Alyusuf Decor 2012

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ALYUSUF DÉCORATION CO. W.L.L

TASHAN – KINGDOM OF BAHRAIN

FINANCIAL STATEMENTS

31 DECEMBER, 2012

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Index Page

Administration and contact details 2

Directors' report 3

Auditors’ report. 4 - 5

Statement of financial position 6

Statement of comprehensive income 7

Statement of cash flows 8

Notes to the financial statements. 9 - 13

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Commercial Registration No. : 985 - 1

Directors : Sayed Mohamed H. Alyusuf

Sayed Basim H AlyusufAl Yusuf Holding Co. W.L.L

Registered Office : Building 356, Road 81, Block 405TashanKingdom of Bahrain.

Bankers : National Bank of BahrainHSBCAhli United BankBahrain Islamic Bank

Auditors : Moore Stephens El-Sayed El-Ayouty & Co,Certified Public AccountantsP.O.Box : 11869Manama – Kingdom of Bahrain

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REPORT OF THE BOARD OF DIRECTORS

Legal Status

Principal activities The company is engaged in the following activities:

- First grade Décor contracts

Operating results

ShareholdingThe shareholding pattern at the end of the year under review was as follow:

Name of shareholders Shareholding (%)

Sayed Mohamed H. Alyusuf 10Sayed Basim H Alyusuf 10Al Yusuf Holding Co. W.L.L 80

Auditors

Sayed Mohamed H. AlyusufDirector

The board of directors presents its report and audited financial statements of the company for the year ended 31 December, 2012.

Alyusuf Decoration Co. W.L.L is a limited liability company incorporated in the Kingdom of Bahrain under the Commercial Company Law No. 21 of 2001 and its subsequent amendments.

During the year under review, the company achived a turnover of BD 1,986,986 and a net (loss) of BD (543,166) against a turnover of BD 2,788,775 and net profit of BD 285,537 of the previous year.

Messrs Moore Stephens, El-Sayed El-Ayouty & Co., Certified Public Accountants were appointed as external auditors of the company for the year ended 31 December, 2012. M/s Moore Stephens, El Sayed El Ayouty & Co., Certified Public Accountants are eligible for reappointment for 31 December, 2013 and have expressed their willingness to continue in office.

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AUDITORS’ REPORT TO THE SHAREHOLDERSALYUSUF DÉCORATION CO. W.L.LTASHAN – KINGDOM OF BAHRAIN

Report on the financial Statements

Board of directors responsibility for the financial statements

Auditors’ responsibility

We have audited the financial statements of Alyusuf Decoration Co. W.L.L which comprise of the statement of financial position as at 31 December, 2012, the related statement of comprehensive income and the statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes set out on pages 6 to 13.

The board of directors is responsible for the preparation and fair presentation of these financial statements in accordance with International financial Reporting Standard issued by the International Accounting Standards Board. This responsibility includes implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risk of material misstatements of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor’s considers internal controls relevant to the entity’s preparation and fair presentation of the financial 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 entity’s internal controls. An audit also include evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

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

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Opinion

Report on the regulatory requirements

MOORE STEPHENSEL-SAYED EL-AYOUTY & CO.Certified Public Accountants

MOHAMMED AL-SHAYEB

In our opinion, the financial statements presents fairly, in all material respects, the financial position of the company as at 31 December, 2012, the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

We have obtained all information and explanations which are necessary for the purpose of the audit and to the best of our knowledge and belief, no violation of the constitution of the company came to our attention which would materially affect the company’s financial position.

In addition, we report that nothing has come to our attention which causes us to believe that the company has breached any of the applicable provision of the Bahraini Commercial Companies Law No. 21 of 2001, or of its Articles of Association which would materially affect its activities or its financial position as at 31 December, 2012.

Kingdom of Bahrain : 23 November, 2013

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ALYUSUF DÉCORATION CO. W.L.LSTATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER, 2012(Amounts are expressed in Bahraini Dinars)

Note 2012 2011AssetsNon – current assetsProperty, plant and equipment 3 78,383 91,053

Current assetsInventories 1,078 - Accounts and other receivables 4 1,991,476 1,924,968 Due from related parties 5 145,151 62,335 Cash and bank balances 8,463 524

Total current assets 2,146,168 1,987,827

Total assets 2,224,551 2,078,880

Equity and liabilitiesEquityShare capital 6 300,000 300,000 Statutory reserve 7 150,000 150,000 Shareholders' current account 8 111,341 15,767 Accumulated (losses) / Retained earnings 9 (73,787) 469,274

Total Equity 487,554 935,041

LiabilitiesNon - current liabilitiesTerm loan 344,684 - Employees’ terminal benefits 126,369 108,505

