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Comp any No 1776304

ANNUAL REPORT AND FINANCIAL STATEMENTS

CDB (U.K.) LIMITED

PERIOD ENDED 31 DECEMBER 2009

*A3KCAJur~A14 05/05/2010 141

COMPANIES HOUSE

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CDB (U K.) LIMITED

ContentsPages

Corporate information 1

Directors' Report 2 - 5

Stateme nt of directors' respon sibilities 6

Auditors' report 7 - 8

Statement of Comprehensive income 9

Stateme nt of Financ ial position 10

Statement of Chan ges in equity 11

Statement of Cash flows 12

Notes to the financial stateme nts 13 - 32

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C DB ( U . ) L IM IT ED

Directors

DQ uilligan (resigned 15 March 2010)F G ParserT WalshJ Brydie

Secretary

F G Parker

Auditors

Deloitte LLPLondon

Bankers

Anglo Insh Bank Corporation Limited10 Old JewryLondonEC2R 8DN

Registered office

10 Old JewryLondonEC2R 8DN

Registered number

1776304

Country of incorporation

United Kingdom

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CDB (U.K.) LIMITED

DIRECTORS' REPORT

The directors present their report and the audited financial statements for CDB (U K ) Limited (the Company') forthe penod ended 31 Decem ber 2009

1 REVIEW OF THE DEVELOPM ENT OF THE BUSINESSThe Company acts as an investment holding company responsible for all subsidiary entities in the United Kingdomand therefore acting as an intermediate holding company for most of Anglo Irish Bank Corporation Limited {'AIBC')interests in the U K In the prior peno d the Company inve sted in Japa nese Yen Preference s hares of a subsidiarycompany, thereby facilitating the completion of a Japanese Yen financing arrangement by the CDB (U K ) Limited groupThis Japanese Yen arrangement enabled the Company and its subsidianes, together with the AIBC Group, to avail of lowcost financing on an after tax bas is at Yen interest rates, due to the significant difference between Sterling interest ratesand Yen interest rates dunng the year This arrangement was ended dunng the current penod

2. PARENT COMPANYThe Com pany is a wholly ow ned subsidiary of Anglo Irish Bank Corporation Limited (AIBC'), a company incorporated inthe Republic of Ireland

' 3 PRINCIPAL RISKS AND UNCERT AINTIES| The pnncipal nsks and uncertainties facing the Com pany are low as the Compan y acts as a holding company and

is non-trading The ma in nsk is the performance of its subsidiary entities and the nsk that the investment may becom e| impaired if an entity which the Com pany has invested in performs p oorly thus eroding the value of the investme nt; In addition, in the pnor period, the Compa ny was exposed to foreign excha nge m arket nsk on its foreign cu rrency

denom inated mon etary asset Further detail on the man agem ent of this nsk, the m itigation of this risk , and the ma nner inwhich it is managed and controlled by the Company and the AIBC Group is set out in Note 18 of the audited financialstatement

4 CHANGE OF YEAR END

In order to align with the financial reporting period of AIBC, the ultimate parent undertaking, the Co mpan y ha s chang ed itsreporting penod end from 30 September to 31 Decem ber Accordingly the financial statements include 15 months ofoperations and cash flows to 31 December 2009, and are therefore not directly comparable to the amo unts disclosedfor the pnor period

| 5 RESULTS FOR THE PERIOD AND STATE OF AFFAIRS AS AT 31 DECEM BER 2009i The results for the year and the Statem ent of Financial postition at31 December 2009 are set out, respectively, onI pages 9 and 10

The profit after taxation for the penod amounted to 350,533,241 (2008 60,451,672) The increase in profits is due toforeign exchange mo vements on the Japanese Yen P reference shares Total equity amounted to 1,663,018,520as at 31 December 2009 (30 September 2008 312,485,279)

On 10 October 2008 the sterling authonse d share capital of the Company w as increased to 750,000,000 by thecreation of 500,000,000 ordinary shares of 1 each

On 18 N ovember 2008 the sterling authonsed share capital was increased to 3,750,000,000 divided into3,700,000,000 ordinary shares of 1 each and 50,000,000 redeemable preference shares of 1 each On the18 November 2008, 1,000,000,000 ordinary shares of 1 each were issued at par and subscnbed by Anglo

' Insh Bank Corporation Limited, the parent com pany

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CDB ( U . ) LIMITED

DIRECTORS' REPO RT (Continued)

6 NATIONALISATION OF ULTIMA TE PARENT COMPANYOn 15 January 2009, the Insh Government announced its intention to take Anglo Insh Bank Corporation pic ("theBank"), the ultimate parent undertaking of the Company, into State ownership The Bank's shares were subsequen tlysuspended from trading on the Insh and London Stock Exchanges on 16 January 2009 The Anglo Insh BankCorporation Act 2009 which provided for the transfer of shares of the Bank to the Insh Minister for Finance ("Minister"), was

signed into Insh law on 21 January 2009 On the same date the Bank was re-registered as a pnvate company and its namewas changed from Anglo Insh Bank Corporation pic to Anglo Insh Bank Corporation Limited ("AIBC")The Irish Government, following receipt of European Union approval, provided 3 billion of capital to AIBC onthe 29 June 2009, 827 7m on the 4 August 2009, and a provided a further 172 3m of capital on the 25Septemb er 2009 to AIBC On the 30 March 2010 the Irish Government provided a further 8 3b n to AIBC in the form of apromissory note, fulfilling a comm itment given to the Board of AIBC by the Minister on the 22 De cember 2 009 to provideadditional capital support to AIBC, effective 31 Decem ber 200 9

7 DIVIDENDThe directors do not propose the payment of a dividend in respect of the period ende d 31 D ecember 2009(year ended 30 September 2008 Nil)

8 GOING CONCERNThe performance of the Company's subsidiary en tities has been severely impacted by the current financial a ndeconomic cnsis resulting in impairment of the Compa ny's investment in certain of the subsidianes in the current penodThe directors consider that the outlook remains difficult for the Company and its subsidianes due to the currenteconomic climate and the impact on our clients businesses which are pnmanly involved in the property industry in the UK

Conse quently, this has a significant impact on the Com pany's future performance including the need for continued supportby AIBC due to the uncertainty over future trading results of the Comp any's subsidiane s Details of the nsk ma nage me ntand the policies, governance and analysis of risks in the Company are detailed in Note 18 to the financial statementsin particular, details of the nsk manag ement oversight by the AIBC Group of the Company, demonstrating h ow theCompany and AIBC are reducing nsk in the organisation

The a ssessment by the directors is underpinned by the fact that the ultimate parent company, A nglo Insh B ankCorporation Limited, continues to support the Comp any This includes the provision of a Letter of Support from AIB Cwhich confirms assistance in meeting the Company's liabilities as and when they fall due at least until 31 July 2011

The Company does not maintain any liquid assets itself and places all surplus funds with and draws any required fundsfrom AIBC Cons equen tly the Comp any relies totally on AIBC for the ongo ing daily support of liquidity and funds toenable the Company to function which has operated effectively throughout the penod and continues to do so to the dateof the Director's Report

The directors of the Company have also considered the financial statements of AIBC for the 15 month peno d to 31December 2009 which have been prepared on a going concern basis and the assessment wh ich the directors of AIBCreached in the preparation of its financial statements

