Arab Company For Drug Industries And Medical Appliances (ACDIMA)

Transcription

1 Arab Company For Drug Industries And Medical Appliances (ACDIMA) Annual Report 2015

2 Arab Company For Drug Industries And Medical Appliances (ACDIMA) Authorized Capital KD 90 Million Headquarters Hashemite Kingdom of Jordan P.O. Box Amman Jordan Tel: Fax: Acdima s Regional Office Tunis No. 2 Rue Youssef Rouissi Zincant No El-Manar 2 Tunisia Tel: / Fax: acdima.tunisia@planet.tn Acdima s Regional Office Riyadh King Khaled Intl. Airport Industrial Zone. CAD Middle East Admin. Bldg. P.O. Box Al-Riyadh Saudi Arabia Tel: Fax: gcc-office@acdima.com

3 C O N T E N T S Index Page ACDIMA in Brief 4 Shareholders 5 Chairman of the Board of Directors, Board Members and Director General 6 Report of Board of Directors 7 Auditor s Report 18 Consolidated statement of financial posi on as at December 31, Consolidated statment of comprehensive income for the year ended December 31, Consolidated statment of changes in owners equity for the year ended December 31, Consolidated statment of cash flows for the year ended December 31, Notes to the consolidated financial statements 27

4 ACDIMA in Brief - Arab Company for Drug Industries & Medical Appliances. - A Pan-Arab shareholding company established by a resolution from the Arab Economic Unity Council on March 6, Authorized Capital is: Kuwaiti Dinar (90) million. Objectives of the Company On the national level, ACDIMA sets up a strategy for the drug industries and medical appliances, conducts the feasibility and technical studies for the projects to be established in the Arab World, subscribes along with the Arab governments and other parties in these projects. On the international level, ACDIMA builds relations with multinational bodies to assist in setting up and participating in projects in the Arab World. It also concentrates on the field of training to create and develop competent personnel for the drug industries and medical appliances. ACDIMA is a Share Holder in the following companies: 1. Saudi Pharmaceutical Industries and Medical Appliances Corporation (SPIMACO-ADDWAEIH) Al-Qassim, Saudi Arabia. 2. Gulf Pharmaceuticals Industries (JULPHAR) Ras Al-Khaima, U.A.E. 3. Societe Arab Des Industries Pharmaceutiques (SAIPH) Tunisia. 4. Arab Company for Antibiotics Industries (ACAI) Iraq. 5. Acdima For Veterinary Medicines (Acdivet) Syria. 6. ACDIMA Center for Bioequivalence and Pharmaceutical Studies Jordan. 7. CAD Middle East for Pharmaceutical Industries Riyadh, Saudi Arabia. 8. The Arab Company for Veterinary Production(ACVMP) - Khartoum, Sudan. 9. Arab Company for Pharmaceutical Products (ARABIO) Jeddah, Saudi Arabia. 10. Tassili Arab Pharmaceutical Co. (Taphco) Algeria. 11. Shamra Pharma Aleppo, Syria 12. Industrie Pharmaceutique Arabo Tangier, Morocco. 13. Al-Arabiya for Medical Solutions and Medicines Libya. ACDIMA s Regional Offices 1. Regional Office in Tunis 2. Regional Office in Riyadh 4

5 Shareholders in Acdima as on 31/12/2015 ACDIMA S authorized capital consists of (90,000,000) Ninety Million Kuwaiti Dinars distributed on (9,000) Nine Thousand indivisible shares, the par value of each is (10,000) Ten Thousand Kuwaiti Dinars. Details of paid up capital as at 31/12/2015 are as follows: Governments and other Participants Number of Shares Shares Fractions Resulted from New Subscription Kuwaiti Dinars United Arab Emirates 647 6,470,000 Kingdom of Bahrain ,000 Republic of Tunisia 145 1,450,000 Kingdom of Saudi Arabia 1, ,668,000 Republic of Sudan ,000 Syrian Arab Republic 647 6,470,000 Republic of Iraq 1,299 12,990,000 State General Reserve Fund Ministry of Finance/ Sultanate of Oman ,000 Qatar Holding ,385,000 State of Kuwait 647 6,470,000 Libyan Foreign Investment Co ,470,000 Republic of Yemen ,000 State of Palestine ,000 Ministry of Finance, Jordan ,000 The Arab Pharmaceutical Manufacturing Co. Ltd., Jordan ,000 Saidal/ Algeria ,000 Arab Republic of Egypt 125 1,250,000 Total Subscribed & Paid Shares 6, ,276,000 Unpaid Shares 2, ,724,000 Total 8, ,000,000 N.P: ACDIMA s authorized capital was increased from (60) Million Kuwaiti Dinars to (90) Million Kuwaiti Dinars upon a resolution taken by the general assembly held in ACDIMA s headquarters in Amman on October 10th, Another assembly was held on 3/4/2014 for scheduling new subscriptions. A number of the existing shareholders expressed their willingness to participate in the capital increase in accordance with their original share in the paid capital, a timetable was set to effect their payments which started in the year 2015 and ends during the year Egypt s contribution to ACDIMA is frozen. Shares fractions which are mentioned in the above table have resulted from participations in the capital increase calculated as percentages of the amount of the increase on the basis of participants Shareholding in the paid capital on 31/12/

