Islami Bank Bangladesh Limited and its Subsidiaries Consolidated Balance Sheet As at 31 December 2013

Transcription

1 Islami Bank Bangladesh Limited and its Subsidiaries Consolidated Balance Sheet As at 31 December 2013 Property and Assets Taka Taka Cash in hand 7(a) 44,291,523,619 41,774,012,643 Cash in hand (including foreign currency) 8,180,346,965 6,308,274,680 Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 36,111,176,654 35,465,737,963 Balance with other banks & financial institutions 8(a) 12,700,116,779 24,524,933,077 In Bangladesh 7,950,737,265 17,432,561,802 Outside Bangladesh 4,749,379,514 7,092,371,275 Placement with banks & other financial institutions - - Investments in shares & securities 9(a) 66,098,953,627 25,560,064,458 Government 63,698,877,770 23,504,977,770 Others 2,400,075,857 2,055,086,688 Investments 406,604,555, ,920,722,887 General investments etc. 10(a) 363,507,873, ,479,756,413 Bills purchased & discounted 11(a) 43,096,681,470 32,440,966,474 Fixed assets including premises 12(a) 15,738,858,683 14,816,765,447 Other assets 13(a) 4,545,107,670 3,068,352,711 Non - banking assets - - Total property and assets 549,979,115, ,664,851,223 Liabilities and Capital Liabilities Notes Placement from banks & other financial institutions - - Deposits & other accounts 14(a) 472,121,971, ,845,688,579 Mudaraba savings deposits 155,191,605, ,012,262,458 Mudaraba term deposits 130,523,371,328 97,278,542,378 Other mudaraba deposits 130,276,510, ,807,137,348 Al- wadeeah current and other deposit accounts 52,000,826,777 47,531,708,061 Bills payable 4,129,657,957 4,216,038,334 Mudaraba perpetual bond 3,000,000,000 3,000,000,000 Other liabilities 19(a) 30,874,281,277 21,878,972,397 Deferred tax liabilities 20(a) 194,189, ,628,851 Total liabilities 506,190,441, ,963,289,827 Capital/shareholders' equity 43,788,673,869 39,701,561,396 Paid - up capital 14,636,278,800 12,509,640,000 Statutory reserve 14,638,613,627 12,423,662,342 Other reserves 11,875,862,039 11,694,797,161 Retained earnings 38(a) 2,637,858,071 3,073,402,299 Non-controlling interest 38(b) 61,332 59,594 Total liabilities & shareholders' equity 549,979,115, ,664,851,223 4

2 Islami Bank Bangladesh Limited and its Subsidiaries Consolidated Balance Sheet As at 31 December 2013 Off-balance Sheet Items Notes Taka Taka Contingent liabilities Acceptances & endorsements - - Letters of guarantee 7,354,594,651 7,297,485,550 Irrevocable letters of credit (including back to back bills) 83,946,725,635 87,161,261,558 Bills for collection 22,390,676,317 15,571,833,223 Other contingent liabilities 23,581,701 13,600,712 Total 113,715,578, ,044,181,043 Other commitments Documentary credits, short term and trade related transactions - - Forward assets purchased and forward deposits placed - - Undrawn note issuance, revolving and underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Total - - Total off-balance sheet items including contingent liabilities 113,715,578, ,044,181,043 The annexed notes form an integral part of these financial statements. Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain Mohammad Abdul Mannan Managing This is the consolidated balance sheet referred to in our separate report of even date. Dhaka 22 March 2014 Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants 5

3 Operating income Taka Taka Investment income 48,145,464,380 43,672,225,981 Profit paid on mudaraba deposits (30,900,279,562) (25,870,425,237) Net investment income 17,245,184,818 17,801,800,744 Income from investments in shares & securities 27(a) 2,112,029, ,361,836 Commission, exchange & brokerage income 28(a) 5,003,261,950 5,075,120,409 Other operating income 29(a) 985,819, ,418,614 Total operating income 25,346,295,252 24,343,701,603 Operating expenses Salary & allowances 7,552,761,347 5,961,421,881 Rent, taxes, insurances, electricity etc. 30(a) 825,130, ,576,460 Legal expenses 35,285,323 4,918,521 Postage, stamps and telecommunication etc. 31(a) 44,536,896 41,344,474 Stationery, printing and advertisement etc. 32(a) 330,098, ,730,060 Chief executive's salary & fees ,323,548 5,280,000 s' fees & expenses 34(a) 11,875,334 10,066,840 Shari'ah supervisory committee's fees & expenses 1,401,423 2,584,829 Auditors' fees 2,168,000 2,168,000 Charges on investment losses - - Depreciation and repair to bank's assets 36(a) 729,987, ,441,086 Zakat expenses 385,750, ,772,772 Other expenses 37(a) 1,138,621, ,001,699 Total operating expenses 11,064,941,178 8,746,306,622 Profit/ (loss) before provision 14,281,354,074 15,597,394,981 Provision for investments & off- balance sheet items ,015,633,502 3,502,625,602 Provision for diminution in value of investments in shares 19.7(a) 45,627,899 30,969,670 Other provisions ,201,000 9,441,066 Total provision 3,074,462,401 3,543,036,338 Total profit/(loss) before taxes 11,206,891,673 12,054,358,643 Provision for taxation for the period Islami Bank Bangladesh Limited and its Subsidiaries Consolidated Profit & Loss Account For the year ended 31 December 2013 Current tax 19.9(a) 6,195,969,079 6,574,464,832 Deferred tax 20(b) (44,439,537) 45,964,788 Net profit/ (loss) after tax 5,055,362,131 5,433,929,023 Net profit after tax attributable to: 5,055,362,131 5,433,929,023 Equity holders of IBBL 5,055,360,393 5,433,926,784 Non-controlling interest 38(b) 1,738 2,239 Retained earnings from previous year 3,073,402,299 3,238,973,096 Add: Net profit after tax (attributable to equity holders of IBBL) 5,055,360,393 5,433,926,784 Profit available for appropriation 8,128,762,692 8,672,899,880 Appropriation: 8,128,762,692 8,672,899,880 Statutory reserve 2,214,951,285 2,419,235,534 General reserve 148,543,336 (22,205,793) Dividend 3,127,410,000 3,202,467,840 Retained earnings 38(a) 2,637,858,071 3,073,402,299 Consolidated earnings per share 40(a) The annexed notes form an integral part of these financial statements. Notes Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain This is the consolidated profit & loss account referred to in our separate report of even date. Mohammad Abdul Mannan Managing Dhaka 22 March 2014 Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants 6