The assessm ent by the director's of AIBC is underpinned by the Irish Minister for Finance's (Minister) consisten tstatements that the Insh Government will ensure the continued viability of all systemic financial institutions,including AIBC, in a man ner which is consistent with EU state aid rules In mak ing this assessm ent the directors of AIBCconsidered the potential impact of the following nsk factors and uncertainties which could affect the futureperformance and financial position of AIBC the Insh National Asset Management Ag ency (NAM A) process on the group,liquidity nsks, credit quality, regulatory capital, EU state atd considerations and political factorsimpacting both the AIBC Group and the industry The timing of the NAMA a sset transfers and the valuation haircutsapplied are an important consideration Liquidity nsk conside rations take into accou nt the AIBC G roup's ability tocontinue to access wholesale and money market lines, the ability to continue to access essential central bank and other

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CDB (U.K.) LIMITED

DIRECTORS'REPORT (Continued)

8 GOING CONCE RN (continued)special funding facilities, potential re-finance nsks and the impact of forecast custom er funding balances Creditquality will largely follow trends in the main economic environments in which the AIBC Group operates, which areuncertain In addition decisions by regulatory authorities, the EU or the body politic could adversely impact on AlB C'sability to continue as a going concern

Notwithstanding the existence of such uncertainties, the directors of AIBC in making the determination have taken intoaccount the following mitigating factors the capital injection of 4b n in 2009 into AIBC by the Minister, theMinister's letter of 22 December 2009 which restated his previous commitments in relation to ensunng that the Bank hassufficient capital to continue to meet its regulatory capital requirements, the subsequent receipt of a promissory noteto the value of 8 3bn in fulfilment of the M inister's comm itment, the forecast receipt of senior NAM A bonds in 2010which will be liquidity enhancing, the improving outlook for both the UK and US commercial property markets, and theintroduction of measures by the Insh Government to improve liquidity including the Insh Government guaranteeintroduced in September 2008 and the Credit Institutions Eligible Liabilities Guarantee Scheme ('the ELG Scheme')introduced in Decem ber 2009 As a result the directors of AIBC are satisfied that it is approp nate th at the AIB CGroup's financial statements continue to be prepared on a going concern basis

On the basis of the above assessment by the directors of AIBC and the preparation of its group financial statements forthe 15 months ended 31 December 2 009, which were published on 31 March 2010, the directors of the Com pany have areasonable expectation that the Company has ade quate resources, or will be able to obtain adequate resources from AIBCin terms of additional funding and/ or equity, to continue in operational existence for the foreseeable future Thu s, thedirectors continue to adopt the going concern basis of accounting in prepanng the annual financial statements

9 KEY PERFOR MANCE INDICATORSGiven the limited scope and nature of the business, and that the Company is a wholly-owned subsidiary of Anglo IrishBank Corporation L imited ("AIB C"), the Directors are of the opinion that key performance indicators or other forms ofperformance measurement are not necessary in providing an understanding of the development, performance or positionof the Company The parent undertaking of the Company maintains an oversight of the Company's performance underAlBC's business and governance managem ent structures Further details can be obtained in the Annual Report andAccounts of AIBC at www anqlomshbank com/investors

10 FUTURE DEVELOPMENTSThe directors will continue to closely monitor the performance of the Company which is totally dependent on theperformance of its underlying subsidiaries

11 DIRECTORS AND SECRETARYDeclan Quilligan resigned as a director on the 15 March 2010 Gordon Parker, James Brydie and Thomas Wa lshcontinued to serve as directors througho ut the penod All directors will continue in office in accordance with thearticles of association Gordon Parker served as secretary throughout the penod The directors and secretary had

no interests in the shares of the Com pany dunng the pen od

12 DISCLOSURE OF INFORMATION TO THE AUDITORSEach of the persons who is a director at the date of approval of the report confirms that

so far as the director is aware, there is no relevant audit information of whic h the Company's auditors are u naware , and the director has taken all the steps that he ought to have taken as a director in order to make himself aware of any

relevant audit information and to establish that the Company's auditors are aware of that information

The confirmation is given and should be interpreted in accordance with the provisions of s418 of the Com panies Act 2006

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CDB (U LIMITED

DIRECTORS' REPORT (Continued)

13 DIRECTORS INDEMNITIESThe ultimate parent company has made qualifying third party indemnity provisions for the benefit of the Company'sdirectors which were m ade dunng the pen od and remain in force at the date of this report

14 PAYMENT OF CREDITORSAs the Company is a holding comp any it does not have trade creditors In the event that the Compa ny did have suchcreditors in the future, it is the Company's policy to settle term of payment with supplies where agreeing the terms ofeach transaction, ensure that suppliers are made aware of the terms of paym ent and abide by the terms of payme nts

15 INDEPENDENT AUDITORSErnst & Young LLP, resigned as auditors on 5 October 2009 Deloitte LLP were ap pointed as auditors on13 October 2009

Deloitte LLP have indicated their willingness to be reappointed for another term and appropriate arrangementsare being made for them to be deem ed reappointed as auditors in the absence of an Annual General M eeting

REGISTERED OFFICE APPROVE D BY THE BOARD AND SIGNEDON ITS BEHALF BY

10 Old JewryLondonEC2R 8DN

Date 29 Apnl 2010

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CDB (U.K.) LIMITED

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OFDIRECTORS' REPORT AND FINANCIAL STATEMENT S

The directors are responsible for prepanng the annual report and the Financial Statements in accordance withapplicable United Kingdom law and International Financial Reporting Standards as adopted by the EuropeanUnion (IFRS)

Company Law requires the directors to prepare financial statements for each financial penod which give a true and fairview of the state of affairs of the Company and of the profit and loss of the Com pany for that penod In prepanng thosefinancial statements, International Accounting Standards requires that directors

- select suitable accounting policies and then apply them consistently,

- present information, including accounting policies, in a manner that provides relevant, reliable, comparable andunderstandable information,

- provide additional disclosures when compliance with the specific requirements of IFRS is insufficient to enable usersto understand the impact of particular transactions, other events and conditions on the entity's financial position andfinancial performance, and

- state that the company has complied with IFRS, subject to any matenal departures disclosed and explained in thefinancial statements

The directors are required to prepare the financial statements on the going concern basis, unless it is not appropnateFurther details are given in section 8 of the D irectors' Report

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at anytime the financial position of the Company and which enable them to ensure that the financial statements comply withthe Compan ies Act 2006 They have general resp onsibility for taking such steps as are reasonab ly open to them tosafeguard the assets of the Company and to prevent and detect fraud and other irregularities

The directors confirm that, to the best of their knowledge, they have complied with these requirements in prepanng thefinancial stateme nts, including preparation of thes e financial statements in accord ance with IFRS Under applicable lawsand regulations, the directors also have responsibility for prepanng a Directors' Report, as set out on pages 2 to 5that complies with that law and those regulations

BY ORDER OF THE BO ARD

T WalshDirector

FG ParkerDirector

Date 29 Apn l 2010

6

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INDEPENDENT AUDITORS' REPORT TO THE MEMB ERS OFCDB (U.K.) LIMITED

We have audited the Financial Statements of CDB (U K ) Limited {'the Company') for the penod ended 31 December2009 which compnse the Statement of Comprehe nsive incom e, the Statement of Financial position, the Statement ofChanges in equity, the Stateme nt of cash flows and the related notes 1 to 24 The financial reporting frameworkthat has been applied in their preparation is applicable law and International Financial Reporting Standards(IFRSs) as adopted by the European Union

This report is made solely to the company's members, as a body, in accordance with sections 495 and 496 of theCompanies Act 2006 Our audit work has been undertaken so that we might state to the Com pany's mem bers thosematters we are required to state to them in an auditors' report and for no other purpose To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company'smembers as a body, for our audit work, for this report, or for the opinions we have formed

