REG - Hikma Pharmaceutical - Interim Results <Origin Href="QuoteRef">HIK.L</Origin> - Part 2
29/10/2014 14:01
- Part 2: For the preceding part double click ID:nRST5697Pa
2 171
Currency translation loss - (7) - (7) - - - (7) - (7)
Total comprehensive income for the period - (7) 169 162 - - - 162 2 164
Cost of equity settled employee share schemes - - 4 4 - - - 4 - 4
Dividends on ordinary shares (note 6) - - (34) (34) - - - (34) (1) (35)
Balance at 30 June 2014 (Unaudited) 38 (53) 851 836 35 281 (3) 1,149 18 1,167
Hikma Pharmaceuticals PLC
Condensed Consolidated Statement of Cash Flow
H1 H1 FY
2014 2013 2013
Note $m (Unaudited) $m (Unaudited) $m (Audited)
Net cash from operating activities 14 200 136 337
Investing activities
Purchases of property, plant and equipment (43) (27) (59)
Proceeds from disposal of property, plant and equipment - 1 1
Purchase of intangible assets (13) (3) (16)
Acquisition of interest in joint venture - - (3)
Investment in financial and other non-current assets (4) - (22)
Acquisition of subsidiary undertakings, net of cash acquired - (18) (18)
Finance income 1 1 2
Net cash used in investing activities (59) (46) (115)
Financing activities
Increase in collateralised and restricted cash - (4) (5)
Increase in long-term financial debts 5 7 7
Repayment of long-term financial debts (31) (91) (117)
Increase/(decrease) in short-term borrowings 45 (20) (34)
Increase/(decrease) in obligations under finance leases 4 (1) 1
Dividends paid (34) (19) (39)
Dividends paid to non-controlling shareholders of subsidiaries (1) (2) (3)
Purchase of own shares - - (4)
Interest paid (16) (18) (37)
Proceeds from issue of new shares - 2 2
Net cash used in financing activities (28) (146) (229)
Net increase/(decrease) in cash and cash equivalents 113 (56) (7)
Cash and cash equivalents at beginning of period/year 168 177 177
Foreign exchange translation movements 1 (1) (2)
Cash and cash equivalents at end of period/year 282 120 168
Hikma Pharmaceuticals PLC
Notes to the condensed set of financial statements
1. General information
The financial information for the year ended 31 December 2013 does not constitute statutory accounts within the meaning of
Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2013, which were prepared under
International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board, have been filed
with the Registrar of Companies. The auditor's report on those accounts was unqualified, did not draw attention to any
matters by way of emphasis and did not contain any statement under Section 498 (2) or (3) of the Companies Act 2006.
2. Accounting policies
The unaudited condensed set of financial statements for the six months ended 30 June 2014 have been prepared using the same
accounting policies and on a basis consistent with the audited financial statements of Hikma Pharmaceuticals PLC (the
'Group') for the year ended 31 December 2013 which are prepared in accordance with IFRSs as adopted by the European Union.
Basis of preparation
The currency used in the preparation of the accompanying condensed set of financial statements is the US Dollar ($) as the
majority of the Group's business in is conducted US Dollars.
The Group's condensed set of financial statements included in this half- yearly financial report have been prepared in
accordance with International Accounting Standards 34 'Interim Financial Reporting' as adopted by the European Union. They
were approved by the Board on 19 August 2014.
Taxes on income for interim periods are accrued using the tax rate that would be applicable to expected total annual
earnings.
Going concern
The Group has $473.2 million of undrawn facilities as at 30 June 2014. Of the undrawn facilities, $325.1 million were
committed. These facilities are well diversified across the subsidiaries of the Group with a number of financial
institutions.
We continue to expect the short-term facilities to be renewed upon maturity. In addition the Group maintained cash and cash
equivalents of $282 million as at 30 June 2014. The Group's forecasts, taking into account reasonable possible changes in
trading performance, facility renewal sensitivities and maturities of long-term debt, show that the Group should be able to
operate within the levels of its facilities.
