kuwait food company (americana) sak

Transcription

KUWAIT FOOD COMPANY (AMERICANA) S.A.K.
Established by Amiri Decree
Dated 29th December 1963
Authorized Capital
Kuwaiti Dinars 14,341,212
Paid up Capital
Kuwaiti Dinars 14,341,212
Commercial Registration No.
4369
Head Office: Shuwaikh, 3rd Industrial Area – Plot 198 A, P.O. Box: 5087, Safat 13051, Kuwait
Fax: 4846925, 4815914 Cable: Nutrition Tel: 4815900 – 8 Lines
www.americana–group.com
e-mail: [email protected]
Auditors:
Mr. Jassim Ahmad Al-Fahad
Al Fahad & Co. Deloitte & Touche
Mr. Abdul Latif Hoshan Al-Majid
Allied Accountants
AMIR OF THE STATE OF KUWAIT
HH SHEIKH JABER AL-AHMAD AL-JABER AL-SABAH
CROWN PRINCE
THE PRIME MINISTER
HH SHEIKH SAAD AL-ABDULLAH AL-SALEM AL-SABAH
HH SHEIKH SABAH AL AHMED AL JABER AL SABAH
BOARD OF DIRECTORS
CHAIRMAN & MANAGING DIRECTOR:
Mr. Marzouk Nasser Al-Kharafi
VICE CHAIRMAN:
Mr. Bader Mohamed Abdul Wahab Al-Jouan
MEMBERS:
Mr. Nasser Mohamed Abdulmohsin Al-Kharafi
Mr. Abdulla Mohamed Al-Saad
Mr. Mohanad Mohamed Abdulmohsin Al-Kharafi
Mr. Loay Jassim Al-Kharafi
Sheikh, Abdulla Salem Sabah Al-Sabah
Board of Directors’ Report
for the year 2004
Dear Honorable Shareholders,
By the end of the year 2004, Kuwait Food Company (Americana) has completed 40 years since its
incorporation in 1963. The Company's development, growth and accomplishment have continued
over these years achieving more stability and expansion as the first food joint stock Company in the
State of Kuwait as well as in the Arab Gulf Region.
Throughout the past 35 years, our Company was under the chairmanship and leadership of
Mr. Nasser Mohamed Abdulmohsin Al-Kharafi. He has devoted his time and effort, gave his long-term
strategic and wise vision and directions, passionate support to the Company during its hard times as
well as his motivation to the Company's staff. This has resulted in the establishment of this sublime
business edifice which has become the largest food stuff Company in all the Arab Countries
according to the "Middle East" magazine's issue no. 350 dated November 2004. It has also become
one of the largest 100 Arab companies including banks and investment, communication, contracting
and real estate companies.
The following table shows the splendid growth of the Company's Sales and Profits as well as the
multiples of such Sales and Profits every 10 years over the past thirty years.
Description
Sales
Net Profit
Annual
Report
2 0 0 4
1974
(Thousa nd
K.D )
1984
(Thousand
K.D )
Multiple
(times)
1994
(Thousand
K.D )
Multiple
(times)
2004
(Thous and
K.D )
Multiple
(times)
1,038
24,579
23.7
90,333
3.7
201,415
2.2
55
1,674
30.4
6,399
3.8
23,5466
3.7
The Company shall continue its stride of development, growth and achievement of contemplated
prosperity at the same rates in the future, God willing.
Challenges & Achieveements
of the year 2004
The year 2004 was rife with challenges in all the
markets. However, the Company has managed to
realize new record Sales and Profits. Total Sales
amounted to K.D 201.4 Million, at 18% growth
rate of the Company's existing business in
addition to another 9% growth rate resulting
from its acquisition of two new businesses
(Green Land Dairy Company of Egypt as well as
Pizza Hut Restaurants in Bahrain). The Company
has also realized a net profit of K.D 23.5 Million,
at 12% growth rate over last year after the
evaluation of the financial portfolio.
Des cription
1984
1989
1994
1999 2004
Sales (KD Million )
24.6
46.8
90.3
138.9 201.4
18%
19%
11%
9%
2.9
6.4
9.3
23.5
15%
24%
9%
30%
170
282
463
669
7
8
9
12
16
2
6
10
12
14
Average Ann ual Growth
of the peri od's Sales
Net Profit (KD Million) 1.7
Average Ann ual Growth
of the peri od's Profits
Number of Re staurants 125
Number of Ch ains
Number of Co mmercial
and Industrial Subsidiaries a nd Sectors
The following graphs indicate the development of the Company's Sales and Profits during the
period 1984 until 2004
Profits 1984 – 2004
(Figures in KD million)
Annual
Report
2 0 0 4
Sales 1984 – 2004
(Figures in KD million)
The above table and diagram indicate that the Company has achieved net sales of K.D 201.4 Million.
This is the largest Sales turnover ever realized by the Company. Besides, the Profits achieved in 2004
amounted to K.D 23.5 Million which represent the highest profits ever realized by the Company
since its incorporation, at an average annual growth rate of 30% over the last five years. This is due
to the long term strategy adopted by the Company for developing and diversifying its business in
terms of its activities and geographic coverage.
Following is the presentation of the • Reaffirming the Company’s capability to
cater for the desires and expectations of its
most outstanding achievements of
restaurants' customers, the number of sold
the Company's busimeals in the year 2004 was 70 Million, at an
ness in the year 2004:
In the year 2004, the Company
continued its mission of
pioneering, universality, diversity, development, community
service and efficiency, making
use of the support of its
Shareholders and the trust of
its customers in all the
respective countries in which it has its
business operations.
Restaurants business's outstanding
achievements in the year 2004:
Annual
Report
2 0 0 4
• In the era of globalization now prevailing all
over the world, Americana has been always
the forerunner thanks to its astute openness
to the developed world. Americana is
considered the largest Arab Company having
such great number of international
franchises since its introduction of Wimpy
restaurants into the region in 1970 as well as
the inauguration of the first Kentucky Fried
Chicken Restaurant in 1973. Then, openings
have followed successively until the
Company's chains reached 16 by the end of
2004 in the field of fast food or casual dining. These distinguished chains
are KFC, Pizza Hut, Hardee's, Baskin
Robbins, TGI Friday's, Saint
Cinnamon, Costa Coffee … etc. The
year 2004 witnessed opening of 63
restaurants at the rate of one new
outlet every 6 days.
increase of 20% over last year. This wouldn’t
have happened but for the Company’s
determination on emphasizing quality in its
entire range of products offered to its
customers, thus satisfying their desires and
exceeding their expectations.
• In addition to the opening of new outlets,
the Company's restaurant business has
introduced two new chains representing
significant addition to the portfolio of
services rendered by Americana to its
customers. The new chains are Saint
Cinnamon (in Egypt and U.A.E.) serving
cinnamon flavored bakeries and light meals
in an atmosphere of luxury and comfort. It
has also introduced Costa Coffee chain (in
Egypt and Lebanon) with its distinguished
flavored coffee and light and assorted meals.
These new chains reflect the strategy
adopted by the Company for consolidating
its competitiveness through planned
penetration and fulfillment of the desires of
its customers in all markets.
• The Company further pays special attention
to the satisfaction of its customers and their
convenience by satisfying their various tastes
through ongoing innovation. Twelve new
products were introduced in
the different chains which were
warmly received by the
customers, such as Chicken
Fillet and Rice with two distinguished flavors and new
Toasted Twister and Zinger
sandwiches at KFC chain while
Hardee's has introduced the
Big Chicken Caesar and the
Famous Star sandwiches. For new product
development purpose, the Company applies
the state-of-art techniques in the field.
• During the year 2004, the Company acquired
Pizza Hut Bahrain Chain including 10
restaurants. As usual, the Company had
immediately developed and renovated four
restaurants during the period from
September until the end of 2004. The other
restaurants are under development and
renovation. The acquisition of Pizza Hut
business integrates the restaurants business
in the State of Bahrain where the Company is
operating KFC and Hardee's Chains.
• Americana has emphasized the elements of
superiority of its restaurants performance as
follows:
Annual
Report
2 0 0 4
-
Quality in its overall concept has
always been associated with the
name of Americana being the
Company's logo for more than 30
years. The quality of foods served by
Americana restaurants has remained
one of the major attractions for its
customers. Quality is related not
only to the products offered by the
restaurants but also to the quality of
customer service. The Company has
introduced in co-ordination with a major
Franchisor, a special award for its
restaurants' staff for this purpose under the
name of "Customer Mania". Quality is the
Company's permanent commitment to its
valuable customers.
-
The Company has been interested in the
convenience of its restaurants' services and
