one bank Annual_Report_2012.pdf

7/27/2019 one bank Annual_Report_2012.pdf

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Annu

al

Repor

t

2012

www . o n e b a n k . c om . b d


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01

evwlK cwZe`b 2012

ANNUAL REPORT 2012


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02


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03

Contents

Corporate Information 04

Directors Prole 05

The Board and its Committees 10

Key Personnel 11

Registered Office / Auditors / Legal Advisers 12

Notice of the 14th AGM 13

Company Milestones 14Vision and Mission 15

Five Years Financial Highlights 16

Chairmans Address 17

Directors Report 23

Audit Committees Report 58

Corporate Governance 60

Value Added Statement 63

Credit Rating Report 64

Auditors Report 66Financial Statements

Consolidated Balance Sheet 67

Consolidated Prot & Loss Account 69

Consolidated Cash Flow Statement 70

Consolidated Statement of Changes in Equity 71

Balance Sheet-OBL 72

Prot & Loss Account-OBL 74

Cash Flow Statement-OBL 75

Statement of Changes in Equity-OBL 76

Liquidity Statement-OBL 77

Notes to the Financial Statements 78

Financial Highlights 112

ONE Securities Limited 125

Network of Branches and Booths 135

Proxy and Attendance 137


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04

Corporate

Information

Name of the CompanyONE Bank Limited

ChairmanMr. Sayeed Hossain Chowdhury

Vice ChairmanMr. Asoke Das Gupta

Managing DirectorMr. Farman R. Chowdhury

Company SecretaryMr. John Sarkar

Legal StatusPublic Limited Company

Date of IncorporationMay 12, 1999

Registered Office

2/F HRC Bhaban46, Kawran Bazar C.A.

Dhaka-1215.

Line of BusinessBanking

Telephone88 02 9118161

Telefax88 02 9134794

SWIFTONEBBDDH

[email protected]

Websitewww.onebank.com.bd


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... a step towards dream career

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you can now relax and provide the financial security for your children to continue their dream education.

Directors Profile


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Directors Profile

Mr. Sayeed H. ChowdhuryChairman

After completing his higher education in London UK, Mr. Sayeed

H. Chowdhuryjoined the family business in 1981 and was based

in the Sultanate of Oman until 1987, looking after its business

interest in the Gulf region. Returned home to work for the family

company Karnaphuli Group as its Director Finance and Planning.

In March 1991, Mr. Chowdhury founded the HRC Group, the much

acclaimed and multi faceted blue chip business house of

Bangladesh. Initially starting as a shipping agency, the group is

now a leading conglomerate of Bangladesh consisting of nineteen

member companies with diverse interest which includes but is not

limited to ship owning, chartering and agency, tea estate andrubber plantation, blending and packaging of tea for local market

and export, real estate, print media, GLS-bulb manufacturing,

distribution, insurance, housing finance, merchant banking,

information technology, etc. Export performance of HRC in the tea

sector has earned Mr. Chowdhury the Government CIP honour for

twelve (12) consecutive years. He is the Founder, Chairman and

CEO of HRC family of companies. Mr. Chowdhury is also Chairman

of Media New Age Limited and Information Services Network

Limited. He is the Chairman of the Editorial Board of the Bangla

National daily Jaijaidin. A Director of Holiday Publications Limited

and a Sponsor Shareholder of Bangladesh General Insurance Co.

Ltd. Mr. Chowdhury is the ex-president of Bangladesh Oceangoing

Shipowners Association (BOGSOA). He is also a member of theBritish Institute of Management.

06

National

Industry Business Award (2003) Financial Mirror Business Award (2004) Raqul Islam Foundation Banking Award (2004) the best

Bank Chairman.

Financial Mirror Export Award (2007)

Michael Madhusudhan Dutt Award (2007)forUpliftment of Education and Social Welfare

Atish Depankair Gold Medal Award (2009)for

outstanding contribution in Commerce and Industry.

International

CPBU Business Entrepreneur of the Year 2007 UnitedKingdom.

Queens Special Award 2007 - The Ede and Ravenscroft,United Kingdom

Fellowship

Honorary Fellowship of the Corporation of ExecutivesAdministrators (CEA) United Kingdom

Recognitions:


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Mr. Asoke Das GuptaVice Chairman

Mr. Asoke Das Gupta is a reputed businessman of the country. He is the

Chief Executive of IMTREX and the Managing Director of Uniroyal Trade

Ltd. and he is also the Chairman of Uniroyal Securities Ltd. which is a

member of the Dhaka and Chittagong Stock Exchanges Ltd.

Mr. Zahur UllahDirector

Directors Profile

Mr. A.S.M. Shahidullah KhanDirector

Mr. A.S.M. Shahidullah Khan is one of the Directors of ONE Bank

Limited, representing KSC Securities Limited. He participated in the

liberation war as a freedom fighter. Presently, he is the Managing Director

of Media New Age, publisher of national English Daily The New Age.

Mr. Zahur Ullah, Director of ONE Bank Limited is a prominent business

person in the country. He graduated in Finance from University of Dhaka.

He is also the Managing Director of GTEX Ltd. He is one of the Directors

of Holiday Publications Ltd. Mr. Zahur Ullah is the Chairman of LL Groupand is involved in the buying, manufacturing, and exporting of

readymade garments and allied products.


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08

Directors Profile

Mr. Salahuddin AhmedDepositor Director

Mr. Salahuddin Ahmed, Depositor Director of ONE Bank Limited is a

renowned Management Consultant. He obtained his Masters Degree

from Dhaka University. He is experienced in Project Development, Cost

Control, Procurement Management and Contract Administration. He is

also the Managing Director of Consolidated Services Limited (CSL).

Mr. Kazi Rukunuddin Ahmed, one of the Directors of ONE Bank

Limited, representing Irfan International Limited is a highly regarded

B.Sc. Engineer.

Mr. Shawket Jaman is a Director of ONE Bank Limited, representing

M R Holdings & Securities Limited.

Mr. Kazi Rukunuddin AhmedDirector

Mr. Shawket JamanDirector


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Mr. Syed Nurul AminIndependent Director

Mr. Syed Nurul Amin, Independent Director of ONE Bank Limited is a

seasoned banker. He served in different capacities in different banks for

more than four (4) decades. He retired as Managing Director. Mr. Amin

was also a nominated Director on the Board of Directors of IDLC.

Directors Profile

Mr. Farman R. ChowdhuryManaging Director

Mr. Farman R. Chowdhury was appointed as Managing Director of ONE

Bank Limited with effect from 10 July 2007. Prior to assuming his current

responsibility, he was the Deputy Managing Director and Head of

Marketing. He has been associated with the Bank since its inception in

1999. He was also the first Manager of the Principal Branch. He started his

banking career with American Express Bank as a Management Trainee in

1986 and during the next twelve years ser ved in various progressive

responsible positions in the Credit and Marketing Divisions. He has

attended several banking related training programmes and workshops

both at home and abroad and also was designated "Credit Risk

Management Professional" of American Express Bank based on hisprofessional competence. He is an MBA from the Institute of Business

Administration (IBA), University of Dhaka.


