Report of Material Events
Dear Shareholders,
It is my pleasure, on behalf of the Board of Directors, to present to you the Unaudited Financial Statements of Salalah Mills Company along with its subsidiary for the nine months period ended on 30TH September, 2010.
Sales
The total sales quantity by the parent company had increased by 4.7% during the first nine months of the current year compared to same period of the year 2009. The total sales value during the first nine months of 2010 was RO 17.2 million compared to RO 17.1 Million made in the nine months of last year. However, the gross profit margin decreased from 18.6% to 17.1% due to lower selling prices in 2010 compared to 2009.
The subsidiary Company
The subsidiary company (Salalah Macaroni) made remarkable results during the first nine months of the current year. The net profit reached RO 631,920 compared to RO 326,248, the net profit made during the same period of last year, showing an increase of 93.7%. The installation of the new short-cut pasta had started and it is expected to be in operation by year end.
Profit
The parent company made a net profit of RO 1,907,317 during the first nine months of the current year compared to RO 2,214,763 made in the same period of last year, showing a decrease of 10.2% .This was due to reduction in flour selling prices. While the consolidated group profit for the first nine months of the year 2010 increased from RO 2,451,010 to RO 2,539,236, showing an increase of 3.6%.
Expansion Project
Dear shareholders, the company has signed a contract with the Swiss Company, Buhler, to supply a new flour production line with a capacity of 600 MT per day. The new line is expected to be in operation in the first quarter of 2012. This new line will increase the company’s daily production capacity to about 1,500 MT.
Ahmed bin Abdullah Saeed Al Rawas
Chairman
SALALAH MILLS COMPANY (S.A.O.G)
Salalah – Sultanate of Oman
CONSOLIDATED AND PARENT COMPANY
INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
SEPTEMBER 30TH, 2010
Registered Office: Principal place of business:
P.O.Box: 67, Postal Code: 217 Raysut Industrial Estate
Al Awqadain Salalah
Salalah, Sultanate of Oman Sultanate of Oman
4
SALALAH MILLS COMPANY (S.A.O.G)
Salalah – Sultanate of Oman
INDEX
Page / ExhibitBoard of Directors Report / 1
Balance sheet as of SEP 30th , 2010 / 2 / A
Statement of income for the 9 M ended
SEP 30th , 2010 / 3 / B
Statement of changes in shareholders' equity
for the 9 M ended SEP 30th , 2010 / 4 / C
Statement of cash flows for the for the 9 M ended
SEP 30th , 2010 / 5 / D
Notes to the financial statements / 6 - 24
SALALAH MILLS CO (SAOG)
Salalah – Sultanate of Oman
BALANCE SHEET AS OF SEP 30TH, 2010
EXHIBIT - A
Parent Co. / Consolidated
ASSETS / Note / 30-09-10 / 30-09-09 / 30-09-10 / 30-09-09
Current Assets: / RO. / RO / RO. / RO.
Cash at bank and in hand / 5 / 1,077,374 / 1,223,291 / 1,390,068 / 1,415,304
Receivables and prepayments / 6 / 4,619,795 / 4,275,364 / 4,528,906 / 3,879,895
Investments / 7 / 293,000 / 160,000 / 293,000 / 160,000
Inventories / 8 / 4,101,616 / 3,567,989 / 4,688,352 / 4,226,834
Total Current Assets / 10,091,785 / 9,226,644 / 10,900,326 / 9,682,033
Non-current Assets:
Property, plant and equipment / 9 / 10,783,783 / 6,404,303 / 16,702,795 / 10,911,975
Investment in subsidiary / 10 / 2,240,000 / 1,600,000 / - / -
Total Non-current Assets / 13,023,783 / 8,004,303 / 16,702,795 / 10,911,975
TOTAL ASSETS / 23,115,568 / 17,230,947 / 27,603,121 / 20,594,008
LIABILITIES AND EQUITY
Current Liabilities:
Bank borrowings / 11 / 2,000,075 / - / 3,029,372 / 200,000
Payables and accruals / 12 / 7,279,433 / 4,642,606 / 7,190,174 / 5,604,608
Term loans, current maturities / 13 / 418,088 / 300,000 / 418,088 / 300,000
Murabaha Facility / 14 / -- / -- / 484,249 / 414,535
Provision for Income Tax / 16 / 260,295 / 286,672 / 260,295 / 286,672
Total Current Liabilities / 9,957,891 / 5,229,278 / 11,382,178 / 6,805,815
Non-current Liabilities:
Term loans, excluding current maturities / 13 / 598,783 / 1,046,400 / 598,783 / 1,046,400
Murabaha Facility / 14 / -- / -- / 832,812 / 791,379
Deferred Government Grant / 13 / 379,901 / 379,901 / 379,901 / 379,901
Deferred tax liability / 15 / 233,006 / 231,844 / 233,006 / 231,844
Total Non-current Liabilities / 1,211,690 / 1,658,145 / 2,044,502 / 2,449,524
Total Liabilities / 11,169,581 / 6,887,423 / 13,426,680 / 9,255,339
Shareholders’ Equity:
Share capital / 17(a) / 4,125,000 / 3,750,000 / 4,1250,000 / 3,750,000
Share Premium / 17(b) / 222,040 / 597,040 / 222,040 / 597,040
Legal reserve / 17(c) / 1,072,954 / 773,009 / 1,072,954 / 773,009
general reserve / 17(d) / 1,071,084 / 771,139 / 1,071,084 / 771,139
Retained earnings / 5,454,909 / 4,452,336 / 6,075,999 / 4,514,074
Total Shareholders’ equity / 11,945,987 / 10,343,524 / 12,567,077 / 10,405,262
Minority interest in subsidiary / -- / -- / 1,609,363 / 933,407
Total Equity – Exhibit – C / 11,945,987 / 10,343,524 / 14,176,441 / 11,338,669
TOTAL LIABILITIES AND EQUITY / 23,115,568 / 17,230,947 / 27,603,121 / 20,594,008
0 / 0 / 0 / 0
Net Assets Per Share / 18 / 0.290 / 0.276 / 0.305 / 0.277
The Board of directors approved these financials statement for issue on _4_November 2010______
______/ ______
Chairman / Director
SALALAH MILLS COMPANY (S.A.O.G)
Salalah – Sultanate of Oman
STATEMENT OF INCOME
FOR THE PERIOD ENDED SEP 30TH, 2010
EXHIBIT – B
Parent Company / Consolidated
Note / 30-09-10 / 30-09-09 / 30-09-10 / 30-09-09
RO. / RO. / RO. / RO.
Revenue / 17,285,730 / 17,128,994 / 18,956,476 / 20,400,594
Cost of revenue / 19 / (14,322,176) / (13,945,670) / (14,934,690) / (16,515,873)
gross profit / 2,963,554 / 3,183,324 / 4,021,786 / 3,884,721
Administrative and general expenses / 20 / (786,008) / (664,199) / (1,103,418) / (911,508)
Selling and promotion expenses / 22 / (34,346) / (32,921) / (64,495) / (50,473)
Other Income / 23 / 83,490 / 23,698 / 99,621 / 33,865
Net financing costs / 24 / (63,375) / (98,467) / (158,260) / (218,923)
-- / -- / -- / --
Profit for the year before taxation / 2,163,315 / 2,411,435 / 2,795,234 / 2,737,682
Provision for taxation / 16 / (255,998) / (286,672) / (255,998) / ) / (286,672)
Profit for the year / 1,907,317 / 2,124,763 / 2,539,236 / 2,451,010
Basic earnings per share / 25 / 0.046 / 0.057 / 0.062 / 0.065
Profit for the year attributable to:
Equity holders of parent company / 2,311,745 / 2,333,562
Minority interest / 227,491 / 117,448
2,539,236 / 2,451,010
THE ACCOMPANYING NOTES 1 TO 31 FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
4
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITYFOR THE YEAR ENDED SEP 30, 2010
EXHIBIT - C
Share capital / Share Premium / Legal reserve / general reserve / Proposed dividend / Retained earnings / Minority interest / Total
Parent Company: / RO. / RO. / RO. / RO. / RO. / RO. / RO. / RO.
Shareholders' equity as of 01/01/2009 / 3,750,000 / 597,040 / 773,009 / 771,139 / - / 3,079,924 / -- / 8,971,112
Movement during 2009:
Share Premium / - / - / - / - / - / - / - / -
Profit for the year - Exhibit - B / -- / -- / -- / -- / -- / 2,999,457 / 2,999,457
Dividend paid / -- / -- / -- / -- / - / (750,000) / -- / (750,000)
Directors Remuneration / (2,349) / (2,349)
Proposed dividend / -- / -- / -- / -- / -- / -- / -- / -
Transfers / -- / -- / 299,945 / 299,945 / -- / (599,890) / -- / 0
Shareholders' equity as of Jan 1, 2010 - Exhibit - A / 3,750,000 / 597,040 / 1,072,954 / 1,071,084 / - / 4,727,142 / - / 11,218,220
Movement during 2010 / 375,000 / (375,000)
Profit for the year - Exhibit – B / -- / -- / -- / -- / 1,907,317 / 1,907,317
Dividend paid / -- / -- / -- / - / (1,125,000) / -- / (1,125,000)
Proposed Dividend / 0
Director Remuneration / (54,550) / (54,550)
Transfers / -- / -- / -- / -- / -- / -- / -- / --
Shareholders' equity as of 30th Sep 2010 - Exhibit - A / 4,125,000 / 222,040 / 1,072,954 / 1,071,084 / 0 / 5,454,909 / 0 / 11,945,987
Consolidated:
Shareholders' equity as of 01/01/2009 / 3,750,000 / 597,040 / 773,009 / 771,139 / - / 2,930,514 / 815,957 / 9,637,659
Movement during 2009: / -
Right Issue / - / - / - / - / - / - / - / -
Share Premium / - / - / - / - / - / - / - / -
Profit for the year - Exhibit - B / -- / -- / -- / -- / 3,365,529 / 205,915 / 3,571,444
Dividend paid / - / - / - / - / - / (750,000) / -- / (750,000)
Directors Remuneration / - / - / - / - / - / (2,349) / - / - (2,349)
Minority capital Investment / - / - / - / - / - / - / - / -
Transfers / -- / -- / 299,945 / 299,945 / -- / (599,890) / -- / -
Shareholders' equity as of Dec 31, 2010 - Exhibit - A / 3,750,000 / 597,040 / 1,072,954 / 1,071,084 / - / 4,943,804 / 1,021,872 / 12,456,754
Movement during 2010: / - / - / -
Additional Shares issued / 375,000 / ( 375,000) / 360,000 / 360,000
Profit for the year - Exhibit – B / - / - / -- / -- / -- / 2,311,745 / 227,491 / 2,539,236
Dividend paid / - / - / - / - / - / (1,125,000) / - / - (1,125,000)
Proposed Dividend / - / - / - / - / 0 / 0 / -
Director Remuneration / - / - / (54,550) / - ( 54,550)
Transfers / -- / -- / -- / -- / -- / -- / -- / --
Shareholders' equity as of 30th Sep 2010 - Exhibit - A / 4,125,000 / 222,040 / 1,072,954 / 1,071,084 / 0 / 6,075,999 / 1,609,363 / 14,176,441
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SALALAH MILLS CO (SAOG)Salalah – Sultanate of Oman
STATEMENT OF CASH FLOW AS OF SEP 30TH, 2010
EXHIBIT - D
Parent Company / Consolidated
30-09-10 / 30-09-09 / 30-09-10 / 30-09-09
RO. / RO. / RO. / RO.
Operating ACTIVITIES:
Cash receipts from customers / 17,238,740 / 17,554,340 / 21,209,192 / 20,948,353
Cash paid to suppliers and employees / (19,068,250) / (12,308,831) / (22,481,342) / (14,893,614)
Cash from operations / (1,829,510) / 5,245,509 / (1,272,150) / 6,054,739
Dividend & Directors Remuneration / (1,179,549) / (750,000) / (1,179,549) / (750,000)
Preoperative exp / - / - / - / -
Income Tax Paid / (403,460) / (236,509) / (403,460) / (236,509)
Net financing costs / (74,658) / (101,192) / (170,372) / (218,071)
Cash flows from operating activities / (3,487,177) / 4,157,808 / (3,025,531) / 4,850,159
Investing ACTIVITIES:
Advance for Machinery / - / - / (691,873) / -
Purchase of property, plant and equipment / (1,969,905) / (1,381,192) / (2,092,699) / (1,437,310)
Purchase of investment / (133,300) / - / (133,300) / -
Investment in subsidiary / - / - / - / -
Net cash (used in) investing activities / (2,103,205) / (1,381,192) / (2,917,872) / (1,437,310)
-
Financing ACTIVITIES: / -
Shares issued / - / 1,000,000 / -
Minority interest / - / - / -
Short term loans / 2,000,075 / (2,880,236) / 2,000,075 / (2,770,236)
Long Term Loans / (329,529) / (294,120) / (748,367) / (708,657)
Loan to subsidiary / - / 160,000 / - / -
Margin deposit / - / - / - / -
Net cash (used in) financing activities / 1,670,546 / (3,014,356) / 2,251,708 / (3,478,893)
(3,691,711)
Net (decrease)/increase in cash and cash equivalents / (3,919,836) / (237,740) / (3,691,695) / (66,044)
Cash and cash equivalents at the beginning of the year / 4,997,210 / 1,461,031 / 5,081,763 / 1,481,348
Cash and cash equivalents at the end of the year (note 5) / 1,077,374 / 1,223,291 / 1,390,068 / 1,415,304
THE ACCOMPANYING NOTES 1 TO 31 FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
4
SALALAH MILLS COMPANY (S.A.O.G)
Salalah - Sultanate of Oman
NOTES TO THE FINANCIAL STATEMENTS
1. LEGAL STATUS AND PRINCIPAL ACTIVITIES
Salalah Mills Company SAOG ("the Parent Company") is an Omani general joint stock company registered in the Sultanate of Oman on September 25, 1995 under the commercial registration no.2/10366/4. The Parent Company is engaged in the milling of wheat and selling wheat flour, bran and feed.
The consolidated financial statements of the Company comprise the Parent Company and its subsidiary (together referred to as ‘the Group’). The details of the subsidiary set up during the period is as follows:
Share- / Country of / ProposedName of the Company / holding / incorporation / principal activities
Salalah / Macaroni / Company / Production of Macaroni Pasta and
SAOC / 64% / Oman / related food products
2. ADOPTION OF NEW REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
For the period ended Sept 30th , 2010, the Company has adopted all of the new and revised standards and interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for periods beginning of January 1, 2007.