Annual Report 2017

Contents

Qur’anic Verses on Interest 04

Hadith on Interest 05

Opinion of other Religions and Great Men on Interest 06

Board of Directors 07

Executive Committee, Audit Committee, Shariah Supervisory Committee 08

Management Team 09

Vision, Mission and Commitments 11

Corporate Information 12

Notice of the 23rd Annual General Meeting 14

5 Years Financial Highlights 15

Economic Impact Report 16

Value Added Statements 17

Chairman’s Address 21

Managing Director’s Address 23

Board of Directors’ Report 33

Report of the Shariah Supervisory Committee 64

Steps taken by Al-Arafah Islami Bank Ltd. to execute National Integrity Strategy 65

Report of the Board Audit Committee 66

Auditors’ Report & Financial Statements for the year 2017 68

Qualitative and Quantitative Disclosures under Pillar -3 of Basel-II 135

Auditors’ Report on the Financial Statements ofAIBL Capital Market Services Limited 151

Auditors’ Report on the Financial Statements ofAIBL Capital Management Limited 166

Auditor’s Report on the Financial Statements of Millennium Information Solution Limited 179

Branches of AIBL 199

Proxy Form 205

 Qur’anic Verses
on Interest

I am seeking refuge in Allah from Shaitan, the outcast (the cursed one).
In the Name of Allah, the Most Gracious, the Most Merciful.

“Those who consume interest cannot stand (on the Day of Resurrection) except as one stands who
is being beaten by Shaitan into insanity. That is because they say, ‘Trade is just like interest’ whereas
Allah has permitted Trading and has forbidden Interest. So whoever has received an admonition
from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns
to (dealing in interest) those are the companions of the Fire; they will abide eternally therein”.
(Surah 2 Al-Bakara : 275)

“O you who believe! Be afraid of Allah and give up what remains (due to you) from interest, if you
are (really) believers. If you do not do it, then take a notice of war from Allah and His Massenger
(Rasul)”. (Surah 2 Al-Bakara : 278-279)
5
Hadith on
Interest

• “Jabir bin Abdullah (R) said that Rasul (Allah’s Messenger) (S) cursed the acceptor of interest
and its payer, and the one who records it, and the witness; and he said They are all equal.
(Muslim)

• Abdullah Ibn Masud (R) has quoted a Hadith of Rasul (Allah’s Messenger) (S) as saying: Whenev-
er adultery and usury become rampant in a community, it is inevitable that wrath of Allah will
befall upon them. (Abu Yala)

• Abu Huraira (R) has narrated that Rasul (Allah’s Messenger) (S) said: Allah as his unique right
will not allow four categories of people to enter the heaven and also refrain them from taking
taste of his bounties 1) Drunkard 2) Usury 3) Devourers of orphan’s wealth and 4) Disobedience
of parents. (Mustadarake Hakim)

• Abu Huraira (R) has narrated that Rasul (Allah’s Messenger) (S) said: you should protect yourself
from 7(seven) destructive issues ‘what are those’? -asked his companions. He said those are
1) Join in worship others with Allah 2) Mesmerizing 3) Killing someone unlawfully 4) Usury 5)
Devourers of orphan’s wealth 6) Flight from the battle field and 7) To charge against chaste
women. (Bukhari, Muslim and Abu Daud)

• Samura Ibn Zundub (R) has narrated that Rasul (Allah’s Messenger) (S) said: I saw in a dream
that two persons came to me and took me to a sacred place. Thereafter three of us proceeded
to a river full to blood and saw that a man was swimming in the river and another was standing
on the bank with huge rocks in front of him. When the swimmer approached the bank, the man
standing on it hit the swimmer with the rocks so heavily that he receded to his original place.
Whenever the swimmer tried to approach the bank of the river again, the standing person did
the same as before. Rasul (Allah’s Messenger) (S) asked ‘who is this man in the river’ One of the
angels said ‘He is a usurer’. (Bukhari)
6
 Opinion of other
Religions
and Great Men
on Interest

• Interest has been banned in the two books of Hazrat Musa (A.), which are considered as the
scriptures of Jews. The 22nd line of Exodus goes as saying, ‘If you lend money to a poor man,
don’t become money lenders and don’t realize interest from him.’

• Similarly in 23rd line of ancient scripture of the Jews entitled “Deuteronomy” states, ‘You don’t
lend money to your brother for interest -i.e interest on money, interest on foodstuff and inter-
est on anything lent.’

• Hebrewism is known as Musaic or Jewism. Musaic laws or commands of Musa are the basis of
Hebrewism. Interest was totally prohibited in Musaic law. This rule was exclusively practiced by
the Jews. In this ideology, there are clear directions on interest as other aspects of economics.
In Hinduism, usury business was restricted within the ‘Baithayas’.

• One Jew couldn’t take interest by lending money from another. But, taking interest was in prac-
tice by lending money to the people of other religions.

• Some writers quoted from the book, ‘Talmud’ that the Hebrew prophets forbade interest not
only from Jews but from all. (Eric Roll, A history of Economic Thought: page 48)
• Interest was prohibited from the beginning of the Christianity to the advent of the Reform
Movement and from the Church under pope in Rome to the division of other Churches, Christ
said, ‘Lend hopping for nothing again.’ (Luke VI 35, Hanley: History of Economic Thought 1964,
Page 101)
7
Board of Directors

Chairman
Alhajj Abdus Samad Labu

Vice Chairman
Alhajj Abdus Salam

Member
Hafez Alhajj Md. Enayet Ullah
Alhajj Salim Rahman
Alhajj Mohammed Emadur Rahman
Md. Amir Uddin PPM
Alhajj Nazmul Ahsan Khaled
Alhajj Abdul Malek Mollah
Alhajj Md. Harun-ar-Rashid Khan
Alhajj Md. Anowar Hossain
Alhajj Badiur Rahman
Alhajj Engr. Kh. Mesbahuddin Ahmed
Alhajj Ahamedul Haque
Alhajj Abu Naser Mohammad Yeahea
Alhajj Niaz Ahmed
Alhajj Md. Liakat Ali Chowdhury
Dr. Md. Shafiul Haider Chowdhury (Alternative Director of Alhajj Badsha Meah)
Alhajj Anwar Hossain (Alternative Director of Alhajj Mohammed Haroon)
Khalid Rahim FCA
Faruq Ahmad Siddiqi

Ex Officio Director
Managing Director
Md. Habibur Rahman

Company Secretary
Md. Mahmudur Rahman
8
 Board of Directors

Executive Committee (EC)

Chairman
Hafez Alhajj Md. Enayet Ullah

Vice Chairman
Alhajj Salim Rahman

Member
Alhajj Nazmul Ahsan Khaled
Alhajj Md. Harun-ar-Rashid Khan
Alhajj Badiur Rahman
Alhajj Engr. Kh. Mesbahuddin Ahmed
Alhajj Abu Naser Mohammad Yeahea

Board Audit Committee (BAC)

Chairman
Md. Amir Uddin PPM

Member
Alhajj Abdus Salam
Alhajj Abdul Malek Mollah
Alhajj Niaz Ahmed
Khalid Rahim FCA

Risk Management Committee (RMC)

Chairman
Alhajj Mohammed Emadur Rahman

Member
Alhajj Abdus Samad
Alhajj Ahamedul Haque
Alhajj Md. Liakat Ali Chowdhury
Faruq Ahmad Siddiqi

Shariah Supervisory Committee

Chairman
Mufti Sayeed Ahmad Muzaddedi

Member
Mufti Muinul Islam
Mufti Shahed Rahmani
Mohammad Abul Hossain Al-Azhari
Mawlana Mohammad Abdul Hai Nadvi
Al-Hajj A.Z.M. Shamsul Alam
Alhajj Abdus Samad Labu

Secretary
Md. Abdur Rahim Khan
9
Management
Team

Managing Director Md. Asaduzzaman Bhuiyan Md. Mogreb Ali

Md. Habibur Rahman Md. Golam Sarwar Ishtiaq Ahmed
Md. Idris Ali Md. Habibullah Bahar
Deputy Managing Director Aktar Kamal Md. Mainul Islam
Kazi Towhidul Alam Md. Mazharul Islam Md. Sharif Chowdhury
Md. Fazlul Karim Md. Obaydul Islam Mahbub Hasan
Muhammad Mahmoodul Haque Md. Mujahid Khalid Md. Asif Chowdhury
S. M. Jaffar Majibur Rahman Md. Fazlur Rahman
Mohammed Zubair Wafa Md. Zakir Hossain Bhuiya Md. Hashim Uddin
Md. Soheb Ahmed Md. Lokmanur Rahman
Principal M. A. S. Jalal Azad Ashraf Hossain
Md. Nurul Islam Khalifa Md. Masudur Rahman Jashim Ahmed Chy
Mohammad Azam Mohammad Ullah
Executive Vice President Md. Sanaullah Md. Azmal Hoque
Md. Nadim Md. Aminur Rahman Md. Abdul Mannan Akhand
Syed Masodul Bari Md. Nizamul Hoque Chy. S. M. Zabidul Haque
Md. Atiqur Rahman Md. Rajibul Islam Bhuiyan Md. Ferdous Hassan
Md. Mujibul Quader Md. Yahya Jalal Ahmed
Abed Ahmed Khan Md. Azharul Islam Md. Majiber Rahman
M. Tariqul Islam Md. Zahidul Islam Md. Nazrul Islam
Md. Abdullah Al- Mamun Md. Mostafizur Rahman Md. Jahangir Alam
Md. Abdur Rahim Duary Md. Nazmul Huda Md. Nahid Hossain
Manir Ahmad Md. Shamsul Huda Babar
Md. Manjur Hasan Vice President Md. Salamat Ullah
Md. Mahmudur Rahman A. K. M. Sazzad Hossain Md. Kabir Ahamed
Md. Abdur Rahim Sarder Touhid Siddique
Senior Vice President Md. Mizanur Rahman Md. Abdul Mobin
A. N. M. Mofidul Islam Md. Sultan Mahmud Jahangir Alam
Engineer Md. Habib Ullah Monir Ahammad Md. Shahjahan
A. K. M. Amzad Hossain Md. Showkat Islam Jalal Ahmad
Md. Monjurul Alam Md. Abul Kalam Md. Abdur Rahim Khan
Md. Aminul Islam Bhy. C. G. M. Asaduzzaman Md. Zahurul Hoque
Md. Mujibur Rahman Md. Hedayeatul Islam Mirza Mohidul Islam
A. T. M. Mostafizur Rahman Md. Shah Jalal Sheikh Khondoker Monirul Hoque
Md. Sharif Uddin Pramanik Md. Zakir Hossain Md. Rafiqul Islam
S. M. Kowsar Md. Aminul Islam Ashik Ahmed Siddikey
Iqbal Hossain Ahmed Masudur Rahman Khalifa Imroz Chowdhury
Mohammed Hossain Md. Monir Hossain Md. Shamsul Kabir
S. M. Abu Jafar M. M. Saiful, Islam Md. Alamgir
Md. Mahboob Ghani Huq Kamal Hossain Md. Aminur Rahman
10
 Management
Team

Md. Shafi Mahmood Syed Taslim Alam Md. Asadur Rahman Khan
Md. Nazim Uddin Md. Delowar Hossain Md. Abu Bakar Siddique
Mahbubul Amin Md. Shamsul Areafin
Assistant Vice President Md. Ashiqur Rahman Md. Kutub Uddin
Md. Ziaul Karim Chow. Md. Abul Hossain Md. Monirul Islam Bhuiyan
Md. Asaduzzaman Khan Md. Abdur Rahim Sarder Syed Saleh Ahmed
Md. Zahid Hasan Md. Yusuf Sharif Mostaque Ahmed Khandaker
Md. Mahbubul Hoque Md. Golam Quddus Talukder Saiful Islam
A. K. M. Fokhrul Islam Md. Abul Hossain Saju A. K. M. Anwarul Haque
Abdul Malek Md. Humayun Kabir Sardar Md. Zahurul Islam Patwary
Md. Rafiqul Islam Md. Mujibur Rahman Md. Masud Parves
Md. Mizanur Rahman Md. Momtazul Hoque Md. Ali Farhad
A. M. M. Arif Billah Mithu Md. Golam Arfin Md. Mahbubur Rahman
Md. Shah Alam Md. Zamshed Hossain Sarker Munshi Sanaur Rahman
Md. Moklesur Rahman Khan Md. Mushfiqur Rahman Md. Ziaul Haque Malik
M. M. Shamsul Alam Md. Maniruzzaman Md. Bashir Uddin
Md. Abu Hanif Md. Akber Hussain Md. Syful Islam
H. M. Zakir Khan Md. Maynal Hossain Md. Anisul Islam Mahmud
Md. Nurul Karim Syed Ariful Bari Md. Imran Miah
Md. Kamruzzaman Md. Shakhawat Ullah Md.Shahidul Islam
Khandaker Nazmul Islam Mollah Khalilur Rahman Md. Zahirul Haque
Md. Amjad Hossain Md. Mijanur Rahman A. K. M. Tusher
Sharif Golam Kawsar Md. Ismail Hossain A. K. M. Ariful Islam
Motahar Uddin Ahmed Gazi Abdur Rahman Aminy Md. Saiful Islam
Mohd. Salahuddin Mamun Md. Towhidul Islam Shakhawat Hossain
Md. Ashaduszzaman Md. Abdur Rahman Bhy. Md. Shahidul Islam
Md. Kamrul Islam Ahamuduzzaman Humayun Kabir
Nur Mahbub Khan Sk. Abdur Rahman Md. Iqbal Hossain
Kazi Mohammad Sadik Md. Anwarul Quader Chy. Syed Monirul Haque
Md. Anowarul Alim Khan Md. Moinul Haque Mohammed Abul Kashem
Md. Jamal Uddin Mahmud Nashir Ahmed Md. Mohiuddin Khan Azad
Md. Zahid Hossain Md. Taslim Hossain Md. Basirul Islam
A. S. M. Gouch Uddin Siddiquee M. Mohiuddin Sharifi A. K. Md. Rezwan Mohiuddin
Shahadat Ali Md. Eleaus M. M. Rafikul Islam
Md. Mustafizur Rahman Md. Humayun Kabir Md. Mustahidul Bashar
Md. Mustaque Ahamed Mollah Md. Zakir Miah Md. Khairul Alom
Md. Kamrul Islam Md. Wares Uddin Mahmud Md. Mizanur Rahman Bhuiyan
Md. Alauddin Md. Rafiqul Islam
Syed Ariful Islam Mohammed Ishaque
Md. Enayet Fakir K. M. Shahadat Husain
11
Vision, Mission &
Commitments

Vision
• To be a pioneer in Islami Banking in Bangladesh and contribute significantly to the growth of the
national economy.

Mission
• Achieving the satisfaction of Almighty Allah both here & hereafter.
• Proliferation of Shariah Based Banking Practices.
• Quality financial services adopting the latest technology.
• Fast and efficient customer service.
• Maintaining high standard of business ethics.
• Balanced growth.
• Steady & competitive return on shareholders’ equity.
• Innovative banking at a competitive price.
• Attract and retain quality human resources.
• Extending competitive compensation packages to the employees.
• Firm commitment to the growth of national economy.
• Involving more in Micro and SME financing.

Commitments
• Ours is a customer focused modern Islamic Banking making sound and steady growth in both
mobilizing deposit and making quality Investment to keep our position as a leading Islami Bank in
Bangladesh.
• To deliver financial services with the touch of our heart to retail, small and medium scale enterprises,
as well as corporate clients through our branches across the country.
• Our business initiatives are designed to match the changing trade industrial needs of the clients. 12
 Corporate
Information

Date of Registration 18 June, 1995

1st Branch Motijheel Branch, Dhaka

Opening Ceremony 27 September, 1995

Authorized Capital 15,000.00 Million

Paid-up Capital 9, 943.06 Million

Local Partnership of Capital 100%

Equity 22,520.68 Million

Number of Branches 154

Deposit 244,806.26 Million

Investment 235,905.23 Million

Number of Employees 3,446

Number of Shareholders 30,386

Honorable Chairman, Directors & Managing Director of AIBL are seen on the dais at the 22nd Annual General Meeting
13
Corporate
Information

Auditors
HODA VASI CHOWDHURY & CO.
Chartered Accountants
BTMC Bhaban (8th Level)
7-9 Kawran Bazar C/A
Dhaka- 1000

RAHMAN MOSTAFA ALAM & CO.

Chartered Accountants
Paramount Heights (7th Floor D2,C1 & A)
65/2/1 Box Culvert Road
Purana Polton ,Dhaka- 1000

Company Secretary
Md. Mahmudur Rahman

Registered Office
Al-Arafah Tower,
63, Purana Paltan,
Dhaka-1000.
Tel : +88-02-44850005,PABX:44850005-20 ,SWIFT : ALARBDDH
E-mail : [email protected]
Web : www.al-arafahbank.com

A section of the honorable Shareholders attending the 22nd Annual General Meeting of the Bank
14
 NOTICE OF THE 23rd ANNUAL GENERAL MEETING (AGM)
Notice is hereby given that the 23rd Annual General Meeting of the Shareholders of Al-Arafah Islami Bank Limited will be
held on Thursday the 24th May, 2018 at 11.30 a.m. at “Own Premises, 63/1, Purana Paltan (Beside of Al-Arafah Tower),
Dhaka-1000” to transact the following businesses:

AGENDA
1.
To receive, consider and adopt the Audited Financial Statements of the Company for the year ended
December 31, 2017 along with the Reports of the Directors’ and the Auditors’ thereon.
2. To declare Dividend for the year ended December 31, 2017 as recommended by the Board of Directors.
3. To appoint auditors of the company for the term until the next Annual General Meeting and to fix their remuneration.
4. To elect/re-elect/confirm Directors
5. To transact any other business with the permission of the chair
All Hon’ble Shareholders of the company are requested to make it convenient to attend the meeting in time.

By order of the Board

(Md.Mahmudur Rahman)
EVP & Company Secretary
Date: Dhaka
9th April, 2018
Phone: +880-2-44850027

NOTES:
1. Shareholders whose names appear in the Register of members as at the close of business on the ‘’Record
Date’’ i.e. 3rd May, 2018 will be eligible to attend the Annual General Meeting (AGM) and vote there at.
2. A member will be eligible to attend and vote at the Annual General Meeting (AGM) may appoint a proxy to
attend and vote on his/her behalf. Proxy Form duly stamped must be submitted at the Registered Office of
the Company not later than 48 hours before the time of holding the meeting;
3. The Shareholders, who are interested to put questions, are requested to send the same to the Share
Department (Level-04), 63, Purana Paltan, Dhaka-1000 before 7 days of AGM.
4. Attendance of the Members/Shareholders/Attorney/Proxy’s will be recorded up to 11.30 A.M. at the
Registration Counter on the day of the meeting;
5. Election rules and schedule thereto will be available at the Share Department (Level-04), 63, Purana Paltan,
Dhaka-1000

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15
5 Year Financial Highlights Taka in million
Particulars 2013 2014 2015 2016 2017 Growth %
Income Statement
Investment Income 17,966.32 19,725.91 18,568.00 18,830.15 20,491.03 8.82
Profit paid on Deposit 12,107.71 12,616.77 11,073.01 9,957.73 11,784.20 18.34
Net Investment Income 5,858.61 7,109.14 7,494.99 8,872.42 8,706.83 (1.87)
Non Investment Income 1,757.09 2,485.88 2,511.94 2,791.54 3,557.36 27.43
Non Investment Expenses 2,667.14 3,261.57 3,646.78 4,152.93 5,308.42 27.82
Net Non Investment Income (910.05) (775.69) (1,134.84) (1,361.39) (1,751.06) 28.62
Profit Before Tax & Provision 4,948.56 6,333.45 6,360.15 7,511.03 6,955.77 (7.39)
Provision For Investment 588.15 1,846.86 1,796.68 1,547.87 1,354.89 (12.47)
Profit Before Tax 4,360.41 4,486.59 4,563.47 5,963.16 5,600.88 (6.08)
Provision For Tax (including Deferred Tax) 2,083.73 2,161.64 2,097.59 2,613.76 2,431.38 (6.98)
Profit After Tax 2,276.68 2,324.95 2,465.88 3,349.40 3,169.50 (5.37)
Balance Sheet v
Authorized Capital 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 -
Paid up Capital 8,343.25 9,469.58 9,469.58 9,943.06 9,943.06 -
Reserve Funds & Other Reserve 4,827.20 5,620.87 6,432.32 7,468.16 8,556.96 14.58
Shareholders’ Equity (Capital & Reserve) 16,091.17 18,159.52 19,236.07 21,337.48 22,520.68 5.55
Deposits 140,980.55 166,851.17 169,887.08 199,703.92 244,806.26 22.58
Investment 125,715.39 146,740.37 162,503.14 196,519.38 235,905.23 20.04
Investment in Shares & Securities 7,138.93 9,120.90 8,851.13 9,058.68 10,145.49 12.00
Fixed Assets 2,517.22 2,661.11 3,057.38 3,240.18 3,260.38 0.62
Total Assets (Excluding off-balance sheet items) 173,161.63 210,439.01 229,106.66 272,900.04 319,255.29 16.99
Foreign Exchange Business
Import Business 85,915.00 101,244.70 107,049.80 118,786.60 156,700.00 31.92
Export Business 68,980.30 75,843.90 79,362.90 88,152.20 104,540.00 18.59
Guarantee Business 2,006.61 3,365.27 4,471.41 4,981.34 6,443.41 29.35
Inward Foreign Remittance 7,042.50 8,541.10 9,498.00 11,735.40 20,700.00 76.39
Capital Measures
Core Capital (Tier-l) 15,113.62 17,181.97 18,244.48 20,359.39 21,540.30 5.80
Supplementary Capital (Tier-ll) 1,511.75 1,732.06 4,828.03 5,095.97 5,488.97 7.71
Tier-l Capital Ratio 13.33 12.74 13.17 11.92 10.40 (12.74)
Tier-ll Capital Ratio 1.33 1.28 3.48 2.98 2.66 (10.84)
Total Capital 16,625.37 18,914.03 23,072.51 25,455.36 27,029.27 6.18
Total Capital Ratio 14.66 14.03 16.65 14.91 13.06 (12.43)
Investment Quality
Volume of Non-Performing investment 3,598.83 6,982.60 7,713.67 8,994.98 9,921.51 10.30
% of NPIs to Total investment 2.77 4.50 4.66 4.54 4.10 (9.69)
Provision for Unclassified investment 749.60 938.27 1,090.27 1,352.83 1,723.04 27.37
Provision for Classified investment 1,128.03 1,518.78 2,100.27 2,586.67 3,096.15 19.70
Provision for Off Balance sheet Exposures 273.37 305.01 346.75 449.88 570.42 26.79
Share Information
Number of Shares Outstanding 834,324,671 946,958,503 946,958,503 994,306,428 994,306,428 -
Earning per Share (Taka) 2.46 2.20 2.25 3.07 3.15 2.66
Book Value per Share (Taka) 19.29 19.18 20.31 21.46 20.88 (2.71)
Market Price per Share (Taka) 19.10 14.90 14.70 15.90 24.10 51.57
Price Earning Ratio (Times) 7.76 6.77 6.53 5.18 7.64 47.64
Price Equity Ratio (Times) 0.99 0.78 0.72 0.74 1.15 55.79
Dividend per Share
Cash Dividend (%) 14.00 10.00 20.00 15.00 (5.00)
Bonus Share 13.50 - 5.00 - 5.00 -
Operating Performance Ratio
Net Profit Margin% 5.70 5.88 4.91 4.60 3.87 (0.72)
Investment /Deposit Ratio 88.74 84.58 88.59 88.50 89.95 1.45
Return on Equity (ROE)% 14.15 12.80 12.82 15.70 14.07 (1.62)
Return on Assets (ROA)% 1.31 1.10 1.08 1.23 0.99 (0.23)
Cost of fund % 11.02 10.85 9.18 7.92 7.50 (0.42)
Cost/Income ratio in operating business (%) 35.02 33.99 36.44 35.60 43.28 7.68
Other Information
Number of Branches 110 119 129 140 154 10.00
Number of Employees 2,387 2,649 2,810 3,070 3,446 12.25
Number of Shareholders 58,466 52,007 44,427 36,695 30,386 (17.19)
16
 Economic
Impact Report

Economic impact can be defined as any increase or decrease in productive potential of an economy.
By analyzing the economic impact we can understand how a bank adds value to the society.
Economic impacts can be broadly categorized as:

i) Direct Impact
ii) Indirect Impact

Direct Impact
Direct impacts are the immediate economic effects resulting from the banks financial transactions.
Bank’s direct contribution to the economy resulted in the creation of employment opportunities,
payment of tax to the government and maximization of shareholders wealth.

Indirect Impact
Indirect impacts are the spill over economic effects that occur through Bank’s normal course of
operations. Banks generate indirect impact by addressing the deficiency of capital in the economy
by mobilizing deposit and channelizing the same to prospective investors.

Through catering financial services, the Bank helped distribute the wealth among all the stakeholders
for example shareholders received dividend, depositors and investors got profit, employees
received compensation and other benefits, the under privileged reaped benefits out of CSR while
the government earned tax revenue.

In 2017, total value added by AIBL was BDT 9,430.52 million as against BDT 8,631.57 million in 2016.
Bank’s direct contribution to the economy was BDT 2,431.38 million in the form of corporate income
tax. The Bank distributed BDT 3,587.79 million for its total 3,446 officials in 2017 as against that of
BDT 2,705.24 million for 3,070 in 2016.

At the end of 2017, the Bank mobilized total deposits of BDT 244,806.26 million and aided the
economy in meeting its growth target by deploying BDT 235,905.23 million as investment to
different sectors of the economy. Apart from these, the Bank performed significant import and
export business.
17
Value Added
Statement

Value added is a measure of wealth created by the Bank through various business activities. The
statement of value added shows the total wealth created and how it was distributed among
stakeholders, including the Government, employees and shareholders.

(BDT in Million)
Particulars 2017 2016
Income from Banking Service 24,048.39 21,621.69
Cost of Services & Supplies (13,262.98) (11,442.25)
Value added by Banking Services 10,785.41 10,179.44
Provision for Investment & Off balance Sheet Items (1,354.89) (1,547.87)
Total Value Addition 9,430.52 8,631.57
Value Distributed
To Employees 3,587.79 2,705.24
To Statutory Reserve 1,086.49 1,049.36
To Government as Income Tax 2,431.38 2,613.76
Depreciation 276.67 259.18
Retained Earnings 2,048.19 2,004.03
Total Value Distributed 9,430.52 8,631.57

18
 Economic Value
Added Statement

Economic Value Added (EVA) indicates the true economic profit of the company. EVA is an estimate of
the amount by which earnings exceed or fall short of the required minimum return for shareholders
at comparable risk. EVA of the Bank stood at BDT 2,535.78 million as on 31 December 2017 as
against that of BDT 2,908.66 million in 2016

(BDT in million)
Particulars 2017 2016
Shareholders’ Equity 22,520.68 21,337.48
Total Income 24,048.39 21,621.69
Total Expenses (17,092.62) (14,110.66)
Corporate Tax (2,431.38) (2,613.76)
Capital charge (1,988.61) (1,988.61)
Economic value Addition 2,535.78 2,908.66

* Capital Charges = Paid up capital X percentage of Dividend

19
Market Value
Added Statement

Market Value Added (MVA) is the difference between the equity market value of the company and
the book value of equity invested in that company. Market Value Added Statement indicates how
much wealth has been created for the capital providers in a particular period of time. A high market
value addition indicates that the company has created substantial wealth for the equity holders.

(BDT in million)
Particulars 2017 2016
Market value of Total Equity 28,755.34 18,971.37
Book value of Total Equity 22,520.68 21,379.12
Market value Addition 6,234.66 (2,407.75)

Donation to the Honorable Prime Minister’s Fund under Corporate Social Responsibility (CSR)
20
Chairman’s
Address

Bismillahir Rahmanir Rahim Overall Performance

All praise be to the Almighty Allah, Lord of the Universe By the grace of Almighty Allah (SWT) Al-Arafah Islami Bank
and peace and blessings of Allah be upon the Prophet has overcome the challenges of 2017 and made satisfactory
Mohammad (SM) and his descendants & companions. profit and growth in most of the areas of business. The Bank
Dear Shareholders took a strategy of quality growth of its assets by adhering
to compliance in all spheres of operation particularly in
Assalamu Alaikum Wa Rahmatullahi Wa Barakatuh. respect of Shari’ah and regulatory laws and guidelines. As a
It is my great pleasure to welcome you all to the 23rd continued policy, the Bank remained focused in all the key
Annual General Meeting of the Shareholders of the Bank. areas covering capital adequacy, good asset quality, sound
On behalf of the Board of Directors and myself, I would like management, good earnings and strong liquidity.
to express my heartfelt thanks and profound gratitude to all The Bank’s operating profit stood at Tk. 6,955.77 million
of you for your continuous support and guidance to run the during the year an decrease by Tk. 555.26 million over the
Bank. Alhamdulillah, we have successfully closed the books previous year. The return on equity recorded at 14.07% while
& accounts of the company for the year 2017. earnings per share (EPS) stood at Tk. 3.15.
All of us know that due to some unavoidable circumstances, Total assets of the Bank rose to Tk 319,255.29 million during
the business in the year 2017 was not good enough for any of the year showing a growth of 16.99% over the previous year.
the banks and financial institutions in the country. In spite of
that we have achieved all business targets for the year 2017. Deposits of the Bank stood at Tk. 244,806.26 million
increased by Tk. 45,102.34 million during 2017 and growth
As trusted by you with the great responsibility to take care rate 22.58%.
of this institution, the Board of Directors is always keen
and active to take actions in favour of the Bank. This year Our Bank always maintained investment-Deposit Ratio (IDR)
we are focusing on developing the quality of our human at required level throughout the year and thus the Bank
resources, increasing the amount of low cost deposit which maintained its risk free liquidity ensuring maximum earnings
will ultimately enhance the deposit mix and also on the SME from the deployed fund.
sectors. We are concentrating to make our human resources We have tried our best to make investment maintaining
more capable and technologically developed so that they its quality and ensuring well diversification to mitigate the
can cope with the changing environment and serve our potential risks. Investment portfolio of the Bank has grown
valued clients efficiently and effectively. by 20.04% during the year and thus the books of accounts
Sensing the upcoming threats and adverse business have showed a positive growth in our operating profit.
situation, I as the Chairman of the Board of Directors have Overdue investment stood at Tk.6,095.30 million as on 31st
strictly advised our Management to be cautious in all areas December 2017 as against Tk. 3,333.40 million as of December,
of business including quality of investments, recovery 31 last year. Total overdue increased by Tk. 2,761.90 million
process as well as overhead expenses. during the year 2017 bringing the same to 2.52% of our total
Trusting upon Almighty Allah, believing our Shareholders investment as against 1.68% in the previous year. Corporate
confidence on us and knowing our abilities to achieve the Branch Manager, Zonal Head and Branch manager are advised
goal, I have declared the year, the year when we start our for adopting strategies to arrest the situations.
mission, to be “The Best Islami Bank” in the country. I believe Rescheduled investment increased by Tk. 1,492.30 million
with all our honesty, integrity, efficiency and most of all from Tk. 7,718.20 million to Tk. 9,210.50 million (Term
with our strictness to comply with Shari’ah and Regulatory Tk. 3,527.90 million + Continuous & Demand Tk. 5,682.60
directions in every point, Insha Allah we shall be able to million) which was 3.81% of total Investment. Recovery
reach our goal to be recognized as the best Islamic Bank in against rescheduled investment during the year 2017 was
Bangladesh. Tk. 1,389.60 million.
22
 Classified investment increased by Tk. 926.53 million from Tk. During the year 2017 the company earned Operating Profit
8,994.98 million to Tk. 9,921.51 million representing 4.10% of (Before provision for investment & taxation) of Tk.11.06
total investment as against 4.54% in the previous year. Million with Earning per Share (EPS) Tk.0.12.
During the year 2017, recovery against classified investment Millennium Information Solution Limited
stood at Tk. 2,320.00 million while recovery against SMA was Al-Arafah Islami Bank Ltd. owned 51% shares of Millennium
Tk. 2,300.00 million and against Written off Tk. 321.20 million Information Solution Limited a subsidiary company of Al-Arafah
building a total recovery of Tk. 4,941.20 million including
recovery Tk. 1,389.60 million from rescheduled investment.. Islami Bank Limited Millennium Information Solution Limited,
a private limited Company was incorporated in Bangladesh
SME & Retail Banking under the companies’ act 1994 on February 11, 2001. The
Our Bank is now focusing on investment to SME and Retail main objective of company is to carry on activities relating
sector in line with the policies and guidelines of Bangladesh to developing software products and providing maintenance
Bank. During the year we have achieved above 101% of our and support services both the domestic and international
set target in this area by providing investment to major three clients. Over the years, MILS has established itself as the
categories of enterprises viz. Industry, Trade and Services. leading software developer, implementation and service
Off-Shore Banking Unit (OBU) provisioning company in Bangladesh which adheres to the
rules of Islamic Shariah.
Our best efforts had been being continued since 2012 to
obtain permission from Bangladesh Bank for introducing During the year 2017 the company earned Net Income before
Off-Shore Banking Unit (OBU) in our Bank. The necessary Tax Tk. 12.41 Million with Earning per Share (EPS) Tk.0.59.
formalities, in this regard, were also done earlier. Finally, we AIBL Asset Management Co. Ltd.
got approval of Bangladesh Bank to operate one Off-Shore Another subsidiary company in the name of AIBL Asset
Banking Unit (OBU) at Motijheel Branch, Dhaka. Operations Management Co. Ltd. has already been incorporated with
of the Unit have already been started. Authorized Capital of Tk. 500 million and Paid up Capital of Tk.
Risk Mitigation 100 million to carry out the business of Asset Management,
Risk-taking is an inherent element of the banking business Portfolio Management, Capital Market Operation and other
and indeed profit is the reward for successful risk taking i.e. financial services. The shareholding ratio of AIBL and its
mitigating the risk to a tolerable limit. Considering the above, another subsidiary AIBL Capital Market Services Limited is 9:1.
Bangladesh Bank has issued necessary guidelines to all the We hope that the company will start its functioning very soon.
scheduled banks and in line with that guideline we have Concluding Appreciation
taken necessary steps and measures including establishment We would now like to extend our sincere thanks and
of a separate division with skilled manpower. appreciation to all the regulatory authorities, our depositors,
Subsidiary Companies investment clients, Shareholders and all other Stakeholders
As part of diversification of our business, we have established for their unbound confidence.
the following 4 (Four) subsidiary companies, in addition to Our deepest gratitude to our fellow Board Members,
our normal banking business: members of the Shari’ah Supervisory Committee, all the
AIBL Capital Market Services Limited Bank officials for their continuous and consistent support,
encouragement, wisdom, input, guidance for development
AIBL Capital Market Services Limited was incorporated as and progress.
subsidiary company of Al-Arafah Islami Bank Limited with an
authorized capital of Tk. 10 billion and paid-up capital of Tk. Finally, we would like to offer our whole hearted commitment
4 billion of which AIBL holding is 60.50%. The main objectives that we are accountable to Almighty Allah (SWT) and
of the company are to carry out the business of Stock Broker answerable to our Stakeholders and to the people of our
and Dealer in the Capital Market. During the year 2017 beloved country.
the company earned Operating Profit (Before provision for May Allah the Almighty bestow his bountiful blessings upon
investment & taxation) of Tk 229.23 million with Earning per us all.
Share (EPS) Tk.0.19.
AIBL Capital Management Limited Allah Hafiz
AIBL Capital Management Limited, a subsidiary company
of Al-Arafah Islami Bank Limited, was incorporated with Ma-assalam
an authorized capital of Tk. 2 billion and paid-up capital of Sincerely,
Tk. 500 million. The main objectives of the company are to
carry out the business of Merchant Banking in all its aspects
including Issue Management (IPO, Right Share Issue, Bond
Issue etc.), Portfolio Management, Underwriting, Corporate Alhaj Abdus Samad Labu
Advisory Services, Pre-IPO Placement, Investment Analysis Chairman
and Research etc. Date: 24th May 2018
23
Managing
Director’s
Address

BismillahirRahmanir Rahim Bangladesh Economy

At the very outset, we express our deep sense of gratitude to Bangladesh Bureau of Statistics (BBS) has estimated the GDP
Almighty Allah (SWT), the Lord, and the Merciful for granting growth at 7.24 per cent in FY17, which exceeds the official
us a good result in overall business performance of the Bank target of 7.20 per cent by 0.04 percentage point. Compared
during the challenging year 2017. to many other developing countries, the 7.24 per cent GDP
Respected Shareholders, growth achieved by Bangladesh is quite impressive, but
still the realized growth remains below the country’s true
Assalamu Alaikum Wa Rahmatullahi Wa Barakatuh. potential.
It is my great pleasure and opportunity to present the Inadequate infrastructure, shortage of power and energy,
performance and future aspirations of your esteemed Bank. weak investment climate, and lack of consistency in policy
At the beginning I would like to convey my heartfelt gratitude and regulatory framework are now major impediments to
to Bangladesh Bank for their time-befitting policies, guidance the country’s development. These impediments must be
and supports. Now, I would like to express my sincere thanks removed to restore the confidence of the country’s business
to the valued stakeholders for their endless support in and investor community.
the Bank’s continued success. I take this chance to thank
the members of the Board and Management of the Bank Based on the IMF’s World Economic Outlook, released in
for extending me and my predecessor the opportunity to April 2017, the GDP of Bangladesh in PPP terms will cross
steer toward the Bank’s mission and vision. I also place my US$1,000 billion and the country will be ranked 30th largest
appreciation of the dedicated and committed service put in economy of the world in 2022, which is 32nd in 2017. On
by all the officials of the Bank. nominal GDP basis, Bangladesh will be the 38th largest
economy in 2022 as against 45th now.
World Economy
In terms of US Dollar, the value of GDP in current market
Global economic activity is picking up with a long-awaited prices increased by 12.36 per cent to US$248,767 million in
cyclical recovery in investment, manufacturing, and trade, FY17 from US$221,396 million in the previous year.
according to World Economic Outlook. World growth is
expected to rise from 3.1 percent in 2016 to 3.5 percent in Per capita GDP stood at US$1,538 in FY17, compared to
2017 and 3.6 percent in 2018. US$1,385 in FY16, showing an increase of 11.05 per cent.
The general point-to-point inflation came down to 5.44 per
Stronger activity, expectations of more robust global cent in FY17 from 5.92 per cent in FY16. Between end-June
demand, reduced deflationary pressures, and optimistic of 2016 and 2017, the Taka depreciated by 2.80 per cent in
financial markets are all upside developments. But structural terms of US dollar. Gross foreign exchange reserves rose to
impediments to a stronger recovery and a balance of risks US$33.407 billion in the last working day of FY17 (29 June
that remains tilted to the downside, especially over the 2017).The amount was sufficient to cover the country’s
medium term, remain important challenges. import bills for more than nine months.
With persistent structural problems such as low productivity Overall Banking Scenario
growth and high income inequality pressures for inward-
looking policies are increasing in advanced economies. These Banks’ Deposits: Total Deposits (excluding interbank items)
threaten global economic integration and the cooperative of the scheduled banks increased by Tk. 1,042,712.30
global economic order that has served the world economy, million representing 12.10% point to point growth from
especially emerging market and developing economies, well. Tk. 8,617,456.70 million as on 31 December 2016 to Tk.
Against this backdrop, economic policies have an important 9,660,169.0 million as on 31 December 2017.
role to play in staving off downside risks and securing the Islamic Banks’ Deposits: All Islamic Banks’ Deposits stood
recovery, and a renewed multilateral effort is also needed to at TK 2,070,130.00 million during the year 2017 as against
tackle common challenges in an integrated global economy. Tk. 1,722,148.90 million in the previous year 2016 and the
24
 deposits increased by Tk. 347,981.10 million registering Mix of the Bankis shown below:
growth of 20.21% in 2017.The share of Islamic Banks’ Achievement Targeted
Deposits as of 31December 2017 stood at 21.43% as
compared to 19.98% as of 31 December 2016. Deposit Mix 2017 2018
Banks’Advances/ Investment: Total Advances/ Investments Cost Free Deposit 10.10% 12.00%
(excluding bills) of the scheduled banks increased by Tk. Low cost Deposit 28.89% 30.00%
848,522.20 million representing 13.50% point to point High Deposit 61.01% 58.00%
growth from Tk 6,285,349.90 million as on 31 December
Total 100.00% 100.00%
2016 to Tk. 7,133,872.10 million as on 31 December 2017.
Islamic Banks’ Investments: All Islamic Banks’ Investments Plan and Strategies for Deposit Mobilization:
stood at TK 1,912,290.00 million during the year 2017 as Our plan and strategies for mobilizing deposits are given
against Tk.1,693,873.80 million in the previous year 2016 below, which shall be followed meticulously by all concerned:
and the deposits increased by Tk. 218,416.20 million • Deposit shall be mobilized giving due importance
registering growth of 12.89% in 2017. The share of Islamic to deposit mix. In the year 2018, Branches should
Banks’ Investments as of 31 December 2017 stood at 26.95% maintain deposit mix of at least 12% cost free, 30% low
as compared to 26.81% as of 31 December 2016. cost and 58%high cost of their total deposit.
Operating Profit: Banks in Bangladesh managed to log in • To increase the cost free and low cost deposit,the
profits for 2017 despite a tough start to the year 2017. The following strategies may be adopted:
growth of profit was slim owing to low credit/investment
- Better customer service shall be ensured.
demand, cautious lending/ investment policy, lowering
lending/ investment profit rates and the sluggish business - Good business relationship with all the local
environment. industrialist, businessmen, professionals etc. shall be
maintained.
In this situation, Islami Bank Bangladesh Limited registered
the highest profit in the top in 2017. The listed second - For bringing stability, private/personal deposits shall be
highest National Bank Limited and Al-Arafah Bank logged encouraged.
in placed 5th position in 2017 while its position was 7th in - Activities of School Banking shall strengthen.
2016. Among the Islamic Bank, Al-Arafah stood 2nd position.
- Opening of big Corporate Client Account shaving high
Deposits and Borrowings volume transactions.
The total deposit and Borrowingsof the bank reached - Induction of Clients having large Foreign Exchange
Tk.277,024.94 million recording 118.39% achievement of Portfolio so that cost free deposit i.e.margin account,
Target Tk.234,000.00 million as on 31December 2017 as FC held etc. may be maintained.
against Tk.224,788.57 million at 31st December 2016. The
- Opening of more FC Accounts to keep morecurrent
deposits and Borrowings increased by Tk. 52,236.37 million
account balance.
registering growth of 23.24% in 2017 as against national
growth of 12.10%. Our deposit target for the year 2018 has - Expedite Opening of more Current, Savings and SND
been fixed at Tk.315,000.00 million expecting growth of Accounts.
17.00%. - Encourage to open collection accounts ofdifferent
Major Business Ratios service oriented institutions like DPDC, DESCO, PDB,
NGO, School, College, University, Titas, Bakhrabad,
Major comparative business ratios i.e.Yield on Investment,
Mosque, Madrasah etc.
Cost of Deposit & Borrowings Spread, Cost of Admin, Cost of
Fund, Non-Funded Income and Net Spread for the year 2016 Investments
& 2017 are appended below: Total gross investments of the bank stood at Tk.241,961.78
million recording 103.40% achievement of Target
Particulars 2016 2017 Tk.234,000.00 million as on 31st December 2017 as against
Yield on Investment 9.80% 8.75% Tk. 198,250.00 million on the same day of previous year
Cost of Deposit & Borrowings 5.83% 5.28% 2016. The investments increased by Tk.43,711.78 million
recording 22.05% growth in 2017. The target for investment
Spread 3.97% 3.47%
for the year 2018 has been fixed at Tk.315,000.00million
Cost of Administration 2.10% 2.22% with anticipated growth of 17.00%.
Cost of Fund 7.93% 7.50% We expect that the branches will render their best efforts
Non- Funded Income 1.46% 1.62% to make quality investment complying Shariah principles and
Net Spread 3.33% 2.87% ensure constant follow upand supervision for maintaining
the quality and ensuring timely recovery.
Deposit Mix All concerned are advised to adopt the following policies and
Cost of Fund of the Bank depends on Deposit Mix. Deposit strategies for quality investments-
25
• To motivate the valued clients with satisfactory recording a growth of 28.93%.Target of International Trade
performance of other banks to route their business for the year 2018 has been fixed at Tk.358,150.00 million
through us with 27.00% growth.
• to boost up SME and Micro investment Import Business
• to encourage women entrepreneurs in allowing Total import business of the bank stood at Tk.156,700.00
investment million during the year 2017 as against Tk.118,786.60 million
• to encourage investment in the productive sectors and Tk.107,049.80 million in the previous year 2016 and
2015 respectively. Our import business increased by Tk.
• to prefer investment in development oriented, 37,913.40 million i.e. 31.92% growth in 2017 as compared
employment generating and poverty alleviation sectors to increases of Tk. 11,736.80 million i.e. 10.96% in 2016. Our
• to ensure diversification of investment portfolio by size, target for import business during the year 2018 has been
sector, economic purpose and geographical area for fixed at Tk. 203,700.00 million expecting growth of 30.00%.
minimizing risks of concentration as well as to ensure Export Business
equitable deployment of fund
Total Export business of the bank stood at Tk.104,540.00
• to make investment covered by adequate securities as million during the year 2017 as against Tk.88,152.20 million
stated in the norms of existing business discretionary and Tk.79,362.90 million in the previous year 2016 and 2015
powers respectively. Our export business increased by Tk. 16,387.80
• to change the nature, trend of investment depending million i.e. 18.59% growth in 2017 as compared to increases
on the economic activities of Tk.8,789.30 million i.e. 11.07% in 2016. Our target for
• to sanction investment ensuring proper appraisal as export business during the year 2018 has been fixed at
well as actual need of the client 20.00% higher to Tk. 125,450.00 million .
Operating Profit Remittance
The bank earned operating profit of Tk.6,955.77million Total remittance of the bank stood at Tk.20,700.00 million
during the year 2017. The operating profit of the Bank during the year 2017 as against Tk. 11,735.43 million in
during the year 2016 was Tk 7,511.03 million and thus the previous year 2016. Our remittance increased by Tk.
the Bank attained negative growth of 7.39% in respect 8,964.60 million i.e. 76.39% in 2017. The target for our
of operating profit. During this challenging year, it was remittance business during the year 2018 has been fixed at
unexpected to earn such a volume of profit. However, with Tk. 29,000.00 million with an anticipated growth of 40.00%.
the blessings of Almighty Allah (SWT), it was possible due to Treasury operations:
the prudent and timely decisions of the Policy Makers and Being an integrated unit, AIBL Treasury manage day to
quick implementation of such decisions by the Management day Liquidity in foreign currencies and Foreign Exchange
including constant view on fund management. However, Risks. Treasury Division, IBW engages foreign currency
considering all the situations, Operating Profit target for the Fund Management and ALM activities. Prudent ALM and
year 2018 has been fixed at Tk 8,100.00 million anticipating Foreign Exchange Operations however contribute significant
15.14% growth. profit and exchange earnings of the bank. In FX treasury,
Our plan and strategies for increasing operating profit are- we participate interbank market, conduct transaction with
• to ensure quality investment central bank and with Foreign Banks/FIs in need. We always
try to keep adherence within the laid down policies and
• to arrest non-performing investment
guidelines of the bank and regulatory bodies.
• to increase ancillary business
Year 2017 was a challenging year of Treasury in terms of
• to increase cash recovery from non performing managing FX Risk, Profit Rate Risk and Liquidity Risk of the
investment Bank in the sideways economic activities. The demand of
• to increase cash recovery from written of and BDT observed over the year although overnight borrowing
rescheduled investment. dependencies will be reflected in the yearend balance sheet
• to comply 100% Shariah principles so that no-income of some renowned banks. Liability pricing shifting up from
shall be considered doubtful. June and jumped in December this year for bringing IDR/ADR
within limits.
• to control expenditure
From January to December 2017 almost 5% BDT has
International Banking Wings depreciation from January to December 2017 and the
We are now more capable and confident to handle Foreign country has been suffering huge foreign exchange gap and
Exchange Business. Presently, we have 25 AD Branches running with large trade deficit. With the wave and ditch of
through which we have handled total foreign exchange market, Treasury Division of the bank tried to take maximum
business of Tk. 281,940.00 millionduring the year 2017 market opportunities.
as against Tk. 218,674.20 million in the previous year. Our We have earned a revenue of Tk. 1,234.00 million during
Foreign Exchange business increased by Tk.63,265.80 million 2017 as against 912.20 million in 2016 recording 35.28%
26
 growth though Treasury operation. FC was USD 43.26 million. As on 31.12.2017 total outstanding
(Amount in BDT million) UPAS was USD 107.19 million and under MDB FC was USD
Particulars 2016 2017 Growth as % 13.50 million and Foreign Currency borrowing for Off-Shore
Banking Unit was USD 76.99 million.
Exchange Gain 653.30 860.10 31.65%
Introduction of Shariah Based Products for Handling of
Rebate Income (Rebate sharing 76.60 90.00 17.49% Import & Export Business:-
by FI Correspondents)
Export Products
Income from placement to OBU 182.30 283.90 55.73%
& EDF Musharaka Documentary Bill (MDB in BDT):
Total Income 912.20 1,234.00 35.28% Inland post export facility was allowed only under QIBP
mode before 2014.The Musharaka Documentary Bill (MDB)
Our local Treasury operations it’s functioned to ensure mode has been introduced and now investment is parallelly
efficient fund management to maintain CRR & SLR matching made under Shariah based MDB mode.
with total Deposit flow & Investment requirements of the MDB (FC):
bank along with the growth targets of the bank. While
Foreign Treasury remained active throughout the year No export finance in the form of F/C was allowed before
2017 for utilizing available F.C fund, exploring interbank and 2014. The AD Branches are now also allowing export finance
overseas markets to meet up the extended demand against under Musharaka Documentary Bill (MDB-FC) against
off-balance sheet commitments and Off-shore Banking Deemed Export by borrowing fund from OBU.
Unit. Moreover, Treasury Division of the Bank kept itself Murabaha Foreign Currency Investment (MFCI) Product;
competitive throughout the year in terms of provisional The product Named ‘Murabaha Foreign Currency Investment’
deposit rates, rate of return of investment, exchange rate (MFCI) has been introduced for allowing investment in F/C.
and diversified Treasury products. Now we are allowing facilities under EDF under MFCI mode.
Foreign Trade Processing: Mudaraba Foreign Currency Deposit (MFCD) A/C
There was no Centralized processing Hub in the bank before
AD branches are maintaining “Exporters FC A/C” after
2014 and then all Foreign Exchange related products were
disbursement of MDB FC under this Account. Export
processed at branch level.IBW has setup its long desired
Development Fund is also deposit under MFCD A/C.
Foreign Trade Processing Department (FTPD) and started
functioning since 2014. Professional Development Programs for Foreign Exchange
Officials:
FTPD got its focus to maintain proper relation with the
most esteemed correspondents. The division is doing major Under bank finance and close supervision till now 51 officials
portion of foreign trade business of the bank with limited of our bank are qualified as CDCS (Certified Documentary
manpower and ensures the cost effectiveness. As the cash Credit Specialist) from 2013 to 2017.
LC/back to back LCs are issued and all sorts SWIFT message SWIFT Sanctions Screening:
correspondence conduct from a single point it’s easy to
We have already implemented SWIFT Sanctions Screening
minimize the sanction risk and monitor other internal and
solution to our Core Banking Software for screening of all
external regulatory risk. Moreover FTPD check the general
incoming and outgoing transactions to minimize the AML/
ledger balancing regarding LC liability, bills liability and cash
CFT risks which has increased our acceptability and goodwill
security and very keen to ensure there is no mismatch at any
to our all correspondents home and abroad.
point of time along with this, FTPD is focusing that all relevant
charges are realized strictly as par Head office approval. By Our plan and Strategies for Foreign Exchange Business goal
this way FTPD is targeting to minimize the internal control for year 2018
and compliance risk and exposure to foreign exchange risk. • To diversify our import and export portfolio for
EDF Operations: minimizing potential risks
EDF operations are now benign handled under shariah Base • To ensure routing of all import and export business of
Restricted Mudarabah mode between AIBL & Bangladesh our clients through us
Bank and allowing investment to the client under Mudarabah • To induct best import and export clients from the
Foreign Currency Investment (MFCI). Meanwhile Bangladesh market
Bank also introduced online based EDF management software
• To boost up cash import business
for smooth handling of EDF application, disbursement and
repayment related works. In 2017, we have received EDF • To give special attention in remittance service at branch
fund from Bangladesh Bank for USD 125.36 million. level
Off-shore Banking Operation: • To maintain a progressive growth we have to enhance
Our Off-shore Banking Unit (OBU) has been performing its our capacity by acquiring professional and technical
operation at our Motijheel Branch since 2014. Total finance knowledge & skill.
under UPAS in 2017 was USD 186.92 million and under MDB • Introduce Remittance Software and Automation.
27
• Local and International marketing (Meeting, Remittance Tk.2,256.41 million during previous year. Our ancillary
Program, Remittance Fair, Overseas visit) business increased by Tk. 534.27 i.e. 23.68% in 2017. The
• Implementation of Sanction Screening for remittance target for our ancillary business during the year 2018 has
payment been fixed at Tk. 3,300.00 million with an anticipated growth
of 39.96%.
• Increase of Remittance Drawing Arrangement
As our objective is to cover ourentire Salaries andAllowances
Asset Quality out of ancillaryincome, we have no other alternative but
Overdue investment stood at Tk.6,095.30 million as on tomaximizeour ancillary business.
31st December 2017 as against Tk. 3,333.40 million as of Capital Adequacy
December, 31 last year. Total overdue increased by Tk.
2,761.90 million during the year 2017 bringing the same As per Bangladesh Bank requirement, Bank has to maintain
to 2.52% of our total investment as against 1.68% in the Capital of 11.25% of its Risk Weighted Assets or Tk.4,000.00
previous year. Corporate Branch Manager, Zonal Head million whichever is higher. Accordingly, we have maintained
andBranch manager are advised for adopting strategies to our capital with full compliance. As on 31.12.2017 our Eligible
arrest the situations. Capital (solo) stood at Tk. 25,104.77 million December 2017
as against Tk. 23,704.16 million in December 2016 and Tk.
Rescheduled investment increased by Tk. 1,492.30 million 21,342.97 million in December 2015, Tk. 17,352.60 million in
from Tk. 7,718.20 million to Tk. 9,210.50 million (Term Tk. 2014 and Tk. 1,447.8.10 million 2013, recording growth of
3,527.90million + Continuous & Demand Tk. 5,682.60million) 5.91% in 2017, 11.06% in 2016, 23.00 % in 2015 and 19.85%
which was 3.81% of total Investment. Recovery against in 2014.
rescheduled investment during the year 2017 was Tk.
1,389.60million. Risk Weighted Assets (RWA) of Tk.206,246.97 million
(Consolidated Basis) and Tk.204.447.53 million (Solo
Classified investment increased by Tk. 926.53 million from Basis) recording Capital Adequacy Ratio (CAR) of 13.06%
Tk. 8,995.00 million to Tk. 9,921.51 million representing (Consolidated Basis) and 12.28% (Solo Basis) in December
4.10% of total investment as against 4.54% in the previous 2017 as against 13.96% in 2016,13.53% in 2015,13.15% in
year. 2014 and 13.52% in 2013
During the year 2017, recovery against classified investment Shariah Compliance
stood at Tk. 2,320.00million while recovery against SMA was
Tk. 2,300.00 million and against Written off Tk. 321.20 million Our Bank based on Islamic Shariah and therefore strict
building a total recovery of Tk. 4,941.20 million including adherence to Shariah Principles is the core strategy of our
recovery Tk. 1,389.60 million from rescheduled investment. banking business. So, we have no other alternative but to
Plan and Strategies to Improve the Asset Quality- comply Shariah in all our activities under the guidance of
our competent Shariah Supervisory Committee. Besides, we
• to ensure constant supervision and follow-up for timely must understand the Maqasid al-Shariah and disseminate
recovery of investment and prevent it from becoming the same to our portfolio management.
overdue afresh.
Our Shariah Supervisory Committee contributes a lot to run
• to fix individual target from very beginning of the year all the business activities of the Bank in accordance with
for recovery of non-performing investment. Islamic Shariah. During the year 2017, Shariah Secretariat
• to give special attention on top classified investment of the Bank under the direct supervision of the Shariah
clients for early settlement/ adjustment/regularization. Supervisory Committee undertook different programs for
• to keep constant follow up & monitoring to ensure Shariah Compliance in the Bank.
timely recovery of installment against rescheduled Al-hamdulillah, during the year 2017, 154 branches including
investment. 14 new branches were inspected under the Shariah
• to address chronic NPI clients by taking effective steps Supervisory Secretariat by the Shariah Secretary & Muraqibs.
and applying prudence. As per their report, Investment Income of Tk. 56.14 million
of 107 Branches out of 154 Branches and Head Office ID has
• to initiate necessary steps to settle the court cases
been segregated as Doubtful Income.
quickly and even the cases can be settled outside the
court through persuasion and mutual understanding. For effective compliance of Shariah in all the areas, some
important programs i.e. Shariah Training and Awareness
• to be more vigilant to keep NPI at the lowest possible
Programs, Clients Get-together etc. shall be conducted, inter
level.
alia, during the year 2018 Insha-Allah.
• to deploy level best efforts for recovery of Written off
Financial Inclusion
investment.
Financial inclusion is a delivery of financial/banking services
Ancillary Business
at an affordable cost to the vast sections of disadvantaged
The ancillary business contributes a lot in theoverall and low-income segments/group of society. Financial
profitability of the Bank. We have earnedTk. 2,790.68 million inclusion means that households and businesses have access
from Commission Incomeduringthe year 2017 as against and can effectively use appropriate financial services. Such
28
 services must be provided responsibility and sustainability, CMSME Investment Reports:
in a well regulated environment. (Figure in Million)
Actually, financial inclusion means not only open account Description 2016 2017
but deliver to financial services to each person with an
Total CMSME Portfolio 94,418.60 104,743.90
affordable cost whereas the people can deposit or withdraw
their earned money with comfortable process like cash, % of CMSME Portfolio to Total 47.63% 43.29%
check, debit/credit card, mobile banking, agent banking & Portfolio
internet banking etc. Target of CMSME Investment 50,000.00 55,000.00
According to the Bangladesh Bank guidelines, Al-ArafahIslami Total CMSME Disbursement 7,228.47 9,568.44
Bank Ltd. has already started various schemes and initiatives
to include the un-banked marginal people as the process of % of Achievement 144.57% 173.97%
financial inclusion. The important initiatives are as follows: In CMSME sector, we have a number of collateral free
Agent Banking schemes. Those schemes are running in all Branches. Skilled
Agent Banking services is one of the new dimensions of and experienced staffs are recruited in the concerned
banking services in Bangladesh which are provided through branches to ensure proper expansion of collateral security
engaged agents under valid agency agreement. Agent is free investment.
the owner of one or more than one outlet(s) who conducts Agricultural Investment
banking transactions on behalf of the bank. This type of Agricultural Investment is dealt by Agricultural Department
banking is comparatively a new idea that can help the functioning under the control of SME Investment Division. To
formal banking sector reach out to the marginalized people face the increasing food shortage of the country, bank is paying
of the society through agents. It is playing a pragmatic role massive attention to invest on agricultural sectors. The main
in paving the way for financial inclusion. Actually, financial items of agricultural sectors are- crops, fisheries, warehouse,
inclusion is a tool for inclusive economic growth and financial poverty alleviation, irrigation, livestock development etc.
development of a country. In the fiscal year 2016-2017, our total disbursement target
In recent, Bangladesh Bank has introduced a detailed was Tk. 2,900.00 million and we have achieved Tk. 2920.00
‘Prudential guidelines for Agent Banking Operation in million. So we have achieved target 101%. We have achieved
Bangladesh’ to be followed by all the commercial banks. target of 5 years continuously and also we got Letter of
Considering the importance of the matter, we have already Appreciation 5 times from Bangladesh Bank.
launched 112 Agent Banking outlets through 82 Agentsas Report of Agriculture Investment:
on December 2017 with a view to bringing the un-banked
population under banking services. (Figure in Million)

