Financial Statement Analysis as per BAS of

Islami Bank Bangladesh Limited

Course Code: F-504

Course Title: Financial Accounting and Reporting

Submitted to
M. Salauddin Chowdhury
Associate Professor
Department of Finance
Faculty of Business Studies

Date of Submission: 27 th December,2016

Department of Finance
Faculty of Business Studies
University of Dhaka
Financial Performance Evaluation of Beximco
Pharmaceuticals Limited

Course Code: F-504

Course Title: Financial Accounting and Reporting

Submitted by

MBA (Evening)

Date of Submission: 27 th December,2016

Department of Finance
Faculty of Business Studies
University of Dhaka
Letter of Transmittal

M Salauddin Chowdhury
Associate Professor
Department of Finance
University of Dhaka
Subject: Submission of Term Paper

Dear Sir,
With due Respect, we would like to submit our term paper on Financial Statement
Analysis as per BAS of Islami Bank Bangladesh Limited. We have completed our term
paper as a part of the course requirement of MBA program under your supervision. It has
been a worthwhile experience for us undertaking such a report work to get exposure to
the real life of a manufacturing organization. We are grateful for your guidelines and
directions. We tried our best to prepare this paper in consistence with the optimal
standard under your valuable direction.
Hereby, we hope that you would be kind and generous enough to accept our term paper
and oblige thereby. We will be glad if you kindly accept this report. It will be our
pleasure to answer any clarification regarding this report.

Sincerely Yours,

i
Acknowledgement

First of all, I would like to thank the Almighty Allah for giving us the ability to complete
our Term Paper on time.
This paper is titled " Financial Statement Analysis as per BAS of Islami Bank
Bangladesh Limited " is prepared to fulfil the requirement of our Financial Accounting
and Reporting course.
I would like to thank our honorable teacher M. Salauddin Chowdhury, Associate
Professor, Department of Finance, Faculty of Business Studies, University of Dhaka, for
supporting us to complete out Term Paper.
Then I would like to thank our group members who have been contributed to the report.
Finally, I want to thank and show my deepest gratitude to our parents for their
encouragement.

ii
Executive Summary

This term paper provides an analysis of last year financial statement as per BAS of
Islami Bank Bangladesh Ltd. In this report, maximum data collected from secondary
sources. The result of the study shows that IBBL is performing well.

Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in
commercial banking business based on Islamic Shari'ah with 63.09% foreign
shareholding having largest branch network ( total 316 Branches) among the private
sector Banks in Bangladesh. It was established on the 13th March 1983 as the first
Islamic Bank in the South East Asia.

It is listed with Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd.
Authorized Capital of the Bank is Tk. 20,000.00 Million and Paid-up Capital is Tk.
16,099.90 Million having 33,686 shareholders as on 31st December 2015.

IBBL has been selected as the only Bank from Bangladesh in top 1000 banks in the
world by a UK based century old financial magazine, 'The Banker' published the list in
its July 2012 issue. The institute of Chartered Accountants of Bangladesh (ICAB)
awarded IBBL the first prize of SARRC Anniversary Award for Corporate Governance.

South Asian Federation of Accountants (SAFA) awarded IBBL as joint Winner in the
Corporate Governance Disclosure Award-2010. The Global Finance, a reputed U.S.A.
based quarterly Financial Magazine, awarded IBBL as the best Islamic Financial
Institution of the country for the years 2008, 2009, 2010 & 2011. The Global Finance
also awarded IBBL as the best bank of the country for the year 1999, 2000, 2004 and
2005.

The Bank provides a broad range of financial services to its customers and corporate
clients in retail banking, corporate banking and international trade.Banking sector of
Bangladesh is going to face new challenges. IBBL has to be aware of those issues to
become a leading bank in the banking sector.

iii
 Table of Contents

Letter of Transmittal i

Acknowledgement ii

Executive Summary iii

CHAPTER ONE : INTRODUCTION 3

1.1 Introduction 4

1.2 Organization at a glance 5

1.3 Vision of IBBL 5

1.4 Mission of IBBL 6

1.5 Core Values of IBBL 6

1.6 Commitments Error! Bookmark not defined.

1.7 Strategic Objectives 7

1.8 Organizational Organogram 7

CHAPTER TWO : OVERVIEW 9

2.1 Overview 10

2.2 Objectives of the report 11

2.3 Methodology of the Report 11

2.3 Scope of the report 13

2.4 Limitations of the report 13

CHAPTER THREE : FINANCIAL STATEMENT

CHAPTER FOUR : ACCOUNTING POLICY
CHAPTER FIVE : FINDINGS AND ANALYSIS ERROR! BOOKMARK NOT DEFINED.

3.1 Ratio analysis Error! Bookmark not defined.

3.2 General Analysis Error! Bookmark not defined.

3.3 Findings: Error! Bookmark not defined.

CHAPTER SIX : RECOMMENDATIONS AND CONCLUSIONS ERROR! BOOKMARK

NOT DEFINED.

