Galfar Engineering & Contracting (GECS.OM)

Galfar Engineering & ContractingBonus shares - April 2009 and 2010Recommended issuanceof 10% bonus sharesin March 2010In April 2009, the company's AGM was held and approved the issuance of a 20% bonusshares. As a result, the share capital increased from OMR 25mn to OMR 30mn through thetransfer of OMR 5mn (equivalent to 50mn shares) from the retained earnings account tothe share capital.Currently, the company's share capital stands at OMR 30mn distributed over 300mnshares outstanding with a par value of OMR 0.1 per share.However, the Board of Directors recently proposed the issuance of another10% bonusshares. This proposition is subject to shareholder approval at the AGM to be held on the29th of March 2010. Assuming shareholders approve the 10% bonus shares issuance, ourfair value target on Galfar shares would be reduced to OMR 0.396 (the current fair valuetarget of OMR 0.435/1.1 [adjustment for 10% bonus shares]).March 18th, 2010 7