Annual Report 2011 - fibaonline.com · Alubaf Arab International Bank Bahrain Tel.: 00973 17 517722...

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Annual Report 2011

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FINANCIAL INVESTMENT BANK

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Annual Report 2011

FINANCIAL INVESTMENT BANK(Member of Bank Deposits Security Fund)

Winner of International Quality Certificate ISO (9001:2008)

Annual Report 2011

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Our Mission

Is the provision of investment, banking and financial advisory services with high quality, confidentiality and reasonable cost. This is all with the view of enhancing customer, staff and shareholders satisfaction within the approved legal framework.

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Annual Report 2011

Our Vission

To be a comprehensive investment provider, locally and regionally, through the provision of financial services, investment products, banking and advisory services to investors in public and private sectors, with high quality and at competitive charges in accordance with set regulations and in compliance with sharia rules and principles.

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Contents

Financial Investment Bank (FIBA).......................................................... 07 Correspondent Banks..........................................................................10

Shareholders.....................................................................................11 Board of Directors..............................................................................12

Executive Management........................................................................14 Board of Directors Report.....................................................................15

Bank Financial Performance..................................................................19

Shari’a Supervisory Board Report............................................................25 External Auditor Report........................................................................26

Financial Statements...........................................................................27

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Annual Report 2011

Financial Investment Bank

Financial Investment Bank (FIBA) is a leading bank in the area of investment products and activities of Stock Exchange markets and deals with the Public, Institutions, companies and Business name.

Incorporation & Establishment: Establishment: October, 1997Commencement of operations: July, 1998Listing at Khartoum Stock Exchange: Feb, 1999

Shareholders Capital: Authorized Capital : SDG 125,000,000 (Hundred and Twenty Five Million Sudanese Pounds)Paid up Capital : SDG 100000000.00 (Hundred Million Sudanese Pounds)Share par value : SDG 1.00 (One Sudanese Pound)

Address :Financial Investment Bank,El Manar Tower, El Sayed Abdul rahman Street,P.O. Box : 12046 Khartoum – Sudan Tel. : + 249 183 730300Fax : + 249 183 730304 SWIFT : FITBSDKHWebsite : www.fibaonline.com Email : [email protected]

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Our Objectives

The main objectives of the Financial Investment Bank are the following:

1. Enhancement of Khartoum Stock Exchange activities and dealings in Stocks & other

tradeable securities.

2. Augmentation of financial resources of public and private sector companies through

promotion & acceleration of public offerings and issuing of financing securities

3. Arrangement of finance to help new investment opportunities for individual and corporate

investors through establishment of investment portfolios and mutual funds in different

economic activities.

4. Provision of restructuring services for public and private sector companies and state–

owned corporations via acquisition, merger and privatization.

5. Provision of corporate banking services to highly selected corporations and

companies.

6. execution of banking transaction to companies, acceptance of investment accounts,

provision of guarantees, opening of letter of credit and arrangement medium and long

term facilities from local, regional & international, financing corporations to finance

various economic activities.

7. Dissemination of investment values and saving awareness among citizens.

8. Cooperation with concerned parties to improve the general investment environment in

Sudan and encourage inflow of foreign capital.

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Annual Report 2011

Our Products

The Bank’s products are as follows:

1. Mutual Funds & Investment portfolios.

2. Trading in securities.

3. Public offerings and private placements.

4. Underwriting public offerings for new as well as going concern companies.

5. Financial engineering services to private and public sector companies.

6. Corporate Banking services.

7. Restructuring and privatization services.

8. Financial advisory, consulting and assessment services of fixed assets (FIBA Consulting).

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Correspondent Banks:

The Arab Investment Company

BahrainP.O.Box: 5559 ManamaTel.: +973 175 88888Fax: +973 175 88885SWIFT: TAIQBHBM

The Housing Bank for Trade and FinanceP.O.Box: 7693 Amman(11118)Tel.: +962-6-5607315Fax: +962-6-5678121SWIFT: HBHOJOAX

National Commercial Bank SaudiB.S.C .(C )Saudi Arabia P.O.Box: 3555 JeddahTel.: +966-2-6493333Fax: +966-2-6426637 SWIFT: NCBKSAJE

Alubaf Arab International BankBahrainTel.: 00973 17 517722Fax: 00973 17 540094SWIFT: ALUBBHBM

Abu Dhabi Islamic Bank UAE P.O.Box: 313Abu dhabi Tel.: +971-2-6100600 Fax: +971-2-6654340 SWIFT: ABDIAEAD

Intercontinental Arab BankFrance - ParisTel.: +33-153766262Fax: +33-142890959SWIFT: BIARFRPP

Qatar Islamic Bank QatarP.O.Box: 955 Doha Tel.: +974- 4409409 Fax: +974- 4412700 SWIFT: QISBQAQA

British Arab Commercial Bank LondonTel.: +44 20 7648 7777Fax: +44 20 7600 3318 SWIFT: BACMGB2L

Jordan Islamic Bank for Finance

and Investment Jordan P.O.Box: 926225 Amman (11190)Tel.: +962-6-5666325Fax: +962-6-5666326SWIFT: JIBAJOAM

AL Rajhi Bank Saudi ArabiaP.O.Box: 28 Riyadh 11411

Tel.: +966 -1- 2798312

Fax: +966 -1- 2798327

SWIFT: RJHISARIXXX

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Annual Report 2011

Shareholders

The Arab Investment Company KSA 20.79 %

Hosbico Company UAE 15.23%

Captain Elnour Zaroug Sudan 10.78%

Warm Seas Holding Company Sudan 10.23%

Warm Seas International Company Sudan 10.23%

Northern Hemisphere Company Liberia 9.99%

Central Bank of Sudan Sudan 8.82%

Tadhamon Islamic International Bank Yemen 5.73%

Sudanese French Bank Sudan 2.36%

Others 5.84%

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Board of Directors

1. Dr. Salih H. Alhumaidan Chairman

2. Mr. Faraj Mohammed Sultan Vice Chairman

3. Mr. Mohamed Alfatih Zein El Abedien Member

4. Eng. Isam Eldien Alnour Abdalla Zaroug Member 5. Eng. Manar Eldien Alnour Abdalla Zaroug Member

6. Mr. Isam Eldien Abdal aal Member

7. Dr. Abdal moniem Al gousi Member

8. Mr. Abdal moniem Saied Mohamed Member

9. Representative of the Central Bank of Sudan Member

• Mr. Mohamed Al hassan Al sheikh El sanos Member ( until 11 April 2011)

• Mr. Yahaia Osman Ali Member ( until 20 August 2011)

• Mr. El hadi Salih Mohamed Member ( until Now)

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Annual Report 2011

Sharia Supervisory Board

Professor Mohamed Sir El khatim Chairman

Professor Alsidieg Alamien Aldarier Member

Mr. Ibrahim Ahmed Alshiekh Mohamed Member

Auditor

Mubarak Alawad

Legal Advisor

DR. Ahmed Algasim Mustafa

Board Secretary

Mrs. Amira Elamin Mustafa

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Executive Management

Dr. Taha Eltayeb Ahmed General Manager

Mr. Adil Abdelhamied Alhakiem

Mr. Alhadi Mohamed Ahmed Muhi Edien

Mr. Abdalla Hassan Abubakr

Mr. Khidir Nour Aldeen Khidir

Dr. Fath Alrahman Ali M.Salih

Mr. Sidieg Hassab Al Rasoul Elshiekh

Mr. Abdalla Omer Elsidig

Mrs. Amira Alamin Mustafa

Mr. Magzoub Abdalla Mohamed

Deputy General Manager

Manager , Corporate Banking Dept.

