Uttara Bank
Uttara Bank
Letter of Transmittal
All Shareholders,
Bangladesh Bank,
Bangladesh Securities and Exchange Commission,
Registrar of Joint Stock Companies & Firms,
Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited.
Dear Sir(s),
We are delighted to enclose a copy of the Annual Report 2016 together with the audited Financial Statements
as at the position of 31 December 2016. The report includes Income Statements, Cash Flow Statements along
with notes thereon of Uttara Bank Limited and its subsidiaries namely “UB Capital & Investment Limited”
and “Uttara Bank Securities Limited”.
Best regards.
Yours sincerely,
Iftekhar Zaman
Executive General Manager & Secretary
Legal Form : Uttara Bank Limited had been a nationalized bank in the name of Uttara
Bank under the Bangladesh Bank (Nationalization) Order 1972, formerly
known as the Eastern Banking Corporation Limited which started
functioning on and from 28 January 1965. Consequent upon the
amendment of Bangladesh Bank (Nationalization) Order 1972, the Uttara
Bank was converted into Uttara Bank Limited as a public limited
company in the year 1983. The Uttara Bank Limited was incorporated as
a banking company on 29 June 1983 and obtained business
commencement certificate on 21 August 1983. The Bank floated its
shares in the year 1984. It has 229 branches all over Bangladesh through
which it carries out all its banking activities. The Bank is listed in the
Dhaka Stock Exchange Limited and the Chittagong Stock Exchange
Limited as a listed company for trading of its shares.
Website : www.uttarabank-bd.com
Chairman : Mr. Azharul Islam
Mr. Azharul Islam, Chairman presiding over a meeting of the Board of Directors
AUDIT COMMITTEE
AUDITORS
Mr. Md. Kamal Akhtar, an Independent Director of the Bank, was born
on the 11th July in 1949 in a respectable Muslim family of Khulna. He
has completed Masters in Commerce with honours in Accounting, MA in
Economics & MBA from Institute of Business Administration (IBA),
Dhaka University and later MS in Business Administration from
University of Bath, England. He started his career in BFIDC under
Ministry of Industry in 1973. As a Dynamic person, he served in various
organizations namely: Bangladesh Forest Industries Development
Corporation (BFIDC), Bangladesh Institute of Management (BIM),
Bangladesh Export Processing Zone Authority (BEPZA) etc. He also
Mr. Md. Kamal Akhtar worked as Investment Promotion Expert and Consultant of Maxwell
Independent Director Stamp Limited- Bangladesh in a number of projects financed by the
World Bank. He has participated in various training programs & seminars
in many countries viz. Thailand, Sri lanka, Hongkong, S.Korea, Japan
and the UK. He has 36 years of professional experience. He has a
significant contribution in the field of Investment Promotion and Business
Development. He has a good number of publications to his credit mainly
relating to labor law & industrial investment and policy. Mr. Akhtar was
appointed Independent Director of Uttara Bank Limited on the 11th May,
2015. He is one of the members of the Board and also a member of the
Audit Committee of the Bank. He is a philanthropic personality and
friendly in nature.
Dear Shareholders,
It gives me great pleasure to address and welcome you all to the 34th Annual General Meeting of
the Bank.I take this opportunity to express my sincere gratitude and heartfelt thanks for your
trust and support. On behalf of the Board of Directors and from my own behalf, I have the
pleasure to present the Annual Report of Uttara Bank Limited for the year 2016 before you.
Bangladesh economy grew by 7.1 percent, exceeding the 7.0 percent growth target and the 6.0
percent growth trajectory. This strong growth was mainly supported by industry and service
sectors.
Agriculture growth deceleration stems from lower growth (0.9 percent) in crops and horticulture.
Industry sector grew robustly by 11.1 percent in FY16, buoyed by power, gas and water supply,
and mining and quarrying sub-sectors. The services sector improved its performance in FY16
and grew by 6.3 percent. Private sector credit grew by 16.8 percent in FY16, above the targeted
growth of 14.8 percent and actual the growth of 13.2 percent in FY 15. Lower lending rate,
foreign financing facilities and political stability contributed to higher growth against the target
of private sector credit. Broad money (M2) recorded a higher growth of 16.3 percent in FY 16
against the targeted growth of 15.0 percent and 12.4 percent actual growth in FY 15.
Azharul Islam
Chairman
Respected Shareholders,
It is my immense pleasure to welcome you to the 34th Annual General Meeting of the bank. I
would like to take this opportunity to express my heartfelt gratitude and sincere thanks for your
trust and confidence upon us that we all by our concerted efforts will bring the bank to a greater
height of prosperity. I humbly acknowledge your continued cooperation and support to achieve
our goals.
World trade volume growth is projected to decrease from 2.6 percent in 2015 to 2.3 percent in 2016 and
then increase to 3.8 percent in 2017. Trade balances in advanced economies are expected to deteriorate in
2016 and 2017 since export growth is projected to be weaker than import growth. The growth rate of
imports for advanced economies is expected to decrease from 4.2 percent in 2015 to 2.4 percent in 2016
and increase to 3.9 percent in 2017.
Bangladesh economy grew by 7.1 percent, exceeding the 7.0 percent growth target and the 6.0 percent
growth trajectory. This strong growth was mainly supported by industry and service sectors.
Agriculture growth deceleration stems from lower growth (0.9 percent) in crops and horticulture.
Industry sector grew robustly by 11.1 percent in FY16, buoyed by power, gas and water supply, and
mining and quarrying sub-sectors. The services sector improved its performance in FY16 and grew by
6.3 percent. Private sector credit grew by 16.8 percent in FY16, above the targeted growth of 14.8
Iftekharul Islam
Vice Chairman
It is a great honour and a pleasant experience for me to present the performance of the bank for
the year 2016 before the honourable shareholders of the Bank. Uttara Bank Limited has passed
another eventful year in terms of its development. At this august moment, I would like to express
my heartfelt thanks and gratitude to our respectable shareholders, valued clients, distinguished
patrons and well wishers whose cooperation and continuous support have helped us to achieve
the steady growth.
Bangladesh economy grew by 7.1 percent, exceeding the 7.0 percent growth target and the 6.0
percent growth trajectory. This strong growth was mainly supported by industry and service
sectors.
Lower lending rate, foreign financing facilities and political stability contributed to higher
growth against the target of private sector credit. Broad money (M2) recorded a higher growth of
16.3 percent in FY 16 against the targeted growth of 15.0 percent and 12.4 percent actual growth
in FY 15.Export grew by 8.9 percent, while import by 5.5 percent in FY 16. Remittances,
however, ended up with a negative growth of 3.0 percent during the same period. Foreign
To
The Board of Directors
Uttara Bank Limited
Head Office
Dhaka
Subject: Certificate of Managing Director & CEO and Chief Financial Officer (CFO) to the Board.
In terms of the Notification of Bangladesh Securities and Exchange Commission (BSEC) bearing
No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012, we, the undersigned
Managing Director & CEO and Chief Financial Officer (CFO) do hereby certify that:
(i) We have reviewed the financial statements for the year ended 31 December 2016 of
Uttara Bank Limited (UBL) and 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.
The principal functions of the Audit Committee, among others, are to oversee the financial
reporting process, monitor internal control, risk management process and review the adequacy of
internal audit function and regulatory compliance functions.
The particulars of the members of the Audit Committee as on 31 December 2016 are as follows:
During the year 2016, the Audit Committee held 8 (eight) meetings in which among others, the
following issues were taken up and disposed of:
1. The Committee reviewed the inspection reports of the different branches of the Bank
conducted by the Bank’s Internal Inspection Teams from time to time.
2. The Committee reviewed management’s actions regarding appropriate/suitable Management
Information System (MIS) of the bank.
3. The Committee reviewed and approved the Internal Control and Compliance Guidelines
2016.
4. The Committee examined the Financial Statements of the Bank for the year 2015 and
exchanged views with the Management and External Auditors on the issue.
5. The Committee reviewed the First Quarter (Q1), Half-Yearly and Third Quarter (Q3)
Financial Statements (Un-Audited) for the year 2016 before submission to the Board for
approval in compliance with the BSEC’s Corporate Governance Guidelines 2012.
6. The Committee took up the comprehensive inspection report of Bangladesh Bank and made
recommendation thereagainst.
7. The Committee reviewed the Management Report of the Bank for the year ended on 31
December 2015 as submitted by the External Auditors.
Mr. Azharul Islam, Honourable Chairman of Uttara Bank Ltd. has inaugurated upgraded website of Uttara bank
Limited as chief guest. The programme was presided over by Mr. Mohammed Rabiul Hossain,
Managing Director & CEO of the Bank.
Mr. Iftekharul Islam, Honourable Vice-Chairman of Uttara Bank Ltd., opens the Bank’s 23rd ATM booth in
Uttara, Dhaka. Mr. Mohammed Rabiul Hossain, Managing Director & CEO of the Bank was also present.
Honourable Prime Minister of the People’s Republic of Bangladesh Sheikh Hasina receiving winter clothes
(Blanket) for PM’s Relief & Welfare Fund from Dr. Md. Rezaul Karim Mazumder & Col. Engr. M.S. Kamal
(Retd.), Honourable Directors of Uttara Bank Limited.
From Left
From Left
Sitting
Mr. Sultan Ahmed, Deputy Managing Director
Mr. Mohammed Mosharaf Hossain, Additional Managing Director
Mr. Mohammed Rabiul Hossain, Managing Director & CEO
Mr. Maksudul Hasan, Deputy Managing Director
Mr. Md. Abdul Quddus, Deputy Managing Director
Standing
Mr. Md. Golam Mustafa (FCA), Executive General Manager & CFO
Mr. Uttam Kumar Barua, Executive General Manager
Mr.Md. Abul Hashem, Executive General Manager
Mr. Md. Reaz Hasan, Executive General Manager
Mr. Md Abdur Razzaque, Executive General Manager
Mr. Md. Siddiqur Rahman, Executive General Manager
Mr. Iftekhar Zaman, Executive General Manager
Mr. Maksudul Hasan Mr. Mohammed Mosharaf Hossain Mr. Sultan Ahmed Mr. Md. Abdul Quddus
Deputy Managing Director Additional Managing Director Deputy Managing Director Deputy Managing Director
ALCO
Mr. Khandaker Ali Samnoon Mr. Amin Uddin Bhuiyan
General Manager General Manager
GENERAL MANAGERS
Mr. Syed Shaikhul Imam Mr. Md. Rafiul Islam
Mr. Alamgir Hussain Howlader Mr. Md. Moklesun Nabi
Mr. Md. Ashraf-uz-Zaman Mr. Md. Mahfuzur Rahman
Mr. Md. Golam Mostafa Mr. Tariqur Rahman
Mr. Md. Aminuddin Bhuiyan Mr. S.S.K.M. Aszad
Mr. Md. Osman Ghani Mr. Md. Qudrat-E-Hayet Khan
Mr. Hasan Mahmud Mr. Md. Muzammel Haque
Mr. Md. Abdur Rouf Mr. Md. Fakhrul Islam
Mr. Khandaker Ali Samnoon Mr. Syed Saidur Rahman
Mr. Azharul Islam, Honourable Chairman of the Board of Directors of Uttara Bank Ltd., opens its 229th
Branch named “Sarojgonj Branch” in Chuadanga under Khulna Zone.
Mr.Mohammed Rabiul Hossain, Managing Director & CEO of the bank inaugurating a new branch
“Panchagarh Branch” (228th) at Panchagarh under Bogra Zone.
The Honourable Chairman of the bank Mr. Azharul Islam delivering his valuable speech as Chief Guest at
1st Zonal Heads’ Conference-2016.
Mr. Azharul Islam, Honourable Chairman of Uttara Bank Ltd., delivering his valuable speech as Chief
Guest at 2nd Zonal Heads’ Conference-2016.
The Managing Director & CEO of the bank Mr. Mohammed Rabiul Hossain presiding over the 3rd Zonal
Heads’ Conference-2016.
The Honourable Chairman of the bank Mr. Azharul Islam delivering his valuable speech as Chief Guest at
4th Zonal Heads’ Conference-2016.
Mr. Mohammed Rabiul Hossain, the then Deputy Managing Director of Uttara Bank Ltd. and Mr. Syed Mohammad
Musa, Director (Operation) of NID registration wing, signed an agreement at Election Commission Secretariat, Dhaka on
be half of their respective organization recently. Managing Director & CEO of the Bank Mr. Shaikh Abdul Aziz and
Brigadier General & DG of NID Mr. Sultanuzzaman Md. Salehuddin were also present.
