Independent Auditors’ Report

&
Audited Financial Statements
of
FIRST SECURITY ISLAMI BANK LIMITED
and its Subsidiaries
As at & for the year ended 31 December 2017
 Chartered Accountants
Gulshan Pink City
Suites # 01-03, Level: 7, Plot # 15, Road # 103 National Office
Block–CEN (C), Gulshan Avenue, Dhaka-1212 BTMC Bhaban (7th& 8th Level)
Bangladesh 7-9 Karwan Bazar Commercial Area
Dhaka-1212, Bangladesh
Phone: 880-2-8881824-6
Phone: 880-2-9120090, 9140094, 8189323, 8189324
Fax : 880-2-8881822 Fax : 880-2-8119298
Email : aqasem@[Link]
Email : [Link]

Independent Auditors’ Report to the Shareholders of First Security Islami Bank Limited

Report on the consolidated Financial Statements

We have audited accompanying consolidated financial statements of First Security Islami Bank Limited (together referred
to as the “Group”) as well as the separate financial statements of First Security Islami Bank Limited (the “Bank”) which
comprise the consolidated and separate Balance Sheets as at 31 December 2017, consolidated and separate profit and
loss accounts, consolidated and separate Balance Sheets as at 31 December 2017 and consolidated and separate cash
flow statements for the year then ended, and a summary significant accounting policies and other explanatory
information disclosed in notes 1 to 51.
Management’s responsibility for the Consolidated Financial Statements
Management of the Bank is responsible for the preparation and fair representation of these consolidated financial
statements of the Group and also separate financial statements of the Bank that give a true and fair view in accordance
with Bangladesh Financial Reporting Standards (BFRS) and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements of the Group and also separate financial
statements of the Bank that are free from material misstatements, whether due to fraud or error. The Bank Companies
Act, 1991(as amended in the year 2013) and the local central bank (Bangladesh Bank) regulations required the
Management to ensure effective internal audit, internal control and risk management functions of the Bank. The
Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to
Bangladesh Bank on instances of fraud and forgeries.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate
financial statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh Standards
on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements of the Group and the separate
financial statements of the Bank are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on our
judgment, including the assessment of the risk of material misstatements of the consolidated financial statements of the
Group and the separate financial statements of the Bank, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated financial
statements of the Group and separate financial statements of the Bank that give a true and fair view in order to design
audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements of the Group and also separate financial statements of the
Bank.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and also separate financial statements of the Bank are
prepared and maintained according to Bangladesh Accounting Standards (BAS) and reported in accordance with
Bangladesh Financial Reporting Standards (BFRS) as explained in Note 2 give a true and fair view of the consolidated
financial position of the group and also separate financial position of the Bank as at 31 December 2017, and of its
consolidated and separate financial performance of its consolidated and separate cash flows for the year then ended and
comply with the Companies Act 1994 and Banking Companies Act 1991(as amended in the year 2013).
Report on other legal and regulatory requirements
 Chartered Accountants
Gulshan Pink City
Suites # 01-03, Level: 7, Plot # 15, Road # 103 National Office
Block–CEN (C), Gulshan Avenue, Dhaka-1212 BTMC Bhaban (7th& 8th Level)
Bangladesh 7-9 Karwan Bazar Commercial Area
Dhaka-1212, Bangladesh
Phone: 880-2-8881824-6
Phone: 880-2-9120090, 9140094, 8189323, 8189324
Fax : 880-2-8881822 Fax : 880-2-8119298
Email : aqasem@[Link]
Email : [Link]

In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act, 1991(as
amended in the year 2013) the rules and regulations issued by Bangladesh Bank, we also report the following:
i. we have obtained all the information and explanation which to the best of our knowledge and belief were
necessary for the purpose of our audit and made due verification thereof;
ii. to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s
Responsibility section in forming the above opinion on the consolidated financial statements of the Group and
the separate financial statements of the Bank and considering the reports of the Management to Bangladesh
Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Management’s
Responsibility for the Financial Statements and Internal Control:
a) internal audit, internal control and risk management procedure practicable for the respective job of
the Group and the Bank to the financial statements appeared to be materially adequate;
b) nothing has come to our attention regarding material instances of forgeries or irregularity or
administrative error and exception or anything detrimental committed by employees of the Bank and
its related entities;
iii. financial statements of subsidiary company of the Bank namely First Security Islami Capital and Investment
Limited have been audited by ShafiqBasak& Co. and First Security Islami Exchange Italy S.R.L have been audited
by STEFANO SALIMEL, DOTTORE COMMERCIALISTA and have been properly reflected in the consolidated
financial statements;
iv. in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it
appeared from our examination of those books and proper return adequate for the purpose of our audit have
been received from branches not visited by us;
v. the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance
sheet and separate profit and loss account of the Bank together with the annexed Notes dealt with by the report
are in agreement with the books of account and returns;
vi. the expenditure incurred was for the purposes of the Bank’s business;
vii. the consolidated financial statements of the Group and the separate financial statements of the Bank have been
drawn up in conformity with prevailing rules, regulations and accounting standards as well as with related
guidance issued by Bangladesh Bank;
viii. adequate provisions have been made for investments which are, in our opinion, doubtful of recovery and as per
decision taken in tripartite meeting amongst Inspection Team of Bangladesh Bank, External Auditors and the
Management of First Security Islami Bank Limited held on 16 th April 2018 and subsequent letter issued by
Bangladesh Bank letter no. DBI-4/42(5)/2018-769, dated 18 April 2018;
ix. the records and statements submitted by the branches have been properly maintained and consolidated in the
financial statements;
x. the information and explanation required by us have been received and found satisfactory;
xi. we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around 1,500 person
hours during the audit;
xii. Minimum capital to Risk Weighted Assets Ratio (CRAR) as required by Bangladesh Bank has been maintained
adequately during the year;

A. Qasem& Co. HodaVasi Chowdhury & Co.

Chartered Accountants Chartered Accountants

Dated, Dhaka
Wednesday, 25 April 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Consolidated Balance Sheet
As at 31 December 2017

2017 2016
Notes
BDT BDT
PROPERTY AND ASSETS
Cash 3 (a) 25,177,139,774 32,300,518,914
In hand (including foreign currencies) 1,691,479,252 1,709,030,260
Balance with Bangladesh Bank and its Agent Bank(s) 23,485,660,522 30,591,488,654
(including foreign currencies)
Balance with other Banks and Financial Institutions 4.1(a) 641,309,944 512,084,739
In Bangladesh 82,762,601 79,825,798
Outside Bangladesh 558,547,343 432,258,941

Placement with Banks & Other Financial Institutions 4.2 13,603,700,000 14,509,000,000

Investments in Shares & Securities 5(a) 16,099,534,554 14,855,836,534

Government 15,000,000,000 13,900,000,000
Others 1,099,534,554 955,836,534
Investments 273,352,470,705 225,889,892,521
General Investment etc. 6.A(a) 272,697,811,880 225,345,248,091
Bills Purchased and Negotiated 6.B 654,658,825 544,644,430

Fixed Assets Including Premises, Furniture & Fixtures and 7(a) 3,473,092,894 3,450,117,792
Intangible Assets
Other Assets 8(a) 12,114,221,889 10,126,652,594
Non Banking Assets 9 25,145,280 25,145,280
Total Assets 344,486,615,040 301,669,248,374

LIABILITIES AND CAPITAL

Liabilities
Placement from Banks & Other Financial Institutions 10 (a) 9,481,539,506 711,115,048
Deposits and Other Accounts 299,106,100,756 274,224,785,993
Al-Wadia Current Deposits and Other Deposit Accounts 11.1(a) 20,638,545,972 15,946,290,541
Bills Payable 11.2 1,805,435,584 1,477,937,977
Mudaraba Savings Deposits 11.3 26,626,552,818 18,421,853,013
Mudaraba Term Deposits 11.4 197,765,021,849 188,431,972,412
Other Mudaraba Deposits 11.5 52,270,544,533 49,946,732,050

Mudaraba Subordinated Bond 12 5,382,000,000 1,382,000,000

Other Liabilities 13(a) 18,406,049,243 14,290,910,754
Total Liabilities 332,375,689,505 290,608,811,795
Capital/Shareholders' equity
Paid-up Capital 14.1 7,128,175,820 6,788,738,880
Statutory Reserve 15 2,950,454,362 2,412,128,110
Other Reserve 16 516,507,063 402,850,965
Asset Revaluation Reserve 17 352,137,580 362,198,654
Retained Earnings 18(a) 823,468,503 793,919,776
Total Shareholders' Equity 11,770,743,328 10,759,836,385

Non-controlling Interest 19 340,182,207 300,600,194

Total Liabilities and Shareholders' Equity 344,486,615,040 301,669,248,374
 FIRST SECURITY ISLAMI BANK LIMITED
Consolidated Balance Sheet
As at 31 December 2017

2017 2016
Notes
BDT BDT

OFF- BALANCE SHEET ITEMS

Contingent Liabilities

Acceptances and Endorsements 27,687,184,862 21,750,937,662

Letters of Guarantee 20 6,079,859,518 6,317,021,800
Irrevocable Letters of Credit 21 6,125,414,109 4,335,806,257
Bills for Collection 22 1,370,961,371 1,165,010,799
Other Contingent Liabilities - -
Total 41,263,419,860 33,568,776,518

Other Commitments

Documentary Credits And Short Term Trade Related Transactions - -

Forward Assets Purchased And Forward Deposits Placed - -
Undrawn Note Issuance And Revolving Underwriting Facilities - -
Undrawn Formal Standby Facilities, Credit Lines And Other Commitments - -
Total - -

Total Off -Balance Sheet Items Including Contingent Liabilities 41,263,419,860 33,568,776,518

The annexed notes (1 to 51) form an integral part of these financial statements.

Managing Director Director Director Chairman

Signed as per annexed report on even date.

A. Qasem & Co. Hoda Vasi Chowdhury & Co.

Chartered Accountants Chartered Accountants

Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Consolidated Profit and Loss Account
For the year ended 31 December 2017

2017 2016
Notes
BDT BDT
Investments Income 23(a) 28,349,000,637 26,395,273,387
Profit Paid on Deposits 24 (19,861,215,970) (19,070,214,244)
Net Investment Income 8,487,784,667 7,325,059,143
Income from Investment in shares and securities 25(a) 153,831,865 (63,638,223)
Commission, Exchange and Brokerage 26(a) 852,960,954 502,152,520
Other Operating Income 27(a) 430,660,881 374,366,872
1,437,453,700 812,881,169
Total Operating Income 9,925,238,367 8,137,940,312
Less: Operating Expenses
Salary and Allowances 28(a) 2,686,581,629 2,243,307,464
Rent, Taxes, Insurances, Electricity etc. 29(a) 577,123,424 517,208,547
Legal Expenses 30(a) 8,707,822 6,424,741
Postage, Stamps, Telecommunication etc. 31 (a) 87,885,846 86,564,139
Stationery, Printings, Advertisements etc. 32 (a) 183,036,565 190,250,957
Managing Director's Salary and Fees 33 10,994,714 10,395,403
Directors' Fees & Expenses 34 (a) 1,897,800 2,855,400
Shariah Supervisory Committee's Fees & Expenses 35 64,000 184,000
Auditor's Fees 36 1,006,250 874,000
Depreciation & Repair of Bank's Assets 37 (a) 455,060,772 424,306,180
Zakat Expenses 71,588,157 50,248,608
Other Expenses 38 (a) 954,194,270 876,696,467
Total Operating Expenses 5,038,141,249 4,409,315,906
Profit before Provision and Tax 4,887,097,118 3,728,624,406
Provisions for Investments including off-B/S items 13.2 (a) 2,020,390,197 1,285,643,508
Provisions for Diminution in Value of Investment in Shares 22,626,046 (112,735,890)
Provision for Other Assets 30,280,221 -
Total Provisions 2,073,296,464 1,172,907,618
Total Profit before Taxes 2,813,800,654 2,555,716,788
Provision for Current Tax 1,477,469,778 1,145,386,558
Deferred Tax Income 39 (53,595,024) -
Total Provisions for Tax 1,423,874,754 1,145,386,558
Net Profit after Tax 1,389,925,900 1,410,330,230
Retained Earnings from Previous Year 793,919,776 555,733,247
2,183,845,676 1,966,063,476
Appropriations:
Statutory Reserve 538,326,252 509,881,316
Other Reserve 103,595,024 317,233,000
Bonus Share Issued 339,436,940 -
Cash Dividend Paid 339,436,944 342,409,037
Non-controlling Interest 39,582,013 2,620,348
1,360,377,173 1,172,143,701
Retained Earnings Carried Forward 823,468,503 793,919,776

Earnings Per Share (EPS) 40 (a) 1.89 1.97

The annexed notes (1 to 51) form an integral part of these financial statements.

Managing Director Director Director Chairman

Signed as per annexed report on even date.

A. Qasem & Co. Hoda Vasi Chowdhury & Co.

Chartered Accountants Chartered Accountants
Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Consolidated Cash Flow Statement
For the year ended 31 December 2017

2017 2016
Notes
BDT BDT
A. Cash Flows from Operating Activities
Investment Income Receipt 27,674,362,458 25,480,515,560
Profit paid on Deposits (16,840,241,164) (16,248,205,289)
Dividend Receipts 7,427,987 10,152,597
Fees & Commission Receipt 852,960,954 502,152,520
Payment to Employees (2,697,576,343) (2,253,702,867)
Payment to Suppliers (267,097,749) (266,202,449)
Income Tax Paid (1,245,487,859) (963,003,411)
Receipts from Other Operating Activities 41 (a) 460,378,568 372,243,570
Payment for Other Operating Activities 42 (a) (1,632,546,936) (1,493,453,220)
Operating Profit before changes in Operating Assets & Liabilities 6,312,179,916 5,140,497,011
Increase/(Decrease) in Operating Assets & Liabilities
Investments to Customers (46,967,711,679) (40,601,612,469)
Other Assets 43 (a) (702,807,215) 1,455,357,056
Deposits Received from Customers 22,126,146,702 42,548,083,074
Other Liabilities 44 (a) 560,867,269 (317,205,543)
Cash Generated from Operating Assets & Liabilities (24,983,504,923) 3,084,622,119

Net Cash Inflow/(Outflow) from Operating Activities (18,671,325,007) 8,225,119,130

B. Cash Flows from Investing Activities

Investment in Shares and Securities (1,243,698,020) (1,514,977,637)
Purchase of Property, Plant and Equipment (421,621,339) (549,609,940)
Sale of Property, Plant and Equipment 6,202,917 2,123,302
Net Cash Inflow/(Outflow) from Investing Activities (1,659,116,442) (2,062,464,275)

C. Cash Flows from Financing Activities

Receipt/(Payment) of Mudaraba Subordinated Bond 4,000,000,000 (500,000,000)
Increase/(Decrease) in Placement from Banks & FlS 8,770,424,458 (471,083,098)
Dividend Paid in Cash (339,436,944) (342,409,037)
Net Cash Inflow/(Outflow) from Financing Activities 12,430,987,514 (1,313,492,135)

D. Net Increase/(Decrease) of Cash & Cash Equivalents (A+B+C) (7,899,453,935) 4,849,162,720

Effect of Exchange Rate Change on Cash & Cash Equivalents - -
E. Opening Cash & Cash Equivalents 47,321,603,653 42,472,440,933
F. Closing Cash & Cash Equivalents (D+E) 39,422,149,718 47,321,603,653
The above closing Cash and Cash Equivalents include:
Cash in Hand (Including Foreign Currencies) 1,691,479,252 1,709,030,260
Balance with Bangladesh Bank and its Agent Bank(s), Other Banks, FIS
37,730,670,466 45,612,573,393
and Placement
39,422,149,718 47,321,603,653

The annexed notes (1 to 51) form an integral part of these financial statements.

Managing Director Director Director Chairman

Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2017
Assets Reval. Non-controlling
Paid-up Capital Statutory Reserve Other Reserve Retained Earnings Total
Particulars Reserve Interest
BDT BDT BDT BDT BDT BDT BDT

Balance as on 01 January 2017 6,788,738,880 2,412,128,110 402,850,965 362,198,654 793,919,776 300,600,194 11,060,436,579
Changes in Accounting Policy - - - - - - -
Restated Balance 6,788,738,880 2,412,128,110 402,850,965 362,198,654 793,919,776 300,600,194 11,060,436,579
Net Profit for the Year - - - - 1,389,925,900 - 1,389,925,900
Cash Dividends - - - (339,436,944) - (339,436,944)
Bonus Share Issued 339,436,940 - - - (339,436,940) - -
Transfer to Statutory Reserve - 538,326,252 - - (538,326,252) - -
Transfer to Other Reserve - - 103,595,024 - (103,595,024) - -
Revaluation Reserve to Other Reserve - - 10,061,074 (10,061,074) - - -
Capital Increase in Subsidiary - - - - - - -
Non-controlling Interest - - - - (39,582,013) 39,582,013 -
Total Group Shareholders' Equity as on 31
7,128,175,820 2,950,454,362 516,507,063 352,137,580 823,468,503 340,182,207 12,110,925,534
December 2017

FOR THE YEAR ENDED 31 DECEMBER 2016

Balance as on 01 January 2016 6,788,738,880 1,902,246,794 75,556,891 372,259,728 555,733,247 297,979,846 9,992,515,386
Net Profit for the Year - - - - 1,410,330,230 - 1,410,330,230
Cash Dividends - - - - (342,409,037) - (342,409,037)
Transfer to Statutory Reserve - 509,881,316 - - (509,881,316) - -
Transfer to Other Reserve - - 317,233,000 - (317,233,000) - -
Revaluation Reserve to Other Reserve - - 10,061,074 (10,061,074) - - -
Capital Increase in Subsidiary - - - - - - -
Non-controlling Interest - - - - (2,620,348) 2,620,348 -
Total Group Shareholders' Equity as on 31
6,788,738,880 2,412,128,110 402,850,965 362,198,654 793,919,776 300,600,194 11,060,436,579
December 2016

The annexed notes (1 to 51) form an integral part of these financial statements

Managing Director Director Director Chairman

Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Balance Sheet
As at 31 December 2017

2017 2016
Notes
BDT BDT

PROPERTY AND ASSETS

Cash 3 25,177,115,132 32,300,509,774
In hand (including foreign currencies) 1,691,454,610 1,709,021,120
Balance with Bangladesh Bank and its Agent Bank(s) 23,485,660,522 30,591,488,654
(including foreign currencies)
Balance with other Banks and Financial Institutions 4.1 636,314,862 509,768,382
In Bangladesh 77,767,519 77,509,441
Outside Bangladesh 558,547,343 432,258,941

Placement with Banks & Other Financial Institutions 4.2 13,603,700,000 14,509,000,000

Investments in Shares & Securities 5 15,908,894,701 14,786,490,432

Government 15,000,000,000 13,900,000,000
Others 908,894,701 886,490,432

Investments 6 273,593,618,710 226,065,271,502

General Investment etc. 6.A 272,938,959,885 225,520,627,072
Bills Purchased and Negotiated 6.B 654,658,825 544,644,430
Fixed Assets Including Premises, Furniture & Fixtures and
7 3,464,011,431 3,430,730,939
Intangible Assets
Other Assets 8 11,330,679,178 9,601,558,631
Non Banking Assets 9 25,145,280 25,145,280
Total Assets 343,739,479,294 301,228,474,940

LIABILITIES AND CAPITAL

Liabilities
Placement from Banks & Other Financial Institutions 10 9,481,539,506 711,115,048

Deposits and Other Accounts 11 299,120,844,464 274,252,894,129

Al-Wadia Current Deposits and Other Deposit Accounts 11.1 20,653,289,680 15,974,398,677
Bills Payable 11.2 1,805,435,584 1,477,937,977
Mudaraba Savings Deposits 11.3 26,626,552,818 18,421,853,013
Mudaraba Term Deposits 11.4 197,765,021,849 188,431,972,412
Other Mudaraba Deposits 11.5 52,270,544,533 49,946,732,050
Mudaraba Subordinated Bond 12 5,382,000,000 1,382,000,000
Other Liabilities 13 18,083,419,191 14,180,498,968
Total Liabilities 332,067,803,161 290,526,508,145
Capital/Shareholders' equity
Paid-up Capital 14.1 7,128,175,820 6,788,738,880
Statutory Reserve 15 2,950,454,362 2,412,128,110
Other Reserve 16 516,507,063 402,850,965
Assets Revaluation Reserve 17 352,137,580 362,198,654
Retained Earnings 18 724,401,308 736,050,186
Total Shareholders' Equity 11,671,676,133 10,701,966,795
Total Liabilities and Shareholders' Equity 343,739,479,294 301,228,474,940
 FIRST SECURITY ISLAMI BANK LIMITED
Balance Sheet
As at 31 December 2017

2017 2016
Notes
BDT BDT

OFF- BALANCE SHEET ITEMS

Contingent Liabilities
Acceptances and Endorsements 27,687,184,862 21,750,937,662
Letters of Guarantee 20 6,079,859,518 6,317,021,800
Irrevocable Letters of Credit 21 6,125,414,109 4,335,806,257
Bills for Collection 22 1,370,961,371 1,165,010,799
Other Contingent Liabilities - -
Total 41,263,419,860 33,568,776,518

Other Commitments

Documentary Credits And Short Term Trade Related Transactions - -

Forward Assets Purchased And Forward Deposits Placed - -
Undrawn Note Issuance And Revolving Underwriting Facilities - -
Undrawn Formal Standby Facilities, Credit Lines And Other Commitments - -
Total - -

Total Off -Balance Sheet Items Including Contingent Liabilities 41,263,419,860 33,568,776,518

The annexed notes (1 to 51) form an integral part of these financial statements.

Managing Director Director Director Chairman

Signed as per annexed report on even date.

A. Qasem & Co. Hoda Vasi Chowdhury & Co.

Chartered Accountants Chartered Accountants

Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Profit and Loss Account
For the year ended 31 December 2017
2017 2016
Notes
BDT BDT
Investments Income 23 28,222,505,447 26,251,715,799
Profit Paid on Deposits 24 (19,861,215,970) (19,070,214,244)
Net Investment Income 8,361,289,477 7,181,501,555
Income from Investment in Shares and Securities 25 135,607,034 27,074,196
Commission, Exchange and Brokerage 26 796,088,756 444,989,228
Other Operating Income 27 427,496,031 371,322,122
1,359,191,821 843,385,546
Total Operating Income 9,720,481,298 8,024,887,101
Less: Operating Expenses
Salary and Allowances 28 2,668,066,319 2,227,271,077
Rent, Taxes, Insurances, Electricity etc. 29 571,609,664 512,068,869
Legal Expenses 30 7,734,922 6,277,241
Postage, Stamps, Telecommunication etc. 31 87,507,300 86,381,890
Stationery, Printings, Advertisements etc. 32 182,646,021 189,932,230
Managing Director's Salary and Fees 33 10,994,714 10,395,403
Directors' Fees & Expenses 34 1,422,800 2,180,400
Shariah Supervisory Committee's Fees & Expenses 35 64,000 184,000
Auditor's Fees 862,500 730,250
Depreciation & Repair of Bank's Assets 37 444,388,352 411,694,970
Zakat Expenses 71,588,157 50,248,608
Other Expenses 38 909,663,916 801,464,578
Total Operating Expenses 4,956,548,665 4,298,829,516
Profit before Provision and Tax 4,763,932,633 3,726,057,585
Provisions for Investments including off-B/S items 13.2 2,015,678,593 1,276,300,000
Provisions for Diminution in Value of Investment in Shares 26,342,561 (99,648,997)
Provision for Other Assets 30,280,221 -
Total Provisions 2,072,301,375 1,176,651,003
Total Profit before Taxes 2,691,631,258 2,549,406,582
Provision for Current Tax 1,436,080,000 1,144,424,000
Deferred Tax Income 39 (53,595,024) -
Total Provisions for Tax 1,382,484,976 1,144,424,000
Net Profit after tax 1,309,146,282 1,404,982,582
Retained Earnings from Previous Year 736,050,186 500,590,957
2,045,196,468 1,905,573,539
Appropriations:
Statutory Reserve 538,326,252 509,881,316
Other Reserve 103,595,024 317,233,000
Bonus Share Issued 339,436,940 -
Cash Dividend 339,436,944 342,409,037
1,320,795,160 1,169,523,353
Retained Earnings Carried Forward 724,401,308 736,050,186

Earnings Per Share (EPS) 40 1.84 1.97

The annexed notes (1 to 51) form an integral part of these financial statements.

Managing Director Director Director Chairman

Signed as per annexed report on even date.

A. Qasem & Co. Hoda Vasi Chowdhury & Co.

Chartered Accountants Chartered Accountants

Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Cash Flow Statement
For the year ended 31 December 2017

2017 2016
Notes
BDT BDT
A. Cash Flows from Operating Activities
Investment Income Receipt 27,547,867,268 25,336,957,972
Profit paid on Deposits (16,840,241,164) (16,248,205,289)
Dividend Receipts 7,427,987 10,152,597
Fees & Commission Receipt 796,088,756 444,989,228
Payment to Employees (2,679,061,033) (2,237,666,480)
Payment to Suppliers (256,425,329) (253,591,239)
Income Tax Paid (1,244,525,301) (963,003,411)
Receipts from Other Operating Activities 41 438,988,887 369,198,820
Payment for Other Operating Activities 42 (1,578,732,852) (1,409,287,228)
Operating Profit before changes in Operating Assets & Liabilities 6,191,387,219 5,049,544,970
Increase/(Decrease) in Operating Assets & Liabilities
Investments to Customers (47,045,229,474) (40,336,060,916)
Other Assets 43 (444,358,467) 714,794,959
Deposits Received from Customers 22,112,782,274 42,661,882,265
Other Liabilities 44 390,069,433 (287,662,400)
Cash Generated from Operating Assets & Liabilities (24,986,736,234) 2,752,953,908

Net Cash Inflow/(Outflow) from Operating Activities (18,795,349,015) 7,802,498,878

B. Cash Flows from Investing Activities
Investment in Shares and Securities (1,122,404,269) (1,722,428,251)
Purchase of Property, Plant and Equipment (421,585,309) (538,803,508)
Sale of Property, Plant and Equipment 6,202,917 2,123,302
Net Cash Inflow/(Outflow) from Investing Activities (1,537,786,661) (2,259,108,457)
C. Cash Flows from Financing Activities
Receipt/(Payment) of Mudaraba Subordinated Bond 4,000,000,000 (500,000,000)
Increase/(Decrease) in Placement from Banks & FlS 8,770,424,458 147,854,724
Dividend Paid in Cash (339,436,944) (342,409,037)
Net Cash Inflow/(Outflow) from Financing Activities 12,430,987,514 (694,554,313)

D. Net Increase/(Decrease) of Cash & Cash Equivalents (A+B+C) (7,902,148,162) 4,848,836,108

Effect of Exchange Rate Change on Cash & Cash Equivalents - -
E. Opening Cash & Cash Equivalents 47,319,278,156 42,470,442,048
F. Closing Cash & Cash Equivalents (D+E) 39,417,129,994 47,319,278,156
The above closing Cash and Cash Equivalents include:
Cash in Hand (Including Foreign Currencies) 1,691,454,610 1,709,021,120
Balance with Bangladesh Bank and its Agent Bank(s), Other Banks, FIS and
37,725,675,384 45,610,257,036
Placement
39,417,129,994 47,319,278,156

The annexed notes (1 to 51) form an integral part of these financial statements.

Managing Director Director Director Chairman

Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Statement of Changes In Equity
FOR THE YEAR ENDED 31 DECEMBER 2017
Assets Reval.
Paid-up Capital Statutory Reserve Other Reserve Retained Earnings Total
Particulars Reserve
BDT BDT BDT BDT BDT BDT

Balance as on 01 January 2017 6,788,738,880 2,412,128,110 402,850,965 362,198,654 736,050,186 10,701,966,795

Changes in Accounting Policy - - - - - -
Restated Balance 6,788,738,880 2,412,128,110 402,850,965 362,198,654 736,050,186 10,701,966,795
Net Profit for the Year - - - - 1,309,146,282 1,309,146,282
Cash Dividend - - - - (339,436,944) (339,436,944)
Bonus Share Issued 339,436,940 - - - (339,436,940) -
Transfer to Statutory Reserve - 538,326,252 - - (538,326,252) -
Transfer to Other Reserve - - 103,595,024 - (103,595,024) -
Revaluation Reserve transfer to Other Reserve - - 10,061,074 (10,061,074) - -
Total Shareholders' Equity as on 31 December
7,128,175,820 2,950,454,362 516,507,063 352,137,580 724,401,308 11,671,676,134
2017

FOR THE YEAR ENDED 31 DECEMBER 2016

Balance as on 01 January 2016 6,788,738,880 1,902,246,794 75,556,891 372,259,728 500,590,957 9,639,393,249
Net Profit for the Year - - - - 1,404,982,582 1,404,982,582
Cash Dividends - - - - (342,409,037) (342,409,037)
Transfer to Statutory Reserve - 509,881,316 - - (509,881,316) -
Transfer to Other Reserve - - 317,233,000 - (317,233,000) -
Revaluation Reserve transfer to Other Reserve - - 10,061,074 (10,061,074) - -
Total Shareholders' Equity as on 31 December
6,788,738,880 2,412,128,110 402,850,965 362,198,654 736,050,186 10,701,966,795
2016

The annexed notes (1 to 51) form an integral part of these financial statements.

Managing Director Director Director Chairman

Dated, Dhaka
Wednesday, April 25, 2018
 FIRST SECURITY ISLAMI BANK LIMITED
Liquidity Statement ( Assets and Liability Maturity Analysis)
As at 31 December 2017

Up to 01 01-03 03-12 01-05 More than

Total 2017 Total 2016
Particulars Month Months Months Years 05 years
BDT BDT BDT BDT BDT BDT BDT
Assets

Cash in Hand 6,234,015,132 - - - 18,943,100,000 25,177,115,132 32,300,509,774

Balance with other Banks & FIs and
7,941,825,416 6,298,189,446 - - - 14,240,014,862 15,023,632,409
Placement
Investments in Shares and Securities 3,557,400,000 7,100,025,634 4,849,899,617 400,000,000 1,569,450 15,908,894,701 14,786,490,432
Investments 44,140,044,437 41,887,312,508 77,254,261,765 64,419,012,424 45,892,987,576 273,593,618,710 226,065,271,502
Fixed Assets including Premises,
- - - 1,855,012,587 1,608,998,844 3,464,011,431 3,430,730,939
Furniture and Fixtures
Other Assets - 3,179,221,296 2,663,600,000 3,763,245,335 1,724,612,547 11,330,679,178 9,596,694,604
Non-banking Assets - - - 25,145,280 - 25,145,280 25,145,280
Total Assets 61,873,284,985 58,464,748,884 84,767,761,382 70,462,415,626 68,171,268,417 343,739,479,294 301,228,474,940

Liabilities

Placement from Banks & Other Financial

7,000,000,000 1,000,000,000 - 1,481,539,506 - 9,481,539,506 711,115,048
Institutions
Deposits and Other Accounts 46,717,523,846 49,501,026,451 80,631,723,125 65,030,736,589 57,239,834,453 299,120,844,464 274,252,894,129
Mudaraba Subordinated Bond 382,000,000 - 118,000,000 3,082,000,000 1,800,000,000 5,382,000,000 1,382,000,000
Other Liabilities 3,599,600,000 4,152,423,547 2,591,243,500 276,339,903 7,463,812,240 18,083,419,190 14,180,498,968
Total Liabilities 57,699,123,846 54,653,449,998 83,340,966,625 69,870,615,998 66,503,646,693 332,067,803,160 290,526,508,145

Net Liquidity Gap 4,174,161,139 3,811,298,886 1,426,794,757 591,799,628 1,667,621,724 11,671,676,134 10,701,966,795

Managing Director Director Director Chairman

Dated, Dhaka
Wednesday, April 25, 2018
 First Security Islami Bank Ltd.
Notes to the Financial Statements
For the year ended and as at 31 December 2017

1. Corporate Information:

1.1 Status of the Bank

The Bank was incorporated as a Public Limited Company in Bangladesh on 29 August 1999 under Companies Act
1994 to carry on banking business. The Bank converted its banking operation into Islamic Banking based on Islamic
Shari’ah from traditional banking operation on 01 January 2009 after obtaining approval from honorable High
Court, Ministry of Finance and Bangladesh Bank. It obtained permission from Bangladesh Bank on 22 September
1999 to commence its business. The Bank is one of the interest-free Shari’ah based banks in the country and its
modus-operandi are substantially different from other conventional banks. The Bank went for public issue on 20
July 2008 and its shares are listed with Dhaka Stock Exchange (DSE) Ltd. and Chittagong Stock Exchange (CSE) Ltd.
Presently the Bank carries banking activities through its one hundred & sixty eight (168) branches in the country.
The Bank had no overseas branches as at December 31, 2017.

The registered office of the Bank is located at 23, Dilkusha C/A, Dhaka-1000.
1.2 Subsidiaries:

1.2.1 First Security Islami Capital & Investment Limited

First Security Islami Capital & Investment Limited, a private company limited by shares has been formed and
registered under the Companies Act, 1994 with the Registrar of Joint Stock Companies, Dhaka vide certificate of
incorporation no. C-88567/10 dated 02 December [Link] Securities and Exchange Commission vide its
certificate No. MB-65/2011 dated 27 March 2011 has accorded approval to the bank for a full-fledged Merchant
Banking operation under the Securities and Exchange Commission Act, 1993. First Security Islami Bank Ltd. holds
51% shares and 49% shares are held by other individuals. The company’s reporting period is January to December.
1.2.2 First Security Islami Exchange Italy S.R.L
First Security Islami Exchange Italy S.R.L has been formed as per approval of Bangladesh Bank vide their Letter No.
BRPD (M) 204/17/2009-95 dated 08 September 2009 for opening an owned exchange house. The main activities of
the exchange house are to carry on the remittance business and to undertake and participate in transactions
activities and operations commonly carried on or undertaken by remittance and exchange houses.

1.3 Principal Activities

1.3.1 Commercial banking services

All kinds of commercial banking services are provided by the Bank to the customers following the principles of
Islamic Shari’ah, the provisions of the Bank Company Act 1991 and Bangladesh Bank’s directives.

The bank renders commercial banking services to all types of customers. The range of services offered by the bank
includes accepting deposit, making investment, purchasing bills, conducting domestic and international money
transfer, carrying out foreign exchange transactions in addition to international money transfers, and offering
other customer services such as safe keeping, collections and issuing guarantees, acceptances and letters of credit.
Core business of the bank includes deposit mobilization and investing activities comprising short-term, long-term,
import and export financing. Investment activities are extended to different sectors of the economy that could be
grouped into several sectors including Rural & agriculture, Garments & Textiles, Jute, Cement & Bricks, Tannery,
Steel & Engineering, Food & Beverage, Chemical & Pharmaceuticals, Printing & Packaging, Glass & Ceramics and
Miscellaneous.
At a glance, the principal activities of the bank are:
(a) To facilitate and handle all kinds of commercial banking services to its customers authorized by Bangladesh
Bank.
(b) To handle the export and import trade of Bangladesh
(c) To take part in international banking etc.

1.3.2 Mobile financial services-“ First Pay Sure Cash”

FSIBL has launched mobile banking services from 2012 under the name of “First Pay Sure Cash”. First Security
Islami Bank offers different services through the Mobile banking services that include free and quick opening of
customer account, deposit and withdrawal of cash money, fund transfer from one account to another, receiving
remittance from abroad, knowing account balance and mini-statement, giving and receiving salary, mobile
recharge and payment of utility bill, merchant bill payment etc.

2. Significant Accounting Policies

2.1 Basis of Presentation of Financial Statements

The Financial Statements, namely, Balance Sheet, Profit and Loss Account, Cash Flow Statements, Statements of
changes in Equity, Statement of Liquidity Analysis and relevant notes to the financial statements and disclosures
thereto, of the Bank are prepared under historical cost convention on a going concern basis.
2.2 Statements of Compliance
The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC)
is to be formed and it is to issue financial reporting standards for public interest entities such as banks. The Bank
Companies Act 1991 has been amended to require banks to prepare their financial statements under such financial
reporting standards. The FRC has been formed but yet to issue any financial reporting standards as per the
provisions of the FRA and hence Bangladesh Financial Reporting Standards (BFRS) as issued by the Institute of
Chartered Accountants of Bangladesh (ICAB) are still applicable.

Accordingly, the financial statements of the Bank continue to be prepared in accordance with Bangladesh Financial
Reporting Standards (BFRS) and the requirements of the Bank Companies Act 1991, the rules and regulations
issued by Bangladesh Bank, the Companies Act 1994, Securities and Exchange Rules 1987. In case any requirement
of the Bank Companies Act 1991, and provisions and circulars issued by Bangladesh Bank differ with those of BFRS,
the requirements of the Bank Companies Act 1991, and provisions and circulars issued by Bangladesh Bank shall
prevail.

The financial statements of the Bank are made up to December 31, 2017 and are prepared under the historical
cost convention on a going concern basis and in accordance with the “ First Schedule Section 38(4) of the Bank
Companies Act, 1991and Amendment 2013, BRPD Circular # 14 dated 25 June 2003, BRPD Circular # 15 dated 09
November 2009, Other Bangladesh bank Circulars, Bangladesh Accounting Standards and Bangladesh Financial
Reporting Standards, The Companies Act 1994, The Security and Exchange Rules 1987, Dhaka & Chittagong Stock
Exchanges listing regulations, Income Tax Ordinance 1984 and other laws and rules applicable in Bangladesh.
2.2.1 Compliance of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting standards
(BFRS)
BAS/BFRS
In compliance with Status
No.
Presentation of Financial Statements 1 Applied to the context of compliance with
BRPD Circular # 15, Dated November 09,
2009
Inventories 2 N/A
Statement of Cash Flows 7 Applied
Accounting Policies, Changes in Accounting Estimates 8 Applied
and Errors
 BAS/BFRS
In compliance with Status
No.
Events After the Reporting Period 10 Applied
Construction Contracts 11 N/A
Income Taxes 12 Applied
Property, Plant and Equipment 16 Applied
Leases 17 N/A
Revenue 18 Applied
Employee Benefits 19 Applied
Accounting for Government Grants and Disclosure of 20 N/A
Government Assistance
The Effects of Changes in Foreign Exchange Rates 21 Applied
Borrowing Costs 23 N/A
Related Party Disclosures 24 Applied
Accounting and Reporting by Retirement Benefit 26 N/A
Plans
Consolidated and Separate Financial Statements 27 Applied
Investments in Associates 28 N/A
Interests In Joint Ventures 31 N/A
Financial Instruments: Presentation 32 Applied to the context of compliance with
BRPD Circular # 15, Dated November 09,
2009, DOS Circular # 5, Dated January 28,
2009
Earnings Per Share 33 Applied
Interim Financial Reporting 34 Applied
Impairment of Assets 36 Applied
Provisions, Contingent Liabilities and Contingent 37 Applied to the context of compliance with
Assets BRPD Circular # 5, Dated June 05, 2006
and BRPD Circular # 14 Dated September
14, 2012

Intangible Assets 38 Applied

Financial Instruments: Recognition and 39 Applied to the context of compliance with
Measurement BRPD Circular # 15, Dated November 9,
2009, DOS Circular # 5, Dated May 26,
2008 and DOS Circular # 5, Dated January
28, 2009

Investment Property 40 N/A

Agriculture 41 N/A
In compliance with Status
First-time Adoption of International Financial 1 N/A
Reporting Standards
Share-based Payment 2 N/A
Business Combinations 3 N/A
Insurance Contracts 4 N/A
Non-current Assets Held for Sale and Discontinued 5 N/A
Operations
Exploration for and Evaluation of Mineral Assets 6 N/A
 BAS/BFRS
In compliance with Status
No.
Financial Instruments: Disclosures 7 Applied to the context of compliance with
core risk management guideline of
Bangladesh Bank.

Operating Segments 8 Applied

Consolidated Financial Statements 10 Applied
Joint Arrangements 11 N/A
Disclosure of Interests in other Entities 12 Applied
Fair Value Measurement 13 Applied
Regulatory Deferral Accounts 14 N/A
Revenue from Contracts with Customers 15 Will be replaced of BAS 11 & 18 on or
before January 01, 2018.
*N / A = Not Applicable

* In order to comply with certain specific rules and regulations of the local Central Bank (Bangladesh Bank) which
are different to BAS /BFRS, some of the requirements specified in these BAS / BFRSs are not applied. Refer below
for such recognition and measurement differences that are most relevant and material to the Bank.

** This Standard regards a retirement benefit plan as a reporting entity separate from the employers of the
participants in the plan. Therefore, it is not applicable for the Bank’s annual report as it is the employer and not the
retirement benefit plan itself.

*** The objective of BAS 34 is to prescribe the minimum content of an interim financial report and to prescribe the
principles for recognition and measurement in complete or condensed financial statements for an interim period
and hence it is not applicable for annual financial statements. However, the Bank is not a listed entity in Dhaka and
Chittagong Stock Exchanges, but it is complying with BAS 34 regularly publishes the Interim Financial Report.

New and amended standards and interpretations

The Bank has consistently applied the accounting policies as set out in Note 2 to all periods presented in these
financial statements. The various amendments to standards, including any consequential amendments to other
standards, with the date of initial application of 1 January 2017 have been considered. However, these
amendments have not material impact on the financial statements of the Bank.

In December 2017, ICAB has decided to adopt IFRS replacing BFRS effective for annual periods beginning on or
after 1 January 2018. However, since currently issued BFRS have been adopted from IFRS without any major
modification, such changes would not have any material impact on financial statements.

A number of standards and amendments to standards are effective for annual periods beginning on or after 1
January 2018 and earlier application is permitted. However, the Bank has not early applied the following new
standards in preparing these financial statements.

a. BFRS 9 Financial Instruments

BFRS 9, published in July 2014, replaces the existing guidance in BAS 39 Financial Instruments: Recognition and
Measurement. BFRS 9 includes revised guidance on the classification and measurement of the financial
instruments, a new expected credit loss model for calculating impairment of financial assets, and the new general
hedge accounting requirements. It also carries forward the guidance on recognition and de recognition of financial
instruments from BAS 39. BFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018,
with early adoption permitted. As per the Bank's assessment, any material impact of BFRS 9 would be primarily on
calculation of impairment provision. However, as Bangladesh Bank has not issued any circular to revise its current
impairment, classification and measurement policies to align with BFRS 9 the Bank is unable to quantify any
potential impact on its financial statements.
b. BFRS 15 Revenue from Contracts with Customers
BFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is
recognized. It replaces existing recognition guidance, including BAS 18 Revenue, BAS 11 Construction Contracts
and BFRI 13 Customer Loyalty Programs. BFRS 15 is effective for annual reporting periods beginning on or after 1
January 2018, with early adoption permitted. Based on preliminary assessment the Bank has determined that BFRS
15 has no material impact on its financial statements.

c. IFRS 16 Leases

IFRS 16, issued in January 2016 replaces existing leases guidance and effective for reporting period beginning on or
after 1 January 2019. It will result in almost all leases being recognized on the balance sheet, as the distinction
between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased
item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value
leases. The accounting for lessors will not significantly change. The Bank has not yet assessed any potential impact
of IFRS 16 on its financial statements.

d. IFRS 17 Insurance Contracts

IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning on or after 1 January 2021. IFRS
17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts
within the scope of the standard. The objective of IFRS 17 is to ensure that an entity provides relevant information
that faithfully represents those contracts. The Bank has not yet assessed in potential impact of IFRS 17 on its
financial statements.

As such the Bank has departed from certain contradictory requirements of BFRSs in order to comply with the rules
and regulations of Bangladesh Bank which are disclosed below:

Difference between BAS / BFRS and Bangladesh Bank Regulation:

The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC)
is to be formed and it is to issue financial reporting standards for public interest entities such as banks. The Bank
Companies Act 1991 has been amended to require banks to prepare their financial statements under such financial
reporting standards. The FRC has been formed but yet to issue any financial reporting standards as per the
provisions of the FRA and hence Bangladesh Financial Reporting Standards (BFRS) as issued by the Institute of
Chartered Accountants of Bangladesh (ICAB) are still applicable.

Accordingly, the financial statements of the Bank continue to be prepared in accordance with Bangladesh Financial
Reporting Standards (BFRS) and the requirements of the Bank Companies Act 1991, the rules and regulations
issued by Bangladesh Bank, the Companies Act 1994. In case any requirement of the Bank Companies Act 1991,
and provisions and circulars issued by Bangladesh Bank differ with those of BFRS, the requirements of the Bank
Companies Act 1991, and provisions and circulars issued by Bangladesh Bank shall prevail. Material deviations
from the requirements of BFRS are as follows:

i) Presentation of financial statements

BFRS: As per BAS 1 financial statements shall comprise statement of financial position, comprehensive income
statement, changes in equity, cash flows statement, adequate notes comprising summary of accounting policies
and other explanatory information. As per para 60 of BAS 1, the entity shall also present current and non-current
assets and current and non-current liabilities as separate classifications in its statement of financial position.
Bangladesh Bank: The presentation of the financial statements in prescribed format (i.e. balance sheet, profit and
loss account, cash flows statement, changes in equity, liquidity statement) and certain disclosures therein are
guided by the ‘First Schedule’ (section 38) of the Bank Company Act 1991 (amendment upto 2013) and BRPD
circular no. 14 dated 25 June 2003 and subsequent guidelines of BB. In the prescribed format there is no option to
present assets and liabilities under current and non-current classifications.
ii) Investment in shares and securities

BFRS: As per requirements of BAS 39 investment in shares and securities generally falls either under “at fair value
through profit and loss account” or under “available for sale” where any change in the fair value (as measured in
accordance with BFRS 13) at the year-end is taken to profit and loss account or revaluation reserve respectively.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted
shares are revalued at the year end at market price and as per book value of last audited balance sheet
respectively. Provision should be made for any loss arising from diminution in value of investment; otherwise
investments are recognized at cost.

iii) Provision on investments and off-balance sheet exposure

BFRS: As per BAS 39 an entity should start the impairment assessment by considering whether objective evidence
of impairment exists for financial assets that are individually significant. For financial assets that are not
individually significant, the assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: As per BRPD circular No.14 dated 23 September 2012, BRPD circular No. 19 dated 27 December
2012 and BRPD circular No. 05 dated 29 May 2014 a general provision at 0.25% to 5% under different categories of
unclassified loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also
provision for sub-standard loans, doubtful loans and bad losses has to be provided at 20%, 50% and 100%
respectively for Investments (loans and advances) depending on the duration of overdue. Again as per BRPD
circular no. 10 dated 18 September 2007 and BRPD circular no. 14 dated 23 September 2012, a general provision
at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not specifically in
line with those prescribed by BAS 39.

iv) Recognition of investment income in suspense

BFRS: Investment to customers are generally classified as Investment in General (loans and receivables) as per BAS
39 and Investment income is recognized through effective profit rate method over the term of the Investment.
Once an investment (loan) is impaired, investment income is recognized in profit and loss account on the same
basis based on revised carrying amount.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once an investment (loan) is classified,
investment income on such investments are not allowed to be recognized as income, rather the corresponding
amount needs to be credited to an investment income in suspense account, which is presented as liability in the
balance sheet.

v) Other comprehensive income

BFRS: As per BAS 1, Other Comprehensive Income (OCI) is a component of financial statements or the elements of
OCI are to be included in a single Other Comprehensive Income statement.

Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by
all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive
Income nor are the elements of Other Comprehensive Income allowed to be included in a single Other
Comprehensive Income (OCI) Statement. As such the Bank does not prepare the other comprehensive income
statement.

vi) Financial instruments – presentation and disclosure

In several cases Bangladesh Bank guidelines categories, recognize, measure and present financial instruments
differently from those prescribed in BAS 39. As such full disclosure and presentation requirements of BFRS 7 and
BAS 32 cannot be made in the financial statements.
vii) Financial guarantees

BFRS: As per BAS 39, financial guarantees are contracts that require an entity to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and
the initial fair value is amortized over the life of the financial guarantee. The financial guarantee liability is
subsequently carried at the higher of this amortized amount and the present value of any expected payment when
a payment under the guarantee has become probable. Financial guarantees are included within other liabilities.

Bangladesh Bank: As per BRPD 14, financial guarantees such as letter of credit, letter of guarantee will be treated
as off-balance sheet items. No liability is recognized for the guarantee except the cash margin.

viii) Cash and cash equivalent

BFRS: Cash and cash equivalent items should be reported as cash items as per BAS 7.

Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call on short notice’, treasury bills,
Bangladesh Bank bills and prize bond are not shown as cash and cash equivalents. Money at call and on short
notice presented on the balance sheet, and treasury bills, prize bonds are shown in investments.

ix) Non-banking assets

BFRS: No indication of Non-banking asset is found in any BFRS.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, there must exist a face items named Non-
banking asset.

x) Cash flow statement

BFRS: The Cash flow statement can be prepared using either the direct method or the indirect method. The
presentation is selected to present these cash flows in a manner that is most appropriate for the business or
industry. The method selected is applied consistently.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, cash flow is the mixture of direct and indirect
methods.

xi) Balance with Bangladesh Bank (Cash Reserve Requirement)

BFRS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day
operations as per BAS 7.

Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

xii) Presentation of intangible asset

BFRS: An intangible asset must be identified and recognized, and the disclosure must be given as per BAS 38.

Bangladesh Bank: There is no regulation for intangible assets in BRPD circular no. 14 dated 25 June 2003.

xiii) Investments net off provision

BFRS: Loans and advances/Investments should be presented net off provision.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 provision on loans and investments are
presented separately as liability and cannot be net-off against loans and advances.
2.3 Investments

a) Investments are stated in the Balance Sheet at the net amount excluding unearned income.
b) Investments and Provisions

As per BAS-39 impairment assessment should be done by considering whether any objective evidence of
impairment exists for financial assets that are individually significant. For financial assets that are not individually
significant, the assessment can be performed on an individual or collective (portfolio) basis.

However, provision for classified and unclassified investment is made on the basis of year and review by the
management and of instructions contained in Bangladesh Bank BCD Circular No.34 dated 16 November 1989, BCD
Circular No.20 dated 27 December 1994, BCD Circular No. 12 dated 04 September 1995, BRPD Circular No. 16
dated 06 December 1998, BRPD Circular No.09 dated 14 May 2001, BRPD Circular Letter No.10 dated 18
September 2007, BRPD Circular No.05 dated 29 April 2008, BRPD Circular Letter No.32 dated 10 October 2010,
BRPD Circular No.14 dated 23 September 2012, BRPD Circular No.19 dated 27 December 2012, BRPD Circular
No.05 dated 29 May 2013, BRPD Circular No.16 dated 18 November 2014 and BRPD Circular No.08 dated 02
August 2015 at the following rates:

Particulars Rate

General Provision on:

Contingent Liability/ Non Funded Business 1%

Unclassified Investment (All others Investment) 1%
Investment for Small and Medium Enterprise 0.25%
Investment for Professionals 2%
Investment for House Financing 2%
Investment for Consumer Financing 5%
Investment for Short Term Agriculture/Micro Investment 1%

Special Mention Account (Same as standard)

Specific Provision on:

Substandard Investment 20%
Doubtful Investment 50%
Bad/ Loss Investment 100%

As per BRPD Circular # 14 dated 23 September 2012, BRPD Circular # 19 dated 27 December 2012, and BRPD
Circular # 05 dated 29 May 2013 and BRPD Circular # 16 dated 18 November 2014 a general provision at 0.25% to
5% under different categories of unclassified investments (good/standard investments) has to be maintained
regardless of objective evidence of impairment. As per same circulars mentioned above we have to maintain
provision @ 20%, 50% and 100% for investments classified as sub-standard, doubtful and bad & loss category
respectively depending on the duration of overdue.

As per BRPD Circular # 10 dated 18 September 2007 and BRPD Circular No: 14 dated 23 September 2012, a general
provision at 1% is required to be provided for all off-balance sheet risk exposures.

c) When an investment is deemed to be uncollectible, it is written off against the related provision for
impairments. Subsequent recoveries of such investments are credited to the income statement.

d) Investment are normally written off, when there is no chance of recovery of these amounts in accordance with
BRPD Circular no. 2 dated 13 January 2003, BRPD Circular no. 15 dated 23 September 2012 and BRPD circular no.
13 dated November 07, 2013. A separate Investment Monitoring and Recovery Division (IMRD) have been set up at
the Head Office, which monitors investment recovery and legal action.
General Provision against all unclassified Credit Card loans under Consumer Financing: BRPD Circular No-12 dated
20 August, 2017. Provision for Short-term Agricultural and Micro-Credits: BRPD Circular No- 15 dated 27
September, 2017. Maintenance of general provision against the liabilities of LC(s) issued in favor of fast track
power plant projects: BRPD Circular Letter No. 01 dated 01 January, 2018.

2.4 Investment in Shares and Securities

a) The bank investment in different securities has been valued on 31.12.2017 as under:
Quoted Shares at Cost
Un-Quoted Shares (CDBL Share) at Cost
Bangladesh Govt. Islamic Bond at Cost

All investments in securities are initially recognized at cost, including acquisition charges associated with the
investment.

As per BRPD Circular # 15 dated 09 November 2009, investment in quoted shares and un-quoted shares are
revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision
should be made for any loss arising from diminution in value of investment. As such the company measures and
recognizes investment in are higher than the cost. However as per requirements of Bangladesh Accounting
Standard (BAS)-39, investment in shares falls either under “at fair value through profit and loss account” or under
“available for sale” where any change in the fair value at the year-end is taken to profit and loss account or
revaluation reserve respectively. FSIBL recognizes its investment in shares and securities and accounted for the
required provision for diminution in value of shares and securities in the profit and loss account as per BRPD
Circular # 15 dated 09 November 2009 issued by Bangladesh Bank.

b) Revaluation gains/losses on Government Securities

FSIBL is a Bank running on Islamic Sharia’h Principal. Hence, we do not participate in buying interest bearing
Government securities.
2.5 Recognition of Profit Suspense
Profit/Rent/Compensation Suspense Account
Profit/rent/compensation accrued on classified investments are suspended and accounted for as per BRPD Circular
# 15, dated 09 November 2009 issued by the Bangladesh Bank. Moreover, income that are irregular (doubtful) as
per Sharia’h are not included in the distributable income of the Bank.

Income on unclassified overdue investment of Bai-Murabaha and Bai-Muazzal is charged under compensation
account instead of showing as income of the Bank.
2.6 Other Comprehensive Income
As per BAS 1: Presentation of Financial Statements, Other Comprehensive Income (OCI) or components of OCI, as a
part of financial statements are to be included in a single Other Comprehensive Income statement. But as per
BRPD Circular # 15, Dated 09 November 2009, there is no statement of OCI and we follow the template for
reporting as per the Bangladesh Bank circular. If there is any component of OCI, it is shown in statement of
changes in equity.
2.7 Financial Instruments-Presentation and Disclosure
Financial instruments-presentation and disclosures are made in several cases as per guidelines and instructions of
Bangladesh Bank in particular and respective cases.

2.8 Financial Guarantees and Commitments

Financial guarantees such as letter of credit, letter of guarantee etc. are treated as off-balance sheet items as per
relevant BRPD Circular # 15, Dated November 09, 2009 whereas as per BAS 39, these should be treated as ‘Other
Liability’. No liability is recognized for the guarantee except the cash margin. We account for the financial
guarantees as per BRPD Circular # 15, Dated November 09, 2009 and liability for financial guarantees are not
recognized initially at their fair value and the fair value amortization of the same liability is not done either as per
BAS 39. So that the financial guarantees are not also carried at the higher of this amortized amount and the
present value of any expected payment when a payment under the guarantee has become probable.

Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are
translated at contracted rates. Contingent liabilities/commitments for letters of credit and letters of guarantee
denominated in foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance
sheet date. The outstanding balances for the same as at 31 December 2017 have been shown in the Balance Sheet
under Off-Balance Sheet items. Exchange rates with major foreign currencies as on 31 December 2017 were as:
Exchange Rate (TK)
Currency Name
US $ 82.7000
EURO 98.4874
ACU 82.7000
GBP 110.9751
CHF 83.9679
SAR 22.0510
CAD 65.4427

2.9 Cash and cash equivalent

As per BRPD Circular # 15, Dated November 09, 2009, cash and cash equivalents include notes and coins in hand,
balances lying with ATM, unrestricted balances held with Bangladesh Bank and its agent Bank, balance with other
Banks and Financial Institutions.

For the purpose of the cash flow statement of Banks and Similar Financial Institutions, cash and cash equivalents
comprise balances with less than 90 days maturity from the date of acquisition including: cash and balances with
central banks and other eligible bills, amounts due from other banks and dealing securities other than those which
are not available to finance the FSIBL day to day operations. However, presentation and reconciliation is done in
line with BRPD Circular # 15 and BAS 7.
2.10 Balance with Bangladesh Bank (Cash Reserve Requirement - CRR)
BAS 7 requires balance with Bangladesh Bank to be treated as other assets. However, as per BRPD circular no 15,
FSIBL treats balance with Bangladesh Bank as cash and cash equivalent though the amount is restricted for CRR
purpose and cannot be used in our day to day operational requirement.
2.11 Presentation of Intangible Asset
As per BAS 38: Intangible Assets, intangible assets are accounted for and amortized. Related necessary disclosures
for the intangible asset; i.e. computer software is given in note 7.
2.12 Off-balance sheet items
Contingent Liabilities
Any possible obligation that arises from past events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or
any present obligation that arises from past events but is not recognized because:
* It is not probable that an outflow of resources embodying economic benefits will be required to settle the
obligation; or
* The amount of the obligation cannot be measured with sufficient reliability.

As per BAS 37, Contingent liabilities are not recognized but disclosed in the financial statements unless the
possibility of an outflow of resources embodying economic benefits is reliably estimated. Contingent assets are not
recognized in the financial statements as this may results in the recognition of income which may never be
realized. However, the amount of cash margin is recognized as liability. As per BRPD Circular # 15, contingent
liabilities are disclosed as off balance sheet items.
2.13 Basis of Consolidation
The consolidated Financial Statements include the financial statements of First Security Islami Bank Limited and its
subsidiary company First Security Islami Capital & Investment Limited made up to the end of the December 31,
2017. The consolidated financial statements have been prepared in accordance with Bangladesh Financial
Reporting Standards 10-“Consolidated Financial Statements”. The Consolidated Financial Statements are prepared
for the common financial year ended 31 December 2017.

All intra-group transactions, balances, are eliminated at the time of consolidation. Profit and loss resulting from
transactions is also eliminated from consolidated financial statements.
2.14 Use of Estimates and Judgments
In the preparation of the financial statements management is required to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimate is revised and in any future periods affected.
2.15 Accruals & Deferrals
Accruals and deferrals have been made as per the guidance of BAS # 1: Presentation of Financial Statements. In
order to meet their objectives, financial statements except for Statement of Cash Flow and related information are
prepared on accrual basis of accounting. Under this basis, the effects of transactions and other events are
recognized when they occur (and not when cash or its equivalent is received or paid) and they are recorded in
accounts and reported in the financial statements of the periods to which they relate.

2.16 Revenue Recognition

The revenues during the period are recognized on an accrual basis, which comply with the conditions of revenue
recognition as provided in BAS # 18: Revenue.
2.16.1 Income from Investments
Profit on investments are recognized against the investment of fund under Mudaraba, Musharaka, Murabaha, Bai-
Muazzal and Hire Purchase etc. in line with related approved policy of the Bank. Profit on investment ceases to be
taken into income when such investment accounts are classified. It is then kept in compensation/rent suspense
account and the same is accounted for on cash basis as and when recovered or de-classified as per related BRPD
circular. Fees and commission income are recognized when it is earned.
2.16.2 Income from Investments in Securities

 Dividend income on shares is accounted for on actual basis when it is received.

 Gain on sale of shares and securities are recognized as income on actual basis except. Bangladesh
Govt. Mudaraba Bond.
 Profit on investment of Bangladesh Govt. Mudaraba Bond is recognized on accrual basis.