Manager, computer Dept.

Manager, marketing & Business Development

Dept.

Manager, Funds & Portfolios Dept.

Manager , Internal Auditing Dept.

Deputy manager, Financial Affairs Dept.

Manager, Legal Dept.

Deputy Manager, Administrative HR Dept.

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Annual Report 2011

Report of the Board of Directorsto the 14th annual Ordinary general meeting of shareholders

Praise be to ALLA, the god of all worlds, peace be upon his most honorable Messenger, our prophet Mohamed, his family and companions.

Dear Brothers and Sisters, Honourable Shareholders, Al Salam Alaikoum Wa Rahmat Allah Wa Brakatu,

It is my great pleasure to welcome you to the 14th annual ordinary general meeting of the shareholders of the financial investment bank in my own name and on behalf of the board members, The bank management and the staff, to present to you the annual report of the bank activities and financial results for the year 2011 along with international and local economic conditions that directly or indirectly affect the national economy and the bank activities, reviewing the results achieved during 2011, and finally reaching the Board of Directors recommendations to your venerable assembly. On the global scene; past year witnessed gross economic, political, and natural events starting by the complications of global financial crisis in Europe, its implications on major money markets and its natural and environmental catastrophic effects in Japan. Simultaneously, the performance of emerging and developing economics was to a large extent, consistent with predictions with clear disparity between various regions. Sustained recovery started in economies that suffered from the financial crisis in Europe and the commonwealth with the upheaval of the raw materials prices which had been an impulse to high growth rates in Latin America. Economic activity slightly declined in developing economies in Asia as a reaction to discontinuity of supplies chain and diminishing of inventory vis –a- vis increasing uncertainty towards advanced economies demand. Expansion continued in Africa south of the desert with strong modality, contrary to activity in Middle East and North Africa which suffered from political and social conflicts in spite of the effect of oil revenues in recovery of oil exporting economies.The end result of various developments in advanced and emerging economies was un predicated retreat in global activity during the second quarter of the year 2011. This may be the cause of the decline of gross domestic product in advance economies between 0.25% - 0.5% of gross domestic product. On domestic level; the separation of Southern Sudan has its implications which directly imposed significant challenges on public finance and some economic sectors by the exodus of oil revenues as the most important supporter to gross domestic product. Statistics indicate that the Sudanese national economy lost about 75% of oil production (480,000bpd), 60% of foreign exchange earnings and 36% of government budget revenues. To offset the implications of the south separation, the government devised a three year salvation programme to improve revenues of non – oil sectors including agriculture, mining, infrastructure and energy – and to increase oil production , animal and fish production to obtain more foreign currency and to attract more investments.Average inflation rate reached 18%in 2011 compared to 13% in 2010.By the end of 2011 the exchange rate of SDG against US$ was 2.76.

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Report of the Board of Directors

Within the framework of dealings in Khartoum stock exchange the volume of transactions reached in 2011 SDG 2.5 Billion compared to SDG 2.4 billion in 2010. Traded shares note ably declined to 106.5 million shares in 2011 from 166.5 shares in 2010. The number of executed contracts declined to 7,870 contract in 2011 compared to 8,266 contract in 2010. The number of shares and stocks greatly increased to 11.2 million in 2011 from 5.8 million in 2010 with a rate of increase of 103% due to activation of the market of government certificates and our bank has benefited a great deal from this accelerating activity.

Dear Shareholders, Praise be to Alla that our bank as an effective part of the Sudanese economic system could achieve satisfactory results under the prevailing conditions and in spite of its adverse effects on the bank. The audited financial statements the external auditor report and the sharia supervisory report for the year ended 31/12/2011generally reflect the performance of the bank during the past year and confirm that the bank – although affected by the surrounding events and economic crisis yet the bank progress remained steady and confident towards development and pioneering by transformation of standing challenges into lucrative investment opportunities.

The financial statements illustrated the following: A.Balance sheet: 1)Total assets:The bank total assets increased from SDG 320 million in 2010 to SDG379 million in 2011 with an increase of SDG 59million and percentage increase of 18% This considerable development is attributed to large growth in Internal and external sources of funds which reflects the expansion of the bank activities. 2) Shareholders’ equity:Shareholders equity went up by 19% in 2011 to reach SDG 152 million compared to SDG 129 million in 2010. This increase is imputed to increase in capital reserves, and profits which is a clear indication of the persistent safe keeping and development of the shareholders funds according to aspirations 3) Bank investment portfolio:The net volume of the investment portfolio and restricted investments rose by 11% in 2011 to amount to SDG 250 million against SDG 224 million in 2010 which denotes the ability of the bank to efficiently reinvest its profits and sources of funds

B. Income statement1) Revenues:In 2011 the bank achieved 23% increase in revenues to reach SDG 47 million compared to SDG 38 million in 2010 of which: Financial investment revenues represented 90%And banking and finance revenues represented 10%

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Annual Report 2011


2) General and administrative expenses:General and administrative expenses represented 31% of revenues in 2011 compared to 32% in 2010. This ratio of total expenses to total revenues reflects the efficient performance of the bank which positively affected the bank financial indicators of profitability and efficiency of resources application. The standard ratio of the central bank of Sudan is around 55% 3) Investment depositors equity:Unrestricted investment deposits attracted from the bank institutional customers developed to SDG 77 million in 2011 compared to SDG 40 million in 2010 representing a percentage increase of 93%. This development is attributed to the efforts exerted in diversification of the bank activities amidst local and foreign business community. The profit distribution percentage to holder of unrestricted investment deposits amounted 7.3% in 2011 against 5.3% in 2010. Administrative expenses:4) Net profits:By the end of the year 2011 the bank achieved net profits after zakat and tax totaling SDG 30 million against SDG 25million in 2010 with a percentage increase of 29% exceeding the five year plan estimate by 14% (SDG 27 million). The board of directors recommended the distribution of 22% of profits as dividend to shareholders of which 10% will be cash dividends 12% will be stocked dividends This indicates the stability of the bank activities under the adverse prevailing conditions of the Sudan economy.

C.Classification of the Bank accordingTo preventive control indicators:In the last quarter of 2011 and in accordance with the preventive control indicators issued by the central bank of Sudan, our bank was rated (Satisfactory) maintaining the same classification during past periods implying the stability of financial and operational environment of the bank.Rating of the bank:

Dear Shareholders, During the past year, the bank focused its attention on its principal business of activation of transactions at Khartoum stock exchange through issuance, promotion, sale, purchase and financing. This sector contributed 90% of the bank total revenues, maintaining its pioneering role in acceleration of dealings at Khartoum stock exchange in both primary and secondary markets. In the field of investment funds industry the bank liquidated two investment funds with total capital volume of SDG 46.9 million during 2011 and issued two new funds with a total capital of SDG 50 million. The total number of investment funds by the end of 2011 reached six funds with a total capital of SDG 151million. In fulfillment of the bank objectives of diffusion of financial culture and saving and investment awareness the bank continued its participation in numerous seminars, meetings and exhibitions held in Sudan and acquired good reputation.

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The bank also gave more concern and attention to human resources as the most important factor of success by provision of continuous technical and professional training inside and outside Sudan with the aim of refining their skills and capabilities. Contributing to encouragement of investment in new products and services, the bank participated in the share capital of the National Company for Leasing and Investment by SDG 2 million the National Leasing and Investment Company is a joint venture between Sudanese and Arab capital.

