dunia Annual Report FY 2015

E I G H T H A N N U A L R E P O R T | F I N A N C I A L Y E A R 2 0 1 5

D E S T I N Y

- ANNUAL REPORT 2015 1

From the construction of the world’s tallest building to the upcoming arrival of Expo 2020, the UAE is constantly on the rise, paving its way from the sands of the barren desert to its destiny as a major player on the world stage. This did not happen by chance. It started with a dream, and came to fruition through hard work and commitment. Behind the UAE are hard working people who aim to achieve their own personal destiny, and behind those people, a financial institution that is committed to helping them achieve it.

As human beings we are all dreamers, and we encourage our customers to dream big, because we are with them every step of the way to help them define and realize their own destiny. Through a personal approach to our customers’ needs and our tailor-made financial solutions, we show them there is no challenge that they cannot overcome, and put them on the right track to achieving their goals.

We believe that everyone should define their own destiny and at dunia we understand the role that we play in supporting this journey. We recognize that our services help shape the destinies of our customers. We therefore focus on providing modern and innovative tailor-made solutions supported by a team that delivers superior service with a personal touch.

That is why we carefully hand pick the right talent from all over the globe. We are also at the forefront of innovation leveraging new age technologies in order to be able to offer innovative solutions and superior services to our customers.

It is through our unique approach of putting customers first and nurturing our talent that we sustain profitable growth for our company and our investors so that each and every one of us can reach our ultimate destiny.

“Your destiny is our destiny.Your happiness is our happiness.Dunia. We’re different. Guaranteed.”

YOUR DUNIAYOUR DESTINY

- ANNUAL REPORT 20152 - ANNUAL REPORT 2015 3

CONTENT Chairman’s Message 6

CEO’s Message 8

Shareholders 12

Board Of Directors 14

Management Team 18

Dare To DreamOur story 28

Moving closer to the dream 30

Desire To Make A Difference Our universe 34

Adding a personal touch 35

Our unique value proposition 36

Maintaining a balanced approach 38

Delivering With FocusStaying ahead of times in a digital world 42

Delivering seamless service 44

Powered by reliable technology 48

Decoding the mind of the customer 50

Developing World Class TalentFostering a unique culture 54

Our people are our pulse 56

Focusing on national development 64

Succeeding in an inclusive environment 71

Determined To Create An Impactdunia Cares 74

Shaping talent early 78

Driven By ExcellenceMaintaining high standards of governance 86

Strategic cost management through our digital journey 92

Discovering New HeightsRecognized for our impact on society 96

Looking ahead 98

Financial Trends 100

Audited Financials 114


dunia has always been about enabling success, enriching lives and empowering people. Our customers trust us because we are experienced in finding tailored solutions for their financial challenges in order to help them achieve their own personal destiny whatever it may be.

As individuals, our decisions determine our destiny. We strive to enable our customers to determine their destiny by making their toughest decisions easier with the wide range of services we offer.

SALEM RASHIDAL NOAIMIC H A I R M A N

RAJEEVKAKAR

M A N A G I N G D I R E C T O R& C E O


REACHING NEW HEIGHTSWhile 2015 was a year marked by uncertainty in global markets, dunia has continued its rapid growth in all areas of the business, generating another strong financial performance and significant customer acquisition. Our revenues and net income increased by 43% and 14% respectively, in comparison to 2014.

The company continued to invest in technology and digital solutions in order to provide state-of-the-art financial solutions and customer convenience. Strong and authentic customer relationships have become more important than ever, and I am proud to say that 2015 saw the company reach new levels of customer expansion. We remain focused on building greater capability to provide a world-class service to our customers while maintaining predictable and sustainable growth.

I would like to thank the many talented and driven individuals that develop and deliver dunia’s diverse product and service offering, as well as its even stronger brand. Their daily efforts and commitment are core to dunia’s success.

Yours sincerely,

Salem Rashid Al NoaimiChairman

CHAIRMAN’SMESSAGE


CEO’SMESSAGE

SHAPING DESTINIESSucceeding in any economic climate

2015 was an extremely uncertain and volatile year for the world and driven primarily by a number of factors which included the uncertainty about the US Federal rate increase, the drop in commodity and oil prices, the slowdown in China and emerging markets and the regional Middle East turmoil, together with a highly vulnerable Europe, which is plagued by problems related to sovereign debt, security, refugees and problems of BREXIT which have been dominating the theme. All this in an environment where global banking has been heavily constrained because of the lack of capital and lending being under pressure. In such an environment, there tends to be uncertainty and markets tend to be volatile, investment confidence comes down, participation in employment comes down, consumption drops and businesses face pressure.

At dunia, we too faced the headwinds that were caused by such volatile conditions in the world but given the fact that we, at dunia, since inception have learned to weather headwinds, we have over time built a model that is highly robust and capable of responding to such situations. For us, it was an opportunity to prove the robustness and sustainability of our model which had been designed such that it can allow us to invest in good times and be able to absorb shocks in bad times. In an extremely challenging macroeconomic environment where many people lost jobs and business flows reduced, it was possible for dunia to widen operating margins, absorb some of the shocks in the external markets and yet be able to deliver strongly.

As a company that was designed to be an insurgent, we have tried to shape our destiny in order to realise our potential by preparing for the fact that there would always be adverse trends that we would have to face and we created the necessary buffers as well as the absorption capabilities to absorb those and yet be able to invest. Some of the key capabilities that we invested in include the power of the intangibles – where we have good governance and processes, but more importantly, we staffed ourselves with some very high quality, passionate people who are determined to be creative and have the ability to disrupt the status quo whenever there are vulnerabilities. We have not built an environment where we cannot fail, but where it is safe to fail.


able to absorb shock.

In line with our belief of doing good while doing good business, we remain committed towards giving back to society. We believe that just as we have shaped our own destiny, we should give back to the larger ecosystem that we live in, making it sustainable for inclusive growth.

As part of our sustainability initiatives, our corporate social responsibility efforts were focused on shaping change at the grassroots level. Our dunia Cares platform provides the momentum for the vast majority of our activities in this area. During the year we delivered a number of important initiatives, including the Dunia Young Business Leaders Program, Dunia Young Leaders Scholarship Program, Dunia Emirati Leaders Scholarship Program, as well as Blood donation drives and social welfare initiatives. We were able to empower people through these initiatives, enrich their lives and enable their success.

A reputation for quality

dunia’s commitment to quality and excellence in everything we do has been recognized over the last eight years with a number of respected awards and acknowledgements. 2015 saw the addition of several more, including:

• Entrepreneur Middle East recognized us in the ‘Finance Innovation‘ category.

• The Forbes Middle East recognized us in The Top 50 Business Leaders in the Arab World, ranked 15.

• The Indian Institute of Management – Ahmedabad (IIMA) published a case study about dunia’s journey of building the dunia brand and providing a unique customer experience through innovative marketing communication and advertising strategies.

• dunia Annual Report 2014 won Gold Award from the League of American Communications Professionals (LACP).

• Global Reporting Initiative (GRI) registered the dunia Sustainability Report 2014 to be in line with GRI G4 standards.

• dunia Annual Report 2014 received the Silver Award from Annual Report Competition Awards International (ARC).

• dunia Sustainability Report 2014 won the Bronze Award in the Annual Mercomm International Galaxy Awards.

Looking ahead towards our destiny

While we look ahead into 2016 and expect it to be a period of volatility and uncertainty which is the hallmark of the times, our performance in 2015 gives us more confidence that we are well prepared and well-armed to be able to handle these challenges. While we certainly cannot claim that we will not be impacted by the ecosystem, we certainly do expect that we will be less impacted and will be faster in being able to realize the opportunities that the market presents. We will continue to focus on our customers, be efficient in our operations, embrace change, drive innovation and focus on servicing our customers even better. For this, we will continue to motivate our people, expand workforce and bring talent into the company. This combination of assets is what we are sure will help us contribute to the market and the UAE and help shape the lives and destinies of people.

This is the power of dunia.

Rajeev KakarManaging Director & CEO

At this point of time, it is the grit of our people, the versatility of our business model, and the efficiency of our operations that allowed us to be able to continue to deliver. We are happy to report that we have been able to stay true to our belief that we should empower people, enable success and enrich lives. It was this result that guided us through the year.

Reaching new heights

In a year of volatility and challenges, we achieved new milestones. We saw another strong and sustainable financial performance in particular, with organic growth at both the top and bottom lines, and a significant increase in customers.

• FY 2015 revenues of AED 723.2 million, up 42.7% compared to FY 2014

• FY 2015 net income of AED 217.4 million, up 13.6% compared to FY 2014

• AED 109.0 million dividend paid for 2015 (fifth year of dividend track record)

• 28.0% y-o-y growth in customer base, to 210.7k customers

• 33.7% y-o-y growth in net loans and advances to customers, to AED 2,012.1 million

• Customer deposits of AED 1,176.1 million, up 41.9% compared to FY 2014

Despite the challenges of the market, the robustness of our model was proven when we were able to reach new heights.

Driving growth through investment

All this has happened because of our focus and investment in people, processes, infrastructure, products, creativity and innovation all along. This year too, we continued to show the same focus with our ongoing product development, which in turn drove a very efficient cross sell mechanism.

We invested in more analytics capabilities and technology through which we were able to secure even better quality data, which was used to better decode our customers’ needs and offer them seamless service. This helped us retain high customer satisfaction levels and reinforced the dunia brand as a genuine enabler for people’s needs. At the same time, we invested in new strategic risk management methods, allowing

dunia to maintain a predictable and sustainable growth trajectory.

Long term credit rating upgrade

It is important when we do business that we build a strong sense of credibility and that is when credible third party endorsements matter. As testament to our robust business model, dunia’s Long Term Issuer Default Rating (IDR) was upgraded to BB from BB- by the international rating agency, Fitch. It stated that the key drivers behind dunia’s rating uplift reflect the company’s improved funding profile, diversification of existing bank lines, growing franchise, and an additional year of track record.

Committed to developing talent

Talent is our biggest asset and since inception we have been highly committed to having the best people work with us - people who are highly focused, energetic, passionate, creative, innovative, strong on execution excellence and very high on integrity. For this, we constantly hire the best, train our people as they work, in order to nurture them and enhance their potential on a continuous basis.

In 2015, these efforts continued and our brand continued to grow, making us the employer of choice and as a result we continued to source a lot of talent from leading schools across the world. This year, we hired talent from leading schools including the Indian Institute of Management Ahmedabad, Indian Statistical Institute (ISI), Singapore Management University (SMU), Yale, MIT Sloan School of Management, Great Lakes Institute of Management, Higher Colleges of Technology in UAE, INSEAD and SP Jain School of Global Management.

Delivering a greater digital experience

With the advent and greater penetration of Social Media, Analytics, Cloud and Mobility solutions and the increasing ownership of smart devices as well as the availability of data, we too at dunia, realize the power of digital technologies and data. With the interconnectivity of devices and availability of far more information, customers are aware of products and services and are able to access them on-the-go.

In 2014, we embarked on a journey to strengthen our capabilities in the areas of Social Media, Analytics, Cloud

and Mobility. We strengthened the ‘duniaQwik’ brand with a host of new services in addition to our successful duniaQwikCash offering which gave customers the power to make payments and transfer money with the touch of a button.

We further enabled our customers to transact anytime, from anywhere, by empowering them through the ‘dunia Mobile’ app, which brought more convenience at their fingertips.

Strategic risk management

Strategic risk management continues to be our focus. At dunia, we have always been a risk-reward leveraged company where we always balance risk and reward in our decision making. We have never mis-priced capital or risk. As a result, while there was uncertainty about when there would be a crisis, we have designed our business to make sure that such risks are priced in over the lifetime of the assets.

We welcomed the launch of the Al Etihad Credit Bureau in the UAE. We were immediate users of the Credit Bureau and the fastest to be 100% compliant. Since then we have not only used the bureau extensively in our data-driven decision making process, but we continue to use it for credit, revenue, marketing and cross-sell purposes as it allows us to understand and fulfil our customer needs in a straight through manner.

Strategic cost management

With such synergies and investment that is a combination of digital and straight through decisions with the support of the bureau, we have been able to drive greater service levels to customers and also greater efficiencies in our expenses. This is reflected in our cost to income ratios improving by 12.4% in 2015 versus the prior year. It is this drop in expenses, in a strategic manner that allowed us to widen our operating margin, while maintaining our revenue yields. This strategic cost management focus has allowed us absorb some of the shocks and yet deliver strongly on the bottom line.

Committed to sustainability

We believe that our business must be measurable, predictable and profitable in order to be sustainable. We use our sustainable profitability to be able to invest in stronger tangible and intangible assets, grow the power of the company and at the same time, be


Fullerton Financial Holdings (FFH) invests in and operates financial institutions in emerging markets. We create shareholder value by differentiating through great people, disciplined development and execution of unique business models that focus on the mass market and SME customer segments. FFH is a wholly owned subsidiary of Temasek Holdings (Private) Limited, an investment company based in Singapore. As at 31 December 2014, FFH’s total assets stood at SGD 43.1 billion, and its portfolio includes investments in 11 financial institutions located in 8 countries.

www.fullertonfinancial.com

Established and owned by the Government of Abu Dhabi, the company’s strategy is built on the creation of partnerships and on long-term, capital intensive investments that deliver strong financial returns, contribute to the growth and diversification of Abu Dhabi’s economy, and create opportunities for current and future generations in United Arab Emirates. Mubadala brings together and manages a multi-billion dollar portfolio of local, regional and international investments and partners with leading global organizations to operate businesses across a wide range of industry sectors. These include aerospace, semiconductors, metals & mining, oil & gas, renewables, information & communications technology, healthcare, real estate & infrastructure, utilities and defense services.

www.mubadala.com

dunia is a privately held financial services company launched in 2008. Its shareholders are Fullerton Financial Holdings, Mubadala, Waha Capital and A.A. Al Moosa Enterprises.

Waha Capital is an Abu Dhabi-listed investment company that offers shareholders and third-party investors exposure to high-potential opportunities in diversified asset classes. The company manages assets across several sectors, including aircraft leasing, healthcare, financial services, energy, infrastructure, industrial real estate and capital markets. Through its Principal Investments unit, Waha Capital has established a strong investment track-record, deploying capital in sectors that display robust demand fundamentals and that have been prioritised by governments in the Middle East and North Africa region. The company has also built a strong capability in managing global and regional credit and equity portfolios, which have enhanced the diversification and liquidity of Waha Capital’s balance sheet. The excellent performance of the company’s direct investments and capital markets portfolios has laid the foundations for the launch of an asset management business aimed at third-party investors. Established in 1997, Waha Capital benefits from a roster of prominent local shareholders that includes Mubadala Development Company, and a distinguished board, chaired by H.E. Hussain Jasim Al Nowais.

www.wahacapital.ae

A.A. Al Moosa Enterprises LLC, also more familiarly known as the Arenco Group, is one of the leading and prominent local business groups in the UAE, with business interests spanning real estate, hotels, architectural design, manufacturing, services and trading. Set up in 1971, the group has its corporate headquarters in Dubai, with business interests in all emirates and beyond. The group continues to rapidly grow in its various businesses as a service oriented group and looks forward to its diversification into financial services through its interest in Dunia Finance LLC.

www.aaagroup.com

SHAREHOLDERS


GAN CHEE YEND I R E C T O R

RAJEEV KAKARM A N A G I N G D I R E C T O R & C E O

SALEM RASHID AL NOAIMIC H A I R M A N

OMAR ERAIQATD I R E C T O R

DR. AHMED AL MUTAWAI N D E P E N D E N T D I R E C T O R

BOARD OF DIRECTORS


Omar Mohamed Eraiqat is a Senior Principal in Mubadala’s Credit Investment Department, with dual responsibility for identifying, structuring and executing global credit-related investments, as well as managing a number of Mubadala’s existing investments. Previously, Omar was in Mubadala’s Specialty Finance unit, responsible for the development and growth of the joint venture between Mubadala and GE (“MGEC JV”) that co-invests globally in a variety of asset classes in the credit space. During this time, Omar was instrumental in supporting the growth and strategic development of MGEC, which reached $5 billion of AUM, mostly investing in leveraged loans and real estate financing. Omar’s role as asset manager was vital in achieving an independent investment grade rating for MGEC and in the subsequent issuance of the inaugural $500 million senior unsecured bond. Omar joined Mubadala in 2007 as a member of the company’s Structured Finance and Capital Markets Department, where he worked on structuring and executing a number of complex transactions in a range of industries across Mubadala’s units and subsidiaries. He was a key member of the core team that completed the recapitalization of National Central Cooling Company PJSC in 2011, one of the first major successful restructurings of a publicly listed company in the UAE. Omar has also held positions with HSBC and Abu Dhabi Investment Company. He currently sits on the Board of Directors of a number of organizations, including: Abu Dhabi Finance (where he is also the Chairman of the Audit Committee); Dunia Finance (also serves as the Chairman of the Employee Remuneration Committee); and Mesirow Investment Management Partners. Omar holds a Bachelor’s degree in Finance and Marketing from the American University of Sharjah.

Gan Chee Yen is a Director on the dunia Board and the CEO of Fullerton Financial Holdings (FFH) in Singapore. Prior to his current appointment, Gan was the Co-Chief Investment Officer and Senior Managing Director, Special Projects at Temasek International. He joined Temasek in May 2003 as CFO and has since served in various investments roles as a member of the senior management team in Temasek. The investment clusters he has led included the Financial Industry portfolio and the Transportation and Logistics portfolio, before he took on the role of Co-CIO of Temasek where he anchored several successful investments. He has also recently completed his stint as Head of China market. Gan has served on the boards of several companies including Neptune Orient Line, a global shipping company and has been a board member of FFH and a board commissioner of Bank Danamon since 2003. He also sits on the board of ACR Capital Holdings Pte. Ltd., a pan-Asia focus reinsurance group, and Surbana Jurong Private Limited, Asia’s consultancy company for urbanisation and infrastructure developments.

Dr. Ahmed Khalil Al-Mutawa is a respectable academic professional, as he progressed in his academic career since he held his B.A. in Economics from Cairo University in 1978, M.A. in Economics from University of North Carolina in 1981, and Ph.D. in Economics, Georgetown University, Washington, D.C. in 1991. As a professor, he held the position of the Chairman of the Economics Department, and in 1997 became Deputy Vice Chancellor for Planning (DVCP), UAE University. Dr. Al-Mutawa had occupied many important business positions, among them: Executive Director, Al-Mustaqbal Economic & Strategic Consultations; Strategic Development Director at Maritime & Mercantile International; and the Secretary General of Gulf Organization for Industrial Consulting (GOIC); the CEO of Khalifa Fund for Enterprise Development; and currently the Executive Chairman of GFH Capital at DIFC. Dr. Al-Mutawa has been a member of many Associations, Organizations and several Boards of Directors on both local and international levels. He won the award for “Industry CEO of the Year 2005”. He has several international publications on economic and strategic matters.

Salem Rashid Al Noaimi is Waha Capital’s Chief Executive Officer and Managing Director.Mr. Al Noaimi has led Waha Capital since 2009, overseeing the company’s strategic transformation into a leading investment company, managing proprietary and third-party assets. Previously, he served as the Deputy CEO of Waha Capital, and CEO of Waha Leasing. Earlier in his career, Mr. Al Noaimi held various positions at Dubai Islamic Bank, the UAE Central Bank, the Abu Dhabi Fund for Development, and Kraft Foods. He serves on the board of a number of companies, including New York-listed AerCap Holdings, Abu Dhabi Ship Building, Dunia Finance, Siraj Finance, and Anglo Arabian Healthcare. Mr. Al Noaimi is a UAE national and holds a degree in Finance and International Business from Northeastern University in Boston, USA.

Rajeev is the Founder Managing Director and CEO of dunia. He is also concurrently the EVP and Regional CEO for CEEMEA region for Fullerton Financial Holdings (Fullerton), a 100% owned subsidiary of Temasek Holdings, in Singapore. In his additional role as the EVP and Senior Management Committee Member at Fullerton, Rajeev also heads the Consumer Banking businesses globally for all its Bank and Financial Services Investments and Holdings. Rajeev has over 28 years of experience in banking. He joined Fullerton in 2006, and prior to that worked with Citibank N.A. for two decades, based in various geographies, between 1987 and 2006 - and his last role was the Regional Head and CEO for Citibank’s Global Consumer Bank, managing the Turkey, Middle East and Africa region. Forbes Middle East has consistently recognized Rajeev as being part of the Top Indian Leaders in the UAE in 2015, 2014 and 2013. For the last five years from 2010-2014, Rajeev has been annually recognized in the Arabian Business’ “GCC Power List India Top 100”. In 2009, Rajeev received ITP’s “CEO of the Year” Award for Financial Services in the Middle East. Rajeev is a Mechanical Engineer from the Indian Institute of Technology (IIT) in Delhi and an MBA graduate from the Indian Institute of Management (IIM) in Ahmedabad. Rajeev is on several boards including the Global Management Board of Fullerton in Singapore, Chairman on the Board of “Fullerton Securities & Wealth Advisors Ltd” (FSWA) and the Director on the Board of “Fullerton India Credit Company Ltd” (FICC). Rajeev is a member of the Global Advisory Board of the Association of External Search Consultants, USA since 2012. He is also a member of the Global Advisory Board for the University of Chicago Booth School of Business. He is also a member of the Industry Advisory Board of SP Jain School of Global Management since 2011 and a member of the Indian Institute of Management (PAN IIM Network) Alumni Board in the UAE, since 2011.