Mr. Shaikh Abdul Aziz, Managing Director & CEO of the Bank speaks at the Bank’s Second Branch Managers’
Conference of Chittagong Zone at Zonal Office Premises in Chittagong.
Managing Director & CEO of the Bank, opens the new premises for our Chowmuhani Branch under Comilla Zone.
Mr. Mohammed Rabiul Hossain, Managing Director & CEO of Uttara Bank Ltd. speaks at the Bank’s fourth
Branch Managers’ Conference-2016 of Sylhet Zone at Sylhet Branch Premises in Sylhet.
Mr. Mohammed Rabiul Hossain, Managing Director & CEO of Uttara Bank Ltd. and Swapan kumar Roy,
GM of Bangladesh Bank’s SME & Special Programme Department are signing an agreement of “Refinance
Scheme for agro based industries in Rural Area” at Bangladesh Bank auditorium in the capital recently.
Mr. Shaikh Abdul Aziz, Managing Director & CEO of the Bank, speaking as Chief Guest at a Workshop on
“Prevention of Money Laundering & Terrorist Financing” at the Bank’s Auditorium.
Mr. Mohammed Rabiul Hossain, Managing Director & CEO of Uttara Bank Ltd. speaking as Chief Guest
at a Development Workshop on “Human Resources Development Programme”
at the Bank’s Training Institute Auditorium.
Mr. Mohammed Rabiul Hossain, Managing Director & CEO of Uttara Bank Ltd. attending at the Bank’s 9th
(ninth) Branch Managers’ Conference-2016 of Mymensingh Zone at Zonal Office Premises in Mymensingh.
Honourable Managing Director & CEO of the Bank opens ATM booth of Uttara Bank Limited
at Rail Road in Jessore.
Mr.Mohammed Rabiul Hossain, Managing Director & CEO of Uttara Bank Ltd. is seen at the Bank’s
Branch Managers’ Conference-2016 of Comilla Zone at BARD, Kotbari in Comilla.
Mr.Mohammed Rabiul Hossain, Managing Director & CEO of Uttara Bank Ltd. speaks at the Bank’s Branch
Managers’ Conference-2016 of Bogra Zone at Zonal Office Premises in Bogra.
A meritorious student belongs to Uttara family is being honored with a crest for brilliant result in the H.S.C.
exam 2015 by the Principal of bank’s training institute at Shantinagar in Dhaka. Mr. Uttam Kumar Barua,
EGM & Md. Golam Mustafa, FCA, EGM & CFO, were also present.
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% of Shares
Sl. Total Shares
Name Position as on
No. held
31.12.2016
1 Mr. Azharul Islam Chairman 20,529,721 5.131
2 Mr. Iftekharul Islam Vice-Chairman 11,952,323 2.987
3 Mr. Syed A. N. M. Wahed Director 40,075 0.010
4 Engr. Tofazzal Hossain Director 40,075 0.010
5 Mr. Arif Rahman Director 8,004,150 2.001
6 Mr. Abul Barq Alvi Director 39,949 0.010
Independent
7 Dr. Md. Nazmul Karim Chowdhury - -
Director
8 Mr. M. Tajul Islam Director 19,870 0.005
Independent
9 Mr. Md. Kamal Akhtar - -
Director
Independent
10 Dr. Md. Rezaul Karim Mazumder - -
Director
11 Col. Engr. M. S. Kamal (Retd.) Director 40,074 0.010
12 Mr. Asif Rahman Director 9,682,850 2.420
13 Mr. Faruque Alamgir Director 3,339 0.001
14 Mr. Shaikh Abdul Aziz Director 4,000 0.001
Managing
15 Mr. Mohammed Rabiul Hossain
Director & CEO
- -
iii). Shareholding of CEO, CFO, Company Secretary & Head of Internal Audit:
1 Chief Executive Officer and his spouse and minor children Nil
2 Company Secretary and his spouse and minor children Nil
3 Chief Financial Officer and his spouse and minor children Nil
4 Head of Internal Audit and his spouse and minor children Nil
iv). Shareholdings of Executives (Top five salaried persons other than CEO, CFO, CS and HIA): Nil
v). Shareholders holding 10% or more voting interest in the company: Nil
cwiPvjKgÛjxi c‡¶,
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INCOME
Interest Income
During the year 2016 interest income of the
Bank was Tk. 9,307.7 million as against Tk.
9,380.9 million of the previous year. The
interest income of the Bank was decreased
due to reduction of interest rate on loans &
advances and investment of the Bank.
Interest Expenses
Share Capital Interest expenses moved down from Tk.
The Authorized Capital of the Bank was Tk. 6,493.0 million in 2015 to Tk. 5,849.6 million
6,000.0 million as on 31.12 2016. The paid in 2016 posting a decrease of 9.91 percent.
up capital of the Bank has stood at Tk. The interest expenses of the Bank were
4,000.8 million. The total equity of decreased due to low cost of Deposits.
shareholders of the Bank at the end of the
year 2016 stood at Tk. 13,350.8 million and Net Interest Income
in 2015 at Tk. 13,156.2 million.
The net interest income of the Bank for the
Statutory and Other Reserve year under review stood at Tk. 3,458.1 million
as against Tk. 2,887.9 million for the previous
The Statutory and Other Reserve increased to
year thereby making a positive growth of
Tk. 9350.0 million during the year by
registering 2.13 percent increase over last year 19.74 percent over the year 2015.
Tk. 9,155.4 million.
adequacy takes into account of different Profit before Tax (PBT) 2,022,843,280 5,157,766 13,839,513
degrees of credit risk and covers both on Provision for Taxation (492,095,863) (1,934,162) (4,096,518)
balance and off balance sheet transactions. To Profit after Tax (PAT) 1,530,747,417 3,223,604 9,742,995
give comparative effect to this purpose,
capitals are categorized into two tiers: Tier-1 International Trade Operation
defined as core capital comprising the quality
The international trade financing is one of the
capital elements and Tier-2 defined as major business activities conducted by the
supplementary capital represents other Bank. The foreign trade related activities of
elements which fall short of some of the the Bank carried out through 39 Authorized
characteristics of the core capital but Dealer branches across the country, have
supplement the over all strength of the Bank. earned confidence of importers and exporters.
(Details in page no. 205) The Bank’s 39 Authorized Dealer branches
are well equipped with highly trained
Credit Rating of the Bank professionals to handle varied needs of import
and export based clients.
Surveillance rating of Uttara Bank Limited was
rated as on 23 June 2016 on the information of Import Business
31 December 2015 by the Credit Rating
During the year performance of import
Agency of Bangladesh Limited (CRAB) which
business of the Bank was satisfactory. In 2016
is a local rating company. The Bank has import business stood at Tk. 39,962.4 million
achieved AA3 (Very Strong Capacity &Very as compared to the volume of Tk. 38,738.0
High Quality) in long term and ST-2 (High million in 2015 which is increased at 3.16%.
Grade) in short term. The above surveillance
rating has been done in consideration of Bank’s Export Business
visible improvement in fundamentals such as
Export business handled by the Bank during
assets quality, capital adequacy, liquidity the year 2016 amounted to Tk. 10,327.6
position, profitability and limited market share. million as against Tk. 12,224.4 million of the
(Details in page no. 225) preceding year.
i). Parent/ Subsidiary/ Associated Companies and other related parties: Nil
ii). Shareholding of Directors:
Serial Name Position Total % of Shares
No. Shares as on
held 31.12.2016
1 Mr. Azharul Islam Chairman 20,529,721 5.131
2 Mr. Iftekharul Islam Vice Chairman 11,952,323 2.987
3 Mr. Syed A. N. M. Wahed Director 40,075 0.010
4 Engr. Tofazzal Hossain Director 40,075 0.010
5 Mr. Arif Rahman Director 8,004,150 2.001
6 Mr. Abul Barq Alvi Director 39,949 0.010
7 Dr. Md. Nazmul Karim Independent
Chowdhury Director - -
8 Mr. M. Tajul Islam Director 19,870 0.005
9 Mr. Md. Kamal Akhtar Independent - -
Director
10 Dr. Md. Rezaul Karim Mazumder Independent - -
Director
11 Col. Engr. M. S. Kamal (Retd.) Director 40,074 0.010
12 Mr. Asif Rahman Director 9,682,850 2.420
13 Mr. Faruque Alamgir Director 3,339 0.001
14 Mr. Shaikh Abdul Aziz Director 4,000 0.001
15 Mohammed Rabiul Hossain Managing
Director & CEO - -
iii). Shareholding of CEO, CFO, Company Secretary & Head of Internal Audit:
1 Chief Executive Officer and his spouse and minor children Nil
3 Chief Financial Officer and his spouse and minor children Nil
4 Head of Internal Audit and his spouse and minor children Nil
iv). Shareholdings of Executives (Top five salaried persons other than CEO, CFO, CS and
HIA): Nil
v). Shareholders holding 10% or more voting interest in the company: Nil
(Azharul Islam)
Chairman
Risk Management
Risk Management Department of Uttara Bank Limited identifies, evaluates, monitors and
supervises all risk related works as per Guidelines and Directions of Bangladesh Bank with the
approval of the Board of Directors and the Competent Authority.
Reviews of Activities
The Board of Directors consistently monitors and reviews the implementations of policies and
overall performance of the bank.
We are engaged by Uttara Bank Limited to provide certification whether the company
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 07 August 2012 and SEC/CMRRD/2006-158/134/Admin/48 dated 21
July 2013 (“the conditions of corporate governance guidelines”)
Our Responsibilities:
Our responsibility is to examine the Bank’s status of compliance with the conditions of the
corporate governance guidelines and to clarify thereon in the term 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 matter 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 2016.
Status of compliance with the conditions imposed by the Commission’s Notification No.
SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 issued under section 2CC of
the Bangladesh Securities and Exchange Ordinance, 1969:
(Report under Condition No. 7.00)
Compliance Status (
in the appropriate
Condition Remarks
Title column)
No. (If any)
Not
Complied
Complied
1. Board of directors
1.1 Number of the board members
1.2 (i) Number of independent directors
1.2 (ii) Independent Director-
1.2 (ii) a) doesn’t hold any share in the company or hold less than 1% shares of The independent
the company Directors of our
Bank do not hold
any share of the
company.
1.2 (ii) b) not connected with the company’s any sponsor or director or
shareholder who holds 1% or more shares of the company
1.2 (ii) c) does not have any other relationship with the company or its
subsidiary/associated companies
1.2 (ii) d) is not a member, director or officer of any stock exchange
1.2 (ii) e) is not a shareholder, director or officer of any member of stock
exchange or an intermediary of the capital market
1.2 (ii) f) is not a partner or an executive or was not a partner or an executive
during the preceding 3 (three) years of any statutory audit firm
1.2 (ii) g) Shall not be an independent director in more than 3 (three) listed
companies;
1.2 (ii) h) has not been convicted by a court as a defaulter to a bank or a NBFI
1.2 (ii) i) has not been convicted for a criminal offence
1.2 (iii) shall be nominated by the board of directors and approved by the
shareholders in the AGM
1.2 (iv) the post of independent directors can’t remain vacant for more than 90 days
1.2 (v) a code of conduct of all Board members and annual compliance of
the code to be recorded
1.2 (vi) the tenure shall be for a period of 3 (three) years
1.3 Qualification of Independent director
1.3 (i) Conversant with financial, regulatory and corporate laws
1.3 (ii) Qualification & corporate management/ professional experiences
1.3 (iii) Relaxation of qualification subject to prior approval of the commission
1.4 Define respective roles of the Chairman and Chief Executive Officer
1.5 The Directors’ Report to Shareholders shall include
1.5 (i) Industry outlook and possible future developments in the industry
1.5 (ii) segment or product wise performance
1.5 (iii) risk and concerns details
1.5 (iv) discussion on profit
1.5 (v) extra-ordinary gain or loss
1.5 (vi) related party transactions
1.5 (vii) utilization of proceeds from public issues, right issues and /or through
any other instruments
1.5 (viii) explanation for the financial results deterioration
Green Banking is a very general term which can cover a multitude of areas from a Bank being
environmentally friendly to how their money is invested. Green Banking considers all the social
and environmental / ecological factors with an aim to protect the environment and conserve
natural resources. Due to unusual weather pattern, global warming, rising greenhouse gas,
declining air quality etc. and consequently the world is being much vulnerable, now the society
demands that businesses should also take responsibility in sustainable development and
safeguarding the planet. Despite that, all the economic activities of a country circles over the
bank. So green banking is the demand of time, can play a vital role to save the world and its
habitable environment.