On 15 July 2014 Hikma announced that it had completed its acquisition of assets of the US generic injectables business,
Bedford Laboratories ("Bedford") from Ben Venue Laboratories, Inc. ("Ben Venue"), a member of the Boehringer Ingelheim
Group of Companies. The total consideration for the acquisition is up to $300 million comprised of an upfront cash payment
of $225 million which was paid on 15 July 2014 and contingent cash payments of up to $75 million, subject to the
achievement of performance-related milestones over a period of five years from closing the transaction. Moreover, on 24
July 2014 Hikma announced that it had agreed with Ben Venue to acquire substantially all of the assets of their generic
injectables manufacturing site in Bedford, Ohio. The acquisition is pursuant to the exclusivity arrangement entered into
with Ben Venue on 28 May 2014. No incremental consideration will be payable in relation to Hikma's acquiring the Ben Venue
manufacturing site.
This upfront consideration of $225 million was financed by a bridge loan facility undertaken in July 2014.
Although the current economic conditions may affect short-term demand for our products, and place pressure on customers and
suppliers who may face liquidity issues, the Group's geographic spread, product diversity, large customer and supplier base
substantially mitigate these risks.
In addition, the Group operates in the relatively defensive generic pharmaceuticals industry which we expect to be less
affected compared to other industries that are subject to greater cyclical changes.
After making enquiries, the Directors believe that the Group is adequately placed to manage its business and financing
risks successfully despite the current uncertain economic outlook. Accordingly, they continue to adopt the going concern
basis in preparing the half-yearly set of condensed financial statement.
Changes in accounting policies
The same accounting policies, presentation and method of computation are followed in the condensed set of financial
statements as has been applied in the Group's latest annual audited financial statements.
Adoption of new and revised standards
The following new and revised Standards and Interpretations have been adopted in the current year. Their adoption has not
had any significant impact on the amounts reported in these financial statements but may impact the accounting for future
transactions and arrangements.
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IAS 27 (revised 2011) Separate Financial Statements
IAS 28 (revised 2011) Investment in Associates and Joint Ventures
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities
Amendments to IFRS 10, IFRS 12 and IAS 27 Investment entities
Amendments to IAS 36 Recoverable amount disclosures for Non-Financial assets
Amendments to IAS 39 Novation of Derivatives and continuation of hedge accounting
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been
applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by
the EU):
IFRIC 21 Levies
Amendments to IAS 19 Defined benefit plan: Employee contribution
Annual improvements to IFRSs 2010-12 Cycle (Dec 2013)
Annual improvements to IFRSs 2011-12 Cycle (Dec 2013)
IFRS 9 Financial instruments
IFRS 14 Regulatory deferral accounts
Amendments to IFRS 11 Accounting for acquisitions of interest in joint operations
Amendments to IAS 16 and IAS 38 Clarification of acceptable Methods of depreciation and amortisation
IAS24 Related Party Disclosures
The Directors do not expect that the adoption of the standards listed above will have a material impact on the financial
statements of the Group in future periods.
In addition to the above, IFRS 15: Revenue from contracts with customers has also been issued but is not yet effective.
IFRS 15 addresses recognition of revenue from customer contracts and impacts the amounts and timing of the recognition of
such revenue. The Group is yet to assess the impact of IFRS 15 on the consolidated financial statements.
3. Business and geographical segments
For management purposes, the Group is currently organised into three operating divisions - Branded, Injectables and
Generics. These divisions represent the Group's reportable segments under IFRS 8 and are the basis on which the Group
reports its primary segment information.
Segment information about these businesses is presented below.
Six months ended
30 June 2014 (unaudited) Branded Injectables Generics Others Group
$m $m $m $m $m
Revenue 259 346 128 5 738
Cost of sales (130) (131) (33) (3) (297)
Gross profit 129 215 95 2 441
Adjusted segment result 54 142 79 (3) 272
Exceptional items :
- Plant remediation costs - - (1) - (1)
Intangible amortisation* (5) (2) - - (7)
Segment result 49 140 78 (3) 264
Adjusted Unallocated corporate expenses (27)
Exceptional items :
- Acquisition related expenses (1)
Unallocated corporate expenses (28)
Adjusted operating profit 245
Operating profit 236
Associated companies
- Share of results (2)
Finance income 1
Finance expense (16)
Profit before tax 219
Tax (48)
Profit for the period 171
Attributable to:
Non-controlling interest 2
Equity holders of the parent 169
171
Segment result is defined as operating profit for each segment.
*Intangible amortisation comprises the amortisation of intangible assets other than software.
"Others" mainly comprise Arab Medical Containers Ltd, International Pharmaceutical Research Center Ltd and the chemicals
division of Hikma Pharmaceuticals Ltd (Jordan).
Unallocated corporate expenses are primarily made up of employee costs, office cost, professional fees, donations and
travel expenses.
30 June 2014 (Unaudited)
Branded Injectables Generics Corporate and Others Group
$m $m $m $m $m
Additions to property, plant and equipment (cost) 19 10 2 - 31
Additions to intangible assets (cost) 3 6 1 - 10
Total property, plant and equipment and intangible assets (net book value) 519 314 52 6 891
Depreciation 12 7 4 1 24
Amortisation (including software) 5 4 - - 9
Interest in associated companies - - - 20 20
Balance sheet
Total assets 1,266 583 136 78 2,063
Total liabilities 567 202 47 80 896
Six months ended
30 June 2013 (unaudited)
Branded Injectables Generics Others Group
$m $m $m $m $m
Revenue 257 246 132 3 638
Cost of sales (127) (122) (33) (3) (285)
Gross profit 130 124 99 - 353
Adjusted segment result 59 70 82 (3) 208
Exceptional items :
- Severance expenses (1) - - - (1)
- Plant remediation costs - - (19) - (19)
- Impairment losses - (5) (4) - (9)
- Other claims provision - - (10) - (10)
Intangible amortisation* (5) (2) - - (7)
Segment result 53 63 49 (3) 162
Unallocated corporate expenses (19)
Adjusted Operating Profit 189
Operating profit 143
Impairment of investment in associates (15)
Finance income 1
Finance expense (18)
Profit before tax 111
Tax (35)
Profit for the period 76
Attributable to:
Non-controlling interest 3
Equity holders of the parent 73
76
Segment result is defined as operating profit for each segment.
*Intangible amortisation comprises the amortisation of intangible assets other than software.
"Others" mainly comprise Arab Medical Containers Ltd, International Pharmaceutical Research Center Ltd and the chemicals
division of Hikma Pharmaceuticals Ltd (Jordan).
Unallocated corporate expenses are primarily made up of employee costs, office costs, professional fees, and travel
expenses.
30 June 2013 (Unaudited)
Branded Injectables Generics Corporate and Others Group
$m $m $m $m $m
Additions to property, plant and equipment (cost) 12 12 2 - 26
Acquisition of subsidaries' property, plant and equipment (net book value) 6 - - - 6
Additions to intangible assets (cost) 1 4 - - 5
Intangible assets arising on acquisition 19 - - - 19
Total property, plant and equipment and intangible assets (net book value) 510 293 50 6 859
Depreciation 10 7 4 1 22
Amortisation and impairment (including software) 5 7 4 - 16
Interest in associated companies - - - 23 23
Balance sheet
Total assets 1,050 492 142 48 1,732
Total liabilities 553 175 51 55 834
Year ended
31 December 2013 (Audited)
Branded Injectables Generics Others Group
$m $m $m $m $m
Revenue 554 536 268 7 1,365
Cost of sales (278) (254) (62) (7) (601)
Gross profit 276 282 206 - 764
Adjusted segment result 135 166 166 (9) 458
Exceptional items :
- Severance expenses (1) - - - (1)
- Plant remediation costs - - (24) - (24)
- Impairment losses - (6) (4) - (10)
- Other claims provisions - - (11) - (11)
Intangible amortisation* (10) (5) - - (15)
Segment result 124 155 127 (9) 397
Unallocated corporate expenses (45)
Adjusted operating profit 413
Operating profit 352
Associated companies
- Share of results (3)
- Exceptional impairment of investment (16)
Finance income 2
Finance expense (37)
Profit before tax 298
Tax (82)
Profit for the year 216
Attributable to:
Non-controlling interest 4
Equity holders of the parent 212
216
Segment result is defined as operating profit for each segment.
