RNS Number:4056T
EFG-Hermes Holdings SAE
17 December 2003
EFG-Hermes 1H Earnings Release - 17 December 2003
1H2003 CONSOLIDATED RESULTS AND ANALYSIS
Our total revenues were almost flat at EGP65.3 million in 1H2003. Net profit for
1H2003 was EGP6.4 million, down from EGP7.0 million in 1H2002. Operating
revenues reached EGP50.1 million compared to EGP50.8 million in 1H2002. On a
quarterly basis our operating revenues reached EGP28.4 million in 2Q2003
compared to EGP21.6 million in 1Q2003 and EGP22.4 million in 2Q2002.
Operating Revenues
The contributions of different EFG-Hermes divisions to operating revenue can be
broken down as follows:
EGP million 1H2002 1H2003 2Q2002 2Q2003
Investment Banking & Private Placement 34.3 67.5% 16.7 33.3% 21.3 95.0% 5.1 17.9%
Brokerage - secondary market transactions 5.6 11.1% 12.8 25.5% 2.7 12.0% 9.3 32.9%
Brokerage - placement fees for private placements 3.5 6.8% 2.1 4.2% -5.8 -25.8% 0.1 0.3%
Asset Management 5.1 10.1% 17.8 35.5% 2.5 11.1% 13.9 48.9%
Private Equity 2.3 4.5% 0.7 1.4% 1.7 7.7% 0.0 0.1%
Total 50.8 100% 50.1 100% 22.4 100% 28.4 100%
____________________________________________________________________________________________________________________
The improvement in stock market performance during the second quarter was behind
the rise in our operating revenues in 2Q2003 despite a 51% drop in revenues
derived from investment banking activities, which were affected by the political
and economic turbulence in the region during the first half of the year.
Our brokerage revenues more than doubled, driven by a 24% rise in the company's
volume. Excluding low margin fixed income trading, which accounted for a large
portion of total trading volume in 2002, our net brokerage volume more than
doubled in 1H2003. It is important to note that overall market volume (net of
fixed income trading) increased only by 3%. On the other hand, our market share
has risen from 12% in 1H2002 to 21% in 1H2003. The following table illustrates
the volumes in fixed income and equity brokerage.
EGP million 1Q2002 1Q2003 Growth 2Q2002 2Q2003 Growth 1H2002 1H2003 Growth
Market Volume 9,414 4,181 -56% 8,890 9,324 5% 18,304 13,505 -26%
Bonds Volume 3,475 1,389 -60% 3,653 561 -85% 7,128 1,950 -73%
Market Net of Bonds 5,939 2,792 -53% 5,237 8,763 67% 11,176 11,555 3%
EFG-Hermes Volume 1,866 1,365 -27% 2,613 4,196 61% 4,479 5,561 24%
EFG bonds Volume 1,504 693 -54% 1,371 537 -61% 2,875 1,230 -57%
EFG-Hermes Net of Bonds 362 672 86% 1,242 3,659 195% 1,604 4,331 170%
_________________________________________________________________________________________________________________
Revenues from assets management have witnessed an impressive growth in 1H2003.
Total revenues reached EGP17.8 million in 1H2003 compared to EGP5.1 million in
the same period last year. This was driven by the 22% rise in total assets under
management on the back of the improvement the stock market performance during
the first half.
Operating Costs
Our general and administrative (G&A) expenses increased by 12% to EGP29.5
million. This was due to the hiring of new staff for our regional expansion.
Non-operating Revenues
In 1H2003, we were able to realize gains from the sale of trading investments
and investments in subsidiaries of EGP2.7 million. However this was more than
offset by EGP4.3 million losses incurred from selling available for sale
investments resulting in a net loss from selling investments of EGP1.6 million
compared to a net loss of 3.6 million in 1Q2003.
Interest Expense
Bank interest expense dropped by 11% to EGP24.5 million in 1H2003. This was due
to the partial repayment of some loans and the decrease in bank overdrafts.
