30 September 2014 (Unaudited)

Transcription

1 nterim condensed consolidted finncil informtion nd review report Arzn Ftnncil Group for Finncing nd nvestment- KPSC (Formerly: nterntionl Finnce Compny- KPSC) nd its Subsidiries Kuwit (Unudited)

2 ' :t :. Arzn finncil Group fer Finncing nd nvestment KPSC (formerly: nterntionl finnce Compny - KPSC) nd its Subsidiries nterim Condensed Consolidted finncil nformtion (Unudited) Contents.. Review report nterim condensed consolidted sttement of income nterim condensed consolidted sttement of comprehensive income nterim condensed consolidted sttement of finncil position nterim condensed consolidted sttement of chnges in equity nterim condensed consolidted sttement of csh flows Notes to the interim condensed consolidted finncil informtion ~ge pd t~ 25

3 ' 0 Grnt Thornton A-Qtmi, A-Aibn & Prtners Auditors & Consultnts Souq A Kbeer Building - Block A 9th Floor Tel : (965) Fx: (965) P,O.Box 2986, Sft Kuwit E-mil: gt@kw.gt.com Rodl Middle Est Burgnn - lntl!m~u:ionl Ao::eountr'l.t Ali A Hsswi & Prtners P.O. Box: Sft Kuwit Shrq - smn Complex - Block 2-9 Floor Tel Fx: / info-kuwit@rodlme.comemil: Report on review of interim condensed consolidted finncil informtion To the bord of directors of Arzn Finncil Group for Finncing nd nvestment - KPSC (formerly: nterntionl Finnce Compny - KPSC) Kuwit ntrodudion We hve reviewed the ccompnying interim condensed consolidted sttement of finncil posltl.on of Arzn Finncil Group for Finncing nd nvestment - KPSC (formerly: nterntionl Finnce Compny - KPSC) ( Kuwiti Public Shreholding Compny) (the "prent compny") nd its subsidiries (together the "group'') s t nd the relted interim condensed consolidted sttements of income, comprehensive income, chnges in equity nd csh flows for the nine-month period then ended. Mngement is responsible for the preprtion nd presenttion of this interim condensed consolidted finncil informtion in ccordnce with the bsis of presenttion set out in Note 2. Our responsibility is to express conclusion on this interim condensed consolidted finncil informtion bsed on our review. Scope of review We conducted our review in ccordnce with nterntionl Stndrd on Review Enggements 2410, "Review of nterim Finncil nformtion Performed by the ndependent Auditor of the Entity." A review of interim finncil informtion consists of mking inquiries, primrily of persons responsible for finncil nd ccounting mtters, nd pplying nlyticl nd other review procedures. A review is substntiy less in scope thn n udit conducted in ccordnce with nterntionl Stndrds on Auditing nd consequently does not enble us to obtin ssurnce tht we would become wre of significnt mtters tht might be identified in n udit. Accordingly, we do not express n udit opinion. Conclusion Bsed on our review, nothing hs come to our ttention tht cuses us to believe tht the ccompnying interim c:ondensed consolidted finncil informtion is not prepred, in mteril respects, in ccordnce with the bsis of presenttion set out in Note 2. Report on review of other legl nd regultory requirements Bsed on our review, the interim condensed consolidted finncil informtion is in greement with the books of the prent compny. We further report tht, to the best of our knowledge nd belief, no violtions of the Compnies Lw No. 25 of 2012 nd its executive regultions or of the Articles nd Memorndum of Assocition of the prent compny, s mended, hve occurred during the nine-month period ended tht might hve hd mteril effect on the business or finncil position of the group. We lso report tht during our review nd to the best of our knowledge nd belief, nothing hs come to our ttention tht indictes ny mteril violtions to Lw No. (7) of2010 relting to the Cpitl Mrkets Authority nd the instructions thereto, during the nine-month period ended. We further report tht, during the course of our review, we hve not become wre of ny mteril violtions during the nine-month period ended of the provisions of Lw No. 32 of 1968, s mended, concerning currency, the Centrl Bnk of Kuwit nd the orgnistion of bnking business, nd its relted ~ -.""'L--- AbdutifM. Al-Aibn (CPA) (Licence No. 94-A) of Grnt Thornton- Al-Qtmi, Al-Aibn & Prtners Kuwit 6 November 2014 Ali A. Al-Hswi (Licence No. 30-A) of Rodl Middle Est Burgn- nterntionl Accountnts

4 i J! Arzn finncil Group for finncing nd investment KPSC 2 (formerly: nterntionl Finnce Compny.. KPSC) nd its Subsidiries nterim Condensed Consolidted g::jr,ncii nformtion (Unudited) nterim condensed consolidted sttement of income Three months ended Nine months ended Notes (Unudited) (Unudited) (Unudited) (Unudited) Revenue ncome from instlment credit debtors 393, , ,973 1,525,180 Rentl income 37,063 40, , ,946 nterest income 119, , , ,135 Profit on sle of investments t fir vlue through sttement of income 19,187 29, , ,671 Chnge in fir vlue of investments t fir vlue through sttement of income 152,542 50, ,718 2,392 (Loss)/profit on sle of vilble for sle investments (181,213) 388,300 1,243,001 Profit on sle of properties held for trding 223,283 42, , ,024 of results of ssocites 11 (993,823) 373,808 (195,019) 313,535 Shre Reversl of provision for instlment credit debtors - net 2,149, ,573 3,020,093 1,653,084 Profit on sle of investment in ssocite , , ,625 ividend income 12,152 20,263 1,405,441 1,032,975 Brokerge income 117, , , ,449 Advisory fees 141, , , ,189 Gin/(loss) on foreign currency exchnge 82,489 53, ,303 (28,404) Other income 67,997 3, ,380 83,731 2,471,799 2,801,848 8,224,622 7,437,533 Expenses nd other chrges Stff costs (467,928) (463,097) (1,610,103) (1,296,393) Generl nd dministrtive expenses (370,271) (258,058) (1,148,429) (1,072,264) Finnce costs (639,594) (247,315) (1,559,331) (763,976) P-rovision for doubtful debts (603,019) eprecition (49,740) (44,724) (145,961) (130,480) mpirment of vilble for sle investments 10 (309,979) (925,763) (309,979) (1,470,951) (1,837,512) (1,938,957) (4,773,803) (5,337,083) Profit for the period before provisions for contribution to KFAS, Ntionl Lbour Support Tx nd Zkt 634, ,891 3,450,819 2,100,450 Contribution to Kuwit Foundtion for the Advncement of Sciences (KFAS) (6,343) (34,508) Provision for Ntionl Lbour Support Tx (20,074) (33,428) (78,809) (60,784) Provision for Zkt (5,539) (12,954) (17,775) (18,401) Profit for the period 602, ,509 3,319,727 2,021,265 Attributble to: Shreholders of the prent compny 893, ,796 3,546,790 1,987,503 Non-controing interests (291,258) 15,713 (227,Q63) 33, , ,509 3,319,727 2,021,265 Bsic nd diluted ernings per shre ttributble to the shreholders of the prent compny (Fils) The notes set out on pges 8 to 25 form n integrl prt of this interim mndemed mnso!idted finmi! informtion.

