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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)
Combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except
where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future.
X. Segmental reporting
Business segments provide products or services that are subject to risks and returns that are different from those of other
business segment. Geographical segments provide products or services within a particular economic environment that is
subject to risks and returns that are different from those of components operating in another economic environment.
Y. Dividends
Dividends are recorded in the Group’s financial statements in the period in which they are approved by the Group’s share-
holders.
Z. Comparative figures
Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current period.
3. Financial risk management
1. Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency exchange rates risk, price
risk, cash flows and fair value interest rate risk), credit risk and liquidity risk. The Group’s efforts are addressed to minimize
potential adverse effects of such risks on the Group’s financial performance.
Market risk
(i) Foreign currency exchange rate risk
The Group is exposed to foreign exchange rate risk arising from various currency exposures, primarily with respect to
the US Dollar and Euro. Foreign exchange rate risk arises from future commercial transaction, assets and liabilities
in foreign currency outstanding at the consolidated balance sheet date, and also, net investments in foreign entity.
The below table shows the foreign currency positions at the consolidated balance sheet date, presented in EGP, as
follows:
December 31, 2014
December
31, 2013
Assets
Liabilities
Net
Net
US Dollars
176 066
(567 045)
(390 979)
(54 872)
Euros
2 140
(6 156)
(4 016)
(1 977)
Other currencies
73 013
(97 900)
(24 887)
7 497
(ii) Price risk
The Group has no investments in a quoted equity securities so it’s not exposed to the fair value risk due to changes
in prices.
(iii) Cash flows and fair value interest rate risk
The Group’s interest rate risk arises from long-term loans. Long-term loans issued at variable rates expose the Group
to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
Loans, borrowings and overdrafts at the balance sheet date with variable interest rates are amounted to EGP 4 825
Ghabbour Auto | 2014 ANNUAL REPORT
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