Agent Banking Reports (as on 31/12/2017) Fiscal Year Target Achievement

Particular December 2017 2014-15 2,500.00 2,521.40
Number of Outlets 112 2015-16 2,700.00 2,712.50
Number of Accounts 70,774 2016-17 2,900.00 2,924.50
Total Deposit Tk. 5,935.55 Million
2017-18 1,960.00 1,972.40
Number of Remittance Disbursed 86,102 (Proportionately)
Amount of Remittance Disbursed Tk. 3,132.87 Million
Amount of Investment in Different Tk. 63.40 Million Special Schemes for Agricultural development
Branches Mudaraba Animal Husbandry Scheme
Cottage, Micro, Small and Medium Enterprises Investment In the concept of Islamic Finance, Mudaraba is a special kind
(CMSME) of partnership business, where one partner gives money to
Cottage, Micro, Small and Medium Enterprises (CMSME), another and at the end of business cycle, the profit will be
works as the platform for job creation, income generation, distributed between both the parties as per previously signed
and development of forward and backward industrial agreement. The investment comes from the first partner who is
linkages and fulfillment of local social needs. MSMEs called “Saheb-ul-maal”, while the management and work is an
occupied a unique position in the economy of Bangladesh. exclusive responsibility of the other, who is called “Mudarib”.
Here, the MSMEs account for about 45% of manufacturing All the losses will be contributed by the fund provider.
value addition. They account for about 80% of industrial In this scheme, Bank shall purchase cows, goats etc. on
employment, about 90% of total industrial units and about behalf of client under the limit of sanction amount. Clients
25% of total labour force. shall responsible for daily maintenance of that animal as per
In the light of the definition by Bangladesh Bank, Al- terms and conditions. After a certain time, that animal will
ArafahIslami bank Ltd. is giving a priority over CMSME be sold in current market rate and then the profit shall be
financing to three categories of enterprises viz. Industry, distributed as on previous agreement.
Trade & Services. In this scheme, we have already disbursed Tk. 19.30 million
29
for fattening of 401 Cows and 13 Buffalos among 152 farmers of citizenship. Implementation of financial inclusion to the
so far. This was a great achievement we think. This is a special mass communication is an art, even within the stringent
scheme in the banking sector of Bangladesh. rules and regulations of the Bangladesh Bank. It is high time
Rural Agricultural Investment Scheme (RAIS) to popularize financial inclusion with a view to gearing up
the initiatives of financial inclusion for achieving the target
On the basis of socio-economic development of marginal and
of sustainable economic growth of the country.
lessee farmers, this agricultural based program named ‘Rural
Agricultural Investment Scheme (RAIS)’ is running in this Branding & Public Relations
Bank. Development of country’s internal food production Improvements in branding and media relations were priorities
as well as socio-economic sectors of farmers is the main during the year 2017. In response to the overwhelming
focus here. We have already listed 2,325 farmers under this expansion in Bank’s business, we extended our publicity to
scheme and total investment is Tk. 29.10 million of which fulfill the market demand. We brought new dimension in our
outstanding is Tk. 28.00 million. branding and publicity for establishing a positive image of the
Al-ArafahKhamerbari Investment Scheme Bank. We acquired encouraging national attention towards
AIBL throughout the year with our all-around activities. More
To make a priority to invest in the crop sector of Bangladesh,
than 140 news items of the Bank were broadcasted in 600
we have launched the product named: “Al-ArafahKhamerbari
news coverage through 12 different TV Channels during the
Investment Scheme (Khamerbari)”. With this product, we
year 2017. We continued news branding on 5 major satellite
work for farmer’s community surrounding the Branch.
TV channels such as, Ekushey TV, Channel-i, Bangla Vision,
Our field officials motivate farmers to grow the potential
ATN Bangla and ATN News.
corps based on their previous farming experience. This
scheme is an innovative action to develop the crop sector Promotion in the television media got a major hike during the
of Bangladesh. We have disbursed 73.00 millioninvestments Ramadan this year. In 11 major TV channels which included
among 1,085 farmers under this scheme so far. NTV, ETV, Channel-9, Boishakhi TV, SA TV and many more,
the Bank sponsored 15 different programs to encourage true
Growing spices at a lowest profit rate (4%)
Islamic values. The initiative was praised by the stakeholders
As per instruction of Bangladesh Bank, and to increase the and positively put an effect on business.
production of different types of spices like Pulse, Oil-seed,
Positive branding was one of the vitals supports that led the
Spice and Maize, we started investment at a lowest rate of
Bank to hold a firm position in the market. More than 35
profit (only 4%) to the marginal farmers. We have disbursed
interviews and talkshows of the Managing Director and other
23.20 million investments among 487 farmers under this
top executives were published or broadcasted in several
sector so far.
media. The Bank proved its engagements with people by
School Banking Accounts sponsoring several occasions. Banking Fair, SME Fair, School
School banking is one of the key elements of financial Banking Conference, Anti-Money Laundering Conference,
inclusion. According to Bangladesh Bank’s recommendation, Fair of Chittagong Metropolitan Chamber of Commerce &
the bank has inaugurated school banking for the school level Industry and many more people-related gatherings were
minor and student. The bank has made massive marketing sponsored by the Bank. These activities tightened the
and publicity to introduce this type of accounts. relationship with clients and uplifted Bank’s faithful image.
Garments Accounts Our presence in the print media also was bold as we had
The bank has another new type of account named “Garments 3280 Press Release items published in more than 60 different
Account. The garment workers are the entitled person for leading Newspapers and Media throughout the year. Besides,
this account. Any garment worker can open this account by more than 800 advertisements took place in 100 different
only depositing tk.100. The account holders can deposit, publications during that year. For 2018 our advertisement
withdraw and get remittance through this account. plan will focus to achieve the best outcome using available
media and resources. We shall go into Electronic Media
Mudaraba Savings Pathoshishu Account vastly this year, including Radio Branding. Besides, we have
Mudaraba Savings Pathoshishu Account is tremendous item taken action to boost-up our promotion in social media.
of financial inclusion in Bangladesh. The bank has separate The Promotional Plan also indicates that, we have to make
product code for this account. Only government authorized our promotion through client service more effective and
NGO can be the introducer for this account. The minimum efficient in 2018. Leaflets and Brochures of our products will
deposit amount is 10 Taka. be made available in every branch. There will be a number of
The goal of Al-ArafahIslami Bank Ltd. is not mere Banners, X-Stands and Danglers visible in our branches. We
maximization of profit. There is a far greater issue which is must remember that, a satisfied client is the best advertiser
to bring un-banked population under banking services for of the Bank. So, all our promotional steps will be focused to
overall development of the nation. This is the initiative that make our customers feel that they are banking with their
helps social inclusion, national integration and consolidation own bank when they are with Al-ArafahIslami Bank Limited.
30
 Branding Summery of AIBL in 2017 performing transaction with the Bank.
SL Branding Details Frequency During 2017 We already were offering discount facility for both Debit
1. TV News Items 140 events & Credit card holders & Equal Monthly Installment (EMI)
600 coverage facility for credit card holders. We have already signed
2. TV Channel Coverage 12 channels EMI agreement with almost all renowned Furniture
3. TV Branding (throughout the year) 5 channels manufacturers, Branded Electronics chain shop, & Lifestyle
4. TV Branding during 15 programs retailers and leading Hospitals, Restaurants, Hotels, On-
Ramadan 11 channels line shops. Addition to that, we already signed discount
5. Talkshow/Interview 30 programs agreement with almost all renowned Lifestyle retailers
6. PR Published 3280 times and leading Hospitals, Restaurants, Hotels. We already
7. Print media covered 60 media successfully accomplished joint Campaign titled “Experience
Paris 2017” with MasterCard. Another joint Campaign
8. Promotional Advertising 800 advertisements
titled “Winter Spend & Win Campaign” with MasterCard is
9. Publications used 100 publications
ongoing. Our credit card already make a positive impression
Information Technology on potential customers by now and InshaAllahatala, it will
known to everyone within the country as well as oversees by
In the present day, all business and commercial activities
these types of promotional activities. It is mentionable that,
depend on technology and especially all kinds of banking
we are providing effective & efficient card service among the
transactions are done by On-line Automation system. All
customers in minimal service charge, which is less than any
banks are rendering their financial services, DATA analysis
credit card in Bangladesh.
& classifications, making the ultimate decision from a truly
automation system accomplished by the ICT division of any We already issuing Hajj card to honorable
bank. AIBL started its Automation journey from 2006 and live HazziSaheba&Saheban with lowest service charge than any
their Online Operation in the 2008 that has been going on other Bank in Bangladesh. Its aims to provide service to
successfully since inception. Hajji Sahab, Saheban& Hajj agents at low service cost & for
branding of Al-ArafahIslami bank.
Beside Core Banking System (CBS) we are also using the
below tech based services to automate, secure and faster We launched Instant card for Account Holders. Honorable
our internal activity as well as to offer our customer better Account Holder is collecting their card from Branch at the
services: date of account opening. In this year we will increase our ATM
network by establishing ATMs at prime locations including
i.RTGS; ii.BEFTN; iii. BACH, iv. ISS Report, v. BPA, vi. CIB, shopping malls, Airports, Train Stations, Bus Stoppages, etc.
vii.goAML- CTR, viii. RIT Reporting, ix. i-Banking, x. Sylvia We will introduce Merchant POS, Branch POS and Agent POS
(HRMS), xi. Agent Banking, xii. Utility Bill Collection, xiii. for convenience of our customers.
Sanction Screening, xiv. FATCA Compliance, xv. SWIFT, xvi.
Asset Management, xvii. Centralized Anti Virus Management, Card Division working round the clock to provide efficient
& satisfactory service to our valued customers. Adapting
xviii. Mail Server, xix.OBU, xx.Treasury, SMS Alert, xxi. ATM
technological advancement, Card Division will provide
Service, xxii. Mobile ATM Service, xxiii. Debit Card, xxiv.
modern day Banking service to our customer Insha Allah.
Credit Cardetc.
Risk Management
Following ICT projects have been taken for the year 2018:
Risk is inherent in every walk of life and generally defined
1. To become one of the first third Technologically
by the adverse impact on the profitability of several
advanced bank in the country within next 3 years
distinct sources of uncertainty. The nature and magnitude
2. Ensure100% Regulatory Compliance by taking highest of business as well as the degree of competition in the
possible ICT security measures within a year. banking industry has gradually increased in recent years, so
3. To take necessary steps to earn highest possible as the level of various risks such as Credit Risk, Market Risk,
satisfaction of end-users inICT Supports Service by Operational Risk, and Strategic Risks etc. Risk Management’s
2018. main objectives are to identify and measuring the risks and
advise mitigation there against.
Card Division
AIBL has three lines of defense for identification, assessment,
Card Division of Al-ArafahIslami Bank Limited has been
control and mitigation of risks.
offering diversified range of products and services since the
beginning to provide the varied needs of the customers. 1st line of defense: Day to Day Operational Management and
Consequences of that, Al-ArafahIslami Bank have introduced Internal Controls
the first ever Islamic MasterCard product in Bangladesh. • BranchesSupport Functions2nd line of defense: Risk
The La- Riba Islamic Credit Card, designed in a way to meet Management and Compliance Functions
customer transactional needs while strictly maintaining the • Zonal Office
Sariah Principals. We are providing technological advanced
Card facilitated service to our valued customers. In busy day • Different Risk Management Committees
to day urban life everybody prefers quick & advanced way of • Risk Management Division and CRO
31
• Board Risk Management Committee 3rd line of plantation programme-2017 held through our rural
defense: Independent Assurance branches all over Bangladesh. Near about 20,000
• Internal Audit (approximately) tree plants has been distributed among
mass people. The expenditure for tree plantation
• Board Audit Committee programmers was 1.5 million (approximately).
• Supervision of Regulators 4. Environmental and Social Risk Management(ESRM):
In accordance withthe direction of Bangladesh Bank, AIBL Instead of ERM Guidelines As per Bangladesh Bank
has established a division named ‘Risk Management Division’. SFD Circular no. 02, February 08, 2017, Environmental
AIBL possesses board’s approved risk management guidelines and Social Risk Management (ESRM) will be introduced
designed to ensure that risks are identified, appropriately in 2018 which is more interactive, robust and auto
measured and controlled, and monitored and reported. generated risk rating system.
Besides, different Risk Management Committees including
CSR Activities
All Risk Committee in Management level in addition to Board
Risk Management Committee are performing their duties CSR is an integral part of our corporate culture and ethics.
with utmost care to minimize the risk level. Regular meeting We respond positively in every sphere of social activities. We
of all the committees are held on monthly/quarterly basis. are delivering innovative solution to our valued customer
and in the same way we are also helping different areas of
Monthly/Quarterly Risk Management Report and a Half-
social acidity through our CSR activities. To enhance social
yearly Comprehensive Risk Management Report (CRMR)
service as part of corporate social responsibility the Bank
incorporating all risk areas are prepared as per directions of
has facilitated farmers & freedom fighters to open savings
the prescribed format of Bangladesh Bank. These Reports
accounts with special facilities of giving profit on daily
are discussed in depth in the All Risk Committee in the
balance without realizing any account maintenance fee.
Management level as well as Board Risk Management
The bank has also originated school banking to open savings
Committee and necessary instructions and guidance are
accounts of school students (minor) with same facilities as
given and implemented there against.
offered to farmers and freedom fighters. During the year
Sustainable Finance Unit 2017 we accomplished different humanitarian and social
Sustainable Finance Unit is formed newly on 05.01.2017 activities which include allocation of fund Tk. 157.40 million.
as per Bangladesh Bank circular no 02 date: 01.12.2016. Besides, we have taken a program to develop manpower
After forming it has completed one year successful journey and make them employed as well as assisting them for
to its goal. As SFU is constituted by merging Green banking employment in abroad.
Department and CSR Division, it is an integrated approach During the year 2016, the bank has prolonged itshands
of Green Banking and Corporate Social Responsibility. In this towards the poor people in various ways.Our CSR areas were
21st century, development means not only maximizing profit focused on as below:
or wealth; rather it ensures environmental and social safety Comparative CSR Position
too. In this era growth rate of development is very high. But (Amount in BDT million)
its benefits are not obtained equally by all individual of a
particular society. Income deviation between rich and poor Particulars 2016 2017
are very high. On the other hand technological development, Health Sector 64.60 10.80
modern civilization and population growth are also doing Education Sector 09.70 8.10
harm for our natural environment. In this context to save
Disaster Management 23.20 2.60
our planate to leave it habitable we should take immediate
measures. From this motto sustainable finance unit works as Cultural Activities 2.00 0.90
following: Environment 5.80 1.70
1. Sustainable finance Committee: Others 0.00 133.30
A committee named “Sustainable Finance Committee” Total 105.30 157.40
has been formed to look after all the activities of Green
banking and Corporate Social responsibility which is Human Resources
being leaded by the honorable Deputy Managing Director. Well educated and skilled manpower is the best capital of
2. Utilization of Islamic Refinancing Fund: an organization particularly in banking institution. We put
utmost importance on recruitment and development of
As per the participatory agreement with Bangladesh
human resources. In recruiting process, we put emphasison
Bank, as a pioneer we (AIBL) have successfully bought
attracting talented young stars. Total 415 employees in
36.90 million against our general investment in 2017.
different categories/ranks joined ourfleet during the year
The main benefit of this fund is 5% spread leading us to 2017 raising our total employees to 3,446 including 224
gain profit of approximate BDT 18.45 lac (per annum). Executive as on31.12.2017.
3. Tree plantation programme-2017: We nominated 404 employees in outside training course viz.
Aiming to build future habitable green planet, Tree BIBM, BBTA,BABetc. in 2017 and they have completed the
32
 course successfully. Interpretation:
We motivate and facilitate our deservingemployees to AA+, AA, AA- (Double A) (High Safety) : Securities rated in
complete international standardprofessional degrees like this category are adjudged to be of high credit quality and
CDCS. Presently, wehave 51CDCS of which 11 completed offer higher safety. This level of rating indicates a security
during theyear 2017. with sound credit profile and without significant problems.
Activities of AIBTRI Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
In order to develop the skill & efficiency to discharge the
responsibilities of Human Resources of the Bank, AIBTRI ST-2 (High Grade) : High certainty of timely payment. Liquidity
conducted a total number of 82 (Eighty Two) Programs factors are strong and supported by good fundamental
out of which 21 (Twenty One) Training Courses, 40 (Forty) protection factors. Risk factors are very small.
Workshops, 3 (Three) EDPs and 18 (Eighteen) Outreach Concluding Remarks
programs. Finally, I would recall the valuable suggestions and support
In addition to those, this year AIBTRI organized a seminar of all concerned for which we able to take the Bank to this
on Money Laundering Prevention & Combating Financing state of stratum and again offer my heartfelt thanks to all of
of Terrorism” as the lead Bank nominated by Bangladesh them.
Bank in Jhalakathi area as per instruction of the BFIU. Let us pray to Almighty Allah (SWT) to give us courage and
AIBTRI successfully arranged, monitored and supervised the strength to achieve our set vision and mission and hope that
workshop with 67 (Sixty Seven) officials of different Banks our sailing through success shall continue in the years to
most of whom are BAMLCOs and the remaining are Branch come Insha Allah.
Managers.
Besides, AIBTRI had arranged three new courses namely
Human Resources Management, Training of Trainers and
Project Appraisal & Management. Project Appraisal &
Management was arranged at BIBM.
We have already shifted the Training & Research Institute in
a new place at Surma Tower adjacent to Head Office which
(Md. Habibur Rahman)
will be helpful for to create the learning environment for the
Managing Director
participants.
Date: 24th May 2018
Credit Rating
Credit Rating Information and Services Limited (CRISL)has
adjudged rating for Al-ArafahIslami Bank Limited as follows:
Long Term : AA (Pronounced Double A)
Short Term : ST-2
Based on : Audited Financial Statement 2016
Date of Rating : 30 June 2017
Validity : 30 June 2018
Outlook : Stable
Year-wise Comparative Rating Position:
Date of Rating Long Term Short Term Outlook
30 June 2017 AA ST-2 Stable
30 June 2016 AA ST-2 Stable
30 June 2015 AA 2 ST-2 Stable
30 June 2014 AA 3 ST-2 Positive
30 June 2013 AA 3 ST-2 Stable
33
Board of
Directors’ Report

BismillahirRahmanir Rahim growth at 7.24 per cent in FY17, which exceeds the official
All praise is to be the Almighty Allah, Lord of the Universe target of 7.20 per cent by 0.04 percentage point. Compared
and blessings of Allah be upon the Prophet Mohammad (SM) to many other developing countries, the 7.24 per cent GDP
and his descendants & companions growth achieved by Bangladesh is quite impressive, but still the
realized growth remains below the country’s true potential.
Dear Shareholders,
Inadequate infrastructure, shortage of power and energy,
AssalamuAlaikumWaRahmatullahiWaBarakatuhu.
weak investment climate, and lack of consistency in policy
The Board of Directors of the Bank takes the privilege to and regulatory framework are now major impediments to
welcome the country’s development. These impediments must be
you all to the 23rd Annual General Meeting and has the removed to restore the confidence of the country’s business
pleasure of placing before you the Annual Report and the and investor community.
financial statements comprising the Balance Sheet, Profit
Based on the IMF’s World Economic Outlook, released in
& Loss Account, Cash Flow Statement and Statement of
April 2017, the GDP of Bangladesh in PPP terms will cross
Changes in Equity of the Bank along with the report of the
US$1,000 billion and the country will be ranked 30th largest
Auditors and Shariah Supervisory Committee for the year
economy of the world in 2022, which is 32nd in 2017. On
ended 31 December 2017.
nominal GDP basis, Bangladesh will be the 38th largest
Economy Analyses economy in 2022 as against 45th now.
Global Economic Outlook In terms of US Dollar, the value of GDP in current market
Global economic activity is picking up with a long-awaited prices increased by 12.36 per cent to US$248,767 million in
cyclical recovery in investment, manufacturing, and trade, FY17 from US$221,396 million in the previous year.
according to World Economic Outlook. World growth is
Per capita GDP stood at US$1,538 in FY17, compared to
expected to rise from 3.1 percent in 2016 to 3.5 percent in
US$1,385 in FY16, showing an increase of 11.05 per cent.
2017 and 3.6 percent in 2018.
The general point-to-point inflation came down to 5.44 per
Stronger activity, expectations of more robust global cent in FY17 from 5.92 per cent in FY16. Between end-June
demand, reduced deflationary pressures, and optimistic of 2016 and 2017, the Taka depreciated by 2.80 per cent in
financial markets are all upside developments. But structural terms of US dollar. Gross foreign exchange reserves rose to
impediments to a stronger recovery and a balance of risks US$33.407 billion in the last working day of FY17 (29 June
that remains tilted to the downside, especially over the 2017).The amount was sufficient to cover the country’s
medium term, remain important challenges. import bills for more than nine months.
With persistent structural problems such as low productivity
Banking sector analysis
growth and high income inequality pressures for inward-
looking policies are increasing in advanced economies. These After the independence, banking industry in Bangladesh
threaten global economic integration and the cooperative started its journey with 6 nationalized commercialized banks,
global economic order that has served the world economy, 2 State owned specialized banks and 3 Foreign Banks. In the
especially emerging market and developing economies, well. 1980’s banking industry achieved significant expansion with
Against this backdrop, economic policies have an important the entrance of private banks. Now, banks in Bangladesh are
role to play in staving off downside risks and securing the primarily of two types:
recovery, and a renewed multilateral effort is also needed to Scheduled Banks:
tackle common challenges in an integrated global economy.
The banks which get license to operate under Bank Company
Bangladesh Economic Outlook Act, 1991 (Amended up to 2013) are termed as Scheduled
Bangladesh Bureau of Statistics (BBS) has estimated the GDP Banks.
34
 Non-Scheduled Banks: Islamic Banks’ Investments:All Islamic Banks’ Investments
The banks which are established for special and definite stood at TK 1,912,290.00 million during the year 2017
objective and operate under the acts that are enacted for as against Tk.1,693,873.80 million in the previous year
meeting up those objectives, are termed as Non-Scheduled 2016 and the deposits increased by Tk. 218,416.20million
Banks. These banks cannot perform all functions of registering growth of 12.89% in 2017. The share of Islamic
scheduled banks. Banks’ Investments as of 31 December 2017 stood at 26.95%
as compared to 26.81% as of 31 December 2016.
There are 57 scheduled banks in Bangladesh who operate
under full control and supervision of Bangladesh Bank which Operating Profit: Banks in Bangladesh managed to log in profits
is empowered to do so through Bangladesh Bank Order, for 2017 despite a tough start tothe year 2017. The growth
1972 and Bank Company Act, 1991. Scheduled Banks are of profit was slim owing to low credit/investment demand,
classified into following types: cautious lending/investment policy, lowering lending/
investment profit rates and the sluggishbusiness environment.
State Owned Commercial Banks (SOCBs):
In this situation, Islami Bank Bangladesh Limited registered
There are 6 SOCBs which are fully or majorly owned by the
Government of Bangladesh. There are now 4 non-scheduled the highest profit in the top in 2017. The listed second
banks in Bangladesh which are: highest National Bank Limited and Al-ArafahBank logged in
profits of Tk.6,955.77 million and placed 5th position in 2017
• Ansar VDP Unnayan Bank, while its position was 7th in 2016. Among the Islamic Bank,
• Karmashangosthan Bank, Al-Arafah stood 2nd position.
• ProbashiKollyan Bank,
• Jubilee Bank Islami Banking Practices
A. Private Commercial Banks (PCBS): Islami Banking System is becoming more and more
attractiveday by day to peoples irrespective of nations,
There are 39 private commercial banks which are majorly religious, colorsand species. More than 300 Banks & financial
owned by the private entities. PCBs can be categorized into institutions are serving Islami banking throughout the world.
two groups:
At present in our country 8 full fledged Islamic Banks are
B. Conventional PCBS: working successfully. Andother traditional banks have Islami
31 conventional PCBs are now operating in the industry. Banking Wings conducting Shariah based banking activities.
They perform the banking functions in conventional fashion Recent Development ofBangladesh Government Islamic
i.e interest based operations. Investment Bond (BGIIB) is the milestone for shariah based
C. IslamiShariah Based PCBS: banking practices in Bangladesh.

Al-ArafahIslami Bank Limited Al-ArafahIslami Bank Limited

Exim Bank Limited With the objective of achieving success in life here &
First Security Bank Limited hereafter following the way directed by the Holy Quran
Islami Bank Bangladesh Limited and the path shown by Rasul (SM) Al Arafah Islami Bank Ltd
ICB Islami Bank Limited was established (registered) as a public limited company
ShahjalalIslami Bank Limited on 18 June 1995. The inaugural ceremony took place on
Social Islami Bank Limited 27 September 1995. The authorized capital of the Bank is
Union Bank Limited Tk. 15,000.00 million and the paid up capital is Tk. 9,943.06
Overall Banking Scenario million as on 31.12.2017.
Banks’ Deposits: Total Deposits (excluding interbank items) Renowned Islamic Scholars and pious businessmen of the
of the scheduled banks increased by Tk. 1,042,712.30 country are the sponsors of the Bank. 100% of paid up
million representing 12.10% point to point growth from capitalis being owned by local shareholders.
Tk. 8,617,456.70million as on 31 December 2016to Tk. The equity of the bank has stood at Tk.22,520.68 million
9,660,169.0 million as on 31 December 2017. as on 31 December 2017, the manpower was 3,446 and
Islamic Banks’ Deposits:AllIslamic Banks’ Depositsstood the number of shareholders was 30,386 It has achieved
at TK 2,070,130.00 million during the year 2017 as against a continuous profit and declared a good dividend over the
Tk. 1,722,148.90 millionin the previous year 2016 and the years. High quality customer service through the integration
deposits increased by Tk. 347,981.10million registering of modern technology and new products is the tool of the
growth of 20.21% in 2017.The share of Islamic Banks’ bank to achieve success. The bank has a diverse array of
Deposits as of 31December 2017 stood at 21.43% as carefully tailored products and services to satisfy customer
compared to 19.98% as of 31 December 2016. needs. The Bank is committed to contribute significantly to
Banks’Advances/Investment:Total Advances/Investments the national economy. It has made a positive contribution
(excluding bills) of the scheduled banks increased byTk. towards the socio economic development of the country with
848,522.20million representing 13.50% point to point 154 branches of which 25 is AD throughout the country.
growth from Tk 6,285,349.90 million as on 31 December We are pledge-bound to convert the Bank into an Islami
2016 to Tk. 7,133,872.10 million as on 31 December 2017. Bank on global standard which will be dynamic in actions,
35
progressive in ideas, honest in dealings, correct in judgment, Mudaraba depositors.
futuristic in attitude, fair in approach, polite in behavior • To render improved services to the clients imbued
anddevoted to high quality service to customers. Our aims withIslamic spirit of brotherhood, peace and fraternity
are for boosting modern management, advanced technology, and bydeveloping an institutional cohesion.
good profitability and steady growth transparency. We
are alsofirmly committed to disclosure and compliance to The bank is contributing to economic and philanthropic
shariah and regulatory authorities. Today the bank is an activities. AIBL English Medium Madrasah, AIBL library and
agile organization which promotes innovation, encourages Al-ArafahIslami Bank Foundation Kidney Dialysis centre
improvement, values sense of urgency and develops people patronizes by the Bank are such examples.
who accept challenges and turns them into opportunities. Activities of Shariah Supervisory Committee for the year
Special Features of Al-ArafahIslami Bank Ltd. 2017

• All activities of the bank are conducted according to Islamic Al-hamdulillah, Shariah Supervisory Committee consists
Shariah where profit is the legal alternative to interest. of 6 (Six) members specialized in Fiqhul Muamalat (Islamic
Commercial Law) according to guidelines given by the
• The bank’s investment policy follows different modes Bangladesh Bank to ensure whether all banking operations
approved by Islamic shariah based on the Qur’an & Sunnah. are transacted in accordance with Islami Shariah i.e. Qur’an,
• The bank is committed towards establishing welfare Sunnah, Ijma and Iztihad.
oriented banking system, economic upliftment of Shariah Supervisory Committee has managed by the grace
the low income group of people, create employment of Al-mighty Allah a lot of contribute to run all the business
opportunities. activities of the Bank according to Shariah guidelines. During
• According to the need and demand of the society the year 2017 with some unavoidable circumstances our
and thecountry as a whole the bank invests money Honorable Members of the Shariah Supervisory Committee
to different‘Halal’ business. The bank participates in sat in 5 (Five) General Meetings and 1 (one) Emergency
different activities aiming at creating jobs, implementing Meeting to discuss the matters of the Bank to give opinions
development projects of the government and creating & directives and given solutions there of from the view point
infrastructure. of Shariah Principles.
• The bank is committed to establish an economic system Muraqibs of the Shariah Supervisory Committee have visited
resulting in social justice and equitable distribution all branches of the Bank during the year to observe the
ofwealth. It is committed to bring about changes in Shariah compliance, give necessary instructions on the spot
the underdeveloped rural areas for ensuring balanced and submitted report to the Shariah Committee. They have
socioeconomic development of the country through also submitted corrective measures to rectify the laws in
microcredit program and financing of SME’s as well. implementing Shariah guidelines into the banking operations.
• According to Mudaraba system, the depositors are They identified Tk 56.14 Million as Doubtful Income of the
thepartners of the investment income of the bank. About branches of the Bank. Besides, after analysing balance sheet,
70% of the investment income is distributed among the the Supervisory Committee identified Tk.300.60 Million as
36
 compensation realized from all branches and Tk. 0.42 Million, Bangladeshunder the companies act 1994 on February 11,
Tk. 3.54 Million as Interest Income received from NOSTRO 2001. Themain objective of company is to carry on activities
A/Cs of foreign correspondent bank and Bangladesh Bank relating todeveloping software products and providing
FC Clearing Account respectively. As a result it is advised to maintenance andsupport services both the domestic and
finalize the Balance Sheet of 2017 keeping Doubtful In-come international clients.Over the years, MILS has established
amounting to Tk 59.69 Million apart from Basic Income and itself as the leading softwaredeveloper, implementation and
spend after tax the same on the basis of Shariah prescribed service provisioning company inBangladesh which adheres
modes. to the rules of Islamic Shariah.
At Last, as per Shariah Inspection Report of 2017, the Doubtful Off-shore Banking Unit (OBU)
Income of the Bank has been reduced comparatively and The Bank obtained the Off-shore Banking Unit (“the
we hope that this reducing figure will be continued and Unit”) License on 17 February’14 vide letter # BRPD (P-
necessary steps would be taken time to time, Insha-Allah. 3)744(121)/2014-934 from Bangladesh Bank. The Bank
A library has been established in the Shariah Supervisory commenced operation of this unit from 22 may 2014. The Off-
Secretariat of Al-Arafah Islami Bank having about 500 books shore Banking Unit is governed under the rules and guidelines
on Qur’an, Hadith, Fiqh, Islamic Economics and Islami of the Bangladesh Bank. Its office is located at AIBL Motijheel
Banking. Honorable members of the Shariah Committee Branch, 161, Motijheel Commercial Area , Dhaka 1000.
give Shariah guidelines to run the Bank’s operations taking
The principal activities of OBU are to provide Mudaraba
necessary consultations and data from those books after
Investment against payment of import bills under UPAS
exhaustive research and study. May Allah give us Tawfiq to
(Usance Payment at Sight) and Musharaka Documentary Bills
do all activities at His pleasure, Ameen.
in foreign currency (MDB F.C) to its customers.Total finance
AIBL Capital Market Services Ltd. under UPAS in 2016 was USD 129.56 million and under
AIBL Capital Market Services Limited is a subsidiary MDB FC was USD 12.21 million. Our Plan and Strategies for
company of Al- Arafah Islami Bank Limited. The Company Foreign Exchange Business-
is incorporated under the company’s Act, 1994 as a public • to diversify our import and Export portfolio for minimizing
limited companyby shares with an authorized Capital of BDT potential risks
10 billion (10,000 million) and paid up capital of BDT 4 billion • to ensure routing of all import and export business of our
(4,000.00 million) to provide stock brokerage services. The clients through us
paid up capital of thecompany is subscribed by Al- Arafah • to induct best import and export clients from the market
Islami Bank Limited and other individuals at the ratio of • to boost cash import business
60.50:39.50. In the year 2017. • to give special attention for remittance service at branch
AIBL Capital Management Limited level
• to maintain a progressive growth we have to enhance
AIBL Capital Management Limited (AIBLCML), a Subsidiary
our capacity by acquiring professional and technical
of Al-ArafahIslami Bank Limited, was incorporated under knowledge & skill.
thecompanies Act, 1994 on October 25, 2011 with a view
to runand manage the operations of Merchant Banking Position in the Stock Market
Serviceswith an authorized Capital of BDT 2 billion (2,000 Bank’s share sustained a steady strong position since
million)and paid up capital of BDT 500 million (500 million). It itsinduction at Dhaka Stock Exchange & Chittagong Stock
aimsto be one of the leading Merchant Banks of the country Exchange in 1998. In Dhaka Stock Exchange the face value
byrendering quality Merchant Banking Services with a high of taka 10 of our share was traded at taka 27.70 highest in
levelof professional expertise and integrity. 2017.The market trend of our bank’s share in Dhaka Stock
Exchangefrom January 2017 to December 2017 is stated in
AIBL Assets Management Limited
the list:
AIBL Assets Management Limited (AIBLAML), a Subsidiary
Position in the Stock Market in the list:
ofAl-ArafahIslami Bank Limited, was incorporated under
thecompanies Act, 1994 on January 01, 2014 with a view Month Opening High Low Closing
to runand manage the operations of Assets Management January 16.90 21.30 15.70 18.80
serviceswith an authorized Capital of BDT 500 billion (500 February 18.80 20.70 18.60 19.70
million)and paid up capital of BDT 100 million (100 million). March 19.70 21.70 19.00 21.40
April 21.40 21.60 16.80 16.90
It aimsto be one of the leading Assets Management Services
May 16.90 18.00 16.40 16.60
of thecountry by rendering quality Management Services
June 16.60 19.30 16.40 19.20
with ahigh level of professional expertise and integrity.
July 19.20 19.70 19.20 19.20
Millennium Information Solution Limited August 19.20 23.70 19.00 19.30
Al-Arafah Islami Bank Ltd. owned 51% shares of Millennium September 19.30 27.70 23.10 25.30
Information Solution Limited a subsidiary company of Al- October 25.30 26.10 23.20 24.20
Arafah Islami Bank Limited Millennium Information Solution November 24.20 25.70 23.60 24.10
Limited,a private limited Company was incorporated in December 24.10 24.80 23.10 24.10
37
Progress Analysis Solo Basis
Tk. in million
At the end of 2017, the number of depositors stood at 1,531,465 a) Core Capital (Tier-I ) 2017 2016
and the accumulated deposit was Tk.244,806.26 million. The Paid up Capital 9,943.06 9,943.06
total number of investors stood at 182,928 and total investment Statutory Reserve 7,576.58 6,490.09
extended to them was Tk 235,905.23 million.During the year Retained Earnings 2,176.61 2,175.04
2017 the total income was Tk.24,048.39 million and total Total 19,696.25 18,608.19
expenditure was Tk. 17,092.62 million. At the end of the year Less Good will and other Intangible assets 80.45 -
the profit before tax and provision stood Tk. 6,955.77 million. Total Core Capital 19,615.80 18,608.19
Capital Adequacy & Reserve Fund b) Supplementary Capital (Tier-II)
According to BRPD Circular the Bank will have to maintain Provision for Unclassified Investment 2,293.46 1,802.71
Tk.4,000.00 million Capitals from 1st July 2011. In Assets Revaluation Reserve 195.51 293.26
compliance with the new provision, the bank has raised its AIBL Sub Ordinate Bond 3,000.00 3,000.00
Capital fromTk. 25,455.36 million to Tk.26,948.82 million Total Supplementary Capital 5,488.97 5,095.97
(Consolidated Basis) and Tk. 23,704.16 million to Tk. Total Capital (a+b) 25,104.77 23,704.16
25,104.77 million (Solo Basis).In the year 2017 bank issued c) Capital Adequacy Ratio 12.28% 14.41%
AIBL Mudaraba Subordinated Bond Tk. 3,000.00 million that
meet the qualifying criteria for Tier 2 Capital as per annex
4 of Basel III Guidelines. The paid up capital of the bank
was at Tk.9,943.06 million at 31st December 2017.The total
reserve fund has stood at Tk8,556.96 million in the current
year against Tk.7,468.16 million at 31st December 2016.
In this account, the bank experienced a growth of 14.58%.
The Bangladesh Bank has fixed the ratio of minimum capital
adequacy (MCR) against Risk-Weighted Assets at 11.25% or
Tk. 4,000 million whichever is higher.
The Consolidated and Solo Basis capital adequacy ratio of
theBank as on 31.12.2017 are appended below:

Deposits
The total deposit of the bank was Tk.244,806.26 million at
31st December 2017 as against Tk.199,703.92 million at 31st
December 2016 a growth of 22.58% of which Tk.1,521.30
million was bank deposit and Tk. 243,284.96 million was
general deposit. The present strategy is to increase the
deposit base through maintaining competitive profit rates
and having low cost of funds to ensure a better spread with
an average return on investment.
Consolidated Basis
Tk. in million
a) Core Capital (Tier-I) 2017 2016
Paid up Capital 9,943.06 9,943.06
Statutory Reserve 7,576.58 6,490.09
Retained Earnings 2,259.16 2,199.57
Non Controlling Interest 1,761.50 1,726.67
Total 21,540.30 20,359.39
Less Good will and other Intangible assets 80.45 -
Total Core Capital 21,459.85 20,359.39
b) Supplementary Capital (Tier-II )
Provision for Unclassified Investment 2,293.46 1,802.71
Assets Revaluation Reserve 195.51 293.26
AIBL Sub Ordinate Bond 3,000.00 3,000.00
Total Supplementary Capital 5,488.97 5,095.97
Total Capital (a+b) 26,948.82 25,455.36
c) Capital Adequacy Ratio 13.06% 14.91%
38
 The mix deposit of the bank on December 31, 2017 was as follows: Investment
Deposit Mix The investment of the bank has stood at Tk. 235,905.23 million
Products Taka in Million as on 31st December 2017 as against Tk. 196,519.38 (Net off PR)
a) Al Wadia Current Account 26,435.04 million in the previous year showing an increased by20.04%.
b) Mudaraba Savings Deposit 32,130.00 The investment portfolio of the bank is well diversifiedand
c) Other Mudaraba Deposit 47,832.42 covers a broad spectrum of businesses and industriesincluding
d) Mudaraba Term Deposit 135,929.03 readymade garments, textile, edible oil, shipscraping,
e) Bills Payable 2,479.77 steel & engineering, chemicals, pharmaceuticals,cement,
Total 244,806.26 telecommunication, construction, health care,real estate,
Deposit Mix (%) education, transport and investment under consumer
schemes. We have geared up efforts to improvethe recovery
Products Taka in Million % of Total
rate of disbursed investment and also takenadequate measures
a) Cost Free deposit 24,725.43 10.10%
for converting the classified investmentinto performing assets.
b) Low Cost Deposit 70,724.53 28.89%
As a result, classified investment ofthe bank could be kept at a
c) High Cost Deposit 149,356.30 61.01%
low level far below the nationalaverage. It is 4.10% in our bank
Total 244,806.26 100.00%
as on 31 December 2017.

Various deposit product of the Bank in 2017:

Sl.No Types of Deposit
1. Mudaraba Term Deposit
(a) 36 Months
(b) 24 Months
(c) 12 Months The bank gives top-most priority to the creation of qualityassets
and does appropriate risk grading while approvingcommercial,
(d) 06 Months
trade and project investment to different clients.
(e) 03 Months
(f) 01 Month Sector wise Investment 2017
2. Mudaraba Savings Deposit Sectors Taka in million
3. Short Notice Deposit (SND) Agriculture, Fishing and Forestry 2,800.00
4. Monthly Hajj Deposit Industry 112,386.00
5. Monthly Installment Term Deposit (ITD) Construction 11,823.00
6. Monthly Profit Based Term Deposit (PTD) Water works & Sanitary Service 391.00
7. Monthly Savings Investment (SID) Transport & communication 9,048.00
8. One Time Hajj Deposit Storage 1,182.00
9. (a) Al-Arafah Savings Bond (3 Years) Trade Finance 64,701.00
(b) Al-Arafah Savings Bond (5 Years) Miscellaneous 42,921.78
(c) Al-Arafah Savings Bond (8 Years) Total (Including Profit Receivable 245,252.78
10. Marriage Saving Investment Scheme (MSIS) Less Unearned Profit on Investment 9,347.55
11. Pensioners deposit scheme Total 235,905.23
12. Special Saving (Pension) Scheme
13. Cash WAQF
14. Lakhopati Deposit Scheme
15. Kotipati Deposit Scheme
16. Millionaire Deposit Scheme
17. Double Benefit Scheme
18. Triple Benefit Deposit Scheme
19. Probashi Kallyan Deposit Pension Scheme
20. Mudaraba Savings Deposit-Student,
21. Farmers, Freedom fighters.
39
Income Operating Profit
Investment income: The investment income was Tk. The bank earned operating profit of Tk.6,955.77 million
20,491.03 million during the year 2017 which was growth of during the year 2017. The operating profit of the Bank
8.82% over the previous year. Investment income is 85.21% duringthe year 2016 was Tk. 7,511.03 million and thus
of the total income of Tk.24,048.39 million. the Bank attained negative growth of 7.39%in respect
Income from other than investment: The bank has earned of operating profit. The provision for income tax for the
Tk.3,557.36 million from sources other than investment like year amounted to Tk.2,355.78 million and divisible profit
commission income, exchange income, locker rent etc. in the available for appropriation amounted to Tk.1,990.19 million.
current year which is 14.79%of the total income. It indicates
27.43% growth over the year 2016.
Expenditure
Profit paid to depositors: The Bank has paid the depositors
Tk.11,784.20 million which is 57.51% of the investment
income and 68.94% of the total expenditure for the
year2017. It was 18.34% growth over the year 2016.

International Banking Wing (IBW)

International Banking Wing of Al-Arafah Islami Bank Limited
has been working persistently to facilitate International
Trade of the Bank with proper co-ordination within its five
divisions: vizA)Treasury Division, B) Foreign Trade Operation
Division, C) Foreign Trade Processing Division, D) Overseas
Administrative and Other Expenses: Banking Division & E) Foreign Remittance Division. Entire
The administrative and other expenses were Tk. 5,308.42 works of the Wing are now being performed in more
million during the year showing 27.82% growth over the effective and disciplined way to ensure efficient service in
year 2016. It is 31.06% of the total expenditure. compliant manner.

Donation to the Honorable Prime Minister’s Fund for flood victims

40
 A. Foreign Trade Operation Division: Foreign Exchange Operations however contribute significant
Foreign Trade Operation Division extends all necessary profit and exchange earning of the bank. In FX treasury,
coordination and support to ensure smooth operation of foreign we participate interbank market, conduct transaction with
trade transactions across the globe. This Division also reasonably central bank and with Foreign Banks/FIs. We always try to
ensures thorough monitoring and strict compliance of the works adhere within the laid down policies and guidelines of the
in disciplined manners. The Quality of service standard increases bank and regulatory bodies.
that helps achieving significant market shares and positive image Year 2017 was a high challenging year for Treasury in terms of
of the bank in International Trade arena.
managing FX Risk, Profit Rate Risk and Liquidity Risk of the Bank.
Position of foreign exchange business performance for the year Periodic intervention in revising deposit price to keep in pace with
2017 is presented hereunder compared to the business of 2016. market factors was instrumental in keeping the ID ratio at bay.
Off-shore Banking Unit (OBU): USD/BDT appreciation between January and December
Off-shore Banking Unit (OBU) of AIBL has been performing 2017 was about 5%. The country suffered due to negative
its operation at Motijheel Branch since its inception in 2014. foreign exchange gaps and dealing trade deficits.
In 2017, total financing business under UPAS was USD 186.92
1. Income of the Treasury Division:
million and under MDBFC was USD 43.33 million and earned (Figure in BDT million)
a profit of USD 8.60 Lac as against USD 3.23 lac in 2016.
Particulars 2016 2017 Growth as %
Other achievements:
Exchange Gain 653.30 860.10 31.65%
IBW has been conducting Hajj Management since its inception Rebate Income (Rebate sharing by FI Correspondents) 76.60 90.00 17.49%
with efficient and effective manner. We have handled about
Income from placement to OBU & EDF 182.30 283.90 55.73%
37,000 non ballotee and 780 ballotee pilgrims through our
Hajj booth at Ashkuna Haji Camp this year. In 2017, we sold Total Income 912.20 1,234.00 35.28%
SAR 2.80 Million to the pilgrims. Notable to mention that we 2. Updating the limits/Guidelines:
distributed 2,000 neck bags, 10,000 umbrellas and 2000 Hajj
During 2017 the Division updated its guidelines, limits
Guides to Hajj Pilgrims during 2017.
(Figure in BDT- Million) and operational procedures as per regulatory and internal
requirement.
Business Achievement As on Achievement As on Growth
3. Prudent Asset Liability Management of the Bank:
31-12-2016 31-12-2017 as %
Import 118,760.00 156,700.00 31.95% Asset-Liability Management (ALM) is an integral part of
Export 8,8150.00 104,540.00 18.59% the Bank Management that manages the banks on and
Remittance 11,735.43 20,700.00 76.41% Off Balance sheet position to offer competitively priced
products and services to its customers. Bank has an Asset
B. Treasury Division: Liability Committee-ALCO, comprising the senior member
Being an integrated unit, AIBL Treasury manages day to day of the Management chaired by the Managing Director to
Liquidity in foreign currencies and all other Foreign Exchange take strategic decisions on fixation of asset liability pricing,
Risks. Treasury Division, IBW engages in foreign currency responding to market scenarios. In monthly ALCO meetings,
Fund Management and ALM activities. Prudent ALM and relevant issues like economic forecast, market status, peer

An MoU was signed between the Bank and Dmoney Bangladesh Ltd for ‘Digital Islamic Wallet’
41
group analysis, projections on profit rate and exchange rate bank since 2013 and used to perform as a department under
and spreads; balance sheet gap in liquidity structure & profit Foreign Trade Operation Division (FTOD) until 2015. In 2016,
rate sensitivity of gap, pertinent to ratio analysis, internal this department has been approved as a Division of the
Transfer Pricing, Contingency Funding Plan, Stress Testing, International Banking Wing to process Cash/Deferred L/Cs of
Liquidity Coverage Ratio (LCR), Transfer Pricing mechanism all branches and Back to Back L/Cs of most of the branches.
for internal funding and investments in Government This division issues, advises and execute concerned payments
securities, regulatory & other audit compliance are discussed of the Cash & back to Back Letter of Credits. In 2017, FTPD
and decisions were taken for the interest of the bank. handled a total of 56,008 transactions against 43,469 in 2016
4. Financial Indicators: with a 29% growth.
Bank has managed some important financial indicators E. Foreign Remittance Division
through effective Asset Liability Management. Comparative Foreign Remittance Division
positions of the indicators are as follows:
Foreign Remittance Division is a growing business segment
Particulars 31-12-2016 31-12-2017 contributing to the inflow of foreign currency and low cost
Investment Deposit Ratio (IDR) 88.07% 88.95% relieves for promoting remittance inflow. Foreign Remittance
Maximum Cumulative Outflow(MCO) 18.52% 18.46% Division is procuring remittance from its remittance hubs
Cost of Fund (COF) 7.92% 7.50% across the globe in 100 countries through 14 (fourteen)
Remittance Arrangements and different exchange houses
5. Borrowing from Abroad: The Division arranged USD 76.99 abroad and local banks.
million Murabaha finance for OBU under Shariah Principles
1. Remittance Achievement:
from Overseas Banks/FIs for making investment against
UPAS through OBU. We have also made scope to borrow Foreign Remittance Division has achieved 138% of its target
further which is to be utilized as and when required. in 2017 by procuring remittance BDT 2,070.28 million
with a significant growth of 76.41% over 2016. Statistical
C. Overseas Banking Division:
performance is shown below:
To cope up with the ever changing nature of International
Trade and Commerce, Overseas Banking Division (OBD) Year Remittance Number of Remitta Achievement FX revenue & Growth
is working dedicatedly to ensure smooth flow of cross BDT USD Transa nce Target (In %) Fee sharing Received (In %)
(In Million) (In Million) ction (In million) (In million)
border transactions. Effects are continuously on to develop
2014 8,541.10 109.89 176,734 9,900 86% 7.48 21.28%
its correspondent banking network by establishing RMAs
2015 9,498.00 121.58 207,991 11,500 83% 8.68 11.20%
and opening of Nostro accounts with renowned banks and 11,735.40 149.29 254,436 11,500 102% 10.12 23.56%
2016
financial institutions across the globe. 2017 20,702.80 251.89 421,704 15,000 138% 13.11 76.41%
Despite different sanctions and strict compliance of
regulatory authorities regarding AML and combating of
terrorist financing issues, all financial Institutions are
now obliged to follow AML compliance for setting up new
correspondent relationships and review of the same for
continuation. For mitigation of the cross border transaction
risks, the bank has successfully incorporated SWIFT sanction
screening solutions to the core banking system and started
screening of outgoing messages from December 2017.
Despite regulatory compliance and guidelines constraints,
we have been very compliant and vigilant in developing
relationships. Our comparative presence over the years is as
under:
Sl No Areas of Performance Year 2015 Year 2016 Year-2017
01 Correspondent 329 341 347
Relation(RMA)
02 Nostro A/C. 26 28 27
03 Credit Line 202 Million 224 Million 270 Million
(USD) (USD) (USD)
04 Training/Seminar 26 Officials 14 Officials 32 Officials
to abroad
D. Foreign Trade Processing Division
Trade Processing has been centrally incorporated in our
42
 functions is underpinned by, and in turn implements and
reinforces, the system of internal controls. The first two
of these control functions constitute the “second lines of
defense” against mishaps. The final, or “third line of defense”
is the internal audit function.
Internal Control System is such a system which is not
distinct from other banking functionalities rather it is an
indispensable part of each and every functions of banking.
Actually each and every one from Board of Directors to the
lowest level employee is affiliated with the Internal Control
System of the Bank. The components of Internal Control
Environment are Board of Directors, Board Audit Committee,
2. Remittance Drawing Arrangement: Management, Organizational Structure, Independent audit
mechanism, Shariah Supervisory Committee, Concurrent
Foreign Remittance Division has executed 04 (four) new
Audit, Whistle Blowing System, Zonal Office, Information and
remittance drawing arrangements with different exchange
Communication Technology (ICT), Management Information
houses in Italy & UK in 2017 and another 07 (seven) more
System (MIS), Policy/Manuals/Guidelines/Circulars, Risk
exchange houses from different hubs of the world are
Management System, External Auditors Board of Directors,
under process. In order to boost-up remittance business the
Board Audit Committee, Management, Organizational
division is deploying all-out effort to establish new drawing
Structure, Independent audit mechanism, Shariah
arrangement with exchange houses in UAE, Oman, Bahrain,
Supervisory Committee, Concurrent Audit, Whistle Blowing
Kuwait, Qatar, Malaysia & across the globe.
System, Zonal Office, Information and Communication
3. Foreign Remittance Operation at Agent Banking Outlets: Technology (ICT), Management Information System (MIS),
Our all Agent banking outlets have been disbursing foreign Policy/Manuals/ Guidelines/ Circulars, Risk Management
remittance under the support of Foreign Remittance System, External Auditors etc. If all the components
Division. Remittance achieved through Agent Banking works accordingly, then ICC Environment develops which
Outlets during 2017 was BDT 1,521.20million which is 7.35% contributes positively for the establishment of Good
of total remittance and number of transaction was 42,601. Corporate Governance. Internal Control & Compliance Wing
4. Marketing & Promotional Activities: is working directly or indirectly with an aim for establishment
of Sound Corporate Governance.
With a view to increase transaction of Moneygram, Al-Arafah
Islami Bank executed promotional campaigns during 2017, in Activities performed by several divisions under ICCW in the
Eid-ul-Fitr & Eid-ul-Azha under joint promotional campaign year 2017 are as follows:
with MoneyGram. Each MoneyGram customer got a small a) Audit & Inspection Division:
bag & mobile top-up for Tk. 20 during these campaigns. i) Risk Based Internal Audit:- As per approved audit plan, Audit
In order to increase remittance volume, the division has a & Inspection Division has completed 100% audit including
plan for going to launch more promotional campaigns for surprise & special audit in the branch and Head Office.
different exchange houses in 2018. ii) In 2017, total 2, 00,212 lapses have been detected by
Internal Control & Compliance Wing Internal Audit in the Branches and 51% of lapses has
A properly designed and effectively enforced system of been rectified on spot.
internal controls is a vital component of bank management iii) In 2017, Internal Audit & Inspection team detected
and a foundation for the safe and sound operation of the income leakage of Tk. 238.89 lac regarding non-realization
organization as it helps protecting organization’s assets and of commission, charges, fees etc. and realized Tk. 107.41
profitability, ensures efficient operation & effective risk lac on spot and tk. 10.21 lac through compliance division.
management, produces reliable financial reports, ensures b) Compliance Division:
compliance with laws and regulations, and finally, safeguards i) Compliance Status:
interest of the stakeholders. Internal Audit:In 2017, total no. of 81, 935 lapses have
Internal control is a process, rather than a structure. It is not been rectified out of total un-complied lapses 1, 55,286
a separate activity disconnected from the rest of business (2014-2016: 56,685 & 2017: 98,601) through follow-
activities, rather is an integral part of those activities. The up(52.76%).
responsibility of implementing internal controls starts with Bangladesh Bank Inspection: 100% compliance report
the business lines, which are the “first lines of defense” of comprehensive inspection and foreign exchange
against breaches that could cause the bank not to fulfill inspection of Bangladesh Bank have been sent in time.
its objectives, not to report properly, or not to comply ii) Memo Submission:
with laws and regulations. Beyond that, in any bank, the The division has submitted 14memos of branches,
three important “control functions” are risk management, 4memos of Head Office 151 memos of important
compliance, and internal audit. This triumvirate of key miscellaneous issues to the BAC and Board on the basis
43
 of risk prioritization. Foreign Exchange & Foreign Trade officials. At present total
iii) Weekly Communication Meeting: Compliance Division 48qualified CDCS are serving in the bank.
has made arrangement of total 15 Weekly Communication Besides, with the initiatives of ICCW and approval of the
Meetings (WCM) in 2017 where total number of 281 VSLs Board in its 282nd meeting held on 23.11.2015, Certified
have been discussed of which 72 VSLs have been settled. Expert in Risk Management (CERM) scheme has introduced.
iv) Audit File Closed: Total audit files closed in 2017 is 158 of At present 02 officials have been qualified as CERM. They can
which 78 audit files are of 2015 and 80 files are of 2016. contribute to the bank by managing risk.
v) Others: Other works performed by the division are 4. Follow up of Zonal heads visit reports.
assessing branch ICC Performance Gradation (based on
To strengthen the activities of Zonal Office according to the
Audit); submission of Report before Board regarding
instruction Zonal heads submitted the visit report to the
Implementation of BAC & Bangladesh Bank decisions etc.
MD’s secretariat and afterwards send it to the Monitoring
c) Monitoring Division:
Division for needful follow-up. During January-December,
Works accomplished by this division in 2017 are as 2017 following report has been received by the Monitoring
follows:- Division and needful follow-up done accordingly:
1. Mandatory Leave & Irregularities detection during Leave:
1st half of 2017 2nd half of 2017
a) The Division has been monitoring the implementation Sl. No. Zone name No. of report No. of report
status of Mandatory Leave policy by HRD as per bi-annual received received
Leave Plan approved by the competent authority. 01 Dhaka Central 21 50
b) A comparative picture of the Mandatory Leave is given 02 Dhaka South 18 57
below: 03 Dhaka North 16 57
04 Chittagong 20 15
Mandatory leave sanctioned by HRD Sanctioned 05 Bogra 10 34
Target
1st Half 2nd Half Total In % in % 06 Khulna 13 34
2016 1493 1111 439 1550 103% 59% 07 Sylhet 13 32
2017 1119 573 562 1135 101% 43% 08 Comilla - 19
Total 2612 1684 1001 2685 100% 100% Total 111 298
Grand Total 111 + 298 = 409
c) No adverse report has been observed as per certificate
received from the reliever.
After collecting the compliance from respective Branches/
2. Employee Job Rotation: Offices the Monitoring Division has analyzed & prepared the
Steps have been taken to implement employee job rotation summary of the Compliance report of Zonal heads visit report.
in time. With the initiative of ICCW,all Wings, Divisions and 5.Follow-up of Quarterly Operation Report (QOR):
Branches have been directed for meticulous follow-up of
To strenghten Monitoring activites & green banking compliant
the instructions of HRD. Monitoring of the same is being
softcopy of QOR is collected from branches instead of hard
continued by the Human Resource Division (HRD) of the
copy.The Division reviews the QOR and if any deviation found
Bank.
in the QOR, communicates with the branchs for rectification.
Branches/ No. of officer Job rotated officer and field supervisors After rectification Monitoring Division (MoD) prepares a
Div/Zone and field Up to Up to Total % summary report & submits to Head of ICCW on quarterly
supervisors 30.06.2017 31.12.2017 basis. The MoD communicates with the concerned divisions
Branches 2447 33 320 253 13% of Head Office for Follow-up of deviations of QOR.
Head office 571 - 9 9 1.6%
- - 6.Follow-up of MPI/Murabaha Godown visit report:
Zone 52 - -
Total 3070 33 329 362 12% As per instruction circular # IAD/2016/113 dated 10/10/2016,
the concurrent auditors (General and Independent) of
3. Training organized on various Regulatory Issues: branches are being submitted stock report of MPI/ Murabaha
i) In-house training by AIBTRI: of respective Branches. The submitted reports have been
analyzed and necessary follow-up done from this division as
ICCW has the responsibility of prescribing the Training
well as referred to IAD.
Institute for arranging training on various core risk regulatory
7. Performance of Independent Concurrent Auditor:
issues. On persuasion as per advice of ICCW, 42 trainings/
workshop have been advised and arranged during the year- As per Management decision, Top 20 (twenty) branches
which cover more than 74% of business of the Bank have
2017:
been selected. Up to December 2017, 55% of business of
With the initiatives of ICCW and approval of the Board, CDCS the Bank are covered where Independent Concurrent (IC)
scheme was introduced for capacity development of the Auditor have started their line of work in 11 branches.
44
 (Amount in Million) scale development works are taking place. But its benefits
Volume of Investment % of Br. Investment with or quality of life of all individual of the society are not
Branch Name of the Br. Bank total Investment Tk. proportionately improved and gap between poor and
(As on 31.12.2017) 241,961.78 million rich are also increasing. From this perspective sustainable
MotijheelBr. 34,894.63 14.42% finance unit is constituted to incorporate environmental safe
Uttara Model Town Br. 8,951.96 3.70% keeping and other social responsibility in its general business
VIP Road Br. 12,480.82 5.16% operation. To achieve sustainable development goal (SDG-
Motijheel Corporate Br. 13,121.47 5.42% 17) Al-ArafahIslami Bank Ltd. has taken following action as
Dilkusha Br 18,844.04 7.79% per Bangladesh instruction time to time:
Gulshan Br 16,243.99 6.71% Sustainable finance Committee:
Banani Br 12,111.50 5.01% A committee named “Sustainable Finance Committee” has
New Elephant Road Br 5,819.32 2.41% been formed to look after all the activities of Green banking
Dhanmondi Br 6,038.10 2.50% and Corporate Social responsibility department which is
North South Road Br 2,578.29 1.07% being leaded by honorable Deputy Managing Director.
ProgotiSarani Br 2,880.12 1.19%
Total 133,964.24 55.37% Environmental and Social Risk Management (ESRM):
Instead of ERM Guidelines As per Bangladesh Bank SFD
Summary of lapses identified by Independent Concurrent Auditor Circular no. 02, February 08, 2017, Environmental and Social
& rectification thereof in the last two years are as follows- Risk Management (ESRM) will be introduced in 2018 which is
Lapses found Lapses Percentage of more interactive, robust and auto generated risk rating system.
Year of audit by Concurrent mitigated rectification Environmental Risk Rating (EnvRR):
auditor during the year As per ERM guideline out of total 4533 applicable investment
2016 77,181 63,795 83% clients, 4403 are EnvRR rated in which 3942 are low, 437
2017 77,866 63,941 82% are moderate and 22 clients are high categorized. In case
of environment risk rating our achievement is 97.13%. The
Implementation of ICC Software (Ababil Risk Based Internal
total disbursed amount is BDT 2,81,698.97 million among
Audit System)
those rated clients as on 31st December, 2017.
In the year-2017 formation and implementation of ICC
Financing in Eco-friendly sectors: on priority basis AIBL take
Software (Ababil Risk Based Internal Audit System) is unique/
initiatives to finance following eco friendly sectors:
tremendous performance of ICCW which has launched on 1st
January’2018. The objectives of ICC Software are stated below: Having ETP : Upto December, 2017 AIBL has disbursed BDT
51,416.34 million to 78 HETP clients in required sectors.
a. Increases the audit coverage.
b. Improve audit quality and audit judgment. Brick field with modern technology: AIBL has the pleasure
c. Improve efficiency and reduce audit cost and error. to disburse total BDT 3359.97 million to 94 brick field clients
d. Ensure consistent quality of audit work and with modern technologies i.e. Zig-zag, HHK, Auto brick-field.
documentation. Utilization of Islamic Refinancing Fund:
e. To facilitate performing concurrent auditing. Under participatory agreement with Bangladesh Bank, as
f. To facilitate compliance work both in branch end and a pioneer we (AIBL) have successfully bought 46.90million
head office end. against general investment of our 4 clients at a lower rate of
g. To facilitate risk based internal audit through risk 9% in 2017. The main benefit of this fund is 5% spread leading
assessment & branch grading. us to gain profit of approximate BDT 2.34 million (per annum).
h. To generate reports in multifarious purposes as per
requirement. Tree plantation programme-2017:
i. To facilitate preparation of annual audit plan. Aiming to create green earth like each year, Tree Plantation
j. To maintain a complete database of total audit work as Programme-2017 was successfully held through our
well as compliance. rural branches all over Bangladesh. Near about 29,000
k. To facilitate integration with other modules e.g. HRM, (approximately) tree plants has been distributed among mass
BPA, MIS, CRM and other modules. people. The expenditure for tree plantation programmers
Sustainable Finance Unit was 1.66 million (approximately).

