AGTHIA Group — Regulatory Filings 2016

Jul 31, 2016

AGTHIA GROUP PJSC

Condensed consolidated interim financial information for the period ended 30 June 2016

Principal business address:

PO Box 37725 Abu Dhabi United Arab Emirates

Report and condensed consolidated interim financial information for the period ended 30 June 2016

	Page
Director's report
Independent auditor's report on review of condensed consolidated interim financial information	1
Condensed consolidated interim statement of profit or loss	2
Condensed consolidated interim statement of comprehensive income	3
Condensed consolidated interim statement of financial position	4
Condensed consolidated interim statement of changes in equity	6
Condensed consolidated interim statement of cash flows	7
Notes to the condensed consolidated interim financial information	8

Directors' Report

Dear Shareholders,

As anticipated, the second quarter continued the Group's positive growth momentum both in profit and revenues, propelling six-month net profit to AED 145 million, 16 percent higher than the same period a year ago. Net revenues for six months reached AED 1.04 billion, representing 15 percent growth over last year, driven mainly by Water and Feed despite persistent macro-economic and competitive challenges. Gross margin was 34.9 percent, up from 32.3 percent a year ago. The balance sheet remains strong and healthy, and the Company generated positive operating cash flow in the period.

We have shown strong progress in the execution of our new growth strategy in the second quarter. As part of our regional expansion plans, we entered into a joint venture with Kuwait's Al Wafir Marketing Services Company K.S.C.C. in May in order to establish a water bottling plant in Kuwait. The plant is expected to commence operations by the second half of 2017 and will produce Al Ain water. At the end of June we signed a 25 year lease agreement with Abu Dhabi Ports for an adjacent 85,700 square-meter plot of land in order to expand our Grand Mills Flour and Animal Feed facilities at Zaved Port.

Business Review

Flour

Our Flour business posted net revenues of AED 230 million, 3 percent growth (1 percent excluding trading) versus a year ago.

• $\bullet$ Exports continued their strong growth momentum; with the addition of Saudi Arabia early this year, where initial consumer acceptance is encouraging, our business almost doubled in size versus a year ago. We are planning to enter Bahrain and Oman in the third quarter.
• Gross profit margin has improved mainly on account of lower commodity prices.
• We continued strengthening our presence in the B2C (retail) segment, reaching 33 percent in the April-May period from 24 percent at the beginning of the year, as a consequence of our relentless focus on distribution and visibility.
• Economic headwinds began to adversely affect our B2B segment although we managed to mitigate the impact by continuously attracting new customers. Nevertheless, competitive pricing in the market including cheaper imported products has negatively affected overall flour performance in domestic market resulting in 3 percent lower revenue in the first half of the year in comparison to the same period last year.

commitment to quality, naturally

Animal Feed

The Animal Feed business posted net revenues of AED 360 million, growing 7 percent (5 percent excluding trading) versus a year ago.

• Pricing continued to be lower than last year as a result of soft commodity prices.
• We have enhanced our product performance through improved formulation which received positive response from customers.

Water & Beverages

The Water & Beverages business, consisting of bottled and 5-gallon water under the Al Ain Water, Alpin, Al Bayan and Ice Crystal brands, fruit juices under the Capri Sun brand, and fresh juice under the AI Ain brand, posted halfyear net revenues of AED 362 million, growing by 26 percent over the same period last year.

• The Water segment continues to be the growth engine of the Group. At AED 321 million net revenue, the water business grew by 31 percent. Ongoing expansion in distribution supported by various consumer activities (that were additionally stimulated in Ramadan) have been major enablers to this outstanding performance.
• Al Ain bottled water maintained its market leadership both in terms of volume and value, increasing value share by 110 basis points (since the beginning of the year) to 20.6 percent in the April-May period.
• Organic growth (excluding Al Bayan) was 15 percent, well ahead of underlying category growth in the UAE. $\bullet$ Meanwhile, the Al Bayan business has performed very well, and as we advance further in capturing planned synergies it will contribute more to our future growth.
• $\bullet$ Shipments and revenue of Alpin, the natural mineral water produced in our own manufacturing facilities in Turkey and imported to the UAE, has more than doubled versus the same period last year. In the meantime, our domestic Alpin business in Turkey continues its accelerated volume and revenue growth trajectory registering 27 percent top line growth year-on-year.
• After consistently growing for more than a year, within a contracting category, owing to new variants and $\bullet$ brand support activities, lower consumer offtake in June exacerbated by school holidays and the Ramadan season led Capri Sun fruit juice revenues to decline year-on-year. We expect to return to positive territory by as soon as the third quarter, following the recent launch of the Big Pouch for youngsters, the upcoming new product launch and the Ice Age promotion linked to the movie in addition to other planned back-toschool activities.
• Al Ain Fresh Juice in 330ML PET bottle was launched in July in five variants. Additional variants are planned the Ag omiss to be introduced in quarter four.

