ORIENTAL WEAVERS COMPANY FOR CARPETS
(An Egyptian Joint Stock Company)
Consolidated Financial Statements
For the Company and its Subsidiaries
For The Financial Period ended March 31, 2010
& Limited Review Report
Hassan Mahmoud EL Hashash & Co. Wahid Abdel Ghaffar&Co.
Public Accountants& Consultants Public Accountants& Consultants
Wahid Abdel Ghaffar & Co. Hassan Mahmoud EL Hashash & Co.
Public Accountants& Consultants Public Accountants& Consultants
17 Mahmoud Hassan
off El - Orouba St. Cairo
110 A 26 of July St.
Zamalek - Cairo
icTranslation from Arab
eview ReportLimited R
To The Members of Boards of Directors Of
ORIENTAL WEAVERS COMPANY FOR CARPETS
Introductory
We have reviewed the accompanying cosolidated financial position of Oriental Weavers Company for
Carpets “S.A.E” at March 31, 2010, and the cosolidated income statement, cosolidated statement of
changes in equity and cosolidated cash flow statement for the three months then ended, and a summary of
significant accounting policies and other explanatory notes. These cosolidated financial statements are
the responsibility of the Company’s management. Our responsibility is to issue a report on these cosolidated
financial statements based on our review. We did not review the financial statements of Oriental Weavers
Company-United States of America and China (owned subsidiaries).These statements reflect total assets and
revenues constituting 8.67 % and 10.65 % respectively of the related consolidated totals.Those statements
were reviewed by other auditors.
Scope of limited review
We conducted our review in accordance with the Egyptian Standard on Review Engagements 2410. This
Standard requires that we plan and perform the review to obtain moderate assurance as to whether the
cosolidated financial statements are free of material misstatement. A review is limited primarily to inquiries
of company personnel and analytical procedures applied to financial data and thus provides less assurance
than an audit. We have not performed an audit and, 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
cosolidated interim financial statements do not give a true and fair view for the cosolidated financial position
of the Company as of March 31, 2010, and of its financial performance and its cash flows for the three
months then ended in accordance with Egyptian Accounting Standards.
Cairo: May 12, 2010
Hassan Mahmoud EL Hashash Wahid Abdel Ghaffar
Hassan Mahmoud EL Hashash & Co. B.T. Wahid Abdel Ghaffar&Co.
Public Accountants & Consultants Public Accountants& Consultants
Note 31/3/2010 31/12/2009
No. LE LE
Long Term Assets
Fixed assets(net) (5) 1,589,356,329 1,608,600,860
Projects in progress (6) 227,808,149 232,255,334
Goodwill (7) 696,835,970 696,835,970
Available for sale investments (8) 70,531,751 70,531,751
Total Long-term assets 2,584,532,199 2,608,223,915
Current Assets
Inventory (9) 1,450,645,233 1,430,172,744
Trades & notes receivable 694,728,372 707,562,287
Debitors and other debit accounts (10) 127,637,567 103,787,588
Cash & Cash equivalent (11) 436,699,736 337,299,473
Total current assets 2,709,710,908 2,578,822,092
Current Liabilities
Provisions (12) 66,962,650 67,565,778
Banks-Credit accounts (13) 910,350,583 858,108,925
Long term liabilities-Current portions (22) 235,922,144 211,153,426
Suppliers & notes payable 570,030,176 607,941,243
Dividends payable 255,878,132 3,339,249
Creditors & other credit accounts (14) 174,791,505 146,025,608
Total Current liabilities 2,213,935,190 1,894,134,229
Working Capital 495,775,718 684,687,863
3,080,307,917 3,292,911,778
Shareholder's equity
Issued and paid up capital (15) 373,033,555 373,033,555
Reserves (16) 1,421,922,826 1,411,865,946
451,625 451,625
Retained earnings 519,199,676 456,319,589
Net profit for the period / year 91,799,749 312,330,120
69,330,726 64,551,105
Treasury stocks (25) (22,251,326) (22,251,326)
2,453,486,831 2,596,300,614
Minority interest (17) 199,601,642 215,883,957
Total equity 2,653,088,473 2,812,184,571
Long-term liabilities
Long term loans (18) 421,505,668 471,586,700
Deferred sales taxes installments (19) 717,591 868,626
Housing and Development Bank loan (20) 730,095 806,235
Creditors-Purchase of fixed assets (21) 3,726,816 6,618,447
Deferred tax liabilities (23) 539,274 847,199
Total long term liabilities 427,219,444 480,727,207
Total shareholder's equity & long term liabilities 3,080,307,917 3,292,911,778
Limited Reveiw Report attached.
Chairman & CEO
Salah Abdel Aziz Abdel Moteleb
The accompanying notes from No.(1) to No.(29) form an integral part of these consolidated financial statements.