Bangladesh is one of the most climate change vulnerable country. Being so, additionally the air
pollution, water pollution and scarcity, encroachment of rivers, improper disposal of industrial,
medical and house-hold wastages, deforestation and loss of open space and loss of biodiversity
make the rapid deterioration of its environmental state. In line with global development and
response to the environmental degradation, financial sector in Bangladesh should play important
roles. Green Banking makes great contribution to the transition to resource-efficient and low
carbon industries i.e. green industry and green economy in general. Green banking is a
component of the global initiative by a group of stakeholders to save environment and
sustainable development as well.
Banks hold a unique position in an economic system that can affect production, business and
other economic activities through their financing activities and thus may contribute to pollute
environment. Moreover, energy and water efficiency and waste reduction are of high concern for
many big banks. Green banks do not only improve their own standards but also affect socially
responsible behavior of other businesses. Profit alone does not hold a central focus in such
Bank’s operation. They have to perform for the betterment of the society and for sustainable
economic growth of the country by internal and external activities. Internally, the Bank have to
follow the green strategic planning towards implementation of paperless banking, on-line
banking, e-communications, effective in-house management e.g. minimizing carbon emission,
high efficient use of energy & other resources and wastages management, green marketing etc.
Externally, the Bank invests in environment friendly products & projects and controls the
projects’ contribution to the environmental degradation by ensuring the implementation of
helpful technologies relevant to the concern business. Banks measure the environmental risk
rating as the regular monitoring process of prior and post sanction of the finance. Environmental
and Social risks are now going to be counted as another core risk with existing.
Green Banking transforms the conventional bank to ethical bank, environmentally responsible
bank, socially responsible bank or sustainable bank. This deals with people, planet & profit,
social & community benefit, ensuring allocation efficiency, financial & social stability and
responsible to ethical, human and social commitment. The broad objectives of the banks are to
use their resources with responsibility avoiding wastage and giving priority to environment and
the society.
(Figure in lac)
Solar Energy Bio-gas Plant ETP Brick Industry Vermi-compost Other Total
Year No. No. No. No. No. No.
Amount Amount Amount Amount Amount No. of Amount Amount
of of of of of of
(Tk.) (Tk.) (Tk.) (Tk.) (Tk.) A/c (Tk.) (Tk.)
A/c A/c A/c A/c A/c A/c
2010 8 3.12 2 1.00 10 4.12
Very recently Bangladesh Bank has issued SFD Circular No.02 dated 01.12.2016 advising the
banks to establish a new Department titled as “Sustainable Finance Department” by dissolving
the existing “Green Banking Department” and “CSR Unit” deploying the chief of Credit
Division as the chief of that. Accordingly, we are going to do.
The Bank assumes the commitment to sustainable development in its mission, social and
environmental responsibility is to value and ensure the integration of the social and
environmental dimensions into its strategies, policies, practices and procedures.
RISK
Risk is a form of uncertainty about outcomes that may have a potentially adverse effect on an
individual or an entity. Risk is subjective as perceived by the entity that would sustain the loss or
injury. In this definition, uncertainties include events which may or may not happen as well as
uncertainties caused by ambiguity or a lack of information.
In Standard 31000 (2009) and ISO Guide 73:2002, the International Standards Organization
defines risk as follows:
Risk is the potential that an event, action or inaction will adversely impact the ability of an entity
to achieve its organizational objectives.
RISK MANAGEMENT
Risk management is the process of identifying, quantifying, and managing the risks that an
organization faces. As the outcomes of banking activities are uncertain, they are said to have
some element of risk.
Through proper risk management one can identify all possible risks, analyze them and then plan
for either contingency or mitigation methods for each. In other words, banking is a business of
risk. In Basel-I, only credit risk was considered, but in Basel-II along with credit risk, operation
risk and market risk have been brought into consideration. Besides these risks, there are some
other risk in banking sector like financial risk, concentration risk, interest rate risk, currency risk,
equity risk, liquidity risk, reputation risk and profit risk. In early 2003 and 2004, the Bangladesh
Bank issued guidelines on six core risks for effective risk management in the banking sector.
These are credit risk management, asset liability risk management, foreign exchange risk
management, internal control and compliance risk management, money laundering risk
management and information & communication technology risk management.
The objective of risk management is to identify and analyze risks and manage their consequences
may cover the following issues:
a) the individuals who take or manage risks in UBL should clearly understand it;
b) UBL risk exposure is within the limits established by the board;
c) risks taking decisions in UBL are explicit and clear;
d) risk taking decisions in UBL are in line with the business strategy and objectives set by
the board;
e) the expected payoffs compensate for the risks taken; and
f) sufficient capital as a buffer is available to take risk.
The key elements of a sound risk management system should encompass the following:-
a) Risk management structure with board and senior management;
b) Organizational policies, procedures and limits that have been developed and implemented
to manage
c) business operations effectively;
d) Adequate risk identification, measurement, monitoring, control and management
information systems that are in place to support all business operations; and
e) Established internal controls and the performance of comprehensive audits to detect any
deficiencies in the internal control environment in a timely fashion.
It should not be understood that risk management is only limited to the individual(s), who are
responsible for overall risk management function. Business lines are equally responsible for the
risks they are taking. Because the line personnel can understand the risks of their activities, any
lack of accountability on their part may hinder sound and effective risk management.
BOARD
Minutes of
RMC Meeting
MRMR, CRMR
Risk Management Committee of Board
CRM Desk ALM Desk ICC Desk AML Desk ICT Desk FX Desk
To manage risk in a prudent manner UBL introduced Risk Management Guideline of the Bank
which was approved by Board vide its Board Memo No.21 dated 04/01/2017.
Uttara Bank Limited has established an independent “Risk Management Unit” on 14 September
2009 in compliance with the instruction of Bangladesh Bank, letter no. DOS (EW)
1164/14(Uttara)/2009-442 dated 10.06.2009 and it became “Risk Management Department”
through the Bank’s Information Circular Letter No. 667 dated 14.09.2009. The Risk
Management Department (RMD) manages and measures risks as per regulatory requirements in
accordance with the bank’s approved risks parameters independently. A Management-Level Risk
Management Committee (RMC) of the bank was also formed as per DOS Circular Letter No. 13
dated 09 September 2015 comprising executives of the respective Divisions/Departments headed
by the Deputy Managing Director who is called Chief Risk Officer (CRO). The committee is
looking after the implementation of integrated risk management systems of the bank. Again, The
Bank also issued an office order for designated as Head of Risk Management Department
(RMD) of the Bank.
In compliance with the sub-section (3) of section 15kha of Bank Company (Amended) Act, 2013
and the subsequent BRPD Circular No. 11 dated 27 October 2013 issued by Bangladesh Bank,
Uttara bank Limited has formed a committee named as “Risk Management Committee of the
Board” on 30 October 2013. The names & status of the members of the Risk Management
Committee are as follows:
Salient Feature of the Objectives and Responsibilities of the Risk Management Committee of the
Board are to oversee as to whether various core risks of the Bank i.e. credit risk, foreign
exchange risk, internal control & compliance risk, money laundering risk, ICT risk, operational
risk , interest rate risk, liquidity risk and other risks have been properly identified and measured
by the Bank Management and whether adequate risk management and risk mitigation systems
have been put in place by the Bank Management and whether adequate provisions and capital
have been maintained.
There are various functions in the Risk Management Department among others, the followings
are main task:
a) To prepare monthly Risk Management Report as per format provided by Bangladesh Bank;
b) To collect information from 06 (six) Core Risks or other risks related Departments/
Divisions of the Bank;
Banks face significant risk management challenges in the run-up to Basel III and other
regulation. In essence however these challenges are not far removed from core conservative
principles of banking in the key areas of capital and liquidity management and corporate
governance. In line with the Bangladesh Bank instruction Uttara Bank Limited has taken various
initiatives for strengthening risk management practices in conjunction with the business strategy
Uttara Bank Limited may include the following components in its Credit Risk Management
Framework:
Credit Risk Mitigation can be through agreements made between the bank and the borrower, or
between the bank and a third party, which lower the credit risk to the bank. The existence of
credit risk mitigation is no substitute for proper loan underwriting and loan administration.
COLLATERAL
UBL try to have as much security coverage as possible against each and every
credit facility sanctioned to the customers. Security requirement will be
determined on case to case basis based on customer’s business strength; level of
risk bank is undertaking and Banker Customer Relationship.
CREDIT ADMINISTRATION
The credit administration function is basically a back office activity that supports and controls
extension and maintenance of credit. While developing credit administration areas, UBL ensure
the following to administrate credit properly:
Monitoring documentation, contractual requirements, legal covenants, collateral, etc.
The accuracy and timeliness of information provided to management information systems.
The adequacy of control over all “back office” procedures and
compliance with prescribed management policies and procedures as well as applicable
laws and regulations
Concentration risk generally designates the risk arising from an uneven distribution of
counterparties in credit or any other business relationships or from a concentration in business
sectors or geographical regions which is capable of generating losses large enough to jeopardize
an institution’s solvency.
Concentration risk arises when any bank invests its most or all of the assets to single or few
individuals or entities or sectors or instruments. Downturn in concentrated activities and/or areas
may cause huge losses to a bank relative to its capital and can threaten the bank’s health or
ability to maintain its core operations.
For Small and Medium Enterprises (SMEs), financing > BDT 2.5 million
For Corporate, financing > BDT 10 million. and
For real estate financing > BDT 10 million.
Foreign exchange risk is the risk that a business’s financial performance or position will be
affected by fluctuations in the exchange rates between currencies. The risk is most acute for
businesses that deal in more than one currency.
Foreign exchange risk is the risk of an investment's value changing due to changes in
currency exchange rates. Foreign exchange risk is the risk that an investor will have to close out a
long or short position in a foreign currency at a loss due to an adverse movement in exchange rates.
Value at Risk (VaR) is generally accepted and widely used tool for measuring market risk inherent
in trading portfolios. VaR summarizes the predicted maximum loss (or worst loss) over a target
horizon within a given confidence level. Generally there are three methods of computing VaR:
RISK MONITORING
An effective monitoring process is essential for adequately managing operational risk. Regular
monitoring activities can offer the advantage of quickly detecting and correcting deficiencies in
the policies, processes and procedures for managing operational risk. Promptly detecting and
addressing these deficiencies can substantially reduce the potential frequency and/or severity of a
loss event. The personals, involve in operational risk, report regular to senior management and
the board that supports the proactive management of operational risk.
Senior management established a program to:
a) Monitor assessment of the exposure to all types of operational risk faced by the bank;
b) Assess the quality and appropriateness of mitigating actions, including the extent to which
identifiable risks can be transferred outside the bank; and
c) Ensure that adequate controls and systems are in place to identify and address problems
before they become major concerns.
RISK CONTROL
Operational risks are analyzed through review of
Departmental Control Function Check List (DCFCL)
Quarterly Operation Report
Loan Document Checklist
Reporting of operational functions of each branch / office under the following heads on the
enclosed format:
Policies, procedures and Controls Protection of Valuables
Proofs/ Verifications and Internal Checks Personnel and Supervision
Premises Management and Confirmation on Regulatory Compliance
The checklist deals with matters relating to security documentation for sanctioning and draw
down credit facilities to ensure that prescribed charge documents and required securities are
being obtained as per sanction terms to safe guard Bank’s interest.
The check list is prepared in duplicate by the branch in the prescribed format. one copy of the
same is sent to the Head of compliance Department for review and another copy be retained with
the branch for their record and also for future inspection by Audit Team.
Liquidity risk is the risk that a company or bank may be unable to meet short term financial
demands. This usually occurs due to the inability to convert a security or hard asset to cash
without a loss of capital and/or income in the process.
There are three alternative strategies to manage the Liquidity Risk which are as follows:
a) Asset Liquidity Management Policy
b) Liability Management Policy
c) Balance Liquidity Management Policy
Responsibility of managing and controlling liquidity of the bank lies with Asset Liability
Committee (ALCO) and the committee meets at least once in every month. Asset and Liability
Management (ALM) Department of the Treasury Division closely monitors and controls
liquidity requirements on a daily basis by appropriate coordination of funding activities and they
are primarily responsible for management of liquidity in the bank. Asset & Liability
Management Department has developed own customized ALM Risk ranking Model to measure
ALM Risk periodically. This Model has been ratified by the Board of Directors in its meeting
held on 16.07.2014 vide Board Memorandum No. 234, dated 13.07.2014
Moreover, this model has been submitted to Bangladesh Bank as the part of ICAAP
Supplementary Documents and ICAAP reporting. ALM Department performs the following
activities to minimize the Liquidity Risk-
Maintenance of CRR and SLR.
Investment in Treasury Bills/Bond Portfolio.
