Qatar First Bank Condensed Consolidated Interim Financial Statements 31 March 2017

Transcription

1. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS QATAR FIRST BANK L .L.C (Public) 31 March 2017
2. QATAR FIRST BANK L .L.C (Public) CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 31 March 2017 CONTENTS INDEPENDENT AUDITOR’S REVIEW REPORT ..................................................................................................... 1-2 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS: Condensed consolidated statement of financial position .......................................................................................... 3 Condensed consolidated income statement ....................................................................................................................... 4 Condensed consolidated statement of changes in equity.......................................................................................... 5 Condensed consolidated statement of cash flows .......................................................................................................... 6 Notes to the condensed consolidated interim financial statements: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Reporting Entity ...................................................................................................................................................................... 7 Basis Of Preparation ............................................................................................................................................................. 8 Significant Accounting Policies .................................................................................................................................... 8 Investments Carried At Amortised Cost .................................................................................................................9 Financing Assets ....................................................................................................................................................................9 Equity Investments ...............................................................................................................................................................9 Assets Classified As Held-For-Sale ........................................................................................................................... 11 Financing Liabilities ........................................................................................................................................................... 11 Equity Of Unrestricted Investment Account Holders ................................................................................... 11 Share Capital ........................................................................................................................................................................... 11 Revenue And Expenses From Non-Banking Activities................................................................................ 12 Basic / Diluted Loss Per Share ..................................................................................................................................... 12 Contingent Liabilities ........................................................................................................................................................ 12 Commitments .........................................................................................................................................................................13 Related Parties Transactions And Balances ........................................................................................................13 Financial Risk Management ..........................................................................................................................................14 Fair Value Of Financial Instruments .......................................................................................................................14 Segment Information ......................................................................................................................................................... 17
6. QATAR FIRST BANK L .L.C (Public) CONDENSED CONSOLIDATED INCOME STATEMENT For the three-month period ended 31 March 2017 (expressed in QAR’000) Notes CONTINUING OPERATIONS INCOME Revenue from non-banking activities Gain / (loss) on re-measurement of investments at fair value through income statement Dividend income Profit on investments carried at amortised cost 11 89,729 108,044 6.2 1,588 4,871 (4,793) 4,285 7,591 6,284 Loss on disposal of investments carried at amortised cost - (437) Gain on disposal of equity investments Income from financing assets Income from placements with financial institutions Other income Total Income Before Return To Unrestricted Investment Account Holders Return to investment account holders TOTAL INCOME EXPENSES Expenses from non-banking activities Staff costs Other operating expenses Financing costs Depreciation and amortisation TOTAL EXPENSES Provision for impairment on financing assets For the three-month period ended 31 March 31 March 2017 2016 (Unreviewed) (Reviewed) 1,749 21,047 14,776 8,779 8,342 6,014 16,095 143,259 (21,774) 121,485 150,705 (18,522) 132,183 11 (89,343) (17,576) (13,372) (5,740) (3,122) (129,153) (106,558) (19,932) (15,738) (2,729) (3,309) (148,266) 5 (2,080) (3,223) (9,748) (19,306) NET LOSS BEFORE INCOME TAX Income tax expense - - NET LOSS FOR THE PERIOD Attributable to: Equity holders of the Bank Non-controlling interest Basic/diluted loss per share –QAR 12 (9,748) (19,306) (9,561) (187) (9,748) (19,598) 292 (19,306) (0.05) (0.10) The attached notes 1 to 18 form an integral part of these condensed consolidated interim financial statements. 4
