$QQXDO5HSRUW

2014
Kuwait Food Company
(Americana) S.A.K.

50th Annual Report

Established by the Amiri Decree
Dated December 29, 1963

Authorized Capital
Kuwaiti Dinars 40,200,207

Paid Up Capital
Kuwaiti Dinars 40,200,207

Commercial Register No.

4369

Auditors:
Mr. Bader Abdullah Al-Wazzan
Al Wazzan & Co. Deloitte & Touche

Mr. Abdullatif Hoshan Al-Majid

Parker Randall (Allied Accountants)

Head Ofce: State of Kuwait - Shuwaikh Industrial Area

Tel: 24815900
 H.H. THE AMIR OF STATE OF KUWAIT
SHEIKH SABAH AL-AHMED AL-JABER AL-SABAH

H.H. THE CROWN PRINCE H.H. THE PRIME MINISTER

SHEIKH NAWAF AL-AHMED AL-JABER AL-SABAH SHEIKH JABER MUBARAK AL-HAMAD AL-SABAH
Board of Directors

Mr. Marzouk Nasser Al-Khara

Chairman

Mr. Bader Mohamed Abdul Wahab Al-Jouan

Vice Chairman

Mr. Abdullah Mohamed Al-Saad

Member

Mr. Mohanad Mohamed Abdul Mohsin Al-Khara

Member

Sheikh, Abdullah Salem Sabah Al-Sabah

Member

Mr. Faisal Nasser Al-Khara

Member

Mr. Faisal Nezar Ahmed Al-Nesf

Member
 5bbiU`FYdcfh

Report of the Board of Directors

for 2014

Esteemed Shareholders,
By the end of 2014, Kuwait Food Company (Americana) has completed half a century of success and excellence
as one of the leading commercial enterprises in the Arab World and the Middle East in the elds of Restaurants,
Food Processing, Agriculture and Foodstuff trading. Since its inception, the Company adopted a studious strategy of
geographical expansion of its investments along with a qualitative expansion of its activities. The diversication of
investments with their inherent varied levels of risk enabled the Company to mitigate the negative impact of sudden
economic changes on prots throughout the years. This was supported by the keen determination to maintain an
effective balance between the income resources and spending, which led to strengthening its nancial position
over the years. Despite the huge challenges it encountered in the major markets where it operates and increasingly
tough competition it faces, the Company took successful decisions year after year and guided its expansion into
new markets while undertaking additional investments thanks to the foresight, knowledge and experience of the
Board of Directors and the Executive management and their alertness to the winds of change in the business & work
environment. All these success factors qualied the company to achieve the expected revenues and prots. At this
context, it is worthy to note that this would not have been possible without the dedication and efciency of all the
Companys employees at all operational and administrative levels.

The Board of Directors would like to express its profound gratitude to all our shareholders and customers who have
been all along with the company step-by-step and provided the much-needed condence to face the challenges
and crises over the years which has been the key element in our Companys success.

Esteemed Shareholders,
The Board of Directors is pleased to present to you the 50th annual report in which we review the major challenges
faced by the Company and the signicant achievements made during the year. With the will of God, We look
forward to a future full of continued excellent performance crowned by the achievement of our goals.
In this report, we will review the Companys consolidated nancial statements for the year ended 31.12.2014 as
well as highlight the outlook of the Company.
The Company achieved sales amounted to KD 922 million (US $ 3.2 billion) during 2014, compared to KD 867
million last year with 6% growth over the previous year. Despite all the tremendous challenges faced during the year,
the company achieved Net prot after the results of nancial portfolio, amounted to KD 52 million (US $ 183 million),
growing by 3% compared to KD 50.6 million last year.

7
 Americana Half a Century of Excellence and Success:
This year, Americana celebrates the ftieth anniversary of its establishment. It is indeed a proud moment for the
Company to celebrate the Golden Jubilee Year-2014 of its incorporation thanks to the never-ending support
and condence of Board of Directors, Shareholders, Customers, and all other stakeholders in all the countries
where it operates. Since its inception, Americana went through successive phases of development and progress.
Incorporated in December 1963 under the name Americana Food Manufacturing and Distribution Company,
the Company had a rather limited activity during the second half of 1965 with sales amounting to KD 76 thousand
and losses of KD 33 thousand. Since then until the beginning of 1969, the Companys overall scope of work was
linked to traditional commercial policies and systems limited to import and distribution of canned, dry and liquid
foodstuffs in addition to fresh and frozen meat.
At the end of 1969, the late Mr. Nasser Mohammed Abdelmohsen Alkhara, was elected chairperson of the
Board of Directors, and brought about a stunning leap and paradigm shift in the companys business strategy and
management style. Under his stewardship, the Company developed a vision and a strategy that sought to keep
abreast with the latest developments in the domestic and international markets. Shortly afterwards, Americana
entered a new business eld: the Fast Food Restaurants business. It opened its rst restaurant of the worlds most
famous chain at the time, Wimpy at Ahmadi in February 1970, followed by Wimpy Fahad Al-Salem Street in March
of the same year. Eventually, the efforts of the Board of Directors were rewarded with the rst prots, amounting
to KD 4 thousands in the year 1971. Since then, Americana never looked back by achieving consecutive success
and higher achievements year after year.

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 5bbiU`FYdcfh

Mr. Marzouq Nasser Al-Khara became the chairman of Board of Directors

in April 2004. Under his leadership, Americana continued to ourish,
achieving further development and attaining higher levels of excellence
Sales
3.2
2014 Billion US dollars
and maintaining its leading position in the elds of restaurants and food
processing. Through the tireless efforts of the Board of Directors and the
executive management and the dedication of all its employees, the Company
is well positioned to achieve further achievements and attain greater levels
of success for many years to come by the grace of God. Net Prot
183
2014 Million US dollars
The following table & graphs show the development of the Companys sales,
prots and number of employees over the past thirty years:

Multiplier Multiplier Multiplier

for the for the for the
Period Period Period
Description 1984 1994 (times) 2004 (times) 2014 (times)

Sales (KD million) 24.6 90.3 3.7 201.4 2.2 922.4 4.6

Net Prots (KD million) 1.7 6.4 3.8 23.5 3.7 52.0 2.2

Number of Employees
2 8 3.6 20 2.5 66 3.3
(Thousands)

Sales (KD Million) Net Profit (KD Million)

1984 24.6 1984 1.7

1994 90.3 1994 6.4

2004 201.4 2004 23.5

2014 922.4 2014 52.0

Americana has been blessed with seven elements of Excellence. These are:

Pioneering, Universality, Diversity, Development, Efciency,

Team spirit and Social Responsibility

These elements, which were highlighted in past reports, formed an integrated

work matrix that guides performance, help unify goals and focus efforts to
achieve best possible results.

9
 The Core Pillars and Uniqueness of Americana:
Most business companies draw plans that include high expectations of expanding the volume of their business,

thereby increasing their revenues and prots. However, only limited number of companies can expand continuously

year after year on a sustainable and protable basis. We, at Kuwait Food Company (Americana) believe that we

have the right foundation pillars to achieve the needed development paradigm shift in the Companys business

volume. Americana possesses the elements of excellence & uniqueness that have placed it among the leading

companies in the restaurant and food processing in the entire Arab region. These elements will continue qualifying

the company to achieve sustainable business growth in the long term with the will of God.

The following are the Ten Core Pillars of Americanas Uniqueness:

1. Strong Emerging Markets. 2. Strong Brands.

3. Proven Leadership and Management Capabilities . 4. Strong Tested and Reliable Systems.
5. Diversication Advantages, Operational and 6. Economies of Scale Advantages.
Geographical. 8. Very Sound Financial Position.

7. Strong, Long-term Historical Performance. 10. Platform for Further Growth Beyond Existing

9. Attractive Strong Growth Prospects. Businesses Markets.

Here-under, we will review each of the ten Pillars in depth.

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 5bbiU`FYdcfh

1. Strong Emerging Markets:

Our Arab region has many emerging markets that have achieved
Number of

unprecedented growth in the past decades and it is certainly capable to

Countries 13
continue this trend for several decades to come. Most of these markets
2014
enjoy high disposable income and high consumer spending levels in
addition to young fast growing population, which happens to be the
dominant segment of the Companys customers. This area of the world
is considered as the most sough-after region for multinational brands Number of
looking for high growth markets. Cities 105
2014
Americanas restaurants and factories are located in 13 countries,
Kuwait, Kingdom of Saudi Arabia, United Arab Emirates, Qatar,
Kingdom of Bahrain, Sultanate of Oman, Arab Republic of Egypt,
Jordan, Lebanon, Morocco, Iran, Kazakhstan, and the Kurdistan
province of Iraq. The Companys restaurants can be found in 105
cities spread across the continents of Asia and Africa. The companys
activities are primarily focused in four countries namely, Kuwait, Saudi
Arabia, UAE and Egypt.

The Kuwaiti Market: Kuwait is an important market in the

Middle East for the franchise business in general, as it possess the
characteristics of attraction to the worlds most leading brands. It is
an ever-expanding market in terms of the size of population and the
diversity of expatriate community with a population of 4 million, out
of which 54% are under 29 years of age, and the per-capita share of
GDP exceeds US $ 42 thousand. Population is expected to grow at
the rate of 2.9% between the years 2013 and 2018 and the consumer
spending will grow at the rate of 7%.

The Saudi Market: The Saudi market is one of the most attractive
investment market in the region, with a growing population having
huge purchasing power capacity. This market is expected to achieve
considerable growth during the coming few years with a population
exceeding 30 million, out of which 65% is younger than 29 years of
age. The countrys GDP grew at 3.6% in 2014 and the per-capita share
of GDP is expected to grow at 7% per annum during the period 2013
2018, with an average population growth rate of 2% and a consumer
spending growth rate of more than 11%.

11
 The UAE Market: A promising market par excellence! Dubais success in winning the hosting of Expo 2020
reects a strong international condence in the economic position of the UAE. The UAE has a population
of 8.5 million, approximately 34% of whom are under 24 years of age. GDP grew at 4.3% in 2014, while
population is expected to grow at the rate of 1.3% per annum during the period 2013 2018, and consumer
spending growth is expected to exceed by 7% during the period.

The Egyptian Market: The Egyptian market is one of the biggest foodstuff and retail markets in the Middle
East. Approximately 60% of the countrys population of 88 million are younger than 30 years of age. In 2014,
real GDP grew at 2.2% despite of the political instability witnessed by the country. Egypts population is expected
to grow at 2.4% p.a. during the period 20132018 while the consumer spending will grow at more than 10%
p.a. during the same period.

2. Strong Brands:
Americana is one of the most popular and prestigious brands in the Middle East. This reputation has been
achieved through both its Restaurants and Factories in the region and by its unique products distributed in
several other regions around the world.
- The Americana brand is a unique brand in the Food Processing. As the brand Americana has so far
been used for a limited number of FMCG products, it still has a huge potentiality to be used in a wider range
of other food consumer goods segment.

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 5bbiU`FYdcfh

- Americana holds the exclusive right for using the most famous and
popular brand names in the world, with 14 global restaurant chains
and 9 home-grown chains developed by Americana.

- The Company operates 678 outlets of the world famous fast-food

brand Kentucky Fried Chicken (KFC), the largest and fastest
growing brand in the emerging markets, with 18,800 restaurants in
118 countries. The Company also operates 169 outlets of Pizza Hut,
another giant chain with 14,900 restaurants in 90 countries. It also
operates 282 of Hardees restaurants, a leading burger brand that
has 3,300 outlets in 29 countries.

- Americana has 52 TGI Fridays restaurants, the most unique casual

dining restaurants chain which has more than 900 such restaurants in
60 countries. Americana also operates 14 Olive Garden, Longhorn
Steakhouse and Red Lobster restaurants with these chains having
around 2,000 such restaurants worldwide.

- The company operates in addition to the above, other global chains

such as "Baskin Robbins" and "Krispy Kreme" and other home-grown
chains, such as "Chicken Tikka" and "Fish Market" and others.

- Furthermore, Americana owns and operates a range of popular

brands in the FMCG sector, including Americana Meat, Americana
Cake, Farm Frites, California Garden, Greenland, Lion,
Zigo and Windows at Senyorita Company, and Koki, Gulfa
and other reputable brands.

3. Proven Leadership and Management Capabilities:

The company achieved a ground-breaking formula of success over the
years by blending the corporate discipline with the entrepreneurial spirit,
a blend which rarely achieved in the world of business, more so in large
enterprises, for it requires unique leadership skills. The unprecedented
success is owed to the Board of Directors who formulate and articulate
the vision, put the strategies and provide support to the Management
in order to implement such strategies. The existing management have
developed a wealth of experience working for the company through
numerous difcult situations and tremendous challenges, beneting from
the international exposure and local and regional practice.

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 The management has a long track record in delivering the objectives of our stakeholders, with great emphasis

on maximizing the shareholders value. Importantly, the company strives to provide an attractive work

environment that enables the human capital to achieve their goals. The Management has also earned the trust

of the various parties who deal with the Company such as suppliers, banks and other parties, and has never

failed to discharge its commitment to the societies in all the countries where it operates.

4. Strong Tested and Reliable Systems:

Knowledge is one of the most valuable assets of Americana that is accumulated over the years. The
Management succeeded in developing effective systems within the company to increase efciency and
improve the learning curve of employees. The company has also continued the process of developing a
set of systems that have an inuential role in strengthening their capacity for growth. For example, the
Home Delivery and Call Centers systems, which have been highly accepted and appreciated by our
franchisors.

In addition, the Company has achieved a remarkable success in developing large number of operating systems
in FMCG eld, particularly the logistic systems, increasing the efciency of the procurement and storage through
effective Supply Chain system and developing the Online Bidding system. These systems have been quite
instrumental in controlling the costs, thereby increasing competitiveness and promoting growth opportunities.

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 5bbiU`FYdcfh

5. Diversication Advantages, both Operational and

Geographical:
From the beginning, the Board of Directors and the Executive
Management emphasized diversication as a strategic direction of the
business as it ensures the Companys sustained growth at the highest
level for a maximum possible period. Initially, it was the diversication
in the Quick Service Restaurants based on diversity of the products
offered (chicken, burger, pizza and others). The same approach was
then followed in the Casual Dining Restaurants (CDR), Coffee Shops
and Confectionary Desserts Shops as well.
Expanding to the FMCG business was also one way of implementing
the diversication strategy. Meanwhile, Americana is managing several
FMCG companies such as Farm Frites, California Garden, Senyorita and
Greenland. It also operates Agriculture and land reclamation companies
such as Americana Land Reclamation and Cultivation Company and
Karwin Land Reclamation Company. In addition, the company has an
active Trading business throughout the Commercial Agencies division in
Kuwait, poultry breeding and poultry product processing activities, feed
production activities under the umbrella of Cairo Poultry Group.
Diversifying geographically aims at reaping the economic benets in
the countries where we operate and avoid the negative impacts of
concentrating activities on a narrow geographical scale. This led to
the presence of the companys restaurants and factories in 13 countries
spread across Asian and African continents.

6. Economies of Scale Advantages:

Obviously, the large volume of any business would grant it huge
competitive advantages over the existing competition. This means
increased stability and more bargaining power, both of which lead to
an increased ability to provide adequate resources for buying the most
modern operating equipment needed for production and capturing the
protable investment opportunities as they arise.
The large size of the business operations enables Americana to
undertake central and combined marketing activities, and provides
a huge advantage for other centralized consolidated services such as
nance and human resources, granting the company greater exibility in
negotiations in addition to providing a strong support for the continuity of
sales and prots future growth.

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 7. Strong, Long-term Historical Performance:
Despite the various and diverse crises that rocked the markets, some of which were economic while others

were political and health-related issues such as Avian Flu, the Mad Cow Disease and other crises. Thank God,

Americana always deals with such crises and emerged even more safer and stronger there after. As a result, the

experience curve of all company employees have risen as evidenced by the operational performance record

as the companys sales rose in 2014 by 4.6 times in their value compared to 2004 (from US $ 709 million in

2004 to US $ 3.2 billion in 2014).

