2011 Abraaj Capital Annual Review London

Istanbul

Dubai Mumbai

Singapore Nairobi

Investing Across the world's Abraaj Capital's presence post Aureos acquisition Growth Regional Hubs. A seventh hub will be established in Latin America markets Contents

About Abraaj Capital 2

Our Year Board of Directors' Statement 3 Group Chief Executive Officer's Review 9

Growth Markets Abraaj Capital: A Decade of Investing in MENASA 16 Forging Ahead: Tapping the Markets of Asia and Africa 18 Aureos Capital: A Decade of Investing in Growth Markets 24 Consolidation and Growth: Creating a Global Private Equity Firm 26

The Abraaj Way Asset: Shaping the Stakeholder Model 36 Our People, Our Culture 42

Our Investments Portfolio Management: Engaging for Growth 46 Abraaj Buyout Fund L.P. 49 • Focus on Spinneys 51 Abraaj Real Estate Fund L.P. 53 Abraaj Buyout Fund II L.P. 55 • Focus on Acibadem and IHH Healthcare Berhad 59 Infrastructure & Growth Capital Fund L.P. 61 • Focus on Karachi Electric Supply Company 63 • Focus on Al Borg Laboratories 65 Abraaj Private Equity Fund IV L.P. 67 • Focus on Network International 68 ASAS L.P. 69 Riyada Enterprise Development Growth Capital Fund 71 • Focus on Thimar 77 • Focus on Unimed 78

Thought Leadership From Theory to Reality: Why ESG Matters 80 Redressing the Balance: A New World Order 84

Annex GRI Disclosure and Performance Indicators 89 About Abraaj Capital Our Year

About Abraaj Capital Our Year The Abraaj Capital group is a leading private equity manager investing in growth markets. Since inception in 2002, the group has raised over US$ 7 billion and distributed in excess of US$ 3 billion Board of Directors' Statement to investors. With over US$ 6 billion in assets under management, the group has helped accelerate and facilitate the growth of more than 50 companies in 15 countries in the Middle East, North Africa and South Asia (MENASA) region in sectors as diverse as healthcare, education, energy, aviation and It is easy to forget that just a decade ago, Abraaj Capital had US$ 60 logistics. million under management in one fund. In the intervening 10 years, the Employing over 95 investment professionals, the group is headquartered in Dubai and has a Firm has raised over US$ 7 billion and facilitated the growth of more than presence in Algiers, Amman, Beirut, Cairo, Casablanca, Istanbul, Karachi, London, Mumbai, Ramallah, 50 companies across the MENASA region. Riyadh, Singapore and Tunis. Funds managed by the Abraaj Capital group have holdings in over 35 companies including Air Arabia, the Middle East's leading low cost carrier, Network International, the largest independent payment solutions provider in the Middle East and Africa, IHH Healthcare ollowing the completion of youth unemployment and may average only 6.6 percent on Berhad, one of the largest private healthcare groups in growth markets and Al Borg Laboratories, of the Aureos Capital the disruption of economic average over the next two decades, the Middle East's largest privately owned medical testing laboratory. acquisition in 2012, the activity in the Levant demand a recent report, China 2030: FFirm has approximately attention, though opportunities Building a Modern, Harmonious, In 2011, Abraaj Capital was ranked the largest private equity firm in emerging markets worldwide US$ 7.5 billion in assets under for restructuring abound and a and Creative High-Income Society, by Private Equity International. In addition, Abraaj Capital has won many regional and international management, a presence in over combination of programs to drive by the World Bank and the China awards, including the 'Middle Eastern Private Equity Firm of the Year' for seven consecutive years, 30 countries across fast-growing entrepreneurship and provide State Council indicates that this markets in Asia, Africa, Latin vocational training for employment will still cause it to become a high awarded by Private Equity International. America and the Middle East, and holds real promise. income country before 2030, over 150 investments. and pass the United States in With the completion of the Aureos Capital acquisition in 2012, Abraaj Capital has a presence in more On a global scale, growth markets total economic size, although its than 30 countries across growth markets, over 150 investments managed by a dedicated team of The last three years of this decade will continue to be engines per capita income will, of course, investment professionals and approximately US$ 7.5 billion in assets under management. of growth by Abraaj Capital of financial recovery for the still be a fraction of that of the have been the most challenging foreseeable future, as they were advanced countries. in recent memory. This is true in 2011, when GDP growth was Abraaj Capital Limited, a member of the Abraaj Capital group, is licensed by the Dubai Financial globally, since the collapse of the six percent on average, while Having identified these geo- Services Authority (DFSA). sub-prime market in the United developed countries achieved economic trends several years States in August 2007 burst the only 1.4 percent. Three factors in ago, and in line with its ethos of financial bubble in 2008, triggering particular make a continuation investing in foresight, the Abraaj an economic crisis in 2009, and of this path most probable: far Capital group has expanded leaving us, three years later, with higher population growth rates its presence into other global Investment Track Record unresolved global imbalances and younger populations in growth markets. and deep structural challenges, growth economies, though China Investments Exits* Multiple of Cost** unsustainable public debt and high will soon slow; rapid urbanization In August 2011, Abraaj acquired unemployment in most advanced and continued high GDP growth the US$ 161 million Kantara Fund, * x economies, and stagnant growth opportunities in the transition which invests in small and mid-cap 50 23 2.8 in Europe and Japan, despite a from agrarian to urban industrial companies (SMCs) in Morocco, highly facilitative monetary policy economies; and debt levels of no Algeria, Tunisia and Egypt, Average Realized IRR AUM Capital Returned Cumulative Funds Raised in both Washington and Frankfurt. more than a third, on average, of thereby complementing the those in the developed economies, group's existing Riyada Enterprise % US$ Bln+ US$ Bln+ US$ Bln+ It has also been true in the MENA with very significant foreign Development (RED) platform by 74 6 3 7 region, where uprisings against exchange holdings in China and expanding into the Maghreb. Prior corrupt and autocratic regimes the GCC. to Kantara's integration, RED had in late 2010 and throughout 2011 already made eight investments. Note to readers: Unless otherwise stated, all references to "Abraaj," "Abraaj Capital" or the group in this document should have brought some political While China's growth will slow be interpreted to mean the "Abraaj Capital group." Abraaj Capital Limited (a member of the Abraaj Capital group) is regulated by the Dubai Financial Services Authority (DFSA). All data and content in this Annual Review relates to that of change – though repression in 2012, perhaps to about 8 the Abraaj Capital group as of 2011, unless stated otherwise. continues in Syria – but mostly percent, due to lower demand in no economic relief. High levels the developed economies, and *Includes those undertaken by senior management within Abraaj Capital's predecessor entity, Cupola. This also includes the Acibadem partial exit. **Fully realized exits only.

2 3 Our Year Our Year

In 2012, Abraaj announced and Abraaj Capital and six partner The systemic crisis through which subsequently completed the companies which the Firm has we have just passed highlighted Bin Qasim Power Station 2 Karachi Electric Supply Company acquisition of Aureos Capital, a reported on in this Annual Review. the need for companies to private equity fund management ESG principles and values will be demonstrate responsible corporate group focused on investment in further embedded in all operations citizenship in the environments in small and mid-cap companies in 2012. which they invest. The demands for across Asia, Africa and Latin human dignity, political voice and America. These acquisitions, Further steps to strengthen the economic opportunity that echoed following the decision early in compliance and risk management across Tahrir Square last year, 2011 to establish a presence in functions are underway in the differ little from the frustrations Singapore and Mumbai, have aftermath of the new acquisitions. expressed by demonstrators in given Abraaj Capital exceptional Integrated systems across 1,000 cities around the world on coverage across new growth the group, backed with deep October 15, 2011 under the banner markets and created opportunities knowledge of local circumstances of United for Global Change, to for expansion and consolidation. and the requirements of regional denounce 'an intolerable situation' regulators, will ensure that the in which the gains and the wealth Meanwhile, Abraaj Capital has group's wider exposure across that flowed from speculation were continued to develop its position growth markets does not concentrated in the hands of the in the MENA region, not least by increase its risk profile. The risk few, while the losses that incurred establishing a US$ 500 million management teams of Abraaj when the banks collapsed, were investment vehicle in the Kingdom Capital and Aureos Capital have laid on all citizens. The protestors of Saudi Arabia (KSA) focused already engaged in the first phase were denouncing the rigidity and on private equity, small and mid- of this process. inequity of the systems to which cap companies, real estate and ordinary people felt subjected. public equities. Abraaj Capital has long believed in the need to invest in and engage Present levels of unemployment, Significant returns were created for with the communities in which it both in the MENASA, other Abraaj's investors in challenging does business, on several levels. growth markets and the advanced circumstances over the past year. This ethos informs all aspects economies, will pose serious social A notable event was the sale of of the Abraaj Sustainability and political risks unless means are Abraaj Capital's stake in Acibadem, and Stakeholder Engagement found to resolve them. The Abraaj a Turkish private healthcare Track (ASSET). Recognizing Capital group has warned of these provider, to IHH Healthcare Berhad, that the companies in which risks in its previous Annual Reviews, a Malaysia-based integrated Abraaj has invested, affect the at its Investor Conferences, and healthcare service provider with lives of millions of people, the in many presentations around assets in East Asia, India and group undertakes and supports the world. It has also chosen to Turkey, and interests in Abu Dhabi programs of many different sorts, act, individually, and wherever and Central and Eastern Europe. to promote sustainable change in possible, with others, to address Abraaj Capital is now a shareholder the communities around it. some of these challenges, and will in IHH Healthcare Berhad, giving do so on a still larger scale in the the group a significant presence in In addition to highlighting the years ahead. South East and East Asia and the evolution of Abraaj Capital from ability to capitalize on increasing being a MENASA focused Firm to economic ties between MENASA one operating across global growth and these regions. markets in the private equity and small and mid-cap investing The group has continued to invest space, this Annual Review marks in improving the quality of its the transition to a new Board of governance. Meaningful progress Directors. Throughout the first was made in strengthening the decade of Abraaj's evolution, risk management function with the the Board provided invaluable assistance of the Board Committee guidance and support. A new on Compliance and Risk, and Board has now been elected reporting on environmental, that more accurately reflects the social and governance (ESG) geographic footprint of Abraaj performance has commenced. and its growth aspirations in the A robust ESG program has been coming years. developed and implemented in

4 5 Our Partners

From L to R: Purshotam Ramchandani, Abdullah Shahin, Frederic Sicre, Mohamed Semary, Matteo Stefanel, Omar Syed, From L to R: Mustafa Abdel-Wadood (Chief Executive Officer, Abraaj Capital Ltd.), Ahmed Badreldin, Mounir Husseini, Selcuk Yorgancioglu, Arif Naqvi (Founder and Group Chief Executive) Waqar Siddique, Hossam Radwan, Wahid Hamid, Omar Lodhi, Narayanan Rajagopalan, Ashish Dave, Tom Speechley

6 7 Our Year

2011 was another momentous year in the evolution of Abraaj Capital. Group It was around this time ten years ago that we laid the seeds for the establishment of the Firm when we consummated the first investment Chief for our inaugural private equity fund. Over the ensuing decade, we have been pioneers in the private equity landscape in many of our target Executive markets, have achieved industry leading returns for our investors, and have increased our assets under management 100-fold – from about US$ Officer's 60 million in 2002 to over US$ 6 billion in 2011.

Review t the end of 2011, Abraaj During 2011, we opened another structural challenges facing Capital was one of the chapter in our expansion and for the global economy created leading growth markets us, the lodestar in this journey was unprecedented uncertainty among Afocused private equity our intent to participate in the governments and their citizens in firms with a presence in 14 countries enormous growth opportunities 2011 as the aftershocks of the great and targeting investments in many that exist in the markets of East recession continued to reverberate of the fastest growing economies Asia and Sub-Saharan Africa. around the world. As I mentioned in the world. Accordingly, and as mentioned in my letter last year, there are in our last Annual Review, no short-term solutions to the Our expansion strategy was we established a presence in macroeconomic problems facing dramatically accelerated in 2012 Singapore and Mumbai in early us today – and these problems through the acquisition of Aureos 2011 and seeded it with senior have been exacerbated, in my Capital, a leading private equity members of our Firm. opinion, by a crisis of leadership. fund management group focusing on small and mid-cap companies in This has not been an easy journey We are in the early stages of a Asia, Africa and Latin America. As by any measure – and it has deleveraging cycle within the a result of this acquisition, we now come during some of the most developed and highly leveraged have an operational and physical challenging economic times in economies. The US has seen an presence in over 30 countries living memory and during an age ostensible and notable reduction across Asia, Africa, Latin America of unprecedented socio-economic in levels of debt within the private and the Middle East, providing us and political change. Having sector (financial institution with unparalleled access to some practiced our trade in difficult leverage as % of GDP is back to of the most exciting investment markets at very challenging times, 2000 levels; the housing sector opportunities in 20 of the 25 we have emerged a stronger has deleveraged by 15% in relation fastest growing countries across Firm – proud of our heritage to disposable income; and a the globe. and achievements. That said, large part of the deleveraging our philosophy is not to rest on has come through defaults on As we mark a decade of our our laurels. It is one of humility, mortgages) more than many operations, we see this milestone absolute integrity, hard work, other developed countries. These not as a destination but as another intelligence and of relentlessly variables, combined with positive important marker in our journey. seeking opportunity and growth. Our progress would not have been possible without the support Unfortunately, but unsurprisingly, of our stakeholders – and we see the macroeconomic environment this moment of reflection as an prevailing in most developed opportunity to thank them for markets continues to remain their contribution to our success. challenging and exigent. Deep

8 9 Our Year Our Year

data on unemployment reduction No one can predict with true of this middle class is expected to Abraaj Capital is no stranger to in its reach, with approximately Tunisia and Egypt, particularly in the US, have led many market certainty what the world will look create a shift in the concentration this setting. We have dedicated US$ 7.5 billion in assets under those that have benefited from participants to replace the dirty like a decade or two from now, of global wealth. In 2000, 80% of the past 10 years to leading our management, and more than 150 first-mover advantage, and that "r" word (recession) with the more but what is certain is that growth the world's income went to 20% unique brand of private equity investments with a local presence will be primary targets for regional comforting "r" word (recovery). markets are going to outpace the of the world's population living in in the Middle East, North Africa, in over 30 countries. or international consolidation. developed economies for some the OECD countries. It is estimated Turkey and South Asia. The lessons But in my opinion, the still highly time to come. Recognizing and that by 2050 the OECD will learned and experience gained Aureos will remain true to its It is a strategy that complements leveraged 'developed economies' capitalizing on this opportunity will represent just 35% of the world's from 10 years of working in these roots and will continue to invest our existing SMC investment are still not out of the woods. require a shift in mindset and the income. All of this will result in a markets emboldens us for the in high growth small and mid- strategy and the RED platform. Overall debt levels remain at adoption of a pragmatic approach substantial increase in demand opportunities ahead. cap businesses complementing Prior to acquiring Kantara, RED unsustainable levels and it may be when working in new markets and for goods and services across a our own SMC investing platform, had offices and teams on the too early to rejoice in the signs of new cultures. We believe we have broad spectrum of sectors and will Accelerating our Riyada Enterprise Development ground across MENA, but was recovery. The Eurozone continues people throughout our business spur innovative solutions – be it in growth strategy (RED). The expanded platform not present in the Maghreb. The to be in a state of flux as policy who understand these dynamics, business models or technology - to will retain its structure and team combined RED and Kantara makers try and make decisions and who are excited about the meet this growing demand. We realized many years ago that within the Abraaj group under platform gives us a geographical at a supra-national level while wealth of opportunity ahead. we needed to be rooted in the the Aureos brand and all Aureos footprint right across the region, trying to balance the priorities and While the developed economies knowledge flow of the countries Funds will continue according including in Jordan, Palestine, objectives of the Eurozone with Investing in growth stagnate, the resilience of these in which we invest. Being part of to their existing fund mandates and Lebanon, Morocco, Algeria those of the member countries. The markets growth markets has been the local terrain is vital and private investment guidelines. Needless and Tunisia. Eurozone crisis, austerity measures demonstrated by their superior equity remains for us a very local to say, we are very excited about and soaring unemployment In 1987 growth markets made up performance over the past 12 game. As I mentioned earlier, to the opportunities for growth and created a combustible atmosphere 16% of global GDP. Today, they months, and is further evidence of support this goal and to help drive consolidation that this acquisition on the streets of Athens, Madrid account for over 30% of global a 'multi-speed' growth model that our expansion into new markets provides. and London, prompting fears of a GDP, a doubling of economic has become accepted thinking. – namely Asia – we established a crisis of democracy, as the struggle significance in under a quarter presence in Singapore and Mumbai. While the Aureos acquisition for economic and inclusive of a century. The Economist I'm cautious of merely accepting Our goal of expanding into new represented a critical milestone for growth stretched the social fabric Intelligence Unit forecasts that this as status quo – after all one markets was accelerated through the Firm in accelerating its growth The Aureos of nations. by 2015, 41% of the world's can't be an island of excellence the acquisition of Aureos Capital, journey, we saw other landmark GDP will come from countries in an ocean of turbulence – but I a leading SMC (high growth small achievements that deepened our acquisition Disenchantment was not restricted that are currently defined as am convinced this trend is here and mid-cap investments) focused footprint in key markets. Although to the West. The implications of the emerging markets. to stay. Furthermore, not all of private equity fund management no one can predict where and has created "revolution" that so momentously these markets are on the radar group in 2012. when the drive for political reform the world's found its voice in 2010 in the Arab These emerging markets, or of investors or fit neatly into will end in the Middle East and world continued to resound as 'growth markets' as we call them acronyms or groupings. The Aureos brings outstanding local North Africa, we believe that largest growth governments in Tunisia, Egypt and are expected to generate close markets of the Middle East, North insight and on-the-ground expertise if the transitions are dealt with Libya transitioned to new regimes. to two-thirds of global economic Africa, Turkey, South East Asia and that has enabled its senior positively over the next 12 to 18 markets growth in the next five years on the Sub-Saharan Africa are going to management to complete some months the medium to long-term These are extraordinary times, back of favorable demographics be just as relevant to shaping our 250 deals over the past two future is bright for markets within focused where the interconnections and increasing wealth. Growth world as those of the BRICS. decades in Latin America, South the Maghreb and the GCC. As between the economic, political markets are expected to reap the East Asia and Sub-Saharan Africa. the region evolves politically, we private equity and social spheres have never benefits of a demographic dividend believe these economies will be group been so complex, where the as the middle class in these We are similar firms, with similar well positioned to fully embrace world's economic power base markets expands from around thinking and similar people doing their potential. is rebalancing, and where 400 million in 2005 to 1.2 billion similar things – but in different the function of societies and people by 2030. The emergence markets. The acquisition is a To partake of these opportunities businesses is being redefined in natural evolution of our story over the long-term, Abraaj front of our eyes. and has enabled us to propel our acquired in August 2011 the US$ strategy by creating the world's 161 million Kantara Fund. Kantara's largest growth markets focused core mandate is to invest growth private equity group, unrivalled capital into small and mid-cap companies in Morocco, Algeria,

10 11 Our Year Our Year

Our confidence in the GCC As pioneers of the alternative asset Global Reporting Initiative (GRI) hospitals and 750 to 1,850 beds 2011 also saw us exit our stake These investments will be made economies was underlined by management space, we see it as guidelines, we have self-declared in just four years. EBITDA more in BMA Capital Management, through our fourth buyout fund, our plans to establish a US$ our responsibility to demonstrate this report as GRI Level B+ after than tripled and 5,000 new jobs one of the leading financial Abraaj Private Equity Fund 500 million investment entity leadership in governance within transparently reporting on over were created. This operational services companies in Pakistan, IV, which made its inaugural dedicated exclusively to investing our region. A number of initiatives 50 performance indicators. The strength demonstrates the power to a strategic investor for a share transaction during the past year, in the Kingdom of Saudi Arabia over the past year, including the report has been subjected to of good businesses to grow consideration and cash. the acquisition of a 49 percent (KSA) focused on a variety of strengthening of our investor a third party limited assurance however difficult the international stake in Network International, asset classes, including private relations team, the establishment by KPMG and application grade economic backdrop might be. The We made significant efforts to the leading independent payment equity, SMCs, real estate and of dedicated fund managers check by GRI in order to achieve value delivered to our shareholders build new relationships with new solutions provider in MENA. public equities. and fund-specific investment the independent rating of B+. For validates the confidence they partners in 2011 and we are now committees, have refined and more information on the KPMG have placed in us and underpins seeing that hard work coming Several other deals in a range of We have made significant progress underlined our commitment assurance, please refer to page 111. our strategy of investing in to fruition. Most recently, we sectors in the exciting and growing in the creation of this entity. We to transparency. For more information on the GRI high growth regions and high announced a US$ 125 million markets of Turkey, South East Asia, have completed the legal process verification statement, please refer impact sectors. investment in Saham Finances, a India and Africa are in the Fund's to establish the company and it is As we recalibrate ourselves to page 113. Morocco-based insurance holding pipeline and we look forward to now fully operational. By mid-2012, for the future, reporting on With the conclusion of this company that has operations making further announcements we expect it to be running at 100 our environmental, social and While working for the benefit transaction, Abraaj Capital has across 10 countries in Africa, in the coming months. This percent capacity. governance (ESG) performance of all our stakeholders, we become a shareholder in IHH where insurance penetration year we will also continue our is imperative. 2011 saw the continue to strive for and to Healthcare Berhad, which has rates are extremely low. Saham commitment to reward investors In May 2011 we appointed a development of a robust ESG generate significant returns for assets in Malaysia, Singapore, Finances currently operates across for their faith in Abraaj Capital's highly experienced CEO to program implemented throughout our investors. Among the most India, Turkey and an operating Francophone West Africa under experience and expertise, as we the Saudi-focused investment our Firm and extended to six of notable exit from a number of presence in China, Brunei, Abu three subsidiaries – CNIA Saada, seek to consummate a number of platform. We firmly believe that our partner companies. We will investments in 2011 was the sale of Dhabi and Central and Eastern Colina and Isaaf. interesting exit opportunities in Abraaj Capital's Saudi operations continue to drive ESG principles our stake in Acibadem, the Turkish Europe. The partnership with IHH 2012. Based on the overall positive will capitalize on the favorable and values forward in 2012 and private healthcare provider, to IHH Healthcare Berhad significantly We are also in exclusive talks to performance of our partner macroeconomic landscape and indeed, the publication of our first Healthcare Berhad, a Malaysia- expands Abraaj Capital's footprint acquire Viking – a fully integrated companies over the past year solid investment opportunities integrated sustainability report for based provider of integrated into East Asia and is the first oilfield services company that which saw EBITDA growth of 23% that exist in the Kingdom, 2010 is proof of our commitment healthcare services. fruit of our strategy to capitalize operates in Turkey, Bulgaria across 30 companies, we believe and of which we have been an to embed sustainability principles on increasing trade, investment and Romania. We are excited we have some very attractive early proponent. The first-mover into the core of our business and Under the stewardship of Abraaj flows and economic ties between by Viking's plans to expand prospects to offer potential buyers. advantages inherent in setting up report transparently on them. Capital, Acibadem grew to become MENASA and East Asia. into geographically strategic, an extensive presence within the I am pleased to report that we one of Turkey's largest private underserviced growth markets We appreciate that our model of Kingdom's investment landscape have followed the same principle healthcare groups. Operationally, Other notable transactions this and look forward to facilitating this partnership and of value creation can be seen in the phenomenal this year and in line with the its presence grew from 6 to 14 year include the conversion expansion. sets us apart and is the philosophy response we have received from of our equity stake in Global that will sustain us during the our investors. Education Management Systems We further announced a strategic next stage of our journey. We (GEMS), a UAE-based provider of investment in Kuwait Energy understand the importance of Our Saudi entity is also breaking new EBITDA growth in 2011 private education in the MENASA Company, one of the fastest local presence more than most and ground in the area of governance. region, into an exchangeable growing independent upstream our bigger, more diverse family, Its unique corporate structure – in loan instrument. The transaction oil and gas exploration and now based around six global which all shareholders will be Saudi has led the way for the Varkey production companies in the hubs in Dubai, Istanbul, London, nationals, will be represented on family, the founder of GEMS, to Middle East. Our investment will Mumbai, Nairobi, Singapore and a the Board and will be involved merge their regional MENASA enable Kuwait Energy's ongoing seventh to be established in Latin in all key strategic decisions of and international education growth and development plans America, excites us. It is a family the Firm – opens a new chapter businesses to create an integrated and facilitate its emergence as a bound by a culture that rewards in the evolution of governance global education platform while regional independent exploration success, which values hard work, frameworks in the private % allowing us to participate in and production (E&P) pioneer with integrity, entrepreneurialism and equity industry. the GEMS growth story with world-class expertise. the pursuit of excellence with across 30 partner downside protection. a passion. 23companies

12 13 Our Year

Growth Markets New thinking new jobs will need to be created Entrepreneurship leaves the world for today's jobless and there will a better place; it spurs thinking, From day one we have sought be 400 million new entrants to creativity and employment. We to redefine the role of private the workforce. Even then, the passionately believe in the value equity in growth markets. That International Labor Organization of entrepreneurship and indeed meant fundamentally altering estimates some 900 million Abraaj Capital's investment in the manner in which we look at workers will be living with their SMCs over the past decade businesses. For so many years families below the poverty line. For demonstrates our belief in the there was a blinkered obsession those above it, the days of debt opportunities this space provides, with shareholder value creation: and consumption will be replaced the power of enterprise to foster those traditional models and by prudency and pragmatism. innovation, and the ability to thinking are no longer applicable. create meaningful employment The corporate world must adopt This is why we believe in engaging opportunities in growth markets. a multi-stakeholder mentality communities on multiple levels. Our in order to achieve sustainable community development activities The past 12 months have given long-term growth. Klaus Schwab, have always been about more Abraaj a new vantage point from Founder and Executive Chairman than just philanthropy. Thinking which to look at opportunities of the World Economic Forum, in this way has now become within growth markets. The recognized as much in Davos: "We second nature to our people. This integration and interplay between have to make capitalism and the mindset has been institutionalized those markets gives us great free market much more responsive in our business through the Abraaj optimism and excitement for the to social needs. If business is not Sustainability and Stakeholder next ten-year stage of our journey. serving society, then business is Engagement Track (ASSET) not sustainable." program. It means viewing a It is a journey that would not have business through its spheres of been possible without the support While there is consensus on the influence, recognizing that millions of all our partners and stakeholders. systemic issues that brought of individuals are touched by We are grateful to all – our developed economies to the brink, Abraaj-invested companies and investors, our partner companies, there is a devastating paralysis that "shared value" goes beyond our advisers, our colleagues, our on how to deal with them. just maximizing earnings. friends and our team – who have Meanwhile, the divisive inequality made the first decade such an gap continues to widen in the This philosophy courses through exciting and fulfilling one. We are developing and developed world. our veins and when applied to proud of what we have achieved This economic disenchantment is our partner companies today can together over the past 10 years, at the core of what is unfolding become the industry standard but we look forward with optimism throughout parts of the Middle tomorrow, so that even after to what we can achieve together in East region. The opportunity to divestment, the beliefs are the decade to come. improve an individual's life and that sustainable and can grow. This is of his or her family is not a path the positive impact business can that everyone can see clearly. The and needs to have on the world demonstrations and occupations around it. seen in London and New York are not too dissimilar from those in Meanwhile a key area of our Tahrir Square in Cairo, targeting a social investing program is system that concentrated wealth closely aligned with our own in the hands of the few, socialized objectives as an organization: the losses and spread them across to promote entrepreneurship. the population.

Over the next decade, 600 million

14 15 Abraaj Capital A decade of investing in menasa EBITDA growth in 30 partner companies 115Employees 135 Employees 23%

Celebration of Assets Under Assets Under Launch of Entrepreneurship Assets Under Management Management Riyada launched Management (US$ million) (US$ billion) Enterprise bringing (US$ billion) 27 Development together a 3 5 (RED) & Employees Funds Funds community of 60 2.1 ASAS 2500+ 6+

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Abraaj Capital Final close of ABOF invests Completes Abraaj Capital Raises the Exits two Abraaj Capital Launches Arif Naqvi is founded by ABOF with in Spinneys, the first ever Limited largest regional investments Holdings Wamda, an named one of Arif Naqvi commitments a leading private equity regulated by private equity at a gross IRR Limited online portal the 100 most of US$ 116 supermarket backed IPO the DFSA fund at US$ 2 of 67% capitalized at to connect influential in Completes first million retailer in the region billion US$ 1.5 billion and empower private equity ever public Abraaj Capital Establishes the entrepreneurs to private Abraaj Real Investment in Holdings Limited Completes Abraaj Capital First private Announces exit transaction Estate Fund Maktoob which capitalized at acquisition Art Prize equity firm in Establishes of Acibadem on NASDAQ closes with becomes the US$ 1 billion of Egyptian the MENA to Abraaj and acquisition commitments of largest portal in Fertilizers endorse UNPRI Academy with of a stake in Raises its first US$ 113.5 million the Arab world Acquires a Company, the Harvard's IHH Healthcare fund (ABOF) 25% stake in largest ever Establishes Dr. Josh Lerner Berhad One of the first EFG-Hermes leveraged US$ 10 million as Dean private equity buyout in the Mustaqbali Acquires 49% firms to create region Foundation Endows LSE stake in Network a public affairs to create an Intenational department MSc program in Finance and RED invests Private Equity in 13 SMCs across 9 ASAS countries and announces first 8 industries investment in The 47th,­ New Acquisition of Cairo US$ 161 million Kantara Fund

Offices Offices Offices Offices 1 2 5 14 16 17 Growth Markets Growth Markets

Forging Ahead Commercial buildings in downtown Nairobi, the most populous city in East Africa Tapping the markets of Asia and Africa

Abraaj has a decade long history of investing in growth markets. It would be fair to say that our 'license to operate' in new growth markets is shaped by the experience we have gained in MENASA, which to a very large extent has influenced the Firm's growth marketsDN A and operating philosophy. Towards the end of 2009, recognizing the similarities amongst, and differences between, markets inMEN ASA and other growth markets, we began to study the prospect of expanding our footprint beyond the MENASA region to cover the markets of East Asia and Sub-Saharan Africa.

tructural changes in a similar expansion strategy into Strong Economic the nature of global Sub-Saharan Africa. Concurrent Fundamentals and Concurrently, under-penetration an improved socio-economic trade and investment with this organic expansion, Growth Trends in core industrial and economic environment. Strong export driven h ave t ra n s fo r m e d we remained open to the right S sectors coupled with deepening revenue earnings have been a growth markets into significant strategic opportunity that We believe that there are distinct capital markets only serves to contributor of growth for a number participants that are now engines would help accelerate the Firm's parallels in the corporate landscape enhance the overall attractiveness of Asian economies (Indonesia 12 of the for the global financial recovery. expansion into new markets. of our legacy markets of MENASA of this region. is the largest producer of crude Today, growth market players world's 30 with those of East Asia and Sub- palm oil globally and the largest are no longer exclusively seeking The opportunity to acquire Saharan Africa. The most striking The economies of East Asia, Sub- exporter of thermal coal) while bilateral agreements with their Aureos Capital (Aureos) emerged fastest growing is the sheer scale and size of Saharan Africa and the Indian Sub-Saharan Africa's abundant developed counterparts, but midyear in 2011. Immediately on opportunity that exists in growth sub-continent have experienced resource base has accounted for a countries are rather are seizing opportunities prospecting their business, the markets today. The premise to sustained and diversified economic sizeable 25% of its growth. within their own contiguous value proposition was evident to pursue investments in these growth over the past decade. 12 in Sub-Saharan trade corridors and forging long- us – the opportunity to acquire markets is underpinned by strong of the world's 30 fastest growing In Asia, a rapidly growing middle term partnerships to enhance and integrate a high quality macro-economic fundamentals, countries are in Sub-Saharan Africa class with high levels of disposable Africa connectivity, facilitate regional management team operating in a rapidly expanding middle and accelerated urbanization and income and an increasing integration and enable the flows the growth markets of not just class, positive demographics, demographic trends will result in propensity to consume goods and of foreign direct investment with Africa and Asia but also Latin economic liberalization and an this region having the third largest services has created a much more their neighbors. America with a culture and ethos increasingly participatory socio- work force globally by 2020 after sustainable and equitable growth that we would be proud to call our political landscape. China and India. environment. According to the As mentioned in our last Annual own. The Aureos acquisition has World Bank, the middle class of Review, early in 2011 the Firm accelerated our growth strategy in In addition to these broader The resilience of these economies South and East Asian economies embarked on an ambitious a dramatic and expedient manner economic factors, the market has been enabled largely by the accounted for 1.4% of the global expansion strategy into the and extended our reach into new for hard and soft infrastructure robust internal demand for goods population and 2.1% of the global new growth markets of Sub- and exciting markets. services are supply constrained and services (more than 2 billion income in 2000. By 2030, the Saharan Africa and East Asia, and amid growing demand and people live in these geographies) World Bank forecasts this same further strengthened its focus While the Aureos acquisition and consumer spending, which present and increased domestic investment. group to account for 8.9% of the on the Indian sub-continent by the synergies it provides Abraaj attractive growth investment Domestic demand in these markets population and 7.7% of global establishing a physical presence will be explored in greater depth opportunities for our Firm. has been propelled by sustainable income – figures that represent in India's financial center, Mumbai. later in this Annual Review, we drivers including rapid urbanization an upward and positive trend in The initial organic rollout into assess the Firm's investment focus and corollary infrastructure spend, middle class growth. East Asia, through our Singapore in Asia and Africa in this section. rising employment, adoption office, was soon to be followed by of market oriented policies and

18 19 Growth Markets Growth Markets

View of the Petronas Towers, Kuala Lumpur

For the Firm's focus markets and indeed embrace, the role of The market opportunity in Sub-Saharan Africa, the past the private sector in stimulating available to investors in growth decade saw sustained macro- growth, aiding job creation and economic improvements that fostering competitiveness. Recent markets today is a dynamic supported progressive policies. policies to encourage private For example, Nigeria, a resource sector growth including the sale one and the ability to secure rich country, was able to eliminate of government assets, creation the overhang of its external of public-private partnerships in proprietary investments is high debt, while other countries saw sectors historically controlled by increased delegation to the private the state and formulation of more sector with attendant institution transparent regulatory frameworks building and diversification of the to attract foreign capital, have economies resulting in reduced only served to enhance investor reliance on donor and multilateral appetite in these markets. funding. In addition, the World A similar pattern is seen in Sub- financial system and markets.W hile Bank's role of eliminating legacy Continents of Saharan Africa where households most Western economies (and external debt built up from the Opportunity spent a combined US$ 550 billion by extension banking systems) 1970s and 1980s through the HIPC in 2008. That number is expected have faced turbulent times during (Heavily Indebted Poor Countries) A recent Economist Intelligence to rise to US$ 900 billion by the last financial crisis, Asian and initiative was instrumental in Unit survey of 158 institutional 2020. The growth largely centers African banks have emerged allowing African debtor countries investors ranging from private around three key regions of relatively unscathed due to their to use their resources for growth banks, wealth managers, hedge a speculative short-term view. investing in growth markets is the East, West and Southern Africa limited exposure to sub-prime initiatives as opposed to being funds and pension funds identified Further, the group opined that predominance of an emergent, (representing up to 70% of the and exotic derivative instruments. trapped in a debt cycle. Africa and Asia as holding the energy and natural resources, young and 'hungry' middle class. continent's GDP) and can be Moreover, since the Asian financial greatest investment potential of agriculture and agribusiness, broadly attributed to the continent's crisis of the 1990s, Asian banks For these and other factors, all growth markets globally. construction and real estate Our investments will be geared rich natural resource wealth, have proactively reduced legacy we believe that the market would offer the best prospects for to resonate with the needs of this commodities boom, mass market bad assets, managed credit risk opportunity available to investors The same group of investors investment returns in Africa over consumer class in sectors that access to financial services, effectively and become better in growth markets today is a indicated that their strategy in the next five years. However, the enable and support domestic affordable telecommunication capitalized, as part of the structural dynamic one. With relatively low Africa, for example, would be one theme that unifies investors economic growth. This is evident services and a partially exploited adjustment programs led by the levels of competition and a niche underpinned by a long-term in Africa and Asia around the in our investment selection in Asia 'green revolution' in the agricultural International Monetary Fund and group of sophisticated investors investing outlook rather than most attractive aspect of where we are focusing on the sector. the World Bank. operating in the market, the ability high growth markets of Indonesia, to secure proprietary investments Malaysia, Thailand, Singapore Complementing these factors is In addition to favorable banking is high. and the Indian sub-continent in the increase of capital flows into policies, sovereign debt levels the healthcare, consumer retail, the continent, largely through new across Asia and Africa have Further, lingering misperceptions industrials, food, agriculture, investments made in extractive become more sustainable driven of the African continent in Our model of active natural resources, education and industries and infrastructure, primarily by prudent fiscal policies. particular, have often masked the tourism sectors. Similarly, in Sub- which in turn have stimulated While the overall public debt strong economic fundamentals, ownership, operational excellence Saharan Africa we believe that employment, increased consumer levels across Asia have declined regional diversity and compelling consumer facing and infrastructure demand and accelerated the only slightly, Asian countries are investment opportunities that can and value creation lends itself well driven industries such as oil and process of urbanization, thereby looking to keep debt at sustainable be harnessed by seasoned private gas services, agro-processing, completing a virtuous cycle levels while growing foreign equity investors such as ourselves. to growth markets steel and cement, healthcare and of opportunity. exchange reserves. Adding impetus to the entry of education demonstrate excellent private investors is the favorable investment potential, can yield Looking inwards, most countries position adopted by governments a high return for investors and across Asia and Africa have in Asia and Africa that recognize, critically, create a long-term continued to strengthen their developmental impact. economies by implementing prudent policies to ensure the long-term sustainability of their

20 21 Growth Markets

PetroTiger, an Aureos partner company, providing oil and gas equipment and services in Latin America

We have deliberately chosen to initially focus on a small number The recent divestment of of countries in both these our shareholding in Acibadem geographies recognizing the scale and heterogeneity of the region. and acquisition of a significant We believe that value is created by committing greater resources to stake in IHH Healthcare Berhad is a smaller number of investments which would allow us to consolidate a classic example of growth our position and subsequently use it as a springboard for investment market synergies into other countries in the region over time. This approach further allows us to deploy significant pools of capital through mid- market transactions that are often the least penetrated segments in Given our established networks in We will continue to pursue each market and consequently MENASA, we will play an active such opportunities within our the ones which afford the role in identifying high impact focus countries as well as in the greatest opportunity. businesses that are looking for emergent trade corridors that regional expansion into East Asia, promote regional and cross border Our journey of investing in growth Sub-Saharan Africa and the Indian transactions and investments. It is markets started a decade ago sub-continent, and vice versa. We our view that such an approach in the MENASA region. Over this will leverage this expansion not can be successful in strengthening time, we were attentive to the only for new investments that intra trade flows between growth strong historical and cultural ties we make but also for our existing market players and ultimately yield that bind the Middle East with partner companies that operate in rich returns for our shareholders Asia and Sub-Saharan Africa and sectors similar to those of interest and stakeholders. found it opportune to capitalize on to us in our new growth markets. the cultural, trade and capital flows between the two regions. Today, Indeed, the recent divestment of as we leverage our expertise by our shareholding in Acibadem and expanding into adjacent high acquisition of a significant stake in growth economies with similar IHH Healthcare Berhad with its pan dynamics to our legacy markets, Asian footprint, is a classic example we recognize the potential this of growth market synergies and creates for both regions. highlights the increasing scope for collaboration among growth market participants.

22 23 Aureos Capital A decade of investing in growth markets 43 158 Employees Employees Aureos employees acquire Africa Health Fund Assets under Legacy Legacy reaches Assets under management portfolio portfolio 26.5% (US$ million) management (US$ million) exits realized exits realized of the company (US$ billion) 106 from the original 122 Employees institutional 57 Investments in + in first close 72 70 115 shareholders growth markets 1.3

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Aureos Capital Launches Raises the Launches 3 Funds: Aureos 100% Africa Aureos Africa Fund is founded as 3 regional first regional • Aureos China and World management Health Fund China Fund closes a joint venture Africa South East Fund Bank launch buyout of invests in recognized fundraising between CDC Funds Asia Fund • Emerge Central initiative to Aureos from Nairobi for active at US$ 381.1 Group plc and America Growth boost SMC CDC, FMO Women's environmental million Norfund Completes Fund sustainability and Norfund Hospital investment first cross • Kula Fund II in growth led by Sev Launches Manages border M&A markets Vettivetpillai Partners with Singapore US$ 250 a legacy acquisition Commonwealth office million portfolio of 139 in Aureos Closes US$ HIV/AIDS Risk Secretariat established India Fund investments portfolio 25 million Management to promote which sets Malaysia Program investment in the tone for Fund launched for Africa current buy East African and build Secures stake partner strategy in Ghanaian companies airport service Aureos Central provider Asia Fund raises US$ 70.4 million at final close Offices Offices Offices 10 23 27 Growth Markets Growth Markets

Consolidation and Growth Creating A GLOBAL PRIVATE EQUITY FIRM

After a decade of successfully investing in the MENASA region, the A near 20 year history of acquisition of Aureos Capital (Aureos) in 2012 marked a new chapter for Abraaj Capital and accelerated our journey of becoming a truly global understanding and investing in growth markets focused private equity firm. small and mid-cap businesses in growth markets provides deep

ureos Capital is a global partner companies, sharing of in the growth markets story and insight into when and where private equity fund best practices across the group have both witnessed economic management group and result in long-term operational and political liberalization, Aureos can deliver the most Ainvesting in high growth synergies. rising consumer demand and valuable support small and mid-cap companies institutional change in the markets (SMCs) across Asia, Africa and It is our view that the combined in which they operate. The Firms Sev Vettivetpillai Latin America. It has an operational business will strongly benefit share a similar philosophy in terms Chief Executive Officer, Aureos Capital presence in over 20 countries, from Aureos' track record of of maintaining a strong local US$ 1.3 billion in funds under managing over 100 partner presence in the countries in which management and has completed companies in highly differentiated they invest and are ably supported over 250 deals in the SMC segment markets as well as from its by a network of local teams and over the past two decades. extensive experience and focus investment professionals whose About Aureos on Environmental, Social and in-depth knowledge stimulates The acquisition of Aureos was a Governance (ESG) best-practices. high quality and proprietary Aureos is a global private equity fund management group with a management team that has a two-decade history pivotal moment for Abraaj as it The latter will be particularly deal flow and drives partner of providing risk capital to high growth small and mid-cap businesses (SMCs) in growth markets. Aureos was consolidated our position in the beneficial to ourSMC platform as a company performance. established in July 2001 as a joint venture between CDC Group plc (CDC) and the Norwegian Investment Fund growth markets of Asia, Sub- whole in further refining our post- for Developing Countries (Norfund) in order to manage an existing US$ 72 million portfolio of 139 investments Saharan Africa and Latin America acquisition governance model. The Aureos acquisition completes originally made by CDC from 1992 onwards in Sub-Saharan Africa, South Asia, Central America and the Pacific across the larger scale buyout In turn, being part of the Abraaj our vision of creating a truly global Islands. Senior Aureos employees had previously managed the portfolio within CDC in what was known as the and SMC investing space. The group will provide Aureos with growth markets private equity firm. 'legacy portfolio'. Aureos has been successful in divesting this portfolio and achieving a multiple of over 1.8 transaction created the single access to dramatically increased Indeed, following this acquisition times cost. In December 2008, Aureos employees, led by Sev Vettivetpillai, Chief Executive Officer of Aureos, largest SMC focused private resources, including our wide we now have a presence in over 30 completed a management buyout of Aureos from its shareholders, CDC, Norfund and FMO. equity firm in growth markets network of stakeholders, thereby countries across virtually all growth with c. US$ 2 billion in funds, enabling it to consolidate its markets, over 150 investments Since 2001, Aureos has raised and managed 17 regional private equity funds totaling US$ 1.3 billion in commitments a presence in over 30 countries predominant position across the overseen by a seasoned team primarily focusing on growth capital opportunities across Asia, Africa and Latin America. These funds are and a current portfolio of 126 high growth markets of Asia, Latin of investment professionals and managed through a network of over 20 offices worldwide by a seasoned team of investment professionals investee companies. America and Africa. approximately US$ 7.5 billion in who combine world-class financial and operational expertise with unrivalled local knowledge and experience. assets under management. Aureos currently has investments in 113 portfolio companies across several industries including financial services, We believe this acquisition This acquisition unites two construction and engineering, manufacturing, FMCG and TMT (Technology, Media and Telecom). provides investors with a unique organizations that share and unmatched opportunity a common philosophy of As evident from its track record, Aureos has been successful in executing its strategy of creating long-term to invest in a growth markets combining investor returns with sustainable value in partner companies while generating superior returns for its investors. Since 2001, it has SMC platform for the first time. an appreciation of the long-term realized US$ 260 million from its investments including 32 full exits and partial exits, achieving a multiple of 2.4 The creation of this integrated social and economic benefits that times cost. platform, which operates under the SMC investing delivers. Abraaj and brand name of Aureos and in line Aureos are leading protagonists with existing fund mandates and governance structures, will enable regional interaction between our

26 27 Growth Markets Growth Markets

Aureos in Asia Aureos Partner Company, Asia

Yupi Indo Jelly Gum, Indonesia

Yupi is the leading South East development programs, structured Asian gummy candy manufacturer. performance targets and incentive Aureos offices in Asia It was founded in the mid 1990s, schemes were established that initially as a joint venture (JV) subsequently resulted in a highly involving a German manufacturer motivated workforce. of gummy. It now produces a wide range of gummy candy under From relying on a single, third the Yupi brand name and private party distributor, Yupi now has a label, for domestic consumption dedicated, countrywide network and export. of 20 plus distributors. Yupi introduced a new product every Since Yohanes Teja took over the two months or so and started 59 investments role of CEO in late 2007, he and his adding higher value products management team have worked to the mix. Targeted marketing closely with Aureos to identify and programs got the product message 9 Realized address a range of opportunities out to millions of consumers. The Funds MoC 2.7x and challenges. The aim has company drove unnecessary costs been to make the leading gummy out of the business by rationalizing confectionery manufacturer in production runs and packaging US$ 245 US$ 485 Indonesia more progressive and and shifting its focus towards its million in total more efficient, equipping it for own brand. million lasting, long-term success. invested commitments This has led to impressive results. According to Yohanes Teja, "Yupi Volume growth has risen by 85 % represents a big opportunity for from 2007 to 2011, while revenues 65,791 partner company employees a strong brand. But it was clear over the same period have risen by to me that there was much that 160%. Further, the more profitable could be improved. Sales volumes own label production for export had been slowly declining for a has risen from 40% of the total to Aureos investment: Yupi Indo number of years and there seemed over 70%. Jelly Gum, Indonesia to be inefficiencies throughout the system." So after such a period of growth Sector Breakdown Investment Breakdown by Country and positive change, what lies Aureos' Senior Partner for South ahead for Yupi and how will Aureos 2007 to 2011 East Asia, Hanjaya Limanto continue to be involved? 2% 2% Industrials 2%2% India concurs: "We saw a quality 4% Volume growth 85% 4% Consumer Staples 3% Thailand product, 10 years of heritage and Yohanes Teja says: "We want IT Indonesia Revenue increase 5% leadership, profitability, world to focus on really developing 160% Healthcare 4% Philippines 20% 24% Own label production Consumer Discretionary China class facilities and independence. our presence in selected export 11% Materials 7% Malaysia But potential for greater things. markets such as the US, Canada, from 40% to +70% Utilities Sri Lanka Perfect for investment." Middle East and ASEAN countries." 7% 18% Financials Kazakhstan 12% Telecom 11% Papua New Guinea Initial analysis established that He added: "We see exciting times Energy 7% Vietnam the main areas for attention ahead. With Aureos at our side, I 9% 11% Brunei included distribution, sales and am confident in a bright future for 13% 13% 9% Bangladesh marketing, human resources and our business, both in Indonesia Others production costs. Training and and the wider world."