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10

The Board

and its Committees

BOARD OF DIRECTORS

ChairmanMr. Sayeed Hossain Chowdhury

Vice Chairman

Mr. Asoke Das Gupta

DirectorsMr. Zahur Ullah

Mr. A.S.M. Shahidullah Khan

Mr. Kazi Rukunuddin Ahmed

Mr. Shawket Jaman

Mr. Salahuddin Ahmed, Depositor Director

Mr. Syed Nurul Amin, Independent Director

Mr. Farman R. Chowdhury, Managing Director

EXECUTIVE COMMITTEE

ChairmanMr. Zahur Ullah

MembersMr. Sayeed Hossain Chowdhury

Mr. Asoke Das Gupta

Mr. Syed Nurul Amin

AUDIT COMMITTEE

ChairmanMr. Syed Nurul Amin

MembersMr. A.S.M. Shahidullah Khan

Mr. Shawket Jaman

COMPANY SECRETARY

Mr. John Sarkar


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Managing Director

Mr. Farman R.Chowdhury

Deputy Managing Director

Ms. Johora Bebe

Additional Deputy Managing Director

Ms. Rozina Aliya AhmedMr. A. B. M. Saif Sarwar

Senior Executive Vice President

Mr. M. Rafiqul IslamMr. John SarkarMr. Abu Zafore Md. SalehMr. Shabbir AhmedMr. Mahmudul KhalequeMr. Md. Aftab Uddin KhanMr. Md. Fazlur Rahman Chowdhury

Executive Vice President

Mr. Adil RaihanMr. Salahuddin Nazmul Huda

Mr. ShafiuzzamanMr. Noor Mohammed

Senior Vice President

Mr. Md. Mostaque HossainMr. Md. Rafiqul IslamMr. M. Ahsan HabibMr. Asif Mahmud KhanMr. S. M. Hafizur RahmanMr. Sukumar SinhaMr. Md. Monzurul Alam ChowdhuryMr. Shibly Nasimul HuqMr. Amirul IslamMr. Mirza Ashraf AhmadMr. Md. Abu SalehMr. Md. Fazle Rahman ChowdhuryMr. Ashraf Uddin ChowdhuryMr. Md. Mazharul Islam Chowdhury

Vice President

Mr. Iftekhar Uddin AhmedMr. Shahabuddin AhmedMr. Moin Uddin AhmedMr. Tariqul IslamMr. Md. Faridur Rahman JalalMr. Kazi Md. Amzad HossainMs. Shirin MullickMr. Khondaker Abdul MazidMr. Mohammed MostafaMr. M. Mostak HossainMr. Md. Abdul QuyumMr. Kh. Rashed Akhtar ZamanMr. Ishtiaq AhmedMr. Md. Bahar Mahmud

Mr. Nahidul Islam TarafderMr. Md. Golam RabbaniMr. Md. Zahid-Ul-IslamMs. Mallika NabiMr. Mohammad Farhad Hossen KhanMs. Shaila Yeasmeen BeautyMs. Jahanara BegumMr. Mohammad QuasemMr. Newaz Khalid AhmedMr. S. M. A. MoktadirMr. Md. Shafiur Rahman SikderMr. Md. Abdur RabMr. Md. Borhan Uddin

Senior Assistant Vice PresidentMr. Nirmalananda ChowdhuryMr. Md. FarooqueMr. Qamrul ChowdhuryMs. Nasima AshrafMr. Md. Ehsanul Haider ChoudhuryMr. Khandaker Liakat AliMr. Taufiq Ahmed

Mr. Habibul IslamMr. Kazi Moeenur Rahman ChowdhuryMr. Mohammad Abdul AzimMr. Nitya Narayan ChoudhuryMr. Faisal AdilMr. S. M. Showkat HossainMr. Md. Kawsaruzzaman ChowdhuryMr. Sk. Wahidul HossainMr. Mujtaba Masroor KazmiMr. A. T. M. ShahidullahMr. Md. Obaydul IslamMr. Mohammad Masrur MajidMr. Khaled MahmudMr. Mohd. Masudur RahmanMr. Md. Abdul WadudMr. Syed Rezaul Karim ChowdhuryMr. R. M. Sariful IslamMr. Shubir MitraMr. Dilip Pius RozarioMr. Mohammad Kabir HossainMr. Hasnain AhmedMr. Kutub Uddin AhmadMr. Ashraful Haq Amin

First Assistant Vice PresidentMr. Abul Masud Khan ChowdhuryMr. Moonir SadiqMr. Abdullah Al Mamun ZahangirMr. Bimalendu ChowdhuryMr. Jashim UddinMr. Md. Mominul HaqueMr. Hasanat MahmudMr. Md. Jashim UddinMr. Md. Aman Ullah

Mr. Md. Nur UddinMr. Md. Rafe ShafquatMr. Md. Zahidul IslamMr. Md. YusufMs. Anjima BegumMr. Aminul IslamMr. Mohammad Mahfuzul AlimMr. Md. Masumul GoniMs. Asma NoorjahanMr. Md. Nur Un NobiMr. Mahtab Ibna Mannan SarkerMr. Mohammad Manzur MahbubMr. Md. Mobasherul HaqueMr. Md. Motaher HossainMr. Md. Oliur RahmanMr. Md. Kazi Mohibur RahmanMr. Asirul HaqueMd. Azharul Islam KhanMr. Md. Zahidul IslamMr. Syed Fazle ElahiMr. Md. Abir Rahman

Assistant Vice PresidentMr. Md. Rizwan Ali KhanMs. Kazi Fauzia YasminMs. Rehena YasminMr. Biplab BanikMs. Sultana JushiaMr. Md. Sharifur RahmanMr. Mohammad Zakir HossainMr. Md. Monowar Hossain KhanMr. Muhammad Zakir HussainMr. Joarder Alimuzzaman RabbyMr. Aksirul Haque BhuiyanMr. Miah Mohammad Mehedi HasanMr. Abu Sayed Md. Abdul MannafMr. Md. Rafiqul Islam BhuiyanMr. Md. Rashid Ul AlamMr. Md. Arifur RahmanMr. Mohammad Moyaz Uddin SharifMr. A. S. M. Abu Bokor SiddiqueMr. Md. Shah Alam MollahMr. Md. Faizul MobinMr. Md. SalimullahMr. Md. Shahidur RahmanMr. Md. Kamrul HassanMr. Md. Mahbubur RahmanMr. Anisur Rahman MajumderMs. Farzana SultanaMs. Sultana Farah ChowdhuryMr. Anamul HoqueMr. Md. Rezaul KarimMr. Md. Fazle MahmudMr. Md. Mostafizur Rahman

Mr. Md. Shoronul IslamMr. Md. Khurshid KhanMs. Sanzida AhmedMr. Debasish DasMs. Sajeda KhatunMr. Md. Waliul IslamMr. Muhammad Shahidul IslamMr. M. M. Rashidul Kabir ChowdhuryMr. Nitul Kanti SahaMr. Mohammad Mehboob AliMr. Mehbub RanaMr. A. F. Gazi Alauddin AhmedMr. Shahid Emdadul IslamMr. Md. Tanvir Alam KhanMr. Md. Mahbubul AlamMr. Md. Ferdous ul AminMr. Md. Shahidul IslamMs. Nilufar PannaMr. Khuda Baksh TawhidMr. Mohammad Rafi UddinMr. S. M. Shariful IslamMr. Jamal Uddin Ahmed

Mr. Shaikh Babul HossainMr. Syed Shahidul HaqueMr. Md. Maksudul AlamMr. A. H. M. Al- AhasanMr. Ahmad UllahMr. S.M. SalahuddinMr. Kazi Md. Eleas KanchanMr. Muhammad Mostafigur RahmanMr. Mohammed Rafiul IslamMr. Kazi Mahmudur RahmanMr. Md. Monirul Alam RomelMr. Mohammad Munir ChowdhuryMs. Shimul JahanMr. Md. Samso UddinMr. Choudhury Maksudul HaqMr. Mohammad Shafiul AzamMr. A.K.K.M. Zahidul MannanMs. Sabrina Khan

Mr. Abu Naser Mohammad Faysal HaiderMr. Md. Muntasir WahidMs. Laila NasrinMr. Muhammad ShahMr. Jamshed Ahmed ChowdhuryMr. Mohammad Fouad ChowdhuryMs. Romana JahanMr. Fayzur Rahman KhanMr. Khaled Al FesaniMr. Md. Nizam Uddin

Key Personnel


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Registered Office

Legal Advisers Auditors

REGISTERED OFFICE

ONE Bank Limited2/F HRC Bhaban

46 Kawran Bazar C.A.

Dhaka 1215, Bangladesh

Phone: 88 02 9118161

Fax: 88 02 9134794

E- mail: [email protected]: www.onebank.com.bd

AUDITORS

ACNABINChartered Accountants

BDBL Bhaban (13th Floor)

12 Kawran Bazar C. A.

Dhaka- 1215, Bangladesh

LEGAL SERVICES RENDERED BY

ABDUR RAZZAQUE & ASSOCIATESBarristers & Associates

City Heart, Suit # 5/1

67, Naya Paltan (4th oor)

Dhaka -1000.Tel:9359998

E-mail: [email protected]

KHAN & PARTNERSBarristers & Advocates

3 New Baily Road, Dhaka-1000, Bangladesh

Tel: 9330647; Fax: 88 02 8313439

E-mail: [email protected]

MR. ALI ASGHAR CHOWDHURYAdvocate

Supreme Court of Bangladesh

High Court Division & Judges Court, Chittagong.

Chamber: Chittagong Bar Association Building

Room No.15, Court Hill, Chittagong

Phone: (88-03) 637022


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13

Notice of

The 14th Annual General Meeting

Notice is hereby given to all Members of ONE Bank Limited (the Company) that the 14th Annual General Meeting of

the Members of the Company will be held on Thursday, June 13, 2013 at 11:00 a.m. at Officers Club, 26 Bailey Road,

Dhaka-1000 to transact the following business and adopt necessary resolutions:

AGENDA:

1. To confirm the minutes of the 13th Annual General Meeting held on March 29, 2012.

2. To receive, consider and adopt the Profit & Loss Accounts of the Company for the year ended December 31, 2012

and the Balance Sheet as at that date together with the Reports of the Directors and the Auditors thereon.

3. To declare dividend out of the Profits for the year ended December 31, 2012.

4. To elect Directors in place of those who shall retire in accordance with the provisions of laws and the Articles ofAssociation of the Company.

5. To appoint Auditors of the Company for the term until the conclusion of the next Annual General Meeting and to fix

their remuneration.

6. To transact any other business with permission of the Chair.

Dhaka

April 9, 2013John Sarkar

SEVP & Company Secretary

By order of the Board,

NOTES:

a. The Record Date shall be April 22, 2013.

b. The Shareholders whose names appear in the Register of Members of the Company as at the close of the business

on April 22, 2013 will only be entitled to the dividend declared in the AGM, if any.

c. Any Member of the Company entitled to attend and vote at the General Meeting may appoint a proxy to attend and

vote on his/her behalf.

d. The instrument appointing proxy duly signed by the Member(s) and stamped must be submitted at the Registered

Office of the Company at least 48 hours before the Meeting.

e. Members are requested to notify change of address, if any, to the related Depository Participant before April 22, 2013.


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Company Milestones

HALLMARKS DATES

Memorandum and Articles of Association signed by the Sponsors May 4, 1999

Incorporation of the Company May 12, 1999

Certicate of Commencement of Business May 12, 1999

License issued by Bangladesh Bank June 2, 1999

License issued for opening the rst branch-Principal Branch, Dhaka June 17, 1999

Formal launching of the Bank July 14, 1999

Commencement of business from the Principal Branch, Dhaka July 14, 1999

Sponsored Industrial and Infrastructure Development Finance Company Limited (IIDFC) as Promoter Shareholder June 25, 2001

Floatation of Initial Public Offering (IPO):

Publication of Prospectus June 29, 2003

Subscription opened August 11, 2003

Subscription closed August 12, 2003

Lottery held for Allotment of oversubscribed Shares August 31, 2003

Trading of Shares at Dhaka Stock Exchange Limited December 6, 2003

Trading of Shares at Chittagong Stock Exchange Limited December 6, 2003

Sponsor Shares acquisition of VANIK Bangladesh Limited (now LankaBangla Finance Limited) June 5, 2004

Dividend declared in the 5th AGM (rst ever after the IPO) June 7, 2004

Commencement of trading of the Bank's Shares in dematerialized form on

Central Depository System(CDS) of Central Depository Bangladesh Limited (CDBL) December 22, 2004

Launched ONE Bank MasterCard (Credit Cards) July 14, 2005

Installed Automated Teller Machines (ATM) July 14, 2006

Inaugurated its 50th Branch December 29, 2010

Incorporation of Subsidiary Company ONE Securities Limited May 4, 2011

Obtained Chittagong Stock Exchange (CSE) Membership May 8, 2011

Change of Face Value and Market Lot of Shares December 4, 2011

New CBS Software (ORACLE Flexcube-11.2) live operation January 1, 2012

Launching of Internet Banking March 23, 2012

Enhancement of Authorised Capital (from Tk 415 crore to Tk 1,000 crore) March 29, 2012

Obtained Dhaka Stock Exchange (DSE) Membership December 6, 2012


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OUR MISSION

To constantly seek ways to better serveour Customers.

Be proactive in fullling our Social

Responsibilities.

To review all business lines regularly

and develop the Best Practices in

the industry.

Working environment to be supportiveof teamwork, enabling the

employees to perform to the very

best of their abilities.

Vision & Mission

To establish ONE Bank Limited as a

Role Model in the Banking Sector

of Bangladesh.

To meet the needs of our Customers,

provide fulllment for our People

and create Shareholder Value.

