Annual Report 2011 · 9-Mr. Mutasim Abdel Aziz Fagier Ahmed Risk Department 10.Mr. Osama Ali Ibrahim El-Sadiq Financial Affairs 11. Mr. Osman Sa‘ied Haj Noor External Relation &

The Annual Report 2011w w w . s h i b . s d

2011Annual Report

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In the Name of Allah, Most Gracious, Most Merciful (Those who swallow usury cannot rise up save as he ariseth whom the devil hath prostrated by (his) touch. That is because they say: Trade is just like usury; whereas Allah permitteth trading and forbiddeth usury. He unto whom an admonition from his Lord cometh, and (he) refraineth (in obedience thereto), he shall keep (the profits of) that which is past, and his affair (henceforth) is with Allah. As for him who returneth (to usury) - Such are rightful owners of the Fire. They will abide therein. (275))

(Surat Al-Baqarah, 275)

4 The Annual Report 2011w w w . s h i b . s d

The Vision(We look forward to see the Bank in the foremost part of the Sudanese banks.)

The Mission At the Islamic Bank, we endeavour for the comprehensiveness of Islam in order to achieve pioneering in the banking performance by talent-developing of the human being and utilizing the on-going banking technology and contributing in achieving the desired economical and social development so as to provide integral solutions that satisfy concerned stakeholders.

Vision & Mission

5The Annual Report 2011w w w . s h i b . s d

No. Subject Page

1 Directory of HQ branches and the affiliate company 62 geographical spread of branches 73 Board of Directors 84 Sharia Supervisory Board 95 Executive Management 106 National and International Economic Developments for 2011 137 Chairman Board of Director’s address before the 22st Shareholder’

General Assembly

15

8 Indicators of the Banks Financial Performance Development

For Three Years (2009 - 2011)

19

9 General Auditor’s report 2010 Statement of Financial position as at 31/ 12 / 2011 2211 Income Statement for the year Ending 31/ 12 /2011 2312 Statement of Cash flows for the year Ending 31/ 12 /2011 2413 Statement of Changes in owners’ equity for the year Ending 31 /12 /2011 2514 Notes on Financial Statements 2615 Sharia Supervisory Board’s report 3816 Resolutions of the22st Shareholders’ General Assembly 3917 Correspondents Network 40

Table of Contents


Directory Of The Head Quarter And BranchesHead Quarter addressElsayed Abdurrahman St.. Eastern Khartoum- SudanTel: (+24983771735 83774728- - 83779078 (1- Fax: (+24983773585 – 83784282 (1- Swift: (isbssdkh) P.O Box: 10036, Khartoum- Sudan Postal Code: 11111Website: www.shib.sdE-mail: [email protected] BranchesTower Tel: (+249795721 (183- Fax: 795720Khartoum Tel: (+249783043 (183- Fax: 785098Alsouque Alarabi (Kh). Tel: (+249783921 (183- Fax: 783925Industrial Area (Kh). Tel: (+249472837 (183- Fax: 472849Saggana Tel: (+249487958 (183- Fax: 460714Alsouque Almahali Tel: (+249420183 (183- Fax: 420182Elkalakla Tel: (+249722002 (183- fax: 722002Omdurman Tel: (+249553330 (187- Fax: 554606Souque Shabi Om Tel: (+249454156 (187- Fax: 0159337051Souque Libya Tel: (+249730515 (187- Fax: 730514Indus. Area (Kh. North). Tel: (+249330582 (185- fax: 331141Port- Sudan. Tel: (+249826042 (311- fax: 826046 Wad Medani. Tel: (+249840445 (511- Fax: 840445Kosti Tel: (+249824645 (571- fax: 824850Gedarif Tel: (+249843481 (441- Fax: 843479Dongola Tel: (+249823839 (241- Fax: 822292 Alhafeer Tel: (+249730149 (183- Fax: 730148Alobaid Tel: (+249843930-843910 (611- Fax: 843920Souque «6» office Elhaj Yusuf Tel: (+249) 120819296 Fax: 0155117213

Subsidiary Company.Modern International Investment Co.Iron and steel Building – Second flour- flat no (1)Tel: (+249775778 – 776768(183- fax: 776026P.O. Box: 11235Website: www.micisd.com

Directory of HQ, & branches


geographical spread of branches

Port SudanAlhaffeer

Dongola

Gadarif

Wad Madani

Khartoum

Operatig Branches in Khartoum State

TowerKhartoumAl Souque AlarabiIndusrial Area(KH)SagganaAl Souque AlmahaliAlkalaklaIndustrial Area (Kh.North)OmdurmanSouque Shabi (Om)Souque LybiaSouque «6» office Elhaj Yusuf

KostiAlobaid


Board of Directors

Mr. Al Bagir Yusuf Mudawi

Chairman of the Board of Directors


Board of Directors

Dr. Ziyada Abdullah Ziyada.Mr. Ahmed Ali Ahmed Alhussain. Mr. Bader El Dien Salih Abdul Rady.Mr. Abdullah Idrees Fadul Idrees.Mr. Suleiman Mohamed Ahmed Mohamed.Eng. Ibrahim Musa Al- Khalifa.Mr. Abd Elaziem Hassan Mohamed.Mr. Mohamed Yahiya Mohamed El Jaldi.Dr. Abdul Rahiem Mohamed Bakhiet.