28 29 Growth Markets Growth Markets

Aureos in Africa Aureos Partner Company, Africa

Southey Holdings, South Africa

Southey had been in existence for Aureos' Partner for Africa, Aureos offices some 70 years when CEO Barry Ron den Besten, also saw the in Africa Wickins joined them. Originally opportunity for Aureos: "There involved in industrial painting and was a real alignment of interest contracting for mining and heavy here. Southey is a great name, industries, the group diversified with a great reputation, strong over the years through acquisition companies and talented people. and organic growth. There are real growth prospects 54 investments both within South Africa, Africa A dozen companies now form and internationally. Aureos can part of the Southey group, help realize this potential." 5 US$ 627 million in in areas including ship repair, blast cleaning, refrigeration and Aureos infrastructure and contacts Funds total commitments contract services for a range of are opening up opportunities industry sectors. Although based in other parts of the world for invested in South Africa, Southey now Southey, including forging links in US$ 354 million also operates from permanent the shipping industry in South East bases throughout Africa and Asia. Increased rigor and structure 28,094 partner the Middle East, servicing an are also being brought to areas international marketplace. such as corporate governance, company employees acquisitions and finance. "With so much history behind Realized us and such a range of strong, Progress in the company's Aureos investment: Southey decentralized businesses operating health, safety and environmental Holdings, South Africa MoC 2.2x under the group, you could argue commitment has also been that we haven't got much to learn. impressive. A full time HS&E What could be the benefit of manager reports to the CEO bringing in an outside party? Well and full auditing and training for me the answer to that is clear. is carried out across the group 2009 to 2011 We needed a partner who could to ensure it meets and exceeds help us develop more strategically, international standards. Revenue growth 12% with more rigor and help us to Increase in net assets Sector Breakdown Investment Breakdown by Country realize international opportunities," Wickins concluded, "Aureos is 58% said Wickins. helping us plan ahead, put 1% structures in place that are fit for 3% 1% 1% 1% Financials 2% South Africa With its international office purpose and providing access to 5% Industrials 3% Nigeria network and local capability, business and financing in other Materials Kenya 7% 5% particularly in Africa, Aureos Africa markets that we otherwise would Consumer Staples Ghana 24% Fund seemed a good fit and in July not have had. That gives me real 29% IT Senegal 8% Energy Zambia 2009, Aureos took a shareholding confidence for the future - a future Healthcare 18% Tanzania of just under 50% in Southey, with where we will have to balance our Consumer Discretionary Angola two seats on the board. growth with my desire to ensure 13% Telecom Uganda we remain true to our values, ideals 24% 18% Madagascar and philosophy." 16% 21%

30 31 Growth Markets Growth Markets

Aureos in Latin America Aureos Partner Company, Latin America

Iasacorp, Peru

investments 26 A long established, successful family business, Peruvian 3 US$ 241 million in retailer, Iasacorp International S.A. had reached a point a few Funds total commitments years ago that will be familiar to Aureos offices in small and mid-cap companies Latin America invested across the world. How to deal US$ 158 million with succession planning, while securing the future success of the business? 6,852 partner company The Right Partner employees With then-CEO, Alfredo Benavides, due to hand over the reins of Iasacorp to his children, it had Aureos investment: Iasacorp, Peru Realized become clear that, for the business to move to the next level, it needed MoC 1.4x and resources to allow it to expand. managing top level international an injection of both rigor and licenses such as Disney and Mattel. finance. The search was on for a "Although we looked at banks And most important of all, it partner – and this was eventually and other private equity firms, has great people. All the found in the shape of Aureos in it was clear that they could not ingredients for a fruitful partner 2009. Following a US$ 4 million provide what we wanted in terms company investment." investment in July 2009 from the of a fit with our principles and way Aureos Latin American Fund, the of doing business," says David Dialogue between the two was fundamentals for transformation Benavides. quickly concluded and Aureos have been put in place. made an initial US$ 4 million "On the other hand, Aureos investment in July 2009 followed Iasacorp Group had an almost showed real interest in the long- by a further US$ 1 million in mid 10 year pedigree in the retail term health of the business and the 2010, representing a total stake of business and had become one of communities we serve. It became 27%. The Board was restructured the leading retailers of women's clear very early on in the process to comprise the original Sector Breakdown Investment Breakdown by Country accessories in Peru. A network that for them it was not just about Iasacorp director team, two of over 100 points-of-sale (POS) making money – they had a real Aureos directors and two had been established throughout 3% 1% vision for Iasacorp and what we independent advisors. Consumer Discretionary Mexico the country and into neighboring could be and wanted to be a part 6% IT 4% Colombia Chile and strong relationships built 6% Financials Costa Rica of that," added Benavides. Despite the relatively recent nature up with staff and all parts of the Energy 8% El Salvador of the deal, significant positive supply chain. Industrials 33% Peru Aureos' Partner for Peru, Héctor changes have already been made. 12% 38% Consumer Staples Guatemala Martínez, shared the same view: Corporate governance has been 14% So David Benavides, CEO, was Panama "I had my eye on Iasacorp for a strengthened, reporting systems Belize particularly keen that any external long time. It is a business that improved and an innovative support brought in had a natural has been built from scratch and sustainability program put in place. 18% fit with the company's ethics and shows impressive growth and 20% 17% 20% values, would help preserve what returns. It has great value built into "Things have moved pretty fast had been so carefully built up, but it by owning its own brands and and we're already seeing positive would also provide the knowledge

32 33 Growth Markets

THE ABRAAJ WAY effects," says David Benavides. Where next for "This really is a case of a minority Iasacorp? investment working out well. The Aureos team have brought David Benavides concludes: "First real professionalism to our and foremost we need to continue company, introducing practices consolidating our position in which, as a typical family firm, our three core markets. We have we were not so strong at. So exciting partnership plans with we now have more structured Walmart's Supermercados Lider processes and information brand in Chile, which could lead to management, including a financial 100 new outlets for our products. reporting system that allows We are opening more stores in real-time analysis of the business Colombia and we are looking and subsequent immediate to broaden our geographical intervention. All of this adds a presence by expanding into a new professional edge to our business large market." that is noticed and appreciated by investors and partners." "Finally, but importantly, we are also developing our presence in As a consumer-facing business other Latin American countries with a large retail footprint, such as Ecuador and Venezuela Iasacorp is very aware of its through franchising agreements. societal responsibilities. The business environment is always dynamic, always changing, It has strengthened its work in but we are in a good position to be this area, running a number of able to adapt and target the best pioneering programs aimed at opportunities for us." minimizing waste and resources. These include shopper-targeted initiatives (including the launch of 100% biodegradable and 2008 to 2011 reusable bags) and operational measures including company- CAGR revenue growth 26% wide ink cartridge recycling, waste recycling and employee CAGR EBITDA growth 41% training programs. CAGR POS growth 29%

"This is a further element of improving our governance. Iasacorp is committed to taking care of the environment around us and making sure our business minimizes its footprint. It is a fundamental part of our strategy and we have instigated these measures to deliver against this commitment. This is quite unusual for small and medium sized companies in Latin America," comments David Benavides.

34 35 The Abraaj Way The Abraaj Way

Abraaj Sustainability and Stakeholder Engagement Track (ASSET) Shaping the Stakeholder Model

2011 saw the global private equity industry firmly wake up to the new we submitted an integrated THE TRACKS OF ASSET IN 2011 sustainability report for which we expectations of stakeholders on private sector institutions. Environmental, were awarded a B+ rating from ESG: Promoting5 and implementing ESG principles throughout our Social and Governance (ESG) principles are now unavoidable for any the Global Reporting Initiative business activities and key relationships (GRI). We have continued with private equity investor that aims to remain relevant in the 21st century. our commitment to sustainability Strategic Engagement Platforms: Engaging and communicating with Enlightened GPs are finally acknowledging that it's time for them to reporting and this Annual Review stakeholders concerned with long-term value creation in the global contains a dedicated section that growth markets in which we operate. In 2011, our colleagues took part in "catch up" in areas such as meeting social responsibilities and improving reports and documents progress more than 78 speaking engagements and participated in more than 100 stakeholder engagement. on our ESG initiatives. industry related events

In the context of the private equity Social Investing: Two distinct channels: Abraaj Community Partner industry we know ASSET to be Organizations (ACPO) and our Community Impact Program (CIP). During unique. It goes to the heart of our t Abraaj Capital, our our Firm's culture and one which paid for by Abraaj Capital) and 5% 2011, 86 volunteers from Abraaj dedicated 2,464 hours - equivalent to 317 original ambitions – when the Firm days - to our community organizations stakeholder approach the ASSET team is responsible for of the annual bonus we encourage was launched a decade ago – to to doing business lies at driving through the ranks of our each employee to donate. During be different and to create our own the core of our values. employees and partner companies. the course of 2011, we evolved Thought Leadership and Communications: Upholding standards A path for the development of what of thought leadership as it shapes our industry and our region and Since inception in 2002, we have We believe it is incumbent upon our initiatives along 5 tracks will become a global franchise as evolved strong models focused each management team and and achieved marked progress on implementing a best in class integrated communications strategy. During we move into Africa, Latin America 2011, we organized various events to present perspectives on the future to on youth education, community each staff member to seize the each front. and the greater part of Asia. upliftment projects, employment opportunity which the ASSET our investors, colleagues and associates. Our engagement with the media generation programs and nurturing vision presents to us as a group In particular, ASSET was the continued with more than 90 in depth interviews conducted with national, Over the next decade we anticipate regional and international media entrepreneurship. We have built and as individuals to make a enabler for ESG employee training numerous firms will develop their our business with the conviction positive difference to the world in conducted for over 40 colleagues approaches to social programming that financial value creation is which we live. and led the development of social Partner Company Engagement: Engaging companies we invest in to and strategic philanthropy. Those embed the ASSET thinking and approach. In 2011, we supported a number primary and can be achieved and environmental assessments that will succeed are firms that will whilst creating sustainable and Over the year in review, ASSET for 6 of our partner companies. of our partner companies around implementing ESG programs alongside not consider such activities solely conceptualizing brand, digital and communication strategies positive change in the economic projects continued to be resourced Equally, ASSET coordinated the for the purpose of public relations. landscape of our markets. through our 5+5+5 model. This implementation of an ESG screen Embedding into their business represents 5 percent of net which has become an integral part models stakeholder engagement The ability of a business to shape management fee revenue that of our SMC investment process programs will increasingly be the ASSET set itself the challenge to the world around it should never helps finance our initiatives, the five and is being applied across the Inspiring Moments norm for any business operating create a sustainable structure to be under-estimated. We have been days per year that each employee board for all new investments. in developed or growth markets. Over the last three years an serve the entire entrepreneurial consistent in this belief since 2002 sets aside for volunteering in the An in-depth analysis of our ESG In private equity, this will become increasing focus of ASSET community in the MENASA region. as it represents an integral part of community (3 days of which are initiatives can be found later in the an industry standard very quickly programs has been related to This led to the development of a Annual Review for ease of reference and more importantly models will nurturing and supporting the multi-million dollar program to and increased transparency. evolve, as indeed will ours, as the entrepreneurial ecosystem in the support innovators and creators world around us changes and as markets in which we are present. in both commercial and social In this vein we spent considerable the future shape of the private This has been a core activity for enterprises. Wamda was launched time and effort reporting our equity industry emerges with Abraaj since its inception 10 years in November 2010, when we ASSET initiatives officially to the greater clarity. ago as it lies at the core of our skill convened the CoE, a Celebration In 2011, Abraaj volunteers United Nations Principles for set. As we invest across global of Entrepreneurship, when close Responsible Investment (UNPRI), growth markets, the challenge of to 3,000 youth and budding dedicated 2,464 hours to our taking pride in being the first generating employment can best entrepreneurs gathered under our private sector company in the community organizations be met through the development auspices to connect, inspire and Arab world to have signed onto of entrepreneurship and as such empower one another. this global best practice initiative. this will remain a key subject for Further, our 2010 Annual Review us and one we feel we have a duty represented the first time that to lead on.

36 37 The Abraaj Way The Abraaj Way

Frederic Sicre, Partner, moderating a session at the Abraaj Investor Forum, 2011 We were delighted that Habib In particular, the KESC case study grown year upon year and we are Haddad, CEO of Wamda was which was developed on separate proud to watch it diversify and see able to join us in Jordan where occasions with Harvard Business our winners attain further success he played an inspiring role as Co- School, London Business School on global platforms. Chair of the Forum and delivered and EMPEA reflected Abraaj's an impassioned message to young pioneering role in implementing ACAP is uniquely positioned entrepreneurs across the region. the ASSET vision within investee in the global art world for a companies through an investment number of reasons. It is the only We continued to strengthen our in social programs, stakeholder art prize specifically created relationship with the Emerging engagement, environmental for the MENASA region and Markets Private Equity Association transformation and the use of rewards proposals rather than (EMPEA), one of the industry's social and digital media. the completed works of art. After seminal groups whose mission being selected by an international is to catalyze private equity and Artists as Cultural selection committee from an open venture capital in global growth Entrepreneurs call, the winning artists go on In the course of 2011, we focused environment might look like in opportunity to reflect on and markets, and worked closely with to develop the works alongside on the development of Wamda 2.0 view of the Eurozone crisis and contribute to the key issues facing them to convene the first 'Capital The Abraaj Capital Art Prize a guest curator. For 2011, the and welcomed an acknowledged the economic uncertainties facing East Asian markets. This had Impact and Private Equity in Africa (ACAP), a core initiative of ASSET, guest curator position was filled digital entrepreneur Habib Haddad the United States. In particular particular resonance for us given Leadership Summit' in London. flourished in 2011. The award, by Sharmini Pereira, Founder of as the first CEO of Wamda. we wanted to examine the the establishment of an Abraaj This was an exciting moment for which was established to empower Raking Leaves, an independent Under his leadership, innovative conventional wisdom related to presence in Asia earlier in the year. the industry at large and African talented artists with the resources not-for-profit art publishing house. programs such as Wamda the unemployment issues of our private equity in particular, given to realize ambitious projects, has Webinars and Wamda Angels have region, test philosophies focused In October 2011, two of our the massive opportunity that exists been developed which invest and on what countries with large Senior Partners participated in within the continent, and where support those just beginning their numbers of young people need the WEF Global Agenda Council Abraaj will be playing a leading entrepreneurial journeys. As part to do, and create a platform for on entrepreneurship and private role as a growth markets investor. of its evolution, Wamda is now dialogue and debate. capital flows held in Abu Dhabi taking a 360-degree approach as part of a collaborative exercise The inspirational and educational to filling the gaps in the regional As a recurring theme of engaging to identify key trends, address role of our thought leadership entrepreneurship ecosystem, with our stakeholders through knowledge gaps and suggest program continued in 2011 and was through three primary platforms, strategic platforms, we continued recommendations to address demonstrated through op-eds on including a revamped media site, to actively participate and specific sector challenges. We the SMC sector published in leading a Wamda Fund investing in early contribute at the World Economic were present at the WEF Jordan newspapers in Pakistan and Saudi stage start-ups in the MENA Forum (WEF) where we are a Summit where we debated Arabia, case studies on the Karachi region and compelling programs Strategic Partner. 2011 commenced solutions to overcome constraints Electric Supply Company (KESC), and products that help firms to set with our annual representation in SMC investing and availed of the Celebration of Entrepreneurship, up and run their business. at Davos where our Founder opportunity to announce the launch Wamda, and essays for the MIT and Group Chief Executive of the Jordan Growth Capital Fund, Journal and Alliance magazine In an exciting and often tumultuous participated in a panel on the Abraaj Capital's US$ 50 million on entrepreneurship and the role year, our Strategic Engagement 'Future of Investing' to address Fund supporting high growth of the private sector in enabling Platforms provided a time for the opportunities and challenges small and mid-cap companies, democratic transitions. introspection and informed for investors in a post-crisis world. in the presence of His Majesty debate. In September 2011, we King Abdullah. hosted in Istanbul a private In June 2011, we engaged with the gathering for our investors and East Asian business and political stakeholders, inviting some of the community at WEF Jakarta 'Flying Carpets', Nadia Kaabi-Linke, ACAP winner 2011 world's foremost thinkers, such as which provided an outstanding Larry Summers, Joseph Stiglitz, Josh Lerner and Niall Ferguson, to stimulate our thinking as we discussed what the future business

38 39 The Abraaj Way The Abraaj Way

It was a defining year for the Art This is precisely why the focus organizations that meet our Social start up, won the Abraaj award and 2011 saw our partnership with has seen 675 children participate Prize. In March 2011 at Art Dubai of the Social Investing Program Investing Program objectives. is currently receiving support from Ruwwad (an organization that in remedial educational sessions we unveiled the artworks from our shifted into areas that are more the Abraaj team in Cairo on every has been doing exemplary with 57% showing remarkable third edition of winners: Hamra aligned with our business, namely Our experience of working with aspect of executing their business work in Amman focused on improvement in their overall Abbas from Pakistan, Jananne entrepreneurship, employment these organizations has been plan. Through Injaz Lebanon, we community upliftment and youth performance and the rest improving Al-Ani from Iraq, Shezad Dawood and income generation. It is only by mutually rewarding. While it would supported programs that reached empowerment) move beyond at least in one subject. Through from India/Pakistan, Nadia Kaabi- focusing our efforts and aligning be impossible to highlight all the 500 students and in Tunisia our Jordan and into Egypt through the the Mustaqbali Foundation and Linke from Tunisia and Timo our financial and human capital initiatives conducted in 2011 under support enabled the re-launch of expansion of Ruwwad into Izzbet the implementation of its different Nasseri from Iran. resources to our business that we our Social Investing Program, we the operations post-revolution Khairallah. This exciting step of programs, 130 job opportunities can achieve optimal impact and illustrate some of the initiatives and enabled 120 students to join taking Ruwwad's unique model were created in Gaza. Our winners have gone on to identify synergies. that took place with our support. Injaz programs. The year ended of community empowerment and achieve further accolades, for with an Abraaj-led initiative volunteerism and implementing it Looking forward example having work bought Our work in the past year 2011 saw our partnership with Injaz that culminated in the launch of in one of Cairo's most marginalized by museum collections such as demonstrates our ongoing Al Arab strengthened through Injaz Pakistan. and underprivileged communities Over the past five years we have MOMA, New York, The Centre commitment to making a supporting and closely working will not only empower young worked hard to embed and Pompidou, Paris and Tate, London. difference in the communities and with the organization in Egypt, Our strategic partnership with people and equip them with the execute the ASSET thinking within 'Flying Carpets' by Kaabi-Linke markets in which we operate. We Tunisia, Lebanon, UAE and Turkey. Endeavor, a global organization tools for a better future but also our Firm, our partner companies and 'Shadow Sites II' by Al- strengthened our partnerships In Egypt, our support enabled 300 that promotes high impact tackle one of today's most pressing and our diverse community of Ani were exhibited in Venice at with the four Abraaj Community students in Masr El Gedida school entrepreneurs in growth markets, issues, which is that of youth stakeholders. We now have a the 54th Biennale as part of the Partner Organizations (ACPOs) to participate in an environmental lies at the core of the Social unemployment in our region. greater and more ambitious Biennale's first ever pan-Arab namely Injaz Al Arab, Ruwwad, program where they were Investing Program's objective of mandate as we collaborate on exhibition 'Future of a Promise' for Endeavor Global and the Welfare taught about sustainability and fostering entrepreneurship. The One of our largest initiatives developing a shared ASSET which Abraaj Capital was the Association. These are trusted encouraged to create products partnership has gone from strength to date, the US$ 10 million approach with Aureos. principal patron. organizations with a proven track out of reused and recycled to strength since we started work Mustaqbali Foundation in Palestine record for efficient engagement materials. Abraaj also participated together in 2010. With our support, was established in 2009 and is We are excited by the truly The exhibition achieved critical and high levels of accountability in the Injaz Young Entrepreneur Endeavor has been able to identify fully funded by Abraaj Capital. ground breaking opportunity this acclaim and was seen as a seminal with whom we have entered into a Competition where university 25 high impact entrepreneurs The 22 year program primarily offers. Aureos has an outstanding moment in the 100 year history of long-term partnership to support students competed for seed- in the MENA region who have focuses on the education of 1741 ESG track record, footprint and the Biennale. Later in the year, the their exemplary work. We continue funding for their business ideas. generated a combined revenue children and youth orphaned platform for future growth and inspiring artwork from ACAP 2010 to be on the lookout for similar RecycloBekia, an e-waste recycling of US$ 80 million and employed as a direct consequence of the we look forward to expanding winner Hala Elkoussy from Egypt, 2,500 people across innovative war in Gaza which occurred the ASSET program into Latin was displayed at London's City businesses that are expected to between December 2008 and America, Africa and Asia, It will Hall as part of Shubbak, the first generate a top line growth of 25% January 2009. Abraaj's partner in be a busy year ahead for ASSET Mustafa Abdel-Wadood, CEO Abraaj Capital Limited, and Linda Rottenberg, this initiative is the Welfare celebration of contemporary Arab CEO Endeavor, at the launch of the Abraaj and Endeavor partnership per year. We were also able to play as we seize the opportunity to culture promoted by the Mayor an active role in the expansion of Association, a reputable, non- venture into new markets and of London. Endeavor offices and its affiliates governmental organization with collaborate with a new community in Egypt through financial proven political neutrality. of stakeholders. We look forward The power of social support, networks and the active to updating you next year on the investing involvement of colleagues who sit Together with the Welfare progress we have made. on the national Endeavor Boards. Association, our Foundation has 2011 was a year of many initiatives Finally, we are immensely proud achieved quite an impact in a that stretched from Morocco of the fact that Abraaj colleagues relatively short time. In addition to in North Africa to Pakistan in continue to play active mentorship its focus on the education and well- South Asia but it was also a year roles for Endeavor entrepreneurs being of children, the Foundation of re-evaluating our strategy across different locations. and assessing the impact and outcome of past initiatives. Impact continues to be of utmost importance in driving our Social Investing Program.

40 41 The Abraaj Way The Abraaj Way

Our People, Our Culture

"At Abraaj, we work hard and we work smart. I love what I do and Members of the Abraaj Real Estate team enjoy every day. My work gives me energy - my brain has been hardwired that way." Waqar Siddique, Managing Partner - Risk and Internal Audit, Abraaj Capital

uch of our efforts In August of last year we made a It is a culture that rewards success, Private equity is a very local game in 2011 have been significant acquisition in the small which values hard work, integrity, and for us to be truly successful, on expanding our and mid-cap sector through the entrepreneurialism and the pursuit it is vital to have people on the Moperations into new US$ 161 million Kantara Fund. The of excellence with a passion. It is a ground who really understand markets. Striking the balance success of this acquisition, with culture that encourages creativity and are connected to the markets between creating these new 11 people from offices in Egypt, and diversity – a culture that makes in which we operate. We are centers and maintaining a cohesive Algeria, Tunisia and Morocco now a commitment to our stakeholders fortunate that we have people culture is a challenge for the fully integrated and enthusiastic and community. throughout the business who year ahead. members of the Abraaj family, embrace different cultures as proved the strength of those This is something of which we are this enables us to build teams It has been said that we started foundations. rightly proud, and it defines who perfectly suited to the challenges life as a small family. It still feels we are as an organization. This of a global firm. like a family today, just a much Private equity is, above all else, a vision has been absolutely core to larger one. We're confident that people business. From our first our business success. It allows us Over the past few years we have the foundations laid in those early day of operations 10 years ago to grow as we have done over the hired many great new people. From years will stand us in good stead as through to today we have worked last 12 months with the conviction interns to senior management, we expand into new markets. hard to develop a culture that that we are creating value not our new people have always added allows people to grow, as just for our investors but for the to, not detracted from, our vision array of courses, from elements of Our summer internship program, professionals and as members of societies in which we work. and conviction. an MBA curriculum for junior and now in its fifth year, underlines the the wider community. mid level staff to more strategic growing strength of our business. Strength in diversity Investing in people and organizational courses for It provides a 10-12 week summer senior professionals. The Academy placement for MBA students from We view diversity as a key factor in It is clear we have much to achieve, draws upon the expertise of the world's top business schools our success. Our teams comprise and we need the very best team in leading business schools such as between their first and second people from many different place to realize our ambitions. We Harvard, INSEAD, London School years. In 2011, we received around Our people represent backgrounds and different are in a position of strength where of Economics and MIT. 229 applications for the program's cultures. As our business extends we can attract the very best. Yet 11 places. its reach across the globe, this we can't become complacent. We also encourage our people to diversity encourages creativity and We operate in a fluid market, and undertake skill-specific training. innovation and provides us with an we must work hard to ensure We have worked with technical enviable talent pool. Our diversity our people are achieving their training providers such as Wall not only comes through in the ambitions with us. Street Prep and Training the Street, nationalities of our people but and developed specific leadership in the industries they represent. Our cornerstone training initiative, skills for individuals where required, Establishing a deep bench is Abraaj Academy, grew in strength to ensure our people achieve their important for the growth of our in 2011. Led by the Academy's full potential. Firm and we have actively sought Dean, Professor Josh Lerner – nationalities out people with rich experience in also Jacob H. Schiff Professor of other industries to private equity, Investment Banking at Harvard such as investment banking, Business School – the Academy 27 management consulting, public provides Abraaj people with an affairs and law.

