Annual Report 2019

Central Bank of the Republic of Armenia Notes to the 2019 consolidated financial statements 15. Investment securities In thousands of Armenian Drams Financial assets measured at fair value through other comprehensive income in foreign currency Equity investments - unquoted 31 December 2019 31 December 2018 Foreign securities SWIFT Total equity investments Debt instruments 1,937,372 3,211 1,940,583 1,914,789 3,211 1,918,000 Corporate bonds in foreign currency 761,584 1,067,864 Total debt investments 761,584 1,067,864 Total financial assets measured at fair value through other comprehensive income in foreign currency 2,702,167 2,985,864 Financial assets measured at fair value through other comprehensive income in domestic currency Debt instruments Securities of the Government of the Republic of Armenia 13,189,425 13,707,676 Promissory note of the Government (Note 25) 73,810,843 73,810,843 Total debt instruments 87,000,268 87,518,519 Equity investments Other investments Total equity investments Total financial assets measured at fair value through other comprehensive income in domestic currency Total financial assets measured at fair value through other comprehensive income 871,874 762,005 871,874 762,005 87,872,142 88,280,524 90,574,309 91,266,388 Foreign equity securities classified as financial assets measured at fair value through other comprehensive income in foreign currency as at 31 December 2019 represent investment of one of the Group's subsidiaries into the development fund initiated and led by the KfW. The development fund was established with the aim to foster economic development and prosperity in the Southeast Europe region including the Republic of Armenia through the sustainable provision of additional development finance. As at 31 December 2019 debt securities denominated in domestic currency and classified as financial assets measured at fair value through other comprehensive income in domestic currency represent coupon securities issued by the Government of the Republic of Armenia. As at 31 December 2019 debt securities denominated in foreign currency and classified as financial assets measured at fair value through other comprehensive income in foreign currency represent coupon securities issued by one of Armenian banks. Debt investment securities are recorded at fair value determined using a valuation technique, which uses current market rates to discount future cash flows of the financial instruments. As at 31 December 2019 carrying value of a non-interest bearing on-demand promissory note issued by the Government amounts to AMD 73,810,843 thousand (2018: 73,810,843 AMD thousand). The management believes that the carrying amount of the promissory note approximates its fair value. An analysis of changes in the gross carrying values and associated ECLs in relation to debt securities at FVOCI in domestic currency during the year ended 31 December 2019 is as follows: In thousands of Armenian Drams Debt securities at FVOCI in domestic currency - securities of the Stage 1 Total Government of the Republic of Armenia Gross carrying value as at 1 January 2019 New assets originated or purchased Assets repaid At 31 December 2019 13,707,676 742,495 (1,260,746) 13,707,676 742,495 (1,260,746) 13,189,425 13,189,425 28

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