FY 2010 Annual Report - Part II - Orascom Development

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ODH Annual Report 2010 Index to the notes to the consolidated financial statements Page 1 General information 9 2 Application of new and revised International Financial Reporting Standards (“IFRSs”) 9 3 Significant accounting policies 11 4 Critical accounting judgments and key sources of estimation uncertainty 24 5 The group and major changes in group entities 27 6 Revenue 27 7 Segment information 28 8 Employee benefits expense 31 9 Investment revenue 32 10 Other gains and losses 32 11 Finance costs 33 12 Compensation of key management personnel 33 13 Income taxes relating to continuing operations 36 14 Earnings per share 39 15 Property, plant and equipment 40 16 Investment property 42 17 Goodwill 43 18 Subsidiaries 44 19 Investments in associates 46 20 Non-current receivables 47 21 Other financial assets 48 22 Other current assets 49 23 Inventories 49 24 Trade and other receivables 50 25 Finance lease receivables 50 26 Capital 51 27 Reserves (net of income tax) 52 28 Retained earnings 53 29 Non-controlling interests 54 30 Borrowings 54 31 Provisions 55 32 Other current liabilities 56 33 Trade and other payables 56 34 Disposal of subsidiaries 56 35 Miscellaneous financial liabilities 58 36 Obligations under finance leases 59 37 Retirement benefit plans 59 38 Risk assessment disclosure required by Swiss law 61 39 Financial instruments 61 40 Share-based payments 66 41 Related party transactions 67 42 Cash and cash equivalents 68 43 Non-cash transactions 68 44 Operating lease arrangements 68 45 Commitments for expenditure 69 46 Events after the reporting period 69 47 Litigation 69 48 Approval of financial statements 69 F-8
Orascom Development Holding (Consolidated Financial Statement) Notes to the consolidated financial statements for the year ended 31 December 2010 GENERAL INFORMATION ___________________________________________________________________________________ Orascom Development Holding AG (“ODH” or “the Parent Company”), a limited company incorporated in Altdorf, Switzerland, is a public company whose shares are traded on the SIX Swiss Exchange. In addition, Egyptian Depository Receipts (“EDRs”) of the Parent Company are traded at the EGX Egyptian Exchange. One EDR represents 1/20 of an ODH share. The Company and its subsidiaries (the “Group”) is a leading developer of fully integrated towns that include hotels, private villas and apartments, leisure facilities such as golf courses, marinas and supporting infrastructure. The Group’s diversified portfolio of projects is spread over nine jurisdictions, with primary focus on touristic towns and recently affordable housing. The Group currently operates in Egypt, Jordan, UAE, Oman, Switzerland, Morocco, United Kingdom, Montenegro and Romania and is continuously seeking development opportunities in untapped yet attractive locations all over the world. The Group has four existing projects: El Gouna, the flagship project, a fully-fledged town on the Red Sea coast (Egypt); Taba Heights, on the Sinai Peninsula (Egypt), the Group’s second tourism destination following El Gouna’s business model; the Cove (Ras Al Khaimah, UAE), the Group’s first development experience outside Egypt; and Haram City, an integrated town dedicated to affordable housing in Egypt, catering for the mass population. The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report. 2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRSs”) _______________________________________________________________________________________ 2.1 New and revised IFRSs affecting amounts reported in the current year and prior years The following new and revised Standards and Interpretations have been applied in the current period and have affected the amounts reported in these financial statements. Details of other new and revised IFRS applied in these financial statements that have had no material effect on the financial statements are set out in section 2.2. New and revised IFRSs affecting presentation and disclosure only (i) Revised and amended Standards IFRS 1 was amended in 2010 to provide a limited exemption for first-time adopters of IFRSs. The limited exemption states that an entity need not provide the comparative prior-period information required by the March 2009 amendments to IFRS 7 Improving Disclosures about Financial Instruments for first-time adopters adopting before 1 January 2010. The amendment effective date is on or after 1 July 2010. The Group has used this exemption in the presentation of its 2010 consolidated financial statements. IAS 1 Amendments to IAS 1 Presentation of Financial Statements (as part of Improvements to IFRSs issued in 2009) clarify that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or noncurrent. This amendment has had no effect on the amounts reported in prior years because the Group has not previously issued liabilities instruments of this nature. IAS1 As part of Improvements to IFRSs issued in 2010, IAS 1 Presentation of Financial Statements was amended to clarify that an entity may choose to present the required analysis of items of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements. The Group has applied the amendments in advance of their effective date (annual periods beginning on or after 1 January 2011). The amendments have been applied retrospectively. IAS 7 Amendments to IAS 7 Statement of Cash Flows (as part of Improvements to IFRSs issued in 2009) specify that only expenditures that result in a recognised asset in the statement of financial position can be classified as investing activities in the statement of cash flows. The application of the amendments to IAS 7 has not had any impact on the presentation of cash outflows since the Group has never classified expenditures that do not result in a recognized asset as investing activities. New and revised IFRSs affecting the reported financial performance and / or financial position (ii) Revised and amended standards IFRS 2 Share-based Payment – Amendments to IFRS 2 relate to group cash-settled share-based payment transactions and clarify the scope of IFRS 2, as well as the accounting for group cash-settled share-based payment transactions where the entity receiving the goods or services and another group entity or shareholder has the obligation to settle the award. The amendments have a consequential impact on the consolidated financial statement of the Group. IFRS 3 Business Combinations – IFRS 3 (revised in 2008) represents a comprehensive revision on applying the acquisition method in accounting for business combinations. There was no business combination in the current year. IAS 27 Consolidated and Separate Financial Statements – The consequential amendments to IAS 27 (as amended in 2008) arising from amendments to IFRS 3 have resulted in changes in the Group's accounting policies for changes in ownership interests in subsidiaries that do not result in loss of control. F-9
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FY 2010 Annual Report - Part II - Orascom Development

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