Management and Administration 2. Chairman s Report 3. Investment Manager s Report 5. Portfolio Update 9. Breakdown of Assets Portfolio 10

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2 Contents Management and Administration 2 Chairman s Report 3 Investment Manager s Report 5 Portfolio Update 9 Breakdown of Assets Portfolio 10 Underlying Portfolio Companies 11 Directors Report 23 Independent Auditor s Report 26 Consolidated Statement of Assets and Liabilities 28 Consolidated Statement of Operations 29 Consolidated Statement of Changes in Net Assets 30 Consolidated Statement of Cash Flows 31 Consolidated Schedule of Investments 32 Notes to the Consolidated Financial Statements 37 Notice of Annual General Meeting 54 Annual Report and Audited Consolidated Financial Statements 1

3 Management and Administration Directors Hisham Al Otaibi (Chairman) Maha Al-Ghunaim Anne Ewing Kishore Dash (Resigned 3 May 2016) Samir Sayeed (appointed 1 April 2016) Registered Office Arnold House St. Julian s Avenue St. Peter Port Guernsey, GY1 3NF Channel Islands Investment Manager Global Capital Management Ltd. c/o Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman Cayman Islands Administrator and Secretary HSBC Securities Services (Guernsey) Limited P.O. Box 208 Arnold House St. Julian s Avenue St. Peter Port Guernsey GY1 3NF Channel Islands Registrar Capita Registrars (Guernsey) Limited Mont Crevelt House, Bulwer Avenue, St. Sampson Guernsey, GY2 4LH Channel Islands Custodian HSBC Custody Services (Guernsey) Limited P.O. Box 208 Arnold House St. Julian s Avenue St. Peter Port Guernsey GY1 3NF Channel Islands Legal advisers to the Company (as to English law) Allen & Overy LLP One Bishops Square London E1 6AD United Kingdom Legal advisers to the Company (as to Guernsey law) Ogier Ogier House St. Julian s Avenue St. Peter Port Guernsey GY1 1WA Channel Islands Matched Bargain Facility Provider Jarvis Investment Management Ltd. 78 Mount Ephraim Tunbridge Wells Kent TN4 8BS United Kingdom Independent Auditor KPMG Channel Islands Limited Glategny Court Glategny Esplanade St. Peter Port Guernsey GY1 1WR Channel Islands 2 Global MENA Financial Assets Ltd

4 Chairman s Report On behalf of the Board of Directors of Global Mena Financial Assets Limited ( GMFA or the Company ), I am pleased to present the eighth Annual Report of the Company together with the consolidated financial statements (the financial statements ) for the year ended 31 March Dear Shareholders, Economic growth remains below its potential as the legacy of the financial crisis and new emerging issues negatively impact the global growth momentum. The pickup in global activity is projected to be more gradual. The US economy growth momentum is now expected to hold steady with the US Dollar strengthening against the British Pound, especially in the aftermath of Brexit but weakening over the past year against the Euro and the Yen. In contrast the Chinese economy expanded by 6.9 percent, lower than 7.3 percent in 2014 and the weakest since Growth in China is expected to slow to 6.3 percent in 2016 and 6.0 percent in 2017, reflecting weaker investment growth as the economy continues to rebalance. Oil prices saw the West Texas Intermediate ( WTI ) touch a low of 26.21/barrel in February Growth in the Gulf Cooperation Council ( GCC ) region is slowing as countries initiate fiscal consolidation, while geo-political tensions weigh on the prospects of other MENA oil exporters. Economic activity in the GCC is projected to hover around 4 percent in Improving economic prospects for the long term will require widespread structural reforms. Recovery in the MENA oil-importing countries is gaining momentum. Global growth is projected at 3.4 percent in 2016 and 3.6 percent in In anticipation of significant and persistent drop in oil prices, oil-exporting countries in MENA have introduced fiscal reforms. Even though many of the MENA oil-exporting countries have accumulated sizable buffers over the years through reserves and budget surpluses, fiscal reforms are needed for the future. Some of the reforms to be introduced include streamlining expenditures, increasing nonoil taxation, and gradually rebuilding buffers in the context of comprehensive tax, energy pricing, and public investment management reforms. Such reforms will need to be supported by binding mediumterm fiscal frameworks and a strong communication strategy. Despite the setbacks, the general outlook for the MENA region is of continued recovery. Equity markets in the MENA region witnessed an overall decline during the year. The Dow Jones MENA Index fell by 20 percent, along with the MSCI World Index which showed a slide of 6 percent during the past year. The Brexit is expected to impact the financial markets and currencies in the GCC in the short term, therefore GCC equities may continue to fall in line with global trends. However, we feel the direct impact of Brexit is minimal on the GCC equities as their earnings prospects are little affected by the event. In the wake of the fall in overall equity markets, the GMFA Portfolio companies witnessed a mixed trend. This is highlighted in the following section and discussed in details in the Portfolio section of this Annual Report. We remain positive about growth prospects of the GMFA portfolio companies and the performance to eventually manifest into profitable exits. Developments with GMFA For the outgoing year, with the exception of Emirates Re and Gulf Takaful, the entire investment portfolio recorded bottom line profits. The consumer finance portfolio, especially Bindar Trading and Investment Company ( Bindar ) and Jordan Trade Facilities Company ( JOTF ) recorded substantial improvement in profits, while Al Manar Financing and Leasing Company ( Al Manar ) and Al Soor Financing and Leasing Company ( Al Soor ) registered a decline in net profits. The decline in Al Manar s profit was attributable to an overall shrinkage of the financing portfolio, whereas Al Soor s was primarily affected by a onetime impairment on two non-performing accounts. The banking portfolio comprising of Asian Finance Bank Berhad ( AFB ) and Industrial Bank of Kuwait ( IBK ) recorded a decline in the profitability, owing to decreases in both the top-line and bottom line, Emirates Retakaful Limited ( Emirates Re ) and Gulf Takaful Insurance Company ( GTIC ) reported net losses due to challenges faced by the Re-insurance Source: IMF, Bloomberg, MSCI, Trading Economics, Global Investment House Annual Report and Audited Consolidated Financial Statements 3

