Annual Report 2014

3

Annual Report

4

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

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

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

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

Indicators of Sudan Economy performance during the year 2014 .................... 12

Board of directors statement to the 31th annual meeting. .................................. 13

Results of the bank’s activities during the year 2014 ......................................... 15

Resolutions of the 31th 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. .................................................................. 22

The consolidated cash flows statement. ............................................................. 23

The statement of consolidated statement of changes in owners’ equity ........... 24

Notes to the consolidated financial statement .................................................... 25

CONTENTS

5

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]

6 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

7

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: 821228North Kordofan State:13. Elobied Branch P.O. Box: 426 Elobied key: +249- 611Tel: 840653 - 0120718299- 0120718696 Fax: 823113 14. El Rahad Branch:P. O. Box: 4 ElRahad key: +249Tel: 123003176 - 0120720226Fax: 845225

Red Sea State:15. Port Sudan Branch:P.O. Box: 475- Port SudanCable: TadabankTelex: 70035 Tadabankkey: + 249- 311Tel: 830800 - 829091- 0120726744Fax: 825045 - 829092Gadarif State:16. Gadarif Branch:P.O. Box: 156 Gadarifkey: +249- 441Tel: 844106 - 843540- 0120726505Fax: 844670Kassala State:17. Kassla Branch:key: +249 - 411Tel: 822571- 0120725935Fax: 829900South Darfour State:18. Nyala Branch:P. O. Box: 299 Nyalakey: +249 -711Tel: 832445 - 0120718574Fax: 82760019. El Diain Branch:P. O Box: 5 EldiainCable: Bankdamankey: +249- 712Tel: 832500 - 0120720228Fax: 832510 North state:20. Karima Branch:P. O. Box: 77 Karimakey: +249 - 231Tel: 820062 - 0120715460- 0120717588Fax: 820996

8

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.

9

* 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

10

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: Altadamonea For Accounting. Auditing & Finacial Consultancty Legal Advisor: Mr. Daffalla Kadoma Elhady (Advocate and Commissioner for Oaths )

Sharia Advisor: Mr.Mukhawi Mudawi Mukhawi

BOARd Of dIRECTORS

dr. Hassan Osman SakotaChAIRmAN

11

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

12

INdICATORS Of WORld ECONOmy PERfORmANCE duRINg ThE yEAR 2014

INdICATORS Of SudAN ECONOmy PERfORmANCE duRINg ThE yEAR 2014

1/ The initial date indicates the continuation in the increase in the growth of the world s economy as it reached 2.6% in the year 2014 compared with 2.5% in the year 2013 and it is expected to rise to 3% in 2015. The reduction continued in the economies of developing countries. The growth rate of the developing countries reached 4.4% in the year 2014 compared with 4.7% in 2013 and this proportion is expected to rise to 4.8% during 2015.The growth rate of the economies of the developed countries reached 1.8% during 2014 compared with a growth rate of 1.3% during 2013 and it is expected to rise to 3% in 2015.As for as the the Euro states are concerned, which economies have started to grow, the growth rate reached 0.8% in 2014 compared to reach 1.1% in 2015.2/ the striking rates of unemployment constituted a problem to many developed and developing countries. the number of unemployed reached more than 207 million persons in all parts of the world compared with 202 million person in 2013.

The year 2014 represents the last year in the three-year program 2012- 2014 in which the planners attempted to transcend the stage of recession and keep away as for as possible from the center of the grand economic shock through reducing the rates of inflation to 25% raising the growth rate to 6.3% and reducing the rate of unemployment to 19% besides lessening the gap between the official exchange rate and the pavallel exchange rate.Therefore, the gross exports of Sudan during 2014 amounted to 4.3 billion US dollars while the gross imports reached 9.3 billion US dollars with a deficit of 4.9 billion dollars.The total money supply at the end of 2014 reached 77.739 billion SDG with an increase of 17% over the previous year 2013.On the other hand the local deposits ( current deposits, time deposits, marginal deposits ) reached 41,420 million SDG at the end of 2014 with an increase of 23.2% while the balance of the granted finance reached at the end of the year 40,005,7 million SDG with a sight increase over the past year 2013.

13

SPEECh Of ThE ChAIRmAN Of ThE BOARd Of dIRECTORS Addressing the 31th annual meeting of Shareholders

Praise be to Allah with whose bounty the good deeds are accomplished. Praise be to Him The Creator of heavens and earth Who said in his holy Quran..1- And Remember your Lord caused to be declared ( publicly) if you are gratefull I will add more (favours ) unto you .2- And say (O Mohammed work righteousness soon will Allah observe your work, and his Apostle, and the Believers.Good gratitude and many thanks to almighty Allah for the uncountable bounties He bestowed on us and invoke Him to give us more. We pray and greet the best man ever created, prophet Mohammed (pbuh) who had the greatest morals, the last of the prophets and messengers sent by the Lord of the world as a mercy and guid to the right path, our example and master, and his companions, relatives and followers who fairly followed him till the day of Judgment.Dear brothers,I greet you with the Islam eternal salutation, Assalamo Alaykum warhmato Allah wabarakatohoo. I invoke almighty Allah to sustain upon us all the bounty of security and stability and upon your institution the grace of development and advancement and protect us from sins and wrong-doing.It is our pride and pleasure to meet you in this pleasant evening and welcome you on behalf of my brothers in the board of directors while you are gathering to evaluate the financial and administrative performance of the bank during the past fiscal year 2014 in your annual meeting no.31.