4 Cash flows from operating activities Taka Taka Investment income 49,302,935,930 42,092,371,173 Profit paid on mudaraba deposits (30,718,018,746) (24,290,570,429) Income/ dividend receipt from investments in shares & securities 2,112,029, ,361,836 Fees & commission receipt in cash 5,003,261,950 5,260,647,661 Recovery from written off investments 43,918, ,882,331 Payments to employees (7,130,884,895) (5,966,701,881) Cash payments to suppliers (306,150,694) (317,323,649) Income tax paid (5,763,293,016) (4,888,001,666) Receipts from other operating activities 985,205,915 1,016,990,346 Payments for other operating activities (2,977,864,593) (2,189,000,102) (i) Operating profit before changes in operating assets 10,551,139,229 11,310,655,620 Changes in operating assets and liabilities Increase/decrease of statutory deposits - - Increase/decrease of net trading securities - - Increase/decrease of placement to other banks - - Increase/decrease of investments to customers (33,883,832,543) (67,080,159,717) Increase/decrease of other assets (1,475,585,020) 109,479,065 Increase/decrease of deposits from other banks (1,023,989) (437,641,214) Increase/decrease of deposits received from customers 52,892,382,596 76,377,684,681 Increase/decrease of other liabilities account of customers - - Increase/decrease of trading liabilities - - Increase/decrease of other liabilities 5,717,219, ,551,279 (ii) Cash flows from operating assets and liabilities 23,249,160,414 9,250,914,094 Net cash flows from operating activities (A)=(i-ii) 33,800,299,643 20,561,569,714 Cash flows from investing activities Proceeds from sale of securities 836,868,609 1,173,962,731 Payment for purchase of securities/bgiib (41,393,061,898) (11,257,091,966) Payment for purchase of securities/membership - - Purchase/sale of property, plants & equipments (1,555,262,018) (960,861,899) Purchase/sale of subsidiaries - - Net Cash flows from investing activities (B) (42,111,455,307) (11,043,991,134) Cash flows from financing activities Islami Bank Bangladesh Limited and its Subsidiaries Consolidated Cash Flow Statement For the year ended 31 December 2013 Receipts from issue of debt instruments - - Payment for redemption of debt instruments - - Receipts from issuing ordinary share/ rights share - - Dividend paid in Cash (1,000,771,200) (700,539,840) Net cash flows from financing activities (C) (1,000,771,200) (700,539,840) Net increase/(decrease) in cash (A+B+C) (9,311,926,864) 8,817,038,740 Add/(less): effects of exchange rate changes on cash & cash equivalent 4,621,542 (3,303,771) Add: cash & cash equivalents at beginning of the year 66,298,945,720 57,485,210,751 Cash & cash equivalents at the end of the year 43(a) 56,991,640,398 66,298,945,720 The annexed notes form an integral part of these financial statements. Note Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain Mohammad Abdul Mannan Managing This is the consolidated cash flow statement referred to in our separate report of even date. Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants Dhaka 22 March

5 Islami Bank Bangladesh Limited and its Subsidiaries Consolidated Statement of Changes in Equity For the year ended 31 December 2013 (Amount in Taka) Particulars Paid-up capital Share premium Statutory reserve General/ other reserves * Assets revaluation reserve Revaluation reserve of securities Retained earnings Non-controlling interest Total ( ) Balance as at 01 January ,509,640,000 1,989,633 12,423,662, ,136,208 11,498,971,320 34,700,000 3,073,402,299 59,594 39,701,561,396 Changes in accounting policy restated balance Surplus/ (deficit) on account of revaluation of properties Surplus/ (deficit) on account of revaluation of investments (shares & securities) ,900, ,900,000 Currency translation differences ,621, ,621,542 Net gain and losses not recognized in the income statement Net profit for the period ,055,360,393 1,738 5,055,362,131 Transfer to reserve - - 2,214,951, ,543, (2,363,494,621) - - Dividend: Bonus shares 2,126,638, (2,126,638,800) - - Cash dividend (1,000,771,200) - (1,000,771,200) Issue of share capital Total shareholders' equity as on 31 December ,636,278,800 1,989,633 14,638,613, ,301,086 11,498,971,320 62,600,000 2,637,858,071 61,332 43,788,673,869 Add: Mudaraba perpetual bond ,000,000,000 Add: General provision for unclassified investments and off- balance sheet items Adjustment for currency translation differences ,508,800, ,508,800, (1,317,771) (1,317,771) Less: 50.00% of assets revaluation reserve (5,749,485,660) (5,749,485,660) Less: 50.00% of revaluation reserve of securities (31,300,000) - - (31,300,000) Total equity as on 31 December ,636,278,800 1,989,633 14,638,613,627 4,819,783,315 5,749,485,660 31,300,000 2,637,858,071 61,332 45,515,370,438 *Note : General / other reserves General reserve 152,645, ,439,979 Dividend equalization account 32,000,000 32,000,000 Currency translation differences (3,303,771) Total 184,645, ,136,208 8

