Tabreed 06 Prospectus - London Stock Exchange

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NATIONAL CENTRAL COOLING COMPANY (PJSC) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2004 2 SIGNIFICANT ACCOUNTING POLICIES continued Capital work in progress Capital work in progress is recorded at cost which represents the contractual obligations of the Company for the construction of the plant. Allocated costs directly attributable to the construction of the asset are capitalised. The capital work in progress is transferred to the appropriate asset category and depreciated in accordance with the Company’s policies when construction of the asset is completed and commissioned. Plant, furniture and equipment Plant, furniture and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Plant and buildings over 25 years Furniture and fixtures over 3 to 4 years Office equipment and instruments over 3 to 4 years Motor vehicles over 4 to 5 years The carrying values of plant, furniture and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amounts. Investments in associates The Company’s investments in associates are accounted for under the equity method of accounting. These are entities in which the Company has between 20% to 50% of the voting power or over which it exercises significant influence. Investments in associates are carried in the balance sheet at cost, plus post-acquisition changes in the Company’s share of net assets of the associate, less any impairment in value. The income statement reflects the Company’s share of the results of its associates. Interest in joint venture The Company’s interest in its joint venture is accounted for by proportionate consolidation, which involves recognising a proportionate share of the joint venture’s assets, liabilities, income and expenses with similar items in the consolidated financial statements on a line-by-line basis. Intangibles Goodwill Goodwill represents the excess of the cost of the acquisition over the fair value of identifiable net assets of a subsidiary or associate at the date of acquisition. Goodwill is amortised using the straightline method over the expected period of benefit being twenty years. Trademarks Costs relating to the registration of trademarks are capitalised and amortised using the straight-line method over the expected period of benefit being five years. Borrowing costs Borrowing costs that are directly attributable to the acquisition or construction of an asset are capitalised (net of interest income on temporary investment of borrowings) as part of the cost of the asset until the asset is commissioned for use. Borrowing costs in respect of completed assets or not attributable to assets are expensed in the period in which they are incurred. Contract work in progress Contract work in progress represents cost plus attributable profit less provision for foreseeable losses and progress payments received and receivable. F-47
NATIONAL CENTRAL COOLING COMPANY (PJSC) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2004 2 SIGNIFICANT ACCOUNTING POLICIES continued Impairment and uncollectibility of financial assets An assessment is made at each balance sheet date to determine whether there is objective evidence that a financial asset or group of financial assets may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined and any impairment loss recognised for the difference between the recoverable amount and the carrying amount. Impairment losses are recognised in the income statement. Inventories Inventories are stated at the lower of cost and net realisable value. Costs are those expenses incurred in bringing each product to its present location and condition, as follows: * Raw materials, consumables and goods for resale – purchase cost on a first-in, first-out basis. * Work in progress and finished goods – costs of direct materials and labour plus attributable overheads based on a normal level of activity. Net realisable value is based on estimated selling price less any further costs expected to be incurred on completion and disposal. Accounts receivable Accounts receivable are stated at original invoice amount less a provision for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. Cash and cash equivalents Cash and cash equivalents comprise cash at hand, bank balances and short-term deposits with an original maturity of three months or less. For the purpose of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Accounts payable and accruals Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not. Provisions Provisions are recognised when the Company and its subsidiaries have an obligation (legal or constructive) arising from a past event and the cost to settle the obligation is both probable and able to be reliably measured. Term loans and Islamic loans The term loans and Islamic loans are carried on the balance sheet at their principal amount. Instalments due within one year are shown as a current liability. Interest on term loans and fluctuating profit charges on Islamic loans are charged as an expense or capitalised as part of capital work in progress in accordance with International Accounting Standard No 23 as it accrues, with unpaid amounts included in ‘‘accounts payable and accruals’’. Leases Finance leases, which transfer to the Company and its subsidiaries substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised directly in the income statement. F-48
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TABREED 06 FINANCING CORPORATION (i
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Table of Contents Page STRUCTURE DI
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above, the Dissolution Distribution
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OVERVIEW OF THE OFFERING This follo
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‘‘Margin’’ means 1.25 per c
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Redemption for Tax Reasons accordan
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Lease Agreement Date. The balance s
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(d) fourth, only if such payment is
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Governing Law The Declaration of Tr
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Legionnaire’s Disease Tabreed is
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Enforcement of Liabilities Ultimate
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TERMS AND CONDITIONS OF THE CERTIFI
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3 Status - Limited Recourse 3.1 Sta
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4.3 Late Payment Amounts Received I
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(i) the amount of any liability in
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(d) if LIBOR cannot be determined i
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8.6 Agents act solely as agents of
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‘‘Total Loss Event’’ means
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13.2 The Trustee shall not be bound
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19 Governing Law and Submission to
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transferred into the names of holde
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Issuer. Unless otherwise agreed, th
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Under the Lease Agreement, if Tabre
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USE OF PROCEEDS The proceeds of the
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* Manufacturing: Tabreed, in conjun
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* High barriers to entry. District
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Detailed customer profile of plants
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Contractual Overview Contracts for
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Servicing Ian Banham and Associates
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Tabreed Bahrain is setting up its f
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Plants Expected Commissioning Date
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* Dany Safi, Chief Executive Office
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Marketing district cooling services
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TABREED 06 FINANCING CORPORATION In
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TAXATION The following is a general
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THE UNITED ARAB EMIRATES The UAE is
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The growth of Dubai began in the ea
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Page 77 and 78: GENERAL INFORMATION 1. It is expect
Page 79 and 80: FINANCIAL INFORMATION AED Interim C
Page 81 and 82: ERNST &YOUNG P.O. Box 136 11th Floo
Page 83 and 84: NATIONAL CENTRAL COOLING COMPANY (P
Page 91 and 92: ERNST &YOUNG P.O. Box 136 11th Floo
Page 119 and 120: National Central Cooling Company PJ
Page 125: NATIONAL CENTRAL COOLING COMPANY (P
Page 141 and 142: Registered/Head Office of the Issue
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Tabreed 06 Prospectus - London Stock Exchange

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