- Part 3: For the preceding part double clickID:nRSL6345Ob 5 118 5 498 -380 -6,91% Revenues on Equity participations 435 365 70 19,18% TOTAL 9 557 10 235 -678 -6,62% This decrease was due primarily from affiliated companies dividends for TND 380 thousand and interest and income frominvestment securities for TND 368 thousand. VII- 2. Banking operating expenses This heading amounted to TND 7 621 thousand grew between December 2010 and December 2011 from TND 123 355 thousand to TND130 976, thus an increase of 6,18% or TND 7 621 thousand These banking operating expenses mainly consist of the following: Interests and similar charges; Commissions paid; VII-2-1. Interest and similar charges: Interests and similar charges amounted to TND 127 821 thousand as at December 31st, 2011 as compared to TND 119 201 as atDecember 31st, 2010, recording an increase of TND 8 620 thousand or 7,23%. This evolution is detailed as follows: ITEMS 31/12/2011 31/12/2010 Change In % Interests on ordinary accounts (banks) 544 591 -47 -7,95% Interests on interbank borrowing accounts 469 11 458 4163,64% Interests on customer deposits 102 968 109 318 -6 350 -5,81% Interests on bonds and subordinated loans 3 592 4 833 -1 241 -25,68% Interests on special resources 3 320 3 268 52 1,59% Other interests and charges 16 928 1 180 15 748 1334,58% TOTAL 127 821 119 201 8 620 7,23% VII-2-2. Commissions Paid Commissions paid decreased from TND 4 154 thousand as at December 31st, 2010, to TND 3 155 thousand as at December 31st,2011, a drop of 24,05% or TND 999 thousand. This change is detailed as follows: ITEMS 31/12/2011 31/12/2010 Change In % Commissions on cash and interbank transactions 312 291 21 7,22% Commissions on customer transactions 571 985 -414 -42,03% Commissions on financial services 2 184 2 802 -618 -22,06% Commissions on other transactions 88 76 12 15,79% TOTAL 3 155 4 154 -999 -24,05% VII- 3. Provision charge and value adjustments for loan losses, off-balance sheet items and liabilities This heading amounted to TND 61 674 thousand as at December 31st, 2011, detailed as follows: - Provision charge for doubtful loans 99 046 Whose collective provisions 24 700 - Loan write-off 2 914 - Provision recovery -39 654 - Recoveries on bad debts write-off -632 The evolution between December 31st, 2010 and December 31st, 2011 is detailed as follows: ITEMS 31/12/2011 31/12/2010 Change In % Provision charge for doubtful loans 70 397 56 395 14 002 24,83% Provision charge for contingencies and expenses 28 649 34 367 -5 718 -16,64% Total provision 99 046 90 762 8 284 9,13% Bad debt write-off 2 914 16 247 -13 333 -82,06% Total provisions and write-off 101 960 107 009 -5 049 -4,72% Recovery on provisions for doubtful loans -36 244 -37 605 -1 361 3,62% Recovery on provisions for contingencies and expenses -3 410 -3 917 -507 12,94% Total recoveries -39 654 -41 522 1 868 -4,50% Recoveries on bad debts write-off -632 -130 -502 386,15% Total recoveries on provisions and bad debt write-off -40 286 -41 652 -1 366 3,28% Net loss 61 674 65 357 -3 683 -5,64% VII- 4. Provision charge and value adjustments on investment portfolio This heading showed a net loss of TND 3 296 thousand as at December 31st, 2011 detailed: - Provision 4 463 - Expenses and loss 497 - Capital gain on disposal 4 321 - Provision recovery (4 669) - Gains on sale (1 316) The evolution between December 31st, 2010 and December 31st, 2011 is detailed as follows: Items 31/12/2011 31/12/2010 Change In % Provision charge on equity securities and managed funds 2 455 2 092 363 17,35% Provision charge on shares of affiliated companies 2 008 309 1 699 549,84% Total allocations 4 463 2 401 2 062 85,88% Less gain on sale of investment securities 4 321 114 4 207 3690,35% Charges and losses on securities 497 383 114 29,77% Total expenses and losses 4 818 497 4 321 869,42% Total depreciation and losses 9 281 2 898 6 383 220,26% Reversal of provisions for equity 4 669 1 059 3 610 340,89% Gain from the sale of equity securities 1 316 8 031 -6 715 -83,61% Total gains 5 985 9 090 -3 105 -34,16% Net loss 3 296 -6 192 9 488 -153,23% VII- 5. Other operating income The volume of this heading which includes rental revenues and interests on loans to personnel went up between December 2010and December 2011 from TND 3 319 thousand to TND 3 760 thousand as at December 31, 2010, thus an increase of 13,29% or TND441 thousand. VII- 6. Personnel expenses Personnel expenses reported 18,44% increase or TND 22 173 thousand between December 2010 and December 2011 due to the risein salaries, social security costs and other staff expenses. VII- 7. General operating expenses This heading showed an increase of TND 5 144 thousand between December 2010 and December 2011 due to the increase innon-banking operating expenses TND 1 847 thousand and the rise in other general operating expenses TND 3 297 thousand. VII- 8. Depreciation allowance This heading totaled TND 14 963 thousand as at December 31st, 2011, broken down as follows: ITEMS 31/12/2011 31/12/2010 Change In % Depreciation allowance of intangible fixed