6 Islami Bank Bangladesh Limited and its Subsidiaries Consolidated Statement of Changes in Equity For the year ended 31 December 2012 (Amount in Taka) Particulars Paid-up capital Share premium Statutory reserve General/ other reserves * Assets revaluation reserve Revaluation reserve of securities Retained earnings Non-controlling interest Total ( ) Balance as at 01 January ,007,712,000 1,989,633 10,004,426, ,645,772 4,308,071,320 90,900,000 3,015,952,005 57,355 27,613,754,893 Changes in accounting policy restated balance (Note ) Surplus/ (deficit) on account of revaluation of properties ,021, ,021, ,190,900, ,190,900,000 Surplus/ (deficit) on account of revaluation of investments (shares & securities) (56,200,000) - - (56,200,000) Currency translation differences (3,303,771) (3,303,771) Net gain and losses not recognized in the income statement Net profit for the period ,433,926,784 1,932 5,433,928,716 Transfer to reserve - - 2,419,235,534 (22,205,793) - - (2,397,029,741) - - Dividend: Bonus shares 2,501,928, (2,501,928,000) - - Cash dividend (700,539,840) - (700,539,840) Issue of share capital Total shareholders' equity as on 31 December ,509,640,000 1,989,633 12,423,662, ,136,208 11,498,971,320 34,700,000 3,073,402,299 59,594 39,701,561,396 Add: Mudaraba perpetual bond ,000,000,000 Add: General provision for unclassified investments and off- balance sheet items Adjustment for currency translation differences ,036,350, ,036,350,000 3,303,771-3,303,771 Less: 50.00% of assets revaluation reserve (5,749,485,660) (5,749,485,660) Less: 50.00% of revaluation reserve of securities (17,350,000) (17,350,000) Total equity as on 31 December ,509,640,000 1,989,633 12,423,662,342 5,198,789,979 5,749,485,660 17,350,000 3,073,402,299 59,594 41,974,379,507 Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain Mohammad Abdul Mannan Managing This is the consolidated statement of changes in equity referred to in our separate report of even date. Dhaka 22 March 2014 Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants 9

7 Islami Bank Bangladesh Limited Balance Sheet As at 31 December 2013 Property and Assets Notes Taka Taka Cash in hand ,291,514,939 41,774,009,647 Cash in hand (including foreign currency) 8,180,338,285 6,308,271,684 Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 36,111,176,654 35,465,737,963 Balance with other banks & financial institutions ,327,320,344 23,048,348,207 In Bangladesh 7,577,940,830 15,955,976,932 Outside Bangladesh 4,749,379,514 7,092,371,275 Placement with banks & other financial institutions - - Investments in shares & securities ,211,398,968 27,010,073,770 Government 63,698,877,770 23,504,977,770 Others 3,512,521,198 3,505,096,000 Investments ,804,555, ,920,722,887 General investments etc. 363,707,873, ,479,756,413 Bills purchased & discounted ,096,681,470 32,440,966,474 Fixed assets including premises ,732,808,589 14,808,228,329 Other assets ,471,783,137 2,974,933,877 Non - banking assets - - Total property and assets 550,839,381, ,536,316,717 Liabilities and Capital Liabilities Placement from banks & other financial institutions - - Deposits & other accounts ,140,955, ,844,142,245 Mudaraba savings deposits 155,193,986, ,012,262,458 Mudaraba term deposits 131,412,377,473 97,278,542,378 Other mudaraba deposits ,280,784, ,807,137,348 Al- wadeeah current and other deposit accounts ,124,147,978 47,530,161,727 Bills payable ,129,657,957 4,216,038,334 Mudaraba perpetual bond ,000,000,000 3,000,000,000 Other liabilities ,719,007,685 21,673,597,100 Deferred tax liabilities ,134, ,230,992 Total liabilities 507,054,096, ,755,970,337 Capital/ shareholders' equity 43,785,284,650 39,780,346,380 Paid - up capital ,636,278,800 12,509,640,000 Statutory reserve ,638,613,627 12,423,662,342 Other reserves ,875,862,039 11,694,797,161 Retained Earnings ,634,530,184 3,152,246,877 Total liabilities & shareholders' equity ,839,381, ,536,316,717

8 Islami Bank Bangladesh Limited Balance Sheet As at 31 December 2013 Off-balance Sheet Items Notes Taka Taka Contingent liabilities Acceptances & endorsements - - Letters of guarantee ,354,594,651 7,297,485,550 Irrevocable letters of credit (including back to back bills) 83,946,725,635 87,161,261,558 Bills for collection 22,390,676,317 15,571,833,223 Other contingent liabilities 23,581,701 13,600,712 Total 113,715,578, ,044,181,043 Other commitments Documentary credits, short term and trade related transactions - - Forward assets purchased and forward deposits placed - - Undrawn note issuance, revolving and underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Total - - Total off-balance sheet items including contingent liabilities 113,715,578, ,044,181,043 The annexed notes form an integral part of these financial statements. Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain Mohammad Abdul Mannan Managing This is the balance sheet referred to in our separate report of even date. Dhaka 22 March 2014 Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants 11

9 Operating income Taka Taka Investment income ,145,464,380 43,672,225,981 Profit paid on mudaraba deposits 26.0 (30,975,185,536) (25,870,425,237) Net investment income 17,170,278,844 17,801,800,744 Income from investments in shares & securities ,047,514, ,970,748 Commission, exchange & brokerage income ,993,729,383 5,064,172,729 Other operating income ,638, ,419,068 Total operating income 25,143,161,503 24,147,363,289 Operating expenses Salary & allowances 7,538,859,361 5,951,305,071 Rent, taxes, insurances, electricity etc ,139, ,494,766 Legal expenses 35,067,030 4,918,521 Postage, stamps and telecommunication etc ,343,667 41,233,284 Stationery, printing and advertisement etc ,947, ,547,822 Chief executive's salary & fees ,323,548 5,280,000 s' fees & expenses ,587,834 10,066,840 Shari'ah supervisory committee's fees & expenses ,401,423 2,584,829 Auditors' fees 2,070,000 2,070,000 Charges on investment losses - - Depreciation and repair to bank's assets ,713, ,228,968 Zakat expenses 385,750, ,772,772 Other expenses ,134,942, ,143,330 Total operating expenses 11,039,146,797 8,724,646,203 Profit/ (loss) before provision 14,104,014,706 15,422,717,086 Provision for investments & off- balance sheet items ,015,633,502 3,502,625,602 Provision for diminution in value of investments in shares ,778 - Other provisions ,201,000 9,441,066 Total provision 3,029,258,280 3,512,066,668 Total profit/(loss) before taxes 11,074,756,426 11,910,650,418 Provision for taxation for the period Islami Bank Bangladesh Limited Profit & Loss Account For the year ended 31 December 2013 Current tax ,145,665,449 6,525,837,929 Deferred tax 20.0 (44,096,951) 45,900,000 Net profit/ (loss) after tax 4,973,187,928 5,338,912,489 Retained earnings from previous year 3,152,246,877 3,412,831,969 Add: Net profit after tax 4,973,187,928 5,338,912,489 Profit available for appropriation 8,125,434,805 8,751,744,458 Appropriation: 8,125,434,805 8,751,744,458 Statutory reserve 2,214,951,285 2,419,235,534 General reserve 148,543,336 (22,205,793) Dividend 3,127,410,000 3,202,467,840 Retained earnings ,634,530,184 3,152,246,877 Earnings per share (EPS) The annexed notes form an integral part of these financial statements. Notes Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain Mohammad Abdul Mannan Managing This is the profit & loss account referred to in our separate report of even date. Dhaka 22 March 2014 Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants 12

10 Cash flows from operating activities Taka Taka Investment income 49,302,935,930 42,092,371,173 Profit paid on mudaraba deposits (30,792,924,720) (24,290,570,429) Income/ dividend receipt from investments in shares & securities 2,047,514, ,970,748 Fees & commission receipt in cash 4,993,729,383 5,249,699,981 Recovery from written off investments 43,918, ,882,331 Payments to employees (7,116,982,909) (5,926,585,071) Cash payments to suppliers (305,999,171) (317,141,411) Income tax paid (5,731,916,584) (4,869,763,379) Receipts from other operating activities 931,638, ,990,800 Payments for other operating activities (2,969,365,539) (2,180,853,649) (i) Operating profit before changes in operating assets 10,402,547,851 11,181,001,094 Changes in operating assets and liabilities Increase/decrease of statutory deposits - - Increase/decrease of net trading securities - - Increase/decrease of placement to other banks - - Increase/decrease of investments to customers (33,883,832,543) (67,080,159,717) Increase/decrease of other assets (1,496,849,260) 134,952,740 Increase/decrease of deposits from other banks (1,023,989) (437,641,214) Increase/decrease of deposits received from customers 53,897,836,775 76,428,110,500 Increase/decrease of other liabilities account of customers - - Increase/decrease of trading liabilities - - Increase/decrease of other liabilities 5,602,403, ,387,305 (ii) Cash flows from operating assets and liabilities 24,118,534,423 9,229,649,614 Net cash flows from operating activities (A)=(i+ii) 34,521,082,274 20,410,650,708 Cash flows from investing activities Proceeds from sale of securities - - Payment for purchase of securities/bgiib (40,173,425,198) (10,134,000,000) Payment for purchase of securities/membership - - Purchase/sale of property, plants & equipments (1,555,029,989) (959,656,195) Purchase/sale of subsidiaries - - Net cash flows from investing activities (B) (41,728,455,187) (11,093,656,195) Cash flows from financing activities Islami Bank Bangladesh Limited Cash Flow Statement For the year ended 31 December 2013 Receipts from issue of debt instruments - - Payment for redemption of debt instruments - - Receipts from issuing ordinary share/ rights share - - Dividend paid in Cash (1,000,771,200) (700,539,840) Net cash flows from financing activities (C) (1,000,771,200) (700,539,840) Net increase/(decrease) in cash (A+B+C) (8,208,144,113) 8,616,454,673 Add/(Less): effects of exchange rate changes on cash & cash equivalent 4,621, (3,303,771) Add: cash & cash equivalents at beginning of the year 64,822,357,854 56,209,206,952 Cash & cash equivalents at the end of the year ,618,835,283 64,822,357,854 The annexed notes form an integral part of these financial statements. Note Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain This is the cash flow statement referred to in our separate report of even date. Mohammad Abdul Mannan Managing Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants Dhaka 22 March

