Annual Report 2006 - Faisal Finance Switzerland SA

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Proposed Appropriation of Retained Earnings as at December 31, 29 Annual Report 2006 (in ‘000 CHF) Notes 2006 2005 Retained Earnings Available for Appropriation 32’758 31’014 Retained Earnings Carried Forward 32’758 31’014 Annual Report 2006
Notes to the Financial Statements as at December December 31, 2006 and 2005 30 1. Summary of Business Operations 1.1 Introduction Faisal Private Bank (Switzerland) SA (“the Bank”), formerly Faisal Finance (Switzerland) SA until October 3, 2006, was established in Geneva on February 20, 1980 under the name of Sharia Services SA and was restructured in March 1990 into a bank-like finance company offering financial services and financial products in accordance with the principles of the Islamic Sharia (laws derived from Holy Quran that Muslims observe in their social and economic life). In April 2002, the former Faisal Finance (Switzerland) SA obtained a Securities’ Dealer License under the terms of the Federal Law on Stock Exchanges and Trading in Securities. In October 2006, after having received a Swiss banking licence, the company was registered as a bank in the Commercial Register. The Bank is supervised by the Swiss Federal Banking Commission (SFBC). The Bank does not outsource any significant business activities in the sense of Federal Banking Commission Circular CFB 99/2 “Outsourcing”. At the end of 2006, the Bank employed 38 staff on a full time basis (2005: 33). 1.2 Business Activities The Bank offers a wide range of Islamic financial services, which are conducted in accordance with the principles of the Islamic Sharia according to which the investments in various industries as well as dealing in interest are prohibited. In principle, the Bank provides portfolio management services to private investors. The following is a summary of the main business activities of the Bank: Annual Report 2006 1.2.1 Asset Management Operations (in ‘000 CHF) These operations are essentially related to the portfolio management (including real estate, equity and leasing assets), fiduciary placements and security and foreign exchange trading. 1.2.2 Financing Activities Financings are extended as credits (Morabaha) and are generally collateralised by a variety of assets or by bank guarantees. 1.3 Risk Management The Bank’s Board of Directors promotes a high standard of ethical behaviour at all levels of the Bank. The Compliance and Risk-Management function ensures the Bank’s compliance with all applicable laws, regulations, codes of conduct and standards of good practice. The Board of Directors also determines, and periodically re-examines, a set of credit limits for the financing/investment activities of the Bank. Adherence to these limits is monitored on a continuous basis. The responsibility for risk management is segregated from trading operations, portfolio management and the back office function and is divided under the following three categories: a) Credit Risk The Bank restricts its exposure to credit risk by performing detailed analysis of the borrower’s business and credit worthiness, and by ensuring that, the Bank’s portfolio of credits is diversified. Credit is granted within discretionary limits. The credit department of the Bank analyses all credit proposals, monitors performance of credits and collaterals, and provides for assets which are doubtful of recovery, if necessary. Annual Report 2006
Page 1 and 2: Bridging Swiss private banking trad
Page 3 and 4: Bank’s Profile 2-3 Board of Direc
Page 5 and 6: Bank’s Profile (cont’d) Ithmaar
Page 7 and 8: Chairman’s Statement It is my ple
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Page 11 and 12: Message from the Chief Executive (c
Page 13 and 14: Directors’ Report Annual Report 2
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Page 17 and 18: Directors’ Report The transformat
Page 19 and 20: Directors’ Report To Expand our I
Page 21 and 22: Directors’ Report � The investm
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Page 25 and 26: Directors’ Report Activities The
Page 27 and 28: Portfolio, Commercial and Financial
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Page 31 and 32: Financial Statements Annual Report
Page 33: Income Statement for the Year Ended
Page 37 and 38: Notes to the Financial Statements a

Annual Report 2006 - Faisal Finance Switzerland SA

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