Total non current liabilites 471,053 108,505

Current liabilitiesTerm loan 144,444 - Employees’ terminal benefits 70,943 72,769 Accounts and other payables 10 750,045 699,363 Due to related parties 11 9,671 113,686 Bank overdraft 290,841 149,516

Total current liabilites 1,265,944 1,035,334

Total Liabilities 1,736,997 1,143,839

Total equity and liabilities 2,224,551 2,078,880

The attached notes 1 to 13 form part of these financial statements

Sayed Basim H. Alyusuf Sayed Mohamed H. Alyusuf

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(Shareholder) (Shareholder)

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ALYUSUF DÉCORATION CO. W.L.LSTATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER, 2012(Amounts are expressed in Bahraini Dinars)

Note 2012 2011

IncomeIncome from operations 1,986,986 2,788,775

Cost of operations 12 (2,099,300) (1,969,477)

Gross (loss) / profit (112,314) 819,298

Other income 4,419 187

(107,895) 819,485

ExpensesGeneral and administration 13 (327,656) (478,195)Financial charge (87,186) (25,661)Amortization - (2,861)Depreciation 3 (25,000) (27,231)Prior year adjustment 4,676 -

Total expenses (435,166) (533,948)

Net (Loss) / Profit for the year 9 (543,061) 285,537 (Tranferred to accumulated losses)

Other comprehensive Income - -

Total comprehensive (loss) / income for the year (543,061) 285,537

The attached notes 1 to 13 form part of these financial statements

Sayed Basim H. Alyusuf Sayed Mohamed H. Alyusuf(Shareholder) (Shareholder)

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ALYUSUF DÉCORATION CO. W.L.LSTATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER, 2012(Amounts are expressed in Bahraini Dinars)

2012 2011

Operating activitiesTotal comprehensive (loss) / income (543,061) 285,537 Adjustments for:Depreciation 25,000 27,231 Amortization - 2,861

Changes in operating assets and liabilities Inventories (1,078) - Accounts and other receivables (66,508) (614,905)Due from related party (82,816) (62,335)Accounts and other payables 50,682 625,195 Due to related parties (104,015) 3,033 Employees’ end of service benefits (net) 16,038 4,839

Net cash (used in) / from operating activates (705,758) 271,456

Investing activitiesAcquisition of property, plant and equipment (14,430) (15,059)Disposal of fixed aseets 2,100 3,600

Net cash (used in) investing activities (12,330) (11,459)

Financing activitiesTransfer from retained earnings - (240,000)Proceeds from term loan 489,128 - Movements during the year (net) 95,574 (245,178)

Net cash from / (used in) financing activities 584,702 (485,178)

Net (decrease) in cash and cash equivalents (133,386) (225,181)Cash and cash equivalents at beginning of the year (148,992) 76,189

Cash and cash equivalents at end of the year (282,378) (148,992)

Cash and cash equivalents comprise:Cash and bank balances 8,463 524 Bank overdraft (290,841) (149,516)

(282,378) (148,992)

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ALYUSUF DÉCORATION CO. W.L.LNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2012(Amounts are expressed in Bahraini Dinars)

1 General information

- First grade Décor contracts.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

2.1 Accounting Convention:

2.2 Property, plant and equipment

a Furniture and Fixtures 25%b Office equipments 25%c Plant & Machinery 25%d Motor vehicle 25%

2.3 Cash and cash equivalent:

2.4 Inventory:

2.5 Accounts and other receivables

2.6 Accounts and other payablesTrade creditors are obligation on normal credit terms and do not bear interest.

Alyusuf Decoration Co. W.L.L is registered with the Ministry of Industry and Commerce, Kingdom of Bahrain as a limited liability company with Commercial Registration No. 985 -1 dated 19h May, 1968. The principle acitiviy of the company is:

The Financial Statements are prepared under the "Historical Cost Convention" and on accrual basis.

Property, Plant and Equipment are stated at cost less accumulated depreciation. The related depreciation is provided on cost of the assets by the straight line method at the following annual rates:

For the purpose of cash flow statement, cash and cash equivalents comprise of cash in hand and balances with banks and net of bank overdraft.

Inventories are valued at the lower of cost and net realizable value after making due allowances for any obsolete or slow moving items.

Trade debtors are recognised on normal credit terms and do not bear interest. Staff advances and loans also do not bear interest. At each reporting date, the carrying amounts of trade debtors and staff advances and loans are reviewed to determine whether there is any objective evidence that the amounts are not recoverable. If so, an impairment loss is recognised immediately in the income statement.

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2.7 Term loans

2.8 Employees' terminal benefit

Other benefits

2.9 Revenue recognition

Income from operations

Term loans are initially measured at the total amount payable (total no. of installments). Thereafter, these loans are reduced by the installments paid to the banks/financial institutions. Also on initial measurement, the total finance cost is accumulated which are then spread over the term of the loans on straight line basis. In management view, the policy is more suitable for the Company.

For Bahraini nationals, the company makes contribution to the Social Insurance Organization(SIO). This is a funded defined contribution plan and the company’s contributions are charged to the statement of comprehensive income in the year to which they relate. The company’s obligations are limited to the amounts contributed to the plan

For non-Bahraini employees the company provides for end of service benefits in accordance with the Bahrain Labor Law based on their salaries at the time of leaving and number of year of service. Provision for this unfunded commitment , which represents a defined benefit plan, has been made by calculating the liability had all employees left at the reporting date.

The company provides for employees' annual leave, holiday air passage in accordance with the Bahrain Labor Law. At each reporting date, the best estimated amount is calculated based on their salaries and number of year of service. Any other benefits are recognized as they accrue to the employees.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates and sales tax or duty. More specifically the following recognition criteria must also be met before revenue is recognized:

Income is calculated by using the percentage of completion method which represents the value of contract/project work executed during the year.

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3 Property, plant and equipment

Total

Cost:At 1 January, 2012 41,645 47,520 46,690 178,627 314,482

Additions - 1,130 - 13,300 14,430

Disposal - - - (2,100) (2,100)

At 31 December, 2012 41,645 48,650 46,690 189,827 326,812

Depreciation:At 1 January, 2012 34,692 32,683 44,626 111,428 223,429

Charge for the year 1,738 3,610 515 19,137 25,000

At 31 December, 2012 36,430 36,293 45,141 130,565 248,429

Net book value:At 31 December, 2012 5,215 12,357 1,549 59,262 78,383

At 31 December, 2011 6,953 14,837 2,064 67,199 91,053

2012 2011

4 Accounts and other receivablesTrade debtors 1,760,602 1,699,237

Provision for doubtful debt (32,594) (32,594) 1,728,008 1,666,643

Investment proceeds receivable 228,000 228,000

Refundable deposit 3,300 3,300

Staff advances 24,183 19,076

Other receivable 7,985 7,949

1,991,476 1,924,968

5 Due from related partiesAlyusuf Holding Co. W.L.L 87,258 22,000

Alyusuf Italconcept Co. W.L.L 32,000 -

Alyusuf Thermo Glass Co. W.L.L 1,678 -

Alyusuf Aluminium Co. W.L.L 21,020 -

Globart Gallery Co. W.L.L 2,740 261

Alyusuf Properties Co. W.L.L 455 -

Alyusuf Glass & Mirrors Co. W.L.L - 40,074

145,151 62,335

Furnitures & Fixtures

Office equipments

Plant & Machinery

Motor Vehicles

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6 Share capital

Name of the shareholders Ratio (%) Amount

Sayed Mohamed H. Alyusuf 300 10 30,000

Sayed Basim H. Alyusuf 300 10 30,000

Al Yusuf Holding Co. W.L.L 2,400 80 240,000

3,000 100 300,000

7 Statutory reserve

2012 2011

8 Shareholders' current accountOpening Balance 15,767 260,945

Movement (net) 95,574 (245,178)

111,341 15,767

9 Accumulated (losses)Opening Balance 469,274 423,737

Adjustment for the year - (240,000)

Net (Loss) / Profit : Page 7 (543,061) 285,537

(73,787) 469,274

10 Accounts and other payablesTrade creditors 650,175 678,136

Accrued expenses 181 -

Other payables 99,689 21,227

750,045 699,363

The Capital of the Company is BD. 300,000 (Bahraini Dinars Three Hundred Thousand only) divided into 3,000 shares of BD. 100 each contributed as under:

No. of shares

Under the provisoins of Bahrain commercial company law 2001 and the articles of association, 10% of the net profit for the year is transfered to the statutory reserve. The company may resolve to discontinue such transfers when the reserve equals to 50% of the capital. This reserve is not available for distribution except in the cases stipulated by law and company's article of association.

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2012 2011

11 Due to related partiesAlyusuf Holding Co. W.L.L - 35,650

Alyusuf Building materials Co. W.L.L 5,732 64,997

Alyusuf Glass & Mirrors Co. W.L.L 3,939 -

Alyusuf Aluminium Co. W.L.L - 3,851

Alyusuf Thermo Glass W.L.L - 9,188

9,671 113,686

12 Cost of salesCost of materials 1,615,762 1,468,953

Cost of labor 399,838 379,629

Other direct expenses 83,700 120,895

2,099,300 1,969,477

13 General and administration expensesStaff costs 238,732 167,849

Advertising and promotional expenses 5,302 5,019

Other expenses 83,622 305,327

327,656 478,195

Alyusuf Decor 2012

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