CONTINUING TO PROSPER
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CONTINUING TO PROSPER 2005 ANNUAL REPORT Egypt Kuwait Holding Company
Transcript of CONTINUING TO PROSPER
CONTINUING TO
PROSPER2005 ANNUAL REPORT
Egypt Kuwait Holding Company
only better
same old story..
Overview
Financial Highlights
Investment approach
Chairman's Statement
Board of Directors
Executive Management
Investment Portfolio
Financial Statements
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Our Family Regional SpecialistsDiversified Portfolio Hands-on Investment Partnerships
OurPillars ofStrengthare the same but the
outcome is not.
EIGHT YEARS of pursuing sound investment opportunitiesand focusing on long-term enhancement of value incompanies with strong growth potential.
laying the ground work for our continuing expansion.
Successfully
Our track record of excellence enables us to attract the highest caliber ofprofessionals in the region, build effectivepartnerships with international leaders andenjoy a robust financial position to raisecapital when needed. Our diversifiedportfolio is managed through conservativerisk/reward parameters that leave no roomfor speculation, yet maximize the return onshareholders' value.
integratingthe vital resources
required to deliver leadership results.
We distinguish ourselves by
Driving Performance
Ongoing Growth
2000 Net Profit Growth 20 %
2001 Net Profit Growth 10 %
2002 Net Profit Growth 9 %
2003 Net Profit Growth 34 %
2004 Net Profit Growth 20 %
We have been promising our shareholders consistency in growth.
Have we kept our promise for this year?
Not Exactly!
RECORD NET PROFIT GROWTH
RECORD NET PROFIT
RECORD MARKET CAPITALIZATION
RECORD DIVIDENDS
(5% CASH, 10% STOCK DIVIDENDS)
RECORD NET REVENUES
RECORD NET WORTH
FocusActionValue
Focusing on seed and early-stage investments, we rise to newchallenges and pursue companies that are well positioned for growth.
Our goal does not end with the closing of an acquisition. It ismerely the initial step of the process of delivering value. Oncean investment has been identified, we assemble the necessaryfinancial resources, build strategic alliances with internationalleaders and form a consortium of expertise to achieveleadership objectives.
It is the consistency of our intensive, hands-on involvementapproach that enables us to achieve our ultimate target:greater shareholder satisfaction.
The driving force behind the company's ongoing expansion is the proper integration of several
key business elements. We owe much of our success to the clear vision and carefully implement-
ed strategic planning of our talented top management team of experts. With a specialization in di-
verse industry sectors, EK Holding is empowered with the critical know-how to better identify the
risks and opportunities in prospective acquisitions and investments. Our solid financial structure
and sound reputation in the region offer access to the capital resources needed to seal the bid for
promising investments. Along with a global network of international leaders, EK Holding and its
partners apply an intensive, hands-on investment approach that enables our acquisitions to reach
their full growth potential and guarantees substantial added value. Maintaining such an investment
style has become a hallmark that will continue to propel the company into the future.
We enter the year 2006 with more confidence and enthusiasm than ever before. We have ad-
vanced both income and profit, maximized shareholders return on investment, and built on the
successes across our business spectrum. The astounding interest we have attracted from potential
investors has thrust the company into regional and global prominence - an ideal launching pad for
the new year. We look forward to implementing rigorous growth strategies that will enable us not
only to meet our shareholders expectations, but to exceed them.
Nasser M. Al-Kharafi
Chairman of the Board
CHAIRMAN'S STATEMENT
Each year EK Holding takes pride in reporting excellent progress in reaching its business targets
and enhancing the overall value of its diversified portfolio. Today, EK Holding is listed among lead-
ing financial indices, reflecting its strong position in the region - well-prepared for future growth;
ready to embark on another prosperous year in 2006.
We continue our track record of superior performance over the past 8 years, with consolidated
profits reaching up to US$ 55.3 million. However, the highlight of the year was the increase of
91% in consolidated profits, yielding a 41.7% return on capital, which reflected positively in our
share price.