assets 1111 788 323 40,99% Depreciation allowance of tangible fixed assets 10 574 11 537 -963 -8,35% Amortization charge of differed expenses 3 254 3 390 -136 -4,01% Depreciation adjustment -1 -480 479 -99,79% Provision charge on real estate 25 174 -149 -85,63% Total annual allowance 14 963 15 409 -446 -2,89% VII- 9. Net profit / loss on other ordinary items This heading amounts TND 586 thousand. The balance of this heading was mainly attributable to capital gains on disposal offixed assets to the extent of TND 397 thousand, offset by capital losses on disposal of fixed assets to the extent of TND 9thousand and other losses to the extent of TND 211 thousand. VII- 10. Corporate income tax Corporate income tax amounts TND 31 593 thousand as at December 31st, 2011 as compared to TND 26 809 thousand as atDecember 31st, 2010, recording an increase of TND 4 784 thousand. NOTE VIII: COLLECTION PORTFOLIO The value of checks, bills and other similar values held by the bank on behalf of third parties, awaiting collectionamounted to TND 251 825 thousand as at December 31 st, 2011. Pursuant to the provisions of banking accounting standards,these values were not reported on the balance sheet. NOTE IX: CASH FLOW STATEMENT (The figures are expressed in TND thousand). IX- 1. Impact of the change in exchange rate on cash and cash equivalents The development of exchange rates of foreign currencies quoted by t
he Central Bank of Tunisia that were used to translateinto Tunisian dinar our foreign currency deposits and assets as reported in the financial statements as at December 31st,2011 generated a positive impact on cash and cash equivalents for an amount of TND 13 291 thousand. This change is mainly due from the following headings: Customer deposits 18 433 Banks' deposits (59) Customer Loans and advances (6 231) Amounts paid to other payables 111 Other cash flows 1 037 13 291 IX- 2. Cash and cash equivalents This heading consists mainly of dinar and foreign currency cash in hand, balance with Tunisian Central Bank and post officeaccounts, net demand assets with banks, interbank loans and borrowings for less than a three month period and tradingsecurities portfolio. These cash and cash equivalents went down from TND 1 685 144 thousand as at December 31st, 2010 to TND 1 085 664 thousandas at December 31st, 2011, thus a decrease of 35,57% or TND 599 480 thousand. ITEMS 31/12/2011 31/12/2010 Change In % CASH POSITION (TND) 87 504 370 625 -283 121 -76,39% CASH ON HAND 39 776 42 499 -2 723 -6,41% CORRESPONDANT BANKS (DEBTOR) 32 855 209 098 -176 243 -84,29% CORRESPONDANT BANKS (CREDITOR) -27 862 -26 281 -1 581 6,02% PLACEMENT 41 000 144 000 -103 000 -71,53% CASH EQUIVALENT (DEBTOR) 1 967 1 490 477 32,01% CASH EQUIVALENT (CREDITOR) -232 -181 -51 28,18% CASH POSITION (FOREIGN CURRENCY) 858 130 1 020 923 -162 793 -15,95% CASH ON HAND 9 390 10 412 -1 022 -9,82% CORRESPONDANT BANKS (DEBTOR) 30 018 13 808 16 210 117,40% CORRESPONDANT BANKS (CREDITOR) -12 414 -1 863 -10 551 566,34% PLACEMENT 831 136 998 566 -167 430 -16,77% TRADING SECURITIES 633 268 559 663 73 605 13,15% BORROWINGS IN FOREIGN CURRENCY -14 926 -15 891 965 -6,07% BORROWINGS IN DINARS -360 000 0 -360 000 - PLACEMENT WITH A MATURITY EXCEEDING 3 MONTHS -118 312 -250 176 131 864 -52,71% CASH AND CASH EQUIVALENT 1 085 664 1 685 144 -599 480 -35,57% NOTE X: RELATED PARTY TRANSACTIONS 1. In 2003, BIAT reached three exclusive depository agreements of securities and funds of SICAV PROSPERITY, SICAV TRESORand SICAV OPPORTUNITY. Under the provisions of these agreements, services delivered by BIAT shall be remunerated at theconditions summarized in the following table: In April 2010, the SICAV Treasury was approached by BIAT to amend deposit agreement reached in 2003. Beginning of the agreement Duration BIAT Remuneration SICAV TRESOR March 8th, 2003 5 years renewable 0,2% all tax included of net assets April 1st, 2010 0,35% all tax included of net assets starting 1st April, 2010 SICAV OPPORTUNITY March 8th, 2003 5 years renewable 0,3% all tax included of net assets SICAV PROSPERITY March 8th, 2003 5 years renewable 0,2% all tax included of net assets 2. In 2003, BIAT reached a tripartite agreement regarding the marketing of SICAV PROSPERITY, SICAV TRESOR and SICAVOPPORTUNITY securities with these three companies and a management company "BIAT ASSETS MANAGEMENT". Under this agreement,BIAT ASSETS MANAGEMENT shall be in charge of the marketing of the securities of these three companies with the clients. No commissions shall be due by the SICAV to BIAT in remuneration of the securities commercialization. 3. BIAT reached in 2006 with BIAT ASSETS MANAGEMENT an agreement of exclusive depository of securities and funds belongingto the Joint Investment Fund or "Fonds Commun de Placement en Valeurs Mobilires" "FCP-EPARGNE ACTIONS". The conditionsare summarized in the following table: Beginning of the agreement Duration BIAT Remuneration FCP BIAT EPARGNE ACTIONS November 24th, 2006 5 years renewable 0,1% all tax included of net assets 4. In 2009, BIAT reached an agreement of exclusive depository of securities and funds of "SICAV PATRIMOINE OBLIGATAIRE".Under the provisions of these agreements, services delivered by BIAT shall be summarized as follows: Beginning of the agreement Duration BIAT Remuneration SICAV PATRIMOINE OBLIGATAIRE October 13th, 2009 1 year renewable 0,1% all tax included of net assets Minimum : TND 5 000 Maximum: TND20 000 5. BIAT reached in 2009 a commercialization agreement of SICAV PATRIMOINE OBLIGATAIRE securities. No commissions shall bedue by the SICAV to BIAT in remuneration of the securities commercialization. 6. BIAT reached in 2004 a management agreement with SICAR AVENIR, under which BIAT shall provide to SICAR AVENIRassistance and advice. In remuneration for this service, BIAT shall receive an annual lump payment of TND 50 000 all taxincluded. 7. BIAT reached management agreements of venture capital funds with SICAR AVENIR. The volume of managed funds, totallypaid up by BIAT is summarized as follows: Year Amount of totally paid up managed funds (TND thousand) Return on participations accruing to BIAT Return on remaining available amounts accruing to BIAT SICAR AVENIR remuneration: Management fees to be paid by BIAT 2006 5 000 000 MMR +0,5% MMR -1% 1% per annum - tax excluded - on the initial amount of the fund. Beyond 5 years, 1% per annum of the fund's remaining balance. 2007 9 000 000 MMR +0,5% MMR -1% Idem 2008 14 250 000 MMR +0,5% MMR -1% Idem 2009 3 000 000 Best possible return MMR -1% Idem In addition, BIAT and SICAR AVENIR, recently designated "BIAT CAPITAL RISQUE" many agreements of venture capital funds. Thefollowing table summarizes the main terms and conditions of the management agreement: Year Amount Return on participations accruing to BIAT SICAR AVENIR remuneration: Management fees to be paid by BIAT 2010* 10 000 000 Best possible return on participations financed by the fund until its total repayment to BIAT - 0,5% per annum - tax excluded - on the amounts placed during the lock up period. - 1,75% p
er annum - tax excluded - on invested amounts between the fund's payment date and the end of the 7th year following that of payment. Beyond the lock up period, fees will be paid in arrears on the balance. - 1% per annum - tax excluded - on invested amounts between the 7th year and 10th year following payment of the fund. In addition, SICAR AVENIR is entitled to a performance fee if it reaches a return exceeding the average money market rate. April 2011 10 000 000 Idem Idem December 2011 12 000 000 Idem Idem *revised by an amendment in May 2011 8. BIAT reached in 2004 an agreement for the collection of stock exchange orders with BIAT CAPITAL "former FINANCIERE DEPLACEMENT ET DE GESTION "FPG". This agreement provides that brokerage commissions on any transaction executed by BIATCAPITAL on behalf of BIAT or its clients shall be broken down as follows: Type of fee BIAT remuneration BIAT CAPITAL remuneration Brokerage fees on transactions executes on the stock exchange central market 50% accruing to BIAT 50% accruing to BIAT CAPITAL Brokerage fees on transactions executes on the stock exchange over the counter market 100% accruing to BIAT CAPITAL Any commission levied on BIAT CAPITAL own clients 100% accruing to BIAT CAPITAL Any commission levied on BIAT own clients 100% accruing to BIAT 9. In 2007, BIAT reached an "employee loan" agreement with BIAT CAPITAL enabling full time employees of FPG to haveeasier access to certain loan offers under special conditions. 10. In 2006, BIAT reached an agreement with TUNISIE TITRISATION providing for the formation of a Securitization SpecialPurpose Vehicle "FCC BIAT-CREDIMMO 1", a joint property with the exclusive purpose of acquiring real estate loans grantedby the assignor (BIAT) to individuals in view of issuing securities representing the loans. The issue initial total price amounted to TND 50 thousand, and loans sold by BIAT to the said SPV represented by TUNISIETITRISATION reached an outstanding balance of TND 50 019 thousand. In addition, total subscriptions by BIAT to this SPV amounted as at December 31st, 2011 to TND 2 163 448 thousand brokendown as follows: Year Category P1 securities (Senior Units) - TND Subordinated Units - TND Residual Units - TND Total - TND 2011 144 737 500 000 1 518 711 2 163 448 11. In 2007, BIAT reached an agreement with TUNISIE TITRISATION providing for the formation of a Securitization SpecialPurpose Vehicle "FCC BIAT-CREDIMMO 2", a joint property with the exclusive purpose of acquiring real estate loans grantedby the assignor (BIAT) to individuals in view of issuing securities representing the loans. The issue initial total price amounted to TND 50 000 thousand, and loans sold by BIAT to the said SPV represented byTUNISIE TITRISATION reached an outstanding balance of TND 50 003 thousand. In addition, total subscriptions by BIAT to this SPV amounted as at December 31st, 2011 to TND 6 599 582 broken down asfollows: Year Category P1 securities (Senior Units) - TND Category P2 securities - TND Category P3 securities - TND Subordinated Units - TND Residual Units - TND Total - TND 2011 1 146 292 2 100 000 850 000 1 000 000 1 503 290 6 599 582 12. BIAT entered into assistance and consultancy agreement with LA PROTECTRICE, a company specialized in research,consultancy and brokerage in insurance and reinsurance business. The charge incurred by BIAT in connection with thisagreement amounts by year to TND 20 000, free of taxes. 13. BIAT has entered since 2004 into the following insurance agreements with the company ASSURANCES BIAT - through LAPROTECTRICE Company. The Bank incurred for 2011 the following expenses: Nature Insurance expense (TND) Civil liability insurance 37 655 Life insurance "family protection" 116 002 Personal accident insurance 90 153 Insurance "Assistance abroad for Visa Premier Cards" 870 815 "Bank global theft" insurance 234 322 Insurance against theft and loss of payment cards 228 113 "fire and related risks" insurance 178 631 Comprehensive insurance on computers 33 022 Car fleet insurance 54 213 Insurance "BIAT TRAVEL assistance" 11 764 Insurance for the coverage of the death of credit card holders 785 14. In 2005, BIAT entered into an agreement with Compagnie Internationale Arabe de Recouvrement "CIAR" for the assistancein debt collection. Under this agreement, CIAR shall provide BIAT with assistance in out-of-court collection of debtwithin the limits and in respect of the regulation in force. In remuneration of the delivered service, CIAR shall receive a10% commission - tax free - on the collected amount. 15. In 2009, BIAT reached an agreement with "Organisation et Services Informatiques" OSI that provides for thereimbursement by BIAT to OSI of the rents and related charges paid by the latter to account for the premises used by BIAT'sunits. The agreement covered one-year period. In this regard, the total charge for 2011 financial year amounted to TND 30 236,free of taxes 16. BIAT reached in 2009 with "CIAR" a rental agreement of the villa located 7, Alain Savary street, Tunis, summarized asfollows: Number Starting period Duration Annual rent tax-free (TND ) Increase rate Agreement 1 January 1st, 2010 2 years renewable 47 000 5% 17. In 2009, BIAT reached a rental agreement with "Socit de Ple de Comptitivit Monastir Elfejja" under which it shallprovide the said company with a part of a building it owns located on the main avenue of Berges du Lac 1. Number Starting period Duration Annual rent tax-free (TND ) Increase rate Agreement 1 October 1st, 2009 2 years renewable 63 000 * 5% * The annual rent was revised in 2011 (amendment) due to reduction of the area leased. 18. In 2009, BIAT reached a rental agreement with "Socit Tanit International" under which it shall provide the saidcompany with the necessary premise for the conduct of its business, which is part of a building it owns located on the mainavenue of Berges du Lac 1. Number Starting period Duration Annual rent tax-free (TND) Increase rate Agreement 1 October 1st, 2009 2 years renewable 83 250 5% 19. In 2010, BIAT reached a rental agreement with "Socit de Promotion Immobilire de Tunisie" under which it shallprovide this company the necessary premise for the conduct of its business, which is part of a building located on the mainavenue of "Berges du Lac 1" Tunis. Number Starting period Duration Annual rent tax-free (TND) Increase rate Agreement 1 January 1st, 2010 2 years renewable 22 050 * 5%
*The annual rent was revised in 2011 (amendment) due to reduction of the area leased. 20. In 2010, BIAT reached a rental agreement with "Socit ORANGE TUNISIE" under which it shall hire the whole premiseon the ground floor of the building located Avenue Habib Bourguiba - El Kram. Number Starting period Duration Annual rent tax-free (TND) Increase rate Agreement 1 April 1st, 2010 3 years renewable 30 804 5% starting the second year 21. In 2010, BIAT reached a rental agreement with "Socit ORANGE TUNISIE" under which it shall hire the whole premise onthe ground floor of the building located rue Moncef Bey - Bizerte. Number Starting period Duration Annual rent tax-free (TND) Increase rate Agreement 1 December 1st, 2010 3 years renewable 31 725 5% 22. BIAT put at the disposal of Socit de Promotion Touristique Mohamed V employees that have participated in theconstruction project of hotels in downtown Tunis. The charge to be re-invoiced by BIAT to Socit de Promotion TouristiqueMohamed V totaled TND 135 000, free of taxe for financial year 2011. 23. In 2011, the BIAT concluded with "BIAT CAPITAL RISQUE" a rental agreement under which it shall hire a set officesrequired for the exercise of its activity, part of the building to the main boulevard rue Les Berges du LAC1 , whose detailis summarized thus: Number Starting period Duration Annual rent tax-free (TND) Increase rate Agreement 1 July 1st, 2011 2 years renewable 33 300 5% 24. BIAT concluded in 2011, with three of its subsidiaries an agreement for accounting and administrative assistance ,these subsidiaries are as follows: - SICAF BIAT ; - SGP ; - TAAMIR ; - OSI ; - SALLOUM. In return for this mission, BIAT receives from each subsidiary an annual amount of TND 19 800, free taxes. This amount isrevised annually based on actual expenses incurred by BIAT. 25. BIAT concluded in 2011 with CIAT "Compagnie Internationale Arabe de Tunisie" an agreement for putting at dispositionfor this company premises and logistics. In consideration of this service, BIAT receives an annual sum of TND 7 200, freeof taxes. 26. BIAT concluded with the company "Assurances BIAT" a sublease under which it makes available a room called the"Commercial 2" with a total area of ??approximately 145 m2 and located on the ground floor of the building DIAR El ONS,at Les Berges du Lac2 - Tunis . The annual rent is fixed at: - TND 125, free of taxes per m excluding taxes for the period of the lease from January 1st, 2010 to April 30th, 2010, thesum of TND 6 042, free of taxes; - TND 137.5, free of taxes per m excluding taxes for the period of the lease from May 1st, 2010 to April 30th, 2011, thesum of TND 19 937, free of taxes; - TND 147.5, free taxes per m excluding taxes for the period of the lease from May 1st, 2011 to April 30th, 2012, the sumof TND 21 387, free of taxes. An annual increase of 5% non-cumulative rent will be applied from May 1st, 2012. This sublease is granted for a fixed term beginning on January 1st, 2010 and ending April 30th, 2014 and it is renewablefrom year to year by tacit agreement. Banque Internationale Arabe de Tunisie BIAT Group Consolidated Financial Statements as at December 31, 2011 As approved by the Annual General Meeting dated June 29, 2012 STATUTORY AUDITORS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31ST, 2011 To the shareholders of Banque Internationale Arabe de Tunisie BIAT In compliance with the assignment entrusted to us by your Annual General Meeting dated May 28th, 2010, we are pleased topresent to you our report on the audit of the consolidated financial statements of GROUP BANQUE INTERNATIONALE ARABE DETUNISIE (BIAT) for the financial year ended December 31st, 2011, as attached to the present report showing a totalfinancial position of TND 8 045 274 thousand and a net income of TND 43 626 thousand as well as the examinations andspecific information provided for by law, the regulation in force and professional standards. We have audited the accompanying consolidated financial statements of BANQUE INTERNATIONALE ARABE DE TUNISIE "BIAT",including the consolidated balance sheet drawn up as at December 31st, 2011 as well as the consolidated off-balance sheetitems, the consolidated statement of income, the consolidated cash flows statement and the notes to the financialstatements including a summary of the main accounting methods and other explanatory notes. Management'sResponsibility in the preparation and presentation of financial statements The Bank's management is responsible for the preparation and fair presentation of consolidated financial statements inaccordance with Tunisian accounting standards. This responsibility includes designing, implementing and maintaininginternal control relevant to the preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error, as making accounting estimates that are reasonable to circumstances. Auditor's Responsibility The consolidated financial statements were prepared by your board of directors. Our responsibility is to express an opinionon these financial statements based on our audit. We conducted our audit in accordance with the Auditing Standards applicable in Tunisia. Those standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financialstatements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidatedfinancial statements. The procedures selected depend on the auditor's judgment; including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity's preparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate in the circumstances, and not for the purpose of expressing anopinion on the effective functioning of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion. Opinion In our opinion, the consolidated financial statements give a true and fair view andpresent fairly, in all materialrespects, the financial position of GROUP BANQUE INTERNATIONALE ARABE DE TUNISIE (BIAT), as at December 31st, 2011, as wellas the result of its operations and its cash flows for the year then ended, in accordance with the generally acceptedauditing standards in Tunisia. Emphasis of Matter We draw your attention on the note II.7.2 Collective Provisions to the consolidated financial statements describingthat in 2011 and following the events experienced by the country during the period post revolution, provisioning rulesenacted by the circular n 91-24 dated December 17th, 1991, were adjusted through the circular n2011-04 dated April12th,2011 concerning support contingency measures support to economic enterprises impacted by the events' consequences andcircular n 2012-02 dated January 11th, 2012, completed by notes to credit institutions n2012-08 dated March 2th, 2012,regarding the assessment of commitments in the context of these measures. In accordance of the new provisions, the commitments to customers benefiting of support measures, have been maintained ascurrent assets and those requiring special monitoring. In the meanwhile, a collective provision was booked by retaining the result of the exercise to cover latent risks on allassets and interests attached which payment has not been effected, have been reserved. The application of circular n 2012-02, had the effect to increase provisions in covering customer credits risks of TND 24700 thousand under provision called collectives , reduce income of TND 4 746 thousand in respect of interest reservesand even affect the results of the exercise of the two amounts. Our opinion does not include reserves on this issue. Specific verification
s We have also performed, according to the profession's standards, the specific verifications required by law. Based on these verifications, we have no observations to raise on the sincerity and consistency with the financialstatements of the accounting information given in the Management Report of the Board of Directors. In conducting our audit, we have also examined the internal control procedures relating to the accounting information'sprocess and to the preparation of the consolidated financial statements. In accordance with the provisions of article 3(new) of law 94-117 dated November 14th, 1994 as amended by law 2005-96 dated October 18th, 2005, we did not notice, basedon our examinations, the existence of material weaknesses that could impact our above-expressed opinion on the consolidatedfinancial statements. Tunis, May 21st, 2012 The Statutory auditors Les commissaires aux comptes associs M.T.B.F ECC MAZARS Ahmed BELAIFA Mohamed Ali ELAOUANI CHERIF CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheet As at December 31st, 2011 (TND thousands) Note 31/12/2011 31/12/2010 Change In % ASSETS Cash in hand, Balance at Central Bank, Post office accounts and Tunisian treasury IV-1 109 986 272 838 -162 852 -59,69% Due from banks and financial institutions IV-2 990 096 1 254 300 -264 204 -21,06% Customer loans IV-3 4 807 527 3 978 240 829 287 20,85% Commercial securities portfolio IV-4 1 474 281 1 226 629 247 652 20,19% Investment portfolio IV-5 126 285 123 484 2 801 2,27% Fixed assets IV-6 264 054 235 448 28 606 12,15% Other assets IV-7 273 045 192 963 80 082 41,50% TOTAL ASSETS 8 045 274 7 283 902 761372 10,45% LIABILITIES Tunisian Central Bank and post office V-1 3 416 2 097 1 319 62,90% Due to banks and financial institutions V-2 417 722 93 707 324 015 345,77% Customer deposits V-3 5 661 815 5 414 062 247 753 4,58% Borrowings and special resources V-4 134 419 152 898 -18 479 -12,09% Other liabilities V-5 429 059 299 032 130 027 43,48% TOTAL LIABILITIES 6 646 431 5 961796 684 635 11,48% MINORITY INTERESTS Share of minority interest in consolidated reserves 830 362 772 224 58 138 7,53% Share of minority interest in the consolidated income for the period 27 821 26 697 1 124 4,21% TOTAL MINORITY INTERESTS VI 858 183 798 921 59 262 7,42% SHAREHOLDERS' EQUITY Share capital 170 000 170 000 0 0,00% Consolidated reserves VII-1 321 755 287 783 33 972 11,80% Other consolidated shareholders' equity VII-1 22 39 -17 -43,59% Consolidated income carried forward VII-1 5 257 23 523 -18 266 -77,65% Consolidated net income for the period VII-2 43 626 41 840 1 786 4,27% TOTAL SHAREHOLDERS' EQUITY CONSOLIDATED 540 660 523 185 17 475 3,34% TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 8 045 274 7 283 902 761 372 10,45% Consolidated off-balance sheet items As at December 31st, 2011 (TND thousands) Note 31/12/2011 31/12/2010 Change In % Contingent liabilities Guarantees and endorsements given 974 203 1 051 667 -77 464 -7,37% a- to banks and financial institutions 321 159 346 493 -25 334 -7,31% b- to customers 653 044 701 654 -48 610 -6,93% c- other - 3 520 -3 520 -100,0% Letters of credit 457 427 342 167 115 260 33,69% a- Given to customers 329 509 315 105 14 403 4,57% b- Others 127 918 27 062 100 857 372,69% TOTAL CONTINGENT LIABILITIES 1 431 630 1 393 834 37 796 2,71% Commitments given Financing commitments given 93 730 98 026 -4 296 -4,38% To customers 93 730 98 026 -4 296 -4,38% Commitments on securities 4 420 4 930 -510 -10,34% a- Non paid up participations 4 290 4 857 -567 -11,67% b- Securities to be received 130 72 58 80,56% TOTAL COMMITMENTS GIVEN 98 150 102 956 -4 806 -4,67% COMMITMENTS RECEIVED Guarantees received 1 760 664 1 342 243 418 421 31,17% TOTAL COMMITMENTS RECEIVED 1 760 664 1 342 243 418 421 31,17% Consolidated Income Statement For the Financial year ended December 31st, 2011 (TND thousands) Note Exercise 2011 Exercise 2010 Change In % Banking operating income Interest and other similar revenues IIX-1 315 854 288 674 27 180 9,42% Commissions received IIX-2 115 860
103 197 12 663 12,27% Gains on commercial securities portfolio and financial operations IIX-3 112 584 100 396 12 188 12,14% Investment portfolio revenues IIX-4 3 674 4 771 -1 097 -22,99% Total banking operating income 547 972 497 038 50 934 10,25% Banking operating expenses Interests and similar expenses IIX-5 -125 493 -115 564 -9 929 8,59% Losses paid relating to insurance operations IIX-6 -18 120 -19 180 1 060 -5,53% Commissions paid IIX-7 -5 362 -4 890 -472 9,65% Losses on commercial securities portfolio and financial operations -231 -318 87 -27,36% Total banking operating expenses -149 206 -139 952 -9 254 6,61% NET BANKING INCOME 398 766 357086 41 680 11,67% Net provision charge and value adjustments for loan losses, off-balance sheet items and liabilities IIX-8 -83 960 -77 884 -6 076 7,80% Net provision charge and value adjustments on investment portfolio IIX-9 -833 8 280 -9 113 -110,06% Other operating income IIX-10 8 665 9 123 -458 -5,02% Personnel expenses IIX-11 -145 167 -124 410 -20 757 16,68% General operating expenses IIX-12 -50 123 -49 527 -596 1,20% Depreciation allowance on fixed assets IIX-13 -21 680 -20 542 -1 138 5,54% Operating income 105668 102126 3 542 3,47% Net gain (loss) on ordinary items 595 -3 748 4 343 -115,88% Corporate income tax IIX-14 -35 329 -30 915 -4 414 14,28% Income from ordinary operations 70 934 67463 3 471 5,15% Net gain (loss) on extra-ordinary items 26 0 26 - Share of Minority interests in the consolidated income 27 821 26 697 1124 4,21% Group's share in the consolidated income 487 1 074 -587 -54,66% NET INCOME FOR THE PERIOD 43 626 41 840 1 786 4,27% Consolidated Cash Flow Statement For the Financial year ended December 31st, 2011 (TND thousands) Note Exercise 2011 Exercise 2010 OPERATING ACTIVITIES Banking operating revenues received (excluding investment portfolio revenues) 547 282 474 399 Banking operating charges paid out -146 233 -137 968 Deposits / Deposit withdrawal with other banks and financial institutions 122 719 52 495 Loans and advances / Repayment of loans and advances extended to customers -836 678 -439 005 Deposits / Customer deposits withdrawal 249 567 192 791 Securities held for sale -90 004 -49 211 Payments to personnel and other creditors -170 275 -170 889 Other cash flows from operating activities 7 740 83 340 Corporate income tax -42 516 -18 726 Net cash flow from operating activities -358 398 -12 773 INVESTING ACTIVITIES Interest and dividends on investment portfolio 2 374 2 011 Purchase / Disposal of investment securities 2 005 -9 017 Purchase / Disposal of fixed assets -52 427 -47 945 Net cash flow from investing activities -48 048 -54 951 FINANCING ACTIVITIES Repayment of bond loans -19 027 -13 765 Increase \ decrease of special resources -3 045 16 309 Dividends paid -43 679 -36 670 Net cash flow from financing activities -65 751 -34126 Net change of cash and cash equivalents during the period -472 197 -101 850 Cash and cash equivalents at beginning of period 1 718 389 1 820 239 CASH AND CASH EQUIVALENTS AT END OF PERIOD 1 246 192 1 718 389 Notes to the consolidated financial statements As at December 31st, 2011 NOTE I: GENERAL PRINCIPALE
S The consolidated financial statements of BIAT group have been prepared in accordance with the accounting principlesprovided for by law 96-112 dated December 30th, 1996 relating to companies' accounting system; and by the Tunisianaccounting principles applicable in the banking industry, and those relating to consolidated financial statements andbusiness combination (accounting standard 35, 36, 37, 38, and 39). The financial statements are prepared according to the format set by the accounting standard number 21 relating to thepresentation of financial statements of banking institutions. NOTE II: BASIS OF ACCOUNTING ADOPTED FOR DRAWING UP THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements are drawn up as at December 31st, 2011 by applying the provisions and rules providedfor by law 2001-117 dated December 6th, 2001, in particular that supplements the code of commercial companies and by theaccounting principles relating to consolidated financial statements and business combination. Among these rules, thoserelating to the scope of consolidation, consolidation methods, adjustments and eliminations at the drawing up date,corporate income tax and goodwill are described below: II- 1/ Scope of consolidation The scope of consolidation includes all companies over which BIAT exercises directly or indirectly via its subsidiariesexclusive control as well as companies over which BIAT exercises significant influence. II- 2/ Consolidation methods II-2-1/ full consolidation Companies over which the Bank exercises exclusive control (percentage control exceeds 40%) and which are engaged in abusiness that represents an extension of the banking business or a related business are consolidated using the fullconsolidation method. This method consists in replacing the equity participation balance by the corresponding assets, liabilities, charges andrevenues for each consolidated company, while indicating the share of minority interests in consolidated shareholders'equity and in consolidated income for the financial year. II-2-2 / equity method Companies over which the Bank exercises significant influence are consolidated using the equity