5 Chairman s Report sector in the GCC. First Qatar Real Estate Development Co. ( First Qatar ), wherein GMFA acquired a minority stake of 2.16%, in lieu of settlement of Iskan Murabaha, also recorded a decline in net profit vis-à-vis the net profit of 2014; which was impacted by one-time settlement of disputed receivables in During the year, GMFA completed its acquisition of a 70% stake in Olgarlar Spor Malzemeleri ( Olgarlar ), a sports, outdoor and lifestyle goods retailing and distribution company based in Turkey, representing 30 international brands in Turkey on an exclusive basis. The profitability of Olgarlar in 2015 grew significantly over the previous year. Another substantial milestone achieved during the year was the successful sign off for the acquisition of a food and beverages business in the GCC operating circa 170 quick services retail restaurants across Bahrain, UAE, Qatar and Saudi Arabia The business operates Subway and Menchies frozen Yoghurt franchises in Bahrain and MTY Canada brands on an exclusive basis across the GCC. The business is zero debt, has excellent profitability and growth potential. The title transfer is expected after fulfilling of conditions precedents close to the circulation of the annual report. During the year, the Investment Manager initiated exits of two portfolio companies namely JOTF and AFB. The due diligences on the two companies are substantially complete and the binding offers are awaited, as of the date of writing of this report. While looking forward to exits and distributions therefrom, the Board has approved the payment of a distribution of up to 20mn. The amount of the distribution which will be paid on or around 31 July 2016 has taken into account the current cash position of the Company and expected future cash flows. Corporate Governance During the year, the Independent Committee ( IC ) of the Board reviewed the recovery efforts for Abyaar Wakala. The committee continued to work with the Investment Manager and the appointed legal counsel on the recovery and settlement of the outstanding Islamic money market instrument. On the whole the settlement agreement is in the right implementation process. As of 31 st March 2016 real estate assets worth 9.3mn (based on settlement cost), private equity worth 6.83mn and cash amounting to 3mn have been transferred to GMFA. An additional 1 unit of the real estate, valued at 1.75mn (based on settlement) cost was transferred to Global Investment House on 19 July 2016 and will be registered with the Company shortly. On 18 July a payment of KWD 50,000 was received from Abyaar. The Investment Manager continues to monitor the timeliness of receipt of settlement proceeds and escalates as appropriate any delays in receipt. The directors have ensured adherence to high standards of corporate governance during the year and believe that appropriate internal controls and systems are in place. During the year the Board bade adieu to Mr. Kishore Dash as the Director of GMFA and welcomed Mr. Samir Sayeed as the new director. We thank Mr. Kishore Dash for his support and advice over the years. I would like to take this opportunity to reaffirm our commitment to shareholders and to present my gratitude to the Board of Directors for their continued support. I would also like to extend my appreciation to the investment management team for their efforts in managing GMFA in shareholder s best interest by driving value to the portfolio companies, deploying GMFA cash in lucrative investment opportunities and initiating exit processes. Hisham Al Otaibi Chairman July 2016 Source: IMF, Bloomberg, MSCI, Trading Economics, Global Investment House 4 Global MENA Financial Assets Ltd

6 Investment Manager s Report Dear Investors, The near-term outlook for the MENA region is dominated by geopolitical and oil price developments. In the broad outlook, MENA growth this year is expected to continue modestly. Most of the regions oil-exporting countries grew, with the exception of Libya and Yemen. The real GDP of MENA oil-exporting countries expanded by a conservative 1.8%. This was primarily due to decreased oil production in some oil exporting countries compared to The GDP of MENA s oil-importing countries expanded by 3.9% in 2015 compared to a 2.9% in the previous year. The growth trend in the MENA GDP compared to other regions of the world is highlighted in the following chart. 8% GDP Growth Trend 7% 6% 5% 4% 3% 2% 1% 0% -1% e 2017e 2018e 2019e 2020e World Advanced Economies European Union Emerging & Developing MENA Sub-Saharan Africa From April 2015 to March 2016, crude oil price (West Texas Intermediate) averaged 45.03/barrel. Between July 2014 and January 2015, oil prices dropped from about $110/barrel to less than $50/barrel. They have remained unstable since then, initially recovering to about $65/barrel in the subsequent quarters, but then falling back below $50/barrel amid resilient supply and still weak demand. Persistently weak global growth has also contributed to lower oil prices from the demand side, most recently amid concerns over slowing growth in China and emerging market weaknesses more generally. Furthermore, the focus and shift to mitigate the risks of climate change, as well as increasing support of renewable energy, the removal of subsidies, new upstream fiscal regimes and further energy efficiency targets have emerged as important factors. All in all, 2015 has been a challenging year for the industry. Oil Prices Trend (/barrel) Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 WTI OPEC Basket Sources: IMF, Bloomberg, MSCI, Trading Economics, Global Investment House Research Annual Report and Audited Consolidated Financial Statements 5

