· Annual Report 2012 17 Report of the Board of Directors 3) Net profits The bank achieved net...

FINANCIAL INVESTMENT BANK Member of Bank Deposits Security Fund

(Winner of International Quality Certificate ISO 9001:2008)

Annual Report 2012

4

FINANCIAL INVESTMENT BANK

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.

Annual Report 2012

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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

Shari’a Supervisory Board ....................................................................13

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

Bank Financial Performance..................................................................20

Shari’a Supervisory Board Report............................................................23 External Auditor Report........................................................................24

Financial Statements...........................................................................25

Annual Report 2012

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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 names.

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 110,000,000 (Hundred and ten 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. Dissemination of investment values and saving awareness among citizens.

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

Sudan and encourage inflow of foreign capital.

Annual Report 2012

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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 and consulting (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 SaudB.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 Ryad 11411

Tel.: +966 - 1- 2798312

Fax: +966-1- 2798327

SWIFT: RJHISARIXXX

Annual Report 2012

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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. MR. Faraj. Mohamed.Sultan Chairman

2. MR. Mohamed Alfatih Zein Elabedien Deputy Chairman

3. Eng . Manar Eldien Alnour Abdalla Zaroug Member

4. Eng. Isam Eldien Alnour Abdalla .Zaroug Member 5. DR. Abdal Moniem Al Gousi Member

6. MR.Abdal EL Azeem Abdalla Ibrahim Elsiwaidan Member

7. MR Isam Eldien Abdalaal Khalid Member

8. MR.Abdul moniem Saeed Mohamed Ahmed Member

9. MR.Alhadi Salih Mohamed Member

Annual Report 2012

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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. Abubakr Ali Alyas

Mr. Abdalla Omer Elsidig

Mr. Emad Eldien Babekir

Mrs. Amira Alamin Mustafa

Mr. Magzoub Abdalla Mohamed

Mr. Mohamed Elbashir Ibrahim

Deputy General Manager

Manager , Corporate Banking Dept.

Manager, computer Dept.

Manager, marketing & Business Development

Dept.

Manager, Funds & Portfolios Dept.

Manager , Internal Auditing Dept.

Manager , Risk management Dept

Deputy manager, Financial Affairs Dept

Compliance Officer

Manager, Legal Dept

Deputy Manager, Administrative HR Dept

Manager, FIBA Consultancy

Annual Report 2012

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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,

On behalf of my colleagues, the board members, the executive management and the bank staff, Iam pleased to put forward to your kind attention the annual report of the activities and financial results of the financial investment bank for the year ended 31/12/2012 in association with local, regional and international economic conditions that directly or indirectly influence our national economy and consequently the bank activities in addition to the demonstration of the results achieved in the past year, and recommendations of the board of directors to your decent assembly.During the first quarter of 2012 the global economy realized a gradual positive withdrawal after a sizable relapse in 2011. Suspicions with respect to financial stability in the euro area and the strong market pressures casted adverse shades that threatened to throw the European and likely the advanced economies into a deep pit recession.Strong response on policies level in Europe and continued improvement in activity in USA supported markets stability.Most emerging economies achieved high growth rates, yet the continuing economic and financial difficulties in the euro region coupled with atmospheres of political uncertainty formalized a source of danger to global recovery in 2012.On regional level, the transition Arab countries endeavoured to achieve some progress in execution of political reforms while elected governments could maintain macroeconomic stability, the balances of public finance, and external accounts retreated and investors retracted as a result of the continuance of uncertainly atmospheres surrounding the political and economic programs on medium term in numerous countries and at the same time the continual rising of food stuffs and petroleum products prices.On domestic level, the past year witnessed an evident increase in inflation rate to settle down to 46% by the end of 2012. Foreign exchange rates also increased by the end of 2012. the us dollar rate was 5.9837 Sudanese guinea compared to SDG 2.7 in 2011.The distinct shortage of foreign exchange resources greatly affected the ability of Sudanese banking sector to offer foreign exchange services and transactions

In respect of dealings in Khartoum stock exchange, the volume of transactions registered

SDG 3.1 billion by the end of 2012, compared to SDG 2.5 billion in 2011, with a rate of

increase of 24%.

Traded shares rose to reach 172.6 million shares in 2012 compared to 106 million shares

in 2011. Executed contracts increased from 7870 in 2011 to 12689 transactions in 2012.

Number of traded sukuk decreased from 11.2 in 2011 to 10.9 in 2012 as a result of drop

in volume of investment funds.

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Report of the Board of Directors

Dear Shareholders, Praise be to Alla, that under the shadow of the critical conditions of the global, regional, and national economies and in despite of the impact of the events and changes in financial and economic environment, our bank realized positive satisfactory results. The audited financial statements, the external auditor report and the sharia supervisory board report for the year ended 31/12/2012 reflect the concise performance of the bank during 2012, and ensure the concern of the bank management with development and progress policy overriding all difficulties and challenges and at the same time gripping prosperous investment opportunities within its strategy and work modality. A.Balance sheet: - By the end of 2012 the bank total assets reached SDG 459 million, compared to SDG 379 million with a rate of increase of 21 %. This increment in assets is attributed to some revenue bearing items including:Deferred sales, musharakat, mudarabat, investment available for sale and fixed and other assets .The liabilities side also increased in 2012 to reach SDG 200 million compared to SDG 150 million in 2011 with a growth rate of 33% assigned to increase in sources of funds including trusts on demand and unrestricted investment equities, which amounted to SDG 88million by the end of 2012 compared to SDG 77 million in 2011.Total shareholder’s equity increased by 19% in 2012 from SDG 110 million in 2011 to SDG 180 million in 2012 due to capitalization of part of 2012 profits plus portion of retained profits.It is worthy to be noted that the balance of the bank investment portfolio moved upward from SDG 280 million in 2011 to SDG 305 million in 2012 with a gross rate of 9 %.Funds managed by the bank off the balance sheet inform of investment funds and portfolios increased from SDG1409 million in 2011 to SDG 1594 million in 2012 with a rate ofincrease of 13% resulting from the success of the bank management to attract local investments to compensate foreign investment shortage.

B. Income statement1) Revenues:During 2012 the bank realized a 20 % boost in revenues from SDG 46 million in 2011 to SDG 56 million in 2012. Financial investment revenues represented 88% of total revenues,

and banking services revenue accounted for 12% of total revenues.

2) administrative expenses:The ratio of total expenses to total revenue was 29% in 2012 compared to 30 % in 2011. Central bank of Sudan bench mark is 55%. This rate reflects the bank performance efficiency as a positive indicator of the bank profitability and resources application efficiency.

Annual Report 2012

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3) Net profitsThe bank achieved net profits after tax and zakat a mounting to SDG 34 million in 2012 compared to SDG 30 million in 2011 with a rate of increase of 13% in spite of the prohibitive national economic conditions in 2012.

C.Bank classification according to CAEL indicators:According to CAEL indicators issued by central bank of Sudan our bank rating was satisfactory; maintaining the some previous rating as designation of the stability of the financial and operational environment of the bank.

D.During 2012 our bank was not susceptible to any fraudulence or pilferages.

Dear Shareholder’s, During the year under review the bank concentrated its efforts in its principal business of activation of transactions at Khartoum stock exchange through issuance, promotion, sale, purchase and financing activities. This sector constituted 88% of the bank total revenues in 2012, maintaining its pioneering role in activation of both primary and secondary markets of Khartoum stock exchange.In the field of investment funds industry, the bank liquidated the real estate construction fund with a total capital of SDG 25 million reducing the number of operating funds to five funds with a total capital of SDG 126 million.In the domain of investment portfolios the total volume of invested funds amounted to SDG 1509 Million by the end of 2012 with an increase of SDG 118 million and percentage increase of 9% over 2011. This indicates the quality and professionalism of the bank services.In the sphere of studies and consultation the bank provided its consultancy services to various parties including meat and milk production project for sennar state. Blue Nile sugar factory, Sudanese sugar company, and National College for medical and technical studies.In the scope of promotion of public underwriting the bank promoted the expatriates technology and scientific research company, and Alnasr housing company.The bank maintained the position of leadership in promotion of government participation certificates, and government investment sukuk (SARH).To attain the bank goals of dissemination and propagation of financial investment culture, saving awareness and investment consciousness the bank continued its participation in numerous siminars, meetings and exhibitions where of the bank gained good reputation.The bank paid careful attention to the development and qualification of its human resources being the most important factor of success by provision of appropriate technical and professional training locally and abroad .Within the framework of the bank social contribution the malaria portfolio continued its executions where as the total volume of invested funds in this portfolio reached SDG 1437 thousand.

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Recently the bank management plans to expand the spectrum of the portfolio and convert it in to an investment fund for general health services.In consistency with the bank orientation for development and expansion, an ambitious budget has been prepared for 2013 focusing on the principal business domains, targeting the boost of the bank financial and human resources, concerned with the diversification of the components of the bank investment portfolio, and including a plan for dispersion over various states by establishment of two branches, one at Algadarif and the other at Elobied.

Dear honorable shareholders,

Allow me , after your careful examination of the board of directors report on the bank

activity for the year ended 31/12/2012 to put forward to your respectable assembly the

following recommendations:-

1.Approval of the external auditor report, The sharia supervisory board report , and

endorsement of the bank final accounts for the year ended 31/12/2012

2.Approval of the board of directors recommendation to distribute 23% of the year 2012

profits as :

12% cash dividends

11% stock dividends

3.Endorsement of the board of directors recommendation to pay:

a)The board Directors remuneration for 2012 as 5 % of the year profit, amounting to SDG

1,805,760

b)Sharia supervisory board fees for 2012 amounting to SDG 70,000.

4.Authorization of the board of directors to appoint the legal external auditor and determine

his fees for 2013.

6.Endorsement of the board of directors recommendation to raise the bank authorized

capital to SDG 200,000,000

Dear Shareholder’s,Finally I would like to express my appreciation of your continuous support to the bank management that made possible the realization of these commendable results.My thanks and gratitude are also paid to ministry of finance and national economy, central bank of Sudan, Khartoum stock exchange, Sudan financial services co., commercial registrar, sharia supervisor board and legal external auditor.Thanks and appreciation are also extended to bank clients for their highly esteemed and maintained trust.

Annual Report 2012

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Special tribute is paid to the bank staff for their individual and collective endeavours which contributed to the achievement of these best results, looking forward with hope and optimism to attain more accomplishment to contribute to the bank development and success and to support the national economy.

Faraj. Mohammed. SultanChairman of the Board of Directors

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Financial Performance

Assets Total Assets reached SDG 459,662,585 at the end of 2012, compared to SDG 379,312,685 in2011 with a percentage increase of 21 %. Table (1): Trend of Assets (2008 – 2012)

Items (SDG) 2008 2009 2010 2011 2012

Current Assets 249,374,828.12 430,459,848 315,838,227 374,466,989. 454,625,824

Fixed Assets 6,418,480.93 4,220,775 4,724,678 4,845,696 5,036,761

Total Assets 255,793,309.05 434,705,623 320,562,905 379,312,685 459,662,585

Liabilities & Investment sharing accounts: Total liabilities and profit sharing investment accounts amounted to SDG 279,020,715 in 2012 compared to SDG 227,549,048. in 2011.

Table (2) Trend of Details of liabilities and profit sharing Investment accounts (2008 – 2012)

Items (SDG) 2008 2009 2010 2011 2012

Liabilities 96,887,403.37 240,191,129 151,866,271 150,626,779 190,960,182

Profit sharing Investment Accounts

53,247,068.43 85,001,371 39,836,253 76,922,269 88,060,533

Total liabilities & Profit sharing Investment Accounts

150,134,471.80 325,192,500 191,702,524.00 227,549,048 279,020,715

Shareholders’ Equity Shareholders’ equity amounted to SDG 180,641,869.00 in 2012 compared to SDG 151,763,637 in 2011 with a percentage increase of 19 %.

Table (3) Trend of Shareholders Equity (2008 – 2012)

Items (SDG) 2008 2009 2010 2011 2012

Total shareholders’ equity

105,658,837.25 109,488,123 128,860,381 151,763,637 180,641,869

Annual Report 2012

21


Paid up Capital: Total paid up capital reached SDG 110,000,000 in 2012 compared to SDG 100,000,000

in 2011 with a percentage rate of increase of 10 %.

Table (4) Trend of paid up capital (2008 – 2012)

Items (SDG) 2008 2009 2010 2011 2012

Paid up capital 76,846,055 82,993,740 89,633,240 100,000,000 110,000,000

Revenues: Total revenues reached SDG 56,282,409 in 2012 compared to SDG 46,908,574 in 2011

with a percentage rate of increase of 20%.

(Table 5) Revenues (2008 -2012)

Items (SDG) 2008 2009 2010 2011 2012

Total Revenues 28,783,949.52 28,857,339 38,126,583 46,908,574 56,282,409

Expenses: Total expenses amounted to SDG 19,405,325in 2012 compared to 14,731,504 in 2011

with a rate of increase of 31 %.

Table (6) Trend of Expenses( 2008 -2012)

Items (SDG) 2008 2009 2010 2011 2012

Total Expenses 9,552,852.66 10,323,207.73 12,209,522 14,731,504 19,405,325

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Profits before Zakat & Tax: Gross profits before Zakat & Tax amounted to SDG 37,307,095 by the end of 2012

compared to SDG 32,712,468 in 2011 with a growth rate of 14%.

Table (7) Growth of Profits before Zakat & Tax (2008 – 2012)

Items (SDG) 2008 2009 2010 2011 2012

Profits before Zakat&Tax

19,231,096.86 19,714,502.82 26,386,412 32,712,468 37,307,095

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 ( 2008 – 2012) : (SDG)

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

2008 16,710,955.41 13.832289.9 (18%) 10% in cash & 8% Bonus shares

2009 17,803,813.15 14939057.20 (18%) 10% in cash & 8% Bonus shares

2010 24,533,023.00 19330084.00 (21.566%) (10% cash & 11.566% Bonus shares)

2011 29,507,900.00 22000000.00 (22%) 12% in cash & 10% Bonus shares

2012 33,878,287.00 25,300,000.00 (23%) 12% in cash & 11% Bonus shares

Key financial ratios:

Ratios 2008 2009 2010 2011 2012

Fixed Assets/ Total Assets 2.5% 1.4 % 1.5% 1.3% 1.1%

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

Net profits/ Total Revenues 58% 59 % 68% 63% 66%

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

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

Paid up capital / Authorized Capital

76.84% 82.99 % 90% 80% 88%

Annual Report 2012

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Sharia Supervisory Board Report

For the period 1/1/2013 to 31/12/2013

Corresponding to the 7th Safar 1433 to 18th Safar 1434 In compliance with the financial institutions governance standard no (1) concerning sharia supervisory board, issued by the Accounting and Audit Organization for Islamic financial institutions (Bahrain) we hereby report to shareholders general assembly the following:-1.The board reviewed the bank investment contracts offered to it and directed to remove violations therein.2.The board examined the bank financial position as at 31/12/2012, the income statement for the year ended 31/12/2012, and the accompanied disclosure notes therefore, listened to and noticed the bank management explanations, and considered the legal external auditor report.3.The bank management is responsible for the ascertainment of adherence to sharia rules. Our responsibility is to express an independent opinion based on the revision of the bank transactions and report to you.4.The board supervised the bank activities in 2012 and would like to report you that :a)The contracts and transactions concluded by the bank during the year ended 31/12/2012 and examined by the board were executed according to the provisions of sharia rules and principlesb)Profits distribution and cost bearing in investment accounts are consistent with the base approved by the board in accordance with Islamic sharia laws.c)Zakat account was conducted according to sharia rules and principles.d)All gains realized from sources or methods prohibited by sharia rules were paid 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 shareholder’s

Auditors’ report to the Shareholders of 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 statement, changes in owners’ equity statement

and cash flow statement for the year ended 31/12/2012 with a summary of important accounting

policies and other notes.

Responsibility of the board of directors:

Preparation and presentation of fair financial statements according standards issued by the

Accounting and Audit Organization of the Islamic financial institutions is the responsibility of the

board of directors. This responsibility consists of designing, execution, and maintenance of internal

control systems related to preparation and presentation of fair financial statements free from material

misstatements caused by fraud or errors and selection and application of appropriate accounting

policies and preparation of reasonable accounting estimates.

Responsibility of legal auditors:

Our responsibility is to express on opinion about financial statements depending upon our transacted

audit works. Our audit has been conducted with audit standards issued by the accounting and audit

organization for Islamic institutions which requires in accordance commitment to related professional

morals and planning and execution of 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 audit evidence supporting the amounts

and disclosures in financial statements.

The selection appropriate procedures depend on professional estimates including material

misstatements risks resulting from fraud or errors. In valuation of these risks we consider 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 intended to express professional

opinion on the effectiveness of the bank internal control systems.

Also our audit works include the valuation of the appropriateness of the applied accounting policies

and the reasonableness of the accounting estimates made by the board of directors.

We believe that the obtained audit evidence is sufficient and suitable basis for expressing opinion

on financial statements.

Opinion:

In our opinion the financial statement fairly and from all material respects, represent the financial

position, financial performance and cash flows for the year ended 31/12/2012 in accordance with

the accounting standards issued by the Accounting and Audit Organization for Islamic institutions

(Bahrain) and consistent with company act 1925. standards issued by Accounting and Audit

Organization for Islamic Financial Institutions – Bahrain, and agree with company ordinance,

1925.

Mubarak. Al awad.MohamedCertified accountant - partnerKhartoum 18 February 2013

Annual Report 2012

25

Statement of Financial Position as at 31.12.2012

31.12.2011SDG

31.12.2012SDG

Notes Items

Assets:

57,413,87052,949,4284Cash and Cash Equivalents

9,762,38928,982,9045Sales Receivables

437,71811,496,1466Musharakat

4,752,0008,177,4707Mudarabat

280,694,193305,033,3468Investment securities ( for sale)

20,141,65947,373,7879Other Assets

4,845,6965,036,76110Fixed Assets

1,265,161612,74311Intangible Assets

379,312,685459,662,585Total Assets

Liabilities, unrestricted investment accounts and owners equity:

Liabilities:

33,248,40947,252,78712Depositors accounts

117,378,370143,707,39513Other Liabilities

150,626,779190,960,182Total liabilities

76,922,26988,060,53314Unrestricted investment accounts

Owners Equity:

100,000,000110,000,00015Paid up Capital

21,498,05721,498,05716Legal reserve

591,596591,596 General reserve

5,000,00010,000,000Bank building reserve

(777,964) 6,999,946 17Investment Fair value reserve

10,000,00012,100,000 Capitalized profits

12,000,00013,200,000 Proposed dividends distribution

3,451,9486,252,270 Retained profits

151,763,637180,641,869 Total owners Equity

379,312,685459,662,585 Total liabilities, unrestricted investment accounts & owners equity

1,409,241,1461,594,532,96327 Off balance sheet accounts

(The accompanying notes from (1) to (41) are an integral part of these financial statements)

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Income Statement as at 31.12.2012

Items Note31.12.20112SDG

31.12.2011SDG

Income:

From Deferred Sales 18 3,207,519 426,323

From Investments 19 38,520,182 27,389,288

Total income from finance & investments 41,727,701 27,815,611

Less: profits payable to Investment Accounts (14)/(20) (9,709,976) (2,975,267)

Bank share as mudharib 32,017,725 24,840,344

Banking services revenue 21 24,065,568 22,005,648

Other income 21/ 1 199,116 62,582

Total income 56,282,409 46,908,574

Expenses :

Staff cost 22 11,084,576 8,555,528

General & Administrative expenses 23 3,871,830 3,385,043

Depreciation & Amortization 24 1,006,563 721,241

Sale of fixed assets (losses) - 14,867

Provisions 26 3,434,856 2,027,225

Central Bank of Sudan fines 7,500 27,600

Total expense 19,405,325 14,731,504

Net operating profit 36,877,084 32,177,070

FX revaluation gain/ loss 430,011 535,398

Income before Zakat & Tax 37,307,095 32,712,468

Zakat provision 28 (1,274,134) (1,129,458)

Tax provision 29 (2,154,674) (2,075,110)

Net income for the period 33,878,287 29,507,900

EPS – SDG 39 0.31 0.30


Annual Report 2012

27

Cash flow statement for the year ended 31/12/2012

Items 31.12.2012 SDG 31.12.2011 SDG

Cash flow from operations:

Net profit for the year 33,878,287 29,507,900

Adjustment for:

Depreciation & Amortizations 1,006,563 721,241

Zakat & Tax provision 3,428,808 3,204,568

Losses on disposal of fixed assets - 14,867

Reserves 6,999,946 2,358,679

45,313,604 35,807,255

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

Deferred sales receivables (19,220,515) (7,699,423)

Musharaka (11,058,428) (437,718)

Mudharaba (3,425,470) 6,930,000

Other Assets (27,232,128) (12,050,972)

Customer Accounts 14,004,378 (18,314,491)

Unrestricted profit sharing Accounts 11,138,264 37,086,016

Other liabilities 22,901,395 13,870,431

(12,892,504) 19,383,843

Net cash flow from operating Activities 32,421,100 55,191,098

Cash flow from investments

Purchase of Fixed Assets (546,388) (502,900)

Investments for sale (24,339,153) (25,721,110)

Net cash flow from investment activities (24,885,541) (26,224,010)

Cash flow from financing

Profit Cash dividends (12,000,000) (8,963,324)

Profits for capitalization (10,000,000) (10,366,760)

Profits been capitalized 10,000,000 10,366,760

Net cash flow from financing (12,000,000) (8,963,324)

Net (increase/decrease) in cash (4,464,441) 20,003,763

Cash& cash equivalent ( beginning of the year ) 57,413,870 37,410,107

Cash& cash equivalent, (end of the year) 52,949,428 57,413,870


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00,0

00

21,4

98,0

57

591,5

96

-10,0

00,0

00

5,0

00,0

00

12,0

00,0

00

2,6

73,9

83

151,7

63,6

36

capitaliz

ed

Pro

fits

10,0

00,0

00

--

-(1

0,0

00,0

00)

--

--

Pro

fit fo

r th

e

period

--

--

--

-33,8

78,2

87

33,8

78,2

87

Reserv

es

--

-6,9

99,9

46

-5,0

00,0

00

-(5

,000,0

00)

6,9

99,9

46

Pro

fits

for

capitaliz

ation

--

--

12,1

00,0

00

--

(12,1

00,0

00)

-

Pro

fits

for

dis

trib

ution

--

--

--

13,2

00,0

00

(13,2

00,0

00)

-

Pro

fits

been

dis

trib

ute

d-

--

--

-(1

2,0

00,0

00)

-(1

2,0

00,0

00)

Bala

nce a

t

31/1

2/2

012

110,0

00,0

00

21,4

98,0

57

591,5

96

6,9

99,9

46

12,1

00,0

00

10,0

00,0

00

13,2

00,0

00

6,2

52,2

70

180,6

41,8

69

Bala

nce a

t

1/1

/2011

89,6

33,2

40

18,5

47,2

67

591,5

96

(3,1

36,6

43)

10,3

66,7

60

-8,9

63,3

24

3,8

94,8

37

128,8

60,3

81

Pro

fits

been

capitaliz

ed

10,3

66,7

60

--

-(1

0,3

66,7

60)

--

--

Pro

fit fo

r th

e

period

--

--

--

-29,5

07,9

00

29,5

07,9

00

Reserv

es

-2,9

50,7

90

-2,3

58,6

79

--

-(2

,950,7

90)

2,3

58,6

79

Bank reserv

e

--

--

-5,0

00,0

00

-(5

,000,0

00)

-

Pro

fits

for

capitaliz

ation

--

--

--

(8,9

63,3

24)

-(8

,963,3

24)

Pro

fits

for

dis

trib

ution

--

--

10,0

00,0

00

-12,0

00,0

00

(22,0

00,0

00)

-

Bala

nce a

t

31/1

2/2

011

100,0

00,0

00

21,4

98,0

57

591,5

96

(777,9

64)

10,0

00,0

00

5,0

00,0

00

12,0

00,0

00

3,4

51,9

48

151,7

63,6

36

(The a

ccom

panyi

ng n

ote

s f

rom

(1)

to (

41)

are

an inte

gra

l part o

f th

ese fi

nancia

l sta

tem

ents

)

Annual Report 2012

29

Financial Statements for the Year Ended 31/12/2012

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 13,1997 according to the companies law Act for 1925. The bank performs 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. The number of employees amounted to 84 as in 31/12/2012. (2011:81)

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 year ,4-The financial statements have been prepared for the year from January 1,2012 up to 31/December /2012.

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 treated in income statement for the year .

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 30% Furniture and equipments 10%Intangible assets 30%

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

30



amounts are not recoverable then fixed assets are recorded at the recoverable amounts and the differences are recognized.

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: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 madeAlso 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.

Annual Report 2012

31


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.

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 31/12/2012 31/12/2011

Cash in Hand 1,186,563 1,506,899

Balances with central bank 45,342,303 51,498,925

Balances with our Banks 6,420,562 4,408,046

Total 52,949,428 57,413,870

32



5- Deferred sales receivables:

Items 31/12/2012 31/12/2011

Murabahat 21,266,570 1,855,303

Mugawalat 18,202,447 11,594,832

Deferred profits (9,879,039) (3,361,361)

29,589,978 10,088,774

Credit Defaults 654,304 300,597

30,244,282 10,389,371

Provision for doubtful financing ( note 25) (1,261,377) (626,982)

28,982,904 9,762,389

6- Musharakat:

Items 31/12/2012 31/12/2011

Musharakat 11,612,269 442,140

Provision for doubtful financing ( note 25) (116,123) (4,421)

11,496,146 437,718

7- Mudharabat:

Items 31/12/2012 31/12/2011

Mudharabat 8,260,070 4,800,000

Provision for doubtful financing ( note 25) (82,601) (48,000)

8,177,470 4,752,000

8- Investments available for sale :

Items 31/12/2012 31/12/2011

Government investment bonds 63,702,210 34,633,681

Government participation certificates (

shehama) 122,509,070 150,019,887

Government participation certificates (shama) 7,124,000 -

Investments in companies shares(note 8/ 1) 51,329,713 30,691,593

Investment funds 19,867,879 26,954,557

Investment portfolios 38,394,475 38,394,475

Real estate investments ( note 8/2) 2,106,000 -

Total 305,033,346 280,694,193

Annual Report 2012

33


8-1. Investments in company’s shares:

Items 31/12/2012 31/12/2011

Companies shares listed in KSE: Animal resources Bank 40,128 40,128

Islamic development company 527,215 527,215

Shamal Islamic Bank 43,427 45,572

Tadamon Islamic Bank 730,899 584,720

Alsalam Bank 423,308 423,308

Bank of Khartoum 580,716 387,144

Sudatel company 23,411 20,248,310

Sudanese free zone company 42,386 42,386,118

Tagseet company 326,500 326,500

Faisal Islamic Bank 3,183,102 1,894,705

Farmers commercial Bank 35,771 36,715

Modern constructions company 336,000 336,000

National leasing company 2,000,250 -

United capital Bank 85,523 85,523

Price falling provision (listed companies ) (167,200) (104,700)

Total 31,599,143 24,873,525

8/1- Investments in company’s shares:

Items 31/12/2012 31/12/2011

Companies shares unlisted in KSE:

Roads and Bridges National company 143,370 143,370

Arabic leasing company 3,674,700 3,674,700

National leasing company - 1,999,998

National college company 16,000,000 -

Price falling provision (87,500) -

19,730,570 5,818,068

8/2- Investments in company’s shares:

Items 31/12/2012 31/12/2011

Real estate investments: Real estate investments 2,160,000 -

Price falling provision (54,000) -

2,106,000 -

34



9- Other assets:

Items 31/12/2012 31/12/2011

Staff advances 7,569,096 5,296,041

Accrued revenues 14,150,732 2,703,616

Credit margins 3,817,416 8,831,160

Prepaid expenses 129,134 98,483

Inventories 12,497 1,288

Documents under collection 7,745,899 2,396,082

Exchange rate difference debt 13,279,257 -

Others 86,675 8,724

Khartoum investment fund debt 467,643 676,443

Foundation expenses (Note 24) 115,437 129,823

Total 47,373,787 20,141,659

10- Fixed Assets:

ItemsLand Tower

project Vehicles Computers Furniture & equipments Total

SDG SDG SDG SDG SDG SDG

Cost

1/1/2012 2,637,628 1,266,288 812,280 713,083 811,528 6,240,807

Additions - - 241,013 119,166 178,443 538,621

Disposal - - (99,380) (3,192) (10,045) (112,617)

31/12/2012 2,637,628 1,266,288 953,913 829,057 979,926 6,666,812

Depreciations

1/1/2012 - - 418,997 532,401 443,715 1,395,112

For the year - - 117,551 133,070 81,373 331,993

Disposal - - (86,545) (3,184) (7,326) (97,055)

31/12/2012 - - 450,003 662,287 517,761 1,630,051

Net book value

31/12/2012 2,637,628 1,266,288 503,910 166,771 462,164 5,036,761

31/12/2011 2,637,628 1,266,288 393,283 180,682 367,813 4,845,695

Annual Report 2012

35


11- Intangible Assets:

Items 31/12/2012 31/12/2011

Software applications:

Cost at the beginning of the year 3,166,062 2,929,422

Additions 7,767 236,640

Cost at the end of the year 3,173,829 3,166,062

Amortizations:

Items 31/12/2012 31/12/2011

1/1/2011 1,900,901 1,310,037

For the year 660,185 590,864

Depreciations at the end of the year 2,561,086 1,900,901

Net book value 612,743 1,265,161

12- Investors’ accounts:

Items 31/12/2012 31/12/2011

Funds & portfolios Accounts (note 12/1) 45,421,157 31,900,664

KSE Trading Accounts - 364,011

Staff Accounts 1,668,402 983,734

Import Accounts 163,227 -

Total 47,252,787 33,248,409

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.

36



13- Other liabilities:

Items 31/12/2012 31/12/2011

Trusts on demand ( note 13/1) 110,034,230 88,226,669

IPO 105,037 2,005,762

L/C& guarantees margins 6,108,272 12,241,818

Notes payable 7,019,176 5,337,568

Accrued expenses * 4,105,187 3,461,485

After services benefits 2,903,293 1,858,014

Director board remuneration provision 1,805,760 1,570,309

Sharia supervisory remuneration provision 70,000 60,000

General Manager intensive 361,152 267,983

Staff incentives 2,305,225 2,004,522

Other creditors 8,556,786 205,782

Bank Deposit Security Fund 333,277 138,458

Total 143,707,395 117,378,370

*Includes SDG 1,274,134 zakat provision & SDG 2,154,674 business profits tax provision

for the year 2012.

13-1. Trusts on demand: Trust funds on demand are customers funds expected to be subscribed in investment funds and portfolios or purchase of securities, or customers profit distributions or purchase of shares and shehama profit distributions.

14- Profit sharing Investment accounts:

Items 31/12/2012 31/12/2011

Profit sharing accounts 75,844,255 74,085,460

Unrestricted investment fair value reserve 2,839,579 -

Annual profit share 9,709,976 2,975,267

Contribution to deposit Security Fund (333,277) (138,458)

Total 88,060,533 76,922,269

15- Capital:

Items 31/12/2012 31/12/2011

Authorized capital 125,000,000 125,000,000

Paid up capital 110,000,000 100,000,000

The authorized capital is SDG 100,000,000 and is divided into 100,000,000 shares each share has a par value of SDG1. The general assembly approved the capitalization of the profits of SDG 10 million and SDG 12 million as cash dividends in the annual ordinary meeting on march 29,2012.

Annual Report 2012

37


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 & sukuk).

18- Deferred sales revenue:

Deferred sales revenue is the revenue of murabahat .

Items 31/12/2012 31/12/2011

Murabahat income 2,428,320 314,323

Mugawalat income 779,199 112,000

Total 3,207,519 426,323

19- Investment revenue:

Items 31/12/2012 31/12/2011

Investment portfolio profits 38,247,304 26,723,393

Mudharabat profits 61,665 665,895

Musharakat profits 211,214 -

Total 38,520,182 27,389,288

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 2012 was distributed as 20% for the bank and 80% for investment accounts same as 2011. Rate for unrestricted investment accounts holders was 9.15% for 2012 compared to 7.76% for 2011.

21- Income from Banking and financial services:

Items 31/12/2012 31/12/2011

Credits , guarantees and transfer services commissions 3,715,723 3,233,315

Securities Issuance and trading commissions 8,518,677 9,140,843

Bank management profit share 11,768,167 9,631,490

Total 24,065,568 22,005,648

38



21/ 1 - Other revenues:

Items 31/12/2012 31/12/2011

Fixed assets sale revenue 52,164 1,184Studies, valuation, and consultation revenue

100,419 44,782

Insurance companies compensations 46,533 16,616

Total 199,116 62,582

22- Staff cost:

Items 31/12/2012 31/12/2011

Salaries & Wages 2,375,796 1,916,023

Employees promotions 29,575 -

Overtime 38,267 44,055

Vacation and travel expenses 1,700,116 1,368,102

Medical allowance 842,057 647,388

Clothing allowance 762,441 535,142

Eid allowance 746,553 603,632

Staff training 719,868 671,771

Social affairs expenses 96,485 56,000

GM intensive 143,832 29,726

Social insurance 276,577 269,935

After service benefits 1,047,785 409,232

Provision for staff incentive 2,305,225 2,004,522

Total 11,084,576 8,555,528

Annual Report 2012

39


23- General and Administrative expenses:

Items 31/12/2012 31/12/2011

Rent 660,590 468,627

Honor and hospatility 112,759 118,218

Advertisement & publication 316,927 245,703

Cleanliness and health 54,763 50,877

Maintenance 428,875 675,454

Board of directors expenses 286,750 210,994

General assembly expenses 84,975 59,643

Subscription fees 363,273 350,067

Communication expenses 159,998 149,277

Stationary expenses 85,000 72,947

Vehicles running expenses 141,513 99,711

Travelling 286,110 147,938

Capital increase expenses - 87,510

Donations 200,000 135,870

Electricity & water expenses 118,253 118,119

Sharia supervisory board 85,188 97,290

Legal advisor 42,000 36,000

insurance expenses (Assets) 29,334 31,695

General sundries 146,789 97,093

Guarding & municipality 31,991 22,508

Journals & periodicals 16,323 20,002

Fiba consultancy expenses 100,419 -

Audit fees 120,000 90,000

Total 3,871,830 3,385,043

24 – Depreciation & amortization:

Items 31/12/2012 31/12/2011

Fixed assets depreciation( Note 10) 331,993 130,377

Amortization-Intangible Assets ( note 9&11) 674,570 590,864

Total 1,006,563 721,241

40



25- Investment and financing risk provisions:

ItemsDeferred sale Musharakat Mudharabat Total

SDG SDG SDG SDG

General provision

Balance at the beginning of the year

98,610 4,421 48,000 151,031

Disposals (43,493) - (153,138) (196,631)

Carried for the year 337,428 111,702 187,739 636,868

Balance at the end of the year 392,544 116,123 82,601 591,268

Specific provision

Balance at the beginning of the year 528,372 - - 528,372

Disposals (15,866) - - (15,866)

Carried through the year 369,573 - - 369,573

Write-off bad debts (13,246) - - (13,246)

Balance at the end of the year 868,833 - - 868,833

Total provision 1,261,377 116,123 82,601 1,460,101

Notes Note 5 Note 6 Note 7

26- provisions:

Items 31/12/2012 31/12/2011

Financing risk provisions 793,944 24,233

Price fall provision 404,000 104,700

Board of directors remuneration provisions 1,805,760 1,570,309

Sharia supervisory board remuneration provisions

70,000 60,000

GM Intensive 361,152 267,983

Total 3,434,856 2,027,225

27- Off balance sheet accounts:

Items 31/12/2012 31/12/2011

L/C, guarantees & acceptance obligations ( Note 27/1)

156,189,158 77,429,890

Investment funds & portfolios ( Note 27/2) 1,409,875,991 1,323,014,456

Restricted Accounts - 8,796,800

Saudi fund for development 28,467,814 -

1,594,532,963 1,409,241,146

Annual Report 2012

41


27/1- Guarantees, credits & acceptance obligations:

Items 31/12/2012 31/12/2011

Letter of credits 153,363,606 75,069,627

Guarantees ( local) 1,479,219 1,741,738

Guarantees ( Dollar) 1,346,333 618,525

156,189,158 77,429,890

27/2- Investment funds & portfolios:

Items 31/12/2012 31/12/2011

Securities portfolios 1,467,724,749 1,378,105,752

Debtors / creditors 158,424 1,295,170

Financing 121,172 4,097,358

Inventory - 1,014,135

Real estate investments 134,000 2,475,000

Banking deposits - 1,376,073

Less Bank Investments in funds & portfolios (58,262,354) (65,349,032)

1,409,875,991 1,323,014,456

28- Zakat obligation :

The bank agreed with zakat chamber to pay zakat dues up to 2011 and make aprovision

of zakat for 2012.

29- Business profit tax: The bank estimated the business profit tax for 2011 and made a provision for 2012 tax .These estimates will not significantly deviate from the actual figures of business profit tax.

42



30- 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 balances in the at financial statements are as follows :

Items

shareholders board members, subsidiary companies

Manager& Deputy Manager

Total31/12/2012

SDG SDG SDG

Financing & Investments:

Other financing modes 5,737,500 - 5,737,500

Restricted investment accounts 47,052,205 - 47,052,205

Income statement:

Financing Income - - -

Fees & commissions - - -

Total 52,789,705 - 52,789,705

31- Credit risk, Assets and liabilities concentration and items not included in the balance sheet: Credit risks are represented by the non obligation of one party to the contract to fulfill his obligations which may result in losses to other party. The bank endeavors to control credit risks through pursuance of credit risks and continuous evaluation of credit worthiness of other parties to the contract normally financing contracts are guaranteed by asset mortgage or securities or personal pledges from other parties.

Types of credit risks:Financing contracts basically consist of deferred sales debtors, mugawala financing and musharaka financing.

Deferred sales debtors: The bank finance these transactions through purchase of commodity and resell it at a margin to the beneficiary. The sale price (Cost + profit margin) is redeemed in installments according to Murabaha terms and conditions

Musharaka financing:Agreements between the bank and customers in new or ongoing investment projects or ownership of real estate projects permanently or with declining musharaka arrangements. Profits are distributed according to agreement conditions but losses are incurred according to contribution in project share capital.

Annual Report 2012

43


32- 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.

33- 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.

34- 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 2012.

44

FINANCIAL INVESTMENT BANKFin

ancia

l Sta

tem

ents

for th

e Y

ear Ended 3

1/1

2/2

012

Matu

rity

of

Assets

& lia

bili

ties o

f th

e b

ank a

t 31/1

2/2

012

(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

Assets

Cash &

bala

nce w

ith b

anks

52,9

49,4

28

--

--

-52,9

49,4

28

Defe

rred s

ale

s d

ebto

rs-

354,6

45

158,4

91

1,6

31,7

80

24,0

13,0

95

2,8

24,8

94

28,9

82,9

04

Mushara

ka F

inancin

g4,3

76,8

69

--

5,6

60,0

55

1,4

59,2

21

-11,4

96,1

46

Inve

stm

ent ava

ilable

for sale

244,8

02,3

01

32,0

00,0

00

5,3

94,4

75

3,1

06,0

00

19,7

30,5

70

-305,0

33,3

46

Mudhara

ba F

inancin

g-

1,9

40,4

70

--

3,4

65,0

00

2,7

72,0

00

8,1

77,4

70

Fix

ed A

ssets

--

--

-5,0

36,7

61

5,0

36,7

61

Inta

ngib

le A

ssets

--

--

-612,7

43

612,7

43

Oth

er Assets

13,9

02,0

83

14,1

50,7

32

7,7

45,8

99

3,8

17,4

16

467,6

43

7,2

90,0

14

47,3

73,7

87

Tota

l Assets

316,0

30,6

81

48,4

45,8

47

13,2

98,8

65

14,2

15,2

51

49,1

35,5

29

18,5

36,4

11

459,6

62,5

85

Lia

bili

ties

Custo

mers

accounts

47,2

52,7

87

--

--

-47,2

52,7

87

Oth

er lia

bili

ties

143,7

07,3

95

--

--

-143,7

07,3

95

Tota

l lia

bili

ties

190,9

60,1

82

--

--

-190,9

60,1

82

Unre

stric

ted inve

stm

ent accounts

88,0

60,5

33

--

--

-88,0

60,5

33

Tota

l lia

bili

ties&

unre

stric

ted

inve

stm

ent accounts

279,0

20,7

15

--

--

-279,0

20,7

15

Ow

ners

Equity:

Capital

--

--

-110,0

00,0

00

110,0

00,0

00

Legal re

serv

e-

--

--

21,4

98,0

57

21,4

98,0

57

Genera

l re

serv

e-

--

--

591,5

96

591,5

96

Bank b

uild

ing reserv

e-

--

--

10,0

00,0

00

10,0

00,0

00

Inve

stm

ent Fair v

alu

e reserv

e-

--

--

6,9

99,9

46

6,9

99,9

46

Pro

fits

pro

posal capitaliz

ed

--

--

-12,1

00,0

00

12,1

00,0

00

Pro

fits

pro

posal dis

trib

ute

d-

--

--

13,2

00,0

00

13,2

00,0

00

Reta

ined p

rofit

--

--

-6,2

52,2

70

6,2

52,2

70

Tota

l ow

ners

equity

--

--

-180,6

41,8

69

180,6

41,8

69

Tota

l lia

bili

ties ,

unre

stric

ted

inve

stm

ent accounts

& o

wners

Equity

279,0

20,7

15

--

--

180,6

41,8

69

459,6

62,5

85

Annual Report 2012

45


35- Currency risks:

Foreign currency risks at 31/12/2012:

Currency ( thousand SDG) Total Assets Total liabilitiesInvestment deposits restricted

EURO 1,409,163 1,509,744 755,169

USD 3,911,545 3,177,050 1,385,162

Sterling Pound 1,513 - -

U.A.E Dirham 1,063,651 709,727 43,701

Saudi Riyal 1,138,019 3,516,418 3,016,418

Quatar Riyal 550 - -

36- Fair value of securities:

Fair value is the amount that can exchange for asset or be a settlement to liability between

interested parties on commercial conditions without preference. The difference that may

result between quoted value and fair value is included in investments set aside for non-

trading purposes investments available for sale amounting to SDG 58.1 million at the

end of 2012 (SDG 44.2 million in 2011) , recognized at cost due to non availability of

appropriate methods to obtain a reliable fair value for these investments.

Fair values for other financial instruments are not significantly different from recognized

values.

37- Concentration of financing & investments:

Total volume of finance and investment amounted to SDG 354 million by the end of 2012

(SDG 296 million: 2011).

Sector distribution of finance as follows:

Items 31/12/2012 31/12/2011

Securities 73.1% 81.8%

Portfolios 10.5% 13%

Commercial sector 2.4% 0.2%

Agriculture 4.1% 0.4%

Export 1.6% 0.0%

Industry 1.9% 1 %

Others 6.4% 3.6%

100% 100%

46



38- Prohibited Income:

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

principles amounted to SDG 2,484 in 2012 (SDG 2,104 : 2011) and the amount has been

allocated for charitable purposes.

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

Items 31/12/2012 31/12/2011

Year net profit 33,878,287 29,507,900

Shares Number 110,000,000 100,000,000

Share profit 0.31 0.30

40- Capital Adequacy:

Items 31/12/2012 31/12/2011

Capital Adequacy 28% 51 %

Minimum C.A 12% 12 %

41- Comparative Figures:

Comparative figures for 2012 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.

Annual Report 2012

47

Fin

ancia

l Sta

tem

ents

for th

e Y

ear Ended 3

1/1

2/2

012

Sta

tem

ent of

Restric

ted Inve

stm

ents

as a

t 31/1

2/2

012

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 d

Second

securities

inve

stm

ent

fund

S

econd

inve

stm

ent

fund

Second

Nam

aa

fund

Item

s

1,5

09,2

75,7

97

1,3

81,8

38,2

97

1,4

37,5

00

126,0

00,0

00

8,0

00,0

00

42,0

00,0

00

30,0

00,0

00

16,0

00,0

00

30,0

00,0

00

Capita

l at th

e

begin

nin

g

--

143,7

50

12,6

00,0

00

800,0

00

4,2

00,0

00

3,0

00,0

00

1,6

00,0

00

3,0

00,0

00

Num

ber of units

( Suku

k) a

t th

e

begin

nin

g o

f th

e

perio

d

--

10

-10

10

10

10

10

Nom

inal v

alu

e

of u

nit

(at th

e

begin

nin

g o

f fu

nd)

(158,4

24)

--

(158,4

24)

-(1

58,4

24)

--

-D

ebto

rs

(44,4

15,6

45)

(44,3

16,7

77)

(3,9

45)

(94,9

23)

(8)

(17,5

67)

(23,1

81)

(2,4

77)

(51,6

91)

Current account

bala

nce

(1,4

67,9

79,9

22)

(1,3

37,5

21,5

20)

(1,4

37,9

30)

(129,0

20,4

72)

(8,1

68,7

95)

(41,0

28,8

39)

(30,3

78,9

30)

(15,8

24,9

23)

(33,6

18,9

85)

Inve

stm

ent at th

e

end o

f th

e p

erio

d

--

143,7

50

-800,0

00

4,2

00,0

00

3,0

00,0

00

1,6

00,0

00

3,0

00,0

00

Num

ber of units

at th

e e

nd o

f th

e

perio

d

--

10

-10

10

10

10

11

Book

valu

e o

funits

--

--

10

10

10

10

10

Mark

et va

lue o

f u

nits

(1,5

12,5

53,9

90)

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