1.0.

Introduction:

1.1. Background of the Report:

Internship program is a pre-requisite for completes the post graduation degree from the Masters of
Business Administration (MBA) program of the Bangladesh University of Business and
Technology (BUBT). The internship program is generally executed in the last semester & it has
got the same weight as other courses in the evaluation process. As the classroom discussion alone
cannot give proper picture of real business situation, therefore it is as opportunity for the students
to know about real life situation through this program.
My Internship supervisor Ms. Kanij Fahmida, Assistant Professor, Department of Accounting,
Bangladesh University of Business and Technology (BUBT), has selected the topic for internship
report study on the Compliance of the rules and regulations of BAS-1and BAS-30 in preparing
the financial statements of Shahjalal Islami Bank Limited (SJIBL).

1.2. Significance:
As a pre-requisite for completes the post graduation degree from the Masters of Business
Administration (MBA) program of the Bangladesh University of Business and Technology
(BUBT), it was required to complete in a suitable business organization and submit a report on
findings. Knowledge and learning become perfect when it is associated with theory and practice.
Theoretical knowledge gets its perfection with practical application.

1.3. Scope of the report:

During these three months internship program in Shahjalal Islami Bank Limited Dilkusha Branch,
almost the desks have been observed. This report is based on the practical observation applied in
preparing the financial statements of SJIBL. While preparing this report, it had a great opportunity
to help to obtain practical experience about compliance of the rules and regulations of BAS-1and
BAS-30 in preparing the financial statements of SJIBL. It makes a bridge between the gap of
theory and practical.

1.4. Objective of the report:

The study seeks to achieve the following objectives:

1.4.1 General Objective:

The broad objective of the study is to know about compliance of the rules and regulations of
BAS-1and BAS-30 in preparing the financial statements of Shahjalal Islami Bank Limited
(SJIBL).

1.4.2 Specific Objectives:

To understand the rules and regulations of BAS-1& BAS-30.

To observe the compliance of rules and regulations of BAS-1 ( Para-99, 106, 108 & 110)
in preparing the financial statements of SJIBL
To observe the compliance of rules and regulations of BAS-30 ( Para-9,10,19,24,25,26,30

& 40) in preparing the financial statements of SJIBL

To detect the non-compliance rules and regulations (if there any).

1.5.

Methodology:

The study requires a systematic procedure from selection of the topic to preparation of the final
report. The over all process of methodology has been given as below:

1.5.1. Research Design:

This is a descriptive research which briefly reveals the Compliance of the rules and regulations
of BAS-1and Bas-30 in preparing the Financial Statements of SJIBL. Data have been collected
from secondary sources.

1.5.2. Sources of Data:

This study is mainly based on secondary data available from the financial statements of 2012 of
SJIBL and the BAS by the ICAB in 2006.

1.5.2.1.

Secondary Sources:

Annual Report of SJIBL 2012

Bangladesh Accounting Standard

1.6.

Limitations:

In all respects there remain some limitations and weaknesses, which could be failed to escape by
any means. These are follows:

Time Constraints: To continue study in such a vast area requires a big deal in time. As
an internee three months is not enough time.

Overall of Bank Officers: Since the bank personals were very busy, they could provide
very little time.

2.1 Introduction:
Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation in accordance with
principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. During
last eleven years SJIBL has diversified its service coverage by opening new branches at different
strategically important locations across the country offering various service products both
investment & deposit. Islamic Banking, in essence, is not only INTEREST-FREE banking
business, it carries deal wise business product thereby generating real income and thus boosting
GDP of the economy. Board of Directors enjoys high credential in the business arena of the
country, Management Team is strong and supportive equipped with excellent professional
knowledge under leadership of a veteran Banker Mr. Md. Abdur Rahman Sarker.

2.2 Vision:
To be the unique modern Islami Bank in Bangladesh and to make significant contribution to the
national economy and enhance customers' trust & wealth, quality investment, employees' value
and rapid growth in shareholders' equity.

2.3 Mission:

To provide quality services to customers.

To set high standards of integrity.

To make quality investment.

To ensure sustainable growth in business.

