RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of April 27, 2009 No. 33

About approval of the Instruction for conducting financial accounting by Islamic banks

Due to the adoption of law of the Republic of Kazakhstan of February 12, 2009 "About modification and amendments in some legal acts of the Republic of Kazakhstan concerning the organization and activities of Islamic banks and the organization of Islamic financing", for the purpose of enhancement of conducting financial accounting by the Islamic Board of National Bank of the Republic of Kazakhstan DECIDES: banks

1. Approve the enclosed Instruction for conducting financial accounting by Islamic banks.

2. This resolution becomes effective after fourteen days from the date of state registration in the Ministry of Justice of the Republic of Kazakhstan.

3. To accounting department (Shalgimbayeva N. T.):

1) together with Legal department (Sharipov S. B.) to take measures to state registration in the Ministry of Justice of the Republic of Kazakhstan of this resolution;

2) in ten-day time from the date of state registration in the Ministry of Justice of the Republic of Kazakhstan of this resolution to bring it to the attention of the interested divisions of central office and territorial branches of National Bank of the Republic of Kazakhstan, Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations and Consolidation of legal entities "The association of financiers of Kazakhstan".

4. To impose control of execution of this resolution on the vice-chairman of National Bank of the Republic of Kazakhstan Galiyeva D. T.

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of April 27, 2009 No. 33

Instruction for conducting financial accounting by Islamic banks

Section 1. General provisions

1. This Instruction is developed according to the Civil code of the Republic of Kazakhstan (General part) of December 27, 1994, the Civil code of the Republic of Kazakhstan (Special part) of July 1, 1999, the laws of the Republic of Kazakhstan of March 30, 1995 "About National Bank of the Republic of Kazakhstan", of August 31, 1995 "About banks and banking activity in the Republic of Kazakhstan", of July 2, 2003 "About the security market", of February 28, 2007 "About financial accounting and the financial reporting", International Financial Reporting Standards, the resolution of Board of National Bank of the Republic of Kazakhstan of January 31, 2011 No. 3 "About approval of the Standard chart of accounts of financial accounting in banks of the second level, the mortgage organizations and Development Bank of Kazakhstan joint-stock company (registered in the Register of state registration of regulatory legal acts at No. 6793) also disaggregates conducting financial accounting by Islamic banks (further – bank).

2. In this Instruction the concepts provided by the laws of the Republic of Kazakhstan of August 31, 1995 "About banks and banking activity in the Republic of Kazakhstan" of July 2, 2003 "About the security market" are used.

3. Making of the additional accounting entries which are not contradicting requirements of this Instruction, the legislation of the Republic of Kazakhstan on financial accounting and the financial reporting and International Financial Reporting Standards is allowed.

Section 2. Financial accounting of transactions on acceptance of investment deposits of physical persons and legal entities

4. In case of acceptance of the investment deposit by bank from physical person or legal entity under the agreement on the investment deposit, the following accounting entries are performed:

1) on balance sheet accounts:

Dt 1001 "Cash in cash desk",

1051 "Correspondent account in National Bank of the Republic of Kazakhstan",

1052 "Correspondent accounts in other banks"

Kt 2245 "Investment deposits";

2) on off-balance accounts:

Dt 7801 "Money"

Kt 7861 "Receipt of money from the client".

5. When using by bank of the money accepted under the agreement on the investment deposit in addition to the accounting entries provided by this Instruction accounting entry on the debit of the balance sheet account 2245 "Investment Deposits" and the credit of the balance sheet accounts 1051 "Correspondent Account in National Bank of the Republic of Kazakhstan", 1052 "Correspondent accounts in other banks" is performed.

Chapter 1. Accounting of the money accepted under the agreement on the investment deposit and placed in the affined precious metals

6. In case of placement of the money accepted under the agreement on the investment deposit in the affined precious metals, the following accounting entry is performed:

Dt 7802 "The affined precious metals"

Kt 7801 "Money".

7. When carrying out revaluation at fair value of the affined precious metals the following accounting entries are performed:

1) in case of excess of fair value of the affined precious metals over their book value:

Dt 7802 "The affined precious metals"

Kt 7868 "Unrealized incomes from asset revaluation at fair value";

2) in case of excess of book value of the affined precious metals over their fair value:

Dt 7887 "Unrealized expenses from asset revaluation at fair value"

Kt 7802 "The affined precious metals".

8. When charging remuneration on the metal account according to the agreement of the metal account the following accounting entry is performed:

Dt 7807th "Remuneration"

Kt 7862 "Income in remuneration type".

9. In case of receipt of the added remuneration on the metal account the following accounting entry is performed:

Dt 7801 "Money"

Kt 7807th "Remuneration".

10. In case of sale of the affined precious metals acquired by the money received as the investment deposit the following accounting entries are performed:

1) on the cost of the sold affined precious metals:

Dt 7801 "Money"

Kt 7802 "The affined precious metals"

2) in case of positive difference between selling price of the affined precious metals and their book value:

Dt 7801 "Money"

Kt 7863 "Income from purchase and sale of assets";

3) in case of negative difference between selling price of the affined precious metals and their book value:

Dt 7883 "Expenses from purchase and sale of assets"

Kt 7802 "The affined precious metals";

4) on the amount of realized gains from revaluation of the affined precious metals at fair value:

Dt 7868 "Unrealized incomes from asset revaluation at fair value"

Kt 7866 "Realized gains from asset revaluation at fair value",

7887 "Unrealized expenses from asset revaluation at fair value";

5) on the amount of the realized expenses from revaluation of the affined precious metals at fair value:

Dt 7868 "Unrealized incomes from asset revaluation at fair value",

7885 "The realized expenses from asset revaluation at fair value"

Kt 7887 "Unrealized expenses from asset revaluation at fair value".

Chapter 2. Accounting of the money accepted under the agreement on the investment deposit and placed in securities

11. In case of placement of the money accepted under the agreement on the investment deposit in Islamic securities, on acquisition value taking into account costs according to the transaction the following accounting entry is performed:

Dt 7804 "Islamic securities"

Kt 7801 "Money".

12. When implementing revaluation of the acquired Islamic securities at fair value with the frequency established by accounting policy of bank the following accounting entries are performed:

1) if fair value of Islamic securities is higher than their book value:

Dt 7804 "Islamic securities"

Kt 7868 "Unrealized incomes from asset revaluation at fair value";

2) if book value of Islamic securities is higher than their fair value:

Dt 7887 "Unrealized expenses from asset revaluation at fair value"

Kt 7804 "Islamic securities".

13. When charging the receivable income on Islamic securities the following accounting entry is performed:

Dt 7807th "Remuneration"

Kt 7862 "Income in remuneration type".

14. In case of receipt of imputed income on Islamic securities, the following accounting entry is performed:

Dt 7801 "Money"

Kt 7807th "Remuneration".

15. In case of sale of the Islamic securities acquired by the money accepted under the agreement on the investment deposit the following accounting entries are performed:

1) on the cost of the sold Islamic securities:

Dt 7801 "Money"

Kt 7804 "Islamic securities";

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