This meeting is held under highly complicated financial circumstances both domestically and regionally. You, of course, have noticed the critical financial status through which the country is passing represented by the increase of the rate of exchange and imposition of economic embargo. This led to an increase in the rate of inflation , economic instability and a recession in the market of crops. This adversely affected many economic and financial institutions of which we are integral part. But owing to the bounty of almighty Allah and due to the wise leadership in managing the available resources and optimum allocation of available opportunities and creation of alternative suitable opportunities and finally due to your correct opinions, constructive criticism and positive proposals, we managed to minimize the impact to the least possible level. Therefore, the 2014 financial results were good and rewarding compared with these circumstances. Nevertheless, we have to make our precautions by laying down future strategies that preserve the financial position of the bank at all levels. By the end of 2014, the second year of the three-year plan of the bank 2013-2015 will be over.Dear shareholders,Below are the financial outcomes of the fiscal year 2014:-First:- The total revenue after deducting the share of investment deposits amounted to 212 million SDG against 182 SDG for the year 2013 with an increase of 16 %.Second:- The total expenditure amounted to 97 million SDG against 69 million for the year 2013 with an increase of 40%. Third:- The net profits ( after deducting Zakat and taxation) amounted to 76 million SDG 70 million SDG in the previous year with an increase of 8 %.Fourth:- The direct investment return reached 118 million SDG against 142 million SDG for 2013 with a decrease of 17%.Fifth: - The return of banking operations reached 31 million SDG against 39 million SDG in the past year with a decrease of 20 %.Sixth: - The return of the other revenues amounted to 38 million SDG against 12 million SDG in the past year 2013 with an increase of 216 % and that

14

is attributed to the profits of our contribution in the Sudanese- Egyptian bank.Seventh: - with regard to the domain of deposits, the year 2014 has witnessed a considerable growth in deposits as it reached 1625 million SDG against 1556 million SDG in the year 2013 with a growth rate of 4%.Eighth:- The rights of shareholders rose this year to the sum of 378 million SDG against 362 million 2013 with 4% rate of increase.Honorable shareholders:-With regard to the field of banking technology and in continuation to the betterment of performance, horizontal expansion took place by inaugurating new automatic teller machines (ATMs) in the Judiciary head office at each of Khartoum and Omdurman. Also new services have been introduced and operated in headquarter, All albaladiyah and the parliament branches. The internal banking networks have been made available in each of Rabak and Sennar branches in addition to the introduction of SMS service.Dear shareholders, In accordance with the measures of the preventive control and in line with the indicators of early warning quarterly issued by the central bank, our bank has been classified “satisfactory” which is the second grade of classification. The bank has preserved this classification throughout the past year (report enclosed at the end of the booklet). On our part, we will do every possible effort with the executive management to correct the points of weakness with the view to upgrade he classification to “strong”.Dear brothers: As the first year in your board of directors session is over, we invoke almighty that we have succeeded in carrying out the responsibility entrusted to us. I am pleased to announce to you that the bank has maintained its top position among the operating banks as it obtained the grade “ excellent” in the domain of banking infra structure, besides attaining the

degree of excellence in the field of information technology. on the other hand, the bank attained the least possible default proportion in the banking system. The bank maintained an advanced position with respect to early warning system adopted by central bank of Sudan in addition to the considerable growth in shareholders equity, The bank also carried on distributing cash profits and free shares to the shareholders ranging between 20 % -50 %.Honorable shareholders:-As we conclude the fiscal year 2014 with the above-mentioned outcomes, which we consider satisfactory, we assure you that your debates and consultations are warmly welcomed as we regard them benchmark in laying down plans and strategies that maintain the high position of the bank internally and extremely.Allow me to present to you the recommendations of the board of directors for approving the consolidated budget, the account of profit and loss, the two reports of the external auditor and the fatwa and research for the year ending on 31/12/2014 in addition to the approval of capitalizing the sum of 127 million SDG from the reserves through granting free shares to shareholders on the basis of one and a quarter share for each previous share. Then the cash profits are to be distributed after capitalizing of 60 million SDG so that the return on the share becomes 26% besides approving the remaining recommendations.Finally, allow me to thank, on your behalf, our brothers in the executive management and all the employees of the bank for the considerable effort they made to keep this institution in the highest position. Thanks to the external auditor and his team and to all of you for coming and participating.

Wa as salamo Aloykum Wa Rahmato Allah,,, Dr. Hassan Osman Sakota

Chairman

15

Total Assets (Total Balance Sheet)The Bank's total assets reached SDG 3,634.09 Million by the end of the year 2014 compared to SDG 3,356.10 Million in 2013 .The table & graph below explain total Assets development from 2010 to 2014.

Shareholders Equity:Shareholders Equity reached SDG 378.27 million by the end of the year compared to SDG 362.02 million in 2013 showing a growth rate of 7%. The following table and graph explain the progressive development in owners equity from 2010 to 2014.