4.1 Recommendations Error! Bookmark not defined.

4.2 Conclusion 30
REFERENCES 31

Page 2 of 27
Chapter One : Introduction

Page 3 of 27
1.1 Introduction

IBBL is committed to provide banking service that is purely based on Islamic

Shariah, transparent and efficient.IIslamic banking is a system of financial
intermediation that avoids receipt and payment of interest in its transactions
and conducts its operations in a way that it helps achieve the jjk of an Islamic
economy. Alternatively, this is a banking system whose operation is based on
Islamic principles of transactions of which profit and loss sharing (PLS) is a
major feature, ensuring justice and equity in the economy. That is why
Islamic banks are often known as PLS-banks. The primary objective of
establishing Islamic banks all over the world is to promote, foster and develop
the application of Islamic principles in the business sector.
In August 1974, Bangladesh signed the Charter of Islamic Development Bank
and committed itself to reorganise its economic and financial system as per
Islamic Shariah. In January 1981, Late President Ziaur Rahman while
addressing the 3rd Islamic Summit Conference held at Makkah and Taif
suggested, ''The Islamic countries should develop a separate banking system
of their own in order to facilitate their trade and commerce.'' Islami Bank
Bangladesh Limited (IBBL) is considered to be the first interest free bank in
Southeast Asia. It was incorporated on 13-03-1983 as a Public Company with
limited liability under the companies Act 1913. The bank began operations on
March 30, 1983.

IBBL is a joint venture multinational Bank with 63.92% of equity being

contributed by the Islamic Development Bank and financial institutions like-
Al-Rajhi Company for Currency Exchange and Commerce, Saudi Arabia,
Kuwait Finance House, Kuwait, Jordan Islamic Bank, Jordan, Islamic
Investment and Exchange Corporation, Qatar, Bahrain Islamic Bank, Bahrain,
Islamic Banking System International Holding S. A., Luxembourg, Dubai
Islamic Bank, Dubai, Public Institution for Social Security, Kuwait Ministry
of Awqaf and Islamic Affairs, Kuwait and Ministry of Justice, Department of
Minors Affairs, Kuwait. In addition, two eminent personalities of Saudi
Arabia namely, Fouad Abdul Hameed Al-Khateeb and Ahmed Salah
Page 4 of 27
Jamjoom are also the sponsors of IBBL. The total number of branches as of
December 2001 stood at 121. The authorized capital of the bank is Tk. 500
million and subscribed capital is Tk. 160 million.

1.2 Organization at a glance

Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company

engaged in commercial banking business based on Islamic Shari'ah with
63.09% foreign shareholding having largest branch network ( total 312
Branches) among the private sector Banks in Bangladesh. It was established
on the 13th March 1983 as the first Islamic Bank in the South East Asia.

It is listed with Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange
Ltd. Authorized Capital of the Bank is Tk. 20,000.00 Million and Paid-up
Capital is Tk. 16,099.90 Million having 33,686 shareholders as on 31st
December 2015

1.3 Vision of IBBL

The vision of IBBL is to always strive to achieve superior financial

performance, be considered a leading Islamic Bank by reputation and
performance.

To establish and maintain the modern banking techniques, to ensure

soundness and development of the financial system based on Islamic
principles and to become the strong and efficient organization with highly
motivated professional, working for the benefit of people, based upon
accountability, transparency and integrity in order to ensure stability of
financial systems.

Page 5 of 27
 To encourage savings in the form of direct investment.

To encourage investment particularly in projects which are more likely to

lead to higher employment.

1.4 Mission of IBBL

To establish Islamic Banking through the introduction of a welfare oriented

banking system and also ensure equity and justice in the field of all economic
activities, achieve balanced growth and equitable development in through
diversified investment operations particularly in the priority sectors and less
developed areas of the country. To encourage socio-economic upliftment and
financial services to the loss-income community particularly in the rural areas.

1.5 Core Values of IBBL

Trust in Almighty Allah

Strict observance of Islamic Shariah
Highest standard of Honesty, Integrity & Morale
Welfare Banking
Equity and Justice
Environmental Consciousness
Personalized Service
Adoption of Changed Technology
Proper Delegation, Transparency & Accountability

1.6 Commitments

To Shariah
To the Regulators
To the Shareholders

Page 6 of 27
 To the Community
To the Customers
To the Employees
To other stakeholders
To Environment

1.7 Strategic Objectives

To ensure customers' satisfaction.

To ensure welfare oriented banking.
To establish a set of managerial succession and adopting technological
changes to ensure successful development of an Islamic Bank as a stable
financial institution.
To prioritize the clients welfare.
To emerge as a healthier & stronger bank at the top of the banking sector
and continue stable positions in ratings, based on the volume of quality
assets.
To ensure diversification by Sector, Size, Economic purpose &
geographical location wise Investment and expansion need based Retail and
SME/Women entrepreneur financing.
To invest in the thrust and priority sectors of the economy.
To strive hard to become a employer of choice and nurturing & developing
talent in a performance-driven culture.
To pay more importance in human resources as well as financial capital.
To ensure lucrative career path, attractive facilities and excellent working
environment.
To ensure zero tolerance on negligence in compliance issues both shariah
and regulatory issues.
To train & develop human resources continuously & provide adequate
logistics to satisfy customers need.
To be excellent in serving the cause of least developed community and area.
To motivate team members to take the ownership of every job.
To ensure developemnt of devoted and satisfied human resources.
To encourage sound and pro-active future generation.
To achieve global standard.

