Emirates Islamic Bank Interim Financial Statements - 1Q 2017

Transcription

1. In the Name of Allah The most Gracious and Merciful Emirates Islamic Bank (Public Joint Stock Company) Head Office 3rd Floor, Building 16, Dubai Health Care City, Dubai Tel.: +971 600599995 Fax: +971 4 3582659 P.O. Box: 6564, Dubai, United Arab Emirates Website: www.emiratesislamic.ae GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017
2. EMIRATES ISLAMIC BANK PJSC GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 Contents Page Independent auditors’ report on the review of the Group condensed consolidated interim financial statements 1 Group condensed consolidated interim statement of financial position 2 Group condensed consolidated interim statement of income (unaudited) 3 Group condensed consolidated interim statement of comprehensive income (unaudited) 4 Group condensed consolidated interim statement of changes in equity (unaudited) 5 Group condensed consolidated interim statement of cash flows (unaudited) 6 Notes to the Group condensed consolidated interim financial statements 7-21
5. EMIRATES ISLAMIC BANK PJSC GROUP CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME (UNAUDITED) FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 Notes INCOME Income from financing and investing activities Income from investment securities Income from Group Holding Company Commissions and fees income Other income TOTAL INCOME EXPENSES Personnel expenses General and administrative expenses Depreciation of property and equipment TOTAL EXPENSES NET OPERATING PROFIT BEFORE ALLOWANCES FOR IMPAIRMENT AND DISTRIBUTIONS Allowances for impairment, net of recoveries NET OPERATING PROFIT Customers' share of profit and distribution to sukuk holders NET PROFIT FOR THE PERIOD Earnings per share (AED) 13 14 For the three months period ended 31 March 2017 2016 AED '000 AED '000 509,423 41,501 28,993 115,046 29,893 724,856 501,499 6,772 45,299 125,391 33,345 712,306 (138,475) (95,244) (11,868) (245,587) (190,070) (102,143) (6,089) (298,302) 479,269 414,004 (134,885) 344,384 (123,272) 221,112 0.041 (263,378) 150,626 (105,433) 45,193 0.011 The attached notes 1 to 19 form an integral part of these Group condensed consolidated interim financial statements. The independent auditors’ report is set out on page 1. 3
6. EMIRATES ISLAMIC BANK PJSC GROUP CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 For the three months period ended 31 March 2017 2016 AED '000 AED '000 NET PROFIT FOR THE PERIOD 221,112 45,193 7,260 (20,360) (13,100) 208,012 8,656 4,254 12,910 58,103 Items that may be reclassified subsequently to Income statement: Other comprehensive income Cumulative changes in fair value of available-for-sale investments - Net change in fair value - Net amount transferred to income statement Total other comprehensive income for the period TOTAL COMPREHENSIVE INCOME FOR THE PERIOD The attached notes 1 to 19 form an integral part of these Group condensed consolidated interim financial statements. The independent auditors’ report is set out on page 1. 4
7. EMIRATES ISLAMIC BANK PJSC GROUP CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 ATTRIBUTABLE TO EQUITY HOLDERS OF THE GROUP Share capital AED '000 Statutory reserve AED '000 General reserve AED '000 Fair value reserve AED '000 Retained earnings AED '000 Total AED '000 As at 1 January 2016 Net profit for the period Other comprehensive income for the period Total comprehensive income for the period As at 31 March 2016 3,930,422 3,930,422 329,423 329,423 235,202 235,202 (4,127) 12,910 12,910 8,783 603,831 45,193 45,193 649,024 5,094,751 45,193 12,910 58,103 5,152,854 As at 1 January 2017 Net profit for the period Other comprehensive income for the period Total comprehensive income for the period As at 31 March 2017 5,430,422 5,430,422 339,986 339,986 245,765 245,765 19,404 (13,100) (13,100) 6,304 653,198 221,112 221,112 874,310 6,688,775 221,112 (13,100) 208,012 6,896,787 The attached notes 1 to 19 form an integral part of these Group condensed consolidated interim financial statements. The independent auditors’ report is set out on page 1. 5
