Ebl Revised Rod

1 Eastern Bank Limited

RIGHTS SHARE OFFER DOCUMENT

Date 18th November 2008

For Rights Offer of 6,934,500 Ordinary Shares of Tk.100 each at par amounting Tk.693,450,000 offered on the basis of 2:1 (i.e one rights share against two existing shares held)

SUBSCRIPTION Opens on : 01/01/2009 Closes on : 22/01/2009 (within banking hours)

RECORD DATE 15th December 2008

CREDIT RATING STATUS

Long Term: “A+”

Short Term: “ST-3”

Date of Rating: 15th June 2008

RATING ASSIGNED BY: CRISL

MANAGER TO THE ISSUE

Prime Bank Limited Head Office: 119-120 Motijheel Com. Area, Dhaka-1000

Merchant Banking & Investment Division: Peoples Insurance Bhaban (11th Floor)

36, Dilkusha C/A, Dhaka-1000 Tel: 9555674, 9557688, Fax: 880-2-9559257

FULLY UNDERWRITTEN BY

Equity Partners Limited 1003, Dhaka Stock Exchange Annex Building, (9th Floor), 9/E Motijheel C/A, Dhaka-1000

LankaBangla Finance Limited Safura Tower (Level 11) 20, Kamel Ataturk Avenue, Banani, Dhaka-1213

Fidelity Assets & Securities Company Limited Suvastu Imam Square (4th Floor), 65 Gulshan Avenue, Gulshan, Dhaka-1212

Banco Trans World (Bangladesh) Limited Ispahani Building (3rd Floor), 14-15 Motijheel C/A, Dhaka-1000

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

Eastern Bank Limited Registered Office

10, Dilkusha C/A Dhaka-1000, Bangladesh

Tel: 880-2-9556360 Telex: 642951, 642482 EBLD BJ

Fax: 880-2-9562364, 9554610 E-mail:[email protected] SWIFT : EBLDBDDH

Cable: EASTBANK Web: www.ebl.com.bd


RIGHTS ISSUE OF SHARES December 15, 2008 Dear Shareholder(s) We are pleased to inform you that the shareholders of the Bank in the Annual General Meeting held on 25th May 2008 decided to issue Rights Shares 69,34,500 Ordinary Shares of Tk.100 each at par amounting Tk.693,450,000 offered on the basis of 2:1 (i.e. one rights share against two existing shares held). The purpose of issuance of Rights Shares is to strengthen capital adequacy as well as expansion business of the Bank. Due to satisfactory activities and services, the Bank has earned an operating income of Tk.791,490,162 for the period ended March 31, 2008 and Tk.2,820,667,205 for the year ended on 31-12-2007. This success has been achieved due to efficient conduct of investable funds by the management under the direction of the Board of Directors as well as patronization and active participation of all our valued shareholders and customers. To maintain further growth and increase the capital base of your Bank, we hope you would come forward with your full support and assistance to make the offer a success. A self-explanatory Rights Share Offer Document prepared in the light of the Securities and Exchange Commission (Rights Issue) Rules, 2006 of the Securities and Exchange Commission is enclosed herewith for your kind information and evaluation. On behalf of the Board of Directors Sd/- Ali Reza Iftekhar Managing Director & CEO


THE RIGHTS SHARE OFFER

The Bank Eastern Bank Limited was formed on August 08, 1992 and commenced its business as a scheduled bank with effect from August 16, 1992. EBL started its operation with one Head Office, two branches at Dhaka and one branch at Chittagong. Its shares are listed with Dhaka and Chittagong Stock Exchange(s) Limited and are being quoted in the market regularly.

One of the objectives behind creation of this new Bank was to give effect to the Bank of Credit & Commerce International (Overseas) Limited in Bangladesh (Reconstruction) Scheme, 1992 framed by the Bangladesh Bank under Section 77(4) of the Bank Company Act. Under the Scheme, the entire business, assets and liabilities of the branches of erstwhile BCCI in Bangladesh, as these stood after reduction or adjustment in accordance with the provisions of the Scheme, were vested in the Bank. CAPITAL STRUCTURE & SHARE HOLDERS In terms of Article 4 of Articles of Association and Clause 4 of the Scheme, the Authorized Capital of the Bank (initially) was Tk.1000 million divided into 10,000,000 shares of Tk.100 each for subscription to the Government as “KA” Group, Financial Institutions as “KHA” Group & erstwhile BCCI depositors as Group as “GA”Group shareholders at the percentage of 20, 40 and 40 respectively but at present Authorized Capital of the Bank is Tk.3300 Million. As per Clause 4(2) initial paid up capital was fixed at Tk.600 million which was offered to the above groups of shareholders at the percentage mention above. The Government of Bangladesh subscribed the entire amount of Tk.120 million while the Financial Institutions subscribed to the extent of Tk.190 million only. The balance amount of Tk.50 million was allotted to the depositors of erstwhile BCCI. Applications for shares from the depositors were invited on September 13, 1992 and were received until October 15, 1992. In response, share application money amounting to Tk.346,090,000 was received from the depositors. In terms of decisions of the Board of Directors of the Bank, dated March 06, 1993, shares were allotted to the successful applicants for an amount of Tk.290 million. Number of branches as on 31 March 2008 were 30 (thirty). The Rights Issue The Board of Directors of the bank in its 392nd Board meeting held on 1st April 2008 recommended for declaration of Stock Dividend of 34% for the year ended 31st December 2007 (Tk.351,900,000 i.e. 35,19,000 bonus shares of Tk.100 each) on the paid-up-capital Tk.1,035,000,000. Simultaneously, decided to raise paid-up-capital by Tk.693,450,000 through a rights issue of 6,934,500 ordinary shares of Tk.100 each at par at a ratio of 1:2 (one new share for two existing shares held) on the basis of paid-up-capital Tk.1,386,900,000 after crediting bonus shares (Tk.351,900,000) for the year 2007.

Issue Price The Issue Price per share has been fixed in the Annual General Meeting of the Bank held on May 25, 2008 at Tk.100 each at par.


HIGHLIGHTS OF THE BANK 1. EBL was formed as a public limited company incorporated in Bangladesh with

primary objective to carry on all kinds of banking business in and outside Bangladesh.

2. EBL commenced its business with four branches from 16 August 1992. 3. EBL is listed in the Dhaka Stock Exchange Limited and Chittagong Stock

Exchange Limited. 4. The authorized capital of the bank is Tk.3300 million and paid-up capital is

Tk.1,035 million as on March 31, 2008 5. EBL had 30 branches, 26 own ATMs, 65(91-26) shared Q-cash ATMs (excluding

ours) and 5 Bills pay machines across the country. EBL also had 68,772 debit cards (First of its kind in Bangladesh), 1,228 cool cards and 5,845 Lifestyle cards at the period end 31 March 2008

6. The bank has a network of 30 branches on March 31, 2008 7. Total equity structure of the bank as on March 31, 2008 is shown below:

Shareholders Equity 31.03.2008 31.12.2007 Paid up Capital** 1,035,000,000 1,035,000,000Statutory reserve 1,035,000,000 1,035,000,000Dividend Equalization Reserve 356,040,000 356,040,000Reserve against Pre-Take over loss 1,554,759,750 1,554,759,750Pre-take over loss (1,211,934,675) (1,214,087,213)Assets revaluation reserve 405,015,050 405,015,050Reserve for revaluation of Treasury Bills (HTM)

28,180,168 28,180,168

Reserve for Building Fund 60,000,000 60,000,000General reserve 100,000,000 100,000,000Proposed dividend 351,900,000 351,900,000Retained earnings 180,412,393 ----Total shareholders equity 3,894,372,686 3,711,807,755

**At present paid up Capital is Tk.1,035,000,000 excluding the stock dividend @34% for the year 2007. After crediting the bonus shares @34% for the year 2007, the paid up capital of the Bank stands at Tk.1,386,900,000. Additional information i Market Price per share as on 30 December 2007 Tk.1070.75 ii Market Price per share as on 31 January 2008 Tk.1039.00 iii Market Price per share as on 28 February 2008 Tk.1023.00 iv. Market Price per share as on 31 March 2008 Tk.1001.50 v. Market Price per share as on 30 April 2008 Tk.854.75 vi. Market Price per share as on 30 May 2008 Tk.972.00


RISK FACTORS AND MANAGEMENT’S PLAN FOR REDUCTION OF SUCH RISKS Credit Risk: Credit risk is defined as the potential that a bank borrower may fail to meet its obligations in accordance with agreed terms which will ultimately reduce bank’s profitability and share holders return. There are three components in credit risk which are: What is the likelihood that the counterparty will default on its obligation either over the life of the obligation or over some specified horizon, such as a year? In the event of a default, how large will the outstanding obligation be when the default occurs? In the event of a default, what fraction of the exposure may be recovered through bankruptcy proceedings or some other form of settlement? Bank has established different level of approval authority for each loan application, depending on the size of business and length of credit line. Bank approves each loan considering purpose of loan application, the repayment ability of the applicant, business feasibility, management capacity and collateral. Its credit risk management system is designed to identify and analyze risks at early stage and to set and monitor prudent limits, to learn ad evolve continuously to face a rapidly changing risk environment. Interest Risk: Profitability of the bank depends largely on net interest income, which is the difference between the interest banks receives from loans and investments and the interest bank pays on deposit liabilities and borrowings. Changes in interest rates may adversely affect bank’s profitability by narrowing or eliminating spread. Interest rates are sensitive to many factors, including general economic conditions and the policies of government and regulatory authorities. Although bank can not avoid all adverse impacts of changes in interest rate, arises due to change in economic conditions or government regulation, but the bank takes all available measures to insulate its profitability. Bank’s has an Asset and Liability Committee (ALCO) for monitoring and maintaining interest rate risk at a minimum level with minimum fluctuation through interest rate sensitivity analysis. Foreign Exchange Rate Risk: Foreign exchange rate risk arises when the Bank is involved in foreign currency transactions, which may result in deficits or surpluses in the Bank's foreign currency position. These transactions include, for instance, foreign currency exchange, investments, loans, borrowings and contractual commitments, etc. They may incur gains or losses on exchanges as a result of movements in exchange rates and thus profitability of the bank may be reduced.

In general, the Bank's policy is to match foreign currency assets and liabilities following strictly the overnight limit of open position issued by the central bank. The Treasury Division manages and controls day-to-day trading activities under the supervision of ALCO which in turn ensures that the level of assumed risks, as per the various designated measures, is maintained within the approved level.


Liquidity Risk Liquidity is the risk that the bank may not be able to meet cash flow obligation within a stipulated time. The bank may lose liquidity if its credit rating falls, it experiences sudden unexpected cash outflows, or some other event causes counterparties to avoid trading with or lending to the institution.

The bank has a liquidity risk management system, dedicated to maintain suitable and sufficient funds to meet present and future liquidity obligations whilst utilizing the funds appropriately to take advantage of market opportunities as they arise. Bank manages its liquidity mainly through domestic money and capital markets including repurchase markets. The Bank seeks to minimize its liquidity costs in line with the market situation by closely managing the liquidity position on a daily basis and restricting the holding of cash held above an appropriate level at any given time. As part of liquidity management, the Bank adheres to its funding plan, and exercises due care in using medium-term borrowings.

Capital adequacy risk

Capital adequacy risk is a risk where the Bank does not have sufficient capital reserves to do the business or to absorb unexpected losses arising from credit, market and operational risks. Bank's capital management policy is crafted to ensure that the Bank maintains an adequate level of capital to support growth strategies and meets regulatory requirements and market expectations. Commercial banks in Bangladesh will be required to comply with the Bank for International Settlements Basel II Accord by 2009, which will result in changes to capital adequacy requirements. The Basel II Accord will affect the risk weightings of different types of assets including provisioning for market and operational risks. This in turn will have a direct effect on the Bank's capital adequacy ratio. Bangladesh Bank is in the process of establishing detailed methodologies and procedures to suit the domestic market.

Operational risk Operational risk is the risk of potential losses from a breakdown in internal processes and systems, deficiencies in people and management or operational failure arising from external events.

Bank has an operational risk management framework to ensure that the Bank has in place appropriate policies, work processes and procedures. This requires gathering information pertaining to operational risks so as to avoid operational failures and minimize relevant losses; while enabling the Bank to quickly respond to and pursue new business opportunities with appropriate risk controls and monitoring. The Bank's operational risk management policy embraces the concepts of risk identification, risk assessment, risk monitoring, and risk mitigation and control. The primary responsibility for managing this risk rests with each operating unit, through the adoption of proper internal control measures in the operating environment.


DATE OF OPENING AND CLOSING OF SUBSCRIPTION LISTS

Subscription opens for the rights shares offer on 01/01/2009 and subscription closes for the rights shares offer on 22/01/2009. PURPOSE OF THE RIGHTS ISSUE

Eastern Bank Limited commenced its business with four branches from 16 August 1992. During last 15 (fifteen) years of operation the Bank has grown significantly. Total deposit of the Bank increased to the extent of Tk.31,135,824,938 & Tk.29,578,483,276 and total loans and advances of the Bank increased to the extent of Tk.32,989,735,365 & Tk.30,194,171,436 as on 31 March 2008 & 31 December 2007 respectively with thirty branches operating in the country. The bank also handles sizeable foreign exchange business. Deposit of the bank has been increasing every year and bank deploys the deposits taking into consideration the quantum of growth. Accordingly, the size of investment of the bank is also increasing every year. With the increase of Loans and Advances the risk-weighted assets of the bank are also gradually increased to raise the capital base of the Bank. Keeping this end in view, the Board of Directors as well as the shareholders in the Annual General Meeting held on May 25, 2008 decided to raise the paid-up Capital additionally by Tk.351,900,000 through issuance of bonus share and Tk.693,450,000 from issuance of Rights Share of 6,934,500 ordinary shares of Tk.100 each at a ratio of 2:1 (i.e one rights share against two existing shares held). The Bank is also getting request to open more branches all over the country. To run EBL’s business properly, it has 719 regular officials and staffs up to 31 March 2008. The Bank will further recruit manpower according to need to handle its business efficiently as and when required. UTILIZATION OF IPO FUND

No IPO/RSO fund received by the Eastern Bank Limited because the bank has been taken over the businesses, assets, liabilities and losses of erstwhile Bank of Credit & Commerce International (Overseas) Limited, (hereinafter called BCCI) branches in Bangladesh with effect from 16th August, 1992 as they stood after reduction or adjustments in accordance with the provisions of the Bank of Credit & Commerce International (Overseas) Limited (Reconstruction) Scheme, 1992, hereinafter called the Scheme. AGM related information of the Bank:

Year Date of AGM held Dividend declared 1992 9 December 1993 Nil 1993 24 December 1994 Nil 1994 14 December 1995 Nil 1995 28 November 1996 Nil 1996 20 November 1997 Nil 1997 12 November 1998 10% Cash 1998 30 August 2000 10% Cash 1999 5 August 2001 20% Stock (Bonus) 2000 14 December 2002 30% Cash 2001 14 December 2002 30% Cash


2002 8 December 2003 20% Cash, 15% Stock 2003 30 June 2004 20% Cash 2004 19 July 2005 43% Cash 2005 21 May 2006 40% Cash 2006 12 June 2007 20% Cash, 25% Stock 2007 25 May 2008 34% Stock, 2:1 Rights Share (one new share

against two shares held) at par CIB Information Mr. A.Q.I. Chowdhury, OBE, Director of the Bank (EBL) has resigned from the Office of Director on 23 October 2008 which was accepted by the Board in the Emergency Board Meeting held on 25 October 2008, as soon as he was found a loan defaulter by the CIB Department of Bangladesh Bank. A certified copy of Form-XII (Particulars of Director) has been obtained. All other Directors and Shareholders holding 5% and above shares of the Bank are free from loan default. EXISTING SERVICES RENDERED BY THE BANK Consumer Banking Products: Loan Products: EBL Jibandhara Loan: EBL Jibandhara Loan is an unsecured loan facility. Loan amount ranges from BDT 50,000 to BDT 1,000,000 at an attractive interest rate. EBL Utshab Loan: Utshab Loan is a short-term festival loan facility. Loan amount ranges from BDT 50,000 to BDT 1, 50,000 and repayable in 12-36 installments. Fast Cash: A secured loan facility against security deposit. It is a revolving credit facility and interest is charged on drawn amount. Fast Loan: An EMI based loan secured loan facility for any emergency cash need. Any individual having an FD or other securities like Wage Earner’s Bond, ICB unit certificate etc. can avail this short term personal loan with 12 - 36 months repayment period. EBL Executive Loan: Any purpose loan facility for Salaried Executives (both private sector and government service). Loan amount ranging from minimum BDT 50,000 to maximum BDT 1,000,000 and the interest rate is highly competitive. EBL Auto Loan: EBL Auto Loan is an EMI based loan facility for the purpose of purchasing cars. Loan amount ranges from BDT 350,000 to BDT 2,000,000. EBL Travel Loan: Available in secured and unsecured versions, EBL Travel Loan offers EMI based loan facility for meeting the travel related financial needs. Loan amount ranges from Tk 50,000 to Tk 500,000. EBL Education Finance Pack: EBL Education Finance Pack comprises of three unique products – EduLoan Secured, EduLoan Unsecured and EduLine. This pack is designed to meet any type of education financial need of a student. Any creditworthy person can avail the loan for his/her children or for him/herself. Loan amount is maximum BDT 10,00,000 or 95% of the cash security value.


EBL Parse loan : Partial Secured Loan facility for the individuals where one can take loan up to BDT 10,00,000 by providing 30% or 50% cash security. Loan interest rate is highly competitive and can be repayable in maximum 60 months. Deposit Products: EBL Interesting: A savings account where interest is calculated on daily basis and credited to the account on monthly basis. EBL Campus Account: This is interest bearing savings account for the students. EBL High Performance Account: Daily interest bearing product with unlimited cash withdrawal facility. Minimum balance requirement Tk 20,000 and interest is credited in to account twice a year. EBL Repeat: Monthly interest payable fixed deposit scheme with 1-3 years tenure. EBL Confidence: It is an annuity based deposit scheme with monthly installment, not exceeding Tk. 20,000 per month. Card Products: EBL Simple Credit Card: EBL Simple Credit Card is a complete Credit Card solution. This VISA branded card comes in gold and dual versions with both local and dual currency facility. Other than regular card features, EBL Simple Credit Card offers zero renewal fee, double insurance benefit, free cheque book and balance transfer options. EBL Lifestyle Card: A VISA branded local currency prepaid card that can be used at any VISA POS or ATM countrywide. A very popular product among the student segment. EBL Cool Card: This is a VISA Electron Debit Card for the student banking accounts. SME Banking Products: Loan Products: EBL Agrim: This is a short-term unsecured loan facility to meet immediate fund requirement for any business concern. Loan amount ranges from Tk. 200,000 to Tk. 9,50,000 with single shot repayment at the end of 1 to 6 months tenure. EBL Uddog: EBL Uddog is intended to finance business expansion with 50% of the loan amount in the form of fixed deposit as security. Loan amount ranges from Tk 600,000 to Tk 5,000,000 with monthly installment based repayment within maximum 60 months’ tenure. EBL Asha: This loan is intended to meet immediate business fund requirement. Loan amount ranges from Tk. 200,000 to Tk 1,000,000 and monthly installment can be payable within maximum 24 months tenure. EBL Puji: It is a long term loan for capital investment under collateral security. Loan amount ranges from Tk. 10,00,000 to Tk. 50,00,000 and the loan can be repaid within 36 months.


EBL Bannijyo: Credit facility up to BDT 20,000,000 to any legitimate import business with Nil margin LC facility. 30%-40% of total limit in the form of FD as collateral required. Monthly installment based repayment facility available. EBL Mukti: This is an unsecured loan facility is for the women entrepreneurs. Loan amount is maximum Tk. 300,000 and can be repaid in 36 installments. Deposit Products: EBL Subidha: A daily interest bearing deposit account for SME entrepreneurs. Other Services: Corporate Banking: EBL Corporate Banking is the strongest unit of the Bank where customized corporate banking solution is offered to the local and MNC corporates; highly efficient corporate team backed by cutting-edge technology and determination to serve the customers is the driving force behind the success of the EBL Corporate Banking division. Internet Banking: EBL Internet banking application addresses the needs of small, individual and corporate account holders of the bank. This application provides a comprehensive range of banking services such as Account Operations and Inquiries, Fund Transfers and Payments, Utility Bill Payment, Deposits, Loans, Inquiries and other services and a Session Summary. NRB Banking: EBL offers full range money transfer facility through MoneyGram, UAE Exchange and other exchange houses from anywhere in the world. Student Banking: Other than education loans and student accounts – EBL offers student file services for the students who seek to study abroad through its dedicated student centers at Gulshan and Dhanmondi. Hajj Remittance Service: EBL's Hajj Remittance Service provides convenient, secure and reliable money transfers during pilgrimage in Mecca, Madina and Jeddah for EBL account holders. Service includes handling Foreign Demand Drafts (FDDs) and Foreign Telegraphic Transfers (FTTs) in Saudi Arabian in local currency. Other than these, EBL also offers Treasury, Syndication, Trade Services and other banking products and services to serve the customers with utmost sincerity. “We make things simple for you” – is the corporate statement of EBL and through our innovative and need-based product and service solutions we demonstrate our pledge to make things simple for the customers.


JUSTIFICATION OF THE ISSUE PRICE OF RIGHTS SHARE:

The rights issue price of Tk.100/- each is justified as per the guidelines of the Securities & Exchange Commission as detailed below:

NET ASSETS VALUE PER SHARE:

As on March 31, 2008, the Net Assets Value per Share stands at Tk.280.80. Thus the offer price of Tk.100 each turns out to be less than the existing Net Assets Value per share. The calculation of net assets value per share is given below:

Sl No. Particulars Amount Net amount in Tk.

1 Cash in hand (including foreign currency) 399,984,879 2 Balance with Bangladesh Bank and its

agent banks (including foreign currency) 2,486,535,408

3 Balance with other Banks and Financial Institutions

1,300,303,288

4 Investment (Government & others) 7,088,286,108 5 Loans & advances 34,035,587,040 6 Fixed assets 878,828,123 7 Other assets 535,055,036

A

Total assets 46,724,579,8821 Borrowings from others Banks, Financial

Institutions and agents 8,189,600,706

2 Deposits and other accounts 31,670,621,647 3 Other liabilities 2,969,984,843

B

Total liabilities 42,830,207,196C Net Assets (A-B) 3,894,372,686D Number of shares including stock

dividend @34% (i.e.35,19,000 shares) 13,869,000

E Net Assets Value per share 280.7969 EARNING BASED VALUE PER SHARE:

The Earning per share (EPS) of the Company as per Audited Accounts as at March 31, 2008 is Tk.17.43 (weighted EPS stands at Tk.69.72=17.43X4) calculated on net profit after tax of Tk.180,412,298 on the basis of face value of Tk.100 each per share. The price earning multiple at issue price of Tk.100 each stands at PE 1.43 as opposed to the present PE 13.94 at market price of Tk.971.90 per share on March 31, 2008.

If we consider the share price of the Company on the basis of price earning multiple of 13.94, the earning based value of shares of the Company stands at Tk.971.80 a price much higher than the price offered for rights shares. AVERAGE MARKET PRICE:

Market price per share at the last trading day of preceding six months is given in the follows table that remaining far above the offer price of Tk.100 each at par. Price data is collected from Dhaka Stock Exchange Limited.


i Market Price per share as on 30 December 2007 Tk.1070.75 ii Market Price per share as on 31 January 2008 Tk.1039.00 iii. Market Price per share as on 28 February 2008 Tk.1023.00 iv. Market Price per share as on 31 March 2008 Tk.1001.50 v. Market Price per share as on 30 April 2008 Tk.854.75 vi. Market Price per share as on 30 May 2008 Tk.972.00 Total in six months Tk.5,961.00 Average in six months Tk.993.50 From the above analysis, it appears that the offered price of Tk.100 each by the Bank is quite reasonable and justified and also familiar and attractive to the shareholders.

AUDITORS’ REPORT

TO THE SHAREHOLDERS

OF EASTERN BANK LIMITED

We have audited the accompanying Balance Sheet of Eastern Bank Limited as of 31 March 2008 and the related Profit and Loss Account, Statement of Cash Flows and Statement of Changes in Equity together with the Notes 1 to 43 for the period from 1 January 2008 to 31 March 2008. The preparation of these Financial Statements is the responsibility of the Bank's management. Our responsibility is to express an independent opinion on these Financial Statements based on our audit.