Secretary of the Board of Directors11. Mr. Mohamed Bushra Khalafallah

Sharia Supervisory Board: Dr. Mohammed Alfatih Hamid ChairmanDr. Ahmed Ibrahim Hammad Alturabi MemberDr. Abdel Wahid Othman Mustafa MemberMr. Mohamed Kamal Eldien Abd Elmajid Reporter

Legal Advisor:Mr. Mutasim Hassan Mahgoob.

Legal Auditor:Messrs: the National Audit Chamber


Executive Management

General ManagerMr. Hassan Mohamed Al-Hassan El-amien



Deputy General ManagerMr. Abdulbaqi Dafa Allah El-amien

G.M. Assistant for Investment & Planning

Mr. Abdullah NoureddinAhmed Mohamed

G.M. Assistant for Banking Affairs and Technology

Mr. Kamal El-Sheikh Al-Tayeb Mohamed


Managers of Departments:1-Mr. Ghazi Abdel Hay Bin Oaf Abd El-rahiem Compliance Officer2-Mr. Salah Said Ahmed Bandi Internal Control and Inspection3.Mr.Ahmed Abdel Hay Mohamed Ahmed Banking Affairs & Branches4.Mr. Ahmed Abdel Hay Mohamed Ahmed Marketing & Public Relations (Designated) 5-Mr. Ibrahim Abdul Moneim Zayed Farah Executive Office6. Mr. Ali Hassan Hammad El-Hussain Human Resources7-Mr. Satti Mohammed Satti Hamad Ziyada Information Technology8-Mr. Hassan Mahmud Ahmed Abd El-Ghafar Legal Affairs9-Mr. Mutasim Abdel Aziz Fagier Ahmed Risk Department 10.Mr. Osama Ali Ibrahim El-Sadiq Financial Affairs11. Mr. Osman Sa‘ied Haj Noor External Relation & Foreign Currency12-Mr. Salaheddien Hassan Ahmed Khalid Administrative Affairs 13-Mr. Osama Mohamed Said Ahmed Investment & Finance14.Mr. Badr Mohamed Al-Jack Al-Abbas Planning & Research15.Dr. Abdu Ajlan Babikir Salama Training &Quality Control

Branches Managers

1. Mr. Aarif Mohamed Bashir Ali Tower2. Mr. Khaliefa Alawad Al-Aqib Ahmed Saggana3. Mr. Kamal Abd Allah Mohamed Abd El-Qadir Khartoum Industrial Area4. Mr. Hider Abd El-Wadood Mohamed El-Kalakla5. Mr. Abd Allah Mohamed El-Hassan Ahmed Khartoum6. Mr. Mohamed Al-Hussain Ahmed Ja’al Omdurman7. Mr. Abd El-Aziz Elhaj Ahmed Wad Madani8. Mr. Abd El-wahab Mohamed Abd El-Kariem Alsouque Alarabi (Kh).9. Mr. Abd El-Moniem Ibrahim Al-Sheikh Babikir Alsouque Almahali10. Mr. Salah Mustafa Mohamed Abd El-Kariem Souque Shabi Om11. Mr. Mutawakil Ahmed Mohamed Ahmed Suhaib Port – Sudan12. Mr. Mohamed Ahmed Mohamed El-Sheikh Indus. Area (Kh. North).13. Mr. Salaheddien Ibrahim Sheikh Ibrahim Gedarif14. Mr. Adam Tahir Wugdab Mohamed Souque Libya15. Mr. Nazar Mohammed Alzain Abdulrahman Alobaid16. Mr. Mubarak Mamoon Abd El-Sammad Kosti17. Mr. Abd El-Haliem Bashier Haroon Bashier Dongola18. Mr. Abd Muhsin Abdel Aziz Fagier Ahmed Alhafeer



Global EconomicGrowth Rate:IMF Report of September 2011 stated that the recovery of the world economy has become uncertain due to the slowness of the developed countries’ economies since the beginning of the year. Moreover, the vagueness and uncertainty of the global financial position under the consequences of the financial crisis in the EURO zone have negatively affected the world economy. Therefore, the economic growth rate has decreased from 5,1% in 2010 to 4% during 2011. This regression has also affected the Middle East & North African countries’ economic growth rate which decreased from 4,4% in 2010 to 4% in 2011 and is expected to reach to 3,6%.Inflation Rate:Inflation rate in developed countries has increased from 1% in 2010 up to 1.9% in 2011, and it is expected to decrease down to 1.2% by the year 2012 according to the IMF expectations. Middle East and North African countries –including Sudan- have witnessed a huge increase in the inflation rate from 6.8% in 2010 up to 9.9% in 2011, and are expected to decrease to 7.6% in 2012.Saving and Investment:International saving rates as a percentage of the GDP have increased from 23,3% in 2010 up to 24,2% in 2011; and are expected to reach up to 24,9% in 2012. In the Middle East & North African countries, saving rates have increased from 34,8% of the GDP in 2010 up to 37,1%. According to the IMF, saving rate is expected to decrease to 36,1% in 2012. Unlike the developed countries, the Middle East & North African countries have witnessed decreasing investment levels as a percentage of the GDP from 27,1% in 2010 to 25,7% in 2011, and are expected to increase up to 26,8% in 2012.Unemployment:Unemployment rate in developed countries including USA, EURO zone, Japan, UK & Canada has decreased from 8.2% in 2010 to 7.9% in 2011. Local Economic:Growth Rate:According to IMF estimations, Gross Domestic Product (GDP) rate has decreased from 6.5% in 2010 to -2.0% in 2011 due to South Sudan secession. GDP is expected to grow as of -4% during 2012.Unemployment Rate:According to IMF estimations, unemployment rate is expected to decrease from 13.7% in 2010 to 13.4% in 2011, and may reach 12.2% in 2012 following the South Sudan secession.Inflation Rate:Inflation rate has increased from 15,4% at the end of 2010 up to 18,9% at the end of September 2011. Pressure practiced over exchange rate was the main cause behind its rate increase according to the Central Bank of Sudan periodical for the month of September 2011.Money Supply:Money supply has reached up to 41,853 M SDG at the end of 2011 compared to 35,498 M SDG at the end of 2010. The Central Bank of Sudan periodical indicates that the current growth rate of the Money supply is considered as high, particularly subsequent to the quit of oil from the economy’s cycle. Thus, the increase of the cash block balance without a corresponding real increase in production causes an increase in inflation rates.Foreign Exchange Rate:According to the Central Bank of Sudan, the EURO exchange rate corresponds to 3,3861 SDG at

Economic Developments For The year 2011


the end of 2011, compared to 3,3462 SDG at the end of 2011. In return, EURO exchange rate has increased in the parallel market up to about 6 SDG. The US Dollar has also witnessed a fluctuation in the parallel market at the beginning of the year 2012. Developments as regards banking environment:Banking System Deposits:The total deposits in local currency has increased from 20,741 M SDG in 2010 up to 22,828 M SDG at the end of 2011, with an increase rate of 10%. On the other hand, foreign currency deposits have decreased from 5,638 M SDG in 2010 to 5,161 M SDG at the end of the year 2011, with a decrease rate of 8%.Bank financing:According to the 2011 financing policy directives, the Central Bank of Sudan has continued instructing local Banks to finance production sectors in order to achieve financial stability. The total bank financing has increased from 20,599M SDG in 2010 up to 22,867 M SDG in 2011, with an increase rate of 11%.As regards total bank financing flow related to different financing modes for December 2011, were as follows: Murabaha 59% (at the fore); Musharaka 10%; Mudaraba 8%; Muqawala 5%; Lease (Ejara) 6%; Salam 0,4% and others 17%. Concerning financing modes applied by other sectors, they are as follows: local trading 16,9% (at the fore); industry 11,2%; real estates 10,8%; imports 7,3%; transportation and warehousing 6,5%; agriculture 6,4; export 3,6%; energy & mining 0,2% and others 27,1%.Murabaha’s Average Profit Margins:Murabaha’s average profit margins of local Banks has reached up to 10,8% in December 2011, where applied Murabaha’s profit margins in Banks have ranged between 6% to 15%.Banking Deposits Revenues Curve:According to the Central Bank of Sudan estimations, the expected average revenues of local banks’ investment deposits by the end of the year 2011 is about 8.2%, given that the average general revenue for the year 2010 was about 9.1%.

References:-1- IMF- World Economic Outlook2- Central Bank of Sudan Economic Bulletin3- Central Bank of Sudan Periodical Newsletter

Developments For The Economic


Speech of Mr. Chairman of the Board of DirectorsBefore the Shareholders’ The Twenty Second General Meeting for the Previous Year

ended on 31 December 2011

Thank to Allah (SWT), and May His Prayers and Peace Be to Our Prophet (PPBUH), who has been brought to the world to fill it with mercy; and may Peace & Prayers be to his family & companions and all true followers until the day of resurrection, Amen.Dear Sirs, - Shamal National Bank (SHIB) Shareholders- Central Bank of Sudan Representatives- Representative of Khartoum Stock Exchange - General Auditor of the Republic of Sudan- Members of the Board of Directors- Sharia Supervisory Board in the Bank- Dear Guests- Dear staff

(Assalamu alaikum wa rahmatu Allah wa barakatuh)First, I would like to take this opportunity to express true thankfulness to you for responding to our invitation to attend the 22nd General Meeting of your esteemed Bank, having the honor to address your esteemed presence in order to review the Bank’s performance and achievements during the previous fiscal year ended on 31 December 2011.

Dear Brothers,In the near past, and through this platform- we demonstrated the major challenges facing the Bank during the past years, highlighting the BOD efforts in taking the first steps towards the safe zone as well as the efforts of staff in this respect. I would also like to express true congratulations on the fact that the Bank has managed to tackle all obstacles along its course of development in order to push your esteemed institution forward on the way of development. Today, we are going to listen together and explore the Bank’s 2011 achievements.Dear Shareholders,Meetings with your honors every year in this occasion is the major point from which efforts of improvements and setting of objectives and strategies are launched. I would also like to state that your opinions and comments in the previous general meeting have been well considered and appreciated in regards to every step taken by the Bank during the past year towards achieving the Bank’s aims and objectives. I also seek your permission to highlight the Bank’s achievements during the past year as detailed below:As regards Finance, the Bank’s capital has been raised from 90 million SDG up to more than 100 million SDG for the purpose of raising the Bank’s efficiency and financial capability. In this respect, and in this stage, your Bank is considered as in comply with the Central Bank’s requirements in respect of capital, a matter that positively reflected on the general financial performance that witnessed an increase in assets, deposits and property rights. Moreover, financing has increased in a way that increased the total Bank revenues up to 17% compared to the year 2010.Without further elaborating, you may explore below figures which further demonstrate the same:

Speech of Mr. Chairman of the Board of Directors


Item 2010 2011 Growth RateTotal Assets 754,719 811,119 7%Total Financing 506,561 567,234 12%Total Deposits 579,824 606,910 5%Total Revenues 55,503 64,800 17%Total Property Rights 104,720 120,973 16%

It’s my pleasure to point out that the Bank has been classified by the Central Bank of Sudan –based on preventive control measures and CAEL indicators- as improved from (Fair) up to (Satisfactory), according to the Bank’s assessment in the fourth quarter of the year 2011.

