BMMI B S C : Results

BMMI B.S.C.

REPORT OF THE BOARD OF DIRECTORS, INDEPENDENT AUDITOR'S REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

31 DECEMBER 2023

Chairman's statement

On behalf of the Board of Directors, I am pleased to present the Group's Annual Report and consolidated financial statements for the year 2023. I am proud to report that BMMI has once again proven its resilience, ultimately achieving a successful year.

The year 2023 presented its share of challenges as the world faced several global conflicts that inevitably affected our business operations. However, thanks to BMMI's solid strategy, adaptability and the dedication and hard work of our team, we were able to navigate these challenges. The Board continuously and closely monitors the business environment so as to tailor the Groups strategy to respond and overcome challenges identified.

I am pleased to announce that BMMI has achieved net profit of BD5.97 million. Several actions have been taken to ensure the Group optimises its expenses both for the current and future years. These measures would effectively ensure that the Group is placed in a strong position for all its stakeholders when markets stabilise.

Throughout the year, BMMI remained steadfast in its commitment to delivering results and serving our customers with excellence. Our strategic investment into maintaining exceptional retail and distribution capabilities continues to prove to be the cornerstone of our success. BMMI's dedication to offering exceptional customer service has proven to once again set our offering apart, helping us build new business relationships and strengthen longstanding ones.

In 2023, BMMI marked 140 years of uninterrupted operations, and building on our long legacy of success, we were honoured to be one only 15 companies in Bahrain that was included in the first ever Fortune 500 Arabia list that ranks the 500 largest corporations in the Arab region according to their annual revenues. This accolade is yet another tangible demonstration of BMMI's resilience and longevity.

As we marked this momentous anniversary, we further reaffirmed our responsibility to the community which is an integral part of how we operate. Working with various charitable organisations and NGOs, we continued upholding existing initiatives at national, regional and international levels, as well as supporting new and important initiatives. The Alosra Charitable Foundation and our Corporate Sponsorship Schemes are a prime example of BMMI's commitment to sustainable development of the societies in the countries in which it operates.

Looking ahead, we are optimistic about the future and remain committed to the continued growth and success of BMMI. I am confident that with the continued support of our shareholders, stakeholders, and employees, we will overcome any future challenges and prosper in the years to come.

We would like to inform our shareholders that during year ended 31 December 2023, Board Remuneration fees (including representation allowances, attendance allowances, and expenses) amounted to BD 301,000 In addition, during the year ended 31 December 2023 salaries and other allowances paid to key Management amounted to BD 930,774 according to the following tables:

Remunerationsof

chairmantheand

BOD

allowanceTotalfor

Boardattending committeeand meetings

Salaries

Others

Total

Remunerationsof

chairmantheand

BOD

Bonus

plansIncentive

Others

Total

service-of-End award

Aggregateamount

includenot(Doesexpense

allowance)

ExpensesAllowance

Fixed remunerations

Variable remunerations

Name

First: Independent / Non-Executive Directors:

1- Mr. Suhail Hajee	18,000			23,000		-		-		41,000		-	-	-	-	-	-	-	-
2- Mr. Shawqi Fakhro	20,000			22,000		-		-		42,500		-	-	-	-	-	-	-	-
3- Mr. Jehad Amin	20,000			20,500		-		-		40,500		-	-	-	-	-	-	-	-
5- Mr. Ahmed Al Saad	15,000			19,000		-		-		34,000		-	-	-	-	-	-	-	-
6- Mr. Abbas Radhi	15,000			23,000		-		-		38,000		-	-	-	-	-	-	-	-
Second: Non-Executive /Non-Independent Directors:
1- Mr. Abdulla Buhindi	30,000			14,500		-		-		44,500		-	-	-	-	-	-	-	-
2- Mr. Mohamed AlMoayyed	15,000			16,000		-		-		31,000		-	-	-	-	-	-	-	-
3- Mr. Ahmed Yateem	15,000			15,000		-		-		30,000		-	-	-	-	-	-	-	-
		148,000			153,000			-			-			301,000
Total											-	-	-	-	-	-	-	-

Total paid

Total paid remuneration

Any other cash / in kind

Executive management

salaries and

End of Service

Aggregate amount

(bonus)

remuneration for 2023

allowances

CEO, Chief Supply Chain Officer, Chief

People Officer, Chief Commercial

667,333

241,361

22,080

-

930,774

Officer, Director of Retail

On behalf of the Board of Directors, I would like to express my sincere gratitude to His Majesty the King, and his Royal Highness the Crown Prince and Prime Minister, for their visionary leadership and encouragement of the Kingdom's private sector. Special thanks are also due to all Governmental entities and ministries, especially the Ministry of Industry and Commerce, the Central Bank of Bahrain, and the Bahrain Bourse, for their constant guidance and support. Finally, I also take this opportunity to acknowledge the continued confidence and trust of our shareholders, customers and business partners, and the unwavering dedication and professionalism of our management team and our employees, who have been instrumental in our success in 2023 and continue to be what truly sets BMMI apart.

			__________________
Abdulla Hassan Buhindi	Shawqi Ali Fakhro
Chairman	Vice Chairman

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BMMI B.S.C.

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of BMMI B.S.C. ("the Company") and its subsidiaries (together "the Group"), which comprise the consolidated statement of financial position as at 31 December 2023, and the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of cash flows and consolidated statement of changes in equity for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2023, its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated financial statements in the Kingdom of Bahrain, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the year ended 31 December 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

- Assessing the appropriateness of the valuation methodologies used by the accredited independent external valuation expert;

- Corroborating the key inputs used in the valuation with independently available information;

- Checking the arithmetical accuracy of the calculation used in the valuation; and

- Evaluating the accredited independent external valuation expert's competence, capabilities and objectivity;

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BMMI B.S.C. (CONTINUED)

Report on the Audit of the Consolidated Financial Statements (continued)

Key audit matters (continued)

1. Impairment of Hotel property included within property, plant and equipment

Refer to notes 3 and 5 to the consolidated financial statements.

	How the key audit matter was addressed in
Key audit matter	the audit

Property, plant and equipment of the Group Our audit procedures included, amongst others: includes Downtown Rotana Hotel ("Hotel")

owned by the Group and having a carrying value of BD 29,737,668, representing approximately 27% of the Group's total assets. The Hotel is incurring losses since commencement of its operations in 2016. The Group's management has carried out an impairment assessment by comparing the Hotel's carrying value to its recoverable amount, which is higher of its value in use and fair value less costs to sell as at 31 December 2023.

The Group's	management involved an	- Evaluating the adequacy of disclosures in
independent	accredited external valuation
the consolidated financial statements.
expert to assess the recoverable amount
based on value in use model.
The impairment assessment involves number
of significant assumptions, judgements and
estimates, therefore, we considered this area
as a key audit matter.

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BMMI B.S.C. (CONTINUED)

Report on the Audit of the Consolidated Financial Statements (continued)

Key audit matters (continued)

2. Provision for slow moving and obsolete inventories Refer to notes 3 and 11 to the consolidated financial statements.

				How the key audit matter was addressed in
Key audit matter			the audit
The Group imports and sells food and other	Our audit procedures included, amongst others:
products which	have a	short	life span and	-	Observing physical inventory counts at
expiry period and these	items	are included
	major locations;
within the Group's inventories at the reporting
-	Performing detailed testing of a sample of
date. The Group has gross inventories of BD
	items to assess the cost basis and net
15,997,883 as at 31 December 2023.
	realisable value of inventories;
This area was important for the audit as	- Reviewing the budget for the next year in
significant estimation is required in assessing		order to gain an understanding of the
the appropriate level of provision for items		forecast inventory demand and inventory
which may be slow moving and obsolete. Such		disposal plan for near expiry items;
estimation	includes	management's	- Evaluating the adequacy of provision for
expectations of forecast inventory demand,		slow moving and obsolete inventories as at
product expiry dates and inventory disposal		31 December 2023; and
plan for near expiry items.		- Evaluating the adequacy of disclosures in
					the consolidated financial statements.

Other information included in the Group's 2023 Annual Report

Other information consists of the information included in the Group's 2023 Annual Report, other than the consolidated financial statements and our auditor's report thereon. The Board of Directors is responsible for the other information. Prior to the date of this auditor's report, we obtained the Report of the Board of Directors which forms part of the Group's 2023 Annual Report, and the remaining sections of the Annual Report are expected to be made available to us after that date.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of the auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BMMI B.S.C. (CONTINUED)

Report on the Audit of the Consolidated Financial Statements (continued) Responsibilities of the Board of Directors for the consolidated financial statements

The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs and for such internal control as the Board of Directors determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BMMI B.S.C. (CONTINUED)

Report on the Audit of the Consolidated Financial Statements (continued)

Auditor's responsibilities for the audit of the consolidated financial statements (continued)

• Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BMMI B.S.C. (CONTINUED)

Report on Other Legal and Regulatory Requirements

We report that:

1. as required by the Bahrain Commercial Companies Law:
2. 1. the Company has maintained proper accounting records and the consolidated financial statements are in agreement therewith;
   2. the financial information contained in the Report of the Board of Directors is consistent with the consolidated financial statements; and
   3. satisfactory explanations and information have been provided to us by management in response to all our requests.
3. we are not aware of any violations of the Bahrain Commercial Companies Law, the Central Bank of Bahrain (CBB) Rule Book (applicable provisions of Volume 6) and CBB directives, regulations and associated resolutions, rules and procedures of the Bahrain Bourse or the terms of the Company's memorandum and articles of association during the year ended 31 December 2023 that might have had a material adverse effect on the business of the Group or on its consolidated financial position.
4. As required by Article 8 of Section 2 of Chapter 1 of the Bahrain Corporate Governance Code, we report that the Company:
5. 1. has appointed a Corporate Governance Officer; and
   2. has a Board of Directors' approved written guidance and procedures for corporate governance.

The partner in charge of the audit resulting in this independent auditor's report is Kazim Merchant.

Auditor's Registration No. 244

27 February 2024

Manama, Kingdom of Bahrain