Virtuous Shareholders, After examination of the board of directors’ report about the bank activities for the year 2011, let me put to your kind attention the following recommendations of the board of directors:1. Approval of the external auditor report, the sharia supervisory board report and authentication of the final accounts for the year ended 31/12/2011.2. Approval of the board of director’s recommendation to distribute 22% of 2011 profits as dividends to share holder’s 10% cash dividend and 12% stock dividend. 3. Approval of the board of directors recommendation to pay:

a) The board of director remuneration for the year 2011 amounting to SDG 1570309 b) Sharia supervisory board remuneration for the year 2011, amounting to SDG 60,000.

4. Authorization of the board of directors to appoint the legal auditor and fix his fees. 5. Approval of formation of reserve to the bank building as follows:

a) SDG 4,530,312 to be set aside from 2011 profitsb) SDG 469,688 from the balance of the previous year’s retained profits.

Dear Shareholders,What has been achieved during the year 2011 under the economic crisis and its various implications was a result of appraised effort of the staff persistence and support of the shareholder’s and thence the board of directors.In conclusion I wish to express any gratitude to your continuous support to the bank and its management that made possible the actualization of these achievements. I also wish to express my great thanks and gratitude’s to Ministry of Finance and National Economy, Central Bank of Sudan, Khartoum Stock Exchange, Sudan Financial Services Co. Commercial Registrar, Sharia Supervisory Board, External Auditor, members of the board of directors, general manager and all the staff for their endeavour, cooperation and dedication, hopping that the bank will continue its consolidated track record and success.

Faraj Mohammed Sultan

Chairman

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Annual Report 2011

Financial Highlights for the years (2007 -2011)

Assets: Total Assets reached SDG 379312685.00 at the end of 2011, compared to SDG 320562905.00 in 2010 with a percentage increase of 18%. Table (1): Trend of Assets (2007 – 2011)

Items (SDG) 2007 2008 2009 2010 2011

Current Assets 190864983.5 249374828.12 430459848.00 315838227.00 374466989.00

Fixed Assets 3914470.11 6418480.93 4220775.00 4724678.00 4845696.00

Total Assets 194779453.61 255793309.05 434705623.00 320562905.00 379312685.00

Liabilities & Investment sharing accounts: Total liabilities and profit sharing investment accounts amounted to SDG 227549048.00 in 2011 compared to SDG 191,702,524.00 in 2010.Table (2) Trend of Details of liabilities and profit sharing Investment accounts (2007 – 2011)

Items (SDG) 2007 2008 2009 2010 2011

Liabilities 67245280.34 96887403.37 240191129.00 151866271.00 150626779.00

Profit sharing Investment Accounts

32017136.21 53247068.43 85001371.00 39836253.00 76922269.00

Total liabilities & Profit sharing Investment Accounts

99262416.55 150134471.80 325192500.00 191702524.00 227549048.00

500.000.000.00

400.000.000.00

300.000.000.00

200.000.000.00

100.000.000.00

0.00

2007

2008

2009

2010

2011Assets

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Shareholders’ Equity :Shareholders’ equity amounted to SDG 151763637.00 in 2011 compared to SDG 128860381.00 in 2010 with a percentage increase of 18 %.

Table (3) Trend of Shareholders Equity (2007 – 2011)

Items (SDG) 2007 2008 2009 2010 2011

Total shareholders’ equity

95517037.06 105658837.25 109488123.00 128860381.00 151763637.00

250.000.000.00

200.000.000.00

150.000.000.00

100.000.000.00

50.000.000.00

0.00

2007

2008

2009

2010

2011Liabilities

100.000.000.00

80.000.000.00

60.000.000.00

40.000.000.00

20.000.000.00

0.00

2007

2008

2009

2010

2011

Investment sharing accounts

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Annual Report 2011


Paid up Capital: Total paid up capital reached SDG 100000000.00 in 2011 compared to SDG 89633240.00 in 2010 with a percentage rate of increase of 11.5%.

Table (4) Trend paid up capital (2007 – 2011)

Items (SDG) 2007 2008 2009 2010 2011

Paid up capital 69860029.00 76846055.00 82993740.00 89633240.00 100000000.00

160.000.000.00

140.000.000.00

120.000.000.00

80.000.000.00

60.000.000.00

40.000.000.00

20.000.000.00

0.00

2007

2008

2009

2010

2011

Shareholders’ Equity

Paid up Capital

100.000.000.00

80.000.000.00

60.000.000.00

40.000.000.00

20.000.000.00

0.00

2007

2008

2009

2010

2011

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Revenues:Total revenues reached SDG 46908574.00 in 2011 compared to SDG 38126583.00 in 2010 with a percentage rate of increase of 23%.

(Table 5) Revenues (2007 -2011)

Items (SDG) 2007 2008 2009 2010 2011

Total Revenues 32833415.48 28783949.52 28857339.00 38126583.00 46908574.00

Expenses:Total expenses amounted to SDG 14731504.00 in 2011 compared to 12209522.00 in 2010 with a rate of increase of 20.6%.Table (6) Trend of Expenses( 2007 -2011)

Items (SDG) 2007 2008 2009 2010 2011

Total Expenses 10038861.61 9552852.66 10323207.73 12209522.00 14731504.00

50.000.000.00

40.000.000.00

30.000.000.00

20.000.000.00

10.000.000.00

0.00

2007

2008

2009

2010

2011Revenues

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Annual Report 2011


Profits before Zakat & Tax: Gross profits before Zakat & Tax amounted to SDG 32712468.00 by the end of 2011 compared to SDG 26386412.00 in 2010 with a growth rate of 24%. Table (7) Growth of Profits before Zakat & Tax (2007 – 2011)

Items (SDG) 2007 2008 2009 2010 2011

Profits before Zakat & Tax

22794553.87 19231096.86 19714502.82 26386412.00 32712468.00

16.000.000.00

14.000.000.00

12.000.000.00

10.000.000.00

8.000.000.00

6.000.000.00

4.000.000.00

2.000.000.00

0.00

2007

2008

2009

2010

2011

Expenses

35.000.000.00

30.000.000.00

25.000.000.00

20.000.000.00

15.000.000.00

10.000.000.00

5.000.000.00

0.00

2007

2008

2009

2010

2011

Profits before Zakat & Tax

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Shareholder’s Dividends:

Dividend payments to shareholders amounted to 22% in 2011 compared to 21.566 % in 2010.

(Table 8)Trend of net profit and Dividends ( 2007 – 2011) : (SDG)

Year Net profits Dividends Dividends Distribution Ratio (% of paid up capital)

2007 20’203’015.56 13’972’005.80 (20%) 10% in cash & 10% Bonus shares

2008 16.710.955.41 13.832.289.9 (18%) 10% in cash & 8% Bonus shares

2009 17.803.813.15 14939057.20 (18%) 10% in cash & 8% Bonus shares

2010 24533023.00 19330084.00 (21.566%) (10% cash & 11.566% Bonus shares)

2011 29507900.00 22000000.00 (22%) 12% in cash & 10% Bonus shares

Key financial ratios:

Ratios 2007 2008 2009 2010 2011

Fixed Assets/ Total Assets 2% 2.5% 1.4% 1.5% 1.3%

Owners’ equity / Total Assets 49% 41% 27% 40% 40%

Net profits/ Total Revenues 61% 58% 59% 68% 63%

Net profits/ Owners’ Equity 21% 16% 15% 20% 19%

Expenses/ Revenues 30% 33% 34% 32% 31%

Paid up capital / Authorized Capital

69.86% 76.84% 82.99 % 90% 80%

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Annual Report 2011

Sharia Supervisory Board Report

For the period from 1/1/2011 to 31/2/2011 Corresponding to 26th .muharam 1432 to 6th .safar 1433.

