The Bahrain National Holding Company BSC CONSOLIDATED BALANCE SHEET As at 31 December 2008 Dinars) Note ASSETS Cash

and cash equivalents Statutory deposits Receivables Reinsurers share of technical reserves Investment securities Investment in associates Investment property Property, plant and equipment TOTAL ASSETS LIABILITIES Insurance technical reserves Insurance payables Other liabilities TOTAL LIABILITIES TOTAL NET ASSETS EQUITY (page 24) Share capital Treasury shares Statutory reserve Share premium General reserve Investment fair value reserve Retained earnings Total equity attributable to shareholders of the parent co. Minority interest TOTAL EQUITY (In thousands of Bahraini

2008 13,658 125 5,622 12,410 26,191 9,108 1,733 4,262 73,109

2007 11,226 125 5,369 15,190 30,963 8,921 1,821 4,127 77,742

8 Error: Reference Error: Error: Reference Error: Reference Error: Reference Error: Reference

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27,790 3,792 2,842 34,424 38,685

31,476 2,924 2,318 36,718 41,024

Error: Reference Error: Reference

11,350 (1,430) 4,560 3,986 13,585 3,165 1,963 37,179 1,506 38,685

11,350 (758) 4,358 3,961 11,485 6,090 4,538 41,024 41,024

Farouk Yousif Almoayyed Chairman

Abdul-Hussain K Dawani Deputy Chairman

Mahmood Al Soufi Chief Executive Officer

The Board of Directors approved the consolidated financial statements consisting of pages 21 to 66 on 18 February 2009.

The Bahrain National Holding Company BSC CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2008 Note GROSS PREMIUMS Reinsurance ceded Retained premiums Unearned premiums Gross Unearned premiums Reinsurance NET PREMIUMS EARNED Gross claims paid Reinsurance recoveries Outstanding claims adjustment gross Outstanding claims adjustment recoveries NET CLAIMS INCURRED Departmental expenses Commission income Commission expense Net transfer from/(to) life assurance actuarial reserve ) UNDERWRITING PROFIT FOR THE YEAR NET INVESTMENT INCOME Share of profit of associate companies Gain on partial disposal of shares of subsidiary company Gain on partial disposal of shares of associate company Net transfer from/(to) life assurance actuarial reserve Corporate and financial expenses PROFIT BEFORE IMPAIRMENT PROVISION Provision for impairment on investment NET PROFIT FOR THE YEAR Net profit attributable to : Parent Company Minority interest NET PROFIT FOR THE YEAR 11 25 25 25 25 25 25 25 25

(In thousands of Bahraini Dinars) 2008 28,031 (14,847) 13,184 (579) 295 12,900 (20,937) 13,047 4,470 (3,598) (7,018) (3,446) 1,983 (1,224) 3,195 433 403 608 441 (1,109) 3,971 (1,950) 2,021 2,068 (47) 2,021 2007 27,509 (14,908) 12,601 1,211 (1,650) 12,162 (13,057) 7,006 (5,111) 3,102 (8,060) (3,033) 2,344 (1,227) (180) 2,006 3,103 578 849 (289) (933) 5,314 (35) 5,279 5,279 5,279

27 25 25 20

26 14 2 20 27

Basic earnings per share (100 Fils each)

18.55 Fils

48.12 Fils

Farouk Yousif Almoayyed Chairman

Abdul-Hussain K Dawani Deputy Chairman

Mahmood Al Soufi Chief Executive Officer

The Board of Directors approved the consolidated financial statements consisting of pages 21 to 66 on 18 February 2009.

The Bahrain National Holding Company BSC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2008 Total equity attributable to shareholders of the parent company Investment Treasury Statutory Share General Retained fair value shares reserve premium reserve earnings reserve (758) 4,358 3,961 11,485 6,090 4,538 (672) (1,430) 202 4,560 25 25 25 3,986 2,100 13,585 (2,886) (39) (2,925) (2,925) 3,165 2,068 2,068 (2,191) (100) (50) (2,302) 1,963

(In thousands of Bahraini Dinars)

2008

Share capital 11,350 11,350

Total 41,024 (2,886) (39) 25 (2,900) 2,068 (832) (672) (2,191) (100) (50) 37,179

Minority Interest (47) (47) (47) (94) 1,600 1,506

Total Equity 41,024 (2,933) (39) 25 (2,947) 2,021 (926) (672) (2,191) (100) (50) 1,600 38,685

Balance at 1 January Change in fair value of available for sale securities Transfer to income statement on disposal of AFS investments Share of share premium in an associate company Net profit/ (loss) recognized directly in equity Net profit for the year Total recognized income and expense Treasury stock purchases Dividends declared for 2007 Directors remuneration declared for 2007 Donations declared for 2007 Transfers to reserves (refer note Error: Reference source not found) Minority interest in subsidiarys capital Balance at 31 December

The consolidated financial statements consist of pages 21 to 66.

The Bahrain National Holding Company BSC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2008

(In thousands of Bahraini Dinars)

2007

Share capital 11,350 11,350

Balance at 1 January Change in fair value of available for sale securities Transfer to income statement on disposal of AFS investments Net income recognized directly in equity Net profit for the year Total recognized income and expense Treasury stock purchases Dividends declared for 2006 Directors remuneration declared for 2006 Donations declared for 2006 Transfers to reserves (refer note 7) Balance at 31 December

Total equity attributable to shareholders of the parent company Investment Treasury Statutory Share General Retained fair value shares reserve premium reserve earnings reserve 3,961 (700) 3,830 9,485 5,153 3,803 (58) (758) 528 4,358 3,961 2,000 11,485 1,178 (241) 937 937 6,090 5,279 5,279 (1,866) (100) (50) (2,528) 4,538

Total 36,882 1,178 (241) 937 5,279 6,216 (58) (1,866) (100) (50) 41,024

Minority Interest -

Total Equity 36,882 1,178 (241) 937 5,279 6,216 (58) (1,866) (100) (50) 41,024

The consolidated financial statements consist of pages 21 to 66.

The Bahrain National Holding Company BSC STATEMENT OF CONSOLIDATED CASH FLOWS For the year ended 31 December 2008 Bahraini Dinars)

(In thousands of

2008 OPERATING ACTIVITIES Insurance operations (including life assurance) Premiums received net of acquisition costs Contribution received from policyholders Payments to insurance and reinsurance companies Claims paid to policyholders Claims recovered from reinsurers and salvage recoveries Cash flows from insurance operations Investment operations Dividends and interest received Proceeds from sale and redemptions Payments for purchases Investment in associates Proceeds from partial sale of shares in a subsidiary Proceeds from partial sale of shares in an associate Dividends received from an associate Cash flows from investment operations Expenses paid Cash flows from operating activities INVESTMENT ACTIVITIES Purchase of property, plant and equipment Cash flows from investment activities FINANCING ACTIVITIES Bank loan repaid Payment for purchase of treasury stock Dividends paid to shareholders Directors remuneration paid Donations paid Cash flows from financing activities TOTAL NET CASH flows during the year Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December CASH AND CASH EQUIVALENTS at 31 December Cash and bank balances Short-term deposits Total as per balance sheet The consolidated financial statements consist of pages 21 to 66. (672) (2,170) (99) (61) (3,002) 2,432 11,226 13,658 (582) (582) 28,459 211 (14,221) (20,313) 13,033 7,169 1,216 8,423 (9,560) (550) 2,212 300 2,041 (3,194) 6,016

2007

27,262 365 (12,711) (13,057) 6,572 8,431 1,334 5,769 (7,573) (4,964) 1,238 120 (4,076) (3,996) 359

(134) (134)

(1,666) (58) (2,068) (95) (43) (3,930) (3,705) 14,931 11,226

2,264 11,394 13,658

997 10,229 11,226