Annual Report 2011 - Jordan Investment and Finance bank

Capital Expenditures3,423,8459,563,650--3,423,8459,563,650Total Assets691,771,974677,216,707--691,771,974677,216,707Total Revenue53,896,78052,200,788--53,896,78052,200,788JD JD JD JD JDJD2011 20102011 20102011 2010104Inside JordanOutside JordanTotalgeographical distribution of the bank's revenues, assets and capital expenses according to geographical distribution:This sector represents the geographical distribution of the Bank's operations. The Bank performs its operations mainly in the Kingdom, and these operations represent the local operations.The following is theb. Information on the geographical allocation:Depreciation and amortization---9,0569,45325,6361,526,665 1,570,810 1,138,335Capital Expenditures---2,71498,59075,2973,247,244 3,423,845 9,563,650Total Liabilities261,276,103 208,350,465 18,270,292 983,267 2,340,494 1,870,487 66,783,400 559,874,508 569,621,520Liabilities not distributed over sectors-----66,783,400 66,783,400 18,271,150Sector's Liabilities261,276,103 208,350,465 18,270,292 983,267 2,340,494 1,870,487 -493,091,108 551,350,370Total Assets53,662,901 275,405,608 285,458,436 11,681,132 5,420,688 4,930,084 55,213,125 691,771,974 677,216,707Assets not distributed over sectors------55,213,125 55,213,125 41,201,741Sector's Assets53,662,901 275,405,608 285,458,436 11,681,132 5,420,688 4,930,084 -636,558,849 636,014,966Income for the Year3,015,648 6,822,919 12,475,704 772,857 (67,027) 250,345(13,674,893) 9,595,553 10,887,111Less: Income tax---(9,797) -20,4694,043,742 4,054,414 4,982,124Income before Taxes3,015,648 6,822,919 12,475,704 763,060 (67,027) 270,814(9,631,151) 13,649,967 15,869,235Less: Undistributed Expenditures---346,309 318,859 531,63611,865,313 13,062,117 12,159,161Results of Business Sector3,015,648 6,822,919 12,475,704 1,109,369 251,832 802,4502,234,162 26,712,084 28,028,396Sundry provisions------1,388,000 1,388,000 (152,554)Provision for credit facilities(1,486,055) (8,956,898) -(726,964) -1,710-(11,168,207) (6,708,420)Gross income4,501,703 15,779,817 12,475,704 1,836,333 251,832 800,740846,16236,492,291 34,889,370JD JDJD JD JD JDJDJD2011 2010FinancialIndividuals Corporations Treasury BrokerageFinancialLeasingBondedManagement OthersFor the Year Ended December 31,TotalThe following table represents information on the Bank's sectors according to activities:46. Capital Managementa.Description of CapitalAccording to the Central Bank of Jordan Law and in compliance with thecapital adequacy requirements, capital consists of many parts:•Primary capital made up of paid-up capital, declared reserves, (includingstatutory reserve, voluntary reserve, share premium (discount), treasuryshare premium, and other reserves), retained earnings, and non-controllinginterest (if any) minus intangible assets, loss for the period, acquisition costsof treasury stock, provisions required by the Central Bank of Jordan, fullamount of goodwill, and any restricted amounts.•Supplementary capital provided that the general banking risk reserve doesnot exceed 1.25% of total credit risk weighted assets, subordinated debts, andthe positive cumulative change in fair value at 45%, less the negative changebalance provided that this part of capital does not exceed 100% of regulatorycapital•The third part consists of short-term subordinated loans to meet marketrisks. This part supplements capital and is utilized to face the potential lossesfrom market risks.Additionally, the Bank complies with Article (62) of the Banks Law whichrequires the Bank to appropriate 10% of its net profits in the Kingdom andcontinue to do so until the reserve equals the Bank’s paid-up capital.b.Regulatory Authorities Requirements Concerning Capital and Method ofFulfilling ThemThe Bank considers the compatibility of the size of capital with the nature ofrisks it is exposed to provided that paid-up capital is not less than the minimumrequired by the Central Bank of Jordan and regulatory capital not less than12% of the weighted value of credit and operating market risks. Furthermore,the minimum leverage ratio (equity to total assets) should not be less than 6%.Moreover, not less than 28.5% of market risks should be covered by regulatorycapital.c. How to Achieve the Objectives of Capital ManagementThe Bank’s management aims at achieving the Bank’s capital managementobjectives, a surplus in operating income and revenues, and the optimalutilization of the available sources of funds so as to reach the targetedgrowth in shareholders’ equity through the increase in the statutory reserve,recognized profits, voluntary reserve, and retained earnings.Capital is allocated to work lines and various functions according to assetsweighted by risks. Moreover, capital and its adequacy are monitoredperiodically, and capital adequacy is calculated by the Risk Management andCompliance Department and reviewed by the internal auditor.105