A total commitment to quality naturally

Dairy (Yogurt)

The Dairy business, under the Yoplait brand mainly in the kids and fruit yogurt segments, posted AED 16 million net revenue in the first half, growing 37 percent year-on-year.

• Gross profit margin at 33 percent improved by more than 800 basis points over last year also as a result of lower milk powder prices.
• Net losses for the period decreased by 10 percent when compared to the same period last year. Together with growing scale and higher gross profit margin, we expect to continue reducing losses.

Emerging Businesses

Composed of Tomato Paste, Frozen Vegetables, Ambient and Frozen Bakery as well as trading businesses of the Monster energy drink, Date Crown dates and other convenience products, our emerging businesses recorded a half-year net revenue of AED 76 million.

• Our turnaround strategy for these businesses bore fruit, and in aggregate net revenue of this segment grew $\bullet$ 48 percent year-on-year.
• Thanks to improving margins on a higher scale, aggregate losses fell 62 percent to AED 2.5 million in the first half of this year.
• In Egypt, despite the adverse effects of currency devaluation in addition to pricing pressures due to lower commodity prices, net revenue recorded 6 percent growth versus last year. This is mostly driven by exports, and by consistently enhancing B2C segment performance with focused distribution.

SG&A expenses

Group SG&A expenses, including Al Bayan that was not in the base, recorded AED 227 million in the half-year period, a 36 percent increase versus last year (excluding Al Bayan, 23 percent). The overall increase was mainly attributable to investment in marketing and brand building activities, higher distribution costs due to larger volumes shipped, consultancy expenses, employee-related costs including new hirings, and other inflationary increases. Consequently, SG&A expenses as a percentage of sales stood at 21.7 percent, 338 basis points higher than last year (excluding marketing expenses and Al Bayan, SG&A expense ratio to net sales stands at 16.7 percent, 112 basis points higher versus year ago).

Cash flow

The Company generated AED 134 million cash from operating activities in the first half of the year. Cash and cash equivalents and fixed deposits as of 30 June 2016 amounted to AED 559 million. Additionally, the Company maintains sufficient bank credit lines at very competitive pricing to ensure availability of funds in order to cover any short-term working capital requirements.

Unallocated Corporate Items

Under segment reporting, an unallocated assets amount of AED 789 million primarily represents goodwill, intangible assets and cash and bank balances, as the Company's fund management is centralised at corporate level.

Capital Commitments and Contingencies

Capital commitments of AED 70 million mainly relates to our second high-speed water bottling line, warehouse expansion, delivery trucks and other capital items. Bank guarantees and letters of credit of AED 76 million have primarily been issued in favour of the Governmental Authorities and the Company's vendors for the supply of materials and spare parts.

Future Outlook

Despite the market slow-down, we have achieved a very successful first half of 2016 as we embarked on the phased execution of our 2020 profitable growth strategy. In second half we have several activities and initiatives in Water, Juice and Bakery to maintain this growth momentum. However, we have been informed that the Government will implement some changes in the Flour and Animal Feed subsidy program. We are in discussion with the Government and will be in a position to share the details once finalized. While it is difficult to predict the impact of such a policy change at this stage, this will have impact on the performance of both flour and feed businesses.

