cairo poultry company annual report...

Cairo Poultry Company

Annual Report 2011

CPC ANNUAL REPORT 2011 1

Table of ContentsChairman’s Letter 03

2011 At a Glance 04Key Facts 06

Who We Are 07Our Strategy 10

Koki 12Starch and Glucose 14The Year in Review 16

CPC Poultry Operations 17Corporate Governance 18

Corporate Social Responsibility 19Board of Directors 20

Executive Management 22Operations Management 24

Financial Review 26

2 CPC ANNUAL REPORT 20112 CPC ANNUAL REPORT 2011

The minimal impact that the crisis had on our financial performance is proof of the resilience of our business model. Recovery is already un-derway, and our strong fundamentals promise a bright future as Egypt regains stability.


Dear Shareholders,

In 2011, CPC’s position of leadership in Egypt’s poultry sector and the integrity of our business model were put to the test as the company overcame significant chal-lenges to end the year with strong fundamentals and an optimistic outlook for recovery and sustained growth.

2011 has been a turbulent year for various indus-tries, with economic fluctuations and rapidly changing policy creating an uncertain business environment. The tenuous security situation that has persisted throughout 2011 created constraints for our operations, as logistics were disrupted, branch security was threatened and plunging levels of tourism led to a slowdown in demand from our clients in the hotel and restaurant business.

While these obstacles inevitably impacted our balance sheet, CPC managed to contain the situation with only a slight drop in bottom line. The minimal impact that the crisis had on our financial performance is proof of the resilience of our business model. Recovery is already underway, and our strong fundamentals promise a bright future as Egypt regains stability.

CPC’s profits remained robust in the face of chal-lenges throughout the year, balancing an unavoidable slowdown in demand and disruptions to operations with a clear-sighted vision for recovery and future growth based on our market-leading position and Egypt’s strong potential as an increasingly attractive market.

CPC’s steadfastness in 2011 is the direct result of the company’s strong foundations. Since our inception, CPC has led the local poultry sector first as a pioneer, and later as a market leader with a strong first-mover advantage.

This history of innovation has seen CPC lead the Egyptian market in breeding technology and health security systems. Our commitment to local content and our highly skilled staff are the other cornerstones of CPC’ continued excellence, and the key to our success year after year.

Our unique vertically integrated structure in Egypt has seen CPC through challenging and prosperous economic times alike. We believe that our ability to capture profits across the poultry industry value chain will continue to bolster CPC’s capacity and infrastructure expansion into 2012.

As always, the support of our partners and share-holders remains an invaluable asset to CPC’s ongoing growth and development, and we are proud to have

been able to reward their faith in the company with ever-increasing value and a prominent position in the market.

Our role in helping support disadvantaged communi-ties in Egypt remains a primary concern. Our commit-ment to helping forge the country’s path to a better future has seen CPC continue its support for organiza-tions that are important to us, and add new initiatives to our CSR portfolio during 2012.

We maintained our market leadership throughout 2011, engineering creative solutions to an evolving eco-nomic landscape and adapting our plans accordingly. We look forward to continuing our efforts to promote development in Egypt’s poultry industry in 2012 and beyond.

We hope that 2012 will bring great things for Egypt as the country builds on its historic accomplishments in 2011 and moves towards a future full of opportunities. At CPC we plan to play a central role in Egypt’s recov-ery, as we leverage our strong fundamentals and robust business model towards recovery and record growth during the coming years.

Professor Mamdouh SharafeldinChairman

Chairman’s Letter

4 CPC ANNUAL REPORT 2011

2011 At a Glance: Overcoming ChallengesCairo Poultry Company (CPC) is the region’s leading vertically integrated poultry producer with operations that span the entire poultry cycle from importation to feeding, hatcheries, and the processing of a wide variety of consumer products. Since its inception in 1977, CPC has witnessed steady growth and achieved robust profits, creating value for its share-holders and outperforming its competitors.

2011 was a challenging year for all businesses in Egypt, as economic instability and security con-cerns posed obstacles to operations and growth across the market. While CPC’s operations and

balance sheet were impacted, the company proved its resilience in the face of difficult market conditions by sustaining only a slight fluctuation in year-end financial results. In 2011 we focused on incorporat-ing the latest technology in our industry to maintain and upgrade our existing facilities in line with inter-national health and safety standards. The strength of our fundamentals, our experience as an innovative market leader and the integrity of our vertically inte-grated business model have seen CPC through the challenges of 2011, and will support a drive towards recovery and growth in 2012.


EBITDA (in EGP million)

20072008200920102011

Net Profit (in EGP million)

20072008200920102011

Return on Equity 20072008200920102011

Net Worth (in EGP million)

20072008200920102011

Operating Profit (in EGP million)

20072008200920102011

With over 30 years of experience in the poultry industry, CPC has managed to overcome both eco-nomic downturns and industry challenges to emerge as a true market leader with a consistently strong financial position. In 2011, despite many challenges, CPC managed to post an increase in PP&E, which rose from EGP 919 million in 2010, to EGP 934 mil-lion at the close of the year.

PP&E (in EGP million)

20072008200920102011 934 253

972 191

18% 335

257

1,023 210

22% 331

299

1,104 232

22% 379

234

895 168

19% 294

138

894 145

17% 226

811

919

710

428

EGP 934 mnPP&E in 2011


35years as

market leaderWith over three decades of experience, CPC has a strong first-mover advantage in the Egyptian poultry

industry.

3 complementarylines of business

In addition to its core poultry business, CPC is also involved in olive cultivation, starch and glucose

production, and security services.

7 farms, hatcheries and

production facilitiesCPC’s operations are spread throughout Egypt in

Nubaria, Regwa, Sadat City, 10th of Ramadan City, El Saff, Anshas, Salehia, and Wadi el Natroon.

1 new facility

CPC has established one new further processing facility for meat and poultry in 2011.

3 main feed production

facilitiesfollowing the completion of a new feed mill in

Nubaria, which will be operational during the second quarter of 2012.

12 retail outlets

for the direct sale of feed and one-day-old chicks throughout Egypt’s governorates.

2 large slaughtering

facilitiesCPC’s processing operation began in 1992 with its Koki factory located in the 10th of Ramadan City.

A second production facility was opened in 2008 in Nubaria.

19 Koki retail outlets

In 2010, Koki’s retail outlets witnessed marked expansion with 15 outlets in Greater Cairo, two on

the North Coast, and two within its production facili-ties in 10th of Ramadan City and Nubaria.

Key Facts


Who We AreCairo Poultry Company (CPC), the region’s leading vertically integrated poultry producer with invest-ments that span the food and agriculture sectors, was founded in 1977 as a subsidiary of Americana Group. Backed by a strong first-mover advantage, a world-class management team and the vision to grow incrementally, CPC has developed into a dynamic operation that has experienced tremendous success, posting record growth rates year after year. CPC is listed on the Egyptian Exchange (EGX).

With 14 subsidiaries including successful brands Koki and Americana, and operations covering all stages of the poultry production cycle from hatcher-ies, broilers, parent and grandparent chicks, feed, frozen and chilled meats and value-added food prod-ucts, as well as related industries including starch and glucose, olive cultivation and security services, CPC benefits from a strong and diversified base covering all areas of the poultry industry.

A market leader from its earliest days in Egypt and the Middle East, CPC has grown to become a top brand locally as well as a successful exporter to GCC markets and African markets, with an eye towards in-ternational expansion. The company distributes under

both the Koki and Americana brand names in each location, with in-house operations for the distribution and marketing of all products. Americana is the public face of CPC, particularly in the GCC where the brand enjoys strong market recognition and has driven the development of a wide distribution network.

CPC is a key supplier for global fast food chains, hotels and restaurants including McDonald’s, KFC, Pizza Hut, Domino’s Pizza, Burger King, and the Marriott, Sheraton and Hyatt Regency Hotels. CPC is also the official supplier of poultry for the Egyptian Army, Multinational Forces, and the US Department of Defense in the Middle East.

As a fully vertically integrated poultry company in Egypt, CPC leads the market in technology in-novation, product range and use of local content. The company has pioneered the implementation of world-class breeding and health & safety technology in Egypt.

Together with an expert team and a strong network of partners and investors, CPC continues to grow and thrive across its spectrum of activities, improving product offerings in the Egyptian and regional markets and enriching the community around it in the process.

CPC continues to grow and thrive across its spectrum of activities.


Consistency

20052001300

900

600

1200

1500

1800

2100

2002 20042003

739778

853

938948

CPC has posted steady growth since its founding. Between 2001 and 2012, our total assets have increased by over EGP 1.18 billion, overcoming tremendous odds to sustain growth of EGP 116 million in 2011.


20102009200820072006 2011

1,294

1,569

1,681

1,768 1,8031,919


CPC’s unique vertically integrated business model lies at the core of our strategy. Our vertical integra-tion of grandparents, parents, hatcheries, broilers, processing, feed, distribution and marketing has radically transformed the Egyptian poultry industry. With improved productivity and reduced processing and distribution costs, CPC is stimulating greater market competition and driving Egypt towards poul-try self-sufficiency.

With operations covering all stages of the poultry production cycle from hatcheries, broilers, parent and grandparent chicks and feed, to value-added products, as well as related industries including starch and glucose, agriculture and security services, CPC is able to ensure the quality, safety and avail-ability of everything needed to bring our products to market. Vertical integration ensures that CPC gains steady profits and guards against cyclical downturns in the various sub-sectors. If one area of business declines, another area will compensate to capture lost opportunities, providing stability to the compa-ny’s balance sheet as witnessed in 2011.

Strong market potential both in Egypt and interna-tionally drives CPC’s continued growth and expan-sion. In Egypt, chicken meat production exceeds that of all other meat categories combined despite a local per capita consumption rate that falls well below the international average. Approximately 70% of all poultry sold in Egypt continues to be sold in live form, which means there is still an immense amount of untapped potential in packaged and frozen poultry sales that CPC is well positioned to capture. Egypt’s comparatively low per capita consumption, the local supply shortage, and consumer conversion to chilled and frozen poultry, will be positive growth drivers go-ing forward. The company is also poised to explore different opportunities as we diversify further into complimentary businesses.

CPC’s intensive marketing strategy for flagship

brands KOKI and Americana is based upon the use of exclusive retail outlets and aggressive marketing to build strong brand identity. Clever and widespread advertising campaigns that seek to increase local brand recognition, deepen market penetration and expand market share have been carried out consis-tently over the past 35 years, resulting in a strong brand identity and widespread market recognition reflecting CPC’s equity and real value in the con-sumer market.

CPC is the sole agent for one-day-old grandparent chicks from Hubbard and Arbor Acers, the world’s leading grandparent breeders. Grandparent opera-tions are a sophisticated science requiring strict quality control standards and special technical skills. CPC was the first company in Egypt to introduce the concept of grandparents. All government and specialist inspections have certified that CPC meets all the highest international standards for the poultry industry.

We also take pride in the sophisticated technology systems that form the foundation of our organiza-tional success at CPC. Our financial modeling and reporting is carried out via world-class software pro-grams Oracle and MTECH, allowing us to generate sophisticated financial reports and models to support our operations and business decisions. MTECH is also used throughout our operations, coordinating activity at every level of the supply chain to maximize efficiency and integration.

CPC leads the industry in planning, technology and hygiene and this, together with our world class staff, ensures that CPC remains Egypt’s premier poultry company. Our leadership position is underscored by CPC’s commitment to the overall growth of Egypt’s poultry industry. Our efforts to promote international best practices across the industry have resulted in improvements in yields, quality of mash and pellet feed, and equipment and facilities at our operations.

Our Strategy



Clever and widespread advertising campaigns that seek to increase local brand recognition, deepen mar-ket penetration and expand market share have been carried out consistently over the past 35 years.


KokiKoki is CPC’s highly successful flagship brand. With strong and growing brand recognition, proven cus-tomer loyalty, and an ever-increasing market share, Koki is Egypt’s first choice for quality poultry products.

Backed by quality products, an aggressive mar-keting strategy and branded retail outlets, Koki has maintained its position of strength on the Egyptian market in the face of increasing competition from Brazilian imports. Koki’s ongoing development of new products, attractive retail outlets and clever branding initiatives have also resulted in the brand’s continued success in both the local and export markets.

Our extensive and constantly expanding menu of products is developed with the diverse needs and

tastes of our valued customers in mind. In addition to children’s favorites like chicken fingers and nug-gets, Koki’s product lines now include both bone-in and boneless options, from classic fried and grilled chicken breast and thigh meals, to pane and Middle Eastern specialties such as chicken shawerma, shish tawook and kofta.

