AHLI UNITED BANK K.S.C.P. KUWAIT INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION 30 SEPTEMBER 2017 (UNAUDITED)

AHLI UNITED BANK K.S.C.P. KUWAIT INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION 30 SEPTEMBER 2017 (UNAUDITED)

Kuwait Interim Condensed Consolidated Financial Information 2017 C o n t e n t s Page Review Report 1-2 Interim Condensed Consolidated Statement of Profit or Loss (Unaudited) 3 Interim Condensed Consolidated Statement of other Comprehensive Income (Unaudited) 4 Interim Condensed Consolidated Statement of Financial Position (Unaudited) 5 Interim Condensed Consolidated Statement of Changes in Equity (Unaudited) 6 Interim Condensed Consolidated Statement of Cash Flows (Unaudited) 7 (Unaudited) 8 15

Interim Condensed Consolidated Statement of Profit or Loss For the period ended 2017 (Unaudited) Three months ended Nine months ended 2017 2016 2017 2016 Notes Financing income 3 35,823 33,820 104,325 98,233 Distribution to depositors 4 (11,675) (11,437) (32,385) (33,129) Net financing income 24,148 22,383 71,940 65,104 Net fees and commission income 2,724 2,464 8,070 7,828 Foreign exchange gains 760 796 1,813 2,632 Net gain on sale of investment properties - - - 2,949 Net gain on sale of investments 756 76 2,533 149 Share of results from associate (57) (118) (291) (338) Other income (22) 239 461 971 Total operating income 28,309 25,840 84,526 79,295 Provision and impairment losses (4,290) (3,827) (15,326) (13,835) Operating income after provision and impairment losses 24,019 22,013 69,200 65,460 Staff costs (6,435) (5,025) (17,185) (15,363) Depreciation (664) (562) (1,826) (1,885) Other operating expenses (2,754) (2,564) (8,306) (7,372) Total operating expenses (9,853) (8,151) (27,317) (24,620) PROFIT FROM OPERATIONS 14,166 13,862 41,883 40,840 Zakat (138) (163) (418) (406) National Labour Support Tax (346) (353) (1,046) (1,025) Contribution to Kuwait Foundation for the Advancement of Sciences (128) (105) (375) (370) PROFIT FOR THE PERIOD 13,554 13,241 40,044 39,039 Net profit for the period attributable to Bank s equity shareholders 13,554 13,495 40,044 39,132 Net profit attributable to non-controlling interests - (254) - (93) 13,554 13,241 40,044 39,039 Basic and diluted earnings per share attributable to the Bank s equity shareholders (fils) 5 8.0 8.0 22.8 23.2 The attached notes 1 to 15 form part of the interim condensed consolidated financial information. 3

Interim Condensed Consolidated Statement of other Comprehensive Income For the period ended 2017 (Unaudited) Three months ended Nine months ended 2017 2016 2017 2016 Profit for the period 13,554 13,241 40,044 39,039 Other comprehensive (loss) income: Other comprehensive (loss) income to be reclassified to consolidated statement of profit or loss in subsequent periods: Net movement in cumulative changes in fair values of investments available for sale (115) 607 (465) 1,009 Exchange differences on translation of foreign operations - - 10 (277) Net other comprehensive (loss) income to be reclassified to consolidated statement of profit or loss in subsequent periods (115) 607 (455) 732 Total comprehensive income for the period 13,439 13,848 39,589 39,771 Total comprehensive income attributable to Bank's equity shareholders 13,439 13,638 39,589 39,528 Total comprehensive income attributable to non- controlling interests - 210-243 13,439 13,848 39,589 39,771 The attached notes 1 to 15 form part of the interim condensed consolidated financial information. 4

