Annual Report & Accounts 2015 1. About Us Overview Contents Overview 1.1 At A Glance 6 1.2 2015 Key Achievements 14 1.3 Key Financial Highlights 18
2. Chairman’s Statement Statement Chairman’s Chairman’s Statement 22 Report The Strategic 3. The Strategic Report 3.1 Our Business Model 26 3.2 Chief Executive’s Strategic Review 28 3.3 Operating and Financial Review 32
4. Corporate Governance Governance Corporate 4.1 Overview 40 4.2 Board of Directors 44 4.3 Risk Management 48 4.4 Directors’ Report 50 4.5 Statement of Directors’ Responsibilities 51 4.6 Report of the Shari’a Supervisory Board 54 4.7 Independent Auditor’s Report 55
5. Financial Statements Statements Financial 5.1 Consolidated Statement Of Income 57 5.2 Consolidated Statement Of Other Comprehensive Income 58 5.3 Consolidated And Company Statement Of Financial Position 59 5.4 Consolidated Statement Of Changes In Equity 60 5.5 Company Statement Of Changes In Equity 62 5.6 Consolidated And Company Statement Of Cash Flows 63 5.7 Notes To The Financial Statements 66 Twitter: www.twitter.com/ Information Shareholder RasmalaGroup 6. Shareholder Information LinkedIn: www.linkedin.com/ Shareholder Information 122 company/rasmala
Online: rasmala.com
Rasmala plc Annual Report and Accounts 2015 3 Overview Overview now have a simpler story, a simpler story, now have and one with one brand all our markets. vision across All these achievements, the will pave believe, we greater even for way future. success in the In this annual report we a full strategic reportprovide of the our progress over This report covers past year. all our global operations, with stakeholders providing financial and relevant non-financial information. It has been compiled in accordance with the Financial Reporting Council. annual reportannual
About our About Rasmala reportedRasmala its of year third consecutive tax operating profit before challengingin 2015, despite conditions. market ofsaw another year We strong performances from our launchedflagship a new funds, real estate and made division a number of appointments. key made importantIn addition, we in technology to investments clientservice help improve were and our achievements recognised with a number of industry awards. our brand also unified We and under the name Rasmala Annual Report and Accounts 2015
Rasmala plc 4 Overview Overview 7 Equity 51% 5% Fund 41% Real estate Real
Annual Report Accounts 2015 and
Rasmala plc Discretionary Mandate 59% Fixed Fixed Income 29% Alternatives 15% AUMs by AUMs asset segment AUMs by AUMs asset class AUM: ‘ 33% <10 years industry experience 26% Rasmala is a Rasmala is a people-led business. and recruited We’ve a retained highly-proficient from workforce the globe across 10-19 years 30+ years 11% 20-29 years 30% Years of Years hubs to offer clients a winning mix of global expertise knowledge. and local market team includesOur management investment, senior all ofstructuring professionals, and placement Over industry experience. extensive whom have oftwo-thirds staff our investment 10 or more have while some of experience, years’ our senior team the industry in more worked for members have a demonstrable have We than three decades. private equity, record in asset management, track strategic and management banking, investment and acquisitions. mergers a culture of encourage we At Rasmala, inclusivity, respect and entrepreneurship among our people pride in strengthening their capabilities. and take ‘
Discretionary portfolio management MENA / GCC / single country equity portfolio strategy investment income Fixed portfolios strategy investment market Money portfolio strategy Alternative portfolio investment strategy Shari’a-compliant portfolioinvestment strategy Balanced portfolio strategy – Sukuk Origination, We originate and We Asset Management Fund management a number across of funds key Arabian Rasmala Growth Markets Equity Fund GCC Fixed Rasmala Income Fund Palestine Rasmala Equity Fund Global Rasmala Sukuk Fund GCC Rasmala Islamic Equity Income Fund Leasing Rasmala Fund 1 Leasing Rasmala Fund 2 Trade Rasmala Finance Fund – Trade Finance/Murabaha – Trade Leasing/Ijara Debt Capital Markets Structuring and Placement Structuring Islamic Debt Financing and Deal Estate Finance and Equipment Real Estate Principal Investment Real l l l l Our people recruited We’ve is a people-led business. Rasmala from and retained a highly-proficient workforce almost from bringing workers across the globe, continent together in our Dubai and London every the most demanding global institutional investors. the most demanding Banking: Investment and invest transactions asset-backed execute alongside our clients in the Gulf Cooperation Council (GCC) countries. main service offerings include:The division’s Advisory M&A Advisory Buy-side Sell-side Shari’a Advisory (through Cordoba Capital) Service offerings Our client includes base Real Estate Principal Transactions REIT Advisory Securitisation Annual Report and Accounts 2015
Investment Banking Investment
Rasmala plc IPOs and Rights Issues Private Placements Equity Capital Markets Debt Capital Markets Sukuk Origination, Structuring and Placement Capital Markets 6 Our investment capabilities Our investment Asset Management: family groups, corporates, pension funds, related and financial entities government some of assets for also manage We institutions. What do we asset innovative on providing is Our focus to and financing solutions management lines: business institutional clients four across and real estate. alternatives income, fixed equities, Who we are Who we listed independent investment are a London We group management serving Gulf and international $1.1bn approximately manage We investors. in (£0.72bn) in discretionary invest assets and (UK), Middle East, Africa and the United Kingdom are one of We other global markets. the largest managers operating in the independent investment Middle East and North region. Africa (MENA) 1.1 At A Glance At 1.1 1. About Us About 1. Our strategy Strong industry recognition Overview We’re committed to our Gulf investors l We continue to focus on growing our Overview and to the investment of GCC capital alternatives and real estate businesses. Over the past two years, we’ve received a number of industry awards – into international markets. In the long term: highlighting the quality of our expertise, the strong performance of our At the current time: products and the hard work of our dedicated investment team. l We plan to significantly expand our l We’re maintaining and improving our product portfolio and geographic reach. asset management foothold in core markets, strengthening relationships l We will extend our reach into new client with our institutional clients and segments within the GCC and expand increasing our market share. our client base internationally.
Our strong business model supports our strategy
Asset Management Government Entities, Sovereign Wealth n DPM n Wide Range of Mutual Funds n Advisory Funds, Pension Funds, Foundations & Endowment Investment Banking Corporates and n Debt Capital Markets n Real Estate n Advisory Family Offices
What makes us different? Our values
Diversified product offering We build We work with personal, personal integrity and Strong long-term Strong relationships responsibility performance management and track team record We always pursue excellence
We are Strong Strong We have client base a passion to committed to industry innovation in GCC recognition make a markets difference Well- capitalised and able to invest in new products
8 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 9 Overview Overview 11 Annual Report Accounts 2015 and
Rasmala plc investment reach investment Annual Report and Accounts 2015
Rasmala plc We started out investing in the startedWe out investing Gulf over and Egypt but markets reach has time our investment UK, the US, to cover expanded South Africa Malaysia, Turkey, and other emerging markets.
10 International Overview Overview Annual Report and Accounts 2015
Rasmala plc Rasmala Breakfast Briefing Rasmala Islamic Finance Dubai: Global Hub for 13 October 2015 Tuesday 12 Overview
1.2 2015 Key Achievements Overview Strong Performance Of Rasmala Leasing Fund 1 Agricultural Options Industry Allocation 19% Our Products Rail & Road 17%
Aviation 1% Utilities Commercial & Professional Service 17% 1% Equities Fixed Income Alternatives Real Estate Food Confectionery 2% Consumer Staples Electric Equipment 13% 2%
Energy 4% Industrials l Rasmala GCC Islamic Equity Income Fund 8% was 2nd at the top of our peer universe and Rasmala Leasing Fund 1 Health Care outperformed the index. The Fund paid out 4% Materials distributions of $3.1/unit (£2/unit). Consumer Discretionary 8% 4% l The ABC Equity Fund came in as the second best performing fund among Egypt’s 24 public equity funds. l Rasmala GCC Fixed Income Fund was 2nd at the top of our peer universe and outperformed across the index. The Fund paid out distributions of $4/unit (£2.7/unit). Rasmala Leasing Fund 1 IGE* l Rasmala Global Sukuk Fund was at the top of 28% our peer universe and outperformed the index. Credit Rating Leasees The Fund paid out distributions of $3/unit (£2/ unit). A3 l Rasmala Leasing Fund 2: In March 2015, we 19% Aa3 announced the final closing of the Rasmala 2% Leasing Fund 1. The Fund has invested in 86 leases across 21 companies and 13 industries. In response to the success of Aaa Baa2 the Rasmala Leasing Fund 1 and client 2% 17% demand, we launched the Rasmala Leasing Fund 2. It has invested in 16 leases across seven companies and four industries. Since Not inception, we have returned over $11.2m rated (£7.4m) to unit holders. 3% Baa3 l Rasmala Trade Finance Fund: Launched in 13% September 2014, the Rasmala Trade Finance A2 and 6% Fund has financed over $93m (£62.7m) Aa1 in trade-related financings, and received 10% repayments of over $55m (£37m). The Fund has distributed $3.75/unit (£2.53/unit) to unit holders for 2015. * Investment Grade Equivalent
14 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 15 Fund vs Benchmark Overview Overview Rasmala Palestine Rasmala Global Sukuk Rasmala GCC Fixed Equity Fund Fund Income Fund 2.5 2.5 5.94% 6 2.18% 1.85% We increasingly attract and retain the best talent 2.0 2.0 5 Strengthening our team remains a constant area of focus and in 2015 we tactically added headcount in key areas of the firm. Rasmala maintains a rigorous 4.10% 1.59% 1.58% recruitment process and we carefully consider 4 1.5 1.5 competencies, experience and cultural fit before we invite someone to join our team. The individuals who joined our team in 2015 were able to hit the % 3 % % ground running and leverage our platform to create 1.0 1.0 incremental results. Established a new We continued our strategy of product 2 expansion relationship with As part of our strategy of expanding our product 0.5 0.5 a key property menu, we launched our real estate offering in March 1 2015, focusing on identifying high quality, income distributor generating properties in the UK, Europe and the United States (US). 0 0 0 Rasmala AI Rasmala Citigroup Rasmala Citigroup We successfully pitched for Palestine Quds Global Sukuk GCC Fixed MENA Broad Equity Fund Index Sukuk Index Income Fund Bond Index new business l Two Dubai-based quasi-sovereign institutions Performance is net of Performance is net of fees based Performance is net of fees fees based on A-Share on Distribution Share Class in USD based on Distribution Share appointed Rasmala as investment manager. Class in USD and as as of 31 December 2015. Inception Class in USD and as of 31 l We established a joint venture with a UAE- of 31 December 2015. date of performance measurement December 2015. Inception date based investment firm to co-invest in real estate Inception date is 5 period is 30 April 2012. of performance measurement May 2011. period is 31 March 2009. opportunities. l We acted as lead arranger for the successful Rasmala GCC Islamic Equity Income Fund issuance of the National Bank of Fujairah second Rasmala GCC Islamic tranche of additional tier 1 capital $136m. Equity Income Fund (7.70%) l Banque du Caire appointed Rasmala as investment manager for a new balanced fund. S&P GCC Shari’a % l The Judges’ Pension Fund became our first Composite Index (16.27%) corporate pension plan in Egypt. (20) (15) (10) (5) 0 We received new awards Fund Performance % Throughout 2015, we won a number of industry Performance is net of fees based on USD Participating Shares Class as of 31 December 2015. Inception awards. These accolades underline the quality of date is 3 June 2013. Rasmala’s knowledge and expertise. l Institutional Investor ranked Rasmala as one of the Arabian Markets Growth Equity Fund Middle East’s Top 20 Money Managers in 2015. Banque du Caire Arabian Markets l Global Investor named Rasmala “Regional Fixed appointed Rasmala Growth Equity Fund (9.99%) Income Manager of the Year” and “Egypt Equities % Manager of the Year”. as investment S&P Pan Arab (17.28%) l Rasmala was named “Best Global Sukuk Fund” Composite Index by MENA Fund Manager and the Rasmala Trade manager for a new (20) (15) (10) (5) 0 Finance Fund was recognised for “Outstanding Fund Performance % Performance and Innovation”. balanced fund
Performance is net of fees based on A-Share Class in USD and as of 31 December 2015. Inception date is 30 July 2006.
16 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 17 Overview Overview 19 2014 £5.9m Fees Fees 2015 £5.3m 2015 £9.7m 2014 £9.3m £ millions £ millions Other Assets
l 8.9 11.3 26.0 19.9 21.7 29.1 2015 117.0 Annual Report Accounts 2015 and
Total Total Expenses Earnings From Earnings From And Commission Goodwill 0 2 4 6 8 10 12 0 1 2 3 4 5 6
l Rasmala plc Asset 13% 37% Banking Investment Investment Management 2014 3.16p 10.8 Principal Investments Principal Investments Revenue Revenue
10.8 48.4 14.2 16.7 22.5 25.9 138.4 2014 l 2015 0.37p Divisional Divisional Contribution Principal Investments 50% Basic EPS 0 0.5 1 1.5 2 2.5 3 3.5 4 Cash and Financial Institution Deposits
l 10.2 Available for-sale securities for-sale Available
l 12.7 10.2 11.5 15.9 26.5 27.3 49.7 153.6 2014 £125m 2013 £10.8m – Three Year Movement Year – Three £10.2m £10.2m 2015 £104m 2014 £ millions £ millions 2013 2015 Operating 0 50 200 100 150 Financing Arrangements – Non FI Fund Investments Fund Investments
l l
Total Net Assets Income Total Total 0 3 6 9 100 120 150 0 2 4 6 8 10 12 Total Assets Total £ millions £ Fund 25% 10% 17% Principal Principal Goodwill Investments Investments
Net Asset Value
Neil McDougall, Chief Financial Officer “Our strength lies in our “Our strength ability our to manage clarity with and business especially consistency, when conditions are difficult. A third of year consecutive operating profit before tax demonstrates that did that again we in 2015.” Assets Composition Other Assets 7% Cash and Financial Institution Deposits 22% Available for-sale securities 19% Earnings fees from and commission Total was was Annual Report and Accounts 2015
Rasmala plc 18 operations from continuing continuing from Profit before tax before Profit income was income was Total operating Total 1.3 Key Financial Highlights Financial Key 1.3 1.3 Key Financial Highlights (Continued) Overview Overview
Rasmala overcame a challenging period of macro- Profit Before Tax From Continuing Operations economic volatility in 2015 to deliver a solid set of results and continued to make progress towards 2,000 building a dynamic platform for growth. This 1,504 performance was perhaps all the more notable 1,500 1,485 given the sharp reduction in the oil price and difficult geopolitical conditions in our core markets. 1,000 Despite the major challenges we faced during £000 the year, we were pleased to see operating 537 income remaining broadly comparable with the 500 figures achieved in 2013 and 2014, with £10.2m in 2015, down just 0.5% on the £10.8m achieved 0 the previous year and in line with the £10.2m achieved in 2013. 2013 2014 2015 Net asset value at 331.6 pence per share was higher than the 317.2 pence per share recorded in 2014. Despite the major Earnings from fees and commission came in challenges we faced ‘ at £5.4m (2014: £5.9m), accounting for 53% of during the year, we total operating income against 55% in 2014. Our intention is to increase the share of our revenue were pleased to see stream that is accounted for by such annuity-based earnings, reducing the proportion resulting from operating income one-off types of income. remaining broadly The business achieved an operating profit before tax for the third consecutive year. ‘comparable with the The £0.5m figure, as against £1.5m in each figures achieved in of the previous two years, reflected the volatile conditions throughout 2015. 2014 and 2013 Profit from continuing operations was £0.3m (2014: £0.7m), and total expenses were £9.7m Net Asset Value (2014: £9.3m) reflecting investments in people and 35 331.6p platforms to support new lines of business. 320.0p 317.2p We maintained a strong balance sheet, which 30 enabled us to launch the real estate business 25 and will support future opportunities. 20 Total assets under management (AUM) stood at $1.1bn (£0.72bn), comparable with pence 15 the $1.1bn (£0.72bn) recorded in 2014. This 10 includes gross new inflows of $404m, underlining the fact that our more diversified product offering 5 is meeting our clients’ needs. 0 EPS stands at 0.37p, compared to 3.16p in 2014. 2013 2014 2015
Rasmala Abu Dhabi Institutional Investors Symposium Thursday 16 April 2015
20 Rasmala plc Annual Report and Accounts 2015
2. Chairman’s
level, also contributed to negative investment Statement sentiment in the GCC region. The period saw a sharp drop in market liquidity and increased We will implement risk-aversion from local and foreign investors, ‘ leading to falling stock markets, widening credit a new asset spreads and pressure on domestic currencies. management Statement Chairman’s “Our transformation has Another noteworthy market development was the continuing strength of the US Dollar which, platform in seen three consecutive when combined with lower oil prices and a years of profit for the slowdown in regional growth, put considerable 2016, further Group - the clearest sign pressure on local currency pegs. enhancing our that our strategy and Corporate governance infrastructure business model is the The Board aims to deliver consistently high and our ability to standards of corporate governance in an ever- ‘deliver value to our right one. Our product changing regulatory landscape. It continues offering was successfully to assess its effectiveness, independence, partners and clients efficiency and its mix of skills and experience. expanded during 2015 In 2015 the Board undertook a formal review of its corporate governance arrangements, with our real estate assessing the suitability of the 2013 Quoted proposition, and we have Companies Alliance Corporate Governance a tender offer of £20m. The tender offer Code for Small and Mid-size Quoted was oversubscribed and was successfully high hopes for 2016.” Companies (the QCA Code). completed on 6 May 2015. The QCA Code adopts key elements of the Abdallah Y. Al-Mouallimi, Outlook Chairman UK Corporate Governance Code and other relevant guidance and then applies these We believe global and regional macro- to the needs and circumstances of small economic conditions will remain challenging I am pleased to report an operating profit industry suffered from sudden and significant and mid-size quoted companies. The Board throughout 2016. The Gulf economies are before tax of £0.5m for the year 2015, despite redemptions and adverse market movements. concluded that the QCA Code would best now adapting to the steep fall in the oil price, challenging economic conditions. This is the At Rasmala we were able to capture net new enable it to balance the need for systems and a key factor for the region. Recent budgets third consecutive profitable year for the Group inflows due to a stronger product offering which procedures with the need for flexibility and from regional governments are contractionary, and provides further vindication of our strategy has helped the firm diversify away from pure entrepreneurship that is essential to a growing providing steps to counterbalance oil revenues. as well as reaffirming our position as the leading equities and fixed income. company. As such, the Board formally adopted independent asset manager in the GCC region. We continue to maintain a strong balance sheet the QCA Code. There are some positive signs emerging which is well positioned to support our business - the price of oil appears to be stabilising We continue to monitor the Board’s Progress and any new opportunities that may arise. after a volatile start to 2016 and the macro performance to ensure that we have the picture is stable. China’s economy is 2015 saw us broaden our product offering once We have also continued to successfully utilise appropriate knowledge, skills and professional continuing to expand, albeit at a slower more as we continued to invest in our people the balance sheet to develop and launch new experience at the highest level of the firm to rate, while higher commodity prices are and platforms and developed new distribution products. deliver long-term growth. supporting emerging markets. relationships. These factors, coupled with strong Our ability to report a profit, increase our cost control measures and careful management product offering and maintain our AUM in We were pleased to announce that Neil The recent weakness in GCC equity and of our balance sheet, have all contributed to the challenging conditions clearly demonstrates the McDougall joined the Board as an Executive bond markets has also prompted international Group returning yet another profit. strength and resilience of our organisation. Director and Chief Financial Officer during investors to look to the region for opportunities. 2015, bringing a wealth of financial services knowledge and experience. The Board has followed a clear and Performance Market developments consistent strategy for creating long-term The Group’s operating profit before tax was The steep fall in the oil price in 2015 presented value and we believe that our experienced £0.5m (2014: £1.5m). This was a good result a serious challenge to GCC economies. Other Tender offer management team will continue to deliver the amidst difficult trading conditions, particularly factors, such as regional conflicts and general As part of our commitment to deliver Board’s strategy while maintaining stability in the second half of the year, when our weakness in emerging markets at a macro value back to shareholders we approved across the platform.
