Al-Amin Company For Securities and Investment Funds
Financial & Business Analysis for the Year to 28 February 1999
"A difficult year with reduced total assets and lower profitability largely due to adverse external economic factors"


Financial Trends







Ownership and Legal Status

Al-Amin Co. for Securities & Investment Funds E.C. (Closed) with variable capital was registered in Bahrain in 1987, and is a member of the Dallah Al-Baraka Group. The main activities of the company include issuance of participating shares in the variable share capital, which form the basis for financing and investment transactions and providing financial instruments that are capable of being traded in accordance with the Islamic Shari'a.

The Company has filed an application with the Bahrain Monetary Agency (BMA) to obtain a license in order to operate as an Investment Islamic Bank under the supervision of the BMA. However the regulatory procedures have not yet been finalised.

The Year in Brief

Total Assets decreased by 8.4% to US$265 million at 28 February 1999 (1998: US$289 million), while Net Income for management shareholders decreased by 57% to US$5.9 million (1998: US$13.6 million). The 1998 figure included US$6.6 million representing the accumulated profits from the valuation of the Company's investment in an affiliate. Investments at 28 February 1999 totalled US$213 million, an 8% reduction from the previous period’s figure of US$230 million. Within this total, investments in Murabaha decreased by 14% to US$116 million, while lease contracts decreased by 2% to US$101 million. Return on equity for the year was 6.60% (1998: 8.02%). Expenses for the year were US$2.28 million, equal to US$2.28 million in 1998. As a percentage of total income (less Mudaribs' share), expenses were 32% (1998: 28%).

Business Highlights

  • The Company celebrated its eleventh anniversary during the year, and effected the intention of the Dallah Al Baraka Group to offer part of the Company's management share capital in a private placement by introducing an action plan to achieve this. Accordingly, technical support has been transferred to the Company’s new premises in Al-Baraka Bank Tower in Manama, Bahrain. An information directorate was established and equipped with the necessary infrastructure, hardware and software to improve the quality of service delivered to investors.
  • As in the previous year, most of the Company's investments were executed and managed by Dallah Al Baraka Holding Co. (an affiliated company) or Al-Tawfeek Co. for Investment Funds Limited, for management fees agreed between the companies' management, deducted from the original income of the investment.
  • During the year, the Company operated in difficult external economic conditions, characterised by a slow-down in the growth rates of both industrial and developing countries. However, the continuing confidence of investors in the Company was evidenced by the balance of participating shareholders’ funds increasing by 15.9% to US$166 million (1998: US$143 million). The Company’s reputation for the successful issuance of high return securities continued, with the launch of 24 issues during the year totalling US$240 million (1998: 20 issues totalling US$194 million)
  • In creating the portfolio of participating shareholders' investments, the following principles were observed:
1. The investment portfolio includes various types of Islamic investment instruments.

2. The components of the investment portfolio are distributed among the Islamic investment instruments so that the percentage of real assets exceeds the percentage of monetary assets (i.e. Murabaha contracts).

3. The maturities of the investments in the portfolio of each issue match the liquidation date of each issue.