ANNUAL REPORT 2015 - BIBF · Mr. Mahomed Akoob Managing Director, Hannover Retakaful Bsc 9. Mr. Mazin Manna Chief Executive Officer, Citibank 10. Mr. Redha Ahmed Hubail Assistant

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ANNUAL REPORT 2015

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CONTENTS

5 About BIBF

8 Chairman’s Statement

10 Board of Directors

12 Vision & Mission

13 Values

14 Director’s Statement

16 Management Team

18 Centres’ Reports

ANNUAL REPORT 2015

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His Majesty,King Hamad bin Isa Al Khalifa

The King of the Kingdom of Bahrain

His Royal Highness, Prince Salman bin Hamad Al Khalifa

Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister of the Kingdom of Bahrain

His Royal Highness, Prince Khalifa bin Salman Al Khalifa

The Prime Minister of the Kingdom of Bahrain

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BIBF is a multilingual, multicultural organisation with world class faculty, most of whom hold internationally recognised professional and academic qualifications, along with extensive market experience.

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Bahrain Institute of Banking and Finance (BIBF) has been a

cornerstone of the Banking and Financial Services Sector in the

Kingdom since its inception in 1981.

The growing levels of Bahrainisation, which are at 61%, and the

sustained growth patterns of the financial services industry, in

particular, are clear indications of the success and the commitment to

the human capital development of BIBF spanning over the past 34

years.

Having equipped over 250,000 students with necessary knowledge

and skills from over 34 countries, the BIBF has had an unparalleled

impact on the tall stature of the Kingdom’s excellence in the human

capital development.

BIBF’s success story has not only raised the visibility of the Institute

but also impacted positively on the overall stature of the financial

services industry in Bahrain and seen as a major driving factor behind

the excellence of Bahraini workforce both in the public and private

sectors.

Our international network of globally recognised partners, our creation

of some of the world’s first curriculum in Islamic Finance and Takaful,

the breadth and depth of our content, and commitment to career long

learning are few but important milestones towards the growth and

development of Bahrain.

This investment, of more than a generation, in content, curriculum

development, unique intellectual property, and staff development are

unparalleled across the GCC market. The BIBF legacy continues to be

distinctive in the world and one of the greatest assets that takes

Bahrain to new levels of excellence in the future.

About BIBF

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BIBF plays a vital role in the training and development of human capital in the Middle East and North Africa.

Our commitment to excellence has strengthened our position as the leading educational provider across all major business disciplines.

We serve as a partner to numerous world-class institutions; delivering thought leadership, and training in the areas of Banking, Accounting & Finance, Supply Chain Management, English & Business Communication, Human Resources, Information Technology, Insurance, Interpersonal Skills, Islamic Finance, Leadership & Management, Marketing, Sales & PR, and Project Management.

BIBF’s Global Reach

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Chairman’s Statement

As the Kingdom of Bahrain reaps the fruits of wider economic

diversification, the Bahrain Institute of Banking and Finance

(BIBF) continues to play a crucial role in achieving national

goals by broadening the horizon for human resources

development (HRD).

The Kingdom of Bahrain is home to over 400 banking and

financial institutions and representative offices, and BIBF

remains a catalyst to economic development, and towards

achieving the goals set in the National economic vision by

establishing Bahrain as a regional source for qualified human

capital.

Bahrain retains its top position in the development of human

capital with the services sector contributing significantly to the

GDP and a skilled workforce continuing to serve as a vital

pillar for sustainable growth. While the success of the industry

is attributed to a wide range of factors, impact of a world class

learning facility like BIBF cannot be undermined.

Human capital refers to the collective value of the organisation’s

intellectual capital, and includes competencies, knowledge

and skills. This capital serves as the organisation’s constantly

renewable source of creativity and innovation, and provides it

with the crucial ability to adapt to change. Since its inception

in 1981, BIBF has played a major role in reshaping and

developing the banking and financial landscape of the

Kingdom of Bahrain, and has provided training to over

250,000 students from across 34 countries.

The Kingdom of Bahrain introduced labour reforms in 2004,

and has invested heavily in local human capital development.

Today, Bahrainis are the employees of choice within the

banking and financial industry with a localisation rate of over

60%, and BIBF continues to play an integral role in capacity

building for the Bahraini workforce and help in bridging the

skills gap.

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BIBF remains pivotal in broadening the Human Resources Development horizon

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At the end of the 2015, the banking and financial sector

accounted for a major share of jobs for Bahrainis in terms of

employment and the scope for job opportunities, as the figures

suggest, will be even brighter in the future.

The overall statistics of the Institute remain encouraging, and

the structural changes and continuous curricula reviews will

further propel the growth of BIBF by impacting even more

positively on the HRD spectrum and on the national economy.

The Institute is honoured to have been encouraged by the

support and vision of His Majesty King Hamad bin Isa Al-

Khalifa, His Royal Highness the Prime Minister Prince Khalifa

bin Salman Al-Khalifa, and His Royal Highness Prince Salman

bin Hamad Al Khalifa, Crown Prince, Deputy Supreme

Commander and First Deputy Prime Minister. I thank them for

their invaluable patronage and guidance.

At the end, I would like to thank BIBF staff for their dedication

and commitment towards achieving the overall objectives of

the institute as their contribution helps the BIBF to lead

excellence in the training and development field. Also, I would

like to thank my colleagues in the Board of Directors as well as

the members of financial sector organisations as their support

help us shape the future of the kingdom of Bahrain.

H.E. Rasheed Mohammed Al MarajChairman of the Specific Council for Vocational

Training (Banking Sector)

A skilled workforce is the key to significant and sustainable growth, and the accessibility to superior learning cannot be undermined.

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Board of Directors

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1. H.E. Rasheed Mohammed Al Maraj

Governor, Central Bank of Bahrain

2. Mr. Murad Ali Murad

Chairman, Bank of Bahrain & Kuwait

3. Mr. Adnan Yousif

Chief Executive Officer, Al Baraka Banking Group

4. Mr. Yassir Al Baharna

Chief Executive Officer, Arab Insurance Group

5. Mr. Jean-Christophe Durand

Head of Territory; BNP Paribas

6. Mr. Ashraf Bseisu

Group Chief Executive Officer Solidarity Group

7. Mr. Hassan Jarrar

Chief Executive Officer, HSBC

8. Mr. Mahomed Akoob

Managing Director, Hannover Retakaful Bsc

9. Mr. Mazin Manna

Chief Executive Officer, Citibank

10. Mr. Redha Ahmed Hubail

Assistant Undersecretary for Training,

Ministry of Labour

11. Mr. Khalil Zainal

Chairman, Bankers Union

12. Ms Huda Radhi

Director, Daskalides Bahrain

13. Mr. Yahya Almukharraq

Director, Insurance Union Chairman of Internal Audit Committee,

The General Federation of Bahrain Trade Unions

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BIBF is the institute of choice for the development of business professionals.

Leadership through providing ongoing education for business professionals.

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PrincipledWe are all responsible for open, honest and direct two way communication. We tell it like it is, give and receive honest feedback and listen carefully. All our interactions have an outcomes focus and we operate with the utmost integrity

in our interaction with business, staff and other stakeholders.

Respect builds successAt BIBF we engage and support each other and capitalise on the expertise and talents within the organisation. Everyone makes a significant contribution and

delivers on the communication we make.

Improve and innovateTo grow with business, we must anticipate and lead change. We switch in to new ideas and possibilities and look for improvements in all activities across our

business.

Deliver to succeed togetherWe succeed when our stakeholders succeed. We develop and deliver the highest value and quality tools and solutions to equip business and other stakeholders for personal and business success. We can only achieve this though partnering

together across the business and seeking successful outcomes.

Expect the BestWe set our standards high and expect the best results across all operations. We recruit and develop the best and strive to be the best in all our markets. We set stretch goals and celebrate our achievements.