To ensure maximization of Shareholders' wealth

To extend our customers innovative services acquiring state-of-the-art technology

blended with Islamic principles

2.4 Strategies:

To strive for customers best satisfaction & earn their confidence.

To manage & operate the Bank in the most effective manner.
To identify customers needs & monitor their perception towards meeting those
requirements

To review & updates policies, procedures & practices to enhance the ability to extend

better services to the customers.

To train & develop all employees & provide them adequate resources so that the

customers needs are reasonably addressed.

To promote organizational efficiency by communicating company plans, polices &

procedures openly to the employees in a timely fashion

To cultivate a congenial working environment.
To diversify portfolio both the retail & wholesale markets.

2.5 Goals of SJIBL:

Shahjalal Islami Bank Ltd. will be the absolute market leader in the number of loans given to
small and medium sized enterprises throughout Bangladesh. It will be a world-class organization
in terms of service quality and establishing relationships that help its customers to develop and
grow successfully. It will be the Bank of choice both for its employees and its customers, the
model bank in this part of the world.

2.6 Objectives of SJBL:

No sustainable material well-being is possible without spiritual development of mankind. Only
material well-being should not be the objective of development. Socio-economic justice and
brotherhood can be implemented well in a God-fearing society.
The other objectives of Shahjalal Islami Bank include:

To conduct interest-free and welfare oriented banking business based on Islamic Shariah.
To implement and materialize the economic and financial principles of Islam in the

banking arena.
To contribute in sustainable economic growth.
To help in poverty alleviation and employment generations.
To remain one of the best banks in Bangladesh in terms of profitability and assets quality.
To earn and maintain a Strong CAMEL Rating.
To introduce fully automated systems through integration of information technology.
To ensure an adequate rate of return on investment.
To maintain adequate liquidity to meet maturing obligations and commitments.
To play a vital role in human development and employment generation.
To develop and retain a quality work force through an effective Human Resources

Management System.
To ensure optimum utilization of all available resources.
To pursue an effective system of management by ensuring compliance to ethical norms,
transparency and accountability at all levels.

2.7 Management Hierarchy of SJIBL:

Managing Director (MD)
Deputy Managing Director (DMD)
Senior Executive Officer (SEO)
Executive Vice President (EVP)
Senior Vice President (SVP)
Vice President (VP)
Senior Assistant Vice President (SAVP)
Assistant Vice President (AVP)
First Assistant Vice President (FAVP)
Junior Assistant Vice President (JAVP)
Senior Executive Officer (SEO)
Executive Officer (EO)
First Executive Officer (FEO)
Junior Executive Officer (JEO)
Assistant Executive Officer (AEO)
Senior Officer (SO)
Officer
Management Trainee Officer
Trainee Senior Officer
Staff

Figure 2: Management Hierarchy of SJIBL

2.8 Shariah Council of SJIBL:

Shariah Council of the Bank is playing a vital role in guiding and supervising the implementation
and compliance of Islamic Shariah principles in all activities of the Bank since its very
inception.Members of the Shariah Council meet frequently and deliberate on different issues
confronting the Bank on Shariah matters. They also conduct Shariah inspection of branches
regularly so as to ensure that the Shariah principles are implemented and complied with
meticulously by the branches of the Bank.

2.9 Product and Service:

Deposit Schemes

Mudaraba Millionaire Scheme

Mudaraba Monthly Income Scheme

Mudaraba Double/Triple Benefit Scheme

Mudaraba Monthly Deposit Scheme

Mudaraba Hajj Scheme

Mudaraba Cash waqf Deposit Scheme

Deposit Account

Al-Wadiah Current Deposit

Mudaraba Savings Deposit

Mudaraba Special Notice Deposit

Mudaraba Term Deposit Receipt

Mudaraba Foreign Currency Deposit

Mudaraba SJIBL School Banking

Investment Product

Corporate (Mode)
Murabaha
Bai-Muazzal
Hire Purchase under Shirkatul Meelk
Ijara
Bai-Salam
Quard-e-Hasana
Invetment against LC

Retail
Housing Investment Programe
Car Investment Scheme
Investment for Self-employment
Investment Scheme for Executives
Investment Scheme for Doctors
Investment Scheme for Marriage
Investment Scheme for Education