2.16.3 Commission Income

Commission and discount on Bills Purchased and Negotiated are recognized at the time of realization. Commission
charged to customers on letter of credit and guarantees are credited to income at the time of effecting the
transactions.
2.16.4 Profit paid and other expenses
In terms of the provision of BAS # 1: Presentation of Financial Statements, Profit paid on deposits and other
expenses are recognized on accrual basis.
2.16.5 Dividend Payments
Interim dividend is recognized when they are paid to shareholders. Final dividend is recognized when it is approved
by the shareholders. The proposed dividend for the year ended December 31 2017 has not been recognized as a
liability in the balance sheet in accordance with the BAS-10: Events after the Balance Sheet Date.
Dividend is deducted from the shareholders’ equity in the period in which the shareholders’ right to receive
payment is established.
2.17 Foreign Currency Transactions

2.17.1 Foreign Currency

Items included in the financial statements of each entity of the bank are measured using the currency of the
primary economic environment in which entity operates i.e. functional currency. The financial statements of the
bank are presented in Taka which is bank’s functional and presentation currency.
2.17.2 Foreign Currency Transaction
Foreign currency transactions are converted into equivalent Taka currency at the ruling exchange rates on the
respective dates of such transactions as per BAS-21. Assets and liabilities in foreign currencies as at 31 December
2017 have been converted into Taka currency at the average of the prevailing buying and selling rates of the
concerned foreign currencies at that date except "balances with other banks and financial institutions" which have
been converted as per directives of Bangladesh Bank vide its circular no BRPD(R) 717/2004-959 dated 21
November 2004.
2.17.3 Transaction gains and losses
As per provision of BAS-21: The Effects of Changes in Foreign Exchange Rates, foreign currency transactions are
translated into Taka at rates prevailing (contracting) on the dates of such transactions. The resulting exchange
transaction gains and losses arising through foreign currency buying and selling transactions effected on different
dates of the year have been adjusted by debiting /crediting exchange gain or loss account.

2.18 Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the
asset and settle the liability simultaneously.
2.19 Property, Plant and Equipment
All property and equipment are classified and grouped on the basis of their nature as required in as per provision
of BAS-16: Property, Plant and Equipment. The major categories of property and equipment held by the bank are
land and building, furniture and fixtures, office equipment, motor vehicles and books.

As guided in paragraph 30 of BAS-16 Property, Plant and Equipment: all property and equipment are stated at
historical cost less accumulated depreciation. The opening and closing carrying amounts of all property and
equipment are presented including the amount of additions, disposals and depreciation charged during the period
as required by paragraph 73 (a-e)of BAS-16. Maintenance expenses that does not increase the value of assets is
charged to profit & loss account.
2.19.1 Depreciation on Property, Plant and Equipment
As required in paragraph 43 of BAS 16 Property Plant and Equipment depreciation has been charged on property
and office equipment at the following rates using reducing balance method, except on motor vehicles and building
on which straight-line method is applied.

Nature of Assets Rate of Depreciation Method of Depreciation

Building 2.5% Straight Line Method
Furniture and Fixtures 10% Reducing Balance Method
Office Equipment 20% Reducing Balance Method
Vehicles 20% Straight Line Method
Books 20% Reducing Balance Method
Depreciation on additional to fixed assets is charged when the asset is available for use and the charge of
depreciation is ceased after the asset is sold out/disposed off/fully depreciated.

2.19.2 Revaluation
Land and building are revalued as per Bangladesh Accounting Standard (BAS)-16, ‘Property, Plant and Equipment’
as well as Bangladesh Bank BCD Circular Letter No. 12 & 18, dated 20 April 1993 & 15 June 1993, respectively and
BRPD Circular # 10 and 09, Dated 25 November 2002 and 31 December 2008 respectively. The Bank revalued its
land & building in the year 2012. Reserve is created by the sum of revaluation surplus and depreciation is charged
on the revalued assets except land as per the respective rate of depreciation.
2.20 Capital/Shareholders’ Equity

2.20.1 Authorized capital

Authorized capital is the maximum amount of share capital that the Bank is authorized by its Memorandum and
Articles of Association.
2.20.2 Paid up Capital
Paid up capital represents total amount of shareholder capital that has been paid in full by the ordinary
shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to vote at shareholders’ meetings. In the event of a winding-up of the Bank, ordinary shareholders rank
after all other shareholders and creditors and are fully entitled to any residual proceeds of liquidation. Details are
shown in Note-14.1.

2.20.3 Statutory Reserve

Statutory reserve has been maintained @ 20% of profit before tax in accordance with provisions of section 24 of
the Bank Companies Act, 1991 (as amended up to 2013) until such reserve equal to its paid up capital together
with the share premium.
2.21 Liabilities and Provision

2.21.1 Taxation
Tax expenses represent the sum of the tax which are payable during the current period
2.21.2 Current Tax
Provision for corporate current income tax has been made @ 40.00% for business income and other applicable
rate for other operating income as prescribed in the Finance Act 2017 of the accounting profit made by the Bank
after considering some of the add backs to income and disallowances of expenditure as per income tax laws
incompliance with BAS 12: Income Taxes.
2.21.3 Deferred Tax
As per BAS 12, deferred tax asset are the amounts of income taxes recoverable in future periods in respect of
deductible temporary differences. Deferred tax liabilities are the amounts of income taxes payable in future
periods in respect of taxable temporary differences. Deferred tax assets and liabilities are recognized for the future
tax consequences of timing differences arising between the carrying values of assets, liabilities, income and
expenditure and their respective tax bases. Deferred tax is provided using the liability method for all temporary
difference arising between the tax base of assets and liabilities and their carrying value for financial reporting
purposes. The tax rate (40.00%) prevailing at the balance sheet date is used to determine deferred tax. Deferred
tax asset is recognized to the extents which are expected to recover in future.
2.21.4 Retirement Benefits of Employees
Required in BAS 19, employee benefits, provident fund and gratuity benefits are given to eligible staff of the bank
in accordance with the locally registered rules and the entity shall disclose the amount recognized as an expense
for defined contribution plan.
2.21.5 Provident Fund
Provident fund benefits are given to staffs of FSIBL in accordance with the locally registered Provident Fund Rules.
The employees' provident fund is administered by a Board of Trustees and is funded by contributions of both
employees and the Bank at predetermined rate @ 10% of basic salary in equal portion. These contributions are
invested separately from the assets of FSIBL and the profit on such contributions credited to the members’
account. The Fund recognized by the National Board of Revenue.
2.21.6 Gratuity
The Company operates an unfunded gratuity scheme for its permanent employees, under which an employee is
entitled to get the benefits if his length of service is six (06) years in accordance with prevailing service rule as on
December 31, 2017.
2.21.7 Social Security Benevolent Fund
The Bank operates a social security benevolent fund by all employees’ contribution for the sake of death and
disability of employees.
2.22 Deposits and Other Accounts
Deposit includes Al-Wadiah Current (non-profit bearing) Deposits, Mudaraba Saving Deposits, Mudaraba Term
Deposits etc. They are brought to account at the gross value of the outstanding balance. Profit paid is charged to
the Income Statement.

2.23 Sharing of Investment Income

In case of investments, Mudaraba fund gets preference over cost free fund. The investment income earned
through deployment of Mudaraba fund is shared by the bank and the Mudaraba depositors at the pre-determined
ratio fixed by the bank.

2.24 Zakat
Zakat is paid by the bank at the rate of 2.58% (instead of 2.50% as the bank maintains its account following
Gregorian year) on the closing balances of statutory reserve, other reserve and exchange equalization account.
Payment of zakat on paid up capital and deposits is the responsibility of the shareholders and depositors
respectively.
2.25 Statement of Cash Flow
Cash flow statement is to be prepared as it provides information about cash flows of the enterprise which is useful
in providing users of financial statements with a basis to assess the ability of the enterprise to generate cash and
cash equivalents and the needs of the enterprise to utilize those cash flows. Cash flow statement has been
prepared under an adopted method of direct and indirect for the period, classified by operating, investing and
financing activities in accordance with the BRPD Circular No. 15, dated 09 November 2009 issued by Bangladesh
Bank as well as requirements of BAS 7.
2.26 Liquidity Statement
The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity
term as per the following basis.
 Balance with other Banks and financial institutions, money at call and short notice, etc. are on the basis of
their residual maturity term;
 Investments are on the basis of their respective residual maturity;
 General Investments are on the basis of their repayment schedule.
 Fixed assets are on the basis of their useful life;
 Other assets are on the basis of their realization / amortization;
  Borrowing from other Banks, financial institutions and agents, etc. are as per their residual maturity /
repayment term;
 Deposits and other accounts are on the basis of their residual maturity term and past trend of withdrawal
by the depositors;
 Provisions and other liabilities are on the basis of their payment / adjustments schedule.

2.27 Statement of Changes in Equity

The statement of changes in equity reflects information about the increase or decrease in net assets or wealth.
2.28 Comparative Information
As guided in paragraph 36 and 38 of BAS-1 Presentation of Financial Statements, comparative information in
respect of the previous year have been presented in all numerical information in the financial statements and the
narrative and descriptive information where, it is relevant for understanding of the current period's financial
statements.
2.29 Earnings Per Share (EPS)

2.29.1 Basic Earnings per Share

Earnings per share have been calculated in accordance with BAS-33 “Earning Per Share” (EPS) which has been
shown on the face of profit and loss account. This has been calculated by dividing the basic earnings by the
weighted average number of ordinary shares outstanding during the period.
2.29.2 Diluted Earnings Per Share
No diluted earnings per share is required to calculate for the period as there was no scope for dilution during the
period under review.
2.30 Functional and presentation currency
The financial statements are presented in Bangladesh Taka (BDT). All values are rounded to the nearest Taka.
2.31 Risk Management
In the ordinary course of business, the bank is exposed to a variety of risks the most important of which are
investments risk, liquidity risk, market risk, operational risk, legal risk, and profit rate risk. These risks should be
identified, measured and monitored through various control mechanisms across the bank in order to price its
products and services on a risk-adjusted basis and to prevent undesirable concentrations. The policies and
procedures for managing these risks are outlined in the notes below. The Bank has designed and implemented a
framework of controls to identify, monitor and manage these risks, which are as follows:
2.31.1 Investments Risk
Investments risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss. Concentration of investments risk arises when a number of counter parties are
engaged in similar business activities, or activities in the same geographical region, or have similar economic
features that would cause their ability to meet contractual obligations to be similarly affected by changes in
economic, political or other conditions. To manage investments risk, the bank applies investment limits to its
customers and obtains adequate collaterals. Investments risk in the First Security Islami Bank's portfolio is
monitored, reviewed and analyzed by the Investments Risk Management (IRM).

First Security Islami Bank Ltd. established Asset-Liability Management Committee (ALCO) to screen out the
banks/financial institutions and determine the maximum risk exposure on each of them. ALCO also assesses,
recommends and controls cross border/country risk. To manage the Non-Performing Investments (NPI), First
Security Islami Bank Ltd. has in place comprehensive remedial management policy, which includes a framework of
controls to identify weak investments and monitoring of these accounts.
2.31.2 Foreign Exchange Risk
Since Foreign Exchange Risk involves purchase and sale of any national currency against other national currency,
thus Foreign Exchange Risk is the chance of loss due to unexpected movement of market price of the currencies of
different countries or the price of the assets denominated by foreign currencies. The Foreign Exchange Risk of the
bank is minimal as all the transactions are carried out on behalf of the customers against underlying Foreign
Exchange transactions.

Treasury Division independently conducts the transactions and the Back Office of treasury is responsible for
verification of the deals and passing of their entries in the books of account. 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 daily basis and outstanding entries beyond 30 days are reviewed by the Management for their
settlement.
2.31.3 Asset Liability Management
Asset Liability Management (ALM) is an integral part of Bank Management and it is essential to have a structured
and systematic process for managing the Balance Sheet. For better asset liability management, the bank has
formed a committee consist of higher management chaired by the Managing Director called Asset Liability
Management Committee (ALCO). The committee should meet at least once every month to analysis, review and
formulate strategy to manage the balance sheet. The result of balance sheet analysis along with
recommendation is placed in the ALCO meeting by the Treasury Division where important decision are made to
minimize risk and maximize return. ALCO also concern various issues such as maintaining liquidity requirement
like LCR, NSFR, and leverage ratios, the maturity of assets and liabilities, pricing strategy and the liquidity
contingency plan and also monitor Net Profit Income (NPI), return on assets, investment value and exchange
earnings, Capital to Risk Weighted Assets Ratio, Investment Deposit Ratio, Investable Fund, Deposit Mix, Cost of
Deposit, Cost of Fund, etc. as a part of regulatory compliance. ALCO is a decision-making unit responsible for
balance sheet planning and management from risk-return perspective and also responsible for the strategic
management of profit rate and liquidity risks.
2.31.4 Prevention of Money Laundering
Money Laundering & Terrorist Financing are two significant financial and organized crimes which may jeopardize
the total stability and integrity of the financial system of a country as well as bring serious threat of adverse impact
to the socio-economic condition of the world. Keeping pace with the advancement of financial service facilities, the
money laundering and financing of terrorism are getting new dimensions day by day. Money launderers always try
to create a legitimate background for their money and try to filter and send their ill-gotten money to abroad. For
doing these they used to make lots of financial transactions through banks and other financial organizations by
concealing their real identity and source of income. Financing of terrorism is also done worldwide through the
same process that results in a hazardous situation.

As a responsible commercial bank First Security Islami Bank Ltd. is always agile and vigilant against money
laundering and terrorist financing. For successful prevention of these illegal activities, a full-fledged division named
“Anti Money Laundering Division (AMLD)” has been formed under the close supervision of higher authorities. As
per Bangladesh Bank’s guidelines, the bank has formed a “Central Compliance Unit (CCU)” consisted of senior
executives and divisional heads of the bank as well as a Deputy Managing Director has been assigned as Chief Anti
Money Laundering Compliance Officer (CAMLCO) of the bank. Anti-Money Laundering Division is responsible for
implementing Bangladesh Financial Intelligence Unit (BFIU), all the Bangladesh Bank’s directives as well as
following all the provisions of “Money Laundering Prevention Act, 2012 (Amendment in 2015) ’ and “Anti-
Terrorism Act, 2009 (Amendment in 2012 & 2013)”. Circulars and circular letters from Bangladesh Bank are
instantly circulated to all the branches, divisions, zonal offices and training institutes of the bank by AMLD. At the
same time, everyone is advised to strictly follow all the orders and instructions mentioned in those circulars or
circular letters and then close monitoring is done for ensuring effective compliance simultaneously.

The bank has continuous effort to comply with “Guidance Notes on Prevention of Money Laundering” issued by
Bangladesh Bank. Besides, the bank has its own “Anti Money Laundering & Combating Financing of Terrorism
Policy Manual”, “Customer Acceptance Policy” and “Money Laundering and Terrorist Financing Risk Management
Guidelines for FSIBL” approved by the Board of Directors of the bank. For constant observation against money
laundering and terrorist financing, every branch has a “Branch Anti Money Laundering Compliance Officer
(BAMLCO)”. Besides Internal Control & Compliance Division’s inspection of branches for AML/CFT System Check,
AMLD also inspects branches regularly under the close supervision of CCU. Moreover, CCU is also checking &
submitting monthly Cash Transaction Report (CTR) to Bangladesh Financial Intelligence Unit (BFIU), Bangladesh
Bank accurately in due time.

From the year of 2016 under a contract with election commission we are verifying every NID information from
their database to ensure complete and accurate KYC of our new and existing clients. In this year a day long
workshop for our all BAMLCOs together on the topic of “Workshop on Anti Money Laundering (AML), Combating
the Financing of Terrorism (CFT) & Related Issues” was held in Dhaka to make them updated and to be more
vigilant on prevention of money laundering and combating the financing of terrorism; particularly prevention of
Trade Based Money Laundering got special emphasis on that workshop. Besides our own Training Institute
individually as well as jointly with AMLD regularly provides training to the employees of the bank on the topic of
Money Laundering Prevention and Combating Terrorist Financing.
2.31.5 Internal Control and Compliance
Internal Control & Compliance is considered as an eye of an organization. It is a mirror of operations and keeps
record of the same. The primary objectives of internal control system are to help the bank to perform in a better
height through the use of its resources & under the guidance of Internal Control system; bank identifies its
weakness and takes appropriate measures to overcome the same. The main objectives of Internal Control are to
ascertain the efficiency and effectiveness of activities, reliability, completeness and timeliness of financial and
management information, compliance with applicable laws and regulations.

Operational loss arises for the cause of errors and fraud due to lack of internal control and compliance. Internal
Control & Compliance Division undertakes periodical and special audit & inspection of its branches and
departments/divisions of Head Office for reviewing its operation and compliance of the statutory requirement. The
Audit Committee of the Board of Directors plays a vital role in providing a bridge between the Board and
Management. The committee reviews the Financial Reporting process, Audit process and the Bank’s process for
compliance with laws, regulations and code of conduct.
2.31.6 Guideline on Information & Communication Technology
Banks are increasingly using sophisticated digital technology for banking activities with a view to achieve more
customer satisfaction with less cost. In addition, it increases the efficiency of the banking and payment system,
benefiting customers and merchants leading to bridging additional risks. These risk must be balanced against
benefits i.e. must be controlled. Under this advanced and highly technical ICT environment banks must ensure that
critical systems are not threatened by the risk exposures the banks take. For this purpose, a risk management
process of assessing risk, controlling risk exposure and monitoring risk should be in place.

Information assets are critical to the services provided by the Bank to its customers. Protection and maintenance
of these assets are vital to its sustainability. In order to ensure protection of critical IT assets from unauthorized
access, modification, disclosure and destruction the Bank has already taken initiative, which safeguard the interest
of customers.

In this context bank has implemented a core banking software (Bank Ultmus) ensuring adequate security. To
protect sensitive information of core banking software and other software in the event of any disaster, the bank
has implemented a disaster recovery site. The Bank has already developed its own ICT security policies for various
operation and services which are closely in line with the ICT security policy guideline of Bangladesh Bank.

The Bank has developed fault tolerance plan of human resources with detail job description for each ICT
personnel, segregation of duties of ICT tasks and system support in respect of severity. Training is a key component
of ICT Risk Management. The Bank has been continuously conducting training sessions on sensitive ICT tasks (i.e.
Operation procedure, Business Continuity Planning, Disaster Recovery Planning etc.) for relevant employees. The
Bank management has been putting continuous efforts to improve ICT Operation Management, Problem
Management, Change Management, Asset Management and Request Management to maintain maximum uptime
of automated banking business. The Bank has been maintaining adequate physical security inside its workplace to
properly protect ICT resource. The Bank is strictly following the Information Security Standard of Bangladesh Bank
covering Password Control, User ID Maintenance, Input Control, Network Security, Data Encryption, Virus
Protection and Access Control to Internet and Emailing. The bank is regularly conducting internal ICT audit to all its
branches and Head Office division to ensure proper implementation of the ICT policies.

2.31.7 Environmental Risk Management (ERM)

Environmental Risk is a facilitating element of credit risk arising from environmental issues and applicable across all
financing transactions undertaken by the Bank. The responsibilities of Credit Risk Management functions are: i) to
be aware of environmental issues confronting the various sectors, ii) to review the completed due-diligence
checklist and the environmental risk rating, iii) to integrate environmental risk considerations into the credit risk
assessment and iv) to specify financing conditions/covenants , if any, are required.

Environmental risk is assessed by Environmental Due Diligence (EDD) Checklists. It is a set of questionnaire
provided by Bangladesh Bank. There are eleven checklists, one for general purpose and ten others for ten specific
sectors for environmental risk rating. For a specific sector both General EDD and Specific EDD checklists are
applicable and for other than these specific sectors only General EDD checklist is applicable to determine the
environmental risk rating (EnvRR). The EnvRR can be High, Moderate or Low depending on the borrower’s business
activity and the vulnerability of the location of the business activity.
2.32 Risk Based Capital ( Basel-III)
To comply with the international best practice and to make the bank’s capital more risk sensitive as well as to build
the banking industry more shock absorbent and stable, Bangladesh Bank is aimed to implement Basel-III reporting
from 2015. As per the directive of Bangladesh Bank, all schedule banks in Bangladesh are now required to report
risk based capital adequacy for banks under Basel-III. All scheduled banks are also required to disclose capital
adequacy in both quantitative terms as per Bangladesh Bank BRPD Circular No. 18 Dated December 21, 2014.
2.33 Stress Testing
Stress testing is one of the sophisticated risk management techniques that have been used to determine the
reactions of different financial institution under a set of exceptional, but plausible assumptions through a series of
test. At institutional level, stress testing techniques provide a way to quantify the impact of change in a number of
risk factors on the assets and liabilities portfolio of the institution. Presently stress testing is being done by
considering five different risk factors namely interest rate, sale value of collateral, non-performing loans, stock
price and foreign exchange rate.

FSIBL supplements their analysis of risk with stress testing. They perform stress tests because value-at-risk
calculations are based on relatively recent historical data and only purport to estimate risk up to a defined
confidence level. Therefore, they only reflect possible losses under relatively normal market conditions.
2.34 Related party transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or
exercise significant influence over the other party in making financial and operational decisions. Parties are also
considered to be related if they are subject to common control or common significant influence related party
transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price
is charged as per BAS 24 “Related Party Disclosures”, Bangladesh Bank and Bangladesh Securities & Exchange
Commission (BSEC) guidelines. Details of Related party transactions have been disclosed in note # 45.

