Annual IBBL PDF

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 Banks 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 Banks 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
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,
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

Note Amount in Taka as at December 31, 2007 2006
LIABILITIES AND CAPITAL

Liabilities Borrowing from other Banks, Financial Institutions and Agents Deposits & Other Accounts 14.0 Current and Other Accounts 15.0 Bills Payable 16.0 Mudaraba Savings Deposits Mudaraba Term Deposits Bearer Certificate of Deposits Other Mudaraba Deposits 17.0 Mudaraba Perpetual Bond 18.0 19.0 Other Liabilities Total Liabilities Capital/ Share-holders' Equity Paid - up Capital Statutory Reserve Other Reserves Retained Earnings including Proposed Dividend Total Liabilities & Shareholders' Equity 166,325,286,292 19,165,151,675 1,767,587,001 62,403,504,533 31,103,691,826 51,885,351,257 3,000,000,000 10,195,727,171 179,521,013,463 11,841,336,254 3,801,600,000 3,026,498,149 3,441,147,062 1,572,091,043 191,362,349,717 132,419,403,524 14,016,125,906 890,283,048 52,118,579,669 25,872,279,475 39,522,135,426 7,826,184,480 140,245,588,004 10,007,232,797 3,456,000,000 2,270,333,255 3,416,899,542 864,000,000 150,252,820,801
20.0 21.0 22.0
OFF-BALANCE SHEET ITEMS

Contingent Liabilities Acceptances & Endorsements Letters of Guarantee 23.0 3,610,729,523 Irrevocable Letters of Credit (including Back 47,223,498,987 to Back Bills) Bills for Collection 7,397,027,013 Other Contingent Liabilities 1,040,878,744 Total 59,272,134,267 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, credit lines and other commitments Total Off - Balance Sheet items including 59,272,134,267 Contingent Liabilities The accompanying notes 1 to 38 form an integral part of these Financial Statements
Kazi Harun-ar-Rashed Director Engr. Md. Eskander Ali Khan Director Md. Shamsul Huda, FCA Director
2,447,254,671 29,673,720,306 5,203,994,972 537,477,758 37,862,447,707 37,862,447,707
M. Fariduddin Ahmed Managing Director
Signed as per our annexed report of same date Howladar Yunus & Co. Chartered Accountants Dated, Dhaka April 27 2008 Aziz Halim Khair Choudhury Chartered Accountants
Aziz Halim Khair Choudhury Chartered Accountants ISLAMI BANK BANGLADESH LIMITED Profit & Loss Account For the year ended December 31, 2007
Note 24.0 25.0 26.0 27.0 28.0 Amount in Taka Year to December 31, 2007 2006 14,572,185,149 11,158,057,192 (9,410,587,581) (8,019,336,141) 5,161,597,568 3,138,721,051 284,002,533 137,375,574 2,579,012,567 2,456,725,011 264,322,762 286,145,433 8,288,935,430 6,018,967,069 2,034,596,249 216,615,830 11,984,452 84,949,278 78,757,200 2,629,717 8,372,181 449,350 179,023,486 509,197,568 3,126,575,311 5,162,360,119 1,381,535,652 1,381,535,652 3,780,824,467 1,848,280,506 177,266,251 10,955,172 77,949,546 77,559,915 2,940,000 8,109,777 418,000 143,897,719 356,293,095 2,703,669,981 3,315,297,088 401,532,084 5,100,000 406,632,084 2,908,665,004 1,490,123,306 17,950,107 1,400,591,591 1,400,591,591 1,400,591,591 1,400,591,591 581,733,001 (45,141,410) 864,000,000 368.42
Investment Income Profit Paid on Deposits Net Investment Income Income from Investments in Shares/ Securities Commission, Exchange & Brokerage Other Operating Income Total Operating Income Operating Expenses
Salary & Allowances Rent, Taxes, Insurances, Electricity, etc. Legal Expenses Postage, Stamp, Telecommunication, etc. Stationery, Printings, Advertisements etc. 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
29.0 30.0 31.0 32.0 33.0 34.0
Provision for Investments & Off- Balance Sheet Items 19.1 ,19.2 & 19.3
Provision for diminution in value of Investments in Shares
Other Provisions Total Provision Total Profit/(Loss) before Taxes Provision for Tax 19.4.1 1,700,771,010 Current Tax 19.4.2 31,000,000 Deferred Tax Net Profit/ (Loss) after Tax 2,049,053,457 Retained Earnings from previous year Add: Net Profit after Tax 2,049,053,457 Profit available for distribution 2,049,053,457 Less: Appropriation 2,049,053,457 Statutory Reserve 756,164,894 General Reserve (279,202,480) Retained Earnings including Proposed Dividend 35.0 1,572,091,043 36.0 Earning Per Share (EPS) 539.00 The accompanying notes 1 to 38 form an integral part of these Financial Statements.
Kazi Harun-ar-Rashed Director
Engr. Md. Eskander Ali Khan Director
Md. Shamsul Huda, FCA Director
Signed as per our annexed report of same date Howladar Yunus & Co. Chartered Accountants Dated, Dhaka April 27 2008 Aziz Halim Khair Choudhury Chartered Accountants

ISLAMI BANK BANGLADESH LIMITED Statement of Changes in Equity For the year ended December 31, 2007
(Amount in Taka)
Particulars
Paid-up Capital
Share Premium Account

3 1,989,633 -
Statutory Reserve
4 2,270,333,255 -
General/ Other Reserves *

5 1,134,449,909 -
Assets Rev. Reserves

6 2,280,460,000 -
Revaluation Reserves of Securities

7 -
Retained Total Earnings

8 864,000,000 9 (2+3+ 4+5+6+7+ 8) 10,007,232,797 -
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, 2007
2 3,456,000,000 -
(4,500,000)
(4,500,000)
307,950,000 -
307,950,000 -
345,600,000 3,801,600,000
1,989,633
756,164,894
(279,202,480) -
2,275,960,000
307,950,000
1,572,091,043 (864,000,000) 1,572,091,043
2,049,053,457 (864,000,000) 345,600,000 11,841,336,254
3,026,498,149
855,247,429
Note * General / Other Reserves General Reserve Investment Loss Offsetting Reserve Dividend Equalization Account Exchange Equalization Account Total
2007 140,416,207 644,426,081 32,000,000 38,405,141 855,247,429
2006 419,618,687 644,426,081 32,000,000 38,405,141 1,134,449,909
Kazi Harun- ar- Rashed Director
Signed as per our annexed report of same date Howladar Yunus & Co. Chartered Accountants Dated, Dhaka April 27 2008

ISLAMI BANK BANGLADESH LIMITED Cash Flow Statement For the year ended December 31, 2007 Note 2007 Amount in Taka Year to December 31, 2006 11,158,057,192 (8,019,336,141) 137,375,574 2,456,725,011 (1,851,220,506) (57,107,890) (1,081,559,857) 286,145,433 (659,768,220) 2,369,310,596
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. Net Cash from Operating Activities Cash flows from Investing Activities Proceeds from Sale of Securities Payment for Purchase of Securities Purchase / Sale of Property, Plants & Equipments b. 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. 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 37.0 14,572,185,149 (9,410,587,581) 284,002,533 2,579,012,567 (2,037,225,966) (118,809,424) (2,007,639,120) 264,322,762 (801,786,635) 3,323,474,285
(31,345,538,466) 3,547,204,339 232,159,505 33,673,723,263 1,263,875,149 10,694,898,075 (435,791,658) (435,791,658) 3,000,000,000 (518,400,000) 2,481,600,000 12,740,706,417 28,348,077,225 41,088,783,642
(19,930,916,155) (2,109,876,332) 116,270,191 24,523,715,199 107,849,958 5,076,353,457 (23,603,399) (401,375,922) (424,979,321) 4,651,374,136 23,696,703,089 28,348,077,225
The accompanying notes 1 to 38 form an integral part of these Financial Statements Md. Shamsul Huda, FCA M. Fariduddin Ahmed Director Managing Director
Kazi Harun-ar-Rashed Engr. Md. Eskander Ali Khan
Director Director Signed as per our annexed report of same date Howladar Yunus & Co. Chartered Accountants Dated, Dhaka April 27 2008

