lnovest B.S.C. Shariah Supervisory Board Report & Interim Condensed Consolidated Financial Statements 31-March-2018

Transcription

1. lnovest B .S.C. SHARI'A SUPERVISORY BOARD REPORT INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 MARCH 2018 (REVIEWED)
2. Inovest 330 . Administration and contact details Commercial registration as at 31 March 2018 number 48848 obtained on Board of Directors Dr.Omar Salem AI Mutawa Bashar Naser Al Tuwaijri Meshari Fuad Al Fozan Khaled Abdulaziz Al Ghanem Meshal Yousef Al Zayed Yousef Bandar Yaqoub Abdulrahman Hesham Al Nesef - Chairman - Vice-Chairman - Director - Director - Director - Director - Director Chief Executive Officer Murad Al Ramadan Board Secretary Riyadh Mahmood Mulla Sharia’a Supervisory Board Shuja'a Al-Otaibi Sheikh Dr. Khalid - Chairman Sheikh Dawoud Salman Bin Essa - Vice-Chairman Sheikh Dr. Murad Bou Daia - Member - Chairman - Vice-Chairman Corporate Governance Committee members Bashar Naser Al Tuwaijri Abdulrahman Hesham Al Nesef Meshari Fuad Al Fozan Sheikh Dawoud Salman Bin Essa - Member - Member - Chairman - Vice-Chairman Nomination and Remuneration Committee members Dr.Omar Salem Al Mutawa Meshal Yousef Al Zayed Meshari Fuad Al Fozan - Member Audit and Risk Committee members Khaled Abdulaziz Al Ghanem Abdulrahman Hesham Al Nesef Yaqoub Yousef Bandar - - - Chairman Vice-Chairman Member 18 June 2002
3. lnovest B .S.C. Administration and contact details Registered office as at 31 March 2018 19th floor, East Tower Bahrain Financial Harbour PO. Box 18334 Manama Kingdom of Bahrain Telephone no. +973 Bankers 1715 5777 Bahrain Islamic Bank B.S.C. lthmaar Bank 8.30. (Bahrain) B.S.C. (0) Kuwait Finance House (Kuwait) K.S.C.P. Boubyan Bank (Kuwait) Khaleeji Commercial Bank 8.30. Al Baraka Islamic Bank 8.30. (c) Kuwait Finance House AI Salam Bank, Bahrain B.S.C. Auditors Ernst & Young (EY) PO. Box 140 10th Floor, Bahrain World Trade Center Manama, Kingdom of Bahrain Registrars Karvy Computershare W.L.L. Al Zamil Tower, Manama Centre PO. Box 514 Manama Kingdom Kuwait of Bahrain Clearing Company PO. Box 22077 Safat 13081 State of Kuwait S.A.K.
4. In the Sharia Supervisory oI 'AIlah, 'I‘he Beneficent. name Board Report on the activities of [\0\ PSI For the Three Months Period Ended .\Il his praise is due to tinnil} and companions. Allah, I ord ol’the Ihe \ier if I worlds, Prayers and Peace are on Compan} HS! 3] \Iarch 20I8 upon the last me r enger. pr p -t \I To the Shareholders ot I\()\’IEST I.l.S.C “the Commit)": Acting as Sharia fittpen isory Board “853” pursuant to the appointment resolution passed b; the Genera " ot'thc Compan} and 55B meeting on Sunday dated 22- 4 2018 in State ofKuttait. we are requred t pr follo“ ing report. - Ihe SSB has re\iev~ ed the xbmtttcd Company‘s principles. contracts related transactions. and applieatt n and on 31 March 20I based on the Sharia 1 uln r I'or the Three Months Ended Period 8. management Compam‘s presentation ot‘the Company‘s activities for the abovemcntioned period, and comparing it with the firm": and r lllllt: issued. Company's management is responsible for ensuring that the Company conducts its business in accordance s~ ith the Islamic Shari‘a Rules and principles. It is our responsibility to form an independent opinion, based on 0 tr ret ew The ot' the \\ e Compan) ‘s operations planned and performed and to report to you. our review so as to obtain all the infomtation and necessary in order to provide us with sufficient evidence to violated Islamic Shari rules anti principles. In our reasonable explanations assurance which that the we consrderei Company has n t opinion: The contracts and transactions concluded that give we ha\ 6 ret ien ed are in compliance by the Company during the Three Months Period Ended with the Islamic Shari‘a Rules and statements and concluded that it‘s Islamic Sharia view The has been Prayers and Peace are Shaikh Dr. Khalid upon the last messenger, Shuja'a AI-Otaibi Chairman Shaikh Dawoud Salman Bin Essa Vice-Chairman Shaikh Dr. Murad Bou Data Member our prepared based on prepared in an acceptable firm tn-m b) the C empang. the infomtation prox ided prophet Mohammed, his 3.1 March ZOIS Principles. Also, the SSB has approx ed the financial respective report on famil} and companion:
