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25.Trade payables and other credit balances
December 31,
2017
December 31,
2016
Trade payables
610 818
1 958 888
Other credit balances
64 530
58 254
Advances fromcustomers
223 000
154 685
Tax authority
148 068
25 973
Accrued expenses
285 223
372 944
Notes payables
119 784
222 697
Dividends payable
7 928
75
Deferred revenues
60 483
14 434
1 519 834
2 807 950
26.Provisions
Legal
Claims
Warranty
Provision
Other Provi-
sions
Total
Balance at January 1, 2017
2 274
94 684
114 107
211 065
Provisions formed during the year
6 081
65 160
88 700
159 941
Provisions utilized during the year
(996)
(51 000)
(33 209)
(85 205)
Provisions no longer required
(275)
-
(80)
(355)
Effect of movement of exchange rates
-
-
(1 684)
(1 684)
Balance at December 31, 2017
7 084
108 844
167 834
283 762
Balance at 1 January 2016
5 147
77 752
60 312
143 211
Provisions formed during the year
520
48 309
53 860
102 689
Provisions utilized during the year
(3 372)
(31 377)
(65)
(34 814)
Provisions no longer required
(23)
-
-
(23)
Effect of movement of exchange rates
2
-
-
2
Balance at December 31, 2016
2 274
94 684
114 107
211 065
Legal claims
The amounts shown comprises of gross provisions in respect of legal claims brought against the Group, andmanage-
ment opinion, after taking appropriate legal advice, that the outcome of these legal claims will not exceed signifi-
cantly the provision formed as at December 31, 2017.
Warranty provision
The Group provides warranty on its products and guarantees to either fix or replace the products that are not work-
ing properly, and the Group has estimated its warranty provisions to be EGP 108 844 at the end of the period for
expected warranty claims in the light of management experience for repair and returns level in previous years.
The warranty provision includes a long termprovision amounted to EGP 42 834 (December 31, 2016 EGP 49 174).
Other provisions
Other provisions are related to claims expected to bemade by a third party in connectionwith theGroup operations.
The information usually required by accounting standards is not disclosed because the management believes that
to do so would seriously affects the outcome of the negotiation with that third party. These provisions are reviewed
bymanagement yearly and adjusted based on latest developments, discussions and agreements with the third party.
27. Trade and notes payables long term
December 31, 2017
December 31, 2016
Present Value
Notes Payable
Present Value
Notes Payable
Total notes payables and creditors
48 867
48 867
222 697
222 697
Notes payable Less than 1 year (Note 25)
(48 309)
(48 309)
(222 697)
(222 697)
Total
558
558
-
-
28.Amounts under settlement of financial lease contacts
This account represents the differences (either positive or negative) between the earned revenue which is recorded
according to revenue recognition policy in Note (34-D/4), and the due lease receivable.
The balance of such account is settled against the net book value of the leased asset at the termination date of the
leasing contract.
December 31,
2017
December 31,
2016
Advances fromcustomers
1 156 550
542 007
Amounts under settlement of financial lease contacts
375 598
226 687
1 532 148
768 694
29. Financial risk management
1. Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency exchange rates
risk, price risk, cash flows and fair value interest rate risk), credit risk and liquidity risk.
TheGroup’s effortsareaddressedtominimizepotential adverseeffectsof suchrisksontheGroup’sfinancial performance.
A. Market risk
1. Foreign currency exchange rate risk
TheGroup is exposed to foreignexchange rate riskarising fromvarious currency exposures, primarilywith respect to
the US Dollar and Euro. Foreign exchange rate risk arises from future commercial transaction, assets and liabilities
in foreign currency outstanding at the consolidated balance sheet date, and also, net investments in foreign entity.
90 • 2017 ANNUAL REPORT
2017 ANNUAL REPORT • 91
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)