6 Chairman of The Board of Directors Board Members and Director General Mr. Saleh Al-Khaliwi Chairman of the Board of Directors Kingdom of Saudi Arabia Mr. Adil Kareem Member of the Board Republic of Iraq Mr. Omar Al-Hamed Vice Chairman of the Board State of Qatar Mr. Abdulhamid Al-Bakush Member of the Board Libyan Foreign Investment Co. Dr. Hammodi Abbas Hameed Member of the Board Republic of Iraq Dr. Ali Zawawi Member of the Board Kingdom of Saudi Arabia Dr. Mohammad Khalil Mohammad Director General 6 Dr. Salah Al Ateeqi Member of the Board State of Kuwait Ms. Sheikha Khalifa Ben Zaal Member of the Board United Arab Emirates

7 In The Name of Allah, The Most Merciful, The Most Gracious The Fortieth Annual Report of ACDIMA Board of Directors for the Year Ended on 31/12/2015 Dear Respected Shareholders, Peace be Upon You, On my behalf and on behalf of the board members of Arab Company for Drug Industries and Medical Appliances (ACDIMA), I would like to present to you the annual report of the company activities during the year ACDIMA Activities in The Year 2015 ACDIMA continued to dedicate considerable attention to investments in Arab pharmaceutical industry by employing its funds in new pharmaceutical projects or contributing to Arab pharmaceutical companies. This is achieved by either allocating new funds to purchase shares in reputable pharmaceutical companies or supporting these companies in running their business. In addition, ACDIMA incentivized these companies to cope with the latest technologies in this field, and train technical staff to be able to keep pace with the developments in the pharmaceutical industry. The outcomes of the Company activities showed operational profit with the amount of 4,011,468 in the year 2015 as compared to 1,722,327 in the year In the field of bioequivalence and other pharmaceutical studies, ACDIMA proceeded with the strategic plan to develop ACDIMA Center for Bioequivalence and Pharmaceutical Studies to be one of the most advanced and high-end centers in this field worldwide. Thanks to the efforts exerted by ACDIMA s Board of Directors, the efforts of the general management and ACDIMA Center for Bioequivalence and Pharmaceutical Studies; the Center was able to compete with other international centers engaged in this line of business and provides high quality studies. Regarding boosting the Company investments; The Board of Directors is considering to contribute in a number of quality pharmaceutical projects to benefit from the 50% increase in capital of the company, which was approved in Investments in Pharmaceutical Projects Investments in pharmaceutical projects are instrumental to achieving the key objectives for which ACDIMA was established. Through contributions in these projects, ACDIMA seeks to stimulate Arab investors to set up joint leading pharmaceutical projects that employ advanced technologies in the Arab pharmaceutical industry in accordance with outstanding manufacturing requirements of pharmaceutical products. There are various projects distributed across the Arab World as shown in (Table 1) in which ACDIMA s total investments is approximately 87,595,214. In addition, ACDIMA Board of Directors approved a strategy that aims at boosting investments in pharmaceutical projects in case the studies prove the feasibility of such projects. Also, the Company aims at increasing its shareholdings in the capital of companies in which it is already a shareholder. 7

8 As for existing projects, ACDIMA s total contributions has raised the capital of subsidiaries during 2015 to an amount equivalent 5,509,320, In addition to granting loan facilities worth 234,000 as shown in the following table: Companies in which ACDIMA is a Shareholder Purchase of 580 thousand shares in Saiph - Tunisia Transferring Contributions in 2,276,500 Granting Loans in Capital increase in IPharma Morocco Capital increase in CAD Middle East Pharmaceutical Industries Saudi Arabia Rehabilitation of ACDIMA for Veterinary Medicines Industry ACDIVET Syria 672,000 2,476,500 48,305 Contribution to APICO s Shares - Libya 36,015 Loan Grant to Saudi Ajal Company Saudi Arabia 234,000 Total 5,509, ,000 Following is a brief summary of the activities of ACDIMA,s wholly owned companies as well as the other companies in which ACDIMA is a shareholder, in addition to the business outcomes of these companies in the year 2015: First: ACDIMA s Subsidiaries and Wholly Owned Investments a. ACDIMA for Veterinary Medicines Industry ACDIVET / Syria: ACDIMA owns 100% of the Company s capital. The value of ACDIMA s proprietary rights in this Company is 1,013,423. ACDIVET sales in 2015 amounted to SYP 77.5 Million, equivalent to 108,464. Net profit amounted to SYP 18,450,563, equivalent to 25,830. The company rehabilitated its building, equipment and started production in sequence with the current situation in Syria. b. ACDIMA Center for Bioequivalence and Pharmaceutical Studies/ Jordan: ACDIMA Center for Bioequivalence and Pharmaceutical Studies was established in 2000 as a center that conducts bioavailability, bioequivalence, clinical, pharmacokinetics and pharmaceutical studies, as well as chemical analyses of biological samples. The financial outcomes indicate that the Center has generated a net profit of USD 441,798 in 2015, equivalent to 133,865 as compared to 2014 profits estimated at USD 258,122, equivalent to 73,565. Moreover, the Center has executed various bioequivalence studies in respect of various pharmaceutical products for a number of pharmaceutical factories and companies in the Arab and foreign Countries. The Center is now accredited by a large number of Arab health authorities as a reference center for these studies. 8

9 ACDIMA provided continuous support for this project through training, qualifying technical personnel and supplying modern equipment and supplies to the Center. The strategic plan of the Center s development was adopted, and a clinical site was set up in the Center, and its analytical instruments were upgraded to comply with the set global standards in this context. Second: Companies in which ACDIMA is a Shareholder The financial data stated in this part of the report gives a summary of the available information on achievements of below companies during 2014 and a. Producing Companies 1. Saudi Pharmaceutical Industries and Medical Appliances SPIMACO / Saudi Arabia: The capital of this company is SAR 1,200,000,000 equivalent to 93,600,000. ACDIMA owns % in SPIMACO s capital. SPIMACO is one of the major pharmaceutical companies in the Arab World, which continues to strengthen its investments. It currently has expansion projects in its factory. The Company owns several companies including ENAYA, TAPHCO, CAD, IPharma, and Dammam Pharma, Medical ARAC, Spimaco Egypt, Spimaco Algeria. SPIMACO s sales in 2015 amounted to SAR Billion, with 16% increase as compared to the previous year, thus achieving a profit in the same year with the amount of SAR Million, equivalent to 29 Million, with 12.7% increase as compared to the previous financial year, Gulf Pharmaceutical Industries (JULPHAR) / United Arab Emirates: The capital of this Company is AED 1050 Million, equivalent to 86.6 Million. ACDIMA owns 9.15% in JULPHAR s capital. In 2015, JULPHAR s sales amounted to AED 1.47 Billion, with 5.9% increase as compared to the previous year, JULPHAR generated profits amounting to AED Million in 2014, equivalent to 18.7 Million; at 12.1% increase as compared to the previous financial year JULPHAR is one of the leading manufacturers of pharmaceuticals in the Middle East. Its registered products exceed 3,600 products in more than 50 Countries. Moreover, a new factory for JULPHAR was inaugurated in Ethiopia for general and topical products, as well as new projects in Saudi Arabia and injection plant in Jebal Ali in the United Arab Emirates, and participating in a drug factory in Bangladesh. 3. Société Arabe Des Industries Pharmaceutiques SAIPH / Tunisia: ACDIMA owns 68.1% in the capital of SAIPH, estimated at TND 26,920,000 equivalent to 4,011,080. During 2015, the company s sales amounted to TND Million, the equivalent of 6.9 Million, an increase of 1% from the previous year, and profits amounted to TND 378,473 for the same year, the equivalent of 56,392, compared to a loss in 2014 of TND 7,931,391. 9

10 4. Arab Company for Antibiotics Industry ACAI / Iraq: ACDIMA owns 25.66% of the authorized capital and 34.06% of the paid-up capital of this company, estimated at IQD 30,000,000 (based on the exchange rate of the Iraqi currency (Dinar) in the establishment year: IQD 1 = USD 3.224). In 2015, ACAI s sales amounted to IQD Billion, equivalent to 3.55 Million, with 25% decrease as against the previous year. In addition, ACAI losses in the same year totaled IQD Billion, equivalent to 3.3 Million, with a further loss increase at 374% as compared to the losses of Industrie Pharmaceutique Arabo IPharma / Morocco: ACDIMA owns 21% in the share capital of IPharma, estimated at MAD 150 Million, equivalent to around 4,650,000. In 2015, IPharma s sales amounted to MAD 45.3 Million, with a 46.7% increase as against the previous year. In addition, IPharma profit in the same year totaled MAD 5 Million, equivalent to 155 Thousand, with an increase at 60.5% as compared to the profit of Shamra Pharma Dental Anesthetic Company/ Syria: ACDIMA owns 43.9% in the share capital of Shamra Pharma which amounts to SYP 164,640,000, equivalent to 263,424. The production of the company has been suspended since June 2012, due to the prevailing circumstances in Syria. ACDIMA s Board of Directors took a resolution to allocate an impairment provision for the whole value of investment in this company in accordance with the generally accepted accounting principles and standards. 7. Arab Company for Pharmaceutical Products ARABIO / Saudi Arabia: ARABIO was founded in 2007 with a capital of SAR 186,000,000, equivalent to 14,508,000. ACDIMA owns 31.38% in the capital of this company. ARABIO sales in 2015 amounted to SAR Million, with a decrease at 23% as compared to the previous year. The profit of the Company for the same year amounted to SAR 5.03 Million, equivalent to Thousand, a 43% increase from the previous year. ARABIO is considered to be the leading company in the Gulf region in manufacturing and marketing vaccines and biological products, in addition to conducting research leading to the discovery of new products. The production program consists of injection lines, liquid containers, and dried containers to produce vaccines for seasonal influenza, and meningitis. Moreover, ARABIO targets producing other vaccines in the future, such as rotavirus, measles and other vaccines. The company s factory was licensed, and certain products were registered at the Saudi Food and Drug Authority. 8. Saudi Ajal Company/ Saudi Arabia: Saudi Ajal Company was established in 2008 in The Kingdom of Saudi Arabia, with a capital of SAR 9,000,000 equivalent to 729,000, while ACDIMA owns 20% of the company s capital. The company revenues for the year 2015 amounted to SAR 7.75 Million against SAR 1.43 Million for the year 2014 at an increase of 442% as compared to the year The company profits for the year 2015 amounted to SAR 826,843 against a profit of SAR 192,790 for the year 2014 with and increase of 329%. The company aims at acquiring, managing and maintaining hospitals, medical centers, medical laboratories, bioequivalence centers, and medical and pharmaceuticals consultation centers. 10

11 9. CAD Middle East Pharmaceutical Industries/ Saudi Arabia: The Company was established in 2006 with a capital of SAR 200,000,000, equivalent to 16,200,000. ACDIMA owns 25% in the capital of this Company. The company s revenue for 2015 has amounted to SAR Million compared to SAR Thousand for In 2015, The company s earnings amounted to about SAR 13.8 Million against a loss of SAR 52.4 Million in The company is considered a modern and multi-goal industrial enterprise, it was designed on the concept of separate manufacturing units using most advanced technical systems for manufacturing highest quality active raw materials (APIs) in consistence with Good Manufacturing Practices (cgmp) which is globally accredited and abides by recognized standards and stipulations set by regulatory bodies such as FDA, European Drug Quality management European Drug Agency. This project is one of the pilot projects in the Arab World for producing active raw pharmaceuticals. As Arab pharmaceutical factories still rely on importing their demanded requirements of these materials from abroad; the products of the project will be marketed inside and outside the Arab Countries. b. Established Non-Producing Companies 1. Tassili Arab Pharmaceutical Company TAPHCO / Algeria This Company was established in the year 2000 with a capital of DZD 1,083,482,400. ACDIMA owns 28.98% in its capital, as equivalent to Million. Losses of the Company in 2015 amounted to DZD 37.6 Million, equivalent to 106 Thousand. It is expected that Taphco start production in the second half of The Arab Company for Veterinary Medicine Production ACVMP / Sudan The capital of this Company is USD 37,000,000, equivalent to 11,211,000. ACDIMA owns 40% of ACVMP capital, together with other shareholders. The losses of the Company in 2015 amounted to USD Thousand, in comparison with USD 326 Thousand loss in The Company was registered in The board of directors was formed and commenced performing its duties and functions. The Company contracted with highly experienced professionals to conduct the pharmaceutical studies and detailed engineering designs necessary for the project. The designs were actually initiated in January, 2008, and were completed by the end of December of the same year according to the scheduled timetable. Hardware and equipments are being installed for the project, and it is expected to start trial production in the second half of Al-Arabiya for Medical Solutions and Medicines/ Libya This Company was established with a capital of LYD 1 Million, equivalent to 214,000. ACDIMA owns 49% of the Company s capital. The company aims to create and establish a factory for Intravenous solutions and medicines in accordance with the growing international standards in the field and in particular the good manufacturing (cgmp) conditions and to the production and marketing of Intravenous solutions and medicines, and exporting the surplus in accordance with the applied legislations. The company has the right of establishing or having shares in companies and projects related to its activities. 11

12 Third: Financials ACDIMA s Income Statement for the year ending on 31/12/2015 Pursuant to Article 32 of ACDIMA s Articles of Association; the Board of Directors would like to present to you the Company s income statement for the year 2015, as follows: Item 2014 Kuwaiti Dinar 2015 Kuwaiti Dinar Sales 52,201 7,192,497 Cost of Sales (32,334) (6,314,440) Gross Profit for the Year 19, ,057 ACDIMA s share in associated companies profit 4,438,170 4,224,595 Profit from available-for-sale financial assets 552,844 1,101,740 Profit available from Investment Portfolios 57,176 21,710 Other Revenues 195,453 1,391,123 General and Administrative Expenses (2,189,064) (1,368,631) Sales and Distribution Expenses (8,779) (1,445) Profits (Losses) of the Bioavailability Center 73, ,865 Financing Expenses (159,491) (1,005,370) Profit of the year before Deducting Taxes and Bonuses 2,979,741 5,375,644 Expenses of Foreign Taxes on Dividend Distribution (1,138,414) (1,224,940) Income Tax 0 (14,841) Bonuses Provision for Members of the Board (119,000) (124,395) Net Profit 1,722,327 4,011,468 12

13 Recommendations of The Board of Directors First: Approving the Financial Position and income statement accounts for theyear Second: Distributing net profits as follows: 1. Deduct 10% of the net profit to add the same to the statutory reserve. 2. Distribute free shares at a rate of 3% of the paid-up capital (excluding the contributions of The Arab Republic of Egypt, as contributions are frozen). The differences in share fractions will be written for shareholders. 3. Determine the remunerations of the members of the Board of Directors and their discharge. Finally, the board of directors would like to thank the management and members of the Company for their outstanding performance and diligent work in order for ACDIMA to achieve its objectives. We wish the Company further success and progress in the future. I ask Allah for Success, Saleh bin Manea Al-Khaliwi Chairman of ACDIMA Board of Directors 13

14 Table No. (1) ACDIMA Shareholdings in Projects as at 31/12/2015 Project Country Shareholding Percentage ACDIMA Share (Kuwaiti Dinar) a. Producing Companies Shamra Pharma Dental Anesthetic Company Gulf Pharmaceutical Industries JULPHAR Société Arabe Des Industries Pharmaceutiques SAIPH Saudi Pharmaceutical Industries and Medical Appliances Corporation SPIMACO ACDIMA for Veterinary Medicines Industry ACDIVET Arab Company for Antibiotics Industry ACAI Industrie Pharmaceutique Arabo (IPharma) Arab Company for Pharmaceutical Products ARABIO 9. Saudi Ajal 10. CAD Middle East Pharmaceutical Industries Syria % - Emirates % 19,817,425 Tunisia 68.1% 4,145,207 Saudi Arabia % 47,332,076 Syria 100% 1,013,423 Iraq % 5,516,164 Morocco 21% 1,555,795 Saudi Arabia Saudi Arabia Saudi Arabia % 1,851,502 20% 158,544 25% 2,476,500 b. Companies under Establishment Tassili Arab Pharmaceutical Company TAPHCO The Arab Company for Veterinary Medicine Production ACVMP Al-Arabiya for Medical Solutions and Medicines Algeria % 678,504 Sudan 40% 2,097,375 Libya 49% 952,699 Total 87,595,214 14

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17 Arab Company For Drug Industries And Medical Appliances (ACDIMA) Pan Arab Shareholding Company Amman The Hashemite Kingdom of Jordan Consolidated Financial Statements and Independent Auditors Report For The Year Ended December 31, 2015

18 Independent Auditor s Report Messes General Assembly Members Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Introduction We have audited the accompanying consolidated financial statements of Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan Arab Shareholding Company, which comprise the consolidated statement of financial position as at December 31, 2015, the Consolidated statement of comprehensive income, Consolidated statement of changes in shareholders equity and Consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management Responsibility of Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free form material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement in the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. 18

19 Basis for Qualified Opinion - The company did not recognize an impairment loss of its investment in subsidiary ACDIMA FOR VETERINARY MEDICINES INDUSTRY (ACDIVET) Ltd Whereas, the company s investment in it amounts to 1,013,423 as of December 31, We did not receive a confirmation for the following receivable balances as of December 31, 2015: The Arab Company for Antibiotics Industry - an associate company with the balance of 17,136 Kuwaiti dinars. Saudi Pharmaceutical Industries - an associate company with the balance of 102,848 Kuwaiti dinars. Gulf Pharmaceutical Industries with the balance of 127,211 Kuwaiti dinars. - The company has recognized its share in the results of some associates based on the draft of unaudited financial statements as described in detail in Note (7) to the Financial Statements investments in associated companies as of December 31, Other related parties receivable balances with an amount of 1,840,531 haven t been verified as of December 31, The financial statements have been consolidated based on the draft financial statements of the Arab Company for Pharmaceutical Industry - Saif, which as of December 31, 2015 were prepared in accordance with the Tunisian Accounting Standards, when they should have been prepared in accordance with International Standards for Financial Reporting for the purposes of consolidating them within the financial statements, accordingly we weren t able to determine any impact on the consolidated financial statements as if it had been prepared in accordance with International Standards for Financial Reporting. Qualified Opinion In our opinion, except for the effect of the matters explained in the basis of qualified opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan Arab Shareholding Company as at December 31, 2015, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Emphasis of matter We would like to draw attention to Note (2) to the Consolidated Financial Statements, where control over the financial and operating policies of the ARAB PARENTAL PHARMACEUTICAL INDUSTRIES COMPANY, was lost on 30 May Other matters We would like to note to the following: - The Company on 10 October 2013 held an extraordinary General Assembly meeting, and decided to raise the company s authorized capital to become 90 million Kuwaiti dinars, whereas the collection was intended as installments according to the need for cash flow to support the company s future projects, and the legal procedures were not completed to raise the company s capital until the financial statements date. - The financial statements for the year ended 31 December 2014 were audited by another auditor, who issued his unqualified opinion on 12 May PKF Jordan Khattab & Co. Mohammed Khattab (License No.730) Amman - The Hashemite Kingdom of Jordan 13 June

20 Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Consolidated Statement of financial position as at December 31, 2015 Exhibit A EQUITY AND LIABILITIES Notes 2015 Restated 2014 Assets Non-current assets (Restated Note 22) Property and equipment 5 8,701,985 2,144,975 Assets in the Arab Republic of Egypt Intangible assets 272,158 - Investment in associates 7 62,619,159 73,138,926 Investment in a financial asset at fair value through other comprehensive income 8 19,817,425 21,077,550 Loans to related parties 9 483, ,492 Total non-current assets 91,894,127 97,157,943 Current assets Inventory 10 2,735,816 39,410 Accounts receivable and other debit balances 11 3,051, ,787 Due from related parties 9 4,984,624 5,876,652 Investment in a financial asset at fair value through profit or loss , ,743 Cash and cash equivalents 13 3,539,555 2,273,106 Total current assets 14,494,583 9,396,698 Total assets 106,388, ,554,641 The accompanying notes from 1 to 23 constitute an integral part of these consolidated financial statements and are read with them 20

21 Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Consolidated Statement of financial position as at December 31, 2015 Exhibit A Notes (Restated Note 22) Owners Equity and Liabilities Owners equity Authorized capital 1 90,000,000 90,000,000 Paid capital 68,276,000 61,680,000 Statutory reserve 5,082,579 4,769,692 Shares premium 86,230 86,230 Accumulated change in fair value of investments in financial assets at fair value through other 12,297,150 13,557,275 comprehensive income Accumulated change in fair value of investments in financial assets at fair value through other 4,895,188 19,301,603 comprehensive income associates Unrealized re-measurement gains - Net 26,995 - Foreign currency translation differences ( 262,845) (284,028) Retained earnings 2,456,395 2,979,475 Total equity allocated to parent shareholders 92,857, ,517,000 Non-controlling interests 573, ,850 Total equity 93,431, ,016,097 Non- current liabilities Loan 4,551,800 2,184,000 Financial leases contract obligations- long term 37,635 - Total non-current liabilities 4,589,435 2,184,000 Current liabilities Loan current portion 14 3,764, ,000 Loan accrued portion 14 66,320 99,251 Accounts payable and other credit balances 15 4,537, ,293 Total current liabilities 8,367,917 1,354,544 Total liabilities 12,957,352 3,538,544 Total Owners equity and liabilities 106,388, ,554,641 The accompanying notes from 1 to 23 constitute an integral part of these consolidated financial statements and are read with them 21

22 Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Consolidated Statement of Comprehensive Income for the Year Ended December 31, 2015 Exhibit B Notes 2015 Restated 2014 (Restated Note 22) Net Sales 7,192,497 52,201 Cost of sales (6,314,440) ( 32,334) Gross profit 878,057 19,867 Other revenues, net 16 1,391, ,453 Revenue (expenses) Bio-availability center, net 133,865 73,565 Selling and distribution expenses ( 1,445) ( 8,779) Administrative expenses 17 ( 1,368,631) (2,189,064) Financing cost ( 1,005,370) ( 159,491) Impairment loss of investment in associates 7 ( 662,680) - Change in fair value of investments in financial assets at fair value through profit or loss Distributed dividends of investments in financial 21,710 57,176 assets at fair value through other comprehensive 1,101, ,844 income Shares of associates results 7 4,887,275 4,438,170 Profit before tax and remuneration 5,375,644 2,979,741 Foreign tax expense on distributed dividends ( 1,224,940) (1,138,414) Income tax ( 14,841) - Board of Directors remuneration ( 124,395) ( 119,000) Profit 4,011,468 1,722,327 Other comprehensive income Unrealized re-measurement gains - Net 26,995-22

23 Change in fair value of investments in financial assets at fair value through other comprehensive 8 ( 1,260,125) ( 345,609) income Change in fair value of investments in financial assets at fair value through other comprehensive income - associates 7 (14,406,415) (6,353,440) Foreign currency translation differences ( 22,599) ( 16,981) Total comprehensive income (11,650,676) (4,993,703) Profit allocated for: Shareholders of parent company 3,992,995 1,722,327 Non- controlling interests 18,473 - Total 4,011,468 1,722,327 Comprehensive income allocated for: Shareholders of parent company (11,669,149) (4,993,703) Non- controlling interests 18,473 - Total (11,650,676) (4,993,703) 23

24 Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Consolidated Statement of Changes in Owners Equity for the year ended December 31, 2015 Exhibit C Capital Statutory reserve Shares premium Accumulated change in fair value of investments in financial assets at fair value through other comprehensive income Accumulated change in fair value of investments in financial assets at fair value through other comprehensive income associates Unrealized re-measurement gains - Net Foreign currency translation differences Retained earnings Total before Non- controlling interests Non- controlling interests Total 2014 Balance as at 1 January ,000,000 4,769,692 86,230 13,902,884 25,655,043 - (267,047) 3,019, ,166, , ,092,303 Capital increase through retained earnings 1,680, (1,680,000) Comprehensive income for the year ( 345,609) ( 6,353,440) - ( 16,981) 1,722,327 (4,993,703) - (4,993,703) Dividends distributions ( 82,503) ( 82,503) - ( 82,503) Balance as at 31 December ,680,000 4,769,692 86,230 13,557,275 19,301,603 - (284,028) 2,979, ,090, , ,016, Balance as at 1 January ,680,000 4,769,692 86,230 13,557,275 19,301,603 - (284,028) 2,979, ,090, , ,016,097 Capital increase through retained earnings 1,700, (1,700,000) Capital increase payment 4,896, ,896,000-4,896,000 Comprehensive income for the year (1,260,125) (14,406,415) 26,995 21,183 3,992,995 (11,625,367) 18,473 (11,606,894) Impact of losing control of a subsidiary Settlements resulting of controlling an associated company ( 401,331) ( 401,331) (925,850) ( 1,327,181) - 88, ( 2,077,300) ( 1,988,957) 555,193 ( 1,433,764) Dividends distributions ( 112,900) ( 112,900) - ( 112,900) Statutory reserve - 224, ( 224,544) Balance as at 31 December ,276,000 5,082,579 86,230 12,297,150 4,895,188 26,995 (262,845) 2,456,395 92,857, ,666 93,431,358 The accompanying notes from 1 to 23 constitute an integral part of these consolidated financial statements and are read with them 24

25 Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Consolidated Statement of Cash Flows for the year ended December 31, 2015 Exhibit D Cash Flow From Operating Activities Operating Activities (Restated Note 22) Profit before tax and remuneration 5,375,644 2,979,741 Adjustments: Depreciation 661, ,152 Amortization 119,303 - Gains from sale of property and equipment ( 851) ( 4,615) Shares in associates results ( 4,887,275) (4,438,170) Allowance for doubtful debts - 3,642 Financing cost 1,005, ,491 Provision of recovery revenue ( 591,182) - Impairment loss in related parties 90,900 1,022,754 Impairment loss in intangible assets 106,112 - Impairment loss in investments in associates 662,680 - Working capital changes Investments in associates ( 3,329,663) ( 336,000) Dividends distributions 2,876,582 1,210,122 Investments in financial assets at fair value through other comprehensive income - (3,345,150) Inventory ( 2,696,406) 53,141 Bank facilities deposits - 1,434,721 Due from related parties 1,483,210 (1,663,220 ) Investments in financial assets at fair value through profit and loss 212, ,800 Accounts receivable and other debit balances ( 2,239,348) ( 100,575) Accounts payable and other credit balances 3,828,086 44,952 Board of Directors remuneration ( 124,395) ( 119,000) Paid income tax ( 1,239,781) ( 1,138,414) Net cash flows from (used in) operating activities 1,313,017 (3,870,628) Investing Activities Loans granted to associates 313, ,408 Proceeds from sale of property, plant and equipment 915 7,137 Additions of property and equipment (10,147,218) (303,984) Purchase of Intangible assets ( 1,479) Foreign currency translation differences - property, plant and equipment 418, ,631 Foreign currency translation differences intangible assets 17,178 - Net cash flows (used in) from investing activities (9,398,568 ) 138,192 The accompanying notes from 1 to 23 constitute an integral part of these consolidated financial statements and are read with them 25

26 Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Consolidated Statement of Cash Flows for the year ended December 31, 2015 Financing Activities Cash Flow From Operating Activities Exhibit D (Restated Note 22) Loan 5,553,087 2,669,760 Dividends distributions ( 112,900) ( 82,503) Paid capital 4,896,000 - Financing costs (1,005,370) - Net cash flows from financing activities 9,330,817 2,587,257 Foreign currency translation differences 21,183 ( 16,981) Net change in cash and cash equivalents 1,266,449 ( 1,162,160) Cash and cash equivalents at the beginning of the year 2,273,106 3,435,266 Cash and cash equivalents at the end of the year 3,539,555 2,273,106 The accompanying notes from 1 to 23 constitute an integral part of these consolidated financial statements and are read with them 26

27 Arab Company for Drug Industries and Medical Appliances (ACDIMA) Pan - Arab Shareholding Company Amman-The Hashemite Kingdom of Jordan Notes to the Consolidated financial statements 1. General Arab Company for Drug Industries and Medical Appliances (ACDIMA) was established as a Pan Arab Shareholding Company in Cairo on March 6, The Company s location was transferred to Amman and was registered at the Ministry of Industry and Trade in the record of Pan - Arab shareholding companies under the number (4) in Main objectives of the Company are making agreements with interested governments and other institutions to perform all kinds of works in the field of producing and marketing pharmaceutical raw materials, medical cosmetics, production supplies and medical equipment and supplies. The Company was granted a tax exemption according to the Prime Ministry s decision number issued on October 18, The financial statements need to be approved by the General Assembly of Shareholders. The company increased its capital on October 10, 2013 to become 90 million, this increase was approved by the General Assembly of Shareholders on the same date. However, the Company did not complete the legal procedures. 2. Basis of preparation - The consolidated financial statements of the Company were prepared in accordance with International Standards for the Preparation of Financial Reports issued by the International Accounting Standards Board. - The consolidated financial statements of the Company were prepared in accordance with the principle of historical cost. - The Kuwaiti dinar is the currency of the consolidated financial statements, which represents the functional currency of the Company. - On 30 May 2015 there was a loss of control over the financial and operating policies of the ARAB PARENTAL PHARMACEUTICAL INDUSTRIES COMPANY, whereas the Arab Company for Drug Industries and Medical Appliances (ACDIMA) became owner of 49% of the ARAB PARENTAL PHARMACEUTICAL INDUSTRIES COMPANY shares and therefore the Arab Company for Drug Industries and Medical Appliances (ACDIMA) lost the ability to control the decision-guidance and policy development in the Board of Directors. Therefore, the accounts of the ARAB PARENTAL PHARMACEUTICAL INDUSTRIES COMPANY weren t consolidated when preparing the consolidated financial statements for the year ended 31 December 2015, investment in the ARAB PARENTAL PHARMACEUTICAL INDUSTRIES COMPANY is included under investments in associates, and impact of the exclusion of the assets and liabilities of the ARAB PARENTAL PHARMACEUTICAL INDUSTRIES COMPANY was adjusted within the consolidated statement of changes in owners equity and included under the item of impact of losing control of a subsidiary. - Basis of Consolidation - The consolidated financial statements comprise the financial statements of the parent (Arab Company for Drug Industries and Medical Appliances (ACDIMA)) and the following subsidiaries which are controlled by the entity: 27

28 2015 Name of subsidiary Legal Status Ownership ACDIVET Syria Limited Liability Co. 100% Arab Company for Pharmaceutical Products Co. Tunis Hidden 68.1% 2014 Name of subsidiary Legal Status Ownership ACDIVET Syria Limited Liability Co. 100% Arab Parental & Pharmaceutical Industries Company - Libya Joint-Stock 55% 3. Changes in accounting policies and disclosures - The accounting policies adopted are consistent with those used in the previous year financial period except that the Company has adopted the following new and amended to IFRS s as of 1 January 2015: Accounting for Acquisitions of Interests in Joint Operations Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11) was issued in May IFRS 11 Joint Arrangements addresses the accounting for interests in joint ventures and joint operations. The amendments add new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such acquisitions. The amendments are required to be applied to acquisitions occurring from the start of the first annual period beginning on or after 1 January Earlier application is permitted. Clarification of Acceptable Methods of Depreciation and Amortisation Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38) was issued in May IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets both establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. This amendment clarifies that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. It also clarifies that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. This presumption, however, can be rebutted in certain limited circumstances. The amendments are required to be applied for annual periods beginning on or after 1 January Earlier application is permitted. Agriculture: Bearer Plants Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) was issued in June Before these amendments IAS 41 Agriculture required all biological assets related to agricultural activity to be 28

29 measured at fair value less costs to sell based on the principle that their biological transformation is best reflected by fair value measurement. However, there is a subset of biological assets, known as bearer plants, which are used solely to grow produce over several periods. At the end of their productive lives they are usually scrapped. Plants such as grape vines, rubber trees and oil palms will normally meet the definition of a bearer plant. Once a bearer plant is mature, apart from bearing produce, its biological transformation is no longer significant in generating future economic benefits. The only significant future economic benefits it generates come from the agricultural produce that it creates. The IASB decided that bearer plants should be accounted for in the same way as property, plant and equipment in IAS 16 property, plant and equipment, because their operation is similar to that of manufacturing. Consequently, the amendments include them within the scope of IAS 16, instead of IAS 41. The produce growing on bearer plants remains within the scope of IAS 41. The amendments are required to be applied for annual periods beginning on or after 1January Earlier application is permitted. Equity Method in Consolidated Financial Statements Equity Method in Separate Financial Statements (Amendments to IAS 27) was issued in August The amendments to IAS 27 Separate Financial Statements will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements. The amendments are required to be applied for annual periods beginning on or after 1 January 2016 retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Error. Earlier application is permitted. Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) was issued in September The amendments address the conflict between the requirements in IFRS 10 Consolidated Financial Statement and IAS 28 Investments in Associates and Joint Venture or associate (resulting in the loss of control of the subsidiary). The amendments are required to applied for annual periods beginning on or after 1 January Earlier application is permitted. Investment Entities: Applying the Consolidation Exception Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) was issued in December The amendments clarify which subsidiaries of an investment entity should be consolidated instead of being measured at fair value through profit or loss. The amendments also clarify that the exemption from presenting consolidated financial statements continues to apply to subsidiaries of an investment entity that are themselves parent entities. This is so even if that subsidiary is measured at fair value through profit or loss by the higher level investment entity parent. In addition, the amendments provide relief whereby a non-investment entity investor can, when applying the equity method, choose to retain the fair value through profit or loss measurement that is applied by its investment entity associates and joint ventures to their subsidiaries. The amendments are required to be applied for annual periods beginning on or after 1 January Earlier application is permitted. 29

30 Disclosure Initiative Disclosure Initiative (Amendments to IAS 1) was issued in December The amendments address concerns expressed about some of the existing presentation and disclosure requirements in IAS 1 Presentation of Financial Statements and ensure that entities are able to use judgment when applying those requirements. As a result, it introduces five, narrow-focus improvements to the disclosure requirements that relate to materiality, order of the notes, subtotals, accounting policies and disaggregation. The amendments also clarify the requirements in paragraph 82A of IAS for presenting an entity s share of items of other comprehensive income of associates and joint ventures accounted for using the equity method. These amendments are required to be applied for annual periods beginning on or after 1 January Earlier application is permitted. Annual Improvements Annual Improvement to IFRSs Cycle was issued in September The five amendments are related to four Standards. The amendments are required to be applied for annual periods beginning on or after 1 January Earlier application of each amendment is permitted. IFRS IFRS 5 Non-current Assets Held for Sale and Discontinued Operations IFRS 7 Financial Instruments: Disclosures IAS 19 Employee Benefits IAS 34 Interim Financial Reporting Subject of amendment Changes in methods of disposal. Servicing contracts. Applicability of the amendments to IFRS 7 to condensed interim financial statements. Discount rate: regional market issue. Disclosure of information elsewhere in the interim financial report. 4. Summary of significant accounting policies Financial instruments Financial instrument is any contract that gives rise to a financial asset of one entity and financial liability or equity instrument of another entity. Financial assets A financial asset is any asset that is: (a) Cash; or (b) An equity instrument of another entity; or (c) A contractual right to receive cash or another financial asset from another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity; or (d) A contract that may or will be settled in the entity s own equity instruments. Financial assets are initially measured at fair value in addition to, in the case of a financial asset not measured at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. 30