Sustainable Finance Unit is formed newly on 05.01.2017 Goals for 2018 of our Unit:
as per Bangladesh Bank circular no 02 date: 01.12.2016. • In the year 2018, new ESRM policy will be effective
After forming it has completed one year successful journey properly.
to its goal. SFU is an integrated approach of Green Banking • As per Bangladesh Bank SFD circular no. 1, date: 15-01-
and Corporate Social Responsibility. In this 21st century, 2018 new quarterly statement will be implemented.
development means not only maximizing profit or wealth; • Conducting green banking awareness program among
rather it ensures environmental and social safety too. In employee, clients and stakeholder.
this era with the support of science and technology large • Audit and supervision of Green banking activities from
45
 our department will be conducted more closely in the to develop manpower and make them employed as well as
year 2018. The monitoring through all over the branch assisting them for employment in abroad.
will be maintained in the year 2018. Comparative CSR Position:
• Tree plantation programme will also be held by all (Amount in MillionTaka)
branches in 2018. Particulars 2016 2017
• We will take proper initiatives for increasing sanction of Health Sector 64.60 10.80
green product under refinance scheme in year 2018. Education Sector 09.70 8.10
• Develop Green archive policy and updating green office Disaster Management 23.20 2.60
guideline accordingly. Cultural Activities 2.00 0.90
The main goal of Sustainable Finance Unit (SFU) is to comply Environment 5.80 1.70
with environment and social risk management guideline, Others 0.00 133.30
Green Banking Policy including Sector Specific Policy, managing Total 105.30 157.40
in house environment i.e. green office guide and convert all
traditional investment into green investment by turn. Cottage, Micro, Small and Medium Enterprises Investment (CMSME)
Corporate Social Responsibility (CSR) Cottage, Micro, Small and Medium Enterprises (CMSME),
works as the platform for job creation, income generation,
The main goal of all bankers is to make profit. From the
and development of forward and backward industrial
feeling of doing something good for the general people of
linkages and fulfillment of local social needs. MSMEs
the society, CSR is main concerned issue now. From this
occupied a unique position in the economy of Bangladesh.
responsibility AIBL takes initiatives of doing welfare to the
Here, the MSMEs account for about 45% of manufacturing
society priority basis. CSR is an integral part of our corporate
value addition. They account for about 80% of industrial
culture and ethics. We respond positively in every sphere of
employment, about 90% of total industrial units and about
social activities. We are delivering innovative solution to our
25% of total labour force.
valued customer and in the same way we are also helping
different areas of social acidity through our CSR activities. In the light of the definition by Bangladesh Bank, Al-Arafah
To enhance social service as part of corporate social Islami bank Ltd. is giving a priority over CMSME financing to
responsibility the Bank has facilitated farmers & freedom three categories of enterprises viz. Industry, Trade & Services.
fighters to open savings accounts with special facilities of Total Investment To CMSME Investment
giving profit on daily balance without realizing any account (Figure in Million)
maintenance fee. The bank has also originated school Description 2016 2017
banking to open savings accounts of school students (minor) Total CMSME Portfolio 94418.60 104743.90
with same facilities as offered to farmers and freedom % of CMSME Portfolio to Total Portfolio 47.63% 43.29%
fighters. During the year 2017 we accomplished different Target of CMSME Investment 50000.00 55000.00
humanitarian and social activities which include allocation Total CMSME Disbursement 7228.475 9568.443
of fund Tk. 157.40million. Besides, we have taken a program % of Achievement 144.57% 173.97%

Blankets were donated to the Honorable Prime Minister’s Fund to help cold-effected people
46
 In CMSME sector, we have a number of collateral free schemes. To promote agricultural sectors properly, our collateral free
Those schemes are running in all Branches. Skilled and agricultural schemes are: Rural Agricultural Investment
experienced staffs are recruited in the concerned branches to Scheme (RAIS) & Khamarbari Investment Scheme. Those
ensure proper expansion of collateral security free investment. schemes are running in all rural Branches. Skilled and
Investment on Women Entrepreneurs experienced staffs are recruited in the concerned branches
to ensure proper development of marginal farmers.
About 50% of the populations of Bangladesh are women.
Women participation in the mainstream of economic activities Special Schemes for Agricultural development
especially in the productive sectors is crucial for attaining Rural Agricultural Investment Scheme (RAIS)
sustainable economic growth, poverty reduction and women’s On the basis of socio-economic development of marginal
empowerment. But women participation in economic sector is and lessee farmers, this agricultural based programme
inadequate and the number of women entrepreneurs is very named ‘Rural Agricultural Investment Scheme (RAIS)’ is
low compared to that of their male counterparts. running in this Bank. Development of country’s internal food
Al-Arafah Islami Bank Ltd. is working with women entrepreneurs production as well as socio-economic sectors of farmers is
to make them capable of earning by connecting with country’s the main focus here. We have already listed 2325 farmers
economic activities. We give priority to women entrepreneurs under this scheme and total investment is Tk. 29.10 million
to invest on various productive sectors. By the side of collateral of which outstanding is Tk. 28.00 million.
secured investment, collateral security free investment is also Al-Arafah Khamerbari Investment Scheme
considered in the question of women development.
To make a priority to invest in the crop sector of Bangladesh,
(Figure in Million)
we have launched the product named: “Al-Arafah Khamerbari
Description Taka Investment Scheme (Khamerbari)”. With this product, we
Total SME Portfolio in Women Entrepreneurs 4554.73 work for farmer’s community surrounding the Branch.
Amount of Disbursement to Women Entrepreneurs 4402.12 Our field officials motivate farmers to grow the potential
corps based on their previous farming experience. This
Agricultural Investment
scheme is an innovative action to develop the crop sector
Agricultural Investment is dealt by Agricultural Department of Bangladesh. We have disbursed 73.00 million investments
functioning under the control of SME Investment Division. To among 1085 farmers under this scheme so far.
face the increasing food shortage of the country, bank is paying
Growing spices at a lowest profit rate (4%)
massive attention to invest on agricultural sectors. The main items
of agricultural sectors are- crops, fisheries, warehouse, poverty As per instruction of Bangladesh Bank, and to increase the
alleviation, irrigation, livestock development etc. At the end of production of different types of spices like Pulse, Oil-seed, Spice
December 2015, total agricultural investment portfolio is Tk. and Maize, we started investment at a lowest rate of profit (only
2800.17 Million for the fiscal year 2016-2017. With collateral and 4%) to the marginal farmers. We have disbursed 23.22 million
without collateral both are practiced in agricultural investment. investments among 487 farmers under this sector so far.
The Achievement of 2016-2017 is as follows: Mudaraba Animal Husbandry Scheme
(Figure In Million) In the concept of Islamic Finance, Mudaraba is a special kind
Sector wise Agricultural Current Fiscal Year Accumulated of partnership business, where one partner gives money to
Disbursement Disbursement Outstanding another and at the end of business cycle, the profit will be
(2016-17) (31/12/2017) distributed between both the parties as per previously signed
a) Crops 293.96 557.71 agreement. The investment comes from the first partner who is
b) Fisheries 641.53 703.88 called “Saheb-ul-maal”, while the management and work is an
c) Crop Storage 110.62 324.85 exclusive responsibility of the other, who is called “Mudarib”.
b) Livestock Development 1611.58 588.59 All the losses will be contributed by the fund provider.
d) Poverty Alleviation 89.86 106.42 In this scheme, Bank shall purchase cows, goats etc. on
a) Irrigation Tools 42.36 179.18 behalf of client under the limit of sanction amount. Clients
e) Agricultural Tools 20.29 130.50 shall responsible for daily maintenance of that animal as per
g) Others 114.69 209.04 terms and conditions. After a certain time, that animal will
Grand Total 2924.89 2800.17 be sold in current market rate and then the profit shall be
distributed as on previous agreement.
In this scheme, we have already disbursed Tk. 19.31 million
for fattening of 401 Cows and 13 Buffalos among 152
farmers so far. This was a great achievement we think. This is
a special scheme in the banking sector of Bangladesh.
Agent Banking
Agent Banking services is one of the new dimensions of
banking services in Bangladesh which are provided through
engaged agents under valid agency agreement. Agent is
47
the owner of one or more than one outlet(s) who conducts
In Bangladesh, the vision 2021 is premised on a safe, efficient
banking transactions on behalf of the bank. This type of
and inclusive financial system where savings and investment
banking is comparatively a new idea that can help the formal
are required to be increased manifold. The financial sector
banking sector reach out to the unbanked & underserved
is expected to play a vital role in mobilizing the substantial
segments of the society through agents. It is playing a
resources required to finance the envisaged flagship projects.
pragmatic role in paving the way for financial inclusion.
The central bank has therefore been trying to explore and
Actually, financial inclusion is a tool for inclusive economic
implement innovative models that will boost Bangladesh’s
growth and financial development of a country.
financial sector to support savings and investment growth.
The important aspect of agent banking is financial inclusion.
Al-Arafah Islami Bank Ltd. is also working with the above
Actually, financial inclusion is a tool for inclusive economic
mission and vision. Along with financial inclusion, Bank shall get
growth and financial development. In Al-Arafah Islami Bank
benefits with Agent Banking activities by increasing its’ low cost
Limited, 70,774 new accounts opened so far. The account
deposits, micro level investments, inward foreign remittance
holders are living in rural areas and were totally un-banked
and a number of accounts. So every Bank should pay attention
for their life-time. But now, their total deposit is 5935.55
to spread Agent Banking activities in all over Bangladesh.
million and the figures are increasing gradually. Clients are
opening accounts, depositing and withdrawing expected Branding & Public Relations
money, taking foreign remittance and getting other banking Improvements in branding and media relations were priorities
services spontaneously. This is one of the greatest examples during the year 2017. In response to the overwhelming
of financial inclusion. expansion in Bank’s business, we extended our publicity to
Statistics of AIBL Agent Banking fulfill the market demand. We brought new dimension in our
branding and publicity for establishing a positive image of the
Al-Arafah Islami Bank Ltd. has launched Agent Banking
Bank. We acquired encouraging national attention towards
Program on 16 June, 2015 and already inaugurated 112 AIBL throughout the year with our all-around activities. More
Agent Banking outlets through 82 Agents so far with a view than 140 news items of the Bank were broadcasted in 600
to bringing the un-banked population under banking services. news coverage through 12 different TV Channels during the
Agent Banking Reports (as on 31/12/2017) year 2017. We continued news branding on 5 major satellite
Particular December 2017 TV channels such as, Ekushey TV, Channel-i, Bangla Vision,
Number of Outlets 112 ATN Bangla and ATN News.
Number of Accounts 70,774 Promotion in the television media got a major hike during the
Total Deposit Tk. 5935.55 Million Ramadan this year. In 11 major TV channels which included
Number of Remittance Disbursed 86,102 NTV, ETV, Channel-9, Boishakhi TV, SA TV and many more,
Amount of Remittance Disbursed Tk. 3132.87 Million the Bank sponsored 15 different programs to encourage true
Amount of Investment in Different Branches Tk. 63.40 Million Islamic values. The initiative was praised by the stakeholders

Donation to the Honorable Prime Minister’s Fund for Father of the Nation Bangabandhu Sheikh Mujibur Rahman Memorial
48

Trust and Prime Minister’s Education Assistance Trust

 and positively put an effect on business. Branding Summery of AIBL in 2017
Positive branding was one of the vitals supports that led the SL Branding Details Frequency During 2017
Bank to hold a firm position in the market. More than 35 1. TV News Items 140 events
interviews and talk shows of the Managing Director and other 600 coverage
top executives were published or broadcasted in several 2. TV Channel Coverage 12 channels
media. The Bank proved its engagements with people by 3. TV Branding (throughout the year) 5 channels
sponsoring several occasions. Banking Fair, SME Fair, School 4. TV Branding during 15 programs
Banking Conference, Anti-Money Laundering Conference, Ramadan 11 channels
Fair of Chittagong Metropolitan Chamber of Commerce & 5. Talkshow/Interview 30 programs
Industry and many more people-related gatherings were 6. PR Published 3280 times
sponsored by the Bank. These activities tightened the 7. Print media covered 60 media
relationship with clients and uplifted Bank’s faithful image. 8. Promotional Advertising 800 advertisements
Our presence in the print media also was bold as we had 9. Publications used 100 publications
3280 Press Release items published in more than 60
different leading Newspapers and Media throughout the Information Technology
year. Besides, more than 800 advertisements took place in In the present day, all business and commercial activities
100 different publications during that year. For 2018 our depend on technology and especially all kinds of banking
advertisement plan will focus to achieve the best outcome transactions are done by On-line Automation system. All
using available media and resources. We shall go into banks are rendering their financial services, DATA analysis
Electronic Media vastly this year, including Radio Branding. & classifications, making the ultimate decision from a truly
Besides, we have taken action to boost-up our promotion in automation system accomplished by the ICT division of any
social media. bank. AIBL started its Automation journey from 2006 and live
The Promotional Plan also indicates that, we have to make their Online Operation in the 2008 that has been going on
our promotion through client service more effective and successfully since inception.
efficient in 2018. Leaflets and Brochures of our products will Beside Core Banking System (CBS) we are also using the below
be made available in every branch. There will be a number of tech based services to automate, secure and faster our internal
Banners, X-Stands and Danglers visible in our branches. We activity as well as to offer our customer better services:
must remember that, a satisfied client is the best advertiser i.RTGS; ii.BEFTN; iii. BACH, iv. ISS Report, v. BPA, vi. CIB,
of the Bank. So, all our promotional steps will be focused vii.goAML- CTR, viii. RIT Reporting, ix. i-Banking, x. Sylvia
to make our customers feel that they are banking with their (HRMS), xi. Agent Banking, xii. Utility Bill Collection, xiii.
own bank when they are with Al-Arafah Islami Bank Limited. Sanction Screening, xiv. FATCA Compliance, xv. SWIFT, xvi.Asset

Donation to the Honorable Prime Minister’s Fund to help Rohingya Refugees

49
Management, xvii. Centralized Anti Virus Management, xviii. technological advancement, Card Division will provide
Mail Server, xix.OBU, xx.Treasury, SMS Alert, xxi. ATM Service, modern day Banking service to our customer Insha Allah.
xxii. Mobile ATM Service, xxiii. Debit Card, xxiv. Credit Cardetc. Risk Management
Following ICT projects have been taken for the year 2018: Risk is generally defined by the adverse impact on the
1. To become one of the first third Technologically profitability of several distinct sources of uncertainty. Risk-
advanced bank in the country within next 3 years taking is an inherent element in the banking business, and,
2. Ensure100% Regulatory Compliance by taking highest indeed profits are in part for successful risk taking in business.
possible ICT security measures within a year. Greater risk and poorly managed risk increase the danger that
3. To take necessary steps to earn highest possible the bank may incur huge losses and be forced out of business.
satisfaction of end-users inICT Supports Service by 2018. A bank must run its operations with two goals- to generate
profits and to stay in business. Thus, banks are maintaining a
Card Division trade-off between risk and return and that is the business of
Card Division of Al-ArafahIslami Bank Limited has been Risk Management. Risk Management’s main objectives are to
offering diversified range of products and services since the identify and measuring the risks and advise mitigation there
beginning to provide the varied needs of the customers. against. Banking operations are mainly exposed to:
Consequences of that, Al-ArafahIslami Bank have introduced • Investment or default Risk (including concentration
the first ever Islamic MasterCard product in Bangladesh. risk, country risk, and settlement risk)
The La- Riba Islamic Credit Card, designed in a way to meet • Market risk (Including interest rate risk in the banking
customer transactional needs while strictly maintaining the book, Forex risk, and equity price risk)
Sariah Principals. We are providing technological advanced • Liquidity risk
Card facilitated service to our valued customers. In busy day • Operational risk
to day urban life everybody prefers quick & advanced way of • Other risks (compliance risk, strategic risk, reputation
performing transaction with the Bank. risk, money laundering risk etc.)
We already were offering discount facility for both Debit AIBL has three lines of defense for identification, assessment,
& Credit card holders & Equal Monthly Installment (EMI) control and mitigation of risks.
facility for credit card holders. We have already signed 1st line of defense: Day to Day Operational Management and
EMI agreement with almost all renowned Furniture Internal Controls
manufacturers, Branded Electronics chain shop, & Lifestyle
retailers and leading Hospitals, Restaurants, Hotels, On- • Branches
line shops. Addition to that, we already signed discount • Support Functions
agreement with almost all renowned Lifestyle retailers 2nd line of defense: Risk Management and Compliance
and leading Hospitals, Restaurants, Hotels. We already Functions
successfully accomplished joint Campaign titled “Experience • Zonal Office
Paris 2017” with MasterCard. Another joint Campaign • Different Risk Management Committees
titled “Winter Spend & Win Campaign” with MasterCard is • Risk Management Division and CRO
ongoing. Our credit card already make a positive impression • Board Risk Management Committee
on potential customers by now and InshaAllahatala, it will 3rd line of defense: Independent Assurance
known to everyone within the country as well as oversees by
these types of promotional activities. It is mentionable that, • Internal Audit
we are providing effective & efficient card service among the • Board Audit Committee
customers in minimal service charge, which is less than any • Supervision of Regulators
credit card in Bangladesh. In accordance with the direction of Bangladesh Bank, AIBL
has established ‘Risk Management Division’ and possesses
We already issuing Hajj card to honorable
board’s approved risk management guidelines designed to
HazziSaheba&Saheban with lowest service charge than any
ensure that risks are identified, monitored and reported.
other Bank in Bangladesh. Its aims to provide service to
Risk Management Division exclusively manages 6 (six) core
Hajji Sahab, Saheban& Hajj agents at low service cost & for
risks in line with the core risk Management guidelines by the
branding of Al-Arafah Islami bank.
Central Bank. AIBLformed All Risk Committee in Management
We launched Instant card for Account Holders. Honorable level in addition tosix separate Core Risk Management
Account Holder is collecting their card from Branch at the Committees to address basic risk management activities
date of account opening. In this year we will increase our ATM like identification, assessment, measurement and mitigation
network by establishing ATMs at prime locations including of risks. Besides, Board Risk Management Committee
shopping malls, Airports, Train Stations, Bus Stoppages, etc. oversights the overall risk management activities of the bank
We will introduce Merchant POS, Branch POS and Agent POS and performs their duties with utmost care to minimize the
for convenience of our customers. risk level. Regular meeting of all the committees are held on
Card Division working round the clock to provide efficient monthly/quarterly basis.
& satisfactory service to our valued customers. Adapting Monthly/Quarterly Risk Management Report and a Half-
50
 yearly Comprehensive Risk Management Report (CRMR) in combating money laundering and terrorist financing
incorporating all risk areas are prepared as per directions of menace is ongoing and continuous. Proper focus and
the prescribed format of Bangladesh Bank. These Reports importance is placed on training. The Central Compliance
are discussed in depth in the All Risk Committee in the Committee (CCC) has been formed and headed by CAMLCO
Management level as well as Board Risk Management which comprises of all heads of BFIU Circular selected
Committee and necessary instructions and guidance are divisions/wings. This committee is entrusted to formulate
given and implemented there against. strategy and Action Plan as and when required. The Division
Money Laundering and Terrorist Financing Prevention set up for MLTF prevention is as follows:
Money Laundering and Financing of Terrorism are interrelated Division is headed by Deputy Chief Anti Money Laundering
and clearly pose a threat locally and internationally. Such Compliance Officer (DCAMLCO). It consists of 04 (Four) Head
risks can only be addressed and mitigated by adopting of Departments with an 8 member team.
internationally recognized guidelines and of course complying Branch Anti Money Laundering Compliance Officer
with circulars, rules and regulations framed by Government (BAMLCO) is stationed in all branches. Their main function
(via Bangladesh Financial Intelligence Unit - BFIU). is to create awareness and understanding on all AML/CFT
As per National and International instructions, Bank has to issues among branch staff, hold periodical meetings with
ensure AML/CFT compliance, otherwise it would be penalized everyone and maintain records.
and foreign business would be hampered seriously. So, AIBL Zonal Anti Money Laundering Compliance Officers
has an established framework for AML/CFT compliance. (ZAMLCOs) are placed in all 8 Zones. They have to ensure
There is a Risk Management Policy Guidelines for AML/CFT that BAMLCOs are discharging their duties properly.
which is approved by our Board of Directors. There are The HO team in MLTFPD frequently interacts with branches
established guidelines/standards for AML/CFT compliance to: (through BAMLCOs) via training and workshops. All the
Regulate branches/zones/departments/divisions/wings etc. branches are subject to periodic audit by Audit & Inspection
Ensure strict compliance with all existing laws and regulatory Division (AID) and scrutiny by ZAMLCOs.
requirements. Bangladesh Bank and Bangladesh Financial Intelligence
The principal theme/slogan is to “maintain complete Unit (BFIU) which are the regulatory arm conduct audit on
and correct information with regard to the identity of selected branches every year. To be noted here that the
its customers during the operation of their accounts”. Banks Training Institute also plays a vital role in organizing
AIBL has taken steps to maintain and verify the identity Workshops and Training Programs.
of our customers in accordance with directions issued by Roles and functions identified in the attached section
BFIU. System is in place to ensure proper KYC (Know Your provides a better picture of the roles and responsibilities and
Customer), information is collected through Customer Due the various functions that the Division engages in on day to
Diligence, accounts are categorized as High and Low risk, day basis:
Master Circular # 19 directives are followed through. 1. Transmittal of Managing Directors message issued
The process to create staff awareness on operational aspects at the beginning of the year to all staff on matters

An MoU was signed between the Bank and Aamra Payment Systems
51
 relating to Money Laundering and Terrorist Financing programs like CAMS (Certified Anti Money Laundering
Prevention emphasized on Zero tolerance principle. Specialist) and CFCS (Certified Financial Crime
2. Formation of Central Compliance Committee (CCC) in Specialist) etc.
09/2017 in line with BFIU directives. It is chaired by the 14. Conducting Site visits to risky & important branches.
CAMLCO. 15. Through proper controls and monitoring fines and
3. Following guidelines formulated and disseminated to penalties are being avoided from Regulators.
all employees/branches: Dividend
Money Laundering and Terrorist Financing Risk Assessment Policy; The bank has been paying dividend every year since 1998
Policy and Guidelines on AML & CFT Risk Management of AIBL; just after conversion of a public limited company. The Board
Customer Acceptance Policy; of Directors of the Bank is pleased to recommend 15% Cash
and 5% Stock dividend in the year 2017.
4. Upgrading the post of DCAMLCO (Deputy Chief Anti
Money Laundering Compliance Officer) in line with Table of Historical Dividend Payment Percentage are as follows:
BFIU recent directives. Year Dividend
5. Division renamed as Money Laundering and Terrorist 2008 30% Bonus
Financing Prevention Division in line with BFIU directive 2009 30% Bonus
& approval from Central Compliance Committee (CCC). 2010 26% Bonus
2011 21% Bonus
6. BAMLCOs list updated and approved by CCC with
2012 17% Bonus
nomination from Branch as per new guidelines.
2013 13.50% Bonus
7. Cash Transaction Report (CTR) and Suspicious 2014 14% Cash
Transaction Report (STR) through goAML software of 2015 10% Cash & 5% Bonus
BFIU are being monitored. 2016 20% Cash
8. Regular trainings programs and workshops are 2017 15% Cash & 5% Bonus
organized and conducted for all staff/branches
including new entrants. Trainers from BFIU are invited
for such sessions.
9. Reviewing of AML & CFT compliance status of branches
by the internal audit team during their periodic audit of
AIBL Branches.
10. Auto screening & hit management system implemented.
11. Distribution of AML/CFT leaflet, poster and festoons
for creating customer and mass awareness.
12. Introduction of group study in the branches on AML/
CFT issues for improvement of know-how of the
officials & achieving better ratings on AML/CFT.
13. Motivation of Staff/officials to pursue education on

The Bank sponsored Bangladesh Junior Science Olympiad to patronize education sector
52
 Credit Rating improvement, changes or achievements of any organization.
Credit Rating Information and Services Limited (CRISL)has All material assets/ resources are to be utilized by human
adjudged rating for Al-Arafah Islami Bank Limited as follows: resources to execute any plan or program. If the human
resources are not found to be capable in utilizing other assets
Long Term : AA (Pronounced Double A) or resources prudently, efficiently and effectively, success of
Short Term : ST-2 any plan/program will be far away. So, it is very important
Based on : Audited Financial Statement 2016 to have a pool of excellent human resources for any
Date of Rating : 30 June 2017 organization/institution. Training involves the development
Validity : 30 June 2018 of skills that are usually necessary to perform a specific job.
Outlook : Stable It brings positive changes in knowledge, skills, attitude and
Year-wise Comparative Rating Position building confidence of the human capital so that they can
Date of Rating Long Term Short Term Outlook be efficient in performing their duties and responsibilities.
30 June 2017 AA ST-2 Stable So, training is regarded to be one of the best means of
30 June 2016 AA ST-2 Stable improving performance.
30 June 2015 AA 2 ST-2 Stable The need for Training Institute was keenly felt in the early
30 June 2014 AA 3 ST-2 Positive seventies to cater to the management training needs of
30 June 2013 AA 3 ST-2 Stable the banking sector. The formation of Al-Arafah Islami Bank
Training & Research Institute (AIBTRI) sine-qua-non for the
Interpretation: development of human resources at the very beginning of
AA+, AA, AA- (Double A) (High Safety) : Securities rated in AIBL.AIBTRI had to concentrate on training of the entry level
this category are adjudged to be of high credit quality and officers due to absence of appropriate training infrastructure
offer higher safety. This level of rating indicates a security in AIBL arena from the very beginning. However, with the
with sound credit profile and without significant problems. passage of time it assumed the responsibility of imparting
Protection factors are strong. Risk is modest but may vary training to the mid and senior level officials of AIBL.
slightly from time to time because of economic conditions. The financial sector of Bangladesh underwent a number
ST-2 (High Grade) : High certainty of timely payment. Liquidity of reforms measures as per structural adjustment in the
factors are strong and supported by good fundamental country. In line with these reforms, the AIBTRI has been
protection factors. Risk factors are very small. adopting new strategies and methods for improving their
services. AIBTRI is also keeping pace by putting its best
Human Resources
efforts to respond to the need for capacity building of
Well educated and skilled manpower is the bestcapital of AIBL officials for implementation of the reform measures.
an organization particularly in bankinginstitution. We put Meanwhile, banking sector of Bangladesh demanded up-
utmost importance onrecruitment and development of gradation of capabilities of managerial level officials as the
humanresources. In recruiting process, we put emphasison bank expanded horizon of operations. In line with that AIBTRI
attracting talented young stars. Total 415 employees in regularly updates its training areas, contents and methods.
different categories/ranks joined ourfleet during the year
Training Scenario in 2017:
2017 raising our totalemployees to 3,446 including 242
Executive as on31.12.2017. AIBTRI conducted a total number of 82 (Eighty Two) Training
Courses, Workshops, Executive Development Programs
We have 3,464 staff in the Bank of whom 224 are executives 2,079
and Outreach Programs where 3,104 participants attended
are officers and 584 other staff a as on December 31st 2016.
during the period from January – December, 2017.
Sl No Designation Category Number Training Courses (TC):
1 Executives 228 To develop the professional skill and knowledge of
2 Officers 2,496 the officials in the field of Shariah banking, economics
3 Others 722 and finance, rural and micro finance, customer service
Total 3,446 development, motivation, capacity building, achieving the
We nominated 404 employees in outside training course viz. target and continuous growth, AIBTRI conducted a total of
BIBM, BBTA, BABetc. in 2017 and they have completed the 21 (twenty one) courses during the year 2017.
course successfully. Training Workshops (TW):
We motivate and facilitate our deserving employees to A total of 40 (forty) workshops were conducted during the
complete international standard professional degrees like year against the target of 65 (sixty five) workshops. Out
CDCS. Presently, wehave 51CDCS of which 11 completed of this, a significant number of workshops were arranged
during theyear 2017. for fulfilling the requirements of current issues relating to
Activities of AIBTRI banking operations like as “Prevention of Money Laundering
and Combating Financing of Terrorism”. Moreover, with a
AIBTRI: A Home of Knowledge for development of Human Capital
view to enhancing skill among the employees, AIBTRI has
Human resources are the main component of development, conducted training workshops on “Capacity Building in
53
Banking Operation”. It is worthy of mentioning that in the academic calendar of
Executive Development Programs (EDP): 2018, we have a plan to introduce Internship Program for the
BBA / MBA students with a view to create an affiliation of the
To meet up the needs of executives, managers, manager potential young generation with the Bank.
operations, in the field of banking, finance, economy,
national integrity strategy, money laundering prevention Branches Control Division :-
and allied fields, AIBTRI conducted 03 (three) EDPs during Branches Control Division (BCD) has been conducting with a
the year 2017. huge volume of works with its all branches relates General
Outreach Training Programs (OTP): Banking activities including Regulatory Authorities of the
country such as :-
AIBTRI conducted 17 (seventeen) outreach training programs
(OTP) at different outstation e.g. zonal offices & other 1. Compliance of different circulars on Customer Service
important places during the period with 631 (six hundred & General Banking issued by Bangladesh Bank, NBR &
& thirty one) officers. The programs had their remarkable other Regulatory Authorities time to time.
impact to create awareness among all types of employees 2. Agency Arrangement i.e Agreement for bill collection
especially young, brilliant and promising officers regarding of DESCO, DPDC, WASA, BTCL, REB etc.
Islamic Economics and Banking, Time & Stress Management, 3. Compliance of NBR, DUDAK, Anti-corruption
Recovery Management, Present Scenario of Economy, Commission etc. Authorities Income Tax related bank
Environment Risk Rating as well as Financial Literacy etc. account information.
Lead Bank Program (LBP): 4. Compliance against General banking related
This year Al-ArafahIslami Bank Ltd. had the privilege of irregularities of the branch raised by Audit & Inspection
organizing the daylong workshop on “Money Laundering Division.
Prevention & Combating Financing of Terrorism” as the lead Branch Network
bank nominated by Bangladesh Bank in Jhalokathi. AIBTRI, as
per instruction of the BFIU successfully arranged, monitored At present we have 154 branches all over the country. In a
and supervised the workshop with 67 (sixty seven) officials bid to expand our network of Branches we got approval to
most of whom are BAMLCOs and the remaining are Branch open 9 (Nine) new branches in 2018.
Managers of different Banks. Appointment of Statutory Auditor
Training Manual: In the 22nd Annual General Meeting of the Bank M/S Hoda
AIBTRI accumulated 06 (six) Training Manuals on Foundation Vasi Chowdhury & Co. Chartered Accountants & M/S Rahman
Course for Newly Recruited MTOs/Officers this year to Mostafa Alam& Co. Chartered Accountants was appointed
facilitate the participants to acquire knowledge on banking & External Auditors of the Bank for a term till conclusion of the
use those as reference in their day to day banking operation. 23rd Annual General Meeting.

In the year 2017, total 82 (Eighty Two) programs were The Board has approved M/S Hoda Vasi Chowdhury& Co.
conducted by the Institute & 3,104 officials have participated Chartered Accountants and M/S Rahman Mostafa Alam& Co.
in those programs i.e. each employee of the bank has Chartered Accountants for appointment as External Auditors
attended more than one course on average. by the shareholders till the 24th Annual General Meeting.

However, we are not complacent with only quantitative Board Meeting

achievement; our main focus is on quality. We are always During the year 2017, 15 regular Board Meetinghad been
striving for qualitative improvement. Keeping this end held. Besides, 41 meetings of Executive Committee, 8
in view, we have prepared the academic calendar 2018 meetings of Audit Committee and 4 Risk management
containing 26 training courses, 4 EDPs, 20 outreach programs Committee of the Board had also been held during the year.
& 55 workshops on various academic & professional issues.
54
 The Board of Directors recommended 15% Cash and Board Executive Committee meeting
5% Stock Dividend subject to approval of AGM

Board Audit Committee meeting Board Risk Management Committee Meeting

Honorable Chairman and other guests at Annual Business Hon’ble State Minister of Land was present in the opening
Development Conference 2018 ceremony of Anowara Branch at Chattogram

Honorable Chairman and Management of the Bank with Managing Director along with other Executives after an Executive
newly recruited MTOs Development Program (EDP) arranged by Training & Research Institute
55
The Bank achieved ‘Best Corporate Award’ from ICMAB for Donation given to Bangladesh Retired Police Officers
Shariah based banking Welfare Association under CSR activities

Managing Director officially inaugurated the SWIFT Signing ceremony between the Bank and NEC Money
Sanctions Screening system Transfer Limited UK

Tree Plantation Program inaugurated by honorable 8th Annual General Meeting of AIBL Capital Market Services
Chairman of the Bank Limited

6th Annual General Meeting of AIBL Capital Management Annual General Meeting of Millennium Information Solution
Limited Limited
56
 Directors’ Report to the Shareholders as per condition No. 1.5 of SEC Notification No. SEC/
CMRRCD/2006-158/Admin/44 Dated 07 August 2012
The Directors also report that: related party transactions is disclosed in the annual
i. Industry outlook and possible future developments in report. Page No.130-132
the industry. Page No 33-34 vii. Utilization of proceeds from public issues, rights issues
ii. Segment-wise or product-wise performance. Page No. and/or through any others instruments. Page No. Nil
37-38 viii. An explanation if the financial results deteriorate after
iii. Risks and concerns. Page No. 92-93 the company goes for Initial Public Offering (IP0), Repeat
iv. A discussion on Cost of Goods sold, Gross Profit Margin Public Offering (RPO). Rights Offer, Direct Listing, etc.
and Net Profit Margin. Page No. 56 Page No. Nil
v. Discussion on continuity of any Extra-Ordinary gain or ix. There is no significant variance occurs between Quarterly
loss. Page No. Nil Financial Performance and Annual Financial Statements.
vi. Basis for related party transactions-a statement of all Highlights along with reasons thereof are given below:

Particular 2017 2016 Growth %

Investment income 20,305.59 18,195.71 11.60%
Profit paid to depositors 11,586.15 10,340.73 12.04%
Net Investment Income 8,719.44 7,854.98 11.01%
Commission, Exchange and other Income 3,084.76 2,896.45 6.50%
Total Operating Income 11,804.20 10,751.43 9.79%
Total Operating Expense 5,101.14 3,996.27 27.65%
Profit before tax and provision 6,703.06 6,755.16 (0.77%)
Provision on Investment and others 1,270.59 1,508.36 (15.76%)
Profit Before tax 5,432.47 5,246.80 3.54%
Provision for taxation 2,355.78 2,206.59 6.76%
Net Profit after tax 3,076.69 3,040.21 1.20%
EPS (Restated 2016) 3.09 3.06 0.03%
During the year 2017 Total Operating Expense increased by 27.65% compared to previous year 2016 due to effect new Pay
scale for the employees
i. Remuneration to directors including independent x. The Bank has declared stock dividend.
directors. Page No. 110 xi. The number of Board meetings held during the year and
ii. The financial statements prepared by the management of attendance by each director has been disclosed. Page
the issuer company present fairly its state of affairs, the No.57
result of its operations, cash flows and changes in equity. xii. The pattern of shareholding has been reported to
iii. Proper books of account of the bank have been disclose the aggregate number of shares(along with
maintained. name details where stated below) held by:-
iv. Appropriate accounting policies have been consistently a. Parent/Subsidiary/Associated Companies and other
applied in preparation of the financial statements and related parties (name wise details); Page No. 130-132
that the accounting estimates are based on reasonable b. Directors, Chief Executive Officer, Company Secretary,
and prudent judgment. Chief Financial Officer, Head of Internal Audit and their
v. International Accounting Standards (IAS)/Bangladesh spouses and minor children (name wise details); Page
Accounting Standards (BAS)/International Financial No.57 & 58
Reporting Standard (IFRS)/Bangladesh Financial
c. c. Executives; Page No. 9-10
Reporting Standards (BFRS), as applicable in
Bangladesh, have been followed in preparation of the d. d. Shareholders holding ten percent (10%) or more
financial statements and any departure there-from has voting interest in the company (name wise details).
been adequately disclosed. Page No. Nil
vi. The system of internal control is sound in design and xiii. Appointment /Reappointment of a director the
has been effectively implemented and monitored. company has been disclosed the following information
vii. There are no significant doubts upon the issuer to the shareholder:-
company’s ability to continue as a going concern. a. A brief resume of the director; Page No.130-132
viii. Significant deviations from the last year’s operating b. Nature of his/her expertise in specific functional areas;
results of the bank has been highlighted and the reasons Page No.130-132
thereof is explained. Page No. Nil b. Name of the companies in which the person also holds
ix. Key operating and financial data of at least preceding 5 the directorship and the membership of committees of
(five) years shall be summarized. Page No.15 the board. Page No.130-132
57
 Directors’ Attendance in the Board Meeting for the year 2017
Sl. No. Name Designation No. of attendance No. of Meeting held Remarks
1 Alhajj Abdus Samad Chairman 14 15
2 Alhajj Abdus Salam Vice Chairman 14 15
3 Alhajj Hafez Md. Enayet Ullah Director 14 15
4 Alhajj Salim Rahman Director 12 15
5 Alhajj Mohammed Emadur Rahman Director 5 15
6 Alhajj Md. Amir Uddin PPM Independent Director 14 15
7 Alhajj Nazmul Ahsan Khaled Director 10 15
8 Alhajj Abdul Malek Mollah Director 14 15
9 Alhajj Md. Harun-ar-Rashid Khan Director 13 15
10 Alhajj Md. Anowar Hossain Director 13 15
11 Alhajj Badiur Rahman Director 11 15
12 Alhajj Kh. Mesbah Uddin Ahmed Director 15 15
13 Alhajj Ahamedul Haque Director 14 15
14 Alhajj A.N.M. Yeahea Director 12 15
15 Alhajj Niaz Ahmed Director 14 15
16 Alhajj Md. Liakat Ali Chowdhury Director 13 15
17 Alhall Badsha Meah Director 0 0
Dr. Md. Shafiul Haider Chowdhury Alternative Director 12 15
18 Alhajj Mohammed Haroon Director 0 0
Jb. Anwar Hossain Alternative Director 9 15
19 Jb. Khalid Rahim FCA Independent Director 14 15
20 Jb. Faruq Ahmad Siddiqi Independent Director 9 15

Statement of Share held by Directors’ and their Spouse and Minor Children
As on 31st December, 2017
Sl. No. Number of the directors Status No. of Share Remarks
1 Alhajj Abdus Samad Chairman, Board of Directors 22,376,392
Mrs. Shahana Ferdous Spouse 718,525
2 Alhajj Mohammed Abdus Salam Vice-Chairman, Board of Directors 20,166,568
3 Alhajj Hafez Md. Enayetullah Chairman Executive Committee, Sponsor Director 19,891,573
4 Jb. Salim Rahman Vice-Chairman Executive Committee, Director 19,887,005
5 Alhajj Mohammed Eamadur Rahman Chairman Board Risk Management Committee, Director 19,910,659
6 Alhajj Md. Amir Uddin PPM Chairman Board Audit Committee, Independent Director -
7 Alhajj Nazmul Ahsan Khaled Sponsor Director 20,719,699
8 Alhajj Abdul Malek Mollah Sponsor Director 19,941,603
Mrs. Laila Begum Spouse 312
9 Alhajj Md.Harun-Ar-Rashid Khan Sponsor Director 19,886,609
10 Alhajj Md. Anowar Hossain Sponsor Director 22,015,623
11 Jb. Badiur Rahman Sponsor Director 27,735,057
Mrs. Syeda Rashida Yasmin Spouse 5,414,934
12 Alhajj Engr. Kh. Mesbahuddin Ahmed Director 19,887,271
Mrs. Ajmeri Ahmed Spouse 8,799,086
13 Alhajj Ahamedul Haque Director 19,886,507
14 Alhajj Abu Naser Mohammad Yeahea Director 24,557,236
15 Alhajj Niaz Ahmed Director 19,988,724
Mrs. Shabana Niaz Spouse 8,198,948
16 Alhajj Md. Liakat Ali Chowdhury Director 19,892,484
17 Alhajj Badsha Meah Sponsor Director 19,886,651
Mrs. Feroza Begum Spouse 308,585
18 Alhajj Mohammed Haroon Sponsor Director 20,002,078
Mrs. Shamsun Nahar Begum Spouse 159,000
19 Jb. Khalid Rahim Independent Director -
20 Jb. Faruq Ahmad Siddiqi Independent Director -
58
 Statement of Shares held by Chief Executive Officer, Company Secretary, Chief Financial Officer,
Head of Internal Control & Compliance Division and their spouses and Minor Children
(As on 31st December, 2017)
Sl No Name of the Directors Status No. of Share Remarks
1 Jb. Md. Habibur Rahman Chief Executive Officer Nil
2 Jb. Md. Mahmudur Rahman Company Secretary Nil
3 Jb. Mohammed Nadim FCA Chief Financial Officer Nil
4 Jb. Muhammad Mahmoodul Haque Head of Internal Control & Compliance Wing Nil

Statement of Shares held by top 5 (Five) salaries employees other than the Director,
Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit
(As on 31st December, 2017)
Sl No Name of the Directors Designation No. of Shares Remarks
1 Jb. Kazi Towhidul Alam Deputy Managing Director Nil
2 Jb. Md. Fazlul Karim Deputy Managing Director Nil
3 Jb. S. M. Jaffar Deputy Managing Director Nil
4 Jb. Mohammed Zubair Wafa Deputy Managing Director Nil
5 Jb. Syed Masodul Bari Executive Vice President & CTO Nil

The Bank donated to Muktijuddho Academy to make an exclusive documentary film on mine-sweeping operation after the
independence
59
 Certificate on Compliance of Conditions of Corporate Governance to
The Shareholders of Al-Arafah Islami Bank Limited

We, in respect of Al-Arafah Islami Bank Limited (the Bank), have examined the status of its compliance for the year ended
31st December, 2017 with conditions of Corporate Governance issued by Bangladesh Securities & Exchange Commission
(BSEC) vide its notification no. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012.
The compliance with the said conditions of Corporate Governance and reporting the status thereof is the responsibility of
the management of the Bank. Our responsibility is to provide a certificate about whether the Bank is in compliance with the
said conditions of Corporate Governance based on our examination.
Our examination has been made for the purpose of issuing this certificate was limited to the procedures including
implementation thereof as adopted by the Bank for ensuring the compliance of the conditions of Corporate Governance
and correct reporting of the status of the compliance on the attached statement on the basis of evidence gathered and
representation received. It is neither an audit nor an expression of opinion on the financial statements of the Bank.
To the best of our information and according to the explanations given to us, we certify that Al-Arafah Islami Bank Limited has
complied with the conditions of Corporate Governance as enclosed stipulated in the above mentioned BSEC’s notification
dated 07 August, 2012.

Dhaka, Dated Sheikh Zahidul Islam FCA, MBA

April 15, 2018 Partner
Khan Wahab Shafique Rahman & Co.
Chartered Accountants

Compliance Status of BSEC Guidelines for Corporate Governance

Status of compliance by AIBL with the Corporate Governance (CG) Guidelines issued by BSEC through Notification No.SEC/
CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012:

Condition Compliance Status (Put 3

Title in the appropriate column) Remarks
No.
(if any)
Not
Complied complied
1 2 3 4 5
1 Board of Directors:
Board’s Size: The number of the board members of the company shall not be less than 5
(five) and more than 20 (twenty):
Provided, however, that in case of banks and non-bank financial institutions, insurance 3
1.1 companies and statutory bodies for which separate primary regulators like Bangladesh
Bank, Insurance Development and Regulatory Authority, etc. exist, the Boards of those
companies shall be constituted as may be prescribed by such primary regulators in so far
as those prescriptions are not inconsistent with the aforesaid condition.
Independent Directors
1.2 All companies shall encourage effective representation of independent directors on their Board of Directors so that the Board, as a group, includes
core competencies considered relevant in the context of each company. For this purpose, the companies shall comply with the following:-
At least one fifth (1/5) of the total number of directors in the company’s board shall be
1.2(i) independent directors. 3
1.2(ii) For the purpose of this clause “independent director” means a director - 
Who either does not hold any share in the company or holds less than one percent (1%) 3
1.2(ii)a) shares of the total paid-up shares of the company;

Who is not a sponsor of the company and is not connected with the company’s any
sponsor or director or shareholder who holds one percent (1%) or more shares of the
total paid-up shares of the company on the basis of family relationship. His/her family
1.2(ii)b) members also should not hold above mentioned shares in the company: 3
Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and
daughter-in-law shall be considered as family members; 
Who does not have any other relationship, whether pecuniary or otherwise, with the 
1.2(ii)c) company or its subsidiary/associated companies; 3
1.2(ii)d) Who is not a member, director or officer of any stock exchange; 3
60
 Compliance Status of BSEC Guidelines for Corporate Governance

Condition Compliance Status (Put 3

Title in the appropriate column) Remarks
No.
(if any)
Not
Complied complied
1 2 3 4 5
1.2(ii)e) Who is not a shareholder, director or officer of any member of stock exchange or an 3
intermediary of the capital market;
Who is not a partner or an executive or was not a partner or an executive during the
1.2(ii)f) preceding 3 (three) years of the concerned company’s statutory audit firm; 3
1.2(ii)g) Who shall not be an independent director in more than 3 (three) listed companies; 3
1.2(ii)h Who has not been convicted by a court of competent jurisdiction as a defaulter in
payment of any loan to a bank or a Non-Bank Financial Institution (NBFI); 3
1.2(ii)i) Who has not been convicted for a criminal offence involving moral turpitude? 3
The independent director(s) shall be appointed by the board of directors and approved by 3
1.2(iii) the shareholders in the Annual General Meeting (AGM).
1.2(iv) The post of independent director(s) cannot remain vacant for more than 90 (ninety) days. 3
The Board shall lay down a code of conduct of all Board members and annual compliance
1.2(v) of the code to be recorded. 3
The tenure of office of an independent director shall be for a period of 3 (three) years, 3
1.2(vi) which may be extended for 1 (one) term only.
1.3 Qualification of Independent Director (ID)
Independent Director shall be a knowledgeable individual with integrity who is able to
1.3(i) ensure compliance with financial, regulatory and corporate laws and can make meaningful 3
contribution to business. 
The person should be a Business Leader/Corporate Leader/Bureaucrat/University Teacher with 
1.3(ii) Economics or Business Studies or Law background/Professionals like Chartered Accountants,
Cost & Management Accountants, and Chartered Secretaries. The independent director must 3
have at least 12 (twelve) years of corporate management/professional experiences.
In special cases the above qualifications may be relaxed subject to prior approval of the 3
1.3(iii) Commission.
Chairman of the Board and Chief Executive Officer
The positions of the Chairman of the Board and the Chief Executive Officer of the
1.4 companies shall be filled by different individuals. The Chairman of the company shall be 3
elected from among the directors of the company. The Board of Directors shall clearly
define respective roles and responsibilities of the Chairman and the Chief Executive Officer.
Directors’ Report to Shareholders
1.5 The directors of the companies shall include the following additional statements in the Directors’ Report prepared under section 184 of the
Companies Act, 1994 (Act No. XVIII of 1994):-
1.5(i) Industry outlook and possible future developments in the industry. 3
1.5(ii) Segment-wise or product-wise performance. 3
1.5(iii) Risks and concerns. 3
1.5(iv) A discussion on Cost of Goods Sold, Gross Profit Margin and Net Profit Margin. 3
1.5(v) Discussion on continuity of any Extra-Ordinary gain or loss. 3
1.5(vi) Basis for related party transactions- a statement of all related party transactions should
be disclosed in the annual report. 3
1.5(vii) Utilization of proceeds from public issues, rights issues and/or through any others instruments. 3
1.5(viii) An explanation if the financial results deteriorate after the company goes for Initial Public
Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc. 3
If significant variance occurs between Quarterly Financial performance and Annual Financial
1.5(ix) Statements the management shall explain about the variance on their Annual Report. 3
1.5(x) Remuneration to directors including independent directors. 3
1.5(xi) The financial statements prepared by the management of the issuer company present
fairly its state of affairs, the result of its operations, cash flows and changes in equity. 3
1.5(xii) Proper books of account of the issuer company have been maintained. 3
Appropriate accounting policies have been consistently applied in preparation of the financial 3
1.5(xiii) statements and that the accounting estimates are based on reasonable and prudent judgment.
International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/
1.5(xiv) International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting
Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the 3
financial statements and any departure there-from has been adequately disclosed.
1.5(xv) The system of internal control is sound in design and has been effectively implemented and monitored. 3
There are no significant doubts upon the issuer company’s ability to continue as a going
1.5(xvi) concern. If the issuer company is not considered to be a going concern, the fact along with 3
reasons thereof should be disclosed.
Significant deviations from the last year’s operating results of the issuer company shall be
1.5(xvii) highlighted and the reasons thereof should be explained. 3
61
 Compliance Status of BSEC Guidelines for Corporate Governance

Condition Compliance Status (Put 3

Title in the appropriate column) Remarks
No.
(if any)
Not
Complied complied
1 2 3 4 5
1.5(xviii) Key operating and financial data of at least preceding 5 (five) years shall be summarized. 3
If the issuer company has not declared dividend (cash or stock) for the year, the reasons
1.5(xix) thereof shall be given.
3

1.5(xx) The number of Board meetings held during the year and attendance by each director 3
shall be disclosed.
1.5(xxi) The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by:-
1.5(xxi)(a) Parent/Subsidiary/Associated Companies and other related parties (name wise details); 3
Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of 3
1.5(xxi)(b) Internal Audit and their spouses and minor children (name wise details);
1.5(xxi)(c) Executives;
Explanation: For the purpose of this clause, the expression “executive” means top 5 (five)
salaried employees of the company, other than the Directors, Chief Executive Officer, 3
Company Secretary, Chief Financial Officer and Head of Internal Audit.
1.5(xxi)(d) Shareholders holding ten percent (10%) or more votes interest in the company (name
wise details). 3
1.5(xxii) In case of the appointment/re-appointment of a director the company shall disclose the following information to the shareholders:-
1.5(xxii)(a) a brief resume of the director; 3
1.5(xxii)(b) nature of his/her expertise in specific functional areas; 3
1.5(xxii)(c) names of companies in which the person also holds the directorship and the membership 3
of committees of the board.
2.00 CHIEF FINANCIAL OFFICER (CFO), HEAD OF INTERNAL AUDIT, AND COMPANY SECRETARY (CS):
Appointment
The company shall appoint a Chief Financial Officer (CFO), a Head of Internal Audit
2.1 (Internal Control and Compliance) and a Company Secretary (CS). The Board of Directors 3
should clearly define respective roles, responsibilities and duties of the CFO, the Head of
Internal Audit and the CS.
Requirement to Attend Board Meetings
The CFO and the Company Secretary of the companies shall attend the meetings of
2.2 the Board of Directors, provided that the CFO and/or the Company Secretary shall not 3
attend such part of a meeting of the Board of Directors which involves consideration of an
agenda item relating to their personal matters.
3 AUDIT COMMITTEE:
3(i) The company shall have an Audit Committee as a sub-committee of the Board of Directors. 3
The Audit Committee shall assist the Board of Directors in ensuring that the financial
3(ii) Statements reflect true and fair view of the state of affairs of the company and in ensuring 3
a good monitoring system within the business.
The Audit Committee shall be responsible to the Board of Directors. The duties of the
3(iii) Audit Committee shall be clearly set forth in writing. 3
3.1 Constitution of the Audit Committee:
3.1(i) The Audit Committee shall be composed of at least 3 (three) members. 3
The Board of Directors shall appoint members of the Audit Committee who shall be
3.1(ii) directors of the company and shall include at least 1 (one) independent director. 3
All members of the audit committee should be “financially literate” and at least 1(one)
member shall have accounting or related financial management experience.
Explanation: The term “financially literate” means the ability to read and understand the
3.1(iii) financial statements like Balance Sheet, Income Statement and Cash Flow Statement and 3
a person will be considered to have accounting or related financial management expertise
if (s)he possesses professional qualification or Accounting/Finance graduate with at least
12 (twelve) years of corporate management/professional experiences.
When the term of service of the Committee members expires or there is any circumstance
causing any Committee member to be unable to hold office until expiration of the term of service,
3.1(iv) thus making the number of the Committee members to be lower than the prescribed number
of 3 (three) persons, the Board of Directors shall appoint the new Committee member(s) to fill 3
up the vacancy(ies) immediately or not later than 1 (one) month from the date of vacancy(ies)
in the Committee to ensure continuity of the performance of work of the Audit Committee.
3.1(v) The company secretary shall act as the secretary of the Committee. 3
3.1(vi) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) 3
independent director.
3.2 Chairman of the Audit Committee:
The Board of Directors shall select 1 (one) member of the Audit Committee to be
3.2(i) Chairman of the Audit Committee, who shall be an independent director. 3
62
 Compliance Status of BSEC Guidelines for Corporate Governance

Condition Compliance Status (Put 3

Title in the appropriate column) Remarks
No.
(if any)
Not
Complied complied
1 2 3 4 5
3.2(ii) Chairman of the audit committee shall remain present in the Annual General Meeting (AGM). 3
Role of Audit Committee:
3.3
Role of audit committee shall include the following:-
3.3(i) Oversee the financial reporting process. 3
3.3(ii) Monitor choice of accounting policies and principles. 3
3.3(iii) Monitor Internal Control Risk management process. 3
3.3(iv) Oversee hiring and performance of external auditors. 3
3.3(v) Review along with the management, the annual financial statements before submission 3
to the board for approval.
Review along with the management, the quarterly and half yearly financial statements 3
3.3(vi) before submission to the board for approval.
3.3(vii) Review the adequacy of internal audit function. 3
3.3(viii) Review statement of significant related party transactions submitted by the management. 3
3.3(ix) Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors. 3
When money is raised through Initial Public Offering (IPO)/Repeat Public Offering
(RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/
3.3(x) applications of funds by major category (capital expenditure, sales and marketing 3
expenses, working capital, etc), on a quarterly basis, as a part of their quarterly declaration
of financial results. Further, on an annual basis, the company shall prepare a statement of
funds utilized for the purposes other than those stated in the offer document/prospectus
3.4 Reporting of the Audit Committee
3.4.1 Reporting to the Board of Directors
3.4.1(i) The Audit Committee shall report on its activities to the Board of Directors. 3
3.4.1(ii) The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:-
3.4.1(ii)(a) report on conflicts of interests; 3
3.4.1(ii)(b) suspected or presumed fraud or irregularity or material defect in the internal control system; 3
3.4.1(ii)(c) suspected infringement of laws, including securities related laws, rules and regulations; 3
3.4.1(ii)(d) any other matter which shall be disclosed to the Board of Directors immediately. 3
Reporting to the Authorities
If the Audit Committee has reported to the Board of Directors about anything which has
material impact on the financial condition and results of operation and has discussed with
3.4.2 the Board of Directors and the management that any rectification is necessary and if the 3
Audit Committee finds that such rectification has been unreasonably ignored, the Audit
Committee shall report such finding to the Commission, upon reporting of such matters
to the Board of Directors for three times or completion of a period of 6 (six) months from
the date of first reporting to the Board of Directors, whichever is earlier.
Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee, including any report made to the 3
3.5 Board of Directors under condition 3.4.1 (ii) above during the year, shall be signed by the
Chairman of the Audit Committee and disclosed in the annual report of the issuer company.
EXTERNAL/STATUTORY AUDITORS:
4
The issuer company should not engage its external/statutory auditors to perform the following services of the company; namely
4(i) Appraisal or valuation services or fairness opinions. 3
4(ii) Financial information systems design and implementation. 3
4(iii) Book-keeping or other services related to the accounting records or financial statements. 3
4(iv) Broker-dealer services. 3
4(v) Actuarial services. 3
4(vi) Internal audit services. 3
4(vii) Any other service that the Audit Committee determines. 3
4(viii) No partner or employees of the external audit firms shall possess any share of the
company they audit at least during the tenure of their audit assignment of that company. 3
Audit / certification services on compliance of corporate governance as required under 3
4(ix) clause (i) of condition No.7
5 SUBSIDIARY COMPANY
Provisions relating to the composition of the Board of Directors of the holding company shall
5(i) be made applicable to the composition of the Board of Directors of the subsidiary company. 3
5(ii) At least 1 (one) independent director on the Board of Directors of the holding company
shall be a director on the Board of Directors of the subsidiary company. 3
5(iii) The minutes of the Board meeting of the subsidiary company shall be placed for review at 3
the following Board meeting of the holding company.
63
 Compliance Status of BSEC Guidelines for Corporate Governance

Condition Compliance Status (Put 3

Title in the appropriate column) Remarks
No.
(if any)
Not
Complied complied
1 2 3 4 5
The minutes of the respective Board meeting of the holding company shall state that they 3
5(iv) have reviewed the affairs of the subsidiary company also.
The Audit Committee of the holding company shall also review the financial statements,
5(v) in particular the investments made by the subsidiary company. 3
6 DUTIES OF CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO): The CEO and CFO  shall certify to the Board that
They have reviewed financial statements for the year and that to the best of their
6(i) knowledge and belief :- 3
these statements do not contain any materially untrue statement or omit any material 
6(i)(a) fact or contain statements that might be misleading; 3
these statements together present a true and fair view of the company’s affairs and are in 
6(i)(b) 3
compliance with existing accounting standards and applicable laws.
There are, to the best of knowledge and belief, no transactions entered into by the 
6(ii) company during the year which are fraudulent, illegal or violation of the company’s code 3
of conduct.
7 REPORTING AND COMPLIANCE OF CORPORATE GOVERNANCE:
The company shall obtain a certificate from a practicing Professional Accountant/
Secretary (Chartered Accountant/Cost and Management Accountant/Chartered
Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the
Commission and shall send the same to the shareholders along with the Annual Report
on a yearly basis.
3
7(i) Explanation: Chartered Accountant means Chartered Accountant as defined in the
Bangladesh Chartered Accountants Order, 1973 (President‘s Order No.2 of 1973); Cost & 
Management Accountant means Cost & Management Accountant as defined in the Cost
& Management Accountants Ordinance, 1977 (Ordinance No. LIII of 1977); Chartered
Secretary means Chartered Secretary as defined in the Chartered Secretaries Act, 2010
(Act No.25 of 2010)
The directors of the company shall state, in accordance with the Annexure attached, in
7(ii) the directors’ report whether the company has complied with these conditions. 3

Appreciation While we look forward to their continuous support and

The Board of Directors expresses its gratitude to the Almighty co-operation with trust and confidence, we reassure that
Allah for enabling us to achieve remarkable progress in all our respected shareholders can expect further satisfactory
respect during the year-2017. Board of Directors takes this results in 2018. May the Almighty, Allah give us dedication,
opportunity to thank the Shariah and Board Members of patience and fortitude to serve the cause of Islam and to go
the Bank for their relentless whole hearted support. Their ahead with our mission to run the Bank as per the principles
collective wisdom contributed extensively to acquiring of of Islamic Shariah.
strength. The Board of Directors also thanks the management May Allah the Almighty bestow his bountiful blessing upon
and the staff for their loyalty, support and untiring efforts us all.
which has resulted in improved performance. The Board of
Directors expresses its thanks to respected shareholders, Allah Hafiz
valued customers, patrons well-wishers, Government, of Ma- Assalam
Bangladesh, Sincerely,
Bangladesh Bank, Registrar of Joint Stock Companies &
Firms, Securities and Exchange Commission, Auditors, Legal
advisers and all others concerned for giving us the benefit
of their support and co-operation. We quietly weigh their
continued support and co-operation which are constant
source of inspiration. We re-assurance our vow to remain Alhajj Abdus Samad Labu
most disciplined, Shariah compliant and result oriented. Chairman
Date: 24th May 2018
64
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66
 Report of the Board Audit Committee (BAC)
In compliance with the guidelines of Banking Companies Act (amended in July 2013), Bangladesh Bank guidelines, notifications
of Bangladesh Securities & Exchange Commission (BSEC) and international best practices of Corporate Governance, the
Audit Committee of the Board of Al-ArafahIslami Bank Limited was formed by the Board of Directors of the bank with a
view to ensuring the achievement of objectives of the bank, efficiency of operations and compliance with applicable laws,
rules, regulations and internal policies to make the bank a strong and dependable organization for all stakeholders, specially
shareholders, depositors and the society as a whole.
Objectives of the Audit Committee
1. Review the financial reporting process, the system of internal control and compliance approach to manage risks, the
audit process, findings of the Central Bank’s comprehensive audit and the Bank’s processes for monitoring compliance
of laws and regulations and its own code of business conduct.
2. Assist the Board in fulfilling its oversight responsibilities including implementation of the objectives, strategies, policies
and overall business plans set by the Board for effective functioning of the bank.
Role and Responsibilities of the Committee
The roles and responsibilities of Board Audit Committee of AIBL have been chalked out on the basis of BRPD Circular No. 11
dated 27 October 2013, corporate governance notification issued by BSEC, dated 07 August, 2012 and other best practice of
corporate governance guidelines and standards. The important roles and responsibilities of the Board Audit Committee are
described below:
1. Review the Internal Control system of the bank to ensure that sufficient Risk Management System is in place to manage
core risk of the bank.
2. Review the Internal Audit Procedure.
3. Review the efficiency and effectiveness of Internal Control System.
4. Consider the recommendations made by the internal and external auditors.
5. Ensure fair presentation of financial statements in compliance with Bangladesh Accounting Standards and Bangladesh
Financial Reporting Standards.
6. Review compliance with the applicable rules and regulations of Bangladesh Bank, BSEC, Bank Company Act- 1991
(amended in July, 2013) and Companies Act, 1994.
7. Report immediately to the Board of Directors on conflict of interest.
8. Report to the Board of Directors on frauds or irregularities or material defects in the Internal Control System.
Composition of the Board Audit Committee (BAC)
The Board Audit Committee was reconstituted by the Board of Directors of the bank in its 306th Meeting held on 06 May,
2017. The Board Audit Committee (BAC) consists of the following 05 (five) members:

SL. No Name Educational Qualification Status with the Bank Status with the
Committee
1 Jb. Md. Amir Uddin PPM BSS (Hon.) Economics, Independent Director Chairman
MSS(Economics)
2 Alhajj Abdus Salam M.Com Director Member
3 Alhajj Abdul Malek Mollah Intermediate Director Member
4 Alhajj Niaz Ahmed M.Com (Accounting), L.L.B. Director Member
5 Jb. Khalid Rahim FCA Independent Director Member
Meetings of Board Audit Committee
During the Year 2017, 08 (eight) meetings of the Committee were held.
Activities during the year
The Board Audit Committee carried out the following activities during the year 2017:-
1. Reviewed the comprehensive inspection report of Bangladesh Bank, evaluated compliance status thereof and advised
the bank management to take necessary action as required.
2. Reviewed performance of internal audit, 2017.
3. Reviewed audited accounts and report of 2017 and recommended those audited report to place to the Board.
4. Reviewed inspection report of different branches of the bank conducted by Internal Control and Compliance Department of
the bank and advised the bank management to enhance deposit, loans & advances including reduction of classified loans.
67
5. Reviewed the compliance status of audit objections and advised the management to ensure full compliance of
regulatory, legal and significant issues meticulously.
6. Reviewed annual financial statements of the bank with appointment of external auditors prior to submission to the
Board for their approval.
7. Reviewed and approved Annual Plan of Risk Based Internal Audit, 2017.
8. Reviewed and approved action plan for turning loss-incurring branches into profitable branches.
9. Reviewed comparative position of half yearly income - expenditure statement as on 30 June, 2017and 30 June, 2016.
10. Recommend measures for improvement of the performance of the bank.
11. Reviewed cost of fund as on June 30, 2017 of the bank.
Acknowledgement
In conclusion, we would like to extend our sincere thanks and profound gratitude to the members of Board of Directors for
allowing the committee to discharge its due role independently.
We also express our gratitude and thanks to the management, auditors, regulatory authorities particularly, Bangladesh Bank
and Bangladesh Securities & Exchange Commission for their cordial co-operation in performing the duties with due diligence.
For and on behalf of Audit Committee.