Page 7 of 27
 To strengthen corporate culture.
To ensure Corporate Social Responsibilities (CSR) through all activities.
To promote using solar energy and green banking culture and echological
balancing.

1.8 Organizational Organogram

Page 8 of 27
Chapter Two : Overview

Page 9 of 27
2.1 Overview

Pharmaceutical sector is one of the fast growing and most developed scientific
sector in Bangladesh. There are about 250 registered pharmaceutical
companies operating in Bangladesh pharmaceutical industry. Company
depends on those physicians prescription, because doctors are prescribing
some medicines and accordingly patients follows the doctors instruction.
Sometime chemists shops also influence the patients to take medicine as their
choice. So, the pharmaceutical companies have to know about their target
customers behavior and market condition to develop marketing strategies
based on this situation. Beximco Pharmaceutical Ltd is the manufacturer and
marketer of pharmaceutical product under chemical divisions of Beximco
Group. Beximco Pharmaceuticals is one of the leading pharmaceutical
companies in Bangladesh. It also is one of the biggest suppliers of
pharmaceutical product of any Bangladeshi based company. Financial
performance measurement is very important for the institutions because it
indicates the organizations performance. Thats mean how the organization is
running. Besides that, it also helps to take the future decision and action. By
using financial position and theoretical knowledge, we are able to understand
the field collecting data from their website & annual report, which help us to
cope up the situation. Now a days pharmaceuticals company takes a great
place in this country, the functions of such institutions are relatively new and
challenging to compare. Producing drugs is one of the main concentrations of
these firms. After studying Statement of Financial Position, Statement of
Profit or Loss and Other Comprehensive Income, Statement of Changes in
Equity, Statement of Cash Flows, Ratio Analysis, we can know the actual
financial position in Bangladesh. To analyze the financial statement analysis
of Beximco Pharmaceutical Ltd regarding its problems and prospects, current
investment situations, calculating procedure of Operating Cash Flow (OCF),
Project Cash Flow and Net Present Value (NPV), the positive and threatening
aspects of investing in BPL shares, recent year statistics, we can know the
past and current financial position of Beximco Pharmaceuticals in the market.

Page 10 of 27
2.2 Objectives of the report

To give a brief overview on Beximco Pharmaceuticals Limited

The report is meant to relate the financial statement analysis theories
learnt in class to the context of a real world scenario to understand
their practical implications.
Prediction of profitability and growth prospects
To analysis financial performance of Beximco Pharmaceuticals and to
bring out the position in the market
After knowing past performance, it is able to predict the future
performance. It is important to know operating expenses, net income,
cash flows, project cash flow, and return on investment, net present
value.
To conduct an equity analysis on Beximco Pharmaceuticals Limited
and to justify the reasons behind the over or under valuation of its
stock

2.3 Methodology of the Report

Methodology implies more than simply the methods used to collect data. This
reports mainly works with secondary data source due to lack of availability of
primary data source.
Types of Data
To prepare this report all the necessary information collected from both
primary and secondary sources of data.
Primary data
Secondary data

The primary sources of Data

Page 11 of 27
In the preparation of this report, data was collected from different primary
sources. The study requires a systematic procedure from selection of the topic
to final report preparation. This overall process of methodology is given in the
flowchart below-

Selection of the topic

Identifying data sources

Collection of data

Classification, analysis, interpretation and presentation of data

Findings of the study

Final report presentaion

Figure 2.1 : Methodology

The secondary sources of Data

In order to prepare this report, only secondary data has been used. The sources
that has been used to collect necessary data is given below:
Collection of Annual Reports of Beximco Pharmaceuticals Limited as
well as financial highlights of the company
Websites of Beximco Pharmaceuticals Limited
Website of Dhaka Stock Exchange (DSE)
Different journals and articles on pharmaceuticals industry of
Bangladesh and Beximco Pharmaceuticals Limited
Different websites

Page 12 of 27
Data Collection Process
Information collected to furnish this report is both from primary and
secondary sources of data. Many of the data and information were collected
from annual reports, website while doing work. Information and data
regarding Overview of Beximco Pharmaceuticals Limited, Ratio Analysis,
that were collected from secondary sources like: Annual Reports, Website of
Beximco Pharmaceuticals Limited, different journals and articles on
pharmaceuticals industry of Bangladesh and Beximco Pharmaceuticals
Limited. By using data, we can know the financial position and performance
of a company.

2.4 Scope of the report

This report gives a brief idea on Beximco Pharmaceuticals Limited and its
operation. This report mainly focuses on the financial performance of
Beximco Pharmaceuticals Limited and the analysis is made through reviewing
the financial statements of the company and focused on the income statement,
balance sheet, and cash flow statement. In addition, one key area of financial
analysis involves extrapolating the companys past performance into an
estimate of the companys future performance. The most common ways of
analyzing financial data are to calculate ratios from the data to compare
against the companys own historical performance. It gives an idea of the
Beximco pharmaceuticals industry of Bangladesh.

2.5 Limitations of the report

The main constrain of the study was insufficiency of information,

which was required for the study.
Due to time limitation many of the aspects could not be discussed in
the present report.
Ratios alone are not adequate for proper conclusions.
Lack of proper standards.

