3 1s t D E C 2 0 14 BLUE NILE MASHREG BANK Audited Financial Statements
Ph: +249183764490 Fax: +249183782562 Auditors Report To: Members We have audited the financial statements of blue nile Mashreg bank on pages 2 to 15 which comprise the statement of financial position as at 31/12/2014 and the statement of comprehensive income, statement of cash flows and statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information. Bank s Management s Responsibility Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Accounting Standards tof Accounting & Auditing Organization For Islamic Financial Institutions (AAOIFI), we conducted our audit in accordance with international auditing standards. Our audit includes examination, on a test bases, of evidence relevant to the amounts and disclosures in financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the bank s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. In our opinion, the financial statements give a true and fair view of the financial position of the bank as at 31/12/2014 and of the results of its operations and its cash flows and changes in owner s equity for the financial year then ended in accordance with the law and Shari a Rules And Principles as determined by the Shari a Board and the accounting standards of AAOIFI and comply with the laws. Mohamed Suliman Abdalla Haggar FCCA Chartered Certified Accountant Mohamed Suliman Haggar & Co. Date: 12/2/2015 Ph.: (83) 784639 Fax : 776851 P.O.Box : 11256 Khartoum Sudan Email: mshaggar@gmail.com / haggar@hasibeen.com Flat46th Flour Almubarak Building Hurria st. Khartoum Website; www.hasibeen.com 2
Ph: +249183764490 Fax: +249183782562 Statement Of Financial Position As At 31st Dec 2014 Assets Note 2014 SDG 2013 SDG Cash & Cash Equivalents (5) 743.887.059 554.892.733 Sales Receivable (6) 7.436.883 50.016.190 Investments (7) 1.143.070.519 1.118.368.177 Long Term Investments (8) 527.991 527.073 Other Assets (9) 30.695.022 28.441.420 Branch Expenditure (10) 19.303.841 7.589.141 Fixed Assets (Net Book Value) (11) 84.488.275 60.104.860 Total Assets 2.029.409.590 1.819.939.594 Liabilities, Unrestricted Investment Accounts And Owners Equity Liabilities Note 2014 SDG 2013 SDG Current Accounts and Saving Accounts (12) 899.795.732 802.449.536 Payable (13) 58.058.621 47.852.317 Other Liabilities (14) 128.188.778 76.720.591 Total Liabilities 1.086.043.131 927.022.444 Unrestricted Investment Accounts 343.490.413 382.745.132 Total Liabilities & Unrestricted Investment Accounts 1.429.533.544 1.309.767.576 Owners Equity Note 2014 SDG 2013 SDG PaidUp Capital (15) 207.777.896 177.125.155 Legal Reserve 69.531.360 48.342.176 Retained Earnings (16) 322.566.790 284.704.687 Total Owners Equity 599.876.046 510.172.018 Total Liabilities & Unrestricted Investment Accounts And Owners Equity 2.029.409.590 1.819.939.594 Contra Accounts Note 2014 SDG 2013 SDG Letters of Credit 14.328.903 80.876.424 Letters of Guarantee 2.131.210 2.886.266 Others (17) 142.281 16.460.113 83.904.971 The Attached Notes Form An Integral Part Of These Statements Mohammad Ismail Mohammad Chairman Abdel Bagi Abdalla Hassan Director Isam Osman Mahgoub Saad General Manager 3