42 43 Our Region & Us

OUR Investments We believe that given the right environment, people excel. We already have a number of Anas Guennoun, Principal employees who began their relationship with Abraaj during a Anas joined Abraaj as part of the Kantara Fund summer internship program. And acquisition in August 2011. we have watched with pride as others have grown from analysts to "As a new member of the Abraaj team, impressive Partners to serving on the boards is the word I would use to describe the Firm. Yet, of investee companies. located as I am in Casablanca, away from the center, it is the way everything fits together that Our ASSET program places the is truly impressive. creation of sustainable economic value at the heart of everything we The Abraaj Sustainability and Stakeholder do. It is at the core of our identity Engagement Track (ASSET) and the 5+5+5 promise is vital – it reinforces as a business. While this was part the senior management's vision of who we are, their ambition to be of the original vision for the Firm something more than a typical private equity firm. It is inspiring and it back in 2002, the development builds cohesion across the business, which is crucial as we grow our of our activities in this area is offices around the world. testament to the enthusiasm and commitment of our people. I sit on the Board of Education for Employment, an NGO that provides We are all proud to work for an young people with the tools to find new jobs. And we are very proud of organization that sees itself as our recent effort to raise funds to purchase 50 bikes - bikes that allow part of the communities in which students to get to schools that were otherwise too far away. it works. And this strong culture, this sense of our wider role, pays off – it helps us Thinking in this way has now grow our business. On the ground here in Morocco, I work with and meet become second nature. Our entrepreneurs who are eager to partner with Abraaj not only because of people explore beyond the our financial expertise, but because of our culture – they want to be a part limits of private equity to create of what we are building." thought leadership pieces and to work with local and regional NGOs committed to fostering entrepreneurship. In 2011, Abraaj Culture is not a static thing. By staff contributed over 2400 hours exposing ourselves to new business of their time to volunteer. Every practices, to new countries and by person we bring on board embraces attracting the best people, we will this culture. Our colleagues in evolve as an organization. The past Maghreb who became a part 12 months have been a success. of Abraaj in 2011 through the Now we look forward to the next Kantara acquisition have become stage, new discoveries and new enthusiastic ambassadors of our challenges for our people. 5+5+5 program.

44 45 Our Investments Our Investments

local market leader in molecular management, providing access to at the end of 2010, a business Portfolio Management and genetics diagnosis. our network and by engineering with almost half the market in appropriate financing mechanisms. outsourced card management Engaging for Growth We facilitated the introduction The new stores are located in the and processing - and a dominant of OMS and its capabilities to Al Pearl-Qatar in Doha, the Cityscape position in the UAE market for Borg. A tendering and evaluation Mall in Cairo, the Taj Mall in Amman merchant acquiring – we have process conducted by Al Borg and the Hazmieh locality of Beirut. rapidly embarked upon a series resulted in OMS becoming the The Beirut store is the company's of operational, developmental and chosen partner to implement a new single largest investment in inorganic activities to help support Through 2010, our clear focus was on operational enhancements within our IT revamp program that entailed the region. the company's growth plans. partner companies, through a combination of revenue growth initiatives, the upgrade of its IT infrastructure, online offering and firm-wide ERP With 14 stores, Spinneys' continued Network International is geared cost efficiency strategies and improvements in the management of system for the group. growth has delivered results in towards geographic expansion working capital. Notwithstanding the continued uncertainty at both both top line sales and geographic and has already made inroads Expansion diversity in challenging times. The into Egypt, with a focus on the global and regional levels throughout 2011, we focused on supporting brand is well positioned to deliver to customer acquisition side for its our partner companies in implementing their growth plans. Spinneys, founded in 1924, is one its value proposition of great processing business. Over 2011, its of the region's truly great home- prices matched by a superior team has been quick to execute grown brand names, with a known shopping experience. on a regional-wide value creation market strength in Lebanon plan in coordination with us. In its s a result, our businesses Four aspects govern our Initiatives in 2011 included and Egypt and operating in the Execution Capability human resource strategy, additions had already set approach to long-term portfolio comprehensive operational reviews hypermarket, supermarket and to the management team were themselves on a growth value creation: of each partner company against the convenience store formats. It Speed to market is a growth swiftly integrated to build on the path, based on solid "new risk" backdrop, benchmarking broke new ground in 2011 with four dynamic that is the hallmark of strategic vision of the company A store openings – one each in Qatar, modern business. Technology- and to position it for long-term, underlying fundamentals, focused Governance against industry standards in towards optimizing the cost base developed markets, establishing Lebanon, Egypt and Jordan. centric businesses have an added sustained growth. and anticipating and effectively It is clear that firms with good operational efficiency goals advantage – and a necessity – to managing soft and medium-term governance have, over time, and providing partner company Spinneys' consolidation and move nimbly to execute their core The underlying medium-to long- cash flow needs. The unforeseen outgrown and outperformed peers access to group wide contacts for growth strategy positions it strategic goals. term fundamentals in the MENASA events around the Arab Spring that have adopted lower standards. business development. superbly for further expansion region are strong and our aim is since January 2011 and both the There are five compelling factors in geography and format across Following the acquisition of a 49% to continue working closely with domino effect and magnitude in favor of continuous investment Partner Company existing and new markets. We have stake in Network International, our partner companies to help of that regional uprising had a in effective corporate governance: Synergies facilitated the implementation of the leading payment-processing them capitalize on the exciting relatively marginal impact on them. access to capital and attracting this expansion plan by augmenting company in the MENA region opportunities that lie ahead. investors; improving employee One clear advantage of increasing At end 2011, we are confident motivation; risk management; portfolio size is the greater access that our core active portfolio managing growth; family to partner company strategic Spinneys, Jordan management model will yield succession planning. and sales synergies. An example long-term gains that outweigh from 2011 is that of OMS and any short-term impact, now or in Over 2011, we helped Boards Al Borg Laboratories. OMS is a the future. to become more effective by regional IT consulting and services embedding in them industry company, with hubs in Egypt and Additionally, our investment expertise and global insights. Dubai. It focuses on the design strategy, focused on demand Industry experts joined the and implementation of complex oriented sectors, is proving to Boards of Byco, JorAMCo, Karachi multi-vendor IT infrastructure, be robust and representative of Electric Supply Company and business intelligence and business true underlying growth trends MS Forging, adding deeper technology optimization for in the region. By year-end, as expertise to complement large enterprises. stability began to return, there the core competencies of was clear evidence of a revival in incumbent management. Al Borg Laboratories is one of the demand but one where customers largest private medical laboratory articulated their demand for value Additional external industry and health diagnostic groups in more stridently. insight will prove to be invaluable the region. It has served more than in solidifying the companies' 19 million patients and conducted growth strategies and reinforcing more than 55 million tests since adaptability particularly in inception. The company is the leaner times.

46 47 Our Investments Our Investments

Abraaj Capital Funds Abraaj Buyout Fund L.P. (ABOF)

Our first buyout fund closed in June 2003 with commitments of US$ 116 million. The Fund was fully deployed by the end of 2004 through eight Fund Name Vintage Fund Size Investment Geographic Deployment investments. At closing, it was the largest pure-play private equity fund in Year (US$ Mln) Focus Focus Status the Middle East, North Africa and South Asia (MENASA) structured in a Abraaj Buyout Fund L.P. 2002 116 Buyout & Principally GCC* Fully Deployed traditional Limited Partner/General Partner structure, with a focus on buyout Growth Capital & Levant** and growth capital. To date, ABOF has exited six transactions at a gross IRR Abraaj Real Estate Fund 2004 113.5 Real Estate Principally GCC, Fully Deployed in excess of 64 percent and a gross multiple-of-cost of over three-and-a-half L.P. Levant & South times. The Fund's six exits clearly demonstrate our capacity to source and Asia execute transactions in several geographies in the MENASA region, add value Abraaj Buyout Fund II 2005 500 Buyout & MENASA & Fully Deployed through an active partnership model and successfully exit through various L.P. Growth Capital Turkey mechanisms, including initial public offerings, trade sales and management Infrastructure & Growth 2007 2,000 Buyout & MENASA & Fully Deployed buyouts. These have resulted in ABOF investors realizing profits well in excess Capital Fund L.P. Growth Capital Turkey of their original investment. The two remaining investments operate in the Abraaj Private Equity 2008 1,600 Buyout & MENASA & Investing retail and aviation sectors. Fund IV L.P.1 Growth Capital Turkey***

ASAS L.P. 2010 250 Income- MENA & Fundraising / Generating Turkey*** Investing Real Estate Partner Companies Riyada Enterprise 2011 650 Small & MENASA & Fundraising / Development Growth Mid-Cap Turkey Investing Capital Fund Companies Name of Company Date of Investment Geography Industry

JorAMCo Jan-05 Jordan Aviation (MRO) *Gulf Cooperation Council – Saudi Arabia, UAE, Kuwait, Qatar, Oman and Bahrain **Levant – Egypt, Lebanon and Jordan Spinneys Apr-04 MENA Retail ***Includes defined allocation for other growth markets

1 Fund closing in April 2012; in addition, a specific corporate structure has been incorporated in Saudi Arabia for investments in that country totaling US$ 500 million. This takes the quantum available in the current investment cycle in private equity to US$ 2.1 billion.

48 49 Our Investments Our Investments

Focus on Spinneys Jordan Aircraft Maintenance Limited, Jordan Aviation (MRO) Spinneys, established in 1924 Jordan Aircraft Maintenance Limited (JorAMCo) is an aircraft maintenance, repair and overhaul facility, performing in Egypt, has over the years Spinneys, an Abraaj Capital partner company all levels of airframe maintenance, based in Amman, Jordan. Since Abraaj's acquisition of an 80% stake in the developed into one of the company in 2005 through its Fund, the company has more than doubled its capacity through the construction premium supermarket retailers of a state-of-the-art hangar in addition to increasing its capabilities from being able to service 5 types of aircraft in the Middle East and North to 10 today and creating over 200 jobs in the process. JorAMCo has also managed to grow its customer base Africa region. and reduce its dependency on its previous parent company, Royal Jordanian Airlines, which now contributes to c. 30% of JorAMCo's total revenue versus over 50% in 2005. JorAMCo's in-house training academy, established Over the last ten years, Spinneys in 2007 with the aim of nurturing talented workers, graduated its first class in 2011. has focused exclusively on retailing through multiple formats such as hypermarkets, Spinneys, Lebanon, Egypt, Qatar & Jordan supermarkets and convenience Retail stores, which has allowed it to establish and maintain a Spinneys is one of the leading premium supermarket retailers operating 14 hypermarkets, supermarkets and dominant position in the retail convenience stores across the MENA region. Since Abraaj's investment in 2004 through its Fund, the company space. The Spinneys brand is has successfully achieved its expansion strategy outside of Lebanon by entering the Egypt market in 2006 and now on par with international by launching four additional improvements across its subsequently commencing operations in Qatar and Jordan in 2010 and 2011 respectively, offering finished retail peers due to the highest quality retail outlets and increasing its stores. It initiated a qualitative space of over 46,000 square meters. The company has also implemented significant operational improvement of finished retail space in its portfolio from 10 to 14 stores. In enhancement of the business programs through its 'Spinneys 2010' initiative which has resulted in superior store ambience and service. The stores and superior customer October 2011, Spinneys opened under the theme 'Spinneys company is now focusing on scaling up operations in existing markets to achieve cost synergies and improving service. Spinneys currently its seventh store in Lebanon in 2010' which has yielded a its operating margins. operates 14 stores across the Hazmieh, a premium residential quantum improvement in store region with a presence in several and commercial neighborhood, ambience and service, as well as countries including Lebanon, providing a retail selling area of in a number of other unique Egypt, Qatar and Jordan, in 6,000 square meters. selling points. Realization Summary addition to operating in the UAE under a franchise agreement. Spinneys subsequently opened In 2012, Spinneys will focus on its first store in Jordan in consolidating and ramping up Partner Company Date of Sale Holding Period (Mnths) Exit Method Since Abraaj's investment in December 2011 in the Taj Mall, a its operations across its existing Spinneys in 2004 through 4,000 square meter retail space, markets to achieve a higher level BMA Dec-11 90 Trade Sale its Fund, the company has employing over 500 staff and of fixed cost absorption and undertaken an aggressive Maktoob Dec-07 32 Trade Sale providing a boost to the local secure more favorable terms with expansion strategy with the economy. In December 2011, local suppliers. Spinneys will also Septech Sep-07 36 Trade Sale objective of diversifying its Spinneys also opened its doors seek to improve its operating operations outside of Lebanon. to the public and residents of margins by rationalizing its Amwal Dec-06 42 Trade Sale Spinneys delivered on this The Pearl, through the first of cost structure across new and expansion strategy, in a phased Aramex Jun-05 41 IPO two Spinneys outlet located in existing markets. approach, by first establishing The Pearl, Qatar. The second ONIC Apr-04 11 Trade Sale a flagship store in Egypt in store in The Pearl, scheduled Spinneys has set itself on a high 2006. Today, Spinneys operates to open in 2012, will be a full growth trajectory with the new four stores in Egypt providing service supermarket covering a stores expected to contribute a total retail selling area of space of 4,000 square meters. significantly to the company's 20,000 square meters and Spinneys has plans to open profitability going forward, along generating sales of over US$ three additional outlets across with enhancing the Spinneys 150 million. In 2010, Spinneys its existing markets by the end brand at a regional level. opened its first store in Qatar of 2012. in a local residential community in Doha. In fiscal year 2011/2012, Since the time of Abraaj Spinneys made further strides Capital's investment, Spinneys in achieving its expansion plans has focused on operational

50 51 Our Investments

Construction activity on the Samarah Dead Sea Resort, a mixed-use real estate development Abraaj Real Estate Fund L.P. (AREF)

AREF closed in December 2004 with commitments of US$ 113.5 million and is now fully invested. It has acquired stakes in real estate assets that are differentiated from the mainstream, such as convention centers, marina management, leisure and niche hospitality facilities, as well as more traditional investments in property development and construction. To date, AREF has exited three investments at a gross IRR of 74 percent, against a target IRR of 15% and a gross multiple-of-cost of more than three-and-a-half times.

Partner Companies

Name of Company Date of Investment Geography Industry

EHDC Sep-05 UAE Leisure Development

Enshaa May-05 UAE Property Development & Hospitality

DSC Sep-04 Jordan Conferences & Exhibitions

52 53 Our Investments Our Investments

Abraaj Buyout Fund II L.P. (ABOF II)

ABOF II closed in December 2005 with commitments of US$ 500 million and Emirates Heights Development Company, UAe Leisure Development was fully deployed by the end of 2008. The Fund follows a similar theme to its predecessor fund, ABOF, with a focus on buyout and growth capital investments Emirates Heights Development Company (EHDC) was established to create a world-class golf resort on a 600-acre site in Ras Al-Khaimah called Tilal Resort. The resort was conceived as a landmark leisure destination in the MENASA region. To date, ABOF II has exited three investments. The first designed to capitalize on growing demand for real estate in the Northern Emirate and was to include an 18-hole two being Saudi Arabia's National Air Services (NAS) and Egyptian Fertilizers golf course, 900 residential units, a hotel and other associated facilities. Company (EFC), while the third was Acibadem's partial exit in January 2012. The Fund divested its entire stake in Acibadem Healthcare, APlus and Enshaa, UAe Property Development, Hospitality Acibadem Project Management to IHH Healthcare Berhad and Khazanah, the investment holding arm of the Malaysian government. The combined entity is Enshaa is a UAE- based real estate development and investment company established to develop premium- quality commercial, residential and hospitality projects in the MENA region. Enshaa's portfolio includes Palazzo now one of the largest healthcare services firms in growth markets. Acibadem Versace Dubai, D1 residential tower in Dubai, Emirates Financial Towers in Dubai, and Signature Clubs International. Insurance remained outside the scope of this transaction. ABOF II distributed US$ 47 million as capital to its Limited Partners from this transaction. The Dead Sea Touristic & Real Estate Investment Company, Jordan two fully realized exits, NAS and EFC, achieved a gross IRR of 67 percent and Conferences & Exhibitions, Hospitality and Real Estate Development more than two times gross multiple of cost. The Fund's unrealized portfolio The Dead Sea Touristic & Real Estate Investment Company (DSC) developed the King Hussein Bin Talal Convention comprises nine investments in sectors ranging from healthcare and energy to Center on Jordan's Dead Sea shore. The company has strengthened its position in the business and leisure- tourism industry with the addition of a Hilton hotel being developed alongside, and with its newest project – the steel forging and pharmaceuticals. Samarah Dead Sea Resort – a residential and mixed-use real estate development overlooking the Dead Sea.

Realization Summary Partner Companies

Name of Company Date of Investment Geography Industry Partner Company Date of Sale Holding Period (Mnths) Exit Method IHH Healthcare Berhad Jan-12* Malaysia Healthcare ART Marine Dec-08 47 Trade Sale Mediaquest Mar-09 UAE Media Arabtec Dec-07 39 Trade Sale ART Marine Sep-08 UAE Marine & Leisure Services Abanar Dec-07 32 Trade Sale Numarine Aug-08 Turkey Luxury Yacht Manufacturing

Osian's Mar-08 India Art

Tadawi Jan-08 Saudi Arabia Healthcare

Acibadem Insurance Nov-07 Turkey Insurance

MSF Jun-07 Pakistan Steel Forging

SMG May-07 UAE Marine Oil & Gas *Acibadem Healthcare exit consideration in newly issued IHH Healthcare Berhad shares.

54 55 Our Investments

Offshore vessel built by Grandweld (Stanford Marine Group)

IHH Healthcare Berhad, Malaysia Healthcare

IHH Healthcare Berhad is one of the largest premier integrated healthcare services providers focused on growth markets with a footprint covering South East Asia, India and Turkey, and a growing presence in China and the Middle East. The group operates 30 hospitals and 80 clinics / medical centers with over 5,000 beds and owns a number of leading healthcare chains including Parkway Healthcare in Singapore, Pantai Hospitals in Malaysia, Acibadem in Turkey, as well as a stake in Apollo Hospitals of India. Through the investment, Abraaj will strategically assist the management to extract synergies across the combined group and explore, identify and execute organic and inorganic growth opportunities in current and new markets.

Mediaquest, UAe Media

Set up in 1998 by brothers Julien and Alexandre Hawari, Mediaquest is a regional media house involved in publishing magazine titles, providing online media networks and managing events. There are four business divisions: publishing, media representation, conference services and online media. The publishing division produces 17 Arabic and English language titles, including Trends, Gulf Marketing Review, Haya MBC, Communicate, Saneou al Hadath, Autocar, F1 Middle East, Policy and The KippReport online magazine, plus 12 supplements and subtitles. Its online platform, dotmena, is fast becoming the network of choice for advertisers and publishers targeting luxury segments to expand their reach in the region. However, the investment performance has been affected due to an overall slowdown in the print media industry and slower than expected ramp up for Mediaquest's new titles. Accordingly, Abraaj has marked down the value of its investment in this business.

ART Marine, UAe Marine & Leisure Services

ART Marine, UAE Marine and Leisure Services ART Marine is the exclusive agent in the Middle East for several leading luxury boat and yacht brands such as Azimut, Benetti, Atlantis, Riviera, Four Winns and Grady White. ART Marine provides comprehensive after sales, yacht charter and marina-management services. ART Marine has been recognized through prestigious industry awards including 'Arabian Gulf Yachting Awards 2010', among others. The luxury marine industry has however been exposed to global economic challenges. Abraaj has been closely involved in ART Marine's strategy to help refine its business model and enable the company to adjust to the difficult operating environment.

Numarine, Turkey Luxury Yacht Manufacturing

Founded in 2002, Numarine is a leading manufacturer of luxury-performance yachts. Based in a modern, 35,000-square-meter factory outside Istanbul, Numarine produces five sizes of luxury motor-yachts (55 feet, 68 feet, 78 feet, 102 feet and 130 feet) for local and international markets. The company has built a solid infrastructure for producing premium-quality yachts and employs advanced manufacturing processes including assembly-line techniques and vacuum-assisted infusion molding technology. Following its investment in 2008 through its Fund, Abraaj has helped Numarine expand its sales network to other geographies, strengthen its senior management team and enhance its corporate governance structure. Numarine's carrying value is however maintained below its book cost as the company's performance was adversely impacted by the downturn experienced in the luxury yacht industry following the global financial crisis.

Osian's, India Art

Osian's was founded in 2000 as India's first integrated and self-supporting arts institution.T he company operates several complementary business lines: an auction house; an art advisory service providing authentication, insurance, valuation and partner advice; a center for archiving, research and documentation and a publishing and design house. In line with our conservative valuation approach, we have written down our investment in Osian's to appropriately reflect the performance of the business, which has been severely affected by the decline in the value of the Indian art market.

56 57 Our Investments Our Investments

Tadawi, Saudi Arabia Healthcare

Tadawi was established in April 2005 as a result of a merger between its independent retail and wholesale operations. In 2006, Tadawi operated 91 pharmacies across the Kingdom of Saudi Arabia and served over 1,500 Acibadem and IHH Healthcare Berhad wholesale clients with nationwide distribution capability. Tadawi was actively acquisitive throughout 2007 and 2008 and with the support of Abraaj had grown from 91 stores to 385 by the end of 2011, thereby becoming the second largest retail pharmacy chain as well as the largest wholesaler in the country. Following an extremely successful partnership that Acibadem hospital, Turkey began in 2007, Abraaj and Acibadem Insurance, Turkey Mr. Mehmet Ali Aydinlar, Insurance Chairman and Chief Executive of Acibadem, completed the Acibadem Insurance is one of the four largest health insurance companies in Turkey (based on 2011 market share). sale of a 75% shareholding in The company has an insured population of over 200,000 in health insurance comprising blue-chip corporate Acibadem to IHH Healthcare and individual clients. The company's product portfolio also includes life and personal accident products Berhad and Khazanah giving Acibadem Insurance a strong foothold in the Turkish insurance market. Since the investment through its Nasional in January 2012. The Fund, Abraaj has significantly enhanced the capabilities of the senior management team and the company's acquisition (which does not performance in underwriting, distribution and other key areas. This has yielded strong positive results as gross include Acibadem Insurance) written premiums nearly doubled in Turkish Lira terms and the company achieved profitability after generating involving part cash and part a loss in 2008 and 2009. share consideration in the form of newly issued IHH Healthcare Berhad shares has created one Mannan Shahid Forgings, Pakistan of the largest healthcare services Steel Forging firms in growth markets with a geographic presence across key Mannan Shahid Forgings (MSF) is a premier manufacturer of forged and machined components in Pakistan. The markets from Turkey through company produces carbon and alloy steel components for the automotive industry and exports approximately to China. Post completion, both half its production to Europe and the US. During the year, MSF continued to focus on its sales efforts and Abraaj and Mr. Mehmet Ali participated in several global automotive trade exhibitions which established several new relationships for MSF in Aydinlar have emerged as new Europe and added four new export clients. Since the investment in MSF through its Fund, Abraaj has considerably shareholders in IHH Healthcare created more than 5,000 new Together, IHH Healthcare Berhad strengthened the management team by hiring key senior staff members including the CEO, CFO and Head of Berhad and joined its Board. jobs across its hospital network, and Acibadem have formed Production. The team has been instrumental in the execution of continuous operational improvements in the creating significant value for all one of the largest healthcare company's core forging processes, increasing share of business in higher value added segments and expanding Abraaj's original investment stakeholders across the country. services providers which is the global client-base. in Acibadem in 2007 through globally focused on growth its Fund was predicated on its Following Abraaj's expansion markets and operates over 80 into South East Asia through healthcare facilities with over Stanford Marine Group, UAE long held belief that the rapid Marine Oil & Gas demographic changes occurring the opening of its Singapore 5,000 beds across Asia. The across the region, coupled with office in January 2011, Abraaj consolidated platform opens Stanford Marine Group is a leading regional marine business headquartered in Dubai, UAE comprising Stanford rapidly rising incomes and the identified an opportunity to up exciting opportunities along Marine and Grandweld. Today, following an aggressive rejuvenation and growth plan further to Abraaj's investment subsequent emergence of a create a growth markets focused with numerous synergies that in 2007 through its Fund, Stanford Marine is a dominant marine-hire services player which owns and operates a middle class, would lead to healthcare platform together can be leveraged across the diverse fleet of 35 offshore support vessels, deployed on long-term contracts across the GCC, South East Asia increasing demand for quality with IHH Healthcare Berhad. combined group. and more recently, East Africa. Grandweld is the group's fully integrated ship-building and ship-repair unit which healthcare – which the public has recently increased and modernized its facility by relocating from Al Jadaf to a brand new state-of-the-art sector alone could not provide. IHH Healthcare Berhad, whose Abraaj remains optimistic about facility in Dubai Maritime City. The group also owns Gallagher, a crane rental business that operates a fleet of shareholders include Khazanah growth markets healthcare and 40 mobile cranes and provides lifting solutions to customers in different industries across Dubai and more Over the past 4 years, through Nasional and Mitsui & Co., owns specifically the ability of IHH recently, Abu Dhabi. both organic growth and and operates leading healthcare Healthcare Berhad to capture strategic acquisitions, Acibadem chains in important Asian this opportunity in the healthcare grew into the largest healthcare markets including Parkway services space. Together with Realization Summary services provider in Turkey, Healthcare in Singapore and its new partners - Khazanah increasing the total number of Pantai Hospitals in Malaysia. In and Mitsui - Abraaj looks hospitals from 6 to 14 and more addition, the company has a forward to adding value in what Partner Company Date of Sale Holding Period (Mnths) Exit Method than doubling the number of growing presence in the Middle will be a new and dynamic beds from 770 to 1,850. Over East, China and India. chapter in the growth of IHH Acibadem Healthcare Jan-12 54 Trade Sale the same period, Acibadem Healthcare Berhad. NAS May-08 26 Trade Sale

EFC Mar-08 10 Trade Sale

58 59 Our Investments

Infrastructure & Growth Capital Fund L.P. (IGCF)

IGCF closed in December 2007 with total commitments of US$ 2 billion, making it the largest private equity fund focused on the MENASA region. The Fund has made 12 investments, fully deploying its total capital. To date, the Fund has distributed US$ 500 million to its Limited Partners, equivalent to 25 percent of its capital. The Fund continued to perform well during 2011 with a positive net asset value as of December 31, 2011. This was in part due to partner companies operating in fundamentally strong and defensive sectors, such as healthcare, energy and education that continued to benefit from structural undersupply and pent-up demand. In January 2012, the Fund divested its entire stake in Acibadem Healthcare, APlus and Acibadem Project Management to IHH Healthcare Berhad and Khazanah, the investment holding arm of the Malaysian government. The combined entity is now one of the largest healthcare services firms in growth markets. Acibadem Insurance remained outside the scope of this transaction. The Fund distributed US$ 190 million as capital to its Limited Partners from this transaction.