Repo/Reverse Repo activities.
Propose to the ALCO (through the head of treasury) of statutory investments.
An effective internal control system continually recognizes and assesses all of the
material risks that could adversely affect the achievement of the Bank's goals.
Effective risk assessment must identify and consider both internal and external factors"
Internal factors include complexity of the organization structure, the nature of the bank's
activities, the quality of personnel, organization changes and also employee turnover.
External factors include fluctuating economic conditions, changes in the industry, socio-
political realities and technological advances.
Risk assessment by Internal Control System differs from the business risk management
process which typically focuses more on the review of business strategies developed to
maximize the risk/ reward trade off within the different areas of the bank. The risk
assessment by Internal Control focuses more on compliance with regulatory
requirements, social, ethical and environmental risks those affect the banking industry.
With the increasing use of Information and Communication Technology in the activities of the
Banks, the system of Information and Communication Technology risk management has become
important. The process deals with finding out the weakness in a particular operation and the
using most suitable strategy to deal with it.
A risk is the act of violating an explicit or implied security policy. The following actions can be
classified as incidents:
RISK IDENTIFICATION
Users and System Administrator follow these policies in identifying a risk:
Abnormal system resource usage: If the CPU, memory utilization on a system is very high,
the system could have been compromised. Attackers use compromised systems for spreading
viruses or attacking other machines leading to high resource utilization. System
Administrator tracks resource utilization and analyze reasons for any abnormal usage.
Users experience slow response: End users could experience slow response times if the
application servers or the network has been compromised and is being used for malicious
purposes. Virus or worm outbreak could lead to network congestion that would in-turn
cause application responses to be slow and unstable. End users report any drastic drop in
application response or system stability to System Administrator.
RISK PREVENTION
Risk handling process is to conduct a detailed analysis to identify the strong and weak points in
the existing ICT infrastructure and policies. If needed, ICT Division recommends for necessary
changes to security policies, standards and procedures. If any immediate steps need to be taken
to prevent re-occurrence of risk, the same are communicated to all relevant personnel by ICT
Division. ICT Division maintains a database of risks and solutions. This helps in providing
quicker solutions if the same or similar risk happens again. Based on the learning from the risk,
ICT Division recommends to the Management of the Bank for procuring additional security
services and solutions (if required) for improving security. Moreover,
To minimize and control the IT risk, our Bank has strengthened ICT Security
infrastructure, develop Business Continuity Plan (BCP).
The BCP is formulated to cover operational risks and taking into account the potential for
wide area disaster, data centre disaster and the recovery plan. The BCP takes into account
the backup and recovery process.
To comply with the ICT guideline of Bangladesh Bank, an independent audit team has
been formed under Internal Control & Compliance Division.
RISK RECOVERY
Depending on the nature of the risk and based on the action plan drawn up by ICT Division, all
system personnel and security professionals recover the risk. Recovery involves identifying and
eliminating the cause of the risk. This could involve a series of activities including implementing
additional security controls, installation of new patches, recovery of systems backups, and
reconfiguration of security devices including Firewall rule base and intrusion detection system alerts.
Stress testing is a simulation technique, which is used to determine the reactions of different
financial institutions under a set of exceptional, but plausible assumptions through a series of
a) Simple Sensitivity Analysis (single factor tests) measures the change in the value of
portfolio for shocks of various degrees to different independent risk factors while the
underlying relationships among the risk factors are not considered.
b) Scenario Analysis encompasses the situation where a change in one risk factor affects a
number of other risk factors or there is a simultaneous move in a group of risk factors.
Scenarios can be designed to encompass both movements in a group of risk factors and
the changes in the underlying relationships between these variables (for example
correlations and volatilities).
c) Extreme Value/ Maximum Shock Scenario measure the change in the risk factor in the
worst-case scenario, i.e. the level of shock which entirely wipes out the capital.
Dated: Dhaka Shafiq Basak & Co. RAHMAN MOSTAFA ALAM & Co.
12 April 2017 Chartered Accountants Chartered Accountants
Amount in Taka
Notes
2016 2015
Other Commitments
Documentary credits and short term
trade-related transactions - -
Forward assets purchased and forward
deposits placed - -
Undrawn note issuance and revolving
underwriting facilities - -
Undrawn formal standby facilities,
credit lines and other commitments - -
- -
(Mohammed Rabiul Hossain) (Abul Barq Alvi) (Dr. Md. Rezaul Karim Mazumder) (Faruque Alamgir)
Managing Director Director Director Director
Dated: Dhaka Shafiq Basak & Co. Rahman Mostafa Alam & Co.
12 April 2017 Chartered Accountants Chartered Accountants
Amount in Taka
Notes
2016 2015
OPERATING INCOME
Interest Income 19.01.a 9,308,710,642 9,380,957,653
Interest paid on deposits and borrowings etc. 20.00.a 5,838,523,400 6,471,137,578
Net Interest Income 3,470,187,242 2,909,820,075
Investment Income 21.00.a 4,095,371,135 4,679,945,781
Commission, Exchange and Brokerage 22.00.a 776,283,236 740,820,440
Other Operating Income 23.00.a 564,720,413 528,786,970
Total operating income 8,906,562,026 8,859,373,266
OPERATING EXPENSES
Salary and allowances 24.00.a 4,270,352,918 3,285,006,064
Rent, taxes, insurance, electricity etc. 25.00.a 426,456,457 407,792,734
Legal expenses 26.00.a 22,984,646 23,224,538
Postage, stamp, telecommunication etc. 27.00.a 96,805,072 109,271,399
Stationery, printing, advertisements etc. 28.00.a 99,232,770 101,251,828
Managing Director's salary & allowances and fees 29.00 13,584,887 14,843,180
Directors' fees 30.00.a 4,038,000 2,598,000
Auditors' fees 31.00.a 525,000 525,000
Charges on Loan losses 799,658,345 305,587,442
Repair, maintenance and depreciation
of Bank's property 32.00.a 343,988,797 340,540,601
Other expenses 33.00.a 303,333,521 277,752,139
Total operating expenses 6,380,960,413 4,868,392,925
Provision
Provision for loans & advances & off balance sheet
exposures 34.00 480,000,000 1,450,000,000
Provision for diminution in value of investments 3,761,053 -
Provision for others 35.00 - 6,084,750
483,761,053 1,456,084,750
Profit before tax 2,041,840,560 2,534,895,591
Provision for Taxation
Current tax 13.01.01.a 511,679,410 1,109,179,952
Deferred tax 13.02.1 (13,552,867) (86,261,435)
498,126,543 1,022,918,517
Profit after taxation 1,543,714,017 1,511,977,074
Non controlling interest 778 547
Profit after taxation without non controlling interest 1,543,713,239 1,511,976,527
Retained earning brought forward 17.00.a.1 109,300,416 97,484,563
Profit available for appropriation 1,653,013,655 1,609,461,090
Appropriations
Statutory reserve 15.00 - 300,000,000
General reserve - -
- 300,000,000
Retained surplus 17.00.a 1,653,013,655 1,309,461,090
Earnings Per Share (EPS) 40.00.a 3.86 3.78
Accompanying notes 1 to 44 form an integral part of these financial statements.
(Mohammed Rabiul Hossain) (Abul Barq Alvi) (Dr. Md. Rezaul Karim Mazumder) (Faruque Alamgir)
Managing Director Director Director Director
Signed in terms of our separate report of even date.
Dated: Dhaka Shafiq Basak & Co. Rahman Mostafa Alam & Co.
12 April 2017 Chartered Accountants Chartered Accountants
Amount in Taka
Notes
2016 2015
A. Cash flows from operating activities
Interest receipts in cash 13,200,765,640 14,219,256,441
Interest payments (6,066,523,489) (6,681,577,348)
Dividend receipts 95,889,799 81,249,554
Fees and commission receipts in cash 776,283,236 740,938,635
Cash payments to employees (4,213,915,381) (3,269,849,244)
Cash payments to suppliers (577,964,063) (708,772,746)
Income tax paid (581,866,207) (773,159,910)
Receipts from other operating activities 561,930,155 528,931,934
Payments for other operating activities 36.00.a (1,131,572,282) (605,544,541)
Operating cash flow before changes in operating 2,063,027,408 3,531,472,775
assets and liabilities
Increase/(decrease) in operating assets and liabilities
Purchase/sale of trading securities 3,443,382,998 7,462,162,239
Loans and advances to other banks 200,000,000 260,000,000
Loans and advances to customers (7,805,579,310) (2,846,787,527)
Other assets 37.00.a 182,277,535 (466,707,762)
Deposits from other Banks 114,477,986 90,564,475
Deposits from customers 12,757,668,995 8,552,452,475
Other liabilities account of customers - -
Other liabilities 38.00.a (1,093,953,969) (440,003,675)
7,798,274,235 12,611,680,225
Net cash received from/(used in) operating activities 9,861,301,643 16,143,153,000
B. Cash flows from investing activities
Proceeds from sale/payments for purchase of securities 6,185,077,821 (6,010,831,538)
Purchase of property, plants and equipments (175,656,366) (253,285,741)
Sale of property, plants and equipments 3,911,748 2,410,135
Net cash received from/(used in) investing activities 6,013,333,203 (6,261,707,144)
C. Cash flows from financing activities
Receipts from issue of loan capital and debt securities - -
Payments for redemption of loan capital and debt securities - -
Receipts from issue of ordinary share - -
Dividend paid (705,590,267) (692,301,317)
Net cash received from/(used in) financing activities (705,590,267) (692,301,317)
D. Net Increase/ (decrease) in cash and cash equivalents (A+B+C) 15,169,044,579 9,189,144,539
E. Effects of exchange rate changes on cash and cash equivalents - -
F. Opening cash and cash equivalents 20,902,816,984 11,713,672,445
G. Closing cash and cash equivalents (D+E+F) 39.00.a 36,071,861,563 20,902,816,984
Closing Cash and cash equivalents -
Cash in hand (including foreign currencies ) 2,527,838,471 2,563,655,628
Bal. with Bangladesh Bank & its agent Banks (including foreign currencies) 10,241,301,021 9,891,998,568
Balance with other banks and financial institutions 23,302,722,071 8,447,162,788
36,071,861,563 20,902,816,984
(Mohammed Rabiul Hossain) (Abul Barq Alvi) (Dr. Md. Rezaul Karim Mazumder) (Faruque Alamgir)
Managing Director Director Director Director
CAPITAL/SHAREHOLDERS' EQUITY
Paid up capital 14.02 4,000,803,370 4,000,803,370
Statutory reserve 15.00 4,330,837,039 4,330,837,039
Other reserves 16.00 3,424,854,257 3,560,849,046
Surplus in profit and loss account 17.00 1,594,311,652 1,263,724,909
Amount in Taka
Notes
2016 2015
Other Commitments
Documentary credits and short term
trade-related transactions - -
Forward assets purchased and forward
deposits placed - -
Undrawn note issuance and revolving
underwriting facilities - -
Undrawn formal standby facilities,
credit lines and other commitments - -
- -
(Mohammed Rabiul Hossain) (Abul Barq Alvi) (Dr. Md. Rezaul Karim Mazumder) (Faruque Alamgir)
Managing Director Director Director Director
Dated: Dhaka Shafiq Basak & Co. Rahman Mostafa Alam & Co.
12 April 2017 Chartered Accountants Chartered Accountants
(Mohammed Rabiul Hossain) (Abul Barq Alvi) (Dr. Md. Rezaul Karim Mazumder) (Faruque Alamgir)
Managing Director Director Director Director
Signed in terms of our separate report of even date.
Dated: Dhaka Shafiq Basak & Co. Rahman Mostafa Alam & Co.
12 April 2017 Chartered Accountants Chartered Accountants
Amount in Taka
Notes
2016 2015
A. Cash flows from operating activities
Interest receipts in cash 13,190,071,680 14,219,203,250
Interest payments (6,079,062,355) (6,704,449,903)
Dividend receipts 87,695,558 81,249,554
Fees and commission receipts in cash 772,266,054 740,320,696
Cash payments to employees (4,208,731,327) (3,266,090,855)
Cash payments to suppliers (577,223,600) (707,816,723)
Income tax paid (575,467,888) (766,635,215)
Receipts from other operating activities 564,469,300 530,973,488
Payments for other operating activities 36.00 (1,130,314,059) (604,572,856)
Operating cash flow before changes in operating assets and liabilities 2,043,703,363 3,522,181,436
Increase/(decrease) in operating assets and liabilities
Purchase/sale of trading securities 3,443,382,998 7,462,162,239
Loans and advances to other banks 200,000,000 260,000,000
Loans and advances to customers (7,805,579,310) (2,846,787,527)
Other assets 37.00 199,137,444 (465,866,211)
Deposits from other Banks 114,477,986 90,564,475
Deposits from customers 12,658,895,415 8,550,031,506
Other liabilities account of customers - -
Other liabilities 38.00 (1,119,224,765) (441,765,961)
7,691,089,768 12,608,338,521
Net cash received from/(used in) operating activities 9,734,793,131 16,130,519,957
B. Cash flows from investing activities
Proceeds from sale/payments for purchase of securities 6,278,913,774 (6,010,831,538)
Purchase of property, plants and equipments (174,456,366) (242,668,261)
Sale of property, plants and equipments 3,911,748 2,410,136
Net cash received from/(used in) investing activities 6,108,369,156 (6,251,089,663)
C. Cash flows from financing activities
Receipts from issue of loan capital and debt securities - -
Payments for redemption of loan capital and debt securities - -
Receipts from issue of ordinary share - -
Dividend paid (705,590,267) (692,301,317)
Net cash received from/(used in) financing activities (705,590,267) (692,301,317)
D. Net Increase/(decrease) in cash & cash equivalents (A+B+C) 15,137,572,020 9,187,128,977
E. Effects of exchange rate changes on cash and cash equivalents - -
F. Opening cash and cash equivalents 20,900,291,187 11,713,162,210
G. Closing cash and cash equivalents (D+E+F) 39.00 36,037,863,207 20,900,291,187
Closing Cash and cash equivalents
Cash in hand (including foreign currencies ) 2,527,826,851 2,563,631,973
Bal. with Bangladesh Bank & its agent Bank(s) (including foreign currencies) 10,241,301,021 9,891,998,568
Balance with other banks and financial institutions 23,268,735,335 8,444,660,646
36,037,863,207 20,900,291,187
(Mohammed Rabiul Hossain) (Abul Barq Alvi) (Dr. Md. Rezaul Karim Mazumder) (Faruque Alamgir)
Managing Director Director Director Director
The focus of International Division with its expertise caters mainly to the Banking needs
related to import and export affairs. The department establishes correspondent relationships
with the foreign banks in consultation with the respective senior management.
The Bank follows the guidelines stated in BRPD Circular No.14 dated 23 October 2005
regarding “Guideline on Information and Communication Technology for Scheduled Banks”.
No transactions entered into by the company during the year which are fraudulent, illegal
or in violation of the company’s code of conduct and there was no administrative error
and exception or anything detrimental committed by employees of the bank.
3.03.1 Subsidiaries
UB Capital and Investment Limited and Uttara Bank Securities Limited are the
Subsidiaries of the Bank. 99.994% shares of the subsidiaries are owned by the Bank.
A subsidiary is an enterprise which is controlled by the Bank. Control exists when the
Bank has the power, directly or indirectly, to govern the financial and operating policies
of an enterprise from the date of commencement of control until the date that control
ceases. The financial statements of the subsidiaries are included in the consolidated
financial statements from the date that control effectively commences until the date that
the control effectively ceases.
3.07.2 Investment
Investments have been initially recognized at cost, including acquisition charges
associated with the investment. Premiums have been amortized and discount accredited,
using the effective or historical yield method. Government Treasury Bills and Bonds
(categorized as HFT or/and HTM) are accounted for as per Bangladesh Bank DOS
circular letter no.05 dated 26 May 2008 and DOS circular no. 05 dated 28 January 2009.
The valuation methods of investment used are:
Government Securities
Held to Maturity (HTM)
Investments which are intended to be held to maturity are classified as “Held to
Maturity”. These are measured at amortized cost at each year end by taking into account
any discount or premium in acquisition. Amortised amount of such premium are booked
into Profit and Loss Account or discount is booked to reserve until maturity/disposal.
Investment in Subsidiaries
Investments in subsidiaries are accounted for under the cost method of accounting in the
Bank’s financial statements in accordance with the BFRS 10: Consolidated Financial
Statements and BFRS 3: Business Combination.
(c) Depreciation at applicable rates is charged on additions to fixed assets from the
month of acquisition of the asset (full month).
(d) Upon sale or retirement of any item of fixed assets, depreciation is charged up to
the month of disposal or retirement, the net book value is eliminated from
accounts and any resulting gain or loss is transferred to profit and loss account.
(e) Basis of revaluation of land and building
Revaluation of the land and building was done in 2010 by an independent valuer,
Jorip O Paridarshan Company Limited by taking into consideration of the
location, configuration, means of communication, size of land, mouza rate,
prevailing market rate, etc.
3.07.6 Leasing
Leases are classified as finance leases whenever ‘the terms of the lease transfer
substantially all the risk and rewards of ownership to the lessee as per BAS-17 “Lease”.
The Bank has finance lease under its credit portfolio. Amount disbursed to lessees under
finance lease are recorded as lease finance and shown along with loans and advances. At
present interest is charged on the leased amount on monthly basis.
Deferred tax is recognized, using the liability method on temporary differences between
the carrying amount of assets and liabilities in the balance sheet and the amount
attributed to such assets and liabilities for tax purposes. Deferred tax liabilities are
generally recognized for all taxable temporary differences and deferred tax assets are
recognized to the extent it is probable that future taxable profits will be available
against which deductible temporary differences unused tax loss and unused tax credit
can be utilized. The tax rate (40%) prevailing at the balance sheet date is used to
determine deferred tax.
3.21 Off Balance Sheet Items, Commitments & Contingencies and Provision
Under general banking transactions, liabilities against acceptance, endorsement and other
obligations and bills against which acceptance has been given and claim exists
thereagainst, have been shown as off balance sheet items as per BAS-37.
Various outstanding liabilities for acceptances, endorsements etc. in the normal course of
business are reflected in these accounts as per contra items to keep an accounting control
on the outstanding bills.
General Provision @ 1% against Off Balance Sheet Exposures has been made on the basis of
year end review by the management and instructions contained in Bangladesh Bank BRPD
circular No.10 and 14 dated 18 November 2007 and 23 September 2012 respectively.
3.25.1 Name of the Directors and the entities in which they have interest as on 31.12.2016:
Percentage of
SL Status with Name of the entities in which the Status with the holding/Tk
Name
No. the Bank Directors have interest entities interest
in the entities
01 Mr. Azharul Islam Chairman 1 Milnars Pumps Ltd. Executive Chairman Representing
Sea Trade
Fertilizer Ltd.
and Aftab
Fertilizers &
Chemicals Ltd.
2 Aftab Fertilizers & Chemicals Ltd. Executive Chairman 11.15%
3 Sea Trade Fertilizer Ltd. Executive Chairman 45%
4 Aftab CNG Ltd. Executive Chairman 0.40%
5 Aftab Group of Industries Ltd. Executive Chairman Representing
Sea Trade
Fertilizer Ltd.,
Aftab
Fertilizers &
Chemicals Ltd.
and Aftab
Foods Ltd.
Lease agreement Tenancy of portion 1. Mr. Azharul Islam, Chairman of Uttara Lease period-6
with Aftab of 4th floor space at Bank Ltd. (Executive Chairman of (six) years w.e.f
Fertilizers & Head Office Aftab Fertilizers & Chemicals Ltd.) 01.07.2012 to
Chemicals Ltd. Building, 47, Shahid 30.06.2018. The
Bir Uttam Asfaqus rent will be
Samad Sarak 2. Mr. Iftekharul Islam, Vice Chairman of refixed after every
(formerly 90, Uttara Bank Ltd. (Chairman & 02 (two) years.
Managing Director of Aftab Fertilizers
Motijheel C/A),
& Chemicals Ltd.)
Dhaka
Lease agreement Tenancy of portion 1. Mr. Azharul Islam, Chairman of Uttara Lease period-6
with Sea Trade of 5th floor space at Bank Ltd. (Executive Chairman of Sea (six) years w.e.f
Fertilizer Ltd. Head Office Trade Fertilizer Ltd.) 15.02.2012 to
Building, 47, Shahid 14.02.2018. The
Bir Uttam Asfaqus rent will be
Samad Sarak 2. Mr. Iftekharul Islam, Vice Chairman of refixed after every
(formerly 90, Uttara Bank Ltd. (Chairman & 02(two) years.
Managing Director of Sea Trade
Motijheel C/A),
Fertilizer Ltd.)
Dhaka
Lease agreement Tenancy of portion 1. Mr. Azharul Islam, Chairman of Uttara Lease period-6
with Milnars of 5th floor space at Bank Ltd. ( Executive Chairman of (six) years w.e.f
Pumps Limited Head Office Milnars Pumps Limited.) 15.02.2012 to
Building, 47, Shahid 14.02.2018. The
Bir Uttam Asfaqus rent will be
Samad Sarak 2. Mr. Iftekharul Islam, Vice Chairman of refixed after every
(formerly 90, Uttara Bank Ltd. (Chairman and 02 (two) years.
Managing Director of Milnars Pumps
Motijheel C/A),
Limited)
Dhaka
Mr. Azharul
Islam
Islam
Brothers
(Chairman of Term Loan 125,977,266.00 15,000.00 25,500,000.00 100,492,266.00
Properties
the Bank) as
Ltd.
Guarantor
Aftab
Fertilizers and Chairman and
Office Rent - 5,056,177.00 - 5,056,177.00
Chemicals Vice-Chairman
Ltd.
Milnars
Chairman and
Pumps Office Rent - 4,940,413.00 - 4,940,413.00
Vice-Chairman
Limited
UB Capital
and Subsidiary
Office Rent - 14,41,440.00 14,41,440.00 -
Investment Company
Ltd.
Uttara Bank
Subsidiary
Securities Office Rent 11,70,000.00 11,70,000.00 -
Company -
Ltd.
3.26.1 Loans and advances to directors and their related concern (Note - 8.05)
3.26.2 Business other than banking business with any related concern of the directors as
per Section 18(2) of the
Bank companies Act, 1991 (amended up to 2013). (Note- 3.25.4)
(d) The Securities and Exchange Rules 1987 and the Bangladesh Securities and
Exchange Commission (Public Issue) Rules 2006.
3.28 General
(a) Figures appearing in these financial statements have been rounded off to the
nearest Taka.
(b) The expenses, irrespective of capital or revenue nature, accrued but not paid have
been provided for in the books of accounts of the Bank.
(c) Previous year's figures have been re-arranged in order to conform to current year's
presentation.
(d) The accounting policy has been followed consistently throughout the year.
(e) No Asset has been offset against any liability except UBL General Account.
4.03 Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in
accordance with section 33 of the Bank Companies Act 1991, MPD circular no. 02 & 01 dated 10.12.2013
& 23.06.2014, DOS circular no. 01 dated 19.01.2014.
5.05 Maturity grouping of Balance with other Banks and financial institutions
In Bangladesh
Repayable on demand 74,014,195 44,670,000
Upto 1 month 10,308,382,100 5,435,720,000
Over 1 month but not more than 3 months 12,400,000,000 2,250,000,000
Over 3 months but not more than 1 year - -
Over 1 year but not more than 5 years - -
Over 5 years 21,300,000 25,300,000
22,803,696,295 7,755,690,000
Outside Bangladesh
Repayable on demand 465,039,040 688,970,646
23,268,735,335 8,444,660,646
6.00 Money at call on short notice
With Banks - -
With financial institutions - 200,000,000
- 200,000,000
7.00 Investments
Investments in Securities
Treasury Bills (Note- 7.01) 230,114,764 1,508,352,489
Government Treasury Bonds (Note- 7.02) 28,967,498,955 32,701,941,581
Prize Bond 8,781,000 14,803,420
Bangladesh Bank Bills - 5,783,478,000
29,206,394,719 40,008,575,490
Other Investments
Shares and Debentures of ICB sponsored companies (Note- 7.03) 6,618,663 6,734,663
Shares of Companies (Note-7.04) 317,893,060 317,893,060
Reverse Repo with Bangladesh Bank - -
Subordinated bond 1,380,000,000 900,000,000
Commercial Paper 700,000,000 100,000,000
Others (Note- 7.05) 3,380,583 3,380,583
2,407,892,306 1,328,008,306
31,614,287,025 41,336,583,796
Investment in Securities are classified
according to Bangladesh Bank Circular
Held for trading 7,046,637,893 10,490,020,890
Held to maturity 22,046,368,826 29,355,132,180
Other securities 2,521,280,306 1,491,430,726
31,614,287,025 41,336,583,796
7.00.a Consolidated Investments
Uttara Bank Limited 31,614,287,025 41,336,583,796
Uttara Bank Securities Limited 93,835,952 -
UB Capital & Investment Limited - -
31,708,122,977 41,336,583,796
Face
Name of company No.of Average Cost Book value Book value
value
(Un-quoted) Share (Taka) 2016 2015
(Taka)
Karmasangsthan Bank 100,000 100.00 100.00 10,000,000 10,000,000
Central Depository
571,181 10.00 2.75 1,569,450 1,569,450
Bangladesh Ltd.
