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¨                THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS .

Auditors’ report attached

                            Mona Yassine                                                Ahmed El Bardai

                               Deputy Chairman                                               Chairman

BANK’S AUDITORS

                                   Hassanein Kamel Ahmed                                                Mahmoud Asaad Mohamed Abdel Latif

(Abou Saada Co. ) Nexia Int’l                          Central Organization of Auditing  

 

 

 

 

 

 

                                                                       

 

 

 

 

 

 

 

 

 

 

BANQUE DU CAIRE SAE

(SUMMARY) INCOME STATEMENT

FOR THE YEAR ENDED   30/6/2003

                                                                                      (Figures In Thousand L.E)

 

¨                   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS .

 

 

                         Mona Yassine                                                 Ahmed El Bardai

                                 Deputy Chairman                                                    Chairman                  

 

 

 

 

 

 

 

 

 

 

 

 

 

BANQUE DU CAIRE SAE

 (SUMMARY) CASH FLOWS STATEMENT

FOR THE YEAR ENDED 30/6/2003

                                               

                                                                                                                                                               

(Figures  In Thousand L.E )

 

 

 

 

Mona Yassine                                                 Ahmed El Bardai

                                  Deputy Chairman                                                Chairman                  

  

 

 

 

 

 

 

 

 

 

 

BANQUE DU CAIRE SAE

STATEMENT OF PROPOSED DIVIDENDS

FOR THE YEAR ENDED 30/6/2003

 

(Figures  In Thousand L.E )

 

 

·75% OF STATE SHARE IS TO BE DIRECTED TO SUPPORTIVE RESERVE WITH A TOTAL OF  L.E 20 150 THOUSANDS .

 

 

 

 Mona Yassine                                                Ahmed El Bardai

                                  Deputy Chairman                                                 Chairman                  

 

  

 

 

 

BANQUE DU CAIRE SAE

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEAR ENDED 30/6/2003

  (Figures In Thousand L.E)

 

 

 

 

 

 

 

 

 

 

 

 

 

-1-

 

NOTES TO THE SUMMARY FINANCIAL STATEMENTS FOR THE YEAR ENDED 30/6/2003 :

 

(1) ACTIVITY

 

            Banque Du Caire , an Egyptian Joint Stock Company working as a Commercial Bank, was established on 15/5/1952 under the National Commercial Law of 1883 and presents all banking services relating to its activity through its head office in Cairo, 122 branches inside Egypt and 5 foreign branches

 

(2) SIGNIFICANT  ACCOUNTING POLICIES

 

A)                Basis of Preparing Financial Statements  

                                    Financial Statements are prepared in accordance with the Egyptian Accounting Standards which copes with the International Accounting Standard (IAS)  and applicable local laws and regulations.

On preparing the financial statements, the bank has amended its classification and evaluation policy for financial investments to be in accordance with IAS No. 39 “Financial  Instruments : Recognition and Measurement”.

 

 

B)                  Foreign Currency Transactions

 

                        Bank accounts are held in Egyptian Pounds and transactions in foreign currencies are translated during the financial year at the exchange rates prevailing at the transaction date. Balances of monetary assets and liabilities in foreign currencies are reevaluated at year end on basis of foreign exchange rates on that date and the difference is recognized on the income statement under the item: Gains  (losses) from foreign currency transactions.

 

C)                  Income Recognition

 

Income is recognized on the accrual basis except for the interest income on non-performing loans, which ceases when the recovery of interest or the principal is in doubt. Income from shares and mutual funds certificates are recorded when declared .

 

D)                  Treasury Bills

 

Treasury bills are recorded at nominal value and the issuing discount is recorded under the item: credit balances and other provisions. Treasury bills appear on the balance sheet net of issuing discount.

 

E)                   Selling (purchasing) Treasury Bills with Repurchase (Resell) Commitment

 

Transactions concerning selling (purchasing) treasury bills with repurchase (resell) commitment are recorded in the balance sheet.

