Egyptian Resorts Company “Egyptian Joint Stock ... - ERC Egypt

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Review Report for the interim financial statementsTo the board of directors of Egyptian Resorts CompanyTranslated & OriginallyIssued in ArabicIntroductionWe have performed a limited review for the accompanying consolidated balance sheet ofEgyptian Resorts Company (SAE) as of 31 March 2011 and the related statements ofincome, cash flows and changes in equity for the three-month then ended, and a summaryof significant accounting policies and other explanatory notes. Management is responsiblefor the preparation and fair presentation of these interim financial statements in accordancewith Egyptian Accounting Standards. Our responsibility is to express a conclusion on theseinterim financial statements based on our limited review.Scope of Limited ReviewWe conducted our limited review in accordance with Egyptian Standard on ReviewEngagements 2410, "Limited Review of Interim Financial Statements Performed by theIndependent Auditor of the Entity." A limited review of interim financial statementsconsists of making inquiries, primarily of persons responsible for financial and accountingmatters in the Company, and applying analytical and other limited review procedures. Alimited review is substantially less in scope than an audit conducted in accordance withEgyptian Standards on Auditing and consequently does not enable us to obtain assurancethat we would become aware of all significant matters that might be identified in an audit.Accordingly, we do not express an audit opinion on these interim financial statements.ConclusionBased on our limited review, nothing has come to our attention that causes us to believethat the accompanying interim financial statements do not present fairly, in all materialrespects, the financial position of the Company as at 31 March 2011, and of its financialperformance and its cash flows for the three-month then ended in accordance with EgyptianAccounting Standards.Emphasis of matter
Without considering the following a qualification:1 As disclosed in detail in note no. 26 of the notes to the financial statements, there is alawsuit before court which is raised by one of the lawyers against the General Authorityfor Touristic Development in order to annul the contracts of all lands allocated toEgyptian Resorts Company at Sahl Hasheesh, and On February 28, 2011 the company’smanagement decided to become a part of this lawsuit in order to undertake the legalprocedures and submit the documents supports the company’s position. The company’slegal consultant believes that the lawsuit before council of state is still in its very earlystages and the company intervened in the lawsuit since the prior court hearing only andnevertheless the company submitted a request to the state attorneys’ authority in orderto prepare for the lawsuit considering that there are documents should be submitted tothem before being handed over to be reported, then it would be impossible for the timebeing to predict the results of the lawsuit it this early stage of dispute. Though theextent of the negative effects on the company’s economics and financial position thatmay result because of this lawsuit is not yet determined.2 As disclosed in detail in note no. 26 of the notes to the financial statements, on April 11,2011 the General Authority of Touristic Development has informed ERC that it hasdecided to withdraw its previous consent for the company on development of phase 3lands at Sahl Hasheesh (zone c) in which its area is 20 million meter squared. knowingthat Work in process in connection with this phase on March 31, 2011 amounted to L.E57.95 million. The company is currently taking the legal procedures to appeal thedecision of the General Authority of Touristic Development related to withdrawal of itconsent aforementioned or raising a lawsuit before the administrative court of law tocancel this decision. Based on the company’s legal consultant’s opinion issued April 21,2011, it’s too soon to predict the results of those procedures in the dispute.Cairo, June 8, 2011Ahmed Mohamed Mohamed SalemAuditors’ registerAt the Money Market General Authority No. (94)KPMG Hazem Hassan
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Egyptian Resorts Company “Egyptian Joint Stock ... - ERC Egypt

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