22 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 23 TheThe Strategic Strategic Report Report Annual Report and Accounts 2015
Rasmala plc 24 The Strategic Report Generate clients and clients value for our for value shareholders speculation unjust enrichment or unfair exploitation. cash flows relating to such activities. interest or the trading of interest or the trading intangible assets and uncertainty How we generate value How we from asset management fees derive We servicesmanagement from fees and transactional depend banking services. Fees specialist investment on the capability and amount of managed assets. create to generate As we greater expect scale we incremental profits. Our strategy capital GCC regional across Our strategy to invest is offer our clients tailor- and international We markets. and financing solutions made asset management on our core markets. primarily focused have we in the GCC countries, As a leading player world-class expertise in Islamic Finance (IF), which is avoiding: transactions, based on ethical, real economy l l l l IF aims to generate long-termIF aims to generate financial returns taking impact on society by a positive while having and social factors into consideration. environmental & product & product PRODUCT innovation Diverse offering offering Diverse priorities people Talented Talented PEOPLE & motivated & motivated Annual Report and Accounts 2015
CLIENT
network Increase Increase our client our client
Rasmala plc Our key strategic priorities revolve around our clients, people clients, around our strategic priorities revolve Our key looking to increase our client are always We and products. network, hire talented people with the right skills to help us products. grow and launch new and innovative
26 Our strategic Our services management investment The Group provides services a wide product menu covering across investments alternative income, fixed equities, banking It also offersand real estate. investment advice, business services including those covering ofthe provision and debt capital markets finance, structured finance products. asset as a specialist aim to develop We that and financing business management offers solutions to GCC-based clients. bespoke position and be a market-leading to achieve want We an independent champion the region. for Rasmala is a London listed asset management and and London listed asset management is a Rasmala banking group on the growth focused investment ofmarkets the GCC countries. the Financial Conduct is regulatedRasmala by regulators by (FCA) in the UK and in the Authority and Oman. Egypt EmiratesUnited Arab (UAE), primary investment Rasmala’s is to provide focus to pension and financing solutions management corporations family groups, funds, and financial and institutions. government 3.1 Our Business Model Our Business 3.1 3. The StrategicThe 3. Report The Strategic Report 29 Annual Report Accounts 2015 and
Rasmala plc Our book Our now is exposure 2015, At 31 Dec had a Rasmala total capital of Principal Investments Principal Investments on investing (PI) focuses Principal Investments in opportunities that align with our overall seed model. It provides strategy and business new Asset Management products funding for PI is Banking transactions. and Investment group liquidity, day-to-day also responsible for capital and balance sheet management. equity investments PI manages our private which We includes non-strategic positions. in our non- exits towards working are actively The total valuation ofstrategic holdings. our non-strategic portfolio is £20m (2014: £16.7m). unificationBrand unified our brand In December 2015 we based on our was decision The Board’s name. ofobjective adopting a clear and consistent saw us successfully handle the issuance ofsaw us successfully handle the issuance AED 500m ($136m) of capital one of for tier-1 banks the best-known and longest-established National Bank ofin the UAE, Fujairah. to on our commitment maintained and built We Shari’a-compliant market-leading developing offeredfinancial products, across both our Banking and Investment Asset Management in internship is investing Rasmala businesses. schemes our capacity in the field to help build of ethical and Islamic Finance. a warm to give delighted were we Finally, to those who joined our Investment welcome pleased were We Banking team during the year. to be able to announce a number of important appointments both to the mainstream top-level and in the new area ofbusiness real estate. Investment Banking is a growth area Investment our a fact underlined Rasmala, by for in both people and systems investment during our expansion during 2015 and by of into the area the year real estate. Our commitment to property-related underlined was in October, transactions launched structuredwhen we real estate two products and acquired investment substantial properties in the UK, each a prestigious corporate tenant, occupied by the Everything Everywhere respectively mobile telecommunications operator at a site in the north-east of England and Airbus part and Space, Defence of the Airbus at a site in South Wales. Group, fully just the beginning and we however, This is, intend to grow the real estate in 2016. business March Banking, 2015 Elsewhere in Investment Total gross inflows were in excess of gross in excess were inflows Total broadly matched$404m (£272m), higher by in equity markets and weaker redemptions termsthe region. Thus in of the overall AUM, unchanged. picture was conditions difficult market did not allow We path us from continuing on our to distract of of The introduction product innovation. new products is important in changing market to retain assets. Rasmala conditions and allows The establishment of and our alternatives real estate our ability highlights to businesses bring new products to market. and innovate a number of won we Throughout 2015, industry Fixed including Regional awards Equities Egypt Income Manager of the Year, Best Global Sukuk ofManager the Year, and Fund and Outstanding Performance Award. Innovation Some performance highlights of the year Global Sukuk Fund returnedincluded: Rasmala 2.18% against the benchmark of 1.59%; the placed 2nd amongst ABC Equity Fund was 24 of the best performing public equity funds Income GCC Fixed in Egypt; the Rasmala Fund returned 1.85% against the benchmark of GCC Islamic Equity 1.58%; the Rasmala atIncome Fund was the top of its peer group the Rasmala and outperformed the index; $14.4m (£9.7m) in Leasing Fund 2 deployed and four companies 16 leases across seven Finance Trade industries and the Rasmala $93m (£62.7m) in trade Fund financed over related financings. Banking Investment
Zulfi Caar Hydari, Chief Executive Officer “Throughout the year the year “Throughout made furtherwe progress in expanding offeringour product across alternatives and real estate. These efforts have underpinned the performance of our Asset Management and Investment Banking businesses in 2015.” Asset Management issues confronted our Asset Management Key our team rose to the but in 2015, business These included a very sharpchallenge. fall in conflicts and major geopolitical the oil price, concerns the world about the prospects for the GCC countries Given as a whole. economy these developments, are significantly impacted by it is unsurprising that various public and private- a credit sector bodies in the region experienced downgrade during the period. The Asset Management business performed business The Asset Management though years, consistently with previous without the high performance generated fees despite remained steady in 2014. Our AUM economic headwinds. generated Banking business The Investment as year than in the previous higher revenues a result of our new real estate offering. manage our balance sheet carefully and We sufficient financial resources continue to have maintain strong to support We our business. capital capital and liquidity positions and exceed As ofadequacy ratios. 31 December 2015, had total capital ofRasmala £104m ($154m). Annual Report and Accounts 2015
Rasmala plc 28 I am pleased to report an operating profit the Group of tax for before £0.5m (2014: of year £1.5m), our third consecutive profit. £10.2m (2014: operating income was Total £9.7m (2014: £9.3m). £10.8m) and costs were veryThis is a good result in what were conditions. challenging and volatile The net profit, including non-controlling amounted to £0.2m (2014: £0.6m) interests, ofafter tax expenses £0.2m (2014: £0.8m) and a £0.1m loss on discontinued operations (2014: £0.1m). made further we During the year progress our product offering across in expanding This has and real estate. alternatives underpinned the performance of our and Investment Asset Management Banking businesses. Results On behalf of the Directorsam pleased to I as part of of review present my the year, our Strategic Report. The financial statements the reporting for ended 31 December 2015 are shown year on pages 57 to 119.
Strategic Review 3.2 Chief3.2 Executive’s The Strategic Report 31 ‘ Annual Report Accounts 2015 and
Rasmala plc Our top priority Our top a is to maintain course, steady implement our strategic plan and be on the for lookout opportunities ‘ The Rasmala Trade Finance Fund invests in a Finance Fund invests Trade The Rasmala ofrange and does finance transactions trade as to be Shari’a-compliant. so in such a way Because of the short term nature of such to there is reduced vulnerability transactions, increases in interest rates. Leasing Fund offers The Rasmala exposure portfolioto a wide-ranging of Shari’a- compliant equipment-leasing investments, returns. The high low-volatility generating credit ratings of the the lessees reduces ofvulnerability to future interest investors rates rises. income yields this year. For those seeking For income yields this year. market, in a volatile investments safe-haven a strategies will have our fixed-income continuing appeal. said; you Earlier this year, been developing have “We that products are investment uncorrelated to the equity and that income are bond markets low and exhibit producing elaborate you Would volatility.” on this? to the prospects for the for to the prospects There was strong performance strong was There What flagship funds. your from behind that? think was do you factors behind key highlight two I would the success of our One was these funds. strategy at a time of investment defensive The and uncertainty. turbulence market winning second is our award team. investment How is the firm positioned in relation to the challenging environment? market One of features is our our most distinctive ability to offer a suite of different products, Our conditions. suitable shifting market for financing products – which asset-backed finance and trade include equipment leasing, real estate – will continue to show strong Chief Q&A Executive’s with you are How optimistic regard GCC region? should turbulence market and volatility Recent from the underlyingnot distract economic Lower which remain strong. fundamentals, have tensions oil prices and geo-political short-termgenerated and alarmed “noise” of despite high levels investors private and coupled with low debt to wealth sovereign Furthermore, have GDP ratios. recent events spurred reform economic region, across the from away seek to diversify as governments a greaterdependence on oil and towards activity. private-sector reliance on dynamic 2016? What for is the focus course, Our top priority is to maintain a steady implement our strategic plan and be on the opportunities. for is Product innovation lookout enablingalso vitally important us ways, in two both to adapt conditions to changing market meeting and to better serve our clients by their needs more precisely and effectively. led to the Our commitment to innovation introduction of new products relating to and and real estatealternative investment Shari’a-compliant financial market-leading these on will see us build This year products. new areas in which and explore developments can innovate. we Future developments Future a unique platform which is developed have We However, positioned to grow and expand. well the current share price materially believe we undervalues the Group and whilst confidence in up ofour strategy and the building record a track is essential to create are long-term we value, considering short-term measures to support the share price. stated that previously consolidation have We to now expect We in our sector. is inevitable see more mergers and acquisitions activity support should actively Rasmala and believe industry that consolidation. drive initiatives Acknowledgements All of our efforts report mentioned in my come together to create the right environment and opportunities to grow and succeed in a disciplined way. Our continued success is a reflection of the hard at and is testament Rasmala everyone work by to the calibre of and continue have we individuals thank all our staff to like to attract. I would for to our success and finally their contribution Al-Mouallimi, and our Chairman, Abdallah Y. counsel and unstinting their wise the Board for support. to be conditions continue Although market to 2016 with great I look forward challenging, Group. the Rasmala for hope and expectations optimism and liquidity. Investment outflows from Investment optimism and liquidity. producing asset backed the region to income strategies and US continues. in Europe from economic fundamentals, The region benefits including significant international reserves and this should help coupled with low debt, withstand the downturn.regional economies The privatisation reforms process and subsidy should ultimately but the deficits, help manage budget will continued push to grow the non-oil economy determine the long-term success ofthe GCC. have across the GCC region Governments the by realised that true driven diversification, regardless to future success, is key sector, private of what believe happens to the oil price and we an important will have Rasmala organisations like are confident that we the At Rasmala role to play. and this will create region will continue to diversify opportunitiesunique business us. for
Annual Report and Accounts 2015
Rasmala plc 30 Market outlook Market We maintain our beliefWe in the GCC countries on being an independent and pride ourselves the champion in the region. In our view, underlying fundamentals of remain the region The region is volatility. despite recent positive, as (private wealth home to significant investor funds), low debt wealth as through sovereign well / GDP ratios and of largest course the world’s concentration of to a According hydrocarbons. in certain scenarios the GCC recent EY study, in economy region could become the sixth largest in size 2030, making it comparable by the world to Japan. the GCC region Despite the headwinds faced by and regional geopolitics oil prices, from lower offer that these markets believe we macro factors, opportunities, a gone through having attractive period of correction in late-2015 and early-2016. GCC countries’ economies are going through a period of consolidation and reform and the regional governments measures announced by while planned aim to boost non-oil revenues, reformssubsidy the can only be good news for region. climate GCC bonds and for The investment after the extreme equities continues to improve seen at the startvolatility of fears 2016. Market appear to be slowdown based on oil and China’s abating in the price of and the recent recovery oil and other commodities is supporting market Tender offer Tender value on our promise to deliver delivered We completing our back to our shareholders by tender offer 2015. The tender offer on 6 May was the Group. a success for and was oversubscribed
Strategic review (Continued) Strategicreview that across the Group brand is recognised by After conducting our clients and stakeholders. independent research we and client surveys Group under the decided to unify the name. Rasmala clarity This strategic decision has provided and strengthened our to all our stakeholders also We markets. position in our core competitive half in the second activity increased marketing of to support the year hosting investor the brand, workshops, seminars and sales and distribution as completing a refresh ofas well the brand, and publishing a upgrading the website white paper. 3.2 Chief Executive’s The Strategic Report 33
Annual Report Accounts 2015 and
Rasmala Trade Finance Finance Trade Rasmala 1** Leasing Fund Rasmala 2** Leasing Fund Rasmala
l l l Fund** Rasmala plc Distribution / business / business Distribution development completed funding In March 2015, we Leasing Fund 1 investing Rasmala for 21 $58m (£39.1m) in 86 leases across companies and 13 industries. launched the Rasmala 2015 we In August deployed Leasing Fund 2 and have $14.4m (£9.7m) in 16 leases across industries. companies and four seven returned we $7m (£4.7m) the year, Over to our leasing fund unit in distributions amount a total cumulative for holders, of our began we $11.2m (£7.4m) since leasing programme. Finance Trade In 2015, the Rasmala $93m (£62.7m) Fund financed over related with $55m in trade financings, made We (£37.1m) repaid during the year. to unit holders in 2015 ofdistributions $3.75/unit (£2.53/unit). In March 2015, we increased headcount in preparation for future expansion. strengthened our we In the GCC, entities, relationships with sovereign new accounts in the UAE. opening two continued to focus Throughout 2015, we of high levels on providing client service and strengthening our relationships with supporting distributors, them by key strategies that match defining investment GCC Fixed GCC Fixed Global Rasmala
Fixed IncomeFixed Alternatives Income Funds* Sukuk Fund* l l funds
Equities Arabian Markets Growth Equity Growth Equity Markets Arabian Equity GCC Islamic Rasmala Fund* Palestine Rasmala
strategy strategy investment Fixed income portfolios investment income portfoliosFixed investment portfolio strategy investment Alternative Shari’a-compliant portfolio Balanced portfolio strategy l l l Funds* Income Fund* Money market portfolio market Money strategy Assets under Management recorded strong inflows In 2015 we into our recently-launched alternative strategies ofinvestment leasing, In total, real estate. finance and trade $404m (£272m) in received we $248m (£167m) subscriptions and over broad decline The in in redemptions. contributed equity markets the region’s resulting in AUM, to our overall negatively in terms flat year ofan overall AUM. Wide range of range Wide domiciled funds domiciled funds ** Cayman * Luxembourg l l l l l 2015 review Our a challenging year. 2015 was shaped strategy was investment a balance between to strike having by conditions. global and regional market also had to we At the regional level, and geopolitical into account complex take economic factors. of a year it was At the same time, steady progress our client in strengthening base and launching new products.
Eric Swats, Management Asset Head of “At Rasmala, we we Rasmala, “At tailor investment thatsolutions match the investment needs of our clients. supportWe and closelywork with our institutional clients to help them achieve their investment objectives.” portfolio investment strategy portfolio investment MENA / GCC / single country equity l to Luxembourg as UCITS IV Funds and to Luxembourg subsequently completed the migration of funds into a Luxembourg-based our key enhancing the platform. This involved and regulatory our investors, for oversight the redemption/subscription improving to daily Net Asset frequency from weekly With this new structure in place, Values. our positioned to expand are well we client reach into international markets jurisdiction assures as the Luxembourg and scalability of transparency accessibility, product offering. Rasmala’s Customised Discretionary Mandates offer of a wide range We portfolio capabilitiesmanagement catering to the needs of our GCC and institutional clients. Our various discretionary portfolio strategies include: Annual Report and Accounts 2015
Rasmala plc 32 Our UCITS Funds commenced a major In 2013, Rasmala open- project to re-domicile our existing Islands ended funds from the Cayman Our award-winning Asset Management Asset Management Our award-winning team is made up of investment with global expertiseprofessionals and The geographical spread local knowledge. of identify team allows us to effectively our opportunities making full use by investment of and access experience local market our team applies to information. Our investment rigorous and defined investment clear, processes in their approach to managing our clients’ investments. of with a range our investors provide We products and tailored investment investment in the UK, MENA, invest We solutions. where we Africa and other global markets and expertise. in-depth knowledge have Capabilities & organisational structure
Asset Management Asset 3.3 Operating3.3 Review Financial and The Strategic Report 35 ‘ Annual Report Accounts 2015 and
Rasmala plc We are well well are We to positioned capitalise on this market challenging environment launched having new investment strategies We expect continued interest in Shari’a-compliant expect We products and will be launching investment share new products to increase our market in this segment. to diversify GCC investors also expect We uncorrelated from the region into low risk, away product set Our expanded strategies. investment and positioned to attract new investors is well assets in this environment. International interest in the MENA equity progresses, volatility will rise as the year markets declines and underlying value is inherent will be opportunisticrecognised. Local investors their focusing in their regional equity investments, companies with high in well-managed investments payments. and sustained dividends will continue to income investments Fixed progresses the year As outperform deposits. interest rates, raises Reserve and the Federal deposits and longer- the competition between securities will become more dated fixed-income preferring the investors balanced with many returnsteady of deposits. positioned in this challenging market are well We launched new investment having environment, strategies which of will perform regardless well and direction. In sentiment market the overall 2016 our efforts on establishing will be focused channels institutional and direct new distribution client in order to capitalise relationships, on our product offering. expanding ‘ Our strategy 2016 for the asset gathering environment expect We sentiment will be difficult in 2016 due to investor The GCC region will volatility. and market continue to face pressure from low oil prices and the lagged effect of the sharp decline in the price of crude as regional geopolitical in 2015, as well tensions and uncertainties. The prospect of rising interest rates in the US will put further pressure on regional economies. their investment objectives, designing investment designing investment objectives, their investment training. products and providing of a long heritage have We with some of working as regional banks as well the leading local and companies in the UAE. insurance included in the Rasmala Institutional Investor 20 asset managers for in the Middle East Top year. the third consecutive in technology Investment serviceand client in investment increased our Throughout 2015 we technology to enhance our clients’ experience. implemented the IMSPlus investment We platformmanagement and upgraded our the asset management system to improve functioning of fund management our asset and operations and to enable us to respond efficiently The new platformto our clients’ needs. will be rolled out fully in 2016. implemented Salesforce, 2015, we In June the automated relationship customer (CRM) platform,management to help us our clientbetter manage prospect and efficiency and increase improve relationships, ofthe sales productivity teams. our & performance Innovation Product: able were professionals In 2015 our investment the difficult market to successfully navigate returns in well producing investment conditions, ofexcess industry-recognised benchmarks, and at the top of peer groups. their respective In recognition of our strong investment various awards performance won Rasmala Income Manager of Fixed including Regional the ofand Egypt Equities Manager the Year. Year Dec Nov Oct Sep 2015 AUM 1,072 Dec 2015 Aug July
2015 (197) Jun Market effect Market May
Apr Dec 2014 vs Dec 2015 Dec 2014 2015 (248) Mar Redemptions Feb
404 2015 Jan Subscriptions Finance Fund (AUM in USD million) Finance Fund (AUM Dec
Nov AUM 1,113 Oct Dec 2014 Annual Report and Accounts 2015
Sep 2014 0 90 80 70 50 40 30 20 60 10
0 200 600 400 800
(200)
(400) 1,000
1,200
Rasmala plc $’millioms $ millions $ Rasmala Trade 34
Assets under ManagementAssets under 3.3 Operating and Financial Review: 3.3 Operating Review: Financial and (Continued) Management Asset The Strategic Report 37
Annual Report Accounts 2015 and
Rasmala plc Anwar Abusbaitan, Co-Head of Investment Banking Our strategy 2016 for Banking team continues to The Investment grow estate its real offering and capabilities by into European and US opportunities.expanding are committing resources to developing We advantage real estate products to take UAE of specific opportunities In in local markets. their addition, clients to diversify are looking from plain- away real estate investments blue-chip tenant single vanilla, long-lease, towards commercial and industrial buildings require a higher degreeassets which of may These may asset management or repositioning. residential refurbishments example, for include, or shorter and lease commercial buildings, such opportunities those will be tailored for clients seeking higher yields. its product The team will also seek to expand considering bolt-on acquisitions to offering by that business meet our strategic the existing objectives. and in capital continue to innovate markets We plan to arrange further sukuk. asset-backed Investment Banking business and we and we Banking business Investment on our success, to building look forward heritage along with our expertise, investment structuring innovative to provide and culture, and advisory services that meet the unique needs of client. every By the end ofBy the end team was a strengthened 2015, client relationships established key in place, successfully closed, transactions and two participantconfirming a key as in Rasmala of initial focus The the UK real estatemarket. has been on the UK commercial the business assets valued for market, and industrial office to £30m with long leases to £10m between highly-rated single tenants. announced the expansion In October 2015 we of on focusing our real estate business, real originating, structuring and executing opportunities estate and we investment ofsimultaneously announced the acquisition The £11.8m. for a commercial office building is occupied on a long-lease basis office building the mobile telecommunications operator by Everything Everywhere Ltd and located on the InternationalThe office Doxford Business Park. total area of a covers building 66,500 sq ft (6,200 sq m). acquired three In December 2015 we properties Park, in Celtic Springs Business Newport. The properties are entirely let to a division and Space, Defence Airbus of Group. Airbus success in the UK real estate Rasmala’s can be attributed to the not only market ofexcellence team and our transaction the but investors, close relationships with key which carriesalso our ability to underwrite, and credibility when significant weight assets. bidding for In addition, the unification of our brand has increased the under the name Rasmala recognition across multiple markets. Group’s are to which we As a result, the due diligence counterpartiessubjected by such as asset and financing banks is made easier. vendors jurisdictions allows the Our licensing in key Group to operate seamlessly, efficiently and our counterparties and gives and investors considerable comfort our ability in close to cross-border transactions. Despite the demand from GCC investors UK, European and US real estate, for opportunities the are limited by in the market lack of on-the-ground origination capabilities excellent and asset class Rasmala’s expertise. participantsrelationships with market including law firms, institutional vendors, brokers, banks and othersadministrators, help us stand out from our competitors. the for 2015 has been a watershed year
2015 review Rasmala appointments during 2015 allowed Key Banking capability and its its Investment to expand real estate offering. the successfully executed In March 2015, we issuance of the second tranche of perpetual tier 1 capital of the National $136m for Bank of bank (rated BBB+/Baa1) a leading UAE Fujairah, with a long-established reputation in the areas of corporate The bank is and commercial banking. ofcommitted to the economic development the UAE. and acquisitions, private equity and structuredand acquisitions, our broad and deep Given products. investment technical expertise in all of Rasmala these areas, tailored solutions to its clients. is able to deliver portfolios of the investment In diversifying their clients our institutional customers, typically to creatework with Rasmala white-labelled originated and structured products, investment Banking team. Investment the Rasmala by Demand is currently UK, European for strongest and US income-producing real estate assets grade sukuk. In addition, and investment real estate clients continue to seek attractive opportunities in the UAE. Harris Irfan, Co-Head of Investment Banking “We apply the highest “We quality structuring expertise in Islamic banking to investment create tailored asset- and structuredbacked Our finance products. institutional clients value our approach to bespoke relationship management and market-leading technical capabilities.”
Annual Report and Accounts 2015
Rasmala plc 36 The Investment Banking team is composed The Investment of structuring and placement professionals In with global expertise and local knowledge. Investment transactions, complex executing close supportBanking enjoys from the Legal, Investment Risk and Operations teams. Treasury, capabilities from across the Banking’s are drawn geographical and asset class spectrum. on the creation Banking focuses and Investment ofdistribution asset-backed Shari’a-compliant differentiate We instruments. and capital markets the quality of by ourselves our structuring expertise, which leader establishes us as a market in terms of innovation. structure originate, and manage Whether we real estate opportunitiesinvestible or structure and arrange sukuk, our approach to product design has the hallmarks of technical ability bulge-bracket approach our for combined with a bespoke but institutional client base. on the experience Banking draws Investment of team across asset classes the including real (including debt and equity capital markets estate, mergers finance, sukuk), project and asset-backed
Capabilities & organisational structure Investment Banking Investment Governance Corporate
Rasmala plc Board Members. Front row left to right: Chairman, Abdallah Y. Al-Mouallimi; John Robertson Wright. Back row left to right: Chief Executive Officer Zulfi Caar Hydari; Michael Willingham-Toxvaerd; Martin Gilbert Barrow; Neil McDougall
38 Rasmala plc Annual Report and Accounts 2015 4. Corporate Governance 4.1 Overview
The Board considers good corporate governance l Long-term objectives of the Group and the auditor and the adequacy of their resources; the which comprises Mohammed Al Sarhan to be central to achieving the Company’s strategies necessary to achieve them effectiveness of the systems for internal control, (Chairman) and Abdallah Y. Al-Mouallimi, reviews objectives and has applied the 2013 Quoted l Budgets and plans risk management and compliance with financial the composition of the Board, taking into account Companies Alliance Corporate Governance Code services legislation and regulations; procedures the skills, knowledge and experience of Directors l Significant credit exposures for Small and Mid-size Quoted Companies (the by which staff may raise concerns in confidence; and considers and makes recommendations to the QCA Code) in drawing up the Company’s risk l Significant capital expenditure items and the results of the external audit and reports Board on potential candidates for appointment as management framework. This enables the Board l Significant investments and disposals from the external auditor and their findings on Directors. to balance the need for systems and procedures l The organisational structure of the Group accounting and internal control systems. The committee also makes recommendations with the need for flexibility and entrepreneurship l Arrangements for ensuring the Group manages Based on the work outlined above, the Audit to the Board concerning the re-appointment of essential to a growing company. While the risk effectively Committee is satisfied that the external auditor is any Non-Executive Director at the conclusion of Company is not required to comply with the independent and will ensure that their findings will his or her specified term; the re-election of any l Any significant change in accounting policies or UK Corporate Governance Code, the Board be considered. Director by the shareholders under the retirement practices nevertheless fully supports the principles it sets provisions of the Articles of Association; any out and seeks to comply wherever appropriate for l Appointment of the Group’s main professional Nomination and matters relating to the continuation in office of a its size and complexity. advisers Remuneration Committee Director; and the appointment of any Director to l Appointment of senior executives within the The Nomination and Remuneration Committee, executive or other office. Board composition & role organisation.
