Docstoc

LOVE

Document Sample
LOVE Powered By Docstoc
					               DHOFAR FISHERIES INDUSTRIES COMPANY SAOG

                               CHAIRMAN’S REPORT
The Honourable Shareholders,

On behalf of the Board of Directors of Dhofar Fisheries Industries Company S.A.O.G., I have
pleasure in welcoming you to the Annual General Meeting and in presenting the Annual
Report and the Audited Financial Statements of the Company for the year ended 31st
December 2003.

I am pleased to inform the Shareholders that, DFICO is taking special care for the
maintenance of the quality standards (HACCP) in all production stages with the quality
control certification (QC No. 92/40) from the European Union (EU).

DFICO is continuing to vigorously build up its market and it is pertinent to note that the
products are being well received especially in the Libyan market and local market.

To avoid the difficulties faced from lack of tuna during the previous period and with the start
of the tuna season in the region, the Company started procuring its fish stock from various
local suppliers to fill the cold storages in the factory. As an alternate source, the sub-
continents have also been visited to avoid dependence on local supplies and purchasing
procedures from local as well as other sources shall be activated upon the receipt of funds
from Shareholders, according to the recommendations of the re-structuring plan, which is
being carried out by one of the leading international consultancy firms.

The Company‟s fishing license was amended to include “Gill netting” of all species of fish.
To utilize this, an agreement has been signed with the owners of the fishing vessel Osman
Reis 3 to take over the operational control of Osman Reis 3 and to share the profits.
Accordingly, a “Bareboat Charter Contract” has been entered into between Amar Company (
the Owners of the Ship) and Dhofar Fisheries Industries Company on 1st September 2003.
The past dues of the Vessel have been cleared, repair and maintenance works are being
carried out and gill nets have been purchased to make it suitable for fishing all types of fish
in addition to tuna, with a newly recruited crew. During a recent meeting, the Board of Oman
& Emirates Investment Holding Company agreed to purchase two vessels and lease them to
the Company to help it attain self-sufficiency for its raw materials.

DFICO has achieved a turnover of RO. 506,847 during the year ended 31st December 2003
and has incurred a Loss of RO. 1,973,928. The cumulative carried forward loss amounts to
RO. 5,877,115 as on 31st December 2003 which has resulted in an erosion of share capital to
the extent of about 117%.

Certain factors have affected the performance of the Company, such as, delay in delivery of
Fishing Vessels due to some dispute with the Contracting Company and the cyclone that has
previously hit the Dhofar region during the tuna season, being the cause for affecting the raw
material availability. The Company has now overcome some of these factors. The
Management believes that, with the appreciable improvement in the fish availability with
lower cost, major overheads cost reduction and with adequate working capital support, the
Company can be turned around and would be put into an efficient and profitable operation in
the near future if God willing.
In accordance with the restructuring plan, the Company has implemented a drastic reduction
in its manpower and achieved an overall reduction to the tune of 40% of its costs. Further, the
Board of Directors have approved in principle to the reduction of Company capital to RO 2.5
Mio. and write off the accumulated losses in an amount equal to capital reduction and inject
RO 1.5 Mio. of fresh equity with equal contribution from three major shareholders. To
facilitate the capital restructuring the Company has sought professional advice from a
consultant, to carry out a diagnostic study aimed at assessing the feasibility of a turnaround
plan and a Business Plan for the next year.

Meanwhile we wish to inform the shareholders that we have been in discussion with
prospective investor also who would participate in the equity of the Company proposed to be
issued during the current year. As a part of the steps being taken, the Company follows up
the procedures to obtain an additional soft loan.

I take this opportunity to thank the DFICO team and my fellow directors for their continued
support and co-operation. I would like to express my sincere gratitude and thanks to the
various Ministries, particularly the Ministry of Agriculture and Fisheries and the Ministry of
Commerce and Industry for their continued support and guidance without which the project
would not have reached its present stage. I also would like to thank Oman & Emirates
Investment Holding Company SAOG, Gulf Investment Corporation, Kuwait, The Arab
Investment Company, Riyadh, the Spanish Partners ACTEMSA, Spain, National Bank of
Oman SAOG, Bank Muscat SAOG and Bank Dhofar Al-Omani Al-Fransi SAOG for the co-
operation and support given by them for the Company.

