Howladar Yunus & Co.

Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants

AUDITORS’ REPORT TO THE SHAREHOLDERS OF ISLAMI BANK BANGLADESH LIMITED
We have audited the accompanying Balance Sheet of Islami Bank Bangladesh Limited as of 31 December 2007 and the related Profit and Loss Account, Cash Flow Statement, Statement of Changes in Equity, Statement of Liquidity and notes to the financial statements for the year then ended. These financial statements are the responsibility of the management of the Bank. Our responsibility is to express an opinion on these financial statements based on our audit. Scope: We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS) as well as in the format prescribed by Bangladesh Bank give a true and fair view of the state of affairs of the bank as of 31 December 2007 and of the results of its operations and its cash flows for the year then ended and comply with the applicable sections of the Bank Company Act 1991, the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. Without qualifying our opinion we draw attention to note no. 19.4.1 to the financial statements and state that income tax on bad and doubtful debts has not been provided for during the year under audit. We also report that: i. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof; ii. in our opinion, proper books of account as required by law have been kept by the Bank so far as it appeared from our examination of those books of account and proper returns adequate for the purposes of our audit have been received from the branches not visited by us; iii. the Bank’s Balance Sheet, Profit and loss Account, Cash Flow Statement, Statement of Changes in Equity, Statement of Liquidity Analysis of the Bank dealt with by the report are in agreement with books of account and returns; iv. the expenditure incurred was for the purposes of the Bank’s business; v. the financial position of the Bank as of 31 December 2007 and the profit for the period then ended have been properly reflected in the financial statements; and the financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), following the generally accepted accounting principles;

vi. the financial statements have been drawn up in conformity with the Bank Company Act 1991 and in accordance with accounting rules and regulations issued by Bangladesh Bank; vii. adequate provisions have been made for investment and other assets, which are, in our opinion, doubtful of recovery; viii. the financial statements conform to the prescribed standards set in the accounting regulations issued by Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh;

Howladar Yunus & Co. Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants

ix. the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements; x. the information and explanations required by us have been received and found satisfactory; xi. as far as it was revealed from our test checks, the existing rules and regulations for investment sanctioning and disbursements have been followed; xii. Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR) with Bangladesh Bank have been maintained as per rule; xiii. it appeared to us that , the internal control system was satisfactory and adequate to prevent probable frauds and forgeries; xiv. guidelines for Core Risk Management issued by Bangladesh Bank vide BRPD Circular # 17 dated 7/10/2003 were generally complied with; xv. as disclosed in note no. 20.3 adequate capital of the bank, as required by law, has been maintained during the year; xvi. 80% of the risk –weighted assets have been reviewed spending over 3600 person hours.

Howladar Yunus & Co. Aziz Halim Khair Choudhury Chartered Accountants Chartered Accountants
Dated: 27 April, 2008 Dhaka,

2

Howladar Yunus & Co. Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants ISLAMI BANK BANGLADESH LIMITED Balance Sheet as at December 31, 2007
Amount in Taka as at December 31,

PROPERTY AND ASSETS

Note

2007

2006

Cash Cash in hand (including foreign currency) Balance with Bangladesh Bank & its Agent Banks (including foreign currency)

7.0

17,076,455,162 2,907,141,037 14,169,314,125

23,518,949,591 1,410,149,863 22,108,799,728

Balance with other Banks & Financial Institutions In Bangladesh Outside Bangladesh Money at Call & Short Notice Investments in Shares & Securities Government Others Investments

8.0

4,012,328,480 2,353,854,350 1,658,474,130 -

1,329,127,634 759,317,303 569,810,331 -

9.0

20,365,710,399 20,341,950,000 23,760,399

3,557,760,399 3,534,000,000 23,760,399 113,575,071,129 106,704,067,251 6,871,003,878 3,724,694,303 4,547,217,745 150,252,820,801

10.0

144,920,609,595 133,881,027,350

General Investments etc. Bills Purchased & Discounted
Fixed Assets including Premises,Furniture and Fixtures

11.0 12.0 13.0

11,039,582,245 3,987,232,675 1,000,013,406 191,362,349,717

Other Assets Non - Banking Assets Total Assets

3

524 14.292 19.826 51.000.000.727.498.885.797 3.103.000 3.0 Other Liabilities Total Liabilities Capital/ Share-holders' Equity Paid .441.523 Irrevocable Letters of Credit (including Back 47.899.252. Md.001 62.0 3.600.480 140.Balance Sheet items including 59. 2007 2006 LIABILITIES AND CAPITAL Liabilities Borrowing from other Banks.016.000 150.000.717 132.673.533 31.403.521.675 1.588.403.171 179.286.118.325.0 Mudaraba Perpetual Bond 18.878.up Capital Statutory Reserve Other Reserves Retained Earnings including Proposed Dividend Total Liabilities & Shareholders' Equity 166.801 20.091.820.000 2.267 Other Commitments Documentary Credits and short term trade related transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving underwriting facilities Undrawn formal standby facilities.447.043 191.351. Fariduddin Ahmed Managing Director Signed as per our annexed report of same date Howladar Yunus & Co.232.0 22.758 37.397.147.841.000 10. Financial Institutions and Agents Deposits & Other Accounts 14.720.135.134.027.254.333.134.272.579.048 52.906 890.669 25.972 537.416.522.671 29.447.007.165.707 37.279.004 10.987 to Back Bills) Bills for Collection 7.195.475 39.Howladar Yunus & Co. Shamsul Huda.013 Other Contingent Liabilities 1.447.862.872.862.270.0 Mudaraba Savings Deposits Mudaraba Term Deposits Bearer Certificate of Deposits Other Mudaraba Deposits 17.572.040.267 Contingent Liabilities The accompanying notes 1 to 38 form an integral part of these Financial Statements Kazi Harun-ar-Rashed Director Engr.426 7.257 3.0 21. FCA Director 2.456.306 5.223.498.254 3.0 Bills Payable 16.062 1.125.000.826.419. Eskander Ali Khan Director Md.349.707 M.151. Dhaka April 27 2008 Aziz Halim Khair Choudhury Chartered Accountants 4 .463 11.362.203.477.801.744 Total 59.542 864.013.587.184.026.504.729.255 3.691.610.0 OFF-BALANCE SHEET ITEMS Contingent Liabilities Acceptances & Endorsements Letters of Guarantee 23. Chartered Accountants Dated. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Note Amount in Taka as at December 31.149 3. credit lines and other commitments Total Off .272.767.0 19.245.283.0 Current and Other Accounts 15.336.994.

568 3.703.669.700.0 27.311 5.757.597.306 17.3 Provision for diminution in value of Investments in Shares Other Provisions Total Provision Total Profit/(Loss) before Taxes Provision for Tax 19.0 26. Eskander Ali Khan Director Md.141. 2007 2006 14.4.053.034.084 2.591.266.192 (9.049.457 Retained Earnings from previous year Add: Net Profit after Tax 2.19.381.949.293.725. Telecommunication.533 137.955.084 5.161.1 .181 449. Chartered Accountants Dated.780.Howladar Yunus & Co. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants ISLAMI BANK BANGLADESH LIMITED Profit & Loss Account For the year ended December 31.433 8.777 418.107 1.000 406.457 Profit available for distribution 2.581) (8.360.251 10.665.322.591 581.535.375. Md.141) 5.010 Current Tax 19.4.0 1.568 3.897.200 2.575. Printings.915 2.456.596.984.652 3.297.197.00 The accompanying notes 1 to 38 form an integral part of these Financial Statements.012.049.123.202.452 84.771. Chief Executive's Salary & Fees Directors' Fees & Expenses Auditors' Fees Charges on Investment Losses Depreciation and Repair of Bank's Assets Other Expenses Total Operating Expenses Profit/ (Loss) before Provision 29.095 2.400.591.652 1.Balance Sheet Items 19.004 1.053.288.000. Stationery.894 General Reserve (279. Fariduddin Ahmed Managing Director Signed as per our annexed report of same date Howladar Yunus & Co.572.532.940.109.967.0 30.490.0 Earning Per Share (EPS) 539.0 25.019.2 31.2 & 19.824.830 11.506 177.480) Retained Earnings including Proposed Dividend 35. Stamp.535.350 179.717 8.981 3.057. Kazi Harun-ar-Rashed Director Engr.088 401.567 2.043 36.001 (45.457 Statutory Reserve 756.591 1. Electricity.119 1.950.158. Advertisements etc.053.091.053.591 1.336.848.0 31. Dhaka April 27 2008 Aziz Halim Khair Choudhury Chartered Accountants 5 .430 6.579.138.011 264.719 356.280.051 284.278 78.762 286.149 11. FCA Director M.000 8.400.949.023.049.100.162.632.000 Deferred Tax Net Profit/ (Loss) after Tax 2.591.172 77. 2007 Note 24.457 Less: Appropriation 2.615.591 1. Legal Expenses Postage.410.591.587.0 Provision for Investments & Off.018.0 34.0 33. Exchange & Brokerage Other Operating Income Total Operating Income Operating Expenses Salary & Allowances Rent.145.546 77.574 2.629.1 1.000.721.572.400.467 1.002.000 143.249 216.400.935.185.733.908. Shamsul Huda.000 368.315.049.0 32. Taxes.381. Insurances.410) 864.0 Amount in Taka Year to December 31.559. etc.42 Investment Income Profit Paid on Deposits Net Investment Income Income from Investments in Shares/ Securities Commission.164.069 2.372.486 509.126.0 28. etc.

960.091.254 3.000 1.000.456.633 756.000 - - - - - - - - - - - - - (4.600.909 - Assets Rev.989.572.426.Rashed Director Engr.633 - Statutory Reserve 4 2.000) - - - - - 307. 2007 (Amount in Taka) Particulars Paid-up Capital Share Premium Account 3 1.280.026.255 - General/ Other Reserves * 5 1.247.049.000 3.405.043 (864.000) - - (4.909 Kazi Harun.333.449.950.429 Note * General / Other Reserves General Reserve Investment Loss Offsetting Reserve Dividend Equalization Account Exchange Equalization Account Total 2007 140.950.618.416.000.ar.247. Reserves 6 2.000 307.000.336.841.000) 345.141 1.134.000.081 32.600.000.797 - 1 Balance as at 01 January 2007 Changes in Accounting Policy: Restated Balance Surplus on account of revaluation of Properties Adjustment of revaluation on account of sale of Properties Surplus/ (deficit) on account of revaluation of Investments (HTM) Currency translation differences Net Gains and Losses not recognized in the Income statement Net Profit for the period Dividend: Cash / Bonus Addition from Bonus Share Total Shareholders' Equity as on 31 December. FCA Director Signed as per our annexed report of same date Howladar Yunus & Co.600. 2007 2 3.950.687 644.000 1.989.043 2.457 (864.000.000 9 (2+3+ 4+5+6+7+ 8) 10.449.500.894 (279.000 - - 307.405.207 644.Howladar Yunus & Co.460.429 2006 419.149 855.141 855.202.498.007.081 32.572.164.426.000 - Revaluation Reserves of Securities 7 - Retained Total Earnings 8 864.091.053. Md. Shamsul Huda. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants ISLAMI BANK BANGLADESH LIMITED Statement of Changes in Equity For the year ended December 31.232.275.134.000 11. Chartered Accountants Dated.480) - 2.000) 1. Eskander Ali Khan Director Md.500.000 38. Dhaka April 27 2008 6 .270.000 - 345.801.000 38.

703.149 10. Dividend Paid Net Cash from Financing Activities Net Increase / (Decrease) in Cash (a+b+c) Add: Effects of Exchange Rate Changes on Cash & Cash Equivalent Add: Cash & Cash Equivalents at beginning of the year Cash & Cash Equivalents at end of the year 37.012. Net Cash from Operating Activities Cash flows from Investing Activities Proceeds from Sale of Securities Payment for Purchase of Securities Purchase / Sale of Property.088.506) (57.348.120) 264.574 2.007.762 (801.417 28. 2006 11.890) (1.000 12.579.857) 286.002.400.596 Cash Flows from Operating Activities Investment Income Profit Paid on Deposits Income/ Dividend receipt from Investments in Shares & Securities Fees & Commission receipt in Cash Cash Payments to Employees Cash Payments to Suppliers Income Taxes Paid Receipts from other Operating Activities Payments for other Operating Activities Operating Profit before changes in Operating Assets and Liabilities Changes in Operating Assets and Liabilities Statutory Deposits Purchase of Trading Securities Investments to other Banks Investments to Customers Other Assets Deposits from other Banks Deposits received from Customers Other Liabilities account of Customers Trading Liabilities Other Liabilities a.145.916.225 41.715.642 (19.348.696. Md.786.533 2. 2007 Note 2007 Amount in Taka Year to December 31. Dhaka April 27 2008 Aziz Halim Khair Choudhury Chartered Accountants 7 .339 232.136 23.353.673.723.263 1.225.651.922) (424.875.600.474.191 24.433 (659. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants ISLAMI BANK BANGLADESH LIMITED Cash Flow Statement For the year ended December 31.000) 2.559.538.466) 3.658) (435.374. Plants & Equipments b.057.375.740.966) (118.639.155) (2.457 (23.849.791.323. Fariduddin Ahmed Director Managing Director Kazi Harun-ar-Rashed Engr.077.089 28.345. Shamsul Huda.204.375.263. FCA M.399) (401.332) 116.768.410.159.076.876.809.958 5.321) 4.037.851.225 The accompanying notes 1 to 38 form an integral part of these Financial Statements Md.192 (8.011 (1.Howladar Yunus & Co.481.322.783.081.107. Chartered Accountants Dated.547.581) 284.077.285 (31.505 33.141) 137.220) 2.523.635) 3.000 (518.567 (2.572.019.310.0 14.456.424) (2. Eskander Ali Khan Director Director Signed as per our annexed report of same date Howladar Yunus & Co.587.930.725.791.158.000.694.149 (9.658) 3.185.603.109.075 (435. Purchase/ Sale of Subsidiaries Net Cash from Investing Activities Cash flows from Financing Activities Receipts from issue of Loan Capital/ Debt Securities Payment for redemption of Investments/ Capital & Debt Securities Receipt from issuing Ordinary Share/ Bonus Share c.979.199 107.270.220.706.336.898.000.369.

355.922 15.000.000.902 10.760.231.000 44.907.141.000 40. Dhaka April 27 2008 Chartered Accountants ISLAMI BANK BANGLADESH LIMITED 8 .088 39.636.820.826.213.455.349.700. Fariduddin Ahmed Managing Director Aziz Halim Khair Choudhury Howladar Yunus & Co.721.137 150.406 191.668 300.774 - 496.642.000.770.920.195.000. Eskander Ali Khan Director Director Signed as per our annexed report of same date Md.362.972.575.000.12 Months 1 .075.710.725.5 years More than 5 years Total 31.801 51.504.816.687 50.365.864.577.841.527 1.875.651.481 175.232.000.671 15.344. Financial Institutions and Agents Deposits Other Accounts Provision & Other Liabilities Mudaraba Perpetual Bond Total Liabilities Net Liquidity Gap - 2 3 4 5 6 2.717 3.501 20.013.547.2007 7 (2 + 3 + 4 + 5 + 6) Total 31.2006 8 1 ASSETS Cash in Hand Balance with other Banks & Financial Institutions Money at Call & Short Notice Investments (in Shares & Securities) Investments Fixed Assets including Premises.292 10.437.722.896 54. FCA Director M.325.568.391 3.987.907.521.230.3 Months 3 .439) 166.037 - - - - 2.107 43.675 1.365.346 59.269.403.690.605 20.039.954 2.184.766 713.144.848. Chartered Accountants Dated.724.007.564 154.071.510 58.727.362 3.409.433 3.776.Banking Assets Total Assets LIABILITIES Borrowing from Bangladesh Bank.037 1.623.002.Furniture and Fixtures Other Assets Non . 2007 (Amount in Taka) Particulars Up to 1 Month 1 .200.000.927.286.015.358 365.254 132.418 716.240 555.674.057 8.588.745 150.702.710.141.000 179.887.892 50.395.315 2.335.672 1.039.985.000.232.987 1.149.713.434 - Kazi Harun-ar-RashedEngr.609.Howladar Yunus & Co.375.818.787 48.264.524 7.000.004 10.930.463 11.007.749 10.506 14.476 3.997.000.399 144.202 3.797 8.639 18.000 10.001.410. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants ISLAMI BANK BANGLADESH LIMITED LIQUIDITY STATEMENT Assets & Liabilities Maturity Analysis as at December 31.368.164.336.181.399 113.011 3.245.013.713.983.480 140.171 3.440 112.167.002.12.595 23.682.145.976.969.208 2.641 (812.399 39.694.246.459.471.863 13.316.727.835.217.562.252.442.129 3. Md.335. Shamsul Huda.260 17.557.12.275.145.419. other Banks.853.303 4.

renowned Lawyers and eminent Economists. Manama. Dhaka-1000.0 Status of the Bank Islami Bank Bangladesh Limited was established as a Public Limited Banking Company in Bangladesh in 1983 as the first interest free Shari’ah based Scheduled Commercial Bank in South East Asia. 3. Naturally. Dilkusha Commercial Area.2003. 3.06. the Financial Statements have been prepared basically as per provisions of Bank Company Act 1991 as amended by Bangladesh Bank BRPD Circular No. There are two Stock Exchanges in Bangladesh viz.0 3. Bangladesh Bank’s other Circulars / Instructions and following International Financial Reporting Standards (IFRS) adopted as Bangladesh Accounting Standard (BAS) by the Institute of Chartered Accountants of Bangladesh. the Companies Act 1994. The principal place of business is the Registered Office at Islami Bank Tower. the Securities and Exchange Rules 1987. Although the operations of the bank are in strict compliance with the rules of Islamic Shari’ah. Dhaka and Chittagong Stock Exchange’s Listing Regulations and other laws and rules applicable in Bangladesh. its modus operandi is substantially different from those of other conventional Commercial Banks. A separate set of records for consolidating the statement of Affairs and Income & Expenditure Statement of the Branches are maintained at the Head Office of the Bank at Dhaka from which the Financial Statements are drawn up. the provisions of the Bank Company Act 1991 and Bangladesh Bank’s directives. Bangladesh. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Notes to the Financial Statements For the year ended December 31.0 Nature of business All kinds of commercial banking services are provided by the Bank to the customers following the principles of Islamic Shari’ah. The Bank conducts its business on the Shari’ah principles of Mudaraba. 2. Musharaka. There is a Shari’ah Council in the Bank who ensures that the activities of the Bank are being conducted on the precepts of Islam.Howladar Yunus & Co.14 dated 25.1 Significant Accounting Policies Preparation of Financial Statements These Financial Statements have been prepared on a going concern basis under the historical cost convention as modified to include the revaluation of land & building and Shares & Securities as well as Generally Accepted Accounting Principles in consistent with those of previous year. Hire Purchase under Shirkatul Melk and Bai-Salam etc. The Bank carries out its business activities through its Head Office in Dhaka having 186 Branches in Bangladesh. 40. 2007 1. Financial Accounting Standard issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). reputed Bankers.2 Investments in Shares and Securities and Revenue Recognition 9 . Bahrain as a member of that organization. The Shari’ah Council consists of prominent Ulema. Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited and the Bank is listed with both the Stock Exchanges. Bai-Murabaha. Bai-Muajjal.

Social Security Fund and Benevolent Fund. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants a) Investments in Shares and Securities are stated at cost other than the Shares of Bangladesh Shipping Corporation which was revalued on ‘Marking to Market’ basis as per Bangladesh Bank BRPD Circular No. b) Dividend income on shares of Joint Stock Companies is accounted for when it is received. Moreover.15 dated 31. Bank charges compensation on overdue Bai-Murabaha and Bai-Muazzal investments as per approval of an Independent Review Committee.50% as the Bank maintains its Accounts following Gregorian Year) on the closing balances of Share Premium.Howladar Yunus & Co. Bai-Salam etc. These funds are managed by separate board of trustees. Investment Loss Offsetting Reserve.3 Investments and Revenue Recognition a) Investments are stated in the Balance Sheet net off unearned income and profit receivable.4 Profit/ Rent/ Compensation Suspense Account and Irregular Income Profit/Rent/Compensation accrued on classified investments are suspended and accounted for as per Circulars issued by the Bangladesh Bank in this behalf from time to time. 10 . Therefore. Gratuity Fund. income which is irregular (doubtful) as per Shari’ah is also not included in the distributable income of the Bank. Musharaka and Bai-Salam is accounted for on realisation basis. 3. Income in case of Mudaraba. b) Income from investments is accounted for on accrual basis except investments under Musharaka.2005 and adequate provisions have been made against probable losses. mode of Investment. the total amount of compensation is used to build up provision for bad and doubtful investments.10. Such income is recognised on realisation basis. Payment of Zakat on Paid up Capital and Deposits is the responsibility of the Shareholders and Depositors respectively. 3. c) Profit on Investment in Bangladesh Government Islamic Investment Bond (Islamic Bond) is recognized on accrual basis.5 Zakat Zakat is paid by the bank at the rate of 2. Statutory Reserve. The Bank does not charge any rent during the gestation/interim period of investment against Hire Purchase under Sherkatul Melk (HPSM) mode of Investment but it fixes the sale price of the assets at a higher level in such a way to cover its expected rate of return. Besides. General Reserve. 3. Such compensation is not permissible as per Shari’ah to take into regular income of the Bank.58% (instead of 2.6 Retirement Benefit and Staff Welfare Schemes The bank maintains Contributory Provident Fund. Mudaraba. fees and commission income are recognised when earned. Interest received from the balances held with Foreign Banks abroad and from Foreign Currency Clearing Account with Bangladesh Bank are also not credited to regular income since it is not permissible as per Shari’ah instead these are transferred appropriated to charitable purposes as per Board decision after payment of due income tax thereon. 3. The realized amount of compensation is however transferred to Islami Bank Foundation for charitable purposes. Exchange Equalisation and Dividend Equalisation accounts.

