appointed on by alicejenny

VIEWS: 6 PAGES: 42

									                                     Directors’ Report

       On behalf of the Board of Directors, I am pleased to welcome you to the 7th
Annual General Meeting of the Company to present the Directors’ report and the
Audited Financial Statements for the year ended 31st December 2004.

1. Synopsis of 2004:
       The Muscat Securities Market (MSM – stock market) showed a notable growth
of around 24% for the year 2004 over its 2003 year end figures.
       In this year, a number of developmental activities took place in the Sultanate of
Oman like - the unveiling of the WAVE project; tourism sector given a big boost by
establishing the Ministry of Tourism; relaxing of the property laws allowing GCC
nationals and expatriates to own real estate property in the Sultanate.
       The multi-billion dollar projects in the Sohar Port Area which includes a
refinery, iron and steel plant, and facilities to manufacture polypropylene, methanol,
fertilizer, Aluminum smelter, utility projects - water and electricity, etc will open many
opportunities in the value chain.


2. Review of Company Operations 2004:
a. Parent Company –
    1. The total revenue comprising of dividend income and profit on sale of shares,
       excluding the share of profits from subsidiaries, for the year 2004 was RO 188k
       which was at RO 269k in the previous year 2003.
    2. The share of profits from subsidiaries was at RO 103k.
    3. The Net profit for the year 2004 was at RO 165k after accounting for the
       expenses of RO 126k.
    4. The net equity was at RO 2.505M, an increase of RO 275k over the previous
       year ended 2003.
    5. The book value of the share rose from RO 0.743Bzs as at 31st Dec 03 to
       0.835Bzs as at 31st Dec 04.
b. Subsidiaries –
   National Cans and Packing Industry LLC & Oman Cans Industry LLC:




                                       Page 1 of 42
       1. The operations are under continuous review and very necessary steps are
           planned for implementation in the second quarter of 2005 for improvement
           and better results.
       2. Amount due to National Bank of Oman was settled at lesser than the
           carrying value and the result was accounted for as an ‘extraordinary gain’.
       3. The turnover for the year was RO 1.092M, an increase of 20% over the
           previous year.
       4. The Net profit for the year was RO 140k, after taking into consideration the
           net extraordinary gain of RO 255k.
       5. The net equity increased from RO -38k (as on 31st December 2003) to RO
           102k (as on 31st December 2004), which shows positive improvements in the
           operations and results.
   Al Batna Quarries LLC:
       1. The commercial operations are likely to commence during 2005 to achieve
           the planned profits out of the investments.
       2. Explore new investment opportunities in the Quarry and Gabbro products in
           the Al Batinah Region.
   Al Batinah Shipping Co., LLC:
       1. Currently there are no reportable activities in the Company, but the Board
           has plans for making the best of the upcoming opportunities in the Port of
           Sohar in line with the business objectives of the Company.


3. Outlook:
       Your Company will explore the business opportunities provided by the planned
growth in particular for the Al Batinah region and generally for Oman. With many
industrial activities scheduled to take their place in Sohar, we will explore the
possibilities of finding our place in the value chain. Effective utilization of resources will
be on top priority.


4. Corporate Governance:
       The Board of Directors is committed to proper standards of Corporate
Governance and accordingly has implemented the Code issued by the Capital Market


                                        Page 2 of 42
Authority (CMA). As required under the code, a report of the external auditor on the
subject is enclosed.


5. Appreciation:
       It is our pleasure to thank the shareholders for their support and
encouragement. Also I would like to extend my thanks to all my colleagues on the
Board for their valuable contribution to the Company. We in turn express our
appreciation to CEO, the management and staff for their good work.
       The Board of Directors extends its most sincere gratitude to His Majesty Sultan
Qaboos bin Said for his wisdom and visionary leadership.


Thank you,


Ayman Zainal
Chairman




                                     Page 3 of 42
Page 4 of 42
                                     Management Discussion and Analysis Report


1 Introduction:
                     The Management of ABDIH Co., is pleased to present to its shareholders the
MDAR covering the Company’s current performance & future outlook.


2 Financial and operational performance – Consolidated:
                     You will notice from the financial statements that the group’s profit for the year was
RO 165k as against the RO 25k for year 2003. The Parent company earned RO 94k as
dividend on Investments and the net effect on sale & holding of investments was RO 91k.
With the restructuring of the subsidiary operations and its loan from a Commercial Bank,
the Gross profit remained at decent levels in spite of the increase in tin plate prices and also
there was savings in Interest costs which considerably added to the profit for the year.
                     The Composition of the Total assets of the Company for the last 2 years is as below:

                                                         Composition of assets

               1,500,000

               1,400,000

               1,300,000

               1,200,000

               1,100,000

               1,000,000

                900,000
  Rial Omani




                800,000

                700,000

                600,000

                500,000

                400,000

                300,000

                200,000

                100,000

                      0
                             IAS        Cash in bank           I in S & A              Related party          Advances   Fixed Assets
                                                                            Category

                                                       2003                                            2004



                     The net equity of the Company is at RO 2.505M as against the RO 2.230 last year.
Given herein below is the composition of net equity for the last 2 years.




                                                              Page 5 of 42
                                                                Composition of Total Equity

               3,250,000

               3,000,000

               2,750,000

               2,500,000

               2,250,000

               2,000,000

               1,750,000
 Rial Omani




               1,500,000

               1,250,000

               1,000,000

                750,000

                500,000

                250,000

                       0
                                     Share Capital                 Reserves                     Change in fair value             Retained Earnings
                (250,000)

                (500,000)

                (750,000)
                                                                                     Category

                                                                     2003                               2004




The Company seeks to deliver returns to shareholders through appreciation in share prices.
The Company’s stock price at the end of each month of the year 2004 is as below:

                                                                ABDIH Share Price Movement

               2.700
               2.600
               2.500
               2.400
               2.300
               2.200
               2.100
               2.000
               1.900
               1.800
               1.700
               1.600
  Rial Omani




               1.500
               1.400
               1.300
               1.200
               1.100
               1.000
               0.900
               0.800
               0.700
               0.600
               0.500
               0.400
               0.300
               0.200
               0.100
               0.000
                           Jan-04   Feb-04    Mar-04   Apr-04   May-04      Jun-04     Jul-04     Aug-04       Sep-04   Oct-04    Nov-04     Dec-04
                                                                               Month 04




                                                                     Page 6 of 42
3 Internal Control systems:
        The company improvises the internal policies and procedures manual for better
management and control system and also to comply with the requirements of the various
regulatory authorities.


4 Future Outlook:
        The Parent Company will enter the Real Estate market thru a subsidiary and an
associate company with remarkable projects.
        The other subsidiaries like Al Batna Quarries LLC and Al Batna Shipping Co., LLC
though did not contribute significantly to the profits of the group in the year 2004, but are
now greatly positioned to take advantage of the business opportunities that are expected.
        Management firmly believes that the long-term prospects of the Company largely
depend upon broader operational base with a spectrum of subsidiaries and associate
companies and also investments in key sectors of the MSM.


5 Acknowledgement:
        The Company Management expresses its most sincere gratitude to His Majesty
Sultan Qaboos bin Said for his wisdom and visionary leadership and enabling the
Omanis to take active position so as to serve our Great Nation. I also extend our sincere
thanks to the Government Institutions for the support extended for the prosperity of its
countrymen. On behalf of the management, I would like to thank our Chairman and our
Board of Directors for their continued support and trust.




