1.

What are the main components of AL Americanas consolidated financial statements 2015?

A complete set of consolidated financial statements as set out in the Standard, comprises:
-

Statement of financial position, reports on AL Americanas assets, liabilities, and owners equity at a
certain period of time.

Statement

of

comprehensive

income, reports

on

AL

Americanas

income, expenses,

and profits over a period of time.

-

Statement of changes in equity, reports on the changes in equity of the company during the stated
period.

Statement of cash flows, reports on AL Americanas cash flow activities. The statement is divided
into three categories:

Operating activities the main revenue generating activities of the business, together with the
payment of interest and tax.

Investing activities the acquisition and disposal of long term assets and other investing
activities.

Financing activities receipts from the issue of new shares, payments for the redemption of
shares and changes in long term borrowings.

2.

Accounting policies and explanatory notes (also has its own specific IAS).

What are the standards and requirements that govern the preparation of the consolidated financial
statements?
Refer to page 56 of annual report for all IAS

3.

Principal activities
Al Americana is the Kuwait Food Company headquartered in Kuwait City. The principal activities of the
Parent Company and its subsidiaries are importing and manufacturing of food and beverages; sale of
such items on both a retail and wholesale basis in the State of Kuwait, and other Arab countries; and
investing the surplus funds in investment portfolios managed by specialized companies.
Al Americana is the largest integrated food company in Middle East. Al Americana main lines of business
are operating food and beverage outlets, and manufacturing food products. Americanas restaurants and
factories are located in 13 countries namely Kuwait, Kingdom of Saudi Arabia, United Arab Emirates,
Qatar, Kingdom of Bahrain, Sultanate of Oman, Arab Republic of Egypt, Jordan, Lebanon, Morocco, Iran,
Kazakhstan, and the Kurdistan province of Iraq. The Companys restaurants are presented in 111 cities
spread across the continents of Asia and Africa. The Companys activities are basically focused in four
countries: Kuwait, Saudi Arabia, UAE and Egypt.

The Americana brand is a unique brand in the Food Processing. As the brand Americana has so far
been used for a limited number of FMCG products, it still has a huge opportunity to be used in a wider
range of other food consumer goods segment. Americana holds the exclusive right for using the most
famous and popular brand names in the world, with 14 global restaurant chains and 9 home-grown chains
developed by Americana. The Company operates 738 outlets of the world famous fast-food brand
Kentucky Fried Chicken (KFC), the largest and fastest growing brand in the emerging markets. The
Company also operates 177 outlets of Pizza Hut and 307 of Hardees restaurants, a leading burger brand
worldwide. Americana has 58 TGI Fridays restaurants, the most unique casual dining restaurants chain.
Americana also operates 15 Olive Garden, Longhorn Steakhouse and Red Lobster restaurants. The
Company operates in addition to the above, other global chains such as Baskin Robbins and Krispy
Kreme and other home-grown chains, such as Chicken Tikka and Fish Market and others.
Furthermore, Americana owns and operates a range of popular brands in the FMCG sector including
Americana Meat, Americana Cake, Farm Frites, California Garden, Greenland, Lion, Zigo and
Windows at Senyorita Group, and Koki, Gulfa and other reputable brands.
Expanding in FMCG was also an implementation of the diversification strategy as Americana now
operates several food industries companies such as Farm Frites, California Garden, Senyorita and
Greenland. It also operates in the field of agriculture and land reclamation through successful companies
such as Americana for Land Reclamation and Cultivation Company and Karawin for Land Reclamation
Company. In addition, the Company has an active trading activity in Kuwait through the Commercial
Agencies Sector, and also operates poultry breeding and poultry product processing activities, feed
production activities under the umbrella of Cairo Poultry Group.
4.
Subsidiaries of the group

5 (a)
(b)

Subsidiaries

Principal activity

Kuwait food company

Gulf food industries company (California garden)
Al-Ahlia Food Industries Company
National Food Industries Company
Senyorita Group for Food Industries Company
Greenland Group of industries
The International Company for Agricultural
Development (Farm Frites)
International Company for Agricultural Production
and Processing (ICAPP)
Egyptian Canning Company
Cairo Poultry Group
Egyptian Starch and Glucose Production Company

Food processing
Food processing
Food processing
Cake manufacturer
Food stuff
Food stuff
Agricultural
development
Agricultural
development
Food stuff canning
Poultry
Manufacturing starch
& glucose

Country
UAE
UAE
KSA
KSA
Egypt
Egypt
Egypt
Egypt
Egypt
Egypt
Egypt

Refer to Management page 46

Auditors:

Deloitte & Touche - Al Wazzan & Co.

Of Parker Randall (Allied Accountants)

Responsibility and standards: refer to page 48

Assets = Liabilities + Equity

Non current assets + Current assets = Non current liabilities + Current liabilities + Equity
331,619 + 361,047 = 54,770 + 236,971 + 400,925
692,666 = 291,741 + 400,925

7.

The Companys sales for the year 2015 amounted to KD 968.3 million, whereas in 2014 it was KD 922.3 m.
So the sales during 2015 increase by KD .046m i.e up by 5% over the previous year. It shows the
Companys performance and its success in achieving steady growth in sales, year after year, in spite of
the economic challenges and unexpected developments in the region.

8.

During 2015 the Company achieved a net profit of KD 43.9 m whereas during 2014 it achieved a net profit
of KD 52m, therefore a decline of 16% compared to the previous year. This shows the company was
better off in 2014 as compared. This decline of the Companys profits in 2015 is mainly due to the adverse
factors and economic turbulence and events in the markets in which the Company operates.

9.

Current ratio = Current Assets

Current Liabilities
Current ratio (2015) = 361,067 = 1.52 : 1
236,971
Current ratio (2014) = 331,914 = 1.44 : 1
230,419
The current ratio looks at the relationship between current assets and current liabilities. This would be
considered a healthy result showing that current assets are sufficient to pay current liabilities as they fall
due. During 2015, for the company its ability to pay immediate debts has improved slightly as the ratio
increases from 1.44 to 1.52. Historically, ratio below 2:1 gave cause for concern about the ability of a
business to meet its debts and trade successfully, but more recently businesses are tending to work
within a ratio of 1:1. However the liquidity can be assessed further by using the quick ratio as it

measures liquidity more precisely than the current ratio. This is because it ignores the value of inventory
within current assets.
Quick ratio = Current Assets - Inventories
Current Liabilities
Quick ratio (2015) = 361,067 114,943 = 1.04 : 1
236,971
Quick ratio (2014) = 331,914 109,451 = 0.96 : 1
230,419
In both years quick ratio is ideal to 1:1 it shows the company is not dependent on the sale of its
inventories to cover current liabilities from current assets. Again, it shows the ability of the company to
meet its immediate debts as it has enough current assets.

10.

Debt ratio = Total Liabilities

Total Assets
Debt ratio (2015) = 291,741 = 0.42 :1
692,666

Debt ratio (2014) = 282,659 = 0.41 :1

688,192

The debt ratio shows how many assets the company must sell in order to pay off all of its liabilities. A
lower debt ratio usually implies a more stable business with the potential of longevity because a company
with lower ratio also has lower overall debt. Each industry has its own benchmarks for debt, but 0.5 is
reasonable ratio. For both years it remains constant implies Al Americana is less risky. This means that
the company has more than twice as many assets as liabilities. Essentially, only its creditors own half of
the company's assets and the shareholders own the remainder of the assets.