Industrial Promotion
25,000 10.00 10.00 250,000 250,000
Services Ltd.
Calico Cotton Mills Ltd. 25,011 10.00 10.00 250,110 250,110
MSF A.M. Co. Ltd. 200,000 10.00 10.00 2,000,000 2,000,000
B 921,192 14,069,560 14,069,560
A+B 40,297,007 317,893,060 317,893,060
83,311,088,400 75,806,888,472
8.01 Net loans and advances
Total loans and advances 83,311,088,400 75,806,888,472
Interest suspense (Note-13.09 ) (1,166,917,430) (1,137,152,503)
Provision for loans and advances (Note-13.03) (1,990,636,184) (1,782,176,696)
Net loans and advances 80,153,534,786 72,887,559,273
8.02 Lease finance
Lease finance receivable within 1 year 98,285,129 113,763,550
Lease finance receivable within 5 years 152,393,020 233,278,090
Lease finance receivable after 5 years - -
Total Lease rental receivable 250,678,149 347,041,640
Less: Unearned income on lease finance (41,740,056) (54,545,005)
208,938,093 292,496,635
8.03 Maturity grouping of loans & advances including bills purchased and discounted
i) Loans and Advances
Receivable on Demand - -
Upto 1 month 14,414,818,650 12,851,603,247
Over 1 month but not more than 3 months 10,024,091,480 5,084,407,543
Over 3 months but not more than 1 year 37,418,592,320 33,709,619,236
Over 1 year but not more than 5 years 12,235,587,799 14,518,253,057
Over 5 years 6,587,711,548 6,935,850,460
80,680,801,797 73,099,733,543
ii) Bills purchased and discounted
Payable within 1 month 50,057 50,057
Over 1 month but not more than 3 months 2,630,236,546 2,707,104,872
Over 3 months but not more than 6 months - -
6 months or more - -
2,630,286,603 2,707,154,929
83,311,088,400 75,806,888,472
8.09 Sector wise loans & advances including bills purchased and discounted
In Bangladesh
Government & Autonomous bodies 10,976,282 10,598,000
Financial Institutions 4,661,407,666 6,658,270,384
Private Sector 78,638,704,452 69,138,020,088
83,311,088,400 75,806,888,472
Outside Bangladesh - -
83,311,088,400 75,806,888,472
8.11 Loans and advances allowed to each customer exceeding 10% of Bank's total Capital
Number of clients with amount of outstanding and classified loan to whom loans & advances
sanctioned exceeding 10% of total capital of the Bank. Total capital of the Bank was
Tk.1,205.93 crore at 31.12.2015 ( 2014 : Tk. 1,149.33 crore).
Number of clients 10 9
Amount of outstanding advances 14,695,696,412 14,289,606,710
Amount of classified advances - -
(Details are given in Annexure - B)
8.12 Classification of loans & advances including bills as per Bangladesh Bank circular
Unclassified (including staff loan)
Standard (Including staff loan) 75,682,481,400 68,607,525,168
Special mentioned account 1,170,583,000 926,775,949
76,853,064,400 69,534,301,117
Classified loans & advances
Sub-Standard 669,963,000 1,025,050,991
Doubtful 632,023,000 622,929,058
Bad or loss 5,156,038,000 4,624,607,306
6,458,024,000 6,272,587,355
83,311,088,400 75,806,888,472
31-Dec-16 31-Dec-15
Name of the Directors Status
No. of No. of
Amount Amount
Shares Shares
Vice-
Mr. Iftekharul Islam 11,952,323 119,523,230 11,952,323 119,523,230
Chairman
Independent
Dr. Md. Nazmul Karim Chowdhury - - - -
Director
Mr. M. Tajul Islam Director 19,870 198,700 19,870 198,700
Independent
Mr. Md. Kamal Akhtar - - - -
Director
Independent
Dr. Md. Rezaul Karim Mazumder - - - -
Director
Col. Engr. M.S. Kamal (Retd.) Director 40,074 400,740 40,074 400,740
Managing
Mr.Mohammed Rabiul Hossain - - - -
Director
41.00 Restatements
Whereever considered necessary previous year's figures have been rearranged for the
purpose of comparison with current period’s presentation without any impact on the
profit and value of assets and liabilities as reported in the financial statements.
42.00 Workers Profit Participation Fund (WPPF)
Consistent with industry practice and in line with section 11(1) of the Bank Company Act
1991 (amendment upto 2013), no provsion has been made by the Bank in the reporting
period against Workers Profit Participation Fund (WPPF).
43.00 Events after the Balance Sheet date
The Board of Directors of the Bank in its 637 th Meeting held on 12 April 2017 has
recommended Cash Dividend @ 20% per ordinary share (i.e. Tk. 2 against each ordinary
shares of Tk. 10) on the holding of shares on the record date 4 May 2017 for the year
2016. The amount of recommended cash dividend is Tk. 800,160,674.
44.00 Approval of Financial Statements
The Financial Statements were approved by the Board of Directors in its 611th meeting
held on 12 April 2017.
(Mohammed Rabiul Hossain) (Abul Barq Alvi) (Dr. Md. Rezaul Karim Mazumder) (Faruque Alamgir)
Managing Director Director Director Director
of
2016 2015
Notes
USD BDT USD BDT
Contingent Liabilities
Acceptances & Endorsements - - - -
Letters of Guarantee - - - -
Irrevocable Letters of Credit - - - -
Bills for Collection - - - -
Other Contingent Liabilities - - - -
- - - -
Other Commitments
Documentary credits and short term
trade related transactions - - - -
Forward assets purchased and forward
deposits placed - - - -
Undrawn note issuance and revolving
underwriting facilities - - - -
Undrawn formal standby facilities,
credit lines and other commitments - - - -
Total Other Commitments - - - -
Total Off-Balance Sheet Items
(Including Contingent Liabilities &
Othr Commitments) - - - -
2016 2015
Notes
USD BDT USD BDT
Operating income
Interest income 8.00 316,307 24,894,078 30,143 2,349,620
Interest paid on deposits and
borrowings etc. 9.00 175,188 13,787,662 12,976 1,012,704
Net interest income 141,119 11,106,416 17,167 1,336,916
Investment income - - - -
Commission, exchange and
brokerage 10.00 8,335 655,971 1,516 118,195
Other operating income 11.00 15,141 1,191,617 1,752 137,496
Total operating income 164,595 12,954,004 20,435 1,592,607
Operating expenses
Salary and allowances 20,396 1,605,180 - -
Rent, taxes, insurance, electricity etc. 1,494 117,600 - -
Legal expenses - - - -
Postage, stamp, telecommunication etc. 51 4,000 - -
Stationery, Printings, Advertisements etc. 102 8,000 - -
Chief Executive's salary and fees - - - -
Directors' fees - - - -
Auditors' fees - - - -
Charges on loan losses - - - -
Depreciation and repair of bank's assets - - - -
Other expenses - - 155 12,071
Total operating expenses 22,043 1,734,780 155 12,071
Profit before provision 142,552 11,219,224 20,280 1,580,536
2016 2015
Notes
USD BDT USD BDT
Employees:
The Bank’s business is dynamic and growing. This dynamism and growth comes from its skilled
and experienced human resources that can be found at every level of the organization. Bank
offers its employees handsome service benefits by way of Contributory Provident Fund,
Benevolent Fund, Gratuity and Superannuation benefits. The employees follow the ethical and
other codes of conduct as embodied in the Service Rules and Regulations of the Bank. Besides,
Bank operates benevolent fund for the benefit of its permanent employees.
Customers:
Bank discharges banking business responsibility by offering financial products and services that
truly meet customers' needs. The Bank looks upon the customers as its partners in business and
sincerely endeavours to improve its relationship with them for mutual benefits.
Shareholders:
Bank is fully committed to protect the interest of its shareholders. It releases enough disclosures for
the information of the shareholders in the Annual Report, half-yearly financial statements, the print
and electronic media and in the Bank’s web site. Since its inception, the Bank has paid good
dividends to the shareholders. Mentionable here that the bank has recommended a cash dividend @
20.00% per ordinary share i.e. a total amount of Tk 80,01,60,674.00 for the year 2016.
Regulators:
Bank firmly believes that it is imperative to comply with the relevant laws, rules and regulations
of all regulatory authorities to be a responsible corporate citizen. The Bank’s business practices
are transparent and are appreciated by the regulators. The Bank operates cautiously observing the
anti money laundering practices.
National Economy:
Bank has directly employed 3,667 people in the service of the Bank and has also generated
employments for thousands of men and women in the projects and industrial ventures established
with our finance. Bank is contributing handsome amounts to the national exchequer as corporate
tax, vat, excise duty, etc.
Environment:
Bank conducts business in a manner which seeks to prevent, or minimize the possibility of ours
operations causing harm to people, plants or animals through imposing conditions and closely
monitoring loan sanction and other financial benefits. We are quite concerned about how projects
financed by the Bank are impacting the environment. Participating in the programme of
beautification of Dhaka City the Bank financed in the sculpture of national bird “Doel” which is
known as “Doel Square” in front of Karzon Hall of Dhaka University.
The Bank conducted following CSR activities in the year 2016.
(Amount in Taka)
Sl. Sector CSR activities in the year 2016 Expenditure
No. incurred
01. Disaster Financial assistance to martyred army officers family killed in 2,38,25,000.00
Management BDR carnage, flood affected people of Jamalpur district, Prime
Ministers Relief and Welfare Fund and blankets to cold
affected people in winter.
02. Arts & Bank donated to “Doel Square” in front of Karzon Hall of 37,31,050.00
Culture Dhaka University for beautification and full functioning of
Doel Foara, installation of CC Camera in Sir Iqbal Road
Branch, Khulna and E-town project of Moulvibazar.
03. Treatment Bank donated to different patients for treatment and helped 3,54,519.00
building of cash counter and lobby for Children & Women of a
Cardiac Hospital.
04. Education Bank donated to a Residential Blind Girls School, Faridpur for 25,000.00
setting up of Computer over same.
05. Sports Bank donated to Chandpur District Sports Association for 10,000.00
promotion of national games & sports in Bangladesh and
enriching the sports to a remarkable position in international level.
06. Other Bank paid for establishment of Child Day Centre for the 4,52,200.00
Officials of Private Banks whose Head Office are situated at
Motijheel area, Dhaka and Cycle distribution to the inhabitants
of recently abolished 04 enclaves of Panchagar district.
Total 2,83,97,769.00
The value added statement of Uttara Bank Limited shows how the value is created and distributed to the different stakeholders of the Bank.
Value added to the Bank stood at Tk.6,604,453,423 registering a growth of 7.85% over the previous year.
Salaries & Allowances (65%) Statutory Reserve 0% Salaries & Allowances (54%) Statutory Reserve 5%
Income tax (7%) Expansion & Growth 28% Income tax (17%) Expansion & Growth 24%
Economic Value Added (EVA) indicates the true economic profit of a Company. EVA is an estimate of the amount by which earnings
exceed or fall short of required minimum return for shareholders at comparable risks. EVA of the Bank stood at Tk. 832,510,348 as of 31
December 2016 as against Tk. 1,383,061,070 in 31 December 2015. Uttara Bank Ltd. is always concern for delivery of value to all of our
Shareholders/Equity providers.
14000
12000
10000
8000
6000
4000
2000
0
2016 2015
Market Value Added (MVA) is the amount derived from the difference between market capitalization and book value of the shares
outstanding in the market. It's the indication of progressive market growth as well as financial strength which the company possesses.
(Amount in Taka)
Particulars 2016 2015
Market value per share 24.70 22.70
Number of shares outstanding 400,080,337 400,080,337
Total market capitalization 9,881,984,324 9,081,823,650
Book value of shares outstanding 4,000,803,370 4,000,803,370
Market value added 5,881,180,954 5,081,020,280
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2016 2015
Foreword
Meaningful information about common key risk metrics to market participants is a fundamental tenet
of a sound banking system that reduces information asymmetry and helps promote comparability of
banks’ risk profiles within and across jurisdictions. Pillar 3 of the Basel framework aims to promote
market discipline through regulatory disclosure requirements. These requirements enable market
participants to access key information relating to a bank’s regulatory capital and risk exposures in
order to increase transparency and confidence about a bank’s exposure to risk and the overall
adequacy of its regulatory capital.