Partner Companies

Name of Company Date of Investment Geography Industry

IHH Healthcare Berhad Jan-12* Malaysia Healthcare

KESC May-09 Pakistan Utilities

Man Infraconstruction Dec-08 India Construction Services

Ramky Infrastructure Dec-08 India Construction Services

ECI Dec-08 India Construction Services

Tadawi May-08 Saudi Arabia Healthcare

Al Borg May-08 Egypt Healthcare

Byco Feb-08 Pakistan Oil Refining, Petrochemicals

Air Arabia Dec-07 UAE Aviation

OCI Dec-07 Egypt Fertilizer & Construction

GEMS Dec-07 UAE Education

Acibadem Insurance Nov-07 Turkey Insurance *Acibadem Healthcare exit consideration in newly issued IHH Healthcare Berhad shares.

Air Arabia, an Abraaj 60 61 Capital partner company Our Investments Our Investments

IHH Healthcare Berhad, Malaysia Healthcare IHH Healthcare Berhad is one of the largest premier integrated healthcare services providers focused on growth Karachi Electric Supply Company markets with a footprint covering South East Asia, India and Turkey, and a growing presence in China and the Middle East. The group operates 30 hospitals and 80 clinics / medical centers with over 5,000 beds and owns a number of leading healthcare chains including Parkway Healthcare in Singapore, Pantai Hospitals in The Karachi Electric Supply Malaysia, Acibadem in Turkey, as well as a stake in Apollo Hospitals of India. Through the investment, Abraaj will Company (KESC) serves a Karachi Electric Supply Company, an Abraaj Capital partner company strategically assist the management to extract synergies across the combined group and explore, identify and population of over 18 million execute organic and inorganic growth opportunities in current and new markets. through 2.3 million billing points across the residential, commercial and industrial sectors of what is Pakistan's Karachi Electric Supply Company, Pakistan primary commercial hub. Utilities KESC is one of the few remaining vertically-integrated Karachi Electric Supply Company (KESC) is a vertically integrated power utility with exclusive franchising rights power utilities globally and to serve Karachi, Pakistan's largest city, with a population of over 18 million. Since its investment through its Fund, provides Abraaj with a unique Abraaj has brought about transformational change in KESC, which was an underinvested, operationally weak challenge – and an opportunity company with misalignment amongst various stakeholders. Over the last three years, Abraaj has added 1000 – to make a 360-degree MW of new efficient generation capacity, reduced aggregate technical and commercial losses to less than 24% transformation in a business that in two thirds of the city and achieved a positive EBITDA for the first time since privatization. As it continues on underpins daily life in a city that its multi-dimensional strategy, Abraaj, despite significant challenges, is not only on target to make the company is amongst the most populous profitable, but also continues to drive positive change in the energy sector dynamics of the country. on the globe.

Abraaj Capital acquired Man Infraconstruction Limited, India management control of the Construction & Infrastructure Services business in September 2008, alongside an equity commitment Man Infraconstruction Limited (MIL), based in Mumbai, is a key player in India's infrastructure and real estate of US$ 361 million, deployed construction and development industry. MIL's competencies are in providing construction services for residential, over a three year period. The industrial, commercial, road, and port infrastructure projects. In the residential sector, MIL provides contracting Government of Pakistan is the services for the construction of townships and high rise buildings whilst in the commercial and industrial space, second largest shareholder of MIL caters to shopping malls, IT parks, warehouse and industrial facilities, hospitals and schools. In addition, KESC, with 25.66% shareholding MIL also undertakes projects in the roads sector, port related infrastructure and sewage systems. In the port after core shareholders Abraaj infrastructure sector, MIL provides services for the construction of onshore container terminals, freight stations, Capital, the Al Jomaih Group operational buildings and workshops, and repair and maintenance services. and National Investor Group (NIG) of Kuwait.

Ramky Infrastructure Limited, India Through a mix of strategic investment in a decaying Construction & Infrastructure Services upgrade and ESG programming options with low carbon impact. infrastructure, operational efficiency, and stakeholder outreach As part of Karachi's Sustainable labor improvements and internal Ramky Infrastructure Limited (RIL), based in Hyderabad, is a dominant player in the Indian infrastructure strategies that have transformed Development Strategy, KESC alignment, supply chain solutions construction and development industry and provides contracting services in the construction of roads, highways, public perceptions of a once is also exploring establishment and a stakeholder engagement industrial buildings, housing, irrigation canals, water and drainage systems, power transmission and distribution broken organization. of the world's largest Bio Waste- strategy that is already a unique projects. RIL's developer segment focuses on four major sectors, which include industrial parks, roads, integrated to-Energy plant in the Landhi case in global private equity, the townships and transport terminals. Additionally, RIL offers consultancy services in the areas of infrastructure The latest capital project is the Cattle Colony. business has undergone a clear development, waste management, environment and property development. RIL's clientele includes a diverse state of the art 560MW Bin transformation: the addition cross section of public and private sector institutions. Qasim II plant which will be fully of over 1000 MWs of new operational in 2012. KESC has power by 2012 (in a business taken a lead role in redefining where no new generation the future fuel strategy of the capacity was added since 1997), energy sector of Pakistan. From transmission (grid) system biogas to coal and LNG, the enhancements, distribution loss company is investing in fuel reduction, customer service

62 63 Our Investments Our Investments

ECI Engineering & Construction Limited, India Construction & Infrastructure Services

ECI Engineering & Construction (ECI), based in Hyderabad, is a mid-sized infrastructure development company Al Borg Laboratories operating in the Engineering, Procurement and Construction (EPC) space. ECI is the largest EPC player in the railways overhead electrification / signaling segment and is the only Indian firm to have executed 12 traction sub stations. Post acquisition, Abraaj's shareholding in ECI has enabled the company to raise bank financing in an Al Borg Laboratories was expedient manner. The company has also developed an entry strategy into the Middle East and Africa with the established in 1991 and has assistance of Abraaj, in addition to establishing robust financial reporting and corporate governance practices. grown quickly to become the largest private laboratory group in the Middle East, having served Tadawi, Saudi Arabia more than 19 million patients and Healthcare conducted 55 million tests since inception. Through its network Tadawi was established in April 2005 as a result of a merger between its independent retail and wholesale of 117 branches covering Egypt, operations. In 2006, Tadawi operated 91 pharmacies across the Kingdom of Saudi Arabia and served over 1,500 Jordan and Northern Sudan, Al wholesale clients with nationwide distribution capability. Tadawi was actively acquisitive throughout 2007 and Borg caters to walk-in patients, 2008 and with the support of Abraaj had grown from 91 stores to 385 by the end of 2011, thereby becoming the large corporations, professional second largest retail pharmacy chain as well as the largest wholesaler in the country. unions and insurance companies, as well as lab-to-lab clients. With over 1,600 group employees, Al Borg Laboratories, an Abraaj Capital partner company Al Borg Laboratories, Egypt including 200 experienced Healthcare physicians and doctors, Al Jordan and Sudan. Over a span grading matrix, and introduction Borg covers all specialties of of four years, the number of of new employee benefits and Al Borg Laboratories is the largest private laboratory group in the Middle East, having served more than 19 million laboratory medicine. patients and conducted more than 55 million tests since its inception in 1991. Since Abraaj's investment through Al Borg branches has almost development plans. doubled from 60 to 117 and pro- its Fund, and with the ambition to transform itself into one of the largest growth markets integrated diagnostics In 2008, Abraaj Capital's forma consolidated Revenue Heading towards 2012, and players in the world, Al Borg embarked on an aggressive investment plan, growing its branch network from 60 Infrastructure and Growth Capital and Operating Income advanced despite political turbulence in its to 100, closing five acquisitions that expanded its product offering and geographical footprint into Jordan and Fund acquired 76 percent of Al by over 100% through the end countries of operations, Abraaj Sudan, and investing heavily to upgrade its IT and logistics infrastructure. With over 1,600 group employees, Borg, subsequently increasing of 2011. is confident about Al Borg's including 200 experienced physicians and doctors, and 600 chemists and technologists, Al Borg covers all its stake to 90 percent through a ability to maintain its strong specialties of laboratory medicine. series of share buybacks funded To complement Al Borg's growth trajectory. Having grown through Al Borg's excess cash growth initiative, Abraaj has its revenues and profitability by balance. With low but rising Byco, Pakistan supported it in expanding double digit rates in 2011, while annual medical tests per capita Oil Refining, Petrochemicals its core management team, still enjoying an unleveraged in the Middle East, a unique boosting its human capital and balance sheet and over US$ 11 competitive position, track Byco Group is Pakistan's emerging energy group engaged in the businesses of oil refining, petroleum marketing, filling key positions, such as million of cash balance, Al Borg record of growth and a scalable chemicals manufacturing and petroleum logistics. Byco currently operates a 35,000 barrels per day (bpd) Chief Financial Officer, Chief is in a unique position to explore business model, Abraaj Capital refinery and is expanding its complex by setting up another refinery with a capacity of 115,000 bpd. The new Operating Officer and Directors profitable growth opportunities saw the potential to transform refinery is now 92% complete with expected commissioning in 2012. Byco is also establishing the country's first for Business Development, IT, across the Middle East and Al Borg from a local leader into petrochemicals plant with a capacity of 17,100 bpd and a one of its kind floating port in the country. Byco also Human Resources and Sales Africa region. It is in advanced a regional champion. operates 230 branded fuel stations through its petroleum marketing business. With active support from Abraaj, and Marketing. The focus on stages of negotiations for a Byco has been successful in raising over US$ 100 million of non-recourse project debt. Abraaj has also been enhancing human capital was new acquisition in the radiology Since acquisition, Abraaj has actively involved in strengthening the Byco management team with top professionals being hired at all levels. developed in parallel with a business as well as two joint- supported Al Borg's aggressive group wide compensation ventures in African markets. investment plan, benefiting from restructuring exercise targeted Organically, the core focus Air Arabia, UAe its un-leveraged balance sheet at positioning Al Borg as the will lie in the integration of Aviation and strong cash-generating employer of choice within its recently completed acquisitions, capabilities, to fast track its industry and attracting leading revamping of its IT infrastructure Based at Sharjah International Airport in the UAE, Air Arabia is the Middle East's first and leading low-cost carrier. organic as well as acquired talent. Through this restructuring and online offering, and The company started operating in 2003 with a fleet of two aircraft to five destinations. It has since grown to 29 growth. Five acquisitions exercise, Al Borg's workforce expansion of Al Borg's branch Airbus A320s serving 69 destinations in the Middle East, North Africa, Asia and Europe from three hubs – the have been completed to date, saw their salaries increasing by network in Sudan and Jordan. UAE, Morocco and Egypt. It has won recognition for its achievements with various prestigious industry awards expanding Al Borg's product an average of 25-30% per annum such as the 'Middle East's leading low-cost airline' for three consecutive years at the Aviation Business Awards. portfolio to include molecular for the second consecutive year, The company went public in 2007. and genetic testing and adoption of a company-wide expanding its footprint into

64 65 Our Investments Our Investments

Orascom Construction Industries, Egypt Fertilizer & Construction Abraaj Private Equity Fund IV L.P. Orascom Construction Industries (OCI) is a leading international fertilizer producer and construction contractor (APEF IV)* based in Egypt and is one of the region's largest corporations with projects and investments across Europe, Middle East, North Africa and North America. OCI successfully entered the fertilizer segment through the initial strategic acquisitions of EBIC and EFC in 2008 and has managed over the course of 5 years through a APEF IV is the fourth in Abraaj Capital's series of buyout funds, with combination of acquisitions, green field investments and organic expansion to grow from a single plant producing commitments of US$ 1.6 billion. In line with the investment strategy of its 1.3 million metric tons of urea to being ranked one of the top five global nitrogen fertilizer producers with an annual production capacity of 7.3 million metric tons in 2012. The Construction Group ranks among the leading predecessors, the Fund seeks to make control-themed investments, primarily global contractors and undertakes large industrial, infrastructure and select commercial projects for public and in defensive growth-oriented sectors. APEF IV completed its inaugural private customers principally in Europe, the Middle East and North Africa. transaction in March 2011 with the landmark acquisition of a 49 percent stake in Network International. Three significant transactions of approximately US$ GEMS, UAe 400 million were also announced in early 2012. The three transactions include Education Saham Finances, a leading insurance holding company in Africa; Viking, an GEMS is a leading global provider of private K-12 education with more than 40 years of experience in managing integrated oilfield services business operating mainly in Turkey, Poland and and operating schools. Abraaj acquired a 25% stake in GEMS in 2007 through its Fund and subsequently in January 2012, restructured its equity stake in GEMS into a three year convertible loan instrument with full Kurdistan; and Kuwait Energy Company, a regional independent exploration downside protection. Since Abraaj's investment in 2007, GEMS' performance has increased significantly with and production company. These investments will be covered in more detail in EBITDA more than doubling during the holding period. Abraaj has played a vital role in helping the company introduce key systems and processes as well as bringing on board a strong management team to drive the our 2012 Annual Review. APEF IV's pipeline remains extremely robust and we growth of the company since acquisition. Abraaj has also leveraged its relationships with international financiers expect to execute several transactions through the course of 2012. The Fund to help GEMS raise long-term financing in 2010 which was used to finance the development of new schools and fund the acquisition of Everonn Education in 2012, which is one of the largest listed education services has already drawn down 50% of its committed capital. company in India.

Acibadem Insurance, Turkey Partner Companies Insurance

Acibadem Insurance is one of the four largest health insurance companies in Turkey (based on 2011 market share). Name of Company Date of Investment Geography Industry The company has an insured population of over 200,000 in health insurance comprising blue-chip corporate Network International Mar-11 UAE Financial Services and individual clients. The company's product portfolio also includes life and personal accident products giving Acibadem Insurance a strong foothold in the Turkish insurance market. Since its investment through its Fund, Abraaj has significantly enhanced the capabilities of the senior management team and the company's performance in underwriting, distribution and other key areas. This has yielded strong positive results as gross written premiums nearly doubled in Turkish Lira terms and the company achieved profitability after generating a loss in 2008 and 2009. Network International, UAe Financial Services

Network International (NI) is the leading provider of payment services in the MENA region. It covers almost half the market in outsourced card management and processing services in the region and is the largest merchant acquirer in the UAE with a 60% market share. Since Abraaj's stake acquisition last year through its Fund, the company has made notable progress in the implementation of its post-acquisition value creation plan. NI has Distribution Summary successfully identified and executed key acquisitions and strategic partnerships during the year, including the acquisition of a 50% stake in Transguard Cash, which provides it with access to 85% of all ATMs in the UAE, and the strategic partnership with China UnionPay, which leverages the growing trade activities between China and Partner Company Distribution Date Geography Industry the UAE. NI is also currently in the advanced stages of introducing new pioneering products to the market that will help the company expand its service offering and geographical presence.T he company has also significantly Acibadem Healthcare Feb-12 Turkey Healthcare enhanced its senior leadership team with the recruitment of four executives with extensive global payments Al Nouran* Jan-10 Egypt Sugar expertise, including a Chief Financial Officer, Head of Sales, Head of Product and Marketing Management and Head of Human Resources. OCI** Jul-08 Egypt Fertilizer & Construction

*Full Realization **Recapitalization *Previously named Abraaj Buyout Fund IV L.P. (ABOF IV). The name of the Fund was changed to better reflect its mandate.

66 67 Our Investments Our Investments

ASAS L.P.

Network International ASAS is Abraaj Capital's income-generating real estate fund targeting high- quality real estate assets across the MENA region including Turkey. In the In March 2011, Abraaj Capital calendar year 2011, the Fund provided its investors with an annualized net Network International, an Abraaj Capital partner company completed the acquisition yield of 8.75% (measured on Acquisition Cost of Investments) in a low global of a 49% stake in Network International LLC (Network interest rate environment. Although the Arab Spring led to a lull in transaction International). volume at the beginning of 2011 with market participants sitting on the sidelines Established in 1994, Network given geo-political uncertainties, ASAS witnessed a pick-up in activity in the International is the leading second half of the year. Looking forward, as business and investor confidence provider of payment services in the MENA region covering continues to return, we expect to witness an increasing number of attractive almost half the market in opportunities across the region, particularly in ASAS' larger markets of outsourced card management and processing. The company Saudi Arabia and Turkey. The region's market dynamics continue to drive maintains a dominant position the opportunities for ASAS and provide the potential to achieve superior in the UAE market for merchant acquiring with a market share of returns relative to developed markets. These dynamics include the under- over 60%. UnionPay, which leveraged at 15% over the course of 2012, supply of certain key real estate sectors driven by accelerating demand from Through its merchant acquiring the growing trade activities while the number of cards in rapid economic growth as well as a shift in the corporate mindset away from division, Network International between China and the UAE, the region is expected to grow owning real estate. provides card acquiring while benefiting over 3,000 by 10%. Against this backdrop, solutions, point-of-sale terminal Chinese companies registered in Network International is seeking management and other value- the UAE and 200,000 Chinese to further strengthen its merchant added services to over 24,000 consumers living and working relationships by continuing to Investments merchant outlets in a wide range in the UAE. Additionally, as offer value added services such of industries, including travel, part of its expansion strategy, as Dynamic Currency Conversion Name of Company Date of Investment Geography Asset Type electronics, hospitality, retail Network International successfully and Loyalty Programs. Dynamic and supermarkets. Through completed the acquisition of a Currency Conversion allows The 47th Dec-10 Egypt Office Building its issuer processing division, 50% stake in Transguard Cash international card users to pay it offers comprehensive card Management Services providing in the currency of their home management and transaction it access to 85% of all ATMs in country thereby providing a processing solutions to over 60 the UAE. revenue stream for the merchant. banks and financial institutions in eight countries in the Middle Network International has further Looking ahead, Network The 47th, Egypt East and North Africa region. It strengthened its leadership International will continue Office Building also services more than 3,000 team over the course of 2011 to expand its product suite ATMs and is one of the very few by recruiting four senior and geographic coverage, The 47th is a new, fully operational Grade 'A' office building inC airo, with high-quality, multinational tenants. The third party payment processors executives with global expertise both organically and through investment performed in line with expectations in 2011, despite the wider socio-political events that took place globally to have a principal to fill key positions such as the acquisitions, to allow the in Egypt, and rental payments were received on schedule. membership agreement with Chief Financial Officer, Head company to become a growth Visa and MasterCard. of Product and Marketing markets payments leader. New Cairo, where the building is located, has been relatively unscathed by the wider turmoil that hit Egypt. The Management, Head of Sales and 47th maintains a full security team on site on a 24/7 basis and its insurance cover has been further enhanced with In 2011, Network International Head of Human Resources. the addition of a 'political violence' insurance policy as a precaution. After a lull in the leasing market amidst the identified and executed key climate of political uncertainty, there has been a relative improvement in the second part of the year. Through strategic partnerships and The MENA region continues to a sustained and targeted leasing strategy, the entire ground floor which was vacant at the time of acquisition acquisitions to enhance its display attractive macroeconomic of the property has been leased out. As a result the occupancy in the building has increased from 84% at the geographic and product reach. fundamentals as consumers shift time of acquisition to 96%. One such partnership was from cash to electronic payments. realized in March 2011 between The UAE's electronic transaction At the end of 2011, an independent professional third party valuer opined that the building had retained its Network International and China throughput is expected to grow valuation at the same level as at the end of 2010.

