ABU DHABI NATIONAL COMPANY FOR BUILDING MATERIALS BILDCO (PJSC) ABU DHABI DECEMBER 31, 2014 CONSOLIDATED

Transcription

1 NATIONAL COMPANY FOR BUILDING MATERIALS DECEMBER 31, 2014 CONSOLIDATED

2 NATIONAL COMPANY FOR BUILDING MATERIALS AUDITORS REPORT AND CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,

3 NATIONAL COMPANY FOR BUILDING MATERIALS --- INDEX Page Auditors report 1 Consolidated financial position 2 Consolidated statement of income 3 Consolidated statement of comprehensive income 4 Consolidated profit appropriation statement 5 Consolidated Statement of changes in equity 6 Consolidated statement of cash flows 7 Notes to the consolidated financial statements 8-20

4 - 1 - Messrs. Abu Dhabi National Company For Building Materials,, Abu Dhabi, United Arab Emirates. (B/A 1077) Abu Dhabi : February 23,2015 We have audited the consolidated financial position of Messrs. Abu Dhabi National Company for Building Materials -, Abu Dhabi, as at December 31, 2014, and the related statements of income, statement of comprehensive income, changes in equity and cash flows for the year then ended. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the attached consolidated financial statements present fairly, in all material respects, the financial position of Messrs. Abu Dhabi National Company for Building Materials, Abu Dhabi, as at December 31, 2014, and the results of its operations, changes in equity and cash flows for the year then ended, in conformity with International Financial Reporting Standards. We also confirm that, in our opinion, proper records of accounts have been kept by the Company, physical count of inventories was carried out in accordance with established principles, and the contents of the report of the Board of Directors relating to these consolidated financial statements are in agreement with the accounting records. The above mentioned financial statements comply with the Companies Act No. 8 year 1984 (as amended) and the Articles of Association, and to the best of our knowledge and belief no violations of the Articles of Association of the Company have occurred during the year which would have had a material effect on the business of the Company or on its financial position. Omar Hamadeh Auditors Registration No.(3)

5 - 2 - NATIONAL COMPANY FOR BUILDING MATERIALS CONSOLIDATED FINANCIAL POSITION AS AT DECEMBER 31, ASSETS CURRENT ASSETS Notes Cash and banks 3 13,784,706 5,353,156 Postdated cheques (in hand) 4,097,804 7,213,840 Accounts receivable 4 42,852,214 79,270,434 Other debit balances 3,516,100 3,814,335 Inventories 5 65,095,074 64,547, Total current assets 129,345, ,198,998 Investments in local securities 6 312,540, ,531,517 Other investments 7 14,033,325 14,033,325 Subsidiary Establishments (under construction) 8 366,048, ,960,168 Fixed assets 9 20,449,505 26,605, Total assets 842,417, ,329,690 == LIABILITIES AND EQUITY CURRENT LIABILITIES Banks overdraft 10 41,093, ,152,447 Bills payable and murabaha and ijara 11 19,769,656 72,853,442 Short term loans installments 49,487,286 23,673,182 Accounts payable 12 5,996,958 11,761,388 Dividends payable 2,833,697 2,836,133 Advance payments and income 77,750,769 77,515,365 Accruals & other payables 6,830,707 14,213,426 Provision for securities impairment 17,500, Total current liabilities 221,262, ,005,383 Long term loans installments 215,444,379 33,731,407 Provision for indemnity 3,108,637 4,329, Total liabilities 439,815, ,066, SHAREHOLDERS EQUITY Share capital ,000, ,000,000 Reserves ,183, ,238,836 Reserve of fair value 15 (111,445,675) (77,406,579) Retained (loss) (30,403,795) (34,184,140) Total shareholders equity 397,334, ,648,117 Minority interest 16 5,267,285 5,614, Total equity 402,601, ,262, Total liabilities and equity 842,417, ,329,690 == The attached notes form an integral part of these statements Chairman General Manger Managing Director