Interim Condensed Consolidated Statement of Financial Position (Audited) 2017 31 December 2016 2016 Notes ASSETS Cash and balances with banks 6 42,394 44,144 101,024 Deposits with Central Bank of Kuwait 457,416 426,847 527,443 Deposits with other banks 285,638 227,280 359,276 Financing receivables 7 2,762,976 2,706,054 2,793,959 Investments available for sale 217,319 203,973 164,487 Investment in associate 9,750 10,162 10,349 Investment properties 32,034 23,055 23,615 Premises and equipment 33,261 31,393 31,245 Other assets 31,957 19,253 13,903 Assets classified as held for sale 8 - - 12,442 TOTAL ASSETS 3,872,745 3,692,161 4,037,743 LIABILITIES AND EQUITY LIABILITIES Deposits from banks and financial institutions 839,252 702,152 831,991 Deposits from customers 2,504,203 2,491,871 2,762,714 Other liabilities 64,405 52,450 46,222 Liabilities directly associated with assets held for sale 8 - - 3,300 3,407,860 3,246,473 3,644,227 EQUITY Share capital 9 187,096 173,237 173,237 Reserves 261,106 255,768 259,316 448,202 429,005 432,553 Treasury shares 9 (43,957) (43,957) (43,957) Attributable to Bank s equity shareholders 404,245 385,048 388,596 Perpetual Tier 1 Sukuk 10 60,640 60,640 - Non-controlling interests - - 4,920 TOTAL EQUITY 464,885 445,688 393,516 TOTAL LIABILITIES AND EQUITY 3,872,745 3,692,161 4,037,743 Dr. Anwar Ali Al-Mudhaf Chairman Richard Groves Chief Executive Officer The attached notes 1 to 15 form part of the interim condensed consolidated financial information. 5

Interim Condensed Consolidated Statement of Changes in Equity For the period ended 2017 (Unaudited) Attributable to the Bank s equity shareholders Reserves Share capital Share premium Statutory reserve General reserve Retained earnings Cumulative changes in fair values Property revaluation reserve Treasury shares reserve Foreign currency translation reserve Total reserves Treasury shares Perpetual Tier 1 Sukuk KD 000 Noncontrolling interests Total Balance as at 31 December 2016 173,237 12,883 74,199 22,660 131,048 3,924 10,050 974 30 255,768 (43,957) 60,640-445,688 Profit for the period - - - - 40,044 - - - - 40,044 - - - 40,044 Other comprehensive (loss) income for the period - - - - - (465) - - 10 (455) - - - (455) Total comprehensive income (loss) for the period - - - - 40,044 (465) - - 10 39,589 - - - 39,589 Dividend 2016 (Note 9) - - - - (18,717) - - - - (18,717) - - - (18,717) Issue of bonus shares 2016 (Note 9) 13,859 - - - (13,859) - - - - (13,859) - - - - Profit payment on Tier 1 Sukuk (Note 10) - - - - (1,675) - - - - (1,675) - - - (1,675) Balance as at 2017 187,096 12,883 74,199 22,660 136,841 3,459 10,050 974 40 261,106 (43,957) 60,640-464,885 Balance as at 31 December 2015 157,488 12,883 69,962 22,660 118,189 7,792 10,014 974 153 242,627 (43,957) - 4,677 360,835 Profit (loss) for the period - - - - 39,132 - - - - 39,132 - - (93) 39,039 Other comprehensive income (loss) for the period - - - - - 522 - - (126) 396 - - 336 732 Total comprehensive income (loss) for the period - - - - 39,132 522 - - (126) 39,528 - - 243 39,771 Dividend 2015 - - - - (7,090) - - - - (7,090) - - - (7,090) Issue of bonus shares 2015 15,749 - - - (15,749) - - - - (15,749) - - - - Balance as at 2016 173,237 12,883 69,962 22,660 134,482 8,314 10,014 974 27 259,316 (43,957) - 4,920 393,516 The attached notes 1 to 15 form part of the interim condensed consolidated financial information. 6

