Contents Our & Management Review 05 TII 12 Report of the Board 14 Consolidated to the Shareholders Consolidated

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1 And whosoever fears of God and keeps his duty to him, He will make a way for him to get out (from every difficulty). And He will provide him from (sources) he never could imagine. And whosoever puts his trust in God, and then He will suffice him. Verily, God will accomplish his purpose. Indeed, God has set a measure for all things. Surah 65: 2-3

2 Contents Our Vision 03 Chairman s Statement & Management Review 05 TII Financial Highlights 06 Board of Directors 12 Report of the Shariah Supervisory Board 14 Consolidated Financial Statement 17 Auditors Report to the Shareholders 18 Statement of Financial Position 20 Consolidated Statement of Income 21 Consolidated Statement of Comprehensive Income 22 Consolidated Statement of Cash Flows 23 Consolidated Statement of Changes in Equity 24 25

3 Our Vision Our vision is for TII to emerge as leading emerging market Private Equity Firm, reputed for its ability to acquire and maintain a portfolio of high growth businesses that are armed with strong differentiation, a competitive platform and an experienced owner Annual Report

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5 CHAIRMAN S STATEMENT & management review Dear Shareholders; On behalf of the Board of Directors of The International Investor Company (TII), it gives me great pleasure to present to you this 2012 Annual Report. During 2012, TII continued on the path of recovery that started in We made important operational and financial progress, and set a strong foundation to build upon for the future. We focused our efforts on improving group productivity, services quality, and profitability. Our key business's and investments are growing nicely and we have achieved noticeable improvements in performance, growth, profitability and solvency. However, the global economic recovery is still hesitant and slow, although moving in the right direction, is still volatile and as such markets will continue to be moody which will be a source of fluctuation to our net results going forward. In the meantime, and in spite of the volatility, we remain focused on our drive to build a unique and strong investments portfolio that is interestingly diversified in terms of geography and business lines. The future looks promising, and we will continue to work hard with all our stake holders; shareholders, bankers, clients, suppliers and employees to make TII a valuable and unique company to all was a good year for TII, but we have a lot of work still ahead of us. Adnan Al-Bahar Chairman and CEO Annual Report

6 TII Financial Highlights for the year was a very special year for the TII Group (the Group ) with significant growth in the Group s profitability. Annual profits increased 230% to KD 7.5 million from KD 2.3 million in Our key assets turned in satisfactory performances, FleetCorp, our operational fleet leasing business in Turkey, producing a strong performance for the second consecutive year with KD 1.9 million in profits for 2012 (2011: KD 1 million). COURTS The South East Asia Retailer continues to perform very well and this strong performance is set to continue over the medium term. And Bahrain based PROCCO specializing in loyalty, prepaid and installment card services reported a KD 0.7 million loss for the year, a 23% reduction compared to In 2012 the Group successfully completed the sale of Bayt Al Mal Investment Company, a subsidiary of Bayt Al Mal Holding Company which contributed KD 2.7 million to the Group profit. However we revalued our investment in Makkah Hills project down ward at the end of 2012 which resulted in a KD 1.9 million write off in the fourth quarter of TII Group total assets grew to KD 131 million compared to KD 109 million in 2011, a 21% increase. The main growth coming from our fleet leasing business in Turkey and the appreciation of other assets primary Asia. Shareholders equity increased from KD 7 million to KD 15.6 million in 2012, a 123% increase over This is mainly due to the profits for the year 2012, and a decrease in foreign currency translation reserve loss for the year. Group total liabilities also increased from KD 92 million to KD 111 million in 2012, primary from the growth in operating Fleet leasing in Turkey subsidiary. On 26 June 2012 we received Capital Markets Authority approval to reduce the share capital of TII from KD 49,222,195 to KD 19,159,874. At the 2011 Annual General Meeting we obtained shareholders approval for the capital reduction, and on 10 September 2013, the Ministry of Commerce and Industry approved the same. We finalized all required procedures for capital reduction in September THE INTERNATIONAL INVESTOR

