1.Prepare comparative Balance Sheet (Horizontal Analysis and Vertical Analysis per item) for the years 2015-2016 and interpret the result and discuss your assessment on the company performance.

Oman Arab Bank SAOC STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2016 Share capital RO Notes Legal reserve ROWO General Subordinated reserve debt reserve R0'000 RO'000 Sprcial reserve ROW Cumulative changes in fair value RO'000 Perpetual Tier I capital honds R0'00 Total RO 900 Retained carnings Total ROWO RO 000 13,351 226,019 24.526 24,526 116,000 33.368 26,560 40,000 (3,260) 226,019 24.526 3.188 3,188 3,188 3,188 24,526 27,714 11,000 27,714 11.000 19 11,000 2.400 At 1 January 2016 Profit for the year Other comprehensive income, et of tax Total comprehensive income for the year Issue of share capital Transfer to special reserve Transfer to legal reserve Transfer to retained earnings Transfer to subordinated debt reserve lisue of Perpetual Tier 1 capital bonds Issue expenses of Perpetual Tier capital bonds Dividend paid 2,453 20 21 (2.400) (2.453) 1.000 (1.000) 22 14,000 (14,000) 24 30,000 30,000 (34) (346) (11,600) (11.600) 25 (11.600) AL 31 December 2016 127,000 35,821 25.360 54,000 2,400 (72) 8,390 253,099 30,000 283,099 The accompanying notes 1 to 44 form part of these financial statements. 9 Oman Arab Bank SAOC STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December 2016 General Notes capital RO DA 116,000 Legal resene ROTO 30,467 Cumulative changes in fair value R0 (1.329) Subordinated dhe reserve RO (0) 30,000 RO't 0 23,659 Retained earnings RO DAO 14,062 Total R000 212.859 29,011 (1.931) 29,011 (1.931) Al 1 January 2015 Profit for the year Other comprehensive expense Total comprehensive (expense) income for the year Transfer to legal reserve Transfer to general reserve Transfer to subordinated debt reserve Dividend paid At 31 December 2015 (1.931) 27,080 2,901 2,901 10,000 29.011 (2,901) (2.901) (10,000) (13,920) 13.351 (13,920) 226,019 116,000 33,368 26,560 40,000 (3,260) The accompanying notes 1 to 44 form part of these financial statements. 10 Oman Arab Bank SAOC STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2016 Notes 26 27 2016 RO' (20 77,663 (26,777) 2015 R0'000 64,455 (15,321) Continuing operations Interest income Interest expense Net interest income Fee and commission income-net Investment (loss) income-net Other operating income 28 29 30 50,886 16,393 (265) 5,984 49,134 20,411 2.511 5,649 72,998 77,705 31 9(a) 9a) 10 (45,780) (14.384) 6,705 (2.336) 2 (41.962) (13,327) 7,977 (406) 2.400 17,205 (2.561) 32,387 (3,805) 18 14,644 28,582 Total income Operating expenses Impairment for credit losses Recoveries/release from provision for credit losses Impairment of investments available-for-sale Profit from sale of property Profit before tax from continuing operations Income tax expense Profit for the year from continuing operations Discontinued operations Profit after tax for the year from discontinued operations Profit for the year Other comprehensive income (expense) that will be reclassified to the profit or loss Net loss during the year on available-for-sale investments Recycling to profit or loss for impairment on investments available for-sale Other comprehensive income (expense) for the year, net of tax Total comprehensive income for the year 32 9,882 429 24,526 29,011 852 (2,337) 2,336 406 3,188 (1.931) 27,714 27,080 33 0.020 0.025 Earnings per share: Basic and diluted (RO) Basic and diluted earnings from continuing operations (RO) 0.012 0.025 The accompanying notes 1 to 44 form part of these financial statements. 8 Oman Arab Bank SAOC STATEMENT OF FINANCIAL POSITION Year ended 31 December 2016 Notes 2016 RO 2015 R0000 ASSETS Cash and balances with the Central Bank of Oman Due from banks Loans and advances and financing to customers Investment securities Other assets Property and equipment 7 8 9 10 253,106 30,080 1.594,799 113,935 45,401 28,651 192,124 83,226 1,519,571 118.357 40,856 28,565 12 Total assets 2,065,972 1,982,699 19 20 21 LIABILITIES Due to banks 13 12.056 9,404 Deposits from customers 14 1.637.152 1,601,162 Other liabilities 15 59.503 71.751 Subordinated debt 17 70,000 70,000 Taxation 18 4,162 4.363 Total liabilities 1,782,873 1.756.680 EQUITY Share capital 127,000 116,000 Legal reserve 35.821 33,368 General reserve 25.560 26,560 Subordinated debt reserve 54,000 40,000 Special reserve 2,400 Cumulative changes in fair value (72) 3,260) Retained earnings 8,390 13.351 Total equity attributable to the equity holders of the Bank 253,099 226,019 Perpetual Tier 1 capital bonds 30,000 Total equity 283,099 226,019 Total equity and liabilities 2,065,972 1.982,699 Contingent liabilities and commitments 371 821.6.39 859,862 The financial statements were authorised for issue by the Board of Directors on 23 January 2017 and signed by: 24 Ampl&-Husseini Rashad Muhammed Al Zubair Chief Executive Officer Chairman The accompanying notes 1 to 44 form part of these financial statements 7 Oman Arab Bank SAOC STATEMENT OF CASH FLOWS Year ended 31 December 2016 2016 20'00 2015 B0'000 Notes 17205 32,387 488 32 17.328 12 3,810 9(a) 14,384 (6.705) 2.336 (1.408) 32,875 3,411 186 13.327 (7,977) 406 (1.198) (2.440) 133 10 12 10 (21) 38,723 (265,085) 1,031 132.845 (3,036) 29,722 (82,907) (4.545) 35,990 (12,796) (34.536) (4,108) (38.644) (95,522) (3,924) Operating activities Profit before tax from continuing operations Profit before tax from discontinued operations Profit before tax Adjustments: Depreciation Tax refund for prior years Impairment for credit losses Recoveries/release from impairment for credit losses Allowance for impairment in available-for-sale investments Income from held-to-maturity Investments Profit on sale of property and equipment Change in fair value of financial assets at fair value through profit or loss Operating profit before working capital changes Loans and advances and financing to customers Other assets Deposits from customers Other liabilities Cash used in operations Tax paid Net cash used in operating activities Investing activities Proceeds from disposal of IMG Held-to-maturity investments matured Purchase of held-to-maturity investments Purchase of investments available for sale Financial assets at fair value through profit or loss Proceeds from sale of investments available for sale Income from maturing of held-to-maturity investments Purchase of property and equipment Proceeds from sale of property and equipment Net cash from (used in) investing activities Financing activities Proceeds from issue of share capital Proceeds from issue of capital bonds/subordinated debt Dividends paid Net cash from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year (99,446) 32 10 10 10 12,000 336,790 (335.858) (6.517) 18 10,652 1,408 (4,070) 5 (46,453) (25.952) 296 26.173 1,198 (2.669) 2.455 12 14,428 (44,992) 19 22 11,000 30,000 (11,600) 29.400 5,184 265,446 20,000 (13,920) 6,080 (138,318) 403,764 35 270.630 265,446 The accompanying notes 1 to 44 form part of these financial statements. 11 STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2016 Share capital ROWO 116,000 Legal reserve RO 20g Notes General Subordinated reserve debt reserve R000 R000 Cumulative changes in fair value RO000 Special reserve RO'00 Perpetual Tier I capital bonds R000 Retailed Sub earnings fotel RO'000 RO 000 Total Roon 33,368 26,560 40,000 (3.260) 13,351 226,019 24,526 24.526 226,019 24.526 3.188 3,188 3,188 he year 2188 24,526 27,714 11,000 27,714 11,000 11,000 2.400 At January 2016 Profit for the year Other comprehensive income, bet of tax Total comprehensive income for ssue of share capital Transfer to special reserve Transfer to legal reserve Transfer to retained earnings Transfer to subordinated debt eserve ssue of Perpetual Tier I capital onds stue expenses of Perpetual Tier capital bonds Dividend paid 23 20 21 2,453 (2,400) (2,453) 1.000 (1,000) 22 14,000 (14,000) 24 30,000 30,000 (34) (34) (11.2000) (11,600) (34) (11,600) 25 At 31 December 2016 127,000 35,821 25,560 54,000 2,400 (72) 8,390 253,099 30,000 283,099 STATEMENT OF CHANGES IN EQUITY (continued) Year ended 31 December 2016 Notes Share capital RO 000 116,000 Legal reserve RO'000 30,467 General reserve ROG00 23,659 Subordinated debt reserve R0000 30,000 Cumulative changes in fair value R0000 (1,329) Retained earnings RO'000 14,062 Total R000 212,859 29,011 (1,931) 29,011 (1.931) At 1 January 2015 Profit for the year Other comprehensive expense Total comprehensive (expense) income for the year Transfer to legal reserve Transfer to general reserve Transfer to subordinated debt reserve Dividend paid At 31 December 2015 (1.931) 27,080 2,901 20 21 22 2,901 29,011 (2,901) (2,901) (10,000) (13.920) 10,000 (13,920) 116,000 33,368 26,560 40,000 (3.260) 13,351 226,019 STATEMENT OF FINANCIAL POSITION Year ended 31 December 2016 Notes 2016 2015 RO000 RO'000 ASSETS Cash and balances with the Central Bank of Oman 7 253,106 192,124 Due from banks 8 30,080 83,226 Loans and advances and financing to customers 1,594,799 1,519,571 Investment securities 10 113,935 118,357 Other assets 11 45,401 40,856 Property and equipment 12 28,651 28,565 Total assets 2,065,972 1,982,699 LIABILITIES Due to banks 13 12,056 9,404 Deposits from customers 14 1,637,152 1,601,162 Other liabilities 15 59,503 71,751 Subordinated debt 17 70,000 70,000 Taxation 18 4,162 4,363 Total liabilities 1,782,873 1,756,680 EQUITY Share capital 19 127,000 116,000 Legal reserve 20 33,368 General reserve 21 25,560 26,560 Subordinated debt reserve 22 54,000 40,000 Special reserve 23 2,400 Cumulative changes in fair value (72) (3,260) Retained earnings 8,390 13,351 Total equity attributable to the equity holders of the Bank 253,099 226,019 Perpetual Tier 1 capital bonds 24 30,000 Total equity 283,099 226,019 Total equity and liabilities 2,065,972 1,982,699 Contingent liabilities and commitments 37 821,639 859,862 The financial statements were authorised for issue by the Board of Directors on 23 January 2017 and signed by: 35,821 STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2016 Notes 26 27 2016 RO000 77,663 (26,777) 2015 R0000 64.455 (15,321) 49,134 20,411 2,511 5,649 28 29 30 50,886 16,393 (265) 5,984 72,998 77,705 31 9a) 9(a) 10 (45,780) (14,384) 6,705 (2,336) 2 (41,962) (13,327) 7,977 (406) 2,400 Continuing operations Interest income Interest expense Net interest income Fee and commission income - net Investment (loss) income-net Other operating income Total income Operating expenses Impairment for credit losses Recoveries/release from provision for credit losses Impairment of investments available-for-sale Profit from sale of property Profit before tax from continuing operations Income tax expense Profit for the year from continuing operations Discontinued operations Profit after tax for the year from discontinued operations Profit for the year Other comprehensive income (expense) that will be reclassified to the profit or loss Net loss during the year on available-for-sale investments Recycling to profit or loss for impairment on investments available- for-sale Other comprehensive income (expense) for the year, net of tax Total comprehensive income for the year 17,205 (2,561) 14,644 32,387 (3,805) 18 28,582 32 9,882 429 24,526 29,011 852 (2,337) 2,336 406 3,188 (1.931) 27,714 27,080 33 0.020 0.025 Earnings per share: Basic and diluted (RO) Basic and diluted earnings from continuing operations (RO) 0.012 0.025 STATEMENT OF CASH FLOWS Year ended 31 December 2016 2016 RO" (PHU 2015 ROD00 Notes 17.205 123 32,387 488 32 17.328 32.875 12 3,810 9(a) 9a) 3,411 186 13,327 (7.977) 406 (1.198) (2.440) 14,384 (6,705) 2,336 (1,408) (2) (21) 10 12 10 133 29,722 (82,907) (4.545) 35,990 (12,796) 38,723 (265,085) 1,031 132,845 (3,036) Operating activities Profit before tax from continuing operations Profit before tax from discontinued operations Profit before tax Adjustments: Depreciation Tax refund for prior years Impairment for credit losses Recoveries/release from impairment for credit losses Allowance for impairment in available-for-sale investments Income from held-to-maturity investments Profit on sale of property and equipment Change in fair value of financial assets at fair value through profit or loss Operating profit before working capital changes Loans and advances and financing to customers Other assets Deposits from customers Other liabilities Cash used in operations Tax paid Net cash used in operating activities Investing activities Proceeds from disposal of IMG Held-to-maturity investments matured Purchase of held-to-maturity investments Purchase of investments available-for-sale Financial assets at fair value through profit or loss Proceeds from sale of investments available-for-sale Income from maturing of held-to-maturity investments Purchase of property and equipment Proceeds from sale of property and equipment Net cash from (used in) investing activities Financing activities Proceeds from issue of share capital Proceeds from issue of capital bonds/subordinated debt Dividends paid Net cash from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year (34,536) (4,108) (38.644) (95,522) (3.924) (99,446) 32 10 10 10 12,000 336,790 (335.858) (6,517) 18 10,652 1,408 (4,070) 5 (46,453) (25.952) 296 26,173 1,198 (2,669) 2,455 12 14,428 (44,952) 19 22 11,000 30,000 (11,600) 20,000 (13,920) 29,400 5,184 265,446 6,080 (138,318) 403,764 35 270,630 265.446