Faculty of Business Administration

Accounting Information System (ACT- 411)Section - 02

Assignment onCorporate Reporting System

A Study on a Corporate Firm in Bangladesh.

Submitted By: Name IDXavier Rozario 113200087Racy Daniel Godino 113200088Fazle Rabbi 113200090

Submitted To: Prof. Dr. Md. Jahirul Hoque

Professor,Faculty of Business Administration,

Eastern University

Date of Submission: 21-12-2014

FALL Semester , 2014Table of Content

S.L Subjects Page no.1 Part-1: Organizational Profile 1-92 (i) History of organization: 23 (ii) Mission: 24 (iii) Vision: 25 (iv) Main Products 3-56 (v) Human Resource Strength 57 (vi) SWOT Analysis 5-98 Part-2: Theoretical Background 10-149 (i) Concept, Significance & type of FRs & MRs 11-1210 (ii) Objectives of CRS 1211 (iii) Components of FRS & MRS 1212 (iv) Attributes of FRS & MRS 13-1413 Part-3:Empirical Analysis 15-2114 (i) Objectives of Reporting system in the selected firm 1615 (ii) Components of FRS in the firm in terms of Periodicity,

Persons Responsibility, User Group

17

16 (iii) Components of MRS in the firm in terms of Periodicity,

Persons Responsibility, User Group

18

17 (iv) Financial Organization Structure of the firm 1918 (v) Evaluation attributes of RS 2019 (vi) Recommendation & Conclusion 20-21

Part-1

Organizational Profile

(i) History of organization:Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank started its operation from 3rd June 2001. Jamuna Bank Limited is a highly capitalized new generation Bank with an Authorized Capital and Paid-up Capital of Tk.10000 million and Tk.4488 million respectively. The Paid-up capital has been raised to 840 million and the total equity of the bank stands at 8325 million as on December 31, 2012. JBL undertakes all types of banking transactions to support the development of trade and commerce of the country. JBL's services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. Jamuna Bank Ltd. the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the filed of trade, commerce and industries. The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The Management of the bank constantly focuses on understanding and anticipating customers needs. The scenario of banking business is changing day by day, so the bank's responsibility is to device strategy and new products to cope with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress within only twelve years. The bank has already ranked at top of the quality service providers & is known for its reputation. Jamuna Bank Ltd. offers different types of Corporate and Personal Banking Services involving all segments of the society within the purview of rules and regulations laid down by the Central Bank and other regulatory authorities. As per the provisions of Bangladesh Bank license, the Bank has offered initially its shares to public by Pre – IPO and subsequently sold shares to the public through IPO in the year 2004. The shares of the Bank are listed with both Dhaka Stock Exchange Ltd. & Chittagong Stock Exchange Ltd.(ii) Mission:The bank is committed to satisfy diverse need of its customers through an array of products at a competitive price by using appropriate technology and providing timely

service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensure with a motivated and professional workforce.(iii) Vision:To become a leading banking institution by playing a significant role in the development of the country

(iv) Main Products:The Bank has a collection of mode that prepared financial products and services. Such products are based on Monthly Savings Schemes, Consumer Credit Schemes, Lease Finance and Personal Loan for Women and Shop Finance Scheme etc. Jamuna Bank Ltd, also familiar with Q-cash ATM cards for its valued customers providing 24 hours banking services through Debit Cards.JBL offers the following services to valued customer. The Bank is providing different types of services. Some of them are mentioned in below: Deposit Schemes

Remittance and Collection

Import and Export handling and Finance

Loan Syndication

Project Finance

Investment Banking

Lease Finance

Hire purchase

Personal Loan for Woman

24-hours Banking: Q-Cash ATM facility

Islamic Banking

Corporate Banking

Consumer Credit Scheme

International Banking

JBL Corporate Banking Services Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate client groups combining trade, treasury, investment and transactional banking activities in one package. The corporate Banking specialists will render high class service for speedy approvals and efficient processing to satisfy customer needs. Corporate Banking business envelops a broad range of businesses and industries. You can leverage on the know-how in the following sectors mainly:

Agro processing industryIndustry (Import Substitute / Export oriented)

Textile, Spinning, Dyeing/Printing

Export Oriented Garments, Sweater.

