated general provision of Tk. 99.08
1994, the Financial Institutions Act 1993, Securities and million shown in note number 14.1 of the financial
Exchange Rules 1987, the Listing Rules of Dhaka and statements.
Chittagong Stock Exchanges, International Accounting
Standards (IAS) and International Financial Reporting 2.3.3 Bangladesh Bank has issued templates for financial
Standards (IFRS) as adopted in Bangladesh by the Institute statements which will strictly be followed by all NBFIs. The
of Chartered Accountants of Bangladesh as Bangladesh templates of financial statements issued by Bangladesh Bank
Accounting Standards (BAS) and Bangladesh Financial do not include Other Comprehensive Income (OCI) nor the
Reporting Standards (BFRS), except in the circumstances elements of Other Comprehensive Income allowed to include
in a Single Comprehensive Income Statement. As such the
where local regulations differ, and with other applicable laws
and regulations. Company does not prepare the other comprehensive income
statement. However the Company does not have any
The presentation of the financial statements has been made elements of OCI to be presented.
as per the requirements of DFIM Circular No: 11 dated 23
December 2009 issued by the Department of Financial 2.3.4 As per Bangladesh Bank guidelines financial
Institutions and Markets (DFIM) of Bangladesh Bank. instruments are categorized, recognized and measured
differently from those prescribed in BAS 39: Financial
2.2 Basis of measurement Instruments: Recognition and Measurement. As such some
disclosures and presentation requirements of BFRS 7:
The financial statements have been prepared on historical Financial Instruments: Disclosures and BAS 32: Financial
cost basis except for certain assets which are stated at Instruments: Presentation have not been made in the
revalued amount. financial statements.

2.4 Date of authorization 2.8 Materiality and aggregation
Each material item considered by management as significant
The Board of Directors has authorized these financial
has been presented separately in the financial statements. No
statements for public issue on 16 March 2014.
amount has been set off unless the Company has a legal right
to set off the amounts and intends to settle on net basis.
2.5 Functional and presentation currency and level of
Income and expenses are presented on a net basis only when
precision
permitted by the relevant accounting standards.
The financial statements are presented in Bangladesh Taka
(BDT/Taka/Tk.) currency, which is the Company's functional 2.9 Directors’ responsibility statement
currency. All financial information presented in BDT has
The Board of Directors is responsible for the preparation and
been rounded off to the nearest integer.
presentation of the financial statements under section 183 of
the Companies Act, 1994 and as per the provision of 'The
2.6 Use of estimates and judgments
Framework for the Preparation and Presentation of Financial
The preparation of these financial statements in conformity Statements'.
with Bangladesh Financial Reporting Standards (BFRS)
requires management to make judgments, estimates and 2.10 Branch accounting
assumptions that affect the application of accounting policies
The Company has four branches, with no overseas branch as
and the reported amounts of assets, liabilities, income and
at 31 December 2013. Accounts of the branches are
expenses. It also requires disclosure of contingent assets and
maintained at the head office from which these financial
liabilities at the date of financial statements.
statements have been drawn up.
Estimates and underlying assumptions are based on
2.11 Reporting period
historical experience and various factors that are believed to
be reasonable under the prevailing circumstances, the result The financial period of the Company has been determined
of which form the basis of making the judgment about the from 1 January to 31 December each year which is followed
carrying amount of assets and liabilities which are not consistently.
readily available from other sources. Actual results may vary
from those estimates. However, the estimates and underlying 2.12 Consistency
assumptions are reviewed on an ongoing basis. Revisions to
In accordance with the BFRS framework for the presentation
accounting estimates are recognized in the period in which
of the financial statements together with Bangladesh
the estimates are revised and in any future periods affected.
Accounting Standard (BAS) 1: Presentation of Financial
Statements and Bangladesh Accounting Standard (BAS) 8:
Information about significant areas of estimation, uncertainty
Accounting Policies, Changes in Accounting Estimates and
and critical judgments in applying accounting policies that
Errors, the Company applies the disclosure principles
have the most significant effect on the amounts recognized
consistently from one year to the next. Where selecting and
in the financial statements is included in the following notes:
applying new accounting policies, changes in accounting
policies applied, correction of errors, the amounts involved
a) Note -10.1.2 Deferred tax assets are accounted for and disclosed in accordance with the
b) Note -14.9 Deferred tax liabilities requirement of BAS 8. The Company has applied the same
accounting and valuation principles in 2013 as in financial
c) Note -14.1 Cumulative provision for loans, leases and
statements for 2012.
investments
d) Note -14.3 Measurement of defined benefit obligation 3. Significant accounting policies
(provision for gratuity)
e) Note -14.4 Provision for corporate tax The accounting policies set out below have been applied
consistently (otherwise as stated) to all periods presented in
f) Note -14.8 Provision for expenses these financial statements.
g) Note -20 Contingent liabilities (Letters of guarantee)
3.1 Accounting for leases
2.7 Going concern As per Bangladesh Accounting Standard (BAS) 17: Leases,
the transactions for leasing operation have been recorded
The Company has adequate resources to continue its
under finance lease method of accounting since all the risks
operation for foreseeable future. For this reason, the directors
and rewards associated with ownership of the assets leased
continue to adopt going concern basis in preparing the
to lessee under agreements are transferred substantially other
financial statements. The current credit facilities and
than the legal title and all leases are full payout leases.
resources of the Company provide sufficient funds to meet
the present requirements of its existing businesses and As per this standard, the aggregate lease receivables
operations. including un-guaranteed residual value throughout the
primary lease term are recorded as gross lease receivables

while the excess of gross lease receivables over the total 3.3.2.1 Held to maturity
acquisition costs including interest during the period of
Investments classified as 'Held to Maturity (HTM)' are
acquiring the lease asset, constitutes the unearned lease
non-derivative financial assets with fixed or determinable
income. Initial direct costs, if any, in respect of lease are
payments and fixed maturities, and are intended to be held to
charged in the year in which such costs are incurred.
maturity that the Company has the intention and ability to
hold those securities to maturity. When the Company is
The unearned lease income is usually amortized to revenue
willing to sell other than an insignificant amount of such
on a monthly basis over the lease term yielding a constant
assets, the entire category would be classified as held for
rate of return over the period. Unrealized income is
sale.
suspended where necessary in compliance with the
requirement of relevant circulars issued by Bangladesh
3.3.2.2 Held for trading
Bank.
Investments classified in this category are acquired
3.2 Accounting for direct finance principally for the purpose of selling or repurchasing in short
term trading or if designated as such by the management.
Direct finance operation consists of short-term finance and
After initial recognition, investments are measured at fair
long-term finance and its books of accounts are maintained
value and any changes in fair value is recognized in the profit
based on accrual method of accounting. Outstanding loans,
and loss account for the period in which it arises.
along with the accrued interest thereon, for short-term
finance, and unrealized principal for long-term finance, auto
3.4 Revenue recognition
loan, home loan and other finances are accounted for as
direct finance assets of the Company. Interest earnings are 3.4.1 General
recognized as operational revenue periodically. As per Bangladesh Accounting Standard (BAS) 18: Revenue,
revenue is recognized when it is probable that the economic
3.3 Accounting for investment benefits associated with the transaction will flow to the
Investment comprises of investment in equity, investment in Company and the amount of revenue and the cost incurred or
corporate bond and government securities. Investment in to be incurred in respect of the transaction can be measured
equity is classified broadly in three categories and reliably.
investment in government securities classified into held for
trading and held to maturity which are accounted for as 3.4.2 Lease income
under: The excess of aggregate rentals receivable over the cost of
the leased asset constitutes the total unearned lease income.
3.3.1 Investment in equity The unearned lease income is recognized as revenue on
3.3.1.1 Unlisted shares accrual basis over the terms of the lease. However, lease
Equity finance operation consists of equity participation in income against classified and Special Mention Account
the form of unlisted ordinary shares which are initially (SMA) is not recognized as income rather reversed from
recognized at cost. Adequate provision is maintained, if interest income and transferred to interest suspense account
required, for diminution in value of shares as per the latest as per Bangladesh Bank directives.
available audited financial statements as on the closing of the
year on an individual investment basis.
3.4.3 Dividend income
3.3.1.2 Listed shares 3.4.3.1 Listed and unlisted shares
Investments in marketable ordinary shares held for trading or Dividend income against listed and unlisted equity
held for dividend income are reported at cost and adequate investment is recognized when the shareholders' legal right to
provision is maintained, if required, for diminution in market receive payments has been established i.e. during the period
value of the shares. Unrealized gains are not recognized in in which dividend is declared in the Annual General Meeting.
the profit and loss account.
3.4.3.2 Preference shares
3.3.1.3 Preference shares Dividend income on cumulative preference shares is
Investment in cumulative preference shares has been recognized on accrual basis.
reported at cost and dividend income is recognized in the
profit and loss account on accrual basis and considered as 3.4.3.3 Gain on sale of shares
operational income.
Capital gain on sale of shares listed in the stock exchanges is
3.3.2 Investment in Government securities recognized only when such gain is realized through the
shares selling in the market.
Investment in securities are initially recognized at cost, being
fair value of the consideration given, including acquisition 3.4.4 Interest on term finance and short term finance
charges, if any, associated with the investment. The
investment is classified either as 'Held for Trading (HFT)' or Interest on term finance and short term finance is recognized
'Held to Maturity HTM)'.

as revenue on accrual basis. However, interest income on 3.6.3.1 Change in accounting estimate
Special Mention Account (SMA) and classified finance is
not recognized as income rather reversed from interest The Company has changed the useful life of reconditioned
income and transferred to interest suspense account as per vehicles from three years to five years in the year 2013 and
Bangladesh Bank directives. financial impact of such change has been applied
prospectively.
3.4.5 Interest on secured lending
Interest on secured lending is recognized as revenue on 3.6.4 Impairment
accrual basis.
The carrying amount of the entity's non financial assets,
other than deferred tax assets, are reviewed at each reporting
3.4.6 Fees based revenue
date to determine whether there is any indication of
Fees based revenue is recognized as income on cash basis. impairment. If any such indication exists, the asset's
recoverable amount is estimated. However, no such
3.5 Interest suspense
conditions that might be suggestive of a heightened risk of
Lease income and interest income on term finance, short impairment existed at the reporting date.
term finance, auto loan etc. under category of classified and
Special Mention Account (SMA) are not recognized as 3.6.5 Disposal of property, plant and equipment
revenue but credited to interest suspense account.
3.6 Property, plant and equipment On disposal of item of property, plant and equipment, gain or
loss on such disposal is reflected in the profit and loss
3.6.1 Own assets account.
Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment 3.6.6 Non-current assets held for sale
losses, if any . The cost of an asset comprises its purchase
price and any directly attributable costs of bringing the assets Non-current assets that are expected to be recovered
to its working condition for its intended use inclusive of primarily through sale rather than through continuing use are
inward freight, duties and non-refundable taxes as per classified as held for sale. Such assets are measured at the
Bangladesh Accounting Standard (BAS) 16: Property, Plant lower of their carrying amount and fair value less cost to sell,
and Equipment. as per Bangladesh Financial Reporting Standard (BFRS) 5:
Non-current Assets Held for Sale and Discontinued
3.6.2 Subsequent expenditure on property, plant and Operations.
equipments
Subsequent expenditure is capitalized only when it increases 3.7 Intangible asset
the future economic benefit from the assets. All other
expenditures are recognized as expense as and when they are The intangible assets comprise the value of accounting
incurred. software licensed for the Company, other than software
applied to the operating systems of computers. An intangible
3.6.3 Depreciation on property, plant and equipment asset is recognized if it is probable that future economic
benefits that are attributable to the asset will flow to the
Depreciation is provided to allocate the cost of the assets Company over a period of time and the cost of the asset can
after commissioning, over the period of their expected useful be measured reliably as per Bangladesh Accounting Standard
life, in accordance with the provisions of Bangladesh (BAS) 38: Intangible Assets. Intangible assets acquired
Accounting Standard (BAS) 16: Property, Plant and separately are recorded on initial recognition at costs and are
Equipment. Full month's depreciation is charged on additions carried at cost less accumulated amortization and
irrespective of date when the related assets are put into use accumulated impairment losses, if any.
and no depreciation is charged on the month of disposal.
Depreciation is calculated on the cost of assets in order to 3.7.1 Subsequent expenditure on intangible asset
allocate such cost over the estimated useful life of such asset.
Depreciation has been provided at the following rates on Subsequent expenditure on intangible asset are capitalized
straight line basis: only when it increases the future economic benefit from the
assets. All other expenditure are recognized as expense as
2013 2012 and when they are incurred.
Useful life Useful life
(years) (years) 3.7.2 Amortization of intangible asset
Office premises 20 20
Intangible assets are amortized on straight line basis to the
Motor Vehicles: 5 3-5
profit and loss account from the date when the asset is
Furniture and fixtures 8 8 available for use. Intangible asset i.e. acquisition cost of the
Equipments and appliances 5 5 accounting software is amortized within two years of
Depreciation methods, useful lives and residual values are acquisition.
reviewed at each reporting date.

3.8 Borrowing costs pending and (iii) full provision has been maintained. The
item’s potential return is thus canceled and removed
All borrowing costs are recognized as expense in the period
(“written off”) from the Company’s balance sheet. However,
in which they are incurred in accordance with the
these write off will not undermine or affect the claim amount
Bangladesh Accounting Standard (BAS) 23: Borrowing
against the borrower. Recovery against the written off is
Costs.
credited to other operational income. Income is recognized
where amounts are either recovered and/or adjusted against
3.9 Foreign currency translation
securities/properties or advances there-against or are
Transactions in foreign currencies are translated to BDT at considered recoverable. Detailed memorandum records for
the exchange rates ruling at the date of the transactions. such write off accounts are meticulously maintained and
Monetary assets and liabilities denominated in foreign followed up.
currencies are translated at rates of exchange ruling at the
end of the year. Resulting exchange differences are 3.13 Employee benefits
recognized in the profit and loss account.
3.13.1 Defined contribution plan
3.10 Income tax
The Company operates a contributory provident fund scheme
Income tax comprises current and deferred tax. for its permanent employees. Provident Fund is administered
by a Board of Trustees and is funded by contributions equally
3.10.1 Current tax from the permanent employees and from the Company @
Provision for current tax is made on the basis of the profit of 10% of basic salary of the employees. The contributions are
the year as adjusted for taxation purposes in accordance with invested to ensure optimum return to the employees.
the provisions of Income Tax Ordinance 1984 and
amendments made thereto from time to time. The Company's 3.13.2 Defined benefit plan
current tax liability is calculated using tax rate that is The Company operates an unfunded gratuity scheme for its
applicable on the reporting date, and any adjustments to tax permanent employees. Employees are entitled to gratuity
payable in respect of previous year(s). Currently tax rate benefit after completion of minimum five years continuous
applicable to the Company is 42.50%. service with the Company from the date of joining. The
gratuity is calculated on the last basic pay and is payable at
3.10.2 Deferred tax the rate of one month's basic pay for every completed year of
service. The Company has provided for the same in the
The Company accounts for deferred tax as per Bangladesh
financial statements accordingly.
Accounting Standard (BAS) 12: Income Taxes. Deferred tax
is provided using the balance sheet method for all temporary
3.13.3 Short-term benefit
differences arising between the tax base of assets and
liabilities and their carrying value for financial reporting Short-term employee benefit (salary, bonus etc.) obligations
purposes. Tax rate prevailing at the balance sheet date is used are measured on an undiscounted basis and are expensed as
to determine the deferred tax. the related service is provided.
3.11 Provision for doubtful loans, leases and investments 3.13.4 Other employee benefit obligation
Provision for loans, leases and investments is an estimate of The Company operates a group life insurance and
the losses that may be sustained in the investment portfolio. hospitalization insurance schemes for its permanent
employees.
The provision is based on two principles (1) Bangladesh
Accounting Standard (BAS) 37: Provision, contingent
liabilities and contingent assets and (2) Bangladesh Bank 3.14 Interest expense on term deposits
Guidelines. The methodology for measuring the appropriate Interest expenses on term deposits from customers are
level of the provision relies on several key elements, which recognized on accrual basis.
include both quantitative and qualitative factors as set forth
in the Bangladesh Bank's FID circular no. 08 dated 03 3.15 Accrued expenses, provisions and payables
August 2002 and FID circular no. 03 dated 03 May 2006 as
the bases for calculating the provision for investment and Liabilities are recognized for goods and services received,
advances. whether paid or not, for those goods and services. However,
payables are not interest bearing and which are stated at their
3.12 Write off actual value.
Provisions and accrued expenses are recognized in the
In compliance with Bangladesh Bank's FID Circular no. 03
financial statements when the Company has a legal or
dated 15 March 2007 and DFIM circular number 11 dated 21
constructive obligation as a result of past event and it is
November 2013, loans, leases, advances and investment are
probable that an outflow of economic benefit will be required
written off to the extent that (i) there is no realistic
to settle the obligation and a reliable estimate can be made of
probability of recovery, (ii) against which legal cases are
the amount of the obligation.

3.16 Cash and cash equivalents 4.5 Borrowings from other banks, financial institutions
and agents
Cash and cash equivalents comprises cash in hand, cash at
bank and term deposits that are readily convertible to a
Borrowings include short term and long term borrowings
known amount of cash and that are subject to an insignificant
from banks and non-bank financial institutions. These are
risk of change in value.
stated at amounts outstanding on the reporting date. Interest
expense on these borrowings is charged to the profit and loss
3.17 Cash flow statement
account on accrual basis.
Cash flow statement has been prepared in accordance with
the Bangladesh Accounting Standard (BAS) 7: Statement of 4.6 Dividend payments
Cash Flows under direct method as recommended in the
Proposed dividends are not recognized as a liability in the
DFIM Circular No. 11 dated 23 December 2009 issued by
balance sheet in accordance with Bangladesh Accounting
the Department of Financial Institutions and Markets
Standard (BAS) 10: Events After the Reporting Period.
(DFIM) of Bangladesh Bank.
3.18 Earnings per share 4.7 Risk management
The Company calculates earnings per share in accordance Risk is defined as uncertainties resulting in adverse variation
with Bangladesh Accounting Standard (BAS) 33: Earnings of profitability or in losses, financial or otherwise. The risk
Per Share. The company presents basic Earnings Per Share management of the Company covers core risk areas of credit
(EPS) for its ordinary shares. Basic EPS is calculated by risk, liquidity risk, market risk that includes foreign exchange
dividing the profit or loss attributable to ordinary risk, interest rate risk, equity risk, operational risk and
shareholders of the company by the weighted average reputation risk. The objective of the risk management is that
number of ordinary shares outstanding during the year. the Company evaluates and takes well calculative business
Diluted Earnings Per Share (DEPS) is determined by risks and thereby safeguarding the Company's capital, its
adjusting the profit or loss attributable to ordinary financial resources and profitability from various risks.
shareholders and the weighted average number of ordinary
shares outstanding for the effects of all dilutive potential 4.7.1 Credit risk
ordinary shares, if any.
Credit risk is defined as the potential loss arising from the
failure of a counter party to perform as per contractual
4. General
agreement with the Company. The Company has separate
4.1 Related party disclosure Credit Risk Management Department and Credit
Administration to carry out risk assessment in lending to a
As per Bangladesh Accounting Standards (BAS) 24: Related
customer, sanctioning credit and maintaining asset quality.
Party Disclosures, parties are considered to be related if one
of the parties has the ability to control the other party or
4.7.2 Operational risk
exercise significant influence over the other party in making
financial and operating decisions. The Company carried out Operational risk addresses the risk associated with fraud,
transactions in the ordinary course of business on an arm’s forgery, unauthorized activities, error, omission, system
length basis at commercial rates with related parties. failure and external events among others. The Company is
managing these risk through written procedures, regular
4.2 Litigation training, awareness programs and monitoring of the
The Company is not a party to any material law suits except implementation of these procedures.
those arising in the normal course of business. The Company
has filed necessary law suits against some of the default 4.7.3 Interest rate risk
clients for non-performance in loan/lease repayment. The Interest rate risk may arise from trading portfolio and
Company, however, has made adequate provision against non-trading portfolio. The trading portfolio of the Company
such doubtful finances. consists of government treasury bills, bond, etc. Interest rate
risk of non-trading business arises from mismatches between
4.3 Guarantees, commitments and contingencies the future yield of an asset and its funding cost. Asset
Corporate guarantee represents irrevocable assurance that the Liability Committee (ALCO) of the Company monitors the
company will make payments in the event that a client would interest rate movement on a regular basis.
fails to pay its obligation to third parties.
4.7.4 Liquidity risk
4.4 Statutory reserve
The objective of liquidity risk management is to ensure that
As per Financial Institutions Regulations 1994, Non-Bank all foreseeable funding commitments and deposit
Financial Institutions (NBFIs) are required to transfer 20% of withdrawals can be met when due. To this end, the
its post tax profit to statutory reserve before declaration of Company is maintaining a diversified and stable funding
dividend. In compliance with this requirement the Company base comprising of core retail and corporate deposits and
has transferred BDT 28.40 million to statutory reserve in 2013. institutional balance. The liquidity management is

monitored by Asset Liability Committee (ALCO) on a
regular basis. e) Other assets are on the basis of their
realization/amortization.
4.8 Event after the reporting period f) Borrowings from other banks and financial
All material events occurring after the reporting period has institutions as per their maturity/repayment term.
been considered and where necessary, adjusted for or g) Deposits and other accounts are on the basis of their
adequately disclosed in the note no. 47 of the financial maturity period and past trend of withdrawal by the
statements. depositors.
4.9 Comparatives and reclassification h) Other long term liability on the basis of their
maturity term.
Comparative information has been disclosed in respect of the
year ended 31 December 2013 for all numerical data in the i) Provisions and other liabilities are on the basis of
financial statements and also the narrative and descriptive their payment/adjustments schedule.
information when it is relevant for better understanding of
the current year’s financial statements. Figures of the year
2012 have been restated/rearranged/reclassified whenever
considered necessary to ensure comparability with the 4.12 Integral Components of Financial Statements
current year's figure.
The financial statements of the Company include the
following components:
4.10 Contingent liabilities
Any possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence 1) Balance Sheet as at 31 December 2013.
or non-occurrence of one or more uncertain future events not 2) Profit and Loss Account for the year ended 31
wholly within the control of the Company or any present December 2013.
obligation that arises from past events but is not recognized
because: 3) Cash Flow Statement for the year ended 31
December 2013.
a) it is not probable that an outflow of resources 4) Statement of Changes in Equity for the year ended
embodying economic benefits will be required to 31 December 2013.
settle the obligation; or
5) Notes to the Financial Statements as at and for the
b) the amount of the obligation cannot be measured year ended 31 December 2013.
with sufficient reliability.
Contingent liabilities are not recognized but disclosed in the

financial statements unless the possibility of an outflow of
resources embodying economic benefits can be reliably
estimated.
4.11 Liquidity statement

The Liquidity Statement of assets and liabilities as on the
reporting date has been prepared on residual maturity term in
accordance with DFIM Circular no. 06 dated 26 July 2011 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/maturity schedule.
d) Fixed assets are on the basis of their useful lives.

4.13 Compliance Report on Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards
(BFRS):
The following Accounting and Reporting Standards are applicable for the Company and which are followed consistently in
preparing the Financial Statements:
Sl. Name of the BAS BAS no. Status

01 Presentation of Financial Statements 01 Complied*
02 Inventories 02 N/A
03 Statement of Cash Flows 07 Complied
04 Accounting Policies, Changes in Accounting Estimates and Errors 08 Complied
05 Events after the Reporting Period 10 Complied
06 Construction Contract 11 N/A
07 Income Taxes 12 Complied
08 Property, Plant and Equipment 16 Complied
09 Leases 17 Complied
10 Revenue 18 Complied
11 Employee Benefits 19 Complied
12 Accounting for Government Grants and Disclosure of Government Assistance 20 N/A
13 The Effects of Changes in Foreign Exchange Rates 21 Complied
14 Borrowing Costs 23 Complied
15 Related Party Disclosures 24 Complied
16 Accounting and Reporting by Retirement Benefits Plans 26 N/A
17 Consolidated and Separate Financial Statements 27 N/A
18 Investments in Associates 28 N/A
19 Interest in Joint Ventures 31 N/A
20 Financial Instruments: Presentation 32 Complied
21 Earnings per Share 33 Complied
22 Interim Financial Reporting 34 Complied
23 Impairment of Assets 36 Complied
24 Provision, Contingent Liabilities and Contingent Assets 37 Complied
25 Intangible Assets 38 Complied
26 Financial Instruments: Recognition and Measurement 39 Complied*
27 Investment Property 40 N/A
28 Agriculture 41 N/A
Sl. Name of the BFRS BFRS no. Status

01 First Time Adoption of IFRS 01 N/A
02 Share-based Payment 02 N/A
03 Business Combination 03 N/A
04 Insurance Contracts 04 N/A
05 Non-current Assets Held for Sale and Discontinued Operations 05 Complied
06 Exploration for and Evaluation of Mineral Resources 06 N/A
07 Financial Instruments: Disclosures 07 Complied*
08 Operating Segment 08 Complied
* As the regulatory requirements differ with the standards, relevant disclosures are adequately made in accordance with
Bangladesh Bank’s directives.