*Intangible amortisation comprises the amortisation of intangible assets other than software.
"Others" mainly comprise Arab Medical Containers Ltd, International Pharmaceutical Research Center Ltd and the chemicals
division of Hikma Pharmaceuticals Ltd (Jordan).
Unallocated corporate expenses are primarily made up of employee costs, office costs, professional fees, donations, and
travel expenses.
31 December 2013 (Audited)
Branded Injectables Generics Corporate and Others Group
$m $m $m $m $m
Additions to property, plant and equipment (cost) 25 31 10 - 66
Acquisition of subsidaries' property, plant and equipment (net book value) 6 - - - 6
Additions to intangible assets 3 13 2 - 18
Intangible assets arising on acquisition 20 - - - 20
Total property, plant and equipment and intangible assets (net book value) 519 314 51 6 890
Depreciation and impairment 22 17 8 2 49
Amortisation and impairment (including software) 10 12 4 - 26
investment in associates and joint ventures - - - 22 22
Balance sheet
Total assets 1,138 592 141 58 1,929
Total liabilities 551 259 25 60 895
The following table provides an analysis of the Group's sales by geographical market, irrespective of the origin of the
goods/services:
H1 2014 H1 2013 FY 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Middle East and North Africa 296 293 638
United States 396 297 631
Europe and Rest of the World 45 45 89
United Kingdom 1 3 7
738 638 1,365
The top selling markets were as below:
H1 2014 H1 2013 FY 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
United States 396 297 631
Saudi Arabia 68 61 132
Algeria 40 51 125
504 409 888
Included in revenues arising from the Generics and Injectables segments are revenues of approximately $121 million (30 June
2013: $82 million and 31 December 2013: $172 million) which arose from the Group's largest customer which is located in the
United States.
4. Exceptional items and intangible amortisation
Exceptional items are disclosed separately in the consolidated income statement to assist in the understanding of the
Group's underlying performance.
H1 2014 H1 2013 FY 2013
$m $m $m
Acquisition related expenses (1) - -
Other Costs:
Severance expenses - (1) (1)
Plant remediation costs (1) (19) (24)
Impairment losses - (9) (10)
Other claims provisions - (10) (11)
Exceptional items included in operating profit (2) (39) (46)
Impairment of investment in associates - (15) (16)
Exceptional items included in profit (2) (54) (62)
Intangible amortisation* (7) (7) (15)
Exceptional items and intangible amortisation (9) (61) (77)
Tax effect 2 12 15
Impact on profit for the period/ year (7) (49) (62)
*Intangible amortisation comprises the amortisation of intangible assets other than software.
Acquisition related expenses are costs incurred from acquiring Bedford Laboratories
(See note 18).
Plant remediation costs represent the remainder of costs incurred for compliance work at our Eatontown facility in response
to observations made by the US FDA. Remediation costs are included in other operating expenses.
In previous periods exceptional items relate to the following:
Other costs
Severance expenses in 2013 related to restructuring of management teams in MENA.