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Ph: +249183764490 Fax: +249183782562 Statement Of Comprehensive Income For The Year Ended 31st Dec 2014 Income Note 2014 SDG 2013 SDG Deferred Sales 1.807.940 1.408.175 Investment Securities (18) 47.273.243 46.720.042 Other Investments Income (19) 93.376.507 70.539.326 Less 142.457.690 118.667.543 Audited Financial Statements Return On Unrestricted Investment Accounts Bank s Share In Income From Investment (As Mudarib And As Fund owner) (20.678.003) 12.779.687 (17.365.943) 101.301.600 Add Revenue from Banking Services (20) 235.996.958 177.993.514 Other Revenues (21) 2.274.789 1.152.810 Total Income 360.051.434 280.447.924 Less Staff Cost (22) 36.610.830 21.603.104 Administrative & General Expenses (23) 28.077.373 25.426.926 Depreciation 4.570.632 3.032.398 Provision of Finance 3.014.463 Amortization 4.433.553 Bank of Sudan Fines 11.000 14.000 Total Expenses 69.269.835 57.524.444 Net Income (Loss) Before Tax & Zakat 290.781.599 222.923.480 Less Provision for Zakat 12.343.473 6.912.250 Provision for Tax 66.546.283 43.678.330 Net Income (Loss) After Tax & Zakat 211.891.843 172.332.900 Less Legel Reserve 21.189.184 17.233.290 Net Income 190.702.659 155.099.610 Earnings Per Share (E.P.S) 1.716 pound 1.637 pound The Attached Notes Form An Integral Part Of These Statements Mohammad Ismail Mohammad Chairman Abdel Bagi Abdalla Hassan Director Isam Osman Mahgoub Saad General Manager 5
Ph: +249183764490 Fax: +249183782562 Statement Of Cash Flows For The Year Ended 31st Dec 2014 Cash Flows From Operations Net Income (Loss) Adjustments To Reconcile Net Income Depreciation Amortization Provision for Zakat Provision for Tax Tax & Zakat Paid Return on Unrestricted Investment Accounts Provision for Doubt Ful Debts Purchase of Fixed Assets Gain on Sale of Fixed Assets Capitalized Expenditure 2014 SDG 190.702.659 4.570.632 12.343.473 66.546.283 (24.925.955) 20.678.003 106.009 2013 SDG 155.099.610 3.032.398 4.433.553 6.912.250 43.678.330 (35.172.964) 17.365.943 3.014.463 (10.289.442) 350.886 (3.174.371) Net Cash Flows Provided By Operations 270.021.104 185.250.656 Cash Flows From Investing Activities Increase in Investment Net Decrease in Sales Receivable Increase in Long Term Investment Purchase of Fixed Assets 2014 SDG 24.702.342 (42.579.307) 918 (29.060.056) 2013 SDG (336.287.865) (1.974.551) (61.910) Net Cash Flows From (Used In) Investing Activities (46.936.103) (338.324.326) Cash Flows From Financing Activities Net Increase in Unrestricted Investment Net Decrease in Current Accounts Distributed Profit Transfer to Capital Legal Reserve Increase in Credit Balances & Banks Decrease in other Assets Net Cash Flows Provided by Financing Activities Increase (Decrease) In Cash & Cash Equivalent Cash And Cas Equivalents At Beginning Of The Year Cash And Cash Equivalent At End Of The Year 2014 SDG 90.299.058 97.346.196 (122.187.815) (30.652.741) (21.189.184) (61.674.491) 13.968.302 (34.090.675) 188.994.326 554.892.733 743.887.059 2013 SDG 104.270.322 54.764.022 (68.008.412) (17.233.290) (1.068.839) 9.820.768 82.544.571 (70.529.099) 625.421.832 554.892.733 The Attached Notes Form An Integral Part Of These Statements Mohammad Ismail Mohammad Chairman Abdel Bagi Abdalla Hassan Director Isam Osman Mahgoub Saad General Manager 6
Ph: +249183764490 Fax: +249183782562 Statement Of Changes In Owners Equity Year Ended 31st Dec 2014 Description Paid Up Capital Legal Reserve Retained Earnings Total Balance as at 1/1/2014 177.125.155 48.342.176 284.704.687 510.172.018 Prior Year Adjustment (122.187.815) (122.187.815) Distributed Profit 211.819.843 211.819.843 Net Income Transfer to Reserves 21.189.184 (21.189.184) Transfer to Paid Up Capital 30.652.741 (30.625.741) Balance As At 31/12/2014 207.777.896 69.531.360 322.566.790 599.876.046 Description Paid Up Capital Legal Reserve Retained Earnings Total Balance as at 1/1/2013 177.125.155 31.108.886 197.613.489 405.847.530 Prior year adjustment (68.008.412) (68.008.412) Distributed profit 172.332.900 172.332.900 Net income Transfer to reserves 17.233.290 (17.233.290) Transfer to paid up capital Balance as at 31/12/2013 177.125.155 48.342.176 284.704.687 510.172.018 The Attached Notes Form An Integral Part Of These Statements Mohammad Ismail Mohammad Chairman Abdel Bagi Abdalla Hassan Director Isam Osman Mahgoub Saad General Manager 7
Ph: +249183764490 Fax: +249183782562 1 Status And Operation (BNMB) was established in Sudan on Oct.2003 due to the merger of Mashreg Bank Psc Khartoum. Into blue nile bank (BNB) which were established on 1979 and 1983 respectively. BNMB is authorized to undertake all banking operation, according to bank of Sudan (B.S) approval dated 1.10.2003, in compliance with B.S regulations and instructions. 2 Basis Of Preparation 21 Statement Of Compliance The financial statements are prepared in accordance with the Shari a Rules and Principles as determined by Shari a Board and the accounting standard of AAOIFI and comply with the companies, ordinance 1925, the banking regulation act 2003 and other relevant regulatory laws 22 Basis Of Measurement The financial statement have been prepared under the historical cost basis 23 Functional And Presentation Currency The financial statements are presented in the functional currency (Sudanese Pounds) 24 Use Of Estimates And Judgments The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management s best knowledge of current events and actions, actual results ultimately may differ from those estimates. 8
Ph: +249183764490 Fax: +249183782562 3 Accounting Policies 31 Translation Of Foreign Currency Transactions in foreign currencies are recognized (in local currency) at the prevailing exchange rate at the date of the transaction. Assets and liabilities in foreign currency are converted at the date of the statement of financial position to (the local currency) at the prevailing exchange rate at the date of statement of financial position. All gains (losses) resulting from conversion of foreign currencies are recognized as profits or losses in the income statement. 32 Revenue Recognition 37 Doubtful Receivables The provision for doubtful debts are charged according to the Bank of Sudan instruction. 38 Deferred, Instrument Sales And Murabaha Receivable Its recorded at the time of occurance at their fair value and at their cash equivalent at the end of the financial period. 39 Zakat & Tax Treatments The bank is subject to the zakat & tax regulations prescribed by Sudanese fiscal regulations. Income from Islamic Modes of Finance is recognized when actually received except Igara income which is recognized on accrual basis. Income from other banking operation & other income is recognized when accured. 310 Employees Benefits 33 Financial Investment Held At Statement Of Financial Position Date 311 Shari a Supervision Financial Investment held at statement of financial position date including those managed by others in forex are valued at fair value i.e market value exchange difference are treated in the income statement. The bank provides for end of service benefits to the employees entitled to these benefits is usually based upon the employees length of services and the completion of minimum services period. The bank s business activities are subject to the supervision of Shari a supervision board. 34 Contingent Liabilities Contingent liabilities are kept off balance sheet because they don t represent real liabilities for the balance sheet date. 35 Cash And Cash Equivalent For the purpose of the Cash flows statement cash equivalents include cash relevance cash at Central Bank of Sudan and cash at other Commercial Banks. 36 Fixed Assets Fixed assets are valued at cost less accumulated depreciation. Routine repairs and maintenance are accounted for as expenses when incurred, Depreciation of Fixed Assets is calculated the basis of the straightline method applying rates between 10% and 33.3%. Additions during the year are depreciated at 50% of cost. 9
Ph: +249183764490 Fax: +249183782562 4 Financial Investments and Risk Management ACredit Risk Loans to customers and banks, investment in bonds, current account balances, deposits due from banks and rights from others are financial assets exposed to credit risk which is expressed in ability of these parties to settle part or all of due amounts in due date:preparing credit studies about potential customers dealing with them and determining credit risk related there to. Obtaining adequate guarantees to reduce the risks resulting from defaulting of customers and banks. Monitoring and preparing period studies on customers in order to evaluate their financial and credit position and estimate the required provision for nonperforming loans. Distribute the loans portfolio over the various sectors. BForeign Currencies Risk The nature of banks activity requires the bank to deal in many foreign currencies, which exposes the bank to the risk of fluctuation in exchange rates. To minimize this risk, the bank monitors balancing of foreign currencies positions according to the Central Bank of Sudan instructions in that respect. 10
Ph: +249183764490 Fax: +249183782562 5 Cash And Cash equivalent Local Currency Foreign Currency Bank Of Sudan Current A/Cs(Local) Bank Of Sudan Current A/Cs(Foreign) Bank Of Sudan Statutory Reserve(Local) Bank Of Sudan Statutory Reserve(Foreign) Cash In Other Banks Foreign Banks 2014 SDG 47.359.179 108.369.894 103.706.695 79.876.223 85.061.449 64.192.675 478.875 254.842.069 2013 SDG 33.497.804 20.663.442 87.802.738 87.452.948 98.169.235 52.509.458 174.797.108 743.887.059 554.892.733 6 Sales Receivables Murabhat Jointly Financed 5.316.949 Self Financed 7.975.424 2014 SDG 13.292.373 Jointly Financed 6.847.000 Self Financed 10.270.501 2013 SDG 17.117.501 Salam 15.891.500 23.837.250 39.728.750 ()Provision For Doubtful Receivable(Bad) (100.012) (1.780.289) ()Provision For Doubtful Receivable(Normal) (944.358) Profit Under Collection (4.811.120) (5.049.772) Total Sales Receivables 5.316.949 7.975.424 7.436.883 22.738.500 34.107.751 50.016.190 7/Short Term Investments: Musharakat 14.905.132 22.357.699 37.262.831 ()Provision For Doubtful Receivable(Bad) (372.828) ()Provision For Doubtful Receivable(Normal) Total Of Musharakat 14.905.132 22.357.699 36.890.003 Others L/Cs 128.562 192.844 321.406 128.562 192.844 37.262.831 Ejara 48.121.968 79.682.952 127.804.920 53.140.071 79.710.107 (372.828) Mugawla 5.236.925 7.855.387 13.092.312 3.331.972 4.997.957 Mudarba 301.432.770 452.149.154 753.981.924 296.528.114 444.792.172 36.890.003 Bill Purchase 603.662 905.943 1.509.155 1.576.704 2.365.057 321.406 Total Of Other 355.523.887 540.785.830 896.709.717 354.705.423 532.058.137 132.850.178 ()Provision For Doubtful Receivable(Bad) (9.370.298) 8.329.929 ()Provision For Doubtful Receivable(Normal) (3.783.592) 741.320.286 ()Profit Under Collection (38.486.308) 3.941.761 Total Investment Securities 355.523.887 540.785.830 845.069.519 354.705.423 532.058.137 886.763.560 Shahama 119.200.400 178.800.600 298.001.000 99.058.000 148.587.000 247.645.000 Skok Total Investment Securities 119.200.400 178.800.600 298.001.000 99.058.000 148.587.000 247.645.000 Total Investment 474.742.287 719.586.430 1.143.070.519 468.668.555 703.002.836 1.118.368.177 11
Ph: +249183764490 Fax: +249183782562 8Long Term Investment Juba Investment Co. Blue Nile Co. Ltd. Electronic Banking Services Nile Mashreg Financial Services 2014 SDG 25 1.000 376.966 150.000 2013 SDG 25 1.000 376.048 150.000 527.991 527.073 9Other Assets Accrued Profits Advance Payments Loans to Staff Stock of Stationery Inter Branch A/Cs Transfers Others 2014 SDG 26.371.838 1.353.231 2.142.172 4.486 823.295 2013 SDG 24.744.560 2.037.670 1.594.118 40.993 334 23.745 30.695.022 28.441.420 10Branch Expenditure Car Parking (HO) Elobeid AlSagana Port Sudan Kassala Nyala Private Branch 2014 SDG 2.246.922 6.061.543 9.052.923 591.125 1.040.315 181.013 130.000 2013 SDG 2.269.597 4.340.842 111.500 788.502 78.700 19.303.841 7.589.141 12
Ph: +249183764490 Fax: +249183782562 11Fixed assets Particulars Land Motor Vehicles Office Furniture Computer Generators Buildings Computer Program Total Cost: Balance 1/1/2014 31.761.075 6.221.888 11.415.777 3.826.962 1.115.603 14.242.058 3.347.946 71.931.309 Additions 24.097.502 2.826.000 864.441 470.591 347.250 454.272 29.060.056 Disposals (1.016.619) (6.586) (1.023.205) Balance 31/12/2014 55.858.577 8.031.269 12.280.218 4.297.553 1.462.853 14.696.330 3.341.360 99.968.160 Depreciation Balance 1/1/2014 2.034.735 4.627.723 3.099.408 486.512 1.075.879 502.192 11.826.449 Dep. on Year 769.333 1.363.679 596.062 107.844 365.051 500.216 3.693.185 Dep. Additions 211.950 69.676 70.589 17.364 5.678 375.257 Dep. Disposals (415.006) (415.006) Balance 31/12/2014 2.601.012 6.061.078 3.766.059 611.720 1.437.60 1.002.408 15.479.885 Net Book Value at 31/12/2014 55.858.577 5.430.257 6.219.140 531.494 851.133 13.258.722 2.338.952 84.488.275 Net Book Value at 31/12/2013 31.761.075 4.187.153 6.788.054 727.554 629.091 13.166.179 2.845.754 60.104.860 13
Ph: +249183764490 Fax: +249183782562 12Current Accounts & Saving Accounts Current A/Cs (Local) Saving A/Cs (Local) Current A/Cs (Foreign) Saving A/Cs(Foreign) Importers Special F.C A/Cs Exporters Special F.C A/Cs 2014 SDG 597.589.033 2.754.662 283.581.406 615.078 13.688.986 1.566.567 899.795.732 2013 SDG 548.195.576 2.960.030 237.747.230 703.342 12.777.749 65.609 802.449.536 13Payables Margin on L/Cs Margin on L/Gs Others Bills Payable Social Insurance Accrual Paid Stamp Duty ATM Surplus Medicine Export Account Correspondent Comm. for EBS ATM Adjustments Total Personail Income Tax Careers 2014 SDG 15.158.746 416.904 30.292.331 7.432 738.600 139.441 18.650 134.658 9.043.231 169.477 530.125 1.409.026 58.058.621 2013 SDG 23.155.249 323.807 4.480.623 19.892.638 47.852.317 14Other Libilities Gratuity Provisions Provision for Audit Fees Provision for Taxation Provision for Zakat Contribution in the Deposit Guarantee Fund Other Provisions Provisions for Bonus 2014 SDG 10.920.902 55.386 89.297.658 15.255.723 2.515.645 2.153.930 7.989.534 128.188.778 2013 SDG 8.301.102 90.533 53.689.402 8.075.828 2.508.016 4.055.710 76.720.591 Being Fees Of The Chairman For Services To The Bank According Of Board Of Director Decision No. 17/2010. 14
Ph: +249183764490 Fax: +249183782562 15Authorized & Paid Up Capital Authorized: Blue Nile Bank ( 150,000,000 Shares Of S.D.G 1.87 each) S.D.G Blue Nile Bank (20,000,000 Shares of S.D.G 1.87 each) S.D.G 2014 SDG 504.900.000 2013 SDG 504.900.000 Paid Up: (59,999.986 Shares of S.D.G 1.87 each) S.D.G (94,719.334 Shares of S.D.G 1.87 each) S.D.G 207.777.896 177.125.155 16 Retained Earnings (Loss) Balance B/F Less : Distributed Profit Less : Transfer to Paid Up Capital Add : Net Profit for the Year ()Transfer to Statutory Reserve Retained earnings 2014 SDG 284.704.687 (122.187.815) (30.652.741) 131.864.131 211.891.843 343.755.974 (21.189.184) 322.566.790 2013 SDG 197.613.489 (68.008.412) 129.605.077 172.332.900 301.937.977 (17.233.290) 284.704.687 17 Others Foreign Out Word Documentary Bills for Collection (FOBBC) 142.281 18 Investment Securities Profit Received from Shahama Profit Received from Shahab Profit Received from Skok Retained Earnings 2014 SDG 47.273.243 47.273.243 2013 SDG 44.511.399 1.428.483 780.160 46.720.042 15
Ph: +249183764490 Fax: +249183782562 19 Other Investments Income Igarah Profits Long Term Investments Profits Mudarbah Profits 2014 SDG 10.912.943 79.895 82.383.669 2013 SDG 7.664.578 99.015 62.775.733 93.376.705 70.539.326 20 Revenue From Banking Services Commission on Transfers Correspondents Commission Received Commission Receivedon Letters of Credit Commission Receivedon Letters of Gurantee Cheques Clearance Commission Ledger Fees Difference in Exchange 2014 SDG 11.147.523 14.484 213.290.771 445.666 92.275 1.631.175 9.375.064 235.996.958 2013 SDG 20.471.814 25.477 132.127.621 419.427 179.471 1.605.415 23.164.289 177.993.514 21 Other Revenue Comm Received on Insurance Comm Received on Telecommunication Profit on Sale of Fixed Assets Other Profit on Postage Comm. to Withdraw Cash 2014 SDG 5.015 585.310 27.767 1.656.697 2.274.789 2013 SDG 1.600 642.021 357.535 151.654 1.152.810 16
Ph: +249183764490 Fax: +249183782562 22 Staff Cost Salaries & Wages Uniform Medical Exp. Post Service Benefits Staff Social Insurance Staff Funds Staff Training & Seminars Marriage Grant & Bonus Overtime Special Grants & Benefits Meal Allowance Leave Allowance Travelling Allowance 2014 SDG 8.981.199 1.670.019 2.246.620 3.153.459 959.106 224.501 15.263.196 865.980 750 1.860 2.231.186 1.012.954 2013 SDG 6.936.684 1.265.193 1.705.929 3.282.486 724.315 48.735 154.114 5.645.755 635.164 750 1.203.979 36.610.830 21.603.104 23 General & Administrative Expenses Travelling Exp. Audit Fees Repairs & Maintenance Insurance Stationery & Computer Exp Motor Vehicles & Motorcycle Exp Subscriptions Entertainment & Refreshments Others Light & Water Rent & Rates Comm. Paid to other Banks Advertising Exp Post,Telex,Telephones,Swift&Internet Legal&Consultancy Fees Generator Exp Management Remuneration (B.o.d Fees) Comm. Fees Paid Bank of Sudan ATM Income Tax Zakah Securities Banks Deposit Guarantee Fund 2014 SDG 1.071.398 200.000 1.397.705 670.175 1.816.487 1.142.421 701.357 398.323 203.452 463.463 1.238.121 161.506 74.011 1.145.684 189.625 146.130 11.153.197 2.316 662.627 411.219 310.090 2.515.645 2013 SDG 745.772 200.000 1.261.366 470.400 987.550 750.634 711.781 366.066 232.499 459.362 945.571 251.755 92.223 865.313 133.267 121.579 11.127.117 47.366 420.247 283.045 287.384 2.508.016 17
Ph: +249183764490 Fax: +249183782562 Annul Fees Transaction Banks Loss on Sale of Fixed Assets 1.442.870 448.531 111.020 1.226.736 931.877 28.077.373 25.426.926 24 Related party transactions Nature Of Relation Ship Finance Total Balance 1/1 Nature Of Transaction M Agriculture Company Majority Shares Held by Chairman 19.210.641 11.642.805 Mudaraba Mig Exchange Majority Shares Held by Chairman 220.000 220.000 Letter of Guarantees 19.430.641 11.862.805 Related Parties Transactions Are Executed According To The Bank s Practise With Other Clients. 18
BNMB Tower, El Nagoumi Street, +249183764490 Khartoum, Sudan Fax: +249183782562