The Group is led by a Board comprising Non- The Board gives its committees the power to make Governance Corporate Executive and Executive Directors with significant decisions on operational matters, including those experience in financial services and deep relating to credit, liquidity and operational and relationships in our core markets. The appointment market risk, within an agreed framework. Corporate Governance Framework of Directors is considered by the Nomination All Directors have access to the Company and Remuneration Committee and then the Secretary’s services, and independent professional Chairman Executive Directors Non-Executive Directors Board. Following the provisions in the Articles advice is available to the Directors at the Group’s Abdallah Y. Zulfi Caar Hydari Abdallah Y. Al-Mouallimi of Association, all Non-Executive Directors must expense, where they judge it necessary to Al-Mouallimi Neil McDougall Mohammed Al Sarhan stand for re-election by the shareholders at the discharge their duties as Directors. Michael Willingham-Toxvaerd first Annual General Meeting following their appointment and must also stand for re-election by The Board reviews and approves its composition John Robertson Wright the shareholders at least every three years. and charter in order to set the risk management Martin Gilbert Barrow framework of the Group at least once a year. Executive Directors normally retire at the age of To assist the Board in executing its functions, 65, as required by their service agreements. Non- it reviews and approves the composition and Executive Directors are appointed for three-year charters of the following Board sub-committees. renewable terms, which may be terminated by giving three months’ notice. Audit Committee Audit Nomination & Board Risk Shari’a The Audit Committee comprises John The Board is required to meet at least three Committee Remuneration Committee Supervisory times a year and in 2015 there were six Board Wright (Chairman) and Mohammed Al Committee Chairman Committee Chairman meetings. The Board’s programme is designed to Sarhan. The committee reviews the external Chairman John Chairman Abdallah Y. enable the Directors to review corporate strategy auditors’ remuneration and, in discussion Sheikh Nizam Robertson Mohammed Al Al-Mouallimi and the operations and results of the business with them, assesses their independence and Yacouby Wright Sarhan Members and to discharge their duties within a framework recommends their re-appointment at the Members Members Members Martin Gilbert of prudent and effective controls relating to the Annual General Meeting. Dr. Aznan Bin Mohammed Abdallah Y. Barrow assessment and management of risk. The committee also reviews the financial Hasan Al Sarhan Al-Mouallimi The matters specifically referred to the statements published in the name of the Board Zulfi Caar Hydari Dr. Talha Board include: and the quality and acceptability of the related Azami l Approval of the annual report and financial accounting policies, practices and financial statements; reporting disclosures; the scope of work of the internal auditor, reports from the internal l Payment of dividends
40 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 41 4.1 Overview (Continued)
The committee also evaluates the performance of the Board and its committees and makes appropriate Split of recommendations to the Board. This is a self-assessment process that requires each Director to assess and rate directors the performance of the Board and its committees. The results of the exercise are considered by the CEO, Board and appropriate steps agreed and implemented Executive Director to remedy any areas of deficiency or concern. 2 The Nomination and Remuneration Committee reviews the remuneration policy for senior management. It ensures that members of the executive are provided with appropriate incentives to encourage them to enhance the Group’s performance and that they are rewarded for their individual contribution to the organisation’s success. It is also made aware of, and advises on, major changes to employee benefits schemes. Board Risk Committee The Board Risk Committee comprises Abdallah Y. Al- Mouallimi (Chairman), Martin Barrow and Zulfi Caar Hydari. The Board Risk Committee assists the Board in fulfilling its investment risk management responsibilities. Governance Corporate
These include determining the Group’s risk profile Non-Executive Chairman and ensuring that management works within the Director 1 Board’s predetermined risk appetite. The terms of (1 independent) reference include reviewing capital adequacy, liquidity, 4 credit risk, market risk, operational risk and approvals under the Board’s delegated authority. Executive Management Committee The Group has an Executive Management Committee ‘ to assist the Chief Executive Officer in performing his duties. Meetings are held at least once a month and membership comprises the Chief Executive Officer and senior management from Finance, Risk, Treasury, Principal Investments, Investment Banking, Asset Management, Legal, Compliance and HR. Specifically, the committee The Board must considers the development and implementation of strategy, operational plans, policies and budgets; the monitoring of meet at least operating and financial performance; the assessment and control of risk; the prioritisation and allocation of resources; three times a human resources; and the monitoring of competitive forces in each area of operation. year; in 2015 The committee, assisted by its sub-committees, also supports the Chief Executive Officer in ensuring the there were six development, implementation and effectiveness of the Group’s risk management framework and the clear board meetings articulation of the Group’s risk policies, and in reviewing the Group’s aggregate risk exposures and concentrations of risk. The committee may have specific powers delegated to it by the Board from time to time and, following the exercise of these powers, it reports to the Board. ‘
42 Rasmala plc Annual Report and Accounts 2015 Director of Hong Kong and China, before being finance support, from performance management appointed to the board of Jardine Matheson Ltd in and decision making through to product control, 4.2 Board of Directors 1989. Mr Barrow is a Director of Matheson & Co valuations control and financial and regulatory Limited, China Britain Business Council and the reporting. Prior to this, Neil also covered senior Hong Kong Association. roles at Bank of Nova Scotia, Dai-Ichi Kangyo Non-Executive Directors John Robertson Wright* (now Mizuho) and started his career at Kleinwort (1). Chairman of the Audit Benson Merchant Bank. He obtained his CIMA H.E. Abdallah Y. Al-Mouallimi Executive Directors Committee and Non-Executive qualification in 1993. Zulfi Caar Hydari (2), (3). Chairman of the Director of Rasmala. Mr Board and Chairman of the Wright is a career banker with Mr Hydari is Chief Executive (1) Member of the Audit Committee (2) Member of the Nomination and Remuneration Committee Board Risk Committee of strong experience in UK and of Rasmala and Group Chief Rasmala. Abdallah Y. Al- (3) Member of the Board Risk Committee international markets including Executive of Rasmala Hold- * Independent Director Mouallimi is currently the assignments in India, Sri Lanka, ings Limited. He is a special Permanent Representative West Africa, Canada, Hong situations private equity of Saudi Arabia to the United Kong and the US. He served as a board member, investor with significant experi- Independence Nations. He has held various ence in raising capital from Chairman of the Audit Committee and latterly The Independent Non-Executive Directors are senior government and private sector positions GCC based investors and Chairman of Butterfields Bank UK from 2001 to considered by the Board to be independent of including Ambassador to Belgium, Luxembourg and implementing post-acquisition value enhancement 2014. He was formerly Chief Executive of Oman management and free of any relationship which the European Union, Mayor of Jeddah, member strategies. Mr Hydari is also Co-Founder of HBG International Bank for seven years, Chief Executive could materially interfere with the exercise of of the Saudi Consultative Council and Director of Holdings, a special situations private equity firm. He of the Northern and National Irish Banks in Ireland their independent judgement. Saudi General Organization for Military Industries. for five years, Chief Executive of the Gulf Bank in holds an MBA from Cranfield University. His private-sector service includes chairing the Kuwait and finally Chief Executive of Clydesdale & They do not have a significant shareholding Jeddah Chamber of Commerce as well as holding or represent a major shareholder, they receive Yorkshire Banks prior to retirement. Neil McDougall the roles of Vice-Chairman of Olayan Financing no remuneration from the Company other He has also served as a Non-Executive Company and Managing Director of Coca-Cola Neil McDougall is an than Directors’ fees, they have no day-to-day Director of banks in Oman, London and Bermuda Bottling Company, Saudi Arabia. He has been a experienced professional involvement in running the business and have and as Chairman of companies in Northern Ireland board member of Saudi Telecom Company, Saudi with many years of senior never been employees of the Company, they
and Scotland. He is a Fellow of the Chartered Governance Corporate National Commercial Bank and Egypt Finance management experience in have no personal financial and/or material Institute of Bankers in Scotland and the Chartered Company, amongst others. He is also Co-Founder international environments. Institute of Bankers in Ireland and is a visiting interest in any other matters to be decided, and Chairman of HBG Holdings. He has a Masters Prior to joining Rasmala, Professor at the Business School at Heriot Watt such as contracts, and they have no conflicts of in Management from Stanford University and a Mr McDougall served in University in Edinburgh. interests arising from cross-directorships. Bachelor of Science in Chemical Engineering from senior finance roles in various organisations Oregon State University. Michael Willingham-Toxvaerd including Europe Arab Bank plc, Commerzbank The Board considers that the Independent and Standard Chartered. In his previous roles, Non-Executive Directors are of sufficient Mohammed Al-Sarhan* Non-Executive Director of Rasmala. Michael he has been responsible for all aspects of global calibre and number to bring independence (1), (2). Senior Independent Willingham-Toxvaerd is Director and Chairman of the Managing Partner of HBG Nomination and Remuneration Holdings UK LLP. He also holds Committees Committee of Rasmala. Until Nomination and a number of other directorships. 2010 Mohammed Al Sarhan Board Audit Renumeration Risk He has significant experience was Vice President and in capital markets, mergers Chief Operating Officer of Al and acquisitions, and founding, financing and listing Faisaliah Group, Kingdom of Abdallah Y. Al-Mouallimi l ✓ l companies on the London Stock Exchange. He is Saudi Arabia. also experienced in private equity and holds an Zulfi Caar Hydari ✓ ✓ Previously he was the Vice President of the MBA from Cranfield University. Saudi Arabian Refining and Marketing Company Mohammed Al Sarhan ✓ ✓ l (SAMAREC). Currently he is the Chairman of Al Martin Gilbert Barrow* CBE Safi Danone Company, and a board member of John Robertson Wright ✓ l (3). Non-Executive Director Alfaisaliah Group Holding Company. of Rasmala. Martin Barrow Michael Willingham-Toxvaerd ✓ He is Vice Chairman of the National Shipping has extensive knowledge of Company of Saudi Arabia; Chairman of the Board Asia, having worked in the Martin Gilbert Barrow ✓ ✓ of Riyadh Airports Company and a board member region for 35 years with Jardine Neil McDougall ✓ of the Saudi Civil Aviation Holding Company. He Matheson. After joining the is also a board member of Venture Capital Bank Hong Kong operations in 1965, in Bahrain, and a board member of Goknur Juice he served as President of the l Chairman Company in Turkey. He holds a BSc (Mathematics) Group’s affiliate in Saudi Arabia, Managing Director ✓ Member from Oregon State University, USA. of the operation in Japan and Regional Managing
44 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 45 4.2 Board of Directors Board of Directors’ responsibilities (continued) l Assisting the CEO in day-to-day management of the Group’s business (Continued) Neil McDougall l Ensuring the financial risks of the Group are properly managed Chief Financial Officer l Responsibility for oversight of all financial, regulatory reporting and and Company Secretary Board of Directors’ responsibilities management information l l Leadership and the effective operation of the Board Organising, preparing agendas for and ensuring accurate minutes are Abdallah Y. Al-Mouallimi kept of board meetings and annual general meetings (AGMs) l Chairing the Board and BRC Chairman of the Board & l Ensuring statutory books, including registers of members, Directors l Setting the agenda, style and tone of Board discussions and secretaries are properly maintained Chairman of BRC l Debate and effective individual contribution l Ensuring compliance with the required standards of good corporate l Ensuring that all Directors receive clear and accurate information governance on a timely basis l Overseeing correspondence, collating information and writing reports, l Ensuring the effectiveness of the Board through induction, ongoing ensuring decisions made are communicated to the relevant company training and regular evaluations stakeholders including shareholders, auditors, regulators, the Nomad l Effective communications with shareholders and the stock exchange
Zulfi Caar Hydari l Day-to-day management of the Group’s business Summary of board meetings Chief Executive l Formulating strategic business objectives for Board approval and implementing approved strategic objectives and policies Officer Nomination & l Managing and optimising the operational and financial Main Audit Remuneration Board Risk Committee performance of the business in conjunction with the Group Board Committee Committee
Finance Director Governance Corporate No. of meetings in year l Fostering a good working relationship with the Chairman l Chairing the Management Board and developing senior talent Abdallah Y. Al-Mouallimi 6 - 4 4 within the business for succession planning Mohammed Al Sarhan 5 6 4 -
Michael Willingham-Toxvaerd 6 - - - John Robertson Wright l Monitoring the integrity of the financial statements and any formal announcements relating to financial performance John Robertson Wright 6 7 - - Chairman Audit Committee l Monitoring and reviewing the effectiveness of internal Zulfi Caar Hydari* 6 7* 4* 4 audit function Martin Gilbert Barrow 6 - - 4 l Making recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditor Neil McDougall** 6 7 4 4 and approving the remuneration and terms of engagement of the auditor Total number of meetings held 6 7 4 4 l Reviewing the auditor’s independence and objectivity *Attended as a non-member ** Non-member l Overseeing regulatory compliance and anti-money laundering Board performance evaluation The Company undertakes an annual evaluation of the performance of the Board, its committees Mohammed Al Sarhan l Acting as a sounding Board for the Chairman and its Directors. The evaluation is led by the Chairman of the NRC. Where necessary specific Senior Independent l Serving as an alternative contact and intermediary for other actions are identified to improve performance and governance. Director and Chairman directors and shareholders of the NRC l Leading the Board’s annual performance appraisal and ultimate succession
46 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 47
4.3 Risk Management
“The effective management of ‘ Risk management strategy & risk is an essential philosophy The principle part of our business The key elements of our risk management and a key element framework are: of individual l Setting the risk management strategy and accountability and in good corporate philosophy; governance. Risk l Defining the business risk appetite and responsibility for management is tolerances; l Identifying and quantifying risks; risk awareness, a fundamental l Evaluating identified risks; monitoring and component of the l Managing identified risks; management is a firm’s organisational l Reporting to support on-going risk management and the effectiveness of risk key feature of culture.” solutions; l Business continuity planning our culture.
Larry Sacks, Governance Corporate The Group’s approach to risk is documented ‘ Group Head of Risk Management in our risk appetite statement which sets out the broad risk appetite and tolerance policy as well as guidelines across a number of areas, including: aligning to the policy and procedure framework. Risk-taking l Strategic risk is a fundamental component of the firm’s The register introduces a standard risk l Reputational risk Rasmala’s business model involves taking risk organisational culture, deeply integrated in language and methodology for identifying, in return for reward. Our MENA regional focus our day-to-day processes and controls. l Liquidity evaluating, measuring and reporting risks offers opportunities for financial returns but While the Board is responsible for risk overall, l Profit rate risk to ensure a consistent approach to risk exposes us to emerging market social, political the principle of individual accountability and l Credit / investment risk – by asset type, management. and economic risks. responsibility for risk awareness, monitoring and geography, industry and rating Three lines of defence The Group is exposed to: management is a key feature of our culture. The risk appetite statement provides direction Our framework uses a ‘three lines of defence’ The Group’s approach to risk is documented as to the levels of risk which the business can l Market risk in relation to its assets approach to managing risk: and liabilities in various risk policies, which the Board take and is reviewed annually. The statement Risk Committee has overall responsibility incorporates risk limits which, if reached, will l Credit risk from transactions with third 1. Business management who ensure the for ensuring are implemented. Under these prompt management to take action to reduce parties, particularly money market and Group is managed on a day-to-day basis in policies, risk is monitored on a daily basis. risk levels. These are supported by specific fixed income transactions accordance with our risk appetite. Systems and controls are in place to identify, key risk indicators to ensure the Board is able l Liquidity risk from liquidity mismatches measure, monitor and manage risk. to assess levels of risk across the business 2. The Risk and Compliance functions which and operational risk. against the mandated appetite. monitor the financial, investment, operational The responsibility for managing risks and regulatory risks in the business and the Roles lies with senior management. The Risk The risk register describes key risks and their related risk management controls. Effective management of risk is an essential Department facilitates this process and owners, together with the causes and effects part of our business and a key element of monitors the effectiveness of the Group’s of each risk. It documents which boards and 3. Independent assurance provided by good corporate governance. Risk management risk management processes. committees oversee these risks as well as internal audit.
48 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 49 4.4 Directors’ Report 4.5 Statement of Directors’ Responsibilities The Directors of Rasmala plc (registration number Political contributions and charitable 5328847) present with pleasure their annual report, donations together with the audited financial statements, for The Group made no political contributions or The Directors are responsible for company financial statements, the the year ended 31 December 2015. charitable donations during the year. preparing the Annual Report and the directors are required to: Group and parent company financial Dividend l Select suitable accounting policies and Principal risks and uncertainties statements in accordance with The company will not be paying a dividend for the then apply them consistently; year ended 31 December 2015. Refer to the Strategic Report and to Note 40 on applicable laws and regulations. l Make judgments and estimates that page 100 of the financial statements. Company law requires the directors to Directors are reasonable and prudent; prepare Group and parent company The Directors serving at the date of this report and Financial instruments financial statements for each financial l State whether they have been during the year are shown on pages 44 and 122. Refer to the Strategic Report, which includes the year. As required by the AIM Rules of prepared in accordance with IFRSs as Neil McDougall was appointed to the Board on 24 Group’s financial risk management and information the London Stock Exchange they are adopted by the EU; and November 2015. on its exposure to market, credit and liquidity risk. required to prepare the Group financial l Prepare the financial statements on statements in accordance with IFRSs as Directors’ interests Future developments the going concern basis unless it is The Directors who held office at the end of the adopted by the EU and applicable law Refer to the Strategic Report. inappropriate to presume that the financial year had the following beneficial interests and have elected to prepare the Parent Group and the parent company will in the ordinary shares of the Group, according to Events since the reporting dates company financial statements on the continue in business. the register of Directors’ interests. The table shows The Directors confirm there are no significant same basis. the number of shares held as a percentage of total events arising since the reporting date that should The Directors are responsible for The Directors are responsible for shares in issue at that time: be reported to shareholders other than those keeping adequate accounting records the maintenance and integrity of the disclosed on page 118. that are sufficient to show and explain company’s website. Legislation in the
the parent company’s transactions and Governance Corporate UK concerning the preparation and Name Class of share Interest at end of year Interest at start of year disclose with reasonable accuracy at any dissemination of financial statements Mohammad time the financial position of the Parent Ordinary 110,911 110,911 may differ from legislation in other Al Sarhan company and enable them to ensure that 50p (0.36%) (0.29%) jurisdictions. its financial statements comply with the Under company law, the Directors must Companies Act 2006. not approve the financial statements Chairman Abdallah Y. Al-Mouallimi and Michael Going concern They have general responsibility for unless they are satisfied that they give a Willingham-Toxvaerd hold indirect beneficial In approving the financial statements, the Directors taking such steps as are reasonably true and fair view of the state of affairs interests in Rasmala by virtue of their participation have reviewed the current and potential future open to them to safeguard the assets of the Group and parent company and in HBG Group fund structures, which in turn hold business activities and financial position of the of the Group and to prevent and detect of their profit or loss for that period. In 17.80% of Rasmala’s shares. None of the other Group, including an assessment of the capital fraud and other irregularities. Directors who held office at the end of the financial adequacy and liquidity forecasts. preparing each of the Group and parent year had any other disclosable interest in the shares Based upon this they are satisfied that the Group of the Group. According to the register of Directors’ has adequate resources to continue in business By order of the Board, interests, no rights to subscribe for shares in the for the foreseeable future. For this reason, the Group were granted to any of the Directors or their Directors continue to adopt the going concern basis immediate families, or were exercised by them, in preparing the financial statements. during the financial year. Auditors Qualifying third party indemnity The Directors who held office at the date of provisions approval of this Directors’ report confirm that, so ______The company has arranged qualifying third party far as they are each aware, there is no relevant indemnity for all of its Directors. audit information of which the Group’s auditors are Zulfi Caar Hydari unaware, and each Director has taken all steps Chief Executive Officer Shari’a Supervisory Board members that he ought to have taken as a Director to make 26 April 2016 The Shari’a Supervisory Board Members are: himself aware of any relevant audit information and Registered Office: to establish that the Group’s auditors are aware of l Sheikh Nizam Yacouby (Chairman) Milton Gate that information. l Dr. Aznan bin Hasan 60 Chiswell Street l Dr. Talha Azami London EC1Y 4SA
50 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 51 Governance Corporate
52 Rasmala plc Annual Report and Accounts 2015 4.6 Report of the Shari’a 4.7 Independent Auditor’s report Supervisory Board to the members of Rasmala plc We have audited the financial statements of l the group financial statements have been properly To the Shareholders of Rasmala plc We conducted our review which included Rasmala plc for the year ended 31 December prepared in accordance with IFRSs as adopted by (“Rasmala”) examining, on a test basis, each type of 2015 which comprise the consolidated and the European Union; company statement of financial position, the transaction, the relevant documentation l the parent company financial statements have For the period 1 January 2015 to 31 consolidated statement of comprehensive income, and procedures adopted by Rasmala for been properly prepared in accordance with December 2015 (the “Period”) the consolidated and company statement of cash the transaction during the Period. Based on IFRSs as adopted by the European Union and as flows, the consolidated and company statement of Assalamu Alaikum Wa Rahmat Allah Wa this we are of the opinion that the contracts, applied in accordance with the provisions of the changes in equity and the related notes. Barakatuh transactions and dealings entered into Companies Act 2006; and by Rasmala during the Period that were In compliance with our letters of The financial reporting framework that has been l the financial statements have been prepared reviewed are in compliance with Shari’a applied in their preparation is applicable law and appointment with Rasmala, we are required in accordance with the requirements of the rules and principles. We also reviewed International Financial Reporting Standards (IFRSs) to submit this report. Companies Act 2006. the overall activities of Rasmala and as adopted by the European Union and, as regards We have reviewed the principles and discussed with management the presence the parent company financial statements, as applied the contracts relating to a sample of Opinion on other matters prescribed of legacy assets within the group. We find in accordance with the provisions of the Companies transactions conducted by Rasmala during the majority of legacy non-compliance to Act 2006. by the Companies Act 2006 the Period. We have conducted our review have been successfully resolved and note In our opinion the information given in the strategic This report is made solely to the company’s to form an opinion as to whether Rasmala that management is currently undertaking report and directors’ report for the financial year members, as a body, in accordance with Chapter has complied, during the Period, with further efforts with our assistance to resolve for which the financial statements are prepared is 3 of Part 16 of the Companies Act 2006. Our audit Shari’a rules and principles and also with outstanding matters relating to a minority of consistent with the financial statements. the specific fatwas, rulings and guidelines assets. work has been undertaken so that we might state issued by us. to the company’s members those matters we are We beg Allah the Almighty to grant us all Matters on which we are required to
required to state to them in an auditor’s report and Governance Corporate Rasmala’s management is responsible success and straight-forwardness. for no other purpose. To the fullest extent permitted report by exception for ensuring that Rasmala conducts its Wassalam Alaikum Wa Rahmat Allah Wa by law, we do not accept or assume responsibility to business in accordance with Shari’a rules We have nothing to report in respect of the following Barakatuh anyone other than the company and the company’s and principles. It is our responsibility to matters where the Companies Act 2006 requires us members as a body, for our audit work, for this form an independent opinion, based on our to report to you if, in our opinion: 22 April 2016 report, or for the opinions we have formed. review of the operations of Rasmala in the l adequate accounting records have not been kept Signed on behalf of the Shari’a Supervisory Period, and to report to you. by the parent company, or returns adequate for Board of Rasmala plc. Respective responsibilities of directors and auditors our audit have not been received from branches not visited by us; or As explained more fully in the statement of directors’ responsibilities, the directors are responsible for l the parent company financial statements are not the preparation of the financial statements and in agreement with the accounting records and for being satisfied that they give a true and fair returns; or view. Our responsibility is to audit and express an l certain disclosures of directors’ remuneration opinion on the financial statements in accordance ______specified by law are not made; or with applicable law and International Standards on l we have not received all the information and Sh. Nizam Yacouby Dr. Aznan Hasan Dr. Talha Azami Auditing (UK and Ireland). Those standards require explanations we require for our audit (Chairman) (Member) (Member) us to comply with the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate. ______Opinion on financial statements Neil Griggs (Senior Statutory Auditor) In our opinion: For and on behalf of BDO LLP, Statutory Auditor United Kingdom l the financial statements give a true and fair 26 April 2016 view of the state of the group’s and the parent company’s affairs as at 31 December 2015 and of BDO LLP is a limited liability partnership registered in the group’s profit for the year then ended; England and Wales (with registered number OC305127)
54 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 55 5. Financial Statements 5.1 Consolidated Statement Of Income
2015 2014 Note £’000 £’000 Income Income from financing and investing activities 4 1,274 1,820 Returns to financial institutions and customers 5 (127) (181) Net margin 1,147 1,639
Net fees and commission income 6 5,338 5,921 Net (loss)/gain from financial assets measured at fair value through profit or loss 7 (59) 1,266 Gain on private equity investments designated at fair value through profit or loss 8 3,155 159 Fair value gain on investment property 9 25 358 Other operating income 10 609 1,423 Total operating income 10,215 10,766
Expenses Staff costs 11 (6,199) (5,378) Depreciation and amortisation 23,24 (76) (94) Other operating expenses 12 (3,403) (3,790)
Total expenses (9,678) (9,262) Financial statements
Operating profit before tax 13 537 1,504 Tax charge 14 (198) (787) Profit from continuing operations 339 717
Loss after tax from discontinuing operations 20 (90) (117)
Profit for the year 249 600
Profit attributable to: Owner of the Company 37 (80) 592 Non-controlling interest 329 8 249 600 Earnings per share 15 3.16p - Basic 0.37p 15 0.37p 3.16p - Diluted
The notes on pages 66 to 119 form an integral part of the financial statements.
56 RasmalaRasmala plcplc AnnualAnnual ReportReport andand AccountsAccounts 20152015 Rasmala plc Annual Report and Accounts 2015 57 Financial Statements 59 - - - 3 - 16
954 2,868 1,914 5,053 7,772 19,721 21,743 22,472 42,033 30,627 - 2014
126,851 129,719 £’000 2,868 126,851
(13,565) -
126,851 120,297 129,719 398 - - - -
- 4 - - 3,156 1,675 1,481 3,241 1,780 (151)
26,410 21,735 23,747 31,330 Company Company 105,091 105,091 3,156 105,091 104,297 108,247
15,721
Chief Officer Executive
(14,776)
Annual Report Accounts 2015 and 108,247
- 3
£’000 £’000 2015
174 787 6,562 1,674 954 6,630 4,815 10,785 42,565 22,472 41,863 12,216 £’000 2014 138,314
Rasmala plc (842)
19,721 19,721 125,095 125,095 (16,395) 2,827 398 13,186 13,186 125,095 13,310 122,268 119,386 138,405
Zulfi Caar Hydari, Zulfi Caar Hydari, 26 April 2016 - -
202 344 3,199 1,481 4,180 6,731 5,406 7,404 1,091
(1,293) 12,709
11,331 48,993 21,735 20,565 2015 Group Group
104,256
(16,606) 103,386
(151)
116,965 101,057 104,256 12,594
15,721
16 17 18 22 23 35 36 16 25 26 21 27 28 37 Note £’000 Note £’000 24 19 21
Chairman
The notes on pages 66 to 119 form an integral part of the financial statements. Al-Mouallimi, Abdallah Y. 26 April 2016 116,869 Net assets Liabilities associated sale with asset held for 115 124 - - liabilities Total Capital and reserves Share capital Other reserves Other reserves Investments in subsidiaries Investments Property and equipment Financial assets measured atFinancial assets measured fair value through profit or loss securities Available-for-sale atFinancial assets measured amortised cost Other assets Other liabilities Fair value reserve on Fair securities available-for-sale Intangible assets Intangible assets Goodwill Foreign exchange reserve exchange Foreign Assets Cash and cash equivalents Income tax payable Assets classified as held for sale 96 91 - 91 sale 96 Assets classifiedas held for - assets Total Investment property Investment Accumulated losses Liabilities Financial liabilities measured at fair value through profit or loss Equity attributable of to owners parent Financial liabilities measured at amortised cost Non-controlling interest Total equity Total 5.3 Consolidated And Company Statement5.3 Consolidated And Company Of Position Financial As at 2015 31 December 8
253 245 253 600 500 (321) (526) 2014 £’000 249 109 412 2015 (658) (368) (668) (668) (1,080) 37 Note £’000
Annual Report and Accounts 2015
Rasmala plc Items that may be reclassifiedItems that may to profitor loss: subsequently Total comprehensive income attributable to: comprehensive Total Owners of parent Non-controlling interest Profit for the year for Profit ofGain on fair value securities available-for-sale ofLoss on fair value securities available-for-sale operations in foreign on net investment loss Exchange the year loss/income for comprehensive Total
58 The notes on pages 66 to 119 form an integral part of the financial statements. Comprehensive Income Comprehensive 5.2 Consolidated Statement Of Other 2015 31 December ended the year For Financial Statements 61 Total Total £’000 equity interest Annual Report Accounts 2015 and
Non-controlling Non-controlling Rasmala plc Equity of parent to owners to owners attributable losses Accumulated reserve Foreign Foreign exchange exchange £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Fair value Fair securities reserve on available for-sale for-sale available Other reserves (Note 28) ------223 223 - - - - (549) - - (451) - - (549) (451) - (140) (549) (591) £’000 £’000 £’000 £’000 £’000 £’000 - - - - (131) (131) (40) (171) - - (549) (451) (80) (1,080) 189 (891) Share Share (4,000) (16,000) - - - (20,000) - (20,000) capital
- - - - (80) (80) 329 249
Annual Report and Accounts 2015
offer Rasmala plc
60
Of In Equity Changes December 2015 ended 31 the year For 5.4 Consolidated5.4 Statement Distribution made by a subsidiary made by Distribution reserves Forex Balance at 31 December 2015 15,721 103,386 (151) (1,293) (16,606) 101,057 3,199 104,256 Comprehensive income for the year income for Comprehensive the year Profit for Contributions by and distributions to owners and distributions by Contributions Disposal of subsidiary Acquisition of NCI reserves Forex Balance at 31 December 2014 - 19,721 119,386 - - 398 - (911) - - - - (842) - (16,395) - - 122,268 - - 2,827 125,095 - - (911) - (314) (696) (314) (1,607) (213) (213) Total comprehensive income comprehensive Total - - 179 (526) 592 245 8 253 Balance at 1 January 2014 the year income for Comprehensive the year Profit for Net change in fair value of securities available-for-sale of on conversion loss exchange operations foreign Foreign - - - - 126,976 219 (316) (16,987) 122,934 4,042 19,721 120,297 - 179 Net change in fair value of securities available-for-sale - of loss on conversion exchange operations foreign Foreign income - comprehensive Total to owners and distributions by Contributions - Tender (526) - - - (526) - - 179 (526) 592 - 179 592 8 600 Financial Statements 63 2014 £’000 (44,722)
286 (1,028) (5,840) (873) 68 - - - - (42,511) ------25 952 (44,722) 7,418 3,986 (7,205) ------14 (22) (237) 56 4,852 (1,211) 527 18,188 18,188 436 Company 188 18,230 (4,645) £’000 £’000 2015 Annual Report Accounts 2015 and
2014 £’000 (6,370) 9,791 Rasmala plc 185 274 (9,161) (1,460) 952 - (725) 5,188 (7,307) (2,990) (6,500) 94 (117) (119) - (206) 3,316 (7,307) - (963) 1,504 1,504 - - 76 380 527 188 (99) (171) (783) 682 (9) 3,893 (2,450) 1,916 24,359 (5) 537 (90) (6,808) 19,865
Group Group 2015 (3,061) - Note £’000 Note £’000 Net cash generated by/(used in) operating activities Cash flows from operating activities Cash flows from the period Operating for profit/(loss) Operating discontinued operations loss on Reversal ofReversal against due provision from a related party Adjusted for: Unrealised loss from financial assets measured at fair value through profit or loss 7 Unrealised gain on investment property 9 property 9 on investment Unrealised gain Unrealised gain on private equity investments equity investments on private Unrealised gain 8 designated at fair value through profit or loss Depreciation and amortisation 23,24 23,24 Depreciation and amortisation Available-for-sale securities Available-for-sale 17 Gain from investment in subsidiaries in subsidiaries Gain from investment Financial assets measured at 16 fair value through profit or loss Financial assets measured at amortised cost 18 Other assets 19 Investment property Investment 22 Financial liabilities measured at fair value through profit or loss 16 Financial liabilities measured at amortised cost 25 Other liabilities Other liabilities 26 Third partyinterest in consolidated funds Assets classified as held for sale 21 21 sale Assets classified as held for Distribution made by a subsidiary a subsidiary made by Distribution Tax paid Tax Cash used in operating activities Cash used in operating activities 19,082 Liabilities associated with asset held for sale 21 Liabilities associated sale with asset held for 21 The notes on pages 66 to 119 form an integral part of the financial statements. 5.6 Group And Company Statement Of Company And 5.6 Group Flows Cash 2015 ended 31 December the year For Total Total equity losses (1,211) (1,211) Accumulated for-sale for-sale available available Fair value value Fair securities (549) (1,211) (1,760) reserve on (549) - (549) Other reserves (Note 28) £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Share Share (4,000) (16,000) (4,000) - - (20,000) capital Annual Report and Accounts 2015
Rasmala plc 62 The notes on pages 66 to 119 form an integral part of the financial statements. For the year ended 31 December 2015 31 December ended the year For 5.5 Company Statement5.5 Company Of In Equity Changes Comprehensive income for the year income for Comprehensive year the Loss for - - - Balance at 31 December 2014 120,297 19,721 398 (13,565) 126,851 Contributions by and distributions by Contributions to owners Share premium transfer - - - - - Total comprehensive income comprehensive Total 179 286 465 Balance at 1 January 2014 219 19,721 120,297 126,386 (13,851) year the income for Comprehensive the year Profit for Net changefair value in of securities available-for-sale - - - - 179 - 286 286 - 179 Net change in fair value of securities available-for-sale - - income comprehensive Total and distributions by Contributions to owners Share premium transfer 15,721 104,297 Balance at 31 December 2015 (151) (14,776) 105,091 Financial Statements 2014 £’000 1,723
5,577 40,869 46,445 - (1) - - 3,330 5,053 - - - - - 5,053 3,241 (1,812) (20,000) (20,000) Company £’000 £’000 2015 £’000 2014 (2,927) - - - - (53)
4,380 (1,774) 5,577 630 9,489 6,562 - (238) 5,406 (238) 2015 Group Group (1,156) (20,000) 6,562 - - (20,000) Note £’000 Note £’000
Annual Report and Accounts 2015
Rasmala plc The notes on pages 66 to 119 form an integral part of the financial statements. Net cash (used in)/ generated from Net cash (used in)/ generated from activities investing 64 5.6 Group and Company Statement Company and 5.6 Group Of Cash Flows (Continued) 2015 31 December ended the year For Cash flow from investing activities investing Cash flow from Sale of in funds investment Payment on acquisition ofPayment a subsidiary net of cash acquired Disposal of a subsidiary net of cash disposed of Purchase of property and equipment 23 23 Purchase of propertyand equipment Net cash m activities investing Cash and cash equivalents at the Cash and cash equivalents beginning of year Net cash used from investing activities investing Net cash used from Cash flow from financing activities financing Cash flow from offer Tender 27,28 Cash and cash equivalents at the Cash and cash equivalents end of the year Net (decrease)/increase in cash and Net (decrease)/increase in cash and cash equivalents Financial Statements 67 Annual Report Accounts 2015 and
Rasmala plc power over the relevant activities of activities the relevant over power the variable returns or rights to, from to, exposure the ability to affect those returns through its IFRS 9 covers classification and measurement IFRS 9 covers of assets and financial liabilities, financial impairment methodology accounting. hedge and subject to EU endorsement.IFRS 15 and 9 are amended in Arrangements were IFRS 11 Joint the acquisition 2014 to clarify for the accounting of an interest or an additional interest in a joint operation where the joint operation itself meets the IFRS definition of The a business. principles of combination business accounting, should be applied to such with some exceptions, place on or after the which take transactions not intended to early It is implementation date. date whose effective adopt these amendments, is January 1, 2016, and the impact on Group will depend on future transactions. decided the date ofGroup has not yet adoption the endorsed by IFRS 15, IFRS 9 (not yet for completed its EU) and IFRS 11 and has not yet ofevaluation the effect of adoption. The Group is currently assessing the impact, on that these standards will have if any, and recognition in its the presentation of, consolidated future periods. results in Basis of consolidation combinations business Accounting for applies IFRS 10 ConsolidatedRasmala Financial Statements. The consolidated financial statements combine the financial statements of and all its Rasmala which Subsidiaries are entities over subsidiaries. has control. The Group has control Rasmala another entity when the Group has all ofover the following: 1. 2. 3. investee, for example through voting or other through voting example for investee, rights; and with the investee; its involvement the investee. over power The assessment of control is based on the date of Monetary the transaction. assets and liabilities denominated currencies in foreign are retranslated into the functional currency at the rate of ruling at the reporting exchange date. Non-monetaryand liabilities assets translated are Sterlinginto ratehistorical on used at effective the the date of initial recognition. All such differences to the group statement. income Foreign are taken translation differences relatingexchange to the movements opening non-controlling interest and to the ‘consolidated statement thereon are taken of earnschanges in equity’. Rasmala the majority of in foreign expenses some and pays its revenue At month end predominantly US dollar. currency, in the month, in foreign arising all profit and loss, currency to GBP using the month is converted hedge exchange rate and a foreign end exchange the movement. put in place to cover and interpretations New standards effective the year for no new standards or interpretationsThere were the first beginning periods time for for effective on or after 1 January 2015. None of the from amendments to standards that effective are that date had a significant effect on the Group’s financial statements. and interpretations not Standards issued but effective yet pronouncements from the IASB The following future financial reporting for will become effective the been adopted by not yet periods and have Group. from The IASB issued IFRS 15 ‘Revenue with Customers’, a whichContracts provides arising revenue accounting for single model for for customers with and is effective from contracts annual periods beginning on or after 1 January 2017. IFRS 15 will supersede IAS 18 ‘Revenue’. The IASB has also issued IFRS 9 ‘Financial Instruments’, which will supersede IAS 39 ‘Financial Instruments: and Recognition annual for Measurement’ and is effective periods beginning on or after 1 January 2018. (note 7 and note 18) means agency (note 7 and note
Accounting policies
Basis of preparation prepared been The financial statements have convention under the historical cost accounting financial assets stated for at their fair except value comprising of securities, available-for-sale financial assets designated fair atvalue, fair value of agreements and real exchange foreign estate investments. As permitted section 408 ofby the Companies Act 2006 the income statement of the Company is not presented as part of the financial ended 31 December the year For statements. after tax of made a loss 2015, the company £1,210k (2014: profit £286k). Compliance with International Financial Reporting Standards The consolidated financial statements and the financial statements of been the Group have prepared in accordance with International Financial Reporting Standards (“IFRS”) as the European Union. adopted by currency Foreign The financial statements are presented in functional and Sterling, which is the Group’s presentation currency. currencies in foreign are initially Transactions recorded at the rate of ruling at the exchange 2. are usually tradable and yield periodic profit and are usually tradable is part This distributions. of “Available-for-sale securities”. Wakala an arrangementand can be used in whereby one party (the principal) places funds with the agent by investment for another (the agent) behalfon the principal’s in return an agreed for is part or commission. This fee of “Financial assets at amortised cost”. The financial statements ofthe for Rasmala authorised ended 31 December 2015 were year of the Board issue by for Directors on 26 April 2016. Annual Report and Accounts 2015
(note 4 and note 18) is a sale of
(note 17) are certificates of equal value Rasmala plc
Principal activities, definitions and Principal activities,
66 For the year ended 31 December 2015 ended 31 the year For 1.
5.7 Notes To The To Notes 5.7 Financial StatementsFinancial authorisation of the financial statements (formerlyRasmala Islamic known as European is a or ‘Company’ Bank plc ‘EIIB’) Investment financing and management London-listed asset group of on the growth focused markets the Gulf Cooperation Council (GCC) countries. primary is to provide The Company’s focus management and financing solutions investment family groups, corporationsto pension funds, institutions. and financial and government is incorporatedThe Company in the United established on 11 JanuaryKingdom and was authorisation from the 2005 and received FSA on 8 March 2006 to carry on activities agreement bank. Following as an investment our with the Prudential Regulatory Authority, permissions amended on 19 December were is now solely regulated 2014 and the Company in the United the Financial Conduct Authority by Kingdom. The consolidated financial statements of the ended 31 as at the year and for Company and its December 2015 comprise the Company referredsubsidiaries (together to as the ‘Group’ as ’Group entities’). and individually termsThe following financial are used in the statements: Murabaha shares in ownership representing undivided of usufruct assets, tangible and services or (in the ownership of) the assets of particular Sukuk activities. projects or special investment goods at a cost plus an agreed profit mark up under which a party (the seller) purchases goods at cost price from a supplier and sells at a cost plus the goods to another (the buyer) Commodity Murabaha, an agreed mark up. commodities are bought and sold are whereby a common form of Islamic financing transaction. This is part of “Financial assets at amortised cost”. Sukuk Financial Statements 69 Annual Report Accounts 2015 and
Rasmala plc income statementunder other “operating income”. property Investment properties are held either to earnInvestment capital for appreciation, or for rental income, both. measurement value Fair propertyAfter initial recognition, investment atis subsequently measured fair value, representing fair value that is determined The determination ofannually. fair values of properties are based on valuationinvestment When valuer. professional an independent by the use of a property suchchanges that it is reclassified as property and equipment, its fair value at the date of reclassification subsequent accounting. becomes its cost for or loss resulting from either a gain Any change in the fair value or the sale of property is immediatelyan investment recognised in the group consolidated statement of income. from income and operating expenses Rental property are reportedinvestment within “Other operating income”. property is derecognisedAn investment upon disposal or when the investment property is permanently from withdrawn are use and no future economic benefits or loss gain from the disposal. Any expected arising on de-recognition of the property (calculated as the difference the between net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property on is derecognised under fair value gain property. investment Property and equipment Property are initially and equipment recognised at acquisition cost, including costs directly attributable to bringing any the assets to the location and condition necessary it to be capable for of operating the Group’s in the manner intended by management. Property are subsequently and equipment measured using the cost model, at cost less accumulated depreciation and impairment adheres to IAS 36, Rasmala losses if any. sukuk and quoted equity. sukuk and quoted recognisedAFS securities are at cost at Cost on acquisition date. the transaction fair value ofis considered as the the costs. transaction including any investment are then carriedAFS debt securities in the consolidated statement of position financial Profit accrualsat on AFS debt fair value. securities are recognised in the group income statement. in the fair value Changes are recognised directly in the OCI in the fair value reserve in the accounting period in arise. which they Where the value of is considered a security to be impaired due to a significant or the decline in the fair value, prolonged losses are recognised in the group income and gains the statement; otherwise, recognised in equity losses previously are recognised through the group income matures or statement when the investment is sold; these are included under trading and losses are value gains Fair income. recognised in equity net of tax effect. any at(d) Financial assets measured fair or loss profit through value in investment Quoted equity investments, that are equity investments funds and private basis on a fair value and evaluated managed and recognised regularly in accordance strategy and with an agreed investment reported personnel on that basis to key These are classified under this category. assets are recognised initially at fair value on date and transaction and subsequent gains in the fair value losses arising from changes are recognised the group directly in income statement from financial assets under gain measured at fair value through profit and equity investments on private loss and gain measured at fair value through profit and loss. of value exchange foreign (e) Fair agreements The valuation of exchange foreign forward agreements at held fair value through profit or loss on either the asset or liability side of the statement of financial position is recognised in the statement of income on a are included in the group They daily basis. (b) Financial assets and liabilities(b) Financial assets atmeasured amortised cost atFinancial assets measured amortised cost, financial liabilities measured at amortised liabilities as other as well cost financial assets with comprise non-derivative or determinablefixed that are repayments are not They market. not quoted in an active intention ofentered into with the immediate or short-term resale and are not designed securities’ or ‘financial as ‘available-for-sale assets measured at fair value through profit and loss’. Financial assets and liabilities included under these captions are initially recognised at fair directly related transaction value plus any are subsequently measured at They costs. amortised impairment cost less any losses. Amortised taking cost is calculated by discount or premium on into account any and costs thatacquisition and fees are an integral part of rate of the effective return. The amortisation is included in income from and returns activities financing and investing to financial institutions and customers in the group income statement. At each reporting date the Group reviews the carrying values of its financial assets; a financial asset is considered to be impaired if of evidence there is objective events since initial recognition of the asset that affect the amount or timing will adversely of future cash flows from the asset. The amount of the impairment loss will be the difference the carrying between value of the financial asset and the present value of the The amount estimated future cash flows. of the impairment loss will be recognised in the income statement, and the carrying value of will be written the financial asset down and the impairment loss allowance account will be recognised in an allowance Where subsequent events thatfor purpose. indicate that the impairment loss allowance is not required, or not required in full, the loss made will be reversed. allowance securities (c) Available-for-sale securities are (‘AFS’) Available-for-sale that are designated as available- investments or are not classified as another for-sale category of include These financial assets. Annual Report and Accounts 2015
Rasmala plc 68 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For consideration of all facts and circumstances. whether it controls an The Group reassesses ifinvestee indicate facts and circumstances that or more of to one there are changes the three elements of control. and balances are Intra-group transactions eliminated on consolidation and consistent are used throughout the accounting policies the purposesGroup for of the consolidation. in ownership interests in Changes as equity subsidiaries are accounted for iftransactions occur after control has they do not result been obtained and they already in loss of control. Details of the subsidiaries note 35. in are given Assets under Management funds The Group manages assets held in on behalf vehicles and other investment of The financial statements of investors. these entities are not included in these consolidated financial statements unless these qualify as subsidiaries. eliminated on consolidation Transactions and Intra-group balances and transactions, arising from inter- unrealised gains any are eliminated in transactions, company preparing these consolidated financial Unrealised losses are eliminatedstatements. but as unrealised gains, in the same way of that there is no evidence only to the extent impairment. Cash and cash equivalents include Cash and cash equivalents unrestricted cash, meaning cash actually on hand and bank balances whose immediate use is determined the management. by Financial instruments of(a) Recognition financial instruments Financial instruments are recognised/ derecognised in the statement of financial All financial date. position on the trade instruments are recognised initially at fair In the case ofvalue. financial instruments not recognised at fair value through profit that value will includeor loss, direct costs of financial assets For or issue. acquisition measured at fair value through profit or costs are expensed transactions loss, immediately. Financial Statements 71 Annual Report Accounts 2015 and
