Annual Report 2020rayacorp.com/wp-content/uploads/IR/annual-report-2019.pdf · 2020. 11. 17. · $...

ANNUAL

G R E A T E R O P P O R T U N I T I E S , B I G G E R C H A L L E N G E S

REPORT

2019

RAYA HOLDING FOR FINANCIAL INVESTMENT Raya Holding for Financial Investments Headquartered in Cairo, Egypt, yet mandated to operate worldwide, Raya Holding is an ambitious investment conglomerate managing

outsourcing, contact centers, smart buildings, consumer electronics, food and beverage,

ADDRESS:Headquarter

Raya Holding Investor Relations Team:Ahmed Nour Eldin Hassan

Director Head of Corporate Finance, Investments & Financial Planning | Corporate &

Aser Mokhtar

Mohamed Nazir Azmirly

Reuters Code:

EXECUTIVE SUMMARY

D E A R VA LU EDSHAREHOLDERS

MEDHAT KHALIL

CHAIRMAN’S MESSAGE

In 2019, Raya marked a very special milestone as we celebrated

in our commitment to empower every individual and every business

investments are now in a better position to generate

EGP 9 billion

value of nearly EGP 550 million

by various institutional investors, allowed us to

R A Y A A N N U A L R E P O R T 2 0 1 94

FINANCIAL HIGHLIGHTS

2019, BIGGER CHALLENGES, GREATER OPPORTUNITIES

R A Y A A N N U A L R E P O R T 2 0 1 9 G R E A T E R O P P O R T U N I T I E S , B I G G E R C H A L L E N G E S

Revenue VS. GP

Revenue RevenueGross Profit Operating Income

Revenue VS. Operating Income

1,202 1,471 1,665

-

6,74

5

7,91

0

8,76

8

462 497 381

6,74

5

7,91

0

8,76

8

-

8,768 1,665 605Revenue Gross Profit EBITDA

5,699

893

448

6,7451,202

6017,910

1,471 674

8,7681,665

605

496 (59) (85)CAPEX Net Cash Flow From Operations Net Income Before Minority

308

103

300

23489

496

(85)-

-

(117)(59)



BariqITTrade Contact Center Buildings & Retail

4

REVENUE SPLIT YE 2018 (%)

REVENUE SPLIT YE 2019 (%)

13%EGP 613 MnY-O-Y GP GrowthEnding Cash Balance

11%4 Year Revenue CAGR



distribution slowdown in addition to margin dilutions across various product segments

portfolio companies: AMAN Financial

and AMAN For E - Payments

The Smart Buildings & Retail business

BariQ

Ostool’s

Raya Holding continues its commitment

maintaining a leading market position across

Raya Contact Center’s revenue

operations due to a region wide economic

Raya IT as

management was successful in leveraging its

The FMCG

Raya Foods

supply process in addition to unwinding

STRATEGIC OVERVIEW


Cash Dividends

Ex. DatePayment

DateDividendAmount

Coupon No.

4

SHAREHOLDER INFORMATION

SHAREHOLDERS STRUCTURE

Free Float

Financial Holding

SHAREHOLDERS BY GEOGRAPHY

Egypt


20+ EGP 1.07 B 20% 3.39%

contact centers, smart buildings, consumer electronics, food and beverage, land transport,

Years Issued & Paid Capital

Brokerage

Egyptian Company for Development

412,000+ 12 5

CORPORATE OVERVIEWRAYA AT A GLANCE

Different Countries

LINESDIFFERENT CONTINENTS


A MARKET LEADER NO MATTER WHERE WE ARE

a strong commitment to quality and an

WE PROVIDE OUR WORLD-CLASS SERVICE THROUGH:

• Focusing on Client and end user

• Recruiting and retaining competent and

• •

• •

•

VISION

MISSION

to empower every person and every line of business

CORPORATE OVERVIEW

RAYA HOLDING FOR FINANCIAL INVESTMENTS | GROUP OF COMPANIES

TRADE & DISTRIBUTION

INFORMATION TECHNOLOGY

CALL CENTER OUTSOURCING

SMART BUILDINGS / RESTAURANTS FMCG

INDUSTRIAL / LOGISTICS

NON-BANKING FINANCIAL SERVICES

OTHER INVESTMENTS

RAYA DISTRIBUTION

RAYA INTEGRATION

RAYA CONTACT CENTER

RAYA SMART BUILDINGS

RAYA FOOD TRADING BARIQ

AMAN FINANCIAL SERVICES

AAA (INSURANCE)

20%

RAYA ELECTRONICS RAYA NETWORKS

RAYA BUILDING MANAGEMENT

RAYA MAINT. & BUILD.

OPERATIONSRAYA FOODS RAYA ADVANCED MANUFACTURING

AMAN E-PAYMENTS

SMART VILLAGE3.39%

RAYA TECH DISTRIBUTION

RAYA INTERNATIONAL

SERVICESC3 EL BOYOOT EL ARABIA

MAKARONI POLSKIE

(POLAND)20%

OSTOOL LOGISTICS

66.7%

AMAN MICROFINANCE

BEST SERVICENIGERIA RAYA GULF

RAYA VENTURE INVESTMENTS

RAYA RESTAURANTS

RAYA SOCIAL MEDIA RAYA SAUDI

RAYA DATA CENTER


EXCELLENCE

aspect of our various lines of

unbending will to succeed, Raya is committed

itself according to international quality

CUSTOMER FOCUSRaya is committed to offering

RESPECT FOR PEOPLERespect for people is a deeply

people are devoted employees,

TEAMWORK

We are diligent in continually promoting

CORPORATE OVERVIEW

aggressively penetrate new markets is only possible

drive our progress, and empower us to carve out

conglomerate, in terms of employees, revenue,

OUR VALUES


RAYA MILESTONES

19992000 2003 2006

2001 20082005

MERGER

seven national IT companies

Holding, addressing a gap between multinational market players and local

DIVERSIFICATION

strategy was to diversify into more IT and IT-related

GOING PUBLIC EXPANSION

STREAMLINING

entailed merging smaller

business: Information

GOING INTERNATIONAL

international opportunities,

REALIGNING RESOURCES

appointed to lead

20152010 2017 201920162013 2018

DEVELOPING MARKET RESILIENCE

economy, compounded by volatile political conditions, Raya Holding managed to solidify strategies and

