THE MAURITIUS COMMERCIAL BANK LIMITED  
  Abridged Unaudited Interim Financial Statements  
  31st December 2005  
   
  Balance Sheets Statements of Changes in Equity  
  Attributable to ordinary equity holders of the parent  
  GROUP BANK Share Treasury Capital Translation Statutory General Retained Total Minority Total  
  31-Dec-05 31-Dec-04 30-Jun-05 31-Dec-05 31-Dec-04 30-Jun-05  Capital  Shares  Reserve  Reserve  Reserve  Banking Reserve  Earnings  Interest  Equity  
  Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 GROUP Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000  
  ASSETS At 1st July 2004      2,821,105        (350,993)         334,832         162,753      1,332,578             491,044      4,563,977       9,355,296          114,558      9,469,854  
  Cash resources Effect of IAS 8                  -                    -                    -                    -                    -                       -          (299,950)         (299,950)                  -          (299,950)  
  Cash and balances with Central Banks      5,777,017      5,056,096      4,867,674      4,232,754      3,418,602      3,481,887 As restated      2,821,105        (350,993)         334,832         162,753      1,332,578             491,044      4,264,027       9,055,346          114,558      9,169,904  
  Balances with banks and interbank loans         953,450         100,000                  -           953,450         100,000                  -   Share of increase in  
  Balances with banks abroad      1,098,708      1,551,341      1,073,063      1,832,715      1,476,885      1,044,609   reserves of associates                  -                    -               9,567         123,019                  -                  7,392                  -            139,978                  -           139,978  
       7,829,175      6,707,437      5,940,737      7,018,919      4,995,487      4,526,496 (Decrease)/increase in interest in associate                  -                    -              (1,437)                  -                    -                       -                 597               (840)                  -                (840)  
  Securities and other investments Currency translation difference                  -                    -                    -             64,383                  -                       -                    -             64,383           11,380           75,763  
  Securities     16,779,150     17,786,796     16,422,090     13,813,190     14,709,795     13,557,949 Fair value gain                  -                    -               3,580                  -                    -                       -                    -               3,580                  -               3,580  
  Other investments  - available-for-sale      1,325,369         748,868      1,148,290         485,501         428,237         745,207 Net gains not recognised in the  
                                - derivative financial instruments           12,672           24,970           28,102           12,672           24,970           28,102   income statement                  -                    -             11,710         187,402                  -                  7,392               597          207,101           11,380         218,481  
  Investments in associates      2,474,748      2,320,868      2,318,127         839,657         864,275         830,802 Profit for the period                  -                    -                    -                    -                    -                       -           783,016          783,016           10,853         793,869  
  Investments in subsidiaries                  -                    -                    -        1,200,355         449,856         826,959 Dividends                  -                    -                    -                    -                    -                       -          (237,080)         (237,080)          (22,586)        (259,666)  
      20,591,939     20,881,502     19,916,609     16,351,375     16,477,133     15,989,019 Purchase of treasury shares                  -              (2,016)                  -                    -                    -                       -                    -              (2,016)                  -              (2,016)  
  Loans     59,764,434     53,727,707     55,122,661     55,153,671     50,528,429     51,882,282 Net transfer to general banking reserve                  -                    -                    -                    -                    -                 24,972          (24,972)                  -                    -                    -    
  Other At 31st December 2004      2,821,105        (353,009)         346,542         350,155      1,332,578             523,408      4,785,588       9,806,367          114,205      9,920,572  
  Goodwill and other intangible assets         320,542         291,469         321,838         287,940         257,068         288,337  
  Property, plant and equipment      2,577,929      2,114,891      2,542,323      2,125,458      2,024,883      2,102,935 At 1st July 2004      2,821,105        (350,993)         334,832         162,753      1,332,578             491,044      4,563,977       9,355,296          114,558      9,469,854  
  Deferred tax assets           83,073           78,762           84,769           82,746           78,486           84,284 Effect of IAS 8                  -                    -                    -                    -                    -                       -          (299,950)         (299,950)                  -          (299,950)  
  Other assets      1,615,976      1,210,044      1,303,140      1,238,121         987,769      1,273,689 As restated      2,821,105        (350,993)         334,832         162,753      1,332,578             491,044      4,264,027       9,055,346          114,558      9,169,904  