Abdul Wahab Al Mandheri
Chief Executive Officer




                                        Page 7 of 42
                                    Corporate Governance Report

      1. Company’s philosophy –
      The Company in good faith adopts and implements the code of corporate governance as laid
      down by the Capital Market Authority. To strengthen the relationship with shareholders and
      increase the long term value, the Board of Directors believe that effective corporate
      governance is very essential for the Company.


      2. Board of Directors –
      The Board of Directors consists of nine Independent and non-executive members, which is
      in compliance with the article 3 of the Code. All the members on board have rich and varied
      experience in the business matters.
      The composition of the Board and members’ attendance is as follows –
#         Name            Member            Repres          Other     Board     Audit       Ex   Invest    Attenda
                            Ship            enting         Director   Meet      Com.    com          com    nce
                                                             ship         ing               .               AGM
1   Mr.          Ayman Chairman       Gulf             -              4         -       1        -         YES
    Zainal*                           Finance
                                      House
2   Mr.Ali    Abdullah Dy.            Self             Dy             6         4       -        -         YES
    Albadi              Chairman                       Chairman
                                                       of     Oman
                                                       Chromite
3   Mr. Ahmed Mohd Director           Self             Chairman       6         3       -        -         YES
    Aal Mohd                                           of     Oman
                                                       Chromite
4   Mr. Azam Yasin Director           Al Jouaan & -                   4         -       -        -         No
    Al Onaizy*                        Al      Onaizy
                                      Trading Co.,


                                                Page 8 of 42
5   Mr. Fhad Yacoub Director          Al      Onaizy -                4       -         -      -     YES
    Al Jouaan*                        Group
                                      Trading Co.,
6   Mr.       Hamood Director         Self                            5       -         1      2     YES
    Sultan Al Hosni
7   Mr.   Mohammed Director           Gulf              -             4       -         -      -     YES
    Ali Al Jasim*                     Finance
                                      House
8   Mr.   Mohammed Director           Financial         -             4       -         1      2     YES
    Hassan Al-Theeb*                  Services Co.,
9   Mr. Salah Hilal Al Director       Self              Dy.           4       4         -      8     No
    Maawali                                             Chairman
                                                        -     Oman
                                                        Flour
                                                        Mills;
                                                        Director
                                                        OIFC;
                                                        Modern
                                                        Poultry
                                                        Farm
                                           *appointed on 29/04/2004

      No director is a director (member) of more than 4 public companies whose shares are listed
      on the Muscat Securities Market (MSM) and no director is a chairman of more than 2 such
      companies. No director is a member of the Board of Directors of a public Company which
      carries out similar business and whose principal office is located in the Sultanate of Oman.




                                                Page 9 of 42
The Board and the Audit Committee have discussed with the internal and external auditors
the overall scope and plan of their audits to ensure that all significant internal control risks
and compliance matters have been covered, and have assessed the independence of the
statutory auditors.


3. Process of appointment, nomination, selection of Directors appointed in the year –
The person presenting himself, as nominee to the membership of a Board did not
stand disqualified due to not meeting the laid down condition. The nomination
forms were verified for the information provided there in. Additional information
in form of - the proof age, details of indebtedness to the company in comparison to
the personal net worth, written and proper authorization of the juristic person if the
nomination is in the capacity of a representative of a juristic person were gathered
to get a reasonable assurance of the accuracy of the information. The application for
the nomination for the membership of the Board of Directors was received at least
10 days before the date of General Meeting to elect the Board members. The
applications received were submitted to the CMA at least 4 days before the date of
General meeting to elect the Board members. The election of directors if held by
direct ballot by the shareholders, it was ensured that the number of votes cast by
each individual shareholder did not mismatch the shares held by such shareholder.




4. Details of meetings held during the year are as follows –
Meeting                         Number of meeting held           Dates of meetings
                                                                 27/03/04
                                                                 5/04/04
                                                                 29/04/04
Board meeting                   6                                21/06/04
                                                                 6/07/04


                                        Page 10 of 42
                                                        22/11/04


                              1                         5/10/04
Executive Committee




                                                        3/04/04
                                                        9/8/04
Audit Committee Meeting       5                         14/08/04
                                                        11/10/04
                                                        7/11/04




                                                        15/1/04
                                                        18/1/04
                                                        25/1/04
Investment       Committee 10                           9/2/04
Meeting                                                 16/2/04
                                                        24/02/04
                                                        6/03/04
                                                        30/3/04
                                                        14/10/04
                                                        4/12/04


5. Audit Committee – The Audit Committee, consisting of 3 members was formed as per
the guidelines issued by the CMA.




                                    Page 11 of 42
** Discontinued from 29/04/2004


The Board has approved the audit committee charter. The key responsibilities are as below:
Member Name                                   Meeting attendance
Mr. Ali Abdullah Al Badi                      4
Mr. Salah Hilal Al Maawali                    4
Mr. Ahmed Mohd Aal Mohd                       3
Mr. Saleh Ahmed Al Badi **                    -
Mr. Mohammed Naser Al Sharaqi **              1
   1. Assess the effectiveness of the Company’s system of internal control over its
       operations and process of identifying risks.
   2. Review the annual financial statements along with the related reports prior to
       them being sent to the Board for their approval.
   3. Review and approve the quarterly financial statements submitted to
       regulatory authorities.
   4. Review and assess the performance of the statutory and internal auditor.
   5. Review and recommend to the Board any amendment of policies and
       measures for improving internal procedures.




6. Executive Committee –
The Board of Directors formed the Executive Committee consisting of 3 members as below:




                                       Page 12 of 42
Member Name                                    Meeting attendance
Mr. Ayman Zainal                               1
Mr. Mohammed Hassan Al-Theeb                   1
Mr. Hamood Sultan Al Hosni                     1


The key responsibilities of the Executive Committee (Board) are –
   1. Recommend to the Board of Directors the Company’s strategy and its
       implementation.
   2. Discuss the operational budget of the Company and its amendments during
       the year and submit its recommendations to the Board.
   3. Periodical review of Company’s performance in relation to its strategy and its
       implementation.
   4. Recommend the Investment Opportunities to the Board.


7. Investment committee –
The Board of Directors formed the Investment Committee, consisting of 2 members who
are as below:

Member Name                                    Meeting attendance
Mr. Mohammed Hassan Al-Theeb                   2
Mr. Hamood Sultan Al Hosni                     2
Remuneration by way of sitting fess for the Board and its committees for the year 2004 is
RO 9,350/-. Sitting fees are paid as below –




                                      Sitting fees per meeting
                Meeting                Chairman              Other Members
Board meeting                 300                           200
Audit committee.              150                           100
Investment committee          150                           100
Executive Committee           150                           100


                                       Page 13 of 42
Basic Salary, allowances, perquisites, gratuity and social insurance paid in the year 2004 to the
top 3 employees aggregates to RO 50,513/-.
Details of salary, allowances etc by employees needs to be disclosed here.
    Name         Position       Salaries        Allowances        Total
Abdullwahab      CEO         22,200           4,782            26,982
Al Mandhari
Sallaheldin A. GM            10,400           1,740            12,140
Rashdi
Musa             SIA         4,516            375              4,891
MAK              FC          6,000            500              6,500
    Total                        43,116             7,397         50,513


8. Details of Non-Compliance –
There was a gap of more than four months between the Board Meetings held on 6th July
2004 and 22nd November 2004, which contravenes 4 of the Code of Corporate Governance
for MSM listed Companies. The delay was caused due to non-availability of members.




