Intern Report on MTB

Rights Share Offer Document

Mutual Trust Bank Limited 0


Mutual Trust Bank Limited




For Rights Offer of 2,494,800 Ordinary Shares of Tk 100 each at par totaling Tk 249,480,000 offered on the basis of 1 rights share against 5 existing shares held according to approval given in

the EGM held on 5 June 2008

Subscription

Opens on: 21 September 2008 Closes on: 19 October 2008

Record Date

2 September 2008

Manager to the Issue

Prime Finance & Investment Limited

Fully Underwritten By

Prime Finance & Investment Limited

Credit Rating Agency Credit Rating Agency of Bangladesh Limited (CRAB)

Long Term: A1 Short Term: ST3

Rights Offer Document Date

19 June 2008 As per provision of the Depository Act, 1999 and regulation made thereunder, rights share shall only be issued in dematerialized condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary Owner (BO) Account number in the application form.




Table of Contents Items Page No. Offer to the shareholders 3 Corporate directory 4 The Company 5 Mutual Trust Bank Limited 5 Share capital 5 Business activities of MTB 5 Utilization of fund raised by Initial Public Offering (IPO) 6 Statement of annual general meeting held after IPO 6 Board of Directors 7 No. of shares held by the Sponsors/Directors and shareholders having five percent or more shares 8 Names, addresses, descriptions, occupations of Directors, MD, Managers, Company Secretary 9 Name of public listed companies under common management 9 Credit rating report summary 9 Summarized financial statements for the last 5 years 10 Risk factors and management perception about risks 14 The Rights Offer 16 Highlights of rights offer 16 Underwriting 16 Purpose of the rights issue 16 Justification of the issue price of rights share 16 Condition of subscription 16 Acceptance of rights shares 17 Renunciation 17 Payment of share price 17 Period of subscription 17 Directors’ take-up in the rights offer 17 Lock-in on rights shares of Directors’ and other shareholders holding 5% or more shares 17 Distribution of rights shares 17 Particulars of material contract 18 Others 19 Rectification 19 Audited Financial Statements as on 31 March 2008 20 Due diligence 61 Form A-Declaration from the Issue Manager 61 Form B-Declaration from underwriters 61 Form C-Declaration from the Auditor 62 Form D-Declaration from the Directors 64 Additional disclosure by the management of the bank 65 Offer Letter and Forms 66 Letter of offer for rights issue 66 Application form A 67 Renunciation form B 69 Renouncee(s) form C 70




Registered Office: 68 Dilkusha C/A, Dhaka-1000

Issue of Rights Shares

3 September 2008 Dear Shareholder(s) We are pleased to inform you that the shareholders of the company in the Extra Ordinary General Meeting held on 5 June 2008 decided to issue 2,494,800 Rights Shares of Tk 100 each at par at 1:5 ratio (one rights share against five existing shares held). The purpose of issuance of rights shares is to strengthen capital base of the bank. To maintain further growth and increase the capital base of your company, we hope you would come forward with your full support and assistance to make the offer a success. A self-explanatory Rights Share Offer Document prepared in the light of the Securities and Exchange Commission (Rights Issue) Rules, 2006 is enclosed herewith for your information and evaluation. On behalf of the Board of Directors, Sd/- Kazi Md. Shafiqur Rahman Managing Director



Corporate directory Registered Office 68 Dilkusha C/A Dhaka-1000 Phone: 7170138 Fax: 880-2-9569762 Auditor Hoda Vasi Chowdhury & Co. Chartered Accountants BTMC Bhaban (8th floor) 7-9 Karwan Bazar C/A Dhaka-1215 Phone: 9120090, 8121114 Fax: 8119298 Legal Advisor Mohsen & Associates (Advocates & Legal Consultants) Modhumita Cinema Building 160 Motijheel C/A (2nd Floor) Dhaka-1000 Dr. Hamid & Associates (Advocates & Legal Consultants) House No. 46 (Ground Floor) Road No. 7, Block-G, Banani Dhaka-1212 Tax Advisor Khandker Fazlul Quadir Advocate House No. 16, Road No. 11, Block-Kha Mohammadpur Housing & Pisciculture Society Ltd. Dhaka-1207 Issue Manager Prime Finance & Investment Limited 63 Dilkusha C/A (3rd Floor) Dhaka-1000 Banker to the rights issue Mutual Trust Bank Limited The City Bank Limited



The Company Mutual Trust Bank Limited Mutual Trust Bank Limited was incorporated in Bangladesh in the year 1999 as a banking company under the Companies Act, 1994. All types of commercial banking services are provided by the bank within the stipulations laid down by the Bank Companies Act, 1991 and directives as received from Bangladesh Bank from time to time. The bank started its commercial business from October 24, 1999. The bank operates through its Head Office at Dhaka and 30 branches. The bank carries out international business through a global network of foreign correspondent banks. Mutual Trust Bank is a member of the SWIFT community.

The bank floated its shares in 2003 to the general public and was subsequently listed with the Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd.

As envisaged in the Memorandum of Association and as licensed by Bangladesh Bank under the provisions of the Banking Companies Act 1991, the Company started its banking operation and entitled to carry out the following types of banking business:

All types of Commercial Banking Activities including Money Market operations. Investment in Merchant Banking Activities. Investment in Company Activities. Financiers, Promoters, Capitalists etc. Financial Intermediary Services. Any related Financial Services.

Share capital Authorized share capital: 38,000,000 ordinary shares of Tk 100 each Tk 3,800,000,000

Issued, Subscribed & Paid up capital: 9,979,200 ordinary shares of Tk 100 each Tk 997,920,000 In the 9th AGM held on 5 June 2008 the shareholders has approved stock dividend @ 25% for the year ended 31 December 2007. After crediting the stock dividend on 10 June 2008, paid up capital of the bank stood at Tk. 1,247,400,000 divided into 12,474,000 number of shares of Tk 100 each. Business activities of the bank The principal activity of the bank is to provide all kind of commercial banking services to its customers. At present the bank is providing commercial, corporate, investment and retail banking related services as follows:

Corporate Finance Correspondence Banking Documentary Credits Foreign Exchange

Guarantees Syndicated Finance Other related Business

Mutual Trust Bank Limited has launched the following financial products and services for its valued clients:

MTB Education Plan MTB Monthly Benefit Plan MTB Millionaire Plan MTB Double Saver Plan MTB Triple Saver Plan MTB Consumer Loan Unique Savings Plan

Best Invest Scheme Brick by Brick Saving Plan Festival Savings Plan Auto Loan Scheme Small Business Loan Scheme Home Loan Scheme Home Repair/Renovation Loan Scheme

The bank is playing a pioneering role among its competitors in providing real time online banking facilities which enables customers to deposit or withdraw any sum of money from any branch anywhere. MTB has already become a member of the SWIFT community and has started its operation from March 2004. With introduction of SWIFT, MTB ensures its customers the quickest and most secured financial transaction around the world.

Mutual Trust Bank maintains a strong network with the Exchange Houses worldwide for ensuring better remittance services for its customers. The bank having a network of 30 branches has established remittance arrangements with a number of exchange houses to facilitate wage earners to remit their money to Bangladesh.



MTB provides a wide range of banking services relating to foreign trade such as Import Letter of Credit, Post Import Financing, Import collection services & Shipping Guarantees, Export Letters of Credit advising, Pre-shipment Export Financing, Export documents negotiation, Letters of Credit confirmation, Inward/ Outward Remittance Services, TT/DD Issue, DD/Cheque collection, Endorsements, Travelers’ Cheque Issuance etc. Utilization of fund raised by Initial Public Offering (IPO) The Company went for Public Offering in the year 2003 to raise fund amounting Tk. 500 million, comprising additional paid-up capital of Tk. 400 million and premium of Tk. 100 million, to enhance their normal lending and investment business. The fund raised through the public offering was fully utilized for meeting the said purpose. The statement of fund utilization is given below: Break-up of utilization of fund (IPO and Pre-IPO Placement)

Sl. No. Particulars Amount in Taka Receipt of fund

1 Sponsor group 100,000,000 2 Pre-IPO placement 200,000,000 3 IPO 100,000,000 4 Share premium 100,000,000 Total 500,000,000

Utilization of fund 1 Investment in Treasury Bill 150,000,000 2 Loans & Advances 350,000,000

Total 500,000,000 Statement of annual general meetings held after IPO Financial Year Date of Annual General

Meeting (AGM) Venue of AGM Time of AGM

2003 May 04,2004 BDR Darbar Hall, BDR Head Quarter, Pilkhana, Dhaka

11:00 AM

2004 May 15,2005 National Shooting Complex, Gulshan 11:00 AM

2005 May 23,2006 Bangladesh -China Friendship Conference Centre, Agargaon, Shere-E-Bangla Nagar, Dhaka

11:00 AM

2006 May 17,2007 Bangladesh -China Friendship Conference Centre, Agargaon, Shere-E-Bangla Nagar, Dhaka

11:00 AM

2007 June 05,2008 Bangladesh -China Friendship Conference Centre, Agargaon, Shere-E-Bangla Nagar, Dhaka

11:00 AM



Board of Directors The following persons comprise the Board of Directors of the bank:

Sl. No.

Name Address Status

1 Mr. Samson H. Chowdhury Nominated by ASTRAS Ltd.

House # 3, UN Road Baridhara Dhaka

Chairman

2 Dr. Arif Dowla Nominated by Advanced Chemical Industries Ltd.

Unique Corner (3rd Floor) House # 38, Road # 63 Gulshan-2, Dhaka

Vice Chairman

3 Mr. Syed Manzur Elahi House # 114/A Road # 115 Gulshan, Dhaka

Director

4 Mr. Hedayetullah House # 11 Road # 110 Gulshan-2, Dhaka

Director

5 Mr. Kh. Rashiduzzaman Nominated by East West Properties Development Ltd.

16 Park Road Apartment No. 301 Baridhara, Dhaka

Director

6 Al-haj Syed Abul Hossain House # 18 Road # 96 Gulshan-2, Dhaka

Director

7 Mr. M. A. Rouf House # 22, Road # 11 Baridhara Dhaka

Director

8 Mr. Md. Abdul Malek House # 4, Road # 1 Block-K, Baridhara Dhaka

Director

9 Mr. Rashed Ahmed Chowdhury Nominated by Associated Builders Corporation Ltd.

House # 24/C Road # 105 Gulshan-2, Dhaka

Director

10 Mrs. Yasmeen Haque 36, Alaul Avenue Sector-6, Uttara Dhaka

Director

11 Mr. A.F.M. Mahfuzul Hasan House # 6, Road # 10 Block-H (3rd Floor) Banani, Dhaka

Director

12 Mr. Md. Wakiluddin House # 7, Road # 10 Block-K, Baridhara Dhaka

Director

13 Mr. Saidur Rahman Ratan Road-2, Flat-B3 Building-8, Nam-Villa Banani, Dhaka

Director

14 Kazi Md. Shafiqur Rahman Mutual Trust Bank Ltd. Head Office 68 Dilkusha C/A, Dhaka

Managing Director



No. of shares held by Sponsors/Directors and shareholders having five percent or more shares Quantity of shares held by the Sponsors/Directors and shareholders having five percent or more as on 19 June 2008, the date of Rights Share Offer Document, is given below:

Shareholding Sl. No.

Name of shareholder

Represented by Position No. of

shares %

1 ASTRAS Ltd. Mr. Samson H. Chowdhury

Chairman

311,850 2.50

2 Advanced Chemical Ind. Ltd. Dr. Arif Dowla

Vice Chairman

415,800 3.33

3 Mr. Syed Manzur Elahi -

Director

426,195 3.42

4 Mr. Hedayetullah -

Director

69,931 0.56

5 East West Properties Dev. Ltd. Mr. Kh. Rashiduzzaman

Director 415,800 3.33

6 Al-haj Syed Abul Hossain -

Director

415,800 3.33

7 Mr. M. A. Rouf -

Director

201,650 1.62

8 Mr. Md. Abdul Malek -

Director

143,812 1.15

9 Associated Builders Corporation Ltd. Mr. Rashed Ahmed Chowdhury

Director

623,700 5.00

*10 Mrs. Yasmeen Haque -

Director

103,950 0.83

*11 Mr. A.F.M. Mahfuzul Hasan -

Director

31,250 0.25

*12 Mr. Md. Wakiluddin -

Director

197,375 1.58

13 Mr. Saidur Rahman Ratan -

Director

98,437 0.79

14 Pioneer Insurance Company Ltd. -

Shareholder 963,475 7.72

*After 19 June 2008, three Directors have transferred partial portion of their shareholdings as gift to their family members after obtaining approval from DSE and declaration to SEC as follows:

Sl. No.

Name of Director No. of shares held on

19/06/2008

No. of shares

transferred

Date of transfer

Transferee No. of shares held on

15/07/20081 Mrs. Yasmeen Haque 103,950 10,000 22/06/2008 Mr. Alimul Hoque

Husband of Mrs. Yasmeen Haque

93,950

2 Mr. A.F.M. Mahfuzul Hasan 31,250 10,000 22/06/2008 Mrs. Anowara Begum Mother of A.F.M. Mahfuzul Hasan

21,250

3 Mr. Md. Wakiluddin 197,375 10,000 22/06/2008 Mrs. Rosina Akter Wife of Mr. Md. Wakiluddin

187,375



Names, addresses, descriptions, occupations of Directors, MD, Managers, Company Secretary

Name Address Position

Mr. Samson H. Chowdhury Nominated by ASTRAS Ltd.

House # 3, UN Road Baridhara Dhaka

Chairman

Dr. Arif Dowla Nominated by Advanced Chemical Ind. Ltd.

Unique Corner (3rd Floor) House # 38, Road # 63 Gulshan-2, Dhaka

Vice Chairman

Mr. Syed Manzur Elahi House # 114/A Road # 115 Gulshan, Dhaka

Director

Mr. Hedayetullah House # 11 Road # 110 Gulshan-2, Dhaka

Director

Mr. Kh. Rashiduzzaman Nominated by East West Properties Dev. Ltd.

16 Park Road Apartment No. 301 Baridhara, Dhaka

Director

Al-haj Syed Abul Hossain House # 18 Road # 96 Gulshan-2, Dhaka

Director

Mr. M. A. Rouf House # 22, Road # 11 Baridhara Dhaka

Director

Mr. Md. Abdul Malek House # 4, Road # 1 Block-K, Baridhara Dhaka

Director

Mr. Rashed Ahmed Chowdhury Nominated by Associated Builders Corporation Ltd.

House # 24/C Road # 105 Gulshan-2, Dhaka

Director

Mrs. Yasmeen Haque 36, Alaul Avenue Sector-6, Uttara Dhaka

Director

Mr. A.F.M. Mahfuzul Hasan House # 6, Road # 10 Block-H (3rd Floor) Banani, Dhaka

Director

Mr. Md. Wakiluddin House # 7, Road # 10 Block-K, Baridhara Dhaka

Director

Mr. Saidur Rahman Ratan Road-2, Flat-B3 Building-8, Nam-Villa Banani, Dhaka

Director

Kazi Md. Shafiqur Rahman Mutual Trust Bank Ltd. Head Office 68 Dilkusha C/A, Dhaka

Managing Director

Mr. Quamrul Islam Chowdhury 68 Dilkusha C/A Dhaka 1000

Deputy Managing Director & Company Secretary

Mr. Zakir Hossain 68 Dilkusha C/A Dhaka 1000

Senior Executive Vice President

Mr. A.K.M. Shameem 68 Dilkusha C/A Dhaka 1000

Executive Vice President

Mr. Md. Nurul Islam 68 Dilkusha C/A Dhaka 1000

Executive Vice President

Name of public listed companies under common management There is no public listed company under common management of Mutual Trust Bank Limited.