NASSER M. AL-KHARAFIChairman of the Board
Dear Shareholders,
BOARD OF DIRECTORS
Mr. Nasser M. Al-Kharafi **
ChairmanPresident, Mohamed Abdelmohsen Al-Kharafi andSons Co. Chairman, Kuwait Food Company -(Americana) Utilities Development Company,Kuwait. Member of the Board of Directors, Dar Al Qabas Press Printing and Publishing Company,The National Bank of Kuwait S.A.K., Sheikh Sabah AlSalem Al Sabah Foundation, Refreshment TradingCompany. Managing Director, Aluminum IndustriesCompany W.L.L. Ranked number 29 on Forbes 2005list of World’s Richest People with a net worth of$12.4 billion.
Mr. Moataz Al-Alfi*
Managing DirectorChairman, Globe Telecom, Chairman,
Heinz–Egypt, Vice Chairman and Managing
Director, Cairo Poultry Company. Member of
the Board of Trustees of the American
University in Cairo, and Akhbar Al Yom
Academy. Member of the Board of Directors
of the Social Fund for Development, Member
of Egypt-US Business Council, Vice Chairman
of Future Generation Foundation.
Mr. Bassam Yusuf Al-GhanimVice Chairman
President, Al-Ghanim Industries Group.
Chairman and CEO, the Gulf Bank in Kuwait,
Vice President, Yusuf Al-Ghanim and Sons
W.L.L. Member of the Board of Directors, Al
Amana Investment Co.
* Member of the Executive Committee
** Chairman of the Executive Committee
Mr. Loay Jassim Al-Kharafi*
President, Loay Jassim Al-Kharafi Law Office.Chairman, Emak MarsaAlam for TouristDevelopment and UrbanInvestment - Egypt,Kuwait Pipe Industries andOil Services – Kuwait,International Pipe IndustryCo. – Egypt, VicePresident, MohamedAbdelmohsen Al-Kharafiand Sons Co. Member ofthe Board, Kuwait FoodCompany (Americana).Member, Kuwaiti BarAssociation.
Mr. Amin Abaza*
Chairman, Arab CottonGinning Co., CEO,Modern Nile CottonCompany.President, CottonExporters Association.Member of the Board ofDirectors of the EgyptianGeneral Authority forInvestments.Mr. Abaza submitted his resignation on December29th, 2005, to take overthe role of Minister ofAgriculture and LandReclamation.
Mr. Assad Al-Banwan*
Chairman,Telecommunications andConsultancy InformationGroup, MTC-VodafoneKuwait. CEO, NationalInvestments Company.Member of the Board ofDirectors of Gulf Cablesand Electrical IndustriesCompany, GlobeTelecom, ArabInternational InsuranceCompany.
Mr. Marzouk Al-Ghanim*
Chairman, BoubyanPetrochemical Company,Kuwait Sports Club. ViceChairman, Ali Thanyan Al-Ghanim and SonsGroup. CEO, Al-Ghanimand Sons AutomotiveCompany. Member of theBoard of Directors ofNational Gas Company -Egypt, Jebail ChemicalIndustries - Saudi Arabia,Quality Net Company -Kuwait, Globe Telecom-Egypt, Investment House-Kuwait.
Mr. Hussein Al-Kharafi *
CEO, Khalid Ali Al-Kharafiand Sons Co., Chairman,Kuwait Lebanon Companyfor Real EstateDevelopment, KuwaitiIndustries Union. Vice-Chairman, NationalPharmaceutical Company-Kuwait, Member of theBoard of Directors ofKuwait and Middle EastCompany for FinancialInvestments, PWCLogistics, National RealEstate Company, GeneralIndustrial Organization-Kuwait.
Sheikha Dr. SouaadMohamed Al-Sabah
Poet, Writer on EconomicalIssues, Chairman, ActionConsultancy Bureau.Fellow, St. CatherineCollege – Oxford – UK,Visiting Fellow, SurreyUniversity - UK. Researcher,Interested in HumanRights, Women’s Rights,Social Services for Childrenworldwide. FoundingMember of the ExecutiveCommittee for HumanRights Organization in theMiddle East.
Mr. Ayman Laz*
Financial Consultant,President and FoundingPartner, ASKA FinancialConsultants, Member ofthe Board of Directors ofnumber of leadingEgyptian companies.Member of the Board ofTrustees of the EgyptianGeneral Authority forInvestments.