Bank Name C A E L Composite Rate RatingShamal Islamic Bank 2 3 2 2 2.25 Satisfactory

This achievement has been accomplished as a result of the improvement of asset classification, as fluctuation rate has been reduced from 8% in 2010 to 6,5% in 2011 as an outcome of the efforts of the whole Bank’s departments, as well as the efforts of the investment & financing department and the Bank’s top management.Dear Brothers,These achievements are not made by mere accident; nay, realized as an outcome of a number of measures and decisions taken by your esteemed Board of Directors and adopted by your executive management and staff. On the managerial level, the Board has formed its committees according to the directives and requirements of the Central Bank of Sudan, besides setting up their work regulations in the various fields of the Bank’s business, on the fore comes the Board Committee, Audit and Regulations Committee, Policies Committee & Risk Committee.Within the framework of geographical expansion, the Bank has opened its Branch in Elobeid, besides approving a Branch at the International University of Africa and upgrading (Soug “6”) as an cashier Office to a Branch; In addition to expansion through other distribution channels, sales points, internet services & other electronic services. Dear Brothers, The Board of Directors have paid a special attention to effective marketing in the Bank which is the only way to encounter today’s furious competition in order to connect the Bank with its customers and all bodies dealing with it. Therefore, the Bank has adopted an efficient marketing policy through utilization of various mass media including internet, in addition to the Bank’s website for enhancing the name, motto and unique services of the Bank in the minds of its customers. This marketing policy has resulted in good outcome that has been reflected on the Bank’s financial performance as we aforementioned.Technically, the Bank has went on implementing modern technologies and developing systems a matter that was apparently demonstrated on the development of banking services provided by the Bank. In this respect, new services have been added such as electricity purchasing, banking internet. New programs and systems have been developed for most departments and branches of the Bank,



in addition to the establishment of an information centre, rehabilitation of network connections and connecting them to fiber optic cable, besides improvement of devices and system servers.As regards foreign relations and foreign exchange, the Bank has maintained continuous serious efforts despite economic crisis Sudan gradually witnessing represented in weak foreign currency resources which are necessary for creating strong foreign relations with Banks and financing institutions in the Arab, European and Asian regions. The Bank’s BOD has, thus, intensified contact with correspondents, initiating considerable export operations. The Bank has achieved and is still making continuous successes; for example it has been agreed with the Lebanese French Bank- Beirut to enter into the Bank’s correspondents system, besides increasing granted Banking facilities. Moreover, foreign currency deposits have been increased as of 25%.As regards administration, the Bank has paid attention to administrative areas on the whole levels:-As for training, it has been adopted as a pressing priority; therefore the Bank has prepared a training plan during 2011 that covered other areas besides human resources development such as administrative & technical areas, in addition to quality and languages. A number of (15) training sessions have been prepared in the Bank’s training centre, in addition to more than (86) external training sessions held in Khartoum state and (7) in the other states. Also, the Bank has participated in the training sessions organized by the Central Bank of Sudan, the Federation of and Sudan Academy for Banking and Financial Sciences.

As regards improving the general image and provision of supporting services, the Bank has paid attention to the general image of the Bank and its branches as regards modernization of buildings and furniture according to most modern designs and equipment. Kosti and Gedarif Branches have been changed besides the implementation of the Bank’s first stage of central archiving. Moreover, all departments and branches’ supporting services have been provided in a way that enables efficiently achieving the Bank’s objectives.As regards human resources, the Bank has made a number of achievements, such as:-1/ Ensuring the Bank’s need of personnel both in terms of quantity and quality, through the way of filling vacancies in the organizational structure.2/ Reviewing the Bank’s organizational and job structures in order to cope with the requirements of change and development in the whole departments and branches.3/ Maintaining personnel stability and providing health and social coverage for their dependents; besides realization of their needs and wishes according to rules and regulations and continuous improvement of their service conditions for the purpose of maintaining stable work environment.

As for planning and researches, the Bank has undertaken the preparation of studies related to the different activities and fields of the banking business that aim at developing and improving work, in addition to setting up of plans, objectives and means of the 2011 Budget. The bank has also prepared and provided data and information that concern all those who deal with the Bank through annual and monthly reports; in addition to periodicals and manuals issued in the field of banking business and Islamic economics: the first is: Contract “Muqawala” and the second is: Salam and Parallel Salam.As an encouragement of scientific research among the Bank staff, the Bank has executed a program for encouraging researches. A considerable group of employees have contributed by researches that gained the Bank management’s commend and appreciation.



