Notes to the Consolidated Financial Statements
(Thousands of US dollars)
58
Dar Al-Maal Al-Islami Trust
Annual Report 2012
16. Intangible assets
(continued)
17. Non-current assets
and liabilities and
discontinued operations
held for sale
The carrying amount of goodwill has been allocated to cash-generating units
as follows:
2012
2011
Ithmaar Bank B.S.C.
338,435
339,515
Islamic Investment Company
of the Gulf (Bahamas) Limited
32,186
32,186
370,621
371,701
On 31 March 2010, DMI acquired an additional 400 million shares of Ithmaar
Bank B.S.C. by participation in a rights issue at a price of $0.25 per share
for a total consideration of $100 million. As a result of this transaction, DMI
owned 52.6% of the outstanding shares of Ithmaar Bank B.S.C. converting it
from an associate to a subsidiary, which resulted in the full consolidation of
Ithmaar’s income statement and balance sheet at 31 December 2010. The step
acquisition from the associated company to the subsidiary company resulted in
a net gain of $334.9 million, which was included in the consolidated statement
of income. This amount comprised a mark up to fair value of the associated
company shareholding of 44.9%. In assessing the above gain, DMI relied upon
an independent valuation commissioned from an international firm of chartered
accountants who established a value using various valuation methodologies
comprising the average of a peer group market analysis of banks listed on
the Bahrain Bourse and a discounted cash flow adjusted for an estimated
control premium but which did not include a reference to the market price of
Ithmaar Bank’s shares at the relevant time. Both the independent valuer and
DMI believed that the share price quoted on the Bahrain Bourse did not reflect
the fair value of the business and they also did not consider that the historical
turnover of the shares constituted an active market. As a result, the share price
was disregarded in the valuation.
Non-current assets and liabilities held for sale
At 31 December 2012 non-current assets held for sale included vacant
properties comprising land and buildings in the amount of $26.9 million which
Faysal Bank Limited management intends to dispose of in the future and the
carrying amount will be recovered principally through a sale transaction rather
than continuing use.
On 1 October 2010, the Board of Directors of Faysal Management Services
(Private) Limited (FMSL), a subsidiary of Faysal Bank Limited in which it
has 60% shareholding, decided to voluntarily wind up the company and
accordingly, resolved to initiate proceedings of winding up by the members of
FMSL under the Companies Ordinance, 1984. In view of this, the net assets of
FMSL in the amount of $2.1 million have been classified as “non-current assets
held for sale” in the consolidated financial statements and valued at lower of cost
and fair value less cost to sell. At 31 December 2012, the assets amounting to
$2.1 million remained classified as non-current assets held for sale.
In 2012 an official was appointed by the High Court to distribute realised cash
assets to shareholders of FMSL. This distribution took place in February 2013.
The proceedings are at an advanced stage and are expected to be completed
during 2013.