Md. Amir Uddin PPM

Chairman
Board Audit Committee(BAC)

68
 Independent Auditor’s Report to the Shareholders of
Al-Arafah Islami Bank Limited.
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of Al-Arafah Islami Bank Limited and its subsidiaries
(together referred to as the “Group”) as well as the separate financial statements of Al-Arafah Islami Bank Limited (the
“Bank”) which comprise the consolidated and separate Balance Sheets as at 31December 2017, consolidated and separate
Profit and Loss Accounts, consolidated and separate Statements of Changes in Equity and Cash Flow Statements for the year
then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements of the Group
and also separate financial statements of the Bank that give a true and fair view in accordance with Bangladesh Financial
Reporting Standards (BFRSs) as explained in Note 2 and for such internal control as management determines is necessary
to enable the preparation of consolidated financial statements of the Group and also separate financial statements of the
Bank that are free from material misstatement, whether due to fraud or error. The Banking Companies Act, 1991 and the
central bank (Bangladesh Bank) regulations require the management to ensure effective internal audit, internal control and
risk management functions of the Bank. The management is also required to make a self-assessment on the effectiveness of
anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate
financial statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh Standards
on Auditing (BSAs). Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements of the Group and the separate financial
statements of the Bank are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on our
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements of the
Group and the separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entity’s preparation of consolidated financial statements of the Group and separate
financial statements of the Bank that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements of the Group and the separate financial statements of the Bank.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and also separate financial statements of the Bank give
a true and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at
31December 2017, and of its consolidated and separate financial performance and cash flows for the year then ended in
accordance with Bangladesh Financial Reporting Standards (BFRS) as explained in note 2.
Report on Other Legal and Regulatory Requirements
In accordance with the Companies Act, 1994, Securities and Exchange Rules 1987, the Banking Companies Act, 1991 and the
rules and regulations issued by Bangladesh Bank, 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 purpose of our audit and made due verification thereof;
(ii) to the extent noted during the course of our audit work performed on the basis stated under the Auditors’ Responsibility
section in forming the above opinion on the consolidated financial statements of the Group and the separate financial
statements of the Bank and considering the reports of the Management to Bangladesh bank on anti-fraud internal
controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the Financial
Statements and Internal Control:
(a) internal audit, internal control and risk management arrangements of the Bank as disclosed in the financial statements
appeared to be materially adequate;
(b) nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and
70
 exception or anything detrimental committed by employees of the Bank and its related entities other than matters
disclosed in note 3.A. viii of the financial stetments;
(iii) financial statements of the subsidiaries of the Bank have been audited by other auditors and have been properly
reflected in the consolidated financial statements;
(iv) 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 and proper returns adequate for the purpose of our audit have been received from
branches not visited by us;
(v) the balance sheet and profit and loss account of the Bank together with the annexed notes dealt with by the report are
in agreement with the books of account and returns;
(vi) the expenditures incurred was for the purpose of the Bank’s business;
(vii) the financial statements of the Bank have been drawn up in conformity with prevailing rules, regulations and accounting
standards as well as related guidance issued by Bangladesh Bank;
(viii) adequate provisions have been made for investments and other assets of the Bank which are in our opinion, doubtful
of recovery;
(ix) the records and statements submitted by the branches have been properly maintained and consolidated in the financial
statements of the Bank;
(x) the information and explanations required by us have been received and found satisfactory;
(xi) we have reviewed over 80% of the risk weighted assets of the Bank and spending over 7,860 person hours; and
(xii) Capital Adequacy Ratio (CAR) as required by the Bangladesh Bank has been maintained by the Bank.

Hoda Vasi Chowdhury & Co. Rahman Mostafa Alam & Co.
Chartered Accountants Chartered Accountants

Dhaka, 9 April 2018

71
 Consolidated Balance Sheet As at December 31, 2017
PROPERTY AND ASSETS Notes 2017 2016
Taka Taka
Cash in hand
Cash in hand (including foreign currencies) 5A 2,096,407,675 2,033,960,977
Balance with Bangladesh Bank and its Agents Banks 37,669,574,111 30,853,508,125
(including foreign currencies) 39,765,981,786 32,887,469,102
Balance with other Banks and Financial Institutions 6A
In Bangladesh 1,070,656,791 3,426,434,934
Outside Bangladesh 10,327,998,227 5,703,406,904
11,398,655,018 9,129,841,838
Placement with Banks & Other Financial Institutions 7.A 4,400,000,000 3,333,450,160
Investment in Share & Securities 8A 10,145,490,279 9,158,676,294
Government 8,000,000,000 6,990,000,000
Others 8.A.i 2,145,490,279 2,168,676,294
Investments 9A
General Investments etc. 216,659,827,253 180,155,243,596
Bills purchased and discounted 19,245,407,271 16,364,134,345
235,905,234,524 196,519,377,941
Fixed assets less Accumulated Depreciation 10A 3,260,376,895 3,240,185,718
Other Assets 11A 14,379,554,005 18,631,047,423
Non-Banking Assets - -
Total Assets 319,255,292,507 272,900,048,477

LIABILITIES AND CAPITAL

Liabilities
Placement from Banks & Other Financial Institutions 12 32,218,677,048 25,084,653,806
Deposits and other Accounts 13A
Mudaraba Savings Deposits 32,130,000,015 26,053,949,961
Mudaraba Term Deposits 13.A.ii. 135,929,026,231 104,981,785,080
Other Mudaraba Deposits 13.i. 47,832,419,620 46,027,267,857
Al-wadeeah Current Accounts and Other Accounts etc. 13.ii 26,435,038,160 20,693,095,761
Bills Payable 2,479,779,449 1,947,821,349
244,806,263,475 199,703,920,008
Other Liabilities 14.A 16,608,728,003 23,698,530,129
Deferred tax Liabilities/ (Assets) 15 100,949,200 75,456,597
Total Liabilities 293,734,617,726 248,562,560,539
AIBL Subordinate Bond 3,000,000,000 3,000,000,000
Capital/Share holders Equity
Paid -up Capital 16 9,943,064,280 9,943,064,280
Statutory Reserve 17 7,576,581,114 6,490,088,540
Revaluation Reserve 18 980,376,225 978,069,978
Retained Earnings 19.A 2,259,155,807 2,199,578,985
Total Equity attributable to equity holders of the bank 20,759,177,426 19,610,801,783
Non-Controlling Interest 16.A 1,761,497,355 1,726,686,152
Total Equity 22,520,674,781 21,337,487,935
Total Liability and Share holders equity 319,255,292,507 272,900,048,477
72
 Consolidated Balance Sheet As at December 31, 2017
Notes 2017 2016
Taka Taka
OFF BALANCE SHEET ITEMS
Contingent Liabilities
Acceptance and endorsement 12,460,678,951 10,243,938,166
Letters of Guarantee 20 6,443,409,058 4,981,342,733
Letters of Credit 33,529,501,439 26,110,933,527
Bills for Collection 4,608,308,496 3,652,427,592
Other Contingent Liabilities - -
Total 57,041,897,944 44,988,642,018

Other Commitments :
Documentary Credits and other short term trade related transactions - -
Forward Assets Purchased and forward Deposit placed - -
Undraw note issuance and Revolving underwriting Facilities - -
Undraw Formal standing Facilities, Credit lines and others commitments - -

Total Off Balance sheet items including Contingent liabilities 57,041,897,944 44,988,642,018


Accompanying notes form an integral part of these financial statements.

Hoda Vasi Chowdhury & Co. Rahman Mostafa Alam & Co.
Chartered Accountants Chartered Accountants

Dhaka, 9 April 2018

73
 Consolidated Profit & Loss Accounts For the year ended December 31, 2017
Notes 2017 2016
Taka Taka

Investment Income 21.A 20,491,028,035 18,830,156,209

Profit paid on deposits & Borrowing 22.A (11,784,195,568) (9,957,733,490)
Net Investment Income 8,706,832,467 8,872,422,719
Income from Investment in Shares /Securities 23.A 437,319,085 249,804,490
Commission, Exchange and Brokerage 24.A 2,790,684,690 2,256,415,349
Other Operating Income 25.A 329,353,333 285,324,498
3,557,357,108 2,791,544,337
Total operating income 12,264,189,575 11,663,967,056
Salaries and allowances & contribution to P.F 26.A 3,571,959,651 2,691,997,385
Directors fees & expenses 27.A 18,937,652 15,928,345
Shariah Supervisory Committee’s fees & expenses 28 560,969 222,456
Rent, taxes, insurance and lighting etc. 29.A 584,955,214 519,381,152
Postage, telegram, telephone and stamp etc. 30.A 78,429,866 75,803,110
Legal charges 10,698,639 10,906,430
Auditors’ fee 1,602,500 1,420,500
Salary & Allowances to the Managing Director 15,825,000 13,240,000
Depreciation and repairs to the bank’s properties 31.A 317,899,334 293,324,745
Stationery, printing & advertisement etc. 32.A 125,305,263 95,962,147
Other expenses 33.A 582,245,933 435,558,364
Total operating expenses 5,308,420,021 4,152,935,134
Profit/(Loss) before Tax & provision 6,955,769,554 7,511,031,922
Provision against Investments & Contingent Liabilities 34.A 1,354,891,535 1,547,870,131
Provision for diminution in value of investment - -
Other Provision - -
Total provision 1,354,891,535 1,547,870,131
Profit/(Loss) before Tax 5,600,878,019 5,963,161,791
Current tax 14.1.A 2,405,891,962 2,621,104,450
Deferred tax 15 25,492,603 (7,344,522)
Provision for Taxation 2,431,384,565 2,613,759,927
Net Profit/(Loss) after tax 3,169,493,454 3,349,401,864
Net Profit attributable to:
Equity holders of the bank 3,134,682,251 3,053,388,813
Non-controlling Interest 34,811,203 296,013,051
Profit for the year 3,169,493,454 3,349,401,864
Appropriation
Statutory Reserve 1,086,492,574 1,049,359,837
Non-Controlling Interest 34,811,203 296,013,051
1,121,303,777 1,345,372,888
Transfer to Retained Earnings 2,048,189,677 2,004,028,976
Earning per Ordinary Share (EPS) 39.A 3.15 3.07

Accompanying notes form an integral part of these financial statements

Hoda Vasi Chowdhury & Co. Rahman Mostafa Alam & Co.
Chartered Accountants Chartered Accountants
74

Dhaka, 9 April 2018

 Consolidated Cash Flow Statement For the year ended December 31, 2017
Notes 2017 2016
Taka Taka
Cash flows from operating activities
Investment income receipt in Cash 21,383,831,283 18,365,396,086
Profit paid on deposits and borrowing (11,360,819,054) (10,327,401,253)
Dividend received 88,486,282 520,046,348
Fees & Commission received in cash 2,790,684,690 2,256,415,349
Recoveries from written off investments 309,972,277 126,799,309
Cash payments to employees (3,587,784,651) (2,705,237,385)
Cash payments to suppliers (125,305,263) (95,962,147)
Received from other operating activities (item-wise) 329,353,333 285,324,498
Paid for other operating activities (item-wise) 35.A (1,457,029,985) (1,084,322,588)
Advance income tax paid (4,846,389,088) (2,291,907,683)
Operating profit before changes in operating assets and liabilities 3,524,999,824 5,049,150,534
Changing in Operating assets & liabilities
Increase/(Decrease) of trading securities 23,186,015 502,458,193
Increase/(Decrease) of placement to other banks (1,066,549,840) (2,233,450,160)
Increase/(Decrease) of Investment and advances to customers (other than Banks) (40,182,505,104) (34,036,802,876)
Increase/(Decrease) of other assets (item-wise) 36.A 8,263,939,784 4,201,942,654
Increase/(Decrease) of placement from other banks and financial institution 7,134,023,242 12,288,737,789
Increase/(Decrease) of Deposits from customers (other than Banks) 44,678,966,954 30,186,506,369
Increase/(Decrease) of Other liabilities account of customers - -
Increase/(Decrease) of Trading liabilities (item-wise) 37.A (12,039,886,171) (4,842,641,347)
Cash receipt from operating activities 6,811,174,879 6,066,750,622
A. Net Cash from operating activities 10,336,174,703 11,115,901,157
Cash flows from investing activities: - -
Proceeds from sale of securities - -
Payments for purchases of securities - -
Purchase of property, plant and equipment (180,314,202) (450,219,674)
Sales proceeds of Fixed assets - -
Purchase-sale of subsidiary - -
B. Net cash flows from investing activities (180,314,202) (450,219,674)
- -
Cash flows from financing activities
Increase in Exchange Equalization Account 1,937,451 (13,519,962)
Issue of AIBL Subordinate Bond - -
Dividend paid - (946,958,503)
C. Net cash flows from financing activities 1,937,451 (960,478,465)
- -
D. Net increase in cash and cash equivalent (A+B+C) 10,157,797,952 9,705,203,018
E. Effects of exchange rate changes on cash and cash-equivalents - -
F. Net increase in cash and cash equivalent D+E 10,157,797,952 9,705,203,018
G. Cash & Cash Equivalents at the beginning of the year 49,006,838,852 39,301,635,835
H. Cash & Cash Equivalents at the end of the year 38.A 59,164,636,804 49,006,838,852

Accompanying notes form an integral part of these financial statements.

75
 Consolidated Statement of Changes in Equity For the year ended December 31, 2017

Particular Paid up Statutory Retained Asset Revaluation Total Non-Controlling Total

Capital Reserve Earnings Reserve Interest Equity
Balance at 1st January, 2017 9,943,064,280 6,490,088,540 2,199,578,985 978,069,978 19,610,801,783 1,726,686,152 21,337,487,935
Changes in accounting policy - - - - - -
offload share
Restated Adjustment - - - - - -
Restated balance 9,943,064,280 6,490,088,540 2,199,578,985 978,069,978 19,610,801,783 1,726,686,152 21,337,487,935
Surplus/deficit on account of revaluation of properties - - - - -
Surplus/deficit on account of revaluation of investments - - - - - -
Currency translation differences recognized in the income - - - 2,306,247 2,306,247 - 2,306,247
Share premium - -
Net profit for the year - - 3,134,682,251 - 3,134,682,251 34,811,203 3,169,493,454
Bonus Share - - (1,988,612,856) - (1,988,612,856) - (1,988,612,856)
Cash Dividend - - - - - -
Issue of share capital of subsidiary - - - - -
Gain on pre acquisition of subsidiary - - - - - - -
Revaluation of subsidiary - - - - - - -
Transferred to retained earning - - - - - - -
Appropriations during the year - 1,086,492,574 (1,086,492,574) - - - -
Balance as at December 31,2017 9,943,064,280 7,576,581,114 2,259,155,806 980,376,225 20,759,177,425 1,761,497,355 22,520,674,780
Balance as at December 31,2016 9,943,064,280 6,490,088,540 2,199,578,985 978,069,978 19,610,801,783 1,726,686,152 21,337,487,935

76
77

Consolidated Statement of Liquidity (Maturity Analysis of Assets and Liabilities)

For the year ended December 31, 2017
SL Particulars Less than 1 to 3 3 to 12 1 to 5 More than Total
No 1 Month Months Months Years 5 Years
1 2 3 4 5 6 7 8
1 Assets :
Cash in hand 39,765,981,786 - - - - 39,765,981,786
Balance with other Bank and Financial Institution 5,982,362,824 2,113,532,194 - - 3,302,760,000 11,398,655,018
Placement with Banks & Other Financial Institutions - 4,400,000,000 - - - 4,400,000,000
Investments (in Shares & Securities) - - - 10,145,490,279 - 10,145,490,279
Investments 64,829,975,723 67,948,500,000 82,135,500,000 2,917,553,000 18,073,705,801 235,905,234,524
Fixed Assets including premises (Land & Bulding) - - - - 3,260,376,895 3,260,376,895
Other Assets 1,475,000,000 61,400,000 41,000,000 - 12,802,154,007 14,379,554,007
Non Banking Assets - - - - - -
Total Assets 112,053,320,333 74,523,432,194 82,176,500,000 13,063,043,279 37,438,996,703 319,255,292,509
2 Liabilities :
Placement from Banks & Other Financial institutions 19,745,854,548 4,787,300,000 7,685,522,500 - - 32,218,677,048
Deposits 35,425,730,752 81,203,632,723 102,832,800,000 18,978,800,000 6,365,300,000 244,806,263,475
Other Accounts - - - - - -
Provision and Other Liabilities - - - - 16,608,728,004 16,608,728,004
Deferred tax Liabilities/ (Assets) - - - - 100,949,200 100,949,200
AIBL Subordinate Bond - - - - 3,000,000,000 3,000,000,000
Total Liabilities 55,171,585,300 85,990,932,723 110,518,322,500 18,978,800,000 26,074,977,204 296,734,617,727
Net Liquidity Gap 56,881,735,033 (11,467,500,529) (28,341,822,500) (5,915,756,721) 11,364,019,498 22,520,674,781

The Liquidity statement is prepared on contractual basis and which usually renewable. As a result it may not be actually alarming situation due to mismatch of assets & liability.
 Balance Sheet as at December 31, 2017
PROPERTY AND ASSETS Notes 2017 2016
Taka Taka
Cash in hand 5
Cash in hand (including foreign currencies) 2,096,167,797 2,029,561,090
Balance with Bangladesh Bank and its Agents Banks (including foreign currencies) 37,669,574,111 30,853,508,125
39,765,741,908 32,883,069,215
Balance with other Banks and Financial Institutions 6
In Bangladesh 1,007,124,597 3,426,429,934
Outside Bangladesh 10,327,998,227 5,703,406,904
11,335,122,824 9,129,836,838
Placement with Banks & Other Financial Institutions 7 4,400,000,000 2,800,000,000
Investment in Share & Securities 8
Government 8,000,000,000 6,990,000,000
Others 20,592,123 1,448,160,988
8,020,592,123 8,438,160,988
Investments 9
General Investments etc. 213,368,821,452 172,805,258,100
Bills purchased and discounted 19,245,407,271 16,364,134,345
232,614,228,723 189,169,392,445
Fixed assets less Accumulated Depreciation 10 3,089,827,651 3,074,024,258
Other Assets 11 15,371,459,393 21,840,168,129
Non-Banking Assets - -
Total Assets 314,596,972,623 267,334,651,873

LIABILITIES AND CAPITAL
Liabilities
Placement from Banks & Other Financial institutions 12 30,904,054,548 25,084,653,806
Deposits and other Accounts 13
Mudaraba Savings Deposits 32,130,000,015 26,053,949,961
Mudaraba Term Deposits 136,764,993,508 105,332,062,757
Other Mudaraba Deposits 13.i 47,832,419,620 46,027,267,857
Al-wadeeah Current Accounts and Other Accounts etc. 13.ii 26,435,038,160 20,693,095,761
Bills Payable 2,479,779,449 1,947,821,349
245,642,230,752 200,054,197,685
Other Liabilities 14 14,273,105,891 19,534,082,882
Deferred tax Liabilities/ (Assets) 15 100,949,200 75,456,597
AIBL Subordinate Bond 3,000,000,000 3,000,000,000
Total Liabilities (12+13+14+15) 293,920,340,391 247,748,390,970
Capital/Share Holders Equity
Paid up Capital 16 9,943,064,280 9,943,064,280
Statutory Reserve 17 7,576,581,114 6,490,088,540
Revaluation Reserve 18 980,376,225 978,069,978
Retained Earnings 19 2,176,610,612 2,175,038,104
Total Share holders equity 20,676,632,231 19,586,260,902
Total Liability and Share holders equity 314,596,972,623 267,334,651,873
78
 Balance Sheet as at December 31, 2017
Notes 2017 2016
Taka Taka
OFF BALANCE SHEET ITEMS
Contingent Liabilities
Acceptance and endorsement 12,460,678,951 10,243,938,166
Letters of Guarantee 20 6,443,409,058 4,981,342,733
Letters of Credit 33,529,501,439 26,110,933,527
Bills for Collection 4,608,308,496 3,652,427,592
Other Contingent Liabilities - -
Total 57,041,897,944 44,988,642,018


Other Commitments :

Documentary Credits and other short term trade related transactions - -
Forward Assets Purchased and forward Deposit placed - -
Undraw note issuance and Revolving underwriting Facilities - -
Undraw Formal standing Facilities, Credit lines and others commitments - -
Total Off Balance sheet items including Contingent liabilities 57,041,897,944 44,988,642,018

Accompanying notes form an integral part of these financial statements.

Hoda Vasi Chowdhury & Co. Rahman Mostafa Alam & Co.
Chartered Accountants Chartered Accountants

Dhaka, 9 April 2018

79
 Profit & Loss Accounts For the year ended December 31, 2017
Notes 2017 2016
Taka Taka

Investment Income 21 20,305,586,115 18,195,715,103

Profit paid on deposits & Borrowing 22 (11,586,148,356) 10,340,732,845
Net Investment Income 8,719,437,759 7,854,982,258

Income from Investment in Shares /Securities 23 391,135,221 658,693,471
Commission, Exchange and Brokerage 24 2,407,886,232 1,991,029,049
Other Operating Income 25 285,736,748 246,733,971
3,084,758,201 2,896,456,491
Total operating income 11,804,195,960 10,751,438,749

Salaries and allowances & contribution to P.F 26 3,491,198,259 2,621,492,527
Directors fees & expenses 27 10,096,318 11,344,045
Shariah Supervisory Committee’s fees & expenses 28 560,969 222,456
Rent, taxes, insurance and lighting etc. 29 570,174,901 507,626,451
Postage, telegram, telephone and stamp etc. 30 77,669,122 75,212,802
Legal charges 10,481,205 10,694,700
Auditors’ fee 1,337,500 1,245,500
Salary & Allowances to the Managing Director 15,825,000 13,240,000
Depreciation and repairs to the bank’s properties 31 309,625,798 286,535,214
Stationery, printing and advertisement etc. 32 123,433,001 94,067,522
Other expenses 33 490,739,481 374,593,749
Total operating expenses 5,101,141,554 3,996,274,966
Profit/(Loss) before Tax & provision 6,703,054,406 6,755,163,783
Provision against Investments & Contingent Liabilities 34 1,270,591,535 1,508,364,596
Provision for diminution in value of investment - -
Total provision 1,270,591,535 1,508,364,596
Profit/(Loss) before Tax 5,432,462,871 5,246,799,187
Current tax 14.1 2,330,292,331 2,213,937,829
Deferred tax 15 25,492,603 (7,344,522)
Provision for Taxation 2,355,784,934 2,206,593,306
Net Profit/(Loss) after tax 3,076,677,937 3,040,205,881
Appropriation
Statutory Reserve 1,086,492,574 1,049,359,837
General Reserve - -
1,086,492,574 1,049,359,837
Retained Earnings 1,990,185,363 1,990,846,044
Earning per Ordinary share (EPS) 39 3.09 3.06

Accompanying notes form an integral part of these financial statements.

Hoda Vasi Chowdhury & Co. Rahman Mostafa Alam & Co.
Chartered Accountants Chartered Accountants
Dhaka, 9 April 2018
80
 Cash Flow Statement For the year ended December 31, 2017
Notes 2017 2016
Taka Taka
Cash flows from operating activities
Investment income receipt in Cash 21,181,862,736 18,176,535,698
Profit paid on deposits and borrowings (11,162,771,842) (10,710,400,608)
Dividend recieved 58,829,043 483,354,609
Fees & Commission received in cash 2,407,886,232 1,991,029,049
Recoveries from write off investments 309,972,277 126,799,309
Cash payments to employees (3,507,023,259) (2,634,732,527)
Cash payments to suppliers (123,433,001) (94,067,522)
Received from other operating activities (item-wise) 285,736,748 246,733,971
Paid for other operating activities (item-wise) 35 (1,194,013,406) (1,008,293,482)
Advance income tax paid (3,427,931,996) (1,965,466,717)
Operating profit before changes in operating assets and liabilities 4,829,113,532 4,611,491,780
Changing in Operating assets & liabilities
Increase/(Decrease) of trading securities 1,427,568,865 (85,465,685)
Increase/(Decrease) of placement to other banks (1,600,000,000) (1,700,000,000)
Increase/(Decrease) of Investment and advances to customers (other than Banks) (45,910,811,251) (35,302,290,118)
Increase/(Decrease) of other assets (item-wise) 36 9,042,698,009 3,500,285,032
Increase/(Decrease) of placement from other banks and financial institution 5,819,400,742 12,288,737,789
Increase/(Decrease) of Deposits from customers (other than Banks) 45,164,656,553 30,201,309,627
Increase/(Decrease) of Other liabilities account of customers - -
Increase/(Decrease) of Trading liabilities (item-wise) 37 (6,395,885,881) (2,444,929,182)
Cash receipt from operating activities 7,547,627,037 6,457,647,463
A. Net Cash from operating activities 12,376,740,569 11,069,139,244
Cash flows from investing activities:
Proceeds from sale of securites - -
Payments for purchases of securities - -
Purchase of property, plant and equipment (292,475,281) (404,873,075)
Sales proceeds of Fixed assets - -
Purchase-sale of subsidiary - -
B. Net cash flows from investing activities (292,475,281) (404,873,075)
Cash flows from financing activities
Increase in Exchange Equalization Account 2,306,247 (13,519,962)
Subordinate Debt - -
Increase in Share Capital -
Dividend paid (1,988,612,856) (946,958,503)
C. Net cash flows from financing activities (1,986,306,609) (960,478,465)
D. Net increase in cash and cash equivalent (A+B+C) 10,097,958,679 9,703,787,704
E. Effects of exchange rate changes on cash and cash-equivalents - -
F. Net increase in cash and cash equivalent (D+E) 10,097,958,679 9,703,787,704
G. Cash & Cash Equivalents at the beginning of the year 49,002,906,053 39,299,118,349
H. Cash & Cash Equivalents at the end of the year 38 59,100,864,732 49,002,906,053
81
 Statement of Changes in Equity For the year ended December 31, 2017

Particular Paid up Statutory Retained Asset Revaluation Total

Capital Reserve Earnings Reserve Equity
Balance at 1st January, 2017 9,943,064,280 6,490,088,540 2,175,038,103 978,069,978 19,586,260,902
Changes in accounting policy - - - - -
Issue of the share capital - - - - -
Restated balance 9,943,064,280 6,490,088,540 2,175,038,103 978,069,978 19,586,260,902
Surplus/deficit on account of revaluaton of properties - - - - -
Surplus/deficit on account of revaluaton of investments - - - - -
Currency translation differences recognized in the income - - - 2,306,247 2,306,247
Net gain and losses not recognised in Income Statement - - - - -
Net profit for the year - - 3,076,677,938 - 3,076,677,938
Cash - - (1,988,612,856) - (1,988,612,856)
Bonus Share - - - - -
Issue of share capital - - - -
Transferred to retained earning - - - - -
Appropriations during the year - 1,086,492,574 (1,086,492,574) - -
Total shareholders’ equity as on December 31,2017 9,943,064,280 7,576,581,114 2,176,610,611 980,376,225 20,676,632,231
Total shareholders’ equity as on December 31,2016 9,943,064,280 6,490,088,540 2,175,038,103 978,069,978 19,586,260,902

82
83

Statement Of Liquidity (Maturity Analysis of Assets and Liabilities)

For the year ended December 31, 2017

SL Particulars Less than 1 to 3 3 to 12 1 to 5 More than Total

No 1 Month Months Months Years 5 Years
1 2 3 4 5 6 7 8
1 Assets :
Cash in hand 39,765,741,908 - - - - 39,765,741,908
Balance with other Bank and Financial Institution 5,982,362,824 2,050,000,000 - - 3,302,760,000 11,335,122,824
Placement with Banks & Other Financial Institutions - 4,400,000,000 - - - 4,400,000,000
Investments (in Shares & Securities) - - - 8,020,592,123 - 8,020,592,123
Investments 64,829,975,723 67,948,500,000 82,135,500,000 2,917,553,000 14,782,700,000 232,614,228,723
Fixed Assets including premises (Land & Bulding) - - - - 3,089,827,651 3,089,827,651
Other Assets 1,475,000,000 61,400,000 41,000,000 - 13,794,059,395 15,371,459,395
Non Banking Assets - - - - - -
Total Assets 112,053,080,455 74,459,900,000 82,176,500,000 10,938,145,123 34,969,347,046 314,596,972,625
2 Liabilities :
Placement from Banks & Other Financial Institutions 19,745,854,548 4,787,300,000 6,370,900,000 - - 30,904,054,548
Deposits 35,425,730,752 82,039,600,000 102,832,800,000 18,978,800,000 6,365,300,000 245,642,230,752
Other Accounts - - - - - -
Provision and Other Liabilities - - - - 14,273,105,892 14,273,105,892
Deferred tax Liabilities/ (Assets) - - - - 100,949,200 100,949,200
AIBL Subordinate Bond - - - - 3,000,000,000 3,000,000,000
Total Liabilities 55,171,585,300 86,826,900,000 109,203,700,000 18,978,800,000 23,739,355,092 293,920,340,392
Net Liquidity Gap 56,881,495,155 (12,367,000,000) (27,027,200,000) (8,040,654,877) 11,229,991,954 20,676,632,232

The Liquidity statement is prepared on contractual basis and which usually renewable. As a result it may not be actually alarming situation due to mismatch of assets & liability.
 Notes to the Financial Statements As at and for the year ended December 31, 2017
1. The Bank and its activities
1.1 Al-Arafah Islami Bank Limited was established in 1995 under the Companies Act, 1994 as a Banking Company with
Limited Liability by shares. It is an interest free Shariah Bank of Bangladesh rendering all types of commercial banking
services under the regulation of Bank Companies Act, 1991 (as amended 2013) . The Bank conducts its business on the
principles of Musharaka, Bai-Murabaha, Bai-Muazzal and Hire Purchase transactions approved by Bangladesh Bank.
Naturally, its modes and operations are substantially different from those of other conventional commercial banks. There
is a Shariah Supervisory Committee in the bank who maintains constant vigilance to ensure that the activities of the bank
are being conducted on the percepts of Islam. The Shariah Supervisory Committee consists of prominent Ulema, reputed
Bankers. The Bank went for public issue of share in the year 1998 and its share are listed with Dhaka Stock Exchance (DSE)
and Chaittagong Stock Exchange (CSE). Presently the bank has 154 Branches and 3 (three) Subsidiary Companies.
The principal activities of the Bank are to provide a comprehensive range of financial services including commercial
banking, consumer banking, trade finance and other related custody and clearing services to the customers following the
provisions of Bank Companies Act, 1991 (as amended), Bangladesh Bank’s directives and the principles of Islamic Shariah.”
1.2 Subsidiaries of the Bank
Al-Arafah Islami Bank Ltd has three subsidiary companies. The financial statements of these subsidiary companies are
included in the cosolidated financial statements according to BFRS-10.
1.2.1 AIBL Capital Market Services Limited
Al-Arafah Islami Bank Ltd. owned 60.50% shares of AIBL Capital Market Services Ltd. a subsidiary company of Al-
Arafah Islami Bank Limited. AIBL Capital Market Services Ltd. incorporated in Bangladesh on 20 September, 2010 as a
Public Limited Company. The principal activities of subsidiary company is to provide quality services to the prospective
institutional and individual investors in the capital market. The main activities and functions of the company include;
i.  Share trading in Dhaka Stock Market and Chittagong Stock Market.
ii.   Provide Margin facilities to the client.
iii. Full service depository participant of Central Depository of Bangladesh Ltd.
Copy of the audited financial statement is attached Appendix A
1.2.2 AIBL Capital Management Limited
Al-Arafah Islami Bank Ltd. owned 98% shares of AIBL Capital Management Limited a subsidiary company of Al-Arafah
Islami Bank Limited. AIBL Capital Management Limited has been incorporated under the Companies Act (Act XVIII)
of 1994 as a Private Limited Company by share on 25th October, 2011. The company was entitled to commence the
business also from 25th October, 2011 with a view to run and manage the operations of Merchant Banking Services
with an authorized Capital of BDT 2 billion and paid up capital of BDT 500 million . It aims to be one of the leading
Merchant Banks of the country by rendering quality Merchant Banking Services with a high level of professional
expertise and integrity.
Copy of the audited financial statement is attached in Appendix B
1.2.3 Millennium Information Solution Limited (MISL)
Al-Arafah Islami Bank Ltd. owned 51% shares of Millennium Information Solution Limited, a subsidiary company of Al-
Arafah Islami Bank Limited. Millennium Information Solution Limited, a private limited Company was incorporated in
Bangladesh under the Companies Act 1994 on February 11, 2001. This company was acquired by the Bank-AIBL during
the year as per 250th meeting of the Board dated November 30, 2013. Subsequently, Bangladesh Bank approved
the acquisitions of MISL vide letter no. BRPO (R-I) 717/2015-2017, Dated March 28, 2015. The main objective of the
company is to carry on activities relating to developing software products and providing maintenance and support
services to both the domestic and international clients. Over the years, MILS has established itself as the leading
software developer, implementation and service provisioning company in Bangladesh which adheres to the rules of
Islamic Shariah.
2. Basis of preparation and significant accounting policies
2.1 Preparation of financial statements
The consolidated financial statements of the group and the financial statements of the bank have been prepared on a
going concern basis under the historical cost convention and on Generally Accepted Accounting Principles consistently
with those of previous years. Although the operations of the Bank are in strict compliance with the rules of Islamic
Shariah, the financial statements have been prepared in accordance with the Bank Companies Act 1991 (as amended
2013), in particular Banking Regulation and Policy Department (BRPD) Circular No.15 (09 November, 2009) other
Bangladesh Bank circulars, the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka and Chittagong
Stock Exchange Listing Regulations, other laws and rules applicable in Bangladesh and International Accounting
Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the Institute of Chartered
Accountants of Bangladesh (ICAB) into Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting
Standards (BFRS) where relevant to the Bank to the extent that these do not contradict with the applicable statutory
84
 Notes to the Financial Statements As at and for the year ended December 31, 2017
provisions and standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions.
2.2 Basis of Consolidation
“A separate set of records for consolidating the Statements of Affairs and Income & Expenditure Statements of the
branches are maintained at the Head Office of the Bank in Dhaka from which the financial statements are drawn up.
Subsidiries are entities controlled by the group. Control exists when the group has the power to govern the financial
and operating policies of an entity, so as to obtain economic benefits from its activities.
The consolidated financial statements incorporate the financial statements of Al-Arafah Islami Bank Limited and the
fianancial statements of subsidiary companies from the date that control commences until the date that control
ceases. The financial statements of such subsidiary companies are incorporated on a line by line basis and the
investments held by the bank is eliminated against the corresponding share capital of subsidiaries in the consolidated
financial statements.
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions
are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there are no evidence of impairment. “
2.3 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.
2.4 Liquidity Statement
The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term
as per the following basis:
i) Balance with other banks and financial institutions, money at call and short notice, etc. are on the basis of their
maturity term;
ii) Investments are on the basis of their respective maturity;
iii) Fixed assets are on the basis of their useful lives;
iv) Other assets are on the basis of their realization / amortization;
v) Borrowing from other Banks, financial institutions and agents, etc are as per their maturity / repayment terms;
vi) Provisions and other liabilities are on the basis of their repayment / adjustments schedule.
2.5 Use of estimation and judgment
The preparation of financial statements requires the bank to make certain estimates and to form judgments about the
application of accounting policies which may affect the reported amount of assets, liabilities, income and expenses.
The most significant areas of estimates and judgments have been made on provision for Investments.
2.6 Reporting period
The financial statements cover particular calendar period from January 01, 2017 to December 31, 2017.
2.7 Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise
the asset and settle the liability simultaneously.
2.8 Assets and basis of their valuation
2.8.1 Cash and cash equivalent
BFRS: Cash and cash equivalent items should be reported as cash item as per BAS 7.
Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, treasury bills,
Bangladesh Bank bills and prize bond are not shown as cash and cash equivalents. Money at call and on short notice
presented on the face of the balance sheet, and treasury bills, prize bonds are shown in investments.
2.8.2 Investments
Investments are stated in the Balance Sheet net of profit receivable/mark-up profit.
Investment write-off
Investment are normally written off, when there is no realistic prospect of recovery of these amounts in accordance
with BRPD Circular No.2 (13 January, 2003). A separate Investment Administration and Recovery Department (IARD)
has been set up at the Head Office, which monitors investment written off and legal action through the Money Court.
These write-offs do not undermine or affect the amount claimed against the borrower by the bank.
The Investment Administration and Recovery Department (IARD) maintains a separate ledger for all individual cases
written off by each branch. The IARD follows up on the recovery efforts of these written off investment and reports
to management on a periodic basis. Written off investment are reported to the Credit Information Bureau (CIB) of
85
 Notes to the Financial Statements As at and for the year ended December 31, 2017
Bangladesh Bank.
2.8.2.1 Investment in shares and securities
BFRS: As per requirements of BAS 39 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.
2.8.2.2 Revaluation gains/losses on Government securitie
BFRS: As per requirement of BAS 39 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. Interest 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.
2.8.2.3 Provision on loans and advances/investments
BFRS: As per BAS 39 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 (23 September, 2012), BRPD Circular No. 19 (27 December, 2012) and
BRPD Circular No. 05 (29 May, 2013) a general provision at 0.25% to 5% under different categories of unclassified
loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also provision for
sub-standard loans, doubtful loans and bad losses has to be provided at 20%, 50% and 100% respectively for loans
and advances 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.
2.8.2.4 Investment in subsidiaries
The bank has made investment in subsidiary company named AIBL Capital Market Service Ltd Tk. 242.00 crore
holding 60.50% shares. The rest of 39.50% shares are hold by others and another subsidiary Company named AIBL
Capital Management Limited Tk 49.00 crore holding 98% shares. Another subsidiary company named Millenium
Information Solution Limited (MISL) Tk. 15.00 Crore holding 51% shares.
2.8.3 Fixed assets Accounting & Depreciation and Intangible Assets Accounting & Amortization Policy.
Board of Directors of Al- Arafah Islami Bank Limited in its 226th meeting held on 11 July, 2012 has approved “Fixed
Assets accounting & depreciation and Intangible Assets accounting & amortization Policy” which has been effected
from January 2012.
i) All fixed assets except land are stated at cost less accumulated depreciation and accumulated impairment loss as per
BAS-16 “ Property, Plant and Equipment”. Acquisition cost of an asset comprises the purchase price and any directly
attributable cost of bringing the asset to working condition for its intended use.
ii) Land is recognised at cost at the time of acquisition and subsequently measured at revalued amounts which is the
market value at the time of revaluation done by a independent professional valuer on 31st December 2012, any
surplus on revaluation is shown as equity component until the disposal/de-recognition of asset. The property is
located within:
a) Dist : Dhaka, P. S Motijheel, Sub - registry office : Sutrapur, Dhaka collectorate Touzi # 141-B-1, Mouza : Sabek Shahar
Dhaka, Sheet # 22, Ward # 03,Holding No 63,Purana Palton Sabek Khatian # 6947, 6947 [KA], 6947[Jha], Sabek Dag #
97, 100,101,102 and 110, SA Mouza : Ramna, Sheet # 10, SA Khatian # 362, SA Dag # 1979,1980,1981,2025,1997,1998
and 1979/2039, RS Mouza : Motijheel, RS Khatian # 420, RS Dag # 1314 and 1322, D.P Khatian # 619, D.P Dag # 812
and 804.Mutation Khatian 362/3 and Dag # 1979 and 1980. The area of land measuring about 16.42 katha,
b) Holding No 63/1/A, Purana Palton, Dist: Dhaka, P.S Motijheel,Subregistry office: Sutrapur ,Dhaka Collectorate Touzi
# 141-B-1, under Mouza: Sabek-Sahar Dhaka then Ramna, Hal-Motijheel, J-L#S.A-04, R.S & City Jarip - 06, Sheet #
22,Ward # 03, Khatian-C.S-6947 (Jha), S.A-428, Dhaka City Jarip-103,449, Namjari-542, 362/3/1, Jote-543,687&437,Dag
86

# C.S-100,101, S.A 1979, 1980, 1981,1997,2025,1979/2039,R.S-1315,1322,1316/1360,1323/1359, Dhaka City

 Notes to the Financial Statements As at and for the year ended December 31, 2017
Jarip-08,809,811. Deed # 3825 300, dated: 22.08.2010 & 01.02.2012. The area of land measuring about (6.91+7.03)
13.94 katha,
c) Total land measuring 30.36 katha, cost price was Tk. 453,255,000. The land was revalued at tk. 4.50 crore per katha
and total land valuation amount Tk. 1,366,200,000. Total asset revaluation gains amounting Tk. 912,945,000.
Depreciation of an item of fixed assets and amortization on intangible assets is charged on the basis of estimated
useful lives as mentioned in revised fixed asset policy of the bank on monthly basis following straight-line method.
The depreciation/amortization method used should reflect the pattern in which the asset’s economic benefits are
consumed by the enterprise. The depreciation charge for each period should be recognized as an expense unless it
is included in the carrying amount of another asset.
iv) Depreciation/amortization rates used for each type of fixed assets are as follows (per annum):
v) Depreciation is charged on the addition of fixed assets and intangible assets are amortized from the month of
acquisition. Whole month depreciation/amortization is to be charged if such assets are acquired in the first half of
the month and no depreciation/amortization is to be charged if such assets are acquired in the second half of the
month; no depreciation is charged from the month when the assets are disposed.
vi) Maintenance and repair costs are charged to profit and loss account as and when incurred.
vii) Presentation of intangible asset
BFRS: An intangible asset must be identified and recognised, and the disclosure must be given as per BAS 38.
Bangladesh Bank: There is no regulation for intangible assets in BRPD Circular No. 15.
2.8.4 Other assets
Other assets include all balance sheet accounts not covered specifically in other areas of the supervisory activity and
such accounts may be quite insignificant in the overall financial condition of the Bank.
2.8.5 Non-banking asset
BFRS: No indication of Non-banking asset is found in any BFRS.
Bangladesh Bank: As per BRPD Circular No. 15, there must exist a face item named Non-banking asset.
2.8.6 Reconciliation of inter bank/branch books of accounts
Books of accounts in regard to Inter-branches are reconciled and there are no material differences, which may affect
Name of Assets Rate of Depreciation/ amortization Estimated usefull Lives
Furniture and Fixture (Wood) 10% 10 years
Furniture and Fixture (Steel ) 10% 10 years
Computer 20% 5 years
Computer Accessories 20% 5 years
Motor Car 20% 5 years
Mechanical Appliances 20% 5 years
Books 10% 10 years
Online Hardware 20% 5 years
Land Nil Nil
Building 2.50% 40 years
Interior Decoration 10% 10 years
Online Software 20% 5 years

the financial statements significantly. Unrecognized entries in case of inter-branch transactions as on the reporting
date are not mentionable due to the time gap before finalizing the same. (Note -14.4)
2.9 Share Capital
Ordinary shares are classified as equity, when there is no contractual obligation to transfer cash or other financial assets.
2.10 Statutory reserve
Bank Companies Act, 1991 requires the Bank to transfer 20% of its current year’s profit before tax to reserve until
such reserve along with share premium equals to its paid up capital.
2.11 Revaluation reserve
When an asset’s carrying amount is increased as a result of revaluation, the surplus amount should be credited
directly to equity under the heading of revaluation surplus/reserve as per BAS-16: “Property, Plant and Equipment”.
The bank first revalued its land in December 2004 and again in December 2012 which is absolutely owned by the
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 Notes to the Financial Statements As at and for the year ended December 31, 2017
bank and the surplus amount transferred to revaluation reserve. (Annexure-A)
2.12 Non-controlling interest
Non-controlling interest is that portion of the profit or loss and net assets of the subsidiaries (AIBL Capital Market Services
Limited,AIBL Capital Management Limited and Millenium Information Solution Limited (MISL)) attributable to equity
interests that are not owned, directly or indirectly through subsidiaries, by the parent (Al-Arafah Islami Bank Limited).
2.13 Basis for valuation of liabilities and provisions
2.13.1 Provisions on Investment
a Provision for Investment are made on the basis of year end review by the management and instructions contained
in Bangladesh Bank BRPD Circular No. 05 dated 05 June, 2006 & BRPD Circular No. 10, dated 18 September, 2007 &
Subsequent changes as per BRPD Circular No.14 dated 23 Spetemebr, 2012 and BRPD Circular No.05 dated 29 May,
2013 . The provision rates are given below:
2.13.2 Loans and advances/Investments net of provision
BFRS: Loans and advances/Investments are presented should be net of provision.
Bangladesh Bank: As per BRPD Circular No. 14 dated September 23, 2012, provision on loans and advances/
investments are presented separately as liability and can not be netted off against loans and advances.
2.13.3 Provision for off balance sheet exposures
BRPD circular no.10 (18 September, 2007) requires a general provision for off balance sheet exposure is to be
calculated at 1% (2007:0.50%) on all off balance sheet exposures as defined in BRPD Circular No.10 (24 Novemberm,
2002). Accordingly we have recognized a provision of 1% on the following off balance sheet items:
1. Letter of Guarantee
2. Letter of Credit
3. Bills for Collection
4. Acceptance and endorsements
5. Other Contingent Liabilities
iv) 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
off-balance sheet items on the face of the balance sheet.
Bangladesh Bank: As per BRPD Circular No. 14 dated September 23, 2012, off balance sheet items (e.g. Letter of
credit, Letter of guarantee etc.) must be disclosed separately on the face of the balance sheet.
v) Provision for other assets
Particulars Rate
General provision on unclassified general loans and advances / investments 1%
General provision on unclassified small enterprise financing 0.25%
General provision on unclassified loans / investments for housing finance and on loans for professionals 2%
General provision on unclassified BHS/MHS/SDS 2%
General provision on unclassified consumer financing other than housing finance and loans
for professionals 0.25% to 5%
General provision on special mention account 0.25% to 5%
Specific provision on substandard loans and advances / investments 20%
Specific provision on doubtful loans and advances / investments 50%
Specific provision on bad / loss loans and advances / investments 100%
BRPD Circular No. 14 (25 June, 2001) requires a provision of 100% on other assets which are outstanding for one year
and above.
vi) Provision on balance with other banks and financial institutions (Nostro Accounts)
Provision for unsettled transaction on nostro accounts made are reviewed at each balance sheet date by management
and certified by our external auditor in accordance with Bangladesh Bank Foreign Exchange Policy Department
(FEPD) Circular Letter No. 677 (13 September, 2005)
vii) Provision for taxation
Current tax
Provision for current income tax has been made @40.00% as prescribed in the Finance Act 2017 of the profit made
88

by the bank considering taxable add-back of income and disallowance of expenditure in compliance with BAS-12 “
 Notes to the Financial Statements As at and for the year ended December 31, 2017
Income Taxes”. Tax return for the income year 2016 (Assessment year 2017-2018) has been filed but assessment is to
be done by the tax authority.
Deferred tax
The bank recognized deferred tax in accordance with the provision of BAS-12. Deferred tax arises due to temporary
difference deductible or taxable for the events or transaction recognized in the income statement. A temporary
difference is the difference between the tax base of an assets or liability and its carrying amount/reported amount
in the financial statement. Deferred tax assets or liability is the amount of income tax payable or recoverable in
future period(s) recognized in the current period. The deferred tax assets/expenses does not create a legal liability/
recoverability to and from the income tax authority. The bank recognizes deferred tax on 100% specific provision
investment which will be write off as per Bangladesh Bank Circulars.
viii) Provision for gratuity
Gratuity Fund benefits are given to the staff of the bank in accordance with the approved Gratuity Fund rules.
National Board of Revenue has approved the gratuity fund as a recognized gratuity fund on October 10, 2010. The
fund is operated by a Board of Trustees consisting of 06 (six) members of the bank. The employees who serve at least
07 (seven) years in AIBL 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. So that actuarial valuation is not considered essential.
ix) Retirement benefit and staff welfare schemes
The Bank operates a Contributory Provident Fund, Social Security Fund and Benevolent Fund. These funds are
managed by separate Board of Trustees.
x) Other provision and accrued expenses
In compliance with BAS-37, provision and accrued expenses are recognised in the fianancial statements when the
bank has legal or constructive obligation as a result of past event, it is probable that an outflow of economic resources
will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.
2.14 Revenue recognition
2.14.1 Profit on Investment
a) Income from investments has been accounted for on accrual basis except investment under Musharaka. Income in
case of Musharaka is accounted for on realization basis.
b) Profit/rent/compensation accrued on classified investment are suspended and accounted for as per Circulars issued
by the Bangladesh Bank. Moreover, incomes which are irregular (doubtful) as per Shariah are also not included
in the distributable income of the Bank. Bank charges compensation on unclassified overdue Bai-Murabaha and
Bai-Muazzal investment. Such compensation is not permissible by Shariah to take into regular income of the bank.
Therefore, the amount of compensation treated as a component of provision against bad & doubtful investment.
Interest received due to legal obligation is also not taken into regular income of the bank.
c) Profit on investment is calculated on daily product basis and charged on yearly basis.
d) Recognition of interest in suspense
BFRS: Loans and advances to customers are generally classified as ‘loans and receivables’ as per BAS 39 and interest
income is recognised through effective interest rate method over the term of the loan. Once a loan is impaired,
interest 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 a loan is classified, interest on
such loans are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an
interest in suspense account, which is presented as liability in the balance sheet.
2.14.2 Fees and commission income
Fees and commission income are recognized when earned. Commission charged on customer on letters of credit and
letters of guarantee are credited to income at the time of effecting the transactions.
2.14.3 Other comprehensive income
BFRS: As per BAS 1 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 neither Other Comprehensive Income
nor the elements of Other Comprehensive Income are 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.
2.14.4 Dividend Income
Dividend Income from investment is recognised at the time when it is declared, ascertained, and right to receive the
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 Notes to the Financial Statements As at and for the year ended December 31, 2017
payment is established.
2.15 Management and other expenses
Expenses incurred by the bank are recognised on actual and accrual basis.
2.16 Sharing of investment income
The investment income (except exchange and commission income) is shared between depositors and the bank at the
ratio of 70 : 30.
2.17 Foreign currency transactions
i) The transactions in foreign currencies are converted into equivalent Taka currency using the ruling exchange rates
prevailed on the dates of such transactions.
ii) The assets and liabilities denominated in foreign currencies as at 31 December, 2017 are translated into Taka
currencies at the prevailing selling and buying rates of the concerned foreign currencies.
iii) Gains and losses of translation are dealt with through exchange account.
2.18 Basic Earning per share
This has been calculated by dividing the basic earning attributable to ordinary shareholders of the bank by the
weighted average number of ordinary shares outstanding during the year as per BAS-33. Diluted earning per share is
required to be calculated for the period, when there is scope for dilution during the period under review.
2.19 Related Party transactions
Related party transaction is a transfer of resources, services, or obligation between related parties, regardless of
whether price is charged as per BAS 24.
2.20 Events after reporting period
All the material events after the reporting period have been considered; appropriate adjustments and disclosures
have been made in the financial statements.
2.20.1 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. As such full disclosure and presentation requirements of BFRS 7 and BAS
32 cannot be made in the financial statements.
2.20.2 Financial guarantees
BFRS: As per BAS 39, 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 Circular No. 14 dated September 23, 2012, 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.
2.20.6 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.
Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.
2.21 Approval of the financial statements
Financial Statements were approved by the Board of Directors on 320th meeting held on 09 April 2018 has approved
the audited financial statements for the year ended 31 December 2017. The Board has also recommended 15% cash
and 5% Stock dividend for the year ended 31 December 2017 subject to approval of the shareholders at the 23th
Annual General Meeting (AGM).
2.22 General
i) The financial statements have been prepared in accordance with the formats prescribed under the Banking
Companies Act, 1991 (as amended 2013) and in compliance with the rules of Islamic Law (Shariah) related to the
banking business activities.
ii) The figures appearing in these accounts have been rounded off to the nearest taka.
iii) Wherever necessary previous years’ figures have been rearranged to conform to the current years’ presentation.
3.A Risk Management
The risk of Al-Arafah Islami Bank Limited is defined as the possibility of losses, financial or otherwise. The risk
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 Notes to the Financial Statements As at and for the year ended December 31, 2017
management of the Bank covers 6 (six) Core Risk Areas of banking i.e Credit risk management, foreign exchange risk
management, Assets Liability Management, prevention of money laundering and establishment of internal control
and compliance and information & communication technology. The prime objective of the risk management is that the
bank takes well calculative business risks while safeguarding the bank’s capital, its financial resources and profitability
from various risks. In this context, the bank took steps to implement the guidelines of Bangladesh Bank as under :
i) Credit Risk Management
Credit risk is one of the major risks faced by the bank. This can be described as potential loss arising from the failure
of a counter party to perform as per 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 credit risk management activities have
been designed to address all these issues. The bank has an investment (Credit) risk management committee at head
office. The committee reviews the investment risk issues on monthly basis. The bank has segregated the investment
approval, investment administration, investment recovery and legal authority. The bank has segregated duties of the
officers/executives involved in credit related activities. A separate business development (marketing) department
has been established at head office, which is entrusted with the duties of maintaining effective relationship with
the customer, marketing of credit products, exploring new business opportunities etc. In the branches of the bank
separate officials are engaged as relationship manager, documentation officer, verification officer, disbursement
officer and recovery officer. Their jobs have been allocated and responsibilities have been defined.
Investment (Credit) Risk Grading Manual
The bank has implemented the Investment (Credit) Risk Grading Manual (IRGM) since April 1, 2006 which is made
mandatory by Bangladesh Bank vide BRPD Circular No. 18 of December 11, 2005. Investment Officials of the bank
have been trained on IRGM. Investment Risk Grading is incorporated in the investment presentation form for all the
cases.
ii) Foreign Exchange Risk Management
Foreign exchange risk is defined as the potential change in earnings arising due to change in market prices. As
per foreign exchange risk management guideline, bank has established a separate treasury department at head
office. Under the treasury department, foreign exchange front office, foreign exchange back office and local money
market have been physically demarketed. Duties and responsibilities of them have also been defined. All foreign
exchange transactions are revalued at mark to market rate as determined by Bangladesh Bank at the month end. All
Nostro accounts are reconciled on monthly basis and outstanding entry beyond 30 (thirty) days is reviewed by the
management for its settlement. Regulatory reports are submitted on time to Bangladesh Bank.
iii) Assets Liability Management
The Asset Liability Committee (ALCO) 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
of trading nature. ALCO reviews liquidity requirement of the bank, the maturity of assets and liabilities, deposit and
lending pricing strategy and the liquidity contingency plan. The primary objective of ALCO is to monitor and avert
significant volatility in net profit income, investment value and exchange earnings.
iv) Internal control and compliance
“Effective internal controls are the foundation of safe and sound banking. A properly designed and consistently
enforced system of operational and financial internal control helps the bank management to safeguard the bank’s
resources, produce reliable financial and managerial report, and comply with laws and regulations.
AIBL has taken all-out efforts to mitigate all sorts of risk in line with the guidelines issued by Bangladesh Bank. To
this effect, the bank has formed an Internal Control & Compliance (ICC) division headed by Senior Vice President.
The ICC division has been segregated to three departments which are audit & inspection department,
audit monitoring department and regulatory compliance department. AIBL internal control contains self-
monitoring mechanisms and to ensure effective control DCFCL, Investment documentation checklist and quarterly
operation report have been developed and implemented. Internal audit and internal control teams carries out
regular audit and surprise/special inspection of the branches to mitigate operational risk and restrain the possibility
of circumvention or overriding the control procedure. ICC division submits parallel comprehensive internal audit
report to the managing director and to the audit committee. Within 02 (two) months after receiving the audit report,
audit monitoring department completes the compliance report and submits the report to the audit committee
for their review. The committee reviews the system of internal control and the audit process for compliance with
rules, regulation and code of conduct, financial reporting process, and also suggests actions to remedy the lapses/
irregularities. By this time the ICC dvision has introduced concurrent audit, surprise inspection, auto information
system, Quarterly Audited System, and mandatory leave policy to boost-up the functions of internal control and
compliance.”
v) Prevention of money laundering
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 Notes to the Financial Statements As at and for the year ended December 31, 2017
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 risk the bank has a Central Compliance Unit (CCU) at head office.
The unit reviews the anti money laundering activities of the bank on regular basis. The bank has a designated Chief
Anti Money Laundering Compliance Officers (CAMLCO) at head office and Branch Anti Money Laundering Compliance
Officers (BAMLCO) at branches. The compliance officers review the Suspicious Transaction (STR) and records them
properly. Manuals have been established for the prevention of money laundering and transaction profile has been
introduced. Training has been continuously given to all category of officers and executives for developing awareness
and skill for identifying suspicious activities. The bank submits the STR, CTR and other periodical reports to Bangladesh
Bank on time.
vi) Guideline on information & Communication Technology:
Technology is the process by which humans modify nature to meet their needs and wants. The term Information
Technology (IT) means computers, auxiliary equipment, software, hardware and similar procedures, services and
related resources. Information Technology (IT) developed in a rapidly changing global environment, and challenges
us to courageous initiatives to address a host of vital skilled human resources. To overcome the challenges the bank
has a IT policy. The IT policy of the bank includes the purchase policy, hardware policy, software development policy,
banking application usage policy, security policy, disaster recovery policy etc. The bank is now implementing its on
line banking project complying the IT policy.
vii) Internal Audit
“As per Internal Control & Compliance (ICC) Risk Management Guideline of Bangladesh Bank, a ’Risk Based Audit
Plan‘’ is to prepared for each calendar year for smooth conducting of Audit & Inspection of all the branches and
departments & divisions of Head Office of the bank. Besides the Yearly Auditing, Internal Audit Department Conducts
Special Audit, Quarterly Foreign Exchange & Investment Audit, Surprise Audit etc.
To prevent incidence of errors and their recurrences, more emphasis are given on spot rectification of irregularities/
lapses while auditing/inspecting of the branches.
For Audit purpose, branches have been segregated into 05 risk categories ( Extremely High, Very High, High, Medium
& low risk).
The regular Audit & Inspection Teams also conduct Core Risks System Audit during their regular Audit & Inspections.
viii) “Fraud and Forgeries:
During the year 2013, Audit and Inspection department of ICCD, have detected some incidents/irregularities as fraud-
forgery relating to cash misappropriation and investment disbursement in 03 branches of the Bank, which is little in
terms of Bank’s overall financial transactions. In order to not jeopardize the bank’s interest, all such irregularities were
regularized/mitigated by recovery of the defalcated money through strong monitoring and close supervision by the
ICC Division. Furthermore, administrative actions were also taken against the delinquent officers/persons involved.
Compliances of these issues were duly reported to the Board Audit Committee and Bangladesh Bank in time as per
regulatory guidelines.
During the year 1st January to 31st December, 20167 Audit and Inspection department of ICCD, have detected
some incidents/irregularities as fraud-forgeries relating to cash misappropriation and investment disbursement in
02 branches of the Bank, which are not material in terms of Bank’s overall financial transactions. In order to not
jeopardize the bank’s interest, all such irregularities were regularized/mitigated by recovery of the defalcated money
through strong monitoring and close supervision by the ICC Division. Furthermore, administrative actions were also
taken against the delinquent officers/persons involved. Compliances of these issues were duly reported to the Board
Audit Committee and Bangladesh Bank in time as per regulatory guidelines.
3.B Risk Based Capital (Basel III)
To comply with the international best practices and to make the bank’s capital more risk sensitive as well as to
build the banking industry more shock absorbent and stable, Bangladesh Bank is aimed to implement Basel-II
reporting from 2010 and Basel-III reporting from 2015. As per the directive of Bangladesh Bank, all scheduled banks
in Bangladesh are now required to report risk based capital adequacy for banks under Basel-III along with the existing
capital adequacy rules and reporting under Basel-I and Basel-II during the parallel run i.e. 2009 and 2010 respectively.
All scheduled banks are also required to disclose capital adequacy in both quantitative and qualitative terms. The first
disclosure as per guidelines shall be made as on the effective date viz. January 01, 2015.
3.C Compliance status on Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards
(BFRS)
The Institute of Chartered Accountants of Bangladesh (ICAB) is the sole authority for adoptation of Bangladesh
Accounting Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs). While preparing the financial
statements, the Bank has applied the following BAS and BFRSs as adopted by ICAB.
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 Notes to the Financial Statements As at and for the year ended December 31, 2017
Name of the BAS BAS No. Status
Presentation of Financial Statements 1 Applied
Inventories 2 N/A
Cash Flow Statements 7 Applied
Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied
Events after the Balance Sheet Date 10 Applied
Construction Contracts 11 N/A
Income Taxes 12 Applied
Segment Reporting 14 Applied
Property, Plant and Equipment 16 Applied
Leases 17 Applied
Revenue 18 Applied
Employee Benefits 19 Applied
Accounting for Government Grants and Disclosure of Government Assistance 20 N/A
The Effects of Changes in Foreign Exchange Rates 21 Applied
Borrowing Costs 23 Applied
Related Party Disclosures 24 Applied
Accounting for Investments 25 Applied
Accounting and Reporting by Retirement Benefit Plans 26 N/A
Consolidated and Separate Financial Statements 27 Applied
Investments in Associates 28 N/A
Interests in Joint Ventures 31 N/A
Financial Instruments: Disclosure and Presentation 32 Applied*
Earnings per share 33 Applied
Interim Financial Reporting 34 Applied
Impairment of Assets 36 Applied
Provisions, Contingent Liabilities and Contingent Assets 37 Applied
Intangible Assets 38 Applied
Financial Instruments: Recognition and Measurement 39 Applied*
Investment Property 40 N/A
Agriculture 41 N/A
Name of the BFRS BFRS No. Status
First time adoption of BFRS 1 N/A
Share based payment 2 N/A
Business combination 3 N/A
Insurance contracts 4 N/A
Non current assets held for sale and discontinued operation 5 N/A
Explortaion for and evaluation of mineral resources 6 N/A
Financial Instruments: Disclosures 7 Applied*
Consoliidated Financial Statement 10 Applied
Disclosures of interest in other entities 12 Applied
Fair value Measurement 13 Applied
Regulatory defrral accounts 14 N/A
Revenue from contractors with customers 15 Applied
* To comply with Bangladesh Bank regulations as mentioned above certain departure has been made.
3.D New accounting standards not yet adopted:
The Bank has consistently applied the accounting policies as set out in Note 2 to all periods presented in these
financial statements. The various amendments to standards, including any consequential amendments to other
standards, with the date of initial application of 1 January 2017 have been considered. However, these amendments
have no material impact on the financial statements of the Bank.
In December 2017, ICAB has decided to adopt IFRS replacing BFRS effective for annual periods beginning on or after
1 January 2018. However, since currently issued BFRS have been adopted from IFRS without any major modification,
such changes would not have any material impact on financial statements.
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 Notes to the Financial Statements As at and for the year ended December 31, 2017
A number of standards and amendments to standards are effective for annual periods beginning after 1 January
2017 and earlier application is permitted. However, the Bank has not early applied the following new standards in
preparing these financial statements.
“(a) BFRS 9 Financial Instruments (to be adopted as IFRS 9) BFRS 9, published in July 2014, replaces the existing
guidance in BAS 39 Financial Instruments: Recognition and Measurement. BFRS 9 includes revised guidance on
the classification and measurement of the financial instruments, a new expected credit loss model for calculating
impairment of financial assets, and the new general hedge accounting requirements. It also carries forward the
guidance on recognition and derecognition of financial instruments from BAS 39. BFRS 9 is effective for annual
reporting periods beginning on or after 1 January 2018, with early adoption permitted. As per the Bank’s assessment,
any material impact of BFRS 9 would be primarily on calculation of impairment provision. However, as Bangladesh
Bank has not issued any circular to revise its current impairment, classification and measurement policies to align
with BFRS 9 the Bank is unable to quantify any potential impact on its financial statements.”
“(b) BFRS 15 Revenue from Contracts with Customers (to be adopted as IFRS 15) BFRS 15 establishes a comprehensive
framework for determining whether, how much and when revenue is recognised. It replaces existing recognition
guidance, including BAS 18 Revenue, BAS 11 Construction Contracts and BFRI 13 Customer Loyalty Programmes.
BFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted.
Based on preliminary assessment the Bank has determined that BFRS 15 has no material impact on its financial
statements.”
“(c) IFRS 16 Leases” IFRS 16, issued in January 2016 replaces existing leases guidance and effective for reporting
period beginning on or after 1 January 2019. It will result in almost all leases being recognised on the balance sheet,
as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to
use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and
low-value leases. The accounting for lessors will not significantly change. The Bank has not yet assessed any potential
impact of IFRS 16 on its financial statements.
“(d) IFRS 17 Insurance Contracts” IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning
on or after 1 January 2021. IFRS 17 establishes the principles for the recognition, measurement, presentation and
disclosure of insurance contracts within the scope of the standard. The objective of IFRS 17 is to ensure that an entity
provides relevant information that faithfully represents those contracts. The Bank has not yet assessed in potential
impact of IFRS 17 on its financial statements.
There are no other standards that are not yet effective and that would be expected to have a material impact on the
Bank in the current or future reporting periods and on foreseeable future transactions.
4 Audit Committee:
constituted by the Board of Directors of the bank in its 95th meeting held on 24th March, 2003 as per BRPD Circular
No. 12 dated 23th December, 2002 and subsequently reconstituted by the Board of Directors in its 306th meeting
held on 6th May, 2017 as per BRPD Circular No. 11 Dated 27.10.2013 as under:
SL Name Status with Committee Eduacational Qualification
1 Jb. Md. Amir Uddin PPM Chairman BSS(Hons) Economics,MSS (Economics)
2 Alhajj Abdus Salam Member M.com
3 Alhajj Abdul Malek Mollah Member Intermediate
4 Alhajj Naiz Ahmed Member M.com.(Accounting),LLB
5 Jb. Khalid Rahim FCA Member FCA (ICAEW) ; MA(UK)
During the period 2017 the audit committee of the bank conducted 8 (Eight) meetings in which among others, the
following issues were discussed:-
i) Reviewing the inspection report of different branches of AIBL conducted by the bank internal inspection team from
time to time and status of compliance thereof.
ii) Reviewing the comprehensive inspection report of different branches of AIBL conducted by Bangladesh Bank and
status of compliance thereof.
iii) Reviewing the financial statements of the bank for the period 31 December, 2017.
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 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
5. Cash in hand
a) Cash in hand
In local currency 2,092,699,819 2,028,680,184
In Foreign currency ( Note 5.a.ii ) 3,467,978 880,906
2,096,167,797 2,029,561,090
b) Balance with Bangladesh Bank
In local currency 36,353,337,500 29,691,784,728
In Foreign currency 111,796,457 296,368,858
36,465,133,957 29,988,153,586
c) Balance with Sonali Bank Ltd.
In local currency 1,204,440,154 865,354,539
In Foreign currency - -
1,204,440,154 865,354,539
5.a.i Balance With Bangladesh Bank and its Agents Banks (including foreign currencies) 37,669,574,111 30,853,508,125
5.a.ii In Foreign currency
Currency Name Amount in FC Ex. Rate Amount in BDT Amount in BDT
US Dollar 41934 82.70 3,467,978 880,906
Great Britain Pound - - -
EURO - - -
Others -
3,467,978 880,906
5.d Cash Reserve Requirments (CRR) and Statutory Liquidity Requirments (SLR)
Cash Reserve Requirments (CRR) and Statutory Liquidity Requirments (SLR) have been calculated and maintained in
accordance with Section 33 of Bank Companies Act 1991 (as amended 2013) & as per Bangladesh Bank Curcular No:
MPD/01 dated June 23, 2006.

