Directors’ Report for the year ended 31st March 2024

Dear Shareholders,

On behalf of the Board of Directors, I have great pleasure in welcoming you to the 30th Annual General Meeting of Al Anwar Investments SAOG (AAI). I take this opportunity to place before you the Annual Report on the activities and performance of your company for the financial year ended 31st March 2024.

Overview of the Group results
AAI has maintained a prudent and pro-active approach towards managing its investments. Our portfolio investment companies are making efforts to overcome the present challenging economic environment. Some of our portfolio investment companies have been resilient in these difficult market conditions and consequently have maintained their profitability. Our immediate objective is to support our portfolio investment companies and to take advantage of investment opportunities as the economic situation improves.

The Company reported a consolidated net profit of OMR 532,000 for the year ended on 31st March 2024 as against a profit of OMR 354,000 for the year ended on 31st March 2023, an improvement of 50%, mainly account of realized gain on the sale of its investment classified as fair value.
The total comprehensive income for the year ended on 31st March 2024 was OMR 1,568,000 as against last year’s OMR 1,969,000, a decline of 20%.
The shareholders’ equity at 31st March 2024 is OMR 31.9 million. Net assets per share as of 31st March 2024 is 155baizasper share as against 157 baizas for the previous year.

Dividends

The company’s accumulated profits (retained earnings) as of 31st March 2024, are OMR 4.5 million. The Board of Directors recommends a cash Dividend of 5% (Last year: 5%) and a Stock Dividend of 3%(last year: 3%) for the approval of shareholders.

Financial statements

The audited consolidated financial statements presented include the following:

1. The results of Subsidiary Companies for the year ended 31st December 2023 of the following:
a) Al Anwar International Investment LLC, 100% subsidiary;
b) Al AnwarTaleem LLC, 100% subsidiary
c) Al Anwar Hospitality SAOC, a 100% subsidiary in the hospitality sector; and
d) Al Anwar Industrial Investments SAOC, 100% subsidiary.
2. The share of profit/(loss) of Associate Companies for the year ended 31st December 2023(AlRuwad International Education Services SAOC up to 31st January 2024) in which AAIowns between 20% and 50% of share capital or has significant influence.
3. Dividends from investments classified at Fair Value.
4. Realized and unrealized gains/losses from investment classified at Fair Value.

Performance of Investments

Associates

1. Al Maha Ceramics SAOG (AMC) (AAI Stake – 18.74%):

AMC reported revenue of OMR 5,707,121 for the year ended on 31st December 2023, as compared with OMR 9,977,477 for last year, a decrease of 42.8%. Net loss after tax for the year is OMR (1,120,593)as compared to net profit of OMR 3,123,618in the previous corresponding period, a decrease of 135.8%. Operational Profit of parent company is OMR582,000 as compared to OMR 3,154,000 in the previous year, a decrease of 81.5 %. The company recorded Share of Loss from its associate, amounting to OMR 1,615,358.

2. Voltamp Energy SAOG (VE) (AAI Stake – 24.68%):

VE reported revenues of OMR 30,512,671 during the year ended on 31st December 2023, a decrease of 14.8% as compared to OMR 35,842,036 for the last year. VE  reported a  net profit(attributable to shareholders of Parent Company) of OMR 816,510 during the year as compared to loss of OMR (1,460,924) in last year. The Company made a turnaround after 3 years when performance was affected by the global market slowdown and supply chain disruptions.

3. Arabia Falcon Insurance Company SAOG (AFIC)(AAI Stake – 22.62%):

AFIC recorded Insurance Revenue of OMR 20,973,982 during the year ended on 31st December 2023 as compared to OMR 21,072,323  for the last year. The Net profit after tax for the year is OMR 741,594 against OMR 1,029,406 of last year, a decrease of 28%, due to the decrease in net insurance service results. Growth in the business of the company is in line with the market. The transition from IFRS 4 to IFRS 17 in the reporting of insurance contracts resulted in a reduction in reported net income. However, this variance is expected to be temporary and should not significantly affect future financial years, as the impact has been fully accounted for in the current financial statements.

4. Al Ruwad International for Education Services SAOC (AIS) (AAI Stake – 43.51%):

The Company has reported lower revenue and a loss for the twelve months period ended on 31st January 2024 as compared to loss of last year. This is primarily due to lower number of students enrolled in the school during academic year.
The school signed a Governance agreement on 4th November 2022 with Ellesmere School, United Kingdom. The school’s name has also changed to “Ellesmere Muscat International School”. This should improve the school’s competitive position and support it in attracting higher number of students in future years.

5. National Biscuits Industries Ltd. SAOG (NABIL) (AAI Stake – 29.22%):

NABIL reported revenue of OMR 16,453,000 for the twelve months period ended on 31st December 2023 as against OMR 14,115,000 of last year, an improvement of 16.6% from last year. The net profit for the period increases to OMR 601,000 as against OMR 144,000 for the same period of last year, an improvement of 317%.