68 69 Our Investments Our Investments

Riyada Enterprise Development Growth Capital Fund (RED)

The objective of ASAS is to 2011 was a critical year in the evolution of RED. Our local presence expanded produce stable cash flows by The 47th,­ Cairo investing in regional opportunities. from 5 to 8 countries and we now have SMC-dedicated offices in Tunisia, Investments are based on the Morocco and Algeria, in addition to UAE, Egypt, Jordan, Lebanon and specific conditions in each real estate sector within the different Palestine. Our investment team expanded from 16 to 29 professionals with regional markets. ASAS focuses on a reach that now extends across the broader MENA region, including the operationally essential real estate such as logistics warehouses, GCC, North Africa and Levant. Our partner companies increased from 5 to 13, schools, hospitals, supermarkets, with the total amount invested by RED in this respect having increased to c. big box retail, low to middle income and corporate housing, US$ 90 million. These investments cover 9 different industries and are spread head offices and infrastructure across 8 countries. In 2012, RED announced an investment in The Entertainer, a assets, including through sale and leaseback or finance and lease boutique consumer services company offering two-for-one discount vouchers transactions, in under-penetrated for a variety of quality merchants. RED's investor base has also expanded to sectors where there is a lack of institutional capital. ASAS also include new development finance institutions D( FIs) and investors for our purchases high quality real estate flagship Regional Fund as well as the underlying Country Funds. In all, the including in the office and retail sectors where there are large total capital committed to the RED platform now stands at c. US$ 360 million, supply-demand gaps. Additionally, ASAS has achieved its first close of putting us in a strong position to reach our final target size of c. US$ 650 ASAS invests in real estate through US$ 100 million and has seen strong alternative investment structures investor interest during 2011 given million by the end of 2012. that provide stable cash flows. the Fund's proven track record of delivering attractive quarterly net Abraaj's dedicated private equity cash returns to its investors in a real estate investment team low interest rate environment. The Partner Companies leverages its unrivalled network Fund is still targeting a final close across the region to generate amount of US$ 250 million. consistent proprietary deal Name of Company Date of Investment Geography Industry flow. Saudi Arabia and Turkey in d1g.com Sep-11 Jordan Social Media particular are performing strongly and represent the majority of Teshkeel Sep-11 Kuwait Media and Entertainment ASAS' current pipeline. A number of these transactions are in Thimar Sep-11 Palestine Agribusiness advanced stages of discussion and Nymgo Aug-11 Lebanon VoIP / Telecommunications we expect to consummate these opportunities in 2012. Mani Foods Jun-11 UAE Packaged Foods / FMCG

Online Modern Solutions May-11 Egypt Information Technology Services

Unimed Apr-11 Tunisia Pharmaceuticals

AgroCorp Jan-11 Egypt Agribusiness

E3 Dec-10 UAE Healthcare Technology Services

Gallus Dec-09 Tunisia Food Processing

Opalia Pharma Jun-09 Tunisia Pharmaceuticals

Oksa Maroc Nov-08 Morocco Utility Services

Emteyco Oct-08 Morocco Utility Services

70 71 Our Investments

A critical feature of RED is its markets. The investments include for instance, commercial investors two-tier structure, comprising for example the leading artichoke see a large, untapped segment of a regional head office in Dubai producer/processer in Egypt, the the market that is starved of capital that, in addition to spearheading second largest producer of poultry and yet capable of producing high efforts in the GCC, supports the products in Tunisia, and the leading returns, while double-bottom various local country offices and manufacturer of branded sterile line driven investors see the facilitates access to the broader form pharmaceuticals in North opportunity to invest in a critical Abraaj platform. Africa. The growth potential of segment of regional economies these companies, both in terms of that has the potential to create During 2011, RED expanded its the existing markets they service as jobs in a young and increasingly local presence by acquiring control well as through regional expansion restless population. Importantly, of the Kantara Fund, a North opportunities, is tremendous. On these two factors reinforce each Africa focused private equity average, these 13 companies grew other - the greater the amount fund that was launched in 2006, by 41% in 2011 despite this being a of capital targeting SMCs the and includes among its investors turbulent year in the region. more potential there is to create leading institutions such as CDC, jobs, and the best way to direct European Investment Bank, RED has been able to support the sustainable capital flows to SMCs PROPARCO, Kuwait Investment growth of its partner companies is to demonstrate the potential of Authority and the Arab Fund for through facilitating access to generating attractive returns in this Social & Economic Development. the broader Abraaj platform. For segment of the market. Through The Kantara platform included an instance, our pharmaceutical RED, we look forward to helping existing team of local investment manufacturing business in Tunisia to achieve these dual goals. professionals and a portfolio is now in discussions with an of 5 partner companies. This Abraaj partner company to list its In summary, 2011 was a formative acquisition provided RED with products in the Saudi market and year in terms of substantiating an immediate footprint in the our dried fruits and nuts business the underlying investment thesis Maghreb region (covering Tunisia, in the UAE is in discussions with of RED. RED was conceived in Algeria and Morocco) and also an Abraaj partner company to 2008 and launched in 2009 on strengthened RED's existing produce private label products in the basis that there existed a presence in Egypt. Expanding into the Levant and North Africa. As large number of institutionally North Africa was a key objective our partner company portfolio and investable high impact, high in 2011 and this acquisition now geographical presence expands, growth entrepreneurial businesses enables RED to benefit from a value creation opportunities will in the MENA region. To be sure, truly pan-regional MENA platform. continue to emerge for these some doubted the potential of this The Kantara Fund is now fully SMCs to benefit from. market, arguing that: "there are not integrated into the RED platform. enough entrepreneurs in MENA" With the completion of the Aureos Today, RED's investor base (note: RED sourced over 400 acquisition, RED will now benefit includes a unique combination deals in 2011); "SMCs are all family- from the synergies of a common of both commercially-oriented run" (note: of the 13 deals in which platform and operate under the and double-bottom line driven RED invested, there is not one single brand, Aureos. Aureos and investors. It is important to note family business); "entrepreneurs RED Funds will continue according that while the RED platform won't let you in" (note: RED has to their existing fund mandates was created with the primary on average acquired a c. 40% and investment guidelines. purpose of generating attractive stake in these businesses with returns (30%+) for investors, strong investor rights); and "there In 2011, the RED investment the early cornerstone investors are not enough high growth, high portfolio expanded to include 13 in RED included international impact SMCs" (note: RED partner partner companies in 8 countries. development finance institutions companies include a number of An interesting aspect of these as well as regional governments market leaders in their respective investments is that they represent such as those in Palestine and fields). We believe that the pace a diverse set of high growth, high Jordan. The confluence of these of our activity in 2011 puts such impact businesses that have a investors has come about due to arguments to rest, and we look unique and oftentimes leading the multiple benefits associated forward to a robust and equally Dr. Alya El Hedda, Co-Founder and Chief Executive Officer of Opalia position in their respective with investing in SMCs in MENA - active 2012. Pharma, at the company's headquarters in Tunis. Dr. Hedda established Opalia Pharma in 1988 with Co-Founder Marco Montanari.

72 73 Our Investments Our Investments

d1g.com, Jordan Mani Foods Industry LLC, UAE Social Media Packaged Foods / FMCG d1g.com is an Arabic-language social networking platform that enables users to create, customize, share, manage Mani Foods produces a range of premium quality dried fruits and nuts that are marketed and sold under the and monetize their social networks and communities. The investment in d1g.com was made in 2011 which was a MANI® brand. In conjunction with RED's investment, Mani has taken significant steps to refocus its business on consolidation year for the company in a fast evolving online Arabic content segment. Since RED's investment, the retail sales of its own branded products as well as expanding its institutional customer base. Over the past 9 company has increased its monthly unique users base by 60% to 4 million, quadrupled its page views to more months, Mani has signed new agreements with leading distributors in five territories across the MENA region, than 42 million and doubled its ad impressions to over 100 million per month. With over 60% of users between positioning the company for future growth in the retail segment. On the institutional side, in addition to key the ages of 15 and 25, d1g.com has concentrated its efforts towards offering rich media services such as video, customers such as Emirates Airlines and Oman Air, Mani has also begun supplying its products to Etihad, Fly photo, and audio sharing. Dubai and Abela & Co. Further to supporting the company's sales growth, the support of RED was critical in enabling Mani to obtain new working capital and equipment finance facilities.

Teshkeel, Kuwait Media and Entertainment Online Modern Solutions, Egypt Information Technology Services Teshkeel is a global media and entertainment company that has developed unique children's content centered on a collection of superheroes, branded THE 99, which has its origins in Middle Eastern culture and values. OMS is a regional IT enterprise solutions and consulting services company. OMS specializes in IT infrastructure, Since RED's investment, the company has completed and delivered 26 episodes of THE 99 TV animated series Business Technology optimization, Analytics and Business Intelligence solutions. OMS currently employs over 130 with another 26 episodes in production. In a major development for the company, Teshkeel successfully signed IT experts and serves a client base across 20 countries. Since our investment, the RED team has worked closely broadcasters for Season 1 in Turkey, Australia, Ireland, Africa, South America, the Middle East and Cartoon with the Founder and management team to build-up the institutional foundation of the company to support Network for extensive parts of Asia. In all, 68 countries are now covered under existing broadcast licenses with further growth. This included legal restructuring, restructuring the finance and planning function and hiring a plans to air Season 1 in 2012. A made-from-TV movie 'THE 99: Unbound' was premiered at the recent New York new Human Resources Director and Chief Financial Officer. Our team is also assisting the company in revising and Dubai film festivals and will soon be released in motion picture theaters throughout the GCC. its growth strategy, with a strong focus on packaging and productizing its IP (including solution modules and project templates). Additionally, the company is also in the process of opening an office in Qatar this year, to be followed by a Saudi office next year.

Thimar, Palestine Agribusiness Unimed, Tunisia Pharmaceuticals Thimar is a producer of natural herbs and vegetables in the Jordan Valley within the Palestinian Territories. The investment by RED in 2011 has enabled the company to expand cultivable land to 500,000 square meters for Unimed is a market leader in the production of branded sterile form products covering mainly liquid injectables, cultivation of vegetables and 300,000 square meters for cultivation of fresh herbs. Thimar has also been able to powder injectables and eye drops. Unimed is engaged in contract manufacturing for international pharmaceutical increase its workforce by 120 workers, including providing employment for 30 women, and is expected to add a firms such as Pfizer, Mylan and Thea. Since RED's investment in Unimed in April 2011, the company more than further 60 jobs by the peak cultivation season in 2013. The company has utilized the Abraaj platform to access doubled its production capacity in injectables and eye drops. During 2011, the company reached 130 product the GCC market and will be selling its product for the first time in these markets in 2012. A packaging facility will registrations in Tunisia and 76 in Africa (Algeria, Burkina Faso, Cameroon, Democratic Republic of Congo, Ivory also be established which will enable the fresh produce to be packaged locally thereby enabling the company Coast and Senegal) which has enabled it to increase sales by 22.5% in 2011, despite a year of political volatility. to capture a higher portion of the value chain. Unimed is also working closely with the RED team to diversify its export base by targeting GCC countries.

Nymgo, Lebanon AgroCorp, Egypt VoIP / Telecommunications Agribusiness

Nymgo is a telecom provider of low cost and high quality international Voice over IP (VoIP) services, focused AgroCorp is an integrated agriculture company focusing on the farming and processing of artichokes in Egypt. on targeting various immigrant communities. Since the investment, the RED team has worked closely with AgroCorp is the largest dedicated artichoke plantation and the biggest buyer of artichokes in the Egyptian the Founder/CEO to enhance the core operations of the business. This has included hiring a new marketing market. RED's investment has enabled the company to meet operational demands from both a functional and director, supporting the launch of a marketing campaign with Google and hiring a technical consultant to assist corporate governance perspective. RED and AgroCorp are also jointly executing plans to vertically expand in launching a new custom platform for the Android and MAC operating systems. The Nymgo application is now across the artichoke value chain, as well as exploring expansion opportunities across other complementing fruit available on the Apple App Store for the first time. RED also worked with the company and local banks to put and vegetable products. in place a new working capital facility.

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E3, UAe Healthcare Technology Services

E3 is a leading provider of full-suite healthcare software applications and services in the MENA region, including Thimar Enterprise Resource Planning (ERP) and specialized healthcare solutions. Since RED's investment in 2010, the company has signed ERP deals at two of the most important healthcare organizations in the region: Sidra Medical and Research Centre, Doha and Cleveland Clinic, Abu Dhabi and signed a Business Intelligence implementation In 2011, RED signed its first deal for Hamad Medical Corporation in Doha. In 2011, the company focused on developing a strong and lean deal in Palestine with an Thimar, a RED partner company professional service team and set up a full support team in Jordan. It also strengthened its product portfolio investment in Nature's Produce by establishing a new partnership with CBORD for dietary software solutions and extended its exclusivity for Agricultural Investment and arrangement with Lawson, a global leader in healthcare technology, till 2017. Marketing (Thimar). Thimar was established by the Nussiebeh family in 2008 focusing on Gallus, Tunisia herb and fresh produce farming Food Processing in the Palestinian territories. The Nussiebeh family has over Gallus is an integrated poultry processing business engaged in the rearing of poultry and the production of 70 years of experience in the chicken and turkey-based food products. Since RED's investment in the company, Gallus has almost doubled farming and agriculture sector its revenues from USD 23.3 million in 2009 to USD 45.9 million in 2011. The company has built up its operations in Palestine. The family started by recruiting a Business Development Manager, Chief Financial Officer and two senior industry experts as with planting bananas and citrus consultants. In the process, the business has invested in new product lines thereby transforming the company to fruits and with time became an integrated food processor engaged across the value chain. Gallus operates best in class industrial assets that one of the main producers and meet European quality processing requirements and is the second largest player in the overall Tunisian poultry exporters of these fruits. market with increasing exports to neighboring countries. Today, Thimar has expanded its herb farm to over 3 times its 2010 Opalia Pharma, Tunisia capacity, and currently plants Pharmaceuticals and cuts over 8 different varieties of herbs that are exported to Opalia Pharma is a pharmaceutical company that makes generic drugs under its own brand name. It specializes the United States and Europe. in liquid and semi-liquid dosage forms and its therapeutic areas of expertise include dermatology, the respiratory Thimar has also ventured into system and the cardiovascular system, among others. Post investment, RED has been working closely with the cultivation of fresh produce, the company and facilitated the appointment of senior industry experts to Opalia's Board to provide strategic serving the Palestinian market advice. RED has also supported the company in implementing a new accounting and procurement system to with the intent to export to the improve financial reporting and operational efficiencies. Opalia Pharma is also in dialogue with RED to identify larger markets of the GCC. new markets for its products in Algeria and the GCC. Thimar envisages further Oksa Maroc, Morocco expansion in both its herb Upon completion of this project, RED's investment, together Utility Services and fresh produce farm. Thimar will have reclaimed with its regional presence In 2012, the company plans about 500,000 square meters and experience, will support Oksa SA (Oksa) is an electrical services company operating in three main areas: improvement of the performance to establish post harvest plants of land and extended irrigation, Thimar's market expansion. RED of electrical networks through the detection of fraud and technical problems, preventive maintenance of and invest in further upgrades water and electricity networks is driving the institutionalization electrical transformers through chemical analysis and diagnosis of electrical networks through infrared cameras. to its infrastructure in a move to remote plots in the village of the business by converting it In 2011, a new CEO was identified with the objective of developing new business activities and revamping that will reduce its dependence of Oja. With unique product into a corporate structure with the management structure. Oksa further expanded its markets by winning a contract for the creation of a on intermediaries and service qualities, ideal climate conditions modern systems and processes fraud detection department within an electricity distribution company in Abidjan (Ivory Coast). RED is also providers. The company and an experienced labor force, that will improve controls, drive facilitating discussions between Oksa and an Abraaj partner company in Pakistan for the provision of various plans to create 15 new full Thimar possesses a competitive performance standards and optimization solutions. time jobs with contract labor advantage over its international enable management to keep envisaged to increase from 45 counterparts as it continues to pace with the rapid expansion workers as of 2009 to 240 command premium prices over of the operations. Emteyco, Morocco workers by 2013. Thimar will its local competitors. Utility Services also create approximately 30 new jobs for women from the Emteyco is an electrical engineering group that operates in the following areas: low and medium voltage surrounding villages. electrification, production of electrical towers (metal and concrete) and production of metal parts for construction and turn-key projects. Since RED's acquisition, the company has successfully managed to diversify its offering from pure electrification services to turn-key project services, and has accordingly expanded its client base.

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Thought Unimed Leadership In April 2011, the Kantara Fund acquired an influential Unimed, a RED partner company minority stake in Unimed, a leading generics pharmaceutical company in North Africa.

Established in 1989 by Ridha Charfeddine, Unimed is a market leader in the production of branded sterile form products covering mainly liquid injectables, powder injectables and eye drops. In addition to extensively covering the domestic market through sales to hospitals and private drug stores, Unimed exports its products to 17 countries in North Africa, West Africa, Europe and the Middle East. Unimed is also engaged in contract manufacturing for international pharmaceutical firms such as Pfizer, Mylan and Thea, to name a few.

Unimed generics are manufactured in compliance with best in class European quality certification standards, including ISO 9001 and AFSSAPS (Agence Francaise de Securite is crucial to the development of management and leading Sanitaire des Produits de Sante) the Tunisian economy as it helps products with a high growth at the company's production keep drug prices affordable trajectory. The investment facilities in Sousse, Tunisia. The and accessible and creates in Unimed has enabled the company employs more than employment opportunities firm to expand its production 350 people, 190 of whom are for skilled labor at a time of capacity, maintain its leadership women, and includes qualified rising unemployment. position in quality and product pharmacists and engineers. development through ambitious The acquisition of a significant capital expenditure plans and The generics pharmaceutical stake in Unimed by the Kantara recruit skilled and professional industry in Tunisia is one of the Fund is consistent with its staff to support its growth plans. most dynamic in North Africa strategy of taking influential and is growing at 15% per year minority positions in small providing upto 50% of the needs and mid-cap companies of the local market. The industry that combine operational

78 79 Thought Leadership Thought Leadership

From theory to reality why ESG matters

Ruwwad, an Abraaj Community Partner Organization

" hat I see is a crisis of The findings of a 2011 McKinsey A recent study - The Impact of a They were left in little doubt: "The leadership – a lack of survey, The Business of Corporate Culture of Sustainability argument about sustainability is imagination in looking Sustainability, would suggest on Corporate Behavior and over. It is the key to creating value at old problems with that an increasing number of Performance - by Robert G Eccles, for shareholders and all other fresh eyes – and a lack of urgency corporate executives believe in the Ioannis Ioannou and George stakeholders over the long-term, as the clock keeps ticking down." positive contribution sustainability Serafeim at Harvard Business thus ensuring the sustainability of These are the words of UN programs can make to short and School, tracked the performance the company itself." Secretary-General Ban Ki-moon, long-term business value. of 180 companies over 18 years. It as he addressed a corporate found those who had embedded Beyond financial returns sustainability summit in early 2012. But as McKinsey's Sheila Bonini sustainability within their practices and Stephan Görner state, how "significantly outperform their For Abraaj, focusing on the Set against the backdrop of the companies interpret that value counterparts over the long-term, community has been at the very volatile financial markets of recent can be very different: "Companies both in terms of stock market and heart of our approach since our years, stakeholders – investors, can choose to see this agenda accounting performance." foundation in 2002. We believe we legislators, partners, customers, as a necessary evil – a matter of have sought to show leadership citizens and employees – compliance or a risk to be managed The authors found that what from the outset in how our industry Businesses that undertake the ESG policies and/or principles in increasingly demand reassurance while they get on with the business they deemed "high-sustainability needs to contribute to society and path of engagement and open place within their firms, up from that businesses are structured for of business – or they can think companies" paid particular integrate effectively and deeply communication as outlined by just 24% in 2009. sustainable and long-term growth. of it as a novel way to open up attention "to their relationships with all of its stakeholders. new business opportunities while with stakeholders – such as Serafeim and his colleagues' study do so at the very least with the The attitude is shared in growth For businesses in geographies creating value for society." employees, customers and NGOs Instances such as our partnership understanding that it is in their markets, according to the where others factors come into representing civil society – through with Endeavor, the global own self-enlightened interest, and EMPEA/Coller Capital Private play – such as chronic (even active processes of engagement." organization that has helped at the very best to contribute to a Equity Survey, where 78% of LPs graduate) unemployment, wealth pioneer approaches to maximizing better world. outside North America say ESG distribution gaps and lack of the skill sets of high-impact considerations materially impact social empowerment – there is an entrepreneurs, show our ability to But just as companies have to their fund selection process. even greater role to play to nurture a culture of entrepreneurial adjust to the new reality so we transform financial into social and Abraaj training hours partnership in our markets. economic impact. believe private equity must as an The rise in recruitment of ESG industry underline its commitment specialists to work in-house is on ESG compliance and Our work with Ruwwad, to eradicate short-termism and further evidence of an industry Governance, creating shared value established to assist disadvantaged value creation in 2011 related perception risks. On paper paying more than lip service. Pre- and what makes a good business youth (initially in Jordan), enhances at least the signs of new intentions, investment, these firms want to good are principles that are being lives in marginalized communities. if not necessarily attitude, among include ESG criteria to identify constantly reappraised. At Abraaj, This ability to identify and some of the leading global firms potential risks and opportunities we believe global business is at then nurture high-value social are encouraging. before taking the plunge. a tipping point in recognizing partnerships is a central its wider responsibilities and theme in how we execute our PwC's 2011 survey of 17 international In 2011, we enlisted Ahead of we firmly believe that collective social programming. and sustained action can deeply private equity companies revealed the Curve, an Egypt-based transform the landscape in many that 93% of respondents believe consultancy to design an ESG of our markets. ESG measures can be a source screening process to be applied of value. at the due diligence phase of each of our investments. This includes According to a survey from the investments through Abraaj's BVCA, which has more than 500 Riyada Enterprise Development member firms worldwide, more (RED) platform, which invests in 80 than 60% of private equity and high growth small and mid-cap venture capital firms now have companies across the region.

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Current status of ESG compliance and value creation reviews and assessments

2011 marked an intense RED and Kantara Abraaj Capital to the pipeline of qualified retail collaboration between ASSET and management executives coming the Firm's Executive Committee out of academic institutions Global Reporting Initiative to support the integration of in MENASA. ESG within the Firm through the There are more than 900 signatories to the UN Principles for Responsible Investment (PRI), managing assets up to US$30 trillion, and this includes provision of extensive training, 29% Given Abraaj's partnerships with an updated ESG screening 16.6% institutions such as the American at least 100 private equity firms. process and drafting of an University in Cairo (AUC), that goal internal BoD handbook on ESG. is realistic. As Al Gore and David In its report on its first five years, the PRI suggested that "the tanker is The development of an impact Blood attest in their manifesto turning": 71% of signatories asked companies to integrate ESG information measurement study to capture for sustainable capitalism, a into their financial reporting. 71% green screen and partner Abraaj's wider economic and social 83.4% environmental and new way of thinking must be all- company audit (HR inclusive) footprint is also under way and will governance due diligence encompassing: "Such sustainable Many of these are using the Global Reporting Initiative (GRI) to report on be completed in 2012. The Firm's (non HR inclusive)* capitalism applies to the entire their environmental, social and governance commitments. The GRI, which ESG practice is now embedded investment value chain – from provides guidance on sustainability and integrated reporting, will launch in the Portfolio Management entrepreneurial ventures to large its fourth generation of such advice, the G4, in 2013. and Operations Group and is public companies, seed-capital overseen by a team of dedicated providers to institutional investors, and senior professionals. employees to CEOs, activists level through to our partner the CEO, to establish regional to policymakers. It transcends standards. Those standards don't Our ambition is to instill this Research by consultancy Mercer in companies. We see this crucial leadership in ESG practices within borders, industries, asset classes mean box-ticking exercises in mentality in our partner companies 2011 revealed that only 9% of more issue of management as core the IT enterprise sector, within and stakeholders." transparency, risk and corruption, so that even after divestment, the than 5,000 investment strategies to maintaining our position as twelve months. but the ability to act with boldness philosophy is sustainable and can in their database achieved the pioneers within the industry. Building the esg network and imagination – to think of grow. By doing this, we hope to highest ESG ratings. But the same Meanwhile, Spinneys (a premium new ways to engage, to go create a network of hundreds of Mercer study showed that private In light of this commitment, supermarket retailer in the The question for every business beyond investment. companies, dedicating capital and equity had the highest proportion Abraaj developed an Ethical MENA region) has also taken and industry is how to turn a time by hundreds of senior and of highly rated ESG strategies Framework for Investment for part in Abraaj's ESG assessment sustainable philosophy into action, For us that has meant the talented professionals who can of any asset class, led by those each of its partner companies. process and begun work on an from company to company, from principle of 5+5+5, as mentioned address the social issues hindering companies in growth markets. Based in part on the United Operational Management Trainee country to country, from region to earlier in this Annual Review. progress in their communities. Nations Global Compact (the 10 program, as an extension of its region. Answers lie in bringing a This means dedicating 5% of the Given the growth of the private universally accepted principles in current university outreach and more joined-up and collaborative Firm's management fee income Abraaj is fortunate to have a equity industry in the economies the areas of human rights, labor, work placement programming in working approach. For an industry towards developing sustainable position of leadership in a region that will dominate the world's environment and anti-corruption), Lebanon. Over time, we see real to play a seminal role, collective and philanthropic partnerships, of economic vibrancy. With that growth over the next decade, this the Ethical Framework for potential in the discipline of retail and participatory action is key. with zero impact on our LP Funds, comes a responsibility to lead and is either a promising sign or an Investment was created to guide management becoming university and harnessing five days of each to look at the world's new realities overdue wake-up call. partner companies towards level course material and leading In a region of developing social employee's time, driven by a core with fresh and open eyes. implementing ethical principles awareness, and one that is hungry team of professionals working Portfolio principles throughout their activities. for innovation and new products, within our ASSET program. there is a great need to instill Commitment to sustainability At OMS (an IT enterprise solutions and evolve best practice ethical means a responsibility to drive and consulting services company) principles adopted at a group we have begun the first steps, through the setting up of an ESG Task Force, fully empowered by

*Abraaj Capital Limited applies a materiality sensitive approach in which the environmental component for due diligence is only applied to companies with relevant environmental materiality.