SME
Small Business Investment Program
Small Entrepreneur Investment Program
Medium Entrepreneur Investment Program
Women Entrepreneur Investment Scheme

SJIBL Card

VISA Debit Card

VISA Prepaid Card (Local)

VISA Prepaid Card (International)

Capital Market Operation

Brokerage Operation

Margin Facility

Service Product

ATM Service

Remittance Service

Locker Service

Online Banking

Phone Banking

SMS Push-Pull

SWIFT

ROUTERS

2.10 Corporate Information

Name of the Company

Shahjalal Islami Bank Limited

Legal Form

A public limited company incorporated

in Bangladesh on 1st April 2001 under
the companies Act 1994 and listed in
Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited.

Commencement of Business

10th May 2001

Registered Office

Uday Sanz.
2/B Gulshan South Avenue, Gulshan-1,
Dhaka-1212.
Telephone No.: 88-02-8825457
Fax No.: 88-02-8827607

Website

www.shahjalalbank.com.bd

SWIFT

SJBL BD DH

E-mail

sblho@shahjalalbank.com.bd

Chairman

Alhaj Anwer Hossain Khan

Managing Director

Md. Abdur Rahman Sarker

Company Secretary

Emran Hossain

No. of Branches

82

No. of ATM Booth

15

No. of SME Centers

06

Off-Shore banking Unit

01

No. of Employees

1,624

Stock Summary:
Authorized Capital

Tk. 6,000.00 million

Paid up Capital

Tk. 4,452.65 million

Face Value per Share

Tk. 10.00

Table 2: Corporate Information

3.1. Definition of Bank:
A bank is a firm or institution doing a bonafide banking business, which debts are commonly,
accepted in final statement of other people debts. An organization usually a corporation, chartered
by the state or federal government which does most or all of the following: receives demand
deposit, time deposit, honors instrument drawn on them and pays interest on them; discounts
notes, makes loan and invest in securities; collect checks, drafts, and notes and issues drafts and
cashier checks.

3.2. Definition of Islamic Bank:

An Islamic Bank is a financial and social institution whose objectives and operations as well as
principles and practices must conforms to the principles of Islamic Shariah, and which must avoid
the use of interest in any of its operations. The organization of Islamic Conference (OIC) defined
an Islamic Bank as a financial institution whose statutes, rules and procedures expressly state its
commitment to the principles of Islamic Shariah and to the banning of the receipt and payment of
interest on any of its operation.

3.3. Financial Statements:

According to Kieso, Financial Statements are the principal means through which financial
information is communicated to those outside an enterprise.
A Financial Statements is a document reporting business financial performance and resources.
Financial statements include:

The balance sheet

Income Statement,
Changes in equity and
Cash flow for the period.
3.5. Authoritative Body for providing rules and regulations in Accounting:

10

In Accounting, there are many authoritative bodies for providing rules and regulations. But there
mainly two bodies are important for providing rules and regulations, which generally accepted in
whole world. They are discussed below:
a) Financial Accounting Standard Board (FASB)
b) International Accounting Standard Board (IASB)

a) Financial Accounting Standard Board (FASB):

The Financial Accounting Standards Board (FASB) is a private, non-for-profit organization whose
primary purpose is to develop generally accepted accounting principles (GAAP) within the United
States in the public's interest. The Securities and Exchange Commission (SEC) designated the
FASB as the organization responsible for setting accounting standards for public companies in the
U.S. It was created in 1973, replacing the Committee on Accounting Procedure (CAP) and the
Accounting Principles Board (APB) of the American Institute of Certified Public Accountants
(AICPA).

b) International Accounting Standard Board (IASB):

In an effort to generate comparable and reliable accounting information to help investors,
creditors and others, each country has developed its own national financial accounting standards.
These standards reflect the culture, history, and the characteristics of accounting problems facing
that country.