H.EZRashed Hamad Al Dhaheri Vice Chairman July 31th, 2016

KPMG Lower Gulf Limited PO Box 7613 Abu Dhabi United Arab Emirates

Telephone +971 (2) 401 4800 $+971(2)6327612$ Fax Website www.ae-kpmg.com

Independent auditors' report on review of condensed consolidated interim financial information

The Shareholders Agthia Group PJSC Abu Dhabi, United Arab Emirates

Introduction

We have reviewed the accompanying 30 June 2016 condensed consolidated interim financial information of Agthia Group PJSC and its subsidiaries (collectively referred to as the "Group"), which comprises:

• the condensed consolidated interim statement of financial position as at 30 June 2016;
• $\overline{a}$ the condensed consolidated interim statement of profit or loss for the three-month and six-month period ended 30 June 2016;
• the condensed consolidated interim statement of comprehensive income for the three-month and six -month period ended 30 June 2016;
• the condensed consolidated interim statement of changes in equity for the six-month period ended 30 June 2016;
• the condensed consolidated interim statement of cash flows for the six-month period ended 30 June 2016:
• notes to the condensed consolidated interim financial information.

Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34, 'Interim Financial Reporting'. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying 30 June 2016 condensed consolidated interim financial information is not prepared, in all material respects, in accordance with IAS 34, 'Interim Financial Reporting'.

KPMG Lower Gulf Limited Munther Dajani Registration Number 268 Abu Dhabi, United Arab Emirates

3 1 JUL 2016

$\mathbf{1}$

Condensed consolidated interim statement of profit or loss (unaudited)

	Six	Six	Three	Three
	months	months	months	months
	ended	ended	ended	ended
	30 June	30 June	30 June	30 June
	2016	2015	2016	2015
	AED'000	AED'000	AED'000	AED'000
Revenue	1,044,661	910,914	558,755	475,980
Cost of sales	(680,338)	(617,103)	(366,616)	(319,029)
Gross profit	----------------- 364,323	----------------- 293,811	------------------ 192,139	------------------ 156,951
Selling and distribution expenses	(147,838)	(107,433)	(76,572)	(57,091)
General and administrative expenses	(76,421)	(57,153)	(41,752)	(29,321)
Research and development expenses	(2,588)	(2,230)	(1,284)	(1,172)
Other income, net	4,966	(1,994)	3,415	(1,460)
Operating profit	-------------- 142,442	-------------- 125,001	---------------- 75,946	---------------- 67,907
Finance income	8,686	5,991	4,034	587
Finance expense	(5,721)	(6,023)	(2,053)	(2,749)
Profit for the period before income tax	-------------- 145,407	-------------- 124,969	---------------- 77,927	---------------- 65,745
Income tax	(35)	(28)	(65)	(28)
	--------------	--------------	----------------	----------------
Profit for the period attributable to equity holders of the Group	145,372	124,941	77,862	65,717
Basic and diluted earnings	=======	=======	========	========
per share (AED)	0.242	0.208	0.130	0.110
	=======	=======	=======	=======

The notes set out on pages 8 to 17 form an integral part of these condensed consolidated interim financial information. The independent auditors' report on the review of the condensed consolidated interim financial information is set out on page 1.

Condensed consolidated interim statement of comprehensive income (unaudited)

	Six months ended 30 June 2016 AED'000	Six months ended 30 June 2015 AED'000	Three months Ended 30 June 2016 AED'000	Three months Ended 30 June 2015 AED'000
Profit for the period attributable to equity holders of the Group	145,372	124,941	77,862	65,717
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Foreign currency translation difference on foreign operations	(2,186)	(4,750)	(584)	(493)
Cash flow hedge – effective portion of changes in fair value (net)	(10,381)	-	(9,697)	-
Other comprehensive income	-------------- (12,567)	-------------- (4,750)	-------------- (10,281)	-------------- (493)
Total comprehensive income for the period attributable to equity
holders of the Group	132,805	120,191	67,581	65,224
	=======	=======	=======	=======