BOARD OF DIRECTORS

GAN CHEE YEND I R E C T O R

SALEM RASHID AL NOAIMIC H A I R M A N

OMAR ERAIQATD I R E C T O R

DR. AHMED AL MUTAWAI N D E P E N D E N T D I R E C T O R

RAJEEV KAKARM A N A G I N G D I R E C T O R & C E O


MANAGEMENTTEAM


R A J E E V K A K A RM A N A G I N G D I R E C T O R & C E O

Rajeev is the Founder Managing Director and CEO of dunia. He is also concurrently the EVP and Regional CEO for CEEMEA region for Fullerton Financial Holdings (Fullerton), a 100% owned subsidiary of Temasek Holdings, in Singapore. In his additional role as the EVP & a Founder Global Management Board member at Fullerton, Rajeev also heads the consumer banking business globally for all its Bank & Financial Services operations in Pan-Asian markets of China, India, Indonesia, Malaysia, Pakistan, Vietnam, Russia, and the UAE. With over 27 years of experience in the banking industry, Rajeev has worked in several global markets, especially in the high-growth, emerging CEMEA and ASIA-PACIFIC countries. During his career, he has managed several business turnarounds, launched start-ups, and has a proven track record of running established businesses successfully. Between September 2003 and January 2006, he was the Regional Head & CEO for Citibank, managing the rapidly growing, volatile and complex Turkey, Middle East & Africa region (TMEA), based out of Dubai, UAE. Earlier, in July 2002, Rajeev was Citibank’s CEO for the Turkey & Egypt cluster, based out of Istanbul, Turkey. Prior to that, in 2000, he was the CEO for Citibank in Egypt, where he launched its Consumer bank, as the first in the market. This enterprise was recognized as one of the best franchises in the Citigroup world for having delivered the fastest break-even in Citigroup’s history. In 1998, Rajeev founded a new green-field Joint Venture Captive Finance company, between Citigroup & Suzuki (Maruti), the largest car manufacturer in India at the time, which grew on to become the market leader. Forbes Middle East has consistently recognized Rajeev as being part of the Top CEOs in the Arab World 2015 & 2014 and the Top Indian Leaders in the UAE in 2014 & 2013. At ITP’s Awards 2013, he received the “CEO of the Year” Award. For the last four years from 2010 to 2013, he has been recognized annually by the Arabian Business “GCC Power List India Top 100”. In 2009, Rajeev received ITP’s “CEO of the Year” Award for Financial Services in the Middle East, in recognition for establishing dunia as a greenfield operation, amidst the global economic downturn. Rajeev is currently a member of the Global Management Board of Fullerton in Singapore. Rajeev is also a Director on the Board of “Fullerton Securities & Wealth Advisors Ltd” (FSWA) and “Fullerton India Credit Company Ltd” (FICC), headquartered in India. Between 2010 – 2013, Rajeev was a Commissioner on the Board of Commissioners for Adira Dinamika Multi Finance Tbk, in Indonesia. Between July 2004 and February 2006, Rajeev was a member on the CEMEA Board of Visa International. Since 2009, he has been a member of the Global Advisory Board for the University of Chicago’s Booth School of Business. Rajeev is a member of the Global Advisory Board of the Association of External Search Consultants, USA since 2012. He is also a member of the Industry Advisory Board of SP Jain School of Global Management since 2011 and a member of the Indian Institute of Management (PAN IIM Network) Alumni Board in the UAE, since 2011. Rajeev completed a Masters of Business Administration (MBA) in Finance and Marketing from the Indian Institute of Management (IIM) Ahmedabad. He also received his Bachelor of Technology in Mechanical Engineering from the Indian Institute of Technology (IIT) Delhi.

Ali started his career at AT&T Universal Card Services in Florida, U.S. in 1995, where he held various roles in Finance, Marketing and Card Analytics. In 1999, he joined First USA Bank, now JP Morgan Chase, as the Credit Policy Head for card acquisitions of core brand, in Delaware, U.S. In 2000, he returned to Turkey, joining Citigroup as the Credit Policy Head. This involved formulation of the credit policies for the business. Subsequently, Ali moved to the Strategic Analytics Unit of the bank. Prior to joining dunia, Ali was with Citibank N.A. where he was the Strategic Analytics Head for the Middle East region and responsible for consumer banking analytics, covering UAE, Bahrain, Egypt and Pakistan, while based in Dubai. Ali has an Industrial Engineering degree from Bogazici University in Turkey and an MBA from the University of Virginia’s Darden School.

Venu has over 35 years of experience in banking and finance in a wide range of functions and countries including India, Australia, Korea, UAE and the UK. His previous roles include Portfolio Risk Manager – Citibank Australia, Treasurer – Citibank Korea, CFO and Treasurer – Citibank India, Regional Consumer Treasurer – Citibank CEEMEA and CFO – Citibank Turkey, Middle East and Africa. His last assignment was the Consumer CFO for the EMEA region for Citigroup where he was responsible for the finance function across Citigroup’s consumer business in Western and Central Europe and the Middle East. Venu is an Economics graduate from the University of Bombay and has completed his Masters in Business Administration from the Indian Institute of Management, Ahmedabad. He is also a Fellow member of the Institute of Chartered Accountants of India.

A L I H U R B A SS T R A T E G I C A N A LY T I C S H E A D

V E N U P A R A M E S H W A RC H I E F F I N A N C I A L O F F I C E R

MANAGEMENT TEAM


Mariam has over 19 years of experience in Retail Banking and Marketing. Her latest role prior to joining dunia was with Citibank, UAE as Marketing and Product Head handling the bank’s retail products, Marketing Communication and Internet channel. Mariam has handled several key startup businesses during her 9 year stint with Citibank – Citibank Egypt, UAE and Russia – as well as dunia. She is one of the founding management team members of the company. She was awarded the ‘Women Achievement Award’ at the World Women Leadership Congress in India in 2015. Mariam began her career with Procter & Gamble in Marketing. She is a double MBA holder from University of Chicago (2008) and from the American University in Cairo (1997).

Sanjay brings a wealth of experience and proven results in Consumer Banking across products and in multiple markets. Most recently, he was the Head of Consumer Finance for RBS Asia, responsible for China, Taiwan, Hong Kong, Singapore, Indonesia, Malaysia, India and Pakistan. In this role, he led the Asia Strategy and P&L streamlining following the RBS acquisition of the ABN AMRO franchise. Prior to this, Sanjay held senior leadership roles with Citibank in Asia Pacific, based in Singapore and Indonesia, as well as positions in Egypt, Thailand and India. Sanjay has also worked in the UAE from 2001 to 2003, when he held the position of Head of Marketing with Mashreq Bank. Sanjay started his career with Unilever India as a management trainee, and took on sales and marketing roles during his 7 year stint with them. He holds a Business Management Degree from the Indian Institute of Management, Calcutta and is a Bachelor of Technology in Chemical Engineering.

S A N J A Y K A OC O N S U M E R B U S I N E S S H E A D

Ben has joined dunia after a successful career with Royal Bank of Scotland (RBS) and earlier with ABN AMRO where he has gained considerable experience globally in senior positions within the IT function. In his last role, he was the Regional Chief Technology Officer for RBS based in Amsterdam where he was responsible for delivery across 21 countries apart from network standardization, data center and country model standardization. Prior to this, he held various senior roles as Chief Information Officer (CIO) for RBS Asia as well as ABN AMRO Asia Pacific based in Hong Kong between 2007 to 2009 covering the retail banking, commercial markets and wealth management verticals, apart from playing a key role in the integration of ABN platforms and networks with RBS after the merger. Prior to this, Ben was the Global CIO for the Private Banking function from 2006 to 2007 and Head of Infrastructure Technology for Europe from 2005 to 2006, and held the position of interim CIO for the ABN AMBO Netherlands business unit from 2003 to 2005. Ben also held multiple roles in retail banking from 1982 to 2003 in product management, retail lending and mortgages in the Netherlands. Ben holds a degree in Marketing and Macroeconomics from the University of Groningen in the Netherlands.

Guru was the first member of the dunia risk team having joined the organization in January 2007 and is currently dunia’s Chief Consumer Credit Officer. He has over 22 years of experience in the Credit Risk function. He started his career with Citibank in India where he spent around 9 years and his last role in India was the Regional Head for Credit & Collections for the East region. He then moved to Citibank UAE and was the head of the collections function. He was also certified as trainer for the Citigroup Global Collections Management program at Tampa, Florida and subsequently ran training programs out of the learning center at Barcelona, Spain. Guru has an MBA degree from TA Pai Management Institute (Manipal, India) specializing in Marketing and Finance and a Bachelor’s degree in Science from Madras University, India.

B E N S C H U U R M A NC H I E F I N F O R M A T I O N O F F I C E R

MANAGEMENT TEAM

M A R I A M E L S A M N YC H I E F M A R K E T I N G O F F I C E R

G U R U R A J B A L A K R I S H N AC H I E F C R E D I T O F F I C E R


Jassim started his career as an economic analyst for Citigroup in Dubai, UAE. He worked with the assistant Chief Economist of Citigroup Middle East. Later, he was appointed as a partner in the private equity fund for the MENA region as a fund manager by Islamic Development Bank and Gulf Finance House. Jassim worked for Dubai Islamic Bank’s initiative “Tamweel” as Head of Corporate Strategies and Planning during which he played a key role in development and execution of the strategic plan to gear the company from inception to growth from 2015 to 2017. Jassim worked as a principal consultant and advisor at AT Kearney, a US based global management consulting firm. During his tenor at AT Kearney, Jassim was appointed as a strategy and performance advisor to the Prime Minister’s Office of the UAE, where he contributed to development of federal government strategies, economic policies and planning in 2007. Later, in 2010, he was appointed as an economic strategy and policy advisor at the Executive Council, Government of Dubai. Jassim has B.Sc degree in Economics from Virginia Commonwealth University, Richmond, Virginia, U.S. and Masters in Strategic Management from University of Liverpool, UK.

J A S S I M A L H A M M A D IH E A D O F S T R A T E G Y A N DS P E C I A L P R O J E C T S

Muzaffer is part of the founding team at dunia and has 17 years experience in the Operations & Technology area. Prior to joining dunia, Muzaffer’s last assignment was with Citibank Bahrain as the Chief Operating Officer covering all areas of Core Operations, Technology Management, Collection Management and Risk & Crisis Management across all functions of the bank. Muzaffer started his career with Citibank Dubai and then moved to Citibank South Africa in the Global Corporate & Investment Bank with Citigroup. During his time at Citigroup, Muzaffer was also part of the regional Audit & Risk Review team as a subject matter expert in the area of Operations & Technology Management. Muzaffer has an MBA degree from University of Sheffield (UK) specializing in Technology Management and a Bachelor’s degree in Finance from European University of Cyprus.

Prior to joining dunia, Mustafa held the role of Head of Audit for Africa and Indian Ocean (2010 – 2011) and UK Retail Banking (2007 - 2010) in Barclays Bank PLC, leading large teams to deliver risk assurance and risk management advice. Before that, he was a senior member of the Audit and Business Advisory Services unit at PricewaterhouseCoopers (PwC), UK between between 1999 and 2007 and established the PwC Emerging Markets Risk Management (EMRM) team delivering risk management advice to multinationals entering emerging markets. He also setup and led the risk management consulting division in PwC Turkey from 1994 to 1999. Mustafa is a Certified Internal Auditor (CIA) and holds an MBA from Warwick Business School, UK as well as a BS (Hons) Degree in Mathematics from the Middle East Technical University in Ankara, Turkey. In addition, his credentials include the CIMA Advanced Diploma in Management Accounting, Certified Information Systems Auditor (CISA) and the Islamic Finance Qualification (IFQ) from the Chartered Institute for Securities & Investment (CISI).

M U Z A F F E R H A M I DC H I E F O F O P E R A T I O N S

M U S TA F A E R I MC H I E F I N T E R N A L A U D I T O R

MANAGEMENT TEAM


01 DARE TODREAM


We dared to dream big… a dream that was a culmination of our passion to make a difference, a passion to redefine the way people see their finances, a passion to truly serve the customer. The result of this dream was the birth of dunia, which marked the beginning of new age finance in the UAE.

We launched at an unusual time, a time when the world went through unprecedented stress and market dynamics became unpredictable. While the challenges seemed daunting to many, we saw it as an opportunity to focus on the customer, around whom the core principles of dunia lay. The foundation of dunia was built around customer centric principles by a strong team of like-minded, passionate, highly skilled and diverse professionals, who came together to make a difference. Our mantra is to ‘unlearn old habits’ and innovatively adapt our approach to doing business to stay ahead of times. This approach enabled us to understand the latent needs of the customer and

deliver tailor-made solutions through cutting-edge technology, seamless customer service and a robust governance mechanism.

Reflecting on our journey over these eight years, we are proud to have been able to grow predictably, profitably and sustainably. Our suite of personalized solutions are holistic to cater to both financial, business support and lifestyle needs of customers. We have consistently launched innovative products such as duniaQwikCash, business support solutions for SMEs through cloud technology, duniaQwikBuy - a dunia marketplace for businesses to grow and expand their customer reach, and duniaQwikConcierge - a unique listing service. Our ‘Qwik’ suite of services enable customers to transact on the go through our range of mobile apps or a simple SMS and phone call. Our customer touch points have evolved from traditional channels to digital platforms, helping us connect with customers any way they like.

As a team, we work towards achieving our strategic vision by clearly defining goals and objectives every year. The culture and people in dunia have been our winning formula. With our relentless focus on nurturing talent, our investment in people has helped us to ’wow’ our customers and gain their trust through superior customer service. At dunia, while we focus on growing our business and changing lives of our customers, we also give back to the community through several impactful initiatives that focus on causes such as education, social development and environmental health.

With steady progress, we continue to move closer to our dream – empowering people, enabling success, enriching lives.

OUR STORY


-First employee joinsdunia-dunia is conceptualized

-Planning & blue printing phase to deliver a unique customer focused business model

Jan

Mar-Jul

Sep‘06-Aug’08

-100th employee joins dunia-dunia incorporation-Blue printing phase completed-dunia open doors-Hamdan Branch opening-dunia launches Personal Loans-dunia launches Corporate Deposits-dunia launches dunia Credit Cards

May

JulAug

Sep

Oct

Nov

-dunia enters into partnership with MasterCard Worldwide-dunia launches dunia Financial Planner-dunia launches Education Loans-dunia launches Durable Good Loans-dunia launches duniaCredit Life-Rajeev Kakar, Managing Director & CEO of dunia, recognized by HH Ruler of Sharjah for his special efforts in supporting and developing UAE Talent-Launch of ‘Kawader dunia’ Emiratization program, in partnership with SP Jain School of Global Management-dunia launches Auto Loans-dunia launches Car Cash-in Loans-dunia wins award for ‘Best Use of Technology’ at Banker Middle East Industry Awards-dunia signs agreement with Ministry of Finance to perform bank guarantee e-registration service-dunia launches dunia Wallet & Life Guard Insurance-700th employee joins dunia-Rajeev Kakar awarded ‘CEO of the Year - Financial Services’ by CEO Middle East-dunia launches dunia Diamond Credit Card-dunia wins ‘Special CSR Award’ at the Arabian Business Achievement Awards

Jan

Mar

Apr

May

Jun

JulSep

Dec

Our progress since inception is testament to our unique, robust and agile business model. By identifying opportunities and anticipating challenges early on, we have been able to remain responsive, resilient, and focused on achieving our objectives. Our growth has therefore remained predictable, profitable and sustainable, and with every year, we achieve and surpass milestones that we set for ourselves.

MOVING CLOSER TO THE DREAM

2006-2007

2008

2009

-dunia ranked 5th in Gulf News’ Best Practices in UAE-Case study on dunia published by Singapore Management University-Rajeev Kakar, Managing Director & CEO of dunia, recognized in ‘GCC India Power List 2012’ for ‘Top 100 Indians’ in the region-University of Virginia’s Darden School of Management writes a case study on dunia-dunia records 305% growth in net profit through its customer centric approach-dunia awarded “Excellence in Financial Reporting” for Annual Report FY 2011 amongst Mubadala entities-dunia ranked 4th in Gulf News’ Best Practices in UAE

Feb

Apr

Oct

Dec

-800th employee joins dunia-Image Cheque Clearing System (ICCS) implemented-dunia achieves break-even-dunia launches the Club-Apparel - dunia Credit Card-Rajeev Kakar, Managing Director & CEO of dunia, recognized in ‘GCC India Power List 2011’ for ‘Top 100 Indians’ in the region-dunia launches ‘dunia Touch’ for global volunteering programs-dunia Academy introduces a wide range of training programs

JanMar

Aug

Sep

Nov

Dec

2011

2012

-Al Wahada Branch opening-Passport Road Service Center opening-Media City Branch opening-Karama Service Center opening-Naif Service Center opening-Rolla Service Center opening-Musalla Road Service Center opening-National Paints Service Center opening-Knowledge and Human Development Authority(KHDA) signs MOU with dunia-dunia launches Wages Protection System (WPS)Payroll Solution-Defense Road ServiceCenter opening-Musaffah Industrial Area Service Center opening-Al Quoz Service Center opening-Al Qusais Service Center opening-Oud Metha Service Center opening-dunia launches Commercial Auto Loans-Dubai Outsource Zone Service Center opening-dunia launches Flexi Loan Facilities-Al-Ain Branch opening-Khalidiya Service Center opening-Rajeev Kakar, Managing Director & CEO of dunia, recognized in ‘GCC India Power List 2010’ for ‘Top 100 Indians’ in the region-Moroor Service Center opening-Mussaffah Commercial Area Service Center opening-dunia’s 2009 Annual Report wins ‘Honors Award’ in International Mercury Awards-dunia’s 2009 Annual Report wins ‘Platinum Award’ in the League of American Communication Professionals (LACP) Award

Jan

MarApr

May

Jun

Jul

Aug

Sep

Nov

Dec

2010

-Washington Post in the U.S. writes about dunia’s home grown analytics model-dunia launches Dunia Young Business Leaders Program-Rajeev Kakar, Managing Director & CEO, recognized in Forbes Middle East list of “Top Indian Leader in the UAE”-dunia awarded for ‘Innovation in Learning’ at the Asian Learning & Development Leadership Awards-Fitch Ratings assigns Dunia Finance a Long-term Issuer Default Rating (IDR) of ‘BB-’-Singapore Management University (SMU) publishes 2nd case study on dunia-dunia launches Diamond Card with 3% unlimited cashback-dunia’s 2012 Annual Report wins ‘Gold Award’ in the League of American Communication Professionals (LACP) Award and is ranked 43 worldwide-dunia publishes its first ever Sustainability Report

Feb

Jun

Jul

Sep

Oct

Nov

Dec

2013- Forbes Middle East ranks Rajeev Kakar, Managing Director & CEO of dunia, # 17 in its Top Indian Leaders in The Arab World- dunia’s award winning Dunia Young Business Leaders Program runs its second successful rendition - Financial Times Press releases the book “Cutting Edge Marketing Analytics” which recognizes dunia’s unique analytical capabilities and proprietary business models - Fitch Ratings affirms Dunia Finance’s Long-term and Short-term Issuer Default Ratings (IDR)-long term IDR affirmed at BB-Outlook Stable and short term IDR at B- dunia launches dunia High Yield Deposit product - Arabian Business ranks Rajeev Kakar, Managing Director & CEO of dunia, in the GCC’s 100 Most Powerful Indians 2014 list- dunia’s 2013 annual report wins ‘Gold Award’ in the League of American Communication Professionals (LACP) Award and is ranked 31 worldwide- dunia’s 2013 Sustainability Report wins ‘Silver Award’ in the League of American Communication Professionals (LACP) Award and is ranked 88 worldwide- 1000th employee joins dunia- dunia launches ‘duniaQwikCash’- dunia recognized for Excellence in Financial Reporting at the Institute of Chartered Accountants in England and Wales (ICAEW) Awards- dunia recognized for “Excellence in Sustainability” at IAIR Awards- dunia signs agreement with the distinguished Indian Institute of Management, Ahmedabad (IIMA), to offer scholarships to students studying Post Graduate Programme (PGP)

- University of Virginia’s Darden School of Management publishes two more case studies on dunia- dunia re-affirms commitment to developing talent through education with the launch of the Dunia Emirati Leaders Scholarship Program and the Dunia Young Leaders Scholarship Program- Forbes Middle East ranks Rajeev Kakar, Managing Director & CEO of dunia, 18 in the Top Indian Leaders in the Arab World in 2015 list- dunia launches an innovative leadership program for students in collaboration with Cambridge International School- dunia runs the third successful rendition of the award winning Dunia Young Business Leaders Program with a class of 56 students- dunia Annual Report 2014 wins Gold Award from the League of American Communications Professionals (LACP)- Global Reporting Initiative (GRI) registers dunia’s 2014 Sustainability Report to be in line with GRI G4 standards- Fitch upgrades dunia’s Long-term Issuer Default Rating (IDR) from ‘BB-‘ to ‘BB’ reflecting dunia’s strong financial performance and growth- dunia’s 2014 Annual Report receives Silver Award from Annual Report Competition Awards International (ARC)- dunia launches an eco-friendly green car loan- dunia launches the ‘dunia Mobile’ app - dunia awards 39 scholarships to students as part of the Dunia Emirati Leaders Scholarship and Dunia Young Leaders Scholarship programs- dunia’s 2014 Sustainability Report wins Bronze Award in the Annual Mercomm International Galaxy Awards- Entrepreneur Middle East awards Rajeev Kakar, Managing Director & CEO of dunia, ‘Indian Innovator’ in the ‘Finance Innovation‘ category- The Indian Institute of Management – Ahmedabad publishes a case study about dunia’s journey of building the brand and providing unique customer experience

Jun

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2014 2015


02 DESIRE TO MAKE A DIFFERENCE


Our universe is centered around the people who make us what we are today - Our customers.

dunia’s customer-centric business model has ensured that the ‘Customer First’ approach is ingrained in our DNA right from inception. We therefore listen to our customers, understand their needs and deliver personalized solutions with speed, reliability, empathy and care. With each passing day, our interactions and experiences with customers help us fine-tune our approach towards them, which therefore helps us remain different, yet relevant.

This unique business model is supported by dunia’s talented, passionate and energetic employees who put the customers’ need ahead of theirs. Our diverse workforce brings together talented, multicultural people from around the world who can better understand and serve our customers who reflect UAE’s diverse population.

At dunia, we believe in building relationships with our customers and strive to turn every interaction into a long-term relationship. We are accessible to our customers across all touchpoints, that include traditional channels such as our branches, 24-hour dunia Contact Center, SMS, Email, website as well as digital and social networking platforms. We are accessible 24x7 to respond to customers and assist them in their hour of need. Our team is also ably supported by cutting edge technology and analytics capabilities that enables us to predict customer needs and deliver personalized solutions in a sustainable manner.

With the understanding that all of us have different transaction, saving, borrowing and protection needs, our products and services have been designed to provide holistic solutions to our customers. At dunia we strive to be a part of the customer’s journey, fulfilling different needs at different stages of life.

The dunia One account reflects how we bundle solutions to offer a package of tailor-made services that address current and future needs of our customers.

OUR UNIVERSE ADDING A PERSONAL TOUCH

‘dunia One’ Account

Personalized solutions for transaction, borrowing, saving and protection needs

I n d i v i d u a l C u s t o m e r sdunia Credit Cards

A range of credit cards with benefits - reward programs and personalized benefits created for each unique customer.

dunia Personal Loans

Loans tailor-made to match customers’ personal needs that include marriage loans, car loans, education loans, or loans against property.

dunia Car Loans

Loans for new or used cars and car cash-in loans.

dunia Protection

Simple insurance products offering protection for cards and loans.

duniaQwik Services

Digital solutions to transact on the go.

C O R P O R A T E C u s t o m e r sdunia Corporate Deposits

Corporate deposit accounts that help customers maximize returns on their business savings.

dunia Labour Guarantees

Issuance of financial and labour guarantees.

dunia Payroll Solutions

Hassle-free payroll processing through the Wage Protection System (WPS).

dunia Business Loans

Loans tailor-made to match business needs including business loans, fleet financing and commercial vehicle loans.

duniaSME

Integrated business support solutions that offer advice and support business operations and growth.

duniaQwik Services

Digital solutions to enhance business growth and customer reach.


Self-EmployedMass Market

Small & MediumEnterprises

Salaried Mass Market

Mass Aff luent

Aff luent Corporate

Commercial

We recognize that each customer is unique and has different needs that require personalized solutions. Our specially crafted customer segment-based model enables us to create a range of solutions that are relevant for each of our customers. In this model, each customer segment has a unique value proposition with a customer promise that is delivered by a specialized team.

duniamoney was tailor-made to provide financial solutions to the ‘Salaried consumers’. Simplification of processes ensures that even the most unique of financial needs are implemented rapidly, while specialized product solutions cater to the specific needs that are exclusive to this particular customer segment. duniamoney strives to offer a community based, superior service and relationship experience based on empathy and respect, while delivering customers with easy credit and simple savings products to meet their simple financial needs, in order to help them provide for a better future for self and family back home.

duniatrade was the answer to the most pressing financial need of the ‘Self-employed consumers’. An often neglected and under-served section of society, this segment needs financial services that are legitimate, thereby steering them away from parallel, unreliable banking channels. duniatrade vows to be a caring community-based financial services provider designed specifically to serve the unbanked or under-served self-employed, through a superior relationship experience, empathy and respect, with convenient, fast and easy access to credit for their business and personal needs, to help them grow their businesses and provide for a better future for self and family.

OUR UNIQUE VALUE PROPOSITION

dunia offers to its ‘Mass Affluent’ customer segment an array of financial solutions at their very doorstep. Professional expertise on every financial solution offered is ensured as a one-stop shop option to optimize valuable time and energy. dunia is designed to be a provider of a wide range of customized financial solutions through superior products, service and relationship experience based on respect, with easy access through an empowered Relationship Manager, alternative access channels for convenience and speed, to provide for a better lifestyle and future for self and family back home or internationally.

duniagold customizes elite solutions for the exclusive needs of its most ‘Affluent’ members of the community. While providing financial solutions that enhance their lifestyle, the state-of-the-art service ensures the speed and efficiency that is demanded by their evolving life and business interests. duniagold was built to be a provider of customized and tailor-made solutions that cater to the unique financial and lifestyle needs of affluent customers and meet their aspirational goals by providing a wide range of financial products and services, while delivering these with exceptional service and convenience through a single point of contact.

duniasme aims to be the strategic one-stop financial and transaction services provider for ‘Small & Medium Enterprises’ to help them grow and succeed fast and predictably, by providing holistic solutions for their transaction borrowing, savings and protection needs, backed by competent, timely and error free service, and world-class products that SMEs can leverage off for their business-related transaction intensive functions helping them gain the power to become increasingly mobile, collaborative, and flexible in their operating model, and able to access world class assets and capabilities, by marginally paying just for what they need, while benefiting automatically from constant innovations, upgrades, and the flexibility of being able to scale up or down easily, and are able to focus on their intrinsic competency and expertise of running their core business domain with high probability of success, as they serve their clients efficiently, reliably, and at a low cost, without needing to invest large capital expenses, or investing in sub-scale assets and talent, to empower them to enable the success of their clients and provide them with an enriching experience.


At dunia we believe in transparency and open channels of communication within the organization. This helps us ensure that our strategic vision is translated into goals and actions that cascade throughout the organization. These goals are determined across the dimensions in our balanced scorecard to help us maintain a balanced approach towards achieving our strategic objectives.

MAINTAINING A BALANCED APPROACH

Franchise People

Processes

• We have completed 8 years of successful operations and built on the franchise. Today, dunia is a well-known financial services brand in the UAE.

• As a testament to our customer centric way of doing business, we were ranked in the top quartile in Gulf News’ UAE A-List of “Customer Focused Organizations”.

• We constantly innovate and introduce financial solutions that match the evolving needs of our customers.

• We have built a safer and more diversified mix of customer receivables.

• Fitch has upgraded dunia’s credit rating of BB- to BB. This standalone rating reflects strong portfolio growth and track record, improved funding profile, solid financials, strong capital ratios and capable management.

• We have one of the most widely distributed network of branches and financial centers in the UAE with a total of 19 financial centers.

• dunia’s state-of-the-art 24-hour Contact Center offers full customer telephony integration, which is voice and IVR enabled and provides full function capability for sales, service, and transactions to ensure maximum customer access and convenience from anywhere, anytime.

• dunia’s world-class internet banking platform provides 24-hour access with full flexibility and convenience.

• We have successfully positioned ourselves as a depository institution.

• We have focused on granular deposits with longer tenure to fund our asset side of the business and raised over AED 1,176 million in deposits.

• We have built several strategic alliances for product innovation, brand building and increased customer acquisition.

• dunia has a strong community focus through its “dunia Cares” Corporate Social Responsibility program and is widely recognized for the same.

• dunia is driven by a highly seasoned, diverse and entrepreneurial senior management team with multi - functional experience and expertise in multiple markets around the world.

• dunia has more than 1,750 employees.

• 91% of dunia staff are in customer facing roles enabling us to always be in sync with the evolving customer needs.

• Diversity is a management theme and not just a principle in dunia. Our diversity is represented by a healthy mix of gender, nationalities, diverse cultures and various backgrounds. dunia ensures bringing together this diverse team towards a singular objective of serving the customer.

• We are committed to growing the national talent pool.

• We run specialized programs under ‘Kawader dunia’ to develop UAE talent – Al Tamouh for fresh graduates, Al Waaed for part-timers and Al-Nukhba for experienced individuals.

• We have ensured high employee morale and successful retention.

• Training and development is a continuous activity in dunia. Training ensures that the most competent people are available to serve our customers. Our focus on development sees the increases in the potential of our people:

– Total 2015 training hours : 28,174

– Total 2015 training man-days : 3,522

– 2014 training days / FTE : 2.30

– 100% mandatory training coverage of code of conduct, information security, and compliance.

Financials

• Proven strong performance in top line and bottom line figures.

• We have a healthy and strongly growing revenue line. We have focused on building a higher, better quality and more sustainable revenue base, with a higher percentage of it coming from secured assets.

• Cost to income ratio has steadily fallen to 27.7%. Expenses show a decreasing and predictable trend.

• Our growth is increasingly self-funded through granular deposit growth.

• Efficiency ratios:

– Expense/Average Net Receivables in 2015 stood at 11.2% versus 12.8% in the financial year 2014 (12.9% improvement)

– Cost/Income in 2015 stood at 27.7% versus 31.6% in the financial year 2014 (12.4% improvement)

– Loan Loss Reserve of 3.3% of customer receivables as on 31 December, 2015 creates adequate loss absorption capacity.

• dunia has demonstrated excellence in its risk managed, analytics driven credit setup which is supported by our technology enabled and process led customer centric approach.

• Remote channels at dunia allow us to provide multiple touch points to our customers. Whether it be our 24-hour dunia Contact Center, network of 19 financial centers, website which has the latest information on all our offerings, social media and digital platforms or dedicated Relationship Managers who are committed to customer service, dunia is accessible anytime, anywhere…

• Our high level of automation capabilities reduces operational costs, while our revenues have been on an upward trajectory.

• We exercise risk management in all elements of credit cycle management. We focus on managing risks predictably and pricing our risks adequately.

• Our healthy Loan Loss Reserve of 3.3% of customer receivables as on 31 December, 2015 creates adequate loss absorption capacity.

• We have complied with all regulatory requirements in product and process design.

• dunia has put in place a well-defined and functioning corporate governance framework at both the Executive Management and the Board Level.

Our balanced scorecard enables us to closely track financial and franchise objectives, risk management, process evaluation and governance, human capital and overall strategic initiatives. The balanced scorecard is not just an approach or framework for us, it gives us a holistic view of our performance and enables us to track our progress from the beginning. Maintaining this balance is the cornerstone of our approach towards long term business sustainability, and has helped us succeed and become resilient.


03 DELIVERINGWITH FOCUS


With the growing demand for access to information anytime, anywhere, along with the convergence of social, mobile, big data and cloud, there is a digital disruption in all sectors. To stay relevant, we believe we must stay ahead of the expectations of digital natives by delivering in a manner that helps customers make smart decisions.

Innovation has always been at the forefront of everything we do. We continuously evaluate ourselves and ideate to reassure ourselves that we are relevant, efficient and resilient. With mobile devices leapfrogging other platforms, we have not only strengthened our mobility offerings but also embarked on a digital journey in line with the changing market dynamics. This digital journey gives us an opportunity to deepen our understanding of customer behaviour and preferences, in an age when customers communicate their needs and preferences in real time and expect instantaneous solutions.

We further enhanced our digital foundation and expanded our services by introducing products that address the instant mobility and access needs of our customers. Our innovation, duniaQwikCash placed the power of instant money with customers which enabled them to transfer money and make payments with just an SMS.

We delivered a new level of convenience for the customer by establishing a two-way communication via social media, instant messenger and mobile app platforms. We are proud that our customers are at ease communicating with us, like talking to a friend, making us a financial institution with a personal touch.

The duniaQwik suite of offerings, with innovative platforms including duniaQwikBuy and duniaQwikConcierge, cater to both personal and business needs of our customers. These platforms can be leveraged by businesses to expand their reach in the market, grow their customer base and directly market their product and services. Customers looking for information regarding products or services available around them can engage with businesses through the duniaQwik platforms.

STAYING AHEAD OF TIMES IN A DIGITAL WORLD

We achieved yet another milestone in our digital journey though the launch of the ‘dunia Mobile’ app that enables our customers to access information, place service requests and transact on the go. Customers can manage their accounts, pay bills and avail offers with the touch of a button. The app is designed for all customer needs that include financial and lifestyle needs.

In line with our customer segment-based approach, our digital offerings are also tailor-made for personal and business needs. With our suite of mobile apps and digital platforms, we provide new age digital solutions to match evolving customer needs.

While our mobile offerings enable us to transform customer experience, they have also helped us transform our own internal processes to become more efficient. Our managed services, cloud-based capability takes down all physical barriers and enables us to seamlessly and efficiently deliver to customers 24 hours a day, 7 days a week. With continued investments in our digital ecosystem by adopting new technologies and upgrading existing technologies, our platforms are responsive and adapt seamlessly to changing needs.


We treat every customer interaction as a learning experience that helps us know better what our customers think. Our focus has always been to move from delighting the customer to delivering a customer ‘wow’.

This is reflected in dunia’s customer satisfaction levels which are currently at an average of 80%+, as per our internal regular customer satisfaction survey results.

dunia has also been consistently featured in the top 10 of the Gulf News’ Service Honour Roll for the past five years and this bears testament to our commitment to service excellence and customer centricity.

Our core belief is to provide customers competent, timely and error-free service 24 hours a day, 7 days a week. Keeping customer convenience in mind, our customers have access to us through a range of channels that include 19 conveniently located financial centers, a 24-hour dunia Contact Center and digital channels that include the dunia Mobile app, dunia Online, social media networks, instant messenger, website, email and SMS. Our round the clock service and support to our customers is ably delivered by a team of trained staff who provide real-time personalised assistance with a human touch.

Service has always been our strength and we constantly invest in new technologies, redesign and optimize processes, implement automation for straight through processing which ensures rapid decision-making. With dunia being ‘digital’, we have instilled a special service team called the ‘duniaQwik’ unit to provide superior customer service for our mobile apps and digital platforms.

The performance of our seasoned service team is monitored against Key Performance Indicators (KPIs) to ensure consistent service experience across customers.

DELIVERING SEAMLESS SERVICE

Key Performance Indicators

• Problem resolution satisfaction

• Problem resolution timeliness

• Average turnaround time to resolve customer complaints

• Open customer complaints

• Customer satisfaction level


Over the years our growth has been rapid and we have consistently delivered seamless customer experience. Our award-winning technology platform that is built on a customized service oriented architecture enables us to stay true to our core value of customer centricity. While we believe in swift customer responses, we also ensure that our response to the customer is reliable and error-free. We have invested heavily to transform our technological capabilities, through the introduction of leading mobility solutions and social media channels, which enables deeper customer insights, allows for rapid deployment of customized offerings and ensures that we are operating at the cutting edge from a technological perspective.

Our frontline teams are empowered with a 360 degree view of the customer through our world-class CRM systems. A history of our interaction with the customer is maintained in our CRM system which therefore allows us to cross-sell or upgrade solutions to the customer based on profile, behaviour and eligibility. Our CRM has also been built with an automated analytics engine that enables the frontline teams to take instant and reliable decisions.

Our robust, agile and responsive technology platforms have supported our digital journey. In today’s dynamic environment where ideas need to be implemented with speed and accuracy, our modular systems, allow us to ‘Plug and Play’ new technologies. We constantly invest in upgrading our systems to consistently deliver a differentiated and superior customer experience.

Information security has been our focus and we ensure there is confidentiality, integrity and availability of customer information. For our systems to continue to remain robust, we have invested in implementing real-time synchronization of data within the organization, thereby enhancing our business continuity and improving our response time. Our customer transactions are also secure with all our credit cards being enabled with Chip and PIN technology. We have also enabled 3D Secure on our credit cards to ensure customer transactions done online are more secure.

With new product launches on the digital font, we have upgraded our technology infrastructure that continues to leverage new age technology. Our range of mobile apps are built on a customized platform and are designed to fulfil customer needs that range from financial to lifestyle needs. Technology in dunia drives our business operations and benefits all stakeholders. Customers benefit from efficient and error-free service, in addition to our internal processes being efficient and cost effective. Our technology processes are agile and help us constantly upgrade our digital offerings to stay ahead of the market.

POWERED BY RELIABLE TECHNOLOGY

To stay tuned with the latest developments:- Mobile and E-Commerce- Improved Analytics - Big Data- Smart Cloud based solutions- Social Media Strategy

INNOVATION

To achieve “value contributing” technology investments

VALUE IT

To align to and enable our Business Strategy to“Accelerate Growth”

BUSINESS STRATEGYTo keep our key application fit for purpose

APPLICATION

To enhance our Information & IT Security: - Better VAPT capability- Improved intrusion detection

RISK & SECURITY

To ensure we keep on running refresh the infrastructure &virtualization

INFRASTRUCTURE

BUSINESS STRATEGY

APPLICATIO

N

RISK

& S

ECU

RITY

INFRASTRUCTURE

VALUE IT

INN

OVA

TIO

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IT ROADMAP


Read more at www.dunia.ae/awards

The world is changing rapidly and with the availability of more information, greater connectivity with smart devices, communication across boundaries and increased choices, there is a change in the customer decision making process. Digital technology is entwined in the customer’s daily life and we can better understand customer’s preferences through ‘Big Data’.

At dunia, analytics is the foundation for our decision-making process that begins from the very first customer touch point. Each customer has a unique profile created in our data warehouse, which forms the basis for creating personalized solutions and pricing for specific customer needs. We extensively analyse customer behaviour throughout their association with dunia by the use of statistical and quantitative analysis, explanatory and predictive modeling to identify opportunities to reward the customer. Our reward programs are proactive, automated and seamless and help us provide more value to our customers. At different phases in the customer’s lifecycle, we progressively offer relevant solutions using cutting edge analytics tools. Through our comprehensive, world-class analytics frameworks, we deepen customer relationship and cross-sell relevant products with greater predictability in results, spanning risk, revenue and response.

dunia’s unique analytics model was featured in ‘Cutting Edge Marketing Analytics: Real World Cases and Data Sets for Hands On Learning’, a book by eminent professors at the University of Virginia’s Darden School of Management and published by the Financial Times (FT) Press. The University of Virginia’s Darden School of Management published a series of 3 case studies on the effectiveness of dunia’s cross-selling strategies in creating greater customer lifetime value.

The book and case studies about dunia’s strategic model reflect our strong business model and unique analytics capabilities.

DECODING THE MIND OF THE CUSTOMER


04 DEVELOPING WORLD CLASS TALENT


We reach out to our customers proactively and build meaningful relationships that make a positive impact in their lives. Our commitment is realized through listening and understanding their needs, and in the design and delivery of quality products and services. We treat them fairly and with respect.

CUSTOMER COMMITMENT

We reach out to our customers proactively and build meaningful relationships that make a positive impact in their lives. Our commitment is realized through listening and understanding their needs, and in the design and delivery of quality products and services. We treat them fairly and with respect.

VALUE OF OUR PEOPLEWe serve our community by respecting their traditions and enriching their lives through our work, spirit of volunteering and resources. We are a responsible player and believe action is better than words.

SERVING THE COMMUNITY

We have a passion to excel and strive for excellence in all that we do. We succeed when we have exceeded customer expectations. We encourage creativity and innovation and always “THINK BIG” to maximize our potential.

STRIVING FOR EXCELLENCE

Integrity and ethics are at the core of our value system and embedded in all that we do. We uphold dunia’s reputation with pride, and conduct our business with all stakeholders, customers and regulators with the highest ethical standards and transparency. We are accountable forour actions.

INTEGRITY AND ETHICS

Diversity is at the core of dunia that stems from our workforce bringing together a multitude of skillsets, experiences, geographic exposure, nationalities, gender and age. Our people, who represent over 33 nationalities communicating in 37 languages, power our growth. Our strong, diverse workforce brings together diverse perspectives with which we are able to understand, relate and deliver superior service to our customers. With the global workforce becoming younger and urbanized, millennials in the workforce are reshaping the way we think and influence the market. At dunia, we continuously nurture young talent, who we believe help us stay ahead of the market.

The culture at dunia is unique in that, we follow a ‘Culture of Candor’. We believe in open communication within the organization and we constantly challenge each other and ourselves. We are transparent and empower our people to voice their views and do the right thing. It is our strategic objective to uphold this culture in dunia and to do so, we invest in our people. We also ensure that we maintain diversity by hiring people to represent current demographics of UAE’s general population.

With a highly diverse team with varying cultures and perspectives, we are united by a common dunia vision, making us unique together as a team.

FOSTERING A UNIQUE CULTUREDUNIA CREDOOur employee engagement program is built on a foundation that encourages open communication and exchange of ideas, service excellence and commitment to the customer and society with integrity and ethics.

The dunia Credo is testament to this belief.


DUNIA TRAINING ACADEMYThe dunia Training Academy was institutionalized as a center for continuous learning and development and is a platform for our people to refresh, enhance and develop skills required to keep pace with the changing environment.

Just as we personalize solutions for our customers, each team member is assessed and undergoes a tailor-made training throughout his or her career in dunia. Each team member’s learning and development goals are aligned with dunia’s overall strategy and business objectives.

OUR PEOPLEARE OUR PULSE


TRAINING

FUNC

TIONA

L

COMPL

IANC

E

ORGANIZATIONAL

LEADERSHIP

All new hires are inducted and subsequently undergo training across four dimensions - Functional, Organizational, Leadership, Compliance.

We believe that through our training and development programs, dunia and its people mutually add value to each other. The dunia Training Academy also holds several workshops on skill building and enhancement that are conducted by distinguished speakers and professors from leading institutions.

To ensure the long term success and sustainable performance of our teams, high performing individuals are sent on a regular basis to development and learning programs at top tier institutions across the world, including the University of Chicago Booth School of Business, INSEAD and the Indian Institute of Management Ahmedabad.

DEVELOPMENT OPPORTUNITY FOROUR FRONTLINE HEROESOur frontline teams are our heroes. For them, we run a unique career advancement program titled Development Opportunity for Operations, Risk and Sales (DOORS). This two year career acceleration program in core banking and financial services functions equips participants to perform better and raise their potential to handle roles with greater complexity, accountability and problem solving.

A career advancement program


DUNIA MANAGEMENT ASSOCIATE PROGRAMWe are a young company with fresh ideas, innovative products and accelerated growth. Every year, we invest in hiring young leaders from top-tier business schools as part of the Dunia Management Associate Program, who undergo rigorous training across functions in leadership positions. This leadership program brings out the best in our young talent who in turn help us continuously innovate and stay ahead of current trends.


KAWADER DUNIA

Our undergraduate program provides part-time opportunities for students to gain work experience at dunia whilst continuing their studies. The program covers a range of learning modules that include teamwork, marketing, credit and risk management, corporate governance and brand building.

AL WAAED

Our career development program, specifically designed to help develop the careers of experienced, seasoned professionals. These individuals are able to enrol in our leadership programs and external business school diplomas.

