Published: Sep 22, 2014
Source: Tadawul


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Gulf Union announce the detailed explanation of the nature of the reservation contained in the report of the external auditor of the company for the interim financial statements ending on 30/06/2014Attachment

Gulf Union Cooperative Insurance Co. announce the detailed explanation of the nature of the reservation contained in the report of the External Auditor of the company for the Interim Financial Statements ending on 30/06/2014 As regards the reason for this reservation in receivables is the subject of a dispute with the Strategic Partner . Below is a detailed statement of the nature of these receivables:

1- This dispute dates back to the year 2011, where they were separation of financial accounts relating to the strategic partner and demands of the amount resulting from the reconciliation of several financial accounts showing in the accounting records, where responsibility falls on strategic partner therein during the period of administration of the company before the year of 2011consequently, This has resulted in the reconciliation of such financial accounts the amount of 22.5 million Saudi riyals a balance contained in the report of the External Auditor, and this account consists of several accounts and we present it as follows:

- Gulf Union Insurance and Project Management Holdings Bahrain debit amount of SR 36,226,869

- Gulf Union Insurance and Risk Management Bahrain debit amount SAR 116068

- Gulf Electronic Systems GEMS Bahrain debit amount of SAR 1,329,731

- Gulf Union Insurance and Reinsurance Bahrain creditor amount of SAR 5,671,083

- Gulf Union for car repairs Bahrain debit amount SAR 43,443

- ORYX Insurance Services Company Bahrain debit amount SAR 40062

- Reconciliations of related party reserve account creditor amount of SAR 9,836,918

For more clarifications and details about the nature of those accounts above and the reasons recorded in the accounting records and the steps taken by the company to address these balances Please see the attached file

2- And where that treatment of disputed balances with the strategic partner has take a lot of time which led to the agreement of the parties to the assign External Auditor Deloitte to review and audit those balances and express an opinion binding both parties. Moreover, after the Deloitte withdraw recently from this task that lasted 18 months, however we emphasize that the treatment of these balances is for the benefit of the company. whether positively or negatively it will be reflected in the company's results for the period and the future. In addition, we will be announcing in a timely manner any material changes therein

3- The time plan to address those financial balances depends on the reaction of strategic partner in ending this issue. Moreover, our Board of Directors is currently conducting notable contacts with strategic partner. as there are meetings and communicate with the Ms. Board Directors to discuss this issue and study it in order to develop better methods to resolve this dispute and communicate with strategic partner to bring together the opinions and work to