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Bank of Sharjah P.J.S.C.8Notes to the condensed consolidated interim financial statementsfor the nine-month period ended 30 September 20212.Hyperinflation and basis of preparation (continued)a)Hyperinflation (continued)In line with IAS 29, the financial statements of Emirates Lebanon Bank SAL have been restated by applyinga general price index to the historical cost, in order to reflect the changes in the purchasing power of theLBP, on the closing date of the financial statements. The non-monetary items of the statement of financialposition as well as the income statement, statement of other comprehensive income and statement of cashflows of Emirates Lebanon Bank SAL, have been adjusted for inflation and re-expressed in accordancewith the variation of the consumer price index (‘CPI’), at the presentation date of its financial statements.The re-expression of non-monetary items is made from the date of initial recognition in the statements offinancial position and considering that the financial statements are prepared under the historical costcriterion. The consumer price index at the beginning of the reporting period was 284.04 and closed at613.96.The gain or loss on the net monetary position which has been derived as the difference resulting from therestatement of non-monetary assets, owners’ equity and items in the statement of comprehensive income isrecognised in the statement of profit or loss. During 2021, the resulting loss on the net monetary positionfor Emirates Lebanon Bank SAL was AED 1,491 million.The comparative amounts in the consolidated financial statements presented in a stable currency are notadjusted for subsequent changes in the price level or exchange rates. Opening equity reported in the stablecurrency is affected by the cumulative effect of restating non-monetary items at the subsidiary level fromthe date they were first recognised and the effect of translating those balances to the closing rate. Thisresulted in a difference of AED 1,866 million between the closing equity of the previous year and theopening equity of the current year, and is recorded under equity.

Bank of Sharjah P.J.S.C.9Notes to the condensed consolidated interim financial statementsfor the nine-month period ended 30 September 20212.Hyperinflation and basis of preparation (continued)a)Hyperinflation (continued)September 2021ASSETSCash and balances with central banksDeposits and balances due from banksReverse-repo placementsLoans and advances, netInvestments measured at fair valueInvestments measured at amortised costInvestment propertiesIntangible assetsAssets acquired in settlement of debtOther assetsDerivative assets held for riskmanagementProperty and equipmentTotal assetsLIABILITIES AND EQUITYLiabilitiesCustomers’ depositsDeposits and balances due to banksRepo borrowingsOther liabilitiesDerivative liabilities held for riskmanagementIssued bondsTotal liabilitiesEquityCapital and reservesShare capitalStatutory reserveContingency reserveGeneral and impairment reserveInvestment fair value reserveRetained earnings/(accumulated losses)Equity attributable to equity holdersof the BankNon-controlling interestsTotal equityTotal liabilities and equityDecember ------------38,499,471 303,050-----------------------37,762,048 49,730502,586-----------------------36,143,490 49,730329,028-----------------------35,865,508 ---------38,499,471 ---------37,762,048 ----------36,143,490 ----------35,865,508

Bank of Sharjah P.J.S.C.10Notes to the condensed consolidated interim financial statementsfor the nine-month period ended 30 September 20212.Hyperinflation and basis of preparation (continued)a)Hyperinflation (continued)For the nine-month period ended 30 September2021AfterhyperinflationAED’000Interest incomeInterest expenseNet interest incomeNet fee and commission incomeExchange profitIncome/(loss) on investmentsOther incomeOperating incomeNet impairment loss on financial assetsNet operating incomePersonnel expensesDepreciationOther expensesAmortisation of intangible assetsLoss on monetary position(Loss)/profit before taxesIncome tax expense - overseasNet -----------175,058 2020Hyperinflation -128,385 *In the nine months ended 30 September 2020, IAS 29 Financial Reporting in HyperinflationaryEconomies was not applicable.The Lebanese authorities did not declare hyperinflation and thus the increase in income tax expense arisesdue to accounting of fixed assets under hyperinflation.b)Basis of preparationThe condensed consolidated interim financial statements have been prepared in accordance with theInternational Accounting Standard No. 34 - Interim Financial Reporting (“IAS 34”) issued by theInternational Accounting Standards Board and the applicable provisions of UAE Federal Law No 2 of 2015as amended by the Federal Decretal Law No. 26 of 2020 issued on 27 September 2020 and the DecretalFederal Law No. (14) of 2018.The condensed consolidated interim financial statements are presented in U.A.E. Dirhams (AED) as that isthe currency in which the majority of the Group’s transactions are denominated.

Bank of Sharjah P.J.S.C.11Notes to the condensed consolidated interim financial statementsfor the nine-month period ended 30 September 20212.Hyperinflation and basis of preparation (continued)b)Basis of preparation (continued)The accounting policies adopted are consistent with those followed in the preparation of the Group’s annualconsolidated financial statements for the year ended 31 December 2020.These condensed consolidated interim financial statements do not include all the information required infull consolidated financial statements and should be read in conjunction with the Group’s consolidatedfinancial statements for the year ended 31 December 2020. In addition, the results for the period from1 January 2021 to 30 September 2021 are not necessarily indicative of the results that may be expected forthe financial year ending 31 December 2021.Basis of measurementThe Lebanese economy is considered to be hyperinflationary. Accordingly, the results, cash flows and thefinancial position of the Emirates Lebanon Bank SAL have been expressed in terms of the measuring unitcurrent at the reporting date.3.Application of new and revised Standards3.1New and amended IFRS Standards that are effective for the current yearIn the current year, the Group has applied a number of amendments to IFRS Standards and Interpretationsissued by the International Accounting Standards Board (IASB) that are effective for an annual period thatbegins on or after 1 January 2021.The following new and revised IFRSs, which became effective for annual periods beginning on or after1 January 2021, have been adopted in these condensed consolidated financial statements. Their adoptionhas not had any material impact on the disclosures or on the amounts reported in these condensedconsolidated financial statements.New and revised IFRSInterest Rate Benchmark Reform —Phase 2 (Amendments to IFRS 9Financial Instruments, IAS 39 S7FinancialInstruments Disclosures, IFRS 4Insurance Contracts and IFRS 16 Leases)SummaryThe amendments in Interest Rate Benchmark Reform —Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4and IFRS 16) introduce a practical expedient formodifications required by the reform, clarify that hedgeaccounting is not discontinued solely because of the IBORreform, and introduce disclosures that allow users tounderstand the nature and extent of risks arising from theIBOR reform to which the entity is exposed to and how theentity manages those risks as well as the entity’s progress intransitioning from IBORs to alternative benchmark rates,and how the entity is managing this transition.Covid-19-Related Rent Concessions The amendment extends, by one year, the May 2020beyond 30 June 2021 (Amendment to amendment that provides lessees with an exemption fromIFRS 16 Leases)assessing whether a COVID-19-related rent concession is alease modification.Other than the above, there are no other significant IFRSs and amendments that were effective for the firsttime for the financial year beginning on or after 1 January 2021.

Bank of Sharjah P.J.S.C.12Notes to the condensed consolidated interim financial statementsfor the nine-month period ended 30 September 2021 (continued)3.Application of new and revised Standards (continued)3.2New and revised IFRS in issue but not yet effective and not early adoptedNew and revised IFRSsEffective forannual periodsbeginning on or afterAmendments to IAS 16 Property, Plant and Equipment relating to Proceeds 1 January 2022before Intended UseThe amendments prohibit deducting from the cost of an item of property, plantand equipment any proceeds from selling items produced while bringing thatasset to the location and condition necessary for it to be capable of operatingin the manner intended by management. Instead, an entity recognises theproceeds from selling such items, and the cost of producing those items, inprofit or loss.Annual Improvements to IFRS Standards 2018 – 20201 January 2022Makes amendments to the following standards: IFRS 1 First-Time Adoption of International Financial ReportingStandards – The amendment permits a subsidiary that applies paragraphD16(a) of IFRS 1 to measure cumulative translation differences using theamounts reported by its parent, based on the parent’s date of transition toIFRSs. IFRS 9 Financial Instruments – The amendment clarifies which fees anentity includes when it applies the ‘10 per cent’ test in paragraph B3.3.6of IFRS 9 in assessing whether to derecognise a financial liability. Anentity includes only fees paid or received between the entity (theborrower) and the lender, including fees paid or received by either theentity or the lender on the other’s behalf. IFRS 16 Leases – The amendment to Illustrative Example 13accompanying IFRS 16 removes from the example the illustration of thereimbursement of leasehold improvements by the lessor in order toresolve any potential confusion regarding the treatment of lease incentivesthat might arise because of how lease incentives are illustrated in thatexample. IAS 41 Agriculture – The amendment removes the requirement inparagraph 22 of IAS 41 for entities to exclude taxation cash flows whenmeasuring the fair value of a biological asset using a present valuetechnique.

Bank of Sharjah P.J.S.C.13Notes to the condensed consolidated interim financial statementsfor the nine-month period ended 30 September 2021 (continued)3.Application of new and revised Standards (continued)3.2New and revised IFRS in issue but not yet effective and not early adopted (continued)New and revised IFRSsEffective forannual periodsbeginning on or afterAmendments to IFRS 3 Business Combinations relating to Reference to the 1 January 2022Conceptual FrameworkThe amendments update an outdated reference to the Conceptual Frameworkin IFRS 3 without significantly changing the requirements in the standard.Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent 1 January 2022Assets relating to Onerous Contracts - Cost of Fulfilling a ContractThe amendments specify that the ‘cost of fulfilling’ a contract comprises the‘costs that relate directly to the contract’. Costs that relate directly to a contractcan either be incremental costs of fulfilling that contract (examples would bedirect labour, materials) or an allocation of other costs that relate directly tofulfilling contracts (an example would be the allocation of the depreciationcharge for an item of property, plant and equipment used in fulfilling thecontract).IFRS 17 Insurance Contracts1 January 2023IFRS 17 requires insurance liabilities to be measured at a current fulfillmentvalue and provides a more uniform measurement and presentation approachfor all insurance contracts. These requirements are designed to achieve the goalof a consistent, principle-based accounting for insurance contracts. IFRS 17supersedes IFRS 4 Insurance Contracts as of 1 January 2023.

Bank of Sharjah P.J.S.C.14Notes to the condensed consolidated interim financial statementsfor the nine-month period ended 30 September 2021 (continued)3.Application of new and revised Standards (continued)3.2New and revised IFRS in issue but not yet effective and not early adopted (continued)New and revised IFRSsEffective forannual periodsbeginning on or afterAmendments to IFRS 17 Insurance Contracts1 January 2023Amends IFRS 17 to address concerns and implementation challenges that wereidentified after IFRS 17 Insurance Contracts was published in 2017. The mainchanges are: Deferral of the date of ini

Musa Ramahi (872), Mutasem M. Dajani (726), Obada Alkowatly (1056), Rama Padmanabha Acharya (701) and Samir Madbak (386) are registered practicing auditors with the UAE Ministry of Economy. Deloitte & Touche (M.E.) Building 3, Level 6 . The International Monetary Fund (IMF) publishes inflation forecasts. Applying the October 2020 IMF