Annual Reporttadamonbank-sd.com/resources/uploads/files... · 4 - Tadamon Company for Financial...

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Annual Report

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Historical Background ........................................................................................ 5

Bank’s Directory ................................................................................................ 5

Board of Directors .............................................................................................. 10

Executive Management ...................................................................................... 11

Indicators of Sudan Economy performance during the year 2015 .................... 12

Board of directors statement to the 32th annual meeting. .................................. 13

Results of the bank’s activities during the year 2015 ......................................... 15

Resolutions of the 32th annual meeting. ............................................................ 17

Report of Fatwa and Research Dept. .................................................................. 18

Auditor’s Report. ............................................................................................... 19

The consolidated statement of the financial position. ........................................ 20

The consolidated income statement. .................................................................. 21

The statement of consolidated cash flows ......................................................... 22

The statement of changes in equity ................................................................... 23

Notes to the consolidated financial statement .................................................... 24

CONTENTS

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TAdAmON ISlAmIC BANkPublic limited Company

Established: November 28, 1981 Commenced Operations: March 24, 1983 Authorized Capital: 400 SDG million . Activities: Commercial Banking on Islamic Principles

Head Office Address: Baladia Street – khartoum – Sudan P.O. Box: 3154 – Khartoum. CABLE: Bankdaman key: + 249- 1 Fax: + 249- 183 -784624 Tel: 83771210 - 83771505 - 83771845 83771407 -83771085 -83770417 SWIFT: TISBSDKHA WEBSITE: www.tadamonbank-sd.com E-mail: [email protected] [email protected]

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Khartoum State:1.Baladia Branch (main Branch)Baladia Street – KhartoumP.O. Box: 3154Cable: BankdamanKey: + 249- 1 Tel: 83785481 - 83792619 83784960 - 012072088Fax: 83799214 - 83789869 83 743362 - 83785483 2. Barlaman Branch:Barlaman Street –KhartoumP.O. Box: 10630Cable: BankdamamKey: + 249- 1 Tel: 83761622 - 83774026 0120732809 Fax: 837616213. Al Souque Alarabi Branch:Al Souque Al Arabi-Khartoum Al Souque Al ArabiKey: + 249 - 1 Tel: 83792824 - 83783191 0120731840 Fax: 837831834. Al Saggana Branch:

BANk dIRECTORyBank Branches:

P.O. Box: 155 SagganaKey: + 249- 1Tel: 83471738- 0120731838Fax: 83471737

5. Omdurman Branch:P.O. Box: 846 OmdurmanCable: BankdamanKey: + 249- 1Tel: 87463999 - 877565554 - 83460999 0120716100 Fax: 87 5773306. Souque Lybia Branch:Souque Lybia OmdurmanKey: + 249- 1 Tel: 0120716087 - 0120716109 0120716088Fax: 01551325237. Saad Gishra Branch:Souque Saad Gishra –Khartoum BahriKey: + 249- 1Tel: 85344624 - 85330964- 0120726763 85339797 Fax: 853414508. Souqe shaabi Branch:Souque Shaabi - OmdurmanKey: + 249- 1Tel: 0120725225 - 85330964 - 85344624 85339797 Fax: 874500029. Al klakla Branch:Key: + 249- 1Tel: 83722429 - 0120725177 - 0120725180Fax: 83722428

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Gezira State:10.Wad Madani Branch:P.O. Box: 537 Wad MadaniCable: BankdamanKey: + 249- 511Tel: 832162 -832163 -0120719100 0120719105 Fax: 843409Sinnar State:11. Sinnar Branch:P.O Box: 163 Sinnarkey: +249- 561Tel: 822277- 823610 -0120719033Fax: 827119White Nile State:12. Kosti Branch.P.O. Box: 119 Kostikey: +249 - 571Tel: 822214 - 0120720235Fax: 82122813. RabakWhite Nile StateNorth Kordofan State:14. Elobied Branch P.O. Box: 426 Elobied key: +249- 611Tel: 840653 - 0120718299- 0120718696 Fax: 823113 15. El Rahad Branch:P. O. Box: 4 ElRahad key: +249Tel: 123003176 - 0120720226Fax: 845225

Red Sea State:16. Port Sudan Branch:P.O. Box: 475- Port SudanCable: TadabankTelex: 70035 Tadabankkey: + 249- 311Tel: 830800 - 829091- 0120726744Fax: 825045 - 829092Gadarif State:17. Gadarif Branch:P.O. Box: 156 Gadarifkey: + 249- 441Tel: 844106 - 843540- 0120726505Fax: 844670Kassala State:18. Kassla Branch:key: + 249 - 411Tel: 822571- 0120725935Fax: 829900South Darfour State:19. Nyala Branch:P. O. Box: 299 Nyalakey: + 249 -711Tel: 832445 - 0120718574Fax: 82760020. El Diain Branch:P. O Box: 5 EldiainCable: Bankdamankey: + 249- 712Tel: 832500 - 0120720228Fax: 832510 North state:21. Karima Branch:P. O. Box: 77 Karimakey: + 249 - 231Tel: 820062 - 0120715460- 0120717588Fax: 820996

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Sub-Branches:1. Sudan Academy for Banking and Financial StudiesSub- Branch:Through Barlaman Branch.Tel: +249- 1 83 747176 01207340612. Sudan judiciary Sub-BranchThrough Barlaman Branch.Tel: +249- 1 83 741998 01207340563. Alsouque Alshaabi Sub- Branch-KostiThrough Kosti Branch:Tel: + 249 571 824060 - 0120718623

Subsidiary Companies:1- Eltadamon Real Estate Co.LTD.Sudan - khartoum - Baladia StreetP.O.Box : 10495 KhartoumTel : + 249- 1 83 - 782976Fax: + 249- 183 - 7883562 -Tadamon Islamic Company for Trade & Investment LTDSudan - khartoum - Baladia StreetP.O.Box : 3154 KhartoumTel : + 249- 1 83 7103473 -Tadamon Islamic Company for Agricultural Development.4 - Tadamon Company for Financial Services.Sudan - khartoum - Baladia StreetP.O.Box : 3154 KhartoumTel : + 249- 1 83 - 771210Fax: + 249- 183 - 763364

Capital Investments:1 . Modern Medical Services Co. Ltd.2 . Wafera Modern Storage Co. Ltd.3 . Sudanese Bricks Co. Ltd.4 . East Jabel Aulia Development Co.Ltd (Sondos Agricultural Project).5 . Kagbar Electricity Co.6 . The National Media House Co. Ltd.7 . Electronic Banking Services Co. Ltd. Shamikh8 . Sudanese Free Zones and Markets Co. 9 . National Agency for finance & insurance of exports. 10. National petrolum co.11. Islamic development co.12. Finanicial investement bank.

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* Khartoum

Wad Madani

SinnarKosti

Elobied

Elrahad

Port sudan

Kassala

NyalaEl diain

Karima

BANk dIRECTORy

Khartoum Branches*

Elbaladia1Barlaman2Al Souque Alarabi 3Al Saggana4Omdurman 5 Souque Lybia 6Saad Gishra 7Alsouque Alshaabi(Omdurman)8

Al klakla9

Gadarif

Rabak

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1- Dr. Hassan Osman Sakota. Chairman2- Mr. Nur Eldin Saied Elsayed Deputy Chairman3- Mr. Fadul Ukasha Fadul Member4- Mr.Ali Khedir Hassan Kambal Member5- Mr. Abd Al Rahman Awaid Elgalassi Member6- Mr.Mohammed Ali Moh. Shepreen Member7- Mr. Galib Mohammed Ahmed Daffalla Member

Secretary, Board of Directors: Mr. Khalid Mukhtar Ahmed

Auditors: AbdAlaziz Ahmed For Accounting. Auditing & Finacial Consultancies Legal Advisor: Mr. Daffalla Kadoma Elhady (Advocate and Commissioner for Oaths )

Sharia Advisor: Mr.Mukhawi Mudawi Mukhawi

BOARd Of dIRECTORS

dr. Hassan Osman SakotaChAIRmAN

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ExECuTIvE mANAgEmENT

dEPuTy

ASSISTANTS

Mr. Abass Abd Allah Abass

Mr. Badreldin Mohamed Elhag Mr. Osman Abdelmajid Alwaad

Mr. Hussien Taj- Al-Asfia Hassan

gENERAl mANAgER

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INdICATORS Of WORld ECONOmy PERfORmANCE duRINg ThE yEAR 2015

INdICATORS Of SudAN ECONOmy PERfORmANCE duRINg ThE yEAR 2015

The most outstanding events witnessed by the world during 2015 was the collapse that occurred in the prices of the oil in the international markets which severely and adversely affected all aspects of the economy in the entire world at large .This led to a severe drop in the shares of oil and raw material with multiple figures and a rise in the financial returns of the stock exchange. This arbitrary compelled the governors of the central banks to preserve their flexible monetary policies at the time the reduction of oil prices contributed in reducing the indicators of inflation followed by fluctuation in the prices of foreign exchange. On the other hand china devaluated its currency august the same year so as to face the effects of reduction in export rates and in response to the market forces in an attempt to introduce the yuan to the basket of the international reserve system of the international monetary fund which now inches the dollar of USA,the Euro, the Japanese yen and the starling pound.

This year 2015 witnessed the commencement of the applying the five year program for the economic reform 2015 -2019 which aims at boosting the factors of eternizing the economic stability for achieving higher development rates aiming at opening more labor opportunities and increasing the grass domestic product (GDP ) by 7% and increasing the state revennes to 12% and reducing the deficient of budget to 1% from the gross domestic product along with presering the value of the national currency and the supply of money within the secured limits such that the rate of growth of money supply becomes 8% in addition to reducing the rates of inflation to a single number and reducing the rate of unemployment to 18%, besides reducing the deficient in the balance of payment and increasing the production of gold and sugar and raising exports of meet and gnmarabic .

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REPORT By BOARd Of dIRECTORS fOR ThE ThIRTy SECONd ANNuAl gENERAl mEETINg Of ShAREhOldERS fOR ThE fISCAl yEAR ENdINg 31/12/2015. Praise is to Allah with whose the good deeds are accomplished and peace be upon our Master Mohammed who was sent with the best religion and peace be upon all his courpanions and relatives.Dear shareholders : Assalamo Alaykam warahmata Allah, It is my pleasure to welcome you and address your honorable gathering while we hold our thirty second annual general shareholders meeting. In this meeting we show the outcomes of the bank activities and its financial position during the year 2015. We also review the development that occurred in various aspects of the bank activities .We invoke almighty Allah to perpetrate the bounty of security and salability and eternize the bounty of of development and salability in your esteem corporation.Dear shareholders: Despite the hard economic conditions, the domestic and despite and worldwide variable circumstances and their passive effects on the overall financial activity in the country , and despite the acute competition experienced by the banking system, your bank has played an effective vole in financing the various economic activates and as a result achieved considerable position rates during 2015.All these accrue placements are affribatable to the grace of Almighty Allah and then to the wise readership and management of the available resources. As we review the bank performance, we call you to contribute with opinions and proposals which may enable as to lay out the bank future policies and plans. Therefore, we are pleased to display in your meeting the most important financial indicators in accordance with the general audited financials lists.First: Indicators of the economic performance for 2015This year 2015 witnessed the commencement of the applying the five year program for the economic reform 2015 -2019 which aims at boosting the factors of eternizing the economic stability for achieving higher development rates aiming at opening more labor opportunities and increasing the gress domestic product (GDP ) by 7% and increasing the state revennes to 12% and reducing the deficient of budget to 1% from the gross domestic product along with presering the

value of the national currency and the supply of money within the secured limits such that the rate of growth of money supply becomes 8% in addition to reducing the rates of inflation to a single number and reducimg the rate of unemployment to 18%, besides reducing the deficiet in the balance of payment and increasing the production of gold and sugar and raising exports of meet and gnmarabic .Second : financial indicators of the bank performance 2015 the primary results of the bank for 2015 were good and taking precautionary steps in future for the bank to keep its financial status as a leading financial institution couitted to an ambitious action plan taking into account the fact that the year 2015 represents the third and last year for the third year plan of the bank 2013- 2015.Below is a summary of these outcomes:Revenues and expenditure: The total amount of the revenues for the year 2015, after deducting the share of the owners of absolute investment accounts, reached SDG 214.6 million compared with SDG 211.9 million for 2014 with an increase of 126.8 million with decrease of 24.8 with a net profit (after deducting Zakat and faxes ) of SDG 111.7 million against SDG076.3 million for the year 2014 with an increase of 46.3%.Investment in local currency: The ceiling at the end of the year reached SDG 2078.1 million against SDG 1934.8 million for the year 2014 with an increase of 7.4% and that in accordance with the various finance formulas. External relations and foreign currencies: Basid on the good reputation acquired by the bank which resulted from permemant keenness to meet the cominttunents and satisfy the requirements of clients in the domain of foreign currencies and external commercial transactions, the bank managed to keep its distinct situation in the scope of foreign currencies and external commercial transactions besides boosting the network of correspondents inspilte of the difficult economic circumstances which swept many countries the thing which positively reflected on the ability of the bank to satisfy all circumstances and meet foreign currency requirements beside settling the export operations together with meeting the

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requirements of travel and medication aboard.Deposits in foreign currency:Regarding deposits in foreign currency, it reached SDG 542.2 million .compared with SDG 491 with an increase of 10%Investment in foreign currency: The bank has satisfactory managed to employ its resources of foreign currenciesDeposits in local currency: The savings and current deposits in local currency during this year amounted to SDG1.338.1 million compared with SDG 1130.9 for the year 2014 with an increase of 18%.Rights of the owners of absolute investment accounts: At the end of the year the rights of the absolute investment accounts reached SDG 1029 million against SDG 1077.8 million in year 2014 with a decrease of 5%.Revenue of banking operations: The financial return from banking operations reached SDG21.7 million against SDG 29.6 million for the year 2014 with a decrease of 26% compared with the year 2014. Other revennes: The other revennes amounted to SDG44.02 million against SDG 38.5 million in the year 2014 with an increase of 14.2%.The banking technology: In continuation to the accomplishments in this vital field, a hovezertal expansion took place through adding new money exchanges in each of the security bureau (Ibn Khaldoon ), Rabak and sennar .The brabches if each of Balagiya, the parliament, Omdurman, Libya, Kosti, Nyalah and the head quarter have shifted to operate according to system of lynex .The banking services across the internet have been tested along with operating the banking system with the electronic clearance system besides operating the automatic settlement system with the National Switch ( Sudapan ).Training human resources and Media Training has its vital role in promoting skills and upgrading capacities of laborers in line with implimerating the principles of quality and excellence. In this regard the bank has placed special emphasis on carrying out the training plan .As a result the system of the comprehensive staff has been launched in all branches for the sake of delivering the distinctive banking services in both speed and competence in addition to the training cowses conducted in and outside Sudan to cope with the latest training policies.Work environment and Geographical expansion:Concern over reforming and improving the work environment and erecting the suitable sphere for

the personnel has been the policy adopted by the administration of the bank. As a result the year 2014 has witnessed the liuplimentattion of maintenance works throughout the different branches of the bank.The social and culture role of the bank:The bank continued carrying out its vital role in both the cultural and social domains through contributions to the needy and financial aids to the poor and weak categories in the community by possession of the factors of production and improving the work environment. The bank has had a considerable role in supporting the health domain through establishing rend dialysis units and constructing rooms to help in providing health care. Internally, the sports activities continued for the bank personnel to enable them participate in the sports competitions conducted by the central bank of Sudan.The bank accomplishments during 2015: The bank has kept its leading position between the operating banks as it scored the distinction grade in the field of management of the banking technology infra –stricture. It also scored the grade of excellence in the field of information technology within the framework of participating in the Sudan prize for the banking technology administered by the Sudanese bank federation. The bank obtained the prize of excellence within the activities of the banking conference organized by the Arab banks federation Cairo. This is the only prize being recognized professionally as it is awarded by an organ which has a pure banking specialty.The rights of property: With the grace of Allah Almighty the rights of property has risen this year to SDG 428.77 million compared with SDG 378 million in the year 2014 with a growth rate of 13 %.Finally we express our gratitude’s to all those who contributed in achieving these bright results in the bank performance, particularity our dear shareholders and investment partners who provided trust and support. Also we thank the executive administration and external auditor and all the personnel of the bank for their effort to achieve these good results.We would also like to express our thanks to the central bank of Sudan for its sponsorship and support to our bank.May Allah Almighty reward all of you.Wassalamo Alaykum Warahmato AllahHassan Osman SakkotaChairman of the board of directors

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Total Assets (Total Balance Sheet)The Bank's total assets reached SDG 3,852.61 Million by the end of the year 2015 compared to SDG 3,634.09 Million in 2014 .The table & graph below explain total Assets development from 2011 to 2015.

Owner’s Equity:Shareholders Equity reached SDG 428.7 million by the end of the year compared to SDG 378.27 million in 2014 showing a growth rate of 13 %. The following table and graph explain the progressive development in owners equity from 2011 to 2015.

RESulTS Of ThE BANk'S ACTIvITIESduring The year 2015

Amounts in SDG MillionsThe amountsThe year

2,353.06 2011 3,077.3920123,356.1020133,634.0920143,852.612015


305.992011 342.652012362.022013378.272014428.772015

Total Deposits:By the end of the year 2015, the bank's total deposits (current, saving , investment and cash collaterals) reached SDG 1880,36 Million compared to SDG 1625,10 Million in the previous year showing a growth rate of 15.7%. The table and graph hereunder explain that development.


1,8952011 2,45420122,7052013

1625,1020141880.362015

Investment in Local Currency:The volume of liquidated investment operations by the end of the year reached SDG 2078.10 million compared to SDG 1924,8 million in the previous year distributed among different investment modes (Murabahat, Musharkat, Salam, Mugawalat, Securities, Participation in others companies, Others) and covering various economic sectors(Domestic Trade, Transport, Export, Industry, Agriculture, Productive Families, Real State). showing a growth rate of 7.4%

Investment in Foreign Currencies:The Bank was able to employ its resources in foreign currencies in good manner.

Total Assets

Owner’s Equity:

Total Deposits:

2011

20

12

2013

20

14

2015

2011

20

12

2013

20

14

2015

2011

20

12

2013

20

14

2015

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Equity of unrestricted investment accounts holders: The balance of these accounts (local and foreign)by the end of the year reached SDG 1029.09 million compared to SDG 1077,76 Million in 2014.The following table and graph explain the said development for the last five years (2011- 2015).


679,672011 1,034,522012990.112013

1,077.7620141029.092015

Total revenues and Expenses:The bank total revenues for the 2015 after the deduction of the share of unrestricted investment accounts holders reached SDG 214.56 million compared to SDG 211.94 million in 2014 while total expenses for the year 2015 reached SDG 95.3 million corresponding to SDG 126.8 million in 2014.This resulted in total profits amounted to SDG 111.75 million corresponding to SDG 76.3 million in year 2014. The following tables and graphs explain the development in revenues, expenses and total profits before Zakat and Taxes during the last five years (2011 -2015).


112.122011 136.742012108.822013114.752014119.242015


170.142011 208.322012181.822013211.942014214.562015


582011 722012692013972014

95.32015

Total Revenues:

Total Expenses:

Total Profits Before Zakat & Taxes:

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

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In the Name of Allah the Most Gracious the Most MercifulSECRETARIAT Of BOARd Of dIRECTORS

Resolution No. 1/2016Approval of the board of director’s report, the consolidated budget, profit and loss account and the tow reports of the certified accountant and the fatwa and reaches for the period ending on 31/12/2015.Resolution No. 2/2016Approval of settling profits of shareholders after capitalization at the proportion of 30%.Resolution No. 3/2016Approval of paying the financial reward of the members of the board of directors.Resolution No. 4/2016Approval of paying the incentives of the personnel and delegating the board to lay down the rules governing the mode of payment. Resolution No. 5/2016.Approval of transferring the remaining profits as reserve of capitalResolution No. 6/2016Delegating the board of directors to appoint the certified accountant for the year 2016 and fixing the chargers.

May Allah almighty make and efforts success.

Khalid Mukhtar AhmedSecretary of the board of Directors

Resolutions of Thirty second annual Shareholders Meeting:

Saturday 19 /03 /2016

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read: (Fatwa and Research Department is responsible for ensuring that all the bank’s business is performed in accordance with islamic shari’a rules and principles). The department conducted its review which included examining on a test basis of each type of transaction the relevant documentation and procedures adopted by the bank. 3/ The department planned and performed its review to obtain the information and explanations which it considered necessary in order to get sufficient evidence to give reasonable assurance that the Bank has not violated islamic shari’a rules and principles. 4/ The department also has met employees who have executed some operations and has been satisfied that they have been executed in accordance with the principles and rules of islamic shari’a. 5/ In our opinion:a) The contracts, transactions and dealings entered into by the bank during the year ended on 312015/12/ that we reviewed are done in compliance with the Islamic shari’a rules and principles. And we have demonstrated the notes which we have examined to conform with its provisions.b) The allocation of profits and charging of losses relating to investment accounts conform to Islamic Shari’a rules and principles. c) All earnings that have been realized from sources or by means prohibited by Islamic shari’a have been disposed of to charitable purposes according to the fatwas issued from Islamic banks’ conferences. d) The calculation of Zakat is done according to Islamic shari’a rules and principles. We beg Allah the Almighty to realize to us all success and straight - forwardness. Wassalam Alikum Wa Rahmat Allah Wa Barakatauh Place: Khartoum - Sudan Date: 10 Rabia Thany 1437 20 January 2016

Mukhawi Mudawi Mukhawi Ismail Shari’a Advisor

In the Name of Allah The Most Gracious The Most MercifulREPORT Of fATWA & RESEARCh dEPARTmENTTO ThE gENERAl ASSEmBly Of ShAREhOldERS IN ITS 32ThE hOldINg SESSION fOR ThE fINANCIAl yEAR 2015.

According to the context of article (59) of Tadamon Islamic Bank’s Articles of Association which read: (Fatwa and Research Department should present an annual report to the General Assembly of Shareholders containing its view and notes about to what extent the bank’s operations comply with Islamic Shari’a Rules) and in accordance with the Governance Standard No. (1) issued by Accounting and Auditing Organization for Islamic Financial Institutions, which obliges Shari’a Supervisory Boards for banks and financial institutions to prepare and present annual reports for Shareholders of these Institutions. In the light of the indicators set out by the already mentioned standard, Fatwa and Research Department presents the following report to the General Assembly of bank’s Shareholders in its thirty two holding session: 1/ the said department has conducted shari’a controlling to the principles and contracts relating to the bank’s dealings performed during the financial year 2015.2/ To be sure to what extent the bank’s dealings and contracts comply with Islamic shar’ia, the department conducted the shari’a and legal auditing to all the branches of the bank and to the Investment department, foreign exchange department and investment in foreign currencies department and has been assured that they are complied with Sahri’a rules and principles and also with fatwas, circulars and specified guidelines issued by the High Supervisory Shari’a Board for Banks and Financial Institutions and with those issued by this department. According to the context of article (57) section (a) of the Bank’s Articles of Association which

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material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Bank as of 31 December 2015 and its financial performance and its cash flows for the year then ended in accordance with Accounting Standards of The Accounting and Auditing Organization for Islamic Financial Institutions.

AbdAlaziz Ahmed Hussein– PartnerFeb. 15, 2016

We have audited the accompanying consolidated financial statements of Tadamon Islamic Bank, which comprise the financial position as at 31 December 2015 and the income statement, cash flows statement and statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements The Directors are responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Financial Accounting Standards issued by The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Audit Standards Issued by (AAOIFI). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of

INdEPENdENT AudITORS’ REPORT TO ThE ShAREhOldERS Of TAdAmON ISlAmIC BANk

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CONSOlIdATEd STATEmENT Of fINANCIAl POSITION AT dECEmBER 31, 2015

Mr : Abbass abdalla abbass Fadul Ukasha Fadul Dr : Hassan Osman Sakota General Manager Member of Board of Directors Chair of Board of Directors

Assets and other Debit BalancesItem Notes December 2015 December 2014

SDG SDGCash and cash equivalents 3 1,392,514,384 1,292,898,357 Sales receivables 4 918,443,343 653,795,596 Investments in securities 5 928,940,451 1,054,142,819 Mudaraba investments 6 184,870,475 198,916,470 Musharaka investments 7 42,389,882 23,665,460 Realstate Investment 8 3,463,861 4,317,210 Assets acquired for Murabaha financing 9 63,401,002 15,878,072 Other Assets 10 29,211,688 115,769,540 Investments in companies 11 142,699,693 136,912,211 Fixed assets 12 146,680,124 134,587,458 Total Assets 3,852,614,904 3,630,883,193 Liabilities, Unrestricted Investment Accounts and Shareholders’ EquityLiabilitiesCurrent Accounts 13 1,880,357,264 1,621,934,724 Other Liabilities 14 472,129,468 521,502,136 Provisions 15 42,258,368 31,401,205 Total Liabilities 2,394,745,100 2,174,838,065

Equity of unrestricted investment account holders 16 1,029,099,409 1,077,769,612

Shareholders’ EquityPaid up capital 17 228,672,956 228,672,956 Statutory reserve 18 127,768,836 114,741,737 Reserves of foreign currency 7,411,556 - General reserve 48,752,093 18,695,869 Fixed assets revaluation Reserve 19 16,164,954 16,164,954 Total Shareholders’ Equity 428,770,395 378,275,516 Total Liabilities, Unrestricted Investment Accounts and Shareholders’ Equity 3,852,614,904 3,630,883,193

Contra accounts 28 1,065,074,678 930,362,870

The attached notes 1, through 38 Form an integral part of these Financial statement

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CONSOlIdATEd INCOmE STATEmENT yEAR ENdEd dECEmBER 31, 2015


IncomeItem Notes December 2015 December 2014

SDG SDGIncome from deferred sales 20 102,361,163 73,465,707 Income from investments 21 94,885,365 117,962,626 Total income from finance and investments 197,246,527 191,428,333 Less: Return on unrestricted investment accounts (50,183,715) (49,494,096)Bank’s share in income from investments (as Mudarib and fund owner)

147,062,812 141,934,237

Income from banking services 22 21,762,158 29,627,503 Income from foreign currency revaluation 1,709,855 1,828,038 Other income 23 44,029,339 38,558,360 Total Income Bank 214,564,164 211,948,138 ExpensesStaff cost 24 (41,023,217) (39,069,629)General and administration expenses 25 (48,756,914) (47,441,634)Depreciation (5,515,814) (4,474,182)Investment and Finance Provisions - (6,176,714) provision for Impairment of Investmant - (29,646,944)Central Bank Penalties (28,500) (30,000)Total Expenses (95,324,444) (126,839,103)Net income before zakah and tax 119,239,720 85,109,035 Zakah provision 26 (3,642,227) (4,454,946)Tax Provision (3,912,283) (4,337,079)Net income for the year 111,685,210 76,317,010 Earnings per share 27 0.49 0.33


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STATEmENT Of CONSOlIdATEd CASh flOWS fOR ThE yEAR ENdEd dECEmBER 31, 2015

Operating activitiesItem December 2015 December 2014

SDG SDGNet income for the year 111,685,210 114,755,979 Adjustment for:Depreciation of fixed assets 4,792,275 4,474,182 Depreciation of fixed assets( Disposal ) - (296,586)Zakat Peaid - (7,502,518)Provisions (29,646,944)

116,477,485 81,784,113 Changes in operating assets, liabilities and unrestricted investment accountsSales receivables (264,647,747) (67,367,231)Investments 121,377,290 (76,276,038)Other assets 86,557,852 (58,074,600)Other liabilities (49,372,668) 103,522,097 Assets acquired for Murabaha financing (47,522,930) - Provisions 10,857,163 - Current accounts 258,422,540 58,209,160 Equity of unrestricted investment account holders (48,670,203) 87,662,266

67,001,297 47,675,654.00 Net cash from (used in) operating activities 183,478,781 129,459,767 Investing activitiesPurchases of fixed assets (27,650,135) (36,977,453)Disposal of Fixed Assets 10,765,194 6,589,252 Investments in companies (5,787,482) (136,114,821)Net cash from (used in) investing activities (22,672,423) (166,503,022)Financing activitiesDividends paid (68,601,886) (50,816,213)Reserves 7,411,555 - Net cash from (used in) financing activities (61,190,331) (50,816,213)Increase / (Decrease) in cash and cash equivalents for the year 99,616,027 (87,859,468)

Cash and cash equivalents at the beginning of the year 1,292,898,357 1,380,757,825 Cash and cash equivalents at the end of the year 1,392,514,384 1,292,898,357