Page 13 of 27
 All the comments made, conclusions reached and suggestions for
possible improvement provided are purely based on my level of
understanding, knowledge and my way of interpreting a particular
statement.
Beximco Pharmaceutical Limited follows a policy of not disclosing all
the information needed to prepare my report for obvious reason.
Because of the lack of information, we have to make some
assumptions that may cause few errors or personal mistakes in the
report.

With all of this limitations weve tried our best to make this report as best as
possible.

Page 14 of 27
Chapter Three : Financial
Statement

Page 15 of 27
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Balance Sheet
As at 31 December 2015

31.12.2015 31.12.2014
Particulars Notes
Taka Taka

Property and Assets

Cash in hand 7(a) 55,256,081,820 46,219,359,839
Cash in hand (including foreign currency) 7(a)(i) 8,625,867,409 7,696,844,962
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 7(a)(ii) 46,630,214,411 38,522,514,877
Balance with other banks & financial institutions 8(a) 25,644,591,295 23,615,218,198
In Bangladesh 8(a)(i) 23,974,968,279 21,205,895,651
Outside Bangladesh 8(a)(ii) 1,669,623,016 2,409,322,547
Placement with banks & other financial institutions 9.0 3,000,000,000 2,000,000,000
Investments in shares & securities 10(a) 98,397,090,217 99,677,400,553
Government 10(a)(i) 95,482,757,770 97,435,777,770
Others 10(a)(ii) 2,914,332,447 2,241,622,783
Investments 525,104,502,716 460,385,467,466
General investments etc. 11.1(a) 488,699,301,422 433,004,101,205
Bills purchased & discounted 11.2(a) 36,405,201,294 27,381,366,261
Fixed assets including premises 12(a) 15,838,557,191 15,930,479,589
Other assets 13(a) 2,527,292,915 3,751,558,076
Non - banking assets - -
Total property and assets 725,768,116,154 651,579,483,721
Liabilities and Capital
Liabilities
Placement from banks & other financial institutions 14(a) 17,766,330,139 7,657,500,743
Deposits & other accounts 15(a) 614,877,266,437 559,713,580,029
Mudaraba savings deposits 211,327,625,463 183,125,942,453
Mudaraba term deposits 179,234,913,887 169,288,934,029
Other mudaraba deposits 162,097,188,257 149,300,904,194
Al- wadeeah current and other deposit accounts 57,126,253,285 54,347,905,252
Bills payable 5,091,285,545 3,649,894,101
Mudaraba perpetual bond 16.0 3,000,000,000 3,000,000,000
Other liabilities 17(a) 42,521,807,091 34,220,763,730
Deferred tax liabilities 18(a) 310,066,332 393,276,062
Total liabilities 678,475,469,999 604,985,120,564
Capital/shareholders equity 47,292,646,155 46,594,363,157
Paid - up capital 19.0 16,099,906,680 16,099,906,680
Statutory reserve 21.0 16,099,906,680 16,099,906,680
Other reserves 22.0 11,779,818,313 12,007,818,774
Retained earnings 40(a) 3,312,951,535 2,386,670,563
Non-controlling interest 40(b) 62,947 60,460
Total liabilities & shareholders equity 725,768,116,154 651,579,483,721

Page 16 of 27
 Islami Bank Bangladesh Limited and its
Subsidiaries
Consolidated Balance Sheet
As at 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
Taka Taka

Off-balance sheet items

Contingent liabilities
Acceptances & endorsements - -
Letters of guarantee 23.0 10,629,688,357 8,839,985,590
Irrevocable letters of credit (including back to back bills) 115,229,781,408 99,102,373,685
Bills for collection 7,496,874,228 4,853,286,313
Other contingent liabilities 23,581,701 23,581,701
Total 133,379,925,694 112,819,227,289
Other commitments
Documentary credits, short term and trade related transactions - -
Forward assets purchased and forward deposits placed - -
Undrawn note issuance, revolving and underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total - -
Total off-balance sheet items including contingent liabilities 133,379,925,694 112,819,227,289