Figures in Taka
As at 31 December Note 2013 2012

5. Cash
Cash in hand 5.1 50,542 68,533
Balance with Bangladesh Bank and its agent bank(s) 5.2 154,996,460 94,246,168
(including foreign currencies)
155,047,002 94,314,701
5.1 Cash in hand
In local currency 50,542 68,533
In foreign currency - -
50,542 68,533
5.2 Balance with Bangladesh Bank and its agent bank(s)
(including foreign currencies)
Bangladesh Bank
Local currency 154,996,460 94,246,168
Foreign currencies - -
154,996,460 94,246,168
Sonali Bank Limited (as an agent of Bangladesh Bank) - -
154,996,460 94,246,168
5.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR)
Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR) have been calculated and maintained in
accordance with Section 19 of the Financial Institutions Act 1993, Financial Institution Regulations 1994 and FID Circular
No. 06 dated 06 November 2003 and FID Circular No. 02 dated 10 November 2004 issued by Bangladesh Bank.
Cash Reserve Requirement (CRR) has been calculated at the rate of 2.50% on total term deposits excluding deposits from
banks and financial institutions and maintained with Bangladesh Bank in the form of current account.
Statutory Liquidity Reserve (SLR) has been calculated at the rate of 5.00% including CRR of 2.50% on total liabilities
(excluding deposits from banks and financial institutions and shareholders' equity). SLR is maintained in the form of
treasury bonds, balance with Bangladesh Bank and other banks and financial institutions.
Both the reserves as maintained by the Company are shown below:
Cash Reserve Requirement (CRR)

Required reserve 109,885,494 98,550,681
Actual reserve maintained 110,746,528 99,704,056
Surplus/(deficit) 861,034 1,153,375
Statutory Liquidity Reserve (SLR)

Required reserve 245,641,903 219,276,888
Actual reserve maintained 310,002,793 220,907,322
Surplus 64,360,890 1,630,434
Total surplus 65,221,924 2,783,809
6. Balance with other banks and financial institutions

In Bangladesh 6.1 546,533,211 433,650,776
Outside Bangladesh - -
546,533,211 433,650,776

Figures in Taka
As at 31 December 2013 2012

6.1 In Bangladesh
With other banks
Current deposit accounts
Commercial Bank of Ceylon PLC 43,250 44,520
The Hongkong and Shanghai Banking Corporation Ltd. 1,026 1,146
Uttara Bank Ltd. 2,583 2,583
United Commercial Bank Ltd. 34,027 16,255
AB Bank Ltd. 18,950 3,240
Standard Chartered Bank 180,742 406,977
Prime Bank Ltd. - 12,492,740
Bank Alfalah Ltd. 1,451 1,451
282,029 12,968,911
Short term deposit accounts
Dutch Bangla Bank Ltd. 278,727 54,868,548
Prime Bank Ltd. 301,108 37,341,034
AB Bank Ltd. 1,568,943 1,418,218
Standard Chartered Bank 179,857 6,142
Mercantile Bank Ltd. 42,189 -
Al-Arafah Islami Bank Ltd. 5,299 6,209
BRAC Bank Ltd. 565,832 714,820
2,941,955 94,354,971
Short term placement
National Bank of Pakistan - 150,000,000
- 150,000,000
Short term deposit accounts (in foreign currency)
AB Bank Ltd. 62,403 62,403
62,403 62,403
Fixed deposit accounts
Mercantile Bank Ltd. 52,700,001 50,000,000
National Bank Ltd. 15,678,816 13,877,500
Prime Bank Ltd. 122,168,007 62,386,991
Dhaka Bank Ltd. 102,700,000 -
AB Bank Ltd. 50,000,000 -
United Commercial Bank Ltd. 50,000,000 -
EXIM Bank Ltd. 50,000,000 -
ONE Bank Ltd. 50,000,000 -
Trust Bank Ltd. 50,000,000 -
543,246,824 126,264,491
546,533,211 383,650,776
With financial institutions
Short term placement
International Leasing and Financial Services Ltd. - 50,000,000
546,533,211 433,650,776
6.2 Disclosures in compliance with Bangladesh Bank's FID Circular no. 06 dated 06 November 2003 are as follows:
Maturity grouping of balance with other banks and financial institutions
Repayable
On demand 282,028 12,968,911
Within one month 18,683,173 308,294,875
Within one to three months 372,055,507 112,386,990
Within three to twelve months 155,512,503 -
Within one to five years - -
More than five years - -
546,533,211 433,650,776

Figures in Taka

7. Investments
Government securities 7.2 415,000,000 165,000,000
Other investments 7.3 505,970,869 499,278,558
920,970,869 664,278,558
7.1 Classification of investments
Held for trading (HFT) 204,100,000 -
Held to maturity (HTM) 210,900,000 165,000,000
415,000,000 165,000,000
Other investments 505,970,869 499,278,558
920,970,869 664,278,558
7.2 Government securities
15-year treasury bonds 242,600,000 242,600,000
20-year treasury bonds 172,400,000 172,400,000
415,000,000 415,000,000
Less: Special repo borrowing from Bangladesh Bank - 250,000,000
415,000,000 165,000,000
7.3 Other investments
In ordinary shares - Listed 7,000,000 7,007,689
In ordinary shares - Unlisted 11,670,869 31,670,869
18,670,869 38,678,558
In cumulative redeemable preference shares 337,300,000 310,600,000
Investment in shares 355,970,869 349,278,558
In corporate bonds 150,000,000 150,000,000
505,970,869 499,278,558
Details of other investments are as follows:
2013 2012
Cost Market value Cost Market value
In ordinary shares - listed
Olympic Industries Ltd. - - 2,025 2,025
Bemco Electric Metre Ltd. 7,000,000 4,305,000 7,000,000 4,305,000
RAK Ceramics (Bangladesh) Ltd. - - 5,664 6,702
7,000,000 4,305,000 7,007,689 4,313,727
In ordinary shares - unlisted
Quality Feeds Ltd. 1,500,000 1,500,000 1,500,000 1,500,000
Alliance Bags Ltd. 3,000,000 3,000,000 3,000,000 3,000,000
Ekushey Television Ltd. 7,170,869 7,170,869 7,170,869 7,170,869
Gonophone Bangladesh Ltd. - - 20,000,000 20,000,000
11,670,869 11,670,869 31,670,869 31,670,869
In cumulative preference shares
Premium Seed Ltd. 4,000,000 4,000,000 4,000,000 4,000,000
Delta Brac Housing Finance Corp. Ltd. 100,000,000 100,000,000 100,000,000 100,000,000
ACI Godrej Agrovet Private Ltd. 33,300,000 33,300,000 66,600,000 66,600,000
Confidence Salt Ltd. 20,000,000 20,000,000 30,000,000 30,000,000
Summit Uttaranchol Power Company Ltd. 40,000,000 40,000,000 55,000,000 55,000,000
Summit Purbanchol Power Company Ltd. 40,000,000 40,000,000 55,000,000 55,000,000
ACI Godrej Agrovet Private Ltd. 100,000,000 100,000,000 - -
337,300,000 337,300,000 310,600,000 310,600,000
In corporate bonds
Mutual Trust Bank Ltd. 150,000,000 150,000,000 150,000,000 150,000,000
505,970,869 503,275,869 499,278,558 496,584,596
Unquoted shares are primarily recognized at cost. Adequate provision has been maintained against the unquoted shares
whose book value is lower than the cost.

Figures in Taka
7.4 Maturity grouping of investments

On demand - -
Repayable within one month - 10,000,000
Within one to three months - -
Within three to twelve months 216,633,333 73,300,000
Within one to five years 266,666,667 373,300,000
More than five years 437,670,869 207,678,558
920,970,869 664,278,558
8. Loans, advances and leases
Long term loan 3,233,775,052 3,296,153,533
Lease finance 8.1 1,741,016,638 1,618,199,053
Short term loan 239,746,912 316,539,819
Channel finance 163,595,841 88,120,017
Mortgage finance 48,652,699 32,951,684
Auto loan 187,788,787 106,028,436
Secured retail loan 108,657,099 109,893,163
Staff personal loan 22,277,715 17,758,305
5,745,510,743 5,585,644,010
All loans, leases and advances are within Bangladesh.
8.1 Lease finance
Gross lease receivables 2,152,084,013 1,948,130,259
Less: Unearned interest income 475,071,242 449,139,080
Net lease receivables 1,677,012,771 1,498,991,179
Add: Overdue lease rentals 60,803,867 116,007,874
Add: Advance against lease finance 3,200,000 3,200,000
1,741,016,638 1,618,199,053
8.2 a) Net loans, advances and lease receivables including bills
purchased and discounted
Total loans, advances and lease receivables 5,745,510,743 5,585,644,010
Less: Provision for loans leases (specific and general) 14.1 153,895,802 190,472,191
Less: Cumulative balance of interest suspense account 14.2 50,147,364 126,814,695
5,541,467,577 5,268,357,124
b) Rate of net classified loans, leases and advances
Gross loans, advances and leases 5,745,510,743 5,585,644,010
Classified loans, advances and leases 342,072,882 539,363,199
Unclassified loan, advances and leases 5,403,437,861 5,046,280,811
Total provision 153,895,802 190,472,191
Interest suspense and cash collateral 52,232,364 126,814,695
Total provision, interest suspense and cash collateral 206,128,166 317,286,886
Net classified loans, advances and leases 135,944,716 222,076,313
Rate of gross classified loans, advances and leases 5.95% 9.66%
Rate of net classified loans, advances and leases 2.37% 3.98%

Figures in Taka
8.3 Residual maturity grouping of loans, advances and lease receivables

including bills purchased and discounted
On demand - -
Upto one month 201,970,047 177,881,134
More than one month but less than three months 487,394,341 452,280,140
More than three months but less one year 2,277,635,891 1,569,903,920
More than one year but less than five years 2,351,443,375 2,754,487,705
More than five years 427,067,089 631,091,111
5,745,510,743 5,585,644,010
8.4 Loans, advances and lease receivables including bills purchased
and discounted are classified into the following broad categories
Loans, leases and advances 5,745,510,743 5,585,644,010
Cash credit - -
Secured overdraft - -
5,745,510,743 5,585,644,010
Bills purchased and discounted - -
5,745,510,743 5,585,644,010
8.5 Loans, advances and lease receivables including bills purchased
and discounted on the basis of significant concentration
Loans, leases and advances to the allied concerns of the directors - -
Advances to chief executive and other senior executives
Managing Director & CEO 11,663,111 11,112,492
Senior Executives (Senior Manager & above) 3,911,199 3,221,072
Other staffs 6,703,404 3,424,741
22,277,714 17,758,305
8.5.1 Advances to customers' group
Agricultural loan 549,096,157 419,147,540
Large corporate 3,909,462,069 4,145,879,644
Small and medium enterprise 857,319,146 689,528,330
Retail loan 350,756,530 248,919,930
Others 56,599,127 64,410,261
5,723,233,029 5,567,885,705
5,745,510,743 5,585,644,010
8.5.2 Disclosure on large loan

Loan sanctioned to any individual or enterprise or any organization of a group amounting to 15% or more of the Company's
total capital and classified amount therein and measures taken for recovery of such loan have been furnished as under. Total
capital of the Company as at 31 December 2013 was Taka 2,064.97 million against that of Taka 2,027.33 million as at 31
December 2012.
Number of client to whom loans and advances sanctioned with more than
15% of the Company's total capital each 1 2
Amount of outstanding loans and advances [to the client as mentioned 199,365,185 446,877,366
above]
Amount of classified loans and advances [out of the amount as mentioned
above] - -
Measures taken for recovery [for the amount as mentioned above] - -

Figures in Taka
8.6 Geographical location-wise loans, advances and lease receivables

including bills purchased and discounted
Dhaka Division 4,858,079,983 4,714,560,829
Chittagong Division 848,683,555 825,810,367
Khulna Division 19,883,619 24,037,574
Rangpur Division 8,958,046 8,958,046
Rajshahi Division 7,525,521 3,965,194
Sylhet Division 2,380,019 8,312,000
Barisal Division - -
5,745,510,743 5,585,644,010
8.7 Industry-wise loans, advances and lease receivables including bills
purchased and discounted
Agro-based industries 549,096,157 496,826,670
Banks and non-banking financial institutions 346,317,849 172,169,249
Chemicals, pharmaceuticals and allied products 438,050,385 582,602,717
Engineering and building materials 454,562,960 488,259,153
Food and allied products 524,530,074 225,993,182
Glass, ceramic and other non-metallic products 7,419,664 166,994,679
Hotel, tourism and leisure 86,030,634 15,885,566
Information and communication technologies 91,497,508 238,140,221
Paper converting and packaging, printing and publishing 242,107,323 158,239,795
Ready made garments and knitwear 151,952,371 123,245,070
Social sector 386,908,940 53,953,056
Tannery, leather and rubber products 73,678,868 101,111,556
Textile 759,544,830 854,483,927
Transport and aviation 185,674,526 168,328,503
Others 1,448,138,654 1,739,410,667
5,745,510,743 5,585,644,010
8.8 Broad economic sector-wise segregation of loans, advances and
lease receivables including bills purchased and discounted
Government and autonomous bodies - -
Banks and financial institutions (public and private) 346,317,849 172,169,249
Other public sector - -
Private sector 5,399,192,894 5,413,474,761
5,745,510,743 5,585,644,010
8.9 a) Classification of loans, advances and lease receivables including
bills purchased and discounted
Unclassified loans, advances and leases
Standard (including staff loans) 5,395,761,022 5,034,628,038
Special mention account 7,676,839 11,652,773
Total unclassified loans, advances and leases 5,403,437,861 5,046,280,811
Classified loans, advances and leases
Substandard 82,300,432 8,681,567
Doubtful 1,568,956 97,488,030
Bad/loss 258,203,494 433,193,602
Total classified loans, advances and leases 342,072,882 539,363,199
Total loans, advances and leases 5,745,510,743 5,585,644,010

