sc 2014 digital

8/18/2019 SC 2014 Digital

1/64

2014 Annual Report

8/18/2019 SC 2014 Digital

2/64

Profile Samena Capital is a principal investment groupfocusing on investments across multiple asset classesin the Subcontinent, Asia, Middle East and North

Africa, collectively known as the SAMENA region.Samena Capital was established in 2008 by some ofthe most prominent valuepreneurs from the SAMENAregion and is today uniquely capitalised with equityof approximately US$75 million. Samena Capitalcurrently manages total capital commitments in excessof US$745 million across a range of open ended and

closed-ended fund structures and is a Cayman Islandsexempted company. It has three regulated investmentadvisors based in London (FCA), Dubai (DFSA) andHong Kong (SFC).

8/18/2019 SC 2014 Digital

3/64

Business Review 5Directory 32

Auditors’ Report 33

Financial Position 34Comprehensive Income 35Changes in Equity 36Cash Flows 37Notes 38

8/18/2019 SC 2014 Digital

4/64

Alliance Global Logistics Page 15

RAK Ceramics Page 9

Mahindra wo-Wheelers Page 13 Dynamatic echnologies Page 21

Flemingo Page 19

Our ambition has always been tocreate one of the biggest co-investment

pools in the private equity industry.

8/18/2019 SC 2014 Digital

5/64

Dear Shareholders

I am pleased to be able to report that in 2014 Samena Capitalachieved a Group Net Operating Profit before Management

Bonus of US$5.0 million. This represents a seventh consecutive

year of profits since inception.

Scale and Reach

2014 was a defining year for Samena Capital. We demonstrated

the breadth of our investment capabilities by deploying

approximately US$360 million of capital across the spectrum

of private equity opportunities. We took a control stake in a

UAE-listed company (RAK Ceramics), made structured minorityinvestments where we partnered with leading business groups

and entrepreneurs whom we supported in strategic, follow-

on acquisitions (Mahindra Two Wheelers/Peugeot Motocycles,

Flemingo/Harding Retail) and funded three bolt-on acquisitions by

our 80% owned buy and build logistics platform (AGL).

Our ability to invest in public and private companies and in control

and minority stakes, as well as flexibly tailor our deal size to the

transaction (by combining our funds with co-investment pools)

makes us uniquely positioned to pursue attractive investments

in the SAMENA region where the distinction between public and

private companies is not as sharp as in the West and the best

private equity opportunities cannot always be pigeonholed intocategories such as ‘growth capital’, ‘buyouts’ or ‘minority PIPEs’.

As at 31 December 2014, we also returned 75% of capital in our

first 2008 fund via successful exits such as our position in UNB

which delivered 2.7x.

Equally, our India Credit Fund which we launched in a contrarianstrategic move in November 2013 well before global sentiment

towards India began to turn positive, began to deliver attractive

yields by providing secured debt to Indian businesses in areas

where banks are currently regulatorily constrained. Finally, we also

added to our existing network of offices in the SAMENA region

by establishing a presence in Mumbai as we made substantial

strides forward in the development of the firm in 2014.

Highlights

2014 Net Operating Profit 1 (US$)

$5m 2014 Dividends (US$)

$2.5m

Real BusinessesReal Partnerships

2014 has been a defining year for Samena

Capital as we have executed some of the biggestdeals in the SAMENA region.

1 Before management bonus

Business Review

5

8/18/2019 SC 2014 Digital

6/64

8/18/2019 SC 2014 Digital

7/64

Our extensive shareholder networkenables us to execute transactions whichspan more than one country.

Preferred Partner and Proprietary Access

Our successful US$238 million acquisition of a 31% stake in

RAK Ceramics (a global leader in ceramic tile manufacturing

with bases in India, Bangladesh, UAE, Sudan and Iran) in June

2014 is a perfect example of this. We were able to source this

proprietary transaction as our pedigree shareholder network

had a geographic footprint that mirrored the growth markets

of the firm. H.H Sheikh Saud Bin Saqr Al Qasimi (Ruler of Ras

Al Khaimah and founder of RAK Ceramics) saw us as unique

partners who could take the company from the scale and scope

that he had built and execute his vision of transforming it into a

world class multinational.

Our second landmark deal in February 2014 was our US$36

million investment in Mahindra Two Wheelers as we become

the preferred partner to the Mahindra group, one of India’s

leading industrial conglomerates. Our active engagement with

senior management led to the eventual acquisition in January

2015 of Peugeot Motocycles (a firm with a 150 year history) toincrease the global scale, research & development capabilities

and distribution for Mahindra Two Wheelers.

Regional Footprint

Our US$25 million minority interest investment in Flemingo

International (the leading emerging markets duty free retailer)

was made due to our ability to help the company gain access to

the MENA and ASEAN regions as it wanted to expand into these

high growth markets. We also aided the company in acquiring

Harding Retail, the world’s second largest on board cruise

retailer, with this being an important landmark for the company

achieving its US$2 billion sales target by 2020.

Buy and Build Strategy

Our vision for growth for Alliance Global Logistics (a panASEAN supply chain and logistics firm) in which we have a

80% controlling stake is firmly based on creating an ASEAN

‘champion’ through carefully identified acquistion targets. By 31

December 2014 three bolt on acquisitions had been concluded as

we expect a projected EBITDA for 2015 of US$5 million and total

sales of close to US$150 million.

ransformational Growth

Finally, I am pleased to report that Dynamatic Technologies (our

US$22 million PIPE investment) is at last being recognised as

one of India’s leading aerospace and defence firms. Not only is it

now a Tier 1 supplier to Boeing, Airbus and Bell Helicopters but

is also a preferred supplier to the Indian Armed forces. Our active

boardroom representation since 2010 has played an important

part in this transformational story.

Beyond Borders

Samena Capital’s uniqueness is our ability to

grow businesses beyond their borders by cross-synergising our networks.

Business Review

Building Businesses

7

8/18/2019 SC 2014 Digital

8/64

RAK Ceramics has retainedits position as the world’s no.1ceramics manufacturer with a

global annual production outputof 117 million square meters ofceramic and porcelain tiles, 4.6million pieces of bathware and 24

million pieces of tableware.

8/18/2019 SC 2014 Digital

9/64

Identifying the Opportunity

In June 2014, we acquired a 31% strategic stake of Ras AlKhaimah-based RAK Ceramics (RAKC). RAKC, which is listed

on the Abu Dhabi Stock Exchange, is the world’s largest

manufacturer of premium quality ceramic tiles, tableware and

sanitaryware. The company supplies customers in over 160

countries and the RAK Ceramics group of companies generate

sales in excess of US$1 billion per annum.

RAK Ceramics Profile

Amount Invested US$238m

Stake Held 31%

Country UAE

Market Capitalization US$668m

Investment Type Control PIPE

Building Co-Investment

Under the leadership of H.H. Sheikh Saud Bin Saqr Al Qasimi,Ruler of Ras Al Khaimah and UAE’s Supreme Council Member

and H.H. Sheikh Mohammed Bin Saud Al Qasimi, Crown Prince

of Ras Al Khaimah (the Promoters), RAKC had enjoyed 20 years

of spectacular and uninterrupted growth. Although RAKC had

become a global brand, it required specialist expertise and new

strategic, structural and operational initiatives to unlock new

opportunities.

Having presented our credentials to the Promoters highlighting

our regional capabilities and our business case to unlock RAKC’s

hidden value, the Promoters agreed in June 2014 to sell a

31% equity stake to Samena Capital and its consortium on a

proprietary basis. The Promoters realized that we could further

strengthen RAKC’s excellent position in the SAMENA market

to capitalise on the opportunities on offer in one of the world’s

fastest growing regions. Given the size of the transaction, we

formed a consortium of co-investors which included two GCC

sovereign wealth funds, a blue-chip Saudi family and existing high

net worth SC shareholders.

Our preferred partner status, our clear post-acquisition

value creation plan and our inherent capabilities to have a

transformational effect on the business were a compelling

proposition for us to source this proprietary transaction.

Proprietary Access o A Global Leader

Samena Capital executed a US$238m investment

alongside some of the biggest sovereign wealth funds in theregion, major institutional players and preferred partners.