May God help us all to serve our dear Country under the wise leadership of His Majesty
Sultan Qaboos bin Said and may God‟s Grace be bestowed on him in abundance and protect
him.




Awadh Mohammed Bamkhalef
Chairman.
To avoid the difficulties faced from lack of tuna during the previous period and with the start
of the tuna season in the region, the Company started procuring its fish stock from various
local suppliers to fill the cold storages in the factory. As an alternate source, the sub-
continents have also been visited to avoid dependence on local supplies and purchasing
procedures from local as well as other sources shall be activated upon the receipt of funds
from Shareholders, according to the recommendations of the re-structuring plan, which is
being carried out by one of the leading international consultancy firms.
Meanwhile we wish to inform the shareholders that we have been in discussion with
prospective investors also who would participate in the equity of the Company proposed to
be issued during the current year. As a part of the steps being taken, the Company follows up
the procedures to obtain an additional soft loan.
:
7
Composition and name of members and Chairperson:-
                   REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF
                     DHOFAR FISHERIES INDUSTRIES COMPANY (SAOG)
         We have audited the balance sheet of Dhofar Fisheries Industries Company SAOG (“the Company”), as
of 31 December 2003 and the related statements of income and cash flows for the year then ended, set out on
pages 2 to 18.

        Respective responsibilities of the Board of Directors and Auditors

        These 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.

        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 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 financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.

        Adverse Opinion

The Company has been unable to obtain target level of market share and continues to incur losses. The
Company incurred a net loss of approximately RO 1.97 million during the current year and at
31 December 2003 the aggregate accumulated losses amounted to approximately RO 5.9 million and at
that date the share capital of the Company has been fully eroded. At 31 December 2003, the overdue
loans together with the interest amounted to approximately RO 492,000, and the Company‟s current
financial position indicates that loan repayment commitments in the amount of RO 1.34 million due in
2004 will not be met. The Board of Directors have confirmed that an extra ordinary general meeting
will be convened shortly to consider restructuring of the share capital. If the share capital is not
restored the Company may not be able to continue its operations as a going concern and in accordance
with Article 129 of the Commercial Companies Law, each shareholder or creditor shall reserve the
right to apply for the dissolution of the Company. In such an event, adjustments may be required
relating to the recoverability and classification of recorded asset amounts or to amounts and
classification of liabilities. These financial statements do not include such adjustments.

         In our opinion, because of the effects of the matters discussed in the preceding paragraph, the financial
statements do not present fairly, the financial position of Dhofar Fisheries Industries Co. (SAOG) as at 31
December 2003 and 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
do not comply with the Commercial Companies Law of 1974, as amended.

        In our opinion, the financial statements comply with the disclosure requirements of the Capital Market
Authority.
                                 Share            Accumulated
                                capital                losses                               Total
                                   RO                     RO                                 RO

1 January 2002            5,000,000                  (1,730,304)                   3,269,696

Net loss for the year                        -        (2,172,883)                 (2,172,883)
                        -----------------------   --------------------------   --------------------------
31 December 2002          5,000,000                   (3,903,187)                   1,096,813

Net loss for the year                        -        (1,973,928)                 (1,973,928)
                        -----------------------   --------------------------   --------------------------
31 December 2003          5,000,000                   (5,877,115)                     (877,115)
                          ==========                ===========                   ===========
(a)   Statement of compliance

               These financial statements have been prepared in accordance with International Financial
      Reporting Standards (“IFRS”) promulgated by the International Accounting Standards Board (“IASB”),
      interpretations issued by the Standing Interpretations Committee of the IASB, requirements of the
      Commercial Companies Law of 1974, as amended, and the disclosure requirements of the Capital
      Market Authority.

(b)   Basis of accounting

              These financial statements have been prepared on the historical cost basis, except that
      investments available for sale are stated at their fair value and the Government soft loan is stated at
      amortised cost.

               The accounting policies have been consistently applied by the Company and are consistent with
      those used in the previous year.