5 ~ fj 1J! Arzn finncil Group for Finncing nd nvestment KPSC (formerly: nterntionl Finnce Compny- KPSC) nd its Subsidiries nterim Condensed Consolidted finncil nformtion (Unudited} nterim condensed consolidted sttement of comprehensive income Three months ended 30 Sept 2014 (Unudited) (Unudited) Profit for the period 602, ,509 Other comprehensive incomei(joss): tems tht wi be reclssified subsequently to consolidted sttement of income: Exchnge differences rising on trnsltion of foreign opertions 187,095 (66,058) Avilble for sle investments: - Net chnge in fir vlue rising during the period 458,256 6,319,673 - Trnsferred to consolidted sttement of income on sle (94,251) (29,505) - Trnsferred to consolidted sttement of income on impirment 309, ,763 Totl other comprehensive income/(loss) for the period 861,079 7,149,873 Totl comprehensive income/(loss) for the period 1,463,410 7,966,382 Attributble to: Shreholders of the prent compny 1,691,155 7,953,545 Non-controing interests (227,745) 12,837 1,463,410 7,966,382 The notes set out on pges 8 to 25 form n integrl prt of this interim " ondemed " onsolidted finmil informtion. Nine months ended 30 Sept 2014 (Unudited) (Unudited) 3,319,727 2,021, ,509 (85,022) {8,243,848) 9,273,809 (523,174) (304,887) 309,979 1,470,951 {8,308,534) 10,354,851 (4,988,807) 12,376,116 {4,978, 164) 12,355,010 (10,643) 21,106 {4,988,807) 12,376,116 3

6 ~ l ;ij 3 ~ ~ ~ = : ~ tl.rzn Finncil Group for Finncing nd nrwestment- K?SC (formerly: nterntionl Finnce Comp;;my - Ki?SC) nd its Subsidiries nterim Condensed Consolidted finncil nformtion (Unudited) nterim condensed consolidted sttement of finncil position Assets Csh nd csh equivlents nstlment credit debtors nvestments t fir vlue through sttement of income Accounts receivble nd other ssets ue from relted prties Properties held for trding Avilble for sle investments Held to mturity investment nvestment in ssocites nvestment properties Property nd equipment Totl ssets Libilities nd equity Libilities ue to bnks Accounts pyble nd other libilities ue to relted prties Term lons Murbh pyble Provision for employees' end of service benefits Totl libilities Equity Shre cpitl Shre premium Tresury shres Legl reserve Foreign currency trnsltion reserve Fir vlue reserve Retined ernings/(ccumulted losses) Totl equity ttributble to the shreholders of the prent compny Non-controing interests Totl equity Totl libilities nd equity Notes (Unudited) 5,614,220 13,431,800 7,853,708 10,475, ,349 1,513,947 66,702,495 50,426,021 1,905,888 3,101, ,930,976 4,429,090 7,129, ,224 8,670,000 5,200, ,302 26,433,135 80,288,257 27,142,826 (557,080) (64,193) 6,108,818 3,546, ,465,418 19,032, ,497, ,930,976 J ss em Hsn Zinl Chirmn nd Chief Executive Officer (Restted) 31 ec. (Audited) (Unudited) 12,062,146 8,561,385 9,454,266 19,075,700 8,120,193 8,116,024 5,016,378 4,786, , ,455 1,849,329 3,418,136 75,973,784 68,682, , ,050 54,071,423 44,560,150 1,950,185 1,964,951 2,725,633 2,735, ,615, ,512,177 2,374,655 2,585,664 7,492,130 6,792, , ,968 16,000,000 8,426,700 6,800,000 6,800, , ,810 33,517,701 25,526,810 80,288,257 80,288,257 32,950,027 32,950,027 (597,141) (762,148) 6,977,142 7,074,614 3,718 (261,944) 14,565,861 19,055,460 (12,709,887) (13,093,989) 121,477, ,250,277 16,619,629 11,735, ,097, ,985, ,615, ,512,177 The notej Jet out on pgej 8 to 25 form n integrl prt of thzs interim rondenjed t'onj'olidted.ftnndl informtion. 4

7 Arum Finncil Group for Finncing nd nvestment KPSC (formerly: nterntionl Finnce Compny - KPSC) nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) 5 nterim condensed consolidted sttement of chnges in equity Equity ttributble to the shreholders of the prent compny.. Foreign currency (Accumulted Shre Shre Tresury Legl trnsltion Fir vlue losses)/retined cpitl premium shres reserve reserve reserve ernings Slnce t 1 Jnury 2014 (udited) 80,288,257 32,950,027 (597,141) 6,977,142 3,718 14,565,861 (12,709,887) Purchse of tresury shres - (220,950) Sle of tresury shres (74,456) 261,011 - Write off of ccumulted losses (note 16) - (5,732,745) - (6,977,142) - 12,709,887 Trnsctions with shreholders - (5,807,201) 40,061 (6,977,142) - 12,709,887 Profit for the period ,546,790 Other comprehensive (loss)lincome: Exchnge differences rising on trnsltion of foreign opertions (67,911) - Avilble for sle investments: - Net chnge in fir vlue rising during the period - - (8:243,848) - Trnsferred to consolidted sttement of income on sle (523,174) - Trnsferred to consolidted sttement of income on impirment ,979 Totl other comprehensive (loss)fincome for the period (67,911) (8,457,043) Totl comprehensive (loss)/income for the period (67,911) (8,457,043) 3,546,790 isposl of prtil interests in subsidiries (note 22) Blnce t (unudited) 80,288,257 27' 142,826 (557,080) - (64, 193) 6,108,818 3,546,790 Noncontroing Sub-Totl interests Totl 121,477,977 16,619, ,097,606 (220,950) (220,950) 186, ,555 (34,395) (34,395) 3,546,790 (227,063) 3,319,727 (67,911) 216, ,509 (8,243,848) - (8,243,848) (523,174) (523,174) 309, ,979 (8,524,954) 216,420 (8,308,534) (4,978,164) (10,643) (4,988,807) 2,423,437 2,423, ,465,418 19,032, ,497,841 The notes set out on pges 8 to 25 form n integrl prt cif this intenm, ondensed mnsolidted finndl itiformtion.

