Al Rai Media Group Company K.S.C.P Independent Auditors' Report and I, Interim Condensed Consolidated Financial Information (Unaudited) 31 March 2014
Al Rihi Media Group Company K.S.C.P Contents Page Independent Auditors' Review Report Condensed Consolidated Statement of Financial Position (Unaudited) Condensed Consolidated Statement of Profit or Loss and other Comprehensive Income (Unaudited) Condensed Consolidated Statement of Changes in Equity (Unaudited) Condensed Consolidated Statement of Cash Flows (Unaudited) Notes to the Interim Condensed Consolidated Financial Information (Unaudited)
Deloitte. Deloitte & Touche At-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 Fax: + 965 22408855,22452080 A, - Crowe Hmth J I Horwath Al-Muhanna 81 Co. Cerlified Accounlanls Member Crowe Horwath lnternational PO. Box 26154, Safat 131 22 - +965 224 525 461718 +96522452549Fax www.croweho~lath.com.kw INDEPENDENT AUDITORS' REVIEW REPORT TO THE BOARD OF DIRECTORS OF AL RAI MEDIA GROUP COMPANY KSCP, KUWAIT Report on Review of Interim Condensed Consolidated Financial lnformation Introduction We have reviewed the accompanying interim condensed consolidated statement of financial position of Al Rai Media Group K.S.C.P ("the Parent Company") and its subsidiaries (together called "the Group") as of 31 March 2014 and the related condensed consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the three-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 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, or the Memorandum of Incorporation and Articles of Association of the Parent Company have occurred during the three month period ended 31 March 2014 that might have had a material effect on the business of the Group or on its financial position. 1 <al Y. Al-Muraini Licence No. 209A ;B Deloitte & Touche Al-Wazzan & Co. 27 April 2014
A1 ~ amedia i Croup Company K.S.C.P Condensed consolidated Statement of Financial Position as of 31 March 2014 (Unaudited) I ASSETS Nonturrent assets Property and equipment a I Intangible assets i Dinars 31 March 31 December 31 March 2014 2013 2013 Notes (Unaudited) (Audited) (Unaudited) Current assets Inventories Trade and other receivables Due from related parties Cash and cash equivalents I S9 Total assets EQUITY AND LIABILITIES Equity Share capital I Treasury shares P II Statutory reserve Voluntary reserve Retained earnings Non-current liabilities Bank loan, Post-employment benefits Current liabilities Due to related parties Bank loan Trade and other payables Total liabilities Total equity and liabilities n pages 6 to 10 form an integral part of this interim condensed consolidated financial Jassim Marzouk Boodai Chairman - Youssef Ahmed A1 Jalahmah Deputy Chairman & General Manager
Al Rai Media Croup Company K.S.C.P Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) For the period ended 31 March 2014 Note i ~inars Three months ended 31 March Revenues Revenues Other revenues Expenses Materials Cost of advertising Staff costs Advertisement and promotion Lease Depreciation and amortization Other expenses Finance cost Profit before statutory contributions 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. I
A1 Rai Media Croup Company K.S.C.P Condensed Consolidated Statement of Changes in Equity (Unaudited) For the period ended 31 March 2014 i Dinars Share Treasuiy Statutory Voluntary Retained Total capital shares reserve reserve earnings Balance as at 1 January 2014 Total comprehensive income for the period Dividends - 2013 Balance as at 31 March 2014 Balance as at 1 January 201 3 Total comprehensive income for the period Balance as at 31 March 2013 The accompanying notes on pages 6 to 10 form an integral part of this interim condensed consolidated financial information.
Al Rai Media Group Company K.S.C.P Condensed Consolidated Statement of Cash Flows (Unaudited) For the period ended 31 March 2014 Cash flows - operating activities Profit for the period Adjustments: Depreciation & amortization Finance cost i Dinars Three months ended 31 March 2014 2013 l nventories Trade and other receivables Due from related parties Post-employment benefits Due to related parties.trade and other payables Production of TV programs (Note 3) Net cash from operating activities Cash flows - investing activities Acquisition of property and equipment ~ ecash t 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 (decrease)/ increase in cash and cash equivalents Cash and cash equivalerits 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.
A1 R& Media Group Company K.S.C.P Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 31 March 2014 Constitution & activities Al Rai Media Group Company K.S.C.P ("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 2010. 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., (PPP), a company engaged in activities similar to that of the Parent Company. Al Rai Company for Strategic Studies - W.L.L, (RSS) engaged primarily in strategic and management consultancy activities. Al Rai International Company for Marketing and Advertising W.L.L., (RIMA) engaged in advertising and publicity. Al Rai Production W.L.L., engaged in production of visual and sound media. Al 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 27 April 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 consolidated financial information are consistent with those used in the preparation of annual consolidated financial statements for the year ended 31 December 201 3 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 financial 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 three months ended 31 March 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.
, Al ~ =i Media Croup Company K.S.C.P Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 31 March 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 "IAS 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. Intangible assets cost As at 31 December 2013 Additions As at 31 March 2014 Amortization As at 31 December 2013 Amortization for the period As at 31 March 2014 Net book value As at 31 December 2013 As at 31 March 2014 i Dinars Programs Goodwill Programs Total in progress cost As at 31 December 2012 Additionsltransfers As at 31 March 2013 Amortization As at 31 December 2012 Amortization for the period As at 31 March 2013 Net book value As at 31 March 2013
Al Rai Media Group Company K.S.C.P Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 31 March.2014 4. Trade and other receivables i Dinars 31 March 31 December 31 March 2014 2013 2013 (Unaudited) (Audited) (Unaudited) Trade receivables Less: Provisions Prepaid expenses Staff receivables Suppliers advance payments Others Cash and cash equivalents i Dinars 31 March 31 December 31 March 2014 2013 2013 (Unaudited) (Audited) (Unaudited) Cash and cheques on hand Current accounts with banks An amount of KD 531,514 in current accounts with banks is restricted for dividend payments to shareholders (31 December 201 3 and 31 March 201 3: 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 2013 and 31 March 2013: KD 23,303,860 comprising of 233,038,601 shares of 100 fils each) fully paid up in cash. Dividends - 20 1.3 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 (2012: Nil). Trade and other payables i Dinars 31 March 31 December 31 March 2014 2013 2013 (Unaudited) (Audited) (Unaudited) Trade payables Advances from customers Dividends payable Accrued expenses Zakat KFAS N LST Staff payables Others
Al Wai Media Group Company K.S.C.P Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 31 March 2014 8. Basic and diluted earnings per share.i Earnings per share are calculated by dividing profit attributable for the period by the weighted average number of shares outstanding during the period. Three months ended 31 March (Unaudited) 2014 201 3 Profit for the period - i Dinars Weighted average number of shares outstanding during the period Basic and diluted earnings per share (fils) 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: 31 March 2014 (Unaudited) Revenue Profit of reportable segments for the period i Dinars Print media Visual and Total audio media Total assets / 31 March 2013 (Unaudited) Revenue Profit of reportable segments for the period Total assets i Dinars Three months ended 31 March (Unaudited) Profit Total profit of reportable segments Finance cost Entity's profit
Al Rai Media Croup Company K.S.C.P Notes to the Interim Condensed Consolidated Financial Information (Unaudited) - 31 March 2014 10. Related party transactions The Group enters into transactions with related parties (directors, key managerial personnel ana companies of which they are principal owners) on terms and conditions approved by management. Related party balances and transactions during the period, other than those disclosed elsewhere in these interim consolidated financial information are given below: i Dinars Three months ended 31 March Transactions: Revenue Sales of programs Advertising income Expenses Cost of advertising and other operating expenses and materials Rent expense Key management compensation 11. Contingent liabilities i Dinars 31 March 31 December 31 March 2014 2013 2013 (Unaudited) (Audited) (Unaudited) Letters of guarantee 12. Seasonality The Group operates in an industry where the demand for its services is 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.