FY 2012 Annual Report - Orascom Development

F-51 Orascom Development 2012 Annual Report F-52
20 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 )
2012 2012 2011
Jordon 15.64% 6,092,150 6,850,240
Orascom for Housing and Establishments (ii) Cairo 39.90% 1,113,972 1,208,091
International Stock Company for Floating Hotels
& Touristic Establishments (iii)
Cairo 30.00% 107,587 358,523
Mirotel for Floating Hotels Company (iii) Cairo 30.00% 21,517 732,039
Tarot Garranah & Merotil for Floating Hotels (iii) Cairo 30.00% 96,829 1,055,735
Tarot Tours Company (Garranah) S.A.E (iii) Cairo 30.00% 3,555,767 13,564,911
Tarot Garranah for Touristic Transportation (iii) Cairo - - 5,579,585
Al Tarek for Tourist & Hotel Cruises Cairo 30.00% 5,379 -
Andermatt-Sedrun Sport AG (iv) Switzerland 40.26% 7,859,634 -
TOTAL 18,852,835 29,349,124
Summarised financial information in respect of the Group’s associates is set out below.
CHF 2012 2011
Total assets 180,574,514 200,527,845
Total liabilities (132,846,883) (144,337,166)
Net assets 47,727,631 56,190,679
Group’s share of net assets of associates 12,904,901 13,084,459
Total revenue (4,614,320) 37,391,756
Total (loss) for the period (2,997,425) (11,167,476)
Group’s share of profit/(loss) of associates (907,733) (4,980,563)
(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 2012 is
unchanged to prior year.
Sale of 15% stake in Garranah investments
On 1 November 2012, the Group signed a share sale and purchase agreement to sell to the Garranah family an additional 15%
stake in five investment whereof four are operating floating hotels (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) and one is active as a tour operator (Tarot Tours Company (Garranah) SAE). The company that provides tour
transportation services (Tarot Garranah for Touristic Transportation) has been sold completely.
Pursuant to this agreement, the Group’s interest in the four operating floating hotels and the tour operator decreased from 45 to
30 percent however the Group keeps its significant influence over these investments in associates. All interests held in the
company providing tour transportations services have been sold. Legal procedures to transfer title were still in process at year end.
Losses on disposal of the 15% stake in Garranah Group entities of CHF 6.4 million were recognized on sale of the 15% stake.
However, as such losses were already recognized as indirect impairment through provisions based on the estimated sales price in
the third quarter of 2012, they are shown as impairment and not as loss from disposal of part of the investments in associates.
Together with the gains from the sale of the tour transportation services company these losses were recognised through “other
gains and losses ” (refer to note 10 for further details).
(iv) Andermatt-Sedrun Sport AG
As further explained in note 37, the Group lost control over its investment in Andermatt-Sedrun Sport AG (“ASS”) however with a
40.26% interest still has significant influence. The investment in associates is accounted for at its fair value on transaction date
plus the share of gains/losses of ASS since the transaction date. The fair value of ASS was assessed by using a DCF model for its
investment in the skiing area, which is the main asset of ASS. The DCF valuation is based on a five year business plan and a
relatively low discount rate of 5.5% which is due to favourable long-term government financing. In connection with the acquisition
of the skiing areas a total loss of CHF 1.9m resulted from this transaction. See note 37 for further details.
21 NON-CURRENT RECEIVABLES
CHF 2012 2011
Trade receivables 47,273,333 53,370,912
Notes receivable 26,846,506 35,796,968
TOTAL 74,119,839 89,167,880
Non-current receivables include long term receivables for real estate contracts, which will be collected over an average collecting
period of 5.5 years (2011: 5.5 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 (2011: 10 years). None of these non-current
receivables are impaired and/or overdue.
Tamweel Mortgage Finance Company S.A.E. has pledged trade receivable with carrying amount of CHF 18.7 million (2011: CHF
15.6 million) to secure borrowings (note 31).
(ii) Orascom for Housing and Establishment
The company develops real estate and housing projects located in Egypt for the low cost sector. The proportion of ownership
interest held by the Group at 31 December 2012 is unchanged to prior year.
(iii) ODH investments in Garranah Group subsidiaries
Impairment 2012
During 2012 an impairment loss of CHF 12.2 million was recognized in the statement of comprehensive income as “other gains and
losses” as described in note 10. The recoverable amount was determined using a DCF-model based on the latest financial
performance and financial forecasts of Garranah for five years. The discount rates used were between 14% and 17% and the
growth rates used were based on market expectations. As at 31 December 2012 no further impairment was necessary.
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