Engineering, Steel Mills

Chemical and chemical products etc.

Telecommunications.

Wholesale trade

Transport · Hotels, Restaurants

Non Bank Financial Institutions

Loan Syndication

Export Finance

Import Finance Online Banking Jamuna Bank Limited has introduced real-time any branch banking on December 31, 2010. Now, customers can withdraw and deposit money from any of its 65 branches located at Dhaka, Chittagong, Sylhet, Gazipur, Bogra, Naogaon, Narayanganj, Dinajpur, Kushtia, Rajshahi, Bashurhat, Sirajganj and Munshigonj. The valued customers can also enjoy 24 hours banking service through ATM card from any of Q-cash ATMs located at Dhaka, Chittagong, Khulna, Sylhet and Bogra.

Types of Deposit account There are several types of deposit accounts. Each account has different characteristics and every account has some specific purpose to serve.JBL offers the following key Personal Banking Services. According to their uniqueness they are described as follows:

i. Savings Account: It is the general account of the JBL (Mirpur Branch) individual or more than two persons can open a savings account on JBL. The officers and authorize persons are issuing cheque book, deposit slips and statement of account to the holder of savings. The officer justifies the information that is submitted by the account holder for opening of the account. The officers of the bank process account-opening formalities.

ii. Current Deposit Account: JBL is one of the newly established well-reputed third generation private commercial bank in Bangladesh. It operates very diverse current account operation. They serve various types of customers, like current account for private limited company, current account for public limited company, current account for partnership business, etc.

iii. Foreign Currency Account: The JBL also operate Foreign Currency Account for Bangladeshi Wage Earners or for Foreign Nationals/Company/Firms etc. to send their valued earned foreign currency into the country.

iv. Short Term Deposit Account (STD): JBL also offers Short Term Deposit to its valued customers. Short Term Deposit is a deposit account where the payment of interest is paid on month basis. These items include the deposits for a period ranging from 7 (seven) days to 89 (eighty-nine) days. These types of liabilities are payable on special notice or after a specified period other than the fixed deposits. Some of these types of deposits are of the nature of time deposits. The rate of interest on STD account is 4.5% per annum. There are some rules and regulations that must be maintained by the STD account holder. If the STD account holder wants to withdraw the money from the account they have to inform the bank before, otherwise the account holder may not get the interest in full amount Schemes: Schemes are the most important sources of enhancing banks deposit. Mainly bank is the lender of money, which is deposited by various types of depositor. These schemes are different in nature and types and also in interest rates. These deposits give the customers to deposit the idle money in profit earning schemes and

also provide the security. Jamuna Bank limited as third profit earning to the depositors and generation modern and technology based modern commercial bank offers various types of customer’s friendly deposit schemes to its valued customers. These schemes are highly also unique in security.Marriage Deposit Scheme Marriage of children, especially daughter is a matter of great concern to the parents. Marriage of children involves expense of considerable amount. Prudent parents make effort for gradual building of fund as per their capacity to meet the matrimonial expense of their children specially daughters. Parents get relief and can have peace of mind if they can arrange the necessary fund for marriage of their children.

Types of loan of what are offered by Jamuna Bank Limited Loan (General)

House Building Loan (General

House Building Loan (Staff)

Other Loans to Staff

Cash Credit (Hypo.)

Cash Credit (Pledge)

Corporate Social Responsibilities of the Jamuna Bank Limited

Hire Purchase

Lease Financing

Time Loan

Cons SOD (General)

SOD (Others)

SOD (Export)

PAD

LlM

LTR

IBP

Export Cash Credit (ECC)

Packing Credit (PC)

F D B P

IDBP

F B P

(v) Human Resource strength:Jamuna Bank Limited has 2,375 employees throughout the country.(vi) SWOT Analysis:

SWOT analysis refers to analysis of strengths, weaknesses, opportunities and threats of an

organization. This facilitates the organization to make its future performance improved in

comparison to its competitors. An organization can also study its current position through SWOT

analysis. For all of these, SWOT analysis is considered as an important tool for making changes in

the strategic management of an organization. Through direct observation and discussion with the

JBL officials we am able to point out some major strength and weaknesses as well as some threats

and opportunities regarding the various issues of the Bank such as–• Organizational identity• Service level• Operational efficiency• Technology• Employee efficiency etc. along with many other issues.