8 Arzn Finncil Group for Finncing nd nvestment KF'SC {formerly: nterntionl Finnce Compny - KPSC) nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) nterim condensed consolidted sttement of chnges in equity (continued) Equity ttributble to the shreholders of the prent compny 6 Shre cpitl Shre premium Tresury shres Legl reserve Voluntry reserve Foreign currency trnsltion reserve Fir vlue reserve Accumulted losses Sub-Totl Noncontroing interests KJ? Totl Blnce t 1 Jnury (s previously reported ) (udited} 80,288,257 32,950,027 (931,786) 7,087, ,824 (189,578) 8,615,587 (15,081,492) 112,890, , ,503,526 P'rior yer djustment (note 23) 2,572,270 2,572,270 Blnce t 1 Jnury (s restted) (udited) 80,288,257 32,950,027 (931,786) 7,087, ,824 (189,578) 8,615,587 (15,081,492) 112,890,740 3,185, ,075,796 Purchse of tresury shres Sle of tresury shres Trnsctions with shreholders Profit for the period Other comprehensive (/oss)lincome: Exchnge differences rising on trnsltion of foreign opertions Avilble for sle investments: - Net chnge in fir vlue - Trnsferred to consolidted sttement of income on sle - Trnsferred to consolidted sttement of income on impirment Totl other comprehensive (loss)/income for the period Totl comprehensive (loss)/income for the period Non-controing interests rising on business combintion (285,710) 455,348 (13,2872 (151,824) 169,638 (13,287) (151,824) (72,366) (72,366) (72,366) 9,273,809 (304,887) 1,470,951 10,439,873 10,439,873 1,987,503 1,987,503 (285,710) 290,237 4,527 1,987,503 (72,366) 9,273,809 (304,887) 1,470,951 10,367,507 12,355,010 33,762 (12,656) (12,656) 21 '1 06 8,528,928 Blnce t 30 September (unudited) 80,288,257 32,950,027 (762,148) 7,074,614 (261,944) 19,055,460 (13,093,989) 125,250,277 11,735,090 (285,710) 290,237 4,527 2,021,265 (85,022) 9,273,809 (304,887) 1,470,951 10,354,851 12,376,116 8,528, ,985,367 The notes set out on pges 8 to 25 form n integrl prt of this interim condensed consolidted ftnnd/ iriformtion.

9 An:n fimtncil Group for Finncing nd nvestment - KPSC (formerly: nterntionl Finnce Compny- KPSC} nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) nterim condensed consolidted sttement of csh flows.. OPERATNG ACTVTES Profit for the period Adjustments: nterest income ividend income Profit on sle of vilble for sle investments Profit on sle of investment in ssocite mpirment of vilble for sle investments Profit on sle of properties held for trding Shre of results of ssocites Reversl of provision for instlment credit debtors - net Provision for doubtful debts eprecition Finnce costs Provision for end of service indemnity Chnges in operting ssets nd libilities: nstlment credit debtors nvestments t fir vlue through sttement of income Accounts receivble nd other ssets Held to mturity investments ue from to relted prties Accounts pyble nd other libilities Provision for end of service indemnity pid Net csh (used in)/from operting ctivities NVESTNG ACTVTES Net purchse of property nd equipment Purchse of investment in ssocite Proceeds from sle of investment in ssocite Purchse of properties held for trding Purchse of Avilble for sle investments Proceeds from sle of properties held for trding P'roceeds from sle of vilble for sle investments ividends income received ividend received from ssocite nterest income received Net csh from/( used in) investing ctivities FNANCNG ACTVTES Net chnge in due to bnks (Repyment of)/proceeds from term lons Repyment of murbh pyble Purchse of tresury shres Sle of tresury shres Non-controing interest rising on business combintion Finnce costs pid Net csh (used in)/from finncing ctivities Net (decrese)lincrese in csh nd csh equivlents Foreign currency djustment Csh nd csh.equivlents t beginning of the period Csh nd csh equivlents t end of the period Notes Nine months ended 30 Sept (Unudited) 3,319,727 (246,444) (1,405,441) (388,300) (130,906) 309,979 (223,283) 195,019 (3,020,093) 145,961 (1,559,331) 169,460 (2,833,652) (957,441) 266,485 (5,459,032) 283,050 (703,265) (362,611) (110,014) (9,876,480) (477,126) 2,355,577 (1,566,468) 544,600 2,982,413 1,405, , ,444 6,430,595 2,054,435 (7,330,000) (1,600,000) (220,950) 186,555 2,423,437 1,559,331 (2,927' 192) (6,373,077) (74,849) 12,062,146 5,614,220 T'/:Je 110/eJ Jet 011! 011 p,~gej 8 to 25 form n inte,gml pmt ofthij inte1im, onde1ued t'oiuolidtedfinmil it!f'rmntion. (Restted) Nine months ended 30 Sept (Unudited) 2,021,265 7 (452, 135) (1,032,975) (1,243,001) (184,625) 1,470,951 (135,024) (313,535) (1,653,084) 603, , , , ,553 5,743,687 (489,971) 196,346 (1,424,232) 225,141 (78,200) 4,318,324 (41,386) (13,248,501) 1,322,188 (760,299) (1 0,403,858) 705,460 3,719,058 1,032,975 35, ,135 (17,187,166) 66,384 6,719,900 (1,600,000) (285,710) 290,237 8,550,034 (763,976) 12,976, ,027 (53,505) 8,506,863 8,561,385!