Page 17 of 27
 Islami Bank Bangladesh Limited and its
Subsidiaries
Consolidated Profit & Loss
Account
For the year ended 31 December 2015
2015 2014
Particulars Notes
Taka Taka
Operating income
Investment income 24(a) 48,019,361,677 49,109,956,379
Profit paid on mudaraba deposits 25(a) (28,711,803,286) (30,592,937,508)
Net investment income 19,307,558,391 18,517,018,871
Income from investments in shares & securities 26(a) 815,154,861 1,847,241,058
Commission, exchange & brokerage income 27(a) 6,212,914,002 5,883,332,280
Other operating income 28(a) 1,729,427,055 1,223,373,942
Total operating income 28,065,054,309 27,470,966,151
Operating expenses
Salary & allowances 29(a) 8,884,178,676 8,197,568,114
Rent, taxes, insurances, electricity etc. 30(a) 1,147,142,738 1,000,045,580
Legal expenses 31(a) 44,189,468 16,206,043
Postage, stamps and telecommunication etc. 32(a) 43,895,740 47,306,134
Stationery, printing and advertisement etc. 33(a) 319,978,205 317,612,092
Chief executives salary & fees 34.0 8,400,000 8,400,000
Directors fees & expenses 35(a) 12,640,292 13,183,767
Shariah supervisory committees fees & expenses 36.0 3,730,249 2,562,124
Auditors fees 37(a) 2,530,000 2,344,118
Charges on investment losses - -
Depreciation and repair to banks assets 38(a) 961,943,629 866,506,137
Zakat expenses 421,312,940 425,985,241
Other expenses 39(a) 1,649,966,254 1,205,550,108
Total operating expenses 13,499,908,191 12,103,269,458
Profit/ (loss) before provision 14,565,146,118 15,367,696,693
Provision for investments & off- balance sheet exposures 17.1.4 5,393,314,666 4,670,784,729
Provision for diminution in value of investments in shares 17.2(a) 27,069,117 36,184,361
Other provisions 17.4 99,232,276 117,049,502
Total provision 5,519,616,059 4,824,018,592
Total profit/(loss) before taxes 9,045,530,059 10,543,678,101
Provision for taxation for the period 5,895,163,334 6,562,294,743
Current tax 17.7(a) 5,978,373,064 6,367,368,688
Deferred tax 18(b) (83,209,730) 194,926,055
Net profit/ (loss) after tax 3,150,366,725 3,981,383,358
Net profit after tax attributable to: 3,150,366,725 3,981,383,358
Equity holders of IBBL 3,150,364,238 3,981,381,780
Non-controlling interest 40(b) 2,487 1,578
Retained earnings from previous year 2,386,670,563 2,637,858,071
Add: Net profit after tax (attributable to equity holders of IBBL) 3,150,364,238 3,981,381,780
Profit available for appropriation 5,537,034,801 6,619,239,851
Appropriation: 5,537,034,801 6,619,239,851
Statutory reserve 21.0 - 1,461,293,053
General reserve 22.1 (190,902,736) 136,746,051
Dividend 40.0 2,414,986,002 2,634,530,184
Retained earnings 40(a) 3,312,951,535 2,386,670,563
Consolidated earnings per share 42(a) 1.96 2.47

Page 18 of 27
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Cash Flow Statement
For the year ended 31 December 2015
2015 2014
Particulars
Taka Taka
Cash flows from operating activities
Investment income 47,915,719,537 49,004,594,914
Profit paid on mudaraba deposits (29,563,685,828) (31,722,869,528)
Income/ dividend receipt from investments in shares & 2,063,232,961 1,870,699,544
securities Fees & commission receipt in cash 6,212,914,002 5,883,332,280
Recovery from written off investments 39,909,335 39,350,296
Payments to employees (8,561,139,222) (8,100,074,962)
Cash payments to (326,787,585) (326,348,124)
suppliers Income tax paid (9,203,786,715) (5,648,297,930)
Receipts from other operating activities 2,013,322,283 1,213,407,361
Payments for other operating activities (2,289,395,100) (2,594,835,403)
(i) Operating profit before changes in operating 8,300,303,668 9,618,958,448
assets Changes in operating assets and liabilities
Increase/(decrease) of statutory deposits - -
(Increase)/decrease of net trading securities - -
(Increase)/decrease of placement to other banks - -
(Increase)/decrease of investments to customers (61,629,035,250) (57,190,662,489)
(Increase)/decrease of other assets Increase/(decrease) 1,189,635,579 1,013,868,776
of placement from other banks Increase/(decrease) of 10,108,829,396 7,657,500,743
deposits from other banks Increase/(decrease) of 153,938,891 (193,547,298)
deposits received from customers 54,025,872,754 86,764,748,509
Increase/(decrease) of other liabilities account of - -
customers Increase/(decrease) of trading liabilities - -
Increase/(decrease) of other liabilities 2,075,425,298 2,872,167,220
(ii) Cash flows from operating assets and liabilities 5,924,666,668 40,924,075,461
Net cash flows from operating activities (A)=(i+ii) 14,224,970,336 50,543,033,909

Cash flows from investing activities 45(a)

Proceeds from sale of securities 1,335,573,339 1,175,692,382
Payment for purchase of securities/BGIIB (117,057,781) (34,768,348,787)
Placement to Islamic Refinance Fund Account (1,000,000,000) (2,000,000,000)
Payment for purchase of securities/membership - -
Purchase/sale of property, plants & equipments (960,327,089) (941,612,274)
Purchase/sale of subsidiaries - -
Net Cash flows from investing activities (B) (741,811,531) (36,534,268,679)

Cash flows from financing activities

Receipts from issue of debt instruments - -
Payment for redemption of debt - -
instruments Receipts from issuing ordinary - -
share/ rights share Dividend paid in Cash (2,414,986,002) (1,170,902,304)
Net cash flows from financing activities (C) (2,414,986,002) (1,170,902,304)
Net increase/(decrease) in cash (A+B+C) 11,068,172,803 12,837,862,926
Add/(less): effects of exchange rate changes on cash & cash (2,077,725) 5,074,713
equivalent Add: cash & cash equivalents at beginning of the year 69,834,578,037 56,991,640,398
Cash & cash equivalents at the end of the year 80,900,673,115 69,834,578,037

Note

Page 19 of 27
 L
i Consolidated Statement of Changes in Equity
For the year ended 31 December 2015
m (Amount in Taka)

i
Particulars Paid-up capital
Share pre-
mium
Statutory
reserve
General/ other
reserves *
Assets revalua-
tion reserve
Revaluation
reserve of
Retained
earnings
Non-controlling
interest
Total

