Step -2: Using the financial report answer the following questions: 1. Brief introduction about the company? (1 Mark) Established: Principle activities Branches: No. of Employees: No. of Omani Employees: No. of Non- Omani Employees Head office Location: 2. List various items (only account heads, no need write figures) appear under the following categories: (1.5 Marks) Category a) List of Assets b) List of Liabilities c) Owners' Equity d) List of Revenues c) List of Expenses Account Names 3. Develop a basic "accounting equation" (Assets Liability Owner's Equity) for the year 2018 & 2019. (1 mark) From Balance sheet 4. Calculate "Net Profit" of the company for the year 2018 & 2019 by using the "Simple Income Statement" format which you learned in the class? (1.5 Mark) (from income statement) 5. "Company's net income appears directly on the income statement and the owner's equity statements, and it is included indirectly in the company's balance sheet". Do you agree? Explain how the net income is shown in Balance Sheet. (1.5 Marks) 6. What is a total assets value of the company during 2018 and 2019? Provide calculation (1.5 Mark) From Balance sheet 7. What is a total Liability value of the company during 2018 and 2019? Provide calculation (1.5 Mark) From Balance sheet & What is a total Owner's Equity value of the company during 2018 and 2019? Provide calculation (1 Mark) From Balance sheet What is the accounting period of the company? ( 1/2 Mark) 10. Which method (periodic or perpetual) the company has used to calculate the Cost of Inventory? Explain briefly. From Note (if the company is service organization, then explain both methods briefly) (1 Mark) Important Instructions: It is an individual assignment. .Total marks: 15 (12 marks for report & 3 marks for interview/viva-voce by teacher). . Better to choose Manufacturing Company rather than servicing company. Attach the copy of the "Financial Reports" (Income Statement & Balance Sheet) along with your completed assignment. 2019,2018 .Register name and company which you have chosen for assignment with your teacher during week 3, same company cannot be taken by more than one student. Income Statement (statement of profit and loss) & Balance Sheet( statement of financial postion) All the best!!! Page 1 + manCables OMAN CABLES INDUSTRY (SAOG) MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT Industry Structure and Development The Cable Industry is a part of Electrical Sector which serves to projects related to basic Infrastructure of commercial or residential nature, various industries, and Government utilities and other oil and gas projects. These projects tend to be capital intensive and thus are dependent on long term strategy. growth of economy and available financial resources. Oman Cables Industry (SAOG) (OCI) develops, manufactures and markets variety of electrical cables and conductors. OCI product portfolio includes Medium voltage power cables, Low voltage power and Control cables, Fire Resistant Cables, Instrumentation cables, Pilot cables, Overhead power transmission line conductors and Building wires. In markets where OCI operates, Copper is the main material used in electrical cables. However, there is a recent trend towards using aluminum in some market sectors. OCI is carefully monitoring the situation and OCI has capable of processing both materials. Cable Industry is very competitive and there are many manufactures in a region. Emerging trend is towards consolidation. Prysmian, the largest cable company in world, owns a majority stake in OCI. Opportunities and Threats In the GCC markets where OCI operates, cables supply is mainly linked to large projects which in turn is linked to oil prices and Government revenue. These market having favorable demography and growing population present a long term opportunity for Cable Industry. Oil prices which had drop significantly by end 2015 have been on a steady increase during 2018, however since October 2018 the upward trend has been reversed. Early 2019 there was a small recovery, but not strong enough to reduce the pressure on GCC economies. OC! and the Prysmian Group, are poised to build on mutually beneficial synergies and can tap into each other strengths have a successful commercial approach regionally and globally. The demand for cables in the region continue to attract many regional and international cable suppliers creating a very competitive environment. OCI has plans and strategies in place to counter this through market development, product diversification and cost reduction. The capabilities and positioning can be leveraged swiftly to seize the growth opportunities that may emerge for large projects or for an increase in the demand for power cables within its markets. Segment Performance The approach of Oman Cables of catering to diverse markets with a varied product range serving a wide spectrum of consumers has served well for the company. Oman Cables has performed well across all geographical segments and product categories in first half of 2019. The performance in the third quarter of 2019 was affected due to seasonality and lack of major projects. In the fourth quarter progress on major project business avoided further impact of slowdown in the market. The margin erosion which was witnessed during 2017 and continued in 2018, has been reversed in 2019 with cost reduction projects. OCI subsidiary, OAPIL, which has reported loss in 2017 due to disruption caused as effect of declaration of Force Majeure in August 2017 by Sohar Aluminum, the only supplier of input materials to OAPIL, has recovered partially in 2018. Performance of OAPIL has improved further in 2019 with higher profitability and better control on fixed costs. Outlook The lower oil prices, copper price and the geo-political situation is effecting the overall economic situation in the markets where OCI operates. However, it is hoped that this situation may reverse slowly. Oman Cables Industry (SAOG) CR#: 1186752 OCI expects to maintain its presence in the market and is well equipped to face the challenges based on operational excellence executed by a customer focused performance, efficient resource utilization, managing the cost structure, perform a market driven expansion, and sound financial discipline. The outlook for Oman Aluminum Industries LLC (OAPIL) is challenging due to pressure on premiums at global level. Risk and Concerns OCI main markets were heavily influenced by oil prices. Low oil prices may negatively impact capital spend on major projects in the current year thereby affecting the local economies and GDP. This may have a cascading effect on the demand for power cables. This coupled with the established capacity in the region may result in pressure on pricing. The domestic market may remain stable as per the economic outlook. OCI will remain vigilant and ensure that supplying a superior product with competitive pricing is maintained. OCI works carefully to monitor the developments in the potential countries for future business. The company strives to find the balance between the business opportunities and the potential risks involved and cautiously builds market confidence Internal Control Systems and their adequacy The company has sound internal control systems and operating procedures in place. The operations are audited by a professional internal audit team, external statutory financial auditors and ISO auditors. OCI is also routinely audited by multinational corporations as a part of their stringent pre- qualification processes and product approvals. These audits include the compliance of the operational activities and Health, Safety and Environmental (HSE) aspects. Oman Cables Industry is driven by Corporate Governance through its strict ethical policies and emphasis on customer satisfaction. OmanCables Sales and Profitability The operational performance of the Group for the last 5 years is as below: 2015 2016 2017 2018 2019 Sales (RO' 000) 283,470 228,639 242,258 247,011 210,079 Profit after Tax (RO' 000) 18,507 15,254 6,851 9,214 6,972 Equity (RO' 000) 92,738 101,908 99,978 102,723 103,735 Dividend (%) 90% 85% 45% 45% *35% recommended by the Board of Directors Conclusion During 2019, the company and group has reported lower sales due to struggle in GCC markets but with better margins mainly due to efficiency projects and severe cost control on overheads. OCI has long term marketing plans for utilization of production capacity and overall emphasis on operational excellence, with synergies from Prysmian Group. OCI performance is possible due to its excellent relationship and support of the prestigious customer base, other stakeholders and dedicated employees. The Executive Management, with the guidance of the Board of Directors is confident to improve its market position and increase stakeholder's value