QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 TOGETHER WITH INDEPENDENT AUDITOR’S REVIEW REPORT
QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR DECEMBER 31, 2007 INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 _____________________________________________________________________________ TABLE OF CONTENTS
Page Independent Auditor’s Review Report
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Interim Condensed Balance Sheet
1
Interim Condensed Income Statement
2
Interim Condensed Statement of Changes in Equity Interim Condensed Statement of Cash Flows Notes to the Interim Condensed Financial Statements
3-4 5 6-8
INDEPENDENT AUDITOR’S REVIEW REPORT
To The Board of Directors Qatar International Islamic Bank (Q.S.C.) Introduction We have reviewed the accompanying interim condensed financial statements of Qatar International Islamic Bank (Q.S.C.) (“the Bank”) as at March 31, 2008, comprising of the interim balance sheet as at March 31, 2008 and the related interim statements of income, changes in shareholders’ equity, and cash flows for the three month period then ended, and certain explanatory notes. Management is responsible for the preparation and presentation of these interim condensed financial statements in accordance with the Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions, International Financial Reporting Standard IAS 34 Interim Financial Reporting (“IAS 34”) and the Bank’s undertaking to operate in accordance with the Islamic Shari’a rules and principles. Our responsibility is to express a conclusion on these interim condensed financial statements based on our review. The interim condensed financial statements for the three month period ended March 31, 2007 and the financial statements for the year ended December 31, 2007 were audited by another auditor whose reports dated April 12, 2007 and March 5, 2008 respectively expressed an unqualified opinion. Scope of review We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of the interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedure. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial statements are not presented fairly, in all material respects, in accordance with the Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions and the IAS 34 and Qatar Central Bank regulations.
For Deloitte & Touche
Doha – Qatar April 17, 2008
Samer Jaghoub License No. 88
QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR INTERIM CONDENSED BALANCE SHEET AS AT MARCH 31, 2008 _____________________________________________________________________________________ March 31, December 31, 2007 2008 Note (Reviewed) (Audited) QR.’000 QR.’000 ASSETS
Cash and balances with Qatar Central Bank Due from banks and financial institutions and other financial institutions Deu from financing activities Financial investments Investment in associates Investment properties Property, furniture and equipment Other assets TOTAL ASSETS
458,472
431,483
3,800,690 5,060,046 908,205 152,365 220,362 37,545 261,386 -------------10,899,071 ========
3,718,681 4,388,628 947,112 157,690 142,209 34,390 131,016 -------------9,951,209 ========
14,352 2,569,289 377,180 -------------2,960,821 -------------5,471,367 --------------
54,513 2,033,327 322,434 -------------2,410,274 -------------5,184,551 --------------
700,782 800,130 210,974 20,344 22,024 560,626 152,003 -------------2,466,883 --------------
700,782 800,130 210,974 45,211 22,024 560,626 16,637 -------------2,356,384 --------------
10,899,071 ========
9,951,209 ========
LIABILITIES, HOLDERS OF UNRESTRICTED INVESTMENT ACCOUNTS AND EQUITY LIABILITIES
Current accounts for banks and financial institutions Customers’ current accounts Other liabilities TOTAL LIABILITIES HOLDERS OF UNRESTRICTED INVESTMENT ACCOUNTS EQUITY
Paid up share capital Legal reserve General reserve Fair value reserve Risk reserve Proposed bonus shares Retained earnings TOTAL EQUITY TOTAL LIABILITIES, HOLDERS OF UNRESTRICTED INVESTMENT ACCOUNTS AND EQUITY
3 4
These interim condensed financial statements were approved by the Board of Directors on April 17, 2008 and signed on its behalf by the following:
.....................................................…………………………. Khaled Bin Thani Al Thani Chairman and Managing Director
…………………………………… Abdul Basit Ahmed Al Shaibei Chief Executive Officer
The attached notes 1 to 8 form part of these interim condensed financial statements -1-
QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR INTERIM CONDENSED INCOME STATEMENT FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 _____________________________________________________________________________________ Three Month Period Ended March 31, 2008 2007 (Reviewed) (Reviewed) QR.’000 QR.’000 Income from financing activities Income from Investing activities Total income from financing and investing activities Commission and fee income Commission and fee expense
104,891 87,072
98,818 61,268
-------------
-------------
191,963
160,086
-------------
-------------
20,856 (1,186)
------------Net commission and fee income Gain (loss) from foreign exchange operations NET OPERATING INCOME
General and administrative expenses Depreciation and amortisation Provision for impairment of financial investments Revenue from sale of portion in associate
Less: Share of holders of unrestricted investment accounts in the net profit NET PROFIT FOR THE PERIOD DUE TO SHAREHOLDERS
BASIC EARNINGS PER SHARE (QR)
-------------
19,670
14,697
-------------
-------------
2,704
1,555
-------------
-------------
214,337
176,338
-------------
-------------
(24,117) (2,043) (515) --
------------NET PROFIT FOR THE PERIOD BEFORE SHARE OF HOLDERS IN UNRESTRICTED INVESTMENT DEPOSITS
15,811 (1,114)
(25,330) (1,707) (3,802) 5,462
------------
187,662
150,961
-------------
-------------
(52,296)
(45,406)
-------------
-------------
135,366 ======== 1.93 ========
105,555 ======== 1.51 ========
The attached notes 1 to 8 form part of these interim condensed financial statements -2-
QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR INTERIM CONDENSED STATEMENT OF CASH FLOWS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 _____________________________________________________________________________ Three Months Ended March 31, 2008 2007 (Reviewed) (Reviewed) Note QR.’000 QR.’000 NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES
INVESTING ACTIVITIES Purchase of financial investments Purchase of property and equipment Proceeds from sale of financial investments Proceeds from disposal of associate company Proceeds from sale of investment properties Purchase of investment properties Net cash flow used in investing activities
(203,721) --------------
3,662 --------------
(129,087) (4,973) 151,752 -14,292 (91,168) -------------(59,184) --------------
(110,976) (1,703) 12,683 41,877 ---------------(58,119) --------------
309,903 ---------------309,903 -------------46,998
(163,602) (2,450) 429,631 -------------263,579 -------------209,122
3,915,025 --------------
3,643,557 --------------
3,962,023 ========
3,852,679 ========
FINANCING ACTIVITIES
Net increase (decrease) in holders of unrestricted investment accounts Board of Directors remuneration paid Subscription for increase in share capital Net cash flow from financing activities INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the period CASH AND CASH EQUIVALENTS AT 31 MARCH
7
The attached notes 1 to 8 form part of these interim condensed financial statements -5-
QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 ______________________________________________________________________________________________________________________________________________
Balance at January 1, 2008 Net fair value movements Net profit for the period Balance at March 31, 2008
Share capital QR’000
Statutory reserve QR’000
General reserves QR’000
Fair value reserve QR’000
Risk reserve QR’000
Proposed bonus shares QR’000
Retained earnings QR’000
Total QR’000
700,782 -------------700,782
800,130 -------------800,130
210,974 -------------210,974
45,211 (24,867) ------------20,344
22,024 -------------22,024
560,626 -------------560,626
16,637 -135,366 -----------152,003
2,356,384 (24,867) 135,366 ------------2,466,883
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The attached notes 1 to 8 form part of these interim condensed financial statements -3-
QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2007 _________________________________________________________________________________________________________________________
Balance at 1 January 2007 Issue of bonus shares Net change in fair value reserve Net profit for the period Subscription for increase in the share capital Balance at 31 March 2007
Share capital QR’000
Statutory reserve QR’000
General reserve QR’000
424,224 233,594 --42,963 -----------700,781 =======
413,463 ---386,668 -----------800,131 =======
210,974 ---------------210,974 =======
Fair value reserve QR’000 23,646 -(26,562) -------------(2,916) =======
Risk reserve QR’000 17,760 ---------------17,760 =======
The attached notes 1 to 8 form part of these interim condensed financial statements -4-
Proposed issue of bonus shares QR’000 233,594 (233,594) ---------------=======
Retained earnings QR’000 101,532 --105,555 ------------207,087 =======
Total QR’000 1,425,193 -(26,562) 105,555 429,631 ------------1,933,817 =======
QATAR INTERNATIONAL ISLAMIC BANK (Q.S.C.) DOHA - QATAR NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 ____________________________________________________________________________ 1
STATUS AND ACTIVITIES
Qatar International Islamic Bank (Q.S.C.) (“the Bank”) was incorporated under the Amiri Decree No. 52 of 1990. The Bank operates through its head office located Grand Hamad Street in Doha and (10) local branches. The Bank is listed and its shares are traded in the Doha Securities Market. The Bank is engaged in banking, financing and investing activities in accordance with its Articles of Incorporation, Islamic Shari’a principles and regulations of Qatar Central Bank 2
ACCOUNTING POLICIES
These interim condensed financial statements are prepared in accordance with the Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions and the International Accounting Standard (IAS) 34 - Interim Financial Reporting. The accounting policies used in the preparation of the interim condensed financial statements are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2007. These interim financial statements should be read in conjunction with the 2007 annual financial statements and the notes attached thereto. The interim condensed financial statements do not contain all information and disclosures required for full financial statements prepared in accordance with Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions. In addition, the results for the 3 months ended 31 March 2008 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2008. 3
SEGMENT INFORMATION
The Bank is organised into one main business segment, which comprises providing financing in accordance with the rules of the Islamic Sharia. The geographical distribution of the Bank’s income is summarised as follows:
Three Month Ended March 31, 2008 2007 (Reviewed) (Reviewed) QR.’000 QR.’000 Income and expenditure: International portfolio Local portfolio Other income
63,168 128,795 23,560 -----------215,523
Total income Expenses and provisions Depositor’s share of profits
(27,861) (52,296) -----------135,366 =======
Net profit for the period
-6-
55,419 104,667 22,828 ------------182,914 (31,953) (45,406) -----------105,555 =======
4
STATUTORY RESERVE
In accordance with Qatar Central Bank regulations, 10% of the profit for the period shall be taken to a statutory reserve until this reserve equals 100% of the capital. No transfer has been made for the period ended 31 March 2007 as the bank will transfer the total amount by 31 December 2008. 5
SUBSEQUENT EVENT
On 1 April 2008, the General Assembly approved a bonus share issue of 80% of the 2007 share capital (2007: bonus shares of 50% of the share capital relating to the year ended 31 December 2006). 6
CONTINGENT LIABILITIES
Three Month Ended March 31 2008 2007 (Reviewed) (Reviewed) QR.’000 QR.’000 (a) Deferred or contingent commitments Documentary credits Acceptances Letters of guarantees Collection notes
118,163 15,638 473,863 14,051 -----------621,715 ------------
76,390 22,408 394,289 11,708 ------------504,795 -------------
676,621 41,571 341,750 -----------1,059,942 -----------1,681,657 =======
181,085 57,139 220,002 ------------458,226 ------------963,021 =======
(b) Other contracts and commitments Commitments and unused credit limits Restricted investments balances Istesna commitments
TOTAL 7
CASH AND CASH EQUIVALENTS
For the purpose of the cash flow statement, cash and cash equivalents include cash and balances with Qatar Central Bank, excluding the cash reserve, and due from banks and other financial institutions.
- 7-
8
RELATED PARTY TRANSACTIONS
The Bank carries out various transactions in the ordinary course of business with shareholders or with members of the Board of Directors and the companies in which they have significant interests, on terms similar to those carried out with unrelated third parties. The amount outstanding/transactions during the period with members of the Board or the companies in which they have significant interests were as follows: 31 March 2008 (Reviewed) Board of Directors Others QR’000 QR’000
31 December 2007 (Audited) Board of Directors Others QR’000 QR’000
4 47,659 1,646 ----------49,309 ======
-847 -----------847 ======
18,396 41,533 1,976 ----------61,905 ======
-874 -----------874 ======
5,573 5,836 ----------11,409 ======
3,001 11,622 ----------14,623 ======
7,375 16,783 ----------24,158 ======
826 13,708 ----------14,534 ======
46,284 ======
3 ======
2,264 ======
20,103 ======
3,821
66
4,952
======
======
======
Balance sheet items Assets Murabaha Musawama Istesna
Liabilities Current account balances Unrestricted investment deposits
Off balance sheet items: Letter of credits, letter of guarantees and acceptances Income statement elements Fees and commission income
- 8-
7 0
70 ======