82 83 Thought Leadership Thought Leadership

Redressing the balance a new world order

icture three contrasting gave the world a new acronym No wonder Robert Ward, Global There is significantly more to the scenes: Sir Richard Branson in his seminal paper on growth Forecasting Director for the opportunity than Brazil, which examining figures inV irgin's markets, Building Better Global Economist Intelligence Unit (EIU), understandably has dominated the Poffice in Switzerland; Economic BRICs – but less prefers to talk about the CIVETS headlines given its role within the executives in the Bahrain offices considered and thought through of Colombia, Indonesia, Vietnam, BRIC acronym. Subsequently, the of BNP Paribas reviewing growth are the world's other pivot points. Egypt, Turkey and South Africa. country has been invited to host opportunities in the Middle East; He says: "These economies are the 2014 FIFA World Cup and 2016 China's state-backed industrial In 2011, the BRIC countries invited promising because they have Olympic Games. giants analyzing where to source South Africa to join their club, and sophisticated financial systems, the raw materials they need to drive now O'Neill prefers to talk about controlled inflation and a soaring Just as the Chinese government their growth. the Next 11 of growth markets, young population. Never bet used the 2008 Olympics as its which include Nigeria, Mexico and against demographics." own coming out party to the All three are proof positive that the Indonesia among their number. world, many foresee the scale of world is finding a new equilibrium It may have taken 500 years, According to the EIU, CIVETS will opportunity in the region being and that we are witnessing a and the rise and fall of empires have healthy yearly growth rates of projected to the world around shift in the tectonic plates of the but the economic, political and 4.9 percent for the next 20 years, these sporting events. global economic landscape. In cultural power that had rested while G7 countries are predicted an increasingly interconnected predominantly with the Northern to have only 1.8 percent yearly There are, however, no shortage of world, each country and region is Hemisphere or the "western world" growth rates. It's important to bear other centers where opportunities meant to deploy its competitive is shifting. in mind that economic expansion are growing. From smaller style advantage to stay ahead. In in growth markets is expected economies such as Costa Rica the current cycle, it is growth By 2020, Euromonitor predicts to outpace their counterparts in and Panama, which hug both economies with their formidable that five 'emerging' countries, the 'developed' world regardless the Atlantic and Pacific Oceans armory of natural and human including Mexico, will be in the list of whether developed economies through to Mexico, Argentina, resources that are dominating of the top 10 largest economies. experience healthy growth Chile, Colombia and Peru, the discussions at the board table. Of the 423 cities that together are or recessions. growth flows are significant. Dialing up growth in Latin America: A Virgin Mobile case expected to account for more than study At the end of 2011, Branson told his 45 percent of global GDP growth The Central and Latin The region has many entrepreneurs leadership team to head to Latin between 2007 and 2025, none are American decade? who can inspire, grow businesses Mobile phone penetration exceeded 100 percent in Latin America in 2011. America for a new generation of in Europe or the US. and make a positive impact on This does not mean everyone in the region has a phone – in fact, there are opportunities. BNP Paribas has The region has undergone a period their societies. Perhaps Carlos Slim still more than 150 million people without – but the majority have at least merged its African operations The McKinsey Global Institute's of economic stabilization since the is the continent's greatest. Born to one and the numbers with two or more have grown rapidly. with its Middle Eastern ones to (MGI) report, Urban world: debt crisis of the 1980s paved the a Lebanese father, who came to follow the growing trade flows Mapping the economic power of way for better fiscal policies and Mexico in 1902 where he met Slim's This is the backdrop for Virgin Mobile, the telecoms arm of the world- between the regions. And China's cities, notes that only 600 urban reduced government intervention. mother and whose own parents famous branded firm, as it seeks to grow market share throughout the endless quest for resources drives centers currently generate about Strengthened governance of the came from the Levant, he has region. It has announced plans to launch networks in Colombia and Chile its demand for Australasian and 60 percent of global GDP. By financial system, more flexible developed a series of businesses in 2012, focusing its efforts on youth markets in countries with favorable African iron ore. 2025 that won't change, but 'this exchange rates, and a rise in the to become the world's richest man. demographics. group will have a very different middle class – according to the UN Most people have read or heard membership.' According to MGI, it has increased by 56 million since When Slim overtook Bill Gates to Peter Macnee, Chief Executive of Virgin Mobile, says: "When you have a about (or indeed experienced!) 136 new cities are expected to 1999 – make the promise of Central take the mantle, it was the first high mobile penetration, the challenge for big network operators is to be an eastward movement in the enter the top 600, all of them from and Latin America particularly time in two generations that the all things to all people. We want to focus on one thing: the youth market economic center of gravity– it's growth markets. exciting for investors. accolade had gone to someone that is driving the future in Latin America." now a decade since Jim O'Neill from outside the United States.

What is particularly exciting for the region's entrepreneurs is the growth of domestic and

84 85 Thought Leadership Thought Leadership

regional markets to target. At one rising productivity together with potential to maintain a rapid rate improving corporate governance. During that period, BRIC-Africa Inclusive growth time, the domestic absorptive favorable demographics and, of economic expansion, averaging Improvement leads to greater trade grew eightfold, to US$ 166 capacity in these markets was therefore, a faster growth rate real GDP growth of 5.4 percent a investor acceptance and feeds a billion. However, trends suggest The tectonic shift in the world simply not large enough to build than the world average. Its local year in 2011-30." virtuous circle. that Africa will be less reliant on economy as these growth significant businesses. No more. rival, the Philippines, is slated to commodities for future growth. economies come to the fore is Demographics of the region are follow in its footsteps, with the The EIU also notes, however, that Another of the Next 11, Turkey, has For example, its population is "the most significant development supporting spurting economies OECD predicting an average of "steady progress in improving shown the way. Recent economic the world's fastest growing and of our generation," says O'Neill. "It that also have the ability to increase 4.6 percent GDP growth between the business environment, and progress – Turkey's GDP grew 8.9 youngest, with the number of is hard to see a parallel in recent the volume and value of trade with now and 2015, while Malaysia is notably in reducing corruption, percent in 2010 – can be attributed working-age Africans set to more memory, not since the first days each other. It is a classic example of aiming to achieve an annual GDP will encourage investment and at least in part to structural reforms than double to 1.1 billion by 2040, of the US starting to develop. a virtuous circle of growth that will growth of 6% until 2020 in order increase productivity." introduced early in the decade that which is expected to give rise to Hundreds of millions of people are help fuel the development of many to meet its target of becoming a enhanced the role of the private increasingly consumer-oriented being taken out of poverty and small and mid-cap companies in high-income nation. Indonesia, like other growth sector, boosted the efficiency of economies. The African continent the world economy growth trend decades to come. markets, will have a huge impact the financial sector and put the has rising stars – among them, is actually rising because of what is With a population of 238 million, on its region if it can fulfill its social security system on a sound Nigeria, with 20% of Africa's going on in these countries." One of the biggest issues is that the Indonesia has long been touted potential, which in turn relies foundation. The reform process population and enviable growth inflow of capital, which is thanks to join the list of the world's on successful reform of political has been encouraging and the prospects bolstered by strong But it certainly won't be an partly to the strong demand for biggest economies. In its long- systems and bureaucracies. government has set the ambitious domestic demand. unfettered march to the sunny the region's commodities, has put term outlook for the country, the Political change has its biggest goal of making Turkey's economy upland hills. There will inevitably significant strains on exchange EIU outlined why: "Given that it impact when reforms filter down one of the world's 10 largest by There remain issues of governance be many obstacles along that path, rates. This, in turn, puts pressure will start from a relatively low to businesses in the form of 2023, the 100th anniversary of the and reform but, despite the political not least the growing inequalities on non-commodity exporters. level of GDP per head, it has the doing away with corruption and Republic, with a GDP target for obstacles, McKinsey still believes in the distribution of wealth and It will be important that reform that year of US$ 2 trillion. that the development path is too the ability of politicians to provide continues in order to keep this part impressive to ignore. One of the stability for their citizens. The of the economy competitive. Africa comes of age notable statistics it presents is that overriding challenge for each African telecom companies since nation, whether in Africa, Latin SEA change This Annual Review has already 2000 have added 316 million new America or South-East Asia, covered the opportunities within subscribers – more than the entire is to achieve a model of The economies of South-East Asia With the globe turning Africa. The continent's improved US population. inclusive growth. share some historical parallels prospects were also recognized with Latin America. Lessons learnt East and South, perhaps your by a widely cited McKinsey Global Today one can argue the world's from the 1997-1998 economic crisis Institute report, Lions on the center of gravity sits somewhere enabled these countries to emerge children will be seeking their Move, which concluded that the in the Middle East. It provides a stronger from the global recession opportunities in Africa as a whole perfect location to interact with so of 2008. Continuing political reform fortunes elsewhere are comparable to those in the much of the world. But in 20 to 30 in a notoriously conservative region BRIC economies. years? With the globe turning East and growing cooperation among and South, perhaps Branson – and the Association of Southeast The progress has been impressive your children – will be seeking their Asian Nations (ASEAN) provides and the potential is astonishing, fortunes elsewhere. potential investors with optimism. according to data from the World Bank, McKinsey and others. Africa The region has much else in was the third fastest growing its favor, too. Indonesia made continent in terms of GDP growth the cut as one of the Next 11 in 2000-2008, led principally by a economies because, like the other commodities boom. 10, it is most likely to experience

86 87 Annex run by independent institutions, About the Report are not consolidated in Abraaj Capital Holdings Ltd.'s financial our stakeholders will also have the Scope statements. In addition to the opportunity to offer feedback and GRI Disclosure & This Report marks our second parameters covered last year, recommendations to us. release of an integrated reporting this Report details our initial solution that combines data on our approach to analyze, mitigate Guidelines & reporting principles financial, economic, governance, and/or manage the extended We follow the GRI G3.1 guidelines Performance social and environmental impact of our investments. A key in report issuance and, as such, performance. The incorporated focus in 2011 was to better evaluate self declare this Report as level B+ data is measured and based our extended impact through with third party limited assurance Indicators on our performance in 2011, assessing our partner companies. carried out by KPMG. with the exception of economic To this end, we partially met our The Global Reporting Initiative (GRI) framework sets out the principles impact data which is based on commitment for last year through Note to readers and performance indicators that organizations can use to measure and the completed financial audit of conducting ESG assessments of 6 Abraaj Capital Holdings Ltd. is consolidated accounts carried out of our partner companies.* the holding company at the apex report their economic, environmental and social performance. by KPMG for the financial year of the Abraaj Capital group of ending December 31, 2010. Dissemination companies. Abraaj Capital Ltd. The Report is a reflection of ("ACLD") is a holding company Parameters our commitment to report to within the group, licensed by the This Report covers in full the stakeholders on an annual basis. Dubai Financial Services Authority operations, policies and systems With this in mind, the Report ("DFSA") to provide investment of Abraaj Capital Holdings Ltd. will be disseminated to all of our services in or from the Dubai and its consolidated subsidiaries. stakeholders and will be available International Financial Centre. Performance indicators exclude upon request. Through direct information from Funds, which stakeholder consultation sessions

Abraaj Capital Values

Personal and professional Striving for excellence appropriate mitigation. We reward integrity We take great pride in the hard work and commitment Our reputation and integrity is the professional superiority of our through compensation systems key to our success, and we adhere people with continuous learning that are aligned to long-term in an uncompromising way to being a core asset of our business reward structures and that mirror the highest, globally recognized at all levels. We respect and our business model. professional and ethical standards empower our colleagues; we focus at all times and without question. on our core competencies; we Engaging our stakeholders uphold teamwork; and we excel as We blend strategic philanthropic Commitment to value creation role models – while retaining our capital, our personal time and the Pursuing profitable businesses humility at all times. Firm's thought leadership initiatives is the key factor in remaining to act as catalysts for sustainable relevant in our industry. We Rewarding professional development and inclusive growth pursue a relentless process to entrepreneurship in the communities that we touch. drive significant long-term value We encourage strong conviction for our investors in the businesses and business creativity in our All of the above, while having fun we manage – while retaining people and the taking of calculated As each of us defines it market leadership in our areas of risk to produce superior returns, for ourselves! expertise – through continuously within a rigorous framework of out-performing our competitors.

*The ESG assessment is a rigorous review exercise that maps a company's governance, social, environmental, labor and product responsibility performance against global, national and industry standards. The review is designed to analyze and establish a road map for enhanced compliance and value creation through an implementation program.

88 89 GRI 3.1 Disclosure and performance indicators 3.7 State any specific limitations on the −− About the Report 89 Full scope or boundary of the report Indicator Description Section / Comment Page Level of 3.8 Basis of reporting on joint ventures, −− About the Report 89 Full Reporting subsidiaries, leased facilities and 1. Strategy and Analysis outsourced operations 1.1 Statement from the most senior −− Group Chief Executive 9-14 Full 3.9 Data measurement techniques and The formula used for the CO2 107 Full decision-maker of the organization Officer's Review the basis of calculation, including calculator is based upon the about the relevance of sustainability to assumptions and techniques official 2011 guidelines from the the organization and its strategy United Kingdom's Department 1.2 Description of key impacts, risks and −− Group Chief Executive 9-14 Full of Environment, Food and opportunities Officer's Review Rural Affairs (Defra), originally −− Forging Ahead: Tapping the 18-23 published in 2001 Markets of Asia and Africa 3.10 Explanation of the effect of any re- None - Full 2. Organizational Profile statements of information provided in earlier reports and the reason for such 2.1 Name of the organization −− About Abraaj Capital 2 Full re-statement 2.2 Primary brands, products and/or −− About Abraaj Capital 2 Full 3.11 Significant changes from previous −− About the Report 89 Full services reporting periods in the scope, 2.3 Operational structure of the −− About Abraaj Capital 2 Full boundary or measurement methods organization, including main divisions, −− Map applied in the report operating companies, subsidiaries and 3.12 Table identifying the location of the −− GRI Disclosure & 90-100 Full joint ventures standard disclosures in the report Performance Indicators 2.4 Location of organization's −− About Abraaj Capital 2 Full 3.13 Policy and current practice with −− About the Report 89 Full headquarters regards to seeking external assurance 2.5 Number of countries where the −− About Abraaj Capital 2 Full for the report organization operates −− Map 4. Governance, Commitments and Engagements 2.6 Nature of ownership and legal form −− About Abraaj Capital 2 Full 4.1 Governance structure of the −− Governance & Compliance 105-106 Full −− About the Report 89 organization, including committees 2.7 Markets served (including geographic −− About Abraaj Capital 2 Full under the highest governance body breakdown, sectors served and types −− Map responsible for specific tasks, such of customers/beneficiaries) −− Our Investments 46-78 as setting strategy or organizational oversight 2.8 Scale of the reporting organization −− About Abraaj Capital 2 Full −− About the Report 89, 103, 4.2 Indicate whether the chair of the No 106 Full 104 highest governance body is also an executive officer 2.9 Significant changes during the −− Board of Directors' 3 Full reporting period regarding size, Statement 9-14 4.3 For organization that has a unitary −− Governance & Compliance 105-106 Full structure, ownership and changes in −− Group Chief Executive board structure, state the number of the operation Officer's Review members of the highest governance body that are independent and /or 2.10 Awards received in the reporting −− About Abraaj Capital 2 Full non-executive members period 4.4 Mechanisms for shareholders −− Governance & Compliance 106-107 Full 3. Report Parameters and employees to provide 3.1 Reporting period (e.g., fiscal, calendar, −− About the Report 89 Full recommendations or direction to the year) for information provided highest governance body 3.2 Date of the most recent previous July 2011 (Version 2.0) - Full 4.5 Linkage between compensation for None - Full report members of the highest governance 3.3 Reporting cycle (annual, biennial, etc.) −− About the Report 89 Full body, senior managers and executives (including departure arrangements), 3.4 Contact point for questions regarding Frederic Sicre, Partner - Full and the organization's performance the report or its contents ([email protected]) (including social and environmental Mitali Atal, VP performance) ([email protected]) 3.5 Process for defining report content −− About the Report 89, 100 Full 3.6 Boundary of the report −− About the Report 89 Full

90 91 4.6 Process in place for the highest −− Governance & Compliance 107 Full 4.13 Membership in association (such as −− Asset: Shaping the 36 Full governance body to ensure conflicts of industry associations) and/or national/ Stakeholder Model interest are avoided international advocacy organizations −− Stakeholder Engagement 102-103 4.7 Process for determining the −− Asset: Shaping the 36-41 Full in which the organization: * Has qualification and expertise of the Stakeholder Model positions in governance bodies; * members of the highest governance −− From Theory to Reality: 80-83 Participates in projects or committees; body for guiding the organization's Why ESG Matters * Provides substantive funding beyond strategy on economic, environmental routine membership dues; or * Views and social topics membership as strategic 4.8 Internally developed statements of −− Abraaj Capital Values 89 Full 4.14 List of stakeholder groups engaged by −− Asset: Shaping the 36-41 Full mission or values, code of conduct the organization Stakeholder Model and principles relevant to economic, −− Stakeholder Engagement 102-103, environmental and social performance 107 and the status of their implementation 4.15 Basis for identification and selection of −− Asset: Shaping the 36-41 Full 4.9 Procedures of the highest governance −− Asset: Shaping the 36-37 Full stakeholders with whom to engage Stakeholder Model body for overseeing the organization's Stakeholder Model −− Stakeholder Engagement 102-103, identification and management of −− Management Approach 101-102 107 economic, environmental and social 4.16 Approaches to stakeholder −− Stakeholder Engagement 102-103 Full performance engagement, including frequency 4.10 Processes for evaluating the highest None - Full of engagement by type and by governance body's own performance, stakeholder group particularly with respect to 4.17 Key topics and concerns that have −− Stakeholder Engagement 102-103 Full economic, environmental and social been raised through stakeholder performance including relevant risks engagement, and how the organization and opportunities, and adherence or has responded to those key topics compliance with internationally agreed and concerns, including through its standards, codes of conduct, and reporting principles Economic Performance Indicators 4.11 Explanation of whether and how the Abraaj follows a risk based Full DMA EC Disclosure on Management Approach EC precautionary approach or principle is approach to due diligence addressed by the organization and where appropriate Aspect: Economic Performance Full the company undertakes EC1 Direct economic value generated Financial Results 103 Full independent assessments. A and distributed, including revenues, more structured approach is operating costs, employee followed for RED - the small compensation, donations and other and mid-cap (SMC) division of community investments, retained the business. An ESG screen is earnings and payments to capital applied and this addresses and providers and governments explores ways to mitigate risks EC2 Financial implications and other None measured - Full associated with ESG factors risks and opportunities for the −− Asset: Shaping the 36 organization's activities due to climate Stakeholder Model change −− From Theory to Reality: 80-83 Why ESG Matters EC3 Coverage of the organization's defined Financial Results (Employee 103 Full benefit plan obligations Salaries and Benefits) 4.12 Externally developed economic, −− Asset: Shaping the 36 Full environmental and social charter, Stakeholder Model EC4 Significant financial assistance received None - Full principles or other initiatives to −− Management Approach 101-102 from government which the organization subscribes or endorses

92 93 Aspect: Market Presence Full Aspect: Water Partial EC5 Range of ratios of standard entry level The comparison to a - Full EN8 Total water withdrawal by source The current lease agreements - Partial wage compared to local minimum minimum wage level is of low do not provide access to wage at significant locations of materiality to Abraaj Capital. itemized data relating to operation The company operates in a energy and water. To the business sector in which the extent possible, we are required work force is primarily committed to working with composed of professionals and the DIFC to collect data and industry experts. To this end, establish better measurement the company provides very processes competitive salaries Aspect: Biodiversity Non EC6 Policy, practice and proportion of Suppliers 108 Full Material spending on locally based suppliers at Aspect: Emissions, Effluents and Waste Full significant locations of operations EN17 Other relevant indirect greenhouse gas Environmental Performance 108 Full EC7 Procedures for local hiring and Abraaj Capital promotes - Partial emissions by weight proportion of senior management recruitment of local nationals hired from the local community at in the region where it operates. Aspect: Products and Services Partial locations of significant operation However, the management EN26 Initiatives to mitigate environmental Currently we are in the process - Partial recognizes the need for impacts of products and services, and of studying our extended specialized experience and extent of impact mitigation impact and we commit to hence hires the most qualified reporting on this by 2012-2013 employees, regardless of Aspect: Compliance Full nationality EN28 Monetary value of significant fines None - Full Aspect: Indirect Economic Impacts Partial and total number of non-monetary EC8 Development and impact of −− Our Investments 51, 59, Partial sanctions for non-compliance with infrastructure investments and services 63, 65, environmental laws and regulations provided primarily for public benefit 68 Aspect: Transport Full through commercial, in-kind or pro bono engagement EN29 Significant environmental impacts Environmental Performance 108 Full of transporting products and EC9 Understanding and describing Currently we are in the process - Partial other goods and materials used significant indirect economic impacts, of studying our extended for the organization's operations, including the extent of impacts impact and we commit to and transporting members of the reporting on this by 2012-2013 workforce Environmental Performance Indicators Aspect: Overall Non DMA EN Disclosure on Management Approach EN Material Aspect: Materials Partial Labor Practices and Decent Work Performance Indicators EN1 Materials used by weight and volume Environmental Performance 108 Partial DMA LA Disclosure on Management Approach LA EN2 Percentage of materials used that are None - Full Aspect: Employment Full recycled input materials LA1 Total workforce by employment type, Workforce 104 Full Aspect: Energy Partial employment contract and region EN4 Indirect energy consumption by The current lease agreements - Partial broken down by gender primary energy source do not provide access to LA2 Total number and rate of new Workforce 104 Full EN5 Energy saved due to conservation and itemized data relating to employee hires and employee turnover efficiency improvements energy and water. To the by age group, gender and region extent possible, we are LA3 Benefits provided to full-time Does not apply. We do - Full EN6 Initiatives to provide energy-efficient committed to working with employees that are not provided to not have any part-time or or renewable energy-based products the DIFC to collect data and temporary or part-time employees, by temporary employees for this and services, and reductions in energy establish better measurement significant locations of operations reporting period requirements as a result of these processes initiatives EN7 Initiatives to reduce indirect energy consumption and reduction achieved

94 95 Aspect: Labor/Management Relations Full Aspect: Diversity and Equal Opportunity Full LA4 Percentage of employees covered by Collective bargaining - Full LA13 Composition of governance bodies and Workforce 105-106 Full collective bargaining agreements agreements are not required breakdown of employees per category by the UAE national labor according to gender, age group, laws where Abraaj Capital is minority group membership and other headquartered indicators of diversity LA5 Minimum notice period(s) regarding A minimum of a month's notice - Full LA14 Ratio of basic salary and remuneration The ratio is 1:1 across all - Full operational changes, including whether period is required to terminate of men to women by employee employees and grades and it is specified in collective agreements any employment contract, category, by significant location of there is no difference between unless otherwise stated in the operations genders employment contract. For Human Rights Performance Indicators changes in policies, a minimum of 7 days will be given for DMA HR Disclosure on Management Approach HR changes to be applicable Aspect: Investment and Procurement Practices Full Aspect: Occupational Health and Safety Full HR1 Percentage and total number of −− From Theory to Reality: 82 Full LA6 Percentage of total workforce Workforce 105 Full significant investment agreements Why ESG Matters represented in formal joint that include human rights clauses or management-worker health and safety that have undergone human rights committees that help monitor and screening advise on occupational health and HR2 Percentage of significant suppliers Partner company screening - Full safety programs and contractors that have undergone has been the focus till date. LA7 Rates of injury, occupational diseases, There have been no incidents - Full screening on human rights and actions However, developing and lost days and absenteeism, and during this reporting period taken implementing a suppliers number of work-related fatalities by screen is a priority for 2012 region and by gender HR3 Total hours of employee training on −− Asset: Shaping the 36 Full Aspect: Training and Education Partial policies and procedures concerning Stakeholder Model aspects of human rights that are −− From Theory to Reality: 80 LA9 Health and safety topics covered in Abraaj Capital operates in - Full relevant to operations, including the Why ESG Matters formal agreements with trade unions a safe office environment percentage of employees trained within the DIFC. Five staff members are certified in basic Aspect: Non Discrimination Full firefighting and basic first aid HR4 Total number of incidents of There have been no incidents - Full including CPR, by Eurolink discrimination and actions taken during this reporting period Safety Services, which is Aspect: Freedom of Association and Collective Bargaining Full approved by the Ministry of Labor and Social Affairs HR5 Operations identified in which the right Abraaj is a signatory to the UN - Full to exercise freedom of association Global Compact and abides LA10 Average hours of training per year per Workforce 105, E.I. Full and collective bargaining may be at by its principles. Labor rights employee by gender, and by employee table 105 significant risk, and actions taken to is one of the factors taken into category support these rights consideration during the due LA11 Programs for skills management and −− Our People, Our Culture 43-44 Partial diligence process. However, in lifelong learning that support the most GCC countries, collective continued employability of employees bargaining is prohibited by and assist them in managing career host country law but Abraaj endings ensures its employees are well LA12 Percentage of employees receiving 100% of professional staff - Full looked after. Employee welfare regular performance and career- is a priority for the Firm development reviews

96 97 Aspect: Child Labor Full SO3 Percentage of employees trained in Abraaj Capital holds 100% - Full HR6 Operations identified as having Abraaj has zero tolerance - Full organization's anti corruption policies training coverage on anti significant risk for incidents of child towards child labor and there and procedures money-laundering. This year labor and measures taken to contribute are no operations at the Abraaj new programs are being to the elimination of child labor level which have significant launched that include anti- risks of incidents of child labor. bribery and anti-corruption Abraaj applies an ESG screen training for all professional to its SMC partner companies staff in order to reach 100% and has not identified any coverage by 2012 partner companies that SO4 Actions taken in response to incidents No such incidents have - Full employ child labor either. The of corruption occurred or been reported Firm works with its partner Aspect: Public Policy Full companies to advocate the prohibition of child labor, in SO5 Public policy positions and −− Asset: Shaping the 36-41 Full every way possible, including participation in public policy Stakeholder Model through supply chain development and lobbying screening SO6 Total value of financial and in-kind None - Full Aspect: Forced and Compulsory Labor Full contributions to political parties, politicians and related institutions by HR7 Operations identified as having Abraaj has zero tolerance - Full country significant risk for incidents of forced towards forced or compulsory or compulsory labor and measures to labor. There is no risk of forced Aspect: Anti-Competitive Behavior Full contribute to the elimination of forced or compulsory labor in this SO7 Total number of legal actions for None - Full or compulsory labor business anti-competitive behavior, anti-trust Aspect: Security Practices Non and monopoly practices and their Material outcomes Aspect: Indigenous Rights Full Aspect: Compliance Full HR9 Total number of incidents of violations None. This issue is considered - Full SO8 Monetary value of significant fines None - Full involving rights of indigenous people in our due diligence screen and total number of non-monetary and actions taken under Land Acquisition sanctions for non-compliance laws and considerations regulations Society Performance Indicators Product Responsibility Indicators DMA SO Disclosure on Management Approach SO DMA PR Disclosure on Management Approach PR Aspect: Community Partial Aspect: Customer Health and Safety Non Material SO1 Percentage of operations with −− Asset: Shaping the 38-41 Partial implemented local community Stakeholder Model Aspect: Product and Service Labeling Non engagement, impact assessments and −− From Theory to Reality: 82-83 Material development programs Why ESG Matters Aspect: Marketing Communications Full S09 Operations with significant potential None - Full PR6 Programs for adherence to laws, Abraaj Capital has created - Full or actual negative impacts on local standards, and voluntary codes a Holistic Compliance and communities related to marketing communications, Governance Framework SO10 Prevention and mitigation measures −− Asset: Shaping the 38-41 Partial including advertising, promotion, and which contains, among other implemented in operations with Stakeholder Model sponsorship documents, a Procedural significant potential or actual negative −− From Theory to Reality: 82-83 Document to describe the impacts on local communities Why ESG Matters prevailing rules concerning advertising and marketing and Aspect: Corruption Full the procedures that should be SO2 Percentage and total number of 100% - Full adopted to ensure adherence business units analyzed for risks to these rules related to corruption Aspect: Customer Privacy Full PR8 Total number of substantiated None - Full complaints regarding breaches of customer privacy and losses of customer data

98 99 Aspect: Compliance Full Management Approach

PR9 Monetary value of significant fines None - Full The Abraaj Capital management approach to the material areas of GRI performance indicators is captured here for non-compliance with laws and and throughout the content of this Annual Review. In the table below excerpts from the Annual Review are noted regulations concerning the provision against specific GRI indicator areas. and use of products and services

Materiality Realization Focus Area Approach Economic −− The group's investment philosophy is very much based on acquiring control-themed Abraaj Capital Ltd. is constantly engaged in a rigorous process, with the support of third party experts, to Performance equity stakes and taking those investments to the next level of development, with the capture the core concerns, issues and recommendations regarding our impact and sustainability performance. ultimate aim of generating superior returns for our investors The information was captured through reviewing the series of annual internal assessments as well as external −− Financial value-creation sits at the core of an investment philosophy aimed at driving stakeholder engagement events and fora that we participated in. The process resulted in the realization of the truly sustainable, economic value creation in the region in which we operate. A dynamic following materiality concept. This year featured an additional focus on partner companies to maximize the where shareholder returns are primary, but where the ability to create sustainable current understanding of our company's indirect impact. change in the economic landscape of our markets is critically important, has become as important a performance benchmark for us as pure financial returns Materiality Concept Human Rights −− This year Abraaj Capital applied an intensive program to enhance its approach to ESG and Social both in terms of risk as well as value creation. The interventions included improving our The following table illustrates the concept of materiality as currently adopted by Abraaj Capital Ltd.:* Impact ESG due diligence processes, reviewing ESG initiatives in our partner companies, and Impact increasing the capacity and skills of our staff on the subject matter. In addition, training High EC1, EC2, EC3-EC4, EC6-EC9, HR1, EN3, EN9-EN15, EN19-EN21, EN23- sessions for Board Directors and members of the Executive Committee who sit on the HR4, S02-SO8, PR6, PR8, PR9, EN25, EN27, Board have been conducted LA1-LA5,LA10-LA14 PR1-PR5, PR7 −− Abraaj Capital was the first private company in the MENA region to sign the United Nations Principles for Responsible Investment (UNPRI). It is also a signatory to the UN Medium HR2, HR5-HR7, HR9, SO1, EN16- Global Compact (UNGC) EN18, EN22, EN 29-EN30 −− Prior to signing the UNPRI, Abraaj Capital developed its own Ethical Framework for Low EC5, EN1, EN2, EN4, EN5-EN8, Investment to guide partner companies in their approach to Human Rights, Social and HR3, HR8, LA6-LA9, EN26 Environmental issues. This approach is representative of our commitment to embedding best practice throughout our stakeholder community Relevance Yes No −− Abraaj Capital's social investing program is underpinned by the '5+5+5' program. This represents the 5 percent of net management–fee revenue that helps finance the A special case needs to be highlighted with respect to obtaining data on water and electricity usage, which due program, the five days per year that each employee sets aside for volunteering in the to the nature of our business is minimal. The current contractual agreements with our landlords are based on a community (three days of which are paid by Abraaj Capital) and the 5 percent of the total rental fee package including all service usage. Accordingly, this data is not available for us or the landlords annual bonus we encourage each employee to donate who have total usage data for the full establishment and not office specific information. −− Abraaj is proud to maintain a clean record in terms of corruption or anti-competitive behavior which is a result of a rigorous internal compliance system that ensures Given the nature of the business, our current view is that our economic performance, the responsible attitude adherence to national and international standards of ethical practice towards our investments, the privacy and rights of our customers as well as the welfare and capacity of our staff constituted the highest level of materiality for Abraaj Capital. On the other hand, given the current limitation Human −− We have long given priority to hiring highly talented professionals and, once aboard, whether in terms of management intervention and legal boundaries, the extended impacts of our partner Resource to giving our staff the training and support they need to take them to the next level of companies as well as the environmental footprint of our offices are currently areas of medium materiality. Development professional development −− Our commitment to developing a world-class team of professionals with strong local *The indicators featured in the table refers to the GRI G3.1 performance indicators. expertise is unwavering. The Abraaj Academy is a bespoke training program created in 2010 in conjunction with leading global academic institutions such as Harvard Business School, INSEAD and London School of Economics −− Abraaj is committed to the provision of a healthy and non-discriminatory work place. Management is keen to focus on performance as the main pillar for evaluation. In order to ensure adequate follow up on this issue, management ensures that all employee surveys and grievance systems applied have a featured window for reporting on any discriminatory behavior

100 101 Product −− Our focus on quality permeates every aspect of our business, especially our Stakeholder How we Engage Priority Issues and Client investment approach. In developing an extraordinary network of contacts and business Employees All-staff meetings at least once a year, Communication of corporate strategy Responsibility relationships over the years, the group seeks to identify high-quality investment group CEO meeting with each group and culture, opportunity for skill building opportunities on a proprietary basis. With rigor, we then work to identify, assess and of employees by designation, Executive and career advancement, job security, mitigate risks Committee and Partner meetings, quarterly empowerment, salary and benefits, and −− Client privacy is an important pillar for Abraaj and managed through a rigorous system skill building through Abraaj Academy, knowledge sharing of compliance, legal and communication reviews. Management applies a zero tolerance employee satisfaction surveys (completed policy with regards to this aspect anonymously and administered by an Environmental −− In 2011, Abraaj Capital focused on enhancing the environmental review within its ESG independent third party), 360 degree peer Footprint processes to ensure the maximum protection to the environment prior to making any reviews, performance appraisals every six investments. Discussions have been initiated with partner companies in order to realize months, management retreats, Employee their current environmental impact Handbook, email updates and an intranet portal Investors Regular face-to-face visits, quarterly fund Communication of fund performance and Stakeholder Engagement reports, Annual Investor Conference, strategy newsletters, press releases and Annual Review Partner Regular meetings between the Abraaj Knowledge sharing, resource development, Indirect Engagement Government Companies Capital investment management teams and development and performance against partner company management, quarterly investment plan reports including an ESG review Communities & ASSET initiatives, 5+5+5 program, thought Contribution to the sustainable development Regulators Strategic Platforms Society leadership through research, reports, of the region through social investing, editorials, and speaking engagements at thought leadership and communications, key conferences, social investing program participation in strategic platforms, discussion and engagement with Abraaj Community with regional governments on public-private Partner Organizations (ACPO) and wamda. partnerships and providing a range of social com, an online portal to connect the and cultural platforms to further engage Direct Engagement Abraaj Capital Employees entrepreneurial community others in related meaningful dialogue

Financial Results

Partner Abraaj Community The economic performance indicator figures in tableEC 1 relate to the consolidated financial statements of Abraaj LPs Capital Holdings Ltd. for the year ending December 31, 2010. As the holding company of the Abraaj group, these Companies Partner Organizations are the financial accounts audited by KPMG, and relevant to the reporting of direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

(All figures are in US$ '000) Revenues Net sales plus revenues from financial investments and sales of 134,163 Employees Customers Communities assets Operating costs Payments to suppliers, non-strategic investments, royalties 44,407 and facilitation payments Employee salaries & benefits Total monetary outflows for employees (current payments, not 62,524 As part of the Abraaj group's stated mission and values, ASSET has focused on identifying a strategic and future commitments)* participatory process for stakeholder engagement. As a private equity firm, our first commitment must be to our investors. They are, along with our employees and our partner companies, our greatest priorities among Payments to providers of All financial payments made to the providers of the - our stakeholder community. However, our ability to best serve this group is closely linked to the strength of our capital organization's capital and dividends etc engagement with governments and civil society, regulatory bodies, academic institutions and the communities in Payments to governments Gross taxes - which we are based. To ensure an increasing level of engagement among stakeholders, the Abraaj group will hold Community investment Voluntary contributions and investment of funds in the 3,506 a series of joint consultations inviting various stakeholders to an open discussion on the group's sustainability broader community (includes donations) performance. The following tables outline current methods of stakeholder engagement. Economic value retained Investments, equity release, etc. 23,726

*The above figure represents the total value of Abraaj Capital's employee salaries as well as the total cost of employee benefits accessible for all levels. The benefits comprise medical insurance for employee, spouse and children below 18, corporate life insurance for employees, 50% or up to US$ 500 of healthclub membership and annual fees, and full subscription fee for one professional society annually.

102 103 Workforce Remuneration The Firm's remuneration policy is based on two components – the first of which is fixed and the second variable. Total Workforce The variable element is determined by an appraisal process that assesses the actual performance of each individual. The reward system is based upon the audited performance of the Firm. No commission is payable. Location Full time permanent employees Male Female The performance appraisal of each staff member is primarily the responsibility of that person's line manager. Egypt 9 6 3 Any indications that an individual's approach is inappropriate would be dealt with as part of this process. India 5 4 1 Performance is also reviewed by the Executive Committee annually and by the CEO on an ongoing basis. The Executive Committee makes the final decision regarding bonus payments and salary increases on the basis of Jordan 5 2 3 the appraisal process. Lebanon 5 3 2 Morocco 4 3 1 Safety We operate in a highly safe environment and we implement all recommendations we get from our facility Pakistan 8 8 management companies in the locations. In addition, five staff members are certified in Basic Firefighting and Palestine 3 2 1 Basic First Aid, including CPR, by Eurolink Safety Services, approved by the Ministry of Labor & Social Affairs. To this end, we do not utilize the health and safety committee functions as it doesn't meet our materiality case. Saudi Arabia 8 6 2 Singapore 6 4 2 Average training hours Tunisia 4 3 1 Employee Category Average training hours Turkey 8 5 3 Principals and above 21 UAE 110 84 26 Vice Presidents and below (investment professionals only) 35 Total 175 130 45 Breakdown of Employee Information The total number of new hires from the last reporting year is 32. Age Employee category Turnover Partners Principals Vice Presidents Other Staff Location Employees leaving employment <30 years old 30-50 years old UAE Male 3 3 Male Male Female Male Female Male Female Female 6 Total % Total % Total % Total % Total % Total % Total % Total Saudi Arabia Male < 30 yrs old 23 13% 11 6% 34 Female 30-50 yrs old 15 9% 31 18% 3 2% 17 10% 3 2% 33 19% 28 16% 130 Turkey Male > 50 yrs old 3 2% 3 2% 5 3% 11 Female Total 18 34 3 17 3 61 39 175 Egypt Male Female Governance and Compliance Singapore Male Abraaj has developed a Holistic Compliance and Governance Framework. The Framework reflects relevant parts Female 3 of the UK's Combined Code of Corporate Governance (the "Combined Code") – since replaced by the new UK India Male Corporate Governance Code ("the Code" - published by the Financial Reporting Council in June 2010). Female The Framework consists of 3 components – the first of which is a principles-based Code of Governance - Morocco Male referred to as Abraaj's Principles of Governance ("The Principles"). The Principles refer to the Code (on which it Female is based) and to the recommended guidelines and drafts published by the Institute of Chartered Secretaries and Administrators. These two "Documents" provide the context for the Principles. The Principles focus particularly Tunisia Male on Board Matters, Committees, Procedures and Internal Controls. Female Pakistan Male The second component consists of numerous "procedural documents" in what is called the Compliance Compendium. These procedural documents address issues such as Anti-Money Laundering and Combating the Female Financing of Terrorism, Ethics and Standards, Conflicts of Interest and Insider Dealing. Jordan Male 2 The third component of the Framework is an automated monthly declaration system where employees confirm Female that they have read and abide by the Procedural Documents in the Compendium and are aware of their Lebanon Male obligations. It also confirms that nothing has changed to alter the employee's fit and proper status. Female At Abraaj, a strong governance framework in our portfolio is considered a key pillar for value creation. Governance, Palestine Male in its broadest sense, is the exercise of judgment and authority and the use of resources to further the objectives Female 3

104 105 of an organization. In a corporate environment, that judgment and authority is exercised by several participants Compliance – shareholders, the Board of Directors (both collectively and individually), management and other functionaries within the organization. Accordingly, Abraaj has implemented corporate governance structures in partner Abraaj has prepared a Directors' Handbook which describes Abraaj's culture, standards and its approach to companies that govern the behavior of each of these participants. corporate governance including governance in respect of conflicts of interest. The Procedural Document on Conflicts of Interest which forms a part of the Compliance Compendium describes the measures that Abraaj Board Structure of Abraaj Capital Holdings Ltd. will adopt to prevent conflicts of interest arising in the first place and what procedures to be followed when the company finds itself in a conflicting situation. As at 31 December 2011, the Abraaj Capital Board of Directors is made up of 13 male members, 9 of whom are non-executive members including 4 independent. The Board meets at least three times a year. Eligibility

There are 3 Board Committees to cover all aspects of the group. They are the: The members of the Board of Directors are selected according to the extent to which they satisfy the criteria • Audit and Corporate Governance Committee; we have set to measure their ability to provide entrepreneurial leadership within a framework of prudent and • Compensation Committee; effective control that enables risk to be assessed and managed. It determines the strategic objectives of the Firm • Compliance and Risk Committee; and ensures that appropriate resources – financial and human – are available to the Firm to meet its objectives. Additionally, there is an Executive Committee consisting of the senior most members of management. Engagement The Board is also responsible for the overall performance management review and setting the group's standards and values. A Directors' Handbook has been prepared to show how the Board responds to the following matters, The Compliance Unit conducts frequent presentations to enhance the employees' understanding of Compliance which are among those reserved for the Board: ruling on any perceived, implied or explicit conflicts of interest and Corporate Governance within the Firm. This includes for example, induction training for new employees, as may arise during the course of the group's business or in the formation or acquisitions of any subsidiaries; annual anti-money laundering training, ad-hoc training on technical matters such as sanctions and focused monitoring corporate performance against the strategic, financial and business plans, including overseeing the training on Abraaj's Holistic Compliance and Governance Framework. operating results on a regular basis to evaluate whether the business is being properly managed; reviewing and approving the group's financial objectives, plans and actions, including significant capital allocations and The Abraaj Academy is a bespoke training program created in 2010 in conjunction with leading global academic expenditures (i.e., capital expenditures, deal-related exposure, underwriting or guaranteeing commitments institutions such as Harvard Business School, INSEAD and London School of Economics. Case studies include exceeding pre-determined amounts). The Directors' Handbook also stipulates how the Board of Directors are corporate governance and corporate social responsibility issues. compensated for their services. Abraaj is a signatory to the UN Global Compact as well as the UN Principles for Responsible Investment. Board Composition of Abraaj Capital Holdings Ltd. The principles therein are communicated across the group. Abraaj has also developed its own Principles of Governance which forms a part of "Abraaj's Holistic Compliance and Governance Framework." The Principles Since our inception in 2002, we have sought to ensure a balanced Board embracing the virtues and key values represent the group's Code of Good Practice. of non-executive shareholders, executive directors and independent directors. The composition of the Board has been defined through the following key legal provisions: Environmental Performance • Article 113 provides that there shall be a Board of Directors and that the business of the Company shall be managed by it; We work hard to mitigate our impact on the environment as we fully recognize that sustainable financial • Article 114 provides that the Board shall comprise the CEO and not less than four, and not more than 16 other performance and environmental performance are complementary and in the best interest of the business and persons. There must be at least one Independent Director. If there are eight or more Directors, other than our stakeholders. In order to better understand and manage our environmental footprint at Abraaj Capital, we the CEO, at least two – or a quarter of the total number (rounded down) – must be Independent Directors; have focused on the following topics due to their relevance to the nature of our day-to-day business practice • The Chair is a non-executive member of the Board; and activities. • Of the total number of Directors, two – the CEO and one other – shall be Executive Directors. If there are eight or more Directors (other than the CEO) at least two – or a quarter of the total number (rounded down) Our carbon footprint is generated mainly through business travel and transport. The nature of the private equity – must be Executive Directors. industry demands a substantial amount of travel for face-to-face meetings and negotiations. However, we take the environmental consequences of our travel seriously. In future, we aim to reduce our indirect carbon emissions The respective roles of the CEO and Chairman have been separated. This creates an appropriate balance of wherever possible and offset the remainder. The formula used for the CO2 calculator is based upon the official power, to increase accountability and to enhance the capacity for independent decision making. 2011 guidelines from the United Kingdom's Department of Environment, Food and Rural Affairs D( efra), originally published in 2001. Accessibility Abraaj Capital was one of the first companies in theD IFC to join an initiative to recycle paper, plastic and cans, Shareholders are represented at the Board. An investor conference is held every year and all investors/ and make a concerted effort to control our waste.M easurement of our recycled goods has been carried out by shareholders are invited to attend. the Emirates Environmental Group (EEG). EEG was the first environmental NGO in the world to be ISO 14001 certified in 2001, and the only organization of its kind in the UAE. It has accredited status on the United Nations Abraaj is the only private equity firm to sponsorD ubai's Hawkamah Institute of Corporate Governance. In order Environment Programme (UNEP)'s Governing Council, and the International Union for Conservation of Nature. to engage more specifically with the private equity industry on the issues of corporate governance we have We have committed to reducing our consumption of paper, and wherever possible, to re-using paper not printed been keen supporters and extremely involved in supporting the Hawkamah Institute for Corporate Governance on both sides. We also use recycled paper and stationery. (Hawkamah) situated in the DIFC. Together and with the participation of other private equity houses in the region we launched a MENA Task Force on Corporate Governance for the Private Equity industry which is developing Corporate Governance Principles and Practice Guidelines. The objective of this initiative is to encourage private equity firms to appraise (or to re-appraise as the case may be) their corporate governance status and to adopt best practice standards.

106 107 Emission from travel Net CO2 emissions from business travel (tons) 2137 Senior Management Total amount of used materials Recycled Material 2011 Paper (kg) 2800 Abraaj Capital Plastic (kg) 376 Cans (kg) 16 Arif Masood Naqvi Total amount of waste sent for recycling Founder and Group Chief Executive Officer Material 2011 Paper (kg) 1805 Plastic (kg) 243 Mustafa Abdel-Wadood Hossam Yousef Radwan Hilton McCann Chief Executive Officer Senior Partner Partner Cans (kg) 10 Abraaj Capital Limited Kingdom of Saudi Arabia Chief Compliance Country Head Officer We seek to create a central model of excellence for sustainability within Abraaj Capital that can be integrated Abraaj Partners Holdings in our partner companies. To further support this objective, we commit to working closely with our partner companies on social and environmental issues and will conduct sustainability assessments in nine partner Waqar Siddique Tom Speechley Narayanan Rajagopalan companies by the end of 2012. Managing Partner – Risk Senior Partner Partner and Internal Audit Chief Executive Officer Suppliers Riyada Enterprise Development Abraaj Capital is committed to operating a fair and competitive process for the provision of needed supplies. In situations where quality, reliability and competitiveness exist, preference is granted for locally based products Ahmed Badreldin Matteo Stefanel Purshotam and services. The table below is indicative of the applied process: Senior Partner Senior Partner Ramchandani Partner Total supplier payments Dubai Singapore Egypt Turkey India Pakistan (US$) Local 14,162,072 2,190,059 544,343 2,405,918 448,723 252,121 Ashish Dave Selcuk Yorgancioglu Mohamed Semary Senior Partner Senior Partner Partner Chief Financial Officer Turkey, Iraq and Central Asia Regional Head International 32,937,858 21,962 - 271,544 - - Wahid Hamid Andrew Chvatal Abdullah Shahin Senior Partner Partner Partner Head of Portfolio Management and Abraaj Capital commits to reporting on its environmental, social and economic performance on an annual basis. Operations Group

Mounir Husseini Tabish Gauhar Frederic Sicre Senior Partner Partner Partner Head of Corporate Business Development

Omar Lodhi Faisal Khan Omar Syed Senior Partner Partner Partner Asia Regional Head Legal Disclaimer Abraaj Capital Ltd. (ACLD) is regulated by the Dubai Financial Services Authority and is a member of the Abraaj Capital group. This document is issued by the Abraaj Capital group and is intended for general information purposes only. It does not constitute an offer or solicitation for any business transaction or investment advice. This Annual Review does not constitute or form part of, and should not be construed as, or relied upon in respect of, any offer for sale or subscription of, or solicitation of any offer to purchase or subscribe for, any interests in any Fund or financial product sponsored or managed by Abraaj Capital group or otherwise. The information contained in this Annual Review has not been prepared, vetted or verified for any such or any similar purpose.

108 109 KPMG Limited assurance statement

Aureos Capital

Sivendran Vettivetpillai Chief Executive Officer

Jacob Kholi Bharat Dighe Raj Morjaria Senior Partner - Africa Partner - India Partner - MENA

Hanjaya Limanto GV Kumar Peter Njoka Senior Partner - South Partner - India Partner - East Africa East Asia

Miguel Angel Olea Sandeep Khanna Chris Roling Senior Partner - Latin Partner - Southern Partner – Portfolio America Africa Management and Operations Group

Erik Peterson Talgat Kukenov Ravi Sharma Senior Partner - Latin Partner - Kazakhstan Partner - West Africa America

Davinder Sikand Danny Lizares Balaji Srinivas Senior Partner - Africa Partner - Philippines Partner – Regional Fund Manager

Kodjo Aziagbe Chye Lin Loh Daniel Wasserman Partner - Francophone Partner - Malaysia Partner - Colombia West Africa

Ron Den Besten Hector Martinez Nissanka Weerasekera Partner - Africa Partner - Peru Partner - Sri Lanka and Bangladesh

Srisant (Op) Chitvaranund Shakir Merali Yelena Yunussova Partner - Thailand and Partner - Healthcare Partner - Kazakhstan Vietnam Africa

110 111 GRI Verification statement

112 113 Our Board of Directors: 2002-2011

Sheikh Abdulrahman Ali Al Turki, Chairman Mr. Arif Masood Naqvi, Founder and Group Chief Executive Officer H.E. Hussain J. Al Nowais, Vice Chairman Mr. Saud Abdulaziz Kanoo, Independent Sheikh Khaled Bin Zayed Al Nehayan Sheikh Nawaf Nasser Bin Khaled Al Thani Mr. Saleh Romeih, representing Deutsche Bank Sir Paul Judge, Independent Mr. Sean Cleary, Independent Mr. Fadi Ghandour, Independent Mr. Mustafa Abdel-Wadood, Executive Mr. Waqar Hassan Siddique, Executive Mr. Tom Speechley, Executive

114 Abraaj Capital Limited Dubai International Financial Centre Gate Village 8, 3rd Floor, PO Box 504905 Dubai, United Arab Emirates T: +971 4 506 4400, F: +971 4 506 4600 [email protected]; www.abraaj.com

Abraaj Capital Limited is regulated by the Dubai Financial Services Authority