auditors' report to the shareholders of islami bank bangladesh limited

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;

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,

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 7.0 17,076,455,162 23,518,949,591
Cash in hand (including foreign
currency)
2,907,141,037 1,410,149,863
Balance with Bangladesh Bank &
its Agent Banks
14,169,314,125 22,108,799,728
(including foreign currency)
Balance with other Banks &
8.0 4,012,328,480
Financial Institutions
1,329,127,634
In Bangladesh 2,353,854,350 759,317,303
Outside Bangladesh 1,658,474,130 569,810,331
Money at Call & Short Notice - -
Investments in Shares &
9.0 20,365,710,399
Securities
3,557,760,399
Government 20,341,950,000 3,534,000,000
Others 23,760,399 23,760,399
Investments 10.0 144,920,609,595 113,575,071,129
General Investments etc. 133,881,027,350 106,704,067,251
Bills Purchased & Discounted 11.0 11,039,582,245 6,871,003,878
Fixed Assets including
Premises,Furniture and Fixtures
12.0 3,987,232,675 3,724,694,303
Other Assets 13.0 1,000,013,406 4,547,217,745
Non - Banking Assets - -
Total Assets 191,362,349,717 150,252,820,801

Amount in Taka
as at December 31,
Note 2007 2006
LIABILITIES AND CAPITAL
Liabilities
Borrowing from other Banks, Financial
Institutions and Agents
- -
Deposits & Other Accounts 14.0 166,325,286,292 132,419,403,524
Current and Other Accounts 15.0 19,165,151,675 14,016,125,906
Bills Payable 16.0 1,767,587,001 890,283,048
Mudaraba Savings Deposits 62,403,504,533 52,118,579,669
Mudaraba Term Deposits 31,103,691,826 25,872,279,475
Bearer Certificate of Deposits - -
Other Mudaraba Deposits 17.0 51,885,351,257 39,522,135,426
Mudaraba Perpetual Bond 18.0 3,000,000,000 -
Other Liabilities 19.0 10,195,727,171 7,826,184,480
Total Liabilities 179,521,013,463 140,245,588,004
Capital/ Share-holders' Equity 11,841,336,254 10,007,232,797
Paid - up Capital 20.0 3,801,600,000 3,456,000,000
Statutory Reserve 21.0 3,026,498,149 2,270,333,255
Other Reserves 22.0 3,441,147,062 3,416,899,542
Retained Earnings including
Proposed Dividend
1,572,091,043 864,000,000
Total Liabilities & Shareholders'
Equity
191,362,349,717 150,252,820,801
OFF-BALANCE SHEET ITEMS
Contingent Liabilities
Acceptances & Endorsements
-
-
Letters of Guarantee 23.0 3,610,729,523 2,447,254,671
Irrevocable Letters of Credit
(including Back
47,223,498,987 29,673,720,306
to Back Bills)

Bills for Collection 7,397,027,013 5,203,994,972
Other Contingent Liabilities 1,040,878,744 537,477,758
Total 59,272,134,267 37,862,447,707
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 37,862,447,707
Contingent Liabilities
The accompanying notes 1 to 38 form an integral part of
these Financial Statements
Kazi Harun-ar-Rashed Engr.
Md. Eskander Ali Khan
Director Director Director
Md. Shamsul Huda, FCA M. Fariduddin Ahmed
Signed as per our annexed report of
same date
Managing Director
Howladar Yunus & Co. Aziz Halim Khair Choudhury
Chartered Accountants Chartered Accountants
Dated, Dhaka
April 27 2008

ISLAMI BANK BANGLADESH LIMITED
Profit & Loss Account For the year ended December 31, 2007
Amount in Taka
Year to December 31,
Note 2007 2006
Investment Income 24.0 14,572,185,149 11,158,057,192
Profit Paid on Deposits 25.0 (9,410,587,581) (8,019,336,141)
Net Investment Income 5,161,597,568 3,138,721,051
Income from Investments in
Shares/ Securities
26.0 284,002,533 137,375,574
Commission, Exchange &
Brokerage
27.0 2,579,012,567 2,456,725,011
Other Operating Income 28.0 264,322,762 286,145,433
Total Operating Income 8,288,935,430 6,018,967,069
Operating Expenses
Salary & Allowances 2,034,596,249 1,848,280,506
Rent, Taxes, Insurances,
Electricity, etc.
29.0 216,615,830 177,266,251
Legal Expenses 11,984,452 10,955,172
Postage, Stamp,
Telecommunication, etc.
30.0 84,949,278 77,949,546
Stationery, Printings,
Advertisements etc.
31.0 78,757,200 77,559,915
Chief Executive's Salary & Fees 2,629,717 2,940,000
Directors' Fees & Expenses 32.0 8,372,181 8,109,777
Auditors' Fees 449,350 418,000
Charges on Investment Losses - -
Depreciation and Repair of
Bank's Assets
33.0 179,023,486 143,897,719
Other Expenses 34.0 509,197,568 356,293,095
Total Operating Expenses 3,126,575,311 2,703,669,981
Profit/ (Loss) before Provision 5,162,360,119 3,315,297,088
Provision for Investments & Off-
Balance Sheet Items 19.1 ,19.2 & 19.3
1,381,535,652 401,532,084
Provision for diminution in value
-
of Investments in Shares
-
Other Provisions - 5,100,000
Total Provision 1,381,535,652 406,632,084

Total Profit/(Loss) before Taxes 3,780,824,467 2,908,665,004
Provision for Tax
Current Tax 19.4.1 1,700,771,010 1,490,123,306
Deferred Tax 19.4.2 31,000,000 17,950,107
Net Profit/ (Loss) after Tax 2,049,053,457 1,400,591,591
Retained Earnings from previous
- -
year
Add: Net Profit after Tax 2,049,053,457 1,400,591,591
Profit available for distribution 2,049,053,457 1,400,591,591
Less: Appropriation 2,049,053,457 1,400,591,591
Statutory Reserve 756,164,894 581,733,001
General Reserve (279,202,480) (45,141,410)
Retained Earnings including
Proposed Dividend
35.0 1,572,091,043 864,000,000
Earning Per Share (EPS)-
36.0 375.46 368.42
(Revised)
The accompanying notes 1 to 38 form an integral part of
these Financial Statements.
Kazi Harun-ar-Rashed Engr. Md. Eskander Ali Khan Md. Shamsul Huda, FCA M. Fariduddin Ahmed
Director Director Director Managing Director
Signed as per our annexed report of same date
Howladar Yunus & Co. Aziz Halim Khair Choudhury
Chartered Accountants Chartered Accountants
Dated, Dhaka
April 27 2008

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
Statutory
Reserve
General/ Other
Reserves *
Assets Rev.
Reserves
Revaluation
Reserves
of Securities
Retained
Earnings
1 2 3 4 5 6 7 8
9
(2+3+ 4+5+6+7+ 8)
Balance as at 01 January 2007 3,456,000,000 1,989,633 2,270,333,255 1,134,449,909 2,280,460,000 - 864,000,000 10,007,232,797
Changes in Accounting Policy: - - - - - - - -
Restated Balance
Surplus on account of
revaluation of Properties - - - - - - - -
Adjustment of revaluation on account of -
sale of Properties - - - - (4,500,000) - - (4,500,000)
Surplus/ (deficit) on account of
revaluation of Investments (HTM) - - - - - 307,950,000 - 307,950,000
Currency translation differences - - - - - - - -
Net Gains and Losses not recognized
in the Income statement - - - - - - - -
Net Profit for the period - - 756,164,894 (279,202,480) - - 1,572,091,043 2,049,053,457
Dividend: Cash / Bonus - - - - - (864,000,000) (864,000,000)
Total
Addition from Bonus Share 345,600,000 - - - - - - 345,600,000
Total Shareholders' Equity
as on 31 December, 2007
3,801,600,000 1,989,633 3,026,498,149 855,247,429 2,275,960,000 307,950,000 1,572,091,043 11,841,336,254
Issue of Mudaraba Perpetual Bond - - - - - - -
Add: General Provision on Unclassified
Investment and Off Balance Sheet Items
- - - 2,296,873,000 - 2,296,873,000
Less: 50% of Assets Revaluation
Reserves
- - - - 1,137,980,000 - - 1,137,980,000
Total Equity as at December 31, 2007 3,801,600,000 1,989,633 3,026,498,149 3,152,120,429 1,137,980,000 307,950,000 1,572,091,043 13,000,229,254
Note * General / Other Reserves 2007 2006
General Reserve 140,416,207 419,618,687
Investment Loss Offsetting Reserve 644,426,081 644,426,081
Dividend Equalization Account 32,000,000 32,000,000