We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall Financial Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, Financial Statements prepared in accordance with Bangladesh Accounting Standards (BAS) give a true and fair view of the state of the Bank’s affairs as on 31 March 2008 and of the results of its operations and its cash flows for the period from 1 January 2008 to 31 March 2008 and comply with the Bank Companies Act 1991, the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994, the Securities and Exchange Rules, 1987 and other applicable laws and regulations.


We also report that,

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

ii) in our opinion, proper books of account as required by law have been kept by the Bank so far as it appeared from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

iii) the Bank’s Balance Sheet and Profit and Loss Account together with the annexed notes 1 to 43 dealt with by the report are in agreement with the books of account and returns;

iv) the expenditure incurred was for the purpose of the Bank’s business; v) the financial position of the Bank at 31 March 2008 and the profit for the

period from 1 January 2008 to 31 March 2008 have been properly reflected in the Financial Statements, the Financial Statements have been prepared in accordance with the generally accepted accounting principles;

vi) the Financial Statements have been drawn up in conformity with the Bank Companies Act 1991 and in accordance with the accounting rules and regulations issued by the Bangladesh Bank;

vii) adequate provisions have been made for advances and other assets which are, in our opinion, doubtful of recovery;

viii) the Financial Statements conform to the prescribed standards set in the accounting regulations issued by the Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh;

ix) the records and statements submitted by the branches have been properly maintained and consolidated in the Financial Statements on the basis of the statements certified by the branch manager and considered by us as correct;

x) the information and explanations required by us have been received and found satisfactory;

xi) the capital adequacy ratio (CAR), as required by law, has been maintained adequately during the period.

Sd/- Hoda Vasi Chowdhury & Co

Dhaka, 3 June 2008 Chartered Accountants


2007Total Taka

Offshore Main Operation TakaCashCash in hand (including foreign currencies) - 399,984,879 399,984,879 382,927,615

- 2,486,535,408 2,486,535,408 1,964,375,663- 2,886,520,287 2,886,520,287 2,347,303,278

Balances with other Banks and Financial InstitutionsIn Bangladesh - 1,626,369,680 1,626,369,680 1,276,690,139 Outside Bangladesh 7,241,091 (333,307,483) (326,066,392) 270,025,665

7,241,091 1,293,062,197 1,300,303,288 1,546,715,804

Money at call and short notice - - - 470,000,000InvestmentsGovernment - 6,899,716,565 6,899,716,565 5,751,836,137Others - 188,569,543 188,569,543 144,153,970

- 7,088,286,108 7,088,286,108 5,895,990,107Loans and advances

Loans, cash credits, overdrafts, etc. 93,009,432 32,896,725,933 32,989,735,365 30,260,267,971Bills purchased & discounted - 1,045,851,675 1,045,851,675 701,534,858

93,009,432 33,942,577,608 34,035,587,040 30,961,802,829

- 878,828,123 878,828,123 871,267,743 Other assets - 535,055,036 535,055,036 486,406,095 Non-banking assets - - - - TOTAL ASSETS 100,250,523 46,624,329,359 46,724,579,882 42,579,485,856

LIABILITIES & CAPITAL Liabilities

95,974,967 8,093,625,739 8,189,600,706 6,063,465,758

Deposits and other accounts Current Deposits and other accounts, etc 2,100 3,872,445,433 3,872,447,533 3,480,786,638 Bills payable - 512,546,709 512,546,709 491,030,835 Savings Bank Deposits - 5,917,594,088 5,917,594,088 5,896,619,266 Fixed Deposits - 21,345,783,317 21,345,783,317 20,201,082,357 Bearer Certificates of Deposits - 22,250,000 22,250,000 22,250,000

2,100 31,670,619,547 31,670,621,647 30,091,769,096Other liabilities 3,339,184 2,966,645,659 2,969,984,843 2,712,443,247TOTAL LIABILITIES 99,316,251 42,730,890,945 42,830,207,196 38,867,678,101Shareholders' EquityShare CapitalPaid up capital - 1,035,000,000 1,035,000,000 1,035,000,000 Statutory reserve - 1,035,000,000 1,035,000,000 1,035,000,000 Dividend Equalization Reserve - 356,040,000 356,040,000 356,040,000 Reserve against Pre-Take over loss - 1,554,759,750 1,554,759,750 1,554,759,750Pre-take over loss - (1,211,934,675) (1,211,934,675) (1,214,087,213)Assets revaluation reserve - 405,015,050 405,015,050 405,015,050 Reserve for Revaluation of Treasury Bills (HTM) - 28,180,168 28,180,168 28,180,168Reserve for Building Fund - 60,000,000 60,000,000 60,000,000 General Reserve - 100,000,000 100,000,000 100,000,000

894,816 351,005,184 351,900,000 351,900,000Profit and loss account-Retained Earnings 39,456 180,372,937 180,412,393 - TOTAL SHAREHOLDERS' EQUITY 934,272 3,893,438,414 3,894,372,686 3,711,807,755TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 100,250,523 46,624,329,359 46,724,579,882 42,579,485,856

Continued.... - 0.06 - 0.06 - 0.04 -

PROPERTY AND ASSETS

Proposed dividend: (2007: Stock @ 34%)

Borrowings from Other Banks, Financial Institutions and Agents

Fixed assets including land, building, furniture and fixtures

Balances with Bangladesh Bank and its agent bank (s) (including foreign currencies)

Taka

Eastern Bank LimitedConsolidated Balance Sheet as at 31 March 2008

As at 31 March 2008As at 31 December


2007Total Taka

Offshore Main Operation TakaOFF BALANCE SHEET ITEMS:

Contingent LiabilitiesAcceptances and endorsements (Net) - 4,987,941,787 4,987,941,787 5,771,334,926Letters of Guarantees - 1,886,622,028 1,886,622,028 1,793,971,094Irrevocable letters of credit (Net) - 9,655,750,567 9,655,750,567 4,657,101,076Bills for collection - 556,465,432 556,465,432 431,974,868Other liabilities (Bad & Loss) - - - -

- 17,086,779,814 17,086,779,814 12,654,381,964Other Contingent LiabilitiesValue of Bangladesh Sanchaya Patra on hand - 447,572,100 447,572,100 434,117,100 Value of travelers' cheques on hand - 184,893,878 184,893,878 184,558,936

- 632,465,978 632,465,978 618,676,036 Total Contingent Liabilities - 17,719,245,792 17,719,245,792 13,273,058,000

Other commitmentsLease rental commitments - - - -

- - - - - - - 352,474,496 352,474,496 65,599,991

Undrawn note issuance and revolving facilities - - - - - - - - - -

Spot and forward foreign exchange rate contracts - - - - Other Capital Commitments - - - - Other exchange contracts - - - -

- 352,474,496 352,474,496 65,599,991Claims against the Bank not acknowledged as debt - - - -

- 352,474,496 352,474,496 65,599,991Total - 18,071,720,288 18,071,720,288 13,338,657,991

* For detail break up please see our annexed Financial Statements and Notes thereon.

Dated: Dhaka, 2008 Hoda Vasi Chowdhury & Co.Chartered Accountants

See annexed report of dateAuditors' Report to the Shareholders

These Financial Statements should be read in conjunction with the annexed notes

Managing Director Director Director Chairman

Taka

Documentary Credits and short term trade -related transactionsForward assets purchased and forward deposits placed

Undrawn formal standby facilities, credit lines and other commitments

As at 31 DecemberAs at 31 March 2008

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

Sd/-

3 June 2008


Total

Taka TakaOffshore Main operation

Interest income 2,316,202 1,117,229,835 1,119,546,037 3,814,759,263Less: Interest paid on deposits and borrowings 1,840,342 752,240,788 754,081,130 2,502,489,624Net interest income 475,860 364,989,047 365,464,907 1,312,269,639Income from investments - 164,149,925 164,149,925 506,856,546Commission, exchange and brokerage 60,570 169,633,137 169,693,707 637,184,031Other operating income 7,887 92,173,736 92,181,623 365,915,849Total operating income 544,317 790,945,845 791,490,162 2,822,226,065Salary and allowances - 114,106,990 114,106,990 411,556,905Rent, taxes, insurance, electricity etc. - 19,863,835 19,863,835 71,920,207Legal and professional expenses - 3,662,496 3,662,496 17,821,671Postage, stamp, telecommunication etc. - 9,852,623 9,852,623 43,099,104Stationery , printing, advertisement, etc. - 17,704,965 17,704,965 99,194,921Managing Director's salary and allowances - 2,220,000 2,220,000 10,481,265Directors' fees and expenses - 160,185 160,185 1,266,801Audit fees - - - 209,424Repairs, maintenance and depreciation - 21,785,424 21,785,424 82,676,269Other expenses 20,711 44,773,677 44,794,388 213,600,112

Total operating expense 20,711 234,130,195 234,150,906 951,826,679Profit before provisions 523,606 556,815,650 557,339,256 1,870,399,386Provision for loans and advances Specific Provision - 67,499,247 67,499,247 459,836,065 General Provision 248,622 58,376,424 58,625,046 124,902,933 (including provision for contingent assets) 248,622 125,875,671 126,124,293 584,738,998Provision against other assets - - - - Total provisions 248,622 125,875,671 126,124,293 584,738,998Profit before tax for the period 274,984 430,939,979 431,214,963 1,285,660,388Provision for tax made during the period (235,623) (250,567,042) (250,802,665) (860,081,942)Deferred Tax (expenses)/income - - - (6,436,243)

(235,623) (250,567,042) (250,802,665) (866,518,185)Net Profit after tax for the period 39,361 180,372,937 180,412,298 419,142,203Balance of profit brought forward from previous year - - - 193,266,287Adjustment relating to prior year 95 - 95 (53,508,490)

39,456 180,372,937 180,412,393 558,900,000AppropriationsStatutory reserve - - - (207,000,000)

- - - (351,900,000)- - - (558,900,000)

Retained earnings carried forward 39,456 180,372,937 180,412,393 - Earning per share 17.43 40.50

* For detail break up please see our annexed Financial Statements and Notes thereon.



Eastern Bank Limited

For the period from 1 January 2008 to 31 March 2008Consolidated Profit and Loss Account

Taka

From 1 January 2008 to 31 Mar ch 2008

From 1 January 2007 to 31

December 2007

Auditors' Report to the ShareholdersSee annexed report of date


Proposed dividend: (2007: Stock @ 34%)

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

Sd/-

3 June 2008


Hoda Vasi Chowdhury & Co

Dividend Reserve for Reserve Assets Treasury billPaid up Statutory Equalization Building against pre- Pre-takeover Revaluation Revaluation General Proposed Profit andCapital Reserve Reserve Fund take over loss loss Reserve Reserve (HTM) Reserve dividend Loss account Total

Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Balance on 1 January 2008 1,035,000,000 1,035,000,000 356,040,000 60,000,000 1,554,759,750 (1,214,087,213) 405,015,050 28,180,168 100,000,000 351,900,000 - 3,711,807,755

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

Net profit for the period - - - - - - - - - - 180,412,393 180,412,393

Addition during the period - - - - - - - - - - - -

Bonus share issued - - - - - - - - - - - -

Transfer to statutory reserve - - - - - - - - - - - -

Dividend paid - - - - - - - - - - - -

Proposed dividend - - - - - - - - - - - -

Recovery of Pre-Take over Loss - - - - - 2,152,538 - - - - - 2,152,538

Balance at 31 March 2008 1,035,000,000 1,035,000,000 356,040,000 60,000,000 1,554,759,750 (1,211,934,675) 405,015,050 28,180,168 100,000,000 351,900,000 180,412,393 3,894,372,686

Balance at 31 December 2007 1,035,000,000 1,035,000,000 356,040,000 60,000,000 1,554,759,750 (1,214,087,213) 405,015,050 28,180,168 100,000,000 351,900,000 - 3,711,807,755

Independent Correspondent Firm to Deloitte Touche Tohmatsu

Eastern Bank LimitedConsolidated Statement of changes in Equity

For the period from 1 January 2008 to 31 March 2008


Particulars

Prior year adjustment

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


At 31 March 08 At 31 December 07Taka Taka

NoteCashCash in hand (including foreign currencies) 3 399,984,879 382,927,615 Balances with Bangladesh Bank and its agent bank (s) 4 2,486,535,408 1,964,375,663 (including foreign currencies) 2,886,520,287 2,347,303,278

Balances with other Banks and Financial Institutions 5In Bangladesh 1,626,369,680 1,276,690,139 Outside Bangladesh (333,307,483) 263,661,848

1,293,062,197 1,540,351,987

Money at call and short notice 6 - 470,000,000

Investments 7Government 6,899,716,565 5,751,836,137 Others 188,569,543 144,153,970

7,088,286,108 5,895,990,107 Loans and advances 8

Loans, cash credits, overdrafts, etc. 32,896,725,933 30,194,171,436 Bills purchased & discounted 1,045,851,675 701,534,858

33,942,577,608 30,895,706,294

Fixed assets including land, building, furniture and fixtures 9 878,828,123 871,267,743 Other assets 10 535,055,036 486,406,095 Non-banking assets - - TOTAL ASSETS 46,624,329,359 42,507,025,504

LIABILITIES & CAPITALLiabilities

11 8,093,625,739 5,997,118,831

Deposits and other accounts Current Deposits and other accounts, etc 12.2 3,872,445,433 3,480,781,653 Bills payable 12.3 512,546,709 491,030,835 Savings Bank Deposits 12.4 5,917,594,088 5,896,619,266 Fixed Deposits 12.5 21,345,783,317 20,201,082,357 Bearer Certificates of Deposits 22,250,000 22,250,000

12 31,670,619,547 30,091,764,111 Other liabilities 13 2,966,645,659 2,707,229,623 TOTAL LIABILITIES 42,730,890,945 38,796,112,565 Shareholders' EquityShare CapitalPaid up capital 14 1,035,000,000 1,035,000,000 Statutory reserve 15 1,035,000,000 1,035,000,000 Dividend Equalization Reserve 16 356,040,000 356,040,000 Reserve against Pre-Take over loss 17 1,554,759,750 1,554,759,750 Pre-take over loss 17.2 (1,211,934,675) (1,214,087,213) Assets revaluation reserve 18 405,015,050 405,015,050 Reserve for Revaluation of Treasury Bills (HTM) 19 28,180,168 28,180,168Reserve for Building Fund 20 60,000,000 60,000,000General Reserve 21 100,000,000 100,000,000

351,005,184 351,005,184Profit and loss account-Retained Earnings 22 180,372,937 - TOTAL SHAREHOLDERS' EQUITY 3,893,438,414 3,710,912,939 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 46,624,329,359 42,507,025,504

Continued.... 0.44 0

Eastern Bank LimitedMain Operation

Balance Sheet as at 31 March 2008

PROPERTY AND ASSETS


Proposed dividend


At 31 March 08 At 31 December 07Note Taka Taka

OFF BALANCE SHEET ITEMS:

Contingent LiabilitiesAcceptances and endorsements (Net) 4,987,941,787 5,767,247,987 Letters of Guarantees 23 1,886,622,028 1,793,971,094 Irrevocable letters of credit (Net) 9,655,750,567 4,657,101,076Bills for collection 556,465,432 431,974,868Other liabilities (Bad & Loss) - -

17,086,779,814 12,650,295,025 Other Contingent LiabilitiesValue of Bangladesh Sanchaya Patra on hand 447,572,100 434,117,100Value of travelers' cheques on hand 184,893,878 184,558,936

632,465,978 618,676,036Total Contingent Liabilities 17,719,245,792 13,268,971,061

Other commitmentsLease rental commitments - - Documentary Credits and short term trade -related transactions - - Forward assets purchased and forward deposits placed 352,474,496 65,599,991Undrawn note issuance and revolving facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Spot and forward foreign exchange rate contracts - - Other Capital Commitments - - Other exchange contracts - -

352,474,496 65,599,991Claims against the Bank not acknowledged as debt - -

352,474,496 65,599,991Total 18,071,720,288 13,334,571,052




See annexed report of dateAuditors' Report to the Shareholders

Sd/- Sd/- Sd/- Sd/

Sd/- 3 June 2008


1 January 2008 to 31 March 2008

1 January 2007 to 31 December

2007

Taka TakaNote

Interest income 24 1,117,229,835 3,808,903,036Less: Interest paid on deposits and borrowings 25 752,240,788 2,498,068,117Net interest income 364,989,047 1,310,834,919Income from investments 26 164,149,925 506,856,546Commission, exchange and brokerage 27 169,633,137 637,091,367Other operating income 28 92,173,736 365,884,373Total operating income 790,945,845 2,820,667,205Salary and allowances 29 114,106,990 411,556,905Rent, taxes, insurance, electricity etc. 30 19,863,835 71,920,207Legal and professional expenses 31 3,662,496 17,821,671Postage, stamp, telecommunication etc. 32 9,852,623 43,099,104Stationery , printing, advertisement, etc. 33 17,704,965 99,194,921Managing Director's salary and allowances 34 2,220,000 10,481,265Directors' fees and expenses 35 160,185 1,266,801Audit fees 36 - 209,424Repairs, maintenance and depreciation 37 21,785,424 82,676,269Other expenses 38 44,773,677 213,566,786Total operating expense 234,130,195 951,793,353Profit before provisions 556,815,650 1,868,873,852Provision for loans and advances 13.2 Specific Provision 67,499,247 459,836,065 General Provision ( Loans & Contingent assets) 58,376,424 124,557,943

125,875,671 584,394,008Provision against other assets 13.4 - - Total provisions 125,875,671 584,394,008Profit before tax for the period 430,939,979 1,284,479,844Provision for tax made during the period 13.1.1 (250,567,042) (859,395,451)Deferred Tax (expenses)/income - (6,436,243)

(250,567,042) (865,831,694)Net Profit after tax for the period 180,372,937 418,648,150Balance of profit brought forward from previous year - 192,862,647Adjustment relating to prior year (Tax) - (53,505,613)

180,372,937 558,005,184Retained earnings transferred from OBU - 894,816

180,372,937 558,900,000AppropriationsStatutory reserve - (207,000,000)Proposed dividend: (2007: Stock @ 34%) - (351,900,000)

- (558,900,000)Retained earnings carried forward 22 180,372,937 -



See annexed report of date


Profit and Loss Account For the period from 1 January 2008 to 31 March 2008


Auditors' Report to the Shareholders

Sd/ Sd/ Sd/ Sd/

Sd/

3 June 2008


Taka TakaNote

A) Cash flows from operating activitiesInterest received 1,117,229,835 3,808,903,036Interest paid (752,240,788) (2,498,068,117)Dividend received 119,924 119,924Fees & Commission received 169,633,137 635,666,347Income from Investment 164,030,001 506,736,622Recovery of loans previously written off 10,644,700 73,090,678Cash paid to employees (116,487,175) (423,304,971)Cash paid to suppliers (78,821,569) (288,175,341)Income taxes paid 13.1 (190,009,767) (723,202,347)Received from other operating activities 39 81,529,036 289,980,951Paid for other operating activities 40 (67,975,051) (144,736,340)Operating profit before changes in operating assets and liabilities 337,652,283 1,237,010,443Increase/(Decrease) in Operating Assets & LiabilitiesChanges in trading securities - - Loans and advances to other banks - - Loans and advances to customers ( Other than Banks) (3,071,905,298) (5,361,922,056)Other assets 41 (25,827,075) (41,007,403)Deposits from other Banks - (14,421,227)Deposits from customers ( Other than Banks) 1,578,855,436 4,406,442,329Other liabilities 42 127,443,624 (201,771,994)Net Cash received from operating activities (1,053,781,030) 24,330,092

B) Cash flows from investing activitiesChanges in non-trading securities (1,392,296,001) (2,516,382,002)Net proceeds /(payments) for sale/ purchase of Treasury bills 200,000,000 2,510,000,000

(26,027,693) (184,392,923)Sales proceeds of Fixed assets - 2,935,302Purchase/sale of subsidiary - - Net cash used in investing activities (1,218,323,694) (187,839,623)

C) Cash flows from financing activitiesBorrowings from Other Banks, Financial Institutions and agents 2,096,506,908 1,591,718,832Received from issue of loan capital and debt securities - - Dividend paid ( cash dividend) - (165,600,000)Net cash received from financing activities 2,096,506,908 1,426,118,832

D) Net (decrease) / increase in cash (A+B+C) (175,597,816) 1,262,609,301E) Effects of exchange rate changes on cash and cash-equivalents (2,892,165) 1,425,020F) Opening cash and cash-equivalents 4,359,750,565 3,095,716,244G) Closing cash and cash-equivalents (D+E+F)* 4,181,260,584 4,359,750,565

*Closing cash and cash-equivalentsCash In hand (including foreign currencies) 399,984,879 382,927,615Balances with Bangladesh Bank and its agent bank (s) 2,486,535,408 1,964,375,663Balances with other Banks and Financial Institutions 1,293,062,197 1,540,351,987Money at call and short notice - 470,000,000Prize bonds 1,678,100 2,095,300

4,181,260,584 4,359,750,565


0 0.46 -


Purchase of property , plant and equipment


Cash Flow Statement For the period from 1 January 2008 to 31 March 2008

From 1 January 2008 to 31 March

2008


December 2007

Sd/ Sd/ Sd/ Sd/



Particulars

Assets:

2,886,520,287 - - - - 2,886,520,287Balances with other banksand financial institutions 477,087,231 228,792,490 587,182,476 - - 1,293,062,197

Money at call & short notice - - - - - - Investments 187,492,997 100,000,000 819,893,111 3,775,400,000 2,205,500,000 7,088,286,108Loans & Advances 7,520,013,316 7,119,656,953 7,939,000,571 10,287,729,073 1,076,177,695 33,942,577,608

Fixed assets including land, building, furniture & fixtures 5,816,862 11,633,724 47,772,212 173,249,999 640,355,326 878,828,123Other Assets 25,351,696 202,714,761 92,337,876 185,689,671 28,961,032 535,055,036Non-banking assets - - - - - - Total Assets 11,102,282,389 7,662,797,928 9,486,186,246 14,422,068,743 3,950,994,053 46,624,329,359Liabilities:Borrowing from Other Banks, Financial Institutions & agents 3,579,732,000 1,865,963,934 2,078,115,000 314,885,000 254,929,805 8,093,625,739

Deposits and other accounts 8,959,283,956 9,489,897,148 10,328,812,461 2,687,919,939 204,706,043 31,670,619,547

Provision & other liabilities 60,419,560 126,003,103 1,064,432,254 1,660,907,772 54,882,970 2,966,645,659

Total Liabilities 12,599,435,516 11,481,864,185 13,471,359,715 4,663,712,711 514,518,818 42,730,890,945Net Liquidity Gap (1,497,153,127) (3,819,066,257) (3,985,173,469) 9,758,356,032 3,436,475,235 3,893,438,414

( Asset and Liability Maturity Analysis)As at 31 March 2008


Liquidity StatementMain Operation

Cash in hand (including balance with Bangladesh Bank)

Independent correspondent Firm to Deloitte Touche Tohmatsu

Above 5-years term Total


Not more than 1 month term 1-3 month term 3-12 month term 1-5 years term

Sd/ Sd/ Sd/ Sd/


1 The Bank and Its Activities1.1

1.2 The Bank is listed in the Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.

1.3

1A Offshore Banking Unit

1B Nature of business

2 Significant Accounting Policies

2.1 Basis of preparation of the Financial Statements

2.2 Consolidation

2.3 Investments:. Investments are stated as per following bases:

Items Basis

Government treasury bills Face Value (Marking to Market)

ICB's debenture Face value Prize bond Cost priceShares Lower of cost or market value

Eastern Bank LimitedNotes to the Financial Statements

The Eastern Bank Limited was formed as a public limited company incorporated in Bangladesh withprimary objective to carry on all kinds of banking business in and outside Bangladesh. Eastern BankLimited has also taken over the businesses, assets, liabilities and losses of erstwhile Bank of Credit &Commerce International (Overseas) Limited, (hereinafter called BCCI) branches in Bangladesh with effectfrom 16th August, 1992 as they stood after reduction or adjustments in accordance with the provisions ofthe Bank of Credit & Commerce International (Overseas) Limited (Reconstruction) Scheme, 1992,hereinafter called the Scheme.

