Palestine Monetary Authority

Palestine Monetary Authority

Circular No. (9) 2012

To all banks operating in Palestine

Date: Sunday, January 15, 2012

Subject: Final Financial Statements

Pursuant to our Instructions No. (2010/03) dated May 11, 2010, regarding the above subject, we request that you provide us with the final financial statements as of December 31, 2010, no later than February 28, 2012, including the following:

1. The bank's consolidated financial statements.
2. The bank's separate financial statements.
3. The final financial statements of subsidiaries and associates whose financial data must be consolidated with the bank's financial data in accordance with International Financial Reporting Standards (IFRS).
4. A report from the external auditor addressed to the Authority, with a copy to the bank's Board of Directors, in compliance with Article (47) of Banking Law No. (9) of 2010.
5. The external auditor's letter addressed to the bank's Board of Directors, including the bank's response thereto (Management Letter).
6. A letter from the external auditor detailing audit observations on information technology operations.
7. A certificate from the bank's tax advisor detailing the calculation of provisions for income tax and value-added tax (VAT) and assessing their adequacy.
8. Audited financial statements available for non-listed companies in which the bank holds investments, for which no market prices or valuation mechanisms for these investments are available.
9. The methodology relied upon in valuing the prices of investments (bonds, shares, etc.) held therein.
10. A schedule of lawsuits filed against the bank and the legal advisor's opinion on the adequacy of the provision established therefor.
11. A schedule of foreclosed/repossessed assets detailing the asset's value, acquisition date, market value per asset, and impairment provision.

Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 E-mail: info@pma.ps Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 www.pma.ps

12. A schedule of provisions written off and those reversed to income.
13. A schedule of suspended interest written off and those reversed to income.
14. A schedule of bad debts written off during the period.
15. A copy of the Board of Directors meeting minutes in which the bank's statements were approved.
16. A copy of the engagement letter signed between the bank and the external auditor.

Supervision and Inspection Department
Palestine Monetary Authority

Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 E-mail: info@pma.ps Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 www.pma.ps