ISLAMI BANK BANGLADESH LIMITED LIQUIDITY STATEMENT Assets & Liabilities Maturity Analysis as at December 31, 2007 (Amount in Taka)
Particulars
Up to 1 Month
1 - 3 Months
3 - 12 Months
1 - 5 years
More than 5 years
Total 31.12.2007 7 (2 + 3 + 4 + 5 + 6)
Total 31.12.2006 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,Furniture and Fixtures Other Assets Non - Banking Assets Total Assets LIABILITIES Borrowing from Bangladesh Bank, other Banks, Financial Institutions and Agents Deposits Other Accounts Provision & Other Liabilities Mudaraba Perpetual Bond Total Liabilities Net Liquidity Gap -
2,907,141,037
2,907,141,037
1,410,149,863
13,636,231,954
2,727,246,391 3,000,000,000 10,144,442,672
1,818,164,260 17,000,000,000 40,577,770,687
50,722,213,358
365,710,399 39,853,167,639
18,181,642,605 20,365,710,399 144,920,609,595
23,437,927,362 3,557,760,399 113,575,071,129
3,623,015,240
555,007,440
112,001,501 20,721,395,671 15,983,690,564
154,776,481 175,002,346 59,725,713,774 -
496,459,137 150,002,011
3,335,997,057 8,000,107 43,562,875,202
3,987,232,675 1,000,013,406 191,362,349,717
3,724,694,303 4,547,217,745 150,252,820,801
51,368,674,506
14,969,275,766 713,700,902 10,355,409,749 10,365,985,922 15,682,976,668 300,713,896
54,887,344,476 3,568,504,510 58,455,848,987 1,269,864,787
48,816,471,527 1,835,230,892 50,651,702,418 716,972,088
39,335,930,208 2,039,145,433 3,000,000,000 44,375,075,641 (812,200,439)
166,325,286,292 10,195,727,171 3,000,000,000 179,521,013,463 11,841,336,254
132,419,403,524 7,826,184,480 140,245,588,004 10,007,232,797
8,316,264,315 2,039,145,434 -
Kazi Harun-ar-RashedEngr. Md. Eskander Ali Khan Director Director Signed as per our annexed report of same date
Aziz Halim Khair Choudhury Howladar Yunus & Co. Chartered Accountants Dated, Dhaka April 27 2008 Chartered Accountants
ISLAMI BANK BANGLADESH LIMITED

Notes to the Financial Statements For the year ended December 31, 2007
1.0
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 Shariah based Scheduled Commercial Bank in South East Asia. Naturally, its modus operandi is substantially different from those of other conventional Commercial Banks. The Bank conducts its business on the Shariah principles of Mudaraba, Musharaka, Bai-Murabaha, Bai-Muajjal, Hire Purchase under Shirkatul Melk and Bai-Salam etc. There is a Shariah Council in the Bank who ensures that the activities of the Bank are being conducted on the precepts of Islam. The Shariah Council consists of prominent Ulema, reputed Bankers, renowned Lawyers and eminent Economists. There are two Stock Exchanges in Bangladesh viz. Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited and the Bank is listed with both the Stock Exchanges. The Bank carries out its business activities through its Head Office in Dhaka having 186 Branches in Bangladesh. The principal place of business is the Registered Office at Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh.
2.0
Nature of business All kinds of commercial banking services are provided by the Bank to the customers following the principles of Islamic Shariah, the provisions of the Bank Company Act 1991 and Bangladesh Banks directives.
3.0 3.1
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. Although the operations of the bank are in strict compliance with the rules of Islamic Shariah, the Financial Statements have been prepared basically as per provisions of Bank Company Act 1991 as amended by Bangladesh Bank BRPD Circular No- 14 dated 25.06.2003, Bangladesh Banks 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 Securities and Exchange Rules 1987, Dhaka and Chittagong Stock Exchanges Listing Regulations and other laws and rules applicable in Bangladesh, Financial Accounting Standard issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Manama, Bahrain as a member of that organization. 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.
3.2
Investments in Shares and Securities and Revenue Recognition
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- 15 dated 31.10.2005 and adequate provisions have been made against probable losses. b) Dividend income on shares of Joint Stock Companies is accounted for when it is received. c) Profit on Investment in Bangladesh Government Islamic Investment Bond (Islamic Bond) is recognized on accrual basis. 3.3 Investments and Revenue Recognition a) Investments are stated in the Balance Sheet net off unearned income and profit receivable. b) Income from investments is accounted for on accrual basis except investments under Musharaka, Mudaraba, Bai-Salam etc. mode of Investment. Income in case of Mudaraba, Musharaka and Bai-Salam is accounted for on realisation basis. Besides, fees and commission income are recognised when earned. 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. Such income is recognised on realisation basis. 3.4 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. Moreover, income which is irregular (doubtful) as per Shariah is also not included in the distributable income of the Bank. Bank charges compensation on overdue Bai-Murabaha and Bai-Muazzal investments as per approval of an Independent Review Committee. Such compensation is not permissible as per Shariah to take into regular income of the Bank. Therefore, the total amount of compensation is used to build up provision for bad and doubtful investments. The realized amount of compensation is however transferred to Islami Bank Foundation for charitable purposes. 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 Shariah instead these are transferred appropriated to charitable purposes as per Board decision after payment of due income tax thereon. 3.5 Zakat Zakat is paid by the bank at the rate of 2.58% (instead of 2.50% as the Bank maintains its Accounts following Gregorian Year) on the closing balances of Share Premium, Statutory Reserve, General Reserve, Investment Loss Offsetting Reserve, Exchange Equalisation and Dividend Equalisation accounts. Payment of Zakat on Paid up Capital and Deposits is the responsibility of the Shareholders and Depositors respectively. 3.6 Retirement Benefit and Staff Welfare Schemes The bank maintains Contributory Provident Fund, Gratuity Fund, Social Security Fund and Benevolent Fund. These funds are managed by separate board of trustees.
10

a) Provident Fund
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, 1986. The fund receives contributions @ 10% of the basic pay both from employees and employer.Tk.998.79 million was available in the IBBL Employees Provident Fund as at December 31, 2007. b) Gratuity The Gratuity Fund for the regular and confirmed employees of IBBL was established on1st day of March, 1986. The employees who serve at least 7 (seven) years in IBBL, are normally entitled to get gratuity equivalent to one months basic salary of the employees for their completed year of services in the Bank. Gratuity for the employees of IBBL has been increased from 1 (one) Months basic pay to 1(one) Month, 1.5 (one and a half) Months and 2 (two) Months basic pay, considering the length of service and also for premature death in harness. The Bank has taken up various steps to build-up adequate fund gradually and Tk. 60 million has been provided during the year 2007 for the Fund. The Fund balance stood at Tk. 959.49 million as at December 31, 2007. c) Social Security Fund The Fund came into force with effect from the 8th December, 1988. It was established for financial help to the members of the IBBL Employees Social Security Fund and their families in case of death, 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. Tk.137.26 million was available in the IBBL Employees Social Security Fund as at December 31, 2007. d) Benevolent Fund The Benevolent Fund for the regular and confirmed employees of Islami Bank Bangladesh Limited was established in the year 1986. This fund is mainly used for payment of scholarship to the meritorious students among the children of IBBLs officers and sub-staff, to allow short term quard/ grant for the unexpected and certain needs of the staff of IBBL like accident, clinical treatment, marriage ceremony of the sub-staff and their dependents. Tk.68.06 million was available in the benevolent fund at December 31, 2007. 3.7 Fixed Assets and Depreciation a) Fixed assets are generally stated at cost/revaluation (where applicable) less accumulated depreciation as per BAS- 16 Property, Plant & Equipment. b) Depreciation is charged at the following rates on a reducing balance method on all Fixed Assets other than Motor Vehicles and Computers, 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 2.50% 10.00% 20.00% 20.00% 25.00% 30.00%
c) Depreciation at the applicable rates has been charged on addition to Fixed Assets during the year for the days of use. No depreciation is charged on building until the same is completed and brought into use.
11

