Annual Report - Orascom Development

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46 | consolidated financial statements | OHD Annual Report 2006 2. Investments in subsidiary Investment of Orascom Hotels and Development in Orascom Hotels Holding Company became 43,976,788 shares including 26,273,189 shares that are pledged in favor of some banks and financial institutions as follows: Shares Shares pledged to Commercial International Bank “Giza branch”. 8,823,189 Shares pledged to Abu Dubai Bank 3,450,000 Shares pledged to Misr Bank “El Orman branch”. 12,000,000 Shares pledged to the National Bank of Egypt 2,000,000 26,273,189 During the period from 28 March 2006 to 11 April 2006 the company purchased 25 000 share from Orascom Hotels Holding Company in which the percentage of shares is 97.21% as at 31 December, 2006. 3. Accounting Basis for the Preparation of the Consolidated Financial Statements The consolidated financial statements are prepared according to the Egyptian Accounting Standards and the prevailing Egyptian laws and regulations. 4. Significant Accounting Policies Applied The significant accounting policies applied in the preparation of the consolidated financial statements are as follows: 4.1 Principles of Consolidation The consolidated financial statements include the assets, liabilities and results of operations of Orascom Hotels and Development (Parent Company) and all subsidiaries that are controlled by the Parent Company, hereunder referred to as the “Group”. The basis of preparation of the consolidated financial statements is as follows: • All inter-group balances, transactions and unrealized profit or loss have been eliminated. • Minority interest, in the equity and results of the entities that are controlled by the Parent Company, is shown as a separate line item in the consolidated financial statements and calculated as the minority’s portion in the assets and liabilities of the subsidiary company in the date of the acquisition. • The cost of acquisition represent the total cost incurred by the parent company to acquire the investment and was allocated as follows: the fair value of the assets and liabilities owned by the company at the acquisition date of the investment to the extent of the parent company’s interest obtained on that date. • If the acquisition cost increases over the parent company share in the fair value of the assets and liabilities of the subsidiaries, the difference is treated as goodwill and is recorded as long-term assets. A study is being prepared to find out if there is any indications of impairments in its value. In case there is, the impairments will be included in the income statements. • If the parent company’s share in the fair value of the assets and liabilities has decreased over the acquisition cost in some of the companies, the difference is recorded as a negative goodwill and will be recorded as revenue in the income statement at the date of purchasing.
4.2 Translation of the Foreign Currencies Transactions The group maintains its accounting records in Egyptian Pounds. Transactions denominated in foreign currencies are translated to the Egyptian pounds at the prevailing exchange rates at the date of the transaction. At the balance sheet date monetary assets and liabilities, denominated in foreign currencies are translated at the exchange rates prevailing at that date and exchange differences resulting from the translation are charged to the Income Statement. 4.2.1 Foreign Subsidiary Companies Assets and liabilities of foreign subsidiary companies are valued using the exchange rates prevailing at the consolidated financial statement date, while the shareholders’ equity is valued using the exchange rate prevailing as of acquisition of incorporation date. Revenue and expenses are valued using the average exchange rate during the financial year. Differences arising from valuation are included in the shareholders’ equity under the cumulative translation adjustments line. 4.3 Revenue recognition Land Revenue Revenues resulting from selling lands are recorded according to the accrual basis upon signing land sale contract with client. Construction Revenue Construction revenues are recognized according to the stage of completion method. Operation Revenue Operation revenue is recognized when service is rendered according to the accrual basis. Services Revenue Services revenue is recognized after delivering the service according to the accrual basis. Hotels Revenue in the Owning Companies Revenue is recognized when service is rendered according to the signed financial statement of the owning companies. 4.4 Fixed Assets and its Related Depreciation Fixed assets are recorded at historical cost Lessaccumulated depreciation and are depreciated by using the straight line method, over the estimated useful life for each type of asset as follows: Assets Useful life for the asset Land and Roads Improvement 50 Years Infrastructure 50 Years Golf Courses 20 Years Buildings and Constructions 5 - 50 Years Machinery and Equipments 4 - 25 Years Vehicles 4 - 7 Years Furniture, Fixtures, Operating Equipment and Stores 3 - 20 Years Tools & Fire Fighting Equipments 1 - 8 Years Computers and Electric Machines 3 - 10 Years Leasehold Improvement 3 - 5 Years The preliminary contracts have been registered for some lands and the procedures for registering other lands are in process.
Page 1 and 2: Annual Report 2006
Page 3 and 4: 41% Increase in consolidated revenu
Page 5 and 6: APR 06 Berenice OHD was awarded 25
Page 7 and 8: Business Development During 2006 we
Page 9 and 10: Through this phased development str
Page 11 and 12: 2 4 1 3 5 1 2 4 3 MOROCCO Chbika U.
Page 13 and 14: People and employment During 2006 1
Page 15 and 16: Hotels By the end of 2006, OHD owne
Page 17 and 18: At the intimate marina-side Captain
Page 19 and 20: 16 | Existing towns | OHD Annual Re
Page 21 and 22: Oman Four Projects Oman key figures
Page 23 and 24: Future projects Mauritius Club Méd
Page 25 and 26: New Business Tamweel Mortgage Finan
Page 27 and 28: El Gouna Environmental initiatives
Page 29 and 30: Samih Sawiris Chairman and CEO Mr.
Page 31 and 32: Julien Renaud-Perret Senior VP Inte
Page 33 and 34: Land Bank One key long term value d
Page 35 and 36: Restructuring Financing Scheme A. E
Page 37 and 38: Principal activities and business r
Page 39 and 40: Code of Business Conduct and Ethics
Page 41 and 42: Orascom Hotels and Development Comp
Page 47: Notes to the consolidated financial
Page 51 and 52: 4.13 Cash Flows Statement • For t
Page 53 and 54: Machinery & Equipments Vehicles Fur
Page 55 and 56: 10. Work in progress Work in progre
Page 57 and 58: 14.6 On 4 April 2006 subscription w
Page 59 and 60: 20. Creditors and Other Credit Bala
Page 61 and 62: 23. Long Term Loans (Notes to table
Page 63 and 64: Short Term Portion of the long term
Page 65 and 66: 32. Tax Status 32.1 Corporate Tax T
Page 68 and 69: 66 | Hotel and Real Estate KPIs | O
Page 70 and 71: 68 | Hotel and Real Estate KPIs | O
Page 72: For further information: OHD Invest

Annual Report - Orascom Development

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