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Notes to the Consolidated Financial Statements
for the financial year ended December 31, 2017
1. Reporting entity
GBAuto Co. is an Egyptian joint stock company incorporated on 15 July 1999 under the name of GBCapital for Trading
andCapital Lease and under LawNo. 159 of 1981, andwas registered in the commercial register under No. 3422, Cairo.
Based on the decision of the Extraordinary General Assembly Meeting held on 26 April 2007, it has been agreed to
change theCompany’s name tobeGBAuto.This amendmentwas registered in the commercial register on23May 2007.
The company is domiciled in the Industrial Zone –AbouRawashKilometer 28 Cairo –AlexandriaDesert Road, Arab
Republic of Egypt.
The company and its subsidiaries (will be referred to as “theGroup”)main activities include trading, distributing and
marketing of all transportationmeans including heavy trucks, semi-trucks, passenger cars, buses, mini buses, micro
buses, agriculture tractors, pick-ups, mechanical tools equipment for sail movement andmotors with their different
structures and types whether locally manufactured and imported new and used ones and trading in spare parts,
accessories whether locally manufactured or imported and tires for vehicles and equipment whether locally manu-
factured or imported. The Group also undertakes import and export activities, selling locally manufactured and
imported products for cash, on credit or through finance leasing andmicrofinance. Also trade in all goods including
light truck and sale by instalments and provide services of factoring and nonbanking financial services. The factor-
ing services intended to buy existing and future rights of sellers of goods and services and provide related services.
Themajor shareholders of the company are Dr. Raouf Ghabbour and his family who collectively owns approximately
60.6% of the Company’s shares as at December 31, 2017.
The consolidated financial statements were authorized for issue by the Company’s Board of Directors onMarch 4, 2018.
2. Basis of preparation of consolidated financial statements
The consolidated financial statements have been prepared in accordance with an updated Egyptian Accounting
Standards (EAS) issued as per the decree of the minister of investment No. 110 for the year 2015, issued on 9 July 2015
and effective for financial years commence on 1st January 2016 and the related Egyptian laws and regulations.
3. Functional and presentation currency
The consolidated financial statements are presented in Egyptian Pounds which is the Group’s functional currency.
4. Use of judgement and estimates
In preparing the consolidated financial statements in accordancewith EgyptianAccounting Standards (EAS), man-
agement has made judgements, estimates and assumptions that affect the application of the Group’s accounting
policies and the reported amounts of assets, liabilities, income and expenses. These estimates and assumptions are
based on past experience and various factors. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
The recognition of the change in accounting estimates in the period in which the change in estimate, if the change
affects only that period, or in the period of change and future periods if the change affects both.
A. Measurement of fair value
The fair value of financial instruments determines based on the market value of a financial instrument or similar
financial instruments at the date of the financial statements without deducting any estimate future costs of sale.
The financial asset values determine at current prices for the purchase of those assets, while determining the value of
financial liabilities at current prices, which could be settled by those commitments.
In the absence of an active market to determine the fair value of financial instruments, the fair value is estimated
using various valuation techniques, taking into consideration the transactions price that has recently or be guided
by the current fair value of other instrumentswhich is substantially similar. Or the use of discounted cash flowor any
other evaluatingmethod that leads to results can rely on it.
When using the discounted cash flowmethod as a way for the evaluation, the future cash flows are estimated based
on the best estimates of management. And determined the discount rate used in the prevailing market price at the
date of the financial statements of financial instruments are similar in nature and terms.
5. Operating segments
TheGrouphas the following four operational segments, which are its reportable segments to topmanagement.These
segments offer different products and services, and are managed separately because they require different technol-
ogy andmarketing strategies.
The following summery describes the operations for each reportable segments:
Reportable segment
Operations
Passenger car
Trading, distributing and marketing for all kinds of passenger cars, whether locally
manufactured or imported.
Buses and trucks
Trading, distributingandmarketing for all kindsof heavy trucks, semi-trucks, buses,mini
buses, micro buses, agriculture tractors, whether locallymanufactured or imported.
2 & 3Wheels
Trading, distributing andmarketing for all kinds of 2&3Wheels, whether locallymanu-
factured or imported.
Other Operations
Trading spare parts, and its accessories whether locallymanufactured or imported,
tires for vehicles and equipment whether locallymanufactured or imported. export
activities, selling locallymanufactured and imported products for cash, on credit or
through finance leasing andmicrofinance. and trade in all goods including light truck
and sale by instalments and provide services of factoring and nonbanking financial
services.The factoring services intended to buy existing and future rights of sellers of
goods and services and provide related services.
A. Total revenue
December 31,
2017
December 31,
2016
Passenger car
57.4%
62.8%
Buses and trucks
7.3%
8.3%
2 & 3Wheels
14.4 %
12.4%
Other Operations
20.9%
16.5%
72 • 2017 ANNUAL REPORT
2017 ANNUAL REPORT • 73
GB Auto (S.A.E.)
Notes to the consolidated financial statements for the financial year ended December 31, 2017
(In the notes all amounts are shown in Thousand Egyptian Pounds unless otherwise stated)