1
t 2 3 4 5 6
securities
7 8 9 10(2+3+4+5+6+7+8+9)
Balance as at 01 January 2015 e 16,099,906,680 1,989,633 16,099,906,680 425,357,821 11,498,971,320 81,500,000 2,386,670,563 60,460 46,594,363,157
Changes in accounting policy restated balance - - - - - - - -
d
Surplus/ (deficit) on account of revaluation of properties - - - - - - - -
Surplus/ (deficit) on account of revaluation of investments - - - - - (35,020,000) - - (35,020,000)
(shares & securities)
Currency translation differences a - - - (2,077,725) - - - (2,077,725)
Net gain and losses not recognized in the income statement - - - - - - - - -
Net profit for the period n - - - - - - 3,150,364,238 2,487 3,150,366,725
Transfer to (from) reserve
Dividend:
d - -
-
- (190,902,736)
-
-
-
-
-
190,902,736
-
-
-
-
-
Bonus shares - - - - - - - - -
Cash dividend
Issue of share capital
i -
-
-
-
-
-
-
-
-
-
- (2,414,986,002)
- -
-
-
(2,414,986,002)
-

t
Total shareholders equity as on 31 December 2015 16,099,906,680 1,989,633 16,099,906,680 232,377,360 11,498,971,320 46,480,000 3,312,951,535 62,947 47,292,646,155
Add: Mudaraba perpetual bond - - - - - - - 3,000,000,000
s
Add: General provision for unclassified investments and off- - - - 4,540,047,240 - - - - 4,540,047,240
balance sheet items (Note-2.1.3)
Adjustment for currency translation differences - - - (4,314,759) - - - (4,314,759)

S
Less: Assets revaluation reserve (Note-2.1.3) - - - - (6,899,382,792) - - - (6,899,382,792)
Less: Revaluation reserve of securities (Note-2.1.3) - - - - (13,880,000) - - (13,880,000)
u
Total equity as on 31 December 2015 16,099,906,68 1,989,633 16,099,906,680 4,768,109,841 4,599,588,528 32,600,000 3,312,951,535 62,947 47,915,115,844

b
*Note : General / other reserves
Particulrs s 01.01.2015 01.01.2014
General reserve
Dividend equalization account
i 377,159,532
32,000,000
250,219,286
32,000,000
Currency translation differences d 6,392,484 1,317,771
Total 415,552,016 283,537,057

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 I Islami Bank Bangladesh Limited and its Subsidiaries
s Consolidated Statement of Changes in Equity
l For the year ended 31 December 2014
(Amount in Taka)
a Share Statutory General/ other
Assets Revaluation
Retained
Non-
Particulars Paid-up capital revaluation reserve of controlling Total
m premium reserve reserves *
reserve securities
earnings
interest
1 2 3 4 5 6 7 8 9 10(2+3+4+5+6+7+8+9)
Balance as at 01 January 2014
i 14,636,278,800 1,989,633 14,638,613,627 283,537,057 11,498,971,320 62,600,000 2,637,858,071 61,332 43,759,909,840
Changes in accounting policy restated balance - - - - - - - -
Surplus/ (deficit) on account of revaluation of properties - - - - - - - -
B
Surplus/ (deficit) on account of revaluation of investments (shares & securities) - - - - - 18,900,000 - - 18,900,000
Currency translation differences - - - 5,074,713 - - - 5,074,713
a
Net gain and losses not recognized in the income statement - - - - - - - - -
Net profit for the period
Transfer to reserve
n -
-
-
-
-
1,461,293,053 136,746,051
- -
-
-
-
3,981,381,780
(1,598,039,104)
1,578
-
3,981,383,358
-
Dividend: k - - - - - - -
Bonus shares 1,463,627,880 - - - - - (1,463,627,880) - -
Cash dividend - - - - - - (1,170,902,304) (2,450) (1,170,904,754)
Issue of share capital
B - - - - - - - - -
Total shareholders equity as on 31 December 2014 16,099,906,680 1,989,633 16,099,906,680 425,357,821 11,498,971,320 81,500,000 2,386,670,563 60,460 46,594,363,157
Add: Mudaraba perpetual bond a - - - - - - - - 3,000,000,000

n
Add: General provision for unclassified investments and off- balance sheet items
Adjustment for currency translation differences
- - - 4,753,680,000
(6,392,484)
- -
-
- - 4,753,680,000
(6,392,484)

g
Less: 50.00% of assets revaluation reserve - - - - (5,749,485,660) - - - (5,749,485,660)
Less: 50.00% of revaluation reserve of securities - - - - - (40,750,000) (40,750,000)
Total equity as on 31 December 2014 l 16,099,906,680 1,989,633 16,099,906,680 5,172,645,337 5,749,485,660 40,750,000 2,386,670,563 60,460 48,551,415,013

a
d
e
s
h

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Chapter Four : Accounting Policy

Page 22 of 27
4.0 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods
presented in the consolidated and separate financial statements of the Bank (together
referred to as financial statements) except provision for investment which have been
changed due to new circular issued by Bangladesh Bank (Note 3.16.1).
Certain comparative amounts in the financial statements have reclassified and rearranged to
conform to the current years presentation.