       4,597,520      3,695,166      4,252,070      3,734,265      3,348,206      3,749,245 Share of increase in reserves of associates                  -                    -             25,320           23,011                  -                     545                  -             48,876                  -             48,876  
      92,783,068     85,011,812     85,232,077     82,258,230     75,349,255     76,147,042 Increase in interest in associate                  -                    -               1,572                  -                    -                       -               1,219             2,791                  -               2,791  
  Transfer on disposal of associate by Fincorp                  -                    -            (16,027)                  -                    -                       -                    -            (16,027)                  -            (16,027)  
  LIABILITIES AND SHAREHOLDERS' EQUITY Transfer on disposal of investment                  -                    -                  (53)                  -                    -                       -                    -                   (53)                  -                  (53)  
  Deposits     73,037,235     68,339,674     68,257,098     65,169,422     60,942,571     61,327,173 Currency translation difference                  -                    -                    -            (23,700)                  -                    (322)                  -            (24,022)            (5,764)          (29,786)  
  Borrowings Fair value gain                  -                    -             60,972                  -                    -                       -                    -             60,972                  -             60,972  
  Borrowings from the Bank of Mauritius      1,263,837      1,262,761      1,203,518      1,263,837      1,262,761      1,203,518 Net gains/(losses) not recognised in  
  Borrowings from other banks in Mauritius and banks abroad      4,345,079      2,963,234      2,844,500      4,306,699      3,237,897      2,917,310   the income statement                  -                    -             71,784              (689)                  -                     223             1,219           72,537            (5,764)           66,773  
       5,608,916      4,225,995      4,048,018      5,570,536      4,500,658      4,120,828 Profit for the period                  -                    -                    -                    -                    -                       -        1,657,889       1,657,889           21,290      1,679,179  
  Other Dividends                  -                    -                    -                    -                    -                       -          (510,898)         (510,898)          (19,547)        (530,445)  
  Other liabilities      2,512,229      2,045,526      1,928,998      2,220,283      1,600,762      1,688,215 Transfer to general banking reserve                  -                    -                    -                    -                    -                 46,232          (46,232)                  -                    -                    -    
  Outstanding lease obligations             8,531           15,039           11,418             8,200           14,698           10,994 Transfer to statutory reserve                  -                    -                    -                    -           250,000                     -          (250,000)                  -                    -                    -    
  Proposed dividend                  -                    -           273,818                  -                    -           273,818 Purchase of treasury shares                  -            (42,796)                  -                    -                    -                       -                    -            (42,796)                  -            (42,796)  
  Current tax liabilities         471,859         465,006         370,112         438,936         415,289         317,829 At 30th June 2005      2,821,105        (393,789)         406,616         162,064      1,582,578             537,499      5,116,005     10,232,078          110,537     10,342,615  
       2,992,619      2,525,571      2,584,346      2,667,419      2,030,749      2,290,856 Adjustment of fair value of assets in associate                  -                    -                    -                    -                    -                       -            (46,699)          (46,699)                  -            (46,699)  
  Capital and reserves attributable to the ordinary As restated      2,821,105        (393,789)         406,616         162,064      1,582,578             537,499      5,069,306     10,185,379          110,537     10,295,916  
    equity holders of  the parent Share of increase in reserves of associates                  -                    -             91,510           26,680                  -                       -                    -            118,190                  -           118,190  
  Share capital      2,821,105      2,821,105      2,821,105      2,821,105      2,821,105      2,821,105 Decrease in interest in associate                  -                    -                (115)                  -                    -                       -              (5,419)            (5,534)                  -              (5,534)  
  Reserves and surplus      2,902,903      2,552,683      2,688,757      2,095,167      1,866,449      2,131,738 Currency translation difference                  -                    -                    -             30,223                  -                       -                    -             30,223                715           30,938  
  Retained earnings      5,698,489      4,785,588      5,116,005      4,327,411      3,540,732      3,847,881 Transfer on disposal of investment                  -                    -              (5,878)                  -                    -                       -                    -              (5,878)                  -              (5,878)  