In some countries, the professional bodies formulate the financial accounting

standards, while in many others governments and regulators establish these standards. As a result,
much of the 20th century had witnessed a high degree of variation in the international accounting
practices. International accounting diversity was one of the topics discussed in the tenth
International Congress of Accountants in 1972. Accounting bodies of some countries attending
the meeting were concerned in reducing the degree of variation in international accounting
practices. As a result, in 1973, the International Accounting Standards Committee (IASC) was
formed. The founders of this Committee included accounting bodies from Australia, Canada,
France, Japan, Mexico, Netherlands, West Germany, the United States, United Kingdom and
Ireland. Harmonization of accounting standards around the world was one of the main objectives
of this Committee. Harmonization can be defined as the process of reducing the degree of
variation in international accounting practices.
The first exposure draft and the first international accounting standard appeared in 1974. In its
early years the IASC concentrated on the development of the international accounting standards.
The Committee had issued 13 International Accounting Standards between 1974 and 1979.

11

However there was little success, if any, with respect to the harmonization goal because of lack of
enforcement. The IASC was a private organization and its members included accounting bodies
from various countries. Adoption of International Accounting Standards by different countries
was not enforceable by this Committee. Even though the member bodies pledged to cooperate
with the IASC, the accounting standard setting bodies of most countries did not adopt these
standards during the early years. The two main reasons for this were:
International Accounting Standards were not comprehensive enough, and
International Accounting Standards were very flexible. They provided alternative options
to accountants to deal with one accounting issue.
During later years the IASC addressed these issues. In 1987 the Comparability Project was
undertaken to reduce the number of options allowed by the International Accounting Standards.
In 1993, the project was completed and ten of the revised standards were approved.
The International Organization of Securities Exchange Commissions (IOSCO) had been
pressuring the IASC to develop a comprehensive set of Core Standards. In 1995, the IASC and
the IOSCOs Technical Committee reached an agreement on a work plan for a set of forty Core
Standards. Upon successful completion of these standards, IOSCO agreed to endorse IASs in all
global markets. The IASC completed the development of these forty Core Standards by 1999.
Recently IASC experienced a structural change similar to the structure of Financial Accounting
Standards Board (FASB) of the United States. In March 2000, a new IASC constitution was
approved and the name of the international standard setting body was changed to International
Accounting Standards Board (IASB). The new board (IASB) reports to IASC Foundation and
assumed its duties in April 2001.

3.6. BAS and BFRS are in Bangladesh:

In Bangladesh, the ICAB (the Institute of Chartered Accountants of Bangladesh) regulates the
practice of financial accounting. The Institute of Chartered Accountants of Bangladesh is a
professional accountancy body in the Bangladesh. It is the sole organization in the Bangladesh
with the right to award the Chartered Accountant designation. The ICAB is a member of IASB
and it has adopted several IAS as BAS (Bangladesh Accounting Standards) and also accepted
some IFRS as BFRS (Bangladesh Financial Reporting Standards). In Bangladesh, there are 29
BAS and 9 BFRS, which are regulated by the ICAB.

12

3.7. Bangladesh Accounting Standard (BAS-1): Presentation of Financial

statements:
Objective:
This Standard prescribes the basis for presentation of general purpose financial statements to
ensure comparability both with the entitys financial statements of previous periods and with the
financial statements of other entities. It sets out overall requirements for the presentation of
financial statements, guidelines for their structure and minimum requirements for their content.
99 An entity shall present an analysis of expenses recognized in profit or loss using a
classification based on either their nature or their function within the entity, whichever provides
information that is reliable and more relevant.
100 Entities are encouraged to present the analysis in paragraph 99 in the statement of
comprehensive income or in the separate statement of comprehensive income (if presented).
108 In paragraph 106, the components of equity include, for example, each class of contributed
equity, the accumulated balance of each class of other comprehensive income and retained
earnings.
110 BAS 8 requires retrospective adjustments to effect changes in accounting policies, to the
extent practicable, except when the transition provisions in another BFRS require otherwise. BAS
8 also requires restatements to correct errors to be made retrospectively, to the extent practicable.
Retrospective adjustments and retrospective restatements are not changes in equity but they are
adjustments to the opening balance of retained earnings, except when a BFRS requires
retrospective adjustment of another component of equity. Paragraph 106(b) requires disclosure in
the statement of changes in equity of the total adjustment to each component of equity resulting
from changes in accounting policies and, separately, from corrections of errors. These adjustments
are disclosed for each prior period and the beginning of the period.