7 Fleet-Corp Turkey: FleetCorp is one of the largest pure-play operational leasing and management companies in Turkey, operating to international standards with experienced management team and a world class technology platform. FleetCorp is acknowledged as one of the most professional companies in its market and currently ranks as one of the top three fleet leasing companies in Turkey. With 1,441 customers, 11,465 vehicles at the end of 2012, and 96% customer satisfaction at the end of 2012, FleetCorp serves customers in 81 cities in Turkey through service level agreements with 498 major authorized dealers. FleetCorp s growth strategy of focusing on service quality, added value, and profitable customers has resulted in a major improvement in its operating profit and its policy of hedging its currency exposure has given the business a lot of stability. In 2011 FleetCorp signed three year exclusive contract with Renault Credit International (RCI) to build their captive business in Turkey and has partnered with Dun & Bradstreet (D&B) to get its portfolio of leases credit-rated. More than 50% of the company s rated portfolio has a minimum to low credit risk rating with only 7% of the portfolio presenting a high credit risk rating as of the year-end was another successful year for FleetCorp with operational profits increasing from TRY 22 million to TRY 38 million, and net income after tax growing to TRY 12 million from TL 6 million in the previous year. ROE increased from 14% to 18.5% in Annual Report

8 COURTS Asia Limited COURTS Asia Limited, is a leading electrical, IT and furniture retailer in Southeast Asia offering superior value and a better shopping experience to its customers. COURTS has been in business for more than 35 years in Singapore and 25 years in Malaysia. Today, the Group operates more than 70 stores in multiple store formats spanning over 1 million sq.ft. of retail space, including pioneering the first Big-Box Megastore in Singapore in This flagship store, Courts Megastore Tampines, was recently renovated and reopened on 1 December 2012 with state-of-the-art retail offerings with multichannel retail experiences on offer to shoppers. The Group expanded its online presence with the launch of its revamped ecourts in Singapore in October 2012, and the launch of ecourts in Malaysia in January Courts has spearheaded a number of innovative subbrands including Courts Solutions Bar, Customer Experience Zones, Sofa Maker, Sleep Clinic and Dr Digital. Through the Courts Flexi Schemes, Courts Asia is also the only electrical, IT and furniture retailer to offer its own in house credit installment program, allowing its customers the flexibility of paying for their purchases by installments. With this unique business model, the Group is able to maintain a competitive edge. Courts Asia has steadily built a large and loyal customer base, with more than 1.2 million members in its Home Club loyalty program. The Group opened its first Big-Box Megastore in Malaysia in August 2013, and will be expanding its operations into Indonesia by 2014 with its largest ever Megastore promising to make a significant addition to the revenue of Courts Group was a significant year for Courts, with a re-listing on 15 October 2012 on the Main Board of the Singapore Exchange Securities Trading Limited as Courts Asia Limited. COURTS continued to report a robust performance with sales of S$793.8 million in 2012/2013, an increase of 9.6% over the previous financial year. 8 THE INTERNATIONAL INVESTOR

9 Themar International Holding Company (Formerly Bayt Al Mal Holding):- During June 2012 we finalized the exit of Bayt Al Mal Investment with substantial capital gain. Concurrently with the sale, we streamlined Themar International Holding Company operations, repositioned its core investments, controlling expenses and restructuring its debts to enhance its shareholder value. Annual Report

10 Payment and Loyalty Solutions Group (PROCCO): PROCCO Financial Services, part of the PLS Group, with its unique offering is fast being recognized as one of the leading Islamic Payment Solution platform providers, and the leading regional hosted loyalty solutions particular serving major clients regionally. PROCCO S Portfolio of Product & Services: PROCCO Financial Services WLL (Procco) provides different types of customized, payment and loyalty solutions to Banks, Financial Institutions, Corporate and Retailers. PROCCO S key products are:- White Label Payment Solution: An instalment payment card that enables cardholders to purchase lifestyle items on instalments. The solution has been designed using Islamic principles where the total instalment price (profit and principal) and the monthly instalment are calculated upfront at the point of sale and clearly printed on the final receipt. Banks and Merchants brand their own card, with PROCCO providing the end management of the transactions at the backend. Loyalty: Loyalty on smart-card chip or magnetic-stripe cards allows a wide range of possibilities for our clients to manage their marketing, understand their customers and reward targeted behaviour. It also allows for direct marketing to customers or customer segments. Loyalty Programs can be on a single merchant basis or designed as a coalition loyalty program. Procco can also enable a group wishing to do a cross border loyalty program such as a regional hotel group. Loyalty Programs are developed in-house and programmed to run on various retail outlets in association with a Bank/Financial Institution or merchant(s) through analysis of their transactional files. Payment with loyalty: Payment Solutions pass through a POS Terminal, whereby a loyalty application can also be activated on the same application as a payment card if required. Pre-paid, Post-paid & Gift Card solutions: For single merchants or multiple brands, as well as cards with a combination of programs like loyalty with top-up or pre-paid cards. 10 THE INTERNATIONAL INVESTOR