5.e Cash Reserve Requirments (CRR)
Required Reserve( 6.5 % of Average Demand and Time Liabilities) 15,640,910,000 12,840,330,000
Actual reserve held with Bangladesh Bank 34,432,027,000 29,680,893,000
Surplus/(Deficit) 18,791,117,000 16,840,563,000
Statutory Liqudity Requirments (SLR)
Required Reserve( 5.50 % of Average Demand and Time Liabilities) 13,234,616,000 10,864,895,000
Actual reserve held 13,234,616,000 10,864,895,000
Surplus/(Deficit) - -
5.A Cash in hand 2,096,167,797 2,029,561,090
Al-Arafah Islami Bank Ltd. 239,878 4,399,887
Millennium information solution Ltd. 2,096,407,675 2,033,960,977
6. Balance with other Banks and Financial Institutions
a In Bangladesh:
Al-Wadia Current Accounts
Dutch Bangla Bank Ltd. 3,185,318 748,968
National Bank Ltd. 1,329,950 2,997,652
Agrani Bank 1,650 1,650
4,516,917 3,748,269
Short Term Deposits
Dhaka Bank Ltd. 6,185,080 14,690,294
Prime Bank Ltd. 11,837,616 6,935,714
Islami Bank Bangladesh Ltd. 132,626,402 305,873,890
Social Islami Bank Ltd. 26,896,790 391,887,401
Shahjalal Islami Bank Ltd. 393,819,641 1,574,816,845
EXIM Bank Ltd. 210,247,804 132,867,293
ICB Islamic Bank Ltd. 162,184,994 162,200,684
Jamuna Bank Ltd. 15,252,289 12,055,967
The City Bank Ltd. 3,337,414 27,922,648
Southeast Bank Ltd. 3,453,192 47,438,551
AB Bank Ltd. 33,321,441 545,992,378
Bank Alfalh Ltd. 3,445,016 200,000,000
Rupali Bank Ltd. - -
1,002,607,680 3,422,681,665
95

1,007,124,597 3,426,429,934
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
b. Outside Bangladesh (NOSTRO A/C)
Name of bank Currency Amuont in Convertion Amount Amount
Name Foreign rate per In In BDT.
Currency unit F.C BDT.
HABIB BANK AG ZURICH CSF 7,949 84.88 674,750 228,363
COMMERZBANK AG FRANKFURT AM EURO 261,856 99.21 25,977,914 4,912,556
SONALI BANK LTD.LONDON EURO EURO - 0.00 (13,172) 339,618
STANDARD CHARTERD BANK LTD,FRANKFURT EURO 159,882 99.21 15,861,375 28,308,867
UNITED BANK OF INDIA,EURO EURO 767 99.21 76,115 63,029
UNITED BANK OF INDIA,KOLKATA, ACUD USD 116,970 - 9,673,439 -
STANDARD CHARTERD BANK LTD,JAPAN JPY 303,542 0.73 222,800 1,231,579
SONALI BANK LTD.,LONDON GBP POUND 18,295 111.63 2,042,248 1,658,117
STANDARD CHARTERD BANK LTD,LONDON POUND 11,299 111.63 1,261,337 12,350,712
AL RAJI BANKING & INV CORP,SAUDI ARABIA REYAL 309,191 22.05 6,818,688 21,374,962
AB BANK LID., MUMBAI ACUD 299,479 82.70 24,766,948 (2,035,640)
AXIS BANK LTD. ACUD 75,250 82.70 6,223,166 12,472,096
BANK OF BHUTAN, ACU ACUD 145,404 82.70 12,024,915 15,697,910
COMMERZBANK AG FRANKFURT AM MAIN DE USD 273,456 82.70 22,614,782 61,115,193
HABIB BANK OF PAKISTAN,KARACHI ACUD - 0.00 (143,359) 9,304,046
ICICI BANK LIMITED, MUMBAI ACUD (594,867) 82.70 (49,195,537) 47,393,361
ICICI BANK LIMITED,HONGKONG USD 72,032 82.70 5,957,046 44,007,130
MASHREQUE BANK PSC,MUMBAI ACUD 314,057 82.70 25,972,541 36,569,507
SONALI BANK LTD. LONDON USD - 0.00 (75,680) 7,403,825
SONALI BANK LTD. KOLKATA ACUD 105,770 82.70 8,747,206 9,107,609
STANDARD CHARTERD BANK LTD,KARACHI ACUD 222,730 82.70 18,419,741 16,853,217
STANDARD CHARTERD BANK LTD,MUMBAI ACUD 91,313 82.70 7,551,595 31,006,394
HABIB METROPOLITAN BANK LTD, KARACHI USD (11,272) 0.00 (932,164) 10,814,462
MASHREQUE BANK PSC,NEW YORK USD 1,178,410 82.70 97,454,506 62,960,722
CITIBANK N.A.,NEW YORK, USA USD 419,599 82.70 34,700,831 153,362,800
STANDARD CHARTERD BANK LTD,NEW YORK USD 525,674 82.70 43,473,235 101,214,196
STANDARD CHARTERD BANK, KOLKATA (AMEX) USD 155,899 82.70 12,892,832 10,259,898
HABIB AMERICAN BANK,NEW YORK,USA USD 123,998 10,254,670 25,863,379
EMIRATES NBD, RIYADH, KSA SAR 24,228 534,313 -
UNITED BANK OF INDIA,DOLLAR ACUD 30,330 82.70 2,508,291 22,233,361
346,345,371 746,071,268
Placement to OBU USD 9,981,652,856 4,957,335,636
10,327,998,227 5,703,406,904
11,335,122,824 9,129,836,838

6.A. Consolidated Balance with other Banks and financial institutions

a) In Bangladesh:
Al-Arafah Islami Bank Ltd. [ Note-6.a ] 1,007,124,597 3,426,429,934
AIBL Capital Market Services Ltd. 207,494,736 215,047,483
AIBL Capital Management Ltd. 627,743,822 29,421,771
64,260,913 -
1,906,624,068 3,670,899,188
Less: Inter-Company Adjustment (835,967,277) (244,464,254)
1,070,656,791 3,426,434,934
b. Outside Bangladesh 10,327,998,227 5,703,406,904
11,398,655,018 9,129,841,838
6.A.i Maturity - wise Groupings ( Inside & Outside Bangladesh )
Payable on Demand
Up to 1 ( one ) month 5,982,362,824 7,927,841,838
Over 1 ( one ) Month but not more than 3 ( three ) Months - -
Over 3 ( three ) Months but not more than 1 ( one ) year - 1,100,000,000
Over 1 year but not more than 5 years - -
Over 5 years 3,302,760,000 102,000,000
9,285,122,825 9,129,841,838
96
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
7. Placement with Banks & Other Financial institutions
Shahjalal islami bank ltd. 500,000,000 -
Exim bank ltd. 1,000,000,000 1,200,000,000
Southeast bank ltd. 500,000,000 500,000,000
Premier bank ltd. Mtdr - 500,000,000
Ifil mtdr 1,400,000,000 200,000,000
Union bank ltd mtdr a/c 1,000,000,000 -
Ab bank ltd. - 400,000,000
4,400,000,000 2,800,000,000
7.A Al-Arafah Islami Bank Ltd. 4,400,000,000 2,800,000,000
AIBL Capital Market Services Ltd. - 533,450,160
4,400,000,000 3,333,450,160
8. Investment in Shares & Securities
Bangladesh Govt. Islami Bond Fund ( 8.a ) 7,500,000,000 6,490,000,000
Investment In Islamic Refinance Fund(8.a) 500,000,000 500,000,000
Investment in Share ( 8.b ) 17,453,233 1,445,022,096
Central Depository Bangladesh Limited ( 8.b ) 3,138,890 3,138,890
8,020,592,123 8,438,160,986
8.a Investments in Share & Securities
Government Securities 8,000,000,000 6,990,000,000
Bangladesh Govt. Islami Bond Fund 7,500,000,000 6,490,000,000
Investment In Islamic Refinance Fund 500,000,000 500,000,000
In shares (quoted and unquoted)
Quoted
Private (8.b) 10,000,000 937,568,865
Unquoted
Private (8.b) 10,592,123 510,592,123
20,592,123 1,448,160,988
8.b.i Book value of share as on 31 December 2017 as follows
Quoted shares in (Schedule of Shares and Securities are given Annexure B)
Rsrm steel - 768,722
Islami insurance - 42,718,565
Padma oil - 5,637,770
Fareast life - 6,305,196
Mjlbd - -
Bdcom - -
Jamunaoil - 154,629,743
Grameen phone - 138,777,389
Prime life insurance co. Ltd. - 140,002,776
Titas gas - 56,679,797
Sumit power - 3,365,366
PRIMELIFE - -
SINGERBD - -
Uniquehrl - 39,659,137
Orion pharma - 83,685,709
Bangladesh submarine cable com. Ltd. - 79,595,213
Upgdcl - 5,195,111
SUMITPOWER - -
Meghnacem - 10,548,369
AIBl 1st Islamic Mutual Fund 10,000,000 170,000,000
10,000,000 937,568,865
97
Notes to the Financial Statements As at and for the year ended December 31, 2017
2016 2015
Taka Taka
8.b.ii Unquoted shares in
Swift Share 7,453,233 7,453,233
Investment in sibl mudaraba sub-ordinated bond - 500,000,000
Central Depository Bangladesh Limited 3,138,890 3,138,890
10,592,123 510,592,123
20,592,123 1,448,160,988
8.A.i Investment in Shares & Securities
Al-Arafah Islami Bank Ltd. 20,592,123 1,448,160,988
AIBL Capital Market Services Ltd. 700,000,000 700,000,000
AIBL Capital Management Ltd. 1,376,753,723 20,515,306
Millennium information solution Ltd. 48,144,433 -
2,145,490,279 2,168,676,294
8.A.ii Maturity grouping of investments
Payable on Demand
Not more than 3 months - -
Over 3 ( three ) months but not more than 1 ( one ) year - -
Over 1 year but not more than 5 years 20,592,123 1,448,160,988
More than 5 years 2,076,753,723 720,515,306
2,097,345,846 2,168,676,294
9. Investments
a) General Investment
i. in Bangladesh
Murabaha Investment 48,754,958,120 17,335,763,428
Bai-Muazzal Investment 88,080,022,737 76,526,008,025
Hire Purchase Investment 63,373,693,778 49,638,994,915
Quard 841,723,870 1,879,374,812
Other Investment 21,665,976,904 36,505,808,648
222,716,375,409 181,885,949,828
ii. Out side Bangladesh - -
222,716,375,409 181,885,949,828
Less: Unearned profit on Investment 9,347,553,957 9,080,691,728
213,368,821,452 172,805,258,100
b) Bill Purchased & Discounted
Payable in Bangladesh 17,716,863,296 14,531,970,840
Payable out side Bangladesh 1,528,543,975 1,832,163,505
19,245,407,271 16,364,134,345
232,614,228,723 189,169,392,445
c) Maturity grouping of Investment
Including bills purchased and discounted
Payable on Demand
Up to 1 ( one ) month 64,829,975,723 40,534,900,000
Over 1 ( one ) month but not more than 3 ( three ) months 67,948,500,000 41,884,700,000
Over 3 ( three ) months but not more than 1 ( one ) year 82,135,500,000 64,763,600,000
Over 1 year but not more than 5 years 2,917,553,000 27,836,600,000
Over 5 years 14,782,700,000 14,149,592,445
232,614,228,723 189,169,392,445
d) An analysis to disclose following Significant concentration :
i. Investment to Directors and others 33,748,000 33,748,000
ii. Investment to Managing Director and Cheif Executive - -
iii. Investment to customer (No. of clients with amount of 67,718,100,000 59,834,900,000
outstanding and classified loan to whom loans and Investment
sanctioned more than 10% of total capital of the Bank)
iv. Investments to customers for more than 10% of Bank’s Total Capital
Number of clients 26 30
Amount of outstanding Investment 67,718,100,000 47,972,200,000
Amount of Classified Investment - -
98
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
Name of Clients Funded Non-Funded Figure in crore Figure in crore
01 Meghna Group - 89.04 89.04 115.92
02 City Group 129.06 34.29 163.35 -
03 Thermax Group 501.78 25.78 527.56 422.54
04 Majumder Traders 235.25 228.02 463.27 277.40
05 T K Group 54.54 30.31 84.85 104.53
06 Abul Khair Steel Industries Ltd. 383.99 169.90 553.89 487.47
07 Nasir Glass Ltd 110.79 37.44 148.23 246.22
08 AIBL Capital Market Services Ltd. 217.86 60.00 277.86 40.00
09 Noapara Traders - 104.32 104.32 283.10
10 Techno Electricals ltd 53.46 349.59 403.05 239.01
11 Jaj Bhuiyan Group - - - 145.80
12 Aman Tex Limited 188.40 84.77 273.17 323.97
13 Masihata Sweaters Ltd. 224.84 258.50 483.34 439.53
14 Gastro Liver Hospital & Reaserch Institute ltd 80.73 10.26 90.99 132.29
15 Birds Garments ltd, Unit-2, BiRoads R N R Fashion Ltd, & Khalifa Apparels Ltd. - - - 87.78
16 Turag Garments & Hosiery Mills Ltd. - - - 80.64
17 AIBL Capital Management Ltd - - - 218.15
18 Bangladesh Steel Re-rolling Mills - - - 92.92
19 NICE Denim Mills Ltd. 47.07 247.44 294.51 -
20 Ziri Subedar Steel Rrerolling - - - 96.91
21 Partex Jute Mills Ltd. - - - 145.40
22 Kader Compact Spinning Mills 244.47 73.47 317.94 -
23 Kabir Steel Re-rolling Mills 84.47 - 84.47 96.37
24 Mahmud Indigo Ltd. 62.96 69.74 132.70 139.32
25 Ayman Textile & Hosiery Ltd. 328.07 8.02 336.09 352.70
26 Mahmud Denims Ltd. - - - 85.57
27 Nitol Motors Ltd. 221.72 10.82 232.54 277.68
28 Robiul Islam, M/S. Rahman Traders & M/S. Zobari Traders 103.00 114.81 217.81 104.76
29 Kamal Yearn Ltd 350.32 129.98 480.30 314.01
30 Creative paper Mills 108.87 128.38 237.25 242.91
31 Biswas Poultry & Fish Feeds Ltd. 4.27 147.18 151.45 101.91
32 Anwar Khan Modern Hospital Ltd. 189.11 - 189.11 204.06
33 Rangs Industries Ltd - - - 84.62
34 Bangladesh Hardland Ceramics Co. Ltd. 22.87 109.29 132.16 -
35 Mahmud Fabrics And Finishing Ltd. 214.24 88.32 302.56 -
3,925.03 2,412.06 6,771.81 5,983.49
v) Industry/Sector wise Investments
Agriculture, Fishing and forestry 2,800,100,000 2,519,300,000
Industry 112,386,800,000 97,344,000,000
Constraction 11,823,600,000 9,052,000,000
Water works & sanatary services 391,700,000 489,600,000
Transport & communication 9,048,100,000 5,733,100,000
Storage 64,701,800,000 8,772,900,000
Trade Finance 21,865,600,000 53,891,300,000
Miscellaneous 18,944,082,680 20,447,884,173
241,961,782,680 198,250,084,173
Less: Unearned profit on Investment 9,347,553,957 9,080,691,728
- 232,614,228,723 189,169,392,445
vi) Geographical Location -wise Investment
Urban: 217,054,247,680 177,460,146,173
Dhaka Region 176,096,065,680 144,349,747,173
Chittagong Region 25,168,314,000 18,773,865,000
Sylhet Region 863,571,000 611,571,000
Rajshahi Region 5,722,280,000 4,547,590,000
Khulna Region 5,775,383,000 1,574,767,000
Rangpur Region 1,289,693,000 5,778,867,000
Barisal Region 2,138,941,000 1,823,739,000
Rural: 24,907,535,000 20,789,938,000
Dhaka Region 11,646,434,000 10,838,795,000
Chittagong Region 4,455,490,000 3,817,282,000
Sylhet Region 706,102,000 586,922,000
Rajshahi Region 2,646,022,000 2,033,367,000
Khulna Region 1,439,971,000 1,853,297,000
Rangpur Region 3,107,643,000 966,609,000
Barisal Region 905,873,000 693,666,000
241,961,782,680 198,250,084,173
9,347,553,957 9,080,691,728
Less: Unearned profit on Investment - 232,614,228,723 189,169,392,445
99
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
e) Classification of Investment including bills purchased and discounted
Unclassified 232,040,269,680 189,255,099,173
Standard including (Staff investment ) 226,458,279,680 186,861,491,000
Special Mention Accounts (SMA) 5,581,990,000 2,393,608,173
Classified 9,921,513,000 8,994,985,000
Sub Standard 1,154,051,000 873,157,000
Doubtful 497,117,000 806,636,000
Bad / Loss 8,270,345,000 7,315,192,000
241,961,782,680 198,250,084,173
Less: Unearned profit on Investment 9,347,553,957 9,080,691,728
232,614,228,723 189,169,392,445
f) Required Provision on Investment & Off -balance sheet exposures
Unclassified
General provision on unclassified Investment 1,277,199,000 941,089,000
General provision on small enterprise Investment 240,541,000 214,241,000
General provision on Housing financing Investment 43,652,000 36,702,000
General provision on consumer financing Investment 7,526,000 6,560,000
General provision on Micro Investment 15,765,000 48,834,000
General provision on special mention Investment 44,314,000 16,500,000
General provision on BHS/MHS/SDS 94,043,000 88,902,000
Classified 1,723,040,000 1,352,828,000
Specific provision on substandard Investment 87,602,000 51,978,000
Specific provision on doubtful Investment 86,649,000 124,627,000
Specific provision on bad/loss Investment 2,921,904,000 2,402,264,000
Unclassified 3,096,155,000 2,578,869,000
General provision on Off-balance sheet 570,419,000 449,886,000
5,389,614,000 4,381,583,000
g) Provision made on Investment & Off-balance sheet exposures
Unclassified
General provision on unclassified Investment 1,277,199,000 941,089,000
General provision on small enterprise Investment 240,541,000 214,241,000
General provision on Housing financing Investment 43,652,000 36,702,000
General provision on consumer financing Investment 7,526,000 6,560,000
General provision on Micro Investment 15,765,000 48,834,000
General provision on special mention Investment 44,314,000 16,500,000
General provision on BHS/MHS/SDS 94,043,000 88,902,000
Classified 1,723,040,000 1,352,828,000
Specific provision on substandard Investment 87,602,000 51,978,000
Specific provision on doubtful Investment 86,649,000 124,627,000
Specific provision on bad/loss Investment 2,921,904,000 2,402,264,000
Unclassified 3,096,155,000 2,578,869,000
General provision on Off-balance sheet 570,419,000 449,886,000
5,389,614,000 4,381,583,000
100
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
Provision Excess/(Shortfall) - -
h) Particulars of Investments
i) Investment considered good in respect of which of the bank company is fully secured; 232,052,100,000 173,310,626,077
ii) Investment considered good against which the banking company
holds no security other then the debtors personal guarantee. 25,549,358,780 24,939,458,160
iii) Investment considered good secured by the personal undertaking of one
or more perties in addition to the personal guarantee of the debtors; - -
iv) Investment adversely classified; provision not maintained thereagainst; - -
v) Investment due by directors or officers of the Banking company
or any of these either separately or Jointly with any other persons;
vi) Investment due from companies or firms in which the directors of
the banking company have interests as directors, partners or 14,146,200 14,146,200
managing or in the case of private companies as members;
vii) Maximum total amount of Investments including temporary
Investments made at any time during the year to directors or
managers or officers of the banking companies or any of them either - -
agents severally or jointly with any other persons;
viii) Maximum total amount of Investment including temporary Investment
granted during the year to the companies or firms in which the directors - -
of the banking company have interests as directors, partners or managing
agents or in the case of private companies as members;
ix) Due from banking companies;
x) Amount of Clssified Investment on which profit has not been charge,
are mentioned as follows;
a) An amount of Bad Investment on which profit has not been charged 8,270,345,000 7,315,192,000
i) Decrease/Increase in provision ( Specific ) 517,286,000 486,392,468
ii) Amount of Investment written off; 4,804,835,000 4,069,968,000
iii) Amount realised against Investment previously written off; 321,386,000 139,499,000
b) Amount of provision kept against Investment classified as “bad/loss” - -
on the date of preparing the balance sheet; 2,717,504,000 2,201,764,000
c) Profit creditable to the profit suspense/Compensation A/c; - -
xi) i) Cumulative amount of the written of Investment; 5,623,657,000 4,567,405,000
ii) Amount written off during the current year; 1,056,251,000 1,222,077,000
iii) The amount of written off Investment for which lawsuit has been field; 4,804,835,000 4,069,968,000
9.A. Investments
Al-Arafah Islami Bank Ltd. 232,614,228,723 189,169,392,445
AIBL Capital Market Services Ltd. 8,186,981,984 9,783,753,077
AIBL Capital Management Ltd. 12,947,718 1,879,257,834
240,814,158,425 200,832,403,356
Less : Inter company Adjustment (4,908,923,901) (4,313,025,415)
235,905,234,524 196,519,377,940
9.A.i Maturity grouping of Investment
Including bills purchased and discounted
Payable on Demand - -
Up to 1 ( one ) month 64,829,975,723 40,534,900,000
Over 1 ( one ) month but not more than 3 ( three ) months 67,948,500,000 41,884,700,000
Over 3 ( three ) months but not more than 1 ( one ) year 82,135,500,000 66,968,595,649
Over 1 year but not more than 5 years 2,917,553,000 30,041,595,649
Over 5 years 18,073,705,801 17,089,586,642
235,905,234,524 196,519,377,940
101
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
10. Fixed Assets
Tangiable Assets
Land 1,418,929,419 1,453,929,419
Building 744,610,287 744,610,287
Furniture (Wood) 470,589,762 403,484,682
Furniture (Steel) 106,024,971 99,277,844
Computer 219,085,932 207,740,364
Computer (Accessories) 80,143,215 70,455,984
Motor Car 167,901,575 129,933,240
Machine equipment & appliance 688,509,557 582,497,887
Online Hardware 337,733,628 319,044,697
Interior Decoration 171,280,161 165,344,780
Books & Library 9,346,784 9,154,137
4,414,155,291 4,185,473,321
Intangiable Assets
Online Software 221,104,558 181,395,598
Total 4,635,259,849 4,366,868,919
Less Accumulated Depreciation & Amortization 1,545,432,198 1,292,844,661
3,089,827,651 3,074,024,258
Schedule of Fixed Assets are given in Annexure - A.
10.A. Fixed Assets
Al-Arafah Islami Bank Ltd. 3,089,827,651 3,074,024,258
AIBL Capital Market Services Ltd. 18,713,240 20,362,532
AIBL Capital Management Ltd. 763,998 535,729
Millennium Information 151,072,006 145,263,199
3,260,376,895 3,240,185,718
11. Other Assets
Balance with BO A/C for share purchase - -
Suspense Account 41,042,980 58,495,731
Adjustment a/c debit balance 61,455,300 1,206,249,451
Stock of Stationery 43,866,347 24,025,841
Stamp in hand 6,144,565 4,875,551
Advance Deposit 4,201,242 3,841,752
Advance Rent 363,104,456 345,704,276
Capital Work In Progress 931,108,305 652,231,722
Investment in sibl mudaraba sub-ordinated bond 400,000,000 -
Investment for Subsidiary Companies 3,060,000,000 3,060,000,000
Advance Income Tax & TDS [ Note 11.2 ] 8,192,320,367 13,039,216,681
Protested Bills 6,506,700 7,796,700
Prepaid Expenditure 3,228,480 25,232,912
Adjustment a/c cost of borrowing 4,931,507 -
Balance with cmsl for portfolio account 1,475,000,000 1,435,406,079
Accrued Income 594,276,875 1,448,219,595
Mfci usd (edf) a/c 3,199,437 40,575,188
Scb mc settlement a/c (local) 47,886,131 55,192,645
Stock of ATM Card 1,050,000 1,050,000
Parking for nostro sub gl usd - 86,000
Dividend Receivable 23,003,644 358,132,736
Clearing Adjustment 109,133,057 73,835,267
Due from off-shore Banking unit 10,028,030,543 4,957,335,636
25,399,489,938 26,797,503,763
Less: Balance with OBU for elimination investment with OBU 10,028,030,543 4,957,335,636
15,371,459,395 21,840,168,127
102
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
11.1 Classification of other Assets under the following catagories
i) Investment in shares of subsidiary companies; 3,060,000,000 3,060,000,000
In Bangladesh - -
ii) Stationery, Stamps, Printing materials etc. 51,060,912 29,951,392
iii) Advance rent and advertisement; 363,104,456 345,704,276
iv) Profit accrued on Investment but not collected, commision & 594,276,875 1,448,219,595
brokerage receivable on shares and debenture and other income receivable v)
Security deposit 4,201,242 3,841,752
vi) Preliminary, formation and organization expenses, renovaiton 3,228,480 25,232,912
vii) development expenses and prepaid expenses - -
viii) Balance with BO A/C for share purchase 47,886,131 55,192,645
ix) Suspenses account 41,042,980 58,495,731
x) DD Paid without advice 61,455,300 1,206,249,451
xi) Protested Bills - 6,506,700 7,796,700
xii) Parking for nostro sub gl usd - 86,000
xiii) Dividend Receivable 23,003,644 358,132,736
xiv) Capital Work In Progress 931,108,305 652,231,722
xv) Others 10,184,584,368 14,589,033,215
15,371,459,395 21,840,168,127
xv) Others
Prepaid Expenditure 3,228,480 -
Stock of ATM Card 1,050,000 -
Advance Income Tax & TDS 3,060,000,000 13,039,216,681
Accrued Income 594,276,875 40,575,188
Adjustment a/c cost of borrowing 4,931,507 1,435,406,079
Dividend Receivable 23,003,644 73,835,267
8,818,810,873 14,589,033,215
11.2 Advance Income Tax & TDS
i) Begining of the year 13,039,216,681 11,073,749,964
Advance tax paid during the year 2,713,111,277 1,794,931,776
Tax deducted at Source during the year 714,820,719 170,534,941
Settlement for previous year (8,274,828,310) -
Advance income tax at the end of the year 8,192,320,367 13,039,216,681
11.A. Consolidated Other Assets
Al-Arafah Islami Bank Ltd. 15,371,459,395 21,840,168,129
AIBL Capital Market Services Ltd. 2,526,599,457 1,753,321,166
AIBL Capital Management Ltd. 102,490,015 490,909,897
Millennium information solution Ltd. 63,249,595 44,858,817
18,063,798,462 24,129,258,009
Less: Inter-Company Adjustment (3,684,244,456) (5,498,210,586)
14,379,554,007 18,631,047,423
12. Placement from Banks & Other financial Institutions
The Bank has taken finance from Islami Investment Bond (Islami Bond ) at banks’ own Mudaraba savings rate for
60/90/120/150/180 days tenor which introduced by the Government for Islami Banks and Financial Institutes in
September 2004 through Bangladesh Bank. The borrowing has been secured by Demand Promissory Note.
103
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka

Name of the Bank Mature Nature Amount Amount

a. In Bangladesh Date
Brorowing from Bangladesh Bank 4-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 6-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 6-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 13-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 18-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 21-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 21-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 25-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
Brorowing from Bangladesh Bank 26-Jan-2017 D.P Note 2,000,000,000 2,000,000,000
18,000,000,000 18,000,000,000
Outside Bangladesh 12,904,054,548 7,084,653,806.47
30,904,054,548 25,084,653,806
13 Deposit and Other Accounts
Mudaraba Savings Deposits 32,130,000,015 26,053,949,961
Mudaraba Term Deposit 136,764,993,508 105,332,062,757
Other Mudaraba Deposits [ Note :13.i ] 47,832,419,620 46,027,267,857
Al-Wadia Current Accounts and Others Accounts etc.[ Note: 13.ii] 26,435,038,160 20,693,095,761
Bills Payable 2,479,779,449 1,947,821,349
245,642,230,752 200,054,197,685
13.i. Other Mudaraba Deposits
Mudaraba Short Term Deposit 14,007,643,183 13,072,698,735
Installment Term Deposit (Itd) 14,568,400,206 12,260,932,397
Savings Inv. Deposit (Sid) 44,971,694 59,850,290
P/P Term Deposit (Ptd) 5,953,296,550 6,331,403,853
Monthly Hajj Deposit (Mhd) 153,649,312 123,066,002
Term Hajj Deposit (Thd) 2,924,139 2,507,151
Marriage Savings & Invt. Scheme 545,696 501,704
Special Pension Dep. Scheme 51,242,035 68,152,885
Mudaraba Term Cash Waqf Deposi 25,557,432 18,851,259
Lakhapati Deposit Scheme (Lds) 616,994,921 846,988,743
Millionaire Dep. Scheme (Mmds) 4,082,046,932 4,319,670,800
Kotipoti Deposit Scheme (Mkds) 2,286,871,847 2,321,126,004
Double Benefit Dep. Scheme (Dbds) 3,813,903,414 4,346,986,886
Pension Dep. Scheme (Pds) 2,001,290,387 2,041,756,180
Triple Benefit Dep. Scheme (Tbds) 223,081,872 212,774,968
47,832,419,620 46,027,267,857
13.ii Al-wadeeah Current Accounts and Other Accounts
Al-wadeeah Current Deposits 12,469,736,608 9,823,232,157
Sundry Deposit 8,079,726,960 7,038,787,620
Profit Payable For All Deposit Ac 3,180,954,031 2,757,577,517
F.C Held against EDF 121,200,668 141,589,294
F.C Deposit Account : 2,583,419,893 931,909,173
26,435,038,160 20,693,095,761
104
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
13.A. Consolidated Deposit and other Accounts
Mudaraba Savings Deposits 32,130,000,015 26,053,949,961
Mudaraba Term Deposits [ Note :13.A.ii ] 135,929,026,231 104,981,785,080
Other Mudaraba Deposits 47,832,419,620 46,027,267,857
Al-Wadia Current Accounts and Others Accounts etc. 26,435,038,160 20,693,095,761
Bills Payable 2,479,779,449 1,947,821,349
244,806,263,475 199,703,920,008
13.A.i Maturity-wise Classification of Deposits
i. Repayable on Demand 5,540,235,000 4,355,325,000
With a residual maturity of
ii. Repayable within 1 ( one ) month 29,887,495,752 24,680,175,000
iii. Over 1 ( one ) month but within 6 ( six ) months 81,203,632,723 81,029,466,697
iv. Over 6 ( six ) months within 1 ( one ) year 102,802,963,000 54,602,955,625
v. Over 1 ( one ) year within 5 ( five ) years 18,978,800,000 18,600,000,000
vi. Over 5 ( five ) years within 10 ( ten ) years 6,363,300,000 16,434,795,185
vii. Unclaimed Deposits 10 (ten) years and above 29,837,000 1,202,500
244,806,263,475 199,703,920,007

13.A.ii Mudaraba Term Deposits 136,764,993,508 105,332,062,757

Less: Inter-Company Adjustment (835,967,277) (350,277,677)
135,929,026,231 104,981,785,080
14. Other Liabilities
Others provision 15,510,964 15,510,964
Branches Adjustment A/C - 1,282,807
Hajj foundation 69,000 69,000
Provident fund - 531,256
Social security b. Fund - 40,200
Adjustment a/c credit balance 2,410,870 66,223,268
Clearing adjustment (586,341) 927,438
Interest income 7,672,827 3,703,461
Cib collection charge 9,269,407 5,887,827
Cash waqf (staff) 80,000 80,000
Provission for unclassified investment ( Note-14.2.a.ii ) 1,723,040,000 1,352,828,000
Provission for classified investment ( Note-14.2.a.i ) 3,096,155,000 2,586,669,000
Provision for taxation 8,141,335,782 14,085,871,838
Parking account - 14,804,365
Provision for off balance sheet item ( Note-14.2.a.iii ) 570,419,000 449,886,000
Outstanding expense 2,455,780 1,135,759
F.c. held against bb l/c 94,973 -
Cmsd clearing adjustment a/c. 33,700 2,200
Beftn adjustment - 27,157,131
Supervision fees (sme) 333,415 293,395
Provision for diminution in value of investment ( Note-14.3 ) - 173,799,456
Vat payable account 2,870 474,621
Electronic govt procurement 4,518,123 4,618,909
Bangladesh bank usd (edf) 2,046,843 39,293,863
Profit rent suspense 85,593,619 83,685,703
Compensation receivable 589,191,824 516,782,310
Atm settlement npsb (issuing) 3,800,653 52,601,126
Provision for Gratuity 19,657,581 49,922,982
14,273,105,891 19,534,082,882
105
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
14.1 Provision for income Tax
Current tax
Provision held at the begining of the year 14,085,871,761 11,871,933,932
Provision made during the year 2,330,292,331 2,213,937,829
Settlement for previous year (8,274,828,310) -
Provision held at the end of the year 8,141,335,782 14,085,871,761
14.1.a Provision for Current Tax made during the year
Income Tax on Business income 2,317,380,306 2,167,034,835
Capital gain 1,146,217 232,072
Cash Dividend 11,765,809 96,670,922
Excess Profit Tax (+) - -
Estimated Provision Required as at December 31,2017(i) 2,330,292,331 2,263,937,829
Provision held
Balance as at January 1,2017 14,085,871,761 11,871,933,933
Tax for previous year ( - ) 14,085,871,761 11,871,933,933
Actual provision for tax held (II) -
Estimated provision needs to be made (I-II) 2,330,292,331 2,213,937,829
Provision actually made during the year 2,330,292,331 2,213,937,829
-
A. Computation of Taxable Profit -
Profit before tax 5,432,462,871 5,455,099,187
Add:Inadmissible expenditure 1,521,388,003 1,705,413,415
Less: Item of income for sparate Considaration 70,291,215 485,675,332
Less: Further allowable Expenditure 1,090,108,894 1,257,250,184
Estimated Business income other than 82(C) 5,793,450,764 5,417,587,086
Add: Capital Gain 1,146,217 483,354,609
Add:Cash dividend 11,765,809 2,320,722
Total Taxable Income 5,806,362,790 5,903,262,418
14.2 Provision on Investment & Others
Provision against Classified Investments (Specific) [ 14.2.a.i ] 3,096,155,000 2,586,669,000
Provision against Unclassified Investments (general) [14.2.a.ii ] 1,723,040,000 1,352,828,000
Provision against Off-balance Sheet exposures [14.2.a.iii ] 570,419,000 449,886,000
Provision for diminution in value of investments [14.3] - 173,799,456
Total Provision Held (a) 5,389,614,000 4,563,182,455
a) The movement in Specific provision on classified Investment :
i) Provision held at the begining of the year 2,586,669,000 2,100,276,532
Fully provision debt written off (754,132,267) (898,071,486)
Recoveries of amount previously written off 309,972,277 126,799,309
Specific provision for the year 779,846,535 1,142,661,947
Provision transfered from diminution in value of investment 173,799,456 115,002,697
Provision held at the end of the year 3,096,155,000 2,586,669,000
ii) The movement in general provision on unclassified Investment :
Provision held at the beginning of the year 1,352,828,000 1,090,265,351
Provision during the year 370,212,000 262,562,649
Provision transfered from classified investment - -
Provision held at the end of the year 1,723,040,000 1,352,828,000
iii) The movement in provision against Off-balance sheet exposures
Provision held at the beginning of the year 449,886,000 346,746,000
Provision during the year 120,533,000 103,140,000
Provision held at the end of the year 570,419,000 449,886,000
5,389,614,000 4,389,382,999
106
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
b) Provision for Others
Provision held at the beginning of the year 15,510,964 15,510,964
Provision during the year - -
15,510,964 15,510,964
Less, Adjustment durring the year - -
Provision held at the end of the year 15,510,964 15,510,964
14.3 Provision for diminution in value of invevtment in Share
Provision held at the beginning of the year 173,799,456 288,802,153
Provision transfered to classified Investment 173,799,456) (115,002,697)
Provision held at the end of the year - 173,799,456
14.4 AIBL General A/C
AIBL General Account represents outstanding inter-branch and Head Office transactions (Net) originated but not
responded up to the balance sheet date. However, the unresponded entries as on 31-12-2017 are as under:
Number of unresponded entries Unresponded amount
Amount in Crore
Particulars Dr Cr Dr Cr
Upto 3 months - - - -
Over 3 months but within 6 months - - - -
Over 6 months but within 1 year - - - -
Over 1 year but within 5 years - - - -
- - - -
14.A. Consolidated Other Liabilities
Al-Arafah Islami Bank Ltd. 14,273,105,892 19,534,082,882
AIBL Capital Market Services Ltd. 2,819,157,181 6,031,977,484
AIBL Capital Management Ltd. 115,478,368 559,656,292
Millennium information solution Ltd. 28,730,385 12,964,276
17,236,471,826 26,138,680,934
Less: Inter-Company Adjustment (627,743,822) (2,440,150,805)
16,608,728,004 23,698,530,129
14.I.A Consolidated Current tax
Al-Arafah Islami Bank Ltd. 2,330,292,331 2,213,937,829
AIBL Capital Market Services Ltd. 70,584,620 402,177,294
AIBL Capital Management Ltd. 5,015,011 4,989,327
2,405,891,962 2,621,104,450
14.4.A Provision for diminution in value of investment
Al-Arafah Islami Bank Ltd. - 173,799,456
AIBL Capital Market Services Ltd. - -
AIBL Capital Management Ltd. - -
- 173,799,456
15. Deferred tax Liabilities/ (Assets)
Opening balance 75,456,596 82,801,119
Add: Addition for the year 25,492,603 (7,344,522)
Closing balance - -
Provision held at the end of the year 100,949,200 75,456,596
Presented after appropriate offsetting as follows: 75,456,596 82,801,119
Deferred tax Liabilities(+) 25,492,603 (7,344,522)
Deferred tax Liabilities 100,949,199 75,456,596
Deferred Tax Liabilities(net)
107
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
16. a) Authorised Capital
The Authorized Capital of the Bank is 1,500,000,000 Ordinary Share of Tk. 10 each. 15,000,000,000 15,000,000,000
b) Issued, Subscribed and Fully Paid - up Capital
Issued for Cash 5,896,017,618 2,819,339,680
Issued for other than Cash ( Bonus Share ) 4,047,046,662 7,123,724,600
9,943,064,280 9,943,064,280
c) Issued and paid up Capital of the Bank is 994,306,428 nos. of shares of Tk. 10 each as follows
Description 2017 2016 2017 2016
No. of Shares No. of Shares Total Taka Total Taka
Sponsors / Promoters 413,940,550 417,059,441 4,139,405,500 4,170,594,410
Institution 169,998,643 174,154,517 1,699,986,430 1,741,545,170
General Public 410,367,235 403,092,470 4,103,672,350 4,030,924,700
Total 994,306,428 994,306,428 9,943,064,280 9,943,064,280
d) Break-up of Shares Classification of shareholders by holding as on 31-12-2017
Range of Holding Number of Shareholders No. of Shares No. of Shares
Less than 50,000 2949 96,998,555 9.76%
50,001 to 100,000 343 25,663,521 2.58%
100,001 to 200,000 217 31,123,167 3.13%
200,001 to 300,000 68 16,857,510 1.70%
300,001 to 400,000 37 12,950,218 1.30%
400,001 to 500,000 34 15,622,609 1.57%
500,001 to 1,000,000 60 42,696,059 4.29%
1,000,001 to 10,000,000 109 272,355,466 27.39%
10,000,001 to 20,000,000 23 480,039,323 48.28%
Total 30386 994,306,428 100.00%
e) Minimum Capital Requirement Capital Adequacy Ratio
1. Tier-I (Core Capital)
Paid-up Capital 9,943,064,280 9,943,064,280
Statutory Reserve 7,576,581,114 6,490,088,540
General Reserve - -
Retained Earnings 2,176,610,612 2,175,038,104
Less : Regulatory Adjustment (Goodwill and al other Intangible Assets) (80,450,000)
19,615,806,006 18,608,190,925
2.Tier- II (Supplimentary Capital)
General Provision 2,293,459,000 1,802,714,000
Assets Revaluation Reserves 195,509,650 293,264,474
AIBL Subordinate Bond 3,000,000,000 3,000,000,000
5,488,968,650 5,095,978,474
3.Tier- III
A. Total Eligible Capital (1+2) 25,104,774,656 23,704,169,399
-
B. Total Risk weighted Assets (a+b+c) 204,447,535,050 164,461,897,100
a. Credit Risk 187,519,601,050 147,669,839,100
i. Balance sheet Business 181,503,704,000 141,915,365,600
ii. Off-balance sheet Business 6,015,897,050 5,754,473,500
b. Market Risk (From WS-3) 1,048,588,000 2,401,070,000
c. Operrational Risk (From WS-4) 15,879,346,000 14,390,988,000
C. Capital Adequqcy Ratio (CAR) (A / B) 12.28% 14.41%
D. Core Capital to RWA 9.59% 11.31%
E. Supplementary Capital to RWA 2.69% 3.10%
F. Minimum Capital Requirement (MCR) 10.00% of RWA 20,444,753,505 16,446,189,710
G. Capital Surplus on Risk weighted assets based (A-F) 4,660,021,151 7,257,979,689
H. Required Capital with Conservation Buffer @ 11.25% on RWA 23,000,347,693 17,474,076,567
I. Excess Over Capital with Conservation Buffer (A-H) 2,104,426,963 6,230,092,833
108
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
16.A. Non-Controlling Interest
Opening balance 1,726,686,152 1,718,183,083
Add: Non-Controling Interest in Profit for the year 34,811,203 8,503,070
1,761,497,355 1,726,686,152
17. Statutory Reserve
Opening balance beginning of the year 6,490,088,540 5,440,728,703
Add. Reserve @ 20% (on pre-tax profit) 1,086,492,574 1,049,359,837
Balance at the end of the year. 7,576,581,114 6,490,088,540
18. Other Reserve
FC Revaluation Reserve 2,827,977 521,730
Asset revaluation Reserve 977,548,248 977,548,248
980,376,225 978,069,978
19. Retained Earnings
Opening balance beginning of the year 2,175,038,105 1,604,629,812
Less : Bonus Share (1,988,612,856) (1,420,437,753)
Add: Net Profit / (loss) after tax during the year 3,076,677,937 3,040,205,881
3,263,103,185 3,224,397,941
Less : transfer to Statutory Reserve 1,086,492,574 1,049,359,837
2,176,610,611 2,175,038,104
19.A. Consolidated Retained Earnings
Al-Arafah Islami Bank Ltd. 2,199,578,988 1,615,987,762
Add: Net profit after tax during the year 3,134,682,251 3,053,388,813
Add: Dividend adjusment (1,988,612,856) -
Less: Stock dividend to equity holders of the bank - (946,958,503)
Less: Cash dividend to equity holders of the bank - (473,479,250)
Less: Transfer to statutory reserve (1,086,492,574) (1,049,359,837)
2,259,155,806 2,199,578,988
20. Letter of Guarantee
a) Claim against the bank which is not acknowledged as debt
b) Money for which is the bank is contingently liable in respect of guarantees given favoring
i. Directors - -
ii. Government - -
iii. Bank and other financial institution - -
iv. Others 6,443,409,058 4,981,342,733
6,443,409,058 4,981,342,733
21. Investment Income
i. Income from General Investments
Murabaha 1,116,351,878 1,292,867,587
Bai-Muazzal 7,209,846,558 7,179,170,035
Hire-Purchase 5,668,458,415 4,483,577,162
Others mode income 5,693,933,810 4,759,960,271
19,688,590,661 17,715,575,055
ii. Profit received from other Islamic Bank 616,995,454 480,140,048
Total ( i + ii ) 20,305,586,115 18,195,715,103
21.A. Cosolidated Investment Income
Al-Arafah Islami Bank Ltd. 20,305,586,115 18,195,715,103
AIBL Capital Market Services Ltd. 480,236,262 1,220,161,707
AIBL Capital Management Ltd. 320,713,282 132,001,970
Millennium information solution Ltd. 73,395,745 61,548,489
21,179,931,404 19,609,427,269
Less : Inter company Adjustment (688,903,369) (779,271,060)
20,491,028,035 18,830,156,209
109
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
22. Profit paid on Deposits & Borrowing
Mudaraba Savings Deposit 762,737,103 766,115,652
Mudaraba Short Term Deposit 473,939,097 304,992,303
Mudaraba Term Deposit 7,323,670,466 6,408,696,009
Mudaraba Special Deposit 2,096,338,009 2,086,594,828
Mudaraba BD. Govt. Islamic Bond fund 929,463,681 774,334,053
11,586,148,356 10,340,732,845
22.A. Profit paid on Deposits & Borrowing
Al-Arafah Islami Bank Ltd. 11,586,148,356 10,340,732,845
AIBL Capital Market Services Ltd. 514,566,486 231,913,177
AIBL Capital Management Ltd. 329,918,790 131,182,607
Millennium Information 42,465,305 33,175,921
12,473,098,937 10,737,004,550
Less : Inter company Adjustment (688,903,369) (779,271,060)
11,784,195,568 9,957,733,490
23. Income from Investment in Share /Securities
Dividend income ( cash) 58,829,043 483,354,609
Gain on sale of Shares/Securities 11,462,172 2,320,722
Profit received from other Islamic Bond 320,844,006 173,018,140
391,135,221 658,693,471
23.A. Income from Investment in Share /Securities
Al-Arafah Islami Bank Ltd. 391,135,221 658,693,471
AIBL Capital Market Services Ltd. 12,834,697 -
AIBL Capital Management Ltd. 33,349,167 26,711,019
437,319,085 685,404,490
Less : Inter company Adjustment - (435,600,000)
437,319,085 249,804,490
24. Commission, Exchange & Brokerage Income
Commission 1,160,615,008 1,035,673,900
Exchange 1,247,271,224 955,355,149
Brokerage commision - -
2,407,886,232 1,991,029,049
24.A Commission, Exchange & Brokerage Income
Al-Arafah Islami Bank Ltd. 2,407,886,232 1,991,029,049
AIBL Capital Market Services Ltd. 382,481,895 265,307,550
AIBL Capital Management Ltd. 316,563 78,750
2,790,684,690 2,256,415,349
Less : Inter company Adjustment - -
2,790,684,690 2,256,415,349
25. Other Operating Income
Procesing fee on investment 76,700 463,525
Supevision fee 98,175 190,190
Service charge 1,066,744 936,983
Capital gain or loss from fixed asset 669,676 -
Passbook sales(gsis) 109,957 123,600
Application form sales(seis) 102,810 203,722
Direct expenses on investmnent - 1,335,334
Telephone/ fax charge 53,540 2,106,130
legal expenses recovered 609,152 61,567
Printing & stationary 42,805,118 26,429,019
P & t charge recovered 26,616,747 37,399,808
Account maintenance fee 155,660,609 138,141,807
Card income 34,683,923 25,237,111
Misc.earning 23,183,597 14,105,175
285,736,748 246,733,971
110
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
25.A. Other Operating Income
Al-Arafah Islami Bank Ltd. 285,736,748 246,733,971
AIBL Capital Market Services Ltd. 37,553,134 26,368,206
AIBL Capital Management Ltd. - 51,357
Millennium information solution Ltd. 6,063,451 12,170,964
329,353,333 285,324,498
Less : Inter company Adjustment - -
329,353,333 285,324,498
26. Salaries, Allowances & Contribution to P.F
Basic Pay 1,193,447,308 898,700,436
House Rent Expenses 558,042,969 418,593,615
House Maintanence 222,041,996 165,993,033
Medical Expenses 210,621,730 177,506,896
Bonus 511,130,276 360,816,356
Bank’s contribution to P.F 109,156,703 82,083,390
Utility 845,454 1,364,525
Conveyance Expenses 80,104,968 73,107,564
LFA Allowance 220,186,583 176,531,725
Leave Encashment Expenses 72,114,322 49,396,028
Car Allowance 130,576,713 107,475,977
Lunch and entertainment allowance 77,271,656 -
Gratuity Expenses 105,657,581 109,922,982
3,491,198,259 2,621,492,527
26.A. Salaries, Allowances & Contribution to P.F
Al-Arafah Islami Bank Ltd. 3,491,198,259 2,621,492,527
AIBL Capital Market Services Ltd. 59,949,037 44,775,054
AIBL Capital Management Ltd. 10,168,047 11,370,525
Millennium information solution Ltd. 10,644,308 14,359,279
3,571,959,651 2,691,997,385
27. Director & Sharia Council Fees & Expenses
i. Directors fees for attending Board/executive Committee/other committee meeting 4,041,300 4,940,400
ii. TA/DA/ Hotel fare & Foreign Directors 6,055,018 6,205,530
iii. Others - 198,115
10,096,318 11,344,045
27.A. Director & Sharia Council Fees & Expenses
Al-Arafah Islami Bank Ltd. 10,096,318 11,344,045
AIBL Capital Market Services Ltd. 7,143,200 4,451,000
AIBL Capital Management Ltd. 244,800 133,300
17,484,318 15,928,345
28. Sharia Supervisory Committee’s Fees & Expenses
i. Sharia fees for attending meeting 530,513 192,000
ii. TA/DA/ Hotel fare & Foreign Directors - -
iii. Others 30,456 30,456
560,969 222,456
29. Rent,Taxes,Insurance & Electricity Bill
Rent Office 320,576,679 287,644,298
Electricity Bill 88,343,546 83,904,137
Insurance 161,254,676 136,078,016
570,174,901 507,626,451
111
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
29.A. Rent,Taxes,Insurance & Electricity Bill
Al-Arafah Islami Bank Ltd. 570,174,901 507,626,451
AIBL Capital Market Services Ltd. 11,530,435 11,060,624
AIBL Capital Management Ltd. 1,089,878 694,077
582,795,214 519,381,152
30. Postage,Telegram,Telephone & Stamp
Stamp and Catridge paper - -
Postage 21,495,680 22,524,455
Fax Charges 3,591 13,224
Telephone (Office) 5,479,049 5,389,745
Telephone (Residence) 1,344,012 2,104,690
Telephone (Mobile) 8,919,089 7,301,647
SWIFT Charge 5,039,100 7,105,946
Internet Charges 280,893 337,032
Online Charge 35,107,708 30,436,063
77,669,122 75,212,802
30.A. Postage,Telegram,Telephone & Stamp
Al-Arafah Islami Bank Ltd. 77,669,122 75,212,802
AIBL Capital Market Services Ltd. 698,344 510,808
AIBL Capital Management Ltd. 62,400 79,500
78,429,866 75,803,110
31. Depreciation Repairs to the Bank’s property
Repairs to the Bank’s property
R.R. Furniture & Fixture (Wooden) 1,221,592 862,742
R.R. Furniture & Fixture (Steel) 1,929,962 1,449,496
R.R. Computer 2,210,658 923,657
Maint. of Motor Car and other Vahicle 853,707 780,975
R.R. Machine equipment & appliances 16,348,344 12,018,330
Maintenance of Land & Building 132,841 53,903
Maintenance of Rented Premises 6,226 2,450
R.R. Computer Accessories 684,055 550,669
R.R. Others 1,107,065 951,057
Software Maintenance Fee 6,922,710 8,750,600
Hardware Maintenance Fee 1,536,750 1,009,900
32,953,910 27,353,779
Depreciation to the Bank’s property
Depr. Furniture (Wood) 37,049,220 31,382,053
Depr. Furniture (Steel) 7,864,476 7,301,917
Depr. Computer 18,588,335 19,815,205
Depr. Motor Car 18,590,629 16,170,652
Depr. Machine equip & Appliance 81,579,395 79,654,421
Depr. Books & Library 126,540 100,573
Depr. Land & Building 18,748,102 18,178,782
Depr. Online Hardware 42,269,028 36,400,415
Depr. Online Software 25,316,099 25,332,156
Depr. Computer Accessories 10,507,733 9,381,415
Depr. Interior Decoration 16,032,330 15,463,848
276,671,887 259,181,437
309,625,797 286,535,214
31.A Depreciation Repairs to the Bank’s property
Al-Arafah Islami Bank Ltd. 309,625,797 286,535,216
AIBL Capital Market Services Ltd. 7,193,974 6,607,067
AIBL Capital Management Ltd. 182,464 182,464
317,002,236 293,324,747
112
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
32. Stationary,Printing & Advertisement
Printing & Stationerty 29,838,353 20,615,261
Paper & Table Stationery 34,020,621 34,082,357
Advertisement & Publicity Expenses 59,574,027 39,369,904
123,433,001 94,067,522
32.A. Stationary,Printing & Advertisement
Al-Arafah Islami Bank Ltd. 123,433,001 94,067,522
AIBL Capital Market Services Ltd. 1,671,705 1,691,107
AIBL Capital Management Ltd. 200,557 203,518
125,305,263 95,962,147
33. Other expenses
Local conveyance expenses 10,541,600 8,973,796
Petrolium oil lubricant motors 15,925,276 9,452,925
CNG motor car 2,887,799 2,906,452
Entertainment expenses 21,344,140 18,354,584
Travelling expenses 32,119,180 24,161,915
Bank charge 13,807,951 9,608,579
Wages (salary-casual staff) 55,878,025 49,114,111
Security guard service 91,705,546 80,890,666
Subscription 5,237,982 8,776,262
Leveries & uniforms 511,155 621,685
Petrolium oil & lubricants 10,766,430 9,384,660
Donations 669,629 362,650
Wasa Bill 5,668,850 5,652,245
Gas Bill 1,273,218 1,268,652
Staff welfare 150,000 100,000
News paper journal & periodical 2,490,005 2,148,512
Evening banking expenses 816,037 791,995
Upkeep branches premises 2,909,248 2,351,255
Washing charge 2,322,623 1,815,881
Computer Accessories 15,550,598 15,224,073
Photo Copy Machine Accessories 808,202 836,801
Business development 18,619,418 13,107,002
Manager conference 1,108,951 8,524,018
Closing expenses 7,791,400 86,500
Office Expenses 14,821,220 10,725,390
Registration expenses 14,271,639 4,610,069
Closing allowance 1,488,101 1,043,204
AGM/EGM 715,256 231,216
Crocarige 517,500 517,500
Creditrating charge 514,582 387,528
Tax token expenditure 1,606,311 2,978,977
Training expenses 16,662,618 12,955,968
Card expense 74,957,275 49,974,772
It allowance (Overtime ) 4,665,500 3,678,714
Saturday working allowance (Overtime) 26,975,355 12,532,695
Charge expenses 2,733,485 -
Risk expenses 1,950,900 -
Account opening commision through agent bankinng 3,845,451 -
Data info service charge 1,049,662 -
Electronics & fittings item 2,208,928 -
Honorarium 852,434 442,500
490,739,481 374,593,749
113
Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
33.A. Consolidated Other expenses
Al-Arafah Islami Bank Ltd. 490,739,481 375,403,249
AIBL Capital Market Services Ltd. 80,946,373 50,405,275
AIBL Capital Management Ltd. 1,415,466 787,451
Millennium information solution Ltd. 9,144,613 8,962,389
582,245,933 435,558,364
34. Provision against Investments & Off-Balance sheet exposures
On Classified Investment as per Bangladesh Bank Circular 779,846,535 1,142,661,947
On Un-classified Investment as per Bangladesh Bank Circular 370,212,000 262,562,649
On Off-balance sheet as per Bangladesh Bank Circular 120,533,000 103,140,000
1,270,591,535 1,508,364,596
34.A. Provision against Investments & Off-Balance sheet exposures
Al-Arafah Islami Bank Ltd. 1,270,591,535 1,508,364,596
AIBL Capital Market Services Ltd. 84,300,000 33,885,335
AIBL Capital Management Ltd. - 5,620,200
1,354,891,535 1,547,870,131
35. Paid for other operating activities
Directors fees & expenses 10,096,318 11,344,045
Shariah Supervisory Committee’s fees & expenses 560,969 222,456
Rent, taxes, insurance and lighting etc. 570,174,901 507,626,451
Postage, telegram, telephone and stamp etc. 77,669,122 74,403,302
Legal charges 10,481,205 10,694,700
Auditors’ fee 1,337,500 1,245,500
Repairs to the bank’s properties 32,953,910 27,353,779
Other expenses 490,739,481 375,403,249
(1,194,013,406) (1,008,293,482)
35.A. Paid for other operating Activities
Al-Arafah Islami Bank Ltd. (1,194,013,406) (1,008,293,482)
Inter company Adjustment (263,016,579) (76,029,106)
(1,457,029,985) (1,084,322,588)
36. Increase/Decrease of other assets (item-wise)
Balance with BO A/C for share purchase - (61,007,164)
Suspense Account (17,452,751) (41,495,275)
Adjustment a/c debit balance (1,144,794,151) (7,300)
Stock of Stationery 19,840,506 (1,358,184)
Stamp in hand 1,269,014 1,215,904
Advance Deposit 359,490 23,520
Advance Rent 17,400,180 93,319,327
Capital Work In Progress 278,876,583 280,533,644
Investment in sibl mudaraba sub-ordinated bond 100,000,000 -
Advance Income Tax & TDS [ Note 11.2 ] (1,290,000) (1,163,000)
Protested Bills (22,004,432) (2,638,756)
Prepaid Expenditure 4,931,507 (20,000,000)
Adjustment a/c cost of borrowing (1,535,406,077) (83,152,086)
Accrued Income (37,375,751) (4,031,959,913)
Mfci usd (edf) a/c (7,306,514) 48,863,884
Scb mc settlement a/c (local) - 366
Stock of ATM Card - (29,168,514)
Branches Adjustment A/C (86,000) -
Parking for nostro sub gl usd (335,129,092) 351,428,515
Dividend Receivable 35,297,788 (3,720,000)
9,042,698,009 3,500,285,032
114
 Notes to the Financial Statements As at and for the year ended December 31, 2017
2017 2016
Taka Taka
36.A Increase/Decrease of other assets (item-wise)
Al-Arafah Islami Bank Ltd. 9,042,698,009 3,500,285,032
Inter company Adjustment (778,758,225) 701,657,622
(8,263,939,784) 4,201,942,654
37. Increase/Decrease of Trading liabilities (item-wise)
Others provision - -
Branches Adjustment A/C (1,282,807) 1,282,807
Hajj foundation - -
Provident fund (531,256) 409,435
Social security b. Fund (40,200) 35,400
Adjustment a/c credit balance (63,812,398) 4,442,974
Clearing adjustment (1,513,779) 888,893
Interest income 3,969,366 2,283,537
Cib collection charge 3,381,580 3,030,164
Cash waqf (staff) - -
Provission for unclassified investment - -
Provission for classified investment (270,360,535) (656,269,479)
Provision for taxation (5,944,536,056) 2,213,937,905
Parking account - -
Provision for off balance sheet item 120,533,000 103,140,000
Outstanding expense 1,320,021 425,135
Beftn adjustment (27,157,131) (7,747,343)
Supervision fees (sme) 40,020 34,195
Provision for diminution in value of investment (173,799,456) (115,002,697)
Vat payable account - -
Electronic govt procurement (100,786) 2,396,119
Bangladesh bank usd (edf) (37,247,020) (4,007,397,222)
Profit rent suspense 1,907,916 (20,619,280)
Compensation receivable 72,409,514 61,363,270
Atm settlement npsb (issuing) (48,800,472) (11,485,976)
Provision for Gratuity (30,265,401) (20,077,018)
Cmsd clearing adjustment a/c. - -
Depreciation to the Bank’s property - -
(6,395,885,881) (2,444,929,182)
37.A Increase/Decrease of Trading liabilities (item-wise)
Al-Arafah Islami Bank Ltd. (6,395,885,881) (2,444,929,182)
Inter company Adjustment (5,644,000,290) (2,397,712,165)
(12,039,886,170) (4,842,641,347)
38. Cash and Cash Equivalent at the end of the year
Cash in hand 2,096,167,797 2,029,561,090
Balance with Bangladesh Bank & Sonali Bank Ltd. 37,669,574,111 30,853,508,125
Balance with Other Banks 11,335,122,824 9,129,836,838
Bangladesh Government Islamic Investment Bond 8,000,000,000 6,990,000,000
59,100,864,732 49,002,906,053
115
Notes to the Financial Statements As at and for the year ended December 31, 2016
2016 2015
Taka Taka

38.A Cash and Cash Equivalent at the end of the year

Al-Arafah Islami Bank Ltd. 59,100,864,732 49,002,906,053
AIBL Capital Market Services Ltd. 10,202 10,202
AIBL Capital Management Ltd. - -
Millennium information solution Ltd. 63,761,870 3,922,597
59,164,636,804 49,006,838,852
39. Calculation of Earning Per Share (EPS)
The earning per share of the bank has been calculated in accordance
with BAS-33 under basic Earning per share method as follows:
Earnings Per Share (EPS)
Basic earning ( net profit after tax ) for the year 3,076,677,937 3,040,205,880
Number of ordiner shares outstanding as of the reportng date 994,306,428 994,306,428
Earning per Share 3.09 3.06
39.A Consolidated Earnings Per Share (CEPS)
Net profit after tax 3,134,682,251 3,053,388,813
Number of ordiner shares outstanding as of the reportng date 994,306,428 994,306,428
Consolidated earnings per share as per share 3.15 3.07
40. Events after the balance sheet date
The Board of Directors in its 320th meeting held on 09 April, 2018 has approved the audited financial statements for
the year ended 31 December 2017.The Board has also recommended 15% cash and 5% Stock dividend for the year
ended 31 December 2017 subject to approval of the shareholders at the 23nd Annual General Meeting (AGM).

116
117

Consolidated Schedule of Fixed Assets as at December 31, 2017

Annexure - A.I

Cost / Revaluation Depreciation/Amortization

Written
SL
Particulars Balance at Addtion Transfer/ Balance at Balance at Tranfer/ Balace at down value
No
1st January during the Charge
Revalution Disposal 31st December 1st January Disposal 31st December as on 31.12.17
2017 year for the year
during the year 2017 2017 during the year 2017

A. Fixed Assests

1 Land 1,453,929,419 - - 35,000,000 1,418,929,419 - - - - 1,418,929,419

2 Building 744,610,287 - - - 744,610,287 51,239,236 18,748,102 - 69,987,338 674,622,949

3 Furniture & Fixture (Wood) 408,456,916 - 82,660,846 15,433,046 475,684,716 123,205,065 37,527,556 11,751,829 148,980,792 326,703,924

4 Furniture & Fixture (Steel) 99,609,918 - 7,550,481 795,854 106,364,545 49,350,772 7,896,775 742,909 56,504,638 49,859,907

5 Computer 212,941,367 - 13,755,224 922,962 225,773,629 167,341,289 19,207,974 879,168 185,670,094 40,103,535

6 Computer Acessories 76,547,021 - 10,214,046 526,815 86,234,252 38,475,324 10,507,733 514,735 48,468,322 37,765,930

7 Motor Car 160,935,886 - 37,968,335 - 198,904,221 94,555,461 23,374,171 - 117,929,632 80,974,588

8 Machine Equipment & Appliance 595,582,941 - 116,097,035 9,442,536 702,237,440 399,577,477 81,948,760 5,990,358 475,535,879 226,701,561

9 Books & Library 9,222,896 - 196,098 3,451 9,415,543 8,620,054 127,630 3,451 8,744,233 671,310

10 Online Hardware 321,945,931 - 18,763,381 28,800 340,680,512 186,819,167 42,269,028 28,800 229,059,395 111,621,117

11 Interior Decoration 181,780,144 - 13,615,260 4,290,911 191,104,493 96,029,527 17,629,955 4,190,392 109,469,091 81,635,402

Sub-Total 4,265,562,726 - 300,820,706 66,444,375 4,499,939,057 1,215,213,372 259,237,684 24,101,642 1,450,349,414 3,049,589,643

B. Intangible Assets

12 Online Software 306,355,277 - 46,687,160 - 353,042,437 116,518,913 25,736,273 - 142,255,187 210,787,251

Sub-Total 306,355,277 - 46,687,160 - 353,042,437 116,518,913 25,736,273 - 142,255,187 210,787,251

December 31,. 2017 4,571,918,003 - 347,507,866 66,444,375 4,852,981,494 1,331,732,285 284,973,958 24,101,642 1,592,604,601 3,260,376,895

December 31,. 2016 3,963,560,258 - 404,627,609 1,318,948 4,366,868,919 1,035,227,639 259,181,435 1,564,414 1,292,844,661 3,074,024,259
 Schedule of Fixed Assets as at December 31, 2017

Annexure - A

Cost / Revaluation Depreciation/Amortization

Written
SL
Particulars Balance at Addtion Transfer/ Balance at Balance at Tranfer/ Balace at down value
No
1st January during the Charge
Revalution Disposal 31st December 1st January Disposal 31st December as on 31.12.17
2017 year for the year
during the year 2017 2017 during the year 2017

A. Fixed Assests

1 Land 1,453,929,419 - - 35,000,000 1,418,929,419 - - - 1,418,929,419

2 Building 744,610,287 - - 744,610,287 51,239,236 18,748,102 - 69,987,338 674,622,949

3 Furniture & Fixture (Wood) 403,484,682 - 82,536,396 15,431,316 470,589,762 121,313,732 37,049,220 11,751,829 146,611,123 323,978,639

4 Furniture & Fixture (Steel) 99,277,844 - 7,542,981 795,854 106,024,971 49,240,601 7,864,476 742,909 56,362,168 49,662,803

5 Computer 207,740,364 - 12,244,530 898,962 219,085,932 162,641,156 18,588,335 862,862 180,366,629 38,719,303

6 Computer Acessories 70,455,984 - 10,214,046 526,815 80,143,215 34,642,518 10,507,733 514,735 44,635,516 35,507,699

7 Motor Car 129,933,240 - 37,968,335 - 167,901,575 87,191,444 18,590,629 - 105,782,073 62,119,502

8 Machine Equipment & Appliance 582,497,887 - 115,454,206 9,442,536 688,509,557 388,606,605 81,579,395 5,990,358 464,195,642 224,313,915

9 Books & Library 9,154,137 - 196,098 3,451 9,346,784 8,558,564 126,540 3,451 8,681,653 665,131

10 Online Hardware 319,044,697 - 18,717,731 28,800 337,733,628 183,917,933 42,269,028 28,800 226,158,161 111,575,467

11 Interior Decoration 165,344,780 - 10,226,292 4,290,911 171,280,161 90,154,289 16,032,330 4,189,407 101,997,212 69,282,949

Sub-Total 4,185,473,321 - 295,100,615 66,418,645 4,414,155,291 1,177,506,078 251,355,788 24,084,351 1,404,777,515 3,009,377,776

B. Intangible Assets

12 Online Software 181,395,598 - 39,708,960 - 221,104,558 115,338,583 25,316,099 - 140,654,682 80,449,876

Sub-Total 181,395,598 - 39,708,960 - 221,104,558 115,338,583 25,316,099 - 140,654,682 80,449,876

December 31,. 2017 4,366,868,919 - 334,809,575 66,418,645 4,635,259,849 1,292,844,661 276,671,887 24,084,351 1,545,432,197 3,089,827,651

December 31,. 2016 3,963,560,258 - 404,627,609 1,318,948 4,366,868,919 1,035,227,639 259,181,435 1,564,414 1,292,844,661 3,074,024,259

118
 Highlight on the Overall Activities of the Bank for the year
31 December, 2017

SL NO Particulars Year 2017 Year 2016

1 Paid -up Capital 9,943,064,280 9,943,064,280

2 Total Capital 25,104,774,656 23,704,169,399

3 Capital Surplus(Deficit) 4,660,021,151 7,257,979,689

4 Total Assets 314,596,972,625 267,334,651,873

5 Total Deposits 245,642,230,752 200,054,197,685

6 Total Investment 232,614,228,723 189,169,392,445

7 Total Contingent Liabilities 57,041,897,944 44,988,642,018

8 Investment Deposit Ratio (%) 88.95% 88.50%

9 Ratio of Classified Investment to Total investment (%) 4.10% 4.54%

10 Profit after Tax & Provision 3,076,677,937 3,040,205,881

11 Amount of Classified Investment during the year 9,921,513,000 8,994,985,000

12 Provision kept againest Classified Investment 3,096,155,000 2,578,869,000

13 Provision Surplus / (Deficit) - -

14 Cost of fund (%) 7.50% 7.92%

15 Profit earning Assets 256,369,943,671 209,537,390,271

16 Profit Non-earning Assets 58,227,028,954 57,797,261,602

17 Return on Investment (ROI) 9.47% 10.41%

18 Return on Assets After Tax (ROA) 0.98% 1.14%

19 Income from Investment in Shares 391,135,221 658,693,471

20 Earning per Share (Taka) 3.09 3.06

21 Net Income per share (Taka) 3.09 3.06

22 Price Earning Ratio (Times) 8.01 5.20

119
 Off-shore Banking Unit (obu) Balance Sheet as at December 31, 2017
2017 2016
USD Taka USD Taka
PROPERTY AND ASSETS Notes
Cash in hand
Cash in hand (including foreign currencies) - - - -
Balance With Bangladesh Bank and its Agents Banks
(including foreign currencies) - - - -
- - - -
Balance with other Banks and Financial Institutions
In Bangladesh 560,836 46,381,153 316,702 24,927,949
Outside Bangladesh - - - -
560,836 46,381,153 316,702 24,927,949
Placement with Banks & Other Financial institutions 4 13,503,064 1,116,703,403 - -
Investment in Share & Securities
Government - - - -
Others - -
- -
Investments
General Investments etc. - - - -
Bills purchased and discounted 107,194,026 8,864,945,987 62,981,405 4,957,335,636
107,194,026 8,864,945,987 62,981,405 4,957,335,636
Fixed assets including Premises - - - -
Other Assets - - - -
Non-Banking Assets - - - -
Total Assets 121,257,927 10,028,030,543 63,298,106 4,982,263,586

LIABILITIES AND CAPITAL

Liabilities
Placement from Banks & Other Financial institutions 5 120,697,346 9,981,670,480 62,982,529 4,957,424,139
Deposits and other Accounts
Mudaraba Savings Deposits - - - -
Mudaraba Term Deposits - - - -
Other Mudaraba Deposits - - - -
Al-Wadia Current Accounts and Others Accounts etc. - - - -
Bills Payable - - - -
- - - -
Other Liabilities - - - -
Deferred tax Liabilities/ (Assets) - - - -
Total Liabilities 120,697,346 9,981,670,480 62,982,529 4,957,424,139
Capital/Share Holders Equity
Paid up Capital - - - -
Statutory Reserve - - - -
Foreign Currency Transaction gain/(Loss)
Other Reserve - - - -
Retained Earnings 560,581 46,360,054 315,577 24,839,447
Total Share holders equity 560,581 46,360,054 315,577 24,839,447
Total Liability and Share holders equity 121,257,927 10,028,030,543 63,298,106 4,982,263,586
120
 Off-shore Banking Unit (obu) Balance Sheet as at December 31, 2017
2017 2016
USD Taka USD Taka
OFF BALANCE SHEET ITEMS
Contingent Liabilities
Acceptance and endorsement - - - -
Letters of Guarantee - - - -
Letters of Credit - - - -
Bills for Collection - - - -
Other Contingent Liabilities - - - -
Total - - - -


Other Commitments :

Documentary Credits and other short term trade
related transactions - - - -
Forward Assets Purchased and forward Deposit placed - - - -
Undraw note issuance and Revolving underwriting Facilities - - - -
Undraw Formal standing Facilities, Credit lines and
others commitments - - - -

Total off Balance sheet items including
Contingent liabilities - - - -
121
 Off-shore Banking Unit (Obu) Profit & Loss Accounts as at December 31, 2017
2017 2016
Notes USD Taka USD Taka

Investment Income 5,081,681 420,255,043 2,876,388 226,403,670

Profit paid on deposits & Borrowing 7 (4,517,100) (373,564,188) (2,556,811) (201,249,379)
Net Investment Income 564,581 46,690,854 319,577 25,154,291

Income from Investment in Shares /Securities - - - -
Commission, Exchange and Brokerage - - - -
Other Operating Income - - - -
- - - -

Total operating income 564,581 46,690,854 319,577 25,154,291

Salaries and allowances & contribution to P.F - - - -
Directors fees & expenses - - - -
Shariah Supervisory Committee’s fees & expenses - - - -
Rent, taxes, insurance, lighting etc. - - - -
Postage, telegram, telephone and stamp etc. 4,000 330,800 4,000 314,844
Legal charges - - - -
Auditors’ fee - - - -
Salary & Allowances to the Managing Director - - - -
Depreciation and repairs to the bank’s properties - - - -
Stationery, printing, advertisement etc. - - - -
Other expenses - - - -
Total operating expenses 4,000 330,800 4,000 314,844
Profit/(Loss) before Tax & provision 560,581 46,360,054 315,577 24,839,447
Provision against Investments & Contingent Liabilities - - - -
Provision for diminution in value of invevtment - - - -
Other Provision - - - -
Total provision - - - -
Profit/(Loss) before Tax 560,581 46,360,054 315,577 24,839,447
Current tax - - - -
Deferred tax - - - -
Provision for Taxation - - - -
Net Profit/(Loss) after tax 560,581 46,360,054 315,577 24,839,447
Appropriation
Statutory Reserve - - - -
General Reserve - - - -
- - - -
Retained Earnings 560,581 46,360,054 315,577 24,839,447
Earning per Ordinary share (EPS)
122
 Off-shore Banking Unit (Obu) Cash Flow Statement
for the year ended December 31, 2017
2017 2016
Notes USD Taka USD Taka

Investment income receipt in Cash 5,081,681 420,255,043 2,876,388 226,403,670

Profit paid on deposits (4,517,100) (373,564,188) (2,556,811) (201,249,379)
Dividend recieved - - - -
Fees & Commission received in cash - - - -
Recoveries from write off investments - - - -
Cash payments to employees - - - -
Cash payments to suppliers - - - -
Received from other operating activities (item-wise) - - - -
Paid for other operating activities (item-wise) (4,000) (330,800) (4,000) (314,844)
Advance income tax paid - - - -
Operating profit before changes in operating
assets and liabilities 560,581 46,360,054 315,577 24,839,447

Changing in Operating assets & liabilities
Increase/Decrease of trading securities - - - -
Increase/Decrease of investment and advances
to other banks 120,697,346 9,981,670,480 62,982,529 4,957,424,139
Increase/Decrease of Investment and advances
to customers (other than Banks) (120,697,091) (8,864,945,987) (62,981,405) (4,957,335,636)
Increase/Decrease of other assets (item-wise) - - - -
Increase/Decrease of Deposits from other banks - - - -
Increase/Decrease of Deposits from customers (other than Banks) - - - -
Increase/Decrease of Other liabilities account of customers - - - -
Increase/Decrease of Trading liabilities (item-wise) - - - -
Cash receipt from operating activities 255 1,116,724,493 1,124 88,503

A. Net Cash from operating activities 560,836 1,163,084,555 316,702 24,927,950
Cash flows from investing activities:
Proceeds from sale of securites - - - -
Payments for purchases of securities - - - -
Purchase of property, plant and equipment - - - -
Sales proceeds of Fixed assets - - - -
Purchase-sale of subsidiary - - - -
B. Net cash flows from investing activities - - - -

Cash flows from financing activities
Increase in Exchange Equalization Account - - - -
Increase in Share Capital - - - -
Dividend paid - - - -
C. Net cash flows from financing activities - - - -

D. Net increase in cash and cash equivalent (A+B+C) 560,836 1,163,084,555 316,702 24,927,950
E.Effects of exchange rate changes on cash and cash-equivalents - - - -
F.Net increase in cash and cash equivalent (D+E) 560,836 1,163,084,555 316,702 24,927,950
G.Cash & Cash Equivalents at the beginning of the year - - - -

H.Cash & Cash Equivalents at the end of the year 560,836 1,163,084,555 316,702 24,927,950
123
 Off-shore Banking Unit (OBU) Notes to the Financial Statements
For the year ended 31 December 2017
1 Status of the unit
The Bank obtained the Off-shore Banking Unit (“the Unit”) License on 17 February’14 vide letter # BRPD (P-
3)744(121)/2014-934 from Bangladesh Bank. The Bank commenced operation of this unit from 22 may 2014. The
Off-shore Banking Unit is governed under the rules and guidelines of the Bangladesh Bank. Its office is located at AIBL
Motijheel Branch, 161, Motijheel Commercial Area Dhaka 1000.
1.1 Principal activities
The principal activities of OBU are to provide Mudaraba Investment against payment of import bills under UPAS
(Usance Payment at Sight) and Musharaka Documentary Bills in foreign currency (MDB F.C) to its customers.
2 Significant accounting policies and basis of preparation of financial statements
2.1 Basis of accounting
The Off-shore Banking Unit maintains its accounting records in USD from which accounts are prepared according
to the Bank Companies Act, 1991, Bangladesh Accounting Standards, Bangladesh Financial Reporting Standard
(BFRS) and other applicable directives issued by the Bangladesh Bank, in particular, Banking Regulations and Policy
Department (BRPD) Circular No. 15 (09 November 2009).
2.2 Use of estimates and judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts 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 in the period in which the estimate is revised and in any
future periods affected.
2.3 Foreign currency transaction
a) Foreign currency transactions are converted into equivalent taka using the ruling exchange rates on the dates of
respective transactions as per BAS-21” The Effects of Changes in Foreign Exchange Rates”. Foreign currency balances
held in US Dollar are converted into Taka at weighted average rate of inter-bank market as determined by Bangladesh
Bank on the closing date of every month. 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 and converted into Taka equivalent.
b) Assets and liabilities & income and expenses have been converted into Taka currency @ US$1 = Taka 82.70 closing
rate as at 31 December 2017.
a) Commitments
Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are
translated at contracted rates. Contingent liabilities/commitments for letter of credit and letter of guarantee
denominated in foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance date.
b) Translation gains and losses
The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising
on the translation of net investment in foreign subsidiary.
2.4 Cash and cash equivalents
Cash and cash equivalents are accounted for notes and coins in hand, highly liquid financial assets, unrestricted
balances held with other banks/financial institutions and Bangladesh Bank.
3 Investments
a) General investments of Off-shore Banking Units are stated in the Balance Sheet net off unearned income. Provisions
for investments are made as per instructions contained in Bangladesh Bank BRPD Circular No. 14 dated 23 September
2012 and BRPD Circular No. 19 dated 27 December 2012.
b) Profit is calculated on a daily product basis but charged and accounted for on accrual basis. Profit is not charged
on bad and loss investments as per guidelines of the Bangladesh Bank. Records of such interest amounts are kept in
separate memorandum accounts.
c) A provision is recognized in the balance sheet when the unit has a legal or constructive obligation as a result of
a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in
accordance with the BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.
4. Placement with Banks & Other Financial institutions
The OBU has financed fund to different Authorized dealer as placement mode to Al-Arafah Islami Bank Ltd reside in
Bangladesh as per FE Circular No.03 dated 04.02.2013
124
 Off-shore Banking Unit (OBU) Notes to the Financial Statements
For the year ended 31 December 2017
2017 2016
Name of the Bank Name of the AD Branch USD Taka USD Taka
Al-Arafah Islami Bank Ltd. Motijheel Branch 3,851,714.75 318536727.00 3694672.62 290811746.00
Al-Arafah Islami Bank Ltd. Dilkusha Branch 6,614,833 .20 547046706.00 1950067.30 153491942.00
Al-Arafah Islami Bank Ltd. West Jatrabari Branch 701,356 .60 58002109.00 2298096.26 180885685.00
Al-Arafah Islami Bank Ltd. Gulshan Branch. 2,335,162 .56 193117861.00 62688.60 4934289.00
13,503,064.12 116703403.00 8005524.78 630123662.00
5. Placement from Banks & Other Financial institutions
The OBU has borrowed fund from different Banks & Other Financial institutions reside in Bangladesh and outside
Bangladesh in the mode of Placement.
2017 2016
Name of the Bank USD Taka USD Taka
In Bangladesh
Al-Arafah Islami Bank Ltd. 43,701,872.59 3,614,144,863.19 34,901,407.50 2,747,128,175.87

Outside Bangladesh 76,995,473.00 6,367,525,617.10 28,081,121.51 2,210,295,963.28

6. Profit income
In terms of the provisions of the BAS-18 “Revenue”, the profit income is recognized on accrual basis.
6.1 Fees and commission income
Fees and commission income arises on services provided by the units are recognized on a cash receipt basis.
Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of
effecting the transactions.
6. 2 Profit paid and other expenses
In terms of the provisions of the BAS - 1 “Presentation of Financial Statements” interest and other expenses are
recognized on accrual basis.
6.3 Allocation of common expenses
Establishment expenses in the nature of rent, rates, taxes, management expenses, printing and stationery, electricity,
postage, stamps, telecommunication and audit fees etc. have not been separately accounted for in the financial
statements, but staff costs (salaries and allowances) are separately accounted for OBU
7. Profit paid on deposits & Borrowings
2017 2016
USD Taka USD Taka
AIBL Treasury Division 3952519 326873334 2237234 176095088
AIBL AD Branches 564581 46690854 319577 25154291
4517100 373654188 2556811 201249379

8. Principles of Shariah
Any gains, expenses & losses not permitted in the Shariah and not duly approved by the Shariah Supervisory
Committee is not accounted for and income thus derived transferred/expensed as per approval of the Shariah
Supervisory Committee.
9. Cash flow statement
Cash flow statement has been prepared in accordance with the BAS-7 “Cash flow statement” under direct method
as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation and Policy
Department of Bangladesh Bank.
10. General
These financial statements are presented in BDT, which is the Bank’s functional currency. Figures appearing in these
financial statements have been rounded off to the nearest BDT.
11. Reporting period
The financial statements cover from 1st January 2017 to December 31, 2017.
125
 Off-shore Banking Unit (OBU) Notes to the Financial Statements
For the year ended 31 December 2017
2017 2016
USD Taka USD Taka
Cash
a) Cash in hand
In local currency - - - -
In Foreign currency - - - -
b) Balance with Bangladesh Bank
In local currency
In Foreign currency - - - -
- - - -
c) Balance with Sonali Bank Ltd. - - - -
In local currency
In Foreign currency - - - -
- - - -
Balance with other Banks and Financial Institutions
In Bangladesh: 560,836 46,381,153 316,702 24,927,950
Outside Bangladesh
560,836 46,381,153 316,702 24,927,950

Placement with Banks & Other Financial institutions 13,503,064 1,116,703,403
Investments in Share & Securities
Government Securities
Bangladesh Govt. Islami Bond Fund
Investment In Islamic Refinance Fund - - - -
In shares (quoted and unquoted) - - - -
Quoted - - - -
Private (8.b) - - - -
Unquoted - - - -
Investments
a) General Investment
i. in Bangladesh
Murabaha Investment - - - -
Bai-Muazzal Investment - - - -
Hire Purchase Investment - - - -
Quard - - - -
Other Investment - - - -
- - - -
ii. Out side Bangladesh
b) Bill Purchased & Discounted
Payable in Bangladesh
Payable out side Bangladesh 107,194,026 8,864,945,987 62,981,405 4,957,335,636
107,194,026 8,864,945,987 62,981,405 4,957,335,636
Fixed Assets
Tangiable Assets
Land - - - -
Building - - - -
Furniture (Wood) - - - -
Furniture (Steel) - - - -
Computer - - - -
Computer (Accossories) - - - -
Motor Car - - - -
Machine equipment & appliance - - - -
Online Hardware - - - -
Interior Decoration - - - -
Books & Library - - - -
126
 Off-shore Banking Unit (OBU) Notes to the Financial Statements
For the year ended 31 December 2017
2017 2016
USD Taka USD Taka
Intangiable Assets
Online Software
Total - - - -
Less Accumulated Depreciation
- - - -
Other Assets
Placement from Banks & Other financial Institutions
Parent Bank 43,701,873 3,614,144,863 34,901,408 2,747,128,176
Out Side Bangladesh 76,995,473 6,367,525,617 28,081,122 2,210,295,963
120,697,346 9,981,670,480 62,982,529 4,957,424,139
Deposit and Other Accounts
Mudaraba Savings Deposits - - - -
Mudaraba Term Deposits - - - -
Other Mudaraba Deposits - - - -
Al-Wadia Current Accounts and Others Accounts etc - - - -
Bills Payable - - - -
Other Liabilities
a) Authorised Capital
The Authorized Capital of the Bank is Ordinary Share of Tk. 10 each.
b) Issued, Subscribed and Fully Paid - up Capital
Issued for Cash
Issued for other than Cash ( Bonus Share )
Statutory Reserve
Opening balance beginning of the year
Add. Reserve @ 20% (on pre-tax profit)
Balance at the end of the year.
Other Reserve
Asset revaluation Reserve
Retained Earnings
Opening balance beginning of the year 315,577 24,839,447 146,671 11,513,634
Less : transfer to Parent bank (315,577) (24,839,447) (146,671) (11,513,634)
Add: Profit during the year 560,581 46,360,054 315,577 24,839,447
Less : transfer to Parent bank
560,581 46,360,054 315,577 24,839,447
Investment Income 5,081,681.29 420,255,042.68 2,876,388.08 226,403,669.80
Profit paid on Deposits & Borrowing (4,517,100.22) (373,564,188.19) (2,556,810.65) (201,249,378.75)
Income from Investment in Share /Securities
Commission, Exchange & Brokerage Income
Commission
Exchange
Brokerage commision
Other Operating Income
Salaries, Allowances & Contribution to P.F
Director & Sharia Council Fees & Expenses
i. Directors fees for attending Board/executive Committee/other committee meeting
ii. TA/DA/ Hotel fare & Foreign Directors
iii. Others
Sharia Supervisory Committee’s Fees & Expenses
i. Sharia fees for attending meeting
ii. TA/DA/ Hotel fare & Foreign Directors
127

iii. Others
 Off-shore Banking Unit (OBU) Notes to the Financial Statements
For the year ended 31 December 2017
2017 2016
USD Taka USD Taka
Rent,Taxes,Insurance & Lighting
Rent Office
Lighting & Electricity
Insurance
Postage,Telegram,Telephone & Stamp
Stamp and Catridge paper
Postage
Fax Charges
Telephone (Office)
Telephone (Residence)
Telephone (Mobile)
SWIFT Charge 4,000 330,800 4,000 314,844
Internet Charges
Online Charge
4,000 330,800 4,000 314,844
Depreciation Repairs to the Bank’s property
Repairs to the Bank’s property
R.R. Furniture & Fixture (Wooden)
R.R. Furniture & Fixture (Steel)
R.R. Computer
Maint. of Motor Car and other Vahicle
R.R. Machine equipment & appliances
Maintenance of Land & Building
Maintenance of Rented Premises
R.R. Computer Accessories
R.R. Others
Software Maintenance Fee
Hardware Maintenance Fee
Depreciationto the Bank’s property
Depr. Furniture (Wood)
Depr. Furniture (Steel)
Depr. Computer
Depr. Motor Car
Depr. Machine equip & Appliance
Depr. Books & Library
Depr. Land & Building
Depr. Online Hardware
Depr. Online Software
Depr. Computer Accessories
Depr. Interior Decoration
Stationary,Printing & Advertisement
Printing & Stationerty
Paper & Table Stationery
Advertisement & Publicity Expenses
Other expenses
Cash and Cash Equivalent at the end of the year
Cash in hand
Balance with Bangladesh Bank & Sonali Bank Ltd.
Balance with Parent Banks 560,836 46,381,153 316,702 24,927,949
Bangladesh Government Islamic Investment Bond
560,836 46,381,153 316,702 24,927,949
128
129
130
 Related Party Disclosure
Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence
over the other party in making financial and operating decision. Related party information are given below:
131
132
 340,00,00,000
133
Name of the Directors and their shareholdings in the year- 2017
Ending position on Opening position
Sl. Name of Directors Status Remarks
31/12/2017 on 01/01/2017
1. Al-Hajj Abdus Samad Chairman 22376392 shares of 22376392 shares of
Tk. 10/- each Tk. 10/- each
Tk 22,37,63,920/- Tk 22,37,63,920/-
2. Al-Hajj Mohammed Vice-Chairman 20166568 shares of 20166568 shares of
Abdus Salam Tk. 10/- each Tk. 10/- each
Tk 20,16,65,680/- Tk 20,16,65,680/-
3. Al-Hajj Badiur Rahman Sponsor 27735057 shares of 27735057 shares of
Director Tk. 10/- each Tk. 10/- each
Tk 27,73,50,570/- Tk 27,73,50,570/-
4. Al-Hajj Md.Harun-Ar- Sponsor 19886609 shares of 19886609 shares of
Rashhid Khan Director Tk. 10/- each Tk. 10/- each
Tk 19,88,66,090/- Tk 19,88,66,090/-
5. Al-Hajj Abdul Malek Sponsor 19941603 shares of 19941603 shares of
Mollah Director Tk. 10/- each Tk. 10/- each
Tk 19,94,16,030/- Tk 19,94,16,030/-
6. Hafez Al-Hajj Md. Sponsor 19891573 shares of 19891573 shares of
Enayetullah Director Tk. 10/- each Tk. 10/- each
Tk 19,89,15,730/- Tk 19,89,15,730/-
7. Al-Hajj Md. Liakat Ali Director 19892484 shares of 19892484 shares of
Chowdhury Tk. 10/- each Tk. 10/- each
Tk 19,89,24,840/- Tk 19,89,24,840/-
8. Al-Hajj Nazmul Ahsan Sponsor 20719699 shares of 20719699 shares of
Khaled Director Tk. 10/- each Tk. 10/- each
Tk 20,71,96,990/- Tk 20,71,96,990/-
9. Al-Hajj Ahamedul Haque Director 19886507 shares of 19886507 shares of
Tk. 10/- each Tk. Tk. 10/- each Tk.
19,88,65,070/- 19,88,65,070/-
10. Al-Hajj Kh. Mesbah Uddin Director 19887271 shares of 19887271 shares of
Ahmed Tk. 10/- each Tk. Tk. 10/- each Tk.
19,88,72,710/- 19,88,72,710/-
134
 Name of the Directors and their shareholdings in the year- 2017
Ending position on Opening position Remarks
Sl. Name of Directors Status
31/12/2017 on 01/01/2017
11. Al-Hajj Abu Naser Director 24557236 shares of 24557236 shares of
Mohammad Yeahea Tk. 10/- each Tk. Tk. 10/- each Tk.
24,55,72,360/- 24,55,72,360/-

12. Alhajj Md. Anowar Sponsor 22015623 shares of 22015623 shares of

Hossain Director Tk. 10/- each Tk. Tk. 10/- each Tk.
22,01,56,230/- 22,01,56,230/-

13. Al-Hajj Niaz Ahmed Director 19988724 shares of 19988724 shares of

Tk. 10/- each Tk. Tk. 10/- each Tk.
19,98,87,240/- 19,98,87,240/-

14. Al-Hajj Salim Rahman Director 19887005 shares of 19887005 shares of

Tk. 10/- each Tk. Tk. 10/- each Tk.
19,88,70,050/- 19,88,70,050/-

15. Al-Hajj Mohammed Sponsor 20002078 shares of 20002078 shares of

Haroon Director Tk. 10/- each Tk. Tk. 10/- each Tk.
20,00,20,780/- 20,00,20,780/-

16. Al-Hajj Mohammed Director 19910659 shares of 19910659 shares of

Emadur Rahman Tk. 10/- each Tk. Tk. 10/- each Tk.
19,91,06,590/- 19,91,06,590/-

17. Al-Hajj Badsha Meah Sponsor 19886651 shares of 19886651 shares of

Director Tk. 10/- each Tk. Tk. 10/- each Tk.
19,88,66,510/- 19,88,66,510/-

18. Jb. Khalid Rahim FCA Independent Nil Nil

Director

19. Jb. Faruq Ahmed Siddiqi Independent Nil Nil

Director

20. Jb. Md. Amir Uddin PPM Independent

Director

21. Jb. Md. Habibur Rahman Ex-Officio 187 shares of 187 shares of
Managing Director Director Tk. 10/- each Tk. Tk. 10/- each Tk.
1,870/- 1,870/-
135
 Disclosures on
Risk Based Capital (Basel-III)
The public disclosure of prudential information is an important component of Basel Committee on Banking Supervision’s
framework of capital measurement and capital adequacy, known as Basel III. Bangladesh Bank has specified the standard
of disclosure through Guidelines on Risk Based Capital Adequacy (December 2010) which revised in Basel III Guideline on
December 2014 with effect from January2015.The standard aims to enhance the transparency in Bangladeshi financial market
by setting minimum requirement for the disclosure of information on the risk management practice and capital adequacy.
To cope up with the international best practices and to make the bank’s capital shock absorbent ‘Guidelines on Risk Based
Capital Adequacy(RBCA) for banks’(Revised Regulatory Capital Framework in line with Basel II) was introduced from January
01, 2009 as a parallel run with BRPD Circular No. 10, dated November 25,2002 (Basel I). At the end of parallel run, Basel II
regime started from January 01, 2010 and the guidelines on RBCA came fully into force with its subsequent supplements/
revisions. After that Bangladesh Bank issued ‘Guidelines on Risk Based Capital Adequacy (RBCA) for banks’ (Revised Regulatory
Capital Framework in line with Basel III) vide its BRPD Circular 18 dated December 21, 2014 that Basel III reporting start from
January 2015 and full implementation will start from January 2020. Instructions regarding Minimum Capital Requirement
(MCR), Adequate Capital and Disclosure requirement as stated in the guidelines had to be followed by all scheduled banks
for the purpose of statutory compliance.
An Action Plan/Roadmap was issued by Bangladesh Bank for implementation of Basel-III in Bangladesh vides BRPD Circular
No: 18 Dated: 21December, 2014. For effective implementation of Basel-III, the Guidelines on Risk Based Capital Adequacy
(Revised Regulatory Capital Framework in line with Basel III) has been issued by Bangladesh Bank.
Action Plan/Roadmap Action
Action Deadline
Issuance of Guidelines on Risk Based Capital Adequacy December 2014
Commencement of Basel III Implementation process January 2015
Capacity Building of the Banks January 2015- December 2019
Initiation of Full Implementation of Basel III January 2020

Phase-in Arrangements
The phase-in arrangements for Basel III implementation will be as follows:
2015 2016 2017 2018 2019 2020
Minimum Common Equity Tier-1(CET-1) Capital Ratio 4.50% 4.50% 4.50% 4.50% 4.50% 4.50%
Capital Conservation Buffer - 0.625% 1.25% 1.875% 2.50% 2.50%
Minimum CET-1 plus Capital Conservation Ratio 4.50% 5.125% 5.75% 6.375% 7.00% 7.00%
Minimum T-1 Capital Ratio 5.50% 5.50% 6.00% 6.00% 6.00% 6.00%
Minimum Total Capital Ratio 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Minimum Total Capital plus Capital Conservation Buffer 10.00% 10.625% 11.25% 11.875% 12.50% 12.50%

The Basel III framework consists of three-mutually reinforcing pillars:

Pillar 1 : Minimum capital requirements for credit risk, market risk and operational risk
Pillar 2 : Supervisory review process(SRP)
Pillar 3 : Market discipline
Market discipline (Pillar 3) comprises a set of disclosures on the Capital Adequacy and Risk Management framework of
the Bank. Pillar 3 disclosures as per BB circular on Basel-III Capital Regulations are set out in the following sections for
information.
The disclosures (qualitative and quantitative) under the revised Risk Based Capital Adequacy (RBCA) framework as advised
by Bangladesh Bank based on the audited financial position of the bank as of 31st December, 2015 are presented below:
1. Scope of Application 2. Capital Structure
3. Capital Adequacy 4. Credit Risk
5. Equities: Disclosures for Banking book positions 6. Interest Rate Risk in the Banking Book (IRRBB)
7. Market Risk 8. Operational Risk
9. Liquidity Ratio 10. Leverage Ratio
11. Remuneration
136
 1. Scope of application:
a.Qualitative Disclosures
The name of the top corporate Al-ArafahIslami Bank Limited
entity to which this framework
applies
An outline of differences in Consolidated financial statements are the financial statements of a group (parent and
the basis of consolidation for subsidiaries) presented into one. This offers the benefit of viewing the whole group’s
accounting and regulatory combined financial information together to see how all companies are doing jointly.
purposes, with a brief The bank has an approved disclosure policy to observe the disclosure requirements
description of the entities within set out by the Bangladesh Bank and International Financial Reporting Standard (IFRS)
the group and International Accounting Standards (IAS) as adopted by the Institute of Chartered
Accounts of Bangladesh (ICAB) into Bangladesh Financial Reporting Standards (BFRS)
and Bangladesh Accounting Standards (BAS) where relevant to the bank
(i) that are fully consolidated;
A group consists of a parent entity and all its subsidiaries. The control exercised by
(ii) that are given a deduction the parent entity is the power to govern the financial and operating policies of the
treatment; and subsidiaries so as to obtain benefits from its activities.
(iii) that are neither consolidated Consolidated financial statements represent combination of the financials of all
nor deducted subsidiaries of the parent entity. This consolidation is required when a parent owns
(e.g. where the investment is 50 percent or more shares in the subsidiaries with controlling authority.
risk-weighted) Procedures
In preparing consolidated financial statements, an entity combines the financial
statements of the parent entity and its subsidiaries and the items covered are mainly
assets, liabilities, equity, income and expenses. However intra group balances,
transactions, income and expenses are eliminated in full.
The financial statements of the parent and its subsidiaries used in the preparation of
the consolidated financial statements are of the same date. Consolidated financial
statements are prepared using uniform accounting policies for both the parent entity
and the subsidiaries.
Minority interest is presented in the consolidated statement of financial position
within equity segment but separately from the equity of the owners of the parent
entity.
Consolidation for regulatory purposes
Banks having subsidiaries have been advised to consolidate their financial statements
following accounting standards as set by the regulators to assess capital adequacy.
As such the bank has prepared capital adequacy report on Solo basis as well as on
consolidated basis.
If subsidiaries financials are not consolidated with that of the Bank, investments in
subsidiaries by the bank will be deducted at 50% from Tier 1 and 50% from Tier 2
capital of the bank. The assets representing the investments in subsidiaries whose
capital had been deducted from that of the parent would not be included in total
assets for the purposes of computing CAR.
Off-Shore Banking Unit (OBU)
The Bank obtained the Off-shore Banking Unit (“the Unit”) License on 17 February’14
vide letter # BRPD (P-3)744(121)/2014-934 from Bangladesh Bank. The Bank
commenced operation of this unit from 22 may 2014. The Off-shore Banking Unit is
governed under the rules and guidelines of the Bangladesh Bank. Its office is located
at AIBL Motijheel Branch, 161,Motijheel Commercial Area , Dhaka 1000.
Al-ArafahIslami Bank Limited has 4 (Four) subsidiaries viz.
a. AIBL Capital Market Services Ltd.
b. AIBL Capital Management Ltd.
c. AIBL Asset Management Co. Ltd.
137
 d. Millennium Information Solution Limited (MISL).
Al-ArafahIslami Bank holds 60.50%, 98%,98% and 51% of AIBL Capital Market
Services Ltd. AIBL Capital Management Ltd. AIBL Asset Management Co. Ltd.
Millennium Information Solution Limited (MISL) respectively.
A brief description of the Bank and its subsidiary are given below:
a. AIBL Capital Market Services Limited
AIBL Capital Market Services Limited was incorporated as subsidiary company of Al-
ArafahIslami Bank Limited with an authorized capital of Tk. 10 billion and paid-up
capital of Tk. 4 billion of which AIBL holding is 60.50%. The main objectives of the
company are to carry out the business of Stock Broker and Dealer in the Capital Market.
b. AIBL Capital Management Limited
AIBL Capital Management Limited, a subsidiary company of Al-ArafahIslami Bank
Limited, was incorporated with an authorized capital of Tk. 2 billion and paid-up
capital of Tk. 500 million. The main objectives of the company are to carry out the
business of Merchant Banking in all its aspects including Issue Management (IPO,
Right Share Issue, Bond Issue etc.), Portfolio Management, Underwriting, Corporate
Advisory Services, Pre-IPO Placement, Investment Analysis and Research etc.
c) AIBL Asset Management Co. Ltd.
Another subsidiary company in the name of AIBL Asset Management Co. Ltd. has
already been incorporated with Authorized Capital of Tk. 500 million and Paid
up Capital of Tk. 100 million to carry out the business of Asset Management,
Portfolio Management, Capital Market Operation and other financial services. The
shareholding ratio of AIBL and its another subsidiary AIBL Capital Market Services
Limited is 9:1. We hope that the company will start its functioning very soon.
d) Millennium Information Solution Limited (MISL)
Al-ArafahIslami Bank Ltd. owned 51% shares of Millennium Information Solution
Limited a subsidiary company of Al-ArafahIslami Bank Limited. Millennium
Information Solution Limited, a private limited Company was incorporated in
Bangladesh under the Companies Act 1994 on February 11, 2001. The main objective
of company is to carry on activities relating to developing software products and
providing maintenance and support services both the domestic and international
clients. Over the years, MILS has established itself as the leading software developer,
implementation and service provisioning company in Bangladesh which adheres to
the rules of Islamic Shariah.

c) Any restrictions, or other major impediments on transfer of funds or regulatory capital Not Applicable
within the group.
b.Quantitative Disclosures
The aggregate amount of surplus capital of insurance subsidiaries (whether deducted or Not Applicable
subjected to and alternative method) included in the capital of the consolidated group.
138
 2) Capital structure:
1. Qualitative Disclosures:
a) Summary information on the For the purpose of calculating capital under capital adequacy framework, the capital
terms and conditions of the of banks shall be classified into two tiers. The total regulatory capital will consist of
main features of all capital sum of the following categories:
instruments, especially in the 1) Tier 1 Capital (going-concern capital):
case of capital instruments a) Common Equity Tier 1
eligible for inclusion in CET 1, b) Additional Tier 1
Additional Tier 1 or Tier 2
2) Tier 2 Capital (gone-concern capital)
Common Equity Tier 1 Capital: It is called ‘Core Capital’ comprises of highest quality
of capital elements consists of –
I. Fully Paid-up Capital
II. Statutory Reserve
III. Non-Repayable Share Premium Account
IV. General Reserve
V. Retained Earnings
VI. Minority Interest in Subsidiaries
VII. Dividend Equalization Account
VIII. Less: Regulatory adjustments applicable on CET1
Additional Tier 1:
i) Non-cumulative irredeemable preference share
ii) Instruments issued by the banks that meet the qualifying criteria for AT1
iii) Minority Interest i.e. AT1 issued by consolidated subsidiaries to third parties as
specified in Annex-4 of Basel III Guidelines (For Consolidated Reporting)
Less:Regulatory adjustments applicable on AT1
Tier-2 Capital :
It is called ‘gone-concern capital’ represents other elements which fall short of some
of the characteristics of the core capital consists of-
i) General Provision
ii) All other preference shares
iii) Subordinated debt
iv) Minority Interest i.e. Tier-2 issued by consolidated subsidiaries to third parties
(For Consolidated reporting only)
v) Revaluation Reserves as on 31st December, 2017
(50% of Fixed Assets and Securities and 10% of equities)
vi) Other (if any item approved by Bangladesh Bank)
Less: Regulatory adjustments applicable on Tier-2 capital
Compliance status of AIBLas per condition for maintaining regulatory capital:
1 Common Equity Tier 1 of at least 4.5% of the Total RWA Complied
2 Tier 1 will be at least 6.00 % of the Total RWA Complied
3 Minimum CRRA will be 10.00 % of the Total RWA Complied
4 Additional Tier 1 Capital can be admitted maximum up Complied
to 1.5% of the Total RWA or 33.33% of CEFI whichever
higher
5 Tier 2 Capital can be admitted maximum up to 4% of the Complied
Total RWA or 88.89% of CEFI whichever higher
6 Addition to Minimum CRRA, Capital Conservation Buffer Complied
(CCB) of 2.50% of the Total RWA is being introduced
which will be maintain in the form of CETI.
139
 2. Quantitative Disclosures:
The amount of Regulatory Capital 2017 as follows: (Figure In million)
1.Common Equity Tier-1(Going Concern Capital): Solo Basis Consolidated Basis
Fully Paid-up Capital 9,943.06 9,943.06
Statutory Reserve 7,576.58 7,576.58
Retained Earnings 2,176.62 2,259.16
Non Controlling Interest - 1,761.50
Less: Deferred Tax Assets (DTA) - -
19,696.26 21,540.30
Good will and other Insensible assets (80.45) (80.45)
Total Common Equity Tier-1 Capital 19,615.81 21,459.85
2. Tier-2 Capital : -
General Provision 2,293.46 2,293.46
Subordinated debt 3000.00 3,000.00
Revaluation Reserves for Securities up to 50% 488.77 488.77
Less: 60%of Revaluation Reserves for Fixed Assets, Securities & Equity Securities.60% (293.26) (293.26)
Total Admissible Tier-2 Capital 5,488.99 5,488.95
Total eligible capital 25,104.80 26,948.80
3) Capital Adequacy:
Qualitative Disclosures:
a) A summary discussion of the The Bank is subject to the Capital adequacy norms as per Master Circular on Basel-III
bank’s approach to assessing Capital regulations issued by the Bangladesh Bank. The Basel III capital regulation is
the adequacy of its capital to being implemented from 2015. In line with the guidelines of the Bangladesh Bank,
support current and future the Bank has adopted the following approaches for computing the capital charge.
activities For Credit Risk – Standardized Approach
For Market Risk – Standardized Approach
Operational Risk – Basic Indicator Approach
The Bank has a policy on Internal Capital Adequacy Assessment Process (ICAAP) as
stipulated by Bangladesh Bank. The ICAAP also details the Risk Appetite of the Bank,
assessment of material risks, the process for capital adequacy assessment to support
business projections, adequacy of risk control framework, capital raising plans and
Bank-wide stress testing. The periodic assessment of bank’s performance against
the Risk Appetite defined under ICAAP and results of stress testing are reported to
the Board of Directors for their review. CRAR has been computed based on the Basel
III guidelines and it is well above the regulatory minimum level of 10%.
(Figure In million)
Quantitative Disclosures :
Capital requirement under following Risk: Solo Basis Consolidated Basis
a) Capital requirement for Credit Risk 18,751.96 18,797.89
b) Capital requirement for Market Risk 104.86 108.96
c) Capital requirement for Operational Risk 1,587.93 1,717.85
d)Total Capital Requirement (b+c+d) 20,444.75 20,624.70
e) Capital to Risk –weighted Asset Ratio: 12.28% 13.06%
1.Common Equity Tier 1 (CET 1) Ratio 9.59% 10.40%
Tier 1 Capital Adequacy Ratio 9.59% 10.40%
Tier-2 Capital Adequacy Ratio 2.69% 2.66%
Capital to Risk-weighted Asset Ratio (CRAR) 12.28% 13.06%
f) Capital Conservation Buffer 1.03% 1.82%
Available Capital under Pillar 2 Requirement 4662.42 6326.50
Minimum Capital Requirement (MCR) 20,444.75 20,624.70
4) Credit Risk
1. Qualitative Disclosures:
a) Definition of past due and impaired assets (for accounting purposes)
A loan payment that has not been made as of its due date is termed as past due. Payment may be made for repayment/
renewal/rescheduling or as an installment of a claim.
The past due claims are discussed below:
140
 Special Mention Accounts (SMA):
A claim which is overdue for 90 days or more will be classified as Special Mention Account. When a loan is classified as SMA,
it needs constant monitoring and supervision as the repayment probability decreases.
Sub-Standard (SS):
The repayment of the loan has been put in doubt but the recovery is not unlikely.
Doubtful (DF):
There is less possibility of recovery of the overdue amount and probability of loss is high.
Bad /Loss (B/L):
These are the loans which have almost turned unrecoverable.
Approaches followed for specific and general allowances:
i) Specific provision:
a) Substandard : 20%
b) Doubtful : 50%
c) Bad/Loss : 100%
ii) General Provision:
a) 0.25% to 5% on different categories of unclassified loans.
b) 1% on Off Balance sheet exposure.
c) 5% on the outstanding amount of loans kept in the ‘Special Mention Account’ after netting off the amount of Interest Suspense.
For classification of loan, specific and general allowances the bank follows Master Circular-Loan Classification and Provisioning
vide BRPD circular no. 06 dated June 14, 2012; and as advised by Bangladesh Bank from time to time.
In addition to the above mentioned objective criteria, loans can be classified on the basis of subjective judgment taking into
consideration the factors such as uncertainty or doubt of repayment, continuous loss of capital, adverse situation, decrease
of value of securities, legal suit etc.
However, Bangladesh Bank can classify any claim on the basis of their subjective judgment as well as can ask the Bank to
buildup additional provision on non-performing loans.
Credit Risk Management Policy
The bank has established Credit Risk Management framework as directed by Bangladesh Bank through introduction or Risk
Management (CRM) policy guide along with implementation of the Credit Risk Grading (CRG). This framework defines CRM
structure, role, responsibilities and the processes to identify, quantify, and manage risk within the framework under the
given policy .The CRM policy is reviewed from time to time for adoption of new techniques/policies for measurement and
management of risk in line with the socio-economic scenario and investment environment of the country.
2) Quantitative Disclosures:
a) Funded:
General Investment
Murabaha Investment 48,754.96
Bai-Muazzal Investment 88,080.02
Hire Purchase Investment 63,373.69
Quard 841.72
Other Investment 21665.98
Sub Total 222,716.38
Outside Bangladesh -
Sub Total 222,716.38
Less: Unearned profit on Investment 9,347.55
Total 213,368.82
Bill Purchased & Discounted
Payable in Bangladesh 17,716.86
Payable outside Bangladesh 1,528.54
Sub Total 19,245.41
Total Funded: 232,614.23
b) Total Non- Funded: 57,041.89
c) Geographical distribution of exposures
Region Based
Dhaka Region 187,742.50
Chittagong Region 29,623.80
Sylhet Region 1,569.67
Rajshahi Region 8,368.30
Khulna Region 7,215.35
Rangpur Region 4,397.60
141
 (Figure In million)
Barisal Region 3,044.56
Total 241,961.78
d) Country based funded
Domestic 241,961.78
Overseas -
e) Country based Non-funded
Domestic 57,041.89
Overseas -
f) Major Industry wise distribution of exposures
Agriculture, Fishing and Forestry 2,800.01
Industry 112,386.00
Construction 11,823.00
Water works & Sanitary Service 391.00
Transport & communication 9,048.00
Storage 1,182.00
Trade Finance 64,701.22
Miscellaneous 39,630.55
Total 241,961.78
Less Unearned Profit on Investment 9,347.55
Total 232,614.23
g) Distribution of risk exposure by claims -
a) Claims on sovereigns and central banks 36,465.13
b) Claims on PSE - -
c) Claims on banks and securities firms 14953.80
d) Claims on corporate 84915.10
e) Claims included in the retail portfolio & small enterprises 123101.20
f) Claims secured by residential property 10137.20
g) Claims secured by commercial real estate 11649.40
h) Consumer Investment 470.60
i) Off-balance sheet items 15252.14
h) Credit risk mitigation
Claims secured by financial collateral 2249.60
Net exposure after the application of haircuts 597.60
Claims secured by eligible guarantee 6446.60
g) Residual contractual maturity breakdown of the whole portfolio
Repayable on demand -
Up to 1 month 25,538.10
More than 1 month but less than 3 months 52,398.70
More than 3 months but less than 1 year 94,270.40
More than 1 year to less than 5 year 47,135.20
More than 5 year 13,271.83
Total 232,614.23
Gross Non Performing Assets- (NPAs)
Non-performing assets to outstanding Investment ( loans and advances) 9,921.51
Movement of Non Performing Assets (NPAs)
Opening balance 8,994.98
Additions 4,703.63
Less Cash Recovery (2,027.06)
Less RSDL from CL (680.04)
Less Written Off (1070.00)
Closing balance 9,921.51
Movement of specific provisions for NPAs
Provision held at the begining of the year 2,586.67
Fully provision debt written off (754.13)
Recoveries of amount previously written off 309.97
Specific provision for the year 3,247.09
Closing balance 5,389.60
142
 5) Equities: Disclosures for Banking Book Positions
a) Qualitative Disclosures:
The bank holds unquoted equities intent of which is not trading and the same are shown as banking book asset in
balance sheet. As these securities are not quoted or traded in the bourses they are shown in the balance sheet at the
cost price and no revaluation reserve has been created against these equities.
b) Quantitative Disclosures:
Values of investments (for unquoted securities) as disclosed in the Balance Sheet:

Name of the Scrip value

Central Depository Bangladesh Ltd 3.14
Total 3.14

c) As investment in unquoted equities does not have any maturity, we have calculated capital charge on the basis of its
risk weight which is 125% of investment value.
6) Interest Rate Risk in the Banking Book (IRRBB)
a) Qualitative Disclosures:
Interest rate risk is the exposure of a bank’s financial condition due to adverse movements in interest rates. Changes
in interest rates affect a bank’s earnings by changing its net interest income and the level of other interest sensitive
income and operating income. Changes in interest rates also affect the underlying value of the bank’s assets, liabilities
and off-balance-sheet instruments because the economic value of future cash flows changes when interest rates
change.
1. Interest rate risk in the banking book can be measured on the basis of:
2. Economic value perspective- net interest income measured in a given point in time such as Economic Value of Capital
b) Quantitative Disclosures:
Maturity GAP on Banking Book Assets & Liabilities
As on December 31, 2017
(Figure In million)

Particulars Up to 1 month 1 to 3 month 3 to 12 month I to 5 years Above 5 years Total

Asset
Cash in hand 19,087.84 4,400.00 - - 16,277.90 39,765.74
Balance with other banks & Financial Institute 1,044.00 2,150.00 2,050.00 6,091.12 - 11,335.12
Placement with other banks & Financial Institute - 4,400.00 - - - 4,400.00
Investment in Shares & Securities (only HTM) - - - 8,020.59 - 8,020.59
Investment (Loans and Advances) 25,538.10 52,398.70 94,270.40 47,135.20 13,271.83 232,614.23
Fixed Assets - - - - 3,089.83 3,089.83
Other Assets 1,536.00 41.00 1,366.20 - 12,428.26 15,371.46
Total 47,205.94 63,389.70 97,686.60 61,246.91 45,067.82 314,596.97
Liabilities
Placement from other banks & Financial Institute 8,934.75 21,969.30 - - - 30,904.05
Deposits and Other accounts 34,258.23 32,192.70 68,526.00 69,778.70 40,886.60 245,642.23
Provision and other liabilities 250.50 1,386.10 413.40 - 12,223.11 14,273.11
Deferred Tax Liabilities/Assets - - - - 100.95 100.95
AIBL Subordinate Bond - - - 3,000.00 - 3,000.00
Total 43,443.48 55,548.10 68,939.40 72,778.70 53,210.66 293,920.34
GAP 3,762.46 7,841.60 28,747.20 (11,531.79) (8,142.84) 20,676.63
Cumulative GAP 3,762.46 11,604.06 40,351.26 28,819.47 20,676.63 -
143
 Impact of Upward Interest Rate on Banking Book for One Year in Different Time Buckets:
(Figure In million)
Particular/ shock Minor Moderate Major
Increase in interest rate 1.00% 2.00% 3.00%
Period Up to 1 month
GAP 3,762.46 3,762.46 3,762.46
Impact on NII (Net Interest Income) 3.14 6.27 9.41
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on Net Interest Income 1.25 2.51 3.76
Period 1 to 3 month
GAP 7,841.60 7,841.60 7,841.60
Impact on NII(Net Interest Income) 13.07 26.14 39.21
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on Net Interest Income 5.23 10.46 15.68
Period 3 to 12 month
GAP 28,747.20 28,747.20 28,747.20
Impact on NII(Net Interest Income) 215.60 431.21 646.81
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on Net Interest Income 86.24 172.48 258.72
Impact of Downward Interest Rate on Banking Book for One Year in Different Time Buckets
(Figure In million)
Particular/ shock Minor Moderate Major
Decrease in interest rate (1.00%) (2.00%) (3.00%)
Period Up to 1 month
GAP 3,762.46 3,762.46 3,762.46
Impact on NII (Net Interest Income) (3.14) (6.27) (9.41)
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on Net Interest Income (1.25) (2.51) (3.76)
Period 1 to 3 month
GAP 7,841.60 7,841.60 7,841.60
Impact on NII (Net Interest Income) (13.07) (26.14) (39.21)
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on NII (5.23) (10.46) (15.68)
Period 3 to 12 month
GAP 28,747.20 28,747.20 28,747.20
Impact on NII(Net Interest Income) (215.60) (431.21) (646.81)
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on NII (86.24) (172.48) (258.72)
Impact of Upward Interest Rate on Banking Book for up to One Year (Cumulative)
(Figure In million)
Particular/shock Minor Moderate Major
Increase in interest rate 1.00% 2.00% 3.00%
GAP 40,351.26 40,351.26 40,351.26
Period(Year) 1 Year
Impact on NII (Net Interest Income) 403.51 807.03 1,210.54
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on NII 161.41 322.81 484.22

Impact of Downward Interest Rate on Banking Book for up to One year (Cumulative)
(Figure In million)
Particular/shock Minor Moderate Major
Decrease in interest rate (1.00%) (2.00%) (3.00%)
GAP 40,351.26 40,351.26 40,351.26
Period( Year) 1 Year
Impact on NII (Net Interest Income) (403.51) (807.03) (1,210.54)
Applicable tax rate 40.00% 40.00% 40.00%
Tax adjusted impact on NII (161.41) (322.81) (484.22)
144
 7) Market Risk:
a) Qualitative Disclosures:
Views of BOD on trading/ The Board approves all policies related to market risk, sets limits and reviews
investment activities compliance on a regular basis. The objective is to provide cost effective funding
to finance asset growth and trade related transactions. Trading book consists of
positions in financial instruments held with trading intent or in order to hedge other
elements of the Trading Book. The portfolio of investment includes Government
Treasury Bills and Bonds, Prize Bonds, Shares of listed Public Limited Companies etc.
Bank always desires to invest in high yield areas and also has ensured maintenance
or Statutory Liquidity Requirements (SLR) as fixed by Bangladesh Bank.
Methods used to measure Market risk is the possibility of losing assets in the balance sheet and off- balance
Market Risk. sheet positions due to volatility in the market variables viz. interest rate, foreign
exchange rate, reinvestment and price. The bank measures impact on profitability
and impact on asset prices under market risk through Maturity GAP Analysis,
Sensitivity Analysis, VAR, and Mark to Market and has adopted Standardized
Measurement approach for measuring Market Risks under Basel-III.
Standardized approach has been used to measure the market risk. The total
capital requirement in respect of market risk is the aggregate capital requirement
calculated for each of the risk sub-categories. The methodology to calculate capital
requirement under Standardized Approach for each of these market risk categories
is as follows:
a) Capital charges for interest rate risk= Capital Charge for General Market Risk
b) Capital charges for Equity Position Risk= Capital Charge for Specific Risk+ Capital
Charge for General Market Risk
c) Capital charges for Foreign Exchange Risk=Capital Charge for General Market Risk
d) Capital charges for Commodity Position Risk=Capital Charge for General Market Risk
Market Risk Management The Bank has its own Market Risk Management System which includes Asset Liability
System: Risk Management (ALM) and Foreign Exchange Risk Management under core
risk management guidelines. The Treasury Division manage market risk covering
liquidity, interest rate and foreign exchange risks with oversight from Asset-Liability
Management Committee (ALCO) comprising senior executives of the Bank. ALCO is
chaired by the Managing Director. ALCO meets at least once in a month.
Policies and processes for Risk Management and reporting is based on parameters such as Duration, PV,
mitigating market risk: Exposure and Gap Limits, VaRetc, in line with the global best practices. Risk Profiles
are analyzed and mitigating strategies/ processes are suggested by the Asset Liability
Committee (ALCO). Their effectiveness is monitored on an on-going basis.Forex
Open Position limits (Day limit / Overnight limit), Deal-wise cut-loss limits, Stop-
loss limit, Profit / Loss in respect of cross currency trading are properly monitored
and exception reporting is regularly carried out. Holding of equities is monitored
regularly so that the investment remains within the limit as set by Bangladesh Bank.
Asset liability management committee (ALCO) analyzes market and determines
strategies to attain business goals. Reconciliation of foreign currency transactions.