Dear brothers,Finally, I as principal and on behalf of the Board of Directors, I would like to express utmost appreciation and thanks for your esteemed presence, emphasizing that without your ongoing support, these accomplishments could have never been reached. Also, kindly accept true appreciation for H.E. Governor of the Central Bank of Sudan and his staff for their unstinted support. Thanks are also extended to Messrs/ National Chamber of Audit and Messrs/ members of the Sharia’ Advisory Board and BOD members. I would also like to express special thankfulness for our endeared customers to whom we devote our utmost efforts to meet their needs of unique banking services. Thanks are also extended to the bank staff on the managerial and basic staff levels for their truly appreciated efforts during the past year. Thank to Allah (SWT) Who Bestowed us with the strong that enabled us to carry out our duties in a satisfactory way. I would be very pleased, before the end of this speech to tell you a pleasant news which it may partially rewarded you for your patience for fifteen years, in which the bank had not succeeded in paying dividends to its shareholders whom they won this Bank. So I would like to inform you honorable Meeting that the Bank of Sudan has permitted us to pay you dividend as 6% per share this a clear evidence for the bank’s recovery and progress and we ensure that this the beginning to achieve rapidly improvements and developments to compensate you for the suffering of the hard previous years.

(Assalamu alaikum wa rahmatu Allah wa barakatuh)

Elbaqir Yousif Mudawi AhmedChairman of the Board of Directors



Financial Indicators

Million Bounds

Total Revenues

Million Bounds

Total Finance

Million Bounds

Total Assets

755811

591

2011 2010 2009

Million Bounds

Total Owners equity

Million Bounds

Total Deposits

580

362

607

2011 2010 2009

105121

93

2011 2010 2009

5649

65

2011 2010 2009

507

387

567

2011 2010 2009


General Auditor’s report


General Auditor’s report


Notes on Financial Statements








Note No. (1)Establishment and OriginAl-Shamal Islamic Bank was established as a general public Company with limited Responsblity in Khartoum on 23/7/1985 according to the companies Act of 1925. It commenced business on 2/ 1/ 1990. The Bank exercises all businesses and banking activities through its Headquarter in Khartoum (Al-shamal Islamic Bank Tower - Alsayed Abdelrahman Street) and its branches spreading throughout the Sudan. Branches of the Bank • Their No. is 18 branches.• 11 of them are in the state of Khartoum while the rest are in the other states. Subsidiary Companies: • International Modern Investment Company, Ltd, which is owned by the Bank at a percentage of 99.9%; it works in the field of trade & services Capital contributions: • The Social Insurance National Fund 64%• Bank of Sudan 20% • Others 16% Note No. (2): Accounting policies:1. The Bank complies with the historical Cost principle and the merit principle in registering its assets, liabilities, revenues & expenses. In 1997 fixed assets had been re-valued and recognized according to the market price of the time (by a House of Expertise).2. The financial statements of the International Modern Company (Ltd) in which the Bank owns 99.9% of its capital, are not consolidated with the Bank’s balance sheet according to the circular of the Bank of Sudan No. 25/2002 - 21September 2002. 3. Assets are depreciated according to the fixed installment method, which means the depreciation of assets by an equal annually installments based on the expected life of each type of assets. 4. Foreign currencies it’s transactions were transferred to the Sudanese pounds at the prevailing exchange rate at the time of its occurrence. Accordingly, the value of the assets and liabilities are transferred at the date of the statement of the financial position with the prevailing rate at that time. 5. Profits and losses from “Musharaka, and “Salam” operations are recognized when an investment operation is completely settled. Profits or losses from “Murabaha” are recognized when the installments are fully paid by the customer. 6. Provision for doubtful debts are computed according to the Central Bank’s principles and standards, bear-ing in mind the debts that the Central Bank agreed to be set off against the profits during the following ten years, which began in 2003.7. The investments in the capital contributions appear in the statement of the Financial Position in regard to the cost without deducting the provision for its reduced value. 8. The Bank’s activities are subject to Sharia Supervisory Board that carries out the role of monitoring of the Bank’s dealings in accordance with Islamic Sharia. 9. The Bank adheres to paying Zakat according to the Zakat Chamber’s circulars. It also adheres to Business



Income Tax according to the circulars of the Chamber of Taxation. 10. Investment Deposit accounts profits are calculated on (financial year) base. The Bank permits drawing or adding with the right of the account’s owner in the profit by the end of the period.

Note No. (3)Volume of Dealing With Related Parties Related parties Relationship

natureType of dealing

Balance at the beginning of the year 1/1/2011

Transaction during the year

Balance at the end of the year 31/12/2011

International Modern Investment Company, Ltd

Subsidiary Companies

Mudarabah Financing

6.204.487.72 6.442.930.28 12.647.418.00

Abdullah Idrees Board of Direc-tors member

(L/C’S) Financing

-- 290.316.57 290.316.57

There is no dealing with any other related parties



Note No. (4)Cash & Cash Equivalent

(SDG) 2011

(SDG)2010

ParticularsCash in local currency 12.236.224 14.714.073Cash in foreign currency 434.373 562.789Automateic Teller Machine (A.T.M) 2.718.952 2.057.005Cash at Bank of Sudan 141.099.104 126.119.245Legal reserve 42.008.715 37.304.045Foreign correspondents 1.194.066 2.892.103Foreign correspondents - margins 2.416.337 2.824.492Total 202.107.771 186.473.752Note No. (5)

Deferred Sales Receivables

Murabahat 100.639.647 72.888.229Salam 2.620.391 2.358.200Less provisions for normal and bad financing -18.349.624 -18.798.419Less delayed profits -13.330.762 -9.414.650Net of deferred sales 71.579.652 47.033.360Note No. (6)

Short term Investments

Securities 171.707.000 135.598.728Investment deposits at other banks 135.500.000 174.500.000Mudarabat 18.723.966 24.561.748Musharakat 112.595.864 85.654.693Mugawalat 25.446.800 10.999.666Commodity stock 685.641 506.584Other (6/A) 7.324.728 7.846.412Purchased trade bills 96.495 84.457Total 472.080.494 439.752.288Note No. (6/A)Other Investments

Confiscated letters of guarantee 536.563 905.400Bad L/CS 6.788.165 6.941.012Total 7.324.728 7.846.412



Note No. (7)Receivables

(SDG) 2011

(SDG)2010

ParticularsAbd Alhaleem ali Ahmed 0 261.632Abd El-Rahman M. Alsheikh 0 1.297.105Free market debt (currencies market) 0 3.772.240Alrudwan debts 19.928.586 28.697.609Total 19.928.586 34.028.586Amount set of in the year 2011 is 14,000,000 SDG while the set off amount for, the year 2010 was 4,259,914 SDG.Note No. (8)

Other Assets

Staff loans 12.223.140 9.938.159Stores 177.990 266.171Obligations of El-Bashier Mohamed Ahmed 0 30.149Foreign currency dealing room 251.095 107.980Advance payments 3.120.179 1.957.412Due revenues of securities 7.942.462 12.200.898Kalakla Branch Embezzlement 0 212.835Embezzlement by Khalafalla & others in port sudan 0 206.511Cheque of guarantee by the Manager of the Industrial area Kh. Branch in the case of Omar Ali

0 232.500

Cheque of guarantee at court under settlement 25.000 0Obligations of Musaab Ahmed Ibrahim 0 13.191The International Company’s debt 0 1.327.352Total 23.739.866 26.493.158Note No. (9)

Long Term Investments

International Modern Company(an affiliate Co.) 1.167.000 1.167.000Sundus Agricultural project 25.000 25.000National Petroleum Company 42.750 102.000Banking services 26.681 26.681Total 1.261.431 1.320.681





Note (11)Current & Saving Accounts

(SDG) 2011

(SDG)2010

ParticularsCurrent accounts in local currency 289.460.848 247.321.454Current accounts in foreign currency 15.842.625 11.911.565Saving accounts in local currency 67.733.142 47.566.412Total 373.036.615 306.799.431

Note No. (12)Other LiabilitiesDue expenses 265.063 170.483Foreign exchange dealing room 243.280 107. 980National transfer 139 12.935Cash margin against L/Cs 17.744.474 14.567.240Bills payable and certified cheques 9.445.059 16.925.746Instant transfer – Jeddah 14.143 13.430Increase in treasury 0 16.000Dividends 59.344 69.709Inward transfers - local 265.213 302.551unpaid transfers – local 7.566 7.233Suspended income of Mugawalat 3.996.726 2.923.702Remuneration of the Board of Directors 834.900 638.000Cash margin against L/Gs 5.642.489 4.909.425Profits of investment deposits 20.939.109 14.864.051Balances of dormant accounts 42.186 38.521Trusts under demand 125.455 795.008Auditing Fees 75.000 50.000Staff Bonus 4.510.268 3.563.448Blocked amounts (local + foreign) 35.074 27.870Inward transfer - foreign 6.355 31.717unpaid transfers - foreign 735 670Branches’ operations under execution 3.000.000 429.303Strategic stock 4.716.351 0National transformer claims 1.420.196 643.087Rents received in advance 0 4.000Export bonus bank of sudan 888.988 0Provisions (note No. 12/A) 8.958.230 9.062.642Total 83.236.343 70.174.751Note No. (12/A)ProvisionsProvision for Zakat of capital 0 25.000Provision for after service benefit 8.958.230 9.037.642Total 8.958.230 9.062.642



Provisions for after service benefit represent the Bank’s commitments towards its staff; it has a deficit of 12.074.235 pounds as of 31/12/2011. The deficit shall gradually be removed after the banks adoption of the system of social insurance. The number of employees under social insurance system has increased from 128 in the year 2010 to 164 in the year 2011. While the number of employees under the system of after services benefits has decreased from 315 in the year 2010 to 292 in the year 2011.

Note No. (13)

Equities of unrestricted Investment Accounts’ holders(SDG)Particulars 2011 2010Investment accounts – local currency 215.848.732 252.713.825Investment accounts – foreign currency 18.024.732 20.311.071Total 233.873.464 273.024.896

Note No. (14)Paid up capital

% (SDG) 2011

(SDG)2010

National Fund for Social Insurance 64% 64.157.734 54.157.734Bank of Sudan 20% 20.000.000 20.000.000Bayo Investment Co. 6% 6.001.613 6.001.613Dan Fodio Holding Foundation 5% 4.704.150 4.704.150Others 5% 5.145.278 5.136.503Total 100% 100.008.775 90.000.000

Note No. (15)Reserves

(SDG) 2011

(SDG)2010

ParticularsLegal reserve 2.755.935 2.133.813General reserve 6.851.220 6.851.220Revaluation reserve of assets 5.641.611 5.641.611Total 15.248.766 14.626.644



Note No. (16)Contra Accounts

(SDG) 2011

(SDG)2010

ParticularsInvestment bills under collection 76.719.631 50.037.939Due, unpaid bills 21.329.336 19.122.609Bills – local 2.854 0Bills of Murabaha in foreign currency transferred to local 3.840.859 7.544.319Clients’ commitment against local guarantees 35.831.524 27.044.135Mugawala cheques 63.720 326.664Commitment against foreign guarantees 1.136.131 596.901Foreign bills 101.178 85.552Commitments of customers against Letters of Credit (their own resources) 17.780.471 8.631.363Commitments of customers against LC acceptance 11.677.434 19.174.997Commitment of customers against bad debts 14.665.145 31.821.563Total 183.148.283 164.386.042Note No. (17)

