Our Mission• Committed to providing banking serviceswith the highest standards, inaccordance with Iraqi laws and regulations, and utilizing the best andlatest technologies, includingcomputer,communicationsand informationtechnologies.

• To manage investments with utmost care in order to achieve qualityrevenues rather than quantity, precipitating the shared interest of thecustomersandtheBank.

• To commit to full cooperation and coordination with other financialinstitutions/organizationsthatengageinprovidingqualitytransactions,inordertoenhancethefoundationofthefinancialinvestmentsystem.

• To commit to developing communities in all economical sectors throughinvestingintheindustrial,agricultural,commercial,realestate,service,andothersectors,andconsequentlyincreasingjobopportunities.

• To commit to social responsibilities that are aligned with the socialcharacteristics.

• Tocontributetosocialdevelopment,especiallythroughensuringsafetyandsecurity,improvingsocietyandpromotingsocialjustice.

• To promote money saving and correct investments according to soundinvestmentbases,throughfinancialandinvestmentproductsthatmeetourcustomers’needs.

• Toprovidetherequiredfundsforinvestorstocreateeconomicenterprisesandtofindalternatetoolsforfinancingactivitiesinordertomeetcustomers’needs.

Ashur International Bank for Investment

IraqiPrivateShareholdingCompanyestablishedin2005.CommercialRegisterNo.M.Sh./25812,Paid-upCapitalIQD250billionasontheendof2014.Baghdad–Iraq–UqbabenNafiSquare–Quarter903St.99Building87P.O.Box3636Telephone:009647704447355,009647704447366E-mail:Info@ashubank.comWebsite:www.ashurbank.com

Tableof Contents

Board of Directors

Message from the Chairman

Board of Directors’ Report 2015

Consolidated Financial Statements for the Year Ending December 31, 2015

Additional Data Required by Iraq Securities Commission for the Year 2015

Ashur International Bank Branch Network

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Chairman of the BoardMr.WadeeNouriAyedAl-Handal

Vice Chairman of the BoardMr.AliDiaAl-Husseini

Members of the BoardMr.AbbasHadiAl-BayyatiMr.ShakerMahmoudAliMr.AtheerGhassanHamedMs.BushraBashirSharif

Managing DirectorMr.AdnanKanaanAl-Jalabi

AuditorMostafaAbbas&Co.

External Audit ConsultantErnst&YoungCoIraq

Board of Directors

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In the name of Allah, the Most Gracious, the Most Merciful,

Ladies and Gentlemen, distinguished shareholders of Ashur International Bank for Investment,

The year 2015 was one of the richest yearsin regards to political and economic affairsboth locally and internationally, this in turnhad divergent impacts on different economicactivities in Iraq. On an economic level oilprices internationallycontinuedtoslump,whichhas reflected on many aspects of the Iraqieconomy,notonlywithadecreaseinthegrossnational product but also with an increase ofunemployment ratesandbudgetdeficit, all areattributed to thedecline in oil revenues that isthemain contributor to the country’s revenues.Thishasaffectedthecontinuityof thecountry’scapitalprojectsandalsocausedadelayinsalariesof the public sector employees in some of thecountry governmental organizations, especiallyinKurdistanregion.

Onapoliticalandsecurity level, Iraqwitnessedanumberofdevelopmentsandtransformationsthat impacted the Iraqi economy, where thesecriseshadaffectedallsectorsduringthepasttwoyears.Thefinancialsectorwasnotanexception,as it suffered from the consequences of thesecrises.Thatwasnotonlylimitedtothedecreaseinbusiness,increaseofrisksandgrowthofdebtsbutalso toadecline in liquidityand led to theincapabilityofusingtheavailableliquiditywithinthe Kurdistan region for operating activities.This has led to a decrease in the profits of thebankingsectoringeneralandtheprivatebanksinparticular.

For the sake of maintaining monetary stabilityunder these challenges, and for establishing abankingandaneconomicenvironment,thatwillcontributetoovercomingtheseconditionsandinenforcingsustainablegrowth,theCentralBankofIraq introducedanumberofqualityprocedures,suchastheprovisionofshortandmediumtermcreditlinesinordertoaideconomicsectorsandthesmallandmediumprojectssectorsaswellastheindustrialsectorwithinapreferentialinterestrate. Moreover, a decrease in interest rates forthepurposeofenhancingcreditoperationsandreinforcinglocalexpenditure;hence,stimulatingeconomic growth. One the same hand, andfor the purpose of increasing liquidity for thebanking sector to face the deficiency, bankswerepermittedtousenomorethan50%ofthestatutory reserve within the country’s Treasurybills with the possibility of withdrawing fromthestatutoryreservetomeettheneedsofsomebanks,theseinitiativeswerenotonlylimitedtoliquidity,butalsoaimedtoreinforcethesector’sbusiness and to face these exceptional crisesrelated tohotareas,anapprovalwas issued toofferthebanksthepossibilitypayininstallmentsthe allocations related to these areas overa period of time that is convenient with thebanks’ business. The Central Bank continued tocooperatewithIraqibankswiththepreparationfor activating the “National Switch” for thecompletionof thefirst stage, inaddition to thestart of cooperationwith related institutions topaysalariesthroughbankingsector.

Movingtoaninternationalscopeandpredictions,we see that the deceleration in growth andweaknessindemandinproducingcountrieswillcontinue to burden the international economy;adding to that a decrease in oil prices and itsdistinct impact on producing the countries,

Message from the Chairman

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whereitisexpectedthatinternationaleconomicperformance for the year 2016will increase to3.6%comparedto3.1%intheyear2015.IntheoppositedirectioninIraqandduetothepoliticalandeconomicconditions,itisunexpectedfortheeconomicsituationtowitnessanyimprovementsthroughouttheyear2016,undertherecessionofoveralleconomicfactorsandthecountry’sbudgetdeficit.

Distinguished Shareholders,YourBank,withitspowerfulandstrongpositionand its distinguished performance in achievingboth quality and quantity accomplishmentsthroughout this year, continued its 10 yearlongsuccessful path with achievements that reflectthe vision of the board of directors and itsexecutive management’s ability to transformthe challenges that storm through the regionand affect the country into opportunities. TheBank’s accomplishments, both on an executionand organizational level or on its financialperformance,werereflectionsofthecorrectnessofitsinvestment’spoliciesthatbalancebetweenreturns and risks, and increase the efficiencyandqualityofassetsandalsomaintainliquidity.ThisallhasstrengtheneditspositionintheIraqibankingsector.

On a financial level, thebank’s financial resultsshowed an increase in the net profit of theshareholders that registered at (10.785) billionIQD,withapercentageof(11.7%)incomparisonwiththesameperiodoftimefromthepastyear.This increase is attributed to a growth in thebank’s revenueswith thepercentageof (4.7%)whichisestimatedat(1,543)billionIQD.Oneofthemainreasonsfortheincreaseoftheincome,is the increaseof theBank’sothercommissionsand foreign trade commissions. Despite the

decline in credit operationsand the suspensionof interests with an approximate value of (6)billion IQD, the Bank managed to maintain itsrevenues from interests in the same level as itdid in thepastyearasa resultofpursuingbaddebtsandprovidingloanopportunitiesforlowerriskgroups,itisnotedthatmajorityofthegrossincomecamefrombankingoperations.

Inregardstothesourceandutilizationsofmoney,the Bank continued in 2015 to implement itspolicy, which stands on reinforcing its liquiditythrough the diversification of money sourcesandconcentratingonlowercostdeposits.ThishasledtoanincreaseintheBank’sDepositPortfolioup to (120.8)Billion IQDwith agrowth rateof(10.3%)bytheendof2015.Asfortheutilizingthe available liquidity, and noting the currenteconomic circumstances, the Bank maintaineda high liquidity ratio in order to face variablesand current conditions, where its cash balanceexceeded(339.8)BillionIQD,thatforms(75.2%)from the bank total assets. By that the BankexceedstheliquidityratioadoptedbytheCentralBankof Iraq and the international standards toreach(206%).

As for the solvency ratios, the Bank achievedperformance levels that exceed internationalratesandthatisduetotheextraordinarygeneralsituation in the Iraqi Market. The ratio of thecapitaladequacyincreasedtoreach194%whichexceedstheminimumratiofortheCentralBankof Iraq’s requirements which is 12% and the8% ratio required by BASEL II. Tomaintain theBank’sCreditPortfolio,theBankworkedontwoaspects. First one was founding the Follow-upandCollectionDepartmenttodealwiththeCreditPortfolio,whereArabexpertiseandcompetenceswere recruited to run this department. This

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resulted in the collectionofwhat isworth (38)billion IQD throughout the year 2015 from thebank’s gross Credit Portfolio. Secondly, in ordertomaintaintheassetquality,theBankallocatedprovisions that exceed the threshold stipulatedby the instructions of the Central Bank of Iraq,the guidelines and the Auditor’s requirementsto face any risks during this period. Provisions– cash and documentary – amounted to (25.8)billion IQD, which cover more than (61.7%) ofthe due credit after the deduction of suspenseinterests and the income received taking intoconsideration the fact that the Bank does nottake intoconsiderationanynoncashguaranteeswhencalculatingprovisionsfrombaddebts.

Inthesamecontext,theBankrecognizedlossesonallfixedassetswithinthehotareas,especiallyTikrit and Mosul. In addition to allocatingprovisions, that covers 32% from the grosscashinMosulbranchwhichisestimatedat630millionIQD.TheBankalsoworkedonallocatingprovisionsthatareworth50%fromtheamountsrequiredby theCentralBankon IraqiBanksasmiscellaneous provisions. Worth noting thatthe Bank follows up with the Central Bank ofIraq the issue of imposed penalties to acquiredetails of the amounts related to customers,where theBankmaintain its right to followuponthesepenaltiesinallpossiblemeasureswithconcernedparties,astheBankiscomplyingwiththe laws, instructions, rules, applications andinternationalrules.

Distinguished Shareholders,The Bank continues to keep up with thedevelopment of its business and operationsaccordingtoitsstrategiessetfortheyears2014-2017 to convoy the best international practiceson every standard; organizational, operational,human resources and work environment. Thiswillcontributeinnotonly improvingtheBank’sperformance on the long term and enhancingconfidence, but also will contribute in making

it more capable of meeting the needs andexpectationsofourcustomersandshareholders.

The business plan for the year 2015 targetedtheimplementationofanumberofprojectsandprograms to establish work procedures and anorganizational environment, in a manner thatis consistent with the changes. In this stagethe completion of restructuring of all branches,in addition to establishing a central unit fordeposits and the completion of setting manywork procedures that organize the branches’operations. The purpose is to get to a set ofunifiedworkproceduresto formthefoundationof the change process in the Bank’s quality ofservices.Moreover,theBankbeganaprocessingofupdatingcostumers’data.

Keepingupwiththelatestdevelopmentsinthefieldoftechnologicalsystems,theBankcontinuedto apply many electronic systems that pertainto thedevelopmentof the infrastructureof theinformation and communication technology.The Bank’s infrastructure renovation projectwas completed for all branches and the Bankmanagedtobethefirstbankthatfinishesalltheinspection and correlation procedures with the“NationalSwitch”incooperationwiththeCentralBankofIraq.Moreover,theactivationoftheSafeWatchsystem,forthepurposeofcomplyingwiththeinternational lawsinregardstotransfers, inaddition to the activation of the MIS programconcernedwiththeBank’sadministrativereportswhich accelerates obtaining information by thedecisionmaker.

Regarding the distribution channels and thenetworkofbranches,theBankworkedonopeningitsfirstbranchinthecityofBasra,inadditiontocompleting thepreparationof theKarbalaandAl-Mansourbranches,whichareexpectedtobeopened in thefirst quarter of 2016.Moreover,thebranchesinAl-SulaymaniyahandErbilwererenovatedand relocated. Thesebrancheswere

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designedtoprovideconvenienceandamodernbanking environment for both the employeesand the clients and to reflect the true imageof the Bank. From the Bank’s commitment inhelpingwiththeresurgenceofliberatedareas,Ashur International Bank worked on restoringits operations in Tikrit branch, making it thefirst andonlyworkingbank in the city till theendof thecurrentyear, toassist the returnersandcitizensof thecityofTikrit.TheBankalsoworkedonthecompletionofthenewdesignforitswebsite,whichwillbe launched inthefirstquarterof2016.

Proceeding from the principle of transparencyand to boost the confidence in the Bank’sfinancial statements and also to meet theneedsofCentralBankof Iraqofshiftingintheend of 2016 to demonstrating statements inaccordancewith international standards (IFRS).TheBankwasthefirstinthisfieldandworkedonappointingoneof theglobalauditingfirmsasaconsultantforthefinancialstatementauditprocess. The audit process for this year wascompletedandthestatementsoftheyear2015willbeissuedinaccordancewith(IFRS)andtheuniformsystemofaccountsforthepublic.ThismakesAshurBankonethefirstbankstomeettherequirementsandinstructionsoftheCentralBankofIraqinthisaffair.

Distinguished Shareholders,WeinAshurInternationalBankseektoadvanceinworkmethods toactualize thedemandsandwishes of our clients through maintaining thebalance between the risk and the returnwhilemaintaining at the same time our competitiveposition. Despite the uncertainty that hoversabove the Iraqi economy and the political andsecurity instability which affects the businessenvironment and the industrial sectors, ourstrategy will be open to all the options andpossibilities, as the Bank will aspire to benefitfrom any available opportunity wherever that

may be, resting on the power of our financialpositionandthestabilityofourcapitalbase.Wehopethat2016willbeafortunateyearforthiscountryandwill contribute in the improvementofthebusinessandinitsprosperity.

According to the standing work programs andbased on what have been achieved last yearand as a continuation of the Bank’s policy inreinforcingthecapitalbaseandtheshareholder’sequity. The board of directors decided tomakea recommendation to the General Commissiontorecycleprofitsandmaintainthem,tofacethedemandsofgrowthandtostrengthentheBank’sequitybase.

Inconclusion,I,andonbehalfofthemembersoftheboardofdirectors,wouldliketothanktheshareholdersfortheirconsistentsupportandourclientsfortheirtrust.Iwouldalsoliketothankalltheofficialandprivateinstitutions,especiallythe Council of Ministers and its economicteam, the Central Bank of Iraq, the Iraq StockExchange, the Iraq Securities Commission, andthe Companies Control Department for theireffortsinfacingthecurrenteconomicconditionsand driving economic growth in Iraq. Last butnot least, Iwould liketoexpressmyimmensegratitude to all the employees at AshurInternational Bank for Investment at all levelsandpositionsfortheirtirelesseffortsandsincereworktohelpimprove,develop,andachievethepositiveresultsoftheBank.

Wadee Nouri Ayed Al-Handal

Board of Directors’ Report (2015)

Achievements and Activities (2015)

Financial Results and Analysis (2015)

Next Year Goals (2016)

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Board of Directors Annual Report for The Year Ending December 31, 2015

Achievements and Activities (2015)Despitethemanychallengesbothinsecurityandineconomy,theBankmaintaineditsbalancedperformancebyadoptingabalancedstrategybetweenprofitabilityandrisks.ThishasresultedinmaintainingtheBank’sachievementsandreinforcingitsroleintheIraqibankingdomain.

Financially, the Bank’s performance was balanced with the market, where its efforts inmaintaining itsaccomplishmentsandmovingforward, reinforcedtheBank’s role in the Iraqibankingdomain.Thiswasachievedthroughmaximizingshareholdersreturnswiththelowestriskpossible,inadditiontocontinuingtherestructuringeffortswhichwasapprovedthroughthebankstrategicplanfortheyears2014-2017,tobecomeoneofthedistinguishedbanksintheArabregion.

