Board of DirectorsFinancials

ADIR - Partnership Byblos Bank & Assurances Banque Populaire –France

ADIR was established in 1983 as an insurance and reinsurance company. It offers a wide range of insurance services primarily to the Bank's clients. Its products include fire, life, medical and casualty insurance.  As at December 31st, 2002, ADIR had approximately 24,000 clients; approximately 28,456 insurance policies in effect (including 15,088 life insurance policies and 13,368 non-life insurance policies), of which 80% were issued to customers of the Bank; total assets of LBP 25.8 billion (USD 17.1 million); net profits of LBP 2.5 billion (USD 1.7 million); and shareholders' equity of LBP 14.9 billions (USD 9.9 million).

ADIR's total net written premiums for the year ended December 31st, 2002 were LBP 7.8 billion (USD 5.2 million).  Of that amount, ADIR retained LBP 4.1 billion (USD 2.7 million), with the balance being paid to reinsurance companies. As at December 31st, 2002, ADIR's solvency ratio stood at 161% (excluding profits for the year then ended), as compared to the regulatory required solvency ratio of 10%.  The tables below set forth a breakdown of ADIR 's revenues, by type of products, for the year ended December 31st, 2002 and the percentage of premiums reinsured, by sector, as at December 31st, 2002:

SECTOR REVENUES
Life (including Bancassurance products) 38.00 %
Medical 5.30 %
Fire 15.70 %
Motor (including Bancassurance products) 17.10 %
Marine 4.70 %
Other 19.20 %
Total 100.00 %

SECTOR PERCENTAGE REINSURED
Fire 96 %
Medical 88 %
Life (not including Bancassurance products) 83 %
Motor (not including Bancassurance products) 16 %
Marine 91 %

ABOUT THE PARTNERSHIP WITH ASSURANCES BANQUE POPULAIRE –FRANCE
On May 9th, 2001,the Bank sold 34%of its interest in ADIR to Assurances Banque Populaire, the fifth largest bancassurance group in France and an affiliate of Natexis Banques Populaires; as at that date, the Bank retained a controlling interest (63.95%) in ADIR.  The Bank believes that the association with the French banking group will continue to facilitate the Bank's offering of bancassurance products to its customers in the Lebanese Republic and selected Middle Eastern countries, which commenced in October 2002. The sale of 34%of the capital of ADIR was followed by the appointment of a new Chief Executive Officer and the election of a new board of directors of which Assurances Banque Populaire holds one third of the seats. In addition, a project team was appointed to manage the launching of several bancassurance products.  

LINES OF BUSINESS
Life, Retirement Plan , Investment Plan, Personal Accident, Medical Schemes, Motor, Travel, Small Craft, Marine Cargo, Fire, Allied Perils & Loss of Profit, Workmen Compensation, Product & Professional Liability, Contractor's All Risks & Machinery Breakdown, Bankers Blanket Bond & Financial Guarantees, Burglary & Money in Transit, Credit Card, Computer &  EDP systems, Other.

BANKER
Byblos Bank s.a.l.

REINSURER
Munich Re
Hannover Re.
GeneralCologne Re.
SCOR 
Arab Re
Caisse Centrale de Reassurance (CCR)
Converium

CORRESPONDENT AND REINSURANCE BROKER
Nasco Karaoglan – France

AUDITORS
Semaan, Gholam & Co.