business, carrying out its

GROUNDWORK FOR FUTURE SUCCESSRaya Holding

EXPANSION IN FINANCIAL SERVICES SECTOR

PORTFOLIO DIVERSIFICATION

commitment to a

strategy, Raya Holding

subsidiaries, penetrating

UNLOCKING NEW MARKETSRaya signed a contract

manufacturer, to import

in Egypt to run on

CONQUERING NEW INDUSTRIES

to invest in modern

for Integrated Food

RAYA HOLDINGCompleted First

GROWING THE INDUSTRIAL CAPACITY

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE FRAMEWORK

1. INTRODUCTIONCompany


2. RAYA HOLDING’S CORPORATE GOVERNANCE FRAMEWORK2.1 Raya Holding’s Corporate Governance Framework

revolves around the following elements:2.1.1 An Effective, independent Board of Directors

2.1.2 A Proactive Audit committee

2.1.3 A Remuneration committee aligning executive compensation to shareholder value

2.1.4 A Nomination committee ensuring effective governance of the board

2.1.5 A relevant Code of ethical behavior

2.1.6 Clear, enforced policies and procedures

manuals

2.1.7 An objective, well-resourced internal audit function

Procedures

2.1.8 Independent, effective External Audit

Center presents, in all material respects, its financial position and

2.1.9 Transparent disclosure, effective communication and systems that ensure effective measurement and accountability

2.1.10 Corporate Citizenship

2.2 Each of the above elements is an essential component of Raya Holding’s governance model, but none is sufficient independently. Raya Holding’s governance relies on the independence of the above elements.


INTRODUCTION•

•

•

•

BOARD OF DIRECTORS’ CHARTER


1. CORPORATE GOVERNANCE MISSION

1.1 Corporate governance

Directors, and management interact

1.2 Raya Holding

1.3 Incorporating a sound corporate governance framework is one of

is committed not only to meeting legal and regulatory governance

good corporate governance is not

1.4 Raya Holdingprinciples of good corporate governance to be:

governance and related

implementing approved policies

actions or decisions require Board

Responsibility must be attributed

2. BOARD OF DIRECTORS AND MANAGEMENT

2.1 The Board of Directors manages

2.2 The Board of Directors’ primary responsibilities are to provide

2.3 The Board will provide effective

interests of its diverse constituencies, including its clients, employees,

2.4 In all actions taken by the Board,

2.5 In discharging that obligation,

2.6 Management

2.7 The Board’s communication to management

3. STRATEGIC PLANNING P

ROCESS:

3.1 The Board will approve and oversee

strategies and will review and

3.2 In its strategy document

3.3 A high-level overview strategies will be communicated

3.4 The Board

3.5 The Board is also responsible

3.6 The Board

3.7 Board members

3.8 The Board must independently

and initiate management action on

3.9 The Board,

4. BOARD COMPOSITION:4.1 Good governance principles require

independence, transparency, and

4.2 Criteria for CompositionBoard

4.3 One of the Board’s most important responsibilities is identifying, evaluating, and selecting candidates

4.4 The Committee will seek members from diverse professional

4.5 Directors

degree of responsibility, be leaders

4.6 The factors to be consideredCommittee in its review of potential

4.7 The application

and cannot be measured in any


7.2 Frequency of Meetings:

7.3 Board Committees:

corporate governance rules,

well as qualifications for committee

committee member appointment and removal, committee structure

5. ATTENDANCE AT MEETINGS:

5.1 Directors

Board meetings, and meetings of committees and subcommittees on

time needed and meet as frequently

5.2 Information

conducted at a Board or committee

5.3 The Chairman calendar of standard agenda items

member is free to suggest items for

5.4 All Board members are encouraged

6. CONDUCT OF MEETING:6.1 The Chairman

degree of formality required at

following general rules will apply:

6.2 The Chairman

6.3 The Chairman will retain sufficient

6.4 The Chairmandecisions are properly understood

6.5 The Chairmandecisions and debate are completed

7. QUORUM OF THE BOARD: 7.1 A meeting of the Board will not be

valid unless attended by a minimum


committee meetings consistent

committee and senior management,

committees as necessary or

Board of Directors may meet and

Questions arising at any meeting

7.4 Board Operations:

7.4.2.1 The Chairman of the Board is expected to fulfill the following responsibilities:

7.4.2.1.1 Ensure that the Board provides leadership and vision to the Company;

7.4.2.1.2 Ensure that the Board is participating in setting the aims, strategies and policies of the Company;

7.4.2.1.3 Ensure that there is adequate monitoring of the pursuit and attainment of the goals and aims of the Company;

7.4.2.1.4 Direct the Board discussions to effectively use time to address the critical issues facing the Company;

7.4.2.1.5 Ensure that Directors are enabled and encouraged to play their due role in the meetings;

7.4.2.1.6 Ensure that Directors have adequate opportunities to express their views;

7.4.2.1. Ensure that Directors are provided with sufficient and timely information;

7.4.2.1.8 Ensure that minutes properly reflect decisions; and

7.4.2.1.9 Uphold this Board of Directors Charter.

7.5 Evaluation of Board Performance:

conduct an annual review of Board

corporate governance rules and

Board and an adequate review of

Directors before accepting being

duties as a Director

8.5 Directors’ Independence:

include independent, non-

8.6 Directors’ Appointment and Succession Planning:

selecting new Directors to replace

Company or its committees is not

an annual evaluation of its own performance as provided in its

7.6 Board’s Responsibility for Disclosure:

of financial and business disclosure

8. DIRECTORSHIP8.1 Selection of Directors:

Nominations Committee is responsible for identifying individuals qualified to become Board members and recommending

