Agenda Point 7 Details
Approval of the related party transactions that took place during the fiscal year ended 31/12/2015 and to license them for the coming year. The Company follows in these transactions the same procedures as with other non- related parties. These transactions are with:
1- Saudi Home Loans "SHL"
In the ordinary course of business, the Company enters into transactions with Saudi Home Loans "SHL". SHL is a related party and the Company owns a 15% equity stake equivalent to 30 million shares out of 200 million issued shares. The common Board members between SHL and Dar Al-Arkan are namely: Mr. Yusuf Abdullah Al Shelash, Mr. Hathloul Saleh Al Hathloul, Mr. Abdullatif Abdullah Al Shelash and Dr. Abdulrahman Hamad Al Harkan. The nature of these transactions was for the financing of Dar Al-Arkan's customers to buy homes. The choice of SHL as a home loan provider is at the discretion of the customer. During 2015, there were no sales transactions with SHL, however there was an opening balance of SR 143,000 that was due from transactions recorded in prior years, which is fully settled in 2015 resulting in a nil balance due to or from this related party.
2- Khozam Real Estate Development Company (KDC)
Khozam Real Estate Development Company (KDC) is a related party as the Company has a 51% equity holding equivalent to 27,554,651 shares out of total equity of 54,028,728 shares and also has common members in Board of Managers who are in the Board of Directors of Dar Al-Arkan. The common management committee members are Mr. Abdullatif Abdullah Al Shalash and Dr. Abdulrahman Hamad Al Harkan. The management of KDC requested that it invests its excess cash balance (opening balance as at beginning of 2015 amounted to SR 195.61 million) with Dar Al-Arkan at a nominal interest repayable on demand to facilitate its working capital needs. During 2015 the Company repaid SR 2,32 million of this amount in advance; together with interest of SR 0,96 million for its operational requirements. The closing balance as at 31 December 2015 was SR 194,25 million. This transaction was approved during the AGM on June 15 2015 and the company can repay the amount and close the balance anytime
3- Bank Alkhair
Bank Alkhair B.S.C is a related party as it has common Board Members with Dar Al-Arkan. The common Board Members are Mr. Yousef Abdullah Al Shelash, Mr. Hethloul Saleh Al Hethloul, Mr. Majed Abdulrahman Al Kasim, and Mr. Abdullatif Abdullah Al Shalash. In specific capital market transactions the Company enlisted Bank Alkhair to provide general financial advisory work on Shariah-compliance advice and management of the international Sukuk issuances. During 2015 there were no fees and expenses charged except the opening balance of SR 0.1 million which is the remainder of the amount paid in earlier to be paid/settled during 2016.
4- Alkhair Capital
Alkhair Capital is a related party as the Company owns a 34% equity stake equivalent to 10,200,000 shares out of total issued shares of 30 million, and also has common Board Members with Dar Al-Arkan. The common Board Members are Mr. Yousef Abdullah Al Shelash, Mr. Hethloul Saleh Al Hethloul, and Mr. Abdullatif Abdullah Al Shalash. Alkhair Capital was engaged to provide general financial advice, representing and filing the documents on behalf of the Company with CMA, Tadawul and other statutory bodies, Shariah compliance reviews and management support for the international Sukuk issuances, the partial pre-closure of the Sukuk and leasing/
subleasing of properties. During 2015 there were no fees and expenses charged and have no outstanding balance to be paid or settled.