Figures in Taka
b) Classification and provisioning of loans, advances and lease receivables including bills purchased and discounted
Base for
Status Outstanding Rate Provision Provision
provision
General provision
Standard - excluding SME 4,792,436,022 4,792,436,022 1% 47,924,360 46,430,553
Standard - SME 603,325,000 603,325,000 0.25% 1,508,313 97,893
Special mention account 7,676,839 6,106,903 5% 305,345 550,599
5,403,437,861 5,401,867,925 49,738,018 47,079,045
Specific provision
Sub-standard 82,300,432 44,232,861 20% 8,846,572 1,636,837
Doubtful 1,568,956 1,377,417 50% 688,709 9,499,185
Bad/loss 258,203,494 45,284,498 100% 45,284,498 88,874,040
342,072,882 90,894,776 54,819,779 100,010,062
Total provision required 104,557,797 147,089,107
Total provision maintained 153,895,802 190,472,191
Total provision surplus 49,338,005 43,383,084
8.10 Particulars of loans, advances and lease receivables including
bills purchased and discounted
Loans considered good in respect of which the Company is fully secured 1,254,144,148 1,140,964,332
Loans considered good for which the Company holds no security other than
the debtor's personal guarantee 2,078,400,151 1,448,899,375
Loans considered good and secured by the personal undertakings of one or
more parties in addition to the personal guarantee of the debtors 2,412,966,444 2,995,780,303
5,745,510,743 5,585,644,010
Loans adversely classified where provision not maintained there against - -
Loans due by directors or officers of the Company or any of them either
separately or jointly with any other persons 22,529,076 17,758,305
Loans due from companies or firms in which the directors of the Company have
interests as directors, partners or managing agents or in case of private - -
companies as members
Maximum total amount of advances, including temporary advances made at any

time during the year to directors or managers or officers of the Company or any
of them either separately or jointly with any other persons 22,529,076 17,758,305
Maximum total amount of advances, including temporary advances granted

during the year to the companies or firms in which the directors of the Company - -
have interests as directors, partners or managing agents or in the case of private
companies as members
Due from other Non Banking Financial Institutions (NBFIs) 3,863,002 4,607,943
Amount of classified loans on which interest has not been charged 258,203,494 433,193,602
Increase/(decrease) in specific provision (45,190,283) (85,337,627)
Amount of loan written off during the year 217,098,297 226,564,185
Amount realized against loan previously written off 75,738,172 24,304,828
Amount of provision kept against loan classified as 'bad/loss' on the date of
preparing the balance sheet 45,284,498 88,874,040
Interest creditable to the interest suspense account during the year 10,637,144 13,967,586

Figures in Taka

a) Cumulative amount of written off loan
Opening balance 605,519,822 403,260,465
Add: Amount written off during the year 217,098,297 226,564,185
822,618,119 629,824,650
Less: Adjustment for recovery 152,206,606 24,304,828
Closing balance 670,411,513 605,519,822
b) Amount of written off loan for which lawsuit has been filed for recovery 670,411,513 605,519,822
9. Fixed assets including premises, furniture and fixtures

Land and building 75,684,163 75,684,163
Motor vehicles 31,374,745 20,911,776
Furniture and fixtures 29,550,148 29,241,775
Equipment and appliances 37,591,445 33,413,823
Accounting software 2,398,750 2,398,750
176,599,251 161,650,287
Less: Accumulated depreciation 89,798,816 85,441,261
86,800,435 76,209,026
Capital work in progress 9.1 21,026,860 -
107,827,295 76,209,026
Details are shown in Annexure-A.
9.1 Capital work in progress
The company has issued work orders for Tk. 35.10 million in favor of different vendors during the year 2013 for supplying
computer hardware, servers, software in connection with installation of new core banking software. Out of which Tk 21.03
million was paid during the year 2013 and shown as capital work in progress under the head of fixed assets including
premises, furniture and fixtures
10. Other assets

Income generating other assets - -
Non-income generating other assets
Stationery, stamps, printing materials in stock 97,715 52,825
Advance rent and advertisement 7,552,593 4,079,432
Interest accrued on investment but not collected, commission and
brokerage receivable on shares and debentures and other income
receivable 31,686,492 25,248,267
Security deposits 716,160 716,160
Preliminary, formation and organization expenses, renovation/development
expenses and prepaid expenses 400,227 375,260
Branch adjustment - -
Suspense account - -
Silver - -
Others 10.1 238,829,143 223,841,361
279,282,330 254,313,305
10.1 Others
Advance tax 10.1.1 227,764,984 214,822,122
Deferred tax asset 10.1.2 5,645,244 4,697,206
Sundry assets 10.1.3 5,418,915 4,322,033
238,829,143 223,841,361
10.1.1 Advance tax
Advance tax represents corporate income tax paid to the Government Exchequer by way of advance tax and tax deducted
by the third parties at source from different heads of income, which would be adjusted with the corporate tax liability of
the Company.

Figures in Taka

10.1.2 Deferred tax asset
Deferred tax asset has been recognized in accordance with the Bangladesh Accounting Standard (BAS) 12: Income
Taxes based on temporary difference arising due to difference in the carrying amount of the assets and liabilities in the
financial statements and its tax base. Calculation of deferred tax asset is as follows:
Deductible temporary difference
Gratuity provision 13,282,926 11,052,250
Tax rate 42.50% 42.50%
Deferred tax asset 5,645,244 4,697,206
Movement of deferred tax asset is as follows:
Opening balance 4,697,206 3,486,891
Add: (Expense)/income 948,038 1,210,315
Closing balance 5,645,244 4,697,206
10.1.3 Sundry assets
City corporation tax 138,140 113,400
Hosna Centre Owners' Association 583,050 583,050
Advance others 4,697,725 3,625,583
5,418,915 4,322,033
11. Non financial institutional assets
Generator - 2,344,460
Land 11.1 3,752,405 3,752,405
3,752,405 6,096,865
11.1 This represents the mortgaged property (land) acquired from a default client by virtue of verdict given by the
competent court and ownership has been transferred in favor of the Company. The land is mutated in the name of the
Company.
12. Borrowings from other banks, financial institutions and agents
Unsecured long term loan
The UAE-Bangladesh Investment Company Ltd. 21,743,142 29,698,701
Secured bank overdraft
Prime Bank Ltd. 85,176,244 -
Mercantile Bank Ltd. 47,056,990 -
132,233,234 -
Money at call and short notice
Standard Bank Ltd. 40,000,000 -
BASIC Bank Ltd. 50,000,000 -
The Farmers Bank Ltd. 50,000,000 -
Dutch-Bangla Bank Ltd. 60,000,000 -
The City Bank Ltd. 60,000,000 -
260,000,000 -
413,976,376 29,698,701
All borrowings are within Bangladesh.
12.1 Residual maturity grouping of borrowings from other banks, financial
institutions and agents
Repayable
On demand 260,000,000 -
Within one month - -
Over one month but within three months 38,140,334 1,901,594
Over three months but within twelve months 100,906,692 6,053,966
Over one year but within five years 14,929,350 21,743,141
Over five years - -
413,976,376 29,698,701

Figures in Taka
13. Deposits and other accounts

Inter-bank deposits - -
Other deposits 4,427,093,408 4,208,012,043
4,427,093,408 4,208,012,043
13.1 Residual maturity grouping of deposits and other accounts

Repayable
On demand - -
Within one month 183,461,427 176,474,328
Over one month but within six months 668,793,386 432,970,955
Over six months but within one year 1,891,818,528 1,630,940,524
Over one year but within five years 1,636,381,228 1,909,209,955
Over five years but within ten years 46,638,839 58,416,281
4,427,093,408 4,208,012,043
There was no unclaimed deposits for ten (10) years or more held by the Company at the reporting date.
14. Other liabilities
Cumulative provision for loans, leases and investments 14.1 216,239,280 269,664,794
Cumulative interest and dividend suspense 14.2 53,165,131 129,472,462
Provision for gratuity 14.3 13,282,926 11,052,250
Dividend payable 7,088,305 3,800,090
Provision for corporate tax 14.4 225,220,631 126,791,790
Receipts against lease 14.5 36,086,227 27,313,330
Provision for finance charge 14.6 252,071,107 239,227,890
Withholding tax and VAT 7,761,895 6,991,938
Liabilities for special accounts 14.7 22,425,305 16,303,772
Provision for expense 14.8 4,009,842 5,792,233
Deferred tax liabilities 14.9 14,608,087 12,295,227
Payable for purchase of office equipment 924,520 764,581
852,883,256 849,470,357
14.1 Cumulative provision for loans, advances, leases and investment

Specific provision for bad and doubtful loans, leases and advances
Opening balance 100,010,062 185,347,689
Add: Specific provision made during the year 41 91,500,755 111,686,108
Less: Fully provided debt written-off during the year 136,691,039 197,023,735
Closing balance 54,819,778 100,010,062
General provision against unclassified loans, leases and advances
Opening balance 90,462,129 137,109,115
Add: General provision made during the year 41 8,678,283 (46,646,986)
Less: Adjustment during the year 64,388 -
99,076,024 90,462,129
Closing balance 8.2 (a) 153,895,802 190,472,191
Provision for investments
Opening balance 79,192,604 70,726,815
Add: Provision made/(release) for investment in shares 41 (19,902,026) -
Add: Marking to market provision on Govt. securities 41 3,052,900 8,465,789
Total provision made during the year (16,849,126) 8,465,789
Closing balance 62,343,478 79,192,604
216,239,280 269,664,795
56
Figures in Taka
Break up of cumulative provision for loans, advances, leases and investment

Provision for loans, leases and advances 153,895,802 190,472,191
Provision for investments in shares 18,170,869 38,072,894
172,066,671 228,545,085
Provision for marking to market on Govt. securities 44,172,609 41,119,709
216,239,280 269,664,794
14.2 Cumulative interest and dividend suspense
Opening balance 129,472,462 162,935,475
Add: Transferred to suspense account during the year 10,637,144 13,967,586
140,109,606 176,903,061
Less: Recovered from suspense account during the year 6,599,580 17,890,151
Less: Written-off/waiver of suspense account during the year 80,344,895 29,540,448
86,944,475 47,430,599
Closing balance 53,165,131 129,472,462
Break up of cumulative interest and dividend suspense
Interest suspense against loans, leases and advances 8.2 (a) 50,147,364 126,814,695
Dividend suspense against investment in preference shares 3,017,767 2,657,767
53,165,131 129,472,462
14.3 Provision for gratuity
This represents provision for staff gratuity up to 31 December 2013. The company has provided full provision for
gratuity at the rate of one month's basic salary for each completed year of service.
Opening balance 11,052,250 8,204,449

Add: Provision made during the year 2,576,676 3,055,300
13,628,926 11,259,750
Less: Payment made during the year 346,000 207,500
Closing balance 13,282,926 11,052,250
14.4 Provision for corporate tax
Provision for corporate tax has been made on the basis of the profit for the year as adjusted for taxation purposes in
accordance with the provision of Income Tax Ordinance 1984 and amendments thereto. Currently tax rate applicable to
the company is 42.50% on its business income.
Opening balance 126,791,790 119,003,508

Add: Provision made during the year 98,428,841 7,788,282
225,220,631 126,791,790
Less: Adjustment during the year - -
Closing balance 225,220,631 126,791,790
Assessment of income tax has been finalized with the tax authority for the accounting years up to 2003 and for the
accounting year 2005. Final assessment of income tax for accounting years 2004 and 2006 to 2008 are pending with the
Appellate Authorities and High Court Division of the Supreme Court. Income tax return for the year 2009, 2010, 2011
and 2012 have been duly submitted under section 82BB (Universal Self Assessment) of Income Tax Ordinance 1984.
14.5 Receipts against lease
Receipts against lease represents lease deposits received from lessees against finance on the stipulation that the amount
will be adjusted with the outstanding rentals/installments. Lease deposits are made up as under:
Opening balance 27,313,330 28,447,130
Add: Receipts during the year 17,813,748 14,467,780
45,127,078 42,914,910
Less: Adjusted during the year 9,040,851 15,601,580
Closing balance 36,086,227 27,313,330
Purpose of taking lease deposit is to secure the finance provided to the clients. No interest is payable on lease deposits.