Condensed consolidated interim statement of financial position

	Note	30 June 2016 (Unaudited) AED'000	31 December 2015 (Audited) AED'000
Non-current assets Property, plant and equipment Advances for property, plant and equipment	6	1,015,640 5,819	933,491 33,714
Goodwill Intangible assets Other assets	7	188,336 34,648 5,403	188,336 35,454 -
Total non-current assets		--------------------------------------------------------------------- 1,249,846	--------------------------------------------------------------------- 1,190,995
		---------------------------------------------------------------------	---------------------------------------------------------------------
Current assets Inventories	8	317,817	262,032
Trade and other receivables	9	381,903	271,011
Government compensation receivable		91,064	80,103
Cash and bank balances	10	559,066	570,903
Total current assets		----------------------------------------------------------------------- 1,349,850	----------------------------------------------------------------------- 1,184,049
Current liabilities		-----------------------------------------------------------------------	-----------------------------------------------------------------------
Bank borrowings (current portion)	11	331,293	292,815
Trade and other payables	13	425,664	318,431
Due to related parties	14	4,912 ------------------------------------------------------------	513 ------------------------------------------------------------
Total current liabilities		761,869	611,759
Net current assets		------------------------------------------------------------ 587,981	------------------------------------------------------------ 572,290
Non-current liabilities		------------------------------------------------------------	------------------------------------------------------------
Provision for end of service benefits		53,683	49,343
Bank borrowings (non-current portion)	11	165,303	165,303
Deferred tax liabilities Other liabilities		1,321 15,304	918 3,310
		-----------------------------------------------------------------------------	-----------------------------------------------------------------------------
Total non-current liabilities		235,611 -----------------------------------------------------------------------------	218,874 -----------------------------------------------------------------------------
Net assets		1,602,216 ====================	1,544,411 ====================

The notes set out on pages 8 to 17 form an integral part of these condensed consolidated interim financial information. The independent auditors' report on the review of the condensed consolidated interim financial information is set out on page 1.

Condensed consolidated interim statement of financial position (continued)

	30 June 2016 (Unaudited) AED'000	31 December 2015 (Audited) AED'000
X,
Equity
Share capital	600,000	600,000
Legal reserve	121,423	121,423
Translation reserve	(23, 754)	(21, 568)
Hedge reserve	(10, 381)
Retained earnings	914,928	844,556
Total equity	1,602,216	1,544,411

The condensed consolidated interim financial information were approved and authorised by the July 2016 and signed on their behalf by: Board of Directors on 31

Rashed Hamad Al Dhaheri Vice Chairman

Iqbal Hamzah Chief Executive Officer

Fatih Yeldan Chief Financial Officer

The notes set out on pages 8 to 17 form an integral part of these condensed consolidated interim financial information. The independent auditors' report on the review of the condensed consolidated interim financial information is set out on page 1.

Condensed consolidated interim statement of changes in equity (unaudited)

For the six months ended 30 June	Share capital AED'000	Legal reserve AED'000	Translation reserve AED'000	Hedge reserve AED'000	Retained earnings AED'000	Total AED'000
Balance at 1 January 2015	600,000	98,292	(14,952)	-	696,373	1,379,713
Total comprehensive income for the period Profit for the period	-	-	-	-	124,941	124,941
Other comprehensive income: Foreign currency translation difference on foreign operations	-	-	(4,750)	-	-	(4,750)
Total comprehensive income	-------------- -	-------------- -	----------------- (4,750)	----------------- -	--------------- 124,941	---------------- 120,191
Owners' changes directly in Equity Dividend for the year 2014	-------------- -	-------------- -	----------------- -	----------------- -	---------------- (60,000)	------------------- (60,000)
Balance at 30 June 2015	-------------- 600,000 =======	-------------- 98,292 =======	----------------- (19,702) =======	----------------- - =======	---------------- 761,314 =======	------------------- 1,439,904 =========
Balance at 1 January 2016	600,000	121,423	(21,568)	-	844,556	1,544,411
Total comprehensive income for the period Profit for the period	-	-	-		145,372	145,372
Other comprehensive income: Foreign currency translation difference on foreign operations Cash flow hedge – effective portion of changes in fair	-	-	(2,186)	-	-	(2,186)
value (net)	- --------------	- --------------	- -----------------	(10,381) -----------------	- ---------------	(10,381) ----------------
Total comprehensive income	- --------------	- --------------	(2,186) -----------------	(10,381) -----------------	145,372 ----------------	132,805 -------------------
Owners' changes directly in Equity Dividend for the year 2015	-	-	-	-	(75,000)	(75,000)
Balance at 30 June 2016	-------------- 600,000 =======	-------------- 121,423 =======	----------------- (23,754) ========	----------------- (10,381) ========	--------------- 914,928 ========	---------------- 1,602,216 =========

The notes set out on pages 8 to 17 form an integral part of these condensed consolidated interim financial information.

The independent auditors' report on the review of the condensed consolidated interim financial information is set out on page 1.

Condensed consolidated interim statement of cash flows (unaudited)

For the six months ended

		30 June	30 June
		2016	2015
	Note	AED'000	AED'000
Cash flows from operating activities
Profit for the period before income tax		145,407	124,969
Adjustments for:
Depreciation		43,588	39,281
Amortisation of intangible assets		891	-
Finance income		(8,686)	(5,991)
Finance expense		5,721	6,023
(Gain) / loss on sale of property, plant and equipment	6	(144)	24
Movement in provision for slow moving inventory	8	1,599	(204)
Movement in allowance for impairment loss		970	361
Provision for employees' end of service benefits		5,858 ----------------	6,283 ----------------
Operating cash flows before payment for employees' end
of service benefits, changes in working capital		195,204	170,746
Change in inventories	8	(57,384)	79,654
Change in trade and other receivables - net	9	(113,088)	(56,173)
Change in government compensation receivable		(10,961)	1,840
Change in due to related party	14	4,399	(1,309)
Change in trade and other payables	13	106,586	(130,082)
Change in other liabilities - net		10,841	(262)
Operating cash flows before payment for employees' end of service		----------------	----------------
benefits		135,597	64,414
Payment of employees' end of service benefits		(1,518)	(948)
Income tax paid		(35)	(28)
		----------------	----------------
Net cash generated from operating activities		134,044	63,438
Cash flows from investing activities
Advances / acquisition of property, plant and equipment	6	(100,813)	(62,159)
Proceeds from sale of property, plant and equipment	6	998	66
Funds invested in fixed deposits		(1,557)	(63,094)
Interest received		6,064 ----------------	4,973 ----------------
Net cash used in investing activities		(95,308)	(120,214)
Cash flows from financing activities		----------------	----------------
Bank borrowings – net	11	38,478	135,308
Interest paid		(5,157)	(5,644)
Dividend paid		(75,000)	(60,000)
		----------------	----------------
Net cash flows (used in) / from financing activities		(41,679)	69,664
(Decrease) / increase in cash and cash equivalents		---------------- (2,943)	---------------- 12,888
Cash and cash equivalents as at 1 January		44,155	38,985
Cash and cash equivalents as at 30 June	10	---------------- 41,212	---------------- 51,873
		========	========

The notes set out on pages 8 to 17 form an integral part of these condensed consolidated interim financial information.

The independent auditors' report on the review of the condensed consolidated interim financial information is set out on page 1.

Notes to the condensed consolidated interim financial information

1 Legal status and principal activities

Agthia Group PJSC (the "Company") was incorporated as a Public Joint Stock Company pursuant to the Ministerial Resolution No. 324 for 2004. General Holding Corporation PJSC (SENAAT) owns 51% of the Company's shares. The principal activities of the Company are to establish, invest, trade and operate companies and businesses that are involved in the food and beverage sector.

The condensed consolidated interim financial information of the Company as at and for the six months ended 30 June 2016 comprise the Company and its below mentioned subsidiaries (together referred to as the "Group").

	Country of Incorporation	Share of equity (%)		Principal
Subsidiary	and operation	2016	2015	Activity
Grand Mills Company PJSC	UAE	100	100	Production and sale of flour and animal feed.
Al Ain Food and Beverages PJSC (AAFB-UAE)	UAE	100	100	Production and sale of bottled water, flavored water, juices, yogurt, tomato paste, frozen vegetables and frozen baked products.
Agthia Group Egypt LLC (Agthia Egypt)	Egypt	100	100	Processing and sale of tomato paste, chilli paste, fruit concentrate and frozen vegetables.
Agthia Grup Icecek ve Dagitim Sanayi ve Ticaret Limited Sirketi (Agthia Turkey)	Turkey	100	100	Production, bottling and sale of bottled water.
Al Bayan Purification and Potable Water LLC	UAE	100	-	Production, bottling and sale of bottled water.
Shaklan Plastic Manufacturing Co. LLC	UAE	100	-	Production of plastic bottles and containers
Al Manal Purification and Bottling of Mineral Water LLC	Oman	100	-	Production, bottling and sale of bottled water.

Notes to the condensed consolidated interim financial information (continued)

2 Statement of compliance

These condensed consolidated interim financial information have been prepared in accordance with International Financial Reporting Standards (IFRS) IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual consolidated financial information, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2015.