The brand’s dedicated retail outlets have reached 19 locations in Greater Cairo and the North Coast. A total of 15 outlets now serve Cairo’s central and suburban districts, and shops in Marina and Sidi Abdel Rahman ensure that Koki products are avail-able to loyal customers during the summer vacation months. Additionally, two Koki shops are located

CPC is a leading sup-plier to major global fast food chains, restaurants and hotels includingMcDonald’s, KFC, Pizza Hut, Burger King, Domino’s Pizza, Sheraton, Marriott and Hyatt Regency.


within CPC’s processing plants in 10th of Ramadan City and Nubaria.

At Koki we value customer service above all else. Koki outlets provide our customers with an attractive and convenient way to shop for a complete range of high quality fresh and frozen chicken products with the knowledge that our state of the art retail facili-ties maintain the same stringent health and safety standards that we require of all CPC operations. A dedicated, consumer-friendly call center is available to facilitate home delivery for our loyal and ever-expanding customer base.

While competition from international exporters is fierce, our decision to create branded retail outlets

and build a strong Koki brand identity has allowed CPC to maintain a strong market presence at this level of operations.

We continue to provide poultry products to global fast food chains, hotels and restaurants including McDonald’s, KFC, Pizza Hut, Burger King, Domino’s Pizza, and the Sheraton, Marriott and Hyatt Regency Hotels. CPC is also the official supplier of poultry to the Egyptian Armed Forces, the US Department of Defense in the Middle East and the Middle Eastern Multinational Forces. These contracts underscore CPC’s commitment to excellence and validate its reputation as a world-class supplier of quality poultry products.


Starch and Glucose

Established in the 1940s, ESGC uses the most up to date technology and an in-depth knowledge of manufacturing based on years of experience in the industry to produce high quality starch, glucose, corn oil and animal feed. EGSC has a long-established relationship with Americana Group that dates back to early 2004.

With a a daily corn grinding capacity of 450 tons and an annual output of 145,000 tons, ESGC has emerged as a market leader in the Egyptian starch and glucose manufacturing sector. Since its earli-est days, ESGC has been committed to pioneering international best practices in the local market by integrating top of the line facilities and technology with world class safety standards. To this end, ES-GC’s starch and glucose factories have undergone

comprehensive renovations in collaboration with the World Bank.

Facilities have been fully upgraded to incorporate the latest environmentally friendly technology in a three phase plan that included successful im-provement of starch and glucose derivatives, and complete upgrades to both the starch and glucose operations, followed by a total facility renovation.

An aggressive growth strategy combined with strong brand identity and an extensive and expand-ing product line has enabled ESGC to capture strong market share in Egypt, a position the company looks forward to expanding upon in the future.

ESGC’s facilities, recently upgraded to incorporate the latest environme ntally-friendly technology, currently have a daily corn grinding capacity of 450 tons and an annual output of 145,000 tons.

Egyptian Starch and Glucose Manufacturing Co. (ESGC)

w w w . e s g c . c o m . e g


Our Products

Corn StarchThis fine powder is used in the production of a variety of products, including packaging board, carton board, textiles, adhesives and glues, processed meat and chicken, sweets, biscuits, custards and pudding, bakery products, crackers and chips.

Glucose SyrupGlucose syrup is one of several natural sweeteners derived from corn starch. It is used in a wide variety of food products, including confectionary, chewing gum, chocolate, cookies, crackers, catsups, cereals, fla-vored yogurts, ice cream, lollipops and hard candies.

Corn Oil This mild oil is rich in vitamins and perfect for use in a variety of dishes from salads to desserts and fried foods.

Gluten Feed and MealGluten feed is a processing product rich in protein and fiber. It is used as feed for dairy cows, camels, horses and sheep. Corn gluten meal is a processing product rich in protein. It provides feed for poultry, fish and shrimp, pigeons and rabbits.

ESGC provides a broad portfolio of products for customers in the confectionary, dairy and beverage industries, as well as non-food markets such as paper and board manufacturing.


The Year in ReviewOvercoming a myriad of challenges in 2011, CPC focused on developing our existing assets through investments in renovation and expansion into complementary business lines.

Nubaria Feed MillIn order to meet the expected increase in demand for pellet feed and address logistical issues such as transportation delays, CPC has established a new feed mill in Nubaria. Set to begin operations during the second half of 2012, this state of the art mill is fully equipped with the latest technology. The new feed mill will nearly double CPC’s overall feed capacity. BroilersCPC has become the largest player in the local broilers market following acquisitions of a number of smaller competitors since the end of 2007. In order to maintain this leadership position and produce the highest quality product possible, we have imple-mented international-standard measures for bio-safety, bio-security, and workforce training across our broilers facilities.

River TransportationIn line with our strategy of investing in related industries that streamline our supply chain, CPC has acquired a 5% stake in Middle East for River Transportation (MENA), a newly established com-pany operating in Egypt’s river transport sector. The company was created to address capacity and infrastructure constraints at Egypt’s river ports, and will focus on grain transport services.

Quantitative Highlights2011 was a turbulent year for the Egyptian economy. Despite the challenges, CPC managed to maintain its profit levels, sustaining only slight percentage change in net profits by year-end 2011. CPC’s total assets reached EGP 1,919 million in 2011, up from 1,803 mil-lion the year before. Meanwhile, net profit fell from EGP 232 million in 2010 to EGP 190.6 million in 2011.

TestingWe are committed to ensuring the safety and optimal nutritional value of all our products, and have imple-mented a continuous testing process to monitor the quality of all CPC product lines. These quality control measures have helped increase productivity: our yield percentages and feed conversion rates have improved consistently.

Cairo GreenCPC is committed to international best practices in bio-safety and security, and actively pursues investments in fields related to our primary focus on poultry produc-tion. The Group has established a new company called Cairo Green that will specialize in the bio-secure com-posting of treated chicken manure to produce high-value compost. Cairo Green’s operations will contribute to bio-safety across CPC’s operations and contribute positively to the environment by minimizing the risk of infection resulting from the transport of manure.


Feed OperationProduces poultry compounded feed (pellets and mash) and any other types of feed.

Grandparent OperationRaises one-day-old grandparent stock to pro-duce one-day-old parent chicks for sale in the market and to CPC’s parent division farms.

Parent OperationRaises one-day-old parent chicks to produce ready-for-hatch eggs for CPC’s hatcheries division.

Hatchery OperationHatches ready-for-hatch eggs to produce one-day-old broiler chicks for sale in the mar-ket and to CPC’s broiler division.

Broiler OperationRaises one-day-old broilers for sale in the market and to CPC’s slaughtering facilities.

Processing and Further Processing OperationsSlaughters broiler chickens to produce frozen and fresh whole chicken and chicken parts in addition to value-added products for sale in the market.

CPC Poultry Operations


Corporate GovernanceThe Board of Directors and management of CPC are firmly committed to upholding the principles of good governance. Designed to maximize accountability, fairness and transparency, our Corporate Governance policies enable the CPC General Assembly, the Board of Directors and the Audit Committee to function efficiently and independently.

CPC General AssemblyThe Assembly, whose membership includes all CPC shareholders, is the company’s ultimate governing body, responsible for electing the Board of Direc-tors, appointing the external auditors, and approving financial results and dividend distribution.

Board of DirectorsA clear majority of our board (six out of nine mem-bers) serve as non-executives to ensure the indepen-dence of decisions. CPC is in line with international best practices to reassure shareholders that their interests are being looked after in a manner that is both efficient and transparent. CPC’s board is re-sponsible for overseeing all aspects of the company and safeguarding its growth for our valued share-holders.

Audit CommitteeThe Audit Committee is charged with carrying out the procedures outlined in the CPC Audit Commit-tee Charter, which is reviewed and reassessed on an annual basis. The Audit Committee is responsible for making sure that CPC is in compliance with all financial and corporate laws and regulations as well

as additional reporting requirements in the markets in which the company operates. The Audit Com-mittee is also empowered to authorize and conduct investigations that fall within its scope of responsibili-ties, including reviews of significant accounting and reporting irregularities and their impact on financial statements, and overseeing the internal and external audit process.


Corporate SocialResponsibilityContributing positively to the communities in which we do business is an integral com-ponent of CPC’s value sys-tem. From making targeted donations to organizations in need, to providing world-class training and educational op-

portunities to our staff, assist-ing the Ministry of Agriculture and supporting orphanages, we never miss a chance to further the development of the Egyptian poultry sector and engage with the community to address crucial social issues.

Community SupportIn keeping with our long history of cooperation with Egyptian institutions working to promote agriculture, CPC participated in several initia-tives to upgrade the faculties of agriculture at Cairo, Alexandria and Ain Shams universities. The company also sponsored attendance at the American University in Cairo’s annual Poultry Pathology conference in 2011. In the aftermath of the Egyptian Revolution, CPC stepped up to give support to various organizations that are working to assist those injured in recent events. Funds were contributed to both the Kasr El Aini Hospital and the Kasr El Aini Friends Association.

Employee TrainingOur employees are at the heart and soul of CPC’s operations, and we strive to provide them with op-portunities to enhance their skills through educa-tion and training. CPC offers opportunities for em-ployees to pursue MA and PhD degrees, as well as in-house summer training courses and scholar-ships to train and study in Egypt and abroad.

Health and SafetyMaintaining the highest international standards in health and safety has always been a top prior-ity at CPC. We meticulously implement the most up to date bio-safety and bio-security measures available in order to provide our customers with the highest quality products possible, and ensure a safe environment for our employees.

The EnvironmentAt CPC it is crucial that our operations do not have a negative impact on the environment. We are committed to implementing and utilizing the latest technology in our facilities to comply with international standards for environmentally friendly production techniques.

Community Job CreationWe believe that, when given the chance, even the most underprivileged groups in society have the ability to succeed and thrive. For this reason, CPC works with local orphanages to produce uniforms worn by employees in our laboratories, factories and farms. By sourcing uniforms from orphanages, CPC has created an economically sustainable project that gives orphans the chance to earn money and de-velop important skills that will sustain them economically into the future.

Research and DevelopmentAs a pioneer in Egypt’s poultry industry, we feel that it is our responsibility to transfer our know-how to advancing the sector as a whole. To this end, the company works with Egypt’s Ministry of Agriculture on research and development projects and provides facilities and funding for the development of testing farms. CPC also do-nates one-day-old chicks and feed to research-ers carrying out groundbreaking research on poultry production and related areas.


Board of Directors


Mr. Sayed Nassef

Board Member

Mr. Ahmed Al Khayat

Vice Chairman & Managing Director

Mr. Ayman Laz

Board Member

Dr. Hans Nagel

Board Member

Mr. Adel Al-Alfi

Managing Director

ProfessorMamdouhSharafeldinChairman

Mr. Moataz Al-Alfi

Board Member

Mr. Mahmoud Al Afifi

Board Member

Eng. Tarek Tawfik

Managing Director


Executive Management


Mr. Ahmed Al Khayat

Vice Chairman & Managing Director

Eng. Tarek Tawfik

Managing Director

Mr. Mostafa Rashed

Chairman Processing

Division

Mr. Hazem Zayed

Assistant Managing Director, Corporate Finance

& Business Development

Mr. Adel Al-Alfi

Managing Director

Mr. Ayman Roushdy

HR Director

Mr. Mohamed Taha

Chief Financial Officer

Eng. Wissam Al Adany

Information Technology

Director

Dr. Mohamed Hamoud

Chief Technical Officer

Dr. Nabil Darwish

Chairman, Grandparent

Division

Mr. Bas Zuidberg

Supply Chain Officer

Eng. Basem Aboul Wafa

Projects Director


Operations Management


Dr. Khaled Moustafa

Grandparent Division Manager

Eng. Mohsen Abdel MegeedParent Division

Manager

Mr. Aysar Abu Elenen

Hatchery Division Manager

Mr. Ahmed RefaatProcessing

Division Manager

Dr. Eng. Khaled Badr

Starch & Glucose Division Manager

Dr. Amir IskandarBroilers Division

Manager

Eng. Ali Mowafak

Feed Division Manager


Financial Review

Cairo Poultry Company(An Egyptian Joint Stock Company)

Consolidated financial statements for the year ended December 31, 2011

Contents

28 Auditors’ report30 Consolidated balance sheet

31 Consolidated income statement32 Consolidated statement of changes in shareholders’ equity

33 Consolidated statement of cash flows34 Notes to the consolidated financial statements



KPMG Hazem HassanPublic Accountants & Consultants

Nasr Abou ElAbasMorison International

AUDITORS’ REPORTTo the shareholders of Cairo Poultry Company“An Egyptian joint stock Company”

Report on the Financial StatementsWe have audited the accompanying consolidated financial statements of Cairo Poultry Company S.A.E, which comprise the consolidated balance sheet as at 31 December 2011 , and the related consolidated statements of income, changes in shareholders’ equity, and cash flow for the year then ended, and a summary of significant ac-counting policies and other explanatory notes.