Statement of affairs and Income and expenditure statements of all branches and Head office areconsolidated together to prepare Financial Statements of the Bank for the period from 1 January 2008 to 31March 2008.

These Financial Statements of the Bank as at 31 March, 2008 have been prepared in accordance with "FirstSchedule" of the Bank Companies Act 1991 as amended by BRPD Circular no. 14 of 2004, BangladeshBank Circulars, Bangladesh Accounting Standards (BASs), the Companies Act 1994, the Securities andExchange Act 1993, Securities and Exchange Rules 1987 and other rules and regulations applicable inBangladesh on a going concern basis.


The bank commenced its business with four branches from 16 August 1992. Number of branches as on 31March 2008 were thirty.

Offshore Banking Unit is a separate business unit of Eastern Bank Limited, governed under the Rules &Guidelines of Bangladesh Bank. The Bank obtained the Offshore Banking Unit permission vide letter no.BRPD(P)744/(89)/2004-303 dated January 25, 2004. The Bank commenced operation of this unit from May19, 2004 and its office is located at 10, Dilkusha C/A (2nd floor), Dhaka.

The principal activities of Eastern Bank Limited in Bangladesh is to provide a comprehensive range offinancial services; personal and commercial banking; trade services; cash management; treasury, securitiesand custody services.


2.4 Loans and Advances

2.5 Fixed Assets and Depreciation

i. Fixed assets are stated at cost less accumulated depreciation.ii.

iii. Depreciation rates used for each type of fixed assets are as follows: Rate of

Particulars of Fixed Assets Depreciation p a Method of depreciation

Land 0%Building 2.5% Reducing balanceFurniture and fixtures 10% Reducing balanceOffice Equipment 20% Reducing balanceMotor Vehicles 20% Straight line

iv. Repair and maintenance are charged to income as and when incurred.

2.5A

Payment schedule:

Year Installment Interest Lease obligation Outstanding

Taka Taka Taka Taka2004 - - - 91,591,1482004 23,896,956 9,356,426 14,540,530 77,050,6182005 23,896,956 7,673,818 16,223,138 60,827,4802006 23,896,956 5,796,495 18,100,461 42,727,0192007 23,896,956 3,701,931 20,195,025 22,531,9902008 23,896,956 1,364,966 22,531,990 -

119,484,780 27,893,636 91,591,144

2.6 Revenue Recognition

2.6.1 Interest income

Interest on unclassified (excluding SMA) loans and advances have been accounted for as income onaccrual basis, interest on classified loans and advances (including SMA) is credited to interest suspenseaccount and actual receipt of interest therefrom is credited to income as and when received as perinstruction of Bangladesh Bank.

The Bank entered into a lease agreement in 2004 for its networking equipment for Taka 91,591,148 for aterm of 5 years with IDLC Finance Limited. These assets are accounted for under finance lease incompliance with Bangladesh Accounting Standards -17 (Leases).

The revenue during the year is recognized following all conditions of revenue recognition as prescribed byBAS - 18 "Revenue Recognition"

Lease hold fixed assets

Loans and Advances are stated at gross amount. General provisions on unclassified Loans and Advances, &contingent assets, Specific provisions for classified loans and interest suspense account thereon are shownunder other liabilities.

Depreciation is charged at the following rates on all fixed assets and the amount is calculated from the dateof capitalisation. Depreciation is charged on disposed assets up to date of disposal and accumulateddepreciation on any disposal/write off are reversed.


2.6.2 Fees and Commission Income

2.6.3

2.6.4 Interest paid on borrowings and Deposits

2.6.5 Interest Income from Investments

2.6.6 Management & Other expenses

2.6.7 Provision for Loans and Advances

UC SMA SS DF BL

Small & Medium Enterprise 5% 20% 50% 100%

All Others. 1% 5% 20% 50% 100%

2.6.8

a.

b. Deferred TaxDeferred Tax is calculated on the taxable / deductible temporary differences between tax base amountand carrying amount of assets and liabilities as required by Bangladesh Accounting Standard (BAS)-12Accounting for Taxes".

Provision against classified loans and advances is made on the basis of quarter end review by themanagement and instruction contained in BCD Circular no.12 dated 4 September 1995, BRPD circular no. 16dated 6 December 1998, BRPD circular no. 9 dated 14 May 2001, BRPD circular no.02 dated 15 February 2005and BRPD circular no. 05 dated 27 April 2005. The classification rates as per Bangladesh Bank circulars usedfor provision are as follows:

Rates of Provisions

Con

sum

er House Building &ProfessionalOther than House Building & Professional

Business Unit

2% 5% 20% 50%

Provision for taxation

Provision for current income tax has been made @ 45% as prescribed in Finance Ordinance, 2007 of theprofit made by the Bank without considering taxable allowances and disallowances and the same isunderstated/overstated to that extent. Any shortfall / excess provision will be duly adjusted after finalassessment.

Current Tax

Interest income on investments in Government and other trust securities, debentures and bonds isaccounted for on accrual basis.

Fess and Commission income arises on services provided by the Bank and recognized on a cash receiptbasis. Commission charged to customers on letter of credit and letter of guarantee are credited to income atthe time of effecting the transactions.

Dividend Income

Dividend income from shares is recognized at the time when it is realized.

Interest paid on Borrowings and Deposits are calculated on a day basis and recognized on accrual basis .

Expenses incurred by the Bank are recognized on actual or accrual basis whenever necessary.

2%

100%

5% 5% 20% 50% 100%


2.6.9

a) Gratuity

b) Provident fund

c) Superannuation fund

2.6.10 Exchange rate:

Foreign currencies are translated into Taka currency at the following rates:

a) Assets and Liabilities existing at the takeover date, at the rate prevailing on 6 July 1991.

b)

c)

2.7 Earning per share

2.8 Reconciliation of Books and Account

Assets relating to customers' foreign currency deposit account at standard mid rates of USD 1=Tk.68.58 andGBP 1=Tk.136.74 and EURO 1= Tk.108.35 as on 31 March 2008.

Other foreign currency related transactions have been converted by using the rate of exchange prevailingon the dates of such transactions.

Books of account in regard to inter-bank (in Bangladesh & outside Bangladesh) as well as inter-branchesare reconciled at a regular interval .

The Bank operates a contributory provident fund for its permanent employees. Provident fund isadministered by a board of trustees and is funded by contributions partly from the employees and partlyfrom the company at a pre-determined rate. This fund got approval from the National Board of Revenue onJuly 31, 1997. Any investment decision out of this fund is made separately from that of the company'sfunds.

The Bank's superannuation fund was approved by the National Board of Revenue with effect fromNovember 20, 1999. This is payable to the employees of the Bank as per their ranks, grades and length ofservice with the Bank.The Bank conducted an actuarial valuation of the fund in 2006 and the next valuationis due in 2009. The broader objectives of this valuation was to calculate the on going as well as futureliability that will arise from the pool of employees of the Bank. The actuary recommended the minimumcontribution of 0.63% of total admissible benefits into the fund each year.

ii) Provision for gratuity is made in the books monthly on the basis of actuarial valuation made once in threeyears (@ 7% of basic payroll each year ).The next actuarial valuation will be done by June 2008.

Earning per share (EPS) has been computed by dividing the profit after tax (PAT) by the weightedaverage number of ordinary shares outstanding as on 31 March 2008 as per BAS- 33 "Earning Per Share". Diluted earning per share was not required to calculate as there were no dilution possibilities during theperiod.

i) The Bank operates a funded gratuity scheme. The policy has been approved by the National Board ofRevenue with effect from 01 January 1997. Gratuity is paid to those employees who have completedminimum 10 (ten) years of continuous service at the time of their separation from the Bank.

Retirement benefits


2.9 Cash Flow Statement

2.10 Statement of Changes in Equity

2.11 Liquidity Statement

2AI) Credit Rating of the Bank

Date of Long term Short termrating

Entity Rating 6/27/2007 A ST-3

II)

BAS StatusNo.

1 Applied2 N/A7 Applied8 Applied10 Applied11 N/A12 Applied14 Applied16 Applied17 Applied18 Applied19 Applied20 N/A21 Applied23 Applied24 Applied27 N/A28 N/A30 Applied

31 N/A33 Applied34 Applied36 Applied37 Applied38 Applied40 N/A41 N/AAgriculture

The Effects of Changes in Foreign Exchange Rates

Investments in Associates

Intangible Assets

Interest in Joint Ventures

Investment Property

Earning Per Share

Disclosures in Financial Statements of Banks and Similar Financial Institutions

Related Party Disclosures

LeasesRevenue RecognitionEmployee BenefitsAccounting for Govt. Grants and disclosures of Govt.

Borrowing Costs

Cash Flow Statement is prepared in accordance with Bangladesh Accounting Standard (BAS) 7 " CashFlow Statement" and under the guideline of Bangladesh Bank BRPD Circular No.14 dated 25 June 2003. The Statement shows the Structure of Changes in cash and cash equivalents during the period. It isbroken down into Operating activities , Investing activities and Financing activities.

Statement of changes in Equity is prepared in accordance with Bangladesh Accounting Standard (BAS) 1"Presentation of Financial Statements" and relevant guidelines of Bangladesh Bank.

The Liquidity Statement has been prepared in accordance with remaining maturity grouping of Assetsand Liabilities as of the close of the period.

Provisions, Contingent Liabilities and Contingent Assets

Compliance of Bangladesh Accounting Standards (BAS) and Bangladesh Financial ReportingStandards (BFRS)

Accounting Policies, Changes in Accounting Estimates and Errors

Consolidated and Separate Financial Statements

Name of BAS

Presentation of Financial StatementsInventoriesCash Flow Statements

Events after the Balance Sheet DateConstruction ContractsIncome TaxesSegment ReportingProperty, Plant and Equipments

Interim Financial ReportingImpairment of Assets

As per the BRPD instruction circular no.6 dated July 5, 2006, the Bank has done its credit rating by CreditRating Information and Services Limited (CRISL) based on the Financial Statements dated 31 December2006 , the following rating has been awarded :


BFRS StatusNo2 N/A3 N/A5 N/A6 N/A

III) Generala) Figures appearing in these Financial Statements have been rounded off to the nearest Taka. b) Previous year's figures have been rearranged in order to conform to current year's presentation.

IV) Audit Committee

SL # NameStatus with

the Bank

Status with the Committee

i) Mr. A. M. Shaukat Ali Director Member B. Sc. Engineerii) Mr. Ahmed Jamal Director Member B.Sc. (Hons.), M.Sc.iii) Mr. Gazi Md. Shakhawat Hossain Director Member M. com (Accounting)

* Terms of Reference of the Audit Committee as stated in the BRPD Circular No. 12 dated 23/12/2002.*

*

*

*

Name of BFRS

Share Base PaymentsBusiness CombinationsNon- Current Assets Held for Sale and discontinued operationsExploration for and Evaluation of Mineral Resources

Reviewing the Internal Audit Reports along with the Executive Summary of the different EBLbranches/departments conducted by the Internal Audit Team of the Bank from time to time and also thestatus of compliance thereof.

Reviewing the progress of strengthening the internal control system & procedures, strict compliance of Anti-Money Laundering Act and also the Internal Audit Team of the Bank.

Review and approve the annual "Audit plan 2008".

The company secretary is to act as Secretary of the Audit Committee of the Board.

The Committee places its report regularly to the Board of the Bank for review and monitoring the activitieswith recommendations on internal control system, compliance of rules and regulations of the RegulatoryBodies.

EducationalQualification

During the period from 1 January 2008 to 31 March 2008, the Audit Committee of the Board conducted 1(one) meeting held on 28 January 2008 in which among other things, the following issues werereviewed/discussed:

In compliance with the BRPD Circular No. 12 dated 23 December 2002 of Bangladesh Bank, an auditcommittee was first constituted by the Board of Directors of Eastern Bank Limited (EBL) in its 253rdMeeting held on 7th January 2003 and thereafter last reconstituted by the Board of Directors in the 352ndMeeting held on 29th August 2006 in this regard as under:


2B Related party disclosures

I)

Status with the Bank Status

Percentage (%) of

Holding/ Interest in

the concern

Chairman Royal Capital Limited Chairman 50.00%

MD 10.00%

Finlay International Ltd MD 10.00%(Ex J. F. Engineering Services Ltd.)Royal Garden Partner 50.00%

Director Need Apparels (pvt) Ltd. Chairman 35.00%Need Tex Chittagong Ltd Chairman 17.50%Need Fashion wear & Textile Ltd Chairman 35.00%Need Dresses (pvt) Ltd Chairman 17.50%Chittagong Oxygen (pvt) Ltd Chairman 20.00%Finlay International Ltd Chairman 81.00%(Ex J.F. Engineering Services Ltd.)Z. N. Enterprise Ltd MD 50.00%Namreen Enterprise Ltd MD 50.00%

M.M. Khan & Company Ltd MD 52.00%Port Link Logistics Centre Ltd Director 25.00%South Asia Capital Ltd Director 6.38%South Asia Securities Ltd Director 4.40%

Director 36.00%50.00%

Director 20.00%Mr A. M. Shaukat Ali Director Chairman 20%

Director M/s Allied Enterprise Proprietor 100.00%Represented by

Director Mir Akhter Hossain Ltd Director 10.00%Mir Ceramic Ltd Director 30.00%Mir Holdings Ltd Director 30.00%

Director Advance Technology Computers Ltd Chairman 33.33%Advanced Data Networks System Ltd Chairman 20.00%Tech Valley Computers Ltd Director 33.33%Pangaca Partners (BD) Ltd Director 20.00%

Director Purnima Construction (Pvt) Ltd MD 15.00%Unique Hotel and Resorts Ltd 15.00%

Director Ancient Steamship Company Proprietor 100.00%(Independent

Director)Hudig and Meah (BD) Ltd MD 51.00%

Ms Aneela Haque Director Andes Ltd MD 80.00%Presence Ltd MD 80.00%Andes Publications Proprietor 100.00%

Consolidated Tea & Plantation Ltd

Arusha & Co. (pvt) Ltd

Mrs. Mahbuba Hossain

Aquamarine Distributions Ltd. Represented by Mr Asif Mahmood

Mr Ahmed Jamal

Consolidated Tea & Plantation Ltd

Engineering Consultants &Associates Ltd

Peninsular Housing & Development LtdLegend Properties Development Ltd

Mr. Ahmed Quamrul Islam Chowdhury, OBE

Mr Md. Showkat Ali Chowdhury

Name of Directors

Directors' interest in different entities

Name of the firms / companies inwhich interested as proprietor,partner, director, managing agent,guarantor, employee etc.

Representative

Director

Mr Meah Mohammad Abdur Rahim

Director

M/s Unique Eastern (Pvt)Ltd. Represented by Mr GaziMd. Shakhawat Hossain


Director Muhammad Shaheedullah & Co Proprietor 100.00%

ii) Significant contracts where Bank is a party & wherein Directors have interest: Nil

iii) Shares issued to Directors and Executives without consideration or exercisable at discount : Nil

iv) Related Party Transactions : See Annexure -C

v) Lending Policies to Related Parties :

Related parties are allowed Loans and Advances as per General Loan Policy of the Bank.

vi)

vii) Investments in the Securities of Directors and their related concern : Nil

M/s Borak Real Estate (Pvt) Ltd. Represented by Mr Miah Muhammad Shaheedullah

Business other than Banking business with any related concern of the Directors as per Section 18(2) ofthe Bank Companies Act 1991: Nil

NilMr Ali Reza Iftekhar MD & CEO Nil Nil


At 31 March 08 At 31 Dec 07Taka Taka

3 Cash in hand (Including foreign currencies)Local currency 379,585,265 361,638,420

Foreign Currencies 20,399,614 21,289,195399,984,879 382,927,615

4

Bangladesh Bank :Local currency 1,283,786,681 1,527,063,518Foreign currencies 1,144,479,730 366,445,253

2,428,266,411 1,893,508,77158,268,997 70,866,892

2,486,535,408 1,964,375,663

4.1 Cash Reserve Ratio (CRR): 5% of Average Demand and Time Liabilities:

30,479,677,778 27,631,279,000 Required Reserve (5 % of Average time and demand liabilities) 1,523,983,889 1,381,563,950 Actual Reserve held with Bangladesh Bank ( In local currency)* 1,551,505,000 1,511,426,000 Surplus / (Shortage) 27,521,111 129,862,050 * As per Bangladesh Bank statement average balance.

4.2

30,479,677,778 27,631,279,000 Required Reserve (18 % of total time and demand liabilities) 5,486,342,000 4,973,630,220 Actual Reserve held 5,701,845,876 5,247,070,507 Surplus 215,503,876 273,440,287

4.2.1 Composition of Actual Reserve held Cash held 399,984,879 382,927,615 Balance with Bangladesh Bank 1,275,559,000 1,511,426,000 Balance with Sonali Bank 58,268,997 70,866,892 TT in Transit 212,500,000 - Unencumbered approved securities (HTM) 3,755,533,000 3,281,850,000

5,701,845,876 5,247,070,507

5 Balances with other banks and financial institutionsNotes

Inside Bangladesh 5.1 1,626,369,680 1,276,690,139 Out side Bangladesh 5.2 (333,307,483) 263,661,848

1,293,062,197 1,540,351,9875.1 Inside Bangladesh

In Current Accounts with: Agrani Bank Limited 23,476,601 12,515,619 Janata Bank Limited 16,711,933 31,521,547 Bangladesh Krishi Bank 4,997,916 4,216,358 The Trust Bank Limited 168,529,891 1,584,951 Standard Chartered Bank - 1,794,093 Sonali Bank Limited 25,742,152 33,175,066 The City Bank Limited 6,193,905 2,006,546 National Bank Limited 15,285,149 15,715,943 National Credit & Commerce Bank Limited 3,220,108 2,647,300 Rupali Bank Limited 9,708,904 9,698,100 Islami Bank Bangladesh Limited 70,644 70,644 AB Bank Limited (2,650,979) 3,374,609 Pubali Bank Limited 7,731,055 2,489,765 United Commercial Bank Limited 4,369,566 4,702,715

283,386,845 125,513,256

Balance with Bangladesh Bank and its agent Bank(s) (Including foreign currencies)

Sonali Bank (as an agent of Bangladesh Bank)-Local Currency

Average time and demand liabilities of January 2008 (excluding inter-bank deposit)

Statutory Liquidity Ratio ( SLR): 18% of average Demand andTime Liabilities:Average time and demand liabilities of January 2008 (excluding inter-bank deposit)



In Short Term Deposit Accounts with:Sonali Bank Limited 38,944,510 19,959,732Prime Bank Limited 5,022 4,909Janata Bank Limited 4,866 4,790Agrani Bank Limited 354,932 336,436Bank Asia Limited 62,113 61,066BASIC Bank Limited 43,143 42,482Bangladesh Krishi Bank 118,411 118,661Dhaka Bank Limited 80,571 79,527The City Bank Limited 11,919,002 38,719,230Oriental Bank Limited 627,946 689,287NCC Bank Limited 758,367 739,000National Bank Limited 411,139 403,518Standard Chartered Bank 6,745,485 - EXIM Bank Limited 18,565 18,245

60,094,072 61,176,883In Fixed Deposit Accounts with Banks & NBFIs : BRAC Bank Limited 350,000,000 390,000,000 Mutual Trust Bank Limited 250,000,000 - Commercial Bank of Ceylon Ltd. 12,888,763 - First Security Bank Limited 50,000,000 -

Uttara Finance & Investment Co. Limited - 200,000,000Premier Leasing International Limited 120,000,000 70,000,000Union Capital Limited 120,000,000 100,000,000National Housing & Finance Limited 120,000,000 120,000,000

Industrial and Infrastructural Development Finance Company Ltd. 50,000,000 - International Leasing & Financial Services Limited 100,000,000 100,000,000 LankaBangla Finance Limited 110,000,000 110,000,000

1,282,888,763 1,090,000,0001,626,369,680 1,276,690,139

5.2 Out side BangladeshIn Deposit account (Non-interest bearing) with: The Bank Tokyo Mitshubishi, Tokyo (1,739,542) 79,576 The Bank of Tokyo Mitshubishi, Kolkata* 3,429,000 3,428,640 The Bank of Tokyo Mitshubishi, London (782,917) 9,036,026 Standard Chartered Bank, Kolkata 2,320,349 5,596,850 Standard Chartered Bank , Colombo 2,574,075 4,638,532 Standard Chartered Bank, London 41,056,789 21,873,893 Standard Chartered Bank, Singapore 282,512 243,848 Standard Chartered Bank, New york (6,569,849) 112,080,411 Citibank N A, New york (30,153,653) (53,478,100) Citibank NA, Mumbai 108,042 108,030 Nepal Bangladesh Bank Limited 864,172 437,216 AB Bank Limited, Mumbai 832,851 242,275 Bank of Bhutan 448,387 455,677 Mashreqbank, Newyork (31,988,127) 32,254,360 JP Morgan Chase Bank, New York (375,558,788) (6,834,759) The Bank of Nova Scotia, Toronto (131,766) (35,267) JP Morgan Chase Bank NA, Sydney 209,420 (259,804) American Express Bank, New York (1,633,364) 45,388,659 Zurcher Kantonal Bank, Zurich 75,919 73,494



National Commercial Bank, KSA 457,090 457,493 Wachovia Bank NA New York (48,252,297) 11,485,207 ICICI Bank 4,803,387 5,868,320 NDLC-IFIC Bank (NIB) Pakistan 3,499,338 627,818 HSBC, New york 2,350,232 (57,351) Commerz Bank AG, Frankfurt, Germany 4,216,290 3,603,877 Placement to OBU 95,974,967 66,346,927

(333,307,483) 263,661,848(For details of Foreign currency amounts and rates thereof please see "Annexure-B")

5.3

Receivable : On demand (145,895,604) 322,828,178 In not more than one month 622,982,835 251,176,881 In more than one month but not more than three months 228,792,490 219,904,078 In more than three months but not more than one year 587,182,476 746,442,850 In more than one year but not more than five years - - In more than five years - -

1,293,062,197 1,540,351,987

6 Money at call and short noticeWith Deposit Money Bank (s): Mutual Trust Bank Limited - 250,000,000With NBFIs: IIDFC - 90,000,000 LankaBangla Finance Limited - 50,000,000 IPDC of Bangladesh Limited - 40,000,000

National Housing & Finance Limited - 20,000,000 GSP Finance Limited - 20,000,000

- 470,000,000

Receivable : On demand - 470,000,000 In not more than one month - - In more than one months but not more than three months - - In more than three months but not more than one year - - In more than one year but not more than five years - - In more than five years - -

- 470,000,000

6.1 Maturity Grouping of Money at Call and short notice

Balance with other banks and financial institutions (accordingto remaining maturity grouping)

* An amount of USD 50,000.00 has been blocked by the Court Injunction due to disputes in two LCs amountingto USD 47,232.00 opened at our Bogra & Khantunganj Branches. Both the cases are pending in Kolkata HighCourt and our lawyers are attending these cases. However the Bank management feels that the outcome of thecase will be in favor of the Bank.



7 Investments Notes

In Government securities: Treasury bills 7.1 970,000,000 1,170,000,000 Unrealized Gain/(Loss) on HFT & HTM T-Bills, Bonds 29,138,465 29,340,837 Bonds 7.3 5,898,900,000 4,550,400,000 Prize Bonds 1,678,100 2,095,300

6,899,716,565 5,751,836,137Other Investments : Debentures 7.2 132,000,000 137,000,000 Zero Coupon Bond (ULC) 1,712,943 2,297,370 Preference Share (STS Holdings Ltd) 50,000,000 - Ordinary Shares( Quoted And Unquoted) 7.4 4,856,600 4,856,600

188,569,543 144,153,9707,088,286,108 5,895,990,107

7.1 Treasury bills:

91- day Treasury bills 150,000,000 - 182- day Treasury bills 100,000,000 - 364 -day Treasury bills 90,000,000 90,000,0005- year Treasury bills 630,000,000 1,080,000,000

Total Treasury Bills 970,000,000 1,170,000,000

Date of Interest7.2 Debentures : maturity Rate(%p.a.)

Investment Corporation of Bangladesh 26.08.10 5.00 15,000,000 15,000,000 Investment Corporation of Bangladesh 24.11.12 5.00 25,000,000 25,000,000 Investment Corporation of Bangladesh 31.05.13 5.00 12,000,000 12,000,000 House Building Finance Corporation 31.08.16 6.50 45,000,000 45,000,000 House Building Finance Corporation 15.02.15 5.50 35,000,000 40,000,000

132,000,000 137,000,000Date of Yieldmaturity (%p.a.)

7.3 Bonds: 10 Year Treasury bonds 04.07.17 11.78 50,000,000 250,000,000 10 Year Treasury bonds 04.07.17 11.75 100,000,000 35,000,000 10 Year Treasury bonds 08.08.17 11.74 200,000,000 150,000,000 10 Year Treasury bonds 08.08.17 11.78 50,000,000 200,000,000 10 Year Treasury bonds 03.10.17 11.85 180,000,000 150,000,000 10 Year Treasury bonds 08.11.17 11.73 200,000,000 180,000,000 10 Year Treasury bonds 05.12.17 11.72 150,000,000 - 10 Year Treasury bonds 05.12.17 11.73 35,000,000 - 10 Year Treasury bonds 02.01.18 11.73 150,000,000 - 10 Year Treasury bonds 06.02.18 11.71 432,000,000 - 10 Year Treasury bonds 05.03.18 11.72 566,500,000 -

5- year Treasury bonds 07.06.09 8.00 100,000,000 100,000,000 5- year Treasury bonds 07.06.09 7.95 60,000,000 300,000,000 5- year Treasury bonds 07.08.11 10.80 500,000,000 350,000,000 5- year Treasury bonds 20.09.11 10.90 150,000,000 400,000,000 5- year Treasury bonds 22.11.11 10.80 250,000,000 144,000,000 5- year Treasury bonds 24.01.12 10.90 100,000,000 470,000,000 5- year Treasury bonds 10.90 300,000,000 250,000,000 5- year Treasury bonds 18.07.12 10.82 150,000,000 - 5- year Treasury bonds 18.07.12 10.70 200,000,000 - 5- year Treasury bonds 19.09.12 10.73 400,000,000 - 5- year Treasury bonds 10.64 420,000,000 160,000,000 5- year Treasury bonds 10.63 200,000,000 500,000,000 5- year Treasury bonds 20.02.13 10.60 150,000,000 - 5- year Treasury bonds 10.65 144,000,000 150,000,000

5,237,500,000 3,789,000,000

22.02.12

21.11.1221.11.12

19.12.12



1 Year T & T Bonds - 100,000,000 3 Year T & T Bonds 11.06.10 10.50 210,000,000 271,400,000 3 Year T & T Bonds 11.06.10 11.00 61,400,000 - 3 Year T & T Bonds 29.06.08 10.40 100,000,000 100,000,000 3 Year T & T Bonds 01.11.09 11.01 50,000,000 50,000,000 3 Year T & T Bonds 10.75 40,000,000 240,000,000 3 Year T & T Bonds 01.11.09 10.86 40,000,000 - 3 Year T & T Bonds 01.11.09 10.81 40,000,000 - 3 Year T & T Bonds 01.11.09 10.90 40,000,000 - 3 Year T & T Bonds 01.11.09 10.70 40,000,000 - 3 Year T & T Bonds 01.11.09 10.77 40,000,000 -

661,400,000 761,400,0005,898,900,000 4,550,400,000

7.4 Ordinary Shares (Quoted and Unquoted): Note Quoted: Investment Corporation of Bangladesh 7.4.1 856,600 856,600

856,600 856,600No of shares

Un- quoted: Central Depository (Bangladesh) Limited* 4,000,000 4,000,000

4,000,000 4,000,0004,856,600 4,856,600

7.4.1 Valuation of sharesShares (Quoted as on 31-03-2008)

Face value per share No of shares Market value Market value

31.03.08 31.12.07 Taka Taka

8,566 2,550.25 1,113.50 21,845,442 9,538,241

8,566 2,550.25 1,113.50 21,845,442 9,538,241

7.5 Assets pledged as security

Assets in the amount shown below were pledged as security for the following liabilities :

Liabilities other Banks - - Liabilities to Customers - -

- - 7.6 Remaining maturity grouping of investments

On demand 7,492,997 8,112,569 In not more than one month 180,000,000 150,000,000 In more than one month but not more than three months 100,000,000 300,000,000 In more than three months but not more than one year 819,893,111 948,180,168 In more than one year but not more than five years 3,775,400,000 3,427,697,370 In more than five years 2,205,500,000 1,062,000,000

7,088,286,108 5,895,990,107

4

Market price

01.11.09

Per share

100

* The Bank holds 4 shares of Tk.1,000,000 each in Central Depository Bangladesh Ltd. (CDBL). First Installmentof Tk 1,200,000 was paid on 05 September 2000 and final payment of Tk 2,800,000 was made on 20 March 2003totaling Tk 4,000,000. CDBL issued those shares in dematerialized form. Under the provision of the DepositorsAct 1999 the account statement is legally admissible as primafacie evidence of share holding in CDBL.

Investment Corporation of Bangladesh



8 Loans and Advances*Loans, cash credits, overdrafts etc.Inside Bangladesh: Loans - general 28,424,439,806 25,958,579,503 Cash credit 838,938,541 792,125,214 Overdraft 3,633,347,586 3,443,466,719Outside Bangladesh: - -

32,896,725,933 30,194,171,436Bills purchased and discounted Inside Bangladesh Local bills 896,536,992 647,073,531 Foreign bills /documents 149,314,683 54,461,327

1,045,851,675 701,534,858 Outside Bangladesh - -

1,045,851,675 701,534,85833,942,577,608 30,895,706,294

8.1 Residual maturity grouping of loans and advances including bills purchased & discounted

Receivable : On demand 7,520,013,316 6,635,465,968 In more than one month but not more than three months 7,119,656,953 5,850,655,306 In more than three months but not more than one year 7,939,000,571 7,352,032,434 In more than one year but not more than five years 10,287,729,073 10,078,912,238 In more than five years 1,076,177,695 978,640,348

33,942,577,608 30,895,706,294

8.2 Loans and advances on the basis of significant concentration

8.2.1 Loans and advances to Directors , executives and others

Advance to Directors and their allied concerns(including Ex-Directors) 16,171,645 15,853,406 Advances to CEO & Managing Director 4,295,802 4,456,238 Advances to Other executives and staffs 287,294,115 253,030,002 Advances to Customers (Group wise) 25,895,128,836 22,958,736,506 Industrial Advances 7,739,687,210 7,663,630,142

33,942,577,608 30,895,706,294

Large Loan details(Loans and Advances allowed to each customer exceeding 10% of Bank's total capital):

* Total Loans and Advances (In Crore Taka) 3,030.82 2,500.64 No. of Customers 124 116 Classified amount thereon (In Crore Taka) 45.40 39.40

* There is a difference of Loans and Advances between General Ledger and Classification of Loan Statements(CL) amounting Tk. 32,733,559. As a result loans and advances is understated to that extent.The rectificationprocess to eliminate the difference is being carried out.

*The amount represents the sum of total loans and advances to each customer exceeding Tk 42.74 crorewhich is computed @ 10% of total capital of the bank (i.e. Tk 427.47 crore) as at 31 March 2008.



8.2.2 Industry-wise concentration of loans and advances including bills purchased and discounted

Commercial and Trading 3,447,733,003 2,459,936,902 Importer of Commodity 1,808,736,587 890,423,103 Construction 673,877,083 454,799,675 Edible Oil Refinery Industry 2,181,585,810 1,155,427,618 Electronics Goods 1,004,622,755 866,715,805 Individuals 3,814,840,398 3,737,422,048 Pharmaceuticals Industries 878,772,624 902,393,082 Readymade Garments Industry 4,298,977,950 3,923,314,596 Ship Breaking Industry 861,681,493 1,390,246,110 Industries for Steel products 1,822,857,073 2,325,347,115 Telecommunication Sector 1,920,913,477 1,534,693,785 Textile Mills 4,085,776,817 3,737,175,590 Others 7,142,202,538 7,517,810,865

33,942,577,608 30,895,706,2948.2.3

Inside Bangladesh Dhaka Division 27,648,783,199 25,118,588,988 Chittagong Division 5,320,498,451 4,834,964,656 Sylhet Division 283,195,746 267,154,570 Rajshahi Division 392,110,104 367,120,744 Khulna Division 297,990,108 307,877,336

33,942,577,608 30,895,706,294Outside Bangladesh - -

33,942,577,608 30,895,706,294

8.3 Classified and unclassified loans & advances Unclassified:

Standard 32,131,282,869 29,280,971,596 Special Mention Accounts 345,124,020 281,028,646

32,476,406,889 29,562,000,242 Sub-standard 57,174,104 57,499,173 Doubtful 469,522,501 378,234,156 Bad/Loss 939,474,114 897,972,723

33,942,577,608 30,895,706,294 Measures taken for recovery of classified loans:Bank as a whole takes following steps to recover its classified Loans and Advances

i) Sending letters and reminders to customersii) Special assets department holds discussion with the clients to recover the loans

iii) disposal of security through auctioniv) Legal proceedings and settlement v) Negotiation and approval from Head office/Board

Geographical location-wise concentration of Loans and advances including bills purchased and discounted



8.4 Particulars of loans and advancesi) 29,981,942,705 27,186,469,971

ii)3,960,634,903 3,709,236,323

iii)

- - iv) -

33,942,577,608 30,895,706,294v)

307,761,562 273,339,646

vi)

- -

307,761,562 273,339,646

viii)

- -

ix) Due from other banking companies - -

x) Information in respect of classified loans and advancesa) Classified loans for which interest/profit not credited to income 1,466,170,718 1,333,706,052

(i) (Decrease)/Increase of provision (specific) - (ii) Amount of written off debt against fully provided debts - 234,785,276 (iii) Amount of debt recovered against the debt which was previously written off 10,644,700 73,090,678b) Amount of provision kept against loans classified as bad/loss as at the Balance Sheet date. 547,882,097 516,394,931

c) Amount of interest creditable to the interest suspense account 218,605,140 189,517,130

xi) Cumulative amount of written off loans

Opening Balance 658,893,957 497,199,359 Amount written off during the period - 234,785,276 Amount recovered during the period (10,644,700) (73,090,678)Balance of written off loans and advances yet to be recovered 648,249,257 658,893,957The amount of written off loans for which law suits have been filed 1,216,998,690 1,216,998,690

Debts due by directors or officers of the bank or any of themeither jointly or severally with any other persons.

Maximum total amount of advances, including temporaryadvances, granted during the period to the companies orfirms in which the directors of the bank have interests asdirectors, partners or managing agents or, in case of privatecompanies as members .

Debts due by companies and firms in which the directors ofthe bank have interests as directors, partners or managingagent or in case of private companies as members.

Debts adversely classified; for which no provision is created.

Debts considered good and secured by the personal security of one or more parties in addition to the personal security of the debtors

Maximum total amount of advances, including temporaryadvances made at any time during the period to directors ormanagers or officers of the bank or any of them eitherseverally or jointly with any other persons.

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

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

vii)



8.5 Out of the total amount cases have been filed against the parties amounting Tk. 1,216,998,690. Year wise break up is as follows:Upto 2007 1,216,998,690 1,199,390,883During the period - 17,607,807

1,216,998,690 1,216,998,690

8.6 Bills purchased & discounted:(on the basis of the residual maturity grouping)Receivable :

Within one month 543,857,072 263,567,045In more than one month but less than three months 384,224,192 316,341,039In more than three months but less than six months 117,767,411 121,626,774Above six months - -

1,045,848,675 701,534,858

9 Fixed assets including land, building, furniture and fixtures Cost Freehold Land and Land Development 535,306,650 535,306,650 Buildings on Freehold land 22,192,280 21,592,280 Machinery and Equipments 282,486,401 263,740,674 Furniture and fixtures 146,633,854 139,951,888 Vehicles 50,325,442 50,325,442 Leased Assets (Finance Lease) 91,591,169 91,591,169 Total Cost 1,128,535,796 1,102,508,103 Accumulated depreciation (249,707,673) (231,240,360) Written Down Value 878,828,123 871,267,743 (Annexure-A enclosed for details)

10 Other assets NoteIncome generating - -

Non- Income generatingStock of stationery 9,771,453 9,203,391Stamps on hand 341,916 509,203Suspense account 10.1 9,558,231 9,599,100Advance paid for development of land and building 28,961,032 28,961,032Security Deposits 1,907,625 4,467,767Interest and other receivables 156,855,928 134,034,062Other Account receivables BCCI 10.2 105,920,605 105,920,605Advance Rent and Advertisement 98,042,160 81,232,199Prepaid expenses and other prepayments 110,084,663 98,653,619Bangladesh Bank Clearing Account 13,604,291 13,817,985Inter branch & Inter system Accounts 10.3 - - Inter branch cash transfer account (Net) 10.4 7,132 7,132

535,055,036 486,406,095

Bangladesh Bank issued a circular no. 02 dated 13 January 2003 instructing all the banks in the country towrite off bad & loss loans which have passed five years after its classification and legal actions have beentaken against all those default borrowers with an immediate effect. In compliance with the circular, theBank formed a Special Assets Department in its Head Office from where monitoring has been madeaccordingly. During the period, the Bank did not write off any loan. Legal actions have been lying with themoney suit court against Tk 1,216,998,690. In this connection, Special Assets Department has beenmaintaining separate ledger for all individual cases and liaison with Bank's legal counsel constantly forthose cases lying in the honorable court to recover the debts. The Special Assets Department follows up therealization progress of such debts. During the period total amount realized by the special assets departmentis Tk 10,644,700.



10.1 Suspense Account

10.2 Other Account Receivable -BCCI

Tax refundable 178,898,420 178,898,420Less. Provision made (72,977,815) (72,977,815)Tax refundable on account of BCCI 105,920,605 105,920,605

10.3 Inter branch & Inter system Accounts

10.4 Inter branch cash transfer account

11 Borrowings from other banks, financial institutions and agents

Secured - - Unsecured:

In side BangladeshPayable on demand

Agrani Bank Limited - 150,000,000 Sonali Bank Limited - 400,000,000 Janata Bank Limited - 200,000,000 Dutch-Bangla Bank Limited 300,000,000 100,000,000 Bangladesh Shilpa Bank - 60,000,000 National Bank Limited - 300,000,000 The Hongkong & Shanghai Banking Corporation 50,000,000 50,000,000 Commercial Bank of Ceylon Limited 175,000,000 - AB Bank Limited 40,000,000 - Southeast Bank Limited 40,000,000 - Jamuna Bank Limited 10,000,000 - Standard Chartered Bank 50,000,000 - IFIC Bank Limited 20,000,000 - Standard Bank Limited 30,000,000 - United Commercial Bank Limited 80,000,000 - The Premier Bank Limited 200,000,000 - ONE Bank Limited 150,000,000 -

The City Bank Limited 40,000,000 200,000,000 State Bank of India, Dhaka 60,000,000 - BASIC Bank Limited 380,000,000 -

1,625,000,000 1,460,000,000

This includes the system related automatic suspenses, sundry debtors and temporary parking accounts whichare in the process of regular monitoring so that the balance is reduced to non material level.

There is no unreconciled item (debit or credit entries) in the Inter branch and Inter system account as on thereporting date.

This represents amount of advance tax paid to tax authority by erstwhile BCCI overseas Limited, predecessor ofEastern Bank Limited. This amount has been carried since the formation of Eastern Bank Limited.

The outstanding balance in this account was created due to difference in decimal places of exchange rates whilemaking entry involving foreign currency by the branches. The same has already been identified and to beadjusted subsequently.



Maturity Interest Term Borrowings Date rate(%)

Citibank N A - 200,000,000Citibank N A - 75,000,000BASIC Bank Limited 28.05.08 10.00 200,000,000 200,000,000BASIC Bank Limited 25.05.08 10.00 100,000,000 100,000,000BASIC Bank Limited 01.01.09 10.00 100,000,000 100,000,000Prime Bank Limited - 250,000,000Prime Bank Limited - 200,000,000Standard Bank Limited - 100,000,000Trust Bank Limited 12.05.08 11.00 250,000,000 - Southeast Bank Limited 04.05.08 10.00 200,000,000 - Uttara Bank Limited 25.06.08 11.50 250,000,000 - Janata Bank Limited 29.05.08 10.00 200,000,000 - Southeast Bank Limited 11.04.08 10.85 200,000,000 - Dutch-Bangla Bank Limited - 270,000,000Southeast Bank Limited 15.04.08 10.85 200,000,000 - Trust Bank Limited 12.05.08 10.50 200,000,000 200,000,000

1,900,000,000 1,695,000,000REPO (Secured against treasury bills) 11.1 3,700,000,000 2,270,000,000

ADB Financing for Agri Business Loan to NGOs 329,464,805 316,322,800 Refinancing for Agrobased Industries from Bangladesh Bank 539,160,934 255,796,031Out Side Bangladesh - -

8,093,625,739 5,997,118,831

11.1 Bank wise REPO Maturity Interest Date rate (%)

AB Bank Limited 22.04.08 9.00 200,000,000 200,000,000 AB Bank Limited 14.07.08 8.00 200,000,000 200,000,000 AB Bank Limited 03.08.08 9.40 200,000,000 200,000,000 AB Bank Limited 05.08.08 9.15 200,000,000 150,000,000 AB Bank Limited 10.11.08 8.80 200,000,000 - AB Bank Limited 05.02.09 9.50 200,000,000 - AB Bank Limited 15.02.09 9.50 250,000,000 - Commercial Bank of Ceylon, Dhaka 05.05.08 9.00 200,000,000 250,000,000 Commercial Bank of Ceylon, Dhaka 18.05.08 8.25 250,000,000 200,000,000 Commercial Bank of Ceylon, Dhaka - 200,000,000 Commercial Bank of Ceylon, Dhaka - 120,000,000 Agrani Bank Limited - 150,000,000 Bangladesh Bank 01.04.08 8.50 1,200,000,000 - BASIC Bank Limited 10.03.08 10.75 600,000,000 600,000,000

3,700,000,000 2,270,000,000

11.2 Remaining maturity grouping of Borrowings Payable: On demand 1,625,000,000 1,460,000,000 In not more than one month 1,954,732,000 818,000,000 In more than one month but not more than three months 1,865,963,934 2,965,000,000 In more than three months but not more than one year 2,078,115,000 437,796,031 In more than one year but not more than five years 314,885,000 316,322,800 In more than five years 254,929,805 -

8,093,625,739 5,997,118,831



12 Deposits and other accounts Notes

Current deposits and other accounts 12.2 3,872,445,433 3,480,781,653 Bills payable 12.3 512,546,709 491,030,835 Savings Bank deposits 12.4 5,917,594,088 5,896,619,266 Fixed deposits 12.5 21,345,783,317 20,201,082,357 Bearer certificate of deposits* 22,250,000 22,250,000

31,670,619,547 30,091,764,111

*Issuance of Bearer Certificate of Deposits has been stopped as per BRPD circular No. 09 dated 20 October 2002.

12.1 Deposits from banks-Inside Bangladesh 12.6 1,806,414 1,806,414 Other than banks 31,668,813,133 30,089,957,697

31,670,619,547 30,091,764,11112.2 Current deposits and other accounts

Current deposits 12.2.1 1,631,635,795 1,599,695,057 Sundry deposits 1,146,936,827 1,009,210,000 Matured deposits 13,995,208 16,214,845 Un-claimed deposits 1,045,116 1,161,329 BCCI Reducing deposits 197,997,068 197,997,068 Interest accrued on deposits 880,835,419 656,503,354

3,872,445,433 3,480,781,653

12.2.1 Current Deposits Local currency 1,418,362,302 1,409,101,521 Foreign currency 213,273,493 190,593,536

1,631,635,795 1,599,695,057

12.3 Bills Payable Local currency 502,364,998 494,261,408 Foreign currency 10,181,711 (3,230,573)

512,546,709 491,030,835

12.4 Savings Bank Deposits

Saving deposits 2,593,779,166 2,663,422,827 EBL SB Insurance account 583,778 658,674 High performance deposit - retail 2,326,059,953 2,326,260,425 EBL Campus account 7,606,448 8,001,872 EBL Interesting account 495,418,295 468,036,965 EBL Confidence 66,897,010 30,891,500 Salary account deposits 26,747,322 23,210,507 Monthly deposit plan 400,502,116 376,136,496

5,917,594,088 5,896,619,266

12.5 Fixed Deposits Short term deposits 2,493,371,046 2,993,115,248 Term deposits 18,733,327,198 17,091,662,695 Non Resident foreign currency deposits 119,085,073 116,304,414

21,345,783,317 20,201,082,357



12.6 Deposits from banksIn short Term Deposits Accounts with Janata Bank Limited 38,511 38,511 National Bank Limited 120,265 120,265 ONE Bank Limited 1,619,076 1,619,076 Southeast Bank Limited 28,562 28,562

1,806,414 1,806,414Total Bank Deposits-inside Bangladesh 1,806,414 1,806,414

12.7 Residual maturity grouping of Deposits Notes

From BanksPayable: On demand 1,806,414 - Within one month 1,806,414 In more than one month but less than six months - - In more than six months but less than one year - - In more than one year but within five years - - In more than five years but within ten years - -

1,806,414 1,806,414From other than BanksPayable: On demand 4,128,020,426 4,593,401,555 Within one month 4,829,457,116 3,910,865,824 In more than one month but less than six months 13,147,734,163 12,312,929,213 In more than six months but less than one year 6,670,975,446 6,702,979,035 In more than one year but within five years 2,687,919,939 2,567,732,986 In more than five years but within ten years 204,706,043 2,049,084

31,668,813,133 30,089,957,69731,670,619,547 30,091,764,111

13 Other liabilities

Privileged creditors 23,255,858 80,587,214Acquirer liabilities 196,294,727 18,898,409Sundry creditors 80,281,542 75,887,814Miscellaneous creditors 427,662,910 428,947,711Exchange Equalization Account 22,628,988 22,628,988Internal suspense 13.4 11,874,808 9,415,137Current tax liability 13.1 490,050,303 429,493,028Deferred tax liability 13.8 8,635,282 8,635,282Provision for loans and advances 13.2 1,292,715,466 1,175,621,872Interest suspense account 13.3 218,605,140 189,517,130Provision for other assets 13.5 179,000 179,000Provision for gratuity 13.6 1,327,272 - Advance Interest /Commission Received 51,157,501 96,835,958Expenses payable 65,920,167 72,212,858Miscellaneous payable 51,605,012 68,513,695BCCI Liabilities 7,321,887 7,321,887Obligation Under Finance Lease 2.5A 17,128,146 22,531,990SIA Insurance Premium 1,650 1,650

2,966,645,659 2,707,229,623



13.1 Current tax Liability/(assets)Provision for tax

Opening balance 2,041,437,717 1,128,536,653 Settlement/adjustments for previous years - 53,505,613 Provision for tax made during the period 13.1.1 250,567,042 859,395,451

2,292,004,759 2,041,437,717Balance of Income tax paid Opening balance 1,611,944,689 888,742,342 Settlement/adjustments for previous years - - Paid during the period 190,009,767 723,202,347

1,801,954,456 1,611,944,689490,050,303 429,493,028

13.1.1 Provision for tax made during the periodCurrent Tax 250,567,042 859,395,451

250,567,042 859,395,451

Provision for Current tax has been made on operating profit using the Tax rate 45% as per FinanceOrdinance 2007.

13.1.2 Year-wise tax status

There exists a shortfall of provision in tax amounting Tk 28,135,060 for the assessment year 1996-1997 forwhich an appeal is pending in Honorable High Court. The Bank management has decided to provide thesaid amount after final settlement of the appeal if required. All other assessments have been completed andnecessary provision made accordingly.