The Company has engaged an external Consultant competent in the field of preparing the
Accounting – Policies and Procedures Manual, Investment - Policies and Procedures
manual. This is under preparation and will be implemented after review and approval of the
Board. The Internal Manual which describes the general policies of the Company is also
under continuous review and revised suitably to incorporate the necessary controls and
procedures.




                                           Page 14 of 42
The Board is pleased to confirm that there has been no specific area of non-compliance,

other than that specified above. No penalties were imposed by CMA or any other

statutory authority during the last year.

9. Means of Communication with the shareholders & Investors -
The company publishes its un-audited quarterly and audited annual financial statements in
two local newspapers, as required by CMA regulations.


10. Management discussion & Analysis Report -
Management discussion & Analysis Report for the year 2004 forms part of the
annual report.
11. Analysis according to the number of shareholders, number of shares, and ratios as
on 31st Dec 2004 –
        % Holding        Nos of shareholders          Nos of shares             %
More than 10%                     2                     1,001,000          33.367
Between 5% to 10%                 2                     359,955            11.999
Above 1 % to 5 %                  7                     450,538            15.018
Less than 1%                    1,014                   1,188,507          39.616
Total                           1,025                   3,000,000          100 %




12. Share Price data –
The movement of the Company’s share price during the year 2004 us summarized below:
Month                                       High – RO                 Low – RO
January 2004                                  1.090                     1.070
February                                      1.060                     1.060
March                                         1.140                     1.080
April                                         1.390                     1.360
May                                           1.370                     1.350



                                        Page 15 of 42
June                1.510       1.500
July                1.510       1.510
August              2.180       2.180
September           2.480       2.450
October             2.630       2.510
November            2.550       2.450
December 2004       2.300       2.220




                Page 16 of 42
Share performance as compared with the Index of Bank & Investment sector on MSM

                                                                                                      . est
                                                 M ov eme nt in closing price s in DBIH with Bank & Invse ctor

                       3.000                                                                                                                    5,000
                                                                                                                                                4,500
                       2.500                                                                                                                    4,000




                                                                                                                                                        Bank & Invest Index
   MKT closing price




                       2.000                                                                                                                    3,500
                                                                                                                                                3,000
                       1.500                                                                                                                    2,500
                                                                                                                                                2,000
                       1.000                                                                                                                    1,500
                       0.500                                                                                                                    1,000
                                                                                                                                                500
                       0.000                                                                                                                    0
                               Jan-04   Feb-04   Mar-04    Apr-04   May -04   Jun-04   Jul-04    Aug-04   Sep-04   Oc t-04   Nov-04   Dec -04
                       DBIH    1.080    1.060     1.100    1.380    1.360      1.500   1.510     2.180    2.470    2.540     2.510    2.250
                       Index   3,920    3,960     4,010    4,100    4,310      4,720   4,632     4,620    4,739    4,579     4,506    4,521
                                                                                       m onths

                                                          DBIH                                                                Index




                                                                            Page 17 of 42
13. Statutory Auditors –
BDO Jawad Habib was first established in Bahrain in 1980 and in the Sultanate of Oman in
1993. BDO acts as Auditor for several public and limited liability companies in Oman and
has significant audit and consulting practice in Bahrain and Oman. It has already been
accredited by CMA to audit entities governed by the CMA. The firm is a part of BDO
International which is the world’s fifth largest multinational accounting and consulting
organization serving global and national organizations with a network of 621 offices in over
100 countries employing over 25,000 staff. BDO has a strong network within the Middle
East comprising of sixteen offices in nine countries, supported by a team of over 400 staff.
BDO Jawad Habib has completed a high quality and comprehensive audit for the Company
in accordance with the International Auditing (Accounting) Standards.




Chairman




                                             AL BATINAH DEVELOPMENT AND
                               INVESTMENT HOLDING CO SAOG

                               CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEAR ENDED 31 DECEMBER 2004




Al Batinah Development and Investment Holding Co SAOG

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2004
Contents                                         Page

Auditors' report                                   1

Balance sheet                                      2

Statement of income                                3

Statement of changes in equity                    4-5

Cash flow statement                                6

Notes to the consolidated financial statements   7 - 22




 AUDITORS' REPORT TO THE SHAREHOLDERS OF
 Al Batinah Development and Investment Holding Co SAOG
We have audited the accompanying consolidated balance sheet of Al Batinah Development and Investment
Holding Co SAOG ('the Company') and its subsidiaries (collectively referred to as 'the Group') as at 31
December 2004 and the related statements of income and cash flows for the year then ended.

Responsibilities of the Board of Directors and Auditors

These consolidated financial statements are the responsibility of the Company’s Board of Directors. Our
responsibility is to express an opinion on these financial statements based on our audit.

The consolidated financial statements of the Group for the year ended 31 December 2003 were audited by
another Auditor and they issued a qualified opinion on the same vide their report to the shareholders dated 5
April 2004. The qualification was in respect of the going concern assumption followed by the management
in the preparation of the 2003 consolidated financial statements due primarily to the Group's net current
liabilities position at 31 December 2003.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing as promulgated by the
International Federation of Accountants. Those Standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by the Board of Directors, as well as evaluating the overall consolidated financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.


Opinion

In our opinion, the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2004, and of the results of its operations and its cash flows for the year then ended
in accordance with International Financial Reporting Standards as promulgated by the International
Accounting Standards Board and the disclosure requirements of the Capital Market Authority and comply,
in all material respects with the Commercial Companies Law 1974, as amended.




                                                                             Yashpal Mehta
                                                                             Partner
Date
Muscat
Al Batinah Development and Investment Holding Co SAOG
Balance sheet at 31 December 2004

                                         Note                Group                 Parent company
                                                    2004          2003             2004         2003
                                                  RO'000         RO'000          RO'000       RO'000
Non-current assets
Property, plant and equipment              3        1,044             2,092           10           5
Other assets                                             -                 4           -            -
Investments available for sale             4a       1,288             1,369        1,288       1,369
Investments in subsidiaries                5             -                -          258         189
                                                    2,332             3,465        1,556       1,563
Current assets
Investments held for trading               4b          87                    -        87           -
Inventories                                 6         234                  304         -           -
Accounts and other receivables              7       1,203                  185     1,042           3
Amounts due from related parties            8          18                   18       171         172
Cash and bank balances                     27         508                  908       218         586
                                                    2,050                1,415     1,518         761
Current liabilities
Accounts and other payables                 9          162              171          68          94
Amount due to related parties               8           18               18           -           -
Bank borrowings                            10          828            1,322         501            -
Term loans                                 11           51              219           -           -
Finance lease                              12            6                7           -           -
                                                     1,065            1,737         569          94
Net current assets / (liabilities)                     985            (322)         949         667
Non-current liabilities
Staff terminal benefits                                 18               16             -           -
Term loans and deferred creditors          11          604              693            -           -
Deferred Government grants                 11          108              130             -           -
Finance lease                              12            6               12            -           -
                                                       736              851            -           -
Net assets                                           2,581            2,292        2,505       2,230

Shareholders' funds
Capital                                    13        3,000            3,000        3,000       3,000
Legal reserve                              13           20                3           20           3
Cumulative change in fair value                      (106)            (216)        (106)       (216)
Accumulated losses                                   (409)            (557)        (409)       (557)
                                                     2,505            2,230        2,505       2,230
Minority interest                                       76               62            -           -
                                                     2,581            2,292        2,505       2,230
Net assets per share (RO)                  14        0.860            0.764        0.835       0.743

These financial statements were approved and authorized for issue by the Board of Directors on
________ 2005 and signed on their behalf by:

         Chairman                                             Director

The notes on pages 7 to 22 form part of these financial statements.




