your investment partner - amarfinance

Your Investment Partner

Amar Finance and Leasing CompanyKuwati Closed Shareholding Company

Operates in accordance with Islamic Shari’aDate of Establishment: April, 2004

Paid-up Capital: K.D 20 Million

Sharq Area, Ahmed Al-Jaber St., Al-Bodoor TowerP.O.Box: 28776 Safat,13148 Kuwait

Tel.: +965 1826050Fax: +965 22473507

Website: www.amarfinance.com

Your Investment Partner

@amarfinance1@amarfinancekw www.facebook.com/amar.finance

HH SheikhSabah Al-Ahmad Al-Jaber Al-Sabah

Emir of State of Kuwait

HH SheikhNawaf Al-Ahmad Al-Jaber Al-Sabah

Crown Prince of State of Kuwait

Board Members

Shari’a & Fatwa Panel Members

Board of Directors’ Annual Report of Amar Finance and Leasing Co. activities as at 31 / 12 / 2014

Consolidated Financial Statements as at 31st December, 2014

The Shari’a Report

Brief Information about Amar Finance and Leasing Company & Its Accomplishments

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Amar Committees

Board Member & CEOExecutive Member

Board MemberNon Executive Member



Hamad Mohamed Al-Saad

AbdulFatah Mohamed-Rafie Marafie

Talal Sultan Ali AlShehab

Abdullah Ali Abdullah Alsane

Chairman Yousuf Abdulatif Ali AlShaya

Vice ChairmanNon Executive Member Bashar Naser Altuwaijri

Dr. Abdul Aziz Al Qassar

Dr. Issa Zaki Issa

Dr. Ali Ibrahim Al Rashed

Chairman of the Shari’a Committee

Shari’a Committee Member

Shari’a Committee Member

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Respected shareholders,Assalamu Alaikum Wa Rahmatullahi Wa BarakatuhI am pleased to welcome you on behalf of the members of the Board of Directors to the General Assembly Meeting for the financial year ended December 31, 2014 , and to present the achievements and financial performance of Amar Finance and Leasing Company.

2014 had slow economy during the last quarter of the year causing panic led by the sharp drop of oil prices exceeding 46% for several reasons, the most important of which was the slow global growth and the consequent decline in demand for oil. Global stock markets also declined, respectively. Gulf Countries stock markets were not an exception; the Kuwaiti Stock Exchange fell during the fourth quarter of 2014 by 13.4 % and the Saudi Arabian Stock market fell by 2.4 %. However, the decline in the fourth quarter of 2014 had less impact on Qatar, Bahrain and Dubai Stock Markets as they closed with an increase of 18.4 % and 14.2 % and 12% respectively.

On the other hand, it is expected that the economy will witness deceleration during 2015 because of lower oil prices which represents the main revenue for the state and inevitably will result in the reduction of state’s revenues.

The financial position of the company during 2014 can be illustrated as follows:

Amar financial results for 2014Consolidated Statement of income:The company succeeded in making a net profit of KD 249,185 equivalent to 1.3 fils per share versus a profit of KD 1,782,922 equivalent to 9.1 fils per share for the year 2013.

Revenue amounted to KD 1,458,307 (KD 2,521,059 for 2013), while expenditures amounted to KD 1,200,122 (KD 602,831 during 2013). The reasons behind the increased expenditure can be attributed to additional provisions for impairment of loss on financial assets available for sale in addition to the decline in bad debts collection from the finance portfolio.

Consolidated Statement of Comprehensive Income:As a result of the turmoil in the global and local markets during the last quarter of 2014, other comprehensive revenues dropped and recorded a loss of KD 314,788 (compared to a profit of KD 464,666 during 2013).

Assets and liabilities : -Assets amounted to KD 24,177,414 with a decrease of 12% ( KD 27,318,721 during the year 2013). On the other hand, Amar Liabilities recorded KD 2,026,448 with a significant drop of 50 % (KD 4,073,938 during 2013). The drop in liabilities came in line with management continued approach to reduce its liabilities to preserve its credit reputation among crediting institutions.