6 - 3 - NATIONAL COMPANY FOR BUILDING MATERIALS CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, Notes Dirhams Sales 25,276,980 56,303,262 Less : cost of sales (28,791,250) (60,328,476) Gross (loss) (3,514,270) (4,025,214) Income from securities 66,305,301 7,840,246 Income from rent 1,444,024 1,419,221 Other income 93, ,854 Total gross income & other income 64,328,204 5,395,107 LESS : EXPENSES AND PROVISIONS Selling and distribution expenses 2,815,999 3,920,998 General and administrative expenses 8,407,161 8,735,240 Depreciation 211, ,530 Bad debts 981, Provision for doubtful debits 24,000, Provision for local securities investments impairment 17,500, Total expenses and provisions 53,915,400 12,898,768 Net profit (loss) before bank interest 10,412,804 (7,503,661) Less: bank interest (6,034,899) (15,448,446) Net profit (loss) for the year 4,377,905 (22,952,107) Minority share from (loss) , ,308 Net profit (loss) for the year transferred to statement of changes in equity 4,725,431 (22,368,799) Profit (Loss) per share 17 0,016 (0,074) The attached notes form an integral part of these statements

7 - 4 - NATIONAL COMPANY FOR BUILDING MATERIALS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, Profit (loss) for the year 4,725,431 (22,368,799) Other comprehensive income items --- Net (loss) profit from investments in securities-available for sale (34,039,096) 136,228, Comprehensive (loss) profit for the year (29,313,665) 113,859,426 == The attached notes form an integral part of these statements

8 - 5 - NATIONAL COMPANY FOR BUILDING MATERIALS ---- CONSOLIDATED PROFIT APPROPRIATION STATEMENT FOR THE YEAR ENDED DECEMBER 31, Notes Retained (loss) (34,184,140) (11,815,341) Net profit (loss) for the year 4,725,431 (22,368,799) Less : 10 % legal reserve (472,543) -- Less : 10 % statutory reserve (472,543) -- Net (loss) transferred to the financial position (30,403,795) (34,184,140) The attached notes form an integral part of these statements

9 - 6 - NATIONAL COMPANY FOR BUILDING MATERIALS ---- CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ---- DECEMBER 31, Accumulated Reserve of (loss) Capital Reserves fair value earnings Total - -- Dirhams Balance at January 1, ,000, ,238,836 (213,634,804) (11,815,341) 312,788,691 (Loss) for the year (22,368,799) (22,368,799) Comprehensive income ,228, ,228, Balance at December 31, ,000, ,238,836 (77,406,579) (34,184,140) 426,648,117 Profit for the year ,725,431 4,725,431 Less : 10 % legal reserve , (472,543) -- Less : 10 % statutory reserve , (472,543) -- Comprehensive (loss) (34,039,096) -- (34,039,096) - -- Balance at December 31, ,000, ,183,922 (111,445,675) (30,403,795) 397,334,452 = = =========== The attached notes form an integral part of these statements

10 - 7 - NATIONAL COMPANY FOR BUILDING MATERIALS CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, CASH FLOWS FROM OPERATING ACTIVITIES Net profit (loss) 4,725,431 (22,368,799) Depreciation 6,144,319 6,755,448 Provisions 16,278,665 (455,299) Minority share of Bildco Cement Products (loss) (347,526) (583,308) CHANGES IN WORKING CAPITAL ---- Postdated cheques (in hand) 3,116,036 4,959,467 Accounts receivable 36,418,220 32,718,349 Other debit balances 298,235 3,629,188 Inventories (547,841) 24,449,843 Accounts payable and dividends payable (5,766,866) (16,169,940) Advance payments and income 235, ,055 Accruals and other payables (7,382,719) 4,480,468 Net cash from operating activities 53,171,358 37,555,472 CASH FLOWS FROM INVESTING ACTIVITIES Additions of fixed assets (8,979) (22,320) Subsidiary Establishments (under construction) (15,088,013) (36,323,265) Disposals of fixed assets 20, Investment in securities (14,047,785) -- Net cash (used in) investing activities (29,123,940) (36,345,585) CASH FLOWS FROM FINANCING ACTIVITIES Banks overdraft, bills payable, murabaha, ijara and loans (15,615,868) (9,505,133) Net cash (used in) financing activities (15,615,868) (9,505,133) Net increase (decrease) in cash 8,431,550 (8,295,246) Cash at beginning of the year 5,353,156 13,648,402 Cash at end of the year 13,784,706 5,353,156 The attached notes form an integral part of these statements

11 - 8 - NATIONAL COMPANY FOR BUILDING MATERIALS LEGAL STATUS AND ACTIVITIES: Abu Dhabi National Company For Building Materials - (the Company) is incorporated in Abu Dhabi by Amiri Decree No. 5 for the year License issued from Department of Economic Development Abu Dhabi No. (CN ) and Branches in Al Ain License No. ( ) and Dubai licenses issued from Department of Economic Development No. (546792). The main activities of the Company are general trading, acting as agents, representatives of various trading agencies and companies and investing in the industrial enterprises. These financial statements include the result of operations, assets and liabilities of the Company and its subsidiaries : - - Bildco Cement Products LLC License No. (463), the Company owns 80% of its capital and the Emirates Industrial Bank 20%. The main activities are to produce Kerb Stones Manufacturing, Concrete Blocks Manufacturing and Interlock Tiles Manufacturing. - Reinforcing Steel Services fully owned by the Company License No. (606), its main activity is fabrication of reinforcing steel. 2- SIGNIFICANT ACCOUNTING POLICIES: a) ACCOUNTING CONVENTION: ---- The financial statements have been prepared under the historical cost convention. Investment in securities, available for sale, are re-measured at fair value. b) Basis of consolidation: These financial statements consolidate the accounts of the Company and its subsidiaries as listed in note No. 1. Significant inter-transactions and account- balances with subsidiaries have been eliminated on consolidation.

12 - 9 - NATIONAL COMPANY FOR BUILDING MATERIALS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, c) FIXED ASSETS: Fixed assets are stated at cost and depreciated on a straight line method over their expected useful lives at the following rates :- Machinery and equipment 10 % Motor vehicles 33.3 % Furniture and fixtures & decoration 25 % Caravans 25 % Buildings 8.33 % - 10 % Moulds AED 0.50 per machine cycle - Buildings & caravans represent : stores & labour camp at Abu Dhabi & Mussafah. - Company building represents a building owned by the company in Abu Dhabi city. - All buildings are recorded at cost and depreciated on a straight line method. No valuation has been made for buildings to adjust the book value to fair value. d) INVENTORIES: Inventories are stated at the lowest of cost or net realisable value in accordance with weighted average method. Finished products cost includes : raw materials, wages and manufacturing overhead. e) LEAVE AND INDEMNITY: Leave and indemnity are computed according to Federal Law No. 8 year 1980, ( as amended ) which regulates labour relations in United Arab Emirates.

13 NATIONAL COMPANY FOR BUILDING MATERIALS f) INVESTMENT IN SECURITIES: Available for sale investments Investments available - for - sale are initially recognized at cost, being the fair value of the consideration given including all acquisition costs associated with investments. After initial recognition available for sale investments are re-measured at fair value. Unrealized gains and losses are reported as a separate component of equity until the investment is de-recognized or the investment is determined to be impaired. On de-recognition or impairment the cumulative gain or loss previously reported in equity, along with any transition adjustment to retained earnings arising from the adoption of IAS 39, is included in the consolidated statement of income for the year. All investments in shares owned by the Company are in local Companies : Investment in local securities listed, in local markets 305,396, ,387,945 Investment in local securities - unlisted 7,143,572 7,143,572 Total 312,540, ,531,517 == g) REVENUE: Revenue comprises the amounts derived from sale of goods and provision of services falling within the Company s ordinary activities, after deduction of sales return and trade discount. Revenue from sales of goods and provision of services is recognized on the delivery of goods and rendering of services to customers. Dividends and other investment income are recognized when received.

14 NATIONAL COMPANY FOR BUILDING MATERIALS h) FOREIGN CURRENCIES: Foreign currencies transactions are converted into Dirhams at prevailing rate of exchange on the date of transaction. Monetary assets and liabilities stated in foreign currency as at the financial position date are converted into Dirhams at the rate of exchange prevailing at that time. Gains or losses on conversion are included in the income statement. I ) Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period during which they are incurred. 3 CASH AND BANKS : Balances at banks represent cash current accounts & margins in local banks Cash 66,775 52,539 Cash at banks 13,717,931 5,300,617 13,784,706 5,353,156

15 NATIONAL COMPANY FOR BUILDING MATERIALS ACCOUNTS RECEIVABLE: Accounts receivable 9,868,334 28,873,333 Accounts receivable non moving 12,292,325 47,258,081 Accounts receivable customer legal cases 76,832,522 34,497,833 Customer against letter of credit 100, ,154 99,093, ,511,401 Less : provision for doubtful debts (56,240,967) (32,240,967) 42,852,214 79,270,434 5 INVENTORIES: Trading goods 18,143,150 15,290,791 Purchase orders spreads 37,951,636 37,951,636 * Raw materials 2,332,206 2,538,321 Finished goods 1,859,280 2,894,018 Others 2,297,478 2,424,478 Wire Mesh Steel 4,016,225 4,952,890 66,599,975 66,052,134 Provision for slow moving items (1,504,901) (1,504,901) 65,095,074 64,547,233 * This amount represents spreads in the goods actual cost price and the customer s purchase order price. Bildco has received a some of AED 75,751,717 for those purchase orders.

16 NATIONAL COMPANY FOR BUILDING MATERIALS INVESTMENTS IN LOCAL SECURITIES: Investment in securities listed in the local markets 305,396, ,387,945 Investments in local securities - unlisted 7,143,572 7,143,572 Total 312,540, ,531,517 7 OTHER INVESTMENTS: Vesion Capital co. Abu Dhabi 6,000,000 6,000,000 Tesweeq Development & Marketing Properties-Abu Dhabi 7,950,000 7,950,000 Freeport Co. 83,325 83,325 14,033,325 14,033,325

17 NATIONAL COMPANY FOR BUILDING MATERIALS SUBSIDIARY ESTABLISHMENTS (UNDER CONSTRUCTION): Bildco Aerated Concrete Products (LLC) - Dubai 195,861, ,700,577 * Bildco Steel Industries - Abu Dhabi 170,186, ,259, ,048, ,960,168 == Bildco Steel Bildco Aerated Industries Concrete Opening balance 169,259, ,700,577 Cost incurred during the year 926,665 3,799,475 Finance costs capitalized -- 10,361, Total 31/12/ ,186, ,861,925 == Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets the necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use sale. All other borrowing costs are recognized in profit or loss in the period during which they are incurred. * Hypothecation of machinery worth AED 33 Million in favour of Ajman Bank.

18 9 - FIXED ASSETS: - NATIONAL COMPANY FOR BUILDING MATERIALS Machinery Buildings Furniture And And Motor And Company Plant and Equipment caravans vehicles Decoration building equipment Moulds Total COST Balance 1/1/ ,666,161 25,308,371 1,864,800 4,297,497 7,057,594 1,720,104 6,762, ,677,506 Additions , ,979 Disposals (16,525) (4,312) (20,837) ,649,636 25,304,059 1,864,800 4,306,476 7,057,594 1,720,104 6,762, ,665, DEPRECIATION Balance 1/1/ ,636,847 20,753,834 1,864,639 4,277,569 7,056,846 1,720,098 4,761,991 99,071,824 Charge for the year 4,844,647 1,003, , ,714 6,144, ,481,494 21,757,649 1,864,639 4,290,712 7,056,846 1,720,098 5,044, ,216, N.B.V. 31/12/ ,168,142 3,546, , ,718,274 20,449,505 ======== ========= ======== ======= ======= ======== ======== ========= N.B.V. 31/12/ ,029,314 4,554, , ,000,988 26,605,682 ======== ========= ======== ======= ======= ======== ======== ========= - Buildings & caravans represent : stores & labour camp at Abu Dhabi and Mussafah. - Company building represents a building owned by the company in Abu Dhabi city. - All buildings are recorded at cost and depreciated on a straight line method. No valuation has been made for buildings to adjust the book value to fair value.

19 NATIONAL COMPANY FOR BUILDING MATERIALS BANKS OVERDRAFT : Abu Dhabi Commercial Bank -- 3,872,481 First Gulf Bank ,301,698 National Bank of Fujairah 4,972,668 4,973,510 National Bank of Abu Dhabi 36,120,621 34,003,858 Ajman Bank ,093, ,152, BILLS PAYABLE MURABAHA AND IJARA : - -- National Bank of Fujairah 7,553, Emirates NBD -- 55,577,620 Ajman Bank Mudaraba -- 12,256,038 Ajman Bank Ijara short loan 12,216,102 5,019,784 19,769,656 72,853,442

20 NATIONAL COMPANY FOR BUILDING MATERIALS ACCOUNTS PAYABLE : Accounts payable 3,576,629 8,196,089 Accounts payable non moving 2,149,930 3,071,456 Accounts payable accrual for purchases 270, ,843 5,996,958 11,761, CAPITAL: Authorized capital 300,000,000 shares of AED 1 each 300,000, ,000, ,000, ,000,000 Issued and fully paid up 300,000,000 shares of AED 1 300,000, ,000,000 each 300,000, ,000,000 =

21 NATIONAL COMPANY FOR BUILDING MATERIALS RESERVES: - - Legal Share Statutory reserve premium reserve Total Balance 1/1/ ,748, ,399,991 43,090, ,238,836 10% of net profit for the year 472, ,543 10% of net profit for the year , , Balance 31/12/ ,220, ,399,991 43,563, ,183,922 = = - Legal reserve Ten percent of the Company net profit should be deducted annually to create a legal reserve. The general assembly may stop deduction if the legal reserve reaches one half of the Company paid up capital. This reserve may not be distributed to the shareholders. - Statutory reserve The Company articles provide for setting aside ten percent of the Company net profit to create a statutory reserve. The general assembly may stop deduction if the statutory reserve reaches twice of the Company paid up capital. This reserve may be used to the purposes decided by the ordinary general assembly. 15 RESERVE OF FAIR VALUE :- - Available for sale investments are re-measured at the financial position date, unrealized gains and loss are shown as a separate component of equity.

22 NATIONAL COMPANY FOR BUILDING MATERIALS MINORITY INTEREST: Minority interest represents the share of Emirates Industrial Bank which is 20 % of equity of Bildco Cement Products, subsidiary Company. 17 (LOSS) PER SHARE: The information necessary to calculate basic per (loss) share based on weighted average number of shares outstanding during the year is as follows: Profit (Loss) - Net (loss) for the year 4,725,431 (22,368,799) SHARES: Number of shares outstanding during the year 300,000, ,000,000 Profit (Loss) per share at par value AED 1 per share 0,016 (0,074) 18 FINANCIAL INSTRUMENTS: - Financial instruments of the Company include cash and banks, postdated cheques (in hand), accounts receivable, other receivables, investment in securities, banks overdraft, bills payable, murabaha and loans, accounts payable and accruals & other payables. CREDIT RISK: --- Cash is deposited in local banks. Credit risk on receivables is limited as receivables are shown net of provision for doubtful debts. FAIR VALUE: -- As per the management opinion the fair value of the Company s financial instruments are not materially different from their carrying amounts.

23 NATIONAL COMPANY FOR BUILDING MATERIALS EMPLOYEES: The Company has ( 205 ) employees as at December 31,2014. (238 employees at December 31,2013). 20 CONTINGENT LIABILITIES: - Letters of credit 42,443,000 35,642,485 Letters of guarantee 3,670,000 16,633,000 Cheques discounted ,831 46,113,000 52,992,316