8.2 Number of Directors:

of a minimum of five members,

8.3 Term for Directorship:

8.4 Directors’ Responsibilities:


8.7 Directors’ Orientation:

orientation program for new

presentations by senior management

its significant financial, investment and risk management issues, compliance programs, operations, Code of Business Conduct and

8.8 Directors’ Compensation:

Remuneration Committee and

or indirectly provide or receive compensation for providing accounting, consulting, legal, investment or financial advisory


AUDIT COMMITTEE

INVESTMENT COMMITTEE


COMMITTEE

REMUNERAT-ION COMMITTEE

recommending qualified directors and committee

BOARD OF DIRECTORS STRUCTURE

is committed to identifying and implementing appropriate corporate governance practices

BOARD COMMITTEES


Ashraf Kheir El Din Ahmed Khalil Amr El Tawil Mostafa Moarak Yasser Hesham Medhat Khalil

Distribution & Trading

Independent Board

Marc Tohme Sherif Kamel Hamed Shamma Samer El Waziri Malek Sultan Seif Courty

Representative,

Independent Board

Professor of Holding

Fawry

MEMBERS OF THE BOARD

4 4

EXECUTIVE MANAGEMENT

Ahmed Ibrahim

Ahmed Khalil

Ahmed Refky

Hossam Hussein

Holding

Bassem Megahed

Omar Abdel AzizTamer Badrawi

Usama ZakiMohamed Wahby

Hazem Abdel Hady

Holding

Hisham Abdel Rassoul

Hazem Moghazy

Karim Khalife

Mohamed El Naggar

Gamal Hussien

COMMITTEE MEMBERSHIP

Audit Committee

Name Role

Remuneration Committee

Name Role

EMPOWERING YOUTH VOCATIONAL SANE3TY PROGRAM

Key Facts & Statistics

• 161readiness training

• 120 • 81% employment rates

ROBOTICS COMPETITION

CORPORATE SOCIAL RESPONSIBILITY

investment portfolio to contribute to

D e v e l o p m e n t

social investments

ENGAGED & CONNECTEDWITH OUR COMMUNITY

Key Facts & Statistics:

• 125 Raya Corporate • 1500

•


RAYA HOLDING

smart buildings, food and beverage manufacturing and trading, land transport,

employees, accommodating a wide international customer base from on-ground

BUSINESS REVIEW

RAYA HOLDINGFOR FINANCIALINVESTMENTS

Revenue

816

907

756

495

# of Clients Retention Rate

75%89% 96% 91% 87% 86%

82 104

83 110

97 103

Average Capacity Utilization

79%70% 72%

80%76%

80%

3,7

40

4,4

54

4,6

30

5,3

81

6,4

48

6,8

68

KEY OPERATIONAL METRICS

Gross Profit Margin

55%

43% 41%39%

270

325

373

319

GP

EBITDA Margin

33%

27%24%

19%

165

200

221

155

EBITDA

Insourcing

Hosting

cing

cing

REVENUE CONTRIBUTION

PER SERVICE

18%

20%

11%

51%

RAYA CONTACT CENTER

markets, Raya Contact Center provides an array of integrated business process outsourcing

RAYACONTACTCENTER

1.

2.

3. Raya IT also won two prestigious awards

4.

FULL SUITE OF SOLUTIONS

Telecom Solutions

Low Current Solutions

Data Centre Hosting

Voice & Multimedia

Security Solutions

Enterprise Management Solutions

Internet of Things & Digitization

ATM & Self Services

Oracle ERP Solutions

Gross Profit Margin

16% 14% 15%18%

131

181

228

340

GP Revenue

1,931

1,498

1,337

840

-

EBITDA Margin

7% 7%9%

60 91 132

190

EBITDA

10%

Data Center

Integration

82%

7%

8%3%

REVENUE BY LINE OF

SERVICEFY2019

RAYA INFORMATION TECHNOL-OGY (RAYA IT)

-

-

center services, enterprise infrastructure

solutions, and enterprise resources planning

banking and telecom sector applications,

ambassadors, representatives of companies

a great opportunity to transform Egypt into

win many prestigious awards including:

RAYAINFORMATIONTECHNOLOGY

Revenue

3,948

4,060

3,781

3,959

Gross Profit Margin

11%14% 14% 14%

421

511

553

558

GP

REVENUE DRIVERS FY 2019

IT Equipment

47%

14%

27%

11%1%

Electr

Retail

s

Nigeria

31%

6%5%

16%

8%

25%

31%

RETAIL REVENUE

SPLIT

TOTAL REVENUE

SPLIT

RAYA TRADE line of business includes several operating companies including: Raya

Company distributes a strong brand portfolio including Huawei,

RAYA TRADE & DISTRIBUTION


-

17

123

202

Revenue

Gross Profit Margin

28%

13%

3%5 16 5

GP

-

s

a

een Beans

PRODUCT MIX 63%

11%

5%

4%

17%

Evere

Bulk

BRAND MIX

84%

13%3%

RAYAFOODSRAYA FOODS

Raya Foods now produces premium quality


GP

Gross Profit Margin

14%13%

30 42 38-

-

Revenue

211

337

378

DIVERSE PRODUCT RANGE SUPPORTED BY A STRONG DISTRIBUTION CAPACITY

Distribution Centres

11K sqm 322 20

RAYA FOOD TRADING

includes manufacturing of a wide range of food product categories, distribution for our company-owned food brands “Haneya” including pasta, tomato sauce and fava

facilitating its penetration into new markets

leading brand Tunato, continuing to record

RAYAFOODTRADING

AMAN FOR E-PAYMENTS was

and banking sectors to provide value-added

AMAN FORE-PAYMENTS

Launched Operations

POS Machines2016 46,000

AMAN FOR FINANCIAL SERVICES was

AMAN FOR FINANCIAL SERVICES

Total Headcount as at FY 2019

Stores Nationwide as at FY 2019

1,092 250

Gross Profit Margin

24%

19%9%

1 19 35

GPRevenue

405

155

3

Interest

Fees

Automotive

Corporate

Retail Sales

REVENUE CHANNEL

CONTRIBUTION

62%9%

17%

4%8%

AMAN FOR MICROFINANCE was

clientele of craftsmen, small businesses, and

of loans disbursed grew at a compounded

number of loans grew at a compounded

AMAN FOR MICRO-FINANCE

Financial Performance

116

88.2

22 8.3

Greater Cairo

Delta

Upper Egypt

63%

24%

13%

PROVINCIAL LOAN

DISTRIBUTION

Launched operations

Branches Nationwide

Loan Disbursements

Portfolio principle

Loans Disbursed

Active Loans

2018

55

EGP702mn

EGP324mn

65,697

35,054


GP

16%

29%

54%

44%

Revenue Raya Restaurants

RAYA RESTAURANTS

RAYARESTAURANTS

74

62

41

18

3 12 33 33

Gross Profit Margin

RAYASMARTBUILDINGS& RETAILBUSINESS

RAYA SMART BUILDINGS

Revenue

30

43

80

118

Gross Profit Margin

GP

-66%

-5%

36%

31%

(20)

29 31

(2)

BARIQ

bottle per year from post-consumer PET

applications as well as recycled polyester

Consumption & Production, Quality

effective role in waste management, sustainability and circular economy in middle

global quality standards, and encouraging

for performance, industry recognition and

BARIQ

Revenue

115

162

224

312

Gross Profit Margin

40%

46 42 60 88

GP

27% 28%26%

EBITDA Margin

27%

17% 16%

31 27 36 60

EBITDA

19%

SERVICE OFFERING

In-Loader Jumbo Glass Delivery

Flat Bed Trucking

Glass A Frame

Grain Delivery

Container Services

Tipper

Cement Silo Distribution

Coal/Pet Coke Stevedoring

Warehousing

Glass Grains

Coal Trading Raw Material/Discharge

Cement

REVENUE BY INDUSTRY(FY 2019)

37%

25%

29%

7%2%

Revenue

205

381

343

377

Gross Profit Margin

50 75 69 77

GP

-

20%20% 20%25%

-

EBITDA Margin

27%

55 80 70 84

EBITDA

21%21%

22%

OSTOOL

OSTOOL is a leading provider of supply

focus on trucking and logistics services,

across various areas of goods transport and services including: Cement, Raw

industrial companies in Egypt, including

continues to improve response time and


RAYA ADVANCED MANUFAC-TURING (RAYA AUTO) was founded

-

ranging from motorcycles, scooters and

known as tuk-tuks in Egypt as well as four-

ranging from assembly, quality, and after-

planned to be made up of local components,

RAYAAUTO


FINANCIAL


R E V I E W

2019


TABLE OF CONTENTS

1

3

4

6

7

8

9


TO THE SHAREHOLDERS OF RAYA HOLDING COMPANY FOR FINANCIAL INVESTMENTS (S.A.E)

of RAYA HOLDING COMPANY FOR FINANCIAL INVESTMENTS (S.A.E)

policies and other explanatory notes.

MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

fraud or error. This responsibility also includes selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

AUDITOR’S REPORT


Translation of consolidated financial statements | Originally issued in ArabicTranslation of consolidated financial statements | Originally issued in Arabic

AUDITOR’S RESPONSIBILITY

OPINION

RAYA HOLDING COMPANY FOR FINANCIAL INVESTMENTS (S.A.E)

Cairo: 11 March 2020

Mohamed Abu Elkassim

FESAA – FEST

RAA (17553)

CMAR (359)


Translation of consolidated financial statements | Originally issued in Arabic

2

LE

Fixed assets 1,045,071,490 692,047,947 326,322,518 18,685,703 82,078,561 53,122,771 24,479,900

Deferred tax assets 87,538,568 2,329,347,458

1,362,719,026Work in progress 97,996,515

2,006,855,6341,019,018,803

720,000 28,082,237

Cash on hand and at banks 612,965,7035,128,357,918

Total assets 7,457,705,376

1,071,997,595 64,197,233

General reserve 41,935,960 Treasury shares -

Revaluation reserve of available for sale investments 4,552,671(4,579,358)