8. Very Sound Financial Position:

The strong nancial position of the company has been its strongest supporting element in face of the tough

competition in the markets. For this reason, the company seeks to maximize shareholders equity and to

strengthen the nancial position and nancing structure in order to increase its future ability to achieve

expansion and spread.

- The companys total Assets amounted to KD 688 million (US $ 2.4 billion) and the Net Book Value of the

Fixed Assets stood at KD 247 million (US $ 846 million).

- Net shareholders equity after cash dividends amounted to KD 329 million (US $ 1.1 billion).

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 5bbiU`FYdcfh

- The company has an excellent cash conversion ratio and therefore

enjoys a strong position that enables it to provide adequate level of Balance Sheet
liquidity, as it may need to fulll its obligations in a timely manner. Footings 2.4
2014 Billion US dollars
Average daily cash sales of the Companys restaurants amount to
US $ 5 million, while the balance sheet as at the end of 2014
shows that total debts declined by 18% during the year reached
to KD 67.4 million, and only 10% of companys total assets are
nanced through bank debts, which provides good opportunity for Shareholders
the company to nance future expansions. Equity 1.1
2014 Billion US dollars

9. Attractive Strong Growth Prospects:

The eight advantages possessed by Americana as outlined above
denitely placed the company in a better position than its competitors
to continue expanding its existing activities and markets. This should
help achieve the companys outlook to double the size of its turnover
and prots in the future through the unique quality of its existing
activities, this vision will come true through new restaurants opening,
new restaurant chains and also expanding the FMCG activities by
adding new production lines, offering new products and increasing its
access to new segments of customers in the local markets.

10. Platform for Further Growth beyond Existing Businesses and

Markets:
The previous elements of excellence serve as the core pillars that provide
a platform for moving ahead toward greater expansion and growth
of the Companys business outside the existing scope of activity. For

example, the strong and successful business relations with the franchisors
qualies the company to launch new expansion which drives beyond
the limits of the present markets, such as expanding into new markets for
the Companys restaurants in Europe and North Africa. The Company
also has the necessary material and human capabilities to expand its
FMCG activities through new acquisitions or establishing industries that
complement the existing activities at the domestic or regional levels, and
to export their products to new markets.

17
 Key Performance Indicators for 2014:
Maintaining a stable operational performance under the ever-changing external circumstances while achieving
a steady growth in sales and market share, is basically based on creating an added value for our customers and
controlling the negative impact of adverse inter-related external economic, geo-political and social factors beyond
the companys control. The company can, however, draw plans and set procedures to ensure dealing with such
factors in a manner that minimizes their negative impacts on the business results.
The company has succeeded in recent years to overcome many of the challenges faced in the markets in which
it operates through efcient risk management, careful & conservative study of the investment opportunities,
diversication of investments, improving the quality of products, expanding the customer and consumer base. The
following table shows the Key Performance Indicators of the company during the past ve years:

Description 2010 2011 2012 2013 2014

Sales (KD million) 680.7 720.8 809.6 866.9 922.4

Net Prots (KD million) 46.2 48.0 45.9 50.6 52.0

Shareholders Equity after Dividends (KD million) 307.7 266.0 287.9 302.3 328.6

Return on Average Equity 16% 17% 17% 17% 16%

The above table reects the stability of the companys prots during the years 2010 to 2012 despite being affected
by the inconsistent performance of the companys Available for Sale (AFS) portfolio during those years under the
impact of the global nancial crisis on the regions stock markets. It also reects the companys resilience by its
ability to compensate such negative impact of the crisis through a higher focus on the operating performance.

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 5bbiU`FYdcfh

U Sales:
The Companys sales for the year amounted to KD 922.4 million at a
growth rate of 6% YoY, with an average annual growth rate of 7% in
the past ve years.

Sales (KD Million) 922.4

866.9
809.6
720.8
680.7

2010 2011 2012 2013 2014

The above graph reects the Company success in achieving sustained

sales growth driven by the continuous expansion of its customer base
through a plan to add new production lines, opening of new restaurants
chains having New Concepts and expanding into new markets and
new cities.

U Prots:
The Companys prots in 2014 including the results of AFS portfolio,
amounted to KD 52 million compared to KD 50.6 million in 2013, with
a growth rate of 3%.

Net Profit (KD Million)

50.6 52.0
46.2 48.0
45.9

2010 2011 2012 2013 2014

The above graph reects the success of the company in mitigating the
negative effects of the global nancial crisis that broke out in 2008,
and then the effect of the fundamental political changes witnessed by
the Arab region since 2011 in what is so called the Arab Spring
Revolutions. The impact of which shook many of the markets in which
the company operates or in which its products are present, all of which
had an adverse effect on the operating prots and on the performance
of the AFS portfolio.

19
 U Shareholders Equity:
The interest of the Companys shareholders is the major priority of the Board of Directors on both long and
short term. Hence, the Board focuses on the ways to consolidate and strengthen the Companys nancial
position, diversify the sources of income and strengthen its nancing structure in order to fulll shareholders
expectations of increased business volume and prots. Net shareholders equity at the end of 2014 (after the
proposed dividends) amounted to KD 328.6 million with a growth rate of 9% over KD 302.3 million at the
end of the previous year.
400 Net Equity (KD Million)
328.6
307.7 302.3
287.9
300 266.0

200

100

0
2010 2011 2012 2013 2014

The previous graph reects the impact of the global nancial crisis and the political changes witnessed by the
region in the past few years on the Kuwait Stock Exchange and the resulting decline in the Fair Value Reserves
component within the shareholders equity in 2011. It shows the Companys ability to absorb this decline and
continue to build up the shareholders equity through its operating prots.

The activities of Kuwait Food Company (Americana) are divided into the Restaurants and Retail activities, Food
Processing & Trading activities and the Financial Portfolio Investment. Each activity will be briey discussed in
this report.

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First:
Sales of
The Restaurants and Retail Restaurants
Sector
1.9
Billion US dollars
Activities: 2014

2014 was yet another year of achievements for the restaurants and retail
activities of the company during which the sectors sales exceeded half a
billion Kuwaiti Dinars to reach KD 531 million (US $ 1.9 billion), with a
9% growth rate over the previous year as 94 new restaurants and outlets Number of
were added indicating that the company opened a new restaurant at an Restaurants 1,556
average rate of every 4 days during 2014. The rst Americana restaurant 2014
was opened in the Kurdistan Province of Iraq this year, where the company
has an ambitious plan to expand its investments.

The following table shows the development of the restaurants and retail
activities over the past ve years:

Description 2010 2011 2012 2013 2014

Sales (KD million) 365.3 397.5 452.2 489.1 531.4

Number of Restaurants 1,233 1,301 1,366 1,462 1,556

Number of Chains 20 21 22 23 23

Number of Cities 87 91 98 100 105

Number of Meals (million) 175 195 220 230 250

The following graph illustrates the development of Americanas restaurants

and retail division sales and number of restaurants and outlets operated by
the company over the past ve years:

Restaurants & Retail Sales (KD Million) No. of Outlets

531.4 1556
489.1 1462
452.2 1301 1366
1233
397.5
365.3

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

Both the previous table and graphs explains how the company succeeded
in maintaining its leadership position as the largest company in the elds of
its activities in the Arab region by relying on the condence of its customers
as is evident from the graph which shows that 323 restaurants have been
added since the end of 2010.

21
 It is worth mentioning that the companys restaurant activity may be divided into ve Clusters:
- The Kuwait Restaurants - The Saudi Restaurants - The Emirates Restaurants -The Egypt Restaurants
- The Restaurants in the other countries (Qatar, Bahrain, Oman, Jordan, Lebanon, Morocco, Iran, Kazakhstan, and
the Province of Kurdistan in Iraq).

The following Graph illustrates the number of restaurants and outlets in each cluster at the end of 2014:

No. of Outlets by Cluster -2014

EGYPT
396
KSA
405

Other Branches
282

UAE Kuwait
284 189

The Companys restaurants may be divided according to their respective chain activities into two main groups: Fast

Food Restaurants and Casual Dining Restaurants.

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 5bbiU`FYdcfh

Fast Food:
Number of
By the end of 2014, the number of fast food restaurants reached to 1,473 Fast Food
restaurants outlets compared to 1,181 restaurants outlets at the end of 2010, Restaurants 1,473
2014
an increase of 292 restaurants and outlets. The fast food chains are divided

into four main groups:

- Quick Service Restaurant chains, which include Kentucky and Hardees. Number of
Casual Dining
- Semi-Fast Food, such as Pizza Hut (UAE, Egypt, Bahrain, Jordan and Restaurants 83
2014
Kazakhstan), Sbarro (Kuwait) and Tikka.

- Caf Concept, which consists of Costa Coffee (Egypt, Jordan, Lebanon and

Kazakhstan) and Grand Caf (Egypt and Morocco).

- Confectionary Chains for the sale of Doughnuts, Ice creams, Oriental

and Western sweets, including Krispy Kreme and Baskin Robbins

(Kuwait and Egypt), Al-Samadi Sweets (Kuwait and Egypt) and the

Maestro chain (Egypt).

Casual Dining:

Americanas casual dining restaurants offer a selection of food to a class of

discerning clientele through its chains of world-class restaurants and local

chains established and developed by the company and acclaimed by the

Companys customers.

- By the end of 2014, the Company had 83 casual dining restaurants

compared to 52 restaurants at the end of 2010, with an increase of 31

restaurants. This is an excellent rate of growth for this class of restaurants,

given the high investment involved and the special nature of these

restaurants.

- The company manages a range of reputed branded casual dining restaurants

chains such as TGI Fridays and Red Lobster, which offer sea food,

Olive Garden restaurants chain offers Italian food in the American style,

23
 Longhorn Steakhouse restaurants offer the famous steak dishes, Fish Market restaurants offer a superb variety

of food for sh & seafood lovers, and many other such chains.

- In 2014, the Company added 4 TGI restaurants to raise the number to 52 such restaurants compared to 36 at

the end of 2010.

- At the end of 2014, the total number of Red Lobster, Olive Garden and Longhorn Steakhouse restaurants

amounted to 14, following the opening of 10 new restaurants in the past two years.

Performance Indicators of the Restaurants and Retail Activities during 2014:

U The total number of restaurants rose to 1,556 with the addition of 94 restaurants during the year. It is worth

mentioning that the Company doubled the number of its restaurants during the past eight years.

U By the end of 2014, the Company had 23 chains, of which 14 were international franchisee chains and

9 of its own chains developed and operated by Americana. The Company has restaurants in 13 countries

spread across Asian and African continents with its presence in 105 cities compared to 87 cities at the

end of 2010.

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 5bbiU`FYdcfh

The following graph illustrates the development of the number of cities in

where the Companys restaurants are found over the past ve years: Number
of Meals 250
No. of Cities 105 Million
91
98 100 2014
87

Number of
Restaurants
2010 2011 2012 2013 2014
Chains 23
2014
U For the rst time in the Companys history, the sales of the Kentucky
chain exceeded one billion US Dollars. Its worth noting that the Kentucky
restaurants achieved an 8% increase in daily sales compared with
2010, while the Hardees chain achieved a 13% increase.
U Underlining its ability to identify and cater for the desires and expectations
of its restaurant customers, in 2014 the Company served more than
250 million meals to its restaurant customers compared to 230 million
means in the previous year, with an increase rate of 9%.

The following graph shows the number of meals served by the Companys
restaurants and outlets during the past ve years:

No. of Meals (Million) 250

220 230
195
175

2010 2011 2012 2013 2014

U The number of the Companys chains in Kuwait reached 14 operating

through 189 restaurants that cover all the governorates and most of its
areas. The Company plans to expand into the new residential areas such
as Jaber Al-Ahmed and Saad Al-Abdullah. A distinctive feature of the
restaurants in the Kuwait market is the increase in the Home Delivery
sales, which have recorded the highest increase at Company level. In
2014, the Company launched the service of on-line ordering through
the website www.kfc-kw.com especially for Kentucky food lovers, which
is expected to increase sales at lower order-taking costs.

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 U The total number of the Companys restaurants and outlets in Kingdom of Saudi Arabia rose to 405 by the end
of 2014 with the addition of 23 new restaurants during the year. Saudi Arabia is witnessing a boom in new
shop openings with 128 new restaurants have been opened since the end of 2010. Furthermore, expansion
within new cities and areas has achieved excellent results.
U The UAE branch continued to implement its ambitious new openings plan by adding 23 restaurants during
2014, representing a 9% increase over the previous year. The Emirates market is one of the most promising
markets in the next few years as the market is expected to benet from hosting the Expo 2020 exhibition
as the Dubai Emirate won the right to host the exhibition last year in addition to numerous mega development
projects being executed in the Emirates and expected to reect positively on the economy of the UAE and the
companies operating in that country. It is worth mentioning that the year 2014 witnessed the opening of the
rst restaurant of The Counter chain in the Emirate of Dubai that achieved good results.
U In Egypt, 11 new restaurants were added compared with the previous year that raises the total of the Companys
restaurants to 396 by the end of 2014. The restaurants in Egypt succeeded in achieving 98% of the targeted
sales and a growth of 19% compared with the previous year in the local currency. For the rst time, the
sales exceeded 2 billion Egyptian Pounds. The Company professionally tackled the numerous difculties and
challenges in Egypt, such as the electricity outage, lack of political stability and security, rising costs of raw
materials and energy and higher taxes. Despite all these challenges, the Egypt restaurants achieved a 13%
increase in net prots during 2014 in local currency compared to the previous year. The Egypt branch will be
facing the challenges in 2015 with a well-studied plan designed to achieve a balanced increase in sales and
prots for the year by the will of God.

26
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U The company has strengthened its position as the world leader in the

Kazakhstan market by adding 17 new restaurants to raise the number

at the end of 2014 to 42 restaurants and outlets through the Kentucky,

Hardees, Costa Coffee and Pizza Hut chains. Net Prots rose by more

than 40% over the previous year. Americana was the rst company

to introduce the Home Delivery service in the restaurants sector in

the country.

U The Companys restaurants in the Sultanate of Oman and the Kingdom

of Bahrain achieved good results during 2014. Prots in Oman have

doubled during 2014 compared with the previous year while net prots

in Bahrain rose by 25% over the previous year (after deducting the

minority interests share).

U Commercial operations of the Companys branch in the Province of

Kurdistan in Iraq started in September 2014 with the opening of the rst

Hardees restaurant, followed by 2 other restaurants of the same chain,

to increase the number to 3 at the end of the year. The rst Kentucky

restaurant will be opened during the rst quarter of 2015. Preparations

are being made for opening the rst TGI Fridays restaurant during

the second quarter of 2015. Hence, the total number of restaurants is

expected to reach 12 by the end of 2015.

U In recognition of Americanas success and excellence, the Companys

restaurants won many awards from several franchisors. These included

the KFC-Yum 5 Star Performance Award, and the KFC-World Class

Recognition Pin Award from Yum. Hardees International awarded

the Company with the Restaurant of the Year Award- Middle East /

Europe in addition to the Star Sales Award - Highest Restaurant Sales

Volume Award and FY 2014 Licensee of the Year Award Middle

East / Europe and $ 1.5 Million $$ Club Award. The Company also

received from Costa Coffee International the Unbeatable Customer

Experience Award, and from Krispy Kreme the Certicate of Hospitality

Award - Hospitality Hero, and from TGI Fridays the Fridays Facilitator

Award along with many other awards.

27
 U The Company continued to provide new offerings for the loyal customers of its restaurants, seeking to satisfy
various customer tastes. In 2014, the Company introduced many new products that were well received and
lauded by customers as Kentucky introduced the Grilled Chicken Twister and the Rice Chicken Meal
varieties while Hardees introduced the Caesar Angus, Steak Loader and Angus Bacon varieties, and
Pizza Hut introduced its Pizza Mia and Pizza Cheesy Toast. TGI offered a new selection of rib meals in
a variety of avors.
U The Company continued to use modern technology in its business operations. These included computer systems
at the restaurants, new decorations and equipment, with a view to keeping abreast with global developments,
improve service efciency, and increase operation control in order to attain higher levels of customer satisfaction
and gaining competitive advantage.
U The Company continued to focus on its human resources as it is one of the most important factors of improving
products and services and achieving customer satisfaction as the restaurants sector directly employs 42,000
persons. The Company continued to offer latest development & training programs for its employees in order to
enhance the performance levels of its restaurants.
U The company continued to focus on its social responsibilities to the communities in which it operates in all areas
that serve the community by contributing to the creation of job opportunities for improving the quality of life
of the citizens of the country in which the companys restaurants operates. Also, by providing work training
programs at the restaurants to the school and university students and by employing deaf and dumb persons
in restaurants while interacting with all the segments of society, in addition to supporting excellence in all
educational, cultural and sports elds.

28
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Restaurants Future outlook:

U Strive continuously to cater for the desires of customers of all age groups
by seeking the help of international expertise in conducting specialized
market studies in identifying customer preferences and their opinions
of the Companys restaurants service and products in order to provide
all the desired new products at appropriate prices with high quality that
ensures maximum satisfaction with proper value for the prices of our
products offered in our restaurants.

U To continue focus on offering high quality products and services, using

the best raw materials, observe the highest levels of hygiene and
providing our services in line with the highest professional service
standards in order to cater for customer wishes and provide an overall
happy ambience at our restaurants.

U To increase focus on introducing effective means of marketing and

promotional tools that would enable us to reach and interact with new
segments of customers, launch promotional offers, present prizes and
gifts at the Companys restaurants, as these proved to have a strong
attraction effect on customers of all age groups, thereby increase further
the popularity of the Companys name and chains resulting in increased
sales and prots.

U To continue introducing new technological means in the operational

work, be it in the area of operating machines and equipment, restaurant
decoration or information technology to keep abreast with global trends
and ensure that the Company maintains its leadership and position
to achieve continuous control of operation by providing high quality
products and achieve customer satisfaction which eventually gives the
company a competitive edge.

U The Company will continue its quest to achieve optimum results through
a strategic vision that emphasizes the achievement of additional savings
in the various aspects of expenditure including enhancing negotiation
efciency with suppliers and contractors to obtain the best prices without
compromising the quality and safety standards set by the Company.

U To improve the supply chain efciency and achieve more benets

from the efcient strategic buying operations of raw materials, reduce
storage time for catering for the needs of the restaurants at the right
time, develop the online bidding system used in connection with the
tenders for the development of new locations and the service contracts.
This should help achieve the desired surpluses during 2015.

29
 U To expand vertically and horizontally by increasing proliferation and diversication of the existing chain of
restaurants by introducing new chains, expanding into new markets for maximizing revenues and prots while
increasing investments in the restaurant activity, focusing on high cash revenue projects on the short term that
supports the Companys liquidity position.

U To maximize return on the existing activities by increasing the number of transactions, thereby leading to
increased prots in that sector without the need to inject signicant additional investments.

U In the coming period, the Company will continue to implement the policy of ongoing evaluation and review of
the restaurants that do not achieve the expected return, and relocating them in order to achieve a more efcient
utilization of the xed assets and improve their productivity.

U The Company will continue to train and enhance the skills of all employees in the Restaurants division at
all layers within the structure. Simultaneously, the Company will emphasize the roles and responsibilities
of the specialized management for each of the main functions within the division namely; KFC chain, other
fast food chains, Casual-Dining chains, the supply chain and logistics, construction and renovation work of
the restaurants locations. That would achieve a quality focus on each of the aforementioned functions and
consequently will improve the performance of the division.

U The Company will continue to develop its efforts in the eld of social responsibility in the communities in all the
areas of its operations. This responsibility is well appreciated and well received by the ofcial bodies and civil
action organizations in order to strengthen the interaction among the company, its customers and all segments
of society.

30
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Second:
Sales of
Food Processing Activities Industrial
Sector
1.5
Billion US dollars
2014
Since the early seventies of the last century spanning over more than 4
decades, the Industrial and Trading Sector of the Company has been the
leading sector in the eld of food industries in the region and one of the
leading and largest foodstuffs manufacturer in the Arab world and the Number of
Industrial
Middle East. Year after year, the sector continued to develop this industry
Activities 25
and achieved considerable success in the markets where the products of
2014
the Company are offered. The Industrial Sector of the Company offered a
unique variety of products of high quality at appropriate prices that gained
customer appreciation and satisfaction. This success led to preserve the
reputation name of Americana in the markets as a synonym of excellence in
the eld of food industries.

Total sales of the food processing activities during 2014 amounted to KD

430.6 million (which includes sales to the Companys restaurants sector,
amounting to KD 39.7 million) compared to KD 413.7 million in the previous
year, with an increase of 4%.

The following graph shows the development of the sales of the food
processing activities during the past ve years (including sales to the
Companys restaurants):

Industries Sales (KD Million)

2010 338.9

2011 353.4

2012 391.7

2013 413.7

2014 430.6

There are 25 units in the Industrial, Commercial and Agricultural units activities.
Their products are present in 25 countries around the world, 17 of which are
Arab countries, in addition to several other foreign countries. The number
of employees in the Industrial Sector exceed 23 thousand direct employees.
The main industrial activities of the company are geographically distributed
among 4 Arab countries: Kuwait, Saudi Arabia, UAE and Egypt

31
 The food processing activities of the company are divided manly into 5 clusters based on the nature of the activity

and the place where these activities are carried out. These clusters are supervised by regional departments that

play an effective role in achieving synergy among them in order to achieve savings and apply the best practices

in maximizing experience. In this, the Companys management relies on highly competent and experienced

professional employees.

The industrial activities in the company divided to the following manner:

Gulf industrial activities which include two managerial clusters:

The Meat Processing Activities cluster in Saudi Arabia and Kuwait.

The California Garden, Gulfa Mineral Water, Cake and Pastry Products and Commercial Agencies.

The Industrial, Agricultural and Poultry activities in Egypt consists of three clusters:

The potato chips, snacks, dairy and cheese products activities group (Senyorita Company Group and

Greenland Company)

The agricultural Food products processing group (Farm Frites, Potato cultivation, frozen vegetable

products and olive products).

The Cairo Poultry Group of Companies and the Egyptian Starch and Glucose Company.

32
 5bbiU`FYdcfh

The following graph shows the contribution of each cluster to the sales of the
Food Processing Sector in 2014 amounting to KD 430.6 million (including
the sales to the Companys restaurants amounting to KD 39.7 million):

Sales Contribution by Cluster - 2014

Cairo Poultry Meat Cluster
Cluster 26% 24%

California Garden
Cluster 20%

Senyorita & Greenland

Cluster 18% Farm Frites
Cluster 12%

The following is a brief outline of each cluster:

The Industrial Activities in the Gulf:

The Meat Processing Activities in Saudi Arabia and Kuwait:

The Meat Factory at National Food Industries Company in the Kingdom

of Saudi Arabia is the largest and most sophisticated in the Middle
East. It is equipped with the most advanced production lines and state-
of-the-art technology in food processing equipment. It is one of the most
important factories in the Arab World for the processing and sale of
meat, poultry and sh products.

The Companys share of the frozen meat products amounted to 42% of

the Saudi market, with an increase of 2% over the previous year, 23%
of the Bahrain market with an increase of 2% over the previous year, in
addition to 15% of the UAE market. The company plans to expand into
the Pakistani market in 2015.

In 2014, the company offered a new variety of products that gained

customer satisfaction. These included spicy crispy chicken llet,
calamari rings, crab ngers and shrimp cocktail. The Company
plans to offer other new products during 2015.

33
 Building on its success and emphasizing its commitment to offer high-quality products, the Company was
successful in renewing the global certicates of standards of food quality and safety such as the Global
Standard for Food Safety BRC and the OHSAS 18001 in addition to the ISO 9001, ISO 14001
and NS-EN ISO 22000 certications.
As usual, the Meats Sector in Kuwait continued its excellent performance during 2014 with excellent sales
and prots growth while maintaining its leadership of the Kuwaiti market with a substantial increase in market
share that reected growing consumer demand for the products of the processed and frozen meat products of
high quality and competitive price.
During 2014, the Meats Sector succeeded in increasing its total market share of meat products in the Kuwaiti
market by 6% to reach 55%. The market share for hamburger meat this year rose to 62% from 57%, the
chicken hamburger to 37% from 30%, the minced meat to 51% from 45%, with a 30% higher difference from
the nearest competitor and the Fillet products rose to 52% from 38%. Meantime, the Sector maintained its
market share of 63% of the mortadella segment of the market.
The Company is currently studying the possibility of further increases of its production capacity to cater to
the increasing demand from our customers. The increased demand reects their continuous condence in the
excellent products of the company.
In 2014, the Company offered a variety of quality products: Marinated beef slices and Marinated shrimp with
mushroom. In 2015, the Company plans to offer new chicken products, including chicken llet with herbs and
with lemon and butter.

34
 5bbiU`FYdcfh

The California Garden, Gulfa Mineral Water, Cake and Pastry

Frozen Meat
Activities: Market Share
Gulf Food Industries Company California Garden: in Kuwait 55%
California Garden is a leading canned food processing companies in 2014
the region. It owns and manages several prestigious brands such as
California Garden, Americana and others. The company offers
all kinds of canned cereals such as beans in various mixes and avors
Canned Beans
produced daily by using the most advanced technologies in the eld
Market
of canned food processing, imports and distributes canned tuna in
Share in 84%
different avors. UAE 2014
Despite the effect of the civil strife events witnessed in several Arab
markets such as Iraq, Syria and Libya on the sales, the company absorbed
the impact of these events by strengthening its presence in other Arab
countries and intensifying its footprint in other markets through stepped-
up export efforts. As a result, it succeeded in increasing its UAE market
share of canned beans products to 84% while enjoying 73% of the
Kuwaiti market and 63% of the Saudi market in addition to raising its
share in the Egypt market to 52%.
In 2014, the company introduced its canned Fava beans with ghee
product, white meat tuna gourmet Gold product, Solid Tuna Gold, White
meat Tuna albacore Gold products. Americana is currently considering
offering new products during 2015, including Indian recipe of fava
beans and chickpeas.
Emphasizing its dedication to quality, the company maintained its
international certications for quality while ensuring its products
complying with the highest international standards through renewing
certicates such as EN-ISO 9001, EN-ISO 14001, EN-ISO 22000
and BS OHSAS 18001.
California Gardens regional management oversees the work of Gulfa
Mineral Water and Processing Industries Company in the UAE. Gulfa
offers mineral water under the Gulfa trademark, which has a strong
presence, is several Arab countries, in addition to its neighboring countries
such as Kuwait, Qatar and Iraq, other than the domestic UAE market.
California Gardens regional management also oversees the commercial
agencies sector in the State of Kuwait. The sector distributes products
under several well-known international brands in Kuwait. These include
Heinz, Divella Italian pasta products in addition to Americana,
California Garden and several other brands.

35
 The Cake and Pastry Activity in Saudi Arabia and Kuwait:

The Cake Sector of National Food Industries Company in the Kingdom of Saudi Arabia is the leading cake
manufacturer in the Arab region and offers an excellent selection of cake, cookies and biscuits products under
the American trademark.

During 2014, the Sector achieves a remarkable growth in sales and now seeks to promote this growth by
expanding into other markets. It is worth mentioning that the Sector covers 28% of the Saudi market for quality
cookies. The Companys products are also available in several Arab countries including Egypt, UAE, Kuwait,
Bahrain and Qatar in addition new products were introduced during 2014. These include the Brownie Cake
with chocolate chips, plain and stuffed cupcakes in a variety of avors and oatmeal cookies.

The Sector maintains a high standard of quality in the manufacturing process in terms of both raw materials and
adopting modern and sophisticated production techniques and advanced quality control methods throughout
the entire production stages. It is worth mentioning that the Galaxy International Company manufactures its
cake products at the Cake Sectors factory in Saudi Arabia, thereby underscoring the high level of condence
they have in the production processes of this Sector which is further supported by the consumer condence the
Sector gained from the time it rst started production in the mid-1970s.

In 2014, the Cake Sector in Saudi Arabia succeeded in renewing the quality certicates it had obtained in
previous years. These include the ISO 9001 and the Food Safety Standards Certicate ISO 22000 as well
as the Laboratory Quality Guarantee Certicate ISO/IEC 17025.

36
 5bbiU`FYdcfh

The Cake and Pastry Sector in the State of Kuwait achieved a growth
in its sales by 8% during 2014. The Sector offers a rich variety of
croissants, salads, sandwiches in various avors and kinds that have
become highly popular in the Kuwait market. The Sectors products are
available as light meals at government institutions such as schools and
government ministries. In 2014, the Sector introduced several new
products such as pizza pat, apple pat along with premium quality
grilled shrimp sandwiches, chicken fajita, chicken or beef with mushroom
that have been well received by the Kuwaiti market.
The Pastry Sector produces the coleslaw salad for all KFC restaurants in
Kuwait having obtained the approval of YUM International Corporation
and passed the relevant tests with the results of which were highly lauded
by YUM. In addition, the quality of the product has been positively
received by the customers of KFC. The Sector is currently preparing for
processing and supplying all the vegetables needed by the KFC chain.
It is worth mentioning that the Pastry Sector in Kuwait continues to
develop the Croissant products specications in order to maintain the
Companys predominant position in the pastry market with a current
share of 34% in the Kuwait market.
To underline its commitment to food quality and safety standards, the
Company maintained its quality certicates obtained during previous
years. These included ISO 9001, ISO 22000 and ISO 14001.

Industry, Agriculture and Poultry Activities in Egypt:

Potato Chips, Snacks Processing and Dairy Products and

Cheese Production Activities:
Senyorita Group for Food Industries Company:
Since the time Senyorita Group for Food Industries Company joined the
Americana Group in 2006, Senyorita has achieved continuous success
through the endless efforts designed to achieve an on-going growth of
the companys business. Year after year, the company has been reaping
the fruits of those efforts reected by the remarkable growth in sales
and prots Senyorita Group for Food Industries Company offers a wide
variety of snacks & potato chips products, biscuits and chewing gum in
addition to its chocolate products.

37
 Senyorita Group owns several factories that have variety of production lines, foremost among which are
the snacks production line, the biscuits production line and the crispy potato chips production line. This is in
addition to the carton factory, frozen and refrigerated products stores services, all of which comply with the
highest standards in the industry.

Despite the tremendous challenges the company encountered in the Egyptian market in 2014 due to the
political and security instability in the Egyptian market and the impact thereof on economic conditions in Egypt,
Senyorita Group for Food Industries Company achieved record sales during the year, amounting to 1.2 billion
Egyptian Pounds, with an impressive growth of 12% in local currency over the previous year.

The success achieved by Senyorita Group year after year reects the condence consumers have in the quality
of the companys high quality products offered at competitive prices that have never failed to achieve customer
satisfaction. The company has succeeded in providing a wide variety of products that cater for the different
tastes of consumers and the companys efforts to reach every area within the Egyptian markets by deploying
large eet consisting of 950 distribution vehicles that call on villages and cities in all of Egypts governorates,
in addition to 70 distribution outlets in all areas of the Arab Republic of Egypt and beyond. This impressive
performance has been achieved through careful planning and development and massive efforts by all the
companys personnel to attain the prominence Senyorita Group has attained.

It is worth mentioning that Senyorita Group has successfully maintained its ISO certications it had obtained
in previous years. These include ISO 22000 and ISO 9001.

38
 5bbiU`FYdcfh

Greenland Group for Food Industries Company:

Greenland Group Company offers its customers in the Arab Republic

of Egypt a wide range of fresh and health dairy products under the

trademark of Greenland and Americana, using the premium quality

natural milk in its production.

