Title: Announcement regarding issuance of Disciplinary Board Resolution No. (91/2023 Disciplinary Board) (131/2023 Authority) and imposition of a fine against: Equipment Holding Company for violating the Listing Rules

Announcement regarding issuance of Disciplinary Board Resolution No. (91/2023 Disciplinary Board) (131/2023 Authority) and imposition of a fine against: Equipment Holding Company for violating the Listing Rules.

This is due to the Company’s violation of Article (1-14) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The following was proven to the CMA through reviewing the financial statements of Equipment Holding Company for the financial year that ended on December 31, 2022:

First: The Company failed to comply with International Financial Reporting Standard 9 (IFRS 9 - Financial Instruments) for the third qualified opinion in the auditor’s report for the financial year that ended on December 31, 2022, according to the following:

1) Failure to make provisions for receivables  related to cases.
2) Failure to make provisions for receivables amounting to KWD 1,058,779 (one million, fifty-eight thousand, seven hundred and seventy-nine Kuwaiti Dinars), for which there is insufficient and appropriate evidence to support the validity of the claims.
3) Failure to make provisions for trade receivables amounting to KWD 1,534,752 (one million, five hundred and thirty-four thousand, seven hundred and fifty-two Kuwaiti Dinars) that are more than 365 days past due.

Second: The Company’s non-compliance with International Accounting Standard 16 (IAS 16 - Property, Plant and Equipment) for the fourth qualified opinion in the auditor’s report on the financial year that ended on 31/12/2022, due to the Company’s failure to calculate the consumption depreciation expenses for the Item “Machines and Equipment” under “Property, Plant and Equipment” according to the requirements of International Accounting Standard 16. This led to the issuance of the Company’s financial statements for the financial year that ended on 31/12/ 2022 without reflecting the necessary adjustments to the opening balances of both retained losses and the Item “Machines and Equipment”, thereby placing the transferred balance from the Item “Machines and Equipment” amounting to KWD  6,419,789 (six million, four hundred and nineteen thousand, seven hundred and eighty-nine Kuwaiti Dinars) to “Inventory” subject of the qualified opinion.

The Resolution included the infliction of the following penalty: -
" Levying a financial fine against Equipment Holding Company in the amount of 5,000 KD (five thousand Dinars) for each of the two attributed violations”. 

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.