Figures in Taka

14.6 Provision for finance charge
Accrued interest expenses on term deposits 251,696,581 238,833,141
Accrued interest expenses on long term borrowings 374,526 247,489
Accrued interest expenses on Repo borrowings - 147,260
252,071,107 239,227,890
14.7 Liabilities for special accounts
Account payable special account - IPO 1,118,356 1,118,356
Account payable special account - DEG 16,381,424 14,941,452
Account payable special account - other 4,925,525 243,964
22,425,305 16,303,772
14.8 Provision for expenses
Legal fees 1,526,051 2,068,225
Office services 1,503,592 778,235
Pay and allowance - 377,749
Promotion and publicity 239,074 1,500,339
Office rent 86,275 67,335
Professional fees 212,100 232,100
Audit fees 442,750 768,250
4,009,842 5,792,233
14.9 Deferred tax liabilities
Taxable temporary differences
Property, plant and equipment 10,744,178 5,302,152
Revaluation reserve on office premises 23,627,792 23,627,792
Net taxable temporary differences 34,371,970 28,929,944
Tax rate 42.50% 42.50%
Deferred tax liabilities 14,608,087 12,295,227
Movement of deferred tax liabilities is as follows:

Opening balance 12,295,227 13,480,611
Add: Expense/(income) during the year 42 2,312,860 (1,185,384)
Closing balance 14,608,087 12,295,227
15. Share capital
Authorized
400,000,000 ordinary shares of Taka 10 each 4,000,000,000 4,000,000,000
Issued, subscribed and fully paid up
104,339,235 number of ordinary shares of Taka 10 each 1,043,392,350 1,043,392,350
Paid up capital is made up of 25,701,400 numbers of ordinary shares paid up in cash and 78,637,835 numbers of
ordinary shares through issuance of bonus shares.
15.1 Paid up capital of the company is held as follows:

Foreign
Aga Khan Fund for Economic Development (AKFED) 532,674,670 532,674,670
Others 550 550
532,675,220 532,675,220
Domestic
Government of the People's Republic of Bangladesh (GoB) 228,289,710 228,289,710
General Shareholders 282,420,490 282,420,490
Others 6,930 6,930
510,717,130 510,717,130
1,043,392,350 1,043,392,350

15.2 Number of ordinary shares and percentage of holding are as follows:
2013 2012
Number % of holding Number % of holding
Foreign
Aga Khan Fund for Economic Development
(AKFED) 53,267,467 51.05 53,267,467 51.05
Others 55 - 55 -
53,267,522 51.05 53,267,522 51.05
Domestic
Government of the People's Republic of Bangladesh
(GoB) 22,828,971 21.88 22,828,971 21.88
General Shareholders 28,242,049 27.07 28,242,049 27.07
Others 693 - 693 -
51,071,713 48.95 51,071,713 48.95
104,339,235 100.00 104,339,235 100.00
15.3 Composition of shareholding is as follows:
No. of shares
2013 2012
Institutional shareholding (including GoB) 88,315,675 86,056,048
Individual shareholding 16,023,560 18,283,187
104,339,235 104,339,235
15.4 Classification of shareholders by holding as required by Regulation 37 of the Listing Regulation of the Dhaka
Stock Exchange Ltd.
No. of
Number of shares No. of shares % of holdings
shareholders
1 to 500 shares 6,325 763,898 0.73%
501 to 5,000 shares 3,674 5,443,791 5.22%
5,001 to 10,000 shares 302 2,171,506 2.08%
10,001 to 20,000 shares 136 1,874,347 1.80%
20,001 to 30,000 shares 54 1,340,773 1.29%
30,001 to 40,000 shares 17 608,497 0.58%
40,001 to 50,000 shares 12 528,068 0.51%
50,001 to 1,00,000 shares 29 2,001,299 1.92%
1,00,001 to 1,000,000 shares 29 9,315,228 8.93%
over 1,000,000 4 80,291,828 76.95%
Total 10,582 104,339,235 100.00%
The shares of the company are listed in the Stock Exchanges of Bangladesh since 03 December 2006 and traded at Tk.
20.00 at the close of 31 December 2013 in both of Dhaka and Chittagong Stock Exchange Ltd.
15.5 Capital adequacy ratio

In accordance with the Financial Institutions Regulations 1994 and Bangladesh Bank's DFIM circular no. 05 dated 24 July
2011 every Non Bank Financial Institution which is registered in Bangladesh as a company has to increase its paid up
capital to Tk. 1,000 million within 30 June 2012, the Company fulfilled this condition within the stipulated time and as at
31 December 2013, total capital of the company was Tk. 2,064.97 million out of which paid up capital is Tk. 1,043.39
million.
In accordance with Bangladesh Bank's DFIM Circular no. 14 dated 28 December 2011 the Financial Institutions are
required to maintain at least 10% Capital Adequacy Ratio (CAR) in line with the guidelines on Capital Adequacy and
Market Discipline (CAMD) for Financial Institutions, which has come fully into force from 1 January 2012. As of 31
December 2013 the CAR of the Company is 24.36% against the required CAR of 10%. Details are as follows:

Figures in Taka
Tier -1 Capital 2,051,384,835 2,013,740,160

Tier -2 Capital 94,499,717 57,304,538
Eligible capital 2,145,884,552 2,071,044,698
Total risk weighted assets 8,809,779,155 8,519,234,889
Capital adequacy ratio 24.36% 24.31%
Minimum capital requirement 880,977,916 851,923,489
Capital surplus 1,264,906,637 1,219,121,209
16. Share premium 167,014,000 167,014,000

Share premium against 280,140 number of ordinary shares issued in 2004 and 1,390,000 number of ordinary shares
issued in 2006 @ Tk. 100 per share i.e. in year 2013 total number of shares would be 16,701,400 @ Tk. 10 per share as
the Company changed the denomination of shares from Tk. 100 to Tk. 10 each in 2011 in compliance with the
Bangladesh Securities and Exchange Commission's order number SEC/CMRRCD/2009-193/109 dated 15 September
2011.
17. Statutory reserve

This comprises the cumulative balance of statutory reserve as required by section 9 of the Financial Institutions Act,
1993 and regulation 4(d) and 6 of the Financial Institutions Regulations, 1994.
Opening balance 223,222,211 197,501,563
Add: Transferred from profit during the year 28,396,782 25,720,648
Closing balance 251,618,993 223,222,211
18. Assets revaluation reserve 13,585,980 13,585,980

In terms of Bangladesh Accounting Standard (BAS) 16: Property, Plant and Equipment, the Company had revalued it's
office premises by a professionally qualified valuation firm of the country in 2005. Total revaluation surplus of Taka
23,627,792 has been included with value of office premises and Tk. 13,585,980 shown as assets revaluation reserve after
adjustment of deferred tax.
19. Retained earnings

Opening balance 580,111,599 572,082,855
Add: Post tax profit for the year 141,983,910 128,603,242
Balance available for distribution 722,095,509 700,686,097
Less: Transfer to statutory reserve 28,396,782 25,720,648
Less: 10% cash dividend for the year 2012 104,339,235 -
Less: Issuance of bonus shares - 94,853,850
132,736,017 120,574,498
Closing balance 589,359,492 580,111,599
20. Letters of guarantee

Director - -
Government - -
Bank and financial institutions 5,590,000 5,590,000
Others - -
5,590,000 5,590,000
Letter of guarantee has been issued in favor of Habib Bank Limited, against Titas Gas Transmission and Distribution
Company Limited on account of M/s Hossain & Sons.

Figures in Taka
As at and for the year ended 31 December Note 2013 2012

21. (Increase)/decrease of other assets
Closing other assets
Security deposit 716,160 716,160
Other assets 11,064,159 9,019,239
19,430,627 13,867,656
Opening other assets
Security deposit 716,160 716,160
Other assets 9,019,239 8,876,777
13,867,656 15,481,278
(5,562,971) 1,613,622
22. Increase/(decrease) of other liabilities

Closing other liabilities
Provision for current tax 225,220,631 126,791,790
Withholding tax, VAT and excise duty 7,761,895 6,991,938
Others 58,511,532 43,617,102
291,494,058 177,400,830
Opening other liabilities
Provision for current tax 126,791,790 119,003,508
Withholding tax, VAT and excise duty 6,991,938 4,026,155
Others 43,617,102 44,897,829
177,400,830 167,927,492
114,093,228 9,473,338
23. Cash and cash equivalents

Cash in hand 50,542 68,533
Balance with Bangladesh Bank and its agent bank(s) 154,996,460 94,246,168
Balance with other banks and financial institutions 546,533,211 433,650,776
701,580,213 527,965,477
24. Particulars of profit and loss account

Income
Interest, discount and other similar income 25 932,008,095 791,167,557
Dividend income 27 31,045,048 38,941,411
Fees, commission and brokerage 28 9,247,360 7,134,733
Gains less losses arising from dealing securities 27 56,197,965 31,300,315
Gains less losses arising from dealing in foreign currencies 28 - -
Other operating income 29 77,472,120 25,245,938
Profit less losses on interest rate changes - -
1,105,970,588 893,789,954
Expenses
Interest, fee and commission 26 627,680,621 554,659,236
Losses on loans and leases - -
Administrative expenses 30 138,685,556 115,502,252
Depreciation on fixed assets 39.1 14,496,926 16,127,730
780,863,103 686,289,218
Profit before provision 325,107,485 207,500,736

Figures in Taka
For the year ended 31 December Note 2013 2012

25. Interest income
Interest income on loans, leases and advances
Interest on lease finance 266,153,757 212,540,794
Interest on long term finance 472,251,694 418,842,237
Interest on short term finance 50,290,239 27,182,282
Interest on channel finance 22,673,216 10,095,418
Interest on mortgage finance 6,739,705 2,607,366
Interest on secured finance 24,805,564 15,552,837
Interest on auto loan 25,090,769 13,566,921
Interest income on staff loan 1,778,689 1,758,715
869,783,633 702,146,570
Interest income on balance with other banks and financial institutions
Interest on fixed deposits 40,343,206 20,112,522
Interest on overnight and treasury placements 20,427,569 68,397,556
Interest on STD accounts 1,453,687 510,909
62,224,462 89,020,987
932,008,095 791,167,557
26. Interest paid on deposits and borrowings etc.
Interest expenses on term deposits 603,676,091 529,656,332
Interest expenses on borrowings 26.1 24,004,530 25,002,904
627,680,621 554,659,236
26.1 Interest expenses on borrowings
Interest expenses on long term loan 3,148,364 4,046,272
Interest expenses on call loan borrowing 16,637,110 1,955,377
Interest expenses on bank overdrafts 244,741 5,170,570
Interest expenses on Repo borrowings 3,974,315 13,830,685
24,004,530 25,002,904
The Company does not have any foreign borrowings.
27. Investment income
Dividend income
Dividend income on cumulative preference shares 30,742,052 38,788,914
Dividend income on listed shares 2,996 -
Dividend income on un-listed shares 300,000 152,497
31,045,048 38,941,411
Income on treasury bills, bonds and debentures
Income on Govt. treasury bonds 38,020,210 13,275,657
Income on corporate bonds 17,975,478 18,024,658
55,995,688 31,300,315
Capital gain on sale of listed shares 202,277 -
56,197,965 31,300,315
87,243,013 70,241,726
28. Commission, exchange and brokerage
Fees and commission income 28.1 9,247,360 7,134,733
Exchange income - -
9,247,360 7,134,733
28.1 Fees and commission income
Fees income
Appraisal, feasibility study and documentation fees 9,217,360 7,077,733
Restructuring/renewal fees 30,000 50,000
9,247,360 7,127,733
Commission - 7,000
9,247,360 7,134,733

Figures in Taka

29. Other operating income
Transfer price/sale of leased assets 475,112 413,184
Other earnings 181,951 20,349
Loan loss recovery 75,738,172 24,304,828
Gain/(loss) on sale of fixed assets 29.1 1,076,885 507,577
77,472,120 25,245,938
29.1 Gain/(loss) on sale of fixed asset
Cost price of the sold items 14,467,607 1,756,953
Less: Accumulated depreciation 12,098,492 1,317,587
Written down value 2,369,115 439,366
Sale proceeds 3,446,000 946,943
Gain on sale of fixed assets 1,076,885 507,577
30. Administrative expenses
Salary and allowances 31 76,520,759 60,549,462
Rent, taxes, insurance, electricity, etc. 32 12,064,232 10,769,111
Legal expenses 33 7,772,088 8,252,369
Postage, stamp, telecommunications, etc. 34 2,911,842 2,443,879
Stationery, printings, advertisements etc. 35 8,918,246 6,306,120
Managing Director's salary and allowances 36 6,879,996 7,167,045
Directors' fees 37 3,174,589 3,823,212
Auditors' fees 38 442,750 365,750
Repair and maintenance 39.2 6,227,494 5,158,688
Other expenses 40 13,773,560 10,666,616
138,685,556 115,502,252
31. Salary and allowances
Basic salary 30,473,172 24,338,357
House rent allowance 9,256,571 7,575,822
Medical allowance 4,702,242 4,135,382
Bonus 11,012,036 9,119,397
Leave fare assistance 5,087,188 3,890,809
Other allowances 3,517,005 1,997,048
Company's contribution to provident fund 2,329,545 1,901,439
Gratuity 2,226,676 2,416,670
Contractual staffs 7,916,324 5,174,538
76,520,759 60,549,462
31.1 Number of employees and remuneration thereof
As per the Schedule XI of the Companies Act, 1994, the number of employees (including contractual employees) engaged
for the whole year or part thereof who received a total remuneration of Taka 36,000 per annum or Taka 3,000 per month
were 107 at the end of 2013 as against 95 in 2012.
32. Rent, taxes, insurance, electricity, etc.

Office rent 5,740,822 5,324,298
Rates and taxes 249,225 228,605
Insurance 2,170,744 1,938,867
Utilities - electricity, gas, water etc 3,903,441 3,277,341
12,064,232 10,769,111
33. Legal expenses
Professional fees 4,783,454 5,068,229
Legal document, court fees etc. 2,988,634 3,184,140
7,772,088 8,252,369

Figures in Taka

34. Postage, stamp, telecommunications, etc.
Postage, stamps etc. 466,244 328,168
Telephone 741,598 411,711
Internet expenses 1,704,000 1,704,000
2,911,842 2,443,879
35. Stationery, printing, advertisements etc.
Printing and stationery 1,344,009 1,105,149
Publicity and advertisement 7,574,237 5,200,971
8,918,246 6,306,120
36. Managing Director's salary and allowances
Basic salary 4,200,000 4,200,000
House rent allowance 360,000 360,000
Medical allowance 150,000 150,000
Bonus 700,000 700,000
Leave fare assistance 699,996 698,415
Company's contribution to provident fund 420,000 420,000
Gratuity 350,000 638,630
6,879,996 7,167,045
37. Directors' fees
Honorarium for attending meeting 581,500 517,500
Incidental expenses for attending meeting 2,593,089 3,305,712
3,174,589 3,823,212
Directors' fees include fees for attending the meetings of the Board, Executive Committee and Audit Committee. Each
director was remunerated @ Tk. 5,000 per meeting in accordance with Bangladesh Bank's DFIM circular number 03 dated
24 February 2010. In addition, as per policy the Company also bears travelling, accommodation and other related costs of
directors who attend Board Meeting from overseas.
38. Auditors' fees 442,750 365,750

Auditors' fees included 15% VAT as per VAT Act 1991 (Year 2012: 4.5%)
39. Depreciation and repair on fixed assets
Depreciation 39.1 14,496,926 16,127,730
Repair and maintenance 39.2 6,227,494 5,158,688
20,724,420 21,286,418
39.1 Depreciation
Office premises 3,925,081 3,824,457
Motor vehicles 3,160,077 4,462,750
Furniture and fixtures 2,804,735 3,623,923
Equipment and appliances 4,207,658 4,083,475
Accounting software 399,375 133,125
14,496,926 16,127,730
Detailed depreciation is shown in Annexure-A
39.2 Repair and maintenance
Annual Report 2013
Office premises 480,189 212,486
Vehicles 4,397,835 3,489,457
Office equipments 1,349,470 1,456,745
6,227,494 5,158,688
64
Figures in Taka

40. Other expenses
Staff training 2,232,729 780,246
Membership fees, subscription and donations 40.1 1,554,885 681,545
News papers, periodicals, learning materials etc. 81,144 63,115
Recruitment expenses 88,703 110,000
Traveling, conveyance and hotel expenses 2,046,279 1,768,650
Entertainment and public relation 993,588 679,836
AGM expenses 2,475,015 2,321,166
Security and cleaning services 2,479,414 1,969,378
Sundry office maintenance 1,555,395 2,158,770
Other operational expenses 266,408 133,910
13,773,560 10,666,616
40.1 Membership fees, subscription and donations
Membership fees 686,504 681,545
CSR activities 868,381 -
1,554,885 681,545
41. Provision for loans, advances, leases and investment
Bad debts written off 14.1 136,691,039 197,023,735
Fully provided debt written off during the year 14.1 (136,691,039) (197,023,735)
Provision for classified loans, leases and advances 14.1 91,500,755 111,686,108
Provision for unclassified loans, leases and advances 14.1 8,678,283 (46,646,986)
Provision for loans, leases and advances 100,179,038 65,039,122
Provision for investment in shares 14.1 (19,902,026) -
Marking to market provision on Govt. securities 14.1 3,052,900 8,465,789
Provision for investment (16,849,126) 8,465,789
83,329,912 73,504,911
42. Deferred tax expense/(income)
Expense/(income) on deductible temporary differences 10.1.2 (948,038) (1,210,315)
Expense/(income) on taxable temporary differences 14.9 2,312,860 (1,185,384)
1,364,822 (2,395,699)
43. Earnings per share (EPS)

Earnings per share (EPS) as shown in the face of the Profit and Loss Account is calculated in accordance with Bangladesh
Accounting Standard (BAS) 33: Earnings per share .
Net profit after tax 141,983,910 128,603,242

Weighted average number of outstanding shares 104,339,235 104,339,235
Basic earning per share 1.36 1.23
Diluted earnings per share (DEPS)

Diluted earnings per share is not applicable as there is no dilutive potential ordinary share during year.
44. Receipts from other operating activities
Transfer price/sale of lease assets 475,112 413,184
Securities income 55,995,688 34,156,234
Income from other operating activities 181,951 20,349
56,652,751 34,589,767
45. Receivable from Director
Receivables from directors are furnished in note number 50 of these financial statements.
46. Board meetings
During the year 2013 a total of 5 (five) Board Meetings were held (2012: 5).

47. Events after the reporting period
47.1 Proposed dividend

The Board of Directors of the Company in its 136th meeting held on 16 March 2014 recommended 5% (five percent) cash
dividend and 10% (ten percent) stock dividend i.e 1 share for every 10 shares for the year ended 31 December 2013 which
is subject to approval of the shareholders in the upcoming 32nd Annual General Meeting scheduled to be held on 15 May
2014.
47.2 Others
No other material event occurred after the balance sheet date, which could materially affect the amounts or disclosures in
these financial statements.
48. General
48.1 Previous year's figure have been rearranged/reclassified where necessary to conform current year's presentation.
49. Disclosure on Audit Committee of the Company
49.1 Particular of Audit Committee
The Audit Committee of the Board was duly constituted by the Board of Directors of the Company in accordance with the
FID Circular No. 10 dated 18 September 2005 and DFIM Circular No. 13 dated 26 October 2011 of Bangladesh Bank as
well as Bangladesh Securities and Exchange Commission Notification no. SEC/CMRRCD/2006-158/134/Admin/44 dated
07 August 2012. The committee was formed comprising 5 (five) members of the Board.
Status with Status with

Sl. no. Name Educational qualification
Company Committee
i) Mr. Md. Nazrul Huda Independent Chairman M.A. (Economics), University of Dhaka; Master of
Director Economics, University of New England, Australia
ii) Ms. Afroza Khan Director Member Master of Soil, Water and Environment,
University of Dhaka; Master of Public Health,
University of North Carolina, USA
iii) Ms. Ashraf Ali Director Member Master of Political Science,
University of Dhaka
iv) Mr. Amin H. Manekia Director Member MBA (major in Finance & Marketing),
Babson College, USA
v) Mr. Altaf Ramzi Director Member Master in Accounting, University of Karachi
The Company Secretary acts as Secretary to the Audit Committee.

49.2 Meeting held by the Audit Committee during the year
The Audit Committee meeting held 5 (five) times during the year 2013 to carry out the followings:
a) The Committee reviewed of the periodical inspection reports on operational, financial procedure and branch operations
of the Company conducted and submitted by the Internal Auditors and gave necessary instructions to the management
for proper and prompt resolution of the irregularities/objections stated therein;
b) The Committee reviewed internal audit plan for the year 2014;
c) The Committee reviewed the draft financial statements for the year 2012 and after discussion with the external auditors,
recommended it to the Board of Directors for its approval;
d) The committee reviewed the Certificate on Corporate Governance issued by the auditors for the year ended 31 December
2012.
e) The Committee reviewed the management letter issued by the external auditors for the year ended 2012 and management
action plan against thereof;
f) The Committee reviewed first quarter, half-year and third quarter ended financial statements for the year 2013 and
recommended to the Board;
g) The Committee reviewed and ascertained that the effectiveness of internal control system including financial &
operational controls, accounting system and reporting structure;

h) The Committee reviewed the actions taken by the management against the observations and issues deliberated in Audit
Committee meetings;
i) The Committee reviewed the inspection report for the year ended 31 December 2012 issued by Bangladesh Bank and
management action plan against thereof
j) The Committee recommended for re-appointment of external auditors of the Company for the year 2013 considering their
capability and global acceptability;
k) The Committee reviewed revised Treasury Policy of the company and recommended to the Board for approval.
l) The committee placed its report regularly to the Board for review and monitoring the activities with recommendations on
internal control system and regulatory compliances.
50. Related party/(ies) disclosure

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the
other party in making financial and operational decision and include associated companies with or without common directors and
key management personnel. The Company has entered into transactions with other entities in normal course of business that fall
within the definition of related party as per Bangladesh Accounting Standard 24: Related Party Disclosures. Transactions with
related parties were executed on the same terms, including interest rates as those prevailing at the time for comparable
transactions with normal business transactions with others and do not involve anything other than a normal risk.
Detail of the related parties transactions are as follows:
Figures in Taka
Outstanding balance
Related party Relationship Nature of transaction
2013 2012
Aga Khan Education Service, This is a part of Aga Khan

Term Deposit Receipt 233,547,506 259,965,997
Bangladesh Development Network - AKDN
Aga Khan Foundation, This is a part of Aga Khan
Bangladesh Development Network - AKDN
Industrial Promotion Services This is a part of Aga Khan Fund for
(Bangladesh) Ltd. Economic Development - AKFED
Habib Bank Ltd Majority share held by AKFED Letter of Guarantee 5,590,000 5,590,000
Nominee Director & Chairman of
Mr. Sulaiman Ajanee Term Deposit Receipt 22,042,797 20,921,248
IPDC
Spouse of Mr. Sulaiman Ajanee -
Ms. Nurjahan Ajanee Term Deposit Receipt 1,177,150 560,000
Chairman of IPDC
Mr. Sulaiman Ajanee is the
World Com. Ltd. Managing Director of World Com. Term Deposit Receipt 32,375,420 28,765,915
Ltd
Ms. Ashraf Ali Nominee Director of IPDC Term Deposit Receipt 3,600,000 3,600,000
Spouse of Ms. Ashraf Ali -
Mr. Nizar Ali Term Deposit Receipt 500,000 500,000
Nominee Director of IPDC
Term Deposit Receipt 3,000,000 -
Mr. Alauddin A. Majid Independent Director
Secured Loan 251,361 -
Mr. Mominul Islam Managing Director & CEO Home Loan 10,268,247 10,770,851
Employee Loan 377,728 341,641
Secured Loan 1,017,136 769,999

50.1 Name of the Directors and the entities in which they have interest as at 31 December 2013
Status with IPDC Firms/companies in which they have interest

Name
Position Nominated By Name Position
His Highness Prince Aga Khan Shia Imami
President
Ismaili Council for Bangladesh.
Mr. Sulaiman Ajanee Chairman AKFED Aga Khan Foundation, Bangladesh. Vice Chairman
Standard Finis Oil Company. Managing Partner
World Com Ltd. Managing Director
Training Institutes for Chemical Industries
Ms. Afroza Khan Director GoB Director
(TICI).
Bangladesh Submarine Cable Ltd. Director
Bangladesh Tele-Communication Co. Ltd. Director
Bangladesh Services Ltd. Director
Mr. Jalal Ahmed Director GoB Arms Forces Medical College. Director
IFIC Bank Ltd. Director
National Housing Finance and Investment Ltd. Director
British American Tobacco (BD) Ltd. Director
Independent BRAC Bank Ltd. Advisor
Mr. Md. Nazrul Huda N/A
Director Securities and Investment Company Ltd. Director
Ismailia Co-operative Society. Director
Signet Enterprises Ltd. Director
Mr. Altaf Ramzi Director AKFED
Scotia Services Ltd. Director
Apparel Connection Director
IVP Ltd. India. Director
Mr. Amin H. Manekia Director AKFED
DCB Bank Ltd., India Director
Bangladesh Krishi Bank. Chairman
Independent Shakti Foundation Member
Mr. Alauddin A Majid N/A
Director Data Edge Ltd. Chairman
Enterprise Development Co. Ltd. Director
Mr. Altaf Hussain Director AKFED None N/A
Aga Khan Fund for Economic Development
Mr. Shaffiq Dharamshi Director AKFED Head of Banking
(AKFED)
Ms. Ashraf Ali Director AKFED Form Icon Limited Advisor
Managing
Mr. Mominul Islam Director & Ex-officio None N/A
CEO
50.2 Significant contracts in which the Company, its subsidiary or any fellow subsidiary company was a party None
and wherein the Directors have interest that subsisted at any time during the year or at the end of the year.
50.3 Shares issued to Directors and Executives without consideration or exercisable at discount. None
50.4 Nature, type and elements of transactions with the related party. Note no. 50
50.5 Lending policies in respect of related party:
a) Amount of transactions regarding loans and advances, deposits, guarantees and commitment. Note no. 50
b) Amount of provision against loans and advances given to related party. None
c) Amount of guarantees and commitments arising out of the statement of affairs. None
50.6 Investments in securities of the Directors and their related concerns. None

Annexure - A
Fixed assets including premises, furniture and fixtures
Figures in Taka
Cost Depreciation Carrying
Balance Addition Adjustment Disposal Balance Balance Charged Adjustment Balance amount
Category of asset
as at during during during as at Rate as at during during as at as at
Annual Report 2013

1 Jan 2013 the year the year the year 31 Dec 2013 1 Jan 2013 the year the year 31 Dec 2013 31 Dec 2013
Office premises 75,684,163 - - - 75,684,163 5.00% 25,966,473 3,925,081 - 29,891,554 45,792,609

Motor vehicles 20,911,776 19,052,060 8,589,091 - 31,374,745 20.00% 16,896,243 3,160,077 8,571,402 11,484,918 19,889,827
Furniture and fixtures 29,241,775 490,220 181,847 - 29,550,148 12.50% 20,111,348 2,804,735 174,887 22,741,196 6,808,952
Equipment and appliances 33,413,823 5,570,708 1,393,086 - 37,591,445 20.00% 20,734,073 4,207,658 1,393,082 23,548,649 14,042,796
Accounting software 2,398,750 - - - 2,398,750 50.00% 1,733,124 399,375 - 2,132,499 266,251
161,650,287 25,112,988 10,164,024 - 176,599,251 85,441,261 14,496,926 10,139,371 89,798,816 86,800,435
*Capital work in progress -hardware - 5,337,695 - - 5,337,695 - - - - - 5,337,695
*Capital work in progress -Software - 15,689,165 - - 15,689,165 - - - - - 15,689,165
- 21,026,860 - - 21,026,860 - - - - - 21,026,860
Balance as at 31 December 2013 161,650,287 46,139,848 10,164,024 - 197,626,111 - 85,441,261 14,496,926 10,139,371 89,798,816 107,827,295
*Capital work in progress (both hardware & software) represents the amount paid for procuring and implementing new core banking software.
Cost Depreciation Carrying

Balance Addition Adjustment Disposal Balance Balance Charged Adjustment Balance amount
Category of asset
as at during during during as at Rate as at during during as at as at
1 Jan 2012 the year the year the year 31 Dec 2012 1 Jan 2012 the year the year 31 Dec 2012 31 Dec 2012
Office premises 75,684,163 - - - 75,684,163 5.00% 22,142,016 3,824,457 - 25,966,473 49,717,690

Motor vehicles 17,678,729 4,990,000 - 1,756,953 20,911,776 20%&33.33% 13,751,080 4,462,750 1,317,587 16,896,243 4,015,533
Furniture and fixtures 28,840,320 401,455 - - 29,241,775 12.50% 16,487,425 3,623,923 - 20,111,348 9,130,427
Equipment and appliances 30,347,888 7,907,818 4,303,583 538,300 33,413,823 20.00% 19,148,021 4,083,475 2,497,423 20,734,073 12,679,750
Accounting software 1,600,000 798,750 - - 2,398,750 50.00% 1,599,999 133,125 - 1,733,124 665,626
Balance as at 31 December 2012 154,151,100 14,098,023 4,303,583 2,295,253 161,650,287 73,128,541 16,127,730 3,815,010 85,441,261 76,209,026
Revaluation of office premises
The office premises with proportionate land comprising 11,661 square feet of office space on 4th floor of Hosna Center, 106 Gulshan Avenue, Dhaka-1212, along with car parking for 15
cars, have been revalued by a professional valuer as at 31 December 2005 in line with prevailing market price as on that date. Accordingly selling price of the premises with proportionate
land is stated at Tk. 68,441,292 with a revaluation adjustment of Tk. 23,627,792 as at 31 December 2005.
69
Annexure - B
Highlights on the overall activities of the Company
for the years 2013 and 2012
Figures in Taka
Serial
Particulars 2013 2012
no.
1 Paid up capital 1,043,392,350 1,043,392,350

2 Total capital 2,064,970,815 2,027,326,140
3 Capital surplus 1,264,906,637 1,219,121,209
4 Total assets 7,758,923,855 7,114,507,241
5 Total deposits 4,427,093,408 4,208,012,043
6 Total loans and advances 5,745,510,743 5,585,644,010
7 Total contingent liabilities and commitments 5,590,000 5,590,000
8 Credit deposit ratio 1.30:1 1.33:1
9 Percentage of classified loans against total loans, advances & lease receivables 5.95% 9.66%
10 Net profit after tax and provision 141,983,910 128,603,242
11 Amount of classified loans and advances at the end of the year 342,072,882 539,363,199
12 Provisions kept against classified loan 54,819,779 100,010,062
13 Provisions surplus/(deficit) 49,338,005 43,383,084
14 Cost of fund 13.51% 13.43%
15 Interest earning assets 7,213,014,823 6,683,573,345
16 Non-interest earning assets 545,909,032 430,933,896
17 Return on investment (RoI) 6.94% 6.55%
18 Return on asset (RoA) 1.91% 1.85%
19 Income from investment 87,243,013 70,241,726
20 Earning per share (Taka) 1.36 1.23
21 Net income per share (Taka) 1.36 1.23
22 Price earning ratio (Times) 14.70 14.60

Disclosure on Capital Adequacy and Market Discipline (CAMD)
In accordance with Bangladesh Bank's DFIM Circular no. 14 dated 28 December 2011, the disclosures on capital adequacy
and market discipline have been made in line with same circular, which consists of the following three mutually reinforcing
pillars:
a) Pillar I: This prescribes the minimum capital requirements for Credit Risk, Market Risk and Operational Risk.
b) Pillar II: This prescribes the Supervisory Review Process which is based on the principle that the Company assesses
the overall adequacy of its capital and set targets for capital that commensurate with the Company's specific risk profile
and control environment.
c) Pillar III: This depicts Market Discipline and comprises as set of disclosures on the capital adequacy and risk
management framework on the Company to ensure that market participants can better understand the Company's risk
profile and the adequacy of its capital.
A) Scope of Application
Qualitative Disclosures
The name of the top corporate entity in the group to which this guidelines apply: IPDC of Bangladesh Ltd.
An outline of differences in the basis of consolidated for accounting and regulatory purpose with a brief description of the
entities within the group (a) that are fully consolidated; (b) that are given a deduction treatment; and (c) that are neither
consolidated nor deducted (e.g. where the investment is risk weighted):
Not Applicable since the Company does not have any subsidiary
Any restrictions, or other major impediments, on transfer of funds or regulatory capital within the group.
Not Applicable
Quantitative Disclosures
The aggregate amount of capital deficiencies in all subsidiaries not included in the consolidation that are deducted and the
name(s) of such subsidiaries.
Not Applicable
B) Capital Structure
Summary information on the terms and conditions of the main features of all capital instruments, specially in the case of
capital instruments eligible for inclusion in Tier I or in Tier II
As per the guidelines of Bangladesh Bank, Tier - I and Tier - II Capital of the Company consists of as per following
Tier - I Tier - II
Fully Paid-up Capital General provision
Non repayable share premium account Revaluation reserves
Statutory Reserve - 50% of revaluation reserve of fixed assets
Retained Earnings - 45% of revaluation reserve on securities
All other preference shares
The amount of Tier I capital, with separate disclosure of:
Particulars Taka in million
Paid-up capital 1,043.39
Non repayable share premium account 167.01
Statutory Reserve 251.62
General Reserve -
Retained Earnings 589.36
Total Tier - I capital 2,051.38
Total amount of Tier - II Capital 94.50
Other deductions from capital -
Total eligible capital 2,145.88

C) Capital Adequacy
A summary discussion of the Company's approach to assessing the adequacy of its capital to support current and future
activities.
IPDC has adopted Standardized Approach for computing Capital Charge for Credit and Market Risk while Basic Indicator
Approach for Operational Risk. Total Risk Weighted Assets (RWA) is determined by multiplying the capital charge for
market risk and operational risk by the reciprocal of the minimum capital adequacy ratio which is currently 10% and adding
the resulted figure to the sum of the RWA for credit risk. Capital Adequacy Ratio (CAR) is then determined by dividing total
RWA by total Eligible Regulatory Capital.

Capital requirement for Credit Risk 810.05
Capital requirement for Market Risk 16.78
Capital requirement for Operational Risk 54.16
Total and Tier I capital ratio - For stand alone
CAR on Total Capital basis (%) 24.36
CAR on Tier - I Capital basis (%) 23.29
D) Credit Risk
The general qualitative disclosure requirement with respect to credit risk, including:
▪ Definition of past due and impaired (for accounting purposes);
With a view to strengthening credit discipline, the Company classifies loan, leases and advances and maintains provision in
line with Bangladesh Bank's FID Circular no. 08 dated 03 October 2002 and FID Circular no. 03 dated 03 May 2006 as
follows:
Fixed term loan (repayable within maximum 5 years of time) are classified as:
Substandard - if defaulted installment is equal to or more than the amount of installment(s) due within 6 (six) months, the
entire loans are classified as 'Sub-standard'.
Doubtful - if defaulted installment is equal to or more than the amount of installment(s) due within 12 (twelve) months, the
entire loans are classified as 'Doubtful'.
Bad/Loss - if defaulted installment is equal to or more than the amount of installment(s) due within 18 (eighteen) months, the
entire loans are classified as 'Bad/Loss'.
Fixed term loan (repayable more than 5 years of time) are classified as:
Substandard- if defaulted installment is equal to or more than the amount of installment(s) due within 12 (twelve) months,
the entire loans are classified as 'Sub-standard'.
Doubtful - if defaulted installment is equal to or more than the amount of installment(s) due within 18 (eighteen) months, the
entire loans are classified as 'Doubtful'.
Bad/Loss - if defaulted installment is equal to or more than the amount of installment(s) due within 24 (twenty four) months,
the entire loans are classified as 'Bad/Loss'.
Special Mention Account (SMA) - A term loan which will remain overdue for a period of 90 days or more, are treated as
'SMA'.
▪ Description of approaches followed for specific and general allowances and statistical methods
The Company is following the general and specific provision for loans and advances/investments on the basis of Bangladesh
Bank guidelines issued from time to time.

Particulars Rate
General provision on unclassified loan, leases 1%
General provision on unclassified SME loan, leases 0.25%
General provision on special mention account 5%
Specific provision on substandard loan, leases 20%
Specific provision on doubtful loan, leases 50%
Specific provision on bad/loss loan, leases 100%
▪ Discussion of the Company's credit risk management policy
Definition of Credit Risk: Credit risk is the risk of loss that occur from the failure of any counterparty to make required
payments in accordance with agreed terms and conditions and/or deterioration of credit worthiness. Credit risk is managed
through a framework set by policies and procedures established by the Board. The responsibility is clearly segregated between
originator of business transaction and approver in the risk function.
Credit policies and procedures: The Credit Policy Manual contains the core principles for identifying, measuring, approving
and managing credit risk in the Company. These policies are established by the Board of Directors which are designed to meet
the organizational requirements. These policies represent the minimum standards for credit extension by the Company and
these are not a substitute for the experience and prudent judgment. The policy covers corporate, small and medium enterprise.
There is a comprehensive credit appraisal procedure that covers business risk, management risk, financial risk, security risk,
environmental risk, reputational risk and account performance risk. Credit risk management function is independent of
business originating functions to establish better internal control systems and conflict of interest. The head of Credit Risk
Management (HoCRM) has clear responsibility for management of credit risk of the Company.
Credit Rating and Measurement: Risk management plays a central role along with prudential judgment and experience in
informed risk taking decisions and portfolio management. For the purpose of risk management the Company uses a numeric
grading system associated with a borrower. Though this rating system, 'Credit Risk Grading Matrix (CRGM)' is not a lending
decision making tool but it is used as general indicator to compare one set of customers with others. CRGM analyses a
borrower against a range of quantitative and qualitative measures. No rating model for retail and channel financing are
currently in practice rather borrowers are assessed against some pre-approved criteria outlined in Product Program Guidelines
(PPG), which are approved by the Board of Directors.
Credit Monitoring: The Company, at least quarterly, monitor credit exposures and portfolio performance. Corporate and
medium enterprise accounts are continuously monitored under a clearly set out credit policy. Early alerts are raised for
financial deterioration, management weakness, irregular repayments, breach of covenants, eroding position in the industry etc.
If early alerts are raised, remedial actions are agreed and monitored.
Credit Risk Mitigation: Potential credit losses from any given account, customer or portfolio are mitigated using a range of
tools such as collateral, netting agreement and other guarantees. The reliance that can be placed on these mitigates is carefully
assessed in light with issues such as legal certainty and enforceability, market valuation, and counterparty risk of the guarantor.
Collateral is valued by independent third party surveyor in accordance with the Company's credit policy and procedures.
Credit Approval: Board of Directors of the Company has the sole authority to approve any credit exposure and to sub
delegate to such authority the 'Executive Committee', a sub-committee of the Board, with no approval authority to the
Managing Director & CEO and other Departmental Heads.
Problem Credit Management: The Company has a separate 'Special Asset Management (SAM)' department, dedicated for
management, settlement and recovery of problem credits. Major responsibility of this department is to formulate strategy and
action plans for minimizing risk, prevention of loss, maximization of recoveries and restructuring, direct recovery and/or legal
actions.
Total gross credit risk exposures broken down by major types of credit exposure.
Lease finance 1,741.02
Term loans and advances 3,473.52
Mortgage finance 48.65
Channel finance 163.60
Retail loan 318.72
Total 5,745.51