11 Islami Bank Bangladesh Limited Statement of Changes in Equity For the year ended 31 December 2013 (Amount in Taka) Particulars Paid-up capital General/ other Assets revaluation Revaluation Share premium Statutory reserve reserves * reserve reserve of securities Retained earnings Total ( ) Balance as at 01 January ,509,640,000 1,989,633 12,423,662, ,136,208 11,498,971,320 34,700,000 3,152,246,877 39,780,346,380 Changes in accounting policy restated balance Surplus/ (deficit) on account of revaluation of properties Surplus/ (deficit) on account of revaluation of investments (shares & securities) ,900,000-27,900,000 Currency translation differences ,621, ,621,542 Net gain and losses not recognized in the income statement Net profit for the period ,973,187,928 4,973,187,928 Transfer to reserve - - 2,214,951, ,543, (2,363,494,621) - Dividend: Bonus shares 2,126,638, (2,126,638,800) - Cash dividend (1,000,771,200) (1,000,771,200) Issue of share capital Total shareholders' equity as on 31 December ,636,278,800 1,989,633 14,638,613, ,301,086 11,498,971,320 62,600,000 2,634,530,184 43,785,284,650 Add: Mudaraba perpetual bond ,000,000,000 Add: General provision for unclassified investments and off- balance sheet items ,508,800, ,508,800,000 Adjustment for currency translation differences (1,317,771) (1,317,771) Less: 50.00% of assets revaluation reserve (5,749,485,660) - - (5,749,485,660) Less: 50.00% of revaluation reserve of securities (31,300,000) - (31,300,000) Total equity as on 31 December ,636,278,800 1,989,633 14,638,613,627 4,819,783,315 5,749,485,660 31,300,000 2,634,530,184 45,511,981,219 - *Note : General / other reserves General reserve 152,645, ,439,979 Dividend equalization account 32,000,000 32,000,000 Currency translation differences - (3,303,771) Total 184,645, ,136,208 14

12 ( ) Balance as at 01 January ,007,712,000 1,989,633 10,004,426, ,645,772 4,308,071,320 90,900,000 3,202,467,840 27,800,213,373 Changes in accounting policy restated balance (Note 2.1.3) ,364, ,364,129 Surplus/ (deficit) on account of revaluation of properties Surplus/ (deficit) on account of revaluation of investments (shares & securities) ,190,900,000 (56,200,000) - 7,134,700,000 Currency translation differences (3,303,771) (3,303,771) Net gain and losses not recognized in the income statement Net profit for the period ,338,912,489 5,338,912,489 Transfer to reserve - - 2,419,235,534 (22,205,793) - - (2,397,029,741) - Dividend: Islami Bank Bangladesh Limited Statement of Changes in Equity For the year ended 31 December 2012 General/ other Assets revaluation Revaluation Particulars Paid-up capital Share premium Statutory reserve Retained earnings Total reserves reserve reserve of securities (Amount in Taka) Bonus shares 2,501,928, (2,501,928,000) - Cash dividend (700,539,840) (700,539,840) Issue of share capital Total shareholders' equity as on 31 December ,509,640,000 1,989,633 12,423,662, ,136,208 11,498,971,320 34,700,000 3,152,246,877 39,780,346,380 Add: Mudaraba perpetual bond ,000,000,000 Add: General provision for unclassified investments and off- balance sheet items ,036,350, ,036,350,000 Adjustment for currency translation differences 3,303,771 3,303,771 Less: 50.00% of assets revaluation reserve (5,749,485,660) - - (5,749,485,660) Less: 50.00% of revaluation reserve of securities (17,350,000) - (17,350,000) Total equity as on 31 December ,509,640,000 1,989,633 12,423,662,342 5,198,789,979 5,749,485,660 17,350,000 3,152,246,877 42,053,164,491 - Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain This is the statement of changes in equity referred to in our separate report of even date. Mohammad Abdul Mannan Managing Dhaka 22 March 2014 Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants 15

13 ASSETS Particulars Up to 1 Month Islami Bank Bangladesh Limited 1-3 Months Liquidity Statement Assets & liabilities analysis As at 31 December Months More than 5 years Total Total =( ) 8 Cash in hand 11,418,521, ,872,993,908 44,291,514,939 6,308,271,684 Balance with other banks & financial institutions (Note-8.2) 6,307,320,344 6,020,000, ,327,320,344 58,514,086,170 Placement with Banks & other Financial Institutions Investments (in shares & securities) (Note-9.2.) 7,870,025,198 3,110,000,000 32,230,000,000 20,980,000,000 3,021,373,770 67,211,398,968 27,010,073,770 General investments etc. (Note-10.1) 58,597,420,452 79,911,556, ,200,639,532 81,825,115,535 80,269,823, ,804,555, ,920,722,887 Fixed assets including premises (land & building), furniture and fixtures (Note-12.1) ,244,555 1,120,024,635 13,876,539,399 15,732,808,589 14,808,228,329 Other assets 311,682,569 2,391,104, ,734, ,875, ,385,390 4,471,783,137 2,974,933,877 Non - banking assets Total assets 84,504,969,594 91,432,661, ,092,618, ,489,015, ,320,116, ,839,381, ,536,316,717 LIABILITIES Placement from banks & other financial institutions Deposits (Note-14.1) 78,338,398,146 87,591,231, ,074,404,498 91,796,376,897 79,340,543, ,140,955, ,844,142,245 Other accounts Provision & other liabilities (Note-19.12) 2,048,263,128 1,209,892,426 2,590,022,229 8,508,634,995 16,362,194,907 30,719,007,685 21,673,597,100 Deferred tax liability/ (assets) ,134, ,134, ,230,992 Mudaraba perpetual bond ,000,000,000 3,000,000,000 3,000,000,000 Total liabilities 80,386,661,274 88,801,124, ,664,426, ,305,011,892 98,896,872, ,054,096, ,755,970,337 Net liquidity gap 4,118,308,320 2,631,536,878 1,428,192,116 4,184,003,741 31,423,243,597 43,785,284,650 39,780,346, years Prof. NRM Borhan Uddin Ph.D Md. Abdus Salam FCA, FCS Barrister Mohammed Belayet Hossain Mohammad Abdul Mannan Managing This is the liquidity statement referred to in our separate report of even date. Dhaka 22 March 2014 Aziz Halim Khair Choudhury Syful Shamsul Alam & Co Howladar Yunus & Co. Chartered Accountants Chartered Accountants Chartered Accountants 16

14 1.0 The Bank and its activities Islami Bank Bangladesh Limited and its Subsidiaries Notes to the consolidated financial statements For the year ended 31 December Islami Bank Bangladesh Limited ("the Bank"/"IBBL") was established as a Public Limited Banking Company in Bangladesh in 1983 as the first interest free Shari ah based Scheduled Commercial Bank in the 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, Bai-Salam and Bai-as-Sarf etc. There is a Shari'ah Supervisory Committee in the Bank who ensures that the activities of the Bank are being conducted on the precepts of Islam. The Shari ah Supervisory Committee consists of prominent Shari'ah scholars, 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 shares of the Bank are listed with both the Stock Exchanges. The Bank carries out its business activities through its Head Office in Dhaka, 14 Zonal Offices and 286 branches including 30 SME/Agriculture branches in Bangladesh. The Principal place of business is the Registered Office at Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh. These financial statements as at and for the year ended 31 December 2013 include the consolidated financial statements and the separate financial statements of the Bank. The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries (mentioned in Note - 1.4, together referred to as "the Companies"). 1.2 Nature of business/principal activities of the Bank Commercial banking services 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 as amended up to 2013, Bangladesh Bank s directives and directives of other regulatory authorities Islamic micro-finance Islamic micro-finance represents micro-finance and the Islamic finance industry. Under Islamic micro-finance, major focus is given on improvement of living standard of poor people. The projects are closely monitored so that the members are really benefited. IBBL provides this services under the umbrella of Rural Development Scheme (RDS) and Urban Poor Development Scheme (UPDS). RDS and UPDS investment clients deposit certain percentage of amount for the welfare of them which are separately used and maintained as per existing policy Mobile financial services -"mcash" IBBL has launched mobile financial services from 27 December 2012 under the name "Islami Bank mcash" as per Bangladesh Bank approval (reference no. DCMPS/PSD/37/(W)/ dated 14 June 2012). Islami Bank mcash offers different services through Mobile phone that include free and quick opening of customer account, deposit and withdrawal of cash money, fund transfer from one account to another, receiving remittance from abroad, knowing account balance and mini-statement, giving and receiving salary, mobile recharge and payment of utility bill, merchant bill payment etc. 1.3 Off-shore banking unit (OBU) Bangladesh Bank has approved the operation of Off-Shore Banking Unit (OBU) of Islami Bank Bangladesh Limited located at Head Office Complex Branch- Dhaka, Uttara Branch- Dhaka and Agrabad Branch- Chittagong through letter no. BRPD (P-3)744(111)/ dated 28 March, The Bank commenced the operation of its Off-shore Banking Unit from at Head Office Complex Branch, Dhaka, and from at Agrabad Branch, Chittagong. Operations of OBU located at Uttara Branch, Dhaka has not been started yet. Due to having different functional currency (Note 2.3), the operation of OBU has been considered as "foreign operation" for reporting purposes and relevant financial reporting standards have been applied accordingly (Note 3.2.2). 17

15 1.4 Subsidiaries of the Bank Islami Bank Securities Limited (IBSL) As per Securities and Exchange Commission's (SEC) Letter No. SEC/Reg/CSE/MB/ 2009/444 dated and approval of Bangladesh Bank through Letter No. BRPD (R-1)717/ dated ; IBBL established a subsidiary Company named "Islami Bank Securities Limited" to operate stock broker and stock dealer activities. The share capital of Islami Bank Securities Ltd. is Tk. 2,700,000,000/- divided into 2,700,000 shares of Tk.1,000/ each out of which share capital of IBBL is Tk.2,699,946,000/- divided into 2,699,946 shares of Tk.1,000/- each which represent % of total share of the subsidiary Company. IBSL was incorporated on and date of commencement of business was Required capital was transferred to IBSL on which is operating business under the license issued by the Securities & Exchange Commission (SEC). As a stock broker, IBSL acts as an agent in the purchase and sale of Shari ah approved listed securities and realizes commission on transactions in accordance with approved commission schedule. Financial Statements of the Company are shown at Annexure - E Islami Bank Capital Management Limited (IBCML) As per Bangladesh Bank BRPD Circular No. 12 dated and approval of Bangladesh Bank through Letter No. BRPD (R-1)717/ dated , IBBL established another subsidiary Company named "Islami Bank Capital Management Limited" to operate portfolio management, underwriting, issue management etc. IBCML was incorporated on and required capital was transferred on The share capital of Islami Bank Capital Management Ltd. is Tk.300,000,000/- divided into 300,000 shares of Tk.1,000/ each out of which share capital of IBBL is Tk.299,993,000/- divided into 299,993 shares of Tk.1,000/- each which represent % of total share of the subsidiary Company. Permission of Bangladesh Securities and Exchange Commission (BSEC) is yet to be received for operation of IBCML. Financial Statements of the Company are shown at Annexure - F IBBL Exchange Singapore Pte. Ltd. Another subsidiary of Islami Bank Bangladesh Limited named IBBL Exchange Singapore Pte. Ltd. is under process to incorporate in Singapore for money-remittance, changing, transmitting and doing all matters and things incidental thereto under the Companies Act, CAP. 50 of the Republic of Singapore. 2.0 Basis of preparation 2.1 Statement of compliance The operations of the Bank and its subsidiaries are in strict compliance with the rules of Islamic Shari ah. The consolidated financial statements and the separate financial statement of the Bank have been prepared basically as per provisions of the Guidelines for Islamic Banking issued by Bangladesh Bank through BRPD Circular No. 15 dated with reference to the provisions of the Bank Company Act, 1991 as amended up to 2013 and by Bangladesh Bank BRPD Circular No.14 dated & Bangladesh Bank s other circulars/instructions and in accordance with International Financial Reporting Standards (IFRSs) adopted as Bangladesh Financial Reporting Standards (BFRSs) by the Institute of Chartered Accountants of Bangladesh (ICAB); 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 and Standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), as a member of that organization. In case the requirement of guidelines and circulars issued by Bangladesh Bank differ with those of other regulatory authorities and financial reporting standards, the guidelines and circulars issued by Bangladesh Bank prevails. As such the Bank has departed from those contradictory requirements of BFRSs in order to comply with the rules and regulations of Bangladesh Bank which are disclosed below: 18

16 i) Provision on investments and off-balance sheet exposures BFRS: As per BAS 39 "Financial Instruments: Recognition and Measurement" an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets that are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis. Bangladesh Bank: As per BRPD circular No.14 dated 23 September 2012, BRPD circular No. 19 dated 27 December 2012 and BRPD circular No. 05 dated 29 May 2013 a general provision at 0.25% to 5% under different categories of unclassified investments (good/standard investments) has to be maintained regardless of objective evidence of impairment. Also provision for sub-standard investments, doubtful investments and bad losses has to be provided at 20%, 50% and 100% respectively for investments depending on the duration of overdue. Again as per BRPD circular no. 10 dated 18 September 2007 and BRPD circular no. 14 dated 23 September 2012, a general provision at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39. ii) Recognition of investment income in suspense BFRS: Investment to customers are generally classified as 'loans and receivables' as per BAS 39 "Financial Instruments: Recognition and Measurement" and investment income is recognised through effective interest rate method over the term of the investment. Once an investment is impaired, investment income is recognised in profit and loss account on the same basis based on revised carrying amount. Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once an investment is classified, investment income on such investment are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an investment income in suspense account, which is presented as liability in the balance sheet. iii) Investment in shares and securities BFRS: As per requirements of BAS 39 "Financial Instruments: Recognition and Measurement" investment in shares and securities generally falls either under at fair value through profit and loss account or under available for sale where any change in the fair value (as measured in accordance with BFRS 13) at the year-end is taken to profit and loss account or revaluation reserve respectively. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment; otherwise investments are recognised at cost. iv) Revaluation gains/losses on Government securities BFRS: As per requirement of BAS 39 "Financial Instruments: Recognition and Measurement" where securities will fall under the category of Held for Trading (HFT), any change in the fair value of held for trading assets is recognised through profit and loss account. Securities designated as Held to Maturity (HTM) are measured at amortised cost method and interest income is recognised through the profit and loss account. Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at year end any gains on revaluation of securities which have not matured as at the balance sheet date are recognised in other reserves as a part of equity and any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account. Profit on HFT securities including amortisation of discount are recognised in the profit and loss account. HTM securities which have not matured as at the balance sheet date are amortised at the year end and gains or losses on amortisation are recognised in other reserve as a part of equity. v) Other comprehensive income BFRS: As per BAS 1 "Presentation of Financial Statements" Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to be included in a single Other Comprehensive Income statement. Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to be included in a single Other Comprehensive Income (OCI) Statement. As such the Bank does not prepare the other comprehensive income statement. However, elements of OCI, if any, are shown in the statements of changes in equity. 19

