Almaha Ceramics Prospectus

His Majesty Sultan Qaboos bin Said
PROSPECTUS
Al Maha Ceramics SAOG

(Under Transformation)
(PO Box: 482, PC: 322, Falaj Al Qabail, Sohar, Sultanate of Oman)
Tel; +968 26752322, Fax: +968 26752177
www.almahaceramics.com
Initial Public Offering of 20,000,000 Ordinary Shares

Offer Price: Bzs 397 per Share
(Comprising a nominal value of Baizas 100 per share, Share premium of
Bzs 295 per share, and Offer expenses of Baizas 2 per share)
OFFER PERIOD
Offer Opens on: 16th September 2014;

Offer Closes on: 15th October 2014
FINANCIAL ADVISOR AND ISSUE MANAGER
Oman Arab Bank SAOC

Investment Management Group
P.O. Box 2010, P.C. 112, Ruwi, Sultanate of Oman
Tel: +968 2482 7399 Fax: +968 2482 7367
www.oabinvest.com
COLLECTING BANKS
LEGAL ADVISORS TO THE COMPANY
This Prospectus has been prepared in accordance with the requirements prescribed by the Capital Market Authority (the CMA).
This is an unofficial English translation of the original Prospectus prepared in Arabic and approved by the CMA in accordance
with Administrative Decision no. KH/44/2014 dated 3rd September 2014. The CMA assumes no responsibility for the accuracy
and adequacy of the statements and information contained in this Prospectus nor will it have any liability for any damage or loss
resulting from the reliance upon or use of any part of the same by any person.
This prospectus does not constitute an offer to sell or an invitation by or on behalf of the Company to subscribe to any of the
Shares in any jurisdiction outside of Oman where such distribution is, or may be, unlawful.
Important Notice to Investors

All investors are advised to read this notice
The objective of this Prospectus is to present material information that may assist investors to make
an appropriate and informed decision as to whether or not to invest in the Shares.
This Prospectus includes all material information and data and does not contain any misleading
information or omit any material information that would have a positive or negative impact on the
decision of whether or not to invest in the Shares.
The Directors of the Company are jointly and severally responsible for the integrity and adequacy of
the information contained in and confirm that to their knowledge appropriate due diligence has been
conducted in the preparation of thisProspectus and further confirm that no material information has
been omitted, the omission of which would render this Prospectus misleading.
All investors should examine and carefully review this Prospectus in order to decide whether it
would be appropriate to invest in the Shares by taking into consideration all the information
contained in this Prospectus in its proper context. Investors should not consider this Prospectus as
a recommendation by the Company, by the Directors, the Issue Manager or the Legal Advisors to
buy the Shares. Every investor shall bear the responsibility of obtaining independent professional
advice on the investment in the Shares and shall conduct independent evaluation of the information
and assumptions contained herein using appropriate analysis or projections.
No person has been authorized to make any statements or provide information in relation to the
Company or the Shares other than the persons whose names are indicated in this Prospectus to
do so. Where any person makes any statement or provides information it should not be taken as
authorized by the Company, the Issue Manager or the Legal Advisors.
Forward Looking Statement

This Prospectus contains statements that constitute statements relating to intentions, future acts and
events. Such statements are generally classified as forward-looking statements and involve known and
unknown risks, uncertainties and other important factors that could cause those future acts, events
and circumstances to materially differ from the way implicitly portrayed within this Prospectus. The
use of any of the words aim, anticipate, continue, estimate, objective, plan, schedule,
intend, expect, may, will, project, propose, should, believe will continue, will pursue
and similar expressions are intended to identify forward-looking statements. These forward-looking
statements are not historical facts but reflect current expectations regarding future results or events
and are based on various estimates, factors and assumptions. The Company believes the expectations
reflected in those forward-looking statements are reasonable, but no assurance can be given that these
expectations will prove to be correct.
Moreover, forward-looking statements involve inherent risks and uncertainties and speak only as at the
date they are made and should not be relied upon as representing the Companys estimates as of any
subsequent date.
The Company cautions investors that a number of important factors could cause actual results or
outcomes to differ materially from those expressed in any forward-looking statements. These factors
include, but are not limited to, the following:

Level of demand for the Companys products and services;

The competitive environment; the potential increase in number of suppliers;
Regulatory, legal and fiscal developments;
Fluctuations in foreign exchange rates, equity prices or other rates or prices;
The inability to estimate future performance;
The performance of the Omani economy; and
Other factors described under chapter 10 Risk Factors and Mitigants in this Prospectus.
The Company cannot provide any assurance that forward-looking statements will materialize. The
Company, the Issue Manager and the Legal Advisors and any of their respective affiliates disclaim any
intention or obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise unless required by securities laws.
For a description of material factors that could cause the Companys actual results to differ materially
from the forward-looking statements in this Prospectus, see chapter 10 titled Risk Factors and
Mitigants of this Prospectus. The risk factors described in this Prospectus are not necessarily all of
the important factors that could cause actual results to differ materially from those expressed in the
forward-looking statements.
After listing on the MSM, the Company will adhere to the disclosure rules and regulations of the CMA,
which includes making timely disclosure in relation to the Companys financial results. The Company
advises prospective Applicants and Shareholders to track any information or announcements made by
it after listing through the MSM website at www.msm.gov.om
Presentation of Financial and Other Information

Financial Data: This Prospectus includes certain projections. The projections are based on the
expectations of external conditions and events relating to the Company, the competitive environment
in Oman and the industry in which the Company operates. These projections are forward-looking
statements that involve inherent risks and uncertainties. Prospective Applicants are cautioned that a
number of important factors could cause actual results or outcomes relating to the Company to differ
materially from those expected in these projections.
In addition, the Issue Manager has not independently verified any of the projections and financial/ other
data prepared by the Directors or the firm engaged to prepare the feasibility study and business plan.
Please see the chapter Risk Factors and Mitigants.
The Companys Financial Year commences on January 1 and ends on December 31 of each year. In
this Prospectus, any discrepancy between the total and the sum of the relevant amounts listed is due
to rounding.
Currency of Presentation: All references to Rials or RO are to Omani Rials, the official currency of
Oman. The Omani Rial is pegged to the U.S. Dollar and the pegged exchange rate is 1 Omani Rial =
2.6008 US$. 1 Omani Rial is composed of 1000 Baizas.
Summary or Extracts of Documents: Any summaries of documents or extracts of documents contained
in the Prospectus should not be relied upon as being comprehensive statements in respect of such
documents.
Industry and Market Data: Industry and market data in this Prospectus has been obtained from third
parties or from public sources such as websites and publications. Neither the Directors of the Company
nor the Issue Manager nor the Legal Advisors have independently verified any of the data from third
party sources referred to in this Prospectus or ascertained the underlying assumptions relied upon by
such sources. In addition, the Issue Manager or the Legal Advisors have not independently verified
any of the industry data or other sources referred to in this document. Therefore, its accuracy and
completeness is not guaranteed and its reliability cannot be assured. The extent to which the Industry
and Market data used in this Prospectus is meaningful depends on the readers familiarity with and
understanding of the methodologies used in compiling such data.
Additional points to be noted

Scope of information: The information contained in this Prospectus is intended to provide a Prospective
Applicant with adequate information relating to the investment opportunity and background information
on the IPO. However, this Prospectus does not necessarily contain all the information that a prospective
Applicant may consider material. The content of this Prospectus is not to be construed as legal,
business or tax advice. Each prospective Applicant should consult his own lawyer, financial adviser
or tax adviser for legal, financial or tax advice in relation to any subscription, purchase or proposed
subscription or purchase of the Shares.
Investor due diligence: Prior to making any decision as to whether to subscribe for the Shares,
prospective Applicants should read this Prospectus in its entirety. In making an investment decision,
prospective Applicants must rely upon their own examination of the terms of this Prospectus and the
risks involved in making an investment.
Equity risk: All equity investments carry market risks to varying degrees. The value of any security can
fall as well as rise depending on the market conditions. Potential investors should read the chapter
related to Risk Factors and Mitigants of this Prospectus.
Restrictions on distribution of this Prospectus: The distribution of this Prospectus and the Shares
may, in certain jurisdictions, be restricted by law or may be subject to prior regulatory approvals. This
Prospectus does not constitute an offer to sell or an invitation by or on behalf of the Company to
subscribe to any of the Shares in any jurisdiction outside of Oman where such offer or invitation would
be unlawful. This Prospectus may not be distributed in any jurisdiction where such distribution is, or
may be, unlawful. The Company, the Issue Manager, the Legal Advisors and the Collecting Banks
require persons into whose possession this Prospectus comes, to inform themselves of and observe,
all such restrictions. None of the Company, the Issue Manager, the Legal Advisors or the Collecting
Banks accept any legal responsibility for any violation of any such restrictions on the sale, offer to sell
or solicitation to subscribe for Shares by any person, whether or not a prospective Applicant, in any
jurisdiction outside Oman where such sale, offer to sell or solicitation to subscribe would be unlawful.
Restrictions on use of information contained in this Prospectus: The information contained in this
Prospectus may not be published, duplicated, copied or disclosed in whole or in part or otherwise
used for any purpose other than in connection with the Offer, without the prior written approval of the
Company and the Issue Manager.
Disclaimer of implied warranties: Except as required under applicable law and regulations, no
representation or warranty, express or implied, is given by the Company, the Issue Manager, the Legal
Advisors or the Collecting Banks, or any of their respective directors, managers, accountants, lawyers,
employees or any other person as to the completeness of the contents of this Prospectus; or of the
projections included within; or of any other document or information supplied at any time in connection
with the Offer; or that any such document has remained unchanged after the issue thereof.
Table of Contents
Table of Contents
1.
Abbreviations and Definitions
2.
Offer Summary
11
3.
Estimated Offer Expenses
15
4.
Purpose of the Offer and Use of Proceeds
16
5.
Objects and Approvals
17
6.
Shareholding Details
21
7.
Economy of Oman
26
8.
Construction Sector Overview
29
9.
Description of The Company and Business Overview
31
10. Risk Factors and Mitigants
46
11. Source of Financing
54
12. Historical Financial Statements
56
13. Projected Financial Statement 2014-2018
88
14. Audited Financial Statement for the period ended 30th June 2014 (First Half)
110
15. Dividend Policy
116
16. Valuation and Price Justification
118
17. Related Party Transactions and Material Contracts
122
18. Corporate Governance
124
19. Rights and Liabilities of Shareholders
134
20. Subscription Conditions and Procedures
137
21. Undertakings
145
1. Abbreviations and Definitions

AGM
Al Maha or the
Company
AoA or Articles
or Articles of
Association
Applicant
Application
Application Form
Application Money
Baiza(s) or Bz(s)
BMI
Board/ Board of
Directors
CAGR
Capital Market Law
/ CML
CCL
CEO
Chairman
CMA
Collecting Bank
Code
Cubic Meter or m3
DCF
ECGA
EGM
Executive
Regulations
FCFE
FCFF
Financial Year/
Fiscal Year/ FY
Annual general meeting of the Shareholders

Al Maha Ceramics SAOG (Under Transformation)
The Companys Articles of Association (as amended from time to time) as
approved by the MOCI and CMA and registered with the MOCI
The individual person who applies for the Offer Shares pursuant to the terms
of this Prospectus
The Application Form duly filled and submitted to the Collecting
Bank together with the Application Money as specified in the Chapter
Subscription Conditions and Procedures of this Prospectus
The application form used to apply for the Offer Shares pursuant to the terms
of this Prospectus
The amount to be paid by the Applicants at the time of submission of his/
her Application as specified in the Chapter Subscription Conditions and
Procedures of this Prospectus
One thousandth of an Omani Rial (Bzs 1000 = 1 Omani Rial)
Business Monitor International
The board of directors of the Company elected and holding office in
accordance with the Articles, the CCL, the Code and the Rules and
Conditions for Election of Directors of Public Joint Stock Companies
(Ministerial Decision 137/2002, as amended)
Compounded Annual Growth Rate
The Capital Market Law of Oman promulgated by Royal Decree Number
80/98 (as amended)
The Commercial Companies Law of Oman promulgated by Royal Decree
4/74 (as amended)
The Chief Executive Officer of the Company
The Chairman of the Board
The Capital Market Authority of Oman
The banks appointed to receive the Applications during the Offer Period
The CMA code of corporate governance for public joint stock companies
issued by circular 1/2003 (as amended)
Unit of Natural Gas consumption
Discounted Cash Flow methodology for valuation
Export Credit Guarantee Agency
Extraordinary general meeting of the Shareholders
Executive Regulations of the Capital Market Law (as amended) issued vide
Administrative Decision No.1/2009 of the CMA
Free Cash Flow to Equity
Free Cash Flow to Firm
The period of twelve months starting on January 1 and ending on December
31 of that particular year
GCC
GDP
Government
IFRS
Independent
Director
IPO
IRR
Financial Advisor
and Issue Manager
MCD
MEED
MOCI
MOF
MSM
Nominal Value
Offer/ Public Offer
Offer Closing Date
Offer Opening Date
Offer Period
Offer Price
Offer Proceeds/
Proceeds
Offer Shares
The Gulf Cooperation Council which is composed of Oman, United Arab

Emirates, Saudi Arabia, Qatar, Bahrain and Kuwait
Gross domestic product
The government of Oman
International Financial Reporting Standard
As defined in the Code
Initial public offer
Internal rate of return
Oman Arab Bank SAOG Investment Management Group
Muscat Clearing and Depository Company SAOC
Middle East Economic Digest
The Ministry of Commerce and Industry of Oman
The Ministry of Finance of Oman
Muscat Securities Market
Bzs 100 per Share
The offer to the public through this Prospectus of the Offer Shares
The closing date of the Offer, which is described in the Chapter Subscription
Conditions and Procedures of this Prospectus
The opening date of the Offer, which is described in the Chapter
Subscription Conditions and Procedures of this Prospectus
The period between the Offer Opening Date and the Offer Closing Date
inclusive of both days during which an Applicant can submit an Application
Form
The price at which the Offer Shares are being offered for subscription through
this Prospectus
The proceeds of the Offer
The offer for sale of 20,000,000 existing Shares of the Company by the
Selling Shareholders through this Prospectus
OGM
Ordinary General Meeting of the Shareholders
O&M
Operations & maintenance
Oman
The Sultanate of Oman
PB
Price to book value per share
PE
Price earnings ratio
Principal Activity
The principal activity of Al Maha is to produce ceramic tiles
RO/ Omani Rial
The lawful currency of the Sultanate of Oman
SAOC
Omani Closed Joint Stock Company
SAOG
Omani Public Joint Stock Company
Selling Shareholders As per details provided in Chapter 6 of this document
Shares/ Ordinary
The equity shares of the Company of nominal value Bzs 100 each
Shares
Shareholders
The shareholders of the Company as registered with the MCD. Details
provided in Chapter 6
10
2. Offer Summary
Name of the
Company
Al Maha Ceramics SAOG (under transformation).
Commercial
Registration No.
Date of Registration
Address
1809148
Duration
Authorized Share
capital of the
Company
Paid-up Share
capital of the
Company (before
and after IPO)
Shares offered for
subscription
Name of
Shareholders PrePublic Offer and
number of Shares
15th November 2005

PO Box: 482, Postal Code: 322, Falaj Al Qabail, Sohar, Sultanate of Oman,
Tel; +968 26752322, Fax: +968 26752177
Unlimited.
RO 10,000,000 (Omani Rial Ten Million Only) divided into 100 million Shares
of nominal value of Bzs 100 each.
RO 5,000,000 (Omani Rial Five Million only) divided into 50 million Shares of
nominal value of Bzs 100 each that have been subscribed and paid in full.
20,000,000 (Twenty Million Only) Ordinary Shares of nominal value Bzs 100
each, aggregating RO 2,000,000 (Omani Rial Two Million only) representing
40% of the issued and paid-up capital of the Company.
#
Name
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
Al Anwar Holdings SAOG

Mustafa Sultan Enterprises LLC
Ministry of Defence Pension Fund
Manar Al Sharq LLC
Al Khonji Investment
AbuDhabi National Foods Comp.
H.E. Ali bin Khalfan Al Dhaheri
Ms. Mariam Saied Al Shamsi
Ms. Manar M. Humaid Al Harthy
Mr. Abdulaziz Masoud Humaid Al Harthy
Dr. Ali bin Jaffer bin Mohammed
Mr. Masoud Humaid Al Harthy
Sawson Co LLC
Mr. Nasser Sultan Malik Al Harthy
Employees (refer Chapter 6)
Mr. Abdulredha Mustafa Sultan
Mr. Shabir Moosa Al Yousef
Mr. Qaboos Al Khonji
Mr. Mahmood Nasser Al Riyami
Mr. Hamad Al Dhehari
Mr. Reji Joseph
Mr. Sanjay Kumar Tiwari
Total
Number of Shares before

transformation
(nominal value Bzs 100
per share)
18,027,870
4,850,000
4,850,000
2,425,000
2,425,000
2,425,000
2,425,000
2,425,000
1,940,000
1,940,000
1,455,000
1,378,250
1,212,500
970,000
339,810
165,740
165,740
165,740
165,740
165,740
41,430
41,440
50,000,000
11
Name of Selling
Shareholders and
number of Offer
Shares being sold
01.
02.
03.
04.
05.
06.
07.
08.
09.
10.
11.
12.
13.
14.
Name
Number of Shares to be sold

(nominal value Bzs 100 per
share)
7,400,000
2,000,000
2,000,000
Manar Al Sharq LLC
1,000,000
Al Khonji Investment
1,000,000
AbuDhabi National Foods Comp.
1,000,000
1,000,000
1,000,000
Mr. Abdulaziz Masoud Humaid Al Harthy
800,000
Ms. Manar M. Humaid Al Harthy
800,000
600,000
500,000
Sawson Co LLC
500,000
400,000
Total
20,000,000
Types and
characteristics of
offered Shares
All the equity Shares issued by the Company and the entire equity capital of
the Company consists only of Ordinary Shares and each single Share carries
the right to one vote at any General Meeting of the Company.
Offer Price
Bzs 397 only per Share; comprising a nominal value of Bzs. 100 per Share,
Share Premium of Bzs. 295 and issue expenses of Bzs. 2 per Share.
Purpose of Offer
(Use of Proceeds)
The Company is undertaking the Public Offer to convert the company from a
closed joint stock company to a public listed joint stock company.
Persons eligible to
subscribe for the
Offer
The Offer will be open to individuals (natural persons) and mutual funds
registered at the CMA in Oman, who have their accounts with the MCD,
as on the date and / or during the Offer period. Total foreign ownership
following listing shall not exceed 70% of the paid up share capital of the
Company. It should be noted that pursuant to Ministerial Decision 205/2007
issued by the former Ministry of National Economy, all GCC nationals are
treated as Omani nationals in respect of ownership of and trading in shares
and the establishment of companies in Oman.
Opening Date of
Offer
16th September, 2014
Closing Date of
Offer
15th October, 2014
Expected listing
date on MSM
3rd November, 2014
Prohibitions on
subscription
12
The following prohibitions apply for the Offer:

1. Sole Proprietorship Establishments and juristic persons (other than
mutual funds registered at the CMA in Oman) cannot apply for the Shares.
However, the owners of sole proprietorship establishments may submit
Applications in their personal names.
2. Multiple Applications are not permitted. An Applicant may not submit

more than one Application.
3. Joint Applications (i.e. Applications made in the name of more than one
individual, including Applications made on behalf of legal heirs) are not
permitted. These applications should only be made in their personal
names.
4. Trust Accounts cannot apply for the Shares. Brokers shall advise their
clients to subscribe in their personal names.
All applications falling in any of above categories will be rejected without
notifying the Applicant.
Minimum limit for
the subscription
under one (1)
Application
For Individuals (Natural persons): 500 Shares and in multiples of 100

thereafter.
For Mutual Funds registered at the CMA in Oman: 100,100 shares and in
multiples of 100 thereafter.
Maximum limit for

the subscription
under one (1)
Application
For all Applicants: 10% of the total Offer size i.e. 2,000,000 (Two Million only)
Shares
Proposed allotment
In case of over-subscription of the Offer, the eligible Applications shall be

segregated into two Categories and the offered Shares will be allotted among
the eligible Applicants, as follows:
Category I:
14,000,000 (Fourteen Million) Shares, being 70% of the offered Shares will
be allocated on a pro-rata basis to individuals (natural persons) applying for
100,000 shares or less.
Category II:
6,000,000 (Six Million), being 30% of the offered Shares will be allocated on a
pro-rata basis to individuals (natural persons) applying for more than 100,000
shares and mutual funds registered at the CMA in Oman.
The CMA may decide to allocate a minimum number of Offer Shares equally
to all eligible Applicants, taking into consideration the small subscribers, and
the remaining Offer Shares shall be distributed on a pro-rata basis.
The CMA in co-ordination with the Issue Manager will finalise the actual basis
of allocation.
In case of a shortfall in subscription, the Offer Shares will be adjusted in
proportion to the number of Shares offered by the Selling Shareholders.
Any under subscription in any Category shall be carried over to the other
Category as described in more detail in the Chapter Subscription Conditions
and Procedures of this Prospectus.
Allotment for foreign nationals will be limited to a maximum of 70% of the
paid up capital of the Company.
13
Financial Advisor
and Issue Manager
Oman Arab Bank SAOC Investment Management Group

PO Box 2010, P.C. 112, Ruwi, Muscat,
Sultanate of Oman.
Tel: +968 2482 7399, Fax: +968 2482 7367
Email: corporatefinance@oabinvest.com
Website: www.oabinvest.com
Collecting Banks
1.

2.

3.

Statutory Auditors
of the Company
(For the last Three
years)
KPMG Oman
4th Floor, HSBC Bank Building, MBD
PO Box 641, P.C. 112
Sultanate of Oman
Tel: +968 2470 9181; Fax: +968 2470 0839
Website: www.kpmg.com/om
Reporting
Accountants
KPMG Oman
4th Floor, HSBC Bank Building, MBD
PO Box 641, P.C. 112
Sultanate of Oman
Tel: +968 2470 9181; Fax: +968 2470 0839
Website: www.kpmg.com/om
Legal Advisors
Means the legal advisors to the Company:

Dentons & Co Oman Branch
Second Floor, Al Fannar Building, Shatti al Qurum
PO Box 3552, Ruwi, Postal Code 112
Sultanate of Oman
Telephone: +968 2457 3000, Fax: +968 2457 3097
Website: www.dentons.com
Oman Arab Bank SAOC

P.O. Box Box 2010, P.C. 112, Ruwi, Muscat,
Tel: + 968 2482 7399, Fax: +968 2482 7367
Bank Muscat SAOG
P.O. Box Box 134, P.C. 112, Ruwi, Muscat,
Tel: + 968 24768064, Fax: +968 24787764
National Bank of Oman SAOG
P.O. Box Box 751, P.C. 112, Ruwi, Muscat
Tel: + 968 24778757, Fax: +968 24778993
S & A Law Firm

Sariya Al Hady & Abdelrahman El-Nafie & Co
Advocates and Legal Consultants
First Floor, Al Fannar Building, Shatti al Qurum
PO Box 3552, Ruwi, Postal Code 112
Sultanate of Oman
Telephone: +968 2457 3000, Fax: +968 2457 3090
Website: www.sandalaw.com
Registration and
Transfer Agent
14
Muscat Clearing and Depository Co. SAOC

PO Box 952, PC 112, Ruwi, Sultanate of Oman
Tel: 24822222, Fax: 24817491
Website : www.csdoman.co.om
3. Estimated Offer Expenses

The following are the details of estimated Offer expenses:
Amount (RO)
Financial Advisor & Issue Manager fees
115,000
Legal Advisors fees
45,000
Reporting Accountants Fees
18,500
Collecting Banks fees
40,000
CMA & MCD fees
30,000
Printing, Marketing, Advertising & Publicity expense
65,000
Miscellaneous expense
Total
Offer expenses to be collected at RO 0.002 per Share through the Offer
Difference between amount to be collected towards expenses and estimated
Offer expenses
3,500
317,000
40,000
277,000
The above are indicative estimates only and may differ from actual Offer expenses. The estimated
expense works out to 4% of the Offer, in value terms if all Offer Shares are sold.
The total Offer expenses will be partially met out of the amount collected towards issue expenses
(being Bzs 2 per Offer Share paid by the Applicant) and the amount collected shall be paid directly to
the Company by the Issue Manager. Any Offer expense in excess of the amount collected will be borne
by the Selling Shareholders. If the actual Offer expenses are less than the amount collected from the
Applicants, the surplus will be retained by the Selling Shareholders. The Company will not bear any
expense related to the offer.
15
4. Purpose of the Offer and Use of Proceeds

4.1. Purpose of the Offer
The purposes offering the shares by the Company are as follows:
- Transforming the Company from SAOC to SAOG and listing of the Companys shares on
Muscat Securities Market as approved by EGMs held on 4th of August 2013 and 25th February
2014; and
- Partial divestment of shares by the Selling Shareholders.
4.2. Use of Proceeds of the Offer
The Offer Shares do not represent an issuance of new Shares by the Company. The Offer
represents the sale/divestment of a part of the Selling Shareholders Shares. The proceeds of the
Offer (including the premium) net of the issue expenditure shall therefore accrue to the current
Selling Shareholders in the ratio of Offer Shares offered (as mentioned in point 6.3 under the
section of Shareholding). As such, the Proceeds (including the premium) will not have any impact
on the Companys financial statements. The Baizas 2 per Offer Share collected towards the Offer
expenses will cover a portion of the expenses incurred in relation to the Offer.
16
5. Objects and Approvals

5.1. The Companys Objects
As per its Articles of Association, the objects of the Company are the manufacturing, trading,
import and export of:
1. Ceramic and/or porcelain wall tiles;
2. Ceramic and/or porcelain floor tiles;
3. Sanitary wares;
4. Bathroom fittings and accessories;
5. Kitchen equipment;
6. Ceramic and/or porcelain gift items;
7. Ceramic and/or porcelain insulation;
8. Ceramic/marble and/or porcelain tiles;
9. Cement profiles, polygonal building materials; and
10. Other building materials.
The Companys objects shall also include:
1. Owning, operating, leasing and/or managing quarries;
2. Investing in shares and other securities of corporate bodies, whether incorporated in the
Sultanate of Oman or elsewhere;
3. Owning, managing, leasing any land, property, office or showroom in relation to the business
of the Company; and
4. Manufacturing, trading, sale, export and other dealings in any raw materials and intermediate
products (meaning raw materials that have been processed in some manner but which do not
necessarily constitute finished products for sale to end-users).
Notwithstanding the foregoing, the Company may also do all such other things as may seem or
be considered necessary, suitable, convenient or proper pursuant to the conduct of its permitted
activities as may be allowed under the laws of the Sultanate of Oman from time to time, and may
carry out all necessary related and complementary activities, each of which will be construed as
being within the objectives of the Company. Accordingly, the objectives of the Company shall
have no limit except as may be specified by the prevailing laws in the Sultanate of Oman, the
Articles of Association, or the decision of the board of directors of the Company, or the decision
of the Shareholders in general meeting.
Without prejudice to the generality of the foregoing, in order to achieve its objectives the Company
may:

1. Obtain technical and administrative assistance from local and foreign persons, corporations
or businesses;
2. Enter into various agreements with individuals or local and foreign companies or organizations
or establishments which perform activities similar to the Company that may help the Company
to achieve its objectives inside or outside the Sultanate of Oman;
3. Conduct all dealings and contracts which the Company deems are necessary to facilitate and
achieve its goals; and
4. Invest in, Own, lease, obtain usufruct rights and/or obtain any other interest in land, whether
in the Sultanate of Oman or elsewhere.
17
5.2. Permits and Licenses

The Company was incorporated in the Sultanate of Oman as a Closed Joint Stock Company
(SAOC) with the name Al Maha Ceramics Company SAOC and registered in the commercial
register of the MOCI on 15 November 2005.
At EGMs held on 4th August 2013 and 25th February 2014, the Shareholders resolved to transform
the Company into a public joint stock company (SAOG) organized under the laws of Oman and
to amend its Articles of Association accordingly.
The Company holds the following material permits and licenses:
Ministry of Commerce and Industry: Commercial Registration
Commercial Registration Number: 1809148
Registered Headquarters:
Al Batinah Region/Sohar/Falaj Al Qabaiel
Postal Address:
PO Box: 482, PC 322
Date of Registration:
15 November 2005
Expiry Date:
14 November 2015
Duration: Unlimited
The Company has recently changed its registered headquarters to the Sohar factory address from
Muscat.
The Company has been registered with the MOCI with the following activities at Headquarters PO
Box 482, PC 322: The said activities are as follows:
- Retail of sanitary ware and fittings thereof
- Manufacture of marble products including kitchen, wash basins, ornaments, statues, sculpture
etc.
- Trade of construction and oil civil engineering heavy equipment and maintenance thereof.
- Export and import offices.
- Sale of spare parts (excluding vehicles parts).
- Retail of household appliances (radio, television, refrigerators, crockery etc).
The Companys factory at Sohar Industrial Estate, Al Batinah Region, Sohar PO Box 482, PC 322.
Falaj Al Qabail, Sultanate of Oman, is allowed to manufacture of wall and flooring tiles (ceramic
and faience).
Industrial License
Industrial License Number: 03005869;
Industrial Registration Number: 10001582
Expiry Date: 14 November 2015
Oman Chamber of Commerce & Industry: Membership
Registration Number: 1581;
Expiry Date: 30 October 2014
Ministry of Commerce & Industry- Mining Department: Exploration license for clay.
License Number: 034/234/5/77491/2013;
Expiry Date: 12th December 2014
18
Safety License Number: 744/2014

Expiry Date: 11/09/2015
Quality Management System - ISO 9000 Certification
The Company holds an ISO 9001:2008 certification for manufacturing, testing and commissioning
of all its products. The certificate was issued on 11 December 2012 and will expire in December
2015. ISO 9001:2008 is one of the series of the ISO 9000 that addresses various aspects of quality
management standards.
Expiry Date: 10/12/2015
5.3. The Companys Memorandum and Articles of Association
A copy of the Memorandum and Articles of Association of the Company is available for perusal
at the Companys and Issue Managers website and at the office/ factory of the Company located
at Sohar Industrial Estate (Phase 3 plot number 248-245 & plot number 274 of Phase 4), Falaj Al
Qabail, Oman during business hours.
5.4. Resolutions Passed by the Company
The Shareholders of the Company passed the following resolutions in their meeting held on 4th
August 2013:

1. Approved the proposal to allocate 33,981 ordinary shares of RO 1 each in the capital of the
Company to employees of the Company within a maximum limit of 5% of the issued capital,
at the price of RO 1.588 per share, to be allotted in the amounts which the Board of Directors
determine, in accordance with Article 82 of the Commercial Companies Law, (promulgated by
Sultani Decree 4/1974, as amended (CCL) to the employees who shall be determined by the
Board of Directors (Employee Private Placement).
2. Approved the proposal to allocate 116,019 ordinary shares of RO 1 each in the capital of the
Company to the directors of the Company, at the price of RO 1.588 per share, to be allotted
in accordance with Article 82 of the CCL and to approve the Director Private Placement to be
entered into with the directors as related parties (Director Private Placement).
3. Approved the new authorized share capital of the Company which would be increased from
RO 5,000,000 (five million) to RO 10,000,000 (ten million).
4. Approved the proposal of the Company to commence work in relation to the conversion of the
Company from a closed joint stock company (SAOC) to a public joint stock company (SAOG)
and to make an initial public offering of the Companys shares and listing on the Muscat
Securities Market (IPO).
5. Approved the appointment of SNR Denton & Co (Now Dentons and Co.) as legal advisors to
the Company for the IPO.
6. Approved the appointment of Oman Arab Bank (IMG) as Issue Manager for the IPO.
7. Approved the appointment of KPMG as the reporting Accountants for the IPO
19
The Shareholders of the Company unanimously passed the following resolutions in their meeting
held 25th February 2014:

1. Approved the conversion of the Company from an Omani closed joint stock company (SAOC)
to an Omani public joint stock company (SAOG) through an initial public offering of the
Companys shares and listing on the Muscat Securities Market (the IPO).
2. Approved the proposed amendments to the Articles of Association of the Company as per the
requirements of the CCL and Capital Market Authority for public joint stock companies.
3. Approved the split of the nominal value of the Companys equity shares from R.O. 1.000 per
share to Bzs 100 per share, thereby increasing the total number of issued shares from 5 million
to 50 million.
4. Approved the offer to the public of 40% of the issued share capital of the Company
(comprising 20,000,000 ordinary shares) by way of sale by some of the Companys existing
shareholders (Selling Shareholders), such shares to be offered to the public and sold by the
Selling Shareholders in such proportions as may subsequently be agreed between the Selling
Shareholders and the Company.
5. Approved to authorize the Board of Directors of the Company to carry out the following
matters:
a. To approve the price at which shares are to be offered for sale in the IPO;
b. To negotiate, finalize and sign on behalf of the Company all agreements to be entered into
by the Company with third party advisers and service providers engaged for the IPO and
complete all necessary procedures in relation to the IPO;
c. To approve and sign on behalf of the Board of Directors and the Company the prospectus
and all other documents relating to the IPO; and
d. To do all other acts, sign all documents, file and register any documents with any relevant
authority, obtain consents and approvals on behalf of the Company and the Selling
Shareholders which may be deemed appropriate or necessary in connection with the IPO
including listing of the Companys shares on the Muscat Securities Market.
6. Approved the payment of expenses incurred in relation to the IPO from the offer expenses
component of the offer price (Bzs 2 per Offer Share) and that any expenses in excess of this
amount shall be borne by the Selling Shareholders.
7. Approved to ratify all actions taken by the Board of Directors of the Company in relation to the
IPO prior to the date of the EGM.
5.5. Selling Shareholder Approvals
The Selling shareholders have conveyed to the Company their approval for selling a proportion of
their equity holding and participate in the IPO as per the proportions stated in Chapter 2 of this
prospectus Offer Summary.
5.6. Continuing Obligations
In accordance with the CCL, all existing obligations of the Company, prior to its transformation to
a public joint stock company, shall continue in the SAOG.
20
6. Shareholding Details
6.1. Shareholding as at 3 August 2006 as a Closed Joint Stock Company
Shareholders Name
Nationality
Number of
shares held
of Nominal
Value of RO
1.000 each
AL ANWAR HOLDINGS SAOG
Omani
960,000
32.00%
960,000
MUSTAFA SULTAN ENTERPRISES LLC
Omani
300,000
10.00%
300,000
MINISTRY OF DEFENCE PENSION FUND
Omani
300,000
10.00%
300,000
MANAR AL SHARQ LLC
Omani
150,000
5.00%
150,000
AL KHONJI HOLDING LLC
Omani
150,000
5.00%
150,000
ABUDHABI NATIONAL FOODS COMPANY
UAE
150,000
5.00%
150,000
UAE
150,000
5.00%
150,000
UAE
150,000
5.00%
150,000
BANK MUSCAT
Omani
150,000
5.00%
150,000
10
Ms. Manar Masoud Humaid Al Harthy
Omani
120,000
4.00%
120,000
11
Mr. Abdul Aziz Masoud Humaid Al Harthy
Omani
120,000
4.00%
120,000
12
Dr. Ali Jaffer Mohammed
Omani
90,000
3.00%
90,000
13
SAWSON CO LLC
Omani
75,000
2.50%
75,000
14
UNITED SECURITIES LLC
Omani
75,000
2.50%
75,000
15
Omani
60,000
2.00%
60,000
3,000,000
100%
3,000,000
TOTAL
% of Total Aggregate
Nominal
Value (RO)
The entire capital at incorporation was subscribed to in cash.
6.2. Subsequent changes to shareholding

1. In January 2011, the Companys equity capital was increased by RO 500,000/- to RO

3,500,000/- through issue of additional capital at par, which was subscribed to on a pro-rata
basis by the existing shareholders for cash.
2. In April 2011, United Securities sold its holding of 2.5% to Mr.Masoud Malik Al Harthy.
3. In February 2013, Bank Muscat sold its holding of 5% to Al Anwar Holdings SAOG.
4. Following a stock dividend of RO 500,000 in March 2013, the equity capital increased to RO
4,000,000 and a further stock dividend of RO 850,000 in August 2013 , the equity capital
increased to RO. 4,850,000/-.
5. In September 2013, the Company carried out a private placement of shares to eligible
employees (33,981 Ordinary Shares) and its Directors (116,019 Ordinary Shares), by issuing
21
150,000 Ordinary Shares at a price of RO 1.588 per share, which was subscribed to in cash.
The private placement to the Directors was approved by the Shareholders at their EGM held
on 4th August 2013.

Being an SAOC company at the time of the private placement, there was no market price
available for the Companys shares. Therefore, the shares to employees and Directors were
issued at a price of RO 1.588 per share which is equivalent to the net asset value (book value)
per share as at 30th June 2013.
6. As part of the private placement of shares to its Directors, Sanjay Kumar Tiwari was allotted
16,574 Ordinary Shares of nominal value RO 1 each. Mr Tiwari is Al Anwar Holdings SAOGs
(Al Anwar) nominee director and therefore these shares were held by him on behalf of Al Anwar.
On the instruction of Al Anwar, Mr. Tiwari transferred 8,287 Ordinary Shares to Al Anwar and
4,143 Ordinary Shares to Mr Reji Joseph, CEO of Al Anwar. Mr Tiwari retained 4,144 of these
Ordinary Shares in the Company.
Table showing the increase in Capital from date of incorporation till date:
Share Issue Date
Mode of Issue
Number of
shares issued
Issue Price per

share (RO)
Post issue
capital (RO)
3,000,000
At Incorporation
January 2011
A Right Issue
500,000
1.000
3,500,000
March 2013
Stock Dividend
500,000
4,000,000
August 2013
Stock Dividend
850,000
4,850,000
September 2013
Private Placement to
Employees & Directors
150,000
1.588
5,000,000
6.3. Founders/Shareholders of the company (before transformation)

Shareholders Name
22
Nationality
Number of
shares held of
Nominal Value
of RO 0.100
each
% of
Total
Aggregate
Nominal
Value (RO)
Omani
18,027,870
36.06%
1,802,787
Omani
4,850,000
9.70%
485,000
Omani
4,850,000
9.70%
485,000
Omani
2,425,000
4.85%
242,500
MANAR AL SHARQ LLC
Omani
2,425,000
4.85%
242,500
UAE
2,425,000
4.85%
242,500
UAE
2,425,000
4.85%
242,500
UAE
2,425,000
4.85%
242,500
Omani
1,940,000
3.88%
194,000
10
Omani
1,940,000
3.88%
194,000
11
Omani
1,455,000
2.91%
145,500
12
Omani
1,378,250
2.76%
137,825
13
SAWSON CO LLC
Omani
1,212,500
2.43%
121,250
14
Omani
970,000
1.94%
97,000
15
Employees
339,810
0.68%
33,981
16
Omani
165,740
0.33%
16,574
17
Omani
165,740
0.33%
16,574
18
Omani
165,740
0.33%
16,574
19
Omani
165,740
0.33%
16,574
20
UAE
165,740
0.33%
16,574
21
Mr. Reji Joseph
Indian
41,430
0.08%
4,143
22
Mr. Sanjay Tiwari
Indian
41,440
0.08%
4,144
50,000,000
100%
5,000,000
Total
6.4. Post Offer Equity Structure

The Public shareholding and the minimum Promoters/Selling Shareholders shareholding after
the IPO is envisaged as under, assuming the entire Offer is fully subscribed. Offer Shares not
subscribed at the end of the offer shall be retained by the Selling Shareholders.
Shareholders Name
Nationality
Number of
shares held
prior to IPO,
of Nominal
Value of RO
0.100 each
Number of
Shares sold
through the
IPO
Number of
shares held
post IPO,
of Nominal
Value of RO
0.100 each
% of
Total
Omani
18,027,870
7,400,000
10,627,870 21.26%
Omani
4,850,000
2,000,000
2,850,000
5.70%
Omani
4,850,000
2,000,000
2,850,000
5.70%
Omani
2,425,000
1,000,000
1,425,000
2.85%
MANAR AL SHARQ LLC
Omani
2,425,000
1,000,000
1,425,000
2.85%
UAE
2,425,000
1,000,000
1,425,000
2.85%
UAE
2,425,000
1,000,000
1,425,000
2.85%
UAE
2,425,000
1,000,000
1,425,000
2.85%
Omani
1,940,000
800,000
1,140,000
2.28%
10
Omani
1,940,000
800,000
1,140,000
2.28%
11
Omani
1,455,000
600,000
855,000
1.71%
12
Omani
1,378,250
500,000
878,250
1.76%
23
13
SAWSON CO LLC
Omani
1,212,500
500,000
712,500
1.43%
14
Omani
970,000
400,000
570,000
1.14%
15
Employees
339,810
339,810
0.68%
16
Omani
165,740
165,740
0.33%
17
Omani
165,740
165,740
0.33%
18
Omani
165,740
165,740
0.33%
19
Omani
165,740
165,740
0.33%
20
UAE
165,740
165,740
0.33%
21
Mr. Reji Joseph
Indian
41,430
41,430
0.08%
22
Mr. Sanjay Tiwari
Indian
41,440
41,440
0.08%
23
Public
Total
20,000,000 40.00%
50,000,000
20,000,000
50,000,000
100%
6.5. Selling Shareholders Voting Rights

Pursuant to the IPO and transformation into a Public Joint Stock Omani Company, the issued and
paid up share capital of the Company will be RO 5,000,000 (Omani Rial Five million only) divided
into 50 million Ordinary Shares with a nominal value of Bzs 100 each. Each single share will carry
the right to one vote at the General Meeting of the Company including any Extraordinary General
Meeting.
Following the IPO, the Selling Shareholders and Employees will hold 30 million Ordinary Shares
(assuming full subscription to the Offer) which will have one vote per share, the same as other
Ordinary Shares issued to the public. The Selling Shareholders and Employees will effectively
have 60% of the voting rights following the IPO.
6.6. Brief profile of the Main Shareholders

6.6.1. Al Anwar Holdings SAOG
Al Anwar Holdings SAOG (AAH) was promoted and established in the year 1994 by a
group of prominent business families in Oman with the prime objective to contribute in
the industrial development of Sultanate of Oman. Financial services and insurance form
the core sector focus, wherein AAH has strategic holdings in prominent companies such
as Taageer Finance Company SAOG and Falcon Insurance Company SAOC. On the
industrial front AAH has promoted and nurtured leading companies in the transformers
and switchgears, ceramic tiles and packaging sectors. Voltamp Energy SAOG, Al Maha
Ceramics SAOC and Sun Packaging Company LLC form its strategic holdings in these
sectors. Over the years, AAH has made successful divestments which include industry
leaders such as Al Anwar Ceramics SAOG, National Aluminum Products SAOG, Majan
Glass Company SAOG.
Under the visionary board and professional management, AAH has been instrumental in
pioneering socio economic development in Oman for the last twenty years and is amongst
the leading investment holding companies in Oman.
24
Board of Directors
Name of the Director
Independent /
Non Independent
Position
Brig. Masoud Humaid Al Harthy
Independent
Chairman
Mr. Qais Mohamed Al Yousef
Independent
Deputy Chairman
Mr. Mehdi Mohamed Al Abduwani
Independent
Director
Independent
Director
Mr. Shabir Moosa Abdullah Al Yousef
Independent
Director
Mr. Qaboos Abdullah Al Khonji
Independent
Director
Sheikh Mohamed Abdullah Said Al Rawas
Independent
Director
The Board of Al Anwar is comprised of eminent personalities from business and industry and it
has a highly professional management team.
Details of its current investments, financial performance and vision can be accessed through its
website, www.alanwarholdings.com. As the company is listed its financial performance can also
be accessed through the MSM website.

6.6.2. Mustafa Sultan Enterprises
Founded in 1972, Mustafa Sultan Enterprises is a premier group in Oman with a strong
entrepreneurial history. Mustafa Sultan Enterprises is a diverse entity, organized into various
subsidiaries. The diverse business interests of Mustafa Sultan Enterprises comprise of
Security and Communications Consumer Electronics, Medical and Industrial Supplies, Oil
& Gas supplies and services, Information Technology, Consumer Electronics, Consumer
and Industrial Lighting, Telecommunications and VSAT, , Office Equipment, Defence
Equipment, Restaurants, Money Exchange, Insurance, Real Estate, Entertainment, AirConditioning, Logistics and many more.
Associate businesses which come under Mustafa Sultan Enterprises are:

1. Mustafa Sultan Science & Industry Co. LLC
2. City Exchange Co. LLC
3. Mustafa Sultan Security & Communication Co. LLC
4. Mustafa Sultan Electronics LLC
5. Mustafa Sultan Office Technology Co. LLC
6. Mustafa Sultan Exchange Co. LLC
7. Mustafa Sultan Telecommunications Co. LLC
8. Middle East Restaurant & Catering Co. LLC
9. Gulf Telecommunication Co. LLC
10. BDP Logistics Co. LLC
11. Voltas Oman LLC
12. Gourmet Foods LLC
13. Mustafa Sultan Refrigeration & Air Conditioning Services Co. LLC
25
7. Economy of Oman
7.1. Background
Strategically positioned at the crossroads of Asia and Europe, Oman has historically been a center
of trade and commerce. With a population of about 3.9 million spread over a land area of 309,500
square km, Oman is perceived as a country with stable political, economic and social systems.
The country has created a strong infrastructure, healthcare, communication, international trade
network and advanced transportation systems on the backbone of a flourishing oil-based
economy. The continued focus of the Government to diversify the economy and gradually reduce
its dependence on oil, has witnessed a steady growth of the non-oil sectors. Currently, according
to the data published by the National Centre for Statistics & Information, oil contributes about 50%
of the 2013 Gross Domestic Product (GDP) at current market prices, which the Government
aims to reduce in the future.
7.2. Economy
The Omani economy is reported to have grown by 5% in 2013, supported by the relative stability
in crude oil prices in the international markets. Despite the uncertain global outlook, the domestic
market witnessed improved demand across various sectors with the GDP growth.
The national economy continued to perform well despite the uncertain global environment, with
GDP at market prices growing at 18.6% in 2011 and 11.5% in 2012. For 2013, it is estimated to
have grown at 2.8% and is expected to grow at an accelerated rate during the year 2014, primarily
driven by the increase in oil production rate, stability of global oil prices, the continuation of the
rate of government spending as well as strong domestic demand.
Structure of Gross Domestic Product (End of March 2014)
Although the global economy shows signs of stabilizing, the overall situation continues to be
uncertain on account of the debt problems of the developed economies in Europe and weak
growth.
Oman has a credit rating of A by Standard & Poors and A1 by Moodys Investor Services. The
Omani Rial is pegged to the U.S. Dollar at a fixed exchange rate of 1 RO = 2.6008 US$.
26
Oman Oil Production and Average Price
Government Revenues and Expenditures (Mn. R.O)
Merchandise Imports and Exports (Mn. R.O)
Source: Monthly Statistical Bulletin- June 2014, National Centre for Statistics & Information
7.3. Public Finance

(The data in this section is based on information gathered from publications of National Centre for
Statistics & Information)
For the year 2013, the Government budgeted public revenue of RO 11.2 billion based on an
estimated price of oil at USD 85 per barrel. The total government expenditure for 2013 was
proposed at RO 12.9 billion which is 12% higher than the revised budget expenditure for 2012.
The actual Government revenue for the year 2013 was estimated at RO 14.08 billion with a
corresponding government expenditure of RO 13.68 billion, leading to a budget surplus of RO 0.4
billion. The average price of Oman crude during 2013 was $ 105.5/barrel as against the level of
$85 proposed in the budget.
The governments budget for the year 2014 projects public revenue of RO 11.7 billion based on
an oil price of US$ 85 a barrel, an increase of 4.5% compared with revenue budgeted for the year
2013. The government spending in 2014 is budgeted at RO 13.5 billion which is 5% higher than
the revised budget expenditure for 2013. Thus, the budget deficit amounts to about RO 1.8 billion,
or by 15 % of budgeted revenue and 6 % of GDP.
The oil and gas revenues accounts for 83% of total revenues, while non-oil revenues accounts for
the balance 17 % of which about 50 % is estimated proceeds of taxes and fees.
27
For the 5 month period ended May 2014, the actual total government revenue was RO 6.04 billion
with a surplus of RO 0.58 billion. As against the budgeted oil price of US$ 85 per barrel, the actual
realization for the 5 month period was US $105.46 per barrel.
In November 2013, the Government announced the standardizing of salaries and grades in the
civil service sector which is expected to cost the state exchequer about RO 800-900 million per
year. The Government also announced amendments to the pension rules, whereby the pension for
the Omanis insured with the Public Authority for Social Insurance (PASI) will be calculated on the
basis of the gross salary, instead of calculating it on basic salary. According to the Royal Decree,
the changes came into effect from July 1, 2014.
Source: (Monthly Statistical Bulletin- June 2014, National Centre for Statistics & Information and
Government budget estimates for 2014)
7.4. Development Plans
The Government has drawn up the Eighth Five-Year Development Plan (2011-15) which proposes
substantial public investments with focus on the infrastructure sector. These investments are
expected to improve the domestic demand and further increase the diversification of the Omani
economy.
The Government has projected cumulative revenue of RO 37.5 billion over the plan period with
an overall public expenditure of RO 42.71 billion over the five year plan period. The plan expects
non-oil activities to grow at a rate of 10% (at current prices) and 6% (at constant prices). This
emphasizes the continuing efforts to further diversify the economy. The five year plan provides
for investment in new projects worth RO 5.6 billion excluding projects worth RO 6.4 billion carried
over from the previous plan period. The five year plan targets to provide employment to 200,000
to 275,000 Omani citizens.
7.5. Key Economic Indicators
Years
2010
2011
2012
2013
22.55
26.73
29.80
30.63
2.77
3.30
3.62
3.96
8,163
8,100
8,232
7,735
Oil and gas industry as % of GDP
46
53
52
50
Annual Inflation (%)
3.3
4.1
2.9
1.1
MSM total market capitalization (RO billions)
10.9
10.3
11.7
14.2
Crude oil production (million barrels)
316
323
336
344
GDP at market price (RO billions)

Population (millions)
Per capita GDP at market price (RO)
Sources:
National Centre for Statistics & Information-Monthly Statistical Bulletin-June 2014 & Statistical
Year Book 2012
MSM bulletins
28
8. Construction Sector Overview

8.1. GCC Construction Sector Overview
The total projects (planned or underway) in GCC amounts to US$ 1.9 trillion, with 39% and 30%
share belonging to Kingdom of Saudi Arabia (KSA) and United Arab Emirates (UAE) respectively.
The distribution projects across the GCC are provided here.
The total building projects amounting approximately to US$ 69 billion were finished during 2012
as compared to US$ 47 billion in 2011. New projects to be sanctioned in the GCC during 20132014 are expected to be worth US$ 65 billion.
Sector-wise building projects completed in GCC during 2012-2013 is led by the residential
sector with more than US$ 29 billion worth of projects completed followed by commercial and
hospitality sector.
It is expected that residential, retail and commercial sectors will grow at a slower rate of 4.4%,
4.0%, and 13.0% respectively, while hospitality, educational and medical will grow at a faster
pace of 27%, 69%, and 79% respectively during 2013-2014.
Residential building projects will remain the largest segment of the real estate market in terms of
projects with an estimated market share of 43%.
29
8.2. Omans Construction Sector Overview

The Oman projects market is expected to undergo a radical transformation over the next five
years, as it proceeds with a number of strategic projects aimed at transforming Oman. During this
period, $65 billion-worth of projects is due to be awarded, almost double the $33 billion awarded
in the previous five-year period. Omani projects (planned or underway) share in GCC projects
market is around 6%.
The increase in activity will primarily be the result of a handful of long-term strategic projects,
such as BPs US$ 15 billion Khazzan tight gas project, the US$ 10 billion development of a
refinery and petrochemical complex at Duqm, a nationwide railway construction programme,
construction / renovation of airports all across the Sultanate, and many tourism related residential
and commercial projects.
Break-up of US$ 115 billion projects (planned or underway)
The government target of diversification of the economy from oil share of more than 40% in 1996 to
9% in 2020 is providing major stimulus in development of non-oil sectors. As a result the infrastructure
development in Oman is expected to be approximately US$ 80 billion during 2011-2015.
Transport accounts for a major part of the construction initiative. However substantial expenditure
is also estimated in other areas like airports and port development. Construction initiatives in the
energy and resources sector accounts for approximately 25% of total initiatives.
The government drive to diversify the economy is providing increased impetus to the construction
industry. The government is also eager to provide attractive concessions to both local and foreign
investors to increase the economys capacity.
The construction sector can benefit from opportunities available through increase in infrastructure
spending both directly and indirectly as various projects in tourism and new businesses will get
underway. The government is keen on developing the rail network which will assist in re-directing
resources in other construction projects instead of expanding road network, thus improving
Omans access across the region.
Number of sources utilized for the purpose of this chapter, but not limited to the following:
- Business Monitor International (BMI)
- Middle East Economic Digest (MEED)
- Arabian Business Website
30
9. Description of The Company and Business

Overview
9.1. About the Company and its Operations
The Company commenced commercial production in April 2008 and now is considered one
of the biggest companies that produce ceramic tiles in Oman. The Company has received ISO
9001:2008 certification from TUV SUD as it has established and applies a quality management
system for manufacture and supply of Ceramic Tiles.
The plant which is located in Sohar Industrial Estate is equipped with fully automated Italian
machineries that use high quality glaze raw materials imported mainly from Europe for the
production of tiles. The Company constantly focuses on updating its technology. Recently two
digital printing machines were installed , which were supplied by leading Italian ceramic plant
machinery manufacturers. Among the Omani ceramic tile manufactures, the Company is the first
to launch digital printed tiles and high strength tiles with thickness of 12 mm.
The annual production capacity of the plant is currently around 6 Million Sq. mts which is likely
to be enhanced in the future. The product range of tiles that conform to EN 14411:2003 standard
specifications includes glazed wall, floor, skirting, border and highlighter tiles in a variety of designs
and shades to suit every decor. The Company manufactures floor tiles and wall tiles and it has
recently launched premium ceramic tiles printed with digital machines under the brand name Al
Maha Digiplus. The Company has made its presence felt across the entire Middle East market,
with exports to UAE, Saudi Arabia, Qatar, Bahrain, Jordan, Lebanon, Syria, Yemen and Africa and
South Asia.

9.1.1. Organization Structure
31
9.1.2. Technology
The Company utilizes dry grinding technology which gives the advantage of a lower cost
of production due to:
Lower consumption of water;

Lower energy consumption
Low manpower requirement; and
Faster grinding time.
The Company has a fully automated plant sourced from SITI B & T Group, Italy, which is a
leading machinery manufacturer for ceramic tile plant. The Company has the capability to
produce a wide range of products, in a number of different sizes.
Recently, the company installed the latest technology digital printing machines at its
production lines which enabled the Company to offer high resolution contemporary
designs to its customers. The Company is also planning to invest in an automatic sorting
system to further improve the quality control to ensure that the customer receives the
highest quality ceramic tiles.
9.1.3. Plant Capacity and Production
The current installed capacity of the plant is approx. 16,500 sq.m. per day that is 6.0
Million sq.m. per annum for the year 2013. The Company has been able to utilize more
than its installed capacity, on account of various modifications and improvements in its
production lines.
Year
2011
2012
2013
Capacity Utilization (%)
80%
104%
102%
The Company enhanced its production capacity from 5.5 million sq.m to 6 million sq.m in
2013 through addition of a press and certain other modification in the factory. The factory
land area is approx. 120,000 sq.m which can be utilized to expand if and when necessary.
32
9.1.4. Manufacturing process and main equipment
Body Raw
Material 1
Glaze Raw
Materials
Body Raw
Material 2
Colors & Stains
Body Raw
Material 3
Body Raw
Material 4
Body Raw
Material 5
Body Preparation Dept

Weighing, Crushing, grinding,
wetting & Store
Pressing & Drying Dept.
Shaping the tiles
Glaze Preparation Dept.

Weighing, milling, store
Glazing Dept.
Glaze application, design printing
Intermediate Storage
Box Storage & LGV operation
Firing Dept.
Tiles are being fired at 1140 deg.
Sorting & Packing Dept.
Grade classification, packing
palletizing, strapping & wrapping
Finished Goods ware
Hose & Dispatch Dept.
Process
Once the raw materials are received in the factory, a number of steps take place to create
the finished product. These include the tile production process involving batching, mixing
and grinding, forming/pressing, drying, glazing, firing, sorting and packing. Many of these
steps are accomplished using automated machines /equipment.
Batching
As for ceramic tiles production, the body composition is determined by the amount and
type of raw materials which also determines the color of the tile body. The right amounts
of raw materials are mixed to achieve the desired properties of a tile. Batch calculations
consider both the physical properties and chemical composition of the raw materials.

Mixing and grinding
Once the ingredients are weighed as per the desired composition; mixed together and are
transported to a hammer mill where the bigger lumps are reduced to fine grains. These
grains are moved to silos and fed into a pendular mill to pulverize further into fine powder.
The resultant powder is screened, combined with water and stored in silos for the next
processes which involve pressing, shaping and forming.
33
Pressing and Drying
Most tiles are formed by dry pressing. The free flowing powder, containing a low percentage
of moisture, flows from a hopper into the forming die. The material is compressed in a
steel cavity by steel plungers and is ejected by the bottom plunger. Automated hydraulic
presses are used with operating pressures as high as 2,500 tons. The tile body is dried (at
high relative humidity) after forming, in continuous or horizontal driers, which are heated
using gas.

Glaze and glaze application
The raw materials are weighed and wet milled to prepare the glaze after a batch is finalised.
The milled glazes are applied using one of the many methods available, including centrifugal
glazing, bell/waterfall method, or spray method. Screen printing or roto design cylinder or
a digital machine printing is used to transfer the designs on to the tiles. Dry glazing is also
being used for heavy duty applications. This involves the application of powders, crushed
frits (glass materials) and granulated glazes onto a wet-glazed tile surface. After firing, the
glaze particles melt into each other to produce a surface like granite.
Firing
After glazing, the tiles are fired at 1130 -1150 degrees centigrade in a roller earth kiln.
The intense heat causes various physical and chemical changes in the tile, giving it the
desired strength, size, surface appearance and texture (glossy, matt, etc), porosity and
water absorption.
Sorting and packing
The finished ceramic tile is categorized by color/shade, size and quality. The tiles are then
sorted, packed and stacked on pallets with the help of packing machines.
Main machines/equipment installed includes:

Dry grinding equipment from Manfredini and Schianchi; which is one of the latest in
this field.
Hydraulic presses of Siti B&T/ SACMI (each of approx. 2500 tons capacity);
Two roller earth kilns of about 132 meters length of Siti B&T with operating temperature
of 1150 degree Celsius;
Two multilayer horizontal driers of Siti B&T with a length of 24.5 meters;
Three glaze lines each of about 120 meters with advanced application/ decoration
units like digital printing, roto cylinder, bell and flat printing;
Fully automated laser guided vehicles to load the kilns;
De-dusting plants from SACMI and CAMI, Italy;
Two fully automated smart lines from Siti B&T to carry out gradation of products;
Skirting plant from Tecnema;
Independent decoration plant to produce border/ highlighter tiles; and
Two transformers of 2500 KVA for regulated power supply and a 1000 KVA generator
for back-up power.
34
9.1.5. Raw material
The main raw materials in ceramics tile manufacturing are:
1. Shale /clay;
2. Quartzite;
3. Lime stone;
4. Frits and glaze;
5. Pigments;
6. Kaolin;
7. Printing inks; and
8. Packing materials.

Raw materials used for the tile body like clay/ shale, quartzite and limestone are procured
mainly from GCC region.
Glaze/frits, pigments, digital machine inks are procured from leading suppliers in Europe &
Asia . Packaging materials are provided by suppliers from the local market as well as the UAE.
The Company does not have formal purchase agreements with suppliers for its raw
materials. As there are multiple renowned suppliers available in the market, the Company
has not faced any difficulties in meeting its raw material requirements. Further, raw material
prices have been stable during the last two years.
9.1.6. Utilities and consumables
The major utilities required by the Company such as natural gas, water and electricity
are supplied by Public Establishment for industrial Estate (PEIE) and Majan Electricity
Company SAOC.
The Company utilizes natural gas for its manufacturing operations for which it had entered
into a Gas Supply Agreement with PEIE (please refer to the Chapter Risk Factors and
Mitigants). Other consumables such as hammers, punches, roto cylinders etc. are
available in the local market.
9.1.7. Environment and safety
The Company neither consumes nor produces any major hazardous chemicals or
pollutants.
Technologically advanced de-dusting plants sourced from reputed suppliers are installed
to maintain a low dust environment. The factorys environment and pollution control
certification from the Environment Ministry of Oman, issued on 31 August 2012 is valid till
30 August 2014.
The Company strives to comply with the safety measures recommended by the Ministry
Environment /Royal Oman Police (ROP). The Companys fuel storage approval, from ROP
and Ministry of Environment, was issued on 2 April 2013 and is valid till 1 April 2015. The
Companys safety license is valid till 11th September 2015.
The Company awards regular maintenance contracts to well qualified firms for the
maintenance of safety and security equipment. A safety audit was also carried out by
TUV SUD Middle East LLC in August 2013.
35
9.1.8. Products
The Company manufactures two main types of products:

A. Floor tiles (Monocottura) and

B. Wall tiles (Monoporosa)

The Company has recently launched a premium range of ceramic tiles printed with digital
machines, under the brand name Al Maha Digiplus which has had an encouraging
response from the market. The printing quality using the digital printing machines is much
superior than the conventional ceramic tiles produced using the flat printing machines or
roto cylinder printing machines. The digital printing machine can provide excellent printing
quality similar to a photograph with very high resolution.
Products & Sizes:
Product
Sizes
Wall tiles
25x40, 25x50, 30x45 cm
Floor tiles
30x30, 45x45, 50x50 cm
Highlighter tiles
25x40, 25x50, 30x45 cm
Borders
7x30, 8x30, 9x30, 10x30, 9x45, 9x40, 9x50 cm
Skirting
8x45, 8x50 cm
The Company sells mainly to the retail market and commercial project sales account for
only a small portion of its turnover. The Company aims to produce higher volumes of
digital printed tiles in order to achieve higher price realization in the future.
9.1.9. Market segments, selling arrangements and sales network
Major geographical segments of the companys sales are given below:

Sales (RO)
2008
2009
2010
2011
2012
2013
CAGR%
Segment
Oman
865,564
2,224,701
2,269,141
3,642,905
5,836,870
6,276,136
49%
GCC other
than Oman
828,095
1,282,592
1,425,185
2,205,000
2,687,722
2,966,099
29%
Others
106,419
92,307
306,621
264,491
494,046
525,491
38%
1,800,078
3,599,599
4,000,947
6,112,396
9,018,638
9,767,726
40%
Total Sales
The key export markets for the company include the Kingdom of Saudi Arabia, United Arab
Emirates, Lebanon, Jordan, Qatar and Yemen. The Company sells its products mainly
through channel sales i.e. sales through dealers and distributors. Its top dealers have a
wide coverage of their network, with multiple outlets in their respective territories. These
dealers have been associated with the Company for many years, thereby reinforcing the
acceptance of the Companys brand and service level. There are no formal distribution
agreements in place with these dealers. However they purchase stock in continuous basis
throughout the year.
36
The Company actively carries out various marketing activities like:

For the last three years the Company has participated in major exhibitions and trade
shows in the GCC e.g. the Big Show-Muscat, Big 5-Dubai, Big5-Jeddah, Project
Qatar-Doha, Saudi Build-Riyadh.
Annual advertisement campaigns with leading newspapers in Oman.
Dealer signage across the dealer outlets in Oman and UAE.
In shop branding to main dealer outlets e.g. see through branding, LED light boards, roll
up stands, rotating light boxes, sample display boards and stands, display cassette
to select dealers.
Quarterly press releases and public relation activities.
Bilingual website in Arabic as well as English. The Company is currently updating the
website.
Advertisement campaigns in various mass media.
Listing in local trade directories and yellow pages
Providing distributors with samples for free of cost.
Design marketing schemes and offers for new products and low selling items.
9.1.10. Future plans
The Company plans to move towards digital printing technology for its production. The
Company will be carrying out certain modifications to improve the production output
marginally and enhance the efficiency of operations. The Company also plans to invest
in high technology automatic sorting system which will improve the quality of tiles to
the customers.
The Company will continue with its marketing strategy of launching ceramic tiles in new
size and designs regularly in the future.
The Company has plans to add two more lines with a capacity of 3.5 million sq.m of
tiles per line. However, this is subject to the Company receiving additional allocation of
natural gas by the Public Establishment for Industrial Estates or installing a synthetic
gas plant. The Company does not have any clarity on the availability of additional natural
gas. Therefore, the Company is yet to prepare firm plans for the expansion of capacity.
The Company has not considered any expansion for the purposes of its projected
financial performance as set out in the Chapter Projected Financial Statements
37
Projected Revenue, EBITDA and PBT are as follows:
Years
2015
2016
2017
2018
RO. In Million
RO. In Million
RO. In Million
RO. In Million
RO. In Million
Revenue
10.78
11.40
11.82
12.30
12.75
EBITDA
3.34
3.58
3.65
3.76
3.87
PBT
2.64
2.82
2.90
3.08
3.18
9.1.11. Corporate Social Responsibility (CSR)
2014
During the last few years, the Company has developed its Corporate Social Responsibility
by making certain contributions to the events organized or promoted by PEIE, Nakhal
Walis office and Oman Chamber of Commerce. The Company also made contributions
towards construction of mosques in Nakhal and Mudaibhi, sponsoring sports events in
the Walayat of Nakhal and making donations to the Environment Society of Oman. The
Company plans to participate in further programs organized by the Government and
NGOs for the welfare of the people of Oman.
9.1.12. Company property details
- Leasehold:
38
The Companys factory is situated in the leased land from PEIE. The land is leased for
an initial period of 25 years.
- Liwa land 15000 Sq.M. of land was purchased by the Company in Wilayat of Liwa
with the purpose of constructing staff accommodation. The same was registered in
the name of related parties. Please see paragraph 10.20 of this Prospectus for further
details.
9.1.13. Insurance
Policy
Cover
Sum insured
Consequential loss Loss of gross profit and/or increased RO 7,010,000

insurance
cost of working as a consequence of an
interruption to the business resulting from
loss or damage to the property occasioned
by the occurrence of an insured peril. The
indemnity period is 12 months.
Contractors plant
and machinery
insurance
Covers the contractors plant and machinery RO 181,272

such as wheel loaders, forklifts etc.
Electronic
equipment
insurance
Covers electronic equipment.
Fidelity guarantee
insurance
Covers loss of money or property belonging RO 10,000 - limit for any

to the insured or held in trust or commission one occurrence; RO 50,000
or cash, custody caused by a fraudulent or - aggregate limit
dishonest act committed by an employee.
Fire and perils

insurance
Covers fire, subterranean fire, standard RO 12,810,000

explosion, aircraft damage, earthquake,
smoke, riot, strike and civil commotion,
malicious damage, storm, tempest, hail,
flood, bursting or overflowing or escape
of water or fluids from pipes or tanks or
apparatus, impact (including own vehicles,
trees, aerials, receivers and masts), sprinkler
leakage and burglary/ theft due to forcible
entry into or exit from premises.
Loss of profit
following
machinery
breakdown
insurance
Covers loss of profit following machinery RO 7,010,000

breakdown. Period of indemnity is 12
months.
General open
policy insurance
for marine cargo
Covers imports and exports

machinery and ceramic tiles.
General open
policy insurance
for marine cargo
Cover import and export of ceramic items.
RO 120,000
spares, RO 250,000 - limit per

location / conveyance;
RO 250,000 - limit per
shipment;
RO 1,500,000 - total annual
turnover
location / conveyance;
shipment;
RO 2,050,000 - total
annual turnover
39
Machinery Break
Down
As per Standard Machinery Breakdown RO 7,600,000

Policy
Money Insurance
As per Standard Money Insurance Policy
Ro 5,000 to RO 300,000
Public Liability
Damages in respect of body injury (including

death or disease) to any person other than
an employee and loss of or damage to
property other than belonging to insured
Any one occurrence RO

500,000
Aggregate during policy
period
RO 500,000
Directors &
Officers Liability
All loss arising out of a claim for wrongful Limit of liability

act for which coverage applies except when RO 1,000,000
and to the extent that the company has
indemnified the insured persons for such
loss.
9.1.14. Employees
The Company has approximately 181 employees as at June 2014. The Company has
achieved the required Omanization percentage of 35%.
9.1.15. Tax Status
The Company had obtained exemption from the Ministry of Finance for five years
commencing from 1 June 2008 to 31 May 2013. The Company has applied for an
extension of the exemption period for a further five years pending approval of the Ministry
of Commerce and Industry but on a prudent basis has provided and paid for the taxation
liability from the month of June 2013.
9.2. GCC Ceramics Tile Market

(Unless otherwise stated all data and forecasts have been obtained from Frost & Sullivan report
on Analysis of Ceramic Tile Market, 2012)
The Middle East, Africa and Levant regions has witnessed a growing appetite for tiles and sanitary
ware products. This is because of the growing construction market, coupled with an increasing
population. UAE, Egypt and Saudi Arabia are among the 30 top tiles manufacturing countries in
the world.
GCC Ceramic Tile Market
Estimate
Market Size (2011)
278 Million Sq.m
Market Size at End of Forecast Period (2021)
987 Million Sq.m
Base Year Market Growth Rate (2011)
11%
10 Year Forecast Market Growth Rate (CAGR)
14%
Source: Frost & Sullivan report on Analysis of Ceramic Tile Market, 2012.

9.2.1. GCC Ceramic Tile Market Overview
40
Ceramic is widely used and is a popular material used in all kinds of buildings. Demand
for ceramic tiles in GCC is continuing to increase with the help of construction growth in
countries like Saudi Arabia and Qatar.
The construction sector is expected to grow well in Oman, Saudi Arabia, Qatar and UAE
in the next few years. Omans five year development plan for 2011-2015 has budgeted a
total government expenditure of 78 billion USD which is 113% higher than the last 5 year
plan. This expenditure is likely to improve the growth rate of the construction sector.
Market demand in Saudi Arabia is expected to remain buoyant in 2013-17 as the Saudi
Arabian government has announced a 120 billion USD investment for the development of
six new economic cities and a plan for constructing 0.5 million houses by 2015. The local
production capacity in Saudi Arabia is not adequate to cater to this growing demand of
tiles.
Tile manufacturers in the UAE and Oman are expected to benefit from this growing demand
in Saudi Arabia and are expected to export larger volumes of tiles to Saudi Arabia in the
next 3-5 years.
9.2.2. GCC Ceramic Tile Market Snapshot
In Million Sq.mt
Country
Ceramic Tiles
Production
Capacity
Ceramic tiles
Consumption/
Demand (2011)
Saudi Arabia
78
120
UAE
61
77
Oman
21
28
Kuwait
[0]
25
Qatar
[0]
17
Bahrain
[0]
11
Total
160
278
Source: Frost & Sullivan report on Analysis of Ceramic Tile Market, 2012

9.2.3. Ceramic Tiles Market Demand
Total ceramics tiles demand in 2011 was 278 Million Sq.mt.
About 120 Million Sq.mt of this demand was from Saudi Arabia where there is a surge
in demand from the residential sector.
UAE consumed about 77 Million Sq.mt of tiles contributing to 28% of the demand.
Demand from Oman was about 28 Million Sq.mt in 2011. This gets converted to 10%
of the share in GCC.
GCC manufacturers of ceramic tiles produce approximately 160 Million Sq.mt of tiles
each year.
A significant portion (more than 25%) of the total production is exported to non-GCC
countries.
40% of the total demand in GCC is supplied by GCC manufacturers. About 25% of the
GCC demand is met by European companies. Chinese brands supply to about 30%
of the market demand. The remaining is met by imports from other countries such as
Malaysia, India and Egypt.
41
9.2.4. GCC Ceramic Tiles Market Forecast

Total Ceramic Tiles Market : Middle East (GCC), 2011-2021
Sales by End user type
Note: All figures are rounded. The base year is 2011.
9.3. Ceramic Tile Market

(Unless otherwise stated all data and forecasts have been obtained from Frost & Sullivan report
on Analysis of Ceramic Tile Market, 2012.)

9.3.1. Sultanate of Oman
The manufacturing sector in Oman has improved, with the residential and commercial
sectors being the most important. Malls and hotels are the major end users among
commercial end-users. Industrial demand is also estimated to be significant in creating
demand for tiles. Oman tiles manufacturers meet a small portion of the demand, as the
demand for Chinese and other Asian brands is high.
42
Manufacturers from neighboring GCC countries play an important role in meeting the
demand for tiles in Oman. High-end residential apartment and hotels are noticed to be
using European brands which could be estimated as 10 % of the total demand. Oman
has not encouraged imports from other countries, such as India or Malaysia etc. Hence
only about 7% of the demand is met through them in Oman. This composition is likely to
remain the same in the near future, unless there is aggressive change in sales plans for
domestic companies.
9.3.2. United Arab Emirates
Residential and commercial sectors are the biggest demand creators in UAE and about 70
% of the tiles sold in UAE are consumed by these two segments.
Demand & Supply Analysis - UAE
Being the commercial hub of the Middle East, 40% of tiles is used in commercial sectors.
Public infrastructure such as metros, airports, ports etc. demanded about 19 Mn Sq.mt of
tiles in 2011.
Out of the total demand for tiles in UAE, 40% is supplied through Chinese imports. Most
industry participants opine that this trend would continue to prevail in the forthcoming years
as well. 25% of the demand for tiles in the UAE is supplied through local manufacturers in
UAE. Imports from Saudi Arabia and Oman play a significant role in meeting the demand
for tiles in the UAE.
9.3.3. Kingdom of Saudi Arabia
Ceramic tiles sales in Saudi Arabia are more than 120 million Sq.mt. (2011) and are
estimated to grow at the rate of 16.2% from 2011 2021.
Saudi Arabias recent expansion of the manufacturing sector has seen an upsurge in
economic activity. According to MEED, Saudi Arabia is known to have about 1mn shortage
of homes; hence the market for residential construction is expected to pick up momentum
in the forthcoming years. At the same time, Bloomberg estimates suggest a 2mn home
shortage by 2014. Similarly, public infrastructure development projects have increased as
a part of the countrys long term vision. Hence public infrastructure projects are expected
to play a significant role in creating demand for tiles and other building materials.
43
Demand & Supply Analysis - KSA
9.3.4. Qatar
Qatar is witnessing a considerable amount of demand from the renovation or re-construction

market. Ceramic tiles are expected to be demanded in huge volumes for stadiums
and entertainment centers to be built for the Football World Cup in 2022. According to
Business & Economy Digest, Qatar has a low population and the property ownership laws
are stringent for expats, the contribution of demand from the residential property market is
currently low. This is compensated by the economic activities and the rise of commercial
sector. About 10 Mn Sq.m of tiles was demanded by the commercial sector in 2011.
Public infrastructure has been on the rise since 2005 and in 2011 it contributed to about
20% of the total demand.
Demand & Supply Analysis - Qatar
44
Currently there is no manufacturing of tiles prevailing in Qatar, but several building materials
companies are exploring the possibilities of entering the tiles market. Qatar is also promoting
its local manufacturing set up to be self-sufficient for the construction of 2022 Football World
Cup stadiums. Qatar is encouraging local manufacturing of building materials in order to be
able to easily supply to the demand which is expected to rise from 2016 onwards. Currently,
the majority of the demand for tiles in Qatar is met through imports from China, followed by
GCC companies and then imports from Europe and other countries.
9.3.5. Kuwait
Kuwait is one of the top 30 countries in the world for importing ceramic tiles. There is
a significant demand for new construction projects. However, Kuwait witnesses a large
portion of its demand arising out of the reconstruction or renovation market. Like most other
countries, residential and commercial developments contribute to about 70% of the total
demand. Public infrastructure projects, including mosques, witnessed an uplift in 2011.
Demand & Supply Analysis - Kuwait
Kuwait is currently a slow growth market with limited economic activity and high
dependence on oil based revenues. Half of the total annual demand for tiles is met through
imports from China and about 25% of the demand is catered by the local GCC companies.
There is one local manufacturer in Kuwait who produces a limited quantity of ceramic tiles
which is insignificant to the market.
9.3.6. Bahrain
Bahrain has predominantly been a commercial and banking hub of GCC alongside Dubai.
Bahrain is now shifting its focus on mixed use projects. In 2011, residential and commercial
construction projects together contributed to 70% of the demand for tiles in Bahrain.
Renovation of public infrastructure increased the demand for tiles in that segment and it
contributed to 15% of the total demand for tiles in Bahrain. Currently, imports from China
occupy in the majority of the market for tiles in Bahrain. However, local GCC companies,
especially from Saudi Arabia have a strong foothold in Bahrain due to easy accessibility.
Due to low demand and slow growth there are no local manufacturers expected in the near
future in this market, however the demand is expected to increase once the government
measures are fully implemented.
Demand & Supply Analysis - Bahrain
Source: Frost & Sullivan report on Analysis of Ceramic Tile Market, 2012
45
10. Risk Factors and Mitigants

Prospective investors should carefully consider the risks described below in addition to all
other information presented in this Prospectus, including the financial statements set out in
this Prospectus, before deciding to purchase any of the Shares offered for subscription.
Forecasts are projections made by the Company based on best estimates and actual results
might vary. Investors may note that the risks and mitigating factors mentioned below reflect
the Companys opinion based on the current knowledge and the information available to it.
Additional risks and uncertainties not presently known to the Company or that the Company
currently believes to be immaterial may also have a material adverse effect on the Companys
financial condition or business success. The actual risks and the impact of such risks could be
materially different from that mentioned herein and could have a material adverse effect on the
Companys business, results of operations, financial condition and prospects and cause the
market price of Shares to fall significantly and investors to lose all or part of their investment.
Unless otherwise stated in the risk factors set out below, the Company is unable to specify or
quantify the financial or other risks mentioned therein.
10.1.
Demand
The performance of the Company is directly linked to the level of activity in the construction
sector and the resulting demand of its products from the residential and commercial construction
sector. A fall in demand due to economic downtrend in the construction sector or any other
factor adversely affecting the economy could affect the performance of the Company.
Mitigant: The Government of Oman is implementing a number of large infrastructure projects

(such as roads, airports, ports, power and water plants) and other large projects are being
considered (e.g. rail network). Similar growth is expected across the GCC region. The Company
believes Omans economic activity will provide it with a strong platform to sustain demand for
its products and its projected growth plans. Further, as per the market report (referred to in
Chapter 9), the demand for ceramic tiles in the GCC region is expected to grow at a CAGR of
14% over the period 2011-2021 and the region is a net importer of ceramic tiles.
10.2.

Competition including risk of International/new competitors

The Company faces competition from existing as well as new entrants into the sector, both
within Oman and in external markets, where there are large international competitors. If the
Company is unable to effectively compete, its business growth and financial performance may
be affected, together with the market price for the Shares.
Mitigant: The Company has grown over the years and has established itself in the market
(the Company estimates a 16% market share of the tile industry in Oman) with its products
receiving wide customer acceptance, as evidenced by its steady growth in sales (sales CAGR
for the period 2008-2013 was 40%). With its experienced Board of Directors and executive
management team, the Company believes that it is well positioned to face the market
competition.
46
10.3.
Revenue and credit
The Company has recorded a steady increase in revenue over the past few years and expects it
to grow further in the future, as may be noted from its past and projected financial statements.
However, the Company operates in a competitive market which exposes it to the risk that its
revenues may not grow or sustain at the projected levels. The Company derives a substantial
portion of its sales from the local, regional and international markets, where it faces competition
from large established companies. Further, the Company does not have any long term supply
contracts with its customers or distributors, thereby exposing it to the risk of fluctuations in its
sales. Further, as the Company offers credit facilities to its customers/ distribution channels, it
also faces credit risk from potential defaults or delays in realization of its receivables.
As of December 31, 2013, 55% of Companys trade receivables are due from 6 customers
(2012: 52% from 6 customers) (2011: 55% from 6 customers). (2010: 58% from 6 customers).
However, the composition of these 6 customers is different for each of these years and the
Company has not had to make any provision or write-off in respect of these customers. Most
of the trade receivables were collected within the 90 days specified in the terms of business
between the Company and its customers.
Mitigant: The Company has been successfully facing various competitive pressures and
has grown over the past years. It has an experienced Board of Directors, management team
and a well-established sales network in Oman and in the regional and international markets.
Its products have been well accepted in the market with repeat orders from its customers.
Although the Company does not have any long term supply contracts, it believes that its wide
customer base provides stability without excessive reliance on any large customers.

10.4.
The Companys sales /exports are fully covered by Letters of Credit (L/Cs), post-dated cheques
and ECGA cover, thereby substantially reducing the risk of non-recoveries. Further, in the last
4 year period (2010-2013), the Company recorded aggregate sales of RO.28.89 Million of
which it has recovered an amount of RO28.83 Million till date, which is 99.8% of the sales.
The Company also monitors its receivables position and periodically reviews its exposures and
credit policies to its customers/ distribution channels to manage such risks.
Gas Supply
The Company uses natural gas for its manufacturing operations for which it has a gas supply
agreement with the Public Establishment for Industrial Estates (PEIE) dated 4 March 2008
(Gas Supply Agreement). The Company has enhanced its production in recent years and this
has resulted in its natural gas consumption being significantly more than its allocated quota
under the Gas Supply Agreement. In April 2014, the Company received correspondence from
the PEIE stating that the Companys over consumption of gas affected the PEIEs ability to
supply gas to other companies as per PEIEs obligations and requested that the Company
restrict its gas usage to its allocated quota.
This has been followed by further correspondence which has left the matter inconclusive and
there is a risk that the natural gas supplied to the factory could be restricted at any time
between now and October 2014 when a synthetic natural gas plant should be operational. The
Company has estimated the maximum financial impact of this risk as follows:
47
For the period of 6 months ending 31st

December 2014
As per
Financial
Projections
Projection considering
impact of possible
restriction in gas
consumption
Production (million sq.m)
3.0
2.6
Revenues (RO mln)*
5.12
4.4
PAT (RO mln)
1.26
0.98
EPS (RO) annualised
0.051
0.039
Dividend Rate
35%
20%
* Revenue impact is offset by projected sale from existing stock of finished goods

Of course, if the restriction on the natural gas supply is either for a period that is less than 2
months or does not restrict the supply to the allocated quota level, then the financial impact
will be less severe than indicated above. The PEIE continues to bill the Company for the gas
used and the Company continues to pay for it.
Mitigants: The Company has applied to the PEIE and the Ministry of Commerce and Industry
for its quota of natural gas to be increased and the PEIE has informed the Company that this
will happen when further gas is available in Sohar Industrial Estate. The Company has also
contracted with Innovative Energy Systems LLC for the supply and installation of a synthetic
natural gas plant in order to supplement its supplies of natural gas. The capital cost of the plant
is approximately RO 350,000 and it is expected to be commissioned by October 2014. The
financial impact of using synthetic gas rather than natural gas has been taken in to account in
the financial projections.
10.5.
Raw Materials
The main raw materials required by the Company are:
(i) For the production of ceramics; Shale/clay, limestone and quartzite which are all available in
abundance in the GCC region and the Company currently procures most of these materials
from suppliers in Oman and the UAE; and
(ii) For the production of glazed coatings on tiles, frits, engobes and inks/pigments which are
currently imported from Europe and Asia from various suppliers.
In the past the Company has been fined by both the MECA and the MOCI for mining with
only a prospecting license, however for some time the Company has not carried out mining
activities. The Company has, however, applied for a full mining licence from the MOCI.
The Company is currently in discussions with the MOCI to negotiate and settle payments
in respect of mining of clay carried out at its sites in Wilayat Nakhal with only a prospecting
license. The MOCI have recently informed the Company that they must pay RO. 750,000 for
the value of clay which they estimate has been extracted with only a prospecting license. The
Company has made full provision in its accounts in respect of such payments.
Mitigant: Despite the Company making a full provision in its accounts for the amount of
payment sought by the MOCI, the Company is to seek a review of the levied charges of
48
extracted clay and is hopeful that the above payment will be reduced. The Company has also
applied for mining /quarry licenses to the Mining Department of the MOCI to procure shale/clay
from certain sites in Oman and is hopeful that it will be granted in the near future.
The Company is procuring its entire requirement of clay from suppliers in the UAE at competitive
prices. Hence, non-availability of the mining license is not expected to affect the Companys
operations or profitability.
The Company has also identified alternative suppliers for the materials in different geographies.
Short-term disruption in supplies of raw materials due to regulatory, statutory or technical
reasons is always a risk, however this is unlikely to adversely affect the Companys production.
10.6.
Performance
While the Company has a robust demand for its products, the success and profitability of the
Company primarily depends on its ability to successfully maintain its production levels, quality
standards and cost efficiencies. Any shortfall in supply and/or quality will adversely impact the
Companys financial performance, reputation and prospects. Such failure may be on account
of various factors including those on which the Company does not have any control, such as
fluctuations in raw material prices or non-availability of raw materials, consumables or utilities.
Mitigant: The Company has a credible track record of timely delivery of products and at the
same time maintaining the quality (e.g. it has not had any commercial disputes in relation to
defective batches). It has focused on developing its expertise, resources and technical skills
to ensure that it is fully equipped to meet all its future commitments. The Companys Board of
Directors and management have extensive experience in plant operations as well as handling
the competitive market.
10.7.
Technology
New technologies may be introduced by competitors in areas such as manufacturing process,
product design or product usage which may have an impact on the Companys market position.
Mitigant: The Company uses dry grinding technology which is a more energy efficient process
than older technologies. Its machinery has been supplied by leading reputed international
manufacturers and has been installed for only 5-7 years. The Companys management monitors
potential advances in technology and the Company is prepared to invest in upgrading its
manufacturing facilities as and when required.
10.8.
Operations
The Companys operations could be adversely affected on account of breakdown of plant and
equipment, non-availability or shortage of gas, power, water, other utilities and spare parts,
accidents and mishaps such as fire, disruptions in the industrial area where the plant is located
and other such causes, which may be beyond the Companys ability to control.
Mitigant: The Company has been successfully operating its plant for the past several years.
Further, the Company has obtained various insurance policies (as mentioned in paragraph 9.1
of this Prospectus) such as loss of profit, machinery breakdown, fire and perils, and electronic
equipment insurance to cover some of these risks.
49
10.9.
Force Majeure
Any force majeure event such as acts of war, armed conflicts, blockades, acts of rebellion,
riots, civil commotions, strikes, sabotage, terrorist acts, lightning, fires, floods, earthquakes,
tsunamis, floods, storms, cyclones, typhoons, tornados or other natural calamities or acts of
God could affect the Companys operations and financial position.
Mitigant: These risks are common to any business operation.