In 2015, despite the instability, the Bankmanaged to achieve positive growth rates in linewith the banking market. The Board of Director submits its comprehensive report for theauditedfinancialstatementsfortheyearendingDecember31,2015.ThereportincludesdataandinformationpertainedtotheBank’sactivitiesandoperationsandtheimplementationofthe annual plan. The report is prepared in accordancewith the provisions of the applicableCompaniesLaw,theaccountinginstructionsforcompanies,theprovisionsoftheBankingLawandtheinstructionsoftheIraqiSecuritiesCommission.

Bank’s Activities and Operations in 2015AshurInternationalBankcontinuedtoleaditspositionintheIraqibankingmarketbycapitalizingonitsachievementsthroughoutthepast10yearsaswellasbycontinuingthedevelopmentof products and services, electronic systems, distribution outlets and distribution electronicchannels,andelectronicpaymentsystems;allisaimedtoprovidespecialservicesforourclients.SincetheestablishmentoftheBank,andaspartofitsstrategy,itworkedonstrengtheningitscapitalbasetofulfilltheBank’sdesiretoexpanditsbusinessandmeettheCentralBankofIraq’srequirements.

Year 2007 2008 2009 2010 2011 2012 2013 2014 2015

PaidupCapital(billiondinars) 25 25 50 57.5 66.7 150 210 250 250

billiondinars

Paid up Capital

20082007

250250

210

150

66.757.5502525

2009 2010 2011 2012 2013 2014 2015

250

200

150

100

50

0

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Financial Results ThefinancialresultsforAshurInternationalBankcomeasresultofimplementingtheadoptedpolicy,whichisbasedonthequalityofmanagingassetsandliabilitiesandimprovingthequalityofasset’s.ThiswillenhancetheBank’sfinancialpositionandminimizestherisksthatoccurfromarapidlychangingenvironment,throughbalancingrisksandbenefits.Thishelpedthebankinovercomingthepoliticalandsecuritychallengesthroughofferingthebestsolutionsandcreatingnewopportunities.TheBankfollowedapolicythatmaintainsthequalityofassetsandachievesthemainfinancial ratioswithintherequirementsof theregulatorybodies,whether liquidityratiosor capital ratios,and tobalancebetween revenuesand riskswithin theseexceptionalconditionsthattheIraqieconomyisencountering,whichaffectsthebankingsector.

TheBank’sfinancialresultsreflecttheresultsofimplementingtheabove,wheretheliquiditywasmaintainedtoencounteranychallengescausedbytheeconomiccircumstances.TheBankregistered(339.833)BillionIQDforming(75.4%)oftheBank’stotalassets,andallowingtheBank to exceed the liquidity ratios set by the Central Bank of Iraq andby the internationalstandards by (206%).On the contrary, theBankdidnot achieve thedesiredgoals in directfacilities.ThereasonforthatrelatestotheBankpolicyoffacilitatinglowriskfacilities.InadditiontheBankhasestablishedacollectiondepartment,thatfocusedoncollectingandrefinancingdebts, particularly in Kurdistan regionwhich resulted in improving the quality of the creditportfolio;thedepartmenthasalsocommenceditsoperationsintheTikritbranchbytheendoflastyear.

In order to maintain the quality of its assets, the Bank increased its due facilities coverageprovisions (due credit facilities) to exceed the ratios required by regulatory bodies and coverpotentialriskswherethecoverageofnetcashfacilitiesregisteredat(61.7%)fortheyear2015.

Similarly,theBankdidnotachieveitstargetsinfixedassetsinvestment,duetopostponingtheimplementationof thebranchexpansionplan,becauseof the current circumstances.Despitethis,theBankwitnessedincreasesincomparisontolastyear,forthereasonsofthecompletiontherenovationinAl-SulaymaniahandBakhtiaribranchsandtheopeningofAl-BasrabranchinadditiontothecompletionofKarbulaandAl-Mansourbranchesbuildings.

Assets BudgetingDinarsinThousands

Statement Planned 2015 Achieved 2015 Deflection Rate

CashattheBankandOtherBanks 355,850,487 339,832,680 -4.5%

CreditFacilities 92,338,896 56,467,290 -38.8%

FixedAssets 31,796,278 29,124,512 -8.4%

Thisincludesbaddebts

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AlthoughtheBankhasshownapositivechangeoftheliabilitiessidecomparedtolastyear,butitdidnotmeettheexpected/budgetedgrowthtoreachatotaldepositof(1772)BillionIQD.

DinarsinThousands

Assets Budgeting Planned 2015 Achieved 2015 Deflection Rate

Capital 250,000,000 250,000,000 0%

CurrentAccountsandDeposits 177,296,785 120,776,425 -31.9%

TheBank’sresultscameoutpositivebeforethedeductionofprovisions,wheretheBankexceededthetargetedbudgetofprofitbeforetheprovisionsandtaxes.Asforthegrossincome,itamountedto(34.252)BillionIQD,withanincreaseof(4.5%),incomparisontotheyear2014.Therevenuesfromthebankingoperationsamountedto(95.5%)ofthegrossincome.

Ontheotherhand,theBank’sadministrativeandoperationalexpenseswerecontrolledandwerewithinthebudget.Asfortheprovisions,theBankallocatedavarietyofprovisionstofacethefinesthatwereimposedonIraqiBanks, inadditiontothecashinaffectedbranches.Allofthefixedassetsinthesebranchesweredepreciatedandassignedascapitallosses.ItshouldbenotedthattheBankiscorrespondingwiththeCentralBankofIraqseekingdetailsofcustomersunderwhichthepenaltieshasbeenassessed,andthatisduetothefactthattheBankisexercisingduecareinfollowingtheinstructions,thelawsandregulationswithinthecountryaswellastheinternationalstandards.

LoanprovisionsarefollowedupcloselyinbothhotareasandintheKurdistanregion,accordingtothecollectionproceduresaswellaslegalprocedures.Itisexpectedthatthemajorityoftheamountistobecollectedduringthiscurrentyear.Asaresult,netprofitbeforetaxesregressedby(24.8%),asearningsbeforetaxreached(14,425)billionIQDin2015.

Dinarsinthousands

Budget Revenue Planned 2015 Achieved 2015 Deviation

BankingOperationsEarnings 35,483,828 33,210,173 -6.4%

InvestmentEarnings 202,517 26,244 -87.0%

TransferableEarningsandOther 3,972 1,015,990 25478.8%

Total Earnings 35,690,317 34,252,407 -4.0%

Budget Expenses Planned 2015 Achieved 2015 Percentage

BankingOperationsExpenses 1,870,953 3,595,276 92.2%

AdministrativeExpenses 13,790,450 8,530,293 -42.7%

TransferableExpensesandOther 628,585 7,701,942 -1102.4%

Total Expenses 16,289,988 19,827,511 20.7%

Profits 19,400,329 14,424,896 -24.8%

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Products and ServicesTheBank continuedworking according to its strategic plan of restructuring its operations inordertoutilizeitsavailableresourceswiththeviewofachievingsustainablegrowththroughimplementing the latestmethods andmodels in banking operations to improve itsmarketposition and providing a high quality customer services. Throughout the year the Bank hascompletedtherestructuringofallitsbranches,improvingtheefficiencyoftimelyoperations,andaligningitsprocedurestoimprovetheoverallqualityandperformance.

TheBankcontinuedtotransformitsbranchesintosaleandservicecenters,wheretheirmainfocusistoservethecustomer,thisisachievedthroughcentralizingtheoperationsintheHeadquarter.Furthermore,theBankisunifyingallworkproceduresandreducingfinancialprocedures’routes,bythatthecustomerwillbeservedbetterandinashorterperiodoftime.

Retail SectorThe Bank restructured its branches by the end of the year 2015. All these branches weretransformedintosaleandservicecenters,whereallotheractivitieshavebeencentralizedintheHeadquarter.BydoingsotheBanktakesthefirststepinachievingitsvisionforthenextstageandexecutingitsstrategyoffocusingtheworkofthesebranchespurelyoncustomersbyofferinganexceptionalservice,tobeonahighlevelofefficiencyandcapabilityofmeetingtheirneeds.TheBankimprovedthequalityofservicesandexpandingthem,inaccordancewiththebestbankingpractices.Thiswillbebasedonthenewstrategyfortheretailsector,whichisbasedonstudyingcompetition,customersandmarketchangesandrestructuringthebusinessto copewith such changes, anddevelops procedures andexpedite operations, to provide abetterlevelofcustomerservices.

InlinewiththeBank’sdesiretodevelopitsprogramsandproductstomeettherequirementsofallcustomers,itlaunchedanumberofproducts,suchasthepersonalloaninsouthernprovinceswhichaddressedcustomersinthepublicsector.Thisprogramreliesontheprocedures’simplicityandtimelyexecutioninaccordancewiththenewandmodernworkmechanisms.

TheBankalsoaspiredtoexpand itscustomerdeposits.As itworkedonre-pricingthegiveninterestsonfixeddepositsandsavingsaccounts,toexpanditscustomerbaseandofferserviceforavarietyofcustomers.Itisexpectedtolaunchthenewsavingsaccount’sproductin2016,whichwillmeettherequirementsofalargercustomerbaseinrelationwithcommitmentterm,interestrate,andinterestpaymentperiods.

Corporate and SME’s SectorThe Bank started up the Companies Business Development Group to provide the necessaryfinanceforthedifferenteconomicsectorsandeconomicallyviableprojectsthroughbusinesscenters.Thebusinesscentershostateamofhighlyqualifiedemployeestomeetthecustomerrequirementsandprovidethemwithqualityservicesandbankingsolutions,inamannerthatenablestheBanktoprovidecomprehensiveanddistinguishedrelationshipmanagement.ThebusinesscenterwasestablishedinBaghdad.

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Branch and Distribution Channel NetworkInordertoreachthetargetedBankcustomers,theBankworkedthroughouttheyeartocompleteredistributing and spreading its branches in Kurdistan region. The relocation of theBekhtaribranchtoitspermanentsiteinBekhtariStreetwascompleted.TheBankalsoaccomplishedtherelocationof theAl-Sulaymanayahbranch. Thesebrancheswereequippedand rehabilitatedaccordingtothebestandhighestlevelsofadvancedservicesandwithwhatmeetstheBank’saspirationsofreachinginternationalstandards.Asforthehotareas,AshurBankwasparamountasalwayswithreopeningthebranchesinliberatedareas,toofferitsservicesforthereturnersofthecityofTikritanditssurroundings.TheBankremainstobetheonlybankintheareatillnow.Thebranchwasrehabilitatedandequippedwithallitsneeds,fromtherehabilitationofthebuildinganditsdecorationsandsystemsandinternetservices.TheBankcontinueditsplanincoveringsouthernprovinceswithanetworkofbranches,wheretheBasrabranchwasopenedinthefirstquarterof2015andtheKarbalabranch’sconstructionworkswerecompletedanditisexpectedtobeopenedinthefirstquarterof2016.InBaghdad,theBankworkedoncompletingtherentingandrehabilitatingitsbranchinAl-Mansour,whereitwillbeopenedinthesecondquarterof2016.

TheBankmanagedtoexpandwithitselectronicoutletstoreach9,anditisexpectedtoreach14bytheendofthefirsthalfof2016.TheBankisexpectedtocompleteitsfirstmobilebranchinIraqinthethirdquarterof2016.TheBankwebsiteiscompletedandexpectedtobelaunchedbythefirstquarterof2016,whereitwillbealignedwiththeBank’svisionandneedsfortheupcomingstage.

Asforthecorporates’distributionchannels,thebusinesscenterinBaghdadwasestablished.Itisexpectedtobeginestablishingbusinesscentersforthepurposeofservingthecorporate’ssectorinKurdistanregionandBasra.

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Organizational Methods and Technology ResourcesIn2015theBankcontinuedimplementingitsstrategicplantobecometheleadingBankintheIraqibankingsectorinrelationtoorganizationalmethods,technologyresources,communicationsystems,andoperationalproceduresandpolicies,whetheratbranchesordepartments,whichisregardedasaunifiedandgeneralconceptfortheBankasawholeandallowstheBanktoachievebothefficiencyandeffectiveness.

In regards to operational procedures, different operationalmechanismsandprocedureswereintroducedinordertomeetthedemandsofthisstage,wherebranches’operationalprocedureswereissuedandputintopractice,inadditiontoplacingtheproceduresconcernedwithcreditlinesandproductsoperationalmechanisms.Inregardtoauthorities,theBankworkedonorganizingtheauthoritiesrelevanttobanksbylayingdownasystemandlinkingthesametotheappliedauthoritiespolicywithin theadministrativestructureof theBank.As forcreditauthorities forcommittees,thosewereamendedanddevelopedtomeetthedemandsofthecomingstage.

Itisexpectedtocompletetheoperationsofthecentralcashandmonetaryceilingactivationandadministration;thecountingandclassificationcenters’infrastructureandsystemswerepreparedandareexpectedtolaunchtheirservicesinthefirstmonthof2016.Asforlayingdownpoliciesandprocedures,itisplannedintheupcomingyeartocompleteoperationalproceduresrelatedtodailytransactions,keyholders,collectionandfollowup,cards,automatedtellermachines

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(ATM),inadditiontoanumberofotherproceduresconcernedwiththeoperationsofthecontroldepartments.

AsfortheunificationofBank’sdataandtohelpthedecisionmakerandmakeoperationsandfollowupeasier,theBankworkedonthecentralizationofexpensesandfixedassets’operationsaswellastheBank’sprivatesettlementoperationsasawholewithinthespecializeddepartments.TheBankhasgonealongwaywithclassifyingloansandprovisions,inadditiontoactivatingtheManagementInformationSystem(MIS)and commencing theprojectofupdating costumers’data, foundingadepositcenter,andactivatingtheSafeWatchsystemwhichwillhastentheprocessofextractingtheneededinformationforthedecisionmaker,throughprovidingtheminaconvenienttimeandwiththerequiredaccuracy.TheBankbegantobenefitfromthisprocessbydevelopingmanydailyreportswhichhelpthebusinessandinfollowingupwithcustomers.Thesecondstageofloanautomatizingwillbein2016,whereitisexpectedtocompleteitbytheendofthethirdquarter,andwillrelatetotheautomatizingofcreditor’scollateralinformation.TheBankalsoworkedonmovingtoacentralversion of the system,where it began thepreparations for technical requirements, namely theBank’scommunicationinfrastructure,inadditiontocommencingnegotiationswiththeconcernedproviders,andlinkingbetweentheCentralBank’sprogramsandtheBank’ssystem,Moreover,theBankappliedtheAMLsystemandFATCA,andpurchasedanExchangeServer.

As for the development and organization of the Bank’s departments and units, the strategicorganizationalstructurecontinuedoperatingtoachievetheBank’sstrategicambitionsoverthenextthreeyears.Theorganizationalstructureoftheinternalauditdepartmentafterthecollaborationwithexternal consultants, theLegalDepartment, theCollectionandFollowupDepartment, inadditiontoallthedivisions,departmentsandunitsthatwereimplemented,whicharetheRetailServices,CommercialServices,IT,Credit,BankingOperations,FinanceandHR.

TheBank’sInternalAuditDepartmentwasstructuredincooperationwithexternalconsultants.Thedepartmentwassuppliedwithspecializedstaff,whoweretrainedonauditingmechanismsinaccordancewithinternationalstandards,thetrainingwasprovidedbyconsultantswhohaveservedintheworld’sleadingauditfirms.AsfortheCollectionandFollowupDepartmentandAuthenticationUnit,theBankworkedonestablishingthisdepartment,settingitsorganizationalstructure, and supplying itwith external expertise towork on improving the quality of theBank’sCreditPortfolio;wheretheDepartmentachievedthedesiredgoalsin2015.InregardstotheLegalDepartment,theBankbeganstructuringitsoperationsandsupplyingitwithlocalstaff,therestructuringofthisdepartmentisexpectedtobecompletedintheyear2016.

AsfortheBankingOperationsDepartment,thelaunchingofacentraldepositunitwascompleted.IntheFinancialDepartment,theBankworkedonthecentralizationofadministrativeandgeneralexpenses,inadditiontofixedassets,aswellasthecentralizationofsettlementsandfinancialstatements,wheretheywereallrelocatedtotheFinancialDepartment.

Inregardstothe2016plan,theBankwillcontinuetostructureitsdepartmentsthroughworkingoncentralizingoperationsandredistributingtasksamongstthedepartments,as,forexample,operationdepartments,Credit,CorporateOperations,InformationTechnologies,Finance,ControlandHumanResources. In thisperiod, specializedunitswillbe founded,occupationsand jobdescription of these departments and occupations will be redistributed in response to thechanges.Moreover,aRiskDepartmentwasfoundedtomeetthedemandsofthebusinessandtocomplywiththeinstructionsoftheCentralBankofIraq.

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InlinewiththesechangesanddevelopmentsattheBank,andaspartoftheendeavortowardsthe Bank’s information security, specialized programs and antiviruses were purchased toguarantee thesecurityof theBank’sdevicesandprogramsand toensureworking inasafeenvironment.Asforcommunications,theBank’scommunicationnetworkwasimproved.

TheBankalsoworkedondevelopingthecommunication’sinfrastructurethroughoutthisyeartokeepupwithfuturedevelopments.TheBankworkedonimprovingcommunicationnetworksforBaghdadandRubaiebranches.

Social Responsibility AshurBankcontinueditsactiveroleinsupportingthelocalcommunitythroughcontinuingtoprovidesupportandsponsorshipforthegroupswhowereaffectedthemostbytheeventsandconditionsthatstormthecountrytocurbtheeffectsofterrorismandinstability,wheretheBankfocusedonrelievingtheirsufferingsthroughdirectsupportanddeliveringaid.TheBankadoptedthe“Ahlana”Campaign,andsupporteditbothfinanciallyandmorally.TheBankalsocontributedinhandingoutfoodsandbuildinghousesforrefugees,whohadtofleetheirhomesasaresultofwarinhotareas.TheBankalsocontributedthroughitsstaffinopeningAbuGhraibCampforrefugeesanddistributingfoodandmedicalaidonthesecamps,inBaghdadandDahoukandErbil.Onanotherhand,theBankhelpedsupportingthecharitiesformartyrs’familiesintheaffectedregions.

20

Asforcorrespondentbanks,throughouttheyear,theBankenhanceditsnetworkofcorrespondentbanksaround theworld to reacha totalof16, to coverallof theBank’sexternalactivities,specificallyinthedomainoflettersofcreditandtransfers.

List of Correspondent Banks

Name of Bank Country

AbuDhabiIslamicBank UAE

NationalBankofAbuDhabi UAE

CapitalBank Jordan

TheHousingBankforTrade&Finance Jordan

BankalEtihad Jordan

JordanKuwaitBank Jordan

Commerzbank Germany

Lebanon&GulfBank Lebanon

UnionDeBanquesArabesetFrançaises Bahrain

Fransabank Lebanon

BankofBeirut Lebanon

ArabAfricanInternationalBank UAE

ISBONK Turkey

BankofJordan Jordan

InternationalBankofQatar Qatar

AktifBank Turkey

In line with its core values, Ashur International Bank gives special attention to corporategovernance. We believe that corporate governance plays an important role in improvingperformanceandtheriskmanagementsystem,throughbuildingsolidrelationshipsbasedontransparencyandcommunicationwithallstakeholdersandprotectingtherightsofshareholdersanddepositors.Therefore,theBoardofDirectorsapproveditscorporategovernancestructureandactivatedtheboard’scommittees,asstatedunderthe‘corporategovernance’sectiontitle,toimproveperformanceandreinforceitsinstitutionalwork.

21

Human ResourcesHumancapitaloftheBankisregardedtobethefoundationforanyrealchangeordevelopmentprocess.TheBankcontinuedtoimplementitsstrategiesthataimtodevelophumanabilitiesinBank’semployeesanddeveloptheirskills,tobuildaworkteamcapableofrisingwiththeIraqibankingsector.Therefore,theBanksetthebasicstructureforthisdevelopmentthroughtrainingoperations and solicitation of Arab expertise to run the business and train the employees,in addition to communicating their expertise to theemployeesof theBankand trainingallemployeesonallbankingoperationsinaccordancewithinternationalstandards.

InlinewithautomatizingoperationsinHR,theBankworkedonautomatizingalltheoperationsandcompletingthebiggestpartofimplementingthedepartment’sHRsystem.

Classification of Ashur Bank Employees According to Job Grade

Serial No. Job Grade Job Title Number

1 SpecialManagingDirector/DeputyManagingDirector/Consultant

5

2 Executive DepartmentManager 10

3 Management BranchManager/DivisionManager/UnitManager 12

4 Supervisory Supervisor 21

5Technical&Advisory

ProjectsandMaintenanceDirector/Attorney/Engineer

12

6 Basic Employee/SeniorEmployee 108

7 UnclassifiedSecurityGuard/TransportEmployee/AdministrativeAssistant/FollowupEmployee

40

Total 208

22

Financial Position and Business Analysis Report 2015

TheBank’sassetsamountedto(15.582)billionIQD,withagrowthrateof(3.6%)intheendofthecurrentyear,toreach(451.830)BillionIQDcomparedtothepreviousyear’s(436.249)BillionIQD.TheBankeffortscontinuedtofocusonthequalityofassets,growingowners’equityinamannerthatbalancesbetweenprofitabilityandsafeinvestments,avoidshigh-riskinvestmentsand provide liquidity to face financial commitments and the economic conditions, so as tomaintaintheBank’ssolidfinancialposition.

When analyzing the relative importance of assets, it is found that cash and direct facilities(CreditFacilities)represented(78.2%)oftotalassets;(75.4%)and(19.6%),respectively.Itisalsofoundthatvaultcashanddepositsinotherbanksscoredagrowthof(13.8%)toreachto339.833BillionIQD,whichreflecttheBank’shealthyliquidityratioof(206%)comparedwith155%in2014andthegreatabilitytofacethecurrentcircumstances.Ontheotherhand,creditfacilitiesshrunkby(85.5%)duetothereductionintheBank’sCreditPortfolioinresponsetotheincreaseofrisksunderthecurrentcircumstances,inadditiontotherecoveryoftheBank’sportfolioandthesettlementofunresolvedcasesandreceivables.Onarelatednote,debtorsincreasedduetothegrowthinpast-dueaccountsreceivable,whichamountedto(56.9)billionIQD;thisresultedfromthegrowthinpayablescausedbythepublicsectorsalarycrisis,whichinturnnegativelyaffectedtherepaymentofreceivables,inadditiontothecircumstancesthehotspotsaregoingthroughThereforetheBankdecided,despitehavingadequateguarantees,tomaintainthequalityofassetsandallocatedprovisionsthatexceedtheCentralBankofIraqinstructions and guidelines requirements in order to contain any potential risks during thisperiod.Theassets’coveragefornon-operatingdebtsreachedupto(61,7%)oftheduecredit.

Fixedassetsscoredanetgrowthof (7.6%)toamountat (29.125)Billion IQD,asa resultofthe Bank’s expansion in branch openings. The Basra branchwas opened in addition to therelocationofAl-Sulaymanyahand Irbilbranchestotheirnewsiteandthecompletionof therenovation of the Tikrit branch,whichwas damaged as a result of the events in hotspots.Furthermore,theBankworkedonthecompletionofKarbalaandAl-Mansourbranches,wheretheiropeningisexpectedtobeinthefirsthalfof2016.TheBankalsoworkedontheexpansionofitsinvestmentsinregardstotheinformationtechnology’sinfrastructure,inadditiontothepurchaseofanumberofautomatedtellermachines.

TheBank’s investmentsalso increasedby(159.8%)toscore(12.788)Billion IQD,duetotheBank’sinvestmentof50%fromtheretainedlegalreservekeptwiththeCentralBankofIraq,intheMinistryofFinancebills,where(6.7)BillionIQDwereinvested.

23

Relative Importance of Financial Position Elements in 2015 Compared with 2014

Dinarsinthousands

Assets 2015Relative

Importance %2014

RelativeImportance%

Growth %

VaultCashandDepositsinotherBanks

339,832,680 75.2% 298,571,943 68.4% 13.8%

Investments-Net 12,787,542 2.8% 4,923,191 1.1% 159.7%

CreditFacilities/Loans,AdvancesandDiscountedBills

12,373,668 2.7% 85,073,521 19.5% -85.5%

Debtors 57,712,038 12.8% 20,624,101 4.7% 179.8%

FixedAssets-Net 29,124,512 6.4% 27,055,755 6.2% 7.6%

Total Assets 451,830,440 100.0% 436,248,512 100.0% 3.6%

Vault Cash and Deposits in other Banks75.2%

Investments- Net2.8%

Debtors12.8%

Fixed Assets- Net6.4%

Credit Facilities/Loans, Advancesand Discounted Bills2.7%

Cash LiquidityVaultcashanddepositsinotherbanksincreased(41.261)BillionIQDtoamountto(339.833)BillionIQDasattheendof2015.Vaultcashanddepositsinotherbankstototaldepositsandcurrentaccountsratiostoodat(293.3%).

Whenanalyzingliquiditydata,itisnoticedthatcashindomesticandforeignbanksrepresented(64.7%) and (44.4%), respectively,which amounts to IQD (158.611) and (150.764) Billionrespectively,asresultoftheBankchangingitsinvestmentspoliciesandexpandingitsfinancingoperationsabroad.Furthermore,vaultcashrepresented(6.7%)andprimaryreserveswiththeCentralBankrepresented(2.3%).

24

Dinarsinthousands

Cash Type 2015 Relative Importance % 2014 Growth %

VaultCash 22,743,668 6.7% 22,172,915 7.4%

PrimaryReserveswiththeCentralBank

7,713,925 2.3% 16,255,568 5.4%

CashinDomesticBanks 158,610,987 46.7% 188,647,328 63.2%

CashinForeignBanks 150,764,101 44.4% 71,496,132 23.9%

Total 339,832,680 100.0% 298,571,943 100.0%

IncludingChequesandTransfers

Vault Cash 6.7%

Primary Reserves with the Central Bank2.3%

Cash in Domestic Banks46.7%

Cash in Foreign Banks44.4%

InvestmentsThe Bank’s investments increased to reach (12.788) Billion IQD in the end of this year, incomparison to (4.923) Billion IQD in 2014. Themain reason for this increase is the Bank’sinvestmentintheTreasurybills,inadditiontoenhancingtheinvestmentintheIraqiCompanyfor Financing SME’s. The Bank’s share increased from (19.8%) to (24%). The chart belowdemonstratestheseinvestments.

CompanyBanks

contribution % Share cost

Number of Shares

Purchase Cost

IraqiCompanyforBankGuarantees

14.2% 1 1,121,424,000 1,146,337,751

ErbilStockExchange 2.5% 1 250,000,000 250,000,000

IraqisCompanyforFinancingSMEs(ICF-SME)

24.2% 1.23 3,986,578.878 4,890.319,523

AmwalforElectronicBankingServices

33,3% 1 60,000,000 60,000,000

Total 6,346,657,274

25

Credit Facilities

a. Direct Facilities (Cash Credit)Credit facilities(cashcredit)decreasedby(72.7)Billion IQD in2015,withthepercentageof(85.5%),toscore(12.374)BillionIQD.TheBankadoptedaconservativecredentialpolicy,duetothemarket’srisksandinordertomaintainthequalityofthecreditportfolio,aswellastherecoveryofpast-dueloans.

Thecollectionsfromcostumersamountedto(38)BillionIQD,mostofwhichareinactivedebts.The loansofhotspots’brancheswere classifiedunder thenon-operatingdebts. Thegrantedloansformed(98.7%)fromthetotalcredit,wherethecurrentaccountsreceivablerepresented(0.09%)andemployeeadvancesrepresented(0.04%)oftotalcredit.

DinarsinThousands

Total Direct Facilities Portfolio by Type of Facility

2015Relative

Importance %2014

Relative Importance %

IssuedLoans 12,210,791 98.7% 74,920,729 88.1%

A-LongTermLoans 0 0.0% 0 0.0%

B-ShortTermLoans 12,210,791 98.7% 74,920,729 88.1%

OverdraftAccounts 109,601 0.9% 10,051,238 11.8%

EmployeeAdvances 53,276 0.4% 101,555 0.1%

MiscellaneousPersonalAdvances 0 0.0% 0 0.0%

Total 12,373,668 100.0% 85,073,521 100.0%

b. Indirect Facilities (Documentary Credit)DocumentaryCredit(lettersofguaranteeandlettersofcredit)regressed,duetothesuspensionof capital projects in the state budget, which had an impact on the revenues and size ofcorporates’operationsby(13.25%)scoring(27.503)BillionIQD,afterdeductinginsurancesintheendof2015,asshowninthefinancialstatement’sillustrationsbelow.

DinarsinThousands

Statement

Balance on 31/12/2014

Total Transactions in 2015

Paid Transactions in 2015

Balance on 31/12/2015

No. Amount No. Amount No. Amount No. Amount

IssuedLettersofGuarantee

500 31,704 434 13,299 680 17,500 254 27,503

LettersofCredit 7 74,879 14 308,359 13 233,740 8 260

OutgoingTransfers 183 1,660,257 487 2,181,505 487 2,181,505 - -

26

Owner’s EquityTheowner’sequityoftheBank’sshareholdersroseto(270.190)BillionIQDwithanincreaseof(0.916)Billion,thatamountsto(0.34%),wheretherequiredreservesincreasedby(539.3)MillionIQDtoreach(5.553)BillionIQD.TheBoardofDirectorsdecidedtorecommendtotheGeneralAssemblytoretainthisyear’sprofitsfortheupcomingyears.

Capital Adequacy TheBank’scapitaladequacyratioscored(194%) incomparisonwith lastyear’s(140%), thisexceedstheinternationalstandards,representedbyBASELcommitteeandtheCentralBankofIraq’srequirementswhichare12%and8%respectively.

DinarsinThousands

2015Relative

Importance %2014

Relative Importance %

Growth %

DepositsandCurrentAccounts

120,776,425 26.7% 109,506,382 25.1% 10.3%

Provisions 35,229,686 7.8% 26,834,814 6.2% 30.8%

Creditors 18,943,173 4.2% 26,199,640 6.0% -27.7%

PaidupCapital 250,000,000 55.3% 250,000,000 57.3% 0.0%

Reserves 20,190,441 4.5% 19,274,276 4.4% 5.4%

ReceivedLong-termLoans/PrivateSector/Companies

6,690,715 1.5% 4,433,400 1.0% 50.9%

Total Liabilities and Owner's Equity

451,830,440 100.0% 436,248,512 100.0% 3.6%

Deposits and Current Accounts26.7%

Provisions7.8%

Creditors4.2%

Paid up Capital55.3%

Reserves4.5%

Received Long-term Loans /Private Sector / Companies1.5%

27

Deposits and Current AccountsDeposits (deposits and current accounts)with the Bank amounted to (120,776) Billion IQDby the end of 2015, scoring a growth of (31.7%). Deposits in local currency amounted atIQD(96,612)billion,representing(80%)oftotaldeposits,whiledeposits inforeigncurrencyamounted to (24,165) Billion IQD, comprising (20%) of total deposits. Deposits and CurrentAccountsrepresented(26.8%)oftotalliabilities.Depositsaredetailedasfollows:

A- Deposits in Iraqi CurrencyCurrentaccountsaccountedfor(83.8%),savingsdepositsaccountedfor(8.7%),fixeddepositsaccounted for (5.4%), insurance accounted for (1.9%), and internal transfers and chequesaccountedfor(0.2%)oftotallocalcurrencydeposits.

B- Deposits in Foreign CurrencyCurrent accounts accounted for (42%), savings deposit accounted for (15%), fixed depositsaccountedfor(10%)andinsuranceaccountedfor(33%)oftotalforeigncurrencydeposits.

Provisions BalanceTheBankcontinues to followaclearstrategy to reserveagainstanyexpected losses,and takesimpairmentallowanceforinactiveloansindividually,inadditiontotheportfolio,inthresholdsthatexceedtherequirementsoftheCentralBankofIraqandtherecommendationsoftheBank’sauditorwiththeviewofempoweringitsfinancialposition.Theratioofthecreditrisksprovisions’coveragetotheinactivefacilitiesratioscored(61.7%)afterthedeductionofsuspendedinterests,knowingthattheprovisionsofthehotspots’branchesaretakenonacourseof10years.AsaresultoftheBank’sprecautionarystrategy, theBanktookaprovisionequalingto(50%)offinesthatwere imposedonitasaresultofcustomers’failuretoexhibitduedocumentation(customdeclaration).TheBankcontinuescorrespondingand followingupwith theCentralBankof Iraq, togeta clarification inregardstothesefines,andtheBankmaintainsitsrightinfollowingupwithcustomersfollowingtheappropriatelegalroutes,afterthosecustomersareidentifiedbytheCentralBankofIraq.

Asforthesundryprovisions,theBanktookprovisionsamountingto(206)MillionIQD,withthepercentageof(32.6%)fromthetotalofcashbalancesinhotspots,aspreservationagainstanypotentiallosses,providedthattherestoftheseamountsmustbecoveredwithprovisionsthatreachcoverageof100%in2016.Inregardstotaxprovisions,theBankexhibiteditscompliancewithtaxregulationsinIraq,whereitobtainedtaxdischargefortheyear2014andclosedallitstaxaccounts.

Dinarsinbillions

Account 2015 2014 Change

CashCreditRisksProvisions 23,512,522 18,084,714 30.0%

DocumentaryCreditRisksProvisions 2,295,273 5,022,145 -54.3%

SundryProvisions 5,768,540 - 100.0%

TaxProvisions 3,653,251 3,727,955 -5.3%

Total 35,229,686 26,834,814 30.8%

28

Income StatementTheBank’snet incomebefore tax increasedby (7.9%) in the sumof (1,058)Billion IQD, toreached(14,425)BillionIQDincomparisonwithlastyear’s(13.367)BillionIQD.TheBankscored(5.8%)netprofitbeforetaxfromthecapital,whichwasdistributedafterdeductingtheincometaxas(3,518)Billion IQD incometax,making thenet incomeafter tax(10.907)Billion IQD,representing(4.4%)ofthepaidupcapital.

Themainreasonfortheincreaseofprofits,istheincreaseintheBank’srevenueswith(1.543.182)Billion IQD,withan increaseof (4.7%)comparingwith lastyear.Theexpenses increasedby(2.5%)fromlastyearasaresultofallocatingcashanddocumentarycreditprovisionsthatworth(2.7)BillionIQDinadditiontoa(5.8)BillionIQDasmiscellaneousprovisions,whichreducedthesizeofexpectedprofitsimmensely,despiteofthat,theprofitsexceededlastyear’s.

RevenuesTheBank’srevenuesgrewtoIQD(34,252)BillionasofDecember31,2015,comparedtoIQD(32,709)BillionIQDbytheendof2014;scoringagrowthof(4.5%).RevenuesfrombankingoperationswerethegreatestastheyamountedatIQD(32.705)BillionIQD,comprising(95.48%)oftotalrevenues,asexplainedinthetableandchartbelow.

DinarsinThousands

Type of Revenue 2015Contribution

Rate2014

Contribution Rate

InvestmentRevenues 26,244 0.1% 203,396 0.62%

BankingOperationsRevenues 32,705,203 95.5% 32,416,711 99.11%

ServiceActivitiesRevenues 504,970 1.5% 72,443 0.22%

OtherRevenues 1,015,990 3% 16,677 0.05%

Total 34,252,407 100.00% 32,709,227 100.0%

Investment Revenues0.1%

Banking Operations Revenues95.5%

Service Activities Revenues1.5%

Other Revenues3%

29

ExpensesIn2015,expensesgrewby(2.5%),amountingto(19,828)BillionIQD,comparedto(19.343)BillionIQDin2014.Thisgrowthwasmainlyattributedtotheincreaseinotherexpenses,where50%oftheimposedamountsbytheCentralBankofIraqwereallocatedasprovisionstofaceanyrepercussionsthatwillaffecttheBankandtocovertheexpectedcash losses inthehotareasbranches.Theadministrativeexpensescamesecondaftertheprovisionsexpenses,wheretheyincreasedtoreach(7,904)BillionIQDincomparisonwith(4,916)BillionIQDbytheendof2014.

On theotherhand,wefind that thebankoperations’expensesdeclined to (3,595),mainlybecauseofthereductionincreditprovisions,whereitdecreasedfrom(11,250)BillionIQDto(2,7)BillionIQDasaresultoftheBank’sconstantfollowupofbaddebts,whichinturnreducedthesizeoftheseprovisions.

Dinarsinthousands

Type of Expenses 2015Contribution

Rate2014

Investment Rate

Contribution Rate

BankingOperationsExpenses

3,595,276 18.3% 12,257,754 63.4% -70.7%

Depreciations 625,669 3.1% 404,557 2.1% 50.6%

AdministrativeExpenses

7,904,624 40.2% 6,184,608 32.0% 27.8%

TransferableExpenditure

405,107 1.2% 487,763 2.5% -49.7%

OtherExpenses 7,296,835 37.2% 7,961 0.0% 91762.9%

Total 19,827,511 100.00% 19,342,643 100% 1.7%

Banking Operations Expenses18.3%

Depreciations3.1%

Administrative Expenses40.2%

Transferable Expenditure1.2%

Other Expenses37.2 %

30

Administrative Expenses Table

Dinarsinbillions

AdministrativeExpenses 2015InvestmentRate

2014InvestmentRate

SalariesandWages(IncludingSocialSecurity)

4,583,809 58.0% 3,583,525 57.9%

GoodSupplies 741,041 5.2% 301,102 4.9%

ServiceSupplies 2,910,398 36.8% 2,299,982 37.2%

Total 7,904,624 100.00% 6,184,608 100.0%

Theabovefiguresshowthattheincreaseinexpensesresultfromincreasingsalariesandwages,this isattributed to the recruitmentofanumberofbankingcompetencies inbothArabandinternationalbankstomanagetheBank.Noting,thatthenumberoftheBank’semployeesandworkersis208,includingconsultants.

Main Financial Indicators of the Bank’s Activity 2006 – 2015

Year CapitalTotal

AssetsDeposits Investment

Cash Credit

Shareholders Equity

Net Profit

Number of Branches

Baghdad Provinces

2006 25 30,881 4,718 0.400 2,596 25,859 1,011 1 0

2007 25 79,699 4,658 0.505 4,318 31,258 5,006 1 2

2008 50 161,114 94,927 113,505 1,978 59,561 7,888 1 3

2009 57.5 160,435 86,055 103,748 3,128 69,903 9,254 1 3

2010 66.7 139,371 55,265 56,879 16,372 76,561 6,896 1 3

2011 66.7 169,295 69,753 3,767 43,932 84,608 7,510 1 3

2012 150 267,893 71,553 112,608 50,698 170,524 15,792 2 3

2013 210 355,83 83,164 12,608 96,974 230,925 14,968 2 5

2014 250 436,249 109,506 4,923 85,073 269,274 9,655 2 5

2015 250 451,830 120,766 12,788 12,374 270,190 10,785 2 6

31

Net Profit after tax

Cash Credit

2013

2013

2014

2014

2015

2015

0

0

5

20

10

40

15

60

100

20

80

120

2012

2012

2011

2011

2010

2010

2009

2009

2008

2008

2007

2007

2006

2006

1.011

2.596

5.0067.888

4.318

9.254

1.978 3.128

6.896

16.372

7.51

43.93250.698

16.623

96.97485.073

15.756

9.655

10.785

12.374

Financial Statementsand Auditor’s Report

Auditor’s ReportFinancial Position Statement 2015Income StatementStatement of Changes in Owner’s EquityCash Flow Statement

34

No.16/1Date:5/6/2016

To: Messrs/ General Assembly Members, Ashur International Bank for Investment (P.S.C), Esq.

Auditors ReportFor the year ending 31 December, 2015

WehaveauditedthebalancesheetofAshurInternationalBankforInvestmentasof31December,2015,andtherelatedbalancesheet,distribution,cashflowstatement,attachmentsfrom(1)to(19)andtherelatedclarifications,andtheadministration’sannualreportpreparedinaccordancewiththeprovisionsofCompaniesLawNo. (21)of theyear1997asamendedand the regulationsand instructions issuedpursuantthereto.

Management ResponsibilityManagement is responsible for the preparation and fair presentation of these financial statements inaccordancewiththelocalaccountingstandardsandrules,inadditiontodesigningandimplementinganinternalcontrolsystemrelevanttopreparinganddisclosingfinancialstatementsfairlyandwithnomaterialmisstatement,whetherinerrorormanipulation.Theresponsibilityalsoincludeschoosingandimplementingtheappropriateaccountingpoliciesanduseofappropriateaccountingestimates.

Auditor’s ResponsibilityOurresponsibilityistoexpressourimpartialopiniononthefinancialstatementsmadeavailabletousbasedonnationalandinternationalaccountingguidelinesandstandards.Thosestandardsrequirethatweplanand perform the audit to obtain reasonable assurance aboutwhether such statements are free frommaterialmisstatement.Theauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatementsandclosingaccountsoftheyear2015.Anauditalsoincludesevaluating the appropriateness of accounting policies used and our belief that our audit provides areasonablebasisforouropinion.

Wehavethefollowingclarificationsandremarks:1. Through our review to the accounting records and the nature of the banking transactions, wedid not notice any indicators of transactions relevant tomoney laundering or that contributed toterrorismfinancing.

2. Vaultcashinforeigncurrencieswasevaluatedon31/12/2015,inthebasisof1USD-1182IQDrate.3. Foreignbankscashaccountbalancerepresented56%ofthecapitalanddueprovisionsinthedateofpreparingthebalancesheet.

4. Capitaltoriskadequacyratiowas194%.5. Someevidenceforforeignbanksaccountbalanceswerenotobtainedalbeitmanagement’sdemandand frequent reminders;we therefore depended on SWIFT receipts received from such banks asevidenceforconsistencywiththerecordson31/12/2015.

Auditor’s ReportTo Ashur International Bank for Investment (LLC) Shareholders

35

6. Bank’saccountingbooksconsistswithbookkeepingrules,andinouropinionitrecordsalltheassets,accountreceivables,resources,andexpensesoftheBankintherelevantfiscalyear.

7. Cashassetsinventorywasdulyandsoundlymadebythemanagementunderourobservation(cashinventoryinmainbranch),fixedandstoredassetsinventory weremadebythemanagementasperthestatementsprovidedtous.

8. Cashcreditriskprovisionexpenseandcontractualobligationsprovisionexpensewasmadeat(1,392and1,308)MillionIQDrespectivelyduringtheyearinquestion,thisconformstotherequirementsoftheCentralBankofIraq’sguidelines.

9. Customs declarations fines on auctions transfers of Bank’s customers for years 2013 and 2014amountedat13,349Million IQD, theywere___on2015and2016respectivelyat50%eachyear,theBankpreservesitsrightinpursuinglegalproceedingsuponbeingprovidedwiththenamesofbreachingcustomers.

10. FixedassetsforNinevehandTikritbrancheswerestrokedoff,acashallocationforNinevehbranchwascreditedinthesumof(206)MillionIQDduringtheyear2015.

11. Internalcontrolsectionreportwasreviewed;wedidnotfindanyirregularities.12. ThemanagementreportisinlinewiththeCompaniesLawNo.21oftheYear1997asamended.

OpinionTakingintoconsiderationtheclarificationsandremarksprovidedinourreport,inouropinion,thefinancialstatementsandthemanagementreportattachedtheretoconformwiththerecords,areinlinewiththelegalrequirements,and,insofarasitcontainperformanceindicators,presentfairlythefinancialpositionoftheBankasofDecember31,2015,andtheresultsofitsoperationsanditscashflowsfortheyearthenended.

With All Due Respect

Aziz Jafar HasanChartered Accountant and Auditor

36 Financial Position Statement

Statement A

Ashur International Bank (Private Shareholding Company) Baghdad - IraqIQD (thousands)

December 31

Chart of Accounts Ref.

Assets Note 2015 2014

18 CashandBalanceswithBanks 1 339,832,680 298,571,943

15 Investments-Net 2 12,787,542 4,923,191

14 LoansandAdvances 3 12,373,668 85,073,521

16 Debtors 4 57,712,038 20,624,101

TotalCurrentAssets 422,705,928 409,192,757

11 FixedAssets–Net 5 14,585,829 7,454,316

12 ProjectsunderExecution 5 14,538,683 19,601,438

TotalFixedAssets 29,124,512 27,055,755

TotalAssets 451,830,440 436,248,512

Liabilities and Shareholders Equity

Chart of Accounts Ref.

Liabilities EntryDecember 31

2015 2014

25 CurrentAccountsandDeposits 7 120,776,425 109,506,382

22 Provisions 8-9 35,229,686 26,834,814

22-26 Creditors 11 18,943,173 26,199,640

24 GrantedLoans 10 6,690,715 4,433,400

TotalCurrentLiabilities 181,639,999 166,974,236

Shareholders Equity

21 PaidupCapital C 250,000,000 250,000,000

212-216 Reserves C 20,190,441 19,274,276

TotalShareholdersEquity 270,190,441 269,274,276

TotalLiabilitiesandShareholdersEquity 451,830,440 436,248,512

Allnotesfrom(1)to(19)areconsideredpartofthestatementsandmustbereadinconjunctionwiththestatements

37Off Balance Sheet Items

Ashur International Bank (Private Shareholding Company) Baghdad - IraqIQD (thousands)

December 31

Chart of Accounts Ref.

Assets Note 2015 2014

19Customers’ObligationsTowardPaidBankingTransactions(aftertheDeductionofInsurances)

6 41,536,712 118,497,833

Chart of Accounts Ref.