Mr. Abdel MohsenAl-Fares*
Chairman and ManagingDirector, Kuwait LebanonHolding Company-Lebanon. Member of theBoard Of Directors ofMTC-Vodafone, Kuwait,Telecommunications andConsultancy InformationGroup.
Mr. Galal Al-Zorba*
Founder and CEO, NileClothing Company.Chairman, InternationalTrading Company - USA,Egypt Exporters Association,Egypt-US Business Council.Chairman of the Board ofDirectors of FederationEgyptian Industries.Chairman, Egyptian Centerfor Economic Studies.Member of the Board ofTrustees of the EgyptianGeneral Authority forInvestments.
Mr. Saad Al-Saad *
Chairman and CEO,National IndustriesGroup, Member of theBoard of Directors ofGulf Cables and ElectricalIndustries Company, theHigh Council forPlanning. FormerSecretary-General, KuwaitUniversity.
Mr. Mohamed EL Ansary
Regional General Managerfor Central Asia, Africa andMiddle East, Shell Trading& Shipping Co. - London -UK.International career withthe Shell Group,Specialized in BusinessDevelopment and GeneralManagement, interests inSocio-economicDevelopment.A Harvard Business SchoolGraduate.
* Member of the Executive Committee
SENIOR VICE PRESIDENT
Ayman Laz
Sobhy El Sehrawy
EXECUTIVE MANAGEMENT
Moataz Al Alfi
EXECUTIVE BOARD MEMBER
MANAGING DIRECTORSahar Farahat
CHIEF FINANCIAL OFFICER
Wael El OrabiMANAGER, PROJECTS MONITORING DEPARTMENT
VICE PRESIDENT, OIL & GASHossam Heiba
SENIOR ANALYSTSherif Ibrahim
Long-term growth, not short-term gains, is EKHolding’s hallmark of success. From insurance toEnergy, Petrochemicals and manufacturing,each addition to its diversified investmentportfolio of fast-growing sectors insuresongoing enhancement of value.
INVESTMENTPORTFOLIO
EK Holding is monetizing Egypt’s natural gas resources andadding value to the economy by expanding exports and creatingjobs in the nitrogenous fertilizers sector.
Bawabet Al Kuwait (BKH)
BKH is a Kuwaiti joint stock company established in May
2004 with a paid-in capital of KD 50 million. EKH is the
single largest shareholder with a stake of 41.67%. Other
shareholders are leading Kuwaiti companies and promi-
nent individuals. Capitalizing on the abundant natural gas
reserves, skilled labor force and strategic location, BKH is
poised to become a major investor in the booming fertil-
izer and petrochemicals industries in Egypt under EKH’s
management. BKH currently has interests in Alexandria
Fertilizers Company.
Alexandria Fertilizers Company(AlexFert)AlexFert, of which Bawabet El Kuwait owns a 51% stake,
is a free zone company established in July 2003 in
Alexandria, with an authorized capital of USD 500 million
and paid-in capital of USD 165 million, AlexFert is a green
field project established in partnership with Egypt's leading
nitrogenous fertilizers producer, Abu Qir Fertilizers, with a
production capacity of 635,000 tons of granular urea per
annum exclusively designated for export with easy access
to the ports of Abu Qir, Dekheila and Damietta. The plant
is expected to become fully operational by mid 2006.
BAWABET AL KUWAIT (BKH)ALEXANDRIA FERTILIZERS COMPANY (ALEXFERT)
Fertilizers
NATIONAL GAS COMPANY (NATGAS)
Holding a stake of 51.95%, Shell Gas B.V. joined
EK Holding in NATGAS, a privately owned joint stock
company that was awarded 20-year concession rights to
design, finance, construct, operate and maintain a gas
transmission and distribution network in Egypt’s major
cities. During 2004, GAIL (India) Limited acquired 15% of
NATGAS, thereby enhancing the value added partner-
ships of the company and forming a stronger base.
FGC has 20-year concession rights to design, finance, con-
struct, operate and maintain a gas transmission and dis-
tribution network in the governorate of Fayoum, Egypt.