3.8 Sharing of Investment Income
In case of Investment, Mudaraba fund get preference over cost free fund. 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. 3.9 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. b) The Assets and Liabilities including balance with other Banks denominated in foreign currencies as at December 31, 2007 are translated into Taka currency at the weighted average rate of inter Bank Market as determined by Bangladesh Bank. 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. 3.10 General a) The figures appearing in these accounts have been rounded off to the nearest integer. b) Previous years figures have been re-arranged to conform current years presentation wherever necessary. 4.0 Audit Committee As per Bangladesh Bank BRPD Circular No.12 dated December 23, 2002, an Audit Committee was formed by the Board of Directors of the Bank consisting of the Board members. As at December 31, 2007 the following honorable directors were the members of the Audit Committee: Sl. No. i) ii) iii) Name Janab Kazi Harun-ar- Rashed Engr. Md. Eskander Ali Khan Janab Md. Shamsul Huda, FCA Status with the Bank Director Director Director Status with the Committee Chairman Member Member Educational Qualification M. Com (Accounting) B.Sc. Engineering (Electrical) M.Com. (Accounting), FCA.
Audit Committee of the Board met in 35 (Thirty five) occasions, of which 06 (Six) meetings were held with the Senior Management of the Bank during the year 2007 in which among others, 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. (ii) In finalizing accounts for the year 2007, several alternatives and various pertinent issues, such as impact of Doubtful Income, Compensation & Profit Paid on Deposits (PPD), Capital Adequacy Ratio & Risk Weighted Assets etc. were considered. (iii) The Committee discussed in details the Audit Reports submitted by the Bangladesh Bank, check & control systems and provided appropriate guidelines to the Management for overall improvement of the Management and Accounting system and minimization of various risks. (iv) Like previous years, the Committee also exchanged views with the External Auditors and Management of the bank before Finalization of the Financial Statements. 5.0 Related Party Disclosure as per BAS 24
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5.1
Name of the Directors along with all related Firms/ Companies/ Institutions/ Related Parties as at December 31, 2007 Sl. No (i) Name of the Directors Prof. Abu Nasser Mohammad Abduz Zaher Jb. Yousif Abdullah Al Rajhi Moulana Zainul Abedin Jb. Mominul Islam Patwary Jb. Kazi Harun-ar- Rashed Engr. Md. Eskander Ali Khan Jb. Md. Jahangir Miah Dr. Abdulhameed Fouad AlKhateeb Jb. Wasim Ahmed Dr. A .K .M. Sadrul Islam Jb. Md. Shamsul Huda, FCA Jb.Ahmed Mohammed Thani Dr. Md. Shafiqur Rahman Status with the Bank Chairman Name of the related Firms/ Companies/ Institutions/ Parties etc. Representative of Ibn Sina Trust, Ibn Sina Pharmaceutical Ind. Ltd, Manarat Trust & Fouad Abdul Hameed Al-Khateeb Foundation. Representative of Al-Rajhi Co. for Industry & Trade, Riyadh, K.S.A Representative of Bangladesh Masjid Mission Maruf Foundation Representative Director Not applicable KEARI Limited & Diganta Media Corporation Limited ICB Asset Management Co. Ltd. Representative Director Not applicable Islamic Development Bank, Equity Operations, 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. M. Fariduddin Ahmed
Managing Director & Ex Officio Director
Partner - M/s. Huda Hossain & Co. Chartered Accountants & Publisher of The Daily Naya Diganta. Kuwit Awqaf Public Foundation Foreign Manager of Investment Department, Director Representative Director i) Ma Moni Hospital Pvt .Ltd. Kumarpara, Sylhet ii) Sylhet Trade Centre, Chalibander, Sylhet iii) Womens Medical College, Mirboxtola , Sylhet Not applicable
5.2
Related Party Transactions The Bank made investments to the following Firms/ Trusts/ Individuals where the Directors of the Bank are related:
SL. No. Name of the Account/ Firm/Trust, etc. Amount outstanding as on 31.12.2007 (Million Taka) 0.16 Name of the Director Relationship of the Director with the Firm/ Trust etc. Himself Purpose Classified Position UnClassified
(i)
Prof. Abu Nasser Mohammad Abduz Zaher

( Chairman)
Housing
13

(ii) (iii)
Fuad Al-Khateeb Hospital Ibn Sina Trust 31.80

( Chairman) (i) Prof. Abu Nasser Member, Board of Directors Member & Guarantor Member HPSM (Project) Purchase of House, BMRE & Import of Machinery HPSM - do-
425.23
- do-
Mohammad Abduz Zaher

(Chairman) (ii) Dr. A.K.M.Sadrul. Islam (Director) Engr. Md. Eskander Ali Khan (Director) Janab Mominul Islam Patwary (Director)
(iv) (v) (vi)
Mrs. Shahanara Begum (Wife) Maruf Foundation Manarat Trust, Dhaka
2.55
Husband
- do-
1.92
Representative Director Convenor, Academic Committee (Guarantor) Husband
Housing
- do-
50.00

(Chairman)
Establishment of Private University Flat Purchase Service Sector (For Hospital)
- do-
(vii)
Mrs. Saida Akhter
2.67
Janab Md. Shamsul Huda, FCA (Director) (i) Prof. Abu Nasser
- do- do-
(viii) Islami Bank

Hospital
1.03
Chairman
Mohammad Abduz Zaher

(Chairman) (ii) Janab Mominul Islam Patwary (Director) (iii) Janab Md. Shamsul Huda, FCA (Director) MemberAdministration Member
14

6.0 6.1
Investment to related parties is effected as per requirement of section 27 of Bank Company Act 1991. Share issued to Directors and Executives without consideration or exercisable at discount is Nil. Other disclosures are not applicable as required by BRPD Circular No. 14 dated June 25, 2003.
Creation of Reserve and Others Statutory Reserve As per section 24 of the Bank Company Act 1991, 20% of the net profit is transferred to Statutory Reserve every year.
6.2
Share Premium Share premium arose from sale of some un-subscribed Right Share- 1996 at Market price and can be utilised as per section 57 of the Companies Act 1994.
6.3 Exchange Equalization Account This represents the amount arose from exchange gain due to de-valuation of Bangladesh Takawith foreign currencies up to 30.03.2003 and the system has been discontinued from 31.03.2003. The amount is accounted for as per instruction issued by the Central Bank (Bangladesh Bank) from time to time. 6.4 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, 2002, 2003, 2004, 2005 and 2006 as per guide line issued by Bangladesh Bank, which was reviewed by the External Auditors. This Reserve is not distributable. However, to calculate Capital Adequacy Ratio, 50% of the same is considered as a component of supplementary capital as per Bangladesh Bank BCD Circular Letter No. 12 & 18 dated April 20, 1993 & June 15, 1993 respectively and BRPD Circular No. 10 dated November 25, 2002. 6.5 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.15 dated 31.10.2005. 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. However, as per Bangladesh Bank BRPD Circular No-03 dated 12.03.2008 up to 50% of the same will have to be taken as a component of Supplementary Capital. 6.6Risk Management The risk of Islami Bank Bangladesh Limited is defined as the possibility of losses, financial or otherwise. The Risk Management of the Bank covers 6 (Six) Core Risk Areas of banking industries i.e. Investment Risk Management, Foreign Exchange Risk Management, Asset - Liability Management, Prevention of Money Laundering Establishment of Internal Control and Compliance and Information & Communication Technology Risk. The prime objective of the Risk Management is that the Bank takes well calculative Business Risk Policy for safeguarding the Banks capital, its financial resources and profitability from various risks. In this context, the Bank implemented all the guidelines of Bangladesh Bank as under: 6.6.1 Investment Risk Management Investment risk is one of the major risks faced by the Bank. This can be described as potential loss arising from the failure of counter party to perform as contractual agreement with the Bank. The failure may result from
15
unwillingness of the counter party or decline in his / her financial condition. Therefore, Banks Investment risk management activities have been designed to address all these issues. 6.6.2 Foreign Exchange Risk Management Foreign Exchange risk is defined as the potential change in earnings arising due to change in market price. 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. 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. All foreign exchange transactions are revalued at Bangladesh Bank rates at the month-end. All Nostro accounts are reconciled on monthly basis and the Management for its settlement reviews outstanding entry beyond 30 days. 6.6.3 Asset Liability Management The Asset Liability Committee (ALCO) of the Bank monitors Balance Sheet risk and liquidity risks of the Bank. The Balance Sheet risk is defined as potential change in earnings due to change in rate of profit, foreign exchange rates which are not trading nature. Asset Liability Committee (ALCO) reviews liquidity requirement of the bank, the maturity of assets and liabilities, deposit and investment pricing strategy and the liquidity contingency plan. The primary objective of the ALCO is to monitor and avert significant volatility in Net Investment Income (NII), investment value and exchange earnings. 6.6.4 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. For mitigating the risks the Bank has a designated Chief Compliance Officer at Head Office and Compliance Officers at Zonal Offices and Branches, who independently review the transactions of the accounts to verity suspicious transactions. Manuals for prevention of money laundering have been developed and Transaction profile has been introduced in the Bank. Training has been continuously given to all categories of officers and executives for developing awareness and skill for identifying suspicious activities. Internal Control and Compliance Operational loss may arise from error and fraud due to lack of internal control and compliance. Management through internal control and compliance Wing, controls operational procedure of the Bank through three Divisions, namely 1. Audit & Inspection Division 2. Compliance Division and 3. Monitoring Division. 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. The Boards Audit Committee subsequently reviews the lapses identified by Audit and Inspection Division. 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.12 dated 23-12-2002. 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. 6.6.6 Information and Communication Technology Risk Management The Bank has adequately addressed Information and Communication Technology (ICT) Risk Management. It is an in-depth exercises and continual process. The Risk Management exercise mainly included minimizing financial loss to the institution in all events such as natural disaster, technological failure, 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. All financial transactions can be tracked for future Audit purpose. The Bank uses Central Data Centre to replicate transactions in branches in case of failure. In line with the Central Bank (Bangladesh Bank) directives, the bank has re-drawn its own Information and Communication Technology (ICT) Policies for operations and Services. Under these policy guidelines, a security policy has also been worked out and implemented in the server system through Active Directory Services (ADS). It has been implemented through Password Policy, Kerberos Policy, Audit Policy, Group Policy, User Rights,
6.6.5
16
Permission Policy etc. to abide by and adhere to what is laid down in the policy. In order to secure network resources from public network, the Bank has introduced Virtual Private Network (VPN), Access Control List (ACL), IP filtering and TCP/UDP service blocking through Router and firewall devices. It has already centralized the administrative control to access the Network, mailing system and access to internet under this policy. 6.7 Credit Rating Report Credit Rating Information and Services Ltd- CRISL (a joint venture rating agency of Rating Agency Malaysia Berhad (RAM), JCR-VIS Credit Rating Company Ltd., Pakistan, Prime Commercial Bank Ltd., Pakistan and Local Corporation/ Sponsors, Bangladesh) was engaged by the Bank. The CRISL submitted its report on the financial year 2002, 2003, 2004, 2005 & 2006 and assigned A+ (Adequate Safety) for long term rating scale for 2002 & 2003, and upgraded the same to AA- (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 . Financial Institutions rated in this category are adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. 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, and upgraded the same to ST-1 (Highest Grade) for 2004, 2005 & 2006. Financial Institutions rated in this category means having highest certainty of timely payment. Short-term liquidity including internal fund generation is very strong and access to alternative sources of funds is outstanding, Safety is almost like risk free Government short-term obligations.
17

Amount in Taka as at December 31, 2007 2006
7.0 7.1 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.) (Note-7.2) Balance with Bangladesh Bank Balance with Sonali Bank Ltd Sub-Total (b) Grand Total (a + b) 12,978,670,536 1,190,643,589 14,169,314,125 17,076,455,162 21,632,997,429 475,802,299 22,108,799,728 23,518,949,591 2,877,166,672 29,974,365 2,907,141,037 1,390,177,173 19,972,690 1,410,149,863
7.2
Balance with Bangladesh Bank & its Agent Bank (Sonali Bank Ltd.) 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) 1,190,643,589 14,169,314,125 475,802,299 22,108,799,728 9,979,984,944 2,998,685,592 12,978,670,536 20,319,446,838 1,313,550,591 21,632,997,429
7.3
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. 11 & 12, both dated August 25, 2005 and as per Bangladesh Bank's Letter No. BCD (P) 744 (23)/ 5 dated January 03, 1987. With effect from October 01, 2005 CRR is 5% as per guidelines given by Bangladesh Bank and the Bank maintained CRR above the minimum requirement throughout the year. SLR of the Bank is 10% as like as other Islamic Banks as per Bangladesh Bank Letter No. BCD (P) 744 (23)/ 5 dated January 03, 1987, as against 18% of Conventional Banks and the Bank maintained SLR above the requirement throughout the year as follows:
7.3.1
Cash Reserve Requirement (CRR): 5% Required Reserve Actual Reserve held with Bangladesh Bank Surplus / (Deficit) Maintained (%) 8,086,481,500 9,979,984,944 1,893,503,444 6.17% 16,172,963,000 34,405,719,570 18,232,756,570 21.27% 2,907,141,037 11,170,628,533 6,296,851,150 20,319,446,838 14,022,595,688 16.13% 12,593,702,300 25,725,399,000 13,131,696,700 20.43% 1,410,149,863 20,795,249,137
7.3.2
Statutory Liquidity Requirement (SLR): 10% Required Reserve Actual Reserve maintained Surplus / (Deficit) Maintained (%)
7.3.3
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 327,950,000 20,000,000,000 34,405,719,570 20,000,000 3,500,000,000 25,725,399,000
18

8.0 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 (8.1) Grand Total
1,069,079,772 1,284,774,578 2,353,854,350 1,658,474,130 4,012,328,480
442,107,120 317,210,183 759,317,303 569,810,331 1,329,127,634
8.1
IBBL had a liability of Tk. 8.18 million payable to the different units of BCCI world wide as against an aggregate amount of Tk. 6.10 million is receivable from the same group as at December 31, 2007 resulting to a net payable of Tk. 2.08 million. In view of present situation of BCCI, adequate provision has been made against net payable for the same. Balance with other Banks & Financial Institutions Outside Bangladesh Foreign Currency US Dollar Great Britain Pound Saudi Riyal EURO YEN Total Amount in F.C 20,130,262.06 864,530.38 28,704.29 1,384,145.24 32,368,947.00 Exchange Rate 68.5728 136.6999 18.2758 100.8980 0.6093 2007 1,380,388,434 118,181,216 524,594 139,657,487 19,722,399 1,658,474,130 2006 450,545,420 38,621,521 550,651 74,146,372 5,946,367 569,810,331
8.2 i) ii) iii) iv) v)
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 Investments in Shares & Securities No. of Share Face Value as at Dec. 31, 2007 Taka 20,000,000 10,000,000 4,000,000 34,000,000 20,000,000,000 20,034,000,000 157,000 2,000 159,000 20,034,159,000 3,534,159,000
3,860,298,768 112,029,712 40,000,000 4,012,328,480
1,218,146,004 25,161,630 85,820,000 1,329,127,634
9.0
Value as at Dec. 31, 2007 Taka 327,950,000 10,000,000 4,000,000 341,950,000 20,000,000,000 20,341,950,000 157,000 23,603,399 23,760,399 20,365,710,399 3,557,760,399
Remarks
a) i) ii) iii) iv) v)
b)
Government Bangladesh Shipping Corporation Karmasangsthan Bank Central Depository Bangladesh Ltd. Sub total Bangladesh Government Islamic Investment Bond (Islamic Bond) Total (iv + v) Others Bangladesh Aroma Tea Ltd.* Membership of Dhaka Stock Exchange Ltd. Total Current Year Grand Total (a+b) Prior Year Grand Total
200,000 100,000 4 300,004 5 300,009 1,570 1 1,571 301,580 301,576
Quoted Un-Quoted Un-Quoted
De-listed Un - Quoted
* 9.1
100% provision has been made against probable losses in shares of 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 31.10.2005 .
19

9.2 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. In Rural Area b. In Urban Area Sub total (a+b)
3,000,000,000 17,000,000,000 365,710,399 20,365,710,399
3,500,000,000 57,760,399 3,557,760,399
10.0 10.1 i) ii) iii) iv) v)
4,347,618,288 50,722,213,358 50,722,213,358 39,128,564,591 144,920,609,595
35,435,878,082 40,705,450,096 24,813,782,433 12,619,960,518 113,575,071,129
10.2.1 i)
11,386,885,036 133,533,724,559 144,920,609,595 144,920,609,595
9,862,235,033 103,712,836,096 113,575,071,129 113,575,071,129
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 - wise Investment Bai - Murabaha Bai - Muajjal Hire Purchase under Shirkatul Melk Purchase & Negotiation Musharaka Mudaraba Bai - Salam Quard Total
10.2.2 i) ii) iii) iv) v) vi)
91,473,695,824 25,609,818,224 12,605,186,181 11,572,609,603 1,077,373,472 2,581,926,291 144,920,609,595
72,637,666,426 19,020,120,156 8,336,566,722 10,129,510,794 990,277,259 2,460,929,772 113,575,071,129
10.2.3 i) ii) iii) iv) v) vi) vii) viii)
73,833,243,020 6,545,732,919 50,201,093,362 11,039,582,245 142,447,908 50,000,000 1,153,036,503 1,955,473,638 144,920,609,595
59,465,089,319 6,921,397,383 39,399,188,620 4,846,623,887 12,951,571 50,000,000 905,616,648 1,974,203,701 113,575,071,129
20