Retained earnings (139,796,212)(141,045,399)

interest 897,262,490258,350,428

1,155,612,918

75,401,180long term loans 503,118,836

147,214,755725,734,771

39,968,0771,240,575,054

Current portion of long term loans 175,695,310Credit facilities 3,087,277,353

-1,008,671,699

Dividends payable 24,170,1945,576,357,6876,302,092,4587,457,705,376

Medhat Khalil

• •

STATEMENT OF CONSOLIDATED FINANCIAL POSITIONAS OF 31 DECEMBER 2019



STATEMENT OF CONSOLIDATED PROFIT OR LOSSFOR THE YEAR ENDED 31 DECEMBER 2019

LE

Revenues 8,767,984,574

Cost of revenues (7,103,297,418)

GROSS PROFIT 1,664,687,156

General and administrative expenses (886,109,573)

(475,000)

(369,044,375)

(41,327,108)

Reversal of impairment of accounts receivable 15,171,505

(1,930,440)

296,271

Reversal of impairment of other debit balances 381,268,436

OPERATING PROFIT

(396,231,931)

Foreign exchange differences 4,348,697

2,940,649

793,277

828,462

3,130,836

Takaful contribution (20,161,646)PROFITS FOR THE YEAR BEFORE INCOME TAXES AND NON CONTROLLING INTEREST (23,083,220)

(62,019,847)

PROFITS FOR THE YEAR (85,103,067)

(141,045,399)

55,942,332


Medhat Khalil

•statements.



STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2019

2019

LE


OTHER COMPREHENSIVE INCOME

Translation differences (9,850,040)

Reversal of available for sale investments revaluation (4,666,200)

1,049,895

SUB-TOTAL OF OTHER COMPERHENSIVE INCOME (13,466,345)

TOTAL COMPREHENSIVE INCOME (98,569,412)



Up

Cap

italR

eserveG

eneralR

eserveFor Sale

Shares

Net G

ain

Contact

Center

SharesTranslation

Retained

For The

Non-

Interest

Non-

Non-

Interest Total

Transferred to retained earnings and legal reserve

Capital increase from

retained earnings

translation differences

Dividends

controlling interest

Treasury shares

Reserve of investments at fair value

Transferred to retained earnings and legal reserve


translation differences

Dividends


Reserve of investments at fair value

STATEMENT OF CONSOLIDATED CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2019



STATEMENT OF CONSOLIDATED CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2019CASH FLOWS FROM OPERATING ACTIVITIES Note

(23,083,219)

property 196,005,930

(3,130,836)

396,231,931

(2,940,649)

10,829,605

(1,153,345)

25,167,158

(24,782,808)

41,327,108

1,155,316

(15,171,505)

600,454,686

Change in inventory (262,305,400)

Change in projects under construction (62,626,297)

Change in accounts and notes receivable (481,769,995)

Change in prepayments and other debit balances (203,030,331)

Change in advances from customer -

Change in accounts and notes payable 94,257,388

Change in accrued expenses and other credit balances 302,030,587

Change in other long term liabilities 76,592,627

CASH FLOWS PROVIDED FROM OPERATING ACTIVITIES 63,603,265

(135,721,843)

Doubtful Debts 15,115,635

(1,756,100)

NET CASH FLOWS (USED IN) PROVIDED FROM OPERATING ACTIVITIES (58,759,043)

CASH FLOWS FROM INVESTING ACTIVITIES

(291,868,785)

7,043,107

(149,618,997)

3,807,330

NET CASH FLOWS (USED IN) INVESTING ACTIVITIES (430,637,345)

CASH FLOWS FROM FINANCING ACTIVITIES

1,052,929,677

(247,667,011)

447,291,573

Dividends paid (165,813,305)

(40,716,166)

(396,231,931)

5,085,925

NET CASH FLOW PROVIDED FROM FINANCING ACTIVITIES 654,878,762

(9,850,040)

155,632,334

423,502,152

CASH AND CASH EQUIVALENT - END OF THE YEAR 579,134,486

612,965,703

Restricted time deposits (33,831,219)

CASH AND CASH EQUIVALENT- END OF THE YEAR 579,134,484


STATEMENT OF CONSOLIDATED CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS31 DECEMBER 2019 1. GROUP BACKGROUND

company has investments in subsidiaries.

Raya Distribution Company

2



Company 6 Raya Gulf Company

Raya Contact Centre Company*

Company

Raya Restaurants Company

Raya Qatar Company Qatar

20 Raya Tech Distribution Company

22 Raya for Data Centres Company

Raya Contact Centre Gulf

26

Madova Company

Raya for Modern vehicles Company

Raya for advanced manufacturing Company



B

2

y **

6

2. BASIS OF CONSOLIDATION SIGNIFICANT ACCOUNTING ESTIMATES

2.1 BASIS OF CONSOLIDATION •

The carrying amount of the holding company’s investment in each subsidiary and the

The amount of those non controlling interests at the date of the original combination.

combination.

•

1. GROUP BACKGROUND (CONTINUED):



2.1 BASIS OF CONSOLIDATION:

•similar transactions and other events in similar circumstances.

•

Percentage

Raya Restaurants Company

Raya Contact Centre Company

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

the accompanying disclosures and the disclosure of contingent liabilities at the reporting date.

material adjustment to the carrying amount of the assets or liabilities affected in future years.

assets properties for calculating depreciation. This estimate is determined after considering the expected usage of the asset or physical depreciation of assets. The management periodically

audits and differing interpretations of tax regulations by the Company and the responsible tax

Deferred tax assets are recognised for unused accumulated tax losses to the extent that it is



2.2 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES:

future tax planning strategies.

are indicators that the carrying amounts may not be recoverable. When value in use calculations

generating unit and chooses a suitable discount rate in order to calculate the present value of

3. SIGNIFICANT ACCOUNTING POLICIES

3.1

evaluated by fair value.

3-2

3-3

company’s functional currency.