With a view to ensuring transparency in the financial sector, in line with the recommendations of
Basel Committee on Banking Supervision popularly known as Basel Accords, Bangladesh Bank has
formulated “Guidelines on Risk Based Capital Adequacy” in terms of Bangladesh context. Under
this guideline, market disclosure occupies a decisive share since the public disclosure of prudential
information is an important component of Basel-III framework of capital measurement and capital
adequacy. This disclosure aims at enhancing transparency in the financial market of Bangladesh
through setting up minimum requirement for disclosure of information on the risk management and
capital adequacy.
The following detailed qualitative and quantitative disclosures of the Bank are furnished in
accordance with the BRPD Circular No: 18 of 21st December, 2014 to enable our stakeholders make
informed assessment regarding the bank's financial health and to identify the risks relating to the
assets and capital adequacy as on December 31, 2016.
The assets, liabilities, revenues and expenses of the subsidiaries are combined with those of the
parent company (UBL), eliminating intra-company transactions. Assets of the subsidiaries were risk
weighted and equities of subsidiaries were crossed out with the investment of UBL while
consolidating.
The information presented in this Pillar 3 Report is not required to be, and has not been, subject to
external audit. UBL has not omitted any disclosures on the grounds that the information may be
proprietary or confidential.
So, information presented in the ‘Quantitative Disclosures’ section can easily be verified and
validated with corresponding information presented in the consolidated audited financial statements
2016 of UBL.
1. Scope of Application
1.1. Qualitative Disclosure
a) Top corporate entity in the Group to which this guideline applies
The framework applies to Uttara Bank Limited (UBL) on ‘Consolidated Basis’ as there
were two (02) subsidiaries of the Bank as on the reporting date i.e. December 31, 2016.
However, ‘Solo Basis’ information has been presented beside those of ‘Consolidated
Basis’ to facilitate comparison.
Entities within the Group: The Bank has two (02) fully owned subsidiaries in operations
as on the reporting date i.e. December 31, 2016.
a) UB Capital and Investment Ltd was incorporated as a Public Limited Company with
the Registrar of Joint Stock Companies and Firms, Dhaka Bangladesh on September
28, 2010 under the Bank Company Act, 1994 bearing Registration no C-87220/10.
b) Uttara Bank Securities Ltd was incorporated as a Public Limited Company with the
Registrar of Joint Stock Companies and Firms, Dhaka Bangladesh on June 13, 2013
under the Bank Company Act, 1994 bearing Registration No.109691/13.
Financials are fully consolidated, inter-company transactions & balances are eliminated.
The rules and regulations of ‘Single Borrower Exposure Limit’ for the customers are
equally applicable for the Bank in financing its own subsidiaries.
Not Applicable.
2. Capital Structure
2.1. Qualitative Disclosure
a) Main features of all capital instruments, eligible for inclusion in CET 1, Additional Tier 1
or Tier 2.
For the purpose of calculating capital under capital adequacy framework, the capital of
banks has been classified into two (02) tiers. Total regulatory capital consists of sum of
the following categories:
1. Tier 1 Capital (Going Concern Capital)
a) Common Equity Tier 1
b) Additional Tier 1
2. Tier 2 Capital (Gone Concern Capital)
Conditions Status
CET 1 Complied.
Tier 1 Complied.
Minimum CRAR Complied.
AT1 Complied.
Tier 2 Complied.
On behalf of the Board of Directors, Risk Management Committee (RMC) ensures the
implementation of Supervisory Review Process, that states capital adequacy goals with
respect to risk, taking account of the bank’s strategic focus and business plan to ensure
the integrity of the overall risk management process so that all material risks faced by the
bank can be addressed in the capital assessment process.
UBL has adopted Standardized Approach for computation of capital charge for credit risk
and market risk while Basic Indicator Approach for operational risk, in line with the
RBCA guideline.
Demand Loan
20% 50% 100%
Fixed Term Loan >10 lac
General provisions for unclassified loans & advances and contingent assets are
measured as per BB prescribed provisioning rates as mentioned below:
Uttara Bank Limited always acknowledges effective Risk Management as the key to
steady and stable growth for the Bank. The Bank's own lending policy has been
introduced in the Bank in line with the directives received from the Bangladesh Bank
and the Government.
The Branches are the business unit of the banking system. The loan application
assessment process starts at branch level by the Relationship Managers, through zonal
office and ends at Credit Approval Department of Head Office. Credit Marketing
Department analyze the proposal from different perspectives in line with lending
policy of the Bank, while Credit Approval Department analyze business worthiness of
the proposal and forward towards Credit Committee.
Sn Particulars Amount/ %
1 Gross Non-Performing Assets (NPAs) 645.80
2 Non-Performing Assets to Outstanding Loans & Advances 7.75%
3 Movement of Non-Performing Assets
Opening Balance 627.26
Additions (+) 510.11
Reductions (-) 491.57
Closing Balance 645.80
4 Movement of Specific Provisions for NPAs
Opening Balance 114.47
Provisions Made during the Period (+) 39.15
Write Off (-) 30.14
Write Back of Excess Provisions (+) 6.98
Closing Balance 130.46
Investment in equity securities by UBL is broadly categorized into two parts: Quoted
securities (Ordinary shares, Mutual Fund) and Un-quoted securities.
Quoted Securities are those placed into the trading book assets, are traded in the
secondary market.
Un-Quoted Securities are categorized as banking book equity exposure.
b) Important policies of Equity holdings in the banking book including the valuation
methodologies & accounting techniques, key assumptions practices affecting valuation
as well as significant changes in these practices.
Investments in these equity securities have been initiated with a view to making capital
gain by selling them in the future or hold for dividend income. Both quoted and un-
Not Applicable.
Interest rate risk in the banking book (IRRBB) is the current or potential risk to the
interest rate sensitive assets and liabilities of a bank’s balance sheet as well as the off-
balance sheet items arising out of adverse or volatile movements in market interest rate.
Volatile movements of market interest rate adversely affect the value of interest rate
sensitive assets and liabilities that consequentially results in the loss of equity value.
IRRBB arises from differences between the timing of rate changes and the timing of cash
-pricing risk); from changing rate relationships among yield curves that affect
bank activities (basis risk); from changing rate relationships across the range of maturities
(yield curve risk); and from interest rate related options embedded in bank products
(option risk).
The process of interest rate risk management by the bank involves determination of the
business objectives, expectation about future macro-economic variables & understanding
the money markets and debt market in which it operates. Interest rate risk management
7. Market Risk
7.1. Qualitative Disclosure
a) Views of BOD on trading/investment activities
Market Risk, possibility of losing assets in balance sheet & off-balance sheet positions
arising out of volatility in market variables i.e. interest rate, exchange rate and price.
Interest Rate risk arises due to changes in yield curves, credit spreads and implied
volatilities on interest rate options.
Equity Position Risk arises due to changes in equity price, indices, baskets & implied
volatilities on related options.
Foreign Exchange Risk arises due to changes in exchange rates & implied volatilities
on foreign exchange options.
Commodity Risk; arises due to changes in exchange rates & implied volatilities on
foreign exchange options.
All Market risk related policies/ guidelines are duly approved by the BOD. The BOD sets
limit, review & update the compliance on regular basis targeting to mitigate market risk.
Bank applies maturity method in measuring interest rate risk in respect of securities in
trading book. The capital charge for entire market risk exposure is computed under the
standardized approach using the maturity method and in accordance with the guideline
issued by Bangladesh Bank.
To manage the interest rate risk, ALCO regularly monitors various ratios and parameters.
Of the ratios, the key ratios that ALCO regularly monitors are Liquid asset to Total
Assets, Volatile liability dependency ratio, and MTF Ratio, Snap Liquidity Ratio and
To manage foreign exchange risk of the bank, the Bank has adopted the limit by central
bank to monitor foreign exchange open positions. Foreign exchange risk is computed on
the sum of net short positions or net long positions, whichever is higher of the foreign
currency positions held by the Bank.
To mitigate Market Risk, Asset & Liability Management Department (ALMD) takes
following measures:
Interest Rate Risk Management: ALMD reviews the risks of changes in income of
the Bank as a result of movements in market interest rates. In the usual course of
business, the Bank tries to minimize the mismatch between the duration of interest
sensitive assets and liabilities. Effective interest rate management is done through
market analysis and Gap analysis.
Foreign Exchange Risk Management: It is the risk that arises from potential
fluctuations in the exchange rate, adverse exchange positioning or change in the
market. ALMD mitigates this risk by supervising day to day trading activities and by
setting limits.
Equity Risk Management: Equity risk is defined as losses due to changes in market
price of the equity held. To measure and identify the risk, market valuation of the
share portfolio is done.
8. Operational Risk
8.1. Qualitative Disclosure
a) Views of BOD on system to reduce Operational Risk
Performance gap of executives and staffs
Potential external events
Policies and processes for mitigating Operational Risk
Approach for calculating capital charge for Operational Risk
Operational risk is the risk of loss arising from fraud, unauthorized activities, error,
omission, inefficiency, systems failure or external events. It is inherent in every business
All the policies/ guidelines including Internal Control and Compliances and Board audit
are duly approved by BOD. Audit Committee of the Board directly oversees the activities
of internal control and compliances aiming to check all types of lapses and irregularities
inherent with operational activities of the Bank and thereby may create a notable
downfall risk for the Bank.
Operational Risk includes legal risk, but excludes strategic and reputation risk. It arises
from:
Transaction Processing
Operation Control
Technology and Systems
Risks of Physical and Logical Security
Unique Risk arises due to Outsourcing
9. Leverage Ratio
9.1. Qualitative Disclosure
a) Views of BOD on system to reduce Liquidity Risk
Methods used to measure Liquidity Risk
Liquidity Risk Management System
Policies and processes for mitigating Liquidity Risk
The BOD assumes the responsibility of ensuring the bank’s adequate liquidity for both
normal operations and unanticipated stress events. By approving the policy statement, the
Board specifically:
Approves policy limits, monitoring and reporting systems
Sets up line management responsibilities.
Puts systems in place to review actual performance relative to policies & controls.
Hold management accountable to measure, monitor & control liquidity risk.
Regular reviews liquidity reports to ensure liquidity risk is within policy limits.
Reviews Contingency Funding Plans.
Exposure Calculation
To measure the exposure consistent with financial accounts, following principles are
followed:
On balance sheet, non-derivative exposures are calculated as net of specific
provisions and valuation adjustments.
Physical or financial collateral, guarantee or CRM technique is not considered
to reduce On-balance sheet exposure.
Netting of loans and deposits is not considered.
On-Balance Sheet Items are included using accounting balance sheet.
Off-Balance Sheet Items are calculated by applying a uniform 100% Credit Conversion
Factor (CCF) and for unconditionally cancellable commitments, 10% CCF is applied.
The remuneration of the bank is governed by the “Pay Structure” of the bank which is
approved by the Board from time to time. Human Resources Division is solely
responsible for overseeing the pay structure followed by the HR policy Guidelines.
Composition
Managing Director Managing Director
General Manager
Mandate
HRD places the position of remuneration, the matters & recommendations associated
to it before the Board of Directors for approval of its restructuring, rearrangement
modification in line with the industry best practices as per requirement.
External Consultants
Bank does not deploy any external consultant regarding remuneration & its process.
c) Description of the ways in which current and future risks are taken into account in the
remuneration processes
d) Description of the ways in which the bank seeks to link performance during a
performance measurement period with levels of remuneration
e) Description of the ways in which the bank seeks to adjust remuneration to take account
of longer-term performance
f) Description of the different forms of variable remuneration that the bank utilises and
the rationale for using these different forms
Variable Remuneration
Not applicable.
Incentive Bonus
Particulars Basis 2015 2016
Incentive Bonus Crore Tk. 16.48 23.00
Sign-on Awards
There is no sign-on awards made in 2016.
Severance Payments
No such payment was made during the fiscal year.
c) Deferred Remuneration
Outstanding
Not applicable.
Paid Out
Not applicable.
Not applicable.
Not applicable.
A comparative position of the Credit Rating of Uttara Bank Limited for the year 2015 and 2014
is furnished below:
Ratign Results
“AA3”
ST-2
Based on 31 December 2015 (Very Strong Capacity & Very High
(High Grade)
Quality)
“AA3”
ST-2
Based on 31 December 2014 (Very Strong Capacity & Very High
(High Grade)
Quality)
Date of Rating 23 June 2016
Outlook Stable
Commercial Banks rated “AA3” have very strong capacity to meet their financial commitments.
