Board of Directors’ Report to The Annual General Assembly Meeting SIIL 2011 Performance and Future Scope
On behalf of the Board of Directors of Salam International Investment Limited (SIIL) and myself, I wish to welcome you to this meeting.
I would like also to extend my warmest welcome to the representatives of the Ministry of Business and Trade - the Department of Companies Control, as well as to the attendants from KPMG, the Company’s financial Auditors.
Thank you very much indeed for attending this meeting and allow me to present you as hereafter the Thirteenth Annual Report with regard to the Company’s activities, performance and financial results for the year 2011 together with its future scope as we envision it.
First – The Company’s activities
All along 2011, the Company has maintained its cautious risk assessment policy and investment strategy, which is directed towards selecting investment opportunities that complement the company’s and its subsidiaries’ activities.
Moreover, we aim to exploit the growth opportunities offered by new activities and fields, which would create better prospects and enhance the Company’s diversified operations and geographic distribution.
SIIL was incontestably able to maintain its operations sound level in terms of revenues, cash flow as well as in employing the greatest possible advantage of the productive forces for a higher performance achievement.
In pursuance of the acquisition up to 80% of Salam Bounian capital duly approved by your General Assembly, SIIL has so far purchased 8 million shares during 2011, thus raising its stake In SB’s capital from 40% to 54.28%.
Risks on the short run about acquiring the above additional shares are worth noting. This transaction could further affect SIIL cash flow for the coming two years. However, we believe that Salam Bounian Projects potential will mitigate these risks and generate cash flow sufficient to cover the expenses and produce profit on the long run.
Second – The Company’s future scope
The Company’s plans focus on the opportunities emerging from the development projects in connection with Qatar national vision 2030, of which the essential guiding principles were laid down by His Highness the Emir, to provide the ultimate framework for future development.
We will capitalize as well on the unprecedented GDP growth induced by Mundial 2022 projects within the framework of diversification, complementarity and geographic distribution. Doha, becoming a fundamental destination for important business activities, international sports events crowned by the World Cup 2022, will witness grand and ambitious national projects for the modernization and development of the infrastructure. We will leave no stone unturned to take advantage of these motivations, new expertise and technology within the coming decade.
For keeping with SIIL legacy of institutional performance, the Company will carry on implementing its long term corporate governance and institutional discipline processes. The company will continue as well, during 2012, living up to its discerned social and economic interaction through its contribution to the social welfare, notwithstanding the allocation of 2.5% of 2011 net profit to support social, educational and charitable activities, in accordance with the law No 13, enacted in 2008.
Third – Persistence of the Company’s share trading suspension
During the General Assembly held on February 28/2011, we have informed you about the legal proceedings instituted against the Company by one of the shareholders requesting the invalidation of the executive implementation measures with regard to 2002 and 2005 mergers. This decision did not challenge the rightfulness of the General Assembly resolutions in form or content.
Qatar Financial Markets authorities suspended the Company’s shares trading as from October 31/2011 despite all preventive measures taken in avoidance of this suspension; namely revealing the verdict’s content to the General Assembly and receiving a copy of the same. QFMA announced the suspension decision without declaring any legal justifications or judicial basis. This suspension has persisted even though we have informed QFMA about your acknowledgement of the verdict’s causes and content and our provisional plan to abide by the court final judgement, as well as your request to urge the shares trading restoration.
Following your resolution to empower the Board of Directors to take all necessary measures for the protection of the Company and shareholders’ interest, we have initiated all due legal proceedings against QFMA through a competent lawyer.
Fourth – the Company’s Financial Results
The consolidated financial statement for the year ended on 31/12/2011, showed a net profit tantamount to QR 159.6 Million, out of which QR 158.9 are SIIL shareholders’ rights. These profits are net after deducting all provisions for some Company’s investments eventual impairment, as well as the incentives and bonuses for the management and the Board members. Consequently, earnings per share reached QR 1.53.
Further to the Company’s conservative financial policy, all relevant real estate investments have been recorded at book value . The Company did not register the growth achieved by those assets in its books. Related clarifications are stated in the financial statements footnotes. This practice will spare the Company’s capital losses in case of assets impairment.
Based on the above-stated financial results, the Board of Directors recommends your esteemed Assembly to approve 20% profit distribution for the year 2011, to the Company’s shareholders, as per following scheme:
• 10% worth of cash dividends
• 10% of bonus shares out of the Company’s paid up capital
A part of the previous years’ profit having been capitalized.
On behalf of the Board of Directors, I avail myself of this opportunity to express my greatest gratitude to H.H the Emir, Sheikh Hamad Bin Khalifa Al Thani, H.H the Heir Apparent, Sheikh Tamim Bin Hamad Al Thani and H.H the Prime Minister, Minister of Foreign Affairs sheikh Hamad Bin Jassim Al Thani, for their continuous support in the development of our beloved country, Qatar.
Moreover, I wish to extend my sincere thanks to Their Excellencies, the Minister of Business and Trade, the secretary and the Undersecretary and all the staff in the Department of Companies Control, for their unfaltering efforts in backing the private sector with all its institutions and the economic development in our beloved country, Qatar.
Many thanks to the Board members and all the Company’s employees, for their sincere efforts in the best interest of the Company’s and its shareholders.