• Company’s philosophy:

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

• Board of Directors:

The Board of Directors is responsible for directing, supervising and comprehensive monitoring of the company, setting Goals, Strategies and special policies, and approval and review of the performance in the company.
The Board of Directors consists of five Independent and non-executive members in compliance with article 3 of the Code of Corporate Governance issued by the CMA. All the members on board have rich and varied business and investment experience.

• BOD Responsibilities:

Approving the business and financial policy of the company to meet the objectives of the business and to maximize the shareholders’ value.
Approving and reviewing frequently the company’s goals to implement them.
Approving the internal regulations of the company regarding routine activities and specifying the responsibilities and the authorities of the executive management.
Reviewing material transactions with the related party, which are not in the ordinary course of business prior to the same being brought before the general meeting of the company.
Provide proposals of capital raise and decrease hire or terminate auditors and dividend distribution to General meeting.
Approve loans and credit facilities of subsidiaries companies that provided from banks.
Prepare ordinary and non-ordinary Annual General Meetings. Specify discussed subjects according to followed rules & regulations.
Nominate sub-committees members of the board and assign their responsibilities & authorities.
Approving and implementing the disclosure policy of the company in compliance with the regulatory requirements.
Reviewing the company’s performance to evaluate whether the business is properly managed according to the company’s objective.
Provide information to shareholders accurately in the proper timing compliance with disclosure policy.
Selecting the CEO/General Manager and other key executives and specifying their roles, responsibilities and rights.
13- Evaluating the performance of the sub-committees, CEO and key employees.
14- Board of Directors has the right to delegate and authorize sub-committees, CEO and General Manager.
15- Approving interim and annual financial statements related to company activities and results, those provided from the Executive Management and disclosing the truly financial position.
16- Include full state of payments received by chairman & directors annually in the financial statements.
(B) Board of Directors form:

#	Member Name	Representative	Independent / Non-independent	Membership
1	Sheikh/ Salah Helal AL Mawali	Himself	Non-independent	Chairman
2	Mr. Nasser Said AL Harthi	Himself	Independent	Deputy Chairman
3	Mr. Waled Mohammed Najeh Al-Salah	Himself	Independent	Member
4	Mr. Waseem Salah  Abd Qraeen	First National Co. LLC	Non-independent	Member
5	Mr. Imad Rathwan Al-Botaina	Globle Omani for Investment SAOC	Non-independent	Member

All Board of directors are Non-executive and not getting any salary from the Company.
(c) Board Members brief:
Sheikh/ Salah Helal Al Mawali
He is Board Chairman and Chairman of Investment Committee and member of Nomination & Remuneration Committee He has twenty two years of experience in several areas such as Industrial area, investment and real estate development. He is Vice CEO of Small and Medium Enterprises Development Fund. He holds a Masters in international Economics and Management. He is Chairman of Oman Flour Mills Company SAOG. and Board member of Oman Investment & Finance Co. S.A.O.G.& Oman Fishers Company SAOG.  
Mr. Nasser Said AL Harthi
He is deputy Chairman and audit Committee member. He holds a diploma in police and legal science. He is director in the board of Al-batinah Hotels Company S.A.O.G.  
Mr. Waseem Salah Abd Qaraeen
He is Director in Board of Directors and Investment committee member and Chairman of Nomination & Remuneration Committee.He holds a bachelor degree in accounting. He has 17 years experience in external & internal auditing, and investment in securities. He is Director in United Finance Company SAOG & and Al-batinah Hotels Company S.A.O.G.  
Mr. Imad Rathwan Al-Botaina
He is a director in the Board and Audit Committee member and Investment committee member. He holds a bachelor degree in accounting. He has more than 26 year experience in External auditing, Accounting and Investment. Now he is Finance Manager in the Global Omani Investment Co.( SAOC).
Mr. Waleed Mohammed Najah Al-Saleh
He is a director in the Board and chairman of Audit Committee and member of Nomination & Remuneration Committee He holds a bachelor degree in accounting. He has more than 30 year experience in Financing , Investment , Management and feasibility studies . Now he is Investment Manager in Al-Onazi Group for General Trading.

(D) Details of meetings held during the year 2016 are as follows: –

Meeting	Number of Meeting held	Dates of meetings
Board meeting	8	7/1/2016  –  30/2/2016 - 30/3/2016 28/4/2016 – 2/6/2016 –  11/8/2016 27/9/2016 – 3/11/2016
Audit Committee Meeting	5	28/4/2016 – 20/2/2016 – 11/8/2016 3/11/2016 – 22/12/2016
Investment Committee Meeting	6	11/4/2017 – 23/5/2016 – 28/6/2016 27/8/2016 – 6/9/2016 – 29/12/2016
Nomation  Committee Meeting	2	2/6/2016  - 29/12/2016
Annual General Meeting	1	30/3/2016

Details of Board & committees members and AGM attendance of 2016 is attach in schedule (1).

3. Audit Committee –

 

The audit committee, consisting of three members Ware formed as per the guidelines issued by the CMA. The Board approved the audit committee charter. The key responsibilities of the audit committee are as below:
1. Considering the name of the auditor in the context of their independence (particularly with reference to any other non-audit services), fee and terms of engagement and recommending its name to the board for putting before AGM for appointment.
2. Reviewing audit plan, results of the audit and as to whether auditors have full access to all relevant documents.
3. Checking financial fraud particularly fictitious and fraudulent portions of the financial statement. They should put in place an appropriate system to ensure adoption of appropriate accounting policies and principles leading to fairness in financial statements.
4. Oversight of the internal audit function in general and with particular reference to reviewing of scope of internal audit plan for the year, reviewing the reports of internal auditors pertaining to critical areas, reviewing the efficacy of the internal auditing and reviewing as to whether internal auditors have full access to all relevant documents.
5. Oversight of the adequacy of the internal control system through the regular reports of the internal and external auditors. They may appoint external consultants if the need arose.
6. Oversight of financial statements in general and with particular reference to review of annual and quarterly financial statements before issue, review of qualifications in the draft financial statements and discussion of accounting principles. In particular, change in accounting policies, principles and accounting estimates in comparison to previous year, any adoption of new accounting policy, any departure from International Accounting Standards (IAS) and non compliance with disclosure requirements prescribed by CMA should be critically reviewed.
7. Serving as a channel of communication between external auditors and the board ,and also internal auditors and the board.
8. Reviewing risk management policies and looking into the reasons of defaults in payment obligations of the company, if any.
9. Reviewing proposed specific transactions with related parties for making suitable recommendations to the board and setting rules for entering into small value transactions with related parties without obtaining prior approval of audit committee and the board.

 

3 members of the Board of Directors formed the Audit Committee as below:

#	Member Name	Meeting Attendance
1	Mr. Waled Mohammed Najeh Al-Salah - Chairman	5
2	Mr. Nasser Said AL Harthi – Member	5
3	Mr. Imad Rathwan Al-Botaina – Member	5

The committee has discussed with internal & external auditors auditing procedures to make sure that it covered all risks of internal control and diligence matters in preference of evaluating legal auditors’ independency.

4. Investment  Committee :

The Investment Committee consists of three members and aims to guide the Board of Directors regarding strategic decisions on investment and The Board approved the investment committee charter. The key responsibilities of the investment committee are as below:

1. Review the strategy and objectives of the approved investment periodically.
2. Follow-up to the performance of the company's existing and future investments by the company and comparing the goals adopted and make recommendations thereon to the Board of Directors.
3. Follow-up to the performance of the securities portfolio with the portfolio manager and make recommendations thereon to the Board of Directors.
4. Review and approve the special investment regulations and investment risks and follow up on decisions regarding new investments and existing or exit from investments.
5. Any other mandates assigned to the Committee of the Board of Directors.

members of the Board of Directors formed the Investment Committee as below:

#	Member Name	Meeting Attendance
1	Sheikh / Salah Helal AL Mawali-Chairman	6
2	Mr. Waseem Salah  Abd Qraeen –Member	6
3	Mr. Imad Rathwan Al-Botaina – Member	6

5. Nomination & Remuneration Committee:

The formation of a Nomination and Remuneration Committee of three members and aim to assist the General Meeting on the nomination of qualified members of the Board of Directors and the election of the fittest among them, are appointed by the Governing Council in the selection of appropriate competencies and necessary to the executive management.
The terms of reference of the Committee:
The Committee shall have the following procedures:
1. Provide succession plan for executive management.
2. propose policy or succession plan for the board of directors or at least the Chairman of the Board.
3. Preparation of a detailed job description for the role of a member of the Board of Directors and its responsibilities, including the President of the Council, in order to facilitate the process of members of their duties and the definition of their roles, and measure their performance.
4. Find qualified for admission to the council persons nominated as members of temporary and when a vacancy from the membership of the board seats.
5. not inconsistent with the statute of the company, find qualified to assume executive positions and nominated persons, according to the request or direction of the Council.
6. Preparation bonuses, allowances and incentives to the executive management policy.
7. review these policies periodically, taking into account market conditions and the performance of the company.
8. Taking into account to avoid conflicts of interest, the Commission, after obtaining the approval of the Board of Directors, use any other hand to get any counseling in order to perform its functions.
9. Any other mandates assigned to the Committee by the Board.
members of the Board of Directors formed the Nomination & Remuneration Committee as below:

#	Member Name	Meeting Attendance
1	Mr. Waseem Salah  Abd Qraeen- Chairman	2
2	Sheikh / Salah Helal AL Mawali – Member	2
3	Mr. Waled Mohammed Najeh Al-Salah – Member	2

6. Company Executive Management Team:

The Board has appointed an Executive Management Team leaded by Mr. Gamal Haggag- General Manager appointed on 1/7/2016 he hold chartered accountant and has over 25 years experience in Financial, Management and Investment and has held several positions in top management including six years as finance and admin. Manager of the Company.
It receives recommendations & directions of the Board on matters relating to the goals and objectives of the company and the workflow.

7. Bonus & Allowances:

(A) Remuneration by way of sitting fees and reimbursement of incidental expenses for the Board and its committees for the year 2016 is RO 44,100 Sitting fees ware  paid as below :

#	Description	Sitting Fees Per Meeting, RO
		Chairman	Other Members
1	Board Meeting	700	600
2	Audit Committee	500	400
3	Investment Committee	500	400
4	Nomination & Remuneration Committee	500	400

(b) Salaries, allowances, perquisites, gratuity and social insurance paid in the year 2016 to the top  employees’ aggregates to RO. 39,546 and bonus paid for RO. 2,425 for year 2015 performance.

8. Board of Director Nomination procedure:

1- The Company shall be managed by a Board of Directors that consists of five directors those elected by the Annual General Meeting (AGM). The nominee must own at least 30,000 shares from company shares.
2- With the compliance of Commercial Company Law, nomination procedure should concern the follow:
A. Majority of the directors don't work for the company with receiving monthly or annual remuneration.
B. One third of directors at least should be from independent directors. That is to say,  such directors or any of their first degree relatives should not have occupied any senior post ( Such as the chief Executive Officer, the General Manager or similar posts in accordance with the organizational structure) in the company for the last two years. In addition, they should not have any relations with the company, its parent company or its affiliated or sister companies, which could result in financial transaction.
C. A justice person shall not be represented with more than one director in the board.   
The nomination procedure organized by Oman Companies Commercial Law and Code of Corporate Governance for MSM listed companies CMA.

9. Details of Non-Compliance –

The Board is pleased to confirm that there has been no specific area of non-compliance.
No penalties imposed by CMA or any other statutory authority during the last year 20 10 .

10. Means of Communication with the shareholders & Investors :

The company publishes its un-audited quarterly and audited annual financial statements in two local newspapers, as required by CMA regulations. The company is committed to provide disclosure required in the specified time and deliver all information to shareholders and monitoring organizations at time, as well as sending annual report to shareholders according to regulations issued by CMA.  

• Management discussion & Analysis Report –

Management discussion & Analysis Report for the year 2016 forms part of the annual report.

11. Analysis according to the number of shareholders, number of shares, and ratios as on 31st Dec. 20 1 6

% Holding	No of shareholders	No of shares	%
More than 10%	3	11,884,421	39.615
Between 5% to 10%	1	2,975,000	9.917
From 1 % to 5 %	9	5,622,472	18.742
Less than 1%	966	9,517,607	31.726
Total	979	3 0,000,000	100 %

12. Share Price data –
The movement of the Company’s share price during the year 20 1 6 is summarized below:

Closing Price at the End of Month	High – RO	Low – RO	Volume Traded
January 2016	0.076	0.070	31,549,990
February	0.082	0.070	9,671,583
March	0.081	0.070	14,514,234
April	0.102	0.077	31,731,514
May	0.109	0.086	15,696,349
June	0.093	0.080	16,548,003
July	0.095	0.080	4,987,763
August	0.100	0.089	26,845,620
September	0.090	0.088	12,137,172
October	0.091	0.086	7,533,573
November	0.090	0.084	57,959,411
December 2016	0.100	0.088	9,877,514

13. Statutory Auditors:
Parent Company:
The External Auditor of the Company is BDO Jawad  Habib, the statutory auditors of the Company, have been operating in the Sultanate of Oman for the past 37 years and is one of the leading professional services organizations in the region providing industry focused assurance, tax and advisory services to enhance value for their clients. It is a member firm of BDO International, the fifth largest international accounting organization with 59,000 employees working in a global network of 1,300 offices situated in 144 countries.
The auditor has carried out the required statutory auditing with high efficiency in accordance with the International Standards on Auditing and they were provided with all information and statements required for the year 2016. The External auditors charged a fee of RO 3,200 against the services rendered by them to the Company.

Subsidiaries Companies:
Charges of external auditing paid in 2013 from subsidiaries companies are shown below:

Auditor Name	Company Name	Audit Charge
Talal Abu Ghazaleh & Co.	Oman Cans Industry LLC	400
Talal Abu Ghazaleh & Co.	Al Batinah Real estate Development Co.LLC	400
Al Bayan for Auditing Bureau	Al Batinah shipping, Handling & Custom Clearance  Co. LLC	200

 
14. The Board of Directors Acknowledgment:
The Board of Directors acknowledges that the preparation of the annual Report of the Company together with the Management Discussion and Analysis Report, the Corporate Governance Report and the audited Balance Sheet have been done with its full knowledge and in line with the standards of accounting and statutory rules governing disclosure by the Capital Markets Authority.
The Board of Directors also acknowledges that there is no material information that will be in any way affect the continuance of the business of the Company in the coming financial year.