They differ from the highest rated Commercial Banks only to a small degree. AA is judged to be
of very high quality and is subject to very low credit risk. Commercial Banks rated “ST-2” are
considered to have strong capacity for timely repayment. Commercial Banks rated in this
category are characterized with commendable position in terms of liquidity, internal fund
generation, and access to alternative sources of funds. The rating reflects the Bank’s strength in
risk weighted capital adequacy, reasonable profitability and surplus provision.
Panchagar
1
Thakurgaon
1 Nilphamari Lalmonirhat
2 1
Kurigram
Dinajpur 1
4
Rangpur
INDIA 2
INDIA
(West Bengal) (Meghalaya)
Gaibandha INDIA
1
Joypurhat
1
Sherpur (Assam)
1
Sunamganj
Naogaon 3 Sylhet
Capai 1 Bogra
Nawabganj 1 Jamalpur Mymensingh Netrokona 11
2 1 1
2
Rajshahi
5 Hobiganj Moulvibazar
Natore 5
Sirajganj Kishoreganj 3
3 4 Tangail 4
2
Pabna Gazipur
2 4
Narsingdi INDIA
4
Meherpur Kushtia
1 Manikganj Dhaka Brahmanbaria (Tripura)
1 66 3
3 Narayanganj
Chuadanga Rajbari 6
1 1
Jhenaidah
1 Munshiganj
2 Faridpur 3 Comilla
Magura 1 6
1
Shariatpur Chandpur
Madaripur 1 1
Jessore Narail Khagrachari
2
2 1
Gopalganj INDIA
INDIA 1 Laxmipur Feni
2 (Mizoram)
Barisal 3 Noakhali
(West Bengal) Pirojpur 2 5
Rangamati
Satkhira 2 1
1 Bagerhat Jhalakati
1
Khulna 2
5
Patuakhali Bhola
3 5 Chittagong
19
Barguna
1
Bandarban
21 Moulvibazar Branch (02) 57315839, 57317219 30 Pabna Branch (0731) 66180, 01991-144344
66, Moulvi Bazar,Tajmahal 01991-144202 Sonapatty FAX: 880-731-66089
Tower Complex (1st Floor) E-mail: [email protected] Pabna-6600 E-mail: [email protected]
Dhaka-1100 Swift:UTBLBDDH448 Swift:UTBLBDDH466
31 Shaheb Bazar Branch
Narayangonj Zone House-75, Ward-12, Al-Hasib (0721) 774906, 01991-144347
22 Narayanganj Branch (02) 7633655,7633653 Plaza (1st Floor), Shaheb Bazar FAX: 880-721-772182
E-mail: [email protected] Ganak Para, Ghoramara, E-mail: [email protected]
150, B.B. Road,
Swift:UTBLBDDH437 Boalia, Rajshahi-6000 Swift:UTBLBDDH445
Narayanganj-1400
Bogra Zone
Mymensingh Zone 32 Bogra Branch (051) 66228, 78439, 73439
23 Mymensingh Branch (091) 67144, 52218 Habib Mansion, Kazi Nazrul FAX:880-51-78081
41/A, Chotta Bazar(1st Floor) 01991-144253 Islam Road, Bogra E-mail: [email protected]
Bipin Sen Road, Kotowali FAX:880-91-67144 Swift:UTBLBDDH447
Mymensingh-2200 E-mail: [email protected] 33 Naogaon Branch (0741) 62184, 62540
Swift:UTBLBDDH459 01991-144363
Mafizuddin Market, Main
24 Haluaghat Branch Road, Noagaon-6500 FAX: 880-741-62540
Uttar Bazar (09026)56160, 01991-144249 E-mail: [email protected]
PO & P.S:Haluaghat E-mail: [email protected] Swift:UTBLBDDH469
Mymensingh-2260 Swift:UTBLBDDH470 34 Rangpur Branch
Dewanbari Road (0521) 62132, 66209
Lohapotti 01991-144367
Chittagong Zone Rangpur-5400 FAX: 880-521-66209
25 Agrabad Branch (031)715846, 715847, 725739 E-mail: [email protected]
74, Agrabad C/A, 01991-144266 Swift:UTBLBDDH446
Chittagong-4100 FAX: 880-31-724652 Khulna Zone
E-mail: [email protected] 35 Jessore Branch (0421) 64081, 01991-144389
Swift:UTBLBDDH439 Municipal Road (Chowrasta), FAX: 880-421-68513
Jessore-7400 E-mail: [email protected]
Swift:UTBLBDDH456
26 Khatungonj Branch (031) 611306, 638447
M.J. Trade Center (2nd Floor) 01991-144275 36 Sir Iqbal Road Branch (041) 720427, 721090
263/284 Khatunganj,Ward-35 FAX: 880-31-638447 2/A, Sir Iqbal Road 01991-144401
Chittagong City Corp, Kotwali E-mail: [email protected] Khulna-9100 FAX: 880-431-720417
Chittagong-4000 Swift:UTBLBDDH442 E-mail: [email protected]
Swift:UTBLBDDH443
27 Laldighi Branch (031) 630729, 637276 Barisal Zone
120, Laldighi West 01991-144276 37 Barisal Branch (0431) 64175, 64407
Kotwali, Chittagong-4000 FAX: 880-31-637276 Aryya Laxmi Bhaban 01991-144416
E-mail: [email protected] 99, Sadar Road, FAX:880-431-63846
Swift:UTBLBDDH450 Barisal-8200 E-mail: [email protected]
Comilla Zone Swift:UTBLBDDH444
28 Comilla Branch (081) 76271, 76878 Sylhet Zone
115/1-2, Nazrul Avenue 01991-144310 38 Sylhet Branch (0821) 714484, 711998
Ray Complex, Kandirpar FAX:880-02-7317219 Shahir Plaza (1st Floor) 01991-144472
Comilla-3500 E-mail: [email protected] East Zindabazar, Sylhet-3100 FAX: 880-821-724209
Swift:UTBLBDDH441 E-mail: [email protected]
Swift:UTBLBDDH440
Rajshahi Zone 39 Sunamganj Branch (0871) 61329, 61671
29 Natore Branch (0771) 62669, 01991-144342 Hotel Palace (1st Floor) 01991-144471
Holding No : 98 FAX: 880-771-66908 Holding No.0717-00, Station FAX: 880-871-61671
Ward No:6 E-mail: [email protected] Road (Mejor Ikbal Road) E-mail: [email protected]
anaikhali, Natore-6400 Swift:UTBLBDDH467 Sunamganj-3000 Swift:UTBLBDDH468
Amount in Taka
Particulars Notes
2016 2015
ASSETS
Non-Current Assets 329,640,931 330,237,647
Fixed Assets less Accumulated Depreciation 3.00 9,440,931 10,037,647
Acquisition Cost of DSE TREC 4.00 320,200,000 320,200,000
The annexed notes 1 to 26 and Annexure- A form an integral part of these financial statements.
Amount in Taka
Particulars Notes
2016 2015
The annexed notes 1 to 26 and Annexure- A form an integral part of these financial statements.
Retained Total
Particulars Share Capital
Earnings Equity
Amount in Taka
Particulars
2016 2015
A. Cash Flows from Operating Activities
Net Profit During the Period 9,742,995 3,957,232
9,742,995 3,957,232
Add: Amount Considered as Non Cash Items:
Depreciation & Amortization Charged 1,796,716 579,834
Sub Total of Non Cash Items 1,796,716 579,834
License/
Name of Authority Purpose
Registration
Bangladesh Securities and Exchange 3.1/DSE-
Stock Dealer Business with DSE
Commission (BSEC) 250/2014/518
Bangladesh Securities and Exchange 3.1/DSE-
Stock Broker Business with DSE
Commission (BSEC) 250/2014/519
Bangladesh Securities and Exchange Depository Functions with Central
CDBL-DP 408
Commission (BSEC) Depository Bangladesh Limited (CDBL)
Dhaka Stock Exchange Limited (DSE) TREC No. 250 Trading with DSE
f. Reporting Period:
The financial period of the company covers one calendar year from 01 January 2016 to
31 December 2016.
h. Comparative Information:
Comparative information has been disclosed in respect of the year 2015 for all numerical
information in the Statement of Financial Position, Statement of Profit or Loss and Other
Comprehensive Income, Statement of Cash Flows for understanding of the current year’s
financial statements.
i. Rearrangements:
Wherever considered necessary, previous year’s figures have been rearranged for the purpose
of comparison with current period’s presentation without any impact on the profit/(Loss) and
value of assets and liabilities as reported in the Financial Statements.
l. Depreciation:
Depreciation is calculated on the cost of fixed assets in order to write off such amounts over
the estimated useful lives of such assets. The rates of depreciation used on a straight-line
method are as follows:
a) All fixed assets will be stated at cost less accumulated depreciation as per BAS-16
“Property, Plant and Equipment”.
b) Depreciation at applicable rates will be charged on additions to fixed assets from the
month of acquisition of the assets (full month).
c) Upon sale or retirement of any item of fixed assets, depreciation will be charged up to the
month of disposal or retirement, the net book value will be eliminated from accounts and
any resulting gain or loss will be transferred to profit and loss account.
Provisions and accrued expenses are recognized in the financial statements in line with
Bangladesh Accounting Standard (BAS) 37: “Provisions, Contingent Liabilities and
Contingent Assets” when the Company has a legal or constructive obligation as a result of
past event; and
i. It is probable that an outflow of economic benefit will be required to settle the obligation.
ii. A reliable estimate can be made for the amount of the obligation.
As per the provision of the Exchange Demutualization Act, 2013 and in accordance with
the BSEC approved Demutualization Scheme, DSE has allotted 7,215,106 ordinary
shares in favour of Uttara Bank Securities Limited out of which 2,886,042 (40%) shares
have been transferred by Exchange to the company's BO account and remaining
4,329,064 (60%) shares have been kept in DSE Demutualization Block Account for
disposal in due course getting future guidelines and advice from the regulator.
5.00 Advances, Deposits and Prepayments
Security Deposit to CDBL 200,000 200,000
200,000 200,000
6.00 Advance Income Tax
Opening Balance 6,484,520 2,263,933
Corporate Tax 3,427,796 547,614
TDS on FDR & STD Interest 2,983,652 1,714,625
TDS on Turnover 73,072 1,694
Add. Advance Income Tax for the year 2015 634,084 2,880,182
Corporate Tax 634,084 2,880,182
Add. Advance Income Tax for the year 2016 2,906,717 1,340,405
TDS on FDR & STD Interest 566,274 1,269,027
TDS on Turnover 659,606 71,378
TDS on Dividend Income 1,680,837 -
10,025,321 6,484,520
Annexure-A
Amount in Taka
Cost Depreciation Written
Balance Addition Balance Rate of Balance Charged Balance Down
Particulars as on during the as on Depreciation as on during as on Value as
01.01.16 year 31.12.16 (%) 01.01.16 the 31.12.16 on
year 31.12.16
Auditors’ Responsibility
Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit
in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial
Statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of
material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the company’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstance, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management of
the company as well as evaluating the overall presentation of the Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Financial Statements present fairly, give a true and fair view of the Financial Position of UB Capital
and Investment Limited as at 31 December 2016 and its financial performance and its cash flows for the year then ended
in accordance with Bangladesh Financial Reporting Standards (BFRS) and comply with the applicable section of the
Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.
Amount in Taka
Particulars Notes
2016 2015
Assets
Current Assets
Interest Receivable on FDR 1,018,152 1,648,398
Advances, Deposits & Prepayments 3.00 18,589,664 15,718,902
Cash & Cash Equivalents 4.00 137,187,791 134,264,541
Total Assets 156,795,607 151,631,841
Liabilities
Current Liabilities
Provision for Expenses 7.00 17,500 11,500
Provision for Income Tax 8.00 21,291,789 19,357,627
Total Liabilities 21,309,289 19,369,127
The annexed notes 1.00 to 12.00 form an integral part of these Financial Statements.
Amount in Taka
Particulars Notes
2016 2015
Operating Income
Interest Income 9.00 6,979,488 10,008,877
Total Operating Income 6,979,488 10,008,877
Operating Expenses
The annexed notes 1.00 to 12.00 form an integral part of these Financial Statements.
(Amount in Taka)
Retained
Particulars Paid up Capital Total
Earnings
Amount in Taka
Particulars
2016 2015
2.08 Rearrangements
Wherever considered necessary, previous year's figures have been rearranged for the
purpose of comparison with current year’s presentation without any impact on the profit
and value of assets and liabilities as reported in the Financial Statements.
2.09 General
a) The Financial Statements are prepared in Bangladeshi Taka which is both functional
currency and presentation currency of the company.
b) The figures of the Financial Statements have been rounded off to the nearest Taka.