                                                                                                 2
Al Batinah Development and Investment Holding Co SAOG
Statement of Income for the year ended 31 December 2004


                                              Note               Group              Parent Company
                                                        2004               2003      2004        2003
                                                      RO'000             RO'000    RO'000     RO'000

Revenue                                        15        1,284            1,188       188          269

Cost of turnover                               16        (859)             (708)        -            -
Gross profit                                              425                480      188          269

Other income                                   17          24               608         -            -
                                                          449             1,088       188          269

Operating expenses
Salaries and staff costs                       18         170               168        72           60
Depreciation                                   3           95               140         3            3
Administrative, selling and general            19         148               164        50           34
expenses
Finance costs                                  20         112               188         1             -
                                                          525               660       126            97

Operating (loss) / profit for the year                    (76)              428        62          172

Recycling of cumulative changes in fair
value of investments on disposal                             -             (286)        -         (286)
Share of profits / (losses) of subsidiaries    21            -                -       103           180
Loss on acquisition of subsidiary                            -              (41)          -         (41)
Pre-operating expenses written off                           -              (70)          -            -
Loss on disposal of property, plant and        22        (149)                -           -            -
equipment
Waiver of loan and interest expense            23         610                 -          -             -
Impairment of property, plant and              24        (206)              (15)         -             -
Equipment
Net profit before minority interest                       179                16       165           25

Minority interest                                         (14)                9          -            -
Net profit before tax                                     165                25       165           25

Income tax                                     25           -                 -          -            -
Net profit for the year                                   165                25       165           25

Basic earnings per share (RO)                  26        0.055           0.008       0.055        0.008

The notes on pages 7 to 22 form part of these financial statements.




                                                                                              3
Al Batinah Development and Investment Holding Co SAOG
Statement of changes in equity for the year ended 31 December 2004

Group
                                                 Cumulative
                              Share      Legal    changes in    Accumulated
                             capital   reserve     fair value         losses        Total
                            RO'000     RO'000        RO'000         RO'000         RO'000

At 1 January 2003             3,000         -          (619)           (579)        1,802
Net profit for the year           -         -              -              25           25
Transfer to legal reserve         -         3              -             (3)            -
Remeasurement of                  -                      117               -          117
investments
available for sale
Recycling of cumulative            -         -           286               -          286
changes in
fair value on disposal
At 31 December 2003           3,000         3          (216)           (557)        2,230

At 1 January 2004             3,000         3          (216)           (557)        2,230
Net profit for the year           -         -              -             165          165
Transfer to legal reserve         -        17              -            (17)            -
Remeasurement of                  -         -            157               -          157
investments
available for sale
Recycling of cumulative            -         -          (47)               -         (47)
changes in
fair value on disposal
At 31 December 2004           3,000        20          (106)           (409)        2,505




                                                                               4
     Al Batinah Development and Investment Holding Co SAOG
     Statement of changes in equity for the year ended 31 December 2004

Parent Company
                                                                  Cumulative
                                   Share           Legal           changes in    Accumulated
                                  capital        reserve            fair value         losses        Total
                                 RO'000          RO'000               RO'000         RO'000         RO'000

At 1 January 2003                  3,000                -               (619)           (579)        1,802
Net profit for the year                -                -                   -              25           25
Transfer to legal reserve              -                3                   -             (3)            -
Remeasurement of                       -                                  117               -          117
investments
available for sale
Recycling of cumulative                 -                -                286               -          286
changes in
fair value on disposal
At 31 December 2003                3,000                3               (216)           (557)        2,230

At 1 January 2004                  3,000                3               (216)           (557)        2,230
Net profit for the year                -                -                   -             165          165
Transfer to legal reserve              -               17                   -            (17)            -
Remeasurement of                       -                -                 157               -          157
investments
available for sale
Recycling of cumulative                 -                -               (47)               -         (47)
changes in
fair value on disposal
At 31 December 2004                3,000               20               (106)           (409)        2,505

The notes on pages 7 to 22 form part of these financial statements.




                                                                                                5
Al Batinah Development and Investment Holding Co SAOG
Cash flow statement for the year ended 31 December 2004

                                                   Note            Group            Parent Company
                                                                2004       2003      2004        2003
                                                              RO'000     RO'000    RO'000      RO'000
Operating activities
Cash receipts from customers and other
Income                                                         1,937       1,544       279          961
Cash paid to suppliers and employees                          (2,052)    (1,227)   (1,139)        (608)
                                                                (115)        317     (860)          353
Net interest paid                                               (112)      (188)        (1)           -
Net cash (used in) / from operating activities                  (227)        129     (861)          353
Financing activities
Long term loans repaid                                          (279)       (16)        -             -
Bank borrowings availed/(repaid)                                 518        (40)      501             -
Net cash from/(used in) financing activities                     232        (63)      501             -
Investing activities
Proceeds from sale of property, plant and                        654          -           -         12
equipment
Acquisition of property, plant and                               (47)       (35)       (8)          (2)
equipment
Net cash from/(used in) investing activities                     607        (35)       (8)          10

Net increase/(decrease) in cash and cash equivalents             612          31    (368)          363
Cash and cash equivalents, beginning of the year                (126)      (157)      586          223
Cash and cash equivalents, end of the year        27             486       (126)      218          586

The notes on pages 7 to 22 form part of these financial statements.




                                                                                              6
    Al Batinah Development and Investment Holding Co SAOG
    Notes to the consolidated financial statements for the year ended 31 December 2004

1   Legal status and principal activities
    Al Batinah Development and Investment Holding Co SAOG ('the Parent Company') is a joint stock company
    registered under the Commercial Companies Law, 1974 (as amended) of the Sultanate of Oman. The principal place
    of business is in Al Khuwair. The principal activities of the Parent Company and its subsidiaries (collectively
    referred to as 'the Group') are as follows :

    Companies                                                 Principal activities
    Audited by BDO Jawad Habib
    Al Batinah Development and Investment Holding Co          Investment and participation in the management of
    SAOG                                                      commercial projects in the Sultanate of Oman
    ('the Parent Company')
    National Cans & Packing Industry LLC                      Manufacture and sale of cans and other packing materials
    Oman Cans Industry LLC                                    Manufacture and sale of cans and other packing materials

    Audited by other auditors
    Al Batinah Quarries Company LLC                           Exploration and marketing of mining materials
    Al Batinah Shipping, Handling & Customs Clearance         Shipping and handling services at the land border
    LLC

    The consolidated financial statements include the results of operations and financial position of the following
    subsidiaries :

    Subsidiary                                            Ownership interest
    National Cans & Packing Industry LLC                             82.50%
    Oman Cans Industry LLC                                           82.50%
    Al Batinah Quarries LLC                                             55%
    Al Batinah Shipping, Handling & Customs Clearance LLC               90%


2   Significant accounting policies

    Statement of compliance
    The consolidated and parent company financial statements have been prepared in accordance with International
    Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”),
    interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”) of the IASB, the
    requirements of the Commercial Companies Law, 1974 (as amended) and the disclosure requirements of the Capital
    Market Authority of the Sultanate of Oman.