Management’s Responsibility for the Financial StatementsThese consolidated financial statements are the responsibility of Company’s management. Man-agement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Egyptian Ac-counting Standards and in the light of the prevail-ing Egyptian laws, management responsibility includes, designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error management responsibility also includes selecting and applying appropriate accounting policies and making accounting esti-mates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. Except as described below, We con-ducted our audit in accordance with the Egyp-tian Standards on Auditing and in the light of the prevailing Egyptian laws. Those standards require that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assur-ance whether the consolidated financial state-ments are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and dis-closures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated finan-cial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consoli-dated financial statements in order to design audit procedures that are appropriate in the circum-stances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the ap-propriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial state-ments.

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

Basis for Qualified OpinionThe consolidated financial statements include as-sets, liabilities, revenues and expenses refers to subsidiaries that were audited by other auditors amounted to L.E. 592 096 974, L.E. 257 568 510 and L.E. 1 134 039 313 and 969 127 949 with a percentage of 31.44%, 27.21%, 35.25% and 32.05% respectively to total consolidated assets,


liabilities, expenses and revenues as at 31 De-cember 2011. Against 21.31%, 26.11%, 34.55% and 32% respectively to total consolidated assets, liabilities, expenses and consolidated revenues as at 31 December 2010, So we couldn’t deter-mine whether there is an important adjustments to be made of the value of these assets, liabilities, expenses and revenues recorded in the consoli-dated financial statements to be relevant in accor-dance with Egyptian Accounting Standards.

Qualified OpinionIn our opinion, except for the effects of such ad-justments, if any, as might have been determined to be necessary had we audited the financial statements of such subsidiary companies referred to in paragraph above, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial posi-

tion of the group as at 31 December 2011 and the results of its operations and its cash flows for the financial year then ended, in accordance with Egyptian Accounting Standards and relevant Egyptian laws and regulations that related to pre-pare this consolidated financial statements.

Report on Other Legal and Regulatory RequirementsThe Company maintains proper books of account, which include all that is required by law and by the statutes of the Company; the consolidated financial statements are in agreement thereto.

The financial information included in the Board of Directors’ report, prepared in accordance with Law No. 159 of 1981 and its executive regula-tions, is in agreement with the Company’s books of account.

Ahmed SalemCapital Authority Controller

Register No.(94)KPMG Hazem Hassan

Nasr Abou ElAbasCapital Authority Controller

Register No.(106)Nasr Abou ElAbas / Morison International

Cairo, 11 January 2012


Consolidated Balance Sheet As at 31 December 2011

Mr. Adel Al-Alfi General manager

Eng. Mohamed Tarek Zakaria Managing Director

Dr. Mamdouh Abdelwahab Sharafeldien Chairman

Acc. Mohammed TahaChief financial office

CAIRO POULTRY COMPANY(An Egyptian Joint Stock Company)Consolidated Statement of financial position as at 31 December 2011

Note no.31/12/2011

L.E.31/12/2010

L.E.Non-current assetsProperty, Plant and equipment (13) 934 061 517 919 039 204 Breeders (14) 28 393 801 22 622 084 Plant Wealth (15) 1 197 580 1 270 670 Projects under construction (16) 97 713 872 52 867 801 Other financial investments (17) 1 516 971 1 025 377 Investments in associate companies (18) 83 731 964 89 336 821 Other investments (19) 129 697 622 214 524 899 Other non-current assets 356 969 371 143 Total non-current assets 1 276 670 296 1 301 057 999Current assetsInventories (20) 404 644 964 327 972 716 Trade receivables & other debit balances (21-1) 125 662 695 122 161 452 Due from related parties (32-1) 97 339 641 45 111 919 Cash and cash equivalent (22) 14 749 778 7 663 596 Total current assets 642 397 078 502 909 683Current liabilitiesProvision for Contingency (23) 1 358 080 11 884 884 Provision for claims (24) 60 282 629 61 223 190 Banks-credit facilities (25) 212 975 682 54 673 132 Banks-overdrafts 86 946 432 26 441 285 Tax authority creditors-income tax 7 947 722 24 359 578 Trade payables & other credit balances (26) 143 386 698 138 735 514 Due to related parties (32-2) 1 512 871 6 172 339 Long term loans - current portion (35) 101 540 366 67 777 053 Total current liabilities 615 950 480 391 266 975

Working capital 26 446 598 111 642 708

Total investment 1 303 116 894 1 412 700 707Financed as follows:Shareholders’ EquityIssued & paid - up capital (33-2) 290 304 000 290 304 000 Reserves 170 427 961 159 619 218 Special reserve- change in value of investments available for sale (34) 49 267 727 135 214 004 Revaluation surplus 46 820 572 46 820 572 Retained earnings 212 060 711 227 167 654 Parent company’s share in profits of treasury stocks sale 196 446 196 446 Net profit for the year 189 740 360 227 963 711 Total equity attributable to the shareholders of the parent company 958 817 777 1 087 285 605Minority interest 13 782 518 16 305 887 Total Shareholders’ Equity 972 600 295 1 103 591 492

Non-current liabilitiesLong term loans (35) 300 010 406 277 463 033 Deffered tax liabilities (27-1) 27 450 981 23 648 418 Long term notes payable 14 195 3 982 184 Deffered sales tax installments 3 041 017 4 015 580 Total non-current liabilities 330 516 599 309 109 215

Total shareholders’ equity and non-current liabilities 1 303 116 894 1 412 700 707

Notes from pages 34 to 65 form an integral part of the consolidated financial statements.


Consolidated Income StatementFor the financial year ended 31 December 2011

CAIRO POULTRY COMPANY(An Egyptian Joint Stock Company)


Note no.The year ended

31/12/2011L.E.

The year ended31/12/2010

L.E.Net Sales 1 885 960 197 1 961 573 256 Cost of Sales (1 585 392 320) (1 416 937 558)Gross profit 300 567 877 544 635 698

Other operating revenues (6) 146 187 272 73 654 775 Selling & Distribution expenses (84 577 665) (78 782 651)General & Administrative expenses (7) (84 907 312) (65 144 696)Other operating expense (8) (24 125 965) (175 424 613)Board of Directors remunerations (273 000) (273 000)Operating income 252 871 207 298 665 513

Revenue from investments available for sale 9 699 669 1 363 437 The group’s share in the net loss/ profit of associate companies (18) (3 514 609) 1 600 077 Profit from purchase of an associate - 6 545 537 Finance interest and expense (10) (56 618 906) (48 169 141)Net profit for the year before income tax 202 437 361 260 005 423Income tax (7 947 722) (24 359 578)Deferred tax (27-1) (3 802 563) (3 377 498)Net profit after income tax 190 687 076 232 268 347Distributed as follows:Parent company’s share in profit 189 740 360 227 963 711 Non controlling interest share in profit 946 716 4 304 636

190 687 076 232 268 347Earning per share for the year (L.E./Share) (36) 1.31 1.57

Notes from pages 34 to 65 form an integral part of the consolidated financial statements.


Consolidated Statements of Changes in Shareholders’ EquityFor the year ended 31 December 2011

Des

crip

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No.

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L.E

.

rese

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L.E

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of

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vest

men

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.

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com

pan

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p

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sale

L.E

.

Net

Pro

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for

the

ye

arL.

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lL.

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Bal

ance

as

at 1

/1/2

010

145

152

000

247

284

332

134

291

839

46 8

20 5

7222

7 37

2 60

819

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205

365

585

1 00

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men

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145

152

000

(97

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--

(48

152

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--

-

Div

iden

ds

for

the

year

200

9-

9 13

5 44

8-

- 4

8 66

8 06

0-

(205

365

585

)(1

47 5

62 0

77)

Ad

just

men

ts-

199

438

--

(721

014

)-

-(5

21 5

76)

Ava

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le fi

nanc

ial i

nves

tmen

t ev

alua

tion

diff

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(23)

--

922

165

-

--

-92

2 16

5

Net

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r th

e ye

ar-

--

--

-22

7 96

3 71

122

7 96

3 71

1

Bal

ance

as

at 3

1/12

/201

029

0 30

4 00

015

9 61

9 21

813

5 21

4 00

446

820

572

227

167

654

196

446

227

963

711

1 08

7 28

5 60

5

Bal

ance

as

at 1

/1/2

011

290

304

000

159

619

218

135

214

004

46 8

20 5

72

227

167

654

196

446

22

7 96

3 71

1 10

87 2

85 6

05

Clo

se 2

010

pro

fit in

ret

aine

d e

arni

ngs

--

--

227

963

711

-(2

27 9

63 7

11)

Tran

sfer

red

to

rese

rves

-19

049

983

-

-(1

9 04

9 98

3)-

--

Div

iden

ds

for

the

year

201

0-

(8 0

00 0

00)

--

(222

803

70

3)-

-(2

30 8

03 7

03)

Ad

just

men

ts-

(241

240

)-

-(1

216

968

)-

-(1

458

208

)

Ava

ilab

le fo

r sa

le fi

nanc

ial i

nves

tmen

t ev

alua

tion

diff

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ces

(23)

--

(85

946

277)

--

--

(85

946

277)

Net

pro

fit fo

r th

e ye

ar-

--

--

-18

9 74

0 36

018

9 74

0 36

0

Bal

ance

as

at 3

1/12

/201

129

0 30

4 00

017

0 42

7 96

149

267

727

46 8

20 5

7221

2 06

0 71

119

6 44

618

9 74

0 36

095

8 81

7 77

7

Not

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34

to 6

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ts.

CAIRO POULTRY COMPANY(An Egyptian Joint Stock Company)Consolidated Statement of financial position As at 31 December 2011


Consolidated Statement of Cash FlowsFor the financial year ended 31 December 2011

Note No.The year ended

31/12/2011L.E.

The year ended 31/12/2010

L.E.Cash Flows from Operating Activities Net profit for the year before income tax and minority interest in profits 202 437 361 260 005 423 Adjustments to reconcile net profit for the year to net cash flowsfrom operating activities:Depreciation of fixed assets (13) 76 137 101 69 304 122 Depreciation of plant wealth 73 090 200 887 Capital gain / loss (865 259) (2 813 564)Amortization of breeders 89 505 169 83 390 464 Profits from sale of breeders (21 387 147) (15 769 728)Impairment in fixed assets 220 412 8 805 537 Impairment in investment 8 406 1 427 123 Impairment in breeders 4 922 117 51 000 323 Impairment in trade receivables and other debit balances - formed 1 375 542 3 229 809 reverse Impairment in trade receivables and other debit balances - formed (290 270) (7 515 137)Reverse the impairment in trade receivables and other debit balances 3 539 607 53 065 234 Impairment in inventories - formed - (5 227 848)Reverse in breeding weath impairment (14 096 169) -Reverse the impairment in inventories (46 278 640) -The group's share in the net profits of associates companies 3 514 609 (1 600 077)Provision for Contigencies - formed 7 000 16 901 080 Provision for Contigencies - no longer required (10 533 804) (10 713 356)Provision of claims - formed (24) 8 987 454 33 553 400 Provision of claims- no longer required (9 880 616) (6 500 000)Investments revenue (9 699 669) (1 363 437)Credit interests (198 742) (42 647)Finance interests & expense (10) 60 373 450 48 727 501

337 871 002 578 065 109Changes in working capitalChange in inventories (33 933 215) (89 186 670)Change in trade receivables & other debit balances (4 572 341) (14 045 906)Change in trade payables & other credit balances (68 762 795) (1 660 211)Change in due from related parties (52 447 811) 19 610 677Change in due to related parties (4 659 468) 1 382 462Provisions for contengencies - used (47 399) (15 528 633)Financial interests paid (60 373 450) (48 727 501)Net cash flows generated from operating activities 113 074 523 429 909 327 Cash Flows From Investing ActivitiesProceeds from sale of fixed assets 8 469 164 3 841 465Payments for acquisition of fixed assets & projects under constructions (143 643 345) (116 489 112)Payments for purchase of Poultry breeders (110 108 794) (157 037 672)Proceeds from sale of Poultry breeders 45 393 107 74 835 738payments for purchase of financial investment (1 369 000) -Collected interests 198 742 42 647proceeds from sale of financial investments 9 699 669 1 363 437proceeds from revenue of investments in subsideries 600 129 394 520Net cash flow used in investing activities (190 760 328) (193 048 977)Cash Flows From Financing ActivitiesChange in banks - credit facilities 158 302 550 (57 794 012)Change in banks - overdraft 60 505 147 (48 001 505)Change in loans 56 310 686 12 310 296Decrease in minority interest (3 470 085) (4 212 990)Cash dividends paid for shareholders (186 876 311) (147 562 077)Net cash flows used in financing activities 84 771 987 (245 260 288)Net change in cash & cash equivalents during the year 7 086 182 (8 399 938)Cash and cash equivalents at 1 January 7 663 596 16 063 534 Cash and cash equivalents at 31 Dec. (22) 14 749 778 7 663 596

Notes in pages from 34 to 65 form an integral part of the consolidated financial statements.