Credit Rating Report summary The summary of Credit Rating Report in connection with Rating of Mutual Trust Bank Limited under the Credit Rating Companies Rules, 1996 is given below:

Long Term Short Term Entity Rating A1 ST3 Date of Rating May 29, 2008



Summarized financial statements for the last 5 years Auditor's Report in pursuance of section 135(1) under para 24(1) of Part II of the Third Schedule of the Companies Act 1994 [ As per Securities And Exchange Commission (Rights Issue) Rule ,2006, Rule-8(h)]

We have examined the financial statements of Mutual Trust Bank Limited for the period ended on March 31, 2008 and for the years ended 31 December 2007,2006,2005 audited by us and those for the years ended 31 December 2004 & 2003 audited by M. Ahmed & Co. Chartered Accountants in pursuance of Section 135(I)under para 24(1) of Part II of the Third Schedule of the Companies Act 1994, we report that: 1.The Company was incorporated on September 29, 1999. 2. The statement of assets and liabilities of the Bank is as under : March,08 2007 2006 2005 2004 2003 Property and Assets Taka Taka Taka Taka Taka Taka Cash: 1,453,603,706 2,229,610,768 1,646,850,653 988,720,294 566,560,595 385,894,590 In hand (Including Foreign Currency) 226,498,809 282,768,190 233,425,245 147,594,334 90,403,443 86,976,591 With Bangladesh Bank and its agent Bank (including Foreign Currency) 1,227,104,897 1,946,842,578 1,413,425,408 841,125,960 476,157,152 298,917,999 Balance with other Banks & Financial Institutions : 952,336,023 1,832,356,768 959,529,891 420,567,037 1,280,443,466 1,251,431,987 In Bangladesh 496,217,272 1,439,820,992 783,960,394 255,207,335 771,333,388 1,204,913,868 Outside Bangladesh 456,118,751 392,535,776 175,569,497 165,359,702 509,110,078 46,518,119 Money at Call and Short Notice 60,000,000 - 970,000,000 130,000,000 130,000,000 150,000,000 Investments: 4,091,905,946 3,956,528,943 2,821,618,030 2,495,980,000 1,676,210,300 996,062,900 Government 4,023,665,103 3,896,852,621 2,757,594,256 2,370,760,000 1,540,457,300 906,062,900 Others 68,240,843 59,676,322 64,023,774 125,220,000 135,753,000 90,000,000 Loans and Advances: 22,942,721,784 22,683,227,657 18,591,520,631 14,373,256,533 11,692,971,216 5,904,183,780 Loans, Cash Credit, Overdrafts etc. 20,480,306,435 19,842,731,679 16,356,416,377 12,207,542,738 10,373,540,991 5,404,664,542 Bills Purchased and Discounted 2,462,415,349 2,840,495,978 2,235,104,254 2,165,713,795 1,319,430,225 499,519,238 Fixed Assets including premises,furniture & fixtures 323,277,242 301,871,321 276,186,202 236,559,678 122,050,226 104,926,706 Other Assets 1,031,062,837 1,178,300,763 718,210,820 661,907,024 462,790,594 245,025,517 Non-banking assets - - - - - Total Property and Assets 30,854,907,538 32,181,896,220 25,983,916,227 19,306,990,566 15,931,026,397 9,037,525,480 Liabilities and Capital Borrowings from other Banks, Financial Institutions & agents 300,000,000 3,100,000,000 - - 440,000,000 120,000,000 Deposits and other accounts: 26,468,153,801 24,776,924,968 22,264,045,989 16,098,541,423 13,164,126,381 7,163,674,699 Current Deposits & Other Accounts 4,744,281,690 3,933,377,877 2,804,119,941 1,973,668,293 1,502,558,993 1,142,247,280 Bills Payable 673,008,340 525,372,428 196,727,245 179,504,030 127,765,296 76,889,757



Savings Deposits 2,271,614,534 2,147,296,683 1,439,402,890 914,722,524 597,311,092 365,388,714 Fixed Deposits 16,804,113,306 16,334,144,998 16,519,124,214 12,119,174,327 9,959,718,106 5,133,891,600 Deposit-Products 1,975,135,931 1,836,732,982 1,304,671,699 911,472,249 976,772,894 445,257,348 Other Liabilities 2,006,256,826 2,260,674,080 1,815,066,017 1,660,964,321 1,109,354,933 783,497,914 Total Liabilities 28,774,410,627 30,137,599,048 24,079,112,006 17,759,505,744 14,713,481,314 8,067,172,613 Capital/Shareholders' Equity: Paid up Capital 997,920,000 997,920,000 950,400,000 864,000,000 720,000,000 600,000,000 Share Premium 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 Statutory reserve 603,842,140 590,235,286 511,124,778 336,230,355 211,361,105 121,473,026 Revaluation Gain on Investments in HTM Securities 118,770,834 118,770,834 - - - - General reserve 105,679,443 105,679,443 39,894,467 35,949,019 28,879,841 27,756,580 Retained Earnings 154,284,494 131,691,609 303,384,976 211,305,448 157,304,137 121,123,261 Total Shareholders' Equity 2,080,496,911 2,044,297,172 1,904,804,221 1,547,484,822 1,217,545,083 970,352,867 Total Liabilities and Shareholders' Equity 30,854,907,538 32,181,896,220 25,983,916,227 19,306,990,566 15,931,026,397 9,037,525,480 Off-Balance Sheet items Contingent Liabilities: Letter of Guarantee 2,825,714,382 3,273,141,620 3,044,696,931 2,513,845,074 1,440,183,428 663,978,469 Irrevocable Letter of Credit 5,732,482,600 4,209,198,800 3,882,172,100 2,411,724,750 2,682,222,700 1,988,900,586 Bills for Collection 580,726,514 414,794,688 125,492,382 113,841,418 116,240,834 146,888,384 Other Contingent Liabilities 2,769,806,850 3,019,004,650 2,619,029,500 2,458,861,700 1,235,933,203 1,088,136,697 11,908,730,346 10,916,139,758 9,671,390,913 7,498,272,942 5,474,580,165 3,887,904,136 Other Commitments - - - Documentary credits and short term trade related transactions - - - - - - Forward assets purchased and forward deposits placed - - - - - - Undrawn note issuance and revolving underwriting facilities - - - - - - Undrawn formal standby facilities, credit lines and other commitments - - - - - - Claim against the bank not acknowledged as debt - - - - - - Litigation pending against Bank - - - - - - Other memorandum items - - - Value of Travellers' cheque on hand - - - - - - Value of Bangladesh Sanchoy Patra on hand - - - - - - Total Off Balance Sheet Items including contingent liabilities 11,908,730,346 10,916,139,758 9,671,390,913 7,498,272,942 5,474,580,165 3,887,904,136



3. The statement of operating results of the bank is as under:

March,08 2007 2006 2005 2004 2003 Particulars Taka Taka Taka Taka Taka Taka Interest Income 702,352,147 2,846,923,194 2,340,970,021 1,688,878,029 1,139,965,199 723,090,315 Less: Interest Paid on Deposits & Borrowings etc. 590,008,787 2,292,357,531 1,708,636,136 1,258,704,712 820,685,501 477,708,627 Net Interest Income 112,343,360 554,565,663 632,333,885 430,173,317 319,279,698 245,381,688 Income from Investments 95,836,158 162,414,761 184,398,535 139,970,967 86,631,233 56,136,569 Commission, Exchange & Brokerage 124,865,977 384,923,249 401,448,414 271,401,289 257,432,248 173,531,553 Other operating Income 18,506,934 86,433,422 66,684,925 35,467,093 22,656,896 14,104,131 239,209,069 633,771,432 652,531,874 446,839,349 366,720,377 243,772,253 Total Operating Income 351,552,429 1,188,337,095 1,284,865,759 877,012,666 686,000,075 489,153,941 Less: Operating Expenditure: Salary & Allowances 49,749,490 200,707,950 158,532,358 102,675,527 76,466,714 52,005,347 Managing Director's Remuneration 1,050,000 3,600,000 2,400,000 2,400,000 2,350,000 1,800,000 Directors' fees 136,000 620,000 425,000 382,500 437,500 472,500 Rent, Tax, Insurance, Electricity etc. 14,308,341 55,774,763 40,192,847 28,974,686 23,202,486 16,801,661 Legal Expenses 213,775 1,803,966 525,939 205,010 268,222 169,244 Postage, Stamps, Telegram & Telephone 6,456,075 17,467,763 12,665,039 8,739,014 7,394,982 4,640,161 Audit Fee 100,000 100,000 60,000 40,000 40,000 25,000 Printing, Stationery, Advertisement etc. 5,763,808 16,486,886 13,126,422 14,369,739 9,968,284 10,236,793 Depreciation on & repairs to Bank's property 10,301,577 36,830,497 28,336,491 21,822,952 20,500,163 11,694,547 Other Expenditures 31,289,882 91,092,730 59,129,548 45,556,988 38,431,331 20,242,228 Total Operating Expenditure 119,368,948 424,484,555 315,393,644 225,166,416 179,059,682 118,087,481 Profit Before Provision 232,183,481 763,852,540 969,472,115 651,846,250 506,940,393 371,066,460 Less: Provision against Loans & Advances including Off Balance Sheet Items 161,620,077 368,300,000 95,000,000 27,500,000 57,500,000 25,000,000 Less: Provision against Merchant Banking in shares 2,529,133 - - - - - Provision against Other assets - - - - - - 164,149,210 368,300,000 95,000,000 27,500,000 57,500,000 25,000,000 Profit Before Tax 68,034,271 395,552,540 874,472,115 624,346,250 449,440,393 346,066,460 Less: Provision for Tax 31,834,532 184,750,423 396,192,716 288,171,552 202,248,177 155,729,907 Current tax 31,834,532 187,264,238 393,512,452 287,578,298 202,248,177 155,729,907 Deferred Tax - (2,513,815) 2,680,264 593,254 - - Net Profit After Tax 36,199,739 210,802,117 478,279,399 336,174,698 247,192,216 190,336,553 Retained Surplus brought forward 131,691,609 303,384,976 211,305,448 157,304,137 121,123,261 65,427,321 167,891,348 514,187,093 689,584,847 493,478,835 368,315,477 255,763,874 Appropriations: Bonus Share Issued during the year - 47,520,000 86,400,000 144,000,000 120,000,000 40,000,000 Cash dividend paid during the year - 190,080,000 120,960,000 - - - Transferred to General Reserve - 65,784,976 3,945,448 13,304,137 1,123,261 25,427,321 Statutory Reserve 13,606,854 79,110,508 174,894,423 124,869,250 89,888,079 69,213,292 13,606,854 382,495,484 386,199,871 282,173,387 211,011,340 134,640,613 Retained Surplus, Carried forward 154,284,494 131,691,609 303,384,976 211,305,448 157,304,137 121,123,261 Earnings per Share 14.51 21.12 47.93 35.37 28.61 43.37



4. Comparative Cash Flow Statement of the Bank as under:

March,08 2007 2006 2005 2004 2003 Taka Taka Taka Taka Taka Taka A) Cash flow from operating activities: Interest received 797,188,305 3,005,694,755 2,522,608,556 1,826,548,996 1,225,096,432 778,226,884 Interest paid on deposits & borrowings etc. (590,008,787) (2,292,357,531) (1,708,636,136) (1,258,704,712) (820,685,501) (477,708,627) Dividend income 1,000,000 1,987,200 - - - 1,000,000 Fees & commission income 69,772,332 218,908,089 227,704,662 141,444,412 114,096,858 77,028,432 Cash paid to employees as salaries and allowances (50,799,490) (204,307,950) (160,932,358) (102,675,527) (76,466,714) (52,005,347) Advance income tax paid (57,752,331) (408,387,511) (319,343,714) (257,318,395) (154,455,984) (103,713,245) Cash received from other operational income 62,116,986 240,241,517 239,746,777 155,322,872 152,601,313 101,105,343 Cash paid for other operational expenses (59,334,469) (188,219,258) (129,114,077) (102,307,760) (83,425,456) (55,487,899) Cash flow from operating activities before changes in net current assets 172,182,546 373,559,311 672,033,710 402,309,886 356,760,948 268,445,541 Changes in net current assets : Investments in Treasury bills 661,130,124 293,269,267 (620,000,000) (830,000,000) (635,000,000) (310,000,000) Investment in treasury bond (787,483,648) (1,313,514,398) - - - - Loans & Advances (259,494,127) (4,091,707,026) (4,218,282,020) (2,680,285,317) (5,788,787,436) (2,467,054,876) Other Assets 204,990,257 (51,702,432) (206,690,514) 58,201,965 (63,309,093) 5,485,251 Customers' Deposits 1,641,228,833 2,122,881,479 6,265,504,566 (1,300,000,000) 5,370,451,682 2,305,568,148 Bank Deposits 50,000,000 389,997,500 (100,000,000) 4,234,415,042 630,000,000 (300,000,000) Borrowings from other banks, financial institutions & agents (2,800,000,000) 3,100,000,000

- (440,000,000) 320,000,000 120,000,000

Other liabilities (445,342,730) (107,442,360) 366,726,704 229,702,877 66,108,842 248,789,972 (1,734,971,291) 341,782,030 1,487,258,736 (727,965,433) (100,536,005) (397,211,505) Net Cash flow from operating activities (1,562,788,745) 715,341,341 2,159,292,446 (325,655,547) 256,224,943 (128,765,964) B) Cash flow from investing activities: Investments in Shares & bonds (13,894,745) 6,003,452 63,202,000 12,833,000 (44,253,000) (55,000,000) Purchase of Premises & Fixed assets ( net) (30,640,910) (57,642,466) (64,973,733) (134,692,581) (36,291,032) (69,887,620) Net cash flow from investing activities (44,535,655) (51,639,014) (1,771,733) (121,859,581) (80,544,032) (124,887,620) C) Cash flow from financing activities: Paid up Capital - - - - - 400,000,000 Share Premium - - - - - 100,000,000 Dividend paid - (190,080,000) (120,960,000) - - (40,000,000) Net cash flow from financing activities - (190,080,000) (120,960,000) - - 460,000,000 D) Net increase in cash and cash equivalents (1,607,324,400) 473,622,327 2,036,560,713 (447,515,128) 175,680,911 206,346,416 E) Effect of changes of Exchange rates oncash and cash equivalents 11,483,593 12,207,065

681,900 10,101,098

13,390,973

9,501,909

F) Opening cash and cash equivalents 4,063,119,336 3,577,289,944 1,540,047,331 1,977,461,361 1,788,389,477 1,572,541,152 Closing cash and cash equivalents (D+E+F) 2,467,278,529 4,063,119,336 3,577,289,944 1,540,047,331 1,977,461,361 1,788,389,477 The above closing cash and cash equivalents include: Cash in hand 226,498,809 282,768,190 233,425,245 147,594,334 90,403,443 86,976,591 Balance with Bangladesh Bank and its agent bank 1,227,104,897 1,946,842,578 1,413,425,408 841,125,960 476,157,152 298,917,999 Balance with other Banks & Financial Institutions 952,336,023 1,832,356,768 959,529,891 420,567,037 1,280,443,466 1,251,431,987 Money at Call and Short Notice 60,000,000 - 970,000,000 130,000,000 130,000,000 150,000,000 Prize bonds 1,338,800 1,151,800 909,400 760,000 457,300 1,062,900 2,467,278,529 4,063,119,336 3,577,289,944 1,540,047,331 1,977,461,361 1,788,389,477

5. The company declared dividend as follows : Declared Dividend

Financial year Type of dividend

Date of Declaration

Rate Total Amount

Total cash Dividend Paid

2007 Bonus 19.04.2008 25% 249,480,000 - Cash 20% 190,080,000 190,080,000

2006 Bonus

22.03.2007 5% 47,520,000 -

Cash 14% 120,960,000 120,960,000

2005 Bonus

23.03.2006 10% 86,400,000 -

2004 Bonus 10.03.2005 20% 144,000,000 - 2003 Bonus 04.04.2004 20% 120,000,000 -

Previous year's figures have been rearranged, where necessary ,to conform to current period's presentation For Howladar Yunus & Co. Dated: Dhaka Chartered Accountants June 04, 2008 Sd/- Neaz Muhammad FCA Partner



Risk factors and management perception about risk Risk is inherent in all the core business areas of a bank. Managing risks properly is one of the main pillars of banking business. To ensure sustainable growth and performance, proper and sound risk management practice is of vital importance. As a commercial bank Mutual Trust Bank (MTB) attaches full importance to manage the risk involved in its business.

The shareholders should carefully consider the following risks in addition to the information contained in the Rights Offer Document for evaluating the offer. 1. Credit Risk

Credit risk is the possibility that a borrower or counter party will fail to meet its obligations in accordance with agreed terms. The failure may result from unwillingness of the counter party or decline in his/her financial condition. Credit risk, therefore, arises from the bank’s dealing with or lending to corporate, individuals, other banks or financial institutions.

Management perception about the risk:

A separate Credit Division has been formed at Head Office since the inception of the bank, which is assigned with the duties of marketing and assessment of credit products, maintaining effective relationship with the customer and exploring new business opportunities. In line with Bangladesh Bank guidelines the bank has segregated marketing, approval and monitoring/recovery functions.

The credit risk management includes borrower risk analysis, financial statement analysis, industrial analysis, historical performance of the customer, security of the proposed credit facility and market reputation of the borrower etc. MTB takes its lending decision based on the credit risk assessment report by Appraisal Team. In determining Single Borrowing/Large Loan limit, the instructions of Bangladesh Bank are strictly followed.

2. Foreign Exchange Risk

Foreign Exchange Risk is defined as the potential change in earnings arising due to change in market prices. The market directly affects each country’s bond, equities, private property, manufacturing and all assets that are available to foreign investors. Foreign exchange rates also play a major role in determining who finances government deficits, who buys equities in companies and literally affects and influences the economic scenario. Due to high risk market the role of treasury operations is crucial.


As per Bangladesh Bank’s guidelines the bank has segregated the Front and Back office for Treasury Operations. Front Office independently conducts the transactions and the Back Office is responsible for verification of the deals and passing of their entries in books of accounts. All Nostro accounts are reconciled on monthly basis and all foreign exchange transactions are revalued at Mark-to-Market rate as determined by Bangladesh Bank.

3. Internal Control and Compliance Risk

Internal Control and Compliance (ICC) is a critical component of Bank management and foundation for the safe and sound operation of banking organization. A system of strong internal control and compliance can help to ensure that the goals and objectives of a banking organization will be met, that the bank will achieve long-term profitability targets, and maintain reliable financial and managerial reporting. Operational loss may arise from error and fraud due to lack of strong internal control and compliance culture. Effective Internal Control & Compliance system can help to ensure that the bank will comply with laws and regulations as well policies, plans, internal rules and procedures, and decrease the risk of unexpected losses or damage to the bank’s reputation.