OUR VISION


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Five Years Financial Highlights

As at 31 December 2012

2012 2011 2010 2009 2008

1 10,000 4,150 4,150 4,150 4,150

2 4,145 3,189 2,057 1,558 1,299

3 2,310 1,898 1,450 914 688

4 8,438 7,700 5,956 3,573 2,658

5 73,056 57,240 50,734 39,365 27,861

6 60,216 47,927 42,190 32,533 23,287

7 9,792 8,128 7,491 6,789 3,715

8 57,686 53,831 51,781 34,442 27,844

9 50,930 45,897 35,432 25,561 25,214

10 11,976 12,941 7,999 5,075 1,454

11 10,418 9,170 7,662 5,824 4,29312 8,083 6,323 4,641 4,145 3,186

13 2,753 1,959 1,862 1,035 676

14 2,335 2,847 3,020 1,679 1,108

15 2,284 1,764 1,447 950 708

16 1,055 1,449 1,887 727 422

17 84,586 67,619 58,736 45,163 31,744

18 358 346 311 300 285

19 1,608 1,472 1,247 1,039 859

20 64 54 50 39 32

21 82.42% 83.73% 83.16% 82.64% 83.58%

22 10.46% 11.24% 9.69% 10.90% 11.02%

23 9.13% 9.22% 7.91% 9.08% 9.33%

24 1.39% 2.29% 3.63% 1.89% 1.43%

25 2.55 3.49 5.92 3.53 2.71

26

5% - - - -

15% 30% 55% 32% 20%

19.69 17.82

Cash

Bonus Share

17.91 19.8627Net Asset Value (Book value/Shareholders' equity) per share

Capital Adequacy Ratio

Tier - 1 (Capital)

Return on Asset

Earnings per Share

Dividend

23.64

Profit after Tax & Provisions

Total Assets

Number of Correspondents

Number of Employees

Number of Branches

Loan Deposit Ratio

Guarantee business handled

Total IncomeTotal expenditure

Net Interest Income

Operating Profit

Operating Expenses

(Taka in Milli on)

Total Deposits

Total Loans & Advances

Investment

Import business handled

Export business handled

Paid up Capital

Statutory Reserve

Capital

Sl No Particulars

Authorised Capital

* The figures shown in the year of 2011 under serial no 6, 21 and 27 have been rearranged in the year 2012 as disclosed in the notes to the

accounts of 2.23.


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Chairmans Address

... we are with you, all the way

Allow our children to maintain their ow n savings account. With OBL School Banking account they shall start to learnthe art of their future savings.


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Chairmans Address

In the name of the Almighty Allah

Dear Shareholders,

I am pleased to advise that 2012 was a good year for ONE BankLimited. Taking into account the comparative position of your Bankin relation to the other private sector commercial banks of thecountry your bank delivered a positive performance despite thechallenges of the surrounding economic environment.

The recession in the global economy had its impact on Bangladesheconomy. The GDP growth during 2012 was lower than theexpected target. The private investment also declined. The lowergrowth was primarily due to significant slow growth in the AgriculturalSector. However, the country maintained an average growth in the

manufacturing sector and in its foreign inward remittances. Thedomestic savings also increased slightly during the year. The overalleconomy of Bangladesh experienced a mixed economic scenario.The consumer price index had increased. The situation was furtheraggravated by the undesirable political decisions and confrontationalpolitics. Throughout the year, the interest rates were on the rise dueto liquidity crisis in the market.

Despite turbulent global markets and the increased cost ofregulation, we have struck the balance between paying our staff ina competitive industry, whilst investing in our business at pace anddelivering great returns for our shareholders.

The Board of Directors of ONE Bank Limited has recommended adividend of 20 percent for the financial year ending Dec/31/2012,of which 5 percent is to be in cash and 15 percent in the form ofBonus Shares. This is less than 30 percent declared for the year2011. However, if you compare with the dividends declared by otherbanks vis--vis ONE Bank, the dividend of 20 percent is a veryrespectable figure. A component of 5% Cash Dividend has been

recommended considering the Shareholders demand. Whilerecommending Stock Dividend, we kept mandatory capitalrequirement and had in mind the future growth of the Bank.

The changing regulatory landscape is also something we aremonitoring closely and preparing for due to its direct impact on ourbusiness. Financial services organisations are becomingincreasingly more regulated and this is the new reality.

Banks have a fundamental role in economies, helping businessesset up and expand, helping people buy homes and grow theirwealth. Now more than ever, Bangladesh needs growth. It needsbanks that are properly capitalized, strongly liquid and well managedto do what they do best helping to meet the needs of growing

populations, helping to deal with social issues such as rising youthunemployment. To achieve this, however, it is vital that regulation onbanks is kept proportionate.


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Chairmans Address

During 2012 your Bank focused on Total Quality Management

(TQM), like Doing Right Thing Right and Doing First Time Right.Service Campaign in the form of Customer Service Month, etc. Italso initiated changes within the organisation to Centralize its Loan

Administration functions, Accounts and Trade Finance servicesdepartments.

These steps will enable your bank to lower its costs and to fullyexploit its synergies with the addition of newer services. The newfunctional structure of OBL will support it better to be a financiallysuccessful and socially responsible Corporate body.

We are happy to inform that after successful operation of CoreBanking Solutions (CBS) and Internet Banking, your bank shall alsoshortly introduce Mobile Banking Services.

As a responsible corporate citizen, we believe that every smallGreen step taken today would go a long way in building a greenerfuture and that each member of ONE Bank family can work towardsa better global environment.

Environmental concern is at the centre of our Green Bankingstrategy. ONE Bank is strengthening its green banking activities bylaunching environment friendly initiatives and working on innovativegreen products.

Your Bank has continued with its CSR activities. This year ONEBank extended Scholarship to the poor meritorious students,distributed warm clothes among the distressed people in the winter,

sponsored sports, extended medical support / services and eyecamp for the under privileged, outdoor passenger sheds for thetravelers and many more.

While Bangladesh is a challenging place today and the financialservices sector is subject to significant pressures and change,values are a key part of how we do business. A bank-wide valuesinitiative has been rolled out throughout the organisation. The trustof our customers, staff and regulators are of paramount importance.Hence, values are essential in the execution of our strategy. Itsimportant that we drive the profit and drive the share price, but weneed to do so in an ethically and morally appropriate way.

Acknowledging that the economic climate and market conditionsremain challenging, I firmly believe that by upholding the OBLvalues, adhering to sound banking principles of retaining strongcapital and liquidity positions, taking a prudent stance to riskmanagement, and investing in our people and systems, we canthrive in the future.

In the recent past, you must have come across media reports thatthe UK Border Agency (Immigration) has selected OBL amongst

only a few other local banks whose financial statements in favor of

its customers are recognized by them. This is a well-deservedhonour for your Bank and reflects positively on its credentials.

To be more focused and active in the Capital Markets, we haveestablished a subsidiary Company in the name and style of ONESecurities Limited to engage in the business of Stock Brokering andStock Dealing. Memberships of Dhaka Stock Exchange Limited(DSE) and Chittagong Stock Exchange Limited (CSE) are alreadyat hand. We have also obtained Stock Broking and Dealing Licensesfrom CSE and Stock Broking and Dealing Licenses from DSE ispresently under process. We expect to get these licenses very soon.

I am privileged to be the Chairman of a Board whose members havea wealth of knowledge and experience at both a local and

international level. Collectively we have managed to guide yourBank through challenging times and have not been afraid to takesome very difficult decisions to ensure a better and moresustainable future for the benefit of all stakeholders.

I am confident that together with this strong team of Directors, weare well positioned to continue to provide the necessary stewardshipfor our organisation and achieve even more successes in the future.

My gratitude and appreciation goes to the Board of Directors, theManagement and the staff of the bank for their continuous hardwork, commitment and contributions. I also thank our shareholdersand our customers for placing their trust in our organisation.

I would like to conclude, by extending my deep gratitude to theBangladesh Bank, Bangladesh Securities and ExchangeCommission, Office of the Registrar of Joint Stock Companies andFirms, the Stock Exchanges for their support and valuable guidance.

May the Almighty Allah bless us in all our future endeavors.

Sayeed Hossain Chowdhury

Chairman


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The Board of Directors of ONE Bank Limited takes the pleasure in presenting the Directors report in this 14th Annual General Meetingbefore you along with the Audited Financial Statements for the year 2012. Also a brief overview of Global and Bangladesh Economy, Banksperformance and other matters relating to compliance of directives issued by Regulatory Authorities have been incorporated in this report.

A review of this report will reveal the Banks overall standing, its strength and growth trend in the prevailing competitive market.

Directors Report

1. GLOBAL ECONOMYThe world economy rebounded gradually during the first quarter of 2012 aftersuffering a major setback in late 2011. Concerns about financial stability in theeuro area and intense market stress threatened to pitch Europe, and possiblyall advanced economies, into another deep recession. However, a more robustpolicy response in Europe helped to stabilize markets, and activity in the UnitedStates continued to improve. In addition, most emerging market economies andlow-income countries maintained solid growth rates of around over 5 percent.Nevertheless, a broad set of indicators for global industrial production and tradesuggests that global growth did not strengthen further. Ongoing economic andfinancial difficulties in the euro area, combined with po litical uncertainties there,continued to pose a critical source of vulnerability to the global recovery as of

the end of 2012. All these together combined with worldwide economicsluggishness in terms of low output growth and high unemployment rates duringthe first three quarters of 2012, the worlds economy grew at a moderate rate of3.3 percent which is lower than the pace of 2011 (3.8 percent). The growth rateof the advanced economies slowed downward from 1.6 percent in 2011 to 1.3percent in 2012. On the other hand, growth in the emerging markets anddeveloping economies suffered due to the spillover effect of the advancedeconomies and their internal economic factors. Their growth rate went downfrom 6.2 percent of 2011 to 5.3 percent in 2012.

Consumer prices in advanced economies came down to 1.9 pe rcent in 2012. Inthe United States, the labor market improved gradually and wages declinedwhich resulted in the Consumer Price Index (CPI) inflation to fall from 3.1 percentin 2011 to 2.0 percent in 2012. Similarly, in the Euro area, inflation decreasedfrom 2.7 percent in 2011 to 2.3 percent in 2012 as wages remained stagnantover this period, while in emerging & developing economies, inflation droppedfrom 7.2 percent in 2011 to 6.1 percent in 2012.

The growth rate of world trade volume declined from 5.8 percent in 2011 to 3.2percent in 2012. In Exports, the growth rate for the advanced economiesdeclined from 5.3 percent in 2011 to 2.2 percent in 2012 whereas this ratedeclined from 6.5 percent to 4.0 percent in the emerging and developing

economies. On the other hand, the growth of Imports for the advancedeconomies fell from 4.4 percent in 2011 to 1.7 percent in 2012 and in theemerging and developing economies; it fell from 8.8 percent to 7.0 percent.

According to the Global Financial Stability Report (GFSR) by IMF, published inOctober 2012, the risks to global financial stability increased during the yeardue to eroded confidence in the global financial system. The Euro crisis remainsthe prime source of concern. The pressure on banks to shed assets was easedby the European Central Bank's (ECB's) special liquidity operations around thebeginning of 2012. However, in the wake of new rounds of quantitative easingmeasures, policy rates remained very low and central bank balance sheets

continued to expand in the major advanced economies. These unusuallyaccommodative monetary stances were transmitted to emerging marketeconomies in the form of undesirable exchange rates and capital flow volatility.

OBL Executive Committee

Inauguration of OBL Boalkhali Branch


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2. BANGLADESH ECONOMYDespite the global economic downturn and challenging domestic economicenvironment, the Bangladesh economy achieved an impressive growth of 6.3

percent during 2012. The strong demand and continued expansion ofinfrastructural facilities and a sustained high growth in the services sector helpedthe real economy to remain steady.

The expansion of the economy during 2012 was broad-based, registeringpositive growth by all sectors and sub-sectors of the economy. The monetarypolicy remained accommodative for productive economic activities with growthsupportive financial inclusion promotion measures in credit policies. It also firmlydiscouraged diversion and undue expansion of bank credit for wastefulunproductive uses to stem build-up of inflationary pressures.

GDP growth during the year 2012 was based on 9.5 percent growth in industrialsector, 6.1 percent growth in services sector and 2.5 percent growth in theagricultural sector. In the overall GDP growth of 6.3 percent in 2012, the servicessectors contribution was the highest at 3.0 percentage points, followed by theindustrial sector at 2.8 percentage points and the agricultural sector at 0.5percentage point.

Inflation remained high during 2012 mainly due to the upward trends in oil pricesin the international market and the sharp depreciation of Tk.. The annual averageinflation increased to 10.6 percent in June 2012 from 8.8 percent in June 2011,while the 12-month point to point CPI inflation declined to 8.6 percent. Broadmoney (M2) grew by 17.4 percent in 2012, which was lower than the 21.4percent growth recorded in 2011. Total domestic credit grew by 19.3 percent.The growth rate of credit to private sector declined from 25.8 percent in 2011 to19.7 percent in 2012. However, this was higher than the annual target of 16.0percent reflecting greater space provided by lower than expected governmentborrowing. Export earnings recorded a slower but positive growth of 6.2 percentduring 2012 reflecting weak demand from the European Union and the US forlow-end garment products from Bangladesh. The growth of import paymentswas at 5.4 percent. At the same time, remittances from non-resident Bangladeshinationals increased by 10.2 percent. The substantial increase in remittancesmore than offset the trade deficit and services deficit. Together, a surplus incurrent account balance and a surplus in capital account more than offsetting a

deficit in financial account led to a surplus in the balance of payments.

In 2012, output and investment activities continued to expand although some

macroeconomic volatility emerged. The real GDP growth rate was considerably

lower than the initial projection of 7.0 percent, mainly because of the lower than

expected growth in the agriculture sector. Agriculture sector output growth

declined significantly, from 5.1 percent in 2011 to 2.5 percent in 2012 as growth

in the crops and horticulture sub-sector declined markedly during the year. The

rise in production cost due to higher prices of fuel, and fertilizer contributed to the

slower growth of agriculture. While the forest and related services and fishing

sub-sectors attained higher output growth, the animal farming subsector achieved

a slightly lower growth and the crops and horticulture sub-sector experienced a

dramatic decline in growth rates in 2012 compared to those in 2011.

The improved power and energy supply helped the industry sector to achievean impressive growth of 9.5 percent in 2012 compared to 8.2 percent in 2011.

It was also aided by the spillover from last year's huge growth of imports ofcapital machinery and industrial raw materials. The growth rate in large andmedium scale manufacturing remained high although it declined slightly from2011. The small scale industry, on the other hand, experienced a higher growth

compared to that in 2011. This was supported by the increased credit facilitiesthrough the SME financing. The power, gas and water supply sub-sector grewremarkably, by more than two fold, mainly due to the strong policy support. Thegrowth in the construction sub-sector also increased significantly due to thehigher demand in the housing sector.

3. BANKING SECTORBanking sector of Bangladesh showed remarkable resilience in 2012. With aview to fostering a sound, efficient and stable financial system, the BangladeshBank began implementing a number of important policy measures whichincluded forceful emphasis on undertaking timely and effective risk management

practices by banks through the revised Risk Management Guidelines. TheBangladesh Bank issued new guidelines for loan classification on provisioningfor banks which came into effect from the last quarter of 2012. This guidelineincreased the amount of non-performing loans and provision requirements forbanks but in the long run it will elevate the banking practices to the best normsin the world.

In 2012, Bangladesh Bank continued to pursue a monetary policy stance whichwas designed to meet both output growth and inflation targets. In order to reducethe inflationary pressure, the Bangladesh Bank increased the repo and thereverse repo interest rates in two steps. They were increased from 6.75 and4.75 percent in 2011 to 7.75 and 5.75 percent respectively in 2012. Besides,the Bangladesh Bank continued to maintain the Cash Reserve Ratio (CRR) andthe Statutory Liquidity Ratio (SLR) for banks at 6.0 and 19.0 percent respectively.

The banks have strengthened their funding base over the year and are preparedto meet future credit demand and support economic growth. The risk weighted

capital adequacy ratio improved in 2012 from 10.35 in September 2011 to 11.31in June 2012. Most of the banks are now able to comfortably meet the regulatoryrequirements for core funding. The total deposit in the banking sector excludinginter-bank deposits stood at Tk. 5,006,827 million at the end of December, 2012as against Tk. 4,173,516 million in 2011 marking a growth of 19.97%. The totalbanking sector credit stood at Tk. 5,447,307 million at the end of December,2012 as against Tk. 3,773,470 million of 2011 registering a growth of 44.36%.Despite severe liquidity crisis, like the preceding years, Private CommercialBanks (PCBs) retained their leadership both in procuring deposits anddisbursing loans and advances.

An OBL financed Export Oriented RMG Factory

5th Extraordinary General Meeting of OBL

Directors Report


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4. BANKING INDUSTRY OUTLOOK 2013Banking sector is one of the most important components of the financial systemthat mobilizes resources for productive investments in a country which in turn

contributes to economic development. The banking sector has flourished duringthe last three decades or so as a result of increased demand of the growingeconomy. Soundness of the banking sector, which basically reflects on thequality of performance of the sector, is measured by indicators such as capitaladequacy, asset quality, management quality, earnings, liquidity and sensitivityto market risks (CAMELS). In line with Basel II requirement, to measure capitaladequacy banks have now adopted the Basel minimum capital requirement ina phased manner. Maintenance of asset quality was the major challenge in 2012and is feared to remain so in 2013. Some major sectors in the economy sufferedfrom external and internal events: textile sector faced tough time on inventorybuildup, ship breaking and commodity import businesses swindled on volatileinternational price, real-estate sector was stagnant with unsold inventory, andexport growth of RMG faced slow down. Considering the business and politicaloutlook in 2013, these sectors may not overcome woes overnight. Moreover,stricter loan classification criteria enforced by Bangladesh Bank from December2012 is expected to put further pressure on bank's distributable profit due toincrease of default loan and provision requirement. However, on the positive

side, increased provision requirement will strengthen the bank's shock absorbingcapacity in facing credit risk.

The financial soundness indicators manifested through only NPL ratio tell farless than required. Deterioration in banking governance and control practiceswere surfaced through the major instances of financial irregularities by fewborrowers. A series of regulatory investigation, tighter watch and stringentregulations are on cards to prevent any such incidence in future. Unless theconfidence towards those banks involved is restored, it will certainly have itsnegative impacts in coming days.

'Investment income from secondary market' which used to occupy a significantpie of revenue of banks and financial institutions (during 2009 and 2010) heavilyactive in stock market continued to shrink this year. Rather, hefty provision wasrequired to be made against loss of value of investments during 2012. Restoringinvestors' confidence will be a formidable challenge in 2013; bank's distributableprofit will have a considerable dependence on the outcome of the restoring

measures.

As the global regulatory environment is becoming tighter, global economicenvironment is facing more volatility and resources are getting scarcer, banksin Bangladesh will have to find innovative ways to conduct their business. Therewill be demand for higher capital and skilled human resources for smoothfunctioning of banks and for ensuring compliance in the coming days. Therefore,the banking sector in Bangladesh has to focus on using both its financial as wellas human resources in a far more innovative and efficient way to cater to thedemands of the future.

5. REVIEW OF PERFORMANCE OF OBLThe Bank could not grow as expected in terms of profit during the year 2012.This was due to the global financial crisis and its impact on the domestic

economy. The contribution of the Banks earnings from Capital Market activitiestowards profitability was very insignificant. Countrys Stock Exchanges werevery volatile and prices of the securities nosedived to the rock bottom. However,the Private Sector Banks in the country have grown to some extent by reapingthe benefits of SME and Agricultural sectors as constantly guided by the

directives of Bangladesh Bank. The regulators strived to restrain the inflationarytendencies in the economy by pursuing Credit Con traction Fiscal and MonetaryPolicy prescriptions.

Despite the challenges, ONE Bank Limited was able to record good progress insome of the important areas of operations in 2012. The Bank maintainedsatisfactory growth of asset and liabilities. Trade finance and other ancillarybusinesses recorded considerable growth as per the prevailing economicscenario. The bank further expanded its branch network and alternative deliverychannels. New IT based products and services were introduced. Regulatory

changes like new loan classification and provisioning policy had an impact onnet profit after provision and non-performing loan ratio. However, these changeswill help the bank cope up with the worlds best practices. A detailed financialanalysis on performance of OBL is given in the last part of this chapter.

Corporate Financing

OBL offers a wide range of advisory, financing and operational services to itscorporate clients through extensive branch network all over the country. Ourdedicated & experienced officers have competent managerial skill and in-depthprofessional knowledge of corporate & institutional business environment of thecountry.

To expedite our clients business growth, we provide complete range of solutionsto meet Corporate Customers' requirement. Our Corporate Banking solutionsinclude extensive range of products and services backed by moderntechnologies. Products and services for corporate clients are Working CapitalFinance, Project Finance, Trade Finance, Lease Finance, Syndication Loan,

Off-shore banking etc.

Lease Financing

OBL extends customized lease finance facility to Corporate Business Units andSME in the manufacturing and service industries sectors. The Bank offers assetbacked financing against industrial machinery, commercial equipments, officeequipments, generators, vehicles, sea or river vessels, engines, constructionequipments, Agriculture equipments etc.