    The significant accounting policies adopted are as follows :

    Basis of preparation
    These financial statements have been prepared on the historical cost basis, except for investments held for trading
    and available for sale, which are stated at fair value, and government soft loan, stated at amortized cost.




                                                                                                       7
    Al Batinah Development and Investment Holding Co SAOG
    Notes to the consolidated financial statements for the year ended 31 December 2004

2   Significant accounting policies (continued)

    Basis of consolidation
    The consolidated financial statements comprise the financial statements of Al Batinah Development and
    Investment Holding Co SAOG and its subsidiaries as at 31 December each year. The financial statements of
    subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting
    policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

    All intercompany balances and transactions, including unrealized profits arising from intra-group transactions,
    have been eliminated in full.

    Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be
    consolidated from the date on which control is transferred out of the Group. Where there is a loss of control of
    a subsidiary, the consolidated financial statements include the results for the part of the reporting year during
    which the parent company has control. Minority interests represent the interests in the subsidiary companies
    not held by the Group.


    Property, plant and equipment
    Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
    The cost of property, plant and equipment includes its purchase price plus incidental expenses. The cost of
    property, plant and equipment also includes finance costs that are directly attributable to the acquisition of the
    assets up to the date of capitalization.

    Depreciation is calculated as per the straight-line method, to write off the cost of each asset to its estimated
    residual value over the expected useful life. Depreciation has been calculated at the following rates:

    Description                                             % p.a.
    Buildings                                                    4
    Plant and machinery                                       4-10
    Motor vehicles                                        25-33.33
    Furniture and fixtures and office equipment           20-33.33

    Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying
    amount.

    Investments

    All investments are initially recognized at cost, being the fair value of the consideration given and including
    acquisition charges associated with the investment.

    After initial recognition, investments, which are classified as either held for trading or available for sale, are
    measured at fair value. Gains or losses on investments held for trading are recognized in income. Gains or
    losses on available for sale investments are recognized as a separate component of equity until the investment
    is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time
    the cumulative gain or loss previously reported in equity is included in the income statement.

    All regular way purchases and sales of financial assets are recognized on the trade date.



                                                                                                             8
    Al Batinah Development and Investment Holding Co SAOG
    Notes to the consolidated financial statements for the year ended 31 December 2004

2   Significant accounting policies (continued)

    Investments (continued)
    For investments that are actively traded in organized financial markets, fair value is determined by reference to
    the quoted market bid price at the close of business on the balance sheet date. For investments where there is no
    quoted market price, fair value is calculated based on the underlying net asset base of the investment.

    The investment in the subsidiary, in the Parent Company's balance sheet is valued by using the equity method
    of accounting as per IAS 27. Under the equity method of accounting, the investment is carried in the balance
    sheet at cost plus post-acquisition changes in the company's share of net assets of the subsidiary, less any
    impairment in value.

    Inventories
    Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling
    price in the ordinary course of business, less the estimated costs of completion and selling expenses. Cost is
    determined by first in first out method and includes expenditure incurred in acquiring the inventories and
    bringing them to their existing location and condition. In respect of finished goods and work in progress, cost
    comprises of material cost and proportionate direct expenses.

    Accounts and other receivables
    Accounts receivable and other receivables are carried at cost less an allowance for any uncollectible amounts.
    An estimate is made for doubtful debts based on a review of all outstanding amounts at the year-end. Bad debts
    are provided for in the year in which they are identified.

    Cash and cash equivalents
    Cash and cash equivalents comprise cash, bank balances and bank deposits with an original maturity of not
    more than three months. For the purpose of the consolidated cash flow statement, cash and cash equivalents
    consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

    Impairment
    The carrying amounts of the Group’s assets (other than inventories - refer corresponding policy) are reviewed
    at each balance sheet date to determine whether there is any indication of impairment. If any such indication
    exists, the asset's recoverable amount is estimated. An impairment loss is recognized in the statement of
    income whenever the carrying amount of an asset exceeds it's recoverable amount.

    The recoverable amount of the Group’s receivables is calculated as the present value of future cash flows,
    discounted at the original effective interest rate. Receivables with a short duration are not discounted. The
    recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in
    use, the estimated cash flows are discounted to their present value using a pre-tax discount rate that reflects the
    current market assessments of the time value of money and the risks specific to the asset. For an asset that does
    not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating
    unit to which the asset belongs.

    An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
    amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
    carrying amount that would have been determined net of depreciation or amortization, if no impairment loss
    had been recognized.




                                                                                                            9
    Al Batinah Development and Investment Holding Co SAOG
    Notes to the consolidated financial statements for the year ended 31 December 2004

2   Significant accounting policies (continued)

    Staff terminal benefits
    Staff terminal benefits for Omani employees are provided for in accordance with the Sultanate of Oman’s
    Social Insurance Law of 1991. For non-Omani Staff, provision is made for amounts payable under the Oman
    Labour Law, based on the employees’ accumulated period of service at the balance sheet date.

    Trade and other payables
    Liabilities are recognized for amounts to be paid in future for goods or services received, whether billed by
    the supplier or not.

    Deferred Government grant
    In accordance with International Accounting Standard 39, the fair value of the term loans has been
    determined by discounting all future cash payments using the prevailing market rates for similar instruments.
    The difference between the carrying value of the loan and the fair value of the loan is transferred to deferred
    Government grant.
    Deferred Government grant is recognized as income over the period of the term loans in which related
    interest costs are incurred. Amortization of the deferred Government grant is recognized within net financing
    costs.
    Revenue
    Turnover from the sale of goods is recognized in the income statement when the significant risks and rewards
    of ownership have been transferred to the buyer.

    Realized gains or losses on the sale of investments represents the sale proceeds less the cost of investments
    sold, calculated using the average weighted basis.

    Interest on fixed deposits is recognized on an accrual basis. Dividend income from investments is accounted
    for when the right to receive payment is established.

    Foreign currencies
    Transactions in foreign currencies are translated into Rials Omani at the foreign exchange rate ruling at the
    date of the transaction or at the contracted rates. Monetary assets and liabilities denominated in foreign
    currencies at the balance sheet date are translated to Rials Omani at the foreign exchange rates ruling at that
    date. Foreign exchange differences are recognized in the statement of income.

    Operating lease payments
    Payments made under operating leases are recognized in the income statement on a straight-line basis over
    the term of the lease.

    Net finance costs
    Net finance costs comprise interest payable on borrowings, interest payable to creditors and interest subsidy.
    All interest costs incurred in connection with borrowings are recognized as an expense in the period in which
    they are incurred.

    Income tax
    Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognized in
    the income statement.




                                                                                                       10
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

2    Significant accounting policies (continued)

     Income tax (continued)
     Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
     substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

     Deferred tax is calculated using the balance sheet liability method, providing for temporary differences
     between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used
     for taxation purposes. The amount of deferred tax provided is based on the expected manner of realization or
     settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at
     the balance sheet date.
     A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be
     available against which the unused tax losses and credits can be utilized. Deferred tax assets are reduced to the
     extent that it is no longer probable that the related tax benefit will be realized.