7. QATAR FIRST BANK L .L.C (Public) CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the three-month period ended 31 March 2017 (expressed in QAR’000) Fair value reserves Share capital Investment fair value reserve (27,256) 6,195 - Property fair value reserve (Accumulated deficit)/ Retained earnings Total equity attributable to equity holders of the Bank Noncontrolling interests Total equity 5,013 - 68,319 (19,598) 2,046,076 6,195 (19,598) 53,968 292 2,100,044 6,195 (19,306) (877) 4,956 4,079 Balance at 1 January 2016 (Audited) Fair value adjustment (Unreviewed) Net loss for the period (Unreviewed) Increase in non-controlling interests due to: - Subsidiary's management remuneration 2,000,000 Balance at 31 March 2016 (Unreviewed) 2,000,000 (21,061) 4,136 48,721 2,031,796 59,216 2,091,012 Balance at 1 January 2017 (Audited) Fair value adjustment (Reviewed) Net loss for the period (Reviewed) 2,000,000 - (5,079) 14,991 - 4,518 - (200,754) (9,561) 1,798,685 14,991 (9,561) 76,366 (187) 1,875,051 14,991 (9,748) Balance at 31 March 2017 (Reviewed) 2,000,000 9,912 4,518 (210,315) 1,804,115 76,179 - - (877) - The attached notes 1 to 18 form an integral part of these condensed consolidated interim financial statements. 5 1,880,294
8. QATAR FIRST BANK L .L.C (Public) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the three-month period ended 31 March 2017 (expressed in QAR’000) For the three-month period ended 31March 31March 2016 2017 (Unreviewed) Notes (Reviewed) OPERATING ACTIVITIES Net loss for the period Adjustments for non-cash items in net loss Depreciation and amortisation Subsidiary's management remuneration Unrealised gains on equity investments Provision for impairment of financing assets Other provisions, net (9,748) (19,306) 8,439 (1,588) 2,080 4,592 3,775 8,201 1,895 4,793 3,223 (1,194) 200,000 103,313 (96,236) (41,032) (6,034) 60,188 2,915 16,462 (769) (37,276) (1,457) 203,849 1,252 (29,270) (714) (3,960) (91) (2,808) (10,838) 27,207 2,280 (18,136) (11,707) (11,707) (12,500) (12,500) FINANCING ACTIVITIES Net change in financing liabilities Net change in equity of investment account holders Net cash used in financing activities (20,713) (109,523) (130,236) 47,804 (270,820) (223,016) Net increase / (decrease) 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 61,906 1,113,796 1,175,702 (253,652) 1,603,963 1,350,311 6.2 5 Changes in: Due from banks Investments carried at amortised cost Financing assets Accounts receivable Inventories Equity investments Investments in real estate Assets of disposal group classified as held-for-sale Other assets Customers' balances Other liabilities Net cash from / (used in) operating activities INVESTING ACTIVITIES Purchase of fixed and intangible assets Net cash used in investing activities The attached notes 1 to 18 form an integral part of these condensed consolidated interim financial statements. 6
9. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 1. REPORTING ENTITY Qatar First Bank L.L.C (Public) (“the Bank” or “the Parent”) is an Islamic bank, which was established in the State of Qatar as a limited liability company under license No.00091, dated 4 September 2008, from the Qatar Financial Centre Authority. The Bank is authorised to conduct the following regulated activities by the Qatar Financial Centre Regulatory Authority (the “QFCRA”): • Deposit taking; • Providing credit facilities; • Dealing in investments; • Arranging deals in investments; • Arranging credit facilities; • Providing custody services; • Arranging the provision of custody services; • Managing investments; • Advising on investments; and • Operating a collective investment fund. All the Bank’s activities are regulated by the QFCRA and are conducted in accordance with Islamic Shari’a principles, as determined by the Shari’a Supervisory Board of the Bank and in accordance with the provisions of its Articles of Association. The Bank operates through its head office located on Suhaim bin Hamad Street, Doha, State of Qatar. The Bank’s issued shares are listed for trading on the Qatar Exchange effective from 27 April 2016 (ticker: “QFBQ”). The condensed consolidated interim financial statements of the Bank for the three-month period ended 31 March 2017 comprise the Bank and its subsidiaries (together referred to as “the Group” and individually as “Group entities”). The Parent Company / Ultimate Controlling Party of the Group is Qatar First Bank L.L.C (Public). The Bank had the following subsidiaries as at 31 March 2017 and 31 December 2016: Subsidiaries Activity Effective ownership as at 31 March 31 December 2016 2017 Year of incorporation Country Future Card Industries LLC Manufacturing 71.3% 71.3% 2012 UAE Al Wasita Emirates for Catering Services LLC Catering 81.9% 85.0% 2008 UAE Isnad Catering Services WLL Catering 75.0% 75.0% 2012 Qatar 100.0% 100.0% 2015 Cayman Islands 100.0% - 2017 UAE QFB Money Market Fund 1 Ltd. QFB Capital (DIFC) Limited Money market fund Managing a collective investment fund 7
10. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 2. BASIS OF PREPARATION The condensed consolidated interim financial statements of the Group have been prepared in accordance with Financial Accounting Standards (“FAS”) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (“AAOIFI”). In line with the requirements of AAOIFI, for matters that are not covered by FAS, the Group uses the guidance from the relevant International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”). Accordingly, the condensed consolidated interim financial statements have been prepared in accordance with the guidance provided by International Accounting Standard 34 – ‘Interim Financial Reporting’. The condensed consolidated interim financial statements do not contain all information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Group’s annual consolidated financial statements as at 31 December 2016. In addition, results for the three-month period ended 31 March 2017 are not necessarily indicative of results that may be expected for the financial year ending 31 December 2017. The condensed consolidated interim financial statements have been prepared under the historical cost convention except for valuation of equity investments, investments in real estate and Shariacompliant-risk management instruments which are carried at fair value. The condensed consolidated interim financial statements are presented in Qatari Riyals (“QAR”), which is the Bank’s functional and presentational currency, and all values are rounded to the nearest QAR thousand except when otherwise indicated. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Judgement and estimates The preparation of the condensed consolidated interim financial statements in conformity with FAS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty are consistent with those applied to the annual consolidated financial statements as at 31 December 2016. 3. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of the condensed consolidated interim financial statements are consistent with those used in the preparation of the consolidated financial statements for the year ended 31 December 2016. 3.1 New standards, amendments and interpretations There were no new accounting standards, amendments and interpretations that (i) are issued and effective from 1 January 2017; (ii) are issued but not yet effective. 8
11. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 4. INVESTMENTS CARRIED AT AMORTISED COST 31 March 2017 (Reviewed) Investments in sukuk Unamortised premiums and discounts, net 31 December 2016 (Audited) 887,905 5,312 893,217 784,893 5,011 789,904 As at 31 March 2017, the fair value of the Group’s investments in sukuk portfolio amounted to QAR 794 million (31 December 2016: QAR 897 million). As at 31 March 2017, investments in sukuk with a carrying amount of QAR 717 million were pledged against certain murabaha financing liabilities (31 December 2016: QAR 718 million). 5. FINANCING ASSETS 31 March 2017 (Reviewed) 31 December 2016 (Audited) Murabaha financing Ijarah receivable Others 1,758,322 58,266 14,321 1,642,904 64,721 12,742 Total financing assets 1,830,909 1,720,367 Deferred profit Provision for impairment on financing assets (233,173) (30,709) (218,867) (28,629) Net financing assets 1,567,027 1,472,871 Movements in the provision for impairment on financing assets are as follows: At the beginning of the period/year Provision during the period / year, net of recoveries At the end of the period / year 31 December 2016 Collective provision 31 March 2017 Collective provision Total 21,723 6,906 28,629 3,313 - 3,313 1,451 629 2,080 18,410 6,906 25,316 23,174 7,535 30,709 21,723 6,906 28,629 Specific provision Specific provision Total Provision for impairment for financing assets, net of recoveries for the three-month period ended 31 March 2017 was QAR 2.1 million (for the three-month period ended 31 March 2016: QAR 3.2 million). 6. EQUITY INVESTMENTS Notes 6.1 6.2 Investments at fair value through equity Investments at fair value through income statement 9 31 March 2017 (Reviewed) 162,571 969,980 1,132,551 31 December 2016 (Audited) 147,580 1,028,580 1,176,160
12. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 6 EQUITY INVESTMENTS (Continued) As at 31 March 2017, equity investments with a carrying amount of QAR 284 million were pledged against certain murabaha financing liabilities (31 December 2016: QAR 421 million). 6.1. Investments at fair value through equity Investments at fair value through equity comprise equity investments as follows: 31 March 2017 (Reviewed) Quoted Unquoted 31 December 2016 (Audited) 121,292 26,288 147,580 136,283 26,288 162,571 Unquoted equity securities of QAR 26.3 million as at 31 March 2017 (31 December 2016: QAR 26.3 million) are carried at cost less impairment in the absence of reliable measure of fair value. 6.2. Investments at fair value through income statement Investments at fair value through income statement comprise of equity investments as follows: 31 March 2017 (Reviewed) Investment type Venture capital investments Other investments at fair value through income statement 31 December 2016 (Audited) 762,410 207,570 969,980 760,458 268,122 1,028,580 Movements in equity investments are as follows: Investments at fair value through equity (Reviewed) At the beginning of period/year Additions Disposal Fair value adjustments At the end of the period/year 147,580 - 31 March 2017 Investments at fair value through income statement Total (Reviewed) (Reviewed) 1,028,580 364 (60,552) 1,176,160 364 (60,552) Investments at fair value through equity 31 December 2016 Investments at fair value through income statement (Audited) (Audited) (Audited) 125,403 - 1,283,546 11,666 (90,136) 1,408,949 11,666 (90,136) (154,319) 14,991 1,588 16,579 22,177 (176,496) 162,571 969,980 1,132,551 147,580 1,028,580 10 Total 1,176,160
13. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 6 EQUITY INVESTMENTS (Continued) Gain on remeasurement of investments at fair value through income statement for the threemonth period ended 31 March 2017 was QAR 1.6 million (for the three-month period ended 31 March 2016: loss of QAR 4.8 million). 7. ASSETS CLASSIFIED AS HELD-FOR-SALE Subsequent to year-end 31 December 2016, the Bank signed a sale purchase agreement to sell one of its investments for a series of installments, accordingly the Bank had classified and presented the investment of QAR 86.3 million to assets held-for-sale in the consolidated financial statements for the year ended 31 December 2016. During the period, as part of the conditions precedent to the sale purchase agreement, the Bank partially exited QAR 16.5 million of the carrying amount. 8. FINANCING LIABILITIES 31 March 2017 (Reviewed) Accepted wakala deposits Murabaha financing Ijara financing Mudaraba financing 9. 36,408 1,005,799 24,178 13,130 1,079,515 36,427 1,046,337 17,464 1,100,228 EQUITY OF UNRESTRICTED INVESTMENT ACCOUNT HOLDERS 31 March 2017 (Reviewed) Term accounts Profit payable to equity of investment account holders 10. 31 December 2016 (Audited) 2,574,691 13,456 2,588,147 31 December 2016 (Audited) 2,681,783 15,887 2,697,670 SHARE CAPITAL 31 March 2017 (Reviewed) 31 December 2016 (Audited) Authorized 250,000,000 ordinary shares (2016: 250,000,000 ordinary shares) of QAR 10 each 2,500,000 2,500,000 Issued and paid 200,000,000 ordinary shares (2016: 200,000,000 ordinary shares) of QAR 10 each 2,000,000 2,000,000 11
14. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 11. REVENUE AND EXPENSES FROM NON-BANKING ACTIVITIES Sales Other income Revenue from non-banking activities Cost of sales Other expenses Finance costs Expenses from non-banking activities Net income from non-banking activities 12. 31 March 2017 (Reviewed) 89,101 628 89,729 31 March 2016 (Unreviewed) 108,018 26 108,044 (67,576) (15,825) (5,942) (89,343) 386 (83,481) (17,934) (5,143) (106,558) 1,486 BASIC / DILUTED LOSS PER SHARE The calculation of basic loss per share is based on the net loss attributable to the Bank’s shareholders and the weighted average number of shares outstanding during the period. 31 March 2017 (Reviewed) 31 March 2016 (Unreviewed) (9,561) 200,000 (19,598) 200,000 (0.05) (0.10) Basic loss per share Net loss attributable to the equity holders of the Bank Total weighted average number of shares Basic loss per share (QAR) Since there is no significant dilutive impact, basic loss per share equal the dilutive earning per share. 13. CONTINGENT LIABILITIES The Group had the following contingent liabilities at the period / year end: 31 March 2017 (Reviewed) Letters of credit Letters of guarantee Unutilised credit facilities 72,629 21,683 94,312 31 December 2016 (Audited) 913 74,654 133,341 208,908 Contingent liabilities related to Sharia-compliant-risk-management instruments, representing notional amounts, amounted to QAR 1.959 million (31 December 2016: QAR 2,120 million). 12
15. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 14. COMMITMENTS 31 March 2017 (Reviewed) Commitment for operating lease Later than one year No later than one year Investment related commitment Commitment for operating and capital expenditure 15. 31 December 2016 (Audited) 59,435 26,590 86,025 71,797 27,522 99,319 22,644 706 109,375 22,306 729 122,354 RELATED PARTIES TRANSACTIONS AND BALANCES Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties include the significant owners and entities over which the Group and the owners exercise significant influence, directors and senior management personnel of the Group, close family members, entities owned or controlled by them, associates and affiliated companies. Balances and transactions in respect of related parties included in the financial statements are as follows: Notes 31 March 2017 (Reviewed) Affiliated Associates entities/ persons Total a) Condensed consolidated statement of financial position Financing assets Other assets 5 5,797 8,426 119,542 - 125,339 8,426 66 - 1,685 4,871 1,751 4,871 b) Condensed consolidated income statement Income from financing assets Dividend income The balances of related parties as at 31 December 2016 are as follows: Notes 31 December 2016 (Audited) Affiliated Associates entities/ persons Total a) Condensed consolidated statement of financial position Financing assets Other assets Other liabilities 5 13 5,587 9,846 65 114,460 - 120,047 9,846 65
16. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 15. RELATED PARTIES TRANSACTIONS AND BALANCES (Continued) Transactions with related parties for the corresponding period of three-month period ended 31 March 2016 are as follows: 31 March 2016 (unreviewed) Affiliated Associates entities/ persons Total b) Condensed consolidated income statement Income from financing assets Dividend income 15 - 2,929 4,285 2,944 4,285 31 March 2017 (Reviewed) 31 March 2016 (Unreviewed) Key management compensation is presented below: c)  Compensation of key management personnel Senior management personnel Directors’ remuneration Shari’a Supervisory Board remuneration 16. 7,005 148 7,153 7,116 1,143 120 8,379 FINANCIAL RISK MANAGEMENT The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value profit rate risk, cash flow profit rate risk and price risk), credit risk and liquidity risk. The condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements; they should be read in conjunction with the Group’s annual consolidated financial statements as at 31 December 2016. There have been no significant changes. 17. FAIR VALUE OF FINANCIAL INSTRUMENTS The Group's financial instruments are accounted for under the historical cost method with the exception of equity investments. By contrast, the fair value represents the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Differences therefore can arise between book values under the historical cost method and fair value estimates. Underlying the definition of fair value is the presumption that the Group is a going concern without any intention or requirement to curtail materially the scale of its operation or to undertake a transaction on adverse terms. Generally accepted methods of determining fair value include reference to quoted prices and the use of valuation techniques such as discounted cash flow analysis. 14
17. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued) 17. Set out below is a comparison of the carrying amounts and fair values of financial instruments: Notes Financial Assets: Cash and cash equivalents Due from banks Investments carried at amortised cost Financing assets Accounts receivable Equity investments Assets of disposal group classified as held-for-sale Other assets 4 5 6 Financial Liabilities: Financing liabilities Customers' balances Other liabilities Equity of unrestricted investment account holders 8 9 Notes Financial Assets: Cash and cash equivalents Due from banks Investments carried at amortised cost Financing assets Accounts receivable Equity investments Assets of disposal group classified as held-for-sale Other assets 4 5 6 Financial Liabilities: Financing liabilities Customers' balances Other liabilities Equity of unrestricted investment account holders 17.1. 8 9 31 March 2017 (Reviewed) Carrying Amount Fair Value 1,175,702 155,000 789,904 1,567,027 290,723 1,132,551 69,791 154,081 5,334,779 1,175,702 155,000 793,948 1,567,027 290,723 1,132,551 69,791 154,081 5,338,823 1,079,515 71,120 194,997 2,588,147 3,933,779 1,079,515 71,120 194,997 2,588,147 3,933,779 31 December 2016 (Audited) Carrying Amount Fair Value 1,113,796 355,000 893,217 1,472,871 249,691 1,176,160 86,253 82,132 5,429,120 1,113,796 355,000 897,202 1,472,871 249,691 1,176,160 86,253 82,132 5,433,105 1,100,228 108,396 185,693 2,697,670 4,091,987 1,100,228 108,396 185,693 2,697,670 4,091,987 Fair value hierarchy Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and 15
18. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 17. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued) 17.1 Fair value hierarchy (Continued) (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgment in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. Note Level 1 Level 2 Level 3 Total 136,283 - - 26,288 969,980 162,571 969,980 14,991 - - 14,991 - - 1,588 1,588 Level 2 Level 3 Total 31 March 2017 (Reviewed) Equity investments - at fair value through equity - at fair value through income statement 6.1 6.2 Net gains and losses included in the condensed consolidated statement of changes in equity Net gains and losses, recognized through condensed consolidated income statement Note Level 1 6.1 6.2 121,292 - - 26,288 1,028,580 147,580 1,028,580 6,195 - - 6,195 - - 31 December 2016 (Audited) Equity investments - at fair value through equity - at fair value through income statement 31 March 2016 (Unreviewed) Net