5. / Ernst & Building a better working world Tel: +973 1753 5455 Young P.O. Box 140 Fax: +973 1753 5405 10th Floor, East Tower Bahrain World Trade Center ey.com/mena Manama C.R. No. Kingdom manama@bh.ey.com 6700/ 29977 of Bahrain REPORT ON REVIEW OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF INOVEST B.S.C. Introduction accompanying interim consolidated statement of financial position of Inovest B.S.C. (the "Company") and its subsidiaries (together the “Group") as of 31 March 2018, and the related interim consolidated statement of income, changes in owners' equity, cash flows and sources and uses of charity fund for the three-month period then ended and explanatory notes. The Board of Directors is responsible for the preparation and presentation We have reviewed the condensed consolidated financial statements in accordance with the accounting policies disclosed in note 2. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review. of these interim Scope We of review conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us accompanying interim condensed consolidated financial statements are material respects, in accordance with the accounting policies disclosed in W1 29 April 2018 Manama, Kingdom of Bahrain to believe that the not prepared, note 2. in all
6. Inovest B .S.C. INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 31 March 2018 (Reviewed) Note Reviewed Audited 31 March 31 December 2018 2017 US$ '000 US$ ’000 27,306 41,387 21,740 ASS ETS Cash and bank balances cowm Accounts receivable Investments Investment in joint venture a and associates Investment in real estate Property, plant and equipment .—l_ ._LO Other assets TOTAL ASSETS 18,487 85,817 76,823 12,459 2,845 45,383 18,487 85,938 76,823 12,965 4,018 265,124 265,354 99,577 12,014 102,256 12,927 111,591 115,183 114,604 114,604 LIABILITIES AND OWNERS' EQUITY Liabilities Other liabilities and accounts Financing from a 12 payable 13 bank Total liabilities Owners' Share Less: Equity capital Treasury shares 14 Reserves Retained earnings Equity attributable Non-controlling Total owners' to Parents' shareholders interest equity TOTAL LIABILITIES AND OWNERS' EQUITY (1,239) 113,365 113,365 1,999 10,022 7,036 125,386 122,400 28,147 27,771 153,533 150,171 265,124 265,354 ,,‘____x explanatory notes 1 to 24 form ‘ Tuwaijri Vice-Chairman Chairman The attached 1,999 \ Bashar Naser AI Dr. Omar Salem Al Mutawa (1,239) part of these interim condensed consolidated financial statements. 3
7. Inovest B .S.C. INTERIM CONSOLIDATED STATEMENT OF INCOME For the three month period ended 31 March 2018 (Reviewed) Three months ended 31 March 2018 2017 US$ '000 US$ ’000 2,590 1,363 2,928 1,141 257 240 Note OPERATING INCOME Net income from construction contracts 15 Income from investment in real estate management and other services Net share of (loss) / income from investment in a joint venture and associates Fee for 35 (121) Other income 1,124 321 TOTAL OPERATING INCOME 5,213 4,665 1,046 1,366 647 868 OPERATING EXPENSES Staff costs General and administrative expenses 212 67 181 214 147 105 TOTAL OPERATING EXPENSES 2,233 2,620 NET OPERATING PROFIT 2,980 2,045 related expenses Property Financing costs 10 Depreciation Recoveries from 17 impaired recievables PROFIT FOR THE PERIOD Attributable to 382 6,134 3,362 8,179 2,986 8,184 : shareholders of the Equity Non-controlling parent (5) 376 interest PROFIT FOR THE PERIOD 3,362 8,179 1.06 2.87 BASIC AND DILUTED EARNINGS PER SHARE 19 (US cents) Bashar Naser AI Dr. Omar Salem AI Mutawa Chairman The attached explanatory notes 1 to 24 form Tuwaijri Vice-Chairman part of these interim condensed consolidated financial statements. 4