Business Review

9

8/18/2019 SC 2014 Digital

10/64

Proprietary Access o A Global Leader

Post Acquisition Initiatives

Having taken de facto control of the company, we embarked

upon a comprehensive ‘good to great’ transformation programme

covering governance, organisation and management, operations

and non-core asset disposals in order to enhance the company’s

performance and create shareholder value.

Governance

I became the Vice Chairman of the company’s board and the

Chairman of the Audit Committee. We established an Executive

Committee, chaired by my colleague Ramesh Venkataraman,

to work with the CEO on making key strategic and operational

decisions and driving the transformation programme. We also

engaged Philip Gore-Randall (former COO of HBOS plc, Aon

UK and Arthur Andersen) as an expert adviser to the Audit

Committee.

Over the last nine months, we have revamped the organisation,

clarified accountabilities, strengthened the senior team, and put in

place a comprehensive incentive plan for top management. We

are expanding capacities in Bangladesh and India and planning

to double the sanitaryware business. We are also restructuring

our sales and distribution arrangements in our core markets

including Saudi Arabia, Europe and India and have ramped up aprogramme to improve gross margins via improved procurement

and streamlining manufacturing.

Non Core Assets

Finally, we have successfully revamped the governance of the

various subsidiaries and joint ventures, concluded the sales of

several non-core ventures including RAK Laticrete (adhesives

joint venture) and RAK Pharma in Bangladesh, and initiated the

process to exit manufacturing operations in the less attractive

markets of China and Sudan. Our hands on approach has already

delivered substantial benefits and has placed the company on an

upward performance trajectory for 2015 and beyond.

Bright Future

It has been more than nine months since we acquired our

strategic stake in RAKC and we are now fully integrated into the

company – in the factory, in the boardroom, on key management

committees and are creating value at every level. We were

able to institute for the first time a formal dividend policy which

resulted in a 35 fils (+133% YoY) per share dividend for 2014. The

company’s share price has appreciated 14.3% since we closed

our investment in June 2014, a period during which every GCC

market performed poorly and the overall MENA index declined by

12.2%. We remain very optimistic about the future prospects of

this global leader.

RAK Ceramics Share Price Performance

Abdallah Massaad (RAK Ceramics CEO)

4.5

3.5

2.5

3.0

4.0

2.0

1 5 J u n

1 4

5 J a n

1 4

1 0 A u g

1 4

2 8 D e c

1 4

3 0 N o v

1 4

1 3 J u

l 1 4

2 N o v

1 4

7 S e p

1 4

2 2 F e

b 1 5

2 5 J a n

1 5

2 2 M a r

1 5

ADX:RAKCEC Share Price UAE General Index Share Price

Source: Bloomberg

0

8/18/2019 SC 2014 Digital

11/64

8/18/2019 SC 2014 Digital

12/64

MWL is the flagship two wheelerbusiness of the US$ 16.5 billion

Mahindra Group, a leading

conglomerate in India.

We welcome our new partnerSamena Capital at a time when ourbusiness is growing strongly driven

by rising demand for the Centuromotorcycle which has been developedbased on keen consumer insight.

Anoop Mathur (Former President, Mahindra wo Wheeler)

Peugeot Metropolis

Mahindra Centuro

2

8/18/2019 SC 2014 Digital

13/64


MTWL is the flagship two wheeler business of the US$16.5billion Mahindra Group, a leading conglomerate in India. Within

the Mahindra Group, MTWL has been identified as the “anchor

in the automotive crankshaft”, which will drive the company to

meet its aspiration of becoming a Top 50 Global Brand by 2020.

We invested in the company in February 2014, our first pr ivate

equity investment in India, via a secondary buyout of Mahindra’s

JV partner Kinetic Engineering and have subsequently infused

primary capital into the business.

Mahindra wo-Wheeler Profile

Amount Invested US$35.9m

Stake Held 10.29%

Country India

Market Capitalization Private

Investment Type Growth Capital

Peugeot Motocycles Acquisition

A watershed moment for the company was the acquisition of theworldwide two wheeler business of Peugeot Motors in January

2015. We were actively engaged with senior management

of MTWL in screening the acquisition targets to provide the

company with greater geographic reach and access to global

research and development capabilities. Peugeot Motocycles,

with its legacy over 150 years of production, brings a very strong

brand name and provides access to best in class products and

technology. We believe this acquisition will catapult MTWL into

the league of global two wheeler manufacturers with presences

across developing and developed markets.

Geared For Growth

Samena’s investment into the world’s largest motorcyclemarket is now set for accelerated growth.

Business Review

Mahindra Centuro

Anand Mahindra (President, Mahindra wo Wheeler)

13

8/18/2019 SC 2014 Digital

14/64

A key pillar of AGL’s strategy is tobuild an integrated logistics playerwith expertise across the air and sea

freight segments.

4

8/18/2019 SC 2014 Digital

15/64


The ASEAN region is a high potential, rapidly evolving logisticsmarket which is severely underserved due to a fragmented and

sub scale supplier base. The region’s exporters and importers use

either small, local freight forwarders with limited resources and

expertise, or large and remote overseas-based logistics providers.

At the beginning of 2013, there was no ASEAN-based, ASEAN-

focused logistics provider, with headquarters in the region, an

international network and capable of providing a complete point

of exit, point of entry freight forwarding service. We viewed this

gap in the market as a tremendous opportunity to develop a

home grown ASEAN logistics champion through a buy and build

strategy and so we undertook our first private equity investment

via our flagship fund Samena Special Situations Fund II L.P.

Alliance Global Logistics Profile

Amount Invested US$24.1m

Stake Held 80%

Country Singapore



Te Fast rack Approach

Our acquisition of Alliance Global Logistics (AGL) in Singapore(a third party air freight logistics company) was our first step

in building this fully integrated ASEAN logistics company. This

initial investment allowed us to enter high margin niche markets

such as pharmaceuticals, fresh produce and cold chain with key

clients including Roche, Salvay and Penn.

Having established a key Far East hub, AGL (led by Steve Russell

– a 15 year industry veteran) we quickly acquired US based

Universal Shipping Inc (USI) . USI is a Non Vessel Operating

Common Carrier focusing on the movement and warehousing

of perishables for customers such as Dole, APP and Wiley. This

development gave AGL its first North American hub, branch

offices in Shenzhen, Shanghai, Bangkok and Davao and access to

ports in Indonesia, China and South East Asia.

Buy OpportunityBuild Success

Alliance Global Logistics is a buy and build

platform that aims to create the leading ASEANintegrated logistics provider.

Business Review

AGL Senior Management

15

8/18/2019 SC 2014 Digital

16/64

Buy Opportunity Build Success

Te Year of Acquisitions

In 2014, AGL significantly increased its buy and build strategy as

it successfully completed three further add-on acquisitions. In

July 2014, AGL acquired SC Fulfil Group, a value added services

provider that provides logistics services, including multi party

logistics services to blue chip multinational companies in Asia

Pacific. In October 2014, AGL acquired Rapid Logistics B.V., a

Netherlands-based third party logistics provider which focuses

on warehousing, road transportation, air and sea freight, project

logistics and “mission critical” services.

This acquisition was an important component of AGL’s strategy

to establish presences in key European gateways for both air and

sea freight. Finally in January 2015, AGL closed the acquisition

of A-Link, a US air freight forwarder which focuses on export

shipments to China. A-Link has strong relationships with airlines

and is highly complementary to USI.

A key pillar of AGL’s strategy is to build an integrated logistics

firm with expertise across air and sea freight segments.

Acquiring A-Link has allowed AGL to instantly establish an air

freight business in the US, participate in market growth from

the e-commerce space where A-Link has a strong position, and

realize synergies from cross selling, increased pricing power and

costs savings opportunities across the entire group.

AGL Global Office Infrastructure

Consolidation and Growth

With five hubs in place and a global footprint that covers 20

branch offices across Asia, US, Middle East and Europe, we have

grown AGL within two years from a small, loss-making Singapore

company with US$3 million of revenues to an ASEAN logistics

firm today with annual revenues for 2015 forecast to reach close

to US$150 million and EBITDA in excess of US$5 million due to

our active ownership and aggressive inorganic growth strategy.

We continue to be actively engaged with management and

are very excited about AGL’s ability over the next five years to

become the logistics provider of choice for companies exporting

to, and importing from, ASEAN.

