NATIONAL BANK OP UMM AL-QAIWAIN (PSC) AND SUBSIDIARY Consolidated financial statements and independent auditor's report for the year ended 31 December 2016 ‘Theeeauied consolidated financial sttements are subject approval ofthe Central Bank ofthe LULAE and pon by sharsholders athe armed! general meeting.NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY Contents Chairman's report Independent audit 'sroport nsolidated statement of financial position Consolidated statement of income Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated statement of eash flows Notes tothe consotidated Pages 10 " 16-0Blea ‘Onbeifof te Sou, am leno weene youl ote 4 al Genel Mesing {National Bank Un Al Quan (SC) (BQ) a reset he anal ep ofthe Board of Dec fr the yer ended 31 Desa 206. Despite lensing ceonamic cenit the compton ine tang inst C5 Pestreoinform the Ban ae sheed totlwvens of AED S13 milion fr ie Sear ened 31 Deenber 2016, peng nome of AED 33437 elo ad net pro of NED 325.75 milion “Tol suc eaced AED 135 lon, Los nd avances weet AED 41 ilo wile ‘ister deport sind t AD 9.01 tlm mainly po compet year, “Toe Bark ld collaera and specie provision the tte of HOM of te non peroming leans ich recs rode mgement and eflesve menting of bur an td vanes pon. ‘Staeholde ety amounted to AED 399 bilon at 51 December 20162018: AED S99 on ‘Te Bank has consenymainaine igh evel of uy as oh ps andy slo ‘Sot 31 December 2076 sds 28 We comin fo manin oe of he highest capa adegae ras nh arkng indy hss 3. and higher than ie nimum ecb eel of 12 spt {jhe UAE Cena! Boake ‘This demons ibe fr sen fie Bark ad is capaci expan is ending pabiy, when needed “Ter secondo a:33.9% woh lose hghertan he preserbed 8% sul by the repay uta. Cost nce ras 257% which i empratvely Blowin vel. ‘oe Bows has recommended payment fcsh disend of 10%of be Shae Cape the sig 2016 the sas stv athe US expend ata det pce. Eurozone ad Sepa aie vole wie Asan cour he ni aed Chaired ood grow (it pros eave magly bc not othe exacted vel du to py ues, 2016 wines market moving even ike Breit nd US letions 1a view ofthe bed loa letra fons deveopen, Feel Reser ike ‘hemes ts nce Decrer by basins wth ines of elses in 2017 ef Pome iensancan te pee Pee es ‘asceenase Fe pene eno ge raneBING “ren the GOC curs, UAE moved aronpy the versicnon et dh growth ‘es widespread ad sued. UAE sly to mainnin a gosh me of ound 253% on neni sector wich wil ‘lathe over roth without excessive ence on tel sea reve Inasuculspening is expected to increase the Fnac aie Fhe country ant woudl boat common uring 207, banks are expat imrov wpa heir cred growth wile coin tei erp om vec sd Se ADX and DPM indies ore tng suelo dig year bt wins an ‘eck ie ecemter 2015 ate pats fet nal proascon ‘Weexpect 20171 be chalenpng year wih hopes f mre rxoary inl pce ander ‘We continued io adopt cats approach owas ct expan and concent ou (Hf close montane crsing ee prose, ‘ing fora the Bank ss cleat in place ue eace hrc rs ade nvaninge ofthe expected roth oppomnies needs. (On tha ofthe our of irr, we wou ket expe orgie Mi Hihes ‘Sheth Sac in asia Al Mala” Raler of Un l-Qseain an Member ote Ser Council of he Unite Ant Emer for fr caus upon forthe deeapment of aebak We would lo ie ose ou apeeiton for theo going ini ad supp ofthe UUAE Ceol Ban regula he cousy’s Gaal sector and ei ule ‘oie Bak dries his jee We wuld ke to exes ur ppeition and rite ocr sate, stone ad {oreipenden tanks for aching arse nd aang csinies esas Sat ‘pets Lastly we hae good tof ened manages! nd ff menber who are comitet ‘On tena ote Sead of Director, ne woul ike errs ut snc thks ol our ‘eloyecs or th onion tothe aces fh Dank ann proving sen ‘non chalengesin foe i ~—— ssn isa MUALLA Sa Soe eetDeloitte. sue Egag, EEESS, INDEPENDENT AUDITOR'S REPORT ‘The Sharcalders ‘Nationa Bank ef Um ALQaiwain (PSC) Report on the aut ofthe conaidatd Giana statement Oni ‘We have aude the consldaat calsements of National Bank of Um AL-Quivain (PSC) (the Bank) and is Sabilary (peter “the Group”) Umen ALQivai, United Arab Emiates whic comprise te conoed sateen of fuancll pestion sb 31 December 2016, aid the Comotiued samen of income, coneoliiad stenent of compatesive ince, costed Sens charge in qty ond consid stent ofeach we rhe yu tne, nd oe ‘othe consolidated Gnncl samen, nclaing a summary of Since sou plice nd ctee expiry informaon. | ow opinion, te scorspanying consolidated faunal sttrans preset fey, in all materia, ‘coget he consolidate Fianil positon ofthe Group as 31 Decne 2016, and ite costed Tina peformance nd it consolidated cash flows for the year ten ended i acordance with Inerztional Financial Repeting Standards IPRSC°), ‘Bais for opinion We conduc ur mt in accordance with lemons! Standa on Axdiing. (SAS). Oxr respons under those standards ar frberdesebed ia the Aur’ esponailie forte {ud ofthe consolidated Finca sntemeats ection af aur rept. Wen independent ofthe Group in accordance wah the Ineaional thier Standards Boar for Acsunan Code of Eiies To Professional Accounts IESBA Code) oper withthe other tical maiemect that are rev ‘0 our uote Grop's conoid fan ustement in United Ara Eases, td ne ave fulfilled ‘or eter ea! responsibiites. We believe thatthe abt evidence we have obtained is silent and appropriate to provide bass or ur oie, Key au maners Key and mates are those mates that. incu professional jade, wee of most significance in oar sit ofthe conciitedfinneial statement ofthe cutee poo. Tew ate were esd in the once of oor auf of the comoldted inca staoete a 4 wha, and informing ow opin theron, and we dont provi a sepa pinion a these mate ‘(Taf Rant Pains ber wo bm HseDeloitte. INDEPENDENT AUDITOR'S REPORT (cotiued) ey aut mars (cominued) ayaa mater oo dt ded ey mater Te 0 an nT oon Tee management teres sistant | We ete dni, ingen and operating | jsgement when cetemining the smn. and ‘mount of loan impale. The aul of Ian impairment isa key arc of focus becuse of te significant judgements involved und te size of Teams and Advances (representing 65 of te peony Individually assess loans represent maily, porate and. commercial loans which ae fssrsed individually In order to determine wheter ere esse any objective evideave tht Toa mpaited Louse classified os Iipated as soon 36 there is doubt about the bana’ ay (0 eet payment obligation to the Bank in accordance with Ue crip ‘ost ra Impaired loans axe measured a the basso the present value of expected fue cash flows Including observable market price of fir vale of the collar, ‘The impairment Toss is excused basee on the shoal tbe loans upg vale compared toe net presen: value ‘of fare cash ows using eiginal facive ‘The factors considered when determining fimpaimest loses on individually asesied sccouns include the cuomers” agaregue bomowings, sis rating, vale of the collateral and probability of sucess eposesion and the cots involves to recover the des, Iimairment loses of colecively mses loons {include th lowanees clclted on performing loans and aha value loans with common fears, wich not individually significa ffecivenes ofthe key contol to dteine wick Tours aad advances are impaired and provisions int thse assets. hes inctnded tes ‘+ systembaseé and manual controls ove the fiely recognition ‘of impaired lous and advances, + Gontole over the ingainment calculation ‘nodes incaing daa pas, + Conols ove cali valunionetimtes 4S Couols ore govemance and approval pov rekied 1 impalement provision, Sncuding ominous resent by the sanageren We reeakulted sod compared the impeienent provisos seconded for ru loan and advances a ‘er the Cental Bank guidinee which sper Specie provisions ised on the umber 0 days pst ee. We teste a ample of individ bans nd advances 10 asess whether inpirment events ha eccured fed adaguie imsimens poisons ad eon recoded intimal une Fates, we focused our atetion on individually ‘Spnifeant exposures, whee we tested the estas ‘nd ascmpions used by management undeying the Snpaimmentsdaneation and gtatfison, ‘uaton of undeingcallstal by eters expens nd estimator of ear on deanDeloitte. INDEPENDENT AUDITOR'S REFORT (onineed) ey aut mater (conned) Read atr low ou andi adessed the ey audit mater Impairment of loans end advances continued) In assessing collective impaiiest he Bank set the higher of 1.8% of ered risk weighed asses computed as per UAE Central Bank (uictses and ‘sn estimated mpirment Sllowance as er the Bak's policies dexcibed hove and IFRS. For the collective impsirment calculations wed by the Bank, we est sample ofthe daa ase nthe ‘alelations as well a evbating the mathodlogy nd jadgemens ‘avolved For the kay assumpsions ‘sed i the caleultions, we callenged management {o provide objcine evidence tht they wee ppropriste an inelodd aleve ik, We rece We collective impsiment provision as por he Bank's oles and IFRS and compared t ‘withthe cautions as per UAE Ceatal Bank 1 ensure adeuaey ofthe provision, 10 systems porting Tr sytms and conols over nancial reporting hve Ben Metifed ax am area of foci asthe Bank “fnuocial accounting snd reporting systems are Beaily dependent on complex ‘ystems dt the extensive volume ad vase ft tansacios which ae proceed dally and tho is sk that aomated accountng procedures end elated TT dependant mana onels ae not designed and opersing cffecvely. ‘and controls over financed “The widespread rane on information systems Within the Bon ease thatthe conto over ‘tcestsphs and segrepation of dis are so steal The underying principles are ingotant because they ensure that changes to applications and dat we appropie, authored and