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Sige social : 29, Avenue de la Porte-Neuve
N de registre de commerce : B 16.453
Les comptes annuels CONSOLIDES au 31 dcembre 2011
ont t dposs au registre de commerce des socits.
Pour mention aux fins de publication au Mmorial, Recueil Spcial des Socits et
Registre de Commerce et des Socits
B16453 - L140154891
dpos le 29/08/2014
Registre de Commerce et des Socits
B16453 - L140154891
enregistr et dpos le 29/08/2014
British Virgin Islands
United States of America
United Kingdom
Hong Kong
General Mediterranean Holding SA SPF.
Founded in LuxemboUl'g in 1979, the General Merliterranean Holding Gl'OU)l now opemtes as a Socit de Gelltion de
Patrimoine Familial (SPF) through 130 diverse entities anel associate companies located in 24 countries. The
compallies in the Group directly and cmploy sorne 10,000 personnel. The paid U)l capital of the Company is
350 million with total consolidated assets standing at 2.1 billion.
Each company fUHctions with its own board and management which are encouraged ta bll successful within
a cOl'porate governance frameWOl'k defined by the holding company which sets standal'ds for cthical and financial
performance, risk management, health, safety and staff welfare and community and environmental mottets.
The investments of the Group are facused on:
Finance & InvestmentActivities Real Estate &Construction' Hoaptality &Leisure Hcalthcal'C & Phal'l11accuticals
Power Generation' Tl'ading Sheet Metal Fabrication' TV Broadeasting and New Media.
The Group'!; on-going business objective remains low-risk controlled growth building on the strength and span of its
international investments but adhering ta stl'ingent criteria. The Group is incl'eu(;ingly discerning in the selection of
its investments and whilst new opportunities are considel'ed to enhance the vfll\lc of the Company, under the cUI'rent
global economic conditions, the lmmediate focus Is on consolidation and completing the projects in hand in order to
optimise the return on their investments. The General Mediterranean Group l"espects the value of its personnel who
not only lInderpin but also enhancc productivity and optima) returns. The Company's uthos is longtel'm, ethical
relationships aeroas its global netwol'k and, in constantly try:ing ta serve the wider community and expand its
llctivities; it strivea alwllYs to enhance the value of stllkeholdel' invcstment.
Chah'man & Chief Executive
Deputy Chnirman
Other Board Memberll
Secretary to the Board
Country of Incorporation
Date oC Incorporation
Registered Number
Registered Office
Nadhmi S Auchi
Nasir Abid
Sir Anthony Jolliffe
Abdul HamAl Majali
Jacques Santer
Et. Hon. Lord Steel ofAikwood
Marc Verwilghen
Arif Husnin
Grand Duchy of Luxembourg
16 Januw:y 1979
Centre Financier
29, avenUe de la Porte Neuve
L - 2227, Luxembourg
For the year ended 31 December 201 )
Cost of sales
Net operating expenses
Exchange (loss)/gain
(Loss)/profit on sale of current aBset inveatmentB
Revaluation of current naset investmentB
Revaluation of investment propel-ties
Profit on sale ofproperty, plant and equipment
OUler incorne
Provisions on trade receivables and other current assets
Impairment of non-current investment
2011 2010
('000 ('000
As restated
153,598 148,429
67,053 72,296
86,545 76,133
(73,703) (72,956)
<l,300) 44,129
(19,715) 2,886
(14,118) (5,901)
23,400 (97)
4,734 2,546
79 2,897
(12,785) (1,051)
Finance income 6 3,382 9,362
Finance costs 6 (13,178) (12,706)
Share of profits less los8es of associate companies 10 11,999 ,494)
Tax expense 7 (3,504) (7,229)
BEFORE OTHERCOMPREHENSIVE INCOME - carried forward (8,164) 3,793
For the year ended 31 December 2011
2011 2010
As restated
(8,164) 3,793
Revaluation of freehold propertics
Revaluation of availablc for sale investments
Exchllnge gains/(Illsses) arising on translation of foreign operations
Tax relating to components of other comprehensive incorne:
Revaluation of Crechold llnd investment properties
(Loss)/Profit fol' the year attl'ibutable to:
Owners of the parent
Non-controlling intercsta
Total comprehensive incorne attlibutable to:
Ownera of the parent
NOlrcontrolling intereata
117,539 45,523
1,385 Cl,93D)
3,416 Cl,655)
(7,392) (12,029)
114,948 29,909
106,783 33,702
(6,941) 1,586
(1,224) 2,207
(8,164) 3,793
103,162 9,828
3,621 23,874
106,783 33,702
At 31 Decelllbel' 2011
Propcrly, plant and c1luipmcnt
Invcstment Pl'0pcl,tics
Invcstmcnts in 8S8ociates
Available fol' sale - fin oncial assets nOll"current nssets
Trade and other receivables
Othel' financialo8sets at FVTPL
Cash amI cash equivalents
Total current assets
2011 2011 2010 2010
t'OOO ('000 ('000 f'OOO
As rcstoted
1.451,525 1,342,579
182,5:14 159,134
133,648 136,378
58.885 10B,893
- --
1,826,592 1.746,984
42,942 22.142
176,684 220.565
82,850 113,852
25,294 29,357
327,770 385,916
2,154,452 2,132,900
10nns and borrowings
Deferred tax
Total non-enrrent liabilities
Trade and other payables
100ns and borl'owinga
l'otnl current liabilities
220,366 .
Share capital 20
Revahllltion reserves
Cumulative translation reserve
Retainec1 eal'llings
Legal reaerve
350,000 350,000
611,412 504,725
(228,544) (231,960)
339,865 350,138
65,188 61,856
1,137,921 1,034,759
157,806 164.185
1,295,727 1,188,944
For the year ended 31 December 2011
2011 2011 2010 2010
('000 'OOo ('000 ('000
NET o.,OSS) JPROFIT FOR THE YEAR (8,164) 3,793
Adjustments fOl':
Depreciation of])roperty, plant & equipment 17,165 18,030
Share oflosses/(profits) of associates (11,999) 1,494
Exchange (gain)IJoss 1,300 (44,129)
Profit on sale of non-current assets (4,734) (2,546)
Finance income (3,382) (9,362)
Finance costs 13,178 12,706
Incorne tax expenS6 3,504 7,229
Change in fair value of investment property (23,400) 97
Impairment ofnon'current investrnent 32,726
(8,368) 16,245
WORl{lNG CAPITAL CHANGES (16,532) 20,038
Increase in inventories (25,315) (8,626)
Decrease/(increase) in receivables 43,881 (2,323)
(Decrease)/incrcase in payables (122,864) 24,715
Exchange rnovement l'elating to working capital 1,921. (8,675)
Income tax paid (3,681) (4,905)
(106,058) 186
Finance incorne 3,382 9,362
Purchase ofproperty, plant and equipment (7,784) (28,149)
Proceeds from sales ofpl'opel'ty, plant and equipment 12,206 10,990
Proceeds from sales ofinvestment property 3,430
Pm'chase ofnon-current financial RSBCts (2,467) (753)
OccrcRBe in other financial assets at FV'l'PL 31,002 10,976
Purchase and disposaI of investment in 3SBociates 17,304 (4,668)
Proceeds from sales of non-current financial aSBets 53,861 68
AND INVESTING ACTMTIES - cBJ'riedfOl'wmd (15,086) 21,470
~ r the year ended 31 December 2011 (colJtinued)
2011 2011 2010 2010
AND Il\'VESTING ACTIVITlES - hl'OUg})! fOJ'wlJJ'd (15,086) 21,470
Increase in luans 45,629 55,305
Finance custs (13,178) (12,706)
Cash at bank 29,357 30,728
Bank ovcrdrafts (16,200) (67,193)
Effects of exchange rate changes (16,516) (14,447)
(3,359) (50,912)
Cash and cash equivalents st the end of the year comprise:
Cash at bank 25,294 29,357
Bank overdrafts (11,288) <l6,200)
For the year ended 31 December 2011
Share Revaluation Cumulative Retained Lel<ttl Total Non-controlling Total
capital reserve translation earmngs reserve shareholders' interest equity
reserve equity
('000 ('000 ('000 ('000 ('DaO ('000 ('000 ('000
At 31 December 2009 350,000 494,828 (230,305) 387,944 33,809 1,036,276 176,103 1,212,379
(11,345) (11,345) 11,345
At 31 December 2009, as restated 350,000 494,828 (230,305) 376,599 33,809 1,024,931 187,448 1,212,379
Revaluation of noncurrent
Financial assets (l,930) (l,930) (1,930)
Revaluation of freehold properties 23,856 23,856 21,667 45,523
Deferred tax on revalued properties (12,029) (12,029) (12,029)
Currency translation differences
(1,655) (1,655) (l,655)
--- --- --- --- -
Other comprehensive incorne 9,897 (1,655) 8,242 21,667 29,909
Profit/Hoss) for the year - 3,020 3,020 773 3,793
Restatement ,434) (1,434) 1,434
--- -
Total comprehensive incorne for the year 9,897 1,586
9,828 23,874 33,702
Transfer to legal reserve
. .
(28,047) 28,047 (57,137)
At 31 December 2010, as restated 350,000 504,725 (231,960) 350,138 61,856 1,034,759 154,185 1.188,944
Revaluation of non-current
Financial assets 1,385 1,385 1,385
Revaluation of freehold properties 112,694 112,694- 4,845 117,539
Deferred tax on revalued properties (7,392) (7,392) (7,392)
Currency translation differences 3,416 3,416 3,416
Other comprehensive income - 106,687 3,416 110,103 4,845 114,948
Loss for the year (6,94-1) (6,941) (1,224) (8,165)

Total comprehensive income for the year 106,687 3,416 (6,941) 103,162 3,621 106,783
Transfer to legal reserves (3,332) 3,332
At 31 December 2011 350,000 611.412 <228,544) 339,865 65.188 1,137,921 157,806 1,295.727
Notes to the Financial Statements
1. Accounting Policies
The principal accounting policies adoptcd in the prepRmtion of the financial statements are set out below. The policies have
been cOllsistently applicd t aH the years presented, unless otherwise stated.
Basis of preparation
The financinl statements are presented in Euros bccause that is the functional currency of the parent company. The
parent company is Il nontlading holding company located in Luxembourg and has euro denominated shatc capital and
whosc primary activity is the holding of investmentB. AlI values are rounded to the nearest thousand Emos ('OOO) except
where otherwise indicated.
'fhe financial statements have becn prepared Ilnder the histol-lcal cost convention, except for the revaluation of certain
(:urrent and non-current asset investments, freehold property and investment property.
These financial statements have been prcpared in accol'dance with InterJllltional Financial Reporting Standards,
International Al:counting Standards and Interpretations (collectively IFRSs) issued by the International Accounting
Standards Board (IASB) as adopted by the European Union ("adopted IFRSs").
The preparation of financial statements in compliauee with adopted IFRS requires the use of certain critical accounting
estimates. It 81so requires Group management to exorcise judgment in applying the Group's accounting policics. The areas
where signifiCllnt judgments and estimates v ~ been made in preparing the financial fltutements and their affect are
diaclosed in note 2.
During the year, the board of directora has discovered that the non controlling intereat for one <:onsolidated subsidiary was
not properly detcrmined in prior year. The 2010 comparatives have been l'cstated and the equity attributable to thll equity
holdel's of the parent reduced by Euro 12.779.455 to renect the udjustments required. Vnder paragraph 10 <0 of lAS 1
Presentation of financial statements, tbis restatement would ordinarily requil'C the presentation of a stnterncnt of financial
position as at 1 January 2010. However, as this l'ostatement would not have a material impact on the statement of
[mancial position und on the statement of comprehensive income as at that date, the Dircctors do not considcr that this
would provide useful additional information consequently, have Dot presented a third Btatement of financial position. The
impact of the restatemcnt iB disclosed in the statement of changes in equity.
Changes in accounting policies
a) New standards, intel'pretatiolls and amendments effectivefrom 1January 2011
None of the following new standards, interpretations and amendments, effective for the fI.rst time from 1 January
2011, has had a material effect on the financial statements.
Classification ofRights Issues (Amendment to lAS 32)
lFRIC 19: Extinguishing Financial Liabilities with Equity Instruments
Amcndment ta IFRS 1: Fil'st-tiJnc Adoption oflntel'llationa! Fimmcial Repm'ting Standard6
Amenments to lAS 24: Related Party Disclosures
Amcndments ta IFRIC 14: Prepayments of a Minimum Funding Rcquirement
Improvements ta IFRSs (May 2010)
b) New standards, intelpl'(}tations and amendments not yet effective
The fol1owing new standards, interpretations and amendments, which have not been llpplied in these finarlCial
statcments, will or may have an effect on the Group'g future financia!statements:
Effective for annuaI periods beginning on or after 1 January 2012:
lAS 1 Financial Statement Presentation - Presentation of Items of Other Comprehensive lncome
LAS 12 Incarne Taxes - Recovery of Underlying Assets
Effective for annual periods beginning on or after l. Janunry 2013:
lAS 19 Employee Bunefits (Amendment)
lAS 27 Separate Financial Statements (as revised in 2011)
lAS 28 Investments in Associates and Joint Ventures (as revised in 2011)
IFRS 9 Financial Instruments: Classification and Measurument
IFRS 10 Consolidated Financilll Stat.ements
IFRS Il Joint Anangements
IFRS 12 Disclosure of Involvement with Oilier Entities
IFRS 13 Fair Value Measurement
None of the other new standards, interpretations and amendments, which a1'e effective for periods beginning after 1
January 2011 and which have not been adopted early, is expected ta have a material offect on t.he Group's future
financial statements.
Notes to the Fillancinl Statl'l1lents
1. Policies (cnntillued)
Bfll:li,c; of'colJ,c;olidatiolJ
The Group accounts comprise the accounts of General Meditenanean Holding SA SPF and its subsidiaries made up to
:n Decembel' 2011. The principal suhsidiaries are shown in note 10, Where the company has the power, either directly 01'
illdil'ectly, lo govern the finallcial and operating policies of another business so as to obtain benefits n'om its activities, it is
c!assified as a subsiial'Y. The consolidated tinancial statements pI'csent the results of the company and its subsidiaL'es
("the Group") as if they Corm a single entity. Inter'company transactions and balances bctween Group compnnies are
therefol'e eliminated in full. The consolidatcd t'inancial statements incorporate the results of business combinations using
the purchase method of llccounting.
Goodwill l'epl'esents the cxcess of the cast of a business combination ovel', in the case of business combinations completed
priaI' to 1 JanuaTY 2010, the Group's intel'est in the fair value of identifiable llasets, liabilities f1l1d contingent liabilities
aCQuil'ed and, in the case of business combinations completed 011 or artel' 1 JanUllTY 2010, the total acquisition date fair
value of the identifiable assets, lillbilities and contingent liabilities acquired, Fol' business combinations com}Jleted priol' to
1 Janual'Y 20)0, cost comprises the fair value of assets givcn, liabilities assumed and equity instruments issucd, plus allY
direct costs of acquisition, Changes in the estimnted value of contingellt consideration arising on business combinations
completed bl' this dute are treated as an adjustment to cost and, in consequence, l'esult in il change in the canying value of
1"01' business combinations completed on or after l January 2010, cost compl'ses the fair value of assets givcll, liabilities
assullll!d and eQuity instruments issued, plus the amount of any non-controlling interesta in the acquil"ee plus, if the
business combination is achicved in stages, the fair value of the existing equity interest in the acquil'ce, Contingent
consideration is included in cost at its acquisition date fair Vllhle and, in the case of contingent consideration classified as a
fnaneial liability, re"measured subSCquClltly thl'ough l)l'ofit 01' loss. For business combillutions completed on or aftel' 1
Janul\l'Y 2010, direct costs of acquisition al'e recognl;ed immediately as an expense, Goodwill is capitalised as an intangible
usset with an)' impairment in caT1')'ing value heing charged to the consolidated statement of comprehensive income. Where
the fair value of identifiable assets, liabilities and contingent liabilities exeeed the l'ah' value of consideration paid, the
excess is credited in full to the consolidated statement of comprehensive income on the acquisition date,
NowclIr.l'cnt intEmgible nssets
Pl"Oduct licences and other n()])-eun'ent assets are stated at cost. Amortisation i8 provided on fi straight line basis at mtes
calculated to write off their cost uvel' their expected usef,l1lives at the fol\owing rates:
Pl'Oduct licences a.33% pel' anllum
Formation and share issue costs 20,0% pel' annum
NOll'contmlJing ilJtel'e,ts
Fol' business combinlltions completed on or after l .Jamlfll'y 2010 the Gl'OUp has the choice, on a business combination by
business combination basis, to i n i t i a l ~ recogJ1ae allY non'colltrolling intcrcst in the acquiree ut either acquisition date fah'
value or, 8S was reqllircd pI'ior ta 1 JanuRr)' 2010, at the non-controlling intel'est's Pl'OpOl:tionate shl:lre of the acquiree's net
Notes tu ihe Financial SratPlllents
1. Aceounting Policiell (continued}
assl.'ts. The Group has not e1ected ta talte the option ta use fair value in acquisilio1l6 compleled to date. From 1 January
2010, the total comprehensive income of 11001"wholly owned subsidiaries is attlihuted ta owners of the ))arent and tu the
non-controlling interest.s in proportion to theil' relative ownership interests. Beforc this date, unfunded losses in Bueh
sllbsidiaries WCl'e attl'ibuted cntirely to lhe Group. In accordance with the trallsitionlllrcqul'ements of lAS 27 eunsolidated
and scparate financial statements (revised 2008), the c r r ~ i n g value of non-colltrolling intel'ests at the effective date of the
amendment has not betm restated,
Where the Group has the power ta participate in (but not controI) the financial and opel'ating policy decisions (Jf another
cutity, it ia classified as an associate, Associates are initial!y recognised in the consolidated balance sheet at cost. The
Group's share of post-acquisition profits and losses is recogniscd in the consolidated income statement except that lusses Ul
exccss of the Group's investment in the associate are not recognised unless there is an obligation to malte good those losses,
The principal associates are listed in note 10.