10 ~ ~ 1: Arzn finncil Group for finncing nd nvestment KPSC (formerly: nterntionl finnce Compny- KPSC) nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) Notes to the interim condensed consolidted finncil informtion 1. ncorportion nd ctivities Arzn Finncil Group for Finncing nd nvestment- KPSC (the "prent compny") ws incorported in Kuwit on 15 April 1980 in ccordnce with the Compnies Lw under the nme of nterntionl Trnsport Equipment Compny - KSC (Closed). On 14 ecember 1996 n extrordinry generl ssembly resolved to chnge the nme of the prent compny to nterntionl Murbh Compny - KSC (Closed). Lter, on 24 April 2002 n extrordinry generl ssembly resolved to chnge the nme of the prent compny to nterntionl Finnce Compny- KPSC nd to expnd its permitted ctivities. The extrordinry generl ssembly held on 24 July pproved to chnge the nme of the prent compny from nterntionl Finnce Compny- KSCC to Arzn Finncil Group for Finncing nd nvestment - KPSC which hs been registered in the commercil register under No on 11 November. The prent compny is listed on the Kuwit Stock Exchnge nd is governed under the directives of Centrl Bnk of Kuwit nd Cpitl Mrkets Authority. The group comprises the prent compny nd its subsidiries (together referred s "the group''). The principl ctivities of the prent compny re s foows: 1- Trding through trnsporttion nd relted hevy equipment, 2- Finncing the purchses of cpitl commodities nd durble nd non-durble goods, 3- Lesing the cpitl goods nd the durble goods, 4- Grnting short nd medium term lons for individuls nd legl entities, 5- Rel estte investment trnsctions to mnge nd develop residentil lnd, nd constructing of commercil nd residentil units nd complexes in order to se them in csh or instlments or rent them, 6- -Mnging types nd forms of fmncil portfolios, investing nd developing of funds by utilising them locy nd globy for the prent compny or on behlf of its customers including required lending nd borrowing opertions, 7- Medition in lending, borrowing, brokerge nd gurntees trnsctions for commission or fee, 8- Finncing nd brokerge in the interntionl nd locl trding, 9- Mnging nd estblishing mutul funds in ccordnce with the lw nd fter obtining the pprovl of the competent uthorities, 10- Brokerge in interntionl investment instruments nd securities, 11- nvestment in rel estte, industril, griculturl nd other economic sectors, either directly or by prticipting in the estblishment of specilised entities or buying the shres of these entities, 12- Buying nd seing of foreign currencies nd trding in precious metls for the prent compny only, 13- Conducting reserches nd studies relted to rel estte projects s we s those relting to the utilistion of funds for the prent compny or for others, 14- Trding in securities such s shres, investment certifictes nd the like, 15- The prent compny my hve interest or prticipte in ny wy with the compnies prcticing similr ctivities or which my ssist it to chieve its objectives inside or outside the Stte of Kuwit. The compny my lso purchse these compnies or ffilite them therewith.

11 Arzn Finncil Group for finncing nd nvestment KPSC (formerly: nterntionl Finnce Compny - KPSC) nd its Subsidiries interim Condensed Consolidted finncil nformtion (Unudited) Notes to the interim condensed consolidted finncil informtion (continued) 1 ncorportion nd ctivities (continued) The Compnies Lw issued on 26 November 2012 by ecree Lw no 25 of 2012 (the "Compnies Lw''), which ws published in the Officil Gzette on 29 November 2012, cnceed the Commercil Compnies Lw No 15 of The Compnies Lw ws subsequently mended on 27 Mrch by Lw No. 97 of. On 29 September, Ministry of Commerce nd ndustry issued its regultion No. 425/ regrding the Executive by-lws of the Compnies Lw. A existing compnies re required to comply with rticles of these by-lws within one yer from the dte of its issunce. The ddress of the prent compny's registered office is PO Box 26442, Sft 13125, Stte of Kuwit. The bord of directors pproved this interim condensed consolidted finncil informtion for the nine month period ended for issue on 6 November Bsis of presenttion The interim condensed consolidted finncil informtion of the group for the nine-month period ended 30 September 2014 hs been prepred in ccordnce with AS 34, "nterim Finncil Reporting", except for regultions of the Stte of Kuwit for finncil services institutions regulted by the Centrl Bnk of Kuwit (CBK) s noted below. These regultions require doption of nterntionl Finncil Reporting Stndrds (FRS) except for the AS 39 requirement for coective impirment provision, which hs been replced by the CBK's requirement for minimum generl provision. The impirment provision for lons nd dvnces complies in mteril respects with the specific provision requirements of the CBK nd FRS. According to the CBK requirements the bsis of mking generl provisions on fcilities t the rte of 1% for csh fcilities nd 0.5% for non csh fcilities. The ccounting policies used in the preprtion of the interim condensed consolidted fmncil informtion re consistent with those used in preprtion of udited consolidted finncil sttements for the yer ended 31 ecember, except for doption of relevnt new stndrds, mendments to certin stndrds nd interprettions discussed below. This interim condensed consolidted fmncil informtion is presented in Kuwiti inrs (<) which is the functionl currency of the prent compny. This inter1m condensed consolidted fmncil informtion does not include informtion nd disclosures required for complete fmncil sttements prepred in ccordnce with the nterntionl Finncil Reporting Stndrds. n the opinion of mngement, djustments consisting of norml recurring ccruls considered necessry for fir presenttion hve been included. Operting results for the interim period re not indictive of the results tht my be expected for the yer ending 31 ecember For further detils, refer to the consolidted fmncil sttements nd its relted disclosures for the yer ended 31 ecember. 9