Exchange Equalization Account 38,405,141 38,405,141
Total 855,247,429 1,134,449,909
Kazi Harun- ar- ashed Engr. Md. Eskander Ali Khan Md.Shamsul Huda, FCA
Director 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
Cash Flow Statement
For the year ended December 31, 2007
Amount in Taka
Note Year to December 31,
2007 2006
Cash Flows from Operating Activities
Investment Income 14,572,185,149 11,158,057,192
Profit Paid on Deposits (9,410,587,581) (8,019,336,141)
Income/ Dividend receipt from Investments in
284,002,533
Shares & Securities
137,375,574
Fees & Commission receipt in Cash 2,579,012,567 2,456,725,011
Cash Payments to Employees (2,037,225,966) (1,851,220,506)
Cash Payments to Suppliers (118,809,424) (57,107,890)
Income Taxes Paid (2,007,639,120) (1,081,559,857)
Receipts from other Operating Activities 264,322,762 286,145,433
Payments for other Operating Activities (659,768,220)
Operating Profit before changes in Operating Assets
4,125,260,920
and Liabilities
2,369,310,596
Changes in Operating Assets and Liabilities
Statutory Deposits - -
Purchase of Trading Securities - -
Investments to other Banks - -
Investments to Customers (31,345,538,466) (19,930,916,155)
Other Assets 3,547,204,339 (2,109,876,332)
Deposits from other Banks 232,159,505 116,270,191
Deposits received from Customers 33,673,723,263 24,523,715,199
Other Liabilities account of Customers -
Trading Liabilities - -
Other Liabilities 1,263,875,149 107,849,958
a. Net Cash from Operating Activities 11,496,684,710 5,076,353,457
Cash flows from Investing Activities
Proceeds from Sale of Securities - -
Payment for Purchase of Securities - (23,603,399)
Purchase / Sale of Property, Plants &
(435,791,658)
Equipments
(401,375,922)
Purchase/ Sale of Subsidiaries - -
b. Net Cash from Investing Activities (435,791,658) (424,979,321)

Cash flows from Financing Activities
Receipts from issue of Loan Capital/ Debt
3,000,000,000
Securities
-
Payment for redemption of Investments/ Capital
& Debt Securities
- -
Receipt from issuing Ordinary Share/ Bonus
Share
- -
Dividend Paid (518,400,000) -
c. Net Cash from Financing Activities 2,481,600,000 -
Net Increase / (Decrease) in Cash (a+b+c) 13,542,493,052 4,651,374,136
Add: Effects of Exchange Rate Changes on Cash &
Cash Equivalent
- -
Add: Cash & Cash Equivalents at beginning
of the year
28,348,077,225 23,696,703,089
Cash & Cash Equivalents at end of the year 37.0 41,890,570,277 28,348,077,225
The accompanying notes 1 to 38 form an integral part of these Financial
Statements
Kazi Harun-ar-Rashed Engr. Md. Eskander
Md. Shamsul Huda, FCA M. Fariduddin Ahmed
Ali Khan
Director Director Director Managing Director
Signed as per our annexed report of same date
Howladar Yunus & Co. Aziz Halim Khair Choudhury
Chartered Accountants 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 Total Total
5 years 31.12.2007 31.12.2006
1 2 3 4 5 6 7 (2 + 3 + 4 + 5 + 6) 8
ASSETS
Cash in Hand 2,907,141,037 - - - - 2,907,141,037 1,410,149,863
Balance with other Banks &
Financial Institutions
13,636,231,954 2,727,246,391 1,818,164,260 - - 18,181,642,605 23,437,927,362
Money at Call & Short Notice - - - - - - -
Investments
(in Shares & Securities)
- 3,000,000,000 17,000,000,000 - 365,710,399 20,365,710,399 3,557,760,399
Investments 3,623,015,240 10,144,442,672 40,577,770,687 50,722,213,358 39,853,167,639 144,920,609,595 113,575,071,129
Fixed Assets including Premises,
Furniture and Fixtures
- - 154,776,481 496,459,137 3,335,997,057 3,987,232,675 3,724,694,303
Other Assets 555,007,440 112,001,501 175,002,346 150,002,011 8,000,107 1,000,013,406 4,547,217,745
Non - Banking Assets - - - - - - -
Total Assets 20,721,395,671 15,983,690,564 59,725,713,774 51,368,674,506 3,562,875,202 191,362,349,717 150,252,820,801
LIABILITIES
Borrowing from Bangladesh Bank,
other Banks, Financial
- - - - - - -
Institutions and Agents
Deposits 8,316,264,315 14,969,275,766 54,887,344,476 48,816,471,527 39,335,930,208 166,325,286,292 132,419,403,524
Other Accounts - - - - - - -
Provision & Other Liabilities 2,039,145,434 713,700,902 3,568,504,510 1,835,230,892 2,039,145,433 10,195,727,171 7,826,184,480
Mudaraba Perpetual Bond - - - - 3,000,000,000 3,000,000,000 -
Total Liabilities 10,355,409,749 15,682,976,668 58,455,848,987 50,651,702,418 44,375,075,641 179,521,013,463 140,245,588,004
Net Liquidity Gap 10,365,985,922 300,713,896 1,269,864,787 716,972,088 (812,200,439) 11,841,336,254 10,007,232,797
Kazi Harun-ar-Rashed Engr. Md. Eskander Ali Khan Md. Shamsul Huda, FCA M. Fariduddin Ahmed
Director Director Director Managing Director
Signed as per our annexed report of same date
Howladar Yunus & Co. Aziz Halim Khair Choudhury
Chartered Accountants Chartered Accountants
Dated, Dhaka
April 27 2008

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 Shari’ah 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 Shari’ah principles of Mudaraba, Musharaka, Bai-Murabaha, Bai-Muajjal, Hire Purchase under Shirkatul Melk and Bai-Salam etc. 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. The Shari’ah 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 Shari’ah, the provisions of the Bank Company
Act 1991 and Bangladesh Bank’s directives.
3.0 Significant Accounting Policies
3.1 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 Shari’ah, 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 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 Securities and Exchange Rules 1987, Dhaka and Chittagong Stock Exchange’s 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
i. 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.
ii. Dividend income on shares of Joint Stock Companies is accounted for when it is received.
iii. 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 Shari’ah 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 Shari’ah
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 Shari’ah 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.

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
1 st 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 on 1 st day of March, 1986. The employees who serve at least 7 (seven) years
in IBBL, 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. Gratuity for
the employees of IBBL has been increased from 1 (one) Month’s 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 8 th 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 IBBL’s 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
Rate
i) Land Nil
ii) Building 2.50%
iii) Furniture and Fixtures 10.00%
iv) Motor Vehicles 20.00%
v) Mechanical Appliances 20.00%
vi) Computers 25.00%
vii
)
Books 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.
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 year’s figures have been re-arranged to conform current year’s presentation wherever necessary.
1.0 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. Name Status with the Bank Status with the Committee Educational Qualification
i) Janab Kazi Harun-ar- Rashed Director Chairman M. Com (Accounting)
ii) Engr. Md. Eskander Ali Khan Director Member B.Sc. Engineering (Electrical)
iii) Janab Md. Shamsul Huda, FCA Director Member 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
5.1 Name of the Directors along with all related Firms/ Companies/ Institutions/ Related Parties as at
December 31, 2007
Sl. No Name of the Directors Status with
the Bank
Name of the related Firms/ Companies/ Institutions/ Parties etc.
(i) Prof. Abu Nasser Mohammad Abduz Zaher Chairman Representative of Ibn Sina Trust, Ibn Sina Pharmaceutical Ind. Ltd, Manarat
Trust & Fouad Abdul Hameed Al-Khateeb Foundation.
(ii) Jb. Yousif Abdullah Al – Rajhi Vice –
Chairman
Representative of Al-Rajhi Co. for Industry & Trade, Riyadh, K.S.A
(iii) Moulana Zainul Abedin Vice –
Representative of Bangladesh Masjid Mission
Chairman
(iv) Jb. Mominul Islam Patwary Director Maruf Foundation
Representative Director
(v) Jb. Kazi Harun-ar- Rashed Director Not applicable
(vi) Engr. Md. Eskander Ali Khan Director KEARI Limited & Diganta Media Corporation Limited
(vii) Jb. Md. Jahangir Miah Director ICB Asset Management Co. Ltd. Representative Director
Remarks
Foreign Director
(viii) Dr. Abdulhameed Fouad Al-Khateeb Director Not applicable Foreign
Director
(ix) Jb. Wasim Ahmed Director Islamic Development Bank, Equity Operations, Representative Director Foreign Director
(x) Dr. A .K .M. Sadrul Islam Director Bangladesh Islamic Centre
Representative Director
(xi) Jb. Md. Shamsul Huda, FCA Director Partner - M/s. Huda Hossain & Co. Chartered Accountants &
Publisher of The Daily Naya Diganta.
(xii) Jb.Ahmed Mohammed Thani Director Kuwit Awqaf Public Foundation Manager of Investment Department,
Representative Director
(xiii) Dr. Md. Shafiqur Rahman Director i) Ma Moni Hospital Pvt .Ltd.
Kumarpara, Sylhet
ii) Sylhet Trade Centre,
Chalibander, Sylhet
iii) Women’s Medical College,
Mirboxtola , Sylhet
(xiv) Jb. M. Fariduddin Ahmed Managing Not applicable
Director & Ex -
Officio
Director
Foreign Director

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)
Name of the Director
(i) Prof. Abu Nasser Mohammad Abduz Zaher 0.16 Prof. Abu Nasser
Mohammad Abduz Zaher
( Chairman)
(ii) Fuad Al-Khateeb Hospital 31.80 Prof. Abu Nasser
Mohammad Abduz Zaher
( Chairman)
(iii) Ibn Sina Trust 425.23 (i) Prof. Abu Nasser
Mohammad Abduz Zaher
(Chairman)
(ii) Dr. A.K.M.Sadrul. Islam
(Director)
(iv) Mrs. Shahanara Begum (Wife) 2.55 Engr. Md. Eskander Ali Khan
(Director)
Relationship of
the Director
with the Firm/
Trust etc.
Purpose
Classified Position
Himself Housing Un-Classified
Member, Board
of Directors
Member &
Guarantor
Member
HPSM (Project)
Purchase of House, BMRE &
Import of Machinery
- do-
- do-
Husband HPSM - do-
(v) Maruf Foundation 1.92 Janab Mominul Islam Patwary
(Director)
Representative
Director
Housing
- do-
(vi) Manarat Trust, Dhaka 50.00 Prof. Abu Nasser
Mohammad Abduz Zaher
(Chairman)
Convenor,
Academic
Committee
(Guarantor)
Establish- ment of Private
University
- do-
(vii) Mrs. Saida Akhter 2.67 Janab Md. Shamsul Huda, FCA
(Director)
Husband Flat Purchase
- do-
(viii) Islami Bank Hospital 1.03 (i) Prof. Abu Nasser
Mohammad Abduz Zaher
(Chairman)
Chairman
Service Sector (For Hospital)
- do-
(ii) Janab Mominul Islam
Patwary (Director)
Member-
Administration
(iii) Janab Md. Shamsul Huda,
FCA (Director)
Member

♦ 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.
6.0 Creation of Reserve and Others
6.1 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 Taka with 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.
6.6 Risk 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 Bank’s 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 unwillingness of the counter party or decline in his / her financial condition. Therefore, Bank’s
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.
6.6.5 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 Board’s 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, 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.
Amount in Taka
as at December 31,
2007 2006
7.0 Cash
7.1 Cash in hand
i) In Local Currency 2,877,166,672 1,390,177,173
ii) In Foreign Currency 29,974,365 19,972,690
Sub-Total (a) 2,907,141,037 1,410,149,863
Balance with Bangladesh Bank & its Agent Bank (Sonali Bank Ltd.) (Note-7.2)
Balance with Bangladesh Bank 12,978,670,536 21,632,997,429
Balance with Sonali Bank Ltd 1,190,643,589 475,802,299
Sub-Total (b) 14,169,314,125 22,108,799,728
Grand Total (a + b) 17,076,455,162 23,518,949,591
7.2 Balance with Bangladesh Bank & its Agent Bank (Sonali Bank Ltd.)
Balance with Bangladesh Bank
In Local Currency 9,979,984,944 20,319,446,838
In Foreign Currency 2,998,685,592 1,313,550,591
Sub-Total (a) 12,978,670,536 21,632,997,429

Balance with Sonali Bank Ltd
In Local Currency (b) 1,190,643,589 475,802,299
Grand Total (a+b) 14,169,314,125 22,108,799,728
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 8,086,481,500 6,296,851,150
Actual Reserve held with Bangladesh Bank 9,979,984,944 20,319,446,838
Surplus / (Deficit) 1,893,503,444 14,022,595,688
Maintained (%) 6.17% 16.13%
7.3.2 Statutory Liquidity Requirement (SLR): 10%
Required Reserve 16,172,963,000 12,593,702,300
Actual Reserve maintained 34,405,719,570 25,725,399,000
Surplus / (Deficit) 18,232,756,570 13,131,696,700
Maintained (%) 21.27% 20.43%
7.3.3 Components of Statutory Liquidity Requirement (SLR)
Cash in hand including Foreign Currency 2,907,141,037 1,410,149,863
Balance with Bangladesh Bank & its Agent Bank 11,170,628,533 20,795,249,137
Unencumbered approved Securities :
Investment in Shares of Bangladesh Shipping Corporation 327,950,000 20,000,000
Bangladesh Government Islamic Investment Bond 20,000,000,000 3,500,000,000
Total 34,405,719,570 25,725,399,000

Amount in Taka
as at December 31,
2007 2006
8.0 Balance with other Banks & Financial Institutions
In Bangladesh
i) In Current Account 1,069,079,772 442,107,120
ii) In Mudaraba Savings & MTDR Account with
Other Islamic Banks / Financial Institutions 1,284,774,578 317,210,183
Sub Total 2,353,854,350 759,317,303
Outside Bangladesh Note (8.1) 1,658,474,130 569,810,331
Grand Total 4,012,328,480 1,329,127,634
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.
8.1 Balance with other Banks & Financial Institutions Outside Bangladesh
Foreign Currency Amount in F.C Exchange Rate 2007 2006
US Dollar 20,130,262.06 68.5728 1,380,388,434 450,545,420
Great Britain Pound 864,530.38 136.6999 118,181,216 38,621,521
Saudi Riyal 28,704.29 18.2758 524,594 550,651
EURO 1,384,145.24 100.8980 139,657,487 74,146,372
YEN 32,368,947.00 0.6093 19,722,399 5,946,367
Total 1,658,474,130 569,810,331
8.2 Maturity - wise Classification
i) Repayable on Demand 3,860,298,768 1,218,146,004
With a residual maturity of
ii) Not more than 3 months 112,029,712 25,161,630
iii) Over 3 months but not more than 1 year 40,000,000 85,820,000
iv) Over 1 year but not more than 5 years
v) More than 5 years - -
Total 4,012,328,480 1,329,127,634
9.0 Investments in Shares & Securities

No. of Face Value as Value as Remarks
Share at Dec. 31, 2007 at Dec. 31, 2007
a) Government Taka Taka
i) Bangladesh Shipping Corporation 200,000 20,000,000 327,950,000 Quoted
ii) Karmasangsthan Bank 100,000 10,000,000 10,000,000 Un-Quoted
iii) Central Depository Bangladesh Ltd. 4 4,000,000 4,000,000 Un-Quoted
iv) Sub total 300,004 34,000,000 341,950,000
v) Bangladesh Government Islamic
Investment Bond (Islamic Bond) 5 20,000,000,000 20,000,000,000
Total (iv + v) 300,009 20,034,000,000 20,341,950,000
b) Others
Bangladesh Aroma Tea Ltd.* 1,570 157,000 157,000 De-listed
Membership of Dhaka Stock
Exchange Ltd. 1 2,000 23,603,399 Un - Quoted
Total 1,571 159,000 23,760,399
Current Year Grand Total (a+b) 301,580 20,034,159,000 20,365,710,399
Prior Year Grand Total 301,576 3,534,159,000 3,557,760,399
* 100% provision has been made against probable losses in shares of Bangladesh Aroma Tea Ltd.
9.1 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 .
Amount in Taka
as at December 31,
2007 2006
9.2 Maturity Grouping of Investments in Shares & Securities
i) Repayable on Demand - -
With a residual maturity of
ii) Not more than 3 months 3,000,000,000 -
iii) Over 3 months but not more than 1 year 17,000,000,000 3,500,000,000
iv) Over 1 year but not more than 5 years - -
v) More than 5 years 365,710,399 57,760,399
Total 20,365,710,399 3,557,760,399
10.0 Investments

10.1 Maturity-wise Classification
i) Repayable on Demand - -
With a residual maturity of
ii) Not more than 3 months 4,347,618,288 35,435,878,082
iii) Over 3 months but not more than 1 year 50,722,213,358 40,705,450,096
iv) Over 1 year but not more than 5 years 50,722,213,358 24,813,782,433
v) More than 5 years 39,128,564,591 12,619,960,518
Total 144,920,609,595
10.2.1 Country-wise Classification of Investments
113,575,071,129
i) Within Bangladesh
Geographical Location wise classification of Investments
a. In Rural Area 11,386,885,036 9,862,235,033
b. In Urban Area 133,533,724,559
103,712,836,096
Sub total (a+b) 144,920,609,595
113,575,071,129
ii) Outside Bangladesh - -
Total (i + ii) 144,920,609,595
113,575,071,129
10.2.2 Division wise Classification of Investments
Name of the Division
i) Dhaka Division 91,473,695,824 72,637,666,426
ii) Chittagong Division 25,609,818,224 19,020,120,156
iii) Khulna Division 12,605,186,181 8,336,566,722
iv) Rajshahi Division 11,572,609,603 10,129,510,794
v) Barisal Division 1,077,373,472 990,277,259
vi) Sylhet Division 2,581,926,291 2,460,929,772
Total 144,920,609,595 113,575,071,129
10.2.3 Mode - wise Investment
i) Bai - Murabaha 73,833,243,020 59,465,089,319
ii) Bai - Muajjal 6,545,732,919 6,921,397,383
iii) Hire Purchase under Shirkatul Melk 50,201,093,362 39,399,188,620
iv) Purchase & Negotiation 11,039,582,245 4,846,623,887
v) Musharaka 142,447,908 12,951,571
vi) Mudaraba 50,000,000 50,000,000
vii) Bai - Salam 1,153,036,503 905,616,648
viii) Quard 1,955,473,638 1,974,203,701
Total 144,920,609,595 113,575,071,129

Amount in Taka
as at December 31,
2007 2006
10.3
i)
ii)
iii)
Group wise Classification of
Investments
Investment to
Directors
Investment to Chief Executive & Other
Senior Executives
Details of Large
Investments
515,360,000 515,360,000 459,354,000
244,920,000 244,920,000 242,029,000
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
21 21 32
37,413,700,000
37,413,700,000
42,245,200,000
Nil Nil Nil
Not Applicable Not Applicable Not Applicable
Sl.
No.
Name of Clients
Sanction
ed Limit
Outstanding (TK. million)
Funded
Non-funded
Total (Taka in
Million)
Total (Taka in
Million)
Total
(Taka in
Million)
1 Abdul Monem Ltd
2,600.00
813.90 813.90
-
813.90 916.90
2 Utah Group
1,687.90
788.70 788.70
209.90
998.60 880.20
3 Nassa Group
3,407.00
893.90 893.90
1,739.90
2633.80 1,887.90
4 Abdul Monem 1,769.60 1,769.60 2213.80 1,737.70

Sugar Refinery Ltd 2,830.00 444.20
5
AA Synthetic Fibers
1,533.30 1,533.30
Ltd 2,030.00
5.50
6 Nitol Motors Ltd
1,594.00
1,407.00 1,407.00
1.40
7 R. M. Group
1,640.70
1,623.60 1,623.60
-
8 Aman Group
3,328.30
2,217.60 2,217.60
660.30
9
R. K. Spinning
1,661.00 1,661.00
Mills Ltd 1,618.00
57.70
10
Rahim Steel Mills
144.10 144.10
Co.(Pvt) Ltd 1,806.00
1,019.70
11
Ekhlus Spinning
918.20 918.20
Mills Ltd 1,720.00
220.70
12
The Delta Spinning
1,836.40 1,836.40
Mills Ltd 2,120.00
600.60
13
BRB Cables
1,066.40 1,066.40
Industries Ltd 1,721.10
143.80
14 MRS Industries Ltd 1,776.30 1,776.30
3,115.70 121.00
15
S. Alam Super
1,392.10 1,392.10
Edible Oil Ltd. 1,701.30
1,026.00
16
Zaber & Zubair
1,682.40 1,682.40
Fabrics Ltd. 3,658.00
1,292.80
17
Zaber Spinning
1,660.20 1,660.20
Mills Ltd. 1,760.00
92.90
18 Robiul Islam
2,560.00
1,408.30 1,408.30
1,023.00
19
M/s Farzana Oil
131.30 131.30
Refineries 4,100.00
-
20
Asia Composite
968.30 968.30
Mills Ltd. 1,756.20
582.00
1538.80 1,758.50
1408.40 1,507.70
1623.60 1,510.70
2877.90 1,458.70
1718.70 1,410.60
1163.80 413.30
1138.90 347.00
2437.00 1,140.70
1210.20 1,299.50
1897.30 1,624.50
2418.10 1,414.50
2975.20 -
1753.10 -
2431.30 -
131.30 1,530.00
1550.30 -
21
Sheikh Brothers &
its sister
Concerns
2,400.00
1,316.90 1,316.90
1,162.80
2479.70 1,350.10
22
23
M/sYonus Plastic
Ind. Ltd 1,212.00
S. Alam Cold
Rolled Steel Mills 1,465.30
- -
- -
-
1,019.20
- 2,059.70

Ltd
24
M/s H.Steel and its
sister concern 1,619.90 328.90
25
MSA Spinning
- -
Mills Ltd 1,477.00
- 1,393.10
26 M/s Sheema Steels 1,260.00
- -
- 742.60
27
M/s Mosharraf &
- -
Brothers 1,336.90
- 1,131.10
Amount in Taka
as at December 31,
2007 2006
Sl.
No.
Name of Clients
Outstanding (Tk. million) Total ( Taka in Total (Taka in
Total ( Taka
in
Sanction
ed Limit Funded Funded Non-funded Million) Million)
28
M/s Abul Khair
Steel Prod. Ltd 1,510.00
- -
29 Badsha Textile Ltd 1,300.00
- -
- - 1,536.50
- - 1,519.60
30
Matin Spinning
- -
Mills 1,390.00
- - 1,475.20
31 Tania Group
1,321.20
- -
- - 1,509.70
32 Youth Group
2,354.00
- -
- - 1,990.30
33 Noman Group
2,470.40
- -
- - 1,896.90
34
M/s Otto Spinning
- -
Mills Ltd 1,270.00
- - 1,199.00
35
Delta Composite
- -
Knitting Ind. Ltd. 1,225.00
- - 1,433.10
36 BD Group
1,106.40
- -
- - 821.80
Total 27,009.50 27,009.50 10,404.20 10,404.20 37,413.70 37,413.70 42,245.20
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 8,694,300,000 8,694,300,000 5,752,291,000
b) Textiles 35,414,970,000 35,414,970,000 27,718,043,000
c) Agro based
Industry
9,959,900,000 9,959,900,000 9,645,377,000
d) Other Industry 24,718,980,000 24,718,980,000 19,518,282,000
Total 78,788,150,000 78,788,150,000 62,633,993,000
10.4
i)
ii)
Classification of Status - wise
Investments
Unclassified 140,674,589,595 140,674,589,595 109,677,372,129
Standard including
(Staff Investment)
Special Mention
Account (SMA)
138,534,550,595 138,534,550,595 108,449,062,129
2,140,039,000 2,140,039,000 1,228,310,000
Classified 4,246,020,000 4,246,020,000 3,897,699,000
i) Substandard 1,261,251,000 1,261,251,000 898,121,000
ii) Doubtful 331,085,000 331,085,000 515,084,000
iii) Bad/ Loss 2,653,684,000 2,653,684,000 2,484,494,000
Total 144,920,609,595 144,920,609,595 113,575,071,129
10.5
Pledged Collaterals against
Investments
Land & Building 223,457,200,000 223,457,200,000 182,460,820,000
MTDR, Securities,
50,913,810,000 50,913,810,000
etc.
50,882,780,000
Share Certificates -
- -
Total 274,371,010,000 274,371,010,000 233,343,600,000

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
140,645,796,840 140,645,796,840 110,036,294,782
- -
4,274,812,755 4,274,812,755 3,538,776,347
-
- -
Total 144,920,609,595 144,920,609,595
-
113,575,071,129

Amount in Taka
as at December 31,
2007 2006
v)
vi)
vii)
viii)
ix)
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
1,872,234,681
509,979,000
1,872,234,681
509,979,000
-
1,457,298,290
1,034,240,000
1,457,298,290
1,034,240,000
-
x) 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
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)
Particulars of Written Off
Investments
a)
Cumulative amount of Investment Written Off 3,575,335,496
since inception to 31st December last year
3,441,654,848

)
c)
Amount of Investment Written Off
during this year
Total amount Written
Off (a + b)
223,600,000
3,798,935,496
Amount recovered against such Written Off
d)
754,334,496
Investment up to this year *
e)
Amount of Investment written off against which 3,798,935,496
suit has been filed to recover the same
133,680,648
3,575,335,496
607,994,691
3,575,335,496
* 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.
11.0 Bills Purchased
i) Payable in Bangladesh 8,877,610,709 5,443,948,664
Payable outside
ii)
2,161,971,536 1,427,055,214
Bangladesh
Total 11,039,582,245 6,871,003,878
11.1
Maturity-wise Classification of Bills
Purchased
Payable within 1
month
544,358,099 348,299,736
Over 1 month but less than 3 months 7,621,013,384 4,907,859,913
Over 3 months but less than 6
months
1,633,074,297 1,139,890,044
6 months or more 1,241,136,465 474,954,185
Total 11,039,582,245 6,871,003,878
12.0 Fixed Assets including Premises
Cost / Revaluation
i) Land 1,458,984,773 1,404,841,423
ii) Building 2,056,599,032 1,896,874,662
iii)
Construction/ Capital Work-inprocess
66,842,557 69,244,919
iv) Furniture and Fixtures 294,184,045 255,619,751
v)
Mechanical Appliances and Cost of
697,144,900 551,201,103
Software
vi) Motor Vehicles 232,883,285 206,141,097
vii) Books 2,255,875 2,065,135
Total Cost /
Revaluation
4,808,894,467 4,385,988,090

Less: Accumulated
Depreciation
Net book value at the end of the year (See
Annexure - A for details)
821,661,792 661,293,787
3,987,232,675 3,724,694,303
12.1
Revaluation of Land &
Building
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 Other Assets
Stock of Stationery in
i)
Hand
41,776,528 35,716,124
ii) Stamps in Hand 2,326,669 2,336,983
iii) Advance Rent Paid 114,240,871 99,816,911
Security Deposits Paid
iv)
Account
5,168,121 5,120,578
Suspense Account (Advance against
v)
Expenses)
341,657,881 351,160,900
vi)
D. D. Paid without
Advice
31,118,359 355,795,980
vii)
IB General Account
(Note -13.2)
- 3,288,291,155
viii) Accrued Income 202,309,999 -
ix)
Deferred Revenue
Expenses
199,000 -
x) F.C. Fund Purchased 261,215,978 408,979,114
Total 1,000,013,406 4,547,217,745
13.1 Classification Status of Other Assets
i) Unclassified 963,139,667 4,509,254,360
ii) Doubtful 10,881,835 13,924,876
iii) Bad/ Loss 25,991,904 24,038,509
Total 1,000,013,406 4,547,217,745

13.2 IB General Account (Un-reconciled Entries of Inter Branch Transactions in Bangladesh)
i)
ii)
iii)
Age Number Amount in Taka Amount in Taka
Upto 3
months 27,229
- 3,290,256,819
Over 3 months but not more than 6
months 489
- (1,965,664)
More than 6 months
Total
-
27,718
- -
- 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 165,955,945,087
1,767,587,001 890,283,048
6,213,425,904 39,996,158,647
34,920,774,482 46,415,974,325
34,920,774,483 9,486,671,109
48,805,939,575 25,000,183,783
39,300,288,724 10,478,557,096
27,154,918 14,393,816
132,282,221,824
14.2
Maturity Grouping of Inter- Bank
Deposits
are as under
i) Re-payable on - -

ii)
iii)
iv)
v)
vi)
Demand
With a residual
maturity of
Re- payable within 1
month
369,341,205 137,181,700
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 369,341,205 137,181,700
Total (14.1+14.2) 166,325,286,292
132,419,403,524
14.3
15.0
Amount in Taka
as at December 31,
2007 2006
Sector Wise beak up of Deposits and Other
Accounts
Government 553,581,000 127,314,000
Deposit Money Bank 369,341,205 137,181,700
Other Public 780,630,000 515,615,000
Foreign Currency 914,865,178 837,017,128
Private 163,706,868,909
Total 166,325,286,292
Current & Other
Accounts
130,802,275,696
132,419,403,524
i)
ii)
iii)
Al Wadeeah Current
Deposits
Convertible Taka
Account
Non Resident Investors Taka
Account
9,452,951,785 5,483,250,369
151,708 151,708
50,670,830 1,837,792,174

iv)
Non Resident Dollar
Account
162,011,755 62,711,155
v)
Non Resident Taka
Account
965,216,325 2,400,000
vi)
Foreign Currency Account (US
Dollar)
347,470,089 278,331,402
vii)
Foreign Currency Account (GB
Pound Sterling)
5,958,061 2,645,532
viii)
Foreign Currency
Account (EURO)
9,718,114 12,216,431
ix)
Foreign Currency
Account (Riyal)
700,595 -
x)
Private Foreign
Currency Account
441,493 469,493
xi)
Property Development
Account
2,541,785 2,541,785
xii)
Security Deposit -
Investment
6,979,010 16,834,721
xiii)
Security Deposit - L/C
(Wes)
633,070,529 582,507,202
xiv)
Security Deposit - Foreign L/C
General
1,439,501,093 1,053,631,965
xv)
Security Deposit - Back to Back L/C
(Inland)
17,154,339 34,353,255
xvi)
Security Deposit -
Bank Guarantee
304,085,600 189,023,588
xvii)
Security Deposit -
NRD
23,518,712 18,480,000
xviii)
Security Deposits -
FBN
208,808,736 113,225,791
xix) Security Deposit - IBP 155,814,505 92,104,931
xx)
Security Deposit -
Inland L/C
1,367,124,633 703,639,346
xxi) Profit Payable 3,479,575,682 3,016,081,370
xxii) Sundry Deposits 531,686,296 513,733,688
Total 19,165,151,675 14,016,125,906
16.0 Bills Payable
i) Payment Order 1,748,806,807 880,245,449
ii) T.T. Payable 18,780,194 10,037,599
Total 1,767,587,001 890,283,048

17.0
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
17.1
i)
ii)
iii)
Other Mudaraba
Deposits
Mudaraba Special
Notice Deposits
2,390,168,611 1,508,730,275
Mudaraba Hajj
Deposits
553,094,521 459,625,345
Mudaraba Savings
Bond
11,735,341,769 10,057,906,682
Mudaraba Special Savings (Pension)
Deposits
30,057,827,410 21,831,943,520
Mudaraba Monthly Profit Deposit
Scheme
6,780,397,117 5,324,765,193
Mudaraba Foreign Currency
Deposits
173,676,860 205,513,510
Mudaraba Muhor
Savings
115,076,874 82,222,881
Mudaraba Waqf Cash
Deposit
79,768,095 51,428,020
Total 51,885,351,257 39,522,135,426
Other Banks' Deposits
with us
Al Wadeeah Current
Deposits
170,683,375 41,627,156
Mudaraba Special
Notice Deposits
198,512,007 21,264,425
Mudaraba Savings
Account
145,823 74,290,119
Total 369,341,205 137,181,700
18.0
Mudaraba Perpetual
Bond
Amount in Taka
as at December 31,
2007 2006
3,000,000,000
-

