Dhaka Bank Limited and its subsidiaries Independent Auditor's Report and Audited Consolidated & Separate Financial Statements For the year ended 31 December 2016 BDBL Bhaban (Level -13 & 14), 12 Kawran Bazar Commercial Area, Dhaka - 1215, Bangladesh. ACNABIN Cbartered Accowntants BDBL Bhaban (Level-13 & 14) Telephone: (88 02) 81.44347 ro 52 1.2 Kawran Bazar Commercial Area (88 02) 8189428 to 29 Dhaka-121.5, Bangladesh. Facsimile: (88 02) 8144353 e-mail: <[email protected]> Web: www.acnabin.com INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF DHAKA BANK LIMITED Report on the Financial Statements We have audited the accompanying consolidated financial statements of Dhaka Bank Limited and its subsidiaries namely Dhaka Bank Securities Limited and Dhaka Bank Investment Limited ("the Group") as well as the separate financial statements of Dhaka Bank Limited ("the Bank"), which comprise the consolidated balance sheet of the Group and the separate balance sheet as at 31" December 2016 and the consolidated and separate profit and loss accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for the year then ended and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements and Internal Controls Management is responsible for the preparation of consolidated financial statements of the Group and also the separate financial statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting Standards as explained in note # 2.1.7 and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that are free from material misstatement, whether due to fraud or error, The Bank Company Act, 7997 (Amended in 201"3) and the Bangladesh Bank Regulations require the management to ensure effective internal audit, internal control and risk management functions of the Bank, The management is also required to make a self-assessment on the effectiveness of anti-fraud internal control and report to Bangladesh Bank on instances offraud and forgeries. Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate financial statements of the Bank 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 consolidated financial statements of the Group and the separate financial statements of the Bank are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements of the Group and separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation # -indrynd"nt*.u.,"t BAKER TILLY Branch Office :Jahan Building No.7 (1st Floor, North Side), 59 Agrabad Commercial Area, Chittagong-4100, Bangladesh. INTERNATIONAL Tel: (+63-931; 2511352, Fax: (+36-931; 2517353, E-mail: <[email protected]>, Web: www.acnabin.com ACNABIN Cbartered Accomttants of consolidated financial statements of the Group and separate financial statements of the Bank that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements of the Group and also separate financial statements of the Bank. 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 consolidated financial statements of the Group and the separate financial statements of the Bank give a true and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December 2016, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards as explained in note # 2,1.1. Report on Other Legal and Regulatory Requirements In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act, 1997, (Amended in 2013) and the rules and regulations issued by Bangladesh Bank, we also report that: [a) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; (b) to the extent noted during the course of our audit work performed on the basis stated under the Auditor's Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the separate financial statements of the Bank and considering the reports of the management to Bangladesh Bank on anti- fraud internal control and instances of fraud and forgeries as stated under the Management's Responsibility for the Financial Statements Financial Statements and Internal Control: i) internal audit, internal control and risk management arrangements of the Group and the Bank as disclosed in note # 2.36 to the financial statements appeared to be materially adequate; ii) nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or anything detrimental committed by employees of the Bank and its related entities; (c) financial statements of the subsidiaries of the Bank have been audited by us and have been properly reflected in the consolidated financial statements; [d) in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it appeared from our examination of those books; $ unaeraeft member of BAKER TILLY INTERNATIONAL ACNABIN Cbartered Accountants (e) the consolidated balance sheet and consolidated profit and loss account ofthe Group and the separate balance sheet and separate profit and loss account ofthe Bank dealt with by the report are in agreement with the books of account; [0 the expenditure incurred was for the purposes of the Bank's business; [g) the consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in conformity with prevailing rules, regulations and accounting standards as well as with related guidance issued by Bangladesh Bank; (h) adequate provisions have been made for advances which are, in our opinion, doubtful of recovery; (i) the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements; (j) the information and explanation required by us have been received and found satisfactory; and [k) we have reviewed over B0o/o of the risk weighted assets of the Bank and we have spent around 3,200 person hours for the audit ofthe books and accounts ofthe Bank, 4*^^ Dhaka, ACNABIN 30 April 2017 Chartered Accountants j a inaeoenaed ffiber of BAKER TILLY INTERNATIONAL ACNABIN Cbartered Accormtdnts Dhaka Bank Limited and its Subsidiaries Consolidated Balance Sheet As at 31 December 2016 3t.L2.20t6 3L.L2.20L5 Taka Taka PROPERTY AND ASSETS Cash 3 [a) t6,7L5,75A,759 L4,966,422,1O9 Cash in hand (including foreign currencies) 3.1 (aJ I ttez,+onii-1 , 1"s4t?oesia- Balance with Bangladesh Bank and its agent bankfs) 3.2(a) l_t+,gfi,zso,oo+ I B,+zz,ztz,szs I Iincluding foreign currencies) Balance with other banks and financial institutions 4[a) 1L,229,4A3,4A5 LO,2L2,560,426 In Bangladesh a.1@) 8,640,709,728 6,724,357,465 Outside Bangladesh a.2@) 2,588,773,757 3,488,208,961 Money at call and on short notice 5 [a) 1,051,300,000 15,300,000 Investments 6(a) 23,783,240,894 Ttsiii"Bso^:osl23,O72,924,O90 Government Others 3,435,073,785 I Loans, advances and lease/investments 7 (a) 118,184,490,515 Loans, cash credits, overdrafts, etc./lnvestments 7.I(a) L31,707,1,73,368 f ilslge,B3o,szs l Bills purchased and discounted B[aJ z,zs+,0+g,g+o __, 4r9n1363 I ) Fixed assets including premises, furniture and fixtures e(a) 4,201,264,375 4,t09,853,726 Other assets 10(a) LL,4393OA,527 6,630,271,559 Non-banking assets 11[aJ 23,166,O33 23,166,033 Total Assets 2O3,276,9L2,804 L77,2L4,978,459 LIABILITIES & CAPITAL Liabilities Borrowings from other banks, financial institutions and agents L2(a) LL,496,B73,LSO LO,B34,730,4ZO Deposits and other accounts 13 (a) L56,756,94A352 r38,59r,50L,745 Current accounts & other accounts I no't.,+ii,iii) rs..-B2sli,iri1, Bills payable 2,047,637,778 - 7,267,436,384 Savings bank deposits 16J35,239J321 I u,so+,284,81ti Term deposits ffO,AAO,OO:,:eZ nagzz,ogs,zoo l i l_ l Non Convertible Subordinated Bond T4 3,800,000,000 1,400,000,000 Other Liabilities 15(aJ L6,3O8,1L3,2O7 12,677,L74,983 Total Liabilities 18436L934,709 L63,5O3,4O7,149 Capital/Shareholders' Equity Equity attributable to equity holders