For the year 2012, OBL recorded a Net Increase of Tk. 960 million in LeaseFinance portfolio compared to a Net Increase of Tk. 550 million in 2011.

Directors Report

An OBL Audit Committtee Meeting in Progress

An OBL financed Plastic uPVC Factory


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The benefits of CSR for companies, including increased profits, customer loyalty,trust, positive brand attitude and combating negative publicity, are well-documented. In the light of these known positive effects, CSR strategies havebeen embraced by the banking community. Bangladesh is also graduallybecoming proactive on Corporate Social Responsibility.

Bank has been keeping watch on the environmental and social impacts ofproposed undertakings and their implementation of equity of rights irrespectiveof gender, creed, and color etc. policies. The Bank strives to convince the clientsto pursue environment friendly and socially proactive & mitigate policies forsustainable development.

During the year 2012, OBL has spent a total of Tk. 12.11 million for CSRactivities. Details of CSR activities undertaken by the Bank during the year 2012are as below:

Contribution of Tk. 1.44 million only favouring The Institute of BankersBangladesh being ONE Banks contribution towards purchase of land/floorspace for the Institute of Bankers Bangladesh.

Payment of Tk. 0.482 million to 72 poor but meritorious students as a part ofScholarship Program.

Payment of Tk. 0.1 million as sponsor for Boishaki Mela held at RajarbaghPolice line.

Sponsorship of CDs of Tk. 0.1 million for Development of children throughEducational Songs.

Donation of Tk. 0.6 million favouring International Rice Research Institute(IRRI)

Payment of remuneration of Tk. 20,000/- (Twenty thousand only) per monthto a doctor for extending medical service to the poor of Joypara, Dohar, Dhakaas a part of Banks CSR activities.

Contribution of Tk. 0.126 million for medical eye camp in Dagon Bhuiyan,Noakhali.

Contribution of Tk. 0.1 million to Bangladesh Bannya Prani ShebaFoundation.

Distribution of 4000 pc of sweaters and woolen caps incurring Tk. 0.5 millionamong the homeless.

Contribution of Tk. 1.44 million only favouring The Institute of BankersBangladesh, (IBB) being 2nd installment of OBL towards purchasesland/floor space.

Payment of Tk. 2.283 million to 189 poor but meritorious students as a partof Scholarship Program.

Passenger shed of Tk. 4.5 million Contribution of Tk. 0.2 million for Paralympics.

6. RISKS & CONCERNSBanks are in the business of taking risk and devising risk mitigates for survivaland growth in order to ensure safety and adequate return for all stake holdersviz. share holders, depositors, borrowers, employees etc.

OBL strongly believes that risk management is crucial and bank managementis ultimately risk management. But at the same time, OBL focuses its riskmanagement as a tool for ensuring continuous and sustainable growth ofbusiness and profit through better trade-off between risk and return.

Our main risk arises from credit extension to the borrowers. Besides, other typesof risks are also there such as operational, market, concentration, liquidity, legal,

reputational, cross country etc. Considering all these, OBL risk managementsystem is designed to maximize risk adjusted returns while keep ing in view thatany viable business opportunity is not missed out.

The Risk Management framework of OBL has been established on the basis ofguidelines given by Bangladesh Bank vide DOS circular #02 dated 15thFebruary 2012.

The key elements of a Risk Management System are enumerated below:

An OBL financed Shipyard Project

OBL Basel II Committee

Directors Report

Risk management structurewith Board and Senior

Management

Board Audit Committee headed by anindependent director is responsible foroverall risk governance of the Bank.

Bank Risk Management Committee

(BRMC) is the apex forum that consists ofSenior Management.

ALCO, RMD, Investment Committee andother risk committees.

Organizational policies,

procedures and limits that

have been developed andimplemented

Adequate risk identification,

measurement, monitoring,

control and managementinformation systems that are

in place to support allbusiness operations

Established internal controlsand the performance ofcomprehensive audits todetect any deficiencies in theinternal control environmentin a timely fashion

Bank with the help of structured policies andprocedures is able to identify major sourcesof risk, e.g. credit, market, operation,liquidity, investment and reputation.

RMD and ICC submit periodic reports onseverity of risks.

Risk Management Policies and Proceduresfor major risk areas like Credit, Market,Operation and Investment are in place andreviewed periodically.

Bank has independent audit andcompliance functions.


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BASEL II

The BASEL II framework was introduced to ensure that financial institutionsmaintain capital to cover all types of risks not just Credit Risk as required inBASEL I. BASEL II accord dictates that banks should maintain capital to coverCredit Risk, Market Risk and Operational Risk. Besides capital adequacy,BASEL II also requires banks to enhance their Supervisory Review process aswell as Market Discipline through Disclosures to Public and Regulatory bodies.Combined they are more popularly known as the 3 Pillars of BASEL II.

Bangladesh Bank adopted the BASEL II framework and an ImplementationRoad Map was circulated to all commercial banks in Bangladesh with a targetto replace BASEL I framework with effect from January 01, 2010.

In line with Bangladesh Bank directives, the OBL BASEL II Committee wasformed in September 2006 headed by the Head of Operations. The committeecomprises all the Divisional Heads of the bank as well as related operationaldepartment heads. In addition, BASEL II Sub-committees were formed forimplementation of the different segments of the accord.

In order to strengthen the Supervisory Review process, a separate Risk

Management Division has been formed. The existing Compliance Departmentof the bank has also been further strengthened. Furthermore, a separate MIS(Management Information Systems) department has also been formed to ensuretimely and accurate flow of information to the Risk Management Unit as well asSenior Management. Besides this, software was also developed for accurateand automated calculation of Risk Weightage and capital requirement againstCredit, Operational and Market Risks.

OBL has met all the milestones set in the Bangladesh Banks Road Map and wasone of the first Banks to submit the BASEL II capital adequacy report in 2009.In addition, selection of External Credit Assessment Institutions has also beenconcluded. As per the regulatory road map, OBL commenced observing theBASEL II requirements with effect from January 2010. Since then we have beenobserving the BASEL II standards for our capital, supervisory review anddisclosures. OBL is now a fully BASEL II compliant bank.

7. INCOME DETAILSInterest IncomeInterest Income of the Bank grew by 31.20% to Tk. 8,551.52 million during 2012compared to Tk. 6,517.90 million for the previous year. The growth in incomewas derived from both interest earned on Loans and Advances and otherIncome.

Interest expense was Tk. 5,798.66 million in 2012 as compared to Tk. 4,559.22million for 2011 thus increased by 27.19%. Interests paid on deposits, particularlyTerm Deposits and higher interest rate on deposits exhibited a sharp upwardturn.

The Net Interest Income increased by 40.55% to Tk. 2,752.85 million during2012 as against Tk.1,958.67 million during 2011.

Towards providing for Statutory Liquidity requirements, the Bank continued toinvest in Government Treasury Bills. In addition, the Bank has also invested inshares of other legal entities. Income from such Investment was Tk. 552.39million during the year as against Tk. 1,441.43 million during 2011.