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). 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 Other Liabilities
i)
Provision for Classified & Unclassified Investments
and Off- Balance Sheet
4,000,000,000 3,032,735,316
Items (Note-19.1, 19.2 & 19.3)
ii)
Current Tax (Note-
19.4.1)
1,013,638,257 1,224,148,422
iii)
Deferred Tax (Note-
19.4.2)
112,459,677 81,459,677
iv)
Provision for Other
Assets
42,522,934 42,522,934
v) Zakat Payable 100,200,368 87,894,738
vi) Dividend Payable 12,555,205 18,382,274
vii)
Foreign Currency Deposit - L/C
Cover A/C
16,947,962 14,926,826
viii)
Foreign Currency Held against Back
to Back L/C
2,525,931,167 1,642,750,426
ix)
Foreign
Correspondents
4,855,094 4,713,931
Charges
x)
Incentive Bonus
Payable
332,665,636 290,834,505
xi) Valuation Adjustments 837,636,137 417,855,302
xii)
Foreign Currency
Fund Held
170,397,699 236,780,994
xiii)
Payable against
Expenditure
120,814,691 100,971,251
xiv) Clearing Adjustment 18,780,291 24,205,106
xv) Transfer Delivery 361,485 559,508
xvi)
Profit/ Rent Compensation Suspense Account (Note
- 19.5)
619,387,646 605,443,250
xvii)
IB General Account
(Note - 19.6)
266,568,572 -
xviii) Others ( Note - 19.7) 4,350 20
Total 10,195,727,171 7,826,184,480
19.1 Provision for Classified Investments

i)
Provision held at the beginning of
the year
1,463,775,316 1,860,883,866
ii)
Fully provided Investment written
off/ transferred
(414,270,968) (289,851,634)
Provision against recoveries of
Classified Investment
(170,050,000) (190,358,000)
Provision made during
the year
823,672,652 83,101,084
iii) Net charge to Profit & Loss Account 653,622,652 (107,256,916)
Total Provision held at the end of the
year
1,703,127,000 1,463,775,316
19.2
i)
ii)
iii)
19.3
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
1,568,960,000 1,060,171,000
436,757,000 508,789,000
2,005,717,000 1,568,960,000
3,708,844,000 3,032,735,316
Provision held as on
-
1st January
-
Add. Provision made during the year 291,156,000 -
Provision held as on 31st December 291,156,000 -
Total Provision
(19.1+19.2+19.3)
4,000,000,000 3,032,735,316
19.4 Provision for Taxation
19.4.1 Current Tax
Opening balance 1,224,148,422 706,975,904
Add: (i) Provision made on business 1,700,771,010 1,490,123,306

income
(ii) Provision made on other
income
96,357,945 108,609,069
1,797,128,955 1,598,732,375
Less: Tax Paid during the year 2,007,639,120 1,081,559,857
Closing balance 1,013,638,257 1,224,148,422
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
19.4.2 Deferred Tax Liability
Opening balance 81,459,677 63,509,570
Add: Provision made during the
31,000,000 17,950,107
year
Closing balance 112,459,677 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
Profit/ Rent/ Compensation Suspense
Account

i) Balance at the beginning of the year 605,443,250 542,826,347
ii)
Amount transferred to Suspense Account during the
year
367,522,618 340,684,522
iii)
Amount recovered from Suspense Account during
the year
(330,814,399) (215,586,153)
iv)
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
19.6 IB General Account (Un-reconciled Entries of Inter Branch Transactions in Bangladesh)
i)
ii)
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 -
iii) More than 6 months
Total
19.7 Others
-
122,780
- -
266,568,572 -
i)
ii)
iii)
Provident Fund
Collection Account
660 -
Benevolent Fund
Collection
170 20
Social Security Fund
Collection
3,520 -
Total 4,350 20
20.0 Share Capital
20.1 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.
20.2 Paid up Capital
The Shareholders of the Bank in the 24 th 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

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:
Amount in Taka
as at December 31,
2007 2006
Particulars
No. of
Shares as on % to Total
31 Dec. 2007
(i) Sponsors/
1,504,922 39.59%
Promoters
1,504,922,000 1,372,552,000
(ii) General Public 2,296,629 60.41% 2,296,629,000 2,083,403,000
(iii) Government of the
People's
Republic of
49 0.00%
Bangladesh**
49,000 45,000
Sub Total (a) 3,801,600 100.00% 3,801,600,000 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
No.
Total Holdings/
of
Percentage
Holdings
(
No. of Shares
Shareholder
% )
Less than 500 Shares 26,055 550,872 14.49%
500 to 5,000 Shares 385 480,491 12.64%
5,001 to 10,000 Shares 16 114,084 3.00%
10,001 to 20,000
11
Shares
141,123 3.71%
20,001 to 30,000 5 117,771 3.10%

20.3
Shares
30,001 to 40,000
4
Shares
142,685 3.75%
40,001 to 50,000
2
Shares
92,258 2.43%
50,001 to 100,000
2
Shares
119,507 3.14%
100,001 Shares &
8
above
2,042,809 53.74%
Total 26,488 3,801,600 100.00%
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
(in Million Taka)
Taka)
Total Assets including Off-Balance
Sheet Items
250,634.48 188,115.27
Total Risk Weighted
Assets
140,971.58 110,664.24
Required Equity (based on total Risk Weighted
Assets 10.00% in 2007 & 9.00% in 2006)
14,097.16 9,959.78
Actual Equity
i ) Core Capital 9,219.02 7,688.36
ii) Supplementary
Capital
6,546.92 2,747.60
Total Equity (i + ii) 15,765.94 10,435.96
Surplus Equity 1,668.78 476.18
A) Core Capital
i) Paid Up Capital 3,801.60 3,456.00
ii) Share Premium 1.99 1.99
iii) Statutory
Reserve
3,026.50 2,270.33
iv) General Reserve 140.41 419.61
v) Investment Loss Offsetting
Reserve
644.43 644.43
vi) Dividend Equalization
Account
32.00 32.00

vii) Retained Earnings including
1,572.09 864.00
proposed dividend
Sub Total (a) 9,219.02 7,688.36
B) Supplementary
Capital
i) General Provision on unclassified
Investment
2,005.72 1,568.96
ii) General Provision on Off -
Balance Sheet Items
291.15 -
iii) Assets Revaluation Reserves
(50.00%)
1,137.98 1,140.23
iv) Exchange Equalization Account 38.41 38.41
v) Revaluation Reserves of
Securities
307.95 -
vi) Mudaraba Perpetual Bond
(30.00% of Core Capital)
2,765.71 -
Sub Total (b) 6,546.92 2,747.60
Grand Total (a + b) 15,765.94 10,435.96
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)
6.54% 6.95%
11.18% 9.43%
Amount in Taka
as at December 31,
2007 2006
21.0 Reserve Fund and Other Reserves
Statutory Reserve
Opening Balance 2,270,333,255 1,688,600,254
Add: Addition made
756,164,894 581,733,001
this year
Closing balance 3,026,498,149 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 Others Reserve
a) General Reserve