13

Structure and content

Statement of changes in equity
106 An entity shall present a statement of changes in equity as required by paragraph 10. The
statement of changes in equity includes the following information:
(a) Total comprehensive income for the period, showing separately the total amounts attributable
to owners of the parent and to non-controlling interest;
(b) For each component of equity, the effects of retrospective application or retrospective
restatement recognized in accordance with BAS 8; and
(c) For each component of equity, a reconciliation between the carrying amount at the beginning
and the end of the period, separately disclosing changes resulting from:
(i) Profit or loss;
(ii) Other comprehensive income; and
(iii) Transactions with owners in their capacity as owners, showing separately contributions by
and distributions to owners and changes in ownership interests in subsidiaries that do not result in
a loss of control.

3.8. Bangladesh Accounting Standard-30 (BAS -30): Disclosure in Financial

Statement of Banks and similar Financial Institutions:
The followings are some important clauses of BAS -30 as observed for this study:
3.8.1 Objective of BAS 30:
The objective of BAS 30 is to prescribe appropriate presentation and disclosure standards for
banks and similar financial institutions (hereafter called 'banks'), which supplement the
requirements of other Standards. The intention is to provide users with appropriate information to
assist them in evaluating the financial position and performance of banks and to enable them to
obtain a better understanding of the special characteristics of the operations of banks.

Income Statement:

14

9. A bank shall present an income statement which groups income and expenses by nature and
discloses the amounts of the principal types of income and expenses.
10. In addition to the requirements of other Standards, the disclosures in the income statement or
the notes shall include, but are not limited to, the following items of income and expenses:

Interest and similar income;

Interest expense and similar charges;
Dividend income;
Fee and commission income;
Fee and commission expense;
Gains less losses arising from dealing securities;
Gains less losses arising from investment securities;
Gains less losses arising from dealing in foreign currencies;
Other operating income;
Impairment losses on loans and advances;
General administrative expenses; and
Other operating expenses.
19. In addition to the requirements of other Standards, the disclosures in the balance sheet or the
notes shall include, but are not limited to, the following assets and liabilities.
Assets
Cash and balances with the central bank;
Treasury bills and other bills eligible for rediscounting with the central bank;
Government and other securities held for dealing purposes;
Placements with, and loans and advances to, other banks;

15

 Other money market placements;

Loans and advances to customers; and
Investment securities.
Liabilities
Deposits from other banks;
Other money market deposits;
Amounts owed to other depositors;
Certificates of deposits;
Promissory notes and other liabilities evidenced by paper; and
Other borrowed funds.
24. A bank shall disclose the fair values of each class of its financial assets and liabilities as
required by BAS 32 Financial Instruments: Disclosure and Presentation.
25. BAS 39 provides for four classifications of financial assets: loans and receivables, held-tomaturity investments, financial assets at fair value through profit or loss, and available-for-sale
financial assets. A bank shall disclose the fair values of its financial assets for these four
classifications, as a minimum.

Contingencies and Commitments Including Off Balance Sheet Items:

26. A bank shall disclose the following contingent liabilities and commitments:
(a) The nature and amount of commitments to extend credit that are irrevocable because they
cannot be withdrawn at the discretion of the bank without the risk of incurring significant penalty
or expense; and
(b) The nature and amount of contingent liabilities and commitments arising from off balance
sheet items including those relating to:
(i) Direct credit substitutes including general guarantees of indebtedness, bank acceptance
guarantees and standby letters of credit serving as financial guarantees for loans and securities;

16

(ii) Certain transaction-related contingent liabilities including performance bonds, bid bonds,
warranties and standby letters of credit related to particular transactions;
(iii) Short-term self-liquidating trade-related contingent liabilities arising from the movement of
goods, such as documentary credits where the underlying shipment is used as security; and
(iv) Other commitments, note issuance facilities and revolving underwriting facilities.

Maturities of Assets and Liabilities:

30. A bank shall disclose an analysis of assets and liabilities into relevant maturity groupings
based on the remaining period at the balance sheet date to the contractual maturity date.