10.3 i) ii) iii)
Group wise Classification of Investments
Investment to Directors
Investment to Chief Executive & Other Senior Executives
515,360,000 244,920,000
459,354,000 242,029,000
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 15,765.94 Million as at 31 December 2007 (Tk 10,435.96 Million in 2006)
Number of Clients Amount of Investments Classified amount thereon Measures taken for recovery
Outstanding (TK. million) Nil
21 37,413,700,000
Not Applicable
32 42,245,200,0 00 Nil Not Applicable Total (Taka in Total (Taka in Million) 916.90 880.20 1,887.90 1,737.70 1,758.50 1,507.70 1,510.70 1,458.70 1,410.60 413.30 347.00 1,140.70 1,299.50 1,624.50 1,414.50 1,530.00 1,350.10 1,019.20 2,059.70 328.90 1,393.10 742.60 1,131.10
Sl. No. 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 2,600.00 1,687.90 3,407.00 2,830.00 2,030.00 1,594.00 1,640.70 3,328.30 1,618.00 1,806.00 1,720.00 2,120.00 1,721.10 3,115.70 1,701.30 3,658.00 1,760.00 2,560.00 4,100.00 1,756.20 2,400.00 1,212.00 1,465.30 1,619.90 1,477.00 1,260.00 1,336.90
Funded 813.90 788.70 893.90 1,769.60 1,533.30 1,407.00 1,623.60 2,217.60 1,661.00 144.10 918.20 1,836.40 1,066.40 1,776.30 1,392.10 1,682.40 1,660.20 1,408.30 131.30 968.30 1,316.90 -
Non-funded 209.90 1,739.90 444.20 5.50 1.40 660.30 57.70 1,019.70 220.70 600.60 143.80 121.00 1,026.00 1,292.80 92.90 1,023.00 582.00 1,162.80 -
Million) 813.90 998.60 2633.80 2213.80 1538.80 1408.40 1623.60 2877.90 1718.70 1163.80 1138.90 2437.00 1210.20 1897.30 2418.10 2975.20 1753.10 2431.30 131.30 1550.30 2479.70
Abdul Monem Ltd Utah Group Nassa Group Abdul Monem Sugar Refinery Ltd AA Synthetic Fibers Ltd Nitol Motors Ltd R. M. Group Aman Group R. K. Spinning Mills Ltd Rahim Steel Mills Co.(Pvt) Ltd Ekhlus Spinning Mills Ltd The Delta Spinning Mills Ltd BRB Cables Industries Ltd MRS Industries Ltd S. Alam Super Edible Oil Ltd. Zaber & Zubair Fabrics Ltd. Zaber Spinning Mills Ltd. Robiul Islam M/s Farzana Oil Refineries Asia Composite Mills Ltd. Sheikh Brothers & its sister Concerns M/sYonus Plastic Ind. Ltd S. Alam Cold Rolled Steel Mills Ltd M/s H.Steel and its sister concern MSA Spinning Mills Ltd M/s Sheema Steels M/s Mosharraf & Brothers
21

Amount in Taka as at December 31, 2007 2006 Total ( Taka in Million) 1,536.50 1,519.60 1,475.20 1,509.70 1,990.30 1,896.90 1,199.00 1,433.10 821.80 42,245.20
Sl. No. 28 29 30 31 32 33 34 35 36
Name of Clients M/s Abul Khair Steel Prod. Ltd Badsha Textile Ltd Matin Spinning Mills Tania Group Youth Group Noman Group M/s Otto Spinning Mills Ltd Delta Composite Knitting Ind. Ltd. BD Group Total
Sanctioned Limit 1,510.00 1,300.00 1,390.00 1,321.20 2,354.00 2,470.40 1,270.00 1,225.00 1,106.40
Outstanding (Tk. million) NonFunded funded 27,009.50 10,404.20
Total ( Taka in Million) 37,413.70
Outstanding balances relating to borrowers from serial no. 22 to 36 have not been shown under the large investments due to increase of Capital from 10,435.96 Million to 15,765.94 Million. iv) Industry -wise Classification of Investments Category of Industry a) Garments b) Textiles c) Agro based Industry d) Other Industry Total
8,694,300,000 35,414,970,000 9,959,900,000 24,718,980,000 78,788,150,000
5,752,291,000 27,718,043,000 9,645,377,000 19,518,282,000 62,633,993,000
10.4 i) ii)
Classification of Status - wise Investments Unclassified Standard including (Staff Investment) Special Mention Account (SMA) Classified Substandard Doubtful Bad/ Loss Total Pledged Collaterals against Investments Land & Building MTDR, Securities, etc. Share Certificates Total
140,674,589,595 138,534,550,595 2,140,039,000 4,246,020,000 1,261,251,000 331,085,000 2,653,684,000 144,920,609,595
109,677,372,129 108,449,062,129 1,228,310,000 3,897,699,000 898,121,000 515,084,000 2,484,494,000 113,575,071,129
i) ii) iii)
10.5
223,457,200,000 50,913,810,000 274,371,010,000
182,460,820,000 50,882,780,000 233,343,600,000
10.6 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 140,645,796,840 4,274,812,755 144,920,609,595 110,036,294,782 3,538,776,347 113,575,071,129
22

Amount in Taka as at December 31, 2007 2006 1,457,298,290
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, partners, managing agents or in the case of private companies as members Total amount of Investments, including temporary investments, 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, including temporary investments granted during the year to the Companies or firms in which the directors of the Bank are interested as directors, partners, managing agents or, 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
1,872,234,681
509,979,000 1,872,234,681
1,034,240,000 1,457,298,290
vii) viii)
ix) x)
509,979,000 -
1,034,240,000 -
2,653,684,000 1,304,775,000 1,129,525,000 619,387,646
2,484,494,000 1,320,920,000 1,103,940,000 605,332,000
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) 3,575,335,496 223,600,000 3,798,935,496 3,441,654,848 133,680,648 3,575,335,496
Amount recovered against such Written Off Investment up to this year * 754,334,496 607,994,691 Amount of Investment written off against which suit has been filed to recover the 3,798,935,496 3,575,335,496 same * During the year of 2007, Tk.146,339,805/-was recoverd from Written -Off Investments , out of which a sum of Tk.83,259,576/- was waived & remaining Tk. 63,080,229/- was recovered from the clients in cash. 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 544,358,099 7,621,013,384 1,633,074,297 1,241,136,465 11,039,582,245 348,299,736 4,907,859,913 1,139,890,044 474,954,185 6,871,003,878 8,877,610,709 2,161,971,536 11,039,582,245 5,443,948,664 1,427,055,214 6,871,003,878
11.0 i) ii)
11.1
12.0 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 - A for details)
1,458,984,773 2,056,599,032 66,842,557 294,184,045 697,144,900 232,883,285 2,255,875 4,808,894,467 821,661,792 3,987,232,675
1,404,841,423 1,896,874,662 69,244,919 255,619,751 551,201,103 206,141,097 2,065,135 4,385,988,090 661,293,787 3,724,694,303
12.1
Revaluation of Land & Building
23
As per Bangladesh Bank BCD Circular Letter No. 12 & 18 dated April 20, 1993 & June 15, 1993 and BRPD Circular No.10 dated November 25, 2002, the Bank revalued its Land and Building by the professional valuers for the year 2000, 2002, 2003, 2004, 2005 & 2006 respectively which was required by the Statutory Auditors. Bank did not revalue Land & Building during the year 2007. Amount in Taka as at December 31, 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. D. Paid without Advice IB General Account (Note -13.2) Accrued Income Deferred Revenue Expenses F.C. Fund Purchased Total Classification Status of Other Assets Unclassified Doubtful Bad/ Loss Total 41,776,528 2,326,669 114,240,871 5,168,121 341,657,881 31,118,359 202,309,999 199,000 261,215,978 1,000,013,406 35,716,124 2,336,983 99,816,911 5,120,578 351,160,900 355,795,980 3,288,291,155 408,979,114 4,547,217,745
13.1 i) ii) iii)
963,139,667 10,881,835 25,991,904 1,000,013,406
4,509,254,360 13,924,876 24,038,509 4,547,217,745
13.2 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 27,229 489 27,718 Amount in Taka Amount in Taka 3,290,256,819 (1,965,664) 3,288,291,155
14.0 14.1 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- 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- Bank Deposits are as under Re-payable on Demand With a residual maturity of Re- 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 (14.1+14.2)
1,767,587,001 6,213,425,904 34,920,774,482 34,920,774,483 48,805,939,575 39,300,288,724 27,154,918 165,955,945,087
890,283,048 39,996,158,647 46,415,974,325 9,486,671,109 25,000,183,783 10,478,557,096 14,393,816 132,282,221,824
14.2 i) ii) iii) iv) v) vi)
369,341,205 369,341,205 166,325,286,292
137,181,700 137,181,700 132,419,403,524
24