Transactions in foreign currencies are initially recorded using the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated using

translated using the exchange rates prevailing at the dates of the initial recognition.

3-4

excess of the cost of the combination of businesses over the company’s interest in the



3-5

Fixed assets are stated at historical cost net of accumulated depreciation and accumulated

3. CANT ACCOUNTING POLICIES (CONTINUED):

Years

Vehicles

Computers

assumptions used to determine the asset’s recoverable amount since the last impairment

3-6




3-7

impairment.

3-8

unless it can be clearly demonstrated that this is not the case.

received from the investee company.

•

•fair value and it includes the direct expenses that are related to them.

•

•

•

•attributable expenses that are related to them.




•

•is carried at cost.

•

3-9

•

value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or the most advantageous market for the asset or liability.

• The fair value of an asset or a liability is measured using the assumptions that market

act in their economic best interest. •

•market bid prices.

•

•

•

observable inputs and minimising the use of unobservable inputs. •

· Level 1

· Level 2

· Level 3




period.

or liability and the level of the fair value hierarchy as explained above.

3-10

RECOGNITION:

DISPOSAL:

•

•end the contract liability that is related to it.

•

condition.

The company is committed to transfer the amount that is collected on behalf of




3-11

inventory and access to its location and its current state.

estimated costs of completion and the estimated costs necessary to make the sale.

occurs.

3-12

of impairment losses.

3-13

3-14 Provision

3-15

The reserve is used upon a decision from the general assembly meeting based on the




cut back.

3-16

Current income tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the tax authority.

3-17

to the company and the revenue can be reliably measured.

• The amount of revenue can be reasonably measured.• • The amount of revenue can be reasonably measured for the degree of completion

• completion.

to the customer.




Dividends

the lease term.

3-18

3-19 3-18 Finance cost

3-20

are approved by the boards of directors.

3-21

objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and has an impact on the estimated future cash

assumptions used to determine the asset’s recoverable amount since the last impairment


R A Y A A N N U A L R E P O R T 2 0 1 92 0


3-22

3-23

months.



4. FIXED

ASSETS

LandLE

BuildingsLE

VehiclesLE

Furniture

equipment

LE

FixturesLE

Leasehold im

provements

LESw

itchesLE

ComputersLE

Productive assets

LETotalLE

Cost

Transferred from project

under constrictions D

isposals

Translation differences

depreciation

Depreciation for the year

Depreciation of disposals


112,293,913130,258,977

233,688,234 93,243,762

68,373,260118,277,554

14,109,48450,848,910

224,118,0201,045,212,114

112,293,913130,258,977

233,688,23493,221,933

68,373,260118,179,084

14,109,48450,828,585

224,118,0211,045,071,490

- There is a mortgages on the land located in 6

th

the administrative building of Raya group is held.

- due to the loan granted to the company.

-

-

2019LE

(87,439,467)C

ost of revenues(33,859,831)

General and adm

inistrative expenses(41,683,160)

(162,982,458)

2 22 22 22 22 22 2

LandLE

LEV

ehiclesLE

LELE

Leasehold

LELE

LEassets

LE

TotalLE

Cost

Transferred from project

under constrictions

Disposals


Depreciation for the year

Depreciation of disposals


Com

pany’s assets

44,354,26397,010,464

200,167,26669,617,151

74,930,80895,331,518

6,913,67647,240,321

154,224,124789,789,591

4. FIXED

ASSETS :

- There is a mortg

ages on the land located in 6

th

- Com

pany d

ue to the loan granted to the com

pany.

- -

2018LE

63,897,067C

ost of revenues

24,690,657G

eneral and administrative expenses

31,669,795

120,257,519



Land Leasehold Total

LE LE LE LE

Depreciation of the year

112,895,877 573,719,179 5,432,891 692,047,947

4 INVESTMENT PROPERTY

5 PROJECTS UNDER CONSTRUCTION

LE LE

324,345,461

1,977,057

326,322,518

6-1 PROJECTS UNDER CONSTRUCTION FIXED ASSETS

LE LE

232,425,410

139,788,725

85,531,289 Transferred from other debit balances

(133,399,963)

324,345,461



6-1 PROJECTS UNDER CONSTRUCTION FIXED ASSETS:

2019LE

-

12,832,041

15,568,831

34,427,759 Raya for Data Centres Company

76,623,671 Raya Distribution Company

47,175

2,113,509

93,058,679

2,040,214

87,609,582

24,000

-

324,345,461

The project under construction balance for Raya restaurants represents the cost of preparation of the restaurants.

The projects under construction for Raya for Canned Foods represents the cost of preparation and restructuring the factory of the company.

The balance of the projects under construction of Raya for manufacturing and logistic



6-2 PROJECTS UNDER CONSTRUCTION INVESTMENT PROPERTIES

2019LE

63,110,535

9,830,272

(70,963,750) Transferred to investment property during the year

1,977,057

2019LE

1,977,057

1,977,057

- value of the payment under the account of the improvements of an administrative building in the central hub at 6th

6 INTANGIBLE ASSETS

LE

Cost

59,152,611

3,106,617

Disposals during the year (14,498)

62,244,730

(34,760,531)

(8,798,496)

(43,559,027)

18,685,703

-

R A Y A A N N U A L R E P O R T 2 0 1 92 6


LE

6,019,341

Raya Contact Centers Company 3,160,166

33,236,748

26,582,777

1,926,942

2,626,725

32,139,604

893,048

436,854

23,127,622

(48,071,266)

82,078,561

8 INVESTMENT IN ASSOCIATES

percentage

LE

995,523

19.39 52,127,248

53,122,771

Cost Retained Balance

LE LE LE LE

449,048 (95,525) 995,523

11,483,480 3,036,174 52,127,248

11.932.528 2,940,649 53,122,771

7 GOODWILL



Share

assets assetscapital and

Company for

Makarony

10 AVAILABLE FOR SALE INVESTMENTS

LE

14,314,250

Quoted shares at stock market 10,165,650

24,479,900

measured.