AL NUKHBA

Our graduate learning program, providing students with an opportunity to gain real-life experience working in the financial services industry. Its aim is to build world class business leaders and commences with a three month management certification program.

AL TAMOUH

dunia places special emphasis and commitment to the UAE’s strategic priority of developing UAE talent and ensuring that UAE Nationals become future leaders. For a wonderful nation like the UAE, that embraces and encourages talent from across the world, we are committed to contributing to the development of this great economy. dunia being an equal opportunity workplace hires the best national talent, nurtures and empowers them to help shape the future of the UAE.

We run various programs for our UAE National talent, to provide learning and career development through different life stages. The ‘Kawader dunia’ program provides a wonderful opportunity for UAE nationals to learn and grow professionally under the wings of a leading financial services provider. It is a tailor-made program crafted to elevate skill sets and create future leaders.

FOCUSING ON NATIONAL DEVELOPMENT


Our Emirati employees are on a fast track and are actively involved in strategic decision making, roundtable conferences and CEO meetings in order to expand their knowledge and experience. We aim to be the employer of choice for the best Emirati talent across the country, and career development and progression of our national employees is therefore a fundamental part of our talent strategy. In 2015, as part of our commitment to building a strong Emirati workforce, we continued to focus on campus engagements to recruit the best Emirati talent to fuel our future growth.


Today’s women manage to have it all and at dunia, we recognize their importance in societal and economic progression. We focus on empowering women across all positions in the company. Moreover, women bring a fresh outlook and balance to our business approach, decisions and drive execution excellence.

Women constitute a significant portion of our workforce, handling critical leadership positions and driving key initiatives successfully. As an equal opportunity employer, we ensure our environment, though diverse, is inclusive and promotes gender equality.

SUCCEEDING IN AN INCLUSIVE ENVIRONMENT


05 DETERMINED TO CREATE AN IMPACT


The dunia Cares pledge is to help other people with sincerity, to make a meaningful difference, enrich lives, empower people and enable success. We continually live by our dunia Cares credo, to be a responsible corporate citizen, to promote active participation in community initiatives and enrich lives through people and our environment.

We focus on a few key pillars:

We lead by example through several initiatives including National Blood donation drives, empowering through education with the Dunia Young Business Leaders Program, Dunia Young Leaders Scholarship, Dunia Emirati Leaders Scholarship and the CIS-Dunia Young Business Leaders Challenge programs. Our commitment to society is not limited only to the UAE. dunia, in collaboration with UAE Red Crescent organized a fund raising drive for the people of Nepal whose were disrupted with the earthquake. Funds raised were utilised to rehabilitate survivors of the earthquake.

HEARTHANDS

PROMISESWAYS TOMAKE ITHAPPEN

OBJECTIVES

- We use our hands to make a difference

HANDS

- To live out our credo- To be a responsible and involved corporate citizen- To enrich lives through people and our environment- To promote active participation in community initiatives

OBJECTIVES

- To enrich lives- To empower people- To enable success

PROMISES

- Social enhancement- Wellness- Education- Environmental sustainability- Building partnerships

WAYS TO MAKE IT HAPPEN

- Our heart beats to help others (we carewith sincerity)

HEART1

12

3

4

5

2

3

4

5

• Social enhancement

• Promotion of good health and wellness

• Raising education standards

• Encouraging environmental sustainability and building new community partnerships.

DUNIA CARESAt dunia, we do not only borrow from the future, but we actively contribute towards it. Corporate Social Responsibility (CSR) is not just an activity for us. We are passionate people who want to make a real difference to the community and the future.

“TO CARE AND MAKE A DIFFERENCE IN THE LIVES AND FUTUREOF OUR COMMUNITY”

is our dunia Cares Credo which makes giving back to the community a core value in dunia.

We believe in serving our community by respecting their traditions and enriching their lives through our work, spirit of volunteerism and resources.

dunia Cares Pledge


SHAPING TALENT EARLYDUNIA YOUNG BUSINESS LEADERS PROGRAM

In May 2013, we launched the Dunia Young Business Leaders Program and given the great success of the program, it has now become an annual offering. In 2015, we successfully ran the third edition of our award winning Dunia Young Business Leaders Program. Through this program, we identify and nurture the future business leaders of tomorrow.

Students entering 11th and 12th grade as well as 1st and 2nd year university students engage with business leaders, entrepreneurs, industry leaders, investors, innovators, consultants and other practitioners to learn from their real world experiences. Through the program, students enhance their leadership, strategy, innovation, team work, communication, execution and conceptual skills.

With every passing year, we have personally witnessed transformation in the lives of students we have mentored through these initiatives. We are proud that they will remain ambassadors and dunia scholars for life.

We are passionate about nurturing talent and we believe that it is most impactful when we mould young minds during their foundation at school. By shaping their thoughts at the very beginning, we are sure to positively influence the upcoming generations to change society forever. Over the years, we have touched the lives of young minds through our various initiatives on the education front.


DUNIA YOUNG LEADERS SCHOLARSHIP2015 began with dunia announcing scholarships of over AED 400,000 through the Dunia Young Leaders Scholarship and the Dunia Emirati Leaders Scholarship Programs. This first of its kind program was launched in collaboration with schools and universities in the UAE to encourage and empower ambitious, young, bright minds.

The Dunia Young Leaders Scholarship Program was offered to support education across all age groups, purely based on talent. All scholarship candidates were assessed through a competitive evaluation process that included interviews by an independent Scholarship Committee. The program received a diverse, multicultural group of applicants spanning Nursery school to PhD students at universities, with 39 candidates receiving scholarships.

True to our commitment to develop national talent, the Dunia Emirati Leaders Scholarship was awarded to one outstanding female scholar. A scholarship included a two year study grant of up to AED 250,000, a monthly stipend and an offer to work with dunia upon graduation. Through these programs, we enabled candidates to pursue their dreams freely and inspired them to shape their futures.

CIS – DUNIA YOUNG LEADERS CHALLENGEWe practice leadership through influence and yet another milestone in this journey was the CIS-Dunia Young Leaders Challenge program offered in collaboration with the Cambridge International School (CIS), Dubai. This five week leadership program for Grade 8 students was designed to bring out their leadership and entrepreneurial skills. The program was structured to help students think out of the box and develop an entrepreneurial mindset. Students were mentored by their teachers and the dunia team throughout various stages of execution of their business plan. Through this program, the core principles of leadership, business and strategy were imbibed in the thought process of students.

we’re different.

Call 04-4238642 (24 hours) Click www.dunia.ae Financial centers across Abu Dhabi, Al Ain, Dubai and Sharjah

Eligible students: •Currently enrolled in school in UAE (Nursery, KG1 - Grade 12) •Currently enrolled in University in UAE or overseas (Bachelor’s, Master’s Degree or PhD)

Scholarship period: Academic year 2015 – 2016Scholarship grant: Amount equal to the actual tuition fee (up to a maximum of AED 20,000 per grant) for the academic yearApplication form: Available at www.dunia.ae/scholarshipApplication deadline: July 15th, 2015

APPLY NOW... Email application to: [email protected]

Applications open!

Dunia Young Leaders SCHOLARSHIPBring out the leader in your child

Up to 20 student scholarships of maximum AED 20,000 each

Credit Cards • Personal Loans • Car Loans • Flexi Loans • Wages Protection System • Labour Guarantees • Corporate Deposits


06 DRIVEN BYEXCELLENCE


MAINTAINING HIGH STANDARDS OF GOVERANCESince launch in 2008, transparency and credibility have been core to our design through world-class governance, risk and compliance practices. Through experience, we have learnt that the best decision making occurs in an environment of openness, robust risk management and compliance procedures.

As a company with continuous innovation and rapid growth, we constantly enhance and upgrade our risk management, governance, compliance and assurance frameworks. In addition to internally developed procedures and systems, we adhere to a number of protocols including:

• IFRS (International Financial Reporting Standards) • IAASB (International Auditing and Assurance Standards)

With responsible lending ingrained in our DNA, we are ever-vigilant in safeguarding our customers’ interests. A robust governance framework based on four pillars of Strategy, Compliance, Performance and Accountability has ensured that our philosophy of Treating Customers Fairly manifests itself across all aspects of the credit cycle.

WE TREAT OUR CUSTOMERS FAIRLYOne of our core risk management frameworks is the Treating Customers Fairly (TCF) policy, which is our commitment to our customers that we will provide financial products that meet their specific needs, and that we will continue to be responsible lenders.

The TCF framework also ensures that customers are sold products in a fair and transparent manner with full disclosure of terms and conditions. This Code of Conduct not only aids the avoidance of risk but also acts as a platform for customer service excellence, which in turn assists dunia in retaining its customer base.

Our senior management team personally handles customer complaints and ensures that all customer concerns are investigated and resolved immediately.

SUSTAINABLE GROWTH WITH ROBUST RISK MANAGEMENTPredictable and sustainable growth entails a robust risk management framework. A two-tier framework oversees the efficient execution of our corporate strategies, while ensuring transparency and accountability at every stage. The first tier in this setup comprises of the Management Committees that comprise the following:

• Assets and Liabilities Committee

• Business Risk and Compliance Committee

• Credit Risk Committee

• Product Development Committee

• Operating Review Committee

• IT Steering Committee

• Human Resources Committee

• Vendor Management Committee

• Customer Service and Quality Forum

First L

ine of Defense

Third Line of Defense

R

isk and Control

S

elf Assessment

Business Risk and

Compliance CommitteeSecond Line of Defense

I

nternal Audit

The Management Committees at dunia are designed to ensure that the business is run in the most efficient, profitable and sustainable manner possible.

The second tier consists of the Board of Directors’ Committees that ensure that strategic goals are set and delivered through smooth business operations. These committees include:

• Audit Committee • Risk Management Committee • Employee Remuneration and Nomination Committee

Our Corporate Governance structure provides for the independent handling of the functional portfolios, while catering for continuous sharing of information and knowledge, ensuring that accountability and decision making go hand-in-hand, and retaining ultimate responsibility to the Board. The Board of Directors, which has the ultimate responsibility to uphold the company’s objectives, provides strategic direction to dunia and facilitates the smooth running of all operations through the functioning of its sub-committees.

We manage risk prudently through our unique ‘Three Lines of Defense’ to oversee strategic, financial and operational risks. As a first line of defense, risks in each business unit are managed using a Risk and Controls Self-Assessment (RCSA) mechanism. Periodic RCSA reviews are held on a regular basis and any potential breaches are directly forwarded to management for review and intervention. This helps us manage risk at an early stage. The second line of defense is implemented through the management team with the Business Risk & Compliance Committee (BRCC). Finally, the third line of defense through the Internal Audit function provides assurance to the Board of Directors on the control environment by putting together a risk based assurance cycle for each reviewable entity.


ENVIRONMENT

Is Internal Audit operating an environment that ensures full o

rganiza

tiona

l

independence and maximum productivity?

What is

the internal profile of Internal Audit?

GOVERNANCE & REMIT

Does Internal Audit have robust governance mechanisms in

place to c

ontr

ol i

ts

activities and deliver the right control of assurance and advice

?

PEOPLE &KNOWLEDGE

PROCESSTECHNOLOGY

COMMUNICATION& REPORTING

PERFORMANCEMANAGEMENT

WE COMPLY PASSIONATELYWe believe in complying both in letter and in spirit with the regulatory framework. Our independent compliance unit proactively identifies and evaluates compliance risks and helps us maintain the highest standards of Corporate Governance, while ensuring confidentiality, transparency, integrity and continuity of business.

Compliance encompasses the 9 pillars of Vendor Management, Record Keeping, Outsourcing Management, Information Security Management, Legal, Segregation of Duties, Anti Money Laundering & Know Your Customer Documentation Management, Continuity of Business, and Product Programs.

PROACTIVE ASSURANCE ON OUR PROGRESSAn independent and proactive assurance mechanism allows us to ensure we have effective risk management controls in place as we blaze ahead in our customer-centric approach. Our Internal Audit framework allows us to strike a balance between accountability and responsiveness of the business to both customers and other stakeholders, while providing assurance to the Board of Directors and the senior management. dunia conducts comprehensive internal audits so as to provide its stakeholders with even greater assurance of the validity and strength of its internal risk and control processes.

Our internal business unit reviews ensure that every process of the company’s operations is assessed for risk and that it meets with regulatory requirements. As illustrated with our Strategic Maturity Assessment & Review Tool (SMART), we believe that best-in-class audit functions should focus on achieving maturity and excellence across six domains.

Two foundation domains which are pervasive in nature:

• Environment • Governance

Four pillar domains covering specific aspects:

• People Knowledge • Process Technology • Communication/Reporting • Performance Management

The Compliance organization works closely with other assurance providers to ensure streamlined delivery of assurance activities through an integrated assurance framework. This framework has been crafted using Practice Advisories based on Standard 2050 from the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.

Regulatory Compliance Code of Conduct

Business Practices Culture and Training

Stimulating, controllingand monitoring the observation oflaws, regulations and internal rules

with a view to protecting the reputation ofdunia and facilitating a corporate ethos based

on the highest standards of integrity

Prod

uct P

rogr

ams

Vend

or M

anag

emen

t

Lega

l

Out

sour

cing

Anti

Mon

ey L

aund

erin

g

Reco

rd M

anag

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Segr

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ion

of D

utie

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Info

rmat

ion

Secu

rity

Cont

inui

ty o

f Bus

ines

s


STRATEGIC COST MANAGEMENT THROUGHOUR DIGITAL JOURNEY

Our strong balance sheet and consistent delivery of shareholder value is indicative of our successful implementation of strategic cost management. As we embark on our digital journey, we have invested in digital technologies to support our expansion plans in a sustainable manner.

We constantly evaluate and enhance processes to implement automation where required. Our processes are refreshed and revamped to identify gaps, inefficiencies and cost drivers to optimize expenditure. This ensures that we remain as a lean, low cost provider where revenue grows at a much faster pace compared to expenses, thereby maintain a strong positive operating leverage.

We constantly invest in upgrading and enhancing our processes, products, scalable infrastructure, service frameworks and IT architecture to ensure that our customers benefit from value-based pricing, and receive benefits that outweigh the associated costs. Our investment in a range of mobile apps and other digital solutions has witnessed a shift in customer requests to digital channels, which in turn helps us reduce operational costs associated with routine customer servicing and focus our efforts on activities that ‘wow’ the customer. Our strategic and early investment in cutting-edge technologies and straight-through-processing (STP) has enabled us to implement paperless processing, faster decision making and error-free, timely response to our customers.

Strategic cost management and a strong focus on process efficiencies is what will enable us to continue to be a predictable, profitable and sustainable business.


07 DISCOVERINGNEW HEIGHTS


DuniaFinance LLC -

DardenSchool ofBusiness

Building thedunia Brand

- IIMA

DuniaFinance LLC(C) - Darden

School ofBusiness

DuniaFinance LLC(B) - Darden

School ofBusiness

The Birth ofdunia (A) -

SMU

The Birth ofdunia (B) -

SMU

Case Studies about dunia by leading business schools globally

RECOGNIZED FOR OUR IMPACT ON SOCIETY At dunia, we “empower people, enable success and enrich lives” and all our initiatives are guided by this principle. We believe that everything we do must create a positive impact on people and the society at large by creating value and making a difference in their lives. The value that our products and services create for our customers, the young minds we shape and impact through our leadership and scholarship programs, the perception of people and society about us and the recognition that our company and our people receive helps us validate our actions.

DOING GOOD WHILE DOING GOOD BUSINESSAt dunia, sustainability has become ingrained in all that we do. Our guiding principle to ‘do good while doing business’ lies at the heart of our business and is an integral part of our corporate culture and identity. We therefore approach the concept of sustainability not just from a socio-economic context but from the wider objective of empowering people, enabling success and enriching lives.

The long term goal of sustainability therefore drives our financial and operational endeavors, influences strategic decision making, employee recruitment and retention policies, and the direction and momentum of our growth plans. Our strategy is to do things differently, to be dynamic, to care, and to genuinely invest in our customers, communities, and the multi-cultural country we call home. It is our belief that if we are a force for good in the world, the return for our business will be much more significant, offering enhanced predictability, confidence, employee and customer loyalty, and most importantly, sustainability.

SETTING GLOBAL BENCHMARKS Our focus on establishing credibility has been consistently recognized with multiple academic case studies being written about dunia’s unique business model, which has become a benchmark in leading business schools across the globe. The Indian Institute of Management – Ahmedabad (IIMA) recently published a case study about dunia’s journey of building the dunia brand and how dunia has provided a unique customer experience through innovative marketing communication and advertising strategies. A total of 6 case studies have been written about dunia and published by leading business schools including Singapore Management University, University of Virginia Darden School of Business and The Indian Institute of Management – Ahmedabad.

CONSISTENTLY DELIVERING EXCEPTIONAL SERVICEAs a testament to our consistent service excellence, Gulf News, a leading publication in the UAE has ranked dunia as an “A category” service provider for exceptional service over the last five years. This award is a tribute to our focus on ‘wowing’ our customers.

BUILDING A STRONG FRANCHISEFitch Ratings upgraded dunia’s credit rating in 2015 from BB- to BB, reflecting dunia’s strong portfolio growth and track record, capital ratios, profitability, solid financials and capable management. Fitch affirmed the credit rating of nine UAE banks in 2015, making dunia the only non-bank financial institution to be upgraded in the UAE banking sector.

LEADERSHIP WITH IMPACTRajeev Kakar, Managing Director & CEO, Dunia Finance was awarded as an ‘Innovator’ in the category of ‘Finance Innovation’ at the 2015 ‘Indian Innovator Awards’ hosted by the Entrepreneur Middle East. The Indian Innovator Awards acknowledge leaders who set benchmarks and have made significant contributions to the Middle East business arena.

Rajeev Kakar was recognized in the ‘Forbes Middle East Top 100 Indians in the Arab World Award’ and was ranked #18, consistently being recognized for his leadership and innovation in the last five years.


We dared to dream big and dunia was born. With focus, energy, passion, creativity, innovation, and execution excellence, we remain committed to achieving results. Every year, we move closer to our dream of empowering people, enabling success and enriching lives and in 2016 we continue to focus on expanding scope, scale and transforming the core, while reinforcing the dunia brand. We will achieve these objectives through continued investment in talent, digital capabilities and new age technologies that will help us further enhance our Social, Mobility, Analytics and Cloud capabilities to ‘wow’ our customers and deliver best in class service. We look forward to discovering and achieving greater heights this year.

LOOKING AHEAD


dunia has delivered another strong financial performance in 2015 in the face of a challenging macro environment driven by strong revenue growth with further improvements in overall operating efficiency resulting in a full-year net income of AED 217.4 Mln in 2015 (compared to AED 191.3 Mln in 2014).

This 13.6% increase in net income in 2015 reflects a robust and highly broad-based performance across all financial metrics and key performance indicators – specifically covering revenue, expenses and return on equity, and across the key efficiency ratios of cost-income, operating leverage, risk adjusted yields and loss absorption capacity.

Additionally, growth in loans and advances to customers remained selective, prudently paced and predominantly self-funded through customer deposits, to ensure performance predictability and sustainability of earnings in 2015.

FINANCIALTRENDS


dunia’s performance in 2015 was primarily driven by the strong growth momentum in its top-line, with revenue and balance sheet growth being underpinned by the success in selectively acquiring new customers, deepening existing customer relationships, and driving cross-sell to maximize value creation through deeper and more focused customer relationships.

Moreover, the anticipatory measures implemented by Management in recent years to safeguard the business and deliver predictable results continue to positively impact dunia’s business performance in 2015. These strategic realignment measures include tight customer selection criteria, focus on increasing secured assets, risk-adjusted pricing, self-funding growth through customer deposits, strategic cost management, prudent impairment provisioning, and incremental value addition by diversifying into new lines of business.

dunia’s robust financial performance was further driven by several strategic initiatives such as the introduction of innovative products to raise customer deposits, enhancement of the existing product suite and diversifying fee-based revenue sources; expanding distribution capabilities (both proprietary and through alliances), and continued focus on raising granular, tenured and lower-cost customer deposits to self-fund business growth.

While dunia has achieved record profitability in 2015 and the underlying business momentum remains strong across all performance parameters, the environment continues to be extremely challenged as we enter 2016.

2015 Summary Financials

Amounts(in AED Mln)

2009 2010 2011 2012 2013 2014 2015

Absolute Improvement

(2015 v/s 2014)

% Improvement

(2015 v/s 2014)

CAGR(2009 - 2015)

Customers (‘000s) 28.9 57.7 88.6 113.6 137.8 164.6 210.7 46.1 28.0% 39%

Loans & Advances to Customers 173.1 356.7 555.9 757.2 1,025.3 1,504.8 2,012.1 507.3 33.7% 51%

Customer Deposits 32.2 74.1 241.6 414.0 515.1 828.7 1,176.1 347.5 41.9% 82%

Revenue 45.6 106.0 205.5 281.4 353.9 506.7 723.2 216.5 42.7% 58%

Operating Expense 136.6 151.7 133.2 135.9 149.3 159.9 200.0 (40.1) (25.1%) 7%

Net Income (116.5) (87.8) 18.1 73.4 118.5 191.3 217.4 26.1 13.6%

Operating Expense % 141.1% 54.9% 28.1% 20.4% 17.1% 12.8% 11.2% 1.7% 12.9%

Cost/ Income % 299.4% 143.1% 64.8% 48.3% 42.2% 31.6% 27.7% 3.9% 12.4%

Cost of Credit % 26.3% 15.3% 11.5% 10.8% 9.9% 12.5% 17.1% (4.6%) (37.0%)

Return on Equity % (32.7%) (29.2%) 6.7% 23.1% 28.9% 35.6% 32.2% (3.4%) (9.5%)

• Fifth year of profitability, with net income of AED 217.4 Mln (13.6% y-o-y improvement)

• AED 59.0 Mln (AED 107 per share) interim dividend paid for 2015 (fifth year of dividend track record)

• 28.0% y-o-y growth in customer base, to 210.7k customers

• 33.7% y-o-y growth in net loans and advances to customers, to AED 2,012.1 Mln

• 41.9% y-o-y growth in customer deposits, to AED 1,176.1 Mln

• 42.7% y-o-y growth in revenue, to AED 723.2 Mln

• Cost-income ratio further reduced to 27.7% (resulting in 17.7% positive Operating Leverage)

• Loss absorption capacity is at a healthy 1.7x

• Debt/Equity is at 1.8:1, representing a conservative leverage ratio

• 3.3% ratio of impairment reserves to net loans and advances (v/s statutory minimum of 1.5%)

• A very healthy Return on Equity at 32.2% p.a.

dunia achieved its fifth year of profitability in 2015 with net income of AED 217.4 Mln (which is AED 26.1 Mln, or 13.6%, higher versus 2014), and delivered a return on equity of 32.2% p.a.

