Chairman's Message

Dear Shareholders,

On behalf of the Board of Directors of Taageer Finance Company SAOG, I am pleased to present our audited financial statements for the year ended 31stDecember, 2015.

Company’s Performance of 2015

Your Company has registered a Profit after Tax of RO 4.421 million in 2015 as against RO 3.883 Million in 2014. The Company’s net leasing portfolio has grown by 18.03% from RO 107.306 million at 31st December 2014 to RO 126.656 Million at 31st December, 2015. This growth in our portfolio is a direct result of the increased business during the year which had led to a triple fold growth rate as compared to a growth of 5.18% during the previous year. Your company has achieved a return on shareholders’ funds of 12.88% for 2015 as against 11.97% in 2014. You can see a detailed review of the operational results for the Company in the Management Discussion and Analysis Report attached.

Outlook for 2016 

Declining Oil prices at the start of the year 2015 caused some concerns but the proactive control measures adopted by the Government have gone a long way to alleviate these. Some of the steps initiated by the Government include the management of state spending, the reduction of subsidies, an increase in taxation etc. The Government’s five-year economic plan seeks to diversify the Omani economy, targeting sectors such as manufacturing, mining, transport and tourism, and to attract a notable part of the required investments from the private sector.

While the experts believe that the Oil Prices are expected to increase gradually towards the end of year 2016, the Government with its strong vision has already initiated positive steps coupled with private consumption and investments, to boost the economy. The prospects for the leasing and finance industry appears to be good. The experts foresee the GDP increasing at a broadly steady pace of 2.5%.


The competition among finance and leasing companies (FLCs), continued to be intense during the year 2015 and the same trend is expected to continue during the year 2016 as well. Banks have resorted to increasing their lending rates with an expectation of liquidity pressures in the economy. The short-term lending rates by banks have been increasing steadily which has put pressure on borrowing cost for FLCs and poses a challenge to the business. Due to the overall tightening of liquidity, the Industry could face some more challenges in collection which may result in an increase in NPAs. However, the management team are closely monitoring the situation and will initiate corrective action if necessary.

5-year Business Strategy Plan

 
In view of the competitive business environment and the expected trend going forward, and keeping in view the fact that the full management team with expertise and experience is in place, the recently concluded 5-year strategy plan envisages diversification into new sectors, other than only the Construction and Equipment finance business within the regulatory framework. In addition to this your Company is also actively evaluating various growth options to forge ahead and be a leader in the Industry.

An active and aggressive Marketing and Branding strategy is projected to be adopted during 2016 to forge ahead towards the Vision statement “To be a leading Finance Company in the region”. As part of this, the management team will have a more concentrated business approach to sustain its growth plan. Your Company also understands that this approach needs to be combined with enhancing the IT Infrastructure to embed latest technology options available to ensure utmost customer satisfaction. We are confident that with the strong commitment of the shareholders the business strategy is bound to succeed.

Proposed dividend

The Board of Directors is pleased to recommend a cash dividend of 9.4% (RO 2.384 million) for approval by the shareholders at the Annual General Meeting to be held on March 28, 2016.

Paid up capital

 
With a paid up share capital of RO 25.359 million as at 31st December 2015, your Company is well capitalized and in compliance with the guidelines of the Central Bank of Oman.

 

Sudan Investment

 
Your company holds a 5% stake in equity capital of The Arab Leasing Company, Sudan, with a carrying value of RO 582K as at 31st December, 2015.

TALC, Sudan has paid a dividend of RO 31K for the year 2014.

Change in the Composition of the Board

During the year 2015, the new Board of Directors was elected during March 2015 Annual General Meeting. The Audit Committee and Executive Committee were also re-constituted at the Board Meeting held immediately after the Annual General Meeting held on 19th March 2015.

Strengthening Human resources

Your company has continued to invest in Human Resources to sustain its growth in assets.

Your Company strives to establish a recognition, review and learning mechanism by actively engaging the team in the processes by creating a participative atmosphere bringing the best out of them in line with the recently concluded 5-year Strategy Plan. Initiatives have already been taken to equip ourselves with specialized expertise in human resources in line with the new business sectors envisaged in the Strategy Plan. 

Taageer sees its people as being an integral part of the success of its business model. It constantly looks at the development goals of its employees to enable them to enhance their abilities and achieve measurable and sustainable results. 

Corporate Governance

Your company is committed to adhering to the highest standards of Compliance and Corporate Governance. A separate report on Corporate Governance is enclosed.

Acknowledgement

On behalf of the Board of Directors, I wish to express sincere gratitude to His Majesty Sultan Qaboos bin Said 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
 
 
Faisal Al Hashar
Chairman