Opening Balance 419,618,687 464,760,097
Add: Addition/ (Adjustment) made
this year
(279,202,480) (45,141,410)
Sub total (i) 140,416,207 419,618,687
b) Share Premium 1,989,633 1,989,633
c)
Investment Loss
Offsetting Reserve
644,426,081 644,426,081
d)
Exchange Equalization
Account
38,405,141 38,405,141
e) Assets Revaluation Reserves (22.1) 2,275,960,000 2,280,460,000
f)
Dividend Equalization
Account
32,000,000 32,000,000
g)
Revaluation Reserve
(22.2) 307,950,000
of Securities
-
Sub total (ii) 3,300,730,855 2,997,280,855
Grand Total (i + ii) 3,441,147,062 3,416,899,542
22.1
Assets Revaluation
Reserves
Opening balance 2,280,460,000 1,889,560,000
Addition during the
- 409,400,000
year
Adjustment during the
(4,500,000) (18,500,000)
year
Closing balance 2,275,960,000 2,280,460,000
22.2 Revaluation Reserve of Securities
Opening balance - -
Revaluation made
307,950,000 -
during the year
Closing balance 307,950,000 -
23.0 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 :
- -

i) Directors -
ii) Government 1,594,737,316
iii) Bank and other Financial Institutions 109,404,329
iv) Others 1,906,587,878
Total 3,610,729,523
-
1,430,182,828
248,856,278
768,215,565
2,447,254,671
23.1
Security Pledged against Mudaraba Perpetual Bond
(MPB) Liabilities of Tk. 3,000 Million:
3,001,100,000
-
23.2 Set off made in Assets & Liabilities: No set off made between assets & liabilities during the
year.
24.0 Investment Income
Amount in Taka
Year to December 31,
2007 2006
Income from General
Investment
Bai Murabaha 8,294,092,643 6,461,007,192
Musharaka 5,548,305 2,431,996
Bai Muajjal 901,405,684 736,465,938
Hire Purchase under Shirkatul Melk 4,702,763,409 3,326,138,522
Bai Salam 84,488,418 71,896,466
Foreign Bill
244,485,974 188,110,522
Negotiation
Others 292,695,323 296,233,721
Sub Total (i) 14,525,479,756 11,082,284,357
Profit on Deposits with Islamic
Banks
(a) In Bangladesh 25,283,884 57,897,418
(b) Outside
Bangladesh
21,421,509 17,875,417

Sub Total (ii) 46,705,393 75,772,835
Grand Total (i + ii) 14,572,185,149 11,158,057,192
Investment Income includes Profit/ Rent Suspense of Tk. 254,480,930 realized during the
year.
25.0 Profit paid on Deposits
i)
Profit paid on Mudaraba Savings
2,840,388,593
Deposit
2,540,412,453
ii)
Profit paid on Mudaraba Term
2,339,679,310
Deposit Account
1,836,365,934
iii)
Profit paid on other Mudaraba
4,194,634,746
Deposits
3,596,764,143
iv)
Profit paid on
-
Placement
45,793,611
v)
Profit paid on Mudaraba Perpetual
35,884,932
Bond (MPB)
-
Total 9,410,587,581 8,019,336,141
26.0
Income From Investments in Shares/
Securities
Profit/ Dividend Income from
284,002,533
Shares/ Securities
137,375,574
27.0 Commission & Exchange Income
i) Commission Income 1,388,359,500 1,089,170,410
ii)
Exchange Income
1,190,653,067
(27.01)
1,367,554,601
Total 2,579,012,567 2,456,725,011
27.1 Exchange Income
Gross Exchange gain 1,190,653,067 1,367,554,601
Less: Exchange loss - -
Net Exchange gain 1,190,653,067 1,367,554,601
28.0
Other Operating
Income
i) Rent on Locker 2,311,614 1,802,480
ii)
Telephone/ Trunk Call Charge
32,274,088
recovered
29,649,652
iii)
Telex Charge
59,596
recovered
5,482,639
iv) P&T Charge recovered 38,176,181 55,959,471
v) Legal Expenses 3,355,345 2,444,265

ecovered
vi)
E & TA Fees
1,045,761
recovered
761,413
vii)
Income from ATM &
56,704,939
SWIFT
37,710,137
viii)
Incidental Charges
5,363,808
recovered
5,146,329
ix)
Service Charges
4,688,836
recovered
3,324,630
x)
Rent on Premises
3,313,714
realised
4,376,099
xi)
Sale proceeds of
196,800
Tender Schedule
216,800
xii)
Profit on sale of Bank's
-
Premises
5,179,408
xiii)
Profit on sale of Bank's
6,120,402
Car
3,821,608
xiv)
Written-off Investment
63,080,229
Recovery
96,573,645
xv) Recruitment Fees 11,480,812 7,036,974
xvi) Others 36,150,637 26,659,883
xvii)
Profit / (loss) due to change in profit
-
rate
-
Total 264,322,762 286,145,433
28.1 Income From Dealing Securities
Income from Dealing
Securities
Less: Loss from
Dealing Securities
28.2 Income From Dealing Investment
Income from Dealing
Investments
Less: Loss from Dealing Investments
Amount in Taka
Year to December 31,
2007 2006
N/A N/A
N/A N/A
28.3
Income from
Fluctuation

Income from Profit
Fluctuation
Less: Loss from Profit
Fluctuation
N/A N/A
29.0
Rent, Taxes, Insurances, Electricity,
etc.
i) Rent, Rates and Taxes 62,884,211 50,502,367
ii) Insurance 95,030,510 79,060,781
iii)
Electricity and
58,701,109
Lighting
47,703,103
Total 216,615,830 177,266,251
30.0
Postage, Stamp, Telecommunication,
etc.
i) Postage 27,248,281 24,250,556
ii) Telegram & Telex 89,896 69,271
iii) SWIFT Charges 13,271,384 11,144,767
iv) Telephone 41,620,067 39,500,405
v)
Fax, Trunk-Call &
2,705,420
Internet
2,194,403
vi) Stamps 14,230 790,144
Total 84,949,278 77,949,546
31.0
Stationery, Printings,
Advertisements etc.
i)
Paper & Table
10,770,240
Stationery
8,058,533
ii)
Printing and Stationery (Registers
42,369,209
and Forms)
29,418,690
iii)
Advertisement &
25,617,751
Publicity
40,082,692
Total 78,757,200 77,559,915
32.0
Directors' Fees and
Expenses
i)
Directors' Fees for attending Board/
2,941,893
Executive
2,151,486
Committee/ Other Committee
meeting
ii)
TA/DA/Hotel bills for Local &
3,650,261
Foreign Directors
3,358,985
iii) Others 1,780,027

2,599,306
Total 8,372,181 8,109,777
32.1 Rate of Fees for attending Board/ Executive Committee/ Other Committee Meeting
i) For Board Meeting Tk. 4,000/- Tk. 2,500/-
For Executive Committee/ Other
ii)
Tk. 3,200/- Tk. 2,000/-
Committee Meeting
33.0
Depreciation and Repair of Bank's
Assets
i) Depreciation: Premises 40,586,930 33,953,986
ii)
Depreciation: Furniture & Fixtures and Other Fixed
128,166,356
Assets
101,619,379
Sub Total 168,753,286 135,573,365
iii)
Repair of Bank's
10,270,200
Assets
8,324,354
Total 179,023,486 143,897,719
Amount in Taka
Year to December 31,
2007 2006
34.0 Other Expenses
i) T.A. & D.A. 34,783,480 23,844,979
ii)
Repairs to Rented
1,011,435
Premises
282,687
iii)
Motor Car Running &
34,160,689
Maintenance
30,814,180
iv)
Periodicals &
3,514,833
Newspapers
2,044,459
v) Entertainment 42,921,310 38,782,516
vi) Overtime 12,608,584 11,068,784
vii)
Direct Expenses on
2,301,160
Investment
3,378,314
viii) Training Expenses 19,079,067 19,389,193
ix) Meeting Expenses 14,011,573 11,815,304
x) Bank Charges 2,468,718 746,617
xi) Uniforms 3,701,560 3,106,921
xii) Conveyance 4,534,935
3,976,307
Honorarium & Cash
xiii)
4,683,987
Award
2,183,466
xiv) Membership Fees 5,202,310 5,456,430

(Subscription)
xv) Staff Welfare 16,625,000 15,600,000
xvi)
Evening Banking
1,210,079
Allowance
1,181,779
xvii) Zakat 100,200,368 87,894,738
xviii) Computer Expenses 22,544,639 15,530,317
xix) Wages 12,131,795 11,288,691
xx) Discomfort Allowance 3,502,699 2,199,448
xxi)
Air Condition
1,543,677
Maintenance
963,859
xxii) WASA / Gas Expenses 4,285,706 2,654,319
xxiii) Washing Charges 2,462,480 2,089,513
xxiv)
Transportation
371,676
Charges
399,454
xxv) ATM Charges 1,390,414 1,224,000
xxvi) Reuters Charges 1,037,712 1,076,786
xxvii)
Business Development
54,781,082
Expenses
36,091,133
xxviii) Photocopy Expenses 5,526,913 4,836,315
xxix)
Upkeep of Office
3,654,535
Premises
2,794,708
xxx)
Clearing House
447,054
Expenses
440,960
xxxi)
Bonus Share Issue
11,090,911
Expenses
1,386,739
xxxii) Rating Expenses 261,250 783,750
xxxiii) Band Width Charges 13,615,358 4,100,350
xxxiv) Table Wares 25,271 7,514
xxxv) Other Regulatory Fees and Expenses 500,520 141,132
xxxvi) MPB Expenses 27,692,930
xxxvii)
Natural Disaster
Operation
22,768,000
xxxviii) Brokerage House 30,000
xxxix) Donation 6,000,000
xxxx) Recruitment Fees 2,626,766
-
xxxxi) Miscellaneous 7,887,092 6,717,433
Total 509,197,568 356,293,095
-
-
-
-

