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"If you have any query about this document, you may consult issuer, issue manager and underwriter."

PROSPECTUS OF TRUST BANK LIMITED

For

ISSUE OF 4,666,700 ORDINARY SHARES AT TK.150 EACH INCLUDING A PREMIUM OF TK.50 PER SHARE TOTALING TK. 700,005,000 IS BEING MADE OPENING DATE FOR SUBSCRIPTION: 15/7/2007 CLOSING DATE FOR SUBSCRIPTION: 19/7/2007 For Non-Resident Bangladeshi quota, subscription closes on: 28/7/2007

Underwriters

Arab Bangladesh Bank Ltd. BCIC Bhaban (10th floor), 30-31, Dilkusha C/A, Dhaka-1000. Mutual Trust Bank Ltd. 68, Dilkusha C/A, Dhaka-1000. Bank Asia Limited Corporate Office, 113-116, Old Airport Road Rangs Bhaban (8th floor), Tejgaon, Dhaka-1215.

ICB Capital Management Ltd. BSB Building(14th floor), 8, Rajuk Avenue, Dhaka-1000. Fidelity Assets & Securities Co. Ltd. Nitol centre(2nd floor),71,Mohakhali C/A, Dhaka-1212. Bay Leasing & Investment Limited Printers Building(7th floor), 5,Rajuk Avenue, Dhaka-1000.

Standard Bank Limited LankaBangla Finance Limited Chamber Building(3rd floor), 122-124, Motijheel C/A, 20, Kemal Ataturk Avenue, Banani, Dhaka-1000. Dhaka-1213. Capital Market Services Ltd. GSP Finance Company (Bangladesh) Ltd. Suite no. 702(7th floor), 28,Dilkusha C/A, Dhaka-1000. 1/C, Paribagh, Mymensing Road Ramna, Dhaka-1000. Grameen Capital Management Ltd. Agrani Insurance Co. Ltd. Grameen Bank Bhaban(10th floor), Mirpur-2, Dhaka-1216. Moon Mansion(6th floor), 12, Dilkusha C/A, Dhaka-1000. Bangladesh General Insurance Company Limited 42, Dilkusha, Motijheel C/A, Dhaka-1000.

Credit Rating by Credit Rating Information and Services Limited

Long Term Entity Rating Date of Rating Short Term

AApril 23, 2007

ST - 3

Issue date of the Prospectus: 17th May 2007 The issue shall be placed in "N" category

Manager to the Issue

Amin Court, 4th Floor, 62-63, Motijheel C/A., Dhaka-1000. Phone: +88029559602, +88029567726, Fax: 880-2-9558330 Web-site: www.aaawebbd.com E-mail: [email protected]

Head Office: Peoples Insurance Bhaban, 36 Dilkusha C/A (17th Floor), Dhaka-1000. Tel: 9553458, 7114203 (Dir.), PABX: 9570261, 9570263, 9572012-3 Fax: 880-2-9572315, Telex: 632297 TBLC BJ, Swift:TTBLBDH E-mail: [email protected], Web: www.trustbank.com.bd "CONSENT OF THE SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER, UNDERWRITER AND/OR AUDITOR".

Trust Bank Limited

AVAILABILITY OF PROSPECTUS

Prospectus of the Company may be available at the following addresses: Particulars Company Trust Bank Limited 36, Dilkusha C/A, Dhaka-1000. Issue Manager AAA Consultants & Financial Advisers Suite # 404, Amin Court, 62-63 Motijheel, Dhaka-1000. Underwriters Arab Bangladesh Bank Ltd. BCIC Bhaban (10th floor), 30-31, Dilkusha C/A, Dhaka-1000. Mutual Trust Bank Ltd. 68, Dilkusha C/A, Dhaka-1000. Bank Asia Limited Corporate Office, 113-116, Old Airport Road Rangs Bhaban (8th floor), Tejgaon, Dhaka-1215. Standard Bank Limited Chamber Building(3rd floor), 122-124, Motijheel C/A, Dhaka-1000. Capital Market Services Ltd. Suite no. 702(7th floor), 28,Dilkusha C/A, Dhaka-1000. Grameen Capital Management Ltd. Grameen Bank Bhaban(10th floor), Mirpur-2, Dhaka-1216. Agrani Insurance Co. Ltd. Moon Mansion(6th floor), 12, Dilkusha C/A, Dhaka-1000. ICB Capital Management Ltd. BSB Building(14th floor), 8, Rajuk Avenue, Dhaka-1000. Fidelity Assets & Securities Co. Ltd. Nitol centre(2nd floor),71,Mohakhali C/A, Dhaka-1212. Bay Leasing & Investment Limited Printers Building(7th floor), 5,Rajuk Avenue, Dhaka-1000. LankaBangla Finance Limited 20, Kemal Ataturk Avenue, Safura Tower (11th floor), Banani, Dhaka-1213. GSP Finance Company (Bangladesh) Ltd. 1/C, Paribagh, Mymensingh Road Ramna, Dhaka-1000. Bangladesh General Insurance Co. Ltd. 42, Dilkusha, Motijheel C/A, Dhaka-1000. Stock Exchanges Dhaka Stock Exchange Limited (DSE) 9/F, Motijheel C.A., Dhaka-1000. Chittagong Stock Exchange Limited (CSE) CSE Building, 1080, Sk. Mujib Road, Agrabad C.A., Chittagong DSE Library CSE Library 9564601-7 9666944-8 714632-3 720871-3 Mr. Khwaja Arif Ahmed Managing Director & CEO 9559602 9567726 Mr. Farhad Uddin, ACMA Company Secretary 9562042

Contact Person

Telephone Number

Mr. Mufakhkharul Islam Executive Vice President Mr.Md. Nazrul Islam Mazumder Principal Officer, Merchant Banking Division Mr. Md. Ashrafuddin Ahmed Vice President Mr. A.F.M Nizamul Islam Chowdhury Company Secretary Sayed Mustaque Ahmed ACA Vice President Mr.Shieadul Morsalin Manager Mr. Md. Anwar Hossaion SEVP(F & A) and Company Secretary Mr. Md. Iftikhar-uz-Zaman Chief Executive Officer Mr. Mohammed N.S. Kabir Managing Director & CEO Mr. Md. Mofizul Islam Senior officer Mr. Barun Prasad Paul Assistant Manager Mr. Md. Ruknuzzaman Assistant General Manager Mr. Md.Mustafa Deputy General Manager

9560312 9570563 9137512-5 8155856-7 7161979 9562715 7168652 9005257-69 ext-1225 9571604-6, 9571361-2 7160326 7160627 8851595(Dir) 9565026 9568599 9561238

9674306 7161223

Prospectus is also available on the web site (www.trustbank.com.bd, www.secbd.org, www.aaawebbd.com www.dsebd.org, www. csebd.com) and Public Reference Room of the SEC for reading and study.

Name and Address of the Auditor

BSRS Bhaban (13th Floor), 12 Kawran Bazar C/A, Dhaka-1215, Bangladesh. Tele: 880-2-8144347-52, Fax:880-2-8144353-54 E-mail:[email protected], Web: www.acnabin-bd.com.

ACNABIN Chartered Accountants

II

TABLE OF CONTENTS

PARTICULARS Declaration about the Responsibility of Directors.................................................................................... Due Diligence Certificate of Manager to the Issue ........................ ..................................................... Risk Factors........................................................................................................................................ Use of Proceeds........................................................................................................................................ Description of Business............................................................................................................................ Description of Property............................................................................................................................ Plan of Operation and Discussion of Financial Condition........................................................................ Directors and Officers.................................................................................................................. Short Bio-data of Directors.................................................................................................................... Involvement of officers and directors in certain legal proceedings......................................................... Certain relationship and related transactions.......................................................................................... Executive Compensation.......................................................................................................................... Option Granted to Officers, Directors and Employees............................................................................. Transactions with Directors................................................................................................................... Tangible assets per Share........................................................................................................................ Ownership of the Company's securities................................................................................................... Determination of Offering Price............................................................................................................... Market for the Securities being Offered................................................................................................... Description of Securities Outstanding or being Offered.......................................................................... Debt Securities ........................................................................................................................................ Lock in Provision ..................................................................................................................................... Availability of securities............................................................................................................................ Application for Subscription..................................................................................................................... Underwriter's Obligation ......................................................................................................................... Corporate Information.............................................................................................................................. Application Form ..................................................................................................................................... Bankers' to the Issue............................................................................................................................... Application Form (NRB)............................................................................................................................ Credit Rating Report of TBL ................................................................................................................... Auditors Reports & Accounts................................................................................................................... Ratio Analysis........................................................................................................................................... Auditors Reports in pursuance of section 135(1) ................................................................................... Additional disclosure by the auditor ....................................................................................................... Page No. 01 03 05 07 07 11 12 17 18 19 20 21 21 21 22 23 24 25 26 26 27 28 28 29 30 31 33 34 36 50 80 81 85

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DEFINITION AND ELABORATION OF THE ABBREVIATED WORDS AND TECHNICAL TERMS USED IN THE PROSPECTUS

AAA Allotment BB BO A/C Certificate Commission Companies Act CSE DSE GOB FC Account FI IPO Issue Issuer NAV NBR NRB Offering Price Registered Office RJSC SEC Securities Sponsors STD Account Subscription TBL The Company

: : : : : : : : : : : : : : : : : : : : : : : : : : : :

AAA Consultants & Financial Advisers Letter of allotment for shares Bangladesh Bank Beneficial Owner account or Depository Account Share Certificate Securities and Exchange Commission Companies Act, 1994 (Act. No. XVIII of 1994) Chittagong Stock Exchange Limited Dhaka Stock Exchange Limited The Government of People's Republic of Bangladesh Foreign Currency Account Financial Institution Initial Public Offering Public Issue Trust Bank Limited Net Asset Value of the Company National Board of Revenue Non Resident Bangladeshi Price of the securities of Trust Bank Limited being offered 36, Dilkusha C/A, Dhaka-1000. Registrar of Joint Stock Companies & Firms Securities and Exchange Commission Shares of Trust Bank Limited The sponsor shareholders of Trust Bank Limited. Short Term Deposit Account Application money Trust Bank Limited Trust Bank Limited

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DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM

"As per provisions of the Depository Act, 1999 and regulations made there under, share of the company will be issued in dematerialized form only and for this purpose Trust Bank Limited has signed an agreement with the Central Depository Bangladesh Ltd. (CDBL). Therefore, all transfer/ transmission, splitting or conversion will take place in the CDBL system and any further issuance of shares (including right/bonus) will also be issued in dematerialized form only."

CONDITIONS UNDER 2CC OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969

PART-A 1. The company shall go for Initial Public Offer (IPO) for 4,666,700 ordinary shares only of Tk.150.00 (Taka One hundred Fifty) each including a premium of Tk. 50 per share worth Tk.700,005,000.00 (Taka Seventy crore Five thousand ) only following the Securities and Exchange Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and regulations issued there under. The abridged version of the prospectus, as approved by the Commission, shall be published by the issuer in four national daily newspapers (in two Bengali and two English), within 03 (three) working days of issuance of this letter. The issuer shall post the full prospectus vetted by the Securities and Exchange Commission in the issuer's website and shall also put on the web sites of the Commission, stock exchanges, and the issue manager within 03 (three) working days from the date of issuance of this letter which shall remain posted till the closure of the subscription list. The issuer shall submit to SEC, the stock exchanges and the issue manager a diskette containing the text of the vetted Prospectus in "MS-Word" format. Sufficient copies of prospectus shall be made available by the issuer so that any person requesting a copy may receive one. A notice shall be placed on the front of the application form distributed in connection with the offering, informing that interested persons are entitled to a prospectus, if they so desire, and that copies of prospectus may be obtained from the issuer and the issue manager. The subscription application shall indicate in bold type that no sale of securities shall be made, nor shall any money be taken from any person, in connection with such sale until twenty five days after the prospectus has been published. The company shall submit 40 (forty) copies of the printed prospectus to the Securities and Exchange Commission for official record within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper. The issuer company and the issue manager shall ensure transmission of the prospectus, abridged version of the prospectus and relevant application forms for NRBs through e-mail, simultaneously with publication of the abridged version of the prospectus, to the Bangladesh Embassies and Missions abroad and shall also ensure sending of the printed copies of abridged version of the prospectus and application forms to the said Embassies and Missions within five working days of the publication date by express mail service (EMS) of the postal department. A compliance report shall be submitted in this respect to the SEC jointly by the issuer and the issue manger within two working days from the date of said dispatch of the prospectus & the forms. The paper clipping of the published abridged version of the prospectus, as mentioned at condition 2 above, shall be submitted to the Commission within 24 hours of the publication thereof. The company shall maintain separate bank account(s) for collecting proceeds of the Initial Public Offering and shall also open FC account(s) to deposit the application money of the Non- Resident Bangladeshis (NRBs) for IPO purpose, and shall incorporate full particulars of said FC account(s) in the prospectus. The company shall open the abovementioned accounts for IPO purpose; and close these accounts after refund of over-subscription. Non-Resident Bangladeshi (NRB) means Bangladeshi citizens staying abroad including all

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those who have dual citizenship (provided they have a valid Bangladeshi passport) or those, whose foreign passport bear a stamp from the concerned Bangladesh Embassy to the effect that no visa is required to travel to Bangladesh. 8. The issuer company shall apply to all the stock exchanges in Bangladesh within 07(seven) working days from the date of issuance of this letter and shall simultaneously submit the vetted prospectus with all exhibits, as submitted to SEC, to the stock exchanges. The following declaration shall be made by the company in the prospectus, namely:"Declaration about Listing of Shares with the Stock Exchange(s): None of the stock exchange(s), if for any reason, grants listing within 75 days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within fifteen days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (seventy five) days, as the case may be. In case of non-refund of the subscription money within the aforesaid fifteen days, the company directors, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) per month above the bank rate, to the subscribers concerned. The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within seven days of expiry of the aforesaid fifteen days time period allowed for refund of the subscription money." 10. The subscription list shall be opened and the sale of securities commenced after 25 (twenty five) days of the publication of the abridged version of the prospectus and shall remain open for 5 (Five) consecutive banking days. 11. A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking "Account Payee only". Application shall be sent by the NRB applicants to the issuer company within the closing date of the subscription so as to reach the same to the company by the closing date plus nine days. Applications received by the company after the above time period will not be considered for allotment purpose. 12. The company shall apply the spot buying rate (TT clean) in US Dollar, UK Pound Sterling and Euro of Sonali Bank, which shall be mentioned in the Prospectus, as prevailed on the date of opening of the subscription for the purpose of application of the NRBs and other non-Bangladeshi persons, where applicable. 13. The company and the issue manager shall ensure prompt collection/clearance of the foreign remittances of NRBs and other non-Bangladeshis, if applicable, for allotment of shares. 14. Upon completion of the period of subscription for securities the issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the preliminary status of the subscription within 05 (five) working days, in respect of the following matters, namely: (a) (b) (c) Total number of securities for which subscription has been received; Amount received from the subscription; and Amount of commission paid to the banker to the issue.

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15. The issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the list of valid and invalid applicants (i.e. final status of subscription) to the Commission within 3 (three) weeks after the closure of the subscription along with bank statement (original), branch-wise subscription statement, NRB application forms (photocopy attested by the CEOs of the issuer company and the issue

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manager). The list of valid and invalid applicants shall be finalized after examination with the CDBL in respect of BO accounts and particulars thereof. 16. The IPO shall stand cancelled and the application money shall be refunded immediately (but not later than 6(six) weeks from the date of the subscription closure) if any of the following events occur: (a) Upon closing of the subscription list it is found that the total number of valid applications (in case of under subscription including the number of the underwriter) is less than the minimum requirement as specified in the listing regulations of the stock exchange(s) concerned; or (b) At least 50% of the IPO is not subscribed. 17. 10% of total public offering shall be reserved for non-resident Bangladeshi (NRB) and 10% for mutual funds and collective investment schemes registered with the Commission, and the remaining 80% shall be open for subscription by the general public. In case of under-subscription under any of the 10% categories mentioned above, the unsubscribed portion shall be added to the general public category and, if after such addition, there is over subscription in the general public category, the issuer and the issue manager shall jointly conduct an open lottery of all the applicants added together. 18. All the applicants shall first be treated as applied for one minimum market lot of 50 shares worth Tk.7,500/-. If, on this basis, there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for each application, irrespective of the application money. In case of over-subscription under any of the categories mentioned hereinabove, the issuer and the issue manager shall jointly conduct an open lottery of all the applications received under each category separately in presence of representatives from the issuer, the stock exchanges and the applicants, if there be any. 19. Lottery (if applicable) shall be held within 5 (five) weeks from closure of the subscription date. 20. The company shall issue share allotment letters to all successful applicants within 6 (six) weeks from the date of the subscription closing date. Within the same time, Refund to the unsuccessful applicants shall be made in the currency in which the value of securities was paid for by the applicants without any interest, through Account Payee Cheque/ refund warrants with bank account number, bank's name and Branch as indicated in the securities application forms payable at Dhaka/ Chittagong/ Khulna/ Rajshahi/ Barisal/ Sylhet/ Bogra, as the case may be. A compliance report in this regard shall be submitted to the Commission within 7(seven) weeks from the date of closure of subscription. 21. The company shall furnish the List of Allotees to the Commission and the stock exchange(s) simultaneously in which the shares will be listed, within 24 (twenty four) hours of allotment. 22. In the event of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the underwriter(s) (subject to para -16 above). The issuer must notify the underwriter to take up the underwritten shares within 10 (ten) days of the subscription closing date on full payment of the share money within 15(fifteen) days of the issuer's notice. The underwriter shall not share any underwriting fee with the issue manager, other underwriters, issuer or the sponsor group. 23. All issued shares of the issuer at the time of according this consent shall be subject to a lock- in period of three years from the date of issuance of prospectus or commercial operation, whichever comes later: Provided that the persons, other than directors and those who hold 5% or more, who have subscribed to the shares of the company within immediately preceding two years of according consent, shall be subject to a lock-in period of one year from the date of issuance of prospectus or commercial operation, whichever comes later. 24. Either a Jumbo Share (one for each of the existing Sponsors/ Directors/ Shareholders) in respect of the shares already issued shall be issued covering together respective total holding, which shall contain the expiry date of lock-in period or Sponsors/Directors/Promoters/Shareholders' shareholding shall be converted into demat form but shall be locked-in for three years as per the condition at para-23 above. 25. In case of Jumbo Share Certificate issued to the existing Sponsors/ Directors/ Shareholders, the said share certificates shall be kept under custody of a security custodian bank registered with SEC during the lock-in

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period. The name and branch of the bank shall be furnished to the Commission jointly by the issuer and the issue manager, along with a confirmation thereof from the custodian bank, within one week of listing of the shares with the stock exchange(s). 26. In case of dematerialization of shares held by the existing Sponsors/ Directors/ Shareholders, the copy of dematerialization confirmation report generated by CDBL and attested by the managing director of the company along with lock-in confirmation shall be submitted to SEC within one week of listing of the shares with the stock exchange(s). 27. The company shall apply to the stock exchanges for listing within 7(seven) working days of issuance of this letter and shall simultaneously submit to the Commission attested copies of the application filed with the stock exchanges. 28. The company shall not declare any benefit other than cash dividend based on the financial statement for the Year ended December 31, 2006. Part ­B 1. The issue manager (i.e. AAA Consultants & Financial Advisers) shall ensure that the abridged version of the prospectus and the full prospectus is published correctly and in strict conformity without any error/omission, as vetted by the Securities and Exchange Commission. The issue manager shall carefully examine and compare the published abridged version of prospectus on the date of publication with the copy vetted by SEC. If any discrepancy/ inconsistency is found, both the issuer and the issue manager shall jointly publish a corrigendum immediately in the same newspapers concerned, simultaneously endorsing copies thereof to SEC and the stock exchange(s) concerned, correcting the discrepancy/inconsistency as required under `Due Diligence Certificates' provided with SEC. Both the issuer company and the issue manager shall, immediately after publication of the prospectus and its abridged version, jointly inform the Commission in writing that the published prospectus and its abridged version are verbatim copies of the same as vetted by the Commission. The fund collected through IPO shall not be utilized prior to listing with stock exchange and that utilization of the said fund shall be effected through banking channel, i.e. through account payee cheque, pay order or bank drafts etc. The company shall not account for any upward revaluation of its fixed assets creating reserve without prior permission from the Securities and Exchange Commission. The company shall furnish report to the Commission on utilization of IPO proceeds within 15 days of the closing of each quarter until such fund is fully utilized, as mentioned in the schedule contained in the prospectus, and in the event of any irregularity or inconsistency, the Commission may employ or engage any person, at issuer's cost, to examine whether the issuer has utilized the proceeds for the purpose disclosed in the prospectus. All transactions, excluding petty cash expenses, shall be effected through the company's bank account(s). Proceeds of the IPO shall not be used for any purpose other than those specified in the prospectus. Any deviation in this respect must have prior approval of the shareholders in the EGM under intimation to SEC and stock exchange(s). Directors on the company's Board: This will be in accordance with the applicable laws, rules and regulations.

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PART-C

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All the above conditions imposed under section 2CC of the Securities and Exchange Ordinance, 1969 shall be incorporated in the prospectus immediately after the page of the table of contents, with a reference in the table of contents, prior to its publication. The Commission may impose further conditions/restrictions etc. from time to time as and when considered necessary which shall also be binding upon the issuer company.

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PART-D

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As per provision of the Depository Act, 1999 and regulations made there under, shares will only be issued in dematerialized condition. All transfer/ transmission/ splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and any further issuance of shares (right/bonus) will be issued in dematerialized form only. An applicant (including NRB) shall not be able to apply for allotment of shares without beneficial owner account (BO account).

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The issue manager shall also ensure due compliance of all above.

GENERAL INFORMATION

AAA Consultants & Financial Advisers have prepared this Prospectus from information supplied by Trust Bank Limited (the Company) and also several discussions with Chairman, Managing Director and related executives of the Company. The Directors of both Trust Bank Ltd., AAA Consultants & Financial Advisers collectively and individually, having made all reasonable inquiries, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material respect and that there are no other material facts, the omission of which, would make any statement herein misleading.

No person is authorized to give any information or to make any representation not contained in this Prospectus and if given or made, any such information or representation must not be relied upon as having been authorized by the Company or AAA Consultants & Financial Advisers. The Issue as contemplated in this document is made in Bangladesh and is subject to the exclusive jurisdiction of the courts of Bangladesh. Forwarding this Prospectus to any person resident outside Bangladesh in no way implies that the Issue is made in accordance with the laws of that country or is subject to the jurisdiction of the laws of that country. A copy of this Prospectus may be obtained from the Head Office of Trust Bank Limited, AAA Consultants & Financial Advisers, the underwriters and the Stock Exchanges where the securities will be traded.

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DECLARATION ABOUT THE RESPONSIBILITY OF THE DIRECTORS INCLUDING CEO OF THE COMPANY "TRUST BANK LIMITED" IN RESPECT OF THE PROSPECTUS.

This prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility for the authenticity and accuracy of the statements made, information given in the prospectus, documents, financial statements, exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after making all reasonable inquiries that all conditions concerning this public issue and prospectus have been met and that there are no other information or documents the omission of which make any information or statements therein misleading for which the Commission may take any civil, criminal or administrative action against any or all of us as it may deem fit. We also confirm that full and fair disclosure has been made in this prospectus to enable the investors to make a well informed decision for investment. Sd/. (Lt Gen Moeen U Ahmed, ndc, psc) Chairman Sd/(Brig Gen S M Mahbubul Karim) Director Sd(Brig Gen Mohd Mahbubul Hasan, ndc, psc) Director Sd/(Maj Gen Md Matiur Rahman, ndu, psc) Vice Chairman Sd/(Brig Gen Md Rafiqul Islam, ndc, psc) Director Sd(Brig Gen Md. Aminul Hasan, ndc, psc) Director Sd/(Brig Gen Md Zillur Rahman, MCPS, M.Sc) Director Sd/(Brig Gen Md Shawkat Hossain, psc) Director SdIqbal U Ahmed Managing Director

CONSENT OF DIRECTOR(S) TO SERVE AS DIRECTOR(S)

We hereby agree that we have been serving as Director(s) of Trust Bank Limited and continue to act as a Director(s) of the Bank. Sd/. (Lt Gen Moeen U Ahmed, ndc, psc) Chairman Sd/(Brig Gen S M Mahbubul Karim) Director Sd(Brig Gen Mohd Mahbubul Hasan, ndc, psc) Director Sd/(Maj Gen Md Matiur Rahman, ndu, psc) Vice Chairman Sd/(Brig Gen Md Rafiqul Islam, ndc, psc) Director Sd(Brig Gen Md. Aminul Hasan, ndc, psc) Director Sd/(Brig Gen Md Zillur Rahman, MCPS, M.Sc) Director Sd/(Brig Gen Md Shawkat Hossain, psc) Director SdIqbal U Ahmed Managing Director

DECLARATION ABOUT FILING OF PROSPECTUS WITH THE REGISTRAR OF JOINT STOCK COMPANIES

A dated and signed copy of this prospectus has been filed for registration with the Registrar of Joint Stock Companies and firms, Bangladesh, as required by Section 138(1) of the Companies Act, 1994 on 20th May 2007 vide receipt no. 0123828.

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DECLARATION BY THE ISSUE MANAGERS ABOUT THE APPROVAL FROM SEC FOR ANY MATERIAL CHANGES REGARDING PROSPECTUS OF TRUST BANK LIMITED.

In case of any material changes in any agreement, contract, instrument, facts and figures, operational circumstances and statement made in the Prospectus subsequent to the preparation of the prospectus and prior to its publication shall be incorporated in the prospectus and the said prospectus should be published with the approval of the Commission.

Sd/Khwaja Arif Ahmed Managing Director & CEO AAA Consultants & Financial Advisers

DECLARATION BY THE ISSUER ABOUT THE APPROVAL FROM SEC FOR ANY MATERIAL CHANGES REGARDING PROSPECTUS OF TRUST BANK LIMITED.

In case of any material changes in any agreement, contract, instrument, facts and figures, operational circumstances and statement made in the Prospectus subsequent to the preparation of the prospectus and prior to its publication shall be incorporated in the prospectus and the said prospectus should be published with the approval of the Commission. Sd/Iqbal U Ahmed Managing Director Trust Bank Limited

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DUE DILIGENCE CERTIFICATE OF MANAGER TO THE ISSUE

Sub: Public Offer of 4,666,700 Ordinary Shares of Taka 150 each including a premium of Tk. 50 per share of Trust Bank Limited. We, the under-noted Manager to the Issue to the above-mentioned forthcoming issue, state as follows: 1. We, while finalizing the draft prospectus pertaining to the said issue, have examined various documents and other materials as relevant for adequate disclosures to the investors; and 2. On the basis of such examination and the discussions with the issuer company, it's directors and officers, and other agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company;WE CONFIRM THAT: a) b) c) the draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers relevant to the issue; all the legal requirements connected with the said issue have been duly complied with; and the disclosures made in the draft prospectus are true, fair and adequate to enable the investors to make a well informed decision for investment in the proposed issue.

For Manager to the issue Sd/Khwaja Arif Ahmed Managing Director & CEO AAA Consultants & Financial Advisers

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DUE DILIGENCE CERTIFICATE OF THE UNDERWRITERS

Sub: Public Offer of 4,666,700 Ordinary Shares of Taka 150 each including a premium of Tk.50 per share of Trust Bank Limited. We, the under-noted Underwriter(s) to the above-mentioned forthcoming issue, state individually and collectively as follows: 1. We, while underwriting the above mentioned issue on a firm commitment basis, have examined the draft prospectus, other documents and materials as relevant to our underwriting decision; and 2. On the basis of such examination and the discussions with the issuer company, it's directors and officers, and other agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company;WE CONFIRM THAT: (a) (b) (c) all information as are relevant to our underwriting decision have been received by us and the draft forwarded to the Commission has been approved by us; prospectus

we shall subscribe and take up the un-subscribed securities against the above-mentioned public issue within 15 (fifteen) days of calling up thereof by the issuer; and this underwriting commitment is unequivocal and irrevocable.

For Underwriters Sd/Managing Director Arab Bangladesh Bank Ltd. Mutual Trust Bank Ltd. Bank Asia Limited Standard Bank Ltd. Capital Market Services Ltd. Grameen Capital Management Ltd. Agrani Insurance Co. Ltd. ICB Capital Management Ltd. Fidelity Assets & Securities Co. Ltd. Bay Leasing & Investment Limited LankaBangla Finance Limited GSP Finance Company (Bangladesh) Ltd. Bangladesh General Insurance Co. Ltd.

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RISK FACTORS AND MANAGEMENT PERCEPTION REGARDING RISK

As with all investments, investors should be aware that there are risks associated with an investment in the Bank. These risks could result in loss of income or capital investment. Investors are encouraged to seek independent financial advice. Interest Rate Risk

The Bank's financing in different sectors are generally structured at fixed and variable rates for specified terms. Increase in interest rates of borrowings could narrow or eliminate the spread, or result in a negative spread, and hence, may have a material adverse effect on the Bank's business, financial condition and overall operations.

Although the consequences of unusual and abrupt increase in borrowing rate cannot be avoided, the bank takes all the appropriate measures to minimize the negative consequences. For instance, Trust Bank Ltd. currently pursues a policy under which interest rate can be revised for adjustment with any unusual and abrupt change at its own discretion as and when required. Liquidity Risk

The Bank's business is funded through borrowings and deposits from retail customers and call money from local banks. Dependency on call money and diminishing level of retail deposit may place it in a disadvantageous position. The management of Trust Bank Limited as a matter of policy priority intends to lessen dependency on call money by ensuring proper liquidity management.

The management of Trust Bank Limited is aware of the situation and it has already started diversifying sources of funds to reduce the dependency on market external sources. Trust Bank Ltd. has already introduced several deposit schemes to diversify deposit base by attracting retail customers alongside the corporate cash management client for ensuring balanced mix. Trust Bank Limited has the plan to open more branches in different prospective areas which will necessarily pave them the way to impart diversity in their business portfolio which will be instrumental to ensure better liquidity risk management. Exchange Rate Risk

Foreign exchange risk is defined as the potential change in earnings arising from change in market prices. The foreign exchange risk of the Bank is minimal as all the transactions are carried out on need of the customers against payment under L/C Commitments and other remittance requirement.

No dealing on Bank account was conducted during the year. Treasury department independently conducts transactions and the back office of treasury is responsible for verification of the deals and passing of their entries in books of accounts. All foreign exchange transaction is revalued at Mark-to-Market Rate as determined by Bangladesh Bank at the month-end. All NOSTRO accounts are reconciled on monthly basis and outstanding entry beyond 30 days is reviewed by the management for its settlement. So the bank management is prudently managing exchange rate risk and the possibility to be exposed to any exchange rate risk is minimal. Industry Risk

Entry of new competitor may increase the market competition generally poses challenge for the existing one's of the industry.