monitored. ‘Our aud approach relies on tomate contls and therefore procedures a esgned to tw access and contol over ‘tens. We assessed and tested the dsgn and operating fiecivenss of de comiols over the conned lnepnty of the TT systems” dat ae relent 19 financial reporting, We revived the genera IT onirols of te major systems. and applications Incadig swift se FTS messaging We anes the Tr secu envroument snd teed the hey cota ‘denied ws flew to business poceer. Purr ‘we pcormed joual ety ting plated y he Intemational Stn on ing. In events where any TT conto deticenies were ‘eae ding the scope of oar aud, we peta *combiaion of conta tring and bane tetng inode determine wher we could pce Felice onthe completeness and scarey of eytern feneaed information. In addon andere SPproprate, we extend the cope of oar sbi proceduresDeloitte. ‘ INDEPENDENT AUDITOR'S REPORT (tinued) Key aut matters (continued) [Kecauait mater iow oar andi ares he Bay ant maior Impairment of available forsale financial ‘The impairment of the Bank's financial | fm considering th impinmeat of avaabe forsale incruments wrt ey aren of focus given th | sour, we compared te Tar valusion of the Signiieanee of the judgement ivolved in| secure to sedge purchase pice and reviewed ‘termining the lpairment to bo recognized |i hisovieal shae performance, to ideal my tnd. the sizeof the lnancial instrument | sigan o rolenged dln inthe secre, (representing 8% of th tl ast). ‘We cafued the hy jgments made hy the Bank in lnpaimea of avlable-forsaleimestmets is | determining. the impairment. losses. Our at determined when thee as been asigifcnal o | procedures icldk, among other, vesifiaion of| ‘rlonged decline in the fir vals below i | salen appoprte anit evidence related to the ost This determination of wnat siacaco | ancaiying das ving the jdmen to ese HS rolonged requires significant judgement, cewate and comple. Further, me reviewed the Futiculry given the ancrtsnies that ext | conchions reached by the Bak to entre i the eternal muret, As deauiod ia Note dt | consistent with te appropiate application of the those soncollsted fiance statement, | Sedge ‘taking sch jodgment the an evn the ormal Ylaiy ofthe shoe pric, franca fealh of the inves, indiotry and sector performance, changer in tchnslogy and pertonl and inane eat Now ther information ‘The Boud of Dsectrs and manageneat i responsible fo the ote information. ‘The ter iformation Sompises the anna repo the Bank. We sbiaind the Caiman’ repo, pie th dato of ths ‘ute ep andthe reining information ofthe anal ert expe te tac availble ws afer ‘tat dite. The oe information doesnot inte the eonslsted Vr saterents and or a's report there, (ur pinion on te conslted final stores dovs wot cover tho ter infomation and we do woe ‘express any form of assurane conus there, In connection with our suit ofthe consoled ioc saterent, us espeniiity i to ed the ther infomation ieriied above and, 0 doing #0, comder Whether the eter infermation tt mately Snconsnet wih be consoldated nual stacieas or our knowledge obtaued ine aad, or Oherwise ‘sppears obo trilly mated. based on the werk we have performed on he ether infomation tht ve ohne pir othe de of this dors ep, me conlade ht heres mata satamiet of this or lemon, we ae reed torpor it fact We have nothing to opin this ear When we fad the eaminng information of he anna vepot ofthe Bak, if we conclude that hte i a iri ssttemen her, we are rie commit the ater the DictINDEPENDENT AUDITOR'S REPORT (estinued) Responsible ofthe management and he Direc forte consid facia sateen Managemen eponsble for he prparion anf peseutton of tse consisted Faria semis in socdans wth IntermaonlFnanil Reporing Std sd the psp in compan wih he _spplable poisons ofthe UAE Fedral Law No-(2) of 2015, and fo such itera sols management ‘termine knees 0 enble the preparation ef ceased inca tment thet ae tee fork mer misttemen, hater do fea rene a preparing the consolidated fnancal siemens, mangement is esponible for asesing the Bank's bility to contin a going ence, dco, a applicable, mates aed © going cence sd wing the sing ‘eacem tio ccming less manageest eer ntads tilda be Banke cease peas, oF ‘sn reine alerted. “Te Diet re seen o overseeing the Bank's nancial reponing proses. Autos sponsor the ua ofthe comida anc sasemets (ur abjetives arto otan reasonable assurance out whater the consolidated Financia stamens 83 ‘woe are fe fm meri mist, whether due fraud oreo, and oss an anes repo the eludes our opinion Resonale assurance hgh level of assume, ut nota punt ht 2 ‘ie condaced in ascordanos with ISAr will slays detect » mati ristatement when i exit Missense aie fo rau errand ee considered mtr if,ediviuly oi the gaease they coal asonably be expect lence te economic daiions of users taken on the bas thse coneliated ian stems. ‘As put ofan aut in acordance with ISAS, We exercise professional gmt and sini profesional ‘stoptclon thoughout the audit. We ao: + entity and assess the sks of mneialmissuement of the consolidated Finacial sateen, whether duet fraud or ener, design and pecform nit rocecres responsive fo bos ss, and hin audit evidence tat is sfficen ard appropriate to prove a basis for oor opinion. Te sk ‘miter mister esa rm aa higher han or oe eli om rer, fri may involve eosin, forgery, lnandona oasis, misepreseaions, o the + Osan nundestunding of internat cot elevant to team ode to design aut proces tha re appropiate in the cumstances, Bune forthe pure of expesing an opinion on the ‘ffesveness of th itera ono + Bvauate the appropriateness of accounting policies used and the resorableness of scccunting ‘ise arial dietoires made By managment + Conclude onthe appropriateness of management's sof the aing cocer bas of acouning and lased on the audit evdece eesned, wheter a material uncrtainy exiss reed to events oF Coons tat my cnt spit dou on the Cees to cain a gong concer. I ‘pot tothe elated dnlnser in the conoid final satements if sich cose ae ‘nadegut, o modify cr opsion Our sacison re bated on he aad enidence bined vp fo the date of our anor’ report, However, ure vents conons may aus the Group 0 ese tocotinue a goin concenDeloitte. ‘ INDEPENDENT AUDITOR'S REPORT (oniimied) Atos reposts forthe ui ofthe const fancalsatomets contin) + Evaluate te overall presentation, stem and contest ofthe consolidated Finacial statements, incoding te itclowres, an whuthr te cotsoldsed foupclal ttements represent the derlying nacine and events na mer hat ehives a pesto. + Olvsin suiciea aproprate aut evidence regarding the Finmcil information of the Bak and asin sets win the Group fo express a opinion onthe conoid financial aemets ‘Were responsible fre diet, sopervision and prfomince ofthe greup aut. We remain soll responsible fr or at opinion. We ae roe to commie othe Ditton rearing, anions fer mute, do planned scope and ‘ining ofthe aust sd seam aa dnp, eluding deilencies nie Sonat hate ey ring our ai ‘We ae aso required to provide the Directors with a sttement hit we lave complicd wit relevant tical ‘samt opading indepeodence and to commit with them al rlaoashpr abl ther mars that ayvestonsbly be hoeght a Rearon ot inependence, and whee pia relued safeguards, om he mers communicated to the Directs, we determine tote mars tht were of os sgiieance in the at of the consoled nc stenss 0 te curent ped and ae treo the key aut mater. ‘We desribe thee mtr in eras epot unless aw of regulation plugs pub cise abou he mtr or nen exten rarecucustntes, we dri ta mat shoul ot be communi incur ‘pest aan cm of ig wad ty xn th epic Report om other egal and regulatory requirements utr, argue by he UAE Fear Law No (2 of 205, weep tht |) woh ota llth infomation we considered necenary fre purposes of cur aut ii) te constidaed fame seen ave Ben prepared and comly ill mate respect, with he agplesble provision ofthe UAE Fedeal Law No, (2) 62015; 1) the Group has manne proper books of secant 1) the nancial infrmation inde the ep f th Chain ionssen with the bok of account ofthe Gran sls in Note 810 the consoled Fnac statement th Group has purchased and invested ‘nse ding the facia year ended 3 Deeenber 016, vi) Note 27 tothe come finial state nes til elated panty trnetons sndDeloitte. ! INDEPENDENT AUDITOR'S REPORT (contimeed) Report nother lel and regulary requirements (contin) 1) tas on he inormticn tht Bs bess mae sale to ws aig has can oc testo which ses us 10 bebeve dat th Group has, diag the Gancl ear ended 31 Decerber 206, ‘onvened any of he pplesble provisions ofthe UAE dsl Law No, 2) of 2015 or ia pc of theta, ts Arles of Asocitin wich would msl afl it acts orl poston ‘sat 31 December 216 ad Note 2110 the conlidued fanil sttomens dilose the sil conbuions made ding the nancial year ened 31 Decerer 206 Further, a5 egies by te UAE Usion Law No (10 of 1980, as asend, we rept hat we have brain ll the foemtion and explanation we considered necessary forthe pues of oat Sign by: ea Mis Raab Pater Registration No. 872 vip Delete & Toute (OLE) Bulli 3, Love 6, Eamar Square, owatown Dual, P.O-Box 4254, Dubai, United Arab Eras 13 Febery 2017[NATIONAL BANK OF DMM AL-QAIWAIN PSC) AND SUBSIDIARY Consolidated statement of Sana poston ‘AEST Decebor 2006 vets ‘anh nd anes wi he UA, Cea Bak 5 Bostrom oars ‘ Crane tenes ; Invent ees ‘ isan aoe Report pion onwrate Tose Dore thet 2 Cesar seas a Coroner seine: be abiee u “taut ‘Sarees ty Streets s Seteg ene u Gena ree n onl ogee Renines ais “Tota areola egy “Toll abies an shathaer eq ‘Commend cog’ bites ” anes Sata rman 3000 sonnn nos mt asa tzon0 iowa os sie sess Somes ~uaean T9396 stone ear Pia tpsae oe Yee 1st 338588 row ses Tesi sera ois saago0 rhi9zes ease) x AT Seralng Der 2d hitEneove Ofer ‘escapes oman i pet of tee coal etNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY. ‘Consolidated statement of income for the year ended 31 December 2016 eres income Income fom Islamic aaaclag products “Ta interes income and income fom Ishie Financing products lnzrost expense Distribution to depositors ~ slamic products [Net interest income and income from Islamic ‘products net of distribution to depositors ‘es and commission income er operating income Gross income Operating expenses Operating income {come fom settlement of ep case Invest gains Iinpnnen loses on invests secuiis — Provision for impirmenof loans nd advances Share of profs om ao astcine Prosi forthe year “The accompanying notes form an intgrl part ofthese conslidatd faanilstaerens Notes » 9 20 2 a 2s 2016 AED 000 450590 37689 a9ssm9 tn, (soo) 413365, 46,88, 3420 a 201s AED "000 65.888 583 519931 cago (26) snout 48155 24.90 46.667 amas) 367,048 aes 25636 «3.361 (109.188)NATIONAL BANK OF UMM AL-QATWAIN (PSC) AND SUBSIDIARY ‘Consolidated statement of comprehensive income {or the year ended 31 December 2016 2016 AD -o00 Pf forthe oar 35734 (Other compreensive dasinceme ‘ems tha are or may be reclassified subsoquntty 0 profit or ss: Avalableforsale investments: ‘Netlosson aviabifore fnvextmons recogni directly inequity (Note 8) ass) ‘os relssifad to profit nd toss om impairment of ‘valebleforsale mvestmans (Note 8) 5,000 “Transeo eqty om sae of ‘ailbleforsale vestncns 0 ‘other compres los forthe year 0414 ‘Total comprehensive income for the year 305.320 ‘The accompanying nots form an intpal prt of tvee consolidated rani sateen, 2015 ABD "000 50,761 nse nae 6 (stom 384.600onan oun popfston ates fo ued [soy We gy sto Suenao2e 4, one seve pase nex saqumseg ree aoe 5 z (oe mop pes pp . - sna ay on ssn, ow seco twa nat : - sg 2) soy agen pe . sna 9 5] 2eso4sv9 190 : xo 9) 044 owe sore contest ‘lozssquaneg (¢ w em owo.cav pony 00. aa sue puns leo jeow Comms NS ‘9T0z s2quno0«t 1 pepuD 9590 405 Sambo uy so8ue4p yo amapes parepHOsue a ARIVICISHLAS ANY (O84) NIVAMLVO-TY IID JO SNVE TYNOLLVN,NATIONAL BANK OF UMM AL-QATWAIN (PSC) AND SUBSIDIARY Consolidated statement of eash flows forthe year ended 31 December 2016 Cash fows trom operating ates Pro forthe year Ajmer or revision for tst impairment postion f propery on euler (Inereae\serei of valu of svestnent scies at FVFPL “eld for rag Disooent amaaioed ‘Gn on spol of Invesonen sures {Gn on posal of invert siden incre ‘Shar of profs rom an eoetae Los! gan) on ispestepopeny and eauipment Income fom stlement oF gal ease ‘Operating cash ows before changes in operating assets and “ibis Increase in ceri of epi wih ora! mtu eter ‘han mths ‘Dena fn term deposi with rig many greater then mons ‘ereanerease in stator depest wih UAB. Cena Bak Inornse in loan nd advances, Prentiss eflaventory (Decrease Vncrease duet athe barks Inareae Incomes depois Inara in ote inties ‘Net ash (se figenerae rom operating stvites “The accompanying notes form an integral pat ofthese consolidated aa! sstments isi) 79, 2) 18. 385761 «0.000 attr io) 6926) ssnst oon, 246.536 sess ona 201s agp 'a0) san61 nas 1791 10932 80) a8) 65712) a) ca ens) 200.000 79) 638608) 21568) rod maa 22381 65.026NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 1B ‘Consolidated statement of eash ows for the year ended 31 December 2016 (continued) Cash flows fom investing actives Purchase of propery an equipment raced fom espsal of popet and egbipmest Purch of invesimantscerioe roca om mse and sos of invement xcs ‘vider sivas fom investment seis ‘isin ested fon investment nan aso Net cash generated fom investing atv ‘Cash tows trom fnaning eteis Dividend paid Process ro setlement of tg cave Net cash (se iy enersted from financing sts ‘Net decrenseyineens cash ant cash equivalents ‘Casha cash cqivalents te Sonning ofthe your send ofthe year (see Note 28) nd esh equoaens Non-cash transaction: Dang 2 5 the Bank has signed en out of cout setiment agreement with I 26 2015 AeD"W00 asp "o00 2008) ‘eo 45656) "a96r S738 72 38,93 e128) asiaz mgs one) soso oso 619,785 2,102,809 3953085 Tae aE as rel of wish, thes aaete and tribes wer lft and educe by AED 1-61 million respectively (se Note 2). “Te eccompanying notes form an nigral pat ofthese consolidated orca sateen.NATIONAL BANK OF UMM AL-QALWAIN (PSC) AND SUBSIDIARY 6 Notes to the consolidated financial statements for the year ended 31 December 2016 A General information [Natit Hank of Une A1-Qaiin (PSC) (the “Bank is «Public Shuebolig Company incorporated in ‘ho Emit of Unum ALQaiwain(“UAQ")in tho Unite Arb Emits (‘UA.E") by Arie Decree Number {G) 0m January 5, 1992, issued by His Highwos, the Rulr of Umm AL-Gaivtin, tod commenced i ‘peraions with eet Gram August 1, 1982. The "Group comprises Nadonal Bank of Umm AL-Qulvain (PSC), Une AL-Gaivain nd Twin Towns Marketing Management (LLC), Dab (ee Note 323. The “ses of the Dan's reieered Head Offs P.O. Hox BIG, Unum AL Cea, Uied Arab Eis “The Bank is engage in providing retail and corporate aking Services though a aework of 16 branches and 1 eleoonie anking service anism UAE “The Hank cris Ile Bnkng operations tough slum Banking window established a 2005 aeross alli branch newark. The UAE Feder Line No.2 of 2015 "Companies Law") haseome it oc 6 | ly 2015. The Group as twenty foor months fom the eecve da of the Companies Lew w comply wih is provisions (tbe trantional provisions andthe Group ha vale of hese tasonal provisions 2 Application of new and revised International Financla Reporting Standards (IFRS) 21 New and revised IFRSs applied with no material effec on the consolidated Gnnacat “Te flowing new and revted IFRS, which bosameeffsive for aan peviads bepnning on or fr 1 January 2016, have boon adored jn these consoleated nancial semeus. The application of these revised IFRSS fas not had any material impact on the amounts reports forthe cucen ad rior yeas but ‘nay afc the accounting fo Future eansactins or arengemets + FRS 14 Regulatory Deferal Accounts 1+ Ammendments191AS 1 Presefation of Financial Statement relating Wsclosure isiative “© Ammendinens to FERS 1] Jomt arrangement relating to accountng for aquistions of interests in Join operations 4+ Amendments to IAS 16 Prope, Plant and Equipment and 18S 38 tangible Assets rain ‘taniieation of ceptable thods of depreciation and amortisation “+ Amendmcat to IAS 16 Propery, Pint and guipment and 1AS I Apriulare: Beater Plants ‘+ Amendments to {AS 27 Separate Finacial Statements echting to accounting investments in ‘usd, joint ventures and esosiates tobe optionally acsusted fr using the equity method in separate itancial statements “+ Amendment to IFRS 10 Consolidated Finacial Statements IPRS 12 Disclosure of Ineests in (tr Enitien and 1AS 2K Invesment in vocals end Jone Venaees wang to applying te onslidaton exception for investnent estes “+ Annual Inprovenets to RSs 2012-2014 Cyele covering ender to IFRS 5, IFRS 7,1AS and 148 3NATIONAL BANK OF UMM AL-QATWAIN (PSC) AND SUBSIDIARY [Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 2 Applicaton of new and revised International Financial Reporting Standards (IFRS) {continued} 22 Newand revised TFRS in issue but not ye eteetive "he Hank has ot ye applied the fllowing new and vised IFRS dave een sued tare at yet eeeve: New se I Anns Ieee 0 FRS Standards 2014 —2016 Cyele amending TRS 1, IFRS 12 and 14828 Amendmenis 1 IAS 12 Income Taxes relating tothe recogition of deferred ax asses for unrealised loses “Amendments to IAS 7 Siatemon of Ca Flows 0 provide disclosures that enable csers of financial swiemerts To evaluate changes sn ‘abilities arising fom Francog actives TFRIC 22 Foreign Curency Trnsactions and Advance Consideration “The ineroretationadheeseforcign currency tasastions or parts of ‘cansstions where: 1+ thor ie cnsideration tha ie denominated or priced in afore mens) + the eniy rsogniss prepayment asset oF a deferred income ibility in sesost of tht consideration, fm advance of the reonghition of the reat asst expense income: ond ‘+ the prepayment asset or dered Income Tally is non smoasiay Amendments to IFRS 2 Share Based Payment reaing classification fd measurement of share bused payment ansations Amendments to IFRS 4 Saswrance Conreets: Relating othe deen (effective dates of IFRS 9 andthe Forceming ew icence cons Sundar “Amendimerts to IAS 40 nvesinent Property Amends pateyreph $7 Sea tatu eniy sal transfer 9 property 9, of fom, savestnen [ropety wen, and only when, hee Is evidence of change in ses & Shange of use cccurs if property meets, or ceases t0 meet, the {etintion of investment propery. A. change in managements Intentions for the ase of property by iself does net consti: “evidence ofa change in ei. The fara has beet amesed tas that the is oF examples therein is non-exkastve Eeoctive for anneal periods Degnalag on ar after “The amendments to IFRS. and IAS 28 are ffecive for nual periods bepining tor after | January 201% tbe Senden’ to IPRS 12 for ‘nual periods begining on fran {January 2017 1 Janury 2017 ‘anuary 2017 nary 2018 1 January 2018 1 anuary 2018 1 anoary 2018NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY [Notes to the consolidated financial statements {or the year ended 31 Desember 2016 (continued) 2 Applicaton of sew and reis faternatona Final Reporting Standards (IFRS) (continued) 22 Newand revised IFRS in issue but not yet effective (contined) Nowand revi LERS Amendneits to IFRS 7 Financial intents: Discloares reking Siselosares about the iii appletion of ERS 9 IFRS 7 Finacial Inraments: Ducloswes tlting to the atonal Iedae accounting discloses (and consequential amendments “ouling fro the ltradton of ts edge asecanting chapter i TERS tus 9 Aumetal huruments (else version in 2008, 2010, 2013 snd 2018) ERS 9 issued in November 2009 invoduced new requirements forth Classification and measirement of fnancigl ase, IFRS 9 wes Subsequeatly amended in Ouiober 2010 to isle requiem for Sinssifestion and. metsorerent_ of nul. Tailies and. or ‘etecnaniton, and in Noverber 203 to nce the new requirement for pneral ledge accounting. Another revised version of IFRS 9 wat issued i July 2014 mainly to inchde a) impairment eequizements fr financial assets and) lined amenmeats tothe clesnfeation anc ‘metsurenent requiomens by introducing a “ir value Usough er Comprotensive insome’ (FV TECH) measurement! esegory Tor coral ‘Simple cet instruments, A finalised version of IFRS 9 which consis acoumting eguiremenis ‘or Snancial nsvomens, replacing JAS 39 Francia Insruments. Recognition ae Measurement. The sandar coats reguremerss i the allowing aves: + Classification and measurement Financial sss ae classifies by irene tothe basness made! within whieh they are bel ane theieconractia! each fw characterise. The 2014 version of TERS" itraduces a Tair value through ofber somprchensive income eategnry foe corsin dob instruments, Financ Tailies tre classified ina similar manner to der 1AS 39, however there fe difeences inthe requirements applying othe measurement of neni’ oe eet isk. “+ Trmpairment: The 2014 version of IFRS 9 inoduces an expect tretit lose model for the measarement of he impairment of Sinaia sss soit so tnger necessary fora ere event ave occured efor a rd ss recogni 4+ Hedge acsounting:Inoducesw new hee accounting model hs Js designed to be more closely aligned with hw entities undertake Fisk manigetent actives when Hedging fancil and nom Financ risk exposes, + Deresognitow: ‘The requirements for the deecogition of ‘inal arts and fale re cle forird fem IAS 39. When ERS 91 fest pptod When JPRS 9 fest applied | awary 2018NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY [Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 2 Application of now and revised International Financial Reporting Standards (HFRS) (continued) 22 News revived IFRS in iene ut no yet effective (contlaued) ow ad revised JERS HERS 15 Revenue fro Contacts with Customers 5 wary 2018 In May 2014, JERS. 1S as issued which established & singe Simptthensive made for epies to we ia accountng for reverie frsing for contacts with easlomers IFRS TS will supersede te {arent vente reeoprtionauiace ineluing LAS 18 Reveme, IAS. Comiraction Contact and the red ntrpetaions wher it becomes cece. “The core principe of PRS 15 shat an eat should recognize revene { depict the transfer of promised soos or srvices wo customers an mst that roles the consideration 1 Whigh the ent expects 92 filed in exchange for those goods or seniess. Specialy, Ye ‘Sanda ntraduces «Step approach to revere recognition: + Step I: Identify the eons) wih customer 1 Step 3 Identity the performance obligations nthe conbact. Step 3+ Determine th wansition pce 1 Step 4: Allocte te mansion pice othe porfonmance obligations inthe contact + Step 5: Recognise revenue when (or asthe ently sisi performance abiation Under IFRS 15, un entity recomises when (ot as) & performance ization i sailed, ie. when ean” of the goods or servis tinerying the paticar performance obliga is teansered 0 te ‘uslomr. Fer more preserve guldance hasbeen aed in IPRS 1510 (eal with specie soeares, Furtbeomere, extensive dscesures ere ‘require by ERS 15, ‘Amendments to IFRS 15 Revenue rom Conrace wilh Customers to January 2018 ‘laity three aupscts of tho stundad(entfVing performace ‘hligntion, principal versus agent considerations, and lceising) and to provide some transition rele Toe media eonteets und completed RS 16 Leaver 1 January 2019 TERS 16 specifies how an IFRS reponer will ecomise, measure, present tnd dssloe lenses, The standard rovides single lesee aecouning odel, equring lesces 0 recognise assets and bile fr al lass Us the leas term 12 monte oles onthe underying ss as Tow sul. Lassors continue to classify Fees a8 operating cr fine wth $FRS 16° approach to lessor aocountng substantial unchanged ‘Bom ts prsectsor IAS 17[NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY. 20 [Notes tothe consolidated financial statements for tho year ended 31 December 2016 (continued) 2 Application of new and revived Internati {continues Financia Reporting, Standards (IFRS) 22 —_Newand revised TERS in ase bot not yt effective (continued) bffctve for annual perids Now and revised TERS fee ‘Amendonens to IFRS 10 Consolidated Financial Statemenss and 1AS —Eetive date fered 2 Investments on Associates cr fon Yenures (2011) relating othe indtinely treatment of te salar conttion of ese from an investor 1 is associate o joint vente Manogenet anispses that these ew standards interpretations and amendments wil be adopted inthe Bank's consolidated financial siatrents as and when they are appiable ahd adoption ef these ew Sandacs, interpretations and amenmens, exept for TERS 9, may fave no material Impast onthe ‘consolidned nancial staemonts of Ui Bank isthe pti f intial piston. Manageme anise that IFRS 9 wil be adopt in Se Bank's consolidated finan statements for the annul pei beeinning Janeary 2018. ‘The appliaion of IFRS 9 may have significant ieput ex fsmounts report and ieclosres made inthe Bank's consolidated faancial statements in respect ofthe Dan's Gnancial asst end Tables. However, ts not practicnlet provide a reasonable extinste of fees ofthe aplialion of thir standard a the Hank sn te process of performing a detailed review. 3S. Significant accounting policies 34 Statement of compliance “The conoldatat Fanci statment have been pepe in acordance vt Internationa! Fnenil Reporing Stanar, 32 Basis of preparation “The consolidated final steronts have ben prepared onthe store oat basis, expt er the ovation of cerin Sinai isiamens. For the pusose of the conoid final statement, the reali ed Final postion ofthe Bank are express st Arab Eres Diruns (iv thsand) hic isthe functional furmeey ofthe Bank andthe prseninon cumency forthe consolaed Finacial sateen, The principal accounting policies adoped ae set oat bo. The Bank presents consisted statement of finan! poston broadly in oder of qui, wih a distinction tse on expects repiting recovery er setlemant within twelve mouths ater he reporing date eurent) Su mon ha Swen months er he rpg date (ou cron) pected inthe ts. 33 Bass of consolidation “The consolidated finns statements of Navona! Dank of Umm AiQaivain (PSC) and Subsidy le “Group? incorporate the finial serene of te Bank and ety entoled by the Bank is Subs).[NATIONAL BANK OP UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 2 [Notes tothe consolidated financial statements for the year ended 31 December 2016 (continued) 3. Sigaiteant accounting poticesontinwed) 33° Basis of consolidation continued Como is achieved when dhe Bank: ‘as power ovec the invests: is exposed or his rghs, fo variable returns fois involvement withthe invests; and asthe ability to 28 it power to ae is returns “Tho Bask seasesses wheter or not gnats avenge IPGL and eleumstances indicat hat there ae ‘anges to one or mere ofthe tee elements cf contol sted above. ‘When the Bank has fxs hin a mort of he voting ahs ofan iesce, ite ower over the invese shen the ving ght ae slice fo give the practicability 9 duct the elevet activites ofthe Jnvestes unlaraly. ‘The Bonk soosiers ll relevant fst and creomstances in asesing whether rot the Bank's voting vighs in an nvesie are scent to give power, ietuding: + the sce ofthe Banks holding of ving rights relative to the size end dispersion of holdings ofthe ther tote elders: {ictal voting igh held bythe Bank, other vote hades or oter pares: ‘Tights arising from ober conrastealavangements; sd “omy aditons ees and circumstances that indie thatthe Bank has or doesnot have, the euen bilty to el she rolevant eaves atthe tine that decisions need tote made, inclading voting parr ot previous sbrsolde meetings. Consolidation of a subsdiny begins when the Bunk obtains contol ener the subsidiary and ceases whe te Bank loses control ofthe subsidiary. Specially, income and expenss oe subsidiary acquired or disposed fof during the yer are inluded inthe consoided statement of incre and ther comprehensive income fom the date the Bank ain contol ul the date Wea the Bank ceass to conrol he ssidiry Profi or toys and each component of othe commpechonsve income aranbited othe owners ofthe Bank ‘and o the noncontoling interests Total comprehensive income of sbi is ributed to the owns ‘fie Bank and to the non-conrling nares even this rene he aoa-ontoling interests hoving 2 ‘etc balance ‘When ncessry, adjustments are made to he financial statements of utsdaies to bring their aesountng polices no line with the Group's weceurting pois ‘Al ineagroup asots and Heiter, egy, income, expenses and essh flows routing to transactions ‘teen members ofthe Gecup ar elisinated in fll on onsoidtionNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 2 [Notes to the consolidated financial statements {for the year ended 31 December 2016 (continucd) 3 Significant accounting policies (continued) Sobsiiany: ‘Deas f the Bank's subsidiary as at 31 Desembor 2016 is 8 flows Proportion ‘am of ewnership Country of Principal abelian, jintenst_____ Incorporation as ivity _ ‘Twin Towns Mastting 99.33% UAB. Marketing Management (L1-C) sranagement “The reraning ety ithe ove subsidiary isha tthe Hank boneficilytrough momineeanangenents. 