12 ~ Arzr. finncil Group for finncing nd!nvestment- :<lpsc (formerly: nterntionl Finnce Compny - KPSC) nd its Subsidiries nterim Condensed Consolidted finncil nformtion (Unudited) Notes to the interim condensed consolidted finncil informtion (continued) 3 Chnges in ccounting policies The ccounting policies dopted in the preprtion of the interim condensed consolidted finncil informtion re consistent with those used in previous yer except s foows: 3.1 Adoption of new ASB Stndrds nd mendments during the period The group hs dopted the foowing new nd mended FRS during the period: Stndrd or nterprettion las 32 Finncil nstruments: Presenttion -Amendments las 36 mpirment of Assets- Amendments nvestment Entities -Amendments to FRS 10, FRS 12 nd las 27 Novtion of erivtives nd Continution of Hedge Accounting (Amendments to las 39) FRC 21 Levies las 32 Finncil nstruments: Presenttion- Amendments The mendments to las 32 dd ppliction guidnce to ddress inconsistencies in pplying las 32's criteri for offsetting finncil ssets nd finncil libilities in the foowing two res: 10 Ef[e,tive for nnul periods beginning 1 Jnury Jnury Jnury Jnury Jnury 2014 the mening of 'currently hs legy enforceble right of set-off tht some gross settlement systems my be considered equivlent to net settlement. The mendments re required to be pplied retrospectively. The doption of the mendment did not result into ny mteril impct on tl1e group's interim condensed consolidted fmncil informtion las 36 mpirment of Assets- Amendments The mendments to las 36 reduces ilie circumstnces in which the recoverble mount of ssets or cshgenerting units is required to be disclosed, clrify the disclosures required, nd to introduce n explicit requirement to disclose the discount rte used in determining impirment (or reversls) where recoverble mount (bsed on fir vlue less costs of disposl) is determined using present vlue technique. The doption of the mendment did not result into ny mteril impct on the group's interim condensed consolidted finncil informtion nvestment Entities- Amendments to!frs 10,!FRS 12 nd las 27 The Amendments define the term 'investment entity', provide supporting guidnce nd require investment entities to mesure investments in the form of controing interests in nother entity t fir vlue through sttement of income. The doption of the mendment did not result into ny mteril impct on the group's interim condensed consolidted finncil informtion Novtion of erivtives nd Continution of Hedge Accounting (Amendments to las 39} The Amendment mkes it cler tht there is no need to discontinue hedge ccounting if hedging derivtive is novted, provided certin criteri re met. A novtion indictes n event where the originl prties to derivtive gree tht one or more clering counterprties replce their originl counterprty to become the new counterprty to ech of the prties. n order to pply the mendments nd continue hedge ccounting, novtion to centrl counterprty (CCP) must hppen s consequence of lws or regultions or the introduction of lws or regultions. The doption of the mendment did not result into ny mteril impct on the group's interin1 condensed consolidted finncil informtion.

13 Arzn finncil Group for Finncing nd investment KPSC (formerly: nterntionl finnce Compny- KPSC) nd iis Subsidiries nterim Condensed Consolidted Finncil informtion (Unudited} Notes to the interim condensed consolidted finncil informtion (continued) 3 C~nges in ccounting policies (continued) 3.1 Adoption of new ASB Stndrds nd mendments during the period (continued) FRJC 21 'Levies' (FRC 21} FRC 21 clrifies tht: The obligting event tht gives rise to the libility is the ctivity tht triggers the pyment of the levy, s identified by the government's legisltion. f this ctivity rises on specific dte within n ccounting period then the entire obligtion is recognised on tht dte The sme recognition principles pply in the nnul nd interim finncil sttements. FRC 21 hs been pplied retrospectively in ccordnce with its trnsitionl provisions but the doption of the mendment did not result into ny mteril impct on the group's interim condensed consolidted finncil informtion. 3.2 ASB Stndrds issued but not yet effective At the dte of uthoristion of this interim condensed consolidted finncil informtion, certin new stndrds, mendments nd interprettions to existing stndrds hve been published by the ASB but re not yet effective, nd hve not been dopted erly by the group. Mngement nticiptes tht of the relevnt pronouncements wi be dopted in the group's ccounting policies for the first period beginning fter the effective dte of the pronouncement. Mngement is yet to determine impct of these pronouncements in the interim condensed consolidted finncil informtion. nformtion on new stndrds, mendments nd interprettions tht re expected to be relevnt to the group's finncil sttements is provided below. Stndrd or nterprettion FRS 9 Finncil nstruments: Clssifiction nd Mesurement FRS 14 Regultory eferrl Accounts FRS 15 Revenue from Contrcts with Customers Accounting for Acquisitions of nterests 1n Joint Opertions (Amendments to FRS 11) Clrifiction of Acceptble Methods of eprecition nd Amortistion (Amendments to las 16 nd AS 38) efined Benefit Plns: Employee Contributions (Amendments to AS 19) Annul mprovements to FRSs Cycle Annul mprovements to FRSs Cycle Ef(edive for nnul periods beginning 1 Jnury Jnury Jnury Jnury Jnury July July July !FRS 9 Finncil nstruments The ASB hs replced las 39 'Finncil nstruments: Recognition nd Mesurement' (AS 39) in its entirety with FRS 9. FRS 9 (2014) incorportes the flnl requirements on three phses of the finncil instruments projects: clssifiction nd mesurement, impirment nd hedge ccounting. The group's mngement hs yet to ssess the impct of this new stndrd on the group's consolidted finncil sttements. 11

14 8., Arzn finncil Group for Finncing nd nvestment - KPSC (formerly: nterntionl finnce Compny- KPSC) nd its Subsidiries )nterim Condensed Consolidted finncil nformtion (Unudited) Notes to the interim condensed consolidted finncil informtion (continued) 3 Chnges., in ccounting policies (continued) 3.2 ASB Stndrds issued but not yet effective (continued) FRS 14 Regultory eferrl Accounts FRS 14 permits n entity which is first-time dopter of nterntionl Finncil Reporting Stndrds to continue to ccount, with some limited chnges, for 'regultory deferrl ccount blnces' in ccordnce with its previous GAAP, both on initil doption of FRS nd in subsequent finncil sttements !FRS 15 Revenue from Contrcts with Customers FRS 15 replced las 11 Revenues nd provides new control-bsed revenue recognition model using fivestep to be pplied to contrcts with customers, The five steps in the model re s foows: dentify the contrct with the customer dentify the performnce obligtions in the contrct etermine the trnsction price Aocte the trnsction price to the performnce obligtions in the contrcts Recognise revenue when (or s) the entity stisfies performnce obligtion. The stndrd includes importnt guidnce, such s Contrcts involving the delivery of two or more goods or services - when to ccount seprtely for the individul performnce obligtions in multiple element rrngement, how to octe the trnsction price, nd when to combine contrcts timing- whether revenue is required to be recognized over time or t single point in time vrible pricing nd credit risk - ddressing how to tret rrngements with vrible or contingent (e.g. performnce-bsed) pricing, nd introducing n over constrint on revenue time vlue -when to djust contrct price for finncing component specific issues, includingo non-csh considertion nd sset exchnges o contrct costs o rights of return nd other customer options o supplier repurchse options o wrrnties o principl versus gent o licencing o brekge o non-refundble upfront fees, nd o consignment nd bi-nd-hold rrngements Accounting for Acquisitions of nterests in Joint Opertions (Amendments to!frs 11} Amendments to FRS 11 Joint Arrngements require n cquirer of n interest in joint opertion in which the ctivity constitutes business (s defined in FRS 3 Business Combintions) to pply of the business combintions ccounting principles in FRS 3 nd other FRSs, except for those principles tht conflict with the guidnce in FRS 11. t lso requires disclosure of the informtion requited by FRS 3 nd other FRSs for business combintions. The mendments pply both to the initil cquisition of n interest in joint opertion, nd the cquisition of n dditionl interest in joint opertion (in the ltter cse, previously held interests re not remesured). The mendments pply prospectively to cquisitions of interests in joint opertions. 12