Fimmcal im'trumelJts
The classification of financial instruments at initial recognition depends on the pmpose for which the financial instruments
\Vcre acquircd and their characteristics. AIl financial instruments are initially rccognised at the fair value of consideration
giVCll, including acquisition costs ussociated with the investment. Any prcmiums and discounts are amortised on a
systematic basis lo mat\lrity using the effective interest method andtakcn ta interest income or intel'est expcnsc as
a) Date of recognition
Ail "regular way" [)mchases and sales of financial lJ.ssets ure rccognised on the settlemcnt date, i.e. the date that the
bank receives or delivers the asset. Regular way p\1l"chases or sales are pllrchases or sales of financial assets that
require delivcl'Y of allsets within the lime fl'ame generally established by regulation or convention in the market place,
b) Detcl'lnination of fair values
Thc fair valuc of a finllncial instrument is the amount the instrument could he exchanged for in a CUl'rcnt transaction
hetwcen willing parties othel' than in a forced 01" liquidation sale, 'fhe fair value of finllncial instruments is based on
market prices whel'e available.
c> Dorecognition
A finaneial asset (or, wherc aJ)plicable a part of a financial usset or part of a group of sirnilar finuncial ass(!ts) ia
derecognised wherc:
the rights to receive cash flows from the nsset have expired;
the bank has transfel'red its rights ta rcceivo cash t10ws from the asset or has assumed an obligation to pay the
l"eceived cash f10ws in full without material delay ta a thil'd party under a 'pass-through' al'l'angement: 01'
the banlt has transfened its rights to receive cash f10ws from the asset and either (i) has transferred
substulltially 0.11 the risles and rewards of the asset, or (ii) has neither transferred nor retained substantially ail
the riaks and rewnrds of the usset, but has tl'ansfel'l'ed control of the naset.
Notes to the Financial Statellll'nts
1. Accounting Policie!l (colltinuedl
Afinancial liability is derecognised whcn the obligation tllldcr the Iiubility is dischurged, cancellcd or expires,
More information on the individuul financinl usset and liability <:ategol'ies of the Group are as follows:
The Group classifies its financial asacts into one of the catcgol'ies discusscd below, c1epending on the purpose for which the
asset was acquircd. The Group has not classified any of iLS financial aasets as held to matm-ity and docs not have finallcial
assets in a qualifying hedging rclatiollship. the Group's accounting policy for cach category is as fo]]ows:
FI/' vEl1l1e thl'OlIgh profit or Joss
They al'e carricd in the statoment of financial position at fair value with changes in fair value recognised in the
consolidated statement of comprehensive income in the finance income or expense line,
Loam; fwd receivables
These are non'derivative finallcial aasets with fixed or determinable paymellts that ure not quoted in un active
market. 'l'hey arise pl'illcipal!y tl1l'ough the provision of gooda and services to customers (e.g. tl'ade receivables), but also
inCOrplll'Ute other types of contractual Olonetm'y asset. They are initiaHy l'ccognised at fair value plus transaction costs that
are directly attributable to their acquisition or issue, and lire subsequently carried at amorlised cost using the effective
interest rate method, less provision for iOlpairment.
Impairment provisions are recognised when there is objective evidence (snch as Bignificllnt financial difficulties on the part
of the counterparty or default or significant delay in payrnent) that the GrouJl will he unable to collcet al! of the amounts
due under the terms receiVllblEl, the amount of sueh a provision iJeing the difference between the net carL'ying IlmOUJ1t and
the present value of the future expected cash aHsociated the impaired rBceivable. For trade receivables, which
are reported net, such provisions are recordcd in a separate allowancc acco\lnt with the lOBS being recognised within
administrative expenses in the cOllsolidated statement of comprehensive income, On confirmation that the ttade receivable
will not he collectable, the gross cal'l'ying value of t.he aSBet is wl'itten off against the Rssociated provision.
The Group's loans and receivablcs compl-ise tl'ado and othel' receivables and cash and cash equivalents in the consolidatcd
statoment of financial position.
Cash and cash e()uivalents inc1udes cash in hand, deposits held at cali with banks, othe!' short term highly liquid
investments with original maturities of three months Ol' less, and - fol' the purpose of the Htatement of cash flows - bank
overdrafts. Bank overdrafts art! shown withill loans and borrowings in cuftent Iiabilitics on the consolidated statement of
finallcial position.
Non-derivative financial asscts not included in the above categories are classified as flvailable-fol'-Sllle and comprise
principally the Group'a strategie investments in entities not qualifying us suhsidial'es, associatell or joint!)' control1ed
entities, They are carried at fair value with changes in fail' value, other than those arising due to e:x:change rate
fluctuations und intel'est calc:ulated llsing the effective interest rate, recognised in other cOnl]ll'ehensive income and
Ucc\lnJulated in the aVf.lilable-fol"sale 1'68erVe, Exchange differences on investments denominated in Il foreign currency and
interest calculated using the effective interest rate method are l'ccognised in profit or loss.
Notes to the Financial Statements
1. Accounting Polides (coutillued)
Whel'e there is a significant 01' prolonged decline in the fair value uf an available for sale financial a8set (which cOllstitutes
objective evidence of impairment), the full amount of the impnirment, including Rny amount previously recognised in othe!"
comprehensive income, i5 recognised in profit or loss.
Purchases and sales of available for sale financial aesete are recognised on settlement date with any change in fair value
between trade date and settlement dute being recognised in the available-for-sale reserve.
On sale, the cumulative gain or 108s recognised in other comprehensive income is redassified from the availablc-for-sale
reserve to profit or loss.
Fi11811cial liabilities
The Group classifies its financialliabilitics iuto one of two categories, dcpending on the purpose for which the liability was
Other than financinl liabilitics in a qualifying hedging relatiollflhip (sec below), the Group's aL'Counting policy for eaeh
eategory il) as follows:
Fail' value thl'OUgll profit 01'10S8
Financial liabiIities under this category are carried in the consolidated statement (If finnDcial position at fair value
with changes in fair value recogllised in th'e consolidated statement of comprehensive income. These instruments,
issued by Group comprise convertible prcfcrrcd cquity certificates that can be converted into share capital at the
option of the holder and the number of shares to be issued does not vary with changes in their fair value, However, as
the Company may, instead of converting the convertible preferrcd equity certifcates into share capital, decide to
redeem the ccrtificates at their fair value, the option of conversion is coullt.ered. In the latter case, the split accounting
method ie not applied and no distinction is to be made between a liability and equity component.
The Group does not hold or issue derivative instruments for speculative purposes nor for hedging purposes. The Group
does not have any liabilities held for trading nor has it designated any financial liabilities as being at fair value
through proft or 105S.
Notes to the Finaneia! Statements
1. Accounting Policies (continued)
Other finl'lJ1cia/ fiabi/ities
OUler financialliabilities inc1ude the following items:
a) Bank borrowings are initially recognised at fair value net of IlUY transaction costs directly attributable to the
issue of the im.trument. Snch interest bearing liabilities arc subsequently measured at amortised cost using the
effective interest rate mcthod, which enSUl'es that any interest expense over the pel'od ta repayment is at a
constant rate on the balance of the liability carried in the consolidated statement of financial position. Intcrest
cxpcnse in this context includes initial transaction costs and auy intel'est or coupon payable while the liability is
b) Trade payables and othm' short-term monctnry liabilities, which are initially recognised nt fair value and
subsequcnUy carried at amortised cost usiug the effective interest method.
Fair value measurement hieral'chy:
IFRS 7 requires cel'tain disclosul'es which require the cla.ssification of financial aesets and financialliabilities mcasured at
fair value using a fair value hierarehy that rcf1ects the llignificance of inputs used in mnltug the fair value measurement.
The fair value hierarehy has the following levels:
(a) Level 1 . quoted priees (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2 - inputs other than quoted priees included in Level 1 that are observable for the nsset or liability, eithel'
dil'ectly (i.e. as prices) or indirectly (i.e. drived From priees).
(c) LeveI3 - inputs for the asset or 1iability that are not based on observable market data (unobservable inputs).
'l'he level in the fair value hicl'al'chy within which the financial assat or liability is categorised is determined on the basis of
the Iowest level input that is significant ta the fair value measurement. Financial assets and liabilities are classified in
their entirety into only one of thl'ee levels.
Notes to the Financial Stat.cments
1. ACCO\llltillg Policies (colltinued)
Pmper(J'. plant & eqllipment
Frcehold land and buildings are cal'l'ied nt fair value, ascd on periodic valuatom by a )Jl'ofessiollally qualified valuc}'.
l'l'valuations arc made \Vith sufficient l'cgulal'ity to ensure that the canying amount does not differ materially from
that which would be determined using fair value at the end of the repol'ting period. Changes in fail' value al'e l'l'cognised in
othel' comprehensive income and accumulated in the l'l'valuation l'l'serve except to the extent that UllY decrease in value in
excess of t.he Cl'edit balance 011 the l'l'valuation l'l!serve, or l'l'versaI of such a transuetion, is l'ecogniscd in profit. 01' loss.