     Financial instruments
     Financial instruments comprise financial assets and liabilities carried on the balance sheet and include cash
     and bank balances, accounts and other receivables, accounts and other payables, bank borrowings, long term
     loans from the Government and commercial banks, and certain other assets and liabilities. Fair values of
     financial instruments are based on estimated fair values.

3    Property, plant and equipment

     Details of property, plant and equipment are as set out on page 21 & 22.

4    Investments

a)    Investments available for sale
                                                                       2004                            2003
                                                              Fair                            Fair
                                                             value              Cost         value              Cost
                                                            RO'000            RO'000        RO'000            RO'000
      Group and Parent Company
      MSM quoted investments

      Manufacturing                                              455             511            512                 574

      Banking and investment                                     636             456            640                 496

      Service                                                     70             110            147                 198

                                                               1,161            1,077         1,299                1,268
      Unquoted investments

      Service                                                    127             215              70                215


      Total investments available for sale                     1,288            1,292         1,369                1,483




                                                                                                              11
      Al Batinah Development and Investment Holding Co SAOG
      Notes to the consolidated financial statements for the year ended 31 December 2004

a)    Investments available for sale (continued)

      Details of individual investments which are equal to or more than 10 % of the carrying value of the investment
      portfolio are as follows :
      Group and Parent Company                           Holding         Number             Market              Cost
                                                              (%)       of shares             value
                                                                                            RO'000           RO'000
      Bank Dhofar SAOG                                         12          45,000               164               135
      Oman International Development and                       12          40,000               166               145
      Investment Co SAOG
      Oman Flour Mills SAOG                                    18        150,000                242               215
                                                                         235,000                572               495
b)    Investments held for trading
                                                                 2004                             2003
                                                           Fair value       Cost         Fair value              Cost
                                                                            RO'0
      Group and Parent Company                               RO'000           00           RO'000             RO'000
      MSM quoted investments
      Manufacturing                                                  7          4               -                   -
      Banking and investment                                        80         89               -                   -
                                                                    87         93               -                   -

 c)   The movements in fair value adjustments during the year are as follows :
                                                               2004                                 2003
                                                 Investment          Investment       Investment           Investment
                                                     held for           available        held for            available
                                                      trading             for sale       trading              for sale
                                                       RO'000            RO'000           RO'000              RO'000
      At 1 January 2004                                    -              (114)               -                (517)
      Appreciation/(diminution) for the year               (6)              157               -                  117
                                                           (6)                43              -                (400)
      Released on disposal of investments                  -               (47)               -                  286
      At 31 December 2004                                  (6)               (4)              -                (114)

 5    Investments in subsidiaries
                                                                                            Parent Company
      Stated in accordance with the equity method of accounting                              2004         2003
                                                                                           RO'000      RO'000
      National Cans and Packing Industry LLC                                                   84            -
      Oman Cans Industry LLC                                                                     -           -
      Al Batinah Quarries LLC                                                                 105          119
      Al Batinah Shipping, Handling and Customs Clearance LLC                                  69           70
                                                                                              258          189




                                                                                                      12
    Al Batinah Development and Investment Holding Co SAOG
    Notes to the consolidated financial statements for the year ended 31 December 2004

5   Investments in subsidiaries (continued)

    The parent company has an investment in 82,500 shares of National Cans and Packing Industry LLC (NCPI)
    comprising 82.50 % of equity.

    The parent company has an investment in 45,375 shares of Oman Cans Industry LLC (OCI) comprising       82.50
    % of equity. As at 31 December 2004, the share capital of OCI has been fully eroded. Hence, the investment is
    stated at nil value.

    The parent company has an investment in 137,500 shares of Al Batinah Quarries Company LLC (ABQC)
    comprising 55 % of equity. The company has not commenced commercial operations as at 31 December 2004.

    The parent company has an investment in 18,000 shares of Al Batinah Shipping, Handling and Customs Clearance
    LLC (ABSHCC) comprising 90 % of equity. The company has not commenced commercial operations as at 31
    December 2004.

6   Inventories                                                      Group                 Parent company
                                                                 2004          2003         2004         2003
                                                              RO'000         RO'000       RO'000      RO'000
    Raw materials and consumables                                  194          244            -            -
    Work in progress                                                  9           40           -            -
    Finished goods                                                  41            38           -            -
    Provision for slow-moving inventories                         (10)          (18)           -            -
                                                                   234          304            -            -
    The movement in provision for slow-moving inventories is as follows :
                                                                     Group                 Parent company
                                                                 2004          2003         2004          2003
                                                              RO'000         RO'000       RO'000       RO'000
    At 1 January                                                    18           12            -             -
    Charge / (Reversal) for the year                                (8)           6            -             -
    At 31 December                                                  10           18            -             -

7   Accounts and other receivables
    Accounts receivables                                             113        165             -                  -
    Provision for doubtful debts                                       -         (8)            -                  -
                                                                     113        157             -                  -
    Other receivables                                              1,090         28         1,042                  3
                                                                   1,203        185         1,042                  3
    The movement in provision for doubtful debts is as follows :
                                                                    Group                  Parent company
                                                                 2004          2003         2004         2003
                                                               RO'000        RO'000       RO'000      RO'000
    At 1 January                                                     8            8            -            -
    Reversal for the year                                          (8)            -            -            -
    At 31 December                                                   -            8            -            -

    Other receivables of the Group and the Parent Company at 31 December 2004 include RO 999,999 with respect to
    share application money paid for the AES Barka SAOG share issue. The Company was formally allotted shares
    amounting to RO 15,547 and the balance amount of RO 984,452 was refunded to the Company on 10 January 2005.



                                                                                                13
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

8    Related party transactions

     The company in the ordinary course of business deals with parties, which fall within the definition of ‘related
     parties’ as set out in International Accounting Standard No 24. The Board of Directors believe that such
     transactions are at arm’s length and are not materially different from those with unrelated parties. The balances
     due from, and due to related parties have been disclosed separately in the Balance Sheet. Significant transactions
     during the year with related parties are as follows:

                                                                    Group                      Parent company
                                                                 2004       2003                2004         2003
                                                               RO'000     RO'000              RO'000      RO'000
     Turnover                                                       -          4                   -            -
     Purchases of goods and services                                -          3                   -            -
     Purchases of property, plant and equipment                     -          2                   -            -
     Rent for plant and machinery                                   3          -                   -            -
     Directors' sitting fees                                       11          -                   9            7
     Bonus to Directors                                             -         39                   -            -

9    Accounts and other payables
     Accounts payable                                               66             112               -               -
     Other payables                                                 96              59              68              94
                                                                   162             171              68              94

10   Bank borrowings
                                                              Group                            Parent company
                                                                2004            2003            2004          2003
                                                              RO'000          RO'000          RO'000       RO'000
     Bank overdrafts                                              22           1,034               -             -
     Loan against trust receipts                                 305             288               -             -
     Short term loans                                            501               -             501             -
                                                                 828           1,322             501             -

     Bank borrowings have been availed at commercial rates of interest. These facilities are secured by a first charge
     over the Group's current assets and a corporate guarantee given by the Parent Company.