15 .- & Arzn finncil Group for Finncing nd nvestment - KPSC {tormerly: nterntionl Finnce Compny - KPSC} nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) 30 September :2014 Notes to the interim condensed consolidted finncil informtion (continued) 3 Ch,nges in ccounting policies (continued) 3.2 ASB Stndrds issued but not yet effective (continued) Clrifiction of Acceptble Methods of eprecition nd Amortistion (Amendments to las 16 nd las 38) Amendments to las 16 Property, Plnt nd Equipment nd las 38 ntngible Assets ddress the foowing mtters: deprecition method tht is bsed on revenue tht is generted by n ctivity tht includes the use of n sset is not pproprite for property, plnt nd equipment n mortistion method tht is bsed on the revenue generted by n ctivity tht includes the use of n intngible ss,et is genery inpproprite except for limited circumstnces expected future reductions in the seing price of n item tht ws produced using n sset could indicte the expecttion of technologicl or commercil obsolescence of the sset, which, in turn, might reflect reduction of the future economic benefits ~mbodied in the sset efined Benefit Plns: Employee Contributions (Amendments to las 19) Amends las 19 Employee Benefits to clrify the requirements tht relte to how contributions from employees or third prties tht re linked to service should be ttributed to periods of service. n ddition, it permits prcticl expedient if the mount of the contributions is independent of the number of yers of service, in tht contributions, cn, but re not required, to be recognised s reduction in the service cost in the period in which the relted service is rendered Annul mprovements to FRSs Cycle: (i) Amendments to FRS )-Contingent considertion tht does not meet the definition of n equity instrument is subsequently mesured t ech reporting dte fir vlue, with chnges recognised in consolidted sttement of mcome. (ii) Amendments to FRS 13- the ddition to the Bsis for Conclusions confirms the existing mesurement tretment of short-term receivbles nd pybles. (zzz) Amendments to J<"RS 8-isclosures re required regrding judgements mde by mngement in ggregting operting segments (i.e. description, economic indictors). A reconcilition of reportble segments' ssets to totl entity ssets is required if this is regulrly provided to the chief operting decision mker. (iv) Amendments to LAS 16 nd!as 38- \V'hen items re revlued, the gross crrying mount is djusted on consistent bsis to the revlution of the net crrying mount. (v) Amendments to las 24- Entities tht provide key mngement personnel services to reporting entity, or the reporting entity's prent, re considered to be relted prties of the reporting entity. 13

16 t 11.,., Arzn Finncil Group for Finncing nd nvestment - KiPSC (formerly: lnterntioni Finnce Compny- KPSC) nd its Subsidiries nterim Condensed Consolidted finncil informtion (Unudited) Notes to the interim condensed consolidted finncil informtion (continued) 3 Chnges in ccounting policies (continued) 3.2 A>SB Stndrds issued but not yet effective (continued) Annul mprovements Cycle: (z) Amendments to!frs 1-the mendment to the Bsis for Conclusions clrifies tht n entity prepring its FRS finncil sttements in ccordnce with FRS 1 is ble to use both: - FRSs tht re currently effective - FRSs tht hve been issued but re not yet effective, tht permits erly doption The sme version of ech FRS must be pplied to periods presented. (iz).. Amendments to f''""rs 3- FRS 3 is not pplied to the formtion of joint rrngement in the finncil sttements of the joint rrngement itself. (iii) Amendments to PRS 13- the scope of the portfolio exemption (FRS 13.52) includes items tht hve offsetting positions in mrket nd/ or counterprty credit risk tht re recognised nd mesured in ccordnce with AS 39 /FRS 9, irrespective of whether they meet the definition of finncil sset/libility. (iv) Amendments to AS 40- the mendment emphsises tht whether the cquisition of n investment property is business combintion requires judgement of the specific requirements of FRS 3, independently from the requirements of AS 40, including whether the investment property is owner occupied. 4 Judgement nd estimtes The preprtion of interim condensed consolidted finncil informtion requires mngement to mke judgements, estimtes nd ssumptions tht ffect the ppliction of ccounting policies nd the reported mounts of ssets nd libilities, income nd expense. Actul results my differ from these estimtes. n prepring this interim condensed consolidted fmncil informtion, the significnt judgements mde by mngement in pplying the group's ccounting policies nd the key sources of estimtion uncertinty were the sme s those tht pplied to the nnul udited consolidted finncil sttements s t nd for the yer ended 31 ecember. 5 Bsic nd diluted ernings per shre ttributble to the shreholders of the prent compny Bsic nd diluted ernings per shre is computed by dividing the profit for the period ttributble to the shreholders of the prent compny by the weighted verge number of shres outstnding during the period less tresury shres. The prent compny hd no outstnding dilutive shres. Three months ended 2014 (Unudited) (Unudited) Profit for the period ttributble to the shreholders of the prent compny- 893,589 Weighted verge number of shres issued (excluding tresury shres) 796,469,279 Bsic nd diluted ernings per shre ttributble to the shreholders of the prentcompny(fils) , ,739, Nine months ended 2014 (Unudited) (Unudited) 3,546,790 1,987, ,129, ,255,

