Annual Report 2018 1 CONTENT About the Report 04 Financial Statements of Meghna Bank Limited General information Auditor's Report 90 Vision and Mission 07 Consolidated Balance Sheet 93 Core values 09 Consolidated Profit and Loss Account 95 Corporate Directory 10 Consolidated Cash Flow Statement 96 Code of Conduct & Ethics 11 Consolidated Statement of Sponsors 15 Changes in Equity 97 Shareholders 21 Balance Sheet 98 Board of Directors 24 Profit and Loss Account 100 Committees of the Board 37 Cash Flow Statement 101 Management Committee 38 Statement of Changes in Equity 102 Liquidity Statement 103 Stakeholders’ Information Notes to the Financial Statements 105 Five-Year Financial Summary 48 Financial Highlights 155 Value Added Statement 49 Graphical Presentation of Performance 50 Financial Statements of Meghna Bank Securities Limited Directors' Report 157 Strategic Overview Auditor’s Report 159 Message from the Chairman 54 Statement of Financial Position 161 Managing Director & CEO’s Round up 58 Statement of Comprehensive Income 162 Statement of Changes in Equity 163 Statement of Cash Flow 164 Risk & Governance Notes to the Financial Statements 165 Directors' Report 61 Risk Management Framework & Functions 68 Disclosures on Risk Based Supplementary Information Capital Adequacy (Basel III) 71 Events 173 Credit Rating 83 Branch Network 178 Report of the Audit Committee 85 Notice of the 6th AGM 181 Directors’ Responsibility Statement 87 Proxy Form 183 CEO & HoFAD’s Responsibility Statement 88 2 3 ABOUT THE REPORT Presenting the sixth integrated Annual Report, Meghna Bank Limited (MGBL) seeks to provide an overview of the integrated nature of the bank’s business strategy and operations combining economic, environment and social facts during the financial year 2018. As a fourth generation bank in Bangladesh, the bank fully recognizes its responsibility towards society. Long term sustainability of the bank depends on the successful ties and engagement with shareholders, customers, employees, community, environment and other stakeholders. This forms the basis for integrated thinking and integrated reporting of the bank. The integrated approach seeks to enable stakeholders to make informed assessments and decision on MGBL, inter alia, its strategy, operational and financial performance, social and environment responsibility, corporate stewardship and future prospects. Towards this end, the bank has progressively moved towards transparency and cohesiveness in its reporting efforts, combining financial reporting including statutory reporting requirements with management commentary and sustainability reporting. Report Scope This integrated Annual Report of MGBL presents financial and non- financial information of the bank for the financial year ended 31st December 2018 which was derived from the economic, social and environmental performance of the bank. It has been prepared in line with the Integrated Reporting Framework issued by the International Integrated Reporting Council. Financial Statements that appear in this report have been prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IASs & IFRSs) as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB). Where applicable, the bank has followed the following rules and regulations of the country: The Companies Act, 1994 The Bank Companies Act, 1991 (amended in 2013) Securities and Exchange Rules, 1987 International Accounting Standards and International Financial Reporting Standards (IASs & IFRSs) The Income Tax Ordinance, 1984 Relevant Rules, Regulations and Circular of Bangladesh Bank Any other applicable laws and regulations of the land Reporting Boundary and Materiality The Annual Report this year comprises reports covering the bank’s operations spanning the head office and the branch network for the financial year ended 31st December 2018. Wherever relevant, the preceding years’ performance and indicators have been reflected for comparative analysis. In addition, the report also provides summary reviews on the performance of MGBL’s subsidiary named Meghna Bank Securities Limited for the year ended 31st December 2018. External Assurance and Test of Compliance The Financial Statements together with related notes are audited by M/s. MABS & J Partners, Chartered Accountants, Bangladesh