Auditors’ Report

To the Shareholders of Janata Bank Limited

 

We have audited the accompanying balance sheet of Janata Bank Ltd. ("the bank") as of 31 December 2007 and the related profit and loss account and statement of changes in equity and cash flow statement for the period from 21st  May 2007 to 31st December 2007,as more fully described in Note 1.1 to financial statements, Janata Bank Limited, was incorporated on 21 May 2007 and took over the business and assets and liabilities of erstwhile Janata Bank through a vendors agreement with effect from 1 July 2007. 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.

 

Scope:

Except as discussed in the following paragraphs, 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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.

 

Our audit revealed that:

 

1.      The bank has determined the required provision for Super Annuation Fund (SAF) as of 31 December 2007 at Taka 12,743.3 million against which there exist a provision of Taka 13,411.9 million. On verification, we observe that out of the provision made, Taka 2,422.46 million has so far been transferred to Janata Bank Employees Super Annuation Fund leaving a balance amount of Taka 10,320.84 million yet to be transferred to the said fund.

 

2.      Adequate capital adequacy Ratio of the bank has not been maintained, as required under section 13(2) of Bank Companies Act.1991 and BRPD Circular # 05 dated 14 May 2007. According to the said circular there remains an adjusted capital shortfall of Taka 3,302.36 million as of 31 December 2007.

 

Opinion:

In our opinion, except for the effect of the matters as discussed in the preceding paragraphs, the financial statements referred to above which have been prepared in the format prescribed by Bangladesh Bank give a true and fair view of the state of the banks affairs as of 31 December 2007 and of the results of its operations and its cash flows for the period then ended. The financial statements comply with the Bank Companies Act 1991 and the rules and regulations issued by Bangladesh Bank.

 

 

We further 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 the branches not visited by us;

 

   iii.      the bank’s balance sheet and profit and loss account dealt with by the report are in agreement with books of account and returns except for the provisions and adjustments made during the period for which necessary accounting entries have been passed as of 31 December 2007;

 

   iv.      the financial position of the bank as of 31 December 2007 and the profit for the period then ended have been properly reflected  in the financial statements; the  financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS) following the generally accepted accounting principles;

 

      v.      the financial statements have been drawn up in conformity with the Bank Companies Act, 1991 and in accordance with accounting rules and regulations issued by the Bangladesh Bank;

 

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

 

 vii.      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;

 

viii.      the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements;

 

    ix.      the information and explanations required by us have been received and found satisfactory;

 

      x.      as far as it was revealed from our test checks, the existing rules and regulations for loan sanctioning and disbursements have been followed;

 

    xi.      cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR) with Bangladesh Bank have been maintained as per rule;

 

 xii.      it appeared from our test check that, the internal control system was  satisfactory and adequate to prevent probable frauds and forgeries ;

 

xiii.      guidelines of Core Risk Management Issued by Bangladesh Bank vide BRPD Circular # 17 dated 7/10/2003 were not fully complied with;

 

 

xiv.      the accounts of overseas subsidiary associate and branches were not audited by us;

 

  xv.      80% of the risk-weighted assets of the branches allocated for audit have been audited by us.

 

xvi.      We have spent approximately 6750 man hours for the audit of books and accounts of the bank.

 

 

 

          Sd/-                                                                                                               Sd/-

Howladar Yunus & Co.                                                                              A. Wahab & Co.                                                                     

Chartered Accountants                                                                               Chartered Accountants

 

Dated, Dhaka, the 11 May 2008

 

 

 

 

Janata Bank Limited

Balance Sheet

As of 31 December 2007

 

 

Note

 

31. 12. 2007

 

Taka

PROPERTY AND ASSETS

 

 

Cash

3

         15,579,764,948

Cash in hand (Including foreign currency)

 

           4,238,274,687

Balance with Bangladesh Bank and it's agent bank(s)

 

         11,341,490,261

 

 

 

Balance with other banks and financial institutions

4

           8,301,313,776

In Bangladesh

 

           4,880,254,938

Outside Bangladesh

 

           3,421,058,838

Money at call on short notice

5

           8,567,349,333

Investments:

6

         55,862,930,391

Government

 

         55,320,609,715

Others

 

              542,320,676

Loans and Advances

7

       121,204,454,973

Loans, cash credit, overdrafts, etc.

 

       112,857,503,942

Bills purchased & discounted

 

           8,346,951,031

 

 

 

Fixed Assets including premises, furniture and fixtures

8

           2,424,177,100

Other assets

9

         32,121,123,227

Non -banking assets

 

 

TOTAL PROPERTY AND ASSETS

 

244,061,113,748

 

 

 

LIABILITIES AND CAPITAL

 

 

Liabilities:

 

 

Borrowings from other banks, financial institutions and agents

10

           3,504,298,538

 

 

 

Deposits and other Accounts<