Forecast Revenue 2015 (US$)

$150m

Forecast EBIDA 2015 (US$)

$5m

AGL 2014 Offices

Future Offices

Agent Partner Network

6

8/18/2019 SC 2014 Digital

17/64

We are actively engaged with management and are very excited about AGL’s abilityover the next five years to become the logistics provider of choice.

17

8/18/2019 SC 2014 Digital

18/64

Samena Capital brings a value-addednetwork in our core markets as well asbusiness and financial skills. We believethat this will add immense value tothe organization by driving further

growth and sharpening our company’s

long-term strategy. Atul Ahuja, CEO of Flemingo International

8

8/18/2019 SC 2014 Digital

19/64

Expanding TeHorizons Of Duty Free

Samena Capital’s investment in one of the

world’s leading duty free operators shows strong potential for cross-border growth.

Background

Flemingo International (“Flemingo”) is one of the world’s leadingduty free and travel retail operators with a focus on emerging

markets. Headquartered in Dubai, the company has a presence

in 32 countries with over 140 operations in Asia, Africa, Europe

and Latin America. Flemingo operates across different formats

ranging from duty free shops in airports, borders, downtown,

seaports; to UN commissary shops, diplomatic duty free, inflight

supply as well as convenience stores, food & beverage and

luxury retail outlets. In most cases, these operations are based

on multi-year concessions, for instance, with the relevant airport

authority, providing long term revenue visibility.

Flemingo International Profile

Amount Invested US$25m

Stake Held 5.5%

Country UAE



Structured Minority Interest

This transaction provides us with an attractive opportunity for astructured investment into a leading emerging market focused

specialty retailer with strong visibility of growth and margin

expansion. Our investment will be used to fund Flemingo’s

expansion plans, which includes acquisitions and organic growth

through new concessions. We are represented on the board of

the company and plan to be engaged shareholders.

Harding Retail Acquisition

In November 2014, we aided the company in acquiring Harding

Retail, the second largest retailer worldwide on-board cruise

ships operating nearly 200 retail outlets on 57 cruise ships,

including some of the world’s most famous ocean liners such

as the New Britannia. The company serves 18 of the world’s

top cruise lines out of offices in Bristol, Miami and Sydney. This

acquisition provides a unique opportunity for Flemingo to acquire

an industry leader in a complementary travel retail format with

significant synergy potential.

We are actively supporting management in the development of

the business and are excited about the progress made since our

investment with the completion of the Harding acquisition, which

was a key landmark in the company achieving its US$2 billionsales target by 2020.

Business Review

19

8/18/2019 SC 2014 Digital

20/64

In September 2014 Dynamaticechnologies and its collaboratorBoeing inaugurated a plant in Indiato manufacture critical parts for aBoeing helicopter that is sold globally.

I understand that it was a day after Make in India was launched. I am

pleased to learn that the first set of parts are ready for shipment today.

Narendra Modi Excerpt from Speech at Aero India 2015

0

8/18/2019 SC 2014 Digital

21/64

Dynamatic Technologies (‘Dynamatic’) is a leading Indian listedprecision engineering company with manufacturing bases

across India, United Kingdom and Germany. Under the visionary

leadership of Udayant Malhoutra, the company has evolved from

being a small automotive component producer to India’s leading

aeronautical component supplier for global majors.

Dynamatic echnologies Profile

Amount invested US$21.8m

Stake held 13.27%

Country India

Market Capitalization US$197m

Investment type PIPE

Amongst the earliest investments made by Samena SpecialSituations Fund L.P., the company’s management was introduced

to us through our shareholder network in 2010. Although the

valuations seemed on the surface very expensive (over 50x

P/E), it was clear to us that the company was building niche

capabilities which would prove to be significant earnings drivers

over the medium term.

The fund’s closed ended structure allowed us to back this

entrepreneur’s vision despite the low liquidity of the stock and

a comparatively small market capitalization. In a period of 12

months, we became the largest external shareholder of thecompany and a preferred partner for the management.

A Window OfOpportunity

Dynamatic echnologies is validation of Samena

Capital’s investment thesis of identifyingtransformational businesses with huge potential.

Identifying the Opportunity A Preferred Partner Relationship

Business Review

Udayant Malhoutra (CEO) & Narendra Modi (Prime Minister of India)

21

8/18/2019 SC 2014 Digital

22/64

ransformational Growth

In 2010 we had outlined the aviation and defense opportunity

as a core part of our investment thesis and yet it seemed

improbable to others this would be achieved. However, since

April 2013 the broader investor community has recognized the

potential of this company and the stock has appreciated 491%

and has attracted some of the largest institutional investors to

participate in its growth story.

Dynamatic echnologies Share Price Performance

It is very rare to partner with a company which is at the forefront

of its industry and witness it evolve from a niche player to a global

giant by building complexity and scale. Our active participation,

through our board representation and more importantly through

our constant engagement with the management, has helped

the company improve its strategic focus and provided us with

the ability to demonstrate the importance of having a flexible

yet patient and disciplined mandate in the emerging markets.

We believe Dynamatic is still very nascent and could grow to be

a defining player in its industry in the years to come. We look

forward to this phase of the company’s evolution.

Aerospace Revenues (INR m)

A Window Of Opportunity

ransformational Evolution

The company’s core operations span across the automotive

component and defense and aviation sectors. Both these

verticals have grown inorganically, with the company acquiring

aeronautical capabilities in the United Kingdom (Oldland

Technologies in 2007) and acquir ing a large automotive

component manufacturer in Germany (Eisenwark Erla in 2010).

Integrating operations across three countries has enabled the

management to create significant process competencies through

economies of scale. As a result of its strategy and execution,

over the past five years, sales have increased fourfold and its

client relationships have expanded across industries.

Aviation and Defense Capabilities

Over the past decade, Dynamatic has been slowly building its

capabilities in the aviation and defense sectors. It initially started

as a small assembler for Airbus in India and kept pursuing the

opportunity despite no beneficial support from the erstwhile

industrial policy. By the time Narendra Modi specifically

mentioned Dynamatic at the Aero India February 2015 show as a

shining example of his ‘Make in India’ programme it had become

the first Tier 1 supplier for Airbus from India. Indeed, over the

past 12 months, the company has made significant progress in

ramping up its aerospace and defense divisions, evidenced by

a recent spate of order wins from global majors such as Airbus,

Boeing and Bell Helicopters. During the year, Dynamatic was

awarded a large multi-year order by Airbus, to undertake the

assembly of flap track beams for its long range aircraft variants

in addition to the narrow body aircraft range. Cumulatively, the

company has won orders worth US$250 million and will execute

these over the next decade. Additionally, this business has a

very strong profitability profile and thus will positively impact the

company’s total margins over time.

Bangalore production facility

4000

2000

3000

1000

Apr 13 Apr 14 Apr 15

Dynamatic echnologies (DYC) Share Price

Source: Bloomberg

3,300

3,500

2,900

3,100

2,300

2,100

2,700

2,500

1,900

1,700

1,500Mar 13 Mar 14 Mar 15 Mar 16 Mar 17

Source: Company

2

8/18/2019 SC 2014 Digital

23/64

Flap rack for Airbus aircrafts

Hydraulic pumps for tractors

Body parts for Bell helicopter

23

8/18/2019 SC 2014 Digital

24/64

4

8/18/2019 SC 2014 Digital

25/64

Credit Opportunites Fund

• Open-ended funds

• Capturing alpha in

SAMENA credit markets

• Niche asset class

• Liquid and illiquid high

yield strategies

• Local currency credit

products

• Multi-strategy

discretionary portfolios

India Credit Fund

Credit

Samena Credit

Business Overview

=

2014 was a transformational year for Samena Capital as we

now have critical mass to be considered a ‘preferred partner’

and this is particularly relevant for the Special Situations group

as it focuses on executing ‘marquee’ deals over the medium

term. The firm’s capital with a pedigree is also important for

the Credit business as it looks to raise meaningful assets under

management in the next eighteen months.

PerformanceReview

2014 saw a significant increase in revenue, profits

and dividends as we established our mark in thedirect investment field in the region.