Financial institution (FI) is a fast growing industry with annual growth rate of 30%. There is a good potential for a well established and growing financial institutions like TRUST BANK LIMITED to expand and increase its market share in the near future in this fast track industry. Market and technology related Risk

In the global market of 21st century, developed technology obsoletes the old service/ product strategy. So the existing technology may not be efficient enough to cope up with the future trend and needs.

The management of Trust Bank Limited is very much alive to the need of automation of the banking transactions with the updated version of technology. Trust Bank already implemented on-line Banking System having ATM booths in the core areas of its business network.

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Change in Regulatory Policies

Any change in regulatory policies may have favorable or adverse impact depending on the type of policy. Bangladesh Bank may increase Cash Reserve Ratio (CRR) and the Statutory Liquidity Requirement (SLR) of Banking Institutions, which may create fund constrains for TRUST Bank Limited like other banking financial institutions.

All Scheduled Banks in Bangladesh including Trust Bank Ltd. is funding their assets from its deposits after maintaining required SLR including CRR. Any changes in SLR policies will impact its Assets growth and cost of intermediation like all other scheduled banks in the country. Change in Government Policy

A Financial institution's ability to operate profitably is directly related to the monetary and fiscal policy of the government at any given point in time. Imposition of restrictive monetary and/or fiscal policy by the government at any time may squeeze the ability to expand the business portfolio and thereby profitability.

Government is perusing a policy of liberalization of the financial sector. Ensuring of operational efficiency of any particular banking financial institutions gives the flexibility to respond to the policy pressure for lowering lending rates without hampering profitability. The management of Trust Bank Limited is found well aware to attain cost efficiency in their operational activities which is very much instrumental to be responsive to the regulatory requirement. Changes in Economic & Political Condition

Any kind of recession has the adverse impact on the overall business environment and the entrepreneurs/prospective investors don't find the cogency for investment for new undertaking or for expansion of existing one's. As a result demand for loanable fund shrinks significantly.

This state of condition generically affects all banking financial institutions but capacity to cope with depends on the strength and prudent policy strategy being followed. Trust Bank in its policy perception has accorded due importance to this predictable or unpredictable situation in the economical and political landscapes. The consistent and substantial growth that the Trust Bank Limited has experienced during the last three consecutive years bear the testimony of their ability to address the situation with due diligence. Portfolio management risk For any banks/financial institution portfolio management is the crucial issue as any slackness in management of portfolio risk may cause serious set back. The percentage of non performing assets of the bank is marginally higher than 1% while country average is round 13.15% and international standard is 3%. So Trust Bank maintains good credit portfolio with its funding in diversified areas including the thrust sectors of the economy. Change in Fiscal Policy

Any unfavorable change in fiscal policy generally will have adverse impact on the banking business operations vis-vis profitability. Trust Bank as a matter of policy priority makes fair disclosure on all accounting matters with transparency to ensure compliance with tax related regulatory requirements.

Trust Bank always prioritizes to build up sound fabric of resilience by reinforcing its capital base to face any unforeseen adversity. Credit Risk

Credit risk is the core risk for any banking financial institutions which is the potential loss pertinence to the failure of a counter party to pay off the obligations as per contractual agreement.

Trust Bank has implemented to maximum extents the prudential guide lines in management of core risk areas of banking operations. Credit risk is the most significant and core risk area of Banks functionaries and any slackness deficiency will cause severe damage. The Bank as a matter of policy priority takes utmost care in borrower selection by applying all tools and techniques of credit appraisal alongside this it has activated loan administration and monitoring mechanism for smooth recovery. As a result the Banks non performing asset stays slightly within 1% and management prefers to further minimize the non performing loan. The bank strictly follows the policy guideline with respect to loan classifications as well as other guidelines prescribed by Bangladesh Bank for keeping the quality of credit portfolio intact and further enrichment.

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Asset Quality Risk

Any adverse change in the liquidity base interest rate changes pose threat to the bank and in extreme cases creates financial set back.

The management of Trust Bank emphasizes on review of Balance Sheet components which are critical in nature and takes preemptive measures for mitigating risks. To this effect asset liability committee has been constituted in line with the prudential guidelines monitors balance sheet related risk with an object to striking balance in liquidity and profitability. ALCO takes strategic decisions for maximizing profit by better utilization of available funds and make necessary adjustment with pricing both on liability and asset sides. And at the same time this committee ensures growth of deposits and corresponding advance. The management of the Bank also prioritizes the growth of balance sheet business transactions to optimize the negative burden for attaining desired level of Net Interest Margin (NIM). Risks of being used by Money Launderer:

Money launderers generally use the banking channel for money laundering so this institution is very much vulnerable that requires them to adequate preventive measures.

Trust Bank has established a robust Anti Money Laundering Policy. The purpose of the Anti Money Laundering Policy is to provide guide lines to comply with the laws and regulations regarding money laundering both at country and international levels and thereby to safeguard the bank from potential compliance, financial and reputation risk. KYC procedure has been set up with address verification. As a part of monitoring account transactions- the estimated transaction profile and high value transactions are being reviewed electronically. Training has been taken as a continuous process for creating/developing awareness among all levels of the officers and executives.

USE OF PROCEEDS

The public issue is the compliance of statutory requirement of the Bank. The proceeds will strengthen the capital base of the Bank and augment business expansion. The fund thus raised through this public issue would be generally used for investment and creation of assets.

DESCRIPTION OF BUSINESS

BACKGROUND Trust Bank Limited is a scheduled commercial bank established under the Bank Companies Act, 1991 and incorporated as a Public Limited Company under the Companies Act, 1994 in Bangladesh on 17 June 1999 with the primary objective to carry on all kinds of banking businesses in and outside Bangladesh. The Bank had twenty six (26) branches operating in Bangladesh as of 31 December 2006. Initially bank has started its operation in the name of The Trust Bank Limited but on 12 November 2006 it was renamed as "Trust Bank Limited" by the Registrar of Joint Stock Companies. The new name of the bank was approved by Bangladesh Bank on 03 December 2006.

NATURE OF BUSINESS Trust Bank Limited offers full range of banking services that include deposit banking, loans & advances, export, import and financing national and international remittance facilities etc.

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(1) The principal products or services of the company and the markets for such products or services In addition to usual commercial lending the bank has the following loan and deposit products:

RETAIL PRODUCT DETAILS

A. Loan Products:

Household Durables Loan

Needs are constantly changing phenomena in human life to improve the standard of living. Sometimes your saving is not good enough to meet your requirements. At, Trust Bank, we take care of your financing needs and you can trust on us as your financial partner indeed. Eligibility: Employees Of: · Government/Semi Government/Autonomous Bodies · Sector Corporation · Non-Government Organizations · Multi-national Companies · Banks/ Financial Institutions · Educational Institutions

Doctors' Loan

Medical is a noble profession which is evolving fast. In a country like ours it is important to be a part of those changes as we cannot ender leg behind. Keeping that in mind and with a vision to support and promote health services, TBL is at your side with our Doctor's Loan. Eligibility: General Practitioner, FCPS & MBBS Doctors/Dentists or Specialist Doctors having FCPS or a Post-graduate degree and specialization in a particular area of treatment such as Medicine Specialist, Eye Specialist, ENT Specialist, Cardiac Surgeon/Specialist etc. having 5 years experience as specialist.

Educational Loan

A substantial amount of finance is required to give child the best education or to get a higher degree either at home or abroad. Eligibility: · Employees of confirmed Service holders, Businessman, Professionals · Adequate cash flow to repay the loan

Travel Loan

When you plan to travel local or global exotic location, financing is the key issue. Don't be worried; TBL Travel loan is ready to provide instant financial support. Eligibility: · Employees of confirmed Service holders, Businessman, Professionals · Adequate cash flow to repay the loan

Hospitalization Loan

Crises come at anytime and well being comes at a prices. When the urgency comes for medical treatment of your family, there can never be any compromise. At any urgency, please remember us to provide financial support through our "Hospitalization Loan" scheme

Eligibility:

· · Employees of confirmed Service holders, Businessman, Professionals Supportive cash flow to repay the loan

Any Purpose Loan

We have so many needs, some are attainable with our means & standing and some are unattainable. The unattainable needs can be met by TBL "Any Purpose Loan" Eligibility: · · Confirmed employees of the Govt. Organizations/Semi Govt. Organizations /Autonomous Bodies/ Multinational Companies/ Banks/ Insurance Com./Financial Institutions/ Educational Institutions/Corporate Bodies. Supportive cash flow to repay the loan

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Apon Nibash Loan (House Finance)

TBL offers Apon Nibash Loan (House Finance) to you with easy repayment schedule matching your affordability. You have unlimited options of choosing your home with limited means and standing. Here, TBL Apon Nibash helps you to match your long cherished dream.

Salaried People · Confirmed employees of Govt./Autonomous body · Confirmed employees of Financial Institutions · Confirmed employees of different Public Limited Company/Private Limited Company having Corporate Structure · Teachers of any School/College/University · Supportive cash flow to repay the loan Professionals · Doctor/Medical Professionals · Engineers · Accountants · IT Professionals · Management Consultants Self-Employed · Businessmen (in business st least for five years).

Eligibility:

CNG Conversion Loan

Driving a car is no longer a burden as our TBL Conversion Loan makes it easily affordable. Eligibility: · Employees of confirmed Service holders, Businessman, Professionals(Owner of the vehicle or user of the vehicle) & Corporate Clients (for more than one Car) · Any other persons who have adequate cash flow to repay the loan installment

Marriage Loan

Tying the marital knot is an event of a life time and memories should last forever. TBL "Marriage Loan" will help you to arrange celebrate the marriage in style. Eligibility: · Employees of confirmed Service holders, Businessman, Professionals · This Loan is applicable for first marriage · This Loan may be availed by the guardian and/or applicant as the case may be. · Supportive cash flow to repay the loan.

Advance Against Salary

Life is continuously facing unforeseen events. For which sudden financial support is essential. We are at your side to meet up your urgency at any moment through our "Advance Against Salary". Eligibility: · Salaried person in Govt. Organizations/Semi Govt. Organizations /Autonomous Bodies/ Multinational Companies/ Banks/ Insurance Com./Financial Institutions/ Educational Institutions · Confirmed Employees having 3 Years service ahead.

B. Deposit Products:

Fixed Deposit Receipt (FDR) · · · Time duration is 1 month, 3 month, 6 month & 1 Year and above. We offer most attractive rate on FDR. Advance against lien on such Receipt may be allowed up to 80% of the deposited amount.

Trust Smart Savers Scheme (TSS) Trust Bank has introduced Trust Smart Savers Scheme (TSS) for you to secure your future by depositing monthly installment. · · · · Monthly-deposited amount under this scheme will be Tk. 500 (Tk. five hundred) and multiply thereof up to Tk. 5,000 (Tk. Five Thousand). Time duration is 3, 5, 7 or 10 years. We offer most attractive rate on Trust Smart Savers Scheme (TSS). Advance against lien on the balance of the Account may be allowed up to 80%.

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Trust Money Double Scheme (TMDS) Trust Money Double Scheme (TMDS) is very attractive scheme for you that make your money double after 6 (six) years. · · · · 6 years. The deposit shall be double after 6 (six) years. We offer most attractive rate on Trust Money Double Scheme (TMDS). Advance against lien on such Receipt may be allowed up to 80% of the deposited amount.

Trust Money Making Scheme (TMMS) Trust Money Making Scheme (TMMS) is an attractive scheme for you that makes you moneymaker. At a glance Trust Money Making Scheme (TMMS) Client's own deposit Bank's contribution FDR value Tenor Installment size Interest Rate on FDR Tk. 7,500 or multiple thereof Tk. 42,500 or multiple thereof Tk. 50,000 or multiple thereof 6 years Tk. 855 or multiple thereof 10%

Contribution: An FDR for the value combining client's own deposit (15%) and bank's contribution (85%) will be issued for three years at 10% interest rate that will be automatically renewed for further another term (Three Years). Trust Educare Scheme Future will depend on good educational background. Our Trust Educare Scheme (TES) will be with you to brighter your future. · · · · Deposit amount under Trust Educare Scheme will be Tk. 10,000 (Tk Ten Thousand) or multiple thereof. You Can withdraw lump sum on maturity of 5 years / 3 years or Monthly Educare allowance after maturity will be continued for 3 years term. We offer most attractive rate on Trust Educare Scheme Advance against lien on such Receipt may be allowed up to 80% of the deposited amount.

Monthly Benefit Deposit Scheme (MBDS) You can secure your present by investing in Monthly Benefit Deposit Scheme (MBDS). It will not only help you to meet your monthly budget but also you can reinvest this monthly allowance to other deposit scheme (s). · · · · Deposit amount will be Tk. 100,000 (Tk. One Lac) and multiples thereof, but maximum Tk. 2,500,000 (Tk. Twenty Five Lac) per account. The deposit shall be for a period of 5 (Five) years. We offer most attractive rate on Monthly Benefit Deposit Scheme (MBDS). Advance against lien on such Receipt may be allowed up to 80% of the deposited amount.

Lakhopati Savings Scheme (LSS) At the maturity the depositor will get Tk. 100,000.00 (TK. One Lac) by depositing monthly installments. · · · · Monthly installment amount is Tk. 490.00, Tk. 1, 280.00 or Tk. 2,390.00. Time duration 10,5 or 3 years respectively. We offer most attractive rate on Lakhopati Savings Scheme (LSS). Advance against lien on the balance of the Account may be allowed up to 80%.

Interest First Fixed Deposit Scheme (IFFDS) Interest First Fixed Deposit Scheme (IFFDS) has given you the opportunity to receive your interest in advance at the time of deposit. You can be benefited by reinvesting this interest in our deposit scheme (s). · · · · · Minimum-deposit is Tk. 100,000 (Tk. one lac) under the scheme. 3/6/12 months. Interest is payable in advance i. e., at the time of placing the deposit. You can re-invest the interest amount with another scheme of the Bank. We offer most attractive rate on Interest First Fixed Deposit Scheme (IFFDS). Advance against lien on such Receipt may be allowed up to 80% of the deposited amount.

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(2) Product or service that accounts for more than 10% of the company's total revenues: Revenue incomes during the past years are as follows: Description Net Interest income Income from Investments Commission, Exchange and Brokerage Income (As per Audited Accounts in Tk) 31/12/06 % 31/12/05 400,001,365.00 170,817,002.00 247,921,395.00 46.95 20.05 29.10 167,072,156.00 194,479,592.00 129,924,730.00 % 32.67 38.02 25.40

(3) Associates, Subsidiary/Related holding Company: The Bank does not have any associates, subsidiary/related holding company. (4) Distribution of Products/Services: Trust Bank provides and processes its retail products and services through 26 branches nationwide. and through Q-cash shared ATM. (5) Competitive Conditions in the Business: The Banking Sector comprises of consisting of four major Nationalized commercial banks, two agricultural banks and three DFI and a large number 35 private commercial banks including about a dozen foreign owned private banks. They severely compete for savings/deposits and are in search of sound investment/lending targets. Despite stiff competition, the private sector banks earning have gone up significantly, especially for those having professionally managed operations. (6) Sources and availability of raw materials and the names of the principal suppliers: The bank is a financial services institution and does not require any raw material for its operation. (7) Sources of, and requirement for, power, gas & water: The Bank does not require such utilities except for ordinary use in office work. (8) Names of Customers providing 10% or more revenues: Bank's Customers do not include anyone providing 10% or more revenues. (9) Description of Contract with Principal Suppliers/Customers: There is no specific contract with any concern excepting normal business contracts with borrowers/customers under the provision of the Banking Companies Act, 1991. (10) Description of Material Patents, Trade Marks, Licenses or Royalty Agreements: The Bank has not entered into any such Agreements. (11) Employees' Position (as on 31.12.2006): Number of employees at 31 December 2006 was 508; (31 December 2005 was 359;) who were in receipt of remuneration for that year which in the aggregate was not less than Tk 36,000 and those employed for a part of that year who were in receipt of remuneration of not less than Tk. 3,000 per month.

DESCRIPTION OF PROPERTY

1. The Bank's business is principally operates through its Head Office at Dhaka and its branch offices at different locations on rented premises. However, the Bank owns the following operating assets at written down value as given below: (As per Audited Accounts in Taka) As at 31 Dec, As at 31 Dec, 2006 2005 (i) Leasehold Land 160,469 160,469 (ii) Furniture and Fixtures 44,834,265 36,934,438 (iii) Office Equipment 33,138,476 21,879,330 (iv) Motor vehicles 5,317,584 2,060,093 (v) Office Renovation 62,604,017 49,581,752 Total 146,054,811 110,616,082

2. The Bank itself owns the entire fixed assets. 3. There is no mortgage or lien on the property. 4. There is no leasehold property by the Bank.

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PLAN OF OPERATION AND DISCUSSION OF FINANCIAL CONDITION

The Bank started commercial operation since 29th November 1999 and the financial condition as per audited Accounts as on 31 December 2004, 2005 and 2006 are as follows. (1) Internal & external Sources of Cash: Internal Sources of Cash Paid up capital Share Money Deposit Statutory Reserve Retained Earnings Total External Sources of Cash Borrowing from other Banks & Financial Institutions and Agents Deposits & Other Accounts Other Liabilities Total Grand Total 31-12-2006 500,000,000 200,000,000 214,677,986 239,583,997 1,154,261,983 (As per Audited Accounts amount in Taka) 31-12-2005 31-12-2004 500,000,000 500,000,000 200,000,000 200,000,000 113,138,916 67,881,642 178,833,393 102,804,299 991,972,309 870,685,941

426,000,000 18,985,951,094 631,379,123 20,043,330,217 21,197,592,200

660,000,000 12,704,902,083 425,276,800 13,790,178,883 14,782,151,192

1,430,000,000 9,042,183,740 742,946,149 11,215,129,889 12,085,815,830

(2) Material Commitment for Capital Expenditure: The Bank has capital expenditure commitment for Tk.1.97 crore for interior decoration of its 9 branches and purchase of different fixed assets for those branches. Work/supply orders have been issued before preparation of this prospectus and in most cases work/supply has been executed. Bank will meet the expenditure out of its profitable operation. as part of normal business practice in the Banking Industries. (3) Causes for material changes in Income, Expenses & Net-Income: Since start of commercial operation in 1999, the Gross Income, Expenses and Net Income of the Bank have continued to change (increase) due to business promotion efforts of the Directors and Management Staff supported by the general economic growth of the country, including production of bumper crops, increase in exports/imports, increased public expenditures, increased investment in trade and industry and human resource development. Income A comparative income position of the Bank for the years ended 31 December 2006, 2005 & 2004 are as follows: (As per Audited Accounts amount in Taka) Description 31-12-2006 31-12-2005 31-12-2004 Net Interest income 400,001,365 167,072,156 130,094,938 Income from Investments 170,817,002 194,479,592 177,745,964 Commission, Exchange and 247,921,395 129,924,730 100,154,725 Brokerage Other operating income 33,172,756 19,980,032 19,433,492 Total operating income 851,912,518 511,456,510 427,429,119 Operating Expenses Comparative operating expense positions of the Bank for the years ended 31 December 2006, 2005 & 2004 are as follows: (As per Audited Accounts amount in Taka) Description Salaries and Allowances Staff Gratuity Rent, Tax, Insurance, Electricity, etc. Legal expenses Postage, stamp, telecommunication etc. Stationary, Printing, advertisement etc. Managing Director's salary and benefits Directors' fees Auditors' Fees Depreciation on Fixed Assets Repairs & Maintenance Other Expenses Total Operating Expenses Profit before provisions Provision for loans & advances Provision for Diminution in value of Investment Total Profit before Income Tax Provision for Income Tax Net Profit After Tax 31-12-2006 133,200,114 9,039,220 49,780,953 266,004 16,057,202 8,793,963 5,036,666 664,500 100,000 23,734,416 9,599,529 48,740,455 305,013,022 546,899,496 38,555,000 649,147 507,695,349 245,000,000 262,695,349 31-12-2005 91,747,613 9,471,670 30,934,976 191,660 10,782,354 6,038,525 5,400,000 200,500 100,000 17,849,022 6,399,121 36,079,511 215,194,952 296,261,558 69,975,190 226,286,368 105,000,000 121,286,368 31-12-2004 66,835,605 10,076,200 16,746,505 271,220 9,559,179 5,885,982 5,400,000 9000 100,000 15,980,175 4,755,273 27,535,984 163,155,123 264,273,996 47,889,810 216,384,186 216,384,186

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(4) Seasonal Aspects: In general there is no seasonal impact on the business of the Bank. (5) Known Trends, Events or Uncertainties: Political unrest, hartal, govt. monitory policy flood and other natural calamities are the known events in our country which may affect the business of the Bank. (6) Changes in Assets of the company used to pay off Liabilities: No asset of the Bank has been used to pay off any liabilities. (7) Loans Taken from or given to holding/parent company or subsidiary company: The Bank has no holding/parent company or subsidiary company. Therefore, loan taking from or given to such concerns does not arise. (8) Future Contractual Liabilities: At the moment, the Bank is not aware of any such contractual liabilities that may have an impact on the company's financial fundamentals in the next one year. However, the company may have contractual relationship with outside parties in the normal course of business. (9) Future capital expenditure: I. The bank has got Bangladesh Bank's permission to open 8 (eight) branches in the year 2007. The Board of Director has decided to open the branches at the following locations Bangladesh Bank Approval Dhaka City-2 Branches Chittagong City-1 Branch Rural- 2 Branches Other ­ 3 Branches

Proposed Location Old City/Kawran Bazar/Mirpur Road/Mirpur-1 & Banani-1 Patenga (Naval Base) ­ 1 Rajendrapur Cantt ­ 1 & Bhatiary (Shitakunda)- 1 Narayanganj ­ 1, Boardbazar (Tongi)- 1 & Feni/Chowmohony/Narshingdi- 1 Capital expenditure commitment for interior decoration and purchase of different fixed assets for these proposed branches is estimated at Tk.7.11 crore. II. The bank has undertaken a project to bring all its exiting and future branches under online banking network. Lion's share of the budgeted expenditure has been incurred in the year 2006. However an estimated Tk. 1(one) crore is committed for the year 2007.

(10) VAT, Income Tax, Customs Duty or other Tax Liability: (i) VAT: The Bank had outstanding VAT liability of Tk. 5,60,721/- as on 31 Dec 2006 (included in Sundry Creditors of other liabilities). However, outstanding VAT liability was paid off subsequently. VAT liability occurs due to standard time lag between deduction of VAT by the branches, sending the information to head office and finally depositing to govt. treasury by the head office. Contingent Liabilities: Disclosed in the OFF BALANCE SHEET ITEM section of the Balance Sheet (also in note 18) Income Tax: Income Tax assessment for the Income Years 1999 to 2005 (Assessment Years 2000-2001 to 2006-2007) have been completed. Advance Income Tax for the said years have been adjusted with the Income Tax Provision for the actual Income Tax Liability. In this respect note 13.05 of the audited accounts may please be seen. Custom Duty or Other tax liability is not applicable for the bank.

(ii) (iii)

(iv)

(11) Operating Lease during last 5 years: The Bank has established its Head Office as well as the branches on leased accommodation as follows: Name of the Branch Address of Premises Dhanmondi Branch Rainak Complex, Bangladesh Rifles Head Office 36 PICL Bhaban, Dilkusha C/A, Dhaka Dilkusha Corp. Branch 36 PICL Bhaban, Dilkusha C/A, Dhaka Agrabad Branch Shilpa Bank Bhaban, 106 Agrabad C/A, Chittagong Khatunganj Branch Holding # 205, Plate # 218, Khatunganj Main Road, Kotwali, Chittagong Area 2752 sft 25703.93 sft 5357.68 sft 5400 sft 2106 Sft Rent Tk.43/sft Tk.25/sft Tk.25/sft Tk.17.25/sft Tk.8/sft Effective date of Lease 01-3-2003 21-3-2004 21-3-2004 23.12.2001 07.9.2003 Lease Tenure date 28-2-2018 20-3-2014 20-3-2014 31.01.2008 06.9.2013

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Gulshan Corp. Branch Plot#110, Gulshan Avenue, Gulshan Model Town, Dhaka Principal Branch 98 Shaheed Sarani, Dhaka Cantonment, Dhaka` Sena Kalyan Bhaban Branch, 95 Motijheel C/A, Dhaka Goalabazar Branch Dag#1054, Mouza: Khalachara, Khatian#754/7, Tajpur Sylhet Moulvi Bazar branch JL#106, Mouza: Moulvi Bazar Municipality, Sylhet Beanibazar Branch Mouza: Fatepur, JL#107, Sylhet Hali Shahor Branch Holding#2030/A, Block-G, Road-03, Port Connecting Road, Chittagong Uttara Corp. Branch Plot#111/a, PS: Uttara, Dhaka Sylhet Corp. Branch Chowhatta, Sylhet CDA Avenue Branch Holding#1837 (New), CDA Avenue, Chittagong KYAMCH Branch Mouza-Enayetpur, Khatian: 21 & 37, Dag: 1449, 1452 & 1453, PS: Chowhali, Shirajganj Shaheed Salahuddin Cantonment Branch

14400 sft 19500 sft Suit-204, 2864 sft & Suit-301, 1805 sft 4000 sft 4500 sft 3200 sft 4868 sft 6500 sft 3266 sft & 1948 sft 3200 sft 3000 sft

Tk20.83/sft Tk15.38/sft Tk.43/sft & Tk.48/sft Tk.9/sft Tk.12/sft Tk.10/sft Tk.13/sft Tk.25/sft Tk. 25/sft Tk.20/sft Tk.20.31/sft Tk.5/sft &

7.12.2003 01.1.2006 01.01.2006 & 01.02.2007 01.4.2007 01.12.2006 1.12.2006 01.8.2006 01.4.2006 01.11.2005 01.12.2005 26.12.2005

06.12.2011 31.12.2007 31.03.2008 & 31.01.2009 31.3.2017 30.11.2011 30.11.2011 30.07.2016 30.3.2016 30.10.2015 30.11.2010 25.12.2007

1980 sft

Tk.2.52/sft

01.1.2006

31.12.2008

The bank will liquidate the operating lease from the revenue of normal courses of business. Advance against lease rent stands at Tk. 2,81,57,244/- as on 31 Dec 2006. (12) Financial Lease Commitments during last five years: The Bank has acquired a piece of leasehold land at Saver Cantonment, from the Government of the People's Republic of Bangladesh on 30 years lease which is renewable up to 90 years. The Bank will construct a building on the land for its Savar Cantonment Branch. The lease agreement was executed on 21 August 2004. One time lease premium and other incidental charges including registration totaling Tk. 160,469/- was paid by the Bank. Annual lease premium is Tk. 14,119/-. (13) Personnel Related Scheme: The Bank sincerely believes that investment in human resources ultimately pays high dividend and also recognizes that intellectual capital is the most important asset for the Bank. The Bank offers competitive compensation package to the employees. The Bank recognizes the importance of developing a well-trained professional staff whose skill and dynamic x-ray vision and deep commitment will steer the Bank through the turbulence of globalize business scenario to growth and prosperity. The bank operates the following schemes for its employees: I. II. Contributory Provident Fund: every employee contributes 10% of his/her basic salary in the fund and the bank also contributes the same amount. Bank's contribution is 100% funded since inception Employee gratuity Fund: the bank has a gratuity fund for its employees. The bank started funding the scheme from the year 2004.

Both the provident fund and the gratuity fund are administered by a Board of Trustees. III. The Bank has also introduced "Superannuation Fund" instead of group life insurance policy for the employees. Those employees, who will be able to fulfill the specific criteria mentioned in the policy of the fund, will be entitled to get the benefit of "Superannuation Fund". In addition to the above, other employee related schemes may be undertaken in future.

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(14) Break down of expenses for issue manager and underwriters: a) Issue Management Fee lump sum amount of tk.850,000. b) Underwriting commission will be 0.20% on the amount underwritten by the underwriters i.e. of Tk. 350,002,500 (50% of the IPO) being Tk. 700,000. No Take up commission will be paid on the amount of shares required to be subscribed by the underwriters if any.

IPO EXPENSES

Details of estimated Public Issue expenses are shown below: Particulars Manager to the Issue Fee Underwriting Commission SEC Fee: Application Fee Consent Fee Fees related to the Stock Exchanges: Application Fee DSE Annual Fee for DSE and CSE @ Tk 1 Lac each Listing Fees for Stock Exchanges (DSE & CSE) CDBL Fees and Expenses: Documentation Fee Annual Fee Initial Public Offering Fee Commission Expenses: Bankers to the Issue Commission Basis of Calculation Lump sum @ 0.20% on 50% of IPO amount Amount in Tk 850,000 700,000 10,000 1,050,007 5,000 200,000 @ 0.25% on 100million and @0.15% on rest of paid up capital 3,700,000 2,500 100,000 175,001 3,500,000 400,000 160,000 50,000 800,000 4,400,000 104,500 200,000 16,407,008

@ 0.15% on IPO amount

As per CDBL By-laws @ Tk. 0.00025 @ 0.10% on collected amount (Estimated; to be paid at actual)

Printing, Publications & Others: Publications of Prospectus and Notices In four dailies Printing of Prospectus 4000 pcsxTk.40.00 per copy Printing of Application Forms 100,000 pcsxTk.0.50 per copy Printing of refund warrants and A/L Approximately 800,000 pcs at Tk. 1.00 Post Issue Expenses Data collection, data entry, processing & other On the basis of applications i.e. 800,000 at related jobs Tk. 5.50 per application Lottery fees to BUET (Estimated; to be paid at actual) Distribution of allotment letters and refund warrants(Estimated; to be paid at Actual) TOTAL

(15) Revaluation of Bank's Assets & Summary Thereof: No revaluation has been made to the Bank's assets. (16) Transaction between subsidiary/ holding or associate companies and the Issuer: Trust Bank Ltd. has no subsidiary/holding or associate company. Hence no transaction has taken place.

15

DECLARATION FOR A BANKING COMPANY

We hereby declare that all requirements as specified in the Bank Companies Act, 1991 (Act No. 14 of 1991) as amended have been adhered to. Sd/. (Lt Gen Moeen U Ahmed, ndc, psc) Chairman Sd/(Brig Gen S M Mahbubul Karim) Director Sd(Brig Gen Mohd Mahbubul Hasan, ndc, psc) Director Sd/(Maj Gen Md Matiur Rahman, ndu, psc) Vice Chairman Sd/(Brig Gen Md Rafiqul Islam, ndc, psc) Director Sd(Brig Gen Md. Aminul Hasan, ndc, psc) Director Sd/(Brig Gen Md Zillur Rahman, MCPS, M.Sc) Director Sd/(Brig Gen Md Shawkat Hossain, psc) Director SdIqbal U Ahmed Managing Director

Auditors' Certificate Regarding Allotment Of Shares To Promoters Or SponsorShareholders For Consideration Other Than in Cash

This is to certify that Trust Bank Limited has not allotted any shares for consideration other than in cash to any shareholders, including its promoters and/or sponsor-shareholders, up to 31 December 2006.