8. EMIRATES ISLAMIC BANK PJSC GROUP CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 OPERATING ACTIVITIES Note Net profit for the period Adjustments: Allowances for impairment on financing and investing receivables Allowances for impairment on investments Dividend income (Gain) / loss on sale of available-for-sale investments Depreciation on investment properties Depreciation on property and equipment Operating profit before changes in operating assets and liabilities For the three months period ended 31 March 2017 2016 AED '000 AED '000 221,112 45,193 132,345 18,900 (5,000) (28,986) 3,005 11,868 353,244 206,638 56,740 4,970 6,803 6,089 326,433 Changes in balances with UAE Central Bank Changes in due from banks Changes in financing and investing receivables Changes in other assets Changes in customers’ accounts Changes in due to banks Changes in other liabilities Zakat paid Net cash generated from / (used in) operating activities (2,165,973) 1,897,255 556,646 (41,544) (205,587) (54,073) 122,994 (35,139) 427,823 253,347 60,940 (3,214,535) (28,309) 872,131 680,281 (183,419) (33,483) (1,266,614) INVESTING ACTIVITIES Purchase of investment securities Proceeds from sale of investment securities Dividend income received Additions in investment properties Changes in property and equipment Net cash generated from / (used in) investing activities (102,862) 137,966 5,000 (133) (14,476) 25,495 (483,676) 414,008 (16) (13,878) (83,562) INVESTING ACTIVITIES Repayment of Sukuk financing Net cash used in investing activities (1,837,560) (1,837,560) - Net change in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period (1,384,242) 6,822,904 5,438,662 (1,350,176) 3,168,627 1,818,451 15 The attached notes 1 to 19 form an integral part of these Group condensed consolidated interim financial statements. The independent auditors’ report is set out on page 1. 6
9. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 1 LEGAL STATUS AND ACTIVITIES Emirates Islamic Bank PJSC (formerly Middle East Bank) (the “Bank”) was incorporated by a decree of His Highness the Ruler of Dubai as a conventional Bank with a limited liability in the Emirate of Dubai on 3rd of October 1975. The Bank was reregistered as a Public Joint Stock Company in July 1995 and is regulated by the Central Bank of United Arab Emirates. The Federal Law No. 2 of 2015, concerning Commercial Companies has come into effect from 1 July 2015, replacing the existing Federal Law No. 8 of 1984. The Bank is currently assessing the impact of the new law and expects to be fully compliant on or before the end of grace period on 30 June 2017. At an extraordinary general meeting held on 10th of March 2004, a resolution was passed to transform the Bank’s activities to be in full compliance with the Sharia rules and principles. The entire process was completed on 9th of October 2004 (the “Transformation Date”) when the Bank obtained the UAE Central Bank and other UAE authorities’ approvals. The Bank is a subsidiary of Emirates NBD PJSC, Dubai (the “Group Holding Company”). The ultimate parent company of the Group Holding Company is Investment Corporation of Dubai, a company in which the Government of Dubai is the major shareholder. The Bank is listed in the Dubai Financial Market. In addition to its head office in Dubai, the Bank operates through 64 branches in the UAE. The Group condensed consolidated interim financial statements combine the activities of the Bank’s head office, its branches and the following subsidiaries (together referred to as “the Group”). Ownership % Date of incorporation Principal activity 31 March 31 December & country 2017 2016 Emirates Islamic Financial Brokerage Co. LLC 26 April 2006, UAE EIB Sukuk Company Limited EI Funding Limited Financial brokerage services 100% 100% 6 June 2007, Cayman Islands Special Entity 100% 100% 15 May 2014, Cayman Islands Special Purpose Entity 100% 100% Purpose The Bank provides full commercial and banking services and offers a variety of products through Islamic financing and investing instruments in accordance with Islamic Sharia. The Bank’s registered office address is P.O. Box 6564, Dubai, United Arab Emirates. 2 BASIS OF PREPERATION a) Statement of compliance These condensed consolidated interim financial statements have been prepared in accordance with IAS 34, ‘Interim Financial Reporting’. They do not include all the information and disclosures required for full annual consolidated financial statements prepared in accordance with International Financial Reporting Standards and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2016. The adoption of the new and amended IFRS and IFRIC interpretations with effect from 1 January 2017 has had no effect on the condensed consolidated interim financial statements of the Group. In addition, results for the three months period ended 31 March 2017 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2017. These Group condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on 18 April 2017. 7
10. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 2 BASIS OF PREPARATION (continued) b) Basis of measurement The Group condensed consolidated interim financial statements have been prepared under the historical cost convention except for financial assets available for sale which are measured at fair value. The condensed consolidated interim financial statements are presented in United Arab Emirates Dirham (AED), which is the Group’s functional currency. Except where indicated, financial information presented in AED has been rounded to the nearest thousand. c) Significant accounting policies The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its most recent audited Group consolidated financial statements for the year ended 31 December 2016. d) Judgements and estimates The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires the management to use certain estimates and judgments that affect the reported amount of financial assets and liabilities and the resultant allowances for impairment and fair values. In particular, considerable judgment by management is required in the estimation of the amount and timing of future cash flows when determining the level of allowances required for impaired financing receivables as well as allowances for impairment provision for unquoted investment securities. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In preparing these Group condensed consolidated interim financial statements, significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation were the same as those that were applied to the Group consolidated financial statements as at and for the year ended 31 December 2016. e) Financial risk management The Group’s financial risk management objectives, policies and procedures are consistent with those disclosed in the audited Group consolidated financial statements for the year ended 31 December 2016. 3 CASH AND BALANCES WITH UAE CENTRAL BANK Cash in hand Balances with UAE Central Bank : Current accounts Reserve requirements Murabaha (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 307,265 263,571 2,770,673 3,874,672 5,565,131 12,517,741 1,375,258 4,014,785 6,009,188 11,662,802 The reserve requirements which are kept with the Central Bank of the UAE in AED and US Dollar are not available for use in the Group’s day to day operations and cannot be withdrawn without the Central Bank of the UAE’s approval. The level of reserves required changes every month in accordance with the Central Bank of the UAE’s directives. 8
11. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 4 DUE FROM BANKS Due from local banks Current accounts Interbank placements with other banks Murabaha with Group Holding Company Receivables from Dubai Bank Due from foreign banks Interbank placements Current accounts 5 (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 66 1,403,880 2,648,901 1,190,104 5,242,951 64 1,491,491 3,751,041 1,179,398 6,421,994 73,566 3,084,287 8,400,804 1,333,199 7,755,193 (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 552,704 660,831 801,095 2,014,630 686,038 660,718 718,694 2,065,450 119,248 2,133,878 (731,934) 1,401,944 211,061 2,276,511 (797,297) 1,479,214 806,284 595,660 1,401,944 864,765 614,449 1,479,214 12,623 12,623 91,813 12,623 104,436 390,839 998,482 1,389,321 1,401,944 334,363 1,040,415 1,374,778 1,479,214 797,297 18,900 (84,263) 731,934 678,832 128,140 (3,771) (5,904) 797,297 INVESTMENTS Available-for-sale Equity shares Funds Sukuks Held-to-maturity Sukuks Less: Allowance for impairment Investment securities comprise: Quoted Unquoted Held-to-maturity investments located: Within UAE Outside UAE Available-for-sale investments located: Within UAE Outside UAE Movements in allowances for impairment: Balance as at 1 January Allowances for impairment made during the period / year Recoveries / write backs during the period / year Write off / transfer during the period / year Balance at the end of the period / year 9
12. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 6 FINANCING AND INVESTING RECEIVABLES (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 Murabaha Ijarah Istisna'a Financing wakala Mudaraba Secured overdraft Credit card receivables 24,402,066 13,556,869 2,006,382 435,256 95,217 182,664 1,064,079 41,742,533 25,303,142 13,539,998 1,934,104 435,256 91,150 189,240 1,101,315 42,594,205 Less: Deferred income Less: Allowances for impairment (2,624,279) (3,425,525) 35,692,729 3,755,714 (2,753,333) (3,498,304) 36,342,568 3,610,230 22,308,226 13,384,503 35,692,729 22,910,839 13,431,729 36,342,568 34,536 609,912 807,201 3,229,312 370,735 3,665,929 24,442,712 4,802,659 922,330 2,857,207 41,742,533 (2,624,279) (3,425,525) 35,692,729 32,605 608,017 809,900 2,943,344 371,838 3,442,875 241,308 24,661,438 5,268,117 1,343,677 2,871,086 42,594,205 (2,753,333) (3,498,304) 36,342,568 Total of impaired financing and investing receivables By Segment : Retail banking Corporate banking LES ( Analysis by economic activity Agriculture and related activities Manufacturing Construction Trade Transportation and communication Services Sovereign Personal Real estates Financial institutions Others Total Less: Deferred income Less: Allowances for impairment Net Carrying Value 10
13. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 6 7 FINANCING AND INVESTING RECEIVABLES (continued) (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 Movements in allowances for specific impairment: Balance as at 1 January Allowances for impairment made during the period / year Recoveries / write backs during the period / year Transfer from Dubai Bank PJSC Write offs during the period Balance at the end of the period / year 2,653,028 262,570 (100,732) (205,124) 2,609,742 2,242,788 1,808,826 (591,073) 26,116 (833,629) 2,653,028 Movements in allowances for collective impairment: Balance as at 1 January (Write back) / Allowances for impairment made during the period / year Balance at the end of the period / year Total 845,276 (29,493) 815,783 3,425,525 693,339 151,937 845,276 3,498,304 INVESTMENT PROPERTIES Cost Balance as at 1 January 2017 (audited) Additions Balance at 31 March 2017 (unaudited) Land AED '000 Building AED '000 Work-inprogress AED '000 Total AED '000 375,895 133 376,028 333,719 333,719 8,230 8,230 717,844 133 717,977 - (72,218) (3,005) (75,223) - (72,218) (3,005) (75,223) (27,849) (27,849) (142,947) (142,947) - (170,796) (170,796) (27,849) (218,170) - (246,019) 348,179 115,549 8,230 471,958 Accumulated depreciation Balance as at 1 January 2017 (audited) Charge during the period Total accumulated depreciation (unaudited) Accumulated impairment Balance as at 1 January 2017 (audited) Total accumulated impairment Total accumulated depreciation and impairment as at 31 March 2017 (unaudited) Net Book Value at 31 March 2017 (unaudited) 11
14. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 7 INVESTMENT PROPERTIES (continued) Land AED '000 Building AED '000 Work-inprogress AED '000 (Audited) Total AED '000 Cost Balance as at 1 January 2016 Additions Disposals Balance at 31 December 2016 375,513 382 375,895 800,099 (466,380) 333,719 8,230 8,230 1,183,842 382 (466,380) 717,844 Accumulated depreciation Balance as at 1 January 2016 Charge during the year Relating to disposals Total accumulated depreciation - (172,425) (23,415) 123,622 (72,218) - (172,425) (23,415) 123,622 (72,218) (27,849) (27,849) (177,632) 34,685 (142,947) - (205,481) 34,685 (170,796) (27,849) 348,046 (215,165) 118,554 8,230 (243,014) 474,830 Accumulated impairment Balance as at 1 January 2016 Reversal of impairment Total accumulated impairment Total accumulated depreciation and impairment as at 31 December 2016 Net Book Value at 31 December 2016 All investment properties are located within the United Arab Emirates. The fair value of investment properties as at 31 March 2017 is not materially different from their carrying value. 8 CUSTOMERS' ACCOUNTS Current accounts Saving accounts Investment accounts Wakala accounts Margins Customers’ accounts are concentrated as follows Resident customer accounts Non-resident customer accounts (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 17,363,493 10,318,170 4,122,194 8,685,980 435,583 40,925,420 16,803,227 10,179,886 4,252,457 9,441,448 453,989 41,131,007 40,379,125 546,295 40,925,420 40,703,736 427,271 41,131,007 33,505,870 7,419,550 40,925,420 34,287,138 6,843,869 41,131,007 By Segment: Retail banking Corporate banking 12
15. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 9 DUE TO BANKS Current Accounts Overdrafts Interbank obligations – Other banks Wakala Deposits from Group Holding Company Other balances from Group Holding Company & its subsidiaries Due to banks are concentrated as follows: Due to local banks Due to foreign banks (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 13,999 1,110 764,011 1,826,881 1,763,918 4,369,919 14,022 1,605 183,625 151,959 1,456,707 1,807,918 4,097,009 272,910 4,369,919 1,622,688 185,230 1,807,918 10 SUKUK FINANCING INSTRUMENTS The Group, through a Shari’a compliant sukuk financing arrangement raised tranches of US Dollar denominated medium term financing. Following are the details of all the sukuk financing arrangement in issue: Amount (USD) 500,000,000 750,000,000 250,000,000 Listing Profit rate (%) London Stock Exchange Irish Stock Exchange & Nasdaq Irish Stock Exchange & Nasdaq 4.140 3.542 3.542 Payment basis Maturity Semi annual Semi annual Semi annual January 2018 May 2021 May 2021 The terms of the arrangement include transfer of certain identified assets (the “Co-Owned Assets”) of the Bank to a Sukuk company, EIB Sukuk Company Limited (the “Issuer”), a special purpose entity formed for the issuance of the sukuks. In substance, the co-owned assets remain in control of the Bank. Accordingly these assets continue to be recognized by the Bank. In case of any default, the Group Holding Company has provided an undertaking to make good all losses to the sukuk holders. The assets are in the control of the Bank and shall continue to be serviced by the Bank. The Issuer will pay the semi-annual distribution amount from returns received in respect of the Co-Owned Assets. Such proceeds are expected to be sufficient to cover the semi-annual distribution amount payable to the sukuk holders on the semi-annual distribution dates. Upon maturity of the sukuk, the Bank has undertaken to repurchase the assets at the exercise price. Following is the movement in Sukuk payable: Balance as at 1 January New issue Sukuks matured Premium amortization Balance at end of period/ year 13 (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 7,368,138 (1,836,250) (1,310) 5,530,578 3,672,500 3,696,948 (1,310) 7,368,138
16. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 10 SUKUK FINANCING INSTRUMENTS (continued) As at 31 March 2017, the outstanding Sukuk payable is falling due as below: 2017 2018 2021 (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 1,836,250 3,694,328 5,530,578 1,836,250 1,836,250 3,695,638 7,368,138 During the period, a tranche of USD 500,000,000 (AED 1,826,250,000), listed at the London Stock Exchange, bearing a profit rate of 4.718 % matured and repaid in full. 11 SHARE CAPITAL (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 10,000,000 10,000,000 5,430,422 5,430,422 Authorized Share Capital 10,000,000,000 (31 December 2016: 10,000,000,000) ordinary shares of AED 1 each (31 December 2016: AED 1 each) Issued and fully paid up capital 5,430,422,000 (31 December 2016: 5,430,422,000) ordinary shares of AED 1 each (31 December 2016: AED 1 each) 12 ASSET SECURITISATION On 15 May 2014, EI Funding Limited (the “SPE”) was incorporated under Companies Law of Cayman Islands as a Special Purpose Entity. The principal activities of the company are to purchase portfolio of assets through issuance of notes. The securitization will result in a certificate pool that will be listed on the NASDAQ clearing system (off market) for private-purpose, over-the-counter dealing. The underlying Sharia structure has been approved by the Bank’s Sharia Supervisory Board. The Group has transferred part of its investment portfolio to EI Funding Limited (incorporated under Cayman Islands laws). However, the Group retains control over the transferred assets and hence the Group continues to recognize these assets as financing and the investment assets. 13 ALLOWANCE FOR IMPAIRMENT, NET OF RECOVERIES (Unaudited) For the three months period ended 31 March 2017 2016 AED '000 AED '000 Net impairment of financing and investing receivables (note 6) Net impairment of investments (note 5) Recoveries on bad debts 14 (132,345) (18,900) 16,360 (134,885) (282,402) (56,740) 75,764 (263,378)
17. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 14 EARNINGS PER SHARE The calculation of earnings per share is based on profit of AED 221 ,112,000 (31 March 2016: profit of AED 45,193,000), for the period divided by the weighted average of the number of shares outstanding during the period: 5,430,422,000 shares (31 March 2016: 3,930,422,000 shares). Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all diluted potential ordinary shares, if any. The diluted and basic earnings per share were the same for the three months period ended 31 March 2017. 15 CASH AND CASH EQUIVALENTS Cash in hand (note 3) Current account with U.A.E Central Bank (note 3) Murabaha with U.A.E Central Bank Due from banks Due to banks (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 307,265 2,770,673 6,547,018 (4,186,294) 5,438,662 263,571 1,375,258 2,750,143 4,004,152 (1,570,220) 6,822,904 16 RELATED PARTY TRANSACTIONS The ultimate parent of the Group is Investment Corporation of Dubai (55.6%), a company in which the Government of Dubai is the major shareholder. Customer accounts and financing to Government related entities other than those that have been individually disclosed amounts to 6.33% and 2.26% (31 December 2016: 5.77% and 2.00%) of the total customers’ accounts and financing receivables of the Group, respectively. These entities are independently run business entities, and all the financial dealings with the Group are on normal commercial terms. The Group has also entered into transactions with certain other related parties who are non-government related entities. Such transactions were also made on substantially the same terms, including profit rates and collaterals, as those prevailing at the same time for comparable transactions with third parties and do not involve more than a normal amount of risk. Related party transactions are as follows: (Unaudited) For the three months period ended 31 March 2017 2016 AED '000 AED '000 Group condensed consolidated interim statement of income Income from Group Holding Company Key management personnel compensations Key management personnel compensations - retirements benefits 15 28,993 (7,567) (30) 45,299 (13,813) (119)
18. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 16 RELATED PARTY TRANSACTIONS (continued) Balances with related parties are as follows: Group condensed consolidated interim statement of financial position Due from Group Holding Company & subsidiaries Due to Group Holding Company & subsidiaries Financing receivables - Ultimate Parent Company Investment in Ultimate Parent Company Deposits from Ultimate Parent Company Due from Dubai Bank PJSC (note 4) Financing receivables - Directors & affiliates Financing receivables - Key management personnel & affiliates Current and Investment accounts - Directors Current and Investment accounts - Key management personnel & affiliates Investment in Government of Dubai (Unaudited) 31 March 2017 AED '000 (Audited) 31 December 2016 AED '000 2,648,901 (3,590,799) 183,650 61,066 839,368 1,190,104 29,220 (990) 3,751,041 (1,608,666) 183,650 15,191 835,628 1,179,398 149 41,260 (760) (20,217) - (38,300) 207,873 Key management personnel are those persons, including non-executive directors, having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly. No impairment losses have been recorded against balances outstanding during the period with key management personnel and their immediate relations at the period end. 17 FINANCIAL ASSETS AND LIABILITIES Fair value of assets and liabilities The table below analyses assets and liabilities measured at fair value on a recurring basis. The different levels in the fair value hierarchy have been defined as follows:    Level 1: quoted prices (unadjusted) in principal markets for identified assets or liabilities. Level 2: valuation using inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices). Level 3: valuation using inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). 31 March 2017 INVESTMENT SECURITIES Available-for-sale: Investment in funds Investment in equities Debt securities TOTAL Quoted prices in active markets for identified assets Level 1 AED '000 Significant other observable inputs Level 2 AED '000 Significant unobservable inputs Level 3 AED '000 (Unaudited) Total AED '000 5,351 800,908 806,259 - 208,105 374,957 583,062 208,105 380,308 800,908 1,389,321 16
19. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 17 FINANCIAL ASSETS AND LIABILITIES (continued) 31 December 2016 INVESTMENT SECURITIES Available-for-sale: Investment in funds Investment in equities Debt securities TOTAL Quoted prices in active markets for identified assets Level 1 AED '000 Significant other observable inputs Level 2 AED '000 Significant unobservable inputs Level 3 AED '000 (Audited) Total AED '000 54,234 718,693 772,927 - 207,993 393,858 601,851 207,993 448,092 718,693 1,374,778 Reconciliation of financial assets, classified under level 3 (Unaudited) Available for sale financial assets AED '000 601,851 (18,789) 583,062 Balance as at 1 January 2017 Settlements Balance as at 31 March 2017 (Audited) 763,482 (161,631) 601,851 Balance as at 1 January 2016 Settlements Balance as at 31 December 2016 The fair value of financial instruments classified as level 3 are, in certain circumstances, measured using valuation techniques that incorporate assumptions that are not evidenced by the prices from observable current market transactions in the same instrument and are not based on observable market data. The Group employs valuation techniques, depending on the instrument type and available market data. For example, in the absence of active market, an investment’s fair value is estimated on the basis of an analysis of the investee’s financial position and results, risk profile and other factors. Favorable and unfavorable changes in the value of financial instruments are determined on the basis of changes in the value of the instruments as a result of varying the levels of the unobservable parameters, quantification of which is judgmental. During the three months period ended 31 March 2017, no transfers were made between Level 1 and Level 2. 17
20. EMIRATES ISLAMIC BANK PJSC NOTES TO THE GROUP CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2017 18 OPERATING SEGMENTS The Group ’s activities comprise the following main business segments: Corporate and Investments Within this business segment, the Group provides to corporate customers a range of products and services and accepts their deposits. This segment invests in investment securities, sukuks, funds and Real Estate sector. Retail Retail segment provides a wide range of products and services to individuals and small and medium enterprises and accepts their deposits. Treasury This segment mainly includes deposits and placements on Murabaha and Wakala basis with banks including Group Holding Company and the Central Bank of UAE. 18