Funds & Assets Under Management

2014 saw a significant increase in revenue, profits anddividends due to the establishment of new business lines

and a comprehensive review of our group cost structure. Total

revenues grew 17% year on year to US$15.1 million (2013:

US$12.9 million) and Net Operating Profits rose to US$5.0

million (2013: US$0.2 million). We believe we now have a strong

platform to support the growth of our individual businesses

as well as to be opportunistic as we look to deploy the firm’s

balance sheet in profit enhancing ventures.

Private Equity

Samena SpecialSituations

Special Situations Fund I

Special Situations Fund II

• Closed-ended funds

• Long-term hybrid

investment style

• Growth Equity/Platforms

• Pre-IPOs/Private

Placements

• PIPEs

• Buy-outs/Buy-Ins

Spark Holdings

• Close-ended vehicles

• Direct investments

• Marquee transactions

Limestone Holdings

DI

Samena Direct Investment

US$745m

US$211m

Direct Investment

US$414m

Private Equity

US$120m

Credit

56%

16%

28%

25

8/18/2019 SC 2014 Digital

26/64

Performance Review

Te Samena Special Situations Fundsoperate a hybrid investment strategythat integrates the investment rigourand depth of private equity investingwith the ability to invest in both the

public and private markets.

Assets Under Management 2014 (US$)

$414m A different and distinctive private equity model

The Samena Special Situations Funds operate a hybridinvestment strategy that integrates the investment rigour

and depth of private equity investing with the ability to invest

in both the public and private markets. Our flagship Samena

Special Situations Fund L.P. was launched in August 2008 with

total commitments of US$180.5 million and has a mandate

of acquiring significant minority interests in publicly listed

companies that have mature, cash generative businesses with

platforms for transformational growth. Samena Special Situations

Fund II L.P., our successor fund with a final closing in June

2013 with US$331.8 million in total commitments allows for a

wider investment remit. The Fund’s larger size and our active

shareholder network is creating attractive private equity as well

as PIPE deal flow across a range of sectors.

This flexible mandate and the closed ended fund structures allow

Samena Capital to have a unique approach to private equity

deals. We are open minded and do not confine our interests to

public or private entities or specific industry sectors. Instead, we

invest in businesses, public or private that we believe hold more

potential than are currently being realised.

Unlike most of our peers, a majority shareholding is not always

essential, although we always require a high degree of control.

Nor do we abandon an acquisition once the transaction is

complete — we become deeply involved in the business. By

providing a high level of strategic, structural and operational

input, we help businesses make the transitions they need in

order to optimise value and returns for their stakeholders.

We have added to our capability to support our portfolio

companies by hiring two experienced former consultants –

Kevin Neo and Raaquib Mutvalli - into AGL and RAK Ceramics

respectively. We have also utilized the skills and experience of

Philip Gore-Randall, former COO of HBOS plc, Aon UK and Arthur

Andersen who joined Samena Capital’s Audit & Operations

Committee, Compensation Committee and Executive Committee

in 2014, to support us in portfolio management. Ultimately,

we believe that making a real difference to portfolio company

strategy and operations is the only sustainable way to deliver

attractive returns to our investors.

Finally, as part of our ongoing efforts to enhance our investment

capabilities we have recently hired Kenyon Lee (formerly of Navis

and GEMS) as a Managing Director in our Hong Kong office to drive

our origination and deal execution in respect of the ASEAN region.

Samena Special Situations

Samena Special Situations team

Shirish Saraf (Vice Chairman & Head of Private Equity)

6

8/18/2019 SC 2014 Digital

27/64

Samena Special Situations Fund L.P. (SSSF I)

Final closing date May 09

Term of the fund 5 years

Fund size US$180.5m

Committed capital returned 75%

Money multiple 1.13x

The Samena Special Situations Fund L.P is pleased to report

that the Total Investor Return (Money Multiple) for the Fundstood at 1.13x as at 31 December 2014. The significant recovery

in the MENA and Indian stockmarkets in 2014 was a key driver

for performance and enabled us to return 75% of capital by 31

December 2014. Some significant exits since inception are:

Name Sector Holding Period ROI IRR Exit

Full Exits

DP World* Logistics 2 months 1.8x 6,052% May 09

Rubicon Offshore Oil & Gas 20 months 1.5x 73% Nov 10

Eicher Motors Auto 23 months 5.4x 214% Mar 11

Renaissance Services Oil & Gas 18 months 1.6x 57% Mar 11

McLeod Russel Consumer 11 months 1.8x 92.9% Dec 12

Emaar Properties** Real Estate 9 months 1.3x 39.5% Dec 12

DP World** Logistics 34 months 1.4x 14.3% Jan 13

Saudi Hollandi Bank Financial 33 months 1.7x 24.2% Dec 13

El Swedy Electric Industrial 44 months 0.8x -8.2% Jan 14

Union National Bank Financial 54 months 2.7x 32.1% Jun 14

HBL Power Systems Industrial 63 months 0.7x -6.5% Dec 14

Partial Exits

Voltamp Transformers Industrial 12 months 1.3x 28% Jul 10

CSE Global Oil & Gas 23 months 2.1x 58% Feb 11

* 1st Investment ** 2nd Investment

Note: the above exits and performance statistics exclude cash & cash equivalents, investments

of less than 1% of total commitments and any hedging strategies.

Our remaining portfolio consists of eight companies in the

SAMENA region – India (6), MENA (1) and South East Asia (1).

As the Fund approaches the end of its life on 31 December 2015

we remain focused on completely exiting all of its positions by

then.

Samena Special Situations Fund II L.P. (SSSF II)

Final closing date June 13

Term of the fund 7 years

Fund size US$331.8m

Committed capital called 60%

Money multiple* 0.86x

*The NAV per share is calculated using the NAV plus undrawn commitments divided by total

commitments. Fees are charged on total commitments, the NAV of the Fund exhibits the J

curve effect in its early years.

The Samena Special Situations Fund II L.P., a successor fund to

the flagship Samena Special Situations Fund L.P., was launched

in 2011. The Total Investor Return (Money Multiple) for the Fund

stood at 0.86x as at 31 December 2014.

Since inception the Fund has called 60% of its currently

committed capital which it has fully deployed in the following

seven investments:

Sector Name Country Type Year Cost

Industrials RAK Ceramics UAE Controlled 2014 US$45m

Automotive Mahindra Two Wheelers India Minority 2014 US$26.9m

Retail Flemingo Int UAE Minority 2014 US$25m

Business AGL Singapore Buy/Build 2013/14 US$24.1m

Healthcare Jubilant Life Sciences India PIPE 2011 US$16.9m

Basic Materials Ballarpur Ind India PIPE 2011 US$13.7m

Industrials Dynamatic Tech India PIPE 2011 US$9.4m

Our diversifed portfolio at the end of 2014 demonstrates the

breadth of our investment capability and has allowed us to

sharply differentiate our strategy relative to our private equity

peers. Our geographic footprint means that our sweet spot is

with companies that already are or wish to go across borders –effectively SAMENA region multinationals.

We are also convinced that the Fund’s flexible investment

mandate which allows us to make private equity-style

investments in listed as well as privately held entities, and take

either control or minority stakes is especially well suited to

investing in the SAMENA region where the distinction between

public and private companies is not as sharp as in the West and

where structured minority stakes backing a strong entrepreneur

are often the best way to participate in exciting investment

opportunities.

Performance Review

27

8/18/2019 SC 2014 Digital

28/64

Over the last several years wehave increasingly seen a strongappetite from sovereign wealth

funds, institutional investors andsophisticated family offices for marqueeand exclusive direct investment

opportunities.I am pleased to report that in 2014 we initiated our first direct

investment in RAK Ceramics via Samena Limestone Holdings (a

Cayman based five year fixed term company) and other strategic

co-investors. We followed up this opportunity in December 2014

by offering a select group of investors the opportunity to invest

directly into Mahindra Two Wheelers via Samena Spark Holdings

(a Cayman based five year fixed term company).


$211m

Samena Limestone Consortium

Launch date June 14

Term 4.5 years

AUM US$199m

We launched Samena Limestone Holdings in June 2014 as a

special purpose vehicle to invest into RAK Ceramics PJSC along

with other co-investors as part of Project Limestone. Since

investing into RAK Ceramics, we have dedicated senior resources

to implement our post-acquisition plan and ensure the execution

of the turn-around initiatives to unlock shareholder value.

