ZaraAnnual-Arabic2009

ZARA INVESTMENT COMPANY (HOLDING COMPANY)
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2009
ZARA INVESTMENT COMPANY (HOLDING COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009
Notes 2009
JD
2008
JD
Operating Activities
Profit before income tax 8,573,758 12,617,335
Adjustments for
Depreciation 7,920,702 6,367,565
Net financing expenses 5,618,698 5,205,178
(Gain) loss on sale of property and equipment ( 42,297) 23,999
Impairment loss on projects in progress - 1,152,189
Loss from financial investments 25,520 8,623
Provision for doubtful debts 38,752 139,040
Changes in working capital
Increase in inventory ( 26,569) ( 374,004)
Trading investments - 68,500
Increase in receivables and other current assets ( 2,621,119) ( 740,469)
Increase in payables and other current liabilities 2,154,930 2,130,898
Income tax paid ( 1,239,338) ( 877,833)
Net cash flows from operating activities 20,403,037 25,721,021
Investing Activities
Available-for-sale investments ( 1,700) ( 1,270,160)
Advance payments on investments ( 786,537) ( 623,481)
Property and equipment and projects in progress ( 28,449,534) (26,178,660)
Sale of property and equipment 104,703 49,373
Net cash flows used in investing activities ( 29,133,068) (28,022,928)
Financing Activities
Repayment of loans and bonds ( 22,464,285) (20,661,968)
Loans 24,936,400 40,196,000
Non-controlling interests 2,431,051 ( 724,138)
Finance expenses paid ( 5,827,912) ( 5,255,486)
Net cash flows (used in) from financing
activities
( 924,746) 13,554,408
Net (decrease) increase in cash on hand and
at banks
( 9,654,777) 11,252,501
Cash and cash equivalents, beginning of year 22 15,433,236 4,180,735
Cash and cash equivalents, end of year 22 5,778,459 15,433,236
1. General
Zara Investment Company was established on May 10, 1994 as a public shareholding company. The
Company’s subscribed and paid in capital is JD 125,000,000 consisting of 125,000,000 shares, each having
a par value of JD 1.
The principal activities of the Company as a holding company are to manage its subsidiaries and
participate in other companies’ management in which it is a principal owner, investing in stocks, bonds
and financial instruments, granting loans, guarantees and financing its subsidiaries. The Company owns
through its subsidiaries’ hotels and resorts located in several places in Jordan (Amman, Dead Sea, Petra,
Himmeh and Aqaba).
The consolidated financial statements were authorized for issue by the Board of Directors subsequent
to their meeting held on February 28, 2010. The consolidated financial statements require shareholders
approval.
2. Accounting policies
Basis of preparation
The accompanying consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS).
The consolidated financial statements have been prepared under the historical cost convention as
modified for the measurement at fair value of available-for-sale investments.
The consolidated financial statements have been presented in Jordanian Dinars “JD”, which is the
functional currency of the Group.
Changes in Accounting Policies
The accounting policies adopted for the period are consistent with those used in the previous year
except that the Group applied the following standard:
IAS 1 ‘Presentation of financial statements’ (Revised)
The revised standard requires changes in equity arising from transactions with owners in their capacity
as owners (i.e. owner change in equity) to be presented in the statement of changes in equity. All
other changes in equity (i.e. non owner changes in equity) are required to be presented separately
in a performance statement (consolidated statement of comprehensive income). Components of
comprehensive income are not permitted to be presented in the statement of changes in equity. The
Group has elected to present two statements.
IFRS 8- Operating Segments
IFRS 8 replaces IAS 14, Segments Reporting. This standard requires to define operating segments and
segments performance in the financial statements based on information used by the chief operating
decision maker. Operating segments are the same as the business segments under IAS 14.
IAS 23 Borrowing Costs
The revised IAS 23 requires capitalization of borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset. The adoption of this revised standard did not have any
impact on the financial position or the performance of the Company.
The accompanying notes from 1 to 30 are an integral part of these consolidated financial statements.
50 Consolidated Financial Statement Annual Report 2009
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