4.1 Basis of consolidation

4.1.1 Subsidiaries

Subsidiaries are investees controlled by the Parent. The Parent controls an investee if it is
exposed to, or has rights to, variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. The financial
statements of subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
4.1.2 Transactions eliminated on consolidation

Inter-company balances and transactions, and any unrealized income and expenses (except
for foreign currency transaction gains and losses) arising from inter-company transactions
are eliminated in preparing consolidated financial statements. Unrealized losses are
eliminated in the same way as unrealized gains, but only to the extent that there is no
evidence of impairment. The investments in shares of subsidiaries held by the Bank in the
separate financial statements are eliminated against the corresponding share capital of
subsidiaries in the consolidated financial statements.
4.2 Foreign currency transactions

a. Foreign currency transactions

Foreign currency transactions are converted in to equivalent Taka using the ruling exchange
rates on the dates of respective transactions as per BAS-21 The Effects of changes in
Foreign Exchange Rates. Foreign currency balances held in US Dollars are converted into
Taka at weighted average rate of inter-bank market as determined by Bangladesh Bank on
the closing date of every month.

b. Transaction gains and losses

The resulting exchange transaction gains and losses are included in the profit and loss
account.

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4.3 Revenue
4.3.1 Investment income

Income from general investments is accounted for on accrual basis except for investments
under Musharaka, Mudaraba, Bai-Salam, Bai-as-Sarf and Ujarah (Khidmah Card) modes of
Investment where the investment income is accounted for on realization basis. The Bank
does not charge any rent during the gestation period of investment against Hire Purchase
under Shirkatul Melk (HPSM) mode of investment but it fixes the sale price of the assets at
a higher level in such a way to cover its expected rate of return. Such income is recognized
on realization basis.
Profit/Rent/Compensation accrued on Classified Investments are suspended and accounted
for as per circulars issued by Bangladesh Bank in this regard from time to time. At the time
of recovery or regularization of those investments the related income which was suspended
and shown as a liability is taken as investment income as per circulars issued by
Bangladesh Bank. As a result, all the transferred amount to investment income from
suspense during the year has already been included in the investment income of the Bank.
Profit on deposits with other banks & financial institutions is accounted for on accrual
basis.
4.3.2 Income from investment in Bangladesh Government Islamic Investment
Bond (BGIIB) & Islamic Inter-bank Fund Market (IIFM)

Profit from investment in Bangladesh Government Islamic Investment Bond (BGIIB) &
Islamic Inter-bank Fund Market (IIFM) is accounted for on accrual basis.

4.3.3 Dividend income

Dividend income from investments is accounted for when the right to receive income is
established.

4.4 Cash and cash equivalents

Cash and cash equivalents include notes and coins in hand, balances held with Bangladesh
Bank and its agent bank and highly liquid financial assets that are subject to an insignificant
risk of changes in their fair value.
4.5 Investments

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 Investments are stated in the Balance Sheet net off profit receivable and unearned income.
Profit Receivable the amount of unexpired portion of profit charged on murabaha
investment at the time of sale of good/ services to customer/ client.
Unearned Income- the amount of unrealized portion of profit/ value addition of fixed assets
under Hire Purchase Under Shirkatul Melk (HPSM) investment for gestation period.
However, provision for investments are not net-off with investments.

4.6 Fixed assets

4.6.1 Recognition and measurement

Items of fixed assets excluding land and building are measured at cost less accumulated
depreciation and accumulated impairment losses. Land and building is recognized at cost at
the time of acquisition and subsequently measured at revalued amounts which is the fair
value at the time of revaluation done by independent valuer and any surplus on revaluation
is shown as equity component until the disposal of asset, as per BAS 16 Property, Plant &
Equipment and Bangladesh Bank BCD Circular Letter No. 12 & 18 dated 20 April 1993 &
15 June 1993 respectively and BRPD Circular No.10 dated 25 November 2002 & BRPD
Circular No.09 dated 31 December 2008. Deficit arising on subsequent revaluation is
adjusted against the balance in the Revaluation reserve account. Revaluation is carried out
with sufficient regularity to ensure that the carrying amount of assets does not differ
materially from their fair value.

Cost includes expenditures that are directly attributable to the acquisition of assets. The cost
of self-constructed assets includes the following:
- the cost of materials and direct labour;
- any other cost directly attributable to bringing the asset to a working condition for the
intended use;
-when the Companies have an obligation to remove the asset or restore the site, an estimate
of the costs of dismantling and removing the items and restoring the site on which they are
located; and
- capitalized borrowing costs.
Purchased software that is integral to the functionality of the related equipment is
capitalized as part of that equipment.
Any gain or loss on disposal of an item of fixed assets (calculated as the difference between
the net proceeds from disposal and the carrying amount of the item) is recognized in profit
or loss.
4.6.2 Depreciation

Items of fixed assets are depreciated from the date that they are installed and are ready for
use, and in respect of internally constructed assets, from the date that the asset is completed
and ready for use.
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 Depreciation is calculated to write-off the cost/revalued amount of items of fixed assets less
their estimated residual values using either of straight-line (SLM) or reducing balance
method (RBM) over their estimated useful lives and recognized in profit and loss. Land is
not depreciated.
The estimated rate of depreciation for the current and comparative years of fixed assets are
as follows:

Rate
Items Method s
Building Reducing balance 2.50%
10.00
Furniture and fixtures -Do- %
20.00
Mechanical appliances -Do- %
30.00
Books -Do- %
20.00
Motor vehicles Straight-line %
25.00
Computers -Do- %

Depreciation methods, useful lives and residual values are reviewed at each reporting date
and adjusted if appropriate.