has been keen to render more distinguished
services to its customers through the
development of home delivery service and
introduction of call centers which are the
latest innovation in the world. It has also
been keen to serve various meals such as
family, teenager and kids meals for satisfying
the various tastes and desires of its
customers.
-
The human resources and training are
considered as one of the most significant
elements to which the Company pays special
attention, being one of the outstanding
factors of developing products and services
and caring for customers. Therefore, the
Company's policy is not limited to the
selection of the best human resources for
employment but rather extends to include a
set of continuous development and training
programs. That is to achieve the
highest quality of rendered
services aiming at the complete
satisfaction of our customers
and
achieving
optimum
operational efficiency.
- In 2004, your Company
ascertained
its
efficient
presence
in
restaurants
marketing and promotion
using different mass media
activities and channels. This has resulted in
the consolidation of bonds and relations
between the Company and its customers,
positively reflected on Sales increase despite
the fierce competition. The Company takes
pride in being the pioneer in the region in
the domain of application of efficient
marketing programs in its restaurants
activities. This has resulted in the popularity
of the Company’s brands and the expansion
of its clientele base.
Annual
Report
2 0 0 4
-
The Company shall continue to pay its
attention to information systems and
technological development in its restaurants,
maintaining its pioneering role in terms of
cost and quality control.
-
Kuwait Food Company is totally keen to
achieve more geographic penetration
serving its customers wherever they
are, to deliver their orders fast and
fresh and to provide pleasant and
attractive dining environment inside
its restaurants while their kids enjoy
amusing and safe play areas. It
continues to serve meals at appropriate prices affordable for different
classes of customers giving “value for
money”.
-
Kuwait Food Company (Americana) applies a
consistent policy of providing premium
quality products at reasonable price
throughout the years and across the Arab
countries such that its customers became
accustomed to.
• The Company's restaurants received a
number of awards from its franchisors in
recognition of its commitment to Excellence.
Some of them are; the Franchisee of the Year
in 2004 from TGI Fridays Chain, Customer
Mania Award and Reward and Recognition
Award from Yum Brands, Operational
Superiority Award from Hardee's, the Hazard
Analysis and Critical Control Point (HACCP)
Award for Commissary.
• Kuwait Food Company (Americana) has
managed in the past to set an example of
superiority and accomplishment. In the
present, to occupy a pioneering and leading
role based on the trust of its valuable
customers. The Company has always been
considering its entry into new markets and
opening new chains and restaurants in the
existing countries of its business. This would
provide the Company with more diversity
and presence in the existing markets or the
new potential markets, giving further
balance and momentum for greater growth
of its revenues and profits, God willing.
The following diagram shows the increase of the
Company's restaurants during the period from
1984 until 2004.
Number of res taurants and stor es
1984 – 2004
The diagram indicates that the
number of restaurants has
now become five times the
number 20 years ago. The
number
of
restaurants
increased at 44% over the last
five years. Furthermore, the
number of meals served by
such restaurants was more
than 70 million meals in 2004.
for different olive products. In Kuwait, the
Company has its meat factory for processed
meat and chicken products as well as the
cake and pastry division. Besides, there are
number of affiliated industrial companies
that are not consolidated in the Company's
financial statements. The Company is now
expanding its business in the field of
agriculture for supply of crops used for
production at its factories (such as potatoes,
tomatoes, vegetables …etc.,) as well as
production of other agricultural crops in
Egypt for exporting purposes such as
strawberry …etc.,
The outstanding achievements of • The Company offers its customers a diverse
Industrial and Trade Agencies
portfolio of about 1200 food products by
activities in 2004:
way of indigenous production in its plants
Annual
Report
2 0 0 4
• The Company has been the pioneer and
forerunner in the field of Food Processing
Industries in the Arab countries. It opened
the first meat and hamburger plant in the
region, in Kuwait in 1973. Now, the
Company has 10 food processing plants in
four major regional markets (Kuwait, Saudi
Arabia, U.A.E. and Egypt). Gulf Food
Industries (California Garden) producing
canned food, Cairo Food Industries (Heinz)
producing Ketchup, tomato paste,
mayonnaise,
etc.,
International
Agricultural Development Co. (Farm
Frites) specialized in frozen potato
and vegetables, Green Land Food
Industries for Dairy products,
Al Ahlia Food Industries (meat &
cake divisions), Al Mohandes National
Company for processed canned meat
and the Egyptian Canning Company
and by its trade agencies activities. The
Company's products are available in more
than 30 Arab and foreign countries such as
USA, Canada, Australia, Spain, Belgium,
Netherlands, France, Italy, U.K., Germany,
Sweden, Hong Kong and Singapore.
The following diagram shows the growth in the
number of Industrial and Commercial activities
during the period 1984 to
2004.
• The Trade Agencies activity
has introduced more than 10
new brands into the market,
reflecting the Company's
consistent interest in fulfillNumber of Industr ial
and Commercial Sector s 1984 – 2004 ing the needs of its customers. The Trade Agencies
Sector has introduced many
products of famous international agencies
such as Cadbury Chocolates, California
Garden Canned Foods, Heinz Ketchup,
Nordex Cheese, Farley's Baby Food. …etc.,
so that Americana would continue to be
known as “the Food Basket” in the Arab
world.
confirming the fulfillment of quality
standards. The Company is the first to
receive various ISO certificates in this field.
-
Human resources and training: The
Company is keen in its Industrial and
Trading activities to recruit the best human
resources and to expose them to the latest
training programs. The Company is determined that its staff should acquire excellent
skills in the latest developments in different
business activities in terms of production,
marketing and finance. It is also interested in
providing appropriate working environment
to ensure efficient operation reflecting on
excellence of products and services.
-
Marketing: The Company is proud of being
the pioneer in the region in terms of
introducing efficient marketing programs for
the products of its Industrial and
Commercial activities and following the
state-of-art Manufacturing and Packaging
techniques. This has led to the popularity of
its products, positively reflected on the
increase of its sales turn over despite fierce
competition.
-
Management Information Systems (MIS):
The Company has long history in the field of
• The Company acquired Green Land Dairy
Company in Egypt, which manufactures
various types of dairy products and juices for
both local and export markets. This
acquisition is strongly hoped to have a
significant effect on the future results.
• The Company has continued giving all
attention to each and every element of its
superiority in the field of Industrial
and Trading activities as follows:
Annual
Report
2 0 0 4
-
Quality: Since its onset, the Company’s
products are synonymous with
Quality. Moreover, competitiveness
makes higher quality a necessity. The
companies operating in this field have
been granted International awards
developing the information systems applied
in its business. All the Company's plants
located in the region apply
Oracle technology. At this
context, we cannot miss to
refer to the superb role played
by California Garden in
internally upgrading
the
information system applied and
receiving a recognition award
from Oracle Corporation.
-
Geographical spread: Kuwait Food Company
(Americana) is always keen to carry on its
geographical spread strategy in addition to
the diversification of its industrial products
to ensure an easy, speedy supply to
consumers at affordable cost.
-
Consistency : The Company retains its
products differentiation by continuously
developing
its
industrial
products
specifications, bringing them up to the level
of the prime international brands. That is
what our customers are accustomed to and
expecting besides the excellent value of such
products.
• Americana is holding 23 international
certificates of distinction in the industrial and trade activities. Some of the
most recent are:
Annual
Report
2 0 0 4
-
Farm Frites obtained ISO 9001 and
Euro GAP certificates.
-
Al Ahlia Food Industries Company in
Saudi Arabia obtained ISO 9001, ISO
9002 and ISO 14001 certificates.
-
Egyptian Canning Company obtained ISO
9001 and for production risks safety, the
Hazard Analysis and Critical Control Point
(HACCP) certificate.
-
California Garden Company obtained ISO
9001 , ISO 14001 and (OHSAS 18001)
certificates.
• Kuwait Food Company is in the process of
adding new activities, lines of production
and products to be launched soon in the
markets thus satisfying its consumers
worldwide. Other good news for Americana
Shareholders in 2005 is that in the wake of
the new free trade agreements among Arab
states and with other countries, export
business will notably be enhanced.
Americana in the Community Service
• The Company enjoys a leading and historical
role in providing its products and services of
international quality standards, and at local
prices suitable for local consumers. That
expands the consumer base
and even adds new consumers
becoming Company’s loyal customers.
• The Company is playing a
vital role in supporting the
economic prosperity in the
countries where it operates by
encouraging local industries.
Its contribution as principal
sponsor of campaigns conducted for the purpose of supporting local
product is noticeable. Americana also
contributes in providing much needed
foreign currency in the countries where it
operates through promoting exports and
reducing imports.
Annual
Report
2 0 0 4
• Americana plays a distinctive social role by
the provision of employment opportunities
to the manpower in the different countries it
operates. The Company prides itself that
most of its workforce is of Arab Nationalities
reducing unemployment in these countries
and activating economy. The Company
employs more than 18 thousand of direct
manpower. However, the total manpower
including the affiliated companies, which are
not consolidated in Americana’s balance
sheet, shall reach to more than 25 thousand.
The Company is considering human
resources as the pivotal element to
realize its objectives. Hence it has solid
plans and long term strategies to
guarantee its edge in that field.
• The Company also participates in
many fields of social activities that
serves its commitments to the society.
Examples of such contributions are:
-
Contributions to preserve the environment,
environment awareness and cleaning
campaigns.
-
Social contributions in providing scholarships,
supporting talents, social guidance societies
and
alumni groups, traffic awareness
campaigns and charity activities of all types.
• The Company has also made many
contributions in the field of health care such
as contributing to the International Child
Day, Children Cancer Centers, Disabled
Childhood Affairs Care. It also contributes in
the sports field such as honoring retiring
players, participating in setting up car rallies
and supporting schools sports days.
• The Company shall remain reaffirming its
attention to the elements of innovative
development and information technology as
well as the importance of modern manufacturing technology and techniques. Updating
of such secures the Company's precedent
development and more distinguishing and
guarantees the transfers of international
modern technology to the production units
of the Company making it available in the
Arab countries where it operates.
• The Company reiterates its deep interest in
modernizing all its methods and especially in
Management Information Systems as well as
other technological fields. Its primary goal is
to provide the most suitable modern
technologies to its production and front line
units in the different markets it operates.
Shareholders Equity and the
Proposed Dividends
The Company's Management is always keen to
support its Shareholders' Equity and strengthen
the
Company's
financial
position as mentioned below:
• It is evident by examining the
Company's Balance Sheets
during the previous years, the
considerable
development
occurred in the Shareholders
Equity during the past 20
years.
In
2004,
Net
Shareholders Equity reached 120 million
Kuwaiti Dinars which represents 6 times the
Shareholders Net Equity during 1984 with an
average annual growth of about 26%.
• The total assets of the Company increased
from 167 Million Kuwaiti Dinars last year to
230 Million Kuwaiti Dinars in 2004, an
increase of 38% over the previous year, as a
result of the expansions carried out by the
Company through acquiring new business
activities such as Green Land in Egypt, Pizza
Hut in Bahrain and also increasing the
Company's investments in the financial
portfolios by accurate and diligent selection.
Annual
Report
2 0 0 4
• The Company is keen to improve and
strengthen its financial position through
good selection of its finance resources
suitable for its assets which is reflected
by realizing the maximum possible
benefits for its Shareholders. Hence,
we can see that the percentage of
financing the assets by Shareholders
equity has increased from 34% in 1994
to 52% in 2004 which indicates the
extent of care for developing the
equity of our esteemed Shareholders.
• The Company's Management is careful as has
always been in the past to support the
finance structure of the Company through its
proper management of cash, investments,
making the necessary comprehensive
feasibility studies, adopting time-tested riskfree policy based on safe investment,
diversification of income resources, adding
new streams of profits ensuring financial
security and stability. Investment in financial
portfolios represents an important channel
among the streams of realizing more profits
specially those portfolios which include carefully selected shares of blue-chip Companies
listed in the Kuwait Stock Exchange.
• The Company achieved a huge rise in the
Book Value per Share and its Earnings per
share during the last twenty years. The Book
Value per Share at the end of 2004 after the
proposed dividends, has reached 861 Fils
per share which is 5 times the value in 1984.
Also the Earnings per share (on the basis of
the number of shares at the end of the year)
reached 169 Fils per share at the end of 2004
which is 11 times that of 1984.The following
graph shows the development of the
Company share dividend performance and
the book value per share during the period
from 1984 until 2004.
Description
1984
1989
1994
1999
2004
Shareholders Equity after dividends
19.4
21.8
29.8
49.2 119.9
(KD Million )
Retained Earnings (KD Million )
1.2
2.0
7.4
23.1 73.6
Retained Earnings per Share (Fils )
11
18
66
192 529
Rate of Return on the average
8.7% 13.7% 23.2% 19.6% 22.5%
Shareholders Equity
Book Value per Share* ( Fils)
172
193
264
409 861
Earnings per Share* (Fils)
15
26
57
78
169
* Earnings per Share, Book Value per Share and Retained Earnings per Share are calculated
on the basis of number of shares existing at the end of each year.
The Retained Earnings also amounted to
approximately 74 million Kuwaiti Dinars, which is
a remarkable achievement reflecting the
Company's strong financial position and the
extent of trust it provides to its esteemed
Shareholders.
The following graph shows the growth of Earnings
per Share and the Book Value per Share during
the period from 1984 – 2004.
It is evident from the previous tables & graphs the
massive growth in the Earnings per Share and the
Book Value per Share during the last twenty years.
The rate of return on average Shareholders equity
has increased from 8.7% in 1984 to 22.5% in 2004.
Book Value Per share
1984 – 2004 (Fils)
Annual
Report
2 0 0 4
EPS 1984 – 2004
(Fils)
Dear Shareholders,
The Board of Directors would like to extend the
most sublime thanks and appreciation to all
Arab Countries where the Company has its business through its branches, subsidiaries or affiliated companies, in particular to all Officials and
Government Authorities as well as banking and
financial institutions for their continuous support and continued confidence in our
Company.
Dear Esteemed Shareholders,
The Board of Directors would like to recommend to the General Assembly to distribute
cash dividends at 70% of the capital (i.e., at 70
Fils per share) and bonus shares at 5% of the
capital (i.e., five shares per each one hundred
shares). In addition, to increase the Company's
capital at 10% at a par value of 100 Fils per
share in addition to a share premium amounting to 800 Fils per share to the Shareholders
registered in the Company's records at the date
of the General Assembly meeting.
Annual
Report
2 0 0 4