Respective respon sibilities of directors and indepen dent auditor

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparationof the financial statem ents a nd for being satisfied that they give a true an d fair view

Our responsibility is to audit the financial statements in accordance with applicable law and International Standards onAuditing (UK and Ireland) Those standards require us to com ply with the Auditing Practices Board's (APB 's) EthicalStandards for Auditors

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to givereasonable assurance that the financial statements are free from matenal m isstatement, whether caused by fraud orerror This includes an assessment of whether the accounting policies are appropnate to the company's circumstancesand have been consistently applied and adequately disclosed, the reasonableness of significant accounting estimatesmade by the directors, and the overall presentation of the financial statements

Opinion on financial statements

In our opinion the financial stateme nts

- give a true and fair view of the state of the Co mpa ny's affairs as at 31 Decem ber 2009 an d of its profitfor the penod then en ded

- have been properly prepared in accordance with IFRSs as adopted by the European Union, and- have been prepared in accordance with the requirements of the Companies Act 2006

Opinion on other matter prescribed by the Compan ies Act 2006In our opinion the information given in the Directors' Report for the financial penod for which the financial

statements are prepared is consistent with the financial statements

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OFCDB (U.K.) LIMITED (Continued)

Matters on which w e are required to report by exceptionW e have nothing to report in respect of the foflowing matters where the C omp anies Act 200 6 requires u s to report to youif, in our opinion

- adequ ate accounting records have not been kept, or returns adequ ate for our audit have not been received frombranches not visited by us, or

- the financial statemen ts are not in agreeme nt with the accounting records and returns, or- certain disclosures of directors' remuneration specified by law are not made , or- we have not received all the information and explanations we require for our audit

Caroline Britton (Senior Statutory Auditor)for and on behalf of Deloitte LLPChartered Accountants and Statutory AuditorsLondon, United Kingdom

Date 30 Apnl 2010

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CDB (U.K ) LIMITEDStatement of Comprehensive incomeFor the period ended 31 December 20 09

Interest and similar income.Interest an d similar expens e

Net interest expense

'Foreign exchange gains

Bank charges

Other operating incomei

Operating profit before impairment losses

Impairment losses

Profit before taxation

Taxation credit

Profit for th e period

Other comprehensive income for the penod

Total comprehensive income for the p eriod

attributable to the equity holders of the Company

15 Months 12 Months31 Dec 2009 30 Sep 2008

Notes

3 18,463,037 5,131,954

4 (20,190,166) (25,452,911)

(1,727,129) (20,320,957)

5 455,925,179 76,401,929

(260) (35)

455,924,919 76,401,894

454,197,790 56,080,937

6 (108,986,712) (3,000,000)

345,211,078 53,080,937

g 5,322,163 7,370,735

350,533,241 60,451,672

350,533,241 60,451,672

pie notes on pages 13-32 form part of these Financial Statements

I

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CDB (U.K.) LIMITEDStatement of Financial positionAs at 31 December 2009

Notes

31 December2009

30 September2008

Non - current assets

Non - current liabilities

Loans and borrowings

Total liabilities

Shareholders' equity

Share capital

Retained profits / (losses)

Shareholders' equity

Total shareholders' equity and liabilities

256,165

14 1,360,455,221

16

Investment in subsidianes

Investment in preference shares o f subsidianes10

11

1,138,801,541

1,357,592,623

247,788,253

1,060,844,285

2,496,394,164 1,308,632,538

Current assetsOther assets

Prepayments and accrued income12 527,335,742 9,950,337

281

527,335,742 9,950,618

Total assets 3,023,729,906 1,318,583,156

Current liabilities

Other liabilities 13 256,165 1,227,350

1,227,350

1,004,870,527

1,360,711,386 1,006,097,877

1,253,784,995 253,784,995

409,233,525 58,700,284

1,663,018,520 312,485,279

3,023,729,906 1,318,583,156

The notes on pages 1 3 -3 2 form part of these Financial Statements

The financial statements were approved by the board of directors and authonsed for issue on 29 Apnl 2010

DN BEHALF OF THE BOAR D

V A

- G Parker - Director

3ate 29 Apnl 2010

ompany number 1776304

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CDB (U K.) LIMITEDStatement of Changes in equityFor the period ended 31 December 2009

Note

Share

Capital

Retained

Profits

Total

Balance at 1 October 2007 245,785,000 (1,751,388) 244,033,612

I Profit for the year 60,451,672 60,451.672

Share capital issued 7,999,995 7,999,995

Balance at 30 September 2008 253,784,995 58,700,284 312,485,279

Profit for the penod 350,533,241 350,533,241

Share capital issued 16 1,000,000,000 1,000,000,000

Balance at 31 December 2009 1,253,784,995 409,233,525 1,663,018,520

The notes on pages 13 -3 2 form part of these Financial Statements

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CDB (U.K.) LIMITED

Notes to the financial statements

Accounting policies

The significant accounting policies adopted by the Company are set out below

1 1 Compliance with IFRSThe Company is a pnvate limited company registered in England and Wales

The Financial Statements have been presented in accordance with International Financial Reporting Standards, as adoptedby the European Union ('IFRS')and applied in accordance with the Com panies Act 2006 as applicable at 31 De cember 2009

1 2 Basis of preparationThe Financial Statements have been prepared under the histoncal cost convention, as modified by the revaluation of certainassets and liabilities to the extent required or permitted under accounting standards as set out in the relevant accountingpolicies They are presented in sterling

The preparation of Financial Statements in conformity with IFRS requires management to make estimates and assump tionsthat affect the reported amounts of certain assets, liabilities, revenues and expenses, and disclosures of contingentassets and liabilities Since man agem ent's judge me nt involves making estima tes concerning the likelihood of future

events, the actual results could differ from those estimates Some estimation techniques involve significant amounts ofmanag ement judgem ent, often in areas wh ich are inherently uncertain Further detail is provided in Note 1 14 of theAccounting Policies in these Financial Statements

The Com pany's business activities, togethe r with the factors likely to affect its future deve lopmen t, performance andposition are set out in the Directors' Reports page s 2 - 5- In addition, note 18 to the Financial Statements includesthe Company's objectives, policies and processes for managing its capital, its financial nsk management objective,details of its financial instruments a nd hedg ing activities, an d its exposure to credit nsk a nd liquidity nsk

As descnbed in the Directors' Report on pages 2 - 5, the current economic environment remains difficult therebyimpacting the carrying value of investments in subsidiaries

Further details of the P nncipal nsks and unce rtainties affecting the Compan y are set out in note 18 of the Fina ncialStatemen ts Section 8 of the Directors' Report sets out a detailed assess men t of the Comp any and its ability to operateas a going concern

Based on this assessment, the Financial Statements are prepared on a going concern basis

In order to align with the financial reporting period of the parent undertaking, the Company has changed its reportingperiod end from 30 September to 31 December Accordingly the Financial Statements include 15 months of operationsand cash flows to 31 December 2009, and are therefore not directly comparable to the amoun ts disclosed for the pnorpenod

1 3 Adoption of new accounting standardsFrom 1 October 2008 the Company adopted the following standards

- Amendm ent to IAS 1 - Presentation of financial statements

The Compan y has early adopted the amendment to IAS 1 which has resulted in certain changes to names and presentationof the Financial Statements

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CDB (U.K.) LIMITED

Notes to the financial statements continued

Accounting policies continued

1 4 Interest income and expense recognition

Interest income and expense are recognised in the Statem ent of Compreh ensive incom e for all mterest-beanng financialinstruments u sing the effective interest rate m ethod

The effective interest rate metho d is a method of calculating the amo rtised cost of a financial asset or liability an dof allocating the interest incom e or interest expense over the relevant peno d The effective interest rate is the ratethat exactly discounts the expected future cash payments or receipts through the expected life of the financialinstrument or, when appropnate, a shorter penod, to the net carrying amount of the financial asset or financial liability

I

The calculation includes all fees, transaction costs and other premiums and discounts that are an integral part of the

effective interest rate on the transaction

Once an impairment loss has been recognised on an individual asset, interest income is recognised on the unimpairedportion of that asset using the rate of interest at which its estimated future cash flows were discounted in measunngjmpairment

1 5 Cash and cash equivalentsFor the purposes of the Statement of Cash flows, cash com prises cash on hand an d demand deposits including any loans\o the parent undertaking which acts as the Compan y's banker Cash equiva lents compn se highly liquid investmentsthat are convertible into cash with an insignificant nsk of changes in value and with original maturities of less than threenonths

1 6 Investment in subsidiaries

At cost

Investments in subsidianes are held to matunty and are reflected in the Statement of Financial position at cost less

provision for permanent impairment

jl 7 Investment in preference shares in subsidiaries

Monetary asset

nvestments which feature a nght to receive a fixed or determinable n umber of units of currency are treated as a monetaryisset Where these are tn a foreign currency they are translated at the spot rate of exchange on acquisition and thene-translated at each Statement of Financial position date as further set out in Note 1 12 of these Accounting Policies

I 8 Financial liabilitiesrinancial liabilities are initially recognised at fair value, being their issue proceeds (fair value of consideration received)iet of transaction costs incurred Financial liabilities are subse quently m easured at either amortised cost or fair valuehrough profit or loss All liabilities, other than those de signated at fair value through profit or loss, are subseq uently earnedat amortised cost Any difference between proceeds net of transaction costs and the redemption value is recognised tnhe Statement of Comp rehensive income using the effective interest rate metho d

The classification of an instrument as a financial liability or an equity instrument is dependent on the substance of thel-ontractual arrangement Instruments wh ich carry a contractua l obligation to deliver cash or another financial asset toAnother entity are classified as financial liabilities Interest on these instrum ents are rec ognised in the Statem ent ofpomprehensive income as an expense Other gains and losses ansing from cha nge s in fair value are included directlyin the Statement of Comprehensive income within trading losses/profits

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CDB (U.K.) LIMITED

Notes to the financial statements continued

Accounting policies continued

1 9 Provisions and contingent liabilities

Provisions are recognised for present legal or constructive obligations ansing as consequences of past events where itis probable that a transfer of economic benefit will be necessary to settle the obligation, and it can be reliably e stima ted

When the effect is matenal, provisions are determined by discounting expected future cash flows at a pre-tax rate thatreflects current market assessments of the time value of money and, where appropnate, the nsks specific to the liability

Paym ents are deducted from the present value of the provision an d interest at the relevant discount rate is chargedannually to interest expense Chang es in the presen t value of the liability as a result of movemen ts in interest ratesare included in other financial income The p resent value of provisions are included in other liabilities

Other contingenciesContingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events givingnse to present obligation where the transfer of econ omic ben efits is uncertain and cannot be reliably me asured Con tingentliabilities are not recognised but are disclosed in the notes to the financial statements unless they are remote

11 0 Deferred considerationDeferred consideration represents amounts due to the vendor of Anglo Irish Property Lending Limited which are consideredprobable for payment The investment in subsidiary is increased by the anticipated am ount of any probable deferredconsideration a nd the resultant amoun t due to the vendor is shown in other liabilities, to the extent not already paid Noprovision is made in respect of any element of deferred considera tion which is considered unlikely to be payable

|1 11 Impairment of financial assetsProvision is made for impairment of financial assets to reflect the losses inherent in those assets at the Statementof Financial position date

The Company assesses at each Statement of Financial position date whether there is objective evidence that a

financial asse t or a portfolio of financial asse ts is impaired A financial asse t or portfolio of financial a ssets is im pairedand impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one ormore loss even ts that occurred after the initial recognition o f the asset ('a loss event') and tha t this event (orevents) has had an impact such that the estimated present value of future cash flows is less than the current carryingvalue of the financial asset, or portfolio of financial assets, and can be reliably measured

Objective evidence that a financial asset, or a portfolio of financial assets, is impaired includes observable data thatcomes to the attention of the Company about the following loss events

i significant financial difficulty of the investee,i i decrease in net asset values of the investee,

in it become s probable that the investee will enter bankruptcy or other financial reorganisation,v observable data indicating that there is a me asurab le decrea se in the estimate d future cash flows

from a portfolio of financial assets since the initial recognition o f those assets, althou gh the decrease| cannot yet be identified with the individual financial assets in the portfolio, includingi - adverse changes in the payme nt status of investees in the portfolio, or

- national or local economic conditions that correlate with defaults on the assets in the portfolio

1 12 Foreign currency translationFunctional an d presentational currencyThe Financial Statements are presented in Steding, which is the Company's functional and presentational currency

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CDB (U.K.) LIMITED

i Notes to the financial statem ents continued

Accounting policies continued

1 12 Foreign currency translation continued

Transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of thetransaction Monetary assets and liabilities denom inated in foreign curre ncies are retranslated at the functionalcurrency rate of exchange ruling at the Stateme nt of Financial position date All differences are recognised in theStatement of Comprehensive income Foreign exchange gains and losses resulting from the settlement of suchtransactions and from the retranslation at penod end exch ange ra tes of monetary asse ts and liabilities de nom inatedin foreign currencies are recognised in the Statement of Comprehensive income

Non-monetary items that are measured tn terms of histoncal cost in a foreign currency are translated using thelexchange rates as at the dates of the initial transactions Non-m onetary items m easured at fair value in the foreigncurrency are translated using the exchange rates at the date when the fair value was determined

11 3 Taxation (current and deferred)

Current tax is the expected tax payable (shown as a liability) or the expected tax receivable (shown as an asset) onthe taxable income for the penod adjusted for changes to previous years and is calculated based on the applicable taxlaw in the United Kingdom Deferred tax is provided using the balance liability method on temporary differences ansingbetween the tax bases of assets and liabilities for taxation purposes and their carrying amounts in the FinancialStatem ents Current and deferred taxes are determined u sing tax rates based on legislation enacted or substantivelyenacted at the Statement of Financial position and expected to apply when the related tax asset is realised or therelated tax liability is settled

Deferred tax is determined using tax rates based on legislation enacted or substantially enacted at the Statement ofFinancial position date and expec ted to apply when the deferred tax asset is realised or the deferred tax liability is se ttled

Deferred tax assets are recog nised where it is possible that future taxable profits will be available a gainst whichtemporary differences will be utilised

Current and deferred taxe s are recognised in the Statem ent of Com prehe nsive income in the penod in which the profits o rlosses ans e except to the extent that they relate to items reco gnised in equity, in which case taxe s are alsoecogmsed in equity

Deferred and current tax assets an d liabilities are only offset whe re the re is both the legal right and intention to settle on ale t ba sis, or to realise the asset an d settle the liability sim ultaneo usly

1 14 Significant accounting estimates and judgem entsThe reported results of the Company are sensitive to the accounting policies, assumptions and estimates that underlie

he preparation of its Financial Statements

|FRS require the directors in prepanng the Company's Financial Statements, to select suitable accounting policies, apply[hem consistently and make judgem ents and estimates that are reasonable and prudent