2.35 General
Wherever considered necessary, previous year’s figures have been rearranged for the purpose of comparison;
 2017 2016
BDT BDT
3 CASH
3.1 Cash in Hand
In Local Currency 1,487,820,657 1,512,239,161
In Foreign Currencies 19,558,953 17,031,559
ATM Balance 184,075,000 179,750,400
1,691,454,610 1,709,021,120
3.2 Balance with Bangladesh Bank and its Agent Bank
Balance with Bangladesh Bank (Note-3.2.1) 23,131,113,240 30,254,557,174
Balance with Sonali Bank Ltd. (Note-3.2.2) 354,547,282 336,931,480
23,485,660,522 30,591,488,654
25,177,115,132 32,300,509,774

3.2.1 Balance with Bangladesh Bank (Including Foreign Currencies)

In Local Currency 22,916,879,311 30,172,290,535
In Foreign Currencies 214,233,929 82,266,639
23,131,113,240 30,254,557,174

3.2.2 Balance with Sonali Bank Ltd. (as Agent of Bangladesh Bank)
In Local Currency 354,547,282 336,931,480

3.3 Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with the
Section 25 & 33 of the Bank Companies Act. 1991 and subsequent BCD Circular No. 13 dated May 24, 1992; BRPD Circular No.
12 dated September 06, 1998, BRPD Circular No.12, dated September 20, 1999, BRPD Circular No. 22 dated November 06,
2003, BRPD Circular No. 03 dated 17 February, 2005 and BRPD Circular No. 11 & 12 dated 25 August 2005, Bangladesh Bank
Letter # DOS (SR) 1153/120-A/2009-46 dated 22 March 2009, MPD circular # 01 dated 04 May 2010 , MPD circular # 04 & 05
dated 01 December 2010 , DOS Circular#1 dated 19/01/2014 and MPD Circular#1 dated 23/06/2014.

3.4 Cash Reserve Ratio (CRR): 6.50% of Average Demand and Time Liabilities:

Required Reserve 18,943,100,000 17,084,952,000

Actual Reserve maintained 22,906,137,000 30,159,264,000
Surplus/(Short) 3,963,037,000 13,074,312,000

3.5 Statutory Liquidity Ratio (SLR): 5.50% of Average Demand and Time Liabilities:

Required Reserve 16,028,777,000 14,456,498,000

Actual Reserve held 21,009,039,000 29,020,265,000
Surplus/(Short) 4,980,262,000 14,563,767,000

3.6 Held for Statutory Liquidity Ratio

Cash in Hand 1,691,455,000 1,709,022,000
Balance with Bangladesh Bank and its Agent Bank 4,317,584,000 13,411,243,000
Bangladesh Govt. Islamic Bond 15,000,000,000 13,900,000,000
21,009,039,000 29,020,265,000
 2017 2016
BDT BDT
3 (a) CASH
3.1(a) Consolidated Cash in Hand
First Security Islami Bank Limited (Note-3.1) 1,691,454,610 1,709,021,120
First Security Islami Capital & Investment Limited 24,642 9,140
1,691,479,252 1,709,030,260
3.2(b) Consolidated Balance with Bangladesh Bank and its Agent Bank
First Security Islami Bank Limited (Note-3.2) 23,485,660,522 30,591,488,654
First Security Islami Capital & Investment Limited - -
23,485,660,522 30,591,488,654
25,177,139,774 32,300,518,914

4 BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS AND PLACEMENT

4.1 Balance With Other Banks & Financial Institutions

A. Balance Inside Bangladesh

Al-wadiah/ Current Accounts
Agrani Bank Limited 7,039,815 14,257,794
Trust Bank Ltd. 28,821,401 20,245,555
Islami Bank Bangladesh Ltd. 4,424,877 1,341,385
Eastern Bank Ltd. 500,000 -
40,786,093 35,844,734

Mudaraba Short Notice Deposits

Southeast Bank Ltd. (Islamic Banking Branch) 3,118,169 7,034,317
Social Islami Bank Ltd. 41,138 6,426,646
Dhaka Bank Ltd. (Islamic Banking Branch) 341,445 330,446
AB Bank Ltd. (Islamic Banking Branch) 615,228 600,150
Islami Bank Bangladesh Ltd. 29,258,421 17,874,775
Pubali Bank Ltd. (Islamic Banking Branch) 3,597,568 9,398,373
Union Bank Ltd. 9,457 -
36,981,426 41,664,707
Total Inside Bangladesh 77,767,519 77,509,441
 2017 2016
BDT BDT
B. Balance Outside Bangladesh
In Deposit Account (non-profit bearing) with:
Curren
Current Account: Amount Rate
cy
1. Mashreq Bank, PSC, London GBP 29,089.72 110.975 3,228,235 2,962,600
2. Mashreq Bank, PSC, London. EURO 83,212.12 98.487 8,195,345 1,214,667
3. Mashreq Bank, PSC, Newyork USD 3,608,676.10 82.700 298,437,514 309,184,713
4. Mashreq Bank, PSC, London USD - - - 466,901
5. MCB Bank Ltd. Karachi ACU$ 7,690.91 82.700 636,038 605,582
6. Commerz Bank AG, Frankfurt,
EURO 61,666.35 98.487 6,073,358 5,387,533
Germany
7. Bank of Bhutan, Thimpo, Bhutan ACU$ 9,602.10 82.700 794,094 714,022
8. Sonali Bank , Kolkata, India ACU$ 17,679.79 82.700 1,462,119 3,379,040
9. AB Bank Ltd, Mumbai, India ACU$ 332,384.51 82.700 27,488,199 16,262,748
10. ICICI bank Ltd, Hongkong USD 274,605.91 82.700 22,709,909 6,520,375
11. ICICI bank Ltd,Kolkata, India ACU$ 161,472.30 82.700 13,353,759 10,076,072
12. Habib Bank, Zurich, Switzerland CHF 17,541.88 83.968 1,472,955 898,898
13. Habib Metropolitan Bank Limited,
ACU$ 23,448.81 82.700 1,939,217 3,560,098
Karachi, Pakistan
14. Habib American Bank, N,Y USD 962,904.25 82.700 79,632,181 64,299,487
15. Banca UBAE SPA, Rome, Italy USD 32,737.87 82.700 2,707,422 2,312,562
16. Banca UBAE SPA, Rome, Italy EURO 638,750.25 98.487 62,908,851 1,591,222
17. Bank Al-Jazira, Jeddah USD 251,855.60 82.700 20,828,458 2,037,791
18. Bank Al-Jazira, Jeddah SAR 302,920.00 22.051 6,679,689 784,630
Total Outside Bangladesh 558,547,343 432,258,941
Total (A+B) 636,314,862 509,768,382

4.1(a) CONSOLIDATED BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS

In Bangladesh:
First Security Islami Bank Limited (Note-4.1 (A)) 77,767,519 77,509,441
First Security Islami Capital & Investment Limited 19,738,790 30,424,493
Inter-company Transaction (14,743,708) (28,108,136)
82,762,601 79,825,798
Outside Bangladesh:
First Security Islami Bank Limited (Note-4.1 (B)) 558,547,343 432,258,941
First Security Islami Capital & Investment Limited - -
558,547,343 432,258,941
641,309,944 512,084,739
4.2 Placement with Banks & other Financial Institutions

Reliance Finance Limited 13,603,700,000 14,509,000,000

13,603,700,000 14,509,000,000

Total Balance with other Banks & Financial Institutions and Placement
14,240,014,862 15,018,768,382
(Note 4.1+4.2)

Balance with other Banks & Financial Institutions and Placement

4.3
(according to remaining maturity grouping)
Up to One Month 7,941,825,416 6,074,584,894
Up to Three Months 6,298,189,446 4,525,336,778
Three Months to One Year - 4,418,846,710
One Year to Five Years - -
Above Five Years - -
14,240,014,862 15,018,768,382
 2017 2016
BDT BDT
5 INVESTMENTS IN SHARES AND SECURITIES
Government Securities
Bangladesh Govt. Islamic Bonds 15,000,000,000 13,900,000,000
15,000,000,000 13,900,000,000
Others
Subordinated Bond 400,000,000 400,000,000
Quoted/Unquoted Shares (Note - 5.1) 508,894,701 486,490,432
908,894,701 886,490,432
15,908,894,701 14,786,490,432

5.1 Quoted/Unquoted Shares

Acquisition cost
Name of Companies Acquisition cost (Taka)
(Taka)
Quoted:
Shahjalal Islami Bank Ltd. - 1,612,625
National Tubes Ltd. - 12,122,079
MJL Bangladesh Ltd. 34,841,861 12,910,629
Lafarge Surma Cement Ltd. 77,358,833 204,671,243
Confidence Cement Ltd. - 18,236,370
CVO Petrochemical Refinery Limited 29,609,060 2,364,741
Saiham Cotton Mills Ltd. - 621,853
Bangladesh Shipping Corporation - 13,759,371
Bangladesh Submarine Cables Co. Ltd 70,102,850 27,316,307
Orion Pharma Ltd. - 61,445
Padma Oil Company Ltd. 59,037,887 48,810,375
Usmania Glass Sheet Factory Ltd. 5,673,379 5,673,379
Paramount Textile Ltd. - 6,536,568
Shahazibazar Power Company Ltd. 129,579,063 102,665,337
Heidelberg Cement Bd. Ltd. 2,226,521 5,618,178
ACI - 11,449,797
Beacon Pharma - 793,549
APEX FOOT - 9,697,136
Singer Bangladesh Limited 44,681,523 -
BBS Cables Co. Ltd. 8,447,529 -
Doreen Power Ltd. 5,918,062 -
KDS Accessories Limited 9,534,312 -
Mercantile Bank Ltd 784,789 -
Mozaffar Hossain Spinning Mills Ltd. 13,919,265 -
Nahee Aluminum Composite Panel Ltd. 921,779 -
Navana CNG Limited 10,833,155 -
Ratanpur Steel Re-Rolling Mills Limited 3,855,383 -
Total 507,325,251 484,920,982
Unquoted:
Central Depository Bangladesh Ltd. 1,569,450 1,569,450
508,894,701 486,490,432

5.2 Market Value of Quoted Shares 417,115,779 421,054,071

 2017 2016
BDT BDT

5.3 Remaining Maturity Grouping of Investments in Shares and Securities

On Demand 80,742,648 24,246,049
Within One Month 3,476,657,352 2,275,753,951
One Month to three Months 7,100,025,634 7,397,451,298
Three Months to One Year 4,849,899,617 4,687,469,684
One Year to Five Years 400,000,000 400,000,000
More than Five Years 1,569,450 1,569,450
15,908,894,701 14,786,490,432
5(a) CONSOLIDATED INVESTMENTS IN SHARES AND SECURITIES
Government Securities
First Security Islami Bank Limited (Note-5) 15,000,000,000 13,900,000,000
First Security Islami Capital & Investment Limited - -
15,000,000,000 13,900,000,000
Others
First Security Islami Bank Limited (Note-5) 908,894,701 886,490,432
First Security Islami Capital & Investment Limited 190,639,853 69,346,102
1,099,534,554 955,836,534
16,099,534,554 14,855,836,534
6 INVESTMENTS
General Investment etc. (Note-6.A) 272,938,959,885 225,520,627,072
Bills Purchased and Negotiated (Note - 6.B) 654,658,825 544,644,430
273,593,618,710 226,065,271,502

6.A General Investment etc.

Inside Bangladesh (Mode wise)
Bai-Murabaha 239,323,878,656 197,659,216,466
Hire-Purchase Sirkatul Meelk 32,881,866,153 27,188,609,204
Bai-Muajjal 4,897,251 5,155,895
Bai-Salam 325,672,509 233,375,868
Wajira Bill Okalah 27,623,154 10,453,147
Quard 375,022,162 423,816,492
272,938,959,885 225,520,627,072
Outside Bangladesh - -
272,938,959,885 225,520,627,072
6.B Bills Purchased and Negotiated
Payable in Bangladesh 606,684,440 501,479,089
Payable outside Bangladesh 47,974,385 43,165,341
654,658,825 544,644,430
273,593,618,710 226,065,271,502
6.1 Maturity Grouping of Investments
Payable on Demand 44,140,044,437 41,261,198,524
Up to Three Months 41,887,312,508 39,267,340,779
Three Months to One Year 77,254,261,765 48,488,880,250
One Year to Five Years 64,419,012,424 59,620,122,397
Above Five Years 45,892,987,576 37,427,729,552
273,593,618,710 226,065,271,502

6.2 Investments on the basis of Significant Concentration

Investments to Directors of Other Banks 31,183,000,000 27,897,190,000
Investments to Chief Executive and Other high Officials - -
Investments to Customers Group 224,012,549,407 179,100,213,527
Investments to Industry 17,447,931,239 18,427,443,000
Investment to Staff 950,138,064 640,424,975
 2017 2016
BDT BDT
273,593,618,710 226,065,271,502

6.3 Investments to Customers for more than 10% of FSIBL's Total Eligible
Capital
Number of Clients 59 54
Amount of Outstanding Investments
Funded 82,325,500,000 79,552,800,000
Non-funded 26,876,500,000 13,991,100,000
109,202,000,000 93,543,900,000
6.4 Industry wise Investments
Agriculture:
Fishing 844,400,000 189,400,000
Others 3,413,300,000 3,789,900,000
Textile and Readymade Garments:
Readymade Garments - Export 3,481,200,000 2,816,300,000
Textile and Textile Products- Import 6,102,300,000 6,744,100,000
Others -Export 2,289,200,000 1,574,200,000
Others -Import 24,288,200,000 28,030,400,000
Contractor Finance 4,781,900,000 6,815,700,000
Transport 978,200,000 621,600,000
Internal Trade Finance:
Whole Sale Trading 108,592,500,000 67,059,600,000
Retail Trading 9,396,800,000 16,925,900,000
Others 27,185,900,000 27,193,500,000
House Building:
Residential & Commercial 18,853,700,000 20,378,300,000
Staff 950,100,000 640,400,000
Special Program:
Consumer Finance and Hire Purchase Scheme 443,200,000 286,500,000
Others 61,992,718,710 42,999,471,502
273,593,618,710 226,065,271,502
6.5 Geographical Location-wise
Urban
Dhaka 82,017,291,006 71,069,414,954
Chittagong 182,746,102,114 148,193,419,711
Barisal 213,427,492 219,184,582
Rajshahi 687,205,251 566,564,457
Khulna 1,315,173,204 1,074,268,916
Rangpur 369,253,972 190,598,761
Sylhet 827,817,022 812,322,231
268,176,270,061 222,125,773,612
Rural
Dhaka 1,542,330,646 1,158,971,250
Chittagong 2,507,253,883 1,860,194,155
Barisal 88,795,977 60,854,643
Rajshahi 166,276,614 100,596,755
Khulna 1,022,026,793 674,023,771
Sylhet 90,664,736 84,857,316
5,417,348,649 3,939,497,890
273,593,618,710 226,065,271,502
 2017 2016
BDT BDT

6.6 Classification of Investments as per Bangladesh Bank Circulars

Unclassified:
Standard 250,469,454,650 206,293,974,864
Special Mention Account 14,726,419,601 13,932,053,224
265,195,874,251 220,226,028,088
Classified:
Sub-standard 1,667,239,905 1,881,233,510
Doubtful 1,477,387,516 322,208,989
Bad & Loss 5,253,117,038 3,635,800,915
8,397,744,459 5,839,243,414
273,593,618,710 226,065,271,502
6.7 Sector-wise Classification of Investments
Unclassified:
Small Enterprise Financing (SEF) 44,560,883,322 45,118,043,322
Consumer Financing (Other than HF & LP) 439,083,043 282,064,364
Investments to BHs/MBs/SDs against Share 433,559,649 484,023,192
Other than SMEF, CF, BHs/ MBs,/SDs 162,066,524,929 125,143,580,064
Housing Finance (HF) 21,533,341,403 18,219,744,445
Investments for professionals to set up business (LP) 95,739,678 1,134,942,026
Short Term Agri. Investments 2,680,314,636 2,057,174,823
Staff Investment 950,138,064 640,424,976
Others 32,436,289,527 27,146,030,876
265,195,874,250 220,226,028,087
Classified:
Small Enterprise Financing (SEF) 439,584,942 139,033,145
Consumer Financing (Other than HF & LP) 4,124,526 4,454,510
Investments to BHs/MBs/SDs against Share 106,788,579 -
Other than SMEF, CF, BHs/ MBs,/SDs 6,287,415,290 4,228,028,177
Housing Finance (HF) 165,662,331 37,896,142
Investments for professionals to set up business (LP) 3,848,681 3,848,681
Short Term Agri. Investments 18,880,810 13,220,632
Others 1,371,439,300 1,412,762,128
8,397,744,459 5,839,243,415
273,593,618,710 226,065,271,502
6.8 Particulars of Required Provision for Investments
Classification status Required provision
Unclassified
Standard 1,837,246,617 1,893,110,376
Special Mention Account 852,723,019 343,018,063
Off -Balance Sheet Exposure 412,634,199 335,687,765
3,102,603,835 2,571,816,204
Classified:
Sub - Standard 212,389,363 251,168,475
Doubtful 555,269,535 33,275,329
Bad and Loss 3,234,145,663 2,229,089,094
4,001,804,561 2,513,532,898
7,104,408,396 5,085,349,102

Total Required Provision against Investments 7,104,408,396 5,085,349,102

Total Provision Maintained 7,104,408,396 5,088,729,803
Provision Excess/ (Shortfall) - 3,380,701

Bangladesh Bank Audit Team (DBI-4) has raised additional provision amount of Tk. 540.65 Crore out of which the amount of
Tk. 20.00 Crore has been maintained during the year 2017 and the rest of the amount i.e. Tk. 520.65 Crore has to be
maintained for next four (04) years within 2021 by equal amount of Tk. 130.16 Crore each year vide their letter no. DBI-
04/42(5)/2018-769 dated 18.04.2018.
 2017 Crore out of which2016
Bangladesh Bank Audit Team (DBI-4) has raised additional provision amount of Tk. 540.65 the amount of
BDT
Tk. 20.00 Crore has been maintained during the year 2017 and the rest of the amount BDT has to be
i.e. Tk. 520.65 Crore
maintained for next four (04) years within 2021 by equal amount of Tk. 130.16 Crore each year vide their letter no. DBI-
04/42(5)/2018-769 dated 18.04.2018.