      11,422,497     10,159,376     10,625,867      9,243,683      8,228,286      8,800,724 Fair value gain                  -                    -             62,279                  -                    -                       -                    -             62,279                  -             62,279  
  Less treasury shares        (394,080)        (353,009)        (393,789)        (392,830)        (353,009)        (392,539) Net gains/(loss) not recognised in  
      11,028,417      9,806,367     10,232,078      8,850,853      7,875,277      8,408,185   the income statement                  -                    -           147,796           56,903                  -                       -              (5,419)          199,280                715         199,995  
  Minority interest         115,881         114,205         110,537                  -                    -                    -   Profit for the period                  -                    -                    -                    -                    -                       -           912,448          912,448           14,846         927,294  
  Total equity     11,144,298      9,920,572     10,342,615      8,850,853      7,875,277      8,408,185 Dividends                  -                    -                    -                    -                    -                       -          (268,399)         (268,399)          (10,217)        (278,616)  
      92,783,068     85,011,812     85,232,077     82,258,230     75,349,255     76,147,042 Transfer to general banking reserve                  -                    -                    -                    -                    -                  9,447            (9,447)                  -                    -                    -    
  CONTINGENT LIABILITIES Purchase of treasury shares                  -                (291)                  -                    -                    -                       -                    -                 (291)                  -                (291)  
  Acceptances, guarantees, letters of credit,  endorsements and other At 31st December 2005      2,821,105        (394,080)         554,412         218,967      1,582,578             546,946      5,698,489     11,028,417          115,881     11,144,298  
    obligations on account of customers, and foreign exchange contracts     19,215,987     13,873,980     17,721,531     18,288,086     12,678,218     16,526,633  
  Commitments      3,302,757      3,106,840      2,288,704      3,302,757      3,085,147      2,213,040 BANK  
  Assets pledged      2,231,464         970,680         970,680      1,014,515         970,680         970,680 At 1st July  2004      2,821,105        (350,993)           47,182                  -        1,332,578             457,270      3,470,809       7,777,951                  -        7,777,951  
  Tax assessment         185,737         387,588         185,737         185,737         387,588         185,737 Effect of IAS 8                  -                    -                    -                    -                    -                       -          (299,950)         (299,950)                  -          (299,950)  
  Other         996,425         918,935         888,792         917,070         917,605         874,372 As restated      2,821,105        (350,993)           47,182                  -        1,332,578             457,270      3,170,859       7,478,001                  -        7,478,001  
      25,932,370     19,258,023     22,055,444     23,708,165     18,039,238     20,770,462 Fair value gain not recognised in the  
    income statement                  -                    -               3,439                  -                    -                       -                    -               3,439                  -               3,439  
  Profit for the period                  -                    -                    -                    -                    -                       -           632,933          632,933                  -           632,933  
  Dividends                  -                    -                    -                    -                    -                       -          (237,080)         (237,080)                  -          (237,080)  
  Income Statements GROUP BANK Transfer to general banking reserve                  -                    -                    -                    -                    -                 25,980          (25,980)                  -                    -                    -    
   Quarter ended  Quarter ended  6 mths to  6 mths to  Year ended  Quarter ended  Quarter ended  6 mths to  6 mths to  Year ended Purchase of treasury shares                  -              (2,016)                  -                    -                    -                       -                    -              (2,016)                  -              (2,016)  
  31-Dec-05 31-Dec-04 31-Dec-05 31-Dec-04 30-Jun-05 31-Dec-05 31-Dec-04 31-Dec-05 31-Dec-04 30-Jun-05 At 31st December 2004      2,821,105        (353,009)           50,621                  -        1,332,578             483,250      3,540,732       7,875,277                  -        7,875,277  
   Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  
  Interest income         1,726,428      1,381,326      3,319,372      2,703,339      5,672,494      1,548,808      1,243,640      2,991,133      2,427,817      5,121,108 At 1st July 2004      2,821,105        (350,993)           47,182                  -        1,332,578             457,270      3,470,809       7,777,951                  -        7,777,951  
  Interest expense           (914,689)        (684,742)     (1,716,657)     (1,315,208)     (2,751,286)        (856,001)        (644,740)     (1,613,868)     (1,241,035)     (2,603,832) Effect of IAS 8                  -                    -                    -                    -                    -                       -          (299,950)         (299,950)                  -          (299,950)  