11   Term loans and deferred Government grant
                                                                    Group                      Parent company
                                                                 2004       2003                2004         2003
     Non-current portion                                       RO'000     RO'000              RO'000      RO'000
     Long term loan                                               431        475                   -            -
     Deferred creditors                                           173        218                   -            -
     Deferred Government grant                                    108        130                   -            -
                                                                  712        823                   -            -
     Current portion                                                                               -            -
     Long term loan                                                 51             219             -            -
                                                                   763           1,042             -            -

     The Government soft loan to National Cans and Packing Industry LLC (NCPI) of RO 500,000 bears interest at
     3% per annum and is repayable in seven equal annual installments, commencing from July 2006. The loan is
     secured by a registered first mortgage of NCPI's property, plant and equipment.

                                                                                                     14
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

11   Term loans and deferred Government grant (continued)

     The Government soft loan to Oman Cans Industry LLC (OCI) of RO 55,000 is interest free and repayable in
     ten equal annual installments of RO 5,500 each, commencing from the year ended 31 December 2000. The loan
     is secured by a registered first mortgage of the company's property, plant and equipment.

     NCPI had obtained a term loan from a commercial bank to finance the procurement of plant and machinery.
     The loan was repayable in five years and carried an interest rate of 12 % per annum. However, during the year
     ended 31 December 2004, the loan was settled in full.

     Long term loans include a total amount of RO 62,180 (Current portion - RO 44,712) representing an amount
     payable to a supplier of plant and machinery. The amount is repayable over a period of 3 to 5 years and carries
     an interest rate of 8% per annum. The credit facility is secured by negotiable instruments.

     Deferred creditors represent an amount payable to a supplier of raw materials, which is unsecured and interest
     free. The management is of the view that the amount will not be payable during the year ending 31 December
     2005.

12   Leases

     Finance lease
                                                         Group                              Parent company
                                                            2004             2003            2004         2003
                                                         RO'000            RO'000          RO'000       RO'000
     Finance leases                                           12               19               -            -
     Current maturities                                      (6)              (7)               -            -
     Non-current portion                                       6               12               -           -


     NCPI has availed a finance lease for the purchase of motor vehicles and equipment carrying interest at the rates
     of 6 % to 7 % per annum. The assets are jointly registered in the name of NCPI and the leasing companies.

     Operating lease
     Leasehold rights have been granted by the Public Establishment for Industrial Estate for a period of 25 years,
     for the use of land, on which the factory premises of NCPI and OCI have been constructed. The lease expires
     on 31 December 2024. At 31 December 2004, future minimum lease commitments under non-cancelable
     operating leases are as follows :
                                                         Group                              Parent company
                                                            2004           2003              2004             2003
                                                         RO'000         RO'000            RO'000           RO'000
     Within one year                                           4
                                                                               4                 -                -
     1-5 years                                                14              14                 -                -
     After 5 years                                            51              46                 -                -
                                                              69              64                 -               -




                                                                                                      15
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

13   Capital and reserves

     Share capital
     The Parent Company's authorized share capital consists of 20 million shares of RO 1 each. At 31 December
     2004, the issued and paid up share capital consisted of 3 million shares of RO 1 each.

     Shareholders who own 10 % or more of the Parent Company' share capital at 31 December 2004 are :
                                                                    2004                         2003
                                                              Shares             %         Shares             %
                                                                held                         held
     Al Jouan and Al Onaizy Trading                        600,000               20      750,000              25
     Gulf Finance House                                    401,000               13             -              -

     Legal Reserve
     In accordance with Article 106 of the Commercial Companies Law 1974, as amended, an amount equivalent to
     10 % of the company’s net profit before appropriations is required to be transferred to a non-distributable
     reserve until such time as a minimum of one-third of the capital is set aside.

14   Net assets per share
     Net assets per share is calculated by dividing the net assets attributable to the shareholders of the parent
     company at the year end by the number of shares outstanding as follows:
                                                                   Group                    Parent Company
                                                               2004           2003           2004            2003
                                                            RO'000         RO'000         RO'000         RO'000
     Net assets                                               2,581          2,292          2,505           2,230
     Number of shares outstanding at 31 December
     (No. of shares)                                          3,000          3,000          3,000           3,000

     Net assets per share (RO)                               0.860        0.764             0.835          0.743

15   Revenue
                                                                 Group                    Parent company
                                                             2004        2003              2004        2003
                                                           RO'000      RO'000            RO'000      RO'000
     Turnover                                               1,092         914                  -           -
     Interest                                                    7          6                  3           1
     Dividends                                                 94          81                94           81
     Net realized (loss)/profit on available for sale          (9)        187                (9)         187
     investments
     Recycling of cumulative changes in fair value of           47                -            47               -
     investments on disposal (Note 4c)
     Net realized profit from investments held for              59                -            59               -
     trading
     Net unrealized loss from investments held for              (6)               -           (6)               -
     trading (Note 4c)
                                                             1,284          1,188            188             269



                                                                                                    16
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004
16   Cost of turnover                                             Group                     Parent company
                                                              2004        2003               2004         2003
                                                            RO'000      RO'000             RO'000      RO'000
     Cost of raw materials and consumables                     708         544                  -            -
     Direct labour cost                                          96         90                  -            -
     Other direct costs                                          63         68                  -            -
     Provision for slow moving inventories                      (8)          6                  -            -
                                                               859         708                  -            -

17   Other income
     Rent                                                         14              1                -               -
     Profit on sale of property, plant and equipment               9              7                -               -
     Excess provisions written back                                1              -                -               -
     Compensation for cancellation of contract                     -            600                -               -
                                                                  24            608                -               -

18   Salaries and staff costs
     Basic salary and allowances                                142             139              64              49
     Other benefits                                              21              26               6               8
     Contribution to Omani Social Insurance Plan                  7               3               2               3
                                                                170             168              72              60

19   Administrative, selling and general expenses
     Rent                                                        23              19               5               5
     Communication costs                                          8              10               3               2
     Repairs and maintenance                                     16              12               1               -
     Directors' sitting fees                                     14              12               9               7
     Bonus to Director of a subsidiary                            -              39                -              -
     Legal and professional fees                                  8              11               5               6
     Others                                                      79              61              27              14
                                                                148             164              50              34

20   Finance costs
     Interest and other financing costs                          112             186                1              -
     Foreign exchange loss                                          -               2                -             -
     Amortization of deferred Government grants                    20              20                -             -
                                                                 132             208                1              -
     Interest subsidy                                            (20)            (20)
                                                                 112             188                1              -
     The interest and other financing costs of the Group include RO 47,648 in respect of National Cans and Packing
     Industry LLC, being the interest on a bank overdraft and a long term loan, for the period from January to April
     2004. The company entered into a settlement with its bankers to settle the bank overdraft and term loan
     including outstanding interest and the amount waived is disclosed in the Group's statement of income.

21   Share of net profits/(losses) of subsidiaries
                                                                                            Parent company
                                                                                             2004         2003
                                                                                           RO'000      RO'000
     Share of net profits of subsidiaries                                                      69          180
     Reversal of provision for losses of subsidiary                                            34        -
                                                                                              103          180

                                                                                                       17
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

22   Loss on sale of property, plant and equipment

     Loss on sale of property, plant and equipment of RO 149,193 (2003 - Nil) represents loss on disposal of
     certain items of NCPI's plant and machinery with a net book value of RO 789,193. The proceeds of RO
     640,000 were mainly utilized to settle NCPI's bank overdraft and term loan (refer to note 23 below).