In May 2003, EK Holding joined Shell Gas B.V. by acquir-
ing 27% of the share capital of FGC. The company’s
vision is to become a preferred employer and partner in
the gas distribution industry and to participate in the sus-
tainable development of the Fayoum governorate.
FAYOUM GAS COMPANY (FGC) SHELL COMPRESSED NATURALGAS EGYPT (SCNGE)
SCNGE was established in 2002 to compete in the fast
growing Egyptian market of 2.5 million vehicles, with
taxis as the primary target for natural gas.
In August 2003, EK Holding joined Shell Gas B.V. by
acquiring 27% of SCNGE’s share capital. An Egyptian
joint stock company majority owned by Shell Gas B.V.,
SCNGE continues its plan to build a retail network of nat-
ural gas fueling stations.
NATIONAL GAS COMPANY (NATGAS)FAYOUM GAS COMPANY (FGC)SHELL COMPRESSED NATURAL GAS EGYPT (SCNGE)
Energy
Our partnership with Shell and GAIL (India) – world’s leading oiland gas companies – has provided us with world-classtechnology and raised quality, health, safety and environmentalstandards to international levels. Such a partnership hasstrengthened EK Holding’s stand to adhere to governmentpolicies, increase natural gas usage and provide affordable clean fuel.
EGYPTIAN GLASS COMPANY (EGC)
INTERNATIONAL PIPE INDUSTRYCOMPANY (IPIC)
ManufacturingEGYPTIAN GLASS COMPANY (EGC)INTERNATIONAL PIPE INDUSTRY COMPANY (IPIC)Capitalizing on the promising market of glass manufacturing, EK Holding is driving change in EGC to enable it to emerge as a regional leader in glass manufacturing, raising quality and efficiency to international levels.
IPIC, of which EK Holding owns a 25 % stake, began
wide-scale production of seamless steel pipes for use in
ground and offshore oil and gas pipeline projects.
Manufacturing commenced in state-of-the-art facilities in
Port Said’s free zone. IPIC has paid-in capital of USD 40
million with a total investment of USD 85 million.
Owning a 35 % stake in IPIC, Kuwait Pipe Industries and
Oil Services Company (KPIOSC), a recognized regional
producer of oil pipes, affords indispensable industry
know-how and experience. The other shareholders, each
with a 10 % stake are Enppi, Petrojet, Gasco and the
National Organization for Military Production.
Holding a majority stake of 61%, EK Holding partners
with Guardian Industries Corp. in the largest glass-making
factory in North Africa. With raw materials that are cost-
effective, abundant and locally sourced, the venture
promises healthy returns with future growth potential. EK
Holding seeks to optimize performance, increase output,
and develop product lines benchmarked to international
specifications. EK Holding seeks and assesses opportuni-
ties with Guardian to expand within this growing sector
and introduce new products that will set new standards
for the Egyptian glass industry.
DELTA INSURANCE COMPANY (DIC)The liberalization of the insurance sector in Egypt has opened up
potential revenue sources in the areas of life insurance and pri-
vate pensions. DIC is a medium-sized private sector insurer, of
which EK Holding is the largest shareholder with a 23% stake,
operating in both general and life insurance policies.
DELTA INSURANCE COMPANY (DIC)InsuranceDIC works tirelessly to take advantage of Egypt's emerginginsurance sector, with vast potential for future growth.
A fully owned subsidiary of EK Holding, Globe Telecom Company(GT) is set to lead the Egyptian information technology andtelecommunications market, which holds enormous potential.Through a carefully-planned series of steps, GT signedrepresentation agreements with Intergraph Corporation, NortelNetworks and Psion/Teklogix.
InformationTechnology
GT’s agreement with Intergraph has enhanced its posi-
tion in the information technology and software devel-
opment sectors.Developing Intergraph’s various solutions
(GIS, mapping and PDS) GT reached a higher level of
accuracy in maps and data, applications, and turnkey
solutions that include satellite image acquisitions and pro-
cessing. Utilizing these highly accurate maps and data,
GT created automated vehicle tracking, fleet manage-
ment, and fleet navigation solutions.