RESulTS Of ThE BANk'S ACTIvITIESduring The year 2014

Amounts in SDG MillionsThe amountsThe year

2,354.82 2010 2,353.06 2011

3,077.3920123,356.1020133,634.092014


263.632010 305.992011342.652012362.02 2013378.272014

Total Deposits:By the end of the year 2014, the bank's total deposits (current, saving , investment and cash collaterals) reached SDG 1625,10 Million compared to SDG 1566,90 Million in the previous year showing a growth rate of 3.7%. The table and graph hereunder explain that development.


1,9462010 1,89520112,45420122,7052013

1625,102014Investment in Local Currency:The volume of liquidated investment operations by the end of the year reached SDG 2140.1 million compared to SDG 1889,3 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 13.3%Investment in Foreign Currencies:The Bank was able to employ its resources in foreign currencies in good manner as the utiliset investment ceiling amounted to SDG 150.1 million, compared to SDG 44.2 million with a growth rated 239.5%.

Total Assets

Shareholders Equity:

Total Deposits:

2010

20

11

2012

20

13

2014

2010

20

11

2012

20

13

2014

2010

20

11

2012

20

13

2014

16

Equity of unrestricted investment accounts holders: The balance of these accounts (local and foreign)by the end of the year reached SDG 1,077.76 million compared to SDG 990,11 Million in 2013.The following table and graph explain the said development for the last five years (2010- 2014).


1.0042010 679,672011

1,034,522012990.112013

1,077.762014

Total revenues and Expenses:The bank total revenues for the 2014 after the deduction of the share of unrestricted investment accounts holders reached SDG 211.94 million compared to SDG 181.82 million in 2013 while total expenses for the year 2014 reached SDG 97 million corresponding to SDG 69 million in 2013.This resulted in total profits amounted to SDG 114.75 million corresponding to SDG 108.93 million in year 2013. The following tables and graphs explain the development in revenues, expenses and total profits before Zakat and Taxes during the last five years (2010 -2014).


79.352010 112.122011136.742012108.822013114.752014


130.942010 170.142011208.322012181.822013211.942014


51.592010 582011722012692013972014

Total Revenues:

Total Expenses:

Total Profits Before Zakat & Taxes:

2010

20

11

2012

20

13

2014

2010

20

11

2012

20

13

2014

2010

20

11

2012

20

13

2014

2010

20

11

2012

20

13

2014

17

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

Date: 09/04/2015

Resolution No. 1/2015Approval of the board Of directors report, the consolidated budget, profit and loss account and the two reports of the certified accountant and the fatwa and reaches for the period ending on 31/12/2014.Resolution No. 2/2015Approval of capitalizing the amount of 127 million SDG from the reserves through granting free shares on the basis of one quarter share for each previous one.Resolution No. 3/2015Approval of settling profits of shareholders after capitalization at the proportion of 26.26%.Resolution No. 4/2015Approval of paying the financial reward of the members of the board of directors.Resolution No. 5/2015Approval of paying the incentives of the personnel and delegating the board to lay down the rules governing the mode of payment.Resolution No. 6/2015Approval of transferring the remaining profits as reserve of capital.Resolution No. 7/2015Delegating the board of directors to appoint the certified accountant for the year 2015 and fixing the charges.

May Allah almighty make and efforts success,,,, Khalid Mukhtar AhmedSecretary of the board of Directors

Resolutions Of the Thirty First annual Shareholders Meeting:

Thursday 09 /04 /2015

18

(a) of the Bank’s Articles of Association which 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 31/12/ 2014 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: 13 Rabia Thany 1436 02 February 2015

Mukhawi Mudawi Mukhawi Shari’a Advisor

In the Name of Allah The Most Gracious The Most MercifulREPORT Of fATWA & RESEARCh dEPARTmENT To the General Assembly of Shareholders In Its 31th Holding Session for The financial year 2014.

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 Control Standard No. (1) for Islamic Financial Institutions 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 holding session: 1/ The department has conducted shari'a controlling to the principles and contracts relating to the bank’s dealings performed during the financial year 2014.2/ To be sure to what extent the bank’s dealings and contracts comply with Islamic shari’a. 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

19

Opinion :In our opinion, the consolidated financial

statements give a true and fair view of the financial position of Tadamon Islamic Bank group as at 31st December 2014 and of the results of its operations and its cash flows for the year then ended in accordance with Sharia Rules and Principles as determined by Bank’s Sharia Board and the Accounting Standards of (AAOIFI) and comply with the laws and regulations.

ElGasim Rizgalla Abu ElGasim FCCA Partner Date. 10 /4 /2015

AlTAdAmONEA fOR ACCOuNTINg.Auditing & Finacial Consultancty

We have audited the consolidated balance sheet of Tadamon Islamic Bank as at 31st December 2014, and the related statements of Income, cash flows and changes in shareholders’ Equity for the year then ended. Management and Auditors’ responsibility

The Bank’s management is responsible for the preparation of the financial statements in accordance with Sharia rules and principles as determined by the bank’s Sharia Board and in compliance with Central Bank regulations and the accounting Standards of the Accounting Auditing Organization for Islamic Financial Institutions (AAOIFI). This responsibility includes designing , implementing and maintaining internal controls relevant to the preparation and presentation of financial statements that are free from material misstatements , whether due to fraud or error. Our responsibility is to express an opinion on these financial statements based on our audit.Basis of opinion

We conducted our audit in accordance with International and (AAOIFI) auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatements. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement’s presentation. We believe that our audit provides a reasonable basis for our opinion.