6. National Detergent Co. SAOG (NDC)(AAI Stake – 25.24%): 

NDC reported revenues of OMR 21,180,627 for the year ended 31st December 2023 as compared to last year’s 19,641,345, a growth of 7.8%. The Company reported a net profit of OMR 657,519 as compared to net loss of OMR (440,334)of last year.

7. Oman Chlorine SAOG (OC)(AAI Stake – 22.11%)

Oman Chlorine Group has reported revenue of OMR 32,174,460 for the year ended 31st December 2023 as compared with OMR 31,359,462in the previous period, a growth of 2.6%. The net profit (Attributable to Parent Company Shareholders) for the period is OMR 1,968,036 as compared to profit of OMR 3,919,497in the previous period, a decline of 50%.
The Oman operation (Parent Company) reported a net profit of OMR 1,801,261 compared to previous period of OMR 2,685,042a decline of 32.9%. The company consistently maintained the capacity utilization of the plant above 100%. Despite of decline in caustic prices globally, company was able to improve the sales due to higher quantities sold.
Union Chlorine LLC, UAE, a subsidiary, has reported net profit of OMR 543,564 for the year ended on 31st December 2023, compared to profit of OMR 1,118,710 in previous period. The parent company’s share of profit is OMR 325,595. The plant operating at capacity utilization of 100%, the revenue was higher while capitalizing on the international demand and securing more contracts at higher realizations. The company has established long‐term supply agreements with major oil and gas companies and has also established direct supplies to end user within UAE and GCC, this is expected to positively reflect in the performance.

Gulf Chlorine WLL, Qatar, a subsidiary, has reported net loss to OMR (304,592)during the year ended 31st December 2023, compared to profit of OMR 1,109,532 in previous period. The parent company’s share of loss is OMR (149,250).

Other significant investments

1. Bank Dhofar SAOG

AAI has an equity stake of 1.51% in Bank Dhofar at carrying value of OMR 7,250,000 as at 31st March 2024. The investment is classified at fair value. The Bank has reported total operating Income of OMR 144.1mn, an improvement of 0.6% from last year’s OMR 143.1mn. Net profit after tax for the year is OMR 38.8mn as compared to OMR 34.2mn in the previous corresponding period, an increase of 13.5%.

2. Dhofar International Development and Investment Co SAOG (DIDIC)

AAI has an equity stake of 6.84% in DIDIC at carrying value of OMR 5,875,000 as at 31st March 2024. The investment is classified at fair value. The company has achieved consolidated net profits of OMR 7,758,251 for the year 2023, as compared to net profit of OMR 9,690,896 of last year. The decrease in profits was primarily due to unrealized loss on financial assets amounting to OMR(2.09 million) as against an unrealized gain of OMR 0.74 million in 2022. Moreover, the Company also charged off OMR 1.39 million which were unamortized upfront fees paid on a previous loan, which was refinanced during 2023.

Omanisation

AAI has always been fully committed of recruiting and training Omani employees and developing and promoting the local talent.AAIOmanisation level at 31st March 2024 is 57%.

Outlook

Oman’s economy is expected to continue to improve as oil prices recovers from the lows witnessed in prior years. S&P Global Ratings has revised Oman’s rating outlook to positive from stable, citing improving fiscal position, progress on reforms and rising oil prices.

AAI has maintained a prudent and active approach towards managing its investment portfolio. Our objective this year is to:

• continue to support and pro-actively manage our investment companies and,
• take advantage of investment opportunities available in the market
We are confident that AAI and its Group companies will continue to play a pivotal role in Oman’s economic growth, create job opportunities for Omani nationals, and attract foreign investments in the Sultanate of Oman.

Acknowledgement
On behalf of the Board of Directors, I would like to take this opportunity to express our greetings and good wishes to His Majesty Sultan Haitham bin Tarik, and pray to Allah to grant him and his government success to lead the country and the people to greater prosperity and progress.
The Board records its sincere appreciation to the Ministry of Commerce and Industry and Investment Promotion, Financial Services Authority, Muscat Stock Exchange, Banks, and Auditors for their continued support.
I would also like to express my sincere appreciation to the Board of Directors of all our portfolio investment companies for direction given to the managements of the respective companies. I place on record my sincere thanks and appreciation for the dedicated efforts of the management team and all employees of our portfolio investment companies.

I would also like to convey my sincere thanks to the Shareholders of Al Anwar Investments SAOG for the confidence they have reposed in the company and its Board.

For & on behalf of the Board of Directors of
Al Anwar Investments SAOG

Dr. Shabir Moosa Al Yousef
Deputy Chairman