Management Report on Activities 2016
Al-Madina for Finance & Investment Company
The following is an analysis of the financial position as of 31st December 2016 based on the Company’s performance during year 2016 compared to year 2015. The analysis is based on the audited financial statements for the fiscal years 2016 and 2015.
In the past years, the Group has managed to settle most of its debts and still maintains to keep a range of good and diversified assets pool. The Company's investments are distributed among shares of companies operating in the local and foreign markets, also its owns real estate assets in both Kuwait and the United Arab Emirates, and a significant amount of liquidity which helps in seizing new investment opportunities and face any contingencies.
The Company’s total assets value decreased by 4% to reach KD 38,368,147 from KD 39,934,292 due to the decrease in investments in associates by 10% compared to the previous year, which amounted to KD 21,946,282 in 2016 from KD 24,508,338 in 2015, which was mainly due to the decrease in our ownership percentage in HITS Telecom Holding Company to 17.66% with its substantial balance of KD 6,263,283 in 2016 from being 29.26% with the value of KD 8,079,612 in 2015.
The real estate investments fell down to reach KD 1,231,000 in 2016 from KD 5,451,000 in 2015. This coincided with the increase in the cash and cash equivalents balances which increased by KD 3,258,190 and amounted to KD 4,190,646 in 2016 after it was only KD 932,456 in 2015.
The Company’s assets are expected to increase by approximately AED 99 million, as a result of the issuance of the Court of Cassation in Abu Dhabi in one of the cases against external parties for the benefit of the group. The department of execution within Abu Dhabi confirmed that the total amount owed to the Company is equal to AED 99 million. Which will positively affect the increase in cash flow for the coming years.
The following chart shows the distribution of the Company's assets for 2016:
With regard to liabilities, a decrease by 31% was recorded, as it equaled KD 6,707,622 in 2016 from KD 9,721,150 in 2015, due to a the decrease in the Creditors and Other Credit Balances by 43% compared to previous year, as it reached KD 4,019,183 in 2016 from KD 7,034,559 in 2015.
The following chart shows the decline in the liabilities balances in 2016 compared to 2015:
Total Equity for the shareholders of the parent company witnessed an increase by 10% that equals KD 2,019,674 in 2016, because of the profit generated by the group that reached KD 782,645. The Company made profits attributable to shareholders of the parent company equals to KD 1,401,790 which overcomes the repercussions of the global financial crisis and its impact in the GCC countries.
The following chart shows the Company’s financing structure in 2016 compared to 2015:
The Company’s revenue rose by a huge margin to reach KD 2,972,787 in 2016 after it was recording losses of KD 2,104,995 in 2015. That’s because of the reversal of provisions and impairments by KD 1,151,126 and the decrease in losses from investments in associate companies which equaled to KD 531,559 in 2016 after it was KD 3,627,837 in 2015.
The chart below illustrates the revenues components for year 2016:
We note that the expenditure and other charges items decreased to reach KD 2,156,143 in 2016 from KD 2,774,761 in 2015 as a result of the decrease in other expenses by KD302,579 compared to previous year, and the decrease in net real estate losses by KD316,039 from previous year.
The following table shows the net profit recorded during 2016 as compared to 2015: