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Impairment test of cash generating units including goodwill
Goodwill is allocated to the Group›s cash generating units according to operating segments as presented below:
December 31,
2017
December 31,
2016
Two and three wheels’ activities
177 375
177 375
Hyundai Iraq sales
248 934
253 557
Financial leasing activity
1 000
1 000
427 309
431 932
The company assesses annually the impairment of goodwill at December 31, to ensure whether the carrying amount
of the goodwill is fully recoverable, unless there are indicators required to test the impairment through the year.
Impairment of goodwill is assessed based on value in use, which is determined using the expected discounted cash
flows based on estimated budgets approved by the Board of Directors covering five years’ period.Themanagement is
preparing these estimated budgets based on the financial, operating and market performance in the previous years
and its expectations for the market development.
17. Investments property
December 31,
2017
December 31,
2016
Balance at 1 January
91 512
91 512
Disposals during the year
(607)
-
Balance at the end of the year
90 905
91 512
18. Issued and paid in capital
December 31,
2017
December 31,
2016
Authorized capital (5 000 000 000 shares with par value EGP 1 each)
5 000 000
5 000 000
Issued and paid capital (1 094 009 733 shares of EGP 1 each)
1 094 010
1 094 010
•
At the date of August 31, 2014, the Board of Directors according to the delegation of the extra ordinary assembly
meeting held onMarch 27, 2013, has decided unanimously to increase the Company’s issued capital with the par
value in the limit of the authorized capital with an amount of EGP 6 444 645 divided on 6 444 645 shares with a
par value of 1 EGP /share, wholly allocated toESOP systemwhich is applied by the company, resulted in an issued
capital of EGP 135 337 545 after the increase divided on 135 337 545 shares with a par value of 1 EGP/share, and
this increase financially fully paid from the special reserve balance and annotated in the commercial register at
December 31, 2014.
Private placement (Capital increase)
•
At the date of February 4, 2015, the extra ordinary general assembly meeting, has agreed to increase the com-
pany’s authorized capital from 400 million EGP to 5 billion EGP and to increase the company’s issued capital
from EGP 135 337 545 to be EGP 1 095 337 545 with an increase of EGP 960 000 000 to be divided on 1 095 337
545 shares with a par value of 1 EGP each.(In additional to issuance cost of 1 pts./share), and that increase to be
fully allocated for the favor of old shareholders each according to their share in the company’s issued capital , and
it is agreed to use the subscription right separately from the original share, with the company’s issued capital
increase to be paid either cash and/or using due cash debts for the subscriber by the company according to their
contribution share.
•
The subscription was covered by an amount of EGP 958 672 188 (EGP 473 225 502 in Cash and EGP 485 446 686
covered through the outstanding balances due to shareholders) divided on 958 672 188 shares with a par value of
1 EGP each to be the total capital issued and fully paid after the increase equals to EGP 1 094 009 733, it has been
annotated in the commercial register at May 31, 2015.
19. Shares of the company held by the Group
Shares of the Company held by the Group represented in the shares owned by one of the Companies of the Group
amounted to26 506 119 shares at thepar value of EGP26 506 thousand inGBAutoCompany capital which is acquired
byAlmora resources Company one of theGroup subsidiarieswhich is 100%owned.The acquisition cost amounted to
EGP 126 231 thousand.The share premiumwhich is transferred to special reserve has been reduced by the difference
between the acquisition cost and the par value amounted to EGP 99 725 thousand.
At the date of February 23, 2017, the number of 26 506 119 shares was sold. The special reserve was reduced by an
amount of EGP 50 638 thousand which represents the differences between treasury shares purchase cost amounted
to EGP 126 231 thousand and its reselling price amounted to EGP 75 593 thousand (Note 20).
20.Legal reserve
December 31,
2017
December 31,
2016
Balance at 1 January
311 125
296 570
Transferred to legal reserve
9 867
14 555
Balance at the end of the year
320 992
311 125
Inaccordancewith theCompanies LawNo159of 1981 and theCompany’s articles of association, 5%of annual net profit
is transferred to the legal reserve. Upon the recommendation of the board, the Company may stop such transfer when
the legal reserve reaches 50%of the issued capital. The legal reserve is not eligible for distribution to shareholders.
The legal reserve includes an amount of EGP 66 762 related to the Company, the rest of the balance represents the
legal reserve of the Group’s Companies.
Share premium
The share premium represented in the difference between the amount paid and par value for issued shares and issu-
ance cost is deducted from it.The share premiumwas transferred to both legal reserve and special reserve according
to LawNo. 159 of 1981, based on the authorization of the General AssemblyMeeting dated 29March 2008:
December 31,
2017
December 31,
2016
Share premium
916 803
975 688
86 • 2017 ANNUAL REPORT
2017 ANNUAL REPORT • 87
GB Auto (S.A.E.)
Notes to the consolidated financial statements for the financial year ended December 31, 2017
(In the notes all amounts are shown in Thousand Egyptian Pounds unless otherwise stated)