14.3
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 - Investment Security Deposit - L/C (Wes) Security Deposit - Foreign L/C General Security Deposit - Back to Back L/C (Inland) Security Deposit - Bank Guarantee Security Deposit - NRD Security Deposits - FBN Security Deposit - IBP Security Deposit - Inland L/C Profit Payable Sundry Deposits Total Bills Payable Payment Order T.T. 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
553,581,000 369,341,205 780,630,000 914,865,178 163,706,868,909 166,325,286,292
127,314,000 137,181,700 515,615,000 837,017,128 130,802,275,696 132,419,403,524
15.0 i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) xvi) xvii) xviii) xix) xx) xxi) xxii)
9,452,951,785 151,708 50,670,830 162,011,755 965,216,325 347,470,089 5,958,061 9,718,114 700,595 441,493 2,541,785 6,979,010 633,070,529 1,439,501,093 17,154,339 304,085,600 23,518,712 208,808,736 155,814,505 1,367,124,633 3,479,575,682 531,686,296 19,165,151,675
5,483,250,369 151,708 1,837,792,174 62,711,155 2,400,000 278,331,402 2,645,532 12,216,431 469,493 2,541,785 16,834,721 582,507,202 1,053,631,965 34,353,255 189,023,588 18,480,000 113,225,791 92,104,931 703,639,346 3,016,081,370 513,733,688 14,016,125,906
16.0 i) ii) 17.0 i) ii) iii) iv) v) vi) vii) viii)
1,748,806,807 18,780,194 1,767,587,001 2,390,168,611 553,094,521 11,735,341,769 30,057,827,410 6,780,397,117 173,676,860 115,076,874 79,768,095 51,885,351,257
880,245,449 10,037,599 890,283,048 1,508,730,275 459,625,345 10,057,906,682 21,831,943,520 5,324,765,193 205,513,510 82,222,881 51,428,020 39,522,135,426
17.1 i) ii) iii)
170,683,375 198,512,007 145,823 369,341,205
41,627,156 21,264,425 74,290,119 137,181,700
25

18.0
Mudaraba Perpetual Bond
3,000,000,000
Islami Bank Bangladesh Limited issued Mudaraba Perpetual Bond (MPB) under the Mudaraba Principles of Islamic Shariah as per approval of Bangladesh Bank (Central Bank) as well as Securities and Exchange Commission (SEC). The MPB was listed with Dhaka Stock Exchange Ltd & Chittagong Stock Exchange Ltd and trading of the same started from 25th November 2007. 19.0 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- Balance Sheet Items (Note-19.1, 19.2 & 19.3) Current Tax (Note-19.4.1) Deferred Tax (Note-19.4.2) Provision for Other Assets Zakat Payable Dividend Payable Foreign Currency Deposit - 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 - 19.5) IB General Account (Note - 19.6) Others ( Note - 19.7) 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 (19.1 + 19.2) General Provision on Off-Balance Sheet Items Provision held as on 1st January Add. Provision made during the year Provision held as on 31st December Total Provision (19.1+19.2+19.3) 19.4 19.4.1 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 1,224,148,422 1,700,771,010 96,357,945 1,797,128,955 2,007,639,120 1,013,638,257 706,975,904 1,490,123,306 108,609,069 1,598,732,375 1,081,559,857 1,224,148,422 291,156,000 291,156,000 4,000,000,000 3,032,735,316 1,568,960,000 436,757,000 2,005,717,000 3,708,844,000 1,060,171,000 508,789,000 1,568,960,000 3,032,735,316
4,000,000,000 1,013,638,257 112,459,677 42,522,934 100,200,368 12,555,205 16,947,962 2,525,931,167 4,855,094 332,665,636 837,636,137 170,397,699 120,814,691 18,780,291 361,485 619,387,646 266,568,572 4,350 10,195,727,171
3,032,735,316 1,224,148,422 81,459,677 42,522,934 87,894,738 18,382,274 14,926,826 1,642,750,426 4,713,931 290,834,505 417,855,302 236,780,994 100,971,251 24,205,106 559,508 605,443,250 20 7,826,184,480
19.1 i) ii)
iii)
1,463,775,316 (414,270,968) (170,050,000) 823,672,652 653,622,652 1,703,127,000
1,860,883,866 (289,851,634) (190,358,000) 83,101,084 (107,256,916) 1,463,775,316
19.2 i) ii) iii)
19.3
26
19.4.2
Provision for Tax for the year ended on 31.12.2007 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, and other add backs, (if any). Income tax has not been considered on the provision made against bad & doubtful investments and Off- Balance Sheet Items during the year 2007 with positive hope based on persuasion made with the government that it will be exempted from tax. Estimated Tax on such provision and the amount involved in the Reference Applications / Appeals have been shown as Contingent Liabilities as at December 31, 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. 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. Reference Applications/ Appeals have been filed with the High Court/Supreme Court for the Accounting years 1990, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003 & 2004 on Zakat and other issues. Review of appeal filed against judgment of appellate Division of the Supreme Court for disallowance of Zakat for the years of 1990, 1995 & 1996disallowance of Zakat for the years of 1990, 1995 & 1996. Amount in Taka as at December 31, 2007 2006 Deferred Tax Liability Opening balance Add: Provision made during the year Closing balance 81,459,677 31,000,000 112,459,677 63,509,570 17,950,107 81,459,677
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 base represents the written down value of Assets with adjustment used for tax purpose. Tax rate prevailing at the Balance Sheet date is used to determine Deferred Tax. 19.5 i) ii) iii) iv) 19.6 i) ii) iii) 19.7 i) ii) iii) 20.0 20.1 20.2 Profit/ Rent/ Compensation Suspense Account Balance at the beginning of the year 605,443,250 542,826,347 Amount transferred to Suspense Account during the year 367,522,618 340,684,522 Amount recovered from Suspense Account during the year (330,814,399) (215,586,153) Amount written-off / waived during the year (22,763,823) (62,481,466) Balance at the end of the year 619,387,646 605,443,250 IB General Account (Un-reconciled Entries of Inter Branch Transactions in Bangladesh) Age Number Amount in Taka Amount in Taka Upto 3 months 121,771 111,551,499 Over 3 months but not more than 6 months 1,009 155,017,073 More than 6 months Total 122,780 266,568,572 Others Provident Fund Collection Account 660 Benevolent Fund Collection 170 20 Social Security Fund Collection 3,520 Total 4,350 20 Share Capital Authorized Capital The Authorized Capital of the Bank is Tk.5,000,000,000 divided into 5,000,000 Ordinary Shares of Tk.1,000 each. Paid up Capital th The Shareholders of the Bank in the 24 Annual General Meeting held on September 30, 2007 declared 10% Stock Dividend (Bonus Share) for the year 2006, thus Paid - up Capital of the Bank has been increased from Tk.3,456.00 million to Tk.3,801.60 million during the year 2007 ; as detailed below: 3,456,000 Ordinary Shares of Tk.1,000 each 3,456,000,000 345,600 Ordinary Shares of Tk.1,000 each issued as Bonus Share 345,600,000 Total 3,801,600,000
a)
The Paid-up Capital of the Bank was Tk. 3,801,600,000 divided into 3,801,600 Ordinary Shares of Tk.1,000 each fully subscribed by:
27

