KUWAIT: Al-Safat Investment Company Chairman of the Board Abdullah Hamad Al-Terkait (third left) addresses the ordinary general assembly meeting yesterday. —Photo by Yasser Al-Zayyat

KUWAIT: Al-Safat Investment Company held its ordinary General Assembly yesterday to approve its balance-sheet for the year ending Dec 31, 2015 and elect a new board of directors for the next three years. Chairman of the Board Abdullah Hamad Al-Terkait presided over the meeting and welcomed shareholders and attendees. He thanked members of the former board of directors and the executive and financial management for the efforts they exerted in the interests of the company and the rights of its shareholders.

The chairman began the meeting by discussing the agenda and reading the board of directors' report, through which he said Al-Safat Investment Company, despite the difficulties and challenges it faced, witnessed several developments in 2015, resulting in becoming profitable after several years of losses, apart from the growth of the company as well as its revenues, it succeeded in bringing down its general and administrative expenses.

The chairman noted the role of the board in managing the company through working jointly and independently, and giving enough time to carry out its responsibilities with good intentions and absolute dedication to the interests of the company and its shareholders. The company's board of directors looks positively towards the future through building a strong professional entity in order to increase returns to the shareholders. Terkait promised to continue the continuous contacts with shareholders in total transparency and committed to creating a sustainable work model that supports development and growth of the company as well as make profits.

Terkait said the tangible improvement in results, and the company's financial indicators, were due to Almighty Allah's guidance, then the efforts of the board of directors and the executive management team, as well as the result of approving a comprehensive strategic plan to rewrite the company's strategy and work model. The new strategy of Al-Safat Investment Company includes a clear program for the strategic transformation and the plan of restructuring and development of the company's activities, as well as its internal organizational and operational environment.

Work has begun on restructuring its satellite companies and concentrating on improving their status towards achieving sustainable growth and restructuring the company's investments portfolio, and exit from investments that are outside the field of these strategic sectors at the right time for the best returns, while using the income resulting from exiting these investments in building new investment centers and take over majority shares of satellite companies that have operational revenues and work towards accelerating the pace of growth in them.

Terkait presented the financial results of the company as of Dec 31, 2015, and pointed to the return of Al-Safat Investment Company following hard work and following years of problems and difficulties that caused many losses, to making profits for the financial year ending Dec 2015 of KD 1,875,021, which is equivalent to 7.31 fils per share, compared to a loss of KD 10,278,616, equivalent to 40.07 fils per share for the fiscal year ending in Dec 2014. The total company assets as of Dec 31, 2015 reached KD 58.9 million compared to KD 63.8 million on Dec 31, 2014.

Shareholders' equity reached KD 33.0 million, compared to KD 31.8 million on Dec 31. 2014, as the book value of a share reached 128.2 fils compared with 41.1 fils per share on Dec 31, 2014. Total company debts as of Dec 31, 2015 stood at KD 25.2 million compared to KD 31.2 million as of Dec 31, 2014. He explained that the declared company profits of KD 1,875,021 include losses due to reduction of investment values of KD 1,323,311.

The amount the company owes to a credit agency reached KD 21.1 million as of Dec 31, 2015 until the issuance of the report, and this represents the existing agency with Qatar National Bank. Terkait explained in detail that the investment agency contract dated 26/11/2007 between the company and Qatar National Bank, and the resulting legal dispute with regards to liquidating the agency contract and the legal conditioning of its contracts, which resulted in a verdict from the court of first instance in 2013 of rejecting the lawsuit.

Then an appeals ruling was issued in 2016 with correct legal conditioning by considering it as an investment agency, and the ruling of first instance was nullified, but it wrongly applied it as a relation of creditor and debtor, and ordered the company to return the agency's original amount plus 12 percent interest. As this ruling was in contravention of the law and similar cassation rulings, and the conditions and rules of the investment agency, this prompted the company to appeal the ruling at the cassation court (411, 408, 416 / 2016). The court ruled on April 6, 2016 to stop enforcement of the previous appeals ruling issued on Jan 27, 2016 until the appeal is decided, and evidence on the correctness of this opinion is that the court found the reasons for the appeal are serious, and that the efforts of the company management to deal with this issue in a way that safeguards shareholders' rights are known to all.

Terkait said the company has prepared a future strategy that relies on having a supervisory mechanism within investment operations and is working on deciding promising and available investment opportunities in various sectors, and boosting the value of current company investments, as well as organizing and redistributing its capital towards investments and new acquisition operations both locally and regionally through the study and selection of suitable opportunities.

Al-Safat Investment Company is keen to be a strong investor through its future investments in a way that guarantees reaching its vision through the strategy used in managing its agencies and the way of supporting its management team, and concentrate on the core growth and the sectors of value, in addition to completing the restructuring of its satellite companies. Terkait spoke about the reduction of the company capital, adding that he is dealing with the last obstacle the company faced, and working towards overcoming the past period.

An extraordinary meeting was held on May 11, 2016 during which the accumulated losses of KD 52,133,824 were written off as per the latest approved financial statements on of Dec 31, 2014, by reducing the company capital to become KD 25,693,940, which reflects positively on the capital structure of the company and helps it to grow through investment in new projects that make enough profits to meet the shareholders' ambitions in increasing the shareholders' rights and returns, as well as achieve sustainability in growth, and search for rewarding investment opportunities that agree with the company's financial abilities.

In conclusion of the board of directors report, Terkait spoke about the company's final licensing at the Capital Markets Authority, as he said Al-Safat Investment Company received a final license for three years on April 21, 2016 by the CMA to engage in stock market activities, which means the company is committed to implementing all the laws and executive rules issued by the supervisory bodies, especially CMA.

Terkait then read out the governance and rewards reports, followed by the reports of auditors and the sharia supervision department and approved them and then the financial statements for the year ending on Dec 31, 2015 were approved by the shareholders. A new board of directors was elected for a new three-year term comprising seven members after receiving the CMA's approval of their nomination. The auditors and members of the sharia supervisory committee were reappointed for one year that ends on Dec 31, 2016.

Terkait thanked the supervisory bodies of Kuwait, particularly the Ministry of Commerce and Industry and CMA for their continued efforts and cooperation for the interest of the company, and wished the new board of directors more success in leading and managing the company. The new board held a meeting during which it elected Terkait as Chairman and Fahd Abdul Rahman Al-Mukhaizim as Vice-Chairman.