10.10. Increase in cost of electricity and consumables

Any increase in the cost of raw materials, gas, electricity, water and consumables may
adversely impact the Companys margins and profit, as the Company may not be in a position
to increase the price it charges to its customers. The market price of the Shares may therefore
be adversely affected.
Mitigant: The Company believes that such increases are likely to impact all similar businesses
including its competitors within Oman and hence it may not be at a disadvantage in the local
market.
10.11. Manpower

The Company is dependent on its experienced Board of Directors, management team and
personnel for its performance. If the Company is not able to recruit additional qualified
personnel as per its requirements or replace those who leave the services of the Company,
it could have a material adverse effect on its operations, performance and financial condition
of the Company, including the market price of the Shares. Further, the Company needs to
engage Omani employees to maintain its Omanisation targets. If the Company is not able
to identify and recruit suitable Omani personnel, it could face action from the Ministry of
Manpower.
Mitigant: The technology used by the Company enables less manpower intensive operations
thereby reducing its need for recruiting large number of personnel. The Company places high
importance on developing conducive Human Resource policies aimed at achieving employee
satisfaction and motivation. Moreover, the Company is aiming through various programmes to
induct additional Omani employees for meeting its Omanisation targets and reducing its need
for expatriate personnel.
10.12. Interest rate

As the Company has availed debt funding, any increase in interest rates could increase its cost
of borrowing, thereby impacting its profitability.
Mitigant: The Company has a low debt equity ratio which reduces the level of risk. It may also
consider the possibility of hedging its interest rate exposures through swaps, if required.
10.13. Exchange rate movement

50
The Company is exposed to foreign exchange risk as it exports its products regionally and
internationally. It is also required to import some of its raw materials and technology/ capital
expenditure, which are designated in foreign currency. Any adverse movement in exchange
rate could materially affect the financial performance of the Company and the market price
for the Shares. In case the Omani Rial is depegged from the US Dollar, this could expose the
Company to additional risks.
Mitigant: As most of the GCC currencies, including the Omani Rial, are pegged to the US
Dollar, this reduces the extent of foreign exchange risk faced by the Company in excess of
those faced by its competitors. Further, for its import of glaze materials from Europe, the
Company enters into suitable forward contracts to protect itself against fluctuations in foreign
exchange rates of Euro.
10.14. Accounting policy and International Financial Reporting Standards (IFRS)

Any changes to the Companys accounting policy including on account of changes in

accounting standards or regulations, could impact the Companys financial statements and
have a bearing on its ability to declare dividends.
Mitigant: Such changes are expected to affect all businesses and companies in general.
10.15. Regulatory

Any adverse policy action or changes in regulations by the Government or its agencies, either
in Oman or other jurisdictions where the Company operates, could affect the Companys
business, profitability and financial position. The Companys operations are subject to
regulations in Oman. Regulations that specifically apply to the Companys business include:
corporate existence, power and authority to conduct its business; environmental regulation;
and regulation of health and safety. The Company is subject to a varied and complex body of
laws and regulations that both public officials and private parties may seek to enforce.
The Company conducts business operations under several licenses, leases and permits.
Such licenses, permits and leases may be suspended, terminated or revoked if the Company
does not comply with their respective requirements. The Companys business could also be
materially adversely affected by changes in existing law, the interpretation of existing laws or
the adoption of new laws applicable to the Company. The imposition of fines or penalties, or
the revocation or suspension of licenses, permits or lease arrangements could have a material
adverse effect on the business, results of operations and financial condition of the Company,
including the market price of the Shares.
Mitigant: The Company believes that the Governments policies will continue to be aimed at
encouraging the growth of the industrial and manufacturing sector.
10.16. Authorizations, Permits and Approvals

A number of authorizations, permits and approvals from various Government authorities are
required to enable the Company to conduct its business in the Sultanate of Oman. There is no
guarantee or assurance that these will be given or, if given, upon what terms and conditions
and for those licenses already obtained, that they will not be revoked.
Mitigant: The Company believes that it has and will actively pursue to receive any required
authorizations, permits and approvals to conduct its business in the Sultanate of Oman.
51
10.17. Oil Prices and Geo-Political

The Companys operations and main customer markets are in Oman and the GCC. As economic
growth of the GCC is primarily driven by their oil exports, oil prices have a significant impact on
the level of economic activity in the region which in turn affects the construction sector which
is the primary consumer of the Companys products. Further, geo political and security risks in
the region also affect economic growth of the region and could have a material adverse effect
on the market price for the Shares.
Mitigant: It is generally expected that the oil prices will continue to remain within the prevailing
price band in the short to medium term and that the development of infrastructure will contribute
to economic growth, particularly in Oman.
10.18. Ownership of Factory Land

The site used for the factory is owned by the PEIE which, under the terms of a lease agreement,
has granted a lease over the factory site at Sohar to the Company with a term of 25 years from
the effective date, which may be renewed for a further term of 25 years. If Company is in material
breach of the terms of the lease agreement, the PEIE may, at its option, elect to terminate the
lease agreement early, evict the Company from, and repossess, the site. A termination of the
lease agreement would have a material adverse effect on the business, results of operations
and financial condition of the Company, including the market price of the Shares.
Mitigant: The Company aims to comply with the terms of the contract signed with PEIE and
avoid any material breach of the terms. Similar terms apply to other companies having their
facilities in in the industrial zone of the PEIE.
10.19. Corporate Governance

As an SAOG company, it will be subject to greater corporate governance requirements.

Any default in compliance could lead to regulatory action and / or penalties. Further, these
requirements may require substantial management oversight which may divert their attention
from the day-to-day business operations.
Mitigant: The Companys Board of Directors and the management consist of well experienced
persons who are familiar with the corporate governance requirements. The Company will also
be enhancing its compliance processes as necessary in order to meet regulatory requirements.
10.20. Liwa Land

52
The Company has land in its books (valued at approximately RO 225,000) with an area of
15,000 sq.m. which is situated in Liwa. The Company paid for this land and the intention
was for staff accommodation to be built on the land. However the Company subsequently
decided not to build this staff accommodation and therefore the land could not be registered
in the name of the Company because companies may only own land for use as part of their
business. Accordingly the land was registered in the names of the Companys Chairman, Mr
Masood Bin Humaid Bin Malik Al Harthy and Mr Shabeer Mustafa Abdul Redha Sultan (who
are shareholders and related party) under a trust arrangement with the registered owners
holding the land in trust for the Company. The effectiveness of this trust arrangement could
be challenged legally although the Board of Directors has no reason to believe that it will be.
Moreover the value of the land is insignificant in comparison to the size of the Companys
balance sheet.
Mitigant: The Company is currently seeking a buyer for the land.

10.21. Risk factors relating to the Shares

No trading history: The Shares that are being offered for subscription will be listed on the MSM
as per the timetable given in this Prospectus. There is no prior history of trading in the Shares.
Share price fluctuation: After listing of the Shares on the MSM, the share price may fluctuate
for various reasons and may go below the Offer Price.
Liquidity: There are no guarantees that an active market will exist in the Shares subsequent to
the listing on the MSM. To that extent Applicants face the risk of holding shares that may not
be actively traded.

Future Increase of Equity Capital: The Company may in the future, increase its equity capital
through further issues (either on rights basis or otherwise). Such capital increases could impact
the share price of the Company on the MSM.
Dividends: Dividend payments are not guaranteed and the Board of Directors may decide in
its absolute discretion to not recommend dividends or recommend dividends lower than the
projected levels.

Market Fluctuations: Market fluctuations and other factors may adversely affect the trading
price of the Shares regardless of the actual operating performance of the Company. All equity
investments carry market risks to varying degrees. The value of any security can fall as well as
rise depending on market conditions.
Dividend Policy: Dividend payments are not guaranteed and the Board of Directors may decide,
in its absolute discretion, at any time and for any reason, not to pay dividends. Any payment
of future dividends will be made taking into account the sufficiency of distributable reserves
and liquidity in order to ensure the Companys operational needs and/or business growth are
not limited by the unavailability of funds, as well as the Companys known contingencies and
compliance with any funding facility covenants.
Further, any dividend policy, to the extent implemented, will significantly restrict the Companys
cash reserves and may adversely affect its ability to fund unexpected capital expenditures, as
well as the ability to make interest and principal repayments on its outstanding loan facilities.
As a result, the Company may be required to borrow additional money or raise capital by
issuing equity securities, which may not be possible on attractive terms or at all.
53
11. Source of Financing

11.1.
Term Loans
Government soft loan:
The Government soft loan was obtained at a fixed interest rate of 3% per annum. The loan is
repayable in 28 quarterly instalments of RO 35,714 commencing from May 2011. The gross
amount outstanding as at 30th June 2014 was RO 535,714 (RO 607,143 as on 31st December
2013). The loan is carried at fair value and is secured through a first ranking charge over the
Companys fixed assets.
11.2.
Other Facilities
The Company had bank borrowings in an aggregate amount of RO 750,418 as on 30th June
2014 (RO 615,228 as on 31st December 2013). Apart from the above, the Company has
other facilities approved by certain banks, which it has not utilized on a regular basis. Bank
borrowings comprise bank overdraft, loan against trust receipts and bill discounting facilities
from local commercial banks carrying interest at rates ranging from 2.5% to 6% (31 December
2013: 3.25% to 6.5%) per annum. The interest rates are either subject to re-negotiation with
the bank upon renewal of the facilities, which generally takes place on an annual basis or are
reviewable on a quarterly basis at the banks discretion. The bank borrowings are secured by
a second ranking charge on usufruct rights in respect of the Companys factory land at Sohar
Industrial Estate and a second ranking commercial mortgage over the Companys fixed assets.
11.3.
Status of Facilities
As of 31st December 2013, the details of loan facilities outstanding are as under:
54
Facility
Outstanding amount (RO million)
Bank borrowings
0.615
Term Loan
1.15
Performance Bonds
Nil
11.4.
Sources of Financing
RO 000
Category
as on 31st December 2012

Amount
as on 31st December 2013

Amount
Short term debt

Term loan (current portion)
1,192.8
792.9
150.0
615.2
1,932.9
2,772.3
3.2
3,278.9
4,180.4
Term loan (non-current portion)
1,735.2
360.5
Total debt
5,014.1
4,540.9
Total Liabilities
5,432.6
Equity capital
3,500.0
5,000.0
88.2
354.6
605.9
Retained Earnings
2,254.4
1,117.2
Total Equity
6,109.0
Bank Borrowing
Trade & other payables
Due to related parties
Sub-total
Long term debt
Share Premium
Legal reserve
Total financing sources

Total Liabilities/ Shareholders
Equity
47.1
52.9
11,541.5
5,000.7
6,811.4
42.3
57.7
11,812.1
0.89
0.73
The IPO will not affect the sources of financing as it is only an offer for sale of existing shares
of the Company held by the shareholders.
55
12. Historical Financial Statements

AL MAHA CERAMICS COMPANY SAOC (under transformation to SAOG)

Historical financial statements
31 December 2010 to 31 December 2013
Contents
Accountants report on the compilation of historical financial statements
Historical statement of financial position
Historical statement of profit or loss and other comprehensive income
Historical statement of changes in equity
Historical statement of cash flows
Historical notes
Schedule I
56
57

Historical statement of financial position
as at 31 December
2013
RO
2012
RO
2011
RO
2010
RO
7,874,063
225,000
7,847,336
285,000
7,445,693
285,000
7,656,304
285,000
8,099,063
8,132,336
7,730,693
7,941,304
1,763,422
1,867,190
82,439
1,407,676
1,872,898
128,620
1,528,785
1,409,536
8,783
1,199,799
1,361,415
5,874
3,713,051
3,409,194
2,947,104
2,567,088
11,812,114
11,541,530
10,677,797
10,508,392
5,000,000
88,199
605,988
3,500,000
354,562
3,500,000
115,729
3,000,000
14,994
1,117,229
2,254,397
279,904
(626,710)
6,811,416
6,108,959
3,895,633
2,388,284
360,481
104,005
252,318
103,549
1,735,252
122,091
224,217
72,086
2,887,631
162,569
45,260
4,223,128
204,930
31,580
820,353
2,153,646
3,095,460
4,459,638
792,857
615,228
2,772,260
-
1,192,857
150,000
1,932,859
3,209
992,857
1,127,626
1,473,427
92,794
828,142
1,933,702
724,263
174,363
Total current liabilities
4,180,345
3,278,925
3,686,704
3,660,470
Total liabilities
5,000,698
5,432,571
6,782,164
8,120,108
11,812,114
11,541,530
10,677,797
10,508,392
1.362
1.260
0.803
0.549
Non-current assets
Property, plant and equipment
Investment property
Note
4
5
Total non-current assets

Current assets
Inventories
Trade and other receivables
Cash in hand and at bank
6
7
8
Total current assets

Total assets
Equity
Share capital
Share premium
Legal reserve
Retained earnings (accumulated
losses)
9 (a)
9 (a)
9 (b)
Total equity
Non-current liabilities
Term loan
Deferred Government grant
Deferred tax liability
End of service benefits
10
10 (a)
19
14 (c)
Total non-current liabilities

Current liabilities
Term loan
Bank borrowings
Trade and other payables
Amount due to related parties
10
11
12
18
Total equity and liabilities

Net assets per share - restated
20
The historical financial statements were approved and authorised for issue by the Board of Directors
on 27-03-2014 and signed on their behalf by:

Chairman
Director
Chief Executive Officer
The notes form an integral part of these historical financial statements.
The Accountants report is set forth on page 1.
58

Historical statement of profit or loss and other comprehensive income
For the year ended 31 December
2013
RO
2012
RO
2011
RO
2010
RO
9,767,726
9,018,638
6,112,396
4,000,947
(5,501,001)
(5,147,824)
(4,082,872)
(2,945,836)
4,266,725
3,870,814
2,029,524
1,055,111
15
(747,892)
(558,005)
(384,137)
(316,509)
16
17
(660,626)
55,945
(565,103)
97,117
(329,264)
54,476
(198,280)
127,078
2,914,152
2,844,823
1,370,599
667,400
(60,000)
(15,000)
10&11
(122,690)
(232,280)
(363,250)
(502,457)
2,731,462
2,612,543
1,007,349
149,943
(217,204)
(224,217)
2,514,258
2,388,326
1,007,349
149,943
0.512
0.492
0.214
0.034
Note
Revenue
Cost of sales
Gross profit
Administrative and general
expenses
Selling and distribution expenses
Other income
Profit from operations
Loss on fair value of investment
property
Finance charges
13
Profit before tax

Income tax
19
Total comprehensive income and

net profit for the year
Basic earnings per share restated
21
The notes on pages 6 to 26 form an integral part of these historical financial statements.
59

Historical statement of changes in equity
Share
capital
RO
Share
premium
RO
Legal
reserve
RO
(Accumulated
losses)
retained
earnings
RO
3,000,000
(761,659)
2,238,341
Transfer to legal reserve
14,994
(14,994)
Total comprehensive income for the year

Net profit for the year
149,943
149,943
3,000,000
-
14,994
100,735
(626,710)
(100,735)
2,388,284
-
500,000
500,000
1,007,349
1,007,349
3,500,000
115,729
279,904
3,895,633
238,833
(238,833)
(175,000)
(175,000)
3,500,000
2,388,326
2,388,326
354,562
2,254,397
6,108,959
251,426
(251,426)
1 January 2010
31 December 2010
Transactions with shareholders recorded
directly in equity
Issue of share capital
31 December 2011
directly in equity
Dividend paid
31 December 2012
Total
RO

directly in equity
Dividend paid
Bonus share issue
1,350,000
Issue of share capital
150,000
88,199
-
2,514,258
2,514,258
31 December 2013
88,199
605,988
1,117,229
6,811,416
5,000,000
- (2,050,000) (2,050,000)
- (1,350,000)
238,199
60

Historical statement of cash flows
For the year ended 31 December
Cash flows from operating activities

Profit before tax for the year
Adjustments for :
Depreciation
(Gain) loss on sale of property and
equipment
Provision for debtors and inventory
Loss on fair value of investment property
Finance charges
End of service benefits charge
2013
RO
2012
RO
2011
RO
2010
RO
2,731,462
2,612,543
1,007,349
149,943
554,381
507,297
478,644
463,650
(1,300)
379
(5,486)
37,617
60,000
122,690
34,540
3,539,390
(355,746)
27,903
232,280
27,867
3,408,269
116,991
(22,616)
363,250
21,031
1,847,658
(293,727)
(12,199)
15,000
502,457
19,310
1,132,675
772,316
(487,147)
(60,764)
(642,694)
369,847
667,595
(31,379)
(1,041)
(7,351)
(11,426)
3,406,919
2,153,411
1,219,492
(909,319)
(268,033)
(274,686)
7,000
(909,319)
(268,033)
(267,686)
(175,000)
(992,857)
(921,352)
(232,280)
(2,321,489)
176,111
500,000
(1,213,143)
(844,161)
(363,250)
(1,920,554)
(35,176)
400,000
(866,230)
(502,457)
(968,687)
(16,881)
128,620
(47,491)
(12,315)
4,566
(532,789)
128,620
(47,491)
(12,315)
82,439
(615,228)
(532,789)
128,620
128,620
8,783
(56,274)
(47,491)
5,874
(18,189)
(12,315)
(Increase) decrease in inventories

Decrease (increase) in trade and other
5,708
receivables
Increase (decrease) in trade and other
609,472
payables and amount due to related parties
(3,077)
End of service benefits paid
Net cash generated from operating
3,795,747
activities
Cash flows from investing activities
(581,108)
Purchase of property, plant and equipment
Proceeds from sale of property and
1,300
equipment
Net cash used in investing activities
(579,808)
Cash flows from financing activities
238,199
Increase in share capital
(2,050,000)
Dividend paid
(1,792,857)
Term loans obtained (repaid) net
(150,000)
Bank borrowings repaid
(122,690)
Finance charges
Net cash used in financing activities
(3,877,348)
Net change in cash and cash equivalents
(661,409)
Cash and cash equivalents at the
beginning of the year
Cash and cash equivalents at the end of
the year
Cash and cash equivalents at the end of
the year comprise of:
Cash in hand and at bank (note 8)
Bank overdraft (note 11)
61
Notes
(forming part of the historical financial statements)
Legal status and principal activities

Al Maha Ceramics Company SAOC (the Company) (under transformation to SAOG) is a closed
joint stock company registered on 15 November 2005 in the Sultanate of Oman. The principal
activity of the Company is manufacturing of ceramic tiles.
The Company intends to go for an initial public offering which is expected during year 2014.
Basis of preparation
These historical financial statements are prepared for the purpose of the inclusion in public offering
document and have been derived from the audited financial statements of the Company for the
years ended 31 December 2010 to 31 December 2013.
a) Statement of compliance
b) Basis of measurement
The historical financial statements have been prepared on the historical cost basis except for
derivative financial instruments and investment property, which are stated at fair value.
c) Functional and presentation currency
The historical financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and the Commercial Companies Law of 1974, as
amended.
These historical financial statements are presented in Rial Omani (RO), which is the
Companys functional currency.
d) Use of estimates and judgments
The preparation of historical financial statements requires Management to make judgments,

estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognized in the period in which the estimate is revised and in
any future periods affected. In particular, estimates that involve uncertainties and judgments
which have a significant effect on the historical financial statements include provisions for
impairment of receivables and inventories.
62
Notes
Significant accounting policies
3a
Changes in accounting policies
a) Disclosures- offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7)
As a result of the amendments to IFRS 7, the Company has expanded its disclosures about
the offsetting of financial assets and financial liabilities.
b) Fair value measurement
Except for the changes below, the Company has consistently applied the accounting policies
set out in Note 3b to all periods presented in these financial statements.
IFRS 13 establishes a single framework for measuring fair value and making disclosures
about fair value measurements when such measurements are required or permitted by other
IFRSs. It unifies the definition of fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. It replaces and expands the disclosure requirements about fair
value measurements in other IFRSs, including IFRS 7. As a result the Company has included
additional disclosures in this regard.
c) Presentation of items of Other Comprehensive Income
As a result of the amendments to IAS 1, the Company has modified the presentation of items
of other comprehensive income in its statement of profit or loss and other comprehensive
income, to present separately items that would be reclassified to profit or loss from those that
would never be.
3b
The following accounting policies have been applied consistently to all periods presented in
these historical financial statements:
(a) Foreign currencies
Transactions in foreign currencies are translated to the Companys functional currency at

exchange rates on the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies at the reporting dates are retranslated to the functional currency at
the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortized cost in the functional currency at the beginning of the period,
adjusted for effective interest and payments during the period, and the amortized cost in
foreign currency translated at the exchange rate at the end of the period. Foreign currency
differences arising on retranslation are recognized in the profit or loss.
63
Notes

(b) Financial instruments
(i) Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables, cash and cash
equivalents, term loan, bank borrowings, trade and other payables and amounts due from
and due to related parties. Cash and cash equivalents comprise cash balances and call
deposits and term deposits with original maturity not greater than three months.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at
fair value through profit or loss, any directly attributable transaction costs.
Subsequent to initial recognition, non-derivative financial instruments are measured as

described below.
Held-to-maturity investments

If the Company has the positive intent and ability to hold debt securities to maturity, then they
are classified as held-to-maturity. Held-to-maturity investments are measured at amortised
cost using the effective interest method, less any impairment losses.
Available-for-sale financial assets
The Companys investments in equity securities and certain debt securities are classified as
available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses, and foreign exchange gains and
losses on available-for-sale monetary items, are recognised in other comprehensive income.
When an investment is derecognised, the cumulative gain or loss in other comprehensive
income is transferred to profit or loss.
Financial assets at fair value through profit or loss
An instrument is classified at fair value through profit or loss if it is held for trading or is
designated as such upon initial recognition. Financial instruments are designated at fair value
through profit or loss if the Company manages such investments and makes purchase and
sale decisions based on their fair value in accordance with the Companys documented risk
management or investment strategy. Upon initial recognition attributable transaction costs
are recognised in profit or loss when incurred. Financial instruments at fair value through
profit or loss are measured at fair value, and changes therein are recognised in profit or loss.
Other

Other non-derivative financial instruments are measured at amortised cost using the effective
interest method, less any impairment losses.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares and share options are recognised as deduction from equity, net of any tax effects.
64
Notes
3 Significant accounting policies (continued)

(ii) Derivative financial instruments
The Company holds derivative financial instruments to hedge its interest and foreign exchange
risk exposures.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised
in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at
fair value, and changes there on are recognised in profit or loss.
(c) Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses. Subsequent expenditure is capitalised only when it substantially increases
the future economic benefits embodied in the item of property, plant and equipment. All other
expenditure is recognised in profit or loss as an expense when incurred. Gains and losses on
disposal are determined by the difference between the sale proceeds and the carrying value.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful
economic lives of the following classes of assets as follows:
Years
20
Plant and machinery
20
Heavy equipment
15
Furniture and office equipment
Motor vehicles
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
(d) Investment property
Buildings
Property, which is held for capital appreciation is classified as investment property. The
investment property is fair valued every three years, as assessed by an independent
professional valuer. Changes in the fair value are recognised in profit or loss.
(e) Inventories
Inventories are stated at lower of cost and net realisable value. Net realisable value is the price
at which inventories can be sold in the normal course of business after allowing for the costs
of realisation. The cost of inventories is based on the weighted average cost principle and
includes expenditure in acquiring the inventories and bringing them to their existing location
and condition. Provision is made where necessary for obsolete, slow moving and defective
items.
65
Notes
(f) Impairment

(i) Financial assets
All impairment losses are recognized in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring
after the impairment loss was recognized. For financial assets measured at amortized cost,
the reversal is recognized in profit or loss.
(ii) Non-financial assets
The carrying amounts of the Companys non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indications exist
then the assets recoverable amount is estimated. An impairment loss is recognized if the
carrying amount of an asset or cash generating unit is lower than its estimated recoverable
amount. Recoverable amount is the greater of its value in use and its fair value less costs
to sell. In assessing the value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset.
Impairment losses recognized in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in 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 amortization, if
no impairment loss had been recognized.
(g) Employee benefits
Obligations for contributions to a defined contribution retirement plan, for Omani employees,
in accordance with the Oman Social Insurance Scheme, are recognized as an expense in
profit or loss as incurred.
The Companys obligation in respect of non-Omani terminal benefits, under defined

contribution retirement plan, is the amount of future benefit that such employees have earned
in return for their service in the current and prior periods. The obligation is calculated using
the projected unit credit method and is discounted to its present value. The discount rate
used reflects current market assessments of the time value of money.
(h) Provisions
66
A provision is recognised in the statement of financial position 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.
Notes
(i) Revenue
Revenue from the sale of goods is recognised when the significant risks and rewards
of ownership have been transferred to the buyer. Revenue is not recognised if there are
significant uncertainties regarding recovery of the consideration due, associated costs or the
possible return of goods.

(j) Leases
Payments made under operating leases are recognised in profit or loss on a straight line basis
over the term of the lease. Lease incentives received are recognised as an integral part of the
total lease expense, over the term of the lease.
(k) Income tax
Income tax comprises current and deferred tax. Income tax expense is recognised in profit
or loss except to the extent that it relates to items recognized directly in equity or in other
comprehensive income. Current tax is the expected tax payable on the taxable income for
the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is calculated in respect of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary difference when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting 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 temporary differences can be utilized. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized.
(l) Directors remuneration
The total remuneration paid to the Directors is in accordance with the Articles of Association
of the Company.

(m) Finance cost and finance income
Finance cost comprises interest payable on borrowings calculated using the effective interest
rate method. Interest costs attributable on the acquisition and construction of property, plant
and equipment are capitalised as part of the cost of those assets. Other interest costs are
expensed in the period as incurred.
67
Notes
Interest income is recognised in profit or loss as it accrues taking into account the effective yield
on the asset.

(n) Government grant
The loan from the Government of the Sultanate of Oman is carried on the statement of
financial position at its fair value being the fair value of consideration received. The fair value
of the consideration received is the sum of all future cash payments, discounted using market
borrowing rates of interest for loans having similar maturity to discount the future contractual
cash flows.
The difference between the fair value and the book value is treated as a government grant
and is deferred over the period of the loan.
(o) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not yet
effective for annual periods beginning on or after 1 January 2013, and have not been applied
in preparing these historical financial statements. None of these will have an effect on
the historical financial statements of the Company, with the exception of IFRS 9 Financial
Instruments, published on 12 November 2009 as part of phase I of the IASBs comprehensive
project to replace IAS 39, which deals with classification and measurement of financial
assets. The requirements of this standard represent a significant change from the existing
requirements in IAS 39 in respect of financial assets. The Standard contains two primary
measurement categories for financial assets: amortised cost and fair value. The standard
eliminates the existing IAS 39 categories of held to maturity, available for sale and loans and
receivables. The standard is effective for annual periods beginning on or after 1 January 2015.
Earlier application is permitted.
Management have assessed that the standard will not have a significant impact on the
historical financial statements of the Company.

a) The movement of property, plant and equipment during the year is set out in Schedule I.
b) Factory building is constructed on land leased from the Public Establishment for Industrial
Estates (Sohar Industrial Estate). The lease is for an initial period of 25 years up to the year
2030 and is renewable for a further period of 25 years [note 22 (d)].
c) The property, plant and equipment is mortgaged as security against term loans and bank
borrowings availed from a commercial bank [notes 10 (b) and 11].
68
Notes
4 Property, plant and equipment (continued)
d) The depreciation charge for the period has been allocated as follows:
Cost of sales (note 13)

Administrative and general expenses
(note 15)
Selling and distribution expenses (note 16)
2013
RO
2012
RO
2011
RO
2010
RO
509,797
468,289
445,720
434,740
41,570
37,177
32,924
28,045
3,014
1,831
865
554,381
507,297
478,644
463,650
Investment property
Investment property comprises of a portion of land which has been jointly registered, in the name
of certain Directors, beneficially for and on behalf of the Company.
The investment property stated at its fair value of RO 285,000, which was determined by the
Management during the year 2010 and revalued at fair value of RO 225,000 by an independent
professional valuer as on 31 December 2013.
6 Inventories
Finished goods
Raw materials and packing materials
Consumables
Less: provision for slow moving and
obsolete inventories
677,608
618,581
510,087
379,491
640,835
396,945
550,258
700,439
283,565
610,249
498,057
132,229
1,806,276
1,417,271
1,534,262
1,240,535
(42,854)
(9,595)
(5,477)
(40,736)
1,763,422
1,407,676
1,528,785
1,199,799
Movement in provision for slow moving and obsolete inventories is as follows:

I January
Provided (witten back) during the year
9,595
33,259
5,477
4,118
40,736
(35,259)
59,410
(18,674)
31 December
42,854
9,595
5,477
40,736
69
Notes

Trade receivables
Less: impairment allowance
1,803,712
(67,312)
1,872,617
(62,954)
1,343,302
(39,169)
1,151,515
(26,526)
Advances to suppliers
Prepayments
Other receivables
1,736,400
25,397
65,059
29,224
1,809,663
20,422
28,562
14,251
1,304,133
85,998
19,405
-
1,124,989
44,190
192,236
1,856,080
1,872,898
1,409,536
1,361,415
a) As at 31 December 2013: 55% (2012: 52%; 2011: 55%; 2010: 58%) of Companys trade
receivables are due from 6 major customers.
b) Receivables covered under Export Credit Guarantee Agency (ECGA) as at 31 December 2013
amounted to RO1,593,549 (2012: RO 1,570,606; 2011: RO 818,672; 2010: RONil).
c) The aging of trade receivables at the reporting dates was:
Gross trade receivables

Not past due
Past due 1-90 days
Past due 91 days and above
2013
RO
2012
RO
2011
RO
2010
RO
1,692,814
48,144
62,754
1,753,908
55,578
63,131
1,272,970
46,858
23,474
959,045
166,414
26,056
1,803,712
1,872,617
1,343,302
1,151,515
4,558
62,754
62,954
15,695
23,474
470
26,056
67,312
62,954
39,169
26,526
Impairment
Not past due
Past due 1-90 days
Past due 91-365 days and above
The movement in impairment allowance assessed on past due trade receivables is as follows:
62,954
1 January
39,169
26,526
20,051
4,358
Provided during the year
23,785
12,643
6,475
31 December
70
67,312
62,954
39,169
26,526
Notes

Cash in hand
Cash at bank:
Current account
Call account
Margin account
3,551
3,331
523
4,170
62,901
15,695
292
97,039
27,958
292
6,262
1,706
292
1,412
292
82,439
128,620
8,783
5,874
9 (a) Share capital

As at 31 December 2013, the share capital of the Company comprises 5,000,000 (2012 and 2011:
3,500,000, 2010: 3,000,000) fully paid ordinary shares of RO 1 each [note 23 (b)].
At the end of the reporting periods, the shareholders of the Company who own 10% or more of
the Companys shares whether in their name, or through a nominee account, and the number of
shares they hold are as follows:
Holding %
2013
2012
2011
2010

36.06
9.70
9.70
32
10
10
32
10
10
32
10
10
Number of shares held

1,802,787
485,000
485,000
1,120,000
350,000
350,000
1,120,000
350,000
350,000
960,000
300,000
300,000
During the year, the Company has issued 1,350,000 bonus shares; further 150,000 shares have
been issued to Directors and certain employees at a premium of RO 88,199.
Being the closed joint stock company, the shares are not traded on the Muscat Securities Market.
The Company derived at fair value of RO 1.588 per share of face value RO 1,which is equivalent to
the net asset value as at 30 June 2013, by considering various factors which may have the effect
on the future profitability and expected dividend yield.
9 (b) Legal reserve
Article 106 of the Commercial Companies Law of 1974 requires that 10% of a Companys net
profit for the year be transferred to a non-distributable legal reserve until the amount of the legal
reserve becomes equal to one-third of the Companys share capital.
71
Notes
10 Term loan
Government soft loan (a)

Term loan (b)
Term loan (c)
Less: Current portion of term loan

Non-current portion of term loan
2013
RO
2012
RO
2011
RO
2010
RO
607,143
(104,005)
750,000
(122,091)
892,857
(162,569)
1,000,000
( 204,930)
503,138
650,200
-
627,909
2,300,200
-
730,288
3,150,200
-
795,070
3,761,200
495,000
1,153,338
2,928,109
(792,857) (1,192,857)
3,880,488
(992,857)
5,051,270
(828,142)
2,887,631
4,223,128
360,481
1,735,252
a) The Government soft loan was obtained at an interest rate of 3% per annum. The loan is
repayable in 28 quarterly installments of RO 35,714 commencing from May 2011. The loan is
carried at fair value. The fair value is the sum of all future cash payments, discounted using
borrowing rates of interest applicable to similar loans.

