bml annual report 2010 - english

7/28/2019 BML Annual Report 2010 - English

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Bank o Maldives PLC

11, Boduthakuruaanu Magu,

Male 20094,

Republic o Maldives.

Company Registry No. C-22/1982

Tel: + (960) 332 2948

Fax: + (960) 332 8233

SWIFT: MALBMVMV

www.bankomaldives.com.mv

email: [email protected]

Layo and Desin:

Masterpiece Pvt. Ltd.

www.themasterpiece.biz


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We will lead the way through quality o service and dedication o our sta. Wewill serve all our communities to the best o our ability, strive always to listen toyour needs and so build total customer condence and satisaction.

Bank o Maldives PLC Naions Bank


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To be the leader in the nancial services industry in Maldives, spreading its

presence in all key economic geographies in Maldives.

To be the leader in the nancial services industry in Maldives, inculcating a long

term saving culture in the nation and promoting a cashless society

To be one o the most Ecient, Protable and Respected nancial institution in

Maldives.


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Only indigenous Bank in Maldives

Over 28 years o pioneering banking services in the Maldives

Over 290,000 loyal deposit account holders

Over 40,000 lending relationships

Over 780 dedicated employees

Largest nancial network with 25 branches and 37 ATMs in the Maldives

The market leader in Electronic Banking with card issuance and acquiring with a wide network o

POS terminals

Introduced Maldives Mobile Banking Services, providing added fexibility or customers

Interbank unds transer acility between 25 branches in key islands and atolls across the Maldives

Appropriate liquidity prole

Strong customer relationships

Government stake and support

Long term unding lines rom international unding agencies

Growing correspondent banking relationships

Only public listed bank in the Maldives

The commitment to create lasting value or the people o Maldives

Facilitator o inrastructure development to enhance the living standard o the local community


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Resaed

2010 2009 Cane

Resls or e Year

Gross Income 830,195 958,726 -13%

Prot beore Taxation 125,065 78,382 60%

Net Prot ater Tax 49,572 42,967 15%

Resls a e Year End

Shareholders Equity 1,382,093 1,332,520 4%

Deposits rom Customers 7,012,579 7,826,185 -10%

Customer Advances (Net) 6,082,298 6,575,197 -7%

Total Assets 9,972,594 10,980,011 -9%

Inormaion per Ordinary Sare

Earnings - Basic (R ) 9.21 7.98 15%

Net Asset Value (R ) 257 248 4%

Market Value at Year End (R) 143 120 19%

Raios

Return on Average Shareholders Equity 3.7% 3.2% 14%

Return on Average Assets 0.5% 0.4% 16%

Price Earnings Ratio (times) 15.5 15.0 3%

Saory Raios

Capital Adequacy (Statutory Requirement 12%) 20.4% 19.3% 5%

(All amounts in Ruyaa thousands unless otherwise stated)

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(All amounts in Ruyaa millions)

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(All amounts in Ruyaa millions)

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Chairmans Message 16

Board o Directors 18

Board o Directors (Former Directors) 21

Acting Managing Directors Review 23

Corporate Management 25Senior Management Team 28

Head Oce Management Team 29

Branch Management Team 30

Management Discussions 34

Development Banking 36

Human Resources 37Corporate Social Responsibility 40

Risk Management 41

Financial Review 44

Directors Report 46

Audit & Risk Management Committee Report 51

Appointment, Nomination & Remuneration Committee Report 53Independent Auditors Report 57

Investor Inormation 107


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Dear Sareolders,

With the grace o Almighty Allah, on behal o the

members o the Board o Directors, let me take the

privilege o presenting the Annual Report o the Bank o

Maldives PLC or the year ended 31st December 2010.

2010 was a year o immense global challenges ranging

rom economic to political turbulence aecting the

local business environment and economy at large. Eventhough the markets pulled back rom the ace o

uncertainty rom the nancial crisis o year 2008, the

economy continued to ace the ater eects o it.

NatioNal EcoNomy

In these telling circumstances the Maldivian economy

continued to recover mostly in the tourism sector and

other mainstream industries, although the downturn in

the sheries sector continued throughout the year. GDP

grew by 4.8%, Infation was at 6% based on Consumer

Price Index (CPI) or Male, inching up rom 5% levelso 2009. The nancial market continued to experience

liquidity constraints in oreign currency and the Bank

was no exception in this regard.

Tourist arrivals rose by more than 20% during the year

with a signicant increase in Asian tourists, although

there was a all in average stay. The addition o more than

3,000 beds during the year holds promise or the year

ahead about sustaining growth and increasing tourism

related revenue.

The year saw decentralization initiatives mainly in the

area o delegation o powers to Atolls and Islands.

PErormaNcE

The year 2010 continued to be a year o consolidation,

ocusing on improving quality o the Banks asset

portolio. As a conscious eort, the Bank did not expand

its loan assets.

Concomitantly, the Bank shed some high cost deposit

unds to improve interest margins. Despite a reduced

loan portolio, Bank achieved 87% o gross income oprevious year at R 830 million. The prot beore tax

improved by R 47 million over 2009 to R 125 million.

A higher tax outfow o R 75.5 million has resulted in a

marginal increase in the Net Prot at R 50 million. The

delay in recovering the existing non perorming loans

continues to demand huge provisioning rom prots.

Thereore, the Bank is unable to declare any dividend to

the shareholders or the year 2010, however, we will work

towards reversing the situation during the course o 2011.

In this context, I would urge the shareholders to take note

that higher allocation or provisioning and retaining the

prots is enhancing the shareholders value and holding

higher promise or reward rom uture prots.

corPoratE GovErNaNcE

The Board has continuously upheld adherence to

the Corporate Governance Code o Capital Market

Development Authority (CMDA) and o the Bank. In this

regard, the Boards Committees were reconstituted in line

with stipulated guidelines and industry best practices.

The Whistle Blowing mechanism established in year

2009 proved to be a key instrument in ostering goodgovernance throughout.

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maNaGEmENt aNd HumaN rEsourcEs

The Corporate Management o the Bank demonstrated

considerable resilience to ensure that there was no

disruption in business subsequent to the departureo the CEO in May 2010. The Board has identied

Mr. Peter Horton to be the new CEO ater extensive

search and intensive ltering. He brings with him vast

experience in Corporate Credit, Retail Banking and Asset

Reconstruction, to take the Bank to higher levels o

growth and protability.

People are denitely a companys greatest asset. It

does not make any dierence whether the product is

cars or cosmetics. A company is only as good as the

people. As articulated in the preceding quote o amous

businesswoman Ms. Mary Kay Ash, I rmly believe thatthe Banks biggest asset is its committed employees.

The Bank made sincere eorts in development o

employees through scholarships, training and grooming

programmes. The Bank continues to place a premium on

sta quality, welare and development.

During the year, the Bank revised the Service Rules

to align with the Employment Act (Law No. 2/2008)

and to oster a more productive work environment.

The culture o teamwork, commitment and excellence

continues to prove to be the driver in providing

excellent customer service. Bank has also ormulateda policy on Workplace Non-Harassment to ensure a

congenial work environment or its employees.

lookiNG aHEad

It is always wise to look ahead, but dicult to look

urther than you can see. (Winston Churchill,1874-1965).

With signs o recovery in the economy, the opportunities

in the market will surely grow and Bank is poised to seize

these opportunities enabling improvement in asset

quality and ensuring better returns or shareholders. Agreater ocus will be given to customer satisaction and

improving service standards.

Despite the challenging business environment,

we oresee a successul year ahead through accelerated

recovery o stressed assets and improving risk

management processes.

I am condent the Bank will thrive to meet expectations

o the citizens by being the Nations Bank.

aPPrEciatioN

I would like to express my thanks to the unrelenting

loyalty, support and understanding o our shareholders

and stakeholders, and wish to convey my heartelt

appreciation to the employees o all levels o the Bank or

their dedicated eorts.

My deep appreciation goes to the ormer Minister

o Finance and Treasury, Mr. Ali Hashim, and to the

Acting Minister, Mr. Mahmood Razi, or their continued

guidance and stalwart support. Thanks also to the

Governor o Maldives Monetary Authority, Mr. Fazeel

Najeeb, and his team or the accommodative approachand insightul guidance provided throughout the year.

On behal o the Board o Directors I convey my gratitude

to His Excellency President Mohamed Nasheed and his

cabinet or their continued eorts in the development o

the nancial sector as well as the economy.

I wish to oer particular thanks to my colleagues,

Directors past and present, or their valuable contribution

in guiding and directing the Bank towards our vision.

Directors do not always agree on everything but we

have managed to make decisions on various matters, as

a democratic body, objectively and collectively, without

having a need to cast a Chairmans vote.

As a nal note, i must acknowledge and congratulate

Mr. Peter Horton on his rst year as our new Chie

Executive Ocer. During the ew months o his oce,

he has consistently demonstrated the creativity and

keen strategic insight we have been looking or in a chie

executive. I am absolutely condent that, with his proven

track record, the CEO will build exceptional value or the

shareholders now and well into the uture.

May Almighty Allah bless and guide us all and bestow on

us the will and strength to achieve greater heights in our

uture endeavours.

a ibh

Chairman o the Board o Directors

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m. a ibhIndependent, Non-Executive Director

He is the sole proprietor o Asraee Bookshop and has been managing

his business or the past 33 years. In addition he has over 23 years

experience in the eld o Education. He holds a Masters o Arts in

Education, Bachelor o Sciences Degree in Mathematics, and a Diploma

in Proessional Educational Practices rom Macquarie University o

Australia. Mr. Adam Ibrahim was appointed by the Government as a

Director and the Chairman o Bank o Maldives PLC on 07th August 2009

and was reappointed on 30th

October 2010. He holds no shares in BML.

m. ahh NeenNon-Independent, Executive Director

She was the Acting Managing Director and Chie Executive Ocer

o the Bank rom 29th August 2010. Ms. Aishath Noordeen is the

Assistant General Manager or Card Operations, Electronic Banking,

Inormation Technology, International Banking and Correspondent

Banking Division.

Prior to joining Bank o Maldives PLC in the year 1982, she served at

State Bank o India Male Branch. Over a career expanding 30 years in the

banking industry, she has gained vast exposure in Trade Finance and

International Banking Operations and has been involved in establishing

and maintaining numerous correspondent banking relationships

and inter-bank lines. She has represented and led the Bank on

numerous occasions.

The Government has been appointing her to the Board o Directors o

Bank o Maldives PLC since 13th June 2008 and was last reappointed on30th October 2010. Ms. Aishath Noordeen holds no shares in BML.

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m. a aNon-Independent, Non-Executive Director

He is the Managing Director o Novelty Printers and Publishers

Pvt. Ltd. and the Managing Director o Dritwood Maldives Pvt. Ltd. Heholds a Bachelors Degree in Business Administration rom University o

Ottawa o Canada. Mr. Asad Ali was appointed to the Banks Board on

07th August 2009 and was reappointed on 30th October 2010. He

holds 100 shares in BML.

m. mhe Jh ibhIndependent, Non-Executive Director

He is the Chairman o Central Utilities Ltd. He holds a First Class Honors

Degree in Interior Architecture rom the University o Nottingham Trent,

England. Mr. Mohamed Jaish Ibrahim was appointed to the Banks Board

on 07th August 2009 and was reappointed on 30th October 2010. He

holds no shares in BML.

m. Nh mhe rzIndependent, Non-Executive Director

She is the Head o Economic Policy and Business Facilitators Section o

Ministry o Economic Development. She is also a member o the Board o

Directors o Island Aviation Services. She holds a Masters in International

Accounting and Finance rom Carse Business School, City University,

London and a Degree in Economics rom Trinity College, University o

Cambridge, UK. Ms. Nuha Mohamed Riza was appointed to the Board on

30th October 2010. She holds no shares in BML.

m. Hn mzn mheIndependent, Non-Executive Director

He is the Assistant General Manager and Head o Cargo Clearance

Department o Maldives Ports Limited. He holds a Bachelor o

Sciences Honors Degree in Computing and a Post Graduate Diploma

in Technology Management rom Staordshire University, UK.

Mr. Hassan Muzni Mohamed was appointed to the Banks Board on

30th October 2010. He holds no shares in BML.

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m. ahe mheIndependent, Non-Executive Director

Mr. Ahmed Mohamed holds a Masters in Economics (Public Policy), and

a Bachelors Degree First Class Honours in Engineering Sciences rom theUniversity o Hull, UK. He has served as an appointed member o the

Board since 13th June 2008 and was subsequently elected to the Banks

Board by the public shareholders on 07th August 2009 and 30th October

2010. Mr. Ahmed holds 30 shares in BML.

m. mhe ab s

Independent, Non-Executive Director

Mr. Mohamed Abdul Sattar is the Managing Director o Cocoa Huts

Pvt. Ltd. He holds a Master o Business Administration rom University

o Wales, UK. He was elected to the Board o Directors o the Bank by

the public shareholders o the Bank rom 08th September 2004 to 29th

June 2005. On 30th October 2005, he was appointed to the Board o

Directors by the Government o Maldives and was last reappointed on

13th June 2008. On 07th August 2009, he was elected again to the

Board o BML by the public shareholders o the Bank and was re-elected

once more on 30th October 2010. He holds 2,300 shares in BML.

m. ibh mheIndependent, Non-Executive Director

He is the Managing Director o Tropical Island Holidays Pvt. Ltd. and

Osprey Fisheries Pvt. Ltd. He is also an Executive Director o Gasveli

Islands Pvt. Ltd. Mr. Ibrahim Mohamed holds a Master o Sciences

Degree in Tourism rom University o Strathclyde, UK and a Higher

National Diploma in Business and Finance (Tourism) rom South

Glamorgan Institute o Higher Education, University o Wales, UK.

He was elected by the public shareholders to the Banks Board on

07th

August 2009 and re-elected again on 30th

October 2010. He holds960 shares in BML.

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m. Gnen sbn

Former Managing Director & Chie Executive Ocer (CEO), Non-Independent,

Executive Director

Mr. Subramanyam resigned rom the Board eective 16thAugust 2010.

He joined the Bank as the Chie Executive Ocer on 01 st July 2009 and was

subsequently nominated as a member o the Board o Directors by the Maldivian

Government and was appointed to the Board at the Annual General Meeting

held on 07th August 2009. He worked at the Bank o Maldives PLC rom

05th July 2009 to 16th August 2010.

uz. i y


Uz. Yasir ceased to be a Director eective 30th October 2010.

He is the Deputy Minister o Tourism Arts and Culture. Uz. Ismail Yasir was

appointed to the Banks Board on 13th June 2008 and was reappointed on

07th August 2009. He holds no shares in BML.

m. mhe ah


Mr. Athi resigned rom the Board eective 27thJune 2010.

Mr. Mohamed Athi was appointed as a Director to the Banks Board on

07th August 2009. He holds no shares in BML.

m. eeh shee


Ms. Fareeha resigned rom the Board eective 08th May 2010.

She is a member o the Board o Directors o Maldives Pension Administration

Oce and the Managing Director o FJS Consulting Pvt. Ltd. She wasappointed to the Banks Board on 07th August 2009. Ms. Fareeha Sharee holds

200 shares in BML.

m. azbn h


Mr. Fahmy ceased to be a Director eective 12th December 2010.

He is the Finance Director o Noorban and Brothers Company Pvt. Ltd. He holds no

shares in BML. He ceased to be a Director with eect rom 12th December 2010 as

per Chapter 5, Section 15(c) o the Maldives Banking Act (Law No. 24/2010).

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The commencement o 2010 brought the promise o

positive outcomes against a challenging outlook or

the global economy. However, despite extensive and

collaborative eorts to revive the global economy,

outcomes were restrained in such that numerous

challenges which developed post global crisis ailed to

abate over the course o the year. Though progressiveground was covered, the level o economic activity

remained below the pre-crisis era, and the application o

a ull recovery or the nancial industry, the world over,

remains subdued.

Nn En

Notwithstanding a rise in infation, the national GDP

growth is expected to be closer to 5%, leaving behind the

3% contraction o the previous year. This is contributed

by a 22% growth in tourist arrivals and committed

oreign investments. The bed capacity in the tourismindustry has increased by 16%. Fisheries continued to

remain subdued, only redeeming actor being increase

in sh purchases or processing and export, towards the

end o the year.

nn Pene

As we undergo a phase o recovery, the journey though

bitter has been a rewarding experience across numerous

acets. We believe that this transition phase we are in is

delivering us to what is gradually developing to be a more

mature, competitive and sel sucient organization.

Over the year, the Bank continued its consolidation

phase with a view to allocate maximum available prots

towards loan loss provisions. The delays in the legal

system in enorcing the Banks claims on assets

nanced by it or recovering its loans kept the provision

requirements high.

During the year, the loan assets reduced by R 493 million

to R 6.1 billion. However, the Bank has not turned down

during the year, any request or credit representing air

banking risk, or want o liquidity. With a view to improving

the interest margins, the Bank shed some o its higher

priced big ticket deposits. This resulted in a reduction o

R 814 million in the deposits during the year.

The Bank also reduced its borrowings by R 295 million.

The cumulative eect o these was the Bank could

generate 87% o gross income o previous year at

R 830 million. With reduction in interest expenses and

maintaining sta costs at 2009 levels, the prot beore

tax improved to R 125 million or the year rom R 78

million or 2009. Incidence o higher tax pay out o R

75 million resulted in the net prot or the year being

R 50 million.

By adding R 143 million to specic provisions, the

provision cover was maintained at 31% at the end o the

year. The Capital Adequacy Ratio improved to 20%.

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P n P dee

The Banks tie up with China UnionPay Card during the

year synchronized with the rising tourist arrivals rom

Asia, thus increasing revenue. Meanwhile the Bank alsointroduced issuance o American Express Debit Cards.

The Bank added value to its customers by launching

Maldives Mobile Banking Services, allowing services

such as retrieving account inormation and making own

account und transers possible via their mobile phones.

Similarly, the introduction o Customer Service SMS

allows customers to receive service prompts or their

enquiries. Further, to cater to the needs o the citizens

wanting to take up higher education, the Bank introduced

Kiyavaa loan scheme on liberalized terms. This product

has been well received by the customers.

Five branches were relocated to better reach our

customers while our operating hours were increased

or customer convenience. The Bank has also arranged

or installation o ATMs at the newly opened oce

building at Velaanaage where Government Oces

have been relocated.

r mngeen

The gradual shit to Risk Focused Internal Audit has

strengthened the risk management processes. The

revised Liquidity Management Policy introduced

during the year enabled the Bank to meet its business

plan without liquidity stress. The Credit Policy ensured

higher levels o risk assessment at entry level. The Bank

introduced a Credit Rating Model or individuals and

has put in place hurdle rates or credit dispensation. The

NPA Review Committee was hands on in ollowing up

stressed assets. The Bank has introduced a Procurement

Policy to bring in eciencies in quality and cost o its

procurement. A Bid Evaluation Committee deliberates

on all procurement requirements. The Audit and Risk

Management Committee at apex level has provided the

necessary guidance in implementing these measures.

Hn ree deepen

The Bank strongly believes in ostering the human

resources and invested heavily towards our greatest

asset. As a due result we continue to remain among the

most highly sought ater employers in the country.

cpe Genne

The Bank continued to strengthen corporate governance

measures throughout the year. The Whistle Blowing

mechanism acilitates employees to raise concerns

on governance issues directly to the Audit and Risk

Management Committee o the Board. The Committee

successully investigated the issues raised and enorced

appropriate actions. As a major initiative to keepShareholders inormed o the Banks perormance and

achieve greater transparency the Bank gives immense

importance to publish quarterly accounts.

appnen New cEo

The Board appointed Mr. Peter Horton as the new CEO o

the Bank during February 2011. He brings with him vast

experience in Corporate Credit, Retail Banking and Asset

Reconstruction. We look orward to achieve higher levels

o growth and protability with his guidance.

anwegeen

The Bank appreciates the guidance and contributions

derived rom all the stakeholders.

Our gratitude goes to:

BML customers or their loyal patronage.

The management team and BML sta or their

commitment and dedication to their job.

The multinational agencies, IFAD, AFD, EIB,IDB, ADB and IFC or partnership with BML in

developmental banking projects and technical

capacity building.

Our international correspondent banks or their

trade lines and unding support.

Chairman o the Board o Directors, Mr. Adam

Ibrahim and the individual Directors.

Governor o Maldives Monetary Authority Mr.

Fazeel Najeeb and ocials o Maldives Monetary

Authority.

Chie Executive Ocer o Capital Market

Development Authority and the ocials o CMDA

and the Maldives Stock Exchange.

Former Minister o Finance and Treasury Mr. Ali

Hashim, Acting Minister Mr. Mahmood Razi and

ocials o the Ministry.

ahh NeenActing Managing Director

Male, February 2011

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m. ahh NeenActing Managing Director / Assistant General Manager

Ms. Aishath Noordeen is the Assistant General

Manager or Card Operations, Electronic Banking,

Inormation Technology, International Banking and

Correspondent Banking Division.

Prior to joining Bank o Maldives PLC in the year 1982,

she served at State Bank o India Male Branch. Over

a career expanding 30 years in the banking industry,

she has gained vast exposure in Trade Finance and

International Banking Operations and has been

involved in establishing and maintaining numerous

correspondent banking relationships and inter-

bank lines. She has represented and led the Bank on

numerous occasions.

She served as the Acting Managing Director and

Chie Executive Ocer or the latter part o 2010,

consequent to the resignation o ormer Managing

Director and CEO.

m. Pee HnChie Executive Ocer

Mr. Peter Horton is a British citizen and joined the

Bank on 24th February 2011. His initial contract is or a

period o 03 years. He has a BSc. Honours in Financial

Services (First Class) and is an Associate o Chartered

Institute o Bankers (London).

He has been working in the International arena since

1999, having actually started his banking career with

Barclays in 1984, gaining signicant exposure to the

operations o a Bank and understanding all aspects

o the operations o Banking, including Retail and

Corporate Credit. During his banking career he has

successully led teams in the Risk, Distressed Debt and

Corporate arenas. He has been involved at a strategic

level in ormulating banks wide credit policies and

in implementing business transormations and

restructuring.

Prior to joining the Bank Mr. Peter Horton worked as

the Corporate Director o First Caribbean International

Bank, Bahamas and Turks and Caicos Islands.

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m. reh khnnChie Credit Ocer

Mr. Ramesh Krishnan joined the Bank as Chie Credit

Ocer in November 2009.

He is a graduate in Physics and a Certied Associate o

Indian Institute o Bankers (CAIIB). In a banking career

expanding over 25 years, he has gained exposure

across a wide spectrum o banking activities across

three dierent Banks in India. He is a specialist in Credit

and Treasury Management which include approvaland assessment o loans, recovery, NPA management,

investments, domestic treasury, risk management and

oreign exchange. He has also counselled on raising

cross currency resources through external commercial

borrowings, trade credits and private equity.

Prior to joining BML, he served as Deputy General

Manager o State Bank o Hyderabad at Mumbai

managing the largest credit portolio o the bank.

m. lnh thennnChie Financial Ocer

Mr. Lasantha Thennakoon joined the Bank as Chie

Financial Ocer in June 2010.

He is a Chartered Accountant by proession and holds

Associate Membership o the Institute o Chartered

Accountants o Sri Lanka (ACA), the Institute o

Certied Management Accountants o Sri Lanka

(ACMA), Fiji Institute o Accountants (CA) and the CPA

Australia (ASA). He is also a graduate in Accountingand Financial Management and holds a Master o

Business Administration (MBA). He counts over 13

years experience in nancial management both in

Sri Lanka and overseas in various industry segments

including Banking and Finance, Business Advisory and

Manuacturing.

Prior to joining BML, he was the General Manager

Finance and Administration (Chie Financial Ocer)

o the Fiji Development Bank, a leading Bank in the

South Pacic and was responsible or managing

Finance, Treasury, Management Inormation System(MIS) and Administration Business Units. Apart rom

the specialized business disciplines in Finance and

Treasury, he has had extensive training in Strategic

Planning, Corporate Governance, Risk Management

and Quality Management in various business

segments.

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m. ln JChie Internal Auditor and Chie

Compliance Ocer

Mr Lucian Jayakody joined the Bank in

October 2006.

He holds a Master o Business

Administration (MBA), Certied Internal

Auditor (CIA) USA, Certied Inormation

Systems Auditor (CISA) USA, Associate

o Charted Institute o Bankers London

(ACIB), International Certicate inBanking Risk and Regulation (ICBRR)

GARP-USA, and he is a Member o the

Institute o Internal Auditors USA (IIA), a

member o Inormation Systems Audit

and Control Association USA (ISACA)

and a member o Global Association o

Risk Proessionals (GARP) USA.

His experience in senior management

positions in the nancial sector extends

over more than 20 years. He was the

Head o Internal Audit in MERC Bank SriLanka, AGM Operations, Administrations

and Inormation Resource Management

in Pan Asia Banking Corporation Sri

Lanka, Senior Manager in Operations

and Systems Audit in Hatton National

Bank, Sri Lanka. He is a specialist in

productivity and system re-engineering

and has had extensive training in this

eld in Asian Productivity Organisation

(APO) Japan.

m. hh mneAssistant General Manager

Ms. Fathimath Manike is the Assistant

General Manager or Development

Banking, Human Resources and

Operations. She joined the Bank

in 1982.

She commenced her banking career

with the State Bank o India, Male

Branch in 1978. Throughout her

career she has gained immense

exposure in banking operations and

development banking. Having been

engaged in development banking

activities since 1992, she is among

the pioneers o development

banking in the Maldives.

She has participated in various

training programmes and workshops

held across South and South East

Asia covering development banking,

poverty alleviation and Islamic

Banking and Management.

m. N HnAssistant General Manager

Ms. Nadiya Hassan is the Assistant

General Manager who heads

the Non-Perorming Assets

Management Section under the

Credit Department. She joined the

Bank in 1985.

Prior to joining the Bank she served

at the Maldives Monetary Authority.

In a banking career spanning

over 29 years, she has gained vast

experience in corporate banking

and loan syndications. She also has

extensive experience in relationship

management with wide exposure

to tourism and related industries in

the Maldives.

She has participated in numerous

training workshops related to

lending activities.

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m. a ahe d

Head o Inormation Technology

m. hh rhee

Head o Internal Audit

m. mhe ahe

Head o Development

Banking Cell

m. Nh abwh

Head o Finance

m. hh rhee

Head o Legal Aairs &

Documentation

m. Hn sh

Head o Human Resources

m. mhe shee

Head o BML Card Centre

m. ahe rhee

Head o Operations

m. Hn rhee

Head o Training

m. mhe Hee

Head o Public Relations &

Administration

m. yn a

Head o International Banking

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m. ab rhee mhe

Manager Central Cash Unit

m. ahh Ng ab

Ghee

Manager Corporate Aairs

m. anh shheen

Manager / Card Centre Operations -BML Card Centre

m. ahh Nhee

Manager / Products Development -

BML Card Centre

m. anh shz

Manager Finance Department

m. ibhh ahe seeManager New Proposals & Renewals

Section, Credit Department

m. ahe Nz

Chie Manager

Internal Audit Department

uz. ahh sh

Company Secretary

m. hh meeh J

Manager - Development Banking Cell

m. rh JManager - Monitoring and Supervision

Section, Credit Department

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m. H ahe

Chie Manager - Main Branch

m. hh ab

Manager Villimale Branch

m. mhe meen

Manager - Male International

Airport Branch

m. ahe

Manager Hulhumale Branch

m. Hn rhee

Manager - Main Branch

m. Z mhe

Manager - Majeedheemagu Branch

m. ibh a

Chie Manager - Bazar Branch

m. Hn mn

Manager - Majeedheemagu Branch

m. y uManager - Bazar Branch

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m. ab azeez r

Manager - Kudahuvadhoo Branch

m. ab sbh

Manager - Dhidhdhoo Branch

m. anh rhee

Manager - Hithadhoo Branch

m. ab shee

Manager - Veymandoo Branch

m. ahe sh

Manager - Villingili Branch

m. hh Nhn

Manager - Gan Branch

m. ab rhee ab Bee

Manager - Naiaru Branch

m. ab sj

Manager - Ungooaaru Branch

m. anh W

Manager - Mahibadhoo Branch

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m. Hn Nee

Manager - Fonadhoo Branch

m. m shzeen

Manager - Hulhumeedhoo Branch

m. shhee mhe

Manager - Rasdhoo Branch

m. ibh Zh

Manager - Muli Branch

m. mhe ibh

Manager - Eydhaushi Branch

m. Hn ab

Manager - Fuvahmulaku Branch

m. mh u

Manager - Funadhoo Branch

m. ab sh

In-Charge - Manadhoo Branch

m. Hbeeb aIn-Charge - Kulhudhuushi Branch

m. mhe aIn-Charge - Thinadhoo Branch

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Bank o Maldives PLC continues to be themost dominant orce within the banking

industry o Maldives. With the range

o products and services oered, the

extent o our reach and our signicant

customer base, the commitment to

provide an unparalleled service to our

customers remain a top priority.

StRENgthENINg OuR

OOthOLD

Being the leader in providing banking

products and services does not rule out

delivering exceptional service to our

customers. The value we place on our

customers is refected in our continuous

eort to enhance their banking

experience, through introduction and

innovation o our products and services

in line with our vision.

Despite the challenging economic

and operational environment whichpersisted over the year, we achieved

signicant milestones towards delivering

another remarkable year o results or

our customers. With the continued

extension o service, enhanced

deliverance and introduction o new

products, the year marks a success story

or the Banks eorts to deliver greater

customer value.

With a reach spreading across the

length and breadth o the Maldives,we had 37 ATMs in operation, while our

POS terminals exceeded 2,600 units.

Our integrated network across resorts,

businesses and service establishments

enables the Bank to hold the major

market share o card acquiring or

Visa, MasterCard, China UnionPay and

exclusive rights o American Express

transactions. China UnionPay Card

acquisition inauguration was also

undertaken in March 2010, which is

amongst the astest growing and most

popular card brands within Asia.

ADDINg VALuE

Furthermore, in May 2010, the Bank added to its card product range the

American Express Debit Card. With this prized addition, the Bank issues

the ollowing cards:

Visa Credit

Visa Debit

American Express Credit

American Express Debit

Visa Corporate cards

In committing to provide exceptional service to our clients, we continued

to provide ree Internet Banking to our customers through the standard

package. Adoption o internet banking among customers has been

very popular, as it acilitates customers to avoid commuting to a branch

to undertake their banking operations. With investments in state o the

art security eatures to our Maldives Internet Banking, customers are

ensured o the security o their transactions, ensuring hassle ree banking

anytime, anywhere.

Celebrating 5 years o partnership with American Express

34

Additionally, the inclusion o BillPay service provided via Maldives

Internet Banking allows customers to conveniently conduct transactions

with numerous business partners including Dhiraagu, Wataniya, STELCO,

MWSC, Raajje Online (RoL) and MediaNet.

It is all part o our commitment to provide a more convenient

banking experience.


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service via simply sending an SMS, acilitating to avoid

waiting in line to be serviced. Accordingly, one o our

representatives would initiate the call to our customer,

and provide assistance in addressing the customer

concerns.

With a view to providing a more convenient experience

or our customers, we relocated ve o our branches

during the year. The new state o the art branch premises

were custom built and designed to ensure that optimal

utility o these new premises are realized not only or the

Bank but to all our customers as well.

The relocation o branches undertaken during 2010

applied to:

Male International Airport Branch

Hulhumeedhoo Branch

Fuvahmulaku Branch

Villingilli Branch

Thinadhoo Branch

Further to the relocations, the Bank also commenced

operations at the renovated Male International Airports

departure hall, which acilitate greater convenience or

our customers.

thE ExtRA MILE

Listening to the concerns o our customers and delivering

is a custom well recognised at the Bank. In this regard,

we shited our operating hours so as to deliver greater

convenience or our customers. In application, our normal

banking operation hours changed to 0900 to 1500

hours, while operations at our Bazar Branch remained

uninterrupted rom 0900 to 1700 hours. Thus, adding

two and a hal hours o business time per week.

Maldives Mobile Banking was launched in October 2010,

as a urther measure o providing innovative customeroriented solutions. With this much awaited concept,

which is the rst in the Maldives, the Bank enabled

customers to access their account and card related

inormation via SMS prompts.

Through this popular initiative, customers are able to

receive numerous account and card related alerts to

monitor their account movement ensuring greater

security o unds and ease o mind or our customers.

Addressing the concerns o our customers in receiving

assistance, we initiated our Customer Service SMSprogramme also in 2010.

This mechanism enables customers to lodge a request or

Launching o Maldives Mobile Banking a frst in the Maldives.

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These loans signicantly contribute to improving the

livelihood o rural communities, alleviating poverty and

creating employment opportunities. Our reach extends

to all economic sectors both in the public and private

sectors and to customers rom largest o corporate

entities to individual borrowers.

RELOCAtION O AtOLL BRANChES

During the year, our atoll branches were relocated to

new premises with a view to provide more convenient

service to our customers.

Development Banking Cell (DBC) was established in 1990

to provide banking services to areas outside the capital

o the country with the vision o improving the living

standards and providing sustainable nancial services

with a particular ocus on the low income population.

The main objective o this is to reduce the income

disparity between the Male and rest o the country by

increasing the employment opportunities, income level

o outer atoll population.

There are a total o 19 branches in the atolls dedicated to

servicing the island communities. In addition, ve mobile

banking units (Bank Dhonis) are being used to provide

mobile banking services to the entire country.

During the year 2010 Development Banking Cell (DBC)

has improved its perormance in terms o credit, recovery

o non-perormance assets and cost control by training,

allocation o resources and attributing incentives to

strategic goals.

INANCINg SMALL AND MEDIuMENtERPRISES (SME)

The Bank continued to be actively engaged in nancing

Small and Medium Enterprises in sheries, agriculture

and commerce sectors.

Financing SME Sector Brick making

Financing SME Sector Promoting Agriculture

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Induction Training - 2010

I times o trouble showcase to represent its truestrength, our greatest contributor to this would be

our valuable employees. Our ability to continue and

compete given the challenges is much credited to the

commitment showcased by each employee, day ater

day in the service o the Bank.

In an extremely turbulent operating environment, the key

challenges related to human resources revolve around

keeping pace with development and change, valuing

and motivating sta, retaining their loyalty, building their

condence and listening to employees concerns.

The Bank strongly believes in ostering the human

resources and towards this end the ollowing activities

were undertaken during the year

174 employees underwent the Banks in

house training;

23 employees were deputed or trainings abroad;

03 employees were awarded local scholarships or

pursuing higher education locally;

05 employees were granted paid study leave or

upgrading their academic qualications;

In order to equip the Banks sta with the

necessary skills and knowledge to occupy

Corporate Management Positions o the Bank

in uture, 02 candidates were chosen or the

Executive Grooming Programme approved by the

Board o Directors;

97 new employees were enrolled into the Banks

workorce;

05 graduates were recruited directly as ocers;

Rotation o sta among the various positions othe Bank commenced with a view to upgrading

knowledge, skills and awareness among the

employees;

Bank o Maldives Service Rules was amended in

line with the Employment Act (Law No. 02/2008) o

Republic o Maldives and;

Bank o Maldives rst Workplace Non-Harassment

Policy was introduced and implemented during the

year 2010 in order to ensure a sae and congenial

work environment or its employees.

KEEPINg PACE wIth DEVELOPMENtAND ChANgE

As our sta strength has been increasing, it is vital to

develop ecient internal policies and practices or

attraction and retention o talent. Consequently, the

revised Service Rules o Bank o Maldives was ully

aligned as per Employment Act (Law No. 2/2008) and was

implemented eective October 2010. Our Service Rules

consists o guidelines on aspects such as sta recruitment

and selection, discipline, overtime, other allowances, sta

benets and sta leaves and breaks.

Furthermore, to comply with the Maldives Pension Act

(Law No. 8/2009), the Bank announced its Retirement

Pension Scheme on December 2010, or all sta eective

rom January 2011. The Retirement Pension scheme

requires 7% o basic salary to be contributed monthly

by the Bank matched by an equal contribution rom the

employee. The Bank continues to operate its existing

Provident Fund Scheme or its employees with changes

in the contributions pattern.

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LIStENINg tO OuR EMPLOYEES

In order to provide a sae and respectable work

environment to our employees, Bank o Maldives

Workplace Non-Harassment Policy was implementedeective October 2010. The Bank has a policy o zero

tolerance on harassment and the policy aims in creating

a workplace ree o any behaviour that can potentially

be deemed as harassment. The Policy elaborates on

the responsibility o the Human Resource Department,

Individual, Complaint Procedure, Protection against

intimidation and retaliation and the Right to Appeal.

SuCCESSION PLANNINg

As a great source o recognition or our employees and to

enhance employee development, during the year 2010

an exclusive programme was designed as Executive

Grooming Programme to equip sta with necessary

skills and knowledge to occupy Corporate Management

Positions o the Bank.

PROMOtINg SYNERgY

Our belies and behaviours are the oundations o our

culture. We place signicant eort throughout the year

to oster mutual reliance among our employees to

promote collaboration and teamwork. To promote sta

collaboration, the Bank organized an Inter-Department

Futsal Tournament and an Inter-Department Volleyball

Tournament. Furthermore, the Banks employees

represented the organization in the Inter-Organization

Mixed Netball Tournament and Club Maldives Futsal

Tournament. The benets achieved through promoting

such activities are refected in the synergy gained in our

ability to better service our customers.

DEVELOPINg SKILLS O EMPLOYEESAND tEAMS

Given the rapid pace o transormation in businesses,

work organisation and the labour markets, training and

skills development plays a critical role in:

Enhancing employees perormance levels;

Increasing their employability within the

organisation;

Recognising employees and developing loyalty;

Transmitting the corporate vision, mission and core

values o the organisation.

With the aim o creating a highly motivated and capable

workorce, training opportunities were given during the

year or a number o sta rom all levels o the Bank to

participate in various overseas training programmes,

as well as training programmes conducted by local

institutions.

In this respect 23 sta participated in 14 short term

training programmes/seminars overseas. A total o 09

sta participated in 05 training

programmes organized by local

institutions. Additionally, 05 batches

o in-house training programmes

were conducted as induction

or new sta and or branch/

department level sta aimed at

achieving procedural compliance

and sharpening required skills o

sta.

In addition, the ollowing training

programmes were organized by the

Training Department o the Bank:

1. Credit Assessment Procedures,

2.Training on Amex Debit Card,

3.Training on Signature

Verication and Identication

o Forged Notes (in collaboration

with Maldives Police Service)

4. EBS-RT (Report Tailoring)

Training (in collaboration withMisys)

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INVEStINg IN LONg tERMRELAtIONShIPS

Believing in lasting partnerships is a undamental concept

to our business. While much o such ocus relies on ourrelationship with customers, our attitude to our employees

is no exception, showcased in the

investment we place in developing

and enhancing our employee base,

by means o scholarships, unded

education and allowing leave or

those individuals pursuing urther

skills development.

During the year, 05 employees

were awarded Study Leave with

Pay under the Banks Study LeavePolicy. In this regard, 03 sta

pursued undergraduate degree

programmes, while 02 sta pursued

Association o Chartered Certied

Accountants (ACCA) in Malaysia

and Sri Lanka.

Further, 02 sta who were awarded

Study Leave with Pay in 2009 returned to duty ater

completing their study programmes overseas. Local

sponsorship opportunities were also provided or 03

sta during the year to undertake ACCA and CharteredInstitute o Management Accountants (CIMA) at local

institutions. Under this scholarship scheme employees

are required to work while undertaking the study

programmes.

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Recognition o newly inducted employees


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At the Bank, Corporate Social Responsibility (CSR) goes

beyond a simple act o altruism. For us it is a management

tool to ensure that the company, its people, and its

surroundings are in line with our mission, vision and

core values.

The positive impact on our society which is refected by

our CSR initiatives motivates us to remain committed

to causes that promotes overall social benet o our

stakeholders. Despite the diculties o recent times, this

commitment remains arm.

PARtNER IN SOCIEtY

Our role in the society we operate has become more

prominent over time, beyond that o a nancial

intermediary. Today we remain a vital contributor in

acilitating smooth commerce across the economic

sectors o the country. From making a single deposit,

withdrawing unds, acilitating salary disbursements,

providing nance or residential and corporate sectors,

extending our service to remote locations, we aim at

making the Bank a vital component in our society.

In adding to the extensive range o services provided

through our expansive network, the Banks role in

acilitating Old Age Pensions is another notable addition.

While dedicated teams visited each and every inhabited

island on a routine basis, our activities extended during

such Dhoni banking trips urther acilitated account

opening, making withdrawals via POS terminals and

enabling deposits. Overall, our extensive solutions

provide a fexible and convenient gateway or conducting

banking transactions, unmatched by our competitors.

In collaboration with Ministry o Fisheries and Agriculture,

the Bank disbursed loans on concessionary terms to

the development o agricultural activities under the

Agricultural Development Program 2. Through this

scheme numerous customers across dierent areas o

the country received unding assistance to help revitalize

their livelihood. Similarly, the Bank in collaboration

with Ministry o Human Resources, Youth and Sports

undertook over 1,200 loans under National Student Loan

Scheme to provide assistance in unding urther studies

pursued both locally and internationally. In addition,

the Bank introduced Kiyavaa loan product to meet

the educational expenses o aspiring students under

liberalized terms.

CORPORAtE PhILANthROPY

Bank o Maldives takes concrete action to combine

perormance with social responsibility, not just in our

routine business activities but also through our corporate

philanthropy initiatives. Over the year, the Bank assumed

a more responsible stance, by extending our support tonumerous activities. We take pride in having contributed

to bone marrow transplants or Thalassaemic patients

and extending sponsorships in recognition o Fishermans

Day. We rmly believe that such opportunities acilitate

us to extend our gratitude to the valued stakeholders.

ENVIRONMENt

We rmly believe that a truly responsible organization has

its due commitments to its surroundings. In upholding

this view the Bank initiated on numerous steps to analyze

our impact on the environment. In this regard, signicant

expenses were borne by the Bank which would positively

contribute to our environment. Measures such as

adoption o duplex printers, creating greater awareness

o Maldives Internet Banking or our customers and

implementation o resources which reduces paper waste

were implemented to showcase our commitment to the

environment. Though some o these measures entailed

outlay o capital expenditure, we rmly believe the

longer term benets rom such initiatives outperorm the

costs incurred.

utuRE ENDEAVOuR

In order to cater to the evolving business environment,

we commenced initial reviews or establishing an Islamic

Banking arm o the Bank, in 2009. The Bank is working out

a business and capital plan. The Bank is endeavouring to

build more partnerships to assist cross border trade.