Dhaka, 3 April 2007

Sd/ACNABIN Chartered Accountants

16

DECLARATION REGARDING NON-SUPPRESSION OF MATERIAL INFORMATION

This is to declare that to the best of our knowledge and belief any information, facts, circumstances, that are disclosable has not been suppressed that can changed the terms and conditions under which the offer has been made to the Public. Sd/Iqbal U Ahmed Managing Director Trust Bank Limited

DIRECTORS AND OFFICERS

Name of Directors Age Civil Education Position Date of becoming first Director 03.7.2005 05.1.2006 22.2.2006 03.9.2005 15.1.2004 15.1.2004 22.2.2006 26.2.2007 Date of expiration of current term At AGM 2008 At AGM 2008 At AGM 2008 At AGM 2008 At AGM 2008 At AGM 2008 At AGM 2008 At AGM 2008

Lt Gen Moeen U Ahmed, ndc, psc Maj Gen Matiur Rahman, ndu, psc Brig Gen Md Zillur Rahman Brig Gen S M Mahbubul Karim Brig Gen Md Rafiqul Islam. ndc, psc Brig Gen Md Shawkat Hossain, psc Brig Gen Mohd Mahbubul Hasan, ndc, psc Brig Gen Md Aminul Hasan, ndc, psc

54 50 55 52 49 48 51 48

Military Graduate of CGSC, Kansas, USA MDS (Masters in Defence Studies) MBBS, MCPS, M,Sc. B.Sc Engineer, MBA MDS N/A BA MDS

Chairman Vice Chairman Director Director Director Director Director Director

Involvement with Other Organizations SL 01 Name of the Director Lt Gen Moeen U Ahmed, ndc, psc Nominated Directorship 1. Sena Kalyan Sangstha - Chairman (Board of Trustees) 2. Sena Hotel Developments Ltd. ­ Chairman (Board of Directors) 3. Bangladesh Machine Tools Factory ­ Chairman (Board of Directors) 4. Army Welfare Trust ­ Chairman (Board of Trustees) 1. Sena Kalyan Sangstha ­ Member of the Board of Trustees, 2. Sena Hotel Developments Ltd. ­ Vice Chairman (Board of Directors) 3. Army Welfare Trust ­ Vice Chairman (Board of Trustees) Nil Nil Nil Army Welfare Trust ­ Director (Board of Trustees) Nil Army Welfare Trust ­ Managing Director

02

Maj Gen Matiur Rahman, ndu, psc

03 04 05 06 07 08

Brig Brig Brig Brig Brig Brig

Gen Gen Gen Gen Gen Gen

Md Zillur Rahman MCPS, M.Sc. S M Mahbubul Karim Md Rafiqul Islam. ndc, psc Md Shawkat Hossain, psc Mohd Mahbubul Hasan, ndc, psc Md Aminul Hasan, ndc, psc

Family Relationship between Directors/Top five Officers: Chairman of the Bank is the brother of the Managing Director. Family relationship among the Directors: There is no family relationship among the Directors, other than mentioned above.

17

SHORT BIO ­ DATA OF THE DIRECTOR'S All the Directors are nominated by Army Welfare Trust, sponsor shareholder of the Bank. Lt Gen Moeen U Ahmed, ndc,psc - Chairman Lt Gen Moeen U Ahmed is the Chairman of Trust Bank Limited. Born in 1953, Gen Moeen was commissioned in Bangladesh Army in the year 1975. He has long 32 years of service in Bangladesh Army. He completed psc course from Defense Services Command and Staff College and ndc course from National Defense College, Mirpur, Dhaka. He is also a military graduate of CGSC, Kansas, USA. Gen Moeen is at present Chief of Army Staff, Bangladesh Army. He was appointed Director of Trust Bank Limited on 3 September 2005. Maj Gen Md. Matiur Rahman, ndu, psc ­ Vice-Chairman Maj Gen Md. Matiur Rahman is the Vice-Chairman of Trust Bank Limited. Born in 1957 Gen Matiur Rahman was commissioned in Bangladesh Army in the year 1977. He completed psc course from Defense Services Command and Staff College, Mirpur, Dhaka and ndu course from National Defense University, China. Gen Matiur Rahman is also a Masters in Defense Studies. Gen Mati is at present Adjutant General of Bangladesh Army. He was appointed Director of Trust Bank Limited on 5 January 2006. Brig Gen Md. Zillur Rahman, MCPS, M Sc - Director Brig Gen Md. Zillur Rahman was commissioned in Bangladesh Army in the year 1976 and he has more than 30 years service in his crdeit. Born in 1952, Brig Gen Rahman is an MBBS doctor. He has also obtained MCPS and M Sc degrees. Brig Gen Rahman is at present Director, Medical Services, Army Headquarters. He was appointed Director of Trust Bank Limited on 22 February 2006. Brig Gen S M Mhbubul Karim, B.Sc. (Engr.), MBA - Director Born in 1955, Brig Gen S M Mahbubul Karim was commissioned in Bangladesh Army in the year 1976. He is an engineer with MBA degree. At present Brig Gen Mahbub is Director, EME, Army Headquarters. He was appointed Director of Trust Bank Limited on 3 September 2005. Brig Gen Md Rafiqul Islam, ndc, psc ­ Director Brig Gen Md. Rafiqul Islam was commissioned in Bangladesh Army in the year 1976 and he has more than 30 years service in his credit. He has completed ndc and psc courses. In addition, he holds Masters Degree in defense studies. At present he is Director (Signals), Army Headquarters. He was appointed Director of Trust Bank limited on 15 January 2004. Brig Gen Md. Shawkat Hossain, psc - Director Brig Gen Md. Shawkat Hossain was commissioned in Bangladesh Army in the year 1976 and he has more than 30 years service in his credit. He has completed psc course. At present he is DG of Bangladesh Krira Shikkha Pratisthan (BKSP). He was appointed Director of Trust Bank limited on 15 January 2004. Brig Gen Mohd Mahbubul Hasan, ndc, psc - Director Brig Gen Mohd Mahbubul Hasan was commissioned in Bangladesh Army in the year 1978 and he has more than 28 years service in his credit. He has completed ndc and psc courses. At present he is Director (Supply and Transport), Army Headquarters. He was appointed Director of Trust Bank limited on 22 February 2006. Brig Gen Md. Aminul Hasan, ndc, psc - Director Brig Gen Md. Aminul Hasan was commissioned in Bangladesh Army in the year 1977 and he has more than 29 years service in his credit. He has completed ndc and psc courses. In addition, he holds Masters Degree in defense studies. At present he is Director (Welfare & Rehabilitation), Army Headquarters. He was appointed Director of Trust Bank limited on 26 February 2007. CIB Status:

Neither the company nor any of its directors or shareholders who hold 5% or more shares in the paid-up capital of the issuer is loan defaulter in terms of the CIB Report of the Bangladesh Bank 18

Description Of Top Executives And Officers:

Name Designation & Position Educational Qualification B.Com (Hons) M. Com (Management) B.A (Hons.) M.A. (Pol. Sc.) B.A Hons. (Pol. Sc.) M.S.S. (Public Admin) MBA B.A (Hons.) M.A (Economics) B.S.S (Hons) M.S.S (Public Admin) B. Com (Hons.) M.Com (Marketing) MBA B.Com (Hons.) M.Com (Accounting), MBA (Finance) B.Com (Hons.) M.Com Finance & Banking, BA (Pass) B.Com (Pass) M.Com (Accounting) ACMA B.Com (Hons.), M.Com (Finance), MBA B.Com (Pass) M.Com (Accounting), ACA Date of joining in the company 03.8.2003 14.10.2003 11.3.2002 10.10.1999 22.10.2003 01.12.1999 30.11.2005 01.03.2006 11.10.2001 08.6.2006 12.3.2002 01.12.2003 24.9.2006 Last five years experience SEVP- AB Bank Ltd. VP ­ A.B. Bank Ltd. SEVP- The Oriental Bank Ltd. SVP- Trust Bank Ltd. VP-Trust Bank Ltd. VP & Head of IDEBL AVP- Trust Bank Ltd. SVP- The Oriental Bank Ltd. VP & Head of IT-AB Bank Ltd. AVP-One Bank Limited VP- Prime Bank Ltd. Chief Officer- AB Bank Ltd. Deputy Director-SEC Head of Corporate CommunicationSiemens Bangladesh AVP- The Oriental Bank Ltd.

Mr. Iqbal U Ahmed Mr. Ishtiaque Ahmed Chowdhury Mr. Shah Jalal Uddin Khan Mr. Saad Uddin Ahmed Mr. A.Z Hedaytul Islam Mr. Md. Masoom Mr. Shahud Ahmed Mr. Javed Islam Mr. Akhlasur Rahman Bhuiyan Mr. Md. Ahsan Ullah Mr. Goutam Prasad Das Mr. Farhad Uddin Mr. Aftab Mahmud Khurshid Mr. Khaled Mahbub Morshed

Managing Director Deputy Managing Director & COO Senior Vice President & Head of Training Academy Senior Vice President & Head of Operation & Investment Wing Senior Vice President & Head of ID Senior Vice President & Head of CRM Senior Vice President & Head of HRD & IC&C Senior Vice President & Head of IT Vice President & Head of SME Vice President & Head of Credit Approval Vice President & Head of Credit Monitoring Senior Asstt. Vice President & Company Secretary Senior Asstt. Vice President & Head of Corporate Brand & Marketing Communication Asstt. Vice President & Head of FCAD

04.10.2005

INVOLVEMENT OF OFFICERS AND DIRECTORS IN CERTAIN LEGAL PROCEEDINGS

A. Recently, The Oriental Bank Limited has filed a criminal case with Tejgaon Police Station (Case # 40 dated 25 January 2007) against some of its(The Oriental Bank Limited) former and present employees, among whom included is Deputy Managing Director of Trust Bank Limited Mr. Ishtiaque Ahmed Chowdhury. The case has been transferred to CID and is now under investigation. The incumbent joined Trust Bank Limited on 14 October 2003. Since joining, he has been discharging his responsibilities with reputation and honor. There is no allegation against him in this Bank. The Bank filed a criminal case against its 3 former employees namely Mr. Zahid Hossain Chowdhury, former Managing Director, Mr. A F Shabbir Ahmed and Mr. Mir Mozammel Hossain, in the Court of Chief Metropolitan magistrate (Case # 734 of 2004). The accused wanted to have the case quashed in the High Court. The High Court rejected their petitions. Against that order, one of the accused filed petition with the Appellate Division and consequently proceeding of the Petition No. 734 of 2004 has been stayed by the Appellate Division, Supreme Court of Bangladesh.

B.

Apart from the foregoing information, no officer or Director of the Bank was involved in any of the following types of legal proceedings in the past ten years: 1) Any bankruptcy petition filed by or against any company of which any Officer or Director or Nominee of the company filling the prospectus was a Director, Officer or general partner at the time of the bankruptcy or within two years prior to that time; 2) Any conviction of an Officer, Director or Nominee in the criminal proceedings or any criminal proceedings pending against him; 3) Any order judgment or decree of any Court of competent jurisdiction against Officer, Director or Nominee permanently or temporarily enjoying, barring, suspending or otherwise limiting the involvement of any Officer or Director or Nominee in any type of business, securities or banking activities. 4) Any order of the Securities and Exchange Commission or other regulatory authority or foreign financial regulatory authority suspending or otherwise limiting the involvement of any Officer or Director or Nominee in any type of business securities or banking activities.

19

CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

i) Loan to Directors As per audited accounts for the years ended on 31 Dec 2005 and 2006 the Bank has entered into following transactions with the Directors: Name of Director Nature of Amount outstanding as on 31 Amount outstanding as Transaction Dec 2006 (Taka) on 31 Dec 2005 (taka) Lt Gen Moeen U Ahmed House building loan 33,15,323/99,69,215/Brig Gen Md. Shawkat House building loan 9,90,410/10,05,220/Hossain Total 43,05,733/1,09,74,435 ii) Loan status of top executives SL Name of the persons involved

Relationship with the Issuer MD DMD SVP SVP SVP SVP SVP

Nature of transaction

1 2 3 4 5 6 6 7 8 9

Mr. Iqbal U Ahmed Mr. Ishtiaque Ahmed Chowdhury Mr. Abu Zafar Hedaytul Islam Mr. Shahriar Chowdhury Mr. Mohammad Masoom Mr. Shahud Ahmed Mr. Shah Jalal Uddin Khan Sub-total Other Executives & Officers Other Executives & Officers Other Executives & Officers Grand Total

HBL & APL Car loan HBL, Car & APL APL & Car APL & Car Car & APL Car & APL Car Loan House Building Loan Any Purpose Loan

Amount Outstanding in Taka (As on June 30, 2006) 1,775,242.00 952,602.00 1,537,951.00 688,191.00 1,691,728.00 1,747,735.00 1,695,225.00 10,088,674.00 37,142,029.00 4,883,467.00 44,587,581.00 96,701,751.00

Apart from the above information, the Bank has not entered into any transaction or any proposed transaction during the last two years with any of the following persons, namely: (a) Any Director or Executive officer of the company. (b) Any director or officer. (c) Any person owning 5% or more of the outstanding shares of the issuer. (d) Any member of the immediate family (including spouse, parents, brothers, sisters, children and in laws) of any of the above persons. (e) Any transaction or arrangement entered into by the company for a person who is currently a director or in any way connected with a director of either the company or who was a director or connected in any way with a director at any time during the last three years prior to the publication of the prospectus. iii) Directors holding any position apart from the company The information is already included in Directors and Officers part of the prospectus. iv) Directors' Facilities during Prospectus Publication Facilities whether pecuniary or non-pecuniary enjoyed by the Directors will remain unchanged during the publication period of the Prospectus. Facilities enjoyed by the directors have already been disclosed in Executive Compensation section of the Prospectus.

20

EXECUTIVE COMPENSATION

A.

Remuneration paid to top five Executives in the last accounting year SL. 1 2 3 4 5 Name Mr. Iqbal U Ahmed Mr. Ishtiaque Ahmed Chowdhury Mr. Saad Uddin Ahmed Mr. Md Shahriar Chowdhury Mr. Shah Jalal Uddin Khan (As per audited accounts 2006, Amount in Taka) Description Jan to Dec 2006 Managing Director 5,036,666 Deputy Managing 1,772,100 Director Senior Vice President 901,771 Senior Vice President 848,263 Senior Vice President 863,239

B.

Aggregate Amount of Remuneration paid to Directors & Officers SL. 1 2 3 · · · Name Directors' fees Managing Director's Salary and benefits Salaries and allowances (Others) (As per audited accounts 2006, Amount in Taka) Jan to Dec 2006 664,500 5,036,666 133,200,114

No remuneration was paid to any director who was not officer during the last fiscal year. There is no contract with any director, officer for future compensation. The Company has no intention to increase Directors' fee substantially in the current year.

Pay Increase Intention As part of employee retention policy, Bank's pay scales are revised at irregular intervals to make them at par with the market.

OPTIONS GRANTED TO OFFICERS, DIRECTORS AND EMPLOYEES

The Company has not offered any option for issue of shares to any of the officers, directors and employees or to any outsiders.

TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUM

a)

The Company did not receive anything from the Directors and subscribers to the memorandum during the last five years except additional capital as follows: 1) 2002 ­ Tk. 10 Crore 2) 2003 ­ Tk. 15 Crore 3) 2004 ­ Tk. 20 Crore The Directors and subscribers to the Memorandum did not receive anything of value from the Company during the last 5 years except Tk. 6 (six) crore dividend declared in AGM, 2006 and fees for attending meetings. The Company did not acquire any assets from the Directors or the subscribers to the memorandum.

b)

21

TANGIBLE ASSETS PER SHARE

We have examined the calculations of net tangible asset backing per unit of Trust Bank Limited as on 31 December 2002, 31 December 2003, 31 December 2004, 31 December 2005 and 31 December 2006 and 31 March 2007, which have been presented by the management of Trust Bank Limited to us. The preparation of the following calculations of net tangible asset backing per unit is the responsibility of Bank's management. Our responsibility is to review them and certify as to whether they have been properly prepared using acceptable principles on the basis of audited financial statements for the years ended 31 December 2002, 31 December 2003, 31 December 2004, 31 December 2005 and 31 December 2006 and 31 March 2007. Based on our review, we certify that the Bank has properly prepared the calculations of net tangible asset backing per unit using acceptable principles on the basis of audited financial statements for the years ended 31 December 2002, 31 December 2003, 31 December 2004, 31 December 2005 and 31 December 2006. Net tangible assets per share : 31.03.2007 Net tangible assets Number of paid-up shares Net tangible assets per share Face value per share 1,154,261,983 7,000,000 165 100 31.12.2006 1,154,261,983 5,000,000 231 100 31.12.2005 991,972,309 5,000,000 198 100 31.12.2004 870,685,941 5,000,000 174 100 31.12.2003 (Figure in Taka) 31.12.2002 236,157,487 350,000 675 1,000

454,301,755 350,000 1,298 1,000

Dhaka, 3 April 2007

Sd/ACNABIN Chartered Accountants

22

OWNERSHIP OF THE COMPANY'S SECURITIES AS AT 31ST MARCH 2007

Sl No. 1. 2.

Name Army Welfare Trust Lt Gen Moeen U Ahmed, ndc, psc Maj Gen Md Matiur Rahman ndu, psc Brig Gen Md Zillur Rahman, MCPS, MSC Brig Gen S M Mahbubul Karim Brig Gen Md Rafiqul Islam, ndc, psc Brig Gen Md Shawkat Hossain, psc Brig Gen Mohd Mahbubul Hasan, ndc, psc Brig Gen Md Aminul Hasan, ndc, psc

Address Army Headquarters, Dhaka Cantonment, Dhaka. Sena Bhaban, Dhaka cantt. Dhaka.

Nos. of Shares 6,999,920 10

Amount of Shares 699,992,000 1,000

Percentage 99.99886 0.00014

3. 4. 5. 6. 7. 8.

9.

187 Shaheed Basher Road, Dhaka Cantt. Dhaka. 173 Shaheed Belayet Road, Dhaka Cantt. Dhaka. C-3, Ujjiban Shaheed Aziz Pally, Dhaka Cantt. Dhaka. Uttaran 8, Aziz Pally, Dhaka Cantt. Dhaka. 75 Shaheed Moinul road, Dhaka Cantt. Dhaka. Room#19 (3rd floor) VSOQ (beside Bijoy keton Museum), Dhaka Cantt., Dhaka. 555/1 Rajanigandha Officers' Quarter, Dhaka Cant. Dhaka Total

10 10 10 10 10 10

1,000 1,000 1,000 1,000 1,000 1,000

0.00014 0.00014 0.00014 0.00014 0.00014 0.00014

10 7,000,000

1,000 700,000,000

0.00014 100.00%

a) b)

The ownership of the securities is of record. No share is held by any officer of the company.

SHAREHOLDERS HOLDING 5% OR MORE SHARES OF THE COMPANY

Sl No. 01. Name Army Welfare Trust Address Army Headquarters, Dhaka Cantonment, Dhaka. Nos. of Shares 6,999,920 Amount of Shares 699,992,000 Percentage 99.99886

23

DETERMINATION OF OFFERING PRICE

The offering price of ordinary share of the Bank has been determined by the management by assessing the book value per share as of 31 March 2007 and 31 December 2006 based on the financial statements for the periods from 01 January 2007 to 31 March 2007 and from 01 January 2006 to 31 December 2006 respectively. The calculation is given below:

Shareholders' equity 31.03.2007 Taka Share Capital Share Money Deposits Statutory reserve Other reserve Retained earnings Total shareholders' equity No. of Shares of Taka 100 each Book value per share of Taka 100 each 239,583,997 1,154,261,983 7,000,000 164.89 700,000,000 214,677,986 (Figure in Taka) 31.12.2006 Taka 500,000,000 200,000,000 214,677,986 239,583,997 1,154,261,983 5,000,000 230.85

We have checked the above calculation and found it correct.

Dhaka, 3 April 2007

Sd/ACNABIN Chartered Accountants

Net Asset Value per share is Tk 164.89 which is higher than the offer price Tk150 (including a premium of Tk.50 per share). Thus the offer price is justified.

24

MARKET FOR THE SECURITIES BEING OFFERED

The issuer shall apply to all the stock exchanges in Bangladesh within seven working days from the date of consent accorded by the Commission to issue prospectus. Dhaka Stock Exchange Limited (DSE) 9/F, Motijheel C/A, Dhaka-1000 And Chittagong Stock Exchange Limited (CSE) CSE Building, 1080 Sk. Mujib Road, Agrabad C/A, Chittagong "Declaration about Listing of Shares with the Stock Exchange(s): None of the stock exchange(s), if for any reason, grants listing within 75 days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within fifteen days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (seventy five) days, as the case may be. In case of non-refund of the subscription money within the aforesaid fifteen days, the company directors, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) per month above the bank rate, to the subscribers concerned. The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within seven days of expiry of the aforesaid fifteen days time period allowed for refund of the subscription money." Trading and settlement regulation of the stock exchanges shall apply in respect of trading and settlement of the share of the company.

25

DESCRIPTION OF SECURITY OUTSTANDING OR BEING OFFERED

Dividend, Voting and Preemption Right The paid-up share capital of the Company is divided into ordinary shares carrying equal rights to vote and receive dividend in terms of the relevant provisions of the Companies Act, 1994 and the Articles of Association of the Company. Shareholders shall have the usual voting right in person or by proxy or power of attorney in connection with, among others, selection of Directors & Auditors and other usual agenda of General Meeting ­ Ordinary or Extra Ordinary. On a show of hand every shareholder present and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present in person or by proxy shall have one vote for every share held by him/her. In case of any additional issue of shares through right share for raising further capital the existing shareholders shall be entitled in terms of the guidelines issued by the SEC from time to time. Conversion & Liquidation Right If the company at any time issues convertible preference shares or Debenture with the consent of SEC or /and other regularity authority, such holders of Securities shall be entitled to convert such securities into ordinary shares if it is so determined by the company. Subject to the provisions of the Companies Act, 1994, Articles of Association of the Company and other relevant Rules in force, the Shares, if any, of the Company are freely transferable, the Company shall not charge any fee for registering transfer of shares. No transfer shall be made to firms, minors or persons of unsound mental health. Dividend Policy a) The profit of the company, subject to any special right relating thereto created or authorized to be created by the Memorandum of Association subject to the provision of the Articles of Association, shall be divisible among the members in proportion to the capital paid up on the Shares held by them respectively. b) No larger dividend shall be declared than is recommended by the Directors, but the Company in its General Meeting may declare a smaller dividend. The declaration of Directors as to the amount of net Profit of the Company shall be conclusive. c) No dividend shall be payable except out of profits of the Company or any other undistributed profits. Dividend shall not carry interest as against the Company. d) The Directors may, from time to time, pay the members such interim dividend as in their judgment the financial position of the Company may justify. e) A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer. f) There is no limitation on the payment of dividend. Other Rights of Stock Holders The shareholders shall have the right to receive all periodical reports and statements, audited as well as un-audited, published by the company from time to time. The Directors shall present the financial statements as required under the Law and Bangladesh Accounting standards. Financial Statements will be prepared in accordance with International Accounting Standards, consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as per law and Bangladesh Accounting Standard to the shareholders regarding the Financial and operational position of the Company. In case of any declaration of stock dividend by issue of bonus shares, all shareholders shall be entitled to it in proportion to their shareholdings on the date of book closure for the purpose. The shareholders holding not less than 10% of the issued/fully paid up capital of the company shall have the right to requisition Extra-Ordinary General Meeting of the Company as provided under Section 84 of the Companies Act, 1994.

DEBT SECURITIES

Trust Bank Limited has not issued any Debt Securities and has no plan to issue any debt security within next 6(six) months.

26

FINANCIAL STRUCTURE

Particular Authorized Capital 20,000,000 Shares @ Taka 100/- per share Issued & Fully Paid up Capital 7,000,000 ordinary Shares @ Taka 100/- per share IPO (Initial Public Offering) 4,666,700 ordinary Shares @ Taka 150/- each (including a premium of Tk. 50 /-per share) After IPO

Premium in Taka

Capital in Taka 2,000,000,000

700,000,000 233,335,000 233,335,000 466,670,000 1,166,670,000

LOCK-IN ON SPONSOR'S CAPITAL

All issued shares of the issuer at the time of according consent to public offering shall be subject to a lock- in period of three years from the date of issuance of prospectus or commercial operation, whichever comes later. Provided that the persons, other than directors and those who hold 5% or more, who has subscribed to the shares of the Company within immediately preceeding two years of according consent, shall be subject to a lock-in period of one year from the date of issuance of prospectus or commercial operation, whichever comes later.

27

AVAILABILITY OF SECURITIES

a) b) c) Total (1) (2) (3) (4)

10% of the Issue i.e 466,670 ordinary shares @Tk. 150 each shall be reserved for Non-resident Bangladeshis. 10% of the Issue i.e. 466,670 ordinary shares @Tk.150 each shall be reserved for Mutual Funds and collective investment schemes registered with the Commission. The remaining 80% i.e. 3,733,360 ordinary shares @Tk. 150 each shall be open for subscription by the general public.

Tk. 70,000,500.00 Tk. 70,000,500.00 Tk. 560,004,000.00 Tk.700,005,000.00

(5) (6)

10% of total public offering shall be reserved for non-resident Bangladeshi (NRB) and 10% for mutual funds and collective investment schemes registered with the Commission, and the remaining 80% shall be open for subscription by the general public. All securities as stated in sub-rule (1) shall be offered for subscription and subsequent allotment by the issuer, subject to any restriction which may be imposed, from time to time, by the Securities and Exchange Commission. In case of over-subscription under any of the categories mentioned in sub-rule (1), the issue manager shall conduct an open lottery of all the applications received under each category separately in accordance with the letter of consent issued by the Securities and Exchange Commission. In case of under-subscription under any of the 10% categories mentioned in sub-rule (1), the unsubscribed portion shall be added to the general public category and, if after such addition, there is over subscription in the general public category, the issuer and the issue manager shall jointly conduct an open lottery of all the applicants added together. In case of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the underwriter(s). The lottery as stated in sub-rule (3) and (4) shall be conducted in presence of representatives from the issuer, the stock exchanges, and the applicants, if there be any.

Refund of subscription money

In the case of non-allotment of securities, refund of subscription money of applicants resident in Bangladesh shall be made by account payee cheque/warrant payable to applicant. For this purpose the number of the bank account along-with name of bank and branch shall be indicated in the securities application form

Subscription by and refund to non-resident Bangladeshi (NRB)

(1) A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for through crossed bank cheque marking "Account Payee only". The value of securities applied for by such person may be paid in Taka or US Dollar or UK Pound Sterling or Euro at the rate of exchange mentioned in the securities application form. Refund against over subscription shall be made in the currency in which the value of securities was paid for by the applicant through Account Payee cheque payable at with bank account number, Bank's name and Branch as indicated in the securities application form.

(2) (3)

ALLOTMENT

The company shall issue share allotment letters to all successful applicants within 6 (six) weeks from the date of the subscription closing date. Within the same time, Refund to the unsuccessful applicants shall be made in the currency in which the value of securities was paid for by the applicants without any interest, through Account Payee Cheque/ refund warrants with bank account number, bank's name and Branch as indicated in the securities application forms payable at Dhaka/ Chittagong/ Khulna/ Rajshahi/ Barisal/ Sylhet/ Bogra, as the case may be. A compliance report in this regard shall be submitted to the Commission within 7(seven) weeks from the date of closure of subscription.

28

APPLICATION FOR SUBSCRIPTION

01. Application for shares may be made for a minimum lot of 50 (Fifty) ordinary shares to the value of Tk. 7,500 and should be made on the Company's Printed Application forms. Application forms and the Prospectus May be obtained from the Registered Office of the Company, members of the Dhaka Stock Exchange Ltd., Chittagong Stock Exchange Ltd. or from the Bankers to the Issue. In case adequate forms are not available, applicants May use photocopied/cyclostyled/ handwritten/ typed copies of the forms. Application must not be for less than 50 shares. Any application not meeting the criterion will not be considered for allotment purpose. 02. Joint application form for more than two persons will not be accepted. In the case of a joint application each party must sign the application form. 03. Application must be in full name of individuals or limited companies or trusts or societies and not in the name of firms, minors or persons of unsound mind. Applications from insurance, financial and market intermediary companies and Limited Companies must be accompanied by Memorandum and Articles of Association. 04. An applicant can submit not more than two applications, one in his own name and another jointly with another person. In case an applicant makes more than two applications, entire application money will be forfeited by the Commission. 05. Bangladeshi Nationals (including Non-Resident Bangladeshi Nationals residing/ working abroad) and Foreign National shall be entitled to apply for shares. 06. Payment for subscription by investors other than Non-Resident Bangladeshi may be made to the said branches/office of the banks mentioned below in Cash/Cheque/Pay Order/Bank Draft. The Cheque or Pay Order or Bank Draft shall be made payable to the bank to which it is sent and be marked "Trust Bank Limited" and shall bear the crossing "Account Payee only" and must be drawn on a bank in the same town of the bank to which application form is deposited. 07. All completed application forms together with remittance for the full amount payable on application shall be lodged by investors other than Non-Resident Bangladeshis with any of the branches of the Bankers to the Issue. 08. A Non-Resident Bangladeshi (NRB) shall apply against the IPO either directly by enclosing a foreign demand draft drawn on a bank payable at Dhaka, or through a nominee (including a Bank or a Company) by paying out of foreign currency deposit account maintained in Bangladesh, for the value of securities applied for. The value of securities applied for May be paid in Taka, US Dollar or UK Pound Sterling or Euro t the Spot Buying (TT Clean) rate of exchange prevailing on the date of opening of Subscription. Refund against over subscription of shares shall be made in the currency in which the value of shares applied for was paid by the applicant. Share Application Form against the quota for NRB shall be sent by the applicant directly along with a draft or cheque to the Company at its registered office. Copies of Application Form and Prospectus shall be available with Bangladesh Embassy/High Commission in USA, UK, Saudi Arabia, UAE, Qatar, Kuwait, Oman, Bahrain, Malaysia and South Korea and web site of the SEC and TRUST BANK. 09. The IPO subscription money collected from investors (other than Non-Resident Bangladeshis) by the bankers to the issue will be remitted to the Company's Shares Subscription-IPO Account No. 0210003236 with Trust Bank Limited, Dilkusha Corporate Branch, Dhaka for the purpose. 10. The subscription money collected from Non-Resident Bangladeshis in US Dollar or UK Pound Sterling shall be deposited to "FC Account for IPO" bearing FC A/C No. 5001015184 (USD), 5003000276(Euro), 5002000545(GBP) With Trust Bank Limited, Principal Branch. In case of over subscription, refund shall be made by the Company out of the "FC Account for IPO". The Company shall open "FC Account for IPO" in US Dollar or UK Pound Sterling with a Bank on approval of Prospectus by SEC and close these accounts after refund of over-subscription, if any. APPLICATIONS NOT IN CONFORMITY WITH THE ABOVE REQUIREMENTS AND THE INSTRUCTIONS PRINTED ON THE APPLICATION FORM ARE LIABLE TO BE REJECTED.

29

UNDERWRITER'S OBLIGATION

As per Securities and Exchange Commission's guideline 50% of the Public Offer of 46,66,700 ordinary share i.e., 23,33,350 ordinary shares of TK. 150 each (including a premium of Tk.50 per share) i.e., for TK. 350,002,500.00 will be Underwritten at a rate of 0.20% (underwriting commission) by the for the IPO of Trust Bank Limited. No additional commission will be paid on the amount of shares required to be subscribed (if any) by the underwriter.

SL. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Name of Underwriter Arab Bangladesh Bank Ltd. Mutual Trust Bank Ltd. Bank Asia Limited Standard Bank Ltd. Capital Market Services Ltd. Grameen Capital Management Ltd. Agrani Insurance Co. Ltd. ICB Capital Management Ltd. Fidelity Assets & Securities Co. Ltd Bay Leasing & Investment Limited LankaBangla Finance Limited GSP Finance Company (BD) Ltd. Bangladesh General Insurance Co. Ltd. Total

Number of Share 179,490 179,490 179,490 179,490 179,490 179,490 179,490 179,490 179,490 179,490 179,490 179,490 179,470 2,333,350

[email protected] per share 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,923,500 26,920,500 350,002,500

If and to the extent that the shares offered to the public through a prospectus authorized hereunder shall not have been subscribed and paid for in cash in full by the closing date, the company shall within 10 (ten) days of the closure of subscription call upon the underwriter in writing with a copy of the said writing to the Securities and Exchange Commission, to subscribe the shares not so subscribed within the closing date and to pay for in cash in full, inclusive of any premium, if applicable, for such unsubscribed shares within 15 (fifteen) days after being called upon to do so. If payment is made by Cheque/Bank Draft by the underwriter it will be deemed that the underwriter has not fulfilled his obligation towards underwriting commitment under this agreement, until such time as the Cheque/Bank Draft has been encashed and the Company's account credited. In any case within 7 (seven) days after expiry of the aforesaid 15 (fifteen) days, the Company shall send proof of subscription and payment by the underwriters, to the commission. In the case of failure by the underwriter to pay for the shares under the terms mentioned above, the said underwriter will not be eligible to underwrite any issue, until such time as he fulfills his underwriting commitment under this Agreement and also other penalties as May be determined by the Commission.

30

CORPORATE INFORMATION

ISSUE MANAGER AAA Consultants & Financial Advisers Amin Court, 4th Floor (Suit#404) 62-63, Motijheel C/A, Dhaka-1000. ACNABIN Chartered Accountants BSRS Bhaban (13th Floor) 12 Karwan Bazar Dhaka-1215 LEE KHAN & PARTNERS Barrister Attorney & Advocate City Hart (4th Floor) 67, Naya Paltan Dhaka-1000 M/S ADN Associates Room#11-12 (3rd floor), 8/2/1, Purana Paltan, Dhaka-1000 Trust Bank Limited COMPLIANCE Farhad Uddin, ACMA Company Secretary Mohammad Ferdous Mazid Assistant General Manager AAA Consultants & Financial Advisers

AUDITOR

LEGAL ADVISOR

TAX ADVISOR

BANKER COMPANY'S OFFICER

COMPLIANCE OFFICER MANAGER TO THE ISSUE

OF

All investors are hereby informed by the company has appointed a Compliance Officer who May be contacted in case of any pre-issue /post issue related problems such as, non-receipt of letters of allotment /share certificates/refund orders/cancelled stock invests etc.

MATERIAL CONTRACTS

The following are material contracts in the ordinary course of business, which have been entered into by the Company. 1) 2) 3) Underwriting Agreement between the Bank and the Underwriters. Issue Management Agreement between the Company and the Manager to the Issue, AAA Consultants & Financial Advisers. Contract between Company and Central Depository Bangladesh Limited (CDBL).

Copies of the aforementioned contracts and documents and a copy of Memorandum and Articles of Association of the Company and the Consent Order from the Securities and Exchange Commission May be inspected on any working day during office hours at the Company's Registered Office.

31

"INTERESTED PERSONS ARE ENTITLED TO A PROSPECTUS, IF THEY SO DESIRE, AND THAT COPIES OF PROSPECTUS MAY BE OBTAINED FROM THE ISSUER AND THE ISSUE MANAGER"

TRUST BANK LIMITED

APPLICATION FORM APPLICATION FOR SHARES BY INVESTORS OTHER THAN NON-RESIDENT BANGLADESHIS

WARNING: Please read the instructions on the back of the form. Incorrectly filled applications may be rejected. The Managing Director Trust Bank Limited. 36,dilkusha C/A, Dhaka-1000. Dear Sir, I/we apply for and request you to allot me/us the ......................... number of Shares and I/we agree to accept the same or any smaller number that may be allotted to me/us upon terms of the Company's approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Member(s) of the Company and deposit the said shares to my/our Depository (BO) Account and/or a crossed (A/C Payee Only) cheque in respect of any Application money refundable by post/courier at my/our risk to the first applicant's address stated below: 1. 2. 3. No. of Ordinary Shares ........................of Tk. 150.00 each including a premium of Tk.50 per share. Amount Tk. (in figure) .........................., Taka (in words) ........................................... only deposited vide Cash/ Cheque/Draft/Pay Order No...................Date..................... on..................... Bank....................Branch Depository (BO) Account Number Bankers Sl No.

4.

I/we agree to fully abide by the instructions given herein. Particulars of Applicant(s) : Sole/First Applicant : Mr./Mrs./Ms. Father's/Husband's Name : Mother's Name: Postal Address : Telephone (if any): Occupation : For Refund Warrant : Applicant's Bank A/C No. : Name of the Bank : Second Applicant : Mr./Mrs./Ms. Father's/Husband's Name : Mother's Name: Postal Address : Occupation :

{If you do not mention your valid Depository (BO) Account, your application will be treated invalid.}

Nationality :

Branch :

Nationality:

5. 6.

I/we hereby declare that I/we have read the Prospectus of Trust Bank Limited, and have willingly subscribed for ................................. No. of Shares of Tk. 150.00 each including a premium of Tk. 50.00 per share. Specimen Signature(s) : Name in Block Letters (i) (ii) Signature

.....................................................................................................................................................................................................

BANKER'S ACKNOWLEDGEMENT

Certified that this Bank has received Tk....................................... (in words..................................................................................................) only from Mr./Mrs./Ms. .................................................................................................................................................................................. being the Application money for ....................... Nos. of Ordinary Shares of Trust Bank Limited.

Banker's SL. No.

Seal & Date

Authorized Signature (Name & Designation)

32

INSTRUCTIONS

1. As per provision of Depository Act, 1999 and regulations made thereunder shares will only be issued in dematerialized condition. Please mention your Depository (BO) Account number in the Application form. If you do not mention your valid Depository (BO) Account number, your application will be treated invalid. All information must be typed or written in full (in Block letters) in English or in Bengali and must NOT be abbreviated. Application must be made on the Company's printed form/photocopy or on typed copy/hand written form thereof. Application must not be for less than 50 Ordinary Shares and must be for a multiple of 50 Ordinary Shares. Any Application not meeting this criterion will not be considered for allotment purpose. Remittance for the full amount of the Shares must accompany each Application and must be forwarded to any of the Bankers to the Issue. Remittance should be in the form of Cash/Cheque/Bank Draft/Pay Order payable to one of the Bankers to the Issue favoring "Trust Bank Limited." and crossed "A/C Payee only" and must be drawn on a Bank in the same town as the Bank to which the Application form has been sent. In the case of Joint Application Form, the Allotment Letter will be dispatched to the person whose name appears first on this Application Form and where any amount is refundable in whole or in part the same will be refunded by Account Payee Cheque by post/courier service to the person named first on this Application Form in the manner prescribed in the Prospectus. Joint Application form for more than two persons will not be accepted. In case of joint Application, each party must sign the Application Form. Applications must be in full name of individuals or companies or societies or trusts and not in the name of firms, minors or persons of unsound mind. Application from financial and market intermediary companies and Private Company must be accompanied by Memorandum and Articles of Association and Certificate of Incorporation. An applicant can submit NOT more than two Applications, one in his/her own name and another jointly with another person. In case an applicant makes more than two Applications, entire application money will be forfeited by the Commission.

2. 3. 4. 5.

6.

7. 8.

9.

10. No receipt will be Issued for the payment made with Application, but the bankers will issue a provisional acknowledgment to the Issue for Application lodged with them. 11. Refund will be made only through "ACCOUNT PAYEE" Cheque(s) with Bank A/C No. and name of Bank Branch as mentioned in the Application payable at Dhaka or Chittagong, as the case May be. 12. Allotment shall be made solely in accordance with the instructions of the Securities and Exchange Commission (SEC). 13. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information shall make the Application liable to rejection and subject to forfeiture of Application money and/or forfeiture of the share (unit) before or after issuance of the same by the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the Securities and Exchange Commission (SEC). This may be in addition to any other penalties as may be provided for by law. 14. Applications, which do not meet the above requirements, or Applications, which are incomplete, shall NOT be considered for allotment purpose. 15. The Banker's to the Issue Banks shall be obliged to receive the A/C Payee Cheque(s) on the closing day of the subscription of the IPO. 16. No sale of securities shall be made, nor shall any money be taken from any person, in connection with such sale until twenty five days after the prospectus has been published.

33

BANKERS TO THE ISSUE

Trust Bank Limited 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. Principal Branch, Dhaka. Gulshan corp. Br. Dhaka Sena Kallyan Bhaban Br., Dhaka. Dhanmondi Branch, Dhaka Uttara Corp. Br., Dhaka Dilkusha Br. Dhaka Millennium Corp. Branch, Dhaka Radission Water Garden Hotel Br. Dhaka Savar Cantt. Br., Saver Comilla Cantoment Br., Comilla CDA Avenue Br. Chittagong Agrabad Branch, Chittagong Chittagong Cantt. Br., Chittagong Khatungonj Br. Chittagong. Halishahar Br., Chittagong Sylhet Corporate Br. Sylhet. Jalalabad Cantt. Br., Sylhet Bogra Cantt. Br., Bogra Rangpur Cantt. Br., Rangpur Jessore Cantt. Br., Jessore Momenshahi Cantt. Br., Momenshahi Shaheed Salahuddin Cantt. Br., Ghatail Khawza Yunus Ali Medical college Hospital Branch, Sirajgonj. Moulvi Bazar Br., Moulvi Bazar. Prime Bank Ltd. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. Motijheel Br., Dhaka Khatungonj Br. Chittagong. Moulvi Bazar Br., Dhaka Khulna Br., Khulna IBB Dilkusha Br., Dhaka Mohakhali Br., Dhaka Barishal Br., Barishal Kawranbazar Br., Dhaka Elephant Road Br.,Dhaka Court Rd Br., Sylhet Mouchak Br., Dhaka Gulshan Br., Dhaka Narayangonj Br., Narayangonj Agrabad Br., , Chittagong Jubille Rd Br., Chittagong Bangshal Br., Dhaka Jessore Br., Jessore Gonakbari Br. Savar, Dhaka Satmosjid Road Br., Dhaka Foreign Exchange Br., Dhaka Dhanmondi Br., Dhaka Eskaton Br. Dhaka Bogra Br., Bogra Madhabdi Br., Narsingdi Banani Br., Dhaka Sylhet Br., Laldighirpar, Sylhet Rajshahi Br., Rajshahi IBB,Amberkhana, Sylhet Uttara Br., Uttara, Dhaka IBB Mirpur, , Mirpur IBB O.R. Nizam Road Br. Chittagong Pragati Sarani Br., Dhaka. IBB, Phartali, Chittagong Shimrail Br., Narayangnj. Asad gate Br., Dhaka SBC Tower Br., Dilkusha, Dhaka Tongi Br., Tongi. Panthapath Br., Dhaka. One Bank Limited 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Mothijheel Br. , Dhaka Principal Br. Dhaka Agrabad Br. Chittagong Gulshan Br. Dhaka Khatungang Br. Chittagong Ganak Bari(EPZ) Br. Dhaka Uttara Br. Dhaka Sylhet Br. Sylhet Imamgang Br. Dhaka Islampur Br. Sylhet Joypara Br. Dhaka Mirpur Br. Dhaka Kawran Bazar Br. Dhaka Dhanmondi Br. Dhaka Jessore Br. Jessore Chowmuhuni Br. Noakhali Chandragong Br. Laxipur Narayangang Br. Narayangang Banani Br. Dhaka Bogra Br., Bogra Sherpur Br., Sherpur Kakrail Branch. Dhaka Jubilee road Br. Chittagong

Bank Asia Limited 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Principal Br. Dhaka MCB Dilkusha Br. Dhaka Corporate Br. Dhaka Scotia Br. Dhaka Gulshan Br. Dhaka MCB Banani Br. Dhaka Uttara Br. Dhaka Mitford Br. Dhaka North South Road Br. Dhaka Sylhet Main Br. Sylhet Sylhet Upashahar Br. Sylhet Agrabad Br. Chittagong Khatun gonj Br. Chittagong MCB Sk. Mujib Road Br. Chittagong CDA Avenue Br. Chittagong Dhanmondi Br. Dhaka Station Road Br. Chittagong Bshundhara Br., Dhaka Rajshahi Br., Rajshahi Khulna Br., Khulna

Southeast Bank Limited 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. Principal Br, Dhaka Corporate Br. Dhaka Imamgonj Br., Dhaka Dhanmondi Br., Dhaka Uttara Br., Dhaka New Elephant Rd. Br. Dhaka Gulshan Br., Dhaka Kakrail Branch. Dhaka Shaymoli Branch, Dhaka Motijheel Br., Dhaka Kawran Bazar Br., Dhaka Banani Branch, Dhaka Bangshal Br, Dhaka New Eskaton Br. Dhaka. Agargaon Br. Dhaka Aganagar Br. Keranigonj Bandar Bazar Br. (Islami Banking), Shylet. Shahjalal Upaoshahar Br. Sylhet. Laldighirpar Br., Sylhet, Chouhatta br. Sylhet. Moulvi Bazar Br., Moulvi Bazar Kulaura Br., Moulvi Bazar Hetimgonj Br. Sylhet Pathantula Br. Sylhet Agrabad Br., Chittagong, Jubilee Road Br., Chittagong Khatungonj Br., Chittagong Halishahar Br, , Chittagong CDA Avenue Br., Chittagong Cox's Bazar Br., (Islami Banking) Chagalnaya Br. (Islami Banking) Feni Feni Branch, Feni, Khulna Br., Khulna

Investment Corporation Of Bangladesh 1. 2. 3. 4. 5. 6. 7. 8. Head Office, Dhaka. Chittagong Br., Chittagong. Rajshahi Br., Rajshai. Khulna Br., Khulna. Barishal Br., Barishal. Sylhet Br., Sylhet Bogra Br., Bogra. Local Office, Dhaka.

EXIM Bank of Bangladesh Limited 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Panthapath Br, Dhaka. Imamgonj Br. Dhaka. Gulshan Br. Dhaka Rajuk Avenue Br. Dhaka. New Eskaton Br. Dhaka. Uttra Br. Dhaka. Mirpur Br. Dhaka. Elephant Road Br. Dhaka. Malibag Br. Dhaka. Bashundara Road Br. Dhaka. Satmasjed Road Br. Dhaka. Nawabpur Br. Dhaka. Sylhet Br. Sylhet Narayangonj Br. Narayangonj. Shimrail Br. Narayangonj. Jublee Road Br. Chittagong. Agrabad Branch, Chittagong. Khatungonj Br. Chittagong. CDA Avenue Br. Chittagong.

Standard Bank Limited 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Principal Br. Dhaka. Foreign Exchange Br. Dhaka Topkhana Road Br., Dhak Imamgonj Br., Dhaka Gulshan Br., Dhaka Dhanmondi Br., Dhaka Uttara Br., Dhaka Gulshan-1 Br., Dhaka Pantha Path Br., Dhaka Munsikhola Br., Dhaka Jubilee Road Br., Ctg Agrabad br., Ctg Khatungonj Br., Ctg Sylhet Br., Stlhet Khulna Br., Khulna Rajshahi Br., Rajshahi.

Arab Bangladesh Bank Ltd. 01. Merchant Banking Wing, Dhaka.

34

"INTERESTED PERSONS ARE ENTITLED TO A PROSPECTUS, IF THEY SO DESIRE, AND THAT COPIES OF PROSPECTUS MAY BE OBTAINED FROM THE ISSUER AND THE ISSUE MANAGER"

TRUST BANK LIMITED

APPLICATION FORM APPLICATION FOR SHARES BY NON-RESIDENT BANGLADESHIS (To be sent to the Bank's Head Office) WARNING: Please read the instructions at the back of this form. Incorrectly filled Applications or failing to comply with any instruction therein, application may be rejected.

The Managing Director Trust Bank Limited. 36,dilkusha C/A, Dhaka-1000.

Dear Sir, I/We apply for and request you to allot me/us the .......................number of Shares and I/we agree to accept the same or any smaller number that may be allotted to me/us upon terms of the Company's approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Members of the Company and deposit the said shares to my/our Depository (BO) Account and/or a crossed (A/C Payee only) Cheque in respect of any Application money refundable by post/courier at my/our risk to the first applicant's address stated below:

1. 2. 3. 4. No. of Shares ................................ of Tk. 150.00 each including a premium of Tk. 50.00 per share. Amount of Tk. (in figure) ................................................... Tk. (in words) ............................................................. only convertible into US Dollar 1.00 = Tk................... /UK Pound Sterling 1.00 = Tk.............../Euro 1.00 = Tk................ Payment by Draft/pay order Cheque No.......................... date....................... for US Dollar/UK Pound Sterling/ Euro/Tk............................. drawn on........................... Bank...............................branch Depository (BO) Account Number (If you do not mention your valid Depository (BO) Account, your application will be treated invalid.) I/we agree to fully abide by the instructions given herein. Particulars of Applicant(s) Sole/First Applicant : Mr./Mrs./Ms. Father's/Husband's Name : Mother's Name: Mailing Address : Occupation : Telephone (if any): Passport No. : For Refund Warrant : Applicant's Bank A/C No. : Name of the Bank : Second Applicant : Mr./Mrs./Ms. Father's/Husband's Name : Mother's Name: Mailing Address : Occupation : Passport No. : Date of Birth : Nominee Name : Mailing Address: Specimen Signature(s): Name in Block Letters Sole/First Applicant : Second Applicant : Nominee : Signature

5. 6.

Nationality : Date of Birth : Valid up to: Branch :

Nationality : Valid up to :

35

INSTRUCTIONS 1. As per provision of Depository Act, 1999 and regulations made thereunder shares will only be issued in dematerialized condition. Please mention your Depository (BO) Account number in the Application form. If you do not mention your valid Depository (BO) Account, your application will be treated invalid. All information must be written or typed in Block Letters in English and must NOT be abbreviated. Application must not be for less than 50 Ordinary Shares and must be for a multiple of 50 Ordinary Shares. Any Application not meeting this criterion will not be considered for allotment purpose.

2. 3.

4. Application must be accompanied by a foreign demand draft drawn on a bank payable at Dhaka or cheque drawn out of foreign currency deposit account maintained in Bangladesh for the full value of Shares favoring "Trust Bank Limited." and crossed "ACCOUNT PAYEE ONLY". 5. Application shall be sent by the applicant directly to the Company within 19/7/2007 so as to reach the Company within 28/7/2007 No Application sent after 19/7/2007 or received by the Company after 28/7/2007 will be considered for allotment purpose. Refund against over-subscription shall be made in the currency in which the value of Shares was paid for by the applicant through Account Payee Cheque payable at Dhaka with bank account number, Bank's name and Branch as indicated in the securities application form. All the applicants shall first be treated as applied for one minimum lot. If, on this basis, there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for each application, irrespective of the application money. On the other hand, if there is under subscription, then all the applicants shall first be distributed with a single lot and thereafter, for the balance amount, lottery, shall be held for the applicants who have applied for multiple lots on the basis of dividing the application money by amount of a market lot separately for both NRB and General Public. Money receipt of clearance of draft or cheque, as the case may be, shall be sent by post to the applicant by the Company. Joint Application by two persons will be acceptable. In such a case, allotment or refund shall be made by post to the first applicant.

6.

7.

8. 9.

10. Application must be made by an individual, a corporation or Company, a trust or a society and not by a firm, minor or persons of unsound mind. 11. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information shall make the Application liable to rejection and subject to forfeiture of Application money and/or forfeiture of the share (unit) before or after issuance of the same by the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the Securities and Exchange Commission (SEC). This may be in addition to any other penalties as may be provided for by law. 12. The intending NRB applicants shall deposit share money by US ($)/ Euro ()/UK() draft drawn on and payable in Dhaka, Bangladesh, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, so that the Issuer's collecting Bank can clear that proceeds and deposit the same into Issuer's Bank account in time. 13. Spot buying rate (TT Clean) in US Dollars, UK Pound and Euro of Sonali Bank as prevalent on the date of opening of subscription will be applicable for the Non-Resident Bangladeshi (NRB) applicants. 14. The applicant shall furnish photocopies of relevant pages of valid passport(s) in support of his being a NRB, dual citizenship or of the foreign passport bearing an endorsement from the concerned Bangladeshi Embassy to the effect that no visa is required for him to travel to Bangladesh. 15. In case of joint NRB application joint applicant shall also submit supporting papers/ documents in supported of their being an NRB as mentioned in para-14 above. 16. An applicant cannot submit more than two Applications, one in his/her own name and another jointly with another person. In case an applicant makes more than two Applications, entire application money will be forfeited by the Commission. 17. No sale of securities shall be made, nor shall any money be taken from any person, in connection with such sale until twenty five days after the prospectus have been published. THE NRB APPLICATION ALONG WITH THE DRAFT, AS ABOVE, IS TO BE SUBMITTED TO THE COMPANY'S HEAD OFFICE DIRECTLY WITHIN THE STIPULATED TIME MENTIONED IN PARA 5.

36

CREDIT RATING REPORT ON TRUST BANK LIMITED

REPORT: RR/107/07

Analysts

Md Abdul Wadud Khan, Ms Umme Salma

This is a credit rating report as per the provisions of the Credit Rating Companies Rules 1996. CRISL long-term rating is valid for only one year and short term rating for six months. After the above periods, these ratings will not carry any validity unless the bank goes for rating surveillances.

CRISL, Bangladesh Rating Year 2006 Entity Rating Long term AShort term ST-3

Entity Rating Date of Rating 1. RATIONALE

Long Term A-

Short Term ST-3 April 23, 2007

TRUST BANK LIMITED

PRINCIPAL ACTIVITY Commercial Banking INCORPORATED ON July 15, 1999

BOARD CHAIRMAN

Lt Gen Moeen U Ahmed, psc, Chief Of Army Staff, Bangladesh Army.

MANAGING DIRECTOR

Mr Iqbal U. Ahmed

CRISL assigns A- ( A minus ) to Trust Bank Limited in long term and St-3 rating for short term. It has been done on the basis of Bank's good fundamentals such as good asset quality, good profitability, moderate growth rate , reasonable capital adequacy and diversified product lines . However the above factors are moderated, to some extent, by limited market share, high dependence on term loans and average risk management. Bank rated in this category are adjudged to offer adequate degree of safety for timely payment of financial obligations. This level of rating indicates a corporate entity with an adequate credit profile. Risk factors are more variable and greater in periods of economic stress than those rated in higher categories. The short term rating indicates good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although on going funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. 2.0 CORPORATE PROFILE 2.1 Trust Bank Limited Trust Bank Limited ("TBL") was established under the Bank Companies Act, 1991 and incorporated as a Public Limited Company under the Companies Act, 1994 with the primary objective to carry out all kinds of banking businesses in and outside Bangladesh. The bank obtained license from Bangladesh Bank on July 15, 1999 and started actual operation from November 29, 1999. The idea of setting up a Bank by the Army Welfare trust of Bangladesh Army was first conceived in 1987. Initially the Bank started operation in the name of "The Trust Bank Limited" but on November 12 , 2006 it was renamed as "Trust Bank Limited" and got registered with the Registrar of Joint Stock Companies which was subsequently approved by Bangladesh Bank on December

Deposit vs Loan & Adv. ( Tk In Million) 21500 11500 1500

2002

2004

2006

Deposit

Loan & Adv.

ROAA vs ROAE ( in percentage ) 50 40 30 20 10 0 2003 2004 ROAA 2005 ROAE 2006

EQUITY TK 500.00 million DEPOSITS Tk. 18,985.95 million LOANS & ADVANCES Tk. 13,188.09 million INVESTMENTS Tk. 3,260.37 million ASSETS Tk 21,197.59 million

EQUITY vs INVESTMENT ( Tk in Million) 4000 3000 2000 1000 0 2002 Equity 2004 2006

Investment

CREDIT RATING REPORT ON TRUST BANK LIMITED

3, 2006 . Army Welfare Trust is the major shareholder of the bank. The authorized capital of the Bank is Taka two thousand million and paid-up capital is Taka five hundred million. The Bank has decided to offer Public shares in the near future. The mission & vision of the bank is "To be a Bank with difference and utilize profit for the Socio-economic development of the members of the Bangladesh Army and thereby the nation as a whole". The head office of the Bank is located at Peoples' Insurance Bhaban, 36, Dilkusha, Dhaka-1000. 2.2 Ownership Pattern Presently the bank is owned by the Army Welfare Trust of the country. It holds 99.99% shares and the rest (i.e. .01%) is held by the Board members of the bank who are senior army personnel by virtue of Army Welfare trust's mandate. Therefore the shareholding at present is highly concentrated. However with the floatation of the shares to the public, the shareholding pattern will be diluted with public participation. Against the present authorized capital of Tk. 2000 million the paid-up capital will be raised through ensuing IPO Floatation. 2.3 Branch Network The Branch network of the Trust Bank Limited is quite strong. With an age of only seven years the bank is now having a network of 26 branches across Bangladesh as on 31 December, 2006. These branches are situated at various strategically important commercial and industrial locations in the country. Among these branches, 8 branches are in Dhaka, 4 branches in Chittagong, 4 branches in Sylhet , 1 branch in Sirajgonj and I branch each at the cantonment areas of Chittagong ,Sylhet, Comilla , Bogra, Rangpur, Jessore, Momenshahi, Savar, Ghatail . The above branch network is expected to be sufficient to maintain required growth rate of the bank.

Branch net work 26

2.4.1

Diversified product lines .

Products and Services Trust Bank Limited has been established with the objective of providing efficient and innovative banking services to the people of all sections of the society. Towards this end TBL offers full range of normal banking services that include deposit banking, loans and advances, export, import , inward worker remittances etc. Deposit Schemes include Trust Smart Saver Scheme (TSS), Trust Money Double Scheme(TMDS), Trust Money Making Scheme(TMMS), Trust Edu-care Scheme (TES), Monthly Benefit Deposit Scheme(MBDS), Lakho Pati Saving Scheme (LSS), Interest First Fixed Deposit Scheme (IFFDS), Retail Loan Products ( General ) include Car Loan ,Doctor Loan, Education Loan, Travel Loan, Hospitalization Loan, Any Purpose Loan, Apon Nibash Loan, CNG Conversion Loan, Marriage Loan, Advance Against Salary Loan, and Retail Loan Products ( Defense ) include HBL ( Regd. Mortgage) , HBL ( Commutation Benefits), OD ( against salary), Marriage Loans, RRDH( micro credit), Car Loans, House Hold Durable Loans, Doctor's Loan, Any Purpose Loans, Education Loans and CNG conversion Loans. The Bank also provides international trade related services as Private Foreign Currency Accounts, Non-resident and Resident Foreign Currency Deposit Accounts, Travelers' Endorsement (Cash and Travelers Cheque), Remittance of Foreign Currency, Import and Export Transaction, Foreign Exchange Dealings, Purchase of Foreign Currency Drafts, Cheques, Travelers Cheques, Wage Earner's Development Bond etc. Other services of TBL include Trust Locker Service and Trust Tele Banking. The bank is committed to ensure customized, qualitative and hassle free services in its banking operations along with the focus to broaden the clientele base. 4.0 INDUSTRY ANALYSIS

4.1 Bangladesh Banking Sector Keeping pace with the global changes, the banking sector of the country has been undergoing a remarkable change during the last couple of years. In order to bring the sector in line with the international norms, the central bank has taken a number of steps under the Financial Sector Reform Program. During the last couple of years, the Bangladesh Bank has taken a number of steps through prudential circulars and best practice guidelines to improve the governance practice of the sector. Some of the worth mentioning steps were: limiting the percentage of family shareholding and directorship from the same family, limiting the number of directors in the board, obtaining prior

CREDIT RATING REPORT ON TRUST BANK LIMITED

permission of the central bank in appointment and termination of the services of CEO, issuance of best practice guidelines for core risk management, mandatory requirement of Risk grading system in order to minimize risk of credit etc. Most recently, the central bank introduced the mandatory annual credit rating requirement for all schedule banks. The Bank for International Settlement (BIS) has finalized the Basel-II Accord after issuing several consultative papers and impact studies and published the same under the title "International Convergence of Capital Measurements and Capital Standards" in June 2004 to be effective from 2006. Most of the developed and developing countries have drawn up the implementation plan of Basel-II in their respective countries. The neighboring countries are now implementing Basel ­II Accord. Although the Basel Accord is not mandatory for the banks but international convergence and market forces will force the banks to adopt the same within next couple of years. The Bangladesh Bank has also decided to go for adoption of Basel-II with effect from January 2009 and formed two committees to explore the various aspects of its implementation. Bangladesh banking sector has 48 banks consisting of 4 NCBs, 5 specialized banks, 09 foreign banks, 24 private sector commercial banks and remaining 06 private sector banks operating on Shariah principles. The NCBs occupy 38.84% and 36.23% of market share of deposits and loans & advances respectively and others share the balance. The market share of private sector banks is in increasing trend. The Government has the plan to ultimately privatize the NCBs. CRISL expects a paradigm shift in the management pattern of the entire banking system on implementation of Basel Capital Accord. In the New Capital Accord the risk emphasis has been expanded to both credit risk, market risk and operational risk. In order to assess the risk our neighboring countries like India and Pakistan have adopted standardized approach for Credit Risk and Basic Indicator Approach for operational risk which is considered to be easy for the banks at the initial stage. Under the Standardized Approach, the banks will determine the capital adequacy on the basis of the rating report of the counter parties from the rating agencies. In addition, 15% of the gross income of the banks will be applied in determining the capital base for operational risk. The above would warrant the financial institution to invest more in IT infrastructure systems and Human resources. The business operation will be more sensitive to risk and capital and in this connection; the supervisory oversight will be stronger. Under the above backdrop CRISL believes that Trust Bank management will devise its operational strategy accordingly.