Geographical distribution of exposures broken down by major types of credit exposure.
Dhaka Division 4,858.08
Chittagong Division 848.68
Khulna Division 19.88
Rangpur Division 8.96
Rajshahi Division 7.53
Sylhet Division 2.38
Total 5,745.51
Industry or counterparty type distribution of exposures, broken down by major type of credit exposure.
Agro-based industries 549.10
Banks and non-banking financial institutions 346.32
Chemicals, pharmaceuticals and allied products 438.05
Engineering and building materials 454.56
Food and allied products 524.53
Glass, ceramic and other non-metallic products 7.42
Hotel, tourism and leisure 86.03
Information and communication technologies 91.50
Paper converting and packaging, printing and publishing 242.11
Ready made garments and knitwear 151.95
Social sector 386.91
Tannery, leather and rubber products 73.68
Textile 759.54
Transport and aviation 185.67
Others 1,448.14
Total 5,745.51
Residual contractual maturity breakdown of the whole portfolio, broken down by major types of credit exposure.
On demand -
Upto one month 201.97
More than one month but less than three months 487.39
More than three months but less than one year 2,277.64
More than one year but less than five years 2,351.44
More than five years 427.07
Total 5,745.51
By major industry or counterparty type:
▪ Amount of impaired loans and if available, past due loans, provided separately
Gross non-performing assets (NPAs) 342.07
NPAs to gross loans and advances (in %) 5.95%
▪ Specific and general provisions

Provision for unclassified loans and advances 99.08
Provision for classified loans and advances 54.82
Provision for off-balance sheet exposures -
Total 153.90
▪ Charges for specific allowances and charge-offs during the period None
Gross Non Performing Assets (NPAs)

Non Performing Assets (NPAs) to Outstanding Loans & Advances

Movement of Non Performing Assets (NPAs)
Opening balance 539.36
Additions 91.21
Reductions 288.50
Closing balance 342.07
Movement of specific provisions for NPAs

Opening balance 100.01
Provisions made during the period 91.50
Write-off 136.69
Write-back of excess provisions -
Closing balance 54.82
E) Equities: Banking book position

The general qualitative disclosure requirement with respect to equity risk, including:
i) Differentiation between holding on which capital gains are expected and those taken under other objectives including for
relationship and strategic reasons;
Investment in equity securities are broadly categorized into two parts:
▪ Quoted Securities that are traded in the secondary markets (Trading Book Assets.)
▪ Unquoted Securities that are valued at cost price.
ii) Discussion of important policies covering the valuation and accounting of equity holdings in the banking book positions.
This includes the accounting techniques and valuation methodologies used, including key assumptions and practices affecting
valuation as well as significant changes in these practices.
Both quoted and unquoted securities are valued at cost and necessary provisions are maintained if the prices fall below the
cost price.
Value disclosed in the balance sheet of investments, as well as the fair value of those investment; for quoted securities, a
comparison to publicly quoted share values where the share price is materially different from fair value.
Quoted shares 7.00
Unquoted shares 11.67
The cumulative realized gains/(losses) arising from sales and liquidations in the reporting period is nil
Total unrealized gains/(losses) -
Total latent revaluation gains/(losses) -
Any amounts of the above included in Tier II capital -
Capital requirements broken down by appropriate equity groupings, consistent with the Company's methodology, as well as
the aggregate amounts and the type of equity investments subject to any supervisory provisions regarding regulatory capital
requirements.
▪ Specific Market Risk: Market value of the investment in equity is Tk. 4.31 million against which capital requirement @ 10%
is Tk. 0.43 million
▪ General Market Risk: Market value of the investment in equity is Tk. 4.31 million against which capital requirement
@ 10% is Tk. 0.43 million

F) Interest rate in the banking book
The general qualitative disclosure requirement including the nature of interest risk and key assumptions, including assumptions
regarding loan prepayments and behavior or non-maturity deposits.
Interest rate risk is the risk where changes in market interest rates might adversely affect the Company's financial condition.
Changes in interest rates affect both the current earnings as well as the net worth of the Company. The short term impact of
changes in interest rates is on the Company's Net Interest Income. In long term, changes in interest rates impact the cash flows
on the assets and liabilities giving rise to a risk to the net worth of the Company arising out of all re-pricing mismatches and
other interest rate sensitive position. The Assets Liability Committee (ALCO) of the Company monitors the interest rate
movement on a continuous basis.
The increase/(decrease) in earnings or economic value (or relevant measure used by management) for upward and downward
rate shocks according to management's method for measuring interest rate risk broken down by currency (as relevant).
Taka in million
Particulars Within 1month 1 - 2 months 2 - 3 months 3 - 6 months 6months- 1 Yr
Total Rate Sensitive Liabilities 295.70 301.90 369.00 522.00 1,327.00
Total Rate Sensitive Assets 410.60 371.70 460.60 671.70 1,678.60
Mismatch 114.90 69.80 91.60 149.70 351.60
Cumulative Mismatch 114.90 184.70 276.30 426.00 777.60
Mismatch (in %) 38.86% 23.12% 24.82% 28.68% 26.50%
Interest Rate Risk - Increase in Interest Rate

Particulars Minor Moderate Major
2% 4% 6%
Change in the Value of Bond Portfolio (47.20) (94.40) (141.60)
Net Interest Income 15.60 31.10 46.70
Revised Regulatory Capital 2,114.20 2,082.60 2,050.90
Risk Weighted Assets 8,809.80 8,809.80 8,809.80
Revised CAP (in %) 24.00% 23.64% 23.28%
G) Market Risk
Views of Board of Directors on trading/investment activities:
Market risk is the possibility of losses of assets in balance sheet and off-balance sheet positions arising out of volatility in
market variables i.e., interest rate, exchange rate and price. Allocation of capital is required in respect of the exposure to risks
deriving from changes in interest rates and market prices.
Methods used to measure the Market Risk

Bangladesh Bank suggested the FIs for using Standardized Approach (rule based) in order to calculate the market risk for
banking book where the capital charge for interest rate risk, price and foreign exchange risk is determined separately.
Market Risk Management system

Policies and processes for mitigating market risk
To mitigate the several market risks the Company formed Asset Liability Management Committee (ALCO) that monitors the
Treasury Division’s activities to minimize the market risk. ALCO is primarily responsible for establishing the market risk
management and asset liability management of the Company, procedures thereof, implementing core risk management frame-
work issued by the regulator, best risk management practices followed by globally and ensuring that internal parameters,
procedures, practices/policies and risk management prudential limits are adhere to.
The ALCO reviews the risk of changes in income of the Company as a result of movement in the market interest rates. The
Company always try to follow Bangladesh Bank's guidelines to minimize mismatches between the duration of interest rate
sensitive assets and liabilities.

In addition, ALCO holds monthly meetings on a regular basis for controlling day-to-day trading activities, to perform market
analysis over interest rate and manage & monitor the level of mismatch for assessing the market risk.
Capital requirements for Market Risk
Interest rate risk 15.92
Equity position risk 0.86
Foreign Exchange Position and Commodity risk (if any) -
H) Operational Risk
Views of Board of Directors (BoD) on system to reduce Operational Risk:
The operational risk is defined as the risk of loss resulting from inadequacy or failure of internal processes, people and systems
or from external events. The Board of Directors (BoD) of the Company and its Management firmly believe that this risk
through a control based environment in which processes are documented, authorized as independent and transactions are
reconciled and monitored. This is supported by an independent program of periodic reviews undertaken by internal audit. All
the operational policies and guidelines are duly approved by the BoD and reviewed on a regular basis.
Performance gap of executives and staffs

The Company always strives to ensure a great place to work by hiring and retaining the most suitable people at all levels of
the business. We want to be the preferred employer in the industry within the year 2015. The Company affirms that there exists
no performance gap of the executives and staffs.
Potential external events

External events like general business and political situation, change in credit quality of the borrowers, change in market
conditions etc. can affect the business of the Company. IPDC is proceeding with its strategic plan and its successful
implementation for its future performance.
Policies and procedures for mitigating operational risk

IPDC mitigates operational risk by virtue of designing the organizational structure by clearly defining roles and responsibilities
of individuals involved in risk taking as well as managing it, formulating overall risk assessment and management policies,
methodologies, guidelines and procedures for risk identification, risk measurement, risk monitoring, defining an acceptable
level of risk, mitigating all the core risks in line with their respective guidelines provided by Bangladesh Bank.
Approach for calculating capital charge for operation risk

As suggested by the guideline, the Company has computed the capital requirements for operational risk under the 'Basic
Indicator Approach(BIA)'. Under BIA, the capital charge for operational risk is a fixed percentage, currently 15% of average
positive annual gross income of the Company over the past three years.
Capital requirements for operational risk
Capital requirements for operational risk 54.16

...................................................................................................................................................................................................................................................................................................................................................................................................................................
Proxy Form
I……………………………………………………………………………of …………………………………………………..
……………………………………………………………………………………………………..being member of IPDC of
Bangladesh Limited, hereby appoint Mr/ Ms………………………………………………………………………………… of
…………………………………………………………………………………………………………………………………...
as my proxy to attend and vote for me and on my behalf at the 32nd Annual General Meeting of the Company to be held on
Thursday, May 15, 2014 at 10:00 a.m. in Conference Hall No. 3 of BRAC-CDM, Rajendrapur, Gazipur or at any adjustment
thereof.
Signed this………………………………… Signature of Proxy…………………………………

Day of………………………………...2014
Revenue
____________________ Stamp
Signature of Shareholder Tk. 20.00
BO ID:
No. of Shares…………………………….
N.B. Important
1. This Proxy Form, duly completed, must be deposited at least 48 hours before the meeting at the Company’s Registered
....Office. Proxy is invalid if not signed and stamped as explained above.
2. Signature of the Shareholders should agree with the Specimen Signature registered with the Company.
--------------------------------------------------------------------------------------------------------------------------
Attendance Slip
I hereby record my attendance at the 32nd Annual General Meeting of the Company being held on Thursday, May 15, 2014 at
10:00 a.m. in Conference Hall No. 3 of BRAC-CDM, Rajendrapur, Gazipur.
Name of Member/Proxy....………………………………………………………………………………………………………
BO ID:
Signature…………………………………
Date…………………………………........
N.B. Shareholders attending the meeting in person or by proxy are requested to complete the attendance slip and deposit the
same at the registration counter on the day of the meeting.

Annual Report 2013 IPDC

Uploaded by

Copyright:

Available Formats

Annual Report 2013 IPDC

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Annual Report 2013 IPDC

Uploaded by

Copyright:

Available Formats

32

Industrial Promotion and Development Company of Bangladesh Limited

Notice of the 32nd Annual General Meeting 03

By Order of the Board

Annual Report 2013 03

Industrial Promotion and Development Company of Bangladesh Limited.

Date of Incorporation: Auditors:

November 28, 1981 Hoda Vasi Chowdhury & Co.

Avenue Tower (3rd floor) A Hossian & Associates

Annual Report 2013 04

Annual Report 2013 05

Annual Report 2013 06

Bismillahir Rahmanir Rahim

Distinguished Shareholders, Assalaamu A’laikum,

Being the Chairman of this esteemed organization, I feel an

Annual Report 2013 07

With an aim to improve customer service and management

The road ahead remains challenging and we stay focused on

Annual Report 2013

Related Party Transaction

Annual Report 2013 12

Annual Report 2013 14

Annual Report 2013 15

Parent/subsidiary and Directors

Top Five Executives other than CEO, CFO CS and HIA

Shareholders’ holding 10% or more voting right

Annual Report 2013 16

Board of Directors Meeting Executive Committee Meeting Audit Committee Meeting

Annual Report 2013

Ashraf Ali, Director – Nominated by AKFED Director since 29 October 2006

Altaf Ramzi, Director – Nominated by AKFED Director since 07 October 2008

Annual Report 2013 18

Md. Nazrul Huda - Independent Director Director since 20 December 2012

Mr. Huda’s impressive career serving the Government of Qualifications:

Annual Report 2013 20

1.0 Board of Directors

Annual Report 2013 21

Director must have at least 12 (twelve) years of corporate

Annual Report 2013 22

1.5(xxii) In case of Appointment/re appointment of Directors, the Company shall

Annual Report 2013 23

4 External/Statutory Auditors should not be engaged to the following services

Annual Report 2013 24

4(ix) Audit/certification services on compliance of corporate governance as Complied

Annual Report 2013 25

A. Work Planning and Strategic Management

Annual Report 2013 26

G. Human Resource Management

Annual Report 2013 27

The Company's Responsibilities

Dhaka, 6 March 2014

Annual Report 2013 28

Status with Status with

The Company Secretary acts as the secretary to the Audit Committee

Scope of work of Audit Committee

Review of Financial Statements by the Audit Committee

Annual Report 2013 29

Major activities of the Audit Committee