method. Significantinfluence is presumed where the consolidating entity holds 20% or more of voting rights and has the power to participate infinancial and operating policy decisions but not control those policies. This method consists in replacing the equity participation balance by the Group's share in net assets including net incomefor the financial year of companies accounted for under the equity method. II- 3/ Adjustments and eliminations The required adjustments in view of the harmonization of accounting and company valuation methods were made. Intercompany receivables, payables, commitments, income and expenses were eliminated. The impact on the consolidated balance sheet, off-balance sheet items and income statement of intercompany transactions waseliminated. Intercompany dividends, provisions on participations in consolidated companies, and capital gains or losses on the sale ofassets between consolidated companies were also eliminated. II- 4 / Closing date The consolidated financial statements have been prepared based on the individual financial statements of Group companiesdrawn up as at December 31st, 2011. II- 5 / Tax treatments The consolidated charge of corporate income tax consists of corporate income tax due by Group companies adjusted by theimpact of differed income tax arising from temporary differences due to the mismatch between the accounting record and taximposition dates. II- 6/ Goodwill on acquisition The excess of the purchase price of shares of consolidated companies over the Group's share in their net assets at the dateof acquisition is recorded as goodwill and carried on the assets side of the consolidated balance sheet. Goodwill is notallocated to a specific balance sheet item and is amortized over the estimated period of benefit at the date ofacquisition. The goodwill amortization period of 20 years has been adopted since financial year 2002. Negative goodwill is recognized as income for the period. II-7 / The rules of valuation of assets II-7.1 / Individual Provision: In accordance with the provisions of accounting standards of the banking sector and the Circular n91-24 of 17-12-1991 ofthe Central Bank of Tunisia, an assessment of all claims of the Bank was made on the basis of the situation at December31st, 2011 and considering events after this date. This evaluation was associated with an appreciation of all guarantees deductible within the meaning of Circular n 91-24 ofthe Central Bank of Tunisia on the prudential rules.These two operations have led the Bank to determine the amount of required provisions, an amount in provisions for 2011 andan amount of revenue reserved. II-7.2/ Collective Provisions: Until the end of the fiscal year 2010, only the rules of asset classification and risk coverage issued by Circular n 91-24of December 17th, 1991, were applicable. In 2011, following revolution events experienced by the country, these rules have been adapted and, through Circular n2011-04 of April 12 th, 2011 on economic measures to support businesses affected by the economic benefits of eventsoccurred which includes the following: The rescheduling of maturities falling due or accruing during the period from December 1, 2010 until December 31st, 2011and additional management credits uses to cope with the exceptional post-revolution effects; These rescheduling must not lead to the classification of the client concerned in Classes 2, 3 or 4, or revising itsclassification occurred at December 31st, 2010. As such, the total commitments of customer who have been benefited by arrangements as part of the circular and have beenmaintained as current assets and those requiring special monitoring, amounted to TND 465 852 thousand at December 31st,2011, of which TND 82 521 thousand for loans rescheduled and TND 23 600 thousand for new funding for repairing the damage. In addition and pursuant to the provisions of Circular n 2012-02 of January 11th, 2012, credit institutions must notinclude in their products interest remaining unpaid on the date of rescheduling and commitments relating to arrangementsthat have received in under Circular n 2011-04. Thus, the interests have been the subject of reservation in 2011, amounted to TND 4 746 thousand.Parallel, and under the note to credit institutions n 2012-08 of March 2th, 2012, on the assessment of the commitments inthe framework of the above measures, a general reserve was established by deduction from the results of the year to coverthe latent risks on all current assets and those which need a special follow-up. As such, the provisions designated "collective provisions" occurred by the bank in 2011, amounted to TND 24 700 thousand NOTE III: COMPANIES INCLUDED WITHIN THE SCOPE OF CONSOLIDATION In pursuance of the provisions of law 117-2001 dated December 6th, 2001 and the Tunisian accounting standards, the scope ofconsolidation of BIAT Group consists of the following: III- 1/ Scope of consolidation During financial year 2011, the scope of consolidation of - More to follow, for following part double clickID:nRSL6345Od