Impairment losses are related to the write off of intangible product rights (30 June 2013: $7 million and 31 December 2013:
$8 million), in addition to the write off of certain property, plant and equipment (30 June 2013: $2 million and 31
December 2013: $2 million). Impairment of intangible assets is included in research and development. Impairment of fixed
assets is included in other operating expenses.
Other claims provisions relate to the Group's best estimate of the ultimate settlement amount of claims outstanding in the
current period and is included in other operating expenses.
Impairment of investment in associates
During 2011, Hikma acquired a minority interest in Unimark Remedies Limited ("Unimark") in India for a cash consideration
of $34 million. Unimark manufactures active pharmaceutical ingredients ("API") and API intermediates. Unimark has been
impacted by a decline in prices in its API manufacturing business. In May 2014 they completed the restructuring of their
corporate debt.
During 2013 we recognised an impairment charge of $16 million (30 June 2013: $15 million) in respect of Unimark.
5. Tax
H1 2014 H1 2013 FY 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Current tax:
Foreign tax 54 40 123
Prior year adjustments - (1) -
Deferred tax (6) (4) (41)
48 35 82
Tax for the six month period is charged at 21.9% (H1 2013: 31.5%; FY 2013: 27.7%).
The application of tax law and practice is subject to some uncertainty and amounts are provided in respect of this. Issues
are raised during the course of regular tax audits and, although the outcome of open items cannot be predicted, no material
adverse impact on results is expected from such issues.
6. Dividends
H1 2014 H1 2013 FY 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2013 of 13.0 cents (2012: 7.5 cents) per share 26 19 19
Interim dividend for the year ended 31 December 2013 of 7.0 cents per share - - 14
Special final dividend for the year ended 31 December 2013 of 4.0 cents (2012: nil) per share 8 - -
Special interim dividend for the year ended 31 December 2013 of 3.0 cents (2012: nil) per share - - 6
34 19 39
The proposed interim dividend for the period ended 30 June 2014 is 7.0 cents (30 June 2013: 7.0 cents and 31 December 2013:
13.0 cents) per share plus a special dividend of 4.0 cents per share (30 June 2013: 3.0 cents and 31 December 2013: 4.0
cents).
Based on the number of shares in issues at 30 June 2014 (198,561,000), the unrecognised liability is $21,842,000.
7. Earnings per share
Earnings per share is calculated by dividing the profit attributable to equity holders of the parent by the weighted
average number of ordinary shares. The number of ordinary shares used for the basic and diluted calculations are shown in
the table below. Adjusted basic earnings per share and adjusted diluted earnings per share are intended to highlight the
adjusted results of the Group before exceptional items and intangible amortisation*. A reconciliation of the basic and
adjusted earnings used is also set out below:
H1 2014 H1 2013 FY 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders of the parent 169 73 212
Exceptional items 2 54 62
Intangible amortisation* 7 7 15
Tax effect of adjustments (2) (12) (15)
Adjusted earnings for the purposes of adjusted basic and diluted earnings per share being adjusted net profit attributable to equity holders of the parent 176 122 274
Number Number Number
Number of shares: m m m
Weighted average number of Ordinary Shares for the purposes of basic earnings per share 198 197 197
Effect of dilutive potential Ordinary Shares :
Share-based awards 2 1 1
Weighted average number of Ordinary Shares for the purposes of diluted earnings per share 200 198 198
H1 2014 H1 2013 FY 2013
Earnings per share Earnings per share Earnings per share
Cents Cents Cents
Basic 85.4 37.1 107.6
Diluted 84.5 36.9 107.1
Adjusted basic 88.9 61.9 139.1
Adjusted diluted 88.0 61.6 138.4
*Intangible amortisation comprises the amortisation of intangible assets other than software.
8. Investments in associates and joint ventures
A loss of $2 million, representing the Group's share of the result of Unimark Remedies Limited and Hubei Haosun
Pharmaceutical Co., Ltd, is included in the condensed consolidated income statement.