Howladar Yunus & Co. b) Depreciation is charged at the following rates on a reducing balance method on all Fixed Assets other than Motor Vehicles and Computers. The fund receives contributions @ 10% of the basic pay both from employees and employer.5 (one and a half) Months’ and 2 (two) Months’ basic pay. Chartered Accountants a) Provident Fund Aziz Halim Khair Choudhury Chartered Accountants The provident fund is for the regular and confirmed employee who has worked for a minimum period of 5(five) years in IBBL and it came into force with effect from 1st day of March. This fund is mainly used for payment of scholarship to the meritorious students among the children of IBBL’s officers and sub-staff. Tk. clinical treatment.137. 1988.79 million was available in the IBBL Employees Provident Fund as at December 31.50% 10. 959. Gratuity for the employees of IBBL has been increased from 1 (one) Month’s basic pay to 1(one) Month. 1986. 1986. 60 million has been provided during the year 2007 for the Fund. The employees who serve at least 7 (seven) years in IBBL. c) Social Security Fund The Fund came into force with effect from the 8th December. No depreciation is charged on building until the same is completed and brought into use.49 million as at December 31.26 million was available in the IBBL Employees Social Security Fund as at December 31. Plant & Equipment”.00% 20. are normally entitled to get gratuity equivalent to one month’s basic salary of the employees for their completed year of services in the Bank. The Fund balance stood at Tk.Tk.998. It was established for financial help to the members of the IBBL Employees Social Security Fund and their families in case of death. to allow short term quard/ grant for the unexpected and certain needs of the staff of IBBL like accident. d) Benevolent Fund The Benevolent Fund for the regular and confirmed employees of Islami Bank Bangladesh Limited was established in the year 1986. considering the length of service and also for premature death in harness.00% c) Depreciation at the applicable rates has been charged on addition to Fixed Assets during the year for the days of use. 2007. The Bank has taken up various steps to build-up adequate fund gradually and Tk.7 Fixed Assets and Depreciation a) Fixed assets are generally stated at cost/revaluation (where applicable) less accumulated depreciation as per BAS.16 “Property. 3. marriage ceremony of the sub-staff and their dependents.00% 20. 1. which are depreciated on straight line basis for the year of 2007: Category of fixed assets i) ii) iii) iv) v) vi) vii) Land Building Furniture and Fixtures Motor Vehicles Mechanical Appliances Computers Books Rate Nil 2. physical disability of the employee while in service or of any incidence of like nature acceptable to the Board of Trustees and retirement from the service.68. 2007. 2007.00% 30.00% 25. 11 . b) Gratuity The Gratuity Fund for the regular and confirmed employees of IBBL was established on1st day of March.06 million was available in the benevolent fund at December 31. 2007. Tk.

Audit Committee of the Board met in 35 (Thirty five) occasions.Rashed Engr. (iii) The Committee discussed in details the Audit Reports submitted by the Bangladesh Bank. b) Previous year’s figures have been re-arranged to conform current year’s presentation wherever necessary. (ii) In finalizing accounts for the year 2007. FCA.9 Foreign Currency Transactions a) The transactions in foreign currencies are translated into equivalent Taka currency using the exchange rates ruling on the dates of such transactions. Chartered Accountants 3. The investment income earned through deployment of Mudaraba Fund is shared by the Bank and the Mudaraba Depositors at the pre-determined ratio fixed by the Bank. (iv) Like previous years. 3. b) The Assets and Liabilities including balance with other Banks denominated in foreign currencies as at December 31. an Audit Committee was formed by the Board of Directors of the Bank consisting of the Board members.10 General a) The figures appearing in these accounts have been rounded off to the nearest integer. Shamsul Huda. 5. 2007 the following honorable directors were the members of the Audit Committee: Sl. Engineering (Electrical) M. several alternatives and various pertinent issues. FCA Status with the Bank Director Director Director Status with the Committee Chairman Member Member Educational Qualification M. i) ii) iii) Name Janab Kazi Harun-ar. 4. (Accounting). check & control systems and provided appropriate guidelines to the Management for overall improvement of the Management and Accounting system and minimization of various risks. 3. Eskander Ali Khan Janab Md. No. such as impact of Doubtful Income. As at December 31.12 dated December 23. of which 06 (Six) meetings were held with the Senior Management of the Bank during the year 2007 in which among others.Sc.0 Audit Committee As per Bangladesh Bank BRPD Circular No.Howladar Yunus & Co. 2002. were considered. Compensation & Profit Paid on Deposits (PPD). the Committee also exchanged views with the External Auditors and Management of the bank before Finalization of the Financial Statements. Com (Accounting) B. Md.8 Sharing of Investment Income Aziz Halim Khair Choudhury Chartered Accountants In case of Investment.Com. Balances held in foreign currencies other than US Dollar are converted into equivalent US Dollar at buying rates of New York closing of the previous day. Capital Adequacy Ratio & Risk Weighted Assets etc. 2007 are translated into Taka currency at the weighted average rate of inter Bank Market as determined by Bangladesh Bank.0 Related Party Disclosure as per BAS 24 12 . Mudaraba fund get preference over cost free fund. the following issues were discussed: (i) The Committee examined the draft Financial Statements of 2007 of the Bank to see whether all the disclosures and information incorporated in the Financial Statements & whether the Bank followed International Financial Reporting Standards and procedures in preparing Financial Statements.

M.A Representative of Bangladesh Masjid Mission Maruf Foundation Representative Director Not applicable KEARI Limited & Diganta Media Corporation Limited ICB Asset Management Co. Sylhet ii) Sylhet Trade Centre.Rashed Engr. A . Yousif Abdullah Al – Rajhi Moulana Zainul Abedin Jb. Shafiqur Rahman Status with the Bank Chairman Name of the related Firms/ Companies/ Institutions/ Parties etc. Ibn Sina Pharmaceutical Ind. Himself Purpose Classified Position UnClassified (i) Prof. Abdulhameed Fouad AlKhateeb Jb.1 Aziz Halim Khair Choudhury Chartered Accountants Name of the Directors along with all related Firms/ Companies/ Institutions/ Related Parties as at December 31.Ahmed Mohammed Thani Dr. Mominul Islam Patwary Jb. Manarat Trust & Fouad Abdul Hameed Al-Khateeb Foundation. Amount outstanding as on 31. Chartered Accountants 5.Howladar Yunus & Co. Md. Riyadh.M/s. Representative of Ibn Sina Trust. Representative Director Not applicable Islamic Development Bank. Wasim Ahmed Dr. Abu Nasser Mohammad Abduz Zaher Prof. etc. Abu Nasser Mohammad Abduz Zaher Jb. Sylhet Not applicable 5. Jahangir Miah Dr. No. Chalibander. 2007 Sl.12.16 Name of the Director Relationship of the Director with the Firm/ Trust etc. Name of the Account/ Firm/Trust. FCA Jb.2 Related Party Transactions The Bank made investments to the following Firms/ Trusts/ Individuals where the Directors of the Bank are related: SL.K . Chartered Accountants & Publisher of The Daily Naya Diganta. Ltd.S. Kazi Harun-ar. for Industry & Trade. Shamsul Huda. Sylhet iii) Women’s Medical College.Ltd. Mirboxtola . Abu Nasser Mohammad Abduz Zaher ( Chairman) Housing 13 . Eskander Ali Khan Jb. Kuwit Awqaf Public Foundation Foreign Manager of Investment Department. Representative of Al-Rajhi Co. No (i) Name of the Directors Prof. Md.2007 (Million Taka) 0. Md. K. Kumarpara. Sadrul Islam Jb. Fariduddin Ahmed Managing Director & Ex Officio Director Partner .M. Equity Operations. Ltd. Director Representative Director i) Ma Moni Hospital Pvt . Huda Hossain & Co. Representative Director Bangladesh Islamic Centre Representative Director Remarks (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) Vice – Chairman Vice – Chairman Director Director Director Director Director Director Director Director Director Director Foreign Director Foreign Director Foreign Director (xiv) Jb. Md.

03 Chairman Mohammad Abduz Zaher (Chairman) (ii) Janab Mominul Islam Patwary (Director) (iii) Janab Md.Sadrul. FCA (Director) (i) Prof. Dhaka 2.M. Md.do- Mohammad Abduz Zaher (Chairman) (ii) Dr.00 Prof. Shahanara Begum (Wife) Maruf Foundation Manarat Trust. Academic Committee (Guarantor) Husband Housing .Howladar Yunus & Co.80 Aziz Halim Khair Choudhury Chartered Accountants Prof. Board of Directors Member & Guarantor Member HPSM (Project) Purchase of House. Abu Nasser Mohammad Abduz Zaher ( Chairman) (i) Prof. Abu Nasser Mohammad Abduz Zaher (Chairman) Establishment of Private University Flat Purchase Service Sector (For Hospital) . Shamsul Huda. Chartered Accountants (ii) (iii) Fuad Al-Khateeb Hospital Ibn Sina Trust 31.do- (vii) Mrs.92 Representative Director Convenor.do- (viii) Islami Bank Hospital 1.23 . A.do. Shamsul Huda. Abu Nasser Member.do- 50.do- 1. Eskander Ali Khan (Director) Janab Mominul Islam Patwary (Director) (iv) (v) (vi) Mrs.do- 425.67 Janab Md.55 Husband . BMRE & Import of Machinery HPSM . FCA (Director) MemberAdministration Member 14 . Islam (Director) Engr. Abu Nasser . Saida Akhter 2.K.

2003. 2004.6. 1993 respectively and BRPD Circular No. The failure may result from 15 . The prime objective of the Risk Management is that the Bank takes well calculative Business Risk Policy for safeguarding the Bank’s capital. the Bank implemented all the guidelines of Bangladesh Bank as under: 6. Investment Risk Management. 6. Gain/(Loss) arising from valuation of securities (Bangladesh Shipping Corporation-Held to Maturity) on “Marking to Market” basis and full amount has been taken as a component of Equity and disclosed in the Statement of Changes in Equity.10. 10 dated November 25.1 Aziz Halim Khair Choudhury Chartered Accountants Investment to related parties is effected as per requirement of section 27 of Bank Company Act 1991.5 Revaluation Reserves of Securities Investment in Shares of Bangladesh Shipping Corporation held for maintaining Statutory Liquidity Reserve (SLR) is accounted for in accordance with BRPD Circular No.6Risk Management The risk of Islami Bank Bangladesh Limited is defined as the possibility of losses. The amount is accounted for as per instruction issued by the Central Bank (Bangladesh Bank) from time to time.2008 up to 50% of the same will have to be taken as a component of Supplementary Capital. 6.1 Investment Risk Management Investment risk is one of the major risks faced by the Bank. 1993 & June 15. Creation of Reserve and Others Statutory Reserve As per section 24 of the Bank Company Act 1991. 2003.0 6. This can be described as potential loss arising from the failure of counter party to perform as contractual agreement with the Bank. Foreign Exchange Risk Management. 6. 2002. its financial resources and profitability from various risks. 14 dated June 25.03. In this context. Asset .Howladar Yunus & Co. The Risk Management of the Bank covers 6 (Six) Core Risk Areas of banking industries i. 6. financial or otherwise.3 Exchange Equalization Account This represents the amount arose from exchange gain due to de-valuation of Bangladesh Takawith foreign currencies up to 30.2003 and the system has been discontinued from 31.03. However.1996 at Market price and can be utilised as per section 57 of the Companies Act 1994. However. Share issued to Directors and Executives without consideration or exercisable at discount is Nil. 2005 and 2006 as per guide line issued by Bangladesh Bank.03. which was reviewed by the External Auditors.Liability Management. to calculate Capital Adequacy Ratio. 20% of the net profit is transferred to Statutory Reserve every year. 12 & 18 dated April 20. This Reserve is not distributable. Prevention of Money Laundering Establishment of Internal Control and Compliance and Information & Communication Technology Risk. Other disclosures are not applicable as required by BRPD Circular No. Chartered Accountants ♦ ♦ ♦ 6.2005. 6.e. 2003.2 Share Premium Share premium arose from sale of some un-subscribed Right Share. as per Bangladesh Bank BRPD Circular No-03 dated 12. 50% of the same is considered as a component of supplementary capital as per Bangladesh Bank BCD Circular Letter No. 2002.4 Assets Revaluation Reserves This represents the difference between the book value and the re-valued amount of Premises (Land and Building) of the Bank as assessed by professional valuers in the year 2000.15 dated 31.