b) Quantitative Disclosures:
The capital requirements for Market Risk:
(Figure In million)
SOLO Basis Consolidated Basis
Interest rate risk - -
Equity position risk 1.60 5.70
Foreign exchange risk 103.26 103.26
Commodity risk - -
Total 104.86 108.96
145
8) Operational risk:
a) Qualitative Disclosures:
i) Views of BOD on system to Operational risk is the risk of loss resulting from inadequate or failed internal
reduce operational Risk processes, people and systems or from external events. The way operational risk is
managed has the potential to positively or negatively impact a bank’s customers,its
financial performance and reputation. The Bank has put in place Board approved
governance and organizational structure with clearly defined roles and responsibilities
to mitigate operational risk arising out of the Bank’s business and operations.
ii) Performance gap of executives The bank offers competitive pay package to its employees based on performance
and staffs and merit. It always tries to develop corporate culture where employees can exert
their highest involvement and commitment to work and organization with high
ethical standards in order to build a congenial atmosphere.
The bank believes that training and knowledge sharing is the best way to reduce
knowledge gap. Therefore, it arranges trainings on a regular basis for its employees
to develop their expertise. The bank offers competitive pay package to its employees
based on performance and merit. It always tries to develop a culture where all
employees can apply his/her talent and knowledge to work for the organization with
high ethical standards in order to add more value to the company and for the economy.
iii) Potential external events No potential external events are expected to expose the Bank to significant
operational risk
iv) Policies and Processes for The Bank has adopted policies which deal with managing different Operational
mitigating operational risk: Risk. Bank strongly follows KYC norms for its customer dealings and other banking
operations. The Internal Control and Compliance Division of the Bank, the inspection
teams of Bangladesh Bank and External Auditors conduct inspection of different
branches and divisions at Head Office of the Bank and submit reports presenting the
findings of the inspections. Necessary control measures and corrective actions have
been taken on the suggestions or observations made in these reports. In 2015 ICC
Division conducted following No. of audit:
Nature of Audit No of Frequencies
Compressive & Risk based Internal Audit Annually 140 branches i.e 100% as per Audit Plan
Compressive & Risk based Internal Audit Quarterly 4 times i.e 100% as per Audit Plan
Head Office Audit & Inspection 20 Wing/Division/Zonal Head i.e
100% as per Audit Plan
Surprise Inspection 28branches i.e 100% as per Audit Plan
v) Approach for calculating capital The Bank follows the Basic Indicator Approach (BIA) in terms of BRPD Circular No.
charge for operational risk 18 dated 21 December 2014 Guidelines on Risk Based Capital Adequacy (Revised
Regulatory Capital Framework for banks in line with Basel III). The BIA stipulates
the capital charge for operational risk is a fixed percentage, denoted by α(alpha) of
average positive annual gross income of the Bank over the past three years. It also
states that if the annual gross income for any year is negative or zero, that should be
excluded from both the numerator and denominator when calculating the average
gross income. The capital charge for operational risk is enumerated by applying the
following formula:
K = [(GI 1 + GI2 + GI3) α]/n

b) Quantitative Disclosures:
(Figure In million)
b) The capital requirements for operational risk (Basic Indicator Approach)
Year Gross Income (GI) Average GI 15% of Average GI
December-2017 11,790.47
December-2016 10,751.43
December-2015 9,216.78
Total GI 31,758.68 10,586.23 1,587.93
146
 9. Liquidity Ratio:
a) Qualitative Disclosures:
i) Views of BOD on system to The Bank manages liquidity risk in accordance with its ALM Policy. This policy is
reduce liquidity Risk framed as per regulatory guidelines and is approved by the Board of Directors. The
ALM Policy is reviewed periodically to incorporate changes as required by regulatory
stipulation or to realign with changes in the economic landscape. The ALCO of the
Bank formulates and reviews strategies and provides guidance for management of
liquidity risk within the framework laid out in the ALM Policy.
ii) Methods used to measure 1) Liquidity risk is measured and monitored through two approaches-1) Time Bucket
Liquidity risk Analysis:
Time Bucket Analysis involves comprehensive tracking of cash flow mismatches and
is done through preparation of Structural liquidity statement on a regular basis.
Appropriate tolerance levels/prudential limits have been stipulated for mismatches
in different time buckets.
2) Ratio Analysis:
Under Ratio Analysis various balance sheet ratios are prescribed with appropriate
limits. The compliance of ratios to the prescribed limits ensures that the Bank has
managed its liquidity through appropriate diversification and kept it within the
sustainable limit. The Bank also assess its short-term liquidity mismatches and
reports the same in the short term dynamic liquidity report which represents the
cash flow plans of various asset and liability generating units and seasonal variation
of cash flow patterns of assets and liabilities of the bank over a period of 1-90 days.
3) Liquidity Risk Management System :
A liquidity risk management involves not only analyzing banks on and off balance
sheet positions to forecast future cash flows but also how the funding requirement
would be met. The later involves identifying the funding market the bank has access,
understanding the nature of those markets, evaluating banks current and future
use of the market and monitor signs of confidence erosion. Al-ArafahIslami Bank
Limited has well organized liquidity risk management system as enumerated in ALM
Policy which is approved by the Board. The Asset Liability Management Committee
(ALCO) of the Bank monitors & manages liquidity and interest rate risk in line with
the business strategy. ALM activity including liquidity analysis & management is
conducted through coordination between various ALCO support groups residing in
the functional areas of Balance Sheet Management, Treasury Front Office, Budget
and Planning etc.
iii) Liquidity Risk Management A liquidity risk management involves not only analyzing banks on and off balance
System sheet positions to forecast future cash flows but also how the funding requirement
would be met. The later involves identifying the funding market the bank has access,
Understanding the nature of those markets, evaluating banks current and future
use of the market and monitor signs of confidence erosion. Al-ArafahIslami Bank
Limited has well organized liquidity risk management system as enumerated in ALM
Policy which is approved by the Board. The Asset Liability Management Committee
(ALCO) of the Bank monitors & manages liquidity and interest rate risk in line with
the business strategy. ALM activity including liquidity analysis & management is
conducted through coordination between various ALCO support groups residing in
the functional areas of Balance Sheet Management, Treasury Front Office, Budget
and Planning etc.
iv) Policies and Processes for An effective liquidity risk management process should include systems to identify
mitigating Liquidity risk measure, monitor and control its liquidity exposures. To mitigate the liquidity risk,
Management of our bank identifies and quantifies the primary sources of a bank’s
following risk in a timely manner. By proper identify of the sources, management
understand both existing as well as future risk that the bank can be exposed to. Our
Management always alert for new sources of liquidity risk at both the transaction
and portfolio levels. Key elements of an effective risk management process include
an efficient MIS to measure, monitor and control existing as well as future liquidity
147

risks and reporting them to senior management and the board of directors.
 b) Quantitative Disclosures:
(Figure In million)
Liquidity Coverage Ratio 107.13%
Net Stable Funding Ratio (NSFR) 101.21%
Stock of High quality liquid assets 46,573.50
Total net cash outflows over the next 30 calendar days 43,473.80
Available amount of stable funding 252,057.60
Required amount of stable funding 249,044.20

10. Leverage Ratio:

a) Qualitative Disclosures:
i) Views of BOD on system to Excessive leverage by banks is widely believed to have contributed to the global
reduce excessive leverage financial crisis. Thus Basel III rules have introduced leverage ratio as a non-risk-
based backstop measure, to supplement risk-based capital requirements. Board
of Directors of our Bank continuously is monitoring the exposure limit of lending,
capital strength of our Bank in order to avoid building-up excessive on- and off-
balance sheet leverage.
ii) Policies and processes for Many regulators are considering raising the leverage ratio. This means that banks
managing excessive on and off will have to keep more capital reserves. To increase capital reserves in order to meet
balance sheet leverage higher leverage ratios requires selling assets to get cash or reducing lending. Higher
leverage ratio can decrease the profitability of banks because it means banks can do
less - profitable lending. However, increasing the leverage ratio means that banks
have more capital reserves and can more easily survive a financial crisis. In view
of the impact of leverage into the business, our bank management takes decision
about future investment. Considering the financial strength, Bank also make Capital
planning and business budget to go on a right way.
iii) Approach for calculating The leverage ratio is a volume-based measure and is calculated as Basel III Tier I
exposure capital divided by total on and off-balance sheet exposures.
A minimum Tier 1 leverage ratio of 3% is being prescribed both at solo and
consolidated level.
Tier-1 Capital (after related deductions)
Leverage Ratio = -------------------------------------------------
Total Exposure (after related deductions)

b) Quantitative Disclosures:
(Fig In Million)
Solo Consolidated
Leverage Ratio 5.99% 6.46%
On Balance Sheet Exposure 311,707.24 316,389.65
Off- Balance Sheet Exposure 15,758.23 15,758.23
Total Exposure 327,385.02 332,067.43
11. Remuneration:
The following remuneration disclosures have been prepared in accordance with ‘Guidelines on Risk Based Capital Adequacy
(RBCA) for banks’ provided by Bangladesh Bank. The prudential disclosures require that all banks meet the minimum
requirements for public disclosure of qualitative and quantitative information of the remuneration practices. The qualitative
remuneration disclosures are broader in scope and cover all the individuals included whereas the quantitative information
relates to senior managers and material risk takers of the Al-ArafahIslami Bank Limited, for the financial year ended December
31, 2015.
148
 a) Qualitative Disclosures:
a) Information relating to the bodies that oversee remuneration:
Managing Director, MANCOM & Head of Human Resources division governs the
remuneration related policies and practices in alignment of the banks’ short &
long term objectives. They plays an independent role, operating as an overseer;
and if required, makes recommendation to the Board of Directors of the Bank for
its consideration and final approval for any remuneration related policy. The main
work includes presenting recommendations to the Board regarding remuneration,
compensation packages of senior Management, incentive schemes and retirement
benefits. They also assist the Board of Directors to ensure that all employees are
remunerated fairly and get performance based compensation by ensuring effective
remuneration policy, procedures and practices aligned with the Banks’ strategy and
applied consistency for all employee levels. A description of the scope of the bank’s
remuneration policy (e.g. by regions, business lines), including the extent to which it
is applicable to all branches.
A description of the types of employees considered as material risk takers and as
senior managers, including the number of employees in each group.
Risk Takers are senior employees who can take, or influence the taking of, material
risk for Al-ArafahIslami Bank or for a material business unit:
Managing Director : 01
Deputy Managing Director : 05
Executive Vice President : 11
Senior Vice President : 35
b) Information relating to the design and structure of remuneration processes: Key
features of remuneration policy:
We target a fair human resources management by using a performance based system.
Our salary policy is the same in all branches and service points for the beginner level.
In addition, to drive further development of individual skill sets and competencies,
speaking foreign languages is compensated. There is no incident of discrimination has
been occurred in terms of remuneration provided to male and female employees.
Al-ArafahIslami Bank compensation program focuses on individual short-term goals
vis-a-vis long-term success and overall profitability of the Bank. Both our short-
term annual incentive and long-term compensation plans promote our pay-for-
performance philosophy, as well as our goal of having a meaningful amount of pay at-
risk, and we believe both plans provide us a competitive advantage in talent acquiring
and retaining.
Objectives of remuneration policy:
The overall objective of the Bank’s remuneration policy is to establish a framework for
attracting, retaining and motivating employees, and creating incentives for delivering
long-term performance within established risk limits. Performance is judged, not only
on what is achieved, but also on how it is achieved as well as alignment to the Bank’s
values.
Whether the remuneration committee reviewed the firm’s remuneration policy
during the past year, and if so, an overview of any changes that were made:
The remuneration committee reviewed the firm’s remuneration on 2014 and revised
the remuneration by conducting a survey considering the following facts:
149
a. Oversee Banks remuneration position and revise the structure according to the
Competitive market.
b. Align compensation strategy with business strategy
c. Determine the percentage of increment at each job grade
d. Get acquaint with the economy inflation.
Based on the survey, Bank changes the remuneration on COMPA-Ratio based of its
existing employees.
A discussion of how the bank ensures that risk and compliance employees are
remunerated independently of the businesses they oversee :
Control function of internal control and compliance directly respond of Audit
Committee of the Board and dotted report to the President and Managing Director.
Credit Risk Officer report to President and Managing Director directly.
c) Description of the ways in which current and future risks are taken into account
in the remuneration processes.
The Bank’s remuneration practices are carefully managed takes into account the
following key risks when implementing remuneration measures:
• Financial Risks
• Compliance Risks
Risk and compliance requirements represent a gateway to whether an incentive
bonus payment is made and the size of the payment. Despite, if the individual does
not me et or only partially meets compliance requirements, no award or a reduced
award may be made.
d) Description of the ways in which the bank seeks to link performance during a
performance measurement period with levels of remuneration:
Employees’ performance is appraised annually in line with the achieved objectives,
which have a positive and direct impact in their pay package. So, individual’s
remuneration may vary according to their performance. The payment is dependent
on the Board’s discretion, taking into account the recent performance of the Bank.
e) Description of the ways in which the bank seek to adjust remuneration to take
account of longer-term performance:
The Bank’s remuneration system is designed to reward long-term as well as short-
term performance, encourage retention and recognize special performance in
the organization. The Bank provides reasonable remuneration for short-term
performance besides for long-term performance the bank has some deferred
payment options (i.e. incentive bonus, gratuity, superannuation etc.).In case of
following situation remuneration can be adjusted before vesting:
• Disciplinary Action (at the discretion of Enquiry committee)
• Resignation of the employee prior to the payment date.
At the same time previously paid or already vested variable pay can also be recovered
under the case of disciplinary action.
f) Description of the different forms of variable remuneration that the bank utilizes
and the rationale for using these different forms:
A summary of Short-term and Long-term compensation plan are as follows: Total
Compensation = Fixed Pay (Salary)+Variable Pay (Bonus)+Variable Pay (Long term
incentive) Form of variable remuneration offered by Al-ArafahIslami Bank:
Cash Form:
Short-Term Incentives / Rewards
1. Yearly Increment
2. Yearly fixed and incentive bonus
3. Car, fuel and car maintenance allowance for executives
4. Accelerated promotion/Special increment for especial assignments/ accomplishment;
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 5. Cash Risk allowance for cashier;
6. Charge allowance for Head of Branches
7. Leave Encashment.
Long-Term Incentives / Rewards
1. Provident fund;
2. Gratuity;
3. Social Security& Benevolent(SSBF) fund
4. Staff House building Investment Scheme(SHBIS) reduce profit rate
5. Provident fund Quard(Investment) with zero profit rate
6. 6. Yearly professional membership fees for professional certificates holder
Non-Cash Form:
Short-Term Incentives / Rewards
1. Accelerate promotion for top talents;
2. Study leave.
Long-Term Incentives / Rewards
1. Foreign training award;

b) Quantitative Disclosures:
g) Number of meetings held by the main overseeing remuneration during the
financial year and remuneration paid to its member :
Meeting regarding overseeing the remuneration was held on as and when it required
h) Number of employees having received a variable remuneration award during the
financial year. - Nil
Number and total amount of sign-on award made during the financial year. - Nil
Number and total amount of severance payments made during the financial year.
- Nil
Total amount of outstanding deferred remuneration, split into cash, shares and
share-linked instruments and other forms. - Nil
Total amount of deferred remuneration paid out in the financial year: - Nil
j) Breakdown of amount of remuneration awards for the financial year to show.
Fixed and Variable: deferred and non-deferred
different forms used (cash, shares, share linked instruments, other forms)- - Nil
- All the remunerations are provided in the form of cash
k) Quantitative Information about employees’ exposure to implicit(e.g. fluctuations
in the value of shares or performance units) and explicit adjustments (e.g. clawbacks
or similarreversals or downward revaluation of awards) of deferred remuneration
and retained remuneration:
All the remunerations are provided in the form of cash
i) Total amount of outstanding deferred remuneration and retained remuneration
exposed to ex post explicit and/or implicit adjustments. - Nil
ii) Total amount of reductions during the financial year due to ex post explicit
adjustments. - Nil
iii) Total amount of reduction during the financial year due to ex post implicit
adjustments - Nil
151
 AUDITOR’S REPORT

To The Shareholders of
AIBL Capital Market Services Limited
Introduction
We have audited the accompanying Financial Statements of AIBL Capital Market Services Limited which comprise of the
Statement of Financial Position as at 31 December 2017 and the Statement of Profit or Loss and Other Comprehensive
Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of significant
accounting policies and other explanatory notes.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994 and
other applicable laws and regulations. This responsibility includes designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether
due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with relevant ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from
material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the
risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order
to design audit procedure that are appropriate in the circumstance, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh
Financial Reporting Standard (BFRSs), give a true and fair view of the state of the company’s affairs as at 31 December 2017
and of the results of its operations for the yearthen ended comply with the Companies Act 1994 and other applicable laws
and regulations.
We also report that
a) 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 ;
b) in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from
our examination of these books ;
c) the Statement of Financial Position, Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes
in Equity and Statement of Cash Flows dealt with by the report are in agreement with the books of account ; and
d) the expenditure incurred was for the purposes of the company’s business.

Dated: Dhaka (S. H. Khan & Co.)

February 15, 2018 Chartered Accountants
153
 Statement of Financial Position as at December 31, 2017
Particulars
Amount (In Taka) Amount (In Taka) Notes
31.12.2017 31.12.2016
ASSETS:
Non - Current Assets: 18,713,240 20,362,532
Property, Plant & Equipment 4 18,713,240 20,362,532
Current Assets: 11,621,076,177 12,985,571,886
Account Receivable 5 409,861,191 53,598,056
Investment 6 8,199,054,467 10,008,800,560
Investment in Share (DSE & CSE) 7 700,000,000 700,000,000
Advance, Deposits & Prepayment 8 7,735,476 9,229,248
Advance Income Tax 9 2,096,930,307 1,680,493,862
Cash and Cash equivalent 10 207,494,736 533,450,160

Total Assets: 11,639,789,417 13,005,934,418

EQUITY AND LIABILITIES:
Capital and Reserve: 4,130,208,335 4,055,863,955
Paid -up Capital 11 4,000,000,000 4,000,000,000
Retained Earning 130,208,335 55,863,955

Current Liabilities: 7,509,581,082 8,950,070,463
Borrowing from Bank 12 4,690,423,901 2,918,092,979
Accounts Payable 13 363,320,041 3,731,024,964
Provision for Investments 14 428,009,835 343,709,835
Provision for taxation 15 2,027,827,305 1,957,242,685
Total Equity and Liabilities: 11,639,789,417 13,005,934,418

The annexed notes form an integral part of these financial statements.

Director Director Managing Director

Signed subject to our seperate report of even date.




Dated : Dhaka (S. H. Khan & CO.)
February 15, 2018 Chartered Accountants
154
 Statement of Profit or Loss and Other Comprehensive Income For the Year ended 31 December, 2017
Particulars Notes Amount (In Taka) Amount (In Taka)
2017 2016
Investment Income 16 480,236,262 1,220,161,707
Profit paid on Borrowing 17 (514,566,486) (231,913,177)
Net Investment Income (34,330,224) 988,248,530
Income from Commission, Exchange & Others:
Brokerage Commission 18 382,481,895 265,307,550
Documentation & Maintenance Fess 19 5,108,000 4,888,000
Other Operating Income 20 45,279,831 21,480,206
432,869,726 291,675,756
Total operating Income (A) 398,539,502 1,279,924,286

Hawla,Laga & CDBL Charges 21 42,426,549 31,830,185

Salary allowances& Contribution to P.F 22 59,949,037 44,775,054
Rents, Taxes, Insurance, Lighting etc. 23 11,530,435 11,060,624
Honorarium & Meetting Expense 24 7,143,200 4,451,000
Law Charges 77,434 211,730
Postage, Telegram, Telephone & Stamps etc 25 698,344 510,808
Depreciation, Amortization & Repairs to Properties 26 7,193,974 6,607,067
Stationary, Printing, Advertisement etc. 1,671,705 1,691,107
Other Expenses 27 38,619,824 18,725,090
Total operating expenses (B) 169,310,502 119,862,665
Profit/(loss) before provision and Tax C = (A - B) 229,229,000 1,160,061,621
Provision for Taxation 28 70,584,620 402,177,294
Provision for Investment 84,300,000 33,885,335
Net Profit after Tax 74,344,380 723,998,992
Retained Earning Brought forward 55,863,955 51,864,963
130,208,335 775,863,955
Interim Dividend Paid - 720,000,000
Retained earning Carried forward 130,208,335 55,863,955
Earning per Share (EPS) 0.19 1.81

The annexed notes form an integral part of these financial statements

Director Director Managing Director

Signed subject to our seperate report of even date.




Dated : Dhaka (S. H. Khan & CO.)
February 15, 2018 Chartered Accountants
155
 Statement of Changes in Equity for the Year Ended 31 December, 2017

Particulars Share Capital Retained Earning Total

Balance as on 1st January, 2017 4,000,000,000 55,863,955 4,055,863,955
Net profit for the Period - 74,344,380 74,344,380
Interim Dividend Paid - - -
Balance as at December 31, 2017 4,000,000,000 130,208,335 4,130,208,335

Director Director Managing Director

Statement of Changes in Equity As at 31 December, 2016

Particulars Share Capital Retained Earning Total

Balance as on 1st January, 2016 4,000,000,000 51,864,963 4,051,864,963
Net profit for the Period - 723,998,992 723,998,992
Interim Dividend (720,000,000) (720,000,000)
Balance as at December 31, 2016 4,000,000,000 55,863,955 4,055,863,955

Director Director Managing Director

156
 Statement of Cash Flows For the Year ended December 31, 2017
Particulars Amount (In Taka) Amount (In Taka)
2017 2016

Cash flows from operating activities

Investment income receipt in Cash 480,236,262 1,220,161,707
Profit paid on deposits and borrowing (514,566,486) (231,913,177)
Commission received in cash 382,481,895 265,307,550
Cash payments to employees (59,949,037) (44,775,054)
Cash payments to suppliers (1,671,705) (1,691,107)
Received from other operating activities (item-wise) 50,387,831 26,368,206
Paid for other operating activities (item-wise) (102,261,450) (68,061,638)
Advance income tax paid (416,436,445) (344,049,863)
Operating profit before changes in operating assets and liabilities (181,779,135) 821,346,624

Changing in Operating assets & liabilities
Increase/Decrease Investment 1,809,746,093 (1,303,555,746)
Increase/Decrease of Accounts receivable (356,263,135) 5,636,145
Increase/Decrease of Borrowing 1,772,330,922 516,097,697
Increase/Decrease of Accounts payable (3,367,704,923) 895,135,554
Increase/Decrease of other assets (item-wise) 1,493,772 (2,184,905)
Increase/Decrease of other liabilities (item-wise) - -
Cash receipt from operating activities (140,397,271) 111,128,745

A. Net Cash from operating activities (322,176,406) 932,475,369
Cash flows from investing activities:
Purchase of property, plant and equipment (3,779,018) (13,984,521)

B. Net cash flows from investing activities (3,779,018) (13,984,521)
Cash flows from financing activities
Increase in Share Capital - -
Interim Dividend Paid - (720,000,000)
C. Net cash flows from financing activities - (720,000,000)
D. Net increase in cash and cash equivalent (A+B+C) (325,955,424) 198,490,848
E.Effects of exchange rate changes on cash and cash-equivalents - -
F.Net increase in cash and cash equivalent D+E (325,955,424) 198,490,848
G.Cash & Cash Equivalents at the beginning of the period 533,450,160 334,959,312

H.Cash & Cash Equivalents at the end of the period 207,494,736 533,450,160

Director Director Managing Director

157
 AIBL CAPITAL MARKET SERVICES LIMITED
Notes to the Financial Statement
For the year ended 31st December, 2017
1. SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATERIALS INFORMATION:
a) Legal Form of the Enterprise:
The Company is incorporated under the Companies Act 1994 as a public limited company by share namely AIBL
Capital Market Services Limited on 21st September 2010. The company was entitled to commence the business also
from 21st September 2010. The Company is a subsidiary company of Al-Arafah Islami Bank Limited.
b) Address of Registered Office and Principal Place of Business:
The principal place of business is the Registered Office at Peoples Insurance Bhaban (7th floor), 36 Dilkusha C/A, Dhaka-1000.
c) Nature of Business Activities:
The main objective of the company is to act as a member of Dhaka Stock Exchange and Chittagong Stock Exchange to
carry on the business of broker, or dealers in stocks, shares and secure commercial papers, bonds, debentures stock,
foreign currencies, treasury bills and/or any instruments. The company has eight branches in Bangladesh.
2. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:
a) Statement of Compliance:
The financial statements of AIBL Capital Market Services Limited have been prepared in accordance with the DFIM
circular No. 11 dated 23 December 2009 and requirement of the Financial Institution Act 1993, the Companies Act
1994, the Security and Exchange Commission (Amendment) Act 2012, the listing rules of Dhaka Stock and Chittagong
Stock Exchange, guideline from BB, Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting
Standards (BFRS), and other applicable laws and regulations.
b) Measurement bases used in preparing the Financial Statements:
The elements of financial statements have been measured on “Historical Cost” convention, which is one of the most
commonly adopted base provided in “the framework for the preparation and presentation of financial statements”
issued by the International Accounting Standards Board (IASB).
c) Going Concern:
Financial statements have been prepared on going concern basis as there was no significant doubt or uncertainty to
continue the operation of the company in the foreseeable future.
d) Components of financial statements:
According to International Accounting Standards (IAS)-1, as adopted by ICAB as BAS-1 “Presentation of Financial
Statements” the complete set of financial statements includes the following components;
i. Statement of Financial Position
ii. Statement of Comprehensive Income
iii. Statement of Changes in Equity
iv. Statement of Cash Flows
v. Notes, comprising a summary of significant accounting policies and other explanatory information.
vi. Comparative Figures.
3. PRINCIPAL ACCOUNTING POLICIES:
a) Statement of Cash Flows:
Cash Flow Statement is prepared in accordance with BAS-7 “Cash Flow Statement”. The cash flow from the operating
activities have been presented under Direct Method as prescribed by the Securities and Exchange Rules 1987 and
considering the provisions of Paragraph 18(b) of BAS-7 which provides that “Enterprises are encouraged to report
Cash Flow from Operating Activities using the Direct Method”.
b) Investment in security:
Investment in security are classified broadly in two categories and accounted under as follows:
I) Investment in listed securities:
Investment in listed security is carried at the lower of cost or market value in accordance with BAS-39; accordingly for
investment, adequate provision is being made at the end of each calendar year considering each individual investment
(where cost is less than market price). Unrealized gain or loss is not recognized in the Statement of Comprehensive Income.
II) Margin Investment:
AIBL Capital Market Service Limited extended margin loan to the portfolio investors at an agreed ratio (between
158
 investor deposit and loan amount) of purchases securities against the respective investor account. The investors are
to maintain the margin as per set rules and regulation. The margin is monitored on daily basis as it changes due to
change in market price of share.
If the margin falls below the minimum requirement, the investor are required to deposit additional fund to maintain
the margin as per rules or otherwise the securities be sold to bring the margin to the required level but it was not
possible to maintain under present capital market scenario.
c) Revenue Recognition:
I) Income from margin loan:
Income from margin loan is recognized on accrual basis. Such income is calculated considering daily margin loan
balance respective parties. Income is recognized on monthly rest.
II) Income from gain on sale of securities:
Capital gain or loss on disposal of security listed in the stock exchange is recorded on realized basis i.e. only when
the securities are sold in the market. Unrealized capital gain or losses are not accounted for in the Statement of
Comprehensive Income.
d) Event after balance sheet dated: BAS-10:
Events after the reporting period, dividend declared after the reporting period should not be classified as a liability at
the reporting period as the proposed dividend does not represent an Obligation under BAS-37: Provision, Contingent
Liabilities and Contingent Assets.
e) Cash & Cash equivalent :
Cash and cash equivalent includes cash in hand, cash at bank and fixed deposits which are held and are available for
use by the company without any restriction. There is insignificant risk of change in the value of the above items.
f) Provision of TAX:
Provision for income tax has been calculated on the total business income though company’s trading income is subject
to deduction of tax at source which is treated as final discharge from tax liability under Income Tax Ordinance 1984.
g) Provision on expenses:
Provision for expenses is recognized when the company has a present obligation as a result of a past event and it
is probable that an outflow of resources embodying economic benefit will be required to settle the obligations and
reliable estimate of the amount can be measured.
h) Fixed assets and depreciation:
Fixed Assets are stated at cost less accumulated depreciation. Depreciation is charged on the cost of fixed assets in
order to write off such amounts over the estimated useful lives, using the straight-line method in accordance with
BAS-16. Depreciation for full month is charged on additions irrespective of date when the related assets are put into
use and no depreciation is charged for the month of disposal and addition during the year. The rates of depreciation
used to write off the amount of assets are as follows:
Interior Decoration 10%
Computer Accessories 20%
Online Hardware 20%
Motor Car 20%
Furniture & Fixture - Steel 10%
Office Equipment 20%
Furniture Fixture - Wood 10%
Computer 20%
Online Software 20%
i) Reporting Currency and Level of Precision:
The figures in the financial statements represent Bangladesh Currency (Taka), which have been rounded-off to the
nearest Taka.
j) Comparative figures of financial statements:
The comparative figures of Statement of Financial Position for the period ended 31st December, 2017 have been
compared with the unaudited financial statements of 31st December, 2016.
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 Amount (In Taka) Amount (In Taka)
2017 2016

4.00 Property, Plant & Equipment

a) Tangible Asset
Interior Decoration 8,387,595 6,186,782
Computer accessories - -
Online Hardware 45,650 -
Motor Car 8,316,503 11,929,091
Furniture & fixture - steel 177,246 200,679
Office equipment 48,900 -
Computer 318,500 -
Furniture & fixture - wood 1,124,897 1,425,412
18,419,291 19,741,964

b) Intangible Assets
Online Software 293,949 620,568
293,949 620,568
Total (a+b) 18,713,240 20,362,532
Details have been shown in Annexure-”A”
5.00 Accounts Receivable:
Receivable from DSE 15,400,077 52,758,056
profit charged but not realised 394,461,114
Dividend Receivable - 840,000
409,861,191 53,598,056
6.00 Investments:
Margin Investment 8,186,981,984 9,783,753,077
Investment in Dealer A/C 2,072,483 215,047,483
Investment In AIBL Capital Management Ltd. 10,000,000 10,000,000
8,199,054,467 10,008,800,560

7.00 Investment in Share (DSE & CSE):
Investment in Share (DSE) 525,000,000 525,000,000
Investment in Share (CSE) 175,000,000 175,000,000
700,000,000 700,000,000

Investment in Shares of Dhaka & Chittagong Stock Exchange Limited as shown above is based on acquisition cost
from the parent company Al-Arafah Islami Bank Limited, face vale of which was Tk. 2,000 (Two thousand) and Tk.
300,000 (Three lac) per share respectively. After Demutualization, DSE alloted 7,215,106 number of ordinary shares
(of which 4,329,064 shares blocked with DSE Demutualization Blocked Account) and CSE also alloted 4,287,330
number of ordinary shares (of which 2,572,398 shares are blocked with CSE) at face value of Tk. 10/-each.
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 Amount (In Taka) Amount (In Taka)
2017 2016
8.00 Advance, Deposit & Prepayments:
Advance against for Office Space at Nikunja, Dhaka. 100,000 100,000
Advance against for Office Space Gulshan(old). 574,080 624,080
Advance against for Office Space at Amborkhana 54,450 319,050
Advance rent Gulshan Br.(New) 550,000 766,000
Advance Rent Dhanmondi - 224,000
Advance Rent Store 40,000 -
Advance Rent Uttara Br. 2,281,572 2,395,260
Advance Rent Barisal Br. 1,342,673 1,646,669
Advance Rent B. Baria 698,850 866,574
Advance Rent Khatungonj 1,012,522 1,218,466
Advance Against Petty Cash 1,081,329 1,069,149
7,735,476 9,229,248
9.00 Advance Income Tax:
Tax deducted at source DSE 49,027,519 33,656,935
Tax deducted at source CSE 1,109,533 1,956,407
TDS against Dividend 2,734,939 2,533,898
Tax deducted at source Bank 1,314,020 1,515,566
Tax paid 2017 through Chalan & Source 26,250,000 -
Tax paid 2016 through Chalan & Source 414,413,240 78,750,000
Tax paid 2015 Through Challan & Source 415,952,141 415,952,141
Tax paid 2014 through challan & Source 306,367,030 306,367,030
Tax paid 2013 through challan & Source 299,791,671 289,791,671
Tax paid 2012 through challan & Source 299,436,990 299,436,990
Tax paid 2011 through challan 260,386,748 230,386,748
Tax paid 2010 through chalan 20,146,476 20,146,476
2,096,930,307 1,680,493,862
10.00 Cash and Cash equivalent:
Al-Arafah Islami Bank Limited Note-10.01 207,485,684 533,439,958
Shajalal Islami Bank Limited 9,052 10,202
207,494,736 533,450,160
10.01 Balance at Bank:
Al-Arafah Islami Bank Limited, Motijheel Br. Dhaka (2693) 16,472 15,288
AIBL Capital Market Services Limited Cons.cust. (2927) 203,453,501 493,254,555
AIBL Capital Market Services Limited. (2936) 2,829,614 6,909,693
AIBL Capital Market Services Ltd. Dividend A/C () 443,648 9,321,106
Al-Arafah Islami Bank Limited, Gulshan - 43,000
Al-Arafah Islami Bank Limited, Khatungonj Br. - 756,000
AIBL Capital Market Services Ltd. Public Issue Application A/C 510,644 19,903,214
AIBL Capital Market Services Limited Uttara 200,000 220,000
AIBL Capital Market Services Limited SIBL 305 2,102
AIBL Capital Market Services Limited Khulna 31,500 3,015,000
207,485,684 533,439,958
11.00 Share Capital:
11.01 Authorised Capital:
The authorised Capital of the Company is 100,00,00,000
Ordinary Share of TK. 10 each. 10,000,000,000 10,000,000,000
161
 Amount (In Taka) Amount (In Taka)
2017 2016
11.02 Issued, Subscribed and fully Paid-up Capital:
Issued, Subscribed and fully Paid-up Capital
is 40,00,00,000 share of TK. 10 each. 4,000,000,000 4,000,000,000
11.03 Share Holding Position: As at 31,December 2017
Name of the Share Holder % of Share holdings No. of Shares Amount (In Taka)
Al-Arafah Islami Bank Limited 60.50% 242,000,000 2,420,000,000
Badiur Rahman 0.63% 2,500,000 25,000,000
KYCR Coils Industries Ltd. 0.50% 2,000,000 20,000,000
Alhaj Abdul Malek Mollah 0.50% 2,000,000 20,000,000
Bangladesh Ship Breaking Yeard 0.50% 2,000,000 20,000,000
AI- haj Md. Harun-ar-Rashid Khan 0.63% 2,500,000 25,000,000
Alhaj Nazmul Ahsan Khaled 0.50% 2,000,000 20,000,000
KDS Garment industries Ltd. 5.00% 20,000,000 200,000,000
Alhaj Abdus Samad 0.50% 2,000,000 20,000,000
Alhaj Abu Naser Mohammad Yeahea 4.50% 18,000,000 180,000,000
Alhaj Abus Salam 1.50% 6,000,000 60,000,000
Niaz Ahmed 0.75% 3,000,000 30,000,000
Badshah Meah 1.75% 7,000,000 70,000,000
Alhaj Kazi Md. Mofizur Rahman 2.00% 8,000,000 80,000,000
Alhaj Eng. Kh. Mesbahuddin Ahmed 1.75% 7,000,000 70,000,000
Md. Ashik Hossain 0.50% 2,000,000 20,000,000
Farid Ahmed 0.50% 2,000,000 20,000,000
Mohammed Mahtabur Rahman 1.50% 6,000,000 60,000,000
Md. Liakat Ali Chowdhury 0.25% 1,000,000 10,000,000
Mohammed Haroon 1.00% 4,000,000 40,000,000
A S M Mainuddin Monem 0.50% 2,000,000 20,000,000
Ahmedul Haque 0.25% 1,000,000 10,000,000
Sarker Mohammad Shameem Iqbal 0.25% 1,000,000 10,000,000
Mohammed Emadur Rahman 0.75% 3,000,000 30,000,000
Kazi Abu Kauser 0.50% 2,000,000 20,000,000
Master Abul Kashem 0.25% 1,000,000 10,000,000
Naba knit Composite Limited 0.25% 1,000,000 10,000,000
Jainul Abedin Jamal 0.25% 1,000,000 10,000,000
Kamal Uddin 0.25% 1,000,000 10,000,000
N.Nasir Uddin 0.25% 1,000,000 10,000,000
Majbura Begum 0.25% 1,000,000 10,000,000
Asma Begum 0.25% 1,000,000 10,000,000
Afroza Sultana 0.25% 1,000,000 10,000,000
Shajjad Mustafa 0.25% 1,000,000 10,000,000
Azad Mustafa 0.25% 1,000,000 10,000,000
Farhana Irin 0.25% 1,000,000 10,000,000
Tanveer Nawaz 0.25% 1,000,000 10,000,000
Sk. Md. Samiul Islam 0.25% 1,000,000 10,000,000
Mohammad Jahangir 0.25% 1,000,000 10,000,000
Mollah Mahmood Malek 0.50% 2,000,000 20,000,000
Mollah Mazharul Malek 0.25% 1,000,000 10,000,000
Norrish Poultry and Hatchery ltd. 1.00% 4,000,000 40,000,000
Galco Steel Bangladesh ltd. 0.50% 2,000,000 20,000,000
Mohammed Oheidul Alam 0.25% 1,000,000 10,000,000
Sahana Ferdous 0.25% 1,000,000 10,000,000
Islamic Commercial Insurance Co. Ltd. 1.25% 5,000,000 50,000,000
162
 Amount (In Taka) Amount (In Taka)
2017 2016
Name of the Share Holder % of Share holdings No. of Shares Amount (In Taka)
Faisal Ahmed 0.50% 2,000,000 20,000,000
Mohammed Oliur Rahman 0.75% 3,000,000 30,000,000
Md.Nurul Hoque 0.25% 1,000,000 10,000,000
Kh Sakib Ahmed 0.50% 2,000,000 20,000,000
Mrs. Shamsun Nahar Begum 0.25% 1,000,000 10,000,000
Md. Rafiqul Islam 0.25% 1,000,000 10,000,000
P & I International Limited 1.00% 4,000,000 40,000,000
Mohammad Fazlur Rahman 0.25% 1,000,000 10,000,000
Anower Hossain 0.25% 1,000,000 10,000,000
Akram Hussain 0.25% 1,000,000 10,000,000
Miss Ruksana Mumtaz Hussain 0.25% 1,000,000 10,000,000
Akhter HUssain 0.25% 1,000,000 10,000,000
Akbar Hossain 0.25% 1,000,000 10,000,000
TOTAL 100.00% 400,000,000 4,000,000,000
12.00 Borrowing from Bank:
Borrowing from Al-Arafah Islami Bank Limited Motijheel 2,000,000,000 1,100,000,000
Borrowing from AIBL Capital Management Limited 1,358,923,901 1,309,400,000
Borrowing from ICB Pronodona scheme - 8,692,979
Borrowing from Union Bank ltd. 800,000,000 -
Borrowing from SIBL 431,500,000 500,000,000
Borrowing from HaJJ Finance 100,000,000 -
4,690,423,901 2,918,092,979
13.00 Accounts Payable :
Al - Arafah Islami Bank Limited - 1,163,815,014
Profit Payable for CML 82651065 1,417,252,685
Profit Payable for SIBL 4,857,790 -
Profit Payable for AIBL Motijheel Br. 37,296,123 -
Profit Payable for UNION Bank 20,400,000 -
Profit Payable for HAJJ Finance 1,741,667 -
VAT, Salary Tax & AIT Payable 703,369 151,362
Payable toCSE 524,397 53,027,116
Payable to clients 191,120,383 348,758,520
Bonus & Incentive& Accrued exp 141,310 91,310
Employees gratuity fund 15,999,025 -
Audit Fees 50,000 50,000
Dividend payable 7,520,000 724,640,000
Dividend adjustment clients 26,387 5,335,017
Security Money 278,525 101,814
IPO Application Process Account 10,000 17,802,126
363,320,041 3,731,024,964
14.00 Provision for Investment:
Openig Balance 343,709,835 309,824,500
Add : Provision for Investment 84,300,000 33,885,335
Closing Balance 428,009,835 343,709,835
15.00 Provision for taxation :
Openig Balance 1,957,242,685 1,555,065,391
Add: Income tax provision during the year 70,584,620 402,177,294
Closing Balance 2,027,827,305 1,957,242,685
16.00 Investment Income :
Margin Profit income 467,095,625 1,205,000,432
Profit on MSND 13,140,637 15,161,275
480,236,262 1,220,161,707
163
 Amount (In Taka) Amount (In Taka)
2017 2016
17.00 Profit paid on Borrowing :
Borrowing from Al-Arafah Islami Bank limited - 64,979,167
ICB Pronodona 143,676 2,078,121
SIBL 51,202,229 14,086,111
Borrowing from AIBLCML 319,477,803 130,703,111
Union Bank ltd 20,400,000 -
AIBL Motijheel Branch 121,601,111 20,066,667
HaJJ Finance 1,741,667 -
514,566,486 231,913,177
18.00 Brokerage commission
DSE 374,014,895 251,077,835
CSE 8,467,000 14,229,715
382,481,895 265,307,550
19.00 Documentation & Maintenance Fess :
BO Documentation fees 4,982,000 400,500
BO Maintenance fees - 4,392,500
Margin documentation fees 126,000 95,000
5,108,000 4,888,000
20.00 Other Operating Income:
CDBL Income 1,085,365 1,150,936
Cheque dishonour Charge 153,000 136,885
Dividend income 12,834,697 13,509,489
IPO Process Income 145,370 67,970
BO Close charge - 500
Realized Capital gain 30,881,300 6,599,402
Others 180,099 15,024
45,279,831 21,480,206
21.00 Hawla, Laga & CDBL Charges :
Hawla charge 40,758 64,786
Laga charge 24,897,280 17,521,754
CDBL Charges 17,488,511 14,243,645
42,426,549 31,830,185
22.00 Salary allowances& Contribution to P.F:
Salary allowances& Contribution to P.F 57,479,002 42,071,748
Wages 1,968,399 2,331,429
Security Services 501,636 371,877
59,949,037 44,775,054
23.00 Rents, Taxes, Insurance, Lighting etc.:
Rent 8,766,121 8,568,445
Insurance 387,333 45,860
Lighting& electricity bill 2,376,981 2,446,319
11,530,435 11,060,624
24.00 Honorarium & Meeting Expense:
Meeting & Honorariam 7,143,200 4,451,000
7,143,200 4,451,000
25.00 Postage, Telegram, Telephone & Stamps etc:
Postage, Telegram, Telephone & Mobole 650,410 497,733
Stamps 41,671 13,075
Photocopy 6,263 -
698,344 510,808
26.00 Depreciation & Repairs to Properties:
Depreciation 5,428,310 5,334,864
Repair & Maintenance 1,765,664 1,272,203
164

7,193,974 6,607,067
 Amount (In Taka) Amount (In Taka)
2017 2016
27.00 Other Expenses:
Computer Charge 276,823 235,950
Bank Charge 286,478 75,538
Petroleum Oil, Lubricant & WASA/ Gas. 803,476 701,127
Entertainment 2,305,262 1,786,195
Bonus & Incentive 10,926,405 8,381,459
Emplyees Gratuity fund 15,999,025 -
Leave encashment 2,079,050 2,891,365
Travelling, Local conveyance & Saturday Allowance 584,136 182,002
Internet & Online Charge 2,242,931 2,237,510
Registration Expenses 659,500 631,688
Training Expenses 249,075 4,500
crocarige 12,350 -
Audit Fees 100,000 150,000
Utilities bill 225,700 204,337
Vat 43,889 15,000
Other Expenses Note-27.01 1,825,724 1,228,419
38,619,824 18,725,090
27.01 Break up of Other Expenses:
Subscription Renewal 858,807 727,511
Newspaper 54,570 49,782
Mandatory Leave 221,825 48,300
IPO Perticipation Fees 3,000 -
Upkeep, wasing & cleaning 98,500 41,871
Miscellanous 40,877 33,353
Investors Protection 108,151 80,602
AR License - 2,000
Closing Allowances 55,000 15,000
EID Garcia 39,994 -
Bank Guarantee 345,000 230,000
1,825,724 1,228,419
28.00 Provision for Current Tax:
Operating Income Before tax 229,229,000 1,160,061,621
Total Business Income 229,229,000 1,160,061,621
Less: Capital Gain 30,881,300 6,599,402
Less: Dividend Income 12,834,697 13,509,489
Taxable Income 185,513,003 1,139,952,730
Income Tax @ 35 % on estimated Taxable Income 64,929,551 398,983,456
Add: TDS Dividend @ 20% 2,566,939 2,533,898
Add: Capital Gain @10% 3,088,130 659,940
70,584,620 402,177,294
165
 AIBL Capital Market Services Ltd.
Fixed Assets Schedule As at December 31, 2017
Annexure-A

Cost Depreciation Written Down

Particular Value as on
Balance as Addition Balance as on Rate % Balance as Balance as on
Dispopsal/ Charge during December 31,
on Jan 01, during the December 31, on January 1, Adjustment December 31, 2017
Adjustment the Year
2017 Year 2016 2017 2017

Tangible Asset

Interior Decoration 11,576,554 3,358,468 - 14,935,022 10% 5,389,772 1,157,655.0 - 6,547,427 8,387,595

Computer Accessories 1,203,374 - - 1,203,374 20% 1,203,374 - - 1,203,374 -

Online Hardware 2,901,234 45,650 - 2,946,884 20% 2,901,234 - - 2,901,234 45,650

Motor Car 18,062,939 - - 18,062,939 20% 6,133,848 3,612,588.0 - 9,746,436 8,316,503

Furniture & Fixture - Steel 309,332 7,500 - 316,832 10% 108,653 30,933.0 - 139,586 177,246

Office Equipment 9,874,276 48,900 - 9,923,176 20% 9,874,276 - - 9,874,276 48,900

Computer 4,101,595 318,500 - 4,420,095 20% 4,101,595 - - 4,101,595 318,500

Furniture & Fixture - Wood 3,005,154 - - 3,005,154 10% 1,579,742 300,515.0 - 1,880,257 1,124,897

51,034,458 3,779,018 - 54,813,476 31,292,494 5,101,691.0 - 36,394,185 18,419,291

Intangible Assets -

Online Software 1,633,093 - - 1,633,093 20% 1,012,525 326,619.0 - 1,339,144 293,949

1,633,093 - - 1,633,093 1,012,525 326,619.0 1,339,144 293,949

Total 52,667,551 3,779,018 - 56,446,569 32,305,019 5,428,310 - 37,733,329 18,713,240

166
167
 AUDITOR’S REPORT

We have audited the accompanying Financial Statements of AIBL Capital Management Ltd. which comprise the Statement of
Financial Position as at 31st December, 2017 and the Statement of Profit or Loss and Other Comprehensive Income, Statement
of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of significant accounting policies
and other explanatory information.
Managements’ Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
Bangladesh Financial Reporting Standards (BFRS), the Company Act, 1994 and other applicable laws and regulations, and for
such internal control as management determines is necessary to enable the preparation of Financial Statements that are free
from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted
our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors’ judgment including the assessment of the risk of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as, evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion:
In our opinion, the financial statements present fairly, in all material respects, the financial position of AIBL Capital
Management Ltd. as at 31st December, 2017 and of its financial performance and its cash flows for the year then ended
in accordance with Bangladesh Financial Reporting Standards (BFRSs) and comply with the Company Act , 1994 and other
applicable rules and regulations.
We also report that:
1. 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;
2. in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from
our examination of those books;
3. the statement of financial position and statement of profit or loss and other comprehensive income dealt with by the
report are in agreement with the books of account and returns; and
4. the expenditure incurred during the year were for the purposes of the company’s business.

Khan Wahab Shafique Rahman & Co.

Dhaka: February 08, 2018 Chartered Accountants
168
 Statement of Financial Position As at December 31 , 2017
Particulars Notes Amount In Taka Amount In Taka
2017 2016
ASSETS
Non - Current Assets
Property, Plant & Equipment 4.00 763,998 535,729

Current Assets
Cash and Bank Balance 5.00 10,374,878 29,421,771
Account Recivable 6.00 90,403,208 417,297,690
Investment 7.00 1,389,701,441 1,919,773,140
Advance Income Tax 8.00 12,086,806 10,998,405
Balance with AIBL CMSL 617,368,944 42,613,802
Total Assets 2,120,699,275 2,420,640,537

EQUITY AND LIABILITIES
Capital and Reserve
Paid Up Capital 9.02 500,000,000 500,000,000
Retained Earning 10.00 (27,901,592) (33,948,191)
Total Equity 472,098,408 466,051,809

Current Liabilities
Borrowing from Bank (AIBL) 1,533,122,500 1,394,932,437
Accounts Payable 11.00 53,798,535 502,991,470
Provision for Taxation 19.00 19,656,412 14,641,401
Provision for Investment 42,023,421 42,023,421
Total Liabilities 1,648,600,868 1,954,588,729
Total Equity and Liabilities 2,120,699,275 2,420,640,537

NAV 9.44 9.32

The annexed notes form an integral part of these financial statements

Director Director CEO

Signed to our seperate report of even date.

Place : Dhaka KHAN WAHAB SHAFIQUE RAHMAN & CO.
Date: February 08, 2018 Chartered Accountants
169
 Statement of Profit or Loss and Others Comprehensive Income
For the year ended 31 December, 2017
Particulars Notes Amount In Taka Amount In Taka
2017 2016
Investment Income 12.00 320,713,282 132,001,970
Profit paid on Borrowings 13.00 (329,918,790) (131,182,607)
Net Investment Income (9,205,508) 819,364

Operating Income 14.00 33,655,730 26,841,126
33,655,730 26,841,126
Total operating Income (A) 24,450,222 27,660,489

Salary allowances & Contribution to P.F 15.00 10,168,047 11,370,525

Board Meetting Expense 244,800 133,300
Rents, Taxes, Insurance, Lighting etc. 1,089,878 694,077
Postage, Telegram, Telephone & Stamps etc 16.00 62,400 79,500
Audit fees 25,000 25,000
Stationery, Printing, Advertisement etc. 17.00 200,557 203,518
Depreciation, Amortization & Repairs to Properties 4.00 182,464 182,464
Other Expenses 18.00 1,415,467 787,452
Total operating expenses (B) 13,388,613 13,475,836
Profit/(loss) before provision and Tax C = (A - B) 11,061,610 14,184,654
Provision for Taxation 19.00 5,015,011 4,989,327
Provision for Investment - 5,620,200
Net Profit after Tax & Provision 6,046,599 3,575,127
(33,948,191) (37,523,318)
Retained earning Carried forward (27,901,592) (33,948,191)
Earning per Share (EPS) (Tk. 10 per share) 0.1209 0.0715

The annexed notes form an integral part of these financial statements

Director Director CEO

Signed to our seperate report of even date.

Place : Dhaka KHAN WAHAB SHAFIQUE RAHMAN & CO.
Date: February 08, 2018 Chartered Accountants
170
 Statement of Changes in Equity For the year ended 31 December, 2017

Particulars Share Capital Retained Earning Total

Balance as at 01 January, 2017 500,000,000 (33,948,191) 466,051,809
Net Profit for the year - 6,046,599 6,046,599
Balance as at 31 December , 2017 500,000,000 (27,901,592) 472,098,408

For the year ended 31 December, 2016

Particulars Share Capital Retained Earning Total

Balance as at 01 January, 2016 500,000,000 (37,523,318) 462,476,682
Net Profit for the year - 3,575,127 3,575,127
Balance as at 31 December , 2016 500,000,000 (33,948,191) 466,051,809

Director Director CEO

171
 Statement of Cash flows For the year ended 31 December,2017
Particulars Amount In Taka Amount In Taka
2017 2016

Cash flows from operating activities

Investment income receipt in Cash 320,713,282 132,001,970
Profit paid on deposits and borrowing (329,918,790) (131,182,607)
Cash payments to employees (10,168,047) (11,370,525)
Received from other operating activities (item-wise) 33,655,730 26,841,126
Paid for other operating activities (item-wise) (3,038,102) (1,922,847)
Advance income tax paid (1,088,401) (4,724,097)
Operating profit before changes in operating assets and liabilities 10,155,673 9,643,020

Changing in Operating assets & liabilities
Increase/Decrease Investment 530,071,699 75,198,373
Increase/Decrease of Accounts receivable 326,894,481 (132,020,983)
Increase/Decrease of Borrowing 138,190,063 (53,753,475)
Increase/Decrease of Accounts payable (449,192,935) 131,217,226
Increase/Decrease of other assets (item-wise) (574,755,142) (31,719,615)
Cash receipt from operating activities (28,791,834) (11,078,474)

A. Net Cash from operating activities (18,636,161) (1,435,454)

Cash flows from investing activities:

Purchase of property, plant and equipment (410,733) (250,565)
B. Net cash flows from investing activities (410,733) (250,565)
Cash flows from financing activities

Increase in Share Capital - -

C. Net cash flows from financing activities - -
D. Net increase in cash and cash equivalent (A+B+C) (19,046,894) (1,686,019)
E. Effects of exchange rate changes on cash and cash-equivalents - -
F. Net increase in cash and cash equivalent (D+E) (19,046,894) (1,686,019)
G. Cash & Cash Equivalents at the beginning of the year 29,421,771 31,107,790
H. Cash & Cash Equivalents at the end of the year 10,374,878 29,421,771
Net Operating Cash Flow per Share (0.373) (0.029)

Director Director CEO

172
 AIBL Capital Management Limited
Notes to the financial statements
As at and for the year ended 31 December, 2017

1.00 Significant Accounting Policies and other materials information

1.01 Legal Form of the Enterprise:
The Company has been incorporated under the Companies Act (Act XVIII) of 1994 as a private limited company namely
AIBL Capital Management Limited on 25th October2011. The Company was issued Certificate of Commencement of
Business on 25th October, 2011. The Company is a subsidiary company of Al- Arafah Islami Bank Limited.
1.02 Address of Registered Office and Principal Place of Business:
The principal place of business is the Registered Office at Peoples Insurance Bhaban (4th floor) 36 Dilkusha C/A,
Dhaka-1000.
1.03 Nature of Business Activities:
AIBL Capital Management Ltd. is a full-fledged merchant bank licensed by Bangladesh Securities & Exchange
Commission (BSEC). The main objective of the company is to carry out the activities of a full-fledged merchant
banker such as Issue Management, Portfolio Management, Underwriting and Corporate Advisory services etc. as per
Securities Exchange Commission (Merchant Banker and Portfolio Manager) Regulation, 1996.
2.0   Basis for preparation of financial statements:
2.01 Statement of Compliance:
The financial statements of AIBL Capital Management Limited have been prepared in accordance with the DFIM
Circular no 11 dated 23rd December 2009 and requirement of the Companies Act, 1994, the Security Exchange Rules
1987, Guidelines from BB, Bangladesh Accounting Standards (BAS), and Bangladesh Financial Reporting Standards
(BFRS) and other applicable laws and regulations of Bangladesh Securities & Exchange Commission.
2.02 Measurement bases used in preparing the Financial Statements :
The elements of financial statements have been measured on “Historical Cost” basis, which is one of the most
commonly adopted base provided in “the framework for the preparation and presentation of financial statements”
issued by the International Accounting Standard Board (IASB).
2.03 Going Concern:
Financial statements have been prepared on going concern basis as there was no significant doubt or uncertainty to
continue the operation of the company in the foreseeable future.
2.04 Fixed assets and depreciation:
Fixed Assets are stated at cost less accumulated depreciation. Depreciation is charged on the cost of fixed assets in
order to write off such amounts over the estimated useful lives, using the straight-line method in accordance with
BAS-16. Depreciation for full month is charged on additions irrespective of date when the related assets are put into
use and no depreciations is charged for the month of disposal. The rates of depreciation used to write off the amount
of assets are as follows:
Office Equipment 20%
Computer 20%
Online Software 20%
2.05 Components of financial statements:
According to International Accounting Standard (IAS) - 1, Para-10, as adopted by ICAB as BAS -1 “presentation of
financial statements” the complete set of Financial Statements includes the following components:
i) Statement of Financial Position as at 31st December, 2017
ii) Statement of Profit or Loss and Other Comprehensive Income for the year ended 31st December, 2017
iii) Statement of Changes in Equity for the year ended 31st December, 2017
173
iv) Statement of Cash Flows for the year ended 31st December, 2017
v) Notes, comprising a summary of significant accounting policies and other explanatory information
3.00 Principal Accounting Policies:
3.01 Cash flow Statement:
Statement of Cash Flows is prepared in accordance with BAS -7 “Statement of Cash Flows “. The cash flow from the
operating activities have been presented under Direct Method as prescribed by the Securities and Exchange Rules
1987 and considering the provisions of Paragraph 18(b) of BAS-7 which provides that “Enterprises are encouraged to
report Cash Flow from Operating Activities using the Direct Method”.
3.02 Revenue Recognition:
Income is recognized on accrual basis, such income is calculated considering daily margin loan balance of the
respective parties. Income is recognized on quarterly basis.
3.03 Event after balance sheet dated: BAS 10:
Events after the reporting period, dividend declared after the reporting period should not be classified as a liability at
the reporting period as the proposed dividend does not represent an Obligation under BAS 37: Provision, Contingent
Liabilities and Contingent Assets.
3.04 Cash & Cash Equivalent :
Cash and cash equivalents includes cash in hand, cash at bank and fixed deposits which are held and are available for
use by the company without any restriction. There is insignificant risk of change in the value of the above items.
3.05 Provision on expenses:
Provision for expenses is recognized when the company has a present obligation as a result of a Past event and it
is probable that an outflow of resources embodying economic benefit will be required to settle the obligations and
reliable estimate of the amount can be measured.
3.06 General:
a) The financial statements are presented in Bangladeshi Taka (BDT) Currency, which is the company’s functional
currency.
b) Figures in these notes and annexed financial statements have been rounded off to the nearest Taka.
c) Figures relating to previous year have been rearranged wherever considered necessary to conform with current
year’s presentation.