The companys white cheese products are a huge success in Egypt and

so is the wide collection of natural & healthy fresh fruit juices, processed

cheese products, mozzarella cheese and natural margarine & ghee

products. The company is one of the largest supplier and distributor

of white cheese and mozzarella cheese in the Egyptian market and its

products are available in the markets of several other Arab countries.

Greenland complies with the highest international standards and

health specications in production in accordance with HACCP and the

standard specications prescribed by the ISO 9001, ISO 14001,

ISO 22000 and BS OHSAS 18001 certications.

During 2014, Greenland Company faced signicant challenges in

the domestic market because of the lack of security and political Egypt

stability, which affected the cost effectiveness due to rising raw materials

prices, rising dollar value against the pound as the company heavily

depended on the import of signicant quantity of the raw materials from

abroad in addition to difcult conditions in export markets such as Libya

and Syria and all those factors negatively impacted the results of the

companys revenues & prots.

Under those circumstances Americana Management felt the need to

develop and restructure some of the Greenland companys departments

and systems processes to make a quantum leap in operational

performance as well as raise the administrative system efciency to cope

with the unprecedented challenges in the dairy market in particular, and

the many other prevalent challenges in Egyptian market in general and

also to provide all the elements to stimulate the companys business for

achieving the goals and aspirations of Americana and its shareholders

in the coming years.

39
 Food Manufacturing & Agricultural Products Group in Egypt:

The International Company for Agricultural Development (Farm Frites) Egypt:

Americana signed an agreement with Farm Frites Company in Holland to use their world famous trademark

in this eld. Since its beginning in 1990, Farm Frites Company- Egypt has been operating and continuously

evolving its activities to provide a wide range of unique products of frozen and half-fried potatoes and frozen

vegetables of the highest quality. Today, Farm Frites is the leading company in the production of frozen potato

in the Arab world and is the main supplier to the Companys restaurants and a large number of world class

restaurants and hotels in and out of Egypt, in addition to catering for the Egyptian markets needs for frozen

vegetables which constitutes a basic and important part of the consumers needs.

Through Farm Frites Company in the Arab Republic of Egypt, Americana offers frozen, half-fried potatoes

while the company owns the largest plant in the Middle East for the production of this kind of potato products.

The plant adopts the latest potato processing technology in order to optimize product quality. Farm Frites

potato products are the leading brand in this kind of products in the Egyptian market. The company exports its

products to several Arab countries notably Kuwait, UAE, and Saudi Arabia, as well as several other markets

in African continent.

40
 5bbiU`FYdcfh

Farm Frites relies heavily on its agricultural activity for its raw potato

requirements needed for production all year round. A key characteristic

of Farm Frites agricultural activity is that there are two seasons of potatoes

cultivation every year. The winter crop is planted during September and

October and harvested in December to March, and the summer crop is

planted in December and January and harvest in April to June.

The company has maintained its BS OHSAS 18001 and ISO 22000

certications during the year.

International Company for Agricultural Production and

Processing (ICAPP):

ICAPP started operations more than nine years ago with modest sales

that did not exceed 52 million Egyptian Pounds, and continued to

develop its products and expand its operations and sales year after

year until its sales exceeded 296 million Egyptian Pounds in 2014.

ICAPP offers frozen vegetables and fruits under the Americana and

Farm Frites trademarks in the Egyptian market. The high quality of its

products and their success in the Egyptian market enabled the company

to export its products to many other neighboring Arab countries mainly

Kuwait, Saudi Arabia, UAE, Bahrain and Oman. The company has

started exports to several European countries in pursuit of its plans to

expand into new markets in the coming years.

The company is committed to applying the international standards for food

safety in its processing, production and packaging of frozen vegetables

and fruits according to the Global Standards for Food Safety organizations

requirements and has maintained its ISO 22000, BS OHSAS 18001,

ISO 14001, and Global Standard for Food Safety certications in

order to strengthen customer condence in the quality of its products

and consequently increase sales and prots.

41
 Agriculture and Land Reclamation Activities:
The primary objective of the agriculture and land reclamation activities is the reclamation and cultivation of
lands to be suitable for growing fruits and vegetables, using modern irrigation methods depending on the
operational feasibility. The agricultural activity in the Arab Republic of Egypt provides part of the Egyptian
industrial companies needs of agricultural raw materials such as potatoes, olives and other agricultural
crops. The activity comprises three companies: Al-Hashimiya for Land Reclamation & Cultivation Company,
Americana for Land Reclamation and Cultivation Company and Karwin Land Reclamation Company. By the
end of 2014, the total area under cultivation was more than 6,900 acres. The products of the reclaimed lands
are supplied to the International Agricultural Development Company Farm Frites (the potato crop) and the
Egyptian Canning Company (the olives crop).

Egyptian Canning Company Americana:

Americana offers the premium quality Olive products through the Egyptian Canning Company in the Arab
Republic of Egypt. High quality of Olives is maintained by the selection of the best quality of raw olive and
employing the most advanced and efcient production techniques to process various types of unique Olive
products. The company has built an excellent reputation as a prime producer of quality canned artichokes that
have been well received by consumers. The companys products are quite popular in the Egyptian market and
are exported to several Arab and other international markets.
During 2014, the company maintained its ISO 9001 certication and the OHSAS 18001 certication
which were obtained in previous years.

42
 5bbiU`FYdcfh

Cairo Poultry Group & Egyptian Company for Starch

and Glucose:
The poultry industry in Egypt continued to face challenges brought about
by the security and political instability and the companys management
had to step up efforts to face the situation and continued to seek to
improve productivity and efciency in all operating units and devise
innovative methods to reduce product prices in the market in order to
maintain its market share and improve competitiveness against other
local companies.
During 2014, the Poultry Groups sale maintained its sales at 2.3 billion
Egyptian Pounds. This is a relatively good performance under the present
market circumstances due to the Managements continued attempts to
minimize the negative effects of the changes in the Egyptian market
that have severely dented the prots of the company. The following
is a brief account of the three main activities of the Group, namely the
Poultry, slaughterhouses and animal feed production activities.

The Poultry Activity: The poultry activity relies on the white meat
production cycle. The production phases include the farming of
grandparents to hatch parents then breeding and fattening them for sale
as broilers. In its production activities, the company relies on two types
of international breeds, Arbor Acres and Hubbard which are famous
for their hereditary strength and high productivity, resulting in high rates
of food conversion to produce quality meat chickens. In pursuance of its
efforts, the company keep abreast with the latest development related
to the best breeds and in order to absorb part of the increase in the
international prices of animal feed ingredients. The Hubbard F15 breed
was introduced because of its smaller size, lower feed consumption and
bountiful egg production, all of which allow the breeding of a larger
number of chicken parents per square meter, thereby achieving a high
economic efciency till the slaughtering stage.

The Poultry Processing Activity: Cairo Poultry Group, through

Cairo Poultry Processing Company (CPPC), Koki at the 10th of Ramadan
City, and through the Nubaria Factory carries on white meat product
processing operations in addition to slaughtering poultry according to
the Islamic Shariah law to ensure halal chicken meat products. The
Group benets from production waste material to produce certain kinds
of agricultural fertilizers. Both factories are equipped with sophisticated
equipment and use highly advanced techniques in their operations, and

43
 both of them obtained ISO 9001 certications. Sales of this sector amounted to 38 thousand tons during
2014, with an increase of 7% over the previous year. This performance reected positively on the prots of
the sector.

The Feed Production Activity: The feed production activity within the poultry group is a key activity that
complements the chicken breeding and fattening activity. This activity caters for the needs of the companys
poultry farms for the right type and quality of feed. The group recognizes the importance of proper nutrition for
the quality of chicken production. For this reason, it produces its own feed in order to provide the best nutrition
elements for its farms.

The Egyptian Starch and Glucose Production Company:

In addition to the above activities, the Cairo Poultry Group also manages the activities of the Egyptian Starch
and Glucose Production Company, which, through its own factories produces starch, glucose, corn oil and
animal feed and related by-products of this type of industry. In 2010, the company started producing dry feed,
and by the end of 2012, the new eco-friendly glucose production line was commissioned. This line depends on
the addition of enzymes instead of acids in line with the latest production techniques in this industry.

The starch and glucose products have a leading ranking in the Egyptian market. The company also exports to
several countries such as Tunisia, Libya, Syria, Algeria, Sudan and several other African countries.

44
 5bbiU`FYdcfh

Food Processing Division Future Outlook:

The company continuously seeks to maintain its position and leadership
in the eld of food processing in the Arab region. This requires the
development of plans and the setting of ambitious goals year after
year, then proceeding to implement them efciently and effectively.
The following is a brief outline of the main aspirations with regard
to the companys future in the area of the Factories, Trading and
Agricultural Sector:
U To develop the products on an on-going basis by using modern
technology in the production process, and continuously improve
the production lines, adding new production lines, maintaining
the high quality standards required through the adoption of world-
class tools used in measuring the product quality, thereby leading
to expanding the product consumer base through an efcient
diversication of product availability.
U To continuously seek to achieve integration synergy and
cooperation among all activities with a view to maximizing the
ability to achieve the common goals among them, benet from
consolidation of requirements for an increased negotiation power
provided by large-scale transactions.
U Continuous seeking of alternatives and solutions for facing global
phenomenon of rising prices for the materials needed for the
production operations by continuous negotiation with existing
suppliers while seeking to expand the supplier base by identifying
new alternate competitive sources of supply.
U The company seeks to achieve geographical expansion during
2015 in order to maximize the number of customers and interact
with them, cater for the different tastes and needs, study the
feasibility of expanding into new markets, increasing distribution
channels and sales ofces in order to achieve further geographical
outreach, thereby leading to larger revenues and prots for the
company.
U The company is keen to add new products that suit the tastes of
consumers and commensurate with their different income levels.
It will continue to focus on product quality in all the companys
plants, using the best raw materials while complying with all health
and safety regulations for the benet of its customers. This means
continuous attention to quality control and ensuring the right choice
of raw material sources for all the companys processing operations
in order to maintain the world-class standard of its products.

45
 U The company will continue to look after all its resources, foremost among which is the human element. It will
develop training programs for them in order to ensure the career development of all personnel, with a view to
ne-tune their existing skills and increasing their capabilities. In addition, the company will continue striving
to attract and hire the best available talented individuals who can be instrumental in enabling the company to
achieve its objectives and realize its goals & ambitions.

U The company will strive to optimize the use of its available experience in the eld of marketing in order to
maintain its existing customers, reach new consumers for its products through effective marketing schemes with
a view to provide an added value to the customers and increase the companys market share.

U The company will continue to optimize the use of its available assets and resources. This has been a key
priority of the management during the past few years and will continue to be so in the coming years in order
to maximize their efciency and effectiveness.

U The company will continue to discharge its social responsibilities in the countries where its factories and
products are located. This responsibility involves continuous support to economic activity, employment of
indigenous manpower in order to contribute to alleviating the unemployment problems, in addition to an
effective contribution to social work such as charity, healthcare, education, culture and sports. The Company
will also implement the concept of investment that takes social responsibility into consideration with regard to
the environment and offering products of high quality that complies with the best health control standards

46
 5bbiU`FYdcfh

Third:

The Financial Portfolio

(Available for Sale investment):

This portfolio is being managed by specialized investment rms and

its worthy to mention that all the shares selected within the portfolio are
well-established and blue-chip shares that enjoy sound nancial positions,
operational and managerial stability, and above all have ambitious growth
plans and promising future. More importantly, the industries of these stocks
have high growth potential, thereby providing a high level of assurance and
condence to our shareholders.

Towards the end 2014, all share prices in Kuwait and Egypt stock markets,
like many other stock markets in the region, were deeply impacted by the
drop in oil prices and political instability in several Arab countries. This had
a negative impact on the nancial portfolio and incurred share in losses
amounted to KD 17.7 million, compared to KD 16.4 million in 2013.

The Fair value of the nancial portfolio amounted to KD 79.8 million at the
end of 2014, and the Fair Value Reserve was amounted to KD 6.2 million
compared to a negative KD 1.3 million in 2013.

Shareholders Equity and the Proposed Dividend Distribution

Management is always keen to safeguard the interest of the shareholders
on the long term as well as in the short term, particularly amid the current
challenges in most markets. The way management addressed those challenges
resulted in mitigating their negative impacts thanks to the excellent focus on
the operating performance of the company.

The following table depicts the development of the book value per share and
the retained earnings (after dividends) during the period from 2010 to 2014.

Description 2010 2011 2012 2013 2014

Book Value Per Share (Fils) 787 680 736 773 840

Retained Earnings (KD million) 186.7 210.7 231.2 248.5 261.3

47
 The following graph shows the development of the retained earnings after dividends over the past ve years:

Retained Earnings (KD Million)

300
248.5 261.3
231.2
210.7
186.7
200

100

0
2010 2011 2012 2013 2014

The table and chart show that the book value per share (after the proposed dividends) rose to 840 Fils at the end

of 2014. In 2011, the book value per share declined because of the decline in the Fair Value Reserve within the

shareholders equity due to the drop in share prices in Kuwait Stock market. In the following years, the company

was able to absorb that decline and continue to support the shareholders equity through the prots. The chart

shows that the retained earnings rose to KD 261.3 million at the end of 2014, at an annual growth rate of 8% in

the past ve years.

48
 5bbiU`FYdcfh

Esteemed Shareholders,
Retained
The dividends policy of the company is based on achieving the required
balance between the requirements of the shareholders to obtain rewarding
Earnings After
Dividends
895
Million US dollars
dividends on the one hand and the ambition of the company to expand
2014

and grow on the other. The dividends and prots obtained by the company
from its subsidiaries are the source to provide the cash needed for the
dividends.
Earning
The Board of Directors proposed a cash dividend of 90% of the capital (90
Per Share 133
2014 Fils
Fils per share) for the year ended 31 December 2014, the highest dividend
ever paid by the company since its incorporation.

The following table and graph show the earnings per share and the dividend
rates during the ve years from 2010 to 2014:

Description 2010 2011 2012 2013 2014

Earnings Per Share (Fils) 118 123 117 129 133

Dividends Rate 65% 65% 65% 85% 90%

Dividends Amount (KD million) 25.4 25.4 25.4 33.2 35.2

Dividends / Earnings Per Share

(Pay-out Ratio) 55% 53% 56% 66% 68%

Earnings Per Share (Kuwaiti Fils)

129 133
118 123
117

2010 2011 2012 2013 2014

The foregoing shows that the company distributed annual cash dividends out

of the prots made during the past ve years (Pay-out Ratio) at an average

rate of 60% while continuing to achieve horizontal and vertical expansion

of its activities and strengthening its nancial position.

49
 Esteemed Shareholders,
The Board of Directors wishes to express its deepest thanks and appreciation to all the countries in which the

company operates through its branches, subsidiaries or associate companies. In particular, we wish to thank all the

ofcial and government authorities and entities and banking and nancial institutions for their continuous support

and condence in the company.

The Board of Directors expresses its appreciation and thanks to all its esteemed shareholders and customers for

their steadfast and endless support to the company, and seizes this opportunity to assure them that the company

will continue to grow and develop in the years to come.

The Board of Directors also would like to thank the companys managers, employees and workers for their

tremendous efforts and determination in the face of all challenges in order to achieve the outstanding results, in a

one-family spirit, setting an excellent example of successive collective teamwork.

Most importantly, the Board of Directors presents its thanks and appreciation to His Highness the Amir of Kuwait,

Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, and pray to Allah Almighty to bestow on him the blessing of good

health and enable him to continue to lead the countrys efforts toward national progress and development. We also

thank and are indebted to His Highness Sheikh Nawwaf Al-Ahmad Al-Jaber Al-Sabah, the Crown Prince, and His

Highness, Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah, the Prime Minister. Our thanks and appreciation goes

to the venerable government and our public institutions for their valuable support and patronage of our national

companies.

The Board of Directors

50
 5bbiU`FYdcfh

Consolidated Financial Statements and

Independent Auditors Report

For The Year Ended 31 December 2014

51
 Independent Auditors Report to the Shareholders

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated nancial statements of Kuwait Food Company (Al Americana) K.S.C.P.

the Parent Company and its subsidiaries (collectively the Group), which comprise the consolidated statement of
nancial position as at 31 December 2014, and the consolidated statement of income, consolidated statement of

comprehensive income, consolidated statement of changes in equity and consolidated statement of cash ows for the
year then ended, and a summary of signicant accounting policies and other explanatory information.

Managements Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated nancial statements in
accordance with International Financial Reporting Standards, and for such internal control as management determines
is necessary to enable the preparation of consolidated nancial statements that are free from material misstatement,

whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these consolidated nancial statements based on our audit. We conducted
our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated nancial
statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the consolidated nancial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the consolidated nancial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the consolidated nancial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated nancial statements.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit
opinion.

Opinion

In our opinion, the consolidated nancial statements present fairly, in all material respects, the consolidated nancial
position of the Group as at 31 December 2014, and its nancial performance and its cash ows for the year then ended
in accordance with International Financial Reporting Standards.

52
 5bbiU`FYdcfh

Report on Other Legal and Regulatory Requirements

Furthermore, in our opinion, proper books of accounts have been kept by the Parent Company and the consolidated

nancial statements, together with the contents of the report of the Board of Directors relating to these consolidated
nancial statements, are in accordance therewith. We further report that, we obtained the information that we deemed

necessary for the purpose of our audit and that the consolidated nancial statements incorporate all information that is
required by the Companies Law no. 25 of 2012, as amended and its executive regulation and by the Parent Companys

Memorandum and Articles of Association as amended, that an inventory was duly carried out and that to the best of our

knowledge and belief, no violations of the Companies Law no. 25 of 2012, as amended and its executive regulation or
by the Parent Companys Memorandum and Articles of Association as amended have occurred during the nancial year

ended 31 December 2014 that might have had a material effect on the business of the Group or on its consolidated
nancial position.

Bader A. Al-Wazzan Abdullatif A. H. Al-Majid

Licence No. 62A Licence No. 70A
Deloitte & Touche - Al Wazzan & Co. Of Parker Randall (Allied Accountants)

Kuwait 2 March 2015

53
 Consolidated Statement of Financial Position
as at 31 December 2014

2014 2013
Assets Note KD 000 KD 000
Non-current assets
Property, plant and equipment 5 233,981 220,301
Investment properties 6 26,986 17,021
Intangible assets 7 13,078 12,949
Available for sale investments 8 79,767 96,826
Other assets 2,466 2,385
356,278 349,482
Current assets
Inventories 9 109,451 104,957
Trade receivables 10 62,290 56,474
Other receivables 11 44,994 40,800
Cash on hand and at nancial institutions 12 115,179 94,382
331,914 296,613
Total assets 688,192 646,095

Equity and liabilities

Equity attributable to shareholders of the Parent Company
Share capital 13 40,200 40,200
Share premium 25,687 25,687
Treasury shares 14 (1,080) (1,080)
Statutory reserve 15 20,100 20,100
Voluntary reserve 16 3,010 3,010
Foreign currency translation reserve (26,902) (32,819)
Change in fair value reserve 6,214 (1,335)
Retained earnings 296,550 281,780
363,779 335,543
Non-controlling interests 17 41,754 40,799
Total equity 405,533 376,342

Non-current liabilities
Borrowings and bank facilities 18 13,050 25,904
End of service indemnity 39,190 33,429
52,240 59,333
Current liabilities
Borrowings and bank facilities 18 54,303 56,723
Trade and other payables 19 176,116 153,697
230,419 210,420
Total liabilities 282,659 269,753
Total equity and liabilities 688,192 646,095

Ahmed Mohamed Hassan Al-Moataz Adel Al-Al Bader Mohamed Al-Jouan Marzouk Nasser Al-Khara
Chief Financial Ofcer General Manager Vice Chairman Chairman

The accompanying notes form an integral part of these consolidated nancial statements.

54
 5bbiU`FYdcfh

Consolidated Statement of Income

for the year ended 31 December 2014

2014 2013
Note KD 000 KD 000
Sales 922,358 866,904

Cost of sales (749,516) (704,770)

Gross prot 172,842 162,134

Selling and marketing expenses (80,106) (70,622)

General and administrative expenses (5,650) (6,001)

Other operating expenses 20 (1,442) (1,342)

Investment properties income 21 8,557 6,731

Net losses from available for sale investments 22 (17,614) (16,290)

Finance costs (6,903) (8,479)

Prot before income tax of subsidiaries 69,684 66,131

Income tax of subsidiaries (9,586) (6,025)

Net prot before other deductions 60,098 60,106

Contribution to Kuwait Foundation for Advancement of Science (534) (489)

National Labour Support Tax (897) (856)

Zakat (418) (353)

Board of Directors remuneration (72) (72)

Net prot for the year 58,177 58,336

Attributable to:

Shareholders of the Parent Company 52,021 50,598

Non-controlling interests 6,156 7,738

58,177 58,336

Earnings per share (ls) 23 133 129

The accompanying notes form an integral part of these consolidated nancial statements.

55
 Consolidated Statement of Comprehensive Income
for the year ended 31 December 2014

2014 2013
KD 000 KD 000

Net prot for the year 58,177 58,336

Other comprehensive income items

Items that may be reclassied subsequently to statement of income:

Foreign currencies translation differences 6,371 (9,238)

Available for sale investments:

Change in fair value during the year (17,359) (16,408)

Reclassication adjustments related to disposal during the year 1,409 -

Losses from impairment in value 19,038 20,484

3,088 4,076

Total other comprehensive income items 9,459 (5,162)

Total comprehensive income for the year 67,636 53,174

Attributable to:

Shareholders of the Parent Company 61,484 47,613

Non-controlling interests 6,152 5,561

67,636 53,174

The accompanying notes form an integral part of these consolidated nancial statements.

56
 5bbiU`FYdcfh

Consolidated Statement of Changes in Equity

for the year ended 31 December 2014

Equity attributable to the shareholders of the parent Company Non- Total

controlling equity
Foreign
Change in interests
Share Share Treasury Statutory Voluntary currency Retained
reserve fair value Total
capital premium shares reserve translation earnings
reserve
reserve

Balance as at 31 December 2012 40,200 25,687 (1,080) 20,100 3,010 (24,786) (6,383) 256,607 313,355 37,528 350,883

Net prot for the year - - - - - - - 50,598 50,598 7,738 58,336

Total other comprehensive income items - - - - - (8,033) 5,048 - (2,985) (2,177) (5,162)

Changes in non-controlling interests (note 17) - - - - - - - - - (2,290) (2,290)

Cash dividends - - - - - - - (25,425) (25,425) - (25,425)

Balance as at 31 December 2013 40,200 25,687 (1,080) 20,100 3,010 (32,819) (1,335) 281,780 335,543 40,799 376,342

Balance as at 31 December 2013 40,200 25,687 (1,080) 20,100 3,010 (32,819) (1,335) 281,780 335,543 40,799 376,342

Net prot for the year - - - - - - - 52,021 52,021 6,156 58,177

Total other comprehensive income items - - - - - 5,917 7,549 (4,003) 9,463 (4) 9,459

Changes in non-controlling interests (note 17) - - - - - - - - - (5,197) (5,197)

Cash dividends (note 24) - - - - - - - (33,248) (33,248) - (33,248)

Balance as at 31 December 2014 40,200 25,687 (1,080) 20,100 3,010 (26,902) 6,214 296,550 363,779 41,754 405,533

All amounts in 000 Kuwaiti Dinars

The accompanying notes form an integral part of these consolidated nancial statements.

57
 Consolidated Statement of Cash Flows
for the year ended 31 December 2014

2014 2013
Note KD 000 KD 000

Cash ows from operating activities

Net prot for the year 58,177 58,336

Adjustments for:

Depreciation and amortisation 38,721 35,901

End of service indemnity 8,829 6,149

Gain from investment properties valuation 21 (7,230) (6,177)

Provide / (Reverse) impairment in value 2,986 (1,558)

Loss on disposal of property, plant and equipment and intangible assets 851 377

Finance costs 6,903 8,479

Net losses from available for sale investments 17,298 15,956

Operating prot before changes in working capital 126,535 117,463

Trade and other receivables (11,076) (4,309)

Inventories (4,565) (5,118)

Trade and other payables 23,882 27,026

Payment of end of service indemnity (3,068) (3,410)

Net cash generated from operating activities 131,708 131,652

The accompanying notes form an integral part of these consolidated nancial statements.

58
 5bbiU`FYdcfh

Continued: Consolidated Statement of Cash Flows

for the year ended 31 December 2014

2014 2013
Note KD 000 KD 000
Cash ows from investing activities

Payments to acquire property, plant and equipment (49,878) (47,861)

Proceeds from sale of property, plant and equipment 1,633 1,475

Payments to acquire investment properties (400) (1,993)

Payment to acquire intangible assets (1,975) (1,908)

Payment to acquire available for sale investments (2,342) -

Proceeds from sale of available for sale investments 868 -

Net cash ows from other assets (530) 682

Deposits for more than three months (16,136) -

Dividends received 4,489 4,528

Net cash used in investing activities (64,271) (45,077)

Cash ows from nancing activities

Net payment of borrowings and banks facilities (17,446) (8,210)

Payment of nance costs (6,910) (8,543)

Change in non-controlling interests (5,197) (2,290)

Dividends to shareholders (33,223) (25,420)

Net cash used in nancing activities (62,776) (44,463)

Net increase in cash and cash equivalents 4,661 42,112

Cash and cash equivalents at the beginning of the year 94,382 52,270

Cash and cash equivalents at the end of the year 12 99,043 94,382

The accompanying notes form an integral part of these consolidated nancial statements.

59
 Notes to the Consolidated Financial Statements
for the year ended 31 December 2014

1. Incorporation and activities

Kuwait Food Company (Al Americana) is a Kuwaiti Public Shareholding Company (the Parent Company)

incorporated in the State of Kuwait on 29 December 1963.

The Parent Companys registered ofce is in the State of Kuwait, P.O. Box 5087 Safat 13051 State of Kuwait.

The principal activities of the Parent Company and its subsidiaries are importing and manufacturing of food and

beverages; sale of such items on both a retail and wholesale basis in the State of Kuwait, and other Arab countries;

and investing the surplus funds in investment portfolios managed by specialized companies.

The consolidated nancial statements were approved for issue by the Board of Directors on 2 March 2015.

These consolidated nancial statements include the nancial statement of the Parent Company and its subsidiaries

which mentioned in note 25 referred together the Group.

2. Basis of preparation and signicant accounting policies

2.1 Basis of preparation

These consolidated nancial statements have been prepared in accordance with International Financial Reporting

Standards. These consolidated nancial statements have been prepared on the historical cost basis except for

investment properties and certain nancial instruments that are measured at fair values, as explained in the

accounting policies below.

2.2 New and revised standards

New and revised IFRSs issued and effective

In the current year, the Group has applied a number of new and revised IFRSs that are issued and effective for

accounting periods that begin on or after 1 January 2014.

Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities

The Group has applied the amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities for the rst time in the

current year. The amendments to IFRS 10 dene an investment entity and require a reporting entity that meets the

denition of an investment entity not to consolidate its subsidiaries but instead to measure its subsidiaries at fair

value through prot or loss in its consolidated and separate nancial statements.

60
 5bbiU`FYdcfh

Consequential amendments have been made to IFRS 12 and IAS 27 to introduce new disclosure requirements

for investment entities. The application of the amendments has had no impact on the disclosures or the amounts

recognized in the Groups consolidated nancial statements, as the Parent company is not investing entity.

Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities

The Group has applied the amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities for the rst

time in the current year. The amendments to IAS 32 clarify the requirements relating to the offset of nancial assets

and nancial liabilities.

The amendments have been applied retrospectively. The Group has assessed whether certain of its nancial assets and

nancial liabilities qualify for offset based on the criteria set out in the amendments and concluded that the application

of the amendments has had no impact on the amounts recognised in the Groups consolidated nancial statements.

Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets

The Group has applied the amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets for the

rst time in the current year. The amendments to IAS 36 remove the requirement to disclose the recoverable amount

of a cash-generating unit (CGU) to which goodwill or other intangible assets with indenite useful lives had been

allocated when there has been no impairment or reversal of impairment of the related CGU.

Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable

amount of an asset or a CGU is measured at fair value less costs of disposal.

The application of these amendments has had no material impact on the disclosures in the Groups consolidated

nancial statements.

New and revised IFRSs in issue but not yet effective

The Group has not applied the followings new and revised IFRS that have been issued and not yet effective

For annual periods beginning on or after 1 July 2014

Amendments to IAS 19 Dened Benet Plans: Employee Contributions

The Annual Improvements to IFRSs 2010-2012 Cycle:

U IFRS 2 Share-based Payment

U IFRS 3 Business Combinations

U IFRS 8 Operating Segments

U IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets

U IAS 24 Related Party Disclosures

61
 The Annual Improvements to IFRSs 2011-2013 Cycle:

U IFRS 3 Business Combinations

U IFRS 13 Fair Value Measurement

U IAS 40 Investment Property

The Groups management do not anticipate that the application of these amendments will have a material impact

on the Groups consolidated nancial statements.

For annual periods beginning on or after 1 January 2016

U Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations

U Amendments to IAS 16 & IAS 38 Clarication of Acceptable Methods of Depreciation & Amortisation

U Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants

The Groups management do not anticipate that the application of these amendments will have a material impact

on the Groups consolidated nancial statements.

Effective for annual periods beginning on or after 1 January 2017

IFRS 15 Revenue from Contracts with Customers

The Groups management anticipate that the application of these IFRS 15 in the future may have a material impact

on amounts reported in respect of the Groups nancial assets and nancial liabilities. However, it is not practicable

to provide a reasonable estimate of the effect until the Group undertakes a detailed review.

Effective for annual periods beginning on or after 1 January 2018

IFRS 9 Financial Instruments

The Groups management anticipate that the application of IFRS 9 in the future may have a material impact on

amounts reported in respect of the Groups nancial assets and nancial liabilities. However, it is not practicable

to provide a reasonable estimate of the effect until the Group undertakes a detailed review.

2.3 Signicant Accounting Policies

2.3.1 Basis of Consolidation

Subsidiaries

The consolidated nancial statements incorporate the nancial statements of the Company and entities controlled

by the Parent Company and its subsidiaries. Control is achieved when the Parent Company (a) has power over the

investee (b) is exposed, or has rights, to variable returns from its involvement with the investee and (c) has the ability

to use its power to affects its returns.

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 5bbiU`FYdcfh

The Parent Company reassess whether or not it controls an investee if facts and circumstances indicate that there

are changes to one or more of the three components of controls listed above.

Consolidation of a subsidiary begins when the Parent Company obtains control over the subsidiary and ceases

when the Parent Company losses control over subsidiary. Specically, income and expenses of subsidiary acquired

or disposed of during the year are included in the consolidated statement of income or other comprehensive income

from the date the Company gains control until the date when Parent Company ceases to control the subsidiary.

Prot or loss and each component of other comprehensive income are attributed to the owners of the Parent

Company and to the non-controlling interest. Total comprehensive income of subsidiaries is attributed to the owners

of the Parent Company and to the non-controlling interests even if this results in the non-controlling interests having

a decit balance.

When necessary, adjustments are made to the nancial statements of subsidiaries to bring their accounting policies

into line with the Groups accounting policies.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Changes in the Groups ownership interests in subsidiaries that do not result in the Group losing control over the

subsidiaries are accounted for as equity transactions. The carrying amounts of the Groups interests and the non-

controlling interests are adjusted to reect the changes in their relative interests in the subsidiaries. Any difference

between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid

or received is recognised directly in equity and attributed to owners of the Parent Company.

When the Group loses control of a subsidiary, a gain or loss is recognized in prot or loss and is calculated as

the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any

retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the

subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in

relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities

of the subsidiary. The fair value of any investment retained in the former subsidiary at the date when control is lost

is regarded as the fair value on initial recognition for subsequent accounting under IAS 39, when applicable, the

cost on initial recognition of an investment in an associate or a joint venture.

63
 Business combinations
Acquisitions of businesses combination are accounted for using the acquisition method. The consideration transferred
in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values
of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the
equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally
recognised in consolidated statement of income as incurred.
At the acquisition date, the identiable assets acquired and the liabilities assumed are recognised at their fair value
at the acquisition date, except deferred tax assets or liabilities, liabilities or equity instruments related to share
based payment arrangements and assets that are classied as held for sale in which cases they are accounted for in
accordance with the related IFRS.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirers previously held equity interest in the acquiree over the net
of the acquisition-date amounts of the identiable assets acquired and the liabilities assumed. If, after reassessment,
the net of the acquisition-date amounts of the identiable assets acquired and liabilities assumed exceeds the sum
of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of
the acquirers previously held interest in the acquiree (if any), the excess is recognised immediately in consolidated
statement of income as a bargain purchase gain.
Non-controlling interests may be initially measured either at fair value or at the non-controlling interests proportionate
share of the recognised amounts of the acquirees identiable net assets. The choice of measurement basis is made
on a transaction-by-transaction basis.
When a business combination is achieved in stages, the Groups previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date (the date when the Group obtains control) and the resulting gain or
loss, if any, is recognised in prot or loss. Amounts arising from interests in the acquiree prior to the acquisition date
that have previously been recognised in other comprehensive income are reclassied to consolidated statement of
income where such treatment would be appropriate if that interest were disposed off.

Goodwill
Goodwill, arising on an acquisition of a subsidiary, is carried at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Groups cash-generating units
(or groups of cash-generating units) that is expected to benet from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently
when there is indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less
than its carrying amount, the impairment loss is allocated rst to reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised directly in consolidated statement of income. An impairment loss
recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination
of the prot or loss on disposal.

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 5bbiU`FYdcfh

2.3.2 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Cost

includes the purchase price and directly associated costs of bringing the asset to a working condition for its intended

use. Maintenance and repairs, replacements and improvements of minor importance are expensed as incurred. In

situations, where it is clearly demonstrated that the expenditure has resulted in an increase in the future economic

benets expected to be obtained from the use of an item of property, plant and equipment beyond its originally

assessed standard of performance, the expenditure is capitalized.

Depreciation is calculated based on estimated useful life of the applicable assets except for the land on a straight line

basis. An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount

is greater than its estimated recoverable amount.

The assets residual values, useful lives and depreciation method are reviewed at the end of each reporting period,

with the effect of any changes in estimate accounted for on a prospective basis.

Gains or losses on disposals are determined by the difference between the sales proceeds and the carrying amount

of the asset and is recognized in the consolidated statement of income.

2.3.3 Intangible assets

Intangible assets with nite useful lives that are acquired separately are carried at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful

lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for on a prospective basis.
Intangible assets with indenite useful lives that are acquired separately are carried at cost less accumulated
impairment losses.
An intangible asset is derecognised on disposal, or when no future economic benets are expected from use or disposal.

Gains or losses arising from derecognition of measured as the difference between the net disposal proceeds and the
carrying amount of the asset, are recognised in consolidated statement of income when the asset is derecognised.

2.3.4 Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amount of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Intangible assets with indenite useful lives and intangible assets not yet available for use are tested for impairment at
least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher

of fair value less costs to sell or value in use. Impairment losses are recognised in the income statement for the period
in which they arise. When an impairment loss subsequently reverses, the carrying amount of the asset is increased to
the extent that it does not exceed the carrying amount that would have been determined had no impairment loss been

recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in consolidated

statement of income.

65
 2.3.5 Investment property

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under

construction for such purposes). Investment properties are measured initially at cost, including transaction costs.

Subsequent to initial recognition, investment properties are measured at fair value. Gains and losses arising from

changes in the fair value of investment properties are included in consolidated statement of income in the period

in which they arise.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn

from use and no future economic benets are expected from the disposal. Any gain or loss arising on derecognition

of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the

asset) is included in consolidated statement of income in the period in which the property is derecognised.

2.3.6 Financial instruments

Financial assets and nancial liabilities are recognised when a Group entity becomes a party to the contractual

provisions of the instrument.

Financial assets and nancial liabilities are initially measured at fair value. Transaction costs that are directly

attributable to the acquisition or issue of nancial assets and nancial liabilities (other than nancial assets and

nancial liabilities at fair value through prot or loss) are added to or deducted from the fair value of the nancial

assets or nancial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the

acquisition of nancial assets or nancial liabilities at fair value through prot or loss are recognised immediately

in consolidated statement of income.

Financial assets

Financial assets are classied into the following specied categories: nancial assets at fair value through prot or

loss (FVTPL), held to maturity, available-for-sale (AFS) nancial assets and loans and receivables. The classication

depends on the nature and purpose of the nancial assets and is determined at the time of initial recognition. All

regular way purchases or sales of nancial assets are recognised and derecognised on a trade date basis. The

Group has determined the classication of its nancial assets as follows:

Loans and receivables

Loans and receivables are non-derivative nancial assets with xed or determinable payments that are not quoted

in an active market. Loans and receivables (including trade and other receivables and cash at banks) are measured

at amortised cost using the effective interest method, less any impairment.

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 5bbiU`FYdcfh

Available for sale (AFS)

AFS are non-derivatives nancial assets not classied as (a) loans and receivables, (b) held-to-maturity investments

or (c) nancial assets at fair value through prot or loss.

The nancial assets available for sale is re-measured at fair value. The fair value is determined in the manner

described in note 3.3.

Changes in the fair value of available-for-sale nancial assets are recognised in other comprehensive income

and accumulated under the heading of changes in fair value reserve. When the investment is disposed of or is

determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation

reserve is reclassied to consolidated statement of income.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be

reliably measured are measured at cost less any identied impairment losses at the end of each reporting period.

Dividends on AFS equity instruments are recognised in prot or loss when the Groups right to receive the dividends

is established. Foreign exchange gains and losses are recognised in other comprehensive income items.

Impairment in value

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting

period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or

more events that occurred after the initial recognition of the nancial asset, the estimated future cash ows of the

investment have been affected.

For AFS equity investments, a signicant or prolonged decline in the fair value of the security below its cost is

considered to be objective evidence of impairment.

For nancial assets carried at amortised cost, the amount of the impairment loss recognised is the difference

between the assets carrying amount and the present value of estimated future cash ows, discounted at the

nancial assets original effective interest rate.

For nancial assets carried at cost, the amount of the impairment loss is measured as the difference between the

assets carrying amount and the present value of the estimated future cash ows discounted at the current market

rate of return for a similar nancial asset.

The carrying amount of the nancial asset is reduced by the impairment loss directly for all nancial assets with the

exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.

When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent

recoveries of amounts previously written off are credited to the income statement.

When an AFS nancial asset is considered to be impaired, cumulative gains or losses previously recognised in

other comprehensive income are reclassied to consolidated statement of income in the period.

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 For nancial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss

decreases and the decrease can be related objectively to an event occurring after the impairment was recognised,

the previously recognised impairment loss is reversed through consolidated statement of income to the extent that

the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised

cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in prot or loss are not reversed through prot

or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income.

Derecognition

The Group derecognises a nancial asset only when the contractual rights to the cash ows from the asset expire,

or when it transfers the nancial asset and substantially all the risks and rewards of ownership of the asset to

another party.

The difference between the assets carrying amount and the sum of the consideration received and receivable and

the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is

recognised in consolidated statement of income.

Financial liabilities

Financial liabilities (including borrowings and trade and other payables) are recognised initially at fair value, net

of transaction costs incurred and subsequently measured at amortised cost using the effective interest method.

Derecognition

The Group derecognises nancial liabilities when, and only when, the Groups obligations are discharged or

expired. The difference between the carrying amount of the nancial liability derecognised and the consideration

paid and payable is recognised in consolidated statement of income.

2.3.7 Inventories

Inventories are stated at the lower of cost or net realisable value. Raw materials cost is determined on a weighted average

cost basis. The cost of nished goods includes direct materials, direct labour and xed and variable manufacturing

overhead, and other costs incurred in bringing inventories to their present location and condition. Net realizable value

is the estimated selling prices less all the estimated costs of completion and costs necessary to make the sale.

2.3.8 End of service indemnity

The Group is liable under Kuwait Labour Law to make payments under dened benet plans to employees at termination

of employment, regarding the labour in other countries; the indemnity is calculated based on law identied in these

countries. Such payment is made on a lump sum basis at the end of an employee service. Dened benet plan is un-

funded and is based on the liability that would arise on involuntary termination of all employees on the balance sheet

date. This basis is considered to be a reliable approximation of the present value of the Groups liability.

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2.3.9 Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events; it is

probable that an outow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Provisions are measured at the present value of the consideration expected to be required to settle the obligation using a

rate that reects current market assessments of the time value of money and the risks specic to the obligation.

2.3.10 Treasury shares

Treasury shares represent the Parent Companys own shares that have been issued, subsequently purchased by the

Group and not yet reissued or cancelled. Treasury shares are accounted for using the cost method. Under the cost

method, the total cost of the shares acquired is reported as a contra account within equity when the treasury shares

are disposed; gains are credited to a separate un-distributable account in equity gain on sale of treasury shares.

Any realised losses are charged to the same account in the limit of its credit balance, any additional losses are

charged to retained earnings to reserves and then to premium. Gains realised subsequently on the sale of treasury

shares are rst used to offset any previously recorded losses in reserves, retained earnings and the gain on sale of

treasury shares.

2.3.11 Dividends

The dividends attributable to shareholders of the Parent Company are recognized as liabilities in the consolidated

nancial statements in the period in which the dividends are approved by the shareholders.

2.3.12 Foreign currencies

Functional and presentation currency

Items included in the nancial statements of each of the Groups entities are measured using the currency of the

primary economic environment in which the entity operates (the functional currency). The consolidated nancial

statements are presented in Kuwaiti Dinars (KD).

Transactions and balances

Foreign currency transactions are translated into Kuwaiti Dinars using the exchange rates prevailing at the dates

of the transactions. At the end of e ach reporting period, monetary items denominated in foreign currencies are

retranslated at the rates prevailing at that date. Foreign exchange gains and losses are resulted from the settlement

of such transactions and from the translation at year-end in the consolidated statement of income.

Group companies

The results and nancial position of all the Group entities that have a functional currency different from the

presentation currency are translated into the presentation currency as follows (other than companies which are

operating in high ination countries):

69
 U Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that

balance sheet.

U Income and expenses for each income statement are translated at average exchange rates.

U All resulting exchange differences are recognized as a separate component of equity.

2.3.13 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated

customer returns and other similar allowances.

U Revenue from sale of goods are recognized when signicant risks and rewards of ownership have been

transferred to the buyer. These risks and rewards are transferred generally to the buyer on delivery and legal

title is passed.

U Service revenues are recognized when the services are rendered.

U Dividend income is recognized when the right to receive payment has been established.

U Interest income from deposits is recognized on time proportion basis using effective yield method.

2.3.14 Leasing

Leases are classied as nance leases whenever the terms of the lease transfer substantially all the risks and

rewards of ownership to the lessee. All other leases are classied as operating leases.

The Group as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

Finance lease income is allocated to accounting periods so as to reect a constant periodic rate of return on the

Groups net investment outstanding in respect of the leases.

The Group as lessee

Assets held under nance leases are initially recognised as assets of the Group at their fair value at the inception

of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the

lessor is included in the consolidated statement of nancial position as a nance lease obligation. Operating lease

payments are recognised as an expense on a straight-line basis over the lease term.

2.3.15 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are

assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the

cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised as expenses in the period in which they are incurred.

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 5bbiU`FYdcfh

2.3.16 Taxes

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable prot for the year. The Groups liability for current tax is calculated

using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the

consolidated nancial position and the corresponding tax bases used in the computation of taxable prot. Deferred

tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally

recognised for all deductible temporary differences to the extent that it is probable that taxable prots will be

available against which those deductible temporary differences can be utilised.

Current and deferred tax for the year

Current and deferred tax are recognised in consolidated statement of income, except when they relate to items that

are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are

also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred

tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the

business combination.

3. Financial risk management

3.1 Financial risk factors

The Groups activities expose it to a variety of nancial risks: market risk (including currency risk, fair value interest

rate risk, cash ow interest rate risk and price risk) in addition to credit risk and liquidity risk.

The Groups overall risk management program focuses on the unpredictability of nancial markets and seeks to

minimize potential adverse effects on the Groups nancial performance.

Risk management is carried out by a central treasury department (Group treasury) under general guidelines by

executive management. Group treasury identies, evaluates and hedges nancial risks in close co-operation with

the Groups operating units and the nancial institutions they are dealing with.

71
 (A) Market risk

Foreign exchange risk

The Group operates in various countries and undertakes transactions denominated in various currencies, other

than Kuwaiti Dinar. Foreign exchange risk arises from its future commercial transactions, recognized assets and

liabilities and net investments in foreign operations.

Foreign exchange environment is monitored on an ongoing basis to determine uctuations of foreign currencies
against local currencies where each subsidiary need of foreign funds is identied and how such funds would be

made available. The Group treasury policy is to hedge its future needs of the major foreign currencies for subsequent

12 months. Major Banks in each country of operation that regularly provides advices to Group companies in terms
of foreign currency trends.
The Group treasury also coordinates between its subsidiaries to undergo foreign exchange transactions between

them whenever a need arises. All Group companies borrow in their local currency. Nevertheless, as a Groups
policy, all companies borrowing in foreign currencies must have a stream of relevant foreign income to repay its
foreign currencies exposures.
The Group has certain investments in foreign countries, whose net assets are exposed to foreign currency translation
risk. Currency exposure arising from the net assets of the Groups foreign operations is managed primarily through
borrowings denominated in the relevant foreign currencies. During 2014, 2013 the Group did not use the hedging
activities to hedge the foreign exchange risk.
The Group is mainly exposed to foreign currency risk as a result of gain or losses from translated assets and
liabilities denominated in foreign currencies, such as cash and cash equivalents, investments, receivables, creditors,
loans and bank facilities.

The carrying amount of Groups foreign currency denominated monetary assets and monetary liabilities at the end
of the reporting period are as follows:
Assets Liabilities
2014 2013 2014 2013
US Dollar 19,246 31,909 18,460 13,215
Egyptian Pound 4,733 4,629 10,382 8,886
Others 3,011 2,249 3,789 8,173

For a 10% changing of US Dollar, there would be comparable impact on the prot and equity as follow as of

31 December:
Prot and loss Equity
2014 2013 2014 2013
US Dollar 79 1,869 1,014 1,048

Price risk

The Group is exposed to equity securities price risk as a result of investments held by the Group and classied

as available for sale. To manage this risk, the Group diversies its portfolio in the light of limits set out by the

Groups management.
All amounts in 000 Kuwaiti Dinars

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 5bbiU`FYdcfh

The Group also keeps its investments at specialized investments companies. A monthly report is sent to the Group
management about the investments performance in order to follow up and take the necessary action when required.
Based on the assumption that the Kuwait Stock of Exchange equity index had decreased by 5% with all other variables
held constant, net prot of the Group will be decreased by KD 3,547 thousand and change in fair value reserve
would be decreased by KD 1,032 thousand as at 31 December 2014 (the prot is decreased by KD 7,721 thousand
and change in reserve increased by KD 2,149 thousand - 2013). Assuming that there is increase in Kuwait Stock
of Exchange market by 5%, with all variables held constant, the equity will be increased by KD 4,579 thousand
(increased by KD 5,572 thousand - 2013).
Cash Flow and fair value interest rate risk
The nancial assets and liabilities exposed to interest rate uctuations are cash deposits, borrowings and bank
facilities.
The Groups treasury ensures that deposits are maintained at the best prevailing market rate at the time of maintaining
each deposit.
The Group maintains banks contracts for all of its borrowings, whereby interest rates are linked to international and
local benchmarks.
The Group is not exposed to the fair value risk of its borrowings as all the borrowings bear variable interest rates.
The Group main risk exposure is the cash ow interest rate risk. The Group analyses its interest rate exposure on
a continuous basis where a monthly review of all facilities takes place to ensure that the Group is being granted
the possible competitive interest rates.
The Group study in regular basis all the income data related to the interest rate to determine the probability of
changes in interest rates and the effect of such changes in the cash ow of the Group and the net prot in order to
take the necessary actions in the timely manner.
At 31 December 2014, if interest rate on borrowings and bank facilities had increased by 0.5% with all other variables
held constant, net prot for the year would have decreased by KD 337 thousand (KD 413 thousand - 2013).

(B) Credit risk

Credit risk arises from cash at banks and trade receivable. Credit risk is the risk that the Group will incur a loss
because of its customer, counter party failed to discharge their contractual obligation.
The Group manages credit risk exposure arising from cash at banks by dealing with well-established banks of sound
strong standing in the countries in which it operates.
The operating units managements assess the credit quality of the customers taking into account their nancial positions,
past experience and other relevant factors. The utilization of credit limits is regularly monitored.
No credit limits were exceeded at the consolidated statement of nancial position date and management does not
expect any losses from non-performance by its counterparties.
As the Group is working in different countries with different economic environments, the Group has set credit policies
in each subsidiary, the following are the common features of the Group credit policies:
U Sales to retail customers in restaurants business line are settled in cash or credit cards.
U The Group deals with well-known hyper markets which have strong credit position. The Group identies the
necessary credit limit based on assessment of credit quality to each client separately.
U When necessary, the Group obtains collaterals from clients in form of deposits, letter of guarantees to reduce
the credit risk. The fair value of collaterals is disclosed in (note 10).
All amounts in 000 Kuwaiti Dinars

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 (C) Liquidity risk

Prudent liquidity risk management implies maintaining sufcient internally generated cash, trading investments and

external funding through an adequate amount of committed credit facilities.

Subsidiaries annual budgets are thoroughly reviewed to ensure that proceeds and external funding are adequately

available to meet each subsidiary operational needs. During the year, the Group treasury continuously monitors its

subsidiaries actual cash ows and quickly responds to any change that might impact on the ability of the subsidiary

to meet its nancing needs. As a Groups policy, borrowings are not concentrated with a single bank in each country,

it include a mix of reputable international, local and regional banks.

The table below analyses the Groups nancial liabilities into relevant maturity Groupings based on the remaining

period at the consolidated statement of nancial position to the contractual maturity date. The amounts disclosed in

the table are the contractual undiscounted cash ows.

2014
More than
Within More than
1 year
1 year 3 years
to 3 years
Borrowings and bank facilities 59,432 11,065 3,395
Trade and other payables 176,116 - -

2013
More than
Within More than
1 year
1 year 3 years
to 3 years
Borrowings and bank facilities 62,709 19,634 9,752
Trade and other payables 153,697 - -

3.2 Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concern while

maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity

(comprising capital, reserves, retained earnings and non-controlling interests).

The gearing ratio as at 31 December is as follows:

2014 2013
Total borrowings and bank facilities 67,353 82,627
Less: cash and cash equivalents (115,179) (94,382)
Net debt (47,826) (11,755)
Total equity 405,533 376,342
Total capital 357,707 364,587

All amounts in 000 Kuwaiti Dinars

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 5bbiU`FYdcfh

3.3 Fair value estimation

The fair values of nancial assets and nancial liabilities are determined as follows:
- Level one: Quoted prices in active markets for identical assets or liabilities.
- Level two: Quoted prices in an active market for similar instruments. Quoted prices for identical assets or
liabilities in market that is not active. Inputs other than quoted prices that are observable for assets
and liabilities.
- Level three: Inputs for the asset or liabilities that are not based on observable market data.
The table below gives information about how the fair values of the nancial assets and liabilities are determined:
Fair value as at 31 December Valuation Relationship of
Financial assets Signicant
Fair value technique(s) unobservable
unobservable
2014 2013 hierarchy and Key inputs to fair
input(s)
input(s) value
Available for sale investments:
Local shares quoted 59,479 73,883 Level one Last bid price NA NA
Foreign shares quoted 17,355 18,466 Level one Last bid price NA NA
Local shares quoted 1,119 1,127 Level two Net assets value NA NA
Fair value of nancial assets and nancial liabilities that are not measured at fair value on a recurring basis (but
fair value disclosures are required):
31 December 2014 31 December 2013
Carrying Carrying
Fair value Fair value
amount amount
Financial assets
Trade receivables 62,290 62,290 56,474 56,474

Financial liabilities
Borrowings and bank facilities 67,353 67,353 82,627 82,627
Trade and other payables 176,116 176,116 153,697 153,697
Total 243,469 243,469 236,324 236,324

Fair value hierarchy as at 31 December 2014

Level 1 Level 2 Level 3 Total
Financial assets
Trade receivables - - 62,290 62,290

Financial liabilities
Borrowings and bank facilities - - 67,353 67,353
Trade and other payables - - 176,116 176,116
Total - - 243,469 243,469

Fair value hierarchy as at 31 December 2013

Level 1 Level 2 Level 3 Total
Financial assets
Trade receivables - - 56,474 56,474

Financial liabilities
Borrowings and bank facilities - - 82,627 82,627
Trade and other payables - - 153,697 153,697
Total - - 236,324 236,324
The fair values of the nancial assets and nancial liabilities included in the level 3 category above have been
determined in accordance with generally accepted pricing models based on a discounted cash ow analysis.
All amounts in 000 Kuwaiti Dinars

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 4. Critical accounting estimates and assumptions
In the application of the Groups accounting policies, the Management is required to make judgements, estimates

and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other

sources. The estimates and associated assumptions are based on historical experience and other factors that are

considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period

of the revision and future periods if the revision affects both current and future periods. The following are the key

assumptions concerning the future, and other key sources concerning current period, that have a signicant risk of

causing a material adjustment to the carrying amounts of assets and liabilities within the next nancial years.

Control over Bahrain & Kuwait Restaurant Company

Note 25.1 describes that Bahrain & Kuwait Restaurant is a subsidiary of the Group although the Group only owns

a 40% ownership interest in Bahrain & Kuwait Restaurant. Based on the contractual arrangements between the

Group and other investors, the Group has the power to appoint and remove the majority of the board of directors

that has the power to direct the relevant activities. Therefore, the management of the Company concluded that the

Group has the practical ability to direct the relevant activities of Bahrain & Kuwait Restaurant unilaterally and hence

the Group has control over Bahrain & Kuwait Restaurant.

Valuation of nancial instruments

Some of the Groups assets and liabilities are measured at fair value for nancial reporting purposes. The Group

management determines the appropriate valuation techniques and input for fair value measurement. In estimating

the fair value of an asset at a liability the Group uses market observable data to the extent it is available.

Information about valuation techniques and input used in determining the fair value of various assets and liabilities

are disclosed in note 3.3.

Impairment of tangible and intangible assets

The Group reviews the tangible and intangible assets on a continuous basis to determine whether a provision for

impairment should be recorded in the consolidated statement of income. In particular, considerable judgment by

management is required in the estimation of the amount and timing of future cash ows when determining the

level of provisions required. Such estimates are necessarily based on assumptions about several factors involving

varying degrees of judgment and uncertainty, and actual results may differ from what is estimated resulting in future

changes to such provisions.

Evidence of impairment of investments

Management determines the impairment in equity instruments classied as available for sale when there is a signicant

or prolonged decline in the fair value of these investments. Determination of what is signicant or prolonged requires

judgment from management. The Group evaluates, among other factors, the usual uctuation of listed stock prices,

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 5bbiU`FYdcfh

expected cash ows and discount rates of unquoted investments, impairment is considered appropriate when there is

objective evidence on the deterioration of the nancial position for the investee, including factors such as industry and

sector performance, changes in technology and operational and nancing cash ows. The impact of such impairment

on these consolidated nancial statements is disclosed in note (22).

Impairment of inventory

As each nancial position date, management assesses whether there is any indication that inventory is impaired. The

determination of impairment requires considerable judgment and involves evaluating factors including, industry and

market conditions. The impact of such impairment on these consolidated nancial statements is disclosed in note (9).

Impairment of Receivables

The Groups management determines impairment of receivables in the light of the Groups previous experience

about collectability, overdue period, change in global and local economies which led the customers to default in

payment. Impairment of receivables is recorded for receivables which are matured and not settled for more than 90

days. The impact of such impairment on these consolidated nancial statements is disclosed in note (10).

Valuation of investment properties

The Company carries its investment properties at fair value, with changes in fair value being recognised in the

consolidated statement of income. The Company engaged independent valuation specialists to determine fair

values and the valuers have used valuation techniques to arrive at these fair values. These estimated fair values of

investment properties may vary from the actual prices that would be achieved in an arms length transaction at the

reporting date (note 6).

Contingent liabilities / liabilities

Contingent liabilities are potential liabilities that arise from past events whose existence will be conrmed only

by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the

entity. Provisions for liabilities are recorded when a loss is considered probable and can be reasonably estimated.

The determination of whether or not a provision should be recorded for any potential liabilities is based on

managements judgment (note 27).

Taxes

The Group is subject to income taxes in numerous jurisdictions. Signicant judgment is required in determining the

provision for income taxes. There are many transactions and calculations for which the ultimate tax determination

is uncertain during the ordinary course of business. The Group recognizes a liability for anticipated taxes based on

estimates of whether additional taxes will be due. Where the nal tax outcome of these matters is different from the

amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the

period in which such determination is made.

Any changes in the estimates and assumptions may have an impact on the carrying values of the deferred tax assets.

77
 5. Property, plant and equipment
Decoration Building & Equipment Projects in
Land Vehicles Total
& Furniture cold room & tools progress

Cost
As at 1 January 2013 34,022 96,532 90,868 186,865 25,282 25,110 458,679
Additions 143 6,240 2,318 14,672 1,773 22,764 47,910
Disposals (7) (9,418) (2,562) (8,579) (1,842) (333) (22,741)
Foreign currency translation
difference (2,552) (1,477) (4,597) (8,671) (1,170) (1,304) (19,771)
Transfers 7 10,091 1,344 5,230 333 (26,550) (9,545)
As at 31 December 2013 31,613 101,968 87,371 189,517 24,376 19,687 454,532
Additions 401 6,457 3,046 12,071 3,206 24,697 49,878
Disposals (666) (6,682) (699) (6,327) (1,431) (198) (16,003)
Foreign currency translation
difference 763 2,324 2,144 4,796 619 512 11,158
Transfers 154 9,913 7,903 9,811 241 (30,379) (2,357)
As at 31 December 2014 32,265 113,980 99,765 209,868 27,011 14,319 497,208

Accumulated depreciation
As at 1 January 2013 - 65,738 35,489 108,027 18,856 - 228,110
Depreciation for the year - 12,304 3,830 15,387 2,636 - 34,157
Disposals - (9,001) (2,472) (7,839) (1,726) - (21,038)
Foreign currency translation
difference - (781) (1,044) (4,188) (985) - (6,998)
Transfers - (1,464) (48) 1,616 (104) - -
As at 31 December 2013 - 66,796 35,755 113,003 18,677 - 234,231
Depreciation for the year - 12,765 4,181 16,952 2,793 - 36,691
Disposals - (6,020) (521) (5,680) (1,353) - (13,574)
Foreign currency translation
difference - 1,578 867 2,970 464 - 5,879
Transfers - (436) (61) 575 (78) - -
As at 31 December 2014 - 74,683 40,221 127,820 20,503 - 263,227

Net Book Value

As at 31 December 2013 31,613 35,172 51,616 76,514 5,699 19,687 220,301
As at 31 December 2014 32,265 39,297 59,544 82,048 6,508 14,319 233,981
Useful life (year) - 5-7 5-25 4-7 4

The Group has capitalized borrowing costs of Nil for projects in progress during the year ended

31 December 2014 (KD 49 thousand 2013).

Property, plant and equipment include lands and buildings amounted to KD 7,904 thousand as at
31 December 2014 (KD 7,866 thousand 2013) owned based on initial contracts. The necessary legal procedures

to transfer these lands and buildings in name of the Group are still in progress.
All amounts in 000 Kuwaiti Dinars

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6. Investment properties
2014 2013
Balance at 1 January 17,021 -
Transferred from project in progress 2,050 8,852
Additions 400 1,992
Gain from investment properties valuation 7,230 6,177
Foreign currency translation difference 285 -
Balance at end of the year 26,986 17,021

The fair value of the Groups investment property as at 31 December 2014 has been arrived at on the basis of a

valuation carried out on the respective dates by independent valuers not related to the Group. The independent

valuers are registered at the related governmental bodies, and they have appropriate and recent experience in the

valuation of properties in the relevant locations. The fair value of the investment property of KD 26,986 thousand as

at 31 December 2014 (KD 17,021 thousand 2013) was determined based on the market comparable approach

that reects recent transaction prices for similar properties (level 2).

7. Intangible assets
Franchises &
Goodwill Key Money Total
agencies
Cost
Balance at 1 January 2013 2,053 11,784 13,605 27,442
Additions 618 1,653 255 2,526
Transfers from projects in progress - 61 632 693
Disposals - (818) (40) (858)
Foreign currency translation difference (90) (65) 6 (149)
Balance at 31 December 2013 2,581 12,615 14,458 29,654
Additions - 1,537 438 1,975
Transfers from projects in progress - 69 238 307
Impairment (305) - - (305)
Disposals - (262) (41) (303)
Foreign currency translation difference 76 276 121 473
Balance at 31 December 2014 2,352 14,235 15,214 31,801

Amortization
Balance at 1 January 2013 - 7,836 7,871 15,707
Amortization - 874 870 1,744
Disposals - (669) (40) (709)
Foreign currency translation difference - (28) (9) (37)
Balance at 31 December 2013 - 8,013 8,692 16,705
Amortization - 1,133 897 2,030
Disposals - (208) (40) (248)
Foreign currency translation difference - 195 41 236
Balance at 31 December 2014 - 9,133 9,590 18,723

Net Book Value

As at 31 December 2013 2,581 4,602 5,766 12,949
As at 31 December 2014 2,352 5,102 5,624 13,078
All amounts in 000 Kuwaiti Dinars

79
 8. Available for sale investments
2014 2013
Local quoted shares 60,598 75,010
Foreign quoted shares 17,355 18,466
Foreign unquoted shares 1,814 3,350
79,767 96,826

8.1 Fair value of available for sale investments has been determined based on valuation basis (note 3.3).

8.2 Investments in unquoted shares were carried at cost less the impairment losses as its fair value cannot reliably

measured at the consolidated nancial statements date.

9. Inventories
2014 2013
Raw materials 53,847 53,851
Finished goods 17,885 16,407
Filling and packing materials 12,405 11,925
Other materials 12,055 10,405
Goods in transit 5,481 5,115
101,673 97,703
Provision for slow moving items (2,426) (2,355)
Spare parts 10,204 9,609
109,451 104,957

The cost of inventories recognised as an expense during the year was KD 440,595 thousand (KD 425,475

thousand - 2013). This amount includes KD 202 thousand during 2014 (KD 138 thousand - 2013) in respect

of write-downs of inventory to net realisable value, and has been reduced by KD 131 thousand during 2014

(KD 885 thousand - 2013) in respect of the reversal of such write-downs.

10. Trade receivables

2014 2013
Trade receivables 55,863 48,894
Other receivables 13,428 13,872
Due from related parties (note 28) 94 89
69,385 62,855
Allowance for doubtful debts (7,095) (6,381)
62,290 56,474

10.1 The average credit period granted to trade receivables on sales of goods is 90 days. No interest is charged
on trade receivables. There are no customers who represent more than 10% of the total balance of trade

receivables.

10.2 Trade receivables which are not matured and not impaired amounted to KD 41,065 thousand as at
31 December 2014 (KD 39,778 thousand - 2013).
All amounts in 000 Kuwaiti Dinars

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10.3 Trade receivables include KD 9,278 thousand as at 31 December 2014 (KD 4,322 thousand - 2013) that

are past due but not impaired. The aging of this amount is 3 to 6 Months.

10.4 Trade receivables include KD 5,520 thousand as at 31 December 2014 (KD 4,794 thousand - 2013) that

are past due and impaired.

10.5 The fair value of the guarantees obtained by the Group is amounted to KD 26,444 thousand as at

31 December 2014 (KD 19,639 thousand - 2013).

10.6 Movement in the allowance for doubtful debts during the year:
2014 2013
Balance at 1 January 6,381 6,585
Provisions provided during the year 1,517 1,325
Written off debts (352) (62)
Reversal of provision no longer required (451) (1,467)
As at 31 December 7,095 6,381

11. Other receivables

2014 2013
Prepaid expenses 21,828 18,873
Refundable deposit 5,254 5,010
Accrued income 3,503 4,095
Other 14,409 12,822
44,994 40,800

12. Cash on hand and at nancial institutions

2014 2013
Cash on hand and banks current accounts 36,236 33,614
Time deposits and banks call accounts 78,943 60,768
115,179 94,382
Less: deposits more than 3 month (16,136) -
Cash and cash equivalent for statement of cash ows purpose 99,043 94,382

The average effective interest rate on the deposits and banks call accounts was 0.03% - 8.25% as at

31 December 2014 (0.03% - 7.5% - 2013).

13. Share capital

The authorized, issued and paid up capital is KD 40,200 thousands comprising of 402,002 thousand shares with

nominal value of 100 ls each. All shares are in cash.

All amounts in 000 Kuwaiti Dinars

81
 14. Treasury shares
2014 2013
Number of shares (thousand shares) 10,848 10,848
Percentage to issued share capital (%) 2.7 2.7
Market value 29,940 27,120

The Parent Company is required to retain reserves and retained earnings equivalent to the value of treasury shares

throughout the period, in which they are held by the company, pursuant to instructions of the relevant regulatory

authorities.

15. Statutory reserve

In accordance with the Companies law and the Parent Companys Articles of Association, 10% of the net prot

before KFAS, National Labour Support Tax, Board of Directors remuneration and Zakat expense for the year is

required to be transferred to statutory reserve. The General Assembly may resolve to discontinue such annual

transfers when the statutory reserve reaches 50% of the Companys paid up capital. Distribution of the statutory

reserve is limited to the amount required to enable the payment of a dividend of 5% of paid up capital to be made

in years when accumulated prots are not sufcient for the payment of such dividend.

16. Voluntary reserve

In accordance with the Parent Companys Articles of Association, 5% of net prot for the year is to be transferred

to the voluntary reserve. This transfer may be stopped by a resolution adopted by the ordinary assembly as

recommended by the Board of Directors. There are no restrictions on distributions from the voluntary reserve. The

transfer ceased in accordance with the ordinary General Assembly decision on 12 April 1999.

17. Non-Controlling interests

2014 2013
Balance at 1 January 40,799 37,528
Share from net prot for the year 6,156 7,738
Other comprehensive income items:
Foreign currency translation differences 454 (1,205)
Reclassication related to disposals of available for sale investments during the year (40) -
Change in fair value of available for sale investments (418) (972)
(4) (2,177)
Other changes in non-controlling interests:
Share from subsidiarys capital increase 740 -
Cash dividends from subsidiaries (5,937) (2,290)
(5,197) (2,290)
Balance at 31 December 41,754 40,799

All amounts in 000 Kuwaiti Dinars

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18. Borrowings and bank facilities

2014 2013
Short term
Bank overdraft 37,719 37,800
Loans 16,584 18,923
54,303 56,723
Long term
Loans 13,050 25,904
67,353 82,627

Maturity of borrowings and bank facilities is as follows:

2014 2013
Within one year 54,303 56,723
More than one year to three years 9,874 16,891
Over three years 3,176 9,013
67,353 82,627

18.1 Borrowings and bank facilities are carried at variable interest rates. The effective interest rate on the
borrowings and bank facilities was 8.15% as at 31 December 2014 (8% - 2013).

18.2 Borrowings and bank facilities are secured against issuance of promissory notes, letters of guarantee,
commercial pledge on inventory, tangible and intangible assets of some Groups subsidiaries, insurance

policies and joint security issued by the Parent Company.

19. Trade and other payables

2014 2013
Trade payables 46,583 42,802
Non-trade payables 43,206 41,651
Accrued expenses and salaries 33,499 27,545
Provisions 13,756 12,098
Other liabilities 10,085 5,682
Other credit balances 18,166 15,365
Deposits due to other 2,028 1,686
Accruals to staff 5,961 4,629
Dividends 412 387
Board of Directors remunerations 72 72
Taxes and deductions 2,348 1,780
176,116 153,697

All amounts in 000 Kuwaiti Dinars

83
 20. Other operating expenses
2014 2013
(Provide)/ reverse of provisions (2,467) 99
Foreign currency gain/ (losses) 1,023 (1,444)
Other 2 3
(1,442) (1,342)

21. Investment properties income

2014 2013
Gain from investment properties valuation 7,230 6,177
Rental income 1,327 554
8,557 6,731

22. Net losses from available for sale investments

2014 2013
Realized losses (1,625) -
Impairment of available for sale investments (20,162) (20,484)
Cash dividends 4,489 4,528
Portfolios management fees (316) (334)
(17,614) (16,290)

23. Earnings per share

Earnings per share is calculated by dividing the net prot attributable to the equity shareholders of the Parent

Company by the weighted average number of the issued ordinary shares after deducting the weighted average of

treasury shares during the year as follows:

2014 2013
Net prot for the year attributable to the shareholders of the Parent Company 52,021 50,598
Weighted average number of issued shares (thousand share) 402,002 402,002
Weighted average number of treasury shares (thousand share) (10,848) (10,848)
Weighted average number of outstanding shares (thousand share) 391,154 391,154
Eearnings per share (Fils) 133 129

24. Cash dividends

On 6 April 2014, the shareholders approved the Groups consolidated nancial statements for the year ended

31 December 2013, and approved cash dividends of 85% from prots of 2013.

On 2 March 2015, the Board of Directors proposed a cash dividend of 90% for the year ended 31 December 2014,

subject to the approval of the Parent Companys shareholders and the regulatory bodies.

All amounts in 000 Kuwaiti Dinars

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25. Investments in subsidiary companies

25.1 Composition of the Group

Place of
Companys Name Activity Ownership (%)
incorporation
2014 2013

Al Americana International Company (Safeway). Retail Kuwait 89.55 89.55

Arab Gulf Company for Food (Americana) Food Kuwait 99.97 99.25

Al Ahlia Restaurants Co. Restaurants Saudi Arabia 99.96 99.96

Al-Ahlia National Food Industries Co. Industry Saudi Arabia 99.96 99.96

International Fashion Co. Retail Saudi Arabia 100 100

Bahrain and Kuwait Restaurants Co. Restaurants Bahrain 40 40

International Cosmetics Co. Retail Saudi Arabia 100 100

United Food Co. Food Saudi Arabia 98 98

Kuwait Food Co. Food Egypt 100 100

Kuwait Food Co. Restaurants UAE 100 100

Americana International Company (Fashion way) Retail UAE 97.40 97.40

Gulf Food Industries Co. - (California Garden) Industry UAE 100 100

Qatar Food Co. Restaurants Qatar 100 100

Touristic Projects and International Restaurants Co. Restaurants Jordan 64.08 64.08

International Tourism Restaurants Co. Restaurants Oman 99 99

International Touristic Projects Lebanese Co. Restaurants Lebanon 98 98

Gulf and Arab World Restaurants Co. Restaurants Bahrain 94 94

Al Inmaa Syrian Co. Restaurants Syria 80 80

Gulfa for Mineral Water Industry UAE 92.70 92.70

The Caspian International Restaurants Co. Restaurants Kazakhstan 100 100

Khosh Taam International Food Company Restaurants Iran 90 90

International Food Company Restaurants Turkey 100 100

Al-Musharaka Company for Touristic Restaurant Services Restaurants Kurdistan - Iraq 90 90

Americana Group for Food and Touristic Projects and its

subsidiaries. Holding Egypt 99.97 99.97

U Subsidiaries nancial statements have been consolidation based on audited nancial statements as at

31 December 2014.

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 25.2 Details of non-wholly owned subsidiaries of the Group that have material

non-controlling interests

Proportion of
Place of incorporation ownership interests Prot allocated to
Name of Accumulated
and principal place of and voting rights held non-controlling
subsidiary non-controlling interests
business by non-controlling interests
interests%

2014 2013 2014 2013 2014 2013

Cairo Poultry Egypt 48.03 48.03 3,301 4,628 20,676 21,896

Cairo Poultry is a subsidiary of Americana Group for Food and Touristic Projects (Egypt):

Summarised nancial information in respect of this subsidiary is set out below:

2014 2013
Current assets 26,153 26,363
Non-current assets 52,821 51,325
Current liabilities (29,217) (24,063)
Non-current liabilities (7,218) (8,575)
Equity attributable to shareholders of the Parent Company 21,863 23,154
Shares of non-controlling interests 20,676 21,896

2014 2013
Revenue 94,979 99,006
Expenses (88,176) (89,452)

Prot attributable to shareholders of the Parent Company 3,502 4,926

Prot attributable to the non-controlling interests 3,301 4,628
Prot for the year 6,803 9,554

Total other comprehensive income attributable to shareholders of the

Parent Company (476) (799)
Total other comprehensive income attributable to the non-controlling interests (440) (738)
Total other comprehensive income for the year (916) (1,537)

Total comprehensive income for the year attributable to shareholders of the

Parent Company 3,026 4,127
Total comprehensive income for the year attributable to the non-controlling interests 2,861 3,890
Total comprehensive income for the year 5,887 8,017

Dividends paid to non-controlling interests 3,387 -

Net cash ow from operating activities 14,792 18,739

Net cash ow used in investing activities (8,613) (6,350)
Net cash ow used in nancing activities (4,690) (8,999)
Net cash inow 1,489 3,390

All amounts in 000 Kuwaiti Dinars

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26. Segment information

26.1 Geographical and operating segments for the revenues and results

The Group activities are concentrated in two main sectors:

- Restaurants & Retail Sector which consists of subsidiaries and branches that operate in all kinds of restaurants and
representing foreign specialized foodstuff companies as well as trading in foodstuff products.

- Food Industries Sector which consists of all subsidiaries and branches that operate in the manufacturing of foodstuff
and beverages; sale of such items on both a retail and wholesale.
The results of the two sectors are reported to the top executive management in the Group. In addition, the revenue,
results, prot, assets and liabilities are being reported on geographic basis and being measured in accordance
with the same accounting bases used for the preparation of consolidated nancial statements.
The following is the segment information which is consists with the internal reporting presented to management:

Restaurants & Retail Food Industries Intercompany

Total
sector sector transactions
2014 2013 2014 2013 2014 2013 2014 2013
Revenue
Kuwait 86,585 81,107 43,489 38,822 (3,348) (3,248) 126,726 116,681
Saudi Arabia 125,634 115,018 105,630 98,552 (23,095) (24,419) 208,169 189,151
South Gulf 180,698 169,209 55,017 53,579 (9,131) (7,348) 226,584 215,440
Egypt and Africa 89,309 77,282 256,625 253,464 (34,265) (31,548) 311,669 299,198
Sham and others 49,210 46,434 - - - - 49,210 46,434
Total 531,436 489,050 460,761 444,417 (69,839) (66,563) 922,358 866,904

Restaurants & Retail Food Industries

Total
sector sector
2014 2013 2014 2013 2014 2013
Segment results
Kuwait 9,770 10,809 5,139 3,680 14,909 14,489
Saudi Arabia 15,580 14,357 9,147 8,090 24,727 22,447
South Gulf 19,333 17,885 4,140 4,096 23,473 21,981
Egypt and Africa 7,102 6,105 10,767 17,347 17,869 23,452
Sham and others 2,135 1,141 - - 2,135 1,141
Total 53,920 50,297 29,193 33,213 83,113 83,510
Add the following:
Investment properties income 8,557 6,731
Net losses from available for sale investments (17,614) (16,290)
Others (4,372) (7,820)
Prot before income tax of subsidiaries 69,684 66,131

Restaurants & Retail Food Industries

Unallocated items Total
sector sector
2014 2013 2014 2013 2014 2013 2014 2013
Assets 292,557 256,350 334,017 311,080 61,618 78,665 688,192 646,095
Liabilities 153,288 142,229 147,520 145,685 (18,149) (18,161) 282,659 269,753

All amounts in 000 Kuwaiti Dinars

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 26.2 Geographical segments of assets and liabilities
2014

Saudi South Egypt Sham

Kuwait Total
Arabia Gulf & Africa & others

Assets
Property, plant and equipment and
intangible assets 17,377 40,128 29,593 143,229 16,732 247,059
Investments properties 13,820 - 1,186 11,980 - 26,986
Available for sale investments 69,583 - - 10,184 - 79,767
Other assets - - - 2,466 - 2,466
Inventories 13,834 23,558 14,631 52,894 4,534 109,451
Trade receivables 8,303 14,062 14,259 24,471 1,195 62,290
Other receivables 3,703 7,698 10,227 21,304 2,062 44,994
Cash on hand and at nancial institutions 58,726 20,984 10,420 21,753 3,296 115,179
Total assets 185,346 106,430 80,316 288,281 27,819 688,192
Liabilities
Borrowings and bank facilities 302 3,001 5,489 56,137 2,424 67,353
Trade and other payables and End of
service indemnity 62,078 42,901 41,889 61,041 7,397 215,306
Total liabilities 62,380 45,902 47,378 117,178 9,821 282,659

2013

Saudi South Egypt Sham

Kuwait Total
Arabia Gulf & Africa & others

Assets
Property, plant and equipment and
intangible assets 18,413 36,032 27,129 138,677 12,999 233,250
Investments properties 6,765 - 867 9,389 - 17,021
Available for sale investments 86,179 - - 10,647 - 96,826
Other assets - - - 2,385 - 2,385
Inventories 14,650 23,095 13,239 50,752 3,221 104,957
Trade receivables 7,946 11,250 11,822 23,815 1,641 56,474
Other receivables 3,860 6,071 9,186 19,956 1,727 40,800
Cash on hand and at nancial institutions 46,168 16,442 10,179 16,902 4,691 94,382
Total assets 183,981 92,890 72,422 272,523 24,279 646,095
Liabilities
Borrowings and bank facilities 2,651 9,233 4,204 64,586 1,953 82,627
Trade and other payables and End of
service indemnity 53,273 34,529 38,709 52,906 7,709 187,126
Total liabilities 55,924 43,762 42,913 117,492 9,662 269,753

All amounts in 000 Kuwaiti Dinars

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27. Contingent liabilities and capital commitments

2014 2013
Contingent liabilities
Letters of guarantee 4,753 4,048

There is a conict between the group and the tax department regarding the method of calculating the deductions.

That conict is still under legal dispute in the courts and its impact cannot be currently determined, full provisions

for this purpose have been provided.

Leased commitments
Less than one year 23,777 20,191
From two years to ve years 60,313 47,702
More than ve years 44,201 56,584
128,291 124,477

Capital commitments
Letters of credit 8,171 2,159
Projects in progress commitments 12,175 13,175

28. Related parties transactions

Related parties represent shareholders who have representatives in the Boards of Directors, members of the Boards

of Directors, Senior Management and the companies who controlled by the major shareholders. In the ordinary

course of business, the Group has entered into transactions with related parties during the year. The following are

the transactions and balances resulting from these transactions:

2014 2013
Transactions
Revenues 223 200
Expenses 76 69
Portfolios management fees 316 334
Key management benets 1,480 4,590

Balances
Trade receivables 94 89
Key management termination benets 312 301

All amounts in 000 Kuwaiti Dinars

89
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