6. investment value and exchange earnings. 6. Treasury Department independently conducts the transactions and the Back Office of Treasury is responsible for verification of the deals and passing of their entries in books of accounts. 6. All financial transactions can be tracked for future Audit purpose. Bank’s Investment risk management activities have been designed to address all these issues. technological failure.6. For mitigating the risks the Bank has a designated Chief Compliance Officer at Head Office and Compliance Officers at Zonal Offices and Branches. a security policy has also been worked out and implemented in the server system through Active Directory Services (ADS). foreign exchange rates which are not trading nature. The Balance Sheet risk is defined as potential change in earnings due to change in rate of profit. namely 1. Internal Audit and Inspection Division undertakes periodical and special audit of the Branches and Departments at Head Office for review of operational effectiveness and internal/external compliance requirements. Monitoring Division. the bank has re-drawn its own Information and Communication Technology (ICT) Policies for operations and Services. Compliance Division handles ‘Regulatory issues of Bangladesh Bank and other Regulatory bodies’ and submitting ‘Regulatory issues status position’ quarterly to the Audit Committee of the Bank as per BRPD Circular No. It is an in-depth exercises and continual process. Audit Policy. Kerberos Policy. Under these policy guidelines.12 dated 23-12-2002. In line with the Central Bank (Bangladesh Bank) directives. User Rights.Howladar Yunus & Co.4 Prevention of Money Laundering Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of money laundering. The primary objective of the ALCO is to monitor and avert significant volatility in Net Investment Income (NII).5 16 . Monitoring Division assess the risk on the functional areas of the Branches as described in the Departmental Control Function Checklist (DCFCL) and monitors the Internal Control Functions through the Quarterly Operations Report (QOR) and checks the Completion of Investment Documentation. deposit and investment pricing strategy and the liquidity contingency plan. The Bank uses Central Data Centre to replicate transactions in branches in case of failure. Manuals for prevention of money laundering have been developed and Transaction profile has been introduced in the Bank. 6. All foreign exchange transactions are revalued at Bangladesh Bank rates at the month-end. The Board’s Audit Committee subsequently reviews the lapses identified by Audit and Inspection Division.6. Internal Control and Compliance Operational loss may arise from error and fraud due to lack of internal control and compliance. 6. Training has been continuously given to all categories of officers and executives for developing awareness and skill for identifying suspicious activities. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants unwillingness of the counter party or decline in his / her financial condition. The foreign exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underline L/C commitments and other remittance requirements.3 Asset Liability Management The Asset Liability Committee (ALCO) of the Bank monitors Balance Sheet risk and liquidity risks of the Bank. All Nostro accounts are reconciled on monthly basis and the Management for its settlement reviews outstanding entry beyond 30 days. the maturity of assets and liabilities. Therefore.6. 6. Audit & Inspection Division 2. Compliance Division and 3. The Risk Management exercise mainly included minimizing financial loss to the institution in all events such as natural disaster. who independently review the transactions of the accounts to verity suspicious transactions. Group Policy. controls operational procedure of the Bank through three Divisions. It has been implemented through Password Policy.6 Information and Communication Technology Risk Management The Bank has adequately addressed Information and Communication Technology (ICT) Risk Management. Management through internal control and compliance Wing. Asset Liability Committee (ALCO) reviews liquidity requirement of the bank.2 Foreign Exchange Risk Management Foreign Exchange risk is defined as the potential change in earnings arising due to change in market price. human error etc. The Bank uses own developed Core Banking Software to perform all types of transaction including local/ online/ internet in a secured way.6.

7 Credit Rating Report Credit Rating Information and Services Ltd. the Bank has introduced Virtual Private Network (VPN). Short-term liquidity including internal fund generation is very strong and access to alternative sources of funds is outstanding. 17 . 2005 & 2006 and assigned A+ (Adequate Safety) for long term rating scale for 2002 & 2003. Bangladesh) was engaged by the Bank. 6. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Permission Policy etc. Financial Institutions rated in this category means having highest certainty of timely payment. 2004. Access Control List (ACL). offer higher safety and have high credit quality. Safety is almost like risk free Government short-term obligations. IP filtering and TCP/UDP service blocking through Router and firewall devices. Financial Institutions rated in this category are adjudged to be of high quality. Risks are modest and may vary slightly from time to time because of economic conditions. CRISL assigned ST-2 (High Grade) for short term rating scale for 2002 & 2003. It has already centralized the administrative control to access the Network. In order to secure network resources from public network. and upgraded the same to AA. 2003... 2005 & 2006. and upgraded the same to ST-1 (Highest Grade) for 2004.(High Safety) for long term rating scale for 2004 & 2005 and further upgraded the same to AA (High safety) for long-term rating scale in 2006 . to abide by and adhere to what is laid down in the policy.Howladar Yunus & Co. Pakistan. mailing system and access to internet under this policy.CRISL (a joint venture rating agency of Rating Agency Malaysia Berhad (RAM). JCR-VIS Credit Rating Company Ltd. Pakistan and Local Corporation/ Sponsors. The CRISL submitted its report on the financial year 2002. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Prime Commercial Bank Ltd.

978.319.169.108.3 Components of Statutory Liquidity Requirement (SLR) Cash in hand including Foreign Currency Balance with Bangladesh Bank & its Agent Bank Unencumbered approved Securities : Investment in Shares of Bangladesh Shipping Corporation Bangladesh Government Islamic Investment Bond Total 327.037 11.27% 2.500 9. BCD (P) 744 (23)/ 5 dated January 03.405.429 7.978.319.984.863 20. SLR of the Bank is 10% as like as other Islamic Banks as per Bangladesh Bank Letter No.037 1.000 3.500.000 20.591 21.313.) (Note-7.000.802.150 20.536 20.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR) have been calculated and maintained in accordance with the Section 25 & 33 of the Bank Company Act 1991 and subsequent BRPD Circular No.632.944 1.108.086.570 21. 2007 2006 7.570 20.410.570 18.550.893.670.169.000.446.022.979.700 20.13% 12. as against 18% of Conventional Banks and the Bank maintained SLR above the requirement throughout the year as follows: 7.173 19.591 2.518.190.000.Howladar Yunus & Co.795.997.632.3.907. 2005 and as per Bangladesh Bank's Letter No.405.592 12.799.974.589 14. 11 & 12.979.725. With effect from October 01.149.2 Statutory Liquidity Requirement (SLR): 10% Required Reserve Actual Reserve maintained Surplus / (Deficit) Maintained (%) 7.190.950.984. 1987.166.000 25.429 475.851.949.728 9.533 6.170.3. BCD (P) 744 (23)/ 5 dated January 03. 1987.690 1.125 475.000 34.000 13.365 2.0 7.300 25.3.628.696.) Balance with Bangladesh Bank In Local Currency In Foreign Currency Sub-Total (a) Balance with Sonali Bank Ltd In Local Currency (b) Grand Total (a+b) 1.299 22.137 7.2) Balance with Bangladesh Bank Balance with Sonali Bank Ltd Sub-Total (b) Grand Total (a + b) 12.963.998.799.399.444 6.877.2 Balance with Bangladesh Bank & its Agent Bank (Sonali Bank Ltd.076.149.296.399.141.972.17% 16. both dated August 25.685.702. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.643.907.728 23.43% 1.314.455.719.863 7.131.595.000 34.670.838 1. 2005 CRR is 5% as per guidelines given by Bangladesh Bank and the Bank maintained CRR above the minimum requirement throughout the year.299 22.672 29.232.162 21.172.503.719.944 2.802.756.314.177.000.536 1.446.1 Cash Reserve Requirement (CRR): 5% Required Reserve Actual Reserve held with Bangladesh Bank Surplus / (Deficit) Maintained (%) 8.410.141.838 14.643.688 16.390.1 i) ii) Cash Cash in hand In Local Currency In Foreign Currency Sub-Total (a) Balance with Bangladesh Bank & its Agent Bank (Sonali Bank Ltd.125 17.249.725.481.593.000 18 .997.589 14.

000 23.1) Grand Total 1. 2007 Taka 20.487 19.557.578 2.10 million is receivable from the same group as at December 31. 2007 2006 8.534.950.000 20.183 759.000.000 20.004 5 300.000.* Membership of Dhaka Stock Exchange Ltd.854.127.000 20.012.145.034.262.107.722.331 1.384.000. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.810.000 157. of Share Face Value as at Dec.712 40.367 569.434 118.0 Value as at Dec.079.130 4.08 million.210.350 1.2 i) ii) iii) iv) v) Maturity .474.399 20.365. Balance with other Banks & Financial Institutions Outside Bangladesh Foreign Currency US Dollar Great Britain Pound Saudi Riyal EURO YEN Total Amount in F.621.8980 0.474. In view of present situation of BCCI.216 524.000 1. Total Current Year Grand Total (a+b) Prior Year Grand Total 200.000 159.760.000 2.000.820.388.000 20.Quoted * 9.328. 6.329.303 569.399 23.580 301.353.161.000 4.10.950.012. 31.29 1.530.000 4.2758 100.571 301.38 28.000 34.069.000 157.6999 18.298.420 38.284.545.2005 .000 341.860. Sub total Bangladesh Government Islamic Investment Bond (Islamic Bond) Total (iv + v) Others Bangladesh Aroma Tea Ltd. Revaluation of Shares & Securities All shares and securities are shown at cost price other than the shares of Bangladesh Shipping Corporation which have been recognized at 'Marking to Market' basis as per Bangladesh Bank BRPD Circular No-15 dated 31.651 74.000.521 550. 31.009 1.480 1.372 5.329.Howladar Yunus & Co.634 9.000.146.000.368.947.000 4. 19 .00 Exchange Rate 68.480 442.159.130.24 32.760.000 3.000 4 300.317.772 1.399 Remarks a) i) ii) iii) iv) v) b) Government Bangladesh Shipping Corporation Karmasangsthan Bank Central Depository Bangladesh Ltd.328.181.576 Quoted Un-Quoted Un-Quoted De-listed Un .000.127.774.218.159.wise Classification Repayable on Demand With a residual maturity of Not more than 3 months Over 3 months but not more than 1 year Over 1 year but not more than 5 years More than 5 years Total Investments in Shares & Securities No.570 1 1.946.658.1 IBBL had a liability of Tk.000.06 864.C 20. 2007 Taka 327.341.000. 8.810.029.000 3.000 10.950.658.634 8.000 10.331 8.18 million payable to the different units of BCCI world wide as against an aggregate amount of Tk.380.603.768 112.000 20.704.000.1 100% provision has been made against probable losses in shares of Bangladesh Aroma Tea Ltd.594 139.399 3.630 85.0 i) ii) Balance with other Banks & Financial Institutions In Bangladesh In Current Account In Mudaraba Savings & MTDR Account with Other Islamic Banks / Financial Institutions Sub Total Outside Bangladesh Note (8.6093 2007 1.034.000 100. 2007 resulting to a net payable of Tk.657. adequate provision has been made against net payable for the same.130 2006 450.004 25. 2.399 1.146.5728 136.710.120 317.000.