Particulars (i) Sponsors/ Promoters (ii) General Public (iii) Government of the People's Republic of Bangladesh** Sub Total (a)
No. of Shares as on 31 Dec. 2007 1,504,922 2,296,629 49 3,801,600
% to Total 39.59% 60.41% 0.00% 100.00% 1,504,922,000 2,296,629,000 49,000 3,801,600,000 1,372,552,000 2,083,403,000 45,000 3,456,000,000
** 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. b) Break up of Share holding and percentage thereof Holdings Less than 500 Shares 500 to 5,000 Shares 5,001 to 10,000 Shares 10,001 to 20,000 Shares 20,001 to 30,000 Shares 30,001 to 40,000 Shares 40,001 to 50,000 Shares 50,001 to 100,000 Shares 100,001 Shares & above Total 20.3 No. of Shareholder 26,055 385 16 11 5 4 2 2 8 26,488 Total Holdings/ No. of Shares 550,872 480,491 114,084 141,123 117,771 142,685 92,258 119,507 2,042,809 3,801,600 Percentage (%) 14.49% 12.64% 3.00% 3.71% 3.10% 3.75% 2.43% 3.14% 53.74% 100.00%
Capital (Equity) Adequacy Ratio The Capital Adequacy Ratio of the Bank has been calculated as per BRPD Circular No. 10 dated November 25, 2002 which was subsequently amended as per BRPD Circular No.03 dated May 09, 2004 & 05 dated May 14, 2007 issued by Bangladesh Bank. 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 10.00% in 2007 & 9.00% 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 - Balance Sheet Items iii) Assets Revaluation Reserves (50.00%) iv) Exchange Equalization Account v) Revaluation Reserves of Securities vi) Mudaraba Perpetual Bond (30.00% of Core Capital) Sub Total (b) Grand Total (a + b) Core Capital (as required minimum 5.00% in 2007 & 4.50% in 2006) Actual Capital (as required minimum 10.00% in 2007 & 9.00% in 2006) 250,634.48 140,971.58 14,097.16 9,219.02 6,546.92 15,765.94 1,668.78 3,801.60 1.99 3,026.50 140.41 644.43 32.00 1,572.09 9,219.02 2,005.72 291.15 1,137.98 38.41 307.95 2,765.71 6,546.92 15,765.94 6.54% 11.18% 188,115.27 110,664.24 9,959.78 7,688.36 2,747.60 10,435.96 476.18 3,456.00 1.99 2,270.33 419.61 644.43 32.00 864.00 7,688.36 1,568.96 1,140.23 38.41 2,747.60 10,435.96 6.95% 9.43%
28

21.0
Reserve Fund and Other Reserves Statutory Reserve Opening Balance Add: Addition made this year Closing balance
2,270,333,255 756,164,894 3,026,498,149
1,688,600,254 581,733,001 2,270,333,255
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. 22.0 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 (22.1) Dividend Equalization Account Revaluation Reserve of (22.2) 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. 3,000 Million: Set off made in Assets & Liabilities:
b) c) d) e) f) g)
419,618,687 (279,202,480) 140,416,207 1,989,633 644,426,081 38,405,141 2,275,960,000 32,000,000 307,950,000 3,300,730,855 3,441,147,062
464,760,097 (45,141,410) 419,618,687 1,989,633 644,426,081 38,405,141 2,280,460,000 32,000,000 2,997,280,855 3,416,899,542
22.1
2,280,460,000 (4,500,000) 2,275,960,000
1,889,560,000 409,400,000 (18,500,000) 2,280,460,000
22.2
307,950,000 307,950,000 1,594,737,316 109,404,329 1,906,587,878 3,610,729,523 3,001,100,000
1,430,182,828 248,856,278 768,215,565 2,447,254,671 -
23.0
i) ii) iii) iv)
23.1
23.2
No set off made between assets & liabilities during the year.
29

Amount in Taka Year to December 31, 2007 2006
24.0
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)
8,294,092,643 5,548,305 901,405,684 4,702,763,409 84,488,418 244,485,974 292,695,323 14,525,479,756 25,283,884 21,421,509 46,705,393 14,572,185,149
6,461,007,192 2,431,996 736,465,938 3,326,138,522 71,896,466 188,110,522 296,233,721 11,082,284,357 57,897,418 17,875,417 75,772,835 11,158,057,192
Investment Income includes Profit/ Rent Suspense of Tk. 254,480,930 realized during the year. 25.0 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 (27.01) 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 1,388,359,500 1,190,653,067 2,579,012,567 1,089,170,410 1,367,554,601 2,456,725,011 2,840,388,593 2,339,679,310 4,194,634,746 35,884,932 9,410,587,581 2,540,412,453 1,836,365,934 3,596,764,143 45,793,611 8,019,336,141
26.0
284,002,533
137,375,574
27.0 i) ii)
27.1
1,190,653,067 1,190,653,067
1,367,554,601 1,367,554,601
28.0 i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) xvi) xvii)
2,311,614 32,274,088 59,596 38,176,181 3,355,345 1,045,761 56,704,939 5,363,808 4,688,836 3,313,714 196,800 6,120,402 63,080,229 11,480,812 ,150,637 264,322,762
1,802,480 29,649,652 5,482,639 55,959,471 2,444,265 761,413 37,710,137 5,146,329 3,324,630 4,376,099 216,800 5,179,408 3,821,608 96,573,645 7,036,974 26,659,883 286,145,433
30

Amount in Taka Year to December 31, 2007 2006
28.1
Income From Dealing Securities Income from Dealing Securities Less: Loss from Dealing Securities N/A N/A
28.2
Income From Dealing Investment Income from Dealing Investments Less: Loss from Dealing Investments N/A N/A
28.3
Income from Fluctuation Income from Profit Fluctuation Less: Loss from Profit Fluctuation N/A N/A
29.0 i) ii) iii)
Rent, Taxes, Insurances, Electricity, etc. Rent, Rates and Taxes Insurance Electricity and Lighting Total Postage, Stamp, Telecommunication, etc. Postage Telegram & Telex SWIFT Charges Telephone Fax, Trunk-Call & Internet Stamps Total Stationery, Printings, Advertisements etc. 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 2,941,893 3,650,261 1,780,027 8,372,181 2,151,486 3,358,985 2,599,306 8,109,777 10,770,240 42,369,209 25,617,751 78,757,200 8,058,533 29,418,690 40,082,692 77,559,915 27,248,281 89,896 13,271,384 41,620,067 2,705,420 14,230 84,949,278 24,250,556 69,271 11,144,767 39,500,405 2,194,403 790,144 77,949,546 62,884,211 95,030,510 58,701,109 216,615,830 50,502,367 79,060,781 47,703,103 177,266,251
30.0 i) ii) iii) iv) v) vi)
31.0 i) ii) iii)
32.0
ii) iii)
32.1 i) ii) 33.0 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 40,586,930 128,166,356 168,753,286 10,270,200 179,023,486 33,953,986 101,619,379 135,573,365 8,324,354 143,897,719 Tk. 4,000/Tk. 3,200/Tk. 2,500/Tk. 2,000/-
31

34.0 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.A. & D.A. 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

Amount in Taka Year to December 31, 2007 34,783,480 1,011,435 34,160,689 3,514,833 42,921,310 12,608,584 2,301,160 19,079,067 14,011,573 2,468,718 3,701,560 4,534,935 4,683,987 5,202,310 16,625,000 1,210,079 100,200,368 22,544,639 12,131,795 3,502,699 1,543,677 4,285,706 2,462,480 371,676 1,390,414 1,037,712 54,781,082 5,526,913 3,654,535 447,054 11,090,911 261,250 13,615,358 25,271 500,520 27,692,930 22,768,000 30,000 6,000,000 2,626,766 7,887,092 509,197,568 2006 23,844,979 282,687 30,814,180 2,044,459 38,782,516 11,068,784 3,378,314 19,389,193 11,815,304 746,617 3,106,921 3,976,307 2,183,466 5,456,430 15,600,000 1,181,779 87,894,738 15,530,317 11,288,691 2,199,448 963,859 2,654,319 2,089,513 399,454 1,224,000 1,076,786 36,091,133 4,836,315 2,794,708 440,960 1,386,739 783,750 4,100,350 7,514 141,132 6,717,433 356,293,095
34.1
As on 31.12.2007 the Bank had 215 (Two hundred fifteen) Motor Vehicles (Cars 181, Jeeps 15, Pickups 14 and Microbuses 5). The Motor Vehicles are used for the Cash Carrying purpose, Development works, other important works of the Bank and some are with the Senior Executives of the Bank as per Transport Policy of the Bank. A sum of Tk.35,426,603 was incurred during the year ended on 31.12.2007 as against Tk. 31,849,285 incurred during the year 2006 as repairs and maintenance, purchase of fuel & lubricants and insurance etc. cost for the Motor Vehicles of the Bank. 35.0 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, December 864,000,000 950,400,000 621,691,043 2,436,091,043 (864,000,000) 1,572,091,043 691,200,000 864,000,000 1,555,200,000 (691,200,000) 864,000,000
32
35.1 Post Balance Sheet Events : The Board of Directors of the Bank in its 158th meeting held on 17.04.2008 recommended @ 25.00% Stock Dividend subject to approval of the shareholders in the ensuing 25th Annual General Meeting to be held on 29th August 2008. Amount in Taka Year to December 31, 2007 2006 36.0 Earning Per Share (EPS) (a) Attributable Profit for the year (b) Number of outstanding Shares Earning Per Share (EPS) (a b) 2,049,053,457 3,801,600 539.00 1,400,591,591 3,801,600 368.42
Earning Per Share has been calculated in accordance with BAS 33. Previous years figures have been adjusted due to issue of 345,600 Bonus Shares during the year 2007 against Stock Dividend of 2006. 37.0 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
2,907,141,037 14,169,314,125 4,012,328,480 20,000,000,000 41,088,783,642
1,410,149,863 22,108,799,728 1,329,127,634 3,500,000,000 28,348,077,225
38.0 Currency wise Exposures Currency wise exposures are shown at Annexure-B.
Kazi Harun-ar-Rashed Engr. Md. Eskander Ali Khan Director Director
Md. Shamsul Huda, FCA M. Fariduddin Ahmed DirectorManaging Director
33

