الرسالة رئيس مجلس الإدارة

راشد بن سيف السعدي

رئيس

Board of Directors’ Report for the year ended 31 December 2022

Dear Shareholders,

On behalf of the Board of Directors of Taageer Finance Company SAOG, I am pleased to present the audited financial statements for the year ended 31st December 2022.

Performance Summary

As per the financial results for the year 2022 the total portfolio increased by 21.67% to 307 Million, as compared 252 Million in 2021. Total Income for the year ended December 31, 2022 is RO 23.2 million as compared to RO 18.9 million for the year ended December 31, 2021 registering an growth of 23.01%. Interest Expenses for the year 2022 stood at RO 9.35 Million as compared to RO 8.23 million for the year 2021, an increment of 13.62%. The Company recorded Operating Profit of RO 7.967 Million before Expected Credit Losses (ECL) charge and taxation for the year 2022 as against RO 5.86 Million for the previous year, a growth of 36.05%. Net Profit after ECL and taxation stood at RO 3.380 Million for the year 2022 vis-à-vis RO 2.543 Million for the year 2021, a rise of 32.91%. Cumulative borrowings including unsecured non-convertible bonds stood at RO 162 million (2021 – RO 136 million).

ECL increased from 2.854 million in 2021 to 3.991 million in the current year, an increase of 39.84%. Cumulative provisions as at Dec 2022 were RO 24.675 million as per IFRS 9 requirements, an increase of 23.07% as compared to last year, reflecting prudence judgement on ECL.

Funding Diversification

Focusing on the need for diversification of funding avenues, Taageer Finance successfully issued 2 year Unsecured Non-convertible Subordinated Bonds worth RO 14.630 million through private placement which were oversubscribed by 195%, showing the continued and strengthened trust of investors in the company.

Furthermore, the company increased its corporate deposits base to 22 million in 2022 as compared to 9.8 million in 2021 recording an increase of 123%.

Digitalization

The company achieved several milestones relating to its digital transformation strategy including redesign and relaunch of website, relaunch of more customer centric and service oriented Mobile App, investment in infrastructure upgrades and internal process automation to ensure superior services to customers.

Portfolio Quality & Customer Service

The company has taken several measures to enhance quality of portfolio through strengthening credit requirements and streamlining the collection processes. The company has been constantly focusing on coming up with innovative ways to retain clients and serve them in the best possible way.

Proposed Dividends

The company has distributed dividends consistently year on year since the commencement of business. The Board of Directors are pleased to recommend a cash dividend of 5 Baizas per share (RO 1.293 m) and stock dividend of 2 Baizas per share (RO 0.517 m) for the financial year 2022, for the approval of the shareholders at the Annual General Meeting to be held on March 29, 2023.

Corporate Social Responsibility (CSR)

During the year the company kept its spirit of contributing to the community by taking several initiatives to support CSR activities in the areas of Education and Health. The company made a total of RO 14,804 in donations in the above mentioned fields including RO 6,000 made to Oman Charitable Association as per Ministerial Decision No. 205/2021 (Article 1).

Corporate Governance

Company continued its commitment of adhering to the highest standards of Compliance and Corporate Governance. As elicited more elaborately in the Corporate Governance Report, we assure that the Company has in place policies and procedures that are commensurate to the operations and established internal controls.

Future Outlook

The infrastructure sector continues to play role in paving the way for societies towards economic recovery, reinforced by sustainable and resilient growth. Oman has approved its annual budget for 2023, allocating 13.1 billion Omani riyals ($34.0bn) for spending, with a focus on basic public services, from health to social support, stimulating investment. This reflects a positive outlook for business growth.

Rating agencies have improved the sovereign ratings following positive movements in key fiscal metrics, including government debt, GDP and the budget deficit.

With its strong leadership and skilled management team, the Company is well placed to maintain its high standards in doing business through technological innovation, liability management, process automation. With the expected improvement in the economy and the customer centric approach being adopted by the Company the year 2023 looks promising.

Acknowledgement

On behalf of the Board of Directors, I wish to express sincere gratitude to His Majesty Sultan Haitham bin Tareq bin Taimour for his vision and wise leadership.

I would also like to take this opportunity to express our sincere appreciation and acknowledgement for the guidance and support from the Central Bank of Oman, Capital Market Authority and Muscat Securities Market. We are also grateful to our shareholders, bankers, dealers and customers for their continued trust, confidence and support. Finally, the Board would like to appreciate and thank the management and the staff for all their hard work and efforts.

On Behalf of the Board of Directors

Rashid bin Saif Al Saadi

Chairman