Deposit Market share

Loans & Advances Market share 0.68%

0.94%

4.2 Market Share Trust banks market share in terms of both deposits and loans & advances are moderate. At the end of December 31, 2006 the bank's Deposit formed 0.94% of industry deposits and loans & advances formed 0.68% of industry loans & advances. At YE2005, the market share of deposit and loans & advances of the Bank was 0.82% and 0.82% respectively. 4.3 Non funded business Trust Bank's earning from non-funded business at YE2006 was TK 247.92 million which constituted 29.10% of the total earning of the Bank. The import business of TBL during YE2006 and YE2005 stood at TK 11436.3 million and TK 7592.50 million respectively with a remarkable rise of 50.63% at YE 2006. On the other hand, the bank's export business was TK 2999.90 million and TK 2072.40 million at YE2006 and YE2005 respectively with an appreciable growth of 44.75%. The inward remittance of the Bank stood at TK 765.30 million and TK 535.20 million at the end of year 2006 and 2005 respectively to record 43.00% growth. The Bank's import bills at YE 2006 exceeded Export bills to the extent of Tk 8436.40 million 5.0 Corporate Governance The Corporate governance principles play a vital role in running an organization as a corporate citizen. Good Corporate governance establishes trust among the interested parties, provides trustworthy information for the stakeholders, establishes professionalism, builds capacity to operate business efficiently and creates a congenial working environment, which ultimately assists the bank to augment shareholders value and protects the interest of the stakeholders. The appropriate governance is inevitable to confront the present competitive business environment. Corporate governance practices in Trust Bank Limited may be depicted as follows: 5.1 The Board of Directors Trust Bank's 8-member board is constituted by all Senior Army Officials headed by the Chief of Army Staff as per mandate of Army Welfare Trust foundation. During 2005 Lt Gen Moeen U Ahmed

CREDIT RATING REPORT ON TRUST BANK LIMITED

became the Chairman of the Board. Other board members are Maj Gen Md Matiur Rahman, the Adjutant General of Army, Brig Gen S M Mahbubul Karim, Brig Gen Md Rafiqul Islam, Brig Gen Md Shawkat Hossain, Brig Gen Muhammad Anisur Rahman, Brig Gen Md Zillur Rahman and Brig Gen Mohd Mahbubul Hasan. The Managing Director of the Bank is acting as Ex-officio Director in the board. Therefore, composition of the Board reflects single ownership pattern and as such the board composition is not in line with the best practice and Bangladesh Bank's general guidelines. However, the constituted Board follows all rules and regulations approved by the Bangladesh Bank for retirement /re-election as the case may be in its annual general meeting. The Board of TBL sets the goal and reviews performance on a regular basis. It is responsible for strategic planning, providing policy guidelines and understanding risks faced by the bank. In order to discharge Board's function more effectively, the Board has constituted an Executive Committee and an Audit Committee as per Bangladesh Bank's guideline. During the year 2006, the Board held 13 meetings compared to 11 meetings in 2005. 5.2 Executive Committee The Executive Committee (EC) of TBL is composed of 4 members ( including MD) selected from the Board and is headed by Major Gen Md. Matiur Rahman. The other two members are Big. Gen. Md. Rafiqul Islam and Big. Gen. Muhammad Anisur Rahman. The Executive Committee held 15 meetings during the year 2006. The committee mostly dealt with decisions regarding urgent policy related matters. 5.3 Audit Committee An audit committee has been formed, in line with the guide lines of BB, for better transparency, accountability and formation of better bridge between the Management and the Board. The committee constitutes with a Convener, two members and a member secretary. Currently Brig Gen.S.M Mahbubul Karim is the Convener of the Audit Committee. Other members are Brig. Gen. Md. Shawkat Hossain Big. Gen. Mahbubul Hassan. Mr. Farhad Uddin, Company Secretary of the bank has been working as the Secretray of the Committee which is inline with BB Guidelines. The Convener of the Audit committee has an MBA degree and the member secretary is a Fellow Cost and Management Accountant. During the year 2006, the Audit Committee held 5 meetings and considered / reviewed the Bank's Financial Statements and Risk Management system. Additionally, in order to establish more discipline in the application of rules and regulations, there is provision of surprise spot-audit program under an independent Auditor . During FY 2006, 10 surprise spot Audit checks were carried out. 5.4 Delegation of Power The delegation of power in TBL is moderate. The board has delegated adequate administrative and specified financial power at different levels of decision making process for better and quick dispensation of issues to bring dynamism in the whole Banking operation. Both financial and business operation delegation are quite sufficient for smooth business operation and in line with the Bangladesh Bank guidelines. The delegation at the branch level is also good. The above delegation is considered to be sufficient to operate the activities without any hindrances. 5.5 Management Committee Management Committee of TBL is headed by the Managing Director, Mr. Iqbal U. Ahmed , a post graduate in management from Dhaka University , is a career banker with 33 years working experience in banks with important responsibilities. Mr. Ahmed joined the TBL in August 03, 2003. Before joining TBL he was Senior Executive Vice President (SEVP) in Arab Bangladesh Bank, a private sector bank where Mr. Ahmed served for 20 years. Other members of the management committee are Deputy Managing Director, head of Credit Risk Management, head of HR and ICC, Head of IT, Head of credit approval and operation. Besides the MD is assisted by DMD, 7 Senior Vice Presidents, 13 Vice Presidents, 18 Senior Assistant Vice Presidents and 21 Assistant Vice Presidents. The management team is aware of the mission and visions of the bank and has the capability and commitment to achieve the same.

CREDIT RATING REPORT ON TRUST BANK LIMITED

5.6 Human Resources Management Trust Bank follows a structured service rules and compensation package for its workforce at all levels. The bank provides various benefits like Provident Fund, Gratuity Scheme and Superannuation Fund for its eligible staff. The Bank has adopted a new Human Resource Policy for recruitment, promotion and training. The new policy includes detailed and specific criteria for recruitment of competent candidates on the basis of merit only . Trust Bank is now operating with total staff strength of 505 employees as on December 31, 2006 which was 353 at YE2005. The bank has employee turnover of 3.8% and 4.5% at YE2006 and YE2005 respectively. The employee turnover during the year 2006 and 2005 includes only mid level and entry level positions. 5.6.1 Training Success of any organization largely depends on the efficiency and competency of its manpower and the same is applicable in case of Trust Bank Limited. With a view to upgrade its manpower, TBL's Training Academy started functioning effectively. It has, in the mean time arranged training for officers on different operational activities of the Bank. During the year 2006 the Academy has conducted 49 training sessions covering various banking issues and trained 117 employees of different ranks. Apart from this, 65 executives and other officers of the bank participated in various training courses organized by Bangladesh Bank and some other organizations during 2006. Besides 5 mid level officials were sent abroad for training during 2006. 5.7 Management Information System (MIS) The Management Information System (MIS) of Trust Bank Limited is at developing stage. The bank is currently using MIS Report only for customer account related information and bank's financial position. The bank has recently launched online banking services at front office operations which facilitate any branch banking, ATM Banking, 24 hours Phone Banking, SMS Banking and Internet Banking to all customers. Except one, all branches of the bank are currently using Centralized Banking Software for their daily transaction processing and routine reporting. Credit risk management is also available in the centralized banking software. Besides, the bank has subscribed to ATM, VISA Debit and Credit cards, which will be an important milestone in automation of banking services. It is expected that with the introduction of new technology, the bank will be able to render better and efficient services to its customers that will enhance bank's competitive value. The bank has taken sufficient safeguard against disaster management and recovery. The bank has a Disaster Recovery Site (DRS) in place replicating the Data Center and its DR site is equipped with compatible hardware and telecommunications equipment to support the live systems in the event of any disaster. Yet the Bank is to develop modern "MIS" for use of management and other offices for timely availability of vital data for planning and decision making purposes at the appropriate time to augment profitability. Under the forthcoming Basel II implementation plan of BB, banks will be required to have its IT system Basel II compliant . 6.0 Risk Management: Risk Management system and its application in practice is a critical part of the bank management. In order to execute the system based banking through suitable risk management system, Bangladesh Bank has circulated Five Core Risks Management Best Practice Guidelines which consists of Internal Control & Compliances, Credit Risk Management, Foreign Exchange Risk Management, Asset Liability Management and Prevention of Money Laundering. TBL's risk management procedure is described below: 6.1 Credit Risk Management (CRM) Credit Risk management is one of the core functions of Bank/FI management. TBL has adopted the best practice guideline suggested by Bangladesh Bank and it has a written credit Policy Manual. TBL has a Credit Committee headed by the Managing Director along with senior officials as member. In general, credit proposals are assessed at branch level in terms of competency of borrower which is followed by a standard process of credit risk analysis, market risk analysis and finally the approval process is conducted by efficient personnel at different levels of Credit Risk Management (CRM) Division before being finally approved at appropriate levels of Management as per delegated financial power .

CREDIT RATING REPORT ON TRUST BANK LIMITED

The credit risk mainly follows Historical Analysis, Forecast and debt structure and protection. The credit portfolio is evaluated, monitored and supervised on monthly basis to mitigate risk factors that may have an effect on recovery of loans. 6.2 Asset Liability Management (ALM) As per Bangladesh Bank guidelines, TBL has formed a committee for assets and liability management called Assets & Liability Management Committee (ALCO). The Committee is headed by the Managing Director. Other members of the ALM are DMD, Head of International Division & ALM desk, Head of credit Division, Head of HRD & Internal Control and Compliance , Head of GSD and Head of FCAD. The bank has a written ALM policy manual approved by the board, developed according to the guideline of Bangladesh Bank. ALM specially focuses on "Risk Management". However, the functions of ALCO include various activities of policy, procedures, guidelines such as capital planning, deposit procurement/borrowing policy, lending policy, interest rate policy, exchange rate policy, liquidity contingency plan and payout policy. The committee held 12 meetings during the year 2006. In those meetings the committee reviewed issues related to product pricing, assets growth, balance sheet gap, Interest rate changes, sensitivity analysis, recovery status, investment and saving mobilization, assets liabilities mismatch etc. ALCO properly minutes the proceedings and also monitors the implementation of its decisions by concerned departments. Balance sheet Gap 6.2.1 Gap analysis provides information on how the assets and liabilities are matched in terms of maturity to minimize risk. Throughout the analysis of asset-liability maturity structure of TBL, it has been observed that the bank has surplus in all maturity bucket categories except in 1-5 year maturity. In this bucket asset to liability ratio was 79.80% . It indicates risk of liquidity crisis in longer term that may require borrowing at higher rate. However, overall gap analysis results a net positive liquidity gap of Tk 1214.25 million. Hence, it is assumed that the bank may be able to meet its obligations with sufficient cumulative surplus and thereby minimize its risk to maintain profitability unaffected. 6.3 Operational Risk Management 6.3.1 Internal Control and Compliance According to the core risk management doctrine provided by Bangladesh Bank, commercial banks must have internal control and compliance procedures, which will deal with the matters relating to operational and business risk of the entity. TBL has adopted its own board approved internal control manual. In order to review various functions of the bank, TBL follows standard control procedures like Departmental Control Function Checklist (DCFCL), Quarterly Operation Report (QOR), and Loan Documentation Checklist (LDCL) which deals with matters relating to review of departmental function, operational function of each branch in compliance with policies, procedures & control and matters related to security documentation. In addition to periodic evaluation by the internal audit team, TBL has an Internal Control & Compliance (IC&C) division that conducts spot inspection of different branches to carry out sample checks on the items mentioned in the DCFCL, LDCL and QOR and hence verifies risk areas. The Internal Audit and Compliance Division (IACD) of the bank deals with the legal and regulatory requirements, operational irregularities and monitoring the overall activities with the objective to find out the deficiencies in operation, inadequacy in control system and to report the relevant facts to Board's Audit Committee and Managing Director of the bank simultaneously. The Internal audit department works under an approved audit program and conducted audit of 13 branches during the year 2005 and 9 important branches during 2006. Prevention of Money Laundering 6.3.2 The banks and financial institutions should undertake anti money laundering policy as a part of their operational risk management since, it has adverse impact on overall economy and society. TBL has its own Anti Money Laundering Compliance Cell as well as a policy manual as per Bangladesh Bank guidelines. There is a Chief Anti Money Laundering Compliance Officer (CAMLCO) at Head Office who is authorized to implement and enforce anti money laundering policies and procedures and who will report to senior management. The CAMLCO is supported by an Anti Money

CREDIT RATING REPORT ON TRUST BANK LIMITED

Laundering Compliance Officer (AMLCO) appointed at each branch that will ensure whether each branch is carrying out policies and procedures as required. The AML compliance policy includes an Anti-Money Laundering (AML) risk assessment which is followed by KYC procedures, risk categorization and ongoing transaction monitoring for detection of any suspicious transactional activity. KYC (Know Your Customer) profiles and Transaction Profiles are updated and reapproved annually for "High Risk" accounts. All suspicious accounts reported to AMLCO of the branch are documented and subsequently reported to CAMLCO if required. CAMLCO eventually reports it to the Managing Director and Bangladesh Bank on quarterly basis and also whenever there is any detection of case. During the year 2006, TBL reported one suspicious transaction detected at Chittagong branch. 6.3.3 Market Risk Major market risks arise from Interest rate risk, Equity Risk, Commodity Risk and Foreign Exchange Risk. The position of TBL in terms of market risk is as follows: 6.3.3.1 Interest Rate Risk Interest rate risk is the exposure of the bank's financial condition to adverse movements in interest rate. The increasing trend of interest rate in the market has been creating substantial interest rate risk for the banks. In view of above, the banks are now paying off the liabilities of lower rate by borrowing at higher rate. Since, cost of fund of TBL shows an upward trend during the period from 2005 to 2006, the bank is predicted to have interest rate risk. 6.3.3.2 Equity and Commodity Financing Risk TBL has invested a considerable portion of its total investment in capital market. The bank's total investment in capital market amounted to TK. 717.33 million that is 22% of total investment portfolio as on December 31, 2006. The majority of this investment (55%) covers Lafarga Surma Cement Co Ltd., Grameen Mutual Fund One and Summit Power Ltd. and the remaining is invested in some other companies. Since TBL's investment portfolio is concentrated in a few companies' shares, TBL is exposed to the risk of market value decrease. During 2006 its investment value decreased to the extent of Tk. 0.65 million for which necessary provision has been kept affecting net income. 6.3.3.3 Foreign Exchange Risk Foreign exchange risk is defined as the potential change in earnings arising due to change in market prices. Such risk may also arise from forward and future options. In the recent past, some of local banks sustained a huge amount of loss in Foreign Exchange dealings. Considering this fact, Bangladesh Bank imposed restriction on forward dealings and issued guidelines on Foreign Exchange Risk Management. TBL has a foreign exchange risk manual and investment policy in compliance with Bangladesh Bank set rules to provide a comprehensive guideline for smooth foreign exchange operations. The bank has also developed different strategies of handling foreign currency risk and sets different limits. TBL maintains various Nostro accounts in order to conduct operations in different currencies including Bangladesh Taka. Management has set an upper limit for losses and a system of risk curbing limits which is related to credit risk and market prices. As on 31st December 2006, TBL has no un-reconciled entries exceeding 3 months time frame as per Bangladesh Bank guidelines. Nonetheless, it has been observed that the import business being handled by the bank is quite higher than the export business, which has laid the bank in a disadvantageous position in terms of foreign exchange dealings. 7. 0 OPERATING PERFORMANCE Trust Bank Limited has shown average performance over the period of 2005 to 2006. CRISL reviews the performance of a bank in terms of its financial performance and operating efficiency as explained below: 7.1 Financial Performance The financial performance of the bank is marginally below the peer average. The performances may be judged in terms of Return on Average Assets (ROAA), Return on Average Equity (ROAE) and

CREDIT RATING REPORT ON TRUST BANK LIMITED

Earning per share (EPS). The bank's net profits after tax at YE2006 was 262.70million which was TK. 121.29 million at YE2005, recording 116.59% growth. Based on the above the bank's earning per share (EPS) was TK. 52.54 and TK. 24.26 during YE2006 and YE2005 respectively reflecting an increase of 116.57% over the previous year. Similarly, the ROAA of the bank stood at 2.47% and 1.68% at YE2006 and YE2005 showing an increasing trend but again this is below peer average of 3.43% at YE2006 . The ROAE of the bank was 40.25% and 24.30% at YE2006 and YE2005 respectively compared to peer average of 44.64% and 37.38% respectively. 7.2 Operating Efficiency The operating efficiency of TBL is expressed in terms of NIM, cost to income ratio and yield per TK.100 staff cost. The NIM of the bank at YE2006 was 2.93% against 1.72% at YE2005. Although the same has increased over the previous year it was still lower than the peer average of 3.43% and 2.98% at YE2006 and YE2005 respectively. The cost to income ratio (efficiency ratio) of TBL is 35.80% less than peer average of 36.31% during the year 2006. However a decline in cost to income ratio from 42.07% during YE2005 to 35.80% during YE2006 indicates cost effective operation of the Bank. The Bank's yield per TK. 100 staff cost accounted as TK 395.6 during YE2006 which was higher than peer average of Tk 356.39 . At YE2006, the bank's total operating income constituted 46.95% net interest earnings, 20.05% investment income, 29.10% commission, exchange & brokerage and 3.89% other income, whereas the same figures were 32.67%, 38.02%, 25.41% and 3.91% respectively at YE2005. 8. 0 ASSET MANAGEMENT The asset quality of TBL was good and its size was in line with its peer. At YE2006, the Bank's total asset size was TK. 21,197.59 million which was Tk. 14,807.91 million at YE2005. The growth rate of total asset base was 43.15% which was almost twice than YE 2005. As on 31 December 2006 the total assets of TBL was mostly created through deposit collection (89.57%) and the rest of the volume was financed by borrowings (2.01%), other liabilities (2.70%) and stockholders equity (5.73%). 8.1 Non Performing Loan (NPL) TBL's NPL (Non-performing Loan) has increased to TK 174.37 million as on December 31, 2006 from TK 128.97 million at YE2005. Although the gross NPL ratio (1.32%) of the bank was same during YE2006 as YE2005, but it was below the peer average of 2.90% during YE2006. The net NPL ratio of the bank increased slightly at 0.66% during YE2006 from 0.61% during YE2005 which was also fairly below the peer average of 1.19% at YE2006. During YE2006 the bank's total NPL composed of 51.14% substandard loans, 1.96% doubtful loans and 46.90% bad/loss loans. The gross NPL coverage ratio of the bank was 143.74% and 152.78% during YE2006 and YE2005 respectively which was above peer average of 130.8% at YE2006 but below the peer average at YE 2005 which was 159.25%. 8.2 Sectoral Concentration The loan portfolio of the bank is well diversified. The management of the bank identifies privileged sectors each year after assessing the economic and industrial outlook and profitability factors. The loan composition of the bank reveals that term loan financing consists of 26.20%, House building loans 5.14%, loan against trust receipts 24.09% while other loans & advances consists of 34.57% during YE2006. The bank's loan portfolio of TK. 13,188.09 million during YE2006 constituted mainly of RMG (16.11%), which is followed by Steel & Engineering (11.19%) and Chemical & Pharmaceutical (3.34%), edible oil (2.78%) and other manufacturing and service sectors. The sect oral loan portfolio reveals that TBL has high concentration on garments sector. 8.3 Large and Director Loan As on December 31, 2006 large loan were held in 49 accounts amounting to Tk 10,276.50 million ( both funded and Non funded). The net of which stood at Tk 7533.20 million amounting to 45.75% of total outstanding loans & advances YE 2006. The exposure was well bellow the ceiling applicable to TBL i.e 56.00% .Besides, as on December 31, 2006 there were 5 accounts exceeding TK 100 million aggregating to TK 648.01 million or 4.91% of total outstanding loans and advances. The

CREDIT RATING REPORT ON TRUST BANK LIMITED

advances provided to company directors and other officials amounted TK 94.40 million and TK 53.19 million during YE2006 and YE2005 respectively reflecting an increase of 77.47% in FY 2006. 8.4 Rescheduled Loan The amount of rescheduled loans and advances of Trust Bank Limited was TK 79.06 million (against 33 accounts) and TK 63.90 million (against 19 accounts) during YE2006 and YE2005 respectively. There are only 2 accounts which have been rescheduled for 2nd time and was declassified (TK 8.45 million). This amount of rescheduled loan was 0.60% and 0.66% of total loans and advances during YE2006 and YE2005 respectively. The bank's recovery position was satisfactory which was TK 6.4 million and TK 5.27 million at YE2006 and YE2005 correspondingly. 8.5 Off Balance Sheet Exposure TBL's Off Balance Sheet exposure is at acceptable level and within the parameter set by Prudential guidelines of Bangladesh Bank. The Bank's contingent liabilities to total assets with contra stood at 21.11% and 24.02% during YE2006 and YE2005 respectively whereas the same figures of peer average were 25.84% and 25.09% respectively. The Bank's contingent liability is made up of 15.43% acceptances and endorsements, 56.58% irrevocable letter of credits and 11.98% letter of guarantee during the YE 2006. 9. 0 CAPITAL ADEQUACY The capital adequacy ratio of TBL is below the peer average. The Bank's risk weighted capital adequacy ratio stood at 9.31% and 12.49% at the end of year 2006, 2005 respectively against the minimum requirement of 9.00% fixed by Bangladesh Bank. The decrease in capital adequacy ratio was mainly due to private sector financing. During YE2006 total risk weighted assets of the bank stood at TK14075.99 million against TK. 8925.76 million at YE2005 recording 57.70% growth. The internal capital generation ratio stood at 26.79% and 18.74% at YE2006 and YE2005 respectively compared to peer average of 24.92% and 22.45% during YE2006 and YE2005 respectively. On IPO floatation, the capital adequacy ratio of he bank will substantially improve. 10. LIQUIDITY AND FUNDING The TBL is maintaining average Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) in line with Bangladesh Bank requirements. The Bank's Liquid Assets ratio increased slightly to 34.49% at YE2006 from 34.13% at YE2005 compared to peer average of 25.91% and 28.32% during YE2006 and YE2005 respectively. The bank could manage a Cash Reserve surplus of TK. 2.05 million and TK. 18.42 million at YE 2006 and 2005 only. However, the Statutory Liquidity Reserve surplus was at TK. 372.08 million and TK. 731.01 million during YE2006 and YE2005 respectively. The Bank's net loans and advances to customer deposit was 69.46% and 76.65% at YE2006 and YE2005 respectively, whereas peer average was 87.04% and 89.15% during YE2006 and YE2005 respectively. TBL follows cautious approach regarding the ratio of loans & advances to customer deposit which has negative impact on profitability. 10.1 Fund Management The bank's deposit fund is entirely contributed by customer deposits, which was Tk 18,985.95 million and Tk 12,704.90 million during YE2006 and YE2005 respectively with an increase by 49.44%. Total deposits of TBL are comprised of mostly 75.49% term deposit, 7.67% saving banks deposits and 16.84% current and other deposit during YE2006. The weighted average cost of fund stood at Tk. 9.55% and Tk. 10.37% during YE2005 and YE2006 respectively. The cost of fund increased by 8.59% making interest bearing asset costlier to bank which will reduce interest income of the Bank. The Bank is heavily dependent on term deposit which may influence the raising of the funding cost in future. 10.2 Investment Policy TBL follows structured guideline for investment operations. The bank's total investment portfolio was Tk 3260.37 million as on 31 December 2006 that consists of 78% on government securities and the rest 22% on shares and debentures of some listed and non-listed companies. The Bank's

CREDIT RATING REPORT ON TRUST BANK LIMITED

considerable investment in share market exposes the market risk , since the market value of shares reduced from Tk 225.56 million to Tk 224.91 million as on 31 December 2006. 11. SWOC ANALYSIS Strength Satisfactory asset quality Good internal capital generation Satisfactory operating efficiency Diversified product lines Low human resource turnover Experienced Management team

Weaknesses Limited market share Dependency on Term Deposit Moderate MIS High cost of fund Moderate corporate governance Challenges Increasing cost of fund Market pressure for increasing the SLR Implementation of Basel-II Increased Market competition Product Risk.

Opportunities Investment in SME Basel-II compliance for capital adequacy Creation of brand image Dual currency credit card ON line products & services

12.

PROSPECTS

The financial sector of Bangladesh is now considered to be the most regulated sector of the country. There are 48 banks operating in a small economy like Bangladesh resulting tough competition among the banks to grab the market share. Macroeconomic indicators of Bangladesh were volatile during the last six months of the fiscal year 2006-07. The economy is facing high inflation and turmoil in the money market due to exorbitant rate of imported oil and several times devaluation of local currency against foreign currency. In order to ease the inflationary pressure and to control excessive credit, Bangladesh Bank has been following concretionary monetary policy from the beginning of the year 2005. Banks are being encouraged to increase interest rate, both in deposit and lending. The central Bank has been increasing the CRR from 4.00% to 5.00% from March 2005. As a result, the inter bank money market has been facing severe liquidity shortage and the inter bank borrowing rate has been showing upward trend. Despite the above setbacks, the macro-economy outlook for fiscal year 2006-07 remained favorable due to enhanced remittances from abroad, strong performance in the ready made garments industry and overall growth in the industrial and service sectors. After reviewing the favorable state of the economy, the Government and development partners envisage a 6% to 6.5% GDP growth in the fiscal year 2006-07 which is still, however, lower than the 7%, required to achieve the Millennium Development Goals. Industrial production continues to register strong performances reflecting steady growth despite the earlier concerns about the adverse effect on the industrial sector on account of the ending of MFA quotas. Bank for International Settlement (BIS) has issued Basel-II Capital Accord, which is in the process of implementation globally. Under this framework, capital adequacy will be determined in either Standardized Approach or Internal Rating Based Approach. Most of the developed and developing countries even our neighboring countries have already taken initiatives to implement Basel-II beginning of 2007. Realizing the importance, Bangladesh Bank has already declared the implementation strategy of Basel-II by the beginning of 2009 as said earlier. As a third generation bank TBL has been operating successfully in the banking arena for 7+ years. Modern banking depends on comprehensive risk management, modern banking knowledge and

CREDIT RATING REPORT ON TRUST BANK LIMITED

management under the leadership of Mr. Iqbal U Ahmed, a career banker with more than 33 years experience ,has been trying to overcome the shortcomings of the bank to make it as one of the best private commercial banks in Bangladesh in terms of efficient performance in capital adequacy, swift customer services through real time on-line banking. In the upcoming days, for maintaining the accelerated pace of business growth and operating performance, the bank will have to invest money for the development of IT infrastructure, HR quality and research. The present good asset quality, sound management, good profitability and strong liquidity deploying the best efforts with strong support from sponsors. However, the success of the bank will depend on proper implementation of Core Risk Management, achieving good profitability and at the same time maintaining good asset quality.

END

OF THE REPORT

Information used herein is obtained from sources believed to be accurate and reliable. However, CRISL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Rating is an opinion on credit quality only and is not a recommendation to buy or sell any securities. All rights of this report are reserved by CRISL. Contents may be used by news media and researchers with due acknowledgement.

CREDIT RATING REPORT ON TRUST BANK LIMITED

CORPORATE INFORMATION (AS ON DECEMBER 31ST 2006) DATE OF INCORPORATION: FUNCTIONING DATE: BOARD OF DIRECTORS: 1. Lt Gen Moeen U Ahmed, psc Chief of Army Staff, Bangladesh Army 2. Maj Gen Md Matiur Rahman,ndu,psc Adjutant General(AG), Bangladesh Army, 3. Brig Gen S M Mahbubul Karim Bangladesh Army 4. Brig Gen Md Rafiqul Islam, ndc, psc. 5. Brig Gen Md Shawkat Hossain, psc. 6. Brig Gen Muhammad Anisur Rahman, ndc,psc 7. Brig Gen Md Zillur Rahman, MCPS,MSC 8. Brig Gen Mohd Mahbubul Hasan, ndc,psc. 9. Mr. Iqbal U. Ahmed, Managing Director Chairman Vice Chairman Director Director Director Director Director Director Ex-officio Director Company Secretary: Statutory Auditors: CAPITAL HISTORY: (In Million Taka) Year Authorized Capital 1999 2000 2001 2002 2003 *2004 *2005 *2006 1000.00 1000.00 1000.00 1000.00 1000.00 2000.00 2000.00 2000.00 Issued, Subscribed and Paid-up Capital 200.00 200.00 250.00 350.00 350.00 500.00 500.00 500.00 25.00% 40.00% 42.86% Founder Share holders' fund Do Do Do Do Do Do Do Growth in % Source Mr. Farhad Uddin FCMA ACNABIN (Chartered Accountants) July 17, 1999 November 29, 1999

During 2004 the TBL received Tk. 200 million as share money deposit to be converted as paid up capital. Till YE 2006 all formalities could not be finalized to add the amount with Paid up capital. As such in the Audited Balance sheet the amount has been shown as share money deposit from 2004 to 2006.

CREDIT RATING REPORT ON TRUST BANK LIMITED

FINANCIALS

A. Balance Sheet

( Taka in million)

2006

139.75 1,121.39 2,822.59 67.50 4,151.23 3,260.37 13,188.09 146.05 451.84 21,197.59

ASSET Cash in hand Cash with BB and SB Cash Balance with other Banks & FIs Money at call and short Notice Total cash & money at call Total Investments Total Credit Land/Other fixed assets Other Assets TOTAL ASSETS Liabilities and Shareholders' Equity Inter-bank Borrowing Money Market Current & other deposits Bills payable Savings Deposit Term Deposit Other Deposit TOTAL DEPOSITS Other Liabilities Total Outside Liabilities Issued and paid up capital Statutory Reserve Retained earnings Asset Revaluation Reserve Investment Loss Reserve Other reserve Stockholders' equity TOTAL LIABILITIES & SHE.