 

 

 

(2)

 

 

The expense / revenue of these transactions is recorded in the income statement under the items: Interest expense, and interest income (according to each case).

 

F)                   Valuation of  Trading investments

 

Trading investments including investment portfolios managed by others, and mutual funds certificates not issued by banks and insurance companies are measured at the end of each financial period at fair value, which represents the market value, and the revaluation differences are recognized in the income statement.

 

Trading investments that are no longer classified as trading investments are measured at book value, which is adjusted in case of any decline according to a comprehensive objective study of the latest financial statements of the issuing company. The revaluation differences are recognized in the income statement.

Mutual funds certificates issued by banks and insurance companies are measured at fair value, which represents the redemption value of these certificates at revaluation date. The revaluation differences are recognized  in the income statement.

 

G)                  Valuation of Investments Available for Sale

 

Investments available for sale are measured at the lower cost or fair value for each investment separately. The revaluation differences are recognized in the income statement as: Other investments revaluation differences. In case of increase in the investment fair value, the increase is added to the same item to the extent of previous declines.

                       

H)                  Valuation of Investments Held to maturity

 

The first issues of purchased bonds are measured at fair value which represents the nominal value plus/ minus the issuance premium / discount according to each case. The issuance premium/discount is amortized by using the straight line method. The amortized amount is recognized in the income statement under the item: Income from treasury bills & bonds .

 

The bonds purchased from the Stock Exchange are measured in the same way as in the above with a value that is more or less than the nominal value. The cost is reduced by deducting the yield of the period preceding the date of purchase.

Any prospective gain or loss arising from a change in the fair value of each bond is included in the income statement in the period in which it arises and the book value is accordingly adjusted and the differences are recognized in the income statement under the item : Other investments revaluation differences. In case of increase in the

 

 

(3)

 

 investment fair value, the increase is added to the same item to the extent of previous declines.

The book value of the foreign currency bond is adjusted with the revaluation differences according to the exchange rates prevailing at the revaluation date. The revaluation differences are recognized in the income statement under the item: Gains (losses) from foreign currency transactions.

Mutual funds certificates compulsory held by the bank till fund expiry date as the bank is the issuer of the mutual funds, are measured at cost value. Any prospective gain or loss arising from a change in the redemption value of these certificates is included in the income statement in the period in which it arises under the item: Other investments revaluation differences. In case of increase in the investment redemption value, the increase is added to the same item to the extent of previous declines.

 

I)                    Valuation of  Investments in subsidiaries and Associated Companies

 

              Investments in subsidiaries and associated companies are measured at

cost value. Any prospective gain or loss arising from a change in the fair value of each investment is included in the income statement in the period in which it arises and the book value is accordingly adjusted and the differences are recognized in the income statement under the item : Other investments revaluation differences. In case of increase in the investment fair value, the increase is added to the same item to the extent of previous declines.

 

            J)         Valuation of assets acquired by the bank in settlement of debts

 

The assets acquired by the bank in settlement of  debts appear on the balance sheet under the item:  Debit balances & other assets at settlement value. Any prospective gain or loss arising from a change  in their fair value is included in the income statement in the period in which it arises. In case of increase in the investment fair value, the increase is added to the same item to the extent of previous declines.

 

            K)        Loans and contingencies provisions

 

                        A provision is provided for specific loans and contingent liabilities in addition to a percentage of all other loans and contingent liabilities net of their cash deposits and bank guarantees to meet general risks in that regard according to management’s experience and periodic detailed studies for loans  and contingent liabilities balances

 

                        Loans are written off when it is no longer feasible to collect such loans by debiting the provision. The proceeds from previously written off loans are added to the said provision.

 

 

 

 

 

(4)

 

            L)        Contingent Liabilities & Commitments 

 

                        The bank’s contingencies in addition to forward foreign exchange contracts, interest rate swaps, FRAs and others appear off balance sheet under the item: Contingent liabilities & commitments as they do not represent real assets or liabilities at balance sheet date.

 

            M)       Cash & Cash Equivalents

 

                        For the purpose of preparing the cash flows statement, this item includes cash balances, balances with the Central Bank of Egypt, balances of current accounts with banks and balances of treasury bills due in three months from acquisition date.

 

            N)        Depreciation

 

                        The straight line method is used in calculating fixed assets depreciation regardless of purchasing date using suitable depreciation rates specified according to the estimated productive age of each asset for one year irrespective of the date of purchase based on the following percentages :

                        Buildings & constructions                                                          5.0%

                        Office Furniture & Safes                                                           20.0%

                        Typewriters, Calculators & Air-conditions                                 20.0%

                        Motor Vehicles                                                                          25%

                        Computers                                                                               20.0%

                        Equipments & Installations                                                        33.3%

 

            O)        Taxes

 

                        Taxes due are computed in accordance with laws, by-laws and instructions in effect whether in Egypt or where foreign branches exist.

                        A provision is made for tax obligations based on necessary studies within the framework of tax claims .

 

(3) Financial Instruments and their Risk Management

 

1.           Financial Instruments

 

a)      The bank’s financial instruments are represented in the financial assets and liabilities. The financial assets include cash and balances with banks, financial investments and loans and advances. The financial liabilities include customers’ deposits and due to banks. Financial instruments also  include rights and obligations stated under “Contingent Liabilities and Commitments” 

Note No. 2 of the “Notes to the financial statements” includes the accounting policies applied to measure and recognize significant financial instruments and the revenues and expenses related thereto.

 

 

 

 

 

 

(5)

 

b)      Financial Instruments fair value

According to the applied valuation basis to evaluate the bank’s assets and liabilities, included in the notes to the financial statements, the financial instruments’ fair value do not substantially deviate from their book values at the balance sheet date. Notes No. 6,9,10 of the “Notes to the Financial Statements” include the fair values of the financial investments other than those acquired for trading at balance sheet date.

 

2.           Risk Management related to financial Instruments

 

a)      Interest rate risk

The value of some financial instruments fluctuates due to the changes  in interest rates related thereto. The bank follows some procedures to minimize this risk .

 

 

b)      Credit Risk

Loans and advances , balances with banks ,  bonds and rights and obligations from others are financial assets exposed to credit risk which is represented in the said parties’ default, a part or in full, the loan granted to them at maturity. The bank adopted  some procedures to minimize the credit risk .

 

c)                  Foreign Currency Risk

The nature of  the bank’s activity required 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 the balancing of foreign currencies positions according to the Central Bank of  Egypt’s  instructions in that respect.

 

 

 

(6)

 

 (4)       Treasury Bills and Government Bonds Discountable at the Central Bank :

 

                                                                                               

                                                                                                                                (Figures In Thousand L.E)

           

(5) Trading Investments                                                                              

 

                                                                                                                                (Figures In Thousand L.E)

 

 

 

 

  

(7)

 

 

 

 

 

 (6) Investments Available for Sale                                                                                 

                                                                                                                                (Figures In Thousand L.E)

MARKET VALUE (listed in stock exchange)                                     3 020 003                 3 021 105 

 

 

 

(8)

(7)     LOANS  TO CUSTOMERS AND BANKS :

                                                                                    (Figures In Thousand L.E)

 

 (8)          LOANS PROVISION (PERFORMING / NON PERFORMING) :

                                                                                                (FIGURES IN THOUSAND L.E)

 

 

 

 

 

(9)

 (9) INVESTMENTS HELD TO MATURITY

(FIGURES IN THOUSAND L.E)

MARKET VALUE (listed in stock exchange)                                          30 995                27 766

 

 

(10)

 (10)  INVESTMENTS IN SUBSIDIARIES AND ASSOCIATED COMPANIES

(FIGURES IN THOUSAND L.E)