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The Bank is continuously exploring ways to improve

the quality o service provided to its customers by

implementing customer-oriented strategies.

The spill-over eects o the economic crisis to the

perormance o the Bank was oreseeable and as a result,

the Bank has exercised cautionary measures to minimize

possible negative impacts on the Banks loan portolio.

This has led to a contraction in our lending growth.

As an inherent part o conducting business, we are subject

to risks that can adversely impact our business, results ooperations, nancial condition and uture perormance.

Business related risks carry the potential to materially

and adversely aect our business, results o operations or

nancial condition.

RISK MONItORINg

Risks that are readily quantiable have their risk proles

restricted through numerous measures. Non-quantiable

risk categories are not managed in terms o dened

nancial limits, but by qualitative management standards

and procedures, which aims or air accountability o such

potential risk.

Our mission is to be the leader in

the nancial industry in Maldives.

Along with maintaining a clear

customer centric ocus, eective risk

management is crucial in achieving

this goal. It is a key component

o our corporate culture, our

infuences, customer experiences,

public perception, our reputation

and shareholder expectations; all

in all being a dening component

o our present perormance and

uture success. Managing risk is a

undamental activity perormed at

all levels o the organization, which

are oten governed by policies that

have been approved by the Board.

The Bank h as establ i shed

committees at various levels

in order to capture and reportall orms o risks in addition to

implementation o inancial,

operational and compliance controls and procedures or

identication, assessment and reporting o risk exposures.

Such monitoring also provides the required inormation

which is reported to respective regulatory authorities on

a routine basis.

CREDIt RISK

Credit risk is the risk o potential nancial loss where a

customer or counterparty ails to meet their nancial

obligations. The Banks Credit Policy addresses soundrisk management practice and is in accordance with the

regulatory requirements. The measurement o credit

risk or individuals is based on an internal credit risk

rating system.

Various methods o appraisal are used or evaluation o

a credit proposal ranging rom past track record with

the Bank, analysis o nancial strength o the applicant,

assessment o uture cash fows and verication o

sources o repayment. The Bank has also set in place

certain benchmarks and norms with regard to repayment

capacity and project nancing ratios in order to maintainasset quality.

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CREDIt DIVERSIICAtION

The Bank has been assisting commercially viable

activities in all sectors to build a balanced asset portolio.

The Bank has set internal caps on sector exposures toachieve this balance in portolio and adhering to these

limits. The diversication is closely aligned to the share o

contribution o various sectors to the national GDP.

RECOVERY EORtS INIMPLEMENtAtION

The global downturn had a serious impact on the local

economy through adverse eects on all major sectorssuch as tourism and construction. In order to provide

cash fow relie to the Banks customers engaged in such

activities, credit acilities were renegotiated by reducing

monthly instalments or extending loan tenor by aligning

them with revised cash fow expectations.

Recovery eorts o non-perorming loans are a high

priority or the Bank and in this regard, a separate

section specially ocused on this priority - NPA Retrieval

Section, continues to endeavour to reduce the number o

impaired assets o the Bank.

NPA Review Committee

meetings are conducted

routinely or monitoring

the development o such

assets.

LIquIDItY RISK

Liquidity Risk is dened as

the risk o being unable

to honour inancial

obligations as they all

due, without incurring

unacceptable losses, which

could potentially arise as

a result o mismatched

cash fows generated by

the Bank. The Bank has three strong controls in place

to manage its liquidity risk, namely, in-house Treasury

Operation, Liquidity Management Policy and the Assets

& Liabilities Committee (ALCO). Both Ruyaa and

US Dollar positions are managed very closely and ona daily basis.

ce defn P

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MARKEt RISK

Market risk is the potential

or loss arising rom adverse

changes in the level andvolatility o market actors

such as oreign exchange

rates, interest rates, lease

residual values, and prices

o commodities and equity

investments.

The Bank actively manages

its market risks through its

ALCO, Credit Committee and

associated policies relating to

liquidity and credit risk.

OPERAtIONAL RISK

Operational risk is the risk o loss or harm resulting

rom inadequate or ailed internal processes, people

and systems or rom external events. An element o

operational risk is embedded in all activities o the Bank,

including controls used to manage and mitigate risks.

The Bank manages the risks th rough a ramewo rk o

policies, procedures, controls, organizational structure,

risk management and monitoring mechanism that are

closely aligned with overall operational activities o the

Bank.

The Bank ensures that the key opera tional ri sks are

measured and managed in a timely and eective manner

through enhanced operational risk awareness, segregation

o duties, dual checks and improving early warning

signals. The Chie Internal Auditor o the Bank reports

directly to the Audit and Risk Management Committee

o the Board, which independently reviews all unctional

areas o the Bank to identiy control weaknesses and

recommend implementation o internal controlling

mechanism.

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The magnitude and the due repercussions o the global

nancial crisis continued to exert pressure on the Banks

perormance during 2010.

INCOME

Total Interest Income in 2010 stood at R 582 million,

refecting a decline o 11% against 2009. Meanwhile,

Interest Expenses reduced by 20%, refecting a Net

Interest Income o R 406 million which represents a

decline o 6% against 2009.

Given the volatility in the global market, especially

within the Euro region, there was signicant variation

in exchange rates during the year. Though the US Dollar

liquidity constraints in the economy continue to aect

our ee based income negatively, the Bank was able to

maintain Net Fees and Commission Income at 2009

levels.

OPERAtINg ExPENSES

Total Operating Expenses refected a decrease o 24 %

against 2009.

Continued pursuance o business opportunities and

new services, refected in a 10% increase in Premises

Equipment and Establishment Expenses or the year.

Meanwhile, Sta costs increased by a marginal 2% during

2010. This eat was achieved despite an increase in head

count by 4% or supporting additional operational

activities adopted during the year.

ASSEt COMPOSItION

Total Assets at the year end stood at R 9,973 million,

refecting a decrease o 9% against 2009. The contraction

in our assets portolio refects upon the prudential

outlook we adopted post global nancial crisis. Loans and

Advances portolio reduced by 7% against 2009, which in

turn negatively impacted the Net Interest Income.

Containing our lending policy and the oreseen reduction

in Interest Income, imposed the challenge o managing

our Net Interest Income. In due eect, numerous

measures were implemented towards minimizing the

negative implications. Signicant reduction in Interest

Expenses against 2009 refects the benets derived rom

shedding higher cost liabilities and reduced borrowings.

LIABILItY COMPOSItION

Movement o deposit unds throughout the year was

rather volatile with signicant und outfows occurring

as a consequence o external actors and internal

management policies. Governments policy to implement

Treasury Single Account implied that signicant unds

held with the Bank drited out o the Bank contributing

heavily to the decline in deposits. Furthermore, internal

policies which involved reduction o high cost deposits

also contributed to the overall decline.

Borrowings or the year refect a decrease o 19%

against 2009 gures. The reduction in Borrowings was

due to numerous actors, including the reduced asset

portolio and internal liquidity management strategies.

The unstable global nancial market, the high cost o

borrowing and restrictive resources ollowing the global

nancial crisis all imposed challenges to accessing low

cost borrowings.

ShAREhOLDERS uNDS

Shareholders Funds grew by 4% against 2009. The

incremental addition to the Shareholders Funds is on

account o the R. 50 million accounted or the year as

Retained Earnings.

The Banks Capital Adequacy Ratio at the end o the year

stood at 20.4%, refecting an improvement in comparison

to 19.3% accounted or 2009.

utuRE OutLOOK

The Maldivian economy is building momentum and

showing signs o recovery with the worst o the global

nancial crisis now being over. However, the journey

ahead remains challenging as we continue to be

vulnerable to external actors.

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cpn dep Be


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BOARD COMPOSItION

In accordance with Article 47 o the Articles o Association

o the Bank, out o the total 11 Directors o the Boards

composition, 08 Directors were nominated by the

Government and elected by the Shareholders while

the remaining 3 Directors were elected by the General

Public Shareholders. Furthermore, pursuant to Articles 79

and 80, the Chairman and the Managing Director were

appointed by the Board o Directors rom among the

elected Directors nominated by the Government. This

composition alls in line with the newly enacted Maldives

Banking Act (Law No. 24/2010) which came into orce on12th December 2010.

In compliance with Corporate Governance Code o

Capital Market Development Authority, the Board o

Directors o the Bank is composed to exempliy a mix o

Executive, Non-Executive and Independent Directors so

that the Board o Directors o the Bank is able to provide

equitable, ecient and eective guidance or the Bank

and uphold an environment o good governance.

The year 2010 began with the ollowing members in the

Board o Directors o the Bank;

Subsequent to Mr. Ganesan Subramanyams resignation,

Ms. Aishath Noordeen was appointed as the Acting

Managing Director and Chie Executive Ocer by the

Board on 29th August 2010.

At the 27th Annual General Meeting held on 30th October

2010, Uz. Ismail Yasir ceased to be a member o the Banks

Board o Directors upon conclusion o his term.

Ater the 27th Annual General Meeting the Board was

re-constituted with the ollowing 10 Directors or the

year 2010/2011;

As per Clause 47 o the Articles o Association o the Bank,

the number o Directors in the Board shall be 11. As the

Board o Directors o the Bank is to comprise 11 members,

the quorum required or the Board meetings as stipulated

in Chapter 5, Section 15(g) o the Maldives Banking Act

(Law No. 24/2010) is 09 members. Subsequent to the

disqualication o Mr. Azban Fahmy rom the Board as he

did not meet the minimum age requirement stipulated

under the provision o Chapter 5, Section 15(c) o the

Maldives Banking Act and due to the vacant position o

an Executive Director, the Boards strength was reduced to

09 members and the presence o all existing 09 Directors

was essential to ensure the quorum as per the Maldives

Banking Act. Thereore, the Board o Directors under its

discretionary powers as provided or in Article 65 and

Mr. Adam IbraimChairman

Government Nominee,

Independent & Non-Executive

1 Mr. ganesan SbramanyamManaging Director & CEO

Government Nominee,

Non-Independent & Executive

Ms. Aisa NoordeenAssistant General Manager

Government Nominee,


2 Mr. Moamed Ai Government Nominee,Independent & Non-Executive

Mr. Moamed Jais Ibraim Government Nominee,Independent & Non-Executive

uz. Ismail Yasir Government Nominee,

Independent & Non-Executive3 Ms. areea Saree Government Nominee,


Mr. Asad Ali Government Nominee, Non-Independent & Non-Executive

Mr. Moamed Abdl Saar Elected by Public Shareholders,Independent & Non-Executive

Mr. Amed Moamed Elected by Public Shareholders,Independent & Non-Executive

Mr. Ibraim Moamed Elected by Public Shareholders,Independent & Non-Executive

Mr. Adam IbraimChairman

Government Nominee,


Ms. Aisa NoordeenActing Managing Director & CEO

Government Nominee,


Mr. Moamed Jais Ibraim Government Nominee,Independent & Non-Executive

Mr. Asad Ali Government Nominee, Non-Independent & Non-Executive

Mr. hassan Mzni Moamed Government Nominee,Independent & Non-Executive

Mr. Azban amy Government Nominee,Independent & Non-Executive

Ms. Na Moamed Riza Government Nominee,Independent & Non-Executive

Mr. Moamed Abdl Saar Elected by Public Shareholders,Independent & Non-Executive

Mr. Amed Moamed Elected by Public Shareholders,Independent & Non-Executive

Mr. Ibraim Moamed Elected by Public Shareholders,Independent & Non-Executive

1 Mr. Ganesan Subramanyam ceased to be a Member o the Board

consequent to his resignation on 16thAugust 2010.

2 Mr. Mohamed Athi ceased to be a Member o the Board consequentto his resignation rom the Board on 27thJune 2010.

3 Ms. Fareeha Sharee ceased to be a Member o the Board consequent

to her resignation rom the Board on 8th May 2010

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No. o meeins

Direcors to attend attended

Mr. Adam Ibraim 42 42

Mr. ganesan Sbramanyam 26 14

Ms. Aisa Noordeen 42 38

Mr. Moamed Ai 21 16

Mr. Moamed Jais Ibraim 42 21

uz. Ismail Yasir 37 24

Ms. areea Saree 14 10

Mr. Asad Ali 42 36

Mr. Moamed Abdl Saar 42 34

Mr. Amed Moamed 42 36

Mr. Ibraim Moamed 42 38

Mr. hassan Mzni Moamed 5 4

Mr. Azban amy 4 4

* Ms. Na Moamed Riza 5 2

No. o meeins


Mr. Adam Ibraim 02 02

Ms. Aisa Noordeen 02 02

Mr. Moamed Jais Ibraim 02 00

Mr. Asad Ali 02 02

Mr. Moamed Abdl Saar 02 02

Mr. Amed Moamed 02 01

Mr. Ibraim Moamed02 02

Mr. hassan Mzni Moamed 02 02

* Ms. Na Moamed Riza 02 01

66 o the Articles o Association o the Bank ormed an

Executive Committee o the Board comprising o the

remaining 09 Directors on 28th December 2010 and

delegated certain powers o the Board to the Executive

Committee to ensure continuity in business.

The Appointment, Nomination and Remuneration

Committee o the Board commenced recruitment o 02

Directors or the vacant posts.

REquENCY O MEEtINgS

Regular Board meetings are held at least once in every

two weeks, while more requent meetings were convened

whenever necessary.

The Board o Directors held 42 meetings rom 01st

January 2010 to 31st December 2010 and attendance was

as ollows;

The Executive Committee o the Board held 02 meetings

rom 28th December 2010 to 31st December 2010 and

attendance is as ollows;

RELAtIONShIP wIthShAREhOLDERS ANDCuStOMERS

Important developments including

quarterly inancials o the Bank,announcements and notices are displayed in

the Banks website or the inormation o the

Shareholders as well as the General Public.

Additionally, the minutes o the 27th Annual

General Meeting held on 30th October 2010

was published on the Banks website on 17 th

February 2011. Furthermore, a brie summary

o procedures governing voting at the General

Meetings is given in the Proxy Form made

available to Shareholders 21 days prior to

the General Meeting. The Corporate Aairs

Department o the Bank handles all matters o

the Shareholders. The Bank always welcomes

active participation o the Shareholders at the

General Meetings and solicits their views at all

times.

In order to provide more eective and

convenient banking environment or the Banks

valued customers, the Board o Directors in its

436th meeting held on 28th April 2010 resolved

to change the working hours o the Bank rom

0800 -1600 hours to 0900 -1700 hours with

eect rom 09th May 2010. In line with this

change the Board resolved to extend the normal

*Ms. Nuha Mohamed Riza was on Maternity Leave

*Ms. Nuha Mohamed Riza was on Maternity Leave

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banking hours by 30 minutes rom 0800 - 1330 hours to

0900 -1500 hours on all working days o the Bank and to

extend the ocial transaction hours o Bazar Branch rom

0800 - 1330 hours to 0900 -1700 hours on all working days

o the Bank whereby the Branch extended ull-fedgedbanking services throughout the day.

INANCIAL REPORtINg

The Bank publishes the annual accounts prepared in

accordance with Maldives Monetary Authority (MMA)

regulations and International Financial Reporting

Standards (IFRS) with comprehensive disclosures,

enabling both existing and prospective Shareholders

to make a timely and air assessment o the Banks

perormance and prospects. Mediums o publication

include printed materials, newspapers and the website

o the Bank.

EMPLOYEES

It is vital to the Management and the Board o Directors

o the Bank to elevate and maintain sta motivation and

productivity. Thereore, the Bank attempts to provide

its sta with attractive remuneration packages and a

secure working environment. As such the ollowing

policies were approved by the Board o Directors duringthe year:

ormlaion o BMLs hosin Alloance Policy:

The Board o Directors in its 432nd meeting held

on 24th March 2010 adopted the Banks Housing

Allowance Policy. This Policy was ormulated in

order to rationalize the compensation or employees

working away rom their home branches as

required by the Banks Management.

Adopion o Pension Plan:

A Pension Plan structured as per the Maldives

Pension Act (Law No. 08/2009) was approved by the

Board o Directors in its 454th meeting held on 29th

September 2010. With the implementation o this

scheme, employees will enjoy the benet o both

the Pension Plan and Sta Provident Fund.

The newly adopted Pension Plan came into eect

rom 01st January 2011.

inalizaion o e revised Bank o Maldives

Service Rles:

The Board o Directors in its 459th meeting held

on 27th October 2010 adopted the revised Bank o

Maldives Service Rules in order to align with the

Employment Act (Law No. 02/2008).

Adopion o e Bank o Maldives workplace

Non-harassmen Policy

The Board o Directors in its 459th meeting held

on 27th October 2010 adopted the Banks rst

Workplace Non-Harassment Policy as it is the legal

and moral responsibility o the Bank to provide

a harassment ree work environment or its

employees.

In addition, with the successul implementation o

the Whistle Blowing System on 28th October 2009,

the Banks employees are given unrestricted access to

raise their concerns or grievances regarding any illegal

or unethical practices within the Bank directly to the

Audit and Risk Management Committee o the Board o

Directors without compromising the employees rights in

any way. In this regard, based on the eedback received

rom the employees, the Board o Directors conducted

scrupulous investigations on the issues raised through

this system and necessary corrective actions taken

wherever considered necessary.

CORPORAtE gOVERNANCE

Compliance with Corporate Governance Code o CapitalMarket Development Authority (CG Code);

The audited accounts prepared in accordance with

the International Accounting Standards were made

available to shareholders and other stakeholders.

To ensure rm adherence to good corporate

governance practices as stated in the CG Code, the

Bank abides by Corporate Governance Code o Bank

o Maldives PLC approved in the 329th meeting o

the Board o Directors held on 23rd March 2008.

The Audit Committee was renamed andreconstituted as the Audit and Risk Management

Committee during the 409th meeting o the Board

o Directors held on 17th August 2009. This was

carried out in order to broaden the mandate o

the Committee to identiy and quantiy potential

risks involved in the banking environment

according to the Basle Accord and to oversee the

Banks preparations thereto. The Committee was

reconstituted again during the 460th meeting o the

Board o Directors held on 31st October 2010.

The Appointment, Nomination and Remuneration

Committee which was also reconstituted during

48


49/114

Obtaining the Best Value rom the Banks

expenditure on procurement;

Ensuring that the Management o the Banks

procurement projects are executed in a timely

manner so that the intended benets are realized;

Ensuring that partnering opportunities are sought

and considered, wherever required;

Developing pre-approved supplier database or

regular purchases and to seek quotations or

procurement rom the vendors in the approved list

in order to ensure timely procurement and ready

availability, and

Aiming at successul transition to e-procurement

or procurement o non-capital goods within areasonable period, in order to achieve benets o

availability and cost.

ACquIRINg CuStODIAL SERVICESLICENSE ROM CMDA

Since the Bank is best equipped to collect pension unds

through its nationwide branch network, the Board o

Directors in its 437th meeting held on 12th May 2010

resolved to apply or the Custodial Services License

to provide Custodial Services in accordance with the

Maldives Pensions Act (Law No. 08/2009). Subsequently,

the License was granted to the Bank by CMDA on 13 th

May 2010.

OVERALL DutIES O thE BOARD

The overall duties o the Board are:

Providing control and direction to the Bank,

including apex level leadership and setting strategic

targets / objectives or the Bank in conjunction with

the Corporate Management;

Deliberating on the business plan and the annual

budget or the Bank;

Reviewing the business and nancial perormance

o the Bank measured against the business plan and

the annual budget on a quarterly basis;

Ensuring the establishment o eective internal

controls within the Bank which will enable risks to be

assessed and managed, and monitor and assess the

eectiveness o such internal controls established;

Ensuring that the Bank has adequate human

resources to meet the objectives o the Bank;

IMPLEMENtAtION O LIquIDItYMANAgEMENt POLICY

Maintaining adequate liquidity is essential to manage

the projected and unexpected fuctuations in the assets

and liabilities o the Bank and to provide unds or

growth. Thereore, the Board o Directors in its 428th

meeting held on 24th February 2010 adopted the Banks

Liquidity Management Policy. The objective o the Policy

is to ensure the Banks ability to meet its liabilities asthey become due and to decrease the probability o an

irreversible adverse situation.

The Policy deals with the management o risks arising

rom the ollowing:

Changes in liquidity due to internal and

external actors;

Changes in interest rate movements.

IMPLEMENtAtION O BANK O

MALDIVES PROCuREMENt POLICY

The grounds or ormulation o a Procurement Policy

arose to acilitate the procurement o quality goods and/

or services at market related reasonable prices and to

promote transparency, airness, and cost eectiveness

in the Banks procurement process. Thus, the Board o

Directors o the Bank in its 436th meeting held on 28th

April 2010 approved the Banks rst Procurement Policy.

The basic approach in ormulation o this policy

includes:

Ensuring that the Banks Procurement contributesto the realization o the Banks vision and supports

the achievement o strategic objectives;

the 409th meeting o the Board o Directors held on

17th August 2009, was reconstituted again in the

460th meeting o the Board o Directors held on 31st

October 2010.

Perormance Assessment o individual Directors

and o the Board as a whole is conducted on an

annual basis.

Since the commencement o publication o

quarterly accounts o the Bank during the year 2009,

the Bank has given immense importance to publish

quarterly accounts.

To ensure compliance with best practice, 02

members o the Banks Corporate Management

were appointed as Executive Directors o the

Banks Board.

49


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Ensuring that obligations to shareholders and other

stakeholders are understood and met;

Ensuring that the Bank complies with all relevant

laws and regulations, including the Corporate

Governance Code and other codes o best

practices;

In order to ulll the aorementioned duties or any other

unction that the Board is obliged to adhere to, the

Board may responsibly delegate its authorities to the

most suitable subcommittee(s) o the Board, Corporate

Management, external proessional(s), consultant(s) or to

any such party or parties that the Board deems t in the

best interest o the Bank.

RESPONSIBILItY StAtEMENt

The Board o Directors hereby certies that:

I. The relevant accounting standards were considered

and ollowed all through the preparation o the

Banks Annual Accounts with proper explanations

relating to material departures;

II. The Board selected such accounting policies and

applied them consistently and made judgments and

estimates that are reasonable and prudent so as to

give a air and true view o the state o aairs;

III. It has taken proper and sucient care or the

maintenance o adequate accounting records in

accordance with the provisions o Companies Act o

the Republic o Maldives (Law No. 10/96), Maldives

Securities Act (Law No. 02/2006), Maldives Banking

Act (Law No. 24/2010), Prudential Regulations

issued by the Maldives Monetary Authority and the

Listing Rules and Securities (Continuing Disclosure

Obligations o Issuers) Regulations 2010 issued by

the Capital Market Development Authority;

IV. It has ollowed the Corporate Governance Code

issued by the Capital Market Development Authority

and;

V. All statements and accounts were prepared on a

going-concern basis.

VI. There were no unexpired service contracts within

one year without payment o compensation o any

director proposed or election.

50

VII. The borrowings o the Bank as at the end o the

accounting period is represented as ollows:

(in 000 R )

Not later than 1 year 485,929

Between 1 to 2 years 126,309

Between 2 to 3 years 107,462

Over 3 years 540,667

VIII. The Banks Total Liabilities or the comparative

years is:

(in 000 R )

2010 8,590,500

2009 9,647,490

Ix. The Board o Directors arms that there are

no other interests o the Directors o the Bank

except those disclosed in this report and theaccompanying nancial statements. Please reer

notes to the nancials, No. 41 or details on related

party transactions.

x. The Board o Directors urther arms that no

major events have occurred since the Balance

Sheet date, which would require adjustments to, or

disclosure in the nancial statements.


51/114

In compliance with Article 69 o the Articles o

Association o the Bank o Maldives PLC and Section 1.8

o the Corporate Governance Code issued by the Capital

Market Development Authority, the initial Audit

Committee consisting o 03 Non-Executive members

o the Board was ormulated on 23rd March 2008.

Following the review o the Organization Chart during

the year 2009, it was decided to combine the Audit

Committee with the newly established Risk Management

Committee. In this regard the scope o the Committeewas widened; the composition increased to 05 Non-

Executive Directors and was renamed as Audit and Risk

Management (ARM) Committee.

OBJECtIVES O thE COMMIttEE

The purpose o the Audit and Risk Management

Committee is to assist the Board in ullling its overall

responsibility relating to:

(a) The integrity o the Banks nancial statements

and nancial reporting process and the Bankssystems o internal accounting and nancial

controls;

(b) The adequacy o the internal audit unction,

including reviewing the scope and results o audits

carried out in respect o the operations o the Bank;

(c) The annual independent audit o the Banks

nancial statements;

(d)The engagement o the external auditors and the

evaluation o the external auditors qualications,

independence, objectivity, and perormance; and

(e) The compliance by the Bank with legal and

regulatory requirements, including the Banks

disclosure controls and procedures.

COMPOSItION AND REquENCY OMEEtINgS

The year 2010 commenced with the ollowing members

in the Audit and Risk Management Committee o the

Board. Attendance o members rom 01st January 2010 to

30th October 2010 is as ollows;

No. o meeins


Ms. areea SareeChairperson o the Committee (Upto 08th May 2010)Non-Executive & Independent

09 09

Mr. Asad AliChairperson o the Committee (From23rd May 2010 to30th October 2010)Non-Executive & Non-Independent

29 27

Mr. Moamed Abdl SaarNon-Executive & Indepen

bml annual report 2010 - english

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