The judge me nt and estimates involved in the Com pany's a ccoun ting po licies that are considered by the directors to be thenost important to the portrayal of the Company's financial condition and that have a significant nsk of causing anatenal adjustment to the carrying amount of the assets and liabilities within the next financial year are discussed|)elow The use of standards, assum ptions or mode ls that differ from those ad opted by the Com pany could affect iteported results

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Notes to the financial statements continued

Accounting policies continuedI

1 14 Significant accounting estimates and judgem ents (continued)

Impairment of investments in subsidiaries

In the case of investments in subsidianes the Company has considered the decline in net asset values of subsidianes toascertain whether any impairmen t has occurred Impairmen t is recogn ised when there is objective evidence that a specificinvestmen t is impaired Evidence of impairm ent is assessed by reference to the underlying net assets of the subsidiary,and all other available information The determ ination of whether or not objective evidence of impairment is presentRequires the exercise of significant management judgementTaxation

The taxation charge accounts for amounts due to fiscal authonties in the United Kingdom, and includes estimatesbased on a judgement of future profits and the application of law and practice in certain cases in order to determinethe quantification of any liabilities ansing In amv ing at such estimates, m anag em ent assesses the relative me ntsand nsks of tax treatments assumed, taking into account statutory, judicial and regulatory guidance and, where.appropriate, external advice Wh ere the final tax outcome is different from th e amoun ts that are currently recorded,|such differences will impact upon the current and deferred tax am ounts in the pen od in which such determ ination is m ade

115 ConsolidationConso lidated financial statements have not been prepared as the Com pany is exempt from the obligation to prepare a nddeliver group accounts under section 400 of the Com panies Act 2006 The Company complies with all the conditions set out|in section 400 of the Companies Act as a wholly owned subsidiary of a company incorporated in another EEA state

1 16 Prospective accounting chan gesThe Company has not applied the following new standards, amendments to standards and interpretations (IFRICs) thathave been adopted by the International Accounting Standards Board which would be applicable to the Company with aneffective date after the date of these financial stateme nts

IFRS 8 - Operating Segments,Amendments to IAS 7 - Statement of Cash Flows,Amendments to IAS 23 - Borrowing Costs,Amendments to IAS 24 - Related Party Disclosures,Ame ndmen ts to IAS 32 - Financial Instruments Presen tation,Amendments to IAS 36 - Impairment of Assets,Amend ments to IAS 39 - Financial Instruments Reco gnition and Measure ment - Eligible Hedg ed Items,

These will be adopted in future years and are not expected to have a matenal impact on the Company's results orFinancial Statements

The directors are still considenng the impact of the following new standard\FRS 9 - Financial instruments

Ldditional standards or amended to standards to be adopted in the future are not listed here as they are not expectedio be relevant to the results of the Com pany in the future

1 17 Segmental reportingBusiness segments are distinguishable components of the Company that provide products or services that are subjecto nsks and rewards that are different to those of other business segm ents Geographical segments provide p roducts andServices within a particular economic environment that are subject to nsk s and rewards that are different to those o f[components operating in other econom ic e nvironme nts

2 Segmental ReportingThe Company only has o ne business segment which is the investment in subsidianes and one geographical segment

vhich for reporting purposes is the United Kingdom17

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Notes to the financial statements continued

3 interest and similar income

Interest on preference sharesInterest on intercompany loan to parent undertakingForeign currency gain

15 months31 Dec 2009

17,376,0861,028,656

58,29518,463,037

12 months30 Sep 2008

5,131,954

5,131,954

Details of the dividend receivable on the preference shares, w hich is treated as interest incom e for IFRS, is set out inNote 11 of these Financial Statem ents Details of the interest terms on the intercompa ny loan to the parentundertaking is set out in note 12 of these Financial Statements

15 months 12 months4 Interest and similar expense 31 Dec 2009 30 Sep 2008

Interest on intercompany loan from paren t undertakingInterest on intercompany loan from g roup undertakingInterest on other liabilities

25,452,91120,189,763

40 320,190,166 25,452,911

Details of the terms of the loan from th e parent unde rtaking and the loan form group undertaking are set out in note 14 ofthese Financial Statements

15 months 12 months5 Foreign exchange gains 31 Dec 2009 30 Sep 2008

Foreign exchange revaluation on foreign currency assets 455,925,179 76,401,929

Revaluation on foreign currency assets represents the impact of a Japanese Yen financing arrangement, enteredinto in May 2008 to enable the Company and certain subsidianes to avail of low cost financing on an after tax basis atYen interest rates This arrangement was ende d dunng D ecember 2008 and January 2009 The gains in the currentperiod arise from the revaluation of the investment in the preference shares issue d by Anglo Irish Treasury F inancingLimited, offset by revaluation of a Japanese Y en loan received from Anglo Insh Asset Finance pic in the current penodAs part of a wider transaction in the AIBC Group, the gains to the Company on foreign exchange on this financingtransaction are offset by other foreign exchange losses in the penod in vanous UK group companies of the parentundertaking, Anglo Insh Bank Corporation Limited

15 months 12 months6 Impairment losses 31 Dec 2009 30 Sep 2008

Impairment of investment in subsidianes 108,986,712 3,000,000

The impairment loss in the current penod is the amount by which the carrying amount of Anglo Insh Asset Finance pic(100,000,000), Anglo Insh Property Lending Limited (5,236,712), Anglo Insh Commercial Properties (No 1) Limited(3,000,000) and Argyle Investment Finance Limited (750,000) excee ded the recoverable amount The imp airment loss inthe pnor penod is the amount by which the carrying amount of the investment in Anglo Insh Property Investors Limited, asubsidiary of CDB (U K ) Limited, exceeded its recoverable amount

As a result, the cost of the investments for each entity were wn tten dow n as detailed in Note 10 of these Fin ancialStatements

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Notes to the financial s tatemen ts continued

7 Directors' emoluments

No director received any emoluments from the Company (2008 none)

8 Profit before taxation

The audit fee for the statutory accounts is borne by the parent undertaking of the Company, Anglo Insh Bank CorporationLimited The fee relating to this Com pany was 20,000

Taxation

15 months31 Dec 2009

12 months30 Sep 2008

Corporation tax

Current penod / year credit (5,322,163) (7,370,735)

Taxation credit (5,322,163) (7,370,735)

Effective tax rate (2%) (14%)

The reconciliation of tax on profit on ordinary activities at the standard corporation tax rate to the Company's actual totaltax charge / (credit) is analysed as follows

Profit before taxation 345,211,078 53,080,937

Profit on ordinary activities before taxation at 28% (200 8 29% )Effects ofForeign exchange gains on Japanese Yen monetary assets / liabilities

Preference dividend incomeTransfer pncing adjustmentImpairment lossesTotal tax charge / (credit)

96,659,102

(127,271,317)

(5,253,038)26,811

30,516,279(5,322,163)

15,393,472

(22,156,559)

(1,488,268)10,620

870,000(7,370,735)

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Notes to the financial statements continued

Investment in subsidiaries

Subsidiaries at costAnglo Insh Credit picAmblepath Properties Limited

Anglo Insh Asset LimitedArgyle Investment Finance LimitedClickinput LimitedFinance 2000 picAnglo Insh Carry Partner LimitedSutherland Finance and LeasingAnglo Insh Finance LimitedAnglo Insh Asset Finance picAnglo Insh Commercial Properties (No 1) LimitedAnglo Insh Commercial Properties LimitedAnglo Insh Capital GP LimitedAnglo Irish Property Lending LimitedAnglo Insh Pnvate Capital LimitedAnglo Irish Property Investors LimitedAnglo Insh Treasury Financing Limited