Please find attached a copy of 1H2003 consolidated financials and notes. For
further information please contact:
Tarek El Shawarby
Investor Relations
Tel: +202 3360-873
Fax: +202 3361-536
tshawarby@efg-hermes.com
Ramsay Zaki
CFO
ramsay@efg-hermes.com
Hesham Khalil
Assistant to the CFO
hkhalil@efg-hermes.com
EFG - Hermes Holding Company
(Egyptian Joint Stock Company)
Consolidated Financial Statements
&
Review Report Thereon
As Of June 30, 2003
REVIEW REPORT
To The Board Of Directors Of The
EFG - Hermes Holding Company
We have reviewed the accompanying consolidated statement of financial position
of EFG - Hermes Holding Company and Subsidiaries as at June 30, 2003, and the
related consolidated statements of income, changes in equity and cash flows for
the six months then ended. These financial statements are the responsibility of
the company's management. Our responsibility is to issue a report on these
financial statements based on our review.
We conducted our review in accordance with the Egyptian Standard on Auditing
applicable to review engagements. This standard requires that we plan and
perform the review to obtain moderate assurance as to whether the consolidated
financial statements are free of material misstatement. A review is limited
primarily to inquiries of company's personnel and analytical procedures applied
to financial data, and thus provides less assurance than an audit. We have not
performed an audit and, accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying consolidated financial statements do not give a true and
fair view in accordance with the Egyptian Accounting Standards.
Without qualifying our opinion, the company has included an amount of
L.E. 4 723 008 in the revenue for the period ended on June 30,2003, representing
dividend income from one of its investments for 2002. Such dividend was
proposed by the investee's board of directors in March 2003 and approved by the
general assembly in July 2003.
KPMG Hazem Hassan
Cairo, October 9,2003
EFG - Hermes Holding Company
(Egyptian Joint Stock Company)
Consolidated Statement of Financial Position
as of June 30,2003
Note No. 30/6/2003 31/12/2002
LE. LE.
Current Assets
Cash on hand and with banks
Cash on hand 240 816 61 522
Cheques under collection 101 075 5 967 600
Banks - current accounts 19 770 485 23 900 380
Banks - time deposits (5) 69 848 018 161 795 543
L/G's margin 25 100 25 100
______________ ______________
Total cash on hand and with banks 89 985 494 191 750 145
Trading investments 119 911 771 114 551 892
Accounts and notes receivable (net of provision) (8,16) 216 065 467 245 036 139
Debtors and other debit balances (6, 16) 215 603 935 189 129 203
Other brokerage companies- Misr Clearance Co. 2 452 110 9 254 010
______________ ______________
Total current assets 644 018 777 749 721 389
______________ ______________
Long Term Assets
Fixed assets (net) (9) 23 380 538 25 120 273
Available -for- sale investments (10) 429 559 213 464 952 083
Investments in associates (11) 3 500 000 4 625 000
Held - to - maturity investments (Arab Bank Bonds) 501 500 501 500
Settlement Guarantee Fund 10 342 550 6 667 685
Deferred expenditure (net) 1 584 224 1 821 088
______________ ______________
Total Long Term Assets 468 868 025 503 687 629
______________ ______________
Total assets 1 112 886 802 1 253 409 018
______________ ______________
Current Liabilities
Banks - overdraft 265 407 317 283 265 023
Accounts receivable - credit balances 49 259 120 185 592 574
Creditors and other credit balances (7) 17 315 270 17 987 614
Provisions (8) 12 648 555 12 013 555
______________ ______________
Total current liabilities 344 630 262 498 858 766
______________ ______________
Shareholders' equity
Paid - in capital (13) 205 370 050 205 370 050
Legal reserve 104 184 913 104 399 917
General reserve 158 271 158 271
Special reserve - share issuance premium 183 376 983 183 376 983
Special reserve - revaluation differences ( 463 308) 7 322 222
Retained earnings 118 805 828 98 985 059
______________ ______________
Shareholders' equity 611 432 737 599 612 502
Net profit for the period/year 6 317 642 14 928 536
______________ ______________
Total shareholders' equity including net profit 617 750 379 614 541 038
Minority interest 114 693 627 077
______________ ______________
Total shareholders' equity and minority interest 617 865 072 615 168 115
Long term liabilities
Long term loans (14) 150 391 468 139 382 137
______________ ______________
Total shareholders' equity and long term liabilities 1 112 886 802 1 253 409 018
______________ ______________
The accompanying notes from No. (1) to No. (17) form an integral part of the
financial statements and are to be read therewith .