The difference between the carrying value and fair value of the Government soft loan is treated
as Deferred Government grant and is released to the statement of income over the period
of loan as necessary to match with the related costs, which is intended to compensate on
systematic basis.
b) The Company obtained term loan of RO 5,450,000 from a local commercial bank, secured
against the second ranking and usufruct right mortgage over property, plant and equipment of
the Company and proportionate guarantees from certain shareholders. The term loan carries
interest rate of 6 months LIBOR plus 275 basis points per annum. The term loan is repayable in
8 semi-annual installments ranging from RO 261,000 to RO650,000 commencing from January
2011. The Company entered into an interest rate swap agreement to hedge variability in cash
flows attributable to fluctuations in LIBOR at rate of 3.53% per annum up to October 2013.
c) Term loan denominated in Rials Omani, was obtained from a local commercial bank and carried
interest at the rate of 7.5% per annum. The term loan was repayable in 10 equal semi-annual
installments of RO 55,000, commenced from August 2010. The term loan was fully repaid
during July 2011.
72
Notes
11 Bank borrowings
Overdraft
Bill discounting
Loan against trust receipts
2013
RO
2012
RO
2011
RO
2010
RO
615,228
56,274
18,189
150,000
-
1,071,352
-
1,903,122
12,391
615,228
150,000
1,127,626
1,933,702
Bank borrowings comprise bank overdraft, loan against trust receipts and bills discounting
facilities from local commercial banks and carries interest at rates ranging between 3.25% and
6.5% (2010 to 2012: 4.75% and 6.5%) per annum. The interest rate is subject to re-negotiation
with the bank upon renewal of the facilities, which generally takes place on an annual basis. The
bank borrowings are secured by a second ranking and usufruct right mortgage over property,
plant and equipment of the Company and proportionate guarantees from certain shareholders.
12 Trade and other payables
Trade payables
Advance from customers
Accrued interest
Other payables
1,636,071
80,400
3,547
1,052,242
1,476,462
24,097
3,911
428,389
1,182,864
29,738
4,275
256,550
435,845
10,000
7,701
270,717
2,772,260
1,932,859
1,473,427
724,263
3,219,652
509,797
1,246,153
525,399
3,153,105
468,289
1,010,244
516,186
2,343,432
445,720
907,293
421,686
1,646,754
434,740
598,342
284,674
5,501,001
5,147,824
4,082,872
2,945,836
13 Cost of sales
Cost of raw materials
Depreciation (note 4)
Employee costs (note 14)
Other manufacturing expenses
73
Notes
14 Employee costs (continued)
a) Employee costs is allocated as follows:

2013
RO
2012
RO
2011
RO
2010
RO
1,246,153
Cost of sales (note 13)
382,172
(note 15)
Selling and distribution expenses (note
173,357
16)
1,010,244
907,293
598,342
316,873
245,140
167,805
145,223
123,562
61,756
1,801,682
1,472,340
1,275,995
827,903
1,750,656
1,430,859
1,237,705
794,665
34,540
27,867
21,031
19,310
16,486
13,614
17,259
13,928
1,801,682
1,472,340
1,275,995
827,903
b) Salaries and employee related costs comprise:

Salary, wages and other benefits
Increase in liability for unfunded
defined benefit retirement plan
Contributions to defined contribution
retirement plan
c) Movements in end of service benefits liability recognised in the statement of financial

position is as follows:
1 January
Add: charge for the year
Less: paid during the year
31 December
74
72,086
34,540
(3,077)
45,260
27,867
(1,041)
31,580
21,031
(7,351)
23,696
19,310
(11,426)
103,549
72,086
45,260
31,580
Notes
15 Administrative and general expenses

Directors remuneration (note 18)
Directors sitting fees (note 18)
Communication
Fees and subscription
Insurance
Legal and professional fees
Office expenses
Printing and stationary
Vehicle expenses
Provision for impairment of trade receivables
Miscellaneous
2013
RO
382,172
41,570
158,000
29,850
20,901
1,783
5,836
32,452
14,208
10,420
20,033
4,358
26,309
747,892
2012
RO
316,873
37,177
36,500
13,350
19,225
4,212
2,623
39,239
11,397
9,187
21,182
23,785
23,255
2011
RO
245,140
32,924
8,700
21,531
2,338
3,414
17,324
9,741
4,905
14,230
12,643
11,247
2010
RO
167,805
28,045
9,500
15,696
2,655
1,523
49,496
11,394
3,338
9,558
6,475
11,024
558,005
384,137
316,509
173,357
3,014
236,826
71,045
160,946
15,438
145,223
1,831
199,714
63,140
145,975
9,220
123,562
74,759
40,461
88,741
1,741
61,756
865
51,473
19,505
62,701
1,980
660,626
565,103
329,264
198,280
(105)
23,475
18,619
11,673
18,067
35,445
11,801
9,623
1,300
31,275
(379)
67,204
964
5,486
100,168
55,945
97,117
54,476
127,078
16 Selling and distribution expenses

Freight charges
Travelling
Advertisement and sales promotion
Miscellaneous
17 Other income
Foreign exchange (loss) gain
Insurance claim
Gain (loss) on disposal of property, plant
and equipment
Miscellaneous
75
Notes
18 Related party transactions

Holders of 10% or more of the Companys shares are provided in note 9(a).
The Company has entered into transactions with Shareholders and entities in which certain
Shareholders or Directors of the Company have an interest. In the ordinary course of business,
the Company procures goods and services from related parties. These transactions are entered
at mutually agreed terms.

a) The related party transactions were as follows:
Revenue
Purchase of equipment
Other services insurance
65,390
1,764
58,765
8,061
88
37,798
820
10,639
24,752
139,737
7,350
147,087
137,250
2,738
139,988
b) The compensation paid to key management personnel comprises:
Short term employment benefits

251,759
8,807
260,566
245,646
7,525
253,171
During 2013, the key management personnel have subscribed and alloted 16,500 shares of face
value of RO 1 each at the approved price of RO 1.588 per share.

c) Directors remuneration
Directors sitting fees
158,000
29,850
187,850
36,500
13,350
49,850
8,700
8,700
9,500
9,500
Directors sitting fees and remuneration payable at the reporting dates are included in other
payables (note 12).
The Directors sitting fees for the year 2013 is subject to shareholders approval at the forthcoming
Annual General Meeting. The Directors remuneration for the year 2012 of RO 83,500 was approved
at the Annual General Meeting held on 13 March 2013 and the remaining amount of RO 74,500 for
the year 2013 is subject to approval at the forthcoming Annual General Meeting
During 2013, the Directors have subscribed and allotted 107,732 shares of face value of RO 1
each at the approved price of RO 1.588 per share.

76
d) The amounts due to related parties are interest free and repayable on demand.
Notes
19 Taxation
a) The Company was exempted from income tax for period of five years upto 31 May 2013. The
Company has applied for an extension of the exemption period for further five years pending
approval of the the Ministry of Commerce and Industry. But on a prudent basis, the Company
has provided for the taxation liability from the month of June 2013.
The Company is liable to income tax at the rate of 12% on taxable income in excess of
RO30,000 after the exemption period.

The income tax expense recognized in statement of profit or loss comprises the following:
2013
2012
RO
RO
Current tax
189,103
Deferred tax
28,101
224,217
217,204
Tax expense for the year
Reconciliation of tax computed on accounting profits with tax
expense:
2,731,462
Profit before tax
224,217
2,612,543
324,175
309,905
(106,971)
(279,884)
194,196
217,204
224,217
Income tax as per the rates mentioned above

Tax exempt revenue
Prior year deferred tax
Tax expense
b) The Companys tax assessment for years 2008 to 2012 are not yet finalised by the Secretariat
General for Taxation. Management considers that the amount of additional taxes, if any in
respect of open tax years would not be significant to the Companys financial position at 31
December 2013.
c) Deferred income taxes are calculated on all temporary differences using a principal tax rate
of 12% (2010 to 2012: 12%). Deferred tax liability in the statement of financial position is as
follows:
Recognized
in
statement
of
profit or
loss 2012
RO
Effect of depreciation
224,217
RO
Recognized in
statement
of
profit or
loss 2013
RO
224,217
28,101
2012
2013
RO
252,318
77
Notes
20 Net assets per share

Net assets value per share is calculated by dividing the net assets by number of shares at the
reporting date adjusted retrospectively from the earliest period presented, for the bonus shares
issued [note 23 (b)].
2013
2012
2011
2010
Net assets (RO)
6,811,416
6,108,959
3,895,633
2,388,284
Number of shares at the reporting date

(Nos) (restated)
5,000,000
4,850,000
4,850,000
4,350,000
1.362
1.260
0.803
0.549
Net assets per share (RO) restated
21 Basic earnings per share

Basic earnings per share is calculated by dividing the net income for the period attributable to
shareholders by the weighted average number of shares.
2013
RO
2012
RO
2011
RO
2010
RO
2,514,258
2,388,326
1,007,349
149,943
Weighted average number of shares (Nos)

4,912,500
(restated)
4,850,000
4,707,534
4,350,000
0.512
0.492
0.214
0.034
Net profit for the year (RO)
Basic earnings per share (RO) restated

Weighted average shares have been adjusted retrospectively for the earliest period presented, for
the bonus shares issued during the current period [note 23 (b)].
22 Contingencies and commitments
a) The Company has outstanding letters of credit and acceptances as at 31 December 2013
amounting to RO1,611,420 (2012: RO 976,459; 2011: RO 936,282; 2010: RO219,846) in the
ordinary course of business.
b) The Company has outstanding guarantees as at 31 December 2013 amounting to RO 5,000
(2012: RO 5,000; 2011: RO 7,500; 2010: RO 11,585).
78
Notes
c) The Company has capital commitments as at 31 December 2013 amounting to RO 250,000

(2012: RO250,000; 2011: RO 44,230; 2010: Nil)
d) The Company has entered into a long-term operating lease agreement with the Public
Establishment for Industrial Estates for a period of 25 years on the land over which buildings
are being constructed. Under the terms of the lease, the future rental payments are as follows:
e) Amounts committed:
Upto one year
Two to five years
Above five years
33,456
234,192
836,402
33,456
234,192
869,858
31,956
127,824
447,384
31,956
127,824
479,340
1,104,050
1,137,506
607,164
639,120
f) There is a legal case pending against the Company with a potential liability of RO 10,402.
However based on the legal opinion, the Board of Directors believe that no liabilities would
arise and the Management would be successful in resisting the claim.
23 Dividend paid
a) The cash dividend of RO 1,050,000 was approved by the shareholders at the Annual General
Meeting held on 13 March 2013 and paid during the period.
b) The Shareholders approved a bonus share issue of 14.286% amounting to 500,000 shares
of RO 1 each in the Annual General Meeting held on 13 March 2013, and a bonus share
issue of 21.25% amounting to 850,000 shares of RO 1 each in the Extra-ordinay General
Meeting (EGM) held on 30 December 2013. In addition, a cash dividend of RO 1,000,000 was
approved in the EGM and paid during the year.
c) The Shareholders approved a cash dividend of RO 500.000 at the Annual General Meeting
held on 25th February 2014 and paid during the period.
24 Financial instruments and risk management
Financial instruments carried on the statement of financial position comprise trade and other
receivables, cash and cash equivalents, bank borrowings, term loans, amount due to and due
from related parties and trade and other payables.
The Company has exposure to the following risks from its use of financial instruments:
79
Notes
24 Financial instruments and risk management (continued)

(i) Credit risk
(ii) Liquidity risk
(iii) Market risk

Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the receivables from
customers. 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. The
Company does not require collateral in respect of financial assets.
The maximum exposure to credit risk for trade receivables at the reporting date by geographic
region was:
Revenue
Sultanate of Oman and GCC Countries

Other countries
2013
RO
2012
RO
2011
RO
2010
RO
9,242,235
525,491
8,524,592
494,046
5,853,148
259,248
9,767,726
9,018,638
6,112,396
3,694,326
306,621
4,000,947
1,246,411
489,989
1,736,400
1,766,781
42,882
1,809,663
1,133,446
170,687
1,304,133
1,124,989
1,124,989
Trade receivables (net)

Sultanate of Oman and GCC Countries
Other countries
The aging of trade receivables of Company at the reporting date is disclosed in note 7(c) to the
historical financial statements.

Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
fall due that are settled by delivering cash or another financial asset. The Companys approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Companys reputation.
80
Notes

The contractual maturities of Companys undiscounted financial liabilities at reporting date is as
below:
31 December 2013
Carrying
amount
Contractual cash
flows
Upto 1
year
2 to 5
year
Over 5
years
RO
RO
RO
RO
RO
1,257,353 (1,313,058)
(824,387)
615,228
(620,611)
(620,611)
2,772,260 (2,772,260) (2,772,260)
4,644,831 (4,705,929) (4,217,258)
(488,671)
(488,671)
31 December 2012
Terms loans*
3,050,200 (3,268,835) (1,329,667) (1,903,191)
Bank borrowings
150,000
(150,000)
(150,000)
1,932,859 (1,932,859) (1,932,859)
3,209
(3,209)
(3,209)
-
(35,977)
-
5,136,268 (5,354,903) (3,415,735) (1,903,191)
(35,977)
Non-derivative financial
liabilities
Terms loans*
Bank borrowings
31 December 2011
Terms loans*
4,043,057 (4,441,426) (1,198,565)
Bank borrowings
1,127,626 (1,127,626) (1,127,626)
1,473,427 (1,473,427) (1,473,427)
92,794
(92,794)
(92,794)
-
3,064,289
-
178,572
-
6,736,904 (7,135,273) (3,892,412) (3,064,289)
(178,572)
31 December 2010
Term loans*
5,256,200 (5,975,752) (1,117,334) (4,369,748)
Bank borrowings
1,933,702 (1,933,702) (1,933,702)
724,263
( 724,263)
(724,263)
174,363
(174,363)
(174,363)
-
(488,670)
-
8,088,528 (8,808,080) (3,949,662) (4,369,748)
(488,670)
*includes Government grant
81
Notes

Liquidity risk (continued)
At 31 December 2013, the Companys current liabilities exceed the current assets by RO 467,294.
The Management expects to generate suffiecient funds through profits for the forseeable future to
meet the Companys liquidity requirements and its financial obligations as they fall due.

Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and equity prices will affect the Companys income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimizing the return on risk.

Currency risk
The Company is exposed to currency risk on sales, purchases, receivables and payables that are
denominated in a currency other than the functional currency of the Company. The Companys
major sales transactions are in GCC countries on which the Company is not exposed to the
currency risk as the Rial Omani (RO) and GCC currencies are effectively pegged to US dollar. The
Company is exposed to currency risk in Euro for its purchases and related trade payables but the
same is covered through forward exchange contracts.
At 31 December 2013, trade payables in the amount of RO 1,101,355 (2012: RO 1,003,368;
2011: RO 400,437; 2010: RO 233,435) were denominated in Euro. These are covered through the
forward exchange contracts.

Interest rate risk
The Company manages the interest rate risk by constantly monitoring the changes in interest
rates and ensuring that they are on fixed rate basis. The Company entered into interest rate swap
to hedge the variability in cash flows attributable to interest rate risk on its terms loan. At reporting
dates, the Company is not significantly exposed to the interest rate risk.

Fair value information
Based on the valuation methodology outlined below, the fair values of all financial instruments at
31 December 2013 are considered by the Management not to be materially different to their book
values.
A number of the Companys accounting policies and disclosures require the determination of fair
value, for both financial and non-financial assets and liabilities. Fair values have been determined
on the following basis:
82
Notes

Fair value information (continued)
(i) Property, plant and equipment
The market value of property is the estimated amount for which a property could be exchanged
on the date of valuation between a willing buyer and a willing seller in an arms length transaction
after proper marketing wherein the parties had each acted knowledgeably, prudently and without
compulsion. The market value of items of plant and equipment is based on the quoted market
prices for similar items.
(ii) Inventory
The fair value of inventory is determined based on its estimated selling price in the ordinary course
of the business less the estimated costs of completion and sale, and a reasonable profit margin
based on the effort required to complete and sell the inventory.
(iii) Trade and other receivables
The fair value of trade and other receivables is estimated at the present value of the future cash
flow, discounted at the market rate of interest on the reporting dates.
(iv) Interest rate swap and forward exchange contracts
The fair value of interest rate swaps is based on broker quotes. These quotes are tested for
reasonableness by discounting estimated future cash flows based on terms and maturity of each
contract and using market interest rates for a similar instrument at the measurement date. Fair
values reflect the credit risk of instrument and include adjustments to take account of the credit
risk of the Company and counter party when appropriate.
The fair value of forward exchange contracts and interest rate swaps is determined using level
1 and level 2, respectively of fair value hierarchy based on observable inputs both directly and
indirectly.
The Company measures fair values using the following fair value hierarchy that reflects the
significance of the inputs used in making the measurements:
Level 1: Quoted market price (unadjusted) in an active market for an identical instrument. Fair
values of financial assets and financial liabilities that are traded in active markets are based on
quoted market prices or dealer price quotations.
Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). This category includes instruments valued using: quoted market prices in
active markets for similar instruments; quoted prices for identical or similar instruments in markets
that are considered less than active; or other valuation techniques where all significant inputs are
directly or indirectly observable from market data.
83
Notes

Level 3: Valuation techniques using significant unobservable inputs. This category included all
instruments where the valuation technique includes inputs not based on observable data and
the unobservable inputs have a significant effect on the instruments valuation. This category
includes instrument that are valued based on quoted prices for similar instruments where
significant unobservable adjustments or assumptions are required to reflect differences between
the instruments.
Capital management
Managements policy is to maintain an optimum capital base to maintain investor, creditors and
market confidence to sustain future growth of business as well as return on capital. The Companys
capital requirements are determined by the Commercial Companies Law of 1974, as amended.
Schedule I (continued)
Property, plant, and equipment
Buildings
on
Furniture
leasehold Plant and
Heavy and office
land machinery equipment equipment
RO
RO
RO
RO
Cost
1 January 2010 2,681,069 5,551,468
Additions during
20,411
107,842
the year
Disposals
31December
2010
Depreciation
1 January 2010
Charge for the
year
Disposals
31 December
2010
Net book value
31 December
2010
84
2,701,480 5,659,310
Motor
vehicles
RO
Capital
work in
progress
RO
Total
RO
323,428
78,573
47,900
- 8,682,438
33,667
54,657
16,000
42,109
274,686
(16,075)
(16,075)
357,095
133,230
47,825
42,109 8,941,049
238,480
480,549
56,797
24,232
35,598
835,656
134,324
278,186
22,230
17,605
11,305
463,650
(14,561)
(14,561)
372,804
758,735
79,027
41,837
32,342
- 1,284,745
2,328,676 4,900,575
278,068
91,393
15,483
42,109 7,656,304
Notes
Property, plant,
and equipment
Buildings
Furniture
on Plant and
Heavy
and office
leasehold machinery equipment
equipment
land
RO
RO
RO
RO
Cost
1 January 2011 2,701,480 5,659,310
Motor
vehicles
Capital
work in
progress
Total
RO
RO
RO
357,095
133,230
47,825
42,109 8,941,049
Additions
during the year
10,101
212,978
12,731
28,517
3,706
268,033
Transfers
42,109
(42,109)
2,753,690 5,872,288
369,826
161,747
47,825
3,706 9,209,082
- 1,284,745
31December
2011
Depreciation
1 January 2011
372,804
758,735
79,027
41,837
32,342
Charge for the

year
135,812
285,790
24,118
28,774
4,150
31 December
2011
508,616 1,044,525
103,145
70,611
36,492
- 1,763,389
266,681
91,136
11,333
3,706 7,445,693
Net book value

31 December
2,245,074 4,827,763
2011
478,644
85
Notes
Property, plant
and equipment
Buildings
on
Furniture
leasehold Plant and
Heavy and office
RO
RO
RO
RO
Cost
1 January 2012 2,753,690 5,872,288
Additions
115,949
715,070
during the year
Transfers
2,256
Disposals
31December
2012
Depreciation
1 January 2012
Charge for the
year
Disposals
31 December
2012
Capital
work in
progress
RO
Total
RO
369,826
161,747
47,825
3,706
9,209,082
22,400
49,950
5,950
909,319
1,450
(610)
(3,706)
-
(610)
2,871,895 6,587,358
392,226
212,537
53,775
- 10,117,791
508,616 1,044,525
103,145
70,611
36,492
1,763,389
139,190
303,573
25,526
34,388
4,620
507,297
(231)
(231)
647,806 1,348,098
128,671
104,768
41,112
2,270,455
263,555
107,769
12,663
7,847,336
Net book value

31 December
2,224,089 5,239,260
2012
86
Motor
vehicles
RO
Notes
Property, plant,
and equipment
Cost
1 January
2013
Additions
during the
period
Disposals
Buildings
on
Furniture
leasehold Plant and
Heavy and office
RO
RO
RO
RO
2,871,895 6,587,358
Motor
vehicles
RO
392,226
212,537
53,775
Capital
work in
progress
RO
Total
RO
- 10,117,791
41,227
436,375
49,584
45,172
8,750
581,108
(7,200)
(7,200)
2,913,122 7,023,733
441,810
257,709
55,325
- 10,691,699
1 January
2013
647,806 1,348,098
128,671
104,768
41,112
2,270,455
Charge for the

period
144,355
338,031
27,409
37,640
6,946
554,381
(7,200)
(7,200)
792,161 1,686,129
156,080
142,408
40,858
2,817,636
2,120,961 5,337,604
285,730
115,301
14,467
7,874,063
31 December
2013
Depreciation
Disposals
31 December
2013
Net book value
31 December
2013

87
13. Projected Financial Statement 2014-2018

Financial projections
for the period 1 July 2014 to 31 December 2014 and
for the years ended 31 December 2015 to 2018
Registered office:
Principal place of business:
P.O. Box 482

Postal Code 322
Sohar, Sultanate of Oman
Sohar Industrial Estate

Sohar
Sultanate of Oman
88
Financial projections
for the period from 1 July 2014 to 31 December 2014 and for years ended 31 December 2015 to 2018
Independent practitioners assurance report

Projected statement of financial position
Projected statement of profit or loss and other comprehensive income
Projected statement of changes in equity
Projected statement of cash flows
Notes
89
90
Projected statements of financial position

as at 31 December
Note
Non-current assets
Investment property
Investments held to maturity
4.7
4.8
4.9

Current assets
Inventories
4.10
4.11

Total assets
Equity
Share capital
Share premium
Legal reserve
Retained earnings
2015
RO
2016
RO
2017
RO
2018
RO
8,611,424
225,000
-
8,320,832
225,000
-
7,964,503
225,000
500,000
7,592,437
225,000
1,500,000
7,204,633
225,000
2,500,000
8,836,424
8,545,832
8,689,503
9,317,437
9,929,633
1,776,435
2,612,073
200,000
2,003,649
2,895,237
200,000
2,079,376
3,002,219
200,000
2,171,837
3,124,923
200,000
2,247,460
3,240,275
200,000
4,588,508
5,098,886
5,281,595
5,496,760
5,687,735
13,424,932 13,644,718 13,971,098 14,814,197 15,617,368

4.12
4.13
4.14
Total equity
Term loan
2014
RO
4.5
4.5
5,000,000
88,199
837,955
2,704,925
5,000,000
88,199
1,085,112
3,179,334
5,000,000
88,199
1,341,217
3,734,280
5,000,000
88,199
1,613,748
4,437,057
5,000,000
88,199
1,666,667
5,451,970
8,631,079
9,352,645 10,163,696 11,139,004 12,206,836
265,219
56,210
264,318
167,181
146,772
31,800
279,360
217,181
21,924
13,791
277,611
267,181
268,580
317,181
253,208
367,181
752,928
675,113
580,507
585,761
620,389
142,857
1,571,742
2,326,326
142,857
1,173,216
2,300,887
142,857
642,162
2,441,876
35,715
480,345
2,573,372
103,796
2,686,347
4,040,925
3,616,960
3,226,895
3,089,432
2,790,143
Total liabilities
4,793,853
4,292,073
3,807,402
3,675,193
3,410,532

Current liabilities
Term loan
Bank borrowings
4.5
4.5
4.16

Net assets per share
13,424,932 13,644,718 13,971,098 14,814,197 15,617,368

4.18
0.173
0.187
0.203
0.223
0.244
The financial projections were approved and authorised for issue by the Board of Directors on -------and signed on their behalf by:

Chairman
Director
The notes form an integral part of these financial projections.
The independent practitioners report is set forth on page 1.
91
Projected statements of profit or loss and other comprehensive income
Revenue
Cost of sales
Note
for the
period for the year for the year for the year for the year
from 1 July
ended 31
ended 31
ended 31
ended 31
2014 to 31 December December December December
December
2015
2016
2017
2018
2014
RO
RO
RO
RO
RO
4.1
4.2
5,122,001 11,404,468 11,821,472 12,301,400 12,750,617

(2,940,850) (6,917,212) (7,214,103) (7,517,942) (7,842,678)
Gross profit
Administrative and
general expenses
Selling and distribution
expenses
Other income
Finance charges
2,181,151
4,487,256
4,607,369
4,783,458
4,907,939
4.3
(338,402)
(733,853)
(765,230)
(800,297)
(835,530)
4.4
(353,584)
(816,200)
(857,450)
(901,522)
(941,094)
3,000
10,000
10,000
40,000
70,000
1,492,165
(51,744)
2,947,203
(125,603)
2,994,689
(90,482)
3,121,639
(39,052)
3,201,315
(20,792)
1,440,421
2,821,600
2,904,207
3,082,587
3,180,523
(179,153)
(350,034)
(343,156)
(357,279)
(362,691)
1,261,268
2,471,566
2,561,051
2,725,308
2,817,832
0.050
0.049
0.051
0.055
0.056
4.5
Profit before tax

Income tax
4.6
Total comprehensive
income and net profit for
the period / year
Basic earnings per share
- anualized
4.17

92
Projected statements of changes in equity

Share
capital
RO
Share
premium
RO
Legal
reserve
RO
Retained
earnings
RO
Total
RO
5,000,000
88,199
605,988
1,675,624
7,369,811
231,967
(231,967)
Total comprehensive income for

the period
Net profit for the period
1,261,268
1,261,268
5,000,000
88,199
837,955
2,704,925
8,631,079
247,157
(247,157)
- (1,750,000) (1,750,000)
2,471,566
2,471,566
5,000,000
88,199
1,085,112
3,179,334
9,352,645
256,105
(256,105)
Transactions with shareholders

recorded directly in equity
Dividend for 2015
the year
- (1,750,000) (1,750,000)
5,000,000
88,199
1,341,217
272,531
- (1,750,000) (1,750,000)
5,000,000
88,199
1,613,748
1 July 2014
31 December 2014
recorded directlyin equity
Dividend for 2014
the year
31 December 2015
31 December 2016
Dividend for 2016
the year
31 December 2017
2,561,051
2,561,051
3,734,280 10,163,696
(272,531)
2,725,308
2,725,308
4,437,057 11,139,004
93
Projected statements of changes in equity (continued)
1 January 2018
Dividend for 2017
the year
31 December 2018
Share
capital
RO
5,000,000
Share
premium
RO
88,199
Legal
reserve
RO
1,613,748
52,919
- (1,750,000) (1,750,000)
5,000,000
88,199
1,666,667

94
Retained
earnings
Total
RO
RO
4,437,057 11,139,004
(52,919)
2,817,832
2,817,832
5,451,970 12,206,836

Projected statements of cash flows
for the year ended 31 December

for the
period
from 1 July for the year for the year for the year for the year
2014 to 31
ended 31
ended 31
ended 31
ended 31
December December December December December
2014
2015
2016
2017
2018
RO
RO
RO
RO
RO
Net profit for the period/year
1,440,421
2,821,600
2,904,207
3,082,587
3,180,523
Adjustments for :
Depreciation
317,398
640,592
656,329
672,066
687,804
Provision for debtors and
inventory
1,000
34,213
35,464
36,904
38,252
Finance charges
51,744
125,603
90,482
39,052
20,792
50,000
50,000
50,000
50,000
50,000
1,860,563
Increase/(Decrease) in inventories
2,081
Increase in trade and other
receivables
(471,902)
(Decrease) / Increase in trade and
other payables and amount due to
related parties
(1,161,665)
Income tax paid
Net cash generated from
operating activities
Cash flows from investing
activities
Purchase of property, plant and
equipment
Investments held to maturity
Net cash used in investing
activities
Cash flows from financing
activities
Dividend paid
Term loans obtained repaid
Bank borrowings availed (repaid)
Finance charges
Net cash generated from (used
in) financing activities
Net change in cash and cash
equivalents
Cash and cash equivalents at the
beginning of the period / year
Cash and cash equivalents at
the end of the period / year
3,672,008
(261,427)
3,736,482
(111,191)
3,880,609
(129,365)
3,977,371
(113,875)
(283,164)
(106,982)
(122,704)
(115,352)
(50,428)
131,076
110,091
101,222
(310,003)
(334,992)
(344,905)
(366,310)
229,077
2,766,986
3,314,393
3,393,726
3,483,056
(800,158)
-
(350,000)
-
(300,000)
(300,000)
(300,000)
(500,000) (1,000,000) (1,000,000)
(800,158)
(350,000)
(800,000) (1,300,000) (1,300,000)
- (1,750,000) (1,750,000) (1,750,000) (1,750,000)

(71,429)
(142,857)
(142,857)
(142,857)
(35,715)
821,324
(398,526)
(531,054)
(161,817)
(376,549)
(51,744)
(125,603)
(90,482)
(39,052)
(20,792)
698,151 (2,416,986) (2,514,393) (2,093,726) (2,183,056)
127,070
72,930
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000

95
Notes
(forming part of the financial projections)
Legal status and principal activities

Al Maha Ceramics Company SAOC (the Company) (under transformation to SAOG) is a closed
joint stock company registered on 15 November 2005 in the Sultanate of Oman. The principal
activity of the Company is manufacturing of ceramic tiles. The Company is in the process of
transformation to a Joint Stock Company under the Commercial Companies Law of Sultanate of
Oman.
Basis of preparation
These financial projections of the Company have been prepared by the Companys management
in accordance with the accounting policies and key assumptions set out in notes 3 and 4
respectively.
The profit projections are intended to show a possible outcome based on the stated assumptions.
Because of the length of the period covered by the profit projections, the assumptions are
necessarily more subjective than would be appropriate for the profit forecast. The profit projections
do not therefore constitute a forecast.
Since the projections relate to the future, actual results are likely to be different from the projected
results because events and circumstances do not occur as expected, and the differences may be
material.
a)
The financial projections have been presented in accordance with International Financial
Reporting Standards (IFRS) and the Commercial Companies Law of 1974, as amended..
b)
96
Basis of measurement
The finanical projections have been prepared on the historical cost basis except for derivative
financial instruments and investment property, which are stated at fair value, and investments
held to maturity, which is stated at amortized cost.
c)
Statement of compliance
Functional and presentation currency
These financial projections are presented in Rial Omani (RO), which is the Companys
functional currency.
d)
Use of estimates and judgments
The preparation of financial projections requires Management to make judgments, estimates

and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Notes
Basis of preparation (continued)

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised and in any future periods
affected. In particular, estimates that involve uncertainties and judgments which have a significant
effect on the summarized historical financial statements include provisions for impairment of
receivables and inventories.

The following accounting policies have been applied consistently to all periods presented in these
financial projections:
(a) Foreign currencies
Transactions in foreign currencies are translated to the Companys functional currency at

exchange rates on the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies at the reporting dates are retranslated to the functional currency at
the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortized cost in the functional currency at the beginning of the period,
adjusted for effective interest and payments during the period, and the amortized cost in
foreign currency translated at the exchange rate at the end of the period. Foreign currency
differences arising on retranslation are recognized in the profit or loss.
(b) Financial instruments
(j) Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables, cash and cash
equivalents, term loan, bank borrowings, trade and other payables and amounts due from
and due to related parties. Cash and cash equivalents comprise cash balances and call
deposits and term deposits with original maturity not greater than three months.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments
not at fair value through profit or loss, any directly attributable transaction costs.
Subsequent to initial recognition, non-derivative financial instruments are measured as

described below.
Held-to-maturity investments
If the Company has the positive intent and ability to hold debt securities to maturity, then they
are classified as held-to-maturity. Held-to-maturity investments are measured at amortised
cost using the effective interest method, less any impairment losses.
97
Notes
Significant accounting policies (continued)
Available-for-sale financial assets

The Companys investments in equity securities and certain debt securities are classified as
available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses, and foreign exchange gains and
losses on available-for-sale monetary items, are recognised in other comprehensive income.
When an investment is derecognised, the cumulative gain or loss in other comprehensive
income is transferred to profit or loss.
Financial assets at fair value through profit or loss

An instrument is classified at fair value through profit or loss if it is held for trading or is
designated as such upon initial recognition. Financial instruments are designated at fair value
through profit or loss if the Company manages such investments and makes purchase and
sale decisions based on their fair value in accordance with the Companys documented risk
management or investment strategy. Upon initial recognition attributable transaction costs
are recognised in profit or loss when incurred. Financial instruments at fair value through
profit or loss are measured at fair value, and changes therein are recognised in the profit or
loss.
Other

Other non-derivative financial instruments are measured at amortised cost using the effective
interest method, less any impairment losses.
Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of ordinary shares and share options are recognised as deduction from equity, net of any tax
effects.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised
in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at
fair value, and changes there on are recognised in profit or loss.
(c) Property, plant and equipment
98
(ii) Derivative financial instruments

The Company holds derivative financial instruments to hedge its interest and foreign
exchange risk exposures.
Items of property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses. Subsequent expenditure is capitalised only when it substantially increases
the future economic benefits embodied in the item of property, plant and equipment. All
other expenditure is recognised in the profit or loss as an expense when incurred. Gains
and losses on disposal are determined by the difference between the sale proceeds and the
carrying value.
Notes
Depreciation is charged on a straight-line basis over the estimated useful economic lives of
the following classes of assets as follows:
Years
Buildings
Plant and machinery
Heavy equipment
Furniture and office equipment
Motor vehicles
Depreciation methods, useful lives and residual values are reassessed at each reporting
date.
(d) Investment property
20
20
15
5
4
Property, which is held for capital appreciation is classified as investment property. The
investment property is fair valued every three years, as assessed by an independent
professional valuer. Changes in the fair value are recognised in profit or loss.
(e) Inventories
Inventories are stated at lower of cost and net realisable value. Net realisable value is the
price at which inventories can be sold in the normal course of business after allowing for the
costs of realisation. The cost of inventories is based on the weighted average cost principle
and includes expenditure in acquiring the inventories and bringing them to their existing
location and condition. Provision is made where necessary for obsolete, slow moving and
defective items.
(f) Impairment

(ii) Financial assets
All impairment losses are recognized in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring
after the impairment loss was recognized. For financial assets measured at amortized cost,
the reversal is recognized in profit or loss.
(iii) Non-financial assets
The carrying amounts of the Companys non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indications exist
then the assets recoverable amount is estimated. An impairment loss is recognized if the
carrying amount of an asset or cash generating unit is lower than its estimated recoverable
amount. Recoverable amount is the greater of its value in use and its fair value less costs
99
Notes
to sell. In assessing the value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset.
Impairment losses recognized in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in 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
amortization, if no impairment loss had been recognized.
(g) Employee benefits
Obligations for contributions to a defined contribution retirement plan, for Omani employees,
in accordance with the Oman Social Insurance Scheme, are recognized as an expense as
incurred.
The Companys obligation in respect of non-Omani terminal benefits, under defined

contribution retirement plan, is the amount of future benefit that such employees have earned
in return for their service in the current and prior periods. The obligation is calculated using
the projected unit credit method and is discounted to its present value. The discount rate
used reflects current market assessments of the time value of money.
(h) Provisions
A provision is recognised in the statement of financial position 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.
(i) Revenue
Revenue from the sale of goods is recognised when the significant risks and rewards
of ownership have been transferred to the buyer. Revenue is not recognised if there are
significant uncertainties regarding recovery of the consideration due, associated costs or the
possible return of goods.
(j) Leases
100
Payments made under operating leases are recognised in profit or loss on a straight line
basis over the term of the lease. Lease incentives received are recognised as an integral part
of the total lease expense, over the term of the lease.
Notes
(k)
Income tax
Income tax comprises current and deferred tax. Income tax expense is recognised in the
profit or loss except to the extent that it relates to items recognized directly in equity or in
other comprehensive income. Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is calculated in respect of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that are expected to be applied to
the temporary difference when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting 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 temporary differences can be utilized. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized.
Directors remuneration
(l)
(m) Finance cost and finance income
The total remuneration paid to the Directors is in accordance with the Articles of Association
of the Company.
Finance cost comprises interest payable on borrowings calculated using the effective interest
rate method. Interest costs attributable on the acquisition and construction of property, plant
and equipment are capitalised as part of the cost of those assets. Other interest costs are
expensed in the period as incurred. Interest income is recognised in the profit or loss as it
accrues taking into account the effective yield on the asset.
(n) Government grant
The loan from the Government of the Sultanate of Oman is carried on the statement of financial
position at its fair value being the fair value of consideration received. The fair value of the
consideration received is the sum of all future cash payments, discounted using market
borrowing rates of interest for loans having similar maturity to discount the future contractual
cash flows.
The difference between the fair value and the book value is treated as a government grant
and is deferred over the period of the loan.
(o) New standards and interpretations not yet effective
A number of new standards, amendments to standards and interpretations not yet effective
for the year ended 31 December 2014, have not been applied in preparing these financial
projections. None of these will have an effect on the financial projections of the Company,
with the exception of
101
Notes
3
IFRS 9 Financial Instruments, published on 12 November 2009 as part of phase I of the

IASBs comprehensive project to replace IAS 39, which deals with classification and
measurement of financial assets. The requirements of this standard represent a significant
change from the existing requirements in IAS 39 in respect of financial assets. The
Standard contains two primary measurement categories for financial assets: amortised
cost and fair value. The standard eliminates the existing IAS 39 categories of held to
maturity, available for sale and loans and receivables. The standard is effective for annual
periods beginning on or after 1 January 2018. Earlier application is permitted.
IFRS 15 Revenue from contracts with customers, published on 28 May 2014. The standard
supersedes IAS 18 Revenue, IAS 11 Construction Contracts and a number of revenue
related interpretations. The new standard provides a single, principles based five-step model
to be applied to all contracts with customers. The five steps are: identify the contract with
the customer, identify the performance obligations in the contract, determine the transaction
price, allocate the transaction price to the performance obligations in the contracts, and
recognising revenue when (or as) the entity satisfies a performance obligation. The standard
is effective for annual periods beginning on or after 1 January 2017. Earlier application is
permitted.
Management have assessed that these standards will not have a significant impact on the
financial projections of the Company.
Key assumptions
The illustrative financial projections of the Companys activities for the period / year 2014 to 2018
have been prepared by the Companys management in good faith and with due care and attention,
based on assumptions, which they consider appropriate. A careful effort has been made to
estimate the future plant capacity utilisation and the related income generated by the Company on
the basis of existing facilities to arrive at the illustrative statement of projected income. However,
there can be no certainty as to the extent to which the actual results will match the projections or
whether the assumptions will remain valid.
4.1 Revenue
The Companys revenue comprises the sale proceeds from ceramics tiles and decorations.
The details of the projected revenue are set out below:
for the period
from 1 July 2014
to 31 December
2014
for the year

ended 31
December
2015
for the year

ended 31
December
2016
3,000,000
6,350,000
6,400,000
6,425,000
6,450,000
Sales (sqm)
2,925,032
6,350,000
6,375,000
6,425,000
6,450,000
Sales (RO)
5,122,001
11,404,468
11,821,472
Production
(sqm)
for the year for the year

ended 31
ended 31
December December
2017
2018
12,301,400 12,750,617
The sales price is projected to increase at a rate of approximately 3% to 4% in line with expected
inflation.
102
Notes
4
Key assumptions (continued)
4.2 Cost of sales
The estimated cost of sales is:

for the period for the year for the year for the year for the year
from 1 July
ended 31
ended 31
ended 31
ended 31
December 2014
2015
2016
2017
2018
RO
RO
RO
RO
RO
Cost of raw materials
Depreciation
Employee cost
Other manufacturing
expenses
1,630,170
293,867
642,486
3,925,554
598,520
1,330,054
4,124,026
614,007
1,396,557
4,324,739
629,494
1,466,385
4,552,371
644,982
1,539,704
374,327
1,063,084
1,079,513
1,097,324
1,105,621
2,940,850
6,917,212
7,214,103
7,517,942
7,842,678
The Company has assumed an inflationary increase of 3% to 9% in the cost of raw material
and an increase of 5% in salaries and wages. Other manufacturing cost is assumed to
increase in line with increase in sales. Symthetic Natural Gas charges have been considered
from October 2014, over all above the allocated Natural gas quota at the prevailing price of
LPG at RO 133/MT.

4.3 Administrative and general expenses
Administrative and general expenses are projected in line with the projected business
plan of the Company. The Company has projected an annual increase of 3% to 5% for
all administrative general expenses other than depreciation and directors sitting fees and
remuneration.
from 1 July
ended 31 ended 31
ended 31
ended 31
December 2014
2015
2016
2017
2018
RO
RO
RO
RO
RO
Employee related cost
199,508
406,110
426,114
447,110
469,425
Insurance
3,010
6,190
6,377
6,568
6,766
Legal and professional
expense
17,695
35,100
36,504
37,964
39,482
Travelling expenses
8,455
21,866
22,959
24,107
25,312
Depreciation
23,531
42,072
42,322
42,572
42,822
Director sitting fees
34,455
96,600
100,900
107,500
113,100
and remuneration
Others
51,748
125,915
130,054
134,476
138,623
338,402
733,853
765,230
800,297
835,530
103
Notes
4.4 Selling and distribution expenses
Selling and distribution expenses are projected as follows:

for the period
for the
for the
for the
for the
from 1 July
year
year
year
year
2014 to 31 ended 31 ended 31 ended 31 ended 31
December December December December December
2014
2015
2016
2017
2018
RO
RO
RO
RO
RO
Employee related cost
Advertisement and sales
promotion
Freight
Others
103,175
223,998
235,197
246,957
259,305
90,000
200,000
210,000
220,000
225,000
111,408
49,001
284,817
107,385
299,498
112,755
316,172
118,393
332,477
124,312
353,584
816,200
857,450
901,522
941,094
Employee related cost is projected to increase by 5% each year. Advertisement and sales
promotion is projected at 2% to 3% of revenue. Freight charges per unit sold are projected
to increase by 3% to 5%.

4.5 Finance cost
a) The Company had obtained a Government soft loan of RO 1,000,000 at an interest

rate of 3% per annum. The loan is repayable in 28 quarterly installments of RO 35,714
commencing from May 2011. The loan is carried at fair value. The fair value is the sum
of all future cash payments, discounted using borrowing rates of interest applicable to
similar loans.
104
The difference between the carrying value and fair value of the Government soft loan
is treated as Deferred Government grant and is released to the statement of income
over the loan period as necessary to match with the related costs, which is intended to
compensate on systematic basis.
Notes

Repayment of loans is as follows:
Opening balance
Repayment
31 December
b)
4.6 Taxation
for the
ended 31
ended 31
ended 31
ended 31
from 1 July
December
2015
2016
2017
2018
2014
RO
RO
RO
RO
RO
535,715
464,286
321,429
178,572
35,715
(71,429)
(142,857)
(142,857)
(142,857)
(35,715)
464,286
321,429
178,572
35,715
-
Bank borrowings comprise bank overdraft, loan against trust receipts and bills discounting
facilities from local commercial banks and carries interest at rates ranging between 3.5% and
6.5% per annum. The interest rate is subject to re-negotiation with the bank upon renewal
of the facilities, which generally takes place on an annual basis. The bank borrowings are
secured by a second ranking and usufruct right mortgage over property, plant and equipment
of the Company and proportionate guarantees from certain shareholders.
The taxation charges comprise:
Current
Deferred
for the
from 1 July
ended 31
ended 31
ended 31
ended 31
December
2015
2016
2017
2018
2014
RO
RO
RO
RO
RO
171,051
334,992
344,905
366,310
378,063
8,102
15,042
(1,749)
(9,031)
(15,372)
179,153
350,034
343,156
357,279
362,691
The Company is liable to income tax at 12% of taxable income in excess of RO 30,000. For the
purpose of determining the tax expense for the respective years, the accounting profit has been
adjusted for tax purposes.
105
Notes
A reconciliation of income taxes calculated on accounting profits at the applicable tax rate with
the income tax for the projected period / years is set out below:
for the
ended 31
ended 31
ended 31
ended 31
from 1 July
2015
2016
2017
2018
December
2014
RO
RO
RO
RO
RO
Profit before taxation
1,440,421
2,821,600
2,904,207
171,051
334,992
344,905
3,082,587
366,310
8,102
179,153
15,042
350,034
(1,749)
343,156
(9,031)
357,279
Tax on accounting profit

Tax exempt revenue and
others
3,180,523
378,063
(15,372)
362,691
4.7 Property, plant and equipment
Additions to property, plant and equipment are forcasted as follows:
Additions
for the
from 1 July
ended 31
ended 31
ended 31
ended 31
December
2015
2016
2017
2018
2014
RO
RO
RO
RO
RO
800,158
350,000
300,000
300,000
300,000
4.8 Investment property
Investment property comprises of a portion of land which has been jointly registered, in the
name of certain Directors, beneficially for and on behalf of the Company.
The investment property stated at its fair value of RO 225,000 has been determined by
an independent professional valuer on 31 December 2013 and is not expected to change
significantly over the projection period.
4.9 Investments held to maturity
106
Management intends to invest surplus cash available during the years 2016, 2017 and 2018
in suitable investment opportunities.
Notes
4.10 Inventories
The inventories are based on inventory turnover days projected as follows:

RO
Finished goods
Raw and packing materials
and consumables
2014
367,758
2015
392,792
2016
392,792
2017
421,083
2018
421,083
1,408,677
1,610,857
1,686,584
1,750,754
1,826,377
1,776,435
2,003,649
2,079,376
2,171,837
2,247,460
32
20
20
20
20
140
140
146
145
143
Turnover days
Finished goods (calculated
on total cost of sales)
Raw and packing material
and consumables (calculated
on cost of raw material)

4.11 Trade and other receivables
The trade receivables are projected based on turnover days as per the past experience and
the market scenarios.
RO
Trade receivables
Prepayments
Debtor turnover days

2014
2,532,858
79,215
2,612,073
2015
2,812,061
83,176
2,895,237
2016
2,914,883
87,336
3,002,219
2017
3,033,222
91,701
3,124,923
2018
3,143,988
96,287
3,240,275
77
86
88
88
88
4.12 Share capital
Authorised share capital comprises 100,000,000 ordinary shares of RO 0.100 each. Issued
and fully paid share capital of the Company is RO 5,000,000 (50,000,000 ordinary shares of
RO 0.100 each). The existing shareholders of the Company are divesting a portion of their
shareholding from the Company in accordance with the regulatory requirements through an
Initial Public Offering (IPO) of 20,000,000 ordinary shares of RO 0.100 baisa per share. The
issued and fully paid up share capital of the Company is assumed to remain unchanged during
the projection period. The IPO proceeds and related share issue expenses will accrue to the
existing shareholders who are divesting their shares in the Company. Accordingly, the IPO will
be cash neutral to the Company.
107
Notes
4.13 Share premium
In 2013, the Company issued 1,350,000 bonus shares; further 150,000 shares have been
issued to Directors and certain employees at a premium of RO 88,199.
Being the closed joint stock company, the shares are not traded on the Muscat Securities
Market. The Company derived at fair value of RO 1.588 per share of face value RO 1,which
is equivalent to the net asset value as at 30 June 2013, by considering various factors which
may have the effect on the future profitability and expected dividend yield.
4.14 Legal reserve
4.15 Dividend
In accordance with the article 106 of commercial Companies Law of 1974, annual
appropriations of 10% of the net profit for the year are transferred to this reserve until such
time as the legal reserve amounts to at least one-third of the Companys share capital. The
legal reserve is not available for distribution.
The Company intends to distribute dividend of 35% on the paid up share capital which is
subject to regulatory requirements and shareholders approval at the forthcoming annual
general meetings.
4.16 Trade and other payables
The trade payable are projected with the historic experience based on the turnover days as
below. Other payables are projected to increase by tax expense over the projected period
due to increase in profits.
RO
Trade payables
Other payables
Creditor turnover days annualized
108
2014
1,110,688
1,215,638
2015
887,096
1,413,791
2016
982,706
1,459,170
2017
1,055,894
1,517,478
2018
1,118,862
1,567,485
2,326,326
2,300,887
2,441,876
2,573,372
2,686,347
62
37
33
34
35
Notes
4
4.17 Basic earnings per share
Basic earnings per share are calculated by dividing the profit attributable to shareholders by
the weighted average number of ordinary shares in issue during the period / year.
from 1 July 2014
ended 31
ended 31
ended 31
ended 31
to 31 December December December December December
2014
2015
2016
2017
2018
Profit for the year (RO)
1,261,268
Average shares
outstanding during the
period / year (Nos)
0.050
2,817,832
0.049
0.051
0.055
0.056
Net assets value per share is calculated by dividing the net assets by number of shares at the
reporting date.
8,631,079
Shares outstanding as
at year end (Nos)
9,352,645 10,163,696 11,139,004 12,206,836
50,000,000 50,000,000 50,000,000 50,000,000 50,000,000
Net assets per share (RO)
2,725,308
4.18 Net assets per share
Net assets (RO)
2,561,051
50,000,000 50,000,000 50,000,000 50,000,000 50,000,000
Basic earnings per

share-annualized (RO)

2,471,566
0.173
0.187
0.203
0.223
0.244
4.19 Commitments
The Company has entered into a long-term operating lease agreement with the Public
Establishment for Industrial Estates for a period of 25 years on the land over which buildings
are being constructed. Under the terms of the lease, the future rental payments are as follows:
from 1 July 2014
ended 31
ended 31
ended 31
ended 31
to 31 December December December December December
2014
2015
2016
2017
2018
RO
RO
RO
RO
RO
Amounts committed:
Upto one year
Two to five years
Above five years
31,956
228,419
763,344
66,912
228,419
696,432
66,912
228,419
629,520
66,912
228,419
562,608
66,912
228,419
495,696
1,023,719
991,763
924,851
857,939
791,027
109
14. Audited Financial Statement for the period

ended 30th June 2014 (First Half)

Audited financial statements
1st January 2014 to 30th June 2014
Registered office:
Principal place of business:
P.O. Box 482

Postal Code 322
Sohar, Sultanate of Oman
Sohar Industrial Estate

Sohar
Sultanate of Oman
110
111
AL MAHA CERAMICS COMPANY SAOC
Statement of financial position

as at
30 June 31 December
2014
2013
RO
RO
Non-current assets
Investment property
8,085,788
225,000
7,874,063
225,000
8,310,788
8,099,063
Current assets
Inventories
Amount due from related parties
1,779,515
2,180,827
2,220
72,930
1,763,422
1,856,080
11,110
82,439
4,035,492
3,713,051
12,346,280
11,812,114
Equity
Share capital
Share premium
Legal reserve
Retained earnings
5,000,000
88,199
605,988
1,675,624
5,000,000
88,199
605,988
1,117,229
Total equity
7,369,811
6,811,416
Term loan
Deferred government grant
322,212
70,645
256,216
117,181
360,481
104,005
252,318
103,549
766,254
820,353
Current liabilities
Term loan current portion
Bank borrowings
142,857
750,418
3,316,440
500
792,857
615,228
2,772,260
-
4,210,215
4,180,345
Total liabilities
4,976,469
5,000,698
12,346,280
11,812,114
0.147
0.136
Total assets

Net assets per share
These financial statements were approved and authorised for issue by the Board of Directors and
signed on their behalf by:

112
Chairman
Director
Statement of profit or loss and other comprehensive income

for the six months ended 30 June
2014
RO
June 2013
RO
5,660,787
(3,721,208)
4,801,304
(2,657,480)
Gross profit
Selling and distribution expenses
Other income
1,939,579
(342,168)
(374,685)
15,991
2,143,824
(390,439)
(351,940)
26,021

Finance charges
1,238,717
(37,472)
1,427,466
(87,767)
Profit before tax

Income tax
1,201,245
(142,850)
1,339,699
(46,199)
Total comprehensive income and net profit for the year
1,058,395
1,293,500
0.042
0.053
Revenue
Cost of sales
Basic earnings per share annualized
113
Statement of changes in equity

for the six months ended 30 June 2014
Share
capital
RO
Share
premium
RO
Legal
reserve
RO
Retained
earnings
RO
Total
RO
3,500,000
354,562
2,254,397
6,108,959
1,293,500
1,293,500
500,000
- (1,050,000) (1,050,000)
(500,000)
-
30 June 2013
4,000,000
354,562
1,997,897
6,352,459
1 January 2014
the period
5,000,000
88,199
605,988
1,117,229
6,811,416
1,058,395
1,058,395
Dividend paid
(500,000)
(500,000)
30 June 2014
5,000,000
88,199
605,988
1,675,624
7,369,811
1 January 2013
Total comprehensive income for the
period
Transactions with owners of the
company
Dividend paid for 2012
Bonus shares issued
Transactions with owners of the

company
Contributions and distributions
114
Statement of cash flows

for the six months ended 30 June

Profit before tax for the period
Adjustments for:
Depreciation
Gain on sale of property, plant and equipment
Provision for trade receivables and inventories
Income tax paid
Finance charges
2014
RO
2013
RO
1,201,245
1,339,699
293,908
271,622
(6,667)
19,121
(180,908)
37,472
22,585
(1,300)
5,358
87,767
17,393
1,386,756
1,720,539
Changes in:
(Increase)/decrease in Inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
End of the service benefits paid
(16,093)
(315,857)
567,515
(8,953)
(173,624)
121,844
128,885
(915)
Net cash generated from operating activities
1,613,368
1,796,729
Cash flows from investing activities:

Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
(506,966)
8,000
(304,435)
1,300
Net cash used in investing activities
(498,966)
(303,135)
Cash flows from financing activities

Dividend payout
Repayment of term loans
Bank borrowings availed
Finance charges
(500,000)
(721,629)
719,419
(37,472)
(1,050,000)
(571,429)
200,000
(87,767)
Net cash used in financing activities
(539,682)
(1,509,196)
Net change in cash and cash equivalents

Cash and cash equivalents at the beginning of the period
574,720
(532,789)
(15,602)
128,620
41,931
113,018
3,304
69,626
(30,999)
3,949
109,069
-
41,931
113,018
Cash and cash equivalents at the end of the period

Cash and cash equivalents at the end of the year comprise of:
Cash at bank
Cash at bank
Bank overdraft
115
15. Dividend Policy

15.1. Dividends

The Offer Shares will rank equally with all other Shares for right to any dividends that may be
declared and paid in respect of the financial year ending in December 2014 and any subsequent
Financial Years. Following the Offer, the Shareholders register maintained by the MCD will be
updated to enable new shareholders to receive future dividends declared.
In accordance with the CCL, 10% of the profits of every corporation incorporated in Oman must
be transferred to a legal reserve until the reserve amounts to at least one third of the corporations
share capital. The legal reserve shall not be distributed to shareholders by way of dividend.
15.2. Dividend Policy

The Company proposes to follow a reasonable dividend payout policy, subject to debt repayments,
working capital and operational expenditures requirements. The amount of annual dividends and
the determination of whether to pay dividends in any year may be affected by a number of other
factors including the Companys business prospects, financial performance, free cash availability,
facilities agreements covenants and the outlook for the sector.
Any decision to pay dividends to Shareholders and the amount of such dividends will be at the
discretion and upon the recommendation of the Companys Board, subject to the Articles of
Association, the proposed dividend payment being approved by the passing of the shareholders
resolution at an annual general meeting, applicable laws, as well as the provisions of the Facilities
Agreement entered into in respect of the loans (including any prepayment clauses).
To date, the Company has distributed dividends as detailed below:

Dividend relating Type of Dividend
to the year
ending 31st
December
116
Dividend Rate
(%)
Dividend
Amount per
share (RO)
Total Dividend
Amount (RO)
2011
Cash
5%
0.050
175,000
2012
Cash
30%
0.300
1,050,000
2012
Stock
14.28%
0.143
500,000
2013
Stock
21.25%
0.170
850,000
2013
Cash
30%
0.300
1,500,000
The Companys estimates of dividend (based on chapter 13 Projected Financial Statements 2014 - 2018) for the next five years are as follows (subject to shareholder approvals):
Dividend Rate (% of
Dividend relating to
share capital)
the year ending 31st
December (payable in
the next calendar year)
2014 #
2015
2016
2017
2018
35%
35%
35%
35%
35%
Expected Dividend
Amount per share
(Bzs)*
Total Dividend
Amount (RO)
35
35
35
35
35
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
* Based on nominal value of Bzs 100 per share

# Dividend is also subject to the disclosure as per Section 10.4.
The above are only estimates and the actual dividend may vary from the estimates.
117
16. Valuation and Price Justification

The equity valuation of the Company takes into account various factors that affect its business
and performance. It includes the valuation based on future projected cash flows of the Company
as well as comparison with other listed companies having similar business. The Offer is being
made at the Offer Price calculated applying a discount on the valuation of the Company.
The following qualitative and quantitative factors lay the foundation for the Offer pricing:
16.1. Qualitative Factors
- Brand Recognition
- Full operational plant with minimal operating risk
- Ample raw material supply
- State-of-the-art Technology
- Technical Collaborations
- Plant location and access
- Product Range
- A plant that is equipped with highly technical and operation facilities
16.2. Quantitative Factors
Capacity:
The Company is currently operating at high capacity utilization levels which it expects to maintain
over the projected period.
The Company has a track record of profitable operations and its performance over the past 4
years is as below:
Period ended (12 months)
RO millions
Total Revenues
Gross Profit
Profit before tax
Profit after tax
2010
2011
2012
4.00
1.06
0.15
0.15
6.11
2.03
1.01
1.01
9.02
3.87
2.61
2.39
2013
9.76
4.26
2.73
2.51
16.3. Valuation

The equity valuation for the Company is based on two broad valuation methodologies described
below and takes into consideration the projected cash flows of the Company as well as the
current market conditions.
- Discounted Cash Flow (DCF) Equity; and

- Relative valuation
118
16.3.1. Discounted Cash Flow
Discounted Cash Flow is the most theoretically sound method of financial Valuation. DCF
analysis represents the net present value (NPV) of projected cash flows available to all
providers of capital, net of the cash needed to be invested for generating the projected
growth. The concept of DCF valuation is based on the principle that the value of a business
or asset is inherently based on its ability to generate cash flows for the providers of capital.
Key Components of a DCF:
- Free cash flow (FCF) Cash generated by the assets of the business (tangible and
intangible) available for distribution to all providers of capital. FCF is often referred
to asunlevered free cash flow, as it represents cash flow available to all providers of
capital and is not affected by the capital structure of the business.
- Discount rate The rate used to discount projected FCF and terminal value to their
present values.
Terminal value Value at the end of the FCF projection period (horizon period).
The valuation estimate for the Company considering the projected period of 2014 to
2018, using the DCF method comes at a range of Bzs 582 per share to Bzs 465 per
share for discount rate range of 11% to 13%.
16.3.2. Relative Valuation
Under relative valuation approach, the valuation is benchmarked against other listed
comparable which represent similar risk return profile i.e. operations, cash flows,
capital structure, growth plans, etc. The relative valuation is generally based on current
financial results or projections for the next 1 to 2 years. The benchmarks which are
frequently used for relative valuation include price to earnings multiple, dividend yield
and price to book multiple. It captures the prevailing market sentiment and should
reflect investor perception of publicly available information. Its effectiveness depends
on the ability to identify an appropriate peer set and an active stock market that has
sufficient liquidity and trading conditions for the peer set.
The valuation of the Company has been benchmarked on the following parameters:
Price to Book Value (PB)
Price to earnings multiple (PE)

For comparable, the current trading multiples of following listed comparable have
been used:
Al Anwar Ceramics SAOG
Oman Ceramics SAOG
RAK Ceramics
Saudi Ceramics
119
Price to Earnings multiple
Company
Al Anwar Ceramics SAOG (RO)
Oman Ceramics SAOG (RO)
RAK Ceramics (AED)
Saudi Ceramics (SAR)
Al Maha Ceramics (RO)*
EPS for the

year 2014 (H1
annualised)
0.034
0.066
0.380
9.15
0.042
Market Price per share

(last traded price available
as on 30th June 2014)
0.578
0.450
3.300
142.15
0.397
At Offer Price and Projected EPS for 2014 full year *
Price to Book Value multiple

Company
Al Anwar Ceramics SAOG (RO)
Oman Ceramics SAOG (RO)
RAK Ceramics (AED)
Saudi Ceramics (SAR)
Al Maha Ceramics (RO)*
Book Value
per Share
30/06/2014
0.150
0.495
3.32
42.1
0.147
Market Price per share

(last traded price available
as on 30th June 2014)
0.578
0.450
3.300
142.15
0.397
PE
17.0
6.8
8.7
15.54
9.45
PB
3.85
0.91
1.00
3.38
2.7
At Offer Price *
Note: Annualised H1 2014 EPS and Book Value per share as on 30th June 2014 have been
used for the comparison as these are the latest available figures as per published financial
statements.
16.4. Dividend Yield

Dividend yield is the primary relative valuation benchmark for the Company in view of a stable
business model.
Projected Dividend per Share (RO.)