Interim Condensed Consolidated Statement of Cash Flows For the period ended 2017 (Unaudited) Nine months ended 2017 2016 Note OPERATING ACTIVITIES Profit for the period 40,044 39,039 Adjustments for: Net gain on sale of investment properties - (2,949) Net gain on sale of investments (2,533) (149) Amortisation of sukuk premium 467 374 Share of results from associate 291 338 Dividend income (138) (658) Net income from investment properties (164) (304) Depreciation 1,826 1,885 Provision and impairment losses 15,326 13,835 Operating profit before changes in operating assets and liabilities 55,119 51,411 Changes in operating assets / liabilities: Deposits with Central Bank of Kuwait (25,569) (127,237) Deposits with other banks (11,186) (117,229) Financing receivables (65,699) (137,664) Other assets (8,279) 10,925 Deposits from banks and financial institutions 137,223 2,001 Deposits from customers 12,333 102,085 Other liabilities 2,041 (3,604) Net cash from (used in) operating activities 95,983 (219,312) INVESTING ACTIVITIES Purchase of investments available for sale (293,224) (253,972) Sale and redemption of investments available for sale 280,548 230,123 Proceeds from sale of investment properties - 8,784 Purchase of investment properties (9,100) - Purchase of premises and equipment (3,694) (2,683) Dividends income received 138 658 Net income from investment properties 164 304 Net cash used in investing activities (25,168) (16,786) FINANCING ACTIVITIES Dividends paid to shareholders (18,717) (7,090) Profit payment on Tier 1 Sukuk (1,675) - Net cash used in financing activities (20,392) (7,090) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 50,423 (243,188) Cash and cash equivalents at 1 January 77,048 552,644 CASH AND CASH EQUIVALENTS AT 30 SEPTEMBER 6 127,471 309,456 The attached notes 1 to 15 form part of the interim condensed consolidated financial information. 7

1 INCORPORATION AND ACTIVITIES Ahli United Bank K.S.C.P. (the Bank ) is a public shareholding company incorporated in Kuwait in 1971 and is listed on Kuwait Stock Exchange. It is engaged in carrying out banking activities in accordance with Islamic Sharia'a and is regulated by the Central Bank of Kuwait ( CBK ). Its registered office is at Darwazat Al-Abdul Razzak, P. O. Box 71, Safat 12168, Kuwait. The Bank has commenced operations as an Islamic bank from 1 April 2010. From that date, all activities are conducted in accordance with Islamic Sharia a, as approved by the Bank s Fatwa and Sharia a Supervisory Board. The Bank is a subsidiary of Ahli United Bank B.S.C., a Bahraini bank (the Parent ), listed on the Bahrain and Kuwait Stock Exchanges. The Bank s principal subsidiary is Kuwait and Middle East Financial Investment Company K.S.C.P. ( KMEFIC ), a company incorporated in the State of Kuwait, listed on the Kuwait Stock Exchange and engaged in investment and portfolio management activities for its own account and for clients. The Bank held 50.12% effective interest in KMEFIC as at 2017 (31 December 2016: 50.12% and 2016: 50.15%). The interim condensed consolidated financial information of the Bank and its subsidiary ( the Group ) for the nine months period ended 2017 were authorised for issue in accordance with a resolution of the Board of Directors of the Bank on 10 October 2017. 2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The interim condensed financial information of the Bank has been prepared in accordance with International Accounting Standard ( IAS ) 34: Interim Financial Reporting. The accounting policies used in the preparation of this interim condensed consolidated financial information are consistent with those used in the preparation of the annual consolidated financial statements for the year ended 31 December 2016, except for the adoption of the amendments and annual improvements to International Financial Reporting Standards (IFRSs), relevant to the Group which are effective for annual reporting period starting from 1 January 2017 and did not result in any material impact on the accounting policies, financial position or performance of the Group. The annual consolidated financial statements for the year ended 31 December 2016 were prepared in accordance with the regulations of the State of Kuwait for financial services institutions regulated by the CBK. These regulations require adoption of all IFRS except for the IAS 39: Financial instruments: Recognition and Measurement ( IAS 39 ) requirement for collective provision, which has been replaced by the CBK s requirement for a minimum general provision. The interim condensed consolidated financial information does not contain all information and disclosures required for full financial statements prepared in accordance with IFRS, and should be read in conjunction with the Group s annual consolidated financial statements for the year ended 31 December 2016. Further, results for the nine months period ended 2017, are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2017. 3 FINANCING INCOME Financing income includes interest income, till the date of final conversion to Islamic Financing Receivable on 15 March 2017 amounting to KD 14 thousand ( 2016: KD 77 thousand) received from nonconverted loans and advances granted before conversion to an Islamic Bank, which represents 0.02% (30 September 2016: 0.1%) of the total financing income for the nine months ended 2017. Treatment of interest income is subject to resolutions of the Bank s Fatwa and Sharia a Supervisory Board. 4 DISTRIBUTION TO DEPOSITORS The Board of Directors of the Bank determines the depositors share of profit on a quarterly basis based on the Bank s results for the three months period ended 2017. 8