Chairman & Managing Director Review Report "Attached"
KPMG Hazem Hassan
Public Accountants & Consultants
EFG - Hermes Holding Company
(Egyptian Joint Stock Company)
Consolidated Income Statement
for the financial period ended June 30, 2003
For the financial For the financial
Note period ended period ended
No. 30/6/2003 30/6/2002
L.E. L.E.
Income from fees, commission and managing investments 50 061 147 50 807 167
Interest earned on time deposits 3 372 705 4 323 582
Bonds interest 168 763 719 121
Dividend income 6 083 460 2 931 671
Unrealized gains (losses) on trading investments 2 015 011 (535 076)
Gains (losses) from selling fixed assets 6 421 (2 878)
Other income (16) 3 478 040 6 796 574
______________ ______________
Total revenues 65 185 547 65 040 161
______________ ______________
Less:
General administrative expenses 29 478 187 26 246 065
Bank interest 24 478 434 27 489 306
Losses (gains) from selling investments 1 565 228 (468 324)
Provisions 635 000 869 687
Fixed assets depreciation (9) 1 696 443 1 765 950
Deferred expenditure amortization 236 864 191 809
Currency differences losses 776 477 1 995 754
______________ ______________
Total expenses 58 866 633 58 090 247
______________ ______________
Net profit before minority interest 6 318 914 6 949 914
Minority interest (1 272) 94 074
______________ ______________
Net profit for the period 6 317 642 7 043 988
______________ ______________
The accompanying notes from No. (1) to No. (17) form an integral part of the
financial statements and are to be read therewith.
EFG - Hermes Holding Company
(Egyptian Joint Stock Company)
Consolidated Statement of Changes in Equity
For the financial period ended June 30, 2003
Share Legal General Special Reserve Special Retained Total
Capital Reserve Reserve share issuance Reserve Earnings
premium Revaluation
Differences
L.E. L.E. L.E. L.E. L.E. L.E. L.E.
Balance as at 1/1/2002 205 370 050 104 119 873 158 271 183 376 983 - 105 905 118 598 930 295
Special reserve
- revaluation differences - - - - 7 322 222 - 7 322 222
Transfer to reserves - 280 044 - - - (6 920 059) (6 640 015)
____________ ____________ ________ ___________ __________ ____________ ____________
Balance as at 31/12/2002 205 370 050 104 399 917 158 271 183 376 983 7 322 222 98 985 059 599 612 502
Special reserve
- revaluation differences - - - - (7 785 530) - (7 785 530)
Transfer to reserves - ( 215 004) - - - 19 820 769 19 605 765
____________ ____________ ________ ___________ __________ ____________ ____________
Balance as at 30/6/2003 205 370 050 104 184 913 158 271 183 376 983 (463 308) 118 805 828 611 432 737
____________ ____________ ________ ___________ __________ ____________ ____________
The accompanying notes from No. (1) to No. (17) form an integral part of the
financial statements and are to be read therewith.
EFG - Hermes Holding Company
(Egyptian Joint Stock Company)
Consolidated Statement of Cash Flow
For the financial period ended June 30, 2003
30/6/2003 30/6/2002
L.E. L.E.
Cash Flows from Operating Activities
Net profit for the period before minority interest 6 318 914 6 949 914
Adjustments to reconcile net profit to net
cash provided by operating activities
Fixed assets depreciation 1 696 443 1 765 950
Provisions 635 000 869 687
Amount used from provision - (29 687)
Available -for-sale investment's revaluation
differences (715) 320
Deferred expenditures amortization 236 864 191 809
(Gains) losses from selling fixed assets (6 421) 2 878
Gains from selling trading investments (2 385 227) -
Gains from selling investment in subsidiaries (339 833) -
Income from investment in subsidiaries (9 126 164) -
Losses from selling available -for- sale
investments 4 290 288 -
Unrealized (gains) losses on trading investments (2 015 011) 535 076
Foreign currency translation differences 629 634 -
_____________ __________
Operating profit before changes in working
capital (66 228) 10 285 947
(Increase) decrease in debtors & other debit
balances (27 479 154) 10 558 778
Increase (decrease) in creditors and other
credit balances 93 737 (2 472 551)
Decrease (increase) in accounts receivable
-(debit balances) 29 034 599 (30 406 650)
Decrease in accounts receivable - credit balances (136 333 454) (60 844 764)
Decrease (increase) in affiliated companies
(debit balances) 27 246 146 (21 757 501)
(Decrease) increase in affiliated companies
(credit balances) (36 290 522) 20 087 801
Decrease in other brokerage companies -
Misr Clearance 6 801 900 19 217 568
Decrease in trading investments 1 570 284 2 754 418
_____________ __________
Net cash used in operating activities (135 422 692) (52 576 954)
_____________ __________
Cash Flows from Investing Activities
Fixed assets purchases (148 266) (285 315)
Proceeds from sale of fixed assets 198 378 110 121
Purchases of available -for- sale investments (1 157 698 252) (23 911 721)
Purchases of investments in associates and
subsidiaries (2 815 000) (1 077 500)
Proceeds from redemption & selling
available -for- sale investments 1 193 374 813 22 128 544
Proceeds from sale of investments in
subsidiaries 5 704 833 -
Proceeds from redemption of company's share
in Settlement Guarantee Fund - 145 110
Payment to increase the company's share in
Settlement Guarantee Fund (3 674 865) (1 193 628)
_____________ __________
Net cash provided from (used in) investing
activities 34 941 641 (4 084 389)
_____________ __________
Cash Flows from Financing Activities
Increase in paid - in capital 3 000 000 1 000 000
Increase in retained earnings 23 796 946 6 966 000
Paid dividends (21 257 006) (7 549 407)
(Decrease) increase in banks - overdraft (17 832 871) 74 409 661
Increase (decrease) in long term loans 11 009 331 (18 770 664)
Decrease in short term loans - (1 558 680)
_____________ __________
Net cash provided from financing activities (1 283 600) 54 496 910
_____________ __________
Net change during the period (101 764 651) (2 164 433)
Cash and cash equivalent at the beg. of the
period 191 750 145 102 420 383
_____________ __________
Cash and cash equivalent at the end of the
period 89 985 494 100 255 950
============= ==========
The accompanying notes from No. (1) to No. (17) form an integral part of the
financial statements and are to be read therewith.
EFG - Hermes Holding Company
(Egyptian Joint Stock Company)
Notes to the Consolidated Financial Statements
for the financial period ended June 30, 2003
1. Purpose of Preparation
The consolidated financial statements and accompanying notes were
prepared for the purpose of submitting them to the London Stock
Exchange as one of the requirements of Global Depositary shares (GDS).
2. General
- EFG - Hermes Holding Company -Egyptian Joint Stock Company- was
founded in pursuance of decree No. 106 of 1984.
- The company's extraordinary general meeting held on July 22, 1997
resolved to adjust the company's status and convert it in
pursuance to the provisions of law No. 95/1992 and its executive
regulation and amend the company's purpose to become participation
in the companies establishment which issue securities or in
increasing their share capitals.
- EFG- Hermes holding company, the parent company, owns the
following subsidiaries:
Direct Indirect
ownership ownership
% %
Financial Brokerage Group (FBG) 99.76 0.04
Egyptian Fund Management Group (EFMG) 84.23 11.49
Egyptian Portfolio Management Group (EPMG) 66.33 33.34
Hermes Securities Brokerage 97.58 2.42
Hermes Fund Management 89.95 10.05
Hermes Corporate Finance * 100 -
EFG- Hermes Advisory Inc. 100 -
Hermes Financial Management (Egypt) Ltd. 100 -
EFG- Hermes for Promoting & Underwriting 99.67 -
Bayonne Enterprises Ltd. -- 100
EFG -Hermes & Hermes Ltd. -- 100
EFG- Hermes (UK) Limited -- 100
EFG- Hermes Fixed Income 99 1
EFG- Hermes Private Equity 96.3 3.7
* The parent company purchased .5 % of the shares in Hermes Corporate
Finance Co. through irrevocable sales contracts. The transfer of
title was not executed due to a restriction on the transfer of the
shares. The transfer of title of the shares will be executed when
the restrictions on the transfer of shares are lifted, however for
accounting purposes the HCF Company was consolidated as a
subsidiary as it is demonstrated that the parent has effective
control over these shares.
