Interim Condensed Consolidated Financial Information (Unaudited) And Independent Auditors' Report Period from 1 January 2014 to 30 June 2014
Al Rai Media Group Company K.S.C.P Contents Page Independent Auditors' Review Report lnterim Condensed Consolidated Statement of Financial Position (Unaudited) lnterim Condensed Consolidated Statement of Profit or Loss and other Comprehensive Income (Unaudited) lnterim Condensed Consolidated Statement of Changes in Equity (Unaudited) lnterim Condensed Consolidated Statement of Cash Flows (Unaudited) Notes to the lnterim Consolidated Financial Information (Unaudited)
Deloitte & Touche Al-Wauan & Co. Ahmed Al-Jaber Street, Sharq Dar Al-Awadi Complex, Floors 7 & 9 P.O. Box 201 74 Safat 13062 or P.O. Box 23049 Safat 13091 Tel : + 965 22408844,22438060 Fa: + 965 22408855,22452080 Crowe Hmth. Horwath Al-Muhanna & Co. Certified Accounfants Member Crowe Holwath lnternational PO. Box 26154, Safat 131 22 - +965 224 525 46ff18 +965 224 525 49 Fax www.crowehowath,com.kw INDEPENDENT AUDITORS' REVIEW REPORT TO THE BOARD OF DIRECTORS OF AL RAI MEDIA GROUP COMPANY K.S.C.P, KUWAIT Report on Review of Interim Condensed Consolidated Financial lnformation Introduction We have reviewed the accompanying interim condensed consolidated statement of financial position of At Rai Media Group Company K.S.C.P, ("the Parent Company") and its subsidiaries (together called "the Group") as at 30 June 2014 and the related interim condensed consolidated statement of profit or loss and other comprehensive income for the threemonth and six-month periods then ended, and the related interim condensed consolidated statements of changes in equity and cash flows for the six-month period then ended. Management is responsible for the preparation and presentation of this interim condensed consolidated financial information in accordance with lnternational Accounting Standard 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim condensed consolidated financial information based on our review. Scope of Review We conducted our review in accordance with lnternational Standard on Review Engagements 2410, "Review of lnterim Financial lnformation Performed by the Independent Auditor of the Entity". A review of interim condensed consolidated financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with lnternational Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial information is not prepared, in all material respects, in accordance with lnternational Accounting Standard 34 - lnterim Financial Reporting. Report on Review of Other Legal and Regulatory Requirements Furthermore, based on our review, the accompanying interim condensed consolidated financial information is in agreement with the books of account of the Parent Company. We further report that to the best of our knowledge and belief, no violation of the Companies Law No. 25 of 2012, as amended, and its executive regulations, or the Memorandum of Incorporation and Articles of Association of the Parent Company have occurred during the six month period ended 30 June 2014 that might have had a material effect on the business of the Group or on its financial position. Licence No. 209A Deloitte & Touche Al-Wazzan & Co. I-Muhanna & Co. 6 August 201 4
Interim Condensed Consolidated Statement of Financial Position (Unaudited) As at 30 June 2014 I I ASSETS Non-current assets Property and equipment Intangible assets i Dinars 30 June 31 December 30 June 2014 2013 2013 Notes (Unaudited) (Audited) (Unaudited) Current assets Inventories ' Trade and other receivables Due from related parties Cash and cash equivalents Total assets EQUITY AND LIABILITIES Equity. Share capital Treasury shares Statutory reserve Voluntary reserve Retained earnings.nowcurrent liabilities Bank loan Post employment benefits Current liabilities Due to related parties Bank loan Trade and other payables Total liabilities Total equity and liabilities ages 6 to 10 form an integral part of this interim condensed consolidated financial
Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) For the period ended 30 June 2014 8 Revenues 3 Revenues i Dinars Three months ended Six months ended Note 30 June 30 June 2014 2013 2014 2013 Expenses Materials Cost of advertising Staff costs Advertisement and promotion Lease Depreciation and amortization Other expenses -. Provision for doubtful debts Operating profit Finance cost Profit before taxes Contribution to KFAS Contribution to Zakat Contribution' to National Labour Support Tax (NLST) Profit for the period Other comprehensive income for the period Total comprehensive income for the'period. > Earnings per share (fils) - Basic and diluted The accompanying notes on pages 6 to 10 form an integral part of this interim condensed consolidated financial information.