In compliance with the financial institutions governance standard no (1) relative to sharia supervisory board, issued by Accounting and Auditing Organization for Islamic Financial Institutions ( Bahrain) we here by submit to the shareholder’s 14th ordinary general meeting the following report:1. The board revised the bank investment contracts presented to it and directed to remove violations there in 2. The board examined the financial position statement and the income statement for the year ended 31/12/2011, the accompanying disclosure notes thereof, listened to explanations from the bank management together with the external auditor report.3. The responsibility of a ascertainment of adherence to sharia rules falls up the bank management. Our responsibility is to express an independent opinion based on our revision of the bank transactions and report to you. 4. The Board supervised the bank activities during the year 2011 and would like to report that :

a) The contracts and transactions concluded by the bank during the year ended 31/12/2011 and examined by the board were executed in accordance with Sharia rules and principles b) The profit distribution and cost bearing in investment accounts was consistence with the basis approved by the Board according to Islamic sharia law’sc) Zakat account was conducted in accordance with Sharia rules and principles. d) All gains obtained from sources on methods prohibited by sharia rules were disposed of on charity donations

Shaira Supervisory Board:

Professor Mohamed Sir El khatim

Professor Alsidieg Alamien Aldarier

Mr. Ibrahim Ahmed Alshaikh Mohamed

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External Auditor Report to Shareholders

14th ordinary general meeting

Financial Investment Bank (Public Limited Co.) We have audited the attached financial statements of the financial investment bank comprising the financial position statement, the profit and loss account, changes in owner’s equity and cash flow statement as at the year ended 31/12/2011.Responsibility of the board of directors: Preparation and presentation of financial statements, in accordance with accounting standards issued by Accounting and Auditing Organization of Islamic Financial Institutions is the responsibility of the Board Directors. This responsibility includes design, execution, and maintenance of internal control systems concerned with preparation and presentation of financial statements fairly and free from material misstatements caused by fraud or errors and selection and application of appropriate accounting policies and devising of reasonable accounting estimates. Responsibility of legal auditors: Our responsibility of is to express an opinion about these financial statements based on our executed audit works. We conducted our audit in accordance with audit standards issued by the Accounting and Audit Organization for Islamic Institutions These standards require commitment to relevant professional morals and to plan and execute audit works to obtain reasonable assurance that the financial statements are free from any material misstatements. Audit works require the execution of procedures to obtain evidence supporting the amounts and disclosures in the financial statement. The selection of appropriate procedures depends upon professional estimates including valuation of material misstatement risks in financial statements, whether caused by fraud or errors. In valuation of these risks we take in consideration the internal control systems concerned with the fair preparation and presentation of financial statements so as to design audit procedures suitable to similar circumstances but not for the purpose of expression of professional opinion about the effectiveness of the bank internal control systems. Audit also includes assessment of the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors as well as the overall presentation of financial statements.We believe that our audit provides reasonable basis for our opinion. Opinion:In our opinion the financial statements fairly present in all material respects the financial position of the Financial Investment Bank as of December 31, 2011 and the results of its operations and its cash flow for the year then ended in accordance with accounting standards issued by Accounting and Audit Organization for Islamic Financial Institutions – Bahrain, and agree with company ordinance, 1925. Mubarak Al awad MohamedCertified Accountant - Partner

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Annual Report 2011

Statement of Financial Position as at 31.12.2011

31.12.2010SDG

31.12.2011SDG

Notes Items

Assets:

37410107.0057413870.004Cash and Cash Equivalents

2062966.0097629389.005Sales Receivables

0.00437718.006Musharakat

11682000.004752000.007Mudarabat

254973082.00280694192.008Investment securities ( for sale)

8090687.0020141659.009Other Assets

4724678.004845696.0010Fixed Assets

1619385.001265161.0011Intangible Assets

320562905.00379312685.00Total Assets

Liabilities, unrestricted investment accounts and owners equity:

Liabilities:

51562900.0033248409.0012Depositors accounts

100303371.00117378370.0013Other Liabilities

151866271.00150626779.00Total liabilities

39836253.0076922269.0014Unrestricted investment accounts

Owners Equity:

89633240.00100000000.0015Paid up Capital

18547267.0021498057.0016Legal reserve

591596.00591596.00 General reserve

(3136643.00) (777964.00)17Investment Fair value reserve

0.005000000.00 Bank building reserve

10366760.0010000000.0015Capitalized profits

8963324.0012000000.0015Proposed dividends distribution

3894837.003451948.00 Retained profits

128860381.00151763637.00 Total owners Equity

320562905.00379312685.00 Total liabilities, unrestricted investment accounts & owners equity

1426264945.001409241146.0028 Off balance sheet accounts

(The accompanying notes from (1) to (42) are an integral part of these financial statements)

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Income Statement as at 31.12.2011

Items Note31.12.2011SDG

31.12.2010SDG

Income:

From Deferred Sales 18 426323.00 98792.00

From Investments 19 27389288.00 21953189.00

Total income from finance & investments 27815611.00 22051981.00

Less: profits payable to Investment Accounts 14 /20 (2975267.00) (3225999.00)

Bank share as mudharib 24840344.00 18825982.00

Banking services revenue 21 22005648.00 18624292.00

Other income 22 62582.00 676309.00

Total income 46908574.00 38126583.00

Expenses :

Staff cost 23 8555528.00 7103272.00

General & Administrative expenses 24 3385043.00 2904740.00

Depreciation & Amortization 25 721242.00 849667.00

Sale of fixed assets (losses) 14867.00 8000.00

Provisions 27 2027225.00 1343843.00

Central Bank of Sudan fines 27600.00 700.00

Total expense 14731504.00 12210222.00

Net operating profit 32177070.00 25916361.00

FX revaluation gain/ loss 535398.00 469351.00

Income before Zakat & Tax 32712468.00 26385712.00

Zakat provision 29 (1129458.00) (811416.00 )

Tax provision 30 (2075110.00) (1041973.00)

Net income for the period 29507900.00 24532323.00

EPS – SDG 40 0.30 0.25


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Annual Report 2011

Cash flow statement for the year ended 31/12/2011

Items 31.12.2011 SDG 31.12.2010 SDG

Cash flow from operations:

Net profit for the year 29507900.00 24533023.00

Adjustment for:

Depreciation & Amortizations 721242.00 849668.00

Zakat & Tax provision 3204568.00 1853389.00

Losses on disposal of fixed assets 14867.00 8000.00

Reserves 2358679.00 (646484.00)

35807256.00 26597595.00

Changes in operating assets and liabilities , profit share of unrestricted investment accounts

Deferred sales receivables (7699423.00) (1010314.00)

Musharaka (437718.00) 1301250.00

Mudharaba 6930000.00 (8200000.00)

Other Assets (12050973.00) (3724955.00)

Customer Accounts (18314491.00) (1048827.00)

Unrestricted profit sharing Accounts 37086017.00 (45165118.00)

Other liabilities 13870431.00 (89129420.00)

19383843.00 (146977385.00)

Net cash flow from operating Activities 55191098.00 (120379790.00)

Cash flow from investments

Purchase of Fixed Assets (502900.00) (1057492.00)

Investments for sale (25721110.00) (17279797.00)

Net cash flow from investment activities (26224010.00) (18337289.00)

