Condensed consolidated interim financial information For the period ended 30 September 2013

Transcription

1 AGTHIA GROUP PJSC Condensed consolidated interim financial information For the period ended 30 September 2013 Principal business address: PO Box Abu Dhabi United Arab Emirates

2 Report and condensed consolidated interim financial information for the period ended 30 September 2013 Page Director s report Independent report on review of condensed consolidated interim financial information 1 Condensed consolidated interim statement of income 2 Condensed consolidated interim statement of comprehensive income 3 Condensed consolidated interim statement of financial position 4 Condensed consolidated interim statement of changes in equity 5 Condensed consolidated interim statement of cash flows 6 Notes to the condensed consolidated interim financial information 7-16

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8 pwc Report to on Review of Condensed Consolidated Interim Financial Information the Shareholders of Introduction We have reviewed the accompanying condensed consolidated interim statement of financial position of and its subsidiaries (the Group) as of 30 September 2013 and the related condensed consolidated interim statement of income, statement of comprehensive income, statement of changes in equity and statement of cash flows for the nine month period then ended. Management is responsible for the preparation and presentation of these condensed consolidated interim financial information in accordance with International Accounting Standard 34 interim Financial Reporting. Our responsibility is to express a conclusion on these condensed interim financial information based on our review. Scope ofreview We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters. and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information is not prepared, in all material respects. in accordance with International Accounting Standard 34 as issued by the International Accounting Standards Board. PricewaterhouseCoopers 2013 Jacques E. Fakhoury Registered Auditor Number 379 Abu Dhabi. United Arab Emirates PrieewutcrhouseCoopt rs4bu 1)habi frude centre, Level East Tower, P0 Bo.r 45263, Aba Dhubi, (mnited Arab Emirates T: S9Y1 (0) , F: 91 (0) ,o. wwwpwc corn/middle eat 4urt H Has Cr P Srrddaby ard & ama r are reg sterel as pr tsrg a Stars wth the Cf Mr try at) Co h,

9 Condensed consolidated interim statement of income (unaudited) Nine months Nine months Three months Three months ended ended ended ended 30 September September September September 2012 Revenue 1,125, , , ,094 Cost of sales (829,350) (744,795) (266,852) (254,999) Gross profit 296, ,121 94,463 86,095 Net other income (Note 6) 9,426 15,084 1,716 9,465 Selling and distribution expenses (111,690) (98,211) (35,956) (35,890) General and administrative expenses (72,016) (64,164) (25,968) (24,388) Research and development expenses (2,710) (2,356) (924) (678) Operating profit 119,164 88,474 33,331 34,604 Finance income 9,723 10,792 3,212 4,311 Finance expense (7,969) (7,075) (2,633) (2,343) Profit for the period 120,918 92,191 33,910 36,572 Tax (144) - (83) Profit for the period attributable to equity holders of the Group 120,774 92,191 33,827 36,572 ======= ======= ======= ======= Basic and diluted earnings per share (AED) ======= ======= ======= ======= The notes on pages 7 to 16 form an integral part of these condensed consolidated interim financial information. (2)

10 Condensed consolidated interim statement of comprehensive income (unaudited) Nine months Nine months Three months Three months Ended ended ended ended 30 September September September September 2012 Profit for the period attributable to equity holders of the group 120,774 92,191 33,827 36,572 Foreign currency translation difference on foreign operations (6,486) 224 (1,583) (146) Board of directors remuneration and committee members fees (1,050) (950) (350) (350) Other comprehensive income (7,536) (726) (1,933) (496) Total comprehensive income for the period attributable to equity holders of the Group 113,238 91,465 31,894 36,076 ======= ======= ======= ======= The notes on pages 7 to 16 form an integral part of these condensed consolidated interim financial information. (3)

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12 Condensed consolidated interim statement of changes in equity (unaudited) For the nine months ended 30 September Share Legal Translation Retained Capital reserve reserve earnings Total Balance at 1 January ,000 50,477 (3,809) 388,799 1,035,467 Total comprehensive income for the period Profit for the period ,191 92,191 Other comprehensive income Foreign currency translation difference on foreign operations Board of directors remuneration and committee members fee (950) (950) Dividend declared (30,000) (30,000) Total comprehensive income ,241 61, Balance at 30 September ,000 50,477 (3,585) 450,040 1,096, Balance at 1 January ,000 62,951 (3,683) 469,663 1,128,931 Total comprehensive income for the period Profit for the period , ,774 Other comprehensive income Foreign currency translation difference on foreign operations - - (6,486) - (6,486) Board of directors remuneration and committee members fee (1,050) (1,050) Dividend declared (30,000) (30,000) Total comprehensive income - - (6,486) 89,724 83, Balance at 30 September ,000 62,951 (10,169) 559,387 1,212,169 ======== ======== ======== ======== ======== The notes on pages 7 to 16 form an integral part of these condensed consolidated interim financial information. (5)

13 Condensed consolidated interim statement of cash flows (unaudited) For the nine months ended 30 September 30 September Note Cash flows from operating activities Profit for the period 120,774 92,191 Adjustments for: Depreciation 42,415 40,590 Finance income (9,723) (10,792) Finance expense 7,969 7,075 Gain on disposal of property, plant and equipment (206) (57) Write off of property, plant and equipment 1,321 - Provision for employees end of service benefits 7,396 5,323 Provisions on inventories and receivables 3,853 5, Operating cash flows before payment of employees end of service benefits, changes in working capital 173, , Change in inventories (30,718) (61,500) Change in trade and other receivables- net (12,244) (29,580) Change in government compensation receivable (9,013) (3,659) Change in trade and other payables 80, ,655 Change in due to a related party 136 (1,677) Payment of employees end of service benefits (2,253) (1,334) Change in other liabilities (253) (245) Net cash generated from operating activities 199, , Cash flows from investing activities Advances/ acquisition of property, plant and equipment 7 (106,848) (55,980) Proceeds from disposal of property, plant and equipment Investment in subsidiary - (23,253) Finance income received 9,871 8, Net cash used in investing activities (96,649) (70,160) Cash flows from financing activities Bank borrowings net 114, ,732 Purchase of available-for-sale financial assets - (10,000) Interest paid (7,697) (6,254) Dividend paid (30,000) (30,000) Net cash flows from financing activities 76, , Increase in cash and cash equivalents 179, ,495 Cash and cash equivalents as at 1 January 424, , Cash and cash equivalents as at 30 September , ,221 ======== ======== The notes on pages 7 to 16 form an integral part of these condensed consolidated interim financial information. (6)

14 Notes to the condensed consolidated interim financial information 1 Legal status and principal activities ( the Company ) was incorporated as a Public Joint Stock Company pursuant to the Ministerial Resolution No. 324 for SENAAT-General Holding Corporation PJSC owns 51% of the Company s shares. The principal activities of the Company are to establish, invest, trade and operate companies and businesses that are involved in the food and beverage sector. The condensed consolidated interim financial information of the Company as at and for the nine months ended 30 September 2013 comprise the Company and its below mentioned subsidiaries (together referred to as the Group ). Country of Share of equity Incorporation (%) Principal Subsidiary and operation Activity Grand Mills Company PJSC UAE Production and sale of flour and animal feed Al Ain Food and Beverages PJSC (AAFB-UAE) Agthia Group Egypt LLC (Agthia Egypt) (formerly Al Ain Food and Beverages LLC) Agthia Grup Icecek ve Dagitim Sanayi ve Ticaret Limited Sirketi (Agthia Turkey) (formerly Pelit Su Turizm Petrol Gida Nakliye Pazarlama Ithalat Ihracat Ticaret Ve Sanayi Ltd, STI (Pelit Su) UAE Production, bottling and sale of bottled water, flavored water, juices, yoghurt, tomato paste and frozen vegetables Egypt Processing and sale of tomato paste, chilli paste fruit concentrate and frozen vegetables Turkey Production, bottling, sale of bottled water. 2 Statement of compliance These condensed consolidated interim financial information have been prepared in accordance with International Financial Reporting Standard (IFRSs) IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual consolidated financial information, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December (7)

15 Notes to the condensed consolidated interim financial information (continued) 3 Significant accounting policies The accounting policies and methods of computation applied by the Group in these condensed consolidated interim financial information are the same as those applied by the Group in the consolidated financial statements as at and for the year ended 31 December These condensed consolidated interim financial information are presented in United Arab Emirates Dirhams ( AED ), which is the functional currency, rounded to the nearest thousand. Government compensation Funds that compensate the Group for selling flour and animal feed at subsidised prices in the Emirate of Abu Dhabi are recognised in the condensed consolidated interim statement of income, as a deduction from the cost of sales, on a systematic basis in the same period in which the sales transaction is affected. Cost of sales as stated in condensed consolidated statement of income is after the deduction of Abu Dhabi Government compensation amounting to AED 338 million (30 September 2012: AED 233 million). The purpose of the compensation was to partially reduce the impact of increased and volatile global grain prices on food retail prices for the consumers in the Abu Dhabi emirate. Available for sale financial assets Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. Available- for- sale financial assets are generally classified as non-current assets unless expected to be realised within 12 months of the reporting date. All purchases and sales of available-for-sale investments are recognised on the trade date, which is the date that the Group commits to purchase or sell the asset. Investments designated as availablefor-sale are recorded at cost plus transaction costs. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the condensed consolidated interim statement of income. 4 Estimates The preparation of condensed consolidated interim financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial information, the significant judgment made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements as at and for the year ended 31 December Financial risk management The Group s financial risk management objectives and processes are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December (8)

16 Notes to the condensed consolidated interim financial information (continued) 6 Net other income Net other income for the period includes management fee of AED 6,845 thousand (2012: AED 4,553 thousand) for managing stock of food grains for Abu Dhabi Government. In 2012 it also included an amount of AED 8,393 thousand received from the Holding company which represented gain on the commodity derivative contracts signed by the Holding company with their counter party which expired before 30 September Property, plant and equipment Acquisitions and disposals During the nine months ended 30 September 2013, the Group invested in property plant and equipment for net amount of AED 106,848 thousand (2012: AED 55,980 thousand) of which acquisition of assets amounted to AED 95,670 thousand and advances given of AED 11,178 thousand (30 September 2012: assets acquired AED 56,765 thousand and advance released of AED 785 thousand). Assets with a carrying amount of AED 122 thousand were disposed off during the nine months ended 30 September 2013 (30 September 2012: AED 846 thousand), resulting in a gain of AED 206 thousand (30 September 2012: gain of AED 57 thousand) which is included in net other income. Furthermore, asset with a carrying amount of AED 1,321 thousand was written off during the nine months ended 30 September (30 September 2012: nil) 8 Goodwill For the purpose of impairment testing goodwill is allocated to two operating segments within the group where goodwill is monitored for internal management purposes. During the nine months ended 30 September 2013 there was no impairment loss on goodwill (30 September 2012: Nil). 9 Inventories During the nine months ended 30 September 2013, the Group recorded a provision for slow, non moving, obsolete inventory and spare parts of AED 3,425 (30 September 2012: AED 7,466). The charge is included in cost of sales. Furthermore, the Group has written off a provision for slow, non-moving and obsolete inventory AED 2,645 thousand and written back AED 1,850 thousand (30 September 2012: written off AED 1,458 thousand and written back nil). 10 Trade and other receivables 30 September 31 December Trade receivable- net 145, ,571 Prepayments 25,427 19,944 Other receivable 10,271 10, , ,722 =============== =============== (9)

17 Notes to the condensed consolidated interim financial information (continued) 11 Available-for-sale financial assets In the year 2012, the Group purchased available for sale financial assets namely Sukuk which are expected to be realised within 12 months. 30 September 31 December Investments in Sukuk certificates 10,000 10,000 =============== =============== The change in fair value of the above available-for-sale financial assets from the date of acquisition is insignificant. 12 Cash and bank balances Cash and cash equivalents in the condensed consolidated interim statement of cash flows: 30 September 30 September 31 December Cash in hand Cash at banks: Current & savings account 57,339 99,743 58,924 Fixed deposits 563, , , Cash and bank balances 621, , ,506 ================ ================ ================ Bank overdraft (446) (69) - Escrow account (for dividend distribution 2009 to 2012) (16,869) (12,879) (12,605) , , ,901 ================ ================ ================ Fixed deposit above are for period not more than one year (2012: up to one year) carrying interest rates varying from 2.00%-2.40% (2012: 2.75%-3.30%). Escrow represents amount set aside for payment of dividend. Equivalent amount has been recorded as liability in trade and other payables. This restricted cash balance has not been included in the cash and cash equivalents for the purpose of cash flow statements. (10)

18 Notes to the condensed consolidated interim financial information (continued) 13 Bank borrowings This note provides information about the contractual terms of the Group s interest bearing loans and borrowings, which are measured at amortised cost. Current liabilities 30 September 31 December Short term loan 85,106 20,497 Working capital loan 175,159 98,704 Term loan 49,621 39, , ,750 =============== =============== Non-current liabilities Term loan 115, ,790 =============== =============== Terms and repayment schedule Amounts in 30 September December 2012 Face Face Currency Interest Year of value/ Carrying value/ Carrying rate maturity limit amount limit amount Short term loan** Credit facility*** Credit facility (Capex) *** Term loan*** USD/ AED/ EGP USD/ AED/ EGP USD/ AED USD/ EURO LIBOR / EIBOR/ mid corridor rate+ margin* LIBOR/ EIBOR /mid corridor rate + margin * LIBOR/ EIBOR + margin * EURIBOR/ LIBOR + margin* ,736 85, ,460 20, , , ,845 94, ,000 12,561 20,000 4, , , , , Total 704, , , ,540 ================ ================ =============== ================ * Margin on the above loans and facilities varies from 1.00% %. (2012: 1.00% %). Subsequently the rate has been renegotiated to 0.70%-1.50% **Short term loan of face value AED 91,838 thousand is secured by a floating charge over the current assets of the Group on a pari passu basis with the other banks in terms of the securities. ***Credit facility of face value AED 280,500 thousand, Credit facility (Capex) of face value AED 20,000 thousand and the Term loan of face value AED 183,643 thousand is secured by a floating charge over the current assets, stock and receivables of the Group. (11)

19 Notes to the condensed consolidated interim financial information (continued) 13 Bank borrowings (continued) Credit facility and credit facility (Capex) are secured against following: Third party indemnity to make available guarantees, documentary credit, bills drawn, loan to finance import/open account settlement in the name of any of the subsidiary of the Group in favour of the bank. 14 Segment reporting Information about reportable segment for the nine months ended 30 September The Group has two reportable segments, as described below. The reportable segments offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Board of Directors review internal management reports on at least quarterly basis. The following summary describes the operations in each of the Group s reportable segment: Agri Business Division (ABD) o Flour and Animal Feed, includes manufacturing and distribution of flour and animal feed. Consumer Business Division (CBD) o Bottled Water and Beverages includes manufacturing and distribution of drinking water, water based drinks and juices. o o Business operation in Turkey is of similar nature as Bottled Water and Beverages hence it is also reported under CBD. Food includes manufacturing and distribution of tomato and chilli paste, fruit concentrate, frozen vegetables and fresh dairy products. o Business operation in Egypt is of similar nature as Food hence it is also reported under CBD. Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit, as included in the internal management reports data reviewed by the Group s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm s length basis. (12)

20 Notes to the condensed consolidated interim financial information (continued) 14 Segment reporting (continued) Segment wise operating results of the Company, for the nine month period are as follows: Agri Business Division (ABD) Consumer Business Division (CBD) Flour and Bottled Water and Animal Feed Beverages Food CBD Total Total 30 September 30 September 30 September 30 September 30 September 30 September 30 September 30 September 30 September 30 September External revenues 718, , , ,100 72,043 47, , ,053 1,125, , Inter segment revenue Gross profit 165, , , ,143 4,024 (4,143) 138, , , , Reportable segment profit/(loss) 130,668 99,779 53,590 47,608 (17,332) (21,013) 36,258 26, , ,374 (13)

21 Notes to the condensed consolidated interim financial information (continued) 14 Segment reporting (continued) Reconciliations of reportable segments profit or loss For the nine months period ended Gross profit for the nine months ended 30 September 30 September Total gross profit for reportable segments 304, ,220 Unallocated amounts Other operating expenses (8,650) (7,099) Consolidated gross profit for the period 296, ,121 ======= ======= Profit for the nine months period ended Total profit for reportable segments 166, ,374 Unallocated amounts Other operating expenses (49,825) (39,044) Net finance income 3,673 4, Consolidated profit for the period 120,774 92,191 ======= ======= Reportable segment assets are as follows: 30 September 31 December Agri Business Division 617, ,970 Consumer Business Division 639, , Total assets for reportable segment 1,257,557 1,151,405 Other unallocated amounts 745, , Consolidated total assets 2,002,647 1,713,300 ========= ========= (14)

22 Notes to the condensed consolidated interim financial information (continued) 15 Transactions with related parties Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions, related parties comprise the major shareholder, key management personnel, Directors of the Board and their related companies. In the normal course of business, the Group had various transactions with its related parties. Transactions are entered into with the related parties on terms and conditions approved by either the Group s management, or its Board of Directors. a) Key management personnel compensation Key management personnel compensation for the nine months period was as follows: 30 September 30 September Short term employment benefits 13,749 14,054 Post-employment benefits 4,287 3, ,036 17,626 ======= ======= b) Due to and transactions with a related party SENAAT-General Holding Corporation 30 September 31 December Opening balance 1 January 1,400 1,839 Directors fees charged - 1,400 Purchase of foreign currency 4, ,222 Payment for foreign currency (4,391) (249,222) Profit receivable on hedging - (9,881) Profit received on hedging - 9,881 Payments - (2,015) Others Closing balance 1,536 1,400 ======= ======= (15)

23 Notes to the condensed consolidated interim financial information (continued) 16 Contingent liabilities and capital commitments 30 September 31 December Bank guarantees and letters of credit 41,059 83,378 ======= ======= Capital commitments 155, ,176 ======= ======= 17 Dividends Cash dividend of 5% of the issued and paid up capital, amounting to AED 30 million (2012: 5% amounting to AED 30 million), was approved by the shareholders in the Annual General Meeting held on 23 April, (16)