Strengths

Top management

Corporate culture

Various Products and Services

Strong employee bonding

Efficient Performance

Strong financial position

Weaknesses

Dependent on fixed deposits

Moderate risk management system

Absence of strong marketing activities

Not enough innovative products

Discouraging small entrepreneurs

Opportunities

Country wide network

Introducing more branches

Introducing special corporate scheme

Real time online banking

Creation of brand image

Threats

Similar products are offered by others

Default Loans

Industrial Downturn

Increased competition in the market

Strengths Top Management The Jamuna Bank Limited is operated by a very efficient management group. The top management officials have all worked in reputed banks and their years of banking experience, skill, and expertise will continue to contribute towards further expansion of the bank. So, the top management of the bank is the major strength for JBL. Corporate Culture JBL has an interactive corporate culture. The working environment of JBL is very friendly, interactive and informal. And, there are no hidden barriers or boundaries while communicate between the superior and the employees. This corporate culture works as a great motivation factor among the employees of the bank. Various Products and Services JBL offers various types of products and services to their clients. So those, Customers can choose the right products that will fulfill their needs. Strong employee bonding and belongings JBL employees are one of the major assets of the company. The employees of JBL have a strong sense of commitment towards organization and also feel proud and a sense of belonging towards JBL. The strong organizational culture of JBL is the main reason behind its strength Efficient Performance

It has been seen from customers’ opinion that JBL provides hassle-free customer services to its client comparing to other financial institutions of Bangladesh. Personalized approach to the needs of customers is its motto.Strong Financial Position It has been seen that the net profit has been gradually rising over the years. Furthermore, JBL is not just sitting on its previous year’s success, but also taking initiatives to improve. One of the employees has said, Weakness Dependent on fixed deposits Jamuna Bank heavily dependents on fixed deposit. The bank have to pay large amount of interest for the just because of highly depend on fixed deposit. Moderate risk management system JBL risk management system is not that much secured. They need to develop their risk grading system. Absence of strong marketing activities JBL currently don't have any strong marketing activities through mass media e.g. Television. TV ads play vital role in awareness building. JBL has no such TV ad campaign. Although they do a lot of CSR activities compared to other banks. Not enough innovative products In order to be more competitive in the market, JBL should come up with more new attractive and innovative products. This is one of the weaknesses that JBL is currently passing through but plans to get rid of by 2010.

Discouraging small entrepreneurs JBL provides clean Import Loan to most of its solvent clients. But they usually do not want to finance small entrepreneurs whose financial standing is not clean to them.Opportunities Country wide network The ultimate goal of JBL is to expand its operations to whole Bangladesh. Nurturing this type of vision & mission & to act as required, will not only increase JBL's profitability but also will secure its existence in the log run. Introducing more branches There are many important places in Bangladesh, where customers are eagerly waiting for doing banking transactions. But no existence of banks is in those places. Although JBL already has 65 branches to provide services to its customers, it must also open more branches in those places where people needs banking facilities. Introducing special corporate scheme JBL can introduce special corporate schemes for the corporate customers or officers who have an income level higher from the service holders. At the same time, they can introduce schemes or loans for various service holders. And the schemes should be separate according to the professions, such as engineers, lawyers, doctors etc. Real time online banking Today online banking is the best way to earn profit for the bank. So JBL have to earn more profit by developing online banking system. Creation of brand image As we know that brand creates value. So JBL need to develop their brand image by developing their products and services.Threats Similar products are offered by other banks Now-a-days different foreign and private banks are also offering similar type of products with an almost similar profit margin. So, if all competitors fight with the same weapon, the natural result is declining profit.

