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GB Auto and its subsidiaries (S.A.E.)
Notes to the consolidated financial statements For the financial Year ended December 31, 2014
(In the notes all amounts are shown in Thousand Egyptian Pounds unless otherwise stated)
O. Share capital
Ordinary shares are classified as equity. Share premiums, if any, are taken to statutory reserve. The costs of issuing capital and amounts
collected from shareholders to recover such costs are taken to the statutory reserve initially, and if it exceeded the share premium for
the same shares the excess amount is posted to special reserve in equity.
Where the Company or its subsidiaries purchases share capital of the parent company, the consideration paid including any attribut-
able incremental external costs is deducted from total shareholders’ equity of the parent company as treasury shares until they are
cancelled, sold, or reissued within one year from the date of purchase. Where such shares are subsequently sold or reissued, any con-
sideration received is included in shareholders’ equity of the parent company.
P. Share based payments
The Company has equity settled share based compensation plan. Equity settled share based payments are measured at fair value de-
termined at the grant date of the equity settled share based payments. The fair value of the share based payment is charged over the
vesting period based on the Company’s estimate of awards that will eventually vest.
Q. Loans and borrowings
Loans are recognised initially at the amount of the proceeds received, net of transaction costs incurred. Loans are subsequently carried
at amortised cost using the effective interest method; any difference between proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the borrowings periods.
The fair value of the liability portion of a convertible loan is determined using a market interest rate for an equivalent non-convertible
bond. This amount is recorded as a liability at the initial recognition and subsequently carried at an amortised cost until the nearest
of conversion or maturity of the bonds. The difference between the proceeds and the fair value of the liability portion is recognised in
shareholders’ equity.
Loans and borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
for more than 12 months after the balance sheet date.
R. Employee benefits
(1) Defined contribution plan
The Group pays contributions to the Public Authority for Social Insurance retirement plans on a mandatory basis based on
the rules of the social insurance law. Once contributions have been paid, the Group has no further payment obligations.
The regular contributions constitute net year costs for the year in which they are due and as such are included in staff costs.
(2) Profit sharing
When the Group pays cash dividends, the employees are entitled to 10%of those dividends as profit sharing. This is normally
paid in instalments during the year. Profit sharing is recognized as a dividend distribution through equity and as a liability
when approved by the Group’s shareholders. No liability is recognized for profit sharing related to undistributed profits.
S. Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an
outflow 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 expenditures expected to be required to settle the obligation.
T. Trade payables
Trade payables are recognized initially at the value of goods or services received fromothers, and subsequently measured at amortized
cost using the effective interest rate.
U. Derivative financial instruments
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at
their fair value. Fair values are obtained from quoted market prices in active markets, including recent market transactions, and valu-
ation techniques, including discounted cash flowmodels and options pricing models, as appropriate.
All derivatives are presented as assets when its fair value is positive and as liabilities when its fair value is negative.
Ghabbour Auto | 2014 ANNUAL REPORT
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