Dividend yield (%) * (Note)
To be Paid in the year

2015
2016
0.035
0.035
8.8%
8.8%
2017
0.035
8.8%
* based on an Offer price of Bzs 397 per Share.

Note: Dividend yields represent a simple yield without considering the impact of annualisation.

The Offer Price results in a favourable comparison based on DCF valuation and relative valuation.
120
16.5. Peer Group Analysis

16.5.1. Al Anwar Ceramic Tiles Co. SAOG
Al Anwar Ceramic Tiles Co. SAOG was established in 1999. During the year 2013
the plant produced 14.98 million sq.m of ceramic tiles signifying growth of 14.2% in
production volumes over the previous year.
During 2013 Al Anwar Ceramics have converted 4 of its production lines to digital
printing technology enabling the company to produce better designs and finishes. Al
Anwar Ceramics has plans install a sophisticated digital printing machine in its Third
Fired Products facilities by April 2014. With all these investments, Al Anwar Ceramics is
looking to upgrade its product portfolio in 2014, and enhance its sales realizations.
In 2013 the company registered gross revenue of RO 26.4 million and a pre-tax profit
of RO 8.95 million, signifying a revenue growth of 18% and a profit growth of 21% over
the previous year. After providing for a tax liability of RO 1.07 million for year 2013, the
company net profit after tax stands at RO 7.9 million.
Source: Al Anwar Ceramics Annual Report-2013
16.5.2. Oman Ceramics Company SAOG
The company established in 1999, is in the business of manufacturing and selling vitreous
china sanitary ware and other allied products. The Company has its manufacturing
plant at Sohar in the Sultanate of Oman and sells its products through distributors/
dealers appointed in various countries. The Company also has its own sales team in
Oman, UAE and Bahrain who work in the GCC markets.
In 2013 the company registered gross revenue of RO 3.8 million and a net profit of RO
9,946 signifying a revenue decline of 7.8% and a net profit decline of 93% over the year
2012.
Source: Oman Ceramics Annual Report-2013
(It must be noted that Oman Ceramics Company SAOG operates in a different market
segment compared to the Company; while it manufactures ceramic tiles, Oman
Ceramics manufactures sanitary ware and allied products and therefore the companies
are not strictly comparable.)
121
17. Related Party Transactions and Material

Contracts
17.1. Related party transactions

During the years 2012 and 2013 the Company has entered into transactions with Shareholders
and entities in which certain Shareholders or Directors of the Company have an interest. In the
ordinary course of business, the Company procures goods and services from related parties.
These transactions are entered into on mutually agreed terms.
i.
The related party transactions were as follows:
Revenue
Purchase of equipment
Other services insurance
ii.
31 December
2013
RO.
65,390
31 December
2012
RO.
1,764
58,765
The compensation paid to key management personnel comprises:

31st
December
2013
RO
31st
December
2012
RO
Short term employment benefits

251,759
8,807
260,566
245,646
7,525
253,171
Directors sitting fees

Directors remuneration
29,850
158,000
187,850
13,350
36,500
49,850
The Directors remuneration of RO 83,500 was approved at the Annual General Meeting
held on 13 March 2013 and the remaining of RO 74,500 was approved in Annual General
Meeting on 25th February 2014.
iii. At an extraordinary general meeting of the Shareholders on 4 August 2013, the Company
agreed to a private placement of shares to each of its Directors in an aggregate amount
of 116,019 ordinary shares of nominal value RO 1 each at a price of RO 1.588 per share.
The Company followed the procedures set out in the CCL and the Code of Corporate
Governance for SAOCs (which must be followed for related party transactions) and the
Shareholders approved the private placement at the EGM on 4 August 2013.
iv. The amounts due to related parties are interest free and are repayable on demand.
122
v. The Company will continue to do business with related parties in the normal course of
business at arms length. These transaction will be duly approved at the AGM.
17.2. Material Contracts

i. Land leasing Contract
This agreement was entered into by the Company with the Public Establishment for
Industrial Estates for leasing land in Sohar to set up the industrial project for a period of 25
years, with the option to extend for a further period of 25 years. The company is obliged
to pay rental of RO 31,956 for the year 2014, RO 47,934 for the year 2015 and RO 66,912
p.a. for the remainder of the term.

ii. Gas Supply Contract
This agreement was entered into by the Company with Public Establishment for Industrial
Estates for supply of natural gas in the companys project for a period of 25 years, with
the option to extend for a further period of 25 years. The company has to pay an agreed
amount for each cubic meters gas received during the month. Please see further details in
relation to this contract at paragraph 10.4 of this Prospectus.

iii. Loan Arrangements
Details of the Companys loan arrangements are given in section 11.

iv. SNG Plant contract
The Company has contracted with Innovative Energy Systems LLC for the supply and
installation of a synthetic natural gas plant in order to supplement its supplies of natural
gas. The capital cost of the plant is approximately RO 350,000 and it is expected to be
commissioned by October 2014.
123
18. Corporate Governance

Certain sections of this chapter summarize the issues relating to corporate governance based
on the Articles, the CCL and the rules and regulations issued by the CMA, in particular, the
Code. The description provided in this chapter is only a summary and does not purport to give a
complete overview of the Articles or of the relevant provisions of the CCL, the Code or the CMA
rules and regulations.
18.1. Management Overview

The respective roles and responsibilities of the management bodies of the Company are in large
part governed by the provisions of CCL, the Articles and, after listing on the MSM, by the Code
and circulars issued by the CMA in respect thereof.
The management of strategic issues of the Company is entrusted to its Board of Directors.
The Board may perform all acts necessary or useful for achieving the corporate purposes of the
Company, with the exception of those acts that are by law or the Articles explicitly reserved for
the shareholders general meeting. The day-to-day management of the Company is performed
by its management team.
18.2. Board

The current Board of Directors of the Company is set out in the table below and was elected on
28th March 2012 and its members term of office shall expire in three years pursuant to Article
95 of the CCL.
Name
Capacity
Category
Brig. Masoud Humaid

Non
Independent
Malik Al Harthy
Executive
Shareholder
Representation
Yes
Himself
Directorship in other joint stock

companies as of [31 March 2014]
Chairman Al Anwar Holdings SAOG
Chairman Falcon Insurance SAOC.
Director, Al Anwar Holdings SAOG
Abdulredha Mustafa
Sultan
Non
Independent
Executive
Yes
Himself
Shabir Moosa
Abdullah Al Yousef
Non
Independent
Executive
Yes
Himself
Qaboos Abdullah Al
Khonji
Non
Independent
Executive
Yes
Himself
Mahmood Nasser
Al-Riyami
Non
Independent
Executive
Yes
Ministry of
Defence
Pension Fund
Hamed Rashid Al
Dhaheri
Non
Independent
Executive
Non
NonExecutive Independent
Yes
Himself
Yes
Al Anwar
Holdings SAOG
Sanjay Kumar Tiwari
Vice Chairman, Al Jazeera Services

Co. SAOG.
Director, Voltamp Energy SAOG
Director, Muttrah Real-Estate
Development Co. SAOC.
Director, Al Anwar Holdings SAOG.
Director, Al Anwar Holdings SAOG
Director, Oman Hotel & Tourism Co.
SAOG
* The above classification as Non-independent/ Independent director is as per the definition that
existed prior to the CMA amendment on 24th October 2012.
124
A brief on the Board of Directors of the Company is set out below:

Brig. Masoud Humaid Malik Al Harthy - Chairman
Brig. Masoud Al Harthy holds a Diploma in Management and has an experience of 35 years in the
military service in addition to over two decades as a businessman. Brig. Masoud is the Chairman
of the Board of Al Anwar Holdings and a board member in several other leading companies in
Oman.

Mr. Abdulredha Mustafa Sultan - Chairman of Audit Committee
Mr. Abdulredha Mustafa Sultan is a board member in several companies in Oman and abroad
and Managing Director in Mustafa Sultan Enterprises LLC. He has over 21 years of experience in
various senior management positions in Oman & abroad. He is a member of the Young Presidents
Organization.
Mr. Abdulredha holds a Bachelors degree in Finance & Business Administration from San Diego
State University, California, USA.

Mr. Shabir Moosa Abdullah Al Yousef - Chairman of Executive Committee
Mr. Shabir Al Yousef served as the Chief Executive Officer at Oman Investment & Finance
Company SAOG. He has more than 15 years of experience in senior management positions in
various companies. He served as the Chairman of National Aluminum Products Company SAOG
until March 2008 and is currently a Director in several other companies in Oman.
Mr. Shabir Al Yousef holds an MBA from University of Lincolnshire & Humberside (U.K.), Masters
Degree in Science from Colorado School of Mines (U.S.A) and Bachelors degree in Electronics
& Communication from Sultan Qaboos University. He has more than 4 years experience as Oil
Engineer in PDO.

Mr. Qaboos Abdullah Al Khonji - Director
Mr Qaboos Al Khonji is the Deputy Chairman of Al Khonji Holding L.L.C and Managing Director
of Al Bina Constructions and Al Khonji Real Estate (Better Homes) and also a board member in
several leading companies in Oman. He has an extensive experience in the Construction and Retail
Business. Mr Qaboos belongs to a traditional business dominated family and holds a Bachelors
degree in Business Administration from U.S. He has previously held positions of General Manager
in Moosa Abdul Rahman Hassan & Co., Deputy Chairman of Oman Investment & Finance Co.
SAOG (OIFC) and Director of Tageer Finance Co. SAOG.

Mr. Mahmood Nasser Al-Riyami - Director
Mr. Mahmood Nasser Al-Riyami is the Director of Purchasing in the Ministry of Defence, Oman.
He has been involved in various projects in business improvement and IT application. During
his career of 25 years, Mr. Mahmood has been exposed to business intelligence and knowledge
management for strategic business decisions. MrMahmood graduated in 1990 with a degree in
Economics and completed M.Sc. in E-Commerce from Leeds Metropolitan University, U.K. in
2012.
125
Mr. Hamad Rashid Al Dhaheri - Director
Mr. Hamad Al Dhaheri is the Managing Director of Ali & Sons Industry Co. in Abu Dhabi. He has
over 20 years experience in business and is a board member of several companies in UAE. Mr
Hamad Al Dhaheri holds a PhD in Management from Lorenz University (U.S.A.) and a Masters
degree from Southeastern University, U.S.A.

Mr. Sanjay Kumar Tiwari Director
Mr.Tiwari is a Chartered Accountant with accreditations from the Institute of Chartered Accountants
of India and a graduate in Commerce. He has 25 years of experience in industries ranging
from Textile, Cement, Tyre and Engineering to FMCG in Asia and Middle East. He has in depth
knowledge of the Middle East, South East and South Asian markets. His core expertise has been
to monitor and manage operations of varied industries from financial and commercial viewpoints.
He has worked in some of the leading companies in India, UAE and Oman.
18.3. Post-IPO Board Composition

As per the proposed Articles approved at the EGM held on 25th February 2014 the Company
shall be managed by a Board comprising 7 members, appointed from amongst the Shareholders
or non-Shareholders, provided that the Shareholder candidate owns at least 50,000 shares,
elected at the ordinary General Meeting in accordance with the provisions of the CCL and the
Articles. Post-IPO, It is intended that the current members of the Board will continue and the
entire Board of Directors will be due for re-election in March 2015.
The Company intends to have a Board that complies with applicable CMA and CCL requirements
from the date of re-election, including with respect to the number of Independent Directors and
Non-Executive Directors, and that represents the interests of all Shareholders, including those
who purchase Shares.
18.4. Appointment of Board

The term of office of a member of the Board shall be for a period of 3 years, subject to his reelection more than once. The period stipulated for election to the Board shall be calculated
from the date of the AGM at which the Director is elected to the date of the third AGM following
it. Where the date of such meeting exceeds the term of three years, the membership shall be
extended by Law to the date on which the meeting was convened, it shall not exceed the period
stipulated in the CCL for convening an AGM.
Subject to Article 95 of the CCL, and without prejudice to the Articles, nominees to the
membership of the Board must:
a.
b.
c.
d.
e.
f.
g.
126
Possess good conduct and reputation;

Be at least 25 years old;
Not have been declared insolvent or bankrupt unless his insolvency or bankruptcy has come
to an end in accordance with the law;
Not have been convicted of an offence of dishonour unless he has been rehabilitated;
Not be unable to discharge his debts to the Company;
Not be a member or a representative of a juristic person in more than four public joint stock
companies whose head offices are in Oman once appointed to the board in question.
In case he is representing a juristic person, be authorised by such juristic person to stand for
election.
h.
i.
Not be a member of the board of directors of a public or closed joint stock company the
objects of which are similar to those of the Company, with its principal office based in Oman.
Present a declaration which contains a statement of the number of shares he has if he is a
Shareholder and that he will not dispose of them to the extent that he shall be deprived of
his status as a Shareholder throughout the term of his office.
If a member of the Board ceases to satisfy any of the conditions necessary for the
membership, he shall be required to notify the Board of it. Accordingly, his position shall be
treated as vacant effective from the date of such notice. Otherwise, his membership shall
become cease from the date the Company comes to know of it, without prejudice to his
liability as per the provisions of the law. Consequently, his office shall be filled in accordance
with the Articles and the CCL.
The Directors shall be elected by direct secret ballot by the Shareholders of the Company.
Each Shareholder shall have a number of votes equal to that of the shares held by him. A
Shareholder shall have the right to use the entirety of his votes in support of one nominee
or divide his shares among other nominees of his choice through the voting card. It follows
from that the total number of votes given to the nominees by one Shareholder must not
exceed the total number of shares owned by him.
The restrictions stipulated by the CCL and the Code shall be observed upon the election of
the Board:
a. The majority of the members of the Board must be Non-Executive Directors and
must not be working for the Company in consideration of a fixed monthly or annual
remuneration.
b. A minimum of one third of the Directors (subject to a minimum of two) must be
Independent Directors.
c. A juristic person shall not be represented on the Board by more than one Director.
d. The role of Chief Executive Officer and Chairman shall not be held by the same person
18.5. Powers of Board

The Board shall have extensive authority to perform all acts for the management of the Company
to achieve its objects and to execute the resolutions adopted at the General Meeting. This
authority shall not be limited or restricted except to the extent provided for in the law or the
Articles and AGM resolutions.
The Board shall be, inter alia, responsible for the following:
a. Approve the commercial and financial policies and estimated budget of the Company, so as
to achieve its objects and preserve and enhance the rights of its shareholders;
b. Prepare, review and update from time to time the plans necessary to accomplish the
Companys aims and perform its activities, in light of its objects;
c. Adopt the Companys disclosure policies and monitor their application in accordance with
the rules and conditions for disclosure issued by the CMA;
d. Supervise the performance of the executive management and ensure that work is properly
attended to, so as to achieve the Companys aims and perform its activities, in light of its
objects;
e. Provide information to shareholders accurately and at the times required by the rules of the
CMA;
127
f.
Appoint the chief executive officer or the general manager provided that neither of them
shall be the chairman of the board of directors and appoint the employees who report to
each of them pursuant to the organizational structure of the Company and determine their
authorities and rights;
g. Assess the performance of the employees mentioned in the previous paragraph and assess
the work carried out by committees formed by the board pursuant to article 102 of the CCL;
h. Approve the financial statements related to the activities of the Company and the results of
its activities that are submitted by the executive management every three months, so as to
disclose its true financial position;
i. Include, in the annual report submitted to the general meeting, a reasoned affirmation of the
Companys ability to continue to carry on its activities and achieve its aims;
j. Appoint a secretary for the board in the first meeting held by it and hold at least four
meetings per year provided that the period between any two consecutive meetings shall be
a maximum of four months;
k. Appoint the managing director(s) if there is such a post provided that the persons who are
appointed shall be appointed on a full time basis; and
l. Include in the financial statements full details of the amounts received by any director of
the board during the year including the amounts paid to the directors in their capacity as
employees of the Company.
In accordance with the Articles, a Board meeting shall be deemed valid if a simple majority of its
members are present or represented by proxy. Within the scope of authority detailed above, and
in accordance with the Articles, the Board shall decide on all matters and the Board shall adopt its
resolutions by a simple majority of the members present or represented by proxy at the meeting.
The Board shall not perform the following acts unless authorized to do so by a resolution of a
General Meeting:
a. To make donations those required by the business wherever they are small and customary
amounts;
b. To sell all or a substantial part of the assets of the Company;
c. To mortgage or pledge the assets of the Company except to secure its debts incurred in the
normal course of its business; or
d. To guarantee debts of third parties with the exception of the guarantees made in the normal
course of business for the purpose of achieving the objects of the Company.
Subject to the provisions of the CCL, the members of the Board shall be liable to the Company,
the Shareholders and third parties for damages arising from their acts in violation of the law or
their acts beyond the scope of their authority or for any fraud or negligence in the performance
of their duties or for their failure to act as prudent men in the specific circumstances. In such
cases, the Company has the right to litigate against any member of its Board for the damages
sustained by the Company. The decision to appoint a person to pursue the case on behalf of the
Company shall be made by resolution of the Board of Directors or the Ordinary General Meeting
and authorise him to meet the cost of the proceedings out of the funds of the Company.
Any Shareholder may propose a resolution to start proceedings against the Directors and if his
proposal is not adopted by the Ordinary General Meeting, may himself pursue the case on behalf
of the Company. If the case is successful, such Shareholder shall receive a reimbursement of the
costs and expenditure incurred by him in the proceedings, out of the proceeds of the judgment
and the balance of such proceeds shall be paid to the Company.
128
The Company shall be bound by all acts performed by its Board of Directors, its Chairman and
the Deputy Chairman when acting within the scope of their authority. Any third party acting
in good faith shall be entitled to assume that any act performed by the Board of Directors,
Chairman and the Deputy Chairman of the Company in pursuance of its business was within the
scope of such persons authority and the Company shall be bound thereby unless the limitation
of such persons authority was registered in the Commercial Register.
A member of the Board or any other party related to the Company shall not have any direct or
indirect interest in the transactions or contracts made for the account of the Company, except
those concluded in accordance with the regulations issued by the CMA.
A member of the Board of Directors may not participate in the management of a business
competitive with that of the Company, except with the prior consent of the Ordinary General
Meeting, which consent shall be renewed annually. Also, a member of the Board or any of
the key employees of the Company may not make use of any information available to them by
virtue of their position for their own interest or for the interest of their dependents or immediate
relatives up to the fourth degree as a result of dealing in the Companys securities. Further, they
may not have any interest directly or indirectly in any entity involved in activities which may
affect the price of securities issued by the Company. Should they be in breach of the above then
Articles 109 and 110 of the CCL shall be applied.
18.6. Remuneration of the Board
The annual remuneration and sitting fees for members of the Board and any sub-committees of
the Board shall be determined in accordance with the applicable laws in Oman.

Details of sitting fees and remuneration for the years 2011, 2012 and 2013 of the Board of
Directors is given below:
Name of the Director
Sitting Fee (RO)
Remuneration (RO)
Total (RO)
2011
2012
2013
2011@
2012 *
2013 *
2011
2012
2013
Brig. Masoud Humaid Malik Al

Harthy
1,600
1,600
4,000
6,000
13,500
12,300
7,600
15,100
16,300
Abdulredha Mustafa Sultan
2,350
2,550
4,100
5,500
12,500
11,200
7,850
15,050
15,300
Shabir Moosa Abdullah Al

Yousef
1,300
2,450
5,200
5,000
11,500
10,200
6,300
13,950
15,400
Qaboos Abdullah Al Khonji
1,150
1,700
4,900
5,000
11,500
10,200
6,150
13,200
15,100
1,500
4,300
11,500
10,200
13,000
14,500
600
1,950
5,000
11,500
10,200
5,000
12,100
12,150
1900
5400
11,500
10,200
13,400
15,600
300
500
5000
5,300
500
Noah Mohammed Al Zadjali
2,000
550
5000
7,000
550
Total
8,700
13,350
29,850
36,500
74,500
45,200
Mahmood Nasser Al-Riyami

Hamed Rashid Al Dhaheri
Sanjay Kumar Tiwari

Reji Joseph
83,500
96,850 104,350
@ Accounted in the year 2012

* Accounted in the year 2013
129
18.7. Board Committees

The Company has an Audit Committee and an Executive Committee.
The Audit Committee assists the Board in overseeing the integrity of the Companys policies and
financial statements, including validating and recommending them for approval to the Board. It
also oversees the performance of the Companys internal audit function. The current members
of the Audit Committee of the Company are:
1. Mr. Abdulredha Mustafa Sultan, Chairman of Audit Committee
2. Mr. Mahmood Nasser Al-Riyami, Member of Audit Committee
3. Mr. Sanjay Kumar Tiwari, Member of Audit Committee
The Executive Committee assists the Board in reviewing various operational issues and make
recommendations to the Board for further approval. The current members are:
1. Mr. Shabir Moosa Abdullah Al Yousef (Chairman of EC)
2. Mr. Qaboos Abdullah Al Khonji
3. Mr. Sanjay Kumar Tiwari (Member EC)
Brief role the committee:
The Board constituted an Executive Committee to take decisions that are beyond the authority
of the executive management. The Executive Committee will comprise of 3 members of the
Board. A minimum of two members constitutes a quorum for the Executive Committee meeting.
The Chairman of the Executive Committee may designate any other Director member of the
EC to act as Chairman in his absence. Any matters not unanimously agreed to at the Executive
Committee should be referred to the Board of Directors for a decision. The matters which were
agreed in the EC meeting will be ratified by the Board.
(Member EC)
18.8. Internal Regulations

In accordance with the provisions set out in Article 68 of the CCL, the Company is required to
lay down Internal Regulations for regulating the management of the Company, its business and
personnel affairs through its Board of Directors, within one year from the date of transformation
of the Company with the Commercial Registrar. The Company has already put in place some of
the policies and regulations prescribed by the CMA and shall appropriately review the same in
the light of its transformation into a SAOG Company and also formulate such additional policies
and procedures that may be required in this context within the stipulated time period. These
regulations shall cover at least the following apart from the rules laid down by the CMA:
a. Organizational structure of the Company stating therein the responsibilities related to the
various posts of the Company and the reporting structure/ procedures.
b. Specifying the extent of the authority vested with each post with regard to approval of the
financial expenditure.
c. Fixing the allowance for the meetings, remuneration and other privileges as prescribed in
respect of the members of the Board of Directors and Committees constituted under its
auspices and the basis for their calculation.
d. The policies related to the purchases and service contracts.
e. The minimum level of information required to be submitted to the Board of Directors.
130
f. The authorities, duties and responsibilities relevant to the executive management and
subcommittees.
g. The policies related to Human Resources including the salaries, appointment, development,
training, promotions and termination of the services etc., covering other relevant aspects.
h. Investment policies of the Company.
i.
Policies for related parties transactions.
j.
Policies and measures for submission of material information in a transparent manner, to the
CMA and the MSM within the specified time including a definition of material information.
k. Any other regulations that the Board of Directors of the Company may deem necessary to
add for achieving adequate level of corporate governance.
18.9. Other Details

Names of the Directors who are shareholders in companies
carrying out the same business as the Company
None
Disclosure of the direct or indirect interests of the Directors

and top management in the Company
Directors and top

management are
shareholders of the Company
Disclosure of the names of Directors and officers who are/

were members of in the boards or top management of other
public joint stock companies indicating the companies that
None
had been liquidated or distressed within the last five years and
the reasons for that.
18.10. Senior Management of the Company
#
Name
Designation
Arvind Bindra
CEO
Indian
MBA, BE Mechanical
Service
in the
Company
4.5
Ganapathi
Subramanian
Finance Manager
Indian
Masters in Commerce
31.5
P. Mani
Production Manager
Indian
Diploma in Ceramic
Engineering
7.5
33.5
Rajesh Singh
Maintenance
Manager
Indian
Diploma in Electrical
Engineering
3.5
26.5
C. Vijay B. Reddy QC Manager
Indian
Diploma in Ceramic
Technology
3.5
22.5
Imran Siddiqui
Sales Head (Export)
Indian
Master in Business
Administration
18.5
Mr Himanshu
Bhatia
Sales Manager
(Oman)
Indian
Bachelor of Science;
Diploma in Computer
& Information
Management
0.3
16
Salim Said
HR & Administration
Khalfan Al Dhahli Executive
Omani
Bachelor of
Science (Operation
Management)
1.5
3.5
Nationality
Academic
Qualification
Total Years
Experience
18.5
131
Arvind Bindra, CEO
Mr Arvind Bindra joined the Company in 2010. He has over 18 years of general management
experience in South Asia and Middle East. Prior to joining the Company, he worked in several
senior positions with the leading Indian multinational coating company Asian Paints Ltd for over
12 years. During his assignment as the CEO of Berger Paints Emirates Ltd & Director of Asian
Paints Lanka Ltd, he managed to turn around and grow the revenues and profitability of these
companies successfully. Mr Bindra holds an MBA from London Business School and Bachelor
of Mechanical Engineering from Delhi College of Engineering.
Ganapathi Subramanian, Finance Manager
Mr Ganapathi Subramanian has 31 years experience in the area of accounts, finance, purchase,
audit, IT and logistics at several companies operating in the hospitality, manufacturing and
trading sectors. Prior to joining the Company, he was heading the finance function at NAPCO,
Oman.
Mr. Ganapathi holds a Masters degree in Commerce from India.
P. Mani, Production Manager
Mr Mani has more than 33 years experience in the ceramics industry in the Middle East and
India. Prior to joining the Company in 2007, he was heading the research and development and
quality control functions at Emirates Ceramics Factory, Fujairah and worked there for 20 years.
Mr. Mani holds a Diploma in Ceramics Engineering from Institute of Ceramic Technology in Tamil
Nadu, India.
Rajesh Singh, Maintenance Manager
Mr. Rajesh has more than 26 years experience in the ceramic industry in the Middle East, Kenya
and India. Prior to joining the Company in April 2011, he was the head Maintenance Manager at
Al Anwar Ceramics for over 13 years.
Mr. Rajesh holds a diploma in Electrical Engineering from Govt. Polytechnic in Uttar Pradesh,
India.
C. Vijay B. Reddy, Quality Control Manager
Mr. Vijay Reddy has more than 22 years experience in the Ceramic Industry in Oman and India.
Before joining the Company he looked after quality control and production at Al Anwar Ceramics
Oman for 5 years, and around 12 years at H&R Johnsons India at various levels.
Mr. Reddy holds a Diploma in Ceramic Technology from Government Polytechnic College in
Andra pradesh, India.
Imran Siddiqui, Sales Head Exports
Mr. Imran Siddiqui has 18 years sales and marketing experience in the building material industry.
Before joining the Company, he was heading as Assistance General Manager at Bahwan Building
Materials, Oman. Prior to that he worked for 2 years at the Company as Marketing Manager and
for 13 years at various sales positions in different organisations in India. Mr Imran holds an MBA
from Aligarh Muslim University, India and Bachelors degree in Commerce from India.
Mr Himanshu Bhatia, Sales Manager (Oman)
Mr Himanshu Bhatia has 16 years of sales & marketing experience in building material industry.
Before joining the Company, he worked as Sales Manager at Sadolin Paints, Oman for 4 years.
He worked for 12 years in various sales positions in the paints & office stationery companies
132
in India & Nepal. Mr Bhatia holds a Degree in Bachelor of Science and Diploma in Computer &
Information Management from India.
Salim Said Khalfan Al Dhahli- HR & Administration Executive
Mr Salim Said Khalfan Al Dhahli has about 3 years of experience in the field of Human Resource
and Administration. Prior to joining the Company in 2013 he was heading the HR & Administration
department at a quarrying company in Sohar. Mr Salim holds a degree in Bachelor of Science
(Operation Management) from Sultan Qaboos University, Oman.
All of the employees were given the opportunity to take place in the Employee Private Placement
and purchase shares in the capital of the Company. Certain of the employees took up the offer
and the Company resolved at an EGM held on 4 August 2013 that an aggregate amount of
33,981 ordinary shares in the capital of the Company be issued to certain of its employees.
These employees are not participating in the IPO in the capacity of Selling Shareholders.
133
19. Rights and Liabilities of Shareholders