LE

Cost of investment

10,165,650



11 INVENTORY

2019

LE

799,293,310

40,379,873

240,613,685

53,875,658

in transit 55,601,677

Canned foods 55,593,935

Food and restaurants accessories 3,010,429

160,560,865

26,142,553

29,734,818

1,997,321

1,466,804,124

(50,209,440)

(53,875,658)

1,362,719,026

LE

Charged during the year


50,209,444

-



12 ACCOUNTS AND NOTES RECEIVABLE

2019

LE

1,291,815,317

703,144,982

93,316,423

2,088,276,722

(81,421,088)

2,006,855,634

LE


Reversal of impairment during the year

Charged during the period 41,327,107

(15,171,505)

(15,115,635)

81,421,088

days to 60 days days Due nor Total

49,745,609 76,743,105 107,760,991 488,918,251 568,647,361 1,291,815,317



13 PREPAYMENTS AND OTHER DEBIT BALANCES

LE

119,272,143

23,413,994

263,714,178

25,949,593

264,256,273

96,156,054

12,346,673

3,821,681

Governmental authorities receivables 74,834,069

46,739,984

88,514,161

1,019,018,803

LE

555,990,767

463,028,036

1,019,018,803

*

decree relating to imposing fees against additional services. Raya Distribution Company one



14 SHARE BASED COMPENSATION

LE

720,000

720,000

to sell to granting free shares to create competition atmosphere to encourage creativity and

•

member.

•



15 CASH ON HAND AND AT BANKS:

LE

Cash on hand 4,634,579

199,056,733

Foreign currency 31,070,490

203,429,347

Foreign currency 28,882,354

145,892,200

612,965,703

*

•

balance of restricted time deposit against letters of guarantee and letters of credit as of

•

•Company.

•

•

•

16 CAPITAL

LE

5,000,000,000

1,071,997,595

214,399,519

•



resulting from the increase shall be distributed free of charge to the shareholders by one

•

procedures for the rules of listing and delisting of securities in the stock exchange issued by



17 LONG TERM LOANS

LE

175,695,310

503,118,836

678,814,146

2019

LE

(1) 480,263,353

(2) -

(3) 7,003,874

(4) 14,210,214

(5) 11,787,197(6)

ny 8,208,943

(7) 106.046.693

(8) 10,137,240

(9) 29,951,895

(10) 11,204,737

678,814,146

(1)

LE

52,356,481

427,906,872

480,263,353


Translation of consolidated financial statements | Originally issued in ArabicTranslation of consolidated financial statements | Originally issued in Arabic

B- Finance lease contracts



17 LONG TERM LOANS (CONTINUED):

(1)

administrative building in 6th



Group administrative building in 6th






Co

•

•


•

•

•

•building a factory of Raya advanced technology in 6th

•a factory For Raya advanced technology in 6th

•building a factory in 6th

•

•

• st



C

•

•

•

(2)

(3) •

•

•

date

•

amounted




(4)

(5) a

(6)

(7)

(8)

(9) asing company to Finance




(10)

18 PROVISONS

LE

32,047,916

Charged during the year* 10,829,606

(1,756,100)

(1,153,345)

39,968,077

•

•

•

LE

Claims provision 22,816,546

Warranty provision 519,142

11,192,439

5,439,950

39,968,077

19 ACCOUNTS AND NOTES PAYABLE

LE

1,180,148,185

60,426,869

1,240,575,054




20 CREDIT FACILITIES

LE

Raya Distribution Company 1,323,190,950

635,001,454

40,690,215

Raya Contact Centers Company 9,246,461

223,552,797

Raya Tech Distribution -

27,869

196,019,546

Raya for Data Centres Company 6,018,801

85,812,937

5,013,153

361,923

2,662,175

132,974,535

379,306,657

47,397,880

3,087,277,353

21 ACCRUED EXPENSES & OTHER CREDIT BALANCES

2019LE

307,717,180

211,749,390

283,952,010

107,795,766

97,457,353

1,008,671,699



22 DIVIDENDS PAYABLE

2019LE

24,170,194

24,170,194

23 A- REVENUES ACCORDING TO TYPE:

LE

Devices and goods distribution revenue 4,547,450,645

Transportation service revenue 377,154,935

1,860,185,898

Call Centre service revenue 815,254,769

117,672,377

Restaurant revenue 73,840,261

333,682,658

Canned foods revenue 377,639,109

201,689,577

Vehicles manufacturing revenue 57,351,191

6,063,154

8,767,984,574

23 B- REVENUES ACCORDING TO CURRENCY:

LE

6,159,354,876

Revenues in Foreign Currency 2,608,629,698

8,767,984,574



24 COST OF REVENUES

LE

Cost of martials used in the production (232,682,497)

Devices and goods distribution cost (3,957,574,101)

(1,759,789,976)

Transportation service cost (233,624,494)

(741,459,149)

(118,050,151)

Finance cost (25,471,722)

(34,645,328)

(7,103,297,418)

25 INCOME TAX

LE

Current income tax (100,774,962)

Deferred income tax 38,755,115

(62,019,847)

26 RELATED PARTY TRANSACTIONS



27 SEG

EMEN

T REPO

RTING

Year End

edTrad

e and

sectorsector

Call

centers sector

Finance lease

sector

International services

sector

Land

Transportation

sectorsector

sectorFinancial Services

sector

canned

sector

Vehicles

sector

Other

activitiesC

onsolidated

2019

LELE

LELE

LELE

LE

LE

LE

LE

LE

LELE

LELE

Revenues

Cost

Depreciation

and

the year

Total

Trade and

sectorsector

Call

centers sector

Finance lease

sector

International services

sector

Land

Transportation

sectorsector

Sectors

Financial services

Sectorsector

Canned

Food

Sector

Vehicles

Sector

Other

activitiesC

onsolidated

LELE

LELE

LELE

LELE

LELE

LELE

LELE

LE

Revenues

Cost

Depreciation and

year

28 OTHER LONG TERM LIABILITIES

29 TAX SITUATION

30 FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES

a)

LE

63,915,919

1,604,050

46,009

8,300,814

1,131,469

exposure to foreign currency changes for all other currencies is not material.

before Tax Change Ratio Currency

LE

6,391,592

(6,391,592)

160,405

(160,405)

830,081

(830,081)

113,147

(113,147)

4,601

(4,601)



30. FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES

credit risk.

the risk of default in payment by the customer for each individual case.

The Company earns its revenues from a large number of customers.

obligations.



c) Interest

interest rates and interest bearing time deposits.

year.

business results. The company’s total liabilities from loans and credit facilities from banks as

available in the market.



30. FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES

rate rateLE LE

Financial asset 2.323.117 2,660,525

(2.323.117) (2,660,525)

Financial liability 38,632,319 26,438,525

(38,632,319) (26,438,525)

d)

The company’s management on a regular basis to make sure of the availability of the necessary

company.

liabilities expenses.

based on the contractual undiscounted payments

Less than 3 Months Total

L.E L.E L.E L.E

44,516,090 148,915,572 485,382,484 678,814,146

Credit Facilities 1,639,844,995 1,447,432,358 - 3,087,277,353

other credit balances 374,556,373 357,171,938 276,943,388 1,008,671,699

- - 147,214,755 147,214,755

payable 661,546,906 543,717,507 110,711,820 1,315,976,233

2,720,464,364 2,497,237,375 1,020,252,447 6,237,954,186



Less than 3 Months Months Total

L.E L.E L.E L.E

Credit Facilities

other credit balances

liabilities

d)

The main purpose of the company’s capital management is to ensure that there is a good capital levels

in light of changes in the conditions of activity. There are no changes occurred in the objectives and policies of the company during the year.



30. FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES:

31 CONTINGENT LIABILITIES

)

32 SIGNIFICANT MATTERS

•

•

•

•

•

•

•leasing.

•



•

•

•Measurement.

•

•

•

•

•

•

•

•

•

•

•

•

32- SIGNIFICANT MATTERS (CONTINUED)

•operations.

•



NEW EGYPTIAN ACCOUNTING STANDARD NO. (47) “FINANCIAL INSTRUMENTS”

important adjustmentsDate of application

statements

corresponding topics in the

of hedge accounting according to the entity’s choice.

through other comprehensive

model established to manage

measurement of impairment of

by the expected credit loss models

measured at fair value through other comprehensive income since the initial recognition of those

presence of an indication of loss.

.

Management evaluates the potential impact on the

applying the standard.



NEW EGYPTIAN ACCOUNTING STANDARD NO. (48) REVENUE FROM CONTRACTS WITH CLIENTS

•

•

• Determine the contract.

• Determine performance obligations.

• Determine the transaction price.

• Distribute the transaction price to the performance obligations.

•performance obligations.

The additional costs of obtaining

conditions are met.

have commercial substance in order

Management evaluates the potential impact

applying the standard.



A NEW EGYPTIAN ACCOUNTING STANDARD (49), "LEASING CONTRACTS", FINANCIAL LEASING AND FACTORING

The standard introduces a single accounting model for the lessor

in mind that lease contracts are

The lessor must classify each of its lease contracts either as an operating lease contract or as a

and present them as amounts due

to the net investment in the lease.

payments from the operating lease contracts as income in either the

regular basis.

the same time.

With the exception of

applies to leasing contracts

and to be processed

that arise under and subject

of the period of the annual

issued.

Management evaluates the potential impact on

standard.



REVISED EGYPTIAN ACCOUNTING STANDARD NO. (38) “EMPLOYEE BENEFITS”

and settlement of the employee periods beginning on or

Management is currently evaluating the potential

applying the adjustment to the standard.

MODIFIED EGYPTIAN ACCOUNTING STANDARD NO. (42)“CONSOLIDATED FINANCIAL STATEMENTS”

added except for the investing entities from the combination and this adjustment resulted in an adjustment of some of the criteria related to the subject of the investing entities.

application.

paragraphs are applied in relation to the criteria that have

of investing entities on the

There is no potential impact on the company’s books.



ISSUANCE OF EGYPTIAN ACCOUNTING INTERPRETATION NO. 1“ARRANGEMENTS OF PRIVILEGES FOR PUBLIC SERVICES”

This interpretation provides guidelines on accounting by

infrastructure for public utilities

etc.

This interpretation gives the option to continue to apply the previous treatment of

these types of arrangements

their period.

There is no potential impact on the company’s books.



EGYPTIAN ACCOUNTING STANDARD NO. (34) "REAL ESTATE INVESTMENT"

The fair value model option has been cancelled for all entities

of its real estate investments and commitment only to the

real estate investment funds only to use the fair value upon

their real estate assets.

This adjustment applies to There is no real estate

company.




W W W . R A Y A C O R P. C O M

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