Those propel'ties that havc becn pUl'chased dUling the course of the year have been included at cost at the financial yeal'
AlI othel' assets are stateri at cost less deprcciation, less any provision fol' impuirmcnt. No depreciation is pl'ovided on
freehold land. Depreciation on buildings and other aeaets is pl'ovided on a straight liue basis at rates calculuted to writc off
theil' cost 01' valuatioll over the1' expected useful lives at the fol1owing rates;
Freehold buildings and long leasehold properties
Short ieasehold pl'operties
Plant, machinery and cquipment
2% to 6% pel' anllum
over the remaining term of Icase
10% to 33.33% pel' 31lnum
Pmfits or losses on the sale of non'current property, plant, machinery and equipment are included in the iucome statement
and are calculated ilS the diffcrence between sale proceeds an net book vulue,
InvestmeJJt pl'opeJ'tfes
Investment properties ure those from whieh the Group l'eceives l'entaI incorne, These are carried at market value and are
rcvalued on an annual busis. Valuations of the properties are carried out by professional valuers on an open-
mal"!t busis, aS8uming a willing buyer, a willing seller and use and Bueh valuations arc carried out on a l'olling
basis over a period of several yeal's. Where a profe8sional valuation is not cal'l'ied out at the yeal' end, these pl'opcl'ties are
valued by the Dh'ectors. The change in fail- value in respect of the investment properties i8 recognised in the consolidated
statcrnent of comprehensive incorne.
Defen'ed taxation
Dcferred tax balances are l'Ccognised in respect of ail temporary differences that have origillated but not rcversed by the
balance sheet date except that the recognition of defel'rerl tax assets is lirnited to the cxtent that the company anticipates
making sufficiellt taxable profits in the futUl'C to absorb the reversaI of the underlying timing diffel'ences. Defcrred tax
balances are not discounted. Full provision has been made for defel'red taxation on any profit which woul arise on disposaI
of fi property at iLs l'cvalued amount. The pl'ovision is deducted from the revaluation of the freehold properties in the
l'evaluation l'l'serve,
Revenue. which exeludes value added tax and sales between 01'OUP companies. reprcsents the total amount l'eceivable for
goorls 801d and services provided. Revenue From the sale of goods ie l'ccognised when the revenue and costs in l'espcc:t of the
tmnsactiOll can he measured reliobly and after control over the goods and the llignificant l'sks llnd rewards of ownership of
the gonds have baen transferred to the buyel', Revenuc fl'om thc provision of services is recognised when the revenue and
Notes lu the Financial Staten1l:'nts
1. Accountjng" Policies (contnued)
costs in l'espect of the transaction can be mcaslll'cd rchably and il is probable that the economic benefits ussociated \Vith
the transaction will flow to the ]Jl'ovider. Revenue l'rom propert)' rentaIs is recognised on a time apportioned basis,
When the outcome of a construction contraet ean be estimated rehubly, eontract l'evenue and contraet costs associated wjth
the contract are recognisec! hy reference to the stage of completion of the contract at the balance sheet date, When il. is
probable that the total conll'act costs will exceec1 total contraet revenue, the expeeted loss is recognised as an expense
The stage of completion is determined bused on the proportion of costs incl1rred for wode performed up to date, relative to
the estimated total contract cosls, This is regularly rcviewed llnd updated by the Group,
Inferest 811d djvidellds
Interest is recognised on a time upportioned bnsis. Dividends are recognise when the shareholders' right to receive
payment is established.
Finance and openJtingleoses
Operatil1g leuse costs are charged ugainst profit on a straight line basis over the term of the lease. Where non -current
assets are financed by entering into leasing agreements, which transfer ,to the lessee substllntially aB benefits and risits of
ownership, the assets arc treated as ie they had been purchased and included in 110n-CUl'rlmt assels and the capital clement
of the leasing commitments is shown as obligations under finance leases, 'fhe finance lease rentais are tl'cated as consisting
of capital and interest clements; the capital elep1ent is applied ta reduce the outstanding obligations and the intercst
clement is charged agninst promo
Inventories and work in progress ure valued at the lowcr of coat and net l'ealisable value. Cost, which comprises
expenditUl'e incurred in the normal course of business in bringing inventories and work in pl'ogress to their present
location and condition including appropriute overheads, is calculated on bases appropriatc to the vnrious businesses curried
on by the Group, Net l'calisable value is th() estimated selling pl'ice l'edud by aIl costs of completion, marketing, selling
and distribution.
Foreign CIIl:.I'eJlC)' tl'onSlJ ctioJ1s
Transactions entered into by Group entities in a eurrency othel' than the cunency of the lll'imary economic environment in
which they operate (their "functional cunency") ure recorded at the rates rulng when the transactions occur. Foreign
currency monetary assets and Iiabilities are translated at the rates ruling at the l'epo1'ting date, Exchange diffel'ences
arising on the retmnslatioll of unsettled monetary Rasets and Ilbilities are recognised immediately in profit or loss. except
fol' foreign cUlTency bOl'rowings qualifying liS a hedge of a net investment in a foreigl1 opemtiol1, in which case exchange
differences are recognised in othe1' comprehensive income and accumulated in the foreign exchnnge resel've along with the
e.xl;hange differences al'ising 011 the l'etl'anslatiol1 of the forcign operation, Exchallge gains and los8es arising on the
retral1slatioll of monetary Ilvailable fOl' sale financial aaBets Rre tl'eated as a eeparate component of the change in fir value
Note!> to the Financial Stntl'ments
}. ACCoullting Policicl' (continucd)
and rccognised in profit or Joss_ Exchange gains and lasses on non-monetal'Y available fol' sale financial assets form part of
the overall gain or Joss recolfnised in respect of that finallcial instrument.
On consolidation, the results of OVC1-seas operations are translated into ElIl'OS at rates approximating ta those ruling when
the tt-ansactions took place_ AlI assots and liahilities of overseas operations, inc1uding goodwill arising on the acquisition of
those opemt.ions, are translilted at the rate ruling at the reportillg date_ Exchange diffel'ences arising 011 translating the
o}Jening net assets at opening rate and the of overseas operations at actuaJ rate are l'ccognised in othel'
comprehensive income and accumulated in the foreign exchange resel've_
Legal J'eSIJ)'l'e
The parcnt !:ompal1Y and certain sub!Jidiarics incol'porated in l-elevant jurisdictiollS are requircd to allocate 50/0. of the-
annlIal profits to li nOlrdistributable legal reserve until the legal reserve of the company is cqual to 10% of its issued shure
2. Cl'itica1 accollllting estimates and judgements
The preparation of consolidated financial statements undel' IFRS rCQuires the Group to make cstirnates and judgements
that affect the application of policies and repOl-ted amounts. Estimates and judgernents are cOlltinually evaluated and are
based on historicnl experience nnd other fact.ors, incJuding expect.ations of future l'vents that arc bclieved ta be reasonllblc
undm' the Actual ['eslIits muy cliffer from thesc estimatcs. The financial statem'ent categories Whel"<l
estimates and judgements have a significant riait of causng li mat.erial adjustment tu the carrying amOtmts of assets and
Iiabilities within the next financial yellr al'e as fo\Jows:
Pa- value o!fiJJalJcial Jstl"lIJ1Jents
The Group detennines the fuir value of fimmcial instnunents that are not quuted using valuation techniques_ These
techniques are significantly affected by the assumptiolls used, induding discount rates and estimates of future cash flows_
In that regard, the derived fair value estimates cannot al ways be substa.ntiated by comparison with independent markets
and, in many cases, muy not he capable of being l'ealised immedi'ltely. The methods and assumptiolls applied and
techniques used are set out in note 22_
POWel" to eX(JJ'(dse si{fJ]ific8nt in.f]ufll1Ce
Where the Group holds less than 20% of voting rights, but has the power to exercise significant influence, such investment
is trcatell as an associate. Where the Group holds ovet' 20% of the voting rights but does not exerciae significant influence,
the investment is tl'eated as an availabJe fol' sale investment.
In aC(;ordanr,c with SIC12, Consolidation' Special Purpolle Entities, a Special Pm'pose Entity "Spg" should be consolidated
when the suhsl;ance of the relationship between an entity and the SPE indicates thllt the SPE is control\ed by that entity.
The Group has c1ctermined th!lt in cases wherc it does not hold more than 50% of an entity, that entity shaH be
consolidated if: it has the rights or decision-making powcrs ta obtain the majol'ity of the benefits of the activitics of an
Notes to the Financial Statements
1. Accounting Policies (continued)
cntity; it retains the majorlty of the resfdual or ownership rfsks related to the entfty or lts assets in arder ta
obtaln benefits trom lts activltfes.
Express Asia Umited, a company fncorporated in Hong Kong, has been included in the consolidation of the Group
because it is controlled by the Group and the Group is entltled to the residual assets and rlsks associated to this
Valuation ofinv8stment properties, eeholcJ IJJld le/J88holdbuildings
Independant valuations of invc8tment property and freehold and le88chold land and buildings are cllrried out on a periodic
Notes to the Financial Statements
2. Critical accounting estimateB and judgernents (contJlled)
Usefu/ lives ofintaJJgible assets andp o p e r t ~ plant & equipment
Intangible assets und property, plant and equipment urc amortised or depreciated over the' usefullives. Usefullives are
based on the Group'a estirnates of the period tbat the aaaels will generate revenue. Changes to estimlltes can result in
significant variations in the carrying values and in the amounts chargcd t.o the incorne staterncnt.
3. Financial risk management
The Group is exposed through its operations ta riska that arise [rom its use of finandal instruments. Palicies and
procedures fol' munaging these riales are set by the Board fol1owing recommendations From the Chief Finuncial Officer. 'J'he
Board reviews the effectiveness of these procedures and, if l'equh'ed, approves specifie additional policies and procedures in
order to manage these riaks. The Group is exposed to the fol1owing financial risks:
Market priee risk
Interest rate risk
Foreign eurrency exchange risk
Credit rislt
Liquidty risk
Capital risk
Set out bc10w are the key financial insb'mnents used by the Grou, followed by an explanation of the Group's policies and
procedures for managing those rsks. Further Quantitative information in respect of these l'isks is set out in note 22 to
these finaneialstatements.
There have been no substantive changes in the Group's exposure to finaneial instrument risks or in its policies and
procedures for managing these risks from the previous period.
Key fmwciol iJJstrulJ1ellts
The key financial instruments used by the Group, on which fillancial risk arises, are as follows:
Available for sale financial assets
Other financial assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Bank loans and overdrafts
Other financialliabilities
Notes ra the Finuncial Statements
a. Fin:lIlcial risk management (clIntinuedl
The Group's main financial risks, togelher \Vith ils policies and procedures fOl' managing tltesc l'iskR, are as follows:
A181-kel pJiee Jisk
The Group is exposed to market priee l'isk becausc of investments held by the GnJllp which are c1assified in the
conBolidated balance sheet as available-for'sale or at fair value through the income statement. The investments include
both quotcd investments and unquoted invelltmcnts and are classified as CUl'rent or non-cu1'1'ent according to the Group's
st.l'ategic invcstment policies. The Group is not exposed to commodil:y pl'icc rislt. At the balance sheet date, Il one
pel'cenlage point movement in market values would affect the results by less than 6 million (2010 . 2 million).
To manage its priee risk ol'ising fl'om investments in equity securities and options, the Gl'OUp diversifies its portfolio.
Diversification of the portfolio is detel'lnine in ac<:oJ'dance with the ))ulicy set by the Group's senior management and the
Directors consider that the Group's expOSUl'e to mar1cet priee risk is appropriate to the Group's circumstances,
1JJteJ'est J'ote l'isk
Interest rate risk il! the risk that the fair values 01' future cash flows of finaneial llssets 01' liabi1ities will f1uctuate due to
changes in m l l ~ e t interest J'ates. There is a risIc of a potential adverse impact on the Gl'OUP'S future cash tlows from
changes in intel'cst rates which arises from the difTering interest rate l'isk characteristies of the Group's assets and
liabilities, The Group's principal exposure to interest. rate l'isle arises on changes in EU1'O, US dollar ,and Sterling intel'est
. .
rates. In particular, RllY fixed rate Rssets or liabilities expose the Group to the l'isle that a change in interest rates could
cause either a l'eduction in interest income or an incl'ease in interest expense relative to variable rate interest flows.
To manage exposure to interest rate fluctuations, the Group detel'mines its proportion of fixed ta flonting rate borrowings
in lIccordance with policies approved by the Board. In t11e case of surplus cash flows, the Gl'OUp monitors interest rates to
cnsure that surplus funds are invested whe1'e the best return can be obtaincd. These pl'actiees Sel've to reduce the volatility
of the Group's reported finandal performance al'ising from intel'est rate fluctuations, At the balance sheet date, a one
pcrcentage point 1I1ovemcnt in interest. rates would affect the reaults by less thuu lmiIliou (2010 -Iess than lmillion).
FOJ'f.'igJJ C1J11'eJJcy exclJll11ge J'isk
The Group canducts business in man)' countries. As 0 l'esult, it is subject to foreign CUl'l'ency exchangc risk due ta
exchange rate movcments which will affect the Graup's transaction costs and the translation of the 1'08ults and underlying
net assets of its Foreign operations, There is a l'isk of a potential adverse impact on the Croup's futul'e cash flows arisillg
fl'om changes in fOl'eign cm'rency exchange rates.
The majority of the Group's transactions Rre conducted in US Dollars and Euros, The othel' currencies used in operations
are GBP, JOD, EGP. INn, KRW, LDP, MAD, TND, BRL. CNY, HKD, SYP and CAD, The Group cont.inually monitors its cxposure
1.0 foreign currency exchange rislt on a daily basis and takes steps tu ensure that the net exposure is kept ta a IcvcI in
accol'dance with the policies set by the Boal'd, Wher0 fi fOl'eign exchange expUSU1'C is identified an appropriate hedge
arrangement moy he entered into if requil'ed. The Group has not entered into forwol'd foreign exchange agl'eements during
2011 or 2010,
Notes to the F'inHncial StaLement,;
3. Financialrisk management (continuedJ
Credit J'isli:
Credit risk arises wheu fi failure by countel'parties to dischal'ge theil' obligations could ducc the amount of future cash
inflows from the trade and other receivables held at the balance sheet date. Ali such receivables are non'del'ivative
financial aallets with fixed or determined payments or other types of contraetual l110netary llilset. The Group's maximum
expOSU1'e to credit risk equals the carrying value of those financial assets, The Group's policy is to address any credit risk
by individual credit risk asscssment. In pl'aetice, the Group has limited credit risk as the receivllhles in the balance sheet
are predominantly duc from weil established tl'acle custllmel's or credit wod,hy thinl parties, Fm'thermore, therc is no
concentration of n ~ d i t risk with l'capect to trade and other l'eceivables, as the Group has a large llumber of customel's
which are internationally dispersed. The l'elationships are monitorcd closely and, given the ongoing nature of trading with
such countcrparties, the l'isk of default is considered tu be low.
Credit risl( also arises from cash and cash equivalents and deposits with banks und financial institutions. The Gl'OUP'S
policy in respect of cash and cash equivalents il! ta limit its exposul'C hy )'educing the cash holding in the opeJ'ating units
and investing amounts that are not immediate1y requl'ed in funds thut have low risk und which arc opcrated hy l'eputable
baultS. The cash und bank balances held by the operating units al'e collatcd on Il monthly basis und are l'eviewed by the
Group's senior management ta ensure thllt uny surplus cash is appropl"ately invested.
Liquidity risk
Liquidity l'isle arises from the Gl'OUp'S management of working capital and the finance charges and pl'incipall'epayments
required on ils debt instruments. The Group l,nonitors its liquic1ity position in arder to ensure that sufficient liquid
resources are avnilable 1.0 allow the Group's operating unit.s 1.0 meet their obligations as they fall due. The Group
maintains long-tel'm committed bank facilities and use is made of such facilities in the management of lilluidity. Liquidity
Bxposurcs are strietly limiled by time and amonot., Whcre the Group has sut"plus fUllds, daposits are placed with rcputable
institutions Lo optimise the rate of rctnrn. The majority of surplus funds arc held in Europe and in the United States of
America and thel'e are 110 matel'al funds where repatriation is restl"cted as a result of foreign exehange regulations, The
Group expects to have sufficient Iiquidity ta meet its entire financial obligations under all reasonably expected
Capital dsk
The Gmup manages its ta cnsure that it will have sufficient funds to meet its longer term strategie plans. 'fhe
capital structure eonsists of net. debt, issued share capital and reserves, The structure is managed ta minimisll the GroUI)'S
COllt of capital. to provide ongoing returns to shareholders and to service debt obligations. whilst maintaining maximum
operational l1exibility. The primary objective of the Group is maximising shareholders' value, which, from the capital
JJel'SIJeclive, is achieved by maintainiog the capital structure most suited ta the Group's size, strategy and underlying
business l'isk. Surplm\ funds are eit.hel' reinvested in the business or used ta repay debt.
Notes to the Financial Statements
4. Revenue
2011 -2!PO
'OOO 'Ooo
Provision of services 145,126 141,264
Sale of goods 8,472 7,165
163,598 148,429
Analysis ofrevenue by activity
2011 2010
Real Estate & Constnlction 81,337 64,570
Hotel & Leisure 63,187 74,965
Industrial & New Media 9,074 8,894
Analysis of revenue by geographical mro:ket
Africa & Middle East
USA & Canada
5. Profit 1008S) from operations
This is stated aCter charging 1(crediting):
Depreciation ofnon-current property, plant and equipment
Social security costa
Rental income from investment properties
Repail' and maintenance expenditure on investment properties
2011 2010
t'OOO +;'000
17,165 18,030
32,413 30,877
2,894 1,012
(6,190) (7,279)
193 480
The average number of employees during the year was 3,380 comprising 3,223 operational staff and 157 administrative
staff (2010 3,524; operational - 3,372; administrative 152). In the income statement staff cost, amortislltion and
depreciation and repair and maintenance expenditure are included within net operating expenses. RentaI income ie
inc1uded within the provision of services category of revenue.
Feee payable to the Group'e auditors (comprising the auditors of the holding company and other firme within the Group
auditors' network) were 316,OOO in respect of audit work and 1O,OOO in respect of non"audit work (2010 . 141,600 and
16,OOO reepectively).
Notes to t.he Financial Statements
6. Fnance incame and coste
2011 2010
'000 '000
Finance income:
Interest on deposits and advances 3,382 9,362
3,382 9,362
2011 2010
t'oOO 'OoO
Finance costs:
Interest on loans and overdrafts 12,340 12,327
Bank charges and commissions 838 379
13,178 12,706
Ailalysis of tax charge for the year between current and deferred tax:
2011 2010
t'OOO 'OOo
CUITent yen!' 3,610 2,389
Adjustment in respect of prior years
(748) 3,926
Total current tax 2,861 6,315
Deferred tsx
Originntion and revereal of temporary differences 643 914
Tax charge on profit for the year 3,504 7,229
Notes ta the Financial Statements
7. Tax (continuedJ
Analysis of tax charge for the yoar by source:
ClIoent tox
Defened tax
Troc charge on profit for the yeur
Reconciliation of troc charge for the yenr:
2011 2010
388 365
2,473 6,950
643 914
3,504 7,229
(LoBS) 1Profit from continuing operations bofore tax
Troc at local rate of 28.80% (2010 : 28.59%)
Troc charge for the year nt the fixed domeBtic rate applicable in Luxembourg
Capital duties and other taxes
Unrecovered withholding taxes
Net effect of different rates of tax applicable to overseas businellses
Tax charge on profit for the yeur
<2,110) 3,151
388 365
B88 770
38 35
4,300 2,908
3,604 7,229
Factol'S t1Jot may offect futUl'O tax charges:
The Group is involved in worldwide operations and is 8ubject to several factors which may affect future tax charges,
principally the levels and mix of profitability in different jurisdictions and tnx rates imposed.
Notes to the Financial Statements
8. Non-Current Assets - Pmperty, plant & equipment
Freehold Leusehold Plant & TOTAL
properties properties equipment
C\IlTent Yeur ('000 ('000 'OOO ('000
Cost or Valuation
Brought forward at 1 January 2011 1,265,992 39,140 197,449 1,502,581
Exchange differences (3.127) 192 2,564 (371)
Additions 45 7,739 7,784
Disposais (294) (54) (5,755) (6,103)
Revaluations 117,539 117,539
Carried forward 1,380,110 39,323 201,997 1,621,430
Brought forward at 1 January 2011 17,495 142,507 160,002
Exchange diffcrencc8 (90) 1,805 1,715
Charge for year 10,346 176 6,643 17,165
DisposaIs 54 1,315 1,369
Revaluations (10,346) (10,346)
Carried forward 17,635 152,270 169,905
Net Book Value
At 31 Decembcr 2011 1,380,110 21,688 49,727 1,451,525
Cost or Valuation
Brought forward at 1 January 2010 1,178,144 38,414 173,253 1,389,811
Exchange differences 38,524 726 9,255 48,505
Additions 11,988 16,161 28,149
DisposaIs (8,lB7) ,220) (9,407)
Revaluations 45,523 46,523
Canied forward 1,265,992 39,140 197,449 1,502,581
Brought forward at 1 January 2010 10,449 17,285 130,583 158,317
Exchange differences 1,545 17 3,990 5,552
Charge fol' year 8,940 193 8,897 18,030
Disposais (963) (963)
Revaluations (20,934) (20,934)
Carl'ied forwal'd 17,495 142,507 160,002
Net Book Value
At 31 December 2010 1,265,992 21,645 54,942 1,342,579
Notes tu the Financinl Statl'mellLs
8. Non-Cunent A.,sets - Property, plant & equipment bJlltinueej)
Certain freehold lwoperties shown in these ac:counts at li net book value of 824.8 million (2010 - 811.9 million) have been
mOl'tgaged to banks.
The Group lms recognilled impairment losses of EUR 7 million on revalued properties. This impairment loss hall been
recognised directly through l'evaluation resel'ves.
A number of the group's hote! and hospitlliity busincsses in the Middle East and North Africll have hecn adversely affected
by the unrest in the area. Induded in the clll'l'ying vahlc of the hotels at 31 December 2011 are properties over which the
impact has heen worth noting RB be1ow,
Le Royal Amman (,Jordan) - independent valuation
The pro})erty was last valued by a l'eputable local Ilppmisal company in Febl'uary 2009 at 258M. Whilst revenue
incl'eased 3% to gofi, annually from 2010 to 2012, it refleded a 10% decline in the first half of the annualised 2013 }'evenue.
This is attributable the unsettlcd state of affairs in certain countl'ies in the neighbourhood, This is amidst impl'oving
profitahility from a 1068 of l. 7 million in 2010 to profit of139,OOO in 2012.
Le Royal Beirut (Lebunon) . indeJlcndent valuation
The pl'opel'ty was last valucd by a reputable local appraisal company in August 2010 at n92M. With the ongoing civil and
politieal tensencss in the region, the hotel turnover declined by 10% between 2010 and 2011 which ,reflected in a furthel'
drop of abOlIt 20% between 2011 and 2012. The profitahility reflected a sirnilar curve.
Development Land Syria - at cost
The cost of 47m rcpresents nine parcels of' land acquil'ed fOl' development in Syria. In view of the ongoing cont1icts the
group has deferJ'ed developrnent plans on the property until the situlltion impl'oves. Management bcIieves that the
continuing devaluation of the Syrian pound will he the best }'eflection of the changes in the value of the property. During
the year, C5,Bm was l'ecognised as a translation loss, l'epresenting 11% of the priol" carl',ving value.
Post year-end, the Syrian pound devalucd by 24% in 2012 and 4B% in the current year to 30 Septembel' 2013 which will
reduce the carrying value of the propelty in subsequent group aCCOUl1ts. Management believes that this will be offset
against the improved value of the lands after the removal of building resh'ictions on sorne of the parcels.
Rowad Misr (Egypt) . at cost
The canying value of 127M l'cpresents the considemtion puid by the Group when it acquired a eontrolling statte in Rowad
Misr for Toul'stic Invcstment in 2009. The pl'cc wus based on a pl'operty valuation report of a local l'cal appraisal company
in Novcmher 2009, with only translation gains/losses causing the movement.
Duc to the sO'called Arab spring and adverse effect on tourisrn in Egypt, the Group's turnover from the Rowad hotels
halved from 2010 to 2011. Although things have started to impl'ove, as shown by a 14% increase in gross income in 2012,
this continues tu be significantly lowel' than pre'crisis revenue in 2010.
Simlal' ta Syds, the devaluation of its currency is a best reflection of the economic implication of the circumstances in
Egypt with a 6% decline in 2012 followed by a 12% l'eduction in the value of the Egyptiun pound which will impact on the
cUl'l'ying value of the propel'ty in subscqllent gl'OUp accllunts.
Notes to the Financial Statements
8, Non-CUl'rellt Assots - Property, plant & equipment (eontinued)
Le Royal Hammamet <'l'unisia) - directors' vahlation
Despite the politieal tm'moil, which started in January 2011, hitting much of the Tunisian tourism industry, the hotel
managed Lo improve iLs turnover in each year from 2010 to 2012, The directors thc1'efol'e continue to believe that 48M
would be the beat estimate of the property's fair value.
As with Syria and Egypt, the devaluation of the CUl'rency being the best reflection of the economic implication of the
circumstances in 'l'unisia with a 5% dedine in 2012 followed by a 8% reduction in the value of the its dinar, which will
reduce the carrying value of the propel'ty in subsequent group accounta.
The group has the rcslience to hold on to its pl'operties and operate them and taltes a long term view and whilst thorc are
no })1an5 to sell, it may contemplate selling in the future at the right priee. In view of the factors outlined above, the
directo1's firmly believe that the carl'ying values of the individusI properties continue ta be appropriate and no impairment
exists at 31 December 2011.
9. Non'Cunent Assets . lnvcstment properties
2011 2010
('000 '000
At beginning of period 159,134 162,661
Revaluatiolls 22,218 (2,141)
Exchange differences 1,182 2,044
DisposaIs (3,430)
At end of period 182,534 159,134
10. Investment in AS80ciates and Subsidiaries.
The Group's investment in principal associate companics includes:
Arab Company for Production and Distribution Egypt Film Distribution 46.0
Concord for Touristic Development JSC Egypt Hotel Invest.ment &Management 45.0
Masters Company for Hotels and Tourism SAE Egypt Hotel Investment &Management 33.3
Sharm Group for Hotals SAE Egypt Hotel Investmcnt &Management 33.3
Sharm l'oday for Hotel Facilities SAE Egypt Hotei Investment &Management 33.3
Sharm Dreams for Touristic Investment ,TSC Egypt Hotei Investment &Management 32.0
Dead Sea Company for Touristic Development Pvt ,Jordan Hotei Investment &Management 30.0
Notes to the Financinl Statementa
10. Investment in Associates and Subsidiaries (continued)
Aggregated amounts relating ta aS60ciates are set out below.
ShlU'e of aSllociate companies' balance shoets:
Total assets
Net assets
2011 2010
('000 'OOO
196,876 194,672
(63,228) (68,294)
133,648 136,378
Share of associate companies' revenue and profit attributable ta the Group:
Share of net profit/aoss)
Includedin the abova is ahare ofloss ofSoncsta amounting to 5.4 million (2010:5 million).
Otber movements in nssociate companies:
Additions less
Exchange differences and other movements 2,575
Where an associate has cumulative losses, the Group only recognises its share orthose losses to the extent tbst the Group's
investment is written down te Nil.
11. Non-Current Assels . Invcslment in Associates and Subsidiaries (conlinued)
The Group's principal wholly owned subsidiaries at the year end are shown below. AlI companies m-c owned dictly or
indirectly by General MeditelTanean Holding SA.
Hal'borough Invest Ine
Ilien Real Estate SA
Le Royal Hotel Management Company SA
Ludo Estates Ine
Oval Development Corporation
Development & 'l'rade Corporation
Bernard de Ventadol' SA
Louieannes SA
SCI de la Grande Motte
Chennai Power Generation Ltd
Atlantic Heal Estate Company SA
Continental Real Estate Company SA
Foncire Gnrale d'Investissements
Immobiliers SA
GMH Telecommunications Ud
Grandin SA
Hotel Royal SA
Immobilire Beaumont SA
Immobilire de Gestion Financire SA
Immobilire du Quartier K SA
Immobilire Royale SA
Le Domaine Srl
Louisiane SA
Marial Immobilire SA
Mediterranean Holding SA
Parcip SA
Soludee SA
Solndec Developmcnt Sarl
Union Financire Immobilire
Luxembourgeoise SA
General Mediterranean Holding
(Mauritius) Ud
Socit Famarex Sl'l
British Virgin Islands
British Virgin Islands
British Virgin Islands
British Virgin Islands
British Virgin Islands
Real Estate
Real Estate
Hotel Management
Investment Holding
Invcstment Holding
Real Estate
Hotel Management
Hotel Investmellt
Hotel Investment
Power Generation
Hotel Investment
Real Estate
Real Estate
Telecom Investment
Investment Holding
Hotel Management
Real Estate
Investment Holding
Real Estate
Real Estate
Real Estate Management
Investmcnt Holding
Real EBtate
Investment Holding
Investment Holding
General Contractol's
General Contractors
Real Estate
Investment Holding
Real Estate
11. Non-Current Assets . Investment in Associates and S\lbsidiaries (continued).
Socit lmmobilil'e du Bld de Bordeaux SA Moracco Real Estate
Beslon Services Inc Panama Investment Holding
CV Investmellt Corporation Panama Securities
Continental Cargo &Trade Services !ne Panama Aircraft Leasing
Fintrade Services Inc Panama Trading &Consulting
Geralton Invcstment SA Panama Investment Holding
Hornilia Company SA Panama Investment Holding
Jodrel1 Investment Corporation Panama Ah'craft leasing
Matlane Sel'\Tces Inc Panama l11vestmcnt Holding
Middle East Finance Corporation Panama Finance
Triclor Services Ine Panama Finance
Tropic Petroleum Corporation Panama Real Estate
HoteI Miguel Angel SA Spain Hotellnvcstmcnt
Aviation G5 AG Switzerland Aviation
Al Ofuq (Hol'j;wn) Pvt Syria Real Estate
Blissful Life Ud United Kingdom Retail Pharmacies
General Mediterranean Holding (UK) Ltd United Kingdom lnvestment Holding
GenMcd Commercial Finance Ltd United Kingdom Finance
GM Airlincs Ltd United Kingdom Air Fl'eight
GM Finance Ltrl United Kingdom Finance
GMI-l Motorsport Url United Kingdom Sport Management
Hyde Park Estatcs Ud United Kingdom Real Estate Management
Meditech (UI{) Ltd United Kingdom IT
Rootcare Ltd United Kingdom Retail Pharmacies
For the purposes of consolidation the following company has been included in the 2011 finaneial stutements as the
company iB conlrolled by the majority shareholdcrs of General Mediterranean Holding SA 8PF.
Express Asia Limited HongKong Finance
Notes to the Financial Statemcnts
The Group's principal partially owned subsidiaries at the year end are shown below, togethel' with the effective percentnge
hcld, directly 01' indirectly, lIy Genel'nl Meditel'l"anean Holding SA.
Egypt Hotel Investment
Egypt Hotel Investment
International Continental Hotels Co. SAE
Mcditerranean Hotei Company SAE
Rowad Misr Company for
Tourism Investment JSC
Compagnie Europenne d'Htellerie SA
General Mediterranean
'l'ouristic & Industrial Invcstments Co.
General Mediterranean Real Estate Ltd
Central Hill SAL
General 'J'ourism Holding SAL
IItaI'at wa Abnia SAL
Leisure Hill SAL
Libanogl'ade Regency SAL
Compagnie Internationale de Participations
Bancaires et Financires SA (Cipai)
Luxembourg Real Estate Conlpany SA
Compania Rentistica SA
Complex Commercial Achtar Srl
Pcshcll SA
Gen Med 'J'ours SA
Loisirs Club Hammamet SA
China Manufacturing
Solutions Ltd
Arabie News Broadcasting UK Ltd
Itnlgrade Ltd
Middle East Online Ud
Tucan Investments PIc
Rivel'side District Development LLC
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United States
Hotel Investment &Management 56.4
Hotel Management 55.0
Hotel Investment 96.0
Real Estate 96.1
Hotellnvestment 93.8
Hotel Investment 86.1
Hotel Investment 80.6
Hotel Investment & Management 93.8
Hotel Investment 93.8
Equity and Securities Investment 96.0
Real Estatc 90.0
Real Estate 80.0
Real Estnte 80.0
Hotel Investment & Management 80.0
Real Estatc 68.0
Hotel Investment & Management 95.0
Hotel Investment 96.0
Metal Fabrication 51.0
News Broadcasting 76.0
"rading & Consultancy 96.7
Inte1'llctive News 55.0
Real Estate 91.1
Real Estat.c 85.8
Notes to the Financial Statemcnts
1L Available for sale' Financial asgets
2011 2010
('000 'OOO
Available for sale inveslments
Quoted 17,496 6,554
Unquotcd 41,389 102,339
58,885 108,893
The moveroents in available for sale non-CUl'rent financinl assets during the year were as folloWll:
Balance al beginning of lhe year
Reflected direetly in equity
Reflected in profit. and loSB
Balance at end of the year
108,893 dUl'iIJg /lJe peliod
In October 2010, the Group l'eceived an offer in the forro of shares and cash from Vimpel Corn Limiled for the Group's
investment in the shares of WIND Telecom SPA (formerly Weather Investmenls SPA). In 2011, the offor was revised to
cash terma only and on 8 April 2011, the Group accepted the cash oCfer. In the fmancial statements at 31 Decerobel' 2010, a
provision of 32.7 million was made against the carrying value of Wind Telecom Spa in order lo reflect the anticipated
impairment in the value of the investment. In 2011, the investment was sold with a Curther loss of 5. 7 million.
12. Inventories
2011 2010
('000 ('000
Raw materials 2,220 3,794
WOl'k in progress 31,570 8,991
Finished goods for resale 9,152 9,357
42,942 22,142
Under paragraph 40, 42 and 45 of lAS Il Construction Contracts, the Group would ordinarly be required to disclose
additionnl information IIbout the construction contracts . However, as the Directors do not consier that this would provide
uaeCul additional information, this information has not been disclosed
13. 'l'rade and ather receivables
Trade rcceivables
Amounts owed by associate companies
2011 2010
116,325 196,451
61,359 24,114
176,684 220,565
14. Financial aasets nt fair value through profit alld lOBS
Fair value through profit and loss held for trading
A total of 52 million (2010 - 53 million) haB bean pledged as security for bank facilities and borrowings.
15. Cash and cash equivalents
Cash at bank at 31 Decembcr 2011 did not include any amounts pledged as security for bank facilities or otller
borrowings (2010 - Nil).
16. CUITent liabilities: '!'rade and other payables
Trade and other creditors
Construction progress payments
17. CUITent Liabilities: Loans and borrowings
Bank toalls
Bank overdraft
The terme and conditions associated with these facilities are disclosed in note 18.
Notes ta the Financial Statements
18. Non-current liabilities: Loans and borrowings'
Subordinated convertible participating notes
Secured bank loans
Shareholders' loans
Other liabilities
2011 2010
('000 'OOO
163,639 142,427
11,288 16,200
174,927 158,627
2011 2010
140,000 140,000
90,274 103,681
13,741 9,458
53,859 20,318
297,874 273,457
Banle lonns and ovel'drafts; significllllt terms and conditions
2011 2010
CUl'rcncy EXCCS50VC)' Overdrafts Lonns Loans Overdrafts Lonns l.oans
intcrbanll ratc <1 yenr >1 year <1 yenr >1 ycar
+;'000 'OOo +;'000 ('000 +;'000 ('000
Euro 0.65% t.o 2.975% floaiing 7.303 73,694 37,492 4,883 68,531 8,929
USD 0.65% to 5.0% fioating 39 61,481 3,8n 61,624 47,239
GBP 0.0085% to 2.75% floating 4 16,673 7,048 4,061 2,301 15,438
JOD 2.5% floating 2,173 6,278 12,388 2,686 5,187 9,734
EGP 3.75% ta 13.0 floating 958 2.175 28,040 34 3,913 17,457
TND 1.0% to 3.0% floating 811 674 1,945 665 871 1,415
Other 1.0% ta 5.0% fIoating 2,664 3,361 3,469
11,288 163,639 90,274 16,200 142,427 10S,681
Intercst rates are based primarily on Libor or equivalent interbank offered rates in other countries. Thcre i& no material
diffel'ence bctween the fair value and the book value of these loans. Secul'cd Loana are repayable ovel' fi pel'iod of up to 8
yeal's. Credit facilities of the equivalent of 215.5 million (2010 . 211.2 million) are secured on certain properties included
in these accounts at a net book value of 824.8 million (2010 . 811.9 million). Shareholders' loans are interest free and
have no fixed date for rcpayment. The subordinated convertible participating notes are convertible ilito 7,000,000 ordinary
ahares at a priee of 20 pel' share until the year 2017 at the option of either the note holder or the parent comlJany. These
notes entitle the holders to interest at the rate of 1.5% pel' annum and in addition 10 a ahare of profits of the company up to
a rate of 20% pel' annum of the nominal value ofthe notes. not ta exceed the equivalent of the cumulative aggregate of the
dividends paid by the company to its shareholders.
Notes ta the li'inanciul StntemeutB
19. Deferred tux
Defened lax il' calculated in full on tempol'ary differences under the liability methad using tax rates which vary from 15 %
ta 30% (2010 - 15% ta 30%) in accordance wi th the rates applicable in the jurisdiction for tax purposes of the (Jroo p's
subsidiuries. The movement on the deferred tax lIccount, including amount8 included in profit or lORS and am()unts
recognised in other comprehensive income are as follows:
At 1 January
Recognisedin profit Bnd JOBS
Tax expense
Recognisedin otl1el' c0111pl'ehensive income
Revaluations of property and available for sale invcstments
Other movements
Changes in tax rates Crom prior yeurs
At 31 December
Details of the deferred tux liability Rl'e as follows:
Accelerated capital allowances
At 31 December
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries, as the earnings are generally reinvested
by the Group and there is no intention to puy dividends and therefore no tax arises on them in the foreseeublc futul'e. No
deferred tax assets have been l'ccognised (2010 - Nil).
20. Share Capital
Ol'dinary shares of 20 cach
Authorifled - 25 million shares
Issued, called up and f\.dly puid - 17.5 million shares
Notes ta the Financial Statemellts
21. Related Party Transactions
a) General Mediterraneen Holding SA ie a Luxembourg holding company which is controlled by a number of
shareholders each of whom is coneillered to he a l'e1ated pal'ty. As bolders of subordinated convertible
partidpating notes maturing on 31 December 2017, interest a 2.1million (2010 - 2.1 million) is payable ta the
b) Shareholders'Ioans of13.7million (2010 - 9.5million) rcpayable on demand, are due from companies over which
certain Direetors have a significant influence. No interest has heen charged for the yeal' 2011 (2010' NiJ).
c) Key management those pCrSOllS having authority and responsibility for planning, directing and controlling
the activitics of the Group and comprise the Dircctors of the Company. Remuneration paid to key management during
the yeal' totalled 0.7million (2010; 0.7milIion) and are in the form of short term employee henefits.
22. Finandal instruments and risk ma11agement
Details of the Group's financial aesets and liabilities are set out bclow, together with an analysis ofkey risk exposures. At
both 31 Decernber 2011 and :n December 2010, the fair value and the book value of the Group's fina11cial aasets and
liabilities were materially the Barne.
Financiel assets
A summary of the Group's financial assets js as follows;
Available for sale financial assets
Trade l'eceivables
Other receivables
Other financial assets hcld for trading at FV'l'PL
Cash B11d cash cquivalents
2011 2010
('000 'OOo
58,885 108,893
127,134 196,451
49,550 24,114
82,850 113,852
25,294 29,357
In accordllnce with rAS 39, available for BaIe assets are clnssified as available for sale, other financial assets are classified
as at fair value through profit and loss and trade receivables, other l'eceivables and cash are classified as loan8 and
Notes to the Financial Statements
22. Financial inst1'uments and risk management (continued)
Current year
Financial nssets measured at fair value:
Level1 Leval 3 Total
Quoted Unquoted
'OOO t;'ooo ('000
Available for sale financial assets 17,496 41,389 58,885
Other financial assets 68,791 14,059 82,850
86,287 55,448 141,735
Financial aallets measured at fair value:
Level1 LeveIS Total
Quoted Unquoted
'OOO 'ooo 'OOO
Available for sale financial aeBets 6,554 102,339 108,893
Other financial assets 100,921 12,931 113,852
107,475 115,270 222,745
Notes to the Finllncial Statements
22. Financial instruments and risk management (rontinued)
The fair value of quoted securities ia based on published market priees. The fair value of the unquoted securities is based
on expected cash flows.
Available for sale finaneial Rasets are dcnominated in the following currencica:
2011 2010
'000 '000
EURO 61,869
USD 40,453 39,286
EGP 7,517 7,798
GBP 10,529 2,004
JOD 9 7,559
Othel' currencies 377 377
58,885 108,893
Trllde 811d other receiv8bJes
The Group's maximum exposure to credit riak iB equivalent to the carrying value of its trade and other receivables balance
at 31 December 2011 and 2010.
Undcr paragraph 37 (a & b) of 1FRS 7 Financal Instrumenta: disclosures, the Group would ordinarily he required to
disclose information about the age of financiaI B8sets and information about impaired financial Rasets. However, as the
Directors do not consider thnt this would provide seful additional information, this information has not been disclosed.
Balance at beginning of the year
Charge to the income statement
Balances Wl'itten off
Balance at end of the year
Notes to the Financial Statements
22. Financial instruments and risk management. (continued)
Trade l'cccivables are denominated in the following currcncics:
2011 2D10
t'OOO t'oao
EURO 27,118 142,279
USD 12,856 11,110
GBP 10,299 9,976
LBP 11,516 11,619
EGP 20,411 4,763
JOn 19,961 4,547
Other currencies 13,165 12,257
116,325 196,451
The amounts shown abova are disclosed net of the provision for bad and doubtful dabts.
Other finands/ assets
The movement on current asset investments during the year WaB aB follows:
2011 2010
Balance st beginning of year 113,852 124,828
Additions 13,673 21,555
Disposals (30,558) (22,568)
Revaluation (14,117) (5,901)
Rec1assifications (4,062)
Balance at end of year 82,850 113,862
Notes to the Financinl Statemellts
22. Financial instruments and risk management (continued)
Current finnncial a88et6 are denominated in the Collowing currencie8:
2011 2010
EURO 675 849
USD 50,484 80,604
EGP 2,618 4,OB8
GBP 12,644 12,334
JOD 9,960 11,B06
Other currencies 6,469 4,271
82,850 113,862
The Group's financial liabilities comprise amounts due ta suppliera arising from trading activities and amounts due ta
financial institutions and shareholders for liquidity and long tenn fUllding purposes. AlI financial linbilities arc held at
amortised cost.
Notes to the 1?inl.lncial Staterncnts
22. Finnnciai instrnmcnts and risk managemellt (continuedJ
The following table sets out the contractunl maturity analYBis of the Group's financial liabilities arising from trading
Trnde Construction Depositll
payables projects
Payable terms:
203,992 16,374
Between 3 months and 1 yenr
203,992 16,374
Trade Construction Deposits
payables projects
Payable terms:
t'OOo ('000 ('000
On dernand
304,766 9,025
Between 3 months and 1 year 33,863 1,004
338,629 10,029
Current financialliabilities are denominated in the following currencies:
20n 2010
t'OOo 'OOO
80,432 180,254
48,987 49,751
21,274 39,452
25,389 26,549
13,245 21,330
13,2215 9,649
7,366 8,355
2,694 6,285
2,289 3,540
413 867
othel' cun'encies
5,053 2,626
220,366 348,658
Notes tn the FiJ1anciaJ Stateruents
22. FinanciaJ llstl'ument6 and management (cfmtinlled)
LiabilitieB to Iinancl1 institutions and shareholders
A maturity analysis of IImounts due to finllllcial institutions and sharcholders together with TJrincipal terms is set out in
note 18.
SlJ81'8 cnpita10nd j'eSelVes
Sharc capita]: '['he shal'e capital is 350 million and represcnts the shal'eholders' fixed investmcnt in the company, The
Group has also received Il Subordinated loan of 140 million. The lotal of 490 million i5 considered by management ta be
the total capital managed by the Group,
Revaluation rcserve: This represents the surplus arising from adjusting the histol'c values of assets ta current market
Cumulative tl'anslation reserve: This compl'ises the accumulation of fOl'cign exchange differcnces arising from the
restatement of nOll"monetary assets and liabilities.
Retained eamings: This reflects the accumulated profits and lasses of the Group,
Legal reserve: The parent company and certain subsidiaries incorporated in relevant juriadictiolls are rcquired ta allocate
5% of their llllnuai profits to a non-distributable legal reserve until the legal resel've of the company is equal ta 10% ofits
issued share capital.
23. Change oflegal statue
On Il May 2007, the state of Luxembourg enacted a law rcgulating private wealth management companies and introduced
the "Socit de gestiolJ de Patlnoinc (''SPF'J company. The ncw law replaced the "1929 Holding Company"
regime and existing companies were required to change thair statua by 31 December 2010, The parent company, General
Mediterranean Holding Socit Anonyme duly complied with the new requirements and changed its status on 31 December
2010, With effect from 1 January 2011, the company is operating under the new regime and has been re-named General
Meditcrranean Holding Socit Anonyme Socit de gestion de Patrimoine Familial ("General Mediterranean Holding SA
8PF") ,