566.2 i) ii) iii) iv) v) Maturity Grouping of Investments in Shares & Securities Repayable on Demand With a residual maturity of Not more than 3 months Over 3 months but not more than 1 year Over 1 year but not more than 5 years More than 5 years Total Investments Maturity-wise Classification Repayable on Demand With a residual maturity of Not more than 3 months Over 3 months but not more than 1 year Over 1 year but not more than 5 years More than 5 years Total Country-wise Classification of Investments Within Bangladesh Geographical Location wise classification of Investments a.358 50.399 3.203.336.575.362 11.235.695.575.921.259 2.399 3.Howladar Yunus & Co.129 10.000.399.794 990.581.291 144.3 i) ii) iii) iv) v) vi) vii) viii) 73.096 24.533.129.878.955.156 8.245 142.082 40.609.595 72.096 113.575.722.722.609.077.609.591 144.712.518 113.433 12.609.510.473.960.120.920.473.919 50.129 ii) Outside Bangladesh Total (i + ii) Division wise Classification of Investments Name of the Division Dhaka Division Chittagong Division Khulna Division Rajshahi Division Barisal Division Sylhet Division Total Mode .648 1.020.885.620 4.373.710.638 144.319 6.365.920.277.435.920.920.347.2.616.500.450.760.582.426 19.186.595 144.000 905.397.503 1.772 113.447.000 365.071.557.000.036.701 113.153.609.000 17.128.760.605. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31. In Rural Area b.071.288 50.920.545. In Urban Area Sub total (a+b) 3.833.000.836.705.129 20 .2 i) ii) iii) iv) v) vi) 91.572.000 57. 2007 2006 9.000.472 2.818.020 6.722 10.358 39.813.710.000.951.036 133.383 39.039.399 20.595 59.Muajjal Hire Purchase under Shirkatul Melk Purchase & Negotiation Musharaka Mudaraba Bai .2.724.243.782.974.1 i) ii) iii) iv) v) 4.1 i) 11.071.000 1.000.575.Murabaha Bai .386.609.093.213.595 9.595 35.181 11.089.Salam Quard Total 10.637.wise Investment Bai .2.862.571 50.213.071.0 10.929.559 144.564.460.129 113.618.732.926.575.887 12.666.465.201.071.619.188.609.846.129 10.824 25.000.908 50.033 103.603 1.399 10.224 12.623.

30 131.30 1.00 4.00 1.Steel and its sister concern MSA Spinning Mills Ltd M/s Sheema Steels M/s Mosharraf & Brothers 21 .80 121.90 Funded 813.059. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.60 2.60 2633.836.687.30 1550.96 Million in 2006) Number of Clients Amount of Investments Classified amount thereon Measures taken for recovery Outstanding (TK.806.140.830. Robiul Islam M/s Farzana Oil Refineries Asia Composite Mills Ltd.760. Sheikh Brothers & its sister Concerns M/sYonus Plastic Ind.299.94 Million as at 31 December 2007 (Tk 10.618.026.435.60 1.90 1.70 1. Ltd S.721.00 1.510. K.20 1897.10 742.80 1138.70 220.661.90 - Non-funded 209.00 1.00 1.90 788.336.50 1.029.40 1.350.30 2479.120.393.328.60 1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Name of Clients Sanctioned Limit 2.530.000 242.70 893.3 i) ii) iii) Group wise Classification of Investments Investment to Directors Investment to Chief Executive & Other Senior Executives 515.60 2877.60 413.90 998.70 3.00 1. million) Nil 21 37.20 5.0 00 Nil Not Applicable Total (Taka in Total (Taka in Million) 916.465.660. Spinning Mills Ltd Rahim Steel Mills Co.00 2.260.90 880.000 Not Applicable 32 42.00 1.80 1538.737.624.458.682.701. Zaber Spinning Mills Ltd.00 1.00 1.20 1.360.30 968.00 1.407.658.90 1.00 1.00 1.90 1.408.00 582.90 444.10 918.30 347.162.00 1.20 1753.60 143.30 1.769.20 1.(Pvt) Ltd Ekhlus Spinning Mills Ltd The Delta Spinning Mills Ltd BRB Cables Industries Ltd MRS Industries Ltd S.20 2.00 2.30 1. Alam Cold Rolled Steel Mills Ltd M/s H.30 1.623.00 1210.507. Alam Super Edible Oil Ltd.10 3.477.00 1. M.30 1.739.10 Sl. 2007 2006 10.410.80 - Million) 813.10 2431.700.60 1.200.414.776.40 1623.20 2.115.887.90 1.70 1.50 1.10 1.30 131. No.50 1.90 1.212.70 1.70 Abdul Monem Ltd Utah Group Nassa Group Abdul Monem Sugar Refinery Ltd AA Synthetic Fibers Ltd Nitol Motors Ltd R.600.Howladar Yunus & Co.70 1.000 244.720.920.00 1.407.00 1.30 3.90 1718.90 3.594.40 660.30 57.00 2.80 2213.70 1163.131.00 1.400.50 1.316. Zaber & Zubair Fabrics Ltd.30 2418.019.70 1.90 1.765.533.619.20 1.00 2.00 1.758.100.640.70 328.80 1408.217. Group Aman Group R.70 1.292.70 600.245.023.000 459.560.030.70 1.019.00 1.90 2437.80 92.00 144.000 Details of Large Investments Number of clients with amount of outstanding investments exceeding 10% of total capital of the Bank & classified amount there on are given below : Total capital of the Bank was Taka 15.10 2975.392.40 1.40 1.413.354.50 1.066.10 1.756.

150. Share Certificates Total 140.776.484.000 4.300.121.274.653.000 10.70 1.000 27.261.000 515.10 821.900.300.354.000 2.752.291.071.796.538.000 2.80 42.347 113.000 144.897.699.000 898.390.575.372.718.199. 22 to 36 have not been shown under the large investments due to increase of Capital from 10. 2007 2006 Total ( Taka in Million) 1.00 1.251.106.589.00 2.4 i) ii) Classification of Status .510.90 1.633.788.wise Investments Unclassified Standard including (Staff Investment) Special Mention Account (SMA) Classified Substandard Doubtful Bad/ Loss Total Pledged Collaterals against Investments Land & Building MTDR.755 144.812.677.200.310. million) NonFunded funded 27.457.609.00 1.820.96 Million to 15.782 3. Ltd.50 10.40 1.129 22 .609.30 1.413.765.980.009.084.010.896.20 Sl.000 35.000 62.282.228.94 Million.435.645.449.404.020.140.000 113.246. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.810.460.414.575.000 24.270.550.036.00 1.494.509.000 5.600.062.20 2.674.990.000 182. etc.000 233.518.70 Outstanding balances relating to borrowers from serial no.60 1.00 1.40 Outstanding (Tk.20 1.5 223.000 3. No.000 1.718.6 i) ii) iii) iv) Particulars of Investments Investments considered good in respect of which the Bank is fully secured Investments considered good in respect of which the Bank holds debtors' personal security Investments considered good and secured by personal security of one or more persons in addition to personal security of debtors Investments considered bad or doubtful not provided for Total 140.00 1.129 i) ii) iii) 10.780.039.043.245.00 1.000 9.536.595 110.595 109.50 1.645.321.913.225.343. Securities.129 108.377.071.470.294.000 50.920.595 138.970.000 274.371.882.993.684. iv) Industry -wise Classification of Investments Category of Industry a) Garments b) Textiles c) Agro based Industry d) Other Industry Total 8.534.000 10.000 19.595 2.000 78.959. Ltd Badsha Textile Ltd Matin Spinning Mills Tania Group Youth Group Noman Group M/s Otto Spinning Mills Ltd Delta Composite Knitting Ind. 28 29 30 31 32 33 34 35 36 Name of Clients M/s Abul Khair Steel Prod.Howladar Yunus & Co.000 9.920.000 331.20 Total ( Taka in Million) 37.840 4.694.519. BD Group Total Sanctioned Limit 1.129 1.433.085.000 50.475.

681 509.987.874.890.1 Revaluation of Land & Building 23 .039.090 661.056.798.136.619. 63.055.913 1.245 5.441.994.979.872.684.894.034.234.000 xi) a) b) c) d) e) Particulars of Written Off Investments Cumulative amount of Investment Written Off since inception to 31st December last year Amount of Investment Written Off during this year Total amount Written Off (a + b) 3.877.610.was waived & remaining Tk.214 6.496 3.332. including temporary investments.335. made any time during the year to directors or employees of the Bank or any of them either severally or jointly with any other persons Total amount of Investments.384 1.621.872.293.298.988.135 4.935.984.979.457.was recovered from the clients in cash.045 697.871.675 1.900 232.465 11.878 8. managing agents or in the case of private companies as members Total amount of Investments.661.000 1.255.097 2.285 2.000 605.387.525.244.467 821.798.805/-was recoverd from Written -Off Investments .724.709 2.633.039.000 1.494.234.144.457.000 1. Bills Purchased Payable in Bangladesh Payable outside Bangladesh Total Maturity-wise Classification of Bills Purchased Payable within 1 month Over 1 month but less than 3 months Over 3 months but less than 6 months 6 months or more Total 544.335.229/.496 3.003.575.034.074.000 3.681 1.653.000 - 2.648 3. managing agents or.600. 2007 2006 1.646 2. out of which a sum of Tk.320.385.496 Amount recovered against such Written Off Investment up to this year * 754.099 7.259.662 69.935.582.557 294.184.848 133.000 - 1.920.792 3.003.161.000 1.065. partners.339. partners.232.808.000 1.201.298.A for details) 1.458.358.240.245 348.871.000 619.841.103. in the case of private companies as members Investments due from other Banks Classified Investments: a) Classified Investments on which profit has not been charged b) Provision on classified Investments c) Provision kept against Investments Classified as bad debts d) Profit creditable to Profit Rent /Suspense Account 1. Tk.1 12.576/.290 vii) viii) ix) x) 509.575.427.83.013.080.241. including temporary investments granted during the year to the Companies or firms in which the directors of the Bank are interested as directors.496 223.736 4.919 255.575.0 i) ii) iii) iv) v) vi) vii) Fixed Assets including Premises Cost / Revaluation Land Building Construction/ Capital Work-in-process Furniture and Fixtures Mechanical Appliances and Cost of Software Motor Vehicles Books Total Cost / Revaluation Less: Accumulated Depreciation Net book value at the end of the year (See Annexure .751 551.775.304.103 206.680.404.787 3.773 2.484.335.299.654.Howladar Yunus & Co.185 6.129.536 11.948.907.875 4.334. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.290 v) vi) Investments due by directors or employees of the Bank or any of them either severally or jointly with any other persons Investments due by directors or employees of companies or firms in which the directors or employees of the Bank are interested as Directors.139.443.582.0 i) ii) 11.896.141.146.878 11.303 12.859.044 474.496 same * During the year of 2007.240.297 1.971.423 1.599.883.954.496 607.000 1.032 66.691 Amount of Investment written off against which suit has been filed to recover the 3.664 1.842.694.940.

406 4.980 3.2 i) ii) iii) iv) v) vi) 369.038.415. D.000.920.745 13.816 132.647 46.669 114.1+14.816.181.2 i) ii) iii) IB General Account (Un-reconciled Entries of Inter Branch Transactions in Bangladesh) Age Upto 3 months Over 3 months but not more than 6 months More than 6 months Total Number 27.575 39.965.154.payable within 1 month Over 1 month but within 6 months Over 6 months but not more than 1 year Over 1 year but not more than 5 years Over 5 years but within 10 years Sub-total Total (14.168.Howladar Yunus & Co.221.205 369.C.229 489 27.911 5.774.10 dated November 25.776. Bank did not revalue Land & Building during the year 2007.341.881.664) 3.000.087 890.996.215.286.341.657. 1993 & June 15.871 5.256.288.048 39.805.483 48.213.547.578 351. the Bank revalued its Land and Building by the professional valuers for the year 2000.835 25.158.486.2) 1.406 35.478.876 24.181.557.109 25.783 10.300.240.000. 2002.393.282.509.2) Accrued Income Deferred Revenue Expenses F.120.217.904 1.667 10.183.118.1 i) ii) iii) 963.700 132.155 408.482 34.0 14. 2007 2006 13.0 i) ii) iii) iv) v) vi) vii) viii) ix) x) Other Assets Stock of Stationery in Hand Stamps in Hand Advance Rent Paid Security Deposits Paid Account Suspense Account (Advance against Expenses) D.325.326.292 137.716.359 202.291.671.700 137.724 27.819 (1.924. 1993 and BRPD Circular No.096 14.774.254.403.288. Fund Purchased Total Classification Status of Other Assets Unclassified Doubtful Bad/ Loss Total 41.Bank Deposits are as under Re-payable on Demand With a residual maturity of Re.205 166.939.139.918 165.419.121 341.979.524 24 . 2003. 12 & 18 dated April 20.325 9.283.547.360 13.767.983 99.290.795.001 6.904 34.1 i) ii) iii) iv) v) vi) vii) Deposits & Other Accounts Maturity Grouping of Other Deposits are as under Re-payable on Demand With a residual maturity of Re.425.718 Amount in Taka Amount in Taka 3.114 4.217. Paid without Advice IB General Account (Note -13.991.509 4.955.945.155 14.013.309. 2002. Amount in Taka as at December 31.288.978 1.824 14.160.881 31.920. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants As per Bangladesh Bank BCD Circular Letter No.291.013.336.900 355.587.124 2. 2005 & 2006 respectively which was required by the Statutory Auditors.000 261.528 2.974.999 199.745 13. 2004.payable within 1 month Over 1 month but within 6 months Over 6 months but not more than 1 year Over 1 year but not more than 5 years Over 5 years but within 10 years Unclaimed Deposits for 10 years or more Sub-total Maturity Grouping of Inter.

513.581.264.181.000 137. 2007 2006 14.124.683.194 1.512.390.529 1.402 2.000 278.168.675 5.480.275.541.NRD Security Deposits .524 15.431 469.367.205 780.114 700.339 304.369 151.631.906 16.827.682 21.807 18.370 513.375 198.834.216.0 i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) xvi) xvii) xviii) xix) xx) xxi) xxii) 9.3 Sector Wise beak up of Deposits and Other Accounts Government Deposit Money Bank Other Public Foreign Currency Private Total Current & Other Accounts Al Wadeeah Current Deposits Convertible Taka Account Non Resident Investors Taka Account Non Resident Dollar Account Non Resident Taka Account Foreign Currency Account (US Dollar) Foreign Currency Account (GB Pound Sterling) Foreign Currency Account (EURO) Foreign Currency Account (Riyal) Private Foreign Currency Account Property Development Account Security Deposit .735.Foreign L/C General Security Deposit .493 2.507.625.117 173.156 21.965 34.508.325 347.627.351.275 459.Howladar Yunus & Co.410 6.615.958.595 441.Back to Back L/C (Inland) Security Deposit .951.346 3.599 890.205 41.341.493 2.860 115.452.522.057.000 837.314.353.814.000 914.449 10.094.676.165.711.255 189.T.400.868.521 11.000 369.403.IBP Security Deposit .425 74.881 51.682 531.765.979.768.470.125.104.483.505 1.785 16.FBN Security Deposit .802.020 39. Payable Total Other Mudaraba Deposits Mudaraba Special Notice Deposits Mudaraba Hajj Deposits Mudaraba Savings Bond Mudaraba Special Savings (Pension) Deposits Mudaraba Monthly Profit Deposit Scheme Mudaraba Foreign Currency Deposits Mudaraba Muhor Savings Mudaraba Waqf Cash Deposit Total Other Banks' Deposits with us Al Wadeeah Current Deposits Mudaraba Special Notice Deposits Mudaraba Savings Account Total 553.202 1.010 633.780.155 2.1 i) ii) iii) 170.645.769 30.909 166.831.061 9.931 703.216.151.733.000 113.721 582.428.479.181.706.885.053.791 92.283.767.630.501.510 82.286.331.250.290.119 137.081.639.0 i) ii) 17.611 553.222.748.017.865.245.587.780.736 155.588 18.011.070.808.095 51.688 14.785 6.016.426 17.225.520 5.023.785 151.Investment Security Deposit .193 205.718.325.419.806.397.575.830 162.823 369.532 12.296 19.341.257 880.518.048 1.085.089 5.341.174 62.708 1.686.292 127. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.135.007 145.439.906.708 50.700 515.037.154.Inland L/C Profit Payable Sundry Deposits Total Bills Payable Payment Order T.178 163.712 208.837.001 2.600 23.324.670.L/C (Wes) Security Deposit .874 79.755 965.943.541.730.633 3.696 132.128 130.0 i) ii) iii) iv) v) vi) vii) viii) 1.345 10.076.016.093 17.792.057.Bank Guarantee Security Deposit .700 25 .

931. 2007 2006 18.463.171 3.851.250 20 7.010 96.642.3) 19. 19.422 1.2 & 19.789.855.101.000 3.316 (414.522.883.128.422 291.738 18.270.945 1.568.L/C Cover A/C Foreign Currency Held against Back to Back L/C Foreign Correspondents Charges Incentive Bonus Payable Valuation Adjustments Foreign Currency Fund Held Payable against Expenditure Clearing Adjustment Transfer Delivery Profit/ Rent Compensation Suspense Account (Note .4.636.934 87.013.4.947.Howladar Yunus & Co.032.156.622.814.127.775.555.572 4.148.357.975.000 508.699 120.032.665.691 18.639.069 1.971.000 4.568.955 2.005.7) Total Provision for Classified Investments Provision held at the beginning of the year Fully provided Investment written off/ transferred Provision against recoveries of Classified Investment Provision made during the year Net charge to Profit & Loss Account Total Provision held at the end of the year General Provision on Unclassified Investment Provision held at the beginning of the year Addition during the year Balance at the end of the year Provision for Classified & Unclassified Investments (19.860.904 1.148.4 19.000.525.0 i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) xvi) xvii) xviii) Other Liabilities Provision for Classified & Unclassified Investments and Off.926.184.3 26 .000.677 42.000 1.646 266.826 1.013.148.007.205.422 81.6) Others ( Note .205 16.713.084 (107.638.060.677 42.1 + 19.652 1.894.735.000 291.968) (170.775.316 4.732.257 706.844.19.855.251 24.2) General Provision on Off-Balance Sheet Items Provision held as on 1st January Add.485 619.368 12.256.032.000 3.167 4.1+19.081.866 (289.609.522.000 2.000.559.638.426 4.000 - Islami Bank Bangladesh Limited issued Mudaraba Perpetual Bond (MPB) under the Mudaraba Principles of Islamic Shari’ah as per approval of Bangladesh Bank (Central Bank) as well as Securities and Exchange Commission (SEC).780.2+19.727. 19.708.382.757.962 2.931 290.000.1 Provision for Taxation Current Tax Opening balance Add: (i) Provision made on business income (ii) Provision made on other income Less: Tax Paid during the year Closing balance 1.735.397.505 417.634) (190.123.934 100.316 19.000 1.672.120 1.19.4.257 112.000.387.195.700.000.780. The MPB was listed with Dhaka Stock Exchange Ltd & Chittagong Stock Exchange Ltd and trading of the same started from 25th November 2007.857 1. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.000) 823.316 1.508 605.375 1.826.291 361.000 436.Balance Sheet Items (Note-19.916) 1.2) Provision for Other Assets Zakat Payable Dividend Payable Foreign Currency Deposit .000) 83.1) Deferred Tax (Note-19.274 14.459.000 3.834.000 1.717.106 559.490.735.358.960.2 i) ii) iii) 19.302 236.771.598.224.3) Current Tax (Note-19.050.094 332.171.480 19.350 10.224.306 108.1.316 1.750.994 100.463. Provision made during the year Provision held as on 31st December Total Provision (19.960.5) IB General Account (Note .1 i) ii) iii) 1.652 653.224.703.000 1.459.137 170.568.636 837.19.200.797.443.156.0 Mudaraba Perpetual Bond 3.

826. 19.466) Balance at the end of the year 619.250 IB General Account (Un-reconciled Entries of Inter Branch Transactions in Bangladesh) Age Number Amount in Taka Amount in Taka Upto 3 months 121.000 divided into 3.646 605. and other add backs.000. thus Paid . 1995 & 1996. 2002. 2007 2006 Deferred Tax Liability Opening balance Add: Provision made during the year Closing balance 81.522 Amount recovered from Suspense Account during the year (330. 2003 & 2004 on Zakat and other issues.1 20.017. 1998.499 Over 3 months but not more than 6 months 1.2007 has been made as per prevailing rates applicable on the net Profit and without considering income tax on Provision made against bad and doubtful investments and Off-balance sheet items.000 each 3.2 Provision for Tax for the year ended on 31. 1999. Income tax has not been considered on the provision made against bad & doubtful investments and Off.950.000 each issued as Bonus Share 345.000 Ordinary Shares of Tk.000.456.000 each.12.570 17. 2007 declared 10% Stock Dividend (Bonus Share) for the year 2006.677 31. 1996. Review of appeal filed against judgment of appellate Division of the Supreme Court for disallowance of Zakat for the years of 1990. 3. Income Tax Assessment for the Accounting year 2005 has been completed at the Commissioner (Appeals) level and assessment for the accounting year 2006 is lying with the Deputy Commissioner of Taxes level.Howladar Yunus & Co.000 each fully subscribed by: 27 . Estimated Tax on such provision and the amount involved in the Reference Applications / Appeals have been shown as Contingent Liabilities as at December 31.000.60 million during the year 2007 .5.509.107 81.000 112. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants 19. Reference Applications/ Appeals have been filed with the High Court/Supreme Court for the Accounting years 1990.771 111.551.600. 1997. as detailed below: 3. (if any).1.600.459.000 divided into 5.572 Others Provident Fund Collection Account 660 Benevolent Fund Collection 170 20 Social Security Fund Collection 3.6 i) ii) iii) 19.481.823) (62. Tax base represents the written down value of Assets with adjustment used for tax purpose.677 63.456.456.3.7 i) ii) iii) 20.000 a) The Paid-up Capital of the Bank was Tk.1.801. 2001.250 542.459. 1995 & 1996disallowance of Zakat for the years of 1990.Balance Sheet Items during the year 2007 with positive hope based on persuasion made with the government that it will be exempted from tax.153) Amount written-off / waived during the year (22.443.1.443. 2007 Income Tax Assessment has been completed at the Deputy Commissioner level as well as Income Tax Tribunal level up to the Accounting year 2004.000.801.814.677 Provision for Deferred Tax has been made on all temporary differences between the Tax base and the carrying amounts for financial reporting purpose as per Bangladesh Accounting Standard 12. Tax rate prevailing at the Balance Sheet date is used to determine Deferred Tax.3.684.4.763.00 million to Tk.2 Profit/ Rent/ Compensation Suspense Account Balance at the beginning of the year 605.5 i) ii) iii) iv) 19.000.0 20. 1995.586.459. 2000. Amount in Taka as at December 31.000 Total 3.399) (215.000 345.801.801.up Capital of the Bank has been increased from Tk.600 Ordinary Shares of Tk.522.009 155.387.000 Ordinary Shares of Tk.350 20 Share Capital Authorized Capital The Authorized Capital of the Bank is Tk.1.600 Ordinary Shares of Tk.568. Paid up Capital th The Shareholders of the Bank in the 24 Annual General Meeting held on September 30.347 Amount transferred to Suspense Account during the year 367.618 340.600.780 266.073 More than 6 months Total 122.520 Total 4.

