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  • PD-1.3 PD-1.3 Disclosure in the annual audited financial statements (Annual Reports)

    • General

      • PD-1.3.1

        The audited financial statements should be prepared in accordance with the Financial Accounting Standards (FAS) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

      • PD-1.3.2

        For products and activities not covered by the standards listed in paragraph PD-1.3.1, banks should follow the requirements of the International Accounting Standards (IAS) for preparation of audited financial statements.

    • Approval by the Board of Directors

      • PD-1.3.3

        The accounts should be approved by the bank's Board of Directors, signed (normally by the Chairman and the Chief Executive Officer) and annotated as follows:

        "These accounts were approved by the Board of Directors on [date] and signed on their behalf by [name/title] and [name/title]".

    • Investment accounts

      • PD-1.3.4

        Restricted investment accounts are to be reported off balance sheet in the financial statements. Banks must provide disclosures as per the requirements of FAS 1: Presentation and Disclosure in the Financial Statements of Islamic Banks and Financial Institutions issued by AAOIFI.

      • PD-1.3.5

        Unrestricted investment accounts are to be reported on balance sheet in the financial statements. The assets financed by the unrestricted investment accounts are to be included under the Assets section on the balance sheet (net of provisions). The equity of the unrestricted investment accounts should be shown between the liabilities and owners' equity sections. Disclosures and presentations must be in accordance with FAS 1 issued by AAOIFI.

    • Consolidation issues

      • PD-1.3.6

        Where a parent or a group company operating in Bahrain receives funds on an unrestricted basis and these funds are invested with another group company on a restricted basis, these should be eliminated on consolidation. In the consolidated financial statements, investment of the PSIA outside the group should be reported as Unrestricted Investment Accounts. Disclosures and presentation should be in accordance with FAS 1 issued by AAOIFI.

    • Compliance

      • PD-1.3.7

        The Annual Report should include a declaration by the external auditors that no violations have taken place of:

        (a) the Bahrain Commercial Companies Law of 2001 (as amended);
        (b) the BMA Law that might have had a material effect on the business of the bank or on its financial position; and
        (c) the licensing and authorisation requirements and other rules and regulations issued by the Agency.

        In so far as the violations have any material impact on the financial statements of the bank.