Annual Report 2018 GFH Financial Group Financial Statements Financial

1 Investing in the Future Financial Profile Annual Report 2018 GFH Financial Group Sharia Supervisory Report Board Report Independent Auditors’ Statements: Consolidated Position Financial Income Statement Equity Changes in Owners’ Cash Flows account investment Changes in restricted Fund & Charity Zakah and uses of Sources Statements Financial the Consolidated to Notes

His Royal Highness His Majesty His Royal Highness Prince Khalifa bin Salman Al Khalifa King Hamad bin Isa Al Khalifa Prince Salman bin Hamad Al Khalifa The Prime Minister of the The King of the The Crown Prince, First Deputy Prime Kingdom of Kingdom of Bahrain Minister & Deputy Supreme Commander 06 07 08 09 10 12 14 16 17 Kingdom of Bahrain

2 3

Investing in the Future Financial Profile Annual Report 2018 GFH Financial Group As our financial statements attest, statements financial Asour deliver and grow to continues GFH and shareholders its to value organisational through investors sustainable as well as efficiency practices business Consolidated Financial Statements 04

4 5 Sharia Supervisory Board Report on Independent Auditors’ Report The activities of GFH Financial Group B.S.C to the Shareholders for the financial year ending 31 December 2019 GFH Financial Group B.S.C, Manama, Kingdom of Bahrain

12 February 2020. 18 Jumada II 1441 AH. Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of GFH Financial Group BSC (the “Bank”) and its subsidiaries (together Prayers and Peace Upon the Last Apostle and Messenger, Our prophet Mohammed, His comrades and Relatives. the “Group”) which comprise the consolidated statement of financial position as at 31 December 2019, the consolidated statements of income, changes in owners’ equity, cash flows, changes in restricted investment accounts and sources and uses of zakah and charity fund for the year The Sharia Supervisory Board of GFH Financial Group have reviewed the Bank’s investment activates and compared them with the previously then ended, and a summary of significant accounting policies and other explanatory notes. issued fatawa and rulings during the financial year 31st December 2019. Respective responsibilities of board of directors and auditors Respective Responsibility of Sharia Supervisory Board These consolidated financial statements and the Group’s undertaking to operate in accordance with Islamic Shari’a rules and principles are The Sharia Supervisory Board believes that as a general principle and practice, the Bank Management is responsible for ensuring that it conducts the responsibility of the Board of Directors of the Bank. Our responsibility is to express an opinion on these consolidated financial statements its business in accordance with Islamic Sharia rules and principles. The Sharia Supervisory Board responsibility is to express an independent based on our audit. opinion on the basis of its control and review of the Bank’s operations and to prepare this report. Basis of opinion Basis of opinion We conducted our audit in accordance with Auditing Standards for Islamic Financial Institutions issued by Accounting and Auditing Organisation Based on Sharia Supervisory Board fatwas and decisions, AAOIFI standards and Sharia Audit plan, the Sharia Supervisory Board’s through for Islamic Financial Institutions. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether its periodic meetings reviewed the Sharia Audit function reports and examined the compliance of documents and transactions in regards to the consolidated financial statements are free of material misstatement. An audit includes examining, on a test-basis, evidence supporting Islamic Sharia rules and principles, in coordination with Sharia Implementation & Coordination function. Furthermore, the Bank’s management the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and explained and clarified the contents of Consolidated Balance Sheet, Consolidated Income Statement, Consolidated statement of Zakah and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit Charity fund, and attached notes for the financial year ended on 31st December 2019 to our satisfaction. provides a reasonable basis for our opinion.

Opinion Opinion The Sharia Supervisory Board believes that, In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December • The contracts, transactions and dealings entered into by the Bank are in compliance with Islamic Sharia rules and principles 2019, and of its consolidated results of operations, its consolidated cash flows, its consolidated changes in owners’ equity, its consolidated changes • The distribution of profit and allocation of losses on investments was in line with the basis and principles approved by the Sharia Supervisory in restricted investment accounts and its consolidated sources and uses of zakah and charity fund for the year then ended in accordance with Board and in accordance to the Islamic Sharia rules and principles Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions and the Shari’a rules and • Any earnings resulted from sources or means prohibited by the Islamic Sharia rules and principles have been directed to the Charity account principles as determined by the Shari’a Supervisory Board of the Bank. • Zakah was calculated according to the Islamic Sharia rules and principles, by the net assets method and the shareholders should pay their portion of Zakah on their shares as stated in the Zakah guide Report on other regulatory requirements • The Bank was committed to comply with Islamic Sharia rules and principles, the Sharia Supervisory Board fatawa and guidelines, Sharia-related As required by the Commercial Companies Law and Volume 2 of the Central Bank of Bahrain (CBB) Rule Book, we report that: policies and procedures, AAOIFI’s Sharia standards, and Sharia directives issued by the CBB a) the Bank has maintained proper accounting records and the consolidated financial statements are in agreement therewith; Praise be to Allah, Lord of the worlds. b) the financial information contained in the Chairman’s report is consistent with the consolidated financial statements; c) we are not aware of any violations during the year of the Commercial Companies Law, the CBB and Financial Institutions Law No 64 of 2006 Prayer on Prophet Mohammed (Peace Be Upon Him), all his family and Companions. (as amended), the CBB Rule Book (Volume 2, applicable provisions of Volume 6 and CBB directives), the CBB Capital Markets Regulations and Associated Resolutions, the rules and procedures or the terms of the Bank’s memorandum and articles of association that would have had a material adverse effect on the business of the Bank or on its financial position; and d) satisfactory explanations and information have been provided to us by management in response to all our requests.

KPMG Fakhro Partner Registration No. 100 12 February 2020

Sheikh Nedham Yaquby Sheikh Abdulla Al Manie Sheikh Abdulaziz Al Qassar Sheikh Fareed Hadi

Financial Statements GFH Twenty Years P.6 Annual Report & Accounts Consolidated statement of Consolidated financial position income statement as at 31 December 2019 for the year ended 31 December 2019 US$ 000’s US$ 000’s

Note 31 December 2019 31 December 2018 Note 2019 2018 ASSETS Continuing operations Cash and bank balances 6 362,345 341,567 income Asset management 2,880 2,572 Treasury portfolio 7 1,588,661 818,000 Deal related income 92,971 40,100 Financing a