To manage internal control and compliance risk the bank has formed an ICC Division headed by Senior Executive. The ICC Division has been segregated to three departments, which are Audit & Inspection Dept, compliance Dept and Monitoring Dept. The Bank has also developed an Internal Control & Compliance Policy duly approved by the Board of Directors. To ensure effective control DCFCL, Loan Documentation Check list and Quarterly Operations Report have been developed and implemented. The Audit and Inspection Team undertakes periodic and special audit. The Audit Committee of the Board of Directors plays an effective role in providing bridge between the board and management. The committee reviews the financial reporting process, the system of internal control, the audit process and the bank’s process for compliance with laws, regulations and code of conduct.



4. Risks related to downgrading

In the event that a rating agency downgrades the Bank's rating, the downgrade could adversely affect the Bank's ability to procure capital and operating funds etc. and certain transactions may no longer be possible.

If the above situation were to occur, the Bank's profitability in market transactions and other operations could decrease, possibly having an adverse effect on Bank performance or financial condition.


Management of MTB is providing their sincere attention and effort to maintain their credit rating at a higher level and is confident that chance of trouble arising due to downgrading is very low.

5. Risk related to regulatory changes

The bank complies with applicable laws, regulations, government policies and business convention and interpretations in its operations. Changes to these regulations and the effects of these changes could have an adverse effect of the bank's operations and performance, although it is difficult to predict the type or degree of such effects in advance.


This risk is absolutely external to MTB and could affect any bank or financial institution operating within the country. The management of MTB always monitors national and global policies which may affect the bank's business. In case of any regulatory change the management may adjust company's business strategy accordingly.



The Rights Offer

Highlights of rights offer Mutual Trust Bank Limited is offering 2,494,800 shares of Tk 100 each at par totaling Tk 249,480,000 for subscription in full to its shareholders whose names appear in the Shareholder’s Register at the close of business on 2 September 2008 at the ratio of 1:5 i.e. one rights share against five shares held by the shareholder. As per decision of the Extra Ordinary General Meeting dated 5 June 2008 the rights share is being offered at Tk 100 each at par. Underwriting The rights issue is fully underwritten by the following underwriter:

Name of Underwriter Address No. of shares underwritten

Prime Finance & Investment Limited 63 Dilkusha C.A., Dhaka 1000 2,494,800

Purpose of the rights issue Mutual Trust Bank Limited offers rights shares to raise fund to strengthen its capital base and for future growth. Justification of the Issue price of rights share The rights issue price of Tk. 100 each at par is justified as per the guidelines of the Securities and Exchange Commission (SEC) as detailed below: Net Assets Value per share

As on 31 March 2008, the Net Assets Value per share stands at Tk 166.79. Thus the offer price of Tk 100.00 each at par turns out to be less than the existing Net Assets Value. The calculation of net assets value per share is given below: Particulars March 2008

Amount in Taka1 Cash 1,453,603,7062 Balance with other Banks & Financial Institutions 952,336,0233 Money at call and short notice 60,000,0004 Investments 4,091,905,9465 Loans and advances 22,942,721,7846 Fixed assets including premises, furniture & fixtures 323,277,2427 Other assets 1,031,062,837A. Total Assets 30,854,907,5381 Borrowings from other Bank, Financial Institutions and agents 300,000,0002 Deposits and other accounts 26,468,153,8013 Other liabilities 2,006,256,826B. Total Liabilities 28,774,410,627C. Net Assets (A–B) 2,080,496,911D. Number of Shares 12,474,000E. Net Assets Value per Share (C/D) 166.79 From the above analysis, it appears that the offer price of Tk 100.00 each at par fixed by the Company is quite justified and reasonable and also attractive to the shareholders. Condition of subscription One rights share of Tk 100 each at par is offered against five ordinary shares held by the existing shareholder(s) whose name appeared in the shareholders’ register at the close of business on 2 September 2008.



Acceptance of rights shares For acceptance of right share, the Application Form-A annexed hereto shall be duly completed and the share price of Tk. 100 per share to be deposited. Rights can be exercised against all or part of the share(s) held by the applicant. Renunciation A shareholder may renounce all or part of the share(s) he/she is entitled to in favour of any other person(s) other than an infant or person of unsound mind. He/she can renounce his/her rights /entitlement of shares by signing Renunciation Form-B. Renouncee(s) shall fill in Renunciation Form-C appropriately. Payment of share price Payment for the value of shares applied shall be deposited with any of the designated branches of the bankers to the issue by cash or by way of pay order /draft/cheque payable to “Mutual Trust Bank Limited” and crossed “A/C Payee Only”. The pay order/draft/cheque for payment of share price must be drawn on a bank in the same town where the branch of bankers to the issue to which the application form has been submitted is situated. Period of subscription Opens on : 21 September 2008 Closes on : 19 October 2008 Extension of subscription period, if any, will be notified through national dailies. Directors’ take-up in the rights offer Directors are willing to exercise in full their portion of rights offer. Numbers of shares to be subscribed by the directors are as under:

Sl. No.

Name Status Represented by No. of shares held

No. of shares to be subscribed

1 ASTRAS Ltd. Chairman Mr. Samson H. Chowdhury 311,850 62,3702 Advanced Chemical Ind. Ltd. Vice Chairman Dr. Arif Dowla 415,800 83,1603 Mr. Syed Manzur Elahi Director - 426,195 85,2394 Mr. Hedayetullah Director - 69,931.25 13,9865 East West Properties Dev. Ltd. Director Mr. Kh. Rashiduzzaman 415,800 83,1606 Al-haj Syed Abul Hossain Director - 415,800 83,1607 Mr. M. A. Rouf Director - 201,650 40,3308 Mr. Md. Abdul Malek Director - 143,812.50 28,7629 Associated Builders Corporation Ltd. Director Mr. Rashed Ahmed Chowdhury 623,700 124,74010 Mrs. Yasmeen Haque Director - 93,950 18,79011 Mr. A.F.M. Mahfuzul Hasan Director - 21,250 4,25012 Mr. Md. Wakiluddin Director - 187,375 37,47513 Mr. Saidur Rahman Ratan Director - 98,437.50 19,687

Lock-in on rights shares of Directors’ and other shareholders holding 5% or more shares The rights share of directors and other shareholders holding 5% or more shares shall be subject to lock-in for a period of three years from the date of closure of the rights share subscription. In the event of renunciation of rights share by aforesaid persons, the renounced shares shall also be subject to lock-in for the same period. Distribution of rights shares Rights shares will be delivered to the shareholders' Beneficiary Owner (BO) accounts within 60 (sixty) days from the closing date of the offer. An applicant must apply for allotment of rights shares mentioning his/her BO Account number in the application form.



Particulars of material contract Mutual Trust Bank Limited does not have any agreement with vendors or any contract for acquisition of property, plant and equipments. MTB has entered into agreements with Issue Manager, Underwriters and Banker to the Issue for the Rights Issue. Particulars along with the terms and conditions of the contracts are given below: Issue Manager

Prime Finance & Investment Limited 63 Dilkusha C.A. Dhaka 1000 Significant clauses of issue management agreement are as follows:

• Scope of services The scope of the services to be rendered by the Issue Manager to the Issuer under this agreement shall be as detailed hereunder:

Preparation Rights Offer Document • Preparation of financial projection for next 3 (three) years • Incorporation of statutory information along with Audited Accounts and Credit Rating Report • Drafting of Offer Document

Regulatory compliance • Preparation of all necessary papers and deeds for submission to the SEC for making the

RIGHTS ISSUE effective • Filing of offer document to the SEC • Incorporation of modification suggested by the SEC • Obtaining approval from the SEC within the stipulated time

Underwriting • Preparation of Company brief for the Underwriters • Documentation/preparation of underwriting agreement etc.,

Subscription • Selection of Banker to the Issue in consultation with the Issuer • Supervising the distribution of offer documents to the shareholders

Listing • Filing of application for listing with Stock Exchange(s) where it is already listed. The Issue

Manager will also coordinate the post issue work as required by the Issuer. Notwithstanding the above, if any other services required but not listed here in above to effect RIGHTS ISSUE shall be performed by the same.

• Fees The Issuer commits to pay the Issue Manager a rights issue management fee @ 0.05% on the size of Rights Issue.

Underwriter

Sl. No. Name of Underwriter Address 1 Prime Finance & Investment Limited 63 Dilkusha C.A., Dhaka 1000

Significant clauses of the underwriting agreement are as follows:

• The underwriter shall underwrite the total amount of rights offering of 2,494,800 ordinary shares of Tk. 100 each at par.

• The underwriter shall be liable for making payment for the unsubscribed portion of the rights issue within fifteen days from receiving letter from the issuer for such payment.

• The liability of the underwriters shall be in proportion to but not exceeding the shares agreed to be underwritten.

• Company shall within 10 (ten) days of the closure of subscription call upon the underwriter to take-up the unsubscribed shares.

• Underwriter should pay for in cash in full for such unsubscribed shares within 15 (fifteen) days after being called upon to do so.

• The Company shall pay the underwriter an underwriting commission at the rate of 0.05% of the value at issue price of the shares underwritten by them.



Banker to the issue

Mutual Trust Bank Limited and The City Bank Limited has accorded their consent to act as the Banker to the Issue and will receive the subscription amount of rights share in cash/cheque/pay order/draft, etc. through their designated branches as mentioned below: Mutual Trust Bank Limited Principal Branch, Dhaka Panthapath Branch, Dhaka Babu Bazar Branch, Dhaka Uttara Model Town Branch, Dhaka Progati Sarani Branch, Dhaka Mograpara Branch, Narayangonj Sreenagar Branch, Munshigonj Pallabi Branch, Dhaka Dilkusha Branch, Dhaka Dhanmondi Branch, Dhaka Bashundhara City Branch, Dhaka Chandra Branch, Gazipur Gulshan Branch, Dhaka Savar Branch, Dhaka Fulbaria Branch, Dhaka Madaripur Branch, Madaripur Dholaikhal Branch, Dhaka Aganagar Branch, Dhaka Agrabad Branch, Chittagong CDA Avenue Branch, Chittagong Khatunganj Branch, Chittagong Aman Bazar Branch, Chittagong Chakoria Branch, Cox’s Bazar Nazirhat Branch, Chittagong Jubilee Road Branch, Chittagong Raipur Branch, Laxmipur Sylhet Branch, Sylhet Moulvi Bazar Branch, Moulvi Bazar Pabna Branch, Pabna Joypurhat Branch, Joypurhat

The City Bank Limited Principal Office, Dhaka B B Avenue Br, Dhaka Dhaka Chamber Br, Dhaka Dhanmondi Br, Dhaka Foreign Exchange Br, Dhaka Gulshan Br, Dhaka Imamgonj Br, Dhaka Islami Banking Br, Dhaka Johnson Road Br, Dhaka Kawran Bazar Br, Dhaka Mirpur Br, Dhaka Mouchak Br, Dhaka New Market Br, Dhaka Shymoli Br, Dhaka Uttara Br, Dhaka VIP Road Br, Dhaka DSE Nikunja Br, Dhaka Tongi Br, Gazipur Tanbazar Br, Narayangonj Comilla Br, Comilla Agrabad Br, Chittagong Jubilee Road Br, Chittagong Khatungonj Br, Chittagong O R Nizam Road Br, Chittagong Bandar Bazar Br, Sylhet Zinda Bazar Br, Sylhet Bogra Br, Bogra Rajshahi Br, Rajshahi Barisal Br, Barisal Khulna Br, Khulna

Commission of Banker to the issue

The City Bank Limited will get a commission @ 0.10% on the total amount to be collected by them. Others The application not properly filled in shall be treated as cancelled and money deposited will be refunded. No profit/compensation will be paid on the refund amount in any circumstances. Rectification If the Securities and Exchange Commission raises any objection in any point/matter of the rights share offer document or require any paper/document, the same shall be rectified/made/provided by the issuer as per directives of the SEC prior to opening of subscription of the rights issue.



Audited Financial Statements as on 31 March 2008

Auditors’ Report to the Shareholders of Mutual Trust Bank Limited

We have audited the accompanying Balance Sheet of the Mutual Trust Bank Limited asof March 31, 2008 and the related Profit and Loss Account, the statement of Cash Flowsand Changes in Equity for the period then ended. The preparation of the financialstatements is the responsibility of the bank’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit. Scope:

Excepts as discussed in the following paragraphs, we conducted our audit in accordancewith Bangladesh Standards on Auditing (BSA). Those Standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for our opinion. We observe that: 1. There exist stuck up loans and advances aggregating to BDT 1,000,332,274/- against

M/S. Nurun Nobi and its related parties of Khatungonj branch. The said loans andadvances have not been classified by the bank as there is a stay order dated 28-11-2007from the honorable High Court Division of Bangladesh Supreme Court. As on April17, 2008 Taka 200,000,000/- has been recovered against the above outstanding.

2. There is a shortfall of BDT 178,265,000/- in specific provision required for classifiedadvances. There is an excess provision of BDT 87,442,000/- in general provision.

3. Income tax in respect of the year 2007 and subsequent period under audit has been

provided for without considering income tax on inadmissible provision for classifiedadvances though required under Income Tax Ordinance 1984.

4. During the period under audit the management of MTBL has not made provision

against deferred tax liability/deferred tax assets in the financial statements inaccordance with Bangladesh Accounting Standard (BAS)-12, “Income Taxes”.

5. The bank has a gratuity scheme, which covers all of its permanent employees. The

company has not made provision for gratuity during the period in compliance withBangladesh Accounting Standard (BAS) 19 “Employee Benefits”.

242,107,000/-



6. Direct confirmations against the balances held with Bangladesh Bank and the balances

with other Banks and financial institutions aggregating to BDT 2,117,807,932/- havenot been received by us although request letter have been sent to all of them.

In our opinion, except for the effect on the financial statements of the matter referred to inthe preceding paragraphs, the financial statements, prepared in accordance withBangladesh Accounting Standards except BAS 19 and BAS 12, give a true and fair view ofthe state of the company’s affairs as of March 31, 2008 and of the results of its operationsand it’s cash flows for the period then ended and comply with the applicable sections ofBank Company Act 1991, the rules and regulations issued by the Bangladesh Bank, theCompanies Act 1994, the Securities and Exchange Rules 1987 and other applicable lawsand regulations. We also report that:

(1) we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit and madedue verification thereof;

(2) 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 properreturns adequate for the purposes of our audit have been received frombranches not visited by us.

(3) the company’s balance sheet and profit and loss account dealt with by the

report are in agreement with the books of account and returns,

(4) the expenditure incurred was for the purposes of the company’s business;

(5) the financial position of the bank at March 31, 2008 and the profit for theperiod then ended have been properly reflected in the financial statements;the financial statements have been prepared in accordance with the generallyaccepted accounting principles;

(6) the financial statements have been drawn up in conformity with the Bank

Company Act 1991 and in accordance with the accounting rules andregulations issued by the Bangladesh Bank;

(7) Adequate provisions have been made for advances which are in our opinion,

doubtful of recovery.

