Financial &

Investment
Analysis
Report

First Energy Bank

B.S.C. (c)

RANA ALQASIM
Financial & Investment Analysis Report on First Energy Bank B.S.C. (c)

Contents
Profile of the company........................................................................................... 3
Vision: .................................................................................................................... 3
Mission: ................................................................................................................. 3
Address and Website .......................................................................................... 3
Business Summary .............................................................................................. 4
Company History ................................................................................................... 6
Key statistics .......................................................................................................... 7
Market capitalization .......................................................................................... 7
Organizational Chart .............................................................................................. 7
Board of Directors.................................................................................................. 8
Products and services ............................................................................................ 9
Competitors ........................................................................................................... 9
Ownership and Major Holders ............................................................................... 9
Financial Overview ............................................................................................... 12
FEB Financial & Investment Analysis .................................................................... 18
Risk Management Analysis.................................................................................. 21
Conclusion ........................................................................................................... 23
APPENDIX I........................................................................................................... 24
APPENDIX II.......................................................................................................... 26

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Profile of the company

Vision:
“To become the pre-eminent Shariah’s-compliant investment bank in the energy sector with high
professional standards and a commitment to delivering consistent returns to shareholders.”

Mission:
"Charting the Course to create and capture value in the Global Energy Sector"

Address and Website

Bahrain Office
West Tower, 20th floor
Bahrain Financial Harbour
P.O. Box 209
Tel: +973 17170000
Fax: +973 17170170
Manama, Kingdom of Bahrain

Abu Dhabi Representative Office

P.O. Box 130089
Abu Dhabi, United Arab Emirates
Tel +971 2 4458443
Fax +971 2 4459443

Website: http://www.1stenergybank.com/en

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Financial & Investment Analysis Report on First Energy Bank B.S.C. (c)

Business Summary
First Energy Bank’s (FEB) business model is built around 7 core business lines: Project
Development, Private Equity, Mergers and Acquisitions, Islamic Financing, Capital Market,
Asset Management and Treasury.

Project Development
The Middle East and North Africa (MENA) region is the world’s major holder of various energy
related resources. Developing and producing these resources and converting them to the products
needed by the global economy require substantial investments in the energy sector and at
different levels of the value chain.
FEB utilizes its strength to develop industrial projects drawing on all its available resources
along with aligning itself with strategic partners that it has access to in the energy industry.
FEB’s unique strength in this field comes from its strong and diversified shareholder base
combined with the management team’s experience in the industry.
In order to capture and maximize value for FEB’s investors, the project development process
starts from the early stage of conceptualizing the business idea and developing it to achieve a
successful business.
Building on FEB’s financial strength, experience and solid balance sheet, the project
development line enjoys the support of a range of other complementing products and services
including financial advisory and Islamic finance which are essential elements to achieve a
complete and well structured venture.

Private Equity
FEB offers its clients direct investments in private equity opportunities that it identifies in the
MENA region specifically as well as in the international arena. The Division’s investment
strategy is based on two pillars. The first is to identify and invest in regional entities where FEB
has a strong presence. FEB would add value through various activities including increased
capitalization, financial restructuring, and effective market expansion utilizing the Bank’s
extensive network and expertise in these fields. The second investment route is to identify
opportunities in the international market. These opportunities are required to have distinct areas
of strengths such as technology, technical expertise, know how, superior assets class, etc. FEB

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capitalizes on its effective network and marketing capabilities to maximize the value of the
investment in the region through business expansion and setting up new joint ventures.

Mergers and Acquisitions

The expected recovery in the energy industry demand growth creates attractive opportunities for
mergers and acquisitions (M&A). FEB’s considerable financial strength, will allows FEB to
exploit market opportunities to earn superior returns for its clients.

Islamic Financing
Islamic finance has been one of the fastest growing finance segments in recent years. It has
proven to be a resilient and valued sector especially in the Middle East. FEB’s Islamic finance
team focuses on providing structuring and financial advisory services, deriving on many years of
experience in this field and across the region. The team also focuses on providing “ring fenced”
Shariah’s compliant project and structured finance to selected strategic transactions where risks
are mitigated by these structures and returns are maximized.

Capital Market
The Islamic capital market has been growing rapidly in the last decade through the increasing
Shariah’s compliant Sukuk, structured products and hedging instruments mainly by sovereigns,
quasi-sovereigns, internationals, supra-nationals and corporate institutions. FEB’s competent
team is committed to develop and execute long-term strategic and tactical plans to meet portfolio
return objectives and continuously innovate and evaluate investing and financing solutions.

Asset Management
Investors’ demand for Shariah’s compliant investment products has been increasing in recent
years. FEB’s strategy is to provide innovative, diversified and well managed products that suit its
clients’ needs and meets their return requirements. The FEB team is committed to continuously
developing products and providing a well diversified selection of rewarding investments.

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Financial & Investment Analysis Report on First Energy Bank B.S.C. (c)

Treasury
The Islamic banking treasury sector has become increasingly competitive and sophisticated over
the years, with demand being fueled by clients and investors expecting Islamic products to be
able to provide the same features and benefits as the conventional investment and hedging
products. As such, FEB has laid a solid foundation to cater for the fast growing demand of
Islamic products offering a wide range of Shariah’s compliant products managed by a team of
dedicated personnel to build a stable platform to cater for FEB’s mandated business
requirements.

Company History
First Energy Bank B.S.C. (c) (“FEB” or the “Bank”) is an Islamic investment bank licensed by
the Central Bank of Bahrain and headquartered in Manama, Kingdom of Bahrain.
FEB’s founders believe that the global energy sector and the Middle East and North Africa
(MENA) region offer excellent opportunities for private equity and Islamic financial investment.
First Energy Bank offers investors unique and specialized opportunities that capitalize on the
MENA region’s status as the center for world energy. The Bank focuses on investments in the
production, transportation, storage and refining of hydrocarbons, as well as oilfield services and
energy sector technologies. FEB also explores new opportunities to invest in the development of
power generation capacity and renewable energy technologies. FEB operates in accordance with
Islamic Shariah’s principles as a financial partner in project development, joint ventures, mergers
and acquisitions and the purchase of assets and asset portfolios. FEB was established in June
2008, with an authorized share capital of US$2 billion, and a paid up capital of US$1 billion
consisting of 1 billion ordinary shares each with a par value of US$1. The bank’s shareholders
include a range of organizations and individuals with interests in the energy sector from the
Kingdom of Bahrain, the United Arab Emirates, Libya, the Kingdom of Saudi Arabia, and other
countries in the region. In September 2013, FEB obtained the License of the Central Bank of
UAE to establish a representative office in Abu Dhabi. The objective of this office is to enhance
business development and support the implementation of the Bank’s strategy by developing and
maintaining strategic relationships with financial institutions, investment banks, public and
private investment corporations in UAE and the rest of MENA region and to support the head

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office activities, act as point of contact, source of information, identify and provide new business
opportunities and market research.

Key statistics
Market capitalization
FEB was established in June 2008, with an authorized share capital of US$2 billion, and a paid
up capital of US$1 billion consisting of 1 billion ordinary shares each with a par value of US$1.

2013 2012 2011 2010 2009

Authorized Share Capital 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000

Issued Ordinary Share Capital 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000

Organizational Chart
Organization chart is the indicator of the corporate governance in the organization which is the
combination of process and structures implemented by the Board in order to inform, direct, manage
and monitor the activities of the organization towards the achievement of its objectives. FEB
management and governance structure is illustrated as follows;-

Board of
Directors

Nomination, Board Audit, Risk Board Investment Corporate Chief Executive

Remuneration & & Committee Committee Secretary/MLO
Governance
Officer

Risk Internal Audit Compliance Financial Control Legal

Treasury & Investment

Capital Market Banking

Operations &
Supportive Services

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Board of Directors

H. E. Khadem Abdulla Al Qubaisi H. E. Abdulla Saif Al Nuaimi Abdulmagid Breish

(Chairman) (Vice Chairman) (Vice Chairman)

Abdulla A. Kareem Showaiter Mohamed Ali Al Fahim Sadoun Barghash Al Sadoun

Board Member Board Member Board Member

Mohamed Badawy Al-Husseiny Adel Abdulaziz Al Jabr Ebrahim Hussain Ebrahim

Board Member Board Member Board Member

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Chief Officers:
• MOHAMED SHUKRI GHANEM - Chief Executive Officer
• KALYAN SUNDERAM - Chief Risk Officer
• DAVID HUDSON - Head of Legal & Compliance
• EIHAB ABDUL LATIF AHMAD - Corporate Secretary / MLRO
• ESAM EBRAHIM AL MAHMEED - Head of Treasury and Financial Institutions
• KHALED HEJRES - Head of Operations & Support Services
• OSAMA BAHAR - Head of Shariah’s Compliance & Advisory
• TARUN PURI - Head of Investments & Structured Finance
• YOUSIF AHMED EBRAHIM - Chief Financial Officer
• YOUSSEF EL HABETY - Chief Representative - Abu Dhabi

Products and services

The FEB is engaged in the seven core business activities as mentioned below

1. Project Development
2. Private Equity
3. Mergers & Acquisitions
4. Structured/ Islamic Financing
5. Capital Market
6. Asset Management
7. Treasury

Competitors

Ownership and Major Holders

The bank’s shareholders include a range of organizations and individuals with interests in the
energy sector from the Kingdom of Bahrain, the United Arab Emirates, Libya, the Kingdom of
Saudi Arabia, and other countries in the region. Below is the detailed list of the distribution of
FEB ordinary share capital owned by the companies region wise

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FIRST ENERGY BANK SHARE CAPITAL COMPOSITION

Name Nationality No. of Shares Nominal Capital
Value (USD) %age

Tasameem U.A.E. 218,503,834 218,503,834 21.85%

Libyan Investment Authority (Government of Libya 162,500,000 162,500,000 16.25%

Libya)

Abu Dhabi Water and Electricity U.A.E. 150,000,000 150,000,000 15.00%

Authority(Government of Abu Dhabi)

Emirates Islamic Bank PSJC U.A.E. 100,000,000 100,000,000 10.00%

Mohamed Bin Hussain Ali Al Amoudi Saudi 50,000,000 50,000,000 5.00%

Arabia

Al Jabr Trading Co. Saudi 50,000,000 50,000,000 5.00%

Arabia

Ithmaar Development Co. Ltd Cayman 45,000,000 45,000,000 4.50%

Island

Capital Management House B.S.C. (c) Bahrain 39,401,857 39,401,857 3.94%

Dubai Investment PJSC U.A.E. 35,000,000 35,000,000 3.50%

Omar Ibn Abdullah Ibn Hassan Bahassan Saudi 20,000,000 20,000,000 2.00%
Arabia

Awqaf and Minors Affairs Foundations (Dubai U.A.E. 20,000,000 20,000,000 2.00%
Government)

Al Taif Investment L.L.C. U.A.E. 15,000,000 15,000,000 1.50%

Taqa Investment Company Ltd Cayman 12,621,379 12,621,379 1.26%

Island

General Pension and Social Security Authority U.A.E. 12,500,000 12,500,000 1.25%

RAK Properties PJSC U.A.E. 12,500,000 12,500,000 1.25%

Khaleeji Commercial Bank B.S.C. Bahrain 10,000,000 10,000,000 1.00%

Bahrain Islamic Bank B.S.C. Bahrain 10,000,000 10,000,000 1.00%

Sultan Group Investment L.L.C. U.A.E. 10,000,000 10,000,000 1.00%

Sharhaj Islamic Bank U.A.E. 10,000,000 10,000,000 1.00%

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Abdul Razak Mohammed Qanbar Al Ansari Saudi 6,670,000 6,670,000 0.67%

Holding Company L.L.C. Arabia

Nahar Investment Co. W.L.L. Bahrain 5,302,930 5,302,930 0.53%

Sheikh Mohammed Bin Faisal Bin Thani Al Thani Qatar 5,000,000 5,000,000 0.50%

TOTAL 1,000,000,000 1,000,000,000 100.00%

Below Graph and table shows the % age of ownership of ordinary shares by nationality wise. In
which U.A.E is the major shareholder or top investor in the bank by 58% after Libya with 16%
and then rest

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Investment Overview:
Below table charts shows the investment pattern of FEB in the diversified sector over the period
of last 05 years which indicates FEB is efficiently working on its portfolio management.

Year Project Name Contract With Industry Country / Business

Region Activity

2009 Acquistion of 9 % Al Dur Independed Energy Sector Kingdom Merger &

Shares Water & Power of Acquistions
Project Bharain/
GCC

2009 Development of Technco Energy Sector Saudia Project

Saudi PolySilicon Commercial Arabia/ Development
Project Developers and GCC
Project
Management &
Development
Company Saudia
Arabia

2009 Acquistion of 40 Arab Drilling & Energy Sector Libya / Merger &
% Shares workover GCC Acquistions
Company

2010 Start up of 1st Rig Maritime Industrial Energy Sector Sharjah, Project
of MENA Drill Services U.A.E/ Development
Project GCC

2011 No New Project But woprk on the Completion of the Previous Investments

2012 Acquistion of New Malaysia Airline Aviation & Malaysia/ Ijarah

Airbus Airline Asia Financing

2012 Investment in Alizz Islamic Bank Banking Sector Oman/ Islamic

Shares of Bank GCC Financing

2013 Joint Venture and Boreliaz Ag. Fertlizer Burgaria/ Islamic

Purchased 20.3% Buguria Euorpe Financing
Shares of NG
Neochim AD
fertlizer

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2013 Euro 25 Million Subsidiary of Banking Sector Netherland Islamic

Murabha Facility Sapinda Holdings / Euorpe Financing
with Kore Coal B.V.
Finance B.V

Below is the detail explanation of the above table charts of the portfolio management of the FEB
according to the year.

In year 2009, accomplishment of the year was the acquisition of a 9% stake in the Al Dur
Independent Water and Power Production project in FEB home country of Bahrain. Continuing
the business strategy diversification process, FEB also partnered with Project Management and
Development (PMD) in Saudi Arabia to establish Saudi Poly silicon, a major poly silicon
production facility to be based in Al Jubail, KSA. FEB has also successfully completed the
purchase transaction of 40% of Arab Drilling and Work over Company (ADWOC) one of the
leading oil company in Libya. And finally, 2009 saw the closing of MENA drill, our inaugural
offshore drilling venture, which is set to benchmark drilling operations in the region in the very
near future.

In year 2010, offshore drilling venture, MENA drill, the first of its two offshore drilling rigs
completed and delivered by Maritime Industrial Services (MIS). This first rig has been mobilized
to Mexico under a charter to be operated by the Mexican National Oil Company, Pemex. The
second rig was floated in July of 2010, and is expected to be delivered in the first quarter of
2011. Final stage discussions are currently underway to charter this rig as well, and an
announcement will be made once the details have been finalized. This is a significant milestone
for MENA drill and is a testament to the dedication and commitment of all those involved.
Additionally, in September of 2010, the Al Dur independent water and power project (IWPP),
considered one of the largest utility projects in the region, achieved early commercial operation.
Al Dur is a much lauded project here in Bahrain, as it goes a long way toward meeting the rising
demand for electricity and water capacities in Kingdom

In 2011 second rig is also operational in the Gulf of Mexico and the benefits of these major
investments will be reflected in the financial statements. With regard to new poly silicon project
in Saudi Arabia, project will be finalized this in 2012. It is worth mentioning that other
investments are also progressing well

In year 2012, noteworthy investment made in the first quarter of 2012 was the acquisition of a
new Airbus A330 aircraft which is leased to Malaysian Airlines. During the second half of the
year, the Bank also made a strategic investment as a Founding shareholder in Alizz Islamic Bank
(SAOG) which is one of the only two licensed full Islamic banks in the Sultanate of Oman. As
part of its license requirement, Alizz successfully closed its Initial Public Offering with an
oversubscription and was listed on the Muscat Securities Exchange in November 2012. This

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investment complements FEB’s operations to become a leading Islamic financial institution

regionally and internationally.

In year 2013, the Bank together with Borealis AG formed a joint venture in Bulgaria, called
FEBORAN AD in the 4th Quarter of 2013. The joint-venture company purchased 20.3% of the
shares of Neochim AD which is Bulgaria’s leading producer and distributor of fertilizers; it
operates one ammonia plant, two nitric acid plants and an ammonium nitrate plant in
Dimitrovgrad in southern Bulgaria. This investment in Neochim extends the FEB investment
portfolio into Europe and also into petrochemicals.

In addition to the Bank’s investment in Neochim, the other noteworthy transaction was in
December 2013, when the Bank signed a Euro 25 million Murabaha facility with Kore Coal
Finance B.V., established in the Netherlands and a subsidiary of Sapinda Holding B.V. This
transaction is in line with the Bank’s long term commitment to seize attractive and income
generating opportunities and diversify in asset classes which can generate sustained income
streams.

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Financial Overview

The FEB (Bank) in 2013 has recorded consolidated net profit of US$ 40.1 Million after provision
for impairment of US$9.8 Million as compared to the net profit of US$37 Million in 2012.
Gross income is increased by the 5% to USD 64.3 million in 2013 as compared to USD 61.2
million in 2012. The increase was primarily a result of income on investment in Ijarah assets,
income from securities and share of results of associates. Prior year income included an
exceptional, non-recurring profit of USD 21.7 million arising from the Bank exercising its equity
conversion option on a Murabaha financing facility extended to Mena drill Investment Company
which resulted in conversion of the associate into a 59.44% owned subsidiary. FEB’s core
expenses continued to be tightly controlled and hence; total expenses of USD 14.4 million for the
year were 28% low on the prior year.
Below are the key highlights of the 05 years financial results

Amount in USD(000)
2013 2012 2011 2010 2009
Gross Income 64,279 61,163 25,493 41,391 47,410
Operating Expenses (14,363) (20,062) (20,689) (24,119) (24,476)
Impairment Allowances (9,828) (4,077) (1,260) (27,396) (8,734)
Net (Loss) / Income 40,088 37,024 3,544 (10,124) 14,200

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Total Assets 1,417,239 1,400,464 1,230,697 1,199,844 1,233,919

Total Equity 1,196,325 1,159,579 1,042,702 1,039,086 1,054,677
EPS (basic) in US Cents 4.0 3.7 0.4 -1.0 1.4
Return on Average Assets 2.90% 2.70% 0.30% -0.09% 1.3%
Return on Average Equity 3.40% 3.6% 0.30% -0.10% 1.4%
Net Income Margin 62.0% 61% 14.0% -2.40% 30.0%
Operating Expenses to Gross Income 22.34% 32.80% 81.16% 58.27% 51.63%
Ratio
Total Expenses to Gross Income Ratio 37.63% 39.47% 86.10% 124.46% 70.05%

Income Statement

Balance Sheet

Ratio Analysis

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FEB Financial & Investment Analysis
FEB during the period of last 05 years has invested in the different sectors of the MENA regions where
able to generate the income from different modes of financing. Below financial and investment analysis
helps us to analyze the Bank’s ability to generate the profit by the utilization of available fund.

Assets Mix by Category

During the last 05 years, Bank has able to generate the Income of US$ 238 Million through its
financing modes i.e. financial Institutions, associates, securities and Ijarah Financing and other
ways modern methods of financing.

FEB has generated the income of US$ 64 million in 2013 which is 5% higher than the income of
US$ 61 Million in 2012. In 2013, major portion of the revenue generate through the Ijarah
Financing which is 48% of the total income in the year 2013. With introduction of Ijarah
financing in 2012, company is able to generate more revenue than the last 03 years.
Financial & Investment Analysis Report on First Energy Bank B.S.C. (c)

Net Portfolio by Industry Sector

In 2013, Bank has maintained a portfolio of US $1.41Billion which is providing support to the
major sector of the economy in the Mena Region. Maximum and major part belongs to the
Energy, Power and Infrastructure development which is 44% of the total portfolio which
includes deals with Mena Drill Investment Company involved in the oil & exploration,
ARABTEC also engages in the manufacture and transportation of ready mix concrete products,
trade and lease of construction equipment, fabrication of steel structures, and manufacture of
switch gears, power distribution panels and precast panels. In addition, it is involved in building
maintenance and cleaning services as well as undertaking electrical, mechanical and plumbing
contracts. AL-DUR POWER AND WATER COMPANY B.S.C. (C), FEB successfully
completed the approximately 9% stake acquisition in the Al-Dur Independent Water and Power
Project (IWPP). Similarly FEB-NOVUS AIRCRAFT HOLDING LTD – MALAYSIA
AIRLINES, FEB successfully closed a Purchase and Lease Transaction of A330-300 Aircraft to
Malaysia Airlines, the flag carrier of Malaysia and one of the world’s leading airlines. his
transaction introduces diversification to the bank’s asset classes and is generating stable and
sustained income. Similarly, Bank holds the shares of different banks AL IZZ ISLAMIC BANK,
OMAN, KORE COAL FINANCE B.V. and invested in the other sectors.

Below Pie Chart clears the picture of distribution of portfolio in different industry sectors.

Return on Assets
Below chart indicates that Bank rate of return on utilization of assets is 2.90% in 2013 which is
almost 07% increase from the last year 2012. But if we compare it with 2011, 2010 and 2009,
this increase is more than 200% and this all due to the bank has invested in the diversified sector
through Ijarah financing i.e. Lease and term purchase of airplanes for Malaysian Airlines and

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agreement with Mena Drill Company for the oil and gas exploration. This indicates that bank is
working on the utilization of its assets by signing profitable deals in the diversified sector.

Return on Equity (ROE)

While showing reasonable progress in the ROA, bank is unable to sustain the ROE level at 3.6%
and falls at 3.40% in 2013 which is almost 7% decline as compared with year 2012. While
company is maintaining the Risk Management strategy which provides the strong foundation for
the bank to minimize the risk factor and funds from investors are seems to be safe.

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Risk Management Analysis

The Bank perceives good risk management capabilities to be the foundation for delivering
superior results on a risk-adjusted basis to customers, investors and shareholders. The Bank will
continue to endeavor to adopt international best practices of risk management, superior corporate
governance and the highest level of market discipline.
The Bank’s Board of Directors through its Audit and Risk Committee (a subcommittee of the
Board of Directors) has the responsibility for ensuring the establishment and effective
implementation of an integrated risk management framework for the Bank. Further, the Risk
Management Department (RMD) is empowered to independently identify and assess risks that
may arise from the Bank’s investing, financing and operating activities; as well as recommend
directly to the Management Risk Committee (MRC) any prevention and mitigation measures as
it deems fit. In addition, the Internal Audit function, which is independent of both operations and
the Bank’s investments units, reviews the risk management process.

The details on exposure of the Bank to these risks and the management framework for them are
discussed in the following sections
a. Capital and Group Structure

The authorized share capital of the Bank is 2 billion shares of US$ 1 each. The paid up
capital of the Bank is US$ 1 billion divided into 1 billion shares of US$ 1 each.

The Bank’s investments in commercial entities, below the level of qualifying holding, are
risk weighted in accordance with applicable capital computation guidelines of the Central
Bank of Bahrain. Mena Drill Investment Company which is a qualifying holding is
consolidated for regulatory capital adequacy purposes.

b. Regulatory capital structure

The Bank’s total risk weighted exposures as at 31 December 2013 amounted to US$
909,378 thousand. Credit risk accounted for 80.80%, operational risk 10.70%, and market
risk 8.50% of the total risk weighted assets. Tier 1 and total regulatory capital were US$
747,550 thousand. As at 31st December 2013, Bank’s Tier 1 and total capital adequacy
ratios were same at 82.20%. There are no restrictions on the transfer of funds or
regulatory capital within the Group

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The following table summarizes the eligible capital after deduction for capital adequacy
ratio (CAR) as of December 31st, 2013.

Tier -1 Tier-2
USD(000) USD(000)

Share Capital 1,000,000 -0-

Statuary Reserve 7,991 -0-

Retained Earning 9,273 -0-

Tier 1 Capital before PCD deductions 1,017, 264 -0-

Unrealized gains arising from fair valuing equities (45%) -0- 5,159

Collective impairment loss provision -0- 2,696

Tier 2 Capital before PCD deductions -0- 7,855

Total Available Capital -0- 1,025,119

Less regulatory deduction : (138,785) (138,785)

Excess amount over maximum permitted large exposure
limit
Additional deduction from Tier 1 to absorb deficiency in 130,930 -0-
Tier 2

Total Deductions 269,715 138,785

Net Available Capital (Tier 2 up to 100% of Tier 1) 747,549 -0-

Total eligible capital base -0- 747,549

The Bank has not included non-controlling interest in Tier 1 capital as all subsidiaries are
commercial entities except MENA Drill Investment Company which in line with the CBB
instructions is consolidated and its non-controlling interest is not included in Tier 1 capital.

c. Regulatory capital requirement

The following table Diagram summarizes the regulatory capital requirements for credit,
market and operational risks as of December, 2013

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Composition of Risk Weighted Capital

Regulatory Capital Exposure Requirement
Requirement (USD 000) @12% (USD
000)
Credit Risk 734,824 88,179
Market Risk 77,280 9,274
Operational 97,274 11,673
Total 909,378 109,125

First Energy bank has maintained the minimum level of regulatory capital at 12% of the risk
weighted capital which is a good sign of minimizing the risk factor and keep the bank on its
track.

Conclusion
The Bank has minimal exposure to all the risks arising in the investment and generation of funds
and maintains all the standards defined by the central bank of Bahrain. This Policy of bank has
made him the leading investment bank in the MENA & Asia Region which allows individual
investors to invest in the bank.

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APPENDIX I
Below is the Consolidated Statement of Financial Position of last 05 years to support the above
the financial analysis,
CONSOLIDATED STATEMENT OF FINANICAL POSITION
Amount in USD(000)
2013 2012 2011 2010 2009
ASSETS
CASH & BANK BALANCES
55,986 15,654 3,019 3,910 12,358
DUE FROM FINANCIAL INSTITUTION
129,394 158,403 425,848 555,658 685,880
FINANCING RECEIVABLES
317,008 267,182 138,544
INVESTMENT IN IJARAH ASSETS
516,484 529,363 - -
INVESTMENT IN SECURITIES
489,825 497,387 328,826 210,477 236,973
INVESTMENT IN ASSOCIATES
130,340 101,049 92,116 97,342 96,787
OTHER ASSETS
84,981 89,263 52,791 50,396 42,333
PROPERTY & EQUIPMENTS
10,283 9,345 11,089 14,911 21,044
TOTAL ASSETS
1,417,293 1,400,464 1,230,697 1,199,876 1,233,919

LIABILITIES AND EQUITIES

LIABILITIES
DUE TO FINANICAL INSTITUTION
48,189 59,612 89,527 148,812 171,464
MURABAHA PAYABLE -
48,756 54,081 - -
TERM FINANCING -
63,882 68,200 - -
OTHER LIABILITIES
60,141 58,992 98,468 11,946 7,778
TOTAL LIABILITIES
220,968 240,885 187,995 160,758 179,242

EQUITY
EQUITY ATTRIBUTEABLE TO SHAREHOLDERS
SHARE CAPITAL
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
STATUARY RESERVE
7,991 4,784 1,800 1,437 1,437
INVESTMENTS FAIR VALUE RESERVE
-
INVESTMENT FAIR VALUE RESERVE

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11,464 - - 148
FOREIGN EXCHANGE TRANSLATION RESERVE
(1,834) (2,170) (2,170) (2,170) 2,478
RETIANED EARNINGS
36,074 32,104 5,481 2,252 12,940

TOTAL EQUITY ATTRIBUTEABLE TO SHAREHOLDERS

1,053,695 1,034,718 1,005,111 1,001,519 1,017,003

NON CONTROLLING INTERSETS

142,630 124,861 37,591 37,599 37,674

TOTAL EQUITY
1,196,325 1,159,579 1,042,702 1,039,118 1,054,677

TOTAL LIABILITIES AND EQUITY

1,417,293 1,400,464 1,230,697 1,199,876 1,233,919

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APPENDIX II
Below is the Consolidated Statement of Income of last 05 years to support the above the
financial analysis,

CONSOLIDATED STATEMENT OF INCOME

Amount in USD(000)
2013 2012 2011 2010 2009
Income
Profit from Islamic Finance 472 5,090 16,707 18,745 14,402
Profit on Islamic Finance (530) (644) (772) (766) (295)
Net Income /(Loss) from Islamic Financing (58) 4,446 15,935 17,979 14,107

Rental Income On Ivestment in ijarah Assets 68,605 33,084 - - -

Financing Cost Related to the term financing obtained to (2,439) (2,506) - - -
the Ijarah assets
Profit on Islamic financing against investment in Ijarah (1,697) (1,053) - - -
Assets
Depreciation on Investment in Ijarah Assets (13,742) (7,459) - - -
Other Operating Expense Related to Ijarah Assets (19,237) (8,553) - - -
Net Income /(Loss) on Investment in Ijarah Assets 31,490 13,513 - - -

Income from Investment Securities 24,269 17,259 7,249 7,512 4,551

Share of Profit of Associates 4,947 (7,067) 831 15,134 10,139
Income from Financing 2,906 - - - 453
Income from Investment Advisory Service - - - - -
Income from Placement with Financial Institutions - 10,657 - - 17,865
Gain Arising on Conversion of Associate to Subsidary - 21,759 - - -
Other Income 725 596 1,478 - -
Total Income 64,279 61,163 25,493 40,625 47,115

Staff Cost 9,677 10,656 10,637 12,459 13,158

Finance Expense - -
Geneal & Administrative Expenses 4,362 7,327 7,207 8,150 10,255
Depreciation And Amortization 324 2,079 2,845 2,744 768
Other Operating Expenses - - - - -

Total Expenses 14,363 20,062 20,689 23,353 24,181

Profit/ (Loss) for the Year 49,916 41,101 4,804 17,272 22,934

Provsion for Impairment Allowance (9,828) (4,077) (1,260) (27,396) (8,734)

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Other Comprehensive Income

Net Changes in the Fair Value of available of sale of - - - - 148
investments
Exchange Differences arising on Translation of Investment - - - - 2,478
of associates

Total Comprehensive Income for the Year 40,088 37,024 3,544 (10,124) 16,826

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