Cash flow from financing

Profit Cash dividends (8963324.00) 0.00

Profits for capitalization (10366760.00) 0.00

Increase of Capital 10366760.00 0.00

Net cash flow from financing (8963324.00) 0.00

Net (increase/decrease) in cash 20003764.00 (138717079.00)

Cash& cash equivalent ( beginning of the year ) 37410107.00 176127186.00

Cash& cash equivalent, (end of the year) 57413870.00 37410107.00


30

FINANCIAL INVESTMENT BANKSta

tem

ent of

Changes in o

wners

’ Equity

at 31/1

2/2

011

Item

s

Capital

Legal

reserv

e

Genera

l

reserv

e

Fair v

alu

e

inve

stm

ent

reserv

es

Pro

fits

for

capitaliz

ation

Bank

build

ing

reserv

e

Pro

fits

for

dis

trib

ution

Reta

ined

pro

fits

Tota

l

SD

GSD

GSD

GSD

GSD

GSD

GSD

GSD

GSD

G

Bala

nce a

t

1/1

/2011

89633240.0

018547267.0

0591596.0

0(3

136643.0

0)

10366760.0

00.0

08963324.0

03894837.0

0128860381.0

0

Pro

fits

for

capitaliz

ation

10366760.0

00.0

00.0

00.0

0(1

0366760.0

0)

0.0

00.0

00.0

00.0

0

Net pro

fit

0.0

00.0

00.0

00.0

00.0

00.0

00.0

029507900.0

029507900.0

0

Reserv

es

0.0

02950790.0

00.0

02358679.0

00.0

00.0

00.0

0(2

950790.0

0)

2358679.0

0

Bank b

uild

ing

reserv

e

0.0

00.0

00.0

00.0

00.0

05000000.0

00.0

0(5

000000.0

0)

0.0

0

Pro

fits

for

dis

trib

ution

0.0

00.0

00.0

00.0

00.0

00.0

0(8

963324.0

0)

0.0

0(8

963324.0

0)

0.0

00.0

00.0

00.0

010000000.0

00.0

012000000.0

0(2

2000000.0

0)

0.0

0

Bala

nce a

t

31/1

2/2

011

100000000.0

021498057.0

0591596.0

0(7

77964.0

0)

10000000.0

05000000.0

012000000.0

03451948.0

0151763636.0

0

Bala

nce a

t

1/1

/2010

89633240.0

016685561.0

00.0

02024122.0

00.0

00.0

00.0

01145200.0

0109488123.0

0

Fre

e s

hare

s

0.0

00.0

00.0

00.0

010366760.0

00.0

00.0

0(1

0366760.0

0)

0.0

0

Net pro

fit

0.0

00.0

00.0

00.0

00.0

00.0

00.0

024532323.0

024532323.0

0

Reserv

es

0.0

02453232.0

00.0

0(5

160765.0

0)

0.0

00.0

00.0

0(2

453232.0

0)

(5160765.0

0)

Cash

div

idends

0.0

00.0

00.0

00.0

00.0

00.0

08963324.0

0(8

963324.0

0)

0.0

0

Bala

nce a

t

31/1

2/2

010

89633240.0

019138793.0

00.0

0(3

136643)

10366760.0

00.0

08963324.0

03894207.0

0128859680.0

0

(The a

ccom

panyi

ng n

ote

s f

rom

(1)

to (

42)

are

an inte

gra

l part o

f th

ese fi

nancia

l sta

tem

ents

)

31

Annual Report 2011

Financial Statements for the Year Ended 31/12/2011

1. Establishment and activity: The Financial Investment Bank is – a public joint – stock limited company in cooperated in the Sudan, in accordance with registration certificate No .11941 Issued on December 1997 according to the companies law Act for 1925. The bank perform all investment banking activities in accordance with the sharia law.The bank commenced operations on 22/7/1998 from the headquarters at Al-Manar tower, sayed Abdalrahman Street.

2. Preparation of financial statements: A. Base of Preparation of financial statements: 1. The financial statements have been prepared in accordance with accounting standards issued by Accounting Auditing Organization for Islamic Financial Institutions and the requirements of Central Bank of Sudan and the fatwas and decisions of the sharia supervisory board of the bank .2.The financial statements are prepared in Sudanese pound.3.The financial statements have been prepared based on the historical cost convention except for the revaluation of investments which are measure of fair value at the end of the period 4.The financial statements have been prepared for the period from January 1,2010 up to 31/December /2010 B. Foreign currencies : Transactions in foreign currencies are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates prevailing on the balance sheet date. Profits and losses arising from the exchange are included in income statement for the period .C. Fixed asset :Fixed asset are stated at cost less accumulated depreciation and any recognized impairment losses. Fixed asset are depreciated according to the straight line Method in equal annual in Installments over their estimated useful life according to the rates required by taxation chamber as follows:

Motor vehicles 15% Computers 20% Furniture and equipments 10%Intangible assets 20%

The carrying amounts of fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. In the cases the carrying amounts are not recoverable then fixed assets are recorded at the recoverable amounts and the differences are recognized.

32



D. Recognition of as losses Income from operations: 1. Murabahat Income: Murabahat Income is recognized on accrual basis when the installment falls due.2. Mudharabat Income: Mudharabat income is recognized on accrual basis based on periodic income distribution3. Musharakat Income :Musharakat income is recognized on accrual basis based on period income distribution. 4. Banking services revenues: Banking services revenues are recognized at the time the related services are provided 5. Income from Securities: Income from Sukuk and stocks are recognized when the right to receive payments is established or when income can be reasonably be measured.E. Provision for doubtful debts and investment risks:Provisions for doubtful debt collection and investment risks is made after careful study of individual cases in accordance with Central bank of Sudan requirements and the bank policies (non performing advances).F. Cash and cash equivalents : For the purposes of preparation of the Cash Flows Statement, cash and cash equivalents consist of cash at hand, current accounts with banks and cash balances with Central bank of Sudan.G. Provisions : Provisions are recognized when the bank has a current obligation (legal or expected) arising from a past event and may require the application of sources consisting of economic utility to settle the obligation. Also a realistic estimate of the obligation can be made. H. Provision for End of service benefits:End of service benefits are calculated in accordance with Sudanese Labor Law & the bank by- laws.I. Measurement of investments and financing transactions :1. Deferred sales:Initially transactions are measured at nominal value and at the end of the period and measured on the basis of nominal value or expected net cash value which ever is lower.2. Mudharabat financing: Mudharabat financing is measured at the amount or put at disposition of the mudharib less what is recovered from the mudharaba capital. 3. Investments Available for sale: Initially recognized at cost and are measured at fair value at subsequent reporting dates. If the determination of fair value is not possible these investment are recognized at cost less any impairment in value. Increases and decreases in the fair value of these investments are taken to the revaluation reserve under shareholders equity at the disposal of these investments. The cumulative gain or loss previously recognized in equity is included in the income statement.

33

Annual Report 2011


J. Zakat and Tax: The bank is subject to zakat in accordance with hand bills of zakat chamber and decisions of sharia supervisory board. As for tax, the bank is subject to business profit tax taking in consideration the exempted profits.

K. Profit Share of Investment Account: Profits are distributed between profit sharing account holders and shareholders on the basis of the shares of each party invested funds. These investment accounts profit are credited to the clients accounts after the approval of the Sharia Supervisory Board.L. Impairment of financial assets :At the balance sheet date the financial assets to are evaluated determine whether there is any an objective evidence that those assets have suffered an impairment loss. If such evidence exists the recoverable amount of the asset is estimated and the impairment is recognized at income statement.M. Liabilities :Liabilities are recognized when it is certain amounts are payable in the future in exchange for materials or services received with or without invoices.

3. Sharia Supervisory Board : The bank activities are subject to the supervision of the Sharia Supervisory Board appointed by the bank general assembly to supervise the bank operations and transactions in accordance with Islamic sharia laws and principles. The sharia supervisory board reports

annually to the general assembly.

4- Cash and cash equivalents:

Items 31/12/2011 31/12/2010

Cash in Hand 1506899.00 1386745.00

Balances with central bank 51498925.00 29950222.00

Balances with our Banks 4408046.00 6073140.00

Total 57413870.00 37410107.00

5- Deferred sales receivables:

Items 31/12/2011 31/12/2010

Murabahat 1855303.00 1867680.00

Mugawalat 11594832.00 1089787.00

Deferred profits (3361361.00) (542969.00)

10088774.00 2414497.00

Credit Defaults 300597.00 288558.00

10389371.00 2703055.00

Provision for doubtful financing (note 26) 626982.00 (640089.00)

Net 9762389.00 2062966.00

34



6- Musharakat:

Items 31/12/2011 31/12/2010

Musharakat 442140.00 0.00

Provision for doubtful financing ( note 26) 4421.00 0.00

437718.00 0.00

7- Mudharabat:

Items 31/12/2011 31/12/2010

Mudharabat 4800000.00 11800000.00

Provision for doubtful financing ( note 26) 48000.00 (118000.00)

4752000.00 11682000.00

8- Investments available for sale :

Items 31/12/2011 31/12/2010

Government bonds 34633681.00 45085912.00

Shehama 150019887.00 108192555.00

Investments in company’s shares (Note 8 / 1) 30691593.00 30873289.00

Investment funds 26954557.00 41328827.00

Investment portfolios 38394475.00 29492500.00

Total 280694193.00 254973082.00

8-1. Investments in company’s shares:

Items 31/12/2011 31/12/2010

Shares in companies listed at KSE 24873525.00 26719219.00

Shares in companies not listed at KSE 5818068.00 4154070.00

Total 30691593.00 30873289.00

9- Other assets:

Items 31/12/2011 31/12/2010

Staff advances 5296041.00 4155648.00

Accrued revenues 2703616.00 1940698.00

Credit margins 8831160.00 1832433.00

Prepaid expenses 98483.00 0. 00

Inventories 1288.00 0. 00

Documents under collection 2396082.00 0. 00

Others 8724.00 161908.00

Khartoum investment fund debt 676443.00 0. 00

Foundation expenses 129823.00 0.00

Total 20141659.00 8090687.00

35

Annual Report 2011


10- Fixed Assets:

ItemsLand Tower

project Vehicles Computers Furniture & equipments Total

SDG SDG SDG SDG SDG SDG

Cost

1/1/2011 2637628.00 1266288.00 666380.00 671417.00 842843.00 6084556.00

Additions 0.00 0.00 145900.00 53344.00 56229.00 255473.00

Disposal 0.00 0.00 0.00 (11678.00) (87544.00) (99222.00)

31/12/2011 2637628.00 1266288.00 812280.00 713083.00 811528.00 6240808.00

Depreciations

1/1/2011 0.00 0.00 332460.00 586261.00 441157.00 1359878.00

For the year 0.00 0.00 86537.00 90288.00 72509.00 249334.00

Settlement

of previous

accumulated depreciation

0.00 0.00 0.00 (133383.00) 0.00 (133383.00)

Disposal 0.00 0.00 0.00 (10765.00) (69952.00) ( 80717.00)

31/12/2011 0.00 0.00 418997.00 665784.00 443714.00 1395112.00

Net book value

31/12/2011 2637628.00 1266288.00 393283.00 47299.00 367814.00 4845696.00

31/9/2010 2637628.00 1266288.00 333920.00 85156.00 401686.00 4724678.00

11- Intangible Assets:

Items 31/12/2011 31/12/2010

Software applications:

Cost at the beginning of the year 2929422.00 2673234.00

Additions 236640.00 256188.00

Cost at the end of the year 3166062.00 2929422.00

Amortizations:

Items 31/12/2011 31/12/2010

1/1/2011 1310037.00 749771.00

For the year 590864.00 560266.00

Depreciations at the end of the year 1900901.00 1310037.00

Net book value 1265161.00 1619385.00

36



12- Investors’ accounts:

Items 31/12/2011 31/12/2010

Funds & portfolios Accounts (note 12/1) 31900664.00 49816639.00

KSE Trading Accounts 364011.00 433688.00

Staff Accounts 983734.00 1106116.00

Import Accounts 0.00 206457.00

Total 33248409.00 51562900.00

12-1. Funds & private portfolios Accounts

Funds and private portfolios accounts represent the outstanding balance of the depositor’s

funds a waiting investment in portfolios and funds. The invested funds are recognized as

restricted Mudharabat accounts, accounted for off-balance sheet.

13- Other liabilities:

Items 31/12/2011 31/12/2010

Trusts on demand ( note 13/1) 88226669.00 87077787.00

IPO 2005762.00 0.00

L/C& guarantees margins 12241818.00 3523703.00

Notes payable 5337568.00 2036607.00

Accrued expenses 3461485.00 2270458.00

After services benefits 1858014.00 1566066.00

Director board remuneration provision 1570309.00 1293843.00

Sharia supervisory remuneration provision 60000.00 50000.00

General Manager intensive 267983.00 0.00

Staff incentives 2004522.00 1361940.00

Other creditors 205782.00 1122967.00

Bank Deposit Security Fund 138458.00 0.00

Total 117378370.00 100303371.00

13-1. Trusts on demand:

These are funds held in trust for participation in funds or portfolios or purchase of securities

or profit payments.

14- Profit sharing Investment accounts:

Items 31/12/2011 31/12/2010

Profit sharing accounts 74085460.00 37300324.00

Unrestricted investment fair value reserve 0.00 (522315.00)

Annual profit share 2975267.00 3225999.00

Contribution to deposit Security Fund (138458.00) (167755.00)

Total 76922269.00 39836253.00

37

Annual Report 2011


15- Capital:

Items 31/12/2011 31/12/2010

Authorized capital 125000000.00 100000000.00

Paid up capital 100000000.00 89633240.00

The authorized capital is SDG 100,000,000 and is divided into 100,000,000 shares each

share has a par value of SDG1.

16 - Legal reserve:

According to the bank memorandum of association a percentage of the bank profits is

to be transferred to the legal reserve. Central Bank of Sudan issued a directive in 2007 to

deduct 10% from net profits as legal reserve.

17 - Investments Fair value reserve:

Fair value reserve is the unrealized gain or loss arising from revaluation of investments

available for sale (stocks & banks).

18- Deferred sales revenue:

Deferred sales revenue is the revenue of murabahat .

Items 31/12/2011 31/12/2010

Murabahat revenue 314323.00 70792.00

Murabahat revenue 112000.00 28000.00

Total 426323.00 98792.00

19- Investment revenue:

Items 31/12/2011 31/12/2010

Investment portfolio profits 26723393.00 20862836.00

Mudharabat profits 665895.00 815277.00

Musharakat profits 0.00 275076.00

Total 27389288.00 21953189.00

20- Return of Unrestricted investment accounts: The bank share as a mudharib is determined according to the terms of conditions of the mudharaba contract. Investment account’s profit share in 2011 was distributed as 20% for the bank and 80% for investment accounts same as 2010.