For the period ended 30 June 2014 For the period ended 30 June 2013 For the year ended 31 December 2013
Joint Ventures Associates Total Joint Ventures Associates Total Joint Ventures Associates Total
$m $m $m $m $m $m $m $m $m
Balance at 1 January 3 19 22 - 38 38 - 38 38
Additions - - - - - - 3 - 3
Share of loss - (2) (2) - - - - (3) (3)
Impairment of investment (see note 4) - - - - (15) (15) - (16) (16)
Balance at end of period/year 3 17 20 - 23 23 3 19 22
9. Inventories
30 June 30 June 31 December
2014 2013 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Finished goods 87 80 77
Work-in-progress 38 36 30
Raw and packing materials 169 139 149
Goods in transit 15 18 20
309 273 276
Goods in transit include inventory held at third parties whilst in transit between Group companies.
10. Trade and other receivables
30 June 30 June 31 December
2014 2013 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Trade receivables 358 338 385
Prepayments 47 39 40
VAT and sales tax recoverable 9 9 11
Interest receivable - 1 -
Employee advances 4 2 3
418 389 439
11. Trade and other payables
30 June 30 June 31 December
2014 2013 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Trade payables 122 101 120
Accrued expenses 82 79 105
Other payables 15 16 16
219 196 241
Other payable includes employee provident fund liability of $4 million (30 June 2013: $5 million and 31 December 2013:$5
million), which represents mainly outstanding contributions to the Hikma Pharmaceuticals Ltd (Jordan) retirement benefit
plan, on which the fund receives 5% interest.
Dividends payable to the previous shareholders of Arab Pharmaceutical Manufacturing Company of $3 million (30 June 2013:
$2 million and 31 December 2013: $2 million) are also included in other payables.
12. Other current liabilities
30 June 30 June 31 December
2014 2013 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Deferred revenue* 56 41 47
Return and free goods provision 28 27 29
Other provisions 25 21 24
109 89 100
* The Group's revenue recognition policy is to defer revenue until a reliable measurement can be made.
13. Current and non-current financial debts
Short-term financial debts
30 June 30 June 31 December
2014 2013 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Bank overdrafts 25 8 6
Import and export financing 114 94 89
Short-term loans 3 3 4
Current portion of long-term loans 61 67 60
203 172 159
Long-term financial debts
30 June 30 June 31 December
2014 2013 2013
$m $m $m
(Unaudited) (Unaudited) (Audited)
Long-term loans 298 355 323
Less: current portion of loans (61) (67) (60)
Long-term financial loans 237 288 263
Breakdown by maturity:
Within one year 61 67 60
In the second year 63 61 61
In the third year 61 60 60
In the fourth year 41 58 51
In the fifth year 62 39 76
Thereafter 10 70 15
298 355 323
14. Net cash from operating activities
H1 H1 FY
2014 2013 2013
$m (Unaudited) $m (Unaudited) $m (Audited)
Profit before tax 219 111 298
Adjustments for:
Depreciation, amortisation and impairment of:
Property, plant and equipment 24 22 49
Intangible assets 9 16 26
Investment in associate - 15 16
Movement on provisions - 1 9
Cost of equity-settled employee share schemes 4 4 7
Losses on disposal of Property, plant and equipment 1 - -
Finance income (1) (1) (2)
Interest and bank charges 16 18 37
Results from associates 2 - 3
Cash flow before working capital 274 186 443
Change in trade and other receivables 19 (63) (110)
Change in inventories (35) (2) (2)
Change in trade and other payables (6) 5 35
Change in other current liabilities 8 42 56
Change in other non- current liabilities - - (1)
Cash generated by operations 260 168 421
Income tax paid (60) (32) (84)
Net cash generated from operating activities 200 136 337
15. Related party balances
Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this
note. Transactions between the Group and its associate and other related parties are disclosed below.