The Limestone consortium is now represented with three

board members including Shirish Saraf as the Vice Chairman

of RAK Ceramics and also the Chair of the Audit Committee

while Ramesh Venkataraman is a board member and the Chair

of the Executive Committee. In the first 180 days we were

able to realign the company’s strategy to focus on its core

ceramics business, commission expansion of its capacities

in its India and Bangladesh plants, launch a plan to double

sanitaryware production over the next three years, strengthen

its B2B distribution network, establish the company’s direct

sales channels in Saudi Arabia and help enhance its product

development and design functions. We also set a strategy to exit

or wind down the company’s non core operations and to focus

the company’s resources on its core profitable markets of the

GCC, India and Bangladesh and also to exit the less attractive

Sudan operations.

As a result, the company announced in its 2014 Annual Results

growth of 14.0% in adjusted net profits (excluding hyperinflation

impact from Sudan and Iran) to AED 338 million and a cash

dividend payment of AED 0.35 per share which translates to a

cash yield of 11.7% at the closing price of 31 December 2014.

Performance Review

Samena Direct Investment

Shirish Saraf (Vice Chairman) & H.H. Sheikh Saud Bin Saqr Al Qasimi,Ruler of Ras Al Khaimah

Abdallah Massaad (CEO Rak Ceramics), Wassim Moukahal (Senior VicePresident Private Equity) and Sultan Al-urki.

8

8/18/2019 SC 2014 Digital

29/64

Samena India Credit Fund

Launch Date Nov 2013

AUM US$57m

Performance (2014) +8.75%

Cumulative return since inception +11.2%*

*As at 28 Feb 2015

Since inception in November 2013 the Fund has generated

a cumulative net return of 11.2%. This performance was

despite a relatively high average cash balance of ~26% for theperiod as the initial corpus was deployed into a portfolio under

construction. The fund stands well positioned for 2015 with a

proven thesis, over a year of performance track record, and a

fully invested portfolio generating a 12%+ yield. We continue

to see a very strong pipeline of credit opportunities with the

revival of the capex cycle in India. Additionally, the Fund has been

constructed to benefit from the rate compression cycle in India

which we expect to be a strong driver of incremental alpha over

the next couple of years. Over the course of 2014 we built out

our credit investment team which comprises five investment

professionals with four based out of our new Mumbai office. I am

also pleased to announce that the Samena India Credit Fund was

awarded the ‘Best Indian Credit Fund’ category for 2015 by theAlternative Investment Awards.

Cumulative Return ID Feb 2015

By backing an experienced Indiacredit team we are already seeing a

first mover advantage in a rapidlyevolving and expanding market.

In November 2013 Samena Capital and its partners launched a

dedicated India Credit Fund with US$45 million of its own capital

as we thought that the investment opportunities in the domestic

India credit space was an excellent way for us to find yield in this

low interest rate environment. It was a contrarian strategic move

to establish such a venture as India had fallen out of favour with

investors and sentiment amongst corporate India was at a low ebb.


$120mI am pleased to say that nearly sixteen months later India credithas emerged as one of the most compelling ways to invest in

India as local INR credits currently offer equity like returns (mid

to high teens) on a fully secured basis. In addition, as this market

has only recently become meaningfully accessible to foreign

institutional investors we are seeing the benefits of a first mover

advantage with strong demand from investors for the Samena

India Credit Fund.

Performance Review

Samena Credit

Ramiz Hasan (COO Samena Capital)

Aswini Sahoo (Senior Vice Prsident) and Akash Mehta (Senior Managing

Director - India Credit).

F e

b 1 5

114

106

110

102

112

104

108

100

D e c

1 3

A p r

1 4

A u g

1 4

F e b 1 4

J u n

1 4

O c t 1 4

J a n

1 5

J a n

1 4

M a y

1 4

S e p

1 4

D e c

1 4

M a r

1 4

J u

l 1 4

N o v

1 4

Samena India Credit Fund JPM Asia Credit Index

29

8/18/2019 SC 2014 Digital

30/64

Performance Review

Corporate Governance

High standards of corporate governance are a key contributor

to the long-term success of a company, creating trust and

engagement between the company and its stakeholders.

Striving to deliver exemplary governance is a core aspect of

Samena Capital’s strategic intent. We have clear, well understood

governance policies, procedures and practices throughout the

Group. Our supervisory bodies such as our Executive Committee

and our Audit & Operations Committee are an embodiment of

this. Effective governance is also achieved through a combination

of strong processes, right values and culture. In April 2014 we

appointed Philip Gore-Randall (former Senior Partner of Arthur

Andersen) as Chairman of the Audit & Operations Committee as

we increased resources we devote to conduct issues. I would

like to thank Gratian Anda for the considerable contribution he

has made to the running of the committee over the last few

years. I am pleased that Gratian will remain as an active member

of the committee and I also welcome Daisy Ho (CFO of Shun Tak

Holdings) as a new member of this body.

Personnel, Organisation & Investor Relations

Dubai is now the central hub for the investment team, finance,

investor relations and legal and compliance personnel. By

centralising in one location we are able to achieve economies of

scale, strip out duplication and drive greater standardisation. We

have also recently hired Alma Lawrie into our Dubai team as Head

of Investor Relations. She and her team will focus on enhancing

the quality and timeliness of our reporting and communications

to current investors as well as expanding our outreach to new

investors, in particular institutions.

Compliance, I & Operations

Our business as a principal investment firm will continue to

be subject to an evolving and complex regulatory framework

comprising legislation, regulation and codes of practice, in each of

the countries in which we operate. Now that the group operates

via three regulated entities with three different regulators we have

a seasoned Group General Counsel and Head of Compliance to

oversee all legal and compliance requirements.

Corporate Offices

Footnote

London

Dubai

Mumbai

Hong Kong

Audit &

Operations

Committee

Compensation

Committee

Senior

Management

Group

Executive

Committee

Oversightand review of

financial, audit

and internal

control issues

Oversightand review of

remuneration,

share plans and

other incentives

Day to Daysupervision

of the three

regulated

entities

Responsiblefor executing

the Board’s

strategies

Authorised and Regulated by FCA

Regulated by DFSA

Licenced by SFC

Samir Fancy (Chairman Exco) & V-Nee YEH (Non Executive Chairman)

0

8/18/2019 SC 2014 Digital

31/64

Performance Review

Summary

As we enter 2015 the foundations for Samena Capital have

never been stronger. We are increasingly being seen as a

preferred partner for businesses as we deploy capital in strategic

transactions in the SAMENA region. We are a catalyst for change

and economic integration as we grow our portfolio companies

across borders.

Our shareholder network has always been the strategic core

asset of Samena Capital. This group are real businessmen, realpartners with local insights and access who are best placed to

deploy capital in the SAMENA markets. We have a number of

strategic initiat ives in 2015 at the management company level

which I feel will help transform Samena Capital into a more

significant financial services firm.

No doubt our markets will continue to change dramatically as

the future is uncertain as we will enter periods of financial and

economic upheavals. However, one thing is certain. We are

not at all complacent. We will stick to our collective investment

model, stay true to our culture, continue to be innovative and

adaptive, and so I am confident in our ability to deliver lasting

value to our shareholders.

I thank you for your continued support and goodwill.

Best Regards,

Shirish Saraf, Vice Chairman

April 2015

Shirish Saraf (Vice Chairman) & V-Nee YEH (Non Executive Chairman)

31

8/18/2019 SC 2014 Digital

32/64

Directory

Directors

V-Nee YEH, Non Executive Chairman

Shirish Saraf, Vice Chairman

Samir Fancy

Sheikh Nawaf Nasser Bin Khalid Al Thani

Ziad Al-Turki

Kamal Bahamdan

Gratian Anda

Daisy Ho

Philip Gore-Randall

Ramiz Hasan

Simon Wong

Executive Committee

Samir Fancy, Chairman

Philip Gore-Randall

Ziad Al-Turki

Kamal Bahamdan

Ramiz Hasan

Akash Mehta

Dr. Markus A. Federle

Audit & Operations Committee

Philip Gore-Randall, Chairman

Gratian Anda

Daisy Ho

Ziad Al-Turki

Compensation Committee

Philip Gore-Randall, Chairman

V-Nee YEH

Shirish SarafSamir Fancy

Auditors

KPMG

P.O. Box 493

Century Yard

Cricket Square

Grand Cayman KY1-1106

Cayman Islands

Share Registrar

Maples Fund Services (Cayman) LimitedP.O. Box 1093

Boundary Hall Cricket Square


Cayman Islands

Legal Advisors to the Company

As to International Law

Allen & Overy LLP

P.O. Box 506678

Level 2

The Gate Village Building

DIFC, Dubai, UAE

As to Cayman Law

Maples and Calder

P.O. Box 1093

Boundary Hall Cricket Square


Cayman Islands

2

8/18/2019 SC 2014 Digital

33/64

We have audited the accompanying consolidated financial

statements of Samena Capital and its subsidiaries (the “Group”),

which comprise the consolidated statement of financial position

as at December 31, 2014, the consolidated statements of

comprehensive income, changes in equity and cash flows for the

year then ended, and notes comprising a summary of significant

accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial

Statements

Management is responsible for the preparation and fair

presentation of these consolidated financial statements in

accordance with International Financial Reporting Standards and

for such internal control as management determines is necessary

to enable the preparation of consolidated financial statements

that are free from material misstatement, whether due to fraud

or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated

financial statements based on our audit. We conducted our audit

in accordance with International Standards on Auditing. Those

standards require that we comply with ethical requirements and

plan and perform the audit to obtain reasonable assurance about

whether the consolidated financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and disclosures in the consolidated financial

statements. The procedures selected depend on our judgment,

including the assessment of the risks of material misstatement

of the consolidated financial statements, whether due to fraud

or error. In making those risk assessments, we consider internal

control relevant to the Group’s preparation and fair presentation

of the consolidated financial statements in order to design audit

procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness

of the Group’s internal control. An audit also includes evaluating

the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by management,

as well as evaluating the overall presentation of the consolidated

financial statements.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present

fairly, in all material respects, the consolidated financial positionof the Group as at December 31, 2014, and its consolidated

financial performance and its consolidated cash flows for the year

then ended in accordance with International Financial Reporting

Standards.

Auditors’ Report

Independent Auditors’ Report to the Directors

April 22, 2015

KPMG

PO Box 493

Century Yard


CAYMAN ISLANDS

Tel: +1 345 949-4800

Fax: +1 345 949-7164

Internet: www.kpmg.ky

33

8/18/2019 SC 2014 Digital

34/64

Note 2014 2013

Assets

Non-current assets

Goodwill 2(l),5 3,858,418 3,858,418

Property, plant and equipment 6 724,613 981,623

Financial assets held at fair value through profit or loss

Investments in portfolio funds 4,7 36,259,482 50,131,927

Equity investments 4,7 427,607 2,237,088

Financial assets measured at amortised costCash and cash equivalents 27,485,279 10,850,895

Amounts due from related parties 9,15 4,950,189 6,934,858

Other assets 3,524,204 1,051,771

Total assets 77,229,792 76,046,580

Liabilities and equity

Liabilities

Financial liabilities measured at amortised cost

Management incentive payable 15 2,515,677 -

Carried interest payable 2(g) - 2,763,185

Accounts payable and accruals 1,041,238 1,788,447

3,556,915 4,551,632

Equity

Consolidated equity 13 71,253,796 71,576,205

Translation reserves (141,550) (60,182)

Minority interest 2(m) 60,631 (21,075)

Proposed appropriations 2(n) 2,500,000 -

73,672,877 71,494,948

Total liabilities and equity 77,229,792 76,046,580

The accompanying notes are an integral part of these consolidated financial statements.

These consolidated financial statements have been authorised for issue by the following Directors on April 22, 2015.

V-Nee YEH Shirish Saraf

Non Executive Chairman Vice Chairman

Consolidated Statement of Financial PositionDecember 31, 2014 (stated in United States dollars)

4

8/18/2019 SC 2014 Digital

35/64

Note 2014 2013

Investment Income

Net realised gain on investments 7,912,114 1,007,623

Dividend Income 1,773,345 -

Net unrealised loss on investments (8,003,286) (575,415)

1,682,173 432,208

Other income

Fee income 16 12,187,417 12,571,105

Interest income 1,015,055 45,399

Realised foreign exchange gain/(loss) 32,743 (43,021)

Contribution income 15 - 2,763,185

Carried interest 2(g) - (2,763,185)

13,235,215 12,573,483

Operating expenses

Staff expenses 15 5,878,264 7,111,925

Office expenses 1,206,740 1,337,412

Professional services 1,060,309 2,426,714

Rent and utilities expenses 939,445 1,120,197

Travel expenses 449,495 492,167

Depreciation and loss on disposals 6 332,365 308,136

Financial expenses 19,416 30,987

9,886,034 12,827,538

Profit before management incentive scheme 5,031,354 178,153

Management incentive expense 2,515,677 -

Profit before income tax expense 2,515,677 178,153

Income tax expense 14 96,380 107,031

Profit for the year 2,419,297 71,122

Other comprehensive income

Foreign currency translation differences from foreign operations (81,368) 31,394

Total comprehensive income 2,337,929 102,516

Profit/(loss) for the year attributable to:

- Owners of the parent 2,438,914 155,739

- Minority interest (19,617) (84,617)

Total comprehensive income/(loss) attributable to:

- Owners of the parent 2,357,564 187,133

- Minority interest (19,617) (84,617)


Consolidated Statement of Comprehensive Income Year ended December 31, 2014 (stated in United States dollars)

35

8/18/2019 SC 2014 Digital

36/64

Consolidated Statement of Changes in Equity Year ended December 31, 2014 (stated in United States dollars)

Share Share Translation Retained Proposed Minoritycapital premium reserves earnings appropriations interests Total

December 31, 2012 64,483 78,565,516 (91,576) 2,540,467 2,500,000 63,542 83,642,432

Profit/(loss) for the year - - - 155,739 - (84,617) 71,122


Foreign currency translation differences - - 31,394 - - - 31,394

Total comprehensive income for the year - - 31,394 155,739 - (84,617) 102,516

Net issue of share capital (note 13) 250 249,750 - - - - 250,000

Repurchase of share capital (note 13) (5,000) (9,995,000) - - - - (10,000,000)

Dividends to owners Prior year proposed dividends paid - - - - (2,500,000) - (2,500,000)

Balance at December 31, 2013 59,733 68,820,266 (60,182) 2,696,206 - (21,075) 71,494,948

Profit/(loss) for the year - - - 2,438,914 - (19,617) 2,419,297


Foreign currency translation differences - - (81,368) - - - (81,368)

Total comprehensive income for the year - - (81,368) 2,438,914 - (19,617) 2,337,929

Acquisition of minority interest

holding in subsidiary (note 2 (l)) - - - (461,323) - 56,323 (405,000)

Net issue of share capital (note 13) 200 199,800 - - - 45,000 245,000

Dividends to owners

Proposed dividend - - - (2,500,000) 2,500,000 - -

Balance at December 31, 2014 59,933 69,020,066 (141,550) 2,173,797 2,500,000 60,631 73,672,877

Consolidated Equity per the consolidated statement of financial position is comprised of share capital, share premium and retained earnings in the amount of US$71,253,796 (2013: US$71,576,205)


6

8/18/2019 SC 2014 Digital

37/64

Consolidated Statement of Cash Flows Year ended December 31, 2014 (stated in United States dollars)

Note 2014 2013

Cash flow from operating activities

Profit for the year 2,419,297 71,122

Adjustment for:

Depreciation and loss on disposals 332,365 308,136

Income tax, net of tax paid (34,885) 31,394

Net realised gain on investments (7,912,114) (1,007,623)

Net unrealised loss on investments 8,003,286 575,415

Changes in operating assets and liabilities:

Amounts due from related parties 1,984,669 (503,483)Other assets (2,472,433) 119,656

Management incentive payable 2,515,677 (3,868,365)

Carried interest payable (2,763,185) 2,763,185

Accounts payable and accruals (747,209) (2,655,445)

1,325,468 (4,166,008)

Cash flows from investing activities

Purchase of investments (23,000,000) (4,000,000)

Proceeds from sale of investments 38,590,754 15,457,474

Purchase of minority interest in subsidiary (405,000) -

Net acquisition of property, plant and equipment (76,838) (906,334)

15,108,916 10,551,140

Cash flows from financing activities

Proceeds from issue of share capital 13 200,000 250,000

Common dividends paid - (2,500,000)

Repurchase of share capital 13 - (10,000,000)

200,000 (12,250,000)

Net increase/ (decrease) in cash and cash equivalents 16,634,384 (5,864,868)

Cash and cash equivalents at beginning of year 10,850,895 16,715,763

Cash and cash equivalents at end of year 27,485,279 10,850,895

Supplementary information on cash flows from operating activities:

Interest received 1,015,055 45,399

Dividends received 1,773,345 -


37

8/18/2019 SC 2014 Digital

38/64

Notes to Consolidated Financial Statements Year ended December 31, 2014 (stated in United States dollars)

1. Background information

Samena Capital (the “Company”) was incorporated in the Cayman Islands as an exempted company on February 18, 2008 under the

provisions of the Cayman Companies Law.

The Company is exempted from the requirement to obtain a license under the Securities and Investment Business Law (2004

Revision) in the Cayman Islands and is not subject to regulation by the Cayman Islands Monetary Authority.

These consolidated financial statements, which have been prepared for the year ending and as at December 31, 2014, comprise those

of the Company and its wholly owned subsidiaries, together referred to as “the Group”.

The Group is a principal investment group and engages in asset management, asset management consolidation, direct investments

and projects within a geographic focus on the SAMENA (the Sub-continent, Asia, Middle East, and North Africa) region.

The Company’s registered office is located at Ugland House, Grand Cayman, KY1-1104, P.O. Box 309, Cayman Islands.

As at December 31, 2014 the Company held three subsidiary Affiliated Investment Advisors, Samena Capital Management LLP

(“SCUK”), located in London authorised and regulated by the Financial Conduct Authority, Samena Capital Hong Kong (“SCHK”),

located in Hong Kong and licensed by the Securities Futures Commission and Samena Capital Investments Limited (“SCIL”), located in

the UAE and regulated by the Dubai Financial Services Authority. In addition, SCUK is licensed by the Securities and Exchange Board

of India to invest in India as an approved Foreign Institutional Investor.

As at December 31, 2014 the Company also held investments in investment management companies, Samena Investment

Management Limited (“SIML”), which is a Cayman Islands registered exempted company, and Samena Asia Managers Limited

(“SAM”), which is registered in the Brit ish Virgin Islands and jointly held by Samena Capital, RAM Active Investments S.A. (“RAM”)

and Reyl & Cie S.A. (“RC”). Included in these consolidated financial statements is the financial position and performance of Samena

India Credit Management Limited (“SICML”), which is a Cayman Islands registered exempted company and a consolidated subsidiary

of SIML.

8

8/18/2019 SC 2014 Digital

39/64


2. Significant accounting policies

The consolidated financial statements of the Group as at and for the year ended December 31, 2014 have been prepared in

accordance with International Financial Reporting Standards (“IFRS”) and interpretations adopted by the International Accounting

Standards Board (“IASB”). The accounting policies have been applied consistently by the Group. The significant accounting policies

adopted by the Group are as follows:

(a) Basis of measurement and presentation

The functional and presentation currency of the consolidated financial statements is the United States dollar and not the local

currency of the Cayman Islands reflecting the fact that the share capital is raised in United States dollars and the Group’s operations

are primarily conducted in United States dollars.

(b) Use of estimates and judgements

The preparation of these consolidated financial statements requires management to make judgements, estimates and assumptions

that affect the application of accounting policies and in accordance with IFRS the reported amounts of assets, liabilities and disclosure

of contingent assets and liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument.

These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore, cannot be

determined with precision. Changes in assumptions could significantly affect the estimates.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the

next financial year, as well as critical judgements in applying accounting policies that have the most significant effect on the amountsrecognised in the consolidated financial statements are included in notes 2(f), 4 and 5.

(c) Foreign currency transactions

Transactions in foreign currencies are translated into United States dollars at the exchange rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at the reporting date at the

foreign exchange rate ruling at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at

fair value are translated into United States dollars at the exchange rates ruling at the dates that the fair values are determined.

Foreign exchange differences arising on translation are recognised in the related consolidated statement of comprehensive income as

part of foreign currency translation differences from foreign operations.

The assets and liabilities of the subsidiaries of the Group whose functional currencies are stated in Hong Kong Dollars, British Poundsand United Arab Emirates Dirhams are translated from these currencies to United States Dollars at exchange rates at the reporting

date. Transactions of these subsidiaries are translated from these currencies to United States Dollars at the transaction date. Foreign

exchange differences are recognised directly within the translation reserves in equity.

(d) Basis of consolidation and investments in jointly controlled entities

Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly,

to govern the financial and operating polices of a company so as to obtain benefits from its activities. The financial statements of

subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control

ceases.

Intragroup balances and any unrealised gains or losses arising from intragroup transactions are eliminated in preparing the

consolidated financial statements.

The consolidated financial statements of the subsidiaries are prepared using accounting policies that are consistent with those of the

Company. Refer to note 10 for the list of subsidiaries controlled by the Company at year end.

39

8/18/2019 SC 2014 Digital

40/64


2. Significant accounting policies (continued)

(e) Business combinations

The acquisition of subsidiaries is accounted for using the acquisition method. The cost of acquisition is measured at the aggregate of

the fair values, at the date of exchange, of assets given, liabilities incurred or assumed. Any costs that are directly attributable to the

business combination are expensed in accordance with IFRS 3, Business Combinations.

(f) Financial instruments

(i) Classification

The Company classifies its financial assets and financial liabilities into the following categories:

Financial assets held at fair value through profit or loss

The Group has designated its investments in portfolio funds and equity investments into the financial assets at fair value through profit

or loss category.

The category of financial assets at fair value through profit or loss comprises financial instruments designated at fair value through

profit or loss upon initial recognition. These include trading instruments that the Group principally holds for the purpose of profit taking

in the form of investments in portfolio funds and equity investments.

Financial assets measured at amortised cost

Financial assets measured at amortised cost are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market.

Financial assets that are classified as financial assets measured at amortised cost include cash and cash equivalents, amounts due

from related parties and other assets.

Financial liabilities measured at amortised cost

Financial liabilities that are classified as financial liabilities measured at amortised cost include management incentive payable, carried

interest payable and accounts payable and accruals.

(ii) Recognition

Financial assets and liabilities at fair value through profit or loss are recognised initially on the trade date at which the Group becomes

a party to the contractual provisions of the instrument. Other financial assets and liabilities are recognised on the date they become

party to the contractual provisions of the instrument.

(iii) Fair value measurement

“Fair value” is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access

at that date.

Financial assets and financial liabilities at fair value through profit or loss are measured initially at fair value, with transaction costs

recognised in the consolidated statement of comprehensive income. Financial assets or financial liabilities not at fair value through

profit or loss are measured initially at fair value plus transaction costs that are directly attributable to its acquisition or issue.

Financial assets classified as loans and receivables, and financial liabilities other than those at fair value through profit or loss, are

measured at amortised cost using the effective interest method. The carrying value less impairment provision of other receivables and

payables are assumed to approximate fair value.

The Group recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the

change has occurred.

Refer to note 2(f)(viii) for the specific fair value measurement methods which have been applied.

0

8/18/2019 SC 2014 Digital

41/64



(f) Financial instruments (continued)

(iv) Amortised cost measurement

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured

at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any

difference between the initial amount recognised and the maturity amount, minus any reduction for impairment.

(v) Impairment

A financial asset not classified at fair value through profit or loss is assessed at each reporting date to determine whether there

is objective evidence of impairment. A financial asset or a group of financial assets is ‘impaired’ if there is objective evidence of

impairment as a result of one or more events that occurred after the initial recognition of the asset(s) and that loss event(s) had animpact on the estimated future cash flows of that asset(s) that can be estimated reliably.

Objective evidence that financial assets are impaired includes significant financial difficulty of the borrower or issuer, default or

delinquency by a borrower, restructuring of the amount due on terms that the Group would not otherwise consider, indications that a

borrower or issuer will enter bankruptcy, or adverse changes in the payment status of the borrowers.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying

amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses

are recognised in the consolidated statement of comprehensive income and reflected in an allowance account against receivables.