17 vi) Financial instruments - presentation and disclosure In several cases Bangladesh Bank guidelines categorise, recognise, measure and present financial instruments differently from those prescribed in BAS 39 "Financial Instruments: Recognition and Measurement". As such full disclosure and presentation requirements of BFRS 7 "Financial Instruments: Disclosures" and BAS 32 "Financial Instruments: Presentation" cannot be made in the financial statements. vii) Financial guarantees BFRS: As per BAS 39 "Financial Instruments: Recognition and Measurement", financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognised initially at their fair value, and the initial fair value is amortised over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortised amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial guarantees are included within other liabilities. Bangladesh Bank: As per BRPD 14 dated 25 June 2003, financial guarantees such as letter of credit, letter of guarantee will be treated as off-balance sheet items. No liability is recognised for the guarantee except the cash margin. viii) Balance with Bangladesh Bank: (Cash Reserve Requirement) BFRS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as per BAS 7 "Statement of Cash Flows". Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents. ix) Cash flow statement BFRS: The Cash flow statement can be prepared using either the direct method or the indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently. Bangladesh Bank: As per BRPD 14 dated 25 June 2003, cash flow statement is to be prepared following a mixture of direct and indirect methods. x) Non-banking asset BFRS: No indication of Non-banking asset is found in any BFRS. Bangladesh Bank: As per BRPD 14 dated 25 June 2003, there must exist a face item named Non-banking asset. xi) Presentation of intangible asset BFRS: An intangible asset must be identified and recognised, and the disclosure must be given as per BAS 38 "Intangible Assets". Bangladesh Bank: There is no regulation for intangible assets in BRPD 14 dated 25 June xii) Off-balance sheet items BFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement for disclosure of offbalance sheet items on the face of the balance sheet. Bangladesh Bank: As per BRPD 14 dated 25 June 2003, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately on the face of the balance sheet. 20

18 xiii) Investments net of provision BFRS: Investments should be presented net of provision. Bangladesh Bank: As per BRPD 14 dated 25 June 2003, provision on investments are presented separately as liability and can not be netted off against investments. xiv) Revenue As per BAS 18 "Revenue", revenue should be recognized on accrual basis but due to the unique nature of Islamic Banks, income from investment under Mudaraba, Musharaka, Bai-Salam and Bai-as-Sarf modes is accounted for on realization basis as per AAOIFI and Bangladesh Bank guidelines. [Note 4 includes Compliance with Financial Reporting Standards as applicable in Bangladesh] Authorization of the financial statements for issue The consolidated financial statements and the separate financial statements of the Bank have been authorized for issue by the Board of s on 22 March Changes in accounting standards A number of new International Financial Reporting Standards (IFRSs) have been adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) as Bangladesh Financial Reporting Standards (BFRSs) which are effective on or after 01 January 2013 and hence applicable BFRSs have been applied in preparing these financial statements. The new BFRSs are as follows: BFRS 10 Consolidated Financial Statements BFRS 11 Joint Arrangements BFRS 12 Disclosure of Interests in Other Entities BFRS 13 Fair Value Measurement and BAS 29 Financial Reporting in Hyperinflationary Economics BAS 29 Financial Reporting in Hyperinflationary Economics has been adopted by ICAB but effective on or after 01 January However, BAS 29 is not applicable for either the Companies or Bank as Bangladesh is not regarded as a Hyperinflationary economy Prior period adjustments Prior period adjustments, if any, are recognized retrospectively as per BAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" accordingly during the year an adjustments was made regarding the treatment of exchange differences arise on revaluation of placement in Off-shore Banking Unit (OBU). As per BAS 21 "The Effects of Changes in Foreign Exchange Rates", the exchange differences arise on revaluation of placement in OBU should be charged to profit and loss. Earlier the exchnage differences was shown as other liabilities. The adjustment was made retrospectively restating the opening balance of retained earnings for the year 2012 (the earliest comparative year) and corrected in current year. Cumulative balance up to the year 2011 of Tk.210,364,129 has been transferred to retained earnings from other liabilities to rectify the opening balance of the year Revaluation loss of Tk.185,527,252 for the year 2012 has been charged to profit and loss and related earnings has been adjusted for the same. Revaluation loss of Tk.360,806,311 for the year 2013 has been charged to profit and loss as per the provisons of BAS 21. The related changes in earnings per share (EPS), non-controlling interest (NCI) due to the afforsaid changes have also been made accordingly for the year

19 2.2 Basis of measurement The financial statements have been prepared on the historical cost basis except for the following material items: - Land is recognized at cost at the time of acquisition and subsequently measured at fair value following revaluation model as per BAS 16 "Property Plant & Equipment". - Investments in quoted shares are revalued at the year end at market price as per Bangladesh Bank circular. 2.3 Functional and presentation currency The consolidated financial statements and the separate financial statements of the Bank are presented in Bangladeshi Taka (Taka/Tk./BDT) which is the functional currency of the Bank and its subsidiaries except Off-shore Banking Unit (OBU) where functional currency is US Dollar (USD). All financial information presented in Taka has been rounded to the nearest integer, except when otherwise indicated. 2.4 Use of estimates and judgments The preparation of the consolidated financial statements and the separate financial statements of the Bank in conformity with BFRSs require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively i.e. in the period in which the estimate is revised and in any future period affected. Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized and presented in the consolidated financial statements and the separate financial statements of the Bank are included in following notes/statements: a) Note 19.9 Current tax liabilities b) Note 20.0 Deferred tax liabilities c) Note 36.0 Depreciation d) Note Provisions for investments, diminuation in value of investment in shares and other assets e) Note 23.1 Asset revaluation reserve f) Liquidity statement Assets & liabilities analysis 2.5 Cash flow statement Cash Flow Statement is prepared in accordance with BAS 7 Statement of Cash Flows, and as per Guidelines for Islamic Banking issued by Bangladesh Bank through BRPD Circular No. 15 dated and BRPD Circular No.14 dated The Statement shows the structure of changes in cash and cash equivalents during the financial year. 2.6 Statement of changes in equity Statement of Changes in Equity has been prepared in accordance with BAS 1 Presentation of Financial Statements, and as per Guidelines for Islamic Banking issued by Bangladesh Bank through BRPD Circular No. 15 dated and BRPD Circular No.14 dated