11 PROCCO S Projects: TAQSEET CARD ALBARAKA ISLAMIC BANK The Procco Financial Services and Al Baraka Islamic Bank partnership launched a first of its kind Sharia instalment finance product in Bahrain. Al Baraka Islamic Bank provides the finance to the customers and Procco supplies the technical infrastructure including the points of sale (PoS) network. In addition, Procco provides Al Baraka with bank collection and call centre services. With this expansion, all Al Baraka telephonic customer contact is now handled by Procco Financial Services. INSTANT FINANCE CARD ABU DHABI ISLAMIC BANK Procco has rolled out the strategic partnership program with Abu Dhabi Islamic Bank and Visa International on a very unique project. The installment platform allows for Sharia compliant financing, or a visa card. We are proud the program has demonstrated very interesting results and Procco is assisting ADIB to expand the service to clients in the UAE. EMAAR HOSPITALITY GROUP LLC Procco and Emaar have launched the Emaar Gift Card Program (prepaid card). This project is in operation at Merchants in Emaar establishments as well as Emaar direct outlets and allows customers to pre-purchase electronic gift cards for the purpose of purchasing goods and services in Emaar Merchants as well as Merchants located in Emaar locations. MÖVENPICK HOTELS AND RESORTS MOVENPICK Hotels & Resorts Middle East launched the Advantage M Loyalty Program in October 2011 across the Middle East with Procco Financial Services managing the program for Movenpick. The program has now expanded beyond the Middle East and is accepting bookings for Asian and European destinations. Annual Report

12 Board of Directors Adnan Abdulaziz Al Bahar - Chairman and CEO Faisal Abdul Mohsin Al Khatrash - Deputy Chairman Adnan Abdulaziz Al Bahar Chairman and CEO Before founding Tii in 1992, Adnan was Managing Director of AL Rajhi Company for Islamic Investment in London and prior to this, General Manager of Kuwait Finance House, He has served as Advisor to the Finance Committee of the Kuwait Parliament and as Director of Kuwait Investment Authority, Kuwait Stock Exchange and Kuwait Higher Planning Board. Faisal Abdul Mohsin Al Khatrash Deputy Chairman Faisal was previously Deputy Managing Director of Kuwait Foreign Trading, Contracting and Investment Company and Vice Chairman of Kuwait Finance House, He is currently an Executive Board member of Salhia Real Estate Company. 12 THE INTERNATIONAL INVESTOR

13 Talal Abdullah Al Nefisi - Director Anwar Abdul Aziz Al-Osaimi - Director Abdallah Mohamed Al-Beaijan - Director Talal Abdullah Al Nefisi Director Vice President, MENA Asset Management Department in KAMCO (KIPCO Asset Management Company), in additional he is a Director in United Real Estate Co. Talal graduated from Northeastern university, Boston with a Bachelor degree in Science of Business Administration from School of Business Administration, he has 16 years of experience where he held senior positions in some of the largest companies in Kuwait. Anwar Abdul Aziz Al-Osaimi Director Mr. Anwar graduated with a bachelor of science degree in Business from Emporia Kansas State College, U.S.A. He currently holds the position of Vice Chairman in Al-Asima Real Estate Company and board member & Deputy Managing Director of Al-Salhia Real Estate Company, in addition to being the board of Key Property Investments Ltd., U.K. and Haddia GmbH, Germany. Mr. Al-Usaimi was also a board member in Commercial Bank of Kuwait. Abdallah Mohamed Al-Beaijan Director Abdallah is Chairman and Managing Director of AL- Seedawi Sweet Factory and a Partner and General Manager of AL-Enma Management Consultancy. He is also a Chairman of Kuwait Foodstuff Merchants and Manufacturers Union, Regional Manager of Arab Federation for Food Industry in Kuwait, Board Member in the Kuwait Public Transport Co. and Board Member in Public Authority for Industry. Annual Report

