Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (38/2021 Disciplinary Board) (31/2021 Authority) and imposition of a fine of four thousand Dinars against Palms Agro Production Company for violating (Real Estate Assets Valuation – Listing Rules).

Announcement Regarding Issuance of Disciplinary Board Resolution No. (38/2021 Disciplinary Board) (31/2021 Authority) and imposition of a fine of four thousand Dinars against Palms Agro Production Company for violating (Real Estate Assets Valuation – Listing Rules).

For the following reasons:

1- Provision of Paragraphs (a) and (b) of Item No. (1) of Appendix No. (1) (Real Estate Assets Valuation) of Module Eleven (Dealing in Securities) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, where it is proven to the Authority, through reviewing the Company’s financial statements for the financial year ending on December 31, 2019 and the interim financial statements ending on June 30, 2020, its failure to assess the local real estate assets of a land and building in the Abu Halifa area in the State of Kuwait with a total value of KWD 143,034 (one hundred and forty-three thousand and thirty-four Kuwaiti Dinars) listed under (Property and Equipment), without regard to paragraph (58) of International Financial Reporting Standard No. (16) “Property, Plant and Equipment”.
2- Provision of Article (1-13) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, where it was proven to the Authority that the Company has merged the land and the building as one real estate without observing paragraph (58) of International Financial Reporting Standard No. (16) (Property, Facilities and Equipment) that requires listing the value of the building and land separately. It was also proven by the Authority through its review of the Company’s auditor’s report for the interim financial statements ending on June 30, 2020, that Al Dhafra Irrigation Systems Company (a foreign associate) did not assess its financial assets carried at amortized cost for the purpose of determining impairment in accordance with the International Financial Reporting Standard IFRS 9 (Financial Instruments).

The Resolution included the infliction of the following penalty: -
“The Company is fined an amount of two thousand Dinars for each violation”

In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these Laws in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.