Notes To The Consolidated Financial Statements For the financial year ended 31 December 2011



1. Company’s and subsidiaries’ background Cairo Poultry Company – An Egyptian Joint Stock Company – was established in year 1977 according to the provisions of Investment Law No. 230 of 1989.which was replaced by the Investment Incentives and Guarantees Law No. 8 of 1997

The Company was registered under the commercial register on 26/7/1977 under No. 42444, The Company’s life was extended to be 25 Years starting from 19/7/2002.Company location: 32(B) Murad st –Giza – Egypt. Chairman of the board Prof. Dr. Mamdouh Sharf EL Dien.

The Company is a subsidiary to the Kuwait Company for the food (Kuwait joint stock Company).

The Company’s purposeThe Company’s objective is represented in producing, raising chicks and producing life stock fodder, mix preliminary ingredients and producing hatching eggs and participating in similar projects domestically and overseas.

Registration in the Stock ExchangeThe Company is listed in the formal table (A) of Cairo and Alexandria Stock Exchanges.

2. Basis of preparation2-1 Statement of compliance

The financial statements have been prepared in accordance with Egyptian Accounting Standards (“EAS”), and incompliance with applicable Egyptian laws and regulations.

The financial statements were approved by the Company’s Board of Directors in its meeting held on 8/1/2012 for issuance.

2-2 Basis of measurementThe consolidated financial statements have been prepared on the historical cost basis except for the following items of assets & liabilities which are stated by its fair value:· financial instruments at fair value through profit or loss are measured at fair value · Semi-Finished production ( Chicks at the fatten station)· Semi-Finished production (eggs in incubation labs)· Available for sale investmentsThe methods used to measure fair values are discussed further in note 4.

2-3 Functional and presentation currencyThese consolidated financial statements are presented in Egyptian pound, which is the Company’s and its subsidiaries functional currency.

2-4 Use of estimates and judgmentsThe preparation of financial statements in conformity with Egyptian Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant




effect on the amounts recognised in the financial statements is included in the following notes:Note (3-6) : Breeding wealth Note (3-1) : Business combination

Information about uncertainties assumptions and estimation that have a significant risk of resulting in a material adjustment within the next financial year are included in the following:

Note (13) : Property, plant and equipment.Note (20) : Inventory impairment.Note (21-2) : trade receivables and other debit balances impairment.Note (24) : Provisions and Contingent liabilities.Note (27-1) : deferred tax.

3. Significant accounting policiesThe accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

3-1 Basis of consolidationSubsidiary companiesSubsidiaries are those enterprises controlled by the Company. Control exists when the Company has the power, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. And when evaluating this power we have to take in consideration the present and possible voting rights in the consolidated financial statements’ date. And the subsidiaries’ financial statements will be consolidated in the consolidated financial statements from the acquisition date till the holding company loses its power.

AssociatesAssociates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Associates are accounted for using the equity method. The consolidated financial statements include the Group’s share of the income and expenses of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Transactions eliminated on consolidation Intra-group balances, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

3-2 Foreign currency Foreign currency transactionsTransactions in foreign currencies (other than functional and presentation currency the Egyptian Pound) are translated to the functional currency at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the




functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss except for differences resulted from translation of available for sale investments which is to be recognized directly in shareholders’ equity. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the balance sheet.

3-3 Financial instruments

Non-derivative financial instrumentsThe Company initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is date that the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Company classifies non – derivative financial assets into the following categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for sale financial assets.

Financial assets at fair value through profit or lossA financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated at fair value through profit or loss if the Company manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Company’s documented risk management or investment strategy. Attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss.

Financial assets designated at fair value through profit or loss comprise equity securities that have been classified as available for sale.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans are measured at amortised cost using the effective interest method, less any impairment losses. Generally, trade and other receivables are stated at their nominal value less an allowance for any doubtful debts.

Loans and receivables comprise cash and cash equivalents, and trade and other receivables.

Cash and cash equivalentsCash and cash equivalents comprise cash balances in banks and call deposits with original




maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Available-for-sale investments Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the above categories of financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (note (19) and foreign currency differences on available-for sale debt instruments, are presented in fair value reserve in equity. When an investment is derecognised, gain or loss accumulated in equity is reclassified to profit or loss. Available-for-sale financial assets comprise equity securities and debt securities.

Non-derivative financial liabilities The company initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit and loss) are recognized initially on the trade date, which is the date that the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the balance sheet when , and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liabilities simultaneously.

The Company classifies non – derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at the fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise loans and borrowings , bank overdrafts, and trade and other payables.

CapitalAuthorized capitalThe Company’s authorized capital amounts to L.E one billion.

Issued and paid up capitalThe holding Company’s issued and paid up capital amounts to L.E. 290 304 000 divided into 145 152 000 shares at par value L.E. 2 each.

Repurchase, disposal and reissue of share capital (treasury shares)When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserve for own shares. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in share premium. Any profit or loss from selling or purchasing or issuing these equity instruments should not be recognaised in profit or loss.




3-4 Property, plant and equipmentItems of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses (note: 13).

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for their intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. and capitalised borrowing costs.

Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment . the cost of borrowing for the acquisition, construction or production of assets included in the income statement when incurred When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items.

The gain and loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognized net within other income/other expenses in profit or loss.

B- Subsequent costsThe cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

C- DepreciationDepreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives for the current and comparative periods are as follows:

Description Estimated useful

Lives (Years)

Buildings & Constructions 10 - 40Machinery and equipments 7 - 14Motor Vehicles & Transportation means 5Tools & Equipments 5Furniture and office equipment 3-8

Depreciation commences when the fixed asset is completed and made available for use. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

3-5 Grants Granted assets gained by group companies from grantee are recorded after deduction the cost of purchasing till reaches the book value for the assets, the grants are recorded as revenue at consolidated income statement during the estimated life time for the asset with reducing the annual depreciation burden.

3-6 BreedersThe grand Parent and parents Poultry are recorded at cost after deducting accumulated amortization for every station which consists of the cost of purchasing chicks (parent chicks) aged one day in addition to all expenses during the breeding of parents and grand parents before parents and grand




parents started producing hatching eggs for each station of grand parents and parents breeding expenses for each station is calculated based on estimated production period for grand parents and parents at the station and the expected production (hatching egg production). The disposal of parents and grand parents is recognized at the liquidation of the herd.

3-7 Projects under constructionExpenditures incurred on purchasing and constructing fixed assets are initially recorded in projects under construction until the asset is completed and becomes ready for use. Upon the completion of the assets, all related costs are transferred to fixed assets. Projects under construction are measured at cost less accumulated impairment losses.

3-8 Plant life stock All the expenditures of planting olive trees that have been capitalized as fixed assets in the balance sheet under the plant life stock item after reaching the marginal production, and to be depreciated on 50 years according to its nature taking the value of accumulated impairment losses into consideration.

3-9 GoodwillGoodwill is initially measured at its cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities. After initial recognition, the group measures acquired goodwill at cost less impairment losses. Recognized goodwill impairment losses are not subsequently reversed.

3-10 LeasesLeases are classified as operating leases. The costs in respect of operating leases are charged on a straight-line basis over the lease term (after deducting any discounts and rent-free periods effect). The accrued value from lease incentive received to take on an operating lease is recognised as income.

3-11 InventoriesInventories of raw materials, packing materials and spare parts are measured at the lower of cost or net realizable value.Net realizable value is the estimated selling price, in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost includes any other costs directly attributable to bringing the inventory to a working condition for their intended use

The cost of inventory determined as follows:Raw materials and packing materials is determined at cost according to first in First out method.

Spare parts and supplies are determined at cost according to weighted average method.

The work in progress (Chicks in batteries) at fair value determined by career’s specialists after deducting estimated cost of sales, the increase or decrease in fair value are recorded to income statement – on selling price basis after taking to account the current value at the date of the financial statements.

Finished goods of (Fodders and frozen breeders) are measured at the lower of manufacturing cost or net realizable value. The manufacturing cost comprises raw materials, direct labor, and cost includes an appropriate share of overheads based on normal operating capacity.

3-12 Impairment Financial assetsA financial asset carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if




objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Loans and receivables and held-to-maturity investment securitiesThe Company considers evidence of impairment for loans and receivables and held-to-maturity investment securities at both a specific asset and collective level. All individually significant receivables and held-to-maturity investment securities are assessed for specific impairment. All individually significant loans and receivables and held-to-maturity investment securities found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans and receivables and held-to-maturity investment securities that are not individually significant are collectively assessed for impairment by grouping together receivables and held to-maturity investment securities with similar risk characteristics.

In assessing collective impairment the Company uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables or held – to – maturity investment securities. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Available-for-sale financial assetsImpairment losses on available-for-sale financial assets are recognised by reclassifying the loss accumulated in the fair value reserve in equity, to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised in profit or loss. Changes in impairment provisions attributable to time application of the effective interest method are reflected as a component of interest income.

If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in equity.

Non-financial assetsThe carrying amounts of the Company’s non-financial assets, other than biological assets, investment property, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its related cash –generating unit (CGU) exceeds its estimated recoverable amount.




The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU.

The Company’s corporate assets do not generate separate cash inflows and are utilized by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated.

Impairment losses are recognised in profit or loss. An impairment loss in respect of other assets, that recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3-13 Defined contribution plansThe Company contributes to the government social insurance system for the benefits of its employees according to the social insurance Law No. 79 of 1975 and its amendments, the Company’s contributions are recognized in income statement using the accrual basis of accounting. The company’s obligation in respect of employees’ pensions is confined to the amount of aforementioned contributions.

3-14 ProvisionsA provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

3-15 Revenue recognitionRevenue from the sale of goods is measured at the fair value of the consideration received or receivable, and are stated net of returns, less trade discounts and sales tax.

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer. recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.

The timing of the transfers of risks and rewards varies depending on the individual terms of the contract of sale. In usually times transfer occurs when the product is received at the customer’s warehouse. No revenue is recognised in case of uncertainty to collect the receivables or its related cost or sales return or continuing management involvement with the goods.

Rental IncomeRental income is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.




Lease paymentsPayments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

3-16 Finance income and expenses

Finance income comprises interest income on invested funds, dividend income, gains on the disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through profit or loss.Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income received from investments is recognised in profit or loss when company right to this dividends arises in the financial period in which dividends are approved by the investees General assemblies .

Finance cost comprise interest expense on borrowings, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method Foreign currency gains and losses are reported on a net basis as either finance income .

3-17 Income taxIncome tax on profit or loss for the year comprises current and deferred tax. Income tax is recognized in the income statement except to the extent that it relates to items recognized directly on equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

3-18 Deferred taxDeferred tax providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the consolidated balance sheet date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized through incoming years.

3-19 Segmentation reportsEach sector of the companies’ activity segments considers as a unit that contributes in providing variant products different that the other activities (Activity segments) and each unit have risks and utilities different than the other unit exist on the company according to its activity.

3-20 Earnings per shareThe Company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

4. Determination of fair valueA number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non- financial assets and liabilities. Fair values have been determined for measurement




and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes concerning that asset or liability.

4-1 Semi finished - production (Chicks in batteries)Determined by fair value based on its present value.

4-2 Semi finished - production (eggs in incubation labs)Determined by fair value based on its present value.

4-3 Available for sale investmentsAvailable for sale investments in active market is determined by fair value.

4-4 financial instruments at fair value through profit or lossfinancial instruments at fair value through profit or loss are measured at fair value and recognise the change in faire value through profit & loss.

5. Financial risk management OverviewThe Group has exposure to the following risks from its use of financial instruments:• credit risk• liquidity risk • market risk.

Risk management frameworkThe Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board is responsible for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s Board oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company’s Board is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the management.

Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities.

Trade and other receivablesThe Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Company’s customer base, including the default risk of the industry




and country, in which customers operate, has less of an influence on credit risk. Credit risk is considered limited due to the Company’s policy that points to dealing with a different customers sector and changing the Company’s policy to cash sales.

The Board of Directors has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, which represents the maximum open amount without requiring approval from the management; these limits are reviewed quarterly. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a prepayment basis.

Most of the Company’s customers have been transacting with the Company for many years, and losses have occurred infrequently. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, whether they are a wholesale, retail or end-user customer, geographic location, industry, aging profile, maturity and existence of previous financial difficulties. Trade and other receivables relate mainly to the Company’s wholesale customers. Customers that are graded as “high risk” are placed on a restricted customer list and monitored by the Management, and future sales are made on a prepayment basis.

Goods are sold subject to retention of title clauses, so that in the event of non-payment the Company may have a secured claim. The Company does not require collateral in respect of trade and other receivables.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

The Company held cash and cash equivalents of L.E 14 749 778 at 31 December 2011 (2010: L.E 7 663 596), which represents its maximum credit exposure on these assets. The cash and cash equivalents are held with bank and financial institution counterparties.

Liquidity riskLiquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimizing its cash return on investments. Typically the company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains credit facility amounted to L.E 86 946 432 with interest rate between 9.5% (9.5% 2010.

Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company buys and sells derivatives, and also incurs financial



liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Management.

Currency riskThe Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Company (EGP L.E), primarily the U.S. Dollars (USD) and (Euro).

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Interest rate riskThe Company adopts a policy of ensuring that between 9 and 10 percent of its exposure to changes in interest rates on borrowings is on a fixed-rate basis, taking into account assets with exposure to changes in interest rates. This is achieved by entering into interest rate swaps.

Other market price riskInvestments at fair value through profit or loss. Management of the Company monitors the mix of debt and equity securities in its investment portfolio based on market index. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the B.O.D.

Capital managementThe Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of paid up capital and retained earnings. The Board of Directors monitors the return on capital, as well as the level of dividends to shareholders.

The Company’s net debt to adjusted equity ratio at the reporting date was as follows:31/12/2010

L.E.31/12/2011

L.E.700 376 190946 467 079Total liabilities

7 663 59614 749 778 Less: cash and cash equivalents692 712 594931 717 301Net debt

1 103 591 492972 600 295Total equity

62.8%95.8%Net debt to adjusted equity ratio at 31 DecemberThere were no changes in the Group’s approach to capital management during the year.

6. Other operating revenuesFinancial year

ended 31/12/2011

L.E.

Financial year ended

31/12/2010L.E.

Export support revenue - 2 028 563Profit from selling Grand’s/Parents 21 387 147 15 769 729Capital gain 865 259 2 813 564*Recovery of service duties 16 182 979 -Other revenues 24 384 250 21 334 108Provision no longer required 20 414 421 18 965 826Reversed impairments in breeding wealth 14 096 169 -Reversed impairments in inventory 46 278 640 7 515 137**Reversed impairments in trade receivable 2 578 407 5 227 848

146 187 272 73 654 775





* This item represents the amounts recovered from custom duty port said custom related to the service duties that has been

paid to custom duty for several years on which the company has litigate by suit no 3805 for 2005 on which the company has

won the suit to recover the duties in.

** The raw material inventory was reduced on 31 December 2010 by an amount of LE 46 million represent (Elsheleem) material

this amount is reversed during 2011 based on the technical study prepared & authorized by the responsible department that

states that:

- The misused of operation related to the raw material and recommended not to use during the year ended 31/12/2010.

- During the year 2011 the technical department has renew this study and recommended to use this materials by using other

new operation ways that achieve the maximum production from the material and gives effective results.

7. General and administrative expensesThe year ended

31/12/2011L.E.


L.E.Salaries 60 635 972 39 209 375Depreciations 3 723 722 3 460 487Early retirement - 3 200 000Other expenses 20 547 618 19 274 834

84 907 312 65 144 696

8. Other operating expenses


L.E.


L.E.*Bad debts 3 166 757 3 229 809Impairment in assets 220 412 1 427 123Impairment in investments 8 406 11 047 959Impairment in breeding wealth 4 922 117 51 000 323Impairment in inventory 3 539 607 -Impairment in debtors & other debit accounts 209 900 55 672 213Provision for claims-formation 8 987 454 32 580 635Provision for Contingencies-formation 7 000 3 124 704**Professional fees 2 022 872 -Others 1 041 440 17 341 847

24 125 965 175 424 613

* This item represents the amounts that have been authorized by the company’s board of directors as bad debts were due on

company’s clients.

** This item represents the professional fees to recover the services duties from custom duty- Port said custom duty (note no. 6)

9. Personnel expensesThe year ended

31/12/2011L.E.

The year ended 31/12/2010

L.E.Wages and salaries 196 996 663 141 476 362Compulsory social security contributions 15 463 139 13 033 742Contributions to defined contribution plans 4 658 993 3 741 554

217 118 795 158 251 657




10. Finance expenses


31/12/2011L.E.


31/12/2010L.E.

Credit interest 205 580 42 647Debit interest (60 373 450) (48 727 501)Foreign currencies exchange gain 3 548 964 515 713

(56 618 906) (48 169 141)

11. Tax status11-1 Cairo Poultry Company(Holding)

11-1-1 Corporate taxThe Company’s profits shall be subjected to corporate tax according to the provisions of Tax Law No. 187/1993 that was amended, and superseded by Law No. 91/2005.

Years till 1993The company made final tax reconciliation with Tax Authority regarding the corporate tax and settled the due tax differences thereon. Some disputed points pertaining to the period from 9/10/1993 till 31/12/1993 were referred to the court for consideration and are still being considered before the court, & there was a form of reconciliation has been applied on January 6, 2010, & the reconciliation committee has been signed, & the court decision issued on 10 March, 2010 to finish that dispute .

Years from 1994 till 2002 Tax amounts due were paid.

Years 2003/2004Tax inspection is under proceeding for these periods.

Years 2005/2010Tax inspection has not been made until this date, & the tax returns are being delivered on dates.

11-1-2 Salary tax

Years from 1988 till 1993There was a dispute between the company, & Tax authority in the court, the company has applied for a reconciliation according to Law No. 91/2005, & the court decision issued on 29 March, 2010 to finish that dispute .

Years from 1994 till 2008Tax amounts due were paid to the Tax Authority.

Years 2009/2010Tax inspection has not been made until this date, & the tax returns are being delivered on dates.

11-1-3 Stamp taxThe period from 1998 till 31/7/2006Tax inspection was made for the company and the tax amounts due were paid to the Tax Authority.

11-1-4 General sales tax

The company’s activity is exempted from general sales tax according to clause No. (11) of schedule No. (1) Attached to Law No. (2) for the year 1997




11-2 Subsidiaries companiesFirst: Companies that are subject to corporate tax.

Subsidiaries Tax statusNew Cairo Poultry CompanyIncubation lab / Noubarya project/ Salehya

Inspected till 31/12/2004

Cairo Poultry Processing Inspected till 31/12/2005Misr Grand Parents Co. Inspected till 31/12/2005Cairo Grand Parents Co Inspected till 31/12/1998

Second: Companies that are exempted from the corporate taxSubsidiaries Date ends tax exemptionNew Cairo Poultry Company(Sina 2000 for fatten chicks Incubation Lab ,mechanical processing & Hasbo projectCairo Feed Company

2016/2014/20192014/2019/201331/12/2013

Cairo Broilers Company 9/7/2013Cairo Misr grandparents co. 31/12/2014Wadi Al Natron for ParentsCairo Leasing CompanyAl-Madena for poultry productionAl-Madena for poultry companyWadi Al Natron for Broilers Company(Alkadsia)Cairo Poultry company for Broilers

31/12/201731/12/201427/3/201530/4/2012Exemption is under taken To be exempted for 5 years

Third: Companies that are not exempted from the corporate tax and have not been inspected until 31/12/2010Corporation Guard Services

Fourth: Companies have not commenced its activities

Cairo for Oil ExtractionCairo Cold StoresWadi Al Natron for Broilers Production Co.New Cairo Grand Parents Wadi Al Natron for Grand Parents

Fifth: Withdraws & deposits under tax account “New Cairo Poultry Company”- subsidiary Company

Years from 1994 to 2003Based on estimation, the general tax authority charged the company for LE 10 125 714. The company objected on this estimation, further based upon the company’s prospective, the company paid LE 11 251 159 representing the tax dues in addition to the payments provided every 3 months according to the quarterly tax return .The company settled the dispute with the tax authority and paid the tax difference of L.E 149 464 in excess to what were previously paid.

Years from 2004 to 2006The company received a tax claim amounting to LE 1 815 297 represents the difference in the income statements for the years 2004, 2005, 2006. The company applies the withholding tax -withdraws and deposits under tax account - .Total payments paid by the Company on these periods amounted to LE 1 337 288 .The company settled the dispute with regard to the withdraw tax and paid the tax difference of LE 285 580.

12- Segmentation reportsThe segmentation reports was prepared on activity segments basis, the primary report for the activity segments was prepared in accordance with organizational and managerial chart of the company and its subsidiaries.




12-1 Segmentation reports for the year ended 31 December 2011 Activities segmentations results include a direct participation unit in each sector activity.

The primary report for activity segmentations:

Act

ivit

y S

egm

ents

Feed

Sec

tor

L.E

.31

/12/

2011

Bro

iler

Sec

tor

L.E

.31

/12/

2011

Hat

cher

yS

ecto

rL.

E.

31/1

2/20

11

Pro

cess

ing

S

ecto

rL.

E.

31/1

2/20

11

Gra

ndp

aren

tsS

ecto

rL.

E.

31/1

2/20

11

Sec

urit

yS

ecto

rL.

E.

31/1

2/20

11

Ag

ricu

ltur

e S

ecto

rL.

E.

31/1

2/20

11

Und

istr

ibut

-ab

le it

ems

L.E

.31

/12/

2011

Ele

men

atio

n o

f C

ons

oli-

dat

ed t

rans

-ac

tio

nsL.

E.

31/1

2/20

11

Tota

lL.

E.

31/1

2/20

11

Sal

es 8

21 4

78 8

61

140

515

560

68

735

265

762

795

286

7

7 78

8 97

4 1

2 21

5 70

1 2

430

550

-

- 1

885

960

197

S

ales

bet

wee

n se

gm

ents

517

293

874

48

3 31

1 15

2 2

44 5

37 6

44

258

703

075

4

0 85

5 68

9 7

341

000

-

-(1

552

042

434

)-

Tota

l sal

es 1

338

772

735

62

3 82

6 71

2 3

13 2

72 9

09

1 0

21 4

98

361

118

644

663

1

9 55

6 70

1 2

430

550

-

(1 5

52 0

42 4

34)

1 88

5 96

0 19

7

Seg

men

ts' g

ross

pro

fit 2

39 4

31 1

37

5 3

26 2

16 (

62

374

147)

80

559

313

33

768

604

2 8

54 8

76

1 0

01 8

78

--

300

567

877

D

istr

ibut

ion

& s

ales

ex

pen

ses

(17

415

794)

--

(62

138

992)

(5 0

22 8

79)

--

--

(84

577

665)

Gen

eral

& a

dm

inis

trat

ive

exp

ense

(12

758

185)

(5 1

45 5

73)

(3 4

25 8

56)

(19

595

737)

(3 1

77 9

93)

(1 8

04 9

61)

-(8

999

008

)-

(84

907

313)

Oth

er o

per

atin

g e

xpen

ses

(11

076

607)

(118

715

)(6

808

232

)(4

731

313

)(1

283

132

)(1

07 9

66)

--

-(2

4 12

5 96

5)B

oar

d o

f D

irect

ors

re

mun

erat

ions

--

--

--

-(2

73 0

00)

-(2

73 0

00)

Oth

er o

per

atin

g p

rofit

65

717

278

6 1

27 0

82

40

030

332

2 2

50 4

77

12

444

323

12

4 99

9 (1

145

802

) 2

0 63

8 58

3 -

146

187

272

P

rofi

ts r

esul

ts f

rom

o

per

atio

n 2

63 8

97 8

29

6 1

89 0

10

(32

577

903)

(3 6

56 2

52)

36

728

923

1 0

66 9

48

(143

924

)(1

8 63

3 42

5)-

252

871

206

Rev

enue

of

avai

lab

le f

or

sale

inve

stm

ents

--

--

--

- 9

699

669

-

9 6

99 6

69

The

gro

up's

sha

re in

the

ne

t p

rofit

of

asso

ciat

e co

mp

anie

s-

--

--

--

(3 5

14 6

09)

-(3

514

609

)

Fin

ance

exp

ense

s &

in

tere

sts

(11

978

585)

(7 2

33 9

47)

(5 5

56 1

13)

(11

400

887)

(490

686

)

11 2

37

(103

810

)(1

9 86

6 11

5)-

(56

618

906)

Net

pro

fit

for

the

year

b

efo

re in

com

e ta

x 2

51 9

19 2

44

(1 0

44 9

37)

(38

134

016)

(15

057

139)

36

238

237

1 0

78 1

85

(247

734

)(3

2 31

4 48

0)-

202

437

360

Inco

me

tax

--

--

(3 1

76 8

59)

(216

544

)-

(4 5

54 3

19)

-(7

947

722

)D

effe

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tax

(654

318

)-

(1 0

13 9

67)

(256

485

)(2

19 3

32)

(27

969)

-(1

630

492

)-

(3 8

02 5

63)

Net

pro

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for

the

year

af

ter

inco

me

tax

251

264

926

(1

044

937

)(3

9 14

7 98

3)(1

5 31

3 62

4) 3

2 84

2 04

6

833

672

(247

734

)(3

8 49

9 29

1)-

190

687

075

Oth

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form

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nsD

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10

069

116

15

576

629

17

650

327

29

704

491

2 6

59 1

29

25

3 53

5

223

875

--

76

137

102

Ass

ets

619

496

867

43

6 27

1 46

7 3

51 4

50 0

40

461

945

973

4

2 95

4 43

1 4

978

260

9

284

884

-

- 1

926

381

922

Li

abili

ties

471

206

531

17

9 26

2 93

5 1

04 7

94 2

48

169

267

779

1

5 78

0 95

4 2

206

775

3

202

758

-

- 9

45 7

21 9

80




Act

ivit

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egm

ents

Feed

Sec

tor

L.E

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2010

Bro

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Sec

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L.E

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2010

Hat

cher

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Pro

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31/1

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10

Gra

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31/1

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31/1

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10

Ag

ricu

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31/1

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10

Und

istr

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-ab

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ems

L.E

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2010

Ele

men

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f C

ons

oli-

dat

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-ac

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31/1

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10

Tota

lL.

E.

31/1

2/20

10

Sal

es84

8 33

7 63

9 17

5 83

6 53

0 10

2 89

4 71

6 74

2 69

1 77

8 81

885

766

9

742

025

184

802

--

1 96

1 57

3 25

6S

ales

bet

wee

n se

gmen

ts36

5 14

5 71

6 30

8 42

6 88

0 21

1 48

2 34

2 23

8 53

4 73

4 60

713

230

6

391

046

--

(1 1

90 6

93 9

48)

-To

tal s

ales

1 21

3 48

3 35

548

4 26

3 41

031

4 37

7 05

898

1 22

6 51

214

2 59

8 99

616

133

071

184

802

-(1

190

693

948

)1

961

573

256

Seg

men

ts’ g

ross

pro

fit24

4 02

4 66

330

159

202

154

161

006

56

049

845

58

935

348

3

650

912

(2 3

45 2

78)

--

544

635

698

Dis

trib

utio

n &

sal

es

exp

ense

s(2

0 03

0 98

2)-

-(5

3 69

1 21

7)(5

060

452

)-

--

-(7

8 78

2 65

1)

Gen

eral

& a

dm

inis

trat

ive

exp

ense

(11

059

340)

(5 1

71 8

92)

(3 1

89 9

97)

(14

436

904)

(2 1

17 3

89)

(1 4

38 9

30)

-(2

7 73

0 24

4)-

(65

144

696)

Oth

er o

per

atin

g ex

pen

ses

(84

479

799)

(6 4

65 6

02)

(57

139

375)

(1 4

02 7

75)

(12

851

274)

(100

000

)(1

0 80

4 74

2)(2

181

046

)-

(175

424

613

)B

oard

of D

irect

ors

rem

uner

atio

ns-

--

--

--

(273

000

)-

(273

000

)

Oth

er o

per

atin

g p

rofit

15 8

45 9

343

399

287

29 1

40 2

746

242

467

11 6

16 0

8630

100

-

7 38

0 62

7 -

73 6

54 7

75P

rofi

ts r

esul

ts f

rom

o

per

atio

n14

4 30

0 47

621

920

995

122

971

908

(7 2

38 5

84)

50 5

22 3

192

142

082

(13

150

020)

(22

803

663)

-29

8 66

5 51

3

Rev

enue

of a

vaila

ble

for

sale

inve

stm

ents

--

--

--

-1

363

437

-1

363

437

The

grou

p’s

sha

re in

the

ne

t p

rofit

of a

ssoc

iate

co

mp

anie

s-

--

--

--

1 60

0 07

7-

1 60

0 07

7

Neg

ativ

e go

odw

ell f

or t

he

acq

uire

d c

omp

anie

s-

--

--

--

6 54

5 53

7-

6 54

5 53

7

Gai

n fr

om s

ale

of

avai

lab

le-f

or-s

ale

inve

stm

ents

--

--

--

--

--

Fina

nce

exp

ense

s &

in

tere

sts

(11

838

659)

(8 9

67 2

12)

(4 0

65 1

74)

(10

229

781)

(456

119

)-

(127

184

)(1

2 48

5 01

2)-

(48

169

141)

Net

pro

fit

for

the

year

b

efo

re in

com

e ta

x 13

2 46

1 81

712

953

783

118

906

734

(17

468

365)

50 0

66 2

002

142

082

(13

277

204)

(25

779

624)

-26

0 00

5 42

3

Inco

me

tax

(5 0

00 6

12)

(4 7

52 6

21)

(8 9

82 6

67)

-(5

028

099

)(5

43 8

10)

-(5

1 76

9)-

(24

359

578)

Def

fere

d t

ax-

(178

744

)(1

402

337

)(1

312

365

)(2

28 6

31)

(13

915)

-(2

41 5

06)

-(3

377

498

)N

et p

rofi

t fo

r th

e ye

ar

afte

r in

com

e ta

x 12

7 46

1 20

58

022

418

108

521

730

(18

780

730)

44 8

09 4

701

584

357

(13

277

204)

(26

072

899)

-23

2 26

8 34

7

Oth

er In

form

atio

nsD

epre

ciat

ion

8 61

4 67

016

230

294

13 9

18 6

9628

128

359

2 67

8 47

4 19

1 48

417

9 31

03

554

-69

944

841

Ass

ets

533

959

995

435

781

413

353

225

048

427

350

590

38 7

28 4

84

4 88

0 97

19

778

684

--

1 80

3 70

5 18

4Li

abili

ties

257

844

945

153

978

883

125

632

394

137

290

294

19 7

49 8

71

2 17

2 02

93

487

276

--

700

155

692

12-2 Segmentation reports for the year ended 31 December 2010 Activities segmentations results include a direct participation unit in each sector activity.

The primary report for activity segmentations:




13. Property, plant and equipment

Land

s L.

E.

Bui

ldin

gs

L.E

.

Mac

hine

ry &

eq

uip

men

tsL.

E.

Vehi

cles

L.E

.

Too

ls a

nd

equi

pm

ents

L.E

.

Furn

itur

e &

o

ffice

sup

plie

sL.

E.

Tota

lL.

E.

Cos

t as

at

1 Ja

nuar

y 20

1010

6 44

7 73

841

3 34

6 15

952

5 86

8 47

991

373

298

37

510

451

23

633

310

1 19

8 17

9 43

5A

cqui

red

cos

t2

703

231

9 96

3 23

33

383

046

130

000

390

364

27

658

16

597

532

Ad

diti

ons

dur

ing

the

year

2 24

8 23

4 89

423

067

65

468

422

9 87

7 69

06

419

376

6

75 5

34

174

112

323

Dis

pos

als

dur

ing

the

year

-(1

45 2

46)

(3 6

17 7

29)

(3 4

64 1

47)

(523

466

)(3

17 2

58)

(8 0

67 8

46)

Imp

airm

ent

(7 6

60 4

05)

(1 1

22 8

38)

(22

294)

--

-(8

805

537

)B

alan

ce a

s at

31

Dec

embe

r 20

1010

3 73

8 79

851

1 46

4 37

559

1 07

9 92

497

916

841

43

796

725

24

019

244

1 37

2 01

5 90

7

Bal

ance

as

at 1

Jan

uary

201

110

3 73

8 79

851

1 46

4 37

559

1 07

9 92

4 9

7 91

6 84

1 4

3 79

6 72

5 2

4 01

9 24

41

372

015

907

Ad

just

men

t(2

96 4

56)

(1 1

52 0

52)

242

455

1

4 60

5 (6

05 3

12)

2

449

274

652

514

Co

st a

s at

1 J

anua

ry 2

011

afte

r ad

just

men

t

103

442

342

510

312

323

591

322

379

97

931

446

43 1

91 4

13

26

468

518

1

372

668

421

Ad

diti

ons

of t

he y

aer

-47

388

718

29

784

618

13

953

072

4 19

6 60

5 3

660

718

98

983

731

Dis

pos

als

of t

he y

ear

-(6

338

879

)(2

465

382

)(1

0 53

4 17

1)(4

096

570

)(9

85 1

30)

(24

420

132)

Co

st a

s 31

Dec

emb

er 2

011

103

442

342

551

362

162

618

641

615

101

350

347

43 2

91 4

4829

144

106

1 44

7 23

2 02

0A

ccum

ulat

ed d

epre

ciat

ion

as a

t 1/

1/20

10-

75 6

51 2

5321

2 57

2 26

459

312

434

25 1

57 4

7214

865

850

387

559

273

Dep

reci

atio

n of

acq

uire

d fi

xed

as

sets

-62

5 72

81

381

855

129

999

45 8

96

8 63

4 2

192

112

Dep

reci

atio

n of

the

yea

r-

15 4

10 0

5236

980

271

11

279

008

3

757

865

1 87

6 92

6 69

304

122

Dis

pos

als

accu

mul

ated

d

epre

ciat

ion

-(3

5 44

7)(2

708

902

)(2

723

489

)(4

64 0

67)

(146

899

)(6

078

804

)

Acc

umul

ated

dep

reci

atio

n as

at

31/1

2/20

10-

91 6

51 5

8624

8 22

5 48

8 6

7 99

7 95

228

497

166

16

604

511

452

976

703

Acc

umul

ated

dep

reci

atio

n as

at

1/1/

2011

-91

651

586

248

225

488

67 9

97 9

5228

497

166

16

604

511

452

976

703

Ad

just

men

t-

(83

400)

24 3

0721

614

(55

455)

745

443

652

509

Co

st a

s at

1 J

anua

ry 2

011

afte

r ad

just

men

t-

91

568

186

248

249

795

68

019

566

28 4

41 7

1117

349

954

453

629

212

Dep

reci

atio

n of

the

yea

r-

16 3

56 2

67 4

0 28

4 76

812

722

344

3 96

9 37

82

804

344

76 1

37 1

01D

isp

osal

s ac

cum

ulat

ed

dep

reci

atio

n-

(1 0

25 4

20)

(1 8

36 1

68)

(9 3

89 9

48)

(3 3

82 0

19)

(962

255

)(1

6 59

5 81

0)

Acc

umul

ated

dep

reci

atio

n as

at

31/1

2/20

11-

106

899

033

286

698

395

71 3

51 9

62

29

029

070

19 1

92 0

43

513

170

503

Net

bo

ok

valu

e as

at

31/1

2/20

1110

3 44

2 34

2 4

44 4

63 1

2933

1 94

3 22

029

998

385

14

262

378

9 9

52 0

63 9

34 0

61 5

17N

et b

oo

k va

lue

as a

t 31

/12/

2010

103

738

798

419

812

789

342

854

436

29 9

18 8

89 1

5 29

9 55

9 7

414

733

919

039

204




13-1 The following represents the fixed assets items which were purchased through the group com-panies based on initial selling contracts, the necessary regulatory procedures for registering and transferring its possession under the company’s name are currently under progress :-

L.E.Land 93 846 371Building& Construction 23 209 976

117 056 347

13-2 The machinery and equipment balance includes L.E. 10 934 739, representing in the cost for acquiring a treatment line for solid wastes purposes (Cairo processing company), this amount was partially financed by the Ministry of Environment (The project of controlling the industrial pollution- financed by the World Bank-). The amount of L.E. 1 108 279 equal to 20% of total finance repre-sents a non-refundable grant. Based on the accounting policy no. (3-5), the value of this grant was deducted from cost value of the said treatment line.

13-3 The building caption includes the amount of L.E 2 247 812 represents total finance cost capitalized to this caption during the period of its construction in the previous years and an amount of LE 683 754 capitalized during 2011.

13-4 The machinery and equipment caption includes the amount of L.E 2 972 379 represents total finance cost capitalized to this caption in the previous years.

14. Breeding wealth31/12/2011

L.E.31/12/2010

L.E.CostBeginning of the year 32 263 857 24 545 253Additions for the year 31 146 842 40 506 691Disposals for the year (23 929 243) (9 327 601)Amortization for the year (12 452 918) (23 460 486)End of the year 27 028 538 (32 263 857)Breeding expense Beginning of the year 41 358 550 34 495 955Breeding additions 78 961 951 66 389 431*Amortization for the year (77 052 251) (59 526 836)End of the year 43 268 250 41 358 550Breeding wealth 70 296 788 73 622 407*Deduct impairment (41 902 987) (51 000 323)Net book value as at 31 December 2011 28 393 801 22 622 084

* The company’s management formed an impairment of the year represents the impairment in the value of Breeding

wealth(Breeders) represents the impairment in the value of Grandparents according to the study of the Company’s technical

based on the expected mortality standards of Breeding




15. Plant Wealth31/12/2011

L.E.31/12/2010

L.E. Cost as at 1 Jan 2011 10 625 290 10 686 878Transfer from project for the year - 14 213Adjustments - (75 801)Cost at 31 December 2011 10 625 290 10 625 290less Amortization for the year (408 535) (207 649)wealth amortization (73 090) (200 886)Total amortization as at 31 December 2011 (481 625) (408 535)Impairment (8 946 085) (8 946 085)Net book value as at 31 December 2011 1 197 580 1 270 670

The company’s management formed impairment by percentage of 90% from the value of the plant wealth based on technical specialist study which clarify the inability of the plant wealth to reach its marginal production

16. Projects under construction

Balance as at 1/1/2011

L.E.Additions

L.E.

Transferred to fixed assets

L.E.Adjustments

L.E.

Balance as at31/12/2011

L.E.Buildings & construction in progress 38 838 089 70 694 705 (42 389 652) (7 933 492) 59 209 650Machinery & Equipment under installation

8 618 572 16 684 657 (12 592 529) (1 904 508) 10 806 192

Supplies 239 656 - (239 656) - -Vehicles under preparation 519 570 2 971 880 (3 106 895) (384 555) -Advance payments for fixed assets acquisition

1 448 946 28 551 258 (1 447 696) (3 692 756) 24 859 752

L/Cs for purchasing fixed assets 2 116 478 10 775 734 (10 989 163) (1 853 387) 49 662Plant life stock – land reclamation 1 086 490 772 860 - - 1 859 350Furniture under installation - 929 528 - (262) 929 266

52 867 801 131 380 622 (70 765 591) (15 768 960) 97 713 872

The building caption includes the amount of L.E 2 221 240 represents total finance cost capitalized to this caption during 2011.




17. Other financial investments

Country of establish-

ment

Number of purchased

shares

Participation percentage

%

Nominal value per

shareL.E.

Nominal value as at 31/12/2011

L.E.

paid up till 31/12/2011

%

value as at 31/12/2011

L.E.


L.E.

A - Investments of Cairo poultry Company (The parent company)

* Cairo Feed Ingredients Trading Egypt 42 000 84 100 4 200 000 25 1 050 000 1 050 000

** Cairo Reyer Breeding Company Egypt 6 000 60 100 600 000 100 600 000 600 000

*** Cairo for Oil Extraction Egypt 4 900 98 100 490 000 25 122 500 122 500

*** Cairo Cold Stores Egypt 4 900 98 100 490 000 25 122 500 122 500

**** New Cairo grand parent Poultry Company

Egypt 4 900 98 100 490 000 25 122 500

**** Wadi Al -Natron for grand parent company

Egypt 4 900 98 100 490 000 25 122 500

Less:Impairment in investment value - (1 200 000) (1 200 000)Total 6 760 000 940 000 695 000 Investments of Misr poultry grand parent (subsidary)Rosters Misr company (under liquidation)

- - -

B - Investments of Cairo Misr poultry grand parent (subsidary)

* Cairo Feed Ingredients Trading Egypt 500 5 100 50 000 25 12 500 12 500 Wadi Al -Natron for Agricultural Development

Egypt 50 1 100 5 000 25 1 250 1 250

Wadi Al - Natron for land reclamation

Egypt 50 1 100 5 000 25 1 250 1 250

Cairo company for land reclamation

Egypt 50 1 100 5 000 25 1 250 1 250

Cairo Company for Agriclatural Development

Egypt 50 1 100 5 000 25 1 250 1 250

Al - Frafra for Agricultural development

Egypt 50 1 100 5 000 25 1 250 1 250

*** Cairo for Oil Extraction Egypt 50 1 100 5 000 25 1 250 1 250

*** Cairo Cold Stores Egypt 50 1 100 5 000 25 1 250 1 250

**** New Cairo grand parent Poultry Company

Egypt 50 1 100 5 000 25 1 250 -


Egypt 50 1 100 5 000 25 1 250 -

Less:Impairment in investment value - (12 500) (12 500)Total 95 000 11 250 8 750

C- Investments in New Cairo Poultry company (Subsidiary)

** Cairo Reyer Breeding Company Egypt 2 000 20 100 200 000 100 200 000 200 000 Wadi Al - Natron for land reclamation

Egypt 50 1 100 5 000 25 1 250 1 250

Wadi Al -Natron for Agricultural Development

Egypt 50 1 100 5 000 25 1 250 1 250

Cairo company for land reclamation

Egypt 50 1 100 5 000 25 1 250 1 250

Cairo Company for Agriclatural Development

Egypt 50 1 100 5 000 25 1 250 1 250




Country of establish-

ment

Number of purchased

shares

Participation percentage

%

Nominal value per

shareL.E.

Nominal value as at 31/12/2011

L.E.

paid up till 31/12/2011

%


L.E.


L.E.

Al - Frafra for Agricultural development

Egypt 50 1 100 5 000 25 1 250 1 250

*** Cairo for Oil Extraction Egypt 50 1 100 5 000 25 1 250 1 250 **** Cairo Cold Stores Egypt 50 1 100 5 000 25 1 250 1 250 **** New Cairo grand parent Poultry

CompanyEgypt 50 5 000 1 250 -


Egypt 50 5 000 1 250 -

Less:Impairment in investment value - (50 000) (50 000)Total 245 000 161 250 158 750

D- Investments of Cairo Poultry processing (subsidiary)Cairo Trading & Importing Company

Egypt 5100 51 100 510 000 25 127 500 127 500

El Delta Trading & Importing Egypt 9800 98 100 980 000 25 245 000 -Less:Impairment in investment value - (123 029) (114 623)Total 1 490 000 249 471 12 877

E- Investments of Cairo Broilers Company (subsidiary)

** Cairo Reyer Breeding Company Egypt 2 000 20 100 200 000 100 200 000 200 000 Less:Impairment in investment value (50 000) (50 000)Total 200 000 150 000 150 000

F- Investements of Wadi Al -Natron for grand parent company(subsidary)El Delta Trading & Importing Egypt 100 1 100 10 000 25 2 500 -Total 10 000 2 500 -

H- Invesrements of Cairo Poultry company for Broilers(subsidary)El Delta Trading & Importing Egypt 100 1 100 10000 25 2 500 -Total 10 000 2 500 -

Balance as at 31/12/2011 8 810 000 - 1 516 971 1 025 377* Cairo Feed Ingredients Trading company is temperorly inactive according to board of director desicion dated 21 February

2007.** Cairo Reyer Breeding Company has been under liquidation according to the general assembly on 23 January 2010*** Cairo for Oil Extraction & Cairo Cold Stores have been under liquidation according to the general assembly on 5 July 2010**** both New Cairo grand parent Poultry & Wadi Al -Natron for grand parent companies were put into liquidation according to

General assembly meeting on 22/2/2011




18. Investements in associates

The

val

ue o

f in

vest

emen

t ac

cord

ing

to

eq

uity

met

hod

Des

crip

tio

nC

ount

ry o

f es

tabl

ishm

ent

Num

ber

of

pur

chas

ed

shar

es

Par

ticip

atio

n pe

rcen

tage

%

No

min

al

valu

e p

er

shar

eL.

E.

inve

stee

no

min

al

valu

e as

at

31/1

2/20

11L.

E.

Per

cent

age

pai

d u

p t

ill

12/3

1/20

11%

as a

t 31

/12/

2011

L.E

.

as a

t 31

/12/

2010

L.E

.E

gyp

tian

Co

mp

any

for

Sta

rch

& G

luco

se

ind

ustr

yE

gyp

t 8

413

533

27.2

310

84 1

35 3

3010

081

209

872

86

688

715

Cai

ro C

om

pan

y fo

r S

tarc

h &

Glu

cose

in

dus

try

2 52

2 09

22

648

106

Tota

l val

ue o

f inv

estm

ent i

n su

bsid

arie

s83

731

964

89

336

821

A b

rief o

f fina

ncia

l st

atem

ents

of E

gypt

atio

n C

ompa

ny fo

r S

tarc

h&

Glu

cose

ind

ustr

y

Par

ticip

atio

n pe

rcen

tage

%

Non

cur

rent

as

sets

Cur

rent

as

sets

Tota

l ass

ets

Cur

rent

lia

bilit

ies

Long

term

lia

bilit

ies

Tota

l lia

bilit

ies

Rev

enue

sEx

pens

esLo

ss fo

r co

nsol

idat

ed

perio

d

Gro

up

shar

e in

as

soci

ate

com

pani

es’

net l

oss

Dire

ct p

artic

ipat

ion

(26.

01%

), In

dire

ct

par

ticip

atio

n (1

.22%

)27

.23

554

105

045

188

597

855

742

702

900

317

098

350

126

567

399

443

665

749

360

513

805

373

616

715

(13

102

910)

(3 5

14 6

09)

*

Inve

stm

ent

in C

airo

Com

pan

y fo

r S

trac

h an

d G

luco

se In

dus

try

was

con

sid

ered

as

inve

stm

ents

in a

ssoc

iate

com

pan

y as

tha

t co

mp

any

is a

sub

sid

iary

for

Egy

pta

tion

Com

pan

y fo

r S

tarc

h &

Glu

cose

ind

ustr

y.




19. Other investments

Cou

ntry

of

est

ab-

lishm

ent

Num

ber o

f pu

rcha

sed

shar

es

Par-

ticip

atio

n pe

rcen

t-ag

e%

Nom

inal

va

lue

per

shar

eL.

E.

Cur

-re

ncy

Fair

valu

e12

/31/

2011

L.E

.

Inve

stee

no

min

al

valu

e pe

r sh

are

12/3

1/20

11L.

E.

Stoc

ks

Div

iden

ds

Stoc

ks

Div

i-de

nds

valu

e

Perc

ent-

age

paid

%

Inve

stm

ent

cost

1/

1/20

11L.

E.

Dis

-po

sal

Tota

l in

vest

men

t co

st a

s at

12/3

1/20

11L.

E.

Rais

ing/

Impa

irem

ent

in th

e va

lue

of in

vest

men

t as

at

12/3

1/20

11L.

E.

Net

boo

k

valu

e of

in

vest

men

t as

at

12/3

1/20

11L.

E.

Inve

stem

ents

ev

alua

tion

diffe

renc

es

as a

t12

/31/

2011

L.E

.

Net

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20. Inventory 31/12/2011

L.E. 31/12/2010

L.E.*Raw materials 177 516 857 68 434 738**Spare parts & supplies 61 409 640 52 880 326***Packing material 7 910 206 10 506 489Work in process 36 883 570 41 738 644Finished goods 97 178 272 65 803 519

380 898 545 239 363 716L.C’s for purchasing raw materials & supplies 20 223 137 83 772 775Consignment goods with others 3 524 282 4 836 225

404 644 964 327 972 716

* The raw material inventory was reduced by an amount of LE 46 million represent (Elsheleem) material this amount is reversed during 2011 based on the technical study prepared & authorized by the responsible department which states that:

- The miss operation related to the raw material and recommended not to use during the year ended 31/12/2010.

- During the year 2011 the technical department has renew this study and recommended to use this materials by using other new operation ways that achieve the maximum production from the material and gives effective results.

** The Spare parts & supplies inventory was reduced by an amount of LE 3 764 790 as at 31/12/2011 represent inventory obsolete against LE 3 722 436 as at 31/12/2010.

*** The Packing material inventory was reduced by an amount of LE 2 267 185 as at 31/12/2011 represent inventory obsolete against LE 3 343 070 as at 31/12/2010

21. Trade receivables and other debit balances21-1

31/12/2011L.E.

31/12/2010L.E.

Trade receivables 85 098 488 88 645 260Notes receivable 13 471 327 8 823 488Impairment in trade receivables(21-2) (41 629 087) (44 207 497)

56 940 728 53 261 251Suppliers – advance payments 37 518 379 29 576 922Tax Authority – withholding tax 19 477 401 20 198 461Other debit balances 12 286 008 14 653 445Accrued revenues 195 149 5 303 608Prepaid expenses 3 795 844 2 875 581L/G’s margin 15 000 264 072Deposits with others 1 029 453 1 191 814Employees imprests 266 992 364 361Customs authority - 124 296

131 524 954 127 813 811Impairment in debtors & other debit balances (5 862 259) (5 652 359)

125 662 695 122 161 452




21-2 Impairment in Receivables

31/12/2011L.E.

31/12/2010L.E.

Balance at beginning of the year (44 207 497) (49 642 406)Formed during the year - (3 229 809)Impairment reversed 2 578 410 7 515 137Utilized during the year - 1 149 581Balance at the year end (41 629 087) (44 207 497)

22. Cash at banks & in hand

31/12/2011L.E.

31/12/2010L.E.

*Banks - time deposits 1 141 504 1 487 683Banks - current accounts 5 972 400 4 056 161**Checks under collection 4 345 746 1 634 833Cash in hand 3 290 128 484 919

14 749 778 7 663 596

* Banks – time deposits represents in banks deposits at banks that is not exceed three months period.

** Checks under collection represents checks which its due date till 31/12/2011.

23. Provision for Contingency


L.E.

Additionsduring the year

L.E.

Used during the yearL.E.

No longer required

L.E.


L.E.Provision for Contingency

11 884 884 7 000 - (10 533 804) 1 358 080

24. Provision for Claims

31/12/2011L.E.

31/12/2010L.E.

Balance at the beginning of the year 61 223 190 34 196 287Acquisition during the year - 38 765Formed during the year 8 987 454 33 357 333Transfer from credit balance - 196 068Used during the year (47 399) (65 263)Not longer required for the year (9 880 616) (6 500 000)Balance at year end 60 282 629 61 223 190

25. Banks – Credit FacilitiesThis item amounting to L.E 212 975 682 (against to LE.54 673 132 at 31/12/2010) is represented in the value of the used portion of the bank facilities granted by banks dealing with the company amounted to L.E. 673million at an average interest rate between 10 % and 11.45% annually on facilities granted in the Egyptian currency obtained by the company with regard to these facilities granted in U.S Dollars the interest rate would be varying from 1%to 2.5 % annually in addition to the labor including the commission of the highest debit balance for various guarantees that the banks obtained for the facilities were granted to the group




26. Trade payables and Other Credit Balances

31/12/2011L.E.

31/12/2010L.E.

Suppliers & contractors 55 707 550 44 797 338Notes Payable 17 771 976 9 732 166Customers – credit balances 7 158 162 22 922 432Other credit balances 8 251 992 10 936 052Accrued expenses 26 692 781 27 909 379Tax Authority 3 478 163 3 564 766Deposits from others 5 020 105 3 880 415Installments of sales tax due within one year 1 155 662 1 124 163Employees & Board Dividends payable 8 511 104 5 403 691Shareholders’ Dividends payable 162 738 162 738Social insurance Authority 2 373 691 2 038 521Employees and service fund 2 314 230 803 590Advanced revenue 1 779 32 005* Early retirement 4 786 765 5 428 258

143 386 698 138 735 514

* The board of directors decided on his meeting in 17-1-2010 the approval of the employees retirement system regarding the

employees in region El-saf with an amount of LE 5.5 million starting from year 2011.

** An amount of LE 641 493 was paid to employees resigned through 2011.

27. Deferred Tax Assets / Liabilities27.1 Deferred Tax Liabilities

Deferred Liabilities31/12/2011

L.E.

Deferred Liabilities31/12/2010

L.E.Deferred Tax Liabilities balance at year beginning 23 648 418 20 270 890 Fixed assets Deferred tax – liability 3 802 563 3 183 704 Adjustments on retained earnings - 193 824 Net tax deferred tax Liability 3 802 563 3 377 528 Deferred Tax Liabilities balance at year end 27 450 981 23 648 418

27.2 Unrecognized deferred tax assets Deferred tax assets have not been recognized in respect of the following item:

31/12/2011L.E.

31/12/2010L.E.

Impairments in trade receivable 8 325 817 8 841 500Impairments in debtors 1 172 452 1 130 472Provision for contingencies 271 616 1 247 542

9 769 885 11 219 514

Deferred tax assets have not been recognized in respect of the above items as it is not probable that future taxable profit will be available against which the company can utilize the benefits there from.




28. Financial Instruments and Related Risk ManagementCredit risk

Exposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Carrying amountNote 31/12/2011 31/12/2010

Other Investments 19 129 697 622 214 524 899Cash and cash equivalents 22 14 749 778 7 663 596Credit facilities 25 212 975 682 54 673 132Loans 35 401 550 772 345 240 086

The maximum exposure to credit risk for trade and receivables at the reporting date by type of counterparty was:

Carrying amount31/12/2011 31/12/2010

Trade and Receivables 98 569 815 97 468 748

Impairment losses The aging of trade and receivables at the reporting date was:

Gross Impairment31/12/2011

L.E.31/12/2010

L.E.Past due 45 days 36 386 092 34 680 807Past due 90 days 18 847 484 17 891 812Past due 180 days 2 226 168 1 072 159More than one year 41 110 071 43 823 970

98 569 815 97 468 748

The allowance accounts in respect of receivables and held-to-maturity investments are used to record impairment losses unless the Company is satisfied that no recovery of the amount owing is possible; at that point the amounts considered irrecoverable and is written off against the financial asset directly. At 31 December 2011 the Company does not have any collective impairment on its receivables or its held-to-maturity investments.

Liquidity riskThe following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Carrying amountContractual cash

flowsSecured bank loans 401 550 772 541 500 000Credit facilities 212 975 682 755 000 000




Currency riskExposure to currency riskThe Group’s exposure to foreign currency risk was as follows based on notional amounts:

USD Euro GBP31 December 2011

Receivables & other debit balances 3 562 956 - -Suppliers & credit balances (37 077) (16 202) (1 100)Cash and cash equivalents 89 124 49 892 10 373Credit facilities (288 465) (1 206) -31/12/2011 3 326 538 32 484 9 27331/12/2010 (22 248) (6 759 911) 10 076

The following significant exchange rates applied during the year: Reporting date

Average rate Closing rate31/12/2011 31/12/2010 31/12/2011 31/12/2010

Euro 8.24 7.51 7.63 7.86USD 5.92 5.42 6.02 5.82

29. Contingent LiabilitiesIn addition to the amounts considered as part of the consolidated balance sheet, there are other contingent liabilities at 31/12/2011 representing amounts against uncovered portion of L/G’s issued by the banks on behalf of the group for the benefit of others. And in addition to the uncovered part of letter of credits existent at year end, the following are contingent liabilities:-

31/12/2011L.E.

31/12/2010L.E.

Letters of guarantee 12 167 092 7 177 285Letters of Credits 56 289 469 52 622 492guarantees for credit facilities granted to subsidiaries 321 462 647 303 967 466

389 919 208 363 767 243

30. Capital CommitmentThe company’s capital commitments at the consolidated balance sheet date are:

31/12/2011L.E.

31/12/2010L.E.

Unpaid capital contribution in investments in subsidiaries which are not yet due

4 016 250 37 500

Commitments to incur capital expenditure 97 552 261 52 389 503101 568 511 52 427 003




31. Group CompaniesThe following represents subsidiaries of Cairo Poultry Company that are acquired and controlled by the Company as at 31/12/2011 demonstrated alongside with its contribution percentage held as at the consolidated balance sheet date:

Subsidiary nameContribution Percentage Country

New Cairo Poultry Company 96.82 EgyptCairo Poultry Processing 99.97 Egypt• Misr Grand Parents Co 94.76 Egypt• Cairo Grand Parents Co. 96.42 Egypt• Cairo Feed Company 99.97 Egypt• Cairo Broilers Company 99.97 Egypt• Cairo Misr Grand Parents Co. 95.10 Egypt Cairo for Oil Extraction 99.92 Egypt Cairo Cold Stores 99.92 Egypt• Corporation Guard Services 67.33 Egypt• Cairo Leasing Company 99.92 Egypt• Wadi Al Natron for Parent Company 99.92 Egypt• Wadi Al Natron for Broilers Production Co. 99.92 Egypt New Cairo Grand Parents Co. 99.92 Egypt Wadi Al Natron for Grand Parent Company 99.92 Egypt- Cairo Reyer Eggs Company 99.36 Egypt- Cairo Feed Trading 84.95 Egypt** Cairo for trading and importing 50.98 Egypt• Cairo Poultry company for Broilers •Al madena for Poultry Production-indirect share (Talaea)

99.9699.97

EgyptEgypt

•Al madena Poultry(Almadena) - indirect share 99.97 Egypt

• The financial statement of the companies referred to above represent 31.44% of total consolidated assets, 27.21% of total

consolidated liabilities, 35.25% of total consolidated revenue and 32.05% of total consolidated expenses of the financial year

ended 31 December 2011.

* Cairo Feed Ingredients Trading was temporarily discontinued from practicing its trading activities according to the decision of the

board of director dated 21 February 2007.

** Net assets of Cairo for trading and importing Company as at 31 December 2011 amounted L.E 8 767.

- The Group’s management is of the opinion that there is no necessity to consolidate the above mentioned companies

whether it is solely or consolidated as its effect will not be significant to the consolidated balance sheet either on group

performance or on its cash flows at that date.

- Cairo Reyer Eggs Company was put under liquidation according to the company’s ordinary meeting on 23/1/2010.

- Cairo for Oil Extraction & Cairo Cold Stores companies were put under liquidation according to the company’s ordinary

meeting on 5/7/2010.

- New Cairo Grand Parents & Wadi Al Natron for Grand Parent Companies were put under liquidation according to the

company’s ordinary meeting on 22/2/2011




32 Related Parties TransactionThe related parties are represented in the shareholders of the Company and the Companies in which they directly own shares on it, which gives them a significant influences or great control over these companies.

The following presents a brief summary of important transactions made between the Company and its related parties during the year:

32-1 Due from Related Parties

Name of the CompanyNature of

transactions

Volume of transactions during the

year


L.E.


L.E.

The Egyptian Company for Starch & Glucose Materials Purchases

1 072 801 63 181 394 520 644

Americana Kuwait Meet sector Frozen chicken sales

19 300 212 2 131 557 3 601 333

Americana Kuwait restaurants sector Frozen chicken sales

- - -

Americana Egypt for Stores & Cool Stores Current account - 9 351 4 413

Cairo feed ingredients trading

Payment of expenses on behalf of the company

152 210 308 365 156 154

Egyptian Company for touristic projects Sales 194 135 234 31 042 163 40 798 104Beafy Sales - - 31 271Americana group for food and beverages Sales - 5 331 - Green Land 715 000 661 480 -

97 339 641 45 111 919

33-2 Due to Related Parties

Name of the CompanyNature of

transactions

Volume of transactions during the

year



Cairo Reyer Breeding Company Current account - 744 166 763 371

Farm Frites CompanyNew materials

Purchases3 655 890 282 834 460 135

New Cairo Trading & Importing Company

Payment of expenses on behalf of the

company

9 201 478 9 679

Americana group for food and beverages Current account 51 701 24 554 - Kuwaiti Company for Food Current account - 10 274 4 718 501 Cairo for Oil Extraction Current account - 109 249 110 249 Cairo Cold Stores Current account - 109 249 110 249 El Delta Trading and Importing Current account 21 146 228 854 - Beafy Current account 15 15 - Americana for cans Current account 74 802 3 198 - Arab Company for cold stores & transporting Cars rent - - 155

1 512 871 6 172 339


33. Capital33-1 Authorized capital

The Company’s authorized capital is determined to be L.E. 1 000 000 000 (One Billion Egyptian Pound).

33.2 Issued and paid up capitalThe holding company’s issued and fully paid up capital is L.E 290.304 million is distributed over 145.152 million shares at a nominal value of L.E. 2 each.

34. Special reserve – Change in value of investments available for saleNotes

No.31/12/2011

L.E.31/12/2010

L.E.The balance at the beginning of the year 135 214 004 134 291 839Add:Change in value of investments available for sale at year end (19-2) (85 946 277) 922 165Balance at the end of the year 49 267 727 135 214 004

35. Long Term LoansLong term

loansL.E.

Long term loans Current portion

L.E.

TotalL.E.

Balance of the loans granted by group of domestic Banks 300 010 406 101 540 366 401 550 772

Balance as at 31/12/2011 300 010 406 101 540 366 401 550 772Balance as at 31/12/2010 277 463 033 67 777 053 345 240 086

36. Earnings Per ShareEarning per share for the year was determined by using the weighted average method for the outstanding number of shares during the years, as follows:

Year ended31/12/2011

L.E.

Year ended31/12/2010

L.E.Net profit for the year 189 740 360 227 963 711Outstanding shares 145 152 000 145 152 000Earnings per share (L.E / share) 1.31 1.57

37. Economical & political eventsThe Arab Republic of Egypt has encountered certain events through 2011 that have a significant impact on the economic sectors in general, a matter which may lead to a substantial decline in the economic activities in the foreseeable future. Therefore, there is a possibility that the above mentioned events will have a significant impact on the Company’s assets, liabilities, their recoverable/settlement amounts and the results of operations in the foreseeable future. At the present, it is not possible to quantify the effect on the Company’s assets and liabilities included in the company’s financial statements, since quantifying the effect of these events relies on the expected extent and the time frame, when these events and their consequences, are expected to be finished.




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Cairo Poultry Company

32H Mourad St., GizaP.O. Box 42 Giza, Egypt

Tel: + (202) 3570 7694 - 3571 4124Fax: + (202) 3570 7716

www.cpg.com.eg

cairo poultry company annual report...

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