(A Saudi Joint Stock Company) Interim Consolidated Financial ...
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) Interim Consolidated Financial Statements (Un-audited) For the three month period ended 31 March 2014 together with the Independent Auditor’s Review Report
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) Interim Consolidated Financial Statements (Un-audited) For the three month period ended 31 March 2014
INDEX
PAGE
Review Report
1
Interim Consolidated Balance Sheet
2
Interim Consolidated Statement of Income
3
Interim Consolidated Statement of Cash Flows
4
Notes to the Interim Consolidated Financial Statements
5 - 14
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) INTERIM CONSOLIDATED BALANCE SHEET (Un-audited) As at 31 March 2014 (Saudi Riyals) 2014
2013
Cash and bank balances
200,689,865
100,521598
Inventories, net
423,067,057
377,184,624
Prepayments and other current assets
125,541,873
102,586,151
Total current assets
749,298,795
580,292,373
Note ASSETS Current assets
Non-current assets Investments, net
(5)
182,126,602
172,152,770
Property and equipment, net
(6)
736,803,001
607,745,088
Investment properties, net
(7)
506,276,748
527,597,532
Biological assets, net
(8)
1,955,260
--
14,456,133 1,441,617,74 4 2,190,916,53 9
11,542,199 1,319,037,58 9 1,899,329,96 2
930,542,321
818,662,960
Intangible assets, net Total non-current assets Total assets LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Current liabilities Trade payables Current portion of long term loans and Murabahas
(9)
73,636,364
87,785,477
Short term loans and Murabahas
(9)
20,032,267
40,842,569
142,191,209 1,166,402,16 1
111,085,991 1,058,376,99 7
120,000,000
76,764,728
50,746,823
42,928,099
170,746,823 1,337,148,98 4
119,692,827 1,178,069,82 4
225,000,000
225,000,000
93,409,588
74,159,034
Accrued expenses and other current liabilities Total current liabilities Non-current liabilities Long term loans and Murabahas
(9)
Employees’ end of service benefits Total non-current liabilities Total liabilities EQUITY Share capital Statutory reserve
(10)
Voluntary reserve
(11)
12,453,336
12,453,336
Retained earnings Unrealized gains from investment in available for sale securities
520,981,115
409,569,180
120,588
78,588
Total equity attributable to shareholder’s
851,964,627
721,260,138
1,802,928
--
853,767,555 2,190,916,53 9
721,260,138 1,899,329,96 2
Non – controlling interest Total equity Total liabilities and equity
The accompanying notes from (1) through (17) form an integral part of these interim consolidated financial statements. 2
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) INTERIM CONSOLIDATED STATEMENT OF INCOME (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) Note Sales Cost of sales Gross profit Rental income, net
2014
2013
1,222,977,382
1,066,426,099
(1,018,316,694)
(902,364,742)
204,660,688
164,061,357
13,518,311
11,419,267
(159,812,270)
(120,463,383)
(15,690,515)
(14,790,279)
42,676,214
40,226,962
5,573,721
2,374,508
(1,837,293)
(1,957,452)
990,513
1,668,078
47,403,155
42,312,096
(1,000,862)
(1,500,000)
46,402,293
40,812,096
66,749
--
46,469,042
40,812,096
Operations
1.90
1.79
Non operations
0.21
0.09
Net income
2.07
1.81
22,500,000
22,500,000
Selling and distribution expenses General and administrative expenses Income from operations Share in profits of equity accounted investees Finance expenses Other income, net Net income before zakat and non - controlling interest Zakat and income tax Net income before non - controlling interest Non - controlling interest in net loss of the subsidiary Net income for the period
Earnings per share from:
(12)
Weighted average number of shares
The accompanying notes from (1) through (17) form an integral part of these interim consolidated financial statements.
3
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) IINTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) Note
2014
2013
46,469,042
40,812,096
CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period Adjustments to reconcile net income to net cash generated from operating activities Depreciation
24,404,253
21,465,640
Amortization
449,556
334,626
Gain / loss on disposal of property and equipment
(21,980)
(971,408)
1,000,000
1,500,000
(5,573,721)
(2,382,488)
2,255,788 (66,749)
1,859,704 --
(55,056,947)
(55,394,819)
Prepayments and other current assets Trade payables, Accrued expenses and other current liabilities
(35,236,581)
(22,700,756)
183,410,286
170,789,327
Net cash generated by operating activities
162,032,947
155,311,922
(44,070,320)
(43,919,306)
(581,766)
(554,086)
(34,144)
--
17,000,000
4,250,000
187,081
1,013,506
(27,499,149)
(39,209,886)
Loans and Murabaha
(44,174,921)
(79,059,097)
Net cash used in financing activities
(44,174,921)
(79,059,097)
90,358,877
37,042,939
Cash and cash equivalents at beginning of the period
110,330,988
63,478,659
Cash and cash equivalents at end of the period
200,689,865
100,521,598
(15,000)
2,250
Zakat charge for the period Company's share in the profit of an equity accounted investees End of service benefits provision, net Non - controlling interest in net loss of the subsidiary Changes in working capital: Inventories
CASH FLOW USED IN INVESTING ACTIVITIES Additions to Property and equipments Additions to Investment properties Additions to Biological assets Dividends received from associated company Proceeds from sale of property and equipment Net cash used in investing activities CASH FLOWS USED IN FINANCING ACTIVITIES
Net increase in cash and cash equivalents
Non - cash transactions Unrealized losses/(gains) from investment in available for sale securities
The accompanying notes from (1) through (17) form an integral part of these interim consolidated financial statements.
4
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 1.
ORGANIZATION AND ACTIVITIES Abdullah Al-Othaim Markets Company (the “Company”) is a Saudi joint stock company registered in Riyadh on 7 Rajab 1400 (May 21, 1980) under Commercial Registration Number 1010031185. The Company was converted from a limited liability company into a joint stock company according to the ministerial decree No. 227/G on 3 Ramadan 1428 (corresponding to 15 September 2007). The Group’s activities are to undertake trading in food supplies, fish, meat, agricultural crops, livestock, household equipment, constructing, managing and operating the commercial outlets under the brand name of Al “Othaim” The group is also engaged in constructing, maintaining and operating of storage and cooling warehouses. These interim consolidated financial statements comprise of the financial statements of the Company and following subsidiaries, together refer to as the “Group”.
2.
Name of the Subsidiaries
Effective ownership (%) at 31 March 2014 2013
Haley Holding Company Universal Marketing Centre Company Seven services Company Bayt Alwatan Company Marafeq Al Tashgheel Company Thamarat Al Qassim Company Haley Holding Company – Turkey Haley Holding Company – Bosnia and Herzegovina
100% 100% 100% 100% 100% 90% 100% 100%
100% 100% 100% 100% 100% ----
BASIS OF PREPARATION Statement of compliance These interim consolidated financial statements have been presented in accordance with the requirements of accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). These interim financial statements do not include all the information presented in the annual financial statements; therefore, these interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements of the company for the year ended 31 December 2013. Basis of measurement The interim financial statements have been prepared on the historical cost convention (except for available for sale investments that are measured at fair value) using the accrual basis of accounting and the going concern concept. Use of estimates and judgments The interim financial statements prepared by the management require the use of estimates and assumptions which has an effect on the financial position and results of operation. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
5
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 2.
BASIS OF PREPARATION (Continued) Basis of consolidation The interim consolidated financial statements include the financial statements of the Company and its subsidiaries as disclosed in note (1) above. Subsidiaries are entities controlled by the Company. Control exist when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are excisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commence until the date control ceases. All intra group balances and financial transactions resulting from transactions between the Company and the subsidiaries and those arising between the subsidiaries are eliminated in preparing these consolidated financial statements. Any unrealized gains and losses arising from intra group transactions are eliminated on consolidation.
3.
SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted by the Group for the preparation of these interim consolidated financial statements are consistent with those of the Group’s annual consolidated financial statements. These accounting policies have been applied consistently to all the periods presented in the interim consolidated financial statements. Certain comparative amounts have been reclassified to conform with the current period presentation. Revenue recognition Revenue from sale of goods is recognised at the time of check-out sales where there is no continuing management involvement with the goods. - Opening fees, based on agreements with suppliers, are recognized at the opening of the store as part of the cost of sales is stated net. - Income from rebates and other supplier benefits are recognized on accrual basis according to the agreements with suppliers. For the presentation purposes, cost of sales is stated net of rebates. - Revenue from rent is recognised based on accrual basis and the rent contract period. Expenses -
Selling and distribution expenses principally comprise of costs incurred in the distribution and sale of the Company’s products. All other expenses are classified as general and administrative expenses. General and administrative expenses include direct and indirect costs not specifically part of cost of revenues as required under generally accepted accounting principles in the Kingdom of Saudi Arabia. Allocations between general and administrative expenses and cost of revenues, when required, are made on consistent basis. Investments Equity accounted investees Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another entity. Associates are accounted for using the equity method (equity accounted investee) and are initially recognized at cost. The financial statements include the Company’s share of income and expenses and equity movement of the equity accounted investees from the date that significant influence commences until the date that significant influence ceases. When the Company’s share of losses exceeds its interest in an associate, the Company’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of an associate. The Company's share of profits or losses of the investee companies is credited or charged to the interim consolidation statement of income. 6
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 3.
SIGNIFICANT ACCOUNTING POLICIES (Continued) Investments available for sale: Investments which are not for trading purposes and where the Company has no significant influence over its activities are classified as investments available for sale. These investments are initially recognized at cost which represents the fair value of the consideration paid including expenses related to acquisition of the investments; and are subsequently measured at fair value. Fair value changes other than impairment losses are recognized in equity. Fair value is determined by reference to the market value in an open market, if exists. In the absence of an open market, cost is considered to be the fair value for these investments. Permanent diminution in the value of the above mentioned investments, if any, is charged to the interim consolidated statement of income. Profit and loss resulted from disposing those investments are recognized in the period in which disposal occurs. Cash dividends from those investments are recorded in statement of income upon declaration by investees. Investment properties Investment properties in the form of buildings and lands held by the Company to earn rentals or for capital appreciation is recognized at cost less accumulated depreciation,or impairment if any. No depreciation is computed on lands. Inventories Inventories are stated at the lower of cost or market value. Cost is determined using the moving average cost method. Provisions and contingent liabilities Provisions are recognized for liabilities of uncertain timing or amount, when the Company has legal or constructive obligation arising as a result of a past event, it is probable, that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation. Property and equipment Property and equipment are stated at cost less accumulated depreciation. Expenditure on maintenance and repairs is expensed, while expenditure for betterment is capitalized. Depreciation is provided over the estimated useful lives of the applicable assets using the straight line method. Leasehold improvements and buildings constructed on leased lands are amortized over the shorter of the estimated useful life of the leasehold improvements and buildings or the remaining term of the lease. The estimated lives of the principal classes of assets are as follows: Years Machinery and equipment Buildings Vehicles Computers Furniture and fixtures Leasehold improvements
10 5 – 25 5–7 5–7 7 10
7
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014
3.
SIGNIFICANT ACCOUNTING POLICIES (Continued) Impairment of long-term assets The Company reviews on regular basis the carrying amount of its tangible assets to determine whether there is any indication that those assets have suffered impairment in value. In case such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where it is not possible to estimate the recoverable amount of individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. In circumstances where the recoverable amounts for the assets or the cash generating unit is estimated below its net book value, then the net book value for that asset or cash generating unit will be impaired to the recoverable amounts. Impairment losses are recognized immediately as expenses in the interim consolidated income statement. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior periods. A reversal of an impairment loss is recognized as income in the interim consolidated statement of income immediately. Biological Assets Biological assets are stated at cost of purchase or at the cost of rearing or growing to the point of commercial production, less accumulated depreciation. The costs of immature biological assets are determined by the cost of rearing or growing to their respective age. Biological assets are depreciated on a straight line basis to their estimated life of 5 years. Intangible assets Intangible assets represent costs incurred for the purpose of using rented stores (key money). These assets are amortized over the term of the related lease contracts. Borrowing costs Borrowing costs directly attributable to acquisitions or constructions of qualifying assets, which are the 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 the assets are substantially ready for their intended use or sale. All other borrowing costs are charged to the interim consolidated statement of income in the period in which they are incurred. Foreign currency translation Foreign currency transactions are translated into Saudi Riyals at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies at the interim consolidated balance sheet date are translated at the exchange rates prevailing at that date. Gains and losses from settlement and translation of foreign currency transactions are included in the interim consolidated statement of income. Accounting for lease contracts All leases entered into by the Company are classified as operating leases. Rental payments are charged to the interim consolidated statement of income using the straight-line method over the term of the operating lease contract. The lease amounts received by the Company as a lessor in operating lease contracts are recognized in the interim consolidated statement of income using the straight-line method over the period of the related leases.
8
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three month periods ended 31 March 2014 (Saudi Riyals)
3.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
Provision for end-of-service benefits End-of-service benefits are provided in accordance with the Saudi Arabian Labor Law based on total benefits due to an employee in case his services are terminated at the balance sheet date and are reduced by any payments in advance to employees. Differences in indemnities, if any, are computed and paid to employees upon termination. Zakat The Company is subject to the regulations of the Directorate of Zakat and Income Tax (“DZIT”) in the Kingdom of Saudi Arabia. The zakat charge is computed on the zakat base. Any difference in the estimate is recorded when the final assessment is approved, at which time the provision is cleared.
4.
RELATED PARTIES TRANSACTIONS AND BALANCES
Related parties of the Company comprises of its shareholders, subsidiaries, equity accounted investees and other affiliated companies under common control. During the period, the Company transacted mainly with Al Othaim Holding Company (founding shareholder) and Abdullah Al Othaim Real Estate Investment and Development Company (Associated company). Major transactions with related parties comprises of rental income and expenses. The Company transacts with related parties on mutually agreed prices and terms which are approved by the management to be as follows: Nature of Transactions Rent expense Rent income
2014
2013
2,796,219 9,391,098
2,814,821 9,391,098
4.1
Prepayments include an amount of SR 11.7 million ( 31 March 2013: SR 17.6 million) which represents rents paid to a related party in advance against early payment discount.
5.
INVESTMENTS Investments consist of the following: (Note) Investment in equity accounted investees Investments in available-for-sale securities
9
5.1
2014
2013
174,499,925 7,626,677
166,582,793 5,569,977
182,126,602
172,152,770
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals)
5. 5.1
INVESTMENTS (Continued) Investment in equity investees 2014 Balance, 1 January Company's share in net profits Cash dividends received
185,926,204 5,573,721 (17,000,000)
Balance, 31 March
174,499,925
2013 168,458,285 2,374,508 (4,250,000) 166,582,793
5.2 The investment in associated company represents 13.65% of the share capital of Abdullah Al-Othaim Real Estate Investment and Development Company. The remaining percentage is owned by Al-Othaim Holding Company, Mr. Abdullah Saleh Al-Othaim and his family members.
10
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 6.
PROPERTY AND EQUIPMENT, NET Machinery and equipment
Land Cost 1 January 2014 Additions Transferred from CWIP Disposals 31March 2014
Buildings
Vehicles
Computers
Furniture and fixtures
Leasehold improvements
Capital Work in progress
Total
233,692,794 11,437,938 --245,130,732
250,701,737 6,623,545 410,633 (1,653,121) 256,082,794
174,200,849 760,063 --174,960,912
67,123,670 3,940,862 604,258 -71,668,790
86,482,539 3,268,720 338,235 (456,257) 89,633,237
129,638,075 3,586,302 261,160 (350,658) 133,134,879
145,040,606 2,744,050 2,112,960 -149,897,616
24,549,139 11,708,840 (3,727,246) -32,530,733
1,111,429,409 44,070,320 -(2,460,036) 1,153,039,693
-----
116,031,425 6,210,797 (1,581,959) 120,660,263
46,641,567 2,263,717 -48,905,284
47,028,160 1,499,278 -48,527,438
41,579,889 2,277,637 (414,716) 43,442,810
81,141,423 2,916,289 (298,260) 83,759,452
67,498,639 3,442,806 -70,941,445
----
399,921,103 18,610,524 (2,294,935) 416,236,692
Net book value 31 March 2014
245,130,732
135,422,531
126,055,628
23,141,352
46,190,427
49,375,427
78,956,171
32,530,733
736,803,001
31 March 2013
173,894,320
103,519,888
114,554,319
18,462,551
39,205,155
46,226,606
68,933,015
42,949,234
607,745,088
Accumulated depreciation 1 January 2014 Charge for the period Eliminated on disposals 31 March 2014
6-1
Title deeds of certain lands amounting to SR 37 million are still under progress to be transferred to the company
6-2
Land mentioned above amounting to SR 40 million (2013: SR 166 million) is mortgaged to some local banks as collateral against bank facilities. No capital commitments associated with these projects existed as at the interim consolidated balance sheet date.
11
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 7.
INVESTMENT PROPERTY The Investment in property include showrooms and buildings rented to others mainly and the balance at 31 March: Cost January 1 Additions Balance at March 31 Accumulated depreciation January 1 Charge for the period Balance at March 31 Net Book value
8.
2014
2013
583,071,888 581,766 583,653,654
581,454,662 554,086 582,008,748
71,685,135 5,691,771 77,376,906
48,740,699 5,670,517 54,411216
506,276,748
527,597,532
BIOLOGICAL ASSETS, NET The biological assets include Sheep and Cows owned by one of the subsidies (Thamarat Al Qassim) and the balance at 31 March: 2014 Cost January 1 2,250,813 Additions 34,144 Balance at March 31 2,284,957 Accumulated depreciation January 1 Charge for the period Balance at March 31
227,739 101,958 329,697
Net Book value 9.
LOANS AND MURABAHAS
a)
Short-term murabahas:
1,955,260
The Company has facilities from local commercial banks in the form of short-term murabahas to finance working capital. Unutilized balance of these murabahas loans as at 31 March 2014 amounted to SR 250 million (31 March 2013: SR 229 million). b)
Long-term loans and murabahas: 2014 Current portion Non-current portion
73,636,364 120,000,000
Total
193,636,364
2013 87,785,477 76,764,728 164,550,205
These facilities are secured by personal guarantees of one of the shareholders and mortgage of land title deeds owned by the Company with a book value of SR 40 million as at 31 March, 2014 (31 March, 2013: SR 97.5 million). 12
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 10.
STATUTORY RESERVE In accordance with the Regulations for Companies in Saudi Arabia and the Company’s bylaws, the Company has established a statutory reserve by the appropriation of 10% of net income until the reserve reaches 50% of the share capital. This reserve is not available for dividend distribution.
11.
VOLUNTARY RESERVE The extraordinary general assembly in its meeting held on Jumad Al-Awal 2, 1430 (corresponding to April 27, 2009) approved a voluntary reserve of 20% from the profits for the year ended 31 December 2008 and appropriated it as voluntary reserve for the expansion of the Company’s operations.
12.
EARNINGS PER SHARE Earnings per share are calculated based on net income for the period, income from operations and income from other sources (which includes: Share in profits of equity accounted investees, Finance expenses and Other income, net) divided by the weighted average number of shares in issue which are amounting to 22.5 million shares.
13.
DIVIDENDS In its meeting held on 6 April 2014, the Shareholder’s General Assembly approved the distribution of cash dividends of SR 67.5 million for the year 2013 at SR 3 per share. Dividends approved by the General Assembly Meeting for the shareholder dated 15 April 2013 amounting to SAR 67.5 million by an amount of SAR 3 for each share was paid on the year ended 31 December 2012.
14.
SEGMENTAL INFORMATIONS The Company’s activities are focused on retail and wholesale of food stuff and carries out its operations in the Kingdom of Saudi Arabia. The company also invest in developing of commercial malls. Some selected information was summarized for each business segment as at December 31: For the period ended Retail and wholesale 31 March 2014 31 March 2013 Retail and Real estate Retail and Real estate wholesale and leasing wholesale and leasing (Rent) (Rent) Sales Rents income Property and equipment, net Gross Profit
1,222,977,382 --
-24,025,046
736,803,001 204,660,688
506,276,748 13,518,311
13
1,066,426,099 -607,745,088
-21,498,492 527,597,532
164,061,357
11,419,266
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 15.
CONTINGENCIES AND COMMITMENTS
a)
As at 31 March, the Company had the following commitments and contingent liabilities:
b)
2014
2013
Letters of credit
45,860,467
7,134,664
Letters of guarantee
10,823,840
11,823,150
Capital commitments on projects in progress
20,661,561
10,668,562
Commitment against operating lease agreements: The outstanding lease commitments of the Company related to non-cancelable long term operating leases for the Company’s branches and malls as at 31 March were as follows:
16.
2014
2013
Less than a year More than one year, but less than 5 years
40,884,531
49,295,754
142,177,331
169,830,197
More than 5 years, but less than 25 years
212,708,069
216,558,552
SUBSEQUENT EVENTS On 6 April 2014, the shareholder’s General Assembly approved the increase of share capital from SR 225 million to SR 450 million through 100 % bonus shares. The company has obtained the approval from the concerned authorities and the procedure to amend the Company Articles of Association and its bylaws are in process.
17.
DATE OF AUTHORISATION The financial statements were authorized for issue by the board of directors on 20 Jumada’II 1435H corresponding to 20 April 2014.
14
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) Interim Consolidated Financial Statements (Un-audited) For the three month period ended 31 March 2014
INDEX
PAGE
Review Report
1
Interim Consolidated Balance Sheet
2
Interim Consolidated Statement of Income
3
Interim Consolidated Statement of Cash Flows
4
Notes to the Interim Consolidated Financial Statements
5 - 14
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) INTERIM CONSOLIDATED BALANCE SHEET (Un-audited) As at 31 March 2014 (Saudi Riyals) 2014
2013
Cash and bank balances
200,689,865
100,521598
Inventories, net
423,067,057
377,184,624
Prepayments and other current assets
125,541,873
102,586,151
Total current assets
749,298,795
580,292,373
Note ASSETS Current assets
Non-current assets Investments, net
(5)
182,126,602
172,152,770
Property and equipment, net
(6)
736,803,001
607,745,088
Investment properties, net
(7)
506,276,748
527,597,532
Biological assets, net
(8)
1,955,260
--
14,456,133 1,441,617,74 4 2,190,916,53 9
11,542,199 1,319,037,58 9 1,899,329,96 2
930,542,321
818,662,960
Intangible assets, net Total non-current assets Total assets LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Current liabilities Trade payables Current portion of long term loans and Murabahas
(9)
73,636,364
87,785,477
Short term loans and Murabahas
(9)
20,032,267
40,842,569
142,191,209 1,166,402,16 1
111,085,991 1,058,376,99 7
120,000,000
76,764,728
50,746,823
42,928,099
170,746,823 1,337,148,98 4
119,692,827 1,178,069,82 4
225,000,000
225,000,000
93,409,588
74,159,034
Accrued expenses and other current liabilities Total current liabilities Non-current liabilities Long term loans and Murabahas
(9)
Employees’ end of service benefits Total non-current liabilities Total liabilities EQUITY Share capital Statutory reserve
(10)
Voluntary reserve
(11)
12,453,336
12,453,336
Retained earnings Unrealized gains from investment in available for sale securities
520,981,115
409,569,180
120,588
78,588
Total equity attributable to shareholder’s
851,964,627
721,260,138
1,802,928
--
853,767,555 2,190,916,53 9
721,260,138 1,899,329,96 2
Non – controlling interest Total equity Total liabilities and equity
The accompanying notes from (1) through (17) form an integral part of these interim consolidated financial statements. 2
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) INTERIM CONSOLIDATED STATEMENT OF INCOME (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) Note Sales Cost of sales Gross profit Rental income, net
2014
2013
1,222,977,382
1,066,426,099
(1,018,316,694)
(902,364,742)
204,660,688
164,061,357
13,518,311
11,419,267
(159,812,270)
(120,463,383)
(15,690,515)
(14,790,279)
42,676,214
40,226,962
5,573,721
2,374,508
(1,837,293)
(1,957,452)
990,513
1,668,078
47,403,155
42,312,096
(1,000,862)
(1,500,000)
46,402,293
40,812,096
66,749
--
46,469,042
40,812,096
Operations
1.90
1.79
Non operations
0.21
0.09
Net income
2.07
1.81
22,500,000
22,500,000
Selling and distribution expenses General and administrative expenses Income from operations Share in profits of equity accounted investees Finance expenses Other income, net Net income before zakat and non - controlling interest Zakat and income tax Net income before non - controlling interest Non - controlling interest in net loss of the subsidiary Net income for the period
Earnings per share from:
(12)
Weighted average number of shares
The accompanying notes from (1) through (17) form an integral part of these interim consolidated financial statements.
3
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) IINTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) Note
2014
2013
46,469,042
40,812,096
CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period Adjustments to reconcile net income to net cash generated from operating activities Depreciation
24,404,253
21,465,640
Amortization
449,556
334,626
Gain / loss on disposal of property and equipment
(21,980)
(971,408)
1,000,000
1,500,000
(5,573,721)
(2,382,488)
2,255,788 (66,749)
1,859,704 --
(55,056,947)
(55,394,819)
Prepayments and other current assets Trade payables, Accrued expenses and other current liabilities
(35,236,581)
(22,700,756)
183,410,286
170,789,327
Net cash generated by operating activities
162,032,947
155,311,922
(44,070,320)
(43,919,306)
(581,766)
(554,086)
(34,144)
--
17,000,000
4,250,000
187,081
1,013,506
(27,499,149)
(39,209,886)
Loans and Murabaha
(44,174,921)
(79,059,097)
Net cash used in financing activities
(44,174,921)
(79,059,097)
90,358,877
37,042,939
Cash and cash equivalents at beginning of the period
110,330,988
63,478,659
Cash and cash equivalents at end of the period
200,689,865
100,521,598
(15,000)
2,250
Zakat charge for the period Company's share in the profit of an equity accounted investees End of service benefits provision, net Non - controlling interest in net loss of the subsidiary Changes in working capital: Inventories
CASH FLOW USED IN INVESTING ACTIVITIES Additions to Property and equipments Additions to Investment properties Additions to Biological assets Dividends received from associated company Proceeds from sale of property and equipment Net cash used in investing activities CASH FLOWS USED IN FINANCING ACTIVITIES
Net increase in cash and cash equivalents
Non - cash transactions Unrealized losses/(gains) from investment in available for sale securities
The accompanying notes from (1) through (17) form an integral part of these interim consolidated financial statements.
4
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 1.
ORGANIZATION AND ACTIVITIES Abdullah Al-Othaim Markets Company (the “Company”) is a Saudi joint stock company registered in Riyadh on 7 Rajab 1400 (May 21, 1980) under Commercial Registration Number 1010031185. The Company was converted from a limited liability company into a joint stock company according to the ministerial decree No. 227/G on 3 Ramadan 1428 (corresponding to 15 September 2007). The Group’s activities are to undertake trading in food supplies, fish, meat, agricultural crops, livestock, household equipment, constructing, managing and operating the commercial outlets under the brand name of Al “Othaim” The group is also engaged in constructing, maintaining and operating of storage and cooling warehouses. These interim consolidated financial statements comprise of the financial statements of the Company and following subsidiaries, together refer to as the “Group”.
2.
Name of the Subsidiaries
Effective ownership (%) at 31 March 2014 2013
Haley Holding Company Universal Marketing Centre Company Seven services Company Bayt Alwatan Company Marafeq Al Tashgheel Company Thamarat Al Qassim Company Haley Holding Company – Turkey Haley Holding Company – Bosnia and Herzegovina
100% 100% 100% 100% 100% 90% 100% 100%
100% 100% 100% 100% 100% ----
BASIS OF PREPARATION Statement of compliance These interim consolidated financial statements have been presented in accordance with the requirements of accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants (SOCPA). These interim financial statements do not include all the information presented in the annual financial statements; therefore, these interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements of the company for the year ended 31 December 2013. Basis of measurement The interim financial statements have been prepared on the historical cost convention (except for available for sale investments that are measured at fair value) using the accrual basis of accounting and the going concern concept. Use of estimates and judgments The interim financial statements prepared by the management require the use of estimates and assumptions which has an effect on the financial position and results of operation. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
5
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 2.
BASIS OF PREPARATION (Continued) Basis of consolidation The interim consolidated financial statements include the financial statements of the Company and its subsidiaries as disclosed in note (1) above. Subsidiaries are entities controlled by the Company. Control exist when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are excisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commence until the date control ceases. All intra group balances and financial transactions resulting from transactions between the Company and the subsidiaries and those arising between the subsidiaries are eliminated in preparing these consolidated financial statements. Any unrealized gains and losses arising from intra group transactions are eliminated on consolidation.
3.
SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted by the Group for the preparation of these interim consolidated financial statements are consistent with those of the Group’s annual consolidated financial statements. These accounting policies have been applied consistently to all the periods presented in the interim consolidated financial statements. Certain comparative amounts have been reclassified to conform with the current period presentation. Revenue recognition Revenue from sale of goods is recognised at the time of check-out sales where there is no continuing management involvement with the goods. - Opening fees, based on agreements with suppliers, are recognized at the opening of the store as part of the cost of sales is stated net. - Income from rebates and other supplier benefits are recognized on accrual basis according to the agreements with suppliers. For the presentation purposes, cost of sales is stated net of rebates. - Revenue from rent is recognised based on accrual basis and the rent contract period. Expenses -
Selling and distribution expenses principally comprise of costs incurred in the distribution and sale of the Company’s products. All other expenses are classified as general and administrative expenses. General and administrative expenses include direct and indirect costs not specifically part of cost of revenues as required under generally accepted accounting principles in the Kingdom of Saudi Arabia. Allocations between general and administrative expenses and cost of revenues, when required, are made on consistent basis. Investments Equity accounted investees Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another entity. Associates are accounted for using the equity method (equity accounted investee) and are initially recognized at cost. The financial statements include the Company’s share of income and expenses and equity movement of the equity accounted investees from the date that significant influence commences until the date that significant influence ceases. When the Company’s share of losses exceeds its interest in an associate, the Company’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of an associate. The Company's share of profits or losses of the investee companies is credited or charged to the interim consolidation statement of income. 6
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 3.
SIGNIFICANT ACCOUNTING POLICIES (Continued) Investments available for sale: Investments which are not for trading purposes and where the Company has no significant influence over its activities are classified as investments available for sale. These investments are initially recognized at cost which represents the fair value of the consideration paid including expenses related to acquisition of the investments; and are subsequently measured at fair value. Fair value changes other than impairment losses are recognized in equity. Fair value is determined by reference to the market value in an open market, if exists. In the absence of an open market, cost is considered to be the fair value for these investments. Permanent diminution in the value of the above mentioned investments, if any, is charged to the interim consolidated statement of income. Profit and loss resulted from disposing those investments are recognized in the period in which disposal occurs. Cash dividends from those investments are recorded in statement of income upon declaration by investees. Investment properties Investment properties in the form of buildings and lands held by the Company to earn rentals or for capital appreciation is recognized at cost less accumulated depreciation,or impairment if any. No depreciation is computed on lands. Inventories Inventories are stated at the lower of cost or market value. Cost is determined using the moving average cost method. Provisions and contingent liabilities Provisions are recognized for liabilities of uncertain timing or amount, when the Company has legal or constructive obligation arising as a result of a past event, it is probable, that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation. Property and equipment Property and equipment are stated at cost less accumulated depreciation. Expenditure on maintenance and repairs is expensed, while expenditure for betterment is capitalized. Depreciation is provided over the estimated useful lives of the applicable assets using the straight line method. Leasehold improvements and buildings constructed on leased lands are amortized over the shorter of the estimated useful life of the leasehold improvements and buildings or the remaining term of the lease. The estimated lives of the principal classes of assets are as follows: Years Machinery and equipment Buildings Vehicles Computers Furniture and fixtures Leasehold improvements
10 5 – 25 5–7 5–7 7 10
7
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014
3.
SIGNIFICANT ACCOUNTING POLICIES (Continued) Impairment of long-term assets The Company reviews on regular basis the carrying amount of its tangible assets to determine whether there is any indication that those assets have suffered impairment in value. In case such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where it is not possible to estimate the recoverable amount of individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. In circumstances where the recoverable amounts for the assets or the cash generating unit is estimated below its net book value, then the net book value for that asset or cash generating unit will be impaired to the recoverable amounts. Impairment losses are recognized immediately as expenses in the interim consolidated income statement. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior periods. A reversal of an impairment loss is recognized as income in the interim consolidated statement of income immediately. Biological Assets Biological assets are stated at cost of purchase or at the cost of rearing or growing to the point of commercial production, less accumulated depreciation. The costs of immature biological assets are determined by the cost of rearing or growing to their respective age. Biological assets are depreciated on a straight line basis to their estimated life of 5 years. Intangible assets Intangible assets represent costs incurred for the purpose of using rented stores (key money). These assets are amortized over the term of the related lease contracts. Borrowing costs Borrowing costs directly attributable to acquisitions or constructions of qualifying assets, which are the 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 the assets are substantially ready for their intended use or sale. All other borrowing costs are charged to the interim consolidated statement of income in the period in which they are incurred. Foreign currency translation Foreign currency transactions are translated into Saudi Riyals at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies at the interim consolidated balance sheet date are translated at the exchange rates prevailing at that date. Gains and losses from settlement and translation of foreign currency transactions are included in the interim consolidated statement of income. Accounting for lease contracts All leases entered into by the Company are classified as operating leases. Rental payments are charged to the interim consolidated statement of income using the straight-line method over the term of the operating lease contract. The lease amounts received by the Company as a lessor in operating lease contracts are recognized in the interim consolidated statement of income using the straight-line method over the period of the related leases.
8
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three month periods ended 31 March 2014 (Saudi Riyals)
3.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
Provision for end-of-service benefits End-of-service benefits are provided in accordance with the Saudi Arabian Labor Law based on total benefits due to an employee in case his services are terminated at the balance sheet date and are reduced by any payments in advance to employees. Differences in indemnities, if any, are computed and paid to employees upon termination. Zakat The Company is subject to the regulations of the Directorate of Zakat and Income Tax (“DZIT”) in the Kingdom of Saudi Arabia. The zakat charge is computed on the zakat base. Any difference in the estimate is recorded when the final assessment is approved, at which time the provision is cleared.
4.
RELATED PARTIES TRANSACTIONS AND BALANCES
Related parties of the Company comprises of its shareholders, subsidiaries, equity accounted investees and other affiliated companies under common control. During the period, the Company transacted mainly with Al Othaim Holding Company (founding shareholder) and Abdullah Al Othaim Real Estate Investment and Development Company (Associated company). Major transactions with related parties comprises of rental income and expenses. The Company transacts with related parties on mutually agreed prices and terms which are approved by the management to be as follows: Nature of Transactions Rent expense Rent income
2014
2013
2,796,219 9,391,098
2,814,821 9,391,098
4.1
Prepayments include an amount of SR 11.7 million ( 31 March 2013: SR 17.6 million) which represents rents paid to a related party in advance against early payment discount.
5.
INVESTMENTS Investments consist of the following: (Note) Investment in equity accounted investees Investments in available-for-sale securities
9
5.1
2014
2013
174,499,925 7,626,677
166,582,793 5,569,977
182,126,602
172,152,770
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals)
5. 5.1
INVESTMENTS (Continued) Investment in equity investees 2014 Balance, 1 January Company's share in net profits Cash dividends received
185,926,204 5,573,721 (17,000,000)
Balance, 31 March
174,499,925
2013 168,458,285 2,374,508 (4,250,000) 166,582,793
5.2 The investment in associated company represents 13.65% of the share capital of Abdullah Al-Othaim Real Estate Investment and Development Company. The remaining percentage is owned by Al-Othaim Holding Company, Mr. Abdullah Saleh Al-Othaim and his family members.
10
Abdullah Al- Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 6.
PROPERTY AND EQUIPMENT, NET Machinery and equipment
Land Cost 1 January 2014 Additions Transferred from CWIP Disposals 31March 2014
Buildings
Vehicles
Computers
Furniture and fixtures
Leasehold improvements
Capital Work in progress
Total
233,692,794 11,437,938 --245,130,732
250,701,737 6,623,545 410,633 (1,653,121) 256,082,794
174,200,849 760,063 --174,960,912
67,123,670 3,940,862 604,258 -71,668,790
86,482,539 3,268,720 338,235 (456,257) 89,633,237
129,638,075 3,586,302 261,160 (350,658) 133,134,879
145,040,606 2,744,050 2,112,960 -149,897,616
24,549,139 11,708,840 (3,727,246) -32,530,733
1,111,429,409 44,070,320 -(2,460,036) 1,153,039,693
-----
116,031,425 6,210,797 (1,581,959) 120,660,263
46,641,567 2,263,717 -48,905,284
47,028,160 1,499,278 -48,527,438
41,579,889 2,277,637 (414,716) 43,442,810
81,141,423 2,916,289 (298,260) 83,759,452
67,498,639 3,442,806 -70,941,445
----
399,921,103 18,610,524 (2,294,935) 416,236,692
Net book value 31 March 2014
245,130,732
135,422,531
126,055,628
23,141,352
46,190,427
49,375,427
78,956,171
32,530,733
736,803,001
31 March 2013
173,894,320
103,519,888
114,554,319
18,462,551
39,205,155
46,226,606
68,933,015
42,949,234
607,745,088
Accumulated depreciation 1 January 2014 Charge for the period Eliminated on disposals 31 March 2014
6-1
Title deeds of certain lands amounting to SR 37 million are still under progress to be transferred to the company
6-2
Land mentioned above amounting to SR 40 million (2013: SR 166 million) is mortgaged to some local banks as collateral against bank facilities. No capital commitments associated with these projects existed as at the interim consolidated balance sheet date.
11
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 7.
INVESTMENT PROPERTY The Investment in property include showrooms and buildings rented to others mainly and the balance at 31 March: Cost January 1 Additions Balance at March 31 Accumulated depreciation January 1 Charge for the period Balance at March 31 Net Book value
8.
2014
2013
583,071,888 581,766 583,653,654
581,454,662 554,086 582,008,748
71,685,135 5,691,771 77,376,906
48,740,699 5,670,517 54,411216
506,276,748
527,597,532
BIOLOGICAL ASSETS, NET The biological assets include Sheep and Cows owned by one of the subsidies (Thamarat Al Qassim) and the balance at 31 March: 2014 Cost January 1 2,250,813 Additions 34,144 Balance at March 31 2,284,957 Accumulated depreciation January 1 Charge for the period Balance at March 31
227,739 101,958 329,697
Net Book value 9.
LOANS AND MURABAHAS
a)
Short-term murabahas:
1,955,260
The Company has facilities from local commercial banks in the form of short-term murabahas to finance working capital. Unutilized balance of these murabahas loans as at 31 March 2014 amounted to SR 250 million (31 March 2013: SR 229 million). b)
Long-term loans and murabahas: 2014 Current portion Non-current portion
73,636,364 120,000,000
Total
193,636,364
2013 87,785,477 76,764,728 164,550,205
These facilities are secured by personal guarantees of one of the shareholders and mortgage of land title deeds owned by the Company with a book value of SR 40 million as at 31 March, 2014 (31 March, 2013: SR 97.5 million). 12
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 10.
STATUTORY RESERVE In accordance with the Regulations for Companies in Saudi Arabia and the Company’s bylaws, the Company has established a statutory reserve by the appropriation of 10% of net income until the reserve reaches 50% of the share capital. This reserve is not available for dividend distribution.
11.
VOLUNTARY RESERVE The extraordinary general assembly in its meeting held on Jumad Al-Awal 2, 1430 (corresponding to April 27, 2009) approved a voluntary reserve of 20% from the profits for the year ended 31 December 2008 and appropriated it as voluntary reserve for the expansion of the Company’s operations.
12.
EARNINGS PER SHARE Earnings per share are calculated based on net income for the period, income from operations and income from other sources (which includes: Share in profits of equity accounted investees, Finance expenses and Other income, net) divided by the weighted average number of shares in issue which are amounting to 22.5 million shares.
13.
DIVIDENDS In its meeting held on 6 April 2014, the Shareholder’s General Assembly approved the distribution of cash dividends of SR 67.5 million for the year 2013 at SR 3 per share. Dividends approved by the General Assembly Meeting for the shareholder dated 15 April 2013 amounting to SAR 67.5 million by an amount of SAR 3 for each share was paid on the year ended 31 December 2012.
14.
SEGMENTAL INFORMATIONS The Company’s activities are focused on retail and wholesale of food stuff and carries out its operations in the Kingdom of Saudi Arabia. The company also invest in developing of commercial malls. Some selected information was summarized for each business segment as at December 31: For the period ended Retail and wholesale 31 March 2014 31 March 2013 Retail and Real estate Retail and Real estate wholesale and leasing wholesale and leasing (Rent) (Rent) Sales Rents income Property and equipment, net Gross Profit
1,222,977,382 --
-24,025,046
736,803,001 204,660,688
506,276,748 13,518,311
13
1,066,426,099 -607,745,088
-21,498,492 527,597,532
164,061,357
11,419,266
Abdullah Al - Othaim Markets Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Un-audited) For the three month periods ended 31 March 2014 (Saudi Riyals) 15.
CONTINGENCIES AND COMMITMENTS
a)
As at 31 March, the Company had the following commitments and contingent liabilities:
b)
2014
2013
Letters of credit
45,860,467
7,134,664
Letters of guarantee
10,823,840
11,823,150
Capital commitments on projects in progress
20,661,561
10,668,562
Commitment against operating lease agreements: The outstanding lease commitments of the Company related to non-cancelable long term operating leases for the Company’s branches and malls as at 31 March were as follows:
16.
2014
2013
Less than a year More than one year, but less than 5 years
40,884,531
49,295,754
142,177,331
169,830,197
More than 5 years, but less than 25 years
212,708,069
216,558,552
SUBSEQUENT EVENTS On 6 April 2014, the shareholder’s General Assembly approved the increase of share capital from SR 225 million to SR 450 million through 100 % bonus shares. The company has obtained the approval from the concerned authorities and the procedure to amend the Company Articles of Association and its bylaws are in process.
17.
DATE OF AUTHORISATION The financial statements were authorized for issue by the board of directors on 20 Jumada’II 1435H corresponding to 20 April 2014.
14