(8) the financial statements conform to the prescribed standards set in theaccounting regulations issued by the Bangladesh Bank after consultation withthe professional accounting bodies of Bangladesh;



(9) the records and statements submitted by the branches have been properly

maintained and consolidated in the financial statements; (10) The information and explanations required by us have been received and found

satisfactory. HOWLADAR YUNUS & CO. Dhaka, Bangladesh Chartered Accountants. Dated: June 4, 2008

Sd/-



March December2008 2007

Property and Assets Notes Taka Taka

Cash: 1,453,603,706 2,229,610,768 In hand (Including Foreign Currency) 3.00 226,498,809 282,768,190

4.00 1,227,104,897 1,946,842,578

5.00 952,336,023 1,832,356,768 In Bangladesh 496,217,272 1,439,820,992 Outside Bangladesh 456,118,751 392,535,776

Money at Call and Short Notice 6.00 60,000,000 -

Investments: 7.00 4,091,905,946 3,956,528,943 Government 4,023,665,103 3,896,852,621 Others 68,240,843 59,676,322

Loans and Advances: 8.00 22,942,721,784 22,683,227,657 Loans, Cash Credit, Overdrafts etc. 20,480,306,435 19,842,731,679 Bills Purchased and Discounted 2,462,415,349 2,840,495,978

9.00 323,277,242 301,871,321

Other Assets 10.00 1,031,062,837 1,178,300,763 Non-banking assets - - Total Property and Assets 30,854,907,538 32,181,896,220

Liabilities and Capital -

11.00 300,000,000 3,100,000,000

Deposits and other accounts: 12.00 26,468,153,801 24,776,924,968 Current Deposits & Other Accounts 4,744,281,690 3,933,377,877 Bills Payable 673,008,340 525,372,428 Savings Deposits 2,271,614,534 2,147,296,683 Fixed Deposits 16,804,113,306 16,334,144,998 Deposit-Products 1,975,135,931 1,836,732,982

Other Liabilities 13.00 2,006,256,826 2,260,674,080 Total Liabilities 28,774,410,627 30,137,599,048 Capital/Shareholders' Equity:Paid up Capital 14.00 997,920,000 997,920,000 Share Premium 15.00 100,000,000 100,000,000 Statutory reserve 16.00 603,842,140 590,235,286 Revaluation Gain on Investments in HTM Securities 118,770,834 118,770,834 General reserve 17.00 105,679,443 105,679,443 Retained Earnings 18.00 154,284,494 131,691,609 Total Shareholders' Equity 2,080,496,911 2,044,297,172 Total Liabilities and Shareholders' Equity 30,854,907,538 32,181,896,220

Borrowings from other Banks, Financial Institutions & agents

Fixed Assets including premises,furniture & fixtures

Balance with other Banks & Financial Institutions :

Mutual Trust Bank LimitedBalance Sheet

As at March 31, 2008

With Bangladesh Bank and its agent Bank (includingForeign Currency)



Off-Balance Sheet itemsContingent Liabilities: 19.00 Letter of Guarantee 2,825,714,382 3,273,141,620 Irrevocable Letter of Credit 5,732,482,600 4,209,198,800 Bills for Collection 580,726,514 414,794,688 Other Contingent Liabilities 2,769,806,850 3,019,004,650

11,908,730,346 10,916,139,758 Other Commitments - -

- -

- -

- -

- - Claim against the bank not acknowledge as debt - - Litigation pending against Bank - -

Other memorandum items - - Value of Travellers' cheque on hand - - Value of Bangladesh Sanchoy Patra on hand - -

11,908,730,346 10,916,139,758

HOWLADAR YUNUS & CO. Dated: Dhaka Chartered Accountants June 4, 2008

Forward assets purchased and forward depositsplacedUndrawn note issuance and revolving underwritingfacilitiesUndrawn formal standby facilities, credit lines andother commitments

Total Off Balance Sheet Items includingcontingent liabilities

Samson H Chowdhury Dr. Arif Dowla Syed Manzur Elahi Kazi Md. Shafiqur Rahman Chairman Vice Chairman Director Managing Director

Signed as per annexed report on even date

The annexed notes form an integral part of these accounts

Documentary credits and short term trade relatedtransactions

Sd/- Sd/- Sd/- Sd/-

Sd/-



March March2008 2007

Particulars Notes Taka Taka

Interest Income 20.00 702,352,147 692,946,005 22.00 590,008,787 557,207,802

Net Interest Income 112,343,360 135,738,203

Income from Investments 23.00 95,836,158 59,450,195 Commission, Exchange & Brokerage 24.00 124,865,977 76,996,119 Other operating Income 25.00 18,506,934 12,546,312

239,209,069 148,992,626 Total Operating Income 351,552,429 284,730,829

Less: Operating Expenditure:Salary & Allowances 26.00 49,749,490 34,135,361 Managing Director's Remuneration 1,050,000 600,000 Directors' fees 27.00 136,000 216,000 Rent, Tax, Insurance, Electricity etc. 28.00 14,308,341 9,867,532 Legal Expenses 213,775 801,075Postage, Stamps, Telegram & Telephone 29.00 6,456,075 3,903,330 Audit Fee 100,000 - Printing, Stationery, Advertisement etc. 30.00 5,763,808 2,593,368

31.00 10,301,577 7,629,397 Other Expenditures 32.00 31,289,882 17,305,836 Total Operating Expenditure 119,368,948 77,051,899 Profit Before Provision 232,183,481 207,678,930

33.00 161,620,077 60,000,000

Less.Provision against merchant banking in shares 2,529,133 - Less.Provision against Other assets - -

164,149,210 60,000,000 Profit Before Tax 68,034,271 147,678,930

Less: Provision for Tax 34.00 31,834,532 66,460,000

Net Profit After Tax 36,199,739 81,218,930

Retained Surplus brought forward 131,691,609 303,384,976 167,891,348 384,603,906

Less: Provision against Loans & Advances including Off Balance Sheet Items

Mutual Trust Bank LimitedProfit and Loss Account

For the period ended March 31, 2008

Depreciation on & repairs to Bank's property

Less: Interest Paid on Deposits & Borrowings etc.



Appropriations:Proposed bonus Share - 47,520,000Proposed cash dividend - 190,080,000Transferred to General Reserve - - Statutory Reserve 13,606,854 -

13,606,854 237,600,000Retained Surplus, Carried forward 154,284,494 147,003,906

Earnings per Share 35.00 14.51 34.18





Sd/- Sd/- Sd/- Sd/-

Sd/-




Note Taka TakaA) Cash flow from operating activities:Interest received 797,188,305 752,396,200Interest paid on deposits & borrowings etc. (590,008,787) (557,207,802)Dividend income 1,000,000 - Fees & commission income 69,772,332 45,958,345Cash paid to employees as salaries and allowances (50,799,490) (34,735,361)Advance income tax paid (57,752,331) (88,982,516)Cash received from other operational income 36.00 62,116,986 34,682,451Cash paid for other operational expenses 37.00 (59,334,469) (35,228,638)

172,182,546 116,882,679

Changes in net current assets :Investments in Treasury bills 661,130,124 (600,000,000) Investment in treasury bond (787,483,648) - Loans & Advances (259,494,127) 380,557,600Other Assets 10.00 204,990,257 (271,669,474)Customers' Deposits 1,641,228,833 1,182,939,401Bank Deposits 50,000,000 (100,000,000)

11.00 (2,800,000,000) - Other liabilities 13.00 (445,342,730) 25,434,085

(1,734,971,291) 617,261,612Net Cash flow from operating activities (1,562,788,745) 734,144,291B) Cash flow from investing activities:Investments in Shares & bonds (13,894,745) 15,108,000Purchase of Premises & Fixed assets ( net ) (30,640,910) (17,828,418)Net cash flow from investing activities (44,535,655) (2,720,418)C) Cash flow from financing activities:Dividend paid - - Net cash flow from financing activities - - D) Net increase in cash and cash equivalents (1,607,324,400) 731,423,873

11,483,593 8,901,635F) Opening cash and cash equivalents 4,063,119,336 3,577,289,944

2,467,278,529 4,317,615,452The above closing cash and cash equivalents include:Cash in hand 226,498,809 187,152,789Balance with Bangladesh Bank and its agent bank 1,227,104,897 1,647,930,690Balance with other Banks & Financial Institutions 952,336,023 1,911,903,773 Money at Call and Short Notice 60,000,000 570,000,000 Prize bonds 1,338,800 628,200

2,467,278,529 4,317,615,452



E) Effect of changes of Exchange rates on cash and cashequivalents


Mutual Trust Bank LimitedCash Flows Statement



Closing cash and cash equivalents (D+E+F)

Cash flow from operating activities before changes in net current assets

Borrowings from other banks, financial institutions & agents

Sd/- Sd/- Sd/- Sd/-

Sd/-



Particulars Paid up Capital

Share premium

Statutory Reserve

General Reserve

Revaluation Surplus on

Investments

Profit & Loss Account Total

Taka Taka Taka Taka Taka Taka Taka

Balance as on 01 January 2008 997,920,000 100,000,000 590,235,286 105,679,443 118,770,834 131,691,609 2,044,297,172Bonus share issued during the period - - - - - - - Cash dividend paid during the period - - - - - - - Transferred to General Reserve - - - - - - Revaluation gain during the period - - - - - -

Net profit for the period after tax - - - - - 36,199,739 36,199,739 Appropriations made during the period - - 13,606,854 - - (13,606,854) - Balance as on 31 March 2008 997,920,000 100,000,000 603,842,140 105,679,443 118,770,834 154,284,494 2,080,496,911

Balance as on 31 March 2007 950,400,000 100,000,000 511,124,778 39,894,467 - 384,603,906 1,986,023,151

Chairman Vice Chairman Director Managing Director



Samson H Chowdhury Dr. Arif Dowla Syed Manzur Elahi Kazi Md. Shafiqur Rahman

Mutual Trust Bank LimitedStatement of Changes in Equity



Sd/- Sd/- Sd/- Sd/-

Sd/-



Less than 1 to 3 3 to 12 1 to 5 Above Total1 month months months years 5 years

Taka Taka Taka Taka Taka TakaASSETS :Cash 1,453,603,706 - - - - 1,453,603,706 Balance with other Banks and financial Institutions

424,387,013 382,764,370 145,184,640 - - 952,336,023

Money at Call & Short notice 60,000,000 - - - 60,000,000.00 Investments 1,338,800 795,115,622 1,120,000,000 749,974,303 1,425,477,221 4,091,905,946Loans and advances 5,105,679,252 3,667,922,112 9,873,373,761 3,084,535,680 1,211,210,979 22,942,721,784Premises and fixed assets 3,000,000 6,000,000 27,000,000 287,277,242 - 323,277,242Other assets - 63,851,195 52,692,806 - 914,518,836 1,031,062,837Non-banking assets - - - - - - Total assets 7,048,008,771 4,915,653,299 11,218,251,207 4,121,787,225 3,551,207,036 30,854,907,538LIABILITIES :Borrowings from other banks, financial institutions & agents 300,000,000 - - - - 300,000,000

Deposits and other accounts 9,021,868,633 5,492,394,312 9,509,841,279 1,428,564,216 1,015,485,361 26,468,153,801Provision & other liabilities 171,849,575 51,167,626 149,970,886 1,633,268,739 2,006,256,826Total Liabilities 9,493,718,208 5,543,561,938 9,659,812,165 1,428,564,216 2,648,754,100 28,774,410,627

Net Liquidity (2,445,709,437) (627,908,639) 1,558,439,042 2,693,223,009 902,452,936 2,080,496,911



Liquidity Statement



As on March 31,2008

Particulars


Sd/- Sd/- Sd/-

Sd/-

Sd/-



Mutual Trust Bank Limited Notes to the Accounts


1.0 Legal status and nature of the bank

Mutual Trust Bank Limited was incorporated in Bangladesh in the year 1999 as abanking Company under the Companies Act. 1994.All types of commercialbanking services are provided by the bank within the stipulations laid down bythe Bank Companies Act 1991 and directive as received from Bangladesh Bankfrom time to time. The bank started its commercial business from October 24,1999. The shares of the bank are listed with the Dhaka and Chittagong StockExchange as a publicly quoted company for its general class of shares. The Bankhas 30 branches, with no overseas branch as on March 31, 2008.

1.1 Principal Activities

The principal activities of the bank are to provide all kinds of commercial bankingservices to its customers through its branches in Bangladesh.

2.0 Significant accounting policies and basis of preparation of financial statements 2.1 Basis of accounting

The financial statements of the Bank are made up to March 31, 2008 and areprepared under the historical cost convention, on a going concern basis and inaccordance with the “first schedule (Sec- 38) of the Bank Companies Act, 1991 asamended by the Bangladesh Bank vide BRPD circular No. 14 dated 25 June, 2003and other Bangladesh Bank circulars, International Financial Reporting Standards(IFRS) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB)and other laws and rules applicable in Bangladesh. All inter-branch accountbalances and transactions among the head office and the branch have been takeninto accounts.

2.2 Consolidation

A separate set of records for consolidating the statement of Affairs and Incomeand Expenditure Statements of the Branches are maintained at Head Office of theBank from which these financial statements have been prepared.

2.3 Revenue Recognition

The accounting policies adopted for the recognition of revenue are as follows:

i) Interest is calculated on daily product on unclassified loans andadvances.

ii) Dividend income is recognized at the time when it is realized.



iii) Commission and discounts on bills discounted and purchased arerecognized at the time of realization.

2.4 Provision for taxes

a. Current tax

Provision for Income Tax has been made @ 45% as prescribed in the FinanceOrdinance, 2007 of accounting profit made by the bank after considering someof the taxable add backs of income and disallowance of expenditures.

b. Deferred tax

The company has adopted deferred tax in compliance with the provision ofBangladesh Accounting Standard (BAS-12)”Income Tax”.

2.5 Investments Investment in Treasury bill and Treasury bond has been shown at present value.Revaluation surplus on investments in HTM securities are shown in equity. Allother Investments except Shares have been shown at face value. Investment inShare of Dhaka Stock Exchange Ltd. has been shown at cost. Investment inshares of IIDFC and CDBL has been shown at face value.

2.6 Fixed Assets & Deprecation

i) Fixed assets have been shown at written down value.

ii) Depreciation is charged at the following rates on reducing balancemethod on all fixed assets other than motor vehicles, which aredepreciated on straight line basis:

Name of Assets Rate of Depreciation Immovable Property 2.50%

Furniture 10% Interior Decoration 10% Office Equipments 20% Motor Vehicles 20% Books & Periodicals 10%

iii) Assets purchased during the period are depreciated from the date of

acquisition.



2.7 Leasing Lease are classified as finance lease whenever the ‘Terms of the Lease” transfersubstantially all the risks and rewards of ownership to the lessee as per BAS-17:Lease. Amount due from lessees under finance leases are recorded asreceivables at the amount of the Bank’s net investments in the leases. Leaserental income is allocated to accounting periods so as to reflect a constantperiodic rate of return on the bank’s net investment outstanding in respect of theleases.

2.8 Loans and Advances

i) Loans and advances have been stated at gross value as pre requirements

of Bank Companies Act, 1991. ii) Interest is calculated in a daily product basis but charged quarterly.

iii) Interests on good loans and advances have been accounted for as income

on accrual basis. iv) Provision for loans and advances and Off Balance Sheet items are made

on the basis of information furnished by the branches and instructionscontained in Bangladesh Bank. BCD Circular No. 12 dated 4 September1995, BRPD Circular No.16 dated 6 December 1998, BRPD Circular No.9dated 14 May 2001, BRPD Circular No.20 dated 20 December 2005 andBRPD Circular No. 5 dated 05 June 2006 and BRPD Circular no. 10 dated18 September 2007 at the following rates: Classification Criteria Rates of provision

General Provision on unclassified loans and advances 1%

Small enterprise financing for good loan 2%

Special Mention Account 5%

Provision on substandard loans and advances 20%

Provision on doubtful loans and advances 50%

Provision on bad/ loss loans and advances 100%

Off Balance Sheet Items 0.50%



v) Security against loans:

i) Project loan: Land and building are taken as security in the form of mortgageand plant & machinery are taken in the form of hypothecation.

ii) Working Capital and taking loan: Goods are taken as security inthe form of hypothecation along with land and buildingmortgage.

vi) Bills purchased and discounted

a) Bills purchased and discounted have not includedGovernment Treasury bills and have been classified intotwo sub-heads viz.,

(i) Payable in Bangladesh and (ii) Payable outside Bangladesh. b) The bills purchased and discounted have been analyzed

as per the maturity grouping. 2.9 Foreign Currency Transaction

i) Assets and liabilities denominated in foreign currency are translated intoTaka at the closing rates at the balance sheet date.

ii) Foreign currency transactions are converted into equivalent takacurrency at the ruling exchange rates on the date of such transactions.Gains and losses from transactions are dealt with through exchangeaccount.

2.10 Risk Management

Risk is inherent in all the core business areas of a bank. Managing risks properlyis one of the main pillars of banking business. To ensure sustainable growth andperformance, proper and sound risk management practice is of vital importance,As a commercial bank Mutual Trust Bank (MTB) attaches full importance tomanage the risk involved in its business. The risk management of the bankcovers a wide spectrum of risk issues but the 5 (five) core risk areas of bankingare; Credit Risk, Foreign Exchange Risk, Internal Control and Compliance Risk,Money Laundering Risk and Asset Liability Management Risk. The principalobjective of risk management is to safeguard the bank’s capital, financialresources, profitability and market reputation. To this effect, the bank took thefollowing steps under the guidelines of Bangladesh Bank:

(a) Credit Risk Management

Credit risk is the possibility that a borrower or counter party will fail to meet its obligations in accordance with agreed terms. The failure may result from unwillingness of the counter party or decline in his/her financial condition.



Credit risk, therefore, arises from the bank’s dealing with or lending tocorporate, individuals, other banks or financial institutions. A separate Credit Division has been formed at Head Office since the inceptionof the bank, which is assigned with the duties of marketing and assessment ofcredit products, maintaining effective relationship with the customer andexploring new business opportunities. In line with Bangladesh Bank guidelinesthe bank has segregated marketing, approval and monitoring/recoveryfunctions. The credit risk management includes borrower risk analysis, financial statementanalysis, industrial analysis, historical performance of the customer, security ofthe proposed credit facility and market reputation of the borrower etc. MTBtakes its lending decision based on the credit risk assessment report byAppraisal Team. In determining Single Borrowing/Large Loan limit, theinstructions of Bangladesh Bank are strictly followed.

(b) Foreign Exchange Risk Management Foreign Exchange Risk is defined as the potential change in earnings arising fueto change in market prices. The market directly affects each country’s bond,equities, private property, manufacturing and all assets that are available toforeign investors. Foreign exchange rates also play a major role in determiningwho finances government deficits, who buys equities in companies and literallyaffects and influences the economic scenario. Due to high risk market the role oftreasury operations is crucial. As per Bangladesh Bank’s guidelines the bank has segregated the Front andBack office for Treasury Operations. Front Office independently conducts thetransactions and the Back Office is responsible for verification of the deals andpassing of their entries in books of accounts. All Nostro accounts are reconciledon monthly basis and all foreign exchange transactions are revalued at Mark-to-Market rate as determined by Bangladesh Bank.

(c) Internal Control and Compliance Risk Management Internal Control and Compliance (ICC) is a critical component of Bankmanagement and foundation for the safe and sound operation of bankingorganization. A system of strong internal control and compliance can help toensure that the goals and objectives of a banking organization will be met, thatthe bank will achieve long-term profitability targets, and maintain reliablefinancial and managerial reporting. Operational loss may arise from error andfraud due to lack of strong internal control and compliance culture. Effective Internal Control & Compliance system can help to ensure that the bankwill comply with laws and regulations as well policies, plans, internal rules andprocedures, and decrease the risk of unexpected losses or damage to the bank’sreputation.