  Net interest income            811,739         696,584      1,602,715      1,388,131      2,921,208         692,807         598,900      1,377,265      1,186,782      2,517,276 As restated      2,821,105        (350,993)           47,182                  -        1,332,578             457,270      3,170,859       7,478,001                  -        7,478,001  
  Other income            507,860         455,552         978,987         939,316      1,920,691         411,782         355,029         761,958         744,069      1,633,227 Transfer on disposal of investments                  -                    -            (11,454)                  -                    -                       -                    -            (11,454)                  -            (11,454)  
  Operating income         1,319,599      1,152,136      2,581,702      2,327,447      4,841,899      1,104,589         953,929      2,139,223      1,930,851      4,150,503 Fair value gain                  -                    -               9,822                  -                    -                       -                    -               9,822                  -               9,822  
  Non-interest expense           (621,338)        (571,997)     (1,216,366)     (1,118,786)     (2,253,394)        (531,281)        (488,368)     (1,045,948)        (963,354)     (1,957,603) Net loss not recognised in  
  Operating profit before provisions            698,261         580,139      1,365,336      1,208,661      2,588,505         573,308         465,561      1,093,275         967,497      2,192,900   the income statement                  -                    -              (1,632)                  -                    -                       -                    -              (1,632)                  -              (1,632)  
  Allowance for credit impairment           (104,234)          (79,474)        (187,965)        (178,462)        (372,528)        (104,375)          (83,623)        (186,746)        (183,194)        (359,280) Profit for the period                  -                    -                    -                    -                    -                       -        1,484,260       1,484,260                  -        1,484,260  
  Operating profit            594,027         500,665      1,177,371      1,030,199      2,215,977         468,933         381,938         906,529         784,303      1,833,620 Dividends                  -                    -                    -                    -                    -                       -          (510,898)         (510,898)                  -          (510,898)  
  Income tax expense           (126,357)        (119,915)        (247,144)        (233,397)        (530,931)          (81,969)          (77,434)        (158,600)        (151,370)        (349,360) Transfer to general banking reserve                  -                    -                    -                    -                    -                 46,340          (46,340)                  -                    -                    -    
  Profit after tax            467,670         380,750         930,227         796,802      1,685,046         386,964         304,504         747,929         632,933      1,484,260 Transfer to statutory reserve                  -                    -                    -                    -           250,000                     -          (250,000)                  -                    -                    -    
  Impairment of goodwill              (1,466)            (1,466)            (2,933)            (2,933)            (5,867)                  -                    -                    -                    -                    -   Purchase of treasury shares                  -            (41,546)                  -                    -                    -                       -                    -            (41,546)                  -            (41,546)  
  Profit for the period            466,204         379,284         927,294         793,869      1,679,179         386,964         304,504         747,929         632,933      1,484,260 At 30th June 2005      2,821,105        (392,539)           45,550                  -        1,582,578             503,610      3,847,881       8,408,185                  -        8,408,185  
  Transfer on disposal of investments                  -                    -            (36,571)                  -                    -                       -                    -            (36,571)                  -            (36,571)  
  Profit for the period                  -                    -                    -                    -                    -                       -           747,929          747,929                  -           747,929  
  Attributable to :- Dividends                  -                    -                    -                    -                    -                       -          (268,399)         (268,399)                  -          (268,399)  
    Ordinary equity holders of the parent            457,589         374,544         912,448         783,016      1,657,889         386,964         304,504         747,929         632,933      1,484,260 Purchase of treasury shares                  -                (291)                  -                    -                    -                       -                    -                 (291)                  -                (291)  
    Minority interest               8,615             4,740           14,846           10,853           21,290                  -                    -                    -                    -                    -   At 31st December 2005      2,821,105        (392,830)             8,979                  -        1,582,578             503,610      4,327,411       8,850,853                  -        8,850,853  
             466,204         379,284         927,294         793,869      1,679,179         386,964         304,504         747,929         632,933      1,484,260  
   
   
  Cash Flow Statements GROUP BANK  
  Earnings per share for profit attributable to the ordinary equity  6 mths to  6 mths to  Year ended  6 mths to  6 mths to  Year ended  
    holders of the parent (Rs)                 1.70              1.39              3.40              2.91              6.16 31-Dec-05 31-Dec-04 30-Jun-05 31-Dec-05 31-Dec-04 30-Jun-05  
  Weighted average number of shares in issue (thousands)            268,399         269,416         268,399         269,441         269,210  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  
  Net cash flows from trading activities      1,629,009          1,036,650      2,264,230       1,712,988          803,330      2,042,806  
 
 
 COMMENTS ON 2ND QUARTER

1. The Interim financial statements have been prepared using the same accounting policies as those adopted in the financial statements for the year ended 30th June 2005 and comply with IAS34.

2.  RESULTS

    The Group and the Bank’s profits for the six months’ period to 31st December 2005 were respectively 16.8% and 18.2% up on the previous year, with Group earnings per share reaching Rs.3.40 at 31/12/2005 (Rs.2.91 at  31/12/2004).

    Ø Net interest income went up by a healthy 16%, on the back of a better than expected 8% rise in the average loan book and a better overall utilisation of our resources despite the effective squeeze on treasury bills yield.

    Ø Other Income was relatively stable.  At bank level, a fall of Rs.96 million in foreign exchange profits (-23.9%), reflecting the tight conditions prevailing in the foreign currency market during the period, was more than   
          compensated by a Rs.114 million rise in fee and investment income (+ 33.6%).

    Ø   Operating expenses increased by 8.5% for the Bank and 8.8% for the Group, in line with MCB’s stated policy of investment in human resources and information technology.

3. PROSPECTS

    In spite of the difficult economic environment, it is nonetheless expected that results for the half year to 30th June 2006 will show a satisfactory growth.
Net cash flows from other operating activities        (414,440)         (2,101,628)     (2,808,447)          209,884      (2,289,321)     (2,644,069)  
  Dividends received from associates           27,388               20,561           48,049                  -                    -                    -    
  Dividends paid        (542,217)            (479,599)        (479,599)         (542,217)         (479,599)        (479,599)  
  Dividends paid to minority shareholders in subsidiaries          (10,217)              (22,586)          (19,547)                  -                    -                    -    
  Income tax paid          (94,150)              (44,145)        (410,523)          (35,955)                  -          (301,248)  
  Net cash flows from operating activities         595,373         (1,590,747)     (1,405,837)       1,344,700      (1,965,590)     (1,382,110)  
  Investing activities        (317,325)            (302,402)        (956,994)         (298,900)         (295,864)        (925,271)  
  Net cash flows before financing         278,048         (1,893,149)     (2,362,831)       1,045,800      (2,261,454)     (2,307,381)  
  Purchase of treasury shares              (291)               (2,016)          (42,796)               (291)            (2,016)          (41,546)  
  Capital element of finance lease rental payments            (2,887)               (3,311)            (7,092)            (2,794)            (3,249)            (6,953)  
  Increase/(Decrease) in cash and cash equivalents         274,870         (1,898,476)     (2,412,719)       1,042,715      (2,266,719)     (2,355,880)  
  Cash and cash equivalents brought forward      1,892,719          4,346,991      4,346,991          405,668       2,761,548      2,761,548  
  Effect of foreign exchange rate changes           52,670               32,927          (41,553)                  -                    -                    -    
  Cash and cash equivalents carried forward      2,220,259          2,481,442      1,892,719       1,448,383          494,829         405,668  
   
   
   
  By order of the Board  
   
   
  14th February 2006  
  This communiqué is issued pursuant to Listing Rule 12.21.  
  The Board of Directors of The Mauritius Commercial Bank Limited accepts full responsibility for the accuracy of the information contained in this communiqué. Copies of the abridged financial statements can be obtained free of charge upon request at the registered office of the Company.  
                                                                                                         
 
                                         
 
 
 
                                                                                                       
ordinary equity ">Earnings per share for profit attributable to the ordinary equity  6 mths to  6 mths to  Year ended  6 mths to  6 mths to  Year ended       holders of the parent (Rs)                 1.70              1.39              3.40              2.91              6.16 31-Dec-05 31-Dec-04 30-Jun-05 31-Dec-05 31-Dec-04 30-Jun-05     Weighted average number of shares in issue (thousands)            268,399         269,416         268,399         269,441         269,210  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000  Rs'000     Net cash flows from trading activities      1,629,009          1,036,650      2,264,230       1,712,988          803,330      2,042,806    
 
 COMMENTS ON 2ND QUARTER

1. The Interim financial statements have been prepared using the same accounting policies as those adopted in the financial statements for the year ended 30th June 2005 and comply with IAS34.

2.  RESULTS

    The Group and the Bank’s profits for the six months’ period to 31st December 2005 were respectively 16.8% and 18.2% up on the previous year, with Group earnings per share reaching Rs.3.40 at 31/12/2005 (Rs.2.91 at  31/12/2004).

    Ø Net interest income went up by a healthy 16%, on the back of a better than expected 8% rise in the average loan book and a better overall utilisation of our resources despite the effective squeeze on treasury bills yield.

    Ø Other Income was relatively stable.  At bank level, a fall of Rs.96 million in foreign exchange profits (-23.9%), reflecting the tight conditions prevailing in the foreign currency market during the period, was more than   
          compensated by a Rs.114 million rise in fee and investment income (+ 33.6%).

    Ø   Operating expenses increased by 8.5% for the Bank and 8.8% for the Group, in line with MCB’s stated policy of investment in human resources and information technology.

3. PROSPECTS

    In spite of the difficult economic environment, it is nonetheless expected that results for the half year to 30th June 2006 will show a satisfactory growth.
Net cash flows from other operating activities