5 BASIC AND DILUTED EARNINGS PER SHARE Basic and diluted earnings per share for periods presented in the interim condensed consolidated statement of profit or loss are calculated as follows: Three months ended Nine months ended 2017 2016 2017 2016 Profit for the period attributable to the Bank s equity shareholders (KD 000) 13,554 13,495 40,044 39,132 Less: Profit payments on Tier 1 sukuks - - (1,675) - Profit for the period attributable to equity holders of the Bank after profit payment on Tier 1 Sukuks 13,554 13,495 38,369 39,132 Weighted average number of shares outstanding during the period 1,684,510,454 1,684,510,454 1,684,510,454 1,684,510,454 Basic and diluted earnings per share attributable to the Bank s equity shareholders (fils) 8.0 8.0 22.8 23.2 Earnings per share for the nine months ended 2016 was 25.1 fils, before retroactive adjustment to the number of shares following the bonus issue (Note 9). As there are no dilutive instruments outstanding, basic and diluted earnings per share are identical. 6 CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the interim condensed consolidated statement of cash flows consists of the following: (Audited) 31 December 2017 2016 2016 Cash and balances with banks 42,394 44,144 101,024 Deposits with Central banks and other banks - with an original maturity of seven days or less 85,077 32,904 208,432 127,471 77,048 309,456 7 FINANCING RECEIVABLES Financing receivables as at 2017 comprises of only Sharia a compliant Islamic Financing while the comparative period includes loans and advances carried forward from prior periods before conversion to an Islamic Bank amounting to KD 964 thousand as at 31 December 2016 and KD 1,119 thousand as at 2016. 8 ASSETS HELD FOR SALE The value of assets held for sale which are not Sharia a compliant was fully provided for in accordance with CBK instruction during 2016. 9

9 EQUITY a) The shareholders Annual General Assembly held on 30 March 2017, approved the audited consolidated financial statements of the Bank for the year ended 31 December 2016 and the distribution of cash dividend of 12 fils per share (2015: 5 fils per share) to the Bank s equity shareholders registered in Bank s records as of the date of Annual General Assembly Meeting and issuance of bonus shares of 8% (2015:10%) to Bank s equity shareholders on record at the date of regulatory approval. b) Treasury shares (Audited) 31 December 2017 2016 2016 Number of treasury shares 186,447,549 172,636,620 172,636,620 Treasury shares as a percentage of total shares issued 9.97% 9.97% 9.97% Cost of treasury shares (KD 000) 43,957 43,957 43,957 Market value of treasury shares at the reporting date (KD 000) 77,376 69,918 67,328 Weighted average market value per treasury share (Fils) 420 412 451 Amount equivalent to cost of treasury shares has been retained out of reserves as non-distributable throughout the holding period of the treasury shares. 10 PERPETUAL TIER 1 SUKUK In October 2016, the Bank through a Sharia'a compliant Sukuk arrangement issued Tier 1 Sukuk amounting to USD 200 million. Tier 1 Sukuk is a perpetual security in respect of which there is no fixed redemption date and constitutes direct, unsecured, deeply subordinated obligations (senior only to share capital) of the Bank subject to the terms and conditions of the Mudaraba Agreement. The Tier I Sukuk is listed on the Irish Stock Exchange and NASDAQ Dubai and callable by the Bank after five-year period ending October 2021 (the "First Call Date") or any profit payment date thereafter subject to certain redemption conditions including prior CBK approval. The net proceeds of Tier 1 Sukuk are invested by way of Mudaraba with the Bank (as Mudareb) on an unrestricted basis, by the Bank in its general business activities carried out through the general Mudaraba pool. Tier I Sukuk bears profit rate of 5.5% per annum to be paid semi-annually in arrears until the First Call Date subject to terms of the issue. After that, the expected profit rate will be reset based on then prevailing 5 years U.S Mid Swap Rate plus initial margin of 4.226 % per annum. At the issuer's sole discretion, it may elect not to make any Mudaraba distributions expected and in such event, the Mudaraba profit will not be accumulated and the event is not considered an event of default. Semi-annual profit was paid during the nine months period ended 2017. 11 TRANSACTIONS WITH RELATED PARTIES The Group enters into transactions with the parent, subsidiaries, associates, major shareholders, directors and key management, close members of their families and entities controlled, jointly controlled or significantly influenced by such parties in the ordinary course of business. The terms of these transactions are approved by the Group s management 10

11 TRANSACTIONS WITH RELATED PARTIES (CONTINUED) The related party balances in the interim condensed consolidated financial information are as follows: Parent Others Total As at 2017 Financing receivables - 12,335 12,335 Credit cards - 42 42 Deposits with other banks 95,681 283 95,964 Deposits from banks and financial institutions 27,854 429,424 457,278 Deposits from customers - 2,253 2,253 Commitments and contingent liabilities 10,533 7,836 18,369 Islamic Forward Agreements 18,086-18,086 Profit Rate Swap 37,769-37,769 As at 31 December 2016 (Audited) Financing receivables - 12,346 12,346 Credit cards - 40 40 Deposits with other banks 86,227 6,294 92,521 Deposits from banks and financial institutions 46,236 480,094 526,330 Deposits from customers - 1,437 1,437 Commitments and contingent liabilities 17,385 8,025 25,410 Islamic Forward Agreements 8,367-8,367 As at 2016 Financing receivables - 8,781 8,781 Credit cards - 45 45 Deposits with other banks 89,125 177 89,302 Deposits from banks and financial institutions 21,057 459,736 480,793 Deposits from customers - - - Commitments and contingent liabilities 13,472 6,794 20,266 Islamic Forward Agreements 2,787-2,787 Parent Others Total Transactions For the period ended 2017 Financing income 796 398 1,194 Distribution to depositors 195 7,245 7,440 For the period ended 2016 Financing income 523 308 831 Distribution to depositors 280 5,537 5,817 11

12 COMMITMENTS AND CONTINGENT LIABILITIES a) Financial instruments with contractual amounts representing credit risk: (Audited) 31 December 2017 2016 2016 Acceptances 41,144 30,272 21,750 Letters of credit 74,986 68,452 68,560 Guarantees 418,685 435,614 405,238 534,815 534,338 495,548 Irrevocable credit commitments to extend credit as at the statement of financial position date amounted to KD 3,001 thousand (31 December 2016: KD 24,077 thousand and 2016: KD 39,854 thousand). b) The capital commitment for purchase of assets as at 2017 is KD 2,009 thousand (31 December 2016: KD 1,631 thousand and 2016: KD 2,574 thousand). 13 DERIVATIVE FINANCIAL INSTRUMENTS Islamic forward agreements (Waad) In the ordinary course of business, the Bank enters into various types of transactions that involve financial instruments represented in forward foreign exchange agreements (Waad) to mitigate foreign currency risk. A Waad is a financial transaction between two parties where payments are dependent upon movements in price of one or more underlying financial instruments, reference rate or index in accordance with Islamic Sharia a. The notional amount, disclosed gross, is the amount of a Waad s underlying asset/ liability and is the basis upon which changes in the value are measured. The notional amounts indicate the volume of transactions outstanding at the period-end and are neither indicative of the market risk nor credit risk. Profit rate swaps Profit rate swaps are contractual agreements between two parties and may involve exchange of profit or exchange of both principal and profit for a fixed period of time based on contractual terms. The notional amounts indicate the volume of transactions outstanding at the period-end and are neither indicative of the market risk nor credit risk. The fair value of derivative financial instruments included in the financial records, together with their notional amounts is summarised as follows: 2017 (Audited) 31 December 2016 2016 Positive fair value Negative fair value Notional Positive fair value Negative fair value Notional Positive fair value Negative fair value Notional KD 000 s KD 000 s KD 000 s KD 000 s KD 000 s KD 000 s KD 000 s KD 000 s KD 000 s Waad 238 212 40,858 123 168 12,345 65 50 7,842 Profit Rate Swaps 68 11 67,984 - - - - - - 306 223 108,842 123 168 12,345 65 50 7,842 All derivative contracts are fair valued based on observable market inputs and are classified as level 2. 12

14 SEGMENT REPORTING The Group s operating segments are determined based on the reports reviewed by the Senior management that are used for strategic decisions. These segments are strategic business units having similar economic characteristics that offer different products and services. These operating segments are monitored separately by the Group for the purpose of making decisions about resource allocation and performance assessment. These operating segments meet the criteria for reportable segments and are as follows: Retail and Commercial Banking - comprising a full range of banking operations covering credit and deposit services provided to customers and correspondent banking. The Bank uses a common marketing and distribution strategy for its commercial banking operations. Treasury and Investment Management - comprising clearing, money market, foreign exchange, Sukuk, other treasury and miscellaneous operations, proprietary investment, securities trading activities and fiduciary fund management activities. Segment results include revenue and expenses directly attributable to a segment and an allocation of overhead cost. The Group measures the performance of operating segments through segment profit or loss net of taxes in management and reporting systems. Segment assets and liabilities comprise those operating assets and liabilities that are directly attributable to the segment. Segment information for the nine months period ended 2017 and 2016 are as follows: Retail and Commercial Banking Treasury and Investment Management Total 2017 2016 2017 2016 2017 2016 Net financing income 60,072 50,409 11,868 14,695 71,940 65,104 Fees, commissions and others 9,164 8,106 3,422 6,085 12,586 14,191 Total operating income 69,236 58,515 15,290 20,780 84,526 79,295 Provision and impairment losses (12,550) (14,002) (2,776) 167 (15,326) (13,835) Operating expenses and taxation (23,383) (22,589) (5,773) (3,832) (29,156) (26,421) Segment result 33,303 21,924 6,741 17,115 40,044 39,039 Add: Net profit attributable to non-controlling interest - 93 Net profit for the period attributable to Bank s equity shareholders 40,044 39,132 Retail and Commercial Banking Treasury and Investment Management Total As at 2017 Segment assets 3,145,593 727,152 3,872,745 Segment liabilities 1,788,176 1,619,684 3,407,860 As at 31 December 2016 (Audited) Segment assets 3,080,985 611,176 3,692,161 Segment liabilities 1,704,182 1,542,291 3,246,473 As at 2016 Segment assets 3,183,203 854,540 4,037,743 Segment liabilities 1,828,034 1,816,193 3,644,227 13

15 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS The following table provides the fair value measurement hierarchy of the Group s financial instruments: Fair value measurement hierarchy for assets and liabilities as at 2017 is as follows: Level: 1 Level: 2 Level: 3 Total 2017 Assets measured at Fair Value Financial assets Investments available for sale 210,431 2,456 4,292 217,179 Derivative financial instruments Waad - 238-238 Profit Rate Swap - 68-68 - 306-306 210,431 2,762 4,292 217,485 Liability measured at fair value Derivative financial instruments Waad - 212-212 Profit Rate Swap - 11-11 - 223-223 Level: 1 Level: 2 Level: 3 Total 31 December 2016 (Audited) KD 000 KD 000 KD 000 KD 000 Assets measured at fair value Financial assets Investments available for sale 193,464 6,077 4,292 203,833 Derivative financial instrument Waad - 123-123 193,464 6,200 4,292 203,956 Liability measured at fair value Derivative financial instrument Waad - 168-168 - 168-168 Level: 1 Level: 2 Level: 3 Total 2016 Assets measured at Fair Value Financial assets Investments available for sale 148,693 6,758 8,896 164,347 Islamic Forward Agreements Waad - 65-65 148,693 6,823 8,896 164,412 Liability measured at fair value Islamic Forward Agreements Waad - 50-50 - 50-50 14

15 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONTINUED) The primary medium and long-term financial liabilities are subordinated liabilities. The fair values of these financial liabilities are not materially different from their carrying values, since these liabilities are repriced at intervals of three or nine months, depending on the terms and conditions of the instrument and the resultant applicable margins approximate the current spreads that would apply for borrowings with similar maturities. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:- Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3 : Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. 15