13.2 Provision for loans and advances (Including 0.50% on contingent assets)

(a) Specific provision against Loans & Advances Opening balance 659,691,825 393,879,956 Fully provided debt written off during the period - (194,024,196) Recovery of amounts previously written off - - Provision released or no longer required (8,782,077) - Specific provision for the period 67,499,247 459,836,065

58,717,170 265,811,869 Provision held at the end of the period 718,408,995 659,691,825

Opening balance 515,930,047 391,372,104 Provision made during the period for contingent assets 22,236,237 65,753,237 Provision made during the period for loans and advances 36,140,187 58,804,706

574,306,471 515,930,047Total (a) + (b) 1,292,715,466 1,175,621,872

(b) General provision against unclassified loans & advances: (Including 0.5% provision onContingent Assets)

13.1.3 The Bank made an appeal to Commissioner of Taxes (Appeal) and Appellate Tribunal against the order of

Deputy Commissioner of Taxes (Order No.728/Co,-20/Tax area-7/98-99) for disallowing set off and carryforward of loss (Tk 2,436,053,918) incurred by BCCI overseas Limited, Predecessor of Eastern Bank Limited,both the Authority had given their Judgement in favour of the Bank. But the Deputy Commissioner of Taxesin his revised assessment order dated 19 September 2005 allowed only Tk 134,373,603 explaining the groundthat as there is no scope to set-off any loss other than Assessed Loss. So in compliance with the order ofHonorable Tribunal and Commissioner of Taxes (Appeal), The DCT allowed to set-off the said amount withthe assessment year 1996-97 as there is no assessed loss for set-off in any other year. Meanwhile the DeputyCommissioner office filed a reference application No.181 of 2001 before The Honorable High Court Divisionchallenging the Tribunals' order, hearing of the reference application case is still pending.The Bankmanagement feels that the High Court's order will be given in favour of the Bank.



13.2.1

Nature Outstanding Eligible Required Security provision

N/A 470,161,314SMA N/A 16,155,682SS 15,050,000 8,208,381DF 81,220,000 162,318,517BL 402,577,948 547,882,097Staff loan N/A N/ATotal 498,847,948 1,204,725,991

13.3 Interest suspense account

Opening balance 189,517,130 189,603,161 Amount transferred during the period 96,338,512 731,102,840 Amount recovered during the period (67,250,502) (690,427,791) Amount written off during the period against fully provided debts - (40,761,080) Balance at the end of the period 218,605,140 189,517,130

13.4 Internal Suspense Opening balance 9,415,137 6,782,244 Addition during the period 2,623,088 3,069,465 Adjusted during the period (163,417) (436,572) Balance at the end of the period 11,874,808 9,415,137

13.5 Provision for other assetsProvision for other assets Opening balance 179,000 179,000 Provision made during the period - - Adjustment made during the period - -

179,000 179,000

13.6 Provision for gratuity Opening balance - - Provision made during the period 3,703,887 11,303,751 Payment made during the period - - Amount Transferred to Gratuity Fund (2,376,615) (11,303,751)

1,327,272 -

13.7 Provision for Nostro Reconciliation

13.8 Deferred Tax (assets)/Liability

Deferred Tax Assets :Opening Balance 1,727,113 488,380Addition during the period - 1,238,733

1,727,113 1,727,113Adjustment made during the period - - Closing balance 1,727,113 1,727,113

469,522,501

N/A

No provision is required as per Circular letter No. FEPD(FEMO)/01/2005-677 for unreconciled nostro debitentries as there is no entry aging more than 3 months.

N/A187,424,16933,975,311,166

291,373,53633,108,570,826

99,909,517324,637,034

345,124,01957,174,104

322,366,89941,041,903

547,882,098

31,872,642,892 31,872,642,892

Base for provision

Interest

Calculation of Provision for Loans and Advances as per CL March 2008(excluding provision for contingent assets)

Suspense

The balance of Gratuity provision has been transferred to Current account in the name of EBL-EmployeesGratuity Fund (Recognized).The remaining balance was transferred subsequently.

63,665,467

Standard

939,474,114

22,011,2211,837,964

N/A



Deferred Tax Liability :

Opening Balance 10,362,395 2,687,419Addition during the period - 7,674,976

10,362,395 10,362,395Adjustment made during the period - - Closing balance 10,362,395 10,362,395Net Deferred Tax (Assets) /Liability* 8,635,282 8,635,282

14.0 Share Capital :

14.1 Authorized Capital:33,000,000 ordinary shares of Tk 100 each 3,300,000,000 3,300,000,000

14.2 Issued, Subscribed and fully paid up Capital (Note-14.3)31.03.08 31.12.07

Issued for cash/bonus share 10,350,000 1,035,000,000 1,035,000,000Issued for other than cash/bonus share - - - Total 10,350,000 1,035,000,000 1,035,000,000

14.3 Slab wise List as on 20 April 2008*

* Being the 'Record date' , this list is prepared based on information prevailing as on 20 April 2008.

NO. OF SHARES

(%) OF SHARE

HOLDING

Amount Taka

Directors 1,768,525 17.09 176,852,500General Public 7,460,225 72.08 746,022,500Financial Institutions 1,121,250 10.83 112,125,000

Total 10,350,000 100.00 1,035,000,000

De - materialization :NO. OF SHARE

HOLDER

(%) OF SHAREHOLDING

5,788 3.76501 - 5,000 357 5.935,001 - 10,000 57 4.0010,001 - 20,000 38 5.1320,001 - 30,000 20 4.6830,001 - 40,000 5 1.6940,001 - 50,000 9 5.4650,001 - 1,00,000 10 17.231,00,001 - 10,00,000 16 32.1710,00,001 - Above 2 19.94TOTAL 6,302 100.00

614,150

3,329,8352,063,675

1,782,960

414,170

* This is calculated based on year end taxable/deductible temporary differences of carrying values of assets andliabilities and their respective tax bases. No interim calculation or provision is made.

* None of the CFO, Head of Internal Audit, Company Secretary and top five salaried executives of the Bank hasany shareholdings of EBL as on reporting date.

NO. OF SHARE

10,350,000

In terms of the clause (cha) of the Memorandum of Association and Article # 4 of the Articles of Association ofthe Bank and clause 4 of the scheme of Reconstruction, the Authorized Capital of the Bank was BDT3,300,000,000 divided into 33,000,000 ordinary shares of Tk 100 each. The issued, subscribed and fully paid upcapital of the bank is Tk 1,035,000,000 divided into 10,350,000 ordinary shares of Tk 100 each.

Shareholders' Group*

- 10,350,000

175,240564,975

389,455

10,350,000

A range wise distribution schedule of the above shares is given below as required by the regulation 37 of theListing Regulations of Dhaka Stock Exchange Limited.

001 - 500

RANGE

531,325484,215



14.4 Capital Adequacy Ratio:Tier – I (Core Capital) Paid up Capital 1,035,000,000 1,035,000,000 Statutory reserve 1,035,000,000 1,035,000,000 General Reserve 100,000,000 100,000,000 Dividend Equalization Account 356,040,000 356,040,000 Reserve Against Pre-Take over Loss (Net off Loss) 342,825,075 340,672,537 Reserve for Building Fund 60,000,000 60,000,000 Proposed Dividend 351,900,000 351,900,000

180,412,393 - 3,461,177,468 3,278,612,537

Tier –II (Supplementary Capital) Note General Provision against UC Loans & contingent assets 13.2(b) 574,306,471 515,930,047 Exchange Equalization Account 13 22,628,988 22,628,988 Reserve for Revaluation of Treasury Bills-HTM (50%) 14,090,084 14,090,084 Assets Revaluation Surplus (50%) 202,507,525 202,507,525

813,533,068 755,156,644A.Total Capital 4,274,710,536 4,033,769,180

B. Total Risk Weighted Assets 33,390,473,778 30,687,089,893C. Required Capital based on Risk Weighted Assets (10% on B ) 3,339,047,378 3,068,708,989D. Surplus/(Deficiency)….(A - C) 935,663,158 965,060,191

Capital Adequacy Ratio Required

Retained earnings (Including OBU)

31.03.08 31.12.07

On Core Capital 5.00% 5.00% 10.37% 10.68% On Supplementary Capital N/A N/A 2.44% 2.46% On Total Capital 10.00% 10.00% 12.80% 13.14%

15 Statutory Reserve

Opening balance 1,035,000,000 828,000,000Transferred from profit during the period - 207,000,000Closing balance 1,035,000,000 1,035,000,000

16 Dividend Equalization Reserve

Opening balance 356,040,000 356,040,000Transferred from profit during the period - - Closing balance 356,040,000 356,040,000

17 Reserve against Pre-takeover loss

Opening balance 1,554,759,750 1,554,759,750Recoveries / adjustment during the period - - Closing balance 1,554,759,750 1,554,759,750

17.1 This represents the amount deducted from depositors and other accounts of customers of erstwhile BCCIbranches in Bangladesh under clause 11(3) of the scheme. In accordance with the clause 14 of the scheme, in 1997a review was carried out of the recovery made against the BCCI assets and it was concluded that no repaymentof the deductions need to be made to the depositors of BCCI as per the scheme. Accordingly this provision is nolonger required. Therefore, it is shown as reserve against pretake over loss(Note-17.2).



17.2 Pre-take over lossOpening balance 1,214,087,213 1,224,349,057Recoveries / adjustment during the period (2,152,538) (10,261,844)Closing balance 1,211,934,675 1,214,087,213

18 Assets revaluation reserve Opening balance 405,015,050 234,075,050 Addition during the period - 170,940,000

405,015,050 405,015,050

19 Treasury bill Revaluation Reserve

Balance at the beginning of the period 28,180,168 12,734,774 Addition during the period - 15,445,394 Adjustment made during the period - - Balance at the end of the period 28,180,168 28,180,168

As per instruction/circular of Bangladesh Bank (DOS circular Letter No 10 dated 11 September 2006)

20 Reserve for Building Fund Balance at the beginning of the period 60,000,000 60,000,000 Addition during the period - - Adjustment made during the period - - Balance at the end of the period 60,000,000 60,000,000

21 General Reserve Balance at the beginning of the period 100,000,000 100,000,000 Addition during the period - - Adjustment made during the period - - Balance at the end of the period 100,000,000 100,000,000

22 Profit and loss account

Opening balance - 192,862,647Adjustment relating to previous year - (53,505,613)Profit for the period 180,372,937 418,648,150Proposed dividend for the period (351,005,184)Transfer to statutory reserve - (207,000,000)Dividend Equalization Reserve - - Closing balance 180,372,937 -

23 Letters of Guarantee

Directors 1,144,980 1,144,980 Government 12,205,964 12,205,964 Banks and other financial institutions 233,214,608 232,400,477 Others 1,712,738,258 1,614,735,364

1,959,303,810 1,860,486,785Margins (72,681,782) (66,515,691)

1,886,622,028 1,793,971,094

In line with BRPD circular No. 10 dated 25 November 2002 the Bank has revalued during 2007 of its two landlocated at 100 Gulshan Avenue, Dhaka measuring 26.25 kathas and 33 Agrabad C/A, Chittagong measuring13.44 Kathas by independent valuer named M/s Asian Surveyors Limited which was duly certified by theexternal auditor.


23.1

23.2 A case was filed against the BCCI overseas Ltd., predecessor of Eastern Bank Ltd. (Money suit No.133/91) on 16.04.1991 for an amount of Tk 4,731,552.00 (principal plus interest upto 31.12.90). The case was awardedagainst the bank for paying principal amounting Tk 3,289,620 plus simple interest @ 7.5% starting from 13.02.91till the date of payment. The Bank filed an appeal Case # 415/99 in the High Court against the decree which wasdismissed in absence of proper persuasion by the then lawyer. Meanwhile the appellant of the Money suit filedan execution case No.01/06 dated 01.01.06 in the Joint District Judge Additional Artha rin Adalat for an amountof Tk 6,991,542.00 including interest upto 31.12.05 against which the Bank management has filed a misc. caseno.72/06 dated 17.02.06 for waiver of the execution. A summon return date has been fixed by the HonorableCourt on 24 March 2008. Additionally the Bank made another appeal for restoration of first appeal No. 415/99which is still pending. The Honorable High court stayed all proceeding of money execution case No.6/06 untillthe settlement of the appeal. However the Bank management has decided to make necessary provision in thebooks of account after final settlement of the appeal.

A case was filed by Eastern Bank Limited, successor of BCCI overseas Ltd. against National Bank Ltd.(NBL) forissue of guarantee at Artha Rin Adalat - 3, Dhaka, which has been decreed against NBL on 04 January 2004 forTk 27,366,450 plus interest @ 18% p.a. amounting to Tk 45,565,139 from 01 October 1994 to 31 December 2003being an aggregate amount of Tk 72,931,589. Against the decreed amount, NBL has made an appeal against theorder which is still pending with the Honorable High Court, Dhaka. Before filing the appeal case NBL has paidTK 13,683,225 to the court being 50% of the principal decreed amount.

Taka Taka24 Interest income

Interest on Advances 1,062,990,545 3,700,904,109 Interest on Money at Call and Short Notice 3,420,458 24,721,778

Interest on Placement with other Banks 42,626,512 66,620,273 Interest on Foreign Currency Balances 8,192,320 16,656,876

1,117,229,835 3,808,903,036

25 Interest expensesInterest on Deposits 593,213,960 2,056,648,818Interest on Borrowings 95,989,741 298,211,267Discount 400 1,288Interest on REPO 63,036,687 143,206,744

752,240,788 2,498,068,11726 Income from investments

Dividend on Shares ICB shares - 119,924 Redeemable Preference shares 1,479,452 -

1,479,452 119,924Interest on Bangladesh Bank Bills 1,205,800 73,748,638Reverse REPO - 8,025,044Interest on Debentures 2,043,151 18,253,493Interest on Treasury bills 22,385,738 187,079,579Gain (loss) on Revaluation of Treasury bills (HFT)* (202,372) (25,622,734)Bonds 137,209,591 244,993,598Zero Coupon Bonds 28,565 259,004

164,149,925 506,856,546

*As per instruction/circular of Bangladesh Bank (DOS circular Letter No10 dated 11 September 2006)


2008


December 2007


Taka Taka27 Commission, exchange and brokerage

Commission 87,209,854 274,995,726Exchange gain net off exchange losses 82,423,283 362,095,641Brokerage - -

169,633,137 637,091,367

28 Other operating income

Profit on sale of fixed assets - 2,812,744Rebate earnings - 20,174,750Telex charges recovered 83,652 318,507Postage charges recovered 3,572,918 10,946,861Fund management and statement related services 242,905 540,198Service charges 27,610,776 82,395,575Swift charges 6,533,460 22,166,119Management fees 20,924,996 70,892,353Periodic service charges 456,399 46,999,979Facility service charges 2,461,582 8,939,104Recovery of written off loans 10,644,700 73,090,678Card income 18,271,286 23,974,935Locker and godown rent 805,870 2,489,850Miscellaneous 565,192 142,720

92,173,736 365,884,373

29 Salary & allowances Basic salary 51,712,670 156,252,732

Allowances 53,856,173 161,367,584Festival bonus - 28,354,023Performance bonus - 40,126,681Bank's contribution to provident fund 4,834,260 14,152,133Gratuity 3,703,887 11,303,752

114,106,990 411,556,905

30 Rent, taxes, insurance, electricity etc.Rent, rates and taxes 15,007,485 40,854,037Insurance 2,151,236 17,997,684Electricity 2,705,114 13,068,486

19,863,835 71,920,207

31 Legal ExpensesLaw charges 139,098 1,998,996Other professional charges 3,523,398 15,822,675

3,662,496 17,821,671

32 Postage, stamp, telecommunication etc.

Telephone -office 3,572,321 15,528,247LAN, WAN, Courier and Telex 5,104,308 23,585,711Postage 115,811 201,884Telephone - residence 1,060,183 3,783,262

9,852,623 43,099,104


2008


December 2007


Taka Taka33 Stationery, printing, advertisement, etc.

Printing and stationery 6,710,028 28,352,053Publicity and advertisement 10,994,937 70,842,868

17,704,965 99,194,921

34 Managing Director's Salary & allowancesBasic salary 1,200,000 5,444,516Allowance 900,000 3,692,295Bonus - 800,000Bank's contribution to provident fund 120,000 544,454

2,220,000 10,481,265

35 Directors' FeeFees 138,000 1,090,200Other expenses 22,185 176,601

160,185 1,266,801

Each director is paid for Tk.4,000/- per Board meeting and per committee meeting.

36 Audit Fee (including VAT) - 209,424

37 Repairs, maintenance and depreciationDepreciation: ( Annexure 'A')

Buildings 119,259 489,276Machinery and equipment 8,760,884 27,477,853Vehicles 2,220,935 7,497,755Furniture and fixtures 2,786,675 9,928,167Leased assets under finance lease 4,579,560 18,318,240

18,467,313 63,711,291Repairs and maintenance

Office equipments 2,229,864 13,747,197Vehicles 492,803 1,386,170Furniture and fixtures 41,976 499,944Rented premises- General 409,420 2,579,728Rented premises-Lighting 144,048 751,939

3,318,111 18,964,97821,785,424 82,676,269

38 Other expensesCard expenses 4,646,009 21,502,202Traveling expenses 21,985,115 88,843,409Bank charges 1,078,788 8,260,183Subscriptions 1,025,344 5,447,998

Books, periodicals and publications 202,286 1,048,371Cartage/freight 92,490 446,965Staff training expenses 1,657,977 16,919,134Finance cost of leased ICT equipments 570,395 3,701,928Entertainment 2,590,819 11,538,719Software maintenance cost 165,000 1,365,589Staff welfare expenses 1,364,569 2,629,830Uniform and liveries 60,904 1,725,077Branch operating expenses 102,553 320,832Office securities 1,627,878 12,693,846Direct sales team (DST) expenses 7,603,550 35,521,180

AGM expenses - 1,397,332 Loss on sale of fixed assets - 204,191

44,773,677 213,566,786


2008


December 2007


Taka Taka

39 Cash received from other operating activitiesRebate earnings - 20,174,750Telex charges recovered 83,652 318,507Postage charges recovered 3,572,918 10,946,861Fund management & statement related services 242,905 540,198

Service charges 27,610,776 82,395,575Swift charges 6,533,460 22,166,119Management fees 20,924,996 70,892,353Periodic service charges 456,399 46,999,979Facility service charges 2,461,582 8,939,104Card Income 18,271,286 23,974,935Locker and Godown Rent 805,870 2,489,850Miscellaneous 565,192 142,720

81,529,036 289,980,951

40 Cash Paid for Other Operating activities

Other office operating expenses 44,773,677 213,566,786 Opening payable 140,726,553 71,896,106 Closing payable (117,525,179) (140,726,553)

67,975,051 144,736,340

41 Changes in other assetsOpening Balances Stock of stationery 9,203,391 11,525,699 Stamps on hand 509,203 681,088 Suspense account 9,599,100 11,716,375 Advance paid for development of land and building 28,961,032 28,961,032 Security deposits 4,467,767 1,883,125 Other account Receivable-BCCI 105,920,605 105,920,605 Advance rent and advertisement 81,232,199 34,246,508 Prepaid expenses and other prepayments 98,653,619 79,513,246 Bangladesh Bank Clearing Account 13,817,985 27,304,941 Inter branch & Inter system Accounts - 6,604,870

Inter branch cash transfer account (Net) 7,132 3,007,141352,372,033 311,364,630

Closing Balances

Stock of stationery 9,771,453 9,203,391 Stamps on hand 341,916 509,203 Suspense account 9,558,231 9,599,100 Advance paid for development of land and building 28,961,032 28,961,032 Security Deposits 1,907,625 4,467,767 Other account Receivable-BCCI 105,920,605 105,920,605 Advance rent and advertisement 98,042,160 81,232,199 Prepaid expenses and other prepayments 110,084,663 98,653,619

Bangladesh Bank Clearing Account 13,604,291 13,817,985Inter branch cash transfer account (Net) 7,132 7,132

378,199,108 352,372,033

Net Changes in other assets (25,827,075) (41,007,403)


2008


December 2007


Taka Taka

42 Changes in other Liabilities

Opening Balances

Privileged creditor 80,587,214 70,875,288 Acquirer liabilities 18,898,409 229,636,168 Sundry creditors 75,887,814 59,599,667 Miscellaneous creditors 428,947,711 473,600,542 Exchange Equalization Account 22,628,988 22,628,988 Internal suspense 9,415,137 6,782,244 Interest suspense 189,517,130 189,603,161 Provision for other assets 179,000 179,000 Provision for gratuity - - Expenses payable 72,212,858 61,006,158 Miscellaneous payable 68,513,695 40,889,948 Deferred tax liability 8,635,282 2,199,039 BCCI liability payable 7,321,887 7,321,887 Obligation under Finance Lease 22,531,990 42,727,018 SIA Insurance premium 1,650 1,650 Un-earned Interest income - -

1,005,278,765 1,207,050,758

Closing Balances

Privileged creditor 23,255,858 80,587,214 Acquirer liabilities 196,294,727 18,898,409 Sundry creditors 80,281,542 75,887,814 Miscellaneous creditors 427,662,910 428,947,711 Exchange Equalization Account 22,628,988 22,628,988 Internal suspense 11,874,808 9,415,137 Interest suspense 218,605,140 189,517,130 Provision for other assets 179,000 179,000 Provision for gratuity 1,327,272 - Expenses payable 65,920,167 72,212,858 Miscellaneous payable 51,605,012 68,513,695 Deferred tax liability 8,635,282 8,635,282 BCCI Liability payable 7,321,887 7,321,887 Obligation under Finance Lease 17,128,146 22,531,990 SIA Insurance premium 1,650 1,650

1,132,722,389 1,005,278,764 Net changes in other liability 127,443,624 (201,771,994)


2008


December 2007


43 Events after the balance sheet date


No material events had occurred after the balance sheet date to the date of issue of these Financial Statements,which could substantially affect the values stated in the Financial Statements or require adjustments in theFinancial Statements.

Sd/ Sd/ Sd/ Sd/


Hoda VasiChowdhury & Co

On Net bookBalance on Additions Disposals Balance at Balance on Charge disposals Balance at value at 01 January during the during the 31 March 1 January for the during the 31 March 31 March

2008 period period 2008 2008 period period 2008 2008Taka a Taka Taka Taka Taka Taka Taka Taka Taka

Freehold Land and Land Development 535,306,650 - - 535,306,650 - - - - 535,306,650

Building on freehold land 21,592,280 600,000 - 22,192,280 2,510,611 119,259 - 2,629,870 19,562,410

Machinery and Equipment 263,740,674 18,745,727 - 282,486,401 97,362,153 8,760,884 - 106,123,037 176,363,364

Vehicles 50,325,442 - - 50,325,442 24,737,298 2,220,935 - 26,958,233 23,367,209

Furniture and fixtures 139,951,888 6,681,966 - 146,633,854 33,357,328 2,786,675 - 36,144,003 110,489,851

.91,591,169 - - 91,591,169 73,272,970 4,579,560 - 77,852,530 13,738,639

At 31 March 2008 1,102,508,103 26,027,693 - 1,128,535,796 231,240,360 18,467,313 - 249,707,673 878,828,123 At 31 December 2007 754,720,002 184,392,923 (7,544,822) 1,102,508,103 174,747,142 63,711,291 (7,218,073) 231,240,360 871,267,743

Re

Annexure - A

Leased Assets under Finance Lease


Schedule of Fixed Assetsas at 31 March 2008

Cost Depreciation

Particulars

Main Operation


Main OperationBalance with other Banks and Financial Institutions

As at 31 March 2008

"Annexure-B"Eastern Bank Limited

Outside Bangladesh - Note-5.2

Currency Name

Amount in Foreign

Currency

Conversion rate per unit F.C.

Amount in BDT.

Amount in Foreign

Currency

Conversion rate per unit

F.C.

Amount in BDT.

The Bank Toykyo Mitshubishi, Tokyo JPY (2,517,062) 0.69 (1,739,542) 130,602 0.61 79,576The Bank of Tokyo Mitshubishi, Kolkata USD 50,000 68.58 3,429,000 50,000 68.57 3,428,640

GBP (5,726) 136.73 (782,917) 66,085 136.73 9,036,026

Standard Chartered Bank, Kolkata USD 33,834 68.58 2,320,349 81,619 68.57 5,596,850

Standard Chartered Bank , Colombo USD 37,534 68.58 2,574,075 67,644 68.57 4,638,532

Standard Chartered Bank, London EURO 378,929 108.35 41,056,789 216,733 100.93 21,873,893

Standard Chartered Bank, Singapore SGD 5,682 49.72 282,512 5,144 47.40 243,848

Standard Chartered Bank, New york USD (95,798) 68.58 (6,569,849) 1,634,473 68.57 112,080,411

Citibank N A, Newyork USD (439,686) 68.58 (30,153,653) (779,873) 68.57 (53,478,100)

Citibank N A, Mumbai USD 1,575 68.58 108,042 1,575 68.57 108,030

Nepal Bangladesh Bank Ltd. USD 12,601 68.58 864,172 6,376 68.57 437,216

AB Bank Limited, Mumbai USD 12,144 68.58 832,851 3,533 68.57 242,275

Bank of Bhutan USD 6,538 68.58 448,387 6,645 68.57 455,6770

Mashreqbank, Newyork USD (466,435) 68.58 (31,988,127) 470,367 68.57 32,254,360

JP Morgan Chase Bank NY USD (5,476,214) 68.58 (375,558,788) (99,672) 68.57 (6,834,759)

The Bank of Nova Scotia, Toronto CAD (1,963) 67.12 (131,766) (504) 69.97 (35,267)

JP Morgan Chase Bank NA, Sydney AUD 3,327 62.95 209,420 (4,330) 60.00 (259,804)

American Express Bank, NY USD (23,817) 68.58 (1,633,364) 661,905 68.57 45,388,659

Zurcher Kantonal Bank (ZKB,Zurich) CHF 1,102 68.89 75,919 1,208 60.84 73,494

National Commercial Bank KSA SAR 25,000 18.28 457,090 25,000 18.30 457,493( ) 0Wachovia Bank NA New York USD (703,591) 68.58 (48,252,297) 167,489 68.57 11,485,207

0ICICI Bank ACU USD 70,041 68.58 4,803,387 85,578 68.57 5,868,320

NDLC-IFIC Bank (NIB) Pakistan USD 51,026 68.58 3,499,338 9,156 68.57 627,818

HSBC - New york USA USD 34,270 68.58 2,350,232 (836) 68.57 (57,351)

Commerz Bank AG, Frankfurt, Germany EURO 38,914 108.35 4,216,290 35,708 100.93 3,603,877

Placement to OBU USD 1,399,460 68.58 95,974,967 967,540 68.57 66,346,927

Total (333,307,483) 263,661,848

Grand total (333,307,483) 263,661,848

As at 31 March 2008

The Bank of Tokyo Mitshubishi, London

In demand deposit account (non interestbearing) with :

As at 31 December 2007


Annexure-CRelated Party Transactions :

The significant Related party transactions during the year were as follows:

TransactionsOutstanding

as on

Name of the organisationNature of

Transaction1-Jan-08 Debit(Tk) Credit(Tk) 31-Mar-08

Z.N. Shipping Lines LG 113,920 - - 113,920

Z.N. Enterprise LG 192,900 - - 192,900306,820 - - 306,820

Do

The Bank in normal course of business has had transactions with other entities that fall within the definition of Related party ascontained in Bangladesh Accounting Standards(BAS)-24 (Related party Disclosures) and as defined in the BRPD circular #14, issued byBangladesh Bank on 25 June 2003.

Mr Md Showkat AliChowdhury, Director EasternBank Limited

Outstanding as on

Representing Directors


Annexure - D

1 Paid up Capital Taka 1,035,000,000 1,035,000,000 2 Total Capital (Tier-I & II) Taka 4,274,710,536 4,033,769,180 3 Surplus/ (Shortage) Capital Taka 935,663,158 965,060,191 4 Total Assets Taka 46,724,579,882 42,579,485,8565 Total Deposits Taka 31,670,621,647 30,091,769,096 6 Total Loans and Advances Taka 34,035,587,040 30,961,802,829 7 Total Contingent Liabilities Taka 18,071,720,288 13,338,657,991 8 Loans and Deposits Ratio % 107.47 102.89 9

% 4.32 4.3110 Profit after tax and provisions Taka 180,412,298 419,142,20311 Classified loans as on reporting date Taka 1,466,170,719 1,333,706,052 12 Provision held against classified loans Taka 718,408,995 659,691,825 13 Surplus of provision Taka - - 14 Cost of Fund (Annualized) % 8.07 7.64 15 Interest bearing assets Taka 42,424,176,437 38,874,508,739 16 Non-interest bearing assets Taka 4,300,403,442 3,704,977,117 17 Return on assets (Annualized) % 1.62 1.07 18 Income from investments Taka 164,149,925 506,856,54619 Return on Investment (ROI)-Annualized % 17.04 11.4220 Earning per share (Jan-Mar '08) Taka 17.43 40.50 21 Revenue per share ( Jan-Mar '08) Taka 76.47 272.68 22 Price earning ratio Times 14.36 26.44

% of Classified loans against total loans andadvances

Eastern Bank LimitedHighlights on the overall activities

for the period from 1 January 2008 to 31 March 2008

Sl No Particulars 2008 2007


We also report that:

i)

ii)

iii)

iv)

v)

vi)

vii)

viii)

Sd/-

Dhaka, 3 June 2008 Chartered Accountants

the Financial Statements conform to the prescribed standards set in the accountingregulations issued by the Bangladesh Bank after consultation with the professionalaccounting bodies of Bangladesh; and

the information and explanations required by us have been received and foundsatisfactory.

we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit and made dueverification thereof;

read in conjunction with the notes to the Financial Statements, the financial position ofthe unit at 31 March 2008 and the profit for the period from 1 January 2008 to 31 March2008 have been properly reflected in the Financial Statements; and the FinancialStatements have been prepared in accordance with the generally accepted accountingprinciples;

the Financial Statements have been drawn up in conformity with the Bank CompaniesAct 1991 and in accordance with the accounting rules and regulations issued by theBangladesh Bank;

the expenditure incurred was for the purposes of the Unit's business;


Auditors’ report to the Shareholdersof

Eastern Bank LimitedOffshore Banking Unit, Bangladesh

We have audited the accompanying balance sheet of the Offshore Banking Unit, Bangladeshof Eastern Bank Limited as of 31 March 2008 and the related profit and loss account and cashflow statement for the period from 1 January 2008 to 31 March 2008 together with the notes 1to 17 annexed thereto. The preparation of these Financial Statements is the responsibility ofthe Bank’s management. Our responsibility is to express an independent opinion on theseFinancial Statements based on our audit.

We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Thosestandards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the Financial Statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the FinancialStatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the Financial Statements prepared in accordance with Bangladesh AccountingStandards (BAS) give a true and fair view of the state of the affairs of Offshore Banking Unitas on 31 March 2008 and of the results of its operations and its cash flows for the period from1 January 2008 to 31 March 2008 and comply with the Bank Companies Act 1991, the rulesand regulations issued by the Bangladesh Bank, the Companies Act 1994 and other applicablelaws and regulations.

the unit’s balance sheet and profit and loss account together with the annexed notes1 to 17 dealt with by the report are in agreement with the books of account and returns;

in our opinion, proper books of account as required by law have been kept by the unitso far as it appeared from our examination of those books;


Note US$ Taka US$ TakaPROPERTY AND ASSETS

CASH

In hand (including foreign currencies) - - - - With Bangladesh Bank (including foreign currencies) - - - -

- - - -

BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS(ON CURRENT AND OTHER ACCOUNTS) : 3

In Bangladesh - - Outside Bangladesh 105,586.05 7,241,091 92,803.81 6,363,817

105,586.05 7,241,091 92,803.81 6,363,817

MONEY AT CALL AND SHORT NOTICE - - - -

INVESTMENT - - - -

LOANS AND ADVANCES: 4

i) Loans, cash credits, overdrafts, etc. :

In Bangladesh 1,356,218.02 93,009,432 963,888.53 66,096,535Outside Bangladesh - - - -

1,356,218.02 93,009,432 963,888.53 66,096,535

ii) Bills purchased and discounted (excludingtreasury bills of the Government) :

Payable in Bangladesh - - - - Payable outside Bangladesh - - - -

- - - - 1,356,218.02 93,009,432 963,888.53 66,096,535

FIXED ASSETS - - - -

OTHER ASSETS 5 - - - -

NON-BANKING ASSETS - - - -

TOTAL ASSETS 1,461,804.07 100,250,523 1,056,692.34 72,460,352

At 31 March 2008


Balance Sheet As at 31 March 2008

At 31 Dec 2007


Note US$ Taka US$ TakaCAPITAL AND LIABILITIES

BORROWINGS FROM OTHER BANKS,FINANCIAL INSTITUTIONS AND AGENTS 6

Bangladesh Bank - - Other: In Bangladesh 1,399,460.00 95,974,967 967,540.00 66,346,927 Outside Bangladesh - - - -

1,399,460.00 95,974,967 967,540.00 66,346,9271,399,460.00 95,974,967 967,540.00 66,346,927

DEPOSITS AND OTHER ACCOUNTS : 7Current deposits and other accounts 30.62 2,100 72.70 4,985Term deposits - - - -

30.62 2,100 72.70 4,985

OTHER LIABILITIES 8 48,690.36 3,339,184 76,030.49 5,213,624

TOTAL LIABILITIES 1,448,180.98 99,316,251 1,043,643.19 71,565,536

CAPITAL/SHAREHOLDERS' EQUITYProposed dividend for 2007 13,049.15 894,816 13,049.15 894,816

573.94 39,456 - - TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,461,804.07 100,250,523 1,056,692.34 72,460,352

Off balance sheet items: 0.00 (0) 0.00 0.29

Contingent liabilities:Acceptance and endorsements - - 59,600.00 4,086,939Letter of guarantee - Banks - - - - Letter of guarantee - Others - - - - Bills for collection - - - - Irrevocable letters of credit - - - - Other Commitments - - - -

- - 59,600.00 4,086,939

At 31 March 2008 At 31 Dec 2007

Retained Earnings brought forward fromprofit & loss account

These financial statements should be read in conjunction with the annexed notes

Sd/- Sd/- Sd/- Sd/-Managing Director Director Director Chairman

Sd/-Dhaka, 3 June 2008 Hoda Vasi Chowdhury & Co

Chartered Accountants

AUDITORS' REPORT TO THE SHARE HOLDERSSee annexed report of date


Note US$ Taka US$ Taka

Interest income 9 33,773.73 2,316,202 85,401.60 5,856,227

Less. Interest paid on deposits and borrowings 10 26,834.96 1,840,342 64,479.00 4,421,506

Net interest income 6,938.77 475,860 20,922.60 1,434,721

Commission, exchange and brokerage 11 883.20 60,570 1,351.32 92,664

Other Operating Income 12 115.00 7,887 459.00 31,475

Total operating income 7,936.97 544,317 22,732.92 1,558,860

Less: Operating expenses 13 302.00 20,711 486.00 33,326

Profit before provision 7,634.97 523,606 22,246.92 1,525,534

Less :Provision for unclassified Loans and Advances 3,625.29 248,622 5,030.99 344,990 (Including provision for off Balance Sheet items)Profit before income tax 4,009.68 274,984 17,215.93 1,180,544

Less. Provision for income tax 3,435.74 235,623 10,011.11 686,491 Net Profit after taxation 573.94 39,361 7,204.82 494,053

Balance of Profit brought forward from previous year - - 5,844.33 403,640

573.94 39,361 13,049.15 897,692

Effect of changes in exchange rate - 95 - (2,877) 573.94 39,456 13,049.15 894,816

Retained earnings transferred to Main operation - - (13,049.15) (894,816) (For appropriation)Retained Earnings carried forward 573.94 39,456 - -

From 1 January 2008 to 31 March 2008

From 1 January 2007 to 31 December 2007


Profit and Loss AccountFor the period from 1 January 2008 to 31 March 2008

These financial statements should be read in conjunction with the annexed notes


Sd/-Dhaka, 3 June 2008 Hoda Vasi Chowdhury & Co


AUDITORS' REPORT TO THE SHARE HOLDERSSee annexed report of date


A) Cash flow from operating activities Note US$ Taka US$ Taka

Interest Income 33,773.73 2,316,202 85,401.60 5,856,227Interest paid (26,834.96) (1,840,342) (64,479.00) (4,421,506)Received from other operating activities 15 998.20 68,457 1,810.32 124,139Paid for operating expenses 16 (302.00) (20,711) (486.00) (33,326)Operating profit before changes in operating assets and liabilitie 7,634.97 523,606 22,246.92 1,525,534

(Increase)/decrease in operating assets: Loan and advances to customers (392,329.49) (26,905,956) (473,298.53) (32,455,406)

Other Assets - - - - Increase/(decrease) in operating liabilities: Effect of Changes in exchange rate - 668 - (13,733) Deposits from Banks - - - - Customers' deposits and other accounts (42.08) (2,886) (444.19) (30,459) Borrowing from other banks and financial institutions 431,920.00 29,621,074 467,040.00 32,026,241 Other liabilities (34,401.16) (2,359,232) 49,365.11 3,385,104

5,147.27 353,668 42,662.39 2,911,747Net cash provided from operating activities 12,782.24 877,274 64,909.31 4,437,281

B) Cash flow from investing activities - - - -

C) Cash flow from financing activities

Profit remitted to Head Office - - - -

D) Net increase in cash and cash equivalent (A+B+C) 12,782.24 877,274 64,909.31 4,437,281

E) Opening cash and cash equivalent 92,803.81 6,363,817 27,894.50 1,926,536

F) Closing cash and cash equivalent (D+E) 105,586.05 7,241,091 92,803.81 6,363,817

G Closing cash and cash equavalents 14Cash In hand (including foreign currencies) - - - - Balances with Bangladesh Bank and its agent bank (s) - - - - Balances with other Banks and Financial Institutions 105,586.05 7,241,091 92,803.81 6,363,817Money at call and short notice - - - - Prize bonds - - - -

105,586.05 7,241,091 92,803.81 6,363,8170.34

0 0 Sd/- Sd/- Sd/- Sd/-


From 1 January 2007 to 31 December 2007

From 1 January 2008 to 31 March 2008


Cash Flow StatementFor the period from 1 January 2008 to 31 March 2008


Taka Taka Taka Taka Taka Taka

ASSETS

Cash in hand - - - - - -

Balance with other banks andfinancial institutions 7,241,091 - - - - 7,241,091

Money at call and short notice - - - - - -

- - - - - -

Loans & advances to customers 16,521,400 50,406,300 26,081,732 - - 93,009,432

Fixed assets - - - - - -

Other assets - - - - - -

Non-banking assets - - - - - -

Total Assets 23,762,491 50,406,300 26,081,732 - - 100,250,523

LIABILITIES

Borrowings from other banks & - - 95,974,967 - - 95,974,967 financial institutions

Deposits & other accounts 2,100 - - - - 2,100

Other liabilities - 1,240,742 2,098,442 - - 3,339,184

Total Liabilities 2,100 1,240,742 98,073,409 - - 99,316,251

Net Liquidity Difference 23,760,391 49,165,558 (71,991,677) - - 934,272

(0)

Maturity over 5 years

Total Amount Particulars

As at 31 March 2008

Maturity within 1 month


Statement of Liquidity in BDT(Maturity analysis of assets and liabilities)

Maturity within 1 to 3

months


months


years

Investment in Treasury Bills &others


US $ US $ US $ US $ US $ US $

ASSETS

Cash in hand - - - - - -

Balance with other banks andfinancial institutions 105,586.05 - - - - 105,586.05

Money at call and short notice - - - - - -

- - - - - -

Loans & advances to customers 240,906.97 735,000.00 380,311.05 - - 1,356,218.02

Fixed assets - - - - - -

Other assets - - - - - -

Non-banking assets - - - - - -

Total Assets 346,493.02 735,000.00 380,311.05 - - 1,461,804.07

LIABILITIES

Borrowings from other banks & - - 1,399,460.00 - - 1,399,460.00 financial institutions

Deposits & other accounts 30.62 - - - - 30.62

Other liabilities - 18,091.91 30,598.45 - - 48,690.36

Total Liabilities 30.62 18,091.91 1,430,058.45 - - 1,448,180.98

Net Liquidity Difference 346,462.40 716,908.09 (1,049,747.40) - - 13,623.09


months


months


years

Investment in Treasury Bills &others


Statement of Liquidity in US Dollar(Maturity analysis of assets and liabilities)

Maturity over 5 years

Total Amount Particulars

As at 31 March 2008

Maturity within 1 month


1 Nature of business

2 Significant Accounting policy2.1 Basis of accounting:

2.2 Loans and advances

a)

Offshore banking Unit is a separate business unit of Eastern Bank Limited, governed under the Rules & Guidelines ofBangladesh Bank. The Bank obtained the Offshore Banking Unit permission vide letter no. BRPD(p)744/(89)/2004-303dated January 25, 2004. The Bank commenced the operation of its Offshore Banking unit from May 19, 2004 and its officeis located at 10, Dilkusha C/A (2nd floor) Dhaka.

The Unit maintains its accounting records in USD from which accounts are prepared according to the Bank CompaniesAct 1991, Bangladesh Accounting Standards and other applicable directives issued by Bangladesh Bank.

These are stated gross, with accumulated specific and general provisions for bad and doubtful debts being shownunder other liabilities.

Eastern Bank LimitedOffshore Banking Unit

Notes to the Financial StatementsFor the period from 1 January 2008 to 31 March 2008

b) Interest is calculated on a daily product basis but charged and accounted for quarterly on accrual basis. c)

2.3 Allocation of common expenses

2.4

3 Balance with other Banks and Financial Institutions USD Taka USD Taka

Inside Bangladesh - - -

Standard Chartered Bank, Newyork 105,586.05 7,241,091 92,803.81 6,363,817 (For detail see Annexure - A) 105,586.05 7,241,091 92,803.81 6,363,817

3.1 Balance with other banks and financial institutions (according to remaining maturity grouping)

Payable : On demand 105,586.05 7,241,091 92,803.81 6,363,817 In not more than one month - - - - In more than one months but not more than three month - - - - In more than three months but not more than one year - - - - In more than one year but not more than five years - - - - In more than five years - - - -

105,586.05 7,241,091 92,803.81 6,363,817 4 Loans and advances4.1 Loans, Cash Credit, Overdraft etc.4.1.1 Inside Bangladesh

Loans 1,356,218.02 93,009,432 963,888.53 66,096,535 Cash Credit - - - - Overdraft - - - -

1,356,218.02 93,009,432 963,888.53 66,096,535 4.1.2 Outside Bangladesh - - - -

1,356,218.02 93,009,432 963,888.53 66,096,535 4.2 Bills purchased and discounted:4.2.1 Inside Bangladesh

Import bills - - - - Export bills - - - -

4.2.2 Outside Bangladesh - - - - 1,356,218.02 93,009,432 963,888.53 66,096,535

Provision for Loans and Advances is made on the basis of period end review by the management and of instructionscontained in Bangladesh BRPD circular 19 & 20 dated December 2005.

At 31 March 2008 At 31 Dec 2007

Establishment expenses in the nature of rent, rates and taxes, salaries, management expenses, printing and stationery,electricity, postages,stamps, telecommunication and audit fee have not been separately accounted for in the FinancialStatements.

Provision for income tax has been made @ 45% on accounting profit without considering possible add-backs andallowable items.

Tax povision


USD Taka USD Taka4.3 Maturity grouping of loans and advances

including bills discounted and purchasedPayable on demand - - 92.00 6,309 Less than three months 975,906.97 66,927,700 651,000.00 44,640,893 More than three months but less than 1 year 380,311.05 26,081,732 312,796.53 21,449,333 More than 1 year but less than 5 years - - - -

1,356,218.02 93,009,432 963,888.53 66,096,535 4.4 Maturity analysis of bills purchased and discounted

Within 1 month - - - - More than 1 month but less than 3 months - - - - More than 3 months but less than 6 months - - - -

- - - - 4.5 Loans and Advances on the basis of Significant Concentration

4.5.1 Loans and Advances to Directors, Executive and OthersAdvance to Directors and their allied concerns(including Ex-Directors) - - - - Advances to CEO & Managing Director - - - - Advances to Other executives and staffs - - - - Advances to Customers (Group wise) - - - - Industrial Advances 1,356,218.02 93,009,432 963,888.53 66,096,535

1,356,218.02 93,009,432 963,888.53 66,096,535

4.6 Industry-wise Concentration of loans and advances Commercial and Trading - - - - Importer of Commodity - - - - Construction - - - - Edible Oil Refinery Industry - - - - Electronics Goods - - - - Individuals - - - - Pharmaceuticals Industries - - - - Readymade Garments Industry 1,356,218.02 93,009,432 963,888.53 66,096,535 Ship Breaking Industries - - - - Industries for Steel products - - - - Telecommunication Sector - - - - Textile Mills - - - - Others - - - -

1,356,218.02 93,009,432 963,888.53 66,096,535

4.7 Geographical location-wise concentration of Loans and advancesInside Bangladesh

Dhaka Division - - - - Chittagong Division 1,356,218.02 93,009,432 963,888.53 66,096,535 Khulna Division - - - - Rajshahi Division - - - - Barishal Division - - - - Sylhet Division - - - -

Outside Bangladesh - other Division - - - - 1,356,218.02 93,009,432 963,888.53 66,096,535

4.8 Classified, unclassified, doubtful and bad loans & advances Unclassified: Standard 1,356,218.02 93,009,432 963,888.53 66,096,535 Special Mention Account - - - - Classified - - Sub-standard - - - - Doubtful - - - - Bad/Loss - - - -

1,356,218.02 93,009,432 963,888.53 66,096,535

At 31 March 2008 At 31 Dec 2007


USD Taka USD Taka4.9 Particulars of loans and advances

i) Debt considered good in respect of which the bank is fully secured 1,356,218.02 93,009,432 963,888.53 66,096,535 ii) - -

- - - iii)

- - - - iv) Debts considered doubtful or bad, not provided for - - - -

1,356,218.02 93,009,432 963,888.53 66,096,535

v)- - - -

vi)

- - - -

vii)

- - - -

viii)

- - - - ix) Due from other banking companies - - - -

x) - - - -

5 Other assets Interest receivable - -

- - - - - -

6 Borrowings from other banks, financial institutions and agents In Bangladesh 1,399,460.00 95,974,967 967,540.00 66,346,927 Outside Bangladesh - - - -

1,399,460.00 95,974,967 967,540.00 66,346,927 6.1 Classification based on type of security

Secured - - - - Unsecured 1,399,460.00 95,974,967 967,540.00 66,346,927

1,399,460.00 95,974,967 967,540.00 66,346,927 6.2

Payable on demand - - - - Payable within one month - - - - More than one month but less than three months - - - - More than three months but less than 1 year 1,399,460.00 95,974,967 967,540.00 66,346,927 More than 1 year but less than 5 years - - - -

1,399,460.00 95,974,967 967,540.00 66,346,927

7 Deposits and other accountsCurrent and other accounts:Current account 30.62 2,100 72.70 4,985 Other Account - - - -

30.62 2,100 72.70 4,985

At 31 March 2008

Debts taken by directors or executives or any of them takenjointly or separately with other persons

Debts due by directors or officers of the bank or any of themeither severally or jointly with any other person and debts dueby companies or firms in which the directors, partners ormanaging agent or in the case of private companies as

Maximum total amount of advances, including temporaryadvances made at any time during the period to directors ormanagers or officers of the bank or any of them eitherseverally or jointly with any other persons

Maximum total amount of advances, including temporaryadvance granted during the period to the companies or firmsin which the directors of the bank are interested as directors,partners or managing agents or, in case of private companies

Maturity grouping of borrowings from other banks, financialinstitutions and agents

Classified loans and advances on which no interest is creditedto income

At 31 Dec 2007

Debts considered good and secured by the personal security of one or more parties in addition to the personal security of the

Debt considered good for which the bank holds no othersecurity than the debtor's personal security


USD Taka USD Taka7.1 Maturity grouping of deposits and other accounts

Payable on demand 30.62 2,100 72.70 4,985 Payable within one month - - - - More than one month but less than three months - - - - More than three months but less than one year - - - - More than one year but less than five years - - - -

30.62 2,100 72.70 4,985

8 Other liabilities

Interest payable on Borrowings 18,091.91 1,240,743 52,493.07 3,599,597 Provision for taxation 17,036.27 1,168,347 13,600.53 932,627 Provision for unclassified Loans and advances 13,562.18 930,094 9,936.89 681,400 ( Including provision for off Balance Sheet items) 48,690.36 3,339,184 76,030.49 5,213,624

USD Taka USD Taka9 Interest income

Interest on Advances 23,908.37 1,639,636 85,401.60 5,856,227 Interest on Money at Call and Short Notice - - - -

Interest on Placement with other Banks 9,302.09 637,937 - - Interest on Foreign Currency Balances 563.27 38,629 - -

33,773.73 2,316,202 85,401.60 5,856,227

10 Interest paid on deposits and borrowings

Interest on Deposits - - - - Interest on Borrowings 26,834.96 1,840,342 64,479.00 4,421,506 Discount - - - - Interest on REPO - - - -

26,834.96 1,840,342 64,479.00 4,421,506

11 Commission, exchange and brokerage

Commission 883.20 60,570 1,351.32 92,664 Exchange gain net off exchange losses - - - - Brokerage - - - -

883.20 60,570 1,351.32 92,664 12 Other Operating Income

Management fees 115.00 7,887 459.00 31,475

13 Operating Expenses

Bank Charges 302.00 20,711 486.00 33,326

14 Cash and cash equivalent

Balance with other banks 105,586.05 7,241,091 92,803.81 6,363,817

15 Cash Received from other operating activities Commission, exchange and brokerage 883.20 60,570 1,351.32 92,664 Miscellaneous 115.00 7,887 459.00 31,475

998.20 68,457 1,810.32 124,139

16 Cash paid for other operating activitiesOther office Operating expenses 302.00 20,711 486.00 33,326

17 General17.1

17.2

17.3 Previous year's figures have been rearranged, where considered necessary, to conform to current year's presentation.


For the period from 1 January 2007 to 31

December 2007

Assets and liabilities have been converted into Taka currency @ US$ 1 = Tk 68.58 (2007: Tk 68.5728) which represents theyear-end mid rate of exchange as at 31 March 2008.

At 31 March 2008

Fixed assets of this unit are appearing in the books of the main operation of the bank and depreciation is also charged toProfit & Loss Account of the main operation of the bank.

At 31 Dec 2007


Annexure - A

Currency Foreign Local Foreign Local Name of the Banks Name Currency Rate Currency Currency Rate Currency

Standard Chartered Bank, New york USD 105,586.05 68.58 7,241,091 92,803.81 68.5728 6,363,817 Total 105,586.05 7,241,091 92,803.81 6,363,817

At 31 December 2007At 31 March 2008


Balance with Other Banks and Financial Institutions - Outside Bangladesh (note 3)As at 31 March 2008


FORM-C [See rule 8 (h), 8 (i) & (t)]

Securities and Exchange Commission (Right issue) Rule, 2006 Auditors’ Report to the Shareholders

Eastern Bank Limited We have audited the accompanying Financial Statements for the period from 1 January 2008 to 31 March 2008 of Eastern Bank Limited in accordance with the International Standards on Auditing as adopted by the Institute of Chartered Accountants of Bangladesh; and we state that we have obtained all the information and explanations which we have required, and after due verification thereof, we report that, in our opinion:

(a) These Financial Statements have been drawn up in accordance with the requirements of the Schedule to the Securities and Exchange Rules, 1987, as amended; the Companies Act, 1994 and other relevant laws where applicable; and the International Accounting Standards as adopted by the Institute of Chartered Accountants of Bangladesh; (b) These Financial Statements which are in agreement with the Books of Account of the Bank give a true and fair view of the state of its affairs as at 31 March 2008 and of the result of its operations and cash flows for the period then ended; (c) Proper Books of Account have been kept by the Bank as required by the

relevant laws; and (d) The expenditure incurred was for the purposes of the Bank’s business.

We also certify that the above company has declared the following dividend for each of the following five years immediately preceding the issue of rights share offer document under the Securities and Exchange Commission (Rights Issue) Rules, 2006, and that the Bank has duly paid off the following amounts of the declared dividend mentioned against respective year-

Declared Dividend Financial Year ended

31st December

Date of Dividend

Declaration Rate (%) Total Amount

Taka Total Cash Dividend

Paid Taka

2007 25.05.2008 Cash- Nil Stock-34%

- 351,900,000.00

- -

2006 12.06.2007 Cash-20% Stock-25%

165,600,000.00207,000,000.00

165,600,000.00-

2005 21.05.2006 Cash-40% Stock-Nil

331,200,000.00

331,200,000.00 -

2004 19.07.2005 Cash-43% Stock-Nil

356,040,000.00-

356,040,000.00-

2003 30.06.2004 Cash-20% Stock-Nil

165,600,000.00-

165,600,000.00-

Sd/- Place: Dhaka, 03 June, 2008 Hoda Vasi Chowdhury & Co Chartered Accountant


1. The Bank was incorporated on 8 August 1992.2. The Statement of Assets & Liabilities of the Bank is as under:

At 31 March At 31 December At 31 December At 31 December At 31 December At 31 December2008 2007 2006 2005 2004 2003Taka Taka Taka Taka Taka TakaTaka

CashCash in hand (including foreign currencies) 399,984,879 382,927,615 398,779,353 194,443,570 174,602,762 105,061,815

2,486,535,408 1,964,375,663 1,768,576,162 1,139,084,567 933,456,347 964,873,108 2,886,520,287 2,347,303,278 2,167,355,515 1,333,528,137 1,108,059,109 1,069,934,923

Balances with other Banks and Financial InstitutionsIn Bangladesh 1,626,369,680 1,276,690,139 717,883,190 695,202,336 576,747,351 1,398,808,073 Outside Bangladesh (326,066,392) 270,025,665 211,345,075 50,056,114 182,129,196 147,621,767

1,300,303,288 1,546,715,804 929,228,265 745,258,450 758,876,547 1,546,429,840 Money at call and short notice - 470,000,000 - 1,620,000,000 1,067,500,000 255,000,000 InvestmentsGovernment 6,899,716,565 5,751,836,137 5,620,577,176 4,403,009,900 4,041,035,400 3,331,354,100 Others 188,569,543 144,153,970 269,030,929 605,856,600 357,856,600 279,856,600

7,088,286,108 5,895,990,107 5,889,608,105 5,008,866,500 4,398,892,000 3,611,210,700 Loans and advances

Loans, cash credits, overdrafts, etc. 32,989,735,365 30,260,267,971 25,080,501,944 17,174,528,536 14,922,947,120 10,953,543,437 Bills purchased & discounted 1,045,851,675 701,534,858 927,361,984 583,070,030 50,308,281 334,587,230

34,035,587,040 30,961,802,829 26,007,863,928 17,757,598,566 14,973,255,401 11,288,130,667

878,828,123 871,267,743 579,972,860 488,785,393 270,953,019 176,468,588 Other assets 535,055,036 486,406,095 396,613,621 445,917,423 470,131,832 768,507,680 Non-banking assets - - - - - - TOTAL ASSETS 46,724,579,882 42,579,485,856 35,970,642,294 27,399,954,469 23,047,667,908 18,715,682,398

PROPERTY AND ASSETS

Auditors' Report in pursuance of Section 135(I) under para 24(I) of Part-II of the Third Schedule of the Companies Act 1994 [As per Securities & Exchange Commission (Rights issue) Rules, 2006, Rule-8(h) ]

We have examined the Financial Statements of Eastern Bank Limited for the years ended 31 March 2008, 31 December 2007& 31 December 2006 audited by us and those for theperiod eneded 31 December 2005, 2004 & 2003 audited by Rahman Rahman Huq, Chartered Accountants in pursuance of section 135 (i) under para 24 (i) of Part -ii of the ThirdSchedule of the Companies Act 1994, we report that:

Eastern Bank LimitedBalance Sheet

Balances with Bangladesh Bank and its agent bank (s) (including foreign currencies)

Fixed assets including land, building, furniture and fixtures


LIABILITIES & CAPITAL Liabilities

8,189,600,706 6,063,465,758 4,439,967,083 4,160,000,000 3,015,000,000 2,850,000,000 Deposits and other accounts

Current Deposits and other accounts, etc 3,872,447,533 3,480,786,638 3,257,066,432 2,259,730,106 3,198,966,923 2,242,949,052 Bills payable 512,546,709 491,030,835 274,574,972 297,532,849 210,908,606 238,596,438 Savings Bank Deposits 5,917,594,088 5,896,619,266 5,153,631,787 3,780,212,213 2,686,380,434 1,927,170,395 Fixed Deposits 21,345,783,317 20,201,082,357 16,992,255,517 11,620,980,780 9,530,063,915 7,521,479,399 Bearer Certificates of Deposits 22,250,000 22,250,000 22,250,000 22,250,000 22,250,000 22,250,000

31,670,621,647 30,091,769,096 25,699,778,708 17,980,705,948 15,648,569,878 11,952,445,284 Other liabilities 2,969,984,843 2,712,443,247 2,515,769,699 2,187,911,610 1,753,264,495 1,592,338,946 TOTAL LIABILITIES 42,830,207,196 38,867,678,101 32,655,515,490 24,328,617,558 20,416,834,373 16,394,784,230 Shareholders' EquityShare CapitalPaid up capital 1,035,000,000 1,035,000,000 828,000,000 828,000,000 828,000,000 828,000,000 Statutory reserve 1,035,000,000 1,035,000,000 828,000,000 828,000,000 828,000,000 760,422,003 Dividend Equalization Reserve 356,040,000 356,040,000 356,040,000 356,040,000 190,440,000 - Reserve against Pre-Take over loss 1,554,759,750 1,554,759,750 1,554,759,750 1,554,759,750 1,554,759,750 1,554,759,750 Pre-take over loss (1,211,934,675) (1,214,087,213) (1,224,349,057) (1,273,388,162) (1,289,341,459) (1,298,071,598) Assets revaluation reserve 405,015,050 405,015,050 234,075,050 234,075,050 - - Reserve for Revaluation of Treasury Bills (HTM) 28,180,168 28,180,168 12,734,774 - - - Reserve for Building Fund 60,000,000 60,000,000 60,000,000 60,000,000 60,000,000 60,000,000 General Reserve 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 185,000,000

351,900,000 351,900,000 372,600,000 331,200,000 356,040,000 182,160,000 Profit and loss account-Retained Earnings 180,412,393 - 193,266,287 52,650,273 2,935,244 48,628,013 TOTAL SHAREHOLDERS' EQUITY 3,894,372,686 3,711,807,755 3,315,126,804 3,071,336,911 2,630,833,535 2,320,898,168 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 46,724,579,882 42,579,485,856 35,970,642,294 27,399,954,469 23,047,667,908 18,715,682,398

- - - - - - OFF BALANCE SHEET ITEMS:

Contingent LiabilitiesAcceptances and endorsements (Net) 4,987,941,787 5,771,334,926 6,150,213,009 5,828,316,683 3,119,901,803 1,481,410,394 Letters of Guarantees 1,886,622,028 1,793,971,094 1,555,074,554 1,628,441,007 6,278,451,308 3,654,872,334 Irrevocable letters of credit (Net) 9,655,750,567 4,657,101,076 5,256,611,172 4,416,357,259 1,917,160,210 1,960,112,830 Bills for collection 556,465,432 431,974,868 839,938,407 950,823,785 275,271,499 673,258,467 Other liabilities (Bad & Loss) - - - - - -

17,086,779,814 12,654,381,964 13,801,837,142 12,823,938,734 11,590,784,820 7,769,654,025

Continue…


Proposed dividend


At 31 March At 31 December At 31 December At 31 December At 31 December As at 31 December2008 2007 2006 2005 2004 2003Taka Taka Taka Taka Taka Taka

Other Contingent LiabilitiesValue of Bangladesh Sanchaya Patra on hand 447,572,100 434,117,100 270,399,100 124,755,100 190,567,100 190,680,100 Value of travelers' cheques on hand 184,893,878 184,558,936 148,739,816 108,989,581 80,457,527 38,380,250

632,465,978 618,676,036 419,138,916 233,744,681 271,024,627 229,060,350 Total Contingent Liabilities 17,719,245,792 13,273,058,000 14,220,976,058 13,057,683,415 11,861,809,447 7,998,714,375

Other commitmentsLease rental commitments - - - - - -

- - - - - - -

352,474,496 65,599,991 134,717,390 343,306,493 58,610,996 1,298,170 Undrawn note issuance and revolving facilities - - - - - -

- - - - - - -

Spot and forward foreign exchange rate contracts - - - - - - Other Capital Commitments - - 17,203,026 - - - Other exchange contracts - - - - - -

352,474,496 65,599,991 151,920,416 343,306,493 58,610,996 1,298,170 Claims against the Bank not acknowledged as debt - - - - - -

352,474,496 65,599,991 151,920,416 343,306,493 58,610,996 1,298,170 Total 18,071,720,288 13,338,657,991 14,372,896,474 13,400,989,908 11,920,420,443 8,000,012,545

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

Sd/-Dated: Dhaka, 03 June 2008 Hoda Vasi Chowdhury & Co.


Auditors' Report to the ShareholdersSee annexed report of date

Documentary Credits and short term trade -related transactions


Forward assets purchased and forward deposits placed

Undrawn formal standby facilities, credit lines and other commitments


2008 2007 2006 2005 2004 2003Taka Taka Taka Taka Taka Taka

Interest income 1,119,546,037 3,814,759,263 2,829,763,463 2,061,936,765 1,628,352,434 1,383,351,107Less: Interest paid on deposits and borrowings 754,081,130 2,502,489,624 2,160,208,182 1,365,455,642 949,203,013 928,450,655 Net interest income 365,464,907 1,312,269,639 669,555,281 696,481,123 679,149,421 454,900,452 Income from investments 164,149,925 506,856,546 459,180,077 311,352,228 265,899,688 299,200,576 Commission, exchange and brokerage 169,693,707 637,184,031 693,540,535 423,164,384 263,566,577 225,456,764 Other operating income 92,181,623 365,915,849 289,048,370 160,593,724 83,485,997 76,814,492 Total operating income 791,490,162 2,822,226,065 2,111,324,263 1,591,591,459 1,292,101,683 1,056,372,284Salary and allowances 114,106,990 411,556,905 333,362,759 219,876,465 184,202,947 145,207,852 Rent, taxes, insurance, electricity etc. 19,863,835 71,920,207 58,996,633 49,384,265 46,089,026 39,804,463 Legal and professional expenses 3,662,496 17,821,671 12,308,910 7,118,717 5,005,210 4,089,313 Postage, stamp, telecommunication etc. 9,852,623 43,099,104 37,078,867 19,787,662 14,999,594 10,355,653 Stationery , printing, advertisement, etc. 17,704,965 99,194,921 61,935,652 42,266,189 25,032,969 22,576,163 Managing Director's salary and allowances 2,220,000 10,481,265 11,275,944 9,304,224 5,294,400 4,588,000 Directors' fees and expenses 160,185 1,266,801 971,075 940,318 814,065 878,053 Audit fees - 209,424 209,000 115,000 115,000 115,500 Repairs, maintenance and depreciation 21,785,424 82,676,269 66,527,290 42,980,797 44,573,270 22,990,421 Other expenses 44,794,388 213,600,112 170,508,769 144,021,286 73,544,278 46,994,922

Total operating expense 234,150,906 951,826,679 753,174,899 535,794,923 399,670,759 297,600,340 Profit before provisions 557,339,256 1,870,399,386 1,358,149,364 1,055,796,536 892,430,924 758,771,944 Provision for loans and advances Specific Provision 67,499,247 459,836,065 25,385,627 33,188,839 - 117,729,113 General Provision 58,625,046 124,902,933 198,322,457 55,236,903 41,159,553 3,270,887 (including provision for contingent assets) 126,124,293 584,738,998 223,708,084 88,425,742 41,159,553 121,000,000 Provision against other assets - - - - - -

Total provisions 126,124,293 584,738,998 223,708,084 88,425,742 41,159,553 121,000,000

From 1 January 2006 to 31 December

From 1 January 2005

to 31 December

From 1 January 2004

to 31 December

From 1 January 2003

to 31 December

Eastern Bank Limited Profit and Loss Account


March

From 1 January 2007 to 31 December


Profit before tax for the period 431,214,963 1,285,660,388 1,134,441,280 967,370,794 851,271,371 637,771,944 Provision for tax made during the period (250,802,665) (860,081,942) (611,167,213) (426,657,882) (370,000,000) (280,000,000)Deferred Tax (expenses)/income - (6,436,243) (10,076,220) 5,783,324 2,093,857 -

(250,802,665) (866,518,185) (621,243,433) (420,874,558) (367,906,143) (280,000,000)Net Profit after tax for the period 180,412,298 419,142,203 513,197,847 546,496,236 483,365,228 357,771,944 Balance of profit brought forward from previous year - 193,266,287 52,650,273 2,935,244 48,628,013 251,970,458 Transferred from general reserve - - - - 85,000,000 15,000,000 Adjustment relating to prior year 95 (53,508,490) 18,167 18,793 - -

180,412,393 558,900,000 565,866,287 549,450,273 616,993,241 624,742,402

AppropriationsStatutory reserve - (207,000,000) - - (67,577,997) (127,554,389)Dividend Equalisation Reserve - - - (165,600,000) (190,440,000) - Dividend and dividend distribution tax paid for 2002 - - - - - (266,400,000)Proposed dividend - (351,900,000) (372,600,000) (331,200,000) (356,040,000) (182,160,000)

- (558,900,000) (372,600,000) (496,800,000) (614,057,997) (576,114,389)Retained earnings carried forward 180,412,393 - 193,266,287 52,650,273 2,935,244 48,628,013 Earning per share 17.43 40.50 49.58 66.00 58.38 43.21

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

Sd/-Dated: Dhaka, 03 June, 2008 Hoda Vasi Chowdhury & Co.


See annexed report of date


Auditors' Report to the Shareholders


2008 2007 2006 2005 2004 2003Taka Taka Taka Taka Taka Taka

A) Cash flows from operating activities

Interest received 1,119,546,037 3,814,759,227 2,829,763,463 2,061,936,765 1,936,096,880 1,092,725,187Interest paid (754,081,130) (2,502,489,623) (2,160,208,182) (1,365,455,642) (949,203,013) (928,450,655)Dividend received 119,924 119,924 5,383,833 6,250,000 5,600,728 6,314,418Fees & Commission received 169,633,137 635,666,347 683,742,873 420,519,230 263,566,577 225,456,764Income from Investment 164,030,001 506,736,622 453,796,244 305,102,228 510,498,382 363,257,805Recovery of loans previously written off 10,644,700 73,090,678 28,950,370 1,760,385 - - Cash paid to employees (116,487,175) (423,304,971) (345,609,778) (230,121,007) (187,311,412) (150,673,905)Cash paid to suppliers (78,821,569) (288,175,341) (219,083,065) (139,313,453) (24,921,274) (21,155,500)Income taxes paid (190,009,767) (723,202,347) (578,119,927) (310,622,415) (261,775,280) (365,578,032)Received from other operating activities 81,597,493 290,105,090 260,338,989 9,678,807 83,485,997 75,998,575Paid for other operating activities (67,995,762) (144,769,666) (535,963,718) (1,359,420,047) (146,888,447) (108,770,421)Operating profit before changes in operating assets and liabilities 338,175,889 1,238,535,940 422,991,102 (599,685,149) 1,229,149,138 189,124,236Increase/(Decrease) in Operating Assets & LiabilitiesStatutory depositsChanges in trading securities - - - - - - Loans and advances to other banks - - - - - - Loans and advances to customers ( Other than Banks) (3,098,811,254) (5,394,377,462) (8,014,255,040) (2,848,208,781) (3,684,879,146) (397,103,178)Other assets (25,827,075) (41,007,403) 18,531,805 10,552,369 (24,651,696) (45,333,877)Deposits from other Banks - (14,421,227) 15,209,535 (9,866,235) (654,677,751) (2,141,509,000)Deposits from customers ( Other than Banks) 1,578,855,436 4,406,411,870 7,738,307,424 3,756,511,488 4,378,490,177 349,579,526Other liabilities account of customers - - - - Trading liabilities - - - - Recovery from BCCI assets - - - - 8,730,139 10,676,448Other liabilities 125,084,392 (198,386,890) 266,718,348 (89,930,279) (252,080,719) 59,430,377Net Cash received from operating activities (1,082,522,612) (3,245,172) 447,503,174 219,373,413 1,000,080,142 (1,975,135,468)

Eastern Bank LimitedCash Flow Statement



B) Cash flows from investing activitiesChanges in non-trading securities (1,392,296,001) (2,516,382,002) (1,563,174,329) 12,000,000 (78,000,000) 17,200,000Net proceeds /(payments) for sale/ purchase of Treasury bills 200,000,000 2,510,000,000 720,000,000 (6,200,000) (710,000,000) (1,360,000,000)Purchase of property , plant and equipment (26,027,693) (184,392,923) (139,293,010) (258,603,066) (132,022,361) (135,547,117)Sales proceeds of Fixed assets - 2,935,302 7,047,516 7,932,347 100,000 2,704,656Purchase/sale of subsidiary - - - - - - Net cash used in investing activities (1,218,323,694) (187,839,623) (975,419,823) (244,870,719) (919,922,361) (1,475,642,461)

C) Cash flows from financing activities

Borrowings from Other Banks, Financial Institutions and agents 2,126,127,982 1,623,745,073 245,400,000 1,145,000,000 165,000,000 1,820,000,000Received from issue of loan capital and debt securities - - - - - - Dividend paid ( cash dividend) - (165,600,000) (331,200,000) (356,040,000) (182,160,000) (308,610,199)Net cash received from financing activities 2,126,127,982 1,458,145,073 (85,800,000) 788,960,000 (17,160,000) 1,511,389,801

D) Net (decrease) / increase in cash (A+B+C) (174,718,324) 1,267,060,278 (613,716,649) 763,462,694 62,997,781 (1,939,388,128)E) Effects of exchange rate changes on cash and cash-equivalents (2,894,383) 1,411,324 9,562,942 2,862,737 (245,588) 1,133,100F) Opening cash and cash-equivalents 4,366,114,382 3,097,642,780 3,701,796,487 2,935,471,056 2,872,718,863 4,810,973,891G) Closing cash and cash-equivalents (D+E+F)* 4,188,501,675 4,366,114,382 3,097,642,780 3,701,796,487 2,935,471,056 2,872,718,863

*Closing cash and cash-equivalents

Cash In hand (including foreign currencies) 399,984,879 382,927,615 398,779,353 194,443,570 174,602,762 105,061,815Balances with Bangladesh Bank and its agent bank (s) 2,486,535,408 1,964,375,663 1,768,571,232 1,139,084,567 933,456,347 964,873,108Balances with other Banks and Financial Institutions 1,300,303,288 1,546,715,804 929,233,195 745,258,450 758,876,547 1,546,429,840Money at call and short notice - 470,000,000 - 1,620,000,000 1,067,500,000 255,000,000Prize bonds 1,678,100 2,095,300 1,059,000 3,009,900 1,035,400 1,354,100

4,188,501,675 4,366,114,382 3,097,642,780 3,701,796,487 2,935,471,056 2,872,718,863

0.33 - - - - -



BOARD OF DIRECTORS: Sl. No. Name Business address Occupation Position 01 Mr. Mir Nasir Hossain House No-13,

Road No-12, Dhanmondi R/A, Dhaka-1209

Business Chairman

02 Mr. Md. Showkat Ali Chowdhury

Elias Building (2nd Floor) 280 Momin Road, Chittagong

Business Director

03 Mr. A. M. Shaukat Ali 154 Monipuripara, Tejgaon, Dhaka-1215

Business Director

04 Mr. Mohd. Noor Ali 51/B Kemal Ataturk Avenue, Banani, Dhaka

Business Director

05 Ms. Aneela Haque Andes Ltd. ZN Tower Road No-8, House No-2, Gulshan-1, Dhaka

Business Director

06 Mr. Gazi Md. Shakhawat Hossain Representing: M/S. Unique Eastern (Pvt.) Ltd.

51/B, Kemal Ataturk Avenue, Banani, Dhaka

Business Director

07 Mr. Asif Mahmood Representing: Aquamarine Distributions Ltd.

Tech Vally Computers Limited RCC Tower (19th Floor) 17, Mohakhali C/A, Dhaka-1212

Business Director

08 Mr. Meah Mohammed Abdur Rahim (Independent Director)

House No-11, Road No-4, Sector No-1, Uttara Model Town, Dhaka.