17 Arzn finncil Group for finncing nd nvestment KPSC (formerly: nterntionl Finnce Compny - KPSC) nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) Notes to the interim condensed consolidted finncil informtion (continued) 15 6 Csh nd csh equivlents (Restted) 31 ec (Unudited) (Audited) (Unudited) Csh nd bnk blnces 2,642,153 8,947,736 5,837,604 Term deposits -1 to 3 months 2,972,067 3,114,410 2,723,781 5,614,220 12,062,146 8,561,385 The term deposits crry effective interest of 1.75% (31 ecember : 1.75% nd 30 September : 6.5%). 7 nstlment credit debtors 2014 (Unudited) 31 ec. (Audited) (Unudited) Gross instlment credit debtors eferred income 24,743,497 (1,356,306) 23,401,664 (983,643) 33,701,195 (941,030) Specific provision for doubtful debts Generl provision for doubtful debts 23,387,191 (8,358,328) (1,597,063) 22,418,021 (1 0,957,594) (2,006, 161) 32,760,165 (11,803,686) (1,880,779) 13,431,800 9,454,266 19,075,700 Gross instlment credit debtors re repyble s foows: 2014 (Unudited) 31 ec. (Audited) (Unudited) Within one yer More thn yer 17,841,829 6,901,668 19,278,570 4,123,094 24,878,090 8,823,105 24,743,497 23,401,664 33,701,195 The effective nnul interest rte erned on instlment credit rnged from 3% to 9% per nnum (31 ecember : 3% to 9% nd 30 September : 3% to 9%). The provision for doubtful debts is in greement, in mteril respect, with the specific prov1s1on requirements of the Centrl Bnk of Kuwit nd FRS. Furthermore, generl provision of 1% on instlment credit blnces, where no specific provision is mde, is tken in ccordnce with the instructions of the Centrl Bnk of Kuwit. ncluded within the gross instment credit debtors is n mount of 3,105,046 (31 ecember : <3,148,937 nd 30 September : <13,023,812) in respect of relted prties (note 19). This mount is secured by wy of pledge of certin locl nd foreign shres. The gross instment credit debtors include n mount of <96,178 (<252,719 s of 31 ecember, 30 September : <344,299) representing portfolio of customer lons which hve been discounted to bnk ccording to debt fctoring greement (note 12).

18 !l f ~-. 1: 1:. -. 3!. Arzn Finncil Group for Finncing nd investment -!-<PSC (formerly: nterntionl Finnce Compny- KPSC} nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) Notes to the interim condensed consofidted finncil informtion (continued) 8 nvestments t fir vlue through sttement of income 31 ec (Unudited) (Audited) (Unudited) Locl quoted shres 2,141,861 2,018,191 1,862,403 Foreign quoted shres 100, , ,397 nvestment in mnged portfolios 5,611,500 5,910,407 6,043,224 7,853,708 8,120,193 8,116,024 An investment portfolio with crrying vlue of 5,611,500 (31 ecember : 5,910,407 nd 30 September : 6,043,224) is pledged ginst term lons (note 13). 9 Accounts receivble nd other ssets (Restted) 31 ec (Unudited) (Audited) (Unudited) Trde receivbles 5,551,472 5,537,317 5,915,821 Provision for doubtful debts (2,592,558) (2,094,742) (2,571,703) 2,958,914 3,442,575 3,344,118 Stff lons receivble 10,045 17,576 21,149 Prepyments nd refundble deposits 54,741 46,882 61,292 Advnce pyments towrds purchse of investments 6,736, ,241 Other ssets 715, ,104 1,360, Avilble for sle investments 10,475,413 5,016,378 4,786, ec (Unudited} (Audited} (Unudited} Locl quoted shres 30,118,420 39,653,408 32,103,916 Locl unquoted shres 11,685,256 11,963,271 24,949,898 Foreign unquoted shres 8,605,766 7,086,319 7,391,845 nvestment in mnged portfolios 15,969,567 17,081,333 4,050,599 nvestment funds 323, , ,669 66,702,495 75,973,784 68,682,927 The unquoted investments include investments with crrying vlue of 2,159,653 (31 ecember : 2,755,147 nd 30 September : 8,882,043) stted t cost due to unvilbility of relible sources to determine their fir vlues. Mngement studies nd csh flow expecttions for these investments do not indicte ny impirment for these investments. Quoted nd unquoted locl shres nd investment in mnged portfolios with n ggregte crrying vlue of 31,965,816 (31 ecember : 31,603,700 nd 30 September : 33,495,817) re pledged ginst due to bnks, term lons nd murbh pyble (notes 12, 13 nd 14). '16

19 r J... Arzn finncil Group for finncing nd nvestment KPSC (formerly: nterntionl Finnce Compny- KPSC) nd its Subsidiries nterim Condensed Consolidted Finncil nformtion (Unudited) Notes to the interim condensed consolidted finncil informtion (continued) 10 Av.ilble for sle investments (continued) uring the period the group recognised n impirment loss of 309,979 (30 September : 1,470,951) on certin investments. Mngement hs performed n nlysis of the underlying investments which indictes tht there is no further impirment. 11 nvestment in ssocites Below is the movement in the investment in ssocites during the period/yer: (Restted) 31 ec (Unudited) (Audited) (Unudited) At 1 Jnury 54,071,423 33,408,914 33,408,914 Additions 22,516,609 13,248,503 isposls (2,224,671) (1,131,876) Shre of results (19S,019) 1,227, ,535 Reduction of n ssocite's cpitl (384,415) (1,223,750) (1,223,750) ividends from ssocites (939,714) (717,601) (1 '151,990) Foreign currency trnsltion offoreign ssocites 98,417 (7,992) (35,062) 50,426,021 54,071,423 44,560,150 uring the period, the group sold one of its ssocite relising gin of 130, ue to bnks This represents credit fcilities grnted to the group from locl bnk in the form of overdrft fcilities. The credit fcilities crry interest rte of 4.5% per nnum (31 ecember : 4.5% per nnum nd 30 September ~013: 4.5% per nnum) nd pyble on demnd. Credit fcilities re grnted ginst pledge of certin vilble for sle investments (note 10). This blnce lso includes n mount of 100,051 (31 ecember : 238,222 nd 30 September : 133,548) due to bnk ginst the fctoring of certin instlment credit debtors (note 7). 13 Term lons Term lons re repyble to locl nd foreign bnks in different periods nd ber interest t nnul rtes rnging from 4.5% to 5.5% (31 ecember : 4.5% to 5% nd 30 September : 4.5% to 6%). Lons re repyble s foows: ec. (Unudited) (Audited) (Unudited) Within one yer 5,390,000 11,190,000 3,106,700 After one yer 3,280,000 4,810,000 5,320,000 8,670,000 16,000,000 8,426,700 Lons re secured by the pledge of investments t fir vlue through sttement of income nd vilble for sle investments (notes 8 nd 10). 17

