Interim condensed financial statements for the nine months ended (unaudited)
Interim condensed financial statements for the nine months ended Pages Report on review of interim condensed financial statements 1 Interim condensed statement of financial position 2 Interim condensed statement of income 3 Interim condensed statement of comprehensive income 4 Interim condensed statement of changes in equity 5 Interim condensed statement of cash flows 6 7-23
Interim condensed statement of income Three months ended Nine months ended Note (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating revenues 192,821,116 205,513,801 603,730,748 623,318,761 Cost of services (154,802,864) (173,017,840) (476,995,438) (510,536,507) Gross profit 38,018,252 32,495,961 126,735,310 112,782,254 General and administrative expenses (5,830,548) (5,882,702) (16,673,005) (18,187,188) Gain on disposal of available-for-sale investments 11,000,000-11,000,000 - Share of profit/(loss) from associates and joint venture 10 296,545 (54,393) 2,940,544 3,123,614 Investment and other income, net 7,261,119 1,722,984 12,850,374 10,075,313 Interest income 985,124 261,199 2,434,695 999,274 Finance costs (2,262,196) (2,281,715) (6,866,680) (7,568,800) Gain on fair value of derivative financial instruments - 148,950-681,154 Profit for the period 49,468,296 26,410,284 132,421,238 101,905,621 Basic and diluted earnings per share 8 0.09 0.05 0.23 0.18 The notes on pages 7 to 23 form an integral part of these interim condensed financial statements. (3)
Interim condensed statement of comprehensive income Three months ended Nine months ended (Unaudited) (Unaudited) (Unaudited) (Unaudited) Profit for the period 49,468,296 26,410,284 132,421,238 101,905,621 Other comprehensive income Net movement in fair value of available-for-sale investments - (7,806,726) - (6,099,005) Realised gain on available-forsale investments (10,646,538) - (10,646,538) - Total comprehensive income for the period 38,821,758 18,603,558 121,774,700 95,806,616 The notes on pages 7 to 23 form an integral part of these interim condensed financial statements. (4)
Interim condensed statement of changes in equity Share capital Statutory reserves General reserve Retained earnings Cumulative changes in fair values of availablefor- sale investments Total At 1 January 480,000,000 104,003,239 75,000,000 14,030,983 51,175,448 724,209,670 Profit for the period - - - 101,905,621-101,905,621 Other comprehensive income for the period - - - - (6,099,005) (6,099,005) Total comprehensive income for the period - - - 101,905,621 (6,099,005) 95,806,616 Bonus shares issued (Note 16) 60,000,000 - (60,000,000) - - - Dividends declared (Note 16) - - - (120,000,000) - (120,000,000) Directors remuneration (Note 17) - - - (11,885,333) - (11,885,333) At 540,000,000 104,003,239 15,000,000 (15,948,729) 45,076,443 688,130,953 At 1 January 540,000,000 120,555,665 15,000,000 31,117,481 10,646,538 717,319,684 Profit for the period - - - 132,421,238-132,421,238 Other comprehensive income for the period - - - - (10,646,538) (10,646,538) Total comprehensive income for the period - - - 132,421,238 (10,646,538) 121,774,700 Bonus shares issued (Note 16) 27,000,000 - - (27,000,000) - - Dividends declared (Note 16) - - - (81,000,000) - (81,000,000) Directors remuneration (Note 17) - - - (12,197,183) - (12,197,183) At 567,000,000 120,555,665 15,000,000 43,341,536-745,897,201 The notes on pages 7 to 23 form an integral part of these interim condensed financial statements. (5)
Interim condensed statement of cash flows Nine months ended Note (Unaudited) (Unaudited) Cash flows from operating activities Profit for the period 132,421,238 101,905,621 Adjustments for: Depreciation of property, plant and equipment 9 24,427,583 44,854,001 Share of profit from associates and joint venture 10 (2,940,544) (3,123,614) Provision for employees end of service benefits 6,995,142 7,714,904 Gain on disposal of property, plant and equipment (293,469) (424,549) Gain on disposal of available for sale investments 11 (11,000,000) - Gain on fair value of derivative financial instrument - (681,154) Interest income (2,434,695) (999,274) Dividend income (1,250,000) (3,195,642) Finance costs, net 6,866,680 7,568,800 Operating cash flow before changes in working capital 152,791,935 153,619,093 Changes in working capital: Inventories 381,121 (922,923) Trade and other receivables 56,418,764 (7,610,174) Trade and other payables 962,442 19,365,543 