2005

99.60 675.94 1,265.36 190.00 2,230.90 2,447.95 9,738.32 110.62 254.36 14,782.14

2004

55.37 361.21 1,373.40 1,789.99 3,220.78 6,804.45 83.97 186.63 12,085.82

2003

25.19 193.06 1,149.95 50.00 1,418.20 1,896.92 4,358.31 61.37 124.03 7,858.83

2002

16.94 151.92 704.97 1,105.51 493.19 1,897.63 58.21 101.48 3,424.33

426.00 791.79 122.68 1,456.59 14,333.28 2,281.61 18,985.95 631.38 20043.33 500.00 214.68 239.58 200.00 1,154.26 21,197.59

660.00 401.66 65.95 963.24 9,798.57 1,475.50 12,704.90 425.28 13790.18 500.00 113.14 178.83 200.00 991.97 14,782.15

1,430.00 332.89 84.49 714.02 7,129.79 780.99 9,042.18 742.95 11215.13 500.00 67.88 102.80 200.00 870.69 12,085.82

2,340.00 205.59 19.00 417.40 3,254.94 586.33 4,483.26 581.27 7404.27 350.00 24.60 (70.30) 150.00 454.30 7,858.83

30.00 111.39 15.46 368.47 2,122.20 373.66 2,991.19 166.98 3188.17 350.00 (124.82) 50.53 236.16 3424.33

B. Income Statement ( Taka in Million) Particulars Interest Income Interest paid on Deposits Net Interest Income Income from Interest in Securities Commission, Exchange & Brokerage Other Operating Receipts Total Non-interest income Total Operating Income Salary, Allowances & PF Other Operating Expenses Total Operating Expenditure Profit Before Provisions Less: Specific provision Less: General Provision Other Provision Total Provision

Net Profit Before Taxes Less: provision for taxes Net Profit after Taxes

2006

1,771.36 1,371.36 400.00 170.82 247.92 33.17 451.91 851.91 138.24 166.78 305.13 546.89 5.70 32.86 0.65 39.20 507.69 245.00 262.69

2005

1,100.21 933.14 167.07 194.48 129.92 19.98 344.38 511.46 97.15 118.05 215.19 296.26 16.71 53.27 69.98 226.29 105.00 121.29

2004

749.03 618.93 130.09 177.75 100.15 19.43 297.33 427.43 87.82 75.34 163.16 264.27 8.52 39.37 47.89 216.38 216.38

2003

403.82 324.48 79.34 66.83 53.04 11.81 131.68 211.02 57.98 64.61 122.59 88.43 11.12 9.16 20.29 68.14 68.14

2002

291.30 185.44 105.86 25.34 13.09 17.38 55.80 161.66 48.35 235.25 283.60 (121.94) 15.71 2.52 18.23 (140.17) (140.17)

CREDIT RATING REPORT ON TRUST BANK LIMITED

LONG-TERM - BANKS AND FINANCIAL INSTITUTIONS

RATING AAA Triple A (Highest Safety) DEFINITION Financial Institutions rated in this category are adjudged to be of best quality, offer highest safety and have highest credit quality. Risk factors are negligible and risk free, nearest to risk free Government bonds and securities. Changing economic circumstances are unlikely to have any serious impact on this category of banks. Financial Institutions rated in this category are adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time because of economic conditions. Financial Institutions rated in this category are adjudged to offer adequate safety for timely repayment of financial obligations. This level of rating indicates a corporate entity with an adequate credit profile. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. Financial Institutions rated in this category are adjudged to offer moderate degree of safety for timely repayment of financial obligations. This level of rating indicates that a bank is under-performing in some areas. Risk factors are more variable in periods of economic stress than those rated in the higher categories. These entities are however considered to have the capability to overcome the above-mentioned limitations. Financial Institutions rated in this category are adjudged to lack key protection factors, which results in an inadequate safety. This level of rating indicates a bank as below investment grade but deemed likely to meet obligations when due. Overall quality may move up or down frequently within this category. Financial Institutions rated in this category are adjudged to be with high risk. Timely repayment of financial obligations is impaired by serious problems which the entity is faced with. Whilst an entity rated in this category might be currently meeting obligations in time, continuance of this would depend upon favorable economic conditions or on some degree of external support. Financial Institutions rated in this category are adjudged to be with very high risk of timely repayment of financial obligations. This level of rating indicates entities with very serious problems and unless external support is provided, they would be unable to meet obligations in a timely fashion. Financial Institutions rated in this category are adjudged to be either currently in default or expected to be in default. This level of rating indicates that the entities are unlikely to meet maturing financial obligations and calls for immediate external support of a high order.

CRISL RATING SCALES AND DEFINATIONS

AA+, AA, AA(Double A) (High Safety) A+, A, ASingle A (Adequate Safety)

BBB+, BBB, BBBTriple B (Moderate Safety)

BB+, BB, BBDouble B (Inadequate Safety) B+, B, BSingle B (High Risk) C (Very High Risk) D (Default)

SHORT-TERM - BANKS AND FINANCIAL INSTITUTIONS

Highest Grade Highest certainty of timely payment. Short-term liquidity including internal fund generation is very strong and access to alternative sources of funds is outstanding, Safety is almost like risk free Government short-term obligations. High Grade High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. Good Grade Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. Satisfactory Grade Satisfactory liquidity and other protection factors qualify issues as to invest grade. Risk factors are larger and subject to more variation. Non-Investment Grade Speculative investment characteristics. Liquidity is not sufficient to insure against disruption in debt service. Operating factors and market access may be subject to a high degree of variation. Default Issuer failed to meet scheduled principal and/or interest payments.

ST-1

ST-2

ST-3

ST-4

ST-5

ST-6

AUDITOR'S REPORT TO THE SHAREHOLDERS OF TRUST BANK LIMITED

We have audited the accompanying Balance Sheet of Trust Bank Limited as of 31 December 2006 and the related Profit & Loss Account, Cash Flow Statement, Statement of Changes in Equity, Statement of Liquidity and Notes to the financial statements for the year then ended. These financial statements are the responsibility of the management of the Bank. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted in Bangladesh. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statements presentation. We believe that our audit provides a basis for our opinion. In our opinion, the financial statements referred to above which have been prepared in accordance with International Accounting Standards as adopted in Bangladesh and in the format prescribed by Bangladesh Bank vide BRPD circular # 14 dated 25 June 2003 give a true and fair view of the state of the Bank's affairs as of 31 December 2006 and of the results of its operations and its cash flows for the year then ended and comply with the Bank Companies Act, 1991, the rules and regulations issued by Bangladesh Bank, the Companies Act, 1994, Securities and Exchange Rules 1987 and other applicable laws and regulations. We also report that: i. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; in our opinion, proper books of account as required by law have been kept by the Bank so far as it appeared from our examination of those books and proper returns adequate for the purpose of our audit have been received from branches not visited by us; the Bank's Balance Sheet and Profit & Loss Account dealt with by the report are in agreement with the books of account and returns; the expenditure incurred was for the purpose of the Bank's operations; the financial position of the Bank as on 31 December 2006 and the profit for the year then ended have been properly reflected in the financial statements, the financial statements have been prepared in accordance with the generally accepted accounting principles;

ii.

iii. iv. v.

vi.

the financial statements have been drawn up in conformity with the Bank Companies Act, 1991 and in accordance with the accounting rules and regulations issued by Bangladesh Bank; adequate provisions have been made for loans and advances which are, in our opinion, doubtful of recovery; the financial statements conform to the prescribed standards set in the accounting regulations issued by Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh; the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements; the information and explanations required by us have been received and found satisfactory; Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR) with Bangladesh Bank have been maintained as per rule; as far as it was revealed from our test checks, the existing rules and regulation for loan sanctioning and disbursements have been followed; we were not aware of any other matters, which are required to be brought to the notice of the shareholders; and 80% of the risk weighted assets of the Bank have been audited.

vii. viii.

ix. x. xi. xii. xiii. xiv.

Dhaka, 29 MAR 2007

Sd/ACNABIN Chartered Accountants

TRUST BANK LIMITED

As of 31 December 2006

PROPERTY AND ASSETS Cash Cash in hand (including foreign currencies) Balance with Bangladesh Bank and Sonali Bank as agent (including foreign currencies) 31.12.2006 Taka 139,754,152 1,121,385,791 1,261,139,943 5 2,636,123,081 186,464,490 2,822,587,571 67,500,000 2,543,038,200 717,334,399 3,260,372,599 8 12,323,004,330 865,088,555 13,188,092,885 146,054,811 451,844,391 21,197,592,200 9,383,459,513 354,863,836 9,738,323,349 110,616,082 254,356,223 14,782,151,192 1,192,989,446 72,372,030 1,265,361,476 190,000,000 2,330,619,600 117,334,178 2,447,953,778 31.12.2005 Taka 99,599,206 675,941,078 775,540,284

Balance Sheet

Notes 3 4

Balance with other banks and financial institutions In Bangladesh Outside Bangladesh Money at call and short notice Investments Government Others Loans and Advances Loans, Cash Credit, Overdrafts, etc. Bills purchased and discounted Fixed assets including premises, furniture and fixtures Other assets Non-banking assets Total Assets LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents Deposits and other accounts Current Deposits Bills Payable Savings Bank Deposits Fixed Deposits Other Deposits Other liabilities Total Liabilities Capital/Shareholders' Equity Paid up Capital Share Money Deposit Statutory Reserve Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity

6 7

9 10

11 12

426,000,000 791,794,948 122,678,874 1,456,592,033 14,333,275,178 2,281,610,061 18,985,951,094 631,379,123 20,043,330,217 500,000,000 200,000,000 214,677,986 239,583,997 1,154,261,983 21,197,592,200

660,000,000 401,655,110 65,946,548 963,235,817 9,798,565,489 1,475,499,119 12,704,902,083 425,276,800 13,790,178,883 500,000,000 200,000,000 113,138,916 178,833,393 991,972,309 14,782,151,192

13

14 15 16 17

31.12.2006 Taka OFF-BALANCE SHEET ITEMS Contingent Liabilities Acceptances and Endorsements Letter of Guarantees Irrevocable Letters of Credits Bills for collection Other Contingent Liabilities Value of Bangladesh Sanchaya Patra on hand Value of travelers' cheques on hand Total Other commitments Documentary Credit and short term trade-related transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving facilities Undrawn formal standby facilities, credit lines and other commitments Total Total Off-Balance Sheet items including contingent liabilities 7,885,364,349 1,216,427,993 944,363,894 4,394,291,940 1,211,554,702 7,766,638,529 114,930,000 3,795,820 118,725,820 7,885,364,349

31.12.2005 Taka

18

1,016,421,319 713,714,310 2,150,750,322 584,777,147 4,465,663,098 213,045,000 2,368,965 215,413,965 4,681,077,063

4,681,077,063

The annexed notes form an integral part of the Balance Sheet.

Sd/Chairman

Sd/Vice-Chairman

Sd/Director

Sd/Managing Director

This is the Balance Sheet referred to in our report of even date.

Dhaka, 29-Mar-07

Sd/ACNABIN Chartered Accountants

TRUST BANK LIMITED

For the year ended 31 December 2006

Notes PARTICULARS Interest Income Less: Interest Paid on Deposits and Borrowings Net Interest Income Income from Investments Commission, Exchange and Brokerage Other Operating Income Total Operating Income Salaries and Allowances Staff Gratuity Rent, Taxes, Insurance, Electricity, etc. Legal Expenses Postage, Stamps, Telecommunications, etc. Stationery, Printing, Advertisement etc. Managing Director's salary and benefits Directors' Fees Auditors' Fee Depreciation on Fixed Assets (Annexure -C) Repairs and maintenance Other Expenses Total Operating Expenses Profit before Provisions 546,899,496 29 19 20 21 22 23 2006 Taka 1,771,362,525 1,371,361,160 400,001,365 170,817,002 247,921,395 33,172,756 451,911,153 851,912,518 133,200,114 9,039,220 49,780,953 266,004 16,057,202 8,793,963 5,036,666 664,500 100,000 23,734,416 9,599,529 48,740,455 305,013,022 546,899,496 38,555,000 649,147 507,695,349 245,000,000 262,695,349 178,833,393 (60,000,000) (40,405,675) 78,427,718 341,123,067 101,539,070 239,583,997 341,123,067 30 52.54 2005 Taka 1,100,213,582 933,141,426 167,072,156 194,479,592 129,924,730 19,980,032 344,384,354 511,456,510 91,747,613 9,471,670 30,934,976 191,660 10,782,354 6,038,525 5,400,000 200,500 100,000 17,849,022 6,399,121 36,079,511 215,194,952 296,261,558 69,975,190 226,286,368 105,000,000 121,286,368 102,804,299 102,804,299 224,090,667 45,257,274 178,833,393 224,090,667 24.26

Profit & Loss Account

24 25 26 27

28

Provision for loans and advances Provision for Diminution in value of Investment (Annexure -B) Total Profit before Income Tax for the year Provision for Income Tax Net Profit after Tax for the year Profit/(Loss) brought forward from previous year Dividend for the year 2005 Income Tax Provision for the Income year 2004 Appropriations Statutory Reserve @ 20% on profit before tax Accumulated Retained Earnings transferred to Balance Sheet Earning Per Share (EPS) The annexed notes form an integral part of the Profit & Loss Account.

Sd/Chairman

Sd/Vice-Chairman

Sd/Director

Sd/Managing Director

This is the Profit & Loss Account referred to in our report of even date. Sd/ACNABIN Chartered Accountants

Dhaka, 29-Mar-07

TRUST BANK LIMITED

Cash Flow Statement

For the year ended 31 December 2006

Notes 2006 Taka 2005 Taka

A. Cash flow from operating activities Interest received in cash Interest paid by cash Fees and commission received in cash Cash paid to employees Cash paid to suppliers Income Taxes paid Income received from other operating activities Expenses paid for other operating activities Operating profit before changes in operating Assets and Liabilities Increase/(Decrease) in operating assets & liabilities Net Investment in trading securities Changes in loan & advance to customers (Other than Banks) Changes in other operating assets Changes in deposits received from other Banks Changes in deposits received from customers Changes in other liabilities Net cash from operating activities (A) B. Cash flow from investing activities Purchase of fixed assets Purchase of intangible assets Sale of fixed assets Decrease/(increase) in investments on government securities Net cash from investing activities (B) C. Cash flow from financing activities Increase/(Decrease) in Borrowing: Call loan Re-purchase Offer (REPO) Other borrowings Net cash from financing activities (C ) D. Net increase in Cash and Cash Equivalent (A+B+C) E. Cash and Cash Equivalent at beginning of the year F. Effects of exchange rate changes on cash and cash equivalents G. Cash and Cash Equivalent at end of the year (D+E+F) 35 370,000,000 (600,000,000) (4,000,000) (234,000,000) 1,906,639,462 2,231,521,360 14,104,892 4,152,265,714 (280,000,000) (500,000,000) 10,000,000 (770,000,000) 436,215,263 1,790,589,320 4,716,777 2,231,521,360 (59,173,146) (812,241) 576,700 (212,000,000) (271,408,687) (42,412,137) 18,000 860,000,000 817,605,863 1,727,297,105 (1,272,046,558) 229,151,753 (133,587,267) (9,255,787) (135,751,593) 172,951,121 (146,228,394) 432,530,380 (600,000,221) (3,438,534,462) (133,813,102) (400,157,771) 6,576,507,199 (24,483,874) 2,412,048,149 1,101,419,153 (929,332,423) 122,787,328 (97,372,883) (5,259,459) (60,739,639) 65,155,791 (84,557,267) 112,100,601 (87,157,008) (2,929,755,702) (122,302,959) (749,994,856) 4,139,944,759 25,774,565 388,609,400

31 32

33

34

TRUST BANK LIMITED

Statement of Changes in Equity

As of 31 December 2006

Figures in Taka Particulars Balance as on 01 January 2006 Changes in accounting policy Restated Balance Surplus/Deficit on revaluation of properties Surplus/Deficit on revaluation of investment Currency transaction difference Net gain and losses not recognized in the income statement Net profit/(loss) for the year after tax Statutory reserve Dividend (cash) Issue of share capital Income Tax Provision for the Income Year 2004 Balance as on 31 December 2006 Paid up Capital 500,000,000 500,000,000 Statutory Reserve 113,138,916 101,539,070 214,677,986 Share Money Deposit 200,000,000 200,000,000 Retained Earnings 178,833,393 262,695,349 (101,539,070) (60,000,000) (40,405,675) 239,583,997 Total 991,972,309 262,695,349 (60,000,000) (40,405,675) 1,154,261,983

TRUST BANK LIMITED

Liquidity Statement

(Asset and Liability Maturity Analysis) As of 31 December 2006

Figures in Taka Particulars Assets: Cash in Hand Balance with Bangladesh Bank and Sonali Bank Balance with other banks and financial institutions Money at call and short notice Investments Loans and Advances Fixed Assets including premises, furniture and fixtures Other assets Non-banking assets Total Assets Liabilities: Borrowing from Bangladesh Bank, other banks, financial institutions Deposits and other accounts Provision and other liabilities Total Liabilities Net Liquidity Gap 420,000,000 5,432,178,046 86,702,249 5,938,880,295 199,808,166 2,000,000 2,614,529,383 136,440,699 2,752,970,082 1,263,778,567 2,000,000 4,098,793,961 115,659,123 4,216,453,084 1,082,569,013 2,000,000 6,804,552,119 291,704,712 7,098,256,831 (1,432,110,128) 35,897,585 872,340 36,769,925 40,216,365 426,000,000 18,985,951,094 631,379,123 20,043,330,217 1,154,261,983 139,754,152 1,121,385,791 882,137,571 67,500,000 718,372,599 2,906,106,739 2,119,845 301,311,764 6,138,688,461 970,450,000 700,000,000 2,298,801,587 4,239,691 43,257,371 4,016,748,649 970,000,000 4,220,799,698 19,078,608 89,143,791 5,299,022,097 1,842,000,000 3,714,506,129 91,509,109 18,131,465 5,666,146,703 47,878,732 29,107,558 76,986,290 139,754,152 1,121,385,791 2,822,587,571 67,500,000 3,260,372,599 13,188,092,885 146,054,811 451,844,391 21,197,592,200 Up to 01 Month 01-03 Months 03-12 Months 01-05 Years More than 05 Years Total

TRUST BANK LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006

1 STATUS OF THE BANK Trust Bank Limited is a scheduled commercial bank established under the Bank Companies Act, 1991 and incorporated as a Public Limited Company under the Companies Act, 1994 in Bangladesh on 17 June 1999 with the primary objective to carry on all kinds of banking businesses in and outside Bangladesh. The Bank had twenty six (26) branches operating in Bangladesh as of 31 December 2006. Initially bank has started its operation in the name of The Trust Bank Limited but on 12 November 2006 it was renamed as "Trust Bank Limited" by the Registrar of Joint Stock Companies. The new name of the bank was approved by Bangladesh Bank on 03 December 2006. 1.1 NATURE OF BUSINESS Trust Bank Limited offers full range of banking services that include deposit banking, loans & advances, export, import and financing national and international remittance facilities etc. 2 2.1 SIGNIFICANT ACCOUNTING POLICIES Basis of preparation of the financial statements These financial statements have been prepared under the historical cost convention on a going concern basis in accordance with International Accounting Standards as adopted in Bangladesh and in the format prescribed by Bangladesh Bank vide BRPD circular # 14 dated 25 June 2003. 2.2 Revenue recognition i) Interest is calculated on daily product basis on all types of loans and advances where applicable but charged and accounted for as follows: Types of Loans Repair & Reconstruction of Dwelling House (RRDH) Marriage Loan and Consumer Durable Scheme Others ii) iii) Basis of charging interest Yearly Half yearly Quarterly

Commission and discounts on bills purchased and discounted are recognized at the time of realization. Other revenues are recognized based on the relevant statutes and commercial banking practice in Bangladesh.

2.3

Consolidation A separate set of records for consolidating the statements of affairs and income & expenditure statements of the branches are maintained at Head Office of the Bank in Dhaka based on which these financial statements have been prepared.

2.4

Basic earning per share Earning per share (EPS) has been computed by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year as per International Accounting Standards ­ 33: `Earning Per Share".

2.5

Cash flow statement Cash Flow Statement is prepared in accordance with International Accounting Standards ­ 7: `Cash Flow Statements' and Bangladesh Bank BRPD Circular No. 14 dated 25 June 2003.

2.6

Foreign currencies i) Transactions in foreign currencies are translated into taka currency at the rates of exchange prevailing on the date of such transactions and resulting gains or losses are credited or charged to profit & loss account. Assets and liabilities as on 31 December 2006 in foreign currencies under regular accounts are converted into equivalent taka currency at the average rates prevailing at the Balance Sheet date.

ii)

2.7

Employees' benefits Provident fund benefits are given to the eligible staff of the Bank in accordance with the rules of Provident Fund constituted under an irrevocable trust. The Bank has started making provision for liabilities of its employees' gratuity as per gratuity scheme of the Bank from the year 2004. The Bank has also introduced "Superannuation Fund" instead of group life insurance policy for the employees. Those employees, who will be able to fulfill the specific criteria mentioned in the policy of the fund, will be entitled to get the benefit of "Superannuation Fund".

2.8

Investments Value of Investment has been shown as under: Government Treasury Bills Prize Bond & Other Bonds Shares At Face Value At Cost Price At Cost

2.9

Loans and advances Loans and Advances are stated at gross value. Provision for loans and advances is made on the basis of year-end review by the management and of instructions contained in Bangladesh Bank BCD Circular No. 34 of 1989, BCD Circular No.20 of 1994, BCD Circular No. 12 of 1995, BRPD Circular No. 16 of 1998 and BRPD Circular No. 9 of 2001 and BRPD Circular No. 5 of 2006.

2.10

Fixed assets and depreciation i) ii) Fixed assets are stated at cost less accumulated depreciation. Depreciation is charged at the following rates per annum using reducing balance method on all fixed assets other than motor vehicles and office equipment, which are depreciated on straight-line basis. Furniture & Fixtures Office Equipment Motor Vehicles Office Decoration iii) iv) 10% 20% 20% 12% p.a. p.a. p.a. p.a.

Depreciation at the applicable rates is charged proportionately on additions made during the year from the date of their acquisition. Repairs and maintenance costs of fixed assets are charged to profit & loss account, when incurred.

2.11

Taxation As per Income Tax Ordinance 1984, necessary provision for income tax has been made in these financial statements.

2.12

Reconciliation of Inter bank & Inter branch accounts Books of account in regard to inter bank (in Bangladesh and outside Bangladesh) and inter branch transactions are reconciled and no material difference was found which may affect the financial statements significantly. There exist no unreconciled revenue items in Nostro accounts as at 31 December 2006.

2.13

Risk Management The Risk Management of the Bank covers five Core Risk Areas of banking. The main objectives of the risk management is that he Bank takes well calculative risks while safeguarding the Bank's capital, its financial resources and profitability from various risks. In this context, the Bank implements the guidelines of Bangladesh Bank as followings: · Credit Risk Management This is one of the major risks that can be described as potential loss arising from the failure of a counter party to perform as per contractual agreement with the Bank. A separate corporate division has been formed at Head Office which is entrusted with the duties of maintaining effective relationship with the customer, marketing of credit products, exploring new business opportunities etc. The Bank has segregated the functions of credit approval, administration, monitoring and recovery by forming three separate units within Credit Division. In determining the credit limit, the instructions of Bangladesh bank are strictly followed. Internal audit conducted on periodic interval to ensure compliance of Bank's and Regulatory policies. Classifications of Loans are made as per Bangladesh Bank's guidelines. Foreign Exchange Risk Management Foreign exchange risk is defined as the potential change in earnings arising to change in market prices. The foreign exchange risk of the Bank is minimal as all the transactions are

·

carried out on behalf of the customers against underlying L/C Commitments and other remittance requirements. No dealing on Banks account was conducted during the year. Treasury department independently conducts and transactions and the Back Office of Treasury is responsible for verification of the deals and passing of their entries in books of accounts. All foreign exchange transactions are revalued at Mark-to-Market Rate as determined by Bangladesh Bank at the month-end. All NOSTRO Accounts are reconciled on monthly basis and outstanding entry beyond 30 days is reviewed by the Management for its settlement. · Asset Liability Risk Management The primary objective of the Asset Liability Committee (ALCO) is to monitor and avert significant volatility in Net Interest Income, investment value and exchange earnings. They also monitor Balance Sheet risk and Liquidity risks of the Bank. Prevention of Money Laundering Money Laundering Risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of money laundering. The Bank has already established a manual in this regard and has introduced transaction profile. Training has been continuously given to all the category of officers and executives for developing knowledge and skill for identifying suspicious activities. Internal Control & Compliance Operational loss may arise from error and fraud due to lack of internal control and compliance. To control operational procedure of the Bank, internal Control and Compliance Division undertakes periodical and special audit of the branches and departments at Head Office. The Audit Committee of the Board subsequently reviews the reports of the Internal Control and Compliance Division.

·

·

2.14

General i) ii) Figures have been rounded off to the nearest taka; Prior year's figures shown for comparison purpose, have been rearranged, whenever necessary, to confirm to current year's presentation.

31.12.2006 Taka 3 CASH IN HAND (including foreign currencies) In local currency In foreign currencies 107,911,044 31,843,108 139,754,152

31.12.2005 Taka 59,290,057 40,309,149 99,599,206

4

BALANCE WITH BANGLADESH BANK AND SONALI BANK (including foreign currencies) Balance with Bangladesh Bank In local currency In foreign currencies Balance with Sonali Bank in local currency (as agent of Bangladesh Bank) 861,516,798 247,902,760 1,109,419,558 11,966,233 1,121,385,791 509,608,691 147,444,857 657,053,548 18,887,530 675,941,078

4.1

Cash Reserve Ratio (CRR) and Statutory Liquidity Requirement (SLR) Cash Reserve Ratio (CRR) and Statutory Liquidity Requirement (SLR) have been calculated and maintained in accordance with the Section 33 of the Bank Companies Act 1991 and subsequent BCD Circular No. 13 dated 24 May 1992; BRPD Circular No. 12 dated 20 September 1999, BRPD Circular No. 03 dated 17 February 2003, BRPD Circular No. 22 dated 6 November 2003, BRPD Circular No. 12 dated 25 August 2005.

4.1.1

Cash Reserve Ratio (CRR) : 5% of Average Demand and Time Liabilities Average Demand and Time Liabilities 17,801,100,000 890,055,000 892,109,258 2,054,258 712,044,000 861,516,798 149,472,798 11,418,906,000 570,945,300 589,361,032 18,415,732 456,756,240 509,608,691 52,852,451

4.1.1.1 Average Required Reserve 5% of Average Demand and Time Liabilities Average Reserve held with Bangladesh Bank Surplus 4.1.1.2 Minimum Required Reserve 4% of Average Demand and Time Liabilities Actual Reserve held with Bangladesh Bank as on year end Surplus 4.1.2 Statutory Liquidity Requirement (SLR) : 18% of Average Demand and Time Liabilities Required Reserve Actual Reserve held as on year end Surplus 5 BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS In Bangladesh Current Deposits Sonali Bank Rupali Bank Limited The City Bank Limited Short Term Deposits Sonali Bank Rupali Bank Limited Janata Bank Citibank, NA Arab Bangladesh Bank Limited Prime Bank Limited Jamuna Bank Limited Fixed Deposits ONE Bank Limited National Credit and Commerce Bank Limited Arab Bangladesh Bank Limited Commercial Bank of Ceylon Dhaka Bank Limited Eastern Bank Limited First Security Bank Limited Bangladesh Industrial Finance Company Limited Bay Leasing & Investment Limited Fareast Finance and Investment Company Limited International Leasing and Financial Services Limited IPDC of Bangladesh Limited Islamic Finance & Investment Limited MIDAS Financing Limited Phoenix Leasing Company Limited Prime Finance and Investment Limited Union Capital Limited Balance carried forward

3,204,198,000 3,576,275,383 372,077,383

2,055,403,080 2,786,415,027 731,011,947

6,024,911 30,683 5,000 6,060,594 14,638,456 6,554,183 102,263 456,139,303 9,585,827 2,482,539 109,916 489,612,487 600,000,000 70,450,000 200,000,000 100,000,000 50,000,000 100,000,000 50,000,000 20,000,000 250,000,000 200,000,000 50,000,000 100,000,000 100,000,000 200,000,000 50,000,000 2,140,450,000 2,636,123,081

7,364,519 7,364,519 14,477,356 8,921,556 2,134,314 154,066,345 106,025,356 285,624,927 200,000,000 100,000,000 50,000,000 50,000,000 200,000,000 50,000,000 50,000,000 200,000,000 900,000,000 1,192,989,446

31.12.2006 Taka Balance brought forward Outside Bangladesh (Nostro Accounts) Current Account Citibank N.A., USA HSBC, USA Union De Banques, HKG Mashreq Bank psc, USA Citibank N.A., UK Standard Chartered Bank, UK HSBC, PLC Citibank N.A., UK Standard Chartered Bank, UK HSBC, PLC Standard Chartered Bank, Japan AB Bank, Mumbai, India HSBC, Mumbai, India Citibank N.A., Mumbai, India ICICI Bank Ltd. HSBC, Pakistan Habib Bank, Zurich Name of the foreign currency USD USD USD USD GBP GBP GBP Euro Euro Euro Yen ACU ACU ACU ACU ACU CHF 58,801,936 41,371,374 2,480,651 10,280,318 52,294,850 1,313,750 7,192,793 2,187,575 2,018,826 733,499 341,516 413,536 552,830 502,129 3,017,628 3,649 2,957,630 186,464,490 2,822,587,571 2,636,123,081

31.12.2005 Taka 1,192,989,446

14,844,772 10,730,132 5,158,948 317,634 2,313,240 1,405,212 13,923,829 1,070,746 515,962 14,111,589 1,229,602 1,240,230 4,851,628 658,506 72,372,030 1,265,361,476

For details please refer to Annexure - A 5.1 Remaining maturity grouping of balance with other banks and financial institutions On demand Upto 1 month Over 1 month but not more than 3 months Over 3 months but not more than 1 Year Over 1 Year but not more than 5 Years Over 5 Years 192,525,084 689,612,487 970,450,000 970,000,000 2,822,587,571 79,736,549 285,624,927 350,000,000 350,000,000 200,000,000 1,265,361,476

6

MONEY AT CALL AND SHORT NOTICE Deposit Money Bank Non bank depository corp.-private Phoenix Leasing Co. Ltd. National Housing Finance Investment Limited International Leasing & Investment Ltd. Union Capital Ltd. Fareast Finance & Investment Ltd. Other fin. Intermediaries-private IPDC of Bangladesh Limited 20,000,000 10,000,000 37,500,000 67,500,000 67,500,000 50,000,000 30,000,000 10,000,000 90,000,000 100,000,000 190,000,000

7

INVESTMENTS Government Securities Treasury Bills-at face value Three years T & T Treasury Bond - interest @ 7.00% Five years Government Treasury Bond - interest @ 7.50% Prize Bond Other-Investment in shares refer to Annexure - B

Notes- 7.1

1,742,000,000 100,000,000 700,000,000 1,038,200 2,543,038,200 717,334,399 3,260,372,599

1,530,000,000 100,000,000 700,000,000 619,600 2,330,619,600 117,334,178 2,447,953,778

7.1

Treasury Bills-at face value 91 days Treasury Bills 364 days Treasury Bills 728 days Treasury Bills 1820 days Treasury Bills

Notes- 7.1.1 550,000,000 62,000,000 300,000,000 830,000,000 1,742,000,000 700,000,000 830,000,000 1,530,000,000

7.1.1

Treasury bills and Government Treasury Bond include unearned interest thereon and corresponding credit is shown in other liabilities.