174
 Amount In Taka Amount In Taka
2017 2016
4.00 Property,Plant & Equipment
Opening balance 912,318 661,753
Add: Additions 410,734 250,565
Closing balance (A) 1,323,052 912,318
Depreciation :
Opening balance 376,590 194,126
Add: Charge for the year 182,464 182,464
Closing balance (B) 559,054 376,590
Written down value (A-B) 763,998 535,729
Details have been shown in Schedule-A
5.00 Cash at Bank
AIBL Capital Management Ltd. (corporate A/C) 4,530,511 1,946,542
AIBL Capital Management Ltd. Customers Portfolio A/C 5,844,367 27,475,229
10,374,878 29,421,771
6.00 Accounts Recivable
Profit on Bi-Muazzel with AIBL CMSL 82,651,065 408,594,913
Recivable from Panel Broker 224,994 9,954
Dividend Receivable 7,527,149 8,692,823
90,403,208 417,297,690
7.00 Investment
Margin Investment 2,414,667 5,527,306
Investment in Shares & Securities 17,829,822 569,857,834
Investment in Placement Share 9,988,000 14,988,000
Investment in AIBL CMSL - 20,000,000
IPO FPM Bidding and Subscription 545,050 -
Investment in AIBL CMSL (Bi-Muazzel) 1,358,923,901 1,309,400,000
1,389,701,441 1,919,773,140
8.00 Advance Tax
Advance Tax 2012 2,410,027 1,156,941
Tax Paid 2013 through challan 4,843,893 4,045,367
Tax Paid 2015-2016 through challan 429,416 429,416
Tax Paid 2017-2018 through challan 331,663 -
Tax on Dividend Income 3,056,003 5,360,921
Tax on Underwriting com. Income - -
Tax deducted for Exp. 1,015,804 5,760
12,086,806 10,998,405
9.00 Share Capital
9.01 Authorised Capital
The authorised Capital of the Company is 20,00,00,000 Ordinary Share of TK. 10 each. 2,000,000,000 2,000,000,000
9.02 Issued, Subscribed and fully Paid-up Capital
Issued, Subscribed and fully Paid-up Capital is 5,00,00,000 share of TK. 10 each. 500,000,000 500,000,000
500,000,000 500,000,000
Name of the Share Holder
Al-Arafah Islami Bank Limited 98.00% 490,000,000 490,000,000
AIBL Capital Market sevices Limited 2.00% 10,000,000 10,000,000
TOTAL 100.00% 500,000,000 500,000,000
175
 Amount In Taka Amount In Taka
2017 2016

10.00 Retained Earnings

Opening balance (33,948,191) (37,523,318)
Add: Net profit for the year 6,046,599 3,575,127
Closing balance (27,901,592) (33,948,191)
11.00 Accounts Payable
Vat Payable - 6,000
Payble to Panel Broker - 15,000
Profit on Borrowings 53,092,052 502,646,951
Paid to Central Depository Bangladesh Ltd. CDS bill for the month of November-2017. 3,228.00 -
Paid to Mr. Md. Shakil for IPO MEBPOY Prospectus Preparation Chittagong tour. 10,376.00 -
Paid to Mr. Md. Rukonul Islam for IPO MEBPOY Prospectus Preparation Chittagong tour. 10,376.00 -
Debited to Peoples Insurance Co. Ltd. for Utility Bill, Month of November-2017. 44,671.00 -
Debited to Peoples Insurance Co. Ltd. for Office Rent, Month of December-2017. 171,000.00 -
Arthosuchak for Online newspaper Arthosuchak advertisement month of Nov 2017. 8,100.00 -
Paid to RNF Enterprise for visiting card printing 692.00 -
Paid to Shama printing & packaging for visiting card printing (560*3%) 472.00 -
Debited for Mobile Bill Allowances for the month of Dec-2017 5,200.00 -
Debited for Yearly Closing Allowances 5,000.00 -
Paid to Sterling Interiors for Civil, Interior Decoration and Electric Line Establish 367,054.00 -
Vat Paid for Civil, Interior Decoration and Electric Line Establish 56,761.00 -
Ait Paid for Civil, Interior Decoration and Electric Line Establish 11,353.00 -
Paid to Md Abu Taher for Excess amount of 34th Board Meeting Expenditure. 700.00 -
Paid to Md. Abu Taher for Excess amount of 35th Board Meeting Expenditure. 2,700.00 -
Paid to Md Abu Taher for Excess amount of 36th Board Meeting Expenditure. 800.00 -
Paid to Md. Abu Taher for Excess amount of 37th Board Meeting Expenditure. 800.00 -
Vat Paid for 37th Board Meeting Expenses. 7,200.00 -
Paid to CDBL for CDS bill November,2016 - 25,468.00
Debited for Donation of Mr. Zubraz Khan Death. - 18,496.00
Debited to Al-Arafah Islami Bank Ltd. for Leave Encasement 2016. - 270,355.00
Debited for Closing Allowances 2016. - 4,000.00
Debited for Mobile Allowanes for the month of Dec-2016. 5,200.00
53,798,535 502,991,470
12.00 Investment Income
Profit from Cash at Bank 402,318 107,064
Less: Tax Deducted at source (40,232) (10,706)
Margin Profit Income 618,784 807,432
Service Charge Income 254,609 395,069
Profit Bai-Muazzel with AIBL CMSL 319,477,803 130,703,111
320,713,282 132,001,970
13.00 Profit paid on Bai-Muazzel with AIBL 329,918,790 131,182,607
329,918,790 131,182,607
14.00 Operating Income
Capital Gain 16,505,032 3,528,769
Dividend Income 16,822,542 23,182,250
IPO income 235 645
Income from dishonour cheque charge - 3,000.00
176
 Amount In Taka Amount In Taka
2017 2016

Issue Manager Commission - -

Underwriting Commission 314,063 78,750
BO Documentation 2,500 4,585
CDBL for yearly Rebet & Charge Income 6,115 38,143
BO Maintanance, Renewal Fee 5,243 4,983
33,655,730 26,841,126
15.00 Salary Allowances & Contribution to P.F. & B.F.
Salary and Allowance 8,250,638 9,213,663
Leave Encashment 239,015 544,615
Incentive & Festval Bonus 1,678,394 1,477,247
10,168,047 11,235,525
16.00 Postage, Telegram, Telephone, Mobile & Stamps etc.
Mobile Bill 62,400 79,500
62,400 79,500
17.00 Stationary, Printing, Advertisement etc.
Advertisement Exp. 97,320 98,430
Printing & Stationary 103,237 105,088
200,557 203,518
18.00 Other Expenses
BMBA Membership & Annual fees Fees 100,000 100,000
Registration fees of DSE Book Bidding Process 10,000 25,000
Subscription, Renewal Fees 100,000 50,000
BSEC BINIYOG SHIKSHA TAHOBIL Donation. 50,000
Entertainment 50,000 20,000
Saturday Allowance 9,000 4,000
Training Exp. - 13,500
Travelling Allowance 41,552 10,516
Ttrade licence renewal Fees 18,726 36,095
Bank Charges & Fees 25,102 1,528
Car Registration and 1st year Car Insurance. 137,703 -
Petty Cash Exp. 78,477 106,170
Vat Exp. 228,260 22,200
Wages 199,125 135,000
Internet and CDBL wan connectivity charges 189,200 223,200
CDBL Charge 64,322 95,469
Law Charge - 75,774
IPO Bidding fee. 6,000
Company secretariat Honorarium 100,000 -
Closing Allowance 8,000 4,000
1,415,467 922,452
19.00 Provision for Tax
Opening Balance 14,641,401 9,652,074
Add: Income tax povision during the year 5,015,011 4,989,327
Closing Balance 19,656,412 14,641,401
177
 Amount In Taka Amount In Taka
2017 2016

19.01 Provision for Current Tax :

Operationg income 9,127,365 14,184,654
Less: Gain on Sale of Securities 16,505,032 3,528,769
Less: Divident Income 16,822,542 23,182,250
Total Business Income (24,200,209) (12,526,365)
Income Tax of @ 37.50% on estimated Business Income - -
Add: Gain on Sale of Securities (10%) 1,650,503 352,877
Add: Divident Income (20%) 3,364,508 4,636,450
5,015,011 4,989,327
20.00 Provision for Investment
Opening Balance 42,023,421 36,403,221
Add: Povision during the year - 5,620,200
Closing Balance 42,023,421 42,023,421

There is not necessary to keep provision for investment during the year 2017, for the shortfall amount of Tk.
8,921,140.00 because it is lower then the previous year kept provision of Tk. 42,023,421.00

178
179

AIBL Capital Management Limited

Schedule of Property, Plant & Equipment as at 31 December, 2017
Schedule-A

Cost Depreciation Written Down

Particulars Value as at
Opening Addition Disposal Balance as at Rate Opening Charged for Written Down 31.12.2016
Adjustment Balance as at
Balance during the during the 31 .12.2017 Balance the year 31.12.2017 Value as at
during the year
01.01.2017 year year 01.01.2017 31.12.2017

Office Equipment 142,495 367,054 - 509,549 20% 62,161 28,499 - 90,660 418,889 80,335

Computer 302,048 43,680 - 345,728 20% 146,624 60,410 - 207,034 138,694 155,424

MB Operationg Software 467,775 - 467,775 20% 167,805 93,555 261,360 206,415 299,970

Total 912,318 410,734 - 1,323,052 376,590 182,464 - 559,054 763,998 535,729

 Investment in Shares & Securities
Stock at hand as on 31 December , 2017
Annexure- B

SL . No. Name of Company No. of Shares Amount (at cost) Market Rate Market Amount
1 ABB1STMF 74 514.97 6.60 488.40
2 OIMEX 14,257 129,610.00 65.20 929,556.40
3 BBSCABLES 3,318 28,860.00 105.70 350,712.60
4 YPL 525,000 4,616,506.30 21.00 11,025,000.00
5 NAHEEACP 6,847 62,246.45 73.40 502,569.80
6 ICBAMCLC1U 1,303,050 12,992,084.50 10.70 13,942,635.00
17,829,822.22 26,750,962.20

180
181
 REPORT OF THE AUDITORS’
We have audited the accompanying financial statements of MILLENNIUM INFORMATION SOLUTION LIMITED, which comprise
the Statement of Financial Position as at December 31, 2017 and the Statement of Comprehensive Income, Statement of
Changes in Equity and Statement of Cash Flows for the year then ended and a summary of significant accounting policies and
other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial
statements of the Company in accordance with the International Financial Reporting Standards (IFRS), the Companies Act,
1994 and other applicable laws and regulations and for such internal control as management determines as necessary to
enable the preparation of financial statement that are free from material misstatement, whether due to fraud or error.
Arditors’Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our
audit in accordance with International Standards on Auditing (ISA). Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion:
In our opinion, the financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), give
a true and fair view of the state of the Company’s affairs as at December 31, 2017 and of the results of its operations and
its cash flows for the year then ended and comply with the Companies Act 1994 and other applicable laws and regulations.
We also report that:
a) 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;
b) in our opinion, proper books of accounts as required by law have been kept by the company so far as it appeared from
our examination of those books;
c) the Statement of Financial Position and the Statement of Comprehensive Income dealt with the report are in agreement
with the books of accounts.

Ahsan Zamir FCA

Partner
Dated: Dhaka Ahsan Zamir & Co.
February 26, 2018 Chartered Accountants
182
 Statement of Financial Position As at December 31, 2017
Particulars Notes & Amount in Taka Amount in Taka
Schedule 2017 2016
ASSETS:
A. Non Current Assets (i+ii) 151,072,006 145,263,200
i. Property, plant & Equipment 21,234,995 22,404,389
Assets at cost less Accumulated depreciation SCH-A 4.00 21,234,995 22,404,389

ii. Intangible assets 129,837,011 122,858,811
Deferred expenses 5.00 2,184,840 2,958,601
Software development 6.00 127,652,171 119,900,210

B. Current assets 175,894,819 155,072,127

Advance, Deposit & Pre-payments 7.00 2,608,924 3,224,893
Accounts receivable SCH-B 8.00 60,640,672 41,633,924
Investments 9.00 112,405,346 105,813,423
Cash & Cash equivalent 10.00 239,878 4,399,887
TOTAL ASSETS [A+B] 326,966,825 300,335,327

SHARE HOLDERS EQUITY & LIABILITIES

C. Authorized capital
20,000,000 Ordinary shares @ Tk. 10 each 200,000,000 200,000,000

D. Issued, subscribed & paid up capital
18,371,261 Ordinary shares @ Tk. 10 each 11.00 183,712,610 183,712,610

E. Reserve & surpluses 114,523,830 103,658,441
General Reserve - -
Share Premium 56,306,570 56,306,570
Retained Earnings 58,217,260 47,351,871

F. Current liabilities 28,730,385 12,964,276
Accounts Payable SCH-C 12.00 15,274,056 10,357,096
Advance against revenue 13.00 100,000 100,000
Loan/Quard from Bank 14.00 9,700,000 -
Provision for Income Tax 15.00 3,656,329 2,507,180

TOTAL SHAREHOLDERS EQUITY AND LIABILITIES [D+E+F] : 326,966,825 300,335,327

Number of Shares 18,371,261 18,371,261
Net Assets Value per share 16.23 15.64

The accompanying notes form an integral part of this Financial Statements.

Director Director Managing Director

This is the Statement of Financial Position referred to in our separate report of even date

Place : Dhaka Ahsan Zamir FCA

Date : February 26, 2018 Partner
Ahsan Zamir & Co.
183

Chartered Accountants
 Statement of Comprehensive Income For the year ended December 31, 2017
Particulars Notes & Amount in Taka Amount in Taka
Schedule 2017 2016

Revenue 16.00 73,395,745 61,548,489

Less : Production expenses 17.00 42,465,305 33,175,920
Gross Profit 30,930,440 28,372,570

Less : Operating expenses 24,541,964 23,256,661
Direct, administration and general expenses 18.00 16,890,588 14,359,279
Sales and market development expenses 19.00 7,651,376 8,897,382

Operating Profit 6,388,476 5,115,909
Add: Non-Operational Income 20.00 6,063,451 12,170,964
Net Income before Financial Expenses 12,451,926 17,286,872
Less : Financial expenses 21.00 37,388 65,007
Net Income before Tax 12,414,538 17,221,865
Less: Income Tax 15.01 1,549,149 2,507,180
Net Income after Tax 10,865,389 14,714,685

Number of Shares 18,371,261 18,371,261
Earning Per Share (EPS) 0.59 0.80


The accompanying notes form an integral part of this Financial Statements.

Director Director Managing Director

This is the Statement of Financial Position referred to in our separate report of even date

Place : Dhaka Ahsan Zamir FCA

Date : February 26, 2018 Partner
Ahsan Zamir & Co.
Chartered Accountants

184
 Statement of Changes in Equity For the period ended December 31, 2017
“Retained “Share “General
Particulars Share capital Earnings” Premium” Reserve” Total equity
Taka Taka Taka Taka Taka
Balance at January 01, 2016 183,712,610 33,298,562 56,306,570 - 273,317,742
Changes in accounting policy - - - - -
Prior year Adjustment - (661,376) - - (661,376)
Restated balance 183,712,610 32,637,186 56,306,570 - 272,656,366
Changes in equity for the year 2016:
Issue of shares - - - - -
Dividends - - - - -
Income for the period - 14,714,685 - - 14,714,685
General Reserve - - - - -
Revaluation gain - - - - -
Balance as at December 31, 2016 183,712,610 47,351,871 56,306,570 - 287,371,051
Changes in accounting policy - - - - -
Prior year Adjustment - - - - -
Restated balance at January 01, 2017 183,712,610 47,351,871 56,306,570 - 287,371,051
Changes in equity for the period ended December 31, 2017:
Issue of shares - - - - -
Dividends - - - - -
Income for the period - 10,865,389 - - 10,865,389
General Reserve - - - - -
Revaluation gain - - - - -
Balance as at December 31, 2017 183,712,610 58,217,260 56,306,570 - 298,236,440

The accompanying notes form an integral part of this Financial Statements.

Director Director Managing Director

This is the Statement of Financial Position referred to in our separate report of even date

Place : Dhaka Ahsan Zamir FCA

Date : February 26, 2018 Partner
Ahsan Zamir & Co.
Chartered Accountants
185
 Statement of Cash Flows For the period ended December 31, 2017
Particulars Amount in Taka Amount in Taka
2017 2016
A. Cash flows from operating activities
Net Income 10,865,389 14,714,685
Adjustments to reconcile Net Income to cash provided by operating activities:
Depreciation expense 2,691,295 2,648,634
Amortization expense 12,888,282 6,469,299
Loss or gain on disposal of fixed assets 4,939 16,174
Increase in Advance, Deposit & Pre-payments 615,969 (60,973)
Increase in Accounts Receivable (19,006,748) (10,367,469)
Increase in Accounts Payable 4,916,960 1,125,204
Increase in Advance against revenue - -
Prior period adjustment - (661,376)
Increase in Income Tax Payable 1,149,149 1,096,366
Net Cash provided by operating activities 14,125,235 14,980,544

B. Cash flow from investing activities:
Purchase of fixed assets (1,530,339) (16,535,349)
Sales of old assets 3,500 1,249,033
Investment in MTDR (1,260,913) 28,413,618
Investment in Share Market (5,331,010) (3,955,387)
Investment in Software development (19,741,982) (19,757,433)
Deferred expenses (124,500) (2,507,625)
Net Cash used by investing activities (27,985,244) (13,093,143)

C. Cash flow from financing activities
Loan from directors - -
Bank Loan 9,700,000 -
Dividend payable - -
Proceeds from Issue of equity shares - -
Cash provided by financing activities 9,700,000 -

D. Cash generated for the year (A + B + C) (4,160,009) 1,887,400

E. Cash and cash equivalent at the beginning of the year 4,399,887 2,512,487
F. Cash and cash equivalent at the end of the year (D+E) 239,878 4,399,887

The accompanying notes form an integral part of this Financial Statements.

Director Director Managing Director

This is the Statement of Financial Position referred to in our separate report of even date

Place : Dhaka Ahsan Zamir FCA

Date : February 26, 2018 Partner
Ahsan Zamir & Co.
Chartered Accountants
186
 Millennium Information Solution Limited
Accounting policies and notes to the Financial Statements
For the year ended December 31, 2016

1.00 Background of the company and nature of business:

Millennium Information Solution Ltd. was incorporated as a private limited company on February 11, 2001 under The
Companies Act 1994.
The main objective of the Company is to carry on activities relating to developing software products and providing
maintenance, support and cyber security services both to domestic and international dients. Over the years, MISL
has established itself as the leading software developer, implementation and service provisioning company in
Bangladesh which adheres to the rules of Islamic Shariah. On May 28, 2015 the company has become a subsidiary
company of Al-Arafah Islami Bank Ltd.
2.00 Accounting policies & estimates:
a. Basis of Accounting
The accounts of the Company is being maintained at accrual basis on historical cost convention following the
International Financial Reporting Standards (IFRS’s) as adopted by the Institute of Chartered Accountants of
Bangladesh.
b. Reporting period
As the Company is a subsidiary company of a financial institute named Al-Arafah Islami Bank Limited; therefore
income covers a financial period from January 01, 2017 to December 31, 2017 according to the section 2 (35) of
“Income Tax Ordinance 1984”.
c. Going Concern:
Financial Statements have been prepared on going concern basis as there was no significant doubt or uncertainty to
continue the operation of the Company in the foreseeable future.
3.00 Significant Accounting Policies:
The accounting policies set out below have been applied consistently to the periods presented in these financial
statements.
3.01 Property, Plant and Equipment and their depreciation:
Depreciation on the property, plant and equipment has been charged at full on their opening written down value.
The values of the property, plant and equipment have been shown at written down value and depreciation has been
charged at rates varying from 10-15%.
3.02 Valuation of software development:
This represents the cost allocated for Customized Software Ababil and Sylvia developing by the Company through
various Programmers engaged on regular employment basis and related expenditure as per IAS-38 Para 24.4.5
(Intangible Assets). During the reporting period the Company has incurred total Tk. 19,741,982.00 for software
development.
30.3 Amortization of non-current assets
During the year amortization has been made on software development @10% and deferred expense @25% &
33.33%.
3.O4 Income Tax:
The income of the Company is tax exempted up to June 30, 2024 as per sixth schedule Part-A, Para 33 of Income Tax
Ordinance 1984. Company’s Tax Identification Number (E-TIN) is 477932327703.
187
3.05 Reporting currency and recognition of foreign currency income:
AI the transactions are shown in Bangladesh Taka currency. The foreign currency transactions have been converted
into Taka at the time of recognition/transaction. Foreign currency gains/losses were recognized at the time of
receipt/payment of money.
3.06 Comparatives:
Where essential, prior period’s figures have been rearranged to ensure ready comparability with the current periods
presentation. All fraction amounts have been rounded off to the nearest Taka.
3.07 Financial Assets:
i. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank which are available for use by the Company without
any restriction.
ii. Accounts Receivable
Accounts Receivable represent the amounts due from customers for delivering products or rendering services.
Accounts Receivable are initially recognized at cost which is the fair value of the consideration given in return.
3.08 Financial Liabilities:
i. Accounts Payables
The Company recognizes a financial liability when its contractual obligations arising from past events are certain
and the settlement of which is expected to result in an outflow from the entity of resources embodying economic
benefits.
3.09 Revenue recognition
Revenue is recognized when service provided or invoice is raised against the service/product to the client in
accordance with the contractual agreement or work order.
3.10 Financial income and expense
Financial income comprises on MTDR’s and savings accounts profit. Income is recognized as it accrues, using the
effective method.
Financial expenses comprise bank commission and charges.
3.11 Statement of Cash flows
Statement of Cash flows have been prepared and presented under indirect method in accordance with the
requirements of IAS 7: Statement of Cash flows.
3.12 Events after reporting period
Material events after the reporting period have been considered; appropriate adjustments and disclosures have
been made in the financial statements.
i. Approval of the financial statements
Financial statements were approved by the 66th meeting of the Board of Directors held on March 01, 2018. Board
has also approved the audited financial statements for the year ended December 31, 2017.
ii. Dividend
Board has recommended 5% cash dividend for the year ended December 31, 2017 by the 66th meeting of the Board
of Directors subject to approval of the shareholders at 17th Annual General Meeting.
188
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount In Taka Amount In Taka
2017 2016
4.00 Property, Plant & Equipment
This is arrived at as under:
Balance as on January 01, 2017 28,610,404 14,508,553
Add: Addition during the year 1,530,339 16,535,349
30,140,743 31,043,902
Less: Adjustment during the year 25,730 2,433,498
30,115,013 28,610,404
Less: Accumulated Depreciation 8,880,018 6,206,015
Balance as on December 31, 2017 21,234,995 22,404,389
[Fixed Assets Details Shown in Schedule - A]
5.00 Deferred expenses
This balance consists of as follows :
Website Development and Renovation [Note: 5.01] 78,375 -
Marketing & Promoting Exp-Ababil [Note: 5.02] 1,948,457 2,721,601
ISO Certificate [Note: 5.03] 158,008 237,000
2,184,840 2,958,601
5.01 Website Development and Renovation
This balance consists of as follows :
Balance as on January 01, 2017 - -
Add : Addition during the year 104,500 -
104,500 -
Less : Amortization during the year @25% 26,125 -
Balance as on December 31, 2017 78,375 -
5.02 Marketing & Promoting Exp-Ababil
This balance consists of as follows :
Balance as on January 01, 2017 2,721,601 1,648,852
Add : Addition during the year 20,000 2,270,625
2,741,601 3,919,477
Less : Amortization during the year: 25% 793,144 1,197,876
Balance as on December 31, 2017 1,948,457 2,721,601
5.03 ISO Certificate
This balance consists of as follows :
Balance as on January 01, 2017 237,000 -
Add : Addition during the year - 237,000
237,000 237,000
Less : Amortization during the year 33.33% 78,992 -
Balance as on December 31, 2017 158,008 237,000
6.00 Software development
This balance consists of as follows :
Ababil (Online Islamic Banking) [Note: 6.01] 117,810,388 110,607,388
Mobile Banking Solution [Note: 6.02] 5,059,211 5,563,504
Sylvia HRM Solution [Note: 6.03] 4,782,572 3,729,318
127,652,171 119,900,210
189
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount In Taka Amount In Taka
2017 2016

6.01 Ababil-Online Islamic CBS with other Modules RBIAS

This balance consists of as follows :
Balance as on January 01, 2017 110,607,388 97,221,088
*Add : Addition during the year 18,315,796 18,247,355
128,923,184 115,468,443
Less: Amortization during the year @10 % on opening balance 11,060,739 4,861,055
Balance as on December 31, 2017 117,862,445 110,607,388
*Cost incurred for Development:
Registration & other exp. of Mobile Application 52,057 -
ABABIL Layout & Theme 8,145 -
Salaries and Allowances for Ababil Development 18,255,594 18,247,355
18,315,796 18,247,355
6.02 Ababil-Mobile Banking Solution
This balance consists of as follows :
Balance as on January 01, 2017 5,563,504 5,856,320
Add : Addition during the year - -
5,563,504 5,856,320
Less: Amortization during the year @ 10 % on opening balance 556,350 292,816
Balance as on December 31, 2017 5,007,154 5,563,504

6.03 Sylvia-HRM Solution
This balance consists of as follows :
Sylvia HRM Solution
Balance as on January 01, 2017 3,729,318 2,336,042
*Add : Addition during the year 1,426,186 1,510,078
5,155,504 3,846,120
Less: Amortization during the year @ 10 % on opening balance 372,932 116,802
Balance as on December 31, 2017 4,782,572 3,729,318

*Cost incurred for Development:
Add : Salary & Allowance for HRMS Sylvia Development 1,426,186 1,510,078
1,426,186 1,510,078
7.00 Advance, Deposit & Pre-payments
This balance consists of as follows :
Balance as on January 01, 2017 3,224,893 3,143,920
Add : Addition during the year 802,625 9,489,633
4,027,518 12,633,553
Less: Adjustment during the year 1,418,594 9,408,660
Balance as on December 31, 2017 2,608,924 3,224,893

Break-up of Advance, Deposit & Pre-payments

Advance Income Tax Paid at sources 75,107 61,231
Advance Income Tax Paid at Source-MTDR/FDR 821,782 470,576
Advance Income Tax Paid at Source-on AIBL SND AC#5406 8,774 7,283
Advance Income Tax paid for Car 220,000 110,000
190
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount In Taka Amount In Taka
2017 2016

Advance Income Tax paid for Share Dividend 345,673 219,622

Advance to High Tech Park for Office Rent 540,000 1,396,734
Advance to DCASTALIA - 80,000
Advance to BD Com Online LTD - 1,035
Security deposit to DGDP for enlistment - 50,000
Security deposit to DGDP against BAF works - 84,500
Security deposit to Spectrum Eng. (For CID) 5,000 5,000
Security Deposit for BG/PG/APG (From AIBL) 144,750 461,075
Deposit for International Roaming for CEO Mobile 20,000 20,000
Short Term Loan to BVC & ATCPIL 197,838 197,838
Loan Paid to Mr. Shahin 30,000 60,000
Loan paid to Abu Sayed 70,000 -
Loan paid to Kaysar Ahmed 40,000 -
Loan paid to Muhammad Gulam Rabbani Khan 40,000 -
Loan paid to Md. Mojidul Islam 50,000 -
2,608,924 3,224,893
8.00 Accounts receivable
This balance consists of as follows :
Balance as on January 01, 2017 41,633,924 31,266,455
Add: Addition during the year 61,206,331 52,257,114
102,840,255 83,523,569
Less: Adjustment during the year 42,199,582 41,889,645
Balance as on December 31, 2017 60,640,672 41,633,924
[Accounts receivable Details Shown in Schedule - B]
9.00 Investments :
This balance consists of as follows :
Investment in FDR/MTDR Tk. [Note: 9.01] 64,260,913 63,000,000
Investment in shares [Note: 9.02] 48,144,433 42,813,423
Balance as on December 31, 2017 112,405,346 105,813,423
9.01 Investment in FDR/MTDR
This balance consists of as follows :
Balance as on January 01, 2017 63,000,000 91,413,619
Add: Investment during the year - 63,000,000
Add: Net Profit (Gross Profit less Excise Duty) 3,494,063 4,668,259
66,494,063 159,081,878
Less: Income Tax deduct at source 351,206 470,576
Less: Encashment 1,881,944 95,611,302
Balance as on December 31, 2017 64,260,912.7 63,000,000
9.02 Investment in shares
This balance consists of as follows :
Balance as on January 01, 2017 42,813,423 38,858,036
Add: New share purchased during the year 44,096,419 35,647,773
Add: Capital Gain 1,894,080 6,331,764
88,803,922 80,837,573
Less: Sales during the year 40,659,489 38,024,150
Balance as on December 31, 2017 48,144,433 42,813,423
191
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount In Taka Amount In Taka
2017 2016
DESCO 17,899,661 7,165,650
BXPHARMA - 11,340,054
PREMIERCEM 24,729,001 18,381,457
AMANFEED - 5,926,263
TITASGAS 5,323,012 -
MITHUNKNIT 4,422 -
PDL 188,337 -
48,144,433 42,813,423
10.00 Cash & bank balance
This balance consists of as follows :
Cash in hand [Note: 10.01] 65,794 354,569
Cash at bank & other accounts [Note: 10.02] 174,084 4,045,318
239,878 4,399,887
10.01 Cash in hand
Local currency with petty cash A/C in BDT 60,548 349,323
Foreign Currency (Converted into BDT) 5,246 5,246
65,794 354,569
10.02 Cash at bank and other institute
Bank Name & Branch A/C No.
Al-Arafah Islami Bank Ltd, Motijheel Br. SND-0021220005406 78,876 477,291
Dutch Bangla Bank Ltd, Motijheel Foreign Ex Br. 105-110-18205 6,887 8,608
Social Islami Bank Ltd. Motijheel Foreign Ex Br. 018.133.11673 1,733 35,400
AIBL Capital Market Services Ltd. BOID: 1204290059327175 86,588 3,524,019
174,084 4,045,318
11.00 Issued, subscribed & paid up capital
This balance is made up as follows :
Mr. Mahmud Hossain 16,203,410 15,190,700
Mr. Fokhruz Zaman 15,190,700 15,190,700
Mr. Md. Iftear Zahid 12,609,870 10,127,160
Mr. Didarul Islam Chowdhury 5,063,580 5,063,580
Mr. Saiful Alam 1,568,160 5,063,580
Mr. Syed Azmal Hossain 8,439,380 8,439,380
Mr. Anir Chowdhury 8,439,380 8,439,380
Bengal Venture Capitals 20,004,700 20,004,700
Asian Tiger Capital Partners 2,500,000 2,500,000
Investments Ltd
Al-Arafah Islami Bank Limited 93,693,430 93,693,430
183,712,610 183,712,610
12.00 Accounts Payable & Provisions
This balance consists of as follows :
Balance as on January 01, 2017 10,357,096 9,231,892
Add : Addition during the year 68,122,263 62,622,669
78,479,359 71,854,561
Less : Adjustment during the year 63,205,303 61,497,465
Balance as on December 31, 2017 15,274,056 10,357,096
[Schedule-C for details]
192
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount In Taka Amount In Taka
2017 2016
13.00 Advance against Revenue
This balance consists of as follows :
Balance as on January 01, 2017 100,000 100,000
Add : Addition during the year 12,152,686 9,723,780
12,252,686 9,823,780
Less : Adjustment during the year 12,152,686 9,723,780
Balance as on December 31, 2017 100,000 100,000
The break up is as follows :
Advance from BHEET IT 100,000 100,000
100,000 100,000
14.00 Loan/Quard from Bank
This balance consists of as follows :
Balance as on January 01, 2017 - -
Add. Received during the period 9,700,000 1,500,000

9,700,000 1,500,000
Less: Loan refund - 1,500,000
Balance as on December 31, 2017 9,700,000 -
15.00 Provision for Income Tax
This balance consists of as follows :
Balance as on January 01, 2017 2,507,180 1,410,814
Add : Provission made during the period 1,549,149 2,507,180
4,056,329 3,917,994
Less: Advance Income Tax adjusted - 426,876
Less : Income Tax paid during the year 400,000 983,938
Balance as on December 31, 2017 3,656,329 2,507,180
15.01 Income Tax
This balance consists of as follows :
Tax on SND Account’s Income 35% 15,767 25,491
Tax on MTDR Profit 35% 1,222,922 1,633,891
Tax on other income - -
Tax on Capital Gain from Share Trading 10% 189,408 633,176
Tax on Dividend Income (Considering Exempted Tk. 25,000.00) 20% 121,052 214,622
1,549,149 2,507,180
16.00 Revenue
This balance consists of as follows :
Domestic software sales 41,101,517 35,550,326
Domestic software support 32,294,228 25,998,163
Total Income: 73,395,745 61,548,489
16.01 Income from Software Development
This balance consists of as follows :
Al-Arafah Islami Bank Ltd 17,961,706 14,407,486
Social Islami Bank Ltd 5,651,000 7,049,500
Agrani Bank Limited 1,278,000 -
The City Bank Ltd. 135,000 925,165
EXIM Bank Limited - 90,000
193
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount In Taka Amount In Taka
2017 2016
Union Bank Limited 2,387,498 7,006,113
Islamic Finance and Investment Limited (IFIL) 150,000 600,000
ICB Islamic Bank 834,313 274,312
IFIC Bank Ltd - 697,750
Dhaka Bank - 200,000
United Commercial Bank Ltd.(UCBL) 1,880,000 1,500,000
Uttara Bank Ltd 1,176,000 -
National Bank Ltd 1,248,000 -
Flora Limited 8,200,000 -
BURO Bangladesh - 2,800,000
Uddipon 200,000 -
41,101,517 35,550,326
16.02 Income from Software Support & Maintnance
This balance consists of as follows :
Al-Arafah Islami Bank Ltd 12,865,577 9,223,349
Social Islami Bank Ltd 6,606,553 6,557,444
Union Bank Ltd 4,263,045 3,276,360
The City Bank Ltd. 2,135,250 2,199,000
Lafarge Surma Cement Ltd 1,672,605 1,846,524
AB Bank Ltd. 1,435,404 1,435,404
Agrani Bank Ltd 480,000 480,000
Hajj Finance Co. 762,300 693,000
Dhaka Bank 574,164 287,082
EXIM Bank Ltd 818,180 -
IFIC Bank Ltd 418,650 -
ICB Islamic Bank Ltd 262,500 -
32,294,228 25,998,163
17.00 Production expenses
This balance consists of as follows :
Directors’ Remuneration and allowance 2,353,333 1,453,334
Salaries and Allowances to Production Officers 25,686,311 22,896,915
Wages for Part Time Work - -
Oracle Software Expense 112 237,138
Travelling & Daily Allowance 27,055 35,460
Offday & Overtime Allowance 27,500 19,000
Leave Encashment Allowances - 232,807
Stationery - 6,700
Computer Accessories - 14,500
Conveyance Production 142,259 106,321
Entertainment-Production - -
Lunch Expense 388,596 424,730
Training Expenses - 83,870
Production Staff Refreshment 156,542 198,830
Mobile Allowance 193,935 118,960
VAT deduction on Software Development 15,281 679,112
VAT deduction on Software Support 234,280 8,483
Internet Expense 176,807 174,792
194
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount In Taka Amount In Taka
2017 2016

Overseas Travelling Expenses 7,250 322,817

Amortization of Software Development Exp 11,990,021 5,270,673
Depreciation Exp. 897,098 882,878
42,465,305 33,175,920
18.00 Direct, administration and general expenses
This balance consists of as follows :
Directors’ Remuneration and allowance 1,453,334 1,453,333
Salaries and Allowances Admin 5,201,703 4,691,743
Leave Encashment - 20,900
Contribution to Provident Fund 2,112,825 1,793,517
Offday & Overtime Allowance 2,580 38,333
Stationeries & Photocopy 113,091 161,812
Printing 50,590 209,822
Computer Accessories - -
Conveyance 30,818 33,951
Lunch Expense 20,100 30,294
Entertainment 179,317 81,191
Business Promotion Expense 215,988 830,847
Office Staff Refreshment 349,677 270,648
Telephone, Mobile, Telex & Fax Expenses 58,400 91,434
Electricity Bill 180,417 497,984
Internet Expenses 12,420 12,420
Vehicle Maintenance (Fuel, Mobil, Parking, Renewal etc) 1,622,190 1,514,400
Postage & Courier Expenses 5,370 11,180
Audit, Consultancy & Legal Expenses 140,000 81,375
Fees, Forms, Registration & Renewals 307,023 312,509
Medicine as First AID - 4,510
Advertisement Expense 15,300 2,550
Cleaning & Washing Expense 116,461 74,999
Office Rent 2,160,000 155,100
Service Charge on Office Rent 360,000 -
Office Maintenance Expenses 492,610 322,103
Repair & Maintenance Office Equipments 19,000 -
Newspaper & Periodical 10,395 15,562
Stamp & Notary expense 9,885 8,730
Meeting/Conference and Seminar Expenses 379,920 324,614
Miscellaneous Expenses 179,109 184,366
Bed debts Expenses 84,500 230,000
Discount allowed to customer 411 -
Accidental & other Losses - -
Loss on disposal of fixed assets 4,939 16,174
Amortization Expense 105,117 -
Depreciation exp 897,098 882,878
16,890,588 14,359,279
195
 Notes to the Financial Statements For the year ended December 31, 2017
Particulars Amount
Amount In
In Taka
Taka Amount In Taka
31.12.2016
2017 2016

19.00 Sales and market development expenses

This balance consists of as follows :
Directors’ Remuneration and allowance 1,453,333 1,453,333
Salaries and Allowances to Marketing Executives 3,329,780 3,840,048
Conveyance-Marketing 76,004 8,310
Lunch Expense 4,244 3,415
Travelling & Daily Allowance 729,536 1,395,025
Courier Expenses 3,450 1,152
Advertisement Expense 49,500 87,250
Bid Document Purchase Expenses 9,800 27,345
Marketing commission 305,487 -
Depreciation Exp. 897,098 882,878
Amortization of Marketing and Promoting Exp 793,144 1,198,626
7,651,376 8,897,382
20.00 Income from other sources
This balance consists of as follows :
Income (Profit) From SND Account 45,050 72,832
Income (Profit) From MTDR 3,494,063 4,668,259
Gain on sale of old Scrap - -
Capital Gain from Share Trading 1,894,080 6,331,764
Dividend Income 630,258 1,098,109
6,063,451 12,170,964
21.00 Financial Expenses
This balance consists of as follows :
Credit Cards Charge - 28,849
Bank Charges 36,888 34,968
BO Account Charges 500 1,190
37,388 65,007

196
197

Property, Plant & Equipment As at December 31, 2017

Schedule -A

Cost Depreciation Written down

Particulars Balance as on Addition Balance as on Rate of Dep. Balance as on Balance as on Value as on
“Disposal/ Addition Adjustment
01.01.2016 31.12.2017 (%) 01.01.2017 31.12.2017 31.12.2017
Adjustment”

Power supply & electric equipment 965,652 39,800 - 1,005,452 15% 328,647 101,521 - 430,168 575,284

Access Control System 125,950 - - 125,950 15% 18,893 16,059 - 34,951 90,999

Motor vehicle 12,939,707 - - 12,939,707 10% 1,230,169 1,170,954 - 2,401,123 10,538,584

Computer & accessories 5,685,023 1,148,514 24,000 6,809,537 15% 3,081,346 559,229 16,306.00 3,624,269 3,185,268

Furniture & Fixture 1,967,080 124,450 1,730 2,089,800 10% 311,591 177,821 985.00 488,427 1,601,373

Office decoration, partitions 4,858,810 30,500 - 4,889,310 10% 489,615 439,970 - 929,585 3,959,726

Office Equipments 1,976,681 187,075 - 2,163,756 15% 675,183 223,286 - 898,469 1,265,287

Cookers and cutlery 22,742 - - 22,742 10% 9,081 1,366 - 10,447 12,295

Books & periodicals 68,759 - - 68,759 15% 61,490 1,090 - 62,580 6,179

Total 28,610,404 1,530,339 25,730 30,115,013 6,206,015 2,691,295 17,291 8,880,018 21,234,995

Note:

01) Depreciation have been charged on reducing balance over the useful life.

Allocation of depreciation

Production department 897,098

Administration department 897,098

Marketing department 897,098

2,691,295

Total Depreciation expenses have been allotted to Production, Administration and Sales & Marketing department equally.
 Statement of Accounts Receivable As at December 31, 2017
Schedule-B
Sl. Opening Addition “Adjustment/Received” Cl. Balance
No. Particulars
Taka Taka Taka Taka
A. Software Development:
1 The City Bank Ltd. 665,519 - - 665,519
2 The City Bank Ltd.-RTGS - 131,395 131,395 -
3 Al-Arafah Islami Bank-Ababil 1,182,597 10,754,206 7,390,062 4,546,741
4 Al-Arafah Islami Bank-Ababil Offshore Banking 289,700 - 289,700 -
5 Al-Arafah Islami Bank-HRMS Sylvia 390,000 - 390,000 -
6 Al-Arafah Islami Bank-Ababil Agent Banking 1,500,000 750,000 2,250,000 -
7 Al-Arafah Islami Bank-Ababil RTGS 210,000 - 210,000 -
8 Al-Arafah Islami Bank-Ababil Treasury 2,000,000 - - 2,000,000
9 Al-Arafah Islami Bank-Ababil Audit Automation - 6,210,000.00 - 6,210,000
10 Agrani Bank Ltd Ababil - 1,278,000.00 708,721.00 569,279
11 AB Bank Limited-Ababil 1,209,013 - 701,250.00 507,763
12 Social Islami Bank Limited-Ababil 1,559,996 4,301,000.00 1,107,996.00 4,753,000
13 Social Islami Bank Limited-Ababil Agent Banking 2,800,000 - 2,100,000 700,000
14 Social Islami Bank Limited-Mobile App - 1,350,000 1,350,000 -
15 Uddipan HRMS 300,000 200,000 300,000 200,000
16 Union Bank _ Ababil 7,180,000 2,387,498.00 4,887,498.00 4,680,000
17 Sonali Polaris-Rupali Bank_ABABIL-Sales 13,240,642 - - 13,240,642
18 Islamic Finance and Investment Limited (IFIL) 600,000 150,000.00 450,000.00 300,000
19 BURO Bangladesh_Sylvia_Sales 1,400,000 - - 1,400,000
20 Dhaka Bank_ABABIL_Internet Banking-Sales 104,762 - 104,762 -
21 ICB Islami Bank_Ababil - 560,000 - 560,000
22 IFIC Bank Ababil_RTGS - - - -
23 FLORA LIMITED - 8,200,000.00 - 8,200,000
24 United Commercial Bank Ltd. 1,125,000 1,880,000.00 750,000.00 2,255,000
25 Uttara Bank Ltd-ABABIL - 1,176,000.00 - 1,176,000
26 National Bank Ltd-ABABIL - 1,248,000.00 - 1,248,000
B. IT Support & Software Maintenance
27 The City Bank Ltd.Support 49,500 99,000.00 99,000.00 49,500
28 The City Bank Ltd. RTGS Support 236,250.00 101,250.00 135,000
29 Lafarge Surma Cement Ltd._Support 128,666 1,927,014.00 1,798,347.97 257,332
30 Al-Arafah Islami Bank-Ababil -Support - 1,607,321.25 1,607,321.25 -
31 AIBL_Ababil_BACPS_Support 351,112 66,665.00 417,777.00 -
32 AIBL_Ababil_GoAML_Support 202,469 32,392.00 234,861.00 -
33 AIBL_Ababil_CBS & ATMS Support 295,988 42,844.00 338,832.00 -
34 AIBL_Ababil_Agent Banking_Support - 326,120.00 326,120.00 -
35 AIBL_Ababil_OBUS_Support - 213,380.25 213,380.25 -
36 AIBL_Ababil_RTGS - 224,169.00 224,169.00 -
37 AB Bank Ltd._Support 128,590 1,435,404.00 1,426,431.00 137,563
38 Agrani Bank Ltd._Support 166,800 480,000.00 459,330.00 187,470
39 EXIM Ababil Offshore Support - 818,180.00 654,544.00 163,636
40 Hajj Finance Co. Ltd_Support 60,500 762,300.00 756,250.00 66,550
41 Social Islami Bank Litd. Ababil_Support 1,594,405 6,215,500.00 6,120,850.00 1,689,055
42 Social Islami Bank Litd. Offshore Ababil_Support 550,277 392,000 - 942,277
43 Social Islami Bank Litd.Tran_API for WSDL Support 566,667 233,333 - 800,000
44 Union Bank Ltd_ Ababil_Support 1,638,180 3,913,920.00 3,325,140.00 2,226,960
45 Union Bank Ltd_ Ababil_RTGS_Support - 349,125.00 299,250.00 49,875
46 IFIC Bank_Ababil_RTGS_Support - 418,650.00 - 418,650
47 Dhaka Bank_Internet Banking_Support 143,541 574,164.00 478,470.00 239,235
48 ICB Islamic Bank_Ababil_RTGS_AMC - 262,500.00 196,875.00 65,625
TOTAL: 41,633,924 61,206,331 42,199,582 60,640,672
198
 Statement of Accounts Payable & Provision As at December 31, 2017
Sl. No. Particulars Opening Addition “Adjustment/Payment” Cl. Balance
1 Directors’ Remuneration - 3,610,000.00 3,342,500.00 267,500
2 Salaries & Allowances 1,684,168 50,170,245.00 46,396,778.00 5,457,635
3 Provident Fund - 4,225,650.00 3,868,228.00 357,422
4 Project Bonus for Mustang Project Team 37,197 - 37,197 -
5 Accrued telephone, telex & fax expenses 10,580 42,959.00 53,539.00 -
6 Payable to Project Development Consultants - 1,000,000 850,000 150,000
7 Per- diem payable 1,030 - 1,030 -
8 Car Maintenance Expanse 88,000 902,000.00 902,000.00 88,000
9 Desire Design 6,000 - - 6,000
10 The Daily Financial Express - 34,500.00 17,250.00 17,250
11 STARgate Communications Ltd[Internet] - 9,125.00 7,142.00 1,983
12 Hi-Tech Park Authority for Office Rent 5,403,240 2,520,000.00 4,741,734.00 3,181,506
13 Ahsan Zamir & Co 40,000 40,000 40,000 40,000
14 Ranks ITT(Office-Internet) - 120,000 117,826 2,174
15 Payable to Oracle 237,138 112 237,250 -
16 United Certification Services Ltd. 144,250 - 144,250 -
17 Payable to Inspire Computer & Technology. 38,300 - 38,300 -
18 Electric Bill 497,984 441,537.00 678,401.00 261,120
19 Marketing and Promoting cost payable for ‘Ababil’ 1,393,750 - - 1,393,750
20 Provision for Expenses - 3,088,125.00 3,088,125
21 Income Tax DAS from Office Rent - 108,000 - 108,000
22 Income Tax DAS from Consultants Payment 5,000 - - 5,000
23 Income Tax DAS from Remuneration 142,791 510,000.00 467,500.00 185,291
24 Income Tax DAS from Salaries and allowances 560,661 1,300,010.00 1,205,808.00 654,863
25 VAT payable 67,007 - 58,570.00 8,437
TOTAL: 10,357,096 68,122,263 63,205,303 15,274,056
199
 BRANCHES OF AIBL
DHAKA DIVISION Madhabdi Branch
691-694 Madhabdi Bazar, Narshingdi
Head Office Corporate Branch
9446005, 01711-613484
Al-Arafah Towar (1st & 2nd Floor), 63, Purana Paltan
(Daynik Bangla Mor), Dhaka-1000. Nawabpur Road Branch (AD)
02-44 85 00 01(D) 85/87, Nawabpur Road, Dhaka-1100
01787-697347
Banani Branch (AD)
16, Kamal Ataturk Avn, Banani, Dhaka North South Road Branch (AD)
9822250, Fax- 9822357, 01819255587 96, Nazrul Islam Sharoni, Bongshal, Dhaka-1100
9580875
Motijheel Corporate Branch (AD)
125, Motijheel C/A, Dhaka-1000 New Elephant Road Branch (AD)
9563884, 01760-100500 91, New Elephant Road, Dhaka-1205
9665323-4
Dhanmondi Branch (AD)
H#54/1, R#4/A, Dhanmondi, Dhaka Narayangonj Branch
58610913, 01811-483199 71, B.B. Road, Narayangonj, 7645821
Dilkusha Branch (AD) Pagla Branch
63, Dilkusha C/A, Dhaka-1000 Alhajj Afser Karim Bhaban, Pagla, Narayangonj
01766677411 47696133, 01819-253591
Islampur Branch Progati Sharani Branch (AD)
29-31, Islampur Road, Dhaka-1100 Ga-133/3 Progati Sharani, Dhaka
57393800, 57393754, 01715-619789 9863317, 01713-204935
Jatrabari Branch (AD) Uttara Model Town Branch (AD)
6 S.F. Sharak, West Jatrabari, Dhaka-1204 H#13 R # 14/A, S-4, Uttara, Dhaka-1230
7554510, 7554477, 01847054693 58950583, 01819-261382
Joydebpur Chowrasta Branch VIP Road Branch (AD)
Chandona Chowrasta, Joydebpur, Gazipur-1700 50/1, Inner Cercular (VIP) Road, Dhaka-1000
49263958 9345871-2
Kapasia Branch Gulshan Branch (AD)
Kapasia Bazar, Kapasia, Gazipur Hosna Center, 106 Gulshan Avenue, Dhaka-1212
029209393 9863236, 01790346400
Konapara Branch Hazaribagh Branch
958, Konapara Bazar, Demra, Dhaka 149, Hazaribagh bazar, Dhaka-1209
01811-409592 9611758-9, 01819-255297
Motijheel Branch (AD) Keranigonj Branch
161, Motijheel C/A, Dhaka-1000 Haridia Shopping Complex, Kadamtoli, Keranigonj,
9569350 (D), 01940-986464 Dhaka-1310, 7763100, 7763099
Moulvibazar Branch (AD) Manda Branch
130, Chawk Mogoltuly, Moulvibazar, Dhaka-1211 152 South Manda, Dhaka-1214
57311989, 01819-211828 7277772, 7277388, 01811-458743
Mirpur Branch Nandipara Branch
3/A, Darus-Salam Road, Mirpur-1, Dhaka-1216 Akkel Ali Shopping Complex, Nandipara Bazar, Dhaka.
9008123, 9010623, 01811-449493 7811053
Mouchak Branch Bhairab Branch
76 D.I.T. Road, Malibagh, Dhaka-1217 Munshi Bhaban, Kolapatty Mor, Bhairab, Kishorgonj
9339006 9471178, 01817-032726
Mohammadpur Krishi Market Branch Gazipur Branch
32/8(Ka),T.M. Road, Mohammadpur, Dhaka-1207 Holding # K-280 , BIDC Road, Gazipur
200

9142732, 01937777077 4926-1102, 4926-1140, 01811-448051

 BRANCHES OF AIBL
Hemayetpur Branch Nayapur Branch
Asha Plaza (1st Floor), Hemayetpur Bus Stand, Hemayetpur, Nayapur Shopping Center, Nayapur Bazar
Savar, Dhaka, 01811-448052 Narayangonj, 01811-487867
Kamrangirchar Branch Rampal Branch
Hazi Kamal Super Market, Kamrangirchar, Dhaka-1211 Mujibur Rahman Super Market (1st floor)
55160200, Fax – 55160202 Shipahipara, Rampal, Munshigonj;
Khilkhet Branch 7611855, 7610066
B-34/Ka, Khilkhet Super Market, Khilkhet, Dhaka-1229 Ruhitpur Branch
58950051, 01819157536 Sun Plaza Market, Ruhitpur Bazar, Keranigonj
Mirpur-10 Golchattar Branch Dhaka; 7766882-3, 01920-997483
27 Dewan Mansion, Mirpur-10, Dhaka-1216 Sonargaon Janapath Road Branch
9011766, 01811-448055 Plot#30, Sector#11, Sonargaon Janapath road,
South Jatrabari Branch Uttara, Dhaka-1230; 01793 59 29 94
314-A/4 South Jatrabari, Dhaka-1204 Barmi Branch
7545161, 7544840
Shahjahan Fakir Bhaban, Barmi Bazar,
Abdullahpur SME Branch Sreepur, Gazipur; 018-47054694
Minnat Plaza, Abdullahpur Bazar, Abdullahpur,
Bhagyakul Branch
Keranigonj, Dhaka-1311, 01713-810082
A Rashid Tower, Balasur Chowrasta,Sreenagar, Munshigonj
Bandar SME Branch 01817-072556
555/1, Wilson Road, Bandar Bazar, Narayanganj
Fulbaria Branch
766-1317-8, 01826-180327
Haji Joynal Abedin Sarker Plaza, Fulbaria,Kaliakoir, Gazipur
Panchdona SME Branch 01847-054692
Hira Plaza, Panchdona Chowrasta, Narshingdi
029446452-3 Rampura Branch
5/1, Pashchim Chowdhury Para, D.I.T. Road, Rampura
Ati Bazar Branch Dhaka-1219; 9361356, 01712635225
Manik Plaza, Ati Bazar , Keranigonj, Dhaka-1312
01833-330274 Tangail Branch
77-78, Victoria Road, Tangail,
Daxminkhan Branch 092161435, 01819-556372
L.K. Plaza, Daxminkhan Bazar, Daxminkhan, Dhaka-1230
8999042 Faridpur Branch
15/75, Mujib Sarak, Niltuli, Faridpur
Natun Bazar Baridhara Branch
0631-65366, 01864554466
1209 Madani Avenue, Natun Bazar
Dhaka, 01911711950 Kawranbazar Branch
Dhaka Trade Centre, 99, Kazi Nazrul Islam Avenue,
Panthapath Branch
Kawran Bazar, Tejgaon, Dhaka-1215
F R Tower, 8/C Shukrabad, Panthapath, Dhaka-1207
9135309, 9135345, 01766677618
9138682, 01819-238220
Kalatia SME Branch Kazirhat Branch
Kabir Bazar, Kalatia Bazar, Keranigonj, Dhaka Mosjid Market, Kazirhat, Jajira
7769157, 01760-938299 Shariatpur-8010; 01783-510066.

Shyamoli Branch Mohakhali Branch

13/1 Ring Road, Shyamoli, Dhaka-1207 Arzed Chember, 13 Mohakhali C/A, Dhaka-1212
9136517 985 22 43, 985 22 59, 017 32 20 10 03

Bhelanagar Branch Tongi Branch

R. I. Shopping Complex (1st floor), Bhelanagar, Narshingdi; Holding # 8, Charag Ali Market, Tongi, Gazipur
9452295, 01811-487868 017 11 64 23 56
Kathgora Bazar Branch Kaliakoir Branch
Sarkar Plaza, Kathgora Bazar, Ashulia, Dhaka-1341 College Road, Kaliakoir Bazar, Kaliakoir
7792573 Gazipur; 01755505468
201
 BRANCHES OF AIBL
Pallabi Branch Cox’s Bazar Branch
Plot # 81, Block # A, Section # 12, Pallabi, Mirpur 902, Saiket Tower, East Bazarghata, Cox’s Bazar
Dhaka; 9023611, 9023511, 01811410689 0341-51081-2, 01819-320289
Kaligonj Branch Chowmuhani Branch
Twin Tower Market, Aganagar, Kaligonj, Keranigonj 857,858 Hazipur, Feni Road, Noakhali
Dhaka; 01710858944 0321-51000, 01715-033336
Azampur Branch Feni Branch
272 Shah Kabir Majar Road, Azampur, Chalaban, 33-34 S.S.K Road, Feni
Daxminkhan, Dhaka; 48954592-3, 01712-190054 0331-63548-9, 01811-418216
Amin Bazar Branch Cumilla Branch
MA Hossain Tower, Amin Bazar, Savar, Dhaka - 1348, 257,240, Monoharpur, Kotwali, Cumilla-3500
903 44 11-2 081-64546, 01711-431174
Bashundhara Branch Companigonj Branch
H # 262-263, Block - B, Bashundhara R/A, Dhaka. Companigonj Bazar, Muradnagor, Cumilla-3542
018 41 22 66 60 08026-59076, 01712235569
Gawsia Branch Gallai Branch
Bhai Bhai Complex, Rupgonj, Narayangonj Abeda Noor Foundation Complex, Gallai
017 11 90 90 72 Chandina, Cumilla; 01715-290209
Louhajang Branch Brahmanbaria Branch
Dowlat Khan Complex, Louhajang, Munshiganj Mosjid Road, Bhuiyan Mansion, Brahmanbaria Sadar
01711733734 0851-59330, 01827-563888

MYMENSINGH DIVISION Akhaura SME Branch

S. R. Complex (1st floor) Sarak Bazar, Akhaura , B.Baria
Mymensingh Branch 08522-56155, 01740-619012
70, Choto Bazar, Mymensingh
Bashurhat SME Branch
091-66714
34, Main Road, Bashurhat, Noakhali
Netrokona Branch 0322-356070, 01811-448041
274, Choto Bazar, Netrokona.
Tantarbazar SME Branch
0951-615 48, 0951-615 49, 017 77 75 48 49
Haji Lal Mia Market, Tantar Bazar
CHATTOGRAM DIVISION Akhaura, Brahmanbaria; 01743-244344
Agrabad Branch (AD) Station Road Branch
96, Agrabad C/A, Chattogram 108, Station Road, Chattogram
031-713372-3 031-632812-3
Hathazari Branch Hajigonj Branch
Salamatullah Bhaban, Kachari Road, Hathazari Bazar Hajigonj Tower, 762 Hajigonj, Chandpur
Chattogram, 031-2601679, 01811-408492 0842-475145-6
Jubilee Road Branch (AD) Kutibazar Branch
221, Jubilee Road, Chattogram Eastern Firoz Plaza, Kutibazar, Kasba
031-637680, 01819-315480 B.Baria, 01768722151

Khatungonj Branch (AD) Halishahar Branch

146, Khatungonj, Chattogram Holding: 1655, Port Connecting Road,
031-617103, 01819-315481 Halishahar, Chattogram, 031-715662-3, 01833-149150

O.R. Nizam Road Branch Rahimanagar Branch

943, O.R. Nizam Road, Nasirabad, Panchlaish Rahimanagar Bazar, Kachua, Chandpur
Chattogram; 031-656567-8, 01819-345030 01811-487870

Patherhat Branch Teknaf Branch

Patherhat, Rauzan, Chattogram-4346 Al-Jamia Market, Teknaf, Cox’s Bazar
034-2675120, 034-2675121, 01833-112924
202

031-671150, 01811-424739
 BRANCHES OF AIBL
Barura Branch Bhatiary Branch
Madina Market, Hospital Road, Barura, Cumilla Bhatiary Station, Sitakunda, Chattogram
0802752305-6, 01847-054695 018 19 37 37 62
Muradpur Branch Eidgoan Branch
Islam Tower, 59, CDA Avenue, Muradpur, Eidgaon Bazar, Cox’s Bazar Sadar, Cox’s Bazar,
Panchlaish, Chattogram, 031-657966, 01965-881111 018 17 70 51 56
Nabinagar Branch SYLHET DIVISION
Nabin Super Market, Sadar Road,Nabinagar, Brahmanbaria
Amborkhana Branch
0852575504, 01766-678445
4877, 4874 Amborkhana, Sylhet-3100
Padua Bazar Branch 01777-767929
Seven Star Shopping Complex, Padua Bazar,
Beanibazar Branch
Lohagara, Chattogram, 01833-175500
825, South Beani Bazar, Sylhet
Gouripur Branch 08223-56114-5, 01713-409987
Maa Complex (1st Floor) Gouripur Bazar,
Laldighirpar Branch (AD)
Daudkandi, Cumilla. 01811418206, 01791575766
Reasot Tower, 1795 Laldighirpar, Sylhet-3100
Kadamtoli Branch 0821-710809, 01819-550426
376, D. T. Road, Kadamtali, Chattogram.
031-2522835, 031-2522861-2, 01847114430 Moulvibazar Branch
99-100 M. Saifur Rahaman Road, Moulvibazar-3200
Nangalkot Branch 0861-54106-7, 01714-000907
H – 50, College Road, Nangalkot, Cumilla
01712796757, 0803366471-2 Ruposhpur Branch
1450 Central Road, Sreemangal, Moulvibazar
Shiberhat Branch 08626-71242, 01711431173
Idris Complex (1st Floor) Shiberhat, Sandwip, Chattogram.
01847114428, 01796399377 Zindabazar Branch
Jalalabad House, Zindabazar, Sylhet
Ashugonj Branch 0821-722078-9, 01711-431175
Jalal Khar Building, Ashugonj Bazar, Brahmanbaria;
01747296951 Madhabpur SME Branch
H-0006-000 Kalibari Road, W-07, Madhabpur
Azadi Bazar Branch Hobigonj; 0832-756352, 01926-697968
Jamey Masjid Market, Azadi Bazar, Fatikchhari, Chattogram
016 29 40 89 98 KHULNA DIVISION
Aman Bazar Branch Khulna Branch (AD)
Amanat Sha Palza (1st Floor), Hathazari Road, Chattogram. 4, Sir Iqbal Road, Khulna
031-2580870-1, 01792253088 041-721249, 01765-063340

Chawkbazar Branch Benapole Branch

Shajada Market (1st Floor), 178/182 College Road, 283, 284, Benapole Bazar, Jashore
Chawkbazar, Chattogram. 031-2853784-5, 01811458741 04228-75686, 01711-431176

Lakshmipur Branch Jashore Branch

Akota Super Market, 1310-12 Bazar Main Road, Lakshmipur 27, M.K. Road, Jashore
Sadar, Lakshmipur. 0381-62290, 01718357947 0421-68571, 01711-431060

Anwara Branch Satkhira Branch

Chaturi Bazar, Anwara, Chattogram 466, Bara Bazar Sarak, Satkhira
018 19 89 37 10 0471-63606, 01712-514660
Teribazar Branch Chuknagar Branch
Islam Super Market, 618/739 Teribazar, Chattogram. Chuknagar Bazar, Dumoria, Khulna,
031 63 02 79-80 01750-024499
Bandartila Branch Mongla Branch
2638, Airport Road, Ba. Naw. Ja. Isha khan, EPZ, 19/A, Mongla Port I/A, Mongla, Bagerhat
203

Chattogram, 031 74 03 83 04662-75105-6, 01738-933588

 BRANCHES OF AIBL
Gallamari Branch Patharghata Branch
219/1, Sher-E-Bangla Road, Gallamari, Khulna 2/1 Hospital Road, Patharghata, Barguna
041-2832181 017 16 70 65 76
Kushtia Branch Patuakhali Branch
147, N. S. Road, Harun Market (Infront of Sadar Thana), 95/1, Sadar Road, Patuakhali Sadar, Patuakhali.
Kushtia. 07172262, 01799368224, 01712962933 0441-639 55-6

Jhaudanga Branch RAJSHAHI DIVISION

Zaman Market, Jhaudanga Bazar, Satkhira
Rajshahi Branch (AD)
016 70 29 58 01 239,248 Shaheb Bazar, Boalia, Rajshahi
Chuadanga Branch 0721-775171, 01727-179771
Molla Tower-2, Hotel Royal Blue (1st Floor), Shahid Alaul Bogura Branch (AD)
Islam Khokon Sarak (VJ School Road), Chuadanga. Talukder Mansion, H # 60/70 Barogola Bogura-5800
0761-81146-7, 01718503698 051-69994-5, 01713-203754
Magura Branch Mohadevpur Branch
S.M Plaza (1st Floor), 177, M.R Road, ( College Road), Plot No. 245, Mohadevpur, Noagaon
Magura, 0488-510 70 07426-75136, 01711-425675
Monirampur Branch Shahjadpur Branch
G. N. Super Market, H. # 03-005-0134, Monirampur Bazar Chowdhury Plaza, Dariapur Bazar Shahjadpur, Sirajgonj
Main Road, Monirampur, Jashore. 04227-783 60 07527-64052, 07527-64053,01762-331990, 01557-718828
BARISHAL DIVISION Pabna Branch
Plot#355, Sonapotti, Pabna
Barishal Branch
0731-62047, 01765700080
442 K. B. Hemayetuddin Road, Barishal
0431-64476, 01727379119 Chapainawabganj Branch
Teacher’s Plaza (1st Floor), 42/14, Baten Khar More,
Jhalakathi Branch Chapainawabganj Sadar, Chapainawabganj
68, Monoharipatti Road, Jhalakathi 0781-515 45 (D), 0781-515 46, 017 28 50 40 26
0498-62808, 01754-015565, Fax : 0498-62807
Sherpur Branch
Bhola Branch Dhunat More, Sherpur, Bogura.
Jahangir Plaza, Sadar Road, Bhola 0502977185-6, 017283303 31
0491-61244-5, Fax - 0491-61244
Natore Branch
Mathbaria Branch Holding #0363-01, Kanaikhali, Natore Sadar, Natore.
407 Kapuriapatty, Mathbaria, Pirojpur 0771-61533-4, 01713924930
04625-75374, Fax - 04625-75373
RANGPUR DIVISION
Bhandaria Branch
Salah Al-Zubayer Market (1st Floor), Kapuriapatty Saidpur Branch (AD)
Bhandaria, Pirojpur; 0462-356469, 01726-265060 Shahed Dr. Zikrul Haque Road, Saidpur, Nilphamari
05526-72804, 01716-236334
Alipur Branch
Dinajpur Branch
Alipur Bazar, Kalapara, Patuakhali
333, Nimtola, Dinajpur
044-2856234-5, 01755906755
0531-61865-7, 01715-139798
Banaripara Branch
Badargonj SME Branch
Haji Sobhan Market, Falpatti Road, Banaripara, Barishal
Upazila Road, Badargonj, Rangpur
0433-25 62 90 (D), 0433-25 62 91, 017 15 63 29 60
05222-56573-4, 01761-730189
Barguna Branch Rangpur Branch
Holding # 075, Sadar Road, Borguna. 15, Central Road, Payrachattar, Rangpur
044 85 13 39-40, 017 27 42 19 43 0521-55830, 01773-268000
Mostafapur Branch Palashbari Branch
Saim Super Market, Mostafapur Bus Stand Rabbi Super Market (1st Floor), Bogura-Rangpur Highway,
204

Madaripur; 0661-61206-7, 01730466564 Palashbari, Gaibandha. 0542-456136, 01740015795