Rasmala plc involving loss ofinvolving control of all of a subsidiary, the assets and liabilities of that subsidiary are when the criteria sale classified as held for of are met, regardless described above whether a non-controlling interest in the Group will retain its former subsidiarysale. after the Immediatelyclassification before as held-for- or components of the assets, sale, a disposal in accordance with the are re-measured group, Thereafter, other accounting policies. Group’s at the assets are measured the lower generally of their carrying amount and fair value less impairmentcosts to sell. Any loss on a disposal group is allocated firstto to goodwill, and then the remaining assets and liabilities on a pro rata that no loss is allocated to financial except basis, benefits assets or investment employee assets, which continue to be measured in property, other accounting accordance with the Group’s Impairmentpolicies. losses on re-measurement are Gains are recognised in profit or loss. ofnot recognised in excess cumulative any impairment loss. intangible Once classified as held-for-sale, and propertyassets, and equipment are no amortisedlonger or depreciated, and any equity is no longer equity-accounted investee accounted. liabilities and contingent Provisions are recognisedwhen present Provisions obligations a result of as will event a past probably lead to an outflow of economic resources from the Group and amounts can Timing or amount of be estimated reliably. still be uncertain.the outflow may A present obligation arises from the presence of a legal commitment that has resulted or constructive disputes or legal example, for from past events, are not recognised Provisions onerous contracts. future operating losses. for are measured at the estimatedProvisions required to settle the present expenditure obligation, based on the most reliable evidence atavailable the reporting including the date, risks and uncertainties associated with the present obligation. Where there are a number of that an outflow the likelihood similar obligations, will be required in settlement is determined by considering the class of obligations as a whole. are discounted to their present values, Provisions reflects the current of assessments market the time value of and of money risks the specific which cash flow estimatesfor the future have and is independent from not been adjusted capital Determining structure. the entity’s the discount rate is performed of independently the capital structure of the issuer. growth rate determining used in value Terminal consideration into the realistic in use takes estimates of future growth rates that are steady of predictions or declining not exceed and do in whicheconomic growth the environment in the CGU operates. An impairment loss is recognised if the carrying amount of an asset or a CGU (Cash its recoverable Generating Unit) exceeds amount. Impairment losses are recognised in Impairmentprofit or loss. losses recognised in respect of a CGU is allocated first to reduce the carrying amount of goodwill allocated any to the CGU and then to reduce the carrying of amount the other assets in the unit (group of units) on An impairmenta pro rata basis. loss in respect of In respect ofgoodwill is not reversed. other impairmentassets, losses recognised in prior periods are assessed at each reporting date for indicationsany that the loss has decreased or An impairment loss is reversed exists. no longer if in the estimates there has been a change amount. An used to determine the recoverable only to the extent impairment loss is reversed that carrying the asset’s does not exceed amount the carrying been have amount that would determined, net of depreciation or amortisation, if no impairment loss had been recognised. sale Non-current as held for assets classified comprises Assets classified as held-for-sale assets and liabilities that are classified as held- primarily such will be recovered that they for-sale through sale rather use. than through continuing as met only when This condition is regarded the asset (or disposal group) for is available immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its Management must be sale is highly probable. which should be expected committed to the sale, recognitionto qualify for as a completed sale from the date ofwithin one year classification. When the Group is committed to a sale plan Goodwill of as the excess Goodwill is measured the sum of the consideration transferred, the amount of in the acquiree, non-controlling interests any ofand the fair value previously the acquirer’s in the acquiree (ifheld equity interest over any) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. an acquisition ofGoodwill arising on a business is carried at cost as established at the date of acquisition of less accumulated the business impairment if losses, any. Impairment of Goodwill sufferedThe Group tests whether goodwill has impairment The any on an annual basis. amount ofrecoverable unit a cash generating (CGU) is determined using value-in-use basis. A CGU is the smallest identifiable group of assets that cash inflows that generates are independent oflargely the cash inflows from other assets or groups of assets [IAS 36.6]. The calculations cash flow projections use by approved based on financial budgets period and a five-year covering management application of stress testing subsequently. The carrying value of goodwill is determined in accordance with IFRS 3 Business Combinations impairment and tested for in accordance with IAS 36 Impairment of of Goodwill arises on the acquisition Assets. ofsubsidiaries and represents the excess the fair value of the purchase consideration over the fair value of share of the Group’s the fair value of and the liabilities the assets acquired liabilitiesassumed including contingent as at the date of the acquisition. amount ofThe recoverable a non-financial unit is the greaterasset or cash-generating of its value in use and its fair value less the costs to sell. In assessing value in use, determination of value in use is detailed in IAS 36.30 which in all instances requires the use of discounted cash flow computations with specific requirements in relation to: 1. Estimating 2. Dealing with foreign the future cash flows, currency 3. Computation of cash flows, the discount rate. The discount rate used is a pre-tax rate which Annual Report and Accounts 2015
Rasmala plc 70 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For The assets’ useful lives are reviewed, and are reviewed, The assets’ useful lives adjusted if at appropriate, the reporting date. ofGains or losses arising on the disposal property and equipment are determined as the difference the disposal proceeds between and the carrying of amount and the assets are recognised in profit or loss within other operating income. in subsidiaries Investments in subsidiaries are investments The Company’s designated recognition for and measurement in the financial statements at fair value through profit and loss under IAS 39. Intangible assets Intangible assets consist oflicences computer costs including development and software capitalised staff shall An intangible asset costs. and only if: (a) it is probable be recognised if, future economic benefits that the expected that are attributable to the asset will flow to the entity; and (b) the cost of the asset can be measured reliably. Intangible assets are stated at cost less accumulated amortisation and impairment Amortisationlosses if on a is provided any. a current estimated line basis over straight ofuseful life and are reported years five within “Depreciation and amortisation”. Leasehold improvements Leasehold improvements Motor vehicles fittings and Fixtures, office equipment Computer hardware 5 years Buildings 3 - 5 years 4 years 3 years 40 years Impairment of Assets which seeks to ensure that carried PP&E assets are not at more than the higher of amount (i.e. their recoverable fair value less costs of disposal and value in use). At the end of each reporting Rasmala period, indication that there is any assesses whether a its carrying impaired (i.e. be PP&E may amount amount). be higher than its recoverable may If there is an indication be that a PP&E may amount recoverable asset’s impaired, then the is calculated [IAS 36.9]. line basis on a straight Depreciation is provided as follows: estimated useful lives over Financial Statements 73 Annual Report Accounts 2015 and
Rasmala plc income from the use ofincome from the use the property. If instrument a financial for is not active market a certain(private equities and Group sukuks), the establishes fair value using a valuation technique. techniques include arm’s using recent Valuation knowledgeable, between length transactions willing parties (if to the reference available), current fair value of instruments other that are cash flow discounted substantially the same, makers. quotes from market analysis and obtain The chosen maximum valuation technique makes use of relies as little as possible inputs, market incorporates on estimates specific to the Group, all factors participants that market consider would and is consistent with accepted in setting a price, pricing financial economic methodologies for Inputs to valuationinstruments. techniques and expectations reasonably represent market measures of the risk-return factors inherent in the financial instrument. The Group calibrates valuation validity techniques and tests them for using prices from observable current market in the same instrumenttransactions or based on observableother available data. market techniques include net present Valuation value and discounted cash flow models, comparison to similar instruments which for observablemarket and other prices exist and inputs Assumptions valuation models. used in valuation techniques include risk-free and benchmark rate of returns, credit spreads and other premia used in estimating discount currency foreign bond and equity prices, rates, The rates and net asset valuations. exchange ofobjective valuation at techniques is to arrive a fair value determination that reflects the price of the financial instrument at the reporting date been determined market by that have would participants acting at arm’s length. As at 2015 and 2014 the carrying 31 December amounts of financial and Company’s the Group’s instruments that are measured at amortised cost and mature within 12 months from the reporting date (as set out in note 25) are reasonable estimates of fair value in view of the nature of shortthese instruments or the relatively period of the origination oftime between the instruments realisation. and their expected The fair value of non-current financial instruments disclosure purposes for is estimated engages in business activities from which it activities in business engages whose expenses, and incur earn may revenues the by operating are regularly results reviewed chiefentity’s to (CODM) operating decision maker decisions about resources to be allocated make for assess its performance, to the segment and which discrete financial information is available. IFRS 8 Operating segments requires the Group to report from its externalcustomers for its revenues each group of and services similar products that it offers and also report from its external revenues customers country in relation to the Group’s of domicile and attributed in total to all foreign revenue. countries from which the Group derives this standard The Group is also required by to report on certain non-current non-financial assets that country are located in the Group’s of domicile and attributed in total in all foreign countries in which the Group holds such assets. The Group is not reporting these disclosures as, the necessaryin each instance, information is currently it to do to it in order for not available of and the Board so, assessed Directors have such informationthat the for cost to develop the purpose of 2015 financial statements be would its benefits. outweigh as they excessive and Significant accounting judgements estimates measurement value (a) Fair Definition of price that fair value - The would a to sell an asset or paid to transfer be received market liability in an orderly between transaction participants at the measurement date. its investments policy to revalue It is Rasmala’s agreements on a exchange and foreign periodic basis using independent and market observable pricing sources where possible. quotationsEquities are valued at from market where listed; Funds are valued exchanges and published by provided NAV at market the Fund Administrators; sukuk valuations are based on closing mid-prices from market observable pricing sources or from recent trade information if FX spot and Forward available; mid are valued using spot and forward contracts Real curve prices obtained from Bloomberg. are measured using latest estate investments a real estate by independent valuation provided expert. into account geo- The valuation takes condition ofpolitical factors, the land, expected Operating leases Operating to the are charged lease rentals income statementbasis over line on a straight the period of the lease. cost Pension operates a defined contribution The Company The cost of staff. all pension scheme for the payable scheme is equal to the contributions accounting period and the to the scheme for is recognised within Staff the income costs in statement. The Group has no further obligation been paid. have once the contributions Taxation comprises the year on the profit or loss for Tax is recognised in current and deferred tax. Tax that to the extent the income statement except it relates to items recognised directly in OCI, in which case it is recognised in OCI. (a) Current tax Current on taxable profits at tax is provided the current rate. (b) Deferred tax Deferred tax is recognised on temporary differences the carrying between amount ofassets and liabilities in the statement of financial position and the amount attributed to such tax purposes. and liabilities assets for Deferred tax liabilities all are recognised for taxable temporary differences and deferred it is tax assets are recognised to the extent probable that future taxable profits will be against whichavailable deductible temporary differences can be utilised. Current and deferred tax is recognised in profit or loss, that it relates to the extent to items except income or recognised in other comprehensive the tax is also In this case, directly in equity. income or recognised in other comprehensive respectively. directly in equity, Segment reporting The Group has adopted IFRS 8 Operating This Standard requires the Segments. presentation of financial information for segments based on information that is internally presented to the decision making function the purposesfor of resource allocation and performance assessment. An operating segment is a component of the Group that Annual Report and Accounts 2015
Rasmala plc Distributor fee - These comprise revenue - These comprise revenue fee Distributor Investment management fees, performance fees, management Investment comprises banking revenue Investment in funds and from investments Net gain 72 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For where the time value ofwhere the time value material is and money recognised in the Statement of Income. at each reporting are reviewed All provisions date to reflect the current and adjusted best estimate. liabilities are not recognisedContingent in the financial statements are disclosed but unless the possibility of of an outflow economic remote. resources is considered outflow where the possible In those cases, of economic resources as a result of present obligationsconsidered improbable is or remote, no liability is recognised. recognition Revenue (a) Net margin are Islamic and Wakala Sukuk, Murabaha to note 1 for Please refer financing transactions. a description of these items. and commission income (b) Net fees (i) and other fees placement fees, brokerage fees, advisory recognised are fees on accrual basis, when the related services are performedand when it is probable that the economic benefit will flow to the Group. (ii) of – sukuk from Debt Capital Markets fee originating, structuring from fee and placement, Structured Products and Corporate Finance Advisory. (iii) to partiesshare paid/ payable distributing on and/or introducing one or more funds or products of client. to a prospective Rasmala (c) quoted equity on funds and quoted equity comprises Net gain realised profits and losses upon sale thereof The latter is recognised income. and dividend income is established. when the right to receive (d) Other operating income on translationOther income includes net gains of denominated balances currency in foreign agreements, exchange foreign and forward ofrental income and reversal which provisions earlier and were included under net fees commission income. Financial Statements 75 717 253 (94) 339 Total (90) (76) £’000 (181) (117) (347) (127) (917) (668) 9,163 1,784 Total 7,221 3,121 £’000 10,766 10,215 ------(90) (90) £’000 £’000 (117) (117) Operations Operations Discontinued Discontinued ------– Provision of – Provision financing, (30) (41) (368) £’000 (526) £’000 Others (2,346) (2,714) Others (2,027) (2,553) Annual Report Accounts 2015 and
- - (14) 179 (28) £’000 (127) (549) £’000 2,093 3,121 5,087 2,840 2,291 (181) 3,776 1,784 5,379 2,674 2,853 Principal Principal Rasmala plc Investments Investments ------61 61 (32) 967 967 (25) Asset £’000 3,770 3,770 Asset £’000 5,114 5,114 (c) Principal Investments structured debt capital market, in funds, investing includes a products, debt finance and Islamic portfoliodiversified of private equity assets. the Group’s lines were These core business Each SBU units (‘SBU’). strategic business deals with different products and services, and managed separately based on the Group’s was internalmanagement and reporting SBU structure. management the Group’s are monitored by activities with committees and the Board which is provided internal management reports on a monthly basis. Information the results of regarding each reportable the group by segment as regularlyreviewed management and the board ofexecutive directors Segment results include items is included below. as those directly attributable to a segment as well that can be allocated on a reasonable basis. Management Management ------273 273 £’000 £’000 (216) (216) 1,358 1,358 (897) (897) Banking Banking Investment Investment – Advisory and arranging – Investment management – Investment Year ended 31 December 2014 Year Year ended 31 December 2015 Year Income from external customers Returns to external customers on investments value gain Fair operating income Total (Loss)/profit after tax from continuing activities Loss from discontinued operations loss after tax Other comprehensive income comprehensive Total Depreciation and amortisation Income from external customers Returns to external customers on investments value gain Fair operating income Total (Loss)/profit after tax from continuing activities Loss from discontinued operations loss after tax Other comprehensive income comprehensive Total Depreciation and amortisation in active markets for identical assets or liabilities, identical assets or liabilities, for markets in active inputs other than quoted prices included 2 — Level 1 that observable are within level the asset or for or indirectly as prices) either directly (i.e., liability, the 3 — inputs for Level from prices), derived (i.e., asset or liability that based on observable are not data (unobservablemarket inputs). 3. Segment Information and North on Middle East The Group focuses Africa four on the following 2015 centred and for markets core businesses: Banking (a) Investment structuredon Corporate products, Finance, originating, structuring and placement in debt capital market. (b) Asset Management income and fixed solutions encompassing equities, alternatives. c) Income tax The Group is subject to direct and indirect The Group is subject to direct and indirect taxation in a number of jurisdictions in which it and calculations Some transactions operates. which or credit is computed for a tax charge an inherent uncertainty the have given The Group objectively involved. judgements differenceestimates these amounts and any in the final determination will impact the period in which such determination is made. sources ofKey estimation uncertainty assumptions are the key The following sources concerning and other key the future, of estimation uncertainty at the end of the reporting a significant risk have period that may of causing a material adjustment to the carrying amounts of liabilities assets and within the next financial year. IFRS 7 requires that the classification of financial instruments at fair value be determined to the source of reference by inputs used to the fair value. derive This classification three-level uses the following 1 — quoted prices (unadjusted) Level hierarchy: decrease, the decrease in impairment the decrease in decrease, loss is profit or loss. through reversed Impairment on available-for-sale losses securities are recognised by investment loss that has been transferring the cumulative to income recognised in other comprehensive reclassificationprofit or loss as a adjustment. loss that is reclassified from The cumulative to profit or loss is income other comprehensive the difference cost, net the acquisition between of and amortisation, principal repayment any impairmentand the current less any fair value, recognised in profit or loss. loss previously in impairmentChanges attributable provisions ofto time value are reflected as a component profit income. period, the fair value of in a subsequent If, debt security an impaired available-for-sale objectively increases and the increase can be occurring after the related to an event impairment recognised in profit or loss was with the the impairmentloss, loss is reversed, amount of recognised in profit or the reversal loss. ( Annual Report and Accounts 2015
Rasmala plc 74 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For by discounting the future contractual cash future contractual discounting the by flows at the current profit rate that market is similar for and Company to the Group available financing These comprise financial instruments. other due to financial institutions, arrangements, assets and other liabilities. impairment for of(b) Provisions financial assets At each reporting date the Group assesses that evidence whether there is objective asset financial assets are impaired. A financial or a group of impaired financial assets is/are demonstrates that evidence when objective has occurred after the initial a loss event recognition of and thatthe loss the asset/s, cash flows of has an impact on the future event the asset/s that can be estimated reliably. that financial assets are evidence Objective impaired can includesignificant financial default or difficulty of the borrower or issuer, restructuring of a borrower, a delinquency by the Group on terms by that the loan or advance indications otherwise consider, not Group would that borrower a or issuer will enter bankruptcy, ofthe disappearance a for market an active or other observable data relating to a security, group of in changes assets such as adverse status the payment of borrowers or issuers in or economic conditions that correlatethe group, an In addition, for with defaults in the group. a significant or in an equity security, investment decline in its fair value below its cost prolonged of evidence is objective impairment. ofThe Group considers evidence impairment assets carriedfor at amortised cost at specific significant assets All individually asset level. carried at amortised cost are assessed for specific impairment. Impairment losses on assets carried at amortised cost are measured as the difference the carryingbetween amount of the financial asset and the present value of estimated future cash flows discounted at the asset’s Impairment profit rate. losses original effective are recognised in profit or loss and reflected account. Profit on impaired in an allowance assets continues to be recognised through the unwinding of the discount. When a subsequent causes the amount ofevent impairment loss to Financial Statements 77 - - - - 40 61 40 206 963 181 218 2014 259 358 152 152 226 119 159 2014 2014 (53) 2014 £’000 £’000 £’000 £’000 1,266 (185) (185) 1,423 2,521 1,225 1,225 1,742 (2,303) (1,623) - - - - Annual Report Accounts 2015 and 16 94 94 99 99 25 (1)
185 198 609 226 763 414 305 306 (59) (74) (74) 2015 2015 2015 2015 (537) (380) (794) £’000 £’000 £’000 £’000 3,061 5,056 3,155 (1,995) Rasmala plc 10. Other operating income Net foreign exchange gains exchange Net foreign on translation of- gains balances denominated currency in foreign - losses on translation of agreements exchange foreign forward ofReversal against from a related due party provision income Rental Other 7. Net gain from financial assets measured at fair value through profit or loss profit through at measured financial assets fair value from 7. Net gain 9.Fair valuation gain on investment property investment on gain valuation 9.Fair Group Group Group 8. Gain on private equity investments designated at fair value through profit or loss profit through designated at fair value equity investments 8. Gain on private Group Realised loss on investment property loss on investment Realised gain - Realised loss - Realised property Unrealised loss on investment - Unrealised gain - Unrealised loss Realised gain from Financial assets measured at from Financial assets gain Realised or loss fair value through profit gain - Realised loss - Realised measured at from Financial assets Unrealised gain or loss fair value through profit - Unrealised gain - Unrealised loss assets measured at from Financial received Dividends or loss fair value through profit Realised gain on private equity investments measured at private equity investments on gain Realised fair value through profit or loss gain - Realised loss - Realised from Financial assets measured atUnrealised gain fair value through profit or loss - Unrealised gain - Unrealised loss 19 79 528 455 273 490 2014 2014 2014 2014 (181) (181) £’000 £’000 £’000 £’000 1,273 1,820 2,254 3,541 3,369 9,164 5,921 5,114 3,420 2,523 (1,319) customers - 18 950 465 210 301 955 2015 2015 £’000 2015 2015 (127) (127) 2,807 2,811 1,603 7,221 £’000 £’000 1,358 3,770 3,577 5,338 £’000 1,274 (1,222) Revenue from external external from Revenue Annual Report and Accounts 2015
Rasmala plc Management fees fees Performance Placement fees fees Distributor Asset management fees (net) Asset management fees Brokerage fees Brokerage income Other fee UK GCC Egypt Group 6. Net fees and commission income 6. Net fees Group 5. Returns to financial institutions and customers Investment banking fees Investment Financial liabilitiesmeasured at amortised cost 4. Income from financing and investing activities and investing financing 4. Income from Group Financial liabilitiesmeasured at amortised cost securities (sukuk) Available-for-sale (Part deposit Fixed of Cash and Cash equivalents) 76 In 2015, the Investment Banking and Treasury segments became distinct divisions and has and divisions distinct became segments Treasury and Banking Investment the 2015, In to reflect this. amended was 2014 comparative been disclosed separately above. informationGeographical The Group operates in three geographical areas UK, Gulf Cooperation and Council, from continuing operations external from customers by revenue Egypt. The Group’s location of operations are detailed below. 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Segment information (continued) Financial Statements 79 1 8 7
25 39 92 (4) 100 337 2014 2014 787 323 787 £’000 £’000 787 1,504 - - 5 90 23 47 Annual Report Accounts 2015 and
198 198 537 108 221 198 (67) 2015 2015 £’000 (111) £’000 Rasmala plc annual accounts Deferred of tax assets tax losses carried £8.4m (2014: £8.1m) on of forward £41.8m (2014: of the current£40.5m) are not recognised level in these financial statements given uncertainty Deferredsurrounding future taxable tax assets on the UK tax losses are profits. the Group’s computed at 20%. 14. Tax charge 14. Tax 13. Operating profit before tax before 13. Operating profit This is stated after charging: Factors that affect current may future and total tax charge Factors The main rate of UK corporation from 21% to 20% with effect tax fell 1 April from 2015. UK corporation tax will remain at 20% as at 1 April 2016 and it is this rate (20%) that has been applied unrecognised in calculating deferred the Group’s assets as at tax 31 December 2015. has announced plans to further the government 2020. by reduce this tax to 17% However, It has not been possible to fully quantify the effect of these further rate reductions because of the uncertainty the timing of over be suitable losses may future profits against which the Group’s future current that these changes will reduce both any tax charge offset. however, It is expected, unrecognised deferredand the Group’s tax assets. Tax on operating profit Tax Foreign tax charge for the year the year for tax charge Foreign in the income statement charge Tax ofReconciliation the total tax charge tax Operating income before UK corporation tax at rate standard (20.25%) tax purposesExpenses not deductible for and non-UK investments on value movements Fair other non-taxable amounts other income Taxable UK deferred assets not recognised charge Tax Group Audit ofAudit group financial statements pursuant to legislation the audit of auditor for to the Group’s payable the Group’s - Fees related fees to the prior period - Audit auditor: to Group payable Other fees - Other services pursuant to legislation to auditors of payable Fees the subsidiary that entities are not associates the audits of- Group auditor for the subsidiaries the audits of- Non-Group auditor for the subsidiaries 77 1 25 41 96 45 68 51 883 425 450 2014 2014 215 169 171 526 2014 982 775 409 308 135 £’000 883 £’000 3,790 3,232 5,378 1,061 - - 74 36 13 28 54 366 135 183 533 438 466 788 424 192 282 178 414 2015 2015 2015 £’000 £’000 1,016 3,917 6,199 1,016 1,071 3,403 Annual Report and Accounts 2015
Rasmala plc Group Directors’ salaries, fees and other fees Directors’ salaries, Staff salaries Bonus Staff pension contributions Social security costs Shari’a Supervisory Board (SSB) fees Recruitment costs Staff redundancy cost Other staff costs Group Legal and professional fees and professional Legal costs and other occupancy Rent Communications and IT costs development and market Advertising Travel Consultancy Board and SSB related expenses Bank charges Other operating charges Employees 78 11. Staff costs was: number of during the year basis, equivalent on a full time The average employees, 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Staff costs incurred in respect of during the year were: the employees Total of emoluments directors’ Total ofAmounts in respect highest paid director Emoluments Benefits-in-kind 12. Other operating expenses Financial Statements 81 3 827 £’000 2014 2014 £’000 £’000 5,516 8,387 8,569 2,407 5,400 7,807 7,807 78,757 80,254 2014 Amount Notional 22,472 15,865 16,695 34,226 42,033 £’000
157 - - - - 954 2015 2,065 9,246 £’000 3,030 1,481 £’000 10,424 21,735 19,882 16,695 2015 £’000 Liabilities 23,747 23,747 8 Company 22 2015 £’000 £’000 Annual Report Accounts 2015 and Assets
2014 7,807 £’000 41,863 34,056 Rasmala plc - 20,565 20,565 Group Group 2015 £’000 These investments are measured at currency fair value since inception. The Group has foreign exposure These investments are USD and GBP. The currencies swapped that were USD. only for risk, the group currency into a foreign entered agreement exchange In order to mitigate foreign the to GBP 78.757m. USD 116.77m for swap Group and Company Group Financing arrangements 2015 Maturing in 0-3 months 2014 Maturing in 0-3 months or loss profit through designated at fair value investments equity Private Sovereign and central bank exposures and central Sovereign Financial institutions Corporate and other counterparties Group and Company Group Group 16. Financial assets measured at fair value through profit or loss (continued) or loss profit through at assets measured 16. Financial fair value Foreign exchange commitments used for matching used for commitments currency exchange exposures Foreign 18. Financial assets measured at18. Financial assets measured amortised cost Opening fair value gain Exchange during the year value gain Fair Closing fair value Financing arrangements Due from financial institutions 17. Available-for-sale securities 17. Available-for-sale Group and Company Group bank exposures and central Sovereign Corporate and other counterparties The above financing arrangements are designed based on Murabaha and Wakala structures. An exposure An exposure structures. arrangements financing and Wakala Murabaha are designed based on The above of Nil (2014 £5.4m) of collateralised with a first charge on a property was the above portfolio now Nil value, (2014 £12.74m). - - - 22 2014 2014 9,808 21,743 21,721 11,913 21,721 £’000 £’000
- - 8 2014 £’000 5,507 3,602 39,121 39,121 26,402 26,410 17,293 26,402 Company Company 2015 £’000 2015 £’000 - 22 2015 2014 2014 £’000 £’000 £’000 2,563 9,806 33,113 33,113 16,695 42,565 25,848 13,479 25,848 8 2,298 5,910 3,602 29,103 19,882 48,993 17,293 29,103 Group Group 2015 Group Group 2015 £’000 £’000 Annual Report and Accounts 2015
Rasmala plc 80 The Group’s fund portfolio represents its investment in various open-ended and non-listed closed-ended fund portfolioThe Group’s represents its investment income products. schemes equities and fixed specialising in Asian, MENA and USA based public and private ofThe main objectives all these funds are medium to long-term capital appreciation and periodic income generation. are prudently All investments income products. These include and other fixed Sukuk high quality stocks, and duration. geography sector, issuer, by diversified Financial assets designated at fair value Financial assets designated at fair value value ofFair agreements exchange foreign designated at Private investments equity fair value through profit or loss 16. Financial assets measured at fair value through profit or loss profit through at16. Financial assets measured value fair Group number of average Basic EPS shares for Weighted number of average Diluted EPS shares for Weighted 15. Earnings (“EPS”) per share tax and discontinued operations continuing operationsIncome or loss from attributed before to the equity holders of The EPS. computing the Group is used as the numerator the for denominator shares less the treasury is the issued shares. operationsEPS from continuing 3.16 pence). EPS from is 0.37 pence in 2015 (2014: discontinued operations is a loss of in 2015 (2014: loss of 0.21 pence 0.15 pence). 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Navis Islamic Investment Fund – non-listed Islamic Investment Navis Income Funds - listed Fixed Estate – non-listed Real Equity and other funds – listed Financial Statements - - 2 3 83 91 33 56 33 91 124 124 121 2014 2014 2014 2014 (117) (117) £’000 £’000 £’000 £’000 - - 2 3 59 35 96 96 19 112 115 115 (90) (90) 2015 2015 2015 2015 £’000 £’000 £’000 £’000 Annual Report Accounts 2015 and
Rasmala plc These businesses have been classified and accounted for at classified been accounted for and a disposal group 31 December 2014 as have These businesses sale. held for have discontinued their operations were entities from the day above or losses arising from the All gains been classified as discontinued operations. The net assets above exclude cash and balances with banks and intercompany balances. cash and balances with banks and intercompany exclude The net assets above Group Group Liabilities associated sale with assets held for Group 20. Discounted operations20. Discounted (continued) operations discontinued from Cash flows 21. Net assets classified as held for sale as held for 21. Net assets classified Net cash outflows from operating activities from operatingNet cash outflows activities activities investing Net cash inflows from from financing activities Net cash outflows Net cash outflows Property and equipment securities Available-for-sale Other assets Total Group Payables Accruals and other liabilities Total Assets classified as held for sale Assets classified as held for Liabilities associated sale with assets held for Net Liability Assets classified as held for sale sale as held for Assets classified - - - 50 108 319 379 2014 2014 £’000 2014 (436) (117) (117) 7,235 7,772 20,800 13,426 34,226 £’000 £’000
- - - 1 47 255 724 754 (90) (91) (90) 2015 9,200 1,780 £’000 14,547 23,747 Company Company 2015 £’000 £’000 2015 £’000 - 537 2014 2014 2,466 1,830 7,383 £’000 1,756 £’000 20,800 12,216 11,500 34,056 865 754 178 774 9,200 3,587 2,111 7,404 10,500 20,565 Group Group 2015 Group Group 2015 management in 2011, the liquidationmanagement process has and regulatorycommenced. The administrative requirements necessary to liquidate Rasmala Delta time than expected. is taking longer Investment At 31 December 2015, net liabilities of DRI amounts the DRI for to £0.02m (2014: £0.02m). Profit from to nil (2014 ended 31 December 2015 amounts year profit: £0.3m). operations discontinued Loss after tax from The combined results of the discontinued operations set out are the year included for in the profit from profit and cash flows The comparative below. been re-presented to discontinued operations have include those operations classified as discontinued in the current year. £’000 £’000 £’000 Annual Report and Accounts 2015
Rasmala plc Murabaha placements placements Wakala bills Treasury Accrued income Other receivables Margin deposits Escrow deposit Prepayments Due from financial institutions Due from Group Revenue Expenses from discontinued operations the year Loss for Tax from discontinued operations after tax the year Loss for 82 A net loss is generated by discontinued activities in the year as a result of in the year discontinued activities by A net loss is generated ongoing costs associated with the liquidation and closure of these entities. 20. Discounted operations Saudi Rasmala Investment Further the shareholders of to the decision made by Saudi (“RIS”) on 1 December Investment Rasmala 2012, the liquidation process is progressing and is and slow due to ongoing Income tax assessment 80.41% Holdings Limited owns litigation. Rasmala shares in RIS. At 31 December 2015, net assets of RIS amounts the year to £0.2m (2014: £0.3m). Loss from RIS for ended 31 December 2015 amounts to £ 0.09m (2014: losses of £0.2m). Delta Rasmala Investment Further Group Rasmala to the decision made by 18. Financial assets measured at measured 18. Financial assets amortised cost (continued) 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For 19. Other assets Financial Statements 85 55 89 83 80 73 23 (2) (1) 34 174 125 344 238 130 (13) (13) Total Total Total £’000 2,968 3,110 2,774 2,936 3,121 3,110 3,465 2,936 £’000 £’000 -
- - 35 32 26 31 39 (1) 35 42 24 44 48 (13) (13) £’000 £’000 1,134 1,038 1,095 1,198 1,095 1,150 £’000 1,068 1,134 hardware hardware hardware hardware Computer Computer - - - - After 5 years 9 14 18 22 (1) 38 22 15 24 43 605 583 665 622 591 557 605 583 £’000 £’000 Annual Report Accounts 2015 and 5
17 Fixtures, Fixtures, Fixtures, Fixtures, £’000 fittings, and and fittings, fittings, and and fittings, 1-5 years Minimum lease income due Minimum lease income office equipment office equipment Rasmala plc - - - -
18
17 62 20 55 20 39 24 40 28 165 180 £’000 £’000 £’000 1,235 1,462 1,282 1,176 1,235 1,207 1,207 1,143 Leashold Leashold Leashold Leashold Within 1 year improvements improvements ------2 1 2 77 78 12 46 32 78 79 11 59 20 (1) 34 46 £’000 £’000 Motor Motor Motor Motor vehicles vehicles ------3 5 2 3 8 3
2 5 53 56 58 53 61 58 £’000 £’000 buildings Land and buildings Land and Group Non-cancellable operating lease receivables The properties 4 years are all non-cancellable for The lease contracts leased out on operating are all leases. commencement offrom the as follows: lease rentals are Future minimum the lease. Cost At 1 January 2014 Additions Disposals FX impact At 31 December 2014 Depreciation At 1 January 2014 the year for Charge Disposals FX impact At 31 December 2014 at Net Book Value 31 December 2014 Cost At 1 January 2015 Additions Disposals FX impact At 31 December 2015 Depreciation At 1 January 2015 the year for Charge Disposals FX impact At 31 December 2015 at Net Book Value 31 December 2015 Group 22. Investment property (continued) 22. Investment December 31, 2015 December 31, 2014 23. Property and equipment - 206 107 Total 2014 Total £’000 1,674 £’000 £’000 1,091 (381) 1,742 1,674 - £’000 1,674 £’000 1,091 99 84 Level 3 Level Level 3 Level (766) 2015 1,674 1,091 £’000 - - £’000 £’000 Level 2 Level Level 2 Level Relationship ofRelationship unobservable input(s) to fair value A significant increase in the rent and valuation ofmarket result in a price used would significant increase in fair and vice versa value, - - £’000 £’000 Level 1 Level Level 1 Level Significant unobservable input(s) Sales comparison approach to transactional regard having for and allowance evidence sales costs Annual Report and Accounts 2015
Rasmala plc 3 units (2014: 4) of one floor in UAE) (Dubai, I-rise Tower Financial asset/liability Investment property Investment For investment property categorised into Level 3 of the fair value hierarchy, the following information the following property 3 of categorised investment into Level For the fair value hierarchy, is relevant: Fair value measurement of the Group’s investment property of measurement investment value the Group’s Fair the total property covering (Dubai, UAE) includeThe investment 4) of 3 units (2014: one floor in I-rise Tower area of been determined based on a These units are stated which 5,566 square feet. have at fair value, valuation firm an independent performed by of valuation valuers.The of professional the property has been performed on the basis of rental returns. This valuation technique from the prior year. has not changed Details of property information and investment the Group’s as at about the end of the fair value hierarchy the reporting period are as follows: At 31 December 2014 Group At 31 December 2015 Group Opening fair value year Additions during the year Disposals during the in fair value Change gain Exchange Closing fair value Investment property Investment 84 22. Investment property 22. Investment 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Group Financial Statements - - - - - 8 87 - 135 2014 2014 £’000 £’000 1,914 1,771 £’000 Share Share 50,000 50,000 61,815 61,815 £’000
account premium premium - - - - - 6 - 280 £’000 599 599 £’000 1,675 1,389 Capital Capital reserve Company Company redemption redemption 2015 2015 £’000 £’000 - - 8 Annual Report Accounts 2015 and
305 2014 2014 £’000 3,630 3,000 6,630 4,815 4,502 £’000 £’000 Share Share 15,721 19,721 (4,000) Capital - - Rasmala plc 14 962 343 3,218 4,180 6,374 6,731 £’000 Group Group 2015 Company 31,441 39,441 (8,000) Group Group 2015 Number Number of shares £’000 £’000 15th February 2016. a variable interest rate based on 6 month LIBOR; on the term the balance payable facility as of on £3.63m) expired 31 December 2015, £0.962m (2014: Accrued expenses payable Social security and PAYE Other payables Authorised Term facilities ofTerm subsidiary Bank of(a) Commercial Dubai £24.7m total facility term is the principal The following of the facility 25. Financial liabilities measured at liabilities25. Financial measured amortised cost l l 26. Other liabilities 27. Share capital 27. Share Events ofEvents 2015 repurchased 8m shares (2014: Nil) with a value ofDuring 2015, the company £4m (2014: Nil) in share capital as a result ofduring the year a tender offer. ofEvents 2014 During 2014 each ordinary share of consolidated 1p each was into each ordinary share of 50p each. As a result of the share consolidation the number of shares allotted, called up and fully paid became 39,441,784 ordinary shares of 50p each. The number of correspondingly rights was amended from shares with voting shares. Treasury 1,922,332,657 to 38,446,653 with 995,131 represented by Commodity murabahas acceptances Wakala facility ofTerm subsidiary on demand of payable Facilities subsidiary 2015: 100,000,000 ordinary shares of £0.50 each 2014: 100,000,000 ordinary shares of £0.50 each At 31 December 2015 offer Tender At 31 December 2014 Fully paid 31,441,784 (2014: 39,441,784) ordinary a par value of issued, with shares, £ 0.50 a right to dividends. per share and (2014: £ 0.50), carries one vote 1 - - - - - 4 - 16 3 14 12 389 359 388 389 389 373 11 373 385 Total 2014 £’000 £’000 1,493 1,479 1,493 1,490 2 1 ------4 3 1 1 219 213 218 219 219 217 217 218 2015 £’000 1,493 1,493 1,490 1,493 £’000 hardware hardware Computer ------3 14 10 11 170 170 146 170 170 156 156 167 £’000 Fixtures, Fixtures, fittings, and and fittings, office equipment Annual Report and Accounts 2015
Rasmala plc Company Intangible assets consist ofof the costs including capitalised development computer licenses and software staff costs. 24. Intangible assets Cost At 1 January 2014 Additions Disposals At 31 December 2014 Depreciation At 1 January 2014 the year for Charge Disposals At 31 December 2014 at Net Book Value 31 December 2014 Cost At 1 January 2015 Additions Disposals At 31 December 2015 Depreciation At 1 January 2015 the year for Charge Disposals At 31 December 2015 at Net Book Value 31 December 2015 Group Group & Company Group Cost At 1 January 2015 Additions At 31 December 2015 Amortisation At 1 January 2015 the year for Charge At 31 December 2015 at Net Book Value 31 December 2015 86 23. Property and equipment (continued) 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Financial Statements 89 - 3 91 96 174 954 787 202 115 344 123 Total £’000 6,562 1,674 1,481 4,180 6,731 5,406 7,404 1,091 6,630 4,815 42,565 22,472 41,863 12,216 10,785 13,309 12,709 48,993 21,735 20,565 11,331 138,405 116,965 ------3 777 344 980 980 777 174 1,859 £’000 1,756 30,245 20,534 63,497 37,991 19,851 11,331 71,376 10,785 More than More 12 months Annual Report Accounts 2015 and
------96 91 954 787 202 115 123 £’000 1,938 1,481 4,180 5,751 5,406 1,884 5,545 1,091 6,630 4,038 6,562 1,674 Rasmala plc 74,908 12,320 41,863 12,532 45,589 11,729 11,002 20,565 10,460 months Less than 12 Assets Cash and cash equivalents as Financial assets measured or loss fair value through profit securities Available-for-sale atFinancial assets measured amortised cost Other assets property Investment Property and equipment Intangible assets Goodwill sale Assets classified as held for assets Total Liabilities Financial liabilities measured as fair value through profit or loss Financial liabilities measured at amortised cost payable Income Tax Other liabilities Liabilities associated sale with assets held for liabilities Total 2015 Group Assets Cash and cash equivalents Financial assets measured as fair value through profit or loss securities Available-for-sale Financial assets measured at amortised cost Other assets property Investment Property and equipment Intangible assets Goodwill sale Assets classified as held for assets Total Liabilities Financial liabilities measured as fair value through profit or loss Financial liabilities measured at amortised cost payable Income Tax Other liabilities Liabilities associated sale with assets held for liabilities Total 2014 Group 30. Maturity of Analysis assets and liabilities The tablesanalysis of below show an to be expected those assets and liabilitiesanalysed between months of twelve within or more than or settled recovered the reporting date. - - - Total (911) Total £’000 £’000 120,297 119,386 103,386 104,297 120,297 120,297 (16,000) (16,000) - - - - £’000 (911) (911) (911) £’000 44,000 20,000 40,000 60,000 Equity Special reserve reserve (16,000) - - - - £’000 £’000 shares shares 20,000 40,000 60,000 44,000 (2,117) (2,117) (2,117) Special reserve (16,000) Treasury Treasury ------599 599 599 £’000 £’000 Capital Capital reserve (2,117) (2,117) (2,117) shares shares Treasury Treasury redemption redemption - - - - - 599 599 599 £’000 £’000 Share Share 61,815 61,815 Capital Capital 101,815 reserve (40,000) account premium premium redemption redemption - - £’000 Share Share 61,815 61,815 101,815 (40,000) account premium premium Annual Report and Accounts 2015
Rasmala plc Company Balance at 1 January 2014 Share premium transfer Balance at 2014 31 December offer Tender Share premium transfer Balance at 2015 31 December Balance at 1 January 2014 to owners distributions and by Contributions Share premium transfer Acquisition of NCI Balance at 2014 31 December offer Tender Balance at 2015 31 December Group 29. Assets under management 88 28. Other reserves December 2015, to 31 During the year in reserves during the year. table the movement shows The following a reduction ofthere was a result of as the Special Reserve £16m from a tender offer. 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Total assets under management of external clientsTotal as at 2015 is £699m (2014: £693m). These 31 December without recourse to the Group. are invested Holdings Limited to Rasmala novated assets under management include fund management contracts Total at amounting to £723m (2014: £715m) as Rasmala 31 December 2015. by The Rasmala General Employee Benefit Trust (the ‘GEBT’) purchased £2.1m worth of Benefit Trust Employee General The Rasmala shares (50m shares) price ofduring 2010 at an average 4.25p in order to facilitate the establishment of share the 2010 employee of plan (the ‘2010 ESIP’). The total value incentive these shares is presented, at cost, in equity within a treasury shares reserve in accordance with IAS32. Part The to facilitate ofscheme. the allocated to the 2010 ESIP Trust shares (34m shares) was the above end. as at the year and the shares remain in the Trust 2012 without vesting in November 2010 ESIP expired the Courtapplication an Rasmala, by ofFollowing from a £40m transfer the Chancery approved Division 2014, shown under Special reserveshare premium to a non-capital reserve (Special reserve) during July as of special shareholders by by 31 December 2014. The capital reduction and tender offer approved were 2014. resolution at on 25 June Meeting held a General Financial Statements 91 - 240 2014 280 553 833 2,628 2,868 £’000 2014 50,248 79,471 £’000 129,719
- 51 280 273 553 3,156 3,105 32,493 75,754 108,247 Company Company Company Company Annual Report Accounts 2015 and
2015 - £’000 2015 £’000 903 2014 1,284 2,187 £’000 2014 2,628 £’000 54,291 84,114 10,682 13,310 Rasmala plc 138,405 and are therefore treated as derivatives treated and are therefore derivatives as 266 984 867 2,117 3,105 9,604 38,597 78,368 12,709 116,965 2015 Group Group £’000 2015 Group Group £’000 Financial instruments: Recognition and measurementFinancial instruments: Recognition As at funding commitments of had undrawn 31 December 2015 the Group Nil (2014: £6.4m) The Group’s foreign exchange agreements, while providing effective economic hedges for the purposes for economic hedges effective agreements, while providing exchange foreign The Group’s of the specific requirements of accounting under hedge for Group risk management, do not qualify IAS 39 Within one year years One to five years More than five held for trading. Accordingly, the effects of reflected against not been foreign Accordingly, such arrangements have trading. held for currency denominated balances in the table above. 34. Assets and liabilities in foreign currency34. Assets and liabilities in foreign matching rate fluctuations by assets with liabilities exchange to foreign The Group manages its exposure in the same currency with similar maturities and the use of as far as possible, appropriate off-balance sheet instruments. 32.Commitments under operating32.Commitments leases at main premises the Group’s under an operating lease for a commitment atThere is the year-end 2013 to 30 from 2 December period a seven-year for London EC1Y 4SA Street, 60 Chiswell Milton Gate, 2017, at and service an annual rent November charge of (includes seven-month a net of £279,150 VAT rent free period). in March 2017, September 2024 Egypt and Oman expiring has lease commitments in Dubai, Rasmala and February respectively. 2016 are as follows: Future rentals annually. £614,677, £85,554 and £8,417 These cost the Group Denominated in sterling Denominated in currenciesother than sterling assets Total Denominated in sterling Denominated in currenciesother than sterling liabilities Total 33. Contingent liabilities and commitments obligatory liabilities or contractually No contingent commitments are outstanding as at the reporting date other than the operating lease and up to the date that these financial statements approved, were obligations disclosednote 32 and items listed below. in a) - 3 4 16 954 Total 5,053 7,772 1,914 2,868 £’000 1,481 1,675 3,156 3,241 1,780 30,627 21,743 22,472 42,033 31,330 26,410 21,735 23,747 129,719 108,247 ------3 - - 4 16 £’000 21,721 20,533 30,627 72,900 31,330 77,587 26,402 19,851 More than More 12 months ------8 22 954 £’000 1,914 2,868 5,053 1,939 7,772 1,481 1,675 3,156 3,241 1,884 1,780 56,819 42,033 30,660 23,747 months Less than 12 Annual Report and Accounts 2015
Rasmala plc 31. Pension commitments 31. Pension The assets of all staff. scheme for a defined contribution The Group provides the scheme are held costs ofseparately of from those 2015 and Total the Group in independently administered funds. 2014 are fully settled. 2014 Company Assets Cash and cash equivalents as Financial assets measured or loss fair value through profit sale securities for Available Financial assets measured at amortised cost Other assets Property and equipment in subsidiaries Investment Intangible assets assets Total Liabilities Financial liabilities measured as fair value through profit or loss Other liabilities liabilities Total 2015 Company Assets Cash and cash equivalents Financial assets measured as fair value through profit or loss sale securities for Available Financial assets measured at amortised cost Other assets Property and equipment subsidiaries Investment Intangible assets assets Total Liabilities Financial liabilities measured as fair value through profit or loss Other liabilities liabilities Total 90 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Financial Statements 93 - 8 2014 2014 2014 (900) £’000 6,739 £’000 5 yrs. 2,827 (696) (314) (213) 4,042 1.62% 7.43% 2.50% 16,706 (8,418) (2,827) 11.10% (11,300) - - 83 329 (40) 2015 2015 2015 £’000 6,586 £’000 2,827 3,199 5 yrs. 1.58% 6.74% 2.50% 20,361 (1,095) (8,580) (3,199) 10.30% (14,073) Annual Report Accounts 2015 and
Rasmala Holdings Limited Rasmala plc Group The key assumptions used for impairment used for assumptions of testing The key goodwill created ofon the acquisition Rasmala are stated below. 37. Non-controlling interest 37. Non-controlling Current assets Non-current assets Current liabilities Non-current liabilities Equity attributable to owners of the Company Non-controlling interests Start of year Acquisition of non-controlling interest the year Gain for Disposal of Subsidiary loss exchange Foreign Subsidiary made by Distribution End of year Risk free rate of interest Equity risk premium Projected growth rate cash flows (in years) used to forecast Term Discount rate calculated using capital asset pricing model (CAPM) 36. Goodwill (continued) assumptions Key Group The Group has considered the impact on the above key assumptions used and has conducted assumptions used and has conducted key on the above The Group has considered the impact analysis on the impairmentsensitivity test of carrying the CGU’s When the projected value. growth rate from 2.5% to 1% and discount rate is reduced is increased to 11% from 10.3%, this impairmenthas not resulted in any of the carrying value as at 31st December 2015 as the CGU’s its carrying amount exceeds £6m. value by recoverable Summarised financial information in respect of each of material that subsidiaries have the Group’s non-controlling interests is set below: - 619 873 2014 UAE 2014 £’000 UAE UAE £’000 4,244 Egypt Egypt 10,166 10,785 Oman 30,627 66,379 Country (40,869) Country Kingdom of - - Saudi Arabia 546 Cayman Islands Cayman 2015 2015 Cayman Islands Cayman Islands Cayman £’000 £’000 (436) 1,139 10,785 11,331 30,627 31,330 50 51 70 100 100 100 100 100 76.3 2014 2014 80.41 % held % held 51 70 50 100 100 100 100 100 76.3 2015 2015 80.41 % held % held Principal activity ofPrincipal activity registration Asset Management banking and Investment Holding Investment Shari’a advisory Asset Management, Private Equity Asset Management ofMarketing non-Omani securities Management Investment and Administration Under liquidation Under liquidation Under liquidation Principal activity ofPrincipal activity registration Annual Report and Accounts 2015
Rasmala plc Opening book value gain exchange Foreign Closing book value 36. Goodwill Delta Rasmala Investments Delta Rasmala Rasmala Financial Brokerage Rasmala Saudi CJSC Investments Rasmala Rasmala Managers Limited Rasmala Rasmala Investment Bank Limited Investment Rasmala Egypt Asset Management Rasmala Oman LLC Investments Rasmala At 1 January Additions Disposal during the year value (loss)/gain Fair gain Exchange At 31 December 2015 92 35. Investment in subsidiaries 35. Investment 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Goodwill created on the Rasmala acquisition is principally attributable to the value expected to be derived to be derived Goodwill created acquisition is principally attributable the Rasmala on expected to the value from the acquired group through future growth, from new clients and the operational additional business therefrom. derived synergies and savings No impairment recognised during the year. were charges Subsidiaries Group Subsidiaries Company All of subsidiaries and sub-subsidiaries of the above are consolidated. the Group Subsidiaries of Holdings Limited Rasmala EIIB Investco Ltd EIIB Investco Cordoba Capital (UK) Ltd Rasmala Holdings Limited Rasmala Financial Statements 95 40 43 67 35 31 216 40 2014 76 97 £’000 779 116 634 2014 £’000 (184) 44 44 74 37 33 - 232 78 20 26 2015 £’000 (345) (156) (377) 2015 £’000 4 8 8 12 12 44 Annual Report Accounts 2015 and
£’000 Rasmala plc Attendance fees Attendance 32 40 62 29 25 188 £’000 An amount of accrued £202,340 (2014: £192,592) is the for Hydari Imtiaz in the financial statements Mr. for services he rendered as the Chairman of Rasmala. group Rasmala during made to HBG by Payments payable 2015 are £20k (2014: £52k). The outstanding as at Group to HBG Rasmala 31 December 2015by £50k (2014: £30k). was (b) Full impairment of provision created £3.8m was relating from Rasmala to a receivable in 2011 by a related iHilal Baghlaf Company, Development which represents accrued management fees party, in connection with a real estate project based in Dubai. An amount of from reversed £1.0m was in the 2014 financial and reflected such provision statements. transactions Group Intra has entered into a commodity(a) The Company agreementmurabaha Holdings Limited with Rasmala Outstanding principal as at 31 during the year. (2014: £1.9m) and the £4.05m December 2015 was profit accrual (2014: £40k). £345k was between transactions intercompany (b) The following Holdings Limited took place and Rasmala Rasmala during the year: Fixed fees Fixed Zulfi Caar Hydari – CEO ofZulfi Caar Hydari and Group Rasmala CEO of Holdings Limited (RHL). Rasmala director of Rasmala. Limited (RHL). Imtiaz Hydari – Chairman Imtiaz Hydari of Holdings Rasmala Abdallah Y. Al-Mouallimi – Chairman of Rasmala. Abdallah Y. – Non-Executive Michael Willingham-Toxvaerd
Fee for managing Rasmala’s sukuk portfolio managing Rasmala’s for and funds Fee Advisory services Interest on Murabaha share banking fee Investment Salary recharges Other recharges Total Other operating expenses Abdallah Y Al-Mouallimi Michael Willingham-Toxvaerd Mohammed Al Sarhan Wright John Martin Barrow There were no payments made to Michael made no payments There were in relation in 2015 to Willingham-Toxvaerd arrangementConsultancy £50k). (2014: Rasmala with made relating to post- no payments There were other long-term benefits, benefits,employment termination benefits and share-based payments personnel. management key during 2015 to the above interests Other directors’ arrangementsThe Group enters into transactions, directors and their relatedand agreements involving concerns in the ordinary course of business. that all such is business believes Management conducted on an arms-length basis. (a) HBG Group owns 17.8% of ordinary Rasmala and a number ofshares, partners its and connected partiespositions and managerial hold key directorships at Group. the Rasmala l l l l Non-executive Transaction with non-controlling interests interests with non-controlling Transaction NCI of Holdings Ltd acquired the 49% During 2014, Rasmala Egypt Asset Rasmala its subsidiary, paid as purchase consideration to 100%. £1,773,769 was increasing its stake thereby Management, of this buy-out towards NCI share of 31st December 2013. £0.8m effective from its subsidiary along the Holdings Ltd exited Egypt Securities, During 2014, Rasmala Rasmala lines of receivables. its shares and intercompany £0.6m for its vision, for 38. Related party38. Related (continued) disclosures - - 8 8 167 314 306 314 716 450 450 2014 2014 2014 (324) (526) (220) (212) (526) £’000 £’000 6,438 £’000 (1,610) (1,007) (2,942) (6,124) - 83 466 158 624 329 819 679 412 856 2015 2015 £’000 2015 (947) (933) (451) (368) 2,699 8,413 1,459 1,130 1,459 1,091 £’000 £’000 (6,954) - - - Rasmala Holdings Ltd Rasmala Holdings £’000 loss of office Compensation for Compensation for 1 10 11 £’000 Pension Pension contributions 1 27 28 kind £’000 Benefits in 438 147 585 £’000 Salary Annual Report and Accounts 2015
Rasmala plc Net cash (outflow) from operating activities activities Net cash inflow/ (outflow) from investing activities Net cash inflow/ (outflow) from financing Net cash inflow (outflow) Dividends paid to non-controlling interests Dividends Total comprehensive income attributableowners to of comprehensive the Company Total income attributablethe non-controlling interests to comprehensive Total the year income for comprehensive Total Other comprehensive income loss to owners ofOther comprehensive the Company income attributable interests to the non-controlling Other comprehensive the year loss for Other comprehensive Profit attributable to owners of the Company Profit attributable to the non-controlling interests the year Profit for Revenue Expenses the year Profit for 38. Related party38. Related disclosures partiesRelated management include group directors companies including and other key subsidiaries, personnel and close family members of directors. A related party of is a transfer transaction services resources, related or obligations parties. between Compensation of management personnel key The remuneration of directors and other members of was personnel management during the year key as follows: * Neil McDougall was appointed interim CFO on 1st January 2015, the was * Neil McDougall 2015 and made permanent in the role on 24th November a director. and not just the period he was reflect his compensation the whole year for amounts above Short-term benefits employee 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For 37. Non-controlling interest (continued) interest 37. Non-controlling 94 Zulfi Caar Hydari Neil McDougall* Executive Financial Statements 97 8 22 22 954 954 954 954 Total Total £’000 Total 1,481 1,481 £’000 £’000 21,721 30,627 22,472 74,842 26,402 31,330 21,735 79,475 25,848 16,695 22,472 65,037 ------£’000 £’000 £’000 30,627 31,330 31,330 12,651 Level 3 Level Level 3 Level 30,627 Level 3 Level 12,651 Annual Report Accounts 2015 and
- - 8 22 22 954 954 954 954 £’000 £’000 £’000 1,481 1,481 4,044 44,215 48,259 Level 2 Level 26,402 21,735 48,145 21,721 22,472 21,721 22,472 Level 2 Level Level 2 Level Rasmala plc ------£’000 £’000 £’000 4,127 4,127 Level 1 Level Level 1 Level Level 1 Level Financial assets designated at fair value value ofFair agreements exchange foreign in subsidiaries Investments securities Available-for-sale Fair value ofFair agreements exchange foreign Financial assets designated at fair value value ofFair agreements exchange foreign designated at FVTPL Privateequity investments securities Available-for-sale value ofFair agreements exchange foreign Financial assets designated at fair value value ofFair agreements exchange foreign in subsidiaries Investments securities Available-for-sale Fair value ofFair agreements exchange foreign Financial assets Financial assets measured at fair value through profit or loss securities Available-for-sale At 31 December 2014 Company Financial liabilities Financial liabilities at fair value through profit or loss Financial assets atFinancial assets measured fair value through profit or loss securities Available-for-sale Financial liabilities Financial liabilities at fair value through profit or loss Financial assets Financial assets measured at fair value through profit or loss securities Available-for-sale At 31 December 2014 At 31 December 2014 Group At 31 December 2015 Company 39. Valuation of39. Valuation (continued) at assets measured fair value of a on and liabilities financial assets at that value measured value fair are the Group’s Fair recurring basis (continued) Financial liabilities Financial liabilities at fair value through profit or loss 8 Total £’000 1,481 1,481 29,103 19,882 21,735 70,728 - - - - - £’000 16,118 16,118 Level 3 Level 8 £’000 3,764 1,481 1,481 26,402 21,735 51,909 Level 2 Level - - - - - £’000 2,701 2,701 Level 1 Level Valuation techniques include net present Valuation cash flow models, value and discounted instrumentscomparison to similar which for observablemarket and other prices exist inputs Assumptions and valuation models. used in valuation techniques include risk-free and benchmark rate of returns, other premia used in credit spreads and estimating equity bond and rates, discount rates currency foreign prices, exchange of The objective and net asset valuations. valuation at techniques a fair is to arrive value determination that reflects the price of the financial instrument at the reporting date been determined market by that have would participants acting at arm’s length. The Group has an established control with respect to the measurement framework of includes This framework fair values. and reportingindependent price verification Risk department the Group’s by to the Chief Risk and and the Group’s Officer, Executive The Risk department committees. Audit has independently verifying responsibility for overall assets and all significant the transactions, fair value measurements. of financial assets value the Group’s Fair and liabilities at that measured fair are on a recurring basis value The table below analyses financial instruments measured at fair value at the end of the reporting into in the fair value hierarchy the level period, by which the fair value measurement is categorised:
Annual Report and Accounts 2015
Rasmala plc Financial assets designated at fair value value ofFair agreements exchange foreign designated at FVTPL Private equity investments securities Available-for-sale Fair value ofFair agreements exchange foreign Financial assets Financial assets measured at fair value through profit or loss securities Available-for-sale 96 For all other financial instruments, all other financial the Group For determines fair values using valuation techniques. 39. Valuation of39. Valuation at assets measured fair value fair values using the The Group measures that the reflects fair value hierarchy following significance of used in making the the inputs measurements: price (unadjusted) in an 1: Quoted market Level instrument an identical for market active techniques based on 2: Valuation Level as prices) either directlyobservable (i.e. inputs, from prices) derived or indirectly (i.e. This category includes instruments valued using: similar for markets prices in active quoted market instruments; identical or similar quoted prices for instruments that are considered less in markets or other valuation techniques where than active; all significant inputs are directly or indirectly observable data. from market techniques using significant 3: Valuation Level unobservable inputs This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs effect a significant on the instruments’ have valuation. This category includes instruments that similar valued based on quoted prices for are instruments where significant unobservable to adjustments or assumptions are required reflect differences the instruments. between values ofFair financial assets and financial are based markets liabilities that in active are traded prices or dealer price quotations. on quoted market 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For At 31 December 2015 Group Financial liabilities Financial liabilities at profit or loss fair value through Financial Statements 99 - - - - 15 - - - - Total Total (436) (436) £’000 1,506 1,127 4,244 £’000 1,139 74,949 25,241 30,627 30,627 31,330 (4,574) (46,640) £’000 £’000 - Effect on Effect on - - - - Effect on Effect on - - 873 (436) (436) £’000 Unfavourable £’000 Unfavourable 4,244 1,139 25,510 30,627 30,627 31,330 66,379 (40,869) - - - -
Subsidiaries Subsidiaries £’000 £’000 Investments in Investments Investments in Investments comprehensive income comprehensive comprehensive income comprehensive Annual Report Accounts 2015 and
Favourable - - - Favourable ------15 (15) £’000 (974) £’000 4,027 1,506 (4,574) Rasmala plc for-sale for-sale for-sale for-sale Available Available (627) (627) securities securities £’000 £’000 (1,612) (1,612) Unfavourable Unfavourable ------254 (254) £’000 £’000 4,543 (4,797) 627 627 Effect or loss on profit £’000 Effect or loss on profit fair value fair value 1,612 1,612 £’000 fair value fair value designated at designated at designated at designated at Favourable Favourable Financial assets Financial assets Financial assets assets Financial income statement income statement
- in other comprehensive income - in other comprehensive - in - in other comprehensive income - in other comprehensive - in The effect of unobservable inputs used in measuring fair value 31 December 2015 Company Investments in subsidiaries *** in subsidiaries *** Investments Settlements and other movements Balance at 31 December Balance at 1 January Purchases/Additions Disposal/Redemptions Transfers* or losses: gains Total 31 December 2015 Group Private equity investments Private equity investments designated at fair value through profit or loss** *Sukuks previously treated as level 3 have been transferred to level 2. been transferred to level 3 have treated as level *Sukuks previously that its estimates of believes Although Management the use of fair value are appropriate, different methodologies or assumptions could lead to different measures of fair value For fair value. changing 3, or more of one measurements in Level the assumptions used, to reasonably possible effects: the following have assumptions would alternative 2014 Company Settlements and other movements Balance at 31 December Balance at 1 January Purchases/Additions Disposal/Redemptions Transfers* or losses: gains Total 2015 Company 39. Valuation of39. Valuation at assets measured fair value (continued) technique valuation 3 Level - - - - - 15 453 312 Total (610) Total 3,155 3,155 £’000 (625) £’000 1,506 12,651 12,651 16,118 17,104 (1,228) (4,574) ------15 15 £’000 £’000 (974) 4,027 1,506 for-sale for-sale for-sale for-sale (4,574) Available Available securities securities ------453 312 (879) £’000 3,155 3,155 £’000 (879) 12,651 12,651 16,118 13,077 designated at FVTPL designated at FVTPL Valuation technique(s) and key input(s) and key technique(s) Valuation DCF technique, Independent appraisal, inputs adjusted for NAV Private equity investments equity investments Private Private equity investments equity investments Private ------254 254 £’000 £’000 (254) fair value fair value fair value fair value designated at designated at designated at designated at Financial assets Financial assets Financial assets Financial assets Fair value hierarchy value Fair Level 3 Level Annual Report and Accounts 2015
Rasmala plc income statement
Financial asset/liability - in income statement income - in other comprehensive Settlements and other movements - in other comprehensive income - in other comprehensive - in Private equity investments Private equity investments designated at FVTPL The Group values the underlying investments in the level 3 private equity investments using the valuation equity investments 3 private in the level the underlyingThe Group values investments as at 31 when used as audited NAVs The group NAVs adjusts techniques referred to in the table above. the time these financial statements issue. are authorised for by December 2015 are not available These all recognisedOther inputs include property liquidity discounts, valuation inputs and occupancy. represent unobservable 3 in the fair value inputs that equity being classified result in private as level analysis the number of not presented sensitivity the Directors Given have underlying investments, hierarchy. not deem it to be material. do as they these investments for at input level an individual all ofThe group for does not prepare an aggregated analysis at equity level a private input sensitivity the correlation as it is not possible to calculate the effective across investments. investments 98 39. Valuation of39. Valuation at assets measured fair value technique 3 valuation Level 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Balance at 1 January Transfer Purchases/Additions Disposal/Redemptions or losses: gains Total Balance at 31 December 2014 Group 2015 Group Settlements and other movements Balance at 31 December Balance at 1 January Transfer Purchases/Additions Disposal/Redemptions Transfers* or losses: gains Total Reconciliations of level 3 fair value measurements ofReconciliations 3 fair value level table fair value measurements in reconciles the opening balances to the closingThe following balances for 3 ofLevel hierarchy. the fair value Financial Statements 101 Annual Report Accounts 2015 and
Rasmala plc Information Risk the is compiled by departmentand areas from all business EMC, CIC, to the BRC, is then presented The Risk basis. and Board on a regular Report includes reporting detailed of credit internal geographical by ratings, exposures industryregions, asset maturities, sectors, profit for risk exposures liquidity and market and and money exchange foreign rates, instruments. capital market Daily reports and market on credit exposures the Risk by risks are compiled and distributed department to senior management. (3) Risk mitigation are used where possible. Risk mitigants the Group cannot use non-Shari’a However, products to mitigate compliant derivative as part of risk risk. Consequently, its overall the Group utilises management framework currencyShari’a compliant products to hedge risk and profit rate risk. risk Credit Credit risk is the risk that the Group’s clientscustomers, or counterparties will not capitalbe able and/or repay or willing to profit or otherwise be unable to meet their obligations under credit facilities contractual or in respect of other agreements. The Group has a standard credit approval clients all customers, and process for counterparties and all are assigned an internal are subject to Exposures risk rating. are allocated to All exposures regular review. countrya country limit. within a pre-approved Concentration risk Concentration risk arises when a number of counterparties in similar are engaged in the same or activities activities, business similar economic geographic or have regions, cause their abilitycharacteristics that would obligations to be similarlyto meet contractual political or a change in economic, affected by other conditions. concentration risk, excessive avoid to In order the Group has specific guidelines and limits to Group, exposure in place to restrict large Country and Industry Issuer, sector exposures. Credit risk risk Market Operational including risk other residual Liquidity risk Committee and the Board ofCommittee and the Directors in managing of and controlling risk in all areas identification, through proactive the Group, control, measurement, evaluation, and reportingmonitoring, of: l l l l risks (e) Finance Committee (“FinComm”) FinComm is Among its other duties, constituted to assist the Executive in Committee and the Board Management managing the capital, liquidity, proactively assets and liabilities of It is the Group. also mandated the risk-reward to manage solvency, relationship between that exists liquidity and profit rate risk. (f) Internal Audit primaryInternal Audit’s role is to provide Committee and the to the Audit assurance Board that the risk management, internal control, corporate and other governance and controls, processes business key and meeting the are operating effectively ongoing and changing needs of the Group. with management This includes providing independent appraisals of systems of internal control and supporting development of the a sound control culture throughout Group. and reporting(2) Measurement The risks within the Group are assessed and qualitative using quantitative Losses are calculatedmethodologies. using assumptions based on consideration of the in which the Group economic environment and conditions in stress scenarios operates, the Islamic banking market. a set of by Risk is managed comprehensive These reflect triggers processes. and limits, risk appetite and strategy, the business in which the Group environment market risk capacity operates and its overall in relation to capital and regulatory the UK requirements set by Regulatory Authorities. - - - - £’000 £’000 Effect on Effect on Effect on Effect on (Unfavourable) (Unfavourable) - - - -
£’000 £’000 comprehensive income comprehensive comprehensive income comprehensive Favourable Favourable (613) (613) £’000 £’000 (1,265) (1,265) (Unfavourable) (Unfavourable) (b) Board Risk Committee (“BRC”) Risk Committee (b) Board is a sub-committee ofThe BRC the Board of Directors which fulfilling its assists the Board in to risk management responsibilities from day include responsibilities The committee’s day. and oversight providing on risk strategy, advising challenge supporting reviewing a risk culture, risk policies and assessing, and approving that are all exposures and approving reviewing within its delegated authority. Management Committee (c) Executive (“EMC”) The EMC assists the Chief Officer Executive These includein performing his duties. consideration of and the development implementation operational plans, of strategy, as the assessment as well policies and budgets and control of risk. Committee (“CIC”) & Investment (d) Credit Management The CIC assists the Executive 613 613 Effect or loss on profit £’000 Effect or loss profit on £’000 1,265 1,265 Favourable Favourable Annual Report and Accounts 2015
Rasmala plc Appropriate each asset measurement based on: change for ** applicable price (10%) change % to the market fair value in *** 2% change may conditions and these inter-relationships market are influenced by as they Inputs are inter-related mitigate the impact on value if used in The percentages in opposite directions. moved these inputs analysis represents the Board ofthe sensitivity Directors’ assessment of the reasonable possible change in them at the reporting date. 40. Financial Risk Management Introduction The Board of risk set an overall Directors have documented in line with risk appetite, framework within a set of policies which risk management the Board or mandated risk by are approved Ultimate risk responsibility for committees. resides with the Board of Directors. to credit risk, The Group is mainly exposed operational risk, risk and liquidity risk. market (1) Structure of(a) Board Directors The Board of Directors is ultimately accountable the approving risk within the Group and for for strategies and principles tolerances, risk appetite, The to ensure a strong control environment. Board has mandated a number of committees with managing and monitoring risks within tasked the Group. 100 39. Valuation of39. Valuation (continued) at assets measured fair value 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For The effect of unobservable inputs used in measuring fair value 31 December 2014 Company Investments in subsidiaries *** in subsidiaries *** Investments 31 December 2014 Group Private equity investments Private equity investments designated at fair value through profit or loss** Financial Statements 103
------8 Total 754 178 £’000 2014 5,406 £’000 3,587 2,111 2,515 1,392 5,515 8,014 29,103 20,565 19,882 99,023 55,725 21,735 20,304 35,421 25,862 103,329
- - -
178 175 Non- Non------£’000 754 grade 9,344 3,332 2,111 26,805 19,124 61,823 6,134 2,125 2,064 9,117 1,329 39,431 33,297 22,800 76,866 investment investment Company
- - - - 8 Annual Report Accounts 2015 and
2015 £’000 758 255 - - - £’000 2,298 5,231 grade 41,506 20,565 12,391 2014 £’000 4,043 2,563 2,932 7,625 1,392 5,515 54,297 18,876 35,421 10,220 36,554 Investment Investment 125,141 Rasmala plc - - 7,091 2,125 2,064 1,329 3,764 2,298 2,756 2,795 34,898 37,276 30,185 14,024 103,329 Group Group 2015 2015 £’000 Financial instruments issued by financial institutions rated financial institutions Financial instruments below BBB-, Baa3 issued by The Group has classified financial institutions financial instruments issued by Cash and cash equivalents Due from financial institutions Financing arrangements sale securities (sukuk) for Available Financial assets designated at fair value value ofFair agreements exchange foreign designated at fair Private equity investments value through profit or loss GCC banks Europe/Other banks Accrued income Other receivables Margin deposits Escrow deposits Financial assets measured atFinancial assets measured amortised cost sale securities for Available through atFinancial assets measured fair value or loss profit Other assets exposure credit Total Financial servicesFinancial Manufacturing & engineering Government estate Real Other financial Oil & gas Mining Food Healthcare Agricultural Information & Communication technology Other exposure credit Total The credit quality of the Group using internal financial assets is managed by credit ratings which are The mapped to external credit rating and Standard & Poor’s. ratings agencies’ including Fitch, Moody’s table the credit quality of below shows the portfolio internal based on the Group’s credit rating. Adoption of guides the firm as to what and how much credit risk to take. Risk Framework The Group’s the principles to ensure provides Policy and adherence to its Risk Appetite Statement and Tolerance and risk strategy and informs development business is consistent with its overall risk culture the bank’s decision-making. Grade: Investment or Fitch, respectively, Moody’s Standard and Poor’s, rated atwhich were by least BBB-, Baa3 or BBB- grade. as investment Grade: Non-Investment classified been as have or Fitch, respectively, Moody’s Standard and Poor’s, or BBB- by grade. non-investment (iii) Industry Sector by industryExposures were: (4) Credit quality (4) Credit 2015 Group ------22 154 379 108 2014 2014 £’000 7,722 7,235 5,053 7,807 £’000 3,268 99,023 53,043 99,023 34,226 11,500 22,726 22,472 21,743 21,721 49,621 34,980 11,000
------8 - 119 255 724 754 3,241 9,200 1,733 2,121 1,314 5,463 1,329 12,553 23,747 76,866 14,547 21,735 26,410 26,402 28,969 25,415 28,552 76,866 Company 2015 2015 £’000 £’000 - - - 22 380 154 2014 2014 £’000 2,466 1,830 7,383 1,756 7,807 £’000 3,268 4,521 1,195 3,715 6,287 6,562 59,616 63,418 16,695 11,679 34,056 11,500 20,800 22,472 42,565 25,848 35,005 11,000 125,141 125,141 - - 8 754 178 865 119 4,190 6,630 3,587 2,111 5,406 9,200 7,236 3,057 1,329 4,629 2,418 1,314 42,255 10,500 21,735 48,993 29,103 19,882 20,565 28,080 12,553 38,404 103,329 103,329 Group Group 2015 Company 2015 Group Group £’000 £’000 Annual Report and Accounts 2015
Rasmala plc Bahrain UAE Kuwait Saudi Arabia Qatar Middle East (Other) Europe USA Turkey Asia Australasia Africa exposure credit Total GCC countries Assets carried at amortised cost Cash and cash equivalents measured at Financial assets amortised cost - Wakala Bills - Treasury - Murabaha Financing arrangements securities Available-for-sale (sukuk) sale securities for Available or loss profit through value Fair Financial assets designated at fair value value of Fair agreements exchange foreign designated atFVTPL Private equity investments Other assets Accrued income Other receivables Margin deposits Escrow deposits exposure credit Total (ii) Geographical regions (ii) Geographical Exposures by geographical region were: region by geographical Exposures 102 Exposures by asset class were: were: class by asset Exposures 40. Financial Risk Management40. Financial Risk (continued) (i) Exposure For the year ended 31 December 2015 31 December ended the year For 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes Financial Statements 105 22 379 108 Total £’000 5,053 7,807 7,235 99,023 34,226 22,472 21,721 - 1 - - Non- Non- £’000 108 grade 5,400 9,579 7,235 21,721 44,044 investment investment - - - Annual Report Accounts 2015 and 22
379 £’000 5,052 2,407 grade 34,226 12,893 54,979 Investment Investment Rasmala plc Cash and cash equivalents institutions Due from financial Financing arrangements sale securities (sukuk) for Available Financial assets designated at fair value value ofFair agreements exchange foreign Accrued income Other receivables Escrow deposits Financial assets measured atFinancial assets measured amortised cost atFinancial assets measured fair value through atFinancial assets measured fair value or loss profit Other assets exposure credit Total (v) Aged analysis of financial assets impaired (2014: Nil). impaired atNo financial assets are past due or the year-end risk Market portfolioThe Group had no trading during 2015 (2014: Nil). RateProfit Risk Profit rate risk is the risk of in profit rates loss arising from changes applicable to Islamic financial to calculate the net profit using maturity buckets The Group managesprofit rate risk by arrangements. rates of and non-sensitive rate whilst considering floating, gap fixed return. under sensitivity As outlined to fair value of of the impact page, instruments on the next and Company’s on the Group these gaps equity is not considered to be material. 40. Financial Risk Management40. Financial (continued) (continued) Risk Credit 2014 Company -
8 22 255 724 754 Total £’000 Total 2,466 6,562 7,807 £’000 3,241 1,830 7,383 16,695 34,056 22,472 25,848 26,402 76,866 23,747 21,735 125,141 ------527 Non- Non- Non- £’000 £’000 724 754 174 grade grade 5,400 2,087 7,383 9,344 1,830 10,168 23,284 15,541 66,220 26,402 37,398 investment investment investment - - - -
- - 8 22 255 379 £’000 £’000 3,067 6,035 2,407 2,564 1,154 grade grade
12,391 39,468 58,921 34,056 12,304
23,747 Investment Investment Investment Investment Annual Report and Accounts 2015
Rasmala plc Cash and cash equivalents Due from financial institutions Financing arrangements securities (sukuk) sale for Available Financial assets designated at fair value value ofFair agreements exchange foreign Cash and cash equivalents institutions Due from financial Financing arrangements sale securities (sukuk) for Available Financial assets designated at fair value value ofFair agreements exchange foreign designated at fair Private investments equity value through profit or loss Accrued income Other receivables Escrow deposits Accrued income Other receivables Escrow deposits Total credit exposure credit Total Financial assets measured atFinancial assets measured fair value through atFinancial assets measured fair value or loss profit Other assets Financial assets measured atFinancial assets measured amortised cost Total credit exposure credit Total Financial assets measured atFinancial assets measured amortised cost atFinancial assets measured fair value through atFinancial assets measured fair value or loss profit Other assets 104 2015 Company 2014 Group 40. Financial Risk Management40. Financial Risk (continued) Risk (continued) Credit 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Financial Statements 107 ------Annual Report Accounts 2015 and
1,348 £’000 £’000 8,525 1,722 1,348 1,348 31,968 - - 99,149 - - 21,721 31,968 118,511 Rasmala plc Over 5 years Over Over 5 years 5 Over ------148 178 £’000 £’000 1,859 20,682 86,543 - - 54,552 97,801 20,534 20,682 - - 14,524 26,402 11,589 54,552 1-5 years 1-5 years Rate band profile ------9,193 £’000 £’000 8,170 1,023 9,193 3,126 2,298 8,293 65,861 - - 13,717 43,249 - - 13,717 7-12 months 7-12 months ------865 865 865 £’000 £’000 1,756 5,400 7,156 7,156 56,668 - - 29,532 - - 4-6 months 4-6 months ------962 488 3,630 £’000 6,872 £’000 1,064 2,407 1,938 4,700 3,134 7,834 13,067 49,512 28,667 10,800 16,697 962 962 3,630 3,630 2-3 months 2-3 months - - - - - 8 22 379 108 403 453 252 754 £’000 3,000 £’000 3,218 3,639 7,235 6,562 5,406 2,737 36,445 36,445 21,795 21,795 39,445 21,500 15,000 25,013 3,000 3,000 3,218 3,218 0-1 month 0-1 month 8 22 754 178 Total Total £’000 £’000 6,630 4,180 2,466 1,830 7,383 6,562 7,807 5,406 3,587 2,111 99,149 16,695 34,056 22,472 25,848 20,565 21,735 29,103 19,882 118,511 125,141 103,329 6,630 4,180 4,180 Annual Report and Accounts 2015
Rasmala plc Liabilities Accrued income Other receivables Escrow deposits Financial assets designated at FV FV of agreements exchange foreign designated at FVTPL PE investments Available for sale securities (sukuk) for Available Accrued income Other receivables Margin deposits Escrow deposits Financial assets designated at FV FV of agreements exchange foreign designated at FVTPL PE investments Available for sale securities (sukuk) for Available Financial liabilities measured at amortised cost Liabilities Total Net Gap Gap Cumulative Total Total Other assets Fair value through profit or loss profit through value Fair Assets carried at amortised cost Cash and cash equivalents Financial assets measured at amortised cost Financing arrangements securities Available-for-sale 40. Financial Risk Management40. Financial (continued) Total Total Other assets Fair value through profit or loss profit through value Fair Assets carried at amortised cost Cash and cash equivalents atFinancial assets measured amortised cost securities Available-for-sale Liabilities 106 Financial liabilities measured at amortised cost Liabilities Total Net Gap Gap Cumulative For the year ended 31 December 2015 31 December ended the year For 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2014 Rate (£’000) Profit Profile Group Assets 2015 Rate (£’000) Profit Profile Group Assets Financial Statements 109 ------Annual Report Accounts 2015 and
1,348 £’000 £’000 1,348 1,348 21,721 99,023 - - 76,866 - - 21,721 21,721 Rasmala plc Over 5 years Over Over 5 years 5 Over ------£’000 £’000 20,534 77,302 - - 40,926 75,518 20,534 20,534 - - 14,524 26,402 40,926 1-5 years 1-5 years Rate band profile ------3,126 £’000 £’000 3,126 3,126 56,768 - - 34,592 - - 7-12 months 7-12 months ------£’000 £’000 7,326 1,926 5,400 7,326 56,768 - - 31,466 - - 4-6 months 4-6 months ------8,747 £’000 £’000 2,407 1,938 8,747 8,747 31,466 15,145 49,442 10,800 15,145 2-3 months 2-3 months ------8 22 - - - - 379 108 255 724 754 £’000 £’000 5,053 7,235 3,241 2,737 34,297 34,297 22,719 22,719 21,500 34,297 15,000 22,719 0-1 month 0-1 month - - - - 8 22 379 108 255 724 754 Total Total £’000 £’000 7,235 5,053 7,807 3,241 76,866 99,023 99,023 34,226 22,472 21,721 76,866 23,747 21,735 26,402 Annual Report and Accounts 2015
Rasmala plc 40. Financial Risk Management40. Financial (continued) Financial liabilities measured at amortised cost Liabilities Total Net Gap Gap Cumulative Liabilities Liabilities 108 For the year ended 31 December 2015 31 December ended the year For 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2014 Rate (£’000) Profit Profile Company Assets Accrued income Other receivables Margin deposits Financial assets designated at FV FV of agreements exchange foreign Available for sale securities (sukuk) for Available Accrued income Other receivables Escrow deposits Financial assets designated at FV FV of agreements exchange foreign Available for sale securities (sukuk) for Available Financial liabilities measured at amortised cost Liabilities Total Net Gap Gap Cumulative Total Total Other assets Fair value through profit or loss profit through value Fair Assets carried at amortised cost Cash and cash equivalents atFinancial assets measured amortised cost securities Available-for-sale 2015 Rate (£’000) Profit Profile Company Assets Total Total Other assets Fair value through profit or loss value through profit Fair Assets carried at amortised cost Cash and cash equivalents Financial assets measured at amortised cost Financing arrangements securities Available-for-sale Financial Statements 111 +92 -909 -597 +278 +10% +10% +10% +10% +48 -476 -313 +5% +5% +5% +5% +146 Annual Report Accounts 2015 and
+20 +60 -196 -129 +2% +2% +2% +2% Rasmala plc -21 -62 134 -2% -2% -2% -2% +204 -53 -5% -5% -5% -5% -161 +526 +346 -112 -340 +730 -10% -10% -10% -10% +1,111 Change in USD rates (%) Effect on income statement and net assets (£’000) Change in USD rates (%) Effect on income statement and net assets (£’000) Change in USD rates (%) Effect on income statement and net assets (£’000) Change in USD rates (%) Effect on income statement and net assets (£’000) 2015 Group Equities risk Equities risk is the risk of Exposure comprises direct exposure in equity prices. loss arising from changes to this discretionary a fund all of portfolio to equities held by and indirect exposure which are separately analysis is based in the assumption that the price of and administered. The above managed these 5% at the reporting by had increase/decreased dateinvestments with all other variables being constant. Commodities risk Commodities risk is the risk of held No commodities were in commodity prices. loss arising from changes Exposure to finance funds from time to time. are made in trade during 2015 (2014: none). Investments a fund which is separately to commodities held by include indirect exposure finance fund may a trade and administered. managed 2014 Group Market risk (continued) Market Currency risk Currency risk of risk is the has set The Board rates. exchange in foreign arising from changes loss open currencylimits on are daily to ensure positions are monitored and these positions positions the establishedmaintained within limits. currency significant reporting as all positions other than the positions take The Group does not within residual currency Small remain which are well currency exposures covered. are substantially limits. the Board approved of assessment below represent the Board’s analysis The percentagesin the sensitivity used the reasonable possible change in currency rates at the reporting date. Company Company +554 +929 +810 +428 +100 bp +100 bp +100 bp +100 bp +277 +465 +405 +214 +50 bp +50 bp +50 bp +50 bp +138 +232 +203 +107 +25 bp +25 bp +25 bp +25 bp -138 -232 -203 -106 -25 bp -25 bp -25 bp -25 bp -249 -465 -405 -193 -50 bp -50 bp -50 bp -50 bp -387 -368 -929 -810 -100 bp -100 bp -100 bp -100 bp Annual Report and Accounts 2015
Rasmala plc Change in rates (Basis points) Effect on income statement £’000 Change in rates (Basis points) Effect on income statement £’000 Change in rates (Basis points) Effect on fair value (equity) £’000 Change in rates (Basis points) Effect on fair value (equity) £’000 2014 Group 2015 Group 110 40. Financial Risk Management40. Financial Risk (continued) 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes 2015 31 December ended the year For Sensitivity to fair value of to fair value Sensitivity instruments the fair value of in profit rate products, does not hold or trade While the Company financial instruments The table current held will be affected including below profit rates. forces by market ofsets out the sensitivity changes in fair values of equity to and Company’s Group’s the related instruments assuming all other factors remain constant. assessment of analysis below represent the Board’s The percentages used in the sensitivity the reasonable in profit rates possible change at the reporting date. Sensitivity to income to income Sensitivity ofsensitivity The Profit rate within profit rate risk is managed limits on a daily basis. gap the Income An analysis ofStatement profit rate to various a daily basis. scenarios is considered on to sensitivity in yield curves no asymmetrical movement assuming profit rates, in market an increase or decrease in the end. The percentages used at position, is as follows and a constant financial the financial year of assessment the Board’s analysis below represent sensitivity reasonable the in change possible profit rates at the reporting date. 2015 Group 2014 Group Financial Statements 113 ------304 Annual Report Accounts 2015 and
£’000 1,348 1,348 1,044 92,019 1,044 1,044 Over 5 years Over Rasmala plc ------178 £’000 1,859 54,552 91,715 - - 14,524 26,402 11,589 54,552 1-5 years Cashflow band ------363 £’000 3,126 2,298 8,293 13,354 37,163 13,717 363 363 7-12 months ------865 865 726 139 £’000 23,809 726 726 4-6 months ------962 £’000 3,134 4,700 1,300 1,481 9,023 52,149 59,983 47,217 23,670 50,960 50,960 2-3 months - - 8 - 403 453 252 754 202 £’000 5,406 2,737 3,218 3,298 15,000 26,608 51,621 30,256 14,647 14,647 0-1 month 36,974 36,974 8 202 754 178 Total £’000 1,481 4,180 6,731 5,406 3,587 2,111 77,473 90,067 92,019 20,565 21,735 29,103 19,882 78,757 182,086 outflows using specific cash flow projections outflows using specific and liability asset matchingor more general techniques such as duration matching; higher credit-quality securities with deep and higher credit-quality and liquid markets; for restricting them where appropriate, debt issues or issuers. by example, matching cash inflows with expected cash cash resources; maintaining sufficient of maintaining a prudent in level investments concentrations and monitoring investment l l l l utilising some or all ofutilising some or all techniques: the following The Group and Company had the following had the following The Group and Company ofliquidity profiles that are representative undiscounted cash flows and its contractual exchange foreign which include forward commitments: Annual Report and Accounts 2015
Rasmala plc Financial liabilities measured FVTPL Financial liabilities measured at amortised cost payable Income Tax Other liabilities commitments exchange Forward Liabilities Total Net gap Cumulative 112 Liquidity risk risk thatLiquidity risk is the the Group will obligations be unable to meet its payment this risk the Group limit To fall due. when they maturities the manages of its assets and liabilities and its cash flows on a daily basis and maintains a portfolio of short-term bank is the risk management Liquidity deposits. responsibility of FinComm. Liquidity profile based on contractual Liquidity is managed Liquidity risk is quite minimal since cash flows. deposits and is lowly takes no longer Rasmala leveraged. gross The Group’s cash outflows are largely self-liquidating from offsetting transactions. risk by resulting liquidity manages any Treasury For the year ended 31 December 2015 31 December ended the year For 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes Accrued income Other receivables Margin deposits Escrow deposits commitments exchange Forward Financial assets designated at FV FV of agreements exchange foreign designated at FVTPL PE investments Available for sale securities (sukuk) for Available Liabilities 2015 (£’000) Liquidity profile Group Assets Total Total Other assets Fair value through profit or loss profit through value Fair Assets carried at amortised cost Cash and cash equivalents Financial assets measured at amortised cost securities Available-for-sale 40. Financial Risk Management40. Financial (continued) Financial Statements 115 ------818 818 Annual Report Accounts 2015 and
£’000 8,525 1,722 21,721 31,968 31,150 111,024 Over 5 years 5 Over Rasmala plc ------148 £’000 20,682 79,874 - - 20,534 20,682 1-5 years Cashflow band ------944 £’000 8,170 1,023 9,193 3,630 4,574 4,619 59,192 7-12 months ------525 £’000 1,756 5,400 7,156 6,631 54,573 525 525 4-6 months ------488 £’000 1,064 2,407 1,938 2,229 10,800 59,345 76,132 59,896 14,007 47,942 62,125 62,125 2-3 months - - - 22 379 108 954 787 299 £’000 3,639 7,235 6,562 3,000 20,819 60,264 21,500 21,289 33,935 33,935 0-1 month 26,329 26,329 22 954 787 Total £’000 6,630 4,815 6,562 7,807 2,466 1,830 7,383 81,185 94,371 34,056 22,472 25,848 16,695 80,254 111,024 205,395 Annual Report and Accounts 2015
Rasmala plc Liabilities Financial liabilities measured FVTPL Financial liabilities measured at amortised cost payable Income Tax Other liabilities commitments exchange Forward Liabilities Total Net gap Cumulative 114 For the year ended 31 December 2015 31 December ended the year For 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes Assets carried at amortised cost Cash and cash equivalents atFinancial assets measured amortised cost Financing arrangements securities Available-for-sale sale securities (sukuk) for Available or loss profit through value Fair Financial assets designated at FV FV of agreements exchange foreign designated at FVTPL PE investments Other assets Accrued income Other receivables Escrow deposits commitments exchange Forward Total 2014 (£’000) Liquidity profile Group Assets 40. Financial Risk Management40. Financial (continued) (continued) Liquidity profile Financial Statements 117 ------Annual Report Accounts 2015 and
£’000 1,348 1,348 1,348 74,995 - - Over 5 years 5 Over Rasmala plc ------£’000 40,926 73,647 - - 14,524 26,402 40,926 1-5 years Cashflow band ------£’000 3,126 3,126 3,126 32,721 - - 7-12 months ------£’000 29,595 - - 4-6 months ------£’000 8,747 1,481 52,149 60,896 47,217 48,698 12,198 29,595 2-3 months - 8 - 255 724 754 £’000 3,241 2,737 1,674 15,000 26,608 49,327 30,256 31,930 17,397 17,397 0-1 month 8 255 724 754 Total £’000 1,481 1,674 3,241 77,473 80,628 74,995 78,757 23,747 21,735 26,402 155,623 Annual Report and Accounts 2015
Rasmala plc Liabilities Financial liabilities measured FVTPL Other liabilities commitments exchange Forward Liabilities Total Net gap Cumulative 116 For the year ended 31 December 2015 31 December ended the year For 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes Assets carried at amortised cost Cash and cash equivalents atFinancial assets measured amortised cost securities Available-for-sale sale securities (sukuk) for Available or loss profit through value Fair Financial assets designated at FV FV of agreements exchange foreign Other assets Accrued income Other receivables Margin deposits commitments exchange Forward Total 2015 (£’000) Liquidity profile Company Assets 40. Financial Risk Management40. Financial Risk (continued) (continued) Liquidity profile Financial Statements 119 ------
Annual Report Accounts 2015 and
£’000 21,721 21,721 21,721 95,224 Over 5 years 5 Over Rasmala plc ------£’000 20,534 73,503 - - 20,534 20,534 1-5 years Cashflow band ------£’000 52,969 7-12 months ------£’000 1,926 5,400 7,326 7,326 52,969 - - 4-6 months ------£’000 2,407 1,938 1,914 10,800 59,345 74,580 59,896 12,770 45,643 61,810 61,810 2-3 months - - - - 22 379 108 954 £’000 7,235 5,053 20,819 55,116 21,500 21,289 32,873 32,873 0-1 month 22,243 22,243 22 954 379 108 Total £’000 1,914 7,235 5,053 7,807 81,185 84,053 95,224 80,254 34,226 22,472 21,721 179,277
Annual Report and Accounts 2015
Rasmala plc The Group’s capital comprises ordinaryThe Group’s share capital, share premium, capital redemption reserve, accumulated fair value reserve losses and special reserve, subject to other regulatory adjustments. and policy is to maintain a strong capital primary base so as to maintain The Group’s objective has complied with all The firm, along with its major subsidiary, confidence. client and market investor, regulatory capital requirements throughout the year. after the reporting period 41.Significant events The Directors since the reporting confirm that events there are no significant date that should be reported to the shareholders. As at 31 December 2015 and at 31 December 2014, the Company had no contingent liabilities. As As at liabilities. 31 December 2015 and at had no contingent 31 December 2014, the Company at funding commitments ofundrawn 31 December 2015 the Group had Nil (2014: £6.4m) (note 30). Capital management and risk Financial liabilities measured FVTPL Other liabilities commitments exchange Forward Liabilities Total Net gap Cumulative Liabilities 118 For the year ended 31 December 2015 31 December ended the year For 5.7 Notes To The Financial Statements The Financial (Continued) To 5.7 Notes Assets carried at amortised cost Cash and cash equivalents atFinancial assets measured amortised cost Financing arrangements securities Available-for-sale sale securities for Available or loss profit through value Fair Financial assets designated at FV FV of agreements exchange foreign Other assets Accrued income Other receivables Escrow deposits commitments exchange Forward Total 2014 (£’000) Liquidity profile Company Assets 40. Financial Risk Management40. Financial (continued) (continued) Liquidity profile 120 Rasmala plc Annual Report and Accounts 2015 Solicitors LLP Berwin Leighton Paisner Adelaide House London Bridge London EC4R 9HA Registered Office Registered plc Rasmala Milton Gate Street 60 Chiswell London EC1Y 4SA United Kingdom Enquiries General (0) 20 7847 9900 +44 Tel: Email: [email protected] Auditors BDO LLP Street 55 Baker London W1U 7EU Nominated Adviser and Broker Stockdale Securities Beaufort House 15 St. Botolph Street London EC3A 7BB Annual Report and Accounts 2015
Rasmala plc
122 Registrars Limited Capita Registrars The Registry Road 34 Beckenham Beckenham Kent BR3 4TU Contact: Neil McDougall Email: [email protected] +44 20 7847 9900 Tel: Neil McDougall Neil McDougall Chief Secretary Financial Officer and Company Relations Investor Zulfi Caar Hydari Chief Officer Executive John RobertsonJohn Wright Director Non-Executive Martin Gilbert Barrow Director Non-Executive Michael Willingham-Toxvaerd Director Non-Executive Mohammed Al Sarhan Director Senior Independent Directors Al-Mouallimi Abdallah Y. Chairman Registered No. 5328847 No. Registered 6. Shareholder Information 6. Shareholder
Shareholder Information Rasmala plc Milton Gate 60 Chiswell Street London EC1Y 4SA United Kingdom T: +44 (0) 20 7847 9900 F: +44 (0) 20 7847 9901 E: [email protected] www.rasmala.com Regulated and Authorised by the FCA Registered No. 5328847