6.9 Particulars of Investments

i) Investments considered good in respect of which the Bank Company is fully 42,679,500,000 25,825,000,000
secured.
ii) Investments considered good for which the bank holds no Security other 161,343,800,000 24,053,000,000
than the debtors personal security.
iii) Investment considered good and secured by the personal security of one or 69,570,318,710 176,187,271,502
more parties in addition to the personal security of the debtors.
iv) Investments adversely classified; provision not maintained there against. - -

273,593,618,710 226,065,271,502

v) Investments due by directors or executives of the banking company or any

of them taken either separately or jointly with any other person. 31,183,000,000 27,897,190,000

vi) Investments due by companies or firms in which the directors of the bank
company are interested as directors partners or managing agents or in case
of private companies, as members. - -
vii) Maximum total amount of investments, 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 separately or jointly with any
other person. - -

viii) Maximum total amount of investments, 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 companies, as members. - -

ix) Investment due from other banking companies - -

x) Total amount of classified Investments on which profit is not credited to

income 8,397,744,459 5,839,243,414

a. Movement of classified Investments

Opening balance 5,839,243,414 5,187,236,102
Increase/ (Decrease) during the year 2,558,501,045 652,007,312
8,397,744,459 5,839,243,414
b. Amount of provision kept against classified investment as on the reporting
date of Balance Sheet 4,001,767,394 2,513,635,000

c. Profit credited to the profit/Rent/Compensation Suspense Account 371,647,708 228,426,381

xi) Amount of written off Investment:

a. Cumulative amount - -
b. Amount written off during the period - -
c. Total amount of written off (a+b) - -
d. Amount recovered against such written- off up to this year - -
e. Amount of investment written- off against which suit has been filled to - -
recover the same.
 2017 2016
BDT BDT

6.10 Security against Investments including bills purchased & negotiated:

Collateral of movable/immovable assets 164,806,833,589 125,750,894,795

Local banks & financial institutions guarantee - -
Export documents 1,573,666,000 1,574,249,000
Own MTDR 42,679,500,000 25,825,000,000
MTDR of other Banks - -
Government Bonds - -
Personal guarantee 41,691,156,544 53,969,048,191
Other security 433,559,649 1,272,885,689
Unsecured 22,408,902,928 17,673,193,827
273,593,618,710 226,065,271,502

6.11 Maturity Grouping of Bills Purchased and Negotiated

Payable within one month 5,311,884 4,419,231
Over one month but less than three months 1,418,143 11,798,269
Over three months but less than six months 228,199,650 189,851,055
Six Months and Above 419,729,148 338,575,875
654,658,825 544,644,430

6.A(a) CONSOLIDATED GENERAL INVESTMENT ETC. (All Inside Bangladesh)

First Security Islami Bank Limited (Note-6.A) 272,938,959,885 225,520,627,072
First Security Islami Capital & Investment Limited - -
Less: Inter-company transaction (Investment in Subsidiary) (241,148,005) (175,378,981)
272,697,811,880 225,345,248,091
7 Fixed Assets including premises, Furniture & Intangible Assets at cost less
accumulated depreciation (Annexure-A)

Land 96,546,000 96,546,000

Building 1,429,210,470 1,429,210,470
Furniture & Fixtures 1,950,734,800 1,805,533,437
Office Equipment 1,478,220,055 1,312,547,552
Vehicles 219,019,134 218,216,802
Books 614,868 613,025
5,174,345,327 4,862,667,286
Less: Accumulated Depreciation 1,801,950,958 1,504,972,811
3,372,394,369 3,357,694,475
Intangible Assets
Software -Core banking 175,687,195 137,531,195
Less: Accumulated Amortization 84,070,133 64,494,731
91,617,062 73,036,464
3,464,011,431 3,430,730,939
7(a) Consolidated Fixed Assets including premises, Furniture & Intangible
Assets at cost less accumulated depreciation

First Security Islami Bank Limited (Note-7) 3,464,011,431 3,430,730,939

First Security Islami Capital & Investment Limited 9,081,463 19,386,853
3,473,092,894 3,450,117,792
 2017 2016
BDT BDT

8 OTHER ASSETS
Inter - branch Transaction Account (*) 3,270,972 16,629,217
Accrued Income 802,817,226 931,679,426
Advances, Deposits and Prepayment (Note -8.1) 3,498,596,709 2,899,831,451
Advance Income Tax 6,280,075,025 5,035,549,724
Stock of Stationery 37,737,078 34,380,488
Suspense Account (Note- 8.2) 29,108,446 70,078,826
Advance Deposits 44,924,033 34,560,166
Stamps on Hand 3,225,705 3,003,832
Protested Bills 61,272,443 61,272,443
Investment in FSI Capital & Investment Ltd.(Note-1.4) 255,000,000 255,000,000
Investment in FSIEL Italy S.R.L (Note-1.5) 62,340,058 62,340,058
Deferred Tax Assets (Note- 8.3) 250,828,024 197,233,000
Agent Banking Asset 1,483,459 -
11,330,679,178 9,601,558,631

(*) Inter-branch transaction account represents net outstanding balance between Inter-branch and Head Office
transaction(net) originated but yet to be responded at the balance sheet date. However, the status of non-respondent entries
on 31.12.2017 have been reconciled on 22.02.2018.
8.1 Advance, Deposits and Prepayment
Advance against Rent - Office 439,448,089 233,141,023
Advance against Rent - Godown 48,000 1,504,000
Clearing Adjustment Account (under BACH) 84,603,007 31,050,616
Remittance Settlement Account 319,590,927 169,731,729
Prepayment 2,640,185,985 2,449,406,819
Prepaid Insurance 550,693 652,565
Advance Against Security Deposit 13,888,997 14,063,688
Mobile Banking Receivable A/C 281,011 281,011
3,498,596,709 2,899,831,451
8.2 Suspense Account

Sundry Debtors 28,670,302 67,507,848

Advance against TA/DA 418,000 2,181,378
Encashment of PSP/BSP 5,050 364,600
Advance against New Branch 15,094 25,000
29,108,446 70,078,826
8.3 Deferred Tax Assets
Opening Balance 197,233,000 197,233,000
Add: Addition During the period 53,595,024 -
Closing Balance 250,828,024 197,233,000

As per Bangladesh Accounting Standard (BAS)- 12 deferred tax is recognized since December 2007. Deferred tax assets have
been arrived at Tk. 250.83 million as on December 31, 2017. According to BRPD Circular No. 11 Dated 12 December 2011, the
increased amount of the net income after tax due to the recognition of deferred tax will not be distributed as dividend.
Deferred tax asset is recognized to the extents which are expected to recover in future.

8(a) CONSOLIDATED OTHER ASSETS

First Security Islami Bank Limited (Note-8) 11,330,679,178 9,601,558,631

Less: Inter-company transaction(Investment in Subsidiary) 255,000,000 255,000,000
11,075,679,178 9,346,558,631
First Security Islami Capital & Investment Limited 1,038,542,711 780,093,963
12,114,221,889 10,126,652,594
 2017 2016
BDT BDT

9.0 NON-BANKING ASSETS 25,145,280 25,145,280

The Bank has been awarded ownership of the mortgage properties of M/s. Ranuka Knit Fashion (Pvt.) Ltd. according to the
verdict of the Honorable Court in accordance with section 33(7) of " Artharin Adalat -2003". An amount of Tk. 25,145,280/- is
reported in the financial Statements as Non-Banking Assets through the adjustment of outstanding investment against the
client. The value of Non-Banking Assets has been determined on the basis of valuation report of an Independent surveyor
Company.

10 PLACEMENT FROM BANK & OTHER FINANCIAL INSTITUTION

Inside Bangladesh
Bangladesh Bank (IMM Wings & Refinance Scheme) 8,042,480,495 35,863,797
Bangladesh Bank (EDF) 1,439,059,011 675,251,251
9,481,539,506 711,115,048
Outside Bangladesh - -
9,481,539,506 711,115,048
A. Security- wise grouping
Secured Placement - -
Unsecured Placement 9,481,539,506 711,115,048
9,481,539,506 711,115,048

B. Repayment Nature wise Grouping

Repayable on demand - -
Others 9,481,539,506 711,115,048
9,481,539,506 711,115,048

C. Maturity Analysis
Repayable on Demand - -
Repayable within One Month 7,000,000,000 -
One Month to Six Months 1,000,000,000 -
Six Month to One Year - -
One Year to Five Years 1,481,539,506 711,115,048
Five Years to Ten Years - -
9,481,539,506 711,115,048

10 (a) CONSOLIDATED PLACEMENT FROM BANK & OTHER FINANCIAL INSTITUTION

First Security Islami Bank Limited 9,481,539,506 711,115,048
First Security Islami Capital & Investment Limited - -
9,481,539,506 711,115,048
11 DEPOSITS AND OTHER ACCOUNTS
A. Deposits Received from Banks (Note A-1 ) 5,419,500,000 164,800,000
B. Other than Bank
Payable on Demand (Note B-1) 11,732,151,660 8,830,641,119
Other Deposits (Note B-2 ) 281,969,192,804 265,257,453,010
293,701,344,464 274,088,094,129
299,120,844,464 274,252,894,129
C. Maturity wise Grouping of Deposits and Other Accounts
Repayable within One Month 46,717,523,846 55,391,148,137
One Month to Three Months 49,501,026,451 54,798,044,362
Three Months to One Year 80,631,723,125 59,486,941,063
One Year to Five Years 65,030,736,589 57,531,817,115
Repayable over Five Years 57,239,834,453 47,044,943,452
299,120,844,464 274,252,894,129
 2017 2016
BDT BDT

A-1 Deposits Received from Banks

Islami Bank Bangladesh Ltd. 5,378,700,000 22,300,000
Exim Bank Ltd. 4,900,000 11,200,000
Union Bank Ltd. 9,900,000 97,600,000
NRB Global Bank Ltd. 26,000,000 33,700,000
5,419,500,000 164,800,000

Maturity wise Grouping of Deposits Received from Banks

Repayable on Demand 3,419,500,000 164,800,000
Repayable within One Month - -
Repayable over One Month but within Six Months 2,000,000,000 -
Repayable over Six Months but within one Year - -
Repayable over One Year but within Five Years - -
Repayable over Five Years but within Ten Years - -
Unclaimed Deposits for Ten Years and above - -
5,419,500,000 164,800,000
B-1 Payable on Demand
Al-wadiah Current Deposits 6,330,698,909 5,111,969,154
Mudaraba Saving Deposits (9%) (Note-11.3) 2,396,389,754 1,657,966,771
Security Deposit Receipt 37,752,334 19,011,380
Sundry Deposits 2,967,310,663 2,041,693,814
11,732,151,660 8,830,641,119
B- 2 Other Deposits
Mudaraba Saving Deposits (91%) 20,851,463,064 16,763,886,242
Mudaraba Term Deposits 195,765,021,849 188,431,972,412
Mudaraba Short Notice Deposits 10,972,314,952 8,441,322,077
Bills Payable (Note-11.2) 1,805,435,584 1,477,937,977
Bearer Certificates of Deposits - -
Mudaraba Deposit under Schemes (Note-11.5) 52,270,544,533 49,946,732,050
Foreign Currency Deposits 304,412,822 195,602,252
281,969,192,804 265,257,453,010
11.1 Al-Wadiah Current Accounts & Other Deposit Accounts
Al-wadiah Current Deposits 6,330,698,909 5,111,969,154
Mudaraba Short Notice Deposits 11,013,114,952 8,606,122,077
Sundry Deposits 2,967,310,663 2,041,693,814
Security Deposit Receipt 37,752,334 19,011,380
Foreign Currency Deposits 304,412,822 195,602,252
20,653,289,680 15,974,398,677
11.1(a) Consolidated Al-Wadiah Current Accounts & Other Deposit Accounts
First Security Islami Bank Limited (Note-11.1) 20,653,289,680 15,974,398,677
First Security Islami Capital & Investment Limited - -
Less: Inter-company transaction (14,743,708) (28,108,136)
20,638,545,972 15,946,290,541
11.2 Bills Payable
Pay Order Issued 1,803,436,447 1,467,326,541
Demand Draft Payable 1,839,383 10,441,104
Pay Slips Issued 159,754 170,332
1,805,435,584 1,477,937,977
11.3 Mudaraba Savings Deposits
As per BRPD Circular No. 06, dated 24 June 07, total saving deposits amount is bifurcated into:
9 % of total Mudaraba Savings Deposits 2,396,389,754 1,657,966,771
91% of total Mudaraba Savings Deposits 24,230,163,064 16,763,886,242
 2017 2016
BDT BDT
26,626,552,818 18,421,853,013

11.4 Mudaraba Term Deposits including other Banks - Maturity wise Grouping

Payable on Demand 2,087,374,389 1,922,181,153

Up to Three Months 83,920,667,194 77,549,721,873
From Three Months to Six Months 29,882,294,990 31,239,012,039
Above Six Months to One Year 81,738,793,340 77,598,448,218
Above One Year to Two Years 55,463,544 55,436,023
Above Two Years 80,428,392 67,173,106
197,765,021,849 188,431,972,412

11.5 Other Mudaraba Deposits

Mudaraba Deposit under Schemes:
Mudaraba Monthly Savings Scheme 10,825,120,703 9,778,118,259
Mudaraba Double Benefit Deposits Scheme 16,977,431,143 17,608,871,473
Mudaraba Monthly Benefit Scheme 6,213,479,979 10,134,595,799
Mudaraba Hajj Scheme 136,013,536 96,395,710
Mudaraba Marriage Scheme 1,943,342,915 1,131,827,102
Mudaraba Health Care Scheme 8,206,749,269 5,135,892,177
Mudaraba Education Deposit Scheme 1,630,643,020 1,054,168,576
Mudaraba Pension Deposit Scheme 961,749,022 762,433,840
Mudaraba Millionaire Deposit Scheme 1,448,219,097 1,057,364,020
Mudaraba Kroropoti Deposit Scheme 1,005,694,849 716,031,086
Mudaraba Triple Times Deposit Scheme 503,436,470 447,932,693
Mudaraba Four Times Deposit Scheme 1,879,396,083 1,611,281,695
Mudaraba Probashi Deposit Scheme 244,981,505 199,562,168
Mudaraba Money Plant Deposit Scheme 2,178,095 2,297,319
Mudaraba Gift Cheque 8,443,244 7,868,871
Mudaraba Griheni Deposit Scheme 222,022,826 155,392,659
Mudaraba New Generation Deposit Scheme 60,738,877 45,436,527
Mudaraba Cash Waqf. Deposit Scheme 903,900 1,262,076
52,270,544,533 49,946,732,050

12 MUDARABA SUBORDINATED BOND 5,382,000,000 1,382,000,000

The Bank issued Redeemable non-convertible FSIBL 1st Mudaraba Subordinated Bond to the tune of Taka 2,500,000,000.00 as
Supplementary Capital (Tier-2) of the Bank for a term of 6 years to strengthen the capital base of the Bank under Basel-III on
the consent of SEC vide their letter [Link]/CI/CPLC-44/2003-1516 dated 05.09.2012 as well as on the approval of Bangladesh
Bank Vide their letter no. BRPD(BIC)661/14B(P)/2012-241 dated 09.10.2012. The amount of Tk. 161.80 (250-88.20) crore has
already been paid up to 31 December 2017, as principal redemption.

The Board of Directors of the Bank in its 181st meeting held on February 12, 2017 has decided to issue fully Redeemable non-
convertible FSIBL 2nd Mudaraba Subordinated Bond (Private Placement) amounting to BDT 4,500,000,000.00 (Four hundred
fifty crore) only through private placements with 7 years maturity for enhancement of Tier-II capital as per requirement of
Basel –III. The Bangladesh Securities and Exchange Commission has given consent vide their letter No. BSEC/CI/DS-
08/2017/435 dated August 27, 2017 and Bangladesh Bank approval letter no. BRPD(BFIS)661/14B(P)/2017-6560 dated
05.10.2017. The FSIBL 2nd Mudaraba Subordinated Bond has fully been subscribed by BDT 4,500,000,000.00 within 31
December 2017.
 2017 2016
BDT BDT

13 OTHER LIABILITIES
Provision for Taxation (Note-13.1) 7,148,179,852 5,712,099,852
Accumulated Provision against Investments(Note-13.3) 7,104,408,396 5,088,729,803
Profit/Rent/Compensation Suspense Account (Note -13.4) 371,647,708 228,426,381
Accrued Profit and Expenses Payable (Note-13.5) 3,212,947,331 2,954,999,589
Provisions for diminution in value of Investments(Note-13.6) 90,209,472 63,866,911
Provisions for Other Assets 30,636,221 356,000
Provision for Zakat 71,588,157 67,118,741
Provident Fund 4,933 16,053
Benevolent Fund 3,233 2,483
Non-Resident Accounts 13,795,112 20,982,677
Compensation Realised 21,620,054 19,692,726
Others 18,378,722 24,207,752
Total 18,083,419,191 14,180,498,968

13.1 Provision for Taxation during the year

Opening Balance 5,712,099,852 4,567,675,852
Add : Provision made during the year 1,436,080,000 1,144,424,000
Closing Balance 7,148,179,852 5,712,099,852

Assessment for the year 1999, 2002, 2005, 2006 and 2009 have been settled. Assessment order of 2000, 2001, 2003, 2004,
2007,2008, and 2010 are pending with High Court and 2011 & 2012 are pending with Appellate Tribunal, 2013 is pending with
Commissioner of Taxes (Appeal), 2014, 2015 & 2016 assessment is not yet completed by DCT level and the return for the year
2017 will be submitted within 15th September 2018.

13.2 Provision for Investments during the year

Specific Provision for Classified Investments 1,488,132,394 805,700,000
General Provision 450,600,000 393,412,000
Off -Balance Sheet exposure 76,946,199 77,188,000
2,015,678,593 1,276,300,000

13.2 (a) Consolidated Provision for Investments during the year

First Security Islami Bank Limited 2,015,678,593 1,276,300,000
First Security Islami Capital & Investment Limited 4,711,604 9,343,508
2,020,390,197 1,285,643,508
13.3 Accumulated Provision for Investments
Specific Provision for Classified Investments (Note -13.3.1) 4,001,767,394 2,513,635,000
General Provision (Note -13.3.2) 2,690,006,803 2,239,406,803
Off -Balance Sheet exposure (Note -13.3.3) 412,634,199 335,688,000
7,104,408,396 5,088,729,803

13.3.1 Movement in Specific Provision for Classified Investments

Provision held at the beginning of the year 2,513,635,000 1,707,935,000
Less: Fully Provided Debts written off - -
Add: Recoveries of amounts previously written off - -
Add: Specific Provision for the year 1,488,132,394 805,700,000
Provision held at the end of the year 4,001,767,394 2,513,635,000
13.3.2 General Provision
Provision held at the beginning of the year 2,239,406,803 1,845,994,803
 2017 2016
BDT BDT
Addition/(transfer) during the year 450,600,000 393,412,000
2,690,006,803 2,239,406,803

13.3.3 Off-balance sheet exposure

Provision held at the beginning of the year 335,688,000 258,500,000
Addition/(transfer) during the year 76,946,199 77,188,000
412,634,199 335,688,000
13.4 Profit/Rent/Compensation Suspense Account
A) Profit Suspense (Old)
Opening Balance 33,768,518 33,768,518
Add: Transferred during the year - -
33,768,518 33,768,518
Less: Recovered during the year - -
Less: Amount Written off/waived during the year - -
Balance at the end of the year 33,768,518 33,768,518
B) Compensation Suspense Account
Opening Balance 194,657,863 164,988,725
Add: Addition during the year 152,648,655 49,361,864
347,306,518 214,350,589
Less: Recovered during the year 9,427,328 19,692,726
Less: Amount Written off/waived during the year - -
Balance at the end of the year 337,879,190 194,657,863

Total (A+B) 371,647,708 228,426,381

13.5 Accrued Profit and Expenses Payable

Profit Payable on MTDR 2,965,477,002 2,754,129,742
Profit Payable on Monthly Benefit Savings Scheme 1,027,305 1,027,305
Profit Payable on Money Plant Deposit 11,014 11,014
Power and Electricity 2,506,020 2,052,875
Telephone 206,274 235,953
Office Rent 672,219 2,176,077
Wages 786,987 489,314
Insurance 3,137,664 2,838,839
Audit Fees 862,500 730,250
Telex, Fax and E-mail - 920
Printing and Stationery - 7,060
Rates & Taxes - 5,000
Clearing Adjustment - 2,437
Online Clearing Parking Charges 1,004,950 1,004,950
Profit Payable on Mudaraba Subordinated Bond 54,459,485 66,840,894
Others 182,795,911 123,446,959
3,212,947,331 2,954,999,589
13.6 Provisions for diminution in value of Investments in shares
Opening Balance 63,866,911 163,515,908
Add: Addition during the year 26,342,561 -
Less: Adjustment for realized Loss during the year - 99,648,997
90,209,472 63,866,911
13(a) CONSOLIDATED OTHER LIABILITIES
First Security Islami Bank Limited (Note-13) 18,083,419,191 15,324,922,968
First Security Islami Capital & Investment Limited 322,630,052 110,411,786
18,406,049,243 15,435,334,754
14 CAPITAL
AUTHORISED CAPITAL
1,000,000,000 Ordinary shares of Taka 10 each. 10,000,000,000 10,000,000,000
 2017 2016
BDT BDT
14.1 Issued, Subscribed and Paid-Up Capital
712,817,582 Ordinary Shares of Taka 10 each issued 7,128,175,820 6,788,738,880
7,128,175,820 6,788,738,880

14.2 History of paid-up capital

Given below the history of raising share capital of First Security Islami Bank Limited:
Amount of Share Total Paid up Capital
Particulars Allotment Year
Capital (Cumulative)
First (Subscription to the Memorandum &
Articles of Association) at the time of 1999 200,000,000 200,000,000
Incorporation
Paid up capital increase 2003 120,000,000 320,000,000
Paid up capital increase 2005 280,000,000 600,000,000
Paid up capital increase 2006 300,000,000 900,000,000
Paid up capital increase 2007 100,000,000 1,000,000,000
Paid up capital increase 2008 1,300,000,000 2,300,000,000
10% Bonus Share 2010 230,000,000 2,530,000,000
20% Right Share 2010 506,000,000 3,036,000,000
12% Bonus Share 2011 364,320,000 3,400,320,000
10% Bonus Share 2012 340,032,000 3,740,352,000
10% Bonus Share 2013 374,035,200 4,114,387,200
10% Bonus Share 2015 617,158,080 4,731,545,280
50% Right Share 2015 2,057,193,600 6,788,738,880
5% Bonus Share 2017 339,436,940 7,128,175,820
Total 7,128,175,820