Interim Condensed Consolidated Statement of Changes in Equity (Unaudited) For the period ended 30 June 2014 i Dinars Share, Treasury Statutory Voluntary Retained Total capital shares reserve reserve earnings Balance as at 1 January 2014 Total comprehensive income for the period Dividends - 2013 (Note 6) Balance as at 30 June 2014 Balance as at 1 January 201 3 Total comprehensive income for the period Balance as at 30 June 2013 The accompanying notes on pages 6 to 10 form an integral part of this interim condensed consolidated financial information.
Interim Condensed Consolidated Statement of Cash Flows (Unaudited) For the period ended 30 June 2014 i Dinars Six months ended 30 June Cash flows - operating activities Profit for the period Adjustments: Depreciation & amortization Provision for doubtful debts Finance cost Inventories Trade and other receivables Due from/ to related parties Post employment benefits Trade and other payables Production of TV programs (note 3) Net cash from operating activities Cash flows - investing activities Acquisition of property and equipment - net Net cash used in investing activities Cash flows - financing activities Repayment of bank loan Finance cost paid Payment of dividend Net cash used in financing activities Net increase1 (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period (Note 5) The accompanying notes on pages 6 to 10 form an integral part of this interim condensed consolidated financial information.
Notes to the lnterim Condensed Consolidated Financial Information (Unaudited) - 30 June 2014 1. Incorporation & activities A1 Rai Media Group Company ("the Parent Company") is a i Public Shareholding Company incorporated by Amiri Decree in 2003 and it was registered in the commercial register in 28 June 2003 with registration number 94852. The Parent Company's shares were listed on the Stock Exchange on 26 October 201 0. The Parent Company's registered office is at P.O. Box 2292, Safat 13023. The objectives of the' Parent Company are printing, publication and distribution of daily newspapers; production and broadcasting of visual and sound media and investment of surplus funds in portfolios managed by portfolio managers. The Parent Company and the following wholly owned subsidiaries are collectively referred to as "the Group" in this interim condensed consolidated financial information. Publisher Printing Press Company - W.L.L., Company... A1 Rai Company for Strategic Studies - W.L.L., consultancy activities. A1 Rai lnternational Company for Marketing and Advertising - W.L.L., and publicity. engaged in activities similar to that of the.parent engaged primarily in strategic and management engaged in advertising. *-. A1 Rai Production Company - w.l.l., engaged in of visual and sound media. A1 Rai United Publications Company - W.L.L., engaged in printing, publication and distribution activities. ". This interim condensed consolidated financial information were approved and authorized for issue by the Parent Company's Board of Directors on 6 August 2014. Basis of preparation and significant accounting policies 2.1 Basis of preparation This interim condensed consolidated financial information has been prepared in compliance with lnternational.accounting Standard IAS 34, lnterim Financial Reporting. The accounting policies used in the preparation of this interim condensed consolidated financial information are consistent with those used in the preparation of annual consolidated financial statements for the year ended 31 December 2013 except for adoption of the new and amended IFRS that become effective from 1 January 2014 which are applicable to the Group. The Parent Company's shareholders approved the consolidated fhancial statements for the year ended 31 December 201 3 at the annual general assembly meeting held on 23 March 2014. This interim condensed consolidated financial information does not contain all information and disclosures required for complete consolidated financial statements prepared in accordance with lnternational Financial Reporting Standards. In the opinion of the management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended 30 June 2014 are not necessarily indicative of the results that may be.. expected for the year ending 31 December 2014. For further information refer to the consolidated financial statements and notes thereto included in the Parent Company's audited consolidated financial statements for the year ended 31 December 201 3.
Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 30 lune 2014 2.2 Significant accounting policies During the current period, the Group has adopted the following amended IFRS effective for the annual periods beginning on or after 1 January 2014 which did not have any significant impact on this interim condensed consolidated financial information. Amendments to "IAS 32 : Offsetting Financial Assets and Financial Liabilities" clarified the meaning of "currently has a legally enforceable right to set-off" and the criteria for non-simultaneous settlement mechanisms of clearing houses to qualify for offsetting. Amendments to "[AS 36 : Impairment of assets" changed certain disclosures about recoverable amount for other assets. Standards issued but not effective IFRS 9 Financial Instruments: The standard was issued in November 2009, however at the IASB meeting in November 201 3, the IASB tentatively decided to defer the mandatory effective date of IFRS 9 to be left open. However, IFRS 9 would still be available for early application. The standard improves the ability of the users of the financial statements to assess the amount, timing and uncertainty of future cash flows of the entity by replacing many financial instrument classification categories, measurement and associated impairment methods. The application of IFRS 9 will result in amendments and additional disclosures relating to financial instruments and associated risks. 3. lnt'angible assets Cost As at 1 January 201 4 Additions Transfer As at 30 June 201 4 Amortization As at 1 January 2014 Amortization for the period As at 30 June 2014 Net book value As at 1 January 2014 As at 30 June 201 4 i Dinars Programs Goodwill Programs Total in progress Cost As at 1 January 201 3 Additions... Transfers '. ' As at 30 June 201 3 Amortization As at 1 January 201 3 Amortization for the period As at 30 June 201 3 Net book value As at 30 June 201 3
Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 30 June 2014 Trade and other receivables i Dinars 30 June 31 December 30 June 2014 2013 2013 (Unaudited) (Audited) (Unaudited) Trade receivables Less: Provisions Prepaid expenses Staff receivables Suppliers advance payment Others 5. Cash and cash equivalents i Dinars 30 June 31 December 30 June 2014 2013 2013 (Unaudited) (Audited) (Unaudited) Cash and cheques on hand Current accounts with banks An amount of KD 42,663 in current accounts with banks is restricted for dividend payments to shareholders (31 December 2013 and 30 June 2013: Nil). Share capital The Parent Company's authorized, issued and paid up capital is KD 23,303,860 comprising of 233,038,601 shares of 100 fils each (31 December 201 3 and 30 June 201 3: KD 23,303,860 comprising of 233,038,601 shares of 100 fils each) fully paid up in cash. Dividends - 201 3 The Parent Company's shareholders approved distribution of cash dividends of 5 fils per share (KD 1,157,693) at the annual general assembly meeting (AGM) held on 23 March 2014 to all shareholders registered in the Parent Company's share register as at the date of the AGM (201 2 : Nil). Trade and other payables i Dinars 30 June 31 December 30 June 2014 2013 2013 (Unaudited) (Audited) (Unaudited) Trade payables Advances from customers Dividends payable Accrued expenses Zakat KF AS. NLST Staff payable Others
Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 30 June 2014 8. Basic and diluted earnings per share Earnings per share is calculated by dividing profit attributable for the period by the weighted average number of shares outstanding during the period. Three months ended Six months ended 30 June 30 June 2014 201 3 2014 201 3 Profit for the period - i Dinars 1,762,225 1/219,659 2,747,707 2,439,309 Weighted average number of shares outstanding during the period 231,538,600 231,538,600 231,538,600 231,538,600 Earnings per share (fils)- Basic and diluted 7.61 5.26 11.87 10.54 9.. Segment information The Group's operating segments are determined based on the reports reviewed by the executive function that are used for strategic decisions. These segments are strategic business units that offer different products and services. They are managed separately since the nature of the products and services, class of customers and marketing strategies of these segments are different. These operating segments meet the criteria for reportable segments and are as follows: a: Print media segment - printing, publication and distribution of an Arabic language daily newspaper in. b. Visual and audio media segment - Production of visual and audio media Management monitors the operating segments separately for the purpose of making decisions about resource allocation and performance assessment. The Group measures the performance of operating segments through measure of segment profit or loss net of taxes in management and reporting system. Segment assets principally comprise of all assets and segment liabilities comprise of all liabilities. The following table presents revenue, profit for the period and total assets information regarding the Group's reportable segments: Three months ended 30 June 2014 (Unaudited) Revenue Profit of reportable segments for the period i Dinars Print media Visual and Total audio media Three months ended 30 June 2013 (Unaudited) Revenue Profit of reportable segments for the period Six months ended 30 June 2014 (Unaudited) Revenue Profit of reportable segments for the period Total assets Six months ended 30 June 2013 (Unaudited) Revenue Profit of reportable segments for the period Total assets
Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 30 June 2014 Profit Total profit of reportable segments Finance cost Entity's profit i Dinars Six months ended 30 June 2014 2013 10. Related party transactions The Group enters into transactions with related parties (directors, key managerial personnel and companies of which they are principal owners) on terms and conditions approved by management. Related party transactions during the period, other than disclosed elsewhere in these interim condensed consolidated financial statements are given below: Transactions: Revenue Sale of programs Advertising income i Dinars Three months ended Six months ended 30 June 30 June (Unaudited) (Unaudited) Expenses Cost of advertising, other operating expenses and Materials Rent expense Key management compensation 11. Contingent liabilities Letters of guarantees i Dinars 30 June 31 December 30 June 2014 2013 2013 (unaudited) (Audited) (Unaudited) 243,005 235,834 236,274 12. Seasonality The Group operates in an industry where the demand for its services are higher in certain months of the year due to summer holidays and festival season. Accordingly, the Group's revenue and related costs may vary from quarter to quarter. 13. Comparative.information Certain comparative amounts for the previous period have been reclassified to be consistent with the presentation for the current period. Such classifications did not affect previously reported results, total assets or equity.