Concentrations of Assets, Liabilities and Off Balance Sheet Items:

40. A bank shall disclose any significant concentrations of its assets, liabilities and off balance
sheet items. Such disclosures shall be made in terms of geographical areas, customer or industry
groups or other concentrations of risk. A bank shall also disclose the amount of significant net
foreign currency exposures.

4.1. Analysis of the application of different BAS in preparing the financial

statements of Shahjalal Islami Bank Ltd.:
Bank is a very old financial institution that is contributing toward the development od any
economy and is treated as an important service industry in modern world. Now a day, the function
of bank is not limited to within the same geographical limit of any country. Due to globalization
and free market economy this industry is facing severe competition in any country. Bangladesh
banking sector plays a vital role in the economy. Application of BASs would reflect greater
accountability of corporate management and transparency of published financial information
as well as enhance the creditability of the statutory audit function of Bangladesh. This will
make the environment in Bangladesh more transparent and thus enable the country to attract
foreign and local investment which ultimately contributes to business growth and economic
development if the country.
This report covered the following BASs:
BAS-1(Para-99,108,110)

Accounting Policies (Minimum requirements of notes to the

17

BAS-1(Para-106)
BAS-30(Para-9)
BAS-30(Para-10)

financial statements
Statement of Change in Equity
Statement should group income and expense by nature
Income statement or notes should report by following specific

BAS-30(Para-19)
BAS-30(Para-24)

amounts.
Minimum requirements for balance sheet items
The fair value of each class of financial assets and financial

BAS-30(Para-25)

liabilities.
The fair value of each class of financial assets and financial

BAS-30(Para-26)

liabilities.
Contingencies and commitments including off balance sheet

BAS-30(Para-30)

items
An analysis of assets and liabilities into relevant maturity
grouping based on remaining periods at the balance sheet data

BAS-30(Para-40)

to the contractual maturity data should be disclosed

Any significant concentration of assets, liabilities, and offbalance sheet items should be disclosed.

Accounting Policies (Minimum requirements of notes to the financial statements)

according to BAS-1 (Para-99, 108 & 110):
An entity shall present an analysis of expenses recognized in profit or loss using a classification
based on either their nature or their function within the entity, whichever provides information
that is reliable and more relevant. (According to Paragraph 99)
Analysis of notes to the financial statements:
SL.
1.

Name of the Headings

Basis of preparation of financial

2.

statement
Consolidation

3.
4.
5.
6.
7.
8.
9.

Foreign currency transaction

Fixed asset and depreciation
Investment
Loans and advances
Stock of stationary
Deposits
Recognition
of
income

10.
11.
12.

expenditure
Provident fund
Stuff gratuity
Superannuation fund

and

Given

Not Given

18

13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.

Provision for taxation

Deferred Tax
Reconciliation of books and accounts
Reporting period
Assets acquired under lease
Off-balance sheet items
Related party disclosure
Audit committee
Number of employees
Risk management
Post balance sheet events
Earning per share
Cash flow statement
Statement of changes in equity
Liquidity statement
Benevolent fund

Comments:
Shahjalal Islami Bank Ltd. almost follows all the headings of the accounting policies mentioned
in the above BAS. On a whole it is satisfactory in disclosing accounting policies given as notes to
financial statements. Shahjalal Islami Bank also offered 20% stock dividends after the balalnce
sheet date for the year 2012.

Statement of Changes in Equity according to BAS-1 (Para-106):

An entity shall present a statement of changes in equity as required by paragraph 10. The
statement of changes in equity includes the following information:
(a) Total comprehensive income for the period, showing separately the total amounts attributable
to owners of the parent and to non-controlling interest;
(b) For each component of equity, the effects of retrospective application or retrospective
restatement recognized in accordance with BAS 8; and

19

(c) For each component of equity, reconciliation between the carrying amount at the beginning
and the end of the period, separately disclosing changes resulting from:
(i) Profit or loss;
(ii) Other comprehensive income; and
(iii) Transactions with owners in their capacity as owners, showing separately contributions by
and distributions to owners and changes in ownership interests in subsidiaries that do not result in
a loss of control.

Comments:
Shahjalal Islami Bank Ltd. fully follows the above rules in preparing the changes in equity
statement. They show all the particulars mentioned in the above BAS in preparing the statement
of changes in equity.

Minimum requirements for income Statement according to BAS-30 (Para-9 & 10):
A bank shall present an income statement which groups income and expenses by nature and
discloses the amounts of the principal types of income and expenses.
Analysis of income statement headings:
SL.
a.

Headings
Interest and similar income;

Given

Not Given
-

b.

Interest expense and similar charges

c.
d.

Dividend income;
Fee and commission income;

20

e.
f.

Fee and commission expense

Gains less losses arising

from

g.

dealing securities
Gains less losses

arising

from

h.

investment securities
Gains less losses arising

from

i.
j.

dealing in foreign currencies

Other operating income;
Impairment losses on loans and

k.
l.

advances
General administrative expenses and
Other operating expenses

Comments:
Shahjalal Islami Bank Ltd. almost fully disclosed all the headings mentioned in the above BAS
because of happening this kinds of transactions in case of notes of the annual report-2012.

Minimum requirement for Balance Sheet items according to BAS-30(Para-19):

Asset

SJIBL follows following headings

a. Cash and balances with the central

bank;

a. Cash in hand
b. Balance with Bangladesh Bank and

b. Treasury bills and other bills eligible for

Sonali

rediscounting with the central bank;

c. Government and other securities held

with,

and

(including

foreign

currencies)
c. Balance with other banks and financial

for dealing purposes;

d. Placements

Bank

institutions
loans

and

d. Placement

advances to, other banks;

with

other

banks

and

Financial institutions

e. Other money market placements;

e. Investment in securities

f. Loans and advances to customers; and

f.

g. Investment securities.

g. Bill Purchase and Discounted

Investments ( Loans and Advances)

h. Fixed assets
i.

Other assets
21

Liabilities
a. Deposits from other banks;

SJIBL follows following headings

a.

d. Certificates of deposits;

from other

banks and

financial institutions

b. Other money market deposits;

c. Amounts owed to other depositors;

Placement

b. Deposits and other accounts

-

Al-Wadeeah current deposit & other

accounts

e. Promissory notes and other liabilities

evidenced by paper; and
f.

Other borrowed funds.

Bills Payable

Mudaraba Savings Deposits

Other Mudaraba Deposits

c.

Other Liabilities

d. Deferred Tax Liability

Comments:
SJIBL follows the BAS requirement but the names of the headings are slightly different from the
mentioned headings in the BAS-30(Para-19).

BAS-30 (Para-24 & 25):

The fair values of each class of financial assets and financial liabilities as required by BAS-32 and
BAS-39 should be disclosed.
According to BAS-39, the four classifications of financial assets are:
a. Loans and receivable originated by the entity
b. Held to maturity investment
c. Financial assets held for trading
d. Available for sale financial assets

Comments:

22

Shahjala Islami Bank Ltd. partly follows the classifications and not disclosed fair values as
required by the para-24 and 25 in BAS-30.

Contingencies and Commitments including off-Balance Sheet items according to

BAS-30 (Para-26):
A bank shall disclose the following contingent liabilities and commitments:
(a) The nature and amount of commitments to extend credit that are irrevocable because they
cannot be withdrawn at the discretion of the bank without the risk of incurring significant penalty
or expense; and
(b) The nature and amount of contingent liabilities and commitments arising from off balance
sheet items including those relating to:
(i) Direct credit substitutes including general guarantees of indebtedness, bank acceptance
guarantees and standby letters of credit serving as financial guarantees for loans and securities;
(ii) Certain transaction-related contingent liabilities including performance bonds, bid bonds,
warranties and standby letters of credit related to particular transactions;
(iii) Short-term self-liquidating trade-related contingent liabilities arising from the movement of
goods, such as documentary credits where the underlying shipment is used as security; and
(iv) Other commitments, note issuance facilities and revolving underwriting facilities.

Comments:
The Off-Balance sheet items disclosed by SJIBL are as follows:

Contingent Liability:
a. Acceptance and Endorsements
b. Letter of Guarantee
c. Irrevocable Letter of Credit
d. Bills for Collection
e. Other Contingent Liabilities

Commitments:
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Shahjalal Islami Bank Ltd. has no commitments.

BAS-30 (Para-30):
An analysis of assets and liabilities into relevant maturity grouping based on remaining periods at
the balance sheet data to the contractual maturity data should be disclosed.

Comments:
Shahjalal Islami Bank Ltd. maintained the section by disclosing the following groups:
-

On demand

Within 1 month

Not more than 3 months

More than 3 months but less than 1 year

More than 1 year but less than 5 years

More than 5 years

BAS-30 (Para-40):
Any significant concentration of assets, liabilities, and off-balance sheet items should be
disclosed.

Comments:
Shahjalal Islami Bank ltd. did not disclose significant concentration of assets, liabilities and offbalance sheet items.

5.1. Findings:
As per understanding about some paragraph of rules and regulations of BAS-1 and BAS-30 and
the financial statements of SJIBL for the year 2012, the following may be cited as the major
findings of the report:
1. In order to report Bangladesh Bank, Shahjalal Islami Bank Ltd. follows almost all the
paras observed (paras-99, 108, & 110) of BAS-1 and (paras-9, 10, 19, 24, 25, 26, 3 0, &
40) of BAS-30.

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2. Shahjalal Islami Bank gives a satisfied number of items in disclosing accounting policies
given as notes to financial statements.
3. SJIBL follows the minimum requirement for balance sheet items according to BAS-30
(Para-19) but the names of the headings are slightly different from the requirements.
4. In para-24 of BAS-30, they said an organization should provide fair values of the
financial assets and financial liabilities.
5. Shahjalal Islami Bank disclosed off-balance sheet contingencies items according to BAS30 (Para-26) but it has no commitments items.
6. Shajala Islami Bank disclosed assets and liabilities into relevant maturity grouping based
on remaining periods according to BAS-30 (Para-30).
7. Shahjalal Islami Bank ltd. did not disclose significant concentration of assets, liabilities
and off-balance sheet items according to Para-40 of BAS-30.

6.1. Recommendation:
From the above findings and analysis it can be said that Bangladesh Bank has tried to established
and follow the BASs and BFRSs adapted by ICAB. Therefore, to observe under the rules and
regulations of BAS-1 and BAS-30, Shahjalal Islami Bank Ltd. has some non-compliance in
preparing the financial statements. Since the maximum important parts are applied and others can

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easily be applied. As a best corporate institution they should follow this non-compliance in
preparing the financial statement that recommended as below:
1. Shahjalal Islami Bank Ltd. should give all notes to financial statements such as: assets
acquired lease etc.
2. In the financial statement of SJIBL, they do not provide the fair values of financial assets
and financial liabilities. So as a best corporate institution, they should provide the fair
value of financial assets and financial liabilities clearly that will be helpful for the people
to understand.
3. Shahjalal Islami Bank ltd. should disclose significant concentration of assets, liabilities
and off-balance sheet items according to Para-40 of BAS-30.

6.2. Conclusion:
Shahjalal Islami Bank Limited is a leading Private Islami bank in Bangladesh with superior
customer bases that are loyal, faithful, worthy toward the bank. The service provided by the
young energetic officials of the Shahjalal Islami Bank Limited is very satisfactory. As an Islami

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Bank, Shahjalal Islami Bank Limited has to follow the rules of Bangladesh Bank despite the fact
that these rules sometime restrict the foreign business to some extent. The Bank's drive towards
market leadership as well as quality in choosing business will continue in the coming years
although competition is intensified with the opening of more financial institutions. The Bank is
optimistic that the volume of business will increase in future through pragmatic and market
policies.
BASs or BFRSs are very important to all organizations. In order to report Bangladesh Bank
Shahjalal Islami Bank follows paras that are observed of BAS-1 (para-99, 106, 108, & 110) and
BAS-30 (Para-9, 10,19, 24, 25, 26, 30, & 40).But in some cases SJIBL are ignored some rules and
regulations. So, as a best corporate institution, SJIBL should comply of the observed rules and
regulations in preparing the financial statements if SJIBL for the year 2012.

Bibliography:

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 Bangladesh Accounting Standard

SJIBL Web Site [www.shahjalabank.com.bd]
Annual Report of Shahjalal Islami Bank Ltd.-2012
www.google.com

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