7 Investment Manager s Report Oil demand is estimated to increase by 1.3mn barrels a day in The volatile movement of oil prices has had an impact on both demand and supply prospects in the short and medium-term, and some long-term effects can be expected to continue into the future. Furthermore, huge reductions in exploration and production capital expenditures and job lay-offs have been reported in the industry. The oil exporting countries have begun to feel the crunch of the falling oil prices. Capital Markets Performance For the period, April 2015 to March 2016, the GCC equity markets declined, on account of geo-political instability in various countries across the region and due to a decline in oil prices. The Dow Jones MENA Index declined by 20%, while the MSCI World Index fell by 5.5% at the same time. (points) MENA Markets vs World Markets Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Dow Jones MENA Index MSCI World Index Amongst the regional indices, the biggest losses in the index were seen in Saudi Arabia and Bahrain, which fell by 29% and 22% respectively. Kuwait fell by 17%, followed by Oman by 12% and Qatar by 11%. Abu Dhabi was the most resilient in the region and remained relatively stable during 2015, falling slightly in January 2016, with an overall decline of less than 2% over the period. Despite the losses in the indices across the GCC equity markets, this was not reflective of the true performance of the GCC corporate earnings. On the positive side, in terms of corporate performance, profitability remained stable as profits for a majority of the sectors saw positive growth with the only exception, as expected, being companies in and related to the oil and gas business GCC Market Performance (points) Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Kuwait Saudi Arabia Dubai Abu Dhabi Bahrain Qatar Oman Sources: IMF, Bloomberg, OPEC Monthly Report, Global Research 6 Global MENA Financial Assets Ltd

8 Investment Manager s Report Development with the Investments of GMFA FY 2015 had been eventful for GMFA. The majority of portfolio companies recorded tangible bottom line profits and GMFA received dividends amounting 5.86 mn. Profits of Bindar, JOTF and Olgarlar (where the Company s transaction completed in the year) improved significantly. A lucrative Food and Beverages deal was also signed during the year. For Bindar and JOTF, the overall profitability improved to 1.2mn and 3.2mn from 0.5mn and 2.2mn, respectively, for the last year. Al Manar and Al Soor recorded a decline in profitability touching 5.2mn and 16mn, compared to 7.5mn and 28mn, respectively. The decline in profitability of Al Manar was primarily attributable to an overall reduction of its average financing portfolio, whereas Al Soor s profitability was primarily affected by a one-time impairment on two of its non-performing accounts during the year. Both can be attributed to lower consumer confidence in the wake of declining oil prices. Al Soor paid a 6% dividend, while Al Manar paid a 5% dividend, generating 1.2mn and 0.7mn respectively in dividend income for GMFA. Emirates Re and GTIC reported surplus in insurance operations while reporting losses in the overall profitability attributed to shareholders. The banking companies in the portfolio, recorded sizeable decreases in bottom line profits. The net profit for IBK and AFB declined to 30.5mn and 0.1mn, compared to 35.6 mn and 4.3mn, for the last year, respectively. During the year, the profitability of AFB in particular declined due to the shrinkage in interest margin and provisions relating to a major loan to an industrial group. IBK witnessed declines in both net interest income and non-interest income in the wake of sluggish industrial sector growth in Kuwait. IBK paid a 30% (of share capital) dividend for the year. The Turkish Sports retailer, Olgarlar, whose acquisition was completed during the year, recorded sales of 29mn in 2015 compared to sales of 22.6mn for The increase was mainly driven by operational reforms undertaken by GCM and the management team. Net income for Olgarlar increased by 21.5% to stand at 4mn. Under the guidance of the Independent Committee ( IC ) of the Board the recovery from Abyaar continues. The agreement envisaged settlement through cash (KWD 3.2 mn to be paid in instalments) and asset transfer (KWD 6.51 mn). GMFA has, to the 31st March 2016, received KWD 900k in cash and KWD 4.8 mn worth of assets (based on settlement cost) namely Durrat Al Sufouh and Olgana Residential Towers Units. An additional 1 unit of Olgana Residential Tower was received on 19 July 2016; this is currently in the process of being registered in the name of the Company. Cash of KWD 50,000 was received on 18 July The Investment Manager continues to monitor the receipt of the settlement proceeds and escalates as appropriate any delays in receipt. During the year the Investment Manager successfully managed to secure a landmark competitive transaction in the Food and Beverages Quick Service Retail sector in the GCC. The purchase consideration has been escrowed and the title transfer is expected to be completed by the date of publishing of this report. The transaction involves 100 percent buyout of a consolidated food and beverages business with circa ( c ) 170 retail restaurants across Bahrain, UAE, Qatar and Saudi Arabia operating leading international food franchises with exclusivity for the entire GCC for a major quick service food brand in the portfolio. The business is debt free, has excellent cash flow generation, c 7 mn in EBITDA, c 9mn in Free Cash Flow, wealth of mall operators relationships, on ground infrastructure in terms of warehouses, central kitchen, and distribution fleet and around 900 employees. Despite it being a closely contested deal in a much sought after defensive sector- mid market F&B with average meal ticket in the range of 10-12, the Investment Manger managed to secure the deal for a single digit trailing EV/EBITDA multiple offer price. Annual Report and Audited Consolidated Financial Statements 7

9 Investment Manager s Report On the exits front, the Investment Manager initiated the exit processes for JOTF and AFB. The due diligence by the potential acquirers is substantially complete and binding offers are awaited after some procedural and regulatory approvals. We stand committed to the mandate given to us by the shareholders and are confident of delivering profitable exits in the exit period, commencing from April 2016 onwards. I would like to take this opportunity to thank the Board of GMFA and the shareholders, for their continued support and trust in us. Sincerely, Sulaiman Al-Rubaie Managing Partner Global Capital Management Ltd. July Global MENA Financial Assets Ltd