and their assurance is given on page 90 of this Report. SL Description of Report External Assurer Consolidated and Separate Financial MABS & J Partners 1 Statements of Meghna Bank Limited Chartered Accountants Basu Banerjee Nath & Co. 2 Financial Statements of Meghna Bank Securities Limited Chartered Accountants 3 Hoque Bhattacharjee Das & Co. MGBL Employees Provident Fund Chartered Accountants Forward- looking statements In this Annual Report we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements – written and oral – that we periodically make, may contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance. 4 We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, our actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Presentation Printed copies of this report will be posted to shareholders and regulatory bodies are in line with MGBL’s commitment towards Green banking for reducing the corporate’s carbon footprint. However, this report will be made available on the official website at www. meghnabank.com.bd in PDF formats. Contact Questions and inquiries on this Integrated Annual Report 2018 and information presented therein are to be directed to: The Head of Financial Administration Division Meghna Bank Limited Head Office Suvastu Imam Square (3rd Floor) 65, Gulshan Avenue, Gulshan – 1 Dhaka – 1212, Bangladesh PABX: +880 29857251, 9857045, 9857089, 9851669 FAX: +880 29857124, 9857128 Email: [email protected] 5 VISION To be recognized as an essential Institution for the unbanked through zealous participation in the financial inclusion process. MISSION To be among the best service provider in the industry by ensuring complete customer satisfaction through the application of technology, professionalism & nursing. 6 VISION To be recognized as an essential Institution for the unbanked through zealous participation in the financial inclusion process. MISSION To be among the best service provider in the industry by ensuring complete customer satisfaction through the application of technology, professionalism & nursing. 7 Values we cherish 8 CORE VALUES To remain, at all times, a completely compliant financial institution and a responsible corporate citizen. To ensure a sustained growth of the Institution and meet the desired tangible as well as intangible expectations of the Shareholders. Customer needs customer care and customer satisfaction to be central to all our operating activities. To foster a healthy work-environment and a pleasant in-house culture in order that Meghna Bank is considered an ideal Institution to be associated with. 9 CORPORATE DIRECTORY Registered Name Meghna Bank Limited Legal Status Public Limited Company Date of Incorporation March 20, 2013 Date of Commence of Business May 09, 2013 License issued by Bangladesh Bank March 28, 2013 Enlistment as a Schedule Bank April 03, 2013 Chairman H. N. Ashequr Rahman MP Vice Chairman Shakhawat Hossain Chairman, Executive Committee Md. Kamal Uddin Chairman, Audit Committee Uzma Chowdhury Chairman, Risk Management Committee Tanveer Ahmed Managing Director & CEO Adil Islam Head of Internal Control & Compliance Subir Mazumder Head of Audit Mohammed Kaiser Head of Financial Administration Division Sajib Kumar Saha, FCA Board Secretary Md. Rafiqul Islam Khan, FCS Authorized Capital Tk.2,000.00 Crore Paid Up Capital Tk.469.90 Crore Number of Branches 47 Number of ATM Booths 16 Registered Address Suvastu Imam Square (Level-03 & 06) 65, Gulshan Avenue Gulshan – 1, Dhaka – 1212 Auditor MABS & J Partners Chartered Accountants SMC Tower (7th Floor) 33, Banani C/A, Road – 17 Dhaka – 1213, Bangladesh Tax Consultant Hoque Bhattacharjee Das & Co. Chartered Accountants Cosmic Tower (9th Floor) 106/ka, Box Culvert Road, Dhaka-1000 Telephone +880 29857251 Fax +880 29857124, 9857128 Email [email protected] Website www.meghnabank.com.bd SWIFT MGBLBDDH 10 CODE OF CONDUCT Meghna Bank emphasize the importance of an effective Code of Conduct to the promotion of fair and ethical practices by all individuals involved within the banking institution as the Code of Conduct is a fundamental basis to support the bank’s mission and its business operations. Our employee Code of Conduct applies to everyone who works at Meghna Bank Limited. The Code of Conduct of Meghna Bank Limited