gains and losses included in the condensed consolidated statement of changes in equity Net gains and losses, recognized through condensed consolidated income statement (4,793) (4,793) Sharia-compliant-risk management instruments for which fair value amounts to QAR 3.2 million (31 December 2016: QAR 5.2 million) is derived using Level 2 fair value hierarchy. The valuation techniques and key assumptions have remained consistent with those disclosed in the annual consolidated financial statements as at and for the year ended 31 December 2016. The fair values of financial assets and financial liabilities carried at amortized cost are equal to the carrying value, hence, not included in the fair value hierarchy table. However, investments carried at amortised cost for which the fair value amounts to QAR 794 million (31 December 2016: QAR 897 million) is derived using Level 1 fair value hierarchy. 16
19. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 18. SEGMENT INFORMATION For management purposes, the Group has three reportable segments, as described below: Alternative Investments The Group's alternative investments business segment includes direct investment in the venture capital business and real estate asset classes. Alternative investments business is primarily responsible to acquire large or significant stakes, with board representation, in well managed companies and assets that have strong, established market positions and the potential to develop and expand. The team works as partners with the management of investee companies to unlock value through enhancing operational and financial performance in order to maximize returns. This segment seeks investments opportunities in growth sectors within the GCC and MENA region, as well as Turkey and United Kingdom, but remains opportunistic to attractive investment propositions outside of the geographies identified. Private Bank The Group’s private bank business segment includes private banking, corporate & institutional banking and treasury & investment management services. The Private banking department targets qualified High Net Worth clients with Sharia compliant up-market products and services that address personal, business and wealth requirements. The services offered under the private banking department includes advisory, deposit accounts, brokerage, funds and investments, treasury Forex products, plain vanilla & specialized financing, credit card and Elite services. The corporate & institutional banking department offers deposits accounts and plain vanilla & specialized financing solutions for corporates in Qatar, the GCC and the broader region for sectors and applications currently underserved by regional banks. The treasury department is offering short term liquid investments and FX products to banking clients, deploying the bank’s liquidity as well as leading the product development and idea conceptualization function. Other Unallocated assets, liabilities and revenues are related to some central management and support functions of the Group. Information regarding the results, assets and liabilities of each reportable segment is included below. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the management. Segment assets and liabilities The Group does not monitor segments on the basis of segment assets and liabilities and do not possess detailed information thereof. Consequently, disclosure of segment assets and liabilities are not presented in these condensed consolidated interim financial statements. 17
20. QATAR FIRST BANK L .L.C (Public) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As at and for the three-month period ended 31 March 2017 (expressed in QAR’000) 18. SEGMENT INFORMATION (Continued) Below is the information about operating segments: For the period ended 31 March 2017 (Reviewed) INCOME Revenue from non-banking activities Gain on re-measurement of investments at fair value through income statement Dividend income Profit on investments carried at amortised cost Loss on disposal of investments carried at amortised cost Gain on disposal of equity investments Income from financing assets Income from placements with financial institutions Other income Total Income Before Return To Investment Account Holders Return to unrestricted investment account holders TOTAL INCOME EXPENSES Expenses from non-banking activities Staff costs Other operating expenses Financing costs Depreciation and amortization TOTAL EXPENSES Provision for impairment on financing assets NET PROFIT/(LOSS) BEFORE INCOME TAX Income tax expense NET PROFIT / (LOSS) FOR THE PERIOD Alternative Investments Private Bank Other Total 89,729 - - 89,729 1,588 4,871 - - 1,588 4,871 - 7,591 - 7,591 1,749 1,685 (437) 19,362 - (437) 1,749 21,047 1,241 8,779 4,760 2,341 8,779 8,342 100,863 40,055 2,341 143,259 - (21,774) - (21,774) 100,863 18,281 2,341 121,485 (89,343) (3,666) (3,448) (2,363) (83) (98,903) (4,485) (3,117) (3,377) (1,634) (12,613) (9,425) (6,807) (1,405) (17,637) (89,343) (17,576) (13,372) (5,740) (3,122) (129,153) (181) (1,899) 18 - (2,080) 1,779 - 3,769 - (15,296) - (9,748) - 1,779 3,769 (15,296) (9,748)