10 Portfolio Update BREAKDOWN OF ASSETS PORTFOLIO (as at 31 MARCH 2016) Company Country GMFA s % Stake Fair Value () % of Fair Value Bindar Trading & Investment Company Jordan 71.00% 14,406, % Jordan Trade Facilities Company Jordan 87.27% 25,970, % Al Manar Financing & Leasing Company K.S.C. Kuwait 13.74% 10,779, % Al Soor Financing & Leasing Company K.S.C. Kuwait 12.39% 21,411, % Total Consumer Finance 72,567, % Industrial Bank of Kuwait K.S.C. Kuwait 2.47% 14,351, % Total Development Finance 14,351, % Asian Finance Bank Berhad Malaysia 6.67% 7,116, % Total Banking 7,116, % Durrat Al Sofouh for General Trading Company W.L.L. United Arab Emirates 42.00% 7,432, % First Qatar Real Estate Development Company Kuwait 2.16% 3,030, % Olgana Residential Tower United Arab Emirates 8,898, % Total Real Estate 19,362, % Gulf Takaful Insurance Company K.S.C. Kuwait 18.23% 2,694, % Emirates Retakaful Limited United Arab Emirates 20.01% 15,461, % Total Insurance 18,156, % Olgarlar Spor Malzemeleri Turkey 70.00% 33,629, % Total Others 33,629, % Total Overall 165,182, % Annual Report and Audited Consolidated Financial Statements 9

11 Breakdown of Assets Portfolio Breakdown of Total Assets (as at 31 March 2016) Unlisted Equity, 40.3% Cash & Deposits, 40.1% Real Estate, 3.1% Listed Equity, 14.0% Portfolio Breakdown (as at 31 March 2016) Others, 20.4% Consumer Finance, 43.9% Insurance, 11.0% Real Estate, 11.7% Banking, 4.3% Development Finance, 8.7% Minority 10%-50%, 40.4% Controlling > 50%, 44.8% Malaysia, 4.3% Turkey, 20.4% Kuwait, 41.0% UAE, 9.9% Minority < 10%, 14.8% Jordan, 24.4% 10 Global MENA Financial Assets Ltd

12 Underlying Portfolio Companies Bindar Trading and Investment Company Country Jordan Industry Credit and Finance Fair Value 14,406,225 Valuation Basis Quoted % Ownership 71% Bindar Trading and Investment Company ( Bindar ) is one of the largest consumer finance companies in Jordan. Bindar finances vehicles for personal and commercial use, durable assets and real estate properties. Bindar is primarily engaged in collateralized lending, operating from 4 branches across the capital Amman and the province of Irbid. It is listed on the Amman Stock Exchange and accounts for roughly 10% of the market share in non-banking consumer finance segment, in Jordan. Jordan offers ample growth opportunities for consumer finance, since it s relatively middle- to low income country with a large un-bankable population, compared to rich Arab neighbours. Bindar was historically set up as an auto finance company; it later diversified into real estate and SME financing. However, it still continues to be one of the largest financiers of private (used) cars in the non-banking finance sector, in Jordan. As a general policy, Bindar focuses on small tickets ( 120k-140 k), collateralized lending, majorly in retail segment, which is considered to be less risky than corporate sector. Since consumer finance companies in Jordan cannot accept deposits, therefore the biggest source of financing for them are banks, followed by funding from debt capital markets. For FY 2015, total income remained stable at 5.72mn. There has been an improvement in collections of overdue accounts, reducing the provision for bad debt from 924k to almost 103k. Impairment from investment properties and AFS investments also increased from 259k to 940k. Consequently, earnings before tax slightly increased from 2.37mn to 2.41mn. The company recorded net profit of 1.16mn compared to net profit of 0.48mn for the same period last year due to payment of a non-recurring cumulative income tax payment of c 1.3mn in FY The Annual General Assembly has recently approved the cash dividends distribution of 1.1mn representing 4% of the capital. New financing for FY 2015 amounted to 20.7mn recording an increase of 17.6% over FY14. The Bond amounting to 7mn, raised in March 2015 helped improve the liquidity position. The Company has secured further facilities from two local banks for 4mn during the last quarter of FY 2015 which is expected to feed liquidity needs in FY The Board of Directors of Bindar has appointed an in house internal auditor which will take over the function of the internal audit outsourced to PwC, and will report directly to the Audit Committee. Key Financials 000 FY 2013 FY 2014 FY 2015 Net Interest Income 4,099 3,747 3,801 Non-interest Income 1,481 2,074 1,928 Net Profit 1, ,165 Book Value 31,587 31,107 32,243 Total Assets 51,874 52,042 56,216 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Note: December year end Exchange rate as of respective year end Annual Report and Audited Consolidated Financial Statements 11

13 Underlying Portfolio Companies Jordan Trade Facilities Company Country Jordan Industry Credit and Finance Market Value 25,970,431 Valuation Basis Quoted % Ownership 87.27% Jordan Trade Facilities Company ( JOTF ) provides financing for vehicles and durable assets and is one of the first companies to enter the consumer finance business in Jordan. JOTF was listed on the Amman Stock Exchange in JOTF accounts for c 13% of the market share in non-banking consumer finance segment. Operating from 6 branches across all major governorates in Jordan, the company enjoys excellent brand equity, driven by strong customer relationships. The customer base largely includes individuals, family offices, small and medium corporates. JOTF provides a variety of financing solutions including: private and public vehicle financing; real estate financing; tools and equipment financing; personal loans; small business financing; finance leasing (through leasing subsidiary); credit cards (co-branding). With 99% of collateralized lending, JOTF has an excellent track record in recovery and maintaining a healthy NPL ratio. Write offs since inception account for less than 1% of the total lending. For FY 2015, the sales reached 22.9mn, recording an increase of 26% over last year. However, net profit improved by 48.19%, over last year, mainly due to extraordinary tax provisions, which impacted 2014 performance. Furthermore, provisions for bad debt increased to account for 61% of non-performing loans, while G&A and personnel expenses were conservatively controlled. On the whole, net profit increased from 2.2mn for FY 2014 to 3.2mn for FY During the year, the NPL ratio improved to reach 14.1% from 16.5% recorded in December Fast tracked bad debt recovery efforts and the conservative lending policies contributed to the improvement. The Annual General Assembly recently approved the cash dividends distribution of 2.3mn representing 10% of the paid up capital. Key Financials 000 FY 2013 FY 2014 FY 2015 Net Interest Income 6,127 6,928 6,858 Non-interest Income 1,291 1,134 1,421 Net Profit 2,436 2,160 3,201 Book Value 28,237 28,786 30,060 Total Assets 47,397 47,729 55,242 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Note: December year end Exchange rate as of respective year end 12 Global MENA Financial Assets Ltd

