RAK INVESTMENT AUTHORITY GOVERNMENT OF RAS AL KHAIMAH RAS AL KHAIMAH UNITED ARAB EMIRATES

Transcription

1 RAK INVESTMENT AUTHORITY GOVERNMENT OF RAS AL KHAIMAH RAS AL KHAIMAH UNITED ARAB EMIRATES CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT FOR THE SIX-MONTHs PERIOD ENDED JUNE 30,

2 RAK INVESTMENT AUTHORITY GOVERNMENT OF RAS AL KHAIMAH RAS AL KHAIMAH UNITED ARAB EMIRATES Table of Contents Page Exhibit Report on Review of Condensed Interim Consolidated Financial Information 1 -- Condensed Consolidated Statement of Financial Position 2 A Condensed Consolidated Statement of Income 3 B Condensed Consolidated Statement of Comprehensive Income 4 C Condensed Consolidated Statement of Changes in Equity 5 D Condensed Consolidated Statement of Cash Flows 6 E Notes to the Condensed Interim Consolidated Financial Statements

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5 RAK INVESTMENT AUTHORITY GOVERNMENT OF RAS AL KHAIMAH RAS AL KHAIMAH UNITED ARAB EMIRATES CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX-MONTH PERIOD ENDED JUNE 30, (UNAUDITED) EXHIBIT B Six-Months Period Ended Note (Unaudited) (Unaudited) Revenue 118,538 88,190 Direct expenses (25,310) (15,845) Gross profit 93,228 72,345 Other income 22,802 20,267 Marketing expenses (15,246) (6,697) Administrative expenses (16,615) (14,824) Finance costs (21,030) (10,725) Income from associates 9 (c) 42,359 32,188 Profit for the period 105,498 92,554 ====== ===== Profit attributable to: Equity holder of the parent - Exhibit D 105,271 91,491 Non-controlling interest - Exhibit D 227 1, ,498 92,554 ======= ====== The attached notes 1 to 18 form part of these condensed interim consolidated financial statements (Unaudited) -3-

6 RAK INVESTMENT AUTHORITY GOVERNMENT OF RAS AL KHAIMAH RAS AL KHAIMAH UNITED ARAB EMIRATES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIOD ENDED JUNE 30, (UNAUDITED) EXHIBIT C For Six Months Ended (Unaudited) (Unaudited) Profit for the period Exhibit B 105,498 92,554 Other comprehensive income Difference resulting from re-measurement of investment in shares 26,840 (10,800) Total other comprehensive income 26,840 (10,800) Total Comprehensive income for the period 132,338 81,754 ====== ===== Profit attributable to: Equity holder of the parent 132,111 80,691 Non-controlling interest 227 1, ,338 81,754 ====== ====== The attached notes 1 to 18 form part of these condensed interim consolidated financial statements (Unaudited) - 4 -

7 RAK INVESTMENT AUTHORITY GOVERNMENT OF RAS AL KHAIMAH RAS AL KHAIMAH UNITED ARAB EMIRATES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) EXHIBIT D Capital Reserve Cumulative changes in fair value of available-for-sale investments Retained earnings Total Government equity Minority interest Total Equity Balance at 2007 (Audited) 635,794 18,300 50, ,522 (909) 703,613 Profit for the period Exhibit B ,491 91,491 1,063 92,554 Other comprehensive income for the period --. (10,800) --. (10,800) --. (10,800) Total comprehensive income for the period --. (10,800) 91,491 80,691 1,063 81,754 Balance at (Unaudited) 635,794 7, , , ,367 ====== ======= ====== ====== ===== ====== Balance at (Audited) Exhibit A 898,150 (26,400) 201,333 1,073, ,073,268 Profit for the period Exhibit B , , ,498 Other comprehensive income for the period , ,840 _--_ 26,840 Total comprehensive income for the period , , , ,338 RAK Government withdrawals (16,800) (16,800) --. (16,800) Balance at (Unaudited) Exhibit A 898, ,804 1,188, ,188,806 ====== ===== ====== ======= ==== ======= The attached notes 1 to 18 form part of these condensed interim consolidated financial statements (Unaudited) - 5-

8 RAK INVESTMENT AUTHORITY GOVERNMENT OF RAS AL KHAIMAH RAS AL KHAIMAH UNITED ARAB EMIRATES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) EXHIBIT E CASH FLOWS FROM OPERATING ACTIVITIES: ( Unaudited) (Unaudited) AED 000 AED 000 Profit for the period Exhibit B 105,498 92,554 Adjustments for: Depreciation 4,434 2,358 End of service benefits 93 (16) Finance costs 21,030 10,725 Interest income (208) (7,581) Profit from associates (42,359) ( 32,188) Profit on sale of share in associate -- (2,372) Dividend income -- (1,660) Operating profit before working capital changes 88,488 61,820 Inventories (Increase)/Decrease (1,072) 1,888 Trade and other receivables (Increase) (18,825) (73,345) Loans and advances Decrease/(Increase) 142,157 (568,020) Trade and other payables Increase 51,189 33,785 Net cash provided by/(used in) operating activities 261,937 (543,872) ======= ======= CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (8,443) (1,541) Land leveling (1,735) (1,560) Capital work in progress (172,950) (190,101) Advances for capital work in progress 75,384 (49,088) Advances for investment projects (63,990) (612,926) Trading properties under development (144,769) (353,874) Investment in subsidiaries (110,205) -- Investment in associates (48,869) (40,658) Sale of share of associates -- 9,906 Purchase of available-for-sale investments (781) (7,378) Proceeds from sale of shares AFS 500 Advances from customers (15,409) 1,025,564 Income from investment in associates 45, Interest income 208 7,581 Dividend income -- 1,660 Net cash (used in) investing activities (445,121) (212,415) ======= ======== CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from unsecured loans ,210 Repayment of unsecured loans (32,328) (31,303) Proceeds from medium-term bank loans 236,205 47,435 Repayment of medium-term bank loans (24,778) (8,681) Repayment of short-term borrowings from banks (2,737) 41,280 RAK Government current account (16,800) -- Finance costs paid (21,030) (10,725) Non-controlling interest Net cash from financing activities 139, ,216 ======= ======= Net (Decrease) in cash and cash equivalents (43,975) (387,071) Cash and cash equivalents at beginning of the period 122,858 1,046,384 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD - Exhibit A 78, ,313 ======= ======= The attached notes 1 to 18 form part of these condensed interim consolidated financial statements (Unaudited) -6-

9 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 1. LEGAL STATUS AND PRINCIPAL ACTIVITIES: RAK Investment Authority, a government owned Entity ( the Parent Entity ) was established by the Government of Ras Al Khaimah, U.A.E. under Emiri Decree No. 2 dated February 1, 2005 issued by H.H. Sheikh Saqr Bin Mohammad Bin Salim Al Qassimi, Ruler of the Emirate of Ras Al Khaimah. The Parent Entity and its subsidiaries constitute the Group ( the Group ). The domicile of the Parent Entity is in Ras Al Khaimah City, Emirate of Ras Al Khaimah, United Arab Emirates. The main activities of the Parent Entity are: 1. Investments in various projects. 2. Developing and promoting industrial, tourism & real estate activities in the Emirate of Ras Al Khaimah. 3. Issuing licenses and collecting lease rents from companies registered in Free Zone and Industrial Zone in the Emirate of Ras Al Khaimah. 4. Attracting investments in industrial sectors in the Emirate of Ras Al Khaimah. 2. BASIS OF PREPARATION OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS: The condensed interim consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards ( IFRS ) IAS 34 Interim Financial Reporting. They do not include all the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended. In preparing these condensed interim consolidated financial statements, the significant judgments made by the management in applying the Group s accounting policies and the key sources of estimation of certainty were the same as those that applied to the consolidated financial statements as at and for the year ended. In addition, results for the six months ended are not necessarily indicative of the results that may be expected for the financial year ending. 3. LAND: a) This item comprises of the following: Land Note 3 (b) 976, ,072 Land leveling 25,685 24,950 Total Exhibit A 1,001,757 1,000,022 ======== ======= 7

10 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 3. LAND: (continued ) b) The details of land is as follows: Jun 30, Balance as of January 1, 975, ,794 Additions 1,000 77,121 Revaluations Note 3 (d) ,157 Total Note 3 (a) above 976, ,072 ======= ====== c) The details of land area and valuation during year are as follows: Area Amount (in Sqr. Mts.) AED 000 Land granted by RAK Government and value stated as per valuation report of the independent valuer 18,985, ,757 Purchased land 18,887 29,315 Area of land carrying at nominal value 15,314, Total 34,319, ,072 ======== ======= d) The off-setting amount of land revaluation is credited to capital reserve. e) The land as shown in Note 3 (b) above includes amounting to AED 666,074 thousands, with service area 6,458,484 square meters, comprises of various parcel of land which are presently mortgaged with different banks against financing of various projects of the Parent Entity. 4. PROPERTY, PLANT AND EQUIPMENT: During the six-month period ended additions to property, plant and equipment amounted to AED 106,758 thousands (six-month period ended : AED 1,541 thousands) and depreciation for the six-month period ended amounted to AED 4,434 thousands ( six-month period ended : AED 2,333 thousands). The subsidiary s (Beaufort) factory and its related buildings are constructed on plots of land leased from the Government of Ras Al Khaimah. All property, plant and equipment are located in U.A.E. 8

11 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 5. CAPITAL WORK-IN-PROGRESS: This item comprises of the following: AED 000 AED 000 Al Hamra Industrial Zone infrastructure 66,320 56,608 Al Hamra Free Zone infrastructure 26,778 24,548 Labour accomodation 13,597 20,787 Al Ghayl infrastructure 33,507 28,666 RAK Financial City 15,994 12,447 Customs Building 2,407 2,364 Al Hamra Amenity Centre 94,755 66,443 Al Hamra Power Project 77, ,934 Al Hamra Commercial Centre 10,184 6,884 Vacuum Sewerage System -- 2,475 RAKIA accommodation 86, Other projects 3,404 1,546 Total Exhibit A 431, ,702 ======= ======= 6. ADVANCES FOR INVESTMENT PROJECTS: a) This item comprises of the following: Advances for investment in subsidiaries Note 6 ( b) 636, ,096 Advances for investment in associates 86,445 85,491 Advances for other investments 51,644 51,644 Total Exhibit A 774, ,231 ====== ====== b) Advances for investment in subsidiaries: This item comprises of the following: Advance to RAK Infra Holding Ltd. 257, ,320 Advance to RAK Vision Ltd. 183, ,960 Advance to RAKIA Georgia Free Industrial Zone L.L.C. 42,651 40,811 Advance to RAK Investment Authority, Georgia 80,482 80,482 Advances for other investments in subsidiaries 71,984 47,523 Total Note 6 (a) above 636, ,096 ====== ====== 9

12 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 7. TRADING PROPERTIES UNDER DEVELOPMENT: 1. Trading properties under development represents the costs of the following projects: Al Marjan Island 1,023, ,912 Al Dana Island 413, ,723 Gateway Project 137, ,242 Projects in RAK Financial City 51,435 50,668 Al-Hamra Views 13,522 12,992 Other projects 6,561 4,785 Total Exhibit A 1,645,222 1,499,322 ======= ======= 2. The cost of Al Marjan Island amounting to AED 1,023,571 thousands includes an amount of AED 79,780 thousands being the capitalized cost of profit on Sukuk. 3. The movement details of trading properties under development are as follows: Balance at January 1, 1,499, ,201 Additions of new projects 145, ,118 Sale of a parcel of land -- (53,547) Deferred commission on projects ,550 Net Note 7 (1) above 1,645,222 1,499,322 ======= ======== 8. INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES: a) This item comprises of the following: Ownership Ratio London International Television Ltd. Note 8 (b) & (c) 53 11,612 11,612 RAK Power L.L.C. Note 8 (b) Poti Sea Port Note 8 (b) & (c) , ,615 Total , ,927 Less: Provision for impairment of investment in subsidiaries -- (7,347) (7,347) Net - Exhibit A 445, ,580 ======= ======= b) These subsidiaries investment value represents the share of RAK Investment Authority as of the financial statements date. c) This represents the investment in subsidiary located in a foreign country. 10

13 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 9. INVESTMENT IN ASSOCIATES: a) This item comprises of the following: Ownership Ratio Falcon Technologies International L.L.C ,839 16,617 AN RAK Aluminium Ltd. Note 9 (b) ,430 73,511 Pioneer Cement Industries L.L.C , ,213 Polo RAK Amusement L.L.C. Note 9 (b) ,059 8,509 Spira International L.L.C. Note 9 (b) 20 6,388 6,388 RAK Ghani Glass L.L.C. Note 9 (b) ,190 6,809 RAK Petropack L.L.C. 40 1, RAK Warehouse & Leasing L.L.C. 50 1,133 2,300 Total 281, ,243 Provision for impairment of investments in associates (3,800) (3,800) Net - Exhibit A 277, ,443 ======= ====== b) These associates investment value represents the share of RAK Investment Authority as of the financial statements date. 11

14 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 9. INVESTMENT IN ASSOCIATES: (continued ) c) The movement over these accounts are as follows: Balance at Dec. 31, Additions Dividend received Profit /(Loss) during the period Balance at June 30, (Audited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) AED 000 Falcon Technologies International L.L.C. 16, (4,778) 11,839 AN RAK Aluminium Ltd. 73,511 45, ,430 Pioneer Cement Industries L.L.C. 121, (45,938) 44, ,761 Polo RAK Amusement L.L.C. 8,509 2, ,059 Spira International L.L.C. 6, ,388 RAK Ghani Glass L.L.C. 6, ,381 10,190 RAK Petropack L.L.C ,733 RAK Warehouse & Leasing L.L.C. 2, (1,167) 1,133 Total Note 9 (a) above 236,243 48,869 (45,938) 42, ,533 ====== ====== ======= ===== ======= 12

15 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 10. AVAILABLE-FOR-SALE INVESTMENTS: a) The movements over these investments are as follows: Balance at January 1, 214,439 96,125 Purchase during the period ,514 Transferred from investment in associates Sale during the period (500) -- Difference resulting from remeasurement of available-for-sale investments Exhibit C 26,840 (44,700) Net - Exhibit A 241, ,439 ====== ====== b) Available-for-sale investments are classified as follows: Quoted investments 76,340 49,500 Unquoted investments 165, ,939 Total Note 10 (a) above 241, ,439 ====== ====== c) Available-for-sale investments are classified into the following business segments: Construction sector 155, ,000 Banking sector 76,340 49,500 Service sector 4,193 4,193 Industrial sector 6,027 5,746 Total Note 10 (a) above 241, ,439 ====== ====== Unquoted available-for-sale investments are carried at cost due to the unpredictable nature of future cash flow and lack of other suitable methods for arriving at a reliable fair value. 13

16 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 11. LOANS AND ADVANCES: a) This item comprises of the following: Advance to suppliers 44,863 38,475 Loan to a subsidiary Note 11 (b) 3,318 3,333 Loan to associates Note 11 (c) 132, ,043 Loan to others Note 11 (d) 516, ,070 Advances to others 1,830 1,538 Total Exhibit A 698, ,459 ====== ====== b) Loan to a subsidiary: This item represents loan given to London International Television Ltd, an unconsolidated subsidiary of the parent entity. c) Loan to associates: This item comprises of the following: Falcon Techonologies International L.L.C. 127, ,543 Polo RAK Amusement L.L.C. 5,000 2,500 Total Note 11 (a) above 132, ,043 ====== ======= d) Loan to others: This item comprises of the following: Rakeen Development PJSC 283, ,433 Dana Executive Air 197, ,186 Ras Al-Khaimah Ceramics Co. PSC 32, ,410 Others 3,276 3,041 Total Note 11 (a) above 516, ,070 ====== ====== 14

17 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 12. SUKUK PAYABLE: RAKIA Sukuk Company Limited, for which the Parent Entity acts as a managing agent for the purpose of issuing Sukuk, is a Cayman Islands exempted company with limited liability incorporated on July 24, 2007 with all of its issued shares being fully paid and held by Maples Finance Limited as share trustee. In December 2007, RAKIA Sukuk Company Limited issued bonds in the form of Trust Certificates/Sukuk (the "Sukuk") for a total value of AED 1,193,888 thousands (equivalent to US$ 325,000 thousands). The Sukuk is structured to conform with the principles of Islamic Sharia. The Sukuk have a profit rate which is calculated on the basis of LIBOR plus 1.50% per annum paid quarterly and due for repayment in December The Government of Ras Al-Khaimah guaranteed payment obligations on the closing date of the Sukuk". 13. MEDIUM-TERM BANK LOANS: The Group had entered into following medium term bank loans: a) A loan amounting to AED 35,000 thousands has been obtained to finance the development of Al Hamra Al Jazeera Industrial and Free Zones. The loan is being repaid in 8 equal semiannual installments commencing from January alongwith interest. b) A loan amounting to AED 112,500 thousands has been obtained for the purpose of partly financing the cost of infrastructure development of RAKIA Industrial and Free Zones. The loan is being repaid in 10 equal semi-annual installments commencing from October 10, alongwith interest. c) A Musharaka (Islamic Loan) amounting to AED 90,000 thousands has been sanctioned for the purpose of financing Al Hamra Amenity Centre in RAKIA Free Zone. Out of the loan sanctioned, an amount of AED 77,781 thousands has been withdrawn as of the financial statements date. The loan will be repaid in 17 quarterly installments commencing from 24 th month of signing of the facility documentation. d) Term loan amounting to AED 110,000 thousands has been sanctioned for the purpose of financing construction of RAKIA residential complex and AED 40,000 thousands for the purpose of construction of road in Al Ghail Industrial Area. Out of the loan sanctioned, an amount of AED 118,676 thousands has been withdrawn as of the financial statements date. e) Term loan amounting to AED 135,600 thousands has been sanctioned for the purpose of financing Al Hamra Power Project. Out of the loan sanctioned, an amount of AED 70,000 thousands has been withdrawn as of the financial statements date. f) The detail of medium-term bank loans are as follows: Balance at January 1, 153, ,410 Loans obtained during the period 385,345 72,424 Installments paid during the period (24,778) (28,749) Balance at end of the period 513, ,085 ======= ======= 15

18 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 13. MEDIUM-TERM BANK LOANS: (continued ) g) The maturity-wise details of the medium term bank loans are as follows: Medium-term maturity of bank term loans Exhibit A 365, ,283 Current portion of bank term loans Exhibit A 148,220 40,802 Total 513, ,085 ======= ======= h) The above medium-term bank loan is secured by: First degree registered mortgage over plots of land infavour of bank. 10 postdated cheques covering the semi-annual installment plus interest in favour of bank. 14. UNSECURED LOANS: a) The unsecured loans amounting to AED 548,395 thousands had been obtained at market rate to provide funding support to the Parent Entity for ongoing investment projects in the Emirate of Ras Al Khaimah. These loans have to be repaid according to the loan agreements, in various repayment schedules. The details are as follows: Investment and Development Office Government of RAK 477, ,555 Emirates Rock & Marbles 64,715 97,146 Al Hamra Constructions 3,298 3,195 Al Hamra Fort Hotel 2,827 2,150 Total 548, ,046 ======= ======= b) The movements over unsecured loans during the year are as follows: Balance at January 1, 580, ,826 Loans obtained during the period ,834 Interest accrued 2,672 7,146 Loans settled during the period (35,000) (74,760) Balance at end of the period 548, ,046 ======= ======= 16

19 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 14. UNSECURED LOANS: (continued ) c) The maturity-wise detail of unsecured loans is as follows: Medium-term maturity of unsecured loans Exhibit A 485, ,046 Current portion of unsecured loans Exhibit A 62,827 60,000 Total 548, ,046 ====== ======= 15. ADVANCES FROM CUSTOMERS: This item comprises of the following: Advances from Al Marjan Island s customers 1,154,370 1,156,544 Advances from Al Dana Island s customers 735, ,249 Advances from Gateway s customers 115, ,989 Advances from RAK Financial City s customers 114, ,377 Advances from Al Hamra View s customers 23,047 24,958 Advances from other customers 51,950 34,237 Total - Exhibit A 2,194,945 2,210,354 ======== ======= 16. TRADE AND OTHER PAYABLES: a) This item comprises of the following: Trade accounts payable Note 16 (b) 184, ,912 Advance lease rent 50,568 44,458 Trust receipts 5,038 2,940 Other payables Note 16 (c) 38,494 29,191 Total Exhibit A 278, ,501 ====== ====== b) Trade accounts payable amounting to AED 184,590 thousands include an amount of AED 124,377 thousands being due to six creditors only which constitutes 67% of total balance thereof. 17

20 FOR THE PERIOD ENDED JUNE 30, (UNAUDITED) 16. TRADE AND OTHER PAYABLES: (continued ) c) Other payables: This item comprises of the following: Advance from customers 17,340 12,024 Accrued Sukuk profit 3,665 3,148 Other payables 17,489 14,019 Total Note 16 (a) above 38,494 29,191 ===== ====== 17. COMMITMENTS: Commitments amounting to AED 2,986,192 thousands (estimated) correlated to infrastructure and utility developments of various long-term projects approved as on. 18. GENERAL: a) Certain amounts for the prior period were reclassified to conform to current period presentation. b) The figures in the condensed interim consolidated financial statements are rounded to the nearest thousand Dirham of United Arab Emirates unless otherwise stated. 18