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(EIIB.L) European Islamic Investment Bank PLC Buy/Sell

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Date/Time	Headline	Source
1
13-11-09	Euro Islamic Inv Bnk - EGM Statement	RNS
RNS Number : 4749C European Islamic Investment BankPLC 13 November 2009 European Islamic Investment Bank plc ("EIIB" or the "Company") Result of General Meeting All resolutions put to the General Meeting held today were duly passed by shareholders. The resolutions concerned the proposed Tender Offer by Evolution Securities Limited to purchase ordinary shares of 1 pence each in the capital of the Company ("Ordinary Shares") at a price of 7 pence per Ordinary Share subject to a maximum aggregate of GBP 7,000,000 being an overall maximum of 100,000,000 Ordinary Shares. A circular, which includes the notice of General Meeting containing full details of the resolutions, was posted to shareholders on 28 October 2009. A copy of the circular is available on the Company's website: www.eiib.co.uk. Enquiries: `EIIB plc Tel: +44(0)20 7847 9900` Keith McLeod, Chief Executive Officer `Evolution Securities Tel: +44(0)20 7071 4300` Chris Sim Bobbie Hilliam This information is provided by RNS The company news service from the London Stock Exchange END EGMFFIFSDSUSEEF More
28-10-09	Euro Islamic Inv Bnk - Tender Offer	RNS
RNS Number : 5305B European Islamic Investment BankPLC 28 October 2009 European Islamic Investment Bank plc (the "Company") Tender Offer by Evolution Securities Limited ("Evolution Securities") to purchase ordinary shares of 1 pence each in the capital of the Company ("Ordinary Shares") at a price of 7 pence per Ordinary Share subject to a maximum aggregate of £7,000,000 being an overall maximum of 100,000,000 Ordinary Shares `1. Introduction` The Company announces that it proposes to instruct Evolution Securities to purchase up to a maximum of 100,000,000 Ordinary Shares at a price of 7 pence per Ordinary Share (equivalent to an aggregate value of £7,000,000) by way of a tender offer to Qualifying Shareholders on the Company's register at 5.00 p.m. on 27 October 2009 (the "Tender Offer") which will then be purchased by the Company and cancelled (the "Purchase Agreement") and to effect a capital reduction in order to implement the Tender Offer (the "Capital Reduction"). Investors should note that the Tender Offer will only be made to persons who are Qualifying Shareholders on the register of members of the Company or Optionholders for the purposes of the Tender Offer at 5.00 p.m. on 27 October 2009. The Directors reserve the right to exercise their discretion in the allocation of successful applications although, subject to the overall maximum of 100,000,000 Ordinary Shares, it is currently intended that applications will be accepted for up to 500,000 Ordinary Shares per Qualifying Shareholder. `2. Background to and Reasons for the Tender Offer` The Directors are aware that the Company's Ordinary Shares have historically traded at a significant discount to the Company's net asset value and that liquidity in the Ordinary Shares has generally been limited. Consequently, the Directors believe that there may be a number of smaller Shareholders who wish to realise some or all of their investment in the Company. Despite the economic crisis, the Company holds significant liquid resources and the board has therefore concluded that the Tender Offer represents the most effective means by which Shareholders can receive some liquidity in their holding. The Capital Reduction is being undertaken to enable the Tender Offer to be made. Any additional distributable reserves created pursuant to the Capital Reduction should be available to assist in any future distributions. `3. The Tender Offer` The Board considers that the Tender Offer: PROVIDES AN OPPORTUNITY FOR QUALIFYING SHAREHOLDERS TO TENDER ALL OR PART OF THEIR HOLDING OR TO TENDER NONE OF THEIR ORDINARY SHARES, DEPENDING ON THEIR OWN LIQUIDITY REQUIREMENTS AND THEIR VIEW OF THE PROSPECTS OF THE COMPANY GOING FORWARD; ALLOWS QUALIFYING SHAREHOLDERS THE OPPORTUNITY TO DISPOSE OF ORDINARY SHARES IN A TAX EFFICIENT MANNER, FREE OF DEALING COSTS AND STAMP DUTY (WHICH WILL BE BORNE BY THE COMPANY); AND PROVIDES A RETURN OF CASH NOW, COMPARED TO THE ALTERNATIVE OF BEING EXPOSED TO THE FINANCIAL RISKS OF THE ONGOING OPERATIONS OF THE COMPANY. The price per Ordinary Share under the Tender Offer represents a premium of 141.4 per cent. to the closing price of 2.9 pence per Ordinary Share on 27 October 2009, being the last business day prior to the Company announcing the Tender Offer. The maximum aggregate number of Ordinary Shares which may be purchased in the Tender Offer is 100,000,000 Ordinary Shares. The Directors reserve the right to exercise their discretion in the allocation of successful applications although, subject to the overall maximum of 100,000,000 Ordinary Shares, it is currently intended that applications will be accepted for up to 500,000 Ordinary Shares per Qualifying Shareholder. The price to be paid for each Ordinary Share subject to the Tender Offer is 7 pence. The Directors (acting together) reserve the right to terminate the Tender Offer at any time on or before 7.00 a.m. on the date on which the Tender Offer completes if they conclude that its implementation is no longer in the best interests of the Company and/or Shareholders as a whole or that the purchase of Ordinary Shares by the Company may have adverse fiscal consequences (whether by reason of any change in legislation, practice, circumstances or otherwise) for the Company and/or Shareholders as a whole. If the Tender Offer is terminated, the Company will make an announcement through a Regulatory Information Service. Full details of the Tender Offer, including the terms and conditions on which it is made, will be set out in the circular to the Company's shareholders (see below). `4. Summary Terms of the Tender Offer` The Tender Offer is conditional upon: THE PASSING OF CERTAIN RESOLUTIONS TO EFFECT THE TENDER OFFER AT A GENERAL MEETING OF THE COMPANY TO BE HELD AT 9.30 A.M. ON 13 NOVEMBER 2009; THE CAPITAL REDUCTION (AS SET OUT BELOW) BEING APPROVED BY THE COURT AND TAKING EFFECT BY 5.00 P.M. ON 30 JANUARY 2010; AND THE COMPANY DEPOSITING INTO BERWIN LEIGHTON PAISNER LLP'S CLIENT ACCOUNT SUFFICIENT MONIES TO SATISFY THE TENDER OFFER PRICE PAYABLE IN RESPECT OF THE ORDINARY SHARES VALIDLY TENDERED UNDER THE TENDER OFFER BY 5.00 P.M. ON 9 DECEMBER 2009. If these conditions are not satisfied by 5.00 p.m. on 30 January 2010 (or such later time and date as the Company and Evolution Securities may agree) the Tender Offer will not proceed and will lapse. `5. The Capital Reduction` The Company has a deficit on its profit and loss account and so does not have the distributable reserves required to effect the Tender Offer. The Board therefore proposes that the Capital Reduction be effected to create distributable reserves to enable the Purchase Agreement to be completed. Any distributable reserves created by the Capital Reduction which are not utilised under the Purchase Agreement should be available to assist in any future distributions, subject to arrangements for the protection of creditors required by the Court. In addition to the approval by the Shareholders of the Resolutions, the Capital Reduction requires the approval of the Court. Accordingly, following approval of the Capital Reduction by Shareholders, an application will be made to the Court to confirm and approve the Capital Reduction. `6. Circular and General Meeting` A circular setting out further details of the Tender Offer and Capital Reduction is expected to be posted to Shareholders later today (the "Circular"). The Circular will also convene a General Meeting to be held at the offices of the Company at 4th Floor, 131 Finsbury Pavement, London, EC2A 1NT at 9.30 a.m. on 13 November 2009. The Circular will be available on the Company's website www.eiib.co.uk. `7. Directors Intentions` The Directors have confirmed that they intend to vote in favour of the resolutions to be proposed at the General Meeting referred to above and do not intend to tender their holdings of Ordinary Shares in the Tender Offer. `8. Expected Timetable of Principle Events` `Record Date for Tender Offer 27 October 2009 at 5.00 p.m.` `Latest time for receipt of Forms of Proxy 11 November 2009 at 9.30 a.m.` `General Meeting 13 November 2009 at 9.30 a.m.` `Final date for receipt of Tender Forms and 20 November 2009 at 1.00 p.m.` share certificates for certificated shares `Final date for receipt of TTE instructions 20 November 2009 at 1.00 p.m.` `Announcement of take-up level under Tender 23 November 2009` Offer `Court hearing to confirm Capital Reduction* 9 December 2009` `Effective Date* 10 December 2009` `Purchase of Ordinary Shares under the Tender 10 December 2009` Offer `Purchase of Ordinary Shares under the 10 December 2009` Purchase Agreement `CREST Account credited with Tender Offer 16 December 2009` proceeds `Dispatch of cheques for Tender Offer 16 December 2009` proceeds THESE DATES ARE DEPENDENT ON, INTER ALIA, THE DATE UPON WHICH THE COURT CONFIRMS THE CAPITAL REDUCTION. THE COURT HEARING MAY BE SUBJECT TO POSTPONEMENT BY THE COURT. * THE CAPITAL REDUCTION IS SUBJECT TO, INTER ALIA, THE APPROVAL OF THE COURT AND WILL NOT TAKE PLACE IF COURT APPROVAL IS NOT OBTAINED. IF THE CAPITAL REDUCTION IS NOT APPROVED BY THE COURT, THE TENDER OFFER WILL NOT COMPLETE. The Tender Offer is not being made, and will not be made, directly or indirectly, in or into or from, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telephone, internet or any other forms of electronic communication) of interstate or foreign commerce of, or by any facilities of a national securities exchange of a Prohibited Territory (as such term is defined in the Circular) and the Tender Offer cannot be accepted by any such use, means or instrumentality or otherwise from or within such Prohibited Territories. Accordingly, this document is not being, and must not be, mailed or otherwise forwarded, distributed or sent in or into or from a Prohibited Territory including to Shareholders with registered addresses in Prohibited Territories or to persons whom the Company or Evolution Securities know to be trustees, nominees or custodians holding Ordinary Shares for such persons. Evolution Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company and for no-one else in connection with the Tender Offer and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Evolution Securities or for providing advice in connection with the matters set out in this document or any transaction or arrangement referred to herein. Enquiries: `EIIB plc Tel: +44(0)20 7847 9900` Keith McLeod, Chief Executive Officer `Evolution Securities Tel: +44(0)20 7071 4300` Chris Sim Stuart Andrews This information is provided by RNS The company news service from the London Stock Exchange END TENCKFKPQBDDPKB More
08-10-09	UK sharia bank EIIB seals forex hedging deal	AFX UK Focus
LONDON, Oct 8 (Reuters) - UK-listed Islamic bank European Islamic Investment Bank (EIIB) has signed a deal with Standard Chartered Bank to hedge foreign exchange risk. `Standard Chartered said in a statement on Thursday originally issued in Singapore that the Sharia-compliant structured foreign exchange hedging deal was its first in Europe.` `No one at Standard Chartered or the EIIB was available for further comment.` `Standard Chartered said it had developed new documentation, which allows foreign exchange hedging with an option component, backed by an exchange of commodities for each leg of the transaction. This allows the EIIB to broaden its investment horizon in a sharia compliant way.` Islamic forex hedging transactions must involve tangible assets. The exchange of commodities is integral to the underlying contract because the counterparties must avoid interest accrual, as required by Islamic law. (Reporting by Cecilia Valente; Editing by Greg Mahlich) Keywords: STANCHART EIIB SHARIA/FOREX (cecilia.valente@thomsonreuters.com; +44 (0)20 75423570; Reuters Messaging: cecilia.valente.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. More
11-09-09	Euro Islamic Inv Bnk - Half Yearly Report	RNS
RNS Number : 9012Y European Islamic Investment BankPLC 11 September 2009 European Islamic Investment Bank plc 11 September 2009 Results for the six month period to 30 June 2009 The Board of European Islamic Investment Bank plc ("EIIB", the "Bank" or the "Company") announces its results for the six month period to 30 June 2009. For further information, please contact: `EIIB plc Tel: +44 (0)20 7847 9900` Keith McLeod, Interim Chief Executive `Evolution Securities Tel: +44 (0)20 7071 4300` Chris Sim/Bobbie Hilliam `Fishburn Hedges Tel: +44 (0)20 7839 4321` Michelle James/Andrew Marshall Chairman's statement The impact of the global financial crisis has continued to be felt across the economies of the world, the Middle East and the Islamic financial sector have not been immune. Despite these challenges, the Board of EIIB ('the Bank') has ensured that the Bank maintains high liquidity and a cautious approach to its activities. The Bank, in common with many other financial institutions, has suffered during these testing times and, as a result, has reported an Operating loss on continuing operations (before impairment provisions and fair value adjustments) for the period of £2.1m (2008: £2.1 profit) [Note 18.1]. Operating income for the Group for the period was £2.3m (2008: £6.6m) due to reduced returns in the Treasury business, a continued lack of activity in the Capital Markets, and lower fee generation. I am pleased to report that our active management of resources has resulted in our Core Operating Expenses (excluding impairment provisions, fair value adjustments and operating expenses on oil & gas activities(included within other operating expenses)) for the period decreasing by 10% to £4.1m (2008: £4.5m) [Note 18.2]. In keeping with EIIB's careful and prudent approach, we continually review the valuation of our asset portfolio. After careful and cautious deliberation and review, we have made provisions and fair value adjustments totalling £13.9m. Further details of these items are provided below. In addition, a loss of £7.1m was recognised mainly due to a fair value adjustment in relation to a discontinued operation. This fair value adjustment reflects the valuation of a portfolio of investment properties at 30 June 2009. We anticipate this adjustment will ultimately be reversed once the disposal of the activity is completed, this is currently in progress. Further detail of this item is provided below. The Treasury and Capital markets division was impacted by the lack of positive sentiment in the interbank market which was characterised by low volumes, an unprecedented decline in yields and continued lack of liquidity in the wholesale markets. In addition, the international Sukuk primary market and the Islamic Syndicated markets have remained largely closed during this period, as have the secondary markets. Recent new Sukuk activity has demonstrated that there is investor demand for the right quality of issuers. Furthermore, our Capital Markets business was impacted by two credit events during the first half of 2009. The first is in relation to a facility that the Bank co-arranged in 2008 for Ahmed Hamad Algosaibi & Brothers Company, and the second is in relation to a holding that the Bank has in the Saad Golden Belt 1 Sukuk. The Bank is actively engaged with the parties to recover amounts due. However it is unclear at this time whether the full amount of each exposure will ultimately be recovered. The sum total of the Bank's exposure to these counterparties is £14m, against which the Bank has made a provision of £10.8m. The Private Equity business continues to see considerable deal opportunities, completing one deal during this period. This was the business's second transaction, the first being the investment in DiamondCorp Plc. which was completed in 2008. As a result of the decline in the demand for diamonds during the current economic downturn and a number of issues at the Lace Mine itself, DiamondCorp Plc. has put the mine on a "care and maintenance" footing for the time being. As a result of this, and the decline in the share price, a fair value charge of £3.2m has been made against this investment at this time. The Private Equity industry as a whole has been impacted adversely by the global financial crisis, in particular with a lack of liquidity, reduced fee generation and subdued investor demand. However, we remain confident that this is a business well suited to the Bank, its shareholders and its investors, and we are confident that the level and quality of interest and queries received by the business thus far will be translated into profitable investment deals in the short to medium term. Following the provision taken at the end of 2008, in relation to a portfolio of investment properties ('the property portfolio' acquired as part of the aborted launch of the EIIB Pan-European Islamic Real Estate Fund) and the anticipated further decline in the UK Commercial Property market, the Bank commenced discussions with the finance provider to find a buyer for these properties by the end of June 2009. Unfortunately, the finance provider was unsuccessful in reaching agreement with a potential buyer therefore The House Limited ("THL"), which is a subsidiary of the EIIB Pan-European Islamic Real Estate Fund, requested the appointment of a Receiver in respect of all property of THL including the Property Portfolio. The appointment was made effective from 12 August 2009, there is no recourse to EIIB in respect of the obligations of THL. At 30 June 2009, the property portfolio was valued at £31.4m, we have made a fair value adjustment of £7.3m in respect of this portfolio. The loss accounted for in the income statement (£7.1m) for the period ended 30 June 2009 is expected to reverse once the disposal of the activity is completed. In July, the Bank announced that it had received a number of approaches from third parties who were interested in a business combination with the EIIB Group. Following a consultation period with these parties, the Board concluded that the approaches did not demonstrate compelling strategic logic, nor did they fairly reflect the value of EIIB. Consequently, the discussions were terminated. I am pleased to report that the Bank remains well capitalised and highly liquid, with a capital ratio of 86% against an FSA minimum of 8%, and liquidity ratios of 90% (less than 8 days) and 180% (less than one month) verses minima of 0% and -5% respectively. Finally, it is with regret that I inform shareholders that John Weguelin decided to stand down as CEO of EIIB with effect from 21 August 2009, although he will maintain an advisory role for the Private Equity division of the Bank for a period of six months. On behalf of the Board I would like to thank John for his commitment, and the vital role he played in establishing EIIB as the first FSA authorised independent Islamic investment bank based in London. John was instrumental not only in negotiating the Bank through the FSA licensing process, but also in building the requisite operational, regulatory and business infrastructure, and in positioning the Bank in its key business areas. The Board extends to him its very best wishes in his future endeavours. Looking ahead, although there are early signs of improvement in global markets, we remain cautious about the rate of recovery. We are undertaking a fundamental review of the Bank's strategy which will cover all aspects of the Bank's activities including whether Shareholders derive value and liquidity from the Bank's listing on the Alternative Investment Market (AIM). In conclusion, while I am disappointed with the results of the Bank over the period under review, I believe that the Board and Management have taken decisive steps to address the situation and that the Bank is now well positioned to use its strong capitalisation and liquidity to develop its position in the growing Islamic Banking market. The Board has appointed Keith McLeod (Finance Director) as Interim Chief Executive Officer whilst we undertake a search for a new CEO to lead the Bank forward. Adnan Ahmed Yousif Chairman `Independent review report to European Islamic Investment Bank plc` Introduction We have been engaged by the company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2009 which comprises the Condensed Consolidated Income Statement, Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Other Comprehensive Income, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Cash Flow Statement and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules. As disclosed in note 2, the annual financial statements of the company are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The accounting policies that have been adopted in preparing the condensed set of financial statements are consistent with those that the directors currently intend to use in the next annual financial statements. Our responsibility Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the AIM Rules. Paul Furneaux for and on behalf of KPMG Audit Plc Chartered Accountants 11 September 2009 `Condensed consolidated income statement for the half year ended 30 June 2009 (unaudited)` `6 months to 6 months to Year to` `30 Jun 2009 30 Jun 2008 31 Dec 2008` `Continued operations Notes £ £ £` Income `Income from financing and 2,566,837 6,870,777 12,785,855` investing activities `Returns to financial (324,046) (1,390,222) (2,517,987)` institutions and customers `Net margin 2,242,791 5,480,555 10,267,868` `Foreign exchange gains 75,689 319,118 805,985` `Trading income 40,302 117,645 242,970` `Fees and commissions 30,524 666,184 787,143` `Gross loss from oil & gas 10 (106,866) - -` activity of subsidiary `Total operating income 2,282,440 6,583,502 12,103,966` Expenses `Fair value loss on assets (3,169,674) - -` designated as fair value through profit & loss `Provision for impairment of (4,668,459) - (3,750,000)` financing arrangements `Provision for impairment of (6,100,188) - -` available for sale securities `Staff costs (2,802,975) (3,288,940) (5,016,059)` `Depreciation and amortisation 12 (208,534) (212,875) (722,460)` `Other operating expenses (1,416,656) (1,030,606) (2,345,672)` `Total operating expenses (18,366,486) (4,532,421) (11,834,191)` `Operating (loss)/profit before (16,084,046) 2,051,081 269,775` tax `Tax 7 986,580 (877,550) (1,091,533)` `(Loss)/profit for the period (15,097,466) 1,173,531 (821,758)` from continued operations Discontinued operations `(Loss)/profit after tax for 14 (7,084,020) 754,461 (13,991,365)` the period from discontinued operations `(Loss)/profit for the period (22,181,486) 1,927,992 (14,813,123)` The notes on pages 9 to 21 form an integral part of the condensed consolidated interim financial statements. `Condensed consolidated statement of other comprehensive income for the half year ended 30 June 2009 (unaudited)` `6 months to 6 months to Year to` `30 Jun 2009 30 Jun 2008 31 Dec 2008` `Notes £ £ £` `(Loss)/profit for the period (22,181,486) 1,927,992 (14,813,123)` Other comprehensive income `Net change in fair value of 3,661,906 (663,944) (3,890,474)` available-for-sale financial assets `Income tax effect on the (532,818) 185,904 1,108,785` changes of available for sale financial assets `Other comprehensive income for 3,129,088 (478,040) (2,781,689)` the period, net of income tax `Total other comprehensive (19,052,398) 1,449,952 (17,594,812)` (expense)/income for the period (Loss)/profit attributable to: `Owners of the Bank (22,120,229) 1,927,992 (14,813,123)` `Non-controlling interest (61,257) - -` `(Loss)/profit for the period (22,181,486) 1,927,992 (14,813,123)` Total other comprehensive (expense)/income attributable to: `Owners of the Bank (18,991,141) 1,449,952 (17,594,812)` `Non-controlling interest (61,257) - -` `(19,052,398) 1,449,952 (17,594,812)` Earnings per share basic and diluted 8 (1.21p) 0.11p (0.81p) Continuing operations basic and diluted 8 (0.82p) 0.06p (0.05p) The notes on pages 9 to 21 form an integral part of the condensed consolidated interim financial statements. `Condensed consolidated balance sheet at 30 June 2009 (unaudited)` `30 Jun 2009 30 Jun 2008 31 Dec 2008` `Assets Notes £ £ £` `Cash and balances with banks 996,594 1,079,558 972,540` `Due from financial 128,821,042 222,202,943 144,365,892` institutions `Financing arrangements 15,134,044 25,279,293 28,390,180` `Available for sale securities 40,719,466 38,641,920 56,559,347` `Financial assets designated at 1,715,289 - 4,884,963` fair value `Fair value of foreign exchange 223,425 326,556 20,012` agreements `Other assets 15 8,356,591 4,531,184 1,975,217` `Collateral deposits - 235,732 -` `Current tax assets 7 1,772,051 - 815,076` `Property portfolio 14 - 53,699,245 38,699,245` `Assets of disposal group 14 32,633,254 - -` classified as held for sale `Goodwill 10 954,077 - -` `Plant and equipment 12 240,454 358,255 293,107` `Intangible assets 13 539,627 818,357 683,261` `Total assets 232,105,914 347,173,043 277,658,840` Liabilities `Due to financial institutions 41,585,573 157,322,741 107,084,431` `Due to customers 2,842,458 2,279,022 2,728,522` `Fair value of foreign exchange 90,120 1,069 1,924,178` agreements `Other liabilities 2,038,338 4,593,487 2,504,209` `Current taxation 7 - 493,066 -` `Liabilities classified as held 14 40,092,177 - -` for sale `Deferred taxation 7 60,212 100,967 60,212` `Total liabilities 86,708,878 164,790,352 114,301,552` Shareholders' equity `Share capital 18,255,625 18,255,625 18,255,625` `Share premium account 164,229,939 164,229,939 164,229,939` `Available for sale reserve (99,598) (925,038) (3,228,686)` `Retained earnings (38,010,139) 822,165 (15,899,590)` `Total equity attributable to the Bank's equity 144,375,827 182,382,691 163,357,288` holders `Non-controlling interest 1,021,209 - -` `Total equity and liabilities 232,105,914 347,173,043 277,658,840` These condensed consolidated interim financial statements were approved by the Board of Directors on 10 September 2009 and signed on its behalf by; `Adnan Yousif Keith McLeod` `Chairman Finance Director` The notes on pages 9 to 21 form an integral part of the condensed consolidated interim financial statements. Condensed consolidated statement of changes in equity for the half year ended 30 June 2009 (unaudited) `Share capital Share premium Fair value reserve Retained earnings Total Non controlling Total equity` `account interest` `£ £ £ £ £ £ £` `Balance at 1 January 2008 18,255,625 164,229,939 (446,997) (1,119,160) 180,919,407 - 180,919,407` `Share award - - - 13,333 13,333 - 13,333` `18,255,625 164,229,939 (446,997) (1,105,827) 180,932,740 - 180,932,740` `Unrealised loss on available (663,944) (663,944) - (663,944)` for sale investments `Tax effect adjusted 185,903 - 185,903 - 185,903` `Profit for the period - 1,927,992 1,927,992 - 1,927,992` `Total comprehensive income for (478,041) 1,927,992 1,449,951 - 1,449,951` the period `Balance at 30 June 2008 18,255,625 164,229,939 (925,038) 822,165 182,382,691 - 182,382,691` `Balance at 1 July 2008 18,255,625 164,229,939 (925,038) 822,165 182,382,691 - 182,382,691` `Share award - - - 19,360 19,360 - 19,360` `18,255,625 164,229,939 (925,038) 841,525 182,402,051 - 182,402,051` `Net unrealised loss on (3,226,530) - (3,226,530) - (3,226,530)` available for sale securities `Tax effect adjusted 922,881 - 922,881 - 922,881` `Loss for the period - (16,741,115) (16,741,115) - (16,741,115)` `Total comprehensive loss for (2,303,649) (16,741,115) (19,044,764) - (19,044,764)` the period `Balance at 31 December 2008 18,255,625 164,229,939 (3,228,686) (15,899,590) 163,357,288 - 163,357,288` `Balance at 1 January 2009 18,255,625 164,229,939 (3,228,686) (15,899,590) 163,357,288 - 163,357,288` `Share award - - - 9,680 9,680 - 9,680` `Non controlling interest - - - - - 1,082,466 1,082,466` arising on business combinations `18,255,625 164,229,939 (3,228,686) (15,889,910) 163,366,968 1,082,466 164,449,434` `Net unrealised loss on (2,971,101) - (2,971,101) - (2,971,101)` available for sale securities `Impairment losses on available 6,633,007 - 6,633,007 - 6,633,007` for sale investments `Tax effect adjusted (532,818) - (532,818) - (532,818)` `Loss for the period - (22,120,229) (22,120,229) (61,257) (22,181,486)` `Total comprehensive loss for 3,129,088 (22,120,229) (18,991,141) (61,257) (19,052,398)` the period `Balance at 30 June 2009 18,255,625 164,229,939 (99,598) (38,010,139) 144,375,827 1,021,209 145,397,036` The notes on pages 9 to 21 form an integral part of the condensed consolidated interim financial statements. Condensed consolidated cash flow statement for the half year ended 30 June 2009 (unaudited) `6 months to 6 months to Year to` `30 Jun 2009 30 Jun 2008 31 Dec 2008` `Notes £ £ £` Cash flows from operating activities `Operating (loss)/profit on (16,084,045) 2,051,081 269,775` continuing activities before tax discontinued operations (7,084,020) 754,461 (13,991,365) Adjusted for: `Provision for impairment of 14 - - 14,705,914` property portfolio `Provision for impairments of 13,938,321 - 3,750,000` financial assets `Depreciation and amortisation 12/13 208,534 212,875 722,460` `Charges for share awards - 13,333 32,693` Net (increase)/decrease in operating assets: `Due from financial 15,544,850 (30,025,952) 53,640,955` institutions `Financing arrangements 8,587,677 5,349,769 (7,105,241)` `Available for sale securities 12,868,782 (4,985,813) (26,129,769)` `Financial assets designated - - (4,884,963)` at fair value `Fair value of foreign (2,736,918) (1,059,552) 1,170,102` exchange agreements `Other assets 1,126,163 (810,689) 1,745,276` `Investment property 38,699,245 - -` `Net changes in the value 7,458,923 - -` of disposal group Net increase/(decrease) in operating liabilities: `Due to financial institutions (65,498,858) 30,641,749 (19,596,561)` `Due to customers 113,936 (492,958) (43,458)` `Other liabilities (960,611) 1,386 (2,087,890)` Taxation: `Corporation tax paid - (1,150,000) (1,790,000)` `Net cash inflow from operating activities 6,181,979 499,690 407,928` Cash flows from investing activities `Purchase of plant and 12 (12,247) (21,245) (28,478)` equipment `Purchase of intangible assets (43,735) (51,756)` `Acquisition of a subsidiary, (7,228,144) - -` net of cash acquired `Net cash outflow from (7,240,391) (64,980) (80,234)` investing activities Cash flows from financing activities `Investment contribution by the 1,082,466 - -` non-controlling interests `Net cash inflow from financing 1,082,466 (64,980) (80,234)` activities `Net increase/(decrease) in cash and balances with 24,054 434,712 327,694` banks `Cash and balances with banks at the beginning of the 972,540 644,846 644,846` period `Cash and balances with banks at the end of the 996,594 1,079,558 972,540` period The notes on pages 9 to 21 form an integral part of the condensed consolidated interim financial statements. EXCLUDES BALANCES WITH BANKS OF THE DISCONTINUED OPERATION WHICH ARE INCLUDED IN THE NET CHANGES IN THE VALUE OF DISPOSAL GROUP Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 1. Principal activities European Islamic Investment Bank plc (the 'Bank' or 'EIIB') was incorporated as the first independent UK based Islamic investment bank managed on a wholly Sharia'a compliant basis. The activities of the Bank are focused on servicing clients in Europe, the Middle East and Asia through the provision of a range of services encompassing trading and investing in Islamic securities, treasury services and structured products (Treasury and Capital Market activities), Private Equity and Corporate Advisory and Real Estate. The Bank is a company incorporated in the UK which was established on 11 January 2005 and received authorisation from the FSA on 8 March 2006 to carry on activities as an investment bank. The interim condensed consolidated financial statements of the Bank and its subsidiaries (the 'Group') for the six months ended 30 June 2009 were authorised by the Board of Directors for issue at its meeting on 10 September 2009. The consolidated financial statements of the Group as at and for the year ended 31 December 2008 are available at www.eiib.co.uk 2. Accounting policies and basis of preparation The condensed consolidated interim financial statements for the six months ended 30 June 2009 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU. The condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2008. The accounting policies adopted in the preparation of the condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2008 except as detailed in Note 3. During 2009 EIIB decided to discontinue its activities carried out via the special purpose vehicle, The House Limited (THL). An active programme was launched to finalise the disposal of the property portfolio before 30 June 2009 and accordingly these operations have been classified as held-for-sale in accordance with IFRS 5. Presentation of comparative figures The comparative figures for the financial year ended 31 December 2008 are not the company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237 of the Companies Act 1985. Certain of the prior period comparatives have been reclassified to conform with the current period's presentation. Going concern In approving the financial statements the Directors have reviewed the current and potential future business activities and financial position of the Group, including an assessment of the capital adequacy and liquidity forecasts. Based upon this they are satisfied that the Group has adequate resources to continue in business for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the financial statements. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 `3. Changes in accounting policies` The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2008. The following new accounting standards and amendments are adopted from 1 January 2009. `3.1 Accounting for business combinations` The Group has adopted IFRS 3 Business Combinations (2008) and IAS 27 Consolidated and Separate Financial Statements (2008) for business combinations occurring in the financial year starting 1 January 2009. Business combinations occurring on or after 1 January 2009 are accounted for by applying the acquisition method. This has not had an impact upon EIIB in respect of prior years but has been applied to new combinations during the period. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another. The Group measures goodwill as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. `3.2 Determination and presentation of operating segments` The Group has adopted IFRS 8 Operating Segments as of 1 January 2009. However there are no significant changes on the adoption of this new standard. `3.3 Presentation of financial statements` The Group applies revised IAS 1 Presentation of Financial Statements (2007), which became effective as of 1 January 2009. This presentation has been applied in these condensed consolidated interim financial statements as of and for the six months period ended on 30 June 2009. Comparative information has been re-presented so that it also is in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings per share. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 `4. Estimates` In applying accounting policies, management has to exercise its judgement and make estimates in determining the amounts recognised in the financial statements. However, the nature of estimation means the actual outcome could differ from those estimates. During the six months ended 30 June 2009, the key estimates that management made were around credit risk, market values of financial instruments and property fair values. Accordingly, provisions for impairment have been made on 'financing arrangements' and 'available for sale assets' and fair value adjustments have been made on the property portfolio included in the 'assets of disposal group classified as held for sale' and 'financial assets designated as fair value' (outlined on the face of the income statement). 5. Financial risk management The main risk policies and procedures have been consistently applied as detailed in the latest annual report. Policies have been reviewed and enhanced where required with increased focus on large exposures, industry sectors and credit assessment. In addition the Pillar 3 Policy Statement has been issued (available on EIIB website) which discloses in detail the Bank's risk management objectives, policies and exposures. Various consultation papers and statements have been issued by the Financial Services Authority including remuneration policies and liquidity adequacy standards. These papers have been considered in detail and the Bank is expected to be compliant by the required implementation dates. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 6. Segmental information The Bank manages its activities primarily by class of business and the risks and returns are affected predominantly by differences in the products and services provided. The Bank has two areas of operations (as at 30 June 2009), namely Treasury and Capital Markets and Private Equity and Corporate Advisory. The Treasury and Capital Markets unit became fully active in April 2006 following FSA authorisation. The majority of the cost base and the assets and liabilities of the Bank have been deployed in support of that business unit. The Private Equity and Corporate Advisory unit was established during the second half of 2008. The division currently holds two investments, an interest in a diamond mine and an oil & gas development project. The Real Estate business has discontinued its operations (see note 14 for details). The following tables present revenue and profit information regarding the Group's operating segments for the six months ended 30 June 2009, 30 June 2008 and the full year ended 31 December 2008 respectively. `30 June 2009 Treasury Private Equity &` `& Capital Real Estate Corporate` `Markets (Discontinued) Advisory Total` `£ £ £ £` Revenue `Net income from external 2,389,306 - (106,866) 2,282,440` `customers` Results `Segment loss (10,646,068) **(7,409,649) (4,959,522) (23,015,239)` `Unallocated costs (152,826)` `Loss before tax (23,168,065)` `Segment assets 188,272,394 32,633,254 11,200,266 232,105,914` ** SEGMENT LOSS ON REAL ESTATE INCLUDES DIRECT COSTS, IMPAIRMENT LOSS ON PROPERTY PORTFOLIO AND OVERHEADS ALLOCATED BASED ON USAGE Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 `30 June 2008 Treasury &` `Capital` `Markets Real Estate Advisory Total` `£ £ £ £` Revenue `Net income from external 5,917,318 731,781 666,184 7,315,283` `customers` Results `Segment profit * 2,999,795 441,419 351,683 3,792,897` `Unallocated costs ** (987,355)` `Profit before tax 2,805,542` `Segment assets 290,700,676 55,665,562 806,805 347,173,043` * UNALLOCATED COSTS AS AT 30 JUNE 2008 REPRESENT THE SET-UP COST OF EIIB'S PRIVATE EQUITY AND CORPORATE ADVISORY DIVISION AND EXPENSES INCURRED ON CERTAIN OTHER ACTIVITIES WHICH WERE ALLOCATED TO THE RESPECTIVE DIVISIONS IN THE HALF YEAR TO 31 DECEMBER 2008 `31 December 2008 Treasury & Private Equity` `Capital Real Estate & Corporate` `Markets Advisory Total` `£ £ £ £` Revenue `Net income from external customers 12,103,966 1,137,555 - 13,241,521` Results `Segment profit/(loss) * 2,926,301 (15,704,317) (943,574) (13,721,590)` `Segment assets 232,940,220 39,551,255 5,167,365 277,658,840` CENTRALLY INCURRED COSTS ARE ALLOCATED ACCORDING TO USAGE Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 `7. Taxation` `6 months to 6 months to Year to` `30 Jun 2009 30 Jun 2008 31 Dec 2008` `£ £ £` Tax on profit on ordinary activities charged in the income statement `Current tax for the period - 679,191 1,079,166` Adjustments to prior period tax tax losses of 2008 carry (986,580) - - back against 2007 profits other prior year - - (145,236) adjustments `Current tax (income)/expense (986,580) 679,191 933,930` `Deferred tax for the period - 198,359 157,603` `Tax (credit)/charge in the (986,580) 877,550 1,091,533` income statement Reconciliation of the total tax charge `(Loss)/profit before tax (23,168,065) 2,805,542 (13,721,590)` (includes discontinued operations) `UK corporation tax at the (6,487,058) 813,607 (3,910,653)` standard rate (28% / 29% / 28.5%) `Expenses not deductible for 427,936 23,077 6,200,076` tax purposes `Income/expenses not subject to 2,091,655 (233,294) (1,052,655)` UK taxation `Deemed UK income - 280,630 -` `Adjustments to prior period (986,580) - (145,235)` tax `Effect of the tax losses 3,967,467 - -` carried forward * `Deferred tax recognised at 28% - (6,470) -` `Tax charge (986,580) 877,550 1,091,533` `Current tax for the period (986,580) 679,191 293,709` `Current tax related to items - (185,903) (1,108,785)` charged to equity `Prior year's tax receivable (785,471) (222) -` `Current tax (1,772,051) 493,066 (815,076)` (receivable)/payable in the balance sheet `Accelerated capital allowances 49,662 90,512 60,212` `Pension - 10,455 -` `Share awards 10,550 - -` `Deferred tax liability in the 60,212 100,967 60,212` balance sheet DEFERRED TAX ASSET ON TAX LOSSES CARRIED FORWARD OF &POUND;3.97M IS NOT RECOGNISED IN THESE FINANCIAL STATEMENTS GIVEN THE CURRENT LEVEL OF UNCERTAINTY SURROUNDING THE BANK'S FUTURE TAXABLE PROFITS. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 `8. Earnings per share` Earnings per share is calculated by dividing profit for the period by the weighted average number of shares outstanding during the period. There are currently no instruments in issue which would dilute earnings per share. `6 months to 30 Jun 6 months to 30 Jun Year ended 31 Dec 2008` 2009 2008 `Thousands thousands thousands` `Weighted average number of 1,825,563 1,825,563 1,825,563` shares for basic earnings per share 9. Assets and liabilities in foreign currency The Bank manages its exposure to foreign exchange rate fluctuations by matching assets with liabilities in the same currency as far as possible with similar maturities and the use of appropriate foreign exchange instruments. `30 Jun 2009 30 Jun 2008 31 Dec 2008` `£ £ £` `Denominated in sterling 147,736,476 215,013,680 165,177,648` `Denominated in currencies other 84,369,438 132,159,363 112,481,192` than sterling `Total assets 232,105,914 347,173,043 277,658,840` `Denominated in sterling 45,761,035 31,547,938 50,394,193` `Denominated in currencies other 40,947,843 133,242,414 63,907,359` than sterling `Total liabilities 86,708,878 164,790,352 114,301,552` Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 10. Acquisition of a subsidiary On 20 March 2009, as part of EIIB's Private Equity and Corporate Advisory activities, the Group obtained control of TriTech Capital Ltd (BVI) (and the special purpose entities incorporated as its subsidiaries, together the 'TriTech Capital Group'), a joint venture partner of an oil & gas development project in North America, via a share holder agreement, backed by an ownership of a share, that also enables the appointment of the majority of the directors to the TriTech Capital Group's Board. The investment was structured via a financing facility with rights to convert the facility into equity shares at any time as determined by EIIB. EIIB's interest in TriTech for consolidation purposes is determined based on its effective interest in the net assets of the investee. EIIB has plans to invest a further £4.1m to expand the development activities of this project. Identifiable assets and liabilities of TriTech Capital Group as at the date of acquisition: `£` `Cash & bank balances 810,512` `Oil & Gas assets 7,583,539` `Other assets 252,938` `Other liabilities (496,605)` `Net assets 8,150,384` Non controlling interest (13.1322%) (1,070,326) `Total net assets acquired 7,080,058` `Goodwill 954,077` `Consideration satisfied by cash 8,034,135` There were no significant differences between carrying values and fair values at the date of acquisition. Goodwill: Goodwill was recognised as a result of the acquisition as follows. `30 Jun 2009` `£` Total consideration transferred in respect of financing facility 8,034,135 and equity share (all settled in cash) `Less: value of identifiable net assets (7,080,058)` `Goodwill 954,077` Goodwill represents the potential value of the minimum estimated future cashflows expected to arise should the oil and gas development project prove to be successful. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 The effective interest of EIIB and that of the Non-controlling interest: The following table illustrates the effective interest of EIIB and that of the Non-controlling equity contributors based on the IAS 27 IG 6 basis for computing the 'effective interest' of this structured investment. Accordingly the financing facility is treated as an equity stake for consolidation purposes to calculate the effective non-controlling interest. `Date % acquired by EIIB EIIB Non-controlling` `cumulative % interest %` `Initial drawdown of facility 20 Mar 09 82.58% 82.58% 17.42%` `Second drawdown of facility 12 May 09 2.58% 85.16% 14.84%` `Third drawdown of facility 11 Jun 09 1.70% 86.87% 13.13%` Had the acquisition date been 1 January 2009 the EIIB Group would have made a post-tax loss of £15.5m on its continuing operations but the Group's total revenue would have been unchanged. The investment in the TriTech project is the second investment made by the business segment, 'Private Equity and Corporate Advisory' after its establishment in 2008. 11. Contingencies and commitments There were no third party contingent liabilities or commitments in existence as at the balance sheet date (2008: nil). Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 12. Plant and equipment `Leasehold Furniture & Fixtures Computer Hardware Total` `Improvements` `£ £ £ £` Cost `At 1 January 2009 291,789 162,614 164,781 619,184` `Additions - - 12,247 12,247` `At 30 June 2009 291,789 162,614 177,028 631,431` Depreciation `At 1 January 2009 115,690 72,125 138,262 326,077` `Charge for the period 29,179 16,262 19,459 64,900` `At 30 June 2009 144,869 88,387 157,721 390,977` Net Book Value `At 30 June 2009 146,920 74,227 19,307 240,454` `At 31 December 2008 176,099 90,489 26,519 293,107` 13. Goodwill and Intangible assets `Goodwill on Software` `Acquisition` `£ £` Cost `At 1 January 2009 - 1,436,343` `Acquisition 954,077 -` `At 30 June 2009 954,077 1,436,343` . Amortisation `At 1 January 2009 - 753,082` `Charge for the period - 143,634` `At 30 June 2009 - 896,716` Net Book Value `At 30 June 2009 954,077 539,627` `At 31 December 2008 - 683,261` Intangible assets - Software consists of computer licences and software development costs including capitalised staff costs. Goodwill arose due to the acquisition of a US based oil & gas development business that EIIB controls. See note 10 for details of the investment. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 14 Discontinued operation The Group had an interest in a special purpose vehicle, EIIB Pan-European Islamic Real Estate Fund ('the Fund') which holds a UK commercial real estate property portfolio through its investment in The House Limited ('THL'). The Fund was established and the property portfolio was acquired in 2007. Both the Funds and THL are registered in the Cayman Islands. The acquisition of the properties was financed by a financial institution on a murabaha basis ('third party murabaha facility') and the Bank via a junior funding facility. The fair value of the property portfolio has deteriorated to an extent that the junior funding has no value. THL was in breach of one of its covenants, 'third party murabaha facility to property value ratio'. EIIB has no legal obligations to fund the liabilities of THL. In February 2009 EIIB decided to discontinue its involvement in the property activities and in May 2009, launched an active program to dispose of the assets and liabilities. Accordingly the discontinued operation ('disposal group') is classified as held for sale and accounted for under IFRS 5 'Non-current assets held for sale'. The Bank's exposure is limited to its investment in the junior funding as the risk is capped by a bankruptcy remote structure. The loss accounted for in the income statement (£7.1m) for the period ended 30 June 2009 is expected to reverse once the disposal of the activity is completed. The fair value of the property portfolio has been impaired by £7.3m to £31.4m during the six months ended 30 June 2009. Assets and liabilities of the disposal group are as follows. `30 Jun 2009 30 Jun 2008 31 Dec 2008` `£ £ £` `Revenue 1,713,000 2,002,784 3,693,527` `Cost on third party murabaha (1,252,000) (1,271,003) (2,555,972)` financing `Overheads (203,755) 22,680 (423,006)` `Impairment losses (7,341,265) - (14,705,914)` `Net (loss)/profits for the period (7,084,020) 754,461 (13,991,365)` from discontinued operation `Balances with banks 31,000 880,852 319,672` `Fair value of the property 31,357,980 53,699,245 38,699,245` portfolio `Trade and other receivables 1,244,274 1,085,464 1,344,208` `Total assets 32,633,254 55,665,561 40,363,125` `Trade and other payables (1,055,548) (1,761,136) (1,160,694)` `Funding by third party murabaha (39,036,629) (39,580,748) (39,587,732)` financiers `Total liabilities (40,092,177) (41,341,884) (40,748,426)` On 13 August, the Board of EIIB announced that THL had requested its finance provider to appoint a Receiver in respect of its property portfolio. There is no recourse to EIIB in respect of the obligations of THL. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 `15 Other assets` `6 months to 30 Jun 6 months to 30 Jun Year ended 31 Dec 2008` 2009 2008 `£ £ £` `Other assets 1,145,148 4,531,184 1,975,217` `Capital work in progress of 7,211,443 - -` the oil & gas activity `8,356,591 4,531,184 1,975,217` Capital work in progress on oil and gas assets acquired by the Group via the acquisition and further investment in TriTech Capital Limited and its subsidiaries include both tangible and intangible oil & gas assets including leasehold costs. The total value is currently treated as capital work-in-progress. These will be subject to depreciation once the exploration work is completed to a stage where the production is started and impairment assessments will be carried out in future periods. 16 Related party disclosures Compensation of key management personnel `6 months to 30 Jun 6 months to 30 Jun 2008 Year ended 31 Dec 2008` 2009 `£ £ £` `Short-term employee benefits 369,450 308,271 755,076` and other payments `Termination benefits - 87,500 87,500` `Post-employment pension 25,780 14,375 27,475` `Share-based payments - 8,889 8,889` `395,230 419,035 878,940` Directors' interests in related party transactions The Bank enters into transactions, arrangements and agreements involving Directors and their related concerns in the ordinary course of business, all such business is conducted on an arms-length basis. Directors have interests in the following companies with whom EIIB does business: Adnan Ahmed Yousif is President and Chief Executive of Albaraka Banking Group BSC ('ABB'); Subhi Benkhadra is Chief Executive Officer of Esterad Investment Company. The total returns to such companies were £32,564 included under Returns to financial institutions and customers. As at 30 June 2009 the Bank had no receivables from related parties As at 30 June 2009 the Bank had liabilities to Directors and related parties as follows: UNDER MURABAHA AGREEMENTS WITH ALBARAKA BANKING GROUP &POUND; 3,036,396 A WAKALA ACCEPTANCE FROM MR ADNAN AHMED YOUSIF &POUND; 1,385,782 Murabaha and Wakala are Islamic financing arrangements. Notes to the condensed consolidated interim financial statements (unaudited) At 30 June 2009 17 Subsequent events In July 2009 the Bank announced that it had received a number of approaches from third parties who were interested in a business combination with the Group. Following a consultation period with these parties, the Board concluded that the approaches did not demonstrate compelling strategic logic, nor did they fairly reflect the value of EIIB Group, consequently the discussions were terminated. In August 2009, John Weguelin announced that he had decided to stand down as Chief Executive Officer. Keith McLeod has been appointed as Interim Chief Executive Officer. Following the provision taken at the end of 2008, in relation to the portfolio of investment properties (acquired as part of the aborted launch of the EIIB Pan-European Islamic Real Estate Fund) and the anticipated further decline in the UK Commercial Property market, the Bank commenced discussions with the finance provider to find a buyer for these properties by the end of June 2009. Unfortunately, the finance provider was unsuccessful in reaching agreement with a potential buyer therefore The House Limited ("THL"), which is a subsidiary of the EIIB Pan-European Islamic Real Estate Fund, requested the appointment of a Receiver in respect of all property of THL. The appointment was made effective from 12 August 2009, there is no recourse to EIIB in respect of the obligations of THL. At 30 June 2009, the property portfolio was valued at £31.4m, we have made a fair value adjustment of £7.3m in respect of this portfolio. The loss accounted for in the income statement (£7.1m) for the period ended 30 June 2009 is expected to reverse once the disposal of the activity is completed. 18 Reconciliation of amounts referred in Chairman's statement `6 months to 30 Jun 6 months to 30 Jun Year ended 31 Dec` 2009 2008 2008 `£ £ £` 18.1 Operating `(loss)/profit on` `continued operations` `before tax, fair` `value losses and` `impairments` `Operating (16,084,045) 2,051,081 269,775` `(loss)/profit before` `tax on continued` `operations` `Adjusted for:` `Fair value 3,169,674 - -` `adjustment on assets` `designated as fair` `value through profit` `& loss` `Provision for 4,668,459 - 3,750,000` `impairment of` `financing` `arrangements` `Provision for 6,100,188 - -` `impairment of` `available for sale` `securities` `Operating (2,145,724) 2,051,081 4,019,775` `(loss)/profit on` `continued operations` `before tax, fair` `value losses and` `impairments` 18.2 Core operating `expenses` `Total operating (18,366,485) (4,532,421) (11,834,191)` `expenses` `Adjusted for:` `Fair value loss on 3,169,674 - -` `assets designated as` `fair value through` `profit & loss` `Provision for 4,668,459 - 3,750,000` `impairment of` `financing` `arrangements` `Provision for 6,100,188 - -` `impairment of` `available for sale` `securities` `Operating expenses 279,310 - -` `of oil & gas` `activity` `Core operating (4,148,854) (4,532,421) (8,084,191)` `expenses` `Registered No. 5328847` Company information Directors Adnan Ahmed Yousif Chairman Shabir Randeree Deputy Chairman Aabed Al Zeera George Morton Mohammed Al Sarhan Senior Independent Director Salman Abbasi Subhi Benkhadra Yusef Abu Khadra Zaher Al Ajjawi Keith McLeod Finance Director and Interim Chief Executive Officer Secretary M A Mohaimin Chowdhury `Registered office Registrars` `131 Finsbury Pavement Capita IRG plc` `London EC2A 1NT The Registry` `34 Beckenham Road` `Auditors Beckenham` `KPMG Audit Plc Kent BR3 4TU` 1 Canada Square `London E14 5AG Nominated advisor and broker` `Evolution Securities Ltd` `Correspondent bankers 100 Wood Street` `HSBC Bank Plc London EC2V 7AN` Level 37, 8 Canada Square London E14 5HQ Bahrain Islamic Bank P.O. Box 5240 Manama, Kingdom of Bahrain This information is provided by RNS The company news service from the London Stock Exchange END IR GUUBABUPBUCG More

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