Using Nortel Networks’ superior products, GT contributed
to the enhancement of telephone penetration in Egypt by
supplying switch capacities in several areas.
Using Psion/Teklogix’s latest technology in bar code and
warehouse management systems, GT played a major role
in the automation of both Port Sokhna and Port Said by
supplying, implementing and integrating the ports’ wire-
less networks. GT also implemented multiple systems in
various sector warehouses, including those of the
military.
GLOBE TELECOM COMPANY (GT)
AADC seizes growth prospects arising from Egypt’s significantagricultural capacity and from the growing demand for Egyptianproduce in the international marketplace.
AgricultureAMERICANA FOR AGRICULTURALDEVELOPMENT COMPANY (AADC)
AMERICANA FOR AGRICULTURALDEVELOPMENT COMPANY (AADC)
Egypt’s agricultural sector is another promising area for
investment, especially in the export arena. EK Holding, in
partnership with Americana, has invested in Americana
for Agricultural Development Company (AADC). AADC is
engaged in land reclamation and development, exporting
its products to international retailers.
The limitationsare gone. The
boundaries havedisappeared.
Our success continues to meet future challenges. We areconstantly seeking opportunities and aggressively
pursuing growth.
EGYPT KUWAIT HOLDING COMPANY (SAE)CONSOLIDATED BALANCE SHEET For the financial year ended December 31, 2005
Chairman
Nasser Mohamed Al-Kharafi
Chief Financial Officer
Sahar Hassan Farahat
Executive Director
Ayman Ibrahim Laz
Managing Director
Moataz Adel Al-Alfi
Auditor's Report
To the Shareholders of
Egypt Kuwait Holding Company (SAE)
We have audited the consolidated financial statements of
"Egypt Kuwait Holding Company"
(An Egyptian Joint Stock Company subject to the provi-
sions of Investment Incentives & Guarantees Law) represent-
ed in the consolidated balance sheet as at December 31,
2005 and the related consolidated statements of Income,
Changes in Equity and Cash Flows for the year then ended.
These consolidated financial statements are the responsibili-
ty of the company’s management. Our responsibility is to
issue a report on these consolidated financial statements
based on our audit.
We conducted our audit in accordance with Egyptian
Standards on Auditing and applicable Egyptian laws. Those
standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence support-
ing the amounts and disclosures in financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall consolidated financial statements pres-
entation. We have obtained the information and explana-
tions, which we deemed necessary for our audit. We believe
that our audit provides a reasonable basis for our opinion.
The balance of provisions includes an amount of USD 20.4
million approximately and the nature of these provisions have
not been determined, a matter which led to overstatement of
current liabilities and decrease of shareholders’ equity by the
same amount. We have previously issued a qualified opinion
on auditing the consolidated financial statements for the year
ended December 31, 2004 for the same reason.
In our opinion, except for the effect of the preceding para-
graph on the consolidated financial statements, the consoli-
dated financial statements referred to above together with
the notes attached thereto present fairly in all material
respects, consolidated balance sheet of the company as of
December 31, 2005 and the results of its operations and its
cash flow for the financial year then ended in accordance
with Egyptian Standards and in compliance with relevant
Egyptian laws and regulations.
Translated and Originally
Issued in Arabic
KPMG Hazem Hassan
Public Accountants & Consultants
Cairo, March 1st , 2006
CURRENT ASSETSCash at banks & on handInvestments in treasury bills Investments in marketable securitiesTrade & notes receivableEgyptian General Petroleum CorporationDebtors & other debit balancesInventoriesWork in progressTotal current assetsCURRENT LIABILITIESProvisionsBanks - OverdraftShort term loan installments, liabilities & bank facilitiesSuppliers & subcontractorsEgyptian General Petroleum CorporationDividends payableDue to affiliated companies & unconsolidated subsidiariesCreditors & other credit balancesTotal Current LiabilitiesWorking capitalLONG - TERM ASSETSInvestments in unconsolidated subsidiariesInvestments in affiliated companiesOther long term investments Investments in under establishment subsidiariesEgyptian General Petroleum CorporationLoans due from affiliatesFixed assets (net)Projects in progressGoodwillOther long - term assets (net)Deferred tax assetsTotal long - term assetsTotal InvestmentFINANCED AS FOLLOWS:MINORITY INTERESTSHAREHOLDERS' EQUITYIssued & paid up capitalLegal reserveGeneral reserveRetained earningsNet profit for the yearCumulative translation adjustments Total shareholders' equityLONG-TERM LIABILITIESLong - term loans & bank facilitiesDeferred sales tax installmentsDeferred tax liabilitiesTotal long-term liabilitiesTotal financing of working capital & long - term assets
31/12/2005USD
22 232 401 -
104 201 159 38 362 441 27 963 645
6 479 881 10 011 578
1 611 581 210 862 686
28 160 987 19 609 552 54 402 127 1 263 379
33 400 685 491 039 28 685
37 215 352 174 571 806 36 290 880
2 169 705 114 327 710 40 690 724
99 800 44 887 137
1 411 149 64 462 118
524 378 29 044 990
9 397 665 5 746
307 021 122 343 312 002
36 155 800
132 300 000 5 866 274 8 380 462
14 451 574 55 262 821
3 112 269 219 373 400
86 348 614 85 525
1 348 663 87 782 802
343 312 002
31/12/2004USD
9 151 917 5 540 465
107 407 469 9 967 780
27 084 094 48 001 386 9 805 264 5 459 739
222 418 114
41 026 631 54 779
29 622 709 9 298 564 4 820 389
386 612 73 415
26 971 455 112 254 554 110 163 560
161 787 91 822 776 3 008 806
-42 083 419 1 330 049
65 940 464 229 815
9 371 280 1 219 004
-215 167 400 325 330 960
45 767 545
126 000 000 4 456 249 8 380 462 5 900 921
28 939 190 1 157 182
174 834 004
104 067 321 662 090
104 729 411 325 330 960
EGYPT KUWAIT HOLDING COMPANY (SAE)CONSOLIDATED INCOME STATEMENT
OPERATING REVENUESGain (loss) on sale of other companies Net gain on sale of investments in marketable securitiesDividends income from securities Gain on sale of investments in affiliates & subsidiaries Gain on sale of available for sale investments Company' share in affiliated companies' profitsInterest Income Unrealized gain on investment in marketable securities Unrealized loss on available for sale securitiesDividends income from available for sale securitiesReversal of impairment value on other long term investmentsGas supplies activity revenuesCommunication & Geographic maps activity revenuesAgencies activity revenuesGlass activity revenuesReturn on investments in treasury bills Total Operating RevenuesLESS:Gas supplies activity costsGlass activity costs Communication & Geographic maps activity costsFeasibility study expensesAgencies activity costs Glass activity's selling & distribution expensesFinance chargesGeneral & administrative expensesFree Zone feesRemunerations and transportation allowances of subsidiaries Board of directorsProvisions other than depreciationWrite down of debtors &other debit balancesReversal of write down of debtors & other debit balancesReversal of impairment of inventory slow moving itemsImpairment loss of investments in unconsolidated subsidiariesFixed assets depreciation & other long - term assets amortization Operating ProfitOTHER INCOME (EXPENSES):-Foreign exchange differencesProvisions no longer required Capital gainsloss in excess of subsidiaries issued capitalOther incomeNet profit before minority share in profitsLESS: Minority share in profits / losses of subsidiaries Net profit for the year after minority share in profits & before income taxCurrent Income taxDeferred income tax expenseNet Profit for the yearEarning Per Share (USD cent / Share)
EGYPT KUWAIT HOLDING COMPANY (SAE)CONSOLIDATED CASH FLOWS STATEMENT
2005USD
58 475 637
(1 471 128)1 852
8 067 312 (2 181 221)( 129 767)
-12 118 889
(22 421 292)(4 590 138)
-8 527 393
182 062 ( 185 362)
( 61 089)40 770
(16 787 604)3 472 813 ( 42 032)
( 135 498)42 881 597
(27 886 821)(27 729 457)
36 852 187 ( 2 254)
( 200 022)(7 053 260)(8 682 368)
4 548 91632 748 247
( 78 950)(8 617 495)36 780 320
(1 492 645)156 909
( 488 947)(4 638 622)10 741 876
986 875 62 973
13 632 374 13 214 104
( 99 800)-
(51 119 691)(19 044 594)
CASH FLOWS FROM OPERATING ACTIVITIESNet profit for the year before income taxAdjustments to Reconcile Net Profit to Net Cash Flows from Group Operating Activities Reversal of impairment in other long term investmentsImpairment loss of investments in unconsolidated subsidiaries Fixed assets depreciation & other long - term assets amortization Gain on sale of other investments Gain on sale of investments in affiliates & subsidiariesGain on sale of available for sale investmentsMinority share in subsidiaries profits\ lossesCompany share in affiliates profitsUnrealized gain on investment in marketable securities Unrealized gain on available for sale securitiesAccrued finance expensesWrite down of debtor & other debit balanceReturn on investments in treasury bills Capital gainsForeign exchange differencesProvisions no longer requiredProvisions other than depreciationReversal of write down debtors & other debit balancesLosses in excess of subsidiaries issued capitalOperating Profit Before Changes in Assets & Liabilitiesused in Operating ActivitiesInvestments in trading securitiesTrade & notes receivableDebtors & other debit balancesUnconsolidated subsidiaries, affiliates and related companies -current accountInventoriesWork in progressSuppliers & subcontractorsCreditors & credit balancesEgyptian General Petroleum Corporation Provisions usedFinance expenses - paidNet Cash Available from Operating ActivitiesCASH FLOWS FROM INVESTING ACTIVITIESPayments for purchase of fixed assetsWork in progressPayments for projects in progressPayments for acquisition of investment in treasury billsReceipts from refunding of investments in treasury billsDividends received from affiliatesReceipts from sale of fixed assetsExcess of investment expenditure on behalf of EGPCReceipts from sale of investments in affiliates & othersPayments for investments under establishment subsidiaries Goodwill (purchased) soldPayments for long term investments Net Cash Used in Investing Activates
2004USD
( 62 144)42 831
4 268 333 12 725 144 19 197 289 1 421 566
586 535 1 635 199
(3 027 537)-137 783
42 893 923 586 767
1 042 161 46 935 934
46 204 128 429 988
27 678 123 19 234 107
407 161 370 618 873 306 955 675
13 535 468 7 015 117
165 550
103 249 15 017 084 1 494 872 ( 148 253)
--328 766
41 399 145
526 351 1 391 180
3 801 24 987
107 123 43 452 587 14 513 397 28 939 190
--
28 939 190 5
2005USD
2 181 221 1 357 741
243 706 129 767 -
22 421 292 983 617
4 590 138 -
3 336 207 1 471 128
33 538 788 228 926 849 143
45 599 723 185 362
117 116 759
17 718 066 22 507 565
170 774 155 286 701 191
1 126 868 11 846 016 5 239 724
8 759
129 485 3 472 813
182 062 ( 42 032)( 35 162)
1 852 365 064
53 568 428
( 257 007)16 787 604
61 089 135 498 298 914
70 594 526 12 118 889 58 475 637(1 879 186)(1 333 630)55 262 821
10
2004USD
28 939 190
( 137 783)-
7 218 752 62 144
(12 725 144)(19 197 289)
14 513 397 (1 421 566)(1 635 199)
3 027 537 6 151 602 1 494 872 ( 46 204)( 3 801)
( 12 976)(1 391 180)15 017 084 ( 148 253)
24 987 39 730 170
(13 407 679)(3 179 178)
6 241 696 -
(3 175 894)(4 867 062)
4 695 191 15 186 999 (3 238 304)
( 210 932)(6 535 229)31 239 778
(1 220 096)-
( 223 084)(5 493 871)
-682 876
5 643(8 035 204)20 787 326
-1 002 785
(38 354 414)(30 848 039)
For the financial year ended December 31, 2005 For the financial year ended December 31, 2005
CASH FLOWS FROM FINANCING ACTIVITIESLong - term loans & bank facilitiesBanks - OverdraftShort - term loans & bank facilitiesMinority interestPayments for long term liabilities (sales tax)Dividends paidNet Cash Provided from Financing Activities
Cumulative translation adjustments Net cash movement during the yearCash & cash equivalents as at January 1, 2005Cash & cash equivalents as at December 31, 2005
(21 528 049)19 554 773 21 999 900
(10 480 678)( 621 511)
(12 574 307)(3 649 872)
(1 005 370)13 080 484
9 151 917 22 232 401
(20 604 140)-
14 500 000 (4 938 031)( 582 002)
(12 171 452)(23 795 625)
66 280 (23 337 606)
32 489 523 9 151 917
I) COMMON STOCK INFORMATION
Stock Trading Symbol
EKHO.CA
EKHK.KW
Stock Exchange Listings
The Cairo and Alexandria Stock
Exchange is the principle market for EK
Holding common stock, which is also
listed on the Kuwait Stock Exchange.
Shareholders
On December 31st, 2005, there were
approximately 7,500 shareholders on
record.
Dividends Policy
Dividends are usually declared before
the end of March of each year and
paid within 30 days of the date of dec-
laration.
Cash Dividends Declared
Stock Performance
The closing price, adjusted for share
splits and stock dividends, for a com-
mon share of EK Holding on the Cairo
and Alexandria Stock Exchange as re-
ported by Reuters.
March-end Market Price
Return on Investment
EK Holding was formed in June 1997
as an Egyptian Joint Stock Company.
Assuming reinvestment of dividends,
an investment in our shares of USD
1,000 made in 1997 was worth ap-
proximately USD 24,070 in March
2006, this performance represents
42.4% compounded rate of return
per annum. Past performance is not
necessarily indicative of future return
on investment in EK Holding com-
mon shares.
II) SHAREHOLDERS INFORMATION
Annual Meeting
The shareholders’ meeting is conducted
before the end of March of each year as
announced in two major newspapers in
Egypt and Kuwait.
Stock Administration
Registered shareholders with inquiries
regarding share holdings should address
communications concerning statements,
dividend payments, address changes
and other administrative matters to:
Misr Clearing Settlement and
Depository Company
Headquarters
4, Talaat Harb Street, Cairo, Egypt.
Tel: +202 578-8109 / 578-8048
Fax: +202 578-8117
Cairo Branch
70 El Gomhouria Street, Cairo, Egypt.
Tel: +202 597-1581
Fax: +202 597-1523
Alexandria Branch
4 Ibn El Sayegh Street from El Horreya
Street, Alexandria, Egypt.
Tel: +203 484-9902 / 484-0355
Fax: +203 487-5838
or Kuwait Clearing Company S.A.K.
Tel: +965 248-5896
Fax: +965 246-9457
P.O. Box 22077 Safaat 13081, Kuwait
or Shareholders Relations Department
EK Holding Company
Tel: +202 336-3300
Fax: +202 335-8989
14 Hassan Mohamed El Razzaz Street,
Agouza, Giza, Egypt.
e-mail: [email protected]
Financial and Other Information
Financial results, corporate news and
other Company information are avail-
able at Kuwait, Cairo & Alexandria
stock exchanges, and on EK Holding's
website: www.ekholding.com
Independent AuditorsKPMG Hazem HassanPublic Accountants and ConsultantsKPMG Building, Pyramids HeightsOffice Park, KM 22 Cairo/Alex RoadPostal Code: 12111 PyramidsGiza, Cairo, EgyptTel: +202 539-2233 / 539-2277Fax: +202 539-2303
00 01 02 03 04
Percentage of capital
9%
10% 10%
15% 15%*
05
15%**
Share Price In USD
4.0 —
3.5 —
3.0 —
2.5 —
2.0 —
1.5 —
10 —
0.5 —
0.0 —
Mar
ch ‘9
9 —
Mar
ch ‘0
0 —
Mar
ch ‘0
1 —
Mar
ch ‘0
2 —
Mar
ch ‘0
3 —
Mar
ch ‘0
4 —
Mar
ch ‘0
5 —
Mar
ch ‘0
6 —
* 10% cash & 5% Stocks** 5% cash & 10% Stocks