14 Underlying Portfolio Companies Al Manar Financing & Leasing Company Country Kuwait Industry Credit and Finance Fair Value 10,779,477 Valuation Basis Price to Book Value % Ownership 13.74% Al Manar Financing and Leasing Company ( Al Manar ) is an Islamic financial institution providing Islamic Shari ah compliant financial products and services across a variety of sectors, including consumer, real estate and fleet financing. Al Manar is regulated by the Central Bank of Kuwait and is rated by Capital Intelligence ( CI ), which gave it a corporate rating of BB- long term and a short term rating of BB with a stable outlook, as of Dec Al Manar s share of financing stood at approximately 5.6% of the overall non-banking consumer finance market and at around 0.1% of the overall finance market including banks (in 2014). Al Manar differentiates itself by offering better customer service and faster processing compared to Banks. Al Manar has been gradually enhancing its exposure to corporate clients since most retail clients prefer dealing with Banks, offering competitive rates for auto and real estate loans. For FY 2015, net interest income decreased by 13.9% from 12.2mn to 10.5mn due to the shrinkage of the average financing portfolio throughout the year due to drop in new financing during 2014 and early Provision for bad debt reduced to 412k and net profit declined by 31% from 7.5mn to 5.2mn. The Company secured a 52mn facility from a local bank in Q which is expected to boost the financing portfolio growth in For the year 2015, Al Manar financed 101.2mn which is double the financing made last year. The Board of Directors has suggested to the General Assembly distributing cash dividends of approximately 5mn, representing 5% of the Company s capital. Considering the challenges in retail and corporate segments, Al Manar management is planning to grow its market share in the SME segment by targeting the car dealers, rent a car and taxi offices. Al Manar is further aiming monetizing the non-core investments in order to reduce the cost of funding. Key Financials 000 FY 2013 FY 2014 FY 2015 Net Interest Income 14,411 12,218 10,522 Non-interest Income 2,787 1,461 2,390 Net Profit 6,518 7,519 5,169 Book Value 118, , ,279 Total Assets 184, , ,940 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Note: December year end Exchange rate as of respective year end Annual Report and Audited Consolidated Financial Statements 13

15 Underlying Portfolio Companies Al Soor Financing & Leasing Company Country Kuwait Industry Credit and Finance Fair Value 21,411,237 Valuation Basis Price to Book Value % Ownership 12.39% Al Soor Financing and Leasing Co. KSCC ( Al Soor ) was established in 2005 with a paid-up capital of 165 million. Al Soor is one of the most pre-eminent consumer finance companies in Kuwait, offering financing for the purchase of new and used cars, fleet financing, SME, corporate finance and turnkey financing for Government projects. Al Soor is amongst a few finance companies in the GCC, which stayed profitable at the peak of the global economic crisis of 2008, primarily due to its conservative financing norms, and firm recovery policy. Al Soor is classified as a financing company with no investment activities. As of Dec 2014, Al Soor s market share was approximately 24.7% of the non-banking consumer finance market, which makes it a lead player in the segment. In order to tap in to the growing Islamic finance market, Al Soor converted its subsidiary Al-Mulla International Finance Co. into a Sharia-compliant financing company in early For the year ended 31 March 2016, Al Soor recorded net interest income of 38.6mn compared to 37.7mn, last year. Total income from operations decreased from 47.9mn to 45.4mn, while net profit decreased to 16mn from 28mn mainly due to one-time impairment on two non performing accounts for 5.6mn. Al Soor s portfolio under management which represents receivables sold to the banks, has increased to 159.3mn by the end of March 2016, compared to 153mn for the previous year. The Board of Directors of Al Soor has recommended distribution of 6% dividend for the financial year ended 31 March The Central Bank of Kuwait has advised Al Soor to return certain commission fees amounting to 5.7mn, earned from customers, of which 0.7mn was refunded by the end of 31 March Al Soor is contesting the balance claim but it is expected that eventually Al Soor may have to refund the amount. Al Soor is actively seeking to reduce its cost of financing, by establishing strategic partnerships with local banks and selling its receivables portfolio and shifting its focus from big ticket corporate loans to small ticket retail loans. Al Soor has ceased conventional lending, since it now offers only Islamic Finance through its subsidiary Al Mulla International Finance Company. Key Financials 000 FY 2014 FY 2015 FY 2016* Net Interest Income 28,865 37,740 38,603 Non-interest Income 3,939 10,237 6,819 Net Profit 15,314 27,978 15,958 Book Value 270, , ,050 Total Assets 503, , ,839 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements *Source: Company s draft Financial Statements Note: March year end Exchange rate as of respective year/period end 14 Global MENA Financial Assets Ltd

16 Underlying Portfolio Companies Industrial Bank of Kuwait Country Kuwait Industry Corporate Banking Fair Value 14,351,245 Valuation Basis Price to Book Value % Ownership 2.47% The Industrial Bank of Kuwait ( IBK ; the Bank ) was established with the initiative of the Government of Kuwait for the purpose of supporting industrial sector growth in Kuwait. IBK provides medium and long-term financing for the establishment, expansion, and modernization of the industrial sector. IBK also offers a full range of commercial banking facilities to meet the working capital needs of industrial customers. Compared to commercial banks, IBK has an edge in Net Interest Margin (NIM) due to the low cost of funding through a long term revolving facility of ~ 1.0 billion granted by the Government of Kuwait. The revolving facility is valid for a period of 20 years (September 2027) and is provided at a fixed interest rate of 3.5% per annum. For FY2015, net interest income stood at 44.3mn, recording a decline of 4.1% over FY Even though the economy witnessed financial instability, the bank managed to gain a net profit of 30.5mn recording a decrease of around 14.1% from FY2014 net profit, due to a decrease in provisions for bad debts of around 4mn and a slight decrease in interest income, due to decrease in the amount of financing available. During the year, the industrial loans increased by 16% due to an increase in the demand for loans in the wake of a slow but positive growth in the Kuwaiti industrial sector. During the year, IBK approved the financing for 26 projects in sectors such as oil and gas extraction, food and beverage, paper manufacturing, printing and publishing, with total commitments amounting to 190mn, as compared to 167mn for FY14. The NPL to gross loan ratio decreased from 1.2% for FY 13 to 1.09% to FY15. GMFA holds an insignificant minority stake of 2.5%, which limits any meaningful engagement with management of the Company. For FY 2015, IBK s Board recommended the distribution of 30% of the share capital as a dividend. GMFA received 500K as its share of dividends. Key Financials 000 FY 2013 FY 2014 FY 2015 Net Interest Income 49,975 46,216 44,316 Non-interest Income 43,305 54,428 44,027 Net Profit 32,170 35,560 30,541 Book Value 789, , ,859 Total Assets 2,319,271 2,277,075 2,052,590 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Note: December year end Exchange rate as of respective year end Annual Report and Audited Consolidated Financial Statements 15

17 Underlying Portfolio Companies Asian Finance Bank Berhad Country Malaysia Industry Commercial Banking Fair Value 7,116,805 Valuation Basis Price to Book Value % Ownership 6.67% Asian Finance Bank Berhad ( AFB ) commenced operations in 2007 in Kuala Lumpur, Malaysia. AFB is one of the three foreign Islamic banks that were granted license by the Central Bank of Malaysia to undertake Islamic banking business. AFB offers full range Shari ah compliant banking products covering consumer, commercial (including SME and trade finance), corporate, treasury, and some investment banking services. For FY 2015, net finance income reached 1.5mn, compared to 7.9mn achieved in The drop in net finance income is mainly due to shrinkage in net interest margins. Non-interest income, comprising of investment income, trade finance and fee, remained stable at 10.6mn. Total income from operations decreased from 15.2mn to 12.1mn. Bad debt provisioning for the year increased from 2.4mn to 3.9mn. On the whole, the bank posted a net profit of 0.12mn for the year ended 31 December 2015 against a net profit of 4.3mn for FY 2014, registering a decrease of 97%. This was mainly due to decline in interest margin and provisioning on a major loan to an industrial group. Total assets of AFB declined by 226 million in The decline of around 28% in 2015 over the previous year is attributable to a 12% decline in assets (in local currency); primarily driven by reduction in investment assets and financing and advances; and, depreciation of local currency, by 19% p.a. The capital adequacy as at December 2015 stood at 25.4%, compared to regulatory requirement of 8%. Both GMFA and Qatar Islamic bank received an offer from a public sector development finance institution to buy their respective stakes. With the due diligence completed the discussions ensued with the potential buyer on the impairment or otherwise of a sizeable loan of RM 70mn. It was agreed to wait for the finalization of the audited accounts before discussing the offer. Upon conclusion of the due diligence both QIB and FAB are awaiting the final offer from the potential acquirer. The original offer of 1.2 P/BV x is expected to be revised through further adjustment in book value for a loan to an industrial group for which a provision has already been taken, while the acquirer believes that the provision is not adequate being a lender to the same group as well. Key Financials 000 FY 2013 FY 2014 FY 2015 Net Interest Income 7,782 7,859 1,543 Non-interest Income 7,836 7,294 10,576 Net (Loss)/Profit 2,301 4, Book Value 144, , ,465 Total Assets 882, , ,033 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Exchange rate as of respective year end 16 Global MENA Financial Assets Ltd

18 Underlying Portfolio Companies First Qatar Real Estate Development Company Country Kuwait Industry Home Financing Fair Value 3,030,548 Valuation Basis Price to Book Value % Ownership 2.16% First Qatar Real Estate Development Company ( First Qatar ) was established in 2004 to invest and develop real estate projects, especially in Qatar. Qatar has been experiencing strong economic growth within the GCC and performed reasonably well in the wake of the real estate crisis in the aftermath of the 2008 financial crisis. The real estate market in Qatar has been positive over the past years and shows continuing improvement. The news of Qatar hosting 2022 world cup has buoyed the overall investment sentiment in Qatar. First Qatar is one of the leading developers in the prestigious Pearl Qatar ( project and has commenced construction on January 14 th, 2014, on the Panorama Hilton Residence, as part of Phase 3 of the Qatar Pearl master-development project. It is expected that the Panorama Hilton Residence will be completed within 3 years. First Qatar has sold two parcels in the Viva Bahriya section, and developed and sold the La Riviera building in the Porto Arabia section of Pearl Qatar. The Company commenced construction on January 14 th, 2014, on the Panorama Hilton Residence, as part of Phase 3 of the Qatar Pearl master-development project. It is expected that the Panorama Hilton Residence will be completed within 3 years. First Qatar recorded a net profit of 4.3mn for FY 2015 vs 13.7mn for FY The drop in net profit is mainly due to a one time recovery during 2014 of a disputed amount through an out of court settlement for 11.7mn. Also, during 2015, there was a one-time refund from a contractor for 4mn which helped improve net profit. Rental income has dropped to a minimal amount as the Company has sold most of its yielding real estate assets. Key Financials 000 FY 2013 FY 2014 FY 2015 Net Rental Income Net (Loss)/Profit ,714 4,338 Book Value 173, , ,989 Total Assets 203, , ,233 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Note: December year end Exchange rate as of respective year end Annual Report and Audited Consolidated Financial Statements 17