Islami Bank Bangladesh Limited Fixed Assets Schedule As at 31 December 2007
(Ref. Note 12.0) Taka
Cost Particulars Balance as at 01.01.2007 1 A. Premises Land Building Construction/Capital Work in Process Sub total (A) B. Revaluation Total Premises (A+B) C. Furniture and Fixtures Mechanical Appliances and 1,404,841,423 1,896,874,662 69,244,919 3,370,961,004 3,370,961,004 255,619,751 551,201,103 54,143,350 165,359,420 6,030,764 225,533,534 225,533,534 40,105,044 146,996,664 5,635,050 8,433,126 14,068,176 14,068,176 1,540,750 1,052,867 1,458,984,773 2,056,599,032 66,842,557 3,582,426,362 3,582,426,362 294,184,045 697,144,900 2 Addition during the year 3 Sale / adjustment during the year 4 Total as at 31.12.2007 5 (2 + 3 - 4)
Rate of Dep. 6
Depreciation Charged upto 01.01.2007 7 Charged during the year 8 Adjustment during the year 9 Total as at 31.12.2007 10 (7+ 8 - 9)
Written down value as at 31.12.2007 11 (5 - 10)
Written down value as at 31.12.2006 12
2.50% 10.00% 20.00% & 25.00%
152,249,230 152,249,230 152,249,230 90,850,792 306,558,807
40,586,930 40,586,930 40,586,930 18,665,223 78,567,893
920,051 920,051 920,051 1,175,360 723,700
191,916,109 191,916,109 191,916,109 108,340,655 384,403,000
1,458,984,773 1,864,682,923 66,842,557 3,390,510,253 3,390,510,253 185,843,390 312,741,900
1,225,441,424 1,514,625,432 69,244,918 2,809,311,774 409,400,000 3,218,711,774 164,768,959 244,642,296
Cost of Softwares Motor Vehicles Books 206,141,097 2,065,135 32,759,188 190,740 6,017,000 232,883,285 2,255,875
20.00% 30.00%
110,156,254 1,478,704
30,734,017 199,223
5,566,170 -
135,324,101 1,677,927
97,559,184 577,948
95,984,843 586,431

Sub Total (C) Total (A to C) 1,015,027,086 4,385,988,090 220,051,636 445,585,170

8,610,617 22,678,793 1,226,468,105 4,808,894,467 509,044,557 661,293,787 128,166,356 168,753,286 7,465,230 8,385,281 629,745,683 821,661,792 596,722,422 3,987,232,675 505,982,529 3,724,694,303

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 1,352 2006 11 1,768 2007 12 2,907,141,037 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 2,877,166,672
2006 3 1,390,177,173
2007 4 18,353,031
2006 5 12,478,337
2007 6 11,014,594
2006 7 6,043,047
2007 8 605,388
2006 9 1,449,538
2006 13 1,410,149,863
11,170,628,533
20,795,249,137
2,926,978,549
1,281,239,263
23,092,892
13,465,372
48,430,823
18,671,383
183,328
174,573
14,169,314,125
22,108,799,728
2,353,854,350
759,317,303 -
1,380,388,433
450,545,420 -
118,181,217
38,621,521
139,657,487
74,146,372
20,246,993
6,497,018 -
4,012,328,480
1,329,127,634
20,365,710,399 144,920,609,595 3,557,760,399
20,365,710,399 144,920,609,595
3,557,760,399 113,575,071,129
113,575,071,129
3,987,232,675
3,724,694,303
3,987,232,675
3,724,694,303
872,486,257 186,547,688,481
4,547,217,745
25,350,216 -
89,530,404 241,819,107
58,129,940
1,278,041 189,971,739
94,267,293
11,368,488 31,800,161
1,000,013,406 191,362,349,717
4,547,217,745 150,252,820,801
148,349,487,189
4,351,070,229
1,744,263,020
6,673,359

LIABILITIES 2007 Borrowing from Bangladesh Bank, other Banks, Financial Institutions and Agents Deposits Bills Payable Other Liabilities Mudaraba Perpetual Bond Total Liabilities Net position BDT

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
163,644,316,167 1,766,104,947 10,195,727,171 3,000,000,000 178,606,148,285 7,941,540,196
130,692,103,348 610,083,048 7,826,184,480 -
795,659,706 1,482,054 797,141,760 3,553,928,469
777,369,680 227,700,000 -
70,409,119 -
27,578,977 44,800,000 72,378,977
24,760,611 24,760,611 165,211,128
23,672,325 4,200,000 27,872,325 66,394,968
22,553,688 22,553,688 9,246,473
8,396,146 3,500,000 -
164,557,699,291 1,767,587,001 10,195,727,171 3,000,000,000 179,521,013,463 11,841,336,254
131,529,120,476 890,283,048 7,826,184,480 140,245,588,004 10,007,232,797
139,128,370,876 9,221,116,313
1,005,069,680 739,193,340
70,409,119 171,409,988
11,896,146 (5,222,787)
(14,249,037)

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Howladar Yunus & Co.

Aziz Halim Khair Choudhury Chartered Accountants

AUDITORS REPORT TO THE SHAREHOLDERS OF ISLAMI BANK BANGLADESH LIMITED

Howladar Yunus & Co. Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants

Howladar Yunus & Co. Chartered Accountants

PROPERTY AND ASSETS

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

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

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

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

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

General Investments etc. Bills Purchased & Discounted

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

Howladar Yunus & Co. Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants

LIABILITIES AND CAPITAL

20.0 21.0 22.0

OFF-BALANCE SHEET ITEMS

2,447,254,671 29,673,720,306 5,203,994,972 537,477,758 37,862,447,707 37,862,447,707

M. Fariduddin Ahmed Managing Director

Howladar Yunus & Co. Chartered Accountants

29.0 30.0 31.0 32.0 33.0 34.0

Provision for diminution in value of Investments in Shares

Kazi Harun-ar-Rashed Director

Engr. Md. Eskander Ali Khan Director

Md. Shamsul Huda, FCA Director

M. Fariduddin Ahmed Managing Director

Howladar Yunus & Co. Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants

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General/ Other Reserves *

Assets Rev. Reserves

Revaluation Reserves of Securities

Retained Total Earnings

1,572,091,043 (864,000,000) 1,572,091,043

2,049,053,457 (864,000,000) 345,600,000 11,841,336,254

2007 140,416,207 644,426,081 32,000,000 38,405,141 855,247,429

2006 419,618,687 644,426,081 32,000,000 38,405,141 1,134,449,909

Kazi Harun- ar- Rashed Director

Engr. Md. Eskander Ali Khan Director

Md. Shamsul Huda, FCA Director

Howladar Yunus & Co. Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants

Kazi Harun-ar-Rashed Engr. Md. Eskander Ali Khan

Aziz Halim Khair Choudhury Chartered Accountants

Howladar Yunus & Co. Chartered Accountants

Aziz Halim Khair Choudhury Chartered Accountants

More than 5 years

2,727,246,391 3,000,000,000 10,144,442,672

1,818,164,260 17,000,000,000 40,577,770,687

18,181,642,605 20,365,710,399 144,920,609,595

23,437,927,362 3,557,760,399 113,575,071,129

112,001,501 20,721,395,671 15,983,690,564

154,776,481 175,002,346 59,725,713,774 -

3,335,997,057 8,000,107 43,562,875,202

3,987,232,675 1,000,013,406 191,362,349,717

3,724,694,303 4,547,217,745 150,252,820,801

14,969,275,766 713,700,902 10,355,409,749 10,365,985,922 15,682,976,668 300,713,896

54,887,344,476 3,568,504,510 58,455,848,987 1,269,864,787