19.1. Shareholders Responsibilities

The responsibility of a Shareholder shall be limited to payment of the value of the Shares
subscribed. He/she shall not be liable for the debts of the Company except to the limit of the
nominal value of the Shares subscribed.
Any person whose shareholding along with his dependents shareholding, reaches 10% or
more of the Companys share capital, shall inform the CMA about the same through a written
communication. Further, he/she shall inform the CMA regarding any transaction or dealing which
leads to the increase of this percentage immediately after it happens.
No single person or related persons up to second degree shall hold 25% or more of the shares
of a joint stock company whose shares are offered for public subscription, in accordance with
the holding rules set out by the CMA.
19.2. Shareholders Rights

All Shares shall enjoy equal rights in regards to declared profits at the General Meeting in
accordance with the Commercial Companies Law. These rights include the following:
A. To receive the dividends declared by the General Meeting;
B. The preferential right to subscribe for the Shares;
C. The right to participate in the distribution of the surplus assets of the Company in the event
of liquidation;
D. The right to dispose of the Shares in accordance with the law;
E. The right to peruse the balance sheet and profit and loss account of the Company and the
Shareholders Register;
F.
G. The right to apply for annulment of any resolution adopted by the General Meeting or Board
of Directors if it is in breach and violation of the Laws, Articles or its Internal Regulations; and
H. The right to sue the members of the Board of Directors and Auditors of the Company on
behalf of the Shareholders or the Company in accordance with the provisions set out in
Article 110 of the CCL.
The right to be notified through invitation for the General Meeting and to participate and vote
in such meetings either in person or through proxy;
The CMA may, upon material reasons raised by Shareholders who own at least 5% of the
Shares, suspend the resolutions of the general meeting which are made in favour of a certain
category of Shareholders or in the interest of the members of the Board or others.
19.3. Reports and Statements

134
The Board shall prepare un-audited quarterly financial statements for the first, second and
third quarter of each Financial Year. It shall also prepare an annual report within two months
from the end of the Financial Year comprising of the audited balance sheet, profit and loss
statement, cash flow statement, changes in Shareholders equity, report of the Board, report
on the discussions held by the Board and their analysis and report on the organization and
management of the Company. These statements should be disclosed 2 weeks prior to the AGM
through the electronic transmission system through the MSM website.
The un-audited quarterly financial statements shall be forwarded to the Information Centre of
the MSM within thirty days from the end of each quarter or any other legal period prescribed by
the disclosure rules and conditions issued by CMA through the private Electronic Transmission
System of the Centre. The said Centre shall also be provided with two copies duly endorsed
by the Board of Directors of the Company. The Company shall also have it published within the
aforementioned period.
On 29 May 2014, the CMA issued a circular to all public joint stock companies strongly urging
them to disclose their initial quarterly results within 15 days from the end of each quarter,
approved by the executive management and prior to the approval by the board.
19.4. AGMs

The Board shall extend an invitation to the Shareholders to attend the AGM within three months
from date of end of the Financial Year. The AGM shall be responsible for the deliberation of the
following:
a. To study and approve of the report of the Board of Directors.

b. To study and approve of the report on the management and organization.
c. To review the Auditors report and approval of the balance sheet and profit and loss
statement.
d. To study and approve the corporate governance report.
e. To review the report on declaration of dividend. However, such dividend shall be distributed
only from the net profit generated or from the Special Reserves Accounts subject always to
the provisions set out in Article 106 of the CCL.
f. To review the report on the sitting allowance for the meetings of the members of Board and
committees constituted under it for the forthcoming Financial Year and approve the same.
g. To review the annual remuneration (if any) of the members of the Board of Directors for the
Financial Year.
h. To look into the transparency of any transactions held with the related parties during the
previous Financial Year (if any).
i. To make a note of any expected transactions with the related parties during the next Financial
Year (if any).
j. To appoint Auditors for the next financial year and fix their fees, taking into consideration the
provisions laid down in the law.
k. To elect members to the Board in case of expiry of the term of office of one or more of them
or in the case of a vacancy that has arisen on the Board.
19.5. Ordinary General Meetings

The Board of Directors may convene a general meeting at any time and such meeting shall be
convened whenever required by Law or the Articles of Association, or upon request of one or
more Shareholders who represent at least 25% of the capital of the Company.
The Board shall establish the agenda of the general meeting. If the meeting is convened by the
auditors, the agenda shall then be established by them. The Board, or the auditors if necessary,
shall include in the agenda any proposal put forward by the Shareholders who represent more
than 10% of the capital of the Company provided that such proposal is submitted for inclusion
in the agenda at least one month before the date of the meeting.
The resolutions of the ordinary meeting shall be void unless the meeting is attended by
135
Shareholders or their proxies who represent at least half the capital of the Company. If such
a quorum is not formed within one hour of the time stipulated for the start of the meeting, a
second meeting shall be called to discuss the same agenda. The second ordinary meeting shall
be notified to the Shareholders in the same manner as the first meeting, at least one week prior
to the date set for the second meeting. The resolution of the second meeting shall be valid
regardless of the number of shares represented, provided that such meeting is held within one
month from the date of the first meeting. The resolutions of the ordinary general meeting shall be
adopted by relative majority of the vote cast in respect of a given resolution.
19.6. Extraordinary General Meetings

An EGM shall be convened to decide on the following issues:
a.
b.
c.
d.
e.
Reduction or increase in the authorised Share Capital of the Company;

Dissolution, liquidation or merger of the Company;
Sale of the Companys business or its disposal in any form or manner;
Amendment of the Companys Articles of Association;
Repurchase some of the Companys shares which do not exceed 10% of the paid up capital
provided a prior approval is obtained from CMA;
f. Transform or change the legal form of the Company to another legal form; and
g. Any other matter reserved to the extraordinary general meeting by law.
The resolutions of the EGM shall not be valid unless the meeting is attended by Shareholders
or proxies representing at least three-quarters of the Companys capital. If a quorum is not
present within one hour of the time stipulated for the start of the meeting, a second meeting
shall be convened to discuss the same agenda. The Shareholders shall be notified of the second
extraordinary general meeting in the same manner as the first extraordinary general meeting, at
least two weeks prior to the date set for the second meeting.
The resolutions of the second meeting shall be valid if the meeting is attended by shareholders
or proxies representing more than half of the Companys capital, provided such meeting is held
within six weeks of the date of the first meeting.
The resolution of the EGM shall be adopted by a majority of three-quarter of the votes cast in
respect of any given resolution, provided such resolution shall always receive votes representing
more than fifty percent of the Companys capital.
Any shareholder or any interested party may refer to the Commercial Court (the competent
department) within five years from the date on which the meeting was held, to decide on
nullification of any decision taken during the meeting in violation of the CCL, or to the provisions
of the Articles or by-laws or through fraud or misuse of authority.
19.7. Transfer of Ownership of the Shares

The transfer of ownership of the Shares shall take place through disposition in accordance with
the instructions laid down by the MSM. Shareholders may sell and transfer their Shares without
restrictions in accordance with the CCL, with the condition that the foreign shareholding shall not
exceed 70% of the share capital of the Company under any circumstances.
Similarly, the shareholding of each individual shall not exceed the maximum limit prescribed and
provided for in the CCL and CML and its Executive Regulations respectively, unless necessary
approvals are secured.
136
20. Subscription Conditions and Procedures

20.1. Eligibility for the subscription to the Offer Shares

The subscription to the Offer Shares will be open to individuals (natural persons) and
mutual funds registered at the CMA in Oman, who have their accounts with the MCD, as on
the Offer Closing Date. All GCC individuals are treated as Omani individuals for the purpose of
owning shares in Omani companies.
Post listing on the MSM, non-GCC Shareholders are permitted to own Shares equal to no more
than 70% of the paid up capital of the Company.
No single person or related person up to a second degree can hold 25% or more of the shares
of a public joint stock company, except with the explicit approval of the CMA.
The Company, the Selling Shareholders, the Issue Manager and the Legal Advisors are not liable
for any changes in applicable laws or regulations that occur after the date of this Prospectus.
Applicants are advised to make their own independent investigations to ensure that their
Applications comply with prevailing laws and regulations.
20.2. Prohibitions with regard to the Applications for subscription:

The following are prohibited from subscribing to the Offer:
A. Sole Proprietorship Establishments and juristic persons (other than mutual funds registered
at the CMA in Oman). However, the owners of sole proprietorship establishments may
submit Applications in their personal names.
B. Trust Accounts. Customers registered under trust accounts may only submit Applications in
their personal names.
C. Multiple Applications. An Applicant may not submit more than one Application.
D. Joint Applications (i.e. Applications made in the name of more than one individual, including
Applications made on behalf of legal heirs). These Applications should only be made in their
personal names
All Applications falling in one of the above categories will be rejected without contacting the
Applicant.
20.3. Applications on behalf of Minor Children:

1. For the purpose of this Offer, any person born after 15th October 1996 shall be treated as a
minor.
2. Only the father may subscribe on behalf of his minor children.
3. If the Application is made on behalf of a minor by any person other than the minors father,
the person submitting the Application will be required to attach a valid, duly notarised Sharia
(Legal) power of attorney authorising him or her to deal in the funds of the minor through
sale, purchase and investment.
137
20.4. Shareholders (Applicants) Number with the MCD:

1. Any Applicant who subscribes for the Offer Shares must have an account and shareholders
number with the MCD. Any Applicant may apply to obtain an Investor Number and open an
account by completing the MCD application form. This may be obtained from the MCDs
Head Office or its website at http://www.csdoman.co.om, or from brokerage companies
licensed by the MSM. The completed form may be submitted by an Applicant through any
of the following channels:
At the Head Office of the MCD based in the Commercial Business District, Muscat,
Oman.
- At the branch of the MSM based in Salalah, Oman, Tel: +968 23299822,
Fax:+96823299833
- At the office of any brokerage company licensed by the MSM.
- By sending a facsimile to the MCD at +968 24817491.
- By opening an account through the MCD website at http://www.csdoman.co.om.
2. In order to open an account and receive an Investor Number with MCD, a juristic person will
be required to furnish a copy of its constitutional documents, in the form prescribed by the
MCD, along with a completed MCD application form.
3. Applicants who already hold accounts with the MCD are advised, before the Offer, to reconfirm their MCD account particulars such as full name, postal address, civil ID number or
passport number and particulars of bank account. Applicants may update their particulars
through any of the channels mentioned above
All correspondence including allocation notices and dividend cheques will be sent to
Applicants address as recorded at the MCD. Applicants should ensure that their address as
provided to the MCD is correct.
4. Applicants after opening their accounts and updating their particulars must obtain from
MCD the correct Investor Number to be recorded in the Application Form. Verification of the
number is the responsibility of the Applicant. Applications not bearing the correct Investor
Number will be rejected without contacting the Applicants.
For more information on these procedures, Applicants should contact the MCD:
Muscat Clearing& Depository Co., SAOC
Tel. 24822222- Fax. 24817491
http://www.csdoman.co.om/
20.5. Offer Period:

The Offer shall commence on 16th September 2014 and end on 15th October 2014, with the end
of the official working hours of the Collecting Banks.
20.6. Minimum Limit of Public Subscription

The minimum number of Offer Shares is as set out below:
Individuals (natural persons)

: 500 Shares
Mutual funds registered at the CMA in Oman
: 100,100 Shares
Applications above the minimum limit shall be in multiples of 100.
138
20.7. Maximum Limit of Public Subscription

The maximum number of offered Shares that can be applied for by any investor is as per the
CML (Article 7), which stipulates a maximum limit for an Application at 10% of the total Offer size
which equates to 2,000,000 (Two Million) Offer Shares. It is not permissible for any Applicant to
subscribe for more than this amount.
For the purpose of calculation of this percentage the Application of a father (or guardian) shall
be merged with the Applications of his minor children. If the volume of the Shares subscribed
exceeds the said percentage, the Shares applied under each Application shall be reduced
proportionately before making the allotment.
20.8. Terms of Payment:

Each Collecting Bank will open an escrow account entitled the Al Maha Ceramics Public Offer
account for the collection of the Application Money. This account will be managed by each
Collecting Bank who, after allotment and refunds, will transfer the balances in such account to
the account(s) specified by the Issue Manager. Each Applicant can pay by cash, draw a cheque
or demand draft for the amount payable at the time of submission of the Application.
20.9 Particulars of the Bank Account:

1. Each Applicant is required to furnish the particulars of its bank account (registered in the
name of the Applicant). The Applicant must not use the bank account number of any other
person except in the case of minor children only.
2. If the bank account of the Applicant is registered with a bank other than where the Application
is submitted, the Applicant will be required to submit a document to confirm the correctness
of the bank account particulars. This can be done by submitting any document from the
bank of the Applicant that states the account number and name of the account holder.
Documents that may be accepted include account statements or a letter or any document
issued by the bank confirming this information. The Applicant is responsible for ensuring
that the evidence submitted is legible and contains the required information. The Applicant
is not obliged to submit any evidence with regard to the accuracy of its bank account if
it is subscribing through the Collecting Bank where it maintains its account. In this case,
the bank will be required to verify and confirm the correctness of the Applicants account
through its own system and procedures or through the evidence submitted to it by the
Applicant.
3. In accordance with the instructions of the CMA, the details of the bank account will be listed
in the records of the MCD for transferring any refund as well as for crediting any dividends
paid by the Company in future. For Applicants who already have bank accounts registered
with the MCD the account mentioned in the Application will be used for the transfer of
refunds only.
4. The Application containing the bank account number of a person other than the Applicant
will be rejected, with the exception of the Applications made on behalf of minors that contain
bank accounts particulars of their father.
139
20.10. Documentation Required

1. Document confirming the accuracy of the bank account number as provided for in the
Application (only where the Application is made through a Collecting Bank other than where
the Applicant has the account).
2. Copy of a valid Power of Attorney duly endorsed by the competent legal authorities in the
event the Application is on behalf of another person (with the exception of the Application
made by a father on behalf of his minor children).
3. In case of applications by mutual funds registered in Oman which are signed by a person in
his or her capacity as an authorised signatory, a copy of adequate and valid document (CMA
Registration and Authorized Signatory Form) should be attached.
20.11. Mode of Application:

1. The Applicant will be responsible for satisfying all the particulars and the validity of the
information set out in the Application. Collecting Banks have been instructed to accept only
the Applications satisfying all the requirements of the Application Form and the Prospectus.
2. The Applicant, before completing the Application, shall read the Prospectus including the
Offer terms and conditions.
3. The Applicant shall fill in the Application with all the relevant details as required by the
Application and the Prospectus including the Applicants number with MCD, civil number
and date of birth for minor children.
4. The Applicant shall submit the Application to one of the Collecting Banks as referred to in
the Prospectus, together with the Application money and any relevant documents in support
of the Application.
5. Cheques or demand drafts shall be made in favour of Al Maha Ceramics Public Offer.
20.12. Bank Receiving the Subscription (Collecting Banks) :

The Applications shall be accepted by one of the following commercial banks during the official
working hours only:

Oman Arab Bank SAOC
Bank Muscat SAOG
The Collecting Bank receiving the Application is required to accept the Application after
confirmation of compliance of the procedures set out in the Prospectus. The Collecting Bank
must instruct the Applicants to comply and fulfil any requirements set out in the Application.
The Applicant must submit an Application to one of the Collecting Banks on or before the Offer
Closing Date. The Collecting Bank shall refuse any Application received after the official working
hours on the Offer Closing Date.
140
20.13. Rejection of Applications:

The Collecting Banks shall reject Applications in the following circumstances:
1. If the Application is not signed by the Applicant.
2. If the Application money is not paid by the Applicant in accordance with the conditions set
out in the Prospectus.
3. If the Application money is paid by cheque and the cheque is dishonoured for whatever
reason.
4. If the Application is submitted in joint names.
5. If the Applicant is a sole proprietorship or trust account or a juristic person (other than a
mutual fund registered in Oman).
6. If the Application does not include the Applicants Investor Number registered with the MCD.
7. If the Investor Number furnished in the Application is incorrect i.e. it does not match with the
Applicants name.
8. If the Applicant submits more than one Application in the same name, all of them will be
rejected.
9. If the supporting documents are not enclosed with the Application.
10. If the Application does not contain all the particulars of the bank account of the Applicant.
11. If the particulars of the bank account provided for in the Application are found to be incorrect
12. If the bank account in the Application does not belong to the Applicant, with the exception
of Applications submitted in the names of minor children, who are allowed to make use of
the particulars of the bank accounts held by their father.
13. If the power of attorney is not attached to the Application in respect of an Applicant who
subscribes on behalf of another person (with the exception of the fathers who subscribe on
behalf of their minor children).
14. If the Application does not comply with the legal requirements or other requirements as
provided for in the Prospectus.
If the Collecting Bank observes, after receipt of an Application and before the expiry of the
time schedule prescribed for handing over of the Applications to the Issue Manager, that the
Application has not been complied with the procedures set out in the Prospectus, due effort will
be taken to contact the Applicant so that the mistake may be corrected. If the Applicant does not
rectify the Application within the period referred to, the Collecting Bank will return the Application
together with the Application money to the Applicant and it will not be considered for allotment.
The Issue Manager may reject any Application under any of the conditions referred to above,
subject to securing the approval of the CMA and submission of a comprehensive report furnishing
the details of the Applications that are rejected and the reasons behind the rejections.
If it appears from the final subscriber register made by all the Collecting Banks that there are
Applications with the same Investor number or civil number or the same bank account (except
for minor children) all the Applications shall be rejected for belonging to the same subscriber.
141
20.14. Enquiry & Complaints:

Applicants who intend to seek clarification or file complaints with regard to the issues related
to the allotment or rejected Applications or refund of the Application money in excess of the
subscription, may contact the branch of the Bank where the Application was made. In case of
the absence of any response from the branch, the Applicant may contact the Collecting Banks
as under:
Oman Arab Bank SAOC

Person (s) in charge: Ms. Sahar K. Al Zagha
Address: PO Box: 2010, Ruwi, Postal Code 112, Sultanate of Oman
Phone: +968 24827328
Fax: +968 2482 7367
E-Mail: corporatefinance@oabinvest.com
Bank Muscat SAOG
Person (s) in charge: Mr. Ahmed Al Busaidi
Address: PO Box 134, Ruwi, Postal Code 112, Sultanate of Oman
Phone: +968 2476 8064
Fax: +968 2478 7764
E-Mail: ahmedbu@bankmuscat.com
Person (s) in charge: Mr. Hussain Al Abdullah Al Lawati
Address: PO Box 751, Ruwi, Postal Code 112, Sultanate of Oman
Phone: +968 2477 8757 / 8610
Fax: +968 2477 8993
E-Mail: nbobackoffice@nbo.co.om
If the Collecting Bank fails to resolve the complaint with the Applicant, it will refer the subject
matter to the Issue Manager and keep the Applicant informed of the progress and development
in respect of the subject matter of the dispute. The Applicant may contact the Issue Manager
on the following address:
Oman Arab Bank SAOC
Person (s) in charge:
Mr. Muhammad Kashif Sabih
Mr. Zaydoon Abu-Qarmool
Phone: +968 2475 4315 +968 2475 4663
E-mail: corporatefinance@oabinvest.com
Fax: +968 2482 7367
Address: PO Box: 2010, Ruwi, Postal Code 112, Sultanate of Oman
20.15. Overall Offer Split and Allotment Procedures:

In the case of over-subscription of the Offer, the eligible Applications shall be segregated into
two Categories and the Offer Shares will be allotted among the eligible Applicants as follows:
Category I:
14,000,000 (Fourteen Million) Shares, being 70% of the Offered Shares will be allocated on a
pro-rata basis to individuals (natural persons) applying for 100,000 shares or less.
142
Category II:
6,000,000 (Six Million), being 30% of the Offered Shares will be allocated on a pro-rata basis to
individuals (natural persons) applying for more than 100,000 Shares and mutual funds registered
at the CMA in Oman.
The CMA in co-ordination with the Issue Manager will finalise the actual basis of allocation.
The CMA may decide to allocate a minimum number of Offer Shares equally to all eligible
Applicants, taking into consideration the small subscribers, and the remaining Offer Shares
shall be distributed on a pro-rata basis.
Allotment for non-Omani Shareholders will be limited to a maximum of 70% of the paid up
capital of the Company. The final allocation on the above basis will be decided by the Issue
Manager and the Company in consultation with the CMA.
20.16. Basis for Undersubscribed Offer Shares:

In case of a shortfall in subscription, the Offer Shares will be adjusted in proportion to the
number of Shares offered by the Selling Shareholders.
Any under subscription in a Category shall be carried to the other Category.
20.17. Allotment Letters and Refund of Money:

The Issue Manager will arrange to allot the Offer Shares to the Applicants within 15 days after
the end of the Offer Period after receiving the approval of the CMA on the basis of allotment.
The Issue Manager will arrange to send allotment letters to the Applicants who have been
allotted Shares as per the addresses registered with the MCD immediately after obtaining CMA
approval for the allotment.
Where an Applicant has been allocated fewer Shares than indicated in the Application, the
excess amount, if any, paid on Application, will be refunded to the Applicant from the escrow
account of the respective Collecting Bank(s). The Issue Manager will also instruct the Collecting
Banks to refund the excess money to the eligible Applicants within 15 days after the end of the
Offer Period and after receiving the approval of the CMA.
The Applicant shall immediately after the announcement of the allotment verify with MCD the
Shares allotted to him because allotment notices may take time to reach the Applicant and the
listing of the Shares will be as per the proposed timetable.
143
20.18. Proposed Timetable:

The following table shows the expected time schedule for completion of the subscription
procedures:
Procedure
Commencement of subscription
16th September 2014
Closing of subscription
15th October 2014
Due date for the Issue Manager to receive the subscription data and
final registers from the Collecting Banks
22nd October 2014
Notifying the CMA of the outcome of the subscription and the

proposed allotment
26th October 2014
Approval of the CMA with regard to the proposed allotment
27th October 2014
Completion of the allotment procedures and commencement of refund
29th October 2014
Listing of the Shares on the MSM

Date*
3rd November 2014
*The above are only expected dates and are subject to change.
20.19. Listing and Trading of Shares:

The Shares shall be listed on the MSM in accordance with the laws and procedures that are in
force on the date an application is made for the listing and registration. The above listing date
is an estimated date and the exact date will be published on the MSM website.
20.20. Responsibilities and Obligations:
The Issue Manager, Collecting Banks and the MCD shall abide by the responsibilities and
obligations set out by the directives and regulations issued by the CMA. The Issue Manager
and the Collecting Banks must also abide by any other responsibilities that are provided for in
the agreements entered into among them and the Company and/or the Selling Shareholders.
The parties concerned will be required to take remedial measures with regard to the damages
arising from any negligence committed in the performance of the functions and responsibilities
assigned to them. The Issue Manager will be the body responsible before the regulatory
authorities in taking suitable steps and measures for repairing such damages.
144
21. Undertakings
21.1. Al Maha Ceramics SAOG (Under transformation)

The Board of Directors jointly and severally hereby confirms that, to the best of their knowledge:
1) The information provided in this Prospectus is true and complete.
2) Due diligence has been taken to ensure that no material information has been omitted, the
omission of which would render this Prospectus misleading.
3) All the provisions set out in the CML, the CCL, and the rules and regulations issued pursuant
to them have been complied with.
Directors who are authorized to sign the Prospectus pursuant to the EGM held on 25 February
2013:
Name
Signature
Masood Bin Hameed Bin Malik Al Harthy
-sd-
Abdulredha Mustafa Sultan
-sd-
145
21.2. Financial Advisor and Issue Manager

Pursuant to our responsibilities under Article 3 of the Capital Market Law, Article 13 of the
Executive Regulations of the Capital Market Law, issued under Ministerial Decision No. 1/2009
(as amended), and the directives issued by the CMA, we have reviewed all the relevant documents
and other material required for the preparation of the Prospectus pertaining to the Offer.
The Board of Directors will bear the responsibility with regard to the correctness of the information
provided in the Prospectus, and they have confirmed that to the best of their knowledge no
material information has been omitted, the omission of which would have made the Prospectus
misleading.
We confirm that we have conducted due diligence required by our profession with regard to
the Prospectus which was prepared under our supervision and, based on the reviews and
discussions with the Company, its Directors, Shareholders and other related parties, we confirm
the following:
1) We have conducted reasonable due diligence to ensure the information given to us by the
Founders / Shareholders/ Board of Directors and included in the Prospectus is conformant
with the facts in the documents and other material of the Offer.
2) To the best of our knowledge and from the information available from the Company, the
Company has not omitted any material information, the omission of which would render the
Prospectus misleading.
3) The Prospectus and the Offer to which it relates, is conformant with all the rules and terms of
disclosure stipulated for in the Capital Market Law, the Executive Regulation of the Capital
Market Law issued under Ministerial Decision No. 1/2009 (as amended), the prospectus
models applied by the CMA, the CCL and the directives and decisions issued in this regard.
4) The information contained in this Prospectus in Arabic (and the unofficial translation into
English thereof) is true, sound and adequate to assist the Applicants to make the decision
as to whether or not to invest in the Shares offered.
-sdOman Arab Bank SAOC

Investment Management Group
146
21.3. Legal Advisor

The legal advisor whose name appears below, hereby confirms that all the procedures taken
for the offering of the Shares the subject matter of the Prospectus are in line with the laws and
legislations related to the Companys business and the CCL, the Capital Market Law and the
regulation and directives issued pursuant to them, the requirement and rules for the issue of
the Shares issued by the CMA and the Articles of Association. The Company has obtained all
the consents and approvals of the official authorities required to carry out the Offer the subject
matter of the Prospectus.
-sdDentons & Co., Oman Branch
-sdS & A Law Firm
147

Almaha Ceramics Prospectus

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His Majesty Sultan Qaboos bin Said

Al Maha Ceramics SAOG

Initial Public Offering of 20,000,000 Ordinary Shares

Offer Opens on: 16th September 2014;

Oman Arab Bank SAOC

LEGAL ADVISORS TO THE COMPANY

Important Notice to Investors

Forward Looking Statement

Level of demand for the Companys products and services;

Presentation of Financial and Other Information

Additional points to be noted

Abbreviations and Definitions

Estimated Offer Expenses

Purpose of the Offer and Use of Proceeds

Objects and Approvals

Construction Sector Overview

Description of The Company and Business Overview

10. Risk Factors and Mitigants

11. Source of Financing

12. Historical Financial Statements

13. Projected Financial Statement 2014-2018

15. Dividend Policy

16. Valuation and Price Justification

17. Related Party Transactions and Material Contracts

18. Corporate Governance

19. Rights and Liabilities of Shareholders

20. Subscription Conditions and Procedures

1. Abbreviations and Definitions

Annual general meeting of the Shareholders

The Gulf Cooperation Council which is composed of Oman, United Arab

Al Maha Ceramics SAOG (under transformation).

15th November 2005

Al Anwar Holdings SAOG

Number of Shares before

Number of Shares to be sold

16th September, 2014

15th October, 2014

3rd November, 2014

The following prohibitions apply for the Offer:

2. Multiple Applications are not permitted. An Applicant may not submit

For Individuals (Natural persons): 500 Shares and in multiples of 100

Maximum limit for

In case of over-subscription of the Offer, the eligible Applications shall be

Oman Arab Bank SAOC Investment Management Group

Means the legal advisors to the Company:

Oman Arab Bank SAOC

S & A Law Firm

Muscat Clearing and Depository Co. SAOC

3. Estimated Offer Expenses

Legal Advisors fees

Reporting Accountants Fees

Collecting Banks fees

CMA & MCD fees

Printing, Marketing, Advertising & Publicity expense

4. Purpose of the Offer and Use of Proceeds

5. Objects and Approvals

5.2. Permits and Licenses

Safety License Number: 744/2014

AL ANWAR HOLDINGS SAOG

MUSTAFA SULTAN ENTERPRISES LLC

MINISTRY OF DEFENCE PENSION FUND

MANAR AL SHARQ LLC

AL KHONJI HOLDING LLC