Finally, the Board of Directors would like to
convey its sincere thanks, gratitude and appreciation to all the Company's Shareholders and
esteemed customers for their sustained continuous trust in the Company and their complete
support over the past forty years. We renew our
undertaking to them that their confidence in
the Company shall remain in place and to continue in this uninterrupted journey of growth
and development. We also extend our thanks to
the Company's management and staff for their
great efforts rendering for the purpose of realizing such distinguished results in a family and
teamwork atmosphere.
Lastly, the Board of Directors of your Company
conveys sincere thanks and humble gratitude to
His Highness the Amir Sheikh Jaber Al Ahmad Al
Jaber Al Sabah, praying to His Almighty God to
keep him in the best of health to continue the
development and progress procession of the
country which he started since several years and
to His Faithful Crown Prince Sheikh Saad Al
Abdullah Al Salem Al Sabah and to His Highness
the Prime Minister Sheikh Sabah Al Ahmad Al
Jaber Al Sabah. Thanks must also be extended
to all honorable Ministers for the service they
are rendering to the country, looking after its
affairs and leading its economy for the country's
welfare. The Board of Directors also extends its
thanks to M/s. Kuwait Stock Exchange, Ministry
of Commerce & Industry and all the state
authorities and institutions for their regular and
continuing cooperation with the Company during 40 years of its age.
God bless us all
Board of Directors
A n n u a l R e p o r t
2 0 0 4
CONSOLIDATED FINANCIAL STATEMENTS
AND AUDITORS’ REPORT FOR THE
YEAR ENDED DECEMBER 31, 2004
2 0 0 4
AUDITORS’ REPORT
The Shareholders
Kuwait Food Company (Americana) S.A.K.
Kuwait
We have audited the accompanying consolidated balance sheet of Kuwait Food Company (Americana) SAK (the
Company) and its subsidiaries (the Group) as at 31 December 2004 and the related consolidated statements
of income, changes in shareholders’ equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audit. We did not audit the financial statements of certain consolidated branches and subsidiaries operating outside the State of Kuwait. The assets and profits of the
entities audited by other auditors represent 48 % and 66 % of the total consolidated assets and profits of the
Group respectively before deducting head office expenses and revenues. Those statements were audited by
other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts
included for these consolidated branches and subsidiaries, is based solely on the reports of other auditors.
We conducted our audit in accordance with International Standards on Auditing. Those Standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the accompanying consolidated financial
statements present fairly, in all material respects, the financial position of the Group as at 31 December 2004,
the results of its operations and its cash flows for the year then ended, in accordance with International
Financial Reporting Standards.
We are also of the opinion that these financial statements give all the information required by the Commercial
Companies Law and the Company’s Articles of Association, proper books of account were kept by the
Company, the stocktaking was carried out in accordance with recognised principles, and the financial information contained in the Board of Directors report, insofar as it relates to the accounts, is in agreement with
the books. We have obtained all the information we considered necessary for the satisfactory performance of
2 0 0 4
our audit. We further believe, according to the information given to us, that no violations of the Commercial
Companies Law or the Company’s Articles of Association occurred during the year ended 31 December 2004,
which might materially affect the Group’s activities or its financial position.
Jassim Ahmad Al-Fahad
(Licence No. 53-A)
Al-Fahad & Co. Deloitte & Touche
Kuwait
29 March 2005
Abdul Latif Abdullah Hoshan Al-Majid
(Licence No. 70-A)
Allied Accountants
2 0 0 4
KUWAIT FOOD COMPANY (AMERICANA)
AND ITS SUBSIDIARIES (S.A.K.) KUWAIT
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2004
A SS ETS
Note
CURRENT ASSETS
Cash and bank balances
Accounts receivable
Inventories
Spare parts
Other assets
Held for trading investments
Total Current Assets
Non-Current Assets
Investments in associated companies
Available for sale investments
Property, plant and equipment
Intangible assets
Total non-Current Assets
TOTAL ASSETS
Marzouk Nasser Al-Kharafi
Chairman of the Board of Directors
and Managing Director
3
4
5
6
7
8
9
10
11
2004
KD
2003
KD
30,894,702
17,647,980
24,997,300
1,791,761
9,560,805
53,409,812
138,302,360
28,340,368
13,048,543
18,143,531
1,389,436
8,108,944
25,768,671
94,799,493
1,588,189
34,772,689
51,202,856
3,789,595
91,353,329
1,531,508
27,720,829
40,567,617
1,991,329
71,811,283
229,655,689
166,610,776
Bader Mohamed Abdul Wahab Al-Jouan
Vice Chairman of the Board
of Directors
2 0 0 4
LIABILITIES, MINORIT Y INTEREST AND
SHAREHOLDERS’ EQUIT Y
CURRENT LIABILITIES
Due to banks
Short-term loans
Current portion of long-term loans
Accounts payable
Accruals and other liabilities
Total Current Liabilities
Non-current liabilities
Long-term loans
Provision for end of service indemnity
Note
2004
KD
2003
KD
14,453,697
1,947,837
2,897,305
30,429,952
27,284,609
77,013,400
7,274,763
673,380
1,823,382
22,646,752
21,557,545
53,975,822
14
10,050,024
8,460,421
95,523,845
4,512,565
4,668,994
7,481,894
66,126,710
2,818,175
15
14,341,212
717,061
7,170,606
3,010,341
9,749,694
(7,367,405)
15,120,031
(978,803)
14,214,426
73,642,116
129,619,279
13,037,465
6,518,733
3,010,341
8,206,156
(7,572,292)
9,137,942
(975,069)
5,088,200
61,214,415
97,665,891
229,655,689
166,610,776
14
12
13
Minority interest
Authorised, issued and paid-up capital – 143,412,115 shares
(2003: 130,374,650 shares) of 100 fils each
Proposed bonus shares dividends
Statutory reserve
Voluntary reserve
Proposed cash dividends
Currency translation reserve
Fair value reserve
Treasury shares
Share premium
Retained earnings
Total Shareholders’ Equity
TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY
16
17
18
19
20
Al-Moataz Adel Al-Alfi
General Manager
The accompanying notes se t out on page s 41 to 59 form an integral part of thes e cons olidated financial statements.
2 0 0 4
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2004
2004
KD
2003
KD
201,415,383
(162,890,648)
38,524,735
158,609,411
(130,882,063)
27,727,348
(527,950)
(18,744,815)
(2,192,360)
(21,465,125)
(423,982)
(15,315,307)
(2,083,463)
(17,822,752)
Profit from operations
Finance costs
Dividend income
Miscellaneous income
Income from investments in associated companies
Increase in fair value of held for trading investments
Net profit before contribution to Kuwait Foundation for the
Advancement of Sciences (KFAS), National Labour Support
Tax, Directors’ remuneration and minority interest
Contribution to KFAS
National Labour Support Tax
Directors’ remuneration
24
Minority interest
Net profit for the year
21
17,059,610
(2,168,400)
2,979,418
235,096
259,495
6,816,669
9,904,596
(1,367,833)
2,164,604
199,020
234,498
11,208,319
25,181,888
(225,849)
(354,134)
(55,000)
(1,000,576)
23,546,329
22,343,204
(213,069)
(438,057)
(55,000)
(565,921)
21,071,157
Earnings per share
185.93 Fils
166.90 Fils
Note
Sales
Cost of sales
Gross profit
22& 23
Amortisation
Selling and marketing expenses
General and administrative expenses
25
The accompanying notes set out on pages 41 to 59 form an integral part of these consolidated financial statemen ts.
2 0 0 4
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLERS’ EQUIT Y
PROPOSED
BONUS
SHARES
DIVIDENDS
KD
STATUTORY
RESERVE
KD
VOLUNTARY
RESERVE
KD
PROPOSED ACCUMULATED
CASH
CURRENCY
DIVIDENDS TRANSLATION
KD
KD
12,416,633
620,832
6,208,317
3,010,341
7,214,203
(6,384,778)
(3,174,573)
(975,069)
5,088,200
48,659,830
72,683,936
Foreign curren cy translation
-
-
-
-
-
(1,187,514)
-
-
-
-
(1,187,514)
Cash divid end s
-
-
-
-
(7,214,203)
-
-
-
-
-
(7,214,203)
620,832
(620,832)
-
-
-
-
-
-
-
-
-
Proposed ca sh dividen ds
-
-
-
-
8,206,156
-
-
-
-
(8,206,156)
-
Changes in fair v alue of investmen ts
-
-
-
-
-
-
12,312,515
-
-
-
12,312,515
Net in come for the year
-
-
-
-
-
-
-
-
-
21,071,157
21,071,157
Transfer to sta tutory reserve
-
-
310,416
-
-
-
-
-
-
(310,416)
-
13,037,465
-
6,518,733
3,010,341
8,206,156
(7,572,292)
5,088,200 61,214,415
97,665,891
Foreign curren cy translation
-
-
-
-
-
204,887
-
-
-
-
204,887
Cash divid end s
-
-
-
-
(8,206,156)
-
-
-
-
-
(8,206,156)
1,303,747
-
-
-
-
-
-
-
-
-
1,303,747
Share premium
-
-
-
-
-
-
-
-
9,126,226
-
9,126,226
Proposed ca sh dividen ds
-
-
-
-
9,749,694
-
-
-
-
(9,749,694)
-