4.7 Lease payments

Payments made under operating leases are recognized in profit or loss on a straight-line
basis over the term of the lease.

4.8 Assets revaluation reserve

This represents the difference between the book value and the re-valued amount of
premises (Land and Building) of the Bank as assessed by professional valuers in the year
2000, 2002, 2003, 2004, 2005, 2006, 2009 and 2012 as per guideline issued by Bangladesh
Bank, which was reviewed by the statutory auditors. This reserve is not distributable. To
calculate Capital Adequacy Ratio (CAR), 50% of the same was considered as a component
of supplementary capital as per Bangladesh Bank BRPD Circular No. 24 dated 03 August
2010 upto 2014. However, as per BRPD circular 18 dated December 21, 2014, the
revaluation reserve for fixed assets will gradually be deducted from Tier-2 capital with a
phase in manner starting from 2015. Accordingly, 20% of the revaluation reserve that
qualified for Tier-2 capital has been deducted while calculating eligible capital.

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4.9 Other liabilities

Other liabilities comprise items such as provision for investment, provision for taxes,
profit/rent suspense, accrued expenses, etc. Other liabilities are recognized in the balance
sheet as per guidelines of Bangladesh Bank, Bangladesh Financial Reporting Standards
(BFRS) etc.

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4.1.1 Translation reserve

The activities of OBU is considered as foreign operation due to its different functional
currency other than the non-OBU operation of the Bank. As per BAS/IAS - 21, items of
balance sheet of OBU has been be translated to presentation currency using closing rate
and items of income and expenditure has been translated to presentation currency using
spot rate prevailing on the date of actual transaction, otherwise average rate has been used.
Due to the above translation using two rates the arising differences have been kept as
translation reserve.

4.1.2 Retained earnings/Net profit transferred to main operation

As on 31 December the net income in USD/foreign currency of OBU is transferred to

main operation of the Bank at exchange rate prevailing on that date.
4.1.3 Cash flow statement
Cash flow statement has been prepared as per BRPD Circular No. 14, dated June 25,
2003 issued by the Banking Regulation and Policy Department of Bangladesh Bank.
4.1.4 Reporting period
The financial statements cover from 01 January 2015 to 31 December 2015.

4.2 Assets and basis of their valuation

4.2.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held
with Bangladesh Bank and highly liquid financial assets which are subject to insignificant
risk of changes in their fair value, and are used by the units management for its short-
term commitments.

4.2.2 Investments
Investment of OBU are stated in the balance sheet on net basis. Profit is calculated on
daily product basis but charged and account for on realisation/cash basis.

4.2.3 Allocation of common expenses

Page 28 of 27
 Establishment expenses in the nature of rent, rates, taxes, management expenses,
printing and stationery, electricity, postage, stamps, telecommunication and audit
fees etc. have not been separately accounted for in the financial statements, but staff
costs (salaries and allowances) are separately accounted for OBU.

4.2.4 Profit paid on mudaraba deposits/placement

OBU obtains fund under placement from abroad (different foreign Banks) and OBUs of
different Banks in Bangladesh (BD) based on Mudaraba Agreement and pays
proportionate amount of investment income earned through deploying these fund as
profit. In some cases OBU pays profit at provisional rate in advance which is shown as
Prepaid profit on placement under other assets.

4.2.5 Placement from banks & other financial institutions

Off-shore Banking Units (OBUs) of IBBL obtains fund under placement from its Head
Office (Treasury Division), abroad (different foreign Banks) and OBUs of different
Banks in Bangladesh (BD) as per Bangladesh Bank Letter No.BCD(P)744(27)/1416,
dated 17 December 1985.

Page 29 of 27
4.2 Conclusion

Beximco Pharmaceuticals Ltd is one of the largest Pharmaceuticals Companies in Bangladesh.

Now they are expanding their business to other countries. BPL has already developed good
image and goodwill among its clients by offering excellent services. By overcoming all these
obstacles BPL has achieved a very good position in this competitive market. As reward it has
achieved many national and international awards. From the Analysis of the financial statements
we saw BPL is good at cost minimization, Credit collection, asset maximization, Profit
maximization, EPS but still they need to careful and efficient in some sectors which will help

Page 30 of 27
them to hold their position in the market. Overall their performance is good. They need to be
more efficient and effective in operation so that they can reach the Highest Summit of
Pharmaceuticals market.

References
Beximco Pharmaceuticals Ltd 2015, Annual Report of 2015, Beximco Pharmaceuticals Ltd,
Bangladesh
Beximco Pharmaceuticals Ltd 2014, Annual Report of 2014, Beximco Pharmaceuticals Ltd,
Bangladesh
Beximco Pharmaceuticals Ltd 2013, Annual Report of 2013, Beximco Pharmaceuticals Ltd,
Bangladesh
Page 31 of 27
Beximco Pharmaceuticals Limited: <http://www.beximco-pharma.com/>

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