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Energising lives. Energising Oman. 

www.voltampoman.com 

Underwriters 

PROSPECTUS 

Voltamp Energy SAOG 

(Under Transformation) 

Initial Public Offering of 25,000,000 ordinary shares 

Offer Price: RO 0.542 per share 

(Comprising a nominal value of Baisas 100, 

premium of Baisas 440 and issue expenses Baisas 2 per share) 

Issue Opens: 5th May, 2008 

Issue Closes: 3rd June, 2008 

Lead Issue Manager & Financial Advisor Co-Financial Advisor 

Collecting Banks 

Investment Management Group

PROSPECTUS 

Voltamp Energy SAOG (under transformation) 


Postal Address: P.O.Box 75, P.C: 124, 

Rusayl, Sultanate of Oman 

Tel: 24446501 

Fax: 24446502 

Initial Public Offering of 25,000,000 (twenty five million) Ordinary Shares 

Total Offer Size: RO 13.55 million 

Offer price: RO 0.542 per share 

(Comprising a nominal value of Baisas 100, premium of Baisas 440 

and Issue Expenses Baisas 2 per share) 

Lead Issue Manager & Financial Advisor 

Oman Arab Bank, 

Investment Management Group 

P.O. Box 2010, Postal Code: 112, Sultanate of Oman 

Ph: 24762399 Fax: 24762377 

Underwriters 

Oman Arab Bank SAOC Vision Investment Services Co. SAOC 

United Securities LLC Gulf Baader Capital Markets SAOC 

Co-Financial Advisor 

Ernst & Young 

PO Box: 1750, Ruwi, 112, 

Qurum, Muscat, Sultanate of Oman 

Ph: 24559599 Fax: 24566043 


Oman Arab Bank SAOC 

Bank Muscat SAOG 

Bank Dhofar SAOG 

OFFERING PERIOD 

Opening Date: May 5, 2008 

Closing Date: June 3, 2008 

Lead Issue Manager & Financial Advisor Co-Financial Advisor 



Underwriters 

The Capital Market Authority (“CMA”) assumes no responsibility for the accuracy and adequacy of the statements and 

information contained in this Prospectus nor shall 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 has been prepared in accordance with the 

requirements as prescribed by the CMA. This is an unofficial English translation of the original Prospectus prepared in 

Arabic and approved by the CMA in accordance with the Administrative Decision no. F/19/2008 dated 27/4/2008. 

1

Important Notice to Investors 

The aim of this Prospectus is to present material information that may assist investors to make 

an appropriate decision as to whether or not to invest in the securities offered. 

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 offered securities. 

The issuer entity represented by the Founders/Selling Shareholders are jointly and severally 

responsible for the integrity and adequacy of the information contained in this Prospectus and 

confirm that, according to the best of their knowledge, due diligence has been observed in 

the preparation of this Prospectus 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 

or not it would be appropriate to invest in the securities offered by taking into consideration all 

the information contained in this Prospectus in the context. Investors should not consider this 

Prospectus a recommendation by the issuer entity of the offered securities to buy the offered 

securities. Every investor shall bear the responsibility of obtaining independent professional 

advice on the investment in the offered securities and conduct his/her/its own independent 

valuation of the information and assumption contained herein using whatsoever analysis or 

projections he sees fit as to whether or not to invest in the securities offered. 

It is to be noted that no person has been authorised to make any statements or provide 

information on the Company or the offered securities other than the persons whose names 

are indicated herein. In the event that any other person makes representations or provides 

any such information it should not be taken as authorised by the issuer entity or the issue 

manager. 

2

ADDITIONAL POINTS TO BE NOTED 

This Prospectus includes relevant information that is deemed important and does not include 

any misleading information nor exclude any principal information, the omission of which may 

materially influence any investor’s decision pertaining to the investment in Shares through this 

Prospectus. All summaries of documents or provisions of documents provided in this Prospectus 

should not be relied upon as being comprehensive statements in respect of such documents 

and are only to be seen as being a brief summary of such documents. 

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. 

FORWARD-LOOKING STATEMENTS 

This Prospectus contains forward-looking statements, including statements about the Company’s 

beliefs and expectations. These future statements are based on the Company’s current plans, 

estimates and projections as well as its expectations of external conditions and events. They 

have implementable plans in place and thus have realistic expectations of achieving these. 

Forward-looking statements involve inherent risks and uncertainties and speak only as at the 

date they are made. 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 Company’s products and services; 

♦ actions of the Company’s competitors; 

♦ regulatory, legal and fiscal developments; 

♦ success of the Company’s investments and capital expenditure programs; 

♦ performance of the Omani economy; and 

♦ other factors described under "Risk Factors and Mitigants" as given in chapter 16 of this 

Prospectus. 

The Company will follow the rules and regulations of the Capital Market Authority, after it is listed 

in the Muscat Securities, and will communicate to its share holders periodically the progress of 

the new projects as mentioned in this prospectus including any changes in their plans if any. The 

Company will update the shareholders either directly from the Company or through the website 

of the Muscat Securities Market. 

3

TABLE OF CONTENTS 

4 

Page No 

IMPORTANT NOTICE TO INVESTORS ........................................................... 2 

CHAPTER 1 – Definitions ................................................................................ 5 

CHAPTER 2 – General Information on the Issue and Issuer ........................... 6 

CHAPTER 3 – Share Split and its Effect ........................................................ 13 

CHAPTER 4 – Issue Expenses .............................................................................. 15 

CHAPTER 5 – Underwriting Arrangements ................................................... 16 

CHAPTER 6 – Purpose of the Issue and Utilisation of the Proceeds ........... 17 

CHAPTER 7 – Objectives of the Company and Approvals ........................... 18 

CHAPTER 8 – Shareholding Details ............................................................... 21 

CHAPTER 9 – Market and Economic Overview ............................................ 26 

CHAPTER 10 – Description of the Company and Business Overview 

and Activities .................................................................................................. 34 

CHAPTER 11 – Summarised Historical Consolidated Financial Statements 50 

(For Financial Years 2005-2007) 

CHAPTER 12 – Summarised Prospective Consolidated Financial Statements 73 

(For Financial Years 2008-2014) 

CHAPTER 13 – Dividends Policy .................................................................... 92 

CHAPTER 14 – Valuation and Price Justification .......................................... 93 

CHAPTER 15 – Related Party Transactions .................................................. 98 

CHAPTER 16 – Risk Factors and Mitigants ................................................... 100 

CHAPTER 17 – Corporate Governance ......................................................... 105 

CHAPTER 18 – Rights and Liabilities of Shareholders ................................. 111 

CHAPTER 19 – Conditions and Procedures of the Subscription of the Shares 115 

CHAPTER 20 – Undertakings ......................................................................... 122

CHAPTER 1 

DEFINITIONS 

The Board : means the board of directors of the Company elected 

in accordance with the Articles of Association of the 

Company. 

Business Day : means any day on which commercial banks are open for 

business in the Sultanate of Oman. 

CCL : means the Commercial Companies Law of the Sultanate of 

Oman issued by Royal Decree 4/74 and the amendments 

thereto. 

Company : means Voltamp Energy S.A.O.G (under transformation). 

LLC : means Limited Liability Company 

SAOC : means Closed Omani Joint Stock Company 

SAOG : means General Omani Joint Stock Company 

Employees : employees means those employees of the Company who 

have joined the Company on or before 29 th February 2008 

and continue to be in the employment of the Company at 

the Closing Date. 

5

CHAPTER 2 

GENERAL INFORMATION ON THE ISSUE AND THE ISSUER 

Name of the Issuer: Voltamp Energy SAOG (under transformation) 

Commercial Registration No: 1262947 dated 03/08/1987 issued by the Ministry of 

Commerce & Industry 

Principal Place of Business Postal Address : P.O.Box 75, P.C 124, Rusayl, Sultanate 

of Oman Tel: 24446501 Fax: 24446502 

Company’s Duration: Unlimited 

Financial Year: Commences on the first day of January and ends on the 

thirty first day of December of each year 

Type of Shares and Voting 

Rights: 

All the Equity Shares issued by the Issuer and the entire 

equity capital of the company consist of only Ordinary 

shares and each single share carrying the right to one 

vote at the Constitutive General Meeting of the Company 

and any General Meeting of the Company including any 

Extraordinary General Meeting. 

Ordinary Shares: Equity Shares issued by the Issuer with a nominal value 

of one hundred Baisas (RO 0.100) and each share 

carrying the right to one vote at the Constitutive General 

Meeting of the Company and any General Meeting of the 

Company including any Extraordinary General Meeting. 

Authorised Share Capital of the 

Company: 

Existing Ordinary Shares 

Before the IPO: 

The Authorised share capital of the Company shall be 

RO. 10,000,000 (Rial Omani Ten Million), divided into 

100,000,000 (One Hundred Million) Ordinary Shares. 

RO 3,500,000 (Rial Omani Three Million Five Hundred 

Thousand) divided into 35,000,000 (35 Million) ordinary 

shares. 

Offered Shares: Offer of 25,000,000 (Twenty Five Million) shares that 

consists of 

1. Offer of 10 Million shares to the public selling by the 

promoters 

2. Issue of 15 Million New Ordinary Shares (after the 

completion of IPO) for public subscription by the 

Company 

3. The Company will allot 5% (1,250,000) of the offered 

shares for the Company employees and Managers 

as per the details given in this Prospectus 

6

The Issued and Paid up Caital 

after IPO: 

Par Value for the share: 100 Baisa for each share 

RO 5,000,000 (Rial Omani Five Million) dividend in to 50 

Million shares 

Restrictions on the shares: Restrictions imposed on the Promoters: 

In accordance with Article 77 of the CCL, the Promoters 

of the Company shall not withdraw from the Company 

or dispose of their Shares prior to publication of two 

Balance Sheets pertaining to two consecutive financial 

years, effective from the date of listing of the Shares on 

the Muscat Securities Market. An exception to this shall 

be the cases of assignment of the Shares amongst the 

Shareholders themselves and cases of inheritance. 

The period during which the Promoters are not 

permitted to withdraw or dispose off their Shares may 

be extended for a further one year by a decision of the 

Minister of Commerce & Industry, at the request of the 

Capital Market Authority, without prejudice to the right 

held by the Promoters to make second grade pledge on 

those Shares. 

If any defect has taken place in the procedures pertaining 

to incorporation of the Company, the party concerned 

may within a period of five years from the incorporation 

of the Company, serve notice to it for remedying such 

a defect as per article 71 of the CCL. However, if the 

Company fails to take the initiative within one month 

of such notice for necessary remedial measures, the 

person concerned may have recourse to the competent 

court to pass a decision for dissolution of the Company. 

The Promoters, members of the Board of Directors 

and the first Auditors shall be held liable severally and 

jointly for the damages arising from the dissolution of 

the Company and which are attributable to their illegal 

acts or their negligence or omission in the incorporation 

of the Company. 

Restrictions imposed on the Employees and 

Managers 

The Employees and Managers have no right to sell or 

transfer shares acquired pursuant to the IPO before six 

months. Thereafter, the Employees and the Managers 

may sell or transfer such shares without any restriction. 

7

Promoters/Selling Shareholders: The current partners/shareholders of the Company prior 

to the IPO who are offering a portion of their Shares through 

an Offer for Sale under this Prospectus to the extent of 

a maximum of 10,000,000 (Ten Million) Ordinary Shares 

out of their combined holding of 35,000,000 (Thirty Five 

Million) Ordinary Shares. Details of the number of Shares 

being offered by the Selling Shareholders are set out in 

the Chapter 7 of this Prospectus. 

Shares held by the Promoters 

after the IPO: 

25,000,000 (Twenty Five Million) Ordinary Shares i.e. 

50% of the capital after the completion of IPO. Details 

of the individual holdings are set out in the Chapter 8 of 

this Prospectus. 

Subscription Price of the Shares: Baisas 542 (Five Hundred and Forty Two) per Share 

consisting of Baisas 100 (One Hundred) nominal value, 

Baisas 440 (Four Hundred and Forty) share premium 

and Baisas 2 towards Issue Expenses. 

Ratio of Offered Shares (25 Million 

Shares) to post IPO issued and 

paid up Share Capital (50 Million 

Shares) : 

Main Purpose for which the 

proceeds of the Subscription 

would be utilised: 

50% of the Issued and Paid Up Share Capital of the 

Company. 

1) Proceeds from the Issue of New Ordinary Shares 

Issue proceeds under this category aggregating to 

RO 8,100,000 (Rial Omani Eight Million, One Hundred 

Thousand) will accrue to the Company, and will be 

utilised by the Company for financing the ongoing 

capital expenditure, for meeting its long term working 

capital requirements and investment in future strategic 

projects. 

2) Proceeds from the Offer for Sale of Existing 

Ordinary Shares 

Issue proceeds under this category aggregating to 

RO 5,400,000 (Rial Omani Five Million, Four Hundred 

Thousand) will accrue to the Selling Shareholders only 

and not to the Company. 

3) Issue Expenses Collected 

The amount of RO 50,000 (Rial Omani Fifty Thousand) 

being collected towards part of the Issue Expenses from 

the total issue will accrue to the Company. 

8

Persons Qualified to Subscribe 

for the Shares Offered: 

Permissible Level of Non-Omani 

Shareholding after Listing: 

Commencement Date of the 

Subscription: 

Closing Date of the 

Subscription: 

Subscription shall be open to Omanis, Non-Omanis, 

Individuals, Non-Indviduals, Corporate Bodies/ 

Institutions/Investment Funds/Pension Funds. 

Once the Shares are listed for trading on Muscat 

Securities Market, it will be permissible for non Omanis 

to own up to 70% of the Share Capital of the Company 

in accordance with the Law and the Memorandum & 

Articles of Association. 

May 5, 2008 

June 3, 2008 

Listing: The Shares will be listed for trading on the Muscat 

Securities Market 

First Day of Trading: The first day the Shares are traded on the Muscat 

Securities Market 

Minimum Limit for the 

Subscription under One 

Application: 

Maximum Limit for the 

Subscription under One 

Application: 

Overall Offering Split and 

Allotment Procedures: 

Individuals including Employees & Board of Managers: 

1,000 (One Thousand) Shares and in multiples of 100 

thereafter 

Non-Individuals: (Corporate Bodies/Institutions/ 

Investment Funds) 10,100 (Ten Thousand One Hundred) 

Shares and in multiples of 100 thereafter 

Individuals & Non-Individuals: (Corporate Bodies/ 

Institutions/Investment Funds) up to or equal to 10% 

of the total issue size which works out up to or equal 

to 2,500,000 (Two Million Five Hundred Thousands) 

Shares; 

Employees: maximum eligible value of shares will be 

up to 19 (nineteen) times his/her basic salary as on 29th February 2008; 

Managers: up to 50,000 (Fifty Thousand) Shares per 

Manager. Total of five managers. 

In case of over-subscription, the Offering of 25,000,000 

(Twenty Five Million) Ordinary Shares shall be split among 

the eligible investor groups, in the following portions: 

9

Overall Offering Split and 

Allotment Procedures: 

(Contd.) 

Category I – Individuals 

17,500,000 (Seventeen Million Five Hundred Thousand) 

shares, being 70% of the Offered Shares for Retail 

applicants applying for a maximum of 10,000 (Ten 

Thousand) shares. Distribution of shares shall be on 

pro-rata basis. Individual Investors shall comprise of 

only natural persons. 

Category II – Non Individual Investors 

6,250,000 (Six Million Two Hundred Fifty Thousand) 

shares, being 25% of the Offered Shares for both 

natural and juristic persons including Individual 

applicants applying for more than 10,000 shares and 

for Corporate bodies/ Institutions / Investment Funds. 

Distribution of shares will be on pro-rata basis. 

Category III – Employees and Managers 

Employees: 1,000,000 (One Million) shares, being 4% 

of the Offered Shares for employees upto a maximum 

value of 19 times of their basic salary on firm allotment 

basis. 

Managers: 250,000 (Two Hundred Fifty Thousand) 

shares, being 1% of the Offered Shares for Managers 

upto maximum of 50,000 shares for each Manager of 

five Managers on firm allotment basis. 

Any undersubcription in Category I shall be added to 

shares allocated for Category II and vice versa. Any 

undersubcription in Category III shall be added to 

Category I. 

Allotment for Foreign Nationals will be limited to a 

maximum of 70% of the total shares offered. Foreign 

Corporate Body/ Institution/ Investment Fund is defined 

as one which is not incorporated in the Sultanate of 

Oman or in any of the GCC countries. 

The final allocation on the above basis will be decided 

by the Lead Issue Manager and the Company in 

consultation with the CMA. 

Underwriting Arrangements: The issue of 25 million shares aggregating issue amount 

of RO 13.50 million is underwritten by Gulf Baader 

Capital Markets S.A.O.C, Vision Investment Services 

Co. S.A.O.C, Oman Arab Bank S.A.O.C and United 

Securities L.L.C. The details are given in Chapter 5. 

10

Basis for Undersubscribed 

Shares: 

Prohibitions with regard to the 

Applications for Subscription: 

Lead Issue Manager & Financial 

Advisor 

In case of a shortfall in subscription, the shortfall shall 

be subscribed by the Underwriters. 

The subscribers to the shares issued as mentioned 

hereunder shall not be permitted to participate in the 

subscription: 

1) Sole Proprietorship Establishments. Whereas, the 

owner of a Sole Proprietorship Establishment would be 

required to subscribe in his name only if he so desires. 

2) Trust Accounts. Whereas, the Brokerage Companies 

would be required to address the Customers for the 

subscription in their personal names. 

3) Multiple Applications for the subscription. Whereas, 

it is prohibited for any person to submit more than one 

application for subscription in his personal name. 

4) Applications made under joint names, including the 

applications made in the name of legal heirs. Whereas, 

they or their legal attorney would be required to apply 

in their personal names. 

All such applications shall be rejected without contacting 

the applicant. 



P.O. Box 2010, PC 112, Ruwi 

Sultanate of Oman 

Email: corporatefinance@oabinvest.com 

Co-Financial Advisor: Ernst &Young 

P.O. Box: 1750, Ruwi, PC 112, 

Ernst & Young Building, 

Qurum, Muscat, Sultanate of Oman 

www.ey.com/me 

Reporting Accountants: KPMG 

PO Box 641 

P.C. 112, Ruwi 


11

Statutory Auditors: Statutory Auditors: (2006 & 2007) 

KPMG 

P.O. Box 641 

PC 112, Ruwi 


For the year: 2005 

Mazars Chartered Accountants & Co. LLC 

Muscat Gold Market Building 

P.O. Box 1092, PC 131 


Internal Auditors: BDO Jawad Habib 

P.O. Box 1176 

Ruwi, PC 112 


Legal Advisor for the IPO: Al Busaidy, Mansoor Jamal & Co., Muscat International 

Centre, Mezzanine Floor, Central Business District, Bait 

Al Falaj Street, P.O. Box 686, Ruwi, PC 112, Sultanate of 

Oman, Email: mj-co@amjoman.com 

Legal Advisors for the 

Company 

Collecting Banks: Bank Muscat SAOG 

Bank Dhofar SAOG 


Hamdan Al Durey 

Barristers and Legal Consultants 

Central Business District, 

Building No 978, Flat No 53, 

P.O. Box 1633 PC 112, 

Ph: 24787667 Fax: 24787889, Sultanate of Oman 

Transfer and Registration Agent: Muscat Depository & Securities Registration Co. SAOC 

P.O. Box 952, PC 112, Ruwi, Sultanate of Oman 

Tel: 24814827, Fax: 24817491 

12

CHAPTER 3 

Introduction 

SHARE SPLIT AND ITS EFFECT 

The Company has split the nominal value of the shares from RO 1.000 to Baisas 100 resulting 

in splitting each share into ten shares. This chapter elaborates on the effect of this decision. It is 

recommended that each subscriber read and understand it. 

Definition of Share Split 

Share Split refers to the intention of a Company to split its existing shares to number of shares 

by reducing the nominal value of the share and increasing the number of shares without any 

effect on the total value of the Company’s paid up Capital, or the total market capitalisation of 

the shares owned in the Company, even if the total of the number of shares will increase as a 

result of this division. 

Objectives of Share Split 

The Company is of the view that Share Split will achieve the following goals: 

• Reduce the nominal value of the share making it affordable for a larger number of retail 

investors. 

• Increase liquidity by multiplying the number of shares available for trading; and 

• Facilitate a larger participation by the small/individual shareholders 

Impact of Share Split 

The decision of Share Split will not have any impact on the shareholding or the extent of each 

shareholders’ liabilities in the Company. The only direct impact is an increase in the number of 

shares. The Company considers that the benefits gained from the Share Split such as increase 

in liquidity and the shares that will be available for trading for all investors and participants in the 

Muscat Securities Market, will be in the best interest of the public. 

The following table presents the impact of Share Split for the Company according to the financial 

statement for the year ended 31 December, 2007: 

Before Split After Split 

Nominal value per Share RO 1 Baisas 100 

Number of Issued Capital Shares 3,500,000 35,000,000 

Paid up Capital RO 3,500,000 RO 3,500,000 

Shareholders Equity RO 4,362,271 RO 4,362,271 

Book Value per Share RO 1.246 Baisas 124 

Net Annual Profit RO 2,422,215 RO 2,422,215 

Earning per Share Baisas 692 Baisas 69 

13

Effect of Share Split 

The decision to split shares does not have any impact on the total market capitalisation of the 

shares. In fact, Share Split is dividing the nominal value of the share in the same percentage. 

The following is an explanation: 

Assume, 

- number of shares before split: 100 shares 

- share price in MSM on the date of the general meeting: RO 5.420 

Therefore after dividing one share into 10 shares, the result will be as follows: 

Number of shares 

Share price 

Total nominal share value 

Share Split effects on dividend: 

Before Split 

100 shares 

RO 5.420 

RO 542 

14 

After Split 

1000 shares 

RO 0.542 

RO 542 

The decision of Share Split will not affect the Company’s policy regarding dividend distribution 

or dividend ratio. The dividend distribution system in the Sultanate of Oman is based upon 

accounting dividend as a percentage of nominal paid up value per share. Thus the nominal paid 

up value per share will be Baisas 100 after split and not RO 1.000; e.g. if the Company declared 

previously (before Share Split) dividend distribution of Baisas 350 per share (35% of nominal 

value before split), and presumably the Company decided to maintain this policy, this dividend 

will be after Share Split Baisas 35 per share (35% of the nominal value after split). For instance, if 

the shareholder holds 100 shares before Share Split, dividend distribution will be as follows: 

Before Share Split After Share Split 

Number of holding shares 100 shares 1000 shares 

Nominal value of the share RO 1.000 Baisas 100 

Dividend per share Baisas 350 Baisas 35 

Dividend ratio to nominal value 35% 35% 

Total distributed dividend RO 35 RO 35

CHAPTER 4 

ISSUE EXPENSES 

The costs of the Issue are estimated at RO 276,600 (Rial Omani Two Hundred and Seventy Six 

Thousand and Six Hundred Only), which equates to approximately 2.049% of the total proceeds 

of the Offering. The breakdown of the estimated expenses is contained in the table below: 

Estimated Cost and Expenses Amount (RO) 

Issue Managers & Financial Advisors 80,000 

Collecting Banks 70,000 

Underwriting fees 40,500 

CMA & MDSRC Fees 10,100 

Legal Advisor 20,000 

Reporting Accountant 6,000 

Marketing, Advertising and Publicity 40,000 

Mailing and Postage 2,500 

Other expenses and contingencies 7,500 

Total Issue Expenditure 276,600 

Issue Expenses collected @ 2 Baisas per share (50,000) 

Difference between Estimated Expenses & the 

collection of Issue Expenses 

15 

226,600 

The costs of the Issue will be partially met out of additional subscription amount of Baisas 2 per 

share paid by the applicants towards Share Issue Expenses. 

The actual costs of the Issue less Issue Expenses collected, estimated at RO 226,600 will be 

charged to the Shareholders’ Equity of the Company.

CHAPTER 5 

UNDERWRITING ARRANGEMENTS 

In case of a shortfall in the subscription of the Offered Shares, the shortfall shall be underwritten 

as under: 

Underwriter 

Gulf Baader Capital 

Markets SAOC 

Vision Investment 

Services Co. SAOC 

Number of 

Ordinary Shares 

underwritten 

16 

Percentage shares 

underwritten 

Amount 

Underwritten@540 

Baisas per share (RO) 

9,109,000 36.44% 4,918,860 

6,747,400 26.99% 3,643,596 

Oman Arab Bank SAOC 5,000,000 20.00% 2,700,000 

United Securities LLC 4,143,600 16.57% 2,237,544 

Total 25,000,000 100.00% 13,500,000 

The Company has entered into underwriting arrangements with the above entities. The 

underwriting fee is estimated at RO 40,500 (Rial Omani Forty Thousand Five Hundred) 

In the event of any devolvement, the underwriters will subscribe to the extent of the shortfall 

as stated above, at a price of 540 Baisas per share and the Company shall not claim the issue 

expense of 2 Baisas per share, from the underwriters on such devolved shares.

CHAPTER 6 

PURPOSE OF THE ISSUE AND UTILISATION OF THE PROCEEDS 

Objectives of the Issue: 

• Raising capital for the purposes which are already mentioned in the Prospectus. 

• Listing the Company’s Shares on the MSM. 

• Partial divestment of Shares by the Selling Shareholders. 

Utilisation of the Proceeds of the Issue: 

• The Company will receive the proceeds of public subscription, amounting to RO 8,100,000 

(Rial Omani Eight Million, One Hundred Thousand) relating to the issue of the new Ordinary 

Shares, which will be utilised for setting-up a 132 kv transformers manufacturing project in Oman 

in technical collaboration of Tatung Co. of Taiwan, to fund the ongoing capital expenditure for the 

distribution transformers project in Qatar, meeting long-term working capital requirement and 

to invest in the future strategic projects. The target timetable of the Company for the use of the 

proceeds of public subscription as follows: 

Type of Expenses Amount Date 

Capital Expenditure RO 6 Million 2008/09 

Working Capital RO 2.1 Million 2008 

Total RO 8.1 Million 

• The Company will receive the proceeds of public subscription, amounting to RO 5,400,000 

(Rial Omani Five Million, Four Hundred Thousand) relating to the offer for sale of the Existing 

Ordinary Shares, which will be distributed to the Selling Shareholders through this offering, 

which is at an offer price of RO 0.540 (Baisas Five Hundred and Forty) per share excluding 

Issue Expenses. 

• The baisas 2 per share collected towards Issue Expenses will cover a portion of the expenses 

incurred by the Company in relation to the IPO. 

17

CHAPTER 7 

Overview 

OBJECTIVES OF THE COMPANY AND APPROVALS 

The Company was incorporated in the Sultanate of Oman on 3 August 1987 as a Limited Liability 

Company (“LLC”) and is currently undergoing the due process of transformation from an LLC 

into a “SAOG’’ organised under the laws of the Sultanate of Oman. The Company is the flagship 

Company of the well established and well diversified Al Anwar Holdings SAOG in the Sultanate 

of Oman. The Company has manufacturing facilities in Rusayl Industrial Area, Sultanate of Oman 

for Transformers and LV Switchgear Panels. The Company is on the fast growth path in the field 

of Electrical Products enjoying international acceptance and a preferred source status for its 

products and services in the Utilities & Oil & Gas sector throughout the MENA region. 

The Company holds the following material permits and licenses: 

1 Ministry of Commerce and Industry: Commercial 

Registration 

2 Ministry of Commerce and Industry: Industrial 

License 

3 Oman Chamber of Commerce & Industry: 

Membership 

18 

Commercial Registration 

Number: 1262947 

Date of Registration: 

3/8/1987 

Expiry date: 2/8/2012 

Registration Number: 2547 

Expiry Date: 02/08/2012 

Registration Number: 1614 


4 Ministry of Environment & Climate Affairs : License License Number: 3674 


ISO 9001:2000 Certification 

The Company holds an ISO 9001:2000 Certification for marketing, design, manufacturing, testing 

and commissioning of all its products. 

Company Objectives 

The objects for which the Company is established are: 

(i) to carry on all or any of the business of purchasing, importing, generating, transmitting, 

transforming, converting, distributing, supplying, selling, exporting and dealing in electricity 

and all other forms of energy and products or services associated therewith; 

(ii) to locate, establish, construct, equip, operate, use, manage and maintain transforming, 

switching, conversion transmission and distribution facilities, cables, overhead lines, 

substations, switching stations, tunnels, cable bridges, link boxes, telecommunications stations, 

masts, aerials and dishes, fibre optic circuits, satellites and satellite microwave connections, 

heat pumps, plant and equipment used for combined heat and power schemes;

(iii) to acquire (whether by usufruct, lease, concession, grant, or otherwise) establish, develop, 

exploit, operate and maintain land, any estates in land, which may seem to the Company 

capable or possibly capable of affording or facilitating the purchase, transmission, 

transformation, conversion, supply distribution, generation, development, production 

or manufacture of electricity or any other forms of energy in accordance with the laws of 

Oman; 

(iv) to carry on all or any of the business of designers, developers, manufacturers, constructors, 

installers, operators, users, inspectors, testers, maintainers, repairers, servicers, suppliers, 

distributors, importers and exporters of and dealers in cables, wires, meters, pylons, tracks, 

rails, pipelines, and any other plant, apparatus, equipment, systems and things used in 

connection with the transmission, transformation, conversion, supply, distribution, control 

and generation of electricity or any other forms of energy; 

(v) to provide or procure the provision of such facilities and services as may be necessary or 

desirable to forecast electricity/energy demand and to satisfy such demand; 

vi) to appoint and enter into agreements or arrangements with any person to represent the 

Company or any other organisation or person at meetings of local, national and international 

organisations and bodies concerned with activities connected or associated with any of 

the businesses or activities of the Company and to provide services of all kinds to such 

organisations and bodies; 

vii) to carry on all or any of the business of and provide services associated with, engineers 

(including without limitation, electrical, mechanical, heating, ventilation, civil, chemical, 

telecommunications and gas engineers), mechanics, technicians, draftsmen, designers, 

surveyors, architects and builders for achievement of the Company’s abovementioned 

objects in compliance with the prevailing laws; 

Resolutions Passed 

The Shareholders of the Company unanimously passed the following resolutions in their meetings 

held on 10 th December 2007 and 24 th February 2008. 

1. Approved the proposal for conversion of the Company from an LLC to an SAOG as per the 

provisions of the CCL. 

2. Approved the new Authorised Share Capital of the Company which would be RO 10,000,000 

(Rial Omani Ten Million) and the Issued Share Capital of RO 5,000,000 (Rial Omani Five 

Million) divided into 50,000,000 (Rial Omani Fifty Million) Ordinary Shares of 100 Baisas each 

(RO 0.100). 

3. Approved the transformation as a part of the process of selling/issuing the Offered Shares 

to the public through an IPO which would comprise of two (2) components:- 

i) Offer for sale of 10,000,000 (ten million) Ordinary Shares of face value Baisas. 100 each 

at an issue price of Baisas 542 per share to the public by the existing Shareholders 

(Promoters). 

ii) Fresh issue of 15,000,000 (fifteen million) new Ordinary Shares by the Company, to the 

public of face value Baisas 100 each at an issue price of Baisas. 542 per share. 

19

iii) Out of the total 25,000,000 (twenty five million) Shares which would be offered to 

the public, up to 1,250,000 (one million two hundred fifty thousand) Shares would be 

reserved for the Managers and the Employees of the Company. 

4. Approved that post IPO, the current shareholders (Promoters) would hold 50% of the issued 

share capital of the Company and the public including the Employees and the Managers 

would hold the remaining 50%. 

5. Approved the consent of the current shareholders’ in the LLC Company to offer a portion of 

their Ordinary Shares to the public as part of the IPO. The number of shares to be offered by 

each of the Promoters is as shown hereunder. 

Promoter’s Name No. of shares before 

transformation 

Face value Bz 100 

20 

No. of Shares to be 

Offered For Sale 

Face value Bz 100 

Al Anwar Holdings SAOG 20,097,000 5,742,000 

SABCO LLC 7,451,500 2,129,000 

Mr. Mushtaq bin Abdullah bin Jaffer 3,160,500 903,000 

H.H. Seyyid Shihab bin Tariq Al Said 2,597,000 742,000 

Mr. Mohammed bin Abdul Rasool Al Jamali 1,130,500 323,000 

Dr. Ali bin Jaffar bin Mohammed 563,500 161,000 

Total 35,000,000 10,000,000 

6. Approved to form a constitutive committee consisting of the following members: 

i) Mr. Qais bin Mohamed Al Yousef, Chairman 

ii) Mr. Abdulredha bin Mustafa Sultan, Director 

iii) Mr. Saibal Sen, Director 

iv) Mr. Sebastian Manavalan, Director 

v) Mr. Krishna Kumar Gupta, Director 

The above committee is authorised to do all such acts and deeds required for the IPO 

such that the IPO shall be in compliance with statutory and regulatory requirements and 

approvals. 

7. Approved the draft Memorandum & Articles of Association of the Company as per the 

requirements of the CCL pertaining to SAOG Companies for the submission to the competent 

authorities and their approval. 

8. Approved the appointment of Oman Arab Bank SAOC as Lead Issue Manager and authorised 

them or their representatives to complete the due diligence and all legal, financial and 

accounting matters pertaining to conversion and transformation of the Company from an 

LLC to an SAOG Company and the preparation and finalisation of the IPO documents as 

required by the concerned official bodies and also to appoint a Co-Financial Advisor. 

9. Approved the appointment of KPMG as the reporting Accountants and Al Busaidy, Mansoor 

Jamal & Co. as Legal Advisors for the IPO.

CHAPTER 8 

SHAREHOLDING DETAILS 

Promoters and Selling Shareholders of the Company (before transformation): 

Name of Shareholder Number of shares* Percentage 

Al Anwar Holdings SAOG 20,097,000 57.42% 

SABCO LLC 7,451,500 21.29% 

Mr. Mushtaq bin Abdullah bin Jaffer 3,160,500 9.03% 

H.H. Seyyid Shihab bin Tariq Al Said 2,597,000 7.42% 

Mr. Mohammed bin Abdul Rasool Al Jamali 1,130,500 3.23% 

Dr. Ali bin Jaffar bin Mohammed 563,500 1.61% 

Total 35,000,000 100% 

* after split 

Pursuant to a unanimous resolution of the Shareholders, the Share Capital of the Company 

was increased from RO 1,500,000 (Rial Omani One Million Five Hundred Thousand) to 

RO 3,500,000 (Rial Omani Three Million Five Hundred Thousand) through an issue of Bonus 

Shares of RO 2,000,000 (Rial Omani Two Million) to the Promoters/Selling Shareholders. 

The Shares were issued by way of Bonus Shares. 

Post Offer Equity Structure: 

The Public shareholding and the minimum Promoters’/Selling Shareholders’ shareholding 

after the IPO is envisaged as under: 

Sl. 

No 

Promoter/Selling 

Shareholder and Public 

1. Al Anwar Holdings SAOG 

2. SABCO LLC 

3. 

4. 

5. 

Mr. Mushtaq bin Abdullah 

bin Jaffer 

H.H. Seyyid Shihab 

bin Tariq Al Said 

Mr. Mohammed bin 

Abdul Rasool Al Jamali 

Nationality No. of 

Ordinary 

Shares 

Omani 

Company 

Omani 

Company 

21 

Nominal 

Value by RO 

Ratio to 

Capital 

14,355,000 1,435,500 28.71% 

5,322,500 532,250 10.65% 

Omani 2,257,500 225,750 4.52% 

Omani 1,855,000 185,500 3.71% 

Omani 807,500 80,750 1.62% 

6. Dr. Ali bin Jaffar bin Mohammed Omani 402,500 40,250 0.81% 

7. 

Public (including Employees 

and Managers) 

Omani / 

Non Omani 

25,000,000 2,500,000 50.00% 

Total 50,000,000 5,000,000 100%

Promoters’ Voting Rights 

Pursuant to the IPO and conversion into a Public Joint Stock Omani Company, the issued and 

paid-up share capital of the Company will be RO 5,000,000 (Rial Omani Five Million) divided into 

50,000,000 (fifty million) Ordinary Shares with a nominal value of One Hundred Baizas each (RO 

0.100). Each single share will carry the right to one vote at the Constitutive General Meeting of the 

Company and any General Meeting of the Company including any Extraordinary General Meeting. 

The Promoters and Selling Shareholders will hold 25,000,000 (twenty five million) Ordinary Shares 

which will have one vote per share, the same as other Ordinary Shares issued to the public. The 

Promoters and the Selling Shareholders will effectively have 50% of the voting rights. 

Restrictions imposed on the Promoters: 

In accordance with Article 77 of the CCL, the Promoters of the Company shall not withdraw from 

the Company or dispose of their Shares prior to publication of two Balance Sheets pertaining 

to two consecutive financial years, effective from the date of listing of the Shares on the Muscat 

Securities Market. An exception to this shall be the cases of assignment of the Shares amongst 

the Shareholders themselves and cases of inheritance. The period during which the –Promoters 

are not permitted to withdraw or dispose of their Shares may be extended for a further one 

year by a decision of the Minister of Commerce & Industry, at the request of the Capital Market 

Authority, without prejudice to the right held by the Promoters to make second grade pledge on 

those Shares. 

If any defect has taken place in the procedures pertaining to incorporation of the Company, the 

party concerned may within a period of five years from the incorporation of the Company, serve 

notice to it for remedying such a defect as per article 71 of the CCL. However, if the Company 

fails to take the initiative within one month of such notice for necessary remedial measures, the 

person concerned may have recourse to the competent court to pass a decision for dissolution 

of the Company. The Promoters, members of the Board of Directors and the first Auditors shall 

be held liable severally and jointly for the damages arising from the dissolution of the Company 

and which are attributable to their illegal acts or their negligence or omission in the incorporation 


Brief profile of the Main Promoters: 

AL ANWAR HOLDINGS SAOG 

Al Anwar Holdings SAOG is establised in 1994 by a group of prominent institutions and business 

houses. Al Anwar was instrumental in pioneering industrial development in Oman in various 

industrial segments including Transformers and Switchgears. 

Al Anwar has promoted, nurtured, created and shared wealth with the investing populace of this 

country in the past. In its current business model with a well diversified and geographically dispersed 

investments in industrial and non-industrial sectors such as financial services and insurance. 

Al Anwar has invested in several companies of repute. Some of Al Anwar’s current and past 

investments include: National Aluminum Products Co SAOG, Al Anwar Ceramic Tiles SAOG, Al 

Maha Ceramic Tiles SAOC, Falcon Insurance SAOC and Taageer Finance Co SAOG. 

22

Board of Directors: 

SL. No Name of the Director Independent/Non 

Indepedent 

23 

Position 

1 Brig. Masoud Humaid Al Harthy Independent Chairman 

2 Mr. Qais Mohammed Musa Al Yousef Independent Dy. Chairman 

3 Mr. Shabir Musa A. Al Yousef Independent Director 

4 Mr. Abdulredha Mustafa Sultan Independent Director 

5 Mr. Nawwaf Ghubash Ahmed Al Merri Independent Director 

6 Mr. Hamed Rashid Al Dhaheri Independent Director 

7 Mr. Mohamed A. M. Al Khonji Independent Director 

AL ANWAR HOLDINGS SAOG 

SHAREHOLDERS HOLDING 1% AND MORE AS ON 31 MARCH 08 

Sl. No. Name No.of shares % 

1 Fincorp Investment Co.LLC 22,574,290 25.49% 

2 Financial Services Co. Trust-Gulf 17,995,800 20.32% 

3 Al Khonji Investment LLC 7,000,000 7.91% 

4 Mohammed & Ahmed Al Khonji Co 4,457,470 5.03% 

5 Mohamed Hafedh Ali Dhahab 3,005,490 3.39% 

6 Oman Arab Bank- Asset Mgt-Trust Gulf 1,050,351 1.19% 

7 Oman Construction Co. LLC 889, 295 1.00% 

8 Others 31,577,304 35.66% 

Total 88,550, 000 100% 

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. 

SABCO LLC / SABCO Group 

Established during the early Renaissance years of the 70s with a capital of RO 500,000, SABCO 

Group has grown into an integrated investment, commercial, industrial and service organisation 

to day. It is registered with the Ministry of Industry and Commerce and also the Oman Chamber 

of Commerce. The SABCO group has more than 100 employees today. 

SABCO group has made its presence in the field of services, manufacturing, real estate, 

contracting, distribution and oil and gas and security and defence through Direct and Associate 

Businesses.

SABCO Commercial Centre, Voltamp Manufacturing Company LLC (Presently Voltamp Energy 

SAOG (under transformation), National Mineral Water Co. SAOG and Oman Marketing and 

Services Company deserve special mention among the group companies of SABCO Group. 

Shareholders of SABCO. 

a. Sayyid Badr Bin Hamad Bin Homood Al Bu Said – Secretary General - Ministry of Foreign 

Affairs (Rank of a minister) 

b. Sayyid Khalid Bin Hamd Bin Hamood Al Bu Said – Chairman of SABCO Group and Al Ahli 

Bank SAOG. 

c. Sayyid Aymen Bin Hamad Bin Hamood Al Bu Said – Vice Chairman of SABCO Group. 

d. Zawan Bint Hamad Suleiman Al Nabhani 

e. Sayyida Waffa Bint Hamad Al Nu Said. 

Direct Businesses 

Sabco LLC: A holding company involved in private and public sector project development 

and representation of world renowned companies. 

Oman Perfumery LLC / Amouage Limited – The House of Amouage : Manufacturer, 

International distributor and retailer of luxury “Amouage” perfumes, home fragrances, skincare 

and accessories . The website is www.amouage.com 

SABCO Commercial Centre: Oman’s pioneering boutique shopping mall opened in 1984. 

SABCO Art LLC / SABCO Press LLC: A full service communication and entertainment 

solutions provider. www.sabcoart.com 

Oman Expo LLC: A pioneer in Oman’s events industry organising diversified exhibitions, 

events and conferences. The website is www.omanexpo.com 

Al Hail Investments LLC : A property development and Asset Management Company. The 

website is www.alhailinvestments.com 

Sabco Media SAOC : A media company which owns, manages and operates Radio, TV and 

other media related activities. 

MUSHTAQ ABDULLAH JAFFER AL SALEH 

v Born in 1951 

v Master of International Politics, U.L.B. Brussels, Belgium 

v His Majesty The Sultan conferred upon him First Order of Al-Nouman Decoration in 1990 

v Languages: Fluent in Arabic, English and French 

Official Profile: 

v Joined The Ministry of Foreign Affaires in 1974. Served and promoted to several positions till 

appointed Ambassador Extraordinary and Plenipotentiary to Djibouti in 1977, Japan in 1980, 

Algeria in 1983 and China in 1987 

v Upon the request of GCC, The Government of Oman seconded him to serve as the very first 

Ambassador Extraordinary & Plenipotentiary of GCC to the European Union (1992-1996) 

24

v Opted for an early retirement plan in 2002 

v Appointed in 1998 One of the Five Representatives, representing Oman in the newly created 

GCC Consultative Council for a term of three years 

v Re-appointed for second term in 2001 

Business Profile: 

Participated and chaired several renowned companies listed on Muscat Securities Market (1996- 

2005), mainly: 

v Chairman of Board of Directors of Oman Orix Leasing 

v Vice Chairman of Board of Directors of Gulf Hotels 

v Vice Chairman of Board of Directors of Commercial Bank 

v Vice Chairman of Board of Directors of Oman Carpets 

v Vice Chairman of Board of Directors of Hilton Salalah 

v Member of Board of Directors of AlKhaleej Polypropylene 

v Member of Board of Directors of Oman National Holdings 

25

CHAPTER 9 

MARKET AND ECONOMIC OVERVIEW 

With an established base in Oman and currently entering into Qatar, the Company is looking to 

diversify to cover other countries within the Gulf and the wider MENA region. 

An overview of the projected macroeconomic growth in some of the key markets in which the 

Company operates and/or expects to have a presence is shown below: 

GCC’s Nominal GDP and the Expected Growth in the GCC and MENA Region 

USD Billion 2008 2009 2010 2011 

MIDDLE EAST 1,544 1,705 1,865 2,013 

Growth 11% 10% 9% 8% 

Oman 41 43 46 49 

Growth 6% 6% 7% 7% 

Qatar 70 77 83 89 

Growth 14% 9% 8% 7% 

Saudi Arabia 400 429 460 490 

Growth 8% 7% 7% 7% 

NORTH AFRICA 513 551 588 625 

Growth 11% 7% 7% 6% 

Source: Global Insight, 2007 

Oman Economic Overview 

Total Nominal GDP 

Oman is currently witnessing a period of significant economic growth. The country’s economy 

has expanded by 10.64%, measured in Gross Domestic Product (“GDP”) terms, from 2005 to 

2007 compared to 9.29% during the preceding 3 years. As a result, nominal GDP has increased 

from RO 7.9 billion in 2002 to RO 14.6.billion in 2007 1 . This economic growth has been primarily 

driven by the contribution of petroleum activities which has increased by 47.8 % to the total GDP 

due to rising oil prices in the world markets. 

In RO Million 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

0 

1 Figures 8,000 for 2007 are preliminary 

7,000 

6,000 

5,000 

4,000 

Nominal GDP, 2002-2007 

2002 2003 2004 2005 2006 2007 

Nominal GDP Grow th 

Source: Statistical Yearbook 2007, Ministry of National Economy; www.mone.gov.om, 2008 

9,000 

26 

25% 

20% 

15% 

10% 

5% 

0%

In RO Million 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

0 

9,000 

8,000 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

Oman Economic Activities 

Source: Statistical Yearbook October 2007, Ministry of National Economy 

The contribution from non-petroleum activities rose by 18% in 2006 principally on the strength 

of the 45% growth in manufacturing, 20% in building and construction activities and 24% in 

transport, storage and communication. Oman’s non-oil exports have increased by 39% from RO 

1.1 billion in 2005 to RO 1.6 billion in the year 2006. 

Economic Drivers 

2002 2003 2004 2005 2006 2007 

2002 2003 2004 2005 2006 2007 

Petroleum Activ ities Non Petroleum Activ ities 

Oman’s long-term economic growth plans are embodied in the Vision 2020 (“Vision”) document 

which sets out the strategic goals to be achieved by the year 2020. The fundamental goals of 

the Vision are as follows: 

Ñ To develop and upgrade Omani human resources in order to cope with technological 

progress and attain international competitiveness. 

Ñ To develop a private sector capable of optimum use of human and natural resources in an 

efficient and ecologically sound way, in close collaboration with the government. 

Ñ To utilise the geo-strategic location of the Sultanate, optimise the use of its natural resources 

and promote economic diversification. 

Ñ To distribute the fruits of development among all regions and all citizens. 

Ñ To preserve, safeguard and develop the achievements accomplished in the past twenty- five 

years. 

From a planning perspective, the Government links developmental priorities and budgetary plans 

to five-year planning cycles. The current five-year plan is an important stepping-stone towards 

achieving the Vision through which the Government is seeking to achieve a GDP growth rate of 

7.4% for the period 2000-2020 2 . The Vision’s aim is that by 2020, Oman’s economy will have 

limited reliance on oil revenues and would have diversified into non-oil sectors such as natural 

gas, downstream industries and tourism. 

It is projected that by 2020, the share of oil revenues in Oman’s GDP would be around 9% 

(compared to 48% in 2006) while natural gas revenues will contribute 10% (compared to 3.6% 

in 2006) to the GDP. 

1 Ministry of National Economy 

Nominal GDP Grow th 

27 

25% 

20% 

15% 

10% 

5% 

0%

Economic Diversification 

The non-oil industrial sector’s contribution to GDP is expected to rise from the current level in 

2006 of 14.2% to 29% in 2020. This structural shift is expected to have a significant impact on 

Oman’s future economic development. To achieve these goals, the Government is focusing on 

the following economic drivers: 

Ñ Increasing Foreign Direct Investment: During the past few years, positive steps towards 

privatisation have been taken as part of the structural reform program. These steps are aimed 

at supporting the country’s development strategy and making the Omani economy more 

attractive to foreign and local investors. Some key steps that have been taken include the lifting 

of foreign direct investment-related restrictions relating to most sectors, streamlining business 

regulations and adopting a “one-stop” investment approach. The ratification of the Free 

Trade Agreement (“FTA”) with the United States in 2006 is an indication of the Government’s 

commitment to economic reform and diversification. Oman’s membership in the World Trade 

Organisation (“WTO”) in 2000 is an effort towards the liberalisation of its markets. 

Ñ Industrialisation: The industrial sector is also expected to help Oman realise its Vision 

2020. In 1994, the industrial sector accounted for only 4.3% of GDP, while today nearly 

8.5% of GDP is accounted for by this sector. Oman is planning to raise the contribution of 

manufacturing to the GDP to 15% by 2020. Currently, Muscat, Sohar and Salalah are the 

key centres of the process of industrialisation. Sohar is undergoing a huge transformation 

with around USD 12 billion worth of developments. Five major projects have been already 

announced namely Sohar Refinery Project, Sohar Methanol Project, Oman-India Fertilizer 

project, Ferro-Chrome project and Sohar Fertilizer project. Continued activity in the industrial 

sector is anticipated with the Government’s commitment to its long term target of diversifying 

away from the oil and gas sector. A key component of this diversification includes various 

proposed aluminium-related downstream projects. 

Ñ Tourism: Vision 2020 stresses the importance of diversifying the economic base of the 

country and identifies tourism as one of the important economic drivers which can help 

realise the Vision. In order for the Government to meet its long-term targets, a tourism 

growth rate of 15% to 20% per annum 3 needs to be achieved. As a step in this direction, 

the Government is enhancing the role of the private sector in projects and activities. The 

Ministry of Tourism (“MoT”), established in 2004, has already signed agreements with private 

developers for implementing 14 projects worth more than RO 6.6 billion. 

Qatar Economic Overview 

Nominal GDP 

Qatar’s economy is in a high growth phase. The nominal GDP in Qatar grew significantly by 

24.2% in 2006 after witnessing a strong growth of 33.8% in 2005 and 34.8% in 2004. In 2006, 

Qatar’s GDP per capita increased by 15.5% to reach USD 57,350, and is expected to reach USD 

68,467 by the year 2008 4 . 

Qatar’s Nominal GDP 

QR Million 2003 2004 2005 2006 

Total GDP (Million Rial Qatari) 85,663 115,512 154,564 191,909 

% Change 21.5% 34.8% 33.8% 24.2% 

Source: Annual Report 2005, 2006, Qatar Central Bank 

3 “Vision Oman 2020”, Ministry of National Economy 

4 Qatar National Bank 

28

Contribution to GDP (QR million) 

140,000 

120,000 

100,000 

80,000 

60,000 

40,000 

20,000 

Qatar’s GDP as Oil and Non-Oil Activities 

Source: Qatar Economic Review 2007, Qatar National Bank 

Economic Activities 

The oil and gas sector has grown to QR 118,707 million in 2006 from QR 92,071 million in 2005 

which is equivalent to a growth rate of 29%. The non-oil sector has increased by 17.14% in 2006 

to reach QR 73,202 million. In 2006, finance, insurance and real estate represented 21.5% of 

the total non-oil sector and manufacturing sector represented 19.3%. Building and construction 

sector has increased by 17.7% in 2006 and reached QR 10,291 million comparing to QR 8,744 

million in 2005. 

The table below provides the break down of the non-oil sector in Qatar for 2005 and 2006: 

GDP for Non-Oil Sector 

QR Million 2005 Share 2006 Share Growth 

Agriculture & Fishing 216 0.6% 233 0.3% 7.9% 

Manufacturing 13,042 20.9% 14,098 19.3% 8.1% 

Electricity & Water 2,209 3.5% 2,424 3.3% 9.7% 

Building & Construction 8,744 14.0% 10,291 14.1% 17.7% 

Trade, Rest, & Hotels 6,869 11.0% 7,616 10.4% 10.9% 

Transport & Communication 5,114 8.2% 5,612 7.7% 9.7% 

Finance, Ins. & Real Estate 14,785 23.7% 15,760 21.5% 6.6% 

Other Services 11,514 18.4% 17,168 23.5% 49.1% 

Total 62,493 100.0% 73,202 100.0% 17.1% 

Source: Qatar Economic Review 2007, Qatar National Bank 

Economic Drivers 

- 

2003 2004 2005 2006 

The main drivers that contribute to Qatar’s strong economic performance are highlighted 

below: 

Ñ Qatar’s oil production averaged 800,000 bpd 5 during the first half of 2007. Qatar’s oil 

production increased by 31,000 bpd during the year 2006, to average 810,000 bpd, 

compared to an average of 779,000 bpd produced during 2005. 

5 Barrel per day 

Oil & Gas sector Non-oil sector 

29

Ñ Qatar’s exports have increased by 32.2% in 2006, to reach QR 123.9 billion. The oil and 

gas exports reached QR 111.2 billion of which 57% is accounted for by oil exports and the 

balance 43% by gas exports. 

Ñ Qatar’s oil price averaged USD 61.1 during the first half of 2007. In 2006, oil price has 

increased by 21.7% to reach USD 62.9 compared to USD 51.7 in 2005. 

Ñ The population in Qatar was 522,023 as per the 1997 census, and has grown in 2004 by 

43% to reach 744,029 according to the 2004 census. 

Ñ The total assets of Qatari banks have increased by 46.7% in 2006 to reach QR 167.6 billion, 

and their net profits increased by 28.9% to reach QR 5,523 million in the same year. 

Ñ Many development projects in sectors such as infrastructure, health, education and tourism 

have further contributed to the economic performance. Mega projects are undergoing 

development: 

- Infrastructure: the New Doha International Airport project is estimated to cost USD 2.5 

billion and will be completed in three phases (2009, 2012 and 2015). Several roads and 

expressways projects are under implementation. Amongst the major road projects is the 

Qatar-Bahrain Bridge with an estimated value of USD 2 billion. 

- Gas and LNG 6 : Al-Khaleej Gulf Project, the Dolphin project and Kuwait-Qatar gas supply 

project are expected to enhance Qatar’s gas production capabilities and increase gas sales 

to the domestic consumers and gas export market. RasGas LNG 3,4 and 5, RasGas LNG 

6 and 7 Qatargas II and III projects are aimed at enhancing the production and export of 

LNG. 

- Leisure and tourism: the Pearl of the Gulf project, estimated at USD 2.5 billion, is a manmade 

island which is expected to include over 7,500 dwelling units, 3 luxury hotels and 

entertainment centres, restaurants and parks. The project master plan focuses on the 

creation of new hotels and tourist attractions, and it is designed to develop a tourism base 

of 1.4 million by 2010. The total additional spending is expected at USD 15 billion. 

- Healthcare: Hamad Medical City project is estimated to cost around USD 0.4 billion and 

will include a 300-bed unit, a dialysis unit, medical staff accommodation and laboratories. 

Hamad Southern Area Hospital estimated to cost USD 57 million will include 200-bed 

facility. The USD 26 million Cardiology Hospital which comprises of a 110-bed facility is 

being developed at Rumailah. 

Industry Information 

Power Industry in the GCC 

The power and utility sector in all GCC countries is witnessing significant growth. The current 

economic development, increasing industrial capacity and population growth is outstripping 

demand for electricity in the region. According to the World Energy Council, an additional 100 

gigawatts of power generation capacity would be needed by 2020, which is projected to cost an 

estimated USD 150 billion. 

6 Liquefied Natural Gas 

30

The current GCC power capacity is illustrated in the following graph: 

Kuw ait 

Qatar 

Saudi Arabia 

Bahrain 

Oman 

UAE 

Source: The Power of Watt, ABQ Zawya Ltd, 2007 

Present GCC Power Capacity 

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 

The future GCC power capacity is illustrated in the following graph: 

Kuw ait 

Qatar 

Saudi Arabia 

Bahrain 

Oman 

UAE 

Source: The Power of Watt, ABQ Zawya Ltd, 2007 

Market Demand for Transformers 

Future GCC Power Capacity 

The high demand for power has resulted in a significant increase in demand for power 

transformers. During 2006, the market demand for power transformers in the MENA region was 

32,595 MVA (Megavolt Ampere). Oman represented 8% of the total MENA demand; KSA has 

the biggest share of 19%, Qatar 6%, UAE 15%, Kuwait 6% and Bahrain 2%. At present, more 

than 90% of the transformer demand in the GCC is met by imports. This represents a significant 

business potential for existing players to replace imported products. 

31 

MW 

- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 

MW 

Installed Capacity Additional Capacity

The power transformer market demand for 2006 is illustrated in the following graph: 

E g ypt 

1,525 

S u dan 

5 20 

Transformer Market Size, MVA 

T urke y 

2 ,4 00 

S yria 

Source: Feasibility Study for Power Transformers, A. F. Ferguson & Co., 2007 

The power transformer market for the MENA region is projected to reach 75,080 MVA (Megavolt 

Ampere) in 2012 as per the following graph: 

MVA 

18,000 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

- 

Saudi Arabia 

Power Transformer Demand Forecast 2012 

UAE 

Iraq 

Oman 


6 00 

Jorda n 

64 0 

Qatar 

Iraq 

3,41 5 

Kuwait 

K S A 

6,3 75 

It is this significant growth in the demand for power transformer that the Company endeavours 

to capture with its new projects in Oman and Qatar. 

32 

K uw ait 

1,965 

Egypt 

B a hrain 

7 55 

Q a ta r 

1,8 05 

Y em e n 

2 10 

Sudan 

Ira n 

4 ,86 0 

U A E 

4 ,9 15 

Bahrain 

O m a n 

2,610 

Yemen 

Other countries

Customer Sectors 

In 2006, 73% of the MENA demand for power transformers came from entities in the utility 

sector, 16% of demand was contributed by the oil and gas sector and 11% by heavy industry. 

The graph below illustrates the demand for the three main sectors in the GCC countries: 

Market demand 

120% 

100% 

80% 

60% 

40% 

20% 

0% 

Demand for Power Transformers by Sector 

Oman KSA Qatar UAE Kuw ait Bahrain Yemen 

Utility Oil and Gas Heav y Industry 


33

CHAPTER 10 

Overview: 

DESCRIPTION OF THE COMPANY AND 

BUSINESS OVERVIEW AND ACTIVITIES 

Established in 1987, the Voltamp Energy is the flagship company of the Al Anwar Group. It 

manufactures low voltage switchgear panels through a franchisee agreement with Schneider- 

France. 

Al Anwar Holdings 

SAOG 

0.01% 

Voltamp Transformers 

Oman LLC 

Current Ownership Structure 

57.42% 

SABCO LLC 

21.29% 

Voltamp Energy LLC 

99.99% 51% 

Voltamp Energy is to be converted from LLC to SAOG as part of the IPO process. The proposed 

ownership structure, incorporating the additional project, is expected to be as follows: 

Al Anwar 

Holdings 

SAOG 

0.01% 


Oman LLC 

Planned Ownership Structure* 

SABCO LLC 

Voltamp Energy SAOG 

(under transformation) 

99.99% 99.99% 51% 

Voltamp Power Oman 

LLC (proposed) 

The 0.01% shareholding held by Al Anwar Holdings SAOG in VTO is under trust of VE. A similar 

structure is anticipated for the shareholding structure of VPO whereby 100 shares of VPO will be 

held by VTO under trust of VE. 

34 

Other 

Shareholders 

(pre-IPO) 

28.71% 10.65% 10.65% 50.00% 

0.01% 

Other Shareholders 

21.29% 

Voltamp Manufacturing 

Company Qatar (under 

construction) 

New 

Shareholders 

(post-IPO) 

Voltamp Manufacturing 

Company Qatar (under 

construction)

Brief Profile of Subsidiaries of the Company 

Voltamp Transformers Oman LLC (“VTO”) 

Established in 1991 in collaboration with Babcock Transformers UK, VTO is a certified ISO 9001 

company that specialises in a range of power, distribution and speciality transformers. It designs 

and manufactures special multi-tap transformers for the oil & gas sector. 

VTO has a state-of-the-art manufacturing facility located in the Rusayl Industrial Area, Sultanate 

of Oman where it currently manufacturers transformers with capacities ranging from 50 kVA to 

15 MVA, 33 kV class. 

In addition to manufacturing activities, VTO also offers services relating to the erection, 

commissioning, servicing and testing of transformers and associated equipment through its 

Engineering and Services Division . 

VTO is currently looking to expand its customer base in the wider MENA region, with a primary 

focus on the GCC markets, including Kingdom of Saudi Arabia, Kuwait, United Arab Emirates, 

and Yemen. 

The Projected Financials are given in the following table 

VOLTAMP TRANSFORMERS OMAN LLC 

Projected Income statement 

for the year ended 31 December 

Income 

2008 2009 2010 2011 2012 2013 2014 

RO RO RO RO RO RO RO 

Revenue 10,700,000 13,036,000 16,426,000 17,607,825 18,938,216 20,447,628 22,173,133 

Cost of sales -7,334,450 -8,930,391 -11,340,572 -12,168,350 -13,076,518 -14,099,604 -15,272,261 

Gross profit 3,365,550 4,105,609 5,085,428 5,439,475 5,861,698 6,348,024 6,900,872 

Percentage of gross profit 31.45% 31.49% 30.96% 30.89% 30.95% 31.05% 31.12% 

Other income 141,904 90,000 102,000 107,400 113,205 119,445 126,154 

Expenses 

Selling, administrative 

and general 

3,507,454 4,195,609 5,187,428 5,546,875 5,974,903 6,467,469 7,027,026 

-810,679 -967,978 -1,193,688 -1,303,960 -1,387,531 -1,505,886 -1,616,551 

Profit from operations 2,696,775 3,227,631 3,993,740 4,242,915 4,587,372 4,961,583 5,410,475 

Finance charges -175,000 -175,000 -175,000 -175,000 -175,000 -175,000 -175,000 

Profit for the year before 

taxation 

2,521,775 3,052,631 3,818,740 4,067,915 4,412,372 4,786,583 5,235,475 

Taxation -299,013 -362,716 -454,649 -484,550 -525,885 -570,790 -624,657 

Net profit for the year 2,222,762.00 2,689,915.00 3,364,091.00 3,583,365.00 3,886,487.00 4,215,793.00 4,610,818.00 

Earnings per share for 

the year 

Voltamp Manufacturing Company Qatar 

2.223 2.690 3.364 3.583 3.886 4.216 4.611 

VMCQ was established in 2007 in Qatar with an initial capital of QR 16.2 million. VE owns 51% of 

VMCQ and the remainder is owned by two Qatari companies; Al-Salam International Investment 

Company LLC and Al Arkan Al Arabah, own the remaining 49%. 

35

The manufacturing of transformers at VMCQ is expected to start in July 2008 and will focus 

on manufacturing transformers as well as associated switchgear. It is expected that VMCQ will 

initially cater to the needs of the Qatar and Bahrain markets, which are currently experiencing 

significant growth. 

VMCQ will manufacture oil filled transformers up to 10 MVA / 33 kV class, dry type transformers 

up to 1.6 MVA / 11kV class and LV switchgear. The specific products will include: 

Ñ Normal transformers for utilities applications 

Ñ 3 winding and 4 winding transformers for special applications 

Ñ Transformers for industrial applications 

Ñ Transformers for VSD applications 

Ñ Transformers with tappings on both the primary and secondary windings (tappings up to 

50% earthing transformers) 

The main reasons for establishing VMCQ are: 

Ñ The economic growth in Qatar and the new mega projects are still under development, 

which offer product demand potential 

Ñ There is no local transformer manufacturer in Qatar, at present, which would allow VMCQ to 

benefit from a first mover advantage as a local manufacturer 

Ñ VTO has existing customers in Qatar, such as Qatar General Electricity and Water Corporation 

(“KAHRAMAA”), through which it has developed a strong brand name and product presence 

in the local market. It should be possible to leverage the existing customers and reputation 

to further penetrate the market while providing improved post-sales support through the 

local operation 

Ñ Qatar’s strategic position will enable Voltamp to access customers in Bahrain, Kuwait and 

KSA 

About the Consultant: 

The detailed feasibility study was undertaken by Deloitte consultants relating to VMCQ’s operation 

and a brief about the consultants is given below: 

About Deloitte 

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and 

their respective subsidiaries and affiliates.Delotte Touche Tohmatsu is an organisation of member 

firms around the world devoted to excellence in providing professional services and advice, 

focused on client service through a global strategy executed locally in nearly 150 countries. With 

access to the deep intellectual Capital of 120,000 people worldwide, Deloitte delivers services 

in four professional areas-audit, tax, consulting and financial advisory services- and serves more 

than one-half of the world’s largest companies, as well as large national enterprises, public 

institutions, locally important clients, and successful, fast-growing global growth companies. 

Services are not provided by the Deloitte Touche Tohmatsu Verein,and, for regulatory and other 

reasons, certain member firms do not provide services in all four professional areas. 

36

Key Sectors of Demand for the VMCQ Project: 

The feasibility study conducted by Deloitte highlights the following key sectors from which 

demand is expected to be generated: 

Ñ Infrastructure 

Ñ Tourism 

Ñ Healthcare 

Ñ Education 

Ñ Utilities 

Ñ Heavy Industries 

Ñ Oil & Gas 

The Projected Financials for the VMCQ as per the feasibility study conducted by Deloitte 

Consultants is given below: 

VMCQ 

Projected Income Statements (2008-2014) 


2008 2009 2010 2011 2012 2013 2014 


Revenue 2,865,242.00 9,321,458.00 10,355,604.00 11,508,142.00 12,793,144.00 14,226,425.00 15,825,770.00 

Cost of sales -2,486,364 -7,575,496 -8,379,508 -9,294,590 -10,326,819 -11,141,725 -12,384,526 

Gross profit 378,878 1,745,962 1,976,096 2,213,552 2,466,325 3,084,700 3,441,244 

Percentage of gross profit 13.22% 18.73% 19.08% 19.23% 19.28% 21.68% 21.74% 

Other income 

Expenses 

Selling, administrative 

and general 

378,878 1,745,962 1,976,096 2,213,552 2,466,325 3,084,700 3,441,244 

-569,645 -933,649 -1,014,125 -1,092,424 -1,181,059 -1,288,698 -1,407,817 

Profit from operations -190,767 812,313 961,971 1,121,128 1,285,266 1,796,002 2,033,427 

Finance charges -59,028 -47,223 -41,320 -35,417 -29,514 -23,611 -17,708 

Profit for the year before 

taxation 

-249,795 765,090 920,651 1,085,711 1,255,752 1,772,391 2,015,719 

Taxation 0 0 0 0 0 0 0 

Net profit for the year -249,795.00 765,090.00 920,651.00 1,085,711.00 1,255,752.00 1,772,391.00 2,015,719.00 

Earnings per share for 

the year 

Capacity utilisation 

-0.016 0.050 0.060 0.071 0.082 0.115 0.131 

Growth 225.33% 11.09% 11.13% 11.17% 11.20% 11.24% 

37

Voltamp Power Oman LLC (Under formation) 

As part of its growth strategy, the Company is proposing to set up a new project (VPO), which will 

be located in the Sohar Industrial Estate. The project aims to enhance the Company’s product 

range by offering power transformers up to 150 MVA/132 kV class This extension of the product 

portfolio will allow the Company to further enhance its brand name in the local and regional 

power sector. 

The new project will cater to local demand as well as the wider GCC and MENA region. The 

power transformer market is growing strongly and this project provides the Company with an 

opportunity to benefit from this growth while, at the same time, providing a diversification to its 

current product portfolio. 

The location in Sohar Industrial Estate provides easy access to the industrial hub being developed 

around Sohar Port, Sohar Refinery and the aluminium smelter. In addition, Sohar Port will facilitate 

the efficient import raw materials and export transformers. VPO’s location is Sohar, near to the 

UAE, will also enable to the company to easily access the large and growing UAE transformer 

market. 

An independent project feasibility study has been completed by M/S.A.Ferguson & Co, reputed 

consultants from India, whose brief is given below and the Company’s management expects to 

progress to a more detailed planning phase in the coming months. At this stage, the initial cost 

of the project is estimated at RO 9 million and is expected to commence production by January 

2010. 

The Company has entered into a technology collaboration agreement with Tatung Co. of Taiwan 

for production of power transformers up to 150 MVA/132 kV class. Tatung is a diversified 

international company involved in the design and manufacture of a wide variety of industrial 

products. Tatung is a leader in the power and energy business and its products include power 

transformers up to 345 kV (and being expanded up to 500kV), oil-filled and dry distribution 

transformers, switchgear, copper rods, bare copper wires, telecommunication cables, and 

optical fibre cables. Tatung was founded in 1918 and is headquartered in Taipei, Taiwan. 

Profile of A Ferguson & Co. 

AFF is one of the leading firms of Chartered Accountants and Management Consultants in India. 

They have a long history of providing high quality and specialised services in most areas of 

management consultancy. 

They provide a range of specialist management consultancy services in various functions and 

sectors, drawing on resources from a large domestic and international network. With consulting 

experience of over 30 years in India, they are a pioneer and leader in several consultancy products 

and services. 

They pride themselves in not being just another ‘consultancy’ organisation. Their business 

philosophy is to add value to their client’s business by providing a solution most appropriate to 

the business context, with specific emphasis on the implementability of their recommendations. 

They believe in building long term relationships with their clients, and it is no surprise that their 

client retention rate is among the highest in the business. Further information about them can 

38

e found at http://www.afferguson.com/. The Projected Financials in the future for the Project as 

per the study conducted by the consultants A Ferguson & Co. are given below: 

Projected Income Statement for Voltamp Power Oman LLC for the period 2008-2014 

(Year ending 31st December) 


2008 2009 2010 2011 2012 2013 2014 


Revenue 0 3,010,000 9,693,000 16,169,000 21,613,000 25,341,000 

Cost of sales 0 -3,044,335.00 -7,460,384.00 -11,776,825.00 -15,401,715.00 -18,028,467.00 

Gross profit 0 -34,335 2,232,616 4,392,175 6,211,285 7,312,533 

Percentage of gross profit 0.00% -1.14% 23.03% 27.16% 28.74% 28.86% 

Other income 0 0 0 0 0 0 

Expenses 

Selling, administrative and 

general 

0 -34,335 2,232,616 4,392,175 6,211,285 7,312,533 

-358,00 -1,348,776 -1,720,852 -2,151,532 -2,697,757 -3,182,441 

Profit from operations -358,000 -1,383,111 511,764 2,240,643 3,513,528 4,130,092 

Finance charges 0 -461,000 -451,000 -515,000 -497,000 -463,000 

Profit for the year befoe 

taxation 

-358,000 -1,844,111 60,764 1,725,643 3,016,528 3,667,092 

Taxation 0 0 0 0 0 0 

Net Profit for the year -358,000 -1,844,111 60,764 1,725,643 3,016,528 3,667,092 

Earnings per share 

for the year 

Products and Services 

-0.090 -0.461 0.015 0.431 0.754 0.917 

The following section outlines the switchgear and transformer products that the Company and 

VTO respectively, manufacture and market in the region. Transformers are split into Low Power, 

Medium Power and Power categories as described below: 

Transformer Categorisation 

Category Power Range 

Low power transformers (“LPT”) 3 MVA to 15 MVA, 33 kV class 

Medium power transformers (“MPT”) 15 MVA to 50 MVA, any voltage class 

Power Transformers (“PT”) Above 50 MVA, any voltage class 


The Company is engaged in the design and manufacture of low (up to 1 kV) voltage control and 

distribution systems which primarily involves engineering, assembly and testing of LV switchgear 

products. The main products include: 

Ñ Intelligent and conventional motor control centres 

Ñ Power control centres 

Ñ Main and sub-main distribution boards 

Ñ Auto mains failure and auto transfer switch panels with PLC controls 

7 Voltamp Energy LLC, 2007 

39

Ñ Auto synchronising generator control panels 

Ñ Capacitor banks and harmonic filter panels 

Ñ Custom built control panels 

Ñ Feeder pillars and metering panels 

The Company has established a strong market in Oman with major clients such as Petroleum 

Development Oman (“PDO”), the Ministry of Housing, Electricity and Water and Oman Refinery 

Company. 

Voltamp Transformers Oman LLC 

VTO is engaged in the manufacturing and supply of oil filled transformers in the following 

categories: 

Ñ Distribution transformers from 50 kVA to 3,000 kVA/ 33 kV class 

Ñ Low Power transformers up to 15 MVA/ 33 kV class 

Ñ Earthing transformers 

Ñ Special transformers with multi-tap construction 

The following graph illustrates the different types of product and their respective share based on 

sales in 2007: 

Non-Standard 

67% 

Sales by Products Type 

The graph highlights that almost 67% of VTO’s sales is in the non standard segment. This is a 

key strength as it allows VTO to operate in a niche market which offers higher margins as well as 

allowing it to differentiate itself from competition. 

In addition to its manufacturing capability, VTO provides engineering and maintenance services 

as detailed below: 

Ñ Maintenance contracts which include examination of transformers, cleaning of brushings, 

annual oil sampling, transformer site testing and complete transformer overhauls 

Ñ On-site assessment services for measurement of insulation and winding resistance, magnetic 

circuit test, winding ratio test, insulating oil test and all sorts of cable terminations checking 

Ñ Field supervision and testing of transformers up to 132 kV 

Ñ On-site repair which consists of electrical checks, oil quality analysis, cleaning, checking the 

function of all protection devices, overhauling the tap changer and testing the transformer 

40 

Low Power 

10% 

Standard 

23%

Ñ Factory services for ratings up to 20 MVA / 33 kV class 

Ñ Delivery of spare parts and components 

Ñ Technical support, which includes failure analysis and oil analysis 

Ñ Turnkey sub-station projects including management capabilities relating to every phase of the 

project from supply, erection and installation through to final commissioning of substations 

up to 33kV voltage class 

VTO has an agreement of exclusivity with a laboratory in Sharjah to provide technical services for 

oil analysis, insulation and other testing services. 

Customer Segments 


The Company has a 14% 7 market share in the Omani market for low voltage switchgear based 

on 2007 sales. The Company caters to the utility, oil and gas, infrastructure and industry sectors 

as indicated in the following graph: 

Source: Voltamp Energy LLC 


The Company’s Market Segments 2007 

Industry 

16% 

Utility 

25% 

Infrastructure 

6% 

VTO’s customer base covers three key industries and is spread across Oman and the wider 

MENA region: 

Ñ Utilities: VTO serves major clients in the power and energy sector such as the Ministry of 

Defence Oman, Majan Electricity Co., Mazoon Electricity Co., Rural Area Electricity Co. 

Ministry of Defence Muscat, KAHRAMAA, Sharjah Electricity & Water Authority, Dubai 

Electricity & Water Authority and PEC-Aden. 

Ñ Oil & Gas: some of VTO’s large clients include PDO, Occidental of Oman, Kuwait Oil 

Company, Joint Operations, Kuwait National Petroleum Company (“KNPC”). 

Ñ Heavy Industry: VTO provides products to industrial companies such as Sohar Aluminium, 

Sohar Refinery, Oman Gas Co. and Oman LNG. 

In addition, VTO is also focusing on the tourism sector. In this sector, VTO provides a range of 

products to major hotels as well as large, integrated tourism projects in Oman. Customers in this 

segment include the Al Bustan Palace, Shangri-La’s Barr Al Jissah Resort and The Wave. 

41 

Oil & Gas 

53%

Source: Voltamp Transformers Oman LLC 

Voltamp Manufacturing Company Qatar 

VTO Market Segments 2007 

The detailed feasibility study undertaken relating to VMCQ’s operation highlights the key sectors 

from which demand is expected to be generated: 

Ñ Infrastructure 

Ñ Tourism 

Ñ Healthcare 

Ñ Education 

Ñ Utilities 

Ñ Heavy Industries 

Ñ Oil & Gas 

As indicated earlier, Qatar’s economy is experiencing significant growth and the sectors listed 

above are key beneficiaries of the growth. 

Major Contracts 

Industry 

24% 

Infrastructure 

7% 

The tables below highlight some of the recent contract wins for the Company and VTO: 

List of contracts for the Company: 

Name of the Contract Value of the Contract (RO) Expected Completion Date 

Oman Refinery 420,000 (3-4) qtr 2008 

Al Opera 152,000 (3-4) qtr 2008 

Galfar (Sur&Buraimi Projects) 90,000 (2-3) qtr 2008 

Oman Gas 92,000 (2) qtr 2008 

Muscat Airport 100,000 (3) qtr 2008 

PDO 205,000 (2-3) qtr 2008 

Al Anwar Ceramics 40,000 (2) qtr 2008 

Switches & Boards 348,000 (2-4) qtr 2008 

42 

Utility 

44% 

Oil & Gas 

25%

List of contracts for VTO 

Name of the Contract Value of the Contract (RO) Expected Completion Date 

Bechtel-Sohar Aluminium 116,000 (3) qtr 2008 

Bahwan Engineering 1,563,000 (3) qtr 2008 

Al Tayar Co. Qatar 3,000,000 (4) qtr 2008 

L&T Oman 323,000 (2) qtr 2008 

Mazoon Electric 254,000 (3) qtr 2008 

Majan Electric Company 199,000 (4) qtr 2008 

Trade Links 238,000 (2) qtr 2008 

STS Company 187,000 (3) qtr 2008 

Al Falahi Company 186,000 (2) qtr 2008 

Rural Electric Company 156,000 (2) qtr 2008 

Omran Company 108,000 (2) qtr 2008 

During the year 2005, VTO was awarded a prestigious two -year call off contract from Qatar 

General Electricity & Water Corporation (KAHRAMAA) to supply distribution transformers worth 

QR 77,409,885. The contract was won by VTO in competition with the international manufacturers 

who also bided for this contract. 

Organisation and Management 

The diagram below describes the high-level organisational structure for the combined entity of 

the Company and VTO. 

Organisational Chart 

Voltamp Energy 

43

Managers 

The following table shows the present composition of the Board of Managers: 

Board of Managers of Voltamp Energy 

Name Representing 

Mr. Qais bin Mohamed Al Yousef - Chairman Al Anwar Holdings SAOG 

Mr. Abdulredha bin Mustafa Sultan Al Anwar Holdings SAOG 

Mr. Krishna Kumar Gupta Al Anwar Holdings SAOG 

Mr. Saibal Sen SABCO 

Mr. Sebastian Manavalan H.H.Seyyid Shihab bin Tariq Al Said 

With respect to LLC’s, the CCL does not provide for a board of directors being responsible for the 

management of LLC’s. LLC’s are, in accordance with Article 151 of the CCL, to be managed by 

one or more managers who shall be natural persons and may be from amongst the shareholders 

or non-shareholders. These managers shall be appointed for a specified or unspecified term 

in accordance with or as required by the constitutive contract and as per the terms of the 

employment contracts entered into by a manager with a company. By contrast, the management 

of Omani joint stock companies is vested in a board of directors and the number of directors and 

their term of office shall be specified in the Memorandum and Articles of Association. 

In accordance with the CCL all persons appointed to act as or hold themselves out as managers 

of an LLC must be registered with the MOCI as authorised signatories, to be seen to be managers 

in accordance with Article 151 of the CCL. 

Senior Management 

The following section highlights the key personnel in positions of senior management: 

Senior Management Team for the Group 

Name Designation 

Mr. Mohamed bin Jaffar M. Sulaiman Chief Executive Officer 

Mr. Ajitkumar Gangal General Manager-Operations 

Mr. Abdullah bin Ahmed Al Zadjali Deputy General Manager 

Mr. Basant Bhageria Finance Controller 

Mr. T. Satyanarayana VTO Works Manager 

Mr. Pronab Chakraborthy VE Works Manager 

Mr. Rajiv Hingorani ESD Manager 

Mr. Benedict Paul D’Souza Supply Chain Manager 

Mr. Aasit M. Naik Marketing Manager 

44

Mohamed bin Jaffar M. Sulaiman: Chief Executive Officer* 

Year of Joining 2004 

Education Civil and Architectural Degree - University of Miami, USA 

Member in the American Society of Civil Engineers 

Experience Eng Jaffar has 26 years of techno-commercial experience. In his current role 

as CEO, Mr Jaffar is responsible for managing the operations of VE and 

VTO. He is also on the board of VMCQ and has been closely involved in the 

development of the Qatari operation and the new project. 

Prior to joining Voltamp, Eng. Jaffar has worked for PDO where he attended 

senior management courses in Europe and the Far East. He has also held the 

positions of Chairman of the Contracting Committee at the Omani Chamber 

of Commerce and Industry and board member of Majan College. 

Eng. Jaffar is a member of the American and Omani societies of Civil 

Engineers. 

Ajitkumar Kashinath Gangal: General Manager - Operations 


Education Bachelor of Electrical Engineering 

Experience Mr Gangal has 28 years of experience in the transformers industry. He has 

experience in the area of distribution and power transformers up to 400 

kV class. As GM – Operations, Mr Gangal is responsible for all operational 

aspects of VTO. He is also a senior member of the VPO project team. 

Before joining Voltamp he worked with leading companies such as Crompton 

Greaves Ltd, India and Virginia Transformation Corporation, USA. He was 

also engaged in the revival of Ganz Transformers Plant in Hungary. 

Abdullah bin Ahmed Al Zadjali: Deputy General Manager 


Education Master of Business Administration 

Experience Mr Al Zadjali has over 28 years of experience in human resources and 

administration/finance. He is responsible for the human resources, 

administration and legal functions of the company. He is also responsible of 

handling government related and legal matters arising during shareholders’ 

meetings. 

*(Mr Mohamed Jaffar – the CEO of Voltamp has submitted his resignation from the Company for personal reasons. The 

Board while accepting Mr Jaffar’s resignation, would like to place on record their thanks and appreciation for Mohamed 

Jaffar’s efforts at Voltamp and wish him all the best in his future endeavours. Mr Jaffar will remain in the Company till 

mid June 2008, as per the terms of his contract, and the Board has already started the process to identify a suitable 

replacement. The General Manager of the Company will assume the duties of the CEO in his absence.”) 

45

Basant Bhageria: Finance Controller 


Education Chartered Accountant 

Experience Mr Bhageria has 17 years of experience in finance, accounting, taxation and 

commercial affairs within industries ranging from chemicals, textiles, food 

products to FMCG. He is currently responsible for the finance and accounting 

of VE and VTO. 

T. Satyanarayana: Works Manager - Transformers 



Experience Mr Satyanarayana is responsible for the transformer design and manufacturing 

functions. He also has responsibility for the quality management system (ISO 

9001) for his division. 

Pronab Chakraborty: Works Manager – Switchgears 


Education Bachelor of Mechanical Engineering 

Experience Mr Chakraborty has 28 years of experience in the field of electrical product 

manufacturing. Currently he is responsible of the switchgear division and all 

its related functions from budgeting, procurement, designing and engineering, 

production and sales. He is also responsible for the quality management 

system (ISO 9001 standards) for his division. 

Rajiv Hingorani: Manager - Engineering Services Division (ESD) 



Experience Mr Hingorani has over 15 years of experience in the transformer industry. 

He is currently responsible as Profit Centre head for the ESD division. 

The activities of the division include repair and maintenance services for 

transformers/substations and turnkey substation contracts for erection and 

testing and commissioning activities. 

Benedict Paul D’Souza: Supply Chain Manager 


Education Bachelor of Electrical Engineering / Masters in Business Administration 

Experience Mr D’Souza has 21 years of experience in the transformers industry. He is 

currently responsible for all activities related to supply chain management. 

46

Aasit M. Naik: Marketing Manager-Transformers 


Education Bachelor of Electrical Engineering / Diploma in Marketing and Management 

Experience Mr Naik has over 20 years of experience in marketing transformers. He has 

worked from several leading transformers manufacturing companies in India 

such as Voltamp, India, GEC, etc. Currently he is the Marketing Head for the 

transformer business 

Rewards & Recognition 

Voltamp Energy and VTO are recipients of many prestigious awards and recognition from the 

Government of Sultanate of Oman for their excellent performance in the field of manufacturing 

and exporting electrical equipments. 

The table below shows the number of times each company has been the recipient of the 

prestigious His Majesty the Sultan’s Cup for best performing industrial companies in Oman, 

awarded since 1998: 

List of Awards 

Recognition Company Issuer Date 

HM Cup Voltamp Energy LLC Ministry of Commerce and Industry 2003 

HM Cup Voltamp Transformers Oman LLC Ministry of Commerce and Industry 2003 

HM Cup Voltamp Energy LLC Ministry of Commerce and Industry 2002 




Source: VE and VTO Management, 2007 

ISO Certification 

Voltamp is ISO-certified and currently has six internal auditors in order to carry out internal 

audits. The internal audits occur twice a year. In addition, external audit every 9 to 12 months. 

The Company maintains a Quality Management System Manual and “Voltamp Procedures”, both 

of which are developed in line with the requirements of the ISO 9001:2000 Standard 

Employees 

As at 31 March 2008, the Company and its two subsidiaries employed 202 personnel comprising 

of 65 Omani Nationals (32%) and 137 expatriates (68%). The Omanisation level as at 31 st December 

2007 was 33% as against the requirement set by the Ministry of Manpower of 35% of the total 

manpower. The Company has recently recruited some of expatriate technical employees as per 

job requirement since the Company was not able to find suitable technically qualified people 

locally. The Company plans to achieve the Omanisation target by the second quarter of 2008. 

47

Employees 

600 

500 

400 

300 

200 

100 

0 

Details of Loans availed by the Company as of 31st December 2007 

Name of the Group 

Company 


SAOG (under 

transformation) 


Oman LLC 

Voltamp 

Manufacturing 

Co.WLL (Qatar) 

Major Debt Covenants: 

For the Company 

Type of Loan Amount (RO) Remarks 

No loan or bank 

borrowings outstanding 

Long term loan & bank 

borrowings: 

48 

- 

Long term loan 

RO 145,833 

bank borrowings: 

1,249,223 

Total 1,359,056 

Three Long term loans Long term loans RO 

329,670 

• To retain a minimum of 15% of net profit each year in the Company 

For its subsidiaries 

• To retain a minimum of 15% of net profit each year in the Company 

No bank borrowings 

• Obtain prior consent of the bank to pay dividend of more than 50% of the annual profit & 

such consent not to be unduly delayed unless obligations to the bank are in default. 

• Leverage to be brought down to 3.00 by 31.12.08 by retention of profits 

Land Details; 

2008 2009 2010 2011 2012 2013 2014 

Employ ees Omanisation (ex cluding VMCQ) 

The Group does not own any freehold land. However its manufacturing facilities are set-up 

on the lease lands for which lease agreements were entered into between the Company and 

the Public Establishment for Industrial Estates. 

The following are the details of lands taken on lease by the company to carry on its 

manufacturing activities: 

50% 

45% 

40% 

35% 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

Omanisation

1. Plot of land 1703 measuring 4410 square meters and the building thereon measuring 1250 

square meters located at Rusayl Industrial Estate 

2. Plot of land 249 measuring 4250 square meters located at Rusayl Industrial Estate 

3. Plot of land 92, 93, 94 measuring 5402/74 square meters located at Rusayl Industrial Estate 

Contingent Liabilities 

The contingent liabilities as per the consolidated audited accounts of the Company as on 31 st 

December 2007 are as under: 

Bonds (Surety) and Guarantees RO 1,183,276 

Letters of Credit RO 834,550 

Total RO 2,017,826 

Forward Commodity Contracts 

Forward Commodity Contracts were entered into to manage exposure to fluctuations in the price 

of copper, a key raw material. The settlement dates on open contracts were within one year from 

the balance sheet date. The aggregate equivalent local currency amount was RO 1,090,331 

(2006: 794,856) having a fair value of RO 1,028,193 

Legal Proceedings 

The Company does not have any major/material legal proceedings pending in a Court of Law in 

Oman or outside, either instituted by, or against the Company. 

Claims enforced against the Company 

There are no claims enforced against the Company including by way of invoking of performance 

guarantees or any other guarantees/bonds/encashment of retention amounts, in the last five 

years. 

Material Contracts 

The following material contracts may affect the Company’s business (other than ongoing 

execution contracts, purchase/supply contracts, employment contracts and other general 

contracts of routine nature): 

a) Term Loan/Working capital loan with lenders (banks) 

b) Lease agreements 

c) Memorandum and Articles of Association of the Company. A copy of the Memorandum 

and Articles of Association is available for perusal at the office of the Company located at 

P.O.Box 75, P.C: 124, Rusayl, Sultanate of Oman. A copy of the Memorandum and Articles 

of Association is also available from the CMA. The website is www.omancma.org 

49

CHAPTER 11 

Summarised historical consolidated financial statements for 2005-2007 


(Formerly known as Voltamp Manufacturing Company LLC) 

Summarised historical consolidated financial statements 

31 December 2005 to 2007 

50

VOLTAMP ENERGY SAOG (under transformation) 


Summarised Historical Consolidated Income Statement 

for the period ended 31 December 


52 

2007 2006 2005 

RO RO RO 

Revenue 10,693,597 7,992,619 5,471,762 

Cost of sales (7,002,719) (6,247,602) (4,281,585) 

Gross profit 3,690,878 1,745,017 1,190,177 

Other income 159,013 28,733 52,385 

Expenses 

3,849,891 1,773,750 1,242,562 

Selling, administrative and general expenses (877,602) (696,058) (579,074) 

Profit from operations 2,972,289 1,077,692 663,488 

Finance charges (201,600) (190,450) (125,714) 

Profit for the year before taxation 2,770,689 887,242 537,774 

Taxation (348,474) (100,000) (41,673) 

Net profit for the year 2,422,215 787,242 496,101 

* Earnings per share for the year 0.692 0.225 0.142 

The notes 1 to 21 form an integral part of these summarised historical consolidated financial 

statements 

* Before Split



Summarised Historical Consolidated Balance Sheet 


Assets 2007 2006 2005 

RO RO RO 

Non-current assets 

Property, plant and equipment 521,201 565,354 596,464 

Investments 666,704 - - 

Deferred tax 15,472 11,100 12,710 

Total non-current assets 1,203,377 576,454 609,174 

Current assets 

Inventories 2,564,161 2,411,179 1,124,983 

Trade and other receivables 3,453,046 3,066,359 2,017,730 

Cash in hand and at banks 86,699 3,443 4,189 

Total current assets 6,103,906 5,480,981 3,146,902 

Total assets 7,307,283 6,057,435 3,756,076 

Equity and liabilities 

Equity 

Share capital 3,500,000 1,100,000 500,000 

Legal reserve 848,395 369,330 166,667 

General reserve - 50,000 50,000 

Retained earnings 13,876 420,726 636,147 

Dividend Payable - 200,000 - 

Total equity 4,362,271 2,140,056 1,352,814 

Liabilities 

Non Current Liabilities 

Long term loan 20,833 - - 

Current liabilities 

Trade and other payables 1,549,956 1,398,439 1,192,934 

Bank borrowings 1,249,223 2,518,940 1,196,992 

Current portion of long term loan 125,000 - 13,336 

Total current liabilities 2,924,179 3,917,379 2,403,262 

Total liabilities 2,945,012 3,917,379 2,403,262 

Equity and liabilities 7,307,283 6,057,435 3,756,076 

* Net assets per share 1.246 0.611 0.386 

The notes no. 1 to 21 forms an integral part of these summarised historical consolidated financial 

statements 

* Before Split 

53



Summarised historical consolidated cash flow statement 

For the year ended 31 December 

Cash flows from operating activities 

54 

2007 2006 2005 

RO RO RO 

Cash receipts from customers 10,470,558 6,964,227 5,572,702 

Cash paid to suppliers and employees (8,045,184) (7,934,251) (4,968,343) 

Cash generated from operations 

2,425,374 (970,024) 604,359 

Interest paid (201,600) (190,451) (125,714) 

Taxation paid (120,787) (69,840) (42,918) 

Net cash flows from / (used in) operating activities 2,102,987 (1,230,315) 435,727 

Cash flows from investing activities 

Purchase of property, plant and equipment (76,333) (79,043) (98,810) 

Proceeds from sale of assets 12,558 - - 

Investment (632,072) - - 

Net cash flows from / (used in) investing activities (695,847) (79,043) (98,810) 

Cash flows from financing activities 

Term loan received 250,000 - - 

Repayment of term loans (104,167) (13,336) (155,748) 

Dividend paid (200,000) - (175,000) 

Net cash flow from / (used in) financing activities (54,167) (13,336) (330,748) 

Increase / (decrease) in cash and cash equivalents 

during the year 1,352,973 (1,322,694) 6,169 

Cash and cash equivalents at the beginning of the year (2,515,497) (1,192,803) (1,198,972) 

Cash and cash equivalents at the end of the year (1,162,524) (2,515,497) (1,192,803) 

The notes no.1 to 21 forms an integral part of these summarised historical consolidated financial 

statements



Summarised historical consolidated statement of changes in equity 

for the year ended 31 December 2005 to 2007 

Share Legal General 

Dividend 

payable / Retained 

capital reserve reserve (paid) earnings Total 

RO RO RO RO RO 

1 January 2005 500,000 166,667 50,000 160,000 155,046 1,031,713 

Net profit for the year - - - - 496,101 496,101 

Dividend paid - - - (160,000) (15,000) (175,000) 

1 January 2006 500,000 166,667 50,000 - 636,147 1,352,814 

Net profit for the year - - - - 787,242 787,242 

Transfer to Share capital 600,000 - - (600,000) - 

Transfer to legal reserve - 202,663 - - (202,663) - 

Dividend proposed - - - 200,000 (200,000) - 

1 January 2007 1,100,000 369,330 50,000 200,000 420,726 2,140,056 

Net profit for the year - - - - 2,422,215 2,422,215 

Transfer to share capital 400,000 - - - (400,000) 

Share capital under 

registration 

2,000,000 - (50,000) - (1,950,000) - 

Transfer to legal reserve - 479,065 - - (479,065) - 

Dividend paid - - - (200,000) (200,000) 

31 December 2007 3,500,000 848,395 - - 13,876 4,362,271 

The notes no. 1 to 21 forms an integral part of these summarised historical consolidated financial 

statements 

55



Notes (forming part of the summarised historical consolidated financial statements) 

1 Legal status and principal activities 

Voltamp Energy SAOG (under transformation) (“the Company”) is in the process of 

registration as a joint stock company under the Commercial Companies Law of Oman. 

The company is presently registered in the Sultanate of Oman as a Limited Liability 

Company. Voltamp Transformers Oman LLC (“the Subsidiary”), registered in the 

Sultanate of Oman, is a wholly-owned subsidiary of the Company. Voltamp Manufacturing 

Company, registered in Qatar, is 51% owned subsidiary of the Company. 

The principal activities of the Company and its Subsidiaries (“the Group”) are manufacture, 

sale and distribution of transformers, LV Switchgears and panels. The Ultimate Holding 

Company of the Group is Al Anwar Holdings SAOG (“AAH”) [formerly Al Anwar Industrial 

& Trading Co. SAOG (“AAITCO”)]. 

2 Basis of preparation 

These summarised historical consolidated financial statements have been derived from the 

audited consolidated financial statements of the Company for the years ended 31 December 

2005 to 2007. 

a) Statement of compliance 

The summarised historical consolidated financial statements have been prepared in 

accordance with International Financial Reporting Standards (“IFRS”) and the disclosure 

requirements of Commercial Companies Law of 1974, as amended. 

Adoption status of new IFRS and interpretations 

In the current year, the Group has adopted IFRS 7 Financial Instruments: Disclosures, 

which is effective for annual reporting periods beginning on or after 1 January 

2007, and the consequential amendments to IAS 1: Presentation of Financial 

Statements. 

The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand 

the disclosures provided in these financial statements regarding the Group’s financial 

instruments and management of capital. 

Four Interpretations issued by the International Financial Reporting Interpretations 

Committee are effective for the current period. These are: IFRIC 7 Applying the 

Restatement Approach under IAS 29, Financial Reporting in Hyperinflationary 

Economies; IFRIC 8 Scope of IFRS 2; IFRIC 9 Reassessment of Embedded 

Derivatives; and IFRIC 10 Interim Financial Reporting and Impairment. The adoption 

of these Interpretations has not led to any changes in the Group’s accounting 

policies. 

b) Basis of measurement 

The consolidated financial statements have been prepared on the historical cost basis 

except for: 

• forward commodity contracts are measured at fair value 

• investments at fair value through profit or loss are measured at fair value. 

56




c) Functional currency 

These consolidated financial statements are presented in Rial Omani, which is the 

Group’s functional currency. 

d) Use of estimates and judgments 

The preparation of 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 recognised in the period in which the estimate is revised and 

in any future periods affected. 

e) New standards and interpretation not yet effective 

A number of new standards, amendments to standards and interpretations are not yet 

effective for the year ended 31 December 2007, and have not been applied in preparing 

these consolidated financial statements: 

• IFRS 8 Operating Segments introduces the “management approach” to segment 

reporting. IFRS 8, which becomes mandatory for the Group’s 2009 financial statements, 

will require the disclosure of segment information based on the internal reports regularly 

reviewed by the Group’s Chief Operating Decision maker in order to assess each 

segment’s performance and to allocate resources to them. The Group does not prepare 

internal reports containing segment information and accordingly it is not expected that 

IFRS 8 will have any significant impact on the financial statements. 

• Revised IAS 23 Borrowing Costs removes the option to expense borrowing costs and 

requires that an entity capitalise borrowing costs directly attributable to the acquisition, 

construction or production of a qualifying asset as part of the cost of that asset. It 

is not expected that revised IAS 23 will have any significant impact on the financial 

statements. 

• IFRIC 11, IFRS 2 Company and Treasury Share Transactions requires a share-based 

payment arrangement in which an entity receives goods or services as consideration 

for its own equity instruments to be accounted for as an equity-settled share-based 

payment transaction, regardless of how the equity instruments are obtained. IFRIC 11 

is not expected to have any significant impact on the financial statements. 

• IFRIC 12 Service Concession Arrangements provides guidance on certain recognition 

and measurement issues that arise in accounting for public-to-private service concession 

arrangements. IFRIC 12, which becomes mandatory for the Group’s 2008 financial 

statements, is not expected to have any significant impact on the financial statement. 

• IFRIC 13 Customer Loyalty Programmes addresses the accounting by entities that 

operate, or otherwise participate in, customer loyalty programmes for their customers. 

It relates to customer loyalty programmes under which the customer can redeem credits 

for awards such as free or discounted goods or services. IFRIC 13, which becomes 

mandatory for the Group’s 2009 financial statements, is not expected to have any 

significant impact on the financial statements. 

57




e) New standards and interpretation not yet effective (continued) 

• IFRIC 14, IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements 

and their Interaction clarifies when refunds or reductions in future contributions in relation 

to defined benefit assets should be regarded as available and provides guidance on the 

impact of minimum funding requirements (MFR) on such assets. It also addresses when 

a MFR might give rise to a liability. IFRIC 14 will become mandatory for the Group’s 2008 

financial statements, is not expected to have any significant impact on the financial 

statements. 

The accounting policies set out below have been applied consistently by the Group 

entities and are consistent with those used in the previous year. 

3 Significant accounting policies 

a) Basis of consolidation 

Subsidiaries are entities controlled by the Group. Control exists when the Group has 

the power to govern the financial and operating policies of an entity so as to obtain 

benefit from its activities. In assessing control, potential voting rights that currently are 

exercisable are taken into account. The financial statements of the subsidiaries are 

included in the consolidated financial statements from the date that control commences 

until the date the control ceases. 

Intragroup balances and transactions, and any unrealised gains and losses arising 

from intra-group transactions, are eliminated in preparing the consolidated financial 

statements. 

b) Foreign currencies 

Transactions in foreign currencies are translated to Rials Omani at the foreign exchange 

rate ruling at the date of the transaction. Monetary assets and liabilities denominated in 

foreign currencies at the balance sheet date are translated to Rials Omani at the foreign 

exchange rate ruling at that date. Foreign exchange differences arising on translation 

are recognised in the income statement. The foreign currency gain or loss on monetary 

items is the difference between amortised costs in Rials Omani at the beginning of 

the period, adjusted for effective interest and payments during the period and the 

amortised costs in foreign currency translated at the exchange rate at the end of the 

period. Foreign currency differences arising on the retranslation are recognised in the 

income statement. 

c) Property, plant and equipment 

(i) Recognition and measurement 

Items of property, plant and equipment are measured at cost less accumulated 

depreciation and impairment losses. 

Costs include expenditures that are directly attributable to the acquisition of the asset. 

The cost includes any other cost that directly attributable to bringing the asset to a 

working condition for its intended use, and the costs of dismantling and removing the 

items and restoring the site on which they are located. 

58




(c) Property, plant and equipment (continued) 

(i) Recognition and measurement (continued) 

When parts of an item of property, plant and equipment have different useful lives, 

they are accounted for as separate items (major components) of property, plant and 

equipment. 

(ii) Subsequent costs 

The cost of replacing part of an item of property, plant and equipment is recognised in 

the carrying amount of an item if it is probable that future economic benefits embodied 

within the part will flow to the Group and its cost can be measured reliably. The costs of 

the day-to-day servicing of property, plant and equipment are recognised in the income 

statement as incurred. 

(iii) Depreciation 

Depreciation is recognised in the income statement on a straight-line basis over 

the estimated useful lives of each part of the property, plant and equipment. Assets 

under construction are not depreciated. The estimated useful lives for the current and 

comparative periods are as follows: 

Years 

Leasehold buildings 20 

Plant and equipment 4 – 10 

Motor vehicles 3 – 4 

Furniture, fixtures and office equipment 4 – 8 

Depreciation methods, useful lives and residual values are reassessed at the reporting 

date. 

d) Inventories 

Inventories are stated at the lower of cost and net realisable value. Net realisable 

value is the estimated selling price in the ordinary course of business, less the 

estimated costs of completion and selling expenses. The cost of inventories is 

based on the weighted average cost principle and includes expenditure incurred in 

acquiring the inventories and bringing them to their existing location and condition. 

In the case of work in progress, cost includes raw material cost only. 

e) Impairment 

(i) Financial assets 

A financial asset is considered to be impaired if objective evidence indicates that one or 

more events have had a negative effect on the estimated future cash flows of that asset. 

An impairment loss in respect of a financial asset measured at amortised cost is 

calculated as the difference between its carrying amount, and the present value of 

estimated future cash flows discounted at the original effective interest rate. 

Individually significant financial assets are tested for impairment on an individual basis. 

The remaining financial assets are assessed collectively in groups that share similar 

credit risks characteristics. 

59




e) Impairment (continues) 

(i) Financial assets (continues) 

All impairment losses are recognised in income statement. 

An impairment loss is reversed if the reversal can be related objectively to an event 

occurring after the impairment loss was recognised. For financial assets measured at 

amortised cost, the reversal is recognised in income statement. 

(ii) Non-financial assets 

The carrying amounts of the Group’s 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 asset’s recoverable amount is estimated. 

An impairment loss is recognised if the carrying amount of an asset or cash generating 

unit 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 specified to the asset. 

Impairment losses recognised 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 asset’s carrying 

amount does not exceed the carrying amount that would have been determined, net of 

depreciation or amortisation, if no impairment loss had been recognised. 

f) Employee benefits 

Payment is made to Omani Government Social Security Scheme under Royal Decree 

number 72/91 for Omani employees. Provision is made for amounts payable under the 

Oman Labour Law applicable to non-Omani employees for accumulated periods of 

service at the balance sheet date. 

g) Provisions 

A provision is recognised if, as a result of past event, the Group has a present legal or 

constructive obligation that can be estimated reliably, and it is probable that an outflow 

of economic benefits will be required to settle the obligation. 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 the risks specific to the liability. 

h) Revenue 

Revenue from sale of goods is recognised in the income statement when the significant 

risks and rewards of ownership have been transferred to the buyer. No revenue is 

recognised if there are significant uncertainties regarding recovery of the consideration 

due, associated costs or the possible return of goods. 

i) 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. 

60




j) Income tax 

Income Tax on the results of the year comprises current and deferred tax. Income 

tax is recognised in the income statement except to the extent that it relates to items 

recognised directly in equity, in which case it is recognised in equity. 

Current tax is the expected tax payable on the taxable income of the year, using tax 

rates enacted or substantially enacted at the balance sheet date, and any adjustment 

to tax payable in respect to previous years. 

Deferred tax is calculated using the balance sheet liability method, providing for 

temporary differences between the carrying amounts of assets and liabilities for 

financial reporting purposes and the amount used for taxation purposes. The amount 

of deferred tax provided is based on the expected manner of realisation or settlement 

of the carrying amount of assets and liabilities, using tax rates enacted or substantially 

enacted at the balance sheet date. 

A deferred tax asset is recognised only to the extent that it is probable that future 

taxable profits will be available against which the unused tax losses and credits can be 

utilized. Deferred tax assets are reduced to the extent that it is no longer probable that 

the related tax benefit will be realised. 

k) Earnings per share 

The Group presents basic earning per share (EPS) data for its ordinary share. Basic EPS 

is calculated by dividing the profit or loss attributable to ordinary shareholders of the 

Company by the weighted average number of ordinary shares outstanding during the 

period. 

l) Provision for warranties 

A provision for warranties is recognised when the underlying products or services 

are sold. The provision is based on historical warranty data and a weighting of all 

possible outcomes against their associated probabilities. 

m) Investments at fair value through profit or loss 

Investments are designated at fair value through profit or loss, if the Group manages 

such investments and makes purchases and sales decisions based on their fair value in 

accordance with the Group’s documented risk management or investment strategy. 

These are initially recognised at cost and subsequently measured at fair value. All related 

realised and unrealised gains and losses, and dividend received are included in the 

income statement. 

n) Dividends 

Dividends are recognised as a liability in the period in which they are declared. 

o) Determination of fair values 

A number of the Group’s accounting policies and disclosures require the determination 

of fair value, for both financial and non-financial assets and liabilities. Fair values 

have been determined for measurement and /or disclosure purposes based on the 

following methods. Where applicable, further information about the assumptions made 

in determining fair values is disclosed in the notes specific to the asset or liability. 

61




(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 

arm’s length transaction after proper marketing wherein the parties had each acted 

knowledgeably, prudently and without compulsion. The market value of items of plant 

and equipments 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 

Trade debtors are carried at amortised cost less impairment losses. An estimate is 

made for doubtful debts and impairment based on a review of all outstanding amounts 

at the year end. Bad debts are written off during the year in which they are identified. 

(iv) Forward commodity contracts 

The fair value of the forward commodity contracts is based on the listed market price. 

(p) Comparatives 

Certain comparative information has been reclassified to conform to the presentation 

adopted in these summarised historical consolidated financial statements. 

3 Property, plant and equipment 

Lease hold 

Land 

Factory 

Building 

Plant and 

equipment 

62 

Motor 

vehicles 

Furniture, 

fixture 

& office 

equipment Total 

RO RO RO RO RO RO 

Cost 

1 January 2007 47,022 441,567 899,772 82,800 288,551 1,759,715 

Additions 950 41,884 16,850 16,649 76,333 

Disposals (32,325) (28,604) (60,929) 

31 December 2007 47,022 442,517 941,656 67,325 276,596 1,775,116 

Depreciation 

1 January 2007 42,998 221,115 661,915 49,422 218,909 1,194,358 

Charge for the year 2,351 22,114 58,575 11,175 19,260 113,475 

Disposals - - - (30,008) (23,910) (53,918) 

31 December 2007 45,349 243,229 720,490 30,589 214,259 1,253,915 

Net book values 

31 December 2007 1,673 199,288 221,166 36,736 62,338 521,201 

31 December 2006 4,024 220,454 237,858 33,374 69,644 565,354




3 Property, plant and equipment (contd.) 

Lease hold 

Land 

Factory 

Building 

Plant and 

equipment 

63 

Motor 

vehicles 

Furniture, 

fixture 

& office 



Cost 

1 January 2006 42,672 438,069 888,599 59,375 258,783 1,687,498 

Additions during 

the year 

4,350 3,500 11,174 40,810 29,768 89,602 

Disposals - - - (17,385) - (17,385) 

31 December 2006 47,022 441,569 899,773 82,800 288,551 1,759,715 

Depreciation 

1 January 2006 38,404 199,176 601,358 54,804 197,303 1,091,045 


Disposals - - - (17,384) - (17,384) 

31 December 2006 42,998 221,115 661,915 49,426 218,907 1,194,361 

Net book values 

31 December 2006 4,024 220,454 237,858 33,374 69,644 565,354 

31 December 2005 4,268 238,893 287,240 4,583 61,480 596,464 

3 Property, plant and equipment (contd.) 

Lease hold 

Land 

Factory 

Building 

Plant and 

equipment 

Motor 

vehicles 

Furniture, 

fixture 

& office 



Cost 

1 January 2005 42,672 438,069 805,990 59,375 242,582 1,588,688 

Additions during 

the year 

- - 82,609 - 16,201 98,810 

31 December 2005 42,672 438,069 888,599 59,375 258,783 1,687,498 

Depreciation 

1 January 2005 34,137 177,273 550,698 47,797 178,480 988,385 


Disposals 

31 December 2005 38,404 199,177 601,359 54,791 197,303 1,091,034 

Net book values 4,268 238,892 287,240 4,584 61,480 596,464 

31 December 2005 

31 December 2004 8,535 260,796 255,292 11,578 64,102 600,303




4 Inventories and work in progress 

64 

2007 2006 2005 

RO RO RO 

Raw materials 2,246,255 2,071,009 907,191 

Work in progress 228,803 335,436 117,536 

Finished goods 247,149 125,360 100,256 

Provision for slow moving stock (158,046) (120,626) - 

5 Trade and other receivables 

2,564,161 2,411,179 1,124,983 

2007 2006 2005 

RO RO RO 

Trade receivables 3,330,586 3,009,730 1,949,938 

Less provision for doubtful debt (28,580) (43,991) (37,921) 

Amount due from a related party 900 

Advances, deposits and prepayments 150,140 100,620 105,713 

Movement of Provision for doubtful debts 

3,453,046 3,066,359 2,017,730 

Opening Provision for doubtful debts 43,991 37,921 32,232 

Add: Provided during the year 10,890 6,070 5,689 

Less: Written off during the year (20,224) 

Less: Recovery during the year (6,077) 

Closing Provision for doubtful debts 28,580 43,991 37,921 

6 Cash and cash equivalents 

2007 2006 2005 

RO RO RO 

Cash in hand 1,621 2,100 2,100 

Cash at bank : 

Current account 62,519 1,323 2,069 

Deposit account 20 20 20 

Call deposit (copper trading account) 22,539 

86,699 3,443 4,189




7 Selling, administrative and general expenses 

2007 2006 2005 

RO RO RO 

Employee costs 549,991 361,767 387,426 

Depreciation 54,900 58,955 30,085 

Communication costs 23,931 30,446 31,253 

Traveling expenses 59,587 16,530 22,218 

Legal and professional charges 37,920 40,572 28,780 

Vehicle running expenses 12,115 11,697 19,451 

Provision for doubtful debts 10,320 6,070 5,689 

Advertisement and promotion expenses 3,745 656 21,774 

Repairs and maintenance expenses 9,905 7,408 9,291 

Insurance expenses 6,722 5,885 4,955 

Printing and stationery expenses 4,927 5,037 4,961 

Other expenses 103,539 151,035 13,191 

8 Cost of sales 

65 

877,602 696,058 579,074 

2007 2006 2005 

RO RO RO 

Cost of raw materials 6,381,086 5,743,641 3,877,658 

Employee costs 379,701 304,653 247,887 

Depreciation 58,575 60,557 72,564 

Other manufacturing expenses 183,357 138,751 83,476 

9 Share capital 

7,002,719 6,247,602 4,281,585 

At 31 December 2007, the Company’s authorised, subscribed and paid-up share capital 

comprises 1,500,000 ordinary shares (2006: 1,100,000, 2005: 500,000) of RO 1 each. During 

May 2007, the Company issued a stock dividend of 400,000 shares of RO 1 each. 

At 31 December 2007, the Company has declared stock dividend of 2,000,000 shares of RO 

1 each. At 31 December 2007, whilst share capital has been increased to RO 3,500,000; the 

increase has not yet been registered with the Ministry of Commerce and Industry. 

Members of the Company who own 10% or more of the Company’s shares, whether in 

their name or through a nominee account, are as follows: 

Shareholder Holding Number of shares held 

% 2007 2006 2005 

Al Anwar Holdings SAOG 57.42 2,009,700 631,620 287,096 

SABCO LLC 21.29 745,150 234,190 106,452




10 Legal reserve 

Article 154 of the Commercial Company’s Law of 1974 requires that 10% of a company’s 

net profit be transferred to a non-distributable legal reserve until the amount of legal 

reserve becomes equal to one third of the company’s issued share capital. Hence during 

the years 2006 and 2007 a sum of 10% of net profit of the Company is transferred to 

legal reserve. 

11 Bank borrowings 

2007 2006 2005 

RO RO RO 

Bank overdraft 552,600 562,762 435,337 

Loans against trust receipts 696,623 1,956,178 601,187 

Bill discounting - - 160,468 

- - - 

Term loan 145,833 

Repayment due with in 12 months included 

in current liability 

(125,000) 

66 

1,249,223 2,518,940 1,196,992 

20,833 

The Company has borrowing facility in the amount of RO 850,000 (2006: RO 850,000, 

2005: RO 450,000) which is secured against the property, plant and equipment. The 

borrowing facility carries interest rate ranging from 7.0% to 7.5% p.a. 

The Subsidiary has borrowing facility in the amount of RO 3,820,000 (2006: RO 3,320,000, 

2005: RO 3,045,000) which is secured against property, plant and equipment of the 

Subsidiary and corporate guarantee of the Company. The borrowing facility carries 

interest rate ranging from 6.5% to 7.5% p.a. 

12 Trade and other payables 

2007 2006 2005 

RO RO RO 

Trade accounts payable 734,856 982,272 930,346 

Amount due to a related party 10,650 13,601 - 

Other payables-fair value loss on forward 

commodity contracts (refer note 19) 62,138 124,966 - 

Accrued expenses 406,896 177,600 192,747 

Other payables 3,357 

Provision for income tax 

322,059 100,000 69,841 

1,549,956 1,398,439 1,192,934 

The Group has provided for warranties mainly in respect of sale of transformers and electrical 

items, and repair jobs in the amount of RO 87,737 (2006: RO 68,125, 2005: RO 51,218) and 

RO 20,918 (2006: RO 12,961,2005:RO8,284) respectively. The provision included in accruals 

is established on estimates based on historical warranty data associated with similar products 

and services. The Group expects to incur the liability over the next one year.




13 Income tax 

The tax rate applicable to the Company taxable profit is 12% (2006 : 12%, 2005:12%) on 

taxable profit in excess of RO 30,000. The determination of taxable income for the year 

takes into account adjustments for tax purposes, which include items relating to both income 

and expense and which are based on the current understanding of the existing tax laws, 

regulations and practices. 

67 

2007 2006 2005 

Current tax 322,059 101,610 53,836 

Deferred tax 

(4,372) (1,610) (12,163) 

Income tax arrears Paid 20,787 

348,474 100,000 41,673 

Deferred tax assets arises on accounting of timing difference of depreciation and the 

provisions for bad debts and slow moving inventory and the movement is as follows: 

2007 2006 2005 

Opening balance (11,100) (12,710) (547) 

Movement during the year (4,372) 1,610 (12,163) 

Closing balance (15,472) (11,100) (12,710) 

Reconciliation of effective tax rate 

Effective 2007 2006 2005 

Rate % RO RO RO 

Profit before tax 2,770,689 887,242 537,774 

Income tax as per rates mentioned above 12 325,283 

Tax exempt revenue 

Excess (short) provision for tax 

(4,123) 

Current tax 25,539 101,610 53,836 

Deferred tax 1,775 (1,610) (12,163) 

Tax expense for the year 13 348,474 100,000 41,673 

In the case of the Company the assessments for the tax years ended 2004 to 2006 has 

not been finalised with the Secretariat General for Taxation at the Ministry of Finance. In 

the case of the Subsidiary, the income tax assessments up to the year 2002 have been 

finalized. The income tax assessment for the years 2003 to 2006 has not been finalised. The 

Management considers that additional tax liability, if any, in respect of open tax years would 

not be material to the financial position of the Group as at 31 December 2007. 

14 Employee costs 

2007 2006 2005 

RO RO RO 

Wages and salaries 662,127 548,526 508,191 

Other benefits 221,614 89,767 102,075 

Contribution to defined retirement plan 14,572 13,893 13,435 

Increase in liability for unfunded defined 31,379 14,234 11,612 

benefit retirement plan 

929,692 666,420 635,313




15 Related party transactions 

During the year the Group has entered into transactions with entities over which certain 

Directors are able to exercise significant influence. The Group also entered into transactions 

with the ultimate Holding Company and its associates. In the ordinary course of business, 

such related parties provide goods and render services to the Group. The Group also 

provides goods and renders services to such related parties. The Group considers that the 

terms of purchase, sale of goods and provision of services are comparable with those that 

could be obtained from third parties. The details are as follows: 

68 

2007 2006 2005 

RO RO RO 

Purchases 34,501 15,646 52,527 

Other Income 77,380 

Revenue 211,549 - 1,390 

16 Basic earnings per share 

Basic earning per share is calculated by dividing the net profit of the Group for the year by 

the number of shares outstanding during at year end as follows:-. 

2007 2006 2005 

Net profit for the year (RO) 2,422,215 787,242 496,101 

Number of shares outstanding at the year end (Nos.) 3,500,000 3,500,000 3,500,000 

Basic earnings per share (RO) 0.692 0.225 0.142 

During the year ended 31 December 2007, the Company issued 2,400,000 bonus shares 

of RO 1 each (2006:600,000 bonus shares of RO1 each, 2005:Nil) to the existing Members 

since the bonus issue was without consideration; the issue is treated as if it has occurred 

prior to the beginning of 2005. 

17 Net assets per share 

Net assets per share are calculated by dividing the net assets at the balance sheet date by 

the number of shares outstanding as follows: 

2007 2006 2005 

Net assets (RO) 4,362,271 2,140,056 1,352,814 

Number of shares in issue at the year end (Nos.) 3,500,000 3,500,000 3,500,000 

Net assets per share (RO) 1.246 0.611 0.386 

During the year ended 31 December 2007, the Company issued 2,400,000 bonus shares 

of RO 1 each (2006:600,000 bonus shares of RO1 each, 2005:Nil) to the existing Members 

since the bonus issue was without consideration; the issue is treated as if it has occurred 

prior to the beginning of 2005.




18 Investments 

2007 2006 2006 

RO RO RO 

At Cost 

Voltamp Manufacturing Company, Qatar (“VMCQ”) 

At fair value through profit or loss 

432,072 - - 

Portfolio investment 234,632 - - 

69 

666,704 - - 

During the year 2007, the Company has made investment in the amount of RO 432,072(2006: 

Nil, 2005: Nil) in VMCQ and holds 51% of the equity. At 31 December 2007, the VMCQ did 

not commence operations and has not prepared its financial statements. Accordingly the 

results of VMCQ have not been consolidated. 

19 Contingencies and Commitments 

2007 2006 2005 

RO RO RO 

Guarantees and Letter of credits 2,017,826 1,645,269 2,379,574 

- - 

Forward commodity contracts 

Forward commodity contracts were entered into to manage exposure to fluctuations 

in Copper price. The settlement dates on open contracts were within one year from the 

balance sheet date. The aggregate equivalent local currency amount was RO 1,090,331 

(2006: 794,856, 2005: Nil) having a fair value of RO 1,028,193 (2006: RO 669,890, 

2005: Nil). 

20 Financial instruments and financial risk management 

Financial instruments carried on the balance sheet comprise cash and bank balances, 

investments, trade and other receivables, bank borrowings and trade and other payables. 

The Group has exposure to the following risks from its use of financial instruments: 

(i) Credit risk 

(ii) Liquidity risk 

(iii) Market risk 

Credit risk 

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial 

instrument fails to meet its contractual obligations, and arises principally from the receivables 

from customers.




20 Financial instruments and financial risk management (continued) 

Credit risk (continued) 

The Group has a credit policy and management monitors exposure to credit risk on an ongoing 

basis, assesses recoverability, and makes provision for balances whose recoverability is in 

doubt. The maximum exposure to Credit risk on trade and other receivables and investments 

is limited to their carrying values at the reporting date. 

The maximum exposure to credit risk for trade receivables (including amount due from a 

related party) at the reporting date by geographic region was: 

Carrying amount 

Amount in RO 

2007 2006 2005 

RO RO RO 

Domestic 1,913,940 1,774,605 704,198 

GCC Countries 1,417,546 1,235,125 1,245,740 

Total 3,331,486 3,009,730 1,949,938 

The Group’s most significant customer accounts for RO 1,282,626 of the trade receivables 

carrying amount at 31 December 2007 (2006: RO 1,146,624, 2005: RO 298,566) 

Impairment losses 

The aging of trade receivables (including amount due from a related party) at the reporting 

date was: 

Amount in RO 

Gross Impairment Gross Impairment Gross Impairment 

2007 2007 2006 2006 2005 2005 

Not past due 2,582,250 1,450 2,092,384 - 1,286,143 - 

Past due 1-90 days 714,257 - 846,557 - 625,874 - 

Past due 91-365 days 34,979 27,130 70,789 43,991 37,921 37,921 

Liquidity risk 

3,331,486 28,580 3,009,730 43,991 1,949,938 37,921 

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as 

they fall due. The Group’s 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 

Group’s reputation. 

The Group uses local banks operating in the Sultanate of Oman to ensure that it has sufficient 

cash on demand to meet expected operational expenses and sufficient credit facilities to 

manage its liquidity risk. The Group has total credit facilities in the amount of totaling of 

RO 4.42 million from three banks. Short term loans and overdraft ranging are, on average, 

utilized for period of 15 to 30 days to bridge the gap between collections of receivables and 

settlement of product purchase bills during the middle of every month. 

70





Liquidity risk (continued) 

The maturities of Group’s undiscounted financial liabilities at reporting date is as below: 


Carrying 

amount 

RO 

71 

Contractual 

cash flows 

RO 

less than 

6 months 

RO 

6 months 

to 1 year 

RO 

1 year to 

2 years 

RO 

Non-derivative financial liabilities 

Term loan 145,833 152,669 66,992 64,648 21,029 

Bank borrowings 1,249,223 1,257,951 1,257,951 - - 

Trade and other payables 1,549,956 1,549,956 1,549,956 - - 


2,945,012 2,960,576 2,874,899 64,648 21,029 

Carrying 

amount 

RO 

Contractual 

cash flows 

RO 

less than 

6 months 

RO 

6 months 

to 1 year 

RO 

1 year to 

2 years 

RO 





3,917,379 3,950,749 3,950,749 - - 

Carrying 

amount 

RO 

Contractual 

cash flows 

RO 

less than 

6 months 

RO 

6 months 

to 1 year 

RO 

1 year to 

2 years 

RO 


Term Loan 13,366 13,366 13,366 



Market risk 

2,441,213 2,464,213 2,464,213 - - 

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest 

rates, equity prices and commodity price risk (Copper) will affect the Group’s 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 optimising 

the return on risk. In respect of commodity price risk the Group manages its exposure by 

entering into forward contracts to mitigate such risks. 

Currency risk 

The Group is exposed to foreign exchange risk on sales, purchases, receivables and 

payables arising primarily from GCC currencies and US Dollar exposures which are pegged 

to the Omani Rial.





Interest rate risk 

The Group manages its exposure to interest rate risk on term loan and short term borrowings 

by ensuring that they are on fixed rate basis. 

Fair value estimation 

The fair value of portfolio investment is determined by reference to Stock Exchange quoted 

market prices at the close of business on the balance sheet date. The fair value of forward 

commodity contracts is determined using forward commodity market rates at the balance 

sheet date. 

The carrying amounts of the other financial assets and liabilities approximately equal to their 

fair values. 

Capital management 

The Group’s policy is to maintain an optimum capital base to maintain investor, creditor and 

market confidence to sustain future growth of business as well as return on capital. 

21 Comparatives 

Certain comparative information has been reclassified to conform to the presentation 

adopted in these financial statements. 

72

CHAPTER 12 

Prospective consolidated financial statements for 2008-2014 



Prospective consolidated financial statements 

31 December 2008 to 2014 

73



Summarised prospective consolidated income statement 

For the period ended 31 December 

2008 2009 2010 2011 2012 2013 2014 



Revenue 14,334,473 20,397,784 27,846,766 36,925,267 46,138,067 54,723,722 62,074,418 

Cost of sales (10,185,084) (14,716,346) (20,944,443) (27,088,773) (33,344,264) (39,021,993) (44,154,975) 

Gross profit 4,149,389 5,681,438 6,902,323 9,836,494 12,793,803 15,701,729 17,919,443 

Other income 160,380 95,000 107,000 112,400 118,205 124,445 131,154 

Expenses 

Selling, administrative and general expenses (1,344,785) (2,086,311) (3,372,988) (3,926,954) (4,511,410) (5,257,189) (5,951,722) 

76 

Profit from operations 2,964,984 3,690,127 3,636,335 6,021,940 8,400,598 10,568,985 12,098,875 

Finance charges (226,104) (220,084) (678,073) (665,062) (726,052) (705,042) (668,031) 

Profit for the year before taxation 2,738,879 3,470,043 2,958,262 5,356,878 7,674,546 9,863,943 11,430,844 

Taxation (336,753) (405,342) (512,741) (561,888) (629,817) (706,019) (801,088) 

Net profit for the year 2,402,126 3,064,701 2,445,521 4,794,990 7,044,729 9,157,924 10,629,756 

Earnings per share for the year 0.048 0.061 0.049 0.096 0.141 0.183 0.213 

The significant accounting policies & assumptions on note 2 to 5 form an integral part of these prospective consolidated financial statements



Summarised prospective consolidated balance sheet 


2008 2009 2010 2011 2012 2013 2014 


Assets 


Property, plant and equipment 2,417,987 9,469,581 9,393,303 8,313,842 7,347,372 6,194,270 5,359,457 

Intangible assets 781,515 586,136 390,757 195,378 - - - 

Investment 200,000 200,000 200,000 200,000 200,000 200,000 200,000 

Deferred tax 15,472 15,472 15,472 15,472 15,472 15,472 15,472 

Total non-current assets 3,414,974 10,271,189 9,999,532 8,724,692 7,562,844 6,409,742 5,574,929 


Inventories 2,931,057 3,693,706 4,837,003 6,036,387 7,159,665 8,298,925 9,333,347 

77 

Trade and other receivables 3,767,113 4,871,538 6,636,374 8,411,071 10,153,607 11,829,132 13,345,085 

Cash in hand and at banks 8,501,702 7,244,057 7,404,144 9,505,654 13,549,414 19,601,581 26,726,719 

Total current assets 15,199,872 15,809,301 18,877,521 23,953,112 30,862,686 39,729,638 49,405,151 

Total assets 18,614,846 26,080,490 28,877,053 32,677,804 38,425,530 46,139,380 54,980,080 


Equity 

Share capital 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 

Share premium 6,400,000 6,400,000 6,400,000 6,400,000 6,400,000 6,400,000 6,400,000 

Legal reserve 1,059,071 1,312,350 1,604,904 1,976,866 2,424,027 2,816,072 3,285,583 

Retained earnings 455,326 1,516,748 1,919,715 4,592,743 9,440,311 16,456,190 24,866,435 

Dividend payable 1,750,000 1,750,000 1,750,000 1,750,000 1,750,000 1,750,000 1,750,000 

Total equity 14,664,397 15,979,098 16,674,619 19,719,609 25,014,338 32,422,262 41,302,018



Summarised prospective consolidated balance sheet (Contd.) 


2008 2009 2010 2011 2012 2013 2014 


Liabilities 

Non current liabilities 

Long term loan 401,392 5,859,218 5,809,044 4,607,696 3,455,522 2,303,348 1,151,174 


Trade and other payables 1,878,224 2,542,000 3,323,216 4,254,151 5,007,322 5,747,422 6,371,540 

Short term bank borrowings 1,650,000 1,650,000 3,020,000 2,895,000 3,746,000 4,464,000 4,953,000 

Current portion of long term loan 20,833 50,174 50,174 1,201,348 1,202,348 1,202,348 1,202,348 

Total current liabilities 3,549,057 4,242,174 6,393,390 8,350,499 9,955,670 11,413,770 12,526,888 

78 

Total liabilities 3,950,449 10,101,392 12,202,434 12,958,195 13,411,192 13,717,118 13,678,062 

Equity and liabilities 18,614,846 26,080,490 28,877,053 32,677,804 38,425,530 46,139,380 54,980,080 

Net assets per share 0.293 0.319 0.333 0.394 0.500 0.648 0.826 




Summarised prospective consolidated cash flow statement 


2008 2009 2010 2011 2012 2013 2014 


Cash flows from operating activities 

Cash receipts from customers 14,180,786 19,388,359 26,188,930 35,262,970 44,513,737 53,172,643 60,689,619 

Cash paid to suppliers and employees (11,429,239) (16,548,404) (23,293,179) (28,723,161) (36,863,906) (43,365,565) (49,266,723) 

Cash generated from operations 2,751,547 2,839,955 2,895,751 6,539,808 7,649,831 9,807,078 11,422,896 

Interest paid (226,104) (220,084) (678,073) (665,062) (726,052) (705,042) (668,031) 

Taxation paid (336,753) (405,342) (512,741) (561,888) (629,817) (706,019) (801,088) 

79 

2,188,690 2,214,529 1,704,937 5,312,858 6,293,962 8,396,017 9,953,777 

Net cash flows from / (used in) 

operating activities 

Cash flows from investing activities 

Purchase of property, plant and equipment (2,793,833) (6,331,000) (1,114,676) (135,000) (199,028) (159,676) (415,465) 

Acquisition of intangibles assets (127,894) (849,000) - - - - - 

Investment 466,704 - - - - - - 

(2,455,023) (7,180,000) (1,114,676) (135,000) (199,028) (159,676) (415,465) 

Net cash flows from / (used in) 

investing activities



Summarised prospective consolidated cash flow statement (Contd.) 


2008 2009 2010 2011 2012 2013 2014 


Cash flows from financing activities 

Issue of equity under IPO 1,500,000 - - - - - - 

Share issue premium 6,600,000 - - - - - - 

Share issue collected 50,000 

Issue expenses incurred (250,000) - - - - - - 

Term loan received 401,392 5,508,000 - - - - - 

Repayment of term loans (20,833) (50,174) (50,174) (1,201,348) (1,152,174) (1,152,174) (1,152,174) 

Dividends paid - (1,750,000) (1,750,000) (1,750,000) (1,750,000) (1,750,000) (1,750,000) 

8,280,559 3,707,826 (1,800,174) (2,951,348) (2,902,174) (2,902,174) (2,902,174) 

Net cash flow from / (used in) 

financing activities 

80 

8,014,226 (1,257,645) (1,209,913) 2,226,510 3,192,760 5,334,167 6,636,138 

Increase / (decrease) in cash and cash 

equivalents during the year 

(1,162,524) 6,851,702 5,594,057 4,384,144 6,610,654 9,803,414 15,137,581 

Cash and cash equivalents at the beginning 

of the year 

6,851,702 5,594,057 4,384,144 6,610,654 9,803,414 15,137,581 21,773,719 

Cash and cash equivalents at the end of 

the year 

Cash & cash equivalents comprise: 

Cash at bank and in hand 8,501,702 7,244,057 7,404,144 9,505,654 13,549,414 19,601,581 26,726,719 

Short term bank borrowings (1,650,000) (1,650,000) (3,020,000) (2,895,000) (3,746,000) (4,464,000) (4,953,000) 

6,851,702 5,594,057 4,384,144 6,610,654 9,803,414 15,137,581 21,773,719 

The significant accounting policies & assumptions on note 2 to 5 form an integral part of these prospective consolidated financial statements.



Prospective consolidated statement of changes in equity 


Total 

Retained 

earnings 

Proposed 

Dividend 

Legal 

Reserve 

Share 

Premium 

Share 

Capital 

1 January 2008 3,500,000 - 848,395 - 13,876 4,362,271 

Increase in share capital - IPO proceeds 1,500,000 1,500,000 

Increase in share premium - IPO proceeds 6,600,000 6,600,000 

Shortfall in issue expenses (200,000) (200,000) 

Profit for the year 2,402,126 2,402,126 

Transfer to legal reserve 210,676 (210,676) - 

Proposed dividend 1,750,000 (1,750,000) - 

31 December 2008 5,000,000 6,400,000 1,059,071 1,750,000 455,326 14,664,397 

1 January 2009 5,000,000 6,400,000 1,059,071 1,750,000 455,326 14,664,397 

Dividend paid (1,750,000) (1,750,000) 

81 




31 December 2009 5,000,000 6,400,000 1,312,350 1,750,000 1,516,748 15,979,098 

1 January 2010 5,000,000 6,400,000 1,312,350 1,750,000 1,516,748 15,979,098 

Dividend paid (1,750,000) (1,750,000) 



Proposed Dividend 1,750,000 (1,750,000) - 

31 December 2010 5,000,000 6,400,000 1,604,904 1,750,000 1,919,715 16,674,619



Prospective consolidated statement of changes in equity (Contd.) 


Share Share Legal Reserve Proposed Retained 

Total 

Capital Premium 

Dividend earnings 

1 January 2011 5,000,000 6,400,000 1,604,904 1,750,000 1,919,715 16,674,619 

Dividend paid (1,750,000) (1,750,000) 




31 December 2011 5,000,000 6,400,000 1,976,866 1,750,000 4,592,743 19,719,609 

1 January 2012 5,000,000 6,400,000 1,976,866 1,750,000 4,592,743 19,719,609 

Dividend paid (1,750,000) (1,750,000) 



Proposed Dividend 1,750,000 (1,750,000) - 

31 December 2012 5,000,000 6,400,000 2,424,027 1,750,000 9,440,311 25,014,338 

1 January 2013 5,000,000 6,400,000 2,424,027 1,750,000 9,440,311 25,014,338 

Dividend paid (1,750,000) (1,750,000) 




82 

31 December 2013 5,000,000 6,400,000 2,816,072 1,750,000 16,456,190 32,422,262 

1 January 2014 5,000,000 6,400,000 2,816,072 1,750,000 16,456,190 32,422,262 

Dividend paid (1,750,000) (1,750,000) 




31 December 2014 5,000,000 6,400,000 3,285,583 1,750,000 24,866,435 41,302,018 




Significant accounting policies and assumptions 

(forming part of the prospective consolidated financial statements) 

1 Legal status and principal activities 

Voltamp Energy SAOG (under transformation) (“the Company”) is in the process of 

registration as a joint stock company under the Commercial Companies Law of Oman. The 

company is presently registered in the Sultanate of Oman as a limited liability company. 

• Voltamp Transformers Oman LLC (“the Subsidiary”), registered in the Sultanate of 

Oman, is a wholly-owned subsidiary of the Company. 

• Voltamp Manufacturing Company, registered in Qatar, is 51% owned subsidiary of 

the Company. 

• Voltamp Power Oman LLC (the proposed wholly owned Subsidiary), is part of this 

projections, which is yet to be formed. 

The principal activities of the Company and its Subsidiaries (“the Group”) are manufacture, 

sale and distribution of transformers, LV Switchgears and panels. The ultimate holding 

company of the Group is Al Anwar Holdings SAOG (“AAH”) [formerly Al Anwar Industrial 

& Trading Co. SAOG (“AAITCO”)]. 

2 Basis of preparation of the prospective consolidated financial statements for the 

Company for the year ending 31 December 2008 to 2014 (“the Projections”) 

These Projections have been prepared by the Management in accordance with the 

following accounting policies and assumptions. 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 differences may be material. 

(a) Basis of preparation 

These prospective consolidated financial statements have been prepared under the historical 

cost basis, except that investments available for sale are stated at their fair values. 

(b) Statement of compliance 

The Projections have been prepared in accordance with International Standards on 

Assurance Engagements (“ISAE”) promulgated by the International Auditing and 

Assurance Standards Board (“IAASB”). 

c) Functional currency 

These prospective consolidated financial statements are presented in Rial Omani, which 

is the Group’s functional currency. 

d) Use of estimates and judgments 

The preparation of prospective consolidated 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 recognised in the period in which the estimate is revised and 

in any future periods affected. 

83





3 Hypothetical assumptions 

(a) Economic conditions 

There will be no adverse changes to the prevailing economic climate in Oman during 

the years ending 31 December 2008 to 2014, which may have a material impact 

upon the Projections. 

(b) Laws and regulations 

The existing laws and regulations of Oman, including those of taxation, will not 

change during the years ending 31 December 2008 to 2014 in a manner which may 

have a material impact upon the Projections. 

(c) Inflation 

Inflation will not have a significant impact on the Projections. 

(d) Foreign currencies 

It has been assumed that there will be no material foreign exchange gains 

and losses during the years ending 31 December 2008 to 2014. 

(e) Markets and market share 

It has been assumed that the Company will market its products in North Africa, 

GCC countries and countries in Middle East region. The shares in the different 

markets are available with the Company. 

(f) Payroll costs 

Salaries represent approximately 60% of selling, administration and general expenses 

of the projected period. It is anticipated that the Group’s workforce will increase from 

approximately 180 at the end of 2007 and over 550 by the end of 2014. 

(g) Term loans and working capital loans 

Debts consist of the long term loans (at 6%) raised in order to fund primarily a proposed 

subsidiary company and as well as working capital loans (at 7%) together amounting to 

approximately RO 7.3 million by 2014. 

The Group Management is in process of identifying and finalising the source of 

financing. 

(h) Dividend 

The dividend payout for the projected period has been considered at 35% of the 

capital. 

4 Significant accounting policies 

The significant accounting policies, except stated below on intangibles and amortization, 

followed by the Company are in accordance as set out in the Note 3 on significant accounting 

policies of Chapter 11 Summarised Consolidated Financial Statements of the prospectus 

document. 

84





Other Intangibles 

Other intangibles assets that are acquired by the Group, which have finite useful lives, are 

measured at cost less accumulated amortisation and accumulated impairment losses. 

Amortisation 

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful 

lives of intangibles assets, other than goodwill, from the date that they are available for use. 

5 Best estimate assumptions 

(a) Property, plant and equipment (PPE) 

The additions or deletions to property, plant and equipment have been assumed by 

Group during the years ending 31 December 2008 to 2014. 

PPE 2008 2009 2010 2011 2012 2013 2014 

Additions (2,793,833) (6,331,000) (1,114,676) (135,000) (199,028) (159,676) (415,465) 

Deletions - - - - - - - 

(b) Intangibles assets and amortisation 

Technology transfer cost to acquire technology is recognised as intangible 

assets in prospective consolidated financial statements and is amortised in 

over the 5 years period. 

(c) Investments 

Investments made listed securities and valued at cost. 

(d) Inventories 

The closing stock of inventories (consists of raw material, work in progress and 

finished goods) has been considered on the number of days of cost of sales for 

the years 2008 to 2014 respectively (135 days for 2007). No provisions have been 

considered during above period. 

Inventory 2008 2009 2010 2011 2012 2013 2014 

Number of days 105 92 84 81 78 78 77 

(e) Average receivables, advances and prepayments 

The receivables have been stated at gross, no provision for doubt debts has been 

considered. The Company has projected sales receivables as between 96 days to 78 

days over the projected period which is lower than the past trends of 110 days 

Receivables 2008 2009 2010 2011 2012 2013 2014 

Number of days 96 87 87 83 80 79 78 

85





(f) Average trade and other payables 

The average trade payables for projected period are 67 days to 53 days of cost of sales 

which is compared to the past average of 80 days. 

Receivables 2008 2009 2010 2011 2012 2013 2014 

Number of days 67 63 58 57 55 54 53 

(g) Cash at bank and in hand 

Cash and bank balances represent the cash and cash equivalents comprising 

of cash at bank and in hand and short term bank borrowings 

(h) Short term borrowings 

The Group uses local banks operating in the Sultanate of Oman to ensure that it has 

sufficient cash on demand to meet expected operational expenses and sufficient credit 

facilities to manage its liquidity risk. 

The existing and planned borrowings facilities of the Group are in range of 

6.50 % to 8.00%. 

(i) Long term loan 

Term loan of RO 5,508,000 have been assumed by the Company for Voltamp Power 

LLC (subsidiary company to be incorporated). 

(j) Equity 

Authorised share capital 

The authorised share capital of the Voltamp Energy SAOG (under transformation) shall 

be RO. 10,000,000 (ten million), divided into 100,000,000 (one hundred million) ordinary 

shares. 

Issued and paid up share capital of the Company (post IPO): 

The issued and paid up share capital of the Company shall be RO. 5,000,000 (five 

million) divided into 50,000,000 (fifty million) ordinary shares. 

Share capital of the Company prior to the IPO 

The issued and paid up share capital of the Company is RO 3,500,000 (three million, five 

hundred thousand) divided into 35,000,000 (thirty five million) ordinary shares. 

Shares offered 

Existing promoters / stock selling shareholders and the Company have agreed to offer 

10,000,000 (ten million) and 15,000,000 (Fifteen Million) new ordinary shares through 

the Initial Public Offer respectively. 

86





(j) Equity (continued) 

Promoter’s name 

87 

Number of shares 

before transformation 

face value Baisa 100 

Number of shares to 

beoffered for sale 

face value Baisa 100 

Al Anwar Holdings SAOG 20,097,000 5,742,000 

SABCO LLC 7,451,500 2,129,000 

Mr. Mushtaq bin Abdullah bin Jaffer 3,160,500 903,000 

H.H. Seyyid Shihab bin Tariq Al Said 2,597,000 742,000 

Mr. Mohammed bin Abdul Rasool Al Jamali 1,130,500 323,000 

Dr. Ali bin Jaffar bin Mohammed 563,500 161,000 

Total 35,000,000 10,000,000 

The offer comprises of two components: 

3. Issue of the new ordinary shares for public subscription by the Company each with a 

nominal value of Baisas 100 at an offer price of Baisas 542 (five hundred and forty two) 

including issue expenses of Baisas 2 per share, out of which, up to 1,250,000 (one 

million two hundred and fifty thousand) shares shall be set aside for subscription by the 

employees and managers as follows: 

a) up to 1,000,000 (one million) shares shall be offered to the employees; and 

b) up to 250,000 (two hundred and fifty thousand) shares shall be offered to the 

managers. 

The new ordinary shares will rank pari-passu with the existing ordinary shares. 

4. Offer for sale to the public of the existing ordinary shares by the selling shareholders 

each with a nominal value of Baisas 100 at an offer price of Baisas 542 (five hundred 

and forty two) which includes Baisas 440 (four hundred and forty) as share premium and 

issue expenses of Baisas 2 per share. 

Purpose for which the proceeds of the subscription would be utilised 

Proceeds from the issue of new ordinary shares 

Issue proceeds under this category aggregating to RO 8,100,000 (eight million, one 

hundred thousand) will accrue to the Company, and will be utilised by the Company 

for financing the ongoing capital expenditure, for meeting its long term working 

capital requirements and investment in future strategic projects in other subsidiary 

companies. 

Proceeds from the offer for sale of existing ordinary shares 

Issue proceeds under this category aggregating to RO 5,400,000 (five million, four hundred 

thousand) will accrue to the selling shareholders only and not to the Company. 

Issue expenses 

The amount of RO 50,000 (fifty thousand) being collected towards part of the Issue 

Expenses from the total issue will accrue to the Company.





Legal reserve 

Article 106 of the Commercial Companies Law of 1974, requires that 10% of the 

Company’s net profit to be transferred to a non-distributable legal reserve until the 

amount of the legal reserve equals one-third of the Company’s issued share capital. 

Proposed dividend 

The dividend payout for the projected period has been considered at 35% of the 

capital. 

(k) Capacity utilisation to total capacity 

Year 


SAOG (under 


Voltamp 

Transformers 

Oman LLC 

88 

Voltamp 

Manufacturing 

Company Qatar 

Voltamp 

Power LLC 

2007 90% - 40% - 

2008 90% 56% 90% - 

2009 90% 69% 90% - 

2010 90% 82% 90% 12% 

2011 90% 100% 90% 39% 

2012 90% 100% 90% 65% 

2013 90% 100% 90% 87% 

2014 90% 100% 90% 100% 

A subsidiary of the Company (Voltamp Transformer Oman LLC) has a production capacity 

of 2100 MVA with two full-fledged working shifts of 12 hours. Company produced 1200 

MVA during 2007 and projecting increased utilisation by 20% from 2008 to 2010 when 

company reaches the maximum capacity. 

The Company has projected a capital investment of over RO 600,000 till 2014 to increase 

the facility of Voltamp Energy Company LLC. The capacity of Voltamp Energy Company 

LLC can be increased with addition to factory building and manpower without much of 

investment on plant & machinery.





(l) Operating information 

The group’s performance based on projections prepared by management, growth in 

operating parameters in comparison to the previous years is below in table: 

Year 2008 2009 2010 2011 2012 2013 2014 

Growth in comparison to PY in 

Revenue 34% 42% 37% 33% 25% 19% 13% 

Cost of sales 45% 44% 42% 29% 23% 17% 13% 

Gross profit 12% 37% 21% 43% 30% 23% 14% 

Other income 1% -41% 13% 5% 5% 5% 5% 

Selling, administrative & general 

expenses 

53% 55% 62% 16% 15% 17% 13% 

Finance charges 12% -3% 208% -2% 9% -3% -5% 

Net profit before tax -1% 27% -15% 81% 43% 29% 16% 

(m) Income tax 

It may be noted that while preparing this the projections of the group, the deferred tax 

asset / liability arising out of on timing differences/losses has not been recognized. 

Year 

2008 2009 2010 2011 2012 2013 2014 

Tax liability (336,753) (405,342) (512,741) (561,888) (629,817) (706,019) (801,088) 

89



Un audited Financial Statements for the Period ended 31 st March 2008 

VOLTAMP ENERGY LLC 

(INCLUDING SUBSIDIARY) 

Consolidated Income Statement for the Quarter ended MARCH 2008 

Particulars Amount In RO 

Actual Previous Yr. 

up to March 2008 Up to March 2007 


Sales 3,223,571 2,162,469 

Cost of Sales (2,132,563) (1,502,986) 

Gross Profit 1,091,008 659,483 

Other Income 18,453 8,364 

Selling, Administrative and General Exp (339,550) (164,958) 

Profit from operations 769,911 502,889 

Finance Charges (35,632) (60,401) 

Profit for the year before taxation 734,279 442,488 

Taxation (85,714) (42,277) 

Net profit for the period 648,565 400,211 

Earnings per share (Annualised) 0.074 0.046 

90



Consolidated Balance Sheet 

VOLTAMP ENERGY LLC 

(INCLUDING SUBSIDIARY) 

Particulars VEC (Incl. Subsidiary) 

Assets 

91 

AUDITED As at UN AUDITED As at 

12/31/2007 3/31/2008 

R.O. R.O. 


Property Plant and equipment 521,201 496,510 

Investments 666,704 666,704 

Deffered tax asset 15,472 15,472 

Total non-current asstes 1,203,377 1,178,686 


Inventories 2,564,161 3,255,259 

Trade and other receivables 3,453,046 4,041,892 

cash in hand and at banks 86,699 18,301 

Total current assets 6,103,906 7,315,452 

Total assets 7,307,283 8,494,138 


Equity 

Share capital 3,500,000 3,500,000 

Legal reserve 848,395 855,693 

Retained Earnings 13,876 655,144 

Total Equity 4,362,271 5,010,837 

Liabilities 

Non Current Liabilities 

Long term Loan 20,833 20,833 

Total Non current liabilities 20,833 20,833 


Trade and other payables 1,549,956 1,314,196 

Bank borrowings 1,249,223 2,054,522 

Current portion of long term loan 125,000 93,750 

Total current liabilities 2,924,179 3,462,468 

Total liabilities 2,945,012 3,483,301 

Equity and liabilities 7,307,283 8,494,138 

Net Assets per share (RO) 0.124 0.143

CHAPTER 13 

Dividends 

DIVIDENDS POLICY 

The Offered Shares will rank equally with all other Ordinary Shares of the Company for any rights 

to dividends that may be declared and paid in respect of the financial year ending 31 December 

2008 and in subsequent years. Following the offering, the shareholders’ register of the Company 

shall be amended to allow new shareholders to receive any declared dividends in future years. 

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 corporation’s 

share capital. Accordingly, the Company will be required to maintain such legal reserve. 

The Company’s Cash Dividend Policy 

The Company proposes to follow a reasonable dividend payout policy, subject to debt 

repayments, working capital and capital expenditure 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 Company’s business prospects, financial performance, 

free cash availability, and the outlook for the power sector. The Company’s management will take 

into account dividend payout ratios within its industry/sector as well as dividend yields of other 

leading stocks on the MSM at the time of recommending dividends. 

Proposed Dividend as per the Financial Projections 2008-2010 

YEAR 

PAID UP CAPITAL 

92 

DIVIDEND 

AMOUNT* 

In RO In RO 

% ON 

CAPITAL 

Value per 

share 

2008 5,000,000 1,750,000 35% 35 Baisas 

2009 5,000,000 1,750,000 35% 35 Baisas 

2010 5,000,000 1,750,000 35% 35 Baisas 

* Subject to Shareholders’ approval in the Annual General Meeting and / or any other appropriate 

authorities. 

Past Dividend Record of the Company (2005-2007) 

Year Cash Dividend Stock Dividend Close Equity 

2005 Nil Nil RO 500,000 

2006 RO 200,000 RO 600,000 RO 1,100,000 

2007 Nil RO 2,400,000 RO 3,500,000

CHAPTER 14 

Overview 

VALUATION AND PRICE JUSTIFICATION 

The Lead Issue Manager and the Financial Advisor, Oman Arab Bank (“OAB”), has a strong and 

successful presence in Oman through a number of lead advisory and project financing mandates 

in Oman. They also have significant experience in IPO advisory work, for both new IPOs and 

as well as rights issues of existing public companies. Their most recent mandate included the 

recent Bank Sohar IPO & Galfar IPO and are on track to bring some more companies to a public 

listing on the Muscat Securities Market soon. 

About Ernst & Young: 

Ernst &Young has carried out the valuation for the Company. Ernst & Young is a global leader 

in assurance, tax, transaction and advisory services. The Muscat office of Ernst & Young first 

opened its doors in 1974, although the firm had been serving clients in Oman since the 1950’s. 

Much of Muscat has been developed only in the past 30 to 35 years, with Ernst & Young firmly 

establishing itself during this period. 

In recent years the office has experienced significant growth. In the last ten years, the number 

of clients and people has trebled. It also serves a large number of clients in the oil & gas, 

manufacturing, retail and construction industries. 

Executives of Ernst & Young Oman serve on a number of public advisory groups including 

committees led by the Capital Markets Authority and the Oman Centre for Investment Promotion 

and Export Development (OCIPED). 

Offer Price 

OAB has considered a number of qualitative and quantitative factors in determining the price 

offer for Voltamp shares. Some of the key factors in the analysis included : 

a) Cash flow analysis based on the financial results of the Company for 2007, and future 

financial projections provided by Company management from 2008 to 2014; 

b) The Lead Issue Manager, Oman Arab Bank has also had an independent valuation performed 

by a leading accounting firm, Ernst & Young, as required by the Capital Market Authority; 

A brief about Ernst & Young is given above: 

c) Analysis of current multiples on the MSM; 

d) Comparative analysis of selected peer companies listed on regional stock exchanges. 

Based on an exhaustive analysis, the Lead Issue Manager has recommended an offer price of 

Baisas 540 per share. 

The detailed cashflow analysis considered the following companies separately: 

v Voltamp Energy LLC (“VE”) 

v Voltamp Transformers Oman LLC (“VTO”) 

v Voltamp Transformers Company Qatar (“VMCQ”) 

v Voltamp Power LLC (“VPO”) 

93

The underlying reason is that there are a number of differences : 

v The companies valued are different in size and sales volume. 

v Two companies are existing, profit making companies (VE and VTO), while two companies 

are new: 

o VMCQ has started construction but has not yet started operations and will be operating 

in a different geography 

o VPO has not yet been formed 

Cash Flow Analysis 

The discounted cash flow (“DCF”) analysis has been the principal method used to value the 

Company. The DCF seeks to determine the net present value of projected free cash flows 

generated by the company for all providers of capital using the weighted average cost of capital 

(“WACC”) as the discount rate to reflect the time value of money and the predictability of the 

future cash flows streams. The average WACC applied to the 4 individual companies ranges 

between 12.2% and 14.2%. The total free cash flows which comprise the annually forecasted 

free cash flows and the terminal value of the Company at the end of the forecast period are 

discounted back to the present using the WACC to obtain the enterprise value (i.e. the value of 

all cash flows generated by the company) and then, by deduction of net debt, the value of shares 

in the company (the “Equity Value”). 

DCF Advantages 

• The most theoretically sound valuation method; 

• Forward-looking analysis, based on future cash flow (less affected by accounting rules); 

allows expected operating strategy to be incorporated into the model; 

• Less influenced by volatility of markets and other market conditions; 

• Allows a valuation of the different components of a business separately from the business. 

DCF Disadvantages 

• Valuation is highly sensitive to underlying assumptions for cash flows, terminal value 

calculation and discount rate. 

The key financial results and projections of the Company are given in the following table: 

The Company’s financial projections are based on realistic and achievable assumptions, with the 

following highlights: 

RO ʻ000 

Historic Projected 

Year ended December 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

Income 5,472 7,993 10,694 14,334 20,398 27,847 36,925 46,138 54,724 62,074 

Gross Profit 1,190 1,745 3,691 4,149 5,681 6,902 9,836 12,794 15,702 17,919 

Net Profit 496 787 2,422 2,402 3,065 2,446 4,795 7,045 9,158 10,630 

Share Capital 500 1,100 3,500 5,000 5,000 5,000 5,000 5,000 5,000 5,000 

Shareholders' Funds 1,353 2,140 4,362 14,664 15,979 16,675 19,720 25,014 32,422 41,302 

Net Assets 1,353 2,140 4,362 14,664 15,979 16,675 19,720 25,014 32,422 41,302 

Key Ratios 

Income Growth 20.02% 46.07% 33.79% 34.04% 42.31% 36.52% 32.60% 24.95% 18.61% 13.43% 

Gross Profit Margins 21.75% 21.83% 34.51% 28.95% 27.85% 24.79% 26.64% 27.73% 28.69% 28.87% 

Net Margins 9.06% 9.85% 22.65% 16.76% 15.03% 8.78% 12.99% 15.27% 16.73% 17.12% 

Nominal value of each share - Bzs 100 

Earnings per Share 99 72 69 48 61 49 96 141 183 213 

Book Value per Share 271 195 125 293 320 334 394 500 648 826 

94

Voltamp’s financial projections are based on the following key assumptions: 

Assumptions: 

• Sales are projected to increase from RO 14 million in 2008 to RO 62 million in 2014, 

representing a CAGR of 28% for the period. A key component of this growth is attributable 

to the addition of Voltamp Manufacturing Co., Qatar (VMCQ) and Voltamp Power, Sohar 

(VPO). VMCQ is expected to generate revenue in 2008. VPO is expected to commence 

generating revenue in 2010. By 2014, it is projected that VPO would contribute the largest 

share to Voltamp’s total revenue, with the contribution being around 41%. 

• Gross profit margins over the projection period are expected to stay broadly constant at 

between 27% and 29%. Gross profit margin for 2010 are projected to drop, essentially due 

to the commencement of operations of VPO It is anticipated that gross profit margin would 

improve steadily as the manufacturing process becomes more efficient and as a result, 

the Company’s projected gross margin level by 2014 would be in line with the Company’s 

normalised level. A similar explanation is applicable to the trend in projected net profit 

margin. 

• While the gross profit margins in the projected financial statements are lower than that of 

2007 (35%), they are a strong improvement on overall historical trends (2004-2006: 19%- 

22%). Management is confident that they can achieve the projected gross margins and even 

better the projections. 

• Salaries represent approximately 60% of selling, administration and general expenses. It is 

anticipated that the Voltamp workforce will increase from approximately 180 at the end of 

2007 to over 550 by the end of 2014. The major increase will be as a result of VPO which is 

expected to require approximately 200 people. Omanisation in 2008 is expected to be more 

than 35% and projected to increase to 41% by 2014. 

Price Multiples 

The Offer price of Baisas 540 per Share (excluding Baisas 2 of Issue Expenses) results in the 

following price multiples: 

Ratios 2007 2008 

PER 7.83 11.25 

PBV 4.33 1.84 

PER: Price Earnings Ratio 

PBV: Price to Book Value Ratio 

Market Multiples 

Prices as of March 13, 2008 PER Multiples PBV Multiplies 

Banking & Investments Sector Index 19.48 3.45 

Industry Sector Index 15.50 3.82 

Service & Insurance Index 13.28 3.90 

MSM 30 General Index 16.59 3.63 

95

The Offer price of the Company’s Shares compares favorably with the prevailing aggregate PE 

multiples of the MSM. While PBV appears to be high compared to the market and sector PBV 

for 2007, however it should be noted that the share capital increased in 2007 due to the issue 

of new capital. The PBV drops thereafter to 1.84 in 2008, which should compare favorably with 

the Market. 

Comparative Analysis 

The Company is a diversified multi-disciplinary company specialised in the manufacture of 

transformers and low voltage switchgear panels. In the absence of directly comparable companies 

listed on the regional stock exchanges, the advisors have selected closely comparable companies 

operating in the power sector in the region. A comparative analysis has been conducted for 

benchmarking the Offer pricing of the Company against its regional peer group. 

Name of the Company 

Oman 

Cables 

(Oman) 

2007 

El Nasr 

Transformers 

(Egypt) 

2007 

96 

Middle East 

Specialised 

Cables (KSA) 

2007 


SAOG (under 


2007 

Year 2007 2007 2007 2007 

Net Profit Margin % 6.96 9.00 16.13 23.00 

Operating margin % 11.49 10.12 19.12 35.00 

Return on Assets % 14.86 11.16 14.36 33.00 

Return on Equity % 72.58 24.49 34.55 56.00 

Share capital Mn. 8.970 2.795 32.8 3.500 

No of shares out standing Mn. 89.700 39.876 32.000 3.500 

Shareholders’ Equity Mn. 27.914 0.9576 44.537 4.362 

Net Profit Mn. 15.134 2.243 15.344 2.422 

EPS 0.169 0.0562 0.468 0.692 

Price as on 13-3-08 3.640 1.630 8.61 *5.40 

PE x 21.54 28.985 17.90 7.83 

PBV x 11.70 7.09 6.186 4.33 

Dividend Yield % 1.09 0.250 1.488 --- 

For the purpose of comparision, the financial figures are restated in Rial Omani. The following 

conversion rates have been used for the purpose. 

1 Kuwaiti Dinar = 1.41957 RO 

1 Saudi Riyal = 0.1025 RO 

1 Qatari Riyal = 0.1056 RO 

1 Egyptian Pound = 0.0701 RO 

* In 2007 the face value of the share was RO 1.000. Hence we have used the price of RO 5.4 

(equivalent to RO 0.540 after the change in face value to RO 0.100) for calculating the valuation 

ratios.

The Offer price of the Company’s shares results in a lower PE multiple as compared to the 

average PE multiple of its peer group companies. Even performance indicators like ROE and ROA 

compare favourably with the sector peers. However, the investors should note that the difference 

may be due to certain industry specific factors, or particular financial status and prospects of 

the peer group companies. Due to the difference in the nature of operations of the different 

companies, there is no direct like-to-like comparision between the companies mentioned above. 

The above data is indicative only and should be used accordingly. Please note that the data for 

Voltamp is corresponding to the data for consolidated accounts for Voltamp Group and for the 

year 2007 prior to the capital restructuring. 

97

CHAPTER 15 

RELATED PARTY TRANSACTIONS 

Related Party Transactions (including Group/Associates) 

For the financial year ended 31 st December 2007 the following are classified as Related Party 

Transactions and brief details are given below: 

During the year the Group has entered into transactions with entities over which certain managers 

are able to exercise significant influence. The Group also entered into transactions with AAH and 

its associates. In the ordinary course of business, such related parties provide goods and render 

services to the Group. The Group also provides goods and renders services to such related 

parties. The Group considers that the terms of purchase, sale of goods and provision of services 

are comparable with those that could be obtained from third parties. The details are as follows: 

Related Party transaction for the year 2007 

For the financial year ended 31stDecember 2007 

the followingare classified as Related Party 

Transactions and brief details are given below 


Name of the Party 

AL Maha Ceramics 

Premier Logistics 

Nature of 

Relationship Details of Transaction Amount(RO) 

98 

Common 

Director Sale of goods 53,300 

Common 

Director Purchase of goods/services 26,500 

Mustafa Sultan Science & Ind 

Common 

Director Purchase of goods/services 387 

Voltamp Manufacturing company Qatar Subsidary Technology transfer fees 61,904 

Voltamp ManufacturingCompany LLC 



AL Anwar Blanks 

Nature of 


Common 


Common 



Common 


Voltamp Manufacturing company Qatar Subsidary Technology transfer fees 15,476 

Voltamp ManufacturingCompany LLC 

(Consolidated) 



AL Anwar Blanks 


Nature of 


Common 


Common 


Common 


Mustafa Sultan Science & Ind 

Common 

Director Purchase of goods/services 387 

Voltamp Manufacturing company Qatar Subsidary Technology transfer fees 77,380

Related Party Transactions for the year 2007 

1 Revenue by sale 

of goods to 

2 Purchases of 

goods and 

services from 

RO 211,549 Almaha ceramics 

(RO 209,200) 

Al Anwar Blanks (RO 2349) 

RO 34,501 Premier logistics (RO 34,114) 

and Mustafa Sultan Science 

&Ind (RO 387) 

Related party transactions mentioned above are carried out in the ordinary course of business 

on arm’s length commercial terms. 

99

CHAPTER 16 

RISK FACTORS AND MITIGANTS 

Prospective investors should carefully consider the risks described below in addition 

to all other information presented in this Prospectus before deciding to purchase 

any of the Offered Shares. Investors may note that the risks and mitigating factors 

mentioned below are the Founders’ and the Company’s management opinion based on 

their current knowledge and the information available with them. The actual risks and 

the impact of such risks could be materially different from that mentioned herein. 

1) Growth of Gulf Economy and Power Sector 

The Company’s business and revenue is derived from products & services it provides in 

the Sultanate of Oman, Qatar, other GCC countries and therefore the performance of the 

Company is linked to the economic environment of GCC countries and in particular Oman 

and Qatar. Any downtrend in the economy of GCC countries could impact the growth of the 

Company. 

2) Oil Price Risk and Geo Political Risk 

The GCC regional economies are heavily reliant on oil and accordingly, the future oil price 

scenario will determine to a large extent the economic conditions in the region. While oil 

prices are currently at historic highs and GCC economies have witnessed rapid growth 

on the back of high oil prices, any downturn in oil prices may have a dampening affect 

on regional growth and thereby on the growth of business. As the Company’s business 

emanates from the oil & gas and the Power & infrastructure sector, such a fall in oil prices 

may impact the Company’s business and growth. 

The political and international relationships/events in the region also significantly affect the 

regional economies and any increase in the political risks would affect the economic growth 

of the region in general. 

The Risks 

Demand risk 

The performance of the Company is dependent on the demand for distribution & power 

transformers, switchgear panels & related products. A fall in demand due to economic 

downtrend or any other factor could affect performance of the Company. 

Mitigant: 

In the short to medium term it is expected that the oil prices will move within the prevailing 

price band and development of infrastructure will continue to drive Oman’s economic 

growth. Given its track record and credentials, the Company believes it will continue to 

benefit from the economic growth of GCC region. 

Industry/sector concentration 

Sale of Transformers & switchgears constitute a substantial portion of the Company’s 

business. Thus, any downturn in the Power sector within GCC countries would affect the 

Company’s business adversely. 

100

Mitigant: 

Over the years, the power sector industry within GCC has been expanding steadily. 

Corresponding to Oman economy’s robust growth in excess of 6% per annum, the Company 

anticipates the power sector to continue growing in the foreseeable future. 

Failure to win Bids/Tenders 

The majority of the Company’s business comes from participation in and winning of tenders 

to supply transformers and switchgears. However, there is an inherent risk that the Company 

may not be able to win sufficient number of tenders due to competition from either other 

Omani companies or international transformer/switchgears manufacturing Companies. 

Mitigant: 

Based on a review of an excellent track record and proven expertise in its business, the 

Company is well placed for upcoming Transformer & LV Switchgear business in Oman and 

other GCC countries. The Company will continue bidding at competitive levels that are 

economically viable for its business. Despite high cumulative rate of growth in the past, the 

Company has projected a fairly modest level of growth in the financial projections and is 

confident of achieving these levels. 

Cancellation of Projects/ Contracts 

Notwithstanding a robust order book on the basis of which the financial projections of 

the Company are drawn, any cancellation of such contracts would affect the Company 

adversely. 

Mitigant: 

The Company does not envisage any major cancellation of its ongoing orders as its clients 

are mainly Government organisations and reputed private organisations in Oman and other 

GCC countries. 

Competition Risk, including entry of new competitors/international competitors 

The Company faces competition from existing as well as new entrants into the sector. 

Increased competition could potentially lead to pressures on the growth of business and 

revenue, which would affect profitability of the Company. 

Mitigant: 

The Company believes that it is well placed to face competition. The proven and enviable 

track record of supplying quality products in time has allowed the Company to build an 

excellent reputation. It is well regarded by the clients and has developed substantial expertise 

in manufacturing transformers and switchgears. 

Performance Risk 

While the Company has a robust order book of ongoing projects/contracts under execution, 

the success and profitability of the Company primarily depends on its ability to successfully 

execute these contracts. Any shortfall in supply will adversely impact the Company’s financial 

performance, reputation and future prospects. Failure to complete contractual work within 

101

the designated time schedule could potentially lead to monetary penalties or compensation 

to the client. 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 especially 

copper, CRGO and transformer oil. 

Mitigant: 

The Company has a credible track record of timely delivery of transformers & switchgear, and 

at the same time maintaining quality and best practices relating to its products & services. 

It has focused on maintaining and developing its expertise, resources and technical skills to 

ensure that it is fully equipped to meet all its future commitments. The Company’s production 

teams have extensive experience and use state of the art technology in manufacturing 

standard as well as special transformers / switchgears. Dedicated units ensure efficient 

mobilisation of manpower and technical resources, and the top management of the Company 

is closely involved in execution & monitoring. External factors that may lead to delays are 

considered at the initial planning stage, including contingencies for unforeseen situations. 

The Company has set-up hedging mechanism through which it covers price fluctuation risk 

on its key raw materials. 

Profitability Risk 

The Company’s profitability is directly linked to its input costs of material, labour, fuel, and 

any unexpected increase in these costs could potentially impact the Company’s profitability. 

Further, as a significant portion of the Company’s supply of products is based on fixed price 

contracts, any increase in input cost will adversely affect profitability. 

Mitigant: 

The Company factors such contingencies, while preparing its bids/tenders and normally 

enters into contracts with suppliers of the key inputs relating to the project. Moreover, in 

the event of cost increases on account of regulatory changes, the Company may negotiate 

with the client to suitably pass on such escalations. The Company also covers its risk of raw 

material price fluctuation through hedging mechanism. 

Raw Material Price fluctuation Risks 

The fluctuation of raw material costs such as copper and CRGO steel has a direct impact 

on products pricing. 

Mitigant: 

The Company is taking several measures to absorb fluctuation of raw material cost which 

includes restricting the time for which a quotation is valid and by using hedging mechanism 

to minimise the impact of raw material price fluctuations. 

Resources Risk 

The current boom in the power sector in the region has led to a scarcity of materials and 

skilled labour. Any constraint in the availability of raw materials and manpower could 

potentially result in delays in completion of contracts. 

Mitigant: 

The Company has entered into long term supply contracts for supply of key raw materials. 

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Also, the Company over a period of time developed reliable vendor base who assure timely 

delivery of quality products. The Company also takes sufficient care to recruit required 

number of skilled and non-skilled labour well in advance. The Company’s employees friendly 

HR policy ensure that its’ employees continue with the Company for long time. 

Physical Hazard Risks 

The Company executes various complex projects that expose its personnel and equipment 

to physical hazards. These may lead to loss of life and property through accidents in the 

workplace. 

Mitigant: 

The Company places extreme importance to the safety of its personnel and puts in place 

a number of safety measures in while manufacturing the goods or in the project execution. 

Further, there is on-going training of the personnel in various safety programmes. The Company 

also has a separate workshop that handles the maintenance required for the equipment so as 

to keep these in proper condition. Suitable insurance cover is also maintained. 

Receivables Risk 

Delays in realisation of receivables may lead to liquidity constraint that would increase the 

Company’s financial expenses and also hinder its ability to pay its suppliers, which in turn 

would affect its project implementation and performance. 

Mitigant: 

The Company monitors its receivables position closely and effectively follows up the recovery 

of its dues. Further, the Company’s financial position provides it the ability to withstand any 

temporary liquidity needs and the infusion of long term funding through this Issue will further 

strengthen the Company’s financial position. 

Delays in obtaining work visas 

Expatriate Manpower constitutes almost 65% of the Company’s work force, and their 

number is envisaged to increase further due to upcoming 132 kV project to manufacture 

power transformers at Sohar. 

The Company has to obtain work visas for these expatriate workers in a timely manner, and any 

delay in obtaining or refusal of work visas would severely hamper the Company’s growth. 

Mitigant: 

The Company effectively liaises with the Government authorities with the aim of facilitating 

its workforce requirements. Moreover, the Company is aiming through training programmes 

to induct additional Omani employees for meeting its Omanisation targets and reducing its 

need for expatriate personnel. The Government has always been supportive of companies’ 

growth requirements in Oman. 

Brand Risk; 

The company is sharing the brand name Voltamp with several group companies which 

could affect its Business in the long term. 

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Mitigant: 

The company feels it is a remote possibility and that it will not affect their operations. 

Share Price Risk 

The Company’s Shares are to be listed for the first time on the Muscat Securities Market 

and accordingly there is no prior trading in the Company’s Shares that may provide a price 

history or trend. Further, the Company’s Shares are priced at a premium to its nominal 

value. 

Mitigant: 

The Promoters/Selling Shareholders, advisors and the Lead Issue Manager, based on the 

information provided by the Company, believe that the Company’s Shares are fairly priced 

in relation to the MSM and peer companies share trading multiples. The rationale underlying 

the pricing of the Shares is set out in the Chapter on Valuation and Price Justification which 

demonstrates the validity of the proposed pricing. 

Liquidity Risk 

The Company’s Shares may not have adequate liquidity in the stock market after listing, 

and investors may not be able to sell their Shares easily post listing. 

All equity investments carry market risks to varying degrees. The value of any security can 

fall as well as rise depending on market conditions. 

Mitigant: 

The management of the Company believes that the pricing of the Shares in relation to the 

Company’s prospects has significant upside potential, which should lead to an adequate 

level of demand for its Shares post listing. Moreover, the public holding of 50% of the 

Company’s post-Issue share capital should also result in sufficient liquidity in the Shares in 

secondary market 

Government Authorisations, Permits and Approvals 

A number of authorisations, 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. 

Mitigant: 

The management of the Company believes that it has all the requisite authorisations, permits 

and approvals to conduct its business in the Sultanate of Oman and has no reason to believe 

that any of the same will be withdrawn or not renewed within the next 12 months. The 

Government has always been supportive of companies’ growth requirements in Oman. 

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CHAPTER 17 

Corporate Governance 

CORPORATE GOVERNANCE 

This section summarises the Company’s corporate structure effective as at the date of this 

Prospectus and the proposed Memorandum and Articles of Association. The description 

provided hereafter is only a summary and does not purport to give a complete overview of the 

Memorandum and Articles of Association, nor of relevant provisions of Omani law or the CMA 

circulars, neither should it be considered as legal advice regarding these matters. A copy of the 

Memorandum and Articles of Association is available from the registered office of the Company 

or the CMA. 

Management 

Overview 

The respective roles and responsibilities of the management bodies of the Company are in large 

part governed by the previsions of the CCL, the Memorandum and Articles of Association 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 will be entrusted to the Board. The Board 

may perform all acts necessary or useful for achieving the objects of the Company, with the 

exception of those acts that are by law or the Memorandum and Articles of Association explicitly 

reserved for the shareholders general meeting. 

Board 

The Board shall consist of seven directors one of whom will be elected as the Chairman of 

the Board. The following are the main provisions set out in the Memorandum and Articles of 

Association, concerning the Board. 

The management of the Company shall be entrusted to a Board of Directors comprising of 7 

members from amongst the Shareholders or non-Shareholders provided that the nominated 

Shareholder holds 40,000 Shares which he may not dispose off throughout the term of his office 

to the extent that he no longer retains the status of a Shareholder in the Company. The term 

of office of a Director shall be for a maximum period of 3 years, subject to re-elected more 

than once. The period stipulated for election to the Board shall be calculated from the date 

of the Annual General Meeting in which the Director is elected to the date of the third Annual 

General Meeting 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, save 

it shall not exceed the period stipulated in Article (120) of the Commercial Companies Law. 

Subject to the provisions of Article (95) of the Commercial Companies Law and without prejudice 

to the provisions of the Company’s Articles of Association, a person to be elected to the Board 

shall: 

i) be of a good reputation; 

ii) be at least 25 years old; 

ii) not be unable to discharge his debts to the Company to the Board of which he intends to be 

elected as a member; 

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iv) not have been declared insolvent or bankrupt unless his insolvency or bankruptcy has been 

terminated in accordance with the Law; 

v) not have been convicted of felony or an offence of dishonourment, unless he has been 

rehabilitated; 

vi) not be a member or a representative of a juristic person in four joint stock companies whose 

head offices are in the Sultanate of Oman; 

vi) in case he is representing a juristic person, be authorised by such juristic person to stand for 

election; 

viii) not be a member of a board of directors in a public or closed joint stock company, the head 

office of which is the Sultanate of Oman, conducting business similar to the objectives of the 

Company; and 

ix) submit a declaration stating the number of his Shares if he is a Shareholder and undertaking 

not to dispose of such Shares, during the term of his office as a Director, in any manner 

which may cause him to cease being a Shareholder in the Company. 

Without any prejudice to the regulations of the Commercial Companies Law mentioned above, 

the following conditions will be fulfilled while forming the Board of Directors of the Company. 

1. The Board shall be comprised of a majority of non-executive directors. A non-executive 

director means “the member of the board who is not a whole time director (employee 

director) and/or does not draw any fixed monthly or annual salary from the Company”. 

2. A minimum of 1/3rd of the total strength of the Board (subject to a minimum of two) shall 

comprise of independent directors. 

3. He does not represent more than one legal person in the Board 

4. The roles of CEO/General Manager and Chairman shall not be combined. 

The Members of the Board of Directors will be elected through a secret ballot by the Shareholders 

and each Shareholder will have the number of votes equivalent to the number of shares he owns 

and he will have the right to utilise it all for one candidate or divide it amongst the candidates 

of his choice by a vote card, the total number of votes should be equivalent to the number of 

shares he owns. 

The Membership which is done in violation of the above regulations will be null and void from 

the date of election and the Board of Directors of the Company will call a general body meeting 

to elect another Member within a maximum of one month from the date cancellation and the 

Company shall have the right to demand the compensation for the losses from the Member and 

everyone who facilitated his entry into the elections. 

If the Member of the Board of Directors loses any of the conditions necessary for the Membership, 

he must inform the board about the same and his place will be considered vacant from the date 

of information, otherwise, his Membership will cease to exist from the date it was found out by 

the Company, without prejudice to his liability in accordance with law. And his place will be filled 

up in accordance with the regulations of the Article (98) of Commercial Companies Law. 

The Board of Directors will elect Chairman and Vice Chairman from its Members. The Vice 

Chairman will officiate the Chairman when the latter is absent. 

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The Chairman of the Board of Directors shall implement the resolution of the Board of 

Directors and shall conduct the regular business of the Company under the supervision 

and control of the Board of Directors as per the authority specified in the Company’s 

Article of Association and internal regulation. 

If the office of a director becomes vacant, the Board of Directors will appoint a temporary Member 

who is fulfilling all the conditions of Membership stipulated in the previous Articles. In other case, 

regulations of Article (98) of Commercial Companies Law no.4/74 with regard to vacant seats 

will be applied. 

The Board of Directors, in the cases other than approving the distribution of dividends, approving 

the balance sheet, profit and loss account, and reports of Board, the Auditing Committee and 

Auditors may pass resolutions without the need to convene a meeting of the Board of Directors 

if five members out of seven members of the Board approve same in writing. 

The General Meeting shall specify the annual remuneration and sitting fees of the Board 

and sub-committees at not more than 5% of the net profits of the year, after deducting the 

legal and optional reserves in accordance with Article (101) of the Commercial Companies 

Law and notionally calculating or distributing the dividends to Shareholders at not less 

than 5% of the capital. The maximum total over-all limit of entire remuneration paid by the 

Company shall be RO 200,000 (two hundred thousand), with a sub-ceiling of RO 10,000 (ten 

thousand) as sitting fee for each Director. 

Where the Company makes loss or less profits to the extent that notionally calculating or 

distributing dividends to Shareholders is not possible, remuneration and sitting fees shall 

be determined in accordance with the rules issued by the Capital Market Authority. 

If the capital of the Company has eroded, the Company may pay sitting fees to the members 

of the Board for the meetings held during the year or years following the erosion of capital in 

accordance with the limits prescribed by the concerned authority. 

Any Director, who, by request, performs special services, travels or resides abroad for any 

purpose of the Company may be paid an extra remuneration. 

The remuneration for the Board shall be divided amongst the Directors in such proportions and 

manner as they, by agreement, may determine, failing which the remuneration will be divided 

equally amongst the Board. 

The Board shall have full authority to perform all acts required for the management of the 

Company pursuant to its objects. Such authority shall not be limited or restricted except as 

provided by Law or by the Articles of Association of the Company, or the resolution of the 

General Meeting. 

The Board shall be responsible for the following: 

A. To approve the Company’s commercial and financial policies together with its estimated 

budget with a view to achieving the objects of the Company and to maintain and promote 

the rights of its Shareholders; 

B. To develop, review and update necessary plans including strategic plans from time to time 

in order to put into operation the company’s objectives and carry out its activities in the light 

of the purpose underlying its establishment; 

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C. To adopt the Company’s disclosure measures and to follow up the implementation thereof 

in accordance with the disclosure rules and guidelines issued by the Capital Market 

Authority; 

D. To supervise the performance of the executive management and to ensure that the work 

proceeds in a manner which achieves the company’s objectives in the light of the purpose 

underlying its establishment; 

E. To provide accurate information to the Shareholders on the dates specified by the Capital 

Market Authority in the disclosure rules and guidelines; 

F. To appoint the Chief Executive Officer and/or the General Manager and/or the Deputy 

General Managers provided that neither of them shall be the Chairman of the Board. 

G. To appraise the performance of the employees mentioned in the previous item and to assess 

the work carried out by the committees formed by the board pursuant to Article (102) of the 

Commercial Companies law; 

H. To approve the financial statements related to the Company’s business and work results as 

submitted to the executive management to the board quarterly in away which reflects the 

exact financial position of the Company; 

I. To include in the annual report presented to the general meeting the reasons which justify 

the ability of the company to pursue its specified activities and the achievement of its 

objectives; 

J. To include in the financial statements a full statement of all amounts which a Director might 

have received during the course of each year including money paid to directors in their 

capacity as employees of the Company 

The Board shall introduce internal regulations for the regulation of the Company’s management, 

the business of the Company and the affairs of its employees within one year from the date 

of registration of the Company in the Commercial Register, in accordance with the rules 

issued by the Capital Market Authority. 

The Board shall not perform the following acts except if authorised to do so by the resolution 

of a General Meeting: 

a) Make gifts, except business gifts in small and customary amounts. 

b) Sell all or a substantial part of the Company’s assets. 

c) Mortgage or pledge the assets of the Company, except to secure debts of the Company 

incurred in the ordinary course of the Company’s business. 

d) Guarantee debts of third parties, except guarantees made in the ordinary course of 

business pursuant to the Company’s objects. 

The Board of Directors may appoint the Managing Director from the executive Members provided 

he is free for the Company’s works. 

The Company shall be bound by all acts performed by its board of directors, its chairman, 

managing director and all other executives, if any as long as they act in the name of the Company 

and within the scope of their powers. 

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It is not permitted for any of the Directors or main Company employees to utilise the information 

that reaches them in the capacity of their positions or jobs, for achieving any benefit for them or 

their minor children or for any of their relatives till the 4th degree, as a result of transaction in the 

Company shares. It is also not permitted for any of them who have direct or indirect interest with 

any authority who is involved in activities which aimed at influencing the prices of shares issued 

by the Company and the regulations of Article 109 and 110 of Company law will be applied in 

case of violation. 

A member of the board of directors or other related parties of the Company shall not have any 

direct or indirect interest in the transactions or contracts concluded by the Company for its 

account, except those concluded with them in accordance with the disclosure requirements of 

the CMA. 

The Members of the Board of Directors shall be liable to the Company, the shareholders and 

third parties for the damages caused by their acts in violation of the law and their acts which fall 

beyond the scope of their powers or by any fraud or negligence in the performance of their duties 

or by their failure to act as prudent men under certain circumstances. 

Any provisions or stipulations limiting the liability of the members of the Board of Directors shall 

be null and void, and the Company shall reimburse any director the costs and sums adjudged 

in any civil or criminal case brought against him as a result of his activities as a member of the 

Board of Directors of the Company in the event that final judgment in such case shall absolve 

the director of liability. 

The Company may institute an action against any director of the Company it deems liable for 

damages that have come upon it. The board of directors or the ordinary general meeting shall 

take a decision appointing a person to pursue the case on behalf of the Company and authorizing 

him to pay costs of the case from the funds of the company. Any shareholder may propose suing 

the members of the Board of Directors, and if the ordinary general meeting does not adopt his 

proposal, he may himself file the case on behalf of the Company. And the case is successful, 

such shareholder shall be reimbursed the costs and expenses of the case out of the sums 

adjudged and the balance shall be paid to the Company. 

It is not permitted to file a lawsuit on the Members of the Board of Directors or their heirs regarding 

the works they have done while discharging their duties, except in the case when the case is 

filed within 5 years from the date of holding the general body, wherein the Board of Directors 

submitted the accounts of the Company for the period including the act or the shortcoming 

which is the reason for the complaint. This period shall not apply to suit filed by the CMA. 

First Board of Directors 

A constitutive General Meeting of the Company is to be held after finalisation of the allotment 

of Shares and Shareholders attending the meeting may vote and elect the new Board of 

Directors. 

Announcement of the date and location for such shareholders general meeting shall be made in 

the major newspapers in Oman. 

Internal Regulations 

In accordance with the provisions set out in Article (68) of the CCL, the Company is required to 

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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. These regulations shall cover at least the following 

apart form the rules laid down by the Capital Market Authority: 

1) Organisational Structure of the Company stating therein the responsibilities related to the 

various posts of the Company and the reporting structure/ procedures. 

2) Specifying the extent of the authority vested with each post with regard to approval of the 

financial expenditure. 

3) 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. 

4) The policies related to the Purchases and Service Contracts. 

5) The minimum level of information required to be submitted to the Board of Directors. 

6) The authorities, duties and responsibilities relevant to the executive management and 

subcommittees constituted under the auspices of the Board of Directors of the Company. 

7) The policies related to Human Resources including the salaries, appointment, development, 

training, promotions and termination of the services etc., covering other relevant aspects. 

8) Investment Policies of the Company. 

9) Policies for Related Parties Transactions. 

10) Policies and measures for submission of material information in a transparent manner, to 

the Capital Market Authority and the Muscat Securities Market within the specified time 

including a definition of “material information”. 

11) Any other regulations that the Board of Directors of the Company may deem necessary to 

add for achieving adequate level of Corporate Governance. 

It may be mentioned that the Company has already put in place a number of these policies. The 

Company shall appropriately review the same in the light of its transformation into an SAOG 

Company and also formulate such additional policies and procedures that may be required in 

this context within the stipulated time period. 

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CHAPTER 18 

RIGHTS AND LIABILITIES OF SHAREHOLDERS 

I. Shareholder’s Liabilities: 

The liability of a Shareholder shall be limited to the payment of the value of the Shares he 

/ she / it subscribes. He / She / It shall not be liable for the debts of the Company except 

within the limit of the nominal value of the Shares subscribed for. 

Any person whose shareholding, along with his minor children’s shareholding, reaches 10% 

or more of the Company’s share capital, must inform the CMA about the same through 

a written communication. Further he 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, save in 

accordance with the holding rules set out by the CMA. 

All the shares of the Company shall have the same nominal value, and a share shall neither 

be divided nor shall it be owned by more than one person except when such ownership is 

by inheritance provided that the heirs are represented by the person whose name comes first 

in the register and the owners of the share shall be responsible severally and jointly for the 

liabilities arising from such ownership. However, the transfer of the share requires endorsement 

by all joint owners. 

The shares allotted to the Employees and the Managers shall be subject to the Lock-in Period. 

II. Shareholder’s Rights 

All Shares of a Joint Stock Company shall enjoy equal and inherent rights vested in their 

ownership. which, in accordance with the CCL are: 

1. The right to receive dividends declared by the general meeting. 

2. Preference rights to subscribe for new shares. 

3. The right to share in the distribution of the assets of the Company in the event of 

liquidation. 

4. The right to assign shares in accordance with the Law. 

5. The right to inspect the Balance Sheet, Profit & Loss Statement, and Shareholders’ 

Register of the Company. 

6. The right to receive notice of and to participate and vote in all general meetings either 

personally or by proxy (one vote for each Ordinary Share). 

7. The right to apply for the annulment of any resolution adopted by the general meeting 

or the Board if such resolution(s) are contrary to the prevailing laws, the Memorandum 

and Articles of Association or other internal regulations of the Company. 

8. The right to institute legal actions on behalf of the Company and its Shareholders against 

the Board or auditors thereof, pursuant to the CCL. 

9. The CMA may, upon material reasons being raised by Shareholders who own at least 

5% of the Shares of the Company, suspend resolutions passed by the general meeting 

of the Company which are passed in favour or against holders of any category of 

Shareholders or in the interests of the members of the Board or others. 

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III. Reports & Statements: 

- 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, Report of the 

Board, Report on the discussions held by the Board and their analysis and Report on the 

Organization & Management of the Company. 

- The un-audited Quarterly Financial Statements shall be forwarded to the Information Centre 

of Muscat Securities Market 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 Electronic 

Transmission System of the Centre. The said Centre shall also be provided with two copies 

duly endorsed by the Board. The Company shall also have it published within the said 

period. Whereas, the audited Balance Sheet shall be forwarded, submitted and published 

two weeks in advance of convening of the Annual Ordinary General Meeting. 

- The Board shall extend invitation to the Shareholders for the Annual Ordinary General 

Meeting within three months from date of ending of the financial year. The agenda for the 

Annual General Meeting shall include the following: 

1. To study and approve of the Report of the Board. 

2. To study and approve of the Report on the Management and Organization. 

3. To study and approve of the Auditors Report on the Balance Sheet, Profit & Loss 

Account. 

4. 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. 

5. 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. 

6. To review the annual remuneration (if any) of the members of the Board for the forthcoming 

financial year. 

7. To look into the transparency of any transactions held with the related parties during the 

previous financial year (if any). 

8. To make a note of any expected transactions with the related parties during the next 

financial year (if any). 

9. To appoint Auditors for the next financial year and fix their fees, taking into consideration 

the provisions laid down in the Law. 

The Board may convene the general meeting at any time and such meeting shall be 

convened whenever required by the law or the Memorandum and 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 

112

if necessary, shall include in the agenda any proposal put forward by 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 

shareholders or their proxies who represent at least half the capital of the company. If such 

a quorum is not formed, 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 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 resolution of 

the ordinary general meeting shall be adopted by relative majority of the vote. 

An Extraordinary General Meeting shall be convened to Consider and decide all matters 

which such meeting is specifically authorised to settle in accordance with the law or the 

Company’s Articles of Association. 

Any amendments to the Memorandum and Articles of Association shall not be valid unless 

approved by the Director General of Commerce and registered with the Commercial 

Registrar, Ministry of Commerce & Industry. 

The resolution of the extraordinary general meeting shall not be valid unless the meeting is 

attended by shareholders and proxies representing at least three-quarters of the Company’s 

capital. Failing such a quorum, 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 Company’s 

capital, provided such meeting is held within six weeks of the date of the first meeting. 

The resolutions of the extraordinary general meeting shall be adopted by a majority of threequarter 

of the votes cast in respect of a certain resolution, provided such resolution shall 

always receive votes representing more than fifty percent of the Company’s 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 resolution if adopted during the meeting in violation of the law or the 

provisions of the Company’s Articles of Association or its regulations, if any, or if adopted by 

fraud or abuse of authority by any person. 

IV. 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 Muscat Securities Market. The transfer of ownership shall 

also be entered in the Shareholders’ register in the Company and which shall include the 

Shareholder’s name, his nationality, domicile and the number of Shares he holds and their 

numbers. 

The shareholding of each individual shall not exceed the maximum limit prescribed and 

provided for in the CCL and Capital Market Law respectively, unless the necessary approvals 

are secured. 

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V. Constitutive General Meeting: 

- The calling of the Constitutive General Meeting of the Subscribers shall be treated as one 

of the requirements for the incorporation of a Joint Stock Company. This General Meeting 

shall look into all the measures that have been taken for incorporation of the Company 

under convening of the meeting. The Promoters shall, within thirty days from expiry of the 

Subscription invite the Subscribers to this meeting. The invitation and calling of this meeting 

shall be in accordance with the provisions set out in the CCL and the Company’s Articles of 

Association governing Extra Ordinary General Meetings. 

- The Promoters shall submit to the Constitutive General Meeting a report, together with 

supporting documents, including sufficient information on all the actions taken, the expenses 

incurred for incorporation of the Company, and on all the obligations committed by the 

Promoters on behalf of the Company that is under formation, together with the supporting 

documents. 

The Constitutive General Meeting shall have the authority to look into and pass resolution in 

respect of the following matters: 

1. To ratify the Report submitted by the Promoters with regard to the process of 

incorporation of the Company and expenses incurred by them. The Promoters shall be 

liable severally and jointly for the expenses incurred and commitments made on behalf 

of the Company under transformation which have not been ratified by the Constitutive 

General Meeting. 

2. To verify and confirm whether the necessary conditions governing the incorporation of 

the Company have been complied with. 

3. To approve the Memorandum & Articles of Association of the Company. The Meeting 

may amend the Memorandum & Articles of Association of the Company, however, such 

amendment(s) shall not become valid and operative until approved by the Director 

General of Commerce. 

4. To elect the members of the first Board of Directors. This Board shall be responsible 

for the registration of the Company with the Commercial Registrar within one month 

from the date of the Constitutive General Meeting. The members of the Board shall 

be liable severally and jointly for the damages arising from the failure to carry out this 

registration. 

5. To appoint the first External Auditors of the Company and fix their fees. 

The Expected Date of the Constitutive General Meeting (CGM): The CGM will be with 

in 30 days after the end of IPO and after finalising the share allotment. The share holders in 

the CGM will elect the first Board for the Company. The date for the Constitutive General 

Meeting will be announced in the Omani Newspapers. 

114

CHAPTER 19 

CONDITIONS AND PROCEDURES FOR THE SUBSCRIPTION OF THE SHARES 

I. The subscription for the Offered Shares shall be open to Omanis, Non Omanis, Individuals, 

Non Individuals and Corporate Bodies/Institutions/Investment Funds/Pension Funds. 

Likewise, it shall be open to Omani as well as non-Omani corporates, institutions, 

investment funds, and pension funds which have their accounts with Muscat Depository 

& Securities Registration Co., as on the date and / or during the subscription period. It is 

pertinent to mention here that it would be permissible for Foreign Nationals/Corporates to 

own shares of the Company once listed with Muscat Depository & Securities Registration 

Co., to an extent of 70% of the Share Capital, in accordance with the Articles of Association 


II. Prohibitions with regard to the Applications for subscription: 

The subscribers to the Shares issued as mentioned hereunder shall not be permitted to 

participate in the subscription: 

1) Sole Proprietorship Establishments. Whereas, the owner of a Sole Proprietorship 

Establishment would be required to subscribe in his name only if he so desires. 

2) Trust Accounts. Whereas, the Brokerage Companies would be required to address the 

Customers for the subscription in their personal names. 

3) Multiple Applications for the subscription. Whereas, it is prohibited for any person to 

submit more than one application for subscription in his personal name. 

4) Applications made under joint names, including the applications made in the name 

of legal heirs. Whereas, they or their legal attorney would be required to apply in their 

personal names. 

All such applications shall be rejected without contacting the applicant. 

III. Subscription on behalf of Minor Children: 

1) For the purpose of this Issue, any person born after (01/05/1990) shall be treated as 

Minor. 

2) Only a father may subscribe on behalf of his Minor children. 

3) If the subscription is made on behalf of a Minor by any person other than the father, 

he shall be required to attach a valid Sharia (Legal) Power of Attorney issued by the 

competent authorities authorising him to deal in the funds of the Minor through sale, 

purchase and investment. 

IV. Shareholder’s (investor’s) Number with Muscat Depository & Securities Registration 

Co. (SAOC) (“MDSRC”) 

1) Any person who desires to subscribe to the Offered Shares has to have an account with 

the MDSRC as per its working form, which may be obtained from its Head Office or its 

site on the World Wide Web or from brokerage companies. Each subscriber may open 

an account through the following outlets: 

- Head Office of the MDSRC based on the ground floor of the building of the CMA, Commercial 

Business District. 

- Branch of Muscat Securities Market based in Salalah. 

115

- Office of the Brokerage Companies that are licensed by Muscat Securities Market. 

- By fax no. 24817491. 

2) With regard to the investors who presently hold accounts with the MDSRC, they shall 

be required, before the subscription, to confirm whether their accounts contain all their 

basic particulars, those being the name in full, postal address, Civil Status No., (as 

mentioned in the Personal Card (Civil) or Civil No., furnished in the Passport or Civil No., 

or as provided for in the new Birth Certificate) and details of the Bank Account. Every 

shareholder may update his particulars through the outlets mentioned above. 

3) All correspondence, including allocation notices and dividend cheques, shall be sent to 

the subscriber at the address recorded at the MDSRC. Therefore, all subscribers shall 

verify the correctness of such addresses. 

4) Each subscriber shall be required, after opening the account or updating his particulars, 

to secure from the MDRSC, the right number so as to have it registered in the Application 

for the subscription. The investor himself shall be responsible for verification of the 

number furnished in the Application for the subscription. The applications not bearing 

the correct Account Numbers shall be rejected without contacting the subscriber. 

For more information on these Procedures, you are requested to contact: 

Muscat Depository & Securities Registration Co., SAOC 

Tel. 24814827 - Fax. 24817491 

http: // www.csdoman.co.om/ 

Subscription Period: 

The subscription shall commence on May 5, 2008, and end on June 3, 2008 with the end of the 

official working hours of the Banks. 

Minimum Limit of Public subscription: 

The number of shares subscribed by each Person shall not be less than 1000 Shares and in 

multiples of 100 thereafter. For juristic persons, corporates, investment funds, and pension funds, 

Shares subscribed to shall not be less than 10,100 shares and in multiples of 100 thereafter. 

Maximum Limit of Public subscription: 

It shall not be permissible for any person, himself and his Minor children, and for any juristic 

person to subscribe for more than 10% of the total issue size. In other words, the maximum limit 

for one subscriber and his Minor children shall not exceed 2,500,000 (two million, five hundred 

thousand) Shares. 

For the purpose of calculation of this percentage the application for the subscription of the father 

(or guardian) shall be merged with the applications of the Minor children. If the volume of the 

shares subscribed exceeds the said percentage, the shares registered under each application 

shall be reduced proportionately before making the allotment. 

Particulars of the Bank Account: 

1) Each applicant shall be required to furnish the particulars of his bank account. The applicant 

116

shall not use the bank account number of any other person except in case of Minor 

children. 

2) If the bank account is different from the Bank receiving the subscription, the applicant shall 

be required to submit a document in evidence of correctness of the bank account particulars 

as provided for in the application. This can be done by submitting any document from the 

applicant’s bank which shows the account name and number Such document may be a 

bank statement or a letter or any document issued by the said bank containing the said 

information. The applicant shall ensure that the evidence submitted is clearly legible and 

contains the full name and number of the account holder. For the sake of clarification, no 

proof of the bank account is required if the bank account is with the bank through which the 

subscription is submitted. 

3) In accordance with the instructions issued by the CMA, the particulars of the bank account 

referred to above shall be recorded in the Registers of the MDSRC. This shall be used in 

the event of a transfer of any excess funds of the subscriptionor the crediting of a future 

dividends . An applicant who already has his bank account registered with the Registers of 

the MDSRC, the bank account number provided for in the application for the subscription 

will be used only for the purpose of a transfer of any excess sums. 

4) The application for subscription containing the bank account number of a person other than 

the applicant shall be rejected, with the exception of applications made on behalf of Minor 

children that contain bank account particulars of their fathers. 

Documentation Required: 

1) Proof of Bank Account: In case the bank account is different from the bank to which the 

application is submitted, the proof of such account should be attached to the subscription 

form. 

2) Authorised Signatory: In the case a person is signing the application form on behalf of 

any other person in his capacity as the authorised signatory (with the exception of the 

subscription made by a father on behalf of his Minor children), a copy of adequate legal 

documentation should be submitted; Such documentation should not have expired and 

should be registered with a competent legal authority. 

Mode of subscription: 

1) The subscriber shall be responsible for satisfying all the particulars and the validity of the 

information in the application. Banks receiving the subscription have been instructed to 

accept the applications for subscription satisfying all the requirements of the application 

forms and the Prospectus. 

2) The subscriber, before filling the application form, shall read the Prospectus and the 

subscription terms and conditions. 

3) The subscriber shall fill in the application form including the subscriber number with the 

MDRSC, Civil Number/Passport Number, and Date of Birth in the case of Minor children. 

4) The subscriber shall submit the application form to one of the banks receiving the subscription 

referred to in the Prospectus and pay the value of the shares as specified in the Prospectus 

and attaching the identification documents. 

117

5) Where the value of the shares is paid by cheque or remittance, it shall be in the name of 

“Voltamp Energy SAOG (under transformation) (public subscription)”. 

Banks receiving the subscription: 

The applications for subscription shall be accepted by one of the following commercial banks 

during the official working hours only: 

1. Bank Muscat SAOG 

2. Oman Arab Bank SAOC 

3. Bank Dhofar SAOG 

The bank receiving the subscription shall accept the application for subscription after confirmation 

of compliance of the procedure and subject matter in line with the requirements as provided for 

in the Prospectus. The bank must instruct the subscribers to comply and fulfill any requirement 

that may appear in the application submitted. 

The subscriber shall be responsible for submission of his application for subscription to one of 

the banks receiving the subscription before closing of the period for subscription. In this regard, 

the bank shall have the right not to accept any application for subscription that reaches it after 

the official working hours on the closing date of the period for subscription. 

Acceptance of the Applications for subscription: 

The banks receiving the subscription shall not accept applications for subscription under the 

following circumstances: 

1) If the application is not signed by the applicant. 

2) If the subscription price for the Offered Shares applied for is not paid pursuant to the 

conditions provided for in the Prospectus. 

3) If the cheque through which payment was made is returned dishonored. 

4) If the application does not have the number registered with the MDRSC. 

5) If the application is submitted under the joint names. 

6) If the subscriber is a sole proprietorship establishment or trust account. 

7) If the shareholder number is incorrect. 

8) If the subscriber submits more than one application in the same name, all of them shall be 

rejected. 

9) If the supporting documents referred to in the Prospectus are not enclosed with the 

application. 

10) If the application does not contain the bank account of the subscriber. 

11) If the bank account details of the subscriber in the application are incorrect. 

12) If the bank account details are not relevant to the subscriber, with the exception of applications 

submitted in the name of Minor children, who are allowed to make use of the bank account 

details held by their fathers. 

13) If any legal or regulatory requirements are not met. 

118

If the bank observes, after receipt of the application and before expiry of the time schedule 

prescribed for handing over of the applications to the Lead Issue Manager, that the application 

has not complied with the legal requirements as provided for in the Prospectus, due effort shall 

be taken to contact the subscriber so as to correct the mistake detected. In the case of failure to 

have the mistake corrected within the period referred to, the bank receiving the subscription shall 

return the application for the subscription together with the subscription value before expiry of 

the period specified for handing over of the applications to the Lead Issue Manager. 

Refusal of subscription Applications: 

The Lead Issue Manager may reject any applications under any of the conditions referred to above, 

after securing the approval of the CMA. The Lead Issue Manager shall submit a comprehensive 

report to the CMA indicating the reasons behind such rejection. 

Enquiry & Complaints: 

The subscribers who intend to seek clarification or file complaints with regard to the issues related 

to the allotment or rejected applications or refund of the funds in excess of the subscription may 

contact the branch of the bank where the subscription was made. In case from the enquiry is not 

resolved by the branch, the subscriber should contact the person concerned as hereunder: 

Bank Person in Charge Postal Address Phone No. Fax No. Email 

Bank 

Muscat 

SAOG 

Oman 

Arab 

Bank 

SAOC 

Bank 

Dhofar 

SAOG 

Talal Abdul Hamid 

Al Zadjali 

(Wholesale Banking 

back office) 

PO Box 134, 

Ruwi, PC112, 

Sultanate of 

Oman 

Osama Qinna PO Box 2010, 

Ruwi 112, 

Muscat, Oman 

Mr. Adil Abdullah 

A. Razaq Al Hindi 

PO Box 

1507, Ruwi, 

Postal Code 

112,Sultanate 

of Oman 

119 

24768213/14 24788864 tlzadjali@ 

bankmuscat. 

com 

24762324 24793953 o.qinna@ 

oabinvest.com 

24795517 24791131 AARazaq@ 

bankdhofar.com 

If the bank receiving the subscription fails to resolve the enquiry/complaint, it shall refer the 

subject matter to the Lead Issue Manager and inform subscriber of the results. The subscriber 

should remain in contact only with the Bank receiving the subscription . 

Overall Offering Split and Allotment Procedures: 

In case of over-subscription, the offering of 25,000,000 Ordinary Shares shall be split among the 

eligible investor groups, in the following portions: 

Category I – Individuals 

17,500,000 (seventeen million five hundred thousand) shares, being 70% of the Offered Shares 

for Individual applicants applying for a maximum of 10,000 (Ten Thousand) shares. Distribution 

of shares shall be on pro-rata basis. Individual Investors shall comprise of only natural persons.

Category II – Non Individual Investors 

6,250,000 (six million two hundred fifty thousand) shares, being 25% of the Offered Shares for 

both natural and juristic persons including Individual applicants applying for more than 10,000 

shares and for Corporate bodies/ Institutions / Investment Funds. Distribution of shares will be 

on pro-rata basis. 

Category III – Employees and Managers 

1,000,000 (one million) shares, being 4% of the Offered Shares for employees up to a maximum 

value equivalent to 19 times of their basic salary on firm allotment basis. 

250,000 (two hundred fifty thousand) shares, being 1% of the Offered Shares for Managers upto 

maximum of 50,000 shares each Manager of five Managers on firm allotment basis. 

Any undersubcription in Category I shall be added to shares allocated for Category II and vice 

versa. Any undersubcription in Category III shall be added to Category I (Retail Investors). 

Allotment for Foreign Nationals will be limited to a maximum of 70% of the total Shares offered. 

Foreign Corporate Body/ Institution/ Investment Fund is defined as one which is not incorporated 

in the Sultanate of Oman. 

The final allocation on the above basis will be decided by the Lead Issue Manager and the 

Company in consultation with the CMA. 

Basis for Undersubscribed Shares: 

In case of a shortfall in subscription the shortfall will be subscribed by the Underwriters. 

The following table shows expected time schedule for completion of the subscription 

procedures: 

Procedure Date 

Commencement of subscription 5/5/2008 

Closing of subscription 3/6/2008 

Due Date for the Issue Manager to receive the subscription Applications and 13/6/2008 

Final Registers of the subscribers from the Banks receiving the subscription as 

per the understanding arrived at 

Notifying the Capital Market Authority of the outcome of the subscription and 18/6/2008 

Proposal with regard to the allotment 

Approval of the Capital Market Authority with regard to the proposal for the 

allotment 

120 

21/6/2008 

Commencement of refund and dispatch of the notices regarding allotment and 

Constitutive General Meeting Invitation 

22/6/2008 

Constitutive General Meeting 3/7/2008 

Registering the company at the Commercial Registrar 13/7/2008 

Listing of the shares with Muscat Securities Market 16/7/2008

Listing & Trading of the shares of the Company: 

The Offered Shares shall be listed on the Muscat Securities Market in accordance with the listing 

rules and regulations currently in force. 

The expected date of listing in the above table is subject to the completion of legal quorum of 

the Constitutive General Meeting for the first time. 

Responsibilities & Obligations: 

The Lead Issue Manager, Banks receiving the subscription and MDRSC shall abide by the 

responsibilities and functions specified pursuant to the instructions and regulations laid down by 

the CMA. The said bodies shall also abide by any other responsibilities that are provided for in 

the agreements entered into between them and the Company. 

The Parties concerned shall 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 Lead Issue Manager shall be the body responsible before the surveillance 

authorities in taking suitable steps and measures for repairing such damages. 

Allotment Letters and Refund of Money; 

The Lead Issue Manager will arrange to allot the shares to the applicants with in 15 days after the 

end of IPO and the excess money will be refunded to the eligible applicants. The Issue Manager 

will send allotment letters to the applicants who have been allotted shares as per the addresses 

registered with the MDSRC 

121

CHAPTER 20 

I. Company issuing the Securities: 

UNDERTAKINGS 

The Promoters/Selling Shareholders jointly and severally offer undertaking that: 

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. 

2) all the provisions set out in the Capital Market Law, the CCL, and the rules and regulations 

issued pursuant to them have been complied with. 

For the Promoters/Selling Shareholders: (Authorised Signatories) 

Sr. Name Signature 

1 Mr. Qais bin Mohamed Al Yousef Sd/- 

2 Mr. Saibal Sen (on behalf of SABCO LLC) Sd/- 

II. Lead Issue Manager: 

In accordance with the responsibilities prescribed by Article 3 of the Executive Regulations 

of the Capital Market Law issued under Ministerial Decision No. 4/2001, and instructions 

issued by the CMA, we have reviewed all the relevant documents and other material required 

for the preparation of the Prospectus pertaining to the issue of shares of the Company. 

The Promoters/Selling Shareholders are responsible for the authenticity of the information 

contained in the Prospectus, and they have confirmed that no material information has been 

omitted, the omission of which would render this Prospectus misleading. 

We confirm that we have taken all necessary due care as required by the profession with 

regard to the Prospectus that has been prepared under our supervision, on the basis of the 

audit works referred to above and discussions held with the Company, its management 

and other officials and on the basis of the auditing carried out by us with the concerned 

authorities with regard to the subject matter of the Issue, profit projections, criteria and 

justifications for the pricing, and contents of the documents submitted to us. 

We further confirm as hereunder; 

1) We have taken all necessary and reasonable care in ensuring that the information furnished 

to us by the Company, and contained in the Prospectus, is consistent with the facts available 

in the documents, material and other documents pertaining to the Issue. 

2) On the basis of our perusal and information made available to us by the Company, the 

Company has neither concealed any fundamental information nor omitted any material 

information, the omission of which would have made the Prospectus misleading. 

3) The Prospectus and Issue relevant to it are consistent with all the rules and conditions 

governing transparency as provided for in the Capital Market Law and its amendments 

thereof, the Executive Regulations of the Capital Market Law and its amendments thereof, 

the applicable specimen Prospectus available with the CMA and the CCL. 

122

4) The data and information which have been presented in the Prospectus in Arabic (with its 

unofficial translation in English) are correct, reasonable and adequate as per our perusal so 

as to assist the investor in taking an appropriate decision whether or not to participate in the 

offer of the securities the subject matter of this Prospectus. 

Full Name: Oman Arab Bank SAOC 

123 


Signature and Seal Sd/- 

III. Legal Advisor 

The Legal Advisor, whose name appears below, confirms that all the procedures undertaken 

with regard to offering of the Securities and the subject matter of the Prospectus, are in 

line with the laws and legislations related to the Company’s business, the CCL, the Capital 

Market Law and the regulation and directives issued pursuant to them, the requirement 

and rules for the issue of shares issued by the CMA, the applicable Specimen Prospectus 

available with the CMA, the Memorandum and Articles of Association and the resolutions of 

the general meeting and the board of directors of the Company. The Company has obtained 

all the consents and approvals of the official authorities are required to carry out the activities 

the subject matter of the Prospectus. 

Full Name: Al Busaidy, Mansoor Jamal & Co. 

Signature and Seal Sd/- 

IV. Underwriters 

The underwriters, whose names appear below, confirm that we have reviewed all studies 

regarding the transformation of the Company from a limited liability company to a joint stock 

company as per the Prospectus, and we have agreed to underwrite the issue out of our 

conviction of its feasibility in light of the information provided in the studies and the financial 

projections after transformation. 


Sd/- 

United Securities LLC 

Sd/- 

Vision Investment Services Co. SAOC 

Sd/- 

Gulf Baader Capital Markets SAOC 

Sd/-


Energising lives 

Energising Oman

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