34.1
Motor Car Running and
Maintenance
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
864,000,000 691,200,000
on 1 January
Addition during the
year :
Proposed Dividend 950,400,000 864,000,000
Others 621,691,043
-
Total 2,436,091,043 1,555,200,000
Less: Amount transferred to Paid-up Capital (Bonus
Share)
(864,000,000) (691,200,000)
& Cash Dividend
Balance of Retained Earnings including Proposed
1,572,091,043
Dividend as at 31, December
864,000,000
35.1
36.0
Post Balance Sheet
Events :
The Board of Directors of the Bank in its 158 th meeting held on 17.04.2008 recommended @ 25.00%
Stock Dividend subject to approval of the shareholders in the ensuing 25 th Annual General Meeting to be
held on 29 th August 2008.
Earning Per Share
(EPS)-( Revised)
Amount in Taka
Year to December 31,
2007 2006

(a) Attributable Profit
for the yea( Revised)
(b) Number of
outstanding Shares
Earning Per Share
(EPS)- (Revised) (a ÷ b)
1,427,362,414 1,400,591,591
3,801,600
3,801,600
375.46 368.42
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 2,907,141,037 1,410,149,863
ii)
Balance with Bangladesh Bank and
14,169,314,125 22,108,799,728
Sonali Bank
iii)
Balance with other Banks and
4,012,328,480
Financial Institutions
1,329,127,634
iv)
Bangladesh Government Islamic Investment Bond
20,000,000,000
(Islamic Bond)
3,500,000,000
Total 41,088,783,642
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
Director
Managing Director

Annexure-A
Islami Bank Bangladesh Limited Fixed Assets Schedule As at 31 December 2007
(Ref. Note 12.0)
Taka
Particulars
Cost Rate Depreciation Written down Written down
Addition
Charged
Adjustment
Balance as at
Sale / Total as at of
Charged
Total as at value as at value as at
during
upto
01.01.2007 the year
adjustment
during the
year
31.12.2007 Dep. 01.01.2007 During
the year
During
the year
31.12.2007 31.12.2007 31.12.2006
1 2 3 4 5 (2 + 3 - 4) 6 7 8 9 10 (7+ 8 - 9) 11 (5 - 10) 12
A. Premises
Land 1,404,841,423 54,143,350 - 1,458,984,773 - -
- 1,458,984,773 1,225,441,424
-
-
Building 1,896,874,662 165,359,420 5,635,050 2,056,599,032 2.50% 152,249,23040,586,930 920,051 191,916,109 1,864,682,923 1,514,625,432
Construction/Capital Work in
69,244,919 6,030,764 8,433,126 66,842,557 - -
- 66,842,557 69,244,918
Process
-
-
Sub total (A) 3,370,961,004 225,533,534 14,068,176 3,582,426,362 - 152,249,23040,586,930 920,051 191,916,109 3,390,510,253 2,809,311,774
B. Revaluation - - - - - -
-
-
- - 409,400,000
Total Premises (A+B) 3,370,961,004 225,533,534 14,068,176 3,582,426,362 - 152,249,23040,586,930 920,051 191,916,109 3,390,510,253 3,218,711,774
C. Furniture and Fixtures 255,619,751 40,105,044 1,540,750 294,184,045 10.00% 90,850,792 18,665,223 1,175,360 108,340,655 185,843,390 164,768,959
Mechanical Appliances and 551,201,103 146,996,664 1,052,867 697,144,900 20.00% 306,558,807
78,567,893 723,700 384,403,000 312,741,900 244,642,296
&
Cost of Softwares 25.00%
Motor Vehicles 206,141,097 32,759,188 6,017,000 232,883,285 20.00% 110,156,254 30,734,017 5,566,170 135,324,101 97,559,184 95,984,843
Books 2,065,135 190,740 - 2,255,875 30.00% 1,478,704 199,223 - 1,677,927 577,948 586,431
Sub Total (C) 1,015,027,086 220,051,636 8,610,617 1,226,468,105 - 509,044,557 128,166,356 7,465,230 629,745,683 596,722,422 505,982,529
Total (A to C) 4,385,988,090 445,585,170 22,678,793 4,808,894,467 - 661,293,787 168,753,286 8,385,281 821,661,792 3,987,232,675 3,724,694,303
Kazi Harun-ar-Rashed Engr. Md. Eskander Ali Khan Md. Shamsul Huda, FCA M. Fariduddin Ahmed
Director Director Director Managing Director

Annexure-B
Islami Bank Bangladesh Limited
Currency wise Exposures
Amount in BDT
Equivalent Taka of Other
BDT Equivalent Taka of US $ Equivalent Taka of GBP Equivalent Taka of EURO
ASSETS
Currency
Total Taka
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
1 2 3 4 5 6 7 8 9 10 11 12 13
Cash in Hand 2,877,166,672 1,390,177,173 18,353,031 12,478,337 11,014,594 6,043,047 605,388 1,449,538 1,352 1,768 2,907,141,037 1,410,149,863
Balance with Bangladesh
Bank & its agent bank
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
Balance with other Banks
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
& Financial Institutions
Money at Call & Short
- -
- -
- - - - - - - -
Notice
Investments (in Shares &
- -
20,365,710,399
- - - - - - 20,365,710,399 3,557,760,399
Securities)
3,557,760,399
- -
Investments 144,920,609,595 113,575,071,129
- - - - - - 144,920,609,595 113,575,071,129
Fixed Assets including
Premises
3,987,232,675 3,724,694,303
- -
- - - - - - 3,987,232,675 3,724,694,303
Other Assets 872,486,257 4,547,217,745 25,350,216 - 89,530,404 - 1,278,041 - 11,368,488 - 1,000,013,406 4,547,217,745
- -
Non Banking Assets -
- - - - - - - -
Total Assets 186,547,688,481 148,349,487,189 4,351,070,229 1,744,263,020 241,819,107 58,129,940 189,971,739 94,267,293 31,800,161 6,673,359 191,362,349,717 150,252,820,801
LIABILITIES
Borrowing from
Bangladesh Bank, other
Banks, Financial
Institutions and Agents
Equivalent Taka of Other
BDT Equivalent Taka of US $ Equivalent Taka of GBP Equivalent Taka of EURO
Total Taka
Currency
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
- -
- -
- - - - - - - -
Deposits 163,644,316,167 130,692,103,348 795,659,706 777,369,680 70,409,119 27,578,977 24,760,611 23,672,325 22,553,688 8,396,146 164,557,699,291 131,529,120,476
Bills Payable 1,766,104,947 610,083,048 1,482,054 227,700,000 - 44,800,000 - 4,200,000 - 3,500,000 1,767,587,001 890,283,048
Other Liabilities 10,195,727,171 7,826,184,480 - - - - - - - - 10,195,727,171 7,826,184,480
Mudaraba Perpetual Bond 3,000,000,000 - - - - - - - - - 3,000,000,000 -
Total Liabilities 178,606,148,285 139,128,370,876 797,141,760 1,005,069,680 70,409,119 72,378,977 24,760,611 27,872,325 22,553,688 11,896,146 179,521,013,463 140,245,588,004
Net position 7,941,540,196 9,221,116,313 3,553,928,469 739,193,340 171,409,988 (14,249,037) 165,211,128 66,394,968 9,246,473 5,222,787) 11,841,336,254 10,007,232,797
Kazi Harun-ar-Rashed Engr. Md. Eskander Ali Khan Md. Shamsul Huda, FCA M. Fariduddin Ahmed
Director Director Director Managing Director