To this effect, the bank has formed an ICC Division headed by Senior Executive.The ICC Division has been segregated to three departments, which are Audit &Inspection Dept, compliance Dept and Monitoring Dept. The Bank has alsodeveloped an Internal Control & Compliance Policy duly approved by theBoard of Directors. To ensure effective control DCFCL, Loan DocumentationCheck list and Quarterly Operations Report have been developed andimplemented. The Audit and Inspection Team undertakes periodic and specialaudit. The Audit Committee of the Board of Directors plays an effective role inproviding bridge between the board and management. The committee reviewsthe financial reporting process, the system of internal control, the audit processand the bank’s process for compliance with laws, regulations and code ofconduct. (d) Money Laundering Prevention Money laundering has been identified as a major threat to the financial servicescommunity, It is important that the management of Banks and other FinancialInstitutions view prevention of money laundering as part of their riskmanagement strategies and not simply as a stand-alone requirement that isbeing imposed by the legislation. The management of MTB is fully aware thatthe financial system shall not be and cannot be used as a channel for criminalactivities. Therefore, co-ordination and co-operation between the concernedparties are essential for its success. The bank has designated Chief Anti MoneyLaundering Compliance Officer (CAMLCO) at Head Office and complianceofficers at branches to review the transactions of the accounts to identifysuspicious transaction. Transaction Profile (TP) has been incorporated in theAccount Opening Form (AOF) along with other KYC related issues. Regulartrainings are conducted to build awareness among the staff. (e) Asset Liability Management Asset / liability management has become an almost universally acceptedapproach to risk management. Since capital and profitability are intimatelylinked, Mutual Trust Bank Ltd. is managing its asset / liability in order toensure sustained profitability so that the bank can maintain and arrange itscapital resources. The asset/liability, management committee (ALCO) usuallymakes decisions, which is responsible for the financial direction of the bank. TheALCO’s goal is to manage the sources and uses of funds, identify balance sheetmanagement issues like balance sheet gaps, interest rate gap etc. ALCO alsoreviews liquidity contingency plan and implements liability pricing strategy forthe bank.



2.11 Retirement Benefit (a) Provident Fund The Bank operates a contributory provident fund for its eligible employees. The fund is administered by a Board of Trustees and funded by contributions from the employees as well as from the bank equally. The fund is recognized by the National Board of Revenue, GOB. The contributions are invested in compliance with the Provident Fund Trust Rule. (b) Gratuity

The bank has a gratuity scheme, which covers all of its permanent employees. The gratuity would be payable equivalent to 02 month’s last drawn basic salary for each completed year of service to the employees who have been in the service of the Bank for minimum period of 10 years without break.

2.12 Post Balance Sheet events The Board of Directors of the company in its 87th meeting held on 19.04.2008 has declared 25% stock dividend and 5:1 Right (One right share for every five shares held) to the shareholders .No material events after the Balance Sheet date came to our notice, which could affect the values, reported in the financial statements.

2.13 Audit committee

In compliance to Bangladesh Bank’s circular, the Board of Directors has formed an Audit Committee comprising of the following 3 (Three) Directors of the Board.

SL.

NO. Name of the Director

Status With the Bank

Status with the committee

Educational Qualification

01. Mr. Syed Manzur Elahi Director Chairman MA in Economics From DU

02. Mr.RashedAhmed Chowdhury

Director Member Post Graduate in Business Management from Kingston University, England

03. Mr. Md. Abdul Malek Director Member B.SC Engineering From BUET



Audit committee reviewed various audit / inspection reports at regularintervals. Upon scrutiny of the audit objections and compliance, the committeeadvised the management to remain within the policy guidelines and directivesof the regulatory authorities. As per circular the committee is placing their report regularly to the boardmeeting of the Bank mentioning their activities & recommendations of theinternal control system, compliance of rules and regulations and establishmentof good governance within the organization.

2.14 Earning per Share Earning per share has been calculated in accordance with BAS 33: Earning perShare (EPS), which has been shown on the face of profit and loss account. Thishas been calculated by dividing the basic earnings by the weighted averagenumber of ordinary shares outstanding during the period.

2.15 General Figures have been rounded off to the nearest taka. Previous year’s figures havebeen rearranged, where necessary, to conform to current period’s presentation.




Taka Taka 3.00 Cash in hand:

Local Currency 221,383,104 277,030,446Foreign Currency 5,115,705 5,737,744

226,498,809 282,768,190

4.00 Balance with Bangladesh Bank and its agent Bank:With Bangladesh Bank Local Currency 1,060,133,513 1,295,015,256 Foreign Currency 160,796,923 628,177,398With Sonali Bank (as agent of Bangladesh Bank-Local currency) 6,174,461 23,649,924

1,227,104,897 1,946,842,578

4.01 CRR ( Cash Reserve Requirement ) & SLR ( Statutory Liquidity Ratio )CRR :Required 120.86 114.02

Maintained 128.08 134.58

SLR (including CRR ) : Required 435.11 410.46

Maintained 435.13 551.39

4.02 Components of SLR (Taka in Crore):Cash in hand 22.65 28.28Balance with Bangladesh Bank (as per bank statement) 95.79 134.58Balance with Sonali Bank 0.62 2.36Treasury Bills 97.97 255.35Treasury Bonds 207.27 130.00TT in Transit 10.00 0.00Agrani Bank Industrial Development Bond 0.7 0.70Prize Bonds 0.13 0.12

435.13 551.39

5.00 Balance with other Banks & Financial Institutions:In Bangladesh : CurrencyIn FDR accounts-

Mercantile Bank Ltd. Taka 101,733,333 203,325,000 Brac Bank Ltd. Taka - 313,276,043 National Bank of Pakistan Taka - 203,058,333 Bank Al Falah Taka - 102,075,000 IDLC Taka - 103,165,550 Lanka Bangla Finance Co Ltd. Taka 50,550,000 56,314,000 IIDFC Taka 320,490,196 414,603,867

In STD accounts- Dutch Bangla Bank Ltd. Taka 7,637,589 5,373,654 BASIC Bank Ltd. Taka 36,998 4,936,999 Sonali Bank Taka 13,267,946 31,578,677 Standard Chartered Bank Taka 1,488,278 - Agrani Bank Taka 433,681 475,085 Janata Bank Taka 295,739 295,739

In CD account- Standard Chartered Bank Taka - 1,114,013 Arab Bangladesh Bank Ltd. Taka 200,000 200,000 Agrani Bank Taka 83,512 29,032

Sub total 496,217,272 1,439,820,992

Amount ( Taka in crore )







Taka Taka

Outside Bangladesh in current accounts : CurrencyCity Bank NA US$ 184,375,943 - Mashreqbank, New York US$ 19,806,038 97,460,291Standard Chartered Bank, New York US$ 77,721,715 - AMEX, New York US$ 12,006,012 29,524,570Habib American Bank US$ 10,427,536 25,577,232HSBC, New York US$ 11,754,745 66,804,016Mashreqbank, London US$ 9,746,103 67,350,449JP Morgan New York US$ 47,838,391 8,515,810National Commercial Bank,Jeddha US$ 10,409,518 9,150,268Standard Chartered Bank, Singapore SGD 279,649 358,834Mashreqbank, London GBP - 2,782,487Standard Chartered Bank, London GBP 12,830,128 10,892,125AMEX, Germany EUR 31,599 2,804,962Standard Chartered Bank, London EUR - 8,985,798 Hypo Vereins Bank EUR 13,766,097 2,709,000 Commerze Bank EUR 764,767 2,910,933 AMEX, Kolkata ACU 2,077,661 2,071,933 Standard Chartered Bank, Kolkata ACU - 4,591,697 Standard Chartered Bank, Pakistan ACU - 6,024,294 Citibank NA, Mumbai ACU 5,956,447 5,979,897 Rupali, Pakistan ACU 10 10 Mashreqbank,Mumbai ACU - 5,913,016 HSBC,Mumbai ACU 2,862,519 50,939 Nepal Bangladesh Bank ACU 61,722 61,965 UBAF Tokyo JPY 1,386,901 -

424,103,501 360,520,526 Outside Bangladesh in Term Deposit 32,015,250 32,015,250 Sub total 456,118,751 392,535,776 Total 952,336,023 1,832,356,768

5.01 Maturity grouping of Balance with other Banks and Financial InstitutionsOn Demand 424,387,013 404,523,725Less than three months 382,764,370 1,013,229,176More than three months but less than one year 145,184,640 414,603,867More than one year but less than five years - - More than five years - -

952,336,023 1,832,356,768

5.02

Name of the Bank CurrencyAmount in Foreign

Currency Exchange Rate Amount in Taka

City Bank NA US$ 2,688,479.77 68.58 184,375,942.63 Mashreqbank, New York US$ 288,801.96 68.58 19,806,038.42 Standard Chartered Bank, New York US$ 1,133,300.01 68.58 77,721,714.69 AMEX, New York US$ 175,065.79 68.58 12,006,011.88 Habib American Bank US$ 152,049.23 68.58 10,427,536.19 HSBC, New York US$ 171,401.94 68.58 11,754,745.05 Mashreqbank, London US$ 142,112.90 68.58 9,746,102.68 JP Morgan New York US$ 697,556.01 68.58 47,838,391.17 National Bank,Jeddha US$ 151,786.50 68.58 10,409,518.17 Standard Chartered Bank, Singapore SGD 5,795.85 48.25 279,649.76 Standard Chartered Bank, London GBP 93,993.61 136.50 12,830,127.77

Currency wise position and Exchange rate applied for conversion of Balance with other banks in foreign currency into Local currency as on March 31, 2008 are as follows :



Name of the Bank CurrencyAmount in Foreign

Currency Exchange Rate Amount in Taka AMEX, Germany EUR 303.11 104.25 31,599.22 Hypo Vereins Bank EUR 132,048.88 104.25 13,766,095.74 Commerze Bank EUR 7,335.90 104.25 764,767.58 AMEX, Kolkata ACU 30,295.43 68.58 2,077,660.59 Citibank NA, Mumbai ACU 86,853.99 68.58 5,956,446.63 Rupali, Pakistan ACU 0.15 68.58 10.29 HSBC,Mumbai ACU 41,739.85 68.58 2,862,518.91 Nepal Bangladesh Bank ACU 900.00 68.58 61,722.00 UBAF Tokyo JPY 2,133,695.00 0.65 1,386,901.75

424,103,501

6.00 Money at Call and Short Notice:Mercantile Bank Ltd. 60,000,000 -

60,000,000 -


Taka Taka 7.00 Investments :

Government Securities:Treasury Bills ( at present value ) : 28 days Treasury Bills 49,939,434 - 91 days Treasury Bills 199,466,571 - 182 days Treasury Bills - 98,970,274364 days Treasury Bills 382,844,108 1,060,508,989 2 Years Treasury Bills 1,018,486,795 998,128,5065 Years Treasury Bills 241,936,871 395,924,176

1,892,673,779 2,553,531,945Treasury Bonds5 Years Treasury Bonds 986,529,217 622,161,304 10 Years Treasury Bonds 1,143,123,307 720,007,572

2,129,652,524 1,342,168,876 Prize Bonds ( at face value ) 1,338,800 1,151,800Sub Total 4,023,665,103 3,896,852,621Other Investments:Shares in quoted companies by Merchant Banking 25,242,934 12,751,280 Less: Provision against merchant banking in shares 2,529,133 -

22,713,801 12,751,280Shares in unquoted companies ( at face value) :

18,216,000 18,216,000 10,000,000 10,000,000 28,216,000 28,216,000

Bonds ( at face value ) :7,000,000 7,000,000

1 Years - 5 years IPDC Zero Coupon Bond 2,583,000 3,981,000 Less: Unearned Interest on IPDC Zero Coupon Bonds 271,958 271,958

2,311,042 3,709,042 Share of Dhaka Stock Exchange Ltd 8,000,000 8,000,000 Sub Total 68,240,843 59,676,322 Total 4,091,905,946 3,956,528,943

7.01 Held To Maturity (HTM) 3,059,429,000 2,493,942,249 Held For Trading (HFT) 970,964,145 1,409,910,372 Other investments 61,512,801 52,676,322

4,091,905,946 3,956,528,943

Valuation of investments in Shares of quoted companies are shown in Annexure-A.

Grouping of Investments:

Central Depository (BD) Ltd.Industrial & Infrastructure Dev. Finance Co. Ltd.

5 Years Agrani Bank Industrial Development Bond




Taka Taka 7.02 Maturity grouping of Investments as follows:

On Demand 1,338,800 1,151,800Less than three months 795,115,622 941,169,655

1,120,000,000 1,612,362,291 749,974,303 1,061,509,206

More than five years 1,425,477,221 340,335,9914,091,905,946 3,956,528,943

8.00 Loans and AdvancesLoans, Cash Credit, Overdrafts:In Bangladesh: Loans:Term Loan 4,067,360,987 3,660,648,929General Loans 312,981,117 262,132,992Demand Loan 84,964,889 54,063,824House Building Loan 622,523,749 603,583,759PAD 1,697,835,102 1,602,292,013Trust Receipts 6,393,742,246 6,465,685,849Product 33,527,035 36,713,281Lease Finance (8.01) 243,826,383 251,069,493Staff loan against P.Fund 7,529,438 7,470,054 Consumer Financing 200,867,465 121,257,251 Export Development Fund - 1,165,121 Home Loan Refinance 4,204,530 504,139.00 Car Loan (Employee) 30,193,418 21,340,750 Small Enterprise Financing 109,351,369 59,233,495 Staff House Building Loan 9,500,000 -

13,818,407,728 13,147,160,950 Cash Credit 3,855,386,385 3,749,196,127Secured Overdraft 2,806,512,322 2,946,374,602

20,480,306,435 19,842,731,679 Outside Bangladesh - -

20,480,306,435 19,842,731,679 Bills Purchased and Discounted ( excluding Treasury bills ) :Payable in Bangladesh 2,041,101,966 2,088,290,649Payable outside Bangladesh 421,313,383 752,205,329

2,462,415,349 2,840,495,978 Total Loans and Advances 22,942,721,784 22,683,227,657

8.01 Gross Lease Rental Receivable:Gross lease rental receivable within 1 year 138,385,951 145,934,480 Gross lease rental receivable within 5 years 140,964,197 147,716,435 Gross lease rental receivable after 5 years 3,150,378 -

282,500,526 293,650,915 Less: Unearned Lease Rental 38,674,143 42,581,422

243,826,383 251,069,493

8.02 Maturity grouping of Loans and Advances On Demand 5,105,679,252 4,934,180,297Not more than three months 3,667,922,112 4,673,587,191

9,873,373,761 9,245,814,1193,084,535,680 3,068,796,637

More than five years 1,211,210,979 760,849,41322,942,721,784 22,683,227,657

More than three months but less than one year

More than three months but less than one year

More than one year but less than five years

More than one year but less than five years




Taka Taka 8.03

a)10,245,083 29,867,976

b) 44,079,095 31,655,397

Advances to Industries- Food 289,529,000 166,730,000RMG & Textile 3,580,654,000 3,073,475,000Jute & Jute products 161,868,000 103,249,000Leather and Leather products 79,712,000 18,357,000Paper, paper products & printing 908,355,000 625,289,000Wood and wood products 199,000 238,000Pharmaceuticals 40,611,000 64,147,000Plastic & Rubber 303,318,000 300,543,000Petroleum & Edible Oil 94,930,000 92,097,000Chemical & Chemical Products 170,278,000 715,883,000Glass & Glass products 160,957,000 64,316,000Assembling 343,726,000 399,171,000Metal & Metal products 651,784,000 634,155,000Non-matelic mineral products 27,244,000 29,439,000Electricity & Gas Industry 245,402,000 175,510,000Service Industries 159,796,000 147,720,000Small Scale 6,928,000 309,422,000Others 866,164,000 546,470,000

8,091,455,000 7,466,211,000

Total Classification Funded Non - Funded (Taka in Core) Status

25.74 9.87 35.61 UC30.11 0.16 30.27 UC

0.86 56.24 57.10 UC33.15 14.90 48.05 UC28.94 16.45 45.39 UC

Nasir Glass Industries Ltd. 30.23 8.38 38.61 UC15.7 20.06 35.76 UC

13.61 29.73 43.34 UC31.22 35.69 66.91 UC

T.K. Chemical Complex Ltd. 35.7 24.92 60.62 UCM.M. Steel Galvanizing Plant Ltd. 46.91 8.99 55.90 UC

63.02 0.00 63.02 UC355.19 225.39 580.58

8.04 Standard 20,978,411,784 21,669,395,657SMA 579,821,000 472,189,000Substandard 491,647,000 251,245,000Doubtful 239,877,000 75,274,000Bad & Loss 652,965,000 215,124,000

22,942,721,784 22,683,227,657

PHP Corporation

Jamuna Denims Ltd.

Polo Composite Knit Industry Ltd.A.K. Corporation Ltd.

TotalAkter Enterprise

Appollo Ispat Complex Ltd.

Chittagong Denim Mills Ltd.MSA Spinning Mills Ltd.City Seed Crushing Ind. Ltd.

Classification of Loans and Advances:

Outstanding (Taka in Core)Name of the clients

Loans and Advances to Institutions in which the Directors of the Bank haveinterestAdvances to Managing Director & other Senior Executives

Concentration of Loans and Advances:

No. of borrowers to whom credit facilities of more than 15% of the capital of the bank have been given is 12.Outstanding credit facilities of these borrowers as on March 31, 2008 is Taka 580.58 Crore.




