bahrain islamic bank b.s.c. · we conducted our review in accordance with international standard on...
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Bahrain Islamic Bank B.S.C.
INTERIM CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS
30 JUNE 2006 (UNAUDITED)
. Phone: 17 53 54 55Fax: 17 53 54 [email protected]/meC.R. No. 6700
. P.O. Box 14014th Fioor - The Tower
Bahrain Commercial ComplexManamaKingdom of Bahrain
REVIEW REPORT TO THE BOARD OF DIRECTORS OFBAHRAIN ISLAMIC BANK B.S.C.
We have reviewed the accompanying interim consolidated balance sheet of Bahrain IslamicBank B.S.C. ("the Bank") and its subsidiary ("the Group") as of 30 June 2006, and therelated interim consolidated statements of income, cash flows, changes in equity, sourcesand uses of good faith qard fund and sources and uses of zakah and charity fund for the sixmonth period then ended. These interim condensed consolidated financial statements andthe Bank's undertaking to operate in accordance with Islamic Shari' a rules and principlesare the responsibility of the Bank's Board of Directors. Our responsibility is to issue areport on these interim condensed consolidated financial statements based on our review.
We conducted our review in accordance with International Standard on ReviewEngagements 2400. This Standard requires that we plan and perform the review to obtainmoderate assurance as to whether the interim condensed consolidated financial statementsare ftee of material misstatement. A review is limited primarily to inquiries of Bankpersonnel and analytical procedures applied to financial data, and thus provides lessassurance than an audit. We have not performed an audit and, accordingly, we do notexpress an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that theaccompanying interim condensed consolidated financial statements are not presented fairly,in all material respects~ in accordance with the accounting policies in note 2.
~~A~-G:t T H
6 July 2006Manama, Kingdom of Bahrain
A Member of Ernst & Young Global
Bahrain Islamic Bank B.S.C.CONSOLIDATED BALANCE SHEET30 June 2006 {Unaudited}
Audited31 December
2005BD'OOO
30 June2006
BD '000
ASSETS
10,448156,42129,4599,889
80,7483,3825,174
12,75210,3412,082
Cash and balances with the BMA and other banksMurabaha receivablesMudaraba investmentsMusharaka investmentsNon-trading investmentsInvestments in associatesInvestments in Ijarah assetsIjarah Muntahia BittamleekInvestments in propertiesOther assets
12,288297,533
15,52610,81492,5373,2615,086
20,42312,3863,062
320,696TOTAL ASSETS
LIABILITIES, UNRESTRICTED INVESTMENT ACCOUNTS AND EQUITY
50,6757,869
47,3453,562
LIABILITIESCustomers' current accountsOther liabilities
50,907TOTAL LIABILITIES 58,544
UNRESTRICTED INVESTMENT ACCOUNTS 342,978 197,881
EQUITYShare capitalShare premiumReserves
28,3362,726
40,332
25,~2,i
43,E
TOTAL EQUITY 71,394 71,908
TOTAL LIABILITIES, UNRESTRICTEDINVESTMENT ACCOUNTS AND EQUITY 472,916 320,696
CONTINGENCIES (Note 3) 8,550 7,090
{~~-l~_.e~ ~
Yousif Saleh KhalafChief Executive Officer
2
100726~82
Bahrain Islamic Bank B.S.C.CONSOLIDATED STATEMENT OF INCOME30 June 2006 (Unaudited)
Six months ended 30 JuneThree months ended 30 June1006
BD'OOO
2005
BD'OOO
2005
BD'OOO
2006
BD'OOO
INCOME
10,141 5,3205,866 2,745Income from Islamic finances
Return on unrestricted investment accountsbefore Bank's share as a Mudarib
Bank's share as a Mudarib2,375(243)
1,196(100)
8,839
(3,618)5,360
(2,106)
2,1323,254 1,096 5,221.Return to unrestricted investment accounts
Bank's share of income from unrestrictedinvestment accounts (as a Mudariband Rabalmal) ,649 4,920 3,1882,612
,422330 167 2,491
2,67646
644
,68243
254
2,437
185
,435
Income from investmentsGain on fair value adjustment for investments
in propertiesBank's share in the profit of associatesOther income 13
5,564 3,364Total income
EXPENSES
918133384
758123352
,822264742
,476245693
Staff costs
DepreciationOther expenses
Total Expenses 1,233 2,828 2,4141,435
Net income before Zakah 4.129 2,131 7,949 4,175
Zakah (35) (69)
NET INCOME FOR THE PERIOD 2,0964,129 7,949 4,106
BASIC EARNINGS PER SHARE (fils) 14.97 8.48 28.82 16.61
~~~~~~~Khalid Abdulla AI Bassam
ChainnanYousif Saleh Khalaf
Chief Executive Officer
~e attached notes to 4 fonn part of these interim condensed consolidated financial statements.