Commission, Exchange and Brokerage Income

Earnings from Commission, Exchange and Brokerage increased by 3.57% toTk. 1,016.39 million compared to Tk. 981.38 million in 2011, reflecting the Banksincreased focus on non-funded business.

Other Operating Income

Other operating income increased to Tk. 297.97 million during 2012 ascompared to Tk. 229.37 million for the previous year.

Total Operating Income

The total operating income stands at Tk. 4,619.61 million for 2012 as comparedto Tk. 4,610.85 million for the previous year.

Operating Expenses

Total operating expenses was Tk. 2,284.22 million for the current year comparedto Tk. 1,763.82 million for previous year.

Operating Profit

The Bank has earned an operating profit of Tk. 2,335.39 million compared toTk. 2,847.04 million in the year 2011. Though the operating income has risenfrom Tk. 4,610.85 million to Tk. 4,619.61 million, this has happened due toshortfall in the targeted profit from regular trading in the Stock Exchanges andunwarranted increase in interest expenses on deposits.

Provisioning against Loans & Advances

The Banks loan portfolio remained under periodic review and classificationmeasures were adopted as and when necessary. Classified loans represent5.52% of the Banks total Loans and Advances as against 4.47% of the previousyear.

Net Profit

After providing for provision and taxes, the Net Profit of the Bank for the year2012 was Tk. 1,055.43 million, compared to Tk. 1,448.56 million in the previousyear due to the reasons already cited under operating profit.

Dividend

The Net Profit of the Bank stood at Tk. 1,055.43 million as on December 31,2012. After transfer of Tk. 412.09 million to Statutory Reserve, the amountavailable for distribution was Tk. 643.34 million. The capital of the Bank was10.46% of the Risk Weighted Asset at the year end. Thus, together with previousyears retained earnings of Tk. 269.56 million, total amount available fordistribution to Shareholders was Tk. 912.90 million. The Board of Directorsrecommended 20% Dividend (15% Stock and 5% Cash Dividend) for the year2012. Accordingly, there will remain an amount of Tk. 83.85 million in the formof Retained Earnings.

Inauguration of OBL Chandgaon Branch

OBLs 21st Branch Managers Conference

Directors Report


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62

BSEC compliance issues- Status and RecommendationsFor the Year ended January-December 2012

Corporate Governance

.

3.1 (iii)All members of the audit committee should be financially literate and at least 1 (one)

member shall have accounting or related financial management experience.Complied

3.1 (iv) Filing of casual vacancy in committee Complied

3.1 (v) The company secretary shall act as the secretary of the Committee. Complied

3.1 (vi)The quorumof the Audit Committee meeting shall not constitute without at least 1 (one)

independent director.Complied

3.2

3.2 (i)The Board of Directors shall select 1 (one) member of the Audit Committee to be

Chairman of the Audit Committee, who shall be an independent director.Complied

3.2 (ii)Chairman of the audit committee shall remain present in the Annual General Meeting

(AGM).Complied

3.3 (i) Oversee the financial reporting process. Complied

3.3 (ii) Monitor choice of accounting policies and principles. Complied

3.3 (iii) Monitor Internal Control Risk management process. Complied

3.3 (iv) Oversee hiring and performance of external auditors. Complied

3.3 (v)Reviewalongwith themanagement, theannual financial statements beforesubmissionto

the board for approval.Complied

3.3 (vi)Review along with the management, the quarterly and half yearly financial statements

before submission to the board for approval.Complied

3.3 (vii) Review the adequacy of internal audit function. Complied

3.3 (viii) Review statement of significant related party transactions submitted by the management. CompliedDisclosed in Financial

Statements

3.3 (ix) ReviewManagement Letters/ Letter of Internal Control weakness issued by statutory auditors. Complied

Chairman of Audit Committee

3.3 (x)

When money is raised through Initial Public Offering (IPO)/Repeat Public Offering(RPO)/Rights Issue the company shall disclose to the Audit Committee about the

uses/applications of funds by major category (capital expenditure, sales and marketing

expenses, working capital, etc.), on a quarterly basis, as a part of their quarterly

declaration of financial results. Further, on an annual basis, the company shall

prepare a statement of funds utilized for the purposes other than thosestated inthe

offer document/prospectus.

Complied

3.4

3.4.1 (i) The Audit Committee shall report on its activities to the Board of Directors. Complied

3.4.1 (ii) (a) Reporting of conflict of Interest to the Board of Directors Complied

3.4.1 (ii) (b) Reporting of any fraud or irregularity to the Board of Directors Complied

3.4.1 (ii) (c) Reporting of violation of laws to the Board of Directors Complied

3.4.1 (ii) (d) Reporting of any other matter to the Board of Directors Complied

3.4.2

Reporting to the Authorities

If theAudit Committee has reported to the Board of Directors about anythingwhich has

material impact onthefinancial conditionand resultsofoperationand has discussedwith

the Board of Directors and the management that any rectification is necessary and if the

Audit Committee finds that such rectification has been unreasonably ignored, the Audit

Committeeshall report suchfindingto theCommission,uponreporting ofsuchmatters to

the Board ofDirectors for three timesorcompletion ofa period of6 (six) months fromthe

date of first reporting to the Board of Directors, whichever is earlier.

Complied

3.5

Reporting to Shareholders and General Investors

Reporting to theShareholders and General Investors: Report onactivitiescarriedout bytheAudit Committee, includingany reportmade to theBoardofDirectors under condition

3.4.1 (ii) above during the year, shall besigned bytheChairmanof the AuditCommittee

and disclosed in the annual report of the issuer company.

Complied

4.0

External/Statutory Auditors

The issuer company should not engage its external / statutory auditors to perform the

following services of the company; namely:

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

4. (ii) Financial information systems design and implementation. Complied

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

4. (iv) Broker-dealer services. Complied

4. (v) Actuarial services. Complied

4. (vi) Internal audit services. Complied

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

4. (viii)No partner or employees of the external audit firms shall possess any share of the

company they audit at least during the tenure of their audit assignment of that company.Complied

5.0

5 (i)Provisions relating to the composition of theBoard of Directors of theholdingcompany

shall bemade applicable to the compositionof the Boardof Directors of the subsidiarycompany. Complied

5 (ii)At least 1 (one) independent director on the Board of Directors of the holding company

shall be a director on the Board of Directors of the subsidiary company.Complied

5 (iii)Theminutesof theBoardmeetingof thesubsidiarycompanyshall beplaced for reviewatthe following Board meeting of the holding company. Complied

5 (iv)

The minutesof therespectiveBoardmeetingof theholdingcompanyshall state that they

have reviewed the affairs of the subsidiary company also. Complied

5 (v)TheAuditCommitteeof theholdingcompanyshall also reviewthefinancial statements, inparticular the investments made by the subsidiary company. Complied

6.0

6 (i) (a)Thesestatementsdonot containanymateriallyuntruestatement oromit any material factor contain statements that might be misleading; Complied

6 (i) (b)Thesestatements togetherpresenta trueandfair viewof thecompanys affairsandarein

compliance with existing accounting standards and applicable laws.Com

Documents

one bank Annual_Report_2012.pdf