922 2.000 2.61 644.58 14. 2007 issued by Bangladesh Bank.296.00% in 2007 & 9.Howladar Yunus & Co.809 3.00 1.600 Percentage (%) 14.000 Shares 30.668.94 6.000 1.00%) iv) Exchange Equalization Account v) Revaluation Reserves of Securities vi) Mudaraba Perpetual Bond (30.747.59% 60.3 No.801. 2002 which was subsequently amended as per BRPD Circular No.491 114.568.765.747.456.801.00% of Core Capital) Sub Total (b) Grand Total (a + b) Core Capital (as required minimum 5.042.629.00 864.801.00% in 2007 & 9.49% 12.435.765.Balance Sheet Items iii) Assets Revaluation Reserves (50.02 2.137.43% 28 .084 141.02 6.92 15. of Shares as on 31 Dec.771 142.50% in 2006) Actual Capital (as required minimum 10.78 7.403.41 307.629 49 3.64% 3.48 140.504.959.16 9.922.552.43 32.546.000 Shares 50.258 119.00% in 2006) 250.78 3.000 Shares 5.98 38.99 2.000 2.115.634.600. 2007 2006 (in Million Taka) (in Million Taka) Total Assets including Off-Balance Sheet Items Total Risk Weighted Assets Required Equity (based on total Risk Weighted Assets 10. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31. of Shareholder 26.75% 2.00% 3.372.504.36 2.000 Shares 20.60 10.23 38.801.43% 3.688.00 7.488 Total Holdings/ No.600 % to Total 39.41 644.000 49.270.572. b) Break up of Share holding and percentage thereof Holdings Less than 500 Shares 500 to 5.001 to 20.10% 3.219.000 3.765.097.71 6.96 6.435.92 15.219.083.971.96 1.296.18 3.001 to 10.001 to 100.055 385 16 11 5 4 2 2 8 26.00% 100.546. 10 dated November 25.94 1. 2007 1.41 2.001 to 50.140.000 ** The shares have already been sold by the Government of Bangladesh but no transfer has been made in share register of the Bank as yet. 2004 & 05 dated May 14.43 32.03 dated May 09.95% 9.000.71% 3.507 2.001 to 30.001 Shares & above Total 20.00% in 2006) Actual Equity i ) Core Capital ii) Supplementary Capital Total Equity (i + ii) Surplus Equity A) Core Capital i) Paid Up Capital ii) Share Premium iii) Statutory Reserve iv) General Reserve v) Investment Loss Offsetting Reserve vi) Dividend Equalization Account vii) Retained Earnings including proposed dividend Sub Total (a) B) Supplementary Capital i) General Provision on unclassified Investment ii) General Provision on Off .688.14% 53.000 Shares 40. of Shares 550.872 480.000 Shares 10.99 3.005.000 3.33 419.000 45.15 1.00% 1.123 117.09 9.54% 11.685 92.60 10.18% 188.74% 100.026.24 9.001 to 40.664.50 140.36 1.00% in 2007 & 4.00% Capital (Equity) Adequacy Ratio The Capital Adequacy Ratio of the Bank has been calculated as per BRPD Circular No. 2007 2006 Particulars (i) Sponsors/ Promoters (ii) General Public (iii) Government of the People's Republic of Bangladesh** Sub Total (a) No.27 110.000 Shares 100.96 476.95 2.456.41% 0.72 291.60 1.00 1.

1) Dividend Equalization Account Revaluation Reserve of (22.855 3.828 248.542 22.149 1.878 3.275.000 409. 2007 2006 21.280.329 1.000 307.0 i) ii) iii) iv) 23.480) 140.062 464.255 756.633 644.989.000 22.687 (279.097 (45.2 307.1 23.182.202.416.447.147.254.960.1 2.410) 419.594.687 1.460.000 1.026. 22.316 109.081 38.275.610.889.255 20% of Net Profit is transferred to Statutory Reserve Account each year until the Cumulative balance equal to the amount of Paid up Capital Account as per Section 24 of the Bank Company Act 1991.441.950.498.523 3.000 32.164.000 2.000 32.000 1.894 3.430.405. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka as at December 31.254 581.000.404.426.730.460.997.000) 2.405.270.000 (4.760.001 2. 3.855 3.960.587.270.950.2 No set off made between assets & liabilities during the year.729.081 38.618.000 Million: Set off made in Assets & Liabilities: b) c) d) e) f) g) 419.460.500.300.733.000 (18.618.2) Securities Sub total (ii) Grand Total (i + ii) Assets Revaluation Reserves Opening balance Addition during the year Adjustment during the year Closing balance Revaluation Reserve of Securities Opening balance Revaluation made during the year Closing balance Letter of Guarantee (a) Claim against the Bank which is not acknowledged as debt (b) Money for which the Bank is contingently liable in respect of guarantees given favouring : Directors Government Bank and other Financial Institutions Others Total Security Pledged against Mudaraba Perpetual Bond (MPB) Liabilities of Tk.950.671 - 23. 29 .688.141 2.560.215.0 Reserve Fund and Other Reserves Statutory Reserve Opening Balance Add: Addition made this year Closing balance 2.278 768.333.001.280.000.333.400.207 1.Howladar Yunus & Co.899.000 307.416.280.737.426.600.565 2.100.141.989.906.000 1.280.856.141 2.000) 2.000 3.500.0 a) Others Reserve General Reserve Opening Balance Add: Addition/ (Adjustment) made this year Sub total (i) Share Premium Investment Loss Offsetting Reserve Exchange Equalization Account Assets Revaluation Reserves (22.633 644.

190.714 196.836.763.652 5.884 21.480 29.525.323 14.540.408 3.762 1.480.479.284.883 286.067 1.840.581 2.388.593 2.01) Total Exchange Income Gross Exchange gain Less: Exchange loss Net Exchange gain Other Operating Income Rent on Locker Telephone/ Trunk Call Charge recovered Telex Charge recovered P&T Charge recovered Legal Expenses recovered E & TA Fees recovered Income from ATM & SWIFT Incidental Charges recovered Service Charges recovered Rent on Premises realised Sale proceeds of Tender Schedule Profit on sale of Bank's Premises Profit on sale of Bank's Car Written-off Investment Recovery Recruitment Fees Others Profit / (loss) due to change in profit rate Total 1.659.721 11.608 96.772.283.336.684 4.110.522 71.800 6.601 28.596 38.410 1.705.746 35.974 26.0 i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) xvi) xvii) 2.601 1.896.548.0 i) ii) iii) iv) v) Profit paid on Deposits Profit paid on Mudaraba Savings Deposit Profit paid on Mudaraba Term Deposit Account Profit paid on other Mudaraba Deposits Profit paid on Placement Profit paid on Mudaraba Perpetual Bond (MPB) Total Income From Investments in Shares/ Securities Profit/ Dividend Income from Shares/ Securities Commission & Exchange Income Commission Income Exchange Income (27.413 37.305 901.329 3.653.572.465.939 5.138.695.431.418 244.480.339. 254.120.367.1 1.150.509 46.596.930 realized during the year.812 .007.045.Howladar Yunus & Co.367.146.643 5.453 1.488.482.417 75.611 8.897.573.082.485.0 Investment Income Income from General Investment Bai Murabaha Musharaka Bai Muajjal Hire Purchase under Shirkatul Melk Bai Salam Foreign Bill Negotiation Others Sub Total (i) Profit on Deposits with Islamic Banks (a) In Bangladesh (b) Outside Bangladesh Sub Total (ii) Grand Total (i + ii) 8.363.326.836 3.141 26.002.019.835 11.011 2.324.601 2.190.444.137 5.653.764.345 1.057.322.179.313.185.574 27.190.012.080.653.418 17.688. 2007 2006 24.710.311.466 188.145.637 264.357 57.192 Investment Income includes Profit/ Rent Suspense of Tk.092.634.554.996 736.630 4.149 6.800 5.388.533 137.067 2.614 32.410.099 216.456.974 292.461.704.294.409 84.405.702.359.645 7.793.639 55.875.402 63.192 2.932 9.934 3.756 25. 25.158.0 i) ii) 27.089. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka Year to December 31.393 14.229 11.194.067 1.587.554.500 1.375.0 284.088 59.959.567 1.181 3.367.522 296.310 4.554.421.579.802.884.471 2.365.355.761 56.808 4.649.938 3.274.433 30 .170.821.725.679.265 761.376.233.036.176.412.143 45.

1 i) ii) 33. 2.615.200 8.286 10. etc.151.690 40.067 2.949. Rates and Taxes Insurance Electricity and Lighting Total Postage.306 8. Stamp.705.941.271 11.405 2.751 78.379 135. 2.354 143.896 13. Advertisements etc.209 25.719 Tk.546 62.000/Tk.3 Income from Fluctuation Income from Profit Fluctuation Less: Loss from Profit Fluctuation N/A N/A 29.0 i) ii) iii) Rate of Fees for attending Board/ Executive Committee/ Other Committee Meeting For Board Meeting For Executive Committee/ Other Committee Meeting Depreciation and Repair of Bank's Assets Depreciation: Premises Depreciation: Furniture & Fixtures and Other Fixed Assets Sub Total Repair of Bank's Assets Total 40.650.166. Insurances.240 42.703. Postage Telegram & Telex SWIFT Charges Telephone Fax.271.144.384 41.278 24.211 95. Rent.372.403 790. 3.1 Income From Dealing Securities Income from Dealing Securities Less: Loss from Dealing Securities N/A N/A 28.500/Tk.418.200 179.953. Trunk-Call & Internet Stamps Total Stationery.586.486 3.573.281 89.420 14.893 3.369.250. Printings.620.985 2.0 i) ii) iii) Rent.884.356 168. Telecommunication.0 ii) iii) 32.556 69.365 8.780.030.230 84.777 10.502.830 50.0 i) ii) iii) 32.358.058.510 58.770.986 101.200/Tk.486 33.692 77.0 i) ii) iii) iv) v) vi) 31.027 8.915 27.000/- 31 .757.060. etc.617. 2007 2006 28.930 128.324.500.767 39.103 177.599.261 1.023.753. Electricity.533 29.248.559.181 2. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka Year to December 31.2 Income From Dealing Investment Income from Dealing Investments Less: Loss from Dealing Investments N/A N/A 28. 4.194.Howladar Yunus & Co.619.949.270.367 79.109.251 30.701. Taxes. Paper & Table Stationery Printing and Stationery (Registers and Forms) Advertisement & Publicity Total Directors' Fees and Expenses i) Directors' Fees for attending Board/ Executive Committee/ Other Committee meeting TA/DA/Hotel bills for Local & Foreign Directors Others Total 2.144 77.082.109 216.781 47.266.897.