Income from deferred salesIncome from Murabahat 11.259.588 16.819.662Income from Salam 314.790 119.825Total 11.574.378 16.939.487Note No. (18)

Income from short term InvestmentsIncome from securities 35.427.785 24.751.470Income from mudaraba 2.991.416 1.310.650Income from musharakat 15.568.652 8.321.378Income from Mugawala 1.399.589 72.303Total 55.387.442 34.455.801Note No. (19)Unrestricted Investment Accounts‘ holders‘ Share in Profits

Revenue from investment operations – local (19/A) 21.180.634 13.798.587Revenue from investment operations – foreign(19/A) 1.303.017 1.065.464Total 22.483.651 14.864.051



Note No. (19/A)Unrestricted Investment Accounts‘ holders‘ Share in ProfitsOwners of local investment deposits have been supported by an amount of 4.077.362 SDG from the share of the Bank, which represents 55.5% from the share of the bank and so their share become 21.180.634 SDG. As for the owners of foreign deposits they have been supported by an amount of 75.331 SDG representing 14% from the Bank’s share as Mudarib and their share became 1.303.017 SDG.

Note No. (20)Revenues from Banking Services

(SDG) 2011

(SDG)2010

ParticularsCommission received from current account 4.186.352 3.339.751Commission received from transfers 3.333.403 2.810.884Commission received from (L/Cs) 7.584.529 6.183.676Commission received from (L/Gs) 1.543.421 1.228.468Commission received from bills of exchange 0 50Revenues from technology 241.976 260.688Revenue from foreign currencies and exchange 2.451.419 4.152.685foreign currency return 3.401 88.214Other revenue in foreign currency 446 22.828Correspondents’ Revenue foreign currency 0 8.743Total 19.344.947 18.095.987

Note No. (21)

Other revenuesCommunication & post 423.378 468.341Gain from fixed assets 310.996 104.215Counter rent of building owned by the Bank 0 180.912Debts repaid (Altahir Abu Zaid Embezzlement) 85.000 0Others, miscellaneous 157.287 122.639Total 976.661 876.107



Note No. (22)Salaries & wages

(SDG) 2011

(SDG)2010

Salaries and allowances 8.038.115 6.377.007Labour uniform 2.369.221 2.005.806Aeids grant 3.166.631 2.563.616Leave expenses 3.166.635 2.668.272Total 16.740.602 13.614.701Note No (23).General Expenses

(SDG) 2011

(SDG)2010

Traveling tickets 495.065 462.524External Transport allowances 582.626 557.838Internal missions 155.490 90.623Abroad missions 157.153 148.382Stationeries & Prints 252.042 163.335Post, communications & swift 380.311 368.390Refreshments & hospitality 198.002 145.932Electricity & water 576.393 573.460Fees & legal consultancies 14.742 8.603Insurances 177.033 153.008Donations & subsidies (Note No. 23/A) 465.429 344.186Rents & tolls 1.337.782 1.076.847Consultancies & researches 78.056 41.883Professional & scientific institutions 1.670.617 1.116.228Staff training expenses 894.413 764.277Generators’-running expenses 67.536 64.973Running of transportation means 506.347 415.098Board of Directors’ expenses 203.558 215.519Remuneration of the Board of Directors’ members (Note No. 23/B) 1.000.000 800.000Expenses of running the computers & networks 802.425 617.961Carried forward totals 10.015.020 8.129.067



2011 2010Carried forward totals 10.015.020 8.129.067Commissions of the Bank of Sudan 24.327 20.975Expenses of marketing & advertising 1.008.926 649.038Computer maintenance 225.367 132.034Maintenance of furniture, equipment & machinery 107.791 108.586Doubtful receivables 0 3.179.988Audit fees 75.000 50.000Staff subsidy 4.500.000 3.500.000Legal advisor’s remuneration 10.000 15.000Social services 84.616 83.420After service benefits 1.500.000 1.000.000Correspondents’ expenses 765.841 355.896Staff’s health care 1.427.569 1.137.703Marriage grant 29.000 33.000Journals and magazines 26.315 25.724Carrying & transportation 30.260 19.329Safety & security 468.334 424.092Cleanness & health 190.448 177.087Annual report 26.750 23.673Sharia supervisory Board 26.855 53.826Fees & stamps 69.334 176.644General meeting 71.254 75.990money sorting expenses 455.813 333.540Building maintenance 144.786 282.132Foreign currency funding expenses 17.306 121.806Debts set off 14.000.000 4.259.914Social insurance subscription 411.914 299.090Bad debts (modern international co. 1.307.702 0Foreign currency revaluation losses 1.633.334 2.285.419Zakat of previous years 390.223 0Extinguishing of embezzlements 523.336 575.040Total 39.567.421 27.528.013Note No. (23/A) Social Services Within the social role of the Bank, many groups of the society have been supported through the Donations & Subsidies Item allocated for education, health care, national contributions & worship houses; amount allocated for such role: 465.429 SDG.