Trading transactions:
During the period, Group companies entered into the following transactions with related parties:
Darhold Limited: is a related party of the Group because it is one of the major shareholders of Hikma Pharmaceuticals PLC
with an ownership percentage of 28.8% at 30 June 2014 (30 June 2013: 28.9% and 31 December 2013: 28.9%).
Other than dividends (as paid to all shareholders), there were no transactions between the Group and Darhold Limited during
the period.
Capital Bank - Jordan: is a related party of the Group because two Hikma Pharmacutical PLC board members are also board
members of Capital Bank - Jordan. Total cash balances at Capital Bank - Jordan were $22.3 million (30 June 2013: $2 million
and 31 December 2013: $17.2 million). Facilities granted by Capital Bank to the Group amounted to $4.6 million at 30 June
2014 (30 June 2013: $3.4 million and 31 December 2013: $4.7 million). Interest income and expense are at market rates.
Jordan International Insurance Company: is a related party of the Group because one board member of the Company is also a
board member of Hikma Pharmaceuticals PLC. Total insurance premiums paid by the Group to Jordan International Insurance
Company during the period were $0.1 million (30 June 2013: $0.3 million and 31 December 2013: $0.2 million). The Group's
insurance expense for Jordan International Insurance Company contracts in the period was $0.2 million (30 June 2013: $0.2
million and 31 December 2013: $0.2 million). The amounts due to Jordan International Insurance Company at 30 June 2014 were
$0.1 million (30 June 2013: $nil and 31 December 2013: $0.1 million).
Labatec Pharma SA: is a related party of the Group because it is owned by Mr. Samih Darwazah. During the period the Group
total sales to Labatec Pharma amounted to $0.2 million (30 June 2013: $0.2 million and 31 December 2013: $0.4 million). At
30 June 2014, the amount owed from Labatec Pharma to the Group was $0.1 million (30 June 2013: Owed from $0.4 million and
31 December 2013: $nil).
Jordan Resources & Investments Company: is a related party of the Group because three board members of the group are
shareholders in the firm. During the period fees of $nil were paid for training services provided (30 June 2013: $0.1
million and 31 December 2013: $0.2 million).
Arab Bank: is a related party of the group because one senior management member in Hikma Pharmaceutical PLC is also a board
member of Arab Bank PLC. Total cash balances at Arab Bank were $76.0 million (30 June 2013: $34.7 and 31 December 2013:
$51.5 million). Facilities granted by Arab Bank to the Group amounted to $161.0 million (30 June 2013: $179.2 million and
31 December 2013: $169.4 million). Interest expense/income is at market rates.
HikmaCure: The Group held 50:50 joint venture ("JV") agreement with MIDROC Pharmaceuticals Limited. The JV is called
HikmaCure. Hikma and MIDROC invested in HikmaCure in equal proportions and have committed to provide up to $22 million each
in cash of which $3 million has been paid in previous periods.
Unimark: The Group held a non-controlling interest of 23.1% in the Indian company Unimark Remedies Limited ("Unimark") at
30 June 2014 (30 June 2013: 23.1% and 31 Decemeber 2013: 23.1%). During the period the Group paid an amount of $0.1 million
in relation to a products development agreement (30 June 2013: $nil and 31 December 2013: $3 million).
Haosun:The Group held a non-controlling interest of 30.1% in Hubei Haosun Pharmaceutical Co., Ltd ("Haosun") at 30 June
2014 (30 June 2013: 30.1% and 31 December 2013: 30.1%). During the period total purchases from Haosun were $nil (30 June
2013: $nil and 31 December 2013: $0.2 million).
16. Contingent Liabilities
The integrated nature of the Group's worldwide operations, involving significant investment in research and strategic
manufacturing at a limited number of locations, with consequential cross-border supply routes into numerous end-markets,
gives rise to complexity and delay in negotiations with revenue authorities as to the profits on which individual
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