23

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24

1- Incorporation and activities Tadamon Islamic Bank (the Bank) was established in 28 Nov.1981a public joint stock company with limited liability under the Companies Act of 1925 under the number (2074). The Bank is providing commercial,financial,investments,development projects financing and banking services according to Islamic rules and principles.The Bank is providing its services from the head Quarter which is located at Baladia street and through its (19) branches located in Khartoum and other states as there are five companies owned by 99 % of them only two are working. Altadamon Real estate Company Altadamon Financial Services CompanyAltadamon Trading Company ( It froze its activities during the year 2002 ) Altadamon Agricultural Company ( It froze its activities during the year 2001 )Altadamon Services Company ( It froze its activities during the year 1992 ) 2- Significant accounting policies i) Basis of preparation 1. The financial statements are prepared in accordance with the standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), as required by the Central Bank of Sudan and Shari’ a Supervisory Board (SSB) requirements. 2. The financial statements have been presented in Sudanese pounds (SDG), the functional currency. 3. The financial statements are prepared on the historical cost concept except for the re-measurement at fair value of fixed assets. 4. The Bank uses the accrual basis in recording its assets, liabilities and expenses. The Consolidated finanacial statements comprise the financial statements of the Bank in addition to the consolidated financial statements of the subsiddiaries of the bank, Altadamon Real Estate Company (the bank owns 99% of its shares), Altadamon Financial Services Company Ltd. (Bank owns 99% of its shares) with the exception of Sudanese Eguptian Bank- a public joint stock company with limited liability in whcih the bank

owns 69.9% of its shares). due to the lack of its financial statements at the date of preparation of these consolidated lists. Thus the inclusion of its investments at cost in the consolidated statements of financial position as estimated income in the consolidated income statement. The financial statements of subsidaries for the same fisical year was prepared using accounting policies consistent with the Bank’s accounting policies. The Bank’s policy states that the financial statements of subsidiaries are united in the full financial statements from the date of purchase, which is the date on which the Bank has control, this situation will continue unless the Bank loses control of them. ii) Fixed assets Fixed assets are stated at cost less accumulated depreciation and any impairment in value. Depreciation of fixed assets is calculated on a straight line basis over their estimated useful lives, as follows: Motor vehicles 20 %Machinery and equipment 10 %Furniture 10 %Buildings 2.5 %IT equipment 30 %The carrying amounts of the Bank’s fixed assets are reviewed at each balance sheet date to determine whether there is any indication or objective evidence of impairment. If any increase in the recoverable values the new values will be booked and difference between the carrying values and the new recoverable values will be charged to equity to decrease the revaluation reserve. Impairment and uncollectibility of Financial assets an assesment is made at each balance sheet date to detremine whether there is objective evidence that a financial asset or group of financial assets may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined and any impairment loss is recognised in the income statement. an assesment is made at each balance sheet date to detremine whether there is objective evidence that a financial asset or group of financial assets may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined and any impairment

NOTES TO ThE CONSOlIdATEd fINANCIAl STATEmENTS yEAR ENdEd dECEmBER 31, 2015


25

loss is recognised in the income statement. a. Assets carried at amortized cost, based on the expected cash flows discounted at a rate of mpairment is determined by the original effective profit . b. Assets carried at cost, the impairment is the present value of future cash flows discounted at thecurrent market rate of return similar financial asset. c. In the case of investments in equity available for sale, the revocation impairment losses are added to the cumulative changes in fair value in the statement of shareholders’ rights. Estimation uncertainty The basic assumptions concerning the future and other key sources of estimation confirmed at the balance sheet date, and which have a significant risk as a cause material adjustment to the carrying amounts of assets and liabilities within the next financial year and about the erosion associated with financial assets are described below: Allocation of funding:The Bank reviews its finances doubtful debts on a monthly basis to assess whether the provision should taper off in the income statement recorded. In particular, the work of the administration estimate the amounts and dates of future cash flows when determining the required provisions required levels. Such estimates are necessarily based on assumptions about several factors involving varying degrees of judgment and uncertainty, and actual results may differ resulting in future changes in such provisions. Virtual lives of its property and equipment Determining the estimated useful lives of its property and equipment for calculating depreciation. This estimate is determined after taking into account the expected duration and nature of the use of the existing corrosion or commercial obsolescence. The management on an annual basis to review the residual value and useful lives and a provision for future consumption adjustment when management believes that the useful lives differ from the fixed estimates. Evaluation of Unquoted investments he fair value of unquoted funds is based on the highest valuations provided by the fund / investment managers.

There are some investments that can not determine the reliability of estimates and resulted carried at cost. iii ) Foreign Currencies Transactions in foreign currencies are recorded at the exchange rate prevailing on the transaction date . Monetary assets and liabilities at balance sheet date, denominated in foreign currencies, are translated at the exchange rates prevailing at the balance sheet date. Foreign Currency differences related to normal bank transactions in investments denominated in foreign currencies, whether gains or losses, are treated as revaluation differences. Other realized and unrealized gains or losses on foreign exchange are credited or charged to the income statement. iv ) Revenue Recognition a. Murabaha and Istisnaa The profits from Murabaha and Istisnaa transactionsare recognized on a cash basis after the collection of the value of the premium.. b. Mudaraba Financing Mudaraba financing is recognized in the Income Statement at the time of liquidation or to extent of profits being distributed or at declaration date or when such profits can reasonably be estimated. c. Musharaka and Salam Financing The profits from Musharaka and Salam transactions are recognized at the time of the liquidation. d. Income from banking services Income from banking services is recognized at the time the related services are provided and the amount of revenue can be measured reliably h. Dividends income and Profit from Securities. Dividend income and profit from securities is recognized when declared or when such profits can reasonably be estimated. v ) Provision for doubtful debts The provision for doubtful debt is based on the assessment of collectability of each debt and in accordance with the directives of the Central Bank of Sudan and the Bank’s policy. vi) Cash and cash equivalents For the purpose of preparation of the statement of cash flows, cash and cash equivalents consist of cash with banks (current accounts) and balances with Central Bank of Sudan and cash in hand.

26

vii) Provisions Provisions are recognized when the Bank has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and can reliably be measured. viii) Employees end of service benefits End of service benefits payable to employees at the end of their services are provided for in accordance with Sudanese labour law. ix) Measurement of investments & finance at the end of the period a. Sales receivable Sales receivable are initially recorded at cost, at the end of the financial period sales receivables are measured at their face value or net realizable value, whichever is less. b. MudarabaMudaraba is measured by the amount paid or the amount placed under the disposition of the Mudarib less the portion of the Mudaraba capital recovered from the Mudarib (if any). c. Musharaka Musharaka is recorded at cost less any impairment loss in the statement of financial position. d. Available for sale investments Available for sale investments which are shown in the balance sheet at fair value and any difference is carried to the revaluation reserve as part of equity. Where fair value cannot be reliably measured, those investments are carried at cost. x ) Zakah and Tax treatment The Bank is subject to the Zakah and Tax according to regulations prescribed by Zakah and Tax authorities. The Bank is subject to Business Profit Tax after excluding profits from investments in Shahama’s bonds. Investment Held-to-maturity It is recognized as investments which are classified in order to hold to maturity at cost and the cost includes all expenses related to access to these investments at the end of the financial period of these investments appear on the balance sheet at cost less provision for impairment in value, if any.xi ) Return on unrestricted investment account holders The Return on unrestricted investment accounts is calculated on a yearly basis. The Bank allows