8. I Total '000 e q u f l y owners 150,17 3,362 Non-ctrlig inter st US$ 27. 71 376 Total equity '000 2,986 Retained earni gs '000 US$ 7,036 2,986 option res rve Share '000 US$ 42 US$ ’000 US$ shareolds Parent’s EQUITY to IN CHANGES (Reviwd) OF STAEMN B.SC. CONSLIDATE Inovest INTERIM 2018 March R e s r v '000 r e s r v e atribu le Stauory US$ Equity 12 ,40 Share US$ 153, 3 138,124 (7,97 ) 8,179 138,952 (5) 28,147 13,640 3,635 1 125,386 124, 84 626 (7,97 ) 8,184 125,317 10, 2 9,1 8 626 (7,97 ) 8,184 42 42 9,951 42 staemnts. fina ci l 5 1,957 ’000 (1,239) s h a r e s Treasury US$ capital ’000 626 1,957 1,371 1,371 conslidate (651) (651) condes (1,239) 1 4,604 1 4,604 1 4,604 1 4,604 interim these of part 31 form ended period month 24 thre the For to 1 notes 2018 period 2018 2017 January the March 1 At for Profit aproiatn funds of 31 January charity At At 1 18) (note paid Revrsal Divden to period 2017 the for Profit Marh 31 At explantory at ched The
9. Inovest B .S.C. INTERIM CONSOLIDATED STATEMENT OF SOURCES AND USES OF CHARITY FUND For the three month period ended 31 March 2018 (Reviewed) Three months ended 31 March Sources of charity Undistributed Reversal of 2018 201 7 US$ '000 US$ ’000 funds charity funds at the beginning to funds appropriation charity of the period - - Undistributed charity funds at end of period - The attached explanatory notes 1 to 24 form part of these interim condensed consolidated financial statements. 6 626 (626) -
10. Inovest B .S.C. INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS For the three month period ended 31 March 2018 (Reviewed) Three months ended 31 March 2018 2017 USS '000 US$ ’000 3,362 8,179 10 511 400 and associates 8 121 sale of investment in real estate impaired recievables 15 (382) (35) (772) (6,134) 3,612 1,638 (1,591) 7,380 6,586 Note OPERATING ACTIVITIES Profit for the period Adjustments for: Depreciation Net share of loss / a joint venture Gain on (income) from investment in 17 Recoveries from Net operating assets and liabilities: deposits original maturity of more than 90 days) changes - in Short-term (with an 4,378 Accounts receivable Receivable from real estate lease right Other assets Accounts payable Net cash from 1,173 (29) (291) (2,679) 3.281 4,893 18,565 - operating activities INVESTING ACTIVITIES Purchase of available-for-sale investment Purchase of property, plant and equipment - 10 Purchase of investment in real estate Net cash used in investing (5) - activities (780) (599) (2,865) (5) (4,244) (913) (869) (7,977) FINANCING ACTIVITIES Net movement in Dividend financing from a bank - paid Net cash used in financing (913) (8,846) 3,975 5,475 5 21,540 32,617 5 25,515 38,092 activities NET MOVEMENT IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD Non cash transactions: Non cash settlement of accounts receivable to property, plant The attached and - equipment explanatory notes 1 to 24 form part of these interim condensed consolidated financial statements. 7 3,883
11. Inovest 380 . NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 31 March 2018 (Reviewed) 1 INCORPORATION AND ACTIVITIES a) Incorporation (the "Company") public shareholding company incorporated in operates under Commercial Registration (CR) number Inovest B.S.C. on 18 June 2002 and is Kingdom of Bahrain 48848. The Company the a Under the terms of its Memorandum and Articles of operations 50 years, renewable for further similar periods unless is of the duration the Association, Company terminated earlier by law or as stated in the Memorandum and Articles of Association. The address of the commenced on 10ctober2002. office is 19th floor, East Tower, Bahrain Financial Harbour, Manama, Company's registered Kingdom of Bahrain. The Company is The Company listed on the Bahrain Bourse and cross-listed has been issued the Central Bank of Bahrain and b) The — an on the Kuwait Stock Category 1 (Islamic Principles) by operate under the Islamic Sharia'a principles, and is supervised Investment Business Firm License to ("CBB"), Exchange. — CBB. regulated by the Activities principal activities of the Engaging directly in all Company together with its subsidiaries (the "Group") include: types of investments, including direct investment and securities, and various types of investment funds. - — - — — — — — Establishing and managing various investment Dealing in financial instruments in the local, funds. regional and international markets. types of investments for others. Providing information and studies related to different Providing financial services and investment consultations to others. Establishing