Share holders EquityTotal equity amounted to KD 22,151,166 in December 2014, declining by 5% ( KD 23,244,783 during 2013). The book value of the share reached 0.113 fils (119 fils during 2013) as a result of distributing 5% cash dividend which was approved by the General Assembly for 2013 profits.

Amar also continued to support its share in Kuwait Stock Exchange, as a result, Amar treasury shares amounted to 2.4% ( 1.9% during 2013 ).

In light of above findings, the Board of Directors recommended not to distribute dividends for 2014 nor to distribute remuneration for Amar Board of Directors for this year as well.

Now, We will start review a summary of the most important achievements of the various departments of Amar:

Investment Dept.:Amar performed careful study of local and Gulf markets, and in the light of this study Amar created its own three Islamic indices ( for Saudi, Kuwaiti and Gulf markets) . Amar investment in above indices had positive results as these indices continued to achieve higher performance results than the performance of Islamic shares Indices; where Kuwaiti Market companies shares Index recorded a decrease of 13.4 % at the end of 2014, and the Islamic companies shares Index fell by 8.4 % . On the other hand, AMAR KSE SHARI’A Index fell by 4.6 % only.

Amar applied a new business strategy in the field of investment; to invest in the capital of small companies, especially vocational ones.

Amar currently owns its own diversified real estate portfolio in terms of sector and location which consists of six properties with a total value of KD 17,065,000 at the end of 2014.

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However, as a result of the decline in oil prices and expectations of continued drop for several reasons, most sectors will be affected negatively in light of the anticipated government concentration on vital projects only. Amar drew its strategy as to seize local and international investment opportunities with higher revenues. Moreover, Amar is studying institutional financing options to diversify its income.

Amar is actively working to diversify its income through offering a variety of real estate services including, but not limited to, participation in real estate auctions on behalf of clients , and management of Amar and clients’ real estate properties with the help of Amar subsidiaries .

Commercial Finance:Amar acts as an agent for investors and arranges co-financing for a group of investors to fund a specific project, and offers continuous funding for the equipment sector through leasing to ensure continuous movement of equipment; entry and exit. Amar also continues to provide funding services through leasing and Istisna’a for investment, commercial and industrial real estate properties.

Amar will continue pursuing its conservative approach in terms of commercial financing in parallel with its attempts to strengthen its financing portfolio through funding income-generating real estate properties and by focusing on commercial buildings, apartments , shops, industrial plots along with Amar assessment of the local market to identify income-producing real estate investment opportunities.

Consultancy services: Amar Finance and Leasing company has launched the following website page (www.menaipo.com) for companies that will be listed in Middle East markets (IPO). This website is the first of its kind as it allows access to investors to many details related to companies that will be listed in public markets.

Moreover, Amar continues to provide its advisory services, for example, but not limited to, the preparation of budgets, feasibility studies, corporate restructuring and the issuance of Sukuk in addition to the development of financial products compliant with Islamic Shari’a.

In addition to the above, « Amar « has updated its website in order to keep track with CMA requirements and is doing its best to apply all CMA governance rules.

Amare believes that its role should go beyond the limits of its economic role to contributing to community development as follows:

• Amar attracts national labor in collaboration with Manpower and Government Restructuring Program.

• The company is keen to participate in the development of national potentials through offering summer field training to students in collaboration with Manpower and Government Restructuring Program.

• Pursuant to its commitment to raise community awareness with respect to real estate and real estate investment , Amar is distributing real estate reports free of charge in addition to publishing the same on its Web site to be accessible to everyone .

• Amar offers its employees and clients the right to express their opinions and the right to complain and protects their rights and the confidentiality of information through forms developed by the company for this purpose .

Finally, Amar Board of Directors seizes this opportunity to confirm and undertake the precision and accuracy of the financial statements that are provided to external auditors in order to carry out the tasks entrusted to them to the fullest. Moreover, the Board undertakes the accuracy and integrity of all financial statements and reports related to company’s activities, and confirms that all Amar’s transactions are performed in accordance with the provisions of Islamic Shari’a and are approved by the company’s Shari’a Supervisory Board.

Amar is doing its best to achieve the required successes that are in the interest of our shareholders. Our deepest thanks and appreciation are addressed to our shareholders, for their support and cooperation with the company since its establishment.

We also take this opportunity to pray to Almighty Allah to guide His Highness our Amir Sheikh / Sabah Al-Ahmad Al-Sabah and his Crown Prince Sheikh/ Nawaf Al-Ahmad Al-Sabah to garner greater success and achieve greater prosperity and growth for our beloved country Kuwait.

Thank you.

Chairman

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Amar Finance & Leasing Company K.S.C.P. and its Subsidiaries

CONSOLIDATED STATEMENT OF INCOMEYear ended 31 december 2014

• The attached notes 1 to 23 form part of these consolidated financial statement

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEYear ended 31 december 2014

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CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAT 31 december 2014

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITYYear ended 31 december 2014

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CONSOLIDATED STATEMENT OF CASH FLOWSYear ended 31 december 2014

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTAt 31 december 2014

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAt 31 december 2014

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Amar Finance & Leasing Company K.S.C (Closed) and its Subsidiaries


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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSat 31 december 2014

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSat 31 december 2014

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS At 31 december 2014

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Audit & Risk CommitteeHead of Committee: Bashar Naser AltuwaijriCommittee Members: Talal Sultan Ali AlShehab - Abdullah Ali Abdullah AlsaneSecretary : Hamad Mohamed Al-SaadNo. of Meetings : 4Tasks:

• Review financial statements before submission to the Board of Directors and provide suggestions and

recommendations.

• Recommend to the Board of Directors the appointment or re- appointment of external auditors or their

replacement in addition to determining their fees .

• Follow-up the work of the external auditors to assure that auditing is the only service they are providing

for the company

• Study the applied accounting policies and provide the Board of Directors with suggestions and

recommendations thereon.

• Assess the efficiency of the internal control systems applied within the company and prepare a report

containing the Committee’s opinions and recommendations.

• Review audit plans proposed by the internal auditor and provide comments

• Prepare and review strategies and risk management policies prior to obtaining the Board of Directors’

approval, follow up on their implementation and make sure that they are suitable for the nature of

company activity.

• Ensure the availability of adequate resources and systems to manage the risks.

• Assist the Board of Directors to identify and assess the acceptable levels of risk at the company, and

make sure not to exceed these levels after being approved by the Board of Directors.

• Review the Risk Management Dept. organizational structure and provide recommendations thereon

prior to obtaining Board of Directors’ approval .

• Ensure the independence of the risk management Dept. staff from activities that might expose the

Company to risk.

• Prepare periodic reports on the nature of risks faced by the company and obtain the Board of

Directors› approval thereon.

• Review the issues raised by the Audit Committee that are related or might affect the Risk Management

Dept. in the company.

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Nominations & Remuneration CommitteeHead of Committee : Abdul Fatah Mohamed-Rafie Marafi Committee Members :Bashar Naser Al-Tuwaijri - Talal Sultan Ali AlShehab Secretary : Hamad Mohamed Al-Saad

No. of Meetings : 1Tasks :

• To recommend the nomination and re-nomination of the Board of Directors, Executive Management and Board Committees, taking into account the rules of integrity and efficiency contained within CMA instructions, the number of attendance and effective participation.• Develop a clear policy to reward Board members and senior executives.• Identify the different segments of rewards.• Annual review of the remuneration policy and assessment of its effectiveness in attracting manpower and achieving goals.• Prepare annual report detailing all the bonuses granted to Board members and Executive Management

Corporate Governance committeeHead of Committee : Yousif Abdullatif Al-ShayaaCommittee Members : AbdulFatah Mohamed-Rafie Marafi - Talal Sultan Ali AlShehabSecretary : Hamad Mohamed Al-SaadNo. of Meetings : 2Tasks

• Ensure that the standards and applications of governance that are approved by the Board of Directors are consistent with CMA corporate governance regulations requirements.• Supervise the preparation , application, review and update of governance policy.• Coordinate with the Audit Committee to ensure commitment to governance policy.• Follow-up the performance of the Board of Directors and executive management members in accordance with Key Performance Indicators (KPIs).• Follow up any issues related to governance and prepare annual report of the results reached.• Prepare annual report that includes the requirements and procedures for completion of corporate governance rules and reveals the extent of the company’s adherence thereto. This report should be included in the company’s annual activity report.• Governance Committee will hold regular meetings at least twice annually and whenever deemed necessary. The minutes of its meetings should be recorded .

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Amar Finance and Leasing Company (K.S.C.C.) was established in 2004 as a Shari’a Compliant Investment Company, with a focus on real estate investments; real estate financing; and providing investment and corporate finance services. With a paid up capital of KD 20 million, Amar has become one of the leading financial institutions in Kuwait. The success of Amar is mainly due to the joint efforts of a group of leading Kuwaiti and regional financial institutions; and of a group of individual investors.

Amar spared no efforts since inception to be innovative in structuring financial transactions and products, in a bid to occupy a pioneering position in the market and stand out as a leader in the field of real estate financing and Islamic investment services. Amar conducts its business through a professional team of highly talented and specialized individuals. Moreover, Amar’s ability to tap into the capital markets, allows it to finance large and complex transactions, requiring strong placement power and sophisticated structuring capabilities.

Amar offers a wide variety of activities, services and Islamic financing solutions to its customers:

FINANCE

Islamic Finance

Amar offers suitable Islamic financing opportunities, specializing in real estate financing, through a team of highly-skilled and talented individuals.

Amar offers a wide variety of activities, services and Islamic financing solutions to its customers, for trading and for investing in real estate, in addition to financing small and medium-sized projects and companies Amar’s Islamic Finance offerings can broadly be categorized into:

A. Operational Ijara B. Lease to Own C. Murabaha D. Musharaka E. Investment Wakala

Structured Finance

Amar financially engineers every level of the financing transaction to provide its clients with maximum financial flexibility. Amar offers structuring options such as flexible prepayments and multiclass financing. Amar also specializes in capital placement.

Real Estate Project Finance (Istisnaa›)

Amar offers a special financing mode “ Istisnaa’ “ for financing construction projects.

INVESTMENT

Investment Placement

Through Amar’s investment placement team, investors have immediate access to highly competitive Islamic financing resources for real estate acquisition and real estate development.

Real Estate Investment Services

Amar is involved in the purchase, ownership, management, rental and/or sale of real estate for itself and on behalf of its clients. Amar invests in a diversified range of income-producing property types, for itself and on behalf of clients. Amar is also actively involved in real estate development activities, such as renovation and re-lease of existing buildings; purchase of vacant land and the subsequent sale of improved land or parcels.

Islamic Index Linked Investments

Amar provides its clients the opportunity to invest in various systematic indices that select the top Shari’a stocks in a particular country/ region, based purely on fundamental factors. The objective of the indices is to capture attractive yields by selecting stocks that have fundamentally outranked their peers in the targeted market(s).

Amar Finance & Leasing Company

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AMAR KSE SHARI’A TOP-15 INDEX

Is a systematic non-discretionary custom index that selects the top-15 Shari’a stocks from the Kuwait Stock Exchange, based purely on fundamental factors – such as revenues and net profit. Without placing any sector limits and with limits on exposure to a single stock, the index selects a basket of stocks which has historically out-performed most benchmark indices.

AMAR KSA SHARI’A TOP-20 INDEX

Is a systematic non-discretionary custom index that selects the top-20 Shari’a stocks from the Tadawul Stock Exchange, based purely on fundamental factors – such as revenues and net profit, in addition to selection of distinguished stocks.

AMAR GCC SHARI’A TOP-20 INDEX

Is a systematic non-discretionary custom index that selects the top-20 Shari’a stocks from the GCC Stock Exchanges, based purely on fundamental factors – such as revenues and net profit and any other factor that indicates the superiority of specific stocks..

Other Investment Services:

Amar can also provide other investment services to its clients, subject to prior approval from Capital Markets Authority (CMA) in Kuwait, such as:

1. Establishing and Managing Investments Funds 2. Custody Services 3. Investment Supervision

CONSULTING

Business Valuations

Amar assists its clients in estimating the economic value of an owner’s interest in a business, by determining the price they are willing to pay or receive for a business. Amar determines the fair value of an asset or company equity by applying the most recognized and applicable valuation methods and approaches.

Business valuations are required for various purposes, such as for the disposal of an equity stake in a company; introduction of a new shareholder/ partner into a company; acquisition of the assets or shares of a potential target; merger or acquisition deals; restructuring analysis; spinoffs; debt financing; initial public offerings; and for other related business needs.

Budgeting & Planning

For a business to grow and survive in today›s dynamic environment where profit margins are squeezed and businesses are forced to operate with lower costs, budgeting and forecasting are important financial disciplines for business success. The challenge lies not only in drafting an articulate budget, but also in operating within the constraints of the budget, to generate income. Amar assists its clients in setting-out the financial expectations of the business, and therefore guides in decision-making and in predicting business results.

Real Estate Advisory Services

Amar offers various advisory services to its clients, including: site selection, market analysis, financial feasibility analysis and investment analysis. Our services include: Preliminary Financial Analysis, In-Depth Financial Review, Operations Review, Renovation Strategies, Financial Projections and preparation of feasibility reports

Industry Research and Market Reports

Amar assists its clients in understanding the market size and the competitors, in drafting business plans and in trading, transactional and operational benchmarking.

Amar provides market studies across a wide range of sectors to deliver comprehensive and accurate information. Amar analyzes the market to provide an in-depth analysis of various factors, such as: suppliers, competition, buyers, inventory, margins, regulations, etc.

Other Consulting Services:

Amar provides to its clients other line of services that is subject to prior approval from Kuwait capital markets authority such services include:

1. Equity Capital Markets: Includes Equity Public/Private Placements and Capital increase arrangements

2. Debt Capital Markets: Sukuk Issues and arrangements and providing Islamic Finance Solutions

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A distinctive tower overlooking Beirut Street in Hawalli. It consists of a shopping mall with several shops distributed between basement, ground, mezzanine and first floors. It is made of 6 floors each of which contains two multiple activities offices. The complex is surrounded from the front and back with large paved areas, which provide sufficient parking space. Among the most famous shops in the complex : Mughal Mahal Restaurant, VIP Centre and Al-Aman Exchange.

An 855 square meters investment property under construction, situated on 3 streets and consists of ten floors each of which has three -2 bedroom- apartments in addition to a shop located on the ground floor. This real estate consists as well of a basement for car parking. The completion of the project is anticipated to take place on February 2016.

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Lulu Al Watan Complex

Fahaheel Real Estate

The property is located in Qibla, block 3 near Al Mubarakiya; a promising business area which is considered one of the most important areas in Kuwait City. The property is surrounded by a lot of yards that are used as car parking. It consists of two floors and a basement used as commercial offices and shops. Amar is currently studying the renovation of this building in line with the development of the surrounding area.

This property is located on a street, a passage and a back yard. It is one of the few real estates classified as investment and commercial property as it comprises residential apartments as well as commercial shops. Renovation of this real estate has been completed. It is surrounded by many public open areas that are used as car parking.

Other Real EstatesAmar owns two other real estates that are still under registration and development.

Qibla Real Estate

Hawalli, Block 35

your investment partner - amarfinance

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