Total equity attributable to equity holders of the parent
Translation from arabic
Oriental Weavers Company for Carpets
(An Egyptian Joint Stock Company)
As of March 31,2010
Consolidated Financial Position for the company and it's subsidiaries
Accumulated gain from available for sales investment
Exchange differences arising on translation of financial statements
Total Investment to be Financed as follows:
Finance Manager
Mohamed Kattary Abdallah
-2 -
Note 31/3/2010 31/3/2009
No. LE LE
Net sales 915,162,724 887,373,911
Less:
Cost of sales 786,015,118 761,221,884
Gross profit 129,147,606 126,152,027
Less:
Distribution expenses 7,089,635 6,024,526
General & Administrative expenses 18,224,935 15,557,194
Formated provisions & Impairment 920,961 --
26,235,531 21,581,720
Net income from operation activities 102,912,075 104,570,307
Add / (Less):
Investment income
Interest Income 4,211,911 3,165,665
Other revenues 16,938,576 31,572,605
Capital Gain 16,490 --
Financing expenses (21,468,246) ( 22 134 398)
Foreign exchange differences 5,240,991 (1,492,057)
4,939,722 11,111,815
Net profit for the period before income tax 107,851,797 115,682,122
(Less):
Current income tax (11,017,641) ( 9 193 618)
Deferred tax 247,552 1 044 077
Income tax for the period (10,770,089) (8,149,541)
Net profit for the period after income tax 97,081,708 107,532,581
Attributable to:
Equity holders of the parent 91,799,749 96 725 991
Minority interest 5,281,959 10 806 590
97,081,708 107,532,581
Basic Earning per Share for the period (24) 1.25 1.30
For the financial period ended March 31,2010
Translation from arabic
Oriental Weavers Company for Carpets
(An Egyptian Joint Stock Company)
Consolidated Income statement for the company and it's subsidiaries
The accompanying notes from No.(1) to No.(29) form an integral part of these consolidated financial statements.
-3-
Accumulated
Issued and Legal General Special Capital Available for Retained Net Differences Treasury
Paid up capital reserve reserve reserve reserve sale Investments earning profit of translation stocks Total
LE LE LE LE LE LE LE LE LE LE LE
373,033,555 987,056,023 353,803,562 59,973,828 408,872 (6,282,832) 495,066,279 311,126,390 69,913,763 (1,295,095) 2,642,804,345
-- 9,936,593 -- -- -- -- (9,936,593) -- -- --
Dividends for the year 2008-- -- -- -- -- -- (12,528,761) (301,189,797) -- -- (313,718,558)
Adjustments related to consolidated statements-- -- -- -- -- -- (4,244,138) -- -- -- (4,244,138)
-- -- -- -- -- 2,127,494 -- -- -- -- 2,127,494
Change in translation differences-- -- -- -- -- -- -- -- 31,365,337 -- 31,365,337
-- -- -- -- -- -- -- 96,725,991 -- -- 96,725,991
373,033,555 996,992,616 353,803,562 59,973,828 408,872 (4,155,338) 478,293,380 96,725,991 101,279,100 (1,295,095) 2,455,060,471
373,033,555 997,679,684 353,803,562 59,973,828 408,872 451,625 456,319,589 312,330,120 64,551,105 (22,251,326) 2,596,300,614
-- 10,056,880 -- -- -- -- -- (10,056,880) -- -- --
Dividends for the year 2009-- -- -- -- -- -- -- (238,620,133) -- -- (238,620,133)
Transferred to retained earning-- -- -- -- -- -- 63,653,107 (63,653,107) -- -- --
Adjustments related to consolidated statements-- -- -- -- -- -- (773,020) -- -- -- (773,020)
Change in translation differences-- -- -- -- -- -- -- -- 4,779,621 -- 4,779,621
-- -- -- -- -- -- -- 91,799,749 -- -- 91,799,749
373,033,555 1,007,736,564 353,803,562 59,973,828 408,872 451,625 519,199,676 91,799,749 69,330,726 (22,251,326) 2,453,486,831
Net profit for the period
The accompanying notes from No.(1) to No.(29) form an integral part of these consolidated financial statements.
Transferred to reserves
Transferred to reserves
Unrealized (losses) from available for sale Investments
Balance at 31/3/2010
Balance at 31/3/2009
Net profit for the period
Balance at 1/1/2010
unrealized (loss)
gain from
Balance at 1/1/2009
Translation from arabic
For the financial period ended March 31,2010
Consolidated statement of changes in Shareholder's Equity for the Company and It's Subsidiaries
(An Egyptian Joint Stock Company)
Oriental Weavers Company for Carpets
-4-
Note 31/3/2010 31/3/2009
No. LE LE
Cash flows from operating activities
Net profit for the period before income tax 107,851,797 115,682,122
Adjustments to reconcile net profit to net cash provided by operating activities
Fixed assets depreciation 50,230,922 70,569,158
Formated provisions & Impairment 920,961 --
Financing expenses 21,468,246 22,134,398
Capital Gain (16,490) --
Operating profits before changes in working capital 180,455,436 208,385,678
Change in working capital
(Increase) Decrease in inventory (20,472,489) 34,905,341
(Increase) in trades & notes receivable and debit accounts (15,077,957) (29,411,622)
(Decrease) in suppliers & notes payable and other crebit accounts (25,831,272) (134,684,593)
Cash flows provided by operating activities 119,073,718 79,194,804
Financing expenses paid (21,468,246) (21,647,510)
Net cash flows provided by operating activities 97,605,472 57,547,294
Cash flows from investing activities
(Payments) for purchase of fixed assets and projects in progress (26,539,207) (112,596,159)
Net cash flows (used in) investing activities (26,539,207) (112,596,159)
Cash flows from financing activities
Proceeds from banks-credit accounts 52,237,258 122,266,645
Dividends paid (317,084) (760,558)
(Payment) for long term liabilities (28,431,121) (3,498,413)
Net cash flows provided by financing activities 23,489,053 118,007,674
Net change in cash and cash equivalents during the period 94,555,318 62,958,809
Cash and cash equivalents at beginning of the period 336,819,118 191,275,423
Exchange differences arising on translation of financial statements 4,840,545 30,773,808
Cash and cash equivalents at end of the period (11) 436,214,981 285,008,040
The accompanying notes from No.(1) to No.(29) form an integral part of these consolidated financial statements.