(c)   Foreign currencies

               Transactions denominated in foreign currencies are translated to Rials Omani at the foreign
      exchange rate ruling at the date of the transaction. 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 arising on translation are recognised in the income
      statement.

(d)   Property, plant and equipment

                Items of property, plant and equipment are stated at cost less accumulated depreciation and
      impairment losses. The cost of self-constructed assets includes the cost of materials, direct labour and an
      appropriate proportion of production overheads. Other subsequent expenditure is capitalised only when
      it increases the future economic benefits embodied in the item of property, plant and equipment. All
      other expenditure is recognised in the income statement as an expense as incurred.
(e)   Depreciation

                Depreciation is charged to the income statement on a straight-line basis over the estimated
      useful lives of items of property, plant and equipment. Capital work-in-progress is not depreciated. The
      estimated useful economic lives are as follows:
                                                                                                Years
                Buildings and civil works                                                          40
                Plant and machinery                                                                15
                Furniture and fixtures                                                              5
                Office equipment                                                                    5
                Motor vehicles                                                                      5

(f)   Inventories

               Inventories are stated at the lower of cost and net realisable value. Net realisable value is the
      estimated selling price in the ordinary course of business, less the estimated costs of completion and
      selling expenses. The cost of inventories is based on the weighted average principle and include
      expenditure incurred in acquiring the inventories and bringing them to their existing location and
      condition. In the case of finished goods, cost includes an appropriate share of overheads based on
      normal operating capacity.

(g)   Trade and other receivables




(h)   Investments

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

               Investments are classified as available for sale and are stated at fair value, with any resultant
      gain or loss recognised in the income statement.

             The fair value of the investments available-for-sale is their quoted bid price at the balance sheet
      date. Available-for-sale investments are recognised /de-recognised by the Company on the date it
      commits to purchase/sell the investments.

(i)   Cash and cash equivalents
               Cash and cash equivalents comprise cash balances and bank deposits. Bank borrowings that
      are repayable on demand and form an integral part of the Company‟s cash management are included as a
      component of cash and cash equivalents for the purpose of the statement of cash flows.
(j)   Impairment
              The carrying amounts of the Company‟s assets, other than inventories [refer policy (f) above
      and deferred tax asset (refer policy (r) below], 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 recognised in the income statement whenever the carrying
      amount of an asset exceeds its recoverable amount.
               The recoverable amount of the Company‟s investments in receivables is calculated as the
      present value of future cash flows, discounted at the original effective interest rate inherent in the asset.
      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 in respect of investment or receivable is reversed if the subsequent increase
      in recoverable amount can be related objectively to an event occurring after the impairment loss was
      recognised. In respect of other assets, 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 assets‟ carrying amount does not exceed the carrying amount that would have been determined
      net of depreciation or amortisation, if no impairment loss has been recognised.

(k)   Employee benefits
               Contributions to a defined contribution retirement plan, for Omani employees in accordance
      with the Oman Social Insurance Scheme, are recognised as expense in the income statement as incurred.
               Provision for non-Omani employee terminal contributions, which is an unfunded defined
      benefit retirement plan, is made in accordance with Omani Labour Laws and is based on the liability
      that would arise if the employment of all employees were terminated at the balance sheet date.

(l)   Provisions
               A provision is recognised in the balance sheet when the Company has a legal or constructive
      obligation as a result of a past event, and it is probable that an outflow of economic benefits will be
      required to settle the obligation. If the effect is material, provisions are determined by discounting the
      expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
      money and, where appropriate, the risks specific to the liability.

(m)   Trade and other payables
               Trade and other payables are stated at their cost.

(n)   Deferred Government grant
               Interest subsidy is recognised in the balance sheet initially as a deferred Government grant
      when there is reasonable assurance that it will be received and that the Company will comply with the
      conditions attached to it. This deferred Government grant is amortised over the life of the loans to
      which it relates on a systematic basis in the same periods in which the interest expense is incurred.
      Amortisation of the deferred Government grant is recognised within net financing costs.
                                                                                                              Page 9




(o)   Revenue
               Revenue from sale of goods is recognised in the income statement when the significant risks
      and rewards of ownership have been transferred to the buyer. No revenue is recognised if there are
      significant uncertainties regarding recovery of the consideration due, associated costs or the possible
      return of goods.

(p)   Operating lease payments
               Payments made under operating leases are recognised in the income statement on a straight line
      basis over the term of the lease.

(q)   Net financing costs
                Net financing costs comprising interest payable on borrowings, interest on suppliers credit and
      interest subsidy are recognised in the period in which they are incurred. Interest income is recognised in
      the income statement as it accrues and interest costs incurred in connection with borrowings are
      expensed as incurred as part of net financing costs.
               Finance charges comprising of interest payable on borrowings attributable to construction of
      certain property, plant and equipment are capitalised as part of the cost of that property, plant and
      equipment.

(r)   Income tax
                Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is
      recognised in the income statement except to the extent that it relates to items recognised directly to
      equity, in which case it is recognised in equity.
               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 realisation 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 recognised only to the extent that it is probable that future taxable profits
      will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent
      that it is no longer probable that the related tax benefit will be realised.

(s)   Segment reporting
              A segment is a distinguishable component of the Company that is engaged in providing
      products or services (business segment) or in providing products or services within a particular
      economic environment (geographical segment), which is subject to risks and rewards that are different
      from those of other segments.



                The details of Property, plant and equipment are set out on schedule I on page 18.
                                                                                               Page 10




Al Mawarid Securities Co. SAOG                                                 -                     663
United Finance Co. SAOG                                              4,268                       3,960
Oman Investment and Finance Company SAOG                                 350                               -
Fincorp SAOG                                                             843                               -
                                                                -----------------              --------------
Market value                                                         5,461                       4,623




Current accounts                                              6,250                      14,427
Deposit accounts                                              4,282                        4,221
Cash in hand                                                    675                            961
                                                          ────────              -----------------------
                                                             11,207                      19,609
                                                          =========                 ========
Deposit accounts bear interest at rates ranging between 1% and 1.75% per annum.
                                                                                                         Page 11




               The Company has obtained credit facilities comprising overdraft, guarantees and letter of credit
     from a commercial bank in the aggregate amount of RO 1,901,000. The facilities bear interest ranging
     between 10% and 10.50% per annum. The credit facilities are jointly secured with the deferred letter of
     credit facility (see note 12), by a registered pledge by Oman and Emirates Holding Company and
     ACTEMSA of their current shareholding aggregating 1.25 million shares in favor of the bank. The
     credit facilities have not been renewed since July 2003.




11   Related party transactions

              The Company has entered into transactions with entities in which certain Directors of the
     Company have an interest. In the ordinary course of business, such related parties provide goods and
     render services to the Company. The Company also provides goods and renders services to such related
     parties. These transactions are entered into on terms and conditions, which the Directors believe could
     be obtained on an arm‟s length basis from independent third parties.

              Transactions with related parties or holder of 10% or more of the Company‟s share holders or
     their family members included in the financial statements are as follows:

             Provision of services from:
             Shareholders holding 10% or more interest in the Company
             Interest expense                                                61,761                47,410
             Others                                                             5,243           219,988
                                                                      ═══════                  ══════
             Board meeting fee paid to Directors                                8,250                 4,950
                                                                      ═══════                  ══════
             Sales of goods to entities related to:
             Others                                                                       -     527,181
                                                                      ═══════                  ══════
             Amounts due to related parties at year-end are as follows:
             Loan from Oman and Emirates Holding Company Ltd. 1,280,216                         511,113
             Others                                                          12,497                   8,731
                                                                     -----------------------   -------------------
                                                                      1,292,713                 519,844
                                                                      ═══════                  ══════
             Amounts due from related parties at year-end are as follows:
             Others                                                                       -           9,663
                                                                      ═══════                  ══════
             The bridge finance from Oman and Emirates Holding Company Ltd. is at an interest rate of 8%
     per annum on the monthly outstanding balance and no repayment terms have been set.
                                                                                                                                                   Page 12




12                                                                                     Term loans                                                     2003
2002