38



21- Income from Banking and financial services:

Items 31/12/2011 31/12/2010

Credits , guarantees and transfer services commissions 3233315.00 2056211.00

Securities Issuance and trading commissions 9140843.00 7957587.00

Bank management profit share 9631490.00 8610494.00

Total 22005648.00 18624292.00

22- Other revenues:

Items 31/12/2011 31/12/2010

Reverse of financial investment provision 0.00 646484.00

Others 62582.00 29825.00

Total 62582.00 676309.00

23- Staff cost:

Items 31/12/2011 31/12/2010

Salaries & Wages 1916023.00 1581190.00

Overtime 44055.00 31218.00

Holidays & Travel (tickets ) 1368102.00 1222028.00

Clothing & medical allowance 1182530.00 1030939.00

Eid allowance 603632.00 500530.00

Staff training 671771.00 49964900.

Social affairs expenses 56000.00 50501.00

Social insurance 269935.00 222760.00

After service benefits 409232.00 602517.00

Provision for staff incentive 2004522.00 1361940.00

GM intensive 29726.00 0.00

Total 8555528.00 7103272.00

39

Annual Report 2011


24- General and Administrative expenses:

Items 31/12/2011 31/12/2010

Rent 468627.00 399073.00

Honor and hospatility 118218.00 112585.00

Advertisement & publication 245703.00 227658.00

Hygiene & Health 50877.00 47857.00

Maintenance 675454.00 509613.00

Board of directors expenses 210994.00 141887.00

General assembly expenses 59643.00 34086.00

Subscription fees 350067.00 535876.00

Communication expenses 149277.00 119188.00

Stationary expenses 72947.00 64373.00

Vehicles running expenses 99711.00 79606.00

Travelling 147438.00 104274.00

Capital increase expenses 87510.00 0.00

Donations 135870.00 100000.00

Electricity & water expenses 118119.00 107026.00

Sharia supervisory board 97290.00 73529.00

Legal advisor 36000.00 36000.00

insurance expenses (Assets) 31695.00 31807.00

Miscellaneous 97093.00 79200.00

Guarding & municipality 22508.00 16500.00

Journals & periodicals 20002.00 14602.00

Audit fees 90000.00 70000.00

Total 3385043.00 2904740.00

25 – Depreciation & amortization:

Items 31/12/2011 31/12/2010

Fixed assets depreciation 130377.00 289402.00

Amortization – Intangible Assets 590864.00 560266.00

Total 721242.00 849668.00

40



26- Investment and financing risk provisions:

ItemsDeferred sale Musharakat Mudharabat Total

SDG SDG SDG SDG

General provision

Balance at the beginning of the year 20838.00 0.00 118000.00 138838.00

Disposals (36233.00) 0.00 (100000.00) (136233.00)

Carried for the year 114006.00 4421.00 30000.00 148427.00

Balance at the end of the year 98610.00 4421.00 48000.00 151032.00

Specific provision

Balance at the beginning of the year 619251.00 0.00 0.00 619251.00

Disposals (12247.00) 0.00 0.00 (12247.00)

Carried throuhg the year 24286.00 0.00 0.00 24286.00

Write-off bad debts (102918.00) 0.00 0.00 (102918.00)

Balance at the end of the year 528372.00 0.00 0.00 528372.00

Total provision 626982.00 4421.00 48000.00 679404.00

Notes Note 5 Note 6 Note 7

27- provisions:

Items 31/12/2011 31/12/2010

Financing risk provisions 24233.00 0.00

Price fall provision 104700.00 0.00

Board of directors remuneration provisions 1570309.00 1293843.00

Sharia supervisory board remuneration provisions

60000.00 50000.00

GM Intensive 267983.00 0.00

Total 2027225.00 1343843.00

28- Off balance sheet accounts:

Items 31/12/2011 31/12/2010

L/C, guarantees & acceptance obligations ( Note 28/1)

77429890.00 11934207.00

Investment funds & portfolios ( Note 28/2) 1323014456.00 1401136238.00

Restricted Accounts 8796800.00 13194500.00

1409241146.00 1426264945.00

41

Annual Report 2011


28/1- Guarantees, credits & acceptance obligations:

Items 31/12/2011 31/12/2010

Letter of credits 75069627.00 9077818.00

Guarantees ( local) 1741738.00 2262636.00

Guarantees ( Dollar) 618525.00 593753.00

77429890.00 11934207.00

28/2- Investment funds & portfolios:

Items 31/12/2011 31/12/2010

Securities portfolios 1378105752.00 1466534023.00

Debtors / creditors 1295170.00 419336.00

Financing 4097358.00 204992.00

Inventory 1014135.00 1199214.00

Real estate investments 2475000.00 1665000.00

Banking deposits 1376073.00 1935000.00

Less Bank Investments in funds & portfolios (65349032.00) (70821327.00)

1323014456.00 1401136238.00

29- Zakat obligation :

The bank agreed with zakat chamber to pay zakat dues up to 2010 and make a provision

for 2011 zakat.

30- Business profit tax:

The bank estimated the business profit tax for 2010 and made a provision for 2011 tax .These estimates will not significantly deviate from the actual figures of business profit tax.

31- Transactions with related parties:

The bank within its normal operations performs transactions with shareholders, members of the board of director’s, subsidiary companies on commercial basis without any preference or favoring. The related parties balance in the financial statements are as follows :

Items

shareholders board members, subsidiary companies

Manager& Deputy Manager

Total31/12/2011

SDG SDG SDG

Financing & Investments:

Investment deposits 0.00 0.00 0.00

Restricted investment accounts 34915528.00 0.00 34915528.00

Probable commitment & obligations 0.00 0.00 0.00

Income statement:

Financing Income 0.00 0.00 0.00

Fees & commissions 0.00 0.00 0.00

Total 34915528.00 0.00 34915528.00

42



32- Credit risk, Assets and liabilities concentration and items not included in the balance sheet: Credit risks are represented by the failure of one of the contracting parties to honor his obligations which will result in financial losses to the other party. The bank tries to manage credit risks through credit limits, continuous evaluation of credit worthiness and by obtaining adequate collaterals.

Types of credit risks:Contracting parties consist of deferred sales debtors, Mugawala financing and musharaka financing.

Deferred sales debtors: These transactions are financed through purchase of commodity which represents the underlying object of murabaha and hence resell it at a margin. The selling price (cost + profit margin) is repaid in installments on the agreed period. Sometimes these transactions are guaranteed by the mudharaba object (real-estate financing) and in other cases by a group of collaterals.

Musharaka financing:Agreements between the bank and the clients in investment projects (existing or new ) or possession of real estate projects permanently or on the basis of diminishing musharaka arrangements . The profit is distributed in accordance with the agreement but loss is distributed according to the share of capital.

33- Market risks:Market risks are the risk of fluctuations in profit rates, exchange rates, and prices of shares and securities. The bank management set Limits of acceptable levels and monitors commitment to these limits.

34- Risk management: The concentration of credit risks arises when a group of parties enter into similar trading activities or activities in the same industrial sector or market or when they have the same economic features which influence the ability to meet contractual obligations in the case of emergence of economic changes or political changes or any other changes in the market. The concentration risk demonstrates the relative sensitivity of the bank performance towards the developments which may occur in an industrial sector or particular market. The bank manages credit risks through diversification of invested funds in securities which represent various economic sectors and financing of many customers to avoid concentration of risks in few customers or in few sectors or businesses.

35- Liquidity Risk:

Liquidity risk exists in the inability of the bank to fulfill its due obligations in time.

The bank diversified its sources of funding and management of assets in a way to secure

systematic monitoring of liquidity.

The table below summarizes the maturity of the bank assets and liabilities by the end of

the year 2011.