19 Underlying Portfolio Companies Olgarlar Spor Malzemeleri Country Industry Turkey Sports Retailer Fair Value 33,629,174 Valuation Basis Market Comparables and DCF % Ownership 70% In March 2015, GMFA acquired 70% stake in Olgarlar Spor Malzemeleri ( Olgarlar ), a stellar sports, outdoor and lifestyle goods retailing and distribution company in Turkey. Representing 30 international brands on an exclusive basis, Olgarlar purchases goods from domestic and international suppliers and sells those products through its own store network, online store, franchise stores and to third party stores. Olgarlar distribution channel consists of around 400 accounts, including department stores, sporting goods retail chains, independent sports shops and online retailers. Currently, it operates 23 SPX stores (22 own and 1 franchisee stores). SPX stores have a specialized product range compared to traditional sporting goods retailers, including snowboarding and skiing, street lifestyle, city outdoor, racket sports, water sports and swimming accessories and equipment. In addition to SPX stores, the company has 6 Vault stores (2 own and 4 franchisee stores), engaged in multi-brand shoe-retailing. Olgarlar represents global brands such as Rossignol and Burton at winter sports, Dunlop and Babolat in racket sports, Merrell and Salomon in outdoor category, Billabong in watersports/lifestyle, etc. Furthermore, Olgarlar owns two lifestyle brands, namely Routefield and Antidote. In FY 2015, vis-à-vis FY 2014, sales grew by 29% in terms mainly driven by the surge in winter product sales, predominantly as a result of heavy snow and the addition of Quiksilver to the brand portfolio. The company recorded sales of 29mn in FY 2015 over sales of 22.5mn for FY 2014; EBITDA of 6.5mn compared to EBITDA of 4.6mn- an increment of 41% above Net income increased by 21.5% to stand at 4mn. As part of its business strategy, Olgarlar management plans to expand into new cities as well as to increase its presence in existing cities by opening SPX stores to benefit from the high market growth in outdoor and life style categories. Further it envisages a substantial growth potential in Vault stores (predominantly via own stores), multi-brand shoe retailing concept, to become a leader in this segment and plans to open Routefield (Olgarlar s own brand) stores, which focuses on casual wear for young consumers (Routefield products are currently sold in SPX stores). Key Financials 000 FY 2013 FY 2014 FY 2015 Revenue 23,819 22,585 29,092 Net Profit 4,136 3,285 3,991 Book Value 9,999 12,300 13,475 Total Assets 17,508 18,016 21,709 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Note: December year end Exchange rate as of respective year end 18 Global MENA Financial Assets Ltd

20 Underlying Portfolio Companies Gulf Takaful Insurance Company Country Kuwait Industry Insurance Islamic Fair Value 2,694,196 Valuation Basis Price to Book Value % Ownership 18.23% Gulf Takaful Insurance Company ( GTIC ) was established in 2004 by a group of prominent business institutions to provide Sharia a compliant Takaful insurance to corporate institutions and individuals. GTIC operates in 4 business segments Marine and Aviation, General Accidents, Vehicles, and Health Insurance (referred to as Takaful Insurance) and has an impressive market share of around 9% in Kuwait Takaful market. This makes it amongst the top six of the fifteen Takaful Insurance companies in Kuwait. Gulf Takaful has good distribution mix and product diversification. It is one of the few companies in its segment that reports surplus from insurance operations and holds Baa1 rating from Moody s with stable outlook. Gulf Takaful has the largest medical provider s network in Kuwait, which includes over 74 hospitals, clinics, pharmacies and labs. In contrast to the more developed Islamic banking sector, the Takaful landscape remains relatively under developed, with a smaller asset base. For FY 2015, gross written premium stood at 14.1mn compared to 14.7mn for FY The insurance operations recorded a surplus of 165k compared to surplus of 155k for the same period last year. The Company recorded investment losses of 805k, compared to income of 2.2mn for the same period last year. The decrease in investment returns was on account of the drop in the equity capital markets in the GCC and loss from a heritage fund (Real Estate Asia Fund amounting to 725k losses). On the whole, GTIC recorded net loss of 1.3mn compared to profit of 1.8mn for the same period last year. GMFA continues to emphasize on the management to enhance the quality of the insurance portfolio, in addition to improving top line by introducing new products, increasing client base, achieving cost reduction and improving portfolio quality. Key Financials 000 FY 2013 FY 2014 FY 2015 Gross Premiums 18,027 14,752 14,083 Net (Deficit)/Surplus from Takaful operations (94) Net (Loss)/Income Attributable to Shareholders 121 1,862 (1,306) Shareholders Equity 44,192 44,203 40,261 Total Assets 46,108 46,111 42,280 Return on Assets (%) Return on Equity (%) Source: Company s Audited Financial Statements Note: December year end Exchange rate as of respective year end Annual Report and Audited Consolidated Financial Statements 19