3. Significant Accounting Policies Applied
The significant accounting policies adopted in the preparation of
these consolidated financial statements are set out below:
3-1 Basis of Preparation of Financial Statements
The financial statements were prepared in accordance with
Egyptian Accounting Standards, and applicable local laws and
regulations.
3-2 Principles of Consolidation
The consolidated financial statements include all subsidiaries
that are controlled by the parent company. The basis of the
consolidation are as follows:
- All intragroup balances and transactions are eliminated.
- Minority interest, in the equity and results of the entities
that are controlled by the parent company , is shown as a
separate item in the consolidated financial statements.
- The cost of acquisition is allocated as follows:
a) The fair value of the assets and liabilities acquired
as of the date of the exchange to the extent of the
parent's interest obtained in the exchange, and
b) The minority's proportion of the pre-acquisition
carrying amounts of the assets and liabilities of the
subsidiary.
3-3 Foreign Currencies Transactions
- The company maintains its accounts in Egyptian Pounds.
Transactions denominated in foreign currencies are recorded
at the prevailing exchange rate at the dates of
transactions.
Balances of monetary assets and liabilities denominated in
foreign currency at the balance sheet are translated at the
prevailing exchange rates. The exchange differences are
recorded in the income statement.
- Assets and liabilities of financial statements for foreign
companies were translated using the prevailing exchange
rates on the financial position date, shareholders' equity
items are translated using historical rates, while
revenues and expenses were translated using an average of
the prevailing rates during the financial year. The
resulted translation differences were included within the
shareholders' equity in the statement of financial position
as a special reserve- foreign currency translation
differences.
3-4 Fixed Assets Depreciation
Fixed assets are recorded at the historical cost and are
depreciated by the straight line method over the estimated
productive life for each type of asset at the following:
Useful Life
- Building 33.3 Years
- Office furniture & electrical appliances 5-16.67 Years
- Vehicles 3.33 - 4 Years
- Computer equipment 3.33 - 5 Years
3-5 Amortization of deferred expenditure
The cost of obtaining long term loans is capitalized and
amortized over the loan period (Note No. 14).
3-6 Trading Investments
Trading investments are valued on the basis of prevailing market
value at the balance sheet date and the revaluation differences
are recorded in the income statement.
3-7 Investments in Associates
Investments in associates are valued at cost. However, when
there is an impairment in the market or computed value of the
investments compared to book value, the book value should be
adjusted with the impairment value and charge the impairment to
the income statement.
3-8 Available -for- sale Investment
- Available -for- sale investments are recorded at cost.
Actively quoted investments are revalued at cost or market
value whichever is lower and non quoted investments are
valued at cost or computed value of the investments
(based on latest certified financial statements) whichever is
lower and the resulting decline in value is charged to income
statement.
- Concerning the nonactive available -for- sale securities
(don't have quoted market price in an active market) and
whose fair value can not be reliably measured, such
investments are recognized at cost. However, when there
is an impairment in the market or computed value of the
investments compared to book value, the book value is
adjusted with impairment value and charge the impairment to
the income statement.
3-9 Held -to -Maturity Investments (Bonds)
Held - to- Maturity investments (Bonds) are recorded at cost.
However, when there is an impairment in value of these
investments, it charged to the income statement.
3-10 Taxation
- A tax provision has been formed to meet tax obligations
based on detailed studies for each claim.
- Due to the nature of the Egyptian tax laws and
legislations, applying the principles of the deferred taxes
according to the International Accounting Standard "taxes
on Income" will not usually result in material deferred tax
liabilities. Further, if this application results in a
deferred tax assets, it will be recognized in the financial
statements whenever there is a sufficient comfort that
these assets will be realised in the foreseeable future.
3-11 Cash Flow Statement
For the purpose of preparing the Cash Flow Statement, cash and
cash equivalent are represented in the cash on hand, cheques
under collection, current accounts & time deposits with banks
and L/G's margin.
4. Financial Instruments and management of related risks:
The Company's financial instruments are represented in the financial
assets and liabilities. Financial assets include cash balances with
banks, investments and debtors while financial liabilities include
banks - overdraft and creditors. Note (No. 3) of notes to financial
statements includes significant accounting policies applied regarding
basis of recognition and measurement of the important financial
instruments and related revenues and expenses by the company to
minimize the consequences of such risks.
4/1 Market Risk:
Market risk is represented in the factors which affect values,
earnings and profits of all securities negotiated in stock
exchange or affect the value, earning and profit of a
particular security.
According to the company's investment policy, the following
procedures are undertaken to reduce the effect of this risk.
- Performing the necessary studies before investment decision
in order to verify that investment is made in potential
securities.
- Diversification of investments in different sectors and
industries.
- Performing continuous studies required to follow up the
company's investments and their development.
4/2 Foreign currency risk
The foreign currency exchange risk represents the risk of
fluctuation in exchange rates, which in turn affects the
company's cash inflows and outflows as well as the value of its
foreign currency assets and liabilities. As of the date of the
balance sheet the company has foreign currency assets and
liabilities equivalent to L.E. 233 421 447 and
L.E. 261 874 714 respectively.
The company's net exposure in foreign currencies are as
follows:
Surplus/ (Deficit)
L.E.
U.S. Dollar 66 161 821
Euro (94 615 088)
- As disclosed in note 3-3, the company has used the
prevailing exchange rates to revaluate monetary assets and
liabilities at the balance sheet date.
- As disclosed in note no. (15) the company has executed SWAP
agreements to cover its deficit and required needs of
foreign currencies and meet the risks of exchange and
interest rates related thereto.
4/3 Financial Instruments Fair Value
The financial instruments fair value do not substantially
deviated from their book value at the balance sheet date.
According to the valuation basis applied, in accounting
policies to the assets and liabilities, which included in the
notes to the financial statements, note No. 10, 11 of the notes
to financial statements disclose the fair values of
investments, which are, reported at cost.
5. Banks - time deposits
The Banks - time deposits item includes an amount of LE 68 707 039
as blocked deposits to guarantee the facilities granted by the Banks to
the subsidiary company (Financial Brokerage Group) under the
guarantee of the parent company- EFG - Hermes Holding Company.
6. Debtors and Other Debit Balances
30/06/2003 31/12/2002
L.E. L.E
Deposits with others 232 734 238 128
Prepayments to suppliers 332 569 316 569
Prepaid expenses 1 288 738 1 019 992
Employees advances 529 931 465 681
Accrued revenues 23 552 226 4 499 483
Taxes withheld by others 2 270 834 2 016 857
Commercial International Investment
Company (CIIC) * 53 000 000 53 000 000
Commercial International Investment
Company (CIIC) - other 44 464 541 28 999 322
El Mansour & El Maghraby for
Investment And Development Company * 45 000 000 45 000 000
Eiad Mazhar Saleh Malas * 2 000 000 2 000 000
Unrealized swap gains 390 176 18 489 442
Downpayment to purchase investments ** 15 721 300 13 571 600
Sundry debtors 26 820 886 19 512 129
___________ ___________
215 603 935 189 129 203
=========== ===========
* The balances represent payments to fully purchase of the capital
shares of Fleming CIIC- Holding. (Note No. 16). The required
procedures to carry out the transaction in the Stock Exchange are
under processing.
** The balance represents downpayment to purchase 75% of Financial
Transaction House (FTH) capital shares.
7. Creditors and Other Credit Balances
30/06/2003 31/12/2002
L.E. L.E
Tax Authority 9 000 508 10 016 261
Social Insurance Association 113 345 117 008
Suppliers 1 360 000 1 360 000
Accrued expenses 3 023 461 2 790 734
Unearned revenues 37 166 77 755
Accrued interest 1 988 171 1 927 763
Sundry creditors 1 792 619 1 698 093
__________ __________
17 315 270 17 987 614
========== ==========
8. Provisions
Contingent
Provision for Liability Severance Tax claims
doubtful debts provision pay provision provision
L.E L.E L.E L.E
Balance as at 1/1/2003 2 454 247 11 839 166 52 219 122 170
Formed during the period -- 635 000 -- --
____________ __________ _____________ _________
Balance as at 30/6/2003 * 2 454 247 12 474 166 52 219 122 170
============ ========== ============= =========
* It is deducted from accounts receivable item in the balance sheet.
9. Fixed Assets
Office Furniture,
equipment &
Electrical Computer
Particulars Land Building Appliances Equipment Vehicles Total
LE LE LE LE LE LE
Balance as at 1/1/2003 5 360 000 13 685 823 11 254 837 7 259 989 1 683 691 39 244 340
Additions during the period -- -- 43 443 79 515 25 308 148 266
Disposals during the period -- -- (30 868) -- (265 000) (295 868)
_________ __________ __________ _________ _________ __________
Total cost as at 30/ 6/2003 5 360 000 13 685 823 11 267 412 7 339 504 1 443 999 39 096 738
_________ __________ __________ _________ _________ __________
Accumulated depreciation as
at 1/1/2003 -- 1 519 771 6 397 268 5 216 800 989 827 14 123 666
Depreciation during the period -- 205 287 794 674 548 690 147 792 1 696 443
Disposals accumulated
depreciation -- -- (26 297) -- (77 612) (103 909)
_________ __________ __________ _________ _________ __________
Accumulated depreciation as
at 30/6/2003 -- 1 725 058 7 165 645 5 765 490 1 060 007 15 716 200
_________ __________ __________ _________ _________ __________
Net cost as at 30/6/2003 5 360 000 11 960 765 4 101 767 1 574 014 383 992 23 380 538
========= ========== ========== ========= ========= ==========
10. Available - for- sale investments
30/06/2003 31/12/2002
L.E. L.E
Quoted investments 176 452 500 174 824 369
Non - quoted investments 253 106 713 290 127 714
___________ ___________
429 559 213 464 952 083
=========== ===========
- The market value of the quoted investments amounted to
L.E 100 166 190 on June 30 ,2003 versus L.E. 151 122 748 on
December 31,2002.
11. Investments in associates
Investments in associates companies represent the value of the
non-quoted investments amounted to LE. 3 500 000 as at June 30,2003
versus L.E. 4 625 000 as at December 31,2002.
12. European Investment Bank Contract:
According to the contract signed between EFG- Hermes - Holding Company
and the European Investment Bank dated March 1, 2001, EFG- Hermes
Holding Company purchases investments in its name in favor of the bank
in a range of 5 Million Euro for each investment. The total amount of
these investments is limited to 25 Million Euro and the participation
of European Investment Bank is limited to 50% of total investment.
This contract is valid until August 30, 2013. The European Investment
Bank pays the value of these investments. The proceeds is reported as
a liability to the company versus the investments reported as an asset.
An off-setting is made between the asset and liability at the balance
sheet date. The investments purchased according to this contract
amounted to LE 38 507 298 (the equivalent amount of Euro 10 601 054)
which are as follows:
Balance as of
30/06/2003 31/12/2002
L.E. L.E.
Gas & Energy Group Limited 8 104 041 8 104 041
Founoon Holding Co. (BVI) 16 984 000 16 984 000
Commercial International Investments
Company (CIIC) 13 419 257 13 419 257
__________ __________
38 507 298 38 507 298
========== ==========
13. Capital
- The company's issued and paid - in capital LE 205 370 050
distributing into 41 074 010 shares of par value L.E. 5 per share.
- The company's extraordinary general assembly approved in its
session held on August 28, 2003 to increase the company's
authorized capital from LE. 200 Million to LE. 700 Million.
14. Long term loans
- A loan contract has been signed on March 28,2001 between EFG-
Hermes Holding Company and International Finance Corporation (IFC),
this contract provides for that EFG- Hermes Holding borrows a long
term loan amounting to USD 30 Million for five years ending on
May 31,2006 with two years grace year and annual floating interest
rate over Libor based on the return on equity.
This loan will be used in financing the company's expansions in the
Middle East and North Africa besides new activities. According to
the loan contract the company has received the first installment
amounting to US$ 15 Million on May 15, 2001.
The loan principle is payable on 7 semi annual installments
amounted to US$ 4 285 700 each. Starting from May 15,2003 and
interest will be due semi annually on 15 May and 15 November, the
first interest is due on 15 November 2001.
The loan contract stipulated to provide the following guarantees.
- An irrevocable power of attorney from the Borrower and the
borrower's subsidiaries to IFC enabling IFC to create at will (a) a
first - ranking real estate mortgage over the land and the building
owned by Financial Brokerage Group S.A.E. (subsidiary of 99.76
share percentage) at 58 El Tahrir Street, Dokki - Giza, Arab
Republic of Egypt and (b) a first - ranking commercial mortgage on
the tangible and intangible assets of the Borrower and Borrower's
subsidiaries. Including such asset as may be acquired after the
signature of this agreement;
- An irrevocable and unconditional guarantee by the Egyptian
guarantors and EFG- Hermes Advisory Inc. in a form acceptable to
IFC for the benefit of IFC, payable on first demand by IFC to
guarantee the Borrower's payment obligations to IFC under this
agreement;
- A pledge of the shares that the Borrower holds in Egyptian
Portfolio Management Group S.A.E. to IFC (with par value of LE.
1 990 000).
On March 13, 2002, the company paid an amount of US$ 4 144 630 to the
IFC as a partial repayment of the loan. As will as, on May 15, 2003,
the company has paid an amount of US$ 1 550 762. Accordingly, the loan
balance amounted to US 9 304 607 (Equivalent amount of 56 478 968 LE.).
- On January 4,2002, a loan contract has been signed between EFG -
Hermes Holding Company and the Foundation of (DEG)- DEUTSCHE
INVESTITIONS- UND ENTWICKLUNGSGESELLSCHAFT MBH. The said contract
provides for that EFG- Hermes Holding Company borrows a long term
loan with amount of EURO 15 Million with an applied annual floating
interest rate. The loan principle is to be repaid on 12 semi
annual installments of 1 250 000 Euro each. The first installment
will due on May 15, 2003 and the loan interest is due semi annually
on 15 May, and 15 November, The company is committed to render some
guarantees to the lender as stipulated by the contract. On
July 4, 2002 the company has received an amount of EURO 10 420 000,
and Euro 4 580 000 on December 24,2002 representing the full amount
of the mentioned loan.
On May 15,2003, the company has paid an amount of Euro 1 250 000 to
DEG as a partial payment of the loan. Accordingly, the loan
balance amounted Euro 13 750 000 (Equivalent amount of 93 912 500
LE).
15. Contingent Liabilities and Commitments
- The Holding Company undertakes the credit facilities granted from
the banks to its subsidiaries - Financial Brokerage Group and
Hermes Securities Brokerage.
- The company has executed SWAP contracts with some Banks which will
be settled according to specific rates for the foreign currencies
implied in such contracts. The mentioned contracts are as follows:
Transaction Transaction Amount currency Expiry Date
date operation
01/04/2003 Selling USD 9 Million L.E 02/07/2003
12/06/2003 Selling Euro 10.3 Million L.E 10/07/2003
26/06/2003 Selling USD 2.7 Million L.E. 03/07/2003
16. Related Party Transactions
- Other debit balances (Note No.6) include an aggregate balances of
LE. 100 Million paid to Commercial International Investment Company
(CIIC), El Mansour and El Maghraby for Investment and Development
and Eiad Malas (who participated in the share capital of EFG-Hermes
Holding Company with percentages of 32.8% , 6.8% and 0.3%
respectively) under the account of purchasing all the shares of
Fleming CIIC - Holdings and also include an amount of
L.E. 44 464 541 due from Commercial International Investment
Company (CIIC).
- Other income item includes an amount of LE. 3 465 218 represents
the consulting fees provided by the company during the financial
period to Commercial International Investment Company (CIIC) -
Note No. (6)
17. Comparative figures
Certain comparative figures have been reclassified to conform with the
current period classification.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFFAFILDLIV