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15 Report of the Shariah Supervisory Board In the name of Allah the Merciful Thanks to Allah, may peace and prayers be upon our Prophet Muhammad, his family and companions. To the Shareholders of the International Investor Company May Allah s peace, mercy and blessings be upon him. Pursuant to the General Assembly s decision to appoint the Company s Fatwa and Shariah Supervisory Board, the Board is pleased to present the following report: The Board supervised the principles in place, contracts related to transactions and applications used by the Company and audited the same during the financial period ended December 31st, 2013 to give the Shariah based opinion on whether the Company has undertaken any activities or contracts breaching the provisions and principles of Islamic Shariah in accordance with specific Fatwas, resolutions and guidelines issued by the Company s Fatwa and Shariah Supervisory Board. The Company s management is responsible for committing that its operations and contracts do not breach the provisions and principles of Islamic Shariah. As for Fatwa and Shariah Supervisory Board, its responsibility is limited to presenting an independent opinion about the Company s compliance to Islamic Shariah in respect of its transactions based on our supervision and audit as well as presenting you with the corresponding report. Fatwa and Shariah Supervisory Board supervised and audited the Company s business, which included the examination of contracts and procedures applied by the Organization through the inspection of each type of operations. The Board also planned and implemented its audit through obtaining information and explanations it deemed necessary for obtaining sufficient evidence to give reasonable assurance that the Company has not breached the provisions and principles of Islamic Shariah. Annual Report

16 According to note No. 2.2 of the Financial Statements, the Company owns assets and investments represented in properties in some subsidiaries and sister companies. After reviewing the Parent Company s Financial Statements, we concluded the following: 1. The Parent Company did not present the business activities of such subsidiaries to the Board, although the main activities of the same are in compliance with Islamic Shariah principles. 2. The operations of some subsidiaries were in breach of Islamic Shariah s provisions. However, the Parent Company pledged to renounce their related income to the benefit of public charity under the supervision of the Board in a suggested time plan. 3. In 2010, the Company entered into interest-bearing loan transaction with a conventional bank to repay the liabilities arising out of the bank s confiscation the letter of guarantee issued by the Company in favor of one of its subsidiaries. The Company up to the end of this period had not yet fully reimbursed the loan. Nevertheless, the Company has submitted a time frame to the board to convert this conventional loan into an Islamic transaction. We Pray to Allah Almighty to grant us guidance and rightness. May Allah s peace and blessings be upon you. Sheikh/ Abdul Rahman Bin Abdullah Ben Aqeel Signed/ Date/ Sheikh Dr./ Yousuf Hassan Al-Sharrah Signed/ Date/ Sheikh/ Abdul Sattar Ali Al-Qattan Signed/ Date/ 16 THE INTERNATIONAL INVESTOR

17 Consolidated FINANCIAL Statements 31 December 2012 Annual Report

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20 STATEMENT OF FINANCIAL POSITION The attached notes 1 to 27 form part of these consolidated financial statements. 20 THE INTERNATIONAL INVESTOR COMPANY K.S.C. (Closed) and Subsidiaries

21 CONSOLIDATED STATEMENT OF INCOME The attached notes 1 to 27 form part of these consolidated financial statements. Annual Report

22 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2012 The attached notes 1 to 27 form part of these consolidated financial statements. 22 THE INTERNATIONAL INVESTOR COMPANY K.S.C. (Closed) and Subsidiaries

23 CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December 2012 The attached notes 1 to 27 form part of these consolidated financial statements. Annual Report

24 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2012 The attached notes 1 to 27 form part of these consolidated financial statements. 24 THE INTERNATIONAL INVESTOR COMPANY K.S.C. (Closed) and Subsidiaries

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