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 Overview Overview About our annual report Rasmala reported its now have a simpler story, third consecutive year of with one brand and one operating profit before tax vision across all our markets. in 2015, despite challenging All these achievements, market conditions. we believe, will pave the We saw another year of way for even greater strong performances from our success in the future. flagship funds, launched a new In this annual report we real estate division and made provide a full strategic report a number of key appointments. of our progress over the In addition, we made important past year. This report covers investments in technology to all our global operations, help improve client service providing stakeholders with and our achievements were relevant financial and recognised with a number non-financial information. of industry awards. It has been compiled We also unified our brand in accordance with the under the name Rasmala and Financial Reporting Council. 4 Rasmala plc Annual Report and Accounts 2015 Overview 1. About Us Overview 1.1 At A Glance hubs to offer clients a winning mix of global expertise and local market knowledge. AUMs by Who we are the most demanding global institutional investors. Our management team includes senior investment, asset class We are a London listed independent investment Investment Banking: We originate and structuring and placement professionals, all of management group serving Gulf and international execute asset-backed transactions and invest whom have extensive industry experience. Over investors. We manage approximately $1.1bn alongside our clients in the Gulf Cooperation two-thirds of our investment staff have 10 or more Alternatives Real estate (£0.72bn) in discretionary assets and invest in Council (GCC) countries. years’ experience, while some of our senior team 15% 5% the United Kingdom (UK), Middle East, Africa and The division’s main service offerings include: members have worked in the industry for more other global markets. We are one of the largest l Debt Capital Markets – Sukuk Origination, than three decades. We have a demonstrable independent investment managers operating in the Structuring and Placement track record in asset management, private equity, Middle East and North Africa (MENA) region. investment banking, strategic management and l Islamic Debt Financing and Deal Structuring mergers and acquisitions. What we do – Trade Finance/Murabaha At Rasmala, we encourage a culture of inclusivity, Our focus is on providing innovative asset l Real Estate Finance and Equipment Equity management and financing solutions to Leasing/Ijara respect and entrepreneurship among our people 51% institutional clients across four business lines: and take pride in strengthening their capabilities. l Real Estate Principal Investment Fixed equities, fixed income, alternatives and real estate. Income Our investment capabilities Our people 29% Asset Management: Our client base includes Rasmala is a people-led business. We’ve recruited pension funds, family groups, corporates, and retained a highly-proficient workforce from Rasmala is a ‘ government related entities and financial across the globe, bringing workers from almost institutions. We also manage assets for some of every continent together in our Dubai and London people-led business. AUM: We’ve recruited and Service offerings retained a Investment Banking Asset Management highly-proficient Capital Real Advisory Fund management Discretionary Markets Estate across a number portfolio workforce from M&A Advisory ‘ of key funds management Debt Capital Principal Buy-side across the globe Markets Transactions Rasmala Arabian MENA / GCC / Sell-side Markets Growth single country Sukuk REIT Equity Fund equity portfolio Origination, Shari’a investment strategy Structuring Advisory Advisory Rasmala GCC Fixed and Placement Income Fund Fixed income AUMs by Securitisation (through portfolios Years of industry experience Equity Cordoba Rasmala Palestine investment strategy 30+ years asset segment Capital) Equity Fund Capital Money market 11% Markets Rasmala Global portfolio strategy Discretionary IPOs and Sukuk Fund Alternative Mandate Rights Issues investment portfolio 59% Rasmala GCC 20-29 Private strategy years Placements Islamic Equity Income <10 years Fund Shari’a-compliant 30% portfolio investment 33% Rasmala Leasing strategy Fund 1 Balanced portfolio strategy Rasmala Leasing Fund 2 10-19 years Fund 26% 41% Rasmala Trade Finance Fund 6 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 7 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 International investment reach Overview We started out investing in the Gulf markets and Egypt but over time our investment reach has expanded to cover the US, UK, Turkey, Malaysia, South Africa and other emerging markets. 10 Rasmala plc Annual Report and Accounts 2015 Rasmala plc Annual Report and Accounts 2015 11 Overview Overview Overview Overview Overview Rasmala Breakfast Briefing Dubai: Global Hub for Islamic Finance Tuesday 13 October 2015 12 Rasmala plc Annual Report and Accounts 2015 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