Liabilities NoteDecember 31

2015 2014

29Bank’sObligationsTowardPaidBanking

Transactions(aftertheDeductionofInsurances)6 41,536,712 118,497,833

On behalf of Ashur International Bank for Investment

Accountant CFO Managing Director Chairman of the Board of Directors

Nazhan Salem Daoud Ahmad Tawfiq Al Qawasmi Adnan Kanan Al-Jalabi Wadee Nouri Al-Handal

Pursuant to Resolution No. (16/1) dated 5/6/2016

Certified AccountantAziz Jafar Hasan

Auditor

38 Income Statement

Statement B

Ashur International Bank (Private Shareholding Company) Baghdad – IraqIQD (thousands)

December 31

Chart of Accounts Ref.

Statement Note 2015 2014

43 ServicesRevenues 12 504,970 72,443

44 BankingOperationsRevenues 13 32,705,203 32,416,711

46 InvestmentRevenues 14 26,244 203,396

CurrentActivitiesRevenues 33,236,417 32,692,550

34 BankingOperationsExpenses 15 3,595,276 12,257,754

31-33 AdministrativeExpenses 16 7,904,624 6,184,608

37 DepreciationsandAmortization 5 625,669 404,557

CurrentActivitiesExpenses 12,125,569 18,846,919

CurrentActivitiesSurplus 21,110,848 13,845,631

49 OtherRevenues 17 1,015,990 16,677

38 TransferableExpenditure 18 405,107 487,763

39 OtherExpenses 19 7,296,835 7,961

ProfitBeforeTax 14,424,896 13,366,584

Distributedasfollows:

TaxProvisions 3,639,568 3,711,895

StatutoryReserve5% 539,266 482,734

RetainedEarnings(AccumulatedSurplus) 10,246,062 9,171,955

Allnotesfrom(1)to(19)areconsideredpartofthestatementsandmustbereadinconjunctionwiththestatements

39Statement of Changes in Owner’s Equity

Statement C

Ashur International Bank (Private Shareholding Company) Baghdad – Iraq

StatementPaid up Capital

Reserves (thousands) Total Owner’s Equity

(thousands)Capital Reserve

General Reserves

Miscellaneous Reserves

Accumulated Surplus

Total Reserves

For the year ending December 31, 2015

ChartofAccountsRef. 211 212 213 214 217

Balanceasof1/1/2015 250,000,000 5,013,707 1,516,960 2,810,201 9,933,409 19,274,276 269,274,276

AdditionsfromIncomeStatement

- 539,266 - - 10,246,062 10,785,228 10,785,328

Deductionsduringtheyear

- - - - -9,869,164 -9,869,164 -9,869,164

YearEndBalance 250,000,000 5,552,973 1,516,960 2,810,201 10,310,037 20,190,441 270,190,441

For the Year Ending December 31, 2014

BalanceasofJanuary1,2014

210,000,000 4,530,972 6,276 582,923 15,805,664 20,925,836 230,925,836

SettlementsduringtheYear

40,000,000 - 1,510,684 2,367,727 - 3,878,411 43,878,411

AdditionsfromIncomeStatement

- 482,734 - - 9,171,955 9,654,689 9,654,689

DeductionsduringtheYear - - - -140,449 15,044,210 15,184,660 15,184,660

YearEndBalance 250,000,000 5,013,707 1,516,960 2,810,201 9,933,409 19,274,276 269,274,276

AspertheGeneralAssemblymeetingheldon12/7/2015,itwasresolvedtodistribute(3.9%)individends,amountingat(9.75)BillionIraqiDinars.SpecialdeductionsinaccruedsurplusareresultedfromthetaxsettlementwiththeGeneralTaxAuthority.Paidtaxwas(119,164)MillionIQDinexcessoftheprovisionmadefortheyear2014.

AspertheGeneralAssemblymeetingheldon24/12/2013,itwasresolvedtoincreasetheBank’scapitaltoamounttoIQD(250)billioninaccordancewiththeCentralBank’sinstructionsthroughissuingnewsharestothevalueofIQD(40)billionpursuanttotheprovisionsofArticle55/FirstoftheCompaniesLaw.IncreaseprocesswasconcludedinQ1,2014.

Allnotesfrom(1)to(19)areconsideredpartofthestatementsandmustbereadinconjunctionwiththestatements

40 Cash Flow Statement

Statement D

Ashur International Bank (Private Shareholding Company) Baghdad – Iraq IQD (thousands)

Statement Note December 31

Cash Flow from Operational Activities 2015 2014

ProfitbeforeTax–StatementB B 14,424,896 13,366,584

Non-cashItems

DepreciationandAmortization 5 625,669 319,198

ContractualandCashObligationsRisksProvision 8 2,700,936 11,250,000

DecreaseinInvestmentValueProvision 2 - 259,115

Total Non-cash Items 3,326,605 11,828,313

Profit after Adding and Deducting Non-cash Items 17,751,501 25,194,897

Cash Flow from Operating Activities

Increase(Decline)inDebtors’Balance 4 -37,087,937 -13,990,248

DeclineinCashCreditBalance(LoansandAdvances) 3 72,699,853 11,900,880

IncreaseinCurrentandDepositAccountBalances 7 11,270,043 26,342,447

Decline(Increase)inCreditors'Balance 11 -7,256,466 1,137,731

Decline(Increase)inProvisionsBalance - 2,054,368 -3,414,777

Net Cash Flow from Operating Activities 59,431,362 47,170,930

Cash Flow from Investment Activities

Increase(Decrease)inInvestments 2 -7,864,351 7,425,226

NetIncreaseinFixedAssets 5 -7,757,181 -305,453

Decline(Increase)inProjectsunderExecution 5 5,062,755 -2,790,828

Net Cash Flow from Investment Activities -10,558,777 4,328,945

Cash Flow from Financing Activities

IncreaseinCapital C - 40,000,000

ChangeinReserves C -119,163 -11,306,248

Dividendsdistributedduringtheyear C -9,750,000 -

ChangeinLong-TermLoans 10 2,257,315 -5,311

Net Cash Flow from Financing Activities -7,611,848 28,688,441

Net Cash Flow 41,260,737 80,188,316

cashandcashequivalentsatthebeginningoftheyear 298,571,943 218,383,627

cashandcashequivalentsbalanceasofDecember31,2014 1 339,832,680 298,571,943

Allnotesfrom(1)to(19)areconsideredpartofthestatementsandmustbereadinconjunctionwiththestatements

41Financial Statements’ Notes and Tables

1. General Information• AshurInternationalBankwasestablishedasaprivateshareholdingcompanyinBaghdad,IraqwithanominalcapitalofIQD(25)billionandwithanominalvalueofonedinarpershare,asperCommercialRegisterNo.M.Sh./25812,datedApril25,2005,issuedbyIraqRegistrarofCompanies.TheBankwasgrantedabankinglicensefromtheCentralBankpursuanttoLetterNo.9/3/2627onSeptember22,2005.ItstartedtooperatethroughitsmainbranchonJanuary8,2006.PaidupcapitalwasincreasedtoIQD250billionwithanominalsharevalueofonedinarpershare.

2. Main Accounting Policies • TheBankadoptedcurrentaccountingprinciples,policiesandstandardsandthenormsofthebankingsector, inaccordancewiththeprovisionsofCompaniesLawNo.21oftheyear1997asamended,BankingLawNo.94of2004andtheCentralBankofIraq’sinstructionsandregulations,inadditiontoapplyingtheUniformAccountingSystemforbanksandinsurancecompaniesinbookkeepingandthepreparationoffinancialstatements.

• TheconsolidatedfinancialstatementsarepresentedinIQD,whichisthemaincurrencyoftheBank.• Sinceitsestablishment,theBankadoptedaccrualaccountingasthebasisofitsaccountingpolicies.

Credit FacilitiesProvisionforCreditfacilitiesareallocatedif itbecomesapparentbasedonobjectiveevidencethattheBank cannot retrieve the due amount.When the amount can be estimated, the provision amount isreportedintheIncomeStatement,aspertheratiossetbytheguidelinesissuedbytheCentralBank.

Property and EquipmentThecostofpropertyandequipmentisshownafterdeductingaccumulateddepreciation.Thedepreciationofpropertyandequipmentisdepreciatedusingthestraightlinemethodatthefollowingrates:• FixedAssets20%• Realestate2%andLand0%

Foreign CurrencyForeignexchangerateisestimatedat(1182)IQDtoUSD,(1294,526)IQDtoEUR,(301,34)IQDtoAED,(379,99)IQDtoTRLaspertheCentralBank’sbulletinissuedonDecember31,2015.

Income TaxTheamountof taxpayable iscalculatedbasedontaxableprofits reported in thefinancialstatements.Incometaxrateis(15%)accordingtotheIraqiLaw.

42 II

1- Vault Cash and Deposits in Other BanksDinarsinthousands

Chart of Accounts Ref. Statement 2015 2014

181 VaultCash 22,743,668 22,172,915

183 DepositsinLocalBanks 138,655,702 188,647,328

184 LegalDepositsintheCentralBank 7,713,925 16,255,568

185 ChequesandTransfers 19,955,284 -

187 DepositsinForeignBanks 150,764,101 71,496,132

Total 339,832,680 298,571,943

TheabovebalanceincludestheBank’saccountsbalanceswithcentralbanksinKurdistan,amountingat(10,662)BillionIQD,suchbalancesmaynotbeusedinoperationalactivitiesduetolimitationsinthetransfersthereof.

2- Financial Investments

Dinarsinthousands

Chart of Accounts Ref. Statement 2015 2014

1526 LongTermFinancialInvestments 6,346,657 5,182,306

2251 Long-TermInvestmentsProvision (259,115) (259,115)

1582 LongTermInvestment/IraqiGovernmentBonds 6,700,000 -

Total Investments- Net 12,787,542 4,923,191

ThetablebelowshowstheBank’slongterminvestmentsinsharesofIraqishareholdingcompanieswhichamountto(6,087,542)thousandIQD,asfollows:

Company Number of Shares Purchase Cost

IraqiCompanyforBankGuarantees 1,121,424,000 1,146,337,751

ErbilStockExchange 250,000,000 250,000,000

IraqisCompanyforFinancingSMEs(ICF-SME) 3,986,578,878 4,890,319,523

AmwalCompany 60,000,000 60,000,000

Total 6,346,657,274

43

DetailedStatem

entofLongTermInvestm

entinHybridandPrivateSectorasin31D

ecember2015

No.

Company N

ame

No. of Shares

Invested A

mount

Company

CapitalShare %

Share Cost

Market Value

Profit or LossShareValue

Decline

Provision

Net

Investment

ValueLongTerm

Investment/PrivateSector/Com

paniesnotregisteredinIraqiStockMarket

1IraqisCom

panyforFinancingSMEs

(ICF-SME)

3,986,578,8784,890,319,523

16,464,000,00024.2%

1.233,986,578,878

-903,740,645-186,298,425

4,704,021,098

2IraqiCom

panyforBank

Guarantees

1,121,424,0001,146,337,751

7,877,141,00014.2%

1.021,121,424,000

-24,913,751-57,316,888

1,089,020,863

3ErbilStockExchange

250,000,000250,000,000

10,000,000,0002.5%

1.00250,000,000

--12,500,000

237,500,000

5AmwalCom

panyforE-banking60,000,000

60,000,000180,000,000

3.33%1.00

60,000,000-

-3,000,00057,000,000

Total5,418,002,878

6,346,657,2745,418,002,878

-928,654,396-259,115,313

6,087,541,961

DetailedStatem

entofLongTermInvestm

entsinHybridandPrivateSectorsasin31D

ecember,2014

No.

Company N

ame

No. of Shares

Invested A

mount

Company

CapitalShare %

Share Cost

Market Value

Profit or LossShareValue

Decline

Provision

Net

Investment

ValueLongTerm

Investment/PrivateSector/Com

paniesnotregisteredinIraqiStockMarket

1IraqisCom

panyforFinancingSMEs

(ICF-SME)

3,288,708,5003,625,968,500

16,464,000,00019.98%

1.103,288,708,500

-337,260,000-181,298,425

3,444,670,075

2IraqiCom

panyforBankG

uarantees1,121,424,000

1,146,337,7517,877,141,000

14.24%1.02

1,121,424,000-24,913,751

-57,316,8881,089,020,863

3ErbilStockExchange

250,000,000250,000,000

10,000,000,0002.50%

1.00250,000,000

--12,500,000

237,500,000

4IraqiB

anksUnionCom

pany100,000,000

100,000,0001,300,000,000

7.69%1.00

100,000,000-

-5,000,00095,000,000

5AmwalCom

panyforE-banking60,000,000

60,000,000180,000,000

33,33%1.00

60,000,000-

-3,000,00057,000.000

Total4,820,132,500

5,182,306,2514,820,132,500

-362,173,751-259,115,313

4,923,190,938

44 3- Cash Credit (Direct Credit Facilities) Dinarsinthousands

Chart of Accounts Ref. Statement 2015 2014

1427 ShortTermLoans/PrivateSectors/Individuals 12,210,791 74,920,729

1436 Overdrafts/PrivateSector/CompaniesandNGOs 4,479 828,390

1437 Overdrafts/PrivateSector/Individuals 105,122 9,222,848

1491 EmployeeAdvances 53,276 101,555

Total 12,373,668 85,073,521

CashcreditprovidedabovedoesnotincludenonperformingloansaspertheinstructionsoftheUnifiedAccountingRegulation,nonperforming loanamountedat(56,905)Billion IQDofwhich(30,261)Billion IQDare inhotarea in Iraq,provisionstocreditportfolioandsuspendedinterestvolumeamountedat(6,268)BillionIQD.

4. Debtors’ StatementDinarsinthousands

Chart of Accounts Ref. Statement 2015 2014

161 CurrentActivityDebtors 0 0

163 MutualAccountsDebtors 0 0

165 Non-CurrentActivityDebtors 0 0

166 MiscellaneousAccountsReceivable 794,242 2,912,504

1661 SecurityPayments 6,566 622,338

1662 DueRevenues 86,528 1,700,622

1663 PrepaidExpenses 118,363 94,446

1665 CashDifferences 50,000 4,000

1666 LegalExpenses 532,785 491,099

167 Advances 13,143 12,995

169 OtherDebitAccounts 56,904,653 17,698,602

1691 Debtors/overdueLoans 56,431,017 17,227,543

1666 PaidLettersofGuaranteeDebtors 473,636 471,059

Total 57,712,038 20,624,101

455 – Fixed Assets and D

epreciation Statement

Fixed Assets

LandB

uildings &

FacilitiesM

achines &

Equipment

Means of

Transporta-tion

Tools & Kits

Furniture &

Office Equip-

ment

Regula-tions and Licenses

deferred Revenue

Expenditure

Investment

ExpensesTotal

Chart of Accounts Ref.

111112

113114

115116

117118

12

Am

ount during YearD

inars in Thousands

Cost

Balanceasof1/1/2015

3,463,7982,976,347

458,543325,362

4,429859,016

-1,302,597

-9,390,092

Additionsduringtheyear

-172,019

549,916185,621

-722,544

180,185609,333

-2,329,719

Transfersfromprojectsunderexecu-

tion2,372,788

3,300,496-

--

--

--

5,673,284

DisposalsduringYear

--190,000

-15,788-145,845

--178,647

--307

--440,776

Balance as of 31/

12/2014

5,836,5866,258,862

992,582365,138

4,4291,402,913

180,1851,911,624

- -16,952,319

Accum

ulatedDepreciationProvision

Depreciation Rate

0%2%

20%•

0%Total

Balanceasof1/1/2015

-

192,620325,508

201,5382,317

480,966732,825

•-

1,935,774

CurrentYearDepreciation

-

123,14543,362

72,5762,112

213,90312,713

157,858-

625,669

Disposals duringtheyear

--20,646

-87,141-

-87,166-

--

-194,953

TransfersduringtheYear-

--

--

-7,7407,740

-

Balancein31/12/2015

-315,765

348,224186,973

-4,429599,963

20,453890,683

-2,366,490

Book Value as of 31/

12/2015

5,836,5865,943,097

644,358178,165

-802,950

159,7321,020,941

-14,585,829

Projects-in-Progress1212,492,907

--

--

--

-2,045,776

14,538,683

Total18,329,493

29,124,512

46 6- Reciprocal Liabilities for Banking Operations StatementDinarsinthousands

Chart of Accounts Ref.

Statement2015Dinars

2014Dinars

192/292 IssuedLettersofGuarantee 32,423,482 31,704,311

1931/2931 LettersofCredit 259,845 75,708,211

2552 SecurityforLettersofGuarantee -4,920,190 -5,776,479

2558 SecurityforIssuedLettersofCredit 0 829,346

Total 27,763,137 100,806,697

1983/2983 CollateralsinReturnofBankingFacilities 13,773,554 17,691,115

199/299 ReciprocalFFFAccountsinNominalValue 21 21,55

Total 41,536,712 118,497,833

7- Current Accounts and Deposits

Dinarsinthousands

Chart of Accounts Ref. Statement 2015 2014

2516 CurrentAccountsPayable/PrivateSector/Companies 63,033,801 55,477,864

2517 CurrentAccountsPayable/PrivateSector/Individuals 32,516,858 25,992,455

25191 CertifiedChecks 112,435 218,762

Total Current Accounts 95,663,094 81,689,081

2521 SavingsAccounts 12,730,870 14,538,062

Total Savings Accounts 12,730,870 14,538,062

2536 FixedandNoticeDepositsPrivateSectors/Companies 4,128,386 3,753,532

2537 FixedandNoticeDeposits/PrivateSectors/Individuals 3,088,443 2,490,503

Total Fixed and Notice Deposits 7.216.829 6.244.035

Total Deposits, Current Accounts and Savings 115,610,793 102,471,178

2551 LettersofCreditInsurances - 829,346

2552 SecuritiesforLetterofGuarantees 4,920,190 5,776,479

Total Insurances 4,920,190 6,605,825

2561 BranchTransfersCashedfromtheBank - -3,964

2562 ChequesC/O 242,016 367,985

2563 ChequesCashedfromtheBank 3,425 -

2569 MobileBankingSettlements - 687

256 Total Internal Transfers and Instruments 245,441 364,708

257 ExternalTransfersandChecks - 64,671

Total Internal and External Transfers 245,441 429,378

Total Deposits and Insurances 120,776,425 109,506,382

478- Provisions

Dinarsinthousands

Chart of Accounts Ref.

StatementOpening

Balance as of 1/1/2015

Additions during theYear

Deductions during theYear

Balance as of 31/12/2014

222 CashCreditRisksProvision 18,084,714 5,478,595 -50,787 23,512,522

224 TaxProvision 3,727,955 3,758,732 -3,833,436 3,653,251

2252 MiscellaneousProvisions 0 5,768,640 0 5,768,540

2254ContractualObligationsRisksProvision

5,022,145 1,308,553 -4,035,425 2,295,273

Total 26,834,814 16,314,520 -7,919,648 35,229,686

9- Tax Provisions

Summary of Accounting Profit Adjustments, Inclusive of Taxable Profit for the Year 2015

Statement 2015

(Surplus)AccordingtoProfitsandLossesinStatementB 14,424,896

Add Non-taxable Expenses

Donations 200,000

RemunerationandFines 15,076

PreviousYearsExpenses 6,922,877

FinancialobligationsRiskProvisions 1,392,383

ContractualObligationsRiskProvision 1,308,553

Total Nontaxable Expenses 9,838,889

Deduct Profit Not Subject to Income Tax

InternalContributionRevenues -

IncidentalRevenues -

Total Non-taxable Revenues 0

Taxable Activities Surplus (Taxable Profits) 24,263,78

IncomeTaxRate 3,639,568

(Surplus)According to Profits and Losses in Statement B 14,424,896

IncomeTaxDeduction 3,639,568

Surplus After Tax 10,785,328

ProvisionDeduction 539,266

Distributable Surplus 10,246,062

IncomeTaxrateis15%forBankspursuanttoIraqiLaw.

48 10- Granted LoansDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

2411 LongTermLoansfromGovernmentalSector 1,000,000 -

2416 LongTermLoansfromPrivateSectors/CompaniesandNGOs 5,690,715 4,433,400

24 Repaid Loans 6,690,715 4,433,400

11- CreditorsDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

2616 Creditors/PrivateSector/Companies 6,704 6,243

2617 Creditors/PrivateSector/Individuals 22,262 101,611

261 Current Activity Creditors 28,966 107,854

263 Reciprocal Debit Accounts 1,244,648 3,048,582

265 Non-Current Activity Creditors 615,560 162,033

2661 PaidInsurances 208,369 44,887

2662 Revenues 8,820,411 18,413,231

26631 DueInterests 81,925 2,724,999

26633 DueAdministrativeExpenses 230,446 94,370

2664 DueSalariesandWages 119,707 130,346

26663 FinancialStampsFees 61,698 475,627

2668 IncreaseinVaultCash 88,506 500

26695 ReceivedAmountsinExchangeofCompanies’Registration 178,682 123,441

26696 DepositsforPurchaseCompanyShares - 150,000

266 Miscellaneous Accounts Payable 9,789,744 22,157,401

2671 DeductionsfromThirdPartyAccounts 54,472 22,152

2672 DeductionsfromNon-ThirdPartyAccounts - 8,206

267 Deductions for Third Party Accounts 54,472 30,358

2677 Accounts Under Settlement 115,359 116,347

268 Dividend Unpaid 661,467 419,475

2695 DeceasedCustomers'BalancesandReimbursements 1,706 1,684

2697 UnclaimedAmounts 163,399 155,905

269 Other Accounts Payable 165,105 157,589

270 SuspendedInterests 6,267,762 -

Creditors Total 18,943,173 26,199,639

4912- Service Activities RevenuesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

437 MiscellaneousServicesRevenues 504,970 72,443

437 Total Service Revenues 504,970 72,443

13- Banking Operations RevenuesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

441 Foreign Currency Revenues 4,613,066 5,062,374

44211 InterestonGrantedLoans 7,071,781 6,640,708

4422 InterestonCurrentAccountsReceivable 1,040,821 1,244,966

44246 InterestonPersonalAdvances - 3,429

442 Internal Loans and Advances Revenues 8,112,602 7,889,103

4431 InternalTransferProcuredCommission 2,726,689 3,017,450

4432 ExternalTransferCommission 13,950,701 11,403,947

443 Transfer Commission 16,677,490 14,421,397

4441 CommissionandTransferofOutgoingLettersofCredit 1,364,293 1,690,594

4443 CommissionandTransferofIncomingLettersofCredit 10,132 106,859

4445 CreditTransferCommission 0 0

444 Letters of Credits and Credit Transfer Revenues 1,374,425 1,797,453

4451 InternalLettersofGuaranteeCommission 1,071,827 2,215,821

445 Letters of Guarantee Commission 1,071,827 2,215,821

4471 CommissionofBillIssuanceandCheck 7,871 104,952

4479 OtherBankingCommissions 768,906 725,488

447 Miscellaneous Banking Commissions 776,777 830,440

4482 RefundableCommunicationExpenses 14,024 28,424

4485 BankingPrintsSales 64,992 171,699

448 Refundable Expenses 79,016 200,123

Total Banking Operations Revenues 32,705,203 32,416,711

50 14- Investment RevenuesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

4621 InterestonTreasuryTransfers 19,457 203,374

4622 InterestonThirdPartyCashDeposits 6,787 -

462 Internal Financial Investments Revenues 26,244 203,374

4631 InterestonExternalCurrentAccountsPayable - 22

463 ExternalFinancialInvestmentsRevenues 22

Total 26,244 203,396

15- Banking Operations ExpensesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

BankingInterestPaid

3421 InterestonSavingsAccounts 322,465 357,198

3422 InterestonFixedDeposits 356,112 351,123

3423 InterestonInternalBorrowing - -

3425 InterestonCurrentAccountsPayable 43 43

342 Total Banking Interests Paid 678,620 708,364

PaidBankingCommissions

343 Paid Banking Commissions 9,263 40,275

3451 InvestmentLossExpenses - 259,115

3453 LocalBankBranchesLossExpenses 206,457 -

3454 ContractualObligationsRisks 1,308,553 -

3457 CashObligationsRiskExpenses 1,392,383 11,250,000

345 Provision Expenses 2,907,393 -

Total 3,595,276 12,257,754

16- Administrative ExpensesDinarsinthousands

Statement No.Chart of Accounts Ref.

Statement 2015 2014

A 31 TotalSalariesandWages 4,583,809 3,583,525

B 32 TotalG&A 410,417 301,102

C 33 TotalServices 2,910,398 2,299,981

Total Administrative Expenses 7,904,624 6,184,608

51A- Salaries and WagesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

3111 Salaries 3,203,087 2,424,237

3112 OvertimeSalaries - 0

3114 IncentivesandBonuses 32,634 149,543

3115 ProfessionalandTechnicalProvisions - 176,151

3116 ReimbursementProvisions - 69,783

3119 Other Provisions 1,106,349 663,301

312 Total Salaries 4,342,070 3,483,015

315 Social Security Contribution 241,739 100,510

31 Total Salaries and Wages 4,583,809 3,583,525

B- General and Administrative ExpensesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

322 FuelandOil 207,968 147,818

3251 SuppliesandTasks 106,168 65,392

3252 Stationary 33,059 27,936

325 Miscellaneous 139,227 93,328

326 Workers' Equipments - 0

327 Water and Electricity 63,222 59,956

32 Total G&A’s 410,417 301,102

52 C- Service ExpensesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

3312 BuildingsandFacilitiesMaintenance 54,321 27,490

3313 EquipmentMaintenance 64,711 17,227

3314 TransportationMaintenance 18,393 15,691

3316 OfficeFurnitureMaintenance 107,305 93,311

331 Maintenance Services 244,730 153,719

323 Services, Research and Consultations 190,359 19,876

3331 Advertising 122,422 113,545

3332 PrintingandPublishing 42,511 111,046

3333 Hospitality 34,682 18,054

3334 Expos 42,903 97,259

3335 Celebrations - -

3336 ConferencesandMeetings 64,604 57,369

333 Publicity, Printing and Hospitality 307,122 397,273

3341 Workers’Transportation 142,121 15,398

3342 GoodsandProductsTransportation 16,202 8,735

3343 TravelandDispatch 111,006 253,952

3344 GeneralCommunication 133,027 111,310

334 Transportation, Dispatch and Communication 402,356 389,359

3352 BuildingsandFacilitiesRent 641,294 444,006

3353 MachinesandEquipmentRent 0 12

3354 TransportationRent 0 0

335 Fixed Assets Rent 641,294 444,018

3361 Subscriptions 70,809 160,866

3363 RemunerationforNonemployeesforProvidedServices 87,804 35,462

3365 LegalServices 75,389 58,321

3366 BankingServices 186,358 144,052

3367 TrainingandRehabilitation 2,201 1,280

336822 AuditingRemuneration 48,000 46,000

336823 ExternalAuditFees 133,105 1,300

3369 OtherServiceExpenses 418,570 377,358

3370 MiscellaneousExpenses 102,301 71,061

336 Miscellaneous Service Expenses 1,124,537 895,700

33 Total Service Expenses 2,910,398 2,299,981

5317- Other RevenuesDinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

492 IncidentalRevenues 185,006 3,972

4921 CurrencyEvaluationDifferenceRevenue 812,139 -

493 CapitalRevenues 18,845 12,705

Other Revenues 1,015,990 16,677

18- Transferable Expenditure Dinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

3831 DonationsforThirdParties 200,000 14,876

3832 RemunerationsandFines 15,076 58,693

3833 Write-offs 0 0

383 Miscellaneous Transferable Expenditures 215,076 73,569

384 Fees and Taxes 190,031 414,100

385 Subsidies 0 94

Transferable Expenditures 405,107 487,763

19. Other Expenses Dinarsinthousands

Chart of Accounts Ref.

Statement 2015 2014

391 PreviousYearsExpenses 6,922,877 0

393 CapitalLosses 374,058 7,961

Other Expenses 7,296,835 7,961

Dividends to Be Paid:TheBoardofDirectorsdecidedtorecommendtotheGeneralAssemblytoretainthisyear’sprofitsfortheupcomingyears.

Additional Data Required by Iraq Securities Commission for the Year 2015

Names of Board of Directors and Executive Management Members

Shares of Major Shareholders

Shares of Board of Directors Members

Shares of Executive Management

Branch Network

General Organizational Chart

56

Additional Data Required by Iraq Securities Commission for the Year 2015

A- Message from the Chairman pp. (6-9)B- Board of Directors Report pp. (10–31)

1. Main Activities Providing comprehensive banking and credit services, accepting all forms of deposits, opening bankaccounts,(demand,savingandtimedepositaccounts),providingfinanceforindividualsandcompanies,providingtradefinanceservices,issuingoutgoingandincominglettersofcredit,issuinglocalandexternallettersofguaranteeforallcustomersindifferenteconomicsectors,providingbankingservices,includinginternalandexternaltransfers,issuingMasterCards,issuingbillsandcertifiedchecks,andprovidingonlinebankingservices.

2. Geographic Locations of the Bank

Branch Address Opening Year

MainBranch Baghdad/OqbahBinNafiSquare 2006

SulaymaniyahBranch KingMahmoudCircularRoad(AlSteenStr.)BesideCityCenterMall 2007

ErbilBranch Erbil/BekhtiariRoad 2015

TikritBranch Tikrit/infrontofTikrit’sQa’mmqamih 2008

RubaieSt.Branch Baghdad/AlRubaieSt.infrontofRihannehPark 2012

NinevehBranch Nineveh/AlZuhoorQuarter,SayidatiAlJamilahCircle 2013

AnkawaBranch Erbil/Ankawa/SaideenSt. 2013

BasraBranch AlJazairStr. 2015

KarbalaBranch AlNaqeebDistrict,EducationSquare 2016

AlMansourBranch AlMansour,14RamadanStr. 2016

57

Mr. Wadee Nouri Al-Handal Chairman of the Board

DateofBirth:29/6/1962MembershipDate:22/9/2005MembershipStatus:Personal

Academic Qualifications• BAinAgriculture,UniversityofBaghdad,Iraq.

Work Experience • Chairman of the Board of Directors of Al HandalInternationalGroup.

• Chairmanof theBoardofDirectorsofAshurBankforInvestment.

Current Memberships at Boards of Other Companies• Chairman of the Management Assembly of theIraqiPrivateBanksLeague.

• ChairmanoftheAdvisoryBoardatICF-SME.• Board Member of the Iraqi National BusinessCouncil.

• FinancingTeamLeader/NationalExpertsTeam.

Mr. Ali Dia Al-HussainiVice-Chairman of the Board

DateofBirth:3/7/1966MembershipDate:1/1/2013MembershipStatus:Personal

Academic Qualifications• BusinessManagementBA–UniversityofBaghdad–1992.

• Specialized certificate from the Bureau for EconomicGrowth,Agriculture,andTrade(EGAT),Washington,USA.

• Specialized certificate from Business GrowthInstitute(BGI),USA.

• SpecializedcertificatefromUSAID.

Work Experience • Vice CEO at Al Handal International Group since1/2013todate.

• Expert inprivatesectordevelopment,commercialandfinancial.

• Specialistindesigningandmanaginginternationaldevelopmentprojectsandeconomicreformexpert.

• EconomicDevelopmentinProvincesProjectDirector–USAID4/2008–12/2012.

• PrivateSectorDevelopmentProjectDirector–USAID7/2004–4/2008.

• ExpertinMSMEIslamicbanking.• Expert in designing and managing developmentprojectstargetingyouthandvulnerablegroups.

• Experience in the following: institutions' financialsystems reform, corporate reform, commercial andlegalreform,internationaltradeandmacroeconomics,supportingcorporateabilitiesandpolicies,internationaleconomic and commercial projects development,economic growth infrastructure, investmentand economic growth in war and conflict zones,macroeconomic policies, private sector development,public economics, reforming the commercial law tosupport thegrowthof theprivate sector, commercialpolicies and privatization, public finance systemsdevelopment,improvingenterprisecompetitivenessinlightoftheinternationalfinancialcrisis,implementationof value chain mechanism and concepts, dialoguebetweenthepublicsectorononehandandtheprivatesectorandbusinessmenoftheother.

3. A- Members of the Board of Directors and Brief Bios

58

Mr. Adnan Kanan Al-Jalabi Board Member - Managing Director

DateofBirth:2/7/1945AppointmentDate:1/2014MembershipDate:10/8/2014MembershipStatus:Personal

Academic Qualifications• BAinPoliticalScience• Specialized Course at theInternational ManagementInstitute,France

• SpecializedCourseat theRoyalManagementInstitute,UK

Work Experience Mr. Adnan Al Jalabi held severalpositionsintheIraqibankingsector,most notably was at the CentralBankofIraq,BankofBaghdadandAshurInternationalBank.Hismostnotablepastpositionsinclude:• Managing Director at AshurInternationalBankforInvestment.

• Managing Director at Bank ofBaghdad.

• OperationsManageratBankofBaghdad.

• Acting Governor at the CentralBankofIraq.

• SeniorManageratCentralBankofIraq.

Current and past memberships at Boards of Other Companies:• MemberoftheBoardofDirectorsof Ashur International Bank forInvestment.

Mr. Abbas Hadi Al-Bayyati Board Member

DateofBirth:1/7/1941AppointmentDate:6/2007MembershipDate:3/3/2008MembershipStatus:Personal

Academic Qualifications• BA, School of Business andEconomics,UniversityofBaghdad,1963.

• SpecializedCourseinBankingatStandardCharteredBank,1980.

• SpecializedCourseinBankingatWorldBank,Granada,2004.

• SpecializedCourseinBankingatBankofGreece,Greece,2005.

Work ExperienceAbbas Al Bayyati held severalpositions at Rafidain Bank, Bankof Baghdad, Commercial Bank,InvestmentBankandArabBank.Hismostnotablepastpositionsinclude:• Managing Director at AshurInternationalBank.

• ManagingDirectoratInvestmentBank.

• Branches’ManageratInvestmentBank.

• Branches’ Manager at RafidainBank.

• Manager of Rafidain Bank -BahrainBranch.

Current and past memberships at Boards of Other Companies:• MemberoftheBoardofDirectorsofInvestmentBank,2005.

• Member of the Board ofDirectors of Bahrain InsuranceCompany,1980-1985.

Mr. Shaker Mahmoud AliBoard Member

DateofBirth:1/7/1962MembershipDate:1/1/2013MembershipStatus:Personal

Work Experience• Managingprivatebusinesses.• Experience in establishing andmanagingprojects.

59

Mr. Atheer Ghassan Hamed Board Member

DateofBirth:13/12/1975MembershipDate:8/1/2006MembershipStatus:Personal

Academic Qualifications• BAinEngineering,UniversityofBaghdad,10/1997.

Work Experience • Managing Director at Amwalfor Electronic Banking Servicessince2008.

• Managing several projects andconsultancyintheprivatesector.

Other • Experienceinprojectmanagementandbusinessdevelopment.

• Experienceindevelopingbankingbusiness.

• Experienceindevelopinge-paymentoperations.

• Experience in treasury andinvestmentservices.

Ms. Bushra Bashir SharifBoard Member

DateofBirth:7/11/1957MembershipDate:2014MembershipStatus:Personal

Academic Qualifications• BA in Physical Education,UniversityofBaghdad,1967.

Work Experience• Experienceinprojectmanagementandbusinessdevelopment.

60

Mr. Saleh Faraj Al-Sharaa’Assistant Managing Director

DateofBirth:1/7/1943AppointmentDate:1/10/2008

Academic Qualifications• BAinAccounting,1968-1969,UniversityofBaghdad.

Work Experience • Auditor, Chartered AccountantKareem Mahfouz Faraj Office,15years.

• Accounting Manager, AL Hudaand Al Thurayah Al ThahabieahCo.,HandalCompanies,15years.

Mr. Nour Nouri Ayed Al-HandalTreasury and Investment Manager

DateofBirth:4/12/1987AppointmentDate:1/1/2012

Academic Qualifications• BA in Business Administration,EuropeanUniversity,2010.

Work Experience • Acting Manager, Treasury andInvestment,9/2014-8/2015.

• Transfers Section ManagerAssistant, Ashur InternationalBank,1/2013-2014.

• Officer,TreasuryandInvestmentSection, Ashur InternationalBank,1/2012–12/2012.

• General Manager, Al Khadra’aCompany for Real EstateDevelopment,1/2009-12/2011.

Mr. Wajeeh Seddeeq Saqf Al-Heit Branches and Individual Banking Services Department Manager

DateofBirth:11/5/1969AppointmentDate:6/4/2014

Academic Qualifications• BAinEconomics,1992,AmericanUniversityofCairo,Egypt.

Work Experience • HeadofChannelsDevelopmentDepartment, Al Etihad Bank,Amman(9/2011-3/2014)

• Consultant Manager, HuronConsultingGroup,Cairo,(3/2009-6/2011)

• Manager,BranchesAdministration,Housing Bank for Trade andFinance, Amman, (7/2008-1/2009).

• Project Manager, Arab BankExpansion Project in ArabRepublic of Egypt, Egypt(1/2007-7/2008).

• Branches and ATM NetworkDevelopmentManager,BankingServices for Individuals Group,TheArabBank,Amman(8/2004-1/2007).

• Branches Network OperationsManager and other positions,HSBC, Amman (1/1994-7/2004).

B- Names and Positions of Executive Management and Brief Bios

61

Mr. Ahmad Tawfiq Al Qawasmi Financial Department Manager

DateofBirth:17/7/1979AppointmentDate:1/12/2013

Academic Qualifications• MA in Banking Management,Hashemite University, Zarqa -Jordan.

• BA in Accounting, HashemiteUniversity,Zarqa-Jordan.

Work Experience• InchargeofStudiesandProductDevelopment, Bank of Jordan,(4/2007-11/2013).

• SMEs Centre Researcher, ArabAcademyforBankingandFinancialSciences(4/2006-4/2007).

• AccountantandAuditor,Khaleefaand Al Rayan for FinancialConsultancy(2002-4/2006).

• Internal Audit OperationsConsultant, Jordan Chamber ofIndustry,(2009-Present).

• Consultantforanumberoflocaland international corporationsandcompanies,(2003-Present).

Mr. Amjad Husni Shehadeh ShadeedHuman and Administrative Resources Department Manager

DateofBirth:25/10/1964AppointmentDate:16/7/2013

Academic Qualifications• BA in Accounting, 2004, SudanUniversity for Science andTechnology.

• Human Resources Diploma,2009,UniversityofCambridge.

• Human Resources ConsultantCertificate,2011,RoyalUniversityforTechnologies.

• MBAstudent,HumanResources,2013,Heriot-WattUniversity.

Work Experience • Al Mashabek Al Daqeeqa Co.,Human and AdministrativeResources Consultant, Emirates,(2012-7/2013).

• Al Houshan Holding Group,Human and AdministrativeResourcesDepartmentManager,(12/2011-12/2012).

• HumanandAdministrativeResourcesDepartment Manager. Middle EastPaymentServices(MasterCard)Ltd,(6-2006-12/2011).

• Collective Services Manager,The Housing Bank for Trade andFinance,Jordan,(5/2008-6/2009)

• Procurement and LogisticServices Supervisor, ExpressTelecommunications Company,Jordan,(2/2004-4/2008)

• Human and AdministrativeResources Manager, HawatmehReadyWearCo.,(7/1989-1/2004)

62

Mr. Rasem Asem Sudqi Al AttariCentral Commercial Services Department Manager

DateofBirth:28/6/1971AppointmentDate:20/10/2013

Academic Qualifications• BA in Business Administration,1990 - 1994, Amman PrivateUniversity,Jordan.

Work Experience • Assistant Manager, CentralCommercialServicesDepartment,BankofJordan,2009.

• Central Commercial ServicesDepartmentSupervisor,BankofJordan,(2005-2009).

• InChargeofForeignDepartment,BankofJordan,(1998-2005).

• WorkexperienceinDocumentaryCreditandLettersofGuaranteeSection,BankofJordan,(1996-1998).

• Trained and worked in varioussections,Bankof Jordan,(1995-1996).

Mr. Emad Ali Abdul Ghani Alwai Computer and Information Department Manager

DateofBirth:16/3/1968AppointmentDate:26/11/2013

Academic Qualifications• MAinEconomy,(1998-2002),BirzietUniversity,Palestine.

• BA in Computer Science, (1991-1995),AmmanUniversity,Jordan.

• HighDiploma,ScientificSection,1986,Palestine.

Work Experience • InformationTechnologyDepartmentManager, Palestine CommercialBank, Palestine, (16/3/2008 -11/11/2013).

• InformationTechnologyAssistantManager,QudsBank-Palestine,(1/3/2005-13/3/2008).

• HeadofInformationTechnologySection, Palestine CommercialBank, Palestine, (1/6/1996 -20/2/2005).

• Mathematics and Computerteacher, Latin Taybeh School,(1/9/1995–31/5/1996).

• ProgrammerandSystemAnalyst,Computer and CommunicationsSystemsCo.-Jordan,(1/2/1995-31/8/1995).

Mr. Motasem Saqf Al-HeitBanking Operations Department Manager

DateofBirth:15/12/1968AppointmentDate:20/10/2013

Academic Qualifications• BA in Administration, 1992,MutahUniversity,Jordan

Work Experience• Programs Initialising andDevelopment Unit Manager,2012-2013

• ProgramsTestingUnitManager,2009-2012

• Operations Engineering&WorkProcedures,2005-2008

• Section Head and otherpositions,1992-2005:1. FacilitiesSection.2. AccountingSection.3. Foreign Currency, Deposits,Purchased.

63

Mr. Rami Hussien Al-MobassatCredit Department Manager

DateofBirth:26/2/1972AppointmentDate:28/10/2014

Academic Qualifications• BA in Accounting, 1994,UniversityofBaghdad,Iraq.

Work Experience• Main Clients Affairs Manager,NationalBankofIraq,Baghdad,(11/2013-10/2014).

• MainClientsAffairsManager,BigCompaniesFacilitiesDepartment,CapitalBankof Jordan,Amman,(4/2011-10/2013).

• Credit Centre Manager, Bankof Jordan, Amman, (3/2007 -7/2010).

• Credit Analyst, Arab Bank,Jordan,(8/1998-2/2007).

• ClientsAffairsOfficer,ArabBank,Jordan,(12/1994-7/1998).

Ms. Alia'a Amer Majeed Al Murad Internal Audit Department Manager.

DateofBirth:20/11/1973AppointmentDate:1/10/2015

Academic Qualifications• BSc. in Mathematics, 1995,Al Mustansieriyah University,Baghdad.

• Risk Management Diploma,Sweden.

Work Experience• AssistantManager,FinanceandInformation Technology, TransIraqBank,2014/2015.

• SettlementsandFinancialAffairsSection Manager, 2007/2014,AshurBank.

• Workedinvarioussections,namelyCustomer Care, Accounting, andFacilities1997/2007, TradeBankofIraq.

64 4- Shares of major shareholders in 2015:

Name Nationality Number of Shares % of Capital

RafidainBank GovernmentalEntity 33,207,908,335 13.28%

WadeeNouriAyed Iraqi 24,985,992,254 9.99%

SamaAlHudaCompanyforCommerceandGeneralContracting

Iraqi 24,980,000,000 9.99%

HardanNouriAyedAhmed Iraqi 24,107,801,259 9.60%

MohammedNouriAyed Iraqi 22,540,102,486 9.01%

WadoudNouriAyed Iraqi 21,435,271,649 8.57%

NourNouriAyed Iraqi 21,400,211,086 8.56%

AyaWadeeNouriAyedAl-Handal Iraqi 19,768,604,982 7.90%

OmarWadeeNouriAyedAl-Handal Iraqi 19,768,604,982 7.90%

5- The Bank and its products and services enjoy no state protection or privileges according to laws and regulations or otherwise.

6- No decisions of government or international organizations have any material impact on the Bank’s activities, products or competitive capacity.

65

7- The organizational chart.

Board of Directors

Credit Facilities & Risks

Comm

ittee Managem

entCorporate G

overnanceCom

mittee

Hum

an ResourcesCom

mittee

LegalD

epartment

Engineering &Real EstateD

epartment

Adm

inistrative &H

uman

Resources Dept.

IT Departm

entFinancial

Departm

entRisks

Departm

entCredit Facilities

Departm

ent

CentralCom

mercial

Services Dept.

Banking

Operations D

ept.Corporate

Banking D

ept.Collection

Departm

entRetail B

ankingD

epartment

Treasury &Investm

ent Dept.

CreditD

ocumentation

Dept.

Internal Audit

Departm

ent

Credit FacilitiesA

udit Unit

Operations

Audit U

nit

IT Audit

Unit

Foreign Currencyand Capital

Markets Unit

FinancialInstitutions U

nitBranches

Support Unit

Direct Selling

Unit

Elite Customers

Unit

ChannelsD

evelopment

Unit

ProductsD

evelopment

Unit

BranchesU

nitB

aghdadBusiness Centre

Baghdad

Collection Unit

SouthCollection U

nit

North

Collection Unit

ErbilBusiness Centre

Basra

Business Centre

Banking

Operations U

nit

CreditExecution U

nit

Retail CreditFacilities U

nitLetters of Credit

Unit

Letters ofG

uarantees Unit

Bills ofCollection U

nit

Work Policies

and ProceduresU

nit

Operations

Design U

nit

Corporate CreditFacilities U

nit

RiskM

anagement

Unit

Compliance &

Anti-M

oneyLaundering U

nit

Accounting

Unit

Finance Unit

Infrastructure &Technical Support

Unit

Systems Support

Unit

Hum

anResources U

nit

Adm

inistrativeResources U

nit

ProjectM

anagement

Unit

Maintenance

Unit

Credit & Bad Debt

Lawsuits Unit

Contracts &Com

mercial

Relations Unit

Chairman of Board

of Directors

Audit Com

mittee

Assistant M

anagingD

irector

Second Assistant

Managing D

irector

Secretariat &Shareholders A

ffairs

Managing D

irector

66 8- Numbers and Qualifications of Employees

A-

Qualification Number

PhD -

MA 6

HigherDiploma 1

BA 134

Diploma 14

HighSchool 22

Other 31

Total 208

Training Courses

Type No. of Courses No. of Beneficiaries

InternalCourses 3 36

ExternalCourses 15 22

Total 18 58

Subject of Course No. of

CoursesNo. of

BeneficiariesVenue

TrainingCourseonFATCA 1 1 Lebanon

TrainingCourseonOrganizationalSkillsandMeetingManagement

1 1 Jordan

ReciprocalAccountsamongbranchescourse 1 1 CentralBankofIraq

CashFlowCalculation 1 3 CentralBankofIraq

QuarterlyBalanceSheetPreparation 1 2 CentralBankofIraq

AntiMoneyLaunderingandKnowYourCustomer 1 1 CentralBankofIraq

OracleDatabase1 1 2 CentralBankofIraq

OracleDatabase2 1 1 CentralBankofIraq

MobilePayment 1 1 CentralBankofIraq

VIPOfficeManagement 1 1 Turkey

AssetsandLiabilitiesManagement 1 2 CentralBankofIraq

ImprovingPaymentMethodsinIraq 1 1 CentralBankofIraq

CreditInformationExchange 1 2 CentralBankofIraq

HRCourse 1 2 PrivateBanksCommittee-Iraq

HRSystem 1 3 Internal

RTGSSystem 1 1 CentralBankofIraq

FundamentalsofBadDebtCollections 2 33 Internal

Total 18 58

67B- Names and job titles of the five highest paid employees

Name Grade

AdnanKananAl-Jalabi ManagingDirector

EmadAliAbdulGhaniAlawi InformationTechnologyDepartmentManager

RamiHusseinAl-Mobassat CreditDepartmentManager

WajeehSeddeeqSaqfAl-Hiet BranchesandIndividualBankingServicesDepartmentManager

AmjadHusniShadeed HumanResourcesDepartmentManager

68 9- Risk Description

The risks facing the Bank include:

A- Credit Risks:Creditriskarisefromthepossibilityofinabilityorunwillingnessofaborrowerorathirdpartytofulfilhis/herobligationsontime.Suchrisksincludesomeitemsincludedinthefinancialstatements,e.g.directfacilities(cashcredit),andsomeitemsnotreportedintheconsolidatedfinancialstatements,e.g.lettersofcreditandlettersofguarantee,whichcouldresultinfinanciallosses.

B- Operating Risks:Risks that arise as a result of inefficiency or failure related to internal operations, employees andregulations,orasaresultofexternalevents,includinglegalrisks.

C- Compliance RisksRisksthatariseasaresultoftheBank’sfailuretoobserveeffectivelaws,legislations,regulations,andinstructions,aswellasthebankingandethicalsystemsissuedbylocalandinternationalregulatorybodies,includingtheBank’sinternalpolicies.

D- Liquidity RisksRisksthatariseasaresultoftheBank’sfailuretoprovidethenecessaryfinancingtomeetitsobligationsontime,ortofinanceitsactivitieswithoutincurringhighcostsorlosses.

E- Market RisksRisksthatariseasaresultoffinanciallosstothepositions,whetherreportedinthefinancialstatementsornot,asaresultofpricevolatilityinmarkets,includinginterest,sharesandcurrencypricevolatility.

Suchrisksalsoariseasaresultofchangeinpoliticaland/oreconomiccircumstancesinmarkets,currencyprice volatility, interest price volatility, uncovered positions ownership volatility, and gaps betweenmaturitydatesofassetsandliabilitiesononehandandre-pricingontheother.

F- Interest Price Risks

G- Foreign Currency Risks:Suchrisksariseasaresultofexchangeratevolatility

H- Shares Price Risks:Suchrisksariseasaresultofchangeinsharesfairvalueofinvestment.

10- Bank’s activities and achievements:IncludedintheBoardofDirectorsReportinanindependentarticle(pp.10-21)supportedbyfiguresandadescriptionofkeyeventsthroughouttheyear2015.

6911- Financial effect of non-recurrent events not included in the Bank’s main activities: Thereisafinancialimpactfromnon-recurrenteventsin2015;theeventsinhotspotsinIraq,specificallyinMosulandTikrit,andtheyareincludedintheBank’smainactivities,addtothisthefinesimposedbyCentralBankofIraqonIraqiBanks.

12- Analysis of the Bank's financial position and business results:SeeFinancialResultsAnalysispp.22-31

13- Key future developments and the Bank’s future plan:Future developments, projects, strategies and the Board of Directors’ expectations for the Bank’sfinancialresultsareincludedintheBank’sfutureplanfortheyear2015,whichisexplainedindetailinpp.10-31

14- Statement of securities issued by the Bank

A- Number of securities owned by board members and their relatives:

Name Title Nationality Number of Shares

Mr.WadeeNouriAyedAlHandal Chairman Iraqi 24,985,992,254

Mrs.AwatifNazemAwad Wife Iraqi 6,648,451,319

Mr.OmarWadeeNouri Son Iraqi 19,768,604,982

Ms.AyaWadeeNouriAyed Daughter Iraqi 19,768,604,982

Mr.AliDiaAl-Hussaini Vice-Chairman Iraqi 1,500,000

AdnanKananAl-Jalabi BoardMember(ManagingDirector) Iraqi 1,500,000

Mr.AbbasHadiAl-Bayyati BoardMember Iraqi 187,265,011

Mr.FirasAbbasHadi Son Iraqi 31,844,301

Mr.ShakerMahmoudAli BoardMember Iraqi 1,660,205,745

Mrs.NahlaNouriAyed Wife Iraqi 18,726,501

Mr.AtheerGhassanHamed BoardMember Iraqi 165,771,263

Ms.BushraBashirShareef BoardMember Iraqi 250,000,000

Mr.NourNouriAyed Son Iraqi 21,400,211,086

B- Number of securities owned by executive management members and their relatives:

Name Title Nationality Number of Shares

Mr.AdnanKananAl-Jalabi* BoardMember(ManagingDirector) Iraqi 1,500,000

Mr.SalehFarajAlSharaa’ AssistantManagingDirector Iraqi 866,285

Mr.NourNouriAl-Handal TreasuryandInvestmentManager Iraqi 21,400,211,086

70 15 -Benefits and remunerations for board members and senior executive management:

Benefits and remunerations for board members in 2015

Name PositionAnnual

Salaries Cash

RemunerationsIn-Kind

RemunerationsTotal Annual Benefits

Mr.WadeeNouriAl-Handal Chairman - 8 - 8

Mr.AliDiaAl-Hussaini Vice-Chairman - 7 - 7

Mr.AdnanAl-JalabiBoardMember(ManagingDirector)

145,908 7 - 152,908

Mr.AbbasHadiAl-Bayyati BoardMember 65,010 7 - 72,010

Mr.ShakerMahmoudAli BoardMember - 7 - 7

Mr.AtheerGhassanHamed

BoardMember - 7 - 7

Ms.BushraBashirShareef BoardMember - 7 - 7

Total 210,918 50 - 260,918

Saidbenefitsweregivenfortheyear2014andissuedin2015.ItisexpectedtograntIQD11milliontothechairmanandIQD10milliontoboardmembersin2016fortheyear2015.

16- Contribution, donation and grant expenses in community service, travel, hospitality and advertising:

A- DonationsDinarsinmillion

Recipient Amount

DonationstoMartyrsSociety 200

Total 200

B- AdvertisingDinarsinmillion

Recipient Amount

RadioToday 29.484

IraqiBanksGuide 9.5

Others 83.42

Total 122.42

C- Travel and hospitality

Dinarsinmillion

Expense Amount

TravelExpenses 111

HospitalityExpenses 34.7

Total 145.7

7117- Statements of contracts, projects and obligations made with affiliates, subsidiaries, Chairman, Board Members, Managing Director, employees or any of their relatives:

No. Name Relation Type Contract or ServiceAmount in

IQD

1Mr.NouriAyedAhmad MainShareholdersRelatives

HeadquarterBuildingRent 240,000,000

2 TikritBranchBuildingRent 12,000,000

3AmwalElectronicBankingServicesCo.

TheBankHoldsaShareintheCompany

ElectronicServicesforCards 81,443,800

4 IraqiICF-SMETheBankHoldsaShareintheCompany

LoansFee 100,756,793

5 AlYaomRadioCo.BoardMembersHoldaShareintheCompany

PromotionContract 29,484,000

6 AshtarSecurityCo.BoardMembersHoldaShareintheCompany

SecurityContract 408,661,458

Total 872,346,051

D- Auditing contract

Dinarsinmillion

DetailsContracts Number

Annual Contract Amount

MostafaAbbas&PartnersCo. 1 48

EarnestandYoung-Iraq 1 113.05

18- Reserve balances and uses Thedetailsof reservebalancesandusesare included in thefinancialanalysisof theBank’s resultspp.27-31.

E- Bank’s annual financial statementTheBank’sannualfinancialstatementsof2015wereauditedbyMessrs,MostafaAbbas&PartnersCo.;MessrsEarnestandYoungareauditorsforexternalauditonly.Comparisonto2014isincludedinthesecondpartofthereportpp.33-53.

F- Auditor’s report Theauditor’sreport,whichindicatesthattheauditingproceduresweredoneinaccordancewiththeinstructions and requirements of the Iraqi Accounting System for Companies, Companies Law andBankingLaw,isincludedtheintroductionofthefinancialstatementspp.34-35.

72 G- Lawsuits filed against the BankThereisanumberofcasesfiledagainsttheBankbythirdparties,most importantcasesfiledbyoragainsttheBankareasfollows:

No. Plaintiff Defendant Status Amount Notes

1 AshurInternationalBankPublicCustomsAuthority

WonbytheBank $2,000,000

AdecisionwasissuedtothefavoroftheBank,underwhichtheBankistobepaid120MillionIQDsasinterests

2 AlRafidainBankAshurInternationalBank

WonbytheBank 8,000,000,000 WonbytheBank

3 AshurInternationalBankPublicTaxAuthority

PendingbeforetheCourtofCassation

720,000,000 -

4 AshurInternationalBankAzamatAlIraqCo.

InPleadingsState 3,378,279,432 -

5 AshurInternationalBankNafaSporContractingCo.

PendingbeforeAppeal

764,117,000

AccordingtotheopinionofthemanagementandtheBank'sattorney,sufficientprovisionwasmadetomeetallthepossibilitieswithregardtolawsuitsfiledbyoragainsttheBank.

H- Land and real estate

1- Land

No. Estate No. Location Value Area CBI Approval Ref. Comments

1 20/1894 Sulaymaniya 2,364,433 200m2 1281883 -

2 35/124 Basra 1,862,500 274m2 274910 -

3 39/105 Karkouk 1,612,000 580m2 605089 -

4 551/1 Dihok 2,339,068 592m2 1573712 -

5 592/1 Erbil 2,372,788 313m2 286232 OperatingBranch

6 327267 Al-Arasat 4,314,906 1,002m2 357090 -

7 4/11527 Erbie'e 1,586,000 270m2 9/3/11974 Operatingbranch

8 9/163 Ankawa 1,877,798 594m2 9/3/16438 Operatingbranch

Total 18,329,493

2- Real Estate

No. Estate No. Location ValueCBI Approval

Ref.Comments

1 592/1 Erbil 3,460,486 - OperatingBranch

2 284/2089&2084 Erbil 339,670 - Residentialapartments

3 4/11527 Erbie'e 1,181,040 3/9/4054 Operatingbranch

4 9/163 Ankawa 1,277,666 3/9/3926 Operatingbranch

Total 6,258,862

73

Internal Audit Committee Report for the Year 2015

Inaccordancewith theprovisionsofArticle (24)ofBankingLawNo. (94)of2004,and incompliancewith the Bank's corporate governance requirements, which emphasizes the improvement of the riskmanagement, control, shareholders and depositors' protection system,we are pleased to submit ourreportontheauditingresultsfortheyear2015.1. TheCommitteeworkedsidebysidewiththeexternalauditorthroughouttheyear2015.TheCommitteemonitoredtheimplementationofeverycommentinhisreportsandinthepreviousexternalauditor’sreport that are related to year 2015 data, and in the Central Bank's report on the results of theregulatoryandauditingeffortsmadein2015.

2. The Committee reviewed the reports issued by the Internal Control Department at Ashur Bank,studiedthecommentsthereinandthewaystoaddressthem,andreviewedthereportissuedbytheComplianceSupervisoroftheBank.

3. TheCommitteesupportsManagement'spolicyoftowardsnotexpandingandincreasingthenumberofbranchesduetotherisksandthegeneralcircumstancesinIraq,thereforetheCommitteesupportexpansionine-paymentingeneral.

4. The Committee supportsManagement's decision to restructuring banking operations and reassignrolesinawaythatstrengthenstheinternalcontrolsystem,documentingworkingprocedures,andtoredistributingauthorities.

5. TheCommitteereviewedtheaccountingprocedureunderpinningtheBank'sactivities.Italsoassessedthe Bank's compliancewith the Central Bank's Instructions in terms of providing accounting dataontime,compliancewiththeguidelinesoncreditandanti-moneylaunderingprocedures,andtheinstructionsregulatingcreditandinvestmentactivities.Accordingly,theCommitteesupportsallthemeasurestakenbytheBankandrecommendstheirapproval.

6. TheCommitteefollowsupontheissueofcustomsdeclarationandtherelevantletterissuedbyCBItoanumberifIraqiBanks,itaffirmstechnicallythatthestandingoftheBankissoundasitdealsinbillsthathavetheappearanceofbeingdueasperArticle280oftheIraqiLawofCommerceNo.30oftheYear1984aswellasArticleFiveoftheUniformCustomsandPracticesforDocumentaryCreditNo.600,issuedbytheInternationalChamberofCommerce,whichArticlecompelsbankstodealaccordingtodocuments.Inspiteofthis,theCommitteerecommendsthattherelevantprovisionbemadeinordertoavoidanyfuturerisks.

7. TheCommitteefollowsupwiththeLegalDepartmentonthelatestdevelopmentsinthelawsuitfiledbytheBanktocollectpast-duedebts.TheCommitteesupportsallactionstakenandrecommendsmoreeffortstocollectpast-duedebts.

8. The Committee reviewed the 2015 Annual Report, and the included financial statements andperformanceindicatorstoensuretheBank'scompliancewiththeCompaniesLawineffectandtheregulationsandinstructionsissuedpursuantthereto.TheAnnualReportaccuratelyandcomprehensivelyreflectssaidyearandcomplieswiththeprovisionofsaidlaw.

9. The Committee reviewed the Auditor's Reportwhich states that the actions taken by the Bank'saresound.WeconfirmthesoundnessoftheactionstakenbytheBanktoprotecttherightsof itsshareholders,andthatitsperformanceinthisyearwasgoodincomparisonwithIraqiBankingSectorandthatthebalancesreportedintheFinalAccountsreflectitsstrongfinancialposition.

Abbas Hadi Al-Bayyati Atheer Ghassan Hamed Ali Dia Al-Husseini

Chairman Member Member

Ashur International Bank for Investment

IraqiPrivateShareholdingCompanyestablishedin2005.CommercialRegisterNo.M.Sh./25812,

Paid-upCapitalIQD250billionasontheendof2014.

Baghdad–Iraq–UqbabenNafiSquare–Quarter903St.99Building87P.O.Box3636

Telephone:009647704447355,009647704447366

E-mail:Info@ashubank.com

Website:www.ashurbank.com