Default Loans The problem of non-performing loans or default loans is very minimum or insignificant. However, this problem may rise in the future thus; JBL has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem. Industrial Downturn Bangladesh is economically and political unstable country. Flood, draught, cyclone, and newly added terrorism have become an identity of our country. Along with inflation, unemployment also creates industry wide recession. These caused downward pressure on the capital demand for investment. Increased competition in the market In banking sector day by day competition are increased and lots of new bank are coming into the competition. So it is big threat for JBL.

Part-2

Theoretical Background

(i) Concept, Significance & type of FRs & MRs: A FRS may be defined as a set of process to collect, analyze and disseminate financial data and information to the relevant user groups within acceptable time for decision making purposes in a form which enables the company objectives to be achieved. Financial reports includes not only financial statements but also other means of communicating information that relate, directly or indirectly, to the information provided by financial accounting. Disclosure means that the financial statements should contain all material information necessary to make them useful to their users. This requires the disclosure of information which is expected to be useful to users of financial statements in their decision making. Corporate reporting is consist of three aspects. Which are as follows-

Types of corporate Reporting

(ii) Objectives of CRS (Corporate Reporting System)- To assist in investment.

- To assist in managerial decision.

- To decrease risk.

- To measure and collect zakat.

- To plan and allocate economic resources.

- To assist business entities, banks/financial instution in their planning.

- To ensure truth and fareness in financial information system.

(iii) Components of FRS (Financial Reporting System) & MRS (Management Reporting System)Components of FRS

1. Current value statement

2. Value added statement

3. Social accountability statement

4. Zakat and Qard Hasan Statement

5. Current cash equivalent of Valuing Assets

6. Mudaraba, Musharaka and Murabaha Statements of investment

7. Accounting, Auditing, Organizations for Islamic Financial Institutions (AAOIFI)

8. Corporate Social Responsibility

9. Current Value Balance Sheet

10. Report on Environmental Information

Components of MRS1. Chairman Report

2. Director Report

3. Audit report

4. Employees Progress Report

5. C.G Compliance

6. CSR Performance

7. Marketing report

8. Production report

9. Inventory Report

10. Report on R& D Activities

11. Distribution report

12. Quality Control Report

13. HRD Report

14. HRM systems

15. Progress Reports

16. Corporate governance compliance report

17. Environmental Information report

(iv) Attributes of FRS (Financial Reporting System) & MRS (Management Reporting System)

1. Relevance

2. Consistency

3. Accuracy

4. Preciseness

5. Uniformity and Comparability

6. Fairness

7. Appropriate and full disclosure

8. Timeliness

9. Objectivity

10. Understandability

11. Reliability

12. Transparency

13. Completeness

14. Representational faithfulness

15. Neutrality

16. Verifiability

17. Substance and form

Part-3Empirical Analysis

(i) Objectives of Reporting System in the selected Firm• To earn and maintain CAMEL Rating 'Strong'

• To establish relationship banking and improve service quality through

development of Strategic Marketing Plans.

• To remain one of the best banks in Bangladesh in terms of profitability and

assets quality.

• To introduce fully automated systems through integration of information

technology.

• To ensure an adequate rate of return on investment.

• To keep risk position at an acceptable range (including any off balance sheet

risk).

• To maintain adequate liquidity to meet maturing obligations and

commitments.

• To maintain a healthy growth of business with desired image.

• To maintain adequate control systems and transparency in procedures.

• 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.

(ii) Components of FRS in the Firm in terms of- periodicity, Persons responsibility, User groupS.L Name of Statements of