20 g m m ~ Arzn finncil Group for finncing nd nvestment - ~(PSC (formerly: nterntionl Finnce Compny - KPSC) nd its Subsidiries lnterim Condensed Consolidted finncil nformtion (Unudited} Notes to the interim condensed consolidted finncil informtion (continued) 18 tl 0 m. lj M.urbh pyble This represents slmic finncing obtined from locl flnncil institution, crrying n effective proflt rte of 5% (31 ecember : 6.00% nd 30 September : 6.00%). This flnncing is secured by wy of mortgge of certin vilble for sle investments (note 10). Murbh pyble is due s foows: Within one yer After one yer 15 Tresury shres Number of tresury shres Percentge of shreholdership Mrket vlue () Cost () 2014 (Unudited) 5,200,000 5,200, (Unudited) 6,033, % 398, , ec. (Audited) 1,600,000 5,200,000 6,800, ec. (Audited) 5,483, % 427, ,141 (Unudited) 2,400,000 4,400,000 6,800,000 (Unudited) 6,363, % 496, ,148 R,eserves of the prent compny equivlent to the cost of the tresury shres hve been ermrked s nondistributble. 16 Annul generl ssembly The Annul Generl Assembly of the shreholders held on 26 June 2014 pproved the consolidted fmncil sttements for the yer ended 31 ecember without ny dividend. Also, the extrordinry generl ssembly of the shreholders held on 26 June 2014 pproved to write off ccumulted losses of 12,709,887 s t 31 ecember by trnsfer from shre premium of <5,732,745 nd 6,977,142 from legl reserve. 17 Fiduciry ccounts nvestment portfolios mnged by the group nd ssets held in trust or in flduciry cpcity nd relted libilities re not treted s the group's ssets or libilities nd ccordingly re not included in the interim condensed consolidted flnncil position. Totl flduciry ssets s t the fmncil position dte were 2,644,677 (31 ecember : <2,456,041 nd 30 September : <2,682,046).

21 m m m J Arzn finncil Group for Finncing nd nvestment KPSC {formerly: nterntionl Finnce Compny- KPSC) nd its Subsidiries nterim Condensed Consolidted fin11ci! nformtion (Unudited) Notes to the interim condensed consolidted finncil informtion (continued) 18 Segmentl informtion Operting segments re identified bsed on internl mngement reporting informtion tht is regulrly reviewed by the chief operting decision mker in order to octe resources to the segment nd to ssess its performnce, nd is reconciled to group profit or loss. The mesurement policies the group uses for segment reporting under FRS 8 re the sme s those used in its nnul udited consolidted finncil sttements. The group's principl trding ctivities re crried out within the Stte of Kuwit nd of the group's ssets nd libilities re locted in Kuwit in ddition to GCC, Middle Est nd other countries. The group opertes in four business segments; instlment credit, investment, brokerge nd rel estte. The segmentl nlysis of totl revenues, profit for the yer, totl ssets nd totl libilities for the business segments re s foows: nstlment Finncil Rel estte credit nvestments brokerge investment Totl Nine months ended Totl revenues 4,012,810 5,205,077 (1,334,966) 341,701 8,224,622 Profit!(loss) for the period 1,948,297 2,789,610 (1 '71 0,899) 292,719 3,319,727 Three months ended Totl revenues 2,598,305 1,054,139 (1,440,991) 260,346 2,471,799 Profitl(loss) for the period 1,998,728 (43,181) (1,595,506) 242, ,331 As t Totl ssets 21,729, ,234,311 16,947,335 6,019, ,930,976 Totl libilities 15,961 '191 7,500,700 2,971,244 26,433,135 Net ssets 5,768, ,733,611 13,976,091 6,019, ,497,841 Nine months ended 30 September Totl revenues 3,070,600 3,553, , ,970 7,437,533 Profit for the period 302,236 1,274, , ,204 2,021,265 Three months ended 30 September Totl revenues 1,441, , ,444 8,454 2,801,848 Profitl(loss) for the period 828,107 (319,802) 67, , ,509 As t 30 September Totl ssets (restted) 29,288, ,61 0,295 18,630,644 7,983, ,512,177 Totl libilities 12,563,307 9,896,395 3,067,108 25,526,810 Net ssets 16,724,844 96,713,900 15,563,536 7,983, ,985,367 19

22 ~ ~ J Arzn Finncil Group tor Finncing nd investment - KP:SC (formerly: nterntionl Finnce Compny - KP:SC) nd its Subsidiries lnterim Condensed Consolidted Finncil nformtion {Unudited) Notes to the interim condensed consolidted finncil informtion (continued).. 19 Relted prty blnces nd trnsctions Relted prties represent ssocites, mjor shreholders, directors nd key mngement personnel of the group, nd entities controed, jointly controed or significntly influenced by such prties. Pricing policies nd terms of these trnsctions re pproved by the group's mngement. Trnsctions between the prent compny nd its subsidiries which re relted prties of the prent compny hve been eliminted on consolidtion nd re not disclosed in this note. etils of significnt relted prty blnces nd trnsctions re s foows: nterim condensed consqiidted sttement of finncil position nstlment credit debtors-gross (note 7) ue from relted prties ue to shreholders (included in ccounts pyble nd other libilities) ue to relted prties nterim condensed consolidted sttement of income ncome from instlment credit debtors Profit on sle of investment in ssocite Profit on sle of vilble for sle investment Key mngement compenstion: Slries nd other short term benefits Provision for end of service benefits 20 Fir vlue mesurement 2014 (Unudited) 3,105, , , ,224 Three months ended 2014 (Unudited) 57, ,454 8,325 (Unudited) 188, ,698 53,687 5, Fir vlue hierrchy Fir vlue represents the price tht would be received to se n sset or pid to trnsfer libility in n orderly trnsction between mrket prticipnts t the mesurement dte ec. (Audited) (Unudited) 3,148,937 13,023, , , , , , ,968 Nine months ended 2014 (Unudited) (Unudited) 147, , , , , ,461 24,079 15,063 Finncil ssets nd finncil libilities mesured t fir vlue in the consolidted sttement of finncil position re grouped into three Levels of fir vlue hierrchy. The three Levels re defmed bsed on the observbility of significnt inputs to the mesurement, s foows: Level 1 fir vlue mesurements re those derived from quoted prices (undjusted) in ctive mrkets for identicl ssets or libilities; Level 2 fir vlue mesurements re those derived from inputs other thn quoted prices tht re observble for the sset or libility, either directly (i.e. s prices) or indirectly (i.e. derived from prices); nd