Note No. (23/B) Remuneration of the Board of Directors’ members

The remuneration of the Board of Directors’ members has been allocated at 4.9% from net income for the

year before the setting of bad receivables as per Note No. (7)



Note No. (24)Business Income Tax

(SDG)2011

Particulars AmountIncome before zakat & taxs 6.221.219Donations & subsidies 465.429Any reserves or provisions 17.721.261Value of fixed assets depreciation 2.260.185Fines & compensations 10.350Loss of foreign currencies valuation 1.633.234Gross taxable income 28.311.678Items deducted from gross taxable incomeValue of fixed assets depreciation 2.260.185Used from provision /cost must be deducted 2.733.305Carried for word losses that meets the discount terms 0Set off accounts receivable (bank of Sudan) 0Zakat paid according to the chamber’s certificate 0Income from Government certificates 35.427.785Total items deducted from profit 40.421.275Amendable net taxable profit -12.109.597Business income tax 15% 0Note No. (24)

ZakatPaid up capital 100.008.775Share premium 93.650Legal reserve 2.755.935General reserve 6.851.220Net income of the year 5.621.592Provision for bad debts 18.349.624Revaluation of fixed assets reserve 5.641.611Total 139.322.407LessNet fixed assets 20.421.405Accumulated losses 0Scheduled losses 19.928.586Long term investments 1.261.431Government participating certificates 136.978.000Total 178.589.422Amount not subject to zakat -39.267.015

No zakat paidNote No. (25)

Settlement of previous years Particulars Amount Expenses suspended as due expenses at the end of 2010 at more than their value. 22.495Total 22.495


In the Name of Allah, Most Gracious, Most Merciful

Al-Shamal Islamic BankSharia’ Supervisory Board (SAB)

Sharia’ Supervisory Board Report on the performance of the Bank for the Financial Year ended on 31/12/2011

Sharia’ Supervisory Board presents its annual report in accordance with its authorities pro-vided for in Article (71 - 4) of the Bank’s Statute and on the Islamic Financial Institutions Standards Control No. (1) about the appointment and formation of the Board and its report issued on the Islamic Financial Institutions Disciplinary and Auditing Board – Bahrain.The responsibility of the Board is collectively between the Board and the Management of the Bank. Accordingly, the Advisory Board works for verifying that Management of the Bank practices its business according to Sharai’ as to its policies, and in executing the banking investment operations.Thus, the responsibility of the Sharia’ Advisory Board is to issue an independent opinion as to whether the transactions of the bank are in conformity with the Sharia’ controls and cor-rects the defects that may occur in the contracts and in the execution.The SAB considered the transactions and the procedures submitted by the Bank; and re-quest from the concerned staff of the bank to provide it with the necessary information and interpretation that enable the SAB to form an independent Sharia’ opinion as appear in the records of its meetings. SAB issued general guidance aiming to raise the capacity-building of the staff of the Bank in understanding the Sharia’ controls and observing the same in the execution of the Bank’s operations. The SAB also conducted a workshop on the formulas of the Salam for the pur-poses of perfecting and expanding the scope of using Salam formulas and making these formulas available for those who have dealings with the bank as a part of the training activ-ity undertaken by the SAB.Based on the above: -1. SAB thinks that the transactions carried out during the financial year ended on 31/12/2011 which the SAB have considered were done in accordance with the provisions of Sharia’. SAB also directed that the defects should be remedied.2. The Zakat shall be taken according to the method adopted by the Zakat Chamber in favour of Companies Zakat Funds.3. The distribution of the profits and the tolerance of the loss on the accounts of investments in conformity with approved Sharia’ principles.The SAB expresses its thanks and gratitude to the Management of the bank for their coop-eration in performing their duties.

Khartoum on 13th Rabie-Awal 1433 H., 6th March 2012.


Sharia Supervisory Board’s report

Dr. Abdelwahid Osman Mustafa member of SAB.

Dr. Ahmed Ibrahim Hamad Al-Turabi member of SAB.

Dr. Mohamed El-Fatih Hamid Chairman of SAB.


The Twenty Second’s General Assembly Resolutions For the Bank’s ShareholdersHeld on 20 April 2012

1. Approval of the Board of Directors’ report and audited financial statements, legal auditor report and the Sharia Supervisory Board’s report for the year ended 31st December 2011. 2. Authorization of the Board of Directors to appoint the legal auditor and specify his fees for the year 2012.

Mr. Mohamed Bushra Khalafallah Secretary, Board of Directors

Shareholders’ General Assembly Resolutions


Arab World• Bank of Beirut – Beirut, Lebanon

• National Commercial Bank- Jeddah, Saudi Arabia

• Arab Bank for Trade & Investment - Abu Dhabi, UAE

• Alrajhi Banking & Investment Co. – Riyadh, Saudi Arabia

• Faisal Islamic Bank of Egypt – Cairo, Egypt

• Qatar Islamic Bank – Doha, Qatar

• Abu Dhabi Islamic Bank – Abu Dhabi, UAE

• The Arab Investment Co. – Manama, Bahrain

• Arab Investment Corporation – Manama, Bahrain

• Mashraque Bank -Dubai, UAE

• Bahrain Islamic Bank - Bahrain

• Saba Islamic Bank – Sanaa - Yemen

Europe

• Al Baraka Turkish Bank – Istanbul, Turkey

• British Arab Commercial Bank – London, UK

Foreign Correspondents

Documents

Annual Report 2011 · 9-Mr. Mutasim Abdel Aziz Fagier Ahmed Risk Department 10.Mr. Osama Ali Ibrahim El-Sadiq Financial Affairs 11. Mr. Osman Sa‘ied Haj Noor External Relation &