34 Investment in an associate ‘An associate is an enty over which the Bank hs sii infuens.Signiiant in ueee isthe power to panzipat inthe Fiance and operating poicy decisions ofthe invest but fs not conta of joint onto over those pies, “The results and atts and Iblis of an associate is incorpored in these consoldaod finwncat since sing th equity method of acounting- Under the en ted, an iyesiment i an ascents is inilyrecogosed in the coated statement of financial positon at cont and adjusted thereat ‘ecomis the Bank's shure ofthe profit orks and oer eenpreesne income ofthe eseociate, When the Bank's sate of lores ofan associate exeeds the Bank's iret ie iat associ (which inludes any Tontexn tnteeste that substance form par of the Bank's ne ivestnent inthe associ) the Berk pe apHPET BPINA PER PET ooo.cav sod pe foarte Spain (ponusues) 992 49qw99HE 18 PIPL EDK OH) 309 ‘Sjusuipyens feroueuyy panrpryosuod aq) 0} 290M 66 AUVIMISANS ANY (OSA) NIVANIVO-TY WHA AO ANVEETYNOLLVN.[NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY [Notes tothe consolidated financial statements for the year ended 31 December 2016 (continued) 1. Other asets lovenony* Interest recsivable Propayaents and deposits omer “inventory represents propentosaeeied in setement oF deb. 12, Duetoother banks Repurchase agrsment (Repo) Doman deposits 2018 anon 10896 30798 ost 2016 AED ‘800, ‘70000 ‘000 2015, ABD 000, yon7 00,000 va During 2015, the Bank had signed repuchasogareement with axther bank, om reprising tes of 3 months with otriy ate of 6 fanuary 2016 and eur! charged at 0.75%. Collateral given agsins hs ‘Repo borrvng i closed iw Now 8 the consolidaed fran stores. By geographical area Within UAE, Outside UAE 2016 sep °a00 ‘ro00 0000 2015, ‘AED 000 10,000 70.07 reNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 18, Customers deposits “Time deposits Savings depos Curent accounts Margin deposis Islami customers" deposits ‘All cutons' deposi are fom customers within UA, 14, Othor inition Accounts payable Incest payin Provsian far eployces! end of service benefits ‘other sat bere Divideed payable Other ‘Movement in provision for employees end of service bene ‘At Janay Provision made during the your (Note 24) ayiment ade ding the eur Aat31 Desemter 2016 ABD 000 6.781536 "20880 1902186 SLss4 oss 9012989 2016 arn 000 ese 2.793 123 11396 rss aang 4 2015 AED "000 6583.68 i312 183.895 aati toga 8.76423 2013 ‘AED "000 21086 19.136 24nd 302 1699 eas? 6372NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 2 ‘Notes tothe consolidated Financial statements for the year ended 31 December 2016 (continued) 1, Share capita Issued ad fly paid. "YR46 milion orinaysares of AED 1 eee 16, Statutory reserve 1 accordance wit the UAT Federal Law No (2) of 2015 a amendeé, andthe U.A.E, Union Law No, 10 TORO, ak amended, 10% ofthe profi erty your tte to statutory rexeve ul such time as the balance inthe reserve cule 0% af the pid up share capa. No profit was warsered inthe cuent Your othe sataory reurve, se excoeds 54 of the ase Shae capa of the Bank THs rear snot ‘able fer dstibutin. 17 General reserve The Bank sina « gover reserve and the coutbutons o this seve ae made tthe dsrtion ofthe Diners. Tit reserve my be lined foay purpose be dete by a esolution of the shreholers ofthe Bank at an Oninary General Mestin, 48, Commitmens nd contingent Haities 5) The contact amounts ofthe Ban's comminents and ceningent ies ae a lows 2016 2018 arp'00 = AED*000 Garaoes 577310957546 ener of ere B73 ‘Comments o extend cxeit 193480 Other ‘area ‘874 ‘At31 December ‘79se.6us 7,658,578NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY. 48 [Notes tothe consolidated financial statements for the year ended 31 December 2016 (continued) 18, Commitments and contingent Habits (oatinucd) ais 2018 AED? ABD000 ‘By geographical area Within he UAE. rsnig7s 7,538,639 Outside the UAE 87629 119339 ‘passin 1,888,578 CGuarstess, which represent ievocable assurance that dhe Tink will ake payment fn the event that 3 Statomersannot meet te obligations to hed pes, carry te same eels a oe Lecers of ere re writen snaking bythe Bak on baal ofa customer authoring third party tow dats onthe Dan up to a sipiated anus, under specific tems and conditions. These Beers of edt me collateralized bythe underying shipments of goods 9 which they relate ant therefore fave Senicanty les rik. ‘Commitments to extend ctet represent vawsed portions of msthorzaions to extend cred in the form of Tonns guarantees o tes of ert, Wit espe! to ere sk on comment (0 extend ere, dhe Bank [potty exposed to loss a amount ext the al unssee eons. However, the likely Snount of Loss though ot gual, x conidraly Tess thao teal unas commitments sins most ‘Dinmont to exten cred are contingent upon customers nanaining specific credit sanded, While here is some rik aos with the remainder of comament, the rik is vewe as fow-modest Since tress fil fom fe poslity of te unused portion of tan authorizations being dan by the “Eisomer, and socond rom thew deawings subsequenty ot being pad a5 doe, Tae Hank monitors the sin ata eh cs bes vg sien gees 8 Be ee ‘risk than shorer er comin b) Capit commitments ‘A134 December 2076 the Bak has eapitt commitments of AED 6.2 lion (2015: AED 2:30 mln) 19, Interest income and expense {oan and ecevables {Lom and ndvanecs Depots with the UA. Contrl Bank Other bas snvertment in det scoutsNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY Notes te the consolidated financial statements for the year ended 31 December 2016 (continued) 19, terestiacome and expense (continued) 2016 ABD ‘000 Interest expense inant ihe st amoetised cost Comer depos 54603 Borowings frm other backs 1 sas 20, Other operating income 2016 ‘Anp-000 Rens income 988 Foreign exchange income et 530 Gain on daposl oF nverton 1313 Other 9497 34n0 21. Operating expenses 2016 AED “U0 Saf eats (Note 24) sien Dccupancy cos 2350 Depreciation (Note 10) 23s Siatf benefits (Note 24) ‘18s Foes and eominsion expenses 1st ther win 2015 ass "29 14.94 201s arp 700 298 S08 7903 24303 * cludes an amourt of ABD 0.47 milion (2015: AED 0.17 rilon) pid towards social contibuton ‘Gnclading donation and charity) ding the yea.NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 45 Notes tothe consolidated financial statements {ar the year ended 31 December 2016 (continued) 22, Income from eettement of egal ease ‘As of 3 Desember 2014, oer lists included AED 91825 milfon (eguvslnt of USD 250 aston) ‘cele fom Giodel Investment House Kua (°GIH") ss vance pyment on the repose issu bond converte into 330 millon shares of ABD 1 each Wiha prem of AED 6.15 per share totalling ‘AED 2.359 billion This tangent was entered through « Memoraziu of Understanding (MOU) ded 16 July 2008 During Decumber 2008, GIF seta ete othe Bank witdrawing rom the above transaction and roquestd a refund of tho advance amount paid. Following legal advice the Bank dd not repay the ‘vanes amount and procedeé or completion ofthe transaction ty secking the lanes amount fom GTH, Since the yen 2008 tl 2015, Boh parties (he Sank and GTM) were engaged in egal proveedings ‘Daring the your 2015, both pastes have slaned an out of our setnen greenent to withdraw fom el proceedings ond restive af outstanding sues, clus and counter clans between them regarding the ‘hve mentioned case As per the terms of serert agreement te Bank received an sinourt of AED. [F712 milion (equatet fo USD 74 milion) whieh was recognise as Income from seement of Tega) ‘ase during the ear ended 3 December 2015. 2. 2015 ABD "00 Dividend income: 1) investment securities avallble-forsile 3708 25,860) ‘) Investment secure a ae value through profit and loss 73 52 ‘air valoe gals) on investment securities at ae vale through profiad toss 130 (o67, Foreign exchange vation a2 0970) "Net discount amos on debt securities ‘360 ‘360 Prefitondispost of investment: "Investor seus salable forsale 1306 26 ‘By nestmert sours a ir valve hrs prof and Toss ons z other fs 6 2A Statteosts 2016 2015 en‘o0) AED "000 Stat eos Sslree and allowances 26 94.965 Staff tring | ‘sa 6 Housing and medial 13a x20NATIONAL BANK OF UMM AL-QATWAIN (PSC) AND SUBSIDIARY 46 [Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 24, Stuf ests (continued) 2016 2015 AED ‘Os AED "000 Stuff benefits Pension 4139 4s End of service bona (Note 14) 2308 3281 other 2 2686 9.85 99892 25, ase carnings per share ‘Te base carings pr shar is clelaed by diving the prof atsibtable to sharcholdes by the average numberof ordinary stares in sue during the yo. ane 2015 Prof forthe yar in AED 325734000 $42,761.00 Average mumber of shares issue {ysis 00,000 —1848,00,000, Basis eumings se share in AED oO “There were no potently utive sha as at 31 Deventer 2016 and 2015 26, Dividend por share Atte Boos! eating eld on 15 February 2017 the Bead of Dieses proposed a cash vide of 10 4% ‘enouating to AED 184.8 milion forthe year ended 31 December 2016 (2015: cash dividend amounting to 5142 miler). 27, Relate party transact “The Bank canies out tansctons in the rnary course of fuses with rested partis, defined as Sreholders who have a signet oqilyinerest in the Bank, abd all Duectrs of te Task and Companies to which such sharcholder tnd Diretors have a sgaeant interest and key management Jenonnel ofthe BankNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY. 4 [Notes tothe consolidated financtal statements for the year ended 31 December 2016 (continued) 27, Related party transactions (continued) Dasing te year, the Ban entered int the Following significant amsctons with related pate in the owdinaty couse of basins. 2016 2015 ABDUGO ———AED'OUO terest income 28403 29,099 Interest expense asus 20018 Remineration of key management personel 6227 4356 ihe incre 119, 2st Diresors foe 1900) 1300 Gain on disposal ot inventory a9 “The Group has emer into transactions wih lat parties which vere made on substantially dhe sme terms inludlng interest rates and cote, as Those prevailing at the sane time for comparable {easton wil hid pris, ‘Outstanding balances a the end of parting dt fom wansactons wit rele partes are follows 206 2013 AED'ON@ ——-AED'O0O Loans and advances wes Boat ‘Cosiomer deposits igs 1392260 Trrevoenble commitments and contingent bites Twins 1.500 28. Cash and cash equivalents x 2015 agp" AED "000 (Cashin band and balances with U.A.E. Cental bank (Not) Heres 170494 “Tern ant domand depos with ier banks (Note 6) Tstsaee 1351.93 ‘Stator deposits (Note 5) faosaet (819,78) (Certfiates of depots with vigil mats over3 months (700,00) : 2,402,509 29, asines segments “The Bank organize nto two main busines segments: Reta snd corporate banking -whersin eal banking comprises private easter eutent acount stvings toounts devesi eed ard debit cad, estomerToans and moraags and corporate basking involves tranacions wit cxporte bodes inctuding goverment and pull Boies and compres loans, ndvences, ‘epost and rade nance tnsacions. “ressuy ad investments ~ incorporating the actives ofthe dealing oom, related money market foreign xchange Hansoctions wth eter banks and financial ition incuding the WA. Cental Bask and ‘Spertions bythe Ban's Head Office asa woe, node of which tally constitute a separtely reportable Seren[NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 6 ‘Notes tthe consolidated financial statements {for the your ended 31 Desember 2016 (continued) 29, Busines sevments (continued) ‘ansations between the business segments areca nol commercial erms and conitons. There are no ‘material ions of income apd expese arising been the bisiness senets. Segrient asses and abies comprise operating assets and leis, beng the majority of the sent nana posit ems. Primary seement information Retailand Treasury enrporate ‘aid Tanking investments Unallocated Towa AED‘O = "'AED'000 AED 000 AED ‘O00 [34 December 2016 ross income 467,138 aes 7988 3973 Segre result 339903 884 98359) sass Seament assets 5.019,130 6339882307 ‘Segment iis 9273383 2su.le4 11596 966,73 31 December 2015 Gross income 199.756 3561 11300 546.667 Segment result 323.186 4681 17309 52,761 Segment ase g331309 4972000 we 3m08 Segoe Tis 9.02,544 374231 1679 9,388,454NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUESIDIARY [Notes tothe eonsolidated financial statements fur the year ended 31 December 2016 (continued) 30, Classification and fr vale of financial ad non-financial struments 23 December 2016 Cash an bane th ne UAE Cente! Bank oe om ot bans oat ant acances Invent seus Coser aceptaness Property and eaient 51 December3015 ‘caznand bates wth he UAE Cont Bank ue os ier bas ons ad advances customers seeps Property nd espe onder anes Loans and seenvaber 112908 seasee Lamas rasan sasaot ase ma higssaan ease. Atboe asst ‘wading Aboot 23,30 anns0 3633 svaabie ‘ors ano cous 6579 ‘AED 1957 oxiae san nines ett ea) ra vase 9 ‘To AED 1.2908 staes 08398 96 1981 oan ne nss301 s3siae3 sts insane ass 160 xn sel paseNATIONAL BANK OF UMM AL-QATWAIN (PSC) AND SUBSIDIARY 30 [Notes to the consolidated financial statements {or the year ended 31 December 2016 (continued) 30, Classiteation a {air vain of financial and non-financial instruments Continued) Atamortised —Now-financiat, Linbiives cist ‘Tota 000 _AED‘000, 31 December 201 Due to athe banks 70,000 : “7000 Cusomers deposi 9912959 : 9.012999 Cusine ascepances 200,393 zi 260,393 ‘Other tiabities| inst 30384 mp ‘Totti 9,535,789 30384986678 231 Dewar 2015 Duet ther bnks 70.417 : 170.17 Customerr depos 47663 : 766403 CCstomereaccepiasces 195.842 295.582 (tr ibis 11638 zat 13a “otal ibis 999.240 ans E 8 Fair valve measurem Fri yale fs he prise that would be eeclved to sll an asel or paid 4 transfer Hib ia an only tuansttion Between rpavketparpans atthe measurement date. As sch, dffrences can aise baweeh bok vluts an the Fi vale estimates. Underiyng the dition of fir alu is he presumption thatthe Bank fsa ening coner without ny intention or rquienent 9 mateally ear the sae ofits operation ‘ort undorake a wanszton on adverse ems io addition, for financial reposting purpss, fie value measurements a categorized ino Level 1,2 0¢3 tase om the dogrc to high ty Inputs to he fr alse mencererent ae observable andthe significance ‘fhe input othe fir vale mensizerans in it tay, which ae described as follows + Level 1 fui value measwremens are those derived thom cuoted prices (unadjusted) in active markets fr ident! ases or labs + Level 2 file valve mencoroments ae those dorved ftom ints eter than quod prices ince Within Level tt ae observable forthe aset or bili, ether dtetly (Le as prices) of Incicetly (se derive fom ais 4+ Level aie yalue measrements me the derived trom valuation setnigus hs Ince ints ar the essere ably that reno based om observable market di (unobservable inputs).NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY st Notes tothe consolidated financial statements forthe year ended 31 December 2016 (continucd) 30, Classification and fir ylus of financial and non-financial instruments (continued) air value measurements continued) Rar sla of financial ntrmonts moans a morse cost “The fae vale of the quoted dsb sirens kt eld to-maturty st 31 December 2016 amounted to AED 470.81 milion (31 Devenir 2015" AED $42.48 milion). The fi value detenination of the quoted debt inseuments il fell under fovel | eategory wherein fale value Is determined based on inputs that are quoted prices (onadjusted) lave makes Tor iene 3686 or Uabires Unt the eniy can aseess at the ‘neasurement date -Raceoas dtd above, the maagemant considers tha he caving nouns ef financial assets a bes ‘neosured a amorsed com inthe eosolidsed eal statement porximate ter fai values. Valu techniques ond assumptions oped forte purposes of measuring fa vale “The fie vals of finncil ass and Sanat ables are detaemined using similar valuation chniqus and esunpions as wud for the year ended 31 December 2015, air vate ofthe Banks famcil eset that are measure a ole vale on recurring basis Some ofthe Banks Financia aust ore mensred afr alu toon of he reporting psi. Te flowing, tuble give nfonnation shout bow the fi vals ofthese Francia ats are teins aac ass fue vatue seat ett ot Dewar Bester YVatetion—Sigutiant utebervabe “ae OHS Eales elalqus ancy oboberatle input at ‘noo AED ‘000 Meare ‘apts pet ‘alse Gated coy GSNETA «TERS Level} Gut sn» None Na nate aus 4207 Lawl) Net tc sean —-Netaner Hiker et ety ecicr neta dor to he ae sl of rt avy ot ‘hee, ftst a leer ‘omnia vane, eae orm, Net comin be on fe ier eae {eaiethene! Tania nga ante usd ety aye 36 Le Quued yess ie Note NaNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUESIDIARY 2 [Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 30, Chisifcaton and far vale of fnancll and non-financial fstruments continued) Fai valve measurements (patina) “There note no transfers Between cach of ove dung the yer. Thee are no inal aiies which shouldbe etepoied under any ofthe vel in tbe above, “The mover in he level financial assets were due o exchange dienes and changes i ae value 31. Financial ris management “The Bash’s etvites expose it toa varity of Finacial risks and thse activites invlve the a “Cultation, aseptane and management of some depres of isk ot conbinton of risks. Taking risk is ore foihe nana business a the operon risks area ieviuble consequence of Bing in busines. Tae [Ban's ui herefoe fo achieve an appropisteRalunoe Dtwoen rid nd etn and minnie potest vere oes onthe Bank inane portance credit isk ‘The Bank assumes snalicsisk as part of is lending operation, which fs ideied as the risk that ‘burterary wil cause a financial fos for the Bak By fling to charge an bligaon Cro risk ‘Eposes arise principally in foans abd advances, du fom banks and investment securities measoed onined cost There is aso ero risk iv balance sheet fnapeia orengements suchas leters of ered, fiarences and andra kan commitmenis, The fet risk management and conto are eorralzed inthe fos Risk Deparment with Ue fllowing objectives: 4 Tomoasire, monitor mitigate sts both at nro swell as mao lve + Tota boiling and wasting high uy eet pore and mininise losses, + Contin non-performing esas through pevetive and caraie management + Vodeatify ay warning ins and inte tel eonetve ato. est isk Deparment as various units vi, Potfoio & Hating unit, Remedial Unit nd Risk Continent ‘Unit nteraal risk reting stems ave implemented to comply with IRD Foundation noms of Basel Bi Remedial Unit and Risk conlanment unite are fametioing fo prevent scretion of non-performing ase tHrough timely aston and maximine recoveries through vigorous followup, cisifeation of delinquent “Eipoares end vesotte compromise proposals wherever aque. Note 3 summarize de Bank's expose perdi rs radi ick Muigation Collateral - Tes common prtice to btn collier] secures to saegunrd the ftrest of he Bank in cas ff default Suck miiant are tacked by proper