Taka Taka 8.05 Geographical Location wise Loans and Advances

Dhaka 15,578,834,520 15,358,345,307Chittagong 7,129,083,040 7,174,814,542Rajshahi 80,317,249 62,733,655Sylhet 154,486,975 87,334,153Khulna - - Barishal - -

22,942,721,784 22,683,227,657

8.06 Particulars of Loans and Advances:

22,243,502,027 22,161,831,508

579,188,331 265,485,199

120,031,426 255,910,950- -

22,942,721,784 22,683,227,657

45,829,242 33,698,801

8,494,936 27,824,572

49,564,613 41,145,369

30,681,632 34,186,918

- -

11,990,321 215,124,000

217,429,923

60,305,983 99,413,165

- - - -

8.07 Maturity grouping of Bills purchased and Discounted Payable within one month 1,127,678,079 1,236,640,969 More than one month but less than three months 867,238,144 1,185,424,592 More than three months but less than six months 463,933,876 418,430,417 More than or equal to six months 3,565,250 -

2,462,415,349 2,840,495,978

9.00 Land 104,253,000 104,253,000Immovable Property 10,209,462 10,275,149Furniture & fixtures 29,892,677 23,835,096Interior decoration 61,507,628 56,928,395Office equipments 96,498,173 82,521,407Motor vehicles 20,646,046 23,782,714Books & Periodicals 270,256 275,560

323,277,242 301,871,321 Details are shown in Annexure-B

V) Debts due by directors or officers of the bank or any of them either severally orjointly with any other person.

III) Debts considered good secured by the personal liabilities of one or moreparties in addition to the personal security of the debtors.IV) Debts considered doubtful or bad, not provided for.

II) Debts considered good for which the bank holds no other security than thedebtor's personal security.

I) Debts considered good in respect of which the bank company is fully secured.

VIII) Maximum total amount of advances, including temporary advances grantedduring the year to the companies or firms in which the Directors of the bank areinterested as partners or managing agents or in case of private companies, asmember.

VII) Maximum total amount of advances, including temporary advances, made atany time during the year to Directors or Managers or Officers of the bank or anyof them either severally or jointly with any other person.

IX) Due from other banking companies

xii) Interest credited to Suspense account during the year (net)

X) Classified loans on which no interest/profit charged

XI) Provisions maintained against classified loans and advances

xiii) Cumulative amount of loans written off

Fixed Assets including premises,furniture & fixtures

VI) Debts due by companies or firms in which the Directors of the bank areinterested as partners or managing agents or in case of private companies, asmembers.

xiv) Amount of loans written off during the year




Taka Taka

10.00 Other Assets Stamps on hand 388,981 361,525Stock of stationery 3,689,600 3,227,368Advance Office Rent 46,928,311 44,877,443Advance Deposit 2,074,895 2,020,555Prepaid Promotional Expenses 3,611,500 3,611,500.00 Suspense Account (10.01) 54,523,090 32,444,451Advance Income Tax (10.02) 908,151,742 850,399,411Adjusting Account-Debit 8,935,274 9,381,371Clearing house adjustment 3,850 3,850Payment Against Construction of Head office 2,755,594 2,652,884.00 Branch adjustment net - 229,320,405

1,031,062,837 1,178,300,763

10.01

10.02 Balance as on 1 January 2008 850,399,411 442,011,900

57,752,331 408,387,511 908,151,742 850,399,411

Less: Adjustment made during the period (Note-13.04) - - Balance as on 31 March 2008 908,151,742 850,399,411

10.03 Classification of Other AssetsUnclassified 1,031,062,837 1,178,300,763 Doubtful - - Bad/Loss - -

1,031,062,837 1,178,300,763

11.00

Standard Bank Ltd. 20,000,000 - National Bank Ltd. 100,000,000 400,000,000 BASIC Bank Ltd. 180,000,000 200,000,000 Southeast Bank Ltd. - 200,000,000 Mercantile Bank Ltd. - 300,000,000 Agrani Bank Ltd. - 150,000,000 Janata Bank Ltd. - 200,000,000 Eastern Bank Ltd - 250,000,000 Dutch Bangla Bank - 600,000,000 The City Bank Ltd. - 300,000,000 Bank Al falah - 100,000,000 Premier Bank Ltd - 200,000,000 Rupali Bank Ltd. - 200,000,000

300,000,000 3,100,000,000

Add: Payment made during the period

Suspense account represents DD paid without advice, advance against expenses for advertisement, opening of new branch traveling expenses etc.

Borrowings from other Banks, Financial Institutions & AgentsIn Bangladesh

Advance Income Tax




12.00 Deposits and other accounts: Taka Taka Current Deposits & Other Accounts :Current Deposits 1,429,371,068 1,633,622,680Short Term Deposits 887,489,214 588,583,491Foreign Currency Deposits 46,340,448 44,518,807Non-resident Taka account 142,179,122 98,849,392Sundry Deposits 2,238,901,838 1,567,803,507

4,744,281,690 3,933,377,877 Bills Payable :PO Issued 623,107,729 393,134,590PS Issued 22,154,649 119,703,746DD Payable 27,745,962 12,534,092

673,008,340 525,372,428 Savings Deposits 2,271,614,534 2,147,296,683Fixed Deposits :From Banks 539,997,500 489,997,500From other than Banks 16,264,115,806 15,844,147,498

16,804,113,306 16,334,144,998 Deposit-Products :Brick by Brick 891,356,998 852,123,825Save Everyday Deposits 1,575,982 2,286,665Festival Savings Plan 10,083,460 9,295,378Children Education 8,051,476 9,592,720Best invest Deposits 96,542,142 99,937,133Unique Savings Plan 7,893,784 5,591,820MTB Double Saver Plan 588,132,862 482,133,941MTB Triple Saver Plan 26,225,952 22,997,152MTB Millionaire Plan 67,141,600 53,266,546MTB Education Plan 2,767,835 2,393,962MTB Monthly Benefit Plan 275,363,840 297,113,840

1,975,135,931 1,836,732,982 26,468,153,801 24,776,924,968

12.01 Maturity grouping of Deposits and other accounts:On Demand 3,996,896,945 3,954,508,262Repayable within one month 5,024,971,688 3,342,101,480More than one month but within three months 5,492,394,312 5,596,490,372

9,509,841,279 9,328,756,006 1,428,564,216 1,538,995,491

More than five years 1,015,485,361 1,016,073,35726,468,153,801 24,776,924,968

13.00 Other LiabilitiesProvision for loans and advances ( 13.01) 708,400,000 548,429,923Provision for Off Balance Sheet Items 56,650,000 55,000,000.00 Provision for Other Assets - - Interest Suspense ( 13.02) 149,970,886 123,641,438Exchange Equalization Fund 33,684 33,684Short term liabilities to Banks abroad (13.03) 167,132,442 625,561,637Export Development Fund - 1,165,121Provision for Tax (13.04) 893,719,526 861,884,994Deferred Tax Liability 6,994,662 6,994,662Provision for Gratuity (2.11.b) 5,000,000 5,000,000Provision for Audit Fees 100,000 100,000Provision for Bonus 2,008,000 28,686,322Contribution to Mutual Trust Foundation 2,500,000 2,500,000Provision for MTB Employees Death Benefit Scheme 1,000,000 1,000,000Contribution to MTB Employees Welfare Fund 500,000 500,000Adjusting A/C Credit 863,438 176,299Branch adjustment net (13.05 ) 11,384,188 -

2,006,256,826 2,260,674,080

More than three months but within one yearMore than one year but within five years




Taka Taka 13.01 Provision for Loans and Advances

Opening balance 331,000,000 209,700,000Add: Provision made during the period - 121,300,000Total provision for unclassified loans and advances 331,000,000 331,000,000Opening balance 217,429,923 30,282,078.00 Add: Provision made during the period 159,970,077 192,000,000Less: Interest waived during the period - 4,852,155Provision for classified loans and advances 377,400,000 217,429,923

708,400,000 548,429,923

13.02

13.03

13.04 Provision for TaxOpening balance 861,884,994 674,620,756Add: Provision made during the period 31,834,532 187,264,238Less: Adjustment made during the period - -

- - - - - - - - - - - -

893,719,526 861,884,994

13.05 Branch Adjustment (net)

Entriesoutstanding as on

31-03-2008 Amount in Taka

Debit entries 322 185,137,699

Credit entries 164 196,521,887

486 11,384,188

Period wise details of Unreconciled Inter Branch Transaction are as follows :

No. of Entry Amount(Taka ) No. of Entry Amount(Taka )

Less than 3 months 321 185,136,699 164 196,521,887

3 months to Less than 6 months 1 1,000 - -

6 months to Less than 9 months - - - - 9 months to Less than 12 months - - - -

12 months and more - - - - Total 322 185,137,699 164 196,521,887

All the above outstanding entries have subsequently been responded and properly reconciled.

Year 2001 (assessment year 2002-2003)Year 2000 (assessment year 2001-2002)

Short term liabilities to Banks abroad represents over withdrawn from foreign Bank account against bank balance forunreconciled entries.

Interest suspense account represents interest on loans and advances against SMA, substandard and doubtful loans.

Year 1999 (assessment year 2000-2001)

Year 2004 (assessment year 2005-2006)Year 2003 (assessment year 2004-2005)

Credit EntryPeriod of Unreconciliation

Debit Entry

Year 2002 (assessment year 2003-2004)

Assessments of Corporate tax of the bank for the year 1999 (assessment year 2000-2001) up to the year 2004 (assessmentyear 2005-2006) have been completed and finalized by the Tax Authority.




Taka Taka 14.00 Capital14.01 Authorized Capital:

38,000,000 ordinary shares of Taka 100 each 3,800,000,000 3,800,000,000 14.02 Issued, subscribed and paid-up capital:

600,000,000 600,000,000

397,920,000 397,920,000997,920,000 997,920,000

14.03 The break up of issued, subscribed and paid-up capital is as follows:March 31,2008

No. of shares Value of shares % of holdingin Taka

Sponsors 4,378,293 437,829,300 43.87%Financial Institutions 2,754,519 275,451,900 27.60%General 2,846,388 284,638,800 28.52%

9,979,200 997,920,000 100%14.04 Capital adequacy requirements

Taka in Million Taka in MillionTotal risk weighted assets 23862.77 23,278.34Required Capital : 10% of total risk weighted assets 2,386.28 2,327.83Actual capital maintainedCore Capital (Tier-I) :Paid up Capital 997.92 997.92Share Premium 100.00 100.00Statutory reserve 603.84 590.24General reserve 105.68 105.68Retained Earnings 154.28 131.69

1,961.73 1,925.53Supplementary Capital (Tier-II) :General Provision including off balance sheet items 387.65 386.00 Revaluation Gain on Investments in HTM Securities 59.39 59.39 Exchange equalization 0.03 0.03

447.07 445.42Total Capital(Tier-I+Tier-II) 2,408.80 2,370.95

Surplus 22.52 43.12Capital Adequacy ratio 10.09% 10.19%

14.05 Distribution schedule of shareholders by holdings as on March 31, 2008

No. of Value of shares Total Holdings %Holdings Shareholders in Taka Less than 500 shares 7,535 67,418,700 6.76%500 to 5,000 shares 752 87,514,400 8.77%5,001 to 10,000 shares 31 22,249,300 2.23%10,001 to 20,000 shares 23 32,279,100 3.23%20,001 to 30,000 shares 12 30,731,100 3.08%30,001 to 40,000 shares 11 38,155,800 3.82%40,001 to 50,000 shares 10 44,806,700 4.49%50,001 to 100,000 shares 17 128,607,400 12.89%100,001 to 1,000,000 shares 22 546,157,500 54.73%Over 1,000,000 shares - - 0.00%

8,413 997,920,000 100%

March 2008

There is a surplus of Taka 22.52 million in the capital fund of the Bank as on 31 March 2008 computed in accordancewith BRPD Circular # 10 dated November, 2002 and BRPD Circular # 03 dated 09 May 2004. Details of such surpluscapital fund are given below ( figure in million Taka ) :

3,979,200 Ordinary shares (2007: 3,979,200 Ordinary shares) of Taka 100 eachissued as bonus shares

The issued, subscribed and paid-up capital of the Bank as on March 31, 2008 is Taka 997,920,000 divided into 9,979,200Ordinary shares and 2007 is Taka 997,920,000 divided into 9,979,200 Ordinary shares of Taka 100 each as follows:

6,000,000 Ordinary shares (2007: 6,000,000 Ordinary shares) of Taka 100 eachissued for cash.




Taka Taka 15.00 Share Premium

16.00 Statutory ReserveOpening balance 590,235,286 511,124,778Add: Transferred during the period (20% of pretax profit ) 13,606,854 79,110,508

603,842,140 590,235,286

17.00 General ReserveOpening balance 105,679,443 39,894,467Add: Transferred from Profit and Loss account - 65,784,976

105,679,443 105,679,443

18.00 Retained Earnings:Opening balance 131,691,609 303,384,976 Less: Bonus share issued during the period - 47,520,000 Less: Cash dividend paid during the period - 190,080,000 Less: Transferred to General Reserve - 65,784,976 Add: Profit made during the period 36,199,739 210,802,117 Less: Transferred to Statutory Reserve 13,606,854 79,110,508

154,284,494 131,691,609

19.00 Contingent Liabilities & CommitmentsLetter of Guarantee (19.01) 2,825,714,382 3,273,141,620Letter of Credit :Letter of Credit (Cash) 4,225,871,000 2,706,579,300Letter of Credit (Back to Back) 1,202,444,600 1,249,587,500Letter of Credit (EDF) 2,391,000 2,391,000Letter of Credit (Deferred) 210,181,500 181,787,500Letter of Credit (Inland) 91,594,500 68,853,500

5,732,482,600 4,209,198,800 Bills for collection :Inland 39,053,278 36,788,098Foreign 6,321,313 5,730,267 LDBC 172,910,050 184,908,050 FDBC 362,441,873 187,368,273

580,726,514 414,794,688 Other Contingent Liabilities :IFDBC (Back to Back) 2,400,236,850 2,327,998,650IFDBC (Cash) 356,968,000 683,875,000Accepted Bill (Inland) 1,817,000 7,131,000Accepted Bill (Foreign) 10,785,000 -

2,769,806,850 3,019,004,650 11,908,730,346 10,916,139,758

The amount shown under the above head represents the amount of share premium received during the year 2003 fromPre-IPO placement arrangements and Initial Public Offerings(IPO).




Taka Taka 19.01 Letter of Guarantee

I) Claims against the Bank not acknowledged as debts - - ii) Money for which the bank is contingently liable in respect of guarantees given favoring : Directors - - Government 2,190,147,716 2,773,814,573 Bank and other Financial Institutions 2,642,702 1,952,957 Others 632,923,964 497,374,090

2,825,714,382 3,273,141,620 Less: Margin 945,486,481 1,090,661,601

1,880,227,901 2,182,480,019 iii) Liability on account of bills re-discounted - - iv) Liability on account of outstanding forward exchange contract - -

1,880,227,901 2,182,480,019

19.02 Segregation of Commitment by Type Documentary Credit and Short Term Business Related Transaction 5,732,482,600 4,209,198,800 Forward Asset Purchase and Forward Deposit - Endorsed formal standby facilities, Credit facilities and other commitments:

Less than one year 5,595,521,232 6,292,146,270 One year and above - -

Spot and Forward Foreign Exchange Rate Contract - - Other Exchange Contract - - Others 580,726,514 414,794,688

11,908,730,346 10,916,139,758

March 2008 March 200720.00 Interest Income

Loans and Advances ( 20.01) 670,162,978 645,676,644 Money at call and short notice 299,389 13,931,499Balance with other Banks and Financial institutions (20.02 ) 28,239,780 32,433,913 Bangladesh Bank Foreign currency clearing accounts 3,650,000 903,949

702,352,147 692,946,005 20.01 Interest on Loans and Advances

Term Loans 129,241,340 85,176,052General Loans 9,520,375 8,040,070House Building Loans 22,188,238 17,560,835Home loan refinance 43,792 - PAD 27,917,914 35,098,610 LTR 203,045,546 213,405,518Demand Loan 1,216,963 792,183Lease rental income 7,103,810 7,834,141Consumer Financing 5,912,207 567,616Small enterprise financing 3,121,443 - Staff loan against P.Fund Loan 180,700 - Cash Credit 127,511,021 108,089,618Best invest Loan 1,091,821 1,343,399Overdraft 77,114,425 103,541,521IFDBC 605,969 35,087IBP 221,286 28,553IDBP 52,299,505 63,115,562FDBP 1,826,623 1,047,879

670,162,978 645,676,644

20.02 Interest on Balance with other Banks and Financial InstitutionsInterest on Balance with other Banks in Bangladesh 23,639,780 27,733,913Interest on Balance held with outside Bangladesh 4,600,000 4,700,000

28,239,780 32,433,913




Taka Taka 21.00 Income Statement

Interest, discount and similar income 797,041,305 752,396,200 Dividend income 1,000,000 - Fee Commission and Brokerage 69,772,332 45,958,345 Gain less losses arising from dealing securities - - Gain less losses arising from investment securities 147,000 - Gain less losses arising from dealing in foreign currencies 55,093,645 31,037,774 Income from non banking assets - - Other operating income 18,506,934 12,546,312 Profit less losses on interest rate changes - -