        Non-current liabilities
        Bank Muscat loan                                                                 1,860,000                                          2,170,000
        NBO - Deferred LC term loan                                                      1,156,999                                              657,667
        NBO - Deferred letter of credit                                                      114,857                                        1,616,522
        Government soft loan                                                             4,000,000                                          4,000,000
        Deferred Government grant                                                          (949,071)                                      (1,061,548)
                                                                                        ----------------------                            -----------------------
                                                                                         6,182,785                                          7,382,641
                                                                                        ----------------------                            -----------------------
        Current liabilities
        Deferred LC term loan                                                            1,034,570                                                             -
        Bank Muscat loan                                                                   310,000                                              310,000
                                                                                        ____________                                      -----------------------
                                                                                         1,344,570                                              310,000
                                                                                        ____________                                      ___________
                                                                                         7,527,355                                          7,692,641
                                                                                        ==========                                         ==========
        Terms and debts repayments schedule
                          Interest                                    Under                      1-2                      2-5                      Over
                              rate             Total                  1 year                   years                    years                    5 years
                            % p.a.               RO                      RO                      RO                       RO                         RO
        Bank Muscat loan         8         2,170,000                310,000                  310,000                  930,000                   620,000
        Deferred letter of credit and
        Deferred term loan 10.75           2,306,426               1,034,570                 768,886                  502,970                                  -
        Government soft loan 3             3,050,929                              -                         -         791,654               2,259,275
                                          ----------------------    ----------------    ----------------------   ----------------------    ----------------------
                                           7,527,355               1,344,570             1,078,886                2,224,624                 2,879,275
                                          ==========               ========             ==========               ==========                ==========
The Company has obtained loan from Bank Muscat in the aggregate amount of RO 2.480 million. The
loan is repayable in sixteen half yearly installments of RO 155,000 each commencing 1 April 2003. The
loan is secured against a collective corporate guarantee in the amount of RO 2.48 million from Oman &
Emirates Investment Holding Company SAOG, a shareholder company. The loan agreement restricts
the payment of dividend unless all loan instalments and interest are regularly paid.
          The Company has obtained a deferred letter of credit facility from National Bank of Oman in
the amount of RO 2.545 million, which bears an interest of 6% per annum. The term loan will be used to
settle liabilities crystallizing under the deferred letter of credit, term loan has been opened and
repayment of term loan will commence 6 months after first draw down is made and will be in equated
quarterly instalments over a period of three years. The amount due is payable within two years of the
date of presentation of documents to bank under letter of credit. The facility is secured against a
collective corporate guarantee in the amount of RO 3.645 million from Oman & Emirates Investment
Holding Company SAOG, a shareholder company and pledge of the Company‟s shares in the aggregate
amount of RO 1.25 million by Oman & Emirates Investment Holding Company SAOG and Actividades
Empresariales SA (ACTEMSA). The Company has not paid the loan installments and the related
interest. Accordingly at 31 December 2003, the overdue loan installment amounted to RO 302,958 and
the related overdue interest amounted to RO 189,024.
                                                                                                                                                       Page 13




     12                                                    Term loans (continued)

               The loan from the Government of the Sultanate of Oman (“the Government”) is repayable in
     eight equal yearly instalments of RO 500,000 each, commencing June 2005. The loan is secured against
     a first charge over the building and plant and machinery of the Company in the aggregate amount of RO
     4 million and the value of second charge of RO 8.446 million. The loan agreement contains restrictive
     covenants that relate to the payment of dividends and investments or loan to affiliates and assignment of
     the insurance policies in favor of the bank.

              The loan from the Government is stated at amortized cost, which has been determined by the
     Management using the effective interest rate method. The effective interest rate was 9% per annum.
     The Government subsidy on loans is recognized in the balance sheet as „deferred Government grant‟ and
     amortized over the life of the loans to which the subsidy relates on a systematic basis in the same
     periods in which the loan is repaid. The amortisation of the deferred Government grant for the year
     2003 amounts to RO 112,477 (2002: RO 189,270) and is recognized within net financing costs.

13   Net financing cost                                                                            2003                                                    2002
                                                                                                    RO                                                      RO

     Interest on bank borrowings                                                            758,964                                                 600,204
     Amortization of deferred Government grant                                              112,477                                                 189,270
     Other finance expenses                                                                    42,571                                                  25,997
                                                                                         ---------------------                                    --------------------
                                                                                            914,012                                                 815,472
                                                                                         ---------------------                                   ---------------------
     Less: Deferred Government grant                                                      (112,477)                                               (189,270)
                                                                                         ---------------------                                   ---------------------
                                                                                            801,535                                                 626,202
                                                                                          =========                                               =========
14   Equity

              Share capital

     The Company's authorized share capital is RO 8 million (8,000,000 shares of RO 1 each). The issued
     and fully paid up share capital is 5 million shares of RO 1 each (2002: 5,000,000 shares of RO 1 each).

     Shareholder‟s who own approximately 10% or more of the Company‟s share capital at 31 December is:

                                                                          2003                                            2002
                                                     ------------------------------------------------               -------------------------------------------------
                                                                     No. of                                            No. of
                                                         Shares held                            %                shares held %
              Oman & Emirates Investment Holding
              Company SAOG                                   1,249,998                  25.00                      1,257,359 25.15
              Gulf Investments Corporation                   1,190,547                  23.81                      1,190,547 23.81
              The Arab Investment Company S.A.A.             1,190,547                  23.81                      1,190,547 23.81
              Actividades Empresariales SA
              (ACTEMSA)                                          462,000              9.24                             462,000             9.24
                                                           ----------------------- ------------                  -----------------------   -------------
                                                             4,093,092 81.86                                       4,100,453               82.01
                                                               ========= ======                                    ==========              =======
                    Page 14




==========   ============
                                                                                                       Page 15




19                                                             Segmental reporting




20Income tax

         In accordance with Ministerial Decision No.18/97 issued by the Ministry of Finance, the
Company has been exempted from income tax for a period of five years from the commencement of
commercial operations till 1 September 2006. A deferred tax asset in respect of tax losses incurred
during the year and previously has not been recognised, as it is not possible to ascertain whether taxable
profits will be available in future against which the asset can be utilised.

21Leases

         The Company has leased land from Public Establishment for Industrial Estates (PEIE), for a
period of twenty-five years, under an agreement that expires on 4 November 2021. At 31 December
2003 future minimum lease commitments under non-cancelable operating leases were as follows:
                                                                            RO

        Less than one year                                                       19,110
        Between one and five years                                               38,220
        More than five years                                                     124,215
                                                                                 -------------------
                                                                                 181,545
                                                                                 =======
22Net assets per share

         Net assets per share is calculated by dividing the net assets at the year-end by the number of
shares outstanding at the end of the year as follows:



        Net assets (RO)                                             (877,115)                           1,096,813
                                                                  ==========                           ==========
        Number of shares (Nos)                                     5,000,000                            5,000,000
                                                                  -----------------------              -----------------------
        Net assets per share (baizas)                                                  -                              219
                                                                  ==========                           ==========
23       Basic loss per share
        Basic loss per share is calculated at the end of the year by dividing the net loss for the year by
the weighted average number of shares outstanding at the end of the year as follows:
        Net loss for the year (RO)                                (1,973,928)                      (2,172,883)
                                                                  ==========                =========
        Weighted average number of shares (Nos)                    5,000,000                5,000,000
                                                                  ==========                =========
        Basic loss per share (Baizas)                                   (395)                            (435)
                                                                  ==========                =========


      Exposure to credit, interest rate, and currency fluctuation risk arises in the normal course of the
Company‟s business.
        Credit risk
        The Company has a credit policy in place and exposure to credit risk is monitored on an
ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.
         The Company does not require collateral in respect of financial assets. At balance sheet date,
one debtor comprises approximately 50% of the total debts. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset, in the balance sheet.
        Interest rate risk
        The Company manages its exposure to interest rate risk by ensuring that significant borrowings
and long-term financing are on a fixed rate basis. The interest bearing deposits and the bank borrowings
have short maturity periods.
        Foreign currency fluctuation risk
         Substantially all of the Company‟s sales and trade purchases are in Rials Omani, US Dollars or
currencies linked to U.S. Dollars. The exchange rate between Rials Omani and US Dollar has remained
unchanged since 1986.
        Fair value
        The Board of Directors consider the fair values of all financial assets and liabilities to
approximate their carrying value.
     Page 17




RO     RO

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:23
posted:11/5/2010
language:English
pages:38