Cumulative impairment of investmentsAnglo Insh Credit picAnglo Insh Property Investors LimitedAnglo Insh Assets Finance picAnglo Insh Property Lending LimitedAnglo Insh Commercial Properties (No 1) LimitedArgyle Investment Finance Limited

Total

31 Dec 2009

7,333,60410

741,000,000

161,947

182,597

1001,220,000,000

3,000,0001,125,000

11,335,0005,236,712

1

3,000,000100

1,252,175,147

(1,386,894)(3,000,000)

(100,000,000)(5,236,712)(3,000,000)

(750,000)

(113,373,606)

1,138,801,541*"

30 Sep 2008

7,333,60410

741,000,000

161,947

182,597

10 0220,000,000

3,000,0001,125,000

11,335,0005,236,712

13,000,000

10 0252,175,147

(1,386,894)(3,000,000)

(4,386,894)

247,788,253

The Com pany indirectly owns the entire issued share capital of Anglo Insh L easing Limited, I FT Nom inees Limited andBerfors Nominees Limited through Anglo Insh Credit pic

The Com pany indirectly owns 75% of the equity and loan capital contnb uted to the Anglo Aggmo re Limited Pa rtnershipThe capital contnbution earns a return of 10% per annum on their capital and thereafter the Company is indirectly entitledto 50% of the remaining profit of this partnership and its subsidiaries This inv estme nt is held through Anglo IrishCommercial Properties Limited

The Co mpa ny, through Anglo Insh Capital GP Limited, is the general partner of Anglo Insh Capital UK LimitedPartnership, Anglo Irish Capital UK (2) Limited Partnership and Anglo Insh Capital UK (3) Limited Partnership

All companies and partnerships are registered in England and Wales

All of the above investments are in Sterling except for the investment in Anglo Insh Capital GP Limited whichcomprises ordinary shares of 12,500,000 and 2,750,000 (2007 12,500,000 a nd 2 ,750,000)

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Notes to the financial statements continued

10 Investm ent in subsidiaries continued

Details of the pnncipal subsidianes, all of which are consolidated in the AIBC Group, and are registeredin England and Wales are

Principal Country ofPrincipal subsidiaries Holding activity incorporation

Anglo Insh Credit pic 100% Dormant United K ingdomAmblepath Properties Limited 100% Investment property United K ingdomAnglo Irish Asset Limited 74% Hire purchase/leasing United K ingdomArgyle Investment Finance Limited 100% Property Management United K ingdomClickinput Limited 100% Investment Holding C ompany United KingdomFinance 2000 pic 100% Investment Holding Com pany United K ingdomAnglo Insh Carry Partner Limited 100% Investment Holding Company United K ingdomSutherland Finance and Leasing 100% Dormant United KingdomAnglo Insh Finance Limited 100% Finance United K ingdom

Anglo Insh Asset Finance pic 100% Comm ercial lending & InstalmentC United K ingdomAnglo Insh Commercial Properties (No 1) Ltd 100% Investment Holding Company United K ingdomAnglo Insh Commercial Properties Limited 100% Investment H olding Company United KingdomAnglo Insh Capital GP Limited 100% Investment Holding Com pany United KingdomAnglo Insh Property Lending Limited 100% Commercial Finance United KingdomAnglo Irish Private C apital Limited 100% Dormant United KingdomAnglo Insh Property Investors Limited 100% Investment Holding Com pany United Kingdo mAnglo Insh Treasury Financing Limited 100% Finance United K ingdom

11 Investment in preference shares of subsidiaries 31 Dec 2009

30 Sep 2008

Investment in Anglo Insh Treasury Financing Limited 1,357,592,623 1,060,844,285

This investment in Anglo Insh Treasury F inancing Lim ited is in the form of preference shares Thes e preferenceshares are variable rate cumulative preference sh ares of 10,000 ea ch The preference dividend is calculatedat the annual rate of 70% of the sum of the three month Yen LIBOR rate plus 0 875%

12 Other assets

Amo unts owed by group undertakings

Amounts owed by parent undertakingOther receivables

31 Dec 2009 30 Sep 2008

13,202,618 1,363,725

514,133,124 8,585,635- 977

527,335,742 9,950,337

Amou nts owed by group undertakings are provided on an interest free basis with no fixed terms of repayment

Amounts owed by parent undertaking in the current penod, are provided to Anglo Irish Bank Corporation Limited(AIBC ) The facilities are provided to AIBC as part of the ending of the Yen financing arran geme nt (see Note 5)and bear interest at GBP libor plus a margin

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Notes to the financial statements continued

13 Other liabilities

Sundry liabilitiesDeferred consideration

31 Dec 2009 30 Sep 2008

189 136255,976 1,227,214256,165 1,227,350

This deferred con sideration anse s from the onginal acqu isition of Ang lo Insh Property Lending LimitedA 679,634 provision has not been recognised as a liability as the likelihood of the future liability occurnngis not considered probable due to losses ansmg in Anglo Insh Property Lending Limited

14 Loans and borrowings

Amounts Falling Due After One YearAmounts owed to group undertakingAmounts owed to parent undertaking

31 Dec 2009 30 Sep 2008

1,360,455,221 107,213- 1,004,763,314

1,360,455,221 1,004,870,527

Amounts owed to group undertaking in the current penod, are pnmarily provided by Anglo Irish Asset Finance picThe 201 billion loan is provided by AIAF as part of the en ding of the Yen financing arrangemen t (see Note 5) andbears interest at JPY libor plus a margin

Amounts owed to parent undertaking after one year in the prior penod, were provided by Anglo Irish BankCorporation Limited The facilities were provided by AIB C to enable the Comp any to fund its investment inAnglo Insh Treasury Financing Limited and bear interest at GBP libor plus a ma rgin Thes e were repaid dunn gthe current period

The amount owing to group undertaking longer than a year in prior penod is provided by CDB InvestmentsLimited, and is interest free, with no fixed terms of repayment

15 DEFERRED TAXATION

There is a potential deferred tax liability of 148 ,663,85 7 w hich could arise o n a disposalof Anglo Insh TreasuryFinancing Lim ited This has not been reco gnised as it is not expecte d that this will ans e in the foreseeable future

I

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Notes to the financial statements continued

16 Share capital

Authonsed3,700,000,000 Ordinary shares of 1 each12,500,000 Ordinary shares of 1 each

50,000,000 1 Redeemable P reference shares

31 Dec 2009

3,700,000,0008,585,000

50,000,0003,758,585,000

30 Sep 2008

200,000,0008,585,000

50,000,000258,585,000

Allotted, called and fully paid1,199,749,995 Ordinary shares of 1 each12,500,000 Ordinary shares of 1 each45,450,000 1 Redeemable Preference shares

1,199,749,9958,585,000

45,450,0001,253,784,995

199,749,9958,585,000

45,450,000253,784,995

On 10 October 2008 the sterling authonsed share capital of the Company was increased to 750,000,000 by thecreation of 500,000,000 ordinary shares of 1 each

On 18 November 2008 the sterling authonsed share capital was increased to 3,750,000,000 divided into3,700,000,000 ordinary shares of 1 each and 50,000,000 redeemable preference shares of 1 each On the18 November 2008, 1,000,000,000 ordinary shares of 1 each were issued at par and subscnbed by Anglo InshBank Corporation Limited, the parent company, thereby increasing sterling ordinary share capital by1,000,000,000 to 1,199,749,995

17 Cash flow statement

Non-cash items

Net decrease in prepayments and accrued incomeGroup relief to group undertakingsImpairment lossesExchange movements