14.3 Category of shareholding as at 31 December 2017

Name of Category Percentage(%) Percentage(%)
Sponsors/Directors 34.20 48.00
Institutes 4.96 18.27
Non-Resident Bangladeshi 14.63 0.18
General Public 46.04 30.78
Foreign Investors 0.17 2.77
100.00 100.00
14.4 Classification of Shareholders by holding position as at 31 December 2017
Shareholding Range No. of Shares No. of Shares
Up to 500 Shares 3,558,605 4,049,356
501 to 5000 Shares 41,610,754 43,679,734
5001 to 10,000 Shares 19,584,230 16,634,725
10,001 to 20,000 Shares 21,973,917 17,865,624
20,001 to 30,000 Shares 13,507,821 11,049,426
30,001 to 40,000 Shares 8,248,171 6,056,139
40,001 to 50,000 Shares 8,151,156 9,407,375
50,001 to 100,000 Shares 25,523,189 22,434,362
100,001 to 1,000,000 Shares 83,962,262 81,992,796
Over 1,000,000 Shares 486,697,477 465,704,351
712,817,582 678,873,888
 2017 2016
BDT BDT

14.5 Capital to Risk Weighted Assets Ratio (CRAR) Under Basel-III (Solo Basis)
Tier-1 Capital:
Common Equity Tier-1 Capital (CET-1):
Paid up Capital 7,128,175,820 6,788,738,880
Statutory Reserve 2,950,454,362 2,412,128,110
Other Reserve 516,507,063 402,850,965
Retained Earnings 724,401,309 736,050,186
Adjustment for Deferred Tax Assets (250,828,024) (197,233,000)
Others (5% of Deferred Tax Assets) 12,541,401 9,861,650
11,081,251,931 10,152,396,791
Additional Tier-1 Capital (AT-1) - -
11,081,251,931 10,152,396,791
Tier –2 Capital:
General Provision 3,102,641,002 2,575,094,803
Assets Revaluation Reserves 191,160,401 181,099,327
Subordinated Debt 5,382,000,000 1,382,000,000
Adjustment (Assets Revaluation Reserves @ 60%) (114,696,241) (72,439,731)
8,561,105,162 4,065,754,399
A. Total Regulatory Capital 19,642,357,093 14,218,151,190

B. Total Risk Weighted Assets 163,609,111,704 135,261,058,541

C. Capital to Risk Weighted Assets Ratio (CRAR) (A/B)*100 12.01 10.51
D. Common Equity Tier-1 To RWA (A -CET/B)*100 6.77% 7.51%
Requirement of Minimum CET-1 plus Capital Conservetion Buffer 5.75% 5.13%
E. Tier-1 Capital to RWA (A -CET/B)*100 6.77% 7.51%
Requirement of Minimum Tier-1 Capital Ratio 6.00% 5.50%
F. Tier-2 Capital to RWA (A- AT/B)*100 5.23% 3.01%
G. Minimum Capital Requirement (MCR) 16,360,911,170 13,526,105,854

Capital Surplus /(Deficiency) against MCR (A-G) 3,281,445,923 692,045,336

[Link] Minimum Capital Plus Capital Conservation Buffer 18,406,025,067 14,371,487,470

14.5(a) Capital to Risk Weighted Assets Ratio (CRAR) Under Basel-III (Consolidated Basis)
Tier-1 Capital:
Common Equity Tier-1 Capital (CET-1):
Paid up Capital 7,128,175,820 6,788,738,880
Statutory Reserve 2,950,454,362 2,412,128,110
Other Reserve 516,507,063 402,850,965
Retained Earnings 823,468,502 793,919,776
Non-controlling Interest 340,182,207 300,600,194
Adjustment for Deferred Tax Assets (250,828,024) (197,233,000)
Others (5% of Deferred Tax Assets) 12,541,401 9,861,650
11,520,501,331 10,510,866,575
Additional Tier-1 Capital (AT-1) - -
11,520,501,331 10,510,866,575

Tier –2 Capital:
General Provision 3,102,641,002 2,575,094,803
Assets Revaluation Reserves 191,160,401 181,099,327
 2017 2016
BDT BDT
Subordinated Debt 5,382,000,000 1,382,000,000
Adjustment (Assets Revaluation Reserves @ 60%) (114,696,241) (72,439,731)
8,561,105,162 4,065,754,399
A. Total Regulatory Capital 20,081,606,493 14,576,620,974

B. Total Risk Weighted Assets 164,510,607,824 135,866,716,109

C. Capital to Risk Weighted Assets Ratio (CRAR) (A/B)*100 12.21% 10.73%
D. Common Equity Tier-1 To RWA (A -CET/B)*100 7.00% 7.74%
Requirement of Minimum CET-1 plus Capital Conservetion Buffer 5.75% 5.13%
E. Tier-1 Capital to RWA (A -CET/B)*100 7.00% 7.74%
Requirement of Minimum Tier-1 Capital Ratio 6.00% 5.50%
F. Tier-2 Capital to RWA (A- AT/B)*100 5.20% 2.99%
G. Minimum Capital Requirement (MCR) 16,451,060,782 13,586,671,611

Capital Surplus /(Deficiency) against MCR (A-G) 3,630,545,711 989,949,363

H. Required Minimum Capital Plus Capital Conservation Buffer 18,507,443,380 14,435,838,587

15 STATUTORY RESERVE
Opening Balance 2,412,128,110 1,902,246,794
Add: Addition during the year 538,326,252 509,881,316
Closing Balance 2,950,454,362 2,412,128,110

This has been done at least @ 20% or more of the net profit before tax according to Sec. 24 of Bank Companies Act, 1991
Amendment 2013 and shall be maintained until & unless it equals to Paid-up Capital.

16 OTHER RESERVE
Opening Balance 402,850,965 75,556,891
Add: Addition during the year 103,595,024 317,233,000
Add: Transferred from Asset Revaluation Reserve 10,061,074 10,061,074
Closing Balance 516,507,063 402,850,965

17 ASSETS REVALUATION RESERVE

Opening Balance 362,198,654 372,259,728
Less: Transfer to Other Reserve 10,061,074 10,061,074
Closing Balance 352,137,580 362,198,654

The Bank revalued the entire land and building during the year 2012 by an independent valuation firm according to paragraph
36 of BAS-16 as per approval of the meeting of 129th Board of Directors of the Bank. As per BAS-16, Revaluation reserve is
transferred to Other Reserve in each year during the lifetime of those assets.

18 RETAINED EARNINGS
Opening Balance 736,050,186 500,590,957
Add: Post tax profit for the period 1,309,146,282 1,404,982,582
Less: Transfer to Statutory Reserve 538,326,252 509,881,316
Less: Transfer to Other Reserve 103,595,024 317,233,000
Less: Capitalized during the period 339,436,940 -
Less: Cash Dividend paid during the period 339,436,944 342,409,037
Closing Balance 724,401,308 736,050,186

18(a) CONSOLIDATED RETAINED EARNINGS

First Security Islami Bank Limited (Note-18) 724,401,308 736,050,186
First Security Islami Capital & Investment Limited 99,067,195 57,869,590
 2017 2016
BDT BDT
823,468,503 793,919,776

19 NON-CONTROLLING INTEREST
Opening Balance 300,600,194 297,979,846
Add: Capital Increase in Subsidiary - -
Add: Transfer during the year 39,582,013 2,620,348
Closing Balance 340,182,207 300,600,194

20 LETTER OF GUARANTEES

Money for which the Bank is contingently liable in respect of guarantees are given favoring:
Letters of Guarantee - Local 6,047,078,043 6,293,521,960
Letter of Guarantee - Foreign 32,781,475 23,499,840
6,079,859,518 6,317,021,800

20.1 Money for Which the Bank is Contingently Liable in respect of Guarantees:
Directors - -
Government - -
Banks and Other Financial Institutions - -
Others 6,079,859,518 6,317,021,800
6,079,859,518 6,317,021,800

21 IRREVOCABLE LETTERS OF CREDIT

Letters of Credit - Cash 5,759,547,020 3,570,027,615
Letter of Credit - Cash Inland - -
Back to Back letters of Credit - Local 227,561,868 584,876,220
Back to Back letters of Credit - Foreign 138,305,221 180,902,422
6,125,414,109 4,335,806,257

22 BILLS FOR COLLECTION ISSUED BY THE BANK

Foreign Documentary Bills 363,733,466 369,864,788

Outward Bills 500,000 108,628
Inland Documentary Bills 1,006,727,905 795,037,383
1,370,961,371 1,165,010,799
 2017 2016
BDT BDT
23 INVESTMENT INCOME
Profit Received from:

Bai Murabaha - General 1,295,259,818 1,453,367,182

Bai Murabaha Hypothecation 15,673,966,782 14,442,681,619
Bai Murabaha against MTD 1,985,896,817 1,667,877,635
Bai Murabaha Post Import (LTR) 524,653,434 730,485,765
Bai Murabaha Post Import (Pledge) 42,583,332 4,972,528
Bai Murabaha Real Estate 583,275 2,494,303
Bai Murabaha Import Bill 1,331,171,738 800,038,441
Investment in Placements 1,377,252,184 1,707,079,971
Bai Murabaha Import 151,226,661 57,170,295
Bai Murabaha Export 56,749,390 46,499,880
Bai Murabaha SME Investment 717,441,733 591,955,768
Bai-Murabaha (EMI) Investment 201,251,377 158,612,810
Bai-Murabaha(General) Under SME Invest 49,575,306 52,899,236
Bai-Murabaha Post Import(TR)-Under SME 42,017,072 16,463,000
Bai-Murabaha (EQI) Investment 1,394,731,631 1,501,753,020
Mudaraba Foreign Currency Investment (EDF) 34,568,281 8,814,885
Inland Documentary Bills Purchased (Foreign Currency Bills) 75,393,841 79,194,719
Bai Muajjal General 15 8,476,775
Pre-shipment Investment 18,917,755 12,347,784
HPSM Transport 182,524,974 178,521,277
HPSM Real Estate 820,409,554 765,771,264
HPSM Consumer 70,149,356 63,805,344
HPSM Agriculture 2,898,947 3,766,926
HPSM SME 11,553,071 14,633,951
HPSM HBL Commercial 1,133,800,844 1,003,666,381
HPSM Industrial 618,747,906 456,029,050
Rent on HPSM Scheme 130,998,640 170,912,781
HPSM House Building - Staff 24,446,971 20,415,870
Bai Muajjal 92,637 80,391
Agriculture Investment 249,549,603 227,009,007
Investment against Provident Fund (Staff) 903,738 908,141
Investment against Car Lease Scheme 468,496 1,070,397
Quard against MTDR 188,704 200,121
Wajira Bill Okalah 2,531,564 1,739,282
28,222,505,447 26,251,715,799

23(a) CONSOLIDATED INVESTMENT INCOME

First Security Islami Bank Limited (Note-23) 28,222,505,447 26,251,715,799

First Security Islami Capital & Investment Limited 126,495,190 143,557,588
28,349,000,637 26,395,273,387
 2017 2016
BDT BDT

24 PROFIT PAID ON DEPOSITS

Profit Paid on:
Mudaraba Term Deposit 12,819,480,865 12,906,957,345
Mudaraba Double Benefit Deposits Scheme 2,008,381,007 1,993,220,000
Mudaraba Monthly Savings Scheme 1,108,099,040 932,251,236
Mudaraba Monthly Benefit Savings Scheme 781,854,554 1,299,575,832
Mudaraba Savings Deposits 681,617,374 447,797,615
Mudaraba Short Notice Deposits 515,526,408 264,234,687
MSB & Placement from Other Banks 272,455,070 144,745,362
Mudaraba Hajj Deposit Scheme 12,684,120 8,604,164
Mudaraba Student SB AC 6,055,976 5,461,468
Mudaraba Salary A/C 7,986,626 4,179,779
Mudaraba Senior Citizen AC 5,268,942 4,633,171
Mudaraba Marriage Scheme 160,219,475 86,572,011
Mudaraba Health Care Scheme 689,782,770 406,846,760
Mudaraba Education Deposit Scheme 141,848,642 83,702,507
Mudaraba Pension Deposit Scheme 94,594,954 66,749,745
Mudaraba Millionaire Deposit Scheme 135,290,298 88,775,233
Mudaraba Kroropoti Deposit Scheme 95,855,296 61,237,937
Mudaraba Triple Times Deposit Scheme 58,258,362 51,140,701
Mudaraba Four Times Deposit Scheme 200,132,330 166,861,116
Mudaraba Probashi Deposit Scheme 24,989,111 18,080,525
Mudaraba Money Plant Deposit Scheme 233,746 234,814
Mudaraba Griheni Deposit Scheme 20,297,593 12,929,363
Mudaraba Gift Cheque 389,572 214,642
Agent Savings A/C-Mobile Bank 1,476,610 1,154,074
Mudaraba New Generation Savings Scheme 6,254,544 5,376,647
Mudaraba New Generation Deposit Scheme 5,743,907 3,934,890
Mudaraba Shramajibi Savings 5,437,520 4,537,833
Mudaraba Cash [Link] Scheme 127,105 204,787
Agent Banking Saving A/C 224,224 -
Agent Banking Float A/C 649,929 -
19,861,215,970 19,070,214,244

25 INCOME FROM INVESTMENT IN SHARES & SECURITIES

Bangladesh Govt. Islamic Investment Bond 66,551,170 -

Dividend on Shares 7,427,987 10,152,597
Profit on Sale of Shares 19,627,877 22,258,351
Profit Received on MSB 42,000,000 32,420,548
Loss on Sale of Shares - (37,757,300)
135,607,034 27,074,196

25(a) CONSOLIDATED INCOME FROM INVESTMENT IN SHARES & SECURITIES

First Security Islami Bank Limited (Note-25) 135,607,034 27,074,196

First Security Islami Capital & Investment Limited 18,224,831 (90,712,419)
153,831,865 (63,638,223)

26 COMMISSION, EXCHANGE AND BROKERAGE

Commission 570,921,096 354,257,849

Exchange Gain 225,167,660 90,731,379
Exchange Earning 280,484,044 120,420,301
Less: Exchange Loss 55,316,384 29,688,922
 2017 2016
BDT BDT
796,088,756 444,989,228

26(a) CONSOLIDATED COMMISSION, EXCHANGE AND BROKERAGE

First Security Islami Bank Limited (Note-26) 796,088,756 444,989,228

First Security Islami Capital & Investment Limited 56,872,198 57,163,292
852,960,954 502,152,520
27 OTHER OPERATING INCOME

Charges on Account Closing 9,182,696 7,446,709

Standing Instruction Charges 6,271,125 3,805,754
Gain/(Loss) on Sale of Fixed Assets (11,492,856) 2,123,302
Service Charge on HP 17,400 196,600
Service Charge on Quard 3,341,529 5,971,817
Other Income ( Note-27.1) 420,176,137 351,777,940
427,496,031 371,322,122

27.1 Other Income

Postage Recoveries - Local 101,154 110,041

Tel/Fax/E-mail Chg. Recoveries 16,796,550 16,227,518
Incidental Charge on Al-Wadiah CD A/C 33,041,139 29,679,579
Incidental Charge on Mudaraba SB A/C 71,788,053 60,442,354
Incidental Charge on Mudaraba SND A/C 7,582,207 6,905,889
Income from Online 22,314,071 17,358,510
Investment Processing Fee 29,944,272 29,217,487
Income from ATM 31,921,063 31,829,521
Income from SMS Banking Services 97,571,571 75,226,783
Income from Internet Banking Services 836,800 546,800
Miscellaneous Earnings 108,279,257 84,233,458
420,176,137 351,777,940

27(a) CONSOLIDATED OTHER OPERATING INCOME

First Security Islami Bank Limited (Note-27) 427,496,031 371,322,122

First Security Islami Capital & Investment Limited 3,164,850 3,044,750
430,660,881 374,366,872
28 SALARY & ALLOWANCES

Basic Salary 845,585,711 719,537,459

Bonus 374,944,471 236,229,370
Allowances 1,291,821,789 1,149,840,640
Bank's Contribution to Staff Provident Fund 67,542,583 60,260,638
Gratuity 88,171,765 61,402,970
2,668,066,319 2,227,271,077
28(a) CONSOLIDATED SALARY & ALLOWANCES

First Security Islami Bank Limited (Note-28) 2,668,066,319 2,227,271,077

First Security Islami Capital & Investment Limited 18,515,310 16,036,387
2,686,581,629 2,243,307,464

29 RENT, TAXES, INSURANCE, ELECTRICITY ETC.

Rent 332,504,118 283,137,068

Insurance 151,356,875 142,419,317
Rates and Taxes 9,046,778 8,216,309
Water Charges 3,761,607 3,091,995
Gas Charges 1,932,652 1,423,924
Electric Bills 73,007,634 73,780,256
 2017 2016
BDT BDT
571,609,664 512,068,869

29(a) CONSOLIDATED RENT, TAXES, INSURANCE,ELECTRICITY ETC.

First Security Islami Bank Limited (Note-29) 571,609,664 512,068,869

First Security Islami Capital & Investment Limited 5,513,760 5,139,678
577,123,424 517,208,547

30 LEGAL EXPENSES

Legal fee & charges 438,297 373,066

Other legal expenses 7,296,625 5,904,175
7,734,922 6,277,241

30(a) CONSOLIDATED LEGAL EXPENSES

First Security Islami Bank Limited (Note-30) 7,734,922 6,277,241

First Security Islami Capital & Investment Limited 972,900 147,500
8,707,822 6,424,741

31 POSTAGE, STAMP AND TELECOMMUNICATION ETC.

Postage 7,783,389 7,291,776

Stamp 100,792 109,860
Telephone - Office 9,806,401 9,467,582
Telex, Fax and Email 6,525,032 5,323,031
Telephone - Residence 11,353 26,576
Data Communication 63,280,333 64,163,065
87,507,300 86,381,890

31 (a) CONSOLIDATED POSTAGE, STAMP AND TELECOMMUNICATION ETC.

First Security Islami Bank Limited (Note-31) 87,507,300 86,381,890

First Security Islami Capital & Investment Limited 378,546 182,249
87,885,846 86,564,139

32 STATIONERY, PRINTING AND ADVERTISEMENT ETC.

Publicity and Advertisement 131,864,389 130,606,935

Printing and Stationery 47,477,815 53,259,009
Computer Stationery 3,303,817 6,066,286
182,646,021 189,932,230

32 (a) CONSOLIDATED STATIONERY, PRINTING AND ADVERTISEMENT ETC.

First Security Islami Bank Limited (Note-32) 182,646,021 189,932,230

First Security Islami Capital & Investment Limited 390,544 318,727
183,036,565 190,250,957

33 MANAGING DIRECTOR'S SALARY AND FEES

Basic Pay 3,867,339 3,362,903

House Rent Allowances 1,440,000 1,440,000
Leave Fare Allowances 1,200,000 1,200,000
Bonus 1,727,375 1,632,500
House Maintenance Allowances 1,500,000 1,500,000
Other Allowances 1,260,000 1,260,000
 2017 2016
BDT BDT
10,994,714 10,395,403

34 DIRECTORS' FEES & EXPENSES

Directors Fees 1,278,800 1,444,400

Meeting Expenses 144,000 736,000
1,422,800 2,180,400

34 (a) CONSOLIDATED DIRECTORS' FEES & EXPENSES

First Security Islami Bank Limited (Note-34) 1,422,800 2,180,400

First Security Islami Capital & Investment Limited 475,000 675,000
1,897,800 2,855,400

35 SHARIAH SUPERVISORY COMMITTEE'S FEES & EXPENSES

Shariah Council Meeting Expenses 64,000 184,000

64,000 184,000

36 CONSOLIDATED AUDITORS' FEES

First Security Islami Bank Limited 862,500 730,250

First Security Islami Capital & Investment Limited 143,750 143,750
1,006,250 874,000

37 DEPRECIATION AND REPAIRS OF BANK'S ASSETS

Depreciation on Fixed Assets (Annexure - A) 370,609,044 348,035,961

Repairs: 73,779,308 63,659,009
Office equipment 16,694,469 15,867,176
Renovation and Repair of Office Premises 12,239,970 11,561,743
Furniture and Fixtures 1,284,636 1,121,988
Maintenance and Services of SWIFT 366,927 631,076
Maintenance of Routers 1,855,335 1,783,421
Elect. Fitt. Rep. & Replacement 4,836,049 4,266,309
Office Maintenance Expenses 17,455,034 14,362,971
Maintenance of Software 9,392,337 8,685,096
Maintenance Expenses of ATM Machine 7,453,285 5,379,229
Maintenance of Disaster Recovery Site 2,201,266 -
444,388,352 411,694,970

37 (a) CONSOLIDATED DEPRECIATION AND REPAIRS OF FIXED ASSETS

First Security Islami Bank Limited (Note-37) 444,388,352 411,694,970

First Security Islami Capital & Investment Limited 10,672,420 12,611,210
455,060,772 424,306,180
 2017 2016
BDT BDT

38 OTHER EXPENSES

Training, Seminar and Workshop 10,939,930 9,484,612

Entertainment 44,679,648 37,664,188
Traveling 36,406,455 24,407,523
Donation 265,086,264 266,523,319
Subscription 22,626,741 20,418,342
Newspaper and Periodicals 3,133,376 728,752
Wages 317,794,294 267,107,211
Conveyance 11,490,513 11,198,381
Business Development 75,171,141 60,471,090
Plantation 1,872,453 1,796,514
Liveries and Uniform 2,547,387 2,168,280
Photocopying 5,066,965 5,464,354
Generator Fuel 8,938,473 9,820,350
Car Expense 17,026,657 16,460,577
Cash Carrying 18,201,725 17,178,440
Washing and Cleaning 3,414,887 4,136,869
Cartage and Freight 44,520 43,035
Office Maintenance 571,801 500,100
ATM Expenses 20,779,877 20,079,579
Meeting Expenses 12,132,766 7,410,895
Recruitment Expenses - 2,554,618
Mobile Financial Service Expense 13,569,792 12,142,638
Bank Charges 544,721 60,676
Sundry Expenses 17,623,530 3,644,235
909,663,916 801,464,578

38 (a) CONSOLIDATED OTHER EXPENSES

First Security Islami Bank Limited (Note-38) 909,663,916 801,464,578

First Security Islami Capital & Investment Limited 44,530,354 75,231,889
954,194,270 876,696,467

39 DEFERRED TAX INCOME/(EXPENSE)

Closing balance of Deferred Tax Assets 250,828,024 197,233,000
Less: Opening balance of Deferred Tax Assets (197,233,000) (197,233,000)
Deferred Tax Income during the year 53,595,024 -

40 EARNINGS PER SHARE

Profit after taxation 1,309,146,282 1,404,982,582

Less: Preference dividend - -
Profit attributable to ordinary shareholders 1,309,146,282 1,404,982,582
Weighted average number of shares outstanding 712,817,582 712,817,582
Earnings Per Share (EPS) (Restated) 1.84 1.97

Earnings per share has been calculated as per BAS-33: "Earnings Per Share".
 2017 2016
BDT BDT

40 (a) CONSOLIDATED EARNINGS PER SHARE

Profit after taxation 1,389,925,900 1,410,330,230
Less: Preference dividend - -
Less: Profit attributable to Minority 39,582,013 2,620,348
Profit attributable to ordinary shareholders of parent 1,350,343,887 1,407,709,882
Weighted average number of shares outstanding 712,817,582 712,817,582
Earnings Per Share (EPS) (Restated) 1.89 1.97

Earnings Per Share (EPS) has been calculated as per BAS-33 "Earnings Per Share".

As per BAS-33 "Earnings Per Share", has been computed by dividing the profit After Tax (PAT) by the weighted
average number of ordinary share outstanding as on 31 December 2017. Diluted earnings per share was not
required to calculate as there were no dilution possibilities during the year.

41 RECEIPTS FROM OTHER OPERATING ACTIVITIES

Charges on Account Closing 9,182,696 7,446,709

Standing Instruction Charges 6,271,125 3,805,754
Service Charge on HP 17,400 196,600
Service Charge on Quard 3,341,529 5,971,817
Other Income(26.1) 420,176,137 351,777,940
438,988,887 369,198,820

41 (a) CONSOLIDATED RECEIPTS FROM OTHER OPERATING ACTIVITIES

First Security Islami Bank Limited (Note-41) 438,988,887 369,198,820
First Security Islami Capital & Investment Limited 21,389,681 3,044,750
460,378,568 372,243,570
42 PAYMENT FOR OTHER OPERATING ACTIVITIES

Rent, Taxes, Insurances, Electricity etc. 571,609,664 512,068,869

Legal Expenses 7,734,922 6,277,241
Postage, Stamps, Telecommunications etc. 87,507,300 86,381,890
Auditors' Fees & Expenses 730,250 730,250
Directors' fees 1,422,800 2,180,400
Shariah Supervisory Committee's Fees & Expenses 64,000 184,000
Other Expenses 909,663,916 801,464,578
1,578,732,852 1,409,287,228
42 (a) CONSOLIDATED PAYMENT FOR OTHER OPERATING ACTIVITIES

First Security Islami Bank Limited (Note-42) 1,578,732,852 1,409,287,228

First Security Islami Capital & Investment Limited 53,814,084 84,165,992
1,632,546,936 1,493,453,220
43 INCREASE /DECREASE OF OTHER ASSETS
Accrued Income 802,817,226 931,679,426
Advances, Deposits and Prepayment 3,498,596,709 2,899,831,451
Stock of Stationery 37,737,078 34,380,488
Suspense Account 29,108,446 70,078,826
Advance Deposits 44,924,033 34,560,166
Stamps on Hand 3,225,705 3,003,832
Protested Bills 61,272,443 61,272,443
Agent Banking Asset 1,483,459 -
 2017 2016
BDT BDT
4,479,165,099 4,034,806,632
(Increase)/Decrease during the year (444,358,467) 714,794,959

43 (a) CONSOLIDATED INCREASE /DECREASE OF OTHER ASSETS

First Security Islami Bank Limited (Note-43) (444,358,467) 714,794,959

First Security Islami Capital & Investment Limited (258,448,748) 740,562,097
(702,807,215) 1,455,357,056

44 INCREASE /DECREASE OF OTHER LIABILITIES

Profit/Rent/Compensation Suspense Account 371,647,708 228,426,381

Accrued profit and Expenses Payable 3,212,947,331 2,954,999,589
Provident Fund 4,933 16,053
Benevolent Fund 3,233 2,483
Non-Resident Accounts 13,795,112 20,982,677
Compensation Realized 21,620,054 19,692,726
Others 18,378,721 24,207,751
3,638,397,092 3,248,327,660
Increase /(Decrease) during the year 390,069,433 (287,662,400)

44 (a) CONSOLIDATED INCREASE /DECREASE OF OTHER LIABILITIES

First Security Islami Bank Limited (Note-44) 390,069,433 (287,662,400)

First Security Islami Capital & Investment Limited 170,797,836 (29,543,143)
560,867,269 (317,205,543)
 GENERAL DISCLOSURE:
45 RELATED PARTY TRANSACTIONS
During the year, the Bank carried out some transactions with related party in the normal course of business and on an
arm's length basis. The name of this related party, nature of this transaction and total value has been set out in
accordance with provisions of Bangladesh Accounting Standard 24 (BAS: 24) Related Party disclosure and as defined in
the BRPD Circular no. 14 issued by the Bangladesh Bank on June 25, 2003. The significant related party transactions
during the year were as follows:
i) Significant Contracts where Bank is a Party and wherein Directors have Interest

Nature of Nature of
Name of the Party Total Value (in BDT.)
Transaction Relationship

Northern General Insurance Insurance

Common Director 9,016,825
Company Ltd. Premium
Northern General Insurance
Deposit Common Director 30,153,561
Company Ltd.
Reliance Finance Ltd. Deposit Common Director 9,545,986
Balance with
Reliance Finance Ltd. Common Director 13,603,700,000
NBFI(MTDR)
Subordinated
Reliance Finance Ltd. Common Director 400,000,000
Bond
First Security Islami Capital & Deposit Common Director 14,743,708
Investment Limited

First Security Islami Capital & Investment Common Director 241,148,005

Investment Limited

ii) Related Party Transactions Nil

iii) Shares issued to Directors and Executives without consideration or

Nil
exercisable at discount

iv) Lending to Related Parties is effected as per requirements of Section 27 (1)

Nil
of the Bank Companies Act, 1991.

v) Business other than banking business with any related concern of the
Directors as per Section 18(2) of the Bank Companies Act, 1991 (as amended Nil
2013)

vi) Investment in the Securities of Directors and their related concern. Nil

45.01Compensation of key management personnel:

MANAGING DIRECTOR'S SALARY AND FEES

2017 2016
Basic Pay 3,867,339 3,362,903
House Rent Allowances 1,440,000 1,440,000
Leave Fare Allowances 1,200,000 1,200,000
Bonus 1,727,375 1,632,500
House Maintenance Allowances 1,500,000 1,500,000
Other Allowances 1,260,000 1,260,000
10,994,714 10,395,403
46 DIRECTORS' INTEREST IN DIFFERENT BUSINESSES OR ENTITIES:

Names of firms/companies in which interested as

Sl. Status with the
Name of the Directors proprietor, partner, director, managing agent,
No. Bank
guarantor, employee, etc.
1 Mohammed Saiful Alam Chairman Chairman/Board of Director:
First Security Islami Capital & Investment Ltd.
Reliance Finance Ltd.
S. S. Power I Limited
Reliance Brokerage Services Ltd.
Ekushey Television Ltd.
Karnaphuli Prakritik Gas Ltd.
Norinco Engineering Ltd.
Managing Director:
S. Alam Steels Ltd.
S. Alam Cement Ltd.
S. Alam Brothers Ltd.
S. Alam Hatchery Ltd.
S. Alam Trading Company (Pvt.) Ltd.
S. Alam Bag Manufacturing Mills Ltd.
S. Alam Soyaseed Extraction Plant Ltd.
S. Alam Refined Sugar Industries Ltd.
S. Alam Cold Rolled Steels Ltd.
S. Alam Luxury Chair Coach Services Ltd.
S. Alam Power Generation Ltd.
S. Alam Tank Terminal Ltd.
S. Alam Properties Ltd.
Sonali Cargo Logistics (Pvt.) Ltd.
Fatehabad Farm Ltd.
Portman Cements Ltd.
Rangdhanu Media Limited
Director:
Northern General Insurance Co. Ltd.
Sponsor Shareholder:
Al-Arafah Islami Bank Ltd.
S. Alam Super Edible Oil Ltd.
S. Alam Vegetable Oil Ltd.
Proprietor:
S. Alam & Co.
 Names of firms/companies in which interested as
Sl. Status with the
Name of the Directors proprietor, partner, director, managing agent,
No Bank
guarantor, employee, etc.
2 Mohammed Abdul Maleque Vice-Chairman Chairman:
Jesco Capital Management Ltd.
ABM Tower Ltd.
Bengal Center Ltd.
Chairman & Managing Director :
Jesco Bangladesh Ltd.
Kharana Fish & Poultry Ltd.
Managing Director :
Chittagong Board and Paper Mills Ltd.
Director :
Central Hospital Ltd.
First Security Islami Capital & Investment Ltd.
Ex-Chairman & Sponsor Shareholder :
Central Insurance Co. Ltd.
Ex-Director :
Chittagong Chamber of Commerce & Industry
Proprietor :
M/S. Bengal Corporation
M/S. Bengal Trading
M/S. Lucky Electronics

3 Ms. Farzana Parveen Director Chairman/Board of Director

Rangdhanu Media Limited
Director:
First Security Islami Capital & Investment Ltd.
Reliance Finance Ltd.
S. S. Power I Limited
Reliance Brokerage Services Ltd.
S. Alam Vegetable Oil Ltd.
Prasad Paradise Resorts Ltd.
S. Alam Power Plant Ltd.
S. Alam Properties Ltd.
Sonali Cargo Logistics (Pvt.) Ltd.
Norinco Engineering Ltd.
Shareholder:
S. Alam Steels Ltd.
S. Alam Cold Rolled Steels Ltd.
Union Bank Ltd.
Ekushey Television Ltd.
Proprietor:
 Fairy Trade International

Names of firms/companies in which interested as

Sl. Status with the
Name of the Directors proprietor, partner, director, managing agent,
No Bank
guarantor, employee, etc.
4 Ms. Rahima Begum Director Chairman:
Marsa Aviation Ltd.
M/s. Mortoza Assets Ltd.
Marsa Transport Ltd.
Managing Director :
Marsa Fishing Ltd.
Director:
Marsa Food & Beverage Ltd.

5 Ms. Atikur Nesa Director Proprietor:

Atiqur Nisa Enterprise
Partner:
Rafe Enterprise
Khorshed Paribahan Sangstha
Shareholder:
Reliance Finance Ltd.

6 Mohammad Ishaque Independent A retired Bureaucrat.

Director Independent Director
S. Alam Cold Rolled Steels Ltd.

7 Ahmed Muktadir Arif Independent Brigadier General (Retired)

Director Bangladesh Army.

8 Khandkar Iftekhar Ahmad Nominated Air Commodore ( Retired)

Director (Pusti Bangladesh Air Force.
Vegetable Ghee
Ltd.)

9 Ms. Rakiba Nabi Independent University Teacher

Director Associate Professor

10 Dr. Momtaz Uddin Ahmed Independent University Teacher

Director Honorary Professor

11 Mortuza Siddique Chowdhury Director Chairman:

Marsa Holdings Ltd.
Marsa Fishing Ltd.
Vice-Chairman:
Park View Hospitals Ltd.
Managing Director:
M/s. Mortoza Assets Ltd.
Proprietor:
Marsa Trading
47 AUDIT COMMITTEE

a) Constitution:
The Bank has constituted an Audit Committee of the Board of Directors pursuant to the BRPD circular no. 11 dated 27
October 2013 with a view to act as a bridge among the Board of Directors, Executive Authority, Depositors, Shareholders
etc so that the Committee can make an effective role in establishing an efficient, strong and secured banking system. Our
Audit Committee has been formed comprising three members of the Board of Directors as follows :

Name Status with the Bank Status with the Committee

Independent
Ahmed Muktadir Arif Chairman
Director
Independent
Mohammad Ishaque Member
Director
Independent
Dr. Momtaz Uddin Ahmed Member
Director

b) During the year under review, the Audit Committee of the Board conducted 05 (Five) meetings.

c) The following steps have been taken for implementation of an effective Internal Control Procedure of the Bank:

A strong powerful division formed for internal audit and inspection as well as compliance thereof.

The division is divided into three separate units i.e. Audit & Inspection, compliance and Monitoring to implement
effective internal control and compliances headed by highly experienced bankers.

Audit and Inspection unit is established with a view to carrying out comprehensive internal audit in the branch level and
ensure the transparency and accountability in the banking operations in light of the guidelines of the regulatory
authorities and policies set by the bank with regular intervals.

Monitoring Unit is established with a view to implementing proper banking practices in the branches. Day to day
operations is the focusing area to implement the rules and procedures of the regulatory bodies, bank’s policies and other
prudential guidelines.

Compliance unit is established to take effective measures for collection and timely submission of compliances of internal,
external and Bangladesh Bank Inspection Reports.

The committee is placing its report regularly to the Board of Directors of the bank mentioning its review and
recommendations on internal system, compliance of rules and regulations and establishment of good governance within
the organization.
The board has given the responsibility to implement internal control system in the bank as per requirement of core risk
management and framework provided by the Bangladesh Bank.

48 APPROVAL OF FINANCIAL STATEMENTS AND EVENTS AFTER THE BALANCE SHEET DATE

The financial statements were approved by the Board of Directors in its 196 th meeting held on 25 April 2018. The Board
of Directors in its 196 th meeting held on 25 April 2018 recommended 10% stock dividend for eligible shareholders for the
year 2017 to be approved in the Annual General Meeting.

Other than the mentioned above issue, no material events which have occurred after the reporting period which could
affect the values stated.
49 Number of Employees
The number of employees including contractual engaged for the whole year or part.
2017 2016
Executives and Officers 2,993 2,653
Members of Staff (Contractual) 647 571
3,640 3,224
50 Coverage of External Audit:

The external auditor of the Bank, A. Qasem & Co., Chartered Accountants and Hoda Vasi Chowdhury & Co., Chartered
Accountants worked about in excess of 1,500 man hour at head office. During their audit, they audited above 80% of the
Bank's risk weighted assets as on the Balance Sheet date.

51 Share Trading
The bank traded its ordinary shares in Central Depository Bangladesh Limited (CDBL) through Dhaka Stock Exchange
(DSE) and Chittagong Stock Exchange (CSE). The closing market price on 31 December 2017 was Tk. 15.30 at Dhaka Stock
Exchange (DSE) and Tk. 15.20 at Chittagong Stock Exchange (CSE).

Managing Director Director Director Chairman

Dated, Dhaka
Wednesday, April 25, 2018
 Annexure - A
FIRST SECURITY ISLAMI BANK LIMITED
Statement of Fixed Assets
As at 31 December 2017

Figure in BDT
C O S T D E P R E C I A T I O N
Written down value
Particulars Adjustment on on
Balance as on Addition during Sales/Transfer Balance as on Balance as on Charge for the Balance as on
sale/transfer
01 January 2017 the Year during the Year 31 December 2017 01 January 2017 Year 31 December 2017 31 December 2017
during the Year
Land 96,546,000 - - 96,546,000 - - - - 96,546,000
Building 1,429,210,470 - - 1,429,210,470 130,952,604 35,730,262 - 166,682,866 1,262,527,604
Furniture & Fixtures 1,805,533,437 192,434,780 47,233,417 1,950,734,800 621,324,937 126,546,611 34,587,647 713,283,901 1,237,450,899
Office Equipment 1,312,547,552 178,708,018 13,035,515 1,478,220,055 643,109,204 151,560,572 9,382,040 785,287,736 692,932,319
Vehicles 218,216,802 12,284,668 11,482,336 219,019,134 109,175,827 37,157,351 10,085,808 136,247,370 82,771,764
Books 613,025 1,843 - 614,868 410,239 38,846 - 449,085 165,783
Total 4,862,667,286 383,429,309 71,751,268 5,174,345,327 1,504,972,811 351,033,642 54,055,495 1,801,950,958 3,372,394,369

Software-Amortization

Software -Core Banking 137,531,195 38,156,000 - 175,687,195 64,494,731 19,575,402 - 84,070,133 91,617,062

Total Dec' 2017 5,000,198,481 421,585,309 71,751,268 5,350,032,522 1,569,467,542 370,609,044 54,055,495 1,886,021,091 3,464,011,431

Total Dec' 2016 4,464,459,044 538,803,508 3,064,071 5,000,198,481 1,224,495,649 348,035,961 3,064,068 1,569,467,542 3,430,730,939
 Annexure - B
First Security Islami Bank Limited
Financial Highlights
As at and for the year ended 31 December 2017

SL # Particulars 2017 2016

1 Paid-up Capital 7,128,175,820 6,788,738,880
2 Total Capital Fund 19,642,357,093 14,218,151,190
3 Capital Surplus/(deficit) 3,281,445,923 692,045,336
4 Total Assets 343,739,479,294 301,228,474,940
5 Total Deposits 299,120,844,464 274,252,894,129
6 Total Investments 273,593,618,710 226,065,271,502
7 Total Contingent Liabilities and Commitments 41,263,419,860 33,568,776,518
8 Investment Deposit Ratio (in %) * 87.78% 82.43%
Percentage of Classified Investments against total
9 3.07% 2.58%
Investments(in %)
10 Profit after tax & provision 1,309,146,282 1,404,982,582
11 Amount of Classified Investments 8,397,744,459 5,839,243,414
12 Provision kept against Classified Investments 4,001,767,394 2,513,635,000
13 Provision Surplus/(deficit) - 3,380,701
14 Cost of Fund 8.62% 9.21%
15 Profit Earning Assets 303,742,528,273 255,875,394,343
16 Non-profit Earning Assets 39,996,951,021 45,353,080,597
17 Return on Investment in Shares & securities(ROI)(in %) 0.88% 0.19%
18 Return on Assets (ROA)(in %) 0.41% 0.50%
19 Income from Investment in Shares and Securities 135,607,034 27,074,196
20 Earnings Per Share (Tk.) 1.84 1.97
21 Net Income Per Share (Tk.) 1.84 1.97
22 Price Earnings Ratio (Times) 8.33 7.05
* Investment Deposit ratio has been computed as per Bangladesh Bank guideline.