Overview - :: Gulf One Bank

1 Annual Report 2012. Overview Introduction 1. Vision, Mission and Values 2. Message from the Board of Directors 3. Summary of Financial Performance 5. Global and Regional Economic Performance and Prospects 6. Board of Directors and Board Committees 11. Business Lines 16. Executive Management 18. Corporate Governance 20. Consolidated Financial Statements Independent Auditors' Report to the Shareholders 34. Consolidated Statement of Financial Position 35. Consolidated Statement of Comprehensive Income 36. Consolidated Statement of Changes in Equity 37. Consolidated Statement of Cash Flows 38. Notes to the Consolidated Financial Statements 39. Risk Report 2012 Plus Basel II Including Pillar 3 Disclosures 64.

2 INTRODUCTION. Gulf One Investment Bank (c) , (Gulf One), is a leading knowledge based investment bank focused on providing professional and high-quality infrastructure related investments and opportunities for the MENA region. Opportunities are identified and developed through an independent approach based on knowledge, expert insight and innovative thought, which produces secured, ethical and profitable results for all stakeholders and brings meaningful contributions to society. Gulf One was founded in Manama, Kingdom of Bahrain in 2006 by Dr. Nahed M. Taher, Chief Executive Officer (CEO), and Mr. Ziyad F. Omar, Chief Invest- ment Officer (CIO). Gulf One's primary focus is on vital economic sectors including water, power, mining, transport and down-stream petrochemi- cals.

3 Guided by Islamic principles, Gulf One's products and services offer unique financial solutions custom tailored to unlock and build regional capacity. The Bank's financial model is based on a complete alignment of interests with investors, demonstrating a transparent, long-term commitment to them. Gulf One is an independent investment bank and exclusively focuses its core products and services on direct investments and infrastructure development projects. The aim of the Bank is to facilitate sustainable economic development and create wealth and prosperity in the region. With direct investments including transportation, clean energy generation, water treatment, aero- space, technology development and social infrastructure, Gulf One seeks to address the region's critical needs by being a key catalytic facilitator in the development of domestic capacity infrastructure.

4 Gulf One's lines of business comprise of Private Equity, Structured Finance, Advisory and Consultancy services. Gulf One has ex- panded its reach through the opening of offices in the Kingdom of Saudi Arabia (Gulf One Capital Company), the State of Kuwait (Gulf One Economic Consultancy) and Germany (Gulf One GmbH). Headquartered in the Kingdom of Bahrain, Gulf One operates under a conventional wholesale banking license granted by the Central Bank of Bahrain (CBB), CR 62199, with a paid-up capital of USD 113,888,889. Incorporation and Principal Activity Gulf One is a Bahraini Bank with limited liability and is incorporated in the Kingdom of Bahrain as a closed company. The Bank is licensed as a wholesale conventional bank by the Central Bank of Bahrain.

5 The registered office of the Bank is: Bahrain Financial Harbour, 15th Floor, West Tower, Box 11172, Manama, Kingdom of Bahrain Telephone : +973 17 102555. Fax : +973 17 100063. The Bank along with its subsidiaries comprises the Group as follows: Gulf One Capital Company, Saudi Arabia; 100% holding Manjam Mining Holding SPC, Bahrain; 100% holding Gulf One Employee Stockholding Company SPC, Bahrain; 100% holding Gulf One DACH Investments Limited, Cayman Islands; 100% holding Gulf One Investment Holdings Limited, Cayman Islands; 100% holding Gulf One Economic Consultancy Co. , Kuwait; 100% holding Gulf One GmbH, Germany. 100% holding Commercial Registration No. : 62199. Website : Bankers : Ahli United Bank, Standard Chartered Bank External Auditors : KPMG Fakhro Internal Auditors : BDO Jawad Habib Registrar : Fakhro Karvy Computershare 1 2012 Annual Report Gulf One Investment Bank (c).

6 VISION, MISSION AND VALUES. Our Vision To be a leading knowledge-based infrastructure investment bank. Our Mission To mobilise local and global capital to accelerate the realisation of infrastructure projects and corporatisation through innovative financial solutions. Our Fundamental Values Independence Alignment of interests for the investor and the bank Build regional capacity Gulf One is dedicated to providing exceptional and advanced investment and financial solutions through its knowledge-based approach, highly experienced team, extensive network of relationships across the region, and strong links to international partners. 2012 Annual Report Gulf One Investment Bank (c) 2. MESSAGE FROM THE BOARD OF DIRECTORS.

7 Dear Shareholders, Since its inception, Gulf One has focused its efforts on translating its vision and strategy into action. The Bank invested in various infrastructure and industrial sectors that have proven successful. Gulf One has also devised its own approach to value creation from investment selection to value delivery. In retrospect, the Bank now has a robust and proven model, which is ready to deploy into its next phase of growth. In 2012, the pace of global economic expansion slowed due to the lingering Eurozone crisis and political wrangling over fiscal challenges in the US that weighed down on economic performance around the World. As a result, global real GDP increased by only in 2012 compared with in the previous year.

8 Global economic outlook is expected to be a bit rosier in 2013. and 2014 as real GDP is projected to increase to and , respectively, on account of accelerated growth in the emerging economies and policy actions in the US and the Eurozone. Even so, the Eurozone crisis still poses significant downside risks to global economic prospects, as the region continues to grapple with high unemployment, austerity measures, and a weak finan- cial sector. These, along with budget consolidation efforts in the US, are likely to weaken demand for exports from the emerging economies. The solid economic fundamentals of GCC countries helped cushion the adverse effects of recent external shocks. The overall GCC economy grew by in 2012, albeit lower than the achieved in the previous year.

9 Growth was largely fuelled by higher oil prices as well as improved business climate which helped to boost private sector activity and non-oil GDP. Economies in the region are expected to grow moderately in the short-run due to projected lower oil prices, but they will remain buoyant and resilient supported by a healthy fiscal position, strong external reserves, and low inflationary pressures. Recently, many GCC. countries boosted employment of nationals in the private sector. More progress is needed to reduce the unemployment rate and diversify the regional economy. For Gulf One, 2012 has been a year of building and strengthening its delivery platform that will carry the Bank well into many years of future performance.

10 Much like its industrial investments, Gulf One has to expand its own investment production capac- ity with increased reliability and sustainability. The year marks several important milestones for Gulf One and its subsidiaries. In December 2012, Gulf One Capital Company, our Saudi subsidiary, received the regulator's approval to commence its activities in Investment Management, Client Portfolio Management, Arranging, Advising and Custody. Gulf One Capital Company will cater to Saudi Arabia and focus on delivering solid growth in this fundamentally strong market. In March 2012, Gulf One GmbH was established in Munich, Germany. Gulf One has invested in the DACH region (Germany, Austria and Switzerland) since 2007.