ReportsPeriodicity of Preparation

Persons responsibility for

preparation

User Groups

1 Income Statement Annually Director In-charge Internal & External

2 Statement of RE Annually Director In-charge Internal & External

3 Cash Flow Statement Annually Director In-charge Internal & External

4 Fund Flow Statement Annually Director In-charge Internal & External

5 Value added Statement Annually Director In-charge Internal & External

6 Current Value Annually Director In-charge Internal & External

7 Report on Environment Information

Annually Director In-charge Internal & External

8 Report on CSR Performancy Annually Director In-charge Internal & External

9 Bank Statement Monthly Chief Accountant Internal & External

10 Tax Return Annually Chief Accountant Internal & External

11 Chairmans Report Annually Chairman Internal & External

12 Directors Report Annually Director In-charge Internal & External

13 Audit Report Annually Auditors Internal & External

14 Employees Progress Report Annually Director In-charge Internal & External

15 C.G Compliance Annually Chairman Internal & External

16 CSR Performance Annually Chairman Internal & External

17 Production Report Annually Production Director Internal & External

18 Marketing Report Annually Marketing Director Internal & External

19 Inventory Report Annually Production Manager Internal & External

20 R&D Report Annually R&D Internal & External

(iii) Components of MRS in the Firm in terms of- periodicity, Persons responsibility, User groupS.L Name of Statements of

ReportsPeriodicity of Preparation

Persons responsibility for

preparation

User Groups

1 Chairman Report Annually Chairman Internal & External

2 Director Report Annually Director In-charge Internal & External

3 Audit report Annually Auditors Internal & External

4 Employees Progress Report Annually Director In-charge Internal & External

5 CSR Performance Annually Director In-charge Internal & External

6 Marketing report Annually Marketing Director Internal & External

7 Production report Annually Production Director Internal & External

8 Inventory Report Annually Production Manager Internal & External

9 Report on R& D Activityies Annually R&D Internal & External

10 Distribution report Annually Marketing Director Internal & External

11 Quality Control Report Annually Marketing Director Internal & External

12 HRD Report Annually R&D Internal & External

13 HRM systems Annually HRM Manager Internal & External

14 Progress Reports Annually Director In-charge Internal & External

15 Corporate governance compliance report

Annually Chairman Internal & External

16 Environmental Information report

Annually Director In-charge Internal & External

(iv) Financial organization structure of the Firm

(v) Evaluation Attributes of RSS.L Name of the Attributes Perfectly Fulfilled Fulfilled Not Fulfilled1 Relevance 2 Consistency 3 Accuracy

4 Preciseness 5 Uniformity and Comparability 6 Fairness 7 Appropriate and full disclosure 8 Timeliness 9 Objectivity 10 Understandability 11 Reliability 12 Transparency 13 Completeness 14 Representational faithfulness 15 Neutrality 16 Verifiability 17 Substance and form

(Vi) Recommendation & Conclusion: RecommendationBased on the assessment of several characteristics of JBL, the following suggestions have been made: Organization front line work 100% perfectly. They have to face some troubles. Alike, the Jamuna Bank as a commercial association faces some troubles to give client service. To conquer this trouble, the banks can employee expert investigation by using client questioning tools.

1. JBL ability must train up their HR staff, so that they can get a clear design about banking knowledge

2. There should be sufficient number of PC to serve the general service to the clients. Staff should be more professional & skilled to use the Flora software.

3. JBL’s clearing should be appropriately online. 4. Credit card ought to be offered for the common clients of JBL. 5. Income configuration should be revised for the approval of the staff comparing with the

other commercial private banks. 6. Assets formation should be stronger to serve accurately. 7. To cheer clients to use On-line banking facility this service charge should not be taken

charge from the clients. 8. Client service of bank has a better impact on its client. To supply smarter client service

they need a call center section is much admired now a day. 9. Jamuna bank can establish some new proposals for their clients like student saving

account, Hajj scheme, etc.

ConclusionBanking Industry in Bangladesh is now in right track. The bankers are contributing much than the previous years for the growth and development of the country. Banking is becoming more and more vital for economic development of Bangladesh in mobilizing capital and others resources. As an organization, the Jamuna Bank Limited has earned the reputation of top banking operation in Bangladesh. The organization is much more structured compared to any other local bank operating in Bangladesh. It has a reputation as a partner for growth. Transparent and quick decision making, efficient team of performance, satisfied customers, online banking, effective internal control, diversification of investments etc. are the major strengths of JBL. After doing this report we have found that most of the customers of Jamuna Bank Limited have positive perception towards its service quality. Thus, it is expected that the service

quality of Jamuna Bank Limited will be increased day by day and it will achieve more popularity among the people in future.