21 Underlying Portfolio Companies Emirate Re Country Kuwait Industry Reinsurance Islamic Fair Value 15,461,902 Valuation Basis Price to Book Value % Ownership 20.01% Al Fajer was the first re-takaful company in Kuwait, established in 2007 with a paid up capital of KWD 50mn ( 175mn). The company had a license to operate reinsurance business for all kinds of takaful insurance. Al Fajer faced numerous growth challenges, especially in the aftermath of the 2008 global financial services crisis, which affected the GCC also. The Board of Directors of Al Fajer, supported by the major shareholders, undertook significant restructuring efforts. Therefore, in the beginning of 2014, Al Fajer operations were moved to Dubai (DIFC) under the name of Emirates Re, with a paid up capital of 120mn. The shareholders of Al Fajer were issued direct shareholding in Emirates Re. Al Fajer is under liquidation and during the last quarter GMFA received 600K in liquidation proceeds. The Combined ratio (highlighting insurance expenses/losses as a % of earned premium) for the FY 2015 stood at 99.97%. Participants Fund remained profitable but Shareholders Fund was adversely affected by reduction in value of equities due to a bear run in the GCC capital markets. The company recorded gross premium of 62.6mn for FY 2015 compared to 82mn for FY Insurance operations reported nominal surplus of 142K while shareholder s fund declined by 3.7mn. Operating expenses remained in line with the budget. Investment income was diversified though returns were affected by a drop in market value of equities. On the liquidity side, Participants cash and investment balances stood at 44mn. During May 2015, AMBEST revised the outlook for the Company to Positive from Stable and affirmed the financial strength rating of B++ (Good) and the issuer credit rating of bbb+. The revised outlook reflects improvement in technical earnings during a challenging market environment, when rates have been softening. Key Financials 000 FY 2013 FY 2014 FY 2015 Gross Contributions 67,054 81,989 62,682 Net Profit/(Loss) Attributable to Shareholders (37,294) 1,160 (3,658) Shareholders Equity 129, , ,502 Surplus from Retakaful Operations 1,593 1, Total Assets 143, , ,319 Return on Assets (%) (26.02) Return on Equity (%) (28.70) Source: Company s Audited Financial Statements Note: March year end Exchange rate at the year end FY 2013 FY 2014 and FY 2015 results are for Emirate Re 20 Global MENA Financial Assets Ltd

22 Underlying Portfolio Companies Durrat Al Sufouh Country United Arab Emirates Industry Real Estate Fair Value 7,432,616 Valuation Basis Investment method % Ownership 42% GMFA, acquired 42% equity stake in Durrat Al Sufouh ( DAS ), as a result of debt settlement agreement reached and signed between Financial Assets Bahrain W.L.L. (GMFA subsidiary) and Abyaar Real Estate Development Company ( Abyaar ) in December The underlying assets of Durrat Al Sufouh comprised of a residential apartment building in Dubai Investment Park ( Al Reem Building ), with a basement, ground and six upper floors spanning over a built up area of 156,228 sq. ft. The property has a ground floor retail accommodation of 8,007 sq. ft.,100 residential apartments, a restaurant and several retail units on the ground floor. The premises is currently fully leased to NMC Hospital staff. NMC Hospital is one of the largest private healthcare providers in the UAE and has a branch in DIP, which started operations in July The partners of the Company are Al Reem Building currently seeking to sign a long term lease agreement with NMC Hospital which will in turn enhance the exit prospects for the Company. The value of Al Reem Building is expected to boost, supported by anticipated rise in the economic activity and increase in tenants in the Dubai Investment Park area due to its proximity to the Dubai Expo 2020 site. Al Reem Building was initially valued by Cluttons prior to signing of the Debt Settlement Agreement and was revalued by Cluttons as of 31 March 2016 at 7.43mn representing an increment of 9.5% over its prior valuation and carried accordingly in GMFA s accounts. The Investment Manager is targeting to exit its stake in the Company at an appropriate price and if required also exercise the option to resell its stake back to Abyaar in 2017, in accordance with the Debt Settlement Agreement. The course of action pertaining to the exercise of such option will be based on the indicative value of its stake in the option year and on the overall UAE real estate market conditions. Annual Report and Audited Consolidated Financial Statements 21

23 Underlying Portfolio Companies Olgana Tower Country Industry United Arab Emirates Real Estate Fair Value 8,898,887 Valuation Basis Sales comparison method As part of the Debt Settlement Agreement signed in December 2014 between GMFA s subsidiary Financial Assets Bahrain and Abyaar Real Estate Development Co. ( Abyaar ), GMFA has received ownership of 5 units in the Olgana Tower ( the Tower ). The Tower is located within the district of Al Sufouh and Tecom master development plan and is adjacent to Media City and Knowledge Village in Dubai, UAE. Abyaar is currently developing Olgana Tower at the Acacia Avenues Dubai with 139 villas & apartments available at the 43-story tower. One, two, three and four bedroom sky villas and apartments are available. A private community with luxurious facilities, Acacia Avenues features a luxurious resident-only health club. The club is fully equipped with aerobic and cardio-vascular equipment, swimming pools, tennis courts and play areas. A café and several nearby shops provide day-to-day amenities. The pedestrian-friendly avenues are ideal for jogging and bicycle rides. The expected completion date for Olgana Tower is the end of 2017 and the tower construction has reached the 19th floor as of March Abyaar has been able to secure fresh financing for the project from a UAE bank which will help accelerate its completion. Abyaar has recently delivered to its clients the adjacent Hiliana Tower which is a 28 story tower that is adjacent to the Olgana Tower. Abyaar will now be fully focused on completing the construction of Olgana Tower after having completed the Hiliana Tower. Abyaar has transferred to GMFA 10 off plan units by February 2016 as per the Debt Settlement Agreement. The units range between one, two, and three bedrooms and the larger town house duplexes with areas ranging from 947 sqf (one bedroom) to 5,837 sqf (town house duplex). A Photo of Olgama Tower: (Right side) Three additional units are expected to be transferred before end of The first of these has been transferred to the Investment Manager on 19 July 2016 and the process to register in the name of the Company has commenced. The units were initially valued by Cluttons prior to signing the Debt Settlement Agreement, and the transferred units were revalued by Cluttons as of 31 March These units were classified as assets held for sale in the 31 March 2015 financial statements as it was the intention of the Company to sell the units. Due to the decline in UAE real estate property prices and low liquidity in the off plan market, the Investment Manager has advised the Board that it is in the best interests of the Company and its shareholders to retain the position and the units are now classified in the financial statements as investment-other. The Investment Manager is targeting to exit the units if a suitable price is offered. As part of the Debt Settlement Agreement, the Investment Manager also has the option to resell the units back to Abyaar during the period from April 2017 till 30 April 2018 and will decide on the course of action regarding the exercise of such option based on the indicative value of the units during the option period and the overall UAE real estate market conditions. 22 Global MENA Financial Assets Ltd