Interest on the impaired asset continues to be recognised. If an event occurring after the impairment was recognised causes the

amount of impairment loss to decrease, then the decrease in impairment loss is reversed through the consolidated statement of

comprehensive income.

(vi) Derecognition

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights

to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial

asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and

does not retain control of the financial asset.

On derecognition, of a financial asset, the difference between the carrying amount of the asset and the consideration received

is recognised as net realised gains in financial instruments at fair value through profit or loss in the consolidated statement of

comprehensive income. Any interest in such transferred financial assets that is created or retained by the Group is recognised as a

separate asset or liability.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

(vii) OffsettingFinancial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only

when, the Group has a legal right to offset the amounts and it intends either to settle on a net basis or to realise the asset and settle

the liability simultaneously.

Income and expenses are presented on a net basis for gains and losses from financial instruments at fair value through profit or loss

and foreign exchange gains and losses.

41

8/18/2019 SC 2014 Digital

42/64



(f) Financial instruments (continued)

(viii) Specific instruments

Cash and cash equivalents

Cash and cash equivalents consist of current accounts and fixed deposits both with an original maturity of three months or less.

Investments in portfolio funds

The fair value of investments in portfolio funds is taken as the audited net asset value per share for the funds with coterminous year

ends, if available. The unaudited net asset value per share as reported by the respective fund administrator is used for the funds

with non-coterminous year ends or where the audited net asset value per share is not available at the time of approval of these

consolidated financial statements. Due to the nature and investment strategy of certain funds, the Company holds these investments

at cost, being the recent transaction price, which management consider to be representative of fair value. Such investments are

categorised as Level 2 or 3 of the fair value hierarchy depending upon the level of observable inputs in their underlying valuations.

Equity investments

For equity investments where the markets are not active, management establish fair value using valuation techniques. Valuation

techniques include using recent arm’s length transactions between knowledgeable, willing parties (if available), reference to the

current fair value of other instruments that are substantially the same, discounted cash flow analyses, net asset value and price

earnings ratios using comparable entities for which observable information is available. The chosen valuation techniques are consistent

with accepted economic methodologies for pricing financial instruments. The models are forward looking and if forecasted events do

not occur, their values could be materially different. Equity investments are categorised as Level 3 of the fair value hierarchy.

(g) Revenue recognition

All income is recognised and included in revenue in the year earned. Refer to note 16 for a breakdown of fee income.

Arrangement and organisational fees

In recognition of their role in establishing certain investment vehicles, the Company is entitled to receive an arrangement or

organisational fee based on the capital commitments at the date of initial closing. Such fees are recognised by the Company on the

initial closing date.

Management fees

Management fees are calculated as a percentage of net assets under management based upon the contractual terms of investment

advisory and related agreements and recognised as earned as the related services are performed. These fees are generally receivable

quarterly in advance.

Carried interest and performance fees

Carried interest and performance fees are accrued when crystallised by the respective fund under management, or when certain

waterfall conditions are met.

Advisory fees

Advisory fees are recognised on an accruals basis using a cost plus margin in accordance with the respective investment advisory

agreements.

2

8/18/2019 SC 2014 Digital

43/64


(g) Revenue recognition (continued)

Carried interest

Samena General Partner I Limited (the “GPI”), and Samena General Partner II Limited (the “GPII”), collectively known as the “GPs”,

which have been consolidated in these consolidated financial statements, are entitled to receive a share of the realised profits of

Samena Special Situations Fund, L.P. and Samena Special Situations Fund II, L.P., respectively, (the “carried interest”) for which each

act as General Partner and by way of allocation of partnership interests based on the distribution of net assets as set out in the

relevant Limited Partnership Agreements (“LPA”). Management has estimated revenue for the year from carried interest of US$nil

(2013: US$nil). Carried interest is recorded as revenue earned by the GPs in any financial year prior to termination of the relevant

Samena Special Situations Fund when it is virtually certain the amount will be distributed to the GPs at the end of the life of the

relevant Samena Special Situations Fund. The carried interest is considered to be a virtually certain amount only when a reliable

determination of the investment results can be made based on the interest, dividends and realised profits received from the specific

Samena Special Situations Funds portfolio of investments and distributions to investors. Management’s estimate includes the results

of investment operations up to year end. The requirements of IAS 10 events after the year ended December 31, 2014 are considered

up to the date of approval of these consolidated financial statements in evaluation of any adverse effects on management’s estimate.

If the GPs receive any of the above distributions during the life of the relevant Samena Special Situations Fund and the amount

available for distribution upon termination of the Samena Special Situations Fund is insufficient to satisfy the distribution of net assets

criteria set out in the LPA, the GPs will be obligated to return these respective distributions in a timely manner, using previously paid

carried interest distributions during the life of the Samena Special Situations Fund. In this event, the Group will recognise an expense

and a corresponding liability which will be representative of this obligation.

Based on the status of the waterfall conditions outlined in the LPA of Samena Special Situations Fund, L.P. (“SSSFI”), during the

year ended December 31, 2011, US$10,820,637 of previously accrued carr ied interest was transferred from Capital Account of GPIto the Capital Account of the Limited Partners, resulting in a negative capital balance to GPI for previously paid carried interest of

US$2,763,185. As at December 31, 2013, due to the performance outlook of SSSFI in relation to the waterfall conditions, the Group

recognised a US$2,763,185 expense and corresponding liability relating to the return of previously received carried interest. During

2014, the amount of US$2,763,185 was paid back to SSSFI. No further amounts were accrued by the Company during the year.

(h) Interest income

Interest income and interest expense are recognised on an accruals basis in line with the contractual terms. Interest income includes

amortisation and accretion of any discount or premium, transaction costs or differences between the initial amount paid for corporate

bonds and the maturity amount calculated on an effective interest rate method. Also included is interest earned on cash and cash

equivalents and coupons received on corporate bonds.

(i) Expenses

All expenses are recognised in the consolidated statement of comprehensive income on an accrual basis. Transaction costs incurred

on the disposal of investments are deducted from the proceeds on sale.

(j) axation

There are no taxes on corporate income in the Cayman Islands. In accordance with the provisions of the Tax Concessions Law, the

Company has received an undertaking from the Governor in Cabinet of the Cayman Islands exempting it from all local taxation on

future profits, income or gains until May 27, 2028 should such taxes be enacted.

Taxation on income from foreign entities is provided for in accordance with the fiscal regulations of the countries in which the

respective Group entities operate. Deferred taxation is provided for using the liability method on all temporary differences calculated

at the rate at which it is expected to be payable. Deferred tax assets are recognised only if recovery is probable. Refer to note 14 for

discussions on taxation incurred by the Group.


43

8/18/2019 SC 2014 Digital

44/64



(k) Leased assets

Leases are classified as operating leases where the Company and its subsidiaries do not assume substantially all the risks and

rewards of ownership of the asset. Assets leased subject to the terms of an operating lease are not recognised in the consolidated

statement of financial position.

Payments made under operating leases are recognised in the consolidated statement of comprehensive income on a straight line

basis over the term of the lease.

(l) Goodwill

Goodwill that arises upon the acquisition of subsidiaries is included as a separate item in the consolidated statement of financialposition.

Goodwill represents the excess of the cost of the acquisitions over the Group’s interest in the fair value of the identifiable assets,

liabilities and contingent liabilities of the acquiree. When the excess is negative (negative goodwill), it is recognised immediately in the

consolidated statement of comprehensive income.

On April 30, 2012 the Company entered into a Share Purchase and Joint Venture Termination Agreement with ASM under which the

Company agreed to repurchase 40% of SIML’s issued share capital from ASM, for a consideration of US$508,000. The Company

adopted IFRS 3, Business Combinations, and consolidated its financial performance and position, in these consolidated financial

statements from the date of acquisition.

On the acquisition date, goodwill of US$3,858,418 was recognised.

In May 2014, the Company acquired an additional 9% of SIML for US$405,000. This acquisition resulted in SIML becoming a 100%

owned subsidiary of the Company. The US$405,000 was recorded in shareholders equity in accordance with IFRS 10. Refer to the

consolidated statement of changes in equity for further details.

Subsequent

sc 2014 digital

Documents