941,561,216 841,938,631 ExpensesInterest Fee and Commission 590,008,787 557,207,802 Losses on Loans and advances - - Administrative expenses 78,924,077 52,658,163 Other operating expenses 31,209,882 17,305,836 Depreciation on Banking Assets 9,234,989 7,087,900

709,377,735 634,259,701 Operating profit 232,183,481 207,678,930

22.00 Interest paid on Deposits & Borrowings etc.Interest on Deposits and other accounts (22.01 ) 563,818,436 557,207,802 Interest on Borrowings from other Banks and Financial Institutions 26,190,351 -

590,008,787 557,207,802 22.01 Interest on Deposits and other accounts

Savings Deposits 24,453,509 18,023,688Short Term Deposits 11,963,157 6,074,412Fixed Deposits 477,867,254 496,720,636Deposit-Products 49,534,516 36,389,066

563,818,436 557,207,802 23.00 Income from Investments

Interest on Treasury Bills 45,632,805 58,191,778Interest on Treasury Bonds 48,049,698 423,430 Reverse REPO 525,412 628,571Interest on Bonds - 206,416Gain on Investment in shares by Merchant Banking 147,000 - Dividend on Investment in Shares 1,000,000 - Other Investment 481,243 -

95,836,158 59,450,195 24.00 Commission, Exchange & Brokerage

Commission (24.01 ) 69,718,485 45,958,345 Exchange 55,093,645 31,037,774 Brokerage 53,847 -

124,865,977 76,996,119 24.01 Commission

Letter of Guarantee 8,504,362 3,594,555Letter of Credit 37,814,889 20,164,353Acceptance of Bills 5,664,267 10,104,680LC Advising 1,349,017 871,950Export Bills 3,670,615 1,982,729PO, DD & TT 1,908,613 1,640,756Exchange houses 126,130 - Foreign Remittance 251,693 338,600On-line service 1,377,109 869,472IBP/FBP/IDBP 64,625 317,006FDBC/IFDBC 8,472,247 5,722,613OBC 514,918 351,631

69,718,485 45,958,345




Taka Taka 25.00 Other operating Income

Postage charge recoveries 4,019,168 3,074,265Telex, TP & Telegram charge recoveries 5,020 59,352Handling charges 3,101,782 1,748,700VISA ATM 21,581 - VISA POS 14,931 - Service Charges 2,495,328 1,500,601SWIFT Charge recoveries 4,113,085 3,159,303DP Income - 500Locker Rent 224,500 81,000Miscellaneous Earnings 4,511,539 2,922,591

18,506,934 12,546,312

26.00 Salary & AllowancesBasic Pay 25,136,724 18,216,780Allowances 19,819,383 12,220,412Bonus 36,225 - Gratuity - - Daily Wages 68,751 338,700Leave Fare Assistance 2,530,430 1,908,210Provident Fund 2,157,977 1,451,259

49,749,490 34,135,361

27.00 Directors FeeMeeting fee 136,000 216,000 Other fee - -

136,000 216,000

28.00 Rent, Tax, Insurance, Electricity etc.Rent 12,381,234 8,009,777Rates & taxes 94,700 361,915Insurance 207,437 275,275Power and electricity 1,624,970 1,220,565

14,308,341 9,867,532

29.00 Postage, Stamps, Telegram & Telephone etcPostage/Courier Service 1,500,767 1,073,007Telegram, Telex, Fax & e-mail 214,362 238,171On-line charges 3,479,183 1,553,825Telephone 1,261,763 1,038,327

6,456,075 3,903,330

30.00 Printing, Stationery, Advertisement etc.Printing & Security Stationery 1,981,945 838,822Computer Stationery 932,923 522,745Petty & Table Stationery 910,394 402,296Publicity & Advertisement 1,938,546 829,505

5,763,808 2,593,368

31.00 Depreciation on & repairs to Bank's propertyDepreciation 9,234,989 7,087,900Repair 1,066,588 541,497

10,301,577 7,629,397




Taka Taka 32.00 Other Expenditures

Security & Auxiliary Service 3,533,285 2,972,748Office Cleaning & maintenance 1,457,790 1,171,380Car expenses 6,178,860 1,298,610Entertainment 1,312,892 1,197,343Newspaper & Periodicals 85,029 65,000Clearing House Expenses 16,229 14,228Traveling & Conveyance 1,979,661 578,363Foreign Bank Charges 402,944 118,078Training/ Seminar participation 334,393 202,043Professional fees 125,000 223,918Wasa & Gas 95,984 72,781Subscription & Donation 587,172 616,310SWIFT charge 176,771 1,661,619VISA expenses 1,053,661 306,758 Router charge 321,414 111,704CDBL Charges 236,969 133,825Fees & Registration 1,665,455 1,229,640Business Development 489,800 4,417,500Promotional expenses 9,469,857 - Liveries & uniforms - 588,840Branch Opening Expenses 263,056Honorarium 43,600 18,400Cash Carrying Expenses 994,896 - Miscellaneous Expenses 465,164 306,748

31,289,882 17,305,836

33.00 Provision against loans and advances159,970,077 60,000,000

Provision for Unclassified Loans and Advances - - Provision for Off Balance Sheet Items 1,650,000 - Total amount of provision made during the period 161,620,077 60,000,000

34.00 Provision for TaxProvision for corporate tax in respect of the period march 2008 has been made as per rule

35.00 36,199,739 81,218,930

Number of ordinary shares outstanding(2006:Adjusted for bonus share) 9,979,200 9,504,000 14.51 34.18

Earning Per Share (EPS):

Earning Per Share (EPS)

Corporate tax assessments up to the year 2004 ( up to assessment year 2005-06 ) have been completed and finalized.Corporate tax return for the year 2006 (Assessment year 2007-08) and 2005 (Assessment year 2006-07) has been filed tothe DCT, LTU, Dhaka.

Provision for Classified Loans & Advances

Provision for corporate tax in respect of the year 2007 (Assessment year 2008-09) has been made as per rule .

Net Profit after tax (Taka )




Taka Taka 36.00

Exchange 43,610,052 22,136,139 4,019,168 3,074,265 5,020 59,352 3,101,782 1,748,700

Service charge 2,495,328 1,500,601 4,113,085 3,159,303

DP income - 500 Locker rent 224,500 81,000

VISA ATM 21,581 -

VISA POS 14,931 - 4,511,539 2,922,591 62,116,986 34,682,451

37.00 Rent, Tax, Insurance, Electricity etc. 14,308,341 9,867,532 Legal expenses 213,775 801,075 Postage, Stamps, Telegram & Telephone etc. 6,456,075 3,903,330 Audit fee 100,000 - Printing, Stationery, Advertisement etc. 5,763,808 2,593,368 Directors Fee 136,000 216,000 Repair 1,066,588 541,497 Other expenditure 31,289,882 17,305,836

59,334,469 35,228,638

38.00 No. of Branches 30 25

39.00 Assets pledged as security for liabilities as on March31, 2008 is nil.

40.00 Auditors work hour

41.00 Related Party Disclosure41.01 Name of Directors and their shareholdings as on March 31,2008

No. of Shares held Amount in Taka Holding %

Chairman 249,480 24,948,000 2.50%

Vice Chairman332,640 33,264,000 3.33%

Director 340,956 34,095,600 3.42%Director 55,945 5,594,500 0.56%

Director332,640 33,264,000 3.33%

Director 332,640 33,264,000 3.33%Mr. M. A. Rouf Director 161,320 16,132,000 1.62%

Director 127,050 12,705,000 1.27%

Director498,960 49,896,000 5.00%

Director 83,160 8,316,000 0.83%Director 25,000 2,500,000 0.25%Director 157,900 15,790,000 1.58%Director 78,750 7,875,000 0.79%

2,776,441 277,644,100 27.82%

Miscellaneous income

ASTRAS Limited represented by Mr. Samson H Chowdhury

Mrs. Yasmeen Haque

Mr. Md. Wakiluddin

Name of the companies in which the directors of the bank have interest are given in Annexure - C

Mr. Saidur Rahman Ratan

Mr. A.F.M. Mahfuzul Hasan

Mr. Syed Manzur Elahi

DesignationName

Postage charge recoveries

The external auditors of the bank, Howladar Yunus & Co., Chartered Accountants covered 80% of the bank's riskweighted assets and has spent around……... man-hours to complete the audit as per Bangladesh Standard on Auditing(BSA).

Received from other operating activities:

Handling chargeTalex,Telephone and Telegram charge recoveries

Associated Builders Corporation Ltd. represented by Mr. Rashed Ahmed Chowdhury

Mr. Md. Abdul Malek

East West Properties Development Ltd. represented by Mr. Kh. Rashiduzzaman

Mr. Hedayetullah

Al-haj Syed Abul Hossain

Advanced Chemical Industries Ltd. represented by Dr. Arif Dowla

Payment for other operating activities:

March 2008

SWIFT charge recoveries



41.02 Related party transactionsName of party Related with Transactions nature Outstanding

amount in Taka Remarks

Square Securities Management Ltd.

Mr. Samson H Chowdhury, Chairman SOD FDR

SNM Securities Ltd. Mr Syed Manzur Elahi, Director SOD Personal guarantee

Pioneer Insurance Co. Ltd.

Dr.Arif Dowla,Director

SOD FDR

Mr Syed Manzur Elahi, DirectorMr. Hedayetullah, Director

Mr. Md Wakiluddin, DirectorMr. Anjan ChowdhuryMr.Saidur Rahman Ratan,DirectorMr.A.F.M.Mahfuzul Hasan,Director

Apex Tannery Ltd. Mr Syed Manzur Elahi, Director & Mr Hedayetullah, Director

Bank Guarantee 371,934 FDR

International Publication

Mr Syed Manzur Elahi, Director

House building loanMortgage of Flat

Mr Md Abdur Rouf Mr Md Abdur Rouf,Director

House building loan 1,750,147 Mortgage of Apartment

41.03 Significant contracts where bank is a party and wherein directors have interest

Purpose Name of Director and Related by RemarksPabna Branch Approved by

Bangladesh Bank

42.00 Financial Highlights as of 31 March 2008 shown under Annexure- D

Lease agreement with SquarePharmaceuticals Ltd.

Chairman Vice Chairman Director Managing DirectorSamson H Chowdhury Dr. Arif Dowla Syed Manzur Elahi Kazi Md. Shafiqur Rahman

Samson H Chowdhury, Chairman

1,835,445

5,618,451

Nature of contract

8,154

1,032,886

Sd/- Sd/- Sd/- Sd/-



Annex- A

Sl# Name of CompanyNo. of Shares Held

Face Value

Per Share

Cost Holding Average Cost

Quoted rate per share as

on March 31, 2008

Total Market Value of share as on March 31, 2008

1 Bank Asia Ltd. 3,200 100 1,228,691.93 383.97 506.00 1,619,200.00 2 Marcantile Bank Ltd. 7,450 100 2,908,610.75 390.42 314.75 2,344,887.50 3 EXIM Bank Ltd. 15,100 100 5,983,727.98 396.27 383.25 5,787,075.00 4 Standard Bank Ltd. 5,050 100 1,588,242.00 314.50 295.25 1,491,012.50 5 Southeast Bank Ltd. 1,300 100 658,234.55 506.33 553.25 719,225.00 6 Premier Bank Ltd. 14,450 100 4,374,015.39 302.70 274.00 3,959,300.00 7 Shahjalal Islami Bank Ltd. 5,000 100 1,737,390.94 347.48 345.50 1,727,500.00 8 NCC Bank Ltd. 2,000 100 922,007.74 461.00 460.75 921,500.00 9 Jamuna Bank Ltd. 2,550 100 870,677.68 341.44 321.00 818,550.00 10 Social Investment Bank Ltd. 1,300 100 639,487.72 491.91 341.75 444,275.00 11 Power Grid Company Ltd. 1,500 100 967,896.00 645.26 516.25 774,375.00 12 Jamuna Oil Co. Ltd. 7,000 10 2,360,951.67 337.28 256.20 1,793,400.00 13 Megna Petroleum 3,000 10 1,003,000.00 334.33 255.00 765,000.00

Total 25,242,934.35 23,165,300.00

Investment by Merchant Banking in Shares of quoted companiesAs on March 31, 2008




Annexure-B

Written down Balance as on

01.01.2008Addition

during the period

Disposal during the

period

Balance as on 31.03.2008

Rate Balance as on 01.01.2008

Charged for the period

Adjustment made during

the period

Balance as on 31.03.2008

value as on 31.03.2008

Taka Taka Taka Taka Taka Taka Taka Taka Taka

Land 104,253,000 - - 104,253,000 - - - - - 104,253,000

Immovable property 11,393,980 - - 11,393,980 2.50% 1,118,831 65,687 - 1,184,518 10,209,462

Furniture & Fixtures 33,458,210 6,670,749 - 40,128,959 10% 9,623,114 613,168 - 10,236,282 29,892,677

Interior Decoration 78,756,643 5,891,822 - 84,648,465 10% 21,828,248 1,312,589 - 23,140,837 61,507,628

Office Equipments 147,090,931 19,344,618 - 166,435,549 20% 64,569,524 5,367,852 - 69,937,376 96,498,173

Motor Vehicles 45,832,920 - 3,875,000 41,957,920 20% 22,050,206 1,868,326 2,606,658 21,311,874 20,646,046

Books & Periodicals 342,078 2,063 - 344,141 10% 66,518 7,367 - 73,885 270,256 Total March 2008 421,127,762 31,909,252 3,875,000 449,162,014 119,256,441 9,234,989 2,606,658 125,884,772 323,277,242

Total 2007 363,982,868 58,493,216 1,348,322 421,127,762 87,796,666 31,957,347 497,572 119,256,441 301,871,321


As at March 31, 2008Fixed Assets Schedule

Cost

Particulars

Depreciation



Annexure - C

SL # Name of Directors of the Bank

01. Mr Samson H. ChowdhuryChairman - Square Pharmaceuticals Ltd.Representing ASTRAS Ltd. - Square Textiles Ltd.

- Square Spinning Ltd.- Square Toiletries Ltd.- Square Knit Fabrics Ltd.- Square Fashions Ltd- Square Agro Dev. & Processing Ltd.- Square Holdings Ltd.- Square Informatix Ltd.- Square Hospitals Ltd.- Square Consumer Products Ltd.- Square Herbal & Nutraceuticals Ltd.- ASTRAS Ltd.- Health Products Ltd.- Pharma Packages (Pvt.) Ltd.- Barnali Printers Ltd.- Aegis Services Ltd.- New Dhaka Refractories (BD) Ltd.- Microserve Ltd.- Central Depository Bangladesh Ltd.- Sabazpur Tea Company Ltd.

- Midas Financing Ltd.02. Dr Arif Dowla

Vice Chairman - Advanced Chemical Industries Ltd.Representing Advanced Chemical Industries Ltd. - ACI Formulations Ltd.

- ACI Salt Ltd.- Stochastic Logic Ltd.- ACI Foods Ltd.- ACI Pure Flour Ltd.- Apex Leather Crafts Ltd.

Director- Pioneer Insurance Co. Ltd.- ACI Agrochemicals Ltd.- Consolidated Chemicals Ltd.- Tetley ACI (Bangladesh) Ltd.- ACI Godrej Agrovet (Pvt.) Ltd.- Premia-flex Plastics Ltd.- Intesa Communication Ltd.- ACI Logistics Ltd.- ACI Motors Ltd.- Creative Communication Ltd.

Name of Companies in which the Directors of the Bank have interestName of Companies in which the directors have

interestChairman

Director

Managing Director



Annexure - C


03. Mr. Syed Manzur Elahi ChairmanDirector - Apex Tannery Ltd.

- Apex Adelchi Footwear Ltd.- Apex Pharma Ltd.- Apex Enterprise Ltd.- Grey Advertising (BD) Ltd.- Pioneer Insurance Co. Ltd.- Adelchi Footwear (Bangladesh) Ltd.Director- International Publications Ltd.- Credit Rating Agency of Bangladesh Ltd.- Advanced Chemical Industries Ltd.

04. Mr. Hedayetullah DirectorDirector - Apex Tannery Ltd.

- Hedayetullah Securities Ltd.- R & R Hides & Skin Agency

05. Mr. Kh. Rashiduzzaman Managing DirectorDirector - Baitul Food Products Ltd.Representing East West Properties Development Ltd.

06. Al-haj Syed Abul HossainDirector - SAHCO International Ltd.

- SAHCO Development Ltd.

- China-Fuzian-SAHCO Wooden Pencil Factory Ltd.07. Mr. M.A. Rouf

Director - Balaka Bangladeshi Restaurant, UK- Diamond Properties (BD) Ltd.- Diamond Properties, UK- Dilse Restaurant Ltd. UK

08. Mr. Md. Abdul MalekDirector - Sheltech Consultant (Pvt.) Ltd.

- Jebel-E-Noor General Hospital Ltd.09. Mr. Rashed Ahmed Chowdhury Director

Director - ABC Real Estate Representing Associated Builders Cor - ABC Builder Products Ltd.

- Banga Garments Ltd.- Shamsuddin Tawels Ltd.- SAC Agency Ltd.

10. Mrs. Yasmeen HaqueDirector

Chairman

Managing Director

Chairman

Proprietor


interest

None



Annexure - C


11. Mr. A.F.M. Mahfuzul HasanDirector - Joy Trading House

Director- Mutual Packaging Industries Ltd.- Softech Computer & Networks Ltd.- Dinkum Travels & Tours Ltd.