210,554,262 164,451,539 Employees end of service benefits paid (3,791,161) (4,742,891) Interest paid (6,198,906) (7,568,800) Net cash generated from operating activities 200,564,195 152,139,848 Cash flows from investing activities Proceeds from disposal of property, plant and equipment 363,074 716,293 Purchase of property, plant and equipment 9 (36,873,388) (10,502,353) Dividend received from joint venture 10 1,000,000 1,000,000 Interest received 2,434,695 999,274 Movement in term deposits with original maturity more than three months (180,801,430) (890,203) Dividend received 1,250,000 3,195,642 Proceeds from disposal of available for sale investments 11 13,750,000 - Net cash used in investing activities (198,877,049) (5,481,347) Cash flows from financing activities Net movement in term loans (4,474,449) (44,480,937) Director s remuneration 17 (12,197,183) (11,885,333) Dividends paid 16 (87,658,225) (120,000,000) Net cash used in financing activities (104,329,857) (176,366,270) Net decrease in cash and cash equivalents (102,642,711) (29,707,769) Cash and cash equivalents, at beginning of the period 163,485,026 105,485,372 Cash and cash equivalents, at end of the period 12 60,842,315 75,777,603 The notes on pages 7 to 23 form an integral part of these interim condensed financial statements. (6)
for the nine months ended 1 General information National Corporation for Tourism and Hotels (the Corporation ), a public shareholding company, was incorporated in Abu Dhabi, United Arab Emirates ( UAE ) on 11 December 1996 by Law No. (7) of 1996, to own, manage and invest in hotels and leisure complexes and to undertake other related business. The Corporation s shares are listed in Abu Dhabi Securities Exchange. The Corporation s registered address is P O Box 6942, Abu Dhabi, UAE. The Corporation owns four hotels within the UAE: (a) Abu Dhabi InterContinental Hotel, which is managed by an international hotel operating company; and (b) Danat Al Ain resort, Al Dhafra Beach Hotel and Danat Resort Jebel Dhanna directly operated by the Corporation. In addition, the Corporation provides catering services and has investments (other than available-for-sale or fair value through profit or loss) in the following entity: Name Country of operation Principal activity Interest National Transportation Company L.L.C ( the Joint venture ) United Arab Emirates Transport services 50% The Corporation operates five hotel properties and rest houses through management agreements along with three hotel properties through asset management agreements, all owned by other parties. The interim condensed financial statements for the period ended were authorised for issuance on 31 October. 2 Basis of preparation The interim condensed financial statements for the nine months ended have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting as issued by the International Accounting Standards Board ( IASB ) and applicable requirements of the UAE Commercial Companies Law of No (2) of. The interim condensed financial statements have been presented in United Arab Emirates Dirhams (), which is the functional currency of the Corporation. The interim condensed financial statements do not include all information and disclosures required in the annual financial statements and should be read in conjunction with the Corporation s annual financial statements for the year ended 31 December. In addition, results for the nine months ended are not necessarily indicative of the results that may be expected for the financial year ending 31 December. (7)
for the nine months ended (continued) 3 Accounting policies The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Corporation s annual financial statements for the year ended 31 December. Amendments to IFRSs effective for the financial year ending 31 December are not expected to have a material impact on the Corporation. 4 Estimates The preparation of interim financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim condensed financial information, the significant judgments made by management in applying the Corporation s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December except for useful lives of property, plant and equipment. Effective 1 January, the Corporation revised the useful lives of buildings, fixtures and fittings, mechanical, electrical and plumbing and motor vehicles to reflect more accurate estimates of these asset s useful lives. The changes in estimates have been applied prospectively. Had the above categories been depreciated on the basis of the original useful lives, the depreciation charge for the period ended would have been higher by 20.4 million. 5 Financial risk management and financial instruments 5.1 Financial risk factors The Corporation s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The interim condensed financial information do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Corporation s annual financial statements as at 31 December. There have been no changes in the risk management department since year end or in any risk management policies. (8)
for the nine months ended (continued) 5 Financial risk management and financial instruments (continued) 5.2 Liquidity risk Compared to year end, there was no material change in the contractual undiscounted cash out flows for financial liabilities. The main characteristics of the term loans provided to the Corporation are described in Note 13. 5.3 Fair value estimation The fair values of the financial assets and liabilities of the Corporation are not materially different from their carrying values at the reporting date except for Term Loan 2 which carries a fixed interest rate. Set out below is a comparison of carrying amount and fair value of the Term Loan 2: Carrying amount Fair value 31 December 31 December Financial assets Available-for-sale investments unquoted - 13,396,538-13,396,538 Financial liabilities Fixed rate loan 122,500,000 140,000,000 122,649,225 141,177,831 Floating rate loan 148,794,291 140,100,966 148,794,291 140,100,966 The management assessed that cash and short-term deposits, accounts receivables, accounts payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. (a) Fair value hierarchy The Corporation uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data (9)
for the nine months ended (continued) 5 Financial risk management and financial instruments (continued) 5.3 Fair value estimation (continued) (a) Fair value hierarchy (continued) The following table shows the analysis of financial instruments recorded at fair value by level of the fair value hierarchy at : Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Term loans Fixed rate loans - 122,649,225 - Floating rate loans - 148,794,291 - The following table shows the analysis of financial instruments recorded at fair value by level of the fair value hierarchy at 31 December : Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Available for sale investments Equity shares - - 13,396,538 Term loans Fixed rate loans - 141,177,831 - Floating rate loans - 140,100,966 - During the period, there were no transfers between or into Level 1, Level 2 and Level 3 fair value measurements. (b) Available for sale investment The fair values of the unquoted available-for-sale investments have been estimated using a net asset value model. (c) Term loan The Corporation received a fixed rate loan from Government of Abu Dhabi, which carries simple interest at 2% per annum. The fair value of the loan is calculated using present value calculations at market interest rates prevailing at statement of financial position date. (10)
for the nine months ended (continued) 5 Seasonality of operations The seasonal nature of the Corporation s activities only concerns the hotel division, from which revenue is mainly generated in the first and last quarters of the year. 6 Operating segments The primary segment reporting format is determined to be operating segments as the Corporation s risks and rates of return are affected predominantly by differences in the products and services produced. The operating segments are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic operating unit that offers different products and serves different markets. For management purposes, the Corporation is currently organised into four major operating segments. These segments are the basis on which the Corporation reports its primary segmental information. These are: - Hotels - Retail services - Catering services - Holding Segment performance is measured based on profit or loss. (11)
for the nine months ended 7 Operating segments (continued) The following tables present revenue and profit information for the Corporation s operating segments for the nine months ended and, respectively. Retail Catering Eliminating Nine months ended Hotels services services Holding entries Total (unaudited) Revenue 213,761,185 73,063,733 324,937,953 - (8,032,123) 603,730,748 Cost of services (155,105,475) (48,482,071) (292,113,382) - 18,705,490 (476,995,438) Gross profit 58,655,710 24,581,662 32,824,571-10,673,367 126,735,310 General and administrative expenses - - - (16,673,005) - (16,673,005) Investment and other income, net* - - - 23,523,741 (10,673,367) 12,850,374 Gain on disposal of available for sale investments - - - 11,000,000-11,000,000 Share of profit from associates and joint venture - - - 2,940,544-2,940,544 Interest income - - - 2,434,695-2,434,695 Finance costs, net - - - (6,866,680) - (6,866,680) Profit for the period 58,655,710 24,581,662 32,824,571 16,359,295-132,421,238 * Investment and other income include management fee income from Owned Hotels amounting to 6,791,326 and from managed hotels amounting to 5,280,378. (12)
for the nine months ended (continued) 7 Operating segments (continued) Retail Catering Eliminating Nine months ended Hotels services services Holding entries Total (unaudited) Revenue 226,144,607 67,627,173 337,797,902 - (8,250,921) 623,318,761 Cost of services (180,521,386) (45,973,012) (303,108,151) - 19,066,042 (510,536,507) Gross profit 45,623,221 21,654,161 34,689,751-10,815,121 112,782,254 General and administrative expenses - - - (18,187,188) - (18,187,188) Investment and other income, net* - - - 20,890,435 (10,815,121) 10,075,313 Gain on fair value of derivative financial instruments - - - 681,154-681,154 Share of profit from associates and joint venture - - - 3,123,613-3,123,614 Interest income - - - 999,274-999,274 Finance costs, net - - - (7,568,800) - (7,568,800) Profit/(loss) for the period 45,623,221 21,654,161 34,689,751 (61,512) - 101,905,621 *Investment and other income include management fee income from Owned Hotels amounting to 6,991,306 and from managed hotels amounting to 6,087,698. (13)
for the nine months ended (continued) 7 Operating segments (continued) The following table presents assets and liabilities information for the Corporation s operating segments as at and 31 December, respectively: Hotels Retail services Catering services Holding Eliminating entries Total At Total assets 383,418,635 23,603,143 173,319,262 775,088,468 (125,517,393) 1,229,912,115 Operating liabilities 44,821,403 13,207,801 104,314,558 116,067,457 (51,973,339) 226,437,880 At 31 December Total assets 394,167,984 24,138,520 166,906,440 763,756,083 (141,335,952) 1,207,633,075 Operating liabilities 47,788,171 13,503,719 84,540,407 151,776,194 (52,974,826) 244,633,665 (14)
for the nine months ended (continued) 8 Earnings per share Basic earnings per share amounts are calculated by dividing the profit for the period by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share are calculated by dividing the profit for the period by the weighted average number of ordinary shares outstanding during the period, adjusted for the effects of dilutive instruments. The following reflects the income and share data used in the earnings per share computations: Profit for the period 132,421,238 101,905,621 Weighted average number of ordinary shares outstanding during the period (as adjusted for the issue of bonus shares) 567,000,0000 567,000,0000 Basic and diluted earnings per share () 0.23 0.18 As at, the Corporation has not issued any instruments which would have a dilutive impact on earnings per share when converted or exercised. 9 Property, plant and equipment 31 December Property, plant and equipment at net carrying amount 728,388,386 716,012,186 Movement of the property, plant and equipment during the nine months ended is as follows: Opening net book amount at 1 January 716,012,186 756,513,041 Additions 36,873,388 10,502,353 Disposals (69,605) (291,744) Depreciation charge for the period (24,427,583) (44,854,001) Closing net book amount at 728,388,386 721,869,649 (15)
for the nine months ended (continued) 9 Property, plant and equipment (continued) The depreciation charge has been allocated in the interim condensed statement of income as follows: Cost of services 23,006,858 43,080,526 General and administrative expenses 1,420,725 1,773,475 24,427,583 44,854,001 During the nine months ended, the Corporation transferred 7.4 million (year ended 31 December : 1.9 million) from construction in progress to various property, plant and equipment categories. 10 Investment in associates and joint venture 31 December Investment in a joint venture 12,512,012 10,571,468 Movement of the investment in associates and joint venture for the nine months ended follows: Beginning of the period 10,571,468 90,262,566 Share of profit 2,940,544 3,123,614 Dividend income (1,000,000) (1,000,000) End of the period 12,512,012 92,386,180 (16)
for the nine months ended (continued) 10 Investment in associates and joint venture (continued) Details of share of profit in associates and joint venture as disclosed in the interim condensed statement of comprehensive income are as follows: Share of profit from associates - 1,770,913 Share of profit from joint venture 2,940,544 1,352,701 2,940,544 3,123,614 In December, the Corporation sold its shares of Pearl Azure Hotel Management and Pearl Azure Properties, for a consideration amounting to 69,187,951. The initial investment in these associates amounts to 33 million. Furthermore, the Corporation expects to receive during 4 million, which represents its share of the excess liquidity as defined in the agreement between the shareholders. Consequently, the Corporation recognised a loss in the statement of income amounting to 9,826,690. As at 31 December, the total estimated proceeds from the sale and its share of the excess liquidity is included under Other receivables. In January, the Corporation received the sales proceeds amounting to 69,187,951. 11 Available-for-sale investments 31 December Investments in unquoted investments - 13,396,538 Movement of the available-for-sale investments for the nine months ended is as follows: Beginning of the period 13,396,538 76,345,702 Net loss in fair value - (6,099,005) Disposal (13,396,538) - End of the period - 70,246,697 Investments in unquoted securities represent the Corporation s equity interest of 4.89 % (: 4.89%) in Sawaeed Employment L.L.C. During, an internal valuation was performed for this investment based on the net asset value method. This valuation resulted in a gain of 1.7 million that was recorded in the statement of other comprehensive income for the year ended 31 December. During the nine months ended, the Corporation sold the investments in unquoted securities which resulted in a gain of 11 million. (17)
for the nine months ended (continued) 12 Cash and cash equivalents 31 December Bank balances and cash 60,842,315 163,485,026 Term deposits 215,402,305 34,600,875 Cash and short term deposits 276,244,620 198,085,901 Term deposits represent deposits held with financial institutions in the UAE, and denominated in UAE dirhams and carry profit at the prevailing market rates ranging from 1.7% to 2% (: 2.5% to 2.75%) per annum. For the purpose of the interim condensed statement of cash flows, cash and cash equivalents are comprised of the following: Bank balances and cash 60,842,315 75,777,603 Term deposits 215,402,305 34,600,875 Cash and bank balances 276,244,620 110,378,478 Less: term deposits with original maturity of more than three months (215,402,305) (34,600,875) Cash and cash equivalents 60,842,315 75,777,603 13 Term loans 31 December Term loan 2 122,500,000 140,000,000 Term loan 4 6,691,073 3,815,962 Term loan 7 142,103,218 136,285,004 Total loans 271,294,291 280,100,966 Less: non-current portion (223,138,241) (214,444,914) Current portion 48,156,050 65,656,052 (18)
for the nine months ended (continued) 13 Term loans (continued) Term loan 1 During 2009, the Corporation obtained a loan from a local bank amounting to 370 million to finance its short-term obligations and is repayable in 24 quarterly instalments of 15.4 million commencing on 1 January 2010. The loan carries interest at the rate of 3.5% over 3-months EBOR. Applicable interest is paid on a quarterly basis. During March 2012, the Corporation rescheduled the loan with the bank for the balance to be repaid over 19 quarterly instalments starting end of March 2012 with 4 payments of 8.5 million, 4 payments of 9 million, 4 payments of 12 million, 4 payments of 14.5 million, 2 payments of 16.5 million and a final instalment on with the remaining balance of the loan. The term loan is secured by the following: (i) (ii) (iii) Mortgage over the land and building of Abu Dhabi Intercontinental Hotel. Assignment of insurance in relation to the above property for not less than 370 million. Assignment of revenues from Abu Dhabi Intercontinental Hotel. On 29 December, the Company paid the outstanding loan by refinancing from term loan 7 facility A. Term loan 2 In accordance with article 4 of law no. 7 of 1996, dated 11 December 1996, the Government of Abu Dhabi sold the three hotels namely Abu Dhabi Intercontinental Hotel, Danat Al Ain resort and Al Dhafra Beach Hotel to the Corporation for an amount of 350 million. The sale amount of 350 million has been granted as a long term loan by the Government of Abu Dhabi to the Corporation and is to be repaid over 20 years following a grace period of 5 years commencing from 11 December 1996 being the date of the loan agreement. The loan carries simple interest at 2% per annum to be charged after a grace period of 3 years. As at, one scheduled payments due in amounting to 17.5 million has not yet been settled. Term loan 3 During 2013, the Corporation obtained a loan from a local bank amounting to 35 million to finance its short-term obligations for a new project and repayable in 4 years through 15 equal quarterly instalments of 2.18 million originally commencing on 2013 and one last instalment (16th) covering the residual loan amount plus the remaining accrued interest. The facility is already drawn in full. Subsequently, the repayment schedule was amended so that the first instalment date was extended to 28 February. The loan carries interest at the rate of 4% over 3-months EBOR, subject to a minimum interest rate of 6.5% per annum. Interest is paid on a quarterly basis. (19)
for the nine months ended (continued) 13 Term loans (continued) Term loan 3 (continued) The loan facility is secured by the common security mentioned in the Term loan 1 plus the assignment of revenues up to 20 million from Danat Resort Hotel, Jebel Dhanna. On 29 December, the Company paid the outstanding loan by refinancing from term loan 7 facility A. Term loan 4 During 2013, the Corporation obtained a loan facility from a local bank amounting to 220 million. The loan will be utilized for the construction of a new hotel, Grand Marina. Total drawdown as at amounted to 6.7 million. Repayment of the loan is due after 36 months from first instalment for main civil works contractor payments. The loan carries interest at the rate of 4% over 3-months EBOR, subject to a minimum interest rate of 6.5% per annum. Interest is paid on a quarterly basis. The loan is to be repaid over 9 years by 36 quarterly instalments. Additional drawdown of 213.3 million is available for this loan as at. The loan facility is secured by the common security mentioned in the Term loan 1 and Term loan 3 plus the assignment of revenues up to 20 million from Danat Resort Hotel, Jebel Dhanna plus the assignment of entire revenue of the new hotel. Term loan 5 During 2014, the Corporation obtained a loan facility from a local bank amounting to 40.5 million. The loan will be utilized to meet the expenses of renovation, addition of 200 rooms, staff accommodation and others such as road construction, furniture and fittings at Danat Jebel Dhanna and Dhafra Beach Hotel. Total drawdown as at amounted to 0.2 million. Repayment of the loan is due after 18 months from the date of first utilization. The loan carries interest at the rate of 3.5% over 3-months EBOR, subject to a minimum interest rate of 6.5% per annum. Interest is to be paid on a quarterly basis. The loan is to be repaid over 6 and a half years by 12 equal semi-annual instalments of 3.115 million each, and the balance over the 13th instalment. The loan facility is secured by the common security mentioned in the Term loan 1 and Term loan 3, and Term loan 4, primary mortgage for 40.5 million on the plot, and the assignment of entire revenues from Danat Resort Hotel, Jebel Dhanna. On 29 December, the Company paid the outstanding loan by refinancing from term loan 7 facility B. (20)
for the nine months ended (continued) 13 Term loans (continued) Term loan 6 During 2014, the Corporation obtained a loan facility from a local bank amounting to 250 million for a new hotel to be constructed on its Plot in Saadiyat Island, Abu Dhabi. No drawdown has been made by the Corporation as at. Repayment of the loan is due after 3 years from initial drawdown. The loan is to be repaid in 12 years through 24 semi-annual instalments. The loan carries interest at the rate of 3.5% over 3-months EBOR, subject to a minimum interest rate of 6.5% per annum. Interest is to be paid on a quarterly basis. The loan facility is secured by the common security in Term Loan 1, and assignment of entire revenue of the new hotel, and all other related assignments. Term loan 7 During, the Corporation obtained a loan facility from a local bank amounting to 600 million which are split into two facilities of: (i) Facility - A 131.6 million which is utilized to repay the Term loan 1 and 3 and (ii) Facility B 468.4 million which will be utilized to repay Term Loan 5 and to meet future investment opportunities. Facility A was fully utilized as at 31 December. Facility B drawdown amounted to 25.4 million as at. Total drawdown for both facilities as at amounted to 156.9 million. Total outstanding loan balance for both facilities as at amounted to 150.3 million. Facility A carries interest at the rate of 3% over 3-months EBOR, subject to a minimum interest rate of 4.25% per annum. Facility B carries interest at the rate of 3.25% over 3-months EBOR, subject to a minimum interest rate of 4.5% per annum. The Facilities A and B are to be repaid in 10 years from the date of the Loan Facility Agreement through semi-annual instalments and one final payment on the final repayment date. Interest is to be paid on quarterly basis. The loan facility is secured by the following: i. Mortgage over the land plots and buildings of Abu Dhabi Intercontinental Hotel, Danat Resort Jebel Dhanna and Al Dhafra Beach Hotel ii. Assignment of insurances of Abu Dhabi Intercontinental Hotel, Danat Al Ain Resort, Danat Resort Jebel Dhanna and Al Dhafra Beach Hotel iii. Assignment of receivables from Abu Dhabi Intercontinental Hotel, Danat Al Ain Resort, Danat Resort Jebel Dhanna and Al Dhafra Beach Hotel iv. Account Pledge over bank accounts of the Corporation and its divisions, Abu Dhabi Intercontinental Hotel, Danat Al Ain Resort, Danat Resort Jebel Dhanna and Al Dhafra Beach Hotel. As at, the Company has an unamortised prepaid loan arrangement fee of 8.2 million related to the new facility and is netted off from the loan balance. (21)
for the nine months ended (continued) 14 Related party balances These represent transactions with related parties, i.e. associated companies, directors and key management personnel of the Corporation, and companies of which they are principal owners and entities controlled, jointly controlled or significantly influenced by such parties. Pricing policies and terms of these transactions are approved by the Corporation s management. Following is the total amount of transactions and related balances which have been entered into with related parties during the nine months ended : Rental income 243,741 359,700 Administration fee and other expenses 915,482 7,990,376 Balances due from/to related party included in the interim condensed statement of financial position are as follows: 31 December Due from a related party National Transport Company 64,791 35,000 Due to a related party National Transport Company 354,762 - (22)
for the nine months ended (continued) 15 Contingencies and commitments (a) Contingencies (i) Bank guarantees At, the Corporation had outstanding contingent liabilities in respect of letters of guarantee of 75.4 million (31 December : 83.7 million). (ii) Legal case The Corporation is a defendant in labour related legal proceedings which arose in the normal course of business. The Corporation does not expect that the outcome of such proceedings will have a material effect on the Corporation s operations, cash flows, or financial position. (b) Commitments At, the Corporation had estimated commitments for the Danat Resort Jebel Dhana chalets project, Dhafra Beach Hotel renovation, Grand Marina Hotel and the retention payable for the completed restaurants at Intercontinental Hotel of 41.4 million (31 December : 53.2 million). 16 Dividends and bonus shares During the period, cash dividends of 0.15 per share amounting to 81 million in respect of were proposed by the Board of Directors. These dividends were declared and approved in the Annual General Meeting (AGM) held on 22 March (: cash dividends of 0.25 per share amounting to 120 million were declared and approved by the shareholders in respect of 2014 on 26 April ). During the period, 27 million bonus shares were proposed by the Board of Directors. Issuance of these shares was approved in the AGM held on 22 March (: 60 million bonus shares were approved by the shareholders on 26 April ). 17 Board of directors remuneration For the year ended 31 December, the remuneration of the Board of Directors amounted to 12.2 million and was approved in the AGM held on 22 March (: remuneration of the Board of Directors for the year ended 31 December 2014 amounted to 11.9 million and was approved by the shareholders at the AGM on 26 April ). (23)