160.011. 35.043 2.783.568 2006 23.514.502.210.000 1.782.976.530.193 11.310 12.786 36.708 440.0 Retained Earnings: Movement of surplus Profit & Loss Account Retained Earnings as on 1 January Addition during the year : Proposed Dividend Others Total Less: Amount transferred to Paid-up Capital (Bonus Share) & Cash Dividend Balance of Retained Earnings including Proposed Dividend as at 31.935 4.779 87.526.378.285 incurred during the year 2006 as repairs and maintenance.677 4.921.000.386.849.202.000.535 447.307 2.794.000.079.701.572.480 371.584 2.814.615.132 6.000 (691.350 7. A sum of Tk.718 3.654. The Motor Vehicles are used for the Cash Carrying purpose.037.160 19.833 42.A.131.133 4.12.795 3.691 2.A.689 3.054 11.462.250 13.979 282.000 6.844.815.887.911 261.683.183.100.000 30.625.389. & D.414 1.301.091.000 2.706 2.573 2.781.091.095 34.676 1.285.435 34.516 11.092 509.400.712 54.433 356.358 25.200.044. Jeeps 15.Howladar Yunus & Co.271 500.043 691.082 5.1 As on 31.000 864.913 3.090.513 399.200. 31.534.960 1.480 1.2007 the Bank had 215 (Two hundred fifteen) Motor Vehicles (Cars 181. purchase of fuel & lubricants and insurance etc.859 2.000 1.000.456.000) 864.600.520 27.000 1.000 32 .784 3.699 1.543.514 141.921 3.000 950.626.288.430 15.2007 as against Tk.304 746.068.315 2.436.555.448 963.000 621.766 7.468.426.639 12. other important works of the Bank and some are with the Senior Executives of the Bank as per Transport Policy of the Bank.076.608.314 19. December 864.079 100.987 5. cost for the Motor Vehicles of the Bank.12.691. Repairs to Rented Premises Motor Car Running & Maintenance Periodicals & Newspapers Entertainment Overtime Direct Expenses on Investment Training Expenses Meeting Expenses Bank Charges Uniforms Conveyance Honorarium & Cash Award Membership Fees (Subscription) Staff Welfare Evening Banking Allowance Zakat Computer Expenses Wages Discomfort Allowance Air Condition Maintenance WASA / Gas Expenses Washing Charges Transportation Charges ATM Charges Reuters Charges Business Development Expenses Photocopy Expenses Upkeep of Office Premises Clearing House Expenses Bonus Share Issue Expenses Rating Expenses Band Width Charges Table Wares Other Regulatory Fees and Expenses MPB Expenses Natural Disaster Operation Brokerage House Donation Recruitment Fees Miscellaneous Total Motor Car Running and Maintenance Aziz Halim Khair Choudhury Chartered Accountants Amount in Taka Year to December 31.067 14.692.454 1.091.310 16.000 1.180 2.106.293.466 5.368 22.560 4.200.617 3.544.000.089.200.011.739 783.317 11. Development works.224.000) 1.836.717.197.768.894.738 15.181. Chartered Accountants 34.35.319 2.199.0 i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) xvi) xvii) xviii) xix) xx) xxi) xxii) xxiii) xxiv) xxv) xxvi) xxvii) xxviii) xxix) xxx) xxxi) xxxii) xxxiii) xxxiv) xxxv) xxxvi) xxxvii) xxxviii) xxxix) xxxx) xxxxi) Other Expenses T.750 4.043 (864.390.930 22.687 30.654.459 38.603 was incurred during the year ended on 31. 2007 34. Pickups 14 and Microbuses 5).

328. Amount in Taka Year to December 31.863 22.329.Howladar Yunus & Co.225 38.591. 37.480 20.037 14.00% Stock Dividend subject to approval of the shareholders in the ensuing 25th Annual General Meeting to be held on 29th August 2008.801.1 Post Balance Sheet Events : The Board of Directors of the Bank in its 158th meeting held on 17. Md.000 28.0 Earning Per Share (EPS) (a) Attributable Profit for the year (b) Number of outstanding Shares Earning Per Share (EPS) (a ÷ b) 2.000. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants 35. 2007 2006 36.2008 recommended @ 25. Fariduddin Ahmed DirectorManaging Director 33 .0 Currency wise Exposures Currency wise exposures are shown at Annexure-B.600 539. Previous years figures have been adjusted due to issue of 345.088.125 4.457 3.141.634 3.077.907.600 368.314.053.00 1.348. Eskander Ali Khan Director Director Md.000.000.783.169.410.591 3. Kazi Harun-ar-Rashed Engr.012.400. FCA M.500.049.799.108.801.728 1.149. Shamsul Huda.04.642 1.127.0 Reconciliation of Cash and Cash Equivalent at the end of the year i) Cash in hand ii) Balance with Bangladesh Bank and Sonali Bank iii) Balance with other Banks and Financial Institutions iv) Bangladesh Government Islamic Investment Bond (Islamic Bond) Total 2.600 Bonus Shares during the year 2007 against Stock Dividend of 2006.000 41.42 Earning Per Share has been calculated in accordance with BAS 33.

390 312.874.773 2.843.773 1.004 3.188 190.768.101 1.704 30.734.533.390.919 3.540.324.068.051 920.10) Written down value as at 31.030.00% 110.586.514.359.930 40.948 95.433.809.050 8. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Islami Bank Bangladesh Limited Fixed Assets Schedule As at 31 December 2007 (Ref.253 3.867 1.441.582.923 66.311.244.249.170 - 135.534 40.2007 11 (5 .051 1.883.582.249.135 32.740 6.774 409.2007 5 (2 + 3 .362 3.017 199.12.431 .403.000 3.244.201.253 185.01. 6 Depreciation Charged upto 01.665.842.642.109 191.664 5.2007 7 Charged during the year 8 Adjustment during the year 9 Total as at 31.00% 152.296 Cost of Softwares Motor Vehicles Books 206.0) Taka Cost Particulars Balance as at 01.510.750 1.12.916.404.850.00% 20.255.230 90.176 1.032 66.961.432 69.996.458.896.930 40.557 3.249.984.984.045 697.900 1.843 586. Revaluation Total Premises (A+B) C.218.711.370.00% & 25.420 6.741.655 384.478.662 69.4) Rate of Dep.176 14.559.000 1.635.12.004 255.230 152.105.677.864.510.144.000 232. Premises Land Building Construction/Capital Work in Process Sub total (A) B.2007 10 (7+ 8 .426.156.109 191.184 577.567.00% 30.230 152.2007 1 A.700 191. Note 12.50% 10.103 54.875 20.586.423 1.893 920.097 2.961.759.426.285 2.370.225.984.01.223 5.056.558.807 40.065.Howladar Yunus & Co.184.044 146.2006 12 2.764 225.143.586.175.533.360 723.774 164.916.12.959 244.566.930 18.424 1.109 108.599.842.340.052.625.400. Furniture and Fixtures Mechanical Appliances and 1.619.534 225.254 1.841.751 551.900 2 Addition during the year 3 Sale / adjustment during the year 4 Total as at 31.051 920.918 2.9) Written down value as at 31.557 3.390.223 78.017.792 306.126 14.068.141.350 165.682.458.362 294.916.927 97.

170 Aziz Halim Khair Choudhury Chartered Accountants 8.166.982.894.675 505.105 4. Eskander Ali Khan Director Md.465.529 3.792 596.636 445.027.015.787 128.385.683 821.585.232.557 661.793 1.661. Fariduddin Ahmed Managing Director 2 .617 22.356 168.Howladar Yunus & Co.610.468.385. Shamsul Huda.281 629.808.694.090 220.722.086 4.467 509.753.987.230 8. Md.724.051.293.422 3.044. FCA Director M. Chartered Accountants Sub Total (C) Total (A to C) 1.226.303 Kazi Harun-ar-Rashed Director Engr.745.678.988.286 7.

137 2.303 - - - - - - - - 3.820.547.350.108.232.486.037 Total Taka ASSETS 2007 1 Cash in Hand Balance with Bangladesh Bank & its agent bank Balance with other Banks & Financial Institutions Money at Call & Short Notice Investments (in Shares & Securities) Investments Fixed Assets including Premises Other Assets Non Banking Assets Total Assets 2 2.161 - 1.907.854.127.217.125 22.530.177.801 148.229 1.071.575.940 1.800.478.092.368.388 2006 9 1.433 450.575.000.710.971.252.745 150.724.892 13.169.863 11.263 23.141.372 48.594 2006 7 6.399 144.675 3.013.129 113.672 2006 3 1.744.129 3.173 2007 4 18.573 14.717 4.383 183.031 2006 5 12.497.365.257 186.365.303 872.595 3.353.673.399 113.688.724.978.547.768 2007 12 2.372 20.249.380.760.189 4.349.819.216 - - 89.728 2.920.181.399 144.047 2007 8 605.987.710.Howladar Yunus & Co.070.328 174.920.337 2007 6 11.533 20.634 20.557.041 189.694.430.465.246.487.217.267.293 11.278.263.739 94.328.018 - 4.547.538 2006 13 1.329.745 25.795.609.217 38.350 759.149.675 3.012.545.410.823 18.488 31.399 - - - - - - 20.303 - 1.406 191.359 3 .351.671.694.877.449.107 58.760.487 74.628.993 6.521 139.043.481 4.353.239.170.926.014.071.799.317.549 1.557.146.390.621.388.349.480 1.595 3.281.987.420 - 118.609.166. Chartered Accountants Aziz Halim Khair Choudhury Chartered Accountants Annexure-B Islami Bank Bangladesh Limited Currency wise Exposures Amount in BDT BDT Equivalent Taka of US $ Equivalent Taka of GBP Equivalent Taka of EURO Equivalent Taka of Other Currency 2007 10 1.129.020 6.352 2006 11 1.404 241.232.362.314.657.

841.692.688 9.120.659.119 - 27.254 131.760.688 22.103.872.826.000 72.409.146 (5. FCA Director M.069.171 3.409.644. Chartered Accountants LIABILITIES 2007 Borrowing from Bangladesh Bank.947 10.000.004 10.680 227. Md.013. Shamsul Huda.000 27.977 44.611 24.896.167 1.000 178.128.473 8.000 179.000.325 66.313 1.500.396.767.876 9.196 130.700.340 70.037) Kazi Harun-ar-Rashed Director Engr.195.476 890.007.672. Fariduddin Ahmed Managing Director 4 .521.578.119 171.369.245.378.463 11.606.Howladar Yunus & Co.184.409.000 - 70.760 3.195. Financial Institutions and Agents Deposits Bills Payable Other Liabilities Mudaraba Perpetual Bond Total Liabilities Net position BDT Aziz Halim Khair Choudhury Chartered Accountants Equivalent Taka of US $ Equivalent Taka of GBP Equivalent Taka of EURO Equivalent Taka of Other Currency 2007 2006 2007 Total Taka 2006 2007 2006 2007 2006 2007 2006 2006 - - - - - - - - - - - - 163.727.480 140. Eskander Ali Khan Director Md.727.146 3.529.469 777.988 11.370.800.766.977 24.184.193.553.587.083.553.005.246.001 10.221.249.148.480 - 795.128 23.054 797.141.968 22.797 139.611 165.000.760.048 7.200.316.540.680 739.588.482.336.941.000.283.706 1.557.787) (14.232.291 1.000 - 164.116.826.222.325 4.699.928. other Banks.285 7.048 7.211.394.348 610.171 3.104.553.