Business Director

09 Mr. Ali Reza Iftekhar Eastern Bank Limited, Jiban Bima Bhaban, 10, Dilkusha C/A, Dhaka-1000

Service Ex-officio Director


MANAGEMENT EXECUTIVES:

Sl. No. Name Position 01 Mr. Ali Reza Iftekhar Managing Director & CEO 02 Mr. Muklesur Rahman DMD & Head of SME Banking 03 Mr. Mamoon Mahmood Shah DMD & Head of Consumer Banking 04 Mr. Md. Fakhrul Alam SEVP & Area Head Corporate Banking 05 Mr. Noor A Alam Chowdhury IT Consultant 06 Mr. Sa'ad Zaglul Abbas EVP & Head of Credit Risk Management 07 Mr. Syed Rafiqul Haq EVP & Area Head Corporate Banking, Dhk.08 Mr. Md. Safiar Rahman EVP & Company Secretary 09 Mr. Mahbubul Alam Tayiab EVP & Head of Operations 10 Mr. Malick Musfique Reza SVP & Head of Finance 11 Mr. Md. Sirajul Islam SVP & Head of Human Resources

CORPORATE INFORMATION: 31 MARCH 2008

Date of incorporation : 8th August 1992 Commencement of banking operation : 8th August 1992 Listing with Dhaka Stock Exchange Ltd. : 20 March 1993 Listing with Chittagong Stock Exchange Ltd. : 11 September 2004 Authorized Capital : Tk.3,300 million Paid-up Capital : Tk.1,386.9 million (including 34%

bonus share) Shareholders’ equity : Tk.3,894.37 million Operating Profit : Tk.791.49 million as of March 31,

2008 and Tk.2,822.22 million as of December 31, 2007

Total Assets : Tk.46,724.58 million Number of Employees : 719 persons Number of shareholders : 6,302 (20 April 2008) Number of Branches : 30

Mr. Ali Reza Iftekhar Managing Director & CEO

Address: Eastern Bank Limited, Jiban Bima Bhaban (2nd Floor), 10, Dlikusha C/A, Dhaka-1000

Mr. Safiar Rahman Company Secretary

Address: Eastern Bank Limited, Jiban Bima Bhaban (2nd Floor), 10, Dlikusha C/A, Dhaka-1000

Auditors Hoda Vasi Chowdhury & Co.

Chartered Accountants Address: Ispahani Building (3rd Floor),14-15, Motijheel C/A, Dhaka-1000

Legal Advisors: Sadat, Sarwat & Associates

Address: House No.28, Road No.23, Gulshan-1, Dhaka-1212


BANKER TO THE ISSUE OF RIGHTS SHARE: Eastern Bank Ltd. Prime Bank Ltd. 01 Principal Branch

10 Dilkusha C/A, Dhaka. 01 SBC Tower Branch, Dilkusha C/A,

Dhaka 02 Gulshan Branch

Gulshan Tower, 31 North C/A, Dhaka 02 Moulvi Bazar, Dhaka

03 Dhanmondi Branch House#21, Road #8, Dhanmondi, Dhaka

03 Kawranbazar Branch, Kawranbazar Dhaka

04 Motijheel Branch 88 Motijheel C/A, Dhaka

04 Elephant Road Branch, Dhaka

05 Chawk Mughultuly Branch 150, Chawk Mughultuly (1st Floor), Dhaka

05 Mouchak Branch, Dhaka

06 Mirpur Branch Plot#14, Main Rd.#3, Block:A, Sec#11, Mirpur, Dhaka

06 Gulshan Branch, Gulshan Avenue, Dhaka

07 Shyamoli Branch Plot#16-A/5, Ring Road, Block-F, Mohammadpur Housing State, Dhaka

07 Satmosjid Road Branch, Dhanmondi, Dhaka

08 English Road Branch 68 North South Road, Dhaka

08 Dhanmondi Branch, Dhanmondi, Dhaka

09 Sonargaon Branch 14 Biponon C/A, Rahat Tower (1st Fl), Sonargaon Link Rd., Dhaka

09 Uttara Branch, Uttara, Dhaka

10 Uttara Branch Plot:1A, Road:4, Sector:4, Uttara Model Town, Uttara, Dhaka

10 New Eskaton Branch, Eskaton, Dhaka

11 Shantinagar Branch Shan Tower (1st Fl), 24/1, Chamelibagh, Shantinagar, Dhaka

11 Banani Branch, Banani, Dhaka

12 Bashundhara Branch Plot:15, Block:A, Bashundhara R/A, Dhaka

12 Narayangonj Branch, Narayangonj

13 Banani Branch House:78, Road:11, Block:D, Banani, Dhaka

13 Agrabad Branch, Agrabad, Chittagong.

14 Narayangonj Branch 64 B B Road (Islam Plaza), Narayangonj

14 Khatungonj Branch, Khatungonj, Chittagong

15 Agrabad Branch 33 Agrabad C/A, Chittagong

15 Khulna Branch, Khulna

16 Station Road Branch 291 Station Road, Chittagong

16 Barishal Branch, Barishal


17 Khatunganj Branch 173 Khatunganj, Badsha Market, Chittagong

17 Bogra Branch, Bogra

18 O R Nizam Road Branch 787 CDA Avenue, Chittagong

18 Rajshahi Branch, Rajshahi

19 Jubilee Road Branch Mannan Bhaban (Gr. Fl), 156 Nur Ahmed Sarak, Jubilee Road, Chittagong

19 Sylhet (Laldighirpar) Branch, Sylhet

20 Chandgaon Branch House:16, Road :01, Block:A, Chittagong

20 IBB, Amberkhana, Sylhet

21 Raozan Branch Bharetoshowri Market, Kaptai Road, Chittagong

21 Jubilee Road Branch, Chittagong

22 Panchlaish Branch 14 Panchlaish R/A, Chittagong

22 IBB, O.R. Nizam Road, Chittagong

23 Khulna Branch 181 Khan-A-Sabur Road, Shibbari Mour, Khulna

23 Panthapath Branch, Dhaka

24 Jessore Branch 25/A R.N. Road (1st Fl), Jessore

24 Tongi Branch, Tongi, Gazipur

25 Rajshahi Branch Doinik Barta Complex (Gr. Fl), Alupotti, Natore Road, Rajshahi.

25 Bangshal Branch, Dhaka

26 Bogra Branch 513/786 Shantahar Road Baragola, Bogra

26 Pragati Sarani Branch, Dhaka

27 Upashahar Branch Upashahar Gas Bhaban, Mehedi Bagh, Sylhet

27 Asad Gate Branch, Dhaka

28 Chouhatta Branch Firoz Centre, 891/Ka, Chouhatta, Sylhet

28 IBB Mirpur Branch, Dhaka

29 Bishwanath Branch Khurshid Ali Shopping Complex, Notun Bazar, Bishwanath, Sylhet

29 Madhabdi Branch, Narsingdi

30 Moulvi Bazar Branch 26 Sylhet Trunk Road (1st Fl), Moulvi Bazar

30 Ganakbari Branch, Savar, Dhaka


Length of time during which the Issuer has carried on Business [Rule-8(j)] Eastern Bank Limited was formed as a public limited company incorporated in Bangladesh with primary objective to carry on all kinds of banking business in and outside Bangladesh. The Bank has also taken over the businesses, assets, liabilities and losses of erstwhile Bank of Credit & Commerce International (Overseas) Limited, (hereinafter called BCCI) branches in Bangladesh with effect from 16th August, 1992 as they stood after reduction or adjustments in accordance with the provisions of the Bank of Credit & Commerce International (Overseas) Limited (Reconstruction) Scheme, 1992, hereinafter called the Scheme. Implementation Schedule [Rule -8(k)] It is expected by the management of Eastern bank Limited that the bank will open 04 (four) branches in the current year. Quantity of Shares held by each Director on the date of the Rights Share Offer Document (ROD) [Rule-8(l)] Sl. No. Name Position Number of

shares held Percentage

(%) 01 Mr. Mir Nasir Hossain Chairman 1,58,321 1.14 02 Mr. Md. Showkat Ali

Chowdhury Director 2,579 0.018

03 Mr. A.M. Shaukat Ali Director 72,695 0.52 04 Mr. Mohd. Noor Ali Director 10,485 0.07 05 Ms. Aneela Haque Director 22,545 0.16 06 Mr. Gazi Md. Shakhawat

Hossain Representing: M/S. Unique Eastern (Pvt.) Ltd.

Director

1,64,686

1.19 07 Mr. Asif Mahmood

Representing: Aquamarine Distributions Ltd.

Director

43,952

0.32 08 Mr. Meah Mohammed Abdur

Rahim Director 837 0.006

Beneficial Owners Holding Shares 5% or above [Rule-8(l)] Sl. No. Name Position Number of

shares held Percentage

(%) 01 Mr. Anis Ahmed Shareholder 791,069 5.70 02 Namreen Enterprise Limited Shareholder 1,382,143 9.96 03 Arusha & Co. (Pvt) Limited Shareholder 1,383,181 9.97


Public Listed Company under Common Management

As per [Rule -8(n)] of Rights Issue Rules, 2006 of the Securities and Exchange Commission; there is no Public Listed Company under common management of the Bank.

Classified Information & Underwriters [Rule -8(o)]

Sl. No.

Underwriters Nos. of shares underwritten

Underwritten amount

01 Equity Partners Limited 2,496,420 249,642,00002 LankaBangla Finance Limited 2,427,075 242,707,50003 Fidelity Assets & Securities Company Ltd 1,386,900 138,690,00004 Banco Trans World (Bangladesh) Ltd. 624,105 62,410,500 Total 6,934,500 693,450,000

a. Issue Manager Prime Bank Limited Peoples Insurance Bhaban (11th Floor) 36, Dilkusha C/A, Dhaka-1000

b. Auditors Hoda Vasi Chowdhury & Co. Chartered Accountants Address: Ispahani Building (3rd Floor) 14-15, Motijheel C/A, Dhaka-1000

c. Legal adviser Sadat, Sarwat & Associates Address: House No.28, Road No.23 Gulshan-1, Dhaka-1212

d. Banker to the Issue i) Eastern Bank Limited Address: 10 Dilkusha C/A (2nd Floor), Dhaka-1000 ii) Prime Bank Limited Address: Peoples Insurance Bhaban (11th Floor), 36, Dilkusha C/A, Dhaka-1000.

Directors’ take-up in the Rights Offer [Rule-8(q)]

Directors are expected to exercise in full their portion of Rights Share Offer: Sl. No.

Name Position Number of shares held

Nos. of shares to be renounce

Remarks

01 Mr. Mir Nasir Hossain Chairman 1,58,321 Nil 02 Mr. Md. Showkat Ali Chowdhury Director 2,579 Nil 03 Mr. A.M. Shaukat Ali Director 72,695 Nil 04 Mr. Mohd. Noor Ali Director 10,485 Nil 05 Ms. Aneela Haque Director 22,545 Nil 06 Mr. Gazi Md. Shakhawat Hossain

Representing: M/S. Unique Eastern (Pvt.) Ltd.

Director 1,64,686 Nil

07 Mr. Asif Mahmood Representing: Aquamarine Distributions Ltd.

Director 43,952 Nil

08 Mr. Meah Mohammed Abdur Rahim (Independent Director)

Director 837 Nil


TERMS AND CONDITIONS OF THE RIGHTS OFFER

Basis of the Offer

The Bank records its share register of members on 15/12/2008 for determining the shareholders who are eligible to receive this offer of shares on rights basis. The ordinary shares are now being offered on a rights basis to the shareholders holding shares on the book closure in the ratio of 2:1 i.e., one rights share for 2 (two) existing shares held. Entitlement As a shareholder of the Bank on the record date on 15 December, 2008 (will be given after consent from SEC), the shareholders are entitled to this Rights Share Offer. Only the holder(s) of a minimum of one fully paid ordinary share is entitled to receive the Rights Share Offer. Acceptance of the Offer A shareholder may accept and apply for the shares hereby offered, wholly or in part by filling in Application “Form-A” and submitting the same along with the application money to the Bankers to the Issue on or before the closing date i.e. 22 January, 2009. Renunciation A shareholder may renounce all or part of the shares he/she is entitled to in favor of any other person(s) other than an infant or person of unsound mind. He/she can renounce his/her rights/entitlement of shares by signing Renunciation “Form-B”. Renouncee(s) shall fill in “Form-C” appropriately. Underwriters’ Obligation If and to the extent that the shares offered to the existing shareholders by the Rights Share Offer Document authorized hereunder shall not have been subscribed and paid for in cash in full by the closing date, the Company shall within 10 (ten) days of the closure of subscription call upon the underwriters (for full unsubscribe amount) in writing with a copy of said writing to the Securities and Exchange Commission, to subscribe for shares not subscribed by the closing date and to pay for in cash in full, inclusive of any premium if applicable, for such unsubscribed shares within 15 (fifteen) days after being called upon to do so. If payment is made by Cheque/Bank Draft by the underwriter it will be deemed that the underwriter has not fulfilled his obligation towards his commitment under this Agreement, until such time as the Cheque/Bank Draft has been encashed and the bank's account has been credited. In any case, within 7 (seven) days after the expiry of the aforesaid 15 (fifteen) days, the Bank shall send proof of subscription and payment by the underwriters to the Commission.


General All applications should be made on the printed form provided by the Company in this Rights Share Offer Documents only and should be completed in all respects. Applications which are not completed in all respects or are made otherwise than as herein provided or are not accompanied by the proper application amount of deposit are liable to be rejected and the application money received in respect thereof shall be refunded. All communications in connection with the application for the Rights Share should be addressed to the Bank quoting the registered folio number/BO ID number in the form. Condition of Subscription One Right share of Tk.100.00 at par is offered against 2 (two) existing shares held by existing Shareholder(s) whose name(s) appeared in the Bank’s Share Register at the record date as on 15 December, 2008. Payment of Share Price Payments for the full value of Shares applied for shall be made with designated branches of Bankers to the issue by Cash/Pay Order/Demand Draft payable to "Eastern Bank Limited" and crossed. The Pay Order/Demand Draft for payment of share price must be drawn on a bank in the same town to which the application form has been submitted.

SUBSCRIPTION

Opens on :1st January, 2009

Closes on :22nd January, 2009

(within banking hours)

Any change or extension regarding subscription period will be notified through national dailies.

Lock-In on Rights Share The Rights Share of directors and other shareholders holding 5% or more shares shall be subject to lock-in for a period of three years from the date of closure of the rights share subscription. In the event of renunciation of rights share by aforesaid persons, the renounced shares shall also be subject to lock-in for the same period shall be operative.

Others The application not properly filled in shall be treated as cancelled and deposited money will be refunded. For any reason, no profit/compensation will be paid on the refunded amount. The offer will be deemed to have been declined if completed Application “Form-A” with necessary payments have not been received by 22 January, 2009 or by such later date as may be notified through national dailies to that effect.


MATERIAL CONTRACTS Bankers to the Issue Eastern Bank Limited and Prime Bank Limited are the Bankers to the Issue who will collect the subscription money of the Rights Share Offer. The Rights Issue subscription money collected from the shareholders by the Bankers to the issue will be remitted to the Bank's STD Account No. 01011220000704 with Eastern Bank Limited, Principal Branch, 10, Dilkusha C/A, Dhaka-1000. Underwriters There are 04 (four) underwriters have underwritten the full amount of Rights Offer of EBL as shown in the classified information part of ROD. The underwriter will be paid underwriting commission @0.05% of the nominal value of shares underwritten by them out of the Rights Issue. Simultaneously, with the calling upon an underwriter to subscribe or procure subscriber and pay for any number of shares, the company will pay no additional commission to that underwriter on the nominal value of shares required to be subscribed by them. Manager to the Issue Prime Bank Limited is appointed as Manager to the Issue of the Right Issue of the Company. Accordingly, an agreement was made between the Issue Manager and the Bank. The Bank will pay an issue management fee of total lump sum amount of Tk.99,000 (Taka ninety nine thousand) to the issue Manager. Acquisition of Property As per clause 8(p) of the Rights Issue Rules, 2006, there is no Vendor’s Agreement between EBL and any other party for acquisition of Property, Plant and Equipment except the Underwriting, Issue Management and Bankers to the Issue Agreement.


FORM-A

[rule 5 and rule 8(t)]

Declaration (due diligence certificate) about responsibility of the Issue Manager

in respect of the rights share offer document of Eastern Bank Limited

This rights share offer document has been reviewed by us; and we confirm after due examination that the rights share offer document constitutes full and fair disclosures about the rights issue and issuer, and complies with the requirements of the Securities and Exchange Commission (Rights Issue) Rules, 2006; and that the issue price is justified under the provisions of the Securities and Exchange Commission (Rights Issue) Rules, 2006.

For Prime Bank Limited

Sd/- (Nasiruddin Ahmed)

Managing Director (CC)

Place: Dhaka Dated: 04 June 2008


FORM-B

[rule 6 and rule 8(t)] Declaration (due diligence certificate) about responsibility of the Underwriter(s) in respect of the rights share offer document of Eastern Bank Limited This rights share offer document has been reviewed by us; and we confirm after due examination that the issue price is justified under the provisions of the Securities and Exchange Commission (Rights Issue) Rules, 2006, and also that we shall subscribe for or procure subscription for any under-subscribed rights shares within fifteen days of calling thereof by the issuer. The issuer shall call upon us for such subscription within ten days of closure of the subscription lists for the rights issue.

For Equity Partners Limited

LankaBangla Finance Limited Fidelity Assets & Securities Company Limited Banco Trans World (Bangladesh) Limited

Sd/- Managing Director/Managing Director & CEO(C C)/Director

Place: Dhaka Dated: 15 July 2008 & 16 July 2008


FORM-D [See rule (1) 8 (t)]

Due diligence certificate by the directors about their personal responsibility

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

Sd/- Sd/- Sd/-

(Mir Nasir Hossain) (Md. Showkat Ali Chowdhury)

(A.M. Shaukat Ali)

Chairman Director Director

Sd/- Sd/- Sd/- (Mohd. Noor Ali) (Aneela Haque) (Gazi Md. Shakhawat

Hossain) Director Director Representing:

M/S.Unique Eastern (Pvt.) Ltd.

Director Sd/- Sd/- Sd/-

(Asif Mahmood) (Meah Mohammed Abdur Rahim)

(Ali Reza Iftekhar)

Representing: Independent Director Managing Director & CEO Aquamarine Distributions Ltd.

Director

Place: Dhaka Dated: June 25, 2008

(Eastern Bank Limited)


EASTERN BANK LIMITED 10, Dilkusha C/A, Dhaka-1000

Folio/BO Account No: Date: 18th November, 2008 Name: Address:

LETTER OF OFFER FOR RIGHTS ISSUE

Dear Shareholder (s) We are pleased to inform you that the Board of Directors in its meeting held on 1st April 2008 recommended to issue Rights Shares in the ratio of 1:2 i.e., 1 (one) rights share for 2 (two) existing shares held which is also approved by the Securities & Exchange Commission. As a registered Shareholder as on 15 December 2008 the record date, you are entitled to exercise your right. If you wish to accept the above Rights Share in full or in part, you are required to submit completed Application Form-A annexed hereto with necessary payments. You may, however, renounce your rights in respect of all or part of your entitlement in favor of others in which case the Renunciation Form-B and Form-C annexed here to be submitted duly filled in by you and the renounce(s) along with necessary payments. The rights can not be exercised for fraction of a share i.e. below full unit of share. All the payments for accepted shares are to be made in cash or by P0/DD/Cheque @ Tk.100/ each at par and to be deposited with any of the branches of Bankers to the Issue during Banking hours from 1st January 2009 to 22nd January 2009 (both days inclusive). Payments must be through PO/DD/Cheque payable to "Eastern Bank Limited" and drawn on a Bank in the same town where the Branch of Bankers to the Issue in which the application form has been submitted is situated. The offer will be deemed to have been declined if completed Application “Form-A” and/or Renunciation “Form-B” and “Form-C” with necessary payments have not been received by 22/01/2009 or by such later date as may be notified through national dailies to that effect. A self-explanatory Rights Share Offer Documents is attached for your kind information and evaluation. By order of the Board

Sd/- Ali Reza Iftekhar Managing Director & CEO


Application Form-A EASTERN BANK LIMITED

10, Dilkusha C/A, Dhaka-1000

Rights Issue of 6,934,500 Ordinary Shares of Tk. 100/- each at par offer to the Shareholders appeared in the share register at the close of business on 15th December ,2008

Last-Date of Acceptance and Application: 22/01/2009

FORM OF ACCEPTANCE AND APPLICATION FOR SHARES

Managing Director & CEO Dated : /2009 Eastern Bank Limited Head Office 10 Dilkusha C/A (2nd Floor) Dhaka-1000. Dear Sir, I/We apply for allotment of ordinary shares indicated below in response to your letter of Rights Offer and Subject to the Memorandum and Articles of Association of the Bank. I/We hereby agree to accept the shares as may be allotted to me/us on the terms laid down in the letter of offer and enclose the necessary remittance @ Tk 100/- per share in cash or by Draft/Pay order/Cheque no…………………………… dated ........................................drawn on.............................................……Bank .……………………...Branch.

Folio/BO Account No No. of shares held at the close of business on 15 /12/2008

No. of shares offered

No. of shares accepted

Total amount paid

Yours faithfully, 1. Name (in block) ................................................................................... Signature ........................................... Address: .................................................................................................................................................................

2. Name (in block)…………………………………….……Signature………………….......

Address: ................................................................................................................................................................. Depository (B/O) Account Number

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

ACKNOWLEDGEMENT RECEIPT OF SHARE MONEY Received Tk .............................................. (Taka………………..………………………...….……..) only from Mr./Ms……………………………………………………………………………………....folio/BO Account No………………………………..……….…for........................... no.(s) of Rights Share of Eastern Bank Limited in Cash/Pay order/Draft/Cheque No……………..date…………….. ..................................................................of Bank ……………………………Branch.

Application Sl. No. (Bank's Seal) Signature of Receiving Officer

Date :


Renunciation Form-B

EASTERN BANK LIMITED

10, Dilkusha C/A, Dhaka-1000

Rights Issue of 6,934,500 Ordinary Shares of Tk. 100/- each at par offer to the Shareholders appeared in the share register at the close of business on 15th December, 2008.

Last Date of Acceptance and Application: 22/01/2009

FORM OF RENUNCIATION Managing Director & CEO Dated : /2008 Eastern Bank Limited Head Office 10 Dilkusha C/A (2nd Floor) Dhaka-1000. Dear Sir, I/We hereby renounce my/our rights to the shares offered to me/us as noted below in favour of person(s) accepting the same and signing in Application by Renounce(s) and apply for allotment in his/her/their name(s).

Folio/BO Account No No. of shares held at the close of business on 15/12/2008

No. of shares offered No. of shares

renounced

Yours faithfully, 1. Name (in block)....................................................................Signature ............................ Address: .....................................................................................................................................

2. Name (in block)…………………………………………… Signature…………………

Address: ..................................................................................................................................... Depository (B/O) Account Number

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

Note: Signature must be the same as was furnished to the Company earlier.


Renunciation Form-C

APPLICATION BY RENOUNCEE(S)

Managing Director & CEO Dated : /2008 Eastern Bank Limited Head Office 10 Dilkusha C/A (2nd Floor) Dhaka-1000. Dear Sir,

As the share holder(s) at pre-page has/have renounced his/her/their rights to the shares offered, in my/our favour, I/We do hereby apply for the number of share noted above as renounced, by making payment of Tk…………………………………………. being the value of…………………….Shares @ Tk 100/-each At Par.

Yours faithfully, 1. Signature ................................................................................. 2. Signature .......................................................Name (in block)............................................................................ Name (in block) .................................................S/0. D/O. W/0 ............................................................................S/0. D/0. W/0 ..................................................Address:.......................................................................................Address:.............................................................

Folio No………………………………………………………. Folio ……………………

Depository (B/O) Account Number

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

Note: Folio no. is to be mentioned only in case of existing shareholder(s) ............................................................................................................................

ACKNOWLEDGEMENT RECEIPT OF SHARE MONEY Received Tk....................................(Taka………………..……………………..) only from Mr./Ms………………………………………………………………..folio/BO Account No………………………………..………for...............no.(s) of rights shares of Eastern Bank Limited in Cash/Pay order/Draft/Cheque No……………..date…………….. of…………… …………….Bank ………………Branch.

Application Sl. No. (Bank's Seal) Signature of Receiving Officer

Date