23   Waiver of loan and interest expense

     Waiver of loan and interest expense of RO 610,103 represents the waiver of NCPI's bank overdraft and
     long term loan, as agreed with the Company’s bank during the year. The amount waived comprises the
     following :
                                                                                                     2004
                                                                                                      RO
     Commercial bank loan                                                                         189,901
     Commercial bank overdraft                                                                 1,020,202
                                                                                               1,210,103
     Sale proceeds from the disposal of NCPI's plant and machinery (refer to note 22 )          (600,000)
                                                                                                  610,103

24   Impairment of property, plant and equipment

     Property, plant and equipment owned by NCPI of RO 205,544 (net book value) as at 31 December 2003
     was assessed to be fully impaired by management following discontinuance of a production line.
     Accordingly, the related property, plant and equipment was written down to nil during the year.

25   Income tax

a)   Current tax
     No provision has been made for income tax in the current year in spite of the Parent Company's operations
     generating a profit for the year, due to the accumulated losses available for set off as at 31 December 2004.
     As per Ministerial decision no. 80/2000, NCPI has an exemption from income tax for a period of five years
     commencing from July 1999. NCPI is in the process of securing exemption for a further period of five
     years.
     The management of the Parent Company as well as the subsidiaries consider that the amount of additional
     taxes, if any, that may become payable in relation to the tax years for which assessment are pending would
     not be material to the respective companies' financial position as at 31 December 2004.

b)   Reconciliation of profit with income tax expense
     The reconciliation of the Parent Company's income taxes calculated at the applicable tax rates with the
     income tax expense is as follows:
                                                                                         2004          2003
                                                                                      RO'000        RO'000
     Profit as per financial statements                                                    171            25

     Non-deductible expenses                                                                     15            51
     Tax exemption revenues                                                                    (24)          (54)
     Set off against carried forward losses                                                       9             3
     Tax expense for the year                                                                     -             -

                                                                                                       18
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

25   Income tax (continued)

c)   Deferred tax
     In view of the uncertainty regarding the availability of future taxable profits, no deferred tax asset in
     respect of accumulated losses carried forward, has been recognized in the financial statements.

26   Basic earnings per share

     Basic earnings per share amounts are calculated by dividing the net profit for the year attributable to
     ordinary equity holders of the parent company by the weighted average number of ordinary shares
     outstanding during the year.
                                                                                       2004            2003
                                                                                    RO'000          RO'000
     Net profit for the year attributable to equity holders of the parent.              165               25

     Weighted average number of shares outstanding at 31 December (No.s)                 3,000          3,000

     Basic earnings per share (RO)                                                       0.055          0.008

27   Cash and cash equivalents
                                                         Group                          Parent company
                                                            2004           2003         2004         2003
                                                         RO'000         RO'000        RO'000      RO'000
     Cash                                                       4              3           -            -
     Bank balances                                           354             257         218          135
     Short term deposits                                     150             648           -          451
                                                             508             908         218          586
     Bank overdrafts                                         (22)        (1,034)           -            -
                                                             486           (126)         218          586


28   Segment reporting
     The operations can be classified into two business segments, namely, investment and manufacturing.
     Information with respect to business segments is as follows:
                                                                Investment           Manufacturing
                                                               2004        2003     2004          2003
                                                            RO'000       RO'000  RO'000        RO'000

     Net profit / (loss) for the year                          54            230           117          (205)

29   Capital commitments and contingent liabilities
                                                         Group                          Parent company
                                                            2004           2003         2004         2003
                                                         RO'000          RO'000       RO'000      RO'000
     Guarantees                                              234            246          234          234
     Letters of credit                                        70             56            -            -
                                                             304            302          234          234


                                                                                                   19
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

30   Risk management

     Interest rate risk
     The interest rates on bank loans and overdrafts are at commercial rates negotiated with banks, except for the
     Government soft loans which are at subsidized rates.

     Credit risk
     Credit risk on trade and other receivables is limited to local customers, which are carried at their cost less an
     allowance for any uncollectible amounts. The Group regularly reviews outstanding receivables to attempt to
     limit its credit risk.

     As at 31 December 2004, a single customer of National Cans and Packing Industry LLC accounted for 74% of
     accounts receivable of the Group (2003 - 30.45%).

     Liquidity risk
     The company’s management monitors liquidity requirements on a regular basis and ensures that sufficient funds
     are available to meet any future commitments.

     Currency risk
     Most foreign currency assets and liabilities are due in UAE Dirhams and US Dollars. As the Rial Omani has a
     fixed exchange rate in respect of both these currencies, such balances do not represent significant currency risk.


31   Fair values of financial instruments

     Financial instruments consist of financial assets and liabilities. Financial assets and liabilities carried on the
     balance sheet include cash and bank balances, accounts and other receivables, accounts and other payables, bank
     borrowings, long term loans from commercial banks and the Government, and certain other assets and
     liabilities. The particular recognition methods adopted are disclosed in the individual policy statements
     associated with each item.
     The fair values of the Group’s financial assets and liabilities are not materially different from their carrying
     amounts.

32   Comparatives

     Previous year figures have been regrouped or reclassified, wherever necessary, so that they conform to those of
     the current year.




                                                                                                       20
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

3    Property, plant and equipment

a)   The movement of property, plant and equipment is as set out below:

                                                          Group (RO'000)                                                Parent
                                                               Furnit                       Plant                    Furnit
                                                                  ure                                                    ure
                                                   Motor          and         Office         and                         and
                       Land        Building        Vehicl     fixture         equip        machi           Total     fixture
                                                       es           s          ment         nery                           s
     Cost
     At 1 1.2004          90            608            51            59           27        1,804          2,639          12
     Additions             -              1              -            1            9           36             47           -
     Disposals             -              -            (5)            -            -        (969)          (974)           -
     At 31.12.2004        90            609            46            60           36          871          1,712          12

     Depreciation
     At 1.1.2004            -           106            31            49           23          338           547            9
     Charge for the
     year                   -            25            11             7            2           50             95           2
     Impairment             -             -              -            -            -          206            206           -
     Disposals              -             -            (5)            -            -        (175)          (180)           -
     At 31.12.2004          -           131            37            56           25          419            668          11

     Net Book
     Value
     At 31.12.2004        90            478              9            4           11          452          1,044           1

     At 31.12.2003        90            502            20            10            4        1,466          2,092           3

b)   Out of the Group's total building, assets costing RO 481,028 (2003 - RO 481,028) and RO 58,640 (2003 - RO 58,640) belong
     respectively, are constructed on land leased from Rusayl Industrial Estate for 25 years commencing from 1999.
     Al Batinah Development and Investment Holding Co SAOG
     Notes to the consolidated financial statements for the year ended 31 December 2004

3    Property, plant and equipment (continued)

c)   Of the Group's total property, plant and equipment, assets costing RO 1,150,000 (2003 - RO 1,150,000) and RO 50,000 (200
     by NCPI and OCI respectively are mortgaged to the Government of the Sultanate of Oman to secure soft loans for the respec

d)   Motor vehicles with cost of RO 43,105 (2003 - RO 43,105) are jointly registered in the name of NCPI and the provider of lea




                                                                                                      21
22

								
To top