For the financial period ended March 31,2010
Translation from arabic
Oriental Weavers Company for Carpets
(An Egyptian Joint Stock Company)
Consolidated Cash flow statement for the company and it's subsidiaries
-5-
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the financial period ended March 31, 2010 Translation from Arabic
- - 6
Oriental Weavers Company for Carpets
( An Egyptian Joint Stock Company )
Notes to the Consolidated Financial Statements for the Company and Its Subsidiaries
For the Financial Period ended March 31, 2010
1- BACK GROUND INFORMATION
- Oriental Weavers Company for Carpets was established in November 16, 1981 as a Limited
Liability Company according to Law No. 43 of 1974 which was replaced by Law No.32 of
1977. On November 2, 1991 the Legal status of the company was changed to be an
Egyptian Joint Stock Company (S.A.E) under Law No. 230 of 1989 and Law No. 95 of
1992.
- Company’s objective Producing, selling and exporting ready – made carpets and importing related production
supplies, equipment, machinery, or materials.
2- BASIS OF PREPARATION OF FINANCIAL STATEMENTS
- The financial statements have been prepared in accordance with Egyptian Accounting
Standards and in the light of Egyptian laws and regulations.
- The preparation of financial statements requires making limited accounting estimates in
addition to that the management makes another accounting estimates about choosing and
implementing the company's accounting policies. The note no. (4) from the notes of the
financial statements indicates the items and the elements that have significant accounting
estimates.
3- SCOPE OF CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements include companies in which Oriental Weavers Company
for Carpets participates at a percentage greater than 50% of their capitals and has control
thereon.
Subsidiaries included in the consolidated financial statements are as follows:-
Percentage of
participations
2010
% Subsidiary name
100.00 Oriental Weavers Co. U.S.A.
99.99 Oriental Weavers International Co.
99.51 Oriental Weavers Company Fibers Co.
53.08 MAC Carpet Mills
79.60 Egyptian Fibers Co.(EFCO)
99.51 Oriental Weavers Co.- China
52.02 New Mac
57.57 Modern EFCO
∗ Based on the ordinary general assembly held on March 21, 2010 it was approved to
acquire a 99.014% of Rosetex Modern Factories for Spinning & Weaving company's
shares and necessary procedures are currently taken for the acquisition of these shares.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the financial period ended March 31, 2010 Translation from Arabic
- - 7
4 – SIGNIFICANT ACCOUNTING POLICIES
4-1 Basis of consolidation
- Consolidated current financial position are prepared by combining similar
items of assets, liabilities, equity, revenues and expenses stated in the
financial statements of the holding company and its subsidiaries.
- The carrying amount of the holding company's investment in each subsidiary
and the holding company's portion in the equity of each subsidiary are
eliminated.
- All inter-company balances, transactions, and material unrealized gains are
eliminated.
- Minority interest in the net equity and net profits of subsidiaries controlled by
the holding company are included in a separate line item under the
shareholders equity in the consolidated financial position “minority interest”
and it represents the minority share in the net assets of the subsidiaries.
4-2 Foreign currency Translation
The company and some of its subsidiaries maintain their books of accounts in
Egyptian Pound. Transactions denominated in foreign currencies are recorded
at the prevailing exchange rates at the date of the transaction. At consolidated
financial position date monetary assets and liabilities denominated in foreign
currencies are revaluated at the exchange rates declared by the company's
bank and its subsidiaries' bank at that date. The exchange differences are
recorded in the consolidated income statement for the period.
4-3 Translation of Financial Statements presented in Foreign Currency
Some of the subsidiaries maintain their books of accounts in foreign currency.
Monetary assets and liabilities of these companies are translated into Egyptian
Pound at the Foreign exchange rate at the date of consolidated financial
position. Shareholders' equity items are translated at the foreign exchange rate
prevailing at the consolidation date. Consolidated income statement items are
translated at the average foreign exchange rate of the reporting Period. The
holding company's portion in accumulated differences arising from
retranslation of foreign entities is presented as a separate item in shareholders'
equity in the consolidated financial position.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the financial period ended March 31, 2010 Translation from Arabic
- - 8
4-4 Difference in accounting policies
Some of accounting standards used for the preparation of the financial
statement of Oriental Weavers U.S.A Inc. in which accord with Generally
Accepted Accounting Principles were not applied in preparing the
consolidated financial statements of Oriental Weavers for Carpets which were
prepared in accordance with the Egyptian Accounting Standards and the
Egyptian laws and regulations. Although the necessary adjustments to the
financial statements of the subsidiaries were made for the unification of the
implementation of accounting policies were not adjusted due to differences
between Generally Accepted Accounting Principles and Egyptian Accounting
Standards as follows:-
Capital Lease
Oriental Weavers Co. U.S.A applies U.S Generally Accepted Accounting
Principles in the treatment of the capital lease transaction occurring at the date
of the consolidated financial position.
Pensions
Oriental Weavers Co. U.S.A treats pension scheme in accordance with U.S
Generally Accepted Accounting Principles. The resulting liabilities are shown
in consolidated financial position as creditors and other credit accounts.
4-5 Fixed Assets and Depreciation
Fixed assets are stated in the consolidated financial position at cost after
deduction of the related accumulated depreciation and impairment losses and
are depreciated using the straight – line method over their estimated useful
lives for each asset as follows:
Eُstimated useful life Description
25-50 Buildings & Constructions
10 Machinery & Equipments
5-8 Vehicles
5 Tools & Supplies
3 Show-room Fixture
5-10 Furniture & office equipment
3-5 Computers & programs
4-6 Projects in Progress
Costs relating to purchase and construction of fixed assets are initially
recorded as project in progress. When the asset is completed and becomes
ready for the intended use, then, they are transferred to fixed assets.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the financial period ended March 31, 2010 Translation from Arabic
- - 9
4-7 Valuation of Available for sale Investment
Available for sale investments are valued at fair market value on an
investment by investment basis with gains and losses being recognized as part
of the equity under unrealized gains (losses) from Available for sale
investments.
In the event of impairment the value of the investment is reduced by the
impairment value which is offset against the unrealized gains recorded in the
equity with excess losses being charged to the income statement.
The fair value of the available for sale investments which are not listed in the
Securities Exchange Market and for which there are no possible methods for
reliably determining its value, can be determined by cost less the value of
impairment (if any) and recognizing the losses in the income statement.
If in a subsequent period to the impairment the fair value of the investment
increases the increase will be recognized in the income statement to the extent
of the impairment losses which have been previously recognized and any
excess recognizes in the equity, except in the case of equity securities for
which the losses cannot be reversed unless sold or disposed of.
4-8 Goodwill
Goodwill represents in the increase in the acquisition cost of some shares of
the subsidiary companies through swap of shares, and the company's interest
in the fair value of the acquired net assets of these subsidiaries on the
acquisition date.
Goodwill acquired shall not be amortized. Instead of that the company shall
test it for impairment annually or periodically if events or changes in
circumstances indicate that it might be impaired, and in case there is
impairment such impairment shall recognize in the income statement for the
period.
4-9 Inventory
Inventory is valued at the end of the Period at which is lower of cost or net
realizable value according to the following basis:
- Raw materials, Spare parts, packaging materials, are determined using the
moving average method.
- Cost of work in process is determined at industrial cost which include
materials used in its production and direct wages in addition to its related
direct and indirect industrial expenses up to the production stage that have
been reached.
- Cost of finished products at which is lower of cost or net realizable value
includes all the direct and indirect industrial expenses.
4-10 Debtors & other debit accounts
Debtors & other debit accounts are stated at nominal value less impairment
loss of any amounts expected to be uncollected, and are classified as current
assets. Amounts that are expected to be collected after more than one period
are classified as long term assets.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the financial period ended March 31, 2010 Translation from Arabic
- - 10
4-11 Provisions
Provisions are recognized when the company has a legal or constructive
obligation as a result of a past event, and it is probable that an out flow of
economic benefits will be required to settle the obligation, and the obligation
can be reasonably estimated, and if there is a significant effect of the
monetary time value, the provisions are determined after deduction of future
cash flow that are related to the obligation of payment by using the relevant
deduction rate to take this effect into consideration. Provisions are reviewed
at the financial position date and amended when necessary to reflect the best
current estimate.
4-12 Borrowing Cost
Borrowing cost is charged as expense to the consolidated income statement
for the period when incurred by the company or its subsidiaries. Borrowing
costs that are directly attributable to the acquisition, construction or
production of qualifying asset should be capitalized as part of the cost of that
asset.
4-13 Income tax
Income tax on the profit for the period comprises current and deferred tax.
Income tax is recognized in the income statement except for the extent that it
relates to items recognized directly in equity, in which case it is recognized in
equity.
Current tax is the expected tax payable on taxable income for the Period,
using tax rates enacted or substantially enacted at the consolidated financial
position date, and any adjustment to tax payable in respect of previous period.
Deferred tax is recognized for temporary differences between the carrying
amounts of assets and liabilities for financial purposes and the amount used
for taxation purposes. The amount of deferred tax provided is based on the
expected manner of realization or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the
consolidated financial position date.
A deferred tax asset is recognized only to the extent that it is probable that
future taxable profits will be available against extent that it is no longer
probable that the related tax benefit will realize.
4-14 Revenue Recognition
- Revenue from sales is recognized when goods- related rewards and risks
are transferred to the buyer upon the delivery of the products and
invoicing.
- Interest income is recognized in the income statement using the effective
interest method. The effective interest method is used for discounting the
expected future cash flows and allocating the related interest income over
the maturity period. The effective interest is calculated taking in
consideration the contractual arrangements.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the financial period ended March 31, 2010 Translation from Arabic
- - 11
- Income from available for sale investment is recognized when the cash
distribution declared by the investee company.
- The gains or losses resulted from selling investment are recognized when
the transaction is completed which is represented in the date of benefits and
risk transfer to the buyer.
4-15 Legal reserve
According to the company’s statutes the Company is required to set aside 5%
of the annual net profit to form a legal reserve. The transfer to legal reserve
ceases once the reserve reach 50% of the issued share capital. If the reserve
falls below the defined level (50% of the issued share capital), then the
Company is required to resume setting aside 5% of the annual net profit until
it reaches 50% of the issued share capital.
4-16 Treasury Shares
Treasury Shares are stated at cost, and shall be deducted from equity. No gain
or loss shall be recognized in profit or loss on the purchase, sale, issue or
cancellation of an entity’s own equity instruments. Consideration paid or
received shall be recognized directly in equity.
4-17 Impairment of financial assets other than investment
- The carrying amounts of the company’s financial assets other than
investments are reviewed at each financial position date to determine
whether there is any indication of impairment. If such indication exists,
these losses are estimated on the basis of the increase of carrying amount
of the asset than the present value for the expected future cash flows or net
realizable value of these assets which ever is greater. Impairment losses are
charged to the income statement, and in case of the increase of the value it
will be charged to the income statement to the limit of that charged to the
income statement during the previous year.
- An impairment loss of goodwill is estimated annually at each financial
position date regardless of presence of any indications of impairment or
not.
4-18 Employees’ pension
The Company contributes to the government social insurance system for the
benefit of its personnel in accordance with the social insurance law no 79 of
1975 and its modifications. Limited Contributions are charged to income
statement using the accrual basis of accounting..
4-19 Contingent liability and commitment
Contingent liabilities and commitments shown out of the financial position as
it is not represented actual assets or liabilities at the financial position date.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the financial period ended March 31, 2010 Translation from Arabic
- - 12
4-20 Related parties transactions
Transactions with Related parties that are undertaken by the Company in the
course of its ordinary transactions are recorded according to the conditions
laid down by the company’s management on the same bases of dealing with
third party.
4-21 Cash flow statement
Consolidated Cash flow statement is prepared using the indirect method.
For purpose of preparing the consolidated statement of cash flows, Cash and
cash equivalents include cash and time deposits for a period not more than
three months.
4-22 Comparative Figures
Comparative figures are reclassified whenever necessary to confirm with the
current classification in the current Period.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- - 13
5- FIXED ASSETS (NET)
Net Book
Value as of
Net Book
Value as of
Accumulated
depreciation
as of
Cost as of
31/12/2009 31/3/2010 31/3/2010 31/3/2010
LE LE LE LE
123,310,330 123,480,029 -- 123,480,029 Land
497,016,037 494,958,965 183,224,349 678,183,314 Buildings & Constructions
913,570,704 895,583,845 1,296,822,159 2,192,406,004 Machinery & Equipments
22,869,897 23,184,978 61,115,369 84,300,347 Vehicles
19,476,334 20,250,134 26,093,350 46,343,484 Tools & Supplies
3,753,682 3,372,929 20,873,698 24,246,627 Showrooms Fixture
21,501,708 21,682,303 28,636,398 50,318,701 Furniture & Office Equipments
7,102,168 6,843,146 37,189,557 44,032,703 Computers and Programs
1,608,600,860 1,589,356,329 1,653,954,880 3,243,311,209
6- PROJECTS IN PROGRESS
31/3/2010 31/12/2009 E.L E.L
Buildings under Construction 115,868,346 132,121,362
Machinery & Equipment under installation 91,486,557 80,715,114
Development of computer system 1,608,184 166,450
Advance payment for purchasing Fixed assets 18,033,514 18,500,854
Letters of credit for purchasing fixed assets 811,548 751,554
227,808,149 232,255,334
- Projects under construction includes amount of L.E 2,021,625 as a capitalized
loan’s interest and commissions during the period.
7 – GOODWILL
31/3/2010 31/12/2009 E.L E.L
Oriental weavers international (OWI) 51,258,912 51,258,912
MAC Mills (MAC) 573,720,329 573,720,329
Egyptian Fibbers Co. EFCO 67,551,346 67,551,346
Oriental weavers Co.- U.S.A (OW U.S.A) 4,305,383 4,305,383
696,835,970 696,835,970
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- - 14
8- AVAILABLE FOR SALE INVESTMENTS
* According to board of directors meeting held on December 25, 2007 which include the intention of selling its investments in the company
and offering it to other investors, the company name has been changed from Oriental Weavers & Miro Radici Textiles to be Oriental
Weavers for Textiles
balance as
Of
31/12/2009
balance as
Of
31/3/2010
Accumulated
Unrealized
Gain
Accumulated
Impairment
losses
Acquisition
cost
Par value
for each
Share
Percentage
of
participation
of . No
edown
E.L E.L E.L E.L E.L % Shares
32,195,211 32,195,211 -- -- 32,195,211 USD 100 45 56,250 Oriental Weavers for Textiles
5,304,365 5,304,365 -- -- 5,304,365 L.E 10 28.5 524,000 10th of Ramadan for Spinning Industries
1,433,607 1,433,607 -- -- 1,433,607 L.E 10 30.8 81,677 Modern Spinning Company
4,200,000 4,200,000 -- -- 4,200,000 L.E 10 8 800,000 Orientals for Industrial Development
14,295,000 14,295,000 -- -- 14,295,000 L.E 5 11.7 3,202,000 Oriental Petrochemicals
12,639,818 12,639,818 451,625 -- 12,188,193 L.E 15.58 1.2 782,167 Piraeus Bank
-- -- -- (402,000) 402,000 L.E 100 2.08 4,000 Egyptian for Trade and Marketing
450,000 450,000 -- -- 450,000 L.E 10 9 45,000 Oriental for Polyester Industry
10,000 10,000 -- -- 10,000 L.E 100 -- 100 Trading for Development Export
3,750 3,750 -- -- 3,750 L.E 10 1,5 1500 Cambridge Weavers
70,531,751 70,531,751 451,625 (402,000) 70,482,126
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- - 15
9- INVENTORY
.
10- DEBITORS AND OTHER DEBIT ACCOUNTS
11- CASH AND CASH EQUIVALENT
31/32010 31/12/2009
E.L E.L
Bank – Time Deposit 254,771,670 202,028,372
Bank – Current Account 170,481,799 122,175,781
Cash on hand 11,446,267 13,095,320
Cash and cash equivalents 436,699,736 337,299,473
Less:
Time deposits blocked as guarantee to the facilities which
granted to the company 484,755 480,355
Cash & cash equivalents for cash flows statement purposes
436,214,981 336,819,118
31/3/2010 31/12/2009
E.L E.L
Raw materials 480,877,196 513,411,896
Spare parts & materials 72,743,942 73,250,402
Work in progress 89,503,936 81,284,133
Finished products 790,558,003 750,307,963
Letter of credit for purchasing of raw materials 16,962,156 11,918,350
1,450,645,233 1,430,172,744
31/3/2010 31/12/2009
E.L E.L
Prepaid expenses 14,320,389 10,211,884
Tax authority – debit accounts 32,783,202 29,957,027
Debit accounts – related parties 12,479,696 10,498,742
Letter of guarantee – cash margin 1,918,932 2,499,103
Suppliers – advance payment 35,955,976 20,946,021
Orientals for Building materials (Orocom) 5,000,000 5,000,000
Other debit accounts 27,855,693 27,351,132
130,313,888 106,463,909
Less:
Impairment loss on debtors and other debit accounts 2,676,321 2,676,321
127,637,567 103,787,588
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- - 16
12- Provisions
Balance as of
Formed
during
Used
during Balance as of
1020/1/1 yearThe yearThe 1020/3/13
E.L E.L E.L E.L
Provisions for Contingent liabilities 67,565,778 420,961 1,024,089 66,962,650
67,565,778 420,961 1,024,089 66,962,650
13- BANKS – CREDIT ACCOUNTS
Banks – credit account amounting to L.E 910,350,583 as of March 31,2010 represents
short term facilities granted by banks at relatively fixed interest rate,
a part of facilities is guaranteed by notes receivable deposited at these banks for
collection.
14- CREDITORS AND OTHER CREDIT ACCOUNTS
31/3/2010 31/12/2009
E.L E.L
Trade receivable – advance payment 62,092,767 37,777,397
Accrued expenses 13,919,548 12,764,602
Tax authority – credit accounts 48,587,598 43,216,173
Social insurance authority 4,284,541 4,386,388
Creditors – purchases of fixed assets 1,960,965 2,847,113
Shareholders – credit accounts 768,274 8,917,504
Deposits from others 20,980,797 16,312,159
Accrued sales taxes instalment 1,942,358 2,096,509
Credit accounts – related parties 6,566,296 6,541,413
Other credit accounts 13,688,361 11,166,350
174,791,505 146,025,608
15- Issued And Paid Up Capital
15-1 The company’s authorized capital is determined to be L.E 500 Million (five
hundred million Egyptian pounds).
15-2 The Issued capital is LE 280,951,780 (only two hundred eighty million, nine
hundred fifty one thousand and seven hundred and eighty Egyptian pounds)
distributed over 56,190,356 share of which L.E 259,354,980 (only two hundred
fifty nine million , three hundred fifty four thousand and nine hundred and
eighty Egyptian pounds) are cash shares and L.E 21,596,800 (only twenty one
million and five hundred ninety six thousand and eight hundred Egyptian
pounds) are in-kind shares at a value of L.E 5 each (five Egyptian pounds).
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- - 17
15-3 According to the decision taken by the general assembly meeting held on
March 29,2008 it was approved a stock dividend by one share per each three
shares and increasing issued capital in amount of LE 92,081,775 . The Issued
capital reached the amount of LE 373,033,555 distributed over 74,606,711
shares and it had been registered at the commercial register at July 7, 2008.
15-4 The company’s shares are centrally kept at Misr for Central Clearing, Depositary
and Registry Co. and those shares are traded in Cairo and Alexandria stocks
exchange market.
16- Reserves
31/3/2010 31/12/2009 E.L E.L
Legal reserve 1,007,736,564 997,679,684
General reserve 353,803,562 353,803,562
Special reserve 59,973,828 59,973,828
Capital reserve 408,872 408,872 1,421,922,826 1,411,865,946
17- MINORITY INTEREST
Minority
interest in the
net equity of
subsidiaries
Minority
interest in the
net profit of
sidiariessub
Balance as of
1020/3/13
Balance as of
9200/12/31
E.L E.L E.L E.L
Orientals Weavers Co. Fibres (O.W.F) 417,156 46,173 463,329 1,982,591
Orientals Weavers international Co (O.W.I) 60,840 2,283 63,123 11,185,989
MAC Carpet Mills 168,010,505 3,719,546 171,730,051 170,954,836
Egyptian fibres Co. EFCO 14,120,387 791,110 14,911,497 17,196,211
EFCO Modern Fibres 10,590,043 855,203 11,445,246 12,916,769
Oriental Weavers – China 456,133 4,498 460,631 453,471
New MAC 664,619 (136,854) 527,765 1,194,090
194,319,683 5,281,959 199,601,642 215,883,957
Oriental Weavers Company for Carpets
Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
Translation from arabicFor the Financial period Ended March 31,2010
Balance
of the loanPrincipal of
long termcurrent portion long termcurrent portion as ofthe loan in
installmentsdue in one yearinstallmentsdue in one year31/3/2010 originalLoan
L.E.L.E.L.E.L.E.L.E.CurrencyCurrency
Terms of Payment Export Development Bank of Egypt
The principal of the loan shall be settled over ten equal semi annual installments starting
from 30/11/2008 till 31/5/2013 the interest and commissions,shall be computed and paid
upon settlement of installments at inetrest rate 0.75% above libour.
6,837,500 2,735,000 6,862,500 2,745,000 9,607,500 2,500,000 USDExport Development Bank of Egypt (1)
The principal of the loan shall be settled over ten equal semi annual installments starting
from 31/12/2008 till 31/12/2013, the interest and commissions shall be computed and paid
upon settlement of installments at interest rate 8.5%.
15,368,754 6,148,280 15,424,947 6,170,760 21,595,707 5,619,556 USD Export Development Bank of Egypt(2)
The principal of the loan shall be settled over ten equal quarter annual installments starting
from 31/3/2010 till 30/6/2012, the interest and commissions shall be computed and paid
upon its due date.
82,125,000 54 750 00068,625,000 54,900,000 123,525,000 25,000,000 USDExport Development Bank of Egypt (3)
104,331,254 63,633,280 90,912,447 63,815,760 154,728,207
medium term loan to be paid over 10 equal installments semi annual for june and december
in every year. The first installment will be accrued within december 2009 with interest rate
3% above libour.15,325,846 4,376,000 15,381,882 4,392,000 19,773,882 4,000,000 USDBarcleys Bank
17 504 0004,376,000 17 568 0004,392,000 21,960,000 4,000,000 USDHSBC
24,355,206 8,118,573 24,444,257 8,148,258 32,592,515 18,000,000 USDNSGB
--3,214,725 --3,226,231 3,226,231 6,458,093 USDSun Trast Bank
161,516,30683,718,578148,306,58683,974,249232,280,835Brought forward
Medium term loan yo be paid over 10 equal installments semi annual for june and
december in every year. The first installment will be required within december 2009 with
interest rate 3% above libour.
The principal of the loan shall be settled over ten equal semi annual installments starting
from 26/4/2009 till 26/10/2013 , the interest and commission shall be computed and paid
annually at an interest rate 10.25% including highest debit Balance commission while Draw
down curancy is Egyptian Pound .
The principal of the loan shall be settelled over ten equal semi annual installment starting
from 27/12/2005 till 26/2/2010 , the interest and commissions shall be computed at interest
rate 0.9% above libour.
BANK
18- LONG TERM LOANS
Balance as of 31/12/2009Balance as of 31/3/2010
- 18 -
Oriental Weavers Company for Carpets
Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
Translation from arabic
Balance
of the loanPrincipal of
long termcurrent portion current portion as ofthe loan in
installmentsdue in one yearinstallmentsdue in one year31/3/2010 originalLoan
Terms of Payment L.E.L.E.L.E.L.E.L.E.CurrencyCurrency
161,516,30683,718,578148,306,58683,974,249232,280,835Carried Forward
Suez Cannal Bank
The principal of the loan shall be settelled over eight equal semi annual installment starting from
1/6/2007 till 1/12/2010 , the interest and commissions shall be computed at interest rate11%.
--3,030,188 --3,031,208 3,031,208 12,000,000 LESuez Cannal Bank
The principal of the loan shall be settelled over eight equal semi annual installment starting
from30/11/2007 till30/4/2011 , the interest and commissions shall be computed at interest rate of
1.25% above libour.
6,889,012 13,686,524 6,933,823 13,725,000 20,658,823 10,000,000 USDSuez Cannal Bank
6,889,012 16,716,712 6,933,823 16,756,208 23,690,031
109,500,000 27,375,000 96,075,000 41,175,000 137,250,000 25,000,000 USDCredit Agircole Bank EGYPT
111,988,634 24,886,366 99,818,181 37,431,819 137,250,000 25,000,000 USDAlexandria bank
BNP Parbas Bank
The principal of the loan shall be settled over twelve equal quarter annual installments
starting from 30/6/2009 till 31/3/2012 , the interest and commission shall be
computed and paid upon its due date.
45,624,998 36,500,002 36,599,996 36,600,002 73,199,998 20,000,000 USDBNP Paribas Bank (1)
The principal of the loan shall be setteled over ten equal quarter installments with a
grace period of six months starting from the end of draw down period.
7,200,000 4,800,000 6,000,000 4,800,000 10,800,000 12,000,000 LEBNP Paribas Bank (2)
The principal of the loan shall be setteled over eighteen equal quarter installments
starting from february 2009 with at interest rate 1.25% over libro , the interst and
currency calculated and paid upon its due.
11,774,000 4,709,600 10,615,832 4,718,147 15,333,979 3,846,316 USDBNP Paribas Bank (3)
medium term loan to be paid over 8 equal installments semi annual for January and
July in every year. The first installment will be accrued within January 2010 with interest
rate 2.4% above libour.
17,093,750 6,837,500 17,156,250 6,862,500 24,018,750 5,000,000 USDBNP Paribas Bank (4)
81,692,74852,847,10270,372,07852,980,649123,352,727
471,586,700 205,543,758 421,505,668 232,317,925 653,823,593 Total
-The loans are granted to the company against a first class commercial pledge on machinary , equipments and all tangible and intangible assets of the company
The principal of the loan shall be settled over ten equal quarter installments starting
from 1/9/2010 till 1/12/2012 , the interest and commission shall be computed and
paid upon its due date.
The principal of the loan shall be settled over eleven equal quarter installments starting
from 1/8/2010 till 1/5/2013 , the interest and commission shall be computed and
paid upon its due date.
For the Financial period Ended March 31,2010
BANK
Balance as of 31/12/2009Balance as of 31/3/2010
long term
-19 -
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- 20 -
19- DEFERRED SALES TAXES INSTALMENTS
31/12/2009 31/3/2010 Note
E.L E.L No
1,258,859 1,107,824 Deferred sales tax instalments represents
the accrued sales tax on the plants
machinery and equipment which will be
paid on seven equal annual instalments,
after a grace period of three years, against
the letter of guarantee covering these
amounts issued in favour of sales tax
authority as a security for the settlement of
these liabilities on due dates.
(390,233) (390,233) )22( Instalments due within one year were
classified as part of current liabilities in the
consolidated pro forma financial position
under the item of long term liabilities –
current portion.
868,626 717,591
20- HOUSING AND DEVELOPMENT BANK LOAN
31/12/2009 31/3/2010 Note E.L E.L No
928,447 852,307 Balance of this item represents the remaining
amount due to bank of housing and
development against purchasing housing
units for employees in 10th of Ramadan city.
Payment shall be made on equal monthly
instalments for 27 years.
(122,212) (122,212) )22( Instalments due within one year were
classified as part of current liabilities in the
consolidated financial position under the
item of long term liabilities – current portion.
806,235 730,095
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- 21 -
21- CREDITORS – PURCHASE OF FIXED ASSETS
22- LONG TERM LIABILITIES – CURRENT PORTIONS
31/12/2009 31/3/2010 Note
E.L E.L No
205,543,758 232,317,925 )18( Long-term loan instalment
390,233 390,233 )19( Deferred sales taxes instalment 122,212 122,212 )20( Housing and development bank loan
5,097,223 3,091,774 )21( Creditors purchase of fixed assets
211,153,426 235,922,144
23- DEFERRED TAX
Deferred tax Assets and liabilities
31/3/2010 31/12/2009
Assets Liabilities Assets Liabilities E.L E.L E.L E.L
Temporary tax differences – O.W. (USA) 22,096,361 -- 22,035,988 --
Fixed assets -- (22,635,635) -- )22,883,187( Total deferred tax assets / (liabilities) 22,096,361 (22,635,635) 22,035,988 )22,883,187(
Net deferred tax assets (539,274) )847,199(
31/12/2009 31/3/2010 Note E.L E.L No
11,715,670 6,818,590 Balance of this item represents the
remaining amount due to 10th of
Ramadan city organization in return of
purchasing a piece of land in 10th of
Ramadan city. )5,097,223( (3,091,774) )22( Instalments due within the year were
classified as part of the current
liabilities in the balance sheet under
the item of long term liabilities – Due
within one year.
6,618,447 3,726,816
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- 22 -
24- BASIC EARNING PER SHARE FOR THE PERIOD
Basic earning per share determined in the period profits as follows:-
31/3/2010 31/3/2009 L.E L.E
Net profit for the period 91,799,749 96,725,991
Weighted average number of shares available during
the period 73,355,211 74,448,640
Basic earning per share for the period 1.25 1.30
25- TREASURY STOCKS
31/3/2010 31/12/2009 No. of Amount No. of Amount
Description Stocks
L.E Stocks L.E
The owned Shares by MAC Carpet Mills "Subsidiary Co." 158,071 1,295,095 158,071 1,295,095 The owned Shares by Oriental weavers Co.- U.S.A (OW U.S.A) " Subsidiary Co." 1,093,429 20,956,231 1,093,429 20,956,231 1,251,500 22,251,326 1,251,500 22,251,326
26- CONTINGENT LIABILITIES
L.G’S Issued By Banks in favour of the company and its subsidiaries to third parties
as of March 31, 2010 amounted to L.E 8,062,399 Also Contingent liabilities from
L.C’S in that date amounted to L.E 58,567,467
27- CAPITAL COMMITMENTS
The capital commitments as of March 31, 2010 amounted to L.E 20,928,929
Represents the value of new extension related to show Rooms and completion of
construction in progress.
28- TAX POSITION
28-1 Corporate Tax
- The company was inspected till December 31, 2004 and the assessed tax
differences were paid.
- The company submits its annual tax return regularly on legal dates.
28-2 Salaries & Wages Tax
- The company was inspected till December 31, 2005 and the assessed tax
differences were paid.
- The company has inspected the salary tax for the years 2006 & 2007, the
company has not been informed for claims.
- The company submits its tax return on the legal dates.
Oriental Weavers Company for Carpets Notes to the Consolidated Financial Statements For the Company and Its Subsidiaries
For the Financial period Ended March 31, 2010 Translation from Arabic
- 23 -
28-3 Sales Tax
- The company was inspected till December 31, 2006 and the assessed tax
differences were paid.
- The company submits the monthly tax return on the legal dates.
28-4 Stamp Duty Tax
- The company was inspected up to July 31, 2006 and the assessed tax
differences were paid.
- The company submits the tax return on the legal dates.
29- FINANCIAL INSTRUMENTS AND RISK MANAGMENT
29-1 Financial instruments fair value
The company's financial instruments represents the balances of cash and
cash equivalent debtors and creditors debit and credit balances and bank
–credit accounts. The carrying amounts of these financial instruments
represents a reasonable estimate of their fair value.
29-2 Interest rate risk
Interest rate risk represents an adverse effect of the interest rate changes
on its operational results and cash flows and the company depends in
financing its working capital on short-term loans at an almost fixed
interested rate.
29-3 Credit Risk
Credit risk is represents the ability of customers granted credit facilities
to pay the balances due from them. This risk is controlled by the
company through credit selling to a limited number of reputable
customers of strong credit position and governmental bodies. Further,
The Company obtains notes receivable from the customers against the
debts due to the company; therefore, the company consider this risk
relatively limited.
29-4 Foreign Currency Risk
The foreign currency risk basically represents the risk of fluctuations in
exchange rates which affects expenditures and disbursements in foreign
currencies as well as the valuation of assets and liabilities in foreign
currencies. The company considered this risk to be low where the
company pays the obligations in foreign currencies.