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2015 was a truly paradigm shifting year for the BIBF. Changes to the overall governance structure as well as rapidly changing economic realities both regionally and globally had unprecedented impact on our infrastructure and commercial results. At the same time the need for training continues to surge and BIBF is committed to enhancing participants’ capacity through innovative training solutions, bridging skill gaps, and investing strategically in human capital development.

Despite 2015 being a challenging year for the global economy The Bahrain Institute of Banking and Finance (BIBF) continues to demonstrate strength through sustained growth in number of applications, courses, students trained, and was able to close 2015 on a positive note by introducing a number of new courses and specialisations across various disciplines including Banking, Leadership, Project Management, and Islamic Finance.

Thanks to the tremendous leadership of our Management Team, our centres continue to be leaders in their respective fields. Our pass rates, prestigious global partnerships, and innovative learning techniques demonstrate why the BIBF continues to be the institute of choice for training and development in Bahrain.

Central to our mission is the work we do for the banking industry and our support of the CBB. To that end The Banking Centre has revised much of its curriculum to incorporate the latest industry developments as well as map to the CBB Rulebook in its core areas of focus: Compliance, Risk, AML/CFT, Credit, Treasury, Capital Markets, Trade Finance, Corporate, and Retail Banking. We have also expanded our advanced simulation training in the Dealing Room covering areas of equity trading, currency trading, fixed income & commodity trading coupled with portfolio management and risk management.

Centred around the idea that accounting is a language that needs to be understood by today’s business professionals The Centre for Accounting and Finance has a broad range of courses that meet cross industry

requirements. With renewed ACCA Platinum status, greater industry reach, and pass rates well above the global averages this Centre has renewed itself as a core to the BIBF infrastructure.

Islamic Finance is certainly one of the most exciting and dynamic fields in financial services today. With growth figures far exceeding that of conventional products there is a huge demand for both investment vehicles as well as qualified and trained professionals. The BIBF Centre for Islamic Finance is working to address both of these issues by offering new products focusing on Halal Economy, executive development for Islamic professionals, and expanded courses on the CBB rule book among many others. We have also signed a 4 year exclusive contract with AAOIFI to bring their standards into an online training platform that will continue to raise the visibility of Bahrain as an Islamic Finance hub.

With 260 CII credits awarded to our in-house courses our Insurance Centre is unmatched in the Region for accreditation and continues to train large numbers of industry professionals and senior executives.

As markets mature leadership and management become strategic levers for industries and companies growth. The results in our Leadership and Management Centre truly indicate support this, and as such is one of the largest centres within the BIBF. Spanning a diverse industry base L&M manages over 35% of our total registrations and 63% of total courses delivered. There market penetration is a testament to their relevance and quality as well as bringing diverse experiences into the classroom for both the learners and faculty.

Directors’s Statement

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The Centre for Academic Studies received a record number of applications in 2015 across all programmes including its flagship International Foundation Programme (IFP), and Master of Science Degree in Human Resource Management (MSHR) offered in partnership with US-based DePaul University. BIBF also recorded excellent results in programmes it offers with renowned international awarding bodies– for instance, approximately 93% of students who enrolled in the Banking and Finance Undergraduate Diploma successfully completed the programme with exceptional averages of over 75% before proceeding to the final year of their BSc. degree at the Bangor University in the UK.

Enough cannot be said about the hard work and dedication of the staff to accomplish all of this while navigating many changes. The elimination of the Specific Council Infrastructure, removal of the levy, government budget cuts, general slowdown in the training industry, and many other challenges represent a confluence of events that would be insurmountable to a less able and motivated team. I thank them for their continued hard work and dedication.

Having said that, these issues did impact our FY2015 results and it is important to distinguish certain extraordinary below the line items unique to this period. In accordance with the elimination of the Specific Council infrastructure, and in keeping with our External Auditors recommendations, we have implemented a full provision against old outstanding levy receivables. This demonstrated an impact of BD249,116. Also given the larger macroeconomic factors,

and the dramatic changes in market conditions over the 6 years of this project, we have chosen to revise the scope and scale of our new building. This shift means we have also written off BD1.216M for WIP related to this project. Once these adjustments are taken the BIBF is still showing profits of BD343,727 which is in keeping with recent years and 2015 targets. We will continue to focus our strategy on the financial services sector in Bahrain while creatively growing our revenue and controlling costs.

I would like to take this opportunity to thank the Council, specifically His Excellency the Chairman, for their continued support and dedication to the BIBF

Solveig NicklosDirector, BIBF

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Dr. Ahmed Al Shaikh

Kadri Rizk

Ahmed Naeemi

Amani Al Buflasa

Meaad Al AwadhiDeputy Director

Head - Leadership & Management

Head - Operations, Project & IT

Acting Head -Marketing & Corporate Communications

Head - Human Resources

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Jaideep RanaHead - Finance

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Nawal Ali SaifHead- Registrar

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Keith SharpHead - Academics & Assessment

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Mujtaba Khalid Head - Islamic Finance Centre

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Burhanu Deen Jayah Head - Banking, Accounting & Finance, Research and Advisory

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Manal MashkoorHead - Insurance

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The Management Team

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The Banking Centre: reinforces Bahrain’s position as the banking hub

The Banking Centre at BIBF plays a pivotal role in the development of human capital for the financial services sector in Bahrain and across the wider region. It prides itself by maintaining a well-trained and quality workforce to sustain the growth of the banking and financial services industry in the island.

In 2015, the Banking Centre revised many of its programmes to incorporate latest developments in the industry in line with the needs of the banking sector staff. It continues to improve its curriculum to bring in much needed change in the core subject areas of banking, in consultation with the regulators and practitioners to reshape the human capital towards a better institutional governance framework.

The Centre’s keys areas of training focuses on; Compliance, Risk, AML/CFT, Credit, Treasury, Capital Markets, Trade Finance, Corporate Banking and Retail Banking. In 2015 the Banking Centre introduced its Dealing room facility, the first of its kind in the MENA region, to offer advanced simulation training for the Banking industry with specialized simulation courses, offering practical training on equity trading, currency trading, fixed income and commodity trading coupled with portfolio management and risk management. There are plans to expand these offerings to bring new simulation programmes on, Bank management (with BASEL III), Asset Liability Management (ALM) and Insurance business management.

The Centre offerings is divided into four strategic buckets namely, Standard courses, professional qualifications, Customised training offerings and Masterclasses delivered by subject matter experts from around the world to cover current topics in banking and finance.

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The standard courses cover a comprehensive portfolio in all banking topics including the Central Bank of Bahrain (CBB) Rule Book. There are over 85 offerings the largest number within BIBF, ranging from fundamental to advanced levels. The Centre for Banking currently offers over 27 professional designations in partnership with leading international professional bodies. The exponential growth in professional qualifications offered are mainly attributable to the emphasis by the Central Bank requiring staff in all control positions to hold recommended professional certificates. Tamkeen funding is available towards professional certification offerings has contributed positively towards this growth as well.

In line with the rapidly changing financial industry needs during 2015 the Banking Centre has remained a premier provider of customised training and development solutions to its clients, with a primary focus on performance based learning and innovation. This is in keeping with BIBFs vision to be at the forefront of training and development by offering, Quality and Value to the banking industry.

The Centre is committed to bringing ‘Thought Leadership’ to the financial services industry by staying ahead of new trends globally and partners with subject matter experts to organize Masterclasses to educate industry leaders in innovative concepts to manage a dynamic industry.

The Banking Centre serves as a catalyst for the development of the banking sector and continues to play a key role in achieving Bahrain’s Vision 2030 objectives especially with regard to human resources development. In order to strengthen the Kingdom’s activity in human resources development, BIBF continues to be a crucial player not only identifying the skills gap but also in providing high quality training to meet the demands of the labour market.

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BIBF remains crucial for growth of the insurance industry

The Centre for Insurance at BIBF has supplied the regional insurance industry with skilled, qualified human capital since its establishment in 1992. In the past two decades, BIBF has trained a large number of professionals who have been absorbed by the market, many of whom are in senior and management level positions.

BIBF enjoys a close working relationship with the industry, and in partnership with the world’s leading professional awarding bodies is able to the provide the sector with relevant, up-to-date, internationally recognised qualifications that are customised to meet the specific needs of local and regional insurers.

The region’s insurance sector growth will continue to see the flow of investments in construction, infrastructure, and petroleum industry related projects, as the GCC is set to invest approximately

US $900 billion in 1,600 new projects over the next decade. Government support of these projects will also mean that an increasing number of insurance products will be made compulsory.

With the projection of a robust compound annual growth rate (CAGR) of 18.70%, the regional insurance industry is set to reach

US$ 62.1 billion by 2020. BIBF is uniquely positioned to cater to this growth and help ensure that the market is well equipped with qualified individuals who are technically trained as per local market practices and requirements.

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BIBF offers the market a diversified set of training programmes that caters to different segments of the regional insurance industry. The offerings are divided into the Diploma Programme which offers classroom-based training solutions, and the Professional Insurance Certificate and Diploma (PIC/PID) that are attainable via distance-learning. All classroom-based training solutions are offered in both English and Arabic.

The Centre for Insurance offers training and development opportunities for individuals as well as corporates, and enriches its locally developed programmes with recognition of prior learning from the Chartered Insurance Institute (CII) - the world’s leading provider of professional insurance education. BIBF currently has unmatched regional accreditation of 260 CII credits awarded to its in-house courses.

BIBF also has a strategic partnership with the U.S.-based Life Management Association (LOMA), the Institutes, and America’s Health Insurance Plans (AHIP), and is also a member of the Institute of Global Insurance Education (IGIE).

The Centre for Insurance is renowned for its calibre and professional reputation, due in part to a robust team of qualified, experienced market practitioners who provide an enriched classroom experience, balancing theory and practical application with real-life cases and site visits.

BIBF has incomparable regional spread with its training solutions serving the insurance market in over fourteen countries.

In 2015 alone, over 650 participants (primarily from Bahrain) attended BIBF’s in-house training programmes within its intermediate, advanced and management diplomas. In comparison, over 700 participants from Jordan, Sudan, Egypt, Yemen, Syria, Iraq, Libya and the GCC completed BIBF’s distance learning qualifications between January and December 2015.

BIBF’s role is crucial for the development and expansion of the insurance sector as significant further growth across the GCC will be driven by the region’s high economic and fiscal strength, despite slower than expected oil price recovery.

The Centre for Insurance conducted over 29 bespoke programmes for 9 regional clients and continues to work with its stakeholders to identify training needs and bridge skill gaps while remaining committed to improving the level of expertise and professionalism of the industry.

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BIBF’s Islamic Finance Centre was established in 1997 to assist in fostering the growth of the Islamic banking community in the Middle East and beyond, and has a truly global footprint conducting training in more than 20 countries worldwide.

With experienced faculty of academics and practitioners, the Islamic Finance centre has trained over 10,000 professionals and students since its inception. And is the only international training institute that is partnered exclusively with both AAOIFI and IFSB.

2015/2016 Highlights • Signing of a 4 year globally exclusive agreement with AAOIFI to bring all AAOIFI Standards onto an online eLearning Platform

• The Advanced Diploma in Islamic Finance (ADIF) progression route into the University of Bolton MBA Islamic Finance, whereby, ADIF graduates need to spend only 1 month at the University of Bolton campus and complete a thesis to be awarded the MBA.

• Launch of the Chartered Institute of Securities and Investments (CISI) - BIBF “Fundamentals of Islamic Banking and Finance Certificate” in English and Arabic.

• Launch of the first of its kind 2-day Halal Economy Course titled “Convergence of the Halal Market Economy and Islamic Capital” together with New York based advisory firm, DinarStandard.

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• Delivery of the 2nd BIBF - IFSB Islamic Finance Executive Program themed on Islamic Capital Markets.

• MOU signing with the International Islamic Centre for Reconciliation and Arbitration (IICRA) based in Dubai to deliver the first of its kind “Professional Certificate in Arbitration and Legal Analysis of Islamic Financial Contracts

• Delivery of specialized course on the CBB Rule Book Volume II for Islamic Banking – which looks at the regulatory side of Islamic financial transactions.

• Delivery of 18 specialized external offering courses and 21 specialized public offering courses, in 2015, which included the AAOIFI Shariah Standards 3-day course delivered by Sheikh Nizam Yaqubi and Sheikh Esam Eshaq, 2 MSc in Islamic Finance courses for the University of Bangor in the UK, and in-house courses at NCB Jeddah and CBFS Oman.

• MOU Signing with Ibdar Bank on the delivery of a newly established Islamic Finance for Investment Bankers Program.

Compared to other financial models, the unique aspect of Islamic finance as a faith-based system is that it is fundamentally based upon the principles of fairness, justice and equity. Central to Islamic banking and finance is an understanding of the importance of risk sharing as part of raising capital and the avoidance of Riba (usury) and Gharar (excessive risk or uncertainty).

According to the State of the Global Islamic Economy Report 2015/16 by Thomson Reuters, it was estimated that Islamic finance assets globally reached US$1.81 trillion in 2014, showing double digit growth over the past decade. Most of these Islamic finance assets (74 percent) are held by Islamic banks and most of the assets are located in Muslim-majority countries. The report also states that Islamic financial assets are expected to average double digit growth over the next 5 years, Islamic banking and Sukuks (Islamic bonds) issuance showing the most promise. According to the FAA, an independent quality assurance and accreditation body for the financial services industry that is supported by Bank Negara Malaysia (BNM) and the Securities Commission Malaysia, global Shariah compliant assets are expected to expand to US$3 trillion in a few years.

The size of the Islamic Finance market around the world is 1.5 trillion dollars, so this rapid growth in Islamic Finance is pushing up demand for more experts in the field. In the future, the industry will require more experts that are specialised in areas such as Shariah compliance, risk management, governance, and audit among others.

it is essential for the Islamic Finance industry to keep up with the growing demand for its Islamic financial services and investments, where it is essential for market players to provide value and opportunity for growth to current and future investors.

Islamic Finance Industry Snapshot

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Centre for Accounting & IT achieves excellence in 2015

In line with its commitment to providing educational skills of the highest standard, the Centre for Accounting at BIBF has provided unparalleled quality courses to 2,746 students in 2015.

Centred around the concept that accounting is a language that needs to be understood by today’s business owners and professionals, the Centre for Accounting offers a wide range of professional courses such as ACCA, AAT, CPA, CMA, CIA, FIA, ACCA Dip IFRS. These courses have shown great success with 4/4 frowth of 33% compared to 2014, wherein its revenue has also increased by 88% as compared to last year.

The Centre for Accounting and IT has been in existence as an independent entity since January 2008 and delivers courses in accounting, finance and information technology. The Centre reviewed its strategies and remained current by introducing necessary changes ranging from curricula structure to delivery of courses.

The Centre has shown great achievement in terms of meeting target revenue. In 2015, the overall growth in the Centre’s total revenue was 43%. The major contributor to this success was the significant revenue growth of 70% from external offerings as well as 81%from special offerings.

During 2015, the Centre has offered 248 courses and has seen a growth of 33% in professional offerings and maintained the same level of public offerings compared to 2014.

2,746 students have benefitted from the Centre and its offerings in 2015 compared to the 2,969 students in 2014 students which is demonstrates an 8% decrease. This decline was due to a decrease in special and professional offerings. Despite the decline, courses have contributed to the growth of revenue by 81% and 30% respectively.With regards to ACCA results, the Centre had another successful exam session with ACCA in December 2015, where the BIBF overall pass rate was 56% exceeding the overall global pass rate of 44%, with a P7- Advanced Audit receiving a 100% pass rate, a tremendous achievement since it stands as a final level paper of ACCA.

The Accounting Centre was successful in retaining the ACCA Platinum status for the 2016/17 year. The Platinum status with ACCA is the highest level of accreditation an institution can have to authenticate its training provision at the top among the best providers globally. It demands that an institution exceed global pass rates in all papers offered (12 papers in total) and maintain a high standard of service to students.

The initial Platinum status was given to BIBF in the 2014/2015 year, within one year of operation, a rare feat to achieve as it takes 2-3 years.

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Training materials are regularly updated and developed as per the changing requirements in market conditions as well as updates in accounting standards.

The Centre has devised a regular performance review and monitoring system which necessitates the head of the departments to focus on the performance of the faculty and discuss any improvements required based on the course evaluations.

In some courses, pre-assessments are conducted to evaluate students’ level as to provide the required training to meet the learning objectives.

It is a central policy to deliver the programmes by utilising multimedia technology in class discussions. Examples of this use include supported videos, audiovisuals and other information to drive discourse forward. Interactive sessions are made possible as to allow each participant the opportunity to provide their knowledge and experience in a group setting. Industry experts are on occasion invited to provide useful insight to participants.

We have kept our ear to the ground and have received very encouraging feedback on the multilevel efforts being made to strengthen programme content, delivery, faculty strength, depth and the overall vision that we carry for our role as educators and trainers. We have implemented a new marketing and business development strategy and identified areas where we could do more than we have done in the past such as marketing of these programmes to companies in the private sector.

To keep abreast with the dynamic nature of Accounting as a subject, the Centre has outlined an Action Plan for 2016 wherein the Centre will run a course with a minimum number of 4-7 candidates enrolled where applicable. The Centre in 2016 will further extend its reach and attract new clients to accounting for all offerings and increase the viability of each course, enhance the Centre’s contribution to the offerings of other Centres, better delineate the offerings from each Centre for quality purposes: Bangor, insurance leadership and Islamic finance.

The Centre will review the prerequisite of all public offerings wherein course material will be updated and reviewed for all offerings. The Centre has targeted the full use and implementation of the BIBF portal and will aim to complete mapping of all its courses and CIA Arabic to be offered by September 2016.

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The year 2015 was a time for evaluation in the Centre for Leadership and Management. The Centre reviewed a wide array of its programmes to keep abreast with the significant technological advancements and societal challenges associated the increase of the millennial generation impacting the dynamics of work in the business world. This resulted in the updating of many courses to ensure a higher level of customer focus to meet the changing business environments of both levy and non-levy clients.

The most significant contributors to the success of the Centre were the Professional Qualifications followed by the various customised short courses.

The L&M Centre was the major contributor to the training provision in BIBF, (9,000 from13,867) contributing to 35% of the total learners enrolled, and 63% of the total number of courses delivered (693 from 1,039).

Most Professional Qualifications enrollment exceeded targets. Training sessions were interactive and participants brought in real-life work issues for group discussions by their classmates. Both employers and learners have shown increased interest in adding value to academic qualifications and industry experience with professional qualifications.

The Chartered Institute of Personnel and Development (CIPD), which addresses the HR learning and development needs of the market, continued to contribute significantly towards the Centre’s success. 56 students were enrolled at Level 3 and 30 learners at Level 5. 70 learners successfully graduated from these levels.

Selected Public Courses were revamped during 2015. Learning outcomes were modified, more current case studies were introduced, and high definition movie clips were sourced in order to meet learner needs and expectations, as well as 18 new courses were introduced in HR, Leadership, Management and Soft Skills. Relevant and more targetted formative and summative assessments continued to be an integral aspect of all public offerings and new learning approaches were implemented by instructors in delivering their courses.

In the area of Executive Education, the Leadership and Management Centre enrolled the fifth batch of Darden Leadership Programme. This programme focuses on helping managers develop a broad range of leadership and management capabilities while beginning to build a strategic business perspective.

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BIBF also offers the Chartered Institute of Marketing (CIM), Communication, Advertising and Marketing (CAM) and Chartered Institute of Public Relations (CIPR) qualifications to address the learning and development needs of employees in Marketing and Public Relations. CIM qualifications are offered at Levels 4 (Certificate) and 6 (Diploma). In CIM, learners achieved in excess of 80% success (this is much higher than the international pass rates). BIBF also received 2 letters of commendation for achieving 100% pass rates in Marketing and Integrated Communications. CAM Level 4 Diploma in Digital Marketing and CIPR Level 5 were more recent additions, which registered considerable interest among digital and public relations personnel.

Management and Leadership learning needs were successfully addressed through the continuing success of the highly reputed Chartered Management Institute (CMI) and Institute of Leadership and Management (ILM) qualifications. 110 learners were enrolled in 2015 for CMI. ILM also saw an increase in learner registrations. The qualifications allow for gradual learning and progress in various areas of leadership and management across multiple levels.

The English Language qualifications also continued to be successful in 2015. - International Diploma in Business English (IDBE) had 214 registered candidates in the 3 terms, out of which 169 candidates completed the programme. - Advanced International Diploma in Business English (AIDBE) had 28 candidates in 2 terms, out of which 13 candidates completed the programme. - International English Language Tests (IELTS) were

conducted for the Bangor candidates – 60 candidates. - An English for Specific Purpose (Secretaries) programme was also successfully launched. -The Pearson External Verification review awarded BIBF outstanding results for 2015.

The Assessment Centre conducted Occupational tests and competency based interviews in 2015. More than 1700 candidates were assessed in 2500+ instances, utilising over 50 different assessment tools. Services included Recruitment assessment, TNA, Succession Planning and Graduate assessments. The Centre offers tests from SHL, TalentQ, Morrisby, Saville, A&DC, etc.

70 participants were selected to join the candidacy programme for the Crown Prince International Scholarship. The ratios between government schools vs. private schools students and boys vs. girls in the class rooms were effectively balanced to create a learning environment that allows participants to learn from each other and develop key skills. Learners were exposed to a wide range of lecturers to gain from diverse experiences, competence and teaching styles.

In terms of quality improvements, the training material and course documentation were updated to meet the revised market context, learners were encouraged to use more online resources and the team of instructors was also enhanced with industry practitioners.

Feedback sourced from learners and clients in general was very positive. Faculty evaluation was 4.7/5 on an average for

2015. Participants’ clearly indicated the benefits they derived by attending these programmes. They were appreciative of the guidance provided by the instructors, and the learning resources made available to them. They benefitted from the practical work and skills based assessments, which they found to be very interesting and relevant to their current work.

The Centre continues to work on the professional development of its team and maintains a close watch on industry progress and changes, in order to be able to address Leadership and Management related issues with timely and relevant training solutions.

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Studies attracts highest number of applicants

Apart from setting new success rate benchmarks for graduate and postgraduate levels, the Centre for Academic Studies also recorded highest number of applications in 2015 for a number of its programmes including its flagship International Foundation Programme (IFP) and Human Resource Management (HRM) programme.

Around 93% of the students who enrolled in the Banking and Finance Diploma successfully completed with an above average rate of 75%.

The completion rates in the Masters’ Degrees programmes were equally impressive, with a high percentage of students graduated with distinction. Both indicators suggest that the programmes attract dedicated students and the selection criteria are effective.

With regards to programmes’ structure and curricula, the International Foundation Programme has undergone major changes in 2015. The Introduction to Business Ethics module (ETH100) was replaced with an additional Math module (Math II) in order to build on the skills that the learners acquire from MAT I, a course in the first semester of the programme. The replacement also complements the spectrum of numerical skills that students need before progressing to the next level of learning in vital areas such as Calculus.

Using ‘MyLabs’ as an additional online learning resource was introduced this year across the IFP subjects. The online platform offers both learners and lecturers access to a huge collection of activities, videos and tutorials. Lecturers were encouraged to use MyLabs in the classroom to enforce active learning and participation; while students were encouraged to use the available online resources to revise and measure their own progress as part of their self-directed learning.

29

Other changes included:• Incorporating extended individual essays as part of the assessment methods used in year two within Bangor’s programmes

• Introducing dealing room simulation sessions in some of the relevant modules; introducing a new student filing system in compliance with the Higher Education Commission (HEC) requirements

• Signing direct agreements and MoUs with 17 different UK universities to provide our IFP students guaranteed access to some of their degree level programmes

• Signing a new contract with University of DePaul for the year 2015

The number of applications received in 2015 increased compared to 2014 across all programmes. 2015 marked the highest application rate for a number of programmes including IFP and MSHR with the highest percentage of growth in application for the University of London Programme programme in 2015.

In general, the total number of students enrolled in Bangor University Programmes doubled compared to the last year.

This year 50% of our students chose accounting as a major compared to 44% in the previous year believing that job prospects and potential for professional development are better for accounting graduates in Bahrain.

BIBF’s graduate programmes have seen an increase in 2015 between 37% for the MSF programme to 65% for the MSHR programme.

In terms of the performance data for students who completed the IFP and Bangor’s Validated Diplomas, University of London and the Islamic Finance Diploma were excluded as the full programme has yet to be completed. As it can be seen, the successful completion rate for the IFP increased by 4% from 2014 to 2015, and the average student’s performance has also increased.

BIBF’s Centre for Academic Studies had introduced many supporting initiatives such as the introduction of peer tutoring support and remedial sessions for students in Math; as well as holding student and faculty induction workshops. Other vital areas include monitoring student performance and attendance by using various assessment methods including practical simulations (e.g. dealing room projects) and case studies. The initiatives include independent learning, self-study and embedding employability skills across courses such as critical thinking, academic writing and presenting have yielded positively.

The Centre lends its support to Student Council elections and activities while providing strong administrative support to students. The Centre also provides academic guidance to help prospective students in choosing the programme most suitable for them while maintaining positive relations with BIBF’s international partners.

30

REPORT

31

CONTENTS

Independent Auditor’s Report 33

Financial Statements:

Statement of Financial Position 34

Statement of Activities 35

Statement of Changes in Fund Balance 36

Statement of Cash Flows 37

Notes to the Financial Statements 38

32

Bahrain Institute of Banking and Finance (BIBF) Kingdom of Bahrain

Chairman H .E. Rasheed Mohamed Al-Maraj

Director Solveig Andres Nicklos

Deputy Director Ahmed Abdulghani Al Shaikh

Registered Office

Building No, 1456Road 4034, Block 340, JuffairP. O. Box 20525Kingdom of Bahrain

Bankers

Kuwait Finance House B.S.C.Al Salam Bank B.S.C.Bank of Bahrain and Kuwait B.S.C.Khaleeji Commercial Bank B.S.C.Ithmaar Bank B.S.C.National Bank of Bahrain B.S.CAl Baraka Islamic Bank B.S.C. (c)

Auditors

Deloitte & Touche – Middle EastP.O. Box 421Manama, Kingdom of Bahrain

33

INDEPENDENT AUDITOR’S REPORTTo the Specific Council for Vocational Training (Banking Sector)

Bahrain Institute of Banking and Finance (BIBF) Kingdom of Bahrain

Report on the Financial StatementsWe have audited the accompanying financial statements of Bahrain Institute of Banking and Finance (the “Institute”) which comprise the statement of financial position as at December 31, 2015, and the statement of activities, statement of changes in fund balance and the statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of Bahrain Institute of Banking and Finance, as of December 31, 2015, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Manama, Kingdom of Bahrain Deloitte & Touche – Middle EastMay 9, 2016 Partner Registration No. 184

34

Notes 2015 2014 BD BD

ASSETS Non-current assets Property and equipment 5 803,299 2,095,463 Deposits with banks 6 - 5,032,444 ------------- ------------- Total non-current assets 803,299 7,127,907 ------------- ------------- Current assets Tuition and levy receivables 7 1,470,214 1,096,398 Prepayments and other assets 8 642,005 444,920 Deposits with banks and cash 6 11,754,865 6,549,906 -------------- -------------- Total current assets 13,867,084 8,091,224 -------------- -------------- Total assets 14,670,383 15,219,131 ======== ======== FUND BALANCE AND LIABILITIES Fund balance Accumulated surplus 12,395,543 13,540,346 -------------- -------------- Total fund balance 12,395,543 13,540,346 -------------- -------------- Liabilities Non-current liabilities Staff saving scheme 9 568,687 496,009 Employees’ end -of-service benefits 10 256,203 202,961 ------------ ------------ Total non-current liabilities 824,890 698,970 ------------ ------------ Current liabilities Trade payables 285,563 272,539 Accruals and other liabilities 11 1,164,387 707,276 ------------- ------------ 1,449,950 979,815 -------------- -------------- Total Fund balance and liabilities 14,670,383 15,219,131 ======== ======== The financial statements from page 3 to 22 were approved by the Directors on May 9, 2016 and signed on its behalf by: _______________________ ____________________ Rasheed Al-Maraj Solveig Nicklos Chairman Director

STATEMENT OF FINANCIAL POSITIONAS AT DECEMBER 31, 2015

35

Notes 2015 2014 BD BD

Revenue Tuition fees 12 3,670,051 4,431,053 Less: Direct tuition costs 12 (1,158,950) (1,953,810) ------------- ------------- Net tuition fees 12 2,511,101 2,477,243 Levy 1 2,118,152 2,110,432 Contribution Financial income

1 6

15,000 312,507

15,000 276,863

Other 57,713 25,226 ------------- ------------- Total revenue 5,014,473 4,904,764 ------------- ------------- Expenses Staff costs 13 (3,548,630) (3,409,436) General and administrative expenses 14 (775,840) (792,663) Provision for impairment 7 (340,584) (109,783) Depreciation 5 (240,797) (194,237) ------------- ------------- Total expenses (4,905,851) (4,506,119) Net operating surplus before non-recurring impairment of assets

------------- 108,622

-------------

398,645 Impairment of capital work-in-progress Impairment of computer software (Deficit) / surplus for the year

5 5

(1,216,580) (36,845) -------------- (1,144,803)

- -

------------- 398,645

======== ======== _______________________ ____________________ Rasheed Al-Maraj Solveig Nicklos Chairman Director

STATEMENT OF ACTIVITIESFOR THE YEAR ENDED DECEMBER 31, 2015

36

STATEMENT OF CHANGES IN FUND BALANCE FOR THE YEAR ENDED DECEMBER 31, 2015

Accumulated surplus

Total

BD BD At January 1, 2014 13,141,701 13,141,701 Total comprehensive income for the year 398,645 398,645 --------------- -------------- At December 31, 2014 13,540,346 13,540,346 Total comprehensive loss for the year (1,144,803) (1,144,803) --------------- -------------- At December 31, 2015 12,395,543 12,395,543 ========= ========

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STATEMENT OF CASH FLOWSFOR THE YEAR ENDED DECEMBER 31, 2015

2015 2014 Notes BD BD Cash flows from operating activities (Deficit) / surplus for the year (1,144,803) 398,645 Adjustments for: Depreciation 5 240,797 194,237 Financial income (net of allocation to staff saving scheme)

6

(312,507)

(276,863)

Provision for impairment of receivables 7 340,584 109,783 Provision for staff saving scheme 9 85,613 90,281 Provision for employees’ end -of-service benefits 10 74,497 60,303 Impairment of capital work-in-progress 5 1,216,580 - Impairment of computer software 5 36,845 - ------------ ------------ 537,606 576,386 Increase in tuition and levy receivables 7 (714,400) (15,609) Decrease in prepayments and other assets 8 23,485 111,711 Increase in trade payables 13,024 266,419 Increase in accruals and other liabilities 11 457,111 20,683 Net change in staff saving scheme 9 (31,788) (112,432) Payment for employees’ end -of-service benefits 10 (21,255) (100,113) ------------- ------------- Net cash from operating activities 263,783 747,045 ------------- ------------- Cash flows from investing activities Purchase of property and equipment 5 (202,058) (475,237) Increase in deposits with banks 6 (500,000) (1,532,444) Financial income received 110,790 230,791 ------------- ------------- Net cash used in investing activities (591,268) (1,776,890) ------------- ------------- Net decrease in cash and cash equivalents (327,485) (1,029,845) Cash and cash equivalents at the beginning of the year 1,049,906 2,079,751 ------------- ------------- Cash and cash equivalents at the end of the year 6 722,421 1,049,906 ======== ========

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NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED DECEMBER 31, 2015

__ 1. STATUS AND ACTIVITIES

The Bahrain Institute of Banking and Finance (the “ Institute” ) was formed in the Kingdom of Bahrain by the approval of the Specific Council for Vocational Training (Banking Sector). The Institute is an unregistered non-profit entity and commenced its first training year on September 1, 1980. The registered address of the Institute is Building No.1456, Road 4034, Block 340, Juffair, Kingdom of Bahrain.

The objective and principal activity of the Institute is to provide training to employees working in the financial sector of the Kingdom of Bahrain.

The major revenue source of the Institute consist of:

a. tuition fees in respect of various courses conducted by the Institute; b. mandatory levy equal to 1% of staff base payroll cost of all financial institutions licensed by the

Central Bank of Bahrain; and c. an annual contribution of BD 15,000 from the Central Bank of Bahrain (the “ CBB” ). The

utilisation of the contribution is at the discretion of the Institute.

Royal Decree # 33 passed on 7 October 2015 has transferred the responsibilities of the High Council for Vocational Training to the Labour Fund, Tamkeen.

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)

In the current year, the Institute has adopted the new and revised standards and interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to the Institute’s operations and

effective for annual reporting periods beginning on January 1, 2015. The adoption of these new and revised Standards and Interpretations did not have any significant impact on the Institute’s �nancial

statements or changes to the Institute’s accounting policies.

In addition, and as of the date of authorization of these financial statements, certain standards and interpretations were in issue but not yet effective. Management anticipates that the adoption of these Standards and Interpretations in the related future periods will have no material impact on the financial statements of the Institute.

3. SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) .

Basis of Preparation The financial statements are prepared under the historical cost convention.

The financial statements are presented in Bahraini Dinars (“BD”), being the functional currency of the

Institute.

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3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The significant accounting policies adopted are as follows: Property and equipment Property and equipment are stated at historical cost less accumulated depreciation and impairment, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Institute and the cost of the item can be measured reliably. Repairs and maintenance are charged as period cost. Depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives as follows:

Building 20 years Furniture and Fixtures 5-7 years Machinery and equipment 3-5 years Training Material 3 years Motor Vehicles 5 years Computer Software 3 years

The gain or losses arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in profit or loss. An asset’s carrying amount is wri tten down immediately to its recoverable amount if the asset’s

carrying amount is greater than its estimated recoverable amount. Accounts receivable Tuition and levy receivable are initially recognised at fair value and subsequently measured at amortised cost, less provision for impairment. A provision for impairment is recognised when there is objective evidence that the Institute will not be able to collect all amounts due according to the original terms of receivables. Derecognition of financial assets The Institute derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The difference between the carrying amount of the financial asset derecognised and the sum of the consideration received and receivable is recognised as revenue or expense.

40


3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Accounts payable Accounts payable are initially recognized at fair value and subsequently measured at amortised cost. Derecognition of financial liabilities The Institute derecognises financial liabilities when, and only when, the Institute’s obligations are

discharged, cancelled or they expire.

The difference between the carrying amount of the financial liability derecognised and the sum of the consideration paid and payable is recognised as revenue or expense. Cash and cash equivalents For the purpose of preparing the statement of cash flows, cash and cash equivalents include cash in hand and deposits with banks with original maturities of three months or less. Provisions Provisions are recognised when the Institute has a present obligation (legal or constructive) as a result of a past event, it is probable that the Institute will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Employees’ Bene�ts Bahraini employees Pension rights (and other social benefits) for Bahraini employees are covered by the Social Insurance Organisation’s scheme to which employees and employers contribu te monthly on the basis of a fixed percentage of salaries. �e Institute’s contribution to this funded scheme, is recognised as an expense. Expatriate employees Expatriate employees are entitled to leaving indemnities payable under the Bahraini Labour Law for the Private Sector, based on the length of their service and final remuneration. Provisions is made on the basis of the liability that would arise if the employment of all expatriate staff were voluntary terminated at the financial position date. Staff saving scheme The Institute operates a staff saving scheme. The employee and the Institute contribute a minimum of 5% each based on the employee's current monthly basic salary. Interest is calculated based on the respective term deposit rates for each year.

41


3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Institution and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable from services provided in the normal course of business. - Tuition income is recognised as and when the services are provided. - Contributions are recognised when the right to receive payment is established. - Levy and financial income are recognised as they accrue. - Other service income is recognised when the services are provided.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS In the application of the accounting policies described in Note 3, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. In particular, the significant areas of estimation uncertainty and critical judgments in applying accounting policies that have a significant effect on the amounts recognised in the financial statements, relate to the following:

Impairment of receivables

The Institute’s management reviews periodically items classi�ed as receivables to assess whether a provision for impairment should be recognised. The charge is mainly based on the ageing of receivables, and where applicable defaults and credit worthiness of counterparts. In general the impairment charge is calculated based on fixed percentages applied to overdue balances of each ageing category. Also management provides for the individual receivables which are considered irrecoverable. Changes to the estimated impairment charge may be required if the financial condition of the debtors was to improve or deteriorate.

Useful lives of property and equipment

The Institute’s management determines the useful lives of property and equipment for calculating depreciation. The depreciation charge for the year will change significantly if the actual life is different from the estimated useful life of the asset. This estimate is determined after considering the expected usage of the assets and physical wear and tear.

42

5. PROPERTY AND EQUIPMENT

Furniture

Machinery

Capital work-

And and Training Motor Computer in-progress Building Fixtures Equipment Material Vehicles Software (CWIP) Total BD BD BD BD BD BD BD BD Cost At January 1, 2014 1,778,704 561,302 759,535 218,621 35,250 278,551 1,226,627 4,858,590 Additions - 26,394 249,936 - - - 198,907 475,237 ------------- ----------- ------------- ----------- ----------- --------- ------------- ------------- At December 31, 2014 1,778,704 587,696 1,009,471 218,621 35,250 278,551 1,425,534 5,333,827 Additions - 36,492 86,277 - - 24,241 55,048 202,058 Write-off / impairment - - - - - (239,061) (1,216,580) (1,455,641) ------------- ----------- ------------- ----------- ----------- --------- ------------- ------------- At December 31, 2015 1,778,704 624,188 1,095,748 218,621 35,250 63,731 264,002 4,080,244 ------------- ----------- ------------- ----------- ----------- --------- ------------ ------------- Accumulated depreciation At January 1, 2014 1,496,339 523,937 687,147 218,146 3,526 115,032 - 3,044,127 Depreciation expense 37,783 16,975 50,697 475 6,809 81,498 - 194,237 ------------- ----------- ----------- ----------- ----------- --------- ---------- ------------- At December 31, 2014 1,534,122 540,912 737,844 218,621 10,335 196,530 - 3,238,364 Depreciation expense 37,475 20,475 117,968 - 7,049 57,830 - 240,797 Relating to write-off - - - - - (202,216) - (202,216) ------------- ----------- ----------- ----------- ----------- --------- ---------- ------------- At December 31, 2015 1,571,597 561,387 855,812 218,621 17,384 52,144 - 3,276,945 ------------- ----------- ----------- ----------- ----------- --------- ---------- ------------- Carrying amount At December 31, 2015 207,107 62,801 239,936 - 17,866 11,587 264,002 803,299 ====== ====== ====== ====== ====== ===== ======== ======== At December 31, 2014 244,582 46,784 271,627 - 24,915 82,021 1,425,534 2,095,463 ====== ====== ====== ====== ====== ===== ======== ========


43

5. PROPERTY AND EQUIPMENT (CONTINUED)

The existing building is built on land donated by the Prime Minister on behalf of the Government of the Kingdom of Bahrain and is registered in the name of the Central Bank of Bahrain. No rental is charged to the Institute.

Capital work-in-progress amounting to BD 1,480,582 mainly include costs of design for a new building in Bahrain Financial Harbour. �e Institute’s management is considering a re -design of the building to better accommodate the logistical needs and financial means of the Institute. Accordingly these costs were written-off to the extent of BD 1,216,580 during 2015. A new computer software with a carrying value amounted to BD 36,845 was written-off as it did not meet the Institute’s business requirements as intended.

6. CASH AND BANKS

2015

Current Non-current Total

BD BD BD

Wakala 3,032,444 - 3,032,444 Murabaha 7,000,000 - 7,000,000 Term deposits 1,000,000 - 1,000,000

11,032,444 - 11,032,444

Current accounts with banks 721,421 - 721,421 Cash in hand 1,000 - 1,000 Cash and cash equivalents 722,421 - 722,421

Total cash and banks 11,754,865 - 11,754,865

2014

Current Non-current Total

BD BD BD

Wakala 1,000,000 3,032,444 4,032,444 Murabaha 2,000,000 2,000,000 4,000,000 Term deposits 2,500,000 - 2,500,000

5,500,000 5,032,444 10,532,444

Current accounts with Bank 1,048,906 - 1,048,906 Cash in hand 1,000 - 1,000 Cash and cash equivalents 1,049,906 - 1,049,906

Total cash and banks 6,549,906 5,032,444 11,582,350


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6. CASH AND BANKS (CONTINUED)

At 2015 year end Wakala contracts of BD 3,032,444 (2014: BD 1,000,000) are pledged against a bank guarantee in the amount of BD 100,000 (2014: BD 100,000) (Note 16).

Term deposits include funds totaling BD 568,687 (2014: BD 496,009) allocated to staff saving scheme (Note 9).

�e Institutes’ liquid funds are deposited with the following banks at December 31 :

2015 2014

BD BD

Ithmar Bank B.S.C. 3,400,000 1,000,000 Al Salam Bank B.S.C. 3,155,598 4,131,260 Khaleeji Commercial Bank B.S.C. 2,609,835 2,000,000 Bank of Bahrain and Kuwait B.S.C. 1,169,218 3,325,927 Al Baraka Islamic Bank B.S.C. (c) 1,000,000 - National Bank of Bahrain B.S.C. 417,214 52,143 Kuwait Finance House B.S.C. 2,000 1,072,020 Cash in hand 1,000 1,000

11,754,865 11,582,350

Deposits with banks are mainly denominated in Bahraini Dinars. Maturities and yield on Wakala, Murabaha and term deposits are as follows:

Yield BD December 31, 2015

February 2016 4.00% 900,000 March 2016 3.75% 3,032,444 September 2016 2.70% 2,500,000 November 2016 2.90% 600,000 December 2016 3.22% 4,000,000

- 11,032,444

December 31, 2014 September 2015 1.90% 2,500,000

December 2015 2.58% 3,000,000 March 2016 3.75% 3,032,444 December 2016 3.25% 2,000,000

- 10,532,444

Financial income amounted to BD 312,507 (2014: BD 276,863) after allocation of interest to the staff saving scheme amounting to BD 18,853 (2014: BD 6,162) refer to Note 9.


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7. TUITION AND LEVY RECEIVABLES

2015 2014 2013

BD BD BD

Tuition fee receivables 1,272,129 1,082,951 1,190,683 Levy receivables due from financial institutions 837,194 428,097 304,756

2,109,323 1,511,048 1,495,439 Less: provision for impairment (639,109) (414,650) (304,867)

1,470,214 1,096,398 1,190,572

Tuition fee receivables represent amounts receivable from corporate entities in respect of professional and special offering courses.

The ageing of tuition and levy receivables net of provision for impairment is as follows:

2015 2014

BD BD

Up to 60 days 895,997 526,812 From 61 to 90 days 114,041 5,561 From 91 to 120 days 96,060 41,317 From 121 to 180 days 104,484 175,177 From 181 to 270 days 144,440 98,857 From 271 to 365 days 70,324 134,409 From 1 to 2 years 44,868 114,265

1,470,214 1,096,398

Below is the segregated ageing between tuition and levy receivables (net of provision for impairment).

2015 Levy Tuition Total

BD BD BD

Up to 180 days 497,768 712,814 1,210,582

From 181 to 270 days - 144,440 144,440 From 271 to 365 days - 70,324 70,324 From 1 to 2 years - 44,868 44,868

497,768 972,446 1,470,214

The net levy outstanding as at December 31, 2015 amounting to BD 497,768 was billed to the Labour Fund and collected in the subsequent period.


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7. TUITION AND LEVY RECEIVABLES (CONTINUED)

2014

Levy Tuition Total BD BD BD Up to 180 days 123,298 625,569 748,867 From 181 to 270 days - 98,857 98,857 From 271 to 365 days 80,838 53,571 134,409 From 1 to 2 years 71,750 42,515 114,265

275,886 820,512 1,096,398 The movement of the provision for impairment was as follows:

2015 2014

BD BD

At January 1, 414,650 304,867 Charge during the year against levy receivable 298,768 66,571 Charge during the year against tuition receivable 41,816 43,212 Write-off (116,125) - At December 31, 639,109 414,650


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7. TUITION AND LEVY RECEIVABLES (CONTINUED)

Tuition and levy receivables are allocated by brackets of outstanding balances as follows:

2015

Tuition receivables Levy receivables

Brackets of outstanding balances (BD) Gross Balance No. of

counterparts

Gross Balance

No. of counterparts Total

Percentage to total

BD

BD

BD %

100,001 to 300,000 259,467 1 497,768 1 757,235 36% 50,001 to 100,000 361,034 5 - - 361,034 17% 30,001 to 50,000 71,358 2 - - 71,358 3% 10,001 to 30,000 295,529 17 116,369 8 411,898 20% 5,001 to 10,000 167,391 24 31,769 5 199,160 9% 1,001 to 5,000 69,939 44 105,251 44 175,190 8% Up to 1,000 47,411 124 86,037 59 133,448 6%

1,272,129 217 837,194 116 2,109,323

2014

Tuition receivables Levy receivables

Brackets of outstanding balances (BD) Gross Balance No. of

counterparts

Gross Balance No. of

counterparts Total Percentage

to total

BD

BD

BD %

100,001 to 300,000 266,135 1 - - 266,135 18% 50,001 to 100,000 60,375 1 - - 60,375 4% 30,001 to 50,000 145,400 4 84,376 2 229,776 15% 10,001 to 30,000 287,041 19 174,240 11 461,281 31% 5,001 to 10,000 122,148 19 51,196 7 173,344 11% 1,001 to 5,000 148,941 58 104,887 46 253,828 17% Up to 1,000 52,911 120 13,398 47 66,309 4%

1,082,951 222 428,097 113 1,511,048


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8. PREPAYMENTS AND OTHER ASSETS

2015 2014

BD BD

Prepayments 81,156 88,951 Accrued profit receivable 331,667 111,097 Accrued tuition fee receivable - 20,400 Advance to employees 53,350 33,762 Blocked margin against bank guarantees (Note 16) 175,832 175,832 Other assets - 14,878

642,005 444,920 9. STAFF SAVING SCHEME

2015 2014

BD BD

At January 1, 496,009 518,160 Interest (Note 6) 18,853 6,162 Charge for the year - employees 85,613 90,281 Charge for the year - BIBF 85,613 90,281 Payments during the year (117,401) (208,875) At December 31, 568,687 496,009

In January 2003, the Institute started a saving scheme program, where it contributes an amount equal to 5% of each employee’s monthly salary in addition to the 5% contribution by each employee. The Institute allocates interest on the staff saving scheme on a basis decided by management annually. The underlying assets relating to the scheme are included in the deposits with banks. 10. EMPLOYEES’ END -OF-SERVICE BENEFITS

2015 2014

BD BD

At January 1, 202,961 242,771 Charge for the year 74,497 60,303 Payments during the year (21,255) (100,113) At December 31, 256,203 202,961


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11. ACCRUALS AND OTHER LIABILITIES

2015 2014

BD BD

Bonus and other staff related accruals 542,418 535,374 Other creditors 25,932 100,928 Esterad – BIBF fund 27,684 27,684 Tuition expenses - 21,271 Students refundable deposits 8,420 17,330 Refunds payable to levy payers 318,234 - Unearned revenue 241,699 4,689

1,164,387 707,276

Refunds payable to levy payers represent amounts collected from individual levy payers after cancellation of the 1% mandatory levy by the Government and collected from the Labour Fund subsequent to the cancellation of the mandatory levy. These refunds will be set off against future services to the levy payers.

12. TUITION FEES AND DIRECT TUITION COSTS

2015

Tuition fees Direct tuition

costs Net

BD BD BD

Professional courses 2,147,545 675,047 1,472,498

Special courses 912,349 240,725 671,624 Public courses 318,155 76,081 242,074 External courses 85,473 56,864 28,609 Other courses 206,529 110,233 96,296

3,670,051 1,158,950 2,511,101

2014

Tuition fees Direct tuition

costs Net

BD BD BD

Professional courses 2,604,376 1,242,017 1,362,359 Special courses 1,157,325 348,102 809,223 Public courses 292,634 70,481 222,153 External courses 150,083 41,949 108,134 Other courses 226,635 251,261 (24,626)

4,431,053 1,953,810 2,477,243


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13. STAFF COSTS

2015 2014

BD BD

Salaries 2,209,448 2,107,730 Bonus 485,146 485,142 Contribution to staff saving scheme (Note 9) 85,613 90,281 Provision for employees’ end of service bene ts (Note 10) 74,497 60,303 Other benefits 693,926 665,980

3,548,630 3,409,436 14. GENERAL AND ADMINISTRATIVE EXPENSES

2015 2014

BD BD

Printing and advertising 103,916 200,255 Premises 233,878 199,884 Business development 60,683 103,089 Communication 86,572 76,133 Contract services 71,353 50,109 Software renewal fees 55,192 38,983 Professional fees 60,520 38,166 Stationery and supplies 16,649 19,545 Repairs and maintenance 17,195 12,915 Public relations and social activities 10,855 10,136 Library books and periodicals 4,329 9,720 Postage 3,666 3,152 Others 51,032 30,576

775,840 792,663 15. RELATED PARTIES

Key management compensation

2015 2014

BD BD

Salaries and other short-term benefits 354,343 345,168 Termination benefits, including staff saving scheme 34,605 33,127

388,948 378,295


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16. BANK GUARANTEES The Institute's bankers have issued performance bonds and other guarantees on behalf of the Institute amounting to BD 270,774 (2014: BD 270,774). 17. GOVERNMENT GRANT The land at Bahrain Financial Harbour is donated by His Majesty King Hamad Bin Isa Bin Salman Al Khalifa, the King of the Kingdom of Bahrain. The condition attached to the grant is to build a new educational facility on the land. The Institute is in the process of constructing the new building. 18. FINANCIAL INSTRUMENTS �e Institute’s � nancial instruments expose it to a variety of financial risks. These include foreign exchange risk, interest rates, credit risk and liquidity risk. Management monitors these risk to minimize potential adverse effects on the Institute’s �nancial performanc e. �e Institute’s �nancial assets include deposits with bank, fees receivables and other receivables. Financial liabilities include trade payables, accruals and other liabilities. The summary of financial assets and liabilities are follows:

Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Institute assets and liabilities are denominated primarily in Bahraini Dinars. Accordingly, the Institute’s exposure to foreign exchange risk is minimal.

2015 2014 BD BD Financial assets Receivables at amortised cost (including cash and bank balance) 13,732,578 12,986,077 ======== ======== Financial liabilities Payables at amortised cost 862,333 947,442 ======= =======


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18. FINANCIAL INSTRUMENTS (CONTINUED) Interest rate / profit rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Institute interest / profit bearing assets consist of placements with banks with maturities of one year or less with �xed return. �e Institute’s �nancial liabilities are non -interest bearing. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.

The Institute is exposed to credit risk on its liquid funds and receivables. The credit concentration is disclosed in Notes 6 and 7. The credit risk on liquid funds is limited because the counterparties are banks and financial institutions with good credit ratings. The exposure to credit risk is limited to the carrying value of financial assets in the statement of financial position in addition to its bank guarantees disclosed in Note 16. Liquidity risk Liquidity risk is the risk that the Institute will encounter difficulty in meeting obligations associated with financial liabilities.

Ultimate responsibility for liquidity risk management rests with the Directors of the Institute who manage the Institute’s short, medium and long -term funding and liquidity management requirements. The following tables detail the Institute’s remaining contractual maturity for its non -derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Institute can be required to pay. The table includes both interest, if applicable, and principal cash flows.

Less than

1 month 1-3 months

Total BD BD BD

2015 Non-interest bearing 516,811 345,522 862,333 ====== ======= ======= 2014 Non-interest bearing 519,880 427,562 947,442 ====== ====== =======


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18. FINANCIAL INSTRUMENTS (CONTINUED) �e following tables detail the Institute’s expected maturity for its non -derivative financial assets. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets, including interest that will be earned on those assets except where the Institute anticipates that the cash flow will occur in a different period.

Weighted average Yield

Less than 1 month

1-3 months

3 months to 1 year

Over 1

year

Total BD BD BD BD BD 2015 Non-interest earning - 2,383,918 318,234 - - 2,702,152 Interest earning 3.31% - 3,975,570 7,333,590 - 11,309,160 ------------ ------------- ------------- ------------ ------------- 2,383,918 4,293,804 7,333,590 - 14,011,312 ======= ======= ======== ======= ======== 2014 Non-interest earning - 2,453,633 - - - 2,453,633 Interest earning 2.88% - - 5,730,617 5,105,163 10,835,780 ------------ ------------ ------------- ------------ ------------- 2,453,633 - 5,730,617 5,105,163 13,289,413 ======= ======= ======== ====== ======== Fair value of financial instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Consequently, differences may arise between the carrying values and the fair value estimates. Management considers that the carrying amounts of financial assets and financial liabilities approximate their fair values at the financial positon date.


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For further information, and to register.Please contact the Bahrain Institute of Banking and Finance

Tel: +973 1781 5555 Email: [email protected]

Documents

ANNUAL REPORT 2015 - BIBF · Mr. Mahomed Akoob Managing Director, Hannover Retakaful Bsc 9. Mr. Mazin Manna Chief Executive Officer, Citibank 10. Mr. Redha Ahmed Hubail Assistant