the investment account holders to withdraw funds from their investment accounts. profit are allocated between the unrestricted investment account holders and bank on the basis of (70: 30 % ) therof to the bank as mudarib . profits are allocated between the un restricted investment account holders and the equity owners according to the funds invested by each . The Return on unrestricted investment accounts is calculated on a yearly basis. The Bank allows the investment account holders to withdraw funds from their investment accounts before maturity with a condition that they forfeit any accrued profits , and in the case of Mudaraba transactions with specified period of investment, the Bank as Mudarib, retains the right to hold the Mudaraba instrument to it’s maturity. xii ) Impairment and uncollectibility of financial assets An assessment is made at each statement of financial position date to determine whether there is objective evidence that a specific financial asset may be impaired. If such evidence exists, an impairment loss is recognised in the consolidated statement of income. xiii ) Liabilities Liabilities are recognized for amounts to be paid in the future for materials and services received, whether billed by the supplier or not. These are carried at cost, which is the fair value of the consideration to be paid in the future for amounts payable. 3- Shari’ a Supervisory Board (SSB)The bank is not subject to the supervision of sharia supervisory board , instead it is operation are subject to the bank is Fatwa and Research Department . this department supervises the bank transaction and operation from Sharia perspective


27

3- Cash and cash equivalentsItem December 2015 December 2014

SDG SDG

Cash in hand and in ATM (Local Currency) 31,891,923 39,919,643 Cash in hand ( Forign Currency ) 1,390,914 2,160,352 Balances with Central Bank of Sudan 1,024,060,064 872,780,439 Cash with foreign correspondent banks 38,785,417 105,198,596 Statutory cash reserve (31/) 296,386,066 272,839,327

1,392,514,384 1,292,898,357

SDG.8.810.735 within correspondent banks balances represent freezed assets

Statutory cash reserve (3 / 1 )Item December 2015 December 2014

SDG SDG Local currency 201,330,862 160,787,939 Foreign currency 95,055,204 112,051,388

296,386,066 272,839,327

4- Sales receivablesItem December 2015 December 2014

SDG SDGMurabaha 705,635,919 439,532,536 Salam - 5,356,425 Mugawla 396,988,075 336,508,961 Ijara 2,832,236 7,325,498 Istisna receivables 20,475,000 43,875,000

1,125,931,230 832,598,420 Less: Deferred profits (199,778,945) (171,646,019)

926,152,285 660,952,401 Less : provision for doubtful debts (Note 41/) (7,708,942) (7,156,805)Sales receivables (net) 918,443,343 653,795,596


28

4 /1- Provisions for finance and investmentsItem December 2015 December 2014General provision : SDG SDGBalance at the beginning of the year 8,231,841 4,252,499 Provision for the year (7,564,258) 3,979,342 Balance at the end of the year 667,583 8,231,841 Specific provision :Balance at the beginning of the year 10,744,727 8,547,355 Provision for the year (1,486,158) 2,197,372 Bad Debt (476,758) - Balance at the end of the year 8,781,811 10,744,727 Total Provision (General +Specific) (Note 4/ 2) 9,449,394 18,976,568 Total Provision Surplus/ expense charged (General +Specific ) for the year (Note 24)

(9,050,416) 6,176,714

Surplus has been reclassified to “provisions for doubtful debts” appearing as debit balances disclosed on the assets side

4/ 2.Total Provisions for finance and investments (General and Specific )Item December 2015 December 2014

SDG SDGProvision for doubtful debts-deffered sales (note4) 7,708,942 7,156,805 Provision for Mudaraba losses (Note 6) 1,020,580 257,646 Provision for Musharka losses (Note 7) 719,872 291,682

9,449,394 7,706,133

5- Investments in securities held to maturityItem December 2015 December 2014

SDG SDGShahama securities 559,818,941 687,844,828 Liquidity Fund - 14,505,955 Khartoum refinery Musharaka Sukuk (shasha) 24,250,000 24,250,000 Ijarah certificates (Shama) 29,960,000 29,960,000 Shares Sudanese Telecommunications (Sudatel ) 454,558,454 437,228,980 provision for Impairment of Investmant (139,646,944) (139,646,944)

928,940,451 1,054,142,819


29

6- Mudaraba FinanceItem December 2015 December 2014

SDG SDGMudaraba with customers - 5,966,900 Portfolio Finance Note (6/ 1 ) 94,476,972 87,615,568 Investment Funds Note (6/ 2 ) 8,101,926 7,879,158 Mudaraba with financial institutions ( Foreign ) 35,297,500 52,256,092 Mudaraba with financial institutions (Local ) 48,014,657 45,456,398

185,891,055 199,174,116 Less : provision for investment losses (Note 4 / 2) (1,020,580) (257,646)

184,870,475 198,916,470

6/ 1 Portfolio Finance Item December 2015 December 2014

SDG SDGHousing portfolio 42,993,922 31,942,588 Portfolio financing agricultural season 7,813,422 3,942,705 Graduates projects 1,000,000 1,000,000 Academia portfolio 600,000 600,000 Aman portfolio 620,740 2,050,275 Consumer Goods portfolio 8,448,888 8,080,000 Gum Arabic portfolio - 10,000,000 Vegetable oil portfolio 3,000,000 - Cotton Financing portfolio 30,000,000 30,000,000

94,476,972 87,615,568

6/ 2 Investment Funds These funds are Islamic Endowments managed by Islamic Development Bank- Jeddah, and used in development projects (building schools, residential and commercial buildings….etc). They pay annual dividends.


30

7- Musharaka InvestmentsItem December 2015 December 2014

SDG SDGMusharaka 43,109,754 23,957,142 Less : provision for impairment of investments (Note 4/ 2) (719,872) (291,682)

42,389,882 23,665,460

8. Real estate investments:Real estates investments appearing as part of the Tadamon Rea Estates Company’s investments.

9-Assets acquired for Murabaha financingGoods purchases for Murabaha financing .Balances to be removed from books pending the signing of Muarabha contract.

10- Other AssetsItem December 2015 December 2014

SDG SDGStaff loans 25,789,723 24,055,990 Exchange differences are waiting ratification by the bank of sudan

9,348,247 16,114,377

Musharaka (Gum Arabic) 2,095,766 2,095,765 Sudan local bank window - 68,519,230 Inventory - printing 1,285,049 1,016,074 Letters of Grantee Debtors 90,000 90,000 Prepaid expenses Note (101/) 1,798,633 1,475,420 Other Note (102/) 338,282 2,402,684 Provision for doubtful debts (11,534,012) -

29,211,688 115,769,540

(10/ 1) Prepaid expenses December 2015 December 2014SDG SDG

Rents 556,194 140,574 Uniform 205,419 186,950 Notebooks 453,000 460,000 Business profits tax paid in advance 515,311 512,311 Insurance 68,709 175,585

1,798,633 1,475,420


31

(10 /2) Other Item December 2015 December 2014

SDG SDGStocks of stationary and printing 19,920 11,610 Legal Prepaid expenses - 17,961 Maintenance paid in advance 19,917 44,079 Advertising paid in advance - 436,700 Stamp fees 50,121 86,926 Other receivables 27,300 661,155 Export 221,024 1,144,253 Total 338,282 2,402,684

11- Investments in companiesItem December 2015 December 2014

SDG SDGSudanese Bricks Company 13,155 13,155 Medical Services Company 2,000 2,000 Electronic Banking Services Co. 116,898 116,898 Wafra Co. For storage 3,630 3,630 Kagabar Electricity co. 50,000 50,000 National Media House 100,000 100,000 Sondos Agricultural project 30,000 30,000 Sudanese Agency for Insurance & Exports Financing 139,373 139,373 The financial Investment Bank 200,000 200,000 National petroleum company 18,312 18,312 Anaam company 43,549 43,549 Islamic Development company 80,931 80,931 Sudanese Egyptian Bank 141,901,845 136,114,363

142,699,693 136,912,211


32

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13- Current accountsItem December 2015 December 2014

SDG SDGLocal currency 1,165,613,654 1,004,891,469 Foreign currency 539,528,914 488,436,156 Saving Accounts (Local ) 172,542,021 126,017,546 Saving Accounts (Foriegn ) 2,672,675 2,589,553

1,880,357,264 1,621,934,724

14- Other liabilitiesItem December 2015 December 2014

SDG SDGAccrual expenses 256,191 142,410 Inward transfers 1,565,610 960,277 Bills payable 110,194,900 128,516,577 Cheques under collection 3,061,166 3,630,034 Cash deposit against guarantees 1,899,553 102,833,911 Margin of guarantee 16,002,265 5,238,368 Amount held back 160,936,544 30,424,925 Shareholders accrued dividends for the year 2015 68,601,887 60,000,000 Shareholders accrued dividends 80,053,264 60,944,267 Sudan foreign bank window 1,725,045 66,703,171 Stamp collections 47,540 414,496 Provision for forign Exchange 2,339,782 17,126,034 Provision Exchange valuation adjustment - 8,213,376 Rents received in advance 941,373 611,248 Audit fees 50,000 80,000 Staff Bonus 14,057,000 16,900,000 Fees Legal Adviser - 54,000 Board of directors remuneration 1,700,000 1,360,000 Surplus of provision for financing risks - 11,270,435 Other Note (14 /1) 8,697,348 6,078,607

472,129,468 521,502,136


34

Other Note (14/ 1)Item December 2015 December 2014

SDG SDGDeposits under demand 577,780 1,272,527 Personal income tax & stamp duty - 36,283 Amanat of the investment of branches 5,569,473 - Closed Branches Liquidation 6,762 5,937 Amanat of the owners of the building 82,720 9,640 National restrictions requirements 1,669,753 3,147,137 Export accounts 790,860 1,607,083 Total 8,697,348 6,078,607

15- Provisions :-Item December 2015 December 2014

SDG SDGStaff end of service benefits 28,624,793 17,800,459 Zakat 3,688,254 4,454,946 Business profit tax 4,945,435 4,994,807 Deposits Guarantee Fund 4,999,886 4,150,993

42,258,368 31,401,205

16- Equity of unrestricted investment account holdersItem December 2015 December 2014

SDG SDGUnrestricted investment account holders balance (local ) 520,386,264 545,509,593 Unrestricted investment account holders balance (Foriegn ) 508,713,145 532,260,019

Unrestricted investment account holders return for the year 50,183,715 49,494,096

Profits paid during the year (50,183,715) (49,494,096) 1,029,099,409 1,077,769,612


35

17- CapitalItem December 2015 December 2014

SDG SDGAuthorized capital 400,000,000 400,000,000 Paid up capital 228,672,956 228,672,956

18- Statutory reserve :Being legal reserve. As per Compan’s law and central bank requirements. 10% of the period’s profits must be transferred to the legal reserve .The bank does not calculate any legal resrve during the financial year . No transfer is made when the legal reserve balance and paid up capital are equal.

19- Fixed assets revaluation reserve:In 2007 the bank revalued its fixed assets by a specialized firm.

20- Income from Deferred salesItem December 2015 December 2014

SDG SDGMurabaha income 67,249,873 68,506,974 Salam income - 127,572 Muqawala income 29,711,290 3,556,161 Istisnaa income 5,400,000 1,275,000

102,361,163 73,465,707

21- Income from investmentsItem December 2015 December 2014

SDG SDGMusharaka 1,989,112 4,096,155 Profit from Securities & Shares 92,251,943 111,954,270 Income from foreign investments 225,415 1,406,182 Mudaraba 120,800 302,354 Income from Investments in companies 298,095 203,665

94,885,365 117,962,626


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22- Income from banking servicesItem December 2015 December 2014

SDG SDGBook keeping 2,830,998 2,687,432 Letters of credit 6,219,396 16,758,977 Commission on checks collections and transfers 7,435,303 6,242,473 Letters of Guarantee 4,760,983 3,563,473 Checkbook commission 515,478 375,148

21,762,158 29,627,503

23- Other IncomeItem December 2015 December 2014

SDG SDGCommunication & ATM commission 635,749 284,167 Gain on sale of fixed assets 2,754,482 296,586 Service Income 1,563,077 1,603,232 Maintenance Income 310,391 250,202 Revenue from valuation - companies 5,865,002 5,288,459 Return rents 1,227,584 1,754,601 Storage return 1,054,664 452,159 The collection of debts 764,550 1,337,465 Insurance commission 1,033,433 7,763 The collection of debts ( investment ) - 69,492 Portfolio management fees 223,530 - Income from investments 28,596,877 27,214,234

44,029,339 38,558,360


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24- Staff costItem December 2015 December 2014

SDG SDGBasic salary 8,054,861 7,729,498 living allowance 2,292,202 2,217,862 Representation allowance 227,422 146,324 Mileage allowance 332,474 338,059 Transport allowance 548,175 537,802 Meal allowance 1,568,259 1,527,234 Social allowance 1,588,059 1,557,015 Hospitality allowance 189,820 194,404 technical allowance 244,490 178,383 Intensity allowance 139,084 132,600 Courts allowance 6,000 6,000 Responsibility allowance 121,180 144,706 Tickets 5,802,906 5,452,114 Uniform 289,462 234,732 Health Insurance 3,265,974 2,763,198 Overtime 2,301,317 2,561,327 Transportation out of the state 28,498 20,741 Eids bonus 5,885,721 5,862,726 Social Insurance 2,355,356 2,301,915 Clothing allowance 4,004,065 3,478,507 Accessories schools 1,712,155 1,578,514 Allowance 65,738 105,968

41,023,217 39,069,629


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25- General and administration expensesItem December 2015 December 2014

SDG SDGTravel expenses 1,461,031 1,533,169 Printing & stationery 496,475 581,731 Communication 490,521 345,296 Entertainment & refreshment 249,354 175,385 Electricity & water 840,663 809,551 Legal consultancy fees 77,827 152,381 Insurance 1,057,889 949,095 Donations and gifts 779,444 614,817 Rent 1,845,027 1,623,415 Subscription to Professional Institutes 526,149 422,794 Training 2,323,393 1,965,917 Rublic relations 1,943,933 1,506,517 General meeting expenses 97,575 88,805 Tax settlement 242,000 1,057,940 Liquidity expenses 3,089,801 1,974,785 Repairs and Maintenance (Building ) 594,609 386,370 Repairs and Maintenance (Equipment) 2,171,708 1,848,205 Repairs and Maintenance (Motor Vehicles) 1,230,681 1,002,377 Deposits Security Fund 3,850,000 3,200,000 Audit fees 120,000 130,000 Board of Directors remuneration 1,700,000 1,360,000 Staff bonus 14,057,000 16,900,000 End of service benefits 3,581,987 3,526,436 Companies operating expenses 1,817,004 1,661,601 social services 1,638,514 1,500,933 ATM Expenses 1,010,029 661,007 Security services 722,183 682,330 Miscellaneous Note ( 25 /1 ) 742,117 780,777

48,756,914 47,441,634


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( 25 /1 ) Miscellaneous Item December 2015 December 2014

SDG SDGPost 35,183 25,045 Cleaning expenses 538,367 490,715 port rage & transportation 108,267 80,027 consultancy & Researches 9,000 15,000 Electronic Clearing expenses 51,300 108,693 Expenses of a small tools for maintenance - 61,297

742,117 780,777

26-Zakat & Tax accountItem December 2015 December 2014

SDG SDGZakatBank zakat provision 3,277,101 4,150,900 Estate company zakat provision 352,298 275,902 Financial company zakat provision 12,828 28,144 Total 3,642,227 4,454,946 Tax account - - Bank tax provision 3,442,827 3,849,100 Estate company tax provision 384,738 329,229 Financial companytax provision 84,718 158,750 Total 3,912,283 4,337,079

27- Earning Per ShareItem December 2015 December 2014

SDG SDGNet income for the year 111,685,210 76,317,010 Number of shares 228,672,956 228,672,956 Earning Per Share 0.49 0.33


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28- Contra accounts Contra accounts not included in the financial statements of the Bank are as follows:

December 2015 December 2014SDG SDG

Letters Of Credit 15,242,858 162,606,708 Letters Of Guarantee 138,386,746 55,360,792 Cheques under collection 911,445,074 712,395,370

1,065,074,678 930,362,870

29- Concentration of investments : Economic sector The total Finance( 1,208,324,227 SDG ) it was distributed according to economic sectors as follows:

December 2015 December 2014Agriculture 6% 6%Manufacturing 19% 13%Exports & Import 4% 4%Transportation and Storage 10% 7%Commercial 6% 9%Professionals, craftsmen and productive families 33% 20%Real State 20% 38%Staff loans 2% 2%

100% 100%

30- Related party transactionsThese represent transactions with related parties, i.e. shareholders , board of directors and senior management of the Bank, and companies of which they are principal shareholders. These transactions are conducted in an arm length basis. Balances with related parties included in the balance sheet are as follows:

Major Shareholders & Board of directors & related companies

Top mamangement of the bank

Total as of 31 December 2015

SDG SDG SDGBalance sheet items :Murabaha 5,400,000 - 5,400,000

31- Credit riskCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Bank attempts to control credit risk by monitoring credit exposures continuously.The Bank seeks to manage its credit risk exposure through the diversification of financing and investment activities to ensure that there is no undue concentration of risks with individuals or groups of customers in specific locations or business. The Bank also takes collateral when appropriate.32- Liquidity riskLiquidity risk is the risk that the Bank will be unable to meet its net funding requirements. Liquidity risk can be caused by market disruptions or credit downgrades, which may cause certain sources of funding to dry up immediately. To mitigate this risk, management has diversified funding sources and assets are managed with liquidity in mind, maintaining a healthy balance of cash, cash equivalents, and readily marketable securities. The contractual maturities of assets and liabilities have been determined on the basis of the remaining period at the balance sheet date to the contractual maturity date. Management monitors the maturity profile to ensure that adequate liquidity is maintained.

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The contractual maturities of assets and liabilities have been determined on the basis of the remaining period at the balance sheet date to the contractual maturity date. Management monitors the maturity profile to ensure that adequate liquidity is maintained.

Assets Within 3 months

From 3 From 6 More than a year Total

to 6 Month to 12 MonthCash and cash equivalents 1,095,153,555 297,360,829 1,392,514,384

Sales receivable 48,290,834 230,385,315 260,938,495 378,828,699 918,443,343 Investments in securities - - 928,940,451 928,940,451

Mudaraba investments - 45,010,700 35,297,500 104,562,275 184,870,475

Musharaka investments - - - 42,389,882 42,389,882

Realstate Investment - - - 3,463,861 3,463,861 Assets acquired for Murabaha financing 63,401,003 - - - 63,401,003

Other Assets - - 2,211,688 27,000,000 29,211,688 Investments in companies - - - -

Shares in other companies 142,699,693 142,699,693

Fixed assets - - - 146,680,124 146,680,124 Total Assets 1,206,845,392 275,396,015 298,447,683 2,071,925,814 3,852,614,904 Shareholder’s equity and LiabilitiesShareholder’s equity - - - 428,770,395 428,770,395 Current accounts 855,154,513 356,761,050 331,546,354 336,895,347 1,880,357,264 Other liabilities 2,039,000 49,073,361 190,080,562 230,936,545 472,129,468 Provisions 4,999,886 8,633,689 - 28,624,793 42,258,368 Equity of un-restricted investments account

524,723,556 157,417,067 154,741,590 192,217,196 1,029,099,409

Total liabilities and shareholders’ equity 1,386,916,955 571,885,167 676,368,506 1,217,444,276 3,852,614,904


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33- Market riskMarket risk is the risk that the value of an asset will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual investment or its issuer or factors affecting all investments traded in the market.Market risk is managed on the basis of pre-determined asset allocations across various asset categories, diversification of assets in terms of geographical distribution and industry concentration, a continuous appraisal of market conditions and trends and management’s estimate of long and short term changes in fair value.

34- Shares prices riskShares prices risk is a risk that the value of the shares will fluctuate as a result of changes in the market prices of the shares. The Board of Directors of the Bank sets limits on the amounts and types of shares to be acquired for investments purposes. The investments committee of the Bank regularly monitors these limits.

35- Profit rate riskThe profit rate risk refers to the risk due to change of profit rates, which might affect the future earnings of the Bank. Exposure to profit rate risk is managed by the Bank through diversification of assets portfolio and by matching the maturities of assets and liabilities.In line with the policy approved by the Board of Directors, the assets and liabilities committee performs regular review of the assets and liabilities in order to ensure that the maturity gap between assets and liabilities is maintained at minimum levels and also to ensure that financing and investments are made for quality assets at higher rate of return.

36- Currency riskCurrency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.Currency risk is managed on the basis of limits determined by the Bank’s Board of Directors. These limits are monitored continuously to ensure that the net exposure is kept on an acceptable level.

2015 2014Item SDG SDGAssets 1,288,846,611 1,349,054,948 Liabilities 1,288,846,611 1,349,054,948

37- Capital adequacyThe Bank monitors the adequacy of its capital using the ratios established by Central Bank of Sudan.

Core capital 234,014 226,046 Total risk weighted assets 1,513,263 1,575,929 The Bank’s capital adequacy ratio 15% 14%Minimum capital adequacy ratio required 12% 12%

38-Reclassification of comparative figuresIt has been reclassified some comparative figures for 2014 in accordance with the presentation and disclosure standards.This classification has no impact on net income or equity.


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