This strong y-o-y performance in 2015 was driven by high double-digit top-line growth (customer base by 28.0%, loans and advances to customers by 33.7%, customer deposits by 41.9% & revenue by 42.7%).

Reflecting continuously increasing cost efficiencies in 2015, cost-income ratio reduced to 27.7% from 31.6% in 2014.

While the y-o-y financial performance in 2015 was strong, over a six-year period from 2009 to 2015, dunia’s customer base has grown at a CAGR of 39%, loans and advances to customers by 51%, customer deposits by 82%, and Revenue by 58%.

1. KEY FINANCIAL HIGHLIGHTS IN 2015

While dunia’s y-o-y results in 2015 illustrate strong delivery on all financial performance metrics, the subsequent sections provide a more comprehensive analysis of underlying performance trends across key business drivers, to facilitate and enable a better understanding of dunia’s performance trajectory and business momentum expected in 2016 and beyond.


R E V E N U E( A E D M L N )

2015 revenue of AED 723.2 Mln(43% higher v/s 2014)

43% revenue growthin 2015 vs. 2014

6.245.6

106.0

205.5281.4

353.9

506.7

723.2

2008 2009 2010 2011 2012 2013 2014 2015

750

600

450

300

150

0

Qtr4-2015 revenue of AED 195.1 Mln (33% higher vs. Qtr4 2014)

33% revenue growthin Qtr4-2015 vs. Qtr4-2014

200

160

120

80

40

015.9

33.7

58.776.8

96.9

147.2

195.1

Qtr4-09 Qtr4-10 Qtr4-11 Qtr4-12 Qtr4-13 Qtr4-14 Qtr4-15

4.9

12.0

20.2

26.331.9

50.5

64.1

Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15

Dec-2015 revenue of AED 64.1 Mln(27% higher vs. Dec-2014)

27% revenue growthin Dec 2015 vs. Dec 2014

65

52

39

26

13

0

2. STRONG TOP-LINE GROWTH

2.1 CUSTOMERS AND LOANS & ADVANCES TO CUSTOMERSIn a short span of 8 years since commencement of business, dunia’s customer base has grown to 210.7k in 2015 – representing a 28.0% increase vis-à-vis 2014. This double-digit customer growth was driven by several factors, such as: strong acquisition momentum of new customer relationships from dunia’s proprietary and partner channels; opening new customer segments and rolling out new products and services; improvements in productivity and efficiency of the sales and distribution infrastructure; and the increased acquisition through e-channels, social media tools and mobile phone based channels.

Total loans and advances to customers have increased to AED 2,012.1 Mln in 2015 – representing a 33.7% growth compared to 2014. Overall growth in loans and advances to customers was underpinned primarily by dunia’s success in selectively acquiring new customers, deepening of existing customer relationships, through cross-sell to increase product penetration per customer and by ensuring a loyal and growing customer base.

These targeted efforts to maximize customer relationship value were implemented in-line with dunia’s “test, grow and accelerate” approach, and facilitated through extensive leverage of dunia’s proprietary strategic analytics capabilities.

2.2 REVENUEdunia generated record-breaking revenue of AED 723.2 Mln in 2015 – representing a robust 42.7% increase vis-à-vis 2014. Revenue growth in 2015 was broad-based and diversified, driven by strong balance sheet growth, healthy yields on loans and advances to customers, steadily increasing income from fees and a stable cost of funds.

In addition to robust y-o-y revenue growth in 2015, the revenue momentum in recent months remains equally strong (Qtr4- 2015 revenue of AED 195.1 Mln being 33% higher v/s Qtr4- 2014; Dec- 2015 revenue of AED 64.1 Mln being 27% higher v/s Dec- 2014) – indicating continued strong forward revenue growth in 2016.

C U S T O M E R S( 0 0 0 s )

Loans and advances to customers increased toAED 2,012.1 Mln in 2015 (33.7 % y-o-y growth)

L O A N S & A D V A N C E S T O C U S T O M E R S( A E D M L N )

28.0% customer growthin 2015 vs. 2014

210

180

150

120

90

60

30

0 2008 2009 2010 2011 2012 2013 2014 2015

3.1

29

58

89

114

138

165

211

Customer base increased to 210.7k in 2015 (28.0% y-o-y growth)

33.7% receivables growthin 2015 vs. 2014

2,100

1,800

1,500

1,200

900

600

300

0 2008 2009 2010 2011 2012 2013 2014 2015

21173

357

556

757

1,025

1,505

2,012

2.3 REVENUE QUALITYdunia has persistently focused not just on achieving strong y-o-y growth in absolute revenue, but also on building a richly diversified revenue base, through: maintaining healthy yields on loans and advances to customers, implementing risk-tiered pricing to maximize risk-reward balance, and increasing contribution from fee-based revenue sources.

Diversifying the revenue mix enables dunia to build greater resilience to margin compression risks and ensures greater capacity to absorb any sudden volatility in operating or credit costs, while helping achieve strong operating leverage – all critical factors for driving predictable, profitable and sustainable growth.

dunia’s 2015 revenue mix illustrates the success of this strategy – while achieving a 42.7% y-o-y growth in absolute revenue, aggregate yields (interest and fee income) on loans and advances to customers remained at a healthy 42.8% p.a. with a 13% growth in contribution from fee over 2014.

The contribution from fee income is at a robust 24.5% of total revenue (4% y-o-y growth).

Q4’15 expenses are flat versus Q4’14, reflecting

continued efficiencies of operations & strategic cost

management initiatives


Flat to last year

36.534.6

32.5 33.6

46.3

100

80

60

40

20

0

39.640.3

3. GROWTH IN BUSINESS DRIVERS CONTINUE TO OUTPACE GROWTH IN EXPENSES

3.1 OPERATING EXPENSESdunia’s total operating expenses were at AED 200.0 Mln in 2015 – representing an increase of AED 40.1 Mln in absolute expenses vis-à-vis 2014. This modest growth in expenses in a year when revenues increased by 42.7% was a result of the Management’s continuous focus on strategic cost management initiatives, which not only helped in keeping a tight control on absolute expenses, but also enabled maximum utilization of infrastructure and capabilities already built while continuing to invest in key infrastructure and franchise enabling initiatives. This ongoing discipline has ensured that top-line growth always exceeds growth in expenses, resulting in strong operating leverage and sustainable profitability.

N E T I N T E R E S T M A R G I N ( N I M ) & F E E ( % )

Steady growth trend on Revenue Yields in 2015(Interest yield flat y-o-y & Fee yield grew 13.4% y-o-y)

FeeNet interest margin

2009 2010 2011 2012 2013 2014 2015

13% Fee yield growthin 2015 vs. 2014

% p.a

50

40

30

20

10

08.0 8.3 8.1 7.9 7.9 8.5 9.6

27.4 30.1 32.3 31.3 32.0 33.5 33.2

Flat NIM growth

R E V E N U E( A E D M L N )

FeesInterest

AED 177.0 Mln of fee income in 2015 (24.5% contribution to total customer revenue)

780

650

520

390

260

130

0

41% revenue growthin 2015 vs. 2014

2008 2009 2010 2011 2012 2013 2014 2015

37.97.7

82.9

23.1140.7

64.8 192.0

89.4

259.7

94.2387.5

119.2546.3

177.0

0.35.9

E X P E N S E S( A E D M L N )

2015 expenses of AED 200.0 Mln grew modestly while supporting a

balance sheet footings growth of 36.6% , customer growth of 28%

and revenue growth of 42.7%

120.1136.6

138.9133.2 135.9

149.3

2008 2009 2010 2011 2012 2013 2014 2015

375

300

225

150

75

0

159.9200.0


• Consistently positive operating leverage since inception, setting the trend for consistent future earnings growth.

• 2015 operating leverage of +17.7%

O P E R A T I N GL E V E R A G E

AED Mln

750

600

450

300

150

0

2008 2009 2010 2011 2012 2013 2014 2015

RevenueExpense %

51% positive operating leveragein 2015 vs. 2014

120.16.2

136.645.6

138.9106.0

133.2

205.5

135.9

281.4

353.9

149.3159.9

506.7

200.0

723.2

%

125

100

75

50

25

0

2015 2014 2013 2012 2011 2010

Consistently positive operating leverage

106.0

34.9

15.9

36.1

17.7

121.3

C O S T / I N C O M E R A T I O ( % )

2015 cost-income reduced to a very healthy 27.7% versus

31.6% in prior year (a reduction of 12.4% y-o-y)

12% lower Cost / Incomein 2015 vs. 2014

300

240

180

120

60

0

299.4

130.9

64.8

48.342.2 31.6 27.7

2009 2010 2011 2012 2013 2014 2015

24% lower expense % in Qtr4-2015 vs. Qtr4-2014

23% lower Cost / Income in Qtr4-2015 vs. Qtr4-2014

Q4-15 cost-income reduced to 20.6%(23.2% lower vs. 2014)

Q4-15 expense% reduced to 8.3% (24.4% lower vs. 2014)

Recent quarters show an even more healthy trend on expense efficiency, which will

lead to positive earnings trend in the future

300

240

180

120

60

0

91.2

229.5

11.0 8.326.9 20.6


41.2

102.8

24.6

55.4

18.443.8

19.047.8

3.2 STRATEGIC COST MANAGEMENTThe above trends highlight the tight expense discipline and cost controls implemented at dunia since inception, resulting in strongly positive operating leverage in 2015 – as y-o-y expenses are stable on an absolute basis despite continued strategic investments in building long-term capabilities through new products and services, while achieving robust growth in customer base, loans and advances to customers, customer transactions and processing volumes.

Select examples of this on-going strategic cost management approach include: increased focus on front-line hiring (and only for customer-facing and revenue-generating roles), realignment of costs towards the front-end, stretch assignments for senior team through consolidation of roles, rigorous cost re-negotiations with external service providers such as IT vendors and landlords, continued tight controls and monitoring on all discretionary expenses and the increased digitization of services through the use of new-age technology leveraging social media, mobility, big data and analytics, cloud solutions and straight through processing to drive greater efficiency while increasingly becoming a “low cost” provider.

As a result of these sustained efforts on increasing revenue while simultaneously reducing expenses (a “spend-smart” discipline), dunia has achieved continued strong performance in 2015 across key efficiency ratios, such as: cost-income, expense to customer assets, and operating leverage.

3.3 EXPENSE EFFICIENCIESdunia’s Cost-Income ratio, a key indicator of overall financial and operating efficiency, has further reduced to 27.7% in 2015 – representing a 12.4% improvement compared to 2014. Similarly, dunia’s ratio of expenses to loans and advances to customers, an equally important indicator highlighting economies of scale, has further reduced to 11.2% p.a. in 2015 – representing a 12.9% improvement vis-à-vis 2014.

Both these ratios are a strong reflection of the success achieved in 2015 from the on-going focus on strategic cost management initiatives and the “spend-smart” discipline being followed at dunia, indicating continued strong expense efficiencies in 2016.

3.4 OPERATING LEVERAGE (JAWS)Operating leverage is defined as the gap between revenue growth and expense growth over a specific time period. A positive reading implies that revenues are growing faster than expenses, which is a basic health-check on sustainability of the business’ profit growth trajectory. Therefore, operating leverage is another key indicator of operating efficiency in a business.

dunia has achieved an operating leverage of +17.7% in 2015, indicating that its y-o-y revenue growth rate far exceeds the rate of growth in expenses.

E X P E N S E / C U S T O M E R R E C E I V A B L E S ( % )

2015 expense/customer assets reduced to 11.2% p.a.

(12.9% lower v/s 2014)

13% lower expense/customer receivables % in 2015 vs. 2014

150

120

90

60

30

0

141.1

50.3

28.1 20.4 17.1 12.8 11.2

2009 2010 2011 2012 2013 2014 2015

4. PORTFOLIO QUALITY AND YIELD

4.1 COST OF CREDITThe Management has consistently adopted a policy of timely recognition of inherent credit losses in the portfolio, which has helped in building adequate loss absorption capacity to insulate the portfolio from inherent as well as unforeseen stresses.

As a result of this prudence, dunia has built an impairment reserve of AED 68.9Mln which translates into an NPL cover of 121% demonstrating dunia’s success track record in gradually building a granular, diversified, and well-balanced portfolio of loans and advances to customers.

4.2 RISK ADJUSTED YIELDS (RAY)Risk adjusted yields are defined as the net credit margin between the earning capability of a lending portfolio (i.e. revenue yield) and its credit quality (i.e. cost of credit). The quantum of net credit margin illustrates the room available to absorb operating expenses, to be able to deliver a positive return on assets. Therefore, risk adjusted yields are another key indicator of the portfolio’s profitability dynamics.

dunia’s risk adjusted yields on loans and advances to customers have consistently exceeded 20% in the past six years and were a healthy 23.1% p.a. in 2015, supported by healthy revenue yields and stable cost of credit.

R I S K A D J U S T E D Y I E L D ( % )

Consistently strong & healthy trends on Risk Adjusted Yield consistently exceeding 18% & underpinning the Net Credit Margin, which ensures a substantial buffer to handle any risk due to volatility.

2015 risk adjusted yield at 23.1% p.a.

%

50

40

30

20

10

0

20.8 23.1 26.3 25.927.8

27.1

2009 2010 2011 2012 2013 2014 2015

23.1


dunia continues to maintain very healthy impairment reserves, NPL Cover in excess of 100%

and improving loss absorption capacity

N P L C O V E R( X T I M E S )

5

4

3

2

1

0 2009 2010 2011 2012 2013 2014 2015

3.7 3.53.3

3.1

1.7 1.8

1.2

L O S S A B S O R P T I O NC A P A C I T Y( X T I M E S )

2009 2010 2011 2012 2013 2014 2015

2.43.3

-3.6

-1.1

1.3

2.02.4

4

2

0

- 2

- 4

4.3 LOSS ABSORPTION CAPACITYdunia maintains a robust 121% NPL cover as of December 2015, which is substantially higher than the market average and provides a healthy capacity to absorb losses, while further insulating the portfolio from inherent credit losses as well as any unforeseen stress events, thereby protecting the business from potential future shocks.

Moreover, as of December 2015, dunia’s impairment reserve stood at 3.3% of total loans and advances to customers less than 120 days past due which too is substantially higher than the market average and is very healthy from a risk management standpoint.

5. PROACTIVE LIQUIDITY RISK MANAGEMENTPrudent liquidity management is one of the fundamental priorities for any financial institution, and ensuring sufficient availability of funding at all times is especially imperative in the highly volatile and stressed macro-economic environment prevailing since the onset of the global financial crisis in 2008.

These fundamental priorities are even more critical for a non-bank financial institution like dunia. Being proactive and fully cognizant of this challenge, the Management has persistently focused on establishing dunia as a deposit-taking institution since its inception, to provide access to multiple sources of long-term stable funding.

As a result of this concerted focus on liquidity risk management, dunia has been successfully established as a depository institution with a rapidly growing base of granular and tenured customer deposits. dunia sources deposits from corporate customers, and also raises deposits through the issuance of Labor Guarantees for its corporate customers (which are cash collateralized).

dunia’s customer deposits have increased to AED 1,176 Mln in 2015 – representing a significant 41.9% growth versus 2014, and 100% of the growth in loans and advances to customers in 2015 was directly funded by growth in customer deposits and retained earnings. In balance sheet terms, customer deposits fund 58% of loans and advances to customers as of December 2015. This is in-line with Management’s strategy to increasingly self-fund business growth through customer deposits, while minimizing reliance on professional funding sources.

Not only have deposit balances grown strongly, deposit customer base has increased by 19% to 2,300+ customers in 2015 – reflecting the strategy to minimize concentration risk on customer funding. Consequently, the average size of customer deposits has remained stable at a healthy AED 0.3 Mln per customer in 2015 – thereby ensuring granularity of deposits to reduce concentration risk.

Other key indicators on the customer deposit portfolio have also improved substantially in 2015, including: average tenor of 38 months – reflecting the focus on building a stable, long-term source of customer funds, and average cost of funds at 4.7% p.a. – reflecting the focus on competitive customer deposit pricing vis-à-vis the cost of professional funding.

All the above parameters are a strong indication of dunia’s continued success in building a highly diversified, stable and lower cost customer deposits portfolio. In addition to raising customer deposits, dunia has successfully arranged credit facilities from leading banks, which provide additional liquidity buffers to safeguard the business in the event of any contingency.

In 2015, dunia self-imposed / adopted an ELAR policy resulting in the mandatory maintenance of a percentage of deposits as liquid assets. The ELAR reserve as of Dec’15 is at AED 50 Mln.

dunia's deposit base is granular in ticket size and is growing strongly.

Healthy growth of granular deposits with lengthening tenure

A V E R A G E T E N U R E( M O N T H S )

Average deposit tenure 38 months

60

48

36

24

12

0

1518

32

23

29 31

2009 2010 2011 2012 2013 2014 2015

38

A V E R A G E I N T E R E S T R A T E ( % )

Average interest rate paidof 4.7% p.a.

%

10

8

6

4

2

0

4.95.2

4.54.9 4.8 4.5

2009 2010 2011 2012 2013 2014 2015

4.7

A V E R A G E T I C K E T S I Z E( A E D M L N )

2009 2010 2011 2012 2013 2014 2015

Average deposit ticket sizeat AED 0.3 Mln

1.5

1.2

0.9

0.6

0.3

0.0

1.5

0.50.4

0.3 0.3 0.3 0.3

2009 2010 2011 2012 2013 2014 2015

D E P O S I T S( A E D M L N )

42% growth in deposits in 2015 vs. 2014

1,800

1,440

1,080

720

360

032 74

242

414515

829

1,176

Funding Mix(Dec’13 - AED 705 Mln)

Funding Mix(Dec’14 - AED 1,019 Mln)

Bank LinesAED 190 Mln

(19%)

AED 52 Mln (5%)

AED 7 Mln (1%)

AED 84 Mln (8%)

AED 469 Mln (46%)

AED 218 Mln (21%)

AED 295 Mln (19%)

Bank LinesAED 190 Mln

AED 4 Mln

AED 168 Mln(24%)

(1%)

(27%)

Interbank

Deposits collaterized forissue of Financial Guarantee

Deposits collaterized forissue of Labor Guarantee

AED 37 Mln(5%)

Interbank

Corporate Deposits withpre-termination ability

AED 306 Mln(43%)

Funding Mix(Dec’15 - AED 1,541 Mln)

Bank Line 1

Bank Line 2

AED 265 Mln(17%)

AED 100 Mln(6%)

Interbank AED 10 Mln

(1%)




AED 2 Mln (0.2%)


Corporate Deposits without pre-termination ability

AED 506 Mln (33%)

Corporate Deposits without pre-termination ability


AED 362 Mln (23%)



O P E R A T I N G M A R G I N( A E D M L N )

2015 operating margin of AED 523.2 Mln

(50.9% higher vs. 2014)

51% higher margin in 2015 vs. 2014

(91.0)(45.7)

72.3

145.5

204.5

346.8

523.2

2009 2010 2011 2012 2013 2014 2015

400

300

200

100

0

(100)

(200)

Qtr4-2015 operating margin of AED 154.8 Mln

showing increased momentum going forward

(43.8% higher v/s Qtr4-2014)

Qtr 4-09 Qtr 4-10 Qtr 4-11 Qtr 4-12 Qtr 4-13 Qtr 4-14 Qtr 4-15

130

100

70

40

10

(20)

(50)

(20.6)

(1.4)

26.2

43.250.6

107.7

154.8

44 % higher margin in Qtr4-2015 vs. Qtr4-2014

2015 net income of AED 217.4 Mln

(13.6% higher vs. 2014)

(116.5)

(87.8)

18.1

73.4

118.5

191.3

217.4

2009 2010 2011 2012 2013 2014 2015

200

150

100

50

0

(50)

(100)

(150)

N E T I N C O M E( A E D M L N )

13 % growth in Net Income in 2015 vs. 2014

6. STRONG VALUE CREATION AND SHAREHOLDER RETURNS

6.1 OPERATING MARGINOperating margin is defined as the difference between revenue and operating expenses. The quantum of operating margin illustrates the cushion available to absorb cost of credit, to be able to deliver a profit. Therefore, operating margin is one of the key indicators of a business’ operating profitability.

dunia’s operating margin has increased by 50.9% to AED 523.2 Mln in 2015, driven by 42.7% revenue growth. Additionally, the underlying momentum in recent months remains strong as well (Qtr4-2015 margin of AED 154.8 Mln being 43.8% higher v/s Qtr4-2014), indicating continued strong growth in operating margin in 2016.

6.2 NET INCOMEdunia has delivered its fifth full-year of profitability with a net income of AED 217.4 Mln in 2015 – representing a 13.6% improvement over 2014. As highlighted in preceding sections, this record year of financial performance was driven by strong revenue growth, stable revenue yields, highly efficient cost to income ratio and effective risk adjusted pricing actions.

6.3 RETURN ON ASSETS (ROA), EQUITY (ROE) & INVESTED CAPITAL (ROIC)In-line with the robust performance across all measures of the top-line and bottom-line, dunia has delivered a full-year ROA of 11.1% p.a., ROE of 32.2% p.a. & ROIC of 37.1% p.a. in 2015.

R O A

2015 Return on Assets of 11.1% p.a.

-25.6-20.3

3.39.7

12.4 14.411.1

2009 2010 2011 2012 2013 2014 2015

%

50

30

10

0

-10

-30

-50

Consistently healthy ROA%in 2015 vs. 2014

R O E

2015 Return on Equity of 32.2% p.a.

23.1

-32.7

-29.2

6.7

28.9

2009 2010 2011 2012 2013 2014 2015

%

50

30

10

0

-10

-30

-50

35.6 32.2

Consistently healthy ROE%in 2015 vs. 2014


E Q U I T Y & C U M U L A T I V E D I V I D E N D( A E D M L N )

Cumulative DividendShareholder Equity

Note: *Final dividend of AED 50 Mln for 2015, payable in 2016

Consistent equity growth and dividend payout track record

950

760

570

380

190

0

285.12.8

11.6

358.8

29.2

456.6

101.2

626.0

210.2*

725.6

351.1

267.0

2009 2010 2011 2012 2013 2014 2015

NetWorth

351.1 267.0 285.1 358.5 477.0 668.3 885.7

0.0

0.0

Note: *As mentioned in the Director’s Report and Note 16 to the financial statements the Board of Directors proposed a final dividend of AED 70 Mln for 2015 subject to regulatory approvals which in addition to the interim dividend already paid of AED 59 Mln represented a total dividend of AED 129 Mln for the year. At the time of going to print a final dividend of AED 50 million was paid in line with the Central Bank of the UAE‘s approval.

R O I C

2015 Return on Invested Capital of 37.1% p.a.

12.5

-19.9-15.0

3.1

20.2

2009 2010 2011 2012 2013 2014 2015

%

50

30

10

0

-10

-30

-50

32.737.1

Continously growing ROIC%in 2015 vs. 2014

Consistent dividend payout track record with an

increasing ratio y-o-y (50.1% payout in 2015)

D I V I D E N D / N E T I N C O M E

Dividend Payout ratio of 50%, highlighting shareholder

confidence in the business

0.0 0.0

15.212.0 14.9

37.6

50.1

2009 2010 2011 2012 2013 2014 2015

%

50

40

30

20

10

0

AED 109.0 Mln dividend in 2015

(51.4% better vs. 2014)

0.0 0.0 2.88.8

17.6

72.0

109*

2009 2010 2011 2012 2013 2014 2015

110

88

66

44

22

0

+51% growth in 2015 vs. 2014

D I V I D E N D( A E D M L N )

AED 198 / share dividend paid for 2015

(51.4% better vs. 2014)

+51% growth in 2015 vs. 2014

0.0 0.05.0

1632

131

198

2009 2010 2011 2012 2013 2014 2015

200

160

120

80

40

0

D I V I D E N D / S H A R E( A E D )

6.4 DIVIDENDdunia started the trend of paying annual dividends to its shareholders from its first year of profitability in 2011. The dividend quantum has grown from AED 2.8 Mln (AED 5/Share) in 2011 to AED 72.0 Mln (AED 131/Share) in 2014, to AED 109.0 Mln (AED 198/Share) in 2015.

6.5 SHAREHOLDER EQUITYdunia’s robust performance across all measures of the top-line and bottom-line has translated into an accelerated growth in shareholder equity with consistent year on year dividend payout record.

The shareholder equity has grown 15.9% over 2014 in addition to a cumulative dividend of AED 210.2 Mln paid out since inception. With the inclusion of dividends paid out since inception, the “Total Shareholder Worth” has grown by 32.5% to a value of AED 885.7 Mln.


AUDITEDFINANCIALS 2015


DIRECTOR’S REPORTDear Shareholders

The Directors present their report to the shareholders together with the audited financial statements of Dunia Finance LLC (“the company”) for the year ended 31 December, 2015 and the financial position of the company as at 31 December, 2015.

Background

The company, also known as “dunia”, was formally established on 7 July, 2008 as a limited liability company registered in UAE, having its registered office in Abu Dhabi. dunia is a finance company formed as a strategic partnership between Fullerton Financial Holdings Pte Ltd - a wholly owned subsidiary of Temasek Holdings Pte Ltd in Singapore; Mubadala Development Company PJSC - a business development and investment company wholly owned by the Government of Abu Dhabi; Al Waha Capital PJSC - a diversified investments holding company and A. A. Al Moosa Enterprises LLC - a leading local business house and prominent real estate group in UAE.

Directors

The directors of the company in office at the date of this report are as follows:

1. Mr. Salem Rashid Al Noaimi, Chairman

2. Mr. Rajeev Kakar, Managing Director and Chief Executive Officer

3. Mr. Gan Chee Yen, Director

4. Mr. Omar Eraiqat, Director

5. Dr. Ahmed Khalil Al Mutawa, Independent Director

Share capital and share premium

The authorized, issued and paid up share capital of the company is 550,000 shares (2014: 550,000 shares) of AED 1,000 each (2014: AED 1,000 each), amounting to AED 550,000,000 (2014: AED 550,000,000). Of these, 330,000 shares were issued at a premium of AED 110 each, amounting to AED 36,300,000 (2014: AED 36,300,000). The company’s capital adequacy ratio is 33.1% (2014: 38.97%), significantly higher than the minimum 15% stipulated by the Central Bank of the UAE.

Business Evolution

dunia delivered a record year in 2015, with full year profits of AED 217.4 Million (2014: AED 191.3 Million) during fiscal 2015.

This performance was driven by dunia’s finely tuned customer centric strategy of enhancing and deepening relationships through superior service, customized solutions, intelligent use of technology, enhanced platforms and well-trained people, as well as careful expense control.

The increasingly positive impact of dunia’s customer centric philosophy and sustainable approach to growth is reflected in a 28.0% increase in total customer numbers over the course of 2015. dunia now has 211,000 customers. This has led to customer assets having grown 34% to AED 2.0 billion. The company saw commensurate growth in customer deposits, which were up by 42% against the prior period, reaching AED 1.2 Billion.

Portfolio credit quality has remained healthy and the strategic actions taken include:

• Prudent asset growth, targeted only at tested good segments to reduce capital at risk

• A more selective customer target definition and tighter underwriting process

• Increased focus on secured assets

• A value based pricing strategy to ensure a risk-reward balance while building the portfolio

• Proactive strategic cost management focus to be a low cost provider and ensure efficiencies on expense, and to deliver a healthy positive operating leverage for long term sustainable growth

• Prudent and proactive impairment provisioning to build adequate loss absorption capacity, to ensure long term sustainability

• Leveraging the newly launched Etihad Credit Bureau

• Analytics based decision making to deliver high predictability of results

• Continuous enhancement of Risk Management standards & infrastructure – Including the implementation of a new Disaster Recovery site at Injazat, implementation of 3D secure technology for online transactions on our cards etc.

• Continued diversification of revenues through addition of new products and launch of transaction services, through an active cross-sell process based on demonstrated customer behavior, and a 360 degree customer centric approach to ensure that customer needs are truly understood

• Prudent test based approach to accelerating growth, while ensuring a disciplined focus on building a business model aimed to deliver a positive “Return on Asset” and “Return on Equity” – so as to ensure a predictable path to profitability, which is important for delivering longer term sustainability

• Increased efficiency & customer delight through continuous digitization of services & offerings

• Continuous enhancement of service excellence to ensure high customer loyalty & repeat buying characteristics, to enhance life-time value from the customer relationship

Funding quality has continued to improve with the launch of new sources of customer funding including the “non-puttable deposit” which has substantially improved the liquidity profile of the portfolio.

Financial Performance

dunia had a record-breaking performance in fiscal 2015 with:

• Record profits of AED 217 Million

• Positive Profit swing of AED 26 Million v/s 2014

• Dividend increased to AED 234.5 per share in 2015, up from AED 130.9 per share in 2014

• Excellent liquidity management with asset growth fully self-funded through granular and tenured customer deposits – which grew 42% by an incremental AED 347 Million during 2015

• 28% y-o-y growth in customer base to 211k customers

• 34% y-o-y growth in customer receivables to AED 2.0 Billion

• 42% y-o-y growth in customer deposits to AED 1.2 Billion

• 19% y-o-y growth in deposit customer base to 2,340 customers

• Customer asset growth fully funded by deposits and retained earnings

• No dependency on professional funds used for diversification only

• 43% y-o-y growth in revenue to AED 723 Million

• Healthy CAR maintained at 33.1%, v/s 39.0% in 2014

• Cost-Income at a healthy 28%, v/s 32% in 2014

• 18% positive Operating Leverage

• 3.3% ratio of Impairment Reserves to Receivables

• 32.2% Return on Equity

dunia’s business performance continues to grow positively showing a continued strong growth trend in the year ahead.

dunia has been prudent in loss recognition and its total impairment reserves is at a healthy ratio of 3.3% of customer assets significantly higher than regulatory requirements.

We are pleased to recommend for the consideration of the shareholders and subject to regulatory approval a final dividend of AED 127.3 per share which together with the interim dividend paid of AED 107.3 per share aggregates to a total dividend of AED 234.5 per share, issued and paid up at a face value of AED 1000 each.

dunia has focused on building adequate liquidity and grown the customer deposit portfolio by AED 347.5 Million through the year, ensuring that customer asset growth has been entirely self-funded through customer deposits and retained earnings. Liquidity continues to be managed prudently with the result that cash and deposits with banks stood at AED 131.3 million as at the year end.


Franchise

Fitch has upgraded dunia’s credit rating of BB- to BB. This standalone rating reflects strong portfolio growth and track record, improved funding profile, solid financials, strong capital ratios and capable management.

dunia also continued to focus on its customer centric business approach, while ensuring a commitment to excellence in all aspects of the business. dunia invested in building its brand to make it an even stronger and well recognized brand.

Creating Capabilities

In line with dunia’s commitment to providing quality products & services to its customers, dunia has taken the lead in introducing digital new-age technology in the area of ‘Social Media, Mobility, Analytics, and Cloud (SMAC) computing solutions’ to further enhance value to our customers. A range of online platforms and mobile applications have been launched over the past year, offering our customers enhanced value. Also, unique services including dunia’s “Qwik” suite of services now enable customers to transact on their account through simple SMS or phone call.

dunia is committed to further leverage off industry enhancement in the Information and Communication Technology (ICT) space, to keep providing new solutions that will help empower our customers, enable their success and enrich their lives.

In addition, dunia has continued to invest in refreshing its technology infrastructure and enhance the information security capability. A state of the art disaster recovery data center has been setup in Abu Dhabi allowing dunia to continue providing uninterrupted service in the un-foreseen event of a service outage at the primary data center in Dubai.

Driving sustainability

dunia has an ongoing commitment to the UAE’s drive for sustainable growth. The company launched the ‘dunia Green Car Loan’, which is a unique lower rate loan available for environmentally friendly cars, which is supported by new age technology service solutions including digital apps, mobile services, paperless operations & statements; all of which are in line with the company’s sustainability drive.

In a continuation of its commitment towards education of the youth, in order to empower society and enhance productivity, dunia announced the launch of 2 new scholarship programs – the Dunia Young Leaders Scholarship Program and the Dunia Emirati Leaders Scholarship Program. The Dunia Young Leaders Scholarship Programs offered scholarships to 39 promising students, starting from pre-school to Grade 12, studying in the UAE, as well as university students (enrolled in a Bachelor’s Master’s or PhD program) studying in the UAE or overseas. The launch of these exciting scholarship programs is yet another step highlighting dunia’s ongoing commitment to cultivating, empowering and nurturing young talent through education.

As part of its focus on education as a key pillar, for the third year in a row, dunia rolled out the ‘Dunia Young Business Leaders’ Program in 2015, a unique 3 week summer internship program for high school and university students. The program which is offered on a complimentary basis offers students a unique opportunity to discover their leadership skills within and to engage with industry experts, prominent business entrepreneurs and leaders in order to learn the various aspects of setting up a business. We have seen the fruits of the program come to life with successful implementation of business ideas incubated by students who attended the program.

dunia also introduced a top notch career advancement program - ‘Development Opportunity for Operations, Risk and Sales’ (DOORS), which focuses on nurturing leadership talent within dunia.

dunia issued its Sustainability Report for 2014 which has been developed in conformance with the Global Reporting Initiative (GRI) G4 standards which sets the global benchmarks for sustainability.

Establishing credibility

dunia is continuously being recognized by third parties including leading business schools globally who have written several cases studies on dunia. The latest case study was published by the Indian Institute of Management - Ahmedabad (IIMA), which is about dunia’s journey of building the dunia brand and how dunia’s innovative marketing communication and advertising strategy has enabled it to provide a unique customer experience and stand out versus competition. dunia now features in 2 case studies by Singapore Management University and 3 case studies by University of Virginia Darden School of Business, making dunia feature in a total of 6 case studies published by leading business schools.

Success through Exceptional Service

dunia has been repeatedly ranked as an “A category“ service provider for exceptional service consistently over the last 5 years by Gulf News, the leading publication in the UAE. This exceptional service award is a tribute to dunia’s continued focus on the customer and ensuring “customer delight” at all times.

Engaging with the community

dunia Cares, dunia’s Corporate Social Responsibility, continues to focus on the community’s pressing issues of health, environment, social welfare and education. dunia relies on its staff, customers, partners, and the wider community to engage in key initiatives which help address these issues.

dunia has led several key initiatives in 2015 across its key focus areas of Social Responsibility, Health, Environment and Education – blood donation drives, educational programs, social welfare initiatives, as well as environmental campaigns.

People

dunia continuously engages very closely with several leading universities whether for hiring its young leadership talent, as well as for developing its own staff through executive development programs at these leading universities.

dunia continued to place special emphasis on training its high potential talent by nominating them to attend global programs such as The University of Chicago’s Booth School of Business Accelerated Development Program, a 3 week management development program across key business skills and other management development programs offered by leading global universities including the Indian Institute of Management, Ahmedabad and the S.P. Jain Institute of Management, Dubai. In addition, a state-of-the-art training center was launched during the year.

In line with dunia’s strategy to continuously ensure that focus is skewed towards the front line and customer interfacing units, teeth to tail ratio stood at 91% in 2015 (2014: 86%).

dunia places special emphasis and commitment to the Nation’s key priority of developing UAE talent and ensuring that UAE Nationals become future leaders. In line with this objective, dunia offers various opportunities under the ‘Kawader dunia’ program for developing UAE National talent – whether as full time experienced employees, part timers, or fresh graduates. In 2015, dunia also rolled out the ‘Dunia Emirati Scholarship’ which is a unique scholarship offered to scholastically outstanding Emirati students under the ‘Najm Dunia Program’ and ‘Najmat Dunia Program’.

Diversity is a theme at dunia and we ensure to attract talent from different ethnic backgrounds, with different experiences, who have also worked in various geographies. dunia employs many nationalities and also places special emphasis on women empowerment and ensuring that women are empowered and enabled to succeed in their roles and become industry and nation leaders. dunia currently has 44% of management roles being led by women, who continue to bring unique ideas and dimensions to the table. In addition, 80% of dunia’s UAE National employees are also women.

Process

There is a strong focus in dunia on optimizing resources and maximizing efficiency, while ensuring strong controls and discipline are in place. At dunia, we follow a rigorous discipline of ensuring high process control standards, strategic cost management and strategic risk management practices, while following a culture of excellence on corporate governance standards. We continue to also ensure the highest standards of transparency and disclosure in dealing our customers, employees and the wider stakeholders in line with our shared responsibility to deliver at the highest standards. This is in line with our continuous endeavor to raise the bar, in our commitment to serve our customer fairly, while delivering value, and also build a franchise that is admired by all.

dunia continues to streamline its operational framework and processes in order to be able to offer a seamless experience to customers, at a lower cost and more efficiently. dunia’s Cost / Income ratio has improved sharply from 31.6% in 2014 to 27.7% in 2015.


Auditors

The financial statements have been audited by PricewaterhouseCoopers who retire and, being eligible, offer themselves for reappointment.

Acknowledgement

The Directors wish to specially recognize the co-operation extended by every member of the dunia family and thank them for their ongoing contribution. The Directors are also thankful for the wholehearted support received from the Central Bank of the UAE, various Ministries of the UAE Government, the company’s bankers, the company’s valued customers and dunia’s shareholders.

On behalf of the Board,

Rajeev Kakar

Managing Director and Chief Executive Officer

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DUNIA FINANCE LLC

Report on the financial statements

We have audited the accompanying financial statements of Dunia Finance LLC (“the Company”) which comprise the statement of financial position as at 31 December 2015 and the statements of comprehensive income, changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and their preparation in compliance with the applicable provisions of the UAE Federal Law No. (2) of 2015, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of 31 December 2015 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

PricewaterhouseCoopers, Emaar Square, Building 4, Level 8, P O Box 11987, Dubai - United Arab Emirates T: +971 (0)4 304 3100, F: +971 (0)4 346 9150, www.pwc.com/me

Douglas Patrick O’Mahony, Paul Suddaby and Jacques Fakhoury are registered as practising auditors with the UAE Ministry of Economy


The notes on pages 127 to 152 form an integral part of these financial statements

As at 31 December

2015

As at 31 December

2014

Note AED'000 AED'000

ASSETS

Cash and deposits with banks 5 131,317 78,879

Loans and advances, net 6 2,012,091 1,504,830

Property and equipment 7 12,973 7,691

Intangible assets 8 10,742 4,787

Other assets 9 16,490 11,694

Total assets 2,183,613 1,607,881

LIABILITIES AND EQUITY

LIABILITIES

Customer deposits 10 1,176,146 828,692

Due to related parties 11(b) 8,398 10,829

Borrowings 12 120,000 25,901

Provision for employees' end of service benefits 13 7,445 4,696

Other liabilities 14 146,060 111,800

Total liabilities 1,458,049 981,918

EQUITY

Share capital 15 550,000 550,000

Share premium 35,544 35,544

Statutory reserve 18 61,874 40,134

Retained earnings 78,146 285

Total equity 725,564 625,963

Total liabilities and equity 2,183,613 1,607,881

These financial statements were approved by the Board of Directors on 9 March 2016 and were signed on its behalf by:

Salem Rashid Al NoaimiChairman

Rajeev KakarManaging Director and Chief Executive Officer

Venu ParameshwarChief Financial Officer

Report on other legal and regulatory requirements

Further, as required by the UAE Federal Law No. (2) of 2015, we report that:

(i) we have obtained all the information we considered necessary for the purpose of our audit;

(ii) the financial statements have been prepared and comply, in all material respects, with the applicable provisions of the UAE Federal Law No. (2) of 2015 and the Memorandum of Association of the Company;

(iii) the Company has maintained proper books of account and the financial statements are in agreement therewith;

(iv) the financial information included in the Directors’ report is consistent with the books of accounts of the Company;

(v) the Company has not purchased or invested in any shares during the financial year ended 31 December 2015;

(vi) note 11 to the financial statements discloses material related party transactions, and the terms under which they were conducted;

(vii) based on the information that has been made available to us, nothing has come to our attention which causes us to believe that the Company has contravened, during the financial year ended 31 December 2015, any of the applicable provisions of the UAE Federal Law No. (2) of 2015 or of its Memorandum of Association which would materially affect its activities or its financial position as at 31 December 2015.

Further, as required by the UAE Union Law No (10) of 1980, as amended, we report that we have obtained all the information and explanations we considered necessary for the purpose of our audit.

PricewaterhouseCoopers

13 March 2016

Paul Suddaby

Registered Auditor Number 309

Dubai, United Arab Emirates

STATEMENT OF FINANCIAL POSITION


Year ended 31 December

2015


2014


Interest income 19 594,223 417,218

Interest expense 19 (47,948) (29,687)

Net interest income 546,275 387,531

Fees and commission income, net 20 176,950 119,175

Operating income 723,225 506,706

Impairment charge, net 21 (305,823) (155,449)

General and administrative expenses 22 (195,398) (156,019)

Amortisation and depreciation 7,8 (4,603) (3,913)

Net profit for the year 217,401 191,325

Other comprehensive result - -

Total comprehensive income for the year 217,401 191,325

STATEMENT OF CHANGES IN EQUITYSTATEMENT OF COMPREHENSIVE INCOMEIssued share

capitalShare

PremiumStatutory

reserveRetained earnings Total

AED’000 AED’000 AED’000 AED’000 AED’000

At 1 January 2014 550,000 35,544 21,001 (149,907) 456,638

Total comprehensive income for the year - - - 191,325 191,325

Dividends paid - - - (22,000) (22,000)

Transfer to statutory reserve - - 19,133 (19,133) -

At 31 December 2014 550,000 35,544 40,134 285 625,963

At 1 January 2015 550,000 35,544 40,134 285 625,963

Total comprehensive income for the year - - - 217,401 217,401

Dividends paid (Note 16) - - - (117,800) (117,800)

Transfer to statutory reserve - - 21,740 (21,740) -

At 31 December 2015 550,000 35,544 61,874 78,146 725,564

The notes on pages 127 to 152 form an integral part of these financial statementsThe notes on pages 127 to 152 form an integral part of these financial statements


Year ended31 December

2015


2014


Operating activities

Net profit for the year 217,401 191,325

Adjustments:

Depreciation of property and equipment 7 2,686 2,840

Amortisation of intangible assets 8 1,917 1,073

Employees’ end of service benefits 13 3,078 1,538

Impairment charge 373,143 175,608

Loss on disposal of intangible assets, property and equipment 33 637

Operating cash flows before payment of employees’ end of service benefits and changes in working capital 598,258 373,021

Payment of employees’ end of service benefits 13 (329) (670)

Operating cash flows before changes in working capital 597,929 372,351

Changes in working capital:

Loans and advances 6 (880,850) (654,233)

Other assets 9 (4,350) (2,031)

Customer deposits 10 347,454 313,608

Due to related parties 11 (2,431) (12,775)

Other liabilities 14 34,260 28,522

Net cash generated from operating activities 92,012 45,442

Investing activities

Deposits with maturities over 3 months 5 (10,001) (1)

Purchase of property and equipment 7 (8,030) (5,162)

Purchase of intangible assets 8 (7,872) (695)

Proceeds from disposal of intangible assets, property and equipment 7,8 29 -

Net cash used in investing activities (25,874) (5,858)

Financing activities

Dividends paid (117,800) (22,000)

Borrowings 12 100,000 20,000

Net cash used in financing activities (17,800) (2,000)

Net increase in cash and cash equivalents 48,338 37,584

Cash and cash equivalents, beginning of the year 37,851 267

Cash and cash equivalents, end of the year 5 86,189 37,851

STATEMENT OF CASH FLOWS

The notes on pages 127 to 152 form an integral part of these financial statements

Notes to the financial statements for the year ended 31 December 2015

1. LEGAL STATUS AND PRINCIPAL ACTIVITYDunia Finance LLC (“the Company”) was formally established as a limited liability company on 7 July 2008 under the UAE Companies Law. The Company was licensed by the Central Bank of the UAE on 11 September 2008 to operate as a finance company.

UAE Federal Law No. 2 of 2015 (Companies Law) which is applicable to the Company has come into effect from 1 July 2015. The Company is currently assessing and evaluating the relevant provisions of the Companies Law. It has twelve months from the effective date of the Companies Law to fully comply with the Companies Law under the transitional provisions set out therein.

The Company’s principal activity is providing customer centric financial solutions to its target customer segments.

The Company’s registered address is Ground and mezzanine floors, Al Fardan Building, Hamdan Street, P.O.Box 44005, Abu Dhabi, United Arab Emirates.

The shareholders of the Company and their respective shareholding are as follows:

Bugis Investments Mauritius Pte Ltd 40%(a wholly owned subsidiary of Fullerton Financial Holdings Pte Ltd)

Alpha Investment Company LLC 31%(a subsidiary of Mubadala Development Company PJSC)

Waha Capital PJSC 25%

A A Al Moosa Enterprises LLC 4%

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1 BASIS OF PREPARATIONThe financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB), interpretations issued by International Financial Reporting Interpretations Committee (IFRIC) and applicable requirements of the laws of the United Arab Emirates. The financial statements are prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed. Management believes that the underlying assumptions are appropriate and that the Company’s financial statements therefore fairly present the financial position and results. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.


(a) New standards, amendments and interpretations adopted by the Company

The following new standards and amendments to standards and interpretations are applicable to the Company for the first time for the financial year beginning on or after 1 January 2015.

IFRS 8, ‘Operating segments’ which is amended to require disclosure of the judgements made by management in applying the aggregation criteria to operating segments. It is also amended to require a reconciliation of segment assets to the entity’s assets when segment assets are reported. The improvement is effective for accounting periods beginning on or after 1 July 2014.

IAS 16, ‘Property, plant and equipment’ and IAS 38, ‘Intangible assets’ are amended to clarify how the gross carrying amount and the accumulated depreciation are treated where an entity uses the revaluation model. The improvement is effective for accounting periods beginning on or after 1 July 2014.

IAS 24, ‘Related party disclosures’ is amended to include, as a related party, an entity that provides key management personnel services to the reporting entity or to the parent of the reporting entity (the ‘management entity’). Disclosure of the amounts charged to the reporting entity is required. The improvement is effective for accounting periods beginning on or after 1 July 2014.

IFRS 13 ‘Fair value measurement’ on clarification of the portfolio exemption in IFRS 13 - The amendment clarifies that the portfolio exception in IFRS 13, which allows an entity to measure the fair value of a group of financial assets and financial liabilities on a net basis, applies to all contracts (including non-financial contracts) within the scope of IAS 39, ‘Financial instruments: Recognition and measurement’ or IFRS 9, ‘Financial instruments.’ The improvement is effective for accounting periods beginning on or after 1 July 2014.

IAS 19, Defined benefit plans: Employee contributions. The amendment clarifies the accounting by entities with plans that require contributions linked only to service in each period. Entities with plans that require contributions that vary with service will be required to recognise the benefit of those contributions over employees’ working lives. Management should consider how it will apply that model. The amendment is effective for accounting periods beginning on or after 1 July 2014.

There is no material impact of the above amendments on the financial statements of the Company.

There are no other IFRSs or IFRIC interpretations that were effective for the first time for the financial year beginning on 1 January 2015 that have had a material impact on the Company’s financial statements.

(b) New standards, amendments and interpretations not yet adopted

The following new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2015, and have not been applied in preparing these financial statements.

Amendment to IAS 16, ‘Property, plant and equipment’ and IAS 38, ‘Intangible assets’ regarding depreciation and amortisation. This amendment clarifies that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. The presumption may only be rebutted in certain limited circumstances. The amendment is effective for accounting periods beginning on or after 1 January 2016.

IAS 1 Amendments to IAS 1, ‘Presentation of financial statements’ Disclosure initiative. The amendments clarify that it may be necessary to disaggregate some of the line items specified in IAS 1 paragraphs 54 (statement of financial position) and 82 (profit or loss). That disaggregation is required where it is relevant to an understanding of the entity’s financial position or performance. The amendment is effective for accounting periods beginning on or after 1 January 2016.

IFRS 7, ‘Financial instruments: Disclosures’ – The amendment related to servicing contracts requires that if an entity transfers a financial asset to a third party under conditions which allow the transferor to derecognise the asset, IFRS 7 requires disclosure of all types of continuing involvement that the entity might still have in the transferred assets. The improvement is effective for accounting periods beginning on or after 1 January 2016.

IAS 19, ‘Employee benefits’ – The amendment clarifies, when determining the discount rate for post-employment benefit obligations, that it is the currency that the liabilities are denominated in that is important, not the country where they arise. The improvement is effective for accounting periods beginning on or after 1 January 2016.

IFRS 15, ‘Revenue from contracts with customers’. This standard replaces IAS 11, ‘Construction contracts’, IAS 18, ‘Revenue’ and related interpretations. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use of and obtain the benefits from the good or service. The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount

that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 also includes a cohesive set of disclosure requirements that will result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard is effective for accounting periods beginning on or after 1 January 2018.

IFRS 9, ‘Financial instruments’. The complete version of IFRS 9 replaces most of the guidance in IAS 39. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value through P&L. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities, there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value, through profit or loss.

IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually uses for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Earlier application is permitted. If an entity elects to early apply, it must apply all of the requirements at the same time.

The Company has plans in place for adhering to the above new standards and amendments to published standards or IFRIC interpretations issued but not yet effective for the Company’s financial year beginning on 1 January 2015.

There are no other applicable new standards and amendments to published standards or IFRIC interpretations that have been issued but are not effective for the first time for the Company’s financial year beginning on 1 January 2015 that would be expected to have a material impact on the financial statements of the Company.

2.2 FOREIGN CURRENCY TRANSLATION(a) Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency in which the majority of its transactions are denominated (“the functional currency”). The financial statements are presented in United Arab Emirates Dirham (“AED”), which is the Company’s functional and presentation currency.

(b) Translation and balances

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

2.3 INTANGIBLE ASSETSSoftware acquired by the Company is stated at cost less accumulated amortisation and impairment. Expenditure on internally developed software is recognised as an asset when the Company is able to demonstrate its intention and ability to complete the development and use the software in the manner that will generate future economic benefits and can reliably measure the costs to complete development. The capitalised costs of internally developed software include all costs directly attributable to developing the software and are amortised over its useful life. Internally developed software is stated at capitalised costs less accumulated amortisation and impairment.

Subsequent expenditure on software assets is capitalised only when such expenditure increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

Direct implementation costs of the Al Etihad Credit Bureau across the customer portfolio are capitalised and amortised over the estimated customer life.

The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each date of statement of financial position.


Amortisation is recognised in the statement of comprehensive income on a straight-line basis, at rates calculated to reduce the cost of assets to their estimated residual value over their expected useful lives of 3 to 7 years.

Intangible assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. An intangible asset is derecognised / written off when no future economic benefits are expected from its use or disposal and loss on derecognition of asset is recognised in the statement of comprehensive income for the period in which derecognition occurs.

2.4 PROPERTY AND EQUIPMENTProperty and equipment are stated at historical cost less accumulated depreciation and impairment. The cost of property and equipment includes expenditure directly attributable to the acquisition or construction of the asset as well as expenditure incurred on bringing the asset to the working condition and location for its intended use. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which these are incurred.

Depreciation is recognised in the statement of comprehensive income on a straight-line basis, at rates calculated to reduce the cost of assets to their estimated residual value over their expected useful lives, as follows:

Years

Office and other equipment 3-8

Leasehold improvements Up to 10

Motor vehicles 3-5

The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each date of statement of financial position.

Gains and losses on disposal of property and equipment are determined by comparing the sales proceeds to the carrying value of the asset disposed and are taken into account in determining operating income / (loss).

Capital Work-In-Progress is stated at cost when the asset is ready for use. Capital Work-In-Progress is transferred to the appropriate Property and Equipment or Intangible Asset category and depreciated or amortised in accordance with the Company’s policy.

Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. An asset is derecognised / written off when no future economic benefits are expected from its use or disposal and loss on derecognition of asset is recognized in the statement of comprehensive income for the period in which derecognition occurs.

2.5 LOANS AND ADVANCESLoans and advances are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Loans and advances are initially recognised at fair value, which is the cash consideration to originate the loan and advance including any transaction costs, and measured subsequently at amortised cost using the effective interest rate method. Loans and advances are reported in the statement of financial position as loans and advances to customers net of all impairment reserves including interest receivable on the loans and advances. Interest on loans is included in the statement of comprehensive income and is reported as interest income. In the case of impairment, the impairment loss is reported as a deduction from the carrying value of the loan and advances, and recognised in the statement of comprehensive income as impairment charge.

The Company assesses at the end of each reporting period whether there is objective evidence that loans and advances are impaired. Loans and advances are considered impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that the Company uses to determine that there is objective evidence of an impairment loss include:

• Delinquency in contractual payments of principal or interest

• Demise of the debtor

• Cash flow difficulties experienced by the borrower

• Breach of loan covenants or conditions

• Deterioration of the borrower’s competitive position

Observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including:

(i) adverse changes in the payment status of borrowers in the portfolio; and

(ii) national or local economic conditions that correlate with defaults on the assets in the portfolio.

The estimated period between occurrence of a loss and its identification is determined by management for each identified portfolio.

The Company first assesses whether objective evidence of impairment exists individually for loans and advances that are individually significant and collectively for loans and advances that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed loan or advance, it includes it in a group of loans and advances with similar credit risk characteristics and collectively assesses them for impairment. Loans and advances that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

For the purposes of a collective evaluation of impairment, loans and advances are grouped on the basis of similar credit risk characteristics (i.e. on the basis of the Company’s evaluation process that considers category type, past-due status and other relevant factors).

The impairment charge on a group of loans and advances is collectively evaluated for impairment and estimated on the basis of historical trends of the probability of default, timing of recoveries and amount of loss incurred. Default rates, loss rates and expected timing of future recoveries are regularly benchmarked against actual outcomes to ensure they remain appropriate. Where historical data is not sufficient to assess trends, market loss experience is substituted using a lagged approach whereby loss rates are based on movement of accounts from one stage of delinquency to another.

The amount of the loss is measured as the difference between the carrying amount of the loan or advance and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the original effective interest rate of the loan or advance. The carrying amount of the loan or advance is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of comprehensive income. If a loan or advance has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

When a loan or advance crosses the stipulated trigger for 100% specific provision, it is netted off against the related impairment allowance. If no related impairment allowance exists, it is written off to the statement of comprehensive income. Subsequent recoveries, if any, are credited to the statement of comprehensive income.

Loans that are either subject to individual or collective impairment assessment and whose terms have been renegotiated are no longer considered to be past due but are treated as new loans. In subsequent years, the asset is considered to be past due and disclosed if contractually delinquent and renegotiated again.


2.6 CASH AND CASH EQUIVALENTSCash and cash equivalents comprise balances with less than three months’ maturity from the date of acquisition, including cash in hand, deposits held with original maturities of three months or less, net of bank overdrafts.

2.7 OTHER EMPLOYEE BENEFITSThe amount payable to employees in respect of the Company’s equity based payment scheme, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees become eligible to payment. The liability is re-measured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as staff costs in the statement of comprehensive income.

All other employee benefits are accrued for as and when services are rendered by the employees.

2.8 PROVISIONSProvisions are recognised when the Company has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the obligation amount can be made.

2.9 REVENUE RECOGNITION(a) Interest income and expense

Interest income and expense is recognised in the statement of comprehensive income using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments through its expected life (or, where appropriate, a shorter period) to the net carrying amount of the financial asset or liability respectively.

While calculating effective interest rate, cash flows are estimated considering all contractual terms of the financial instruments, but not future credit losses. The calculation includes all discounts or premiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or liability. Transaction costs include fees and commissions paid to agents (including employees acting as selling agents), advisers, brokers and dealers. Transaction costs do not include debt premiums or discounts, financing costs or internal administrative or holding costs.

(b) Fees and commission income

Fees and commission income that are integral to the effective interest rate on a financial asset or liability are included in the calculation of the effective interest rate to arrive at the amortised cost of financial asset and financial liability.

Other fees and commission income are generally recognised as and when the service has been provided.

2.10 EMPLOYEES’ END OF SERVICE BENEFITSPension contributions are made in respect of UAE national employees to the UAE General Pension and Social Security Authority in accordance with the UAE Federal Law No (7), 1999 for Pension and Social Security.

Provision is made for the end of service benefits due to expatriate employees in accordance with UAE Labour Law for their periods of service up to the date of these financial statements. The provision for the end of service benefits is calculated annually by independent actuaries using the projected unit credit method.

2.11 LEASESThe leases entered into by the Company are operating leases. Payments made under operating leases are charged to other operating expenses in the statement of comprehensive income on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

2.12 BORROWINGSBorrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of comprehensive income over the period of the borrowings using the effective interest rate method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

2.13 CUSTOMER DEPOSITSCustomer deposits are recognised initially at fair value, net of transaction costs incurred. Customer deposits are subsequently carried at amortised cost using the effective interest rate method.

2.14 DIVIDEND ON ORDINARY SHARESDividends on ordinary shares are recognised in equity in the period in which they are approved by the Company’s shareholders.


3 FINANCIAL RISK MANAGEMENTThe Company’s activities expose it to a variety of financial risks and those activities involve the analysis, evaluation, acceptance and management of some degree of risk or combination of risks. Taking risk is core to the financial services business and these risks are an inevitable consequence of being in business. The Company’s aim is therefore to achieve an appropriate balance between risk and return and minimise potential adverse effects on the Company’s financial performance.

The Company’s risk management policies approved by the Board of Directors are designed to identify and analyse these risks, to set appropriate risk limits and controls, and to monitor the risks and adherence to limits by means of reliable and up-to-date information systems. The Company regularly reviews its risk management policies and systems. The Chief Risk Officer oversees risk management based on policies approved by the Board of Directors. In addition, internal audit is responsible for the independent review of risk management and the control environment.

The main types of risk are credit risk, liquidity risk and market risk. Market risk includes currency risk, interest rate risk and price risk.

3.1 CREDIT RISKThe Company takes on exposure to credit risk, which is the risk that a customer or counterparty will cause a financial loss to the Company by failing to discharge an obligation. Credit risk is an important risk for the Company’s business and management, therefore, the Company carefully manages its exposure to credit risk. Credit exposures arise principally in lending activities and placement of deposits and balances with the banks. There is also credit risk in off balance sheet financial commitments such as unused credit card limits and guarantees given.

The credit risk management and control function is overseen by the Chief Risk Officer. The business risk and compliance committee periodically reviews and monitors all applicable risk including credit risk limits.

Exposure to credit risk is also managed through regular analysis of the ability of counterparties to meet interest and repayment obligations and by changing these limits where appropriate.

3.1.1 CREDIT RISK MEASUREMENTIn measuring credit risk of loans and advances to customers, the Company adopts the following approaches:

(i) Individually assessed loans and advances

At each date of the statement of financial position, a case by case assessment is carried out to identify whether there is objective evidence that a loan or advance is impaired. This approach is applied to loans and advances that are considered individually significant. The loss includes the aggregate exposure to the customer, and amount of expected receipts. The realisable value of security and collaterals and the likelihood of successful repossession will have to be considered as well as the likely costs involved in recovery of outstanding amounts.

(ii) Collectively assessed loans and advances

Impairment is assessed on a collective basis to:

• Cover losses which have been incurred but have not yet been identified on loans and advances subject to individual assessment.

Individually assessed loans for which no evidence of loss has been specifically identified on an individual basis are grouped together according to the credit risk characteristics for the purpose of calculating an estimated collective loss. This reflects losses incurred at the date of financial position which will only be individually identified in future. The measurement of the loss will factor in the:

- historical loss experience in portfolios with similar risk characteristics;

- emergence period which is the time period between when the impairment actually occurs till there is objective evidence that impairment exists; and

- management’s judgment as to whether the prevailing economic and credit conditions could result in the actual loss being higher or lower than that suggested by historical experience.

• Cover losses for homogeneous groups of loans and advances that are not considered individually significant.

Where adequate historical information is available, statistical methods are used to calculate losses inherent in the portfolio. Inherent losses are computed based on the estimated life time net present value (NPV) of each cohort of loans, and comparing this with the carrying cost of that cohort. The net present value curve is constructed based on statistical regression techniques using historical NPV by month on book.

When there have been changes in economic, regulatory or behavioural conditions, historical loss experience provides less relevant information when the most recent trends in the portfolio risk factors are not fully reflected in statistical models. In such circumstances such risk factors are taken into account when calculating the appropriate level of losses.

3.1.2 RISK LIMIT CONTROL AND MITIGATION POLICIESThe Company manages limits and controls concentration of credit risk to individuals, employees of different industry sectors and tenors. Such risks are monitored regularly and subject to an annual formal review. Stress tests are performed regularly with a view to identifying whether limits need to be revisited. Limits to banks are approved by the board of directors and exposures within the limits tracked daily.

The Company extensively uses analytics to monitor changes in the credit profiles of its segmented portfolio. Analytical tools are used to weigh the risk reward equation to aid decision making in terms of lending to selected customer segments. Further monitoring of delinquencies across the customer loan portfolio is aimed at identifying trends and ensuring that the credit risk related to the portfolio is pro-actively managed. The Company has pre-defined delinquency ratio ranges which will warrant appropriate remedial action if the ranges are breached. Credit risk to professional counterparties is managed by due diligence and evaluation of the professional counterparty’s credit risk which may include reference to external credit ratings.

Collateral is used as a mitigating tool by the Company. The principal acceptable collateral is:

(i) Mortgages over the vehicles for the auto loans and advances

(ii) Cash deposits for personal loans and advances to customers and guarantees issued on behalf of customers

The maximum loan to value of the loan and advance and the guarantees, as well as the valuation frequencies are clearly documented in the credit policy.

3.1.3 IMPAIRMENT AND PROVISIONINGThe Company establishes an allowance for impairment losses that represents its estimate of incurred losses in its loan portfolio. The main components of this allowance are a specific loss component that relates to individual exposures, and a collective impairment loss allowance for losses that have been incurred but not identified, established for groups of homogeneous loans with similar risk characteristics. Future cash flows from a group of loans and advances that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar to those in the group.


Salaried mass market

Self employed mass market

Salaried mass affluent Others Total

AED'000 AED'000 AED'000 AED'000 AED'000

At 31 December 2015

On balance sheet assets:

Loans and advances

-Credit cards 426,592 82,900 280,010 - 789,502

-Personal loans 647,587 102,087 339,225 - 1,088,899

-Auto loans 59,288 90,741 34,188 - 184,217

-Loans secured by deposits - - - 18,415 18,415

Deposits with banks - - - 130,843 130,843

Other assets - - - 6,876 6,876

Total 1,133,467 275,728 653,423 156,134 2,218,752

Off balance sheet items:

Unused credit card limits 825,060 97,453 694,895 - 1,617,408

Financial guarantees (Note 24) - - - 280,908 280,908

Total 825,060 97,453 694,895 280,908 1,898,316

At 31 December 2014

On balance sheet assets:

Loans and advances

-Credit cards 348,248 51,059 242,559 - 641,866

-Personal loans 399,295 52,935 229,354 - 681,584

-Auto loans 77,116 93,644 43,196 - 213,956

-Loans secured by deposits - - - 10,849 10,849

Deposits with banks - - - 78,411 78,411

Other assets - - - 3,395 3,395

Total 824,659 197,638 515,109 92,655 1,630,061

Off balance sheet items:

Unused credit card limits 485,252 70,224 501,702 - 1,057,178

Financial guarantees (Note 24) - - - 211,659 211,659

Total 485,252 70,224 501,702 211,659 1,268,837

3.1.4 MAXIMUM EXPOSURE TO CREDIT RISK BEFORE COLLATERAL HELD OR OTHER CREDIT ENHANCEMENTS

The following table analyses the Company’s maximum exposures to credit risk at their carrying amounts, as categorised by the market segments and product types, all of which are in the United Arab Emirates.

3.1.5 LOANS AND ADVANCES, NETThe gross amount of loans and advances, net of specific provisions, which are current and past due and the corresponding impairment allowances are as follows:

Recoveries on these loans are recognised when realised, and reduced from impairment charge.

The segmentation of loans and advances is used as a basis to assess the quality of the loans and effectively manage the credit risk.

The total outstanding contractual amount of commitments towards unused credit card limits does not necessarily represent future cash requirements, since these unused credit card limits may not be fully utilised and are revocable by the Company.

Financial guarantees represent guarantees issued by the Company on behalf of customers favouring the UAE Ministry of Labour and other government bodies and are substantially secured by cash collateral (Note 10).

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Current 1,779,825 1,386,938

Past due up to 30 days 105,781 70,740

Past due 31-90 days 138,486 66,674

Past due 91-120 days 56,941 23,903

Total 2,081,033 1,548,255

Impairment Provision

Current (45,163) (32,998)

Past due up to 30 days (1,587) (1,061)

Past due 31-90 days (2,077) (1,000)

Past due 91-120 days (20,115) (8,366)

Total (68,942) (43,425)

Net loan amount 2,012,091 1,504,830


Less than1 year

1 - 5years

More than 5years Total

AED'000 AED'000 AED'000 AED'000

At 31 December 2015

Unused credit card limits 1,617,408 - - 1,617,408

Financial guarantees - - 280,908 280,908

Operating lease commitments 2,899 3,915 - 6,814

Capital commitments 702 - - 702

Total 1,621,009 3,915 280,908 1,905,832

At 31 December 2014

Unused credit card limits 1,057,178 - - 1,057,178

Financial guarantees - - 211,659 211,659

Operating lease commitments 2,727 4,558 - 7,285

Capital commitments 3,252 - - 3,252

Total 1,063,157 4,558 211,659 1,279,374

3.2.2 OFF BALANCE SHEET ITEMS3.2 LIQUIDITY RISK Liquidity risk is the risk that the Company is unable to meet its payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations to repay depositors and fulfil commitments to lend.

The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company’s liquidity management process includes:

• Managing day to day funding, through anticipating and monitoring future cash flow requirements.

• The primary tool employed by the Company is the maturity mismatch analysis, which includes behavioural assumptions on debts and loans repayments based on historical analysis.

• Monitoring balance sheet liquidity ratios, market movements and interest rate forecasts.

• Setting and monitoring limits for the above mentioned process.

Sources of liquidity are regularly reviewed and the Company seeks to diversify funding sources and increase investor base to ensure continuous access to debt markets. All liquidity policies and procedures are subject to review and approval by the Asset and Liability Committee (“ALCO”).

3.2.1 NON DERIVATIVE FINANCIAL LIABILITIES AND LIQUIDITY RISK The table below presents the maturity profile of the cash flows payable by the Company in respect of its non-derivative financial liabilities, by remaining contractual maturities at the statement of financial position date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than1 year

1 - 5 years

Over5 years Total

AED'000 AED'000 AED'000 AED'000

At 31 December 2015

Customer deposits 691,764 469,750 134,429 1,295,943

Due to related parties 8,398 - - 8,398

Borrowings 35,560 91,476 - 127,036

Other liabilities 140,563 - - 140,563

Total 876,285 561,226 134,429 1,571,940

At 31 December 2014

Customer deposits 502,222 308,423 98,151 908,796

Due to related parties 10,829 - - 10,829

Borrowings 10,732 16,126 - 26,858

Other liabilities 99,107 6,701 - 105,808

Total 622,890 331,250 98,151 1,052,291

Unused credit card limits

The contractual amount of the Company’s commitment towards unused credit card limits (Note 24(b)) is summarised in the above table. However, the commitments to extend credit are revocable at the option of the Company.

Financial guarantees

Financial guarantees represent guarantees issued by the Company on behalf of customers favouring the UAE Ministry of Labour and other government bodies and are fully secured by cash collateral (Note 24(b)).

Operating lease commitments

The future minimum lease payments under non-cancellable operating leases for properties as disclosed in Note 24(a).

Capital commitments

Capital commitments are in respect of equipment and software purchases (Note 24(c)).

3.3 MARKET RISKThe Company takes on exposure to market risk, which is the risk that fair value or future cash flows will fluctuate as a result of changes in market prices. Market risk arises from exposure to currency and interest rate fluctuations. The ALCO meets regularly to review and provide direction related to interest rate risk, currency risk and price risk in the Company. It ensures that the exposures of the Company are within prudent levels.

The main measurement techniques used to measure and control market risks are outlined below:

3.3.1 INTEREST RATE RISKInterest rate risk arises from mismatches in the interest rate profile of the Company’s assets and liabilities. Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate due to changes in the market interest rates. The Company takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on both its fair value and cash flow risks. The Company strives to maintain an interest rate profile that will lead to financial performance consistent with its long term objectives.


As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Fluctuation in interest rates by 10 bps 620 510

The ALCO sets limits on the level of mismatch of interest rate re-pricing that may be undertaken, which are monitored by the market risk manager. Regular stress testing is performed using hypothetical scenarios to monitor the Company’s vulnerability to simultaneous shocks on market risks. It gives an indication of the potential loss that arises in extreme conditions, facilitating the proactive management of market risks in an environment of rapid market changes.

The table below summarises the Company’s exposure to interest rate risk. It includes the Company’s assets and liabilities at carrying amounts, categorised by the earlier of contractual re-pricing or maturity dates.

Up to 3 months

3 monthsto 1 year

1 year to5 years

Over5 years

Non-inter-est

bearing Total

Effective interest

rate

AED'000 AED'000 AED'000 AED'000 AED'000 AED'000 AED'000

At 31 December 2015AssetsCash and deposits with banks 76,298 45,128 - - 9,891 131,317 0.62%

Loans and advances 995,436 213,773 783,944 18,938 - 2,012,091 31.96%

Property and equipment - - - - 12,973 12,973

Intangible assets - - - - 10,742 10,742

Other assets - - - - 16,490 16,490

Total assets 1,071,734 258,901 783,944 18,938 50,096 2,183,613

Liabilities and equityCustomer deposits 211,222 467,717 411,995 85,212 - 1,176,146 4.54%

Due to related parties - - - - 8,398 8,398

Borrowings 10,000 21,667 88,333 - - 120,000 3.57%

Employees’ end of service benefits - - - - 7,445 7,445

Other liabilities - - - - 146,060 146,060

Shareholders’ equity - - - - 725,564 725,564

Total liabilities and equity 221,222 489,384 500,328 85,212 887,467 2,183,613

Interest rate sensitivity gap 850,512 (230,483) 283,616 (66,274) (837,371) -

At 31 December 2014AssetsCash and deposits with banks 43,747 35,127 - - 5 78,879 0.39%

Loans and advances 739,954 198,381 566,031 464 - 1,504,830 32.49%

Property and equipment - - - - 7,691 7,691

Intangible assets - - - - 4,787 4,787

Other assets - - - - 11,694 11,694

Total assets 783,701 233,508 566,031 464 24,177 1,607,881

Liabilities and equityCustomer deposits 204,330 288,674 274,118 61,570 - 828,692 4.52%

Due to related parties - - - - 10,829 10,829

Borrowings - 9,901 16,000 - - 25,901 4.02%

Employees’ end of service benefits - - - - 4,696 4,696

Other liabilities - - - - 111,800 111,800

Shareholders’ equity - - - - 625,963 625,963

Total liabilities and equity 204,330 298,575 290,118 61,570 753,288 1,607,881

Interest rate sensitivity gap 579,371 (65,067) 275,913 (61,106) (729,111) -

Interest rate sensitivity

The Company is exposed to the effects of fluctuations in the prevailing levels of rates of interest on its cash flows.

Interest rate risk is assessed by measuring the impact of reasonable possible change in interest rate movements. The Company assumes a fluctuation in interest rates of 10 basis points (bps) and estimates the following impact on the net result for the year and equity at that date:

The interest rate sensitivities set out above are illustrative only and employ simplified scenarios. The sensitivity does not incorporate actions that could be taken by management to mitigate the effect of interest rate movements.

3.3.2 CURRENCY RISKThe Company does not have any significant foreign currency exposures, since its transactions are in UAE Dirham or US Dollar and the UAE Dirham is currently pegged against the US Dollar.

3.3.3 PRICE RISKPrice risk is the risk that the value of the Company’s financial instruments will fluctuate as a result of changes in market prices caused by factors other than interest rates or foreign currency movements. The price risk arises primarily from uncertainty about the future price of financial instruments that the Company holds. The Company does not hold financial instruments whose value is affected by changes in market prices and therefore it is not exposed to any price risk.

3.4 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIESThe fair values of the Company’s financial assets and liabilities approximate their carrying values as reflected in these financial statements.


As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Tier 1 capitalShare capital 550,000 550,000

Share premium 35,544 35,544

Statutory reserve 61,874 40,134

Retained earnings 78,146 285

Intangible assets (10,742) (4,787)

Total Tier 1 capital 714,822 621,176

Tier 2 capital - -

Total Tier 2 capital - -

Total regulatory capital 714,822 621,176

Risk weighted assets On balance sheet 2,153,982 1,591,778

Off balance sheet 4,700 2,200

Total risk weighted assets 2,158,682 1,593,978

Risk asset ratio on total capital base (%) 33.11% 38.97%Risk asset ratio on Tier 1 capital base (%) 33.11% 38.97%Minimum risk asset ratio required by the U.A.E Central Bank 15% 15%

3.5 CAPITAL MANAGEMENTThe Company’s objectives when managing capital, which is a broader concept than the ‘equity’ on the face of balance sheets, is:

• to comply with the capital requirements set by its regulator;

• to safeguard the Company’s ability to continue as a going concern so that it can continue to provide returns for shareholders; and

• to maintain a strong capital base to support the development of its business.

Capital adequacy is monitored regularly by the Company, based on the guidelines stipulated by the Central Bank of the UAE. The minimum capital requirement stipulated by the Central Bank of the UAE is 15%. The Company calculates its capital adequacy ratio in accordance with guidelines established by the Central Bank of the UAE prescribed as the ratio of total capital to total assets and is analysed as follows:

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSThe Company makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

4.1 IMPAIRMENT LOSSES ON LOANS AND ADVANCESThe Company establishes an allowance for impairment losses that represents its estimate of incurred losses in its loan portfolio. The main components of this allowance are a specific loss component that relates to individual exposures, and a collective impairment loss allowance for losses that have been incurred but not identified, established for groups of homogeneous loans with similar risk characteristics. Future cash flows from a group of loans and advances that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar to those in the group.

4.2 OTHER EMPLOYEE BENEFITSThe present value of the equity based payment scheme included in other employee benefits depends on a number of factors that are determined using a number of assumptions. The assumption used in determining the accrual for other employee benefits include the discount and attrition rate. Any change in these assumptions will impact the carrying amount of other employee benefit obligations.

The Company determines the appropriate discount and attrition rate at the end of each reporting period. In determining the appropriate discount rates, the Company considers the interest rates of treasury bonds that have terms to maturity approximating the terms of the other employee benefits liability.

If current year profits were to be excluded in the above calculation,the ratios would be as follows:

Risk asset ratio on total capital base (%) 28.50% 28.35%

If current year profits were included, and proposed final dividend (payout subject to regulatory approval) were excluded in the above calculation,the ratios would be as follows:

Risk asset ratio on total capital base (%) 29.87% 35.28%


As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Cash and deposits with banks 131,317 78,879

Less:

Deposits with maturities over 3 months (45,128) (35,127)

Bank overdraft - (5,901)

86,189 37,851

5. CASH AND DEPOSITS WITH BANKSFor the purpose of the cash flow statement, cash and cash equivalents have been calculated as follows:

7. PROPERTY AND EQUIPMENT

Deposits with banks are placed with financial institutions in the UAE, and carry interest at the rate of 0.62% to 1.2% (31 December 2014: 0.25% to 0.42%) per annum. Deposits of AED 35.1 million (31 December 2014: AED 35.1 million) have been pledged against guarantees issued by a bank on behalf of the Company.

6. LOANS AND ADVANCES, NET

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Personal loans 1,107,314 692,433

Auto loans 184,217 213,956

Credit cards 789,502 641,866

2,081,033 1,548,255

Less: impairment allowance (68,942) (43,425)

2,012,091 1,504,830

Movement in provision for impairment:

At beginning of the year 43,425 25,137

Underwritten customer loans for customers with loans previously written off 14,852 -

Impairment charge for the year (Note 21) 358,736 174,735

Provision netted off from assets (on loans with 100% specific provision) (348,071) (156,447)

At end of the year 68,942 43,425

Office equipment

Leaseholdimprovements

Motor vehicles

Work in progress Total

AED'000 AED'000 AED'000 AED'000 AED'000

Cost

At 1 January 2014 16,709 14,709 702 - 32,120

Additions 3,642 819 - 701 5,162

Disposals (1,352) (389) - - (1,741)

At 31 December 2014 18,999 15,139 702 701 35,541

Additions / (Transfers) 6,594 1,731 120 (415) 8,030

Disposals (74) (26) (110) - (210)

As at 31 December 2015 25,519 16,844 712 286 43,361

Accumulated depreciation

At 1 January 2014 (14,158) (11,586) (614) - (26,358)

Charge for the year (1,978) (830) (32) - (2,840)

Disposals 949 399 - - 1,348

At 31 December 2014 (15,187) (12,017) (646) - (27,850)

Charge for the year (1,714) (930) (42) - (2,686)

Disposals 12 26 110 - 148

As at 31 December 2015 (16,889) (12,921) (578) - (30,388)

Net book value

At 31 December 2015 8,630 3,923 134 286 12,973

At 31 December 2014 3,813 3,122 55 701 7,691


Credit Bureau Implementation

Computer software Total

AED'000 AED'000 AED'000

At 1 January 2014 - 5,409 5,409

Additions - 695 695

Amortisation charge - (1,073) (1,073)

Disposals - (244) (244)

At 31 December 2014 - 4,787 4,787

Additions 4,219 3,653 7,872

Amortisation charge (758) (1,159) (1,917)

Disposals - - -

At 31 December 2015 3,461 7,281 10,742


2015


2014

AED'000 AED'000

Salaries and other short-term employee benefits 14,887 13,959

Other employee benefits 8,964 4,615

11. RELATED PARTY TRANSACTIONS AND BALANCESRelated parties comprise of shareholders and directors of the Company, entities controlled by them and the key management personnel of the Company. During the year the Company entered into the following significant transactions with related parties in the ordinary course of business at mutually agreed terms and conditions.

(a) Transactions with key managerial personnel

Key managerial remuneration comprises:

(b) Other related party transactions and balances

The Company has entered into the following significant transactions with related parties in the ordinary course of business:

The balances due to related parties are payable on demand and bear no interest.Deposit from Dunia Services FZ LLC carry interest at the rate of 3% to 4.50% per annum.

8. INTANGIBLE ASSETS

9. OTHER ASSETS

10. CUSTOMER DEPOSITS

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Prepaid expenses 6,582 6,733

Advances to employees 929 787

Deposits 615 749

Accrued interest receivable 315 69

Repossessed vehicles 3,854 277

Others 5,158 4,856

17,453 13,471

Less: impairment allowance (963) (1,777)

16,490 11,694

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Corporate term deposits 1,176,146 828,692

Customer deposits carry an average interest rate of 4.54% (2014: 4.52%) per annum. Customer deposits of AED 280.9 million (2014: AED 211.7 million) are held as collateral for guarantees issued or to be issued on behalf of customers.


2015


2014

AED'000 AED'000

Deposits

Deposit placed by Dunia Services FZ LLC 60,955 20,000

Deposit placed by Dunia Services FZ LLC, matured during the year 20,000 -

Interest accrued for the year 1,299 281

Expenses

Fees charged by Dunia Services FZ LLC for the provision of business and knowledge processing services on mutually agreed terms 93,446 42,719

Reimbursement of expenses paid by a shareholder for the purpose of financing operating expenses incurred by the Company and other contractual payments for services rendered 6,966 6,595

Cash settlements with Dunia Services FZ LLC 97,898 41,550

Employee benefits transferred to Dunia Services FZ LLC 605 6,393

Balances with related parties

Balances with related parties are as follows:

Deposit from Dunia Services FZ LLC 61,580 20,281

Due to related parties 8,398 10,829


As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

At beginning of the year 4,696 3,828

Charge for the year 3,078 1,538

Payments during the year (329) (670)

At end of the year 7,445 4,696

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Accrued expenses 76,597 63,412

Other employee benefits (Note 17) 37,388 20,485

Sundry creditors 26,127 21,445

Deferred fee and commission income 5,367 5,840

Others 581 618

146,060 111,800

14. OTHER LIABILITIES

15. SHARE CAPITAL

16. DIVIDENDSDividends of AED 58.8 million (AED 106.91 per share) (2014: AED 8.8 million (AED 16 per share)) relating to the year ended 31 December 2014 were paid during the year ended 31 December 2015. An interim cash dividend amounting to AED 59 million (2014: AED 13.2 million) for the year ended 31 December 2015 was proposed and paid during the year.

The Board of Directors at their meeting held on 9 March 2016 proposed a final cash dividend of AED 127.27 per share amounting to AED 70 million. The payout of this proposed dividend is subject to regulatory approval.

The Company has bank facilities of AED 365 million comprising overdraft facilities of AED 65 million and term loan facility of AED 300 million.

Maturity profile of undrawn facilities:

The provision for end of service benefits due to expatriate employees is made in accordance with the UAE Labour Law for their periods of service up to the balance sheet date. In accordance with the provisions of IAS 19, an actuary has carried out an exercise to assess the present value of its obligations as at 31 December 2015, using the projected unit credit method, in respect of employees’ end of service benefits payable under the UAE Labour Law. The expected liability at the date of leaving the service has been discounted to its net present value using a discount rate of 3.78%. (2014: 3.85%).

Under this method an assessment has been made of an employee’s expected service life with the Company and the expected basic salary at the date of leaving the service. The actuary has assumed average annual increment/promotion costs of 6% (2014: 6%) for the next five years and 3% thereafter (2014: 3%).The transfer to Dunia Services FZ LLC represents the actuarial value of liability in respect of the employees who have been transferred to Dunia Services FZ LLC for the period of service in Dunia Finance.

12. BORROWINGS

13. PROVISION FOR EMPLOYEES’ END OF SERVICE BENEFITS

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Term loan 120,000 20,000

Bank overdraft - 5,901

120,000 25,901

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Floating rate

Expiring within one year 65,000 34,099

Expiring within two years 180,000 130,000

245,000 164,099

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Authorised, issued and paid up share capital:

550,000 shares of AED 1,000 each 550,000 550,000


20. FEES AND COMMISSION INCOMEFees and commission income includes a sum of AED 1.4 million (31 December 2014: AED 10.6 million) recognised from the provision of advisory services by the Company.

21. IMPAIRMENT CHARGE, NET

22. GENERAL AND ADMINISTRATIVE EXPENSES

17. OTHER EMPLOYEE BENEFITSCertain employees are entitled to cash payments under an equity based payment scheme (“the scheme”) implemented by the Company. The cash payments are determined on the basis of the value of the shares of the Company at the end of the financial years 2013 and 2015 as determined by an independent valuer.

The accrual in respect of the scheme as at 31 December 2015 is AED 32.9 million (2014: AED 16.6 million) and is determined on the basis of the assumption that all the eligible employees will remain with the Company during the period covered by the scheme.

The Company establishes and implements annual Long Term Incentive Plans (the LTIP) in the form of deferred cash plans payable over three successive years. These benefits are expected to be settled on the anniversary of the grant in each of three successive years following the year in which the annual award was granted.

As of 31 December 2015 the accrual in respect of the LTIP is AED 4.4 million (2014: AED 3.8 million) and is determined on the basis of the assumption that all the eligible employees will remain with the Company during the period covered by the LTIP.

18. STATUTORY RESERVEIn accordance with the UAE Federal Law No (8) of 1984 as amended, and the UAE Union Law No. 10 of 1980, as amended, 10% of the net profit for the year is transferred to a legal reserve, until such time as the balance in the reserve equals 50% of the issued share capital. This reserve is not available for distribution. Accordingly, AED 21.7 million was transferred to the statutory reserve on 31 December 2015 (31 December 2014: AED 19.1 million).

19. INTEREST INCOME AND EXPENSE


2015


2014

AED'000 AED'000

Interest income

- on loans and advances 593,650 417,042

- on deposits with banks 573 176

594,223 417,218

Interest expense

- on customer deposits 45,205 29,174

- on borrowings 2,743 513

47,948 29,687


2015


2014

AED'000 AED'000

Impairment charge on loans and advances (Note 6) 358,736 174,735

Recovery from underwritten customer loans for customers with loans previously written off (11,993) -

Impairment charge on other assets (447) 873

346,296 175,608

Recovery of loans and advances (40,473) (20,159)

305,823 155,449


2015


2014

AED'000 AED'000

Staff costs (Note 23) 80,059 70,002

Outsourced services 53,308 37,265

Information technology expenses 11,836 7,056

Occupancy costs 7,867 8,060

Bank charges 4,994 3,849

Card member benefits 4,281 5,009

Legal and professional fees 4,045 3,047

Advertising, publicity and promotional expenses 4,039 4,666

Card association charges 3,384 2,904

Telephone and fax 2,823 1,815

Visa expenses 515 1,032

Loss on disposal of fixed assets 4 236

Repossession expenses 2,545 690

Credit Bureau charges 3,415 603

Collection fees 6,998 5,528

Other expenses 5,285 4,257

195,398 156,019


As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

No later than 1 year 2,899 2,727

Later than 1 year and no later than 5 years 3,915 4,558

6,814 7,285

As at 31 December

2015

As at 31 December

2014

AED'000 AED'000

Unused credit card limits 1,617,408 1,057,178

Financial guarantees 280,908 211,659

1,898,316 1,268,837

23. STAFF COSTS

24. CONTINGENT LIABILITIES AND COMMITMENTS(a) Operating lease commitments

The future minimum lease payments under non-cancellable operating leases for properties are as follows:

The total outstanding contractual amount of commitment towards unused credit card limits does not necessarily represent future cash requirements, since these credit card limits may not be fully utilised and are revocable at the option of the Company.

Financial guarantees represent guarantees issued by the Company on behalf of customers favouring the UAE Ministry of Labour and other government bodies and are fully secured by cash collateral.

(c) Capital commitments

At 31 December 2015, the Company has capital commitments of AED 702,000 (31 December 2014: AED 3,252,000).

(b) Commitment to extend credit and guarantees


2015


2014

AED'000 AED'000

Salaries and other benefits 60,682 56,508

Employees’ end of service benefits 3,078 1,538

Other employee benefits 16,299 11,956

80,059 70,002

Corporate Head OfficeDunia Finance LLCP.O. Box 44005Abu Dhabi, UAE

24-hour contact center+9714-42-dunia (38642)

www.dunia.ae

dunia Annual Report FY 2015

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Transcript of dunia Annual Report FY 2015