7.2

Remaining maturity grouping of Investments On demand Upto 1 month Over 1 month but not more than 3 months Over 3 months but not more than 1 Year Over 1 Year but not more than 5 Years Over 5 Years

31.12.2006 Taka 718,372,599 700,000,000 1,842,000,000 3,260,372,599

31.12.2005 Taka 117,953,778 700,000,000 1,630,000,000 2,447,953,778

8

LOANS AND ADVANCES Loans Repair & Recon. of Dwelling House (RRDH) Consumer Durable Scheme Loans (CDS) Marriage Loans (ML) Car Loans (CL) House Building Loans (HBL) Term Loans Other Loans Staff Loans Loans against Trust Receipts (LTR) Payment Against Documents (PAD) Cash Credit Cash Credit Cash Collateral Overdraft Overdrafts SOD Total Loans, Cash Credits and Overdrafts Bills Purchased and Discounted

231,479,689 32,072,590 67,212,516 30,181,849 677,554,651 3,455,665,526 1,003,790,370 96,701,751 3,177,579,488 384,910,469 9,157,148,899 190,556,400 188,084,871 378,641,271 151,769,708 2,635,444,452 2,787,214,160 12,323,004,330 865,088,555 13,188,092,885

222,076,114 25,868,706 74,034,648 28,277,050 397,726,271 1,744,037,159 681,422,532 46,158,884 1,823,806,937 114,475,493 5,157,883,794 257,057,205 220,662,946 477,720,151 736,522,444 3,011,333,124 3,747,855,568 9,383,459,513 354,863,836 9,738,323,349

Notes- 8.6

8.1

Residual maturity grouping of Loans and Advances including Bills Purchased and Discounted Repayable on demand Upto 1 month Over 1 month but not more than 3 months Over 3 months but not more than 1 Year Over 1 Year but not more than 5 Years Over 5 Years 1,830,366,020 1,075,740,719 2,298,801,587 4,220,799,698 3,714,506,129 47,878,732 13,188,092,885 580,654,819 422,148,762 1,380,857,657 4,909,800,740 1,969,143,887 475,717,484 9,738,323,349

8.2 8.2.1

Loans and Advances on the basis of significant concentration Advances to Directors and Others Advance to Directors and their allied concerns Advances to CEO and Senior Executives Advances to Customers (Group wise) Industrial Advances ( Project finance) Other Staff Loan Other Customers 4,305,733 10,088,674 2,457,800,000 1,685,600,000 86,613,077 8,943,685,401 13,188,092,885 10,974,435 2,631,149 3,046,026,591 824,837,503 43,527,735 5,810,325,936 9,738,323,349

8.2.2

Loans and Advances allowed to each customer exceeding 15% of Bank's total capital: * Total Loans and Advances No. of Customers Classified amount thereon Measures taken for recovery of classified loans: *The amount represents the sum of total loan allowed to each customer exceeding 15% of total Capital as on sanction date. 6,659,424,000 56 N/A 3,335,900,000 34 N/A

31.12.2006 Taka 8.2.3 Industry-wise concentration of Loans and Advances Agro-sector Automobiles Cement & Building Materials Chemical & Pharmaceuticals Edible Oil Energy & Power Fisheries Steel & Engineering Textiles & Garments Others 150,713,295 20,547,087 68,979,576 441,200,000 367,200,000 138,407,266 18,200,000 1,475,281,707 2,124,210,969 8,383,352,985 13,188,092,885

31.12.2005 Taka

72,694,102 7,263,351 113,766,813 110,032,895 257,588,716 122,289,000 33,368,223 475,990,279 864,942,538 7,680,387,432 9,738,323,349

8.2.4

Geographical location-wise concentration of Loans and Advances Inside Bangladesh Dhaka Division Chittagong Division Khulna Division Sylhet Division Barisal Division Rajshahi Division Outside Bangladesh 8,258,327,844 4,702,398,623 57,099,119 72,648,445 97,618,854 13,188,092,885 13,188,092,885 6,968,801,570 2,568,749,236 51,475,561 28,549,935 120,747,047 9,738,323,349 9,738,323,349

8.2.5

Nature wise Loans and Advances Continuous Demand Loan Term Loans up to 5 Years Term Loans above 5 Years 7,248,921,014 1,302,082,891 3,386,614,860 1,250,474,120 13,188,092,885 6,589,089,296 465,268,303 1,913,735,248 770,230,502 9,738,323,349

8.3

Loans and Advances including Bills Purchased and Discounted Inside Bangladesh Loans Cash Credit Overdraft Bills purchased and discounted Outside Bangladesh 9,157,148,899 378,641,271 2,787,214,160 865,088,555 13,188,092,885 13,188,092,885 5,157,883,794 477,720,151 3,747,855,568 354,863,836 9,738,323,349 9,738,323,349

Notes- 8.6

8.4

Classification of Loans and Advances including Bills Purchased and Discounted Unclassified Loans and Advances (including staff loan) Special Mention Account Classified Loans and Advances Sub-Standard Loans and Advances Doubtful Loans and Advances Bad /Loss Loans and Advances 12,821,160,260 192,563,188 89,179,752 3,419,280 81,770,405 174,369,437 13,188,092,885 9,579,675,246 29,681,019 48,848,032 5,009,003 75,110,049 128,967,084 9,738,323,349

8.5

Particulars of Loans and Advances (I) Debts considered good in respect of which the bank is fully secured. (ii) Debts considered good for which the bank holds no other security than the debtor's personal security. (iii) Debts considered good and secured by personal undertaking of one or more parties in addition to the personal guarantee of the debtors. (iv) Debts considered doubtful or bad not provided for (v) Debts due by directors or officers of the bank or any of them either severally or jointly with any other person. (vi) Debts due by companies or firms in which the directors of the bank are interested as directors, partners or managing agents or, in the case of private companies as members. (vii) Maximum total amount of advances including temporary advances made at any time during the year to directors or managers or officers of the banking company or any of them either severally or jointly with any other persons. 12,827,146,241 97,394,365 263,552,279 101,007,484 9,378,377,827 112,000,702 247,944,820 57,133,319 -

101,007,484

57,133,319

31.12.2006 Taka ((viii) Maximum total amount of advances including temporary advances granted during the year to the companies or firms in which the directors of the banking company are interested as directors, partners or managing agents or in the case of private company (ix) Due from Banking Companies. (x) Amount of classified loan on which no interest has been charged: a) Increase/(Decrease) in provision Amount of loan written off Amount realized against loan previously written off b) Provision kept against loans classified as bad debts c) Interest credited to interest Suspense Account (xi) Cumulative amount of written off loans Opening Balance Amount written of during the year

31.12.2005 Taka

5,703,000 52,558,000 23,656,219

16,706,745 47,296,000 12,394,145

Notes-13.3

27,000 27,000 -

-

The amount of written off loans for which law suit has been filed 8.6 Bills purchased and discounted Payable in Bangladesh Payable out side Bangladesh

779,200,390 85,888,165 865,088,555

324,837,675 30,026,161 354,863,836

8.7

Remaining maturity grouping of bills purchased and discounted Payable with in one month Over one month but less than three months Over three months but less than 01 year More than 01 year 396,135,882 367,231,363 101,721,310 865,088,555 84,042,465 87,879,437 182,941,934 354,863,836

9

FIXED ASSETS INCLUDING PREMISES, FURNITURE AND FIXTURES Cost Furniture and fixtures Office equipment Motor vehicles Office renovation Leasehold Land Less: Accumulated depreciation For details please refer to Annexure - C. 58,208,776 67,211,175 11,831,764 86,860,712 160,469 224,272,896 78,218,085 146,054,811 45,103,074 46,419,726 7,957,154 66,969,327 160,469 166,609,750 55,993,668 110,616,082

10

OTHER ASSETS Stationery and Stamps Advance office rent Pre-opening Expenses Prepaid Expenses Interest accrued on investments and deposits Commission Receivable on SP & WEDB Security Deposits Encashment of Sanchaya patra awaiting reimbursement-Principal Encashment of Sanchaya patra awaiting reimbursement-Interest Encashment of WEDB awaiting reimbursement-Principal Encashment of WEDB awaiting reimbursement-Interest US$ Investment Bond - Principal US$ Investment Bond - Interest Inter Branch Adjusting Account Clearing Adjustment Advance against Capital Expenditure Intangible Assets Others 8,911,187 28,157,244 1,217,319 1,786,981 79,347,391 7,617,720 2,309,717 128,125,686 35,721,849 7,513,000 5,547,185 70,450 198,493 100,644,771 60,053 29,529,263 518,885 14,567,197 451,844,391 7,019,911 14,322,053 2,935,411 1,369,345 35,281,971 2,952,970 273,377 99,154,023 63,875,423 2,475,000 916,000 (15,938,463) 37,075,977 2,643,225 254,356,223

Notes- 10.1

The entire amount of Inter Branch Adjusting Account has been reconciled subsequently and there are no outstanding entries in this head. As per provision of BRPD Circular No. 14 dated 25 June 2001 issued by Bangladesh Bank, there was no classified other assets as on the reporting date, hence no provision was required.

31.12.2006 Taka 10.1 Interest accrued on investments and deposits Interest Interest Interest Interest Interest Interest 11 accrued accrued accrued accrued accrued accrued on on on on on on Fixed Deposits Short Term Deposits Treasury Bill Money at Call T&T Treasury Bond Government Treasury Bond 72,974,931 603,229 2,019,231 3,750,000 79,347,391

31.12.2005 Taka 25,070,139 2,989,708 588,194 2,018,546 4,615,384 35,281,971

BORROWINGS FROM OTHER BANKS, FINANCIAL INSTITUTIONS AND AGENTS In Bangladesh REPO- Treasury bills Southeast Bank Limited Commercial Bank of Ceylon Dutch-Bangla Bank Limited BRAC Bank Limited Call loans The Premier Bank Limited NCC Bank Limited BASIC Bank Limited Bank Alfalah Limited Mercantile Bank Limited Other Borrowings Bangladesh Bank: Re-finance Outside Bangladesh

50,000,000 70,000,000 150,000,000 50,000,000 100,000,000 420,000,000 6,000,000 426,000,000 426,000,000

200,000,000 200,000,000 100,000,000 100,000,000 600,000,000 50,000,000 50,000,000 10,000,000 660,000,000 660,000,000

11.1

Security wise grouping Secured Borrowings - Secured against Treasury bills Unsecured Borrowings 426,000,000 426,000,000 600,000,000 60,000,000 660,000,000

11.2

Repayment nature wise Repayment on Demand Others 420,000,000 6,000,000 426,000,000 50,000,000 610,000,000 660,000,000

11.3

Remaining maturity grouping of Borrowings from other banks, financial institutions and agents Payable On demand Upto 1 month Over 1 month but within 3 months Over 3 months but within 1 Year Over 1 Year but within 5 Years Over 5 Years 420,000,000 2,000,000 2,000,000 2,000,000 426,000,000 50,000,000 500,000,000 104,000,000 6,000,000 660,000,000

12

DEPOSITS AND OTHER ACCOUNTS Current Deposits Bills Payable Savings Bank Deposits Fixed Deposits Other Deposits Notes- 12.2 Notes- 12.3 Notes- 12.4 791,794,948 122,678,874 1,456,592,033 14,333,275,178 2,281,610,061 18,985,951,094 401,655,110 65,946,548 963,235,817 9,798,565,489 1,475,499,119 12,704,902,083

12.1

Remaining maturity grouping of Deposits and other accounts Inside Bangladesh Payable On demand Upto 1 month Over 1 month but within 3 months Over 3 months but within 1 Year Over 1 Year but within 5 Years Over 5 Years Outside Bangladesh Bank Deposit Other Deposits 1,784,706,046 3,647,472,000 2,614,529,383 4,098,793,961 6,804,552,119 35,897,585 18,985,951,094 18,985,951,094 1,784,706,046 3,647,472,000 2,614,529,383 4,098,793,961 6,804,552,119 35,897,585 18,985,951,094 18,985,951,094 876,381,276 3,584,483,674 1,601,125,744 4,170,611,429 2,429,696,398 42,603,562 12,704,902,083 12,704,902,083

31.12.2006 Taka 12.2 Bills Payable Demand Draft payable Pay Order payable 13,114,977 109,563,897 122,678,874 Bank Deposit Other Deposits 2,882,970,072 2,072,924,013 753,694,063 6,809,723,400 140,382,301 1,632,572,355 36,705,075 4,303,899 14,333,275,178 2,882,970,072 2,072,924,013 753,694,063 6,809,723,400 140,382,301 1,632,572,355 36,705,075 4,303,899 14,333,275,178

31.12.2005 Taka

5,261,606 60,684,942 65,946,548

12.3

Fixed Deposits One Month Three months Six months One year Two years Three years Five years More than five years

1,834,899,344 1,223,405,353 725,367,862 3,631,047,956 339,836,373 1,996,727,083 32,623,006 14,658,512 9,798,565,489

12.4

Other Deposits Trust Target Scheme Trust Double Deposit Scheme Trust Smart Savers Scheme Trust Double Benefit Scheme Trust Money Making Scheme Trust Education Scheme Special Notice Time Deposit Foreign Currency Deposits Interest Payable on Deposits Sundry Deposits 31,075,359 3,031,902 52,609,317 34,206,886 109,395 107,642 744,542,446 508,902,089 469,960,861 437,064,164 2,281,610,061 25,401,321 10,206,000 450,579,802 373,227,423 365,261,278 250,823,295 1,475,499,119

13

OTHER LIABILITIES Provision for Loans and Advances Provision for Gratuity Provision for Investment Unearned Interest on Investments Interest Suspense Account Exchange Equalization Fund Interest Payable on Borrowings Provision for Income Tax Less Advance Income Tax Dividend Payable Accrued Expenses Audit Fees Payable Lease Obligation for Motor Vehicles Sundry Creditors Others Notes- 13.1 216,628,000 649,147 143,060,342 23,656,219 2,996,337 292,917 139,838,506 60,000,000 19,989,204 100,000 24,168,451 631,379,123 178,100,000 19,547,870 173,522,280 12,394,145 2,996,337 5,677,898 (9,815,576) 13,549,391 200,000 1,397,473 27,703,242 3,740 425,276,800

NotesNotesNotesNotes-

13.2 13.3 13.4 13.5

13.1

Provision for Loans and Advances Specific Provision - against Classified Loans & Advances General Provision - against Unclassified Loans & Advances General Provision - against Special Mention Account Notes- 13.1.1 Notes- 13.1.2 Notes- 13.1.3 63,676,000 143,708,000 9,244,000 216,628,000 58,000,000 117,600,000 2,500,000 178,100,000

13.1.1 Specific Provision - against Classified Loans & Advances Provision held on 1 January Fully provided debts written off Recoveries from previously written off debts Provisions made during the year Net Charge to the Profit Loss Account Provision held at 31 December 13.1.2 General Provision - against Unclassified Loans & Advances Provision held on 1 January Provision made during the year Provision held at 31 December 117,600,000 26,108,000 143,708,000 66,831,555 50,768,445 117,600,000 58,000,000 (27,000) 5,703,000 5,676,000 63,676,000 41,293,255 16,706,745 16,706,745 58,000,000

31.12.2006 Taka 13.1.3 General Provision - against Special Mention Account Provision held on 1 January Provision made during the year Provision held at 31 December 13.1.4 Required Provision against Loans and Advances Particulars Unclassified a. Consumer Financing (House Financing) b. Consumer Financing (Loans to Professional) c. Consumer Financing ( Other than a & b) d. Small Enterprise Financing e. All other Credit Special Mention Accounts Classified Substandard Doubtful Bad/Loss Total 13.2 Unearned Interest on Investments Unearned Interest on Treasury Bills Unearned Interest on Treasury Bonds 137,558,441 5,501,901 143,060,342 Base for provision 734,910,000 4,822,000 205,960,000 81,565,000 11,698,549,000 12,725,806,000 184,885,000 47,617,000 3,189,000 52,558,000 103,364,000 13,014,055,000 Rate 2,500,000 6,744,000 9,244,000

31.12.2005 Taka

2,500,000 2,500,000

2% 2% 5% 2% 1% 5% 20% 50% 100%

14,698,000 96,000 10,298,000 1,631,000 116,985,000 143,708,000 9,244,000 9,523,000 1,595,000 52,558,000 63,676,000 216,628,000

117,482,000 117,482,000 1,401,000 7,426,000 2,179,000 47,296,000 56,901,000 175,784,000

166,131,203 7,391,077 173,522,280

13.3

Interest Suspense Account Balance on 1 January Amount transferred during the year Amount recovered during the year Amount written off / waived during the year Closing Balance 12,394,145 30,582,379 (19,273,458) (46,847) 23,656,219 8,275,051 19,705,792 (15,586,698) 12,394,145

13.4

Exchange Equalization Fund Balance on 1 January Add: Net exchange gains on open exchange position arising on refixation of value of Taka currency in relation to foreign currencies during the year Closing Balance 2,996,337 2,996,337 2,996,337 2,996,337

13.5

Provision for Income Tax Less Advance Income Tax Provision for Income Tax Balance on 1 January Provision made during the year Settlement for previous years Less: Advance Income Tax Balance on 1 January Paid during the year Settlement for previous years Net Closing Balance 133,543,441 285,405,675 (173,949,116) 245,000,000 143,359,017 135,751,593 (173,949,116) 105,161,494 139,838,506 28,543,441 105,000,000 133,543,441 82,619,378 60,739,639 143,359,017 (9,815,576)

Income Tax assessment for the Income Year 1999 to 2005 (Assessment Year 2000-2001 to 2006-2007) have been completed. Advance Income Tax for the said years have been adjusted with the Income Tax Provision for the actual Income Tax Liability. 14 14.1 CAPITAL Authorized Capital 20,000,000 Ordinary shares of Tk. 100 each Issued, Subscribed and Paid Up Capital 5,000,000 Ordinary shares of Tk. 100 each 2,000,000,000 2,000,000,000

14.2

500,000,000

500,000,000

31.12.2006 Taka 14.3 Particulars of the Sponsor Shareholders are as follows: Name of the Sponsor Shareholders: 1. Army Welfare Trust 2. Lt Gen Moeen U Ahmed, psc 3. Maj Gen Md Matiur Rahman ndu, psc 4. Brig Gen Md Zillur Rahman, MCPS, MSC 5. Brig Gen S M Mahbubul Karim 6. Brig Gen Md Rafiqul Islam, ndc, psc 7. Brig Gen Md Shawkat Hossain, psc 8. Brig Gen Muhammad Anisur Rahman, ndc, psc 9. Brig Gen Mohd Mahbubul Hasan, ndc, psc 10. Maj Gen Sina Ibn Jamali, awc, psc 11. Brig Gen Md Golam Mustafa, afwc 12. Brig Gen Anup Kumar Chakma, ndc, psc 14.4 Capital Adequacy Ratio Tier ­ I (Core Capital) Paid up Capital Share Money Deposits Statutory Reserve Retained Earnings Tier ­II (Supplementary Capital) General Provision Exchange Equalization A. Total Capital (Tier-I + Tier-II) B. Total Risk Weighted Assets (RWA) C. Required Capital based on RWA (9% on B) D. Surplus Capital as per Bank weighted Assets (A - C) Capital Adequacy Ratio Tier - I : Required 4.5% of RWA Tier ­II Total : Required 9.00% of RWA 15 SHARE MONEY DEPOSITS Balance on 1 January Received during the year Transferred to Share Capital Account Closing Balance 15.1 16 STATUTORY RESERVE Balance on 1 January Reserve made during the year Closing Balance 113,138,916 101,539,070 214,677,986 200,000,000 200,000,000 200,000,000 8.20% 1.11% 9.31% Notes- 13.4 152,952,000 2,996,337 155,948,337 1,310,210,320 14,075,993,800 1,266,839,442 43,370,878 Notes- 15 Notes- 16 Notes- 17 500,000,000 200,000,000 214,677,986 239,583,997 1,154,261,983 No. of Shares 31.12.2006 31.12.2005 4,999,920 10 10 10 10 10 10 10 10 5,000,000 4,999,920 10 10 10 10 10 10 10 10 5,000,000 499,992,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 500,000,000

31.12.2005 Taka

499,992,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 500,000,000

500,000,000 200,000,000 113,138,916 178,833,393 991,972,309 120,100,000 2,996,337 123,096,337 1,115,068,646 8,925,764,163 803,318,775 311,749,871 11.11% 1.38% 12.49% 200,000,000 200,000,000 200,000,000

The entire amount of Tk. 20.00 Crore has subsequently been transferred to Share Capital Account on 4 February 2007. 67,881,642 45,257,274 113,138,916

Reserve for current year has been made on the net profit before tax of the current year under Section 24 of Bank Companies Act 1991. 17 RETAINED EARNINGS Balance on 1 January Dividend (cash) Income Tax Provision for the Income Year 2004 Transfer during the year Net Profit for the year transferred from Profit and Loss Account Transferred to Statutory Reserve Closing Balance 18 LETTER OF GUARANTEES Money for which the bank is contingently liable in respect of guarantees given favoring : Directors or Officers Government Banks and other financial institutions Others 353,385,786 7,103,330 583,874,778 944,363,894 277,041,318 326,806 436,346,186 713,714,310 178,833,393 (60,000,000) (40,405,675) 78,427,718 262,695,349 (101,539,070) 161,156,279 239,583,997 102,804,299 102,804,299 121,286,368 (45,257,274) 76,029,094 178,833,393

2006 Taka 19 INTEREST INCOME Interest from Loans and Advances Interest on Consumer Durable Scheme Interest on Overdraft Interest on SOD Interest on Cash Credit Interest on Marriage Loans Interest on Car Loans Interest on Payment Against Documents (PAD) Interest on Repair & Recon. of Dwelling House (RRDH) Interest on House Building Loans Interest on Term Loans Interest on Staff Loan Interest on LTR Interest on Inland Bills Purchased and Discounted Interest on Foreign Bills Purchased and Discounted Interest on Other Loans Interest on Cash Collateral Interest from Banks and Other Financial Institutions Interest on Fixed Deposits Interest on Bangladesh Bank Foreign Currency Accounts Interest on Short Term Deposits Interest on Call Deposits Interest received from Foreign Banks 20 INTEREST PAID ON DEPOSITS AND BORROWINGS Interest paid on deposits Interest on STD Account Interest on FDR Account Interest on Foreign Currency Deposit Interest on Savings Account Interest on Scheme Deposits Interest on - Consolidated Card A/c - ATM Interest paid on borrowings Interest on Call Deposits Interest on Repo Interest on Other Borrowings Other interest Interest paid to Bangladesh Bank 34,243,046 1,224,861,354 6,981,684 67,014,096 6,945,735 148,704 1,340,194,619 8,448,195 22,011,401 706,945 31,166,541 1,371,361,160 98,296,444 60,524,476 4,530,907 1,990,142 5,475,033 170,817,002 3,363,297 94,179,296.00 382,344,581 25,689,451 8,496,377 4,132,959 60,177,382 23,186,555 58,750,215 344,979,430 5,461,167.00 351,546,506.00 70,486,267.00 513,359.00 116,104,817 31,370,453 1,580,782,112 140,367,951 10,405,720 11,092,970 19,859,020 181,725,661 8,854,752 1,771,362,525

2005 Taka

2,870,009 15,297,527.00 351,350,965 24,683,382 8,547,364 3,939,696 33,052,308 22,509,035 24,372,083 157,482,778 84,401.00 231,308,341.00 23,346,477.00 433,409.00 31,552,176 31,597,642 962,427,593 122,401,425 2,558,785 4,706,960 5,382,582 135,049,752 2,736,237 1,100,213,582

24,483,244 753,461,428 1,248,887 37,829,721 3,900,512 820,923,792 35,413,707 75,292,805 1,175,000 111,881,512 336,122 336,122 933,141,426 111,950,669 62,109,644 399,600 20,019,679 194,479,592

21

INCOME FROM INVESTMENTS Interest on Treasury bills Interest on Treasury bonds Interest on Reverse REPO Dividend Income Gain from sales of shares

22

COMMISSION, EXCHANGE AND BROKERAGE Commission on Demand Draft, Money Transfer, Telegraphic Transfer, Pay Order etc. Travelers Cheque Bills Letter of Guarantees Letter of Credits Foreign Remittances Sale of Government Securities Fund Transfer Sale & Purchase of Shares Under writing Acceptance OD Processing Foreign Correspondence Miscellaneous Foreign Currency Exchange Gain 2,139,590 153,648 4,605,280 10,637,414 66,994,846 79,505 6,531,734 229,474 71,500 8,787,316 1,172,390 11,270,508 112,673,205 135,248,190 247,921,395 1,841,540 134,180 3,253,426 5,682,078 35,726,574 6,328 5,224,894 170,700 520,962 354,188 7,390,839 1,000 11,276 4,561,987 64,879,972 65,044,758 129,924,730

23

OTHER OPERATING INCOME Locker Rent Recovery from Customers Incidental Charges Sale Proceeds of Forms Service Charges Service Compensation Front End Fees Notice Pay Closing Charge Sale Proceeds of Cheque books BO Account Opening Fee BO Account Transaction Fee Income through Credit & ATM Card Profit on sale of Fixed Assets Miscellaneous Earnings

2006 Taka 367,300 9,046,567 2,860,378 184,040 2,965,469 100,000 5,498,894 223,200 152,212 19,200 187,000 188,124 44,704 576,699 10,758,969 33,172,756 27,349,383 13,703,873 8,093,276 64,230 180,354 389,837 49,780,953 2,221,530 533,187 65,087 759,460 1,885,000 691,588 1,442,531 2,550,235 5,908,584 16,057,202

2005 Taka 405,900 5,996,328 3,022,180 342,645 3,580,818 220,500 3,099,260 106,300 121,094 10,770 622,650 516,579 140 1,934,868 19,980,032 16,312,422 8,846,260 5,421,651 48,781 40,775 265,087 30,934,976 1,478,041 881,840 4,096 232,628 1,536,667 2,067,255 4,581,827 10,782,354

24

RENT, TAXES, INSURANCE, ELECTRICITY, ETC. Rent Electricity and Lighting Insurance Rates, Taxes & Excise Duty Generator Fuel Gas/Water Bill

25

POSTAGE, STAMPS, TELECOMMUNICATION, ETC. Postage Telegram / Telex Stamp Online Expenses ATM Card Expenditure Internet Charge Router Charges SWIFT Charge Telephone / Trunk Call

26

STATIONERY, PRINTING, ADVERTISEMENT, ETC. Printing and Stationery Publicity and Advertisement 7,364,511 1,429,452 8,793,963 664,500 664,500 1,985,774 65,400 2,301,409 5,596,703 14,627,934 639,149 56,323 148,314 270,808 1,046,208 338,089 1,189,955 798,257 9,726,260 548,443 160,000 425,250 735,153 2,237,883 1,431,343 157,396 88,404 1,323,100 2,006,601 293,356 542,943 48,740,455 4,518,941 1,519,584 6,038,525 200,500 200,500 2,534,328 58,789 1,259,988 3,810,471 10,518,376 421,904 1,071,140 287,963 134,523 1,190,115 222,709 514,364 10,506 818,410 6,772,621 312,767 110,000 192,700 50 498,851 1,204,060 698,299 134,530 108,620 507,210 104,800 49,838 2,374,777 156,802 36,079,511

27

DIRECTORS' FEES Meeting fees Other benefits

28

OTHER EXPENSES Business Development Expenses Clearing House Charge Conveyance Entertainment Car Expenses Cash Handling Charge Bank charges Interest on Lease Finance Meeting Expenses Subscription and Membership Fees News Paper and Periodicals Oil and Lubricant Registration Charge Remittance Charges Other Contractual Service Internship Allowances Honorarium for Banking Diploma Ex- Gratia Service Charge Training & Recruitment Expenses Traveling Expenses Up Keep of Office Premises Washing Charges Loss on Sale of Fixed Assets Financial Assistance CDS Charge Foreign Correspondence Expenses Amortization of Pre-opening Expenses Amortization of Intangible Assets Miscellaneous Expenses

2006 Taka 29 PROVISION FOR LOANS AND ADVANCES Specific Provisions-against classified loans and advances General Provisions-against un-classified loans and advances General Provisions-against special mention account 5,703,000 26,108,000 6,744,000 38,555,000

2005 Taka 16,706,745 50,768,445 2,500,000 69,975,190

30

EARNING PER SHARE (EPS) Net Profit After Tax (Numerator) Number of ordinary shares outstanding (Denominator) Face value per share Earning per share 262,695,349 5,000,000 100 52.54 121,286,368 5,000,000 100 24.26

31

INCOME RECEIVED FROM OTHER OPERATING ACTIVITIES Locker Rent Recovery from Customers Incidental Charges Sale Proceeds of Forms Service Charges Service Compensation Front End Fees Notice Pay Closing Charge Sale Proceeds of Cheque books BO Account Opening Fee BO Account Transaction Fee Income through Credit & ATM Card Income from Government Securities Income from sale proceed of shares Dividend Income Miscellaneous Earnings 367,300 9,046,567 2,860,378 184,040 2,965,469 100,000 5,498,894 223,200 152,212 19,200 187,000 188,124 44,704 132,889,889 5,475,033 1,990,142 10,758,969 172,951,121 (2,363,500) (65,400) (2,301,409) (5,595,763) (14,627,934) (639,149) (56,323) (148,314) (270,808) (1,046,208) (333,311) (1,160,599) (774,094) (9,692,965) (548,443) (160,000) (425,250) (288,509) (9,039,220) (735,153) (2,237,883) (1,431,343) (157,396) (88,404) (1,323,100) (477,693) (1,429,452) (62,165,296) 419,027 (16,600,473) (200,000) (664,500) (9,599,529) (146,228,394) 405,900 5,996,328 3,022,180 342,645 3,580,818 220,500 3,099,260 106,300 121,094 10,770 622,650 516,579 140 24,756,480 20,019,679 399,600 1,934,868 65,155,791 (2,534,328) (58,789) (1,259,988) (3,799,676) (10,518,376) (421,904) (1,071,140) (287,963) (134,523) (1,190,115) (221,853) (475,099) (10,506) (797,618) (6,766,812) (312,767) (110,000) (192,700) (98,988) (50) (498,851) (1,204,060) (698,299) (134,530) (507,210) (104,800) (49,838) (438,153) (1,519,584.00) (32,146,179) (494,338) (9,898,609) (200,500) (6,399,121) (84,557,267)

32

EXPENSES PAID FOR OTHER OPERATING ACTIVITIES Business Development Expenses Clearing House Charge Conveyance Entertainment Car Expenses Cash Handling Charge Bank charges Interest on Lease Finance Meeting Expenses Subscription and Membership Fees News Paper and Periodicals Oil and Lubricant Registration charge Remittance Charges Other Contractual Service Internship Allowances Honorarium for Banking Diploma Ex- Gratia Pre-opening Expenses Service Charge Payment to Staff Gratuity Fund Training Expenses Traveling Expenses Up Keep of Office Premises Washing Charges Financial Assistance CDS Charge Foreign Correspondence Expenses Miscellaneous Expenses Publicity and Advertisement Rent, Taxes, Insurance, Lighting etc. Legal Expenses Postage, Telegram, Telephone Audit Fee Directors Fee Repairs and maintenance of Fixed Assets

2006 Taka 33 CHANGES IN OTHER OPERATING ASSETS Security Deposits Encashment of Sanchaya patra awaiting reimbursement-Principa Encashment of Sanchaya patra awaiting reimbursement-Interest Encashment of WEDB awaiting reimbursement-Principal Encashment of WEDB awaiting reimbursement-Interest US$ Investment Bond - Principal US$ Investment Bond - Interest Inter Office Adjusting Account Clearing Adjustment Advance against Capital Expenditure Others (2,036,340) (28,971,663) 28,153,574 (5,038,000) (4,631,185) (70,450) (198,493) (116,583,234) (60,053) 7,546,714 (11,923,972) (133,813,102)

2005 Taka (46,627) (94,667,868) (40,234,953) (2,303,000) (848,500) 42,044,068 (24,730,824) (1,515,255) (122,302,959)

34

CHANGES IN OTHER LIABILITIES Provision for Gratuity Lease Obligation for Motor Vehicles Sundry Creditors Others (19,547,870) (1,397,473) (3,534,791) (3,740) (24,483,874) (1,330,717) 27,703,242 (597,960) 25,774,565

35

CLOSING CASH AND CASH EQUIVALENT Cash in hand (including foreign currencies) Balance with Bangladesh Bank and Sonali Bank (Including foreign currencies Balance with Other Bank and Financial Institutions Call Loan to other Banks Prize Bond 139,754,152 1,121,385,791 2,822,587,571 67,500,000 1,038,200 4,152,265,714 99,599,206 675,941,078 1,265,361,476 190,000,000 619,600 2,231,521,360

36

EXPENDITURE INCURRED FOR EMPLOYEES Salaries, allowances and benefits Number of employees at 31 December 2006 was 508; (31 December 2005 was 359;) who were in receipt of remuneration for that year which in the aggregate was not less than Tk 36,000 and those employed for a part of that year who were in receipt of remuneration of not less than Tk. 3,000 per month.

37.a

Particulars of Audit Committee An audit committee has been formed by the Board of Directors of the Bank in its 64th Board meeting held on 05 February 2003. In accordance with the BRPD circular letter no. 12 dated 23 December 2002, the committee constituted with a chairman, two members and a members secretary. At 31 December 2006, the Honorable Members of the committee were as follows: Name Brig. Gen. S.M. Mahbubul Karim Brig. Gen. Md. Shawkat Hossain Brig. Gen. Md. Shawkat Hasan Mr. Farhad Uddin Position Director Director Director Company Secretary Status with committee Chairman Member Member Member Secretary Educational qualification B.Sc. (Eng.) MBA PSC NDC, PSC M.Com. ACMA

37.b

During the year 2006, the following number of meetings of the Audit Committee held with the bank's Senior Management to consider and review the Bank's Financial Statements and Risk Management: Meeting Number 1 2 3 4 5 Date of meeting 23 January 2006 14 March 2006 24 August 2006 17 October 2006 24 December 2006

37.c

Following steps have been taken for implementation of an effective Internal Control Procedures of the banks 1 2 3 4 5 6 A strong internal control & compliance division has been formed with a view to establish compliance culture and full contro Regular review of internal and external (including Bangladesh Bank) audit reports with a view to implement the suggestion of internal and external auditors (including Bangladesh Bank), in respect of internal control techniques. To establish an effective management system that includes planning, organizing and supervising culture in the branches as well as at head office. Continuous monitoring & evaluation on application of internal control system, internal audit policy, policy for financial risks, existing rules and regulations (internal and external), other obligations from controlling authority, disclosure process of the bank. Review the accounting procedures with a view to ascertain that the International Financial Reporting Standards (IFRSs) have been applied in preparation and presentation of financial statements. Formulation of HRM policy and other operating procedures.

38

Related Party Disclosures a. Name of Directors and their interest in different Entities as on 31 December 2006 Name Lt Gen Moeen U Ahmed, psc Maj Gen Md Matiur Rahman ndu, psc Brig Brig Brig Brig Brig psc Gen Md Zillur Rahman, mcps, msc Gen S M Mahbubul Karim Gen Md Rafiqul Islam, ndc, psc Gen Md Shawkat Hossain, psc Gen Muhammad Anisur Rahman, ndc, Designation Chairman Vice Chairman Director Director Director Director Director Director Entities where they have interest Sena Kalyan Sangstha Sena Hotel Dev. Ltd. Army Welfare Trust Sena Kalyan Sangstha Sena Hotel Dev. Ltd. Army Welfare Trust Army Welfare Trust Position Chairman, Board of Trustee Chairman, Board of Directors Chairman, Board of Trustee Member, Board of Trustee Vice Chairman, Board of Directors Vice Chairman, Board of Trustee Director, Board of Trustee -

Brig Gen Mohd Mahbubul Hasan, ndc, psc

b) Significant contracts where Bank is a party and wherein Directors have interest Nature of Contract Branch Name Name of directors and related by Lt Gen Moeen U Ahmed, psc Chairman, Board of Trustee, Army Welfare Trust Maj Gen Md Matiur Rahman ndu, psc Vice Chairman, Board of Trustee, Army Welfare Trust Lt Gen Moeen U Ahmed, psc Chairman, Board of Trustee, Sena Kalyan Sangstha Maj Gen Md Matiur Rahman ndu, psc Member, Board of Trustee, Sena Kalyan Sangstha Nil

Lease agreement with Army Welfare Trust

Principal

Lease agreement with Sena Kalyan Sangstha

Sena Kalyan Bhaban

c) Shares issued to Directors and Executives without consideration or exercisable at discount: d) Related party Transactions: Name of Army Welfare Trust Sena Kalyan Sangstha Relationship Common Director Common Director Nature of Transaction Rent for Principal Branch Rent for Sena Kalyan Bhaban Branch

Amount 3,600,000 2,419,775 Not applicable 4,305,733 Not applicable Not applicable

e) Lending Policies to related Parties: f) Loan and advances to Directors and their related concern g) Business other than banking business with any related concern of the Directors as per Section 18(2) of the Bank Companies Act ­ 1991: h) Investments in the Securities of Directors and their related concern 39 FINANCIAL HIGHLIGHTS

As per BRPD Circular # 14, dated 25 June 2003, Financial Highlights of the Bank for the year ended on 31 December 2006 has been shown in Annexure-D.

Sd/Chairman

Sd/Vice-Chairman

Sd/Director

Sd/Managing Director

Annexure - A TRUST BANK LIMITED Schedule of Balance with Other Banks-Outside Bangladesh (Nostro Accounts) Name of the foreign currency USD USD USD USD GBP GBP GBP Euro Euro Euro Yen ACU ACU ACU ACU ACU CHF 31 Dec 06 Exchange Total amount rate as equivalent to on 31 Taka Dec 06 70.45 70.45 70.45 70.45 139.24 139.24 139.24 93.30 93.30 93.30 0.62 70.45 70.45 70.45 68.84 70.45 58.76 58,801,936 41,371,374 2,480,651 10,280,318 52,294,851 1,313,750 7,192,793 2,187,575 2,018,826 733,499 341,516 413,536 552,830 502,129 3,017,628 3,649 2,957,630 186,464,491 31 Dec 05 Exchange Total amount rate as equivalent to on 31 Taka Dec 05 67.90 67.90 67.90 67.90 117.97 117.97 81.52 81.52 0.61 67.90 67.90 67.90 67.90 67.90 14,844,772 10,730,132 317,634 5,158,948 2,313,240 1,405,212 13,923,829 1,070,746 515,962 14,111,589 1,240,230 1,229,602 658,506 4,851,628 72,372,030

Name of the Bank

Amount in foreign currency 834,661.97 587,244.49 35,211.51 145,923.61 375,564.04 9,434.91 51,656.22 23,446.27 21,637.64 7,861.59 551,722.00 5,869.92 7,847.12 7,127.46 43,833.61 51.79 50,332.70

Amount in foreign currency 218,626.98 158,028.45 4,677.97 75,978.62 19,609.51 11,912.09 170,800.94 13,134.64 852,267.00 207,828.98 18,265.54 18,109.01 9,698.18 71,452.54 -

Citibank N.A., USA HSBC, USA Union De Banques, HKG Mashreq Bank psc, USA Citibank N.A., UK Standard Chartered Bank, UK HSBC, PLC Citibank N.A., UK Standard Chartered Bank, UK HSBC, PLC Standard Chartered Bank, Japan AB Bank, Mumbai, India HSBC, Mumbai, India Citibank N.A., Mumbai, India ICICI Bank Ltd. HSBC, Pakistan Habib Bank, Zurich Total

Annexure - B

TRUST BANK LIMITED

Schedule of Investment in Shares As of 31 December 2006

Face value/ Average cost Quoted rate per Total market share as on value at 31 Dec 31 Dec 06 06

SL No.

Name of the company

No. of shares

Cost of Holding

(Shortfall)/ Excess

A. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Quoted on 31 December 2006 Bank Asia Ltd. ICB AMCL 1st Mutual Fund South East Bank Ltd. One Bank Ltd. Lafarge Surma Cement Co Ltd. Standard Bank Ltd. NCC Bank Ltd. Prime Bank Ltd. Exim Bank Ltd Square Pharmaceuticals Ltd. Mutual Trust Bank Ltd Summit Power Ltd. Dhaka Electric Supply Co. Ltd. Arab Bangladesh Bank Ltd. Grameen Mutual Fund One JMI Bangla Co. Ltd. Sub total: Unquoted on 31 December 2006 Central Depository Bangladesh Ltd. Sub total:

24,900 10,250 20,280 56,348 136,842 10,190 45,862 6,175 2,600 7,583 7,920 104,450 19,400 29,780 135,000 67,300 684,880

437.67 303.84 332.32 307.50 353.52 288.38 280.43 486.90 387.31 2,301.11 419.79 545.65 407.45 857.45 10.00 100.00

10,898,091 3,114,360 6,739,349 17,327,046 48,376,494 2,938,639 12,861,245 3,006,609 1,007,012 17,449,293 3,324,734 56,992,976 7,904,440 25,534,911 1,350,000 6,730,000 225,555,199

428.00 230.25 320.75 285.75 391.75 288.00 289.25 528.75 336.75 2,265.00 342.25 529.75 407.00 892.75 17.80 48.00

10,657,200 2,360,063 6,504,810 16,101,441 53,607,854 2,934,720 13,265,584 3,265,031 875,550 17,175,495 2,710,620 55,332,388 7,895,801 26,586,095 2,403,000 3,230,400 224,906,052

(240,891) (754,297) (234,539) (1,225,605) 5,231,360 (3,919) 404,339 258,422 (131,462) (273,798) (614,114) (1,660,588) (8,639) 1,051,184 1,053,000 (3,499,600) (649,147)

B. 1

3 3

1,000,000

3,000,000 3,000,000

-

-

C. 1

Blocked Investment on 31 December 2006 Lafarge Surma Cement Co Ltd. 1,086,176 Sub total: Grand Total: 1,086,176 1,771,059

450.00

488,779,200 488,779,200 717,334,399

-

(649,147)

TRUST BANK LIMITED

Schedule of Fixed Assets As of 31 December 2006

COST PARTICULARS Balance as of 01 January 2006 Taka Balance Disposal/ Additions during Prior year as of adjustment during the year Adjustments the year 31 December 2006 Taka Taka Taka Balance as of 01 January 2006 Taka DEPRECIATION Charge for the year Taka Prior year Adjustments Taka Disposal/ Balance as of adjustment 31 December '06 during the year Taka Taka

Annexure - C

Written Down Value as of 31 Dec. 2006 Taka

Leasehold Land Furniture and Fixtures Office Equipment Motor Vehicles Office Renovation 31 December 2006 31 December 2005

160,469 45,103,074 46,419,726 7,957,154 66,969,327 166,609,750 124,497,613

13,105,702

20,791,448.75

-

1,510,000 1,510,000 300,000

160,469 58,208,776 67,211,175 11,831,764 86,860,712 224,272,896 166,609,750

8,168,636 24,540,396 5,897,061 17,387,575 55,993,668 38,318,026

5,205,875 9,532,303 2,127,118 6,869,120 23,734,416 17,849,022

-

1,509,999 1,509,999 173,380

13,374,511 34,072,699 6,514,180 24,256,695 78,218,085 55,993,668

160,469 44,834,265 33,138,476 5,317,584 62,604,017 146,054,811 110,616,082

5,384,610 19,891,385 59,173,146 42,412,137

Annexure - D

TRUST BANK LIMITED

Financial Highlights

SI No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Particulars Paid up Capital Total Capital Capital surplus/(deficit) Total Assets Total Deposits Total Loans and Advances Total Contingent Liabilities and Commitments Credit Deposit Ratio Percentage of classified loans against total loans and advances Profit after tax and provision Amount of classified loans during current year Provisions kept against classified loan Provision surplus/deficit Cost of fund Interest earning Assets Non-interest earning Assets Return on Investment (ROI) Return on Asset (ROA) Income from Investment Earning per Share Net income per Share Price Earning Ratio

Base Taka Taka Taka Taka Taka Taka Taka % % Taka Taka Taka Taka % Taka Taka % % Taka Taka Taka %

31 Dec 06 500,000,000 1,310,210,320 43,370,878 21,197,592,200 18,985,951,094 13,188,092,885 7,885,364,349 69.46 1.32 262,695,349 45,402,353 63,676,000 8.47 18,608,058,132 2,589,534,068 20.05 1.24 170,817,002 52.54 52.54 N/A

31 Dec 05 500,000,000 1,115,068,646 311,749,871 14,782,151,192 12,704,902,083 9,738,323,349 4,681,077,063 76.65 1.32 121,286,368 28,617,561 58,000,000 2,315,796 7.53 13,401,393,133 1,380,758,059 10.88 0.82 194,479,592 24.26 24.26 N/A

Auditor's Certificate regarding calculation of Accounting Ratios for the years ended 31 December 2002, 2003, 2004, 2005 and 2006

We have examined the following accounting ratios of Trust Bank Limited for the years ended 31 December 2002, 31 December 2003, 31 December 2004, 31 December 2005 and 31 December 2006, which have been presented to us by the management of the Bank in order to confirm as to whether they have been properly prepared using acceptable principles on the basis of audited financial statements for the year ended 31 December 2002, 31 December 2003, 31 December 2004, 31 December 2005 and 31 December 2006. Based on our review, we certify that the Bank has properly prepared the following Ratio Analysis using acceptable principles on the basis of audited financial statements for the years ended 31 December 2006, 31 December 2005, 31 December 2004, 31 December 2003 and 31 December 2002. Ratio/percentage 31.12.2006 Liquidity Ratios Current ratio Quick ratio Times interest earned Debt-equity ratio Operating Ratios Accounts receivable ­ turnover ratio Inventory ­ turnover ratio Assets ­ turnover ratio Profitability Ratios Gross margin ratio (%) Operating income ratio (%) Net income ratio (%) Return on assets ratio (%) Return on equity (before tax) Return on equity (after tax) Earnings per share 31.12.2005 31.12.2004 31.12.2003 31.12.2002

1.20 1.20 0.40 17.36

0.94 0.93 0.32 13.90

0.88 0.88 0.43 12.88

0.85 0.85 0.27 16.30

1.26 1.26 -0.66 13.50

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A 38.32% 11.82% 1.24% 43.98% 22.76% 52.54

N/A 35.40% 8.40% 0.82% 22.81% 12.23% 24.26

N/A 40.85% 20.68% 1.79% 24.85% 24.85% 44.16

N/A 39.41% 12.73% 0.87% 15.00% 15.00% 194.70

N/A 46.57% -40.38% -4.09% -59.35% -59.35% (532.63)

Note : Face value per share was Tk. 1,000 in 2002 & 2003 and Tk. 100 in 2004, 2005 & 2006.

Dhaka, 3 April 2007

Sd/ACNABIN Chartered Accountants

Auditor's Report under Section 135(1), Para 24(1) of Third Schedule to the Companies Act 1994

As per Section 135 (1) of Para 24(1) of Part-II of Schedule III to the Companies Act 1994, Trust Bank Limited has prepared the following statements of assets and liabilities and operating results for the years ended 31 December 2002, 2003, 2004, 2005 and 2006 and presented to us. After verification and scruting we have found that the information has been correctly extracted from the audited financial statements of the Bank for respecvtive years. Accordingly we confirm that: 1. The company was incorporated on 17 June 1999. 2. The statements of operating results and financial position of the Bank for the years ended and as of 31 December 2006, 2005, 2004, 2003 and 2002 are as under: A. Profit and Loss Statement Particulars Interest Income Less: Interest Paid on Deposits and Borrowings Net Interest Income Income from Investments Commission, Exchange and Brokerage Other Operating Income Total Operating Income Salaries and Allowances Staff Gratuity Rent, Taxes, Insurance, Electricity, etc. Legal Expenses Postage, Stamps, Telecommunications, etc. Stationery, Printing, Advertisement, etc. Managing Director's salary and benefits Directors' Fees Auditors' Fee Depreciation on Fixed Assets Repairs and maintenance Other Expenses Total Operating Expenses Profit before Provisions Provision for loans and advances Provision for Diminution in value of Investment Total Profit before income Tax for the year Provision for Income Tax Net Profit after Tax for the year Profit/(Loss) brought forward from previous year Dividend for the year 2005 Income Tax Provision for the Income year 2004 Year ended 31.12.2006 1,771,362,525 1,371,361,160 400,001,365 170,817,002 247,921,395 33,172,756 451,911,153 851,912,518 133,200,114 9,039,220 49,780,953 266,004 16,057,202 8,793,963 5,036,666 664,500 100,000 23,734,416 9,599,529 48,740,455 305,013,022 546,899,496 38,555,000 649,147 507,695,349 245,000,000 262,695,349 178,833,393 (60,000,000) (40,405,675) 78,427,718 341,123,067 101,539,070 239,583,997 341,123,067 52.54 Year ended 31.12.2005 1,100,213,582 933,141,426 167,072,156 194,479,592 129,924,730 19,980,032 344,384,354 511,456,510 91,747,613 9,471,670 30,934,976 191,660 10,782,354 6,038,525 5,400,000 200,500 100,000 17,849,022 6,399,121 36,079,511 215,194,952 296,261,558 69,975,190 226,286,368 105,000,000 121,286,368 102,804,299 102,804,299 224,090,667 45,257,274 178,833,393 224,090,667 24.26 Year ended 31.12.2004 749,027,299 618,932,361 130,094,938 177,745,964 100,154,725 19,433,492 297,334,181 427,429,119 82,415,200 10,076,200 13,459,125 271,220 9,111,531 5,885,982 5,400,000 9,000 100,000 15,980,175 1,363,595 19,083,095 163,155,123 264,273,996 47,889,810 216,384,186 216,384,186 (70,303,050) (70,303,050) 146,081,136 43,276,837 102,804,299 146,081,136 44.16 Year ended 31.12.2003 403,819,534 324,480,743 79,338,791 66,832,033 53,035,062 11,812,627 131,679,722 211,018,513 54,062,307 8,378,835 201,699 6,438,933 3,655,181 3,917,796 102,000 55,000 9,474,516 2,204,322 34,096,139 122,586,728 88,431,785 20,287,517 68,144,268 68,144,268 (124,818,464) (124,818,464) (56,674,196) 13,628,854 (70,303,050) (56,674,196) 194.70 (Figure in Taka) Year ended 31.12.2002 291,298,706 185,437,910 105,860,796 25,335,015 13,086,706 17,376,891 55,798,612 161,659,408 44,652,757 6,337,807 81,945 3,398,219 2,142,761 3,700,000 124,000 55,000 7,641,055 1,254,880 214,206,898 283,595,322 (121,935,914) 18,226,483 (140,162,397) (140,162,397) 15,343,933 15,343,933 (124,818,464) (124,818,464) (124,818,464) (532.63)

Appropriations Statutory Reserve @20% on profit before tax Accumulated Retained Earnings transferred to Balance Sheet Earning Per Share (EPS)

B. Balance Sheet Particulars PROPERTY AND ASSETS Cash Cash in hand (including foreign currencies) Balance with Bangladesh Bank and Sonali Bank as agent (including foreign currencies). At 31.12.2006 At 31.12.2005 At 31.12.2004 At 31.12.2003 (Figure in Taka) At 31.12.2002

139,754,152 1,121,385,791 1,261,139,943

99,599,206 675,941,078 775,540,284 1,192,989,446 72,372,030 1,265,361,476 190,000,000 2,330,619,600 117,334,178 2,447,953,778 9,383,459,513 354,863,836 9,738,323,349 110,616,082 254,356,223 14,782,151,192

55,374,318 361,210,961 416,585,279 1,340,931,931 32,472,210 1,373,404,141 3,190,599,900 30,177,170 3,220,777,070 6,690,408,551 114,040,002 6,804,448,553 83,971,729 186,629,058 12,085,815,830

25,188,866 193,061,558 218,250,424 1,121,176,637 28,772,966 1,149,949,603 50,000,000 1,840,605,200 56,315,000 1,896,920,200 4,327,826,794 30,487,298 4,358,314,092 61,369,226 124,029,464 7,858,833,009

16,943,847 151,916,694 168,860,541 679,692,180 25,273,607 704,965,787 480,187,300 13,000,000 493,187,300 1,896,723,204 905,860 1,897,629,064 58,205,976 101,481,644 3,424,330,312

Balance with other banks & financial institutions In Bangladesh 2,636,123,081 Outside Bangladesh 186,464,490 2,822,587,571 Money at call and short notice 67,500,000 Investments Government 2,543,038,200 Others 717,334,399 3,260,372,599 Loans and Advances Loans, Cash Credit, Overdrafts, etc. 12,323,004,330 Bills purchased and discounted 865,088,555 13,188,092,885 Fixed assets including premises, furniture & 146,054,811 fixtures Other assets 451,844,391 Non-banking assets Total Assets 21,197,592,200 LIABILITIES AND CAPITAL Liabilities & agents Deposits and other accounts Current Deposits Bills Payable Savings Bank Deposits Fixed Deposits Other Deposits Other liabilities Total Liabilities Capital/Shareholders' Equity Paid up Capital Share Money Deposit Statutory Reserve Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity OFF-BALANCE SHEET ITEMS Contingent Liabilities Acceptances and Endorsements Letter of Guarantees Irrevocable Letters of Credits Bills for collection Other Contingent Liabilities Value of Bangladesh Sanchaya Patra on hand Value of travelers' cheques on hand

426,000,000 791,794,948 122,678,874 1,456,592,033 14,333,275,178 2,281,610,061 18,985,951,094 631,379,123 20,043,330,217 500,000,000 200,000,000 214,677,986 239,583,997 1,154,261,983 21,197,592,200

660,000,000 401,655,110 65,946,548 963,235,817 9,798,565,489 1,475,499,119 12,704,902,083 425,276,800 13,790,178,883 500,000,000 200,000,000 113,138,916 178,833,393 991,972,309 14,782,151,192

1,430,000,000 332,892,831 84,488,208 714,017,988 7,129,792,427 780,992,286 9,042,183,740 742,946,149 11,215,129,889 500,000,000 200,000,000 67,881,642 102,804,299 870,685,941 12,085,815,830

2,340,000,000 205,586,982 19,004,011 417,400,693 3,254,935,690 586,329,525 4,483,256,901 581,274,353 7,404,531,254 350,000,000 150,000,000 24,604,805 (70,303,050) 454,301,755 7,858,833,009

30,000,000 111,393,249 15,462,188 368,474,219 2,122,200,050 373,663,646 2,991,193,352 166,979,473 3,188,172,825 350,000,000 10,975,951 (124,818,464) 236,157,487 3,424,330,312

1,216,427,993 944,363,894 4,394,291,940 1,211,554,702 7,766,638,529 114,930,000 3,795,820 118,725,820 7,885,364,349 7,885,364,349

1,016,421,319 713,714,310 2,150,750,322 584,777,147 4,465,663,098 213,045,000 2,368,965 215,413,965 4,681,077,063 4,681,077,063

466,470,421 583,897,361 1,498,811,735 444,466,403 2,993,645,920 127,500,000 2,173,060 129,673,060 3,123,318,980 3,123,318,980

202,822,071 379,331,481 806,471,363 6,220,173 1,394,845,088 103,280,000 334,020 103,614,020 1,498,459,108 4,496,196 4,496,196 1,502,955,304

25,607,646 87,376,450 349,520,878 15,844,487 478,349,461 36,125,000 1,569,750 37,694,750 516,044,211 6,114,876 6,114,876 522,159,087

Other commitments Lease Rental Commitments Documentary credit & short term trade-related Forward assets purchased and forward deposits placed Undrawn note issuance and revolving facilities Undrawn formal standby facilities, credit lines and other commitments Total Off-Blance Sheet items including contingent liabilities

C. Cash Flow Statement Particulars Year ended 31.12.2006 Year ended 31.12.2005 1,101,419,153 (929,332,423) 122,787,328 (97,372,883) (5,259,459) (60,739,639) 65,155,791 (84,557,267) 112,100,601 (87,157,008) (2,929,755,702) (122,302,959) (749,994,856) 4,139,944,759 25,774,565 388,609,400 (42,412,137) 18,000 860,000,000 817,605,863 Year ended 31.12.2004 746,102,156 (443,646,786) 100,849,219 (76,146,780) (4,728,963) (11,716,614) 184,190,292 (58,634,811) 436,267,713 26,137,830 (2,443,729,987) (30,988,797) 644,816,038 3,914,110,801 (81,614,542) 2,464,999,056 (34,999,279) 468,555 (1,350,000,000) (1,384,530,724) Year ended 31.12.2003 407,616,933 (282,787,851) 53,490,541 (57,949,103) (1,765,908) (24,960,727) 382,154,222 (52,556,346) 423,241,761 (43,315,000) (2,458,695,416) (26,747,782) 505,336,589 986,726,960 70,717,019 (542,735,869) (12,638,953) (1,460,000,000) (1,472,638,953) (Figure in Taka) Year ended 31.12.2002 316,633,721 (185,437,910) 13,086,706 (48,352,757) (1,279,079) (30,396,731) 17,376,891 (225,724,802) (144,093,961) (10,000,000) (293,677,814) 25,776,158 437,469,094 45,759,185 61,232,662 (21,425,714) 313,940 (120,074,800) (141,186,574)

A. Cash flow from operating activities Interest received in cash 1,727,297,105 Interest paid by cash (1,272,046,558) Fees and commission received in cash 229,151,753 Cash paid to employees (133,587,267) Cash paid to suppliers (9,255,787) Income Taxes paid (135,751,593) Income received from other operating activities 172,951,121 Expenses paid for other operating activities (146,228,394) Operating profit before changes in operating Assets and Liabilities 432,530,380 Increase/(Decrease) in operating assets & liabilities Net Investment in trading securities (600,000,221) Changes in loan & advance to customers (Other than Banks) (3,438,534,462) Changes in other operating assets (133,813,102) Changes in deposits received from other Banks (400,157,771) Changes in deposits received from customers 6,576,507,199 Changes in other liabilities (24,483,874) Net cash from operating activities (A) 2,412,048,149 B. Cash flow from investing activities Purchase of fixed assets (59,173,146) Purchase of intangible assets (812,241) Sale of fixed assets 576,700 Decrease/(increase) in investments on government securities (212,000,000) Net cash from investing activities (B) (271,408,687) C. Cash flow from financing activities Increase/(Decrease) in Borrowing: Call loan 370,000,000 Re-purchase Offer (REPO) (600,000,000) Other borrowings (4,000,000) Share Money Deposits Net cash from financing activities (C ) (234,000,000) D. Net increase in Cash & Cash 1,906,639,462 Equivalent(A+B+C) E. Cash and Cash Equivalent at begainning 2,231,521,360 of the year F. Effects of exchange rate changes on cash 14,104,892 and cash equivalents G. Closing Cash and Cash Equivalent 4,152,265,714 (D+E+F)* (*) Cash and Cash Equivalents: Cash in hand (including foreign currencies) 139,754,152 (Including foreign currencies) 1,121,385,791 Balance with Other Bank and Financial Institutions 2,822,587,571 Call Loan to other Banks 67,500,000 Prize Bond 1,038,200 4,152,265,714 3. Dividend declared The company declared dividends for the last five years as follows: Year ended 31.12.2006

(280,000,000) (500,000,000) 10,000,000 (770,000,000) 436,215,263 1,790,589,320 4,716,777 2,231,521,360 99,599,206 675,941,078 1,265,361,476 190,000,000 619,600 2,231,521,360

(1,260,000,000) 350,000,000 200,000,000 (710,000,000) 370,468,332 1,418,805,227 1,315,761 1,790,589,320 55,374,318 361,210,961 1,373,404,141 599,900 1,790,589,320

1,560,000,000 750,000,000 150,000,000 2,460,000,000 444,625,178 974,013,628 166,421 1,418,805,227 25,188,866 193,061,558 1,149,949,603 50,000,000 605,200 1,418,805,227

(190,000,000) 100,000,000 (90,000,000) (169,953,912) 1,043,780,240 873,826,328 16,943,847 151,916,694 704,965,787 873,826,328

Year ended 31.12.2005

Year ended 31.12.2004

Year ended 31.12.2003

Year ended 31.12.2002

Cash dividend Stock dividend 4. 5. 6. The Bank does not have any subsidiary company.

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12% -

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-

-

No proceeds or part of the issue of the shares were applied directly by the Bank in the purchase of any business. No accounts have been audited in respect of any period subsequent to the year ended 31 December 2006. Sd/ACNABIN Chartered Accountants

Dhaka, 3 April 2007

Additional disclosure by the Auditor 1. Dividend: Dividend payable amounting to Tk. 60 (sixty) million as shown in the audited Balance Sheet of Trust Bank Limited as on 31 December 2006 has subsequently been paid in the year 2007. 2. Gratuity Provision: Gratuity provision of Tk. 19,547,870 as shown in the audited financial statements of Trust Bank Limited for the year 2005, was paid to the Trustee Board constituted for this purpose and hence has not appeared in the financial statements for the year ended 31 December 2006. 3. Deferred Tax: Trust Bank Limited has not made any provision in its financial statements for the year ended 31 December 2006 with regard to deferred tax (asset/liability) that may result in the gap between accounting depreciation and tax depreciation which, we believe, is not material. Sd/ACNABIN Chartered Accountants

Dhaka, May 10, 2007

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