AudITORS REPORTThE ShAREhOldERS Tadamon Islamic Bank - Khartoum

20

CONSOlIdATEd STATEmENT Of fINANCIAl POSITIONAS AT dECEmBER 31, 2014

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

The attached notes from 1 through 28 form an integral part of these financial statements

AssetsItem Note 2014 SDG 2013 SDG

Cash and cash equivalents 3 1,020,059,030 1,106,231,903

Cash reserves with Bank of Sudan 4 272,839,327 274,525,9221,292,898,357 1,380,757,825

InvestmentsDeferred sales receivables 5 668,600,221 578,251,797Investment securities 6 1,027,092,820 897,939,955Foreign deposits 7 103,908,350 166,570,653

Musharaka investments 8 141,240,283 160,861,601

Inventories 9 15,878,072 9,452,4711,288,119,525 1,234,824,680

Other assets 10 112,974,770 54,900,170Shares in other companies 11 136,912,211 767,390Fixed assets 12 134,587,458 106,572,289

384,474,439 162,269,849Total assets 3,634,092,542 3,356,104,151

21

CONSOlIdATEd STATEmENT Of fINANCIAl POSITIONAS AT dECEmBER 31, 2014 (Continued)



Liabilities , unrestricted investment accounts and share holders’ equityItem Note 2014 SDG 2013 SDG

Liabilities

Current and saving accounts 13 1,625,144,071 1,566,934,911

Other liabilities 14 475,102,884 371.580.787

Proposed dividends 60,000,000 50,816,213

Provisions 15 17,800,459 14,649,210

Total Liabilities 2,178,047,414 2,003,981,121

Unrestricted investment Accounts 16 1,077,769,612 990,107,346

Total liabilities , of unrestricted investment accounts 3,255,817,026 2,994,088,467

Shareholders’ Equity

Paid up capital 17 228,672,956 101,632,425

Legal reserve 112,265,197 98,661,164

General reserveا 21,172,409 145,449,963

Fixed assets revaluation surplus 18 16,164,954 16,222,132

Total 378,275,516 362,015,684

Total liabilities , unrestricted Investment accounts and shareholders’ equity

3,634,092,542 3,356,104,151

Contra accounts 19 930,362,870 1,136,270,224

22

IncomeItem Note 2014 SDG 2013 SDG

Deferred sales income 20 73,768,061 62,428,526

Investment Income 21 117,660,272 142,176,194Total income from deferred sales & investment 191,428,333 204,604,720Less return on unrestricted investment accounts 105,804,736 134,890,279Banks share of investment income as mudarib and as fund owner 56,310,640 60,627,362

Less investors gain from unrestricted investments - 49,494,096 -74.262.917

Bank share of investment income 141,934,237 130.341.803

Revenue from bank activities 22 31,455,541 39.459.607

Other income 23 38,558,360 12.019.567

Gross revenue 211,948,138 181.820.977

Bank of Sudan fine -30,000 -3.699.335

General and administrative 24 -97,162,159 69.190.111

Income before zakat and tax 114,755,979 108.931.531

Zakat , B.P.T & capital gains tax 25 - 8,792,025 -8.754.220

Provision set aside for financing risks -29,646,944 -30.000.000

Net income for the year 76,317,010 70.177.311

Amounts transferred to reserves & proposed distributions to shareholders 26 76,317,010 70.177.311

Retained earnings 0 0


CONSOlIdATEd INCOmE STATEmENTfOR ThE yEAR ENdEd dECEmBER 31, 2014


23

Cash flows from operating activitiesItem 2014 SDG 2013 SDGNet Income befor zakat & tax 114,755,979 108.931.531

Adjustments to reconcile net income with net cash flows :-

Fixed assets depreciation 4,474,182 3.616.458Amounts Set aside for investments risks - 29,646,944 (30.000.000)Profit on sale of fixed assets - 296,586 (428.901)Zakat & tax paid - 7,502,518 (8.316.374)

81,784,113 73.802.714Changes in current assets and liabilities Investments and deferred sales receivables - 143,643,269 (274.933.865)Other assets and debit balances - 58,074,600 2.342.767shares in other companies - 136,114,821 -Currant & saving account 58,209,160 467.304.424Other payables 103,522,097 (176.426.262)unrestricted investments’ balances 87,662,266 (44.416.522)Net Cash flows from operating activities (6,655,054) 47.673.256Cash flows from investment activities Purchase of fixed assets - 36,977,453 (17.260.576)Sale of fixed assets 6,589,252 5.789.608Net Cash flows from investment activities - 30,388,201 (11.470.968)Cash flows from financing activities Profit from subsidiary companies’ (Distributed Profit) - 50,816,213 (40.652.970)

- 50,816,213 (40.652.970)Net Cash flows from financing activities Net increase (decrease) in cash flows 87,859,468 (4.450.682)Cash at beginning of the year 1,380,757,825 1.385.208.507Cash at end of the year 1,292,898,357 1.380.757.825


STATEmENT Of CONSOlIdATEd CASh flOWSfOR ThE yEAR ENdEd dECEmBER 31, 2014


24

CONSOlIdATEd STATEmENT Of ChANgES IN OWNERS’ EQuITyFOR THE YEAR ENDED DECEMBER 31st 2014


Item Share CapitalSDG

Profit SDG

ReservesSDG

RevaluationReserve SDG

TotalSDG

Balance at 1st January 2013 101.632.425 - 224.800.029 16.222.132 342.654.586Profit for the years - 70.177.311 - - 70.177.311Shareholders proposed dividends - (50.816.213) - - (50.816.213)

Transfer to reserves - (19.361.098) 19.361.098 - -Balance at 31st December 2013 101.632.425 - 244.161.127 16.222.132 362.015.684

ItemBalance at1st January 2014 101,632,425 - 244,161,127 16,222,132 362,015,684Profit for the years - 76,317,010 - - 76,317,010Transfer to share Capital 127,040,531 (127,040,531) 0Shareholders proposed dividends - (60,000,000) - - (60,000,000)

Transfer to reserves - (16,317,010) 16,317,010 -Disposal Revaluation Reserve - (57,178) (57,178)

Balance at 31st December 2014 228,672,956 - 133,437,606 16,164,954 378,275,516

25

(1) Incorporation and activities

Tadamon Islamic Bank was established as a public limited liability company and was registered in Khartoum , Sudan on 28, November 1981 under the 1925 Sudanese Companies Act . The bank is authorized to carry out all banking, financial and investment activities.The bank carries out its business activities through its head office in Khartoum and its 20 branches in Sudan . The bank also owns 99% of the equity of the fallowing subsidiary companies :-Tadamon Real Estate Co. Tadamon Agricultural Co. (Ceased operations in 2001)Tadamon Trading Co. ( Ceased operations in 2002)Tadamon Services Co. (Ceased operations in 1992)Tadamon Financial Services Co.

(2) significant accounting policies (a) general The bank uses the historical cost concept and accrual basis in recording its assets, liabilities , revenues and expenses , except fixed assets which were revalued and recognized on the basis of market prices at the time of valuation in 1997.(b) Consolidated Financial Statements The consolidated financial statements include the financial statements of Tadamon Real Estate Co. and Tadamon Financial Services Co. which are 99% owned by the Bank. The effects of transactions between the bank and its consolidated subsidiaries have been eliminated . The other subsidiaries which ceased operations and did not have financial statements were not consolidated.(c) depreciationFixed assets are depreciated , using straight line method , and annual fixed installments over their estimated useful lives. The following are the annual rates as fixed by tax authorities

20% Motor cars10%Equipments10%Furniture2.5%Building30%Computer

(d) Foreign currencies Transactions in foreign currencies are translated to in Sudanese Pounds at the prevailing exchange rates at the dates of the transactions. Assets and liabilities in foreign currency at the date of the statement of financial position are translated to the Sudanese Pounds at the prevailing exchange rate at the date of statement of financial position. All differences resulting from translation of foreign currencies are recognized in the income statement.(e) Recognition of profits and losses of direct investment transactions Profits and losses from Musharaka and Salam are recognized upon liquidation of each transaction. Murabaha profits and losses are recognized upon receipt of installments from customers. Mudaraba and investment securities profits and losses are recognized at the time of liquidation. The bank’s share of profits for any period, resulting from partial or final settlement between the bank and the Mudarib is recognized in the accounts for that period to the extent that the profits are being distributed. The bank’s share of losses for any period is recognized for that period to the extent that such losses are being deducted from the Mudaraba capital.Ijara revenue is recognized in the accounting period in which the installment is due.(f) Provision for doubtful debts Provision for doubtful debts is made after the bank’s management examines each receivable according to the guidance of the Bank of Sudan (Central Bank). (g) Investment risk provision Provision for investment risks is made after the bank’s management examines each transaction

NOTES TO ThE CONSOlIdATEd fINANCIAl STATEmENTSfOR ThE yEAR ENdEd dECEmBER 31, 2014


26

of musharaka , murabaha or direct purchase , according to the guidance of the Bank of Sudan.

(h) Measurement of investments as at the end of the period(1) Deferred sales receivables These are recorded at the time of occurrence at their face value and at their cash equivalent value at the end of the financial period.

(2) Mudaraba Mudaraba investments are measured at the end of the financial period by the amount paid or the amount placed under the disposition of the mudarib after deduction of capital repayment, if any .

(3) Musharaka Musharaka investments are measured at the end of the financial period, in the bank’s financial position at their historical value after deduction of investment risk provisions , if any

(4) Inventories Inventories are shown , in the statement of financial position ,at their historical cost or market value whichever is lower.

(5) Shares in Other Companies Shares in other companies are shown in the statement of financial position at cost less/provision for diminution of their value.

(3) Sharia Supervisory Board The bank is not subject to the supervision of a Sharia supervisory board, instead its operations are subject to the bank’s Fatwa and Research Department.This department supervises the banks’ transactions and operations from the Sharia perspective.

(4) Zakat and tax treatment The bank is subject to Zakat according to the circulars of the Zakat Chamber. And zakat is computed in accordance with the

Accounting and Auditing Organization for Islamic Financial Institutions ( AAOIFI ) Financial Accounting Standard no 9 (Zakat).The bank and its subsidiaries are subject to business profit tax which is computed according to the Sudanese Chamber of Taxation circulars.

(5) Return of unrestricted investment account holdersThese are calculated on a quarterly basis. No advances are paid on account of investment profits. Unrestricted investments fund’s withdrawals and additions are allowed. Profits are allocated between the unrestricted investment account holders and bank on the basis of (70 : 30%) 30 %thereof to the bank as a mudarib .Profits are allocated between the unrestricted investments account holders and the equity owners according to the funds invested by each.


27


(3) Cash and cash equivalentsItem 2014 SDG 2013 SDGCash and cash equivalents include Cash in hand – local 39,919,643 36.463.319Cash in hand – foreign 2,160,352 2.363.592Cash with Bank of Sudan 872,780,439 837.559.674Cash with foreign banks and correspondents 105,198,596 229.845.318

1,020,059, 030 1,106,231,903

(4) Cash reserves with Bank of SudanItem 2014 SDG 2013 SDGIn local currency 160,787,939 136.289.856In foreign currency 112,051,388 138.236.066

272,839,327 274.525.922

(5) Deferred sales receivables Item 2014 SDG 2013 SDGMurabaha 439,532,536 384.794.628Salam 5,356,425 516.555Mugawala 336,508,961 326.204.789Leasing 7,325,498 2.136.843Construction 43,875,000 23.400.000Other (5/A) 14,804,625 11.444.750Total 847,403,045 748.497.565Less deferred sales unearned profits 171,646,019 158.678.445Total 675,757,026 589.819.120Less provision for investment risk - 4,494,187 -3.561.828Less provision - 2,662,618 -8.005.495Net deferred sales receivables 668 ,600,221 578.251.797

28


Other (5/A)Item 2014 SDG 2013 SDGDefaulted Letters of guarautee 90,000 90.000Musharaka (Gum Arabic) 2,095,765 2.095.765Investment in subsidiary companies 12,618,860 9.258.985Total 14,804,625 11.444.750

(6) Investment securities Item 2014 SDG 2013 SDGInvestment securities include securities held in :-shahama 729,510,784 674.883.496Other funds 437,228,980 333.056.459Total 1,166,739,764 1.007.939.955 Provision for doubtful debts - 139,646,944 -110.000.000Total 1,027,092,820 897.939.955

(7) Foreign DepositsItem 2014 SDG 2013 SDGInvestment accounts with correspondents 96,029,192 159.119.778Investment funds with Islamic bank Gadha 7,879,158 7.450.875Total 103,908,350 166.570.653

29


(8) Musharaka investments Item 2014 SDG 2013 SDGmusharakat 23,957,142 69.358.797Mudharaba 5,966,900 -Winter season portfolio 39,922,981 38.756.280Stock strategy portfolio 31,942,588 18.728.877Gum Arabic portfolio 10,000,000 10.000.000Cotton portfolio 30,000,0000 25.000.000Total 141,789,611 161.843.954Less provision for investment risk - 257,646 -690.671Less provision for doubtful debts - 291,682 -291.682Net balance 141,240,283 160.861.601

(9) Inventories Item 2014 SDG 2013 SDGThese represent murabaha direct purchase stocks 15,878,072 9.452.471Total 15,878,072 9.452.471

(10) Other assetsItem 2014 SDG 2013 SDGStaff loans 24,055,990 23.347.212Exchange differences are waiting ratification by the bank of sudan * 16,114,377 19.564.377

Sudan local bank window 68,519,230 2.896.405Stocks of stationary and printing 1,016,074 812.816Prepayments (10/A) 1,475,420 1.279.118Others (10/B) 1,793,679 7.000.242Total 112,974,770 54.900.170

*Difference of exchange price of (LCD) belonging to Sudanese union of business men settled by bank and guaranteed to be repaid by Bank of Sudan .

30


(10/A) Prepayment Item 2014 SDG 2013 SDGRent paid in advance 140,574 196.750Worker’s uniform 186,950 150.405New year diaries costs 460,000 302.000Business profit tax 512,311 518.363vehicles’ insurance prepaid 175,585 93.823Scientific institutions (Swift) 0 17.777Total 1,475,420 1.279.118

(10/B) Others Item 2014 SDG 2013 SDGWorld post coupons 11,610 13.290Legal expenses and fuel paid in advance 17,961 108.722Maintenance paid in advance 44,079 28.515Advertising paid in advance 436,700 100.000Stamps 86,926 16.708Other receivables 52,150 300Export 1,144,253 6.732.707Total 1,793,679 7.000.242

31


(11) Shares in other companiesItem 2014 SDG 2013 SDGSudanese Bricks Company 13.155 13.155Medical Services Company 2.000 2.000Electronic Banking Services Co. 116,898 116.440Wafra Co. For storage 3.630 3.630Kagabar Electricity co. 50.000 50.000National Media House 100.000 100.000Sondos Agricultural project 30.000 30.000Sudanese Agency for Insurance & Exports Financing 139.373 139.373The financial Investment Bank 200.000 200.000National petroleum company 18.312 18.312Anaam company 43.549 43.549Islamic Development company 80.931 80.931Sudanese Egyptian Bank 136,114,363 0Total 136,912,211 797.390

32

The

atta

ched

not

es fr

om 1

thro

ugh

28 fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts

(12)

Fix

ed a

sset

s

Cos

tB

uild

ings

SDG

Land

SDG

Car

s and

mot

or

cycl

esSD

G

Furn

iture

and

de

cora

tion

SDG

Equi

pmen

tsSD

GC

ompu

ter

SDG

Oth

er a

sset

sSD

GTO

TAL

SDG

At 1

Janu

ary

2014

75.9

58.9

8721

.992

.063

7.38

1.15

74.

040.

217

2.38

1.13

33.

780.

138

1.54

9.71

311

7.08

3.40

8A

dditi

ons

26,5

39,6

051,

434,

212

1,18

0,24

279

8,18

91,

484,

230

1,71

7,06

13,

823,

914

36,9

77,4

53D

ispo

sal

(457

,179

)-

(551

,284

)(4

56,9

13)

(254

,010

)(9

53,8

28)

(3,9

16,0

38)

(6,5

89,2

52)

At 3

1Dec

embe

r 201

410

2,04

1,41

323

,426

,275

8,01

0,11

54,

381,

493

3,61

1,35

34,

543,

371

1,45

7,58

914

7,47

1,60

9

Dep

reci

atio

nA

t 1Ja

nuar

y 20

145,

164,

289

-2,

244,

437

1,34

5,85

991

3,55

284

2,98

0-

10,5

11,1

17Fo

r the

yea

r97

2,00

4-

1,50

4,04

441

2,05

536

5,43

21,

220,

648

-4,

474,

183

on D

ispo

sals

--

(455

,071

)(4

47,7

12)

(245

,309

)(9

53,0

57)

-(2

,101

,149

)A

t 31D

ecem

ber 2

014

6,13

6,29

3-

3,29

3,41

01,

310,

202

1,03

3,67

51,

110,

571

-12

,884

,151

Valu

e N

et b

ook

amou

nts

At 3

1Dec

embe

r 201

495

,905

,120

23,4

26,2

754,

716,

705

3,07

1,29

12,

577,

678

3,43

2,80

01,

457,

589

134,

587,

458

At 3

1Dec

embe

r 201

370

,794

,699

21,9

92,0

625,

136,

719

2,70

5,30

01,

456,

638

2,93

7,15

81,

549,

713

106,

572,

289

33


(13) Current and saving accountsItem 2014 SDG 2013 SDGCurrent accounts-local 1,008,100,816 840.541.935Current accounts- foreign 488,436,156 618.716.020Saving accounts-local 126,017,546 104.746.262Saving accounts- foreign 2,589,553 2.930.694

1,625,144,071 1.566.934.911

(14) Other liabilitiesItem 2014 SDG 2013 SDGAccrued expenses 142,410 207.271Inward transfers 960,277 1.230.898Bills payables 128,516,577 135.429.934Cheques under collection 3,630,034 5.005.440Cash deposit against guarantees 102,833,913 125.955.468Margin of guarantee 5,238,368 7.776.517Amount held back 30,424,925 13.913.944Dividends payable 60,944,267 48.850.249Creditors 143,586 68.158Sudan foreign bank window 66,703,171 149.018Custom trading 8,213,376 2.221.141Stamp collections 414,496 566.530Revenues received in advance 611,248 466.002Provision of Deposit security fund 4,150,993 3.944.021External audit fees 50% 80,000 70.000Provision of zakat 4,454,946 4.737.196Provision of tax 4,994,807 4.286.263Employees bonus 16,900,000 5.515.700Legal advisor’s fees 54,000 30.000Board of director’s emoluments 1,360,000 1.180.000Provision for now ATM units 17,126,034 -Surplus of provision for financing risks 11,270,435 -Others (14/A) 5,935,021 9.977.037Total 475,102,884 371.580.787

34


(14/A) Others Item 2014 SDG 2013 SDGDeposits under demand 1,128,941 1.201.917Personal income tax 36,283 41.234Closed Branches Liquidation 5,937 5.937Amanat of the owners of the building 9,640 13.440Social insurance - 4.323Requirement 3,147,137 1.556.124Export 1,607,083 7.154.062Total 5,935,021 9.977.037

(15) ProvisionsItem 2014 SDG 2013 SDGEnd of service benefits provision 17,800,459 14.649.210Total 17,800,459 14.649.210

(16) Rights of unrestricted investment accountsItem 2014 SDG 2013 SDGInvestment accounts - local 545,509,593 400.991.738Investment accounts - foreign 532,260,019 589.115.608

1,077,769,612 990.107.346

35


(17) Share capitalItem 2014 SDG 2013 SDGAuthorized capital 400,000,000 400.000.000Paid up capital 228,672,956 101.632.425

(18) Fixed asset revaluation surplus The Bank revalued its fixed assets in 2007 by experts resulting in Fixed assets revaluation surplus.

(19) Contra AccountItem 2014 SDG 2013 SDGLetters of credit 162,606,708 326.382.769Letters of guarantee 55,360,792 70.181.887Cheques under collection 712,395,370 739.705.568Total 930,362,870 1.136.270.224

(20) Deferred sales incomeItem 2014 SDG 2013 SDGProfit of Murabaha 68,506,974 57.591.103Profit sale of Salam 127,572 363.151Profit of Mugawala 3,556,161 3.874.272Profit from construction activities 1,275,000 600.000Profit of Mudarba 302,354 -Total 73,768,061 62.428.526

36


(21) Investment incomeItem 2014 SDG 2013 SDGProfit of Musharaka 4,096,155 4.807.499Profit of Investment securities 111,954,270 134.101.378Revenue from foreign investment 1,406,182 3.175.179Revenue investment in subsidiary companies operating 203,665 92.138Total 117,660,272 142.176.194

(22) Revenue from banking servicesItem 2014 SDG 2013 SDGAccounts -keeping commission 2,687,432 2.587.013Letters of credit commission 16,758,977 21.692.883Bank’s draft cheques and transfer commission 6,242,473 7.428.521Guarantees commission 3,563,473 3.506.590Cheque books commission 375,148 334.225Revenue from foreign currency * 1,828,038 3.910.375 Total 31,455,541 39.459.607

*Difference in prices of effects ( purchase & sales foreign currency )

37


(23) Other revenuesItem 2014 SDG 2013 SDGPost and communications revenues 284,167 217.036Profit on sales of fixed asset 296,586 501.120Revenue from services - companies 1,603,232 1.337.229Revenue from maintenance - companies 250,202 266.808Revenue from valuation - companies 5,288,459 6.041.057Profit of rent 1,754,601 1.007.876Profit of stock 452,159 1.352.044

Bad debts collection 1,337,465 1.188.700Insurance recovery 7,763 94.404Recovery of debt destructible (Investment) 69,492 13.293Profit on Share capitalizes 27,214,234 -Total 38,558,360 12.019.567

38


(24) General and administrative expensesItem 2014 SDG 2013 SDGSalaries and allowances 39,069,629 31.747.853Travel expenses 1,533,169 1.172.925Stationery and printing 581,731 521.187Communication expenses 345,296 282.585Refreshments 175,385 129.812Electricity and water 809,551 797.387Legal fees 152,381 66.827Insurance 949,095 833.982Donations and gifts 614,817 435.161Rent and municipality fees 1,623,415 1.554.075Subscriptions to professional institutes 422,794 532.484Training 1,965,917 1.610.519Public relations 1,506,517 1.664.008Annual general meeting expenses 88,805 67.214Business Tax adjustment 1,057,940 706.345Liquidity management expenses 1,974,785 1.126.995Building maintenance 386,370 230.677Equipments maintenance 1,848,205 1.545.624Maintenance of motor cars 1,002,377 758.960Deposit security fund 3,200,000 3.250.000Depreciation 4,474,182 3.616.458Audit fees 130,000 120.000Board of directors remuneration 1,360,000 1.180.000Employees bonus 16,900,000 5.515.700Legal Advisor’s fees - 40.000Provision investment risk 6,193,714 1.967.891End of service benefits 3,526,436 2.867.245Operating expenses companies 1,644,601 1.565.677Social services 1,500,933 1.396.096Guard & Security 682,330 598.841Operation Expenses Electronic generators 661,007 655.171Other Expenses (24 / A) 780,777 622.412Total 97,162,159 69.190.111

39


(24/A) Other ExpensesItem 2014 SDG 2013 SDG Post 25,045 20.998Cleaning expenses 490,715 385.180Port rage and transportation 80,027 50.812Consultancy & researches 15,000 24.000Bad debits - 31.927Other expenses 108,693 44.550Expenses of small tools for maintenance 61,297 64.945Total 780,777 622.412

(25) Zakat accountItem 2014 SDG 2013 SDGBank’s zakat provision 4,150,900 4.491.717Estate Company zakat provision 275,902 213.042Financial Company zakat provision 28,144 32.437

4,452,946 4.737.196

Business profits tax Item 2014 SDG 2013 SDGBank’s tax provision 3,849,100 3.420.722Estate Company tax provision 329,229 491.162Financial Company tax provision 158,750 105.140

4,337,079 4.017.024

40


(26) Amounts transferred to reserves & proposed distributions to shareholder Item 2014 SDG 2013 SDGTransfer to legal reserves 12,915,216 11.239.365Transfer to general reserves 3,401,794 8.121.733Transfer to share capital 0 0Proposed Distribution 60,000,000 50.816.213Total 76,317,010 70.177.311

A ) Investments in subsidiary companies operating * Al Tadamon Real Estate co . 110.000 110.000* Al Tadamon financial Services co . 496.000 246.000* Al Tadamon financial Services co (Letters of guarantee Khartoum investment securities co. ) Amount 25.000 SDG* Al Tadamon Real Estate co (Letters of guarantee General Manager Bank of season sudan) Amount 44.000 SDG

B – There are outstanding financing operations (Murabahat ) granted in the normal course of business and on commercial basis as fallows : * Al shark Al Awsad Packing Factory (Nour ElDien saeed Sayed) 2.250.000 SDG* Mr. Ali khedi hassn Kimball 1.065.433 SDG

(28) Financial Risks Financial risks represent risks arising from changes in foreign currency prices The bank protects it self from currency prices by fluctuation obtaining suffiuent guarantees to cover such risk in accordance with internal policies of the ban

Annual Report 2014

Documents

Transcript of Annual Report 2014