Cash and cash equivalents

Amounts owed by parent undertaking

31 Dec 2009

30 Sep 2008

2815,322,163 1,363,726

108,986,712 3,000,000(296,748,338) -(182,439,182) 4,363,726

31 Dec 2009 30 Sep 2008

514,133,124 8,585,635514,133,124 8,585,635

18 Risk management and control

The Com pany is subject to a vanety of nsks and unc ertainties in the norm al course o f its business activities Th epnncipal nsks and uncertainties facing the Company relate to credit nsk on its monetary asset and investments insubsidianes, liquidity nsk for paymen t obligations on its loans and borrow ings and m arket nsk ansing from thestructure of the Statemen t of Financial position The other nsks facing the Com pany are comp liance andoperational nsks

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Notes to the financial statements continued

18 Risk management and control continued

A key objective for the Anglo Insh Bank Corporation Limited ('AIBC') group, including the Company, over the next 5

years is to reduce the nsk profile of the business This note descnbes the nsk mana gem ent and control framework inplace in the AIBC G roup and sets out the key nsks which could impact the Company and AIBC Group's future resultsand financial position A more detailed analysis of the AIBC Group Risk M anagement Framework, nsk appetite, nskstrategy a nd overall structure is provided m note 51 of the Annual report a nd Accounts 2009 of AIBC which areavailable as detailed in note 20 of these Financial Statements

In order to effectively minimise the im pact of these nsks, the directors p lace significant reliance on the Groupprocesses and nsk ma nagement framework of the vanous comm ittees and control functions of the parent, AIBCIn particular, the AIBC Risk and Compliance C omm ittee oversees nsk m anagem ent an d compliance covenng credit,market, liquidity and operational nsk The directors of AIBC and the Comp any de legate their monitonng an d control

responsibilities to the AIBC Group Credit Committee for credit matters and to the AIBC Group Asset an LiabilityComm ittee ("AIBC ALC O") for market nsk and liquidity nsk matters The m embe rs of these comm ittees include se niormanagem ent and non-executive directors from throughout the AIBC Group a nd are supported by a dedicated AIBCGroup Risk management function ("AIBC Group Risk M anagement")

AIBC Group Risk M anagement, AIBC Group Finance and AIBC Group Internal Audit are central core functions of theAIBC Group, independent of line management, whose roles include monitonng the Company's activities to ensurecompliance which financial a nd operating controls The general schem e of nsk man agement, financial control andoperational control is design ed to safeguard the Co mpa ny's assets wh ile allowing sufficient operational freedom forthe business units to earn a satisfactory return for shareholders

Credit riskCredit Risk is the risk that the Co mpany will suffer financial loss from a counterpa rty failure to pay interest, repay

capital or meet a commitment The Company's pnmary financial asset is an investment in the preference shares ofAnglo Insh Treasury Financing Limited, for which it receives dividend income Other financial assets are non - quotedinvestmen ts in subsidiaries and loans to parent undertaking an d other group com pan ies The Company is thereforeonly exposed to the credit nsk of other group companies of AIBC or to AIBC to itself

Risk concentrationAs the Company's pnmary investment is in Anglo Insh Treasury Financing Limited, a fellow group subsidiary ofCDB (U K ) Limited, the Company does nol have an exposure to any other underlying industry or geographic sectorsother than the financial services and real estate investment sectors

The following table presents the Company's maximum exposure to credit nsk before collateral and other creditenhancements

2009Exposure in the Statement of Financial position

Investment in subsidianes - at cost net of impairmentInvestment in preference shares of subsidianesOther assets - loans to group and parent undertakingTotal

Market riskMarket nsk is the potential adverse change in incomeinterest rates, foreign exchange rates or other marketof Financial position Market risk primanly arises fromrates

1,138,801,5411,357,592,623

527,335,7423,023,729,906 -

or the value of the net worth ansing from movements inpnces Market nsk anses from the structure of the Statementexposure to changes in interest rates and foreign exchange

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30 September 2008AssetsInvestment in subsidianesInvestment in preference shares of subsidianesOther assetsPrepayments and accrued incomeTotal assets

LiabilitiesLoans and borrowingsOther liabilities

Total liabilities

Shareholder's equity

Share capitalRetained profitsShareholders' funds

Total shareholders' equity and liabilities

8,585,000

8,585,000

303,900,279

1,309,998,156

Notes to the financial statements continued

18 Risk management and control continued

The Com pany's pnmary financial asset is denominated in Japanese Yen This is matched by a Japanese Yen loanreceived from An glo Irish Asset Finance pic in the current penod As such the Comp any does not have any significant

Currency Statement of Financial position

31 December 2009AssetsInvestment in subsidianesInvestment in preference shares of subsidianesOther assetsPrepayments and accrued incomeTotal assets

Liabilities

Loans and borrowingsOther liabilitiesTotal liabilities

Shareholder's equityShare capitalRetained profitsShareholders' funds

Total shareholders' equity and liabilities

summ anses the foreign exchange exposure of the Com pany

EU R

GB P

JPY

Total

8,585,000 1,130,216,541

520,819,0141,357,592,623

6,516,728

1,138,801,5411,357,592,623

527,335,742

8,585,000 1,651,035,555

107,213256,165

1,364,109,351

1,360,348,008

3,023,729,906

1,360,455,221256,165

- 363,378 1,360,348,008 1,360,711,386

8,585,000 1,245,199,995409,233,525

- 1,253,784,995409,233,525

8,585,000 1,654,433,520 - 1,663,018,520

8,585,000 1,654,796,898 1,360,348,008 3,023,729,906

EU R

GB P

JP Y

Total

8,585,000 239,203,253

9,950,337281

1,060,844,285247,788,253

1,060,844,2859,950,337

28 18,585,000 249,153,871

1,004,870,5271,227,350

1,060,844,285 1,318,583,156

1,004,870,5271,227,350

- 1,006,097,877 - 1,006,097,877

8,585,000 245,199,99558,700,284

- 253,784,99558,700,284

312,485,279

1,318,583,156

The Company's financial assets and liabilities have interest rates that reset at the same time and under the same basis,thus eliminating interest rate nsk in the Company Conse quently the re is no interest rate sensitivity analysis performedAn interest rate re-pncing table is provided in Note 20 of these Financial Statements

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Notes to the financial statem ents continued

18 Risk management and control continued

Liquidity nsk

Liquidity nsk is the nsk that the Company does not have sufficient financial resources available at all times to meetits contractual and contingent cashflow obligations or can only secure these resources at excessive cost

It is the Company's policy to ensure that resources are available at all times to meet the Company's or its subsidianesobligations arising from the drawdown of customer facilities and asset expansion This is achieved through a com mitmentfrom AIBC to con tinue to provide financial resources for the foreseeab le future and at least until the 31 July 201 1

All surplus cash is transferred and placed with AIBC on a daily basis by the Com pany a nd any cash requirement a re drawnfrom AIBC daily Conse quently, the Comp any does not carry any independ ent liquidity for its ow n purpose and is totallydependent on AIBC for ongoing support

Liquidity nsk is measured using the cash flow mism atch approach where cash inflow and outflow are analysed toproduce a net cash flow position over set time penods

The following tables present the cash flows payable by the Company under financial liabilities by remaining contractualmatunties at the Statement of Financial position date

31 December 2009Over three Over onemonths but year but

Not more not more not more Overthan three than one than five five

months year years years Total

Financial liabilitiesLoans and borrowings 20,189,763 - 80,759,052 1,360,455,221 1,461,404,036Other liabilities - 256,165 - 256,165Total financial liabilities 20,189,763 256,165 80,759,052 1,360,455,221 1,461,660,201

Undated loans and borrowings have been included in amounts matunng over 5 years30 September 2008

Over three Over onemonths but year but

Not more not more not more Overthan three than one than five five

months year years years Total

Financial liabilities

Loans and borrowings 25,452,911 - 101,811,644 1,004,870,527 1,132,135,082Other liabilities - 565,224 661,990 - 1,227,214Total financial liabilities 25,452 ,911 565,224 102,473,634 1,004,870,527 1,133,362,296

Operational riskOperational nsk represents the nsk that failed or inadequate controls and processes, unauthonsed activities, people orsystems failure, or exposure to external events could result in unexp ected losses The nsk is associated with hum anerror, systems failure, an d inadequate controls and procedures Due to the limited nature of the Comp any's activities itis difficult for the Com pany to suffer an operational e rror

The m anagement of operational nsk is monitored by the AIBC G roup Risk M anagem ent and by the directors

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Notes to the financial statements continued

18 Risk management and control continued

Compliance nsk

The directors are responsible for ensunng that the Company is compliant with all relevant laws and goodpractice guidelines Non compliance can give nse to reputational loss, legal or regulatory sanctions or maten al

financial loss

The AIBC G roup Risk and Compliance has oversight of all compliance issues for the AIBC Group, including this Com pany

Capital management

The objectives of the Com pany's capital manag emen t policy are to efficiently ma nage the capital base tooptimise the return of the Company

The responsibility for capital adequacy rests with the directors The directors m anage the capital structure andmake adjustments to it in light of changes in economic conditions or changes in the nsk profile of assets

The capital ratio at penod end were as follows

31 Dec 2009 30 Sep 2008

Total equity 1,663,018,520 312,485,279

Total Debt 1,360,455,221 1,004,870,527

Debt Equity ratio 0 82 3 22

Total capital has grown during the year due to an increase in issued share ca pital of 1,000,00 0,000 Furtherdetail is provided in Note 15 of these F inancial Statements Retention of profits ha s also increased capital in thepenod

19 Fair value of financial assets and financial liabilities

The following table represents the carrying amount and the fair value of the Company's financial assets and financialliabilities at the year-en d

31 Dec 2009 30 Sep 2008CarryirAmour

Financial assets

Investment in preference shares ofsubsidianesOther assets

Financial liabilitiesLoans and borrowingsOther liabilities

CarryingAmount

Fair Value CarryingAmountFair Value

1,357,592,623 1,357,592,623 1,060,844,285 1,060,844,285

527,335,742 527,335,742 9,950,337 9,950,337

1.884.928.365 1.884.928.365 1.070.794.622 1.070,794,622

1,360,455,221256,165

1.360.711.386

1,360,455,221256,165

1.360.711.386

1,004,870,5271.227,350

1.006.097.877

1,004,870,5271,227,350

1.006.097.877

The directors believe that the fair value of financial assets and liabilities approximate to their current value TheFinancial assets' fair value has been determined utilising a permanent impairment review methodology whereas the

Financial liabilities have an indeterminate repayment date and the fair value is thus considered to be current value27

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Notes to the f inancial s tatements continued

20 Interest rate repricing

AssetsInvestment in subsidiaries

Investment in preference shares ofsubsidiariesOther assets

Prepayments and accrued incomeTotal assets

Not morethan three

months

1,357,592,623514,133,124

1,871,725,747

Over threemonths but

not morethan sixmonths

Liabil i t iesLoans and borrowingsOther liabilitiesTotal liabilities

(1,360,348,008)

(1,360,348,008)

Shareholders ' equityShare capital

Retained profitsTotal shareholders' equity

Interest rate repricing gap 511,377,739

Cumulat ive interest rate repricinggap 511,377,739 511,377,739

31 December 2009

Over sixmonths but

not morethan one

year

Over oneyear but

not morethan five

years

Overfive

years

No ninterestbearing

Total

1,138,801,541 1,138,801,541

13,202,6181,357,592,623

527,335,742

1,152,004,159 3,023,729,906

(107,213)(256,165)(363,378)

(1,360,455,221)(256,165)

(1,360,711,386)

(1,253,784,995)(409,233,525)

511,377,739

(1,253,784,995)(409,233,525)

- - (1,663,018,520) (1,663,018,520)

(511,377,739)

511,377,739 511,377,739

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CDB (U.K.) LIMITED

Notes to the financial statements continued

20 Interest rate repricing continued

AssetsInvestment in subsidianesInvestment in preference shares ofsubsidianesOther assets

Prepayments and accrued incomeTotal assets

Not morethan three

months

1,060,844,285

1,060,844,285

Over threemonths but

not morethan sixmonths

LiabilitiesLoans and borrowingsOther liabilitiesTotal liabilities

(1,004,763,314)

(1,004,763,314)

Shareholders' equity

Share capitalRetained profitsTotal shareholders' equity

Interest rate repricing gap 56,080,971

Cumulative interest rate repricing gap 56,080,971 56,080,971

30 September 2008

Over sixmonths but

not morethan one

year

Over oneyear but

not morethan five

years

Overfive

years

Noninterestbearing

Total

247,788,253

9,950,337

281257,738,871

247,788,253

1,060,844,285

9,950,337

2811,318,583,156

(107,213) (1,004,870,527)(1,227,350) (1,227,350)(1,334,563) (1,006,097,877)

(253,784,995)(58,700,284)

(312,485,279)

(253,784,995)(58,700,284)

(312,485,279)

(56,080,971)

56,080,971 56,080,971 56,080,971

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CDB (U.K.) LIMITED

Notes to the financial statements continued

21 Maturity profile

Not morethan three

Demand months

Financial Assets

Investment in preference shares ofsubsidianesOther assetsTotal assets - -

Financial Liabilities

Loans and borrowings

Other liabilities - -Total liabilities

31 December 2009

Over threemonths but

not morethan one

year

Over oneyear but

not morethan five

years

Overfive

years

Total

- - 1,357,592,623527,335,742

1,357,592,623527,335,742

- - 1,884,928,365 1,884,928,365

256,165

- 1,360,455,221 1,360,455,221256,165

256,165 - 1,360,455,221 1,360,711,386

The above table breaks down the Comp any's financial assets and liabilities by remaining contractual matunty The matunty profile for those assets and liabilities defined as 'financial'has been determined in accordance with groupings that are considered most appropnate for those particular assets and liabilitiesUndated loans and borrowings and investments in subsidianes have been included in amounts matunng over 5 years

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CDB (U LIMITED

Notes to the financial statements continued

21 Maturity profile (continued) 30 September 2008

Demand

Not morethan three

months

Financial Assets

Investment in preference shares ofsubsidianesOther assets

Total assets

Financial Liabilities

Loans and borrowings

Other liabilities

Total liabilities

Over threemonths but

not morethan one

year

565,224

Over oneyear but

not morethan five

years

661,990

Overfive

years

1,060,844,285

9,950,337

1,004,870,527

Total

1,060,844,285

9,950,3371,070,794,622 1,070,794,622

1,004,870,527

1,227,214565,224 661,990 1,004,870,527 1,006,097,741

The above table breaks dow n the Company's financial asse ts and liabilities by remaining contractual ma tunty The matunty profile for those assets and liabilities defined as financ ial'has been determined in accordance with groupings that are considered most appropnate for those particular assets and liabilitiesUndated loans and borrowings and investments in subsidianes have been included in amounts maturing over 5 years

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