3
:eahrain Islamic Bank B.S.C.CONSOLIDATED STATEMENT OF CASH FLOWS30 June 2006 (Unaudited)
Six months ended 30 June2006
BD'OOO2005
BD'OOO
7,949 4,106
264
(2,676)(114)
(46)
245(1,682)
(357)(43)
OPERATING ACTIVITIESNet profit for the periodAdjustments for non-cash items:
DepreciationGain on fair value adjustment for investments in propertiesGain on sale of investments in properties and Ijarah assetsBank's share in the profit of an associate
5,377 2,269
(57)10,534(2,277)(2,816)
(772)10,1901,866
Operating profit before changes in operating assets and liabilities
Changes in:Mandatory reserve with BMAMurabaha receivablesMudaraba investmentsMusharaka investmentsOther assets
'Customers' current accountsOther liabilities
Net cash (used in) from operating activities
(1,965)(141,112)
13,933(925)
(1,155)3,3304,307
18,937
INVESTING ACTIVITIESPurchase of Ijara Muntahia BittamleekDisposal (Purchase) of investment in properties and Ijara assetsPurchase of non-trading investments and associates
Net cash used in investing activities
(7,671)835
(16,048)
(22,884)
(7,341)(3,093)(6,780)
(17,214)
3,674(2,715)
FINANCING ACTIVITIESIncrease in unrestricted investment accountsDividends paidDirectors' remuneration paidZakah paidCharitable contributions paid
Net cash from financing activities
145,097(3,795)
(120)(138)(75)
959
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(125) 2,682
Cash and cash equivalents at beginning of the period4,483 3,269
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD4,358 5,951
CASH AND CASH EQUIVALENTS COMPRISE:Cash and balances with BMA, excluding mandatory reserve depositsBalances with other banks 2,866
1,4922,0993,852
4,358 5,951
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Audited31 December
2005BD'OOO
30 June2006
BD'OOO
Original sources of qard fund
1253
1253
Contribution by the BankDonations
128128
Movement of funds
10912
1231
Cash balance at the beginning of the periodInstallments received
121124
Uses of qard fund
2351
MarriageRefurbishmentMedical treatmentOthers
11Total uses
1235
1235
Cash balance at the end of the periodQard Hasan installments outstanding as at end of the period
128128
The attached notes-
QARDFUND30 June 2006 (Unaudited)
Audited31 December
2005BD'OOO
30 June2006
BD'OOO
Sources of zakah and charity funds
147138
13990
Undistributed zakah and charity funds at the beginning of the period
Zakah due from the Bank for the period285229Total sources of funds during the period
Uses of zakah and charity funds
101917
University and school studentsPhilanthropic societiesAid to needy families 32
14632Total uses of funds during the period
139197Undistributed zakah and charity funds at end of the period
7
CHARITY FUND30 June 2006 (Unaudited)
Bahrain Islamic Bank B.S.C.NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALSTATEMENTS3'0 June 2006 (Unaudited)
INCORPORATION AND ACTIVITIES
Bahrain Islamic Bank B.S.C. ("the Bank") was incorporated in the Kingdom of Bahrain by Amiri Decree No.2of 1979, under Commercial Registration No.9900, to carry out banking and other financial trading activities inaccordance with the teachings of Islam (Shari'a). The Bank operates under a commercial banking licence issuedby the Bahrain Monetary Agency. The Bank's Shari'a Supervisory Board is entrusted to ensure the Bank'sadherence to Shari'a rules and principles in its transactions and activities.
The Bank participated in 100% of the share capital in AI Emar Real-Estate Company 8.S.C. ("subsidiary"). AIEmar was incorporated on 8 April 2003 and has an authorized and paid-up share capital ofBD 10,000,000.
The Bank's registered office is at Building 722, Road 1708, Block 317, Manama, Kingdom of Bahrain.
The Bank has twelve branches, all operating in the Kingdom of Bahrain.
ACCOUNTING POLICIES2
Basis of preparationThese interim condensed consolidated financial statements have been prepared in accordance with theI~ternational Accounting Standard 34 "Interim Financial Reporting". The accounting policies used in thepreparation of the interim condensed consolidated financial statements are consistent with those used in thepreparation of the annual financial statements for the year ended 31 December 2005, which [mancial statementswere prepared in accordance with Financial Accounting Standards issued by the Accounting and AuditingOrganisation (AAOIFI) for Islamic Financial Institutions. For matters for which no AAOIFI standards exist, theBank uses the relevant International Accounting Standard issued by International Accounting Standards Board.
Basis of consolidationThese interim condensed consolidated financial statements include the financial statements of the Bank and itssubsidiary. A subsidiary is an entity over which the Bank has control to govern its financial and operatingpolicies in order to obtain benefits from its activities. The subsidiary is consolidated from the date it wasiitcorporated and was included in the interim condensed consolidated financial statements using the purchasemethod of accounting. All intercompany balances, transactions and income have been eliminated onconsolidation.
3 CONTINGENCIES
Credit related commitments
AuditedJ 1 December
2005BD'OOO
30 June2006
BD'OOO
Letters of creditGuarantees
7,950600
5,4941,596
8,550 7,090
4 INCOME FROM INVESTMENTS IN SECURITIES