Tabreed 06 Prospectus - London Stock Exchange

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NATIONAL CENTRAL COOLING COMPANY (PJSC) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2005 2.4 SIGNIFICANT ACCOUNTING POLICIES continued Revenue recognition Sales are recognised when the significant risks and rewards of ownership of the goods and services have passed to the buyer and the amount of revenue can be measured reliably. For sale of chilled water, revenue comprises of available capacity and variable output provided to customers and is recognised when services are provided. Contract revenue represents the total sales value of work performed during the year, including the estimated sales value of contracts in progress assessed on a percentage of completion method, measured by reference to total cost incurred to date to estimated total cost of the contract. Provision is made for any known losses and contingencies. Interest revenue is recognised as the interest accrues (using the effective interest method that is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instruments to the net carrying amount of the financial asset). 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. Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Land is not depreciated. 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 property, plant 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. Expenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately is capitalised and the carrying amount of the component that is replaced is written off. Other subsequent expenditure is capitalised only when it increases future economic benefits of the related item of property, plant and equipment. All other expenditure is recognised in the income statement as the expense is incurred. The Company performs regular major overhaul of its district cooling plants. When each major overhaul is performed, its cost is recognised in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. The cost recognised is depreciated over the period till the next planned major overhaul. 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 and which is neither a subsidiary nor a joint venture. 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. F-19
NATIONAL CENTRAL COOLING COMPANY (PJSC) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2005 2.4 SIGNIFICANT ACCOUNTING POLICIES continued The reporting dates of the associates and the Company are identical and the associates’ accounting policies conform to those used by the Company for like transactions and events in similar circumstances. 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 acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash-generating units, or groups of cashgenerating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Company are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated: * represents the lowest level within the Company at which the goodwill is monitored for internal management purposes; and * is not larger than a segment based on either the Company’s primary or secondary reporting format determined in accordance with IAS 14 Segment Reporting. Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cashgenerating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. Where goodwill forms part of a cash-generating unit (group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained. 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. Impairment and uncollectibility of financial assets An assessment is made at each balance sheet date to determine whether there is objective evidence that a specific financial asset may be impaired. If such evidence exists, any impairment loss is recognised in the income statement. For assets carried at cost, impairment is the difference between cost and the present value of future cash flows discounted at the current market rate of return for a similar financial asset. F-20
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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
Page 47 and 48: USE OF PROCEEDS The proceeds of the
Page 49 and 50: * Manufacturing: Tabreed, in conjun
Page 51 and 52: * High barriers to entry. District
Page 53 and 54: Detailed customer profile of plants
Page 55 and 56: Contractual Overview Contracts for
Page 57 and 58: Servicing Ian Banham and Associates
Page 59 and 60: Tabreed Bahrain is setting up its f
Page 61 and 62: Plants Expected Commissioning Date
Page 63 and 64: * Dany Safi, Chief Executive Office
Page 65 and 66: Marketing district cooling services
Page 67 and 68: TABREED 06 FINANCING CORPORATION In
Page 69 and 70: TAXATION The following is a general
Page 71 and 72: THE UNITED ARAB EMIRATES The UAE is
Page 73 and 74: The growth of Dubai began in the ea
Page 75 and 76: Saudi Arabia Any investor in the Ki
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 97: NATIONAL CENTRAL COOLING COMPANY (P
Page 119 and 120: National Central Cooling Company PJ
Page 141 and 142: Registered/Head Office of the Issue
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Tabreed 06 Prospectus - London Stock Exchange

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