Proposed bo nus s hares dividen ds
-
717,061
-
-
-
-
-
-
-
(717,061)
-
Changes in fair v alue of investmen ts
-
-
-
-
-
-
5,982,089
-
-
-
5,982,089
Net in come for the year
-
-
-
-
-
-
-
-
-
23,546,329
23,546,329
Transfer to sta tutory reserve
-
-
651,873
-
-
-
-
-
-
(651,873)
-
Purchase of treasur y shares
-
-
-
-
-
-
-
(3,734)
-
-
(3,734)
14,341,212
717,061
7,170,606
3,010,341
9,749,694
(7,367,405)
SHARE
CAPITAL
KD
Balance at 31 Decembe r 2002
Issue of bo nus s hares
Issue of share c apital
FAIR
VALUE
RESERVE
KD
TREASURY
SHARES
KD
9,137,942 (975,069)
15,120,031 (978,803)
SHARE
PREMIUM
KD
RETAINED
EARNINGS
KD
TOTAL
KD
14,214,426 73,642,116 129,619,279
The accompanying notes set out on pages 41 to 59 form an integ ral part of the se consolidated financial statements.
2 0 0 4
CONSOLIDATED STATEMENT OF CASH FLOWS
2004
KD
2003
KD
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before for KFAS, National Labour Support Tax,
Directors’ remuneration and minority interest
Adjustments for:
Depreciation
Amortisation of intangible assets
Allowance for doubtful receivables
Allowance for slow moving inventories
Loss on disposal of property, plant and equipment
Loss on disposal of intangible assets
Income from investments in associated companies
Increase in fair value of held for trading investments
25,181,888
22,343,204
9,714,526
527,950
1,694,425
388,834
291,480
104,547
56,082
(259,495)
(6,816,669)
8,818,133
423,982
1,291,256
41,794
3,574,449
170,544
(234,498)
(11,208,319)
Operating profit before working capital changes
Accounts receivable
Inventories
Spare parts
Other assets
Accounts payable
Accruals and other liabilities
Payment of directors’ remuneration
Payment of KFAS contribution
Payment of NLST
Payment of end of service indemnity
Net cash from operating activities
30,883,568
(4,988,271)
(7,145,249)
(402,325)
(1,855,347)
7,783,200
6,377,922
(55,000)
(655,434)
(657,609)
(715,898)
28,569,557
25,220,545
(1,145,886)
(1,318,899)
19,667
(42,515)
4,772,308
4,977,731
(55,000)
(508,496)
31,919,455
(Cont’d)
2 0 0 4
2004
KD
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Acquisition of intangible assets
Purchase of held for trading investments
Proceeds from sale of property, plant and equipment
Minority interest
Net cash used in investing activities
(21,498,411)
(1,628,188)
(20,824,472)
289,989
(572,285)
108,814
693,814
(43,430,739)
2003
KD
(9,026,212)
(994,184)
(1,752,112)
984,467
601,205
(671,201)
(10,858,037)
(Cont’d)
2 0 0 4
Note
2004
KD
2003
KD
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of share capital
Share premium
Purchase of treasury shares
Due to banks
Short-term loans
Current portion of long-term loans
Long-term loans
Dividends paid to shareholders
Unrealised differences from currency translation on consolidation
1,303,747
9,126,226
(3,734)
7,178,934
1,274,457
1,073,923
5,381,030
(8,123,954)
204,887
148,070
(565,482)
(254,674)
(301,125)
(7,214,203)
(1,187,514)
Net cash from / (used in) financing activities
17,415,516
(9,374,928)
Net increase in cash and bank balances
Cash and bank balances at beginning of the year
2,554,334
28,340,368
11,686,490
16,653,878
30,894,702
28,340,368
Cash and bank balances at end of the year
3
The accompanying notes set out on pag es 41 to 59 form an integral part of thes e cons olidated financ ial statements.
2 0 0 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. INCORPORATION AND PRINCIPAL ACTIVITIES
Kuwait Food Company (Americana), is a Kuwaiti Shareholding Company (the Company), incorporated in the
State of Kuwait on 29 December 1963. The main activities of the Company and its subsidiaries (the Group) are
the import and manufacture of food stuff and beverages; the sale of such items on both retail and wholesale
basis in the State of Kuwait, and other Arab countries; and investing its excess funds in investment portfolios
managed by professional investment managers. Its registered head office is in the State of Kuwait, P. O. Box
5087 Safat 13051 Kuwait.
Number of employees of the Group as of 31 December 2004 was 18,010 (31 December 2003: 15,796).
These consolidated financial statements were approved by the Board of Directors and authorised for issue on
29 March 2005.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards. These consolidated financial statements have been prepared under the historical cost
convention, except for the measurement at fair value of held for trading investments and available for sale
investments. The accounting policies adopted by the Company are the same as the policies used by the subsidiary companies.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries.
Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has the
power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases.
Intercompany balances and transactions, including intercompany profits and unrealised profits and losses are
eliminated on consolidation.
2 0 0 4
The consolidated subsidiaries are:
Company’s Name
Americana International Company (Safeway)
Arab Gulf Company for Food and Supermarkets
Al Ahlia Restaurants Company
National Food Industries Company
International Fashion Company
Bahrain and Kuwait Restaurants Company
International Cosmetics Company
United Food Company
Kuwait Food Company
Kuwait Food Company
Americana International Company (Fashionway)
Gulf Food Industries Company - (California Garden)
Qatar Food Company
Touristic Projects and International Restaurants
Company Limited
International Tourism Restaurants Company
International Touristic Projects Lebanese Company
Basis of consolidation (continued)
Gulf and Arab World Restaurants Co.
Americana Group for Food and Touristic Projects
(Egypt) and its subsidiaries
Egyptian Co. for International Touristic Projects
The International Co. for Agricultural Development
Al-Mohandas National Company for Meat Processing
Egyptian Canning Co. - Americana
Americana Egypt for Cold Storage
Americana Marketing and Distributing Co.
Greenland Group for Food Industries
Ownership %
89.55
99.25
99.96
99.96
100
40
100
98
100
100
97.4
100
100
62.3
99
98
85
99.81
90.35
58.19
94.08
99.53
51
94.2
75
Country of Incorporation
Kuwait
Kuwait
Saudi Arabia
Saudi Arabia
Saudi Arabia
Bahrain
Saudi Arabia
Saudi Arabia
Egypt
United Arab Emirates
Qatar
Jordan
Oman
Lebanon
Bahrain
Egypt
Egypt
Egypt
Egypt
Egypt
Egypt
Egypt
Egypt
Cash and bank balances
Cash and bank balances comprise cash on hand, bank balances and fixed deposits with an original maturity of
three months or less.
2 0 0 4
Accounts receivable
Accounts receivables are stated at invoice value, less allowance for any doubtful accounts. Management
determines the adequacy of the allowance based upon reviews of individual customers, current economic
conditions, past experience and other pertinent factors.
Inventories
Inventories are valued at the lower of cost or net realisable value. Raw materials cost is determined on a
weighted average basis. The cost of finished goods and goods in process, includes direct materials, direct
labour and fixed and variable manufacturing overhead, and other costs incurred in bringing inventories to their
present location and condition. An allowance is made when needed, for slow moving items and is charged to
the consolidated statement of income.
Spare parts
Spare parts are carried at cost. Purchase cost includes the purchase price, import duties, transportation, handling and other direct costs.
Investments
The Group maintains two separate investment portfolios; held for trading investments and available for sale
investments.
All investments are initially recognised at cost, being the fair value of the consideration given including acquisition costs associated with the investment. After initial recognition, investments are remeasured at fair value.
For investments traded in organised financial markets, fair value is determined by reference to quoted bid
prices at the close of business on the balance sheet date.
For investments where there is no quoted market price, a reasonable estimate of fair value is determined by
reference to the current market value of another instrument which is substantially the same or is based on the
expected cash flows or the underlying net asset base of the investment. Investments whose fair value cannot be
reliably measured are carried at cost.
Gains or losses arising from changes in the fair value of held for trading investments are included in the consolidated statement of income in the period in which they arise.
Investments
Gains or losses arising from changes in fair value of available for sale investments are recognised directly in
equity in the fair value reserve until the investment is sold, collected, or otherwise disposed of, or until the
investment is determined to be impaired at which time the cumulative gain or loss previously recognised in the
“fair value reserve” is included in the consolidated statement of income for the year.
2 0 0 4
Trade date and settlement date accounting
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date the Group
commits to purchase or sell the assets. Regular way purchases or sales are purchases or sales of financial assets
that require delivery of the asset within a time frame generally established by regulation or convention in the
market place concerned.
Associated companies are those in which the Group has a long-term investment and over which it exerts significant influence, but not overall control, including participation in operating and financial policy decisions of
the investee. Investments in associated companies are accounted for using the equity method of accounting
based on latest financial statements.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes the purchase price and directly associated costs of bringing the asset to a working
condition for its intended use. Depreciation is calculated based on the estimated useful lives of the applicable
assets on a straight line basis. Maintenance and repairs, replacements and improvements of minor importance
are expensed as incurred. Significant improvements and replacements of assets are capitalised. Gains and losses on retirement or disposal of assets are included in the consolidated statement of income.
Land is stated at cost. The Group’s policy is to hold land not for resale but to develop it and use it in projects
to generate operating income.
Intangible assets
Intangible assets consist of franchise and agency rights and leasehold rights. Intangibles are carried at cost less
accumulated amortisation and any accumulated impairment losses. Intangible assets are amortised using the
straight-line method over five years in Kuwait and outside Kuwait over the lesser of twenty years or life of the
agency or leasehold rights.
Projects in progress
These projects are stated at cost, when completed and put into use, they are transferred to property, plant and
equipment.
Provision for end of service indemnity is calculated in accordance with the labour laws of the countries where
the Company’s branches and subsidiaries are located.
2 0 0 4
Treasury shares
Treasury shares consist of the Company’s own shares that have been issued, subsequently reacquired by the
Company and not yet reissued or cancelled. The treasury shares are accounted for using the cost
method. Under the cost method, the weighted average cost of the shares reacquired is charged to a contra
equity account. When the treasury shares are reissued, gains are credited to a separate account in
shareholders’ equity (gain on sale of treasury shares) which is not distributable. Any realized losses are charged
to the same account to the extent of the credit balance on that account. Any excess losses are charged to
retained earnings then to reserves. Gains realized subsequently on the sale of treasury shares are first used to
offset any previously recorded losses in the order of reserves, retained earnings and the gain on sale of
treasury shares account. No cash dividends are paid on these shares. The issue of bonus shares increases the
number of treasury shares proportionately and reduces the average cost per share without affecting the total
cost of treasury shares.
Revenue recognition
Sales are recognised on delivery and are reported net of applicable discounts and taxes. Interest income is
recognised on the accrual basis, and dividend income is recognised when the right to receive payment is established.
Foreign currency translation
Foreign currency transactions are recorded in Kuwaiti Dinars at the approximate rates of exchange prevailing
at the date of the transactions. Transactions between the head office, branches and the subsidiaries are
recorded at annually agreed fixed rates of exchange. Assets and liabilities denominated in foreign currencies
are translated into Kuwaiti Dinars at the balance sheet date. Translation gains or losses are recorded in the
consolidated statement of income. Currency investments in the capital and reserves of its branches and
subsidiaries are included in the caption “Currency Translation Reserve” and shown as a component of
shareholders’ equity in the consolidated balance sheet.
Borrowing costs
Interest on borrowings is calculated on accrual basis and is recognised in the consolidated statement of income
in the period in which it is incurred.
Impairment
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and
financial assets to determine whether there is any indication that those assets have suffered an impairment loss.
If any such indications exists, the recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any) and this loss is recognised in the consolidated statement of income.
2 0 0 4
3. CASH AND BANK BALANCES
December 31,
2004
KD
Cash on hand and bank current accounts
Time deposits and bank call accounts
7,118,320
23,776,382
30,894,702
2003
KD
4,831,660
23,508,708
28,340,368
Average interest yield on short-term deposits is available in Note 29.
4. ACCOUNTS RECEIVABLE
Trade receivables
Other receivables
Current accounts with associated companies
Allowance for doubtful receivables
5. INVENTORIES
December 31,
2004
KD
13,077,585
5,347,750
693,366
2003
KD
9,929,931
3,736,822
463,677
19,118,701
14,130,430
(1,470,721)
17,647,980
(1,081,887)
13,048,543
December 31,
2004
KD
Raw materials
Finished products
Filling and packing materials
Other materials
Goods in transit
Allowance for slow-moving items
2003
KD
12,784,427
5,405,540
3,161,900
4,297,960
942,751
9,018,675
4,078,857
1,633,973
3,625,204
1,090,620
26,592,578
19,447,329
(1,595,278)
24,997,300
(1,303,798)
18,143,531
2 0 0 4
6. OTHER ASSETS
December 31,
Prepaid expenses
Refundable deposits
Accrued income
Other assets
2004
KD
2003
KD
7,525,641
815,651
8,256
1,211,257
6,403,406
644,554
129,648
931,336
9,560,805
8,108,944
7. HELD FOR TRADING INVESTMENTS
Held for trading investments comprise of quoted shares traded in the local market.
8. INVESTMENTS IN ASSOCIATED COMPANIES
December 31,
2004
KD
Heinz - Egypt Company
Gulfa Mineral Water Company
Americana for Agriculture
Development Co.
1,267,082
321,107
1,588,189
9. AVAILABLE FOR SALE INVESTMENTS
2003
KD
Country of
Incorporation
1,100,907
343,476
Egypt
87,125
1,531,508
Egypt
48.99%
32.98%
17%
December 31,
2004
KD
Investments in quoted local shares
Investments in quoted foreign shares
%
ownership
22,931,250
11,841,439
34,772,689
2003
KD
18,653,473
9,067,356
27,720,829
2 0 0 4
10. PROPERT Y, PLANT AND EQUIPMENT
OPERATING,
REFRIGERATING
BUILDINGS
AND AIR-
FURNITURE
AND COLD CONDITIONING
OTHER
AND OFFICE FIXED ASSETS
LAND
DECORATION
STORAGE
EQUIPMENT
VEHICLES
EQUIPMENT
KD
KD
KD
KD
KD
KD
WORK
IN STORAGE IN PROGRESS
KD
KD
TOTAL
KD
Cost
At 1 January 2004
6,360,757
23,186,323
23,889,117
35,295,816
6,367,455
10,450,363
3,359,479
2,231,173
111,140,483
Additions
261,069
2,145,599
2,028,893
5,454,111
1,036,367
1,630,571
3,219,340
5,722,461
21,498,411
Dispos als and transfer s
125,172
258,055
1,086,210
2,137,551
(91,192)
(690,530)
(2,397,510)
(4,371,867)
(3,944,111)
6,746,998
25,589,977
27,004,220
42,887 ,478 7,312,630
11,390,404
4,181,309
3,581,767 128,694,783
At 1 January 2004
-
17,394,191
14,625,245
24,930,894
5,022,011
7,066,158
1,534,367
-
70,572,866
Charge for the ye ar
-
2,535,108
1,449,036
3,456,830
764,369
1,378,679
130,504
-
9,714,526
Dispos als and transfer s
-
(1,360,557)
85,846
(593,619)
(383,315)
(827,159)
283,339
-
(2,795,465)
At 31 December 2004
-
18,568,742
16,160,127
27,794 ,105 5,403,065
7,617,678
1,948,210
-
77,491,927
At 31 December 2004
6,746,998
7,021,235
10,844,093
15,093 ,373 1,909,565
3,772,726
2,233,099
3,581,767
51,202,856
At 31 December 2003
6,360,757
5,792,132
9,263,872
10,364 ,922 1,345,444
3,384,205
1,825,112
2,231,173
40,567,617
At 31 December 2004
Accumulated depreciation
Net book value
The estimated useful lives for the purpose of calculating depreciation are as follows:
Years
Decoration
5
Buildings on leased land (duration of lease) or useful life
10-17
Buildings and structures on free hold land
20-25
Cold rooms
5-13
Operating and refrigerating equipment
4-7
Air-conditioning equipment
4 -10
Vehicles
4
Furniture
5-7
Calculators and cash registers
5-7
Other used fixed assets in storage
5
The current period depreciation includes an amount of KD 8,514,224 (31 December 2003 – KD 7,755,968) which represents
the depreciation of the direct production assets and equipment and is charged to the production cost. The remaining amount
of KD 1,181,532 (31 December 2003-KD 1,040,988) relates to marketing and selling assets and is charged to selling and marketing expenses and an amount of KD 18,770 which is charged to general and administrative expenses (31 December 2003:
KD 21,177).
2 0 0 4
10. PROPERT Y, PLANT AND EQUIPMENT (Continued)
Land as at 31 December consisted of the following:
2004
KD
Land in Kuwait
Land outside Kuwait
3,131,807
3,615,191
6,746,998
2003
KD
3,131,807
3,228,950
6,360,757
Buildings valued at KD 9,745,479 are constructed on leased land (lease periods range from 10 to 17 years).
11. INTANGIBLE ASSETS
FRANCHISES
AND
AGENCIES
KD
KEY MONEY
KD
Cost
At 1 January 2004
Additions
Disposals / transfers
At 31 December 2004
5,494,668
472,299
(610,040)
5,356,927
3,365,955
1,155,889
624,834
5,146,678
8,860,623
1,628,188
14,794
10,503,605
Accumulated amortisation
At 1 January 2004
Amortisation
Disposals / transfers
At 31 December 2004
4,701,208
232,234
(627,652)
4,305,790
2,168,086
295,716
(55,582)
2,408,220
6,869,294
527,950
(683,234)
6,714,010
Net book value
At 31 December 2004
At 31 December 2003
1,051,137
793,460
2,738,458
1,197,869
3,789,595
1,991,329
TOTAL
KD
2 0 0 4
12. ACCOUNTS PAYABLE
December 31,
2004
KD
Trade payables
Other payables
13. ACCRUALS AND OTHER LIABILITIES
13,998,211
16,431,741
30,429,952
12,874,643
9,772,109
22,646,752
December 31,
2004
KD
Accrued expenses and salaries
Provisions and other liabilities
Other credit balances
Kuwait Foundation for the Advancement of Sciences
Deposits payable
Staff penalties fund
Undistributed dividends
Payable to terminated employees
Directors’ remuneration
National Labour Support Tax
2003
KD
7,617,984
9,944,565
8,154,152
238,091
231,835
103,990
211,307
373,551
55,000
354,134
27,284,609
The calculation of KFAS excludes the income of two subsidiaries, which pay KFAS separately.
2003
KD
6,136,849
6,847,994
6,502,476
655,434
194,175
47,241
129,105
331,662
55,000
657,609
21,557,545
2 0 0 4
14. LONG-TERM LOANS
LOAN ORIGINAL
AMOUNT AND BALANCE
BALANCE
KD
CURRENT
PORTION
KD
NON-CURRENT
PORTION
KD
367,500
183,750
183,750
An amount of US$ 4,000,000 wa s withdrawn
fr om the loan va lue and an amount of US$
1,500,000 was sett led in 2002 and the
balanc e is pay able in semi-annual instalments
starting f rom 30 June 2003 to 31 December
2006. This loan was granted against a bank
lett er of guarantee. The annual interes t rate
is (LIBOR + 1%).
2. US $ 5,000,000
(Balance US$ 2,480,000)
729,120
-
729,120
Payab le in 10 semi-annual instalments fr om
30 September 2006 to 31 Mar ch 2011. The
loan is granted aga inst a bank lett er of guarantee and the interest is subsidized by the
Cental Bank of Lebanon.
3. BD 1,000,000
(Balance BD 1,000,000)
778,800
97,350
681,450
Pay able in 8 semi-annual instalments fr om 10
Oc tober 2005 t o 10 Apri l 2009. This loan was
granted aga inst the guarantee of the
Company. The annual interest rate is (BIBOR
+ 0.75%).
4. LE 10,000,000
(Balance LE 6,000,000)
282,000
94,000
188,000
Payab le in 10 semi-annual equal instalments
fr om 31 May 2003 to 30 November 2007. This
loan wa s granted aga inst a bank lett er of
guarantee with annual interes t rate of
(Central Bank of Egypt discount rate
+1.25%).
5. LE 5,000,000
(Balance LE 625,000)
30,222
30,222
-
Payab le in 8 semi-annual instalments f rom 31
December 2001 to 30 June 2005. This loan
wa s granted aga inst a mortgage on a subsidiary ’s assets wit h annual interest rat e of
8.5% + 1.8% commission.
6. LE 5,000,000
181,332
60,444
120,888
June 2004 to 31 Dece mber 2007. This loan
wa s granted aga inst a mortgage on a subsidiary ’s assets wit h annual interest rat e of
7. LE 4,000,000
193,421
48,355
145,066
June 2005 to 31 Dece mber 2008. This loan is
granted against a mortgage on a subsidiary ’s
building wit h annual interest rate of 8.5% +
1.8% commission.
2,562,395
514,121
2,048,274
1. US $ 5,000,000
(Balance US$ 1,250,000)
C/F
TERMS OF REPAYMENT
2 0 0 4
14. LONG-TERM LOANS (CONTINUED)
LOAN ORIGINAL
AMOUNT AND BALANCE
BALANCE
CURRENT
PORTION
NON-CURRENT
PORTION
TERMS OF REPAYMENT
KD
KD
KD
440,673
440,673
-
Pay able in 10 semi-annual instalments fr om
30 June 2001 to 30 Dece mber 2005. This loan
was granted against a bank let ter of guarantee, wit h annual interes t rat e of (Centr al
Bank of Egypt discount rate + 0.9659%).
1,175,000
470,000
705,000
Pay able in 10 semi-annual instalments starting from 25 December 2002 to 25 June 2007.
This loan was granted against a bank letter of
guarantee with annual interest rate of (Central
Bank of Egypt discount ra te + 1.25%).
411,250
164,500
246,750
Pay able i n 8 semi-annual instalments f rom 25
December 2003 to 25 June 2007. This loan
was granted against a bank let ter of guarantee, wit h annual interes t rat e of (Centr al
Bank of Egypt discount rate + 1.25%).
11. LE 100,000,000
(Balance LE 100,000,000)
4,700,000
470,000
4,230,000
Pay able i n 10 semi-annual instalments fr om 1
February 2005 to 1 August 2009. This loan is
granted aga inst a bank letter of guarantee,
wit h annual inter est rate of (Central Ba nk of
Egypt discount rate + 1.25%).
12. LE 50,000,000
2,115,000
470,000
1,645,000
Paya ble in 10 semi-annual instalments fr om
26 Oc tober 2004 to 26 April 2009. This loan
was granted against the guarantee of the
Company, with annual intere st rate of
(Central Bank of Egypt discount ra te + 1.5%).
1,424,284
296,284
1,128,000
Pay able i n 10 semi-annual instalments fr om 1
Februar y 2005 to 1 August 2009. This loan wa s
granted against the guara ntee of the
Company, with annual intere st rate of
(Central Bank of Egypt discount ra te + 1.5%).
118,727
71,727
47,000
Pay able i n 6 semi-annual instalments f rom 30
June 2004 to 31 Dece mber 2006. This loan
was granted against a mortgage on subsidiary ’s building with annual interes t rate of
Balance as at 31 Decem ber 2004
12,947,329
2,897,305
10,050,024
Balance as at 31 Decem ber 2003
6,492,376
1,823,382
4,668,994
8. LE 50,000,000
9. LE 50,000,000
(Balance LE 25,000,000)
10. LE 14,000,000
(Balance LE 45,000,000)
13. LE 30,000,000
(Balance LE 30,000,000)
14. LE 3,000,000
2 0 0 4
15. SHARE CAPITAL
The Extraordinary General Assembly of the shareholders of the Company held on 10 April 2004, approved an
increase in share capital by the issuance of 13,037,465 shares with nominal value of 100 fils each and a
premium of 700 fils. The Ministry of Commerce & Industry approved this increase on 6 November 2004.
Accordingly, the authorised, issued and fully paid-up share capital at 31 December 2004 comprises of
143,412,115 shares of 100 fils each. The Articles of Association of the Company were amended to reflect the
increase in share capital.
16. STATUTORY RESERVE
In accordance with the Commercial Companies’ Law and the Company’s Articles of Association, 10% of net
income is to be transferred to statutory reserve until this reserve reaches a minimum of 50% of share capital.
Distribution of this reserve is limited to the amount required to enable the payment of a dividend of 5% of the
share capital in years when retained earnings are not sufficient for the payment of such dividend.
17. VOLUNTARY RESERVE
In accordance with the Company’s Articles of Association, 10% of net income for the year is to be transferred
to the voluntary reserve. This transfer may be stopped by a resolution adopted by the ordinary assembly as
recommended by the Board of Directors. There are no restrictions on distributions from the voluntary reserve.
The transfer was discontinued in accordance with the ordinary General Assembly decision on 12 April 1999.
18. PROPOSED DIVIDENDS
The Board of Directors proposed a cash dividend of KD 9,749,694 - 70 fils per share for the year ended 31
December 2004 (KD 8,206,156 - 65 fils per share as of 31 December 2003) and an issue of bonus share of 5%
of paid in share capital. This proposal is subject to the approval of the shareholders’ Annual General Assembly.
19. TREASURY SHARES
Number of shares
Percentage of issued shares
Market value
2004
KD
4,130,768
2.88%
6,774,460
2003
KD
4,126,100
3.165%
8,664,810
20. RETAINED EARNINGS
Retained earnings as of 31 December 2004 include an amount of KD 7,970,755 which relates to restatement in
accordance with IAS 39 “Financial Instruments: Recognition and Measurement”.
2 0 0 4
21.STAFF COST
Net income for the year is stated after charging staff and related cost of KD 24,465,167 (31 December 2003:
KD 22,072,277).
22. SALES BY BUSINESS SEGMENT
Sales - 31 December 2004
RETAIL
RESTAURANTS
AND
STORES
KD
131,187,395
109,309,068
WHOLESALE
TRADE
AND
FACTORIES
KD
70,227,988
49,300,343
TOTAL
KD
201,415,383
158,609,411
WHOLE SALE
TRADE
KD
9,419,971
10,511,502
FACTORIES
KD
60,808,017
38,788,841
TOTAL
KD
70,227,988
49,300,343
23. GEOGRAPHICAL CONCENTRATION OF SALES AND NET INCOME
OUTSIDE
KUWAIT
KD
31 December 2004
Sales
INSIDE
KUWAIT
KD
TOTAL
KD
152,714,622
48,700,761
201,415,383
31 December 2003
Sales
15,608,033
7,938,296
23,546,329
112,263,952
46,345,459
158,609,411
12,490,557
8,580,600
21,071,157
2 0 0 4
24. DIRECTORS’ REMUNERATION
The Directors’ remuneration is subject to the approval of the shareholders at the General Assembly
meeting.
25. EARNINGS PER SHARE
Earnings per share are computed by dividing net profit attributable to the shareholders by the weighted
average number of shares outstanding during the year.
The weighted average number of shares outstanding during the year is calculated as follows:
Weighted average number of the Company’s issued and paid-up shares
Weighted average number of the Company’s treasury shares
Weighted average number of the Company’s outstanding shares
Earnings per share
2004
Shares
30,766,486
(4,126,240)
126,640,246
185.93 Fils
2003
Shares
130,374,650
(4,126,100)
126,248,550
166.90 Fils
26. FAIR VALUE
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction. Underlying the definition of fair value is the presumption that the
Company is a going concern without any intention or need to liquidate, curtail materially the scale of its operations or undertake a transaction on adverse terms.
In the opinion of management the estimated fair value of financial assets and financial liabilities as at 31
December 2004 approximated their respective net book values due to their short-term nature. Fair value is estimated by management using the latest financial information available and quoted market prices where available.
27. COMMITMENTS AND CONTINGENT LIABILITIES
Letters of credit
Letters of guarantee
Capital commitments
2004
KD
2,687,868
13,568,667
619,050
16,875,585
2003
KD
1,049,989
9,331,755
377,352
10,759,096
2 0 0 4
28. A) GEOGRAPHICAL CONCENTRATION OF ASSETS AND LIABILITIES AND
At 31 December 2004
SAUDI
SOUTH
KUWAIT
ARABIA
GULF
KD
KD
KD
EGYPT
LEBANON
AND AFRICA AND OTHERS
EFF ECTIVE
TOTAL
KD
KD
KD
INTEREST RATE
ASSETS
Cash and bank balanc es
13,494,726
4,778,296
3,043,338
8,686,716
891,626
30,894,702
Acco unt s rec eivable
5,636,292
2,864,654
3,621,756
5,239,395
285,883
17,647,980
Inventor ies and spa re parts
6,081,273
6,813,615
5,443,892
7,864,333
585,948
26,789,061
976,067
1,807,595
3,407,865
2,902,178
467,100
9,560,805
53,409,812
-
-
-
-
53,409,812
321,107
-
-
1,267,082
-
1,588,189
28,350,105
-
-
6,422,584
-
34,772,689
11,687,960
10,615,468
10,293,901
16,775,496
5,619,626
54,992,451
119,957,342 26,879 ,628
25,810 ,752
49,157,784
Other ass et s
0.125% - 10.25%
Inves tments in associated
companies
Prope rty, plant and equipment
and intangible ass et s
TOTAL ASSETS
7,850,183 229,655 ,689
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY
Due to banks
Loans
Acco unt s payable
1,042,084
233,546
2,786,117
10,193,877
198,073
14,453,697
3.00% - 12.5%
500,000
642,060
1,584,577
11,071,909
1,096,620
14,895,166
2.961% - 12%
13,361,193
4,466,525
4,977,723
6,717,786
906,725
30,429,952
Accruals and other liabilities and provision for end of service indemnity
17,800,612
6,597,370
6,638,499
4,288,317
420,232
35,745,030
276,592
-
629,450
3,117,355
489,168
4,512,565
129,619,279
-
-
-
-
129,619,279
162,599,760 11,939 ,501
16,616 ,366
35,389,244
Minority inter est
Shareholders’ equit y
TOTAL LIABILITIES, MINORITY
INTEREST AND SHAREHOLDERS’
EQUITY
3,110,818 229,655 ,689
2 0 0 4
28.B) GEOGRAPHICAL CONCENTRATION OF ASSETS AND LIABILITIES AND
At 31 December 2003
SAUDI
SOUTH
EGYPT
LEBANON
KUWAIT
ARABIA
GULF
KD
KD
KD
KD
KD
AND AFRICA AND OTHERS
EFFECTIVE
TOTAL
INTEREST RATE
KD
ASSETS
Cash and bank balanc es
17,138,914
5,099,309
1,590,225
3,778,109
733,811
28,340,368 0.0625% - 10.25%
Acco unt s rec eivable
6,420,029
2,539,447
2,378,950
1,608,268
101,849
13,048,543
Inventor ies and spa re parts
5,877,281
5,018,858
4,048,930
4,113,974
473,924
19,532,967
Other ass et s
1,038,456
1,820,459
2,022,404
2,881,697
345,928
8,108,944
25,768,671
-
-
-
-
25,768,671
343,476
-
-
1,188,032
-
1,531,508
25,610,947
-
-
2,109,882
-
27,720,829
10,505,166
8,829,796
8,385,514
9,986,285
4,852,185
42,558,946
92,702,940 23,307 ,869
18,426 ,023
25,666,247
Investments in asso ciated
companies
Prope rty, plant and equipment
and intangible ass et s
TOTAL ASSETS
6,507,697 166,610 ,776
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY
Due to banks
Loans
Acco unt s payable
148,681
267,792
1,750,136
4,505,307
602,847
7,274,763
2.08%-14.30%
-
673,380
38,225
5,904,776
549,375
7,165,756
2.00%-13.57%
10,134,080
3,030,344
3,463,605
5,486,982
531,741
22,646,752
Accruals and other liabilities and provision for end of service indemnity
15,586,228
5,976,412
4,410,245
2,632,851
433,703
29,039,439
275,267
-
541,122
1,595,552
406,234
2,818,175
97,665,891
-
-
-
-
97,665,891
123,810,147
9,947,928
10,203 ,333
20,125,468
Minority inter est
Shareholders’ equit y
TOTAL LIABILITIES, MINORITY
INTEREST AND SHAREHOLDERS’
EQUITY
2,523,900 166,610 ,776
29. FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT
Financial instruments consist of contractual claims on financial assets. Financial instruments include both primary instruments, such as trade accounts receivable and payable, investments, and financial commitments and
derivative financial instruments, which are used to hedge risks arising from changes in foreign exchange rates
and interest rates.
Information on fair value and risk management of these financial instruments is set out below:
2 0 0 4
The Group has only primary financial instruments which are reflected in the consolidated balance sheet. Those
on the asset side are recognised at nominal value less any provisions for impairment, financial instruments constituting liabilities are carried at nominal or redemption value, whichever is higher.
Fair values of the financial assets and liabilities are determined using generally accepted methods. Because no
quoted market prices are available for a significant part of the Group’s financial assets and liabilities, the fair
values of such items have been derived based on management’s assumptions with respect to future economic
conditions, the amount and timing of future cash flows and estimated discount rates. Management believes
that the fair value of all assets and liabilities on the balance sheet is not materially different from their carrying
value.
a) Interest rate risk
Interest rate risk – the possibility that the value of a financial instrument will change due to movements in market rates of interest – applies mainly to receivables and payables with maturities of over one year. The Group
continuously monitors interest rates to mitigate this risk.
b) Credit risk
The Group is exposed to credit risk if counterparties fail to perform as contracted.
The Group’s credit risk is considered to be low as it does not have significant exposure to any individual customer or counterparty. Cash is placed with banks with high credit ratings. Policies and procedures are in place
to perform ongoing credit evaluations of the financial condition of counterparties and customers.
c) Market risk
Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market
prices. The Group manages this risk by investing surplus funds with professional portfolio managers and by
diversifying its investments.
d) Foreign exchange risk
The Group is exposed to the following foreign exchange risks:
i. Transaction risk - the risk of the Group’s commercial cash flows being adversely
affected by a change in exchange rates for foreign currencies against KD; and
ii. Balance sheet risk - the risk of net monetary assets in foreign currencies acquiring a lower value
when translated into KD as a result of currency movements.
The Group’s exposure to balance sheet risk is principally its investment in associated companies and joint
ventures in GCC countries and the Arab world, the Group continuously monitors exchange rate fluctuation
to mitigate this risk.
2 0 0 4
30. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform to the current year’s presentation.
31. SUSBSEQUENT EVENTS
On 29 March 2005, the Board of Directors proposed a 10% increase to share capital of 100 fils per share and a
share premium of 800 fils per share. This increase is subject to the approval of the Extra-ordinary General
Assembly and proper authorities.

kuwait food company (americana) sak

Transcription

Similar documents

Americana Makeover

DeBrand Chocolate Shop Opens in Kuwait

San Francisco Chronicle "Bay Area`s Top 100 Restaurants"

The Board of Directors of Qatar Fuel (WOQOD) is pleased to invite

Teleplan Annual Report 2007 from website

FOL-1-FORMA 2 - Service Alberta

Thursday 20 November - Lycée Français de Koweït

English - Kuwait National Cinema Company

DOMETIC® AMERICANA REFRIGERATORS

1)What is meant by “assimilation”?

special edition - SM Investments

2012 20-IS Definitive Statement

STATEMENT OF RESPONSIBILITY by the board of

Sanofi-Aventis

Annual Report on Form 20-F 2011

Annual Report 2006