3 Significant accounting policies

The accounting policies and methods of computation applied by the Group in these condensed consolidated interim financial information are the same as those applied by the Group in the consolidated financial statements as at and for the year ended 31 December 2015 except for adoption of accounting policy for cash flow hedges.

The adoption of the new and amended standards and interpretations did not have any impact on the financial position or performance of the Group during the period.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in the hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.

The amount accumulated in equity is retained in OCI and reclassified to profit or loss in the same period or periods during which the hedged forecast cash flows affects profit or loss or the hedged item affects profit or loss.

If the forecast transaction is no longer expected to occur, the hedge no longer meets the criteria for hedge accounting, the hedging instrument expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the amount accumulated in equity is reclassified to profit or loss.

Functional and presentation currency

These condensed consolidated interim financial information are presented in United Arab Emirates Dirhams ("AED"), which is the functional currency, rounded to the nearest thousand.

Government compensation

Funds that compensate the Group for selling flour and animal feed at subsidised prices in the Emirate of Abu Dhabi are recognised in the condensed consolidated interim statement of profit and loss, as a deduction from the cost of sales, on a systematic basis in the same period in which the sales transaction is affected.

Cost of sales as stated in the condensed consolidated statement of profit and loss is after the deduction of Abu Dhabi Government compensation amounting to AED 173,667 thousand (30 June 2015: AED 205,578 thousand). The purpose of the compensation is to partially reduce the impact of increased and volatile global grain prices on food retail prices for the consumers in the Abu Dhabi Emirate.

Notes to the condensed consolidated interim financial information (continued)

4 Estimates

The preparation of condensed consolidated interim financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial information, the significant judgment made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements as at and for the year ended 31 December 2015.

5 Financial risk management

The Group's financial risk management objectives and processes are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2015.

6 Property, plant and equipment

Acquisitions and disposals

During the six months period ended 30 June 2016, the Group invested in property, plant and equipment for a net amount of AED 100,813 thousand (30 June 2015: AED 62,159 thousand) of which acquisition of assets amounted to AED 128,708 thousand and advances released amounted to AED 27,895 thousand (30 June 2015: assets acquired AED 61,570 thousand and advances paid of AED 589 thousand).

Assets with a carrying amount of AED 854 thousand were disposed off during the six months period ended 30 June 2016 (30 June 2015: AED 90 thousand), resulting in a gain of AED 144 thousand (30 June 2015: loss of AED 24 thousand) which is included in net other income.

Furthermore, the depreciation charge on property, plant and equipment during the six months period ended 30 June 2016 amounted to AED 43,588 thousand (30 June 2015: AED 39,281 thousand).

7 Goodwill

For the purpose of impairment testing, goodwill is allocated to two operating segments within the Group where goodwill is monitored for internal management purposes. Impairment testing is conducted on an annual basis.

8 Inventories

During the six months period ended 30 June 2016, the Group recorded a provision for slow, non moving and obsolete inventory of AED 2,971 thousand (30 June 2015: AED 1,286 thousand). The charge is included in cost of sales.

Furthermore, the Group has written off a provision for slow, non moving and obsolete inventory of AED 1,372 thousand (30 June 2015: AED 1,490 thousand).

Notes to the condensed consolidated interim financial information (continued)

9 Trade and other receivables

	30 June	31 December
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Audited)
Trade receivables - net	302,378	202,045
Prepayments	55,317	46,387
Other receivables	24,208	22,579
	---------------------------------------- 381,903	---------------------------------------- 271,011
	================	================

10 Cash and bank balances

Cash and cash equivalents in the condensed consolidated interim statement of cash flows:

	30 June	30 June	31 December
	2016	2015	2015
	AED'000	AED'000	AED'000
Cash in hand	2,015	1,134	920
Current and savings account	66,234	109,935	80,723
Cash and bank balances	----------------------------------------- 68,249	----------------------------------------- 111,069	----------------------------------------- 81,643
Bank overdraft Escrow account (for dividend	-	-	(10,358)
distribution 2009 to 2014)	(27,037) -----------------------------------------	(59,196) -----------------------------------------	(27,130) -----------------------------------------
Cash and cash equivalents in the
statement of cash flows	41,212 ================	51,873 ================	44,155 ================
Cash and bank balances	68,249	111,069	81,643
Fixed deposits	490,817	540,746	489,260
	----------------------------------------- 559,066	----------------------------------------- 651,815	----------------------------------------- 570,903
	================	================	================

Fixed deposits above are for a period not more than one year (30 June 2015: up to one year) carrying interest rates varying from 2.15%-3.10% (30 June 2015: 1.50%-2.25%).

Escrow account represents amounts set aside for payment of dividend. Equivalent amount has been recorded as liability in trade and other payables. This restricted cash balance has not been included in the cash and cash equivalents for the purpose of cash flow statements

11 Bank borrowings

This note provides information about the contractual terms of the Group's interest bearing loans and borrowings, which are measured at amortised cost.

Notes to the condensed consolidated interim financial information (continued)

11 Bank borrowings (continued)

	30 June	31 December
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Audited)
Credit facilities	300,751	245,723
Short term loan	30,542	36,734
Bank overdraft	-	10,358
	----------------------------------------- 331,293	----------------------------------------- 292,815
Non-current liabilities	================	================
Term loan***	165,303	165,303

Terms and repayment schedule

Amounts in AED'000				30 June	2016	31 December 2015
	Currency	Interest Rate	Year of maturity	Facility value/ limit	Carrying amount	Facility value/ limit	Carrying amount
Short term loan	USD/ AED/ EGP	LIBOR / EIBOR / mid corridor rate + margin*	2016	121,416	30,542	123,893	47,092
Credit Facility**	USD/ AED/ EGP	LIBOR / EIBOR/ mid corridor rate+ margin*	2016	687,953	292,785	712,953	243,747
Credit Facility (Capex)**	USD/ AED	LIBOR/ EIBOR + margin*	2016	50,000	7,966	25,000	1,976
Term loan***	USD	LIBOR + margin*	2020	165,303	165,303	165,303	165,303
Total				----------------------------------------- 1,024,672	-------------------------------------------- 496,596	----------------------------------------- 1,027,149	-------------------------------------------- 458,118

==========

==========

================ ================= ================ ================= * Margin on the above loans and facilities varies from 0.50% - 1.25% (2015: 0.40% - 1.25%).

**Credit facility of face value AED 350,000 thousand and credit facility (Capex) of face value AED 50,000 thousand is secured by a floating charge over the current assets, stock and receivables of the Group.

*** During 2015, the Group availed a loan of AED 165,303 thousand for a tenure of five years. The loan is secured by floating charges over the current assets, inventories and receivables of the Group.

Notes to the condensed consolidated interim financial information (continued)

12 Segment reporting

Information about reportable segment for the six months ended 30 June

The Group has two reportable segments, as described below. The reportable segments offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Board of Directors review internal management reports on at least quarterly basis.

The following summary describes the operations in each of the Group's reportable segment:

• Agri Business Division (ABD)

• o Flour and Animal Feed, includes manufacturing and distribution of flour and animal feed.
• Consumer Business Division (CBD)
• o Bottled Water and Beverages includes manufacturing and distribution of drinking water, water based drinks and juices.
  • o Business operation in Turkey is of similar nature as "Bottled Water" hence it is also reported under CBD.
  • o Business operation of Al Bayan is manufacturing and distribution of drinking water, hence, it is also reported under CBD.
• o Food includes manufacturing and distribution of tomato and chilli paste, fruit concentrate, frozen vegetables, fresh dairy products and frozen baked products.
  • o Business operation in Egypt is of similar nature as "Food" hence it is also reported under CBD.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit, as included in the internal management reports data reviewed by the Group's CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis.

Notes to the condensed consolidated interim financial information (continued)

12 Segment reporting (continued)

Segment wise operating results of the Group, for the six months period are as follows:

	Agri Business Division (ABD)				Consumer Business Division (CBD)
	Flour and		Bottled Water and
	Animal Feed		Beverages		Food		CBD Total			Total
	30 June 2016 AED'000	30 June 2015 AED'000	30 June 2016 AED'000	30 June 2015 AED'000	30 June 2016 AED'000	30 June 2015 AED'000	30 June 2016 AED'000	30 June 2015 AED'000	30 June 2016 AED'000	30 June 2015 AED'000
External revenues	589,631	560,035	363,607	289,213	91,423	61,666	455,030	350,879	1,044,661	910,914
Inter segment revenue Gross profit	------------------- 181,379 -------------------	------------------- 167,487 -------------------	------------------- 179,267 -------------------	------------------- 128,828 -------------------	------------------- 12,222 -------------------	------------------- 3,955 -------------------	--------------- 191,489 ---------------	--------------- 132,783 ---------------	-------------- 372,868 --------------	-------------- 300,270 --------------
Reportable segment profit/(loss)	139,084	126,907	64,682	48,150	(7,834)	(12,681)	56,848	35,469	195,932	162,376

Notes to the condensed consolidated interim financial information (continued)

12 Segment reporting (continued)

Reconciliations of reportable segments' profit or loss

For the six months period ended

Gross profit for the six months period ended

	30 June	30 June
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Unaudited)
Total gross profit for reportable segments Unallocated amounts	372,868	300,270
Other operating expenses	(8,545) ---------------	(6,459) ---------------
Consolidated gross profit for the period	364,323 =======	293,811 =======
Profit for the six months period ended
Total profit for reportable segments Unallocated amounts	195,932	162,376
Other operating expenses	(53,319)	(41,357)
Net finance income	2,759 ---------------	3,922 ---------------
Consolidated profit for the period	145,372 =======	124,941 =======
Reportable segment assets and liabilities are as follows:
	30 June	31 December
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Audited)
Segment Assets
Agri Business Division	642,494	537,753
Consumer Business Division	1,163,007 --------------------	1,051,064 --------------------
Total assets for reportable segment	1,805,501	1,588,817
Other unallocated amounts	788,792 ---------------------	786,227 ---------------------
Consolidated total assets	2,594,293	2,375,044
Segment Liabilities	==========	==========
Agri Business Division	213,855	143,763
Consumer Business Division	224,224 --------------------	161,851 --------------------
Total liabilities for reportable segment	438,079	305,614
Other unallocated amounts	553,998 --------------------	525,019 --------------------
Consolidated total liabilities	992,077	830,633
	==========	==========

Notes to the condensed consolidated interim financial information (continued)

13 Trade and other payables

	31 March	31 December
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Audited)
Trade payables	200,904	119,719
Accruals	153,380	128,119
Other payables	71,380	70,593
	----------------------------------------- 425,664	----------------------------------------- 318,431
	================	================

14 Transactions with related parties

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. Related parties comprise the major shareholder, key management personnel, Board of Directors and their related companies. In the normal course of business, the Group had various transactions with its related parties. Transactions are entered into with the related parties on terms and conditions approved by either the Group's management, or its Board of Directors.

a) Key management personnel compensation

Key management personnel compensation for the six months period was as follows:

	30 June 2016	30 June 2015
	AED'000	AED'000
Short term employment benefits	11,421	7,320
Long term employment benefits	2,441	1,887
	---------------	---------------
	13,862	9,207
	=======	=======

b) Due to and transactions with related parties

	30 June	31 December
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Audited)
General Holding Corporation PJSC (SENAAT)
Opening balance 1 January	411	1,373
Directors and committee members' fees charged	-	9
Other expenses	117	604
Payments	(411) -----------------------------------------	(1,575) -----------------------------------------
Closing balance	117	411
	================	===============

Notes to the condensed consolidated interim financial information (continued)

Transactions with related parties (continued)

b. Due to and transactions with related parties (continued)

	30 June	31 December
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Audited)
Al Foah Company LLC
Opening balance 1 January	102	-
Local purchases	10,915	8
Other expenses	-	102
Payments	(6,222) -----------------------------------------	(8) -----------------------------------------
Closing balance	4,795 ================	102 ================

15 Contingent liabilities and capital commitments

	30 June	30 June
	2016	2015
	AED'000	AED'000
	(Unaudited)	(Audited)
Bank guarantees and letters of credit	75,732	76,363
Capital commitments	======== 70,481	======== 59,015
	========	========

16 Dividends

At the Annual General Meeting held on 24 March 2016, shareholders' approved payment of AED 75,000 thousand (2015: AED 60,000 thousand) as cash dividend for the year ended 31 December 2015 which represents 12.5% (2015: 10%) of the issued and paid up capital of the Group.