joint ventures Kingdom of Bahrain. Engaging in contracting with real estate, industrial and services companies inside or outside the activities. Engaging in the management of commercial leasing, development and their maintenance. and industrial centres and residential buildings, property participating in any way with companies and other entities engaged in similar activities that may work and co-operate to achieve the Company’s objectives inside and outside the Kingdom of Bahrain, and also merge its activities with the above mentioned entities and/or buy or join Having interest or with them. The number of staff 768 employed by the Group as at 31 March 2018 was 720 employee (31 December 2017: employee). The interim condensed consolidated financial statements for the three months ended 31 March 2018 authorised for issue in accordance with a resolution of the Board of Directors dated 29 April 2018. 2 were ACCOUNTING POLICIES 2.1 Basis of preparation Group for the three months ended 31 guidance given by International Accounting The interim condensed consolidated financial statements of the March 2018 have been in accordance with the prepared Reporting. The interim condensed consolidated financial statements do not contain all information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2017. These interim condensed consolidated financial statements are presented in US Dollars, which is the functional currency of the Group. All values are rounded to US Dollar thousands unless otherwise indicated. Standard 34 - Interim Financial
12. Inovest B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 31 March 2018 2 (Reviewed) ACCOUNTING POLICIES (continued) 2.2 Statement of compliance accounting policies adopted in the preparation of the interim condensed consolidated used in the preparation of the annual consolidated with those consistent statements 2017 which were prepared in accordance with the December 31 ended statements for the year issued Standards ("FAS") by Accounting and Auditing Organisation for Islamic The are Accounting financial financial Financial Financial ("AAOIFI"), the Shari'a rules and principles as determined by the Shari'a Supervisory Board of the Company, the Bahrain Commercial Companies Law, Central Bank of Bahrain ("CBB") and the Financial Institutions Law and the CBB Rule Book (Volume 4). In accordance with the requirements of AAOIFI, for matters for which no AAOIFI standards exist, including interim financial reporting, the Group uses the relevant International Financial Reporting Standards ("IFRS"). Institutions 2.3 Basis of consolidation The interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany balances and transactions are eliminated in full on consolidation. The following are the principle subsidiaries of the Company, which are consolidated in these interim condensed consolidated financial statements: Name of the Ownership Ownership subsidiary 2018 2017 directly by the Company Khaleej Development Co. B.S.C. (c)* 99.98% Tameer for Private 99.00% Country of incorporation Year of Activity incorporation Held Al 99.98% Kingdom of 2009 99.00% Kingdom of 2004 Bahrain Management W.L.L.* Purchase, sale, management and development of properties Bahrain Holds the Group's shares employees on behalf of its in respect of the employees' share option plan the subsidiaries held The following Held indirectly by the Company are Bahrain Investment Wharf B.S.C. 99.00% indirectly through 99.00% Al Khaleej Development Kingdom of 2006 (c): Development. maintenance, leasing and Bahrain (c)* Co. B.S.C. management of commercial and industrial centres, residential buildings and property Circo Total Facility Management Co. W.L.L.* Contracting (c)* Tamcon B.S.C. Dannat Resort Company Tamcon Co. Development 99.00% 99.00% 2005 Management and maintenance of properties 2007 Contracting activities 2008 Managing and Development of Estate Projects Bahrain 99.00% 99.00% Kingdom of Bahrain 67.57% 67.57% Cayman Islands Limited Trading S.P.C. Kingdom of 100.00% 100.00% Kingdom of Bahrain 2009 Real Import, export, sale of electronic & electrical equipment, appliances. its spare parts and sale of building materials.