12. Mr. Md. WakiluddinDirector - Baridhara Enterprise

- Pioneer Insurance Co. Ltd.13. Mr. Saidur Rahman Ratan

Director - Ratan Enterprise- Mamtaj Jewellers

- Pioneer Insurance Co. Ltd.

Proprietor

Director

Proprietor

Proprietor

Director


interest



Annexure - DFigure in million Taka

SL#Items 2008 March 20071 Paid up Capital 997.92 997.92

2 Total Capital 2,408.80 2,370.95

3 Surplus in Capital Fund 22.52 43.12

4 Total Assets 30,854.91 32,181.90

5 Total Deposits 26,468.15 24,776.92

6 Total Loans and Advances 22,942.72 22,683.23

7 Total Contingent Liabilities 11,908.73 10,916.14

8 Lending-Deposit ratio 86.68% 91.55%

9 Classified Loans as % of Total loans and advances 6.03% 2.39%

10 Profit after provision and tax 36.20 210.8

11 Total Classified loans during the period 1,384.49 541.64

12 Total provision maintained against classified loans 377.40 217.43

13 Surplus/(deficit) in provision against classified loans -242.11 0.30

14 Cost of Fund 8.77% 9.15%

15 Earning assets 28,045.63 28,470.97

16 Non-interest earning assets 2,809.28 3,710.93

17 Return on Investments ( ROI ) 9.37% 4.10%

18 Return on Assets (ROA ) 0.47% 0.66%

19 Income from Investments 95.84 162.41

20 Earnings per Share ( Figure in Taka ) 14.51 34.18

21 Profit per Share ( Figure in Taka ) 14.51 34.18

22 Price-Earning ratio ( Times ) 34.67 11.97

As of March 31, 2008

Mutual Trust Bank LimitedFinancial Highlights



Due Diligence

Form A

Declaration (due diligence certificate) about responsibility of the Issue Manager in respect of the rights share document

This rights share offer document has been reviewed by us and we confirm after due examination that the rights share offer document constitutes full and fair disclosures about the rights issue and issuer and complies with the requirements of the Securities and Exchange Commission (Rights Issue) Rules, 2006; and the issue price is justified under the provisions of the Securities and Exchange Commission (Rights Issue) Rules, 2006. For Prime Finance & Investment Limited Sd/- Md. Akter Hossain Sannamat FCA, FCS Managing Director Place: Dhaka Dated: 19 June 2008

Form B

Declaration (due diligence certificate) about responsibility of the underwriter(s) in respect of the rights share offer document

This rights share offer document has been reviewed by us and we confirm after due examination that the issue price is justified under the provisions of the Securities and Exchange Commission (Rights Issue) Rules, 2006 and also that we shall subscribe for the under-subscribed rights shares within fifteen days of calling thereof by the issuer. The issuer shall call upon us for such subscription within ten days of closure of the subscription lists for the rights issue. For Prime Finance & Investment Limited Sd/- Md. Akter Hossain Sannamat FCA, FCS Managing Director Place: Dhaka Dated: 19 June 2008



Form C [Rule 8(h), 8(i) and 8(t)]

Auditors' Report to the Shareholders

We have audited the accompanying financial statement for the period from January 01,2008 to March 31, 2008 of Mutual Trust Bank Limited in accordance with the InternationalStandards of Auditing, as applicable in Bangladesh. We state that we have obtained all theinformation and explanation which we have required. In our opinion, except for the effecton the financial statements of the matters referred to in the following paragraphs, thefinancial statements are prepared in accordance with Bangladesh Accounting Standard.

1. There exist stuck up loans and advances aggregating to BDT 1,000,332,274/-against M/S. Nurun Nobi and its related parties of Khatungonj branch. The saidloans and advances have not been classified by the bank as there is a stay orderdated 28-11-2007 from the honorable High Court Division of Bangladesh SupremeCourt. As on April 17, 2008 Taka 200,000,000/- has been recovered against theabove outstanding.

2. There is a shortfall of BDT 242,107,000/- in specific provision required for classifiedadvances. There is an excess provision of BDT 87,442,000/- in general provision.

3. Income tax in respect of the year 2007 and subsequent period under audit has been

provided for without considering income tax on inadmissible provision forclassified advances though required under Income Tax Ordinance 1984.

4. During the period under audit the management of MTBL has not made provision

against deferred tax liability/deferred tax assets in the financial statements inaccordance with Bangladesh Accounting Standard (BAS)-12, “Income Taxes”.

5. The bank has a gratuity scheme, which covers all of its permanent employees. The

company has not made provision for gratuity during the period in compliance withBangladesh Accounting Standard (BAS) 19 “Employee Benefits”.

6. Direct confirmations against the balances held with Bangladesh Bank and the

balances with other Banks and financial institutions aggregating to BDT2,117,807,932/- have not been received by us although request letter have been sentto all of them.

Subject to the above, we also report that: (a) These financial statements have been drawn up in accordance with the

requirements of the Securities and Exchange Rule 1987, as amended, theCompanies Act, 1994 and other relevant laws where applicable and theInternational Accounting Standards, as applicable in Bangladesh.



(b) These financial Statements which are in agreement with the books of account of the

issuer company gives a true and fair view of the state of its affairs as at March 31, 2008 and of there result of its operations and cash flows for the period then ended except for the followings:

(c) Proper books of account have been kept by the issuer company as required by the

relevant laws.

(d) The expenditure incurred was for the purposes of the issuer company’s business. We also certify that above issuer company has declared the following dividend for each of the following five years immediately preceding the issue of rights share offer document under the Securities and Exchange Commission (Right Issue) Rules, 2006 and that the company has duly paid off the following amounts of the declared mentioned against respective year-

Declared Dividend Financial Year

Type of Dividend

Date of Dividend Declared

Rate (%) Total Amount (Taka)

Total Cash Dividend Paid

(Taka) 2007 Bonus 19.04.2008 25% 249,480,000 -

Cash 22.03.2007 20% 190,080,000 190,080,000 2006 Bonus 22.03.2007 5% 47,520,000 - Cash 23.03.2006 14% 120,960,000 120,960,000 2005 Bonus 23.03.2006 10% 86,400,000 -

2004 Bonus 10.03.2005 20% 144,000,000 - 2003 Bonus 04.04.2004 20% 120,000,000 -

For, HOWLADAR YUNUS & CO. Chartered Accountants

Dhaka, Bangladesh June 04, 2008 Neaz Mohammed, FCA Partner

Sd/-



Form D Due diligence certificate by the directors about their personal responsibility in respect of the

rights share offer document This rights share offer document has been prepared, seen, reviewed and approved by us and we collectively and individually accept full responsibility for the accuracy of the information given in the rights share offer document; relevant documents and financial statements submitted to the Commission and others concerned under the Securities and Exchange Commission (Rights Issue) Rules, 2006. We confirm, after making all reasonable enquiries, that all conditions concerning this rights issue and rights share offer document have been met. We further confirm that we have not concealed any information or statement, which might have any bearing on the information already made. In case of any default or failure on our part, civil, criminal or administrative action may be taken against us.

Sd/- Samson H. Chowdhury

Chairman

Sd/- Dr. Arif Dowla Vice-Chairman

Sd/- Syed Manzur Elahi

Director

Sd/-

Hedayetullah Director

Sd/-

Kh. Rashiduzzaman Director

Sd/-

Al-haj Syed Abul Hossain Director

Sd/-

M. A. Rouf Director

Sd/-

Md. Abdul Malek Director

Sd/-

Rashed Ahmed Chowdhury Managing Director

Sd/-

Yasmeen Haque Director

Sd/-

A.F.M. Mahfuzul Hasan Director

Sd/-

Md. Wakiluddin Managing Director

Sd/-

Saidur Rahman Ratan Director

Sd/-

Kazi Md. Shafiqur Rahman Managing Director



Additional disclosure by the management of the bank 1. As per Articles of Association, shares of the bank are divided into different groups. But presently the bank’s

shares are traded through CDBL under Central Depository System without having any group which is contradictory with the Articles of Association of the bank.

As a result the Board of Directors of the bank, in their 91st meeting held on 19 July 2008, have approved the proposal to delete Article 4.b, 4.c & 4.d of the Articles of Association of the bank related to grouping of shares subject to approval from the next Extra Ordinary General Meeting (EGM) of the bank.

2. As per Auditors’ Report, Financial Statements have been prepared in accordance with Bangladesh

Accounting Standards except BAS-12 & 19. Explanations of the management relating to this are given below:

BAS 12: Income Taxes We make provision against deferred tax liability/deferred tax assets in the financial statements at year end. Considering the interim period we did not compute any deferred tax liability/deferred tax assets in the financial statements as of 31.03.2008. We would ascertain the deferred tax liability/deferred tax assets in the financial statements as of December 31, 2008. BAS 19: Employees Benefits Gratuity is payable to all confirmed whole time employees of the bank who have been in the service of the bank for minimum period of 8 years without break. Upto 2007 we made provision amounting to Tk. 75.00 lac for gratuity on lump sum basis. At the end of year 2008 we would ascertain the actual liability. Accordingly we will make provision for gratuity in line with actual liability.



Offer Letter and Forms

Mutual Trust Bank Limited Registered Office: 68 Dilkusha C/A, Dhaka-1000

Folio No : Date: 3 September 2008 Name :

Letter of Offer for Rights Issue Dear Shareholder(s) We are pleased to inform you that the Board of Directors at its meeting held on 19 April 2008 recommended to issue Rights Shares in the ratio of 5:1 i.e. one rights share for every five ordinary shares held which was approved by the Shareholders in the Extra Ordinary General Meeting held on 5 June 2008. As a registered shareholder of …..... ordinary shares as on 2 September 2008, you are entitled to .…….. ordinary shares of Tk 100 each at par. If you wish to accept the above Rights Share in full or in part, you are required to submit completed “Application Form-A” annexed hereto with necessary payments. You may, however, renounce your rights in respect of all or part of your entitlement in favour of others in which case the “Renunciation Form-B” annexed here to be submitted duly filled in by you and the renouncee(s) along with necessary payments. The rights cannot be exercised for fraction of share i.e. below full unit of share. All the payments for accepted/renounced shares are to be made in cash or by P.O./DD/Cheque @ Tk 100 per share and to be deposited with any of the branches of Banker to the Issue during banking hours from 21 September 2008 to 19 October 2008 (both days inclusive). Any extension of time will be notified through national dailies. Payments through P.O./DD/Cheque payable to “Mutual Trust Bank Limited” and must be drawn on a bank in the same town where the branch of banker to the issue in which the application form has been submitted is situated. The offer will be deemed to have been declined if completed “Application Form-A” and/or “Renunciation Form-B” with necessary payments have not been received by 19 October 2008 or by such later date as may be notified through national dailies to that effect. A self-explanatory Rights Share Offer Documents is attached for your kind information and evaluation. By order of the Board Sd/- (Quamrul Islam Chowdhury) Deputy Managing Director & Company Secretary



Application Form-A

Mutual Trust Bank Limited Registered Office:

68 Dilkusha C/A, Dhaka-1000

Rights Issue of 2,494,800 Ordinary Shares of Tk 100 each at par

Last date of acceptance and Application: 19 October 2008

FORM OF ACCEPTANCE AND APPLICATION FOR SHARES The Directors Date:.................................. Mutual Trust Bank Limited 68 Dilkusha C/A Dhaka-1000 Dear Sirs, I/We apply for allotment of ordinary shares indicated below in response to your letter dated 3 September 2008 I/We hereby agree to accept the shares as may be allotted to me / us on the term laid down in the letter of offer and made the necessary payment at an issue price of Tk 100 per share.

Share Register Folio No.

Shares held as on2 September

2008

No. of shares offered

Total shares accepted

Total shares applied for

(Taka)

Total amount paid

Yours faithfully, Name (in block ): ………………………………..……. Signature

Address:……………………………………………….. Name (in block ): …………………………… ………. Signature

Address:……………………………………………….. BO-ID: As per provision of the Depository Act, 1999 and regulations made thereunder, rights share shall only be issued in dematerialised condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary Owner (BO) Account number in the application form. Note: Signature must be the same as was furnished to the Company earlier.

ACKNOWLEDGEMENT RECEIPT OF SHARE MONEY

Received Tk……………………………….… (Taka…………………………………………………...…) only from Mr./Ms……………………………………………………………………………………………………., folio No. …………………………..for………………No.(s) of rights share in Cash / Pay order / Cheque no………….............… date …….….............. of ……………………………. Bank ……….........…….. Branch. Application SI. No. (Bank’s Seal) Signature of Receiving Officer Date



Banker to the Issue Mutual Trust Bank Limited Principal Branch, Dhaka Panthapath Branch, Dhaka Babu Bazar Branch, Dhaka Uttara Model Town Branch, Dhaka Progati Sarani Branch, Dhaka Mograpara Branch, Narayangonj Sreenagar Branch, Munshigonj Pallabi Branch, Dhaka Dilkusha Branch, Dhaka Dhanmondi Branch, Dhaka Bashundhara City Branch, Dhaka Chandra Branch, Gazipur Gulshan Branch, Dhaka Savar Branch, Dhaka Fulbaria Branch, Dhaka Madaripur Branch, Madaripur Dholaikhal Branch, Dhaka Aganagar Branch, Dhaka Agrabad Branch, Chittagong CDA Avenue Branch, Chittagong Khatunganj Branch, Chittagong Aman Bazar Branch, Chittagong Chakoria Branch, Cox’s Bazar Nazirhat Branch, Chittagong Jubilee Road Branch, Chittagong Raipur Branch, Laxmipur Sylhet Branch, Sylhet Moulvi Bazar Branch, Moulvi Bazar Pabna Branch, Pabna Joypurhat Branch, Joypurhat

The City Bank Limited Principal Office, Dhaka B B Avenue Br, Dhaka Dhaka Chamber Br, Dhaka Dhanmondi Br, Dhaka Foreign Exchange Br, Dhaka Gulshan Br, Dhaka Imamgonj Br, Dhaka Islami Banking Br, Dhaka Johnson Road Br, Dhaka Kawran Bazar Br, Dhaka Mirpur Br, Dhaka Mouchak Br, Dhaka New Market Br, Dhaka Shymoli Br, Dhaka Uttara Br, Dhaka VIP Road Br, Dhaka DSE Nikunja Br, Dhaka Tongi Br, Gazipur Tanbazar Br, Narayangonj Comilla Br, Comilla Agrabad Br, Chittagong Jubilee Road Br, Chittagong Khatungonj Br, Chittagong O R Nizam Road Br, Chittagong Bandar Bazar Br, Sylhet Zinda Bazar Br, Sylhet Bogra Br, Bogra Rajshahi Br, Rajshahi Barisal Br, Barisal Khulna Br, Khulna



Renunciation Form-B

Mutual Trust Bank Limited Registered Office:

68 Dilkusha C/A, Dhaka-1000

Rights Issue of 2,494,800 Ordinary Shares of Tk 100 each at par

Last date of acceptance and/or Renunciation: 19 October 2008

FORM OF RENUNCIATION The Directors Date: ................................ Mutual Trust Bank Limited 68 Dilkusha C/A Dhaka-1000 Dear Sirs, I/We hereby renounce my/our rights shares to the share(s) offered to me/us as noted below in favour of person(s) accepting the same and signing below in Application by Renouncee(s) and apply for allotment in his/her/their/names at next page.

Share Register Folio No.

Shares held as on 2 September 2008

No. of shares offered

No. of shares renounced

Value of shares renounced

Name and address of renuouncee

Yours faithfully, Name (in block) : …………..……………………………. Signature Address:…………………………………………………… BO-ID: As per provision of the Depository Act, 1999 and regulations made thereunder, rights share shall only be issued in dematerialised condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary Owner (BO) Account number in the application form. Note: Signature must be the same as was furnished to the Company earlier.



Renunciation Form-C

APPLICATION BY RENOUNCEE (S) The Directors Date: ..................................... Mutual Trust Bank Limited 68 Dilkusha C/A Dhaka-1000 Dear Sirs, As the shareholder(s) at pre-page has/have renounced his/her/their rights to the shares offered, in my/our favour, I/We do hereby apply for the number of shares noted above as renounced, by making payment of Tk. ..................................... being the value of .............................. shares at an issue price of Tk 100 per share. Yours faithfully, (1) Signature................................................................... (2) Signature ....................................................................

Name (in block ):....................................................... Name (in block ): .......................................................

S/O.D/O.W/O: .......................................................... S/O.D/O.W/O: ..........................................................

Address: .................................................................. Address: ....................................................................

Folio No: ................................................................. Folio No: .................................................................... BO-ID: As per provision of the Depository Act, 1999 and regulations made thereunder, rights share shall only be issued in dematerialised condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary Owner (BO) Account number in the application form. Note: Signature must be the same as was furnished to the Company earlier.

ACKNOWLEDGEMENT RECEIPT OF SHARE MONEY Received Tk …………………………… (Taka ………………………................……………………………….…) only

from Mr./Ms …………………………………………………………...........……………..……….., folio/BO Account

no. …..…….....................................................………… for ……………………no. (s) of rights shares in Cash/Pay

order/Cheque no. ………….................... Date ……………………. of ……….……………………………..…

Bank……...................................………............Branch.

Application SI. No. (Bank’s Seal) Signature of Receiving Officer Date: