FY 2010 Annual Report - Part II - Orascom Development

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ODH Annual Report 2010 19 INVESTMENTS IN ASSOCIATES _____________________________________________________________________________________________________________________________________________________________________________ Details of the Group’s associates at the end of the reporting period are as follows: Name of associate Jordan Company for Projects and Touristic Development (i) Place of incorporation Proportion of ownership interest and voting power held by the Group Carrying value (CHF) 2010 2010 2009 Jordon 15.64% 6,804,656 8,129,189 Orascom for Housing and Establishments (ii) Cairo 39.90% 1,633,303 - International Stock Company for Floating Hotels & Touristic Establishments (iii) Cairo 45.00% 370,333 - Mirotel for Floating Hotels Company (iii) Cairo 45.00% 1,496,440 - Tarot Garranah & Merotil for Floating Hotels (iii) Cairo 45.00% 1,084,682 - Tarot Tours Company (Garanah) S.A.E (iii) Cairo 45.00% 17,581,334 - El Tarek for Nile Cruises & Floating Hotels (iv) Aswan 45.00% - - Tarot Garranah for Touristic Transportation (iii) Cairo 45.00% 6,426,736 - Total 35,397,484 8,129,189 Summarised financial information in respect of the Group’s associates is set out below. CHF 2010 2009 Total assets Total liabilities Net assets 202,022,366 98,201,458 (131,149,512) (46,211,949) 70,872,854 51,989,509 Group’s share of net assets of associates 18,859,503 8,129,189 Total revenue Total (loss)/profit for the period 45,783,670 25,839,570 (4,614,435) 819,655 Group’s share of (loss)/profits of associates (1,552,599) 187,701 (i) Jordan Company for Projects and Touristic Development (JPTD) JPTD is investing in property, town management and development in Aqaba in Jordon. Since 2008 the Group exercised significant influence with their two active board members out of eleven leading to changes in the JPTD’s Executive Management and provision of essential technical information. The proportion of ownership interest held by the Group at 31 December 2010 is unchanged to prior year. (ii) Orascom for Housing and Establishment OHD increased its investment in Orascom for Housing and Establishment during the current year resulting in an ownership interest of 39.90% at 31 December 2010. The company develops real estate and housing projects located in Egypt for the low cost sector. (iii) Garranah Group subsidiaries On 18 May 2010, the Group signed a share sale and purchase agreement to sell to the Garranah family a six percent stake in six subsidiaries (International Stock Company for Floating Hotels & Touristic Establishments, Mirotel for Floating Hotels Company, Tarot Garranah & Merotil for Floating Hotels, El Tarek for Nile Cruises & Floating Hotels, Tarot Tours Company (Garranah) SAE and Tarot Garranah for Touristic Transportation). Pursuant to this agreement, the Group’s interest in these entities decreased from 51 to 45 percent and the Group ceased control over these subsidiaries, but retained significant influence at 31 December 2010. As of the date of this change of ownership interest, the Group did not consolidate these operations but accounted for them as investments in associates. The Group has accounted for the partial disposal of the six percent it previously held in Garranah subsidiaries in accordance with IAS 27 (as amended in 2008). The Group derecognized all assets, liabilities and non-controlling interests of the entities at their carrying amount. The retained interest in the former subsidiaries was recognized at its fair value at the date when control was lost and the resulting gain amounting to CHF 8, F-46
Orascom Development Holding (Consolidated Financial Statement) 530,587 was recorded in the statement of comprehensive income as other gains and losses (see notes 10 and 34). The members of the Garranah family who were party to the transaction as sellers in 2008 and buyers in 2010 of the six percent stake in the former Garranah subsidiaries are related to the ex minister who is also a member of the Garranah family and currently being investigated in Egypt in his capacity as a public officer. The assets of the Garranah family are frozen; however, this should not impact the recovery of the remaining sales proceeds as this measure is only precautionary and not permanent. On 28 December 2010 the Group signed the legal documents to register the transfer of title regarding the six percent stake of the Garranah entities according to the broker’s invoices by the par value of the shares to the Garranah family except for the legal title of Tarot Tours Company (Garanah) S.A.E which is still under execution awaiting the final approval from the regulator. The company has received a request for clarification from the authorities regarding the execution of the transfer documents with par value. (iv) El Tarek for Nile Cruises & Floating Hotels El Tarek for Nile Cruises & Floating Hotels 20 NON-CURRENT RECEIVABLES ___________________________________________________________________________________ CHF 2010 2009 Trade receivables 56,264,407 65,474,772 Notes receivable 38,455,234 35,952,494 94,719,641 101,427,266 Non-current receivables include long term receivables for real estate contracts, which will be collected over an average collecting period of 5.5 years (2009: 4.5 years) and accounts receivables from the mortgage company (Tamweel Mortgage Finance Company S.A.E.), one of OHD subsidiaries, with an average collecting period of 10 years (2009: 10 years). Tamweel Mortgage Finance Company S.A.E. has pledged trade receivable with carrying amount of CHF 19.3 million (2009: CHF 15.4 million) to secure borrowings (note 30). The Group’s share of losses of this associate exceeds the Group’s interest in this associate and therefore the Group discontinues recognising its share of losses. Furthermore, the Group has no legal or contingent liabilities towards this associate or made payments on behalf of it. F-47
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FY 2010 Annual Report - Part II - Orascom Development

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