43

Annual Report 2011

Fin

ancia

l Sta

tem

ents

for th

e Y

ear Ended 3

1/1

2/2

010

Matu

rity

of

Assets

& lia

bili

ties o

f th

e b

ank a

t 31/1

2/2

011

(Am

ounts

per SD

G)

Assets

0-1 m

onth

1-3 m

onth

3-6 m

onth

6 m

onth

– 1

year

1-3 y

ear

More

than 3

years

Tota

l

Cash &

bala

nce w

ith b

anks

57413870.0

00.0

00.0

00.0

00.0

0.0

057413870.0

0

Defe

rred s

ale

s d

ebto

rs361447.0

0153165.0

0547266.0

027019377.0

08120556.0

0309761.0

09762389.0

0

Mushara

ka F

inancin

g437718.0

00.0

00.0

00.0

00.0

0.0

0437718.0

0

Ava

ilable

for sale

inve

stm

ent

236481650.0

032000000.0

05394475.0

01000000.0

05818068.0

00.0

028064193.0

0

Mudhara

ba F

inancin

g0.0

00.0

00.0

02970000.0

00.0

01782000.0

04752000.0

0

Fix

ed A

ssets

0.0

00.0

00.0

00.0

00.0

04845696.0

04845696.0

0

Inta

ngib

le A

ssets

0.0

00.0

00.0

00.0

00.0

01265161.0

01265161.0

0

Oth

er Assets

2802098.0

02396082.0

00.0

00.0

014943478.0

00.0

020141659.0

0

Tota

l Assets

297496783.0

034549247.0

05941741.0

4240194.0

028882103.0

08202617.0

0379312685.0

0

Lia

bili

ties

Custo

mers

accounts

33248409.0

00.0

00.0

00.0

00.0

00.0

033248409.0

0

Oth

er lia

bili

ties

117378370.0

00.0

00.0

00.0

00.0

00.0

0117378370.0

0

Tota

l lia

bili

ties

150626779.0

00.0

00.0

00.0

00.0

00.0

0150626779.0

0

Unre

stric

ted inve

stm

ent account

76922269.0

00.0

00.0

00.0

00.0

00.0

076922269.0

0

Tota

l lia

bili

ties&

unre

stric

ted

inve

stm

ent accounts

227549048.0

00.0

00.0

00.0

00.0

00.0

0227549048.0

0

Ow

ners

Equity:

Capital

0.0

00.0

00.0

00.0

00.0

0100000000.0

0100000000.0

0

Legal re

serv

e0.0

00.0

00.0

00.0

00.0

021498057.0

021498057.0

0

Genera

l re

serv

e0.0

00.0

00.0

00.0

00.0

0591596.0

0591596.0

0

Inve

stm

ent Fair v

alu

e reserv

e0.0

00.0

00.0

00.0

00.0

0(7

77964.0

0)

(777964.0

0)

Reta

ined p

rofit

0.0

00.0

00.0

00.0

00.0

03451948.0

03451948.0

0

Tota

l ow

ners

equity

0.0

00.0

00.0

00.0

00.0

0124763637.0

0124763637.0

0

Tota

l lia

bili

ties ,

unre

stric

ted

inve

stm

ent accounts

& o

wners

Equity

227549048.0

0124763637.0

0352312685.0

0

44



36- Currency risks:

Foreign currency risks at 31/12/2011:

Currency (thousand SDG) Total Assets Total liabilitiesInvestment deposits restricted

EURO 2683784.00 2703976.00 104864.00

USD 5509789.00 5339464.00 3022218.00

Sterling Pound 1553.00 0.00 0.00

Saudi Riyal 641900.00 421322.00 421322.00

U.A.E Dirham 588300.00 371680.00 371682.00

Quatar Riyal 550.00 0.00 0.00

37- Fair value of securities:

The fair value is the amount that can be exchanged for assets or paid as settlement of a

liability with informed and interested parties in dealing at commercial conditions without a

favour. The fair value may be different from the listed value.

Available for sale investments consist of unquoted investments of SDG 44.2 million (SDG

33.8 million in 2010) recorded at cost due to absence of suitable methods to obtain

reliable fair value for these investments.

The fair value of the remaining financial assets and liabilities included in the balance sheet

are not significantly different from their carrying values in the financial statements.

38- Concentration of financing & investments:

Total volume of finance and investment amounted to SDG 296 million by the end of 2011

(SDG 269 million -2010).

Sector distribution of finance as follows:

Items 31/12/2011 31/12/2010

Securities 81.77% 68.4%

Portfolios 13% 26.2%

Commercial sector 0.0% 0.2%

Agriculture 0.0% 3.8%

Export 0.0% 0.4%

Industry 1.0% 0.0%

Others 3.6% 1.0%

100% 100%

45

Annual Report 2011


39- Prohibited Income:

Income obtained from sources or through transactions that were not in line with sharia

principles amounted to SDG 2,104 in 2011 ( 2010: SDG 2,912) and the amount has been

allocated for charitable purposes.

40- return on share ( earning per share (EPS):

Items 31/12/2011 31/12/2010

Year net profits 29507900.00 24532323.00

Shares Number 100000000.00 100000000.00

Share profit 0.30 0.25

41- Capital Adequacy:

Items 31/12/2011 31/12/2010

Capital Adequacy 51 % 51%

Minimum C.A 12 % 12 %

42- Comparative Figures:

Comparative figures for 2010 have been classified according to the presentation and

disclosure standard issued by Accounting and Auditing Organization for Islamic Financial

Institutions and in accordance with central bank of Sudan requirements. This classification

did not affect net profit, Shareholders equity or cash flows for that year.

46

FINANCIAL INVESTMENT BANKFin

ancia

l Sta

tem

ents

for th

e Y

ear Ended 3

1/1

2/2

010

Sta

tem

ent of

Restric

ted Inve

stm

ents

as a

t 31/1

2/2

011

Tota

l fu

nds &

portfo

lios

Priva

te

portfo

lios

Mala

ria

potfolio

Tota

l fu

nds

Third

div

ers

ified

inve

stm

ent

fund

Second

Alw

ata

n

gro

up

inve

stm

ent

fund

Second

securities

inve

stm

ent

fund

S

econd

inve

stm

ent

fund

Real esta

te

reconst

ructio

n

fund

Second

Nam

aa

fund

Item

s

1416293282.0

01263855782.0

01437500.0

0151000000.0

08000000.0

042000000.0

030000000.0

016000000.0

025000000.0

030000000.0

0

Capita

l at th

e

begin

nin

g

--

143750.0

015100000.0

0800000.0

04200000.0

03000000.0

01600000.0

02500000.0

03000000.0

0

Num

ber

of bonds

( Suku

k)at th

e

begin

nin

g o

f th

e p

erio

d

--

10.0

0-

10.0

010.0

010.0

010.0

010.0

010.0

0

Nom

inal

valu

e o

f bond

1387068318.0

01236203397.0

01356938.0

0149507984.0

08290216.0

039138736.0

029861679.0

014597856.0

025617813.0

032001683.0

0

Ass

et at th

e

end o

f th

e

perio

d

--

143750.0

0-

800000.0

04200000.0

03000000.0

01600000.0

02500000.0

03000000.0

0

Num

ber of

bonds

at th

e

end o

f th

e

perio

d

--

8.8

6-

10.3

68.7

39.9

18.3

19.9

710.4

2Book

valu

e

of bond

--

-10.0

010.0

510.0

610.0

610.0

610.0

6M

ark

et va

lue

of bond

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