documentation tnd eplly binding agreements, The most ‘ame forms of tnt securtiy accep by the Bank ate land on bulng, listed equity shares, Gao ‘epost udr len, vehicles ee ‘ier comforts - personal guarantee and corporate guaraiees ae als taken as connor, wherever deemed ‘aseNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 38 [Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 31, Financia risk management (continued) Market sk Mavis foc the Bask refers tothe ek bocanse of which the vale of is on or ofblance set positions [rc adveracy tfc defo movements poly niveret aes, curengy excharas rates and investment 2e.ee Thue he voality in market level oF invest rts, foreign exchange rates an lnvestnent prices Expose the Hank's earnings and epi oisk, “The market ith depariment ofthe Bonk sBérestes thee risk othe Ase and Liability Commit (A1.CO) TRS Tear Uasis hed on stpuloted som for Asset Libilty Managesent and fvesients, The ALCO ‘Uke. Saretive mesures spo he Bansal market risk poles an see business direstins Liguitty isk ‘iiss ite sk that he Bank i be ule to meet tbs when they al due igus ANS Sted ty market daruptions ested dovengrades which may cxse certain sources of ansing 0 dy SF nainey, To guard against ths risk, management endewas to diversify funding sees on a Bonus backs and anageseses wih guia’ ming, The dayoday funds management is dons at ‘uy sotto mattatnsanfactony Higd sat. Th gudlty potion i monitored and reported 1 top ‘Magcnest ona ay bes, The Bank's ALCO tax put pace te policies to manage the Fg risk {hd itor the postion regan Nov 3 suromaries te Bank's esposureto quit tsk Taterest rte sk Interest rte risk i the potential that changes la invest tes may aersey afc he value ofa finwnciat ‘Ryton or pont, rte condition af the Bank as whole. Atos interest-mterisk artes in all pes re Fbnetliumenta ts ost prnoaaed in debt fsrumests, davaives hot have det insrunens 25 ‘Helv anderiyng rteence acetal ete derives whose vals are likes fo market interest ates. Jn eats he wales of longer ter insole oflen tere seaive Co interstate changes chan sho Seto ahoterserm inseumers, ct ofiteret rae rsk ci be labelled yeld eure risk, which Feiss tothe imperfect conan of leet aso diferent tris ‘The Bank manages lis interest rate ssnshivity position based ov anicpted and actu terest rte ‘ovement, rarer to minimise net igerest fore NI"). The Bink analyses ts interest ae senstiviy eon base onthe eofratalreprcing or mtu ats, wheheter Is car, regulaly. The impact en [ics poston ts ealelated by way of 200 bats points (ps) change in erst oes and resultant Lt de ae Inte ivovoe a the Bon, I ended rough ‘he fit preseribed forthe same, Now 5 summaries Bankr exposure toilet ask, the year ended 31 December 2016, the effective interest at ond fom ater banks ven 0.8846 arated censieate oF depots win Cenal Bask was 020% (2015: 0.108), loans and advances was Solbs (201s, S00) investment section af hakifovnatsriy was 7.60% QOLS: 139%), customer “posi was 0.62% 2015" 0595) and ce a eter Darks was 0.70% (2018: 029%) Carveney isk The fan takes on exposure to the effects of action in the prevaling fee careney exsange rates iis nana! ponign and cash fla, The Board ses limits onthe level oF exposure by euroncy and in Sburezte rth overitht ad intreday postions, which are monired by the Treasury Department. Noe See marines te Bank's expire to foci curacy exchange 7h,NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY cy [Notes to the cousolidated financial statements {for the yeur ended 31 December 2016 (continued) 31. nana isk management (coninned) ‘Operational risk ‘Operational rick ie defined the Fk o log resin fom taequse or fled itera processes, peop fan) systems, or fom extemal event, Th definition telodes Tel risk, but excludes seaegle and ‘putational isk. Operational risk I oren in all usibess activites management of this isk i itl to the seatvai objrsive ofthe Hunk. While operations! rik ennot be fly elimiated, management endear to minnie the lowes by ensuring ffetveInrasrctwre, cools, stems und individuals are place tbvoushout to oegennation, “To accomplish the above objctiv, the Bank has dedcetod operational risk management funtion, whith is proatve m developing snd fmplerenting ew methodologies for he Setieatonassessnen, monitoring, hd conta of operational rk, Systems and pocsuures ae ia lace wit clear segregation of duties and ‘posting ise to reduce operational sk, Compliance wit he gels i monitored though rbost nema ‘onto an comprehen ner! wai system, “The Bank has implemented undernoted proesses sed at moitring and mitigating operations iss + Bottom yp approach (Risk and Contes Assessment for idenieation aed assessment of operational Fish at bonnes ts ‘+ Esublshing centralised dnabas or eaptuing operation rik losses. ‘A comprehensive Business Coningeny and Contity Plan to atpate sess situations and iia the Fak atcined wth thems onder plementation, 32 Cradles set quality and wpcing aon 31 Decomber 2016 Die fom Loans Investment oruer banks an advances securities ‘AED ‘000 ‘AED "000 AED 000 Iepaired Substandard : 182,02 p Dovbifl 45463 fs los i I B i e785 E Speci lowance For impalement ata 7 i anna -[NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY [Notes to the consoidated financial statements for the year ended 31 December 2016 (continued) 32 Crash continued) ‘Ase quality and ageing 8 on 31 December 2016 continue) Due fom other banks ‘AED'000 Amount past due but net impaired Past de above 60 days Paste estan 60 ays ; Neither pas enor impaired 1 stas6s Collstiv allowances for ipsiment 4 1st4s6s Ccanying eount 1544868 Lane and advances ‘AED "000 3617 Hao 13.631 429,993 cate 267.909 sss0s.a04 58 Investment ‘ecules AED "000, ass77 488,177 48817 “ota collateral vale & AED 14,79 milion (2055: AED 13,886 milion) against secre ans and dvances of AED 6,410 milion 2615: AED 6,(28 million. The Tar ale of calla on impaired loans {scaimated tobe AED 679 milhon (2018: AFD €23 milion). ‘Ase quay and ugeng ws on 31 Decenbe 2015 Dae fom tert ‘REDO Impaired Substandard 5 Doubt > oss z Speci aowance for paiement Lane and advances ‘AED "00 150404 anni 36.284 14959 i686) 0273 Investment AED 000NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY [Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 32. Credit sk continued) Asse qunlity and ageing as on 31 December 2018 (onan) Amount est ue but wot igre Past due above 60 days, Past ve less than 60 days Nether past de nr Coletveallwanees for impaioment Casing amount Geographical concentration of asets 31 December 2016 Within BAR, Within GCC countries Other sons 11 December 2015, Winn UAE, Within OCC countries Other counties Du fom other banks ‘AED 51.895 1 3st.393 Die fom other banks AED" WOO 191492 91,851 16595 1.344868 Dae fom “other banks ‘AED'000 80.000 32390 379.503 1381893 Loans sad advoness ‘AED "000, 4508377 (e984) A338. 313.808 and advances ‘AED "000 8717069 919 ans sod adeno ‘AED "000 grim 91.928 315,804 56 Investment AED 000 Aevestment AED "000 090.518 51898 7 1,143,196 Savestent AED 600, 475.702 asco m2 1225896NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 37 [Notes to the consolidated financial statements for the year ended 31 December 2016 (continued) 32. Credit risk (omtianed) Rated and nated exposure 31 eer 2016 (Cri Risk Mignon CRO Asst lass On iaance Om Rance ‘Shea sheet expo CRM Exprsure an Grom esponute bere are Weighted Ouisanding sferCCF CRM "anete ‘Sebtow "Army ABD "001 AED“WED—AED"O09 AED" huis sovereigns 1.538281 = usss20t -1ssant {imeem nonce! Govern psi feces PSES) 24678 srs ier Gams on Sons asia adage 2 asians {Cuts oncrponies 609950 606387 3.278397 450.7604. ‘Chime cae he eguatery ea perl Senso gigs 300315 2183 HTN Gains cued by aareeetoms 243936 «dst 23SS0 greg HDNET Pst doe oes Siesse tase sous 2396350 GOTO ‘her ase 520.05 S isane S gisey T8206 ‘rob derivatives = 7 mo _ Tot ins Tayme7 SNH 16s10R2 RomaTS 416TH ane “ota erditritk neh aes 163.406NATIONAL BANK OF UMM AL-QATWAIN (PSC) AND SUBSIDIARY [Notes tothe consolidated financial statements for the year ended 31 December 2016 (continued) 32, Creditesk (continued) 91 Decumber2018 Assetcses ins on soveris ‘Shun om accent ‘Goverment bie ‘oot ents SES) ‘Gt oe banks ‘Ch copes ‘Shanice he emery rs porto cals scab relent ropes Cains secure ‘cunerc e xite Past do ans Giherases ot lin “otal ret isk veighed ass onsatece ‘Sheet ross Lane aw aa ross oo aap Bsns sn616 ‘omrBaanse ‘Sot eagoste erect "NSD om as 168038 228601 one a 3.486.690 ‘re Rik Mienon (RN pene CRN sxpose tere afer CRY ca Av'00) AED wo AED-W Lanse s3ma36 reo ins 2567395 aamiare ‘Ssoase saam same 2326S 175857 as asa aaa yhoos 2am stem 3090 aos ose = 100.76 aoe "st vera s3g9s208 voaasr war snes sais aznian ‘nse mas is ome sai9a37soem pang-uoN sesseimnuy 10 soins sen ‘suns bean ‘soumape poesia srveq apo wo 8 sD 2 V0 SMI I youd anne step Spm Sud seas fo sg yp pase ‘nous Bucs we ho pp sngum Sse «YEE aM YO AE NOOR gM aA “KEANE YRIIEUED Jo SsEG fsbo PRUTST 139 a] SGN) PLE TOSS o STD, wsrcipmbry se (panunwos) 919z 94929q 1 PoPHD 489K 9H 305 Siauanjey epoarU patepyoss09 ay) 62 SION, os _RIVIAISHAS GNV O84) NIVAMIVO-TY HINA. JO NNVATWNOLLYNsveeeer coroner on oes sem 20K z sass song 29 seve stor souls sn or ariee ssn msn caver) gece reese same pm mer sy uq20y0 405 0c, mg a9 YSN EG PO ES coasy — owoaw cone, Semen se stove ferimmes Suat0 oa | oni sto soqunsea te sossy a999¢1 1 PapH 4894 om 405 uy PAEPHTOSOD 94F 01 SION ° AUVIGISMAS ANY OSA) NIVALIVO-TV WAN JO NNVALTYNOLLVK,aussie arse sues nsre's eatay wows wee pure 6 recacs't ‘obo seps oz smqusoya 1 sug yous ooarjeq 9 pee Ambo SanNNGeT (oommnan)oygoud Asopeny senpm0s) 988 GHP ee anquioone1€ papus 2e9691p 10) pura paneposue> 241 09 S310N AIVIMISAAS NV (98a) NIVAKLVO-TY WHC AO NV TVNOLLYNewes Ker TAFE ewes Gromer see we Fay) me pa ses” Reo FT rE samp pow ERT OL A weer en soon open « i - 1 sonny sneer seeds see aoe e9e semen 2 ong Go SRR ae Bree TIT st os em OY worn roy 210 ove ‘anda sts sector's sasoiep song - sm og moony oo0.ca¥ emaay wo. See gms Soiowe ur mo “ae ‘namo stor ssqunog te gomupans sey 4s ouetEG Ho poe ysbo som (gomuqaos) oqyoad yong 2 AUVIGISAAS ANY (OSA) NIVAMIVO“1V IWIN dO NNVATYNOLLYN,[NATIONAL BANK OF UMM AL-QATWAIN (PSC) AND SUBSIDIARY 6 [Notes to the consolidated financial statements for the year ended 31 December 2016 continued) BM. Interest rte risk The Sank exposed to varios sks associated withthe eats of futatons in te prevailing levels of navel interest tes oh As financial position and cash Rows. The as beow su ot he Bak’ finan} ‘sets and lads at eayingomount,extegorsed by the eae of cotactualrepiing or maori des From Non Less hae Smmonths Over’ interest, Smouthe tolyear — Lycar hearing Total ‘ADO -AED'00) —ARD'000 AED'OO —AED‘OH0 A131 December 2016 Financial assets (cast and balances wit the UAE Cental tank 50.00 650000 992,905 1,612,905 ue fom othr banks 1491512 B 53256 186d sas and advances S2ou8s2 sages 343779 SST BORED tuvestment securities 255596 ‘easl — snwo09 1,143,186 Z E 260.393 "260393 Dt teas _“seeo9 GATISS0—_BUOSDS 356760 1,994.50 13.404,055 ‘inancia abies 70900 86,108 6200813 9912959 + 2601393 2601393, onan? 9237 ‘Deo ether bunks 70.000 Castres deposi 974i ‘Customers sceeptances 7 “Othe finan ilies Towa Noes 3972380237173 _9.835,989 (0m balance seat interest rate sens gp 5.727.039 (S9628T) 3487237 (4,719,123) 3,898,866 Of balance sheet terest ate sensi ap : 5 = 635336) 1.656336) Cumulative interest rate seas gop 5727039 GENT) 387AIT_ GTS ASD) 2,202.00NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY 64 Notes tothe consolidated Financial statements for the year ended 31 December 2016 (continued) Sh. Interest rate rs (continued) ram Nom Lets han Smonthe Over’ interest Smonthy Wiyear —Tycur bearing ‘Total ‘APD'000—AED'OOO AED'OO AED‘OO0 — AED000 [At31 Deventer 2015, “Toa nani asses 1080, 235188 0727S 2363376 _13,184904 | “Ta aoa abies 280.7 80167 6.497.718 9,389,740 ‘On bance sheet intrest tate sensitiv ap Ss0821S (665820) 2A AMAR) 3825,164 OM tainoe shee interes rate sensitiv a : - = a282et1) (282,01) CCamalave interest ate sensitiv gap 506.215 (665820) 281711 GAIEASS) 2,505,159 Rate sensitivity analy Ache reporting dae if interest sates ad been 200 bps higher and ale oe variables were held estan the Bank's ‘+ Net interest income would have increased by AED 102.56 milion (2015: AED 106,70 miton. “+Other equity eserves would have decreased by AED 43108 milion Based on EVI ‘AED 379.96 milion). alysis (2015 ‘Method and umptons for sensitivity analysis 4 Singe interest rites atv almost at the lower end of the interest rate eles, Bence rate sensitive nasi undorakon + Wincerst cates may 0 up by 200 bps: 209s i tke spr Easel audeins. + Inferest ete change takes place uniformly across al ime buckets pio # year Fr ne interes ince impact + Interest rte tang kes place atte midpoint of ac time bce, ‘+ other parmetersremsin unchanged. 4+ Impact ont intrest income yo aoa yar worked ont + For impact on equity, (EVE analysis), weighted modified duration of Rate Sensitive Assets RSA”) sng Ri Seve Linn RSL) fr al Woks hs ben wok ot ad el no 1+ RSA and RSL. have boon caprred based oneal of tho r-preing o mats te.NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY Notes tothe consolidated Financial statements for he year ented 31 December 2046 (centinued) 3S. Currency risk ‘Concontation of fisancial assets und bile by currency: AL 31 December 2016 Financial assets Casha balances withthe UAE. Comal Bank ‘ue rom ater banks ons and advances Investment secures Customers acoepness Other Financial asses rs nani assets Financial tates Det ober by CCusiomers deposits (Gnomer?aoeeptances (Gtr Financia Hiies “Total financial ais Net balance set posit (06 paance set position ‘ACA December 2015, “Tora nena assess “Tosa nana abies "Net balance sheet postion ‘Of lance set postion AED AED 000 146383875 1'330,000 8095.88 ‘sani 260383, 20a uugsion 10,000 974.251 "601303, a2 9.497067 2s 988 7686030 14,301,000 9.56,108 2,044,898 1324.06 usp AED WO 030 190205 126% 461496 1376813 24159 L 24171 18,62 29s 1753695 81968 Lorna 206.035 owner Anpro00 24873 30 51397 76800 asst 1481 65 Tota ARDrO00 1,612 905 TSHis68 50850 1148.86 260'393 34409 134655, 70.000 9912930 260,193 12st 9335789 3998876 7,989,406 3.184904 9359,740, 305,168 71958578NATIONAL BANK OF UMD AL-QAIWAIN (PSC) AND SUBSIDIARY ‘Notes tthe consolidated fnancta statements for the year ended 31 December 2016 (continued) 38. Correney rit (continued) ate sensitivity analyse Currencies are divided into to ssegores those pegged wits USD andi all ther erences as fn tie Balance Stace + Exchange te change of 2% in AED spins the repectve pegged foreign cnrecies and exchange fate change of 1B tm AED agnine the respective er frsgy eurtencies have been used 10 give & realise assessment a a plausible even. 1+ Based on these changes the fmpacton petit or ss and equity ms ben worked ot Year 2016 Pegged Curenees sate Seat Bat Batala Diae nani sn ark Other Carrecis {ron Bis Pd ea ‘Ss rank Spates Yon Ine Rupee kan Repco Jordanian Dre Ghnan Door Tonal impact i eg corey tse spat AED orsign curren ‘assets AED 000 32368 180 ‘S668 has 1208 3 258 eth im Foreign curren snp AED‘000 498 aa sie Be. Be é. Net erward “st ARD000 (2790) {136 iss) el) 0285) omy ish Netiongy ‘shor postion AED000 1206208 8 150 26 ner “o5) I 3 «) 3 3 oo Cron Impeton sateen ot sity AED ‘000, eazy en ° a 6 assy 0 cy o ‘ o o eo, a 36308NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SURSIDIARY o ‘Notes to the consolidated financial statements for the your ended 31 December 2016 (continued) 35. Currency Hak continue) Rate sensitivity analysis (continue) Year2015 Forcign Necfrward Netanya of corey “Qwetuc! how) “ened ves “)——_posten casts ‘Abou — AED‘OO0 —AED'OGD —ABD'GOO Pegged Cees (Soir Lasso go ora Tet Ha Shu ipl S181) 2 3183 ‘sn i ie a - 5 2 oe 5 5 28 6 5 ‘ - 52 3 ae Dw 12986 p + ae 0286 Great tah Pond oa 698 6 o : Ee coast hata) "0 @ Sos Frank 58 oe Gn a i Sparse Yon sie) ° o inn ape 4 2 tl es 5 - Senden Bier Fi 5 2» a ‘Caan Dole at Cn ns infieae «= igo sis Tas “Total inact eqn carey ete aga AED 36, guity price rsh _Ac the repting date the equity pics are 20% Nghestower a pr he assumptions mentioned below ard fl the cher viable were hel constant, he Btk’s + Consolidated semen of comprehensive income woul han increasedecressed by AED 132.98 inilion 2015" AED 13703" million) and consabdaed sttemeat of income’ would hive {eresedidecreased by AED 463 milion 2015: 7.27 wlions “Method aed assumptions for semsitvity analysis ‘The sensivty analysts as boen done based onthe exposure to equiy price rs a tthe reporting dat 1 Anat the reporting date if uty prices ae 20% highelower onthe market value nifonny for all ‘quien wile ll ther vices re held constant, te ipa on profi or loss and equity as been Shown abote ‘+ A.20% change inequity pies nas Been asd o give relist assests plausible eventNATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY “ Notes te the consolidated financial statements for the year ended 31 December 2016 (continued) 3% Capital managersent ‘an’ capital management policy is to maintain rong capital bis to suppor the development and row of usines. Current and fatre etl requitemerts ae detzanined on the basis of Joan grow: "expectations foreach bsines i, expected groin Of blane soe ais, ure soures wd wet ‘of finds and Banks fate dividend poy. The Bsn also ensues compliance with exterally imposes "apt equienen ners song cred tings end Rely etl rato inorder to suppor its business and ‘maximise sharéholdrs value. Dui the year the Bank had compied In fll wit all exera i ‘capital requirements. The UAE, Cental Bank requites tbe hanks iz UAL 19 mains 3 ratio of tot eulntory capita fo ther weighed asses at oc above the agreed mii oF (2%, Capita ractere ‘The ble below dels the regulatory capital esourees of the Bank 2016 2015 AED O00 AED WOO ‘ier 1 Capita Share capt 1,848,000 1,848,000 Stary roserse Ho19265 109,256 Ganoet reserve a0 6400 Rewind eninge 7885 _1.066311 Total Ter Soca — _4emat7 ‘her 2 Capita Fair valu reserve on invest secwites valableforsele 1548s 2461 (General reserves on scl loons and wvaness io casomees yas a ‘Total Tier? tes ssn ‘Total Regulatory Capital 4101789 4,098,850, Capital adequacy ratios 2016 2015 upon ABD00 Risk weighted asets Cred rsh eight assets 19763406 t9.719587 ‘Market sk-weighod assets 62321 88,366 Operations riskweghted assets awa _.000.709 ‘Total rsk-cighted assets 11856199 1181412NATIONAL BANK OF UMM AL-QAIWAIN (PSC) AND SUBSIDIARY [Notes tothe consolidated financial statements forthe year ended 31 December 2016 (continued) 37. Capital management (continved) Capital adequacy ratio (percent 2016 % Tier Iai (Tier 1 capitatotl isk weighted asses) 3333 er 2 rain (Ter 2 cpital/Tie 1 cpiel) 38 Total capital atequney rato (otal regetatorycapltalotal risk ‘woighted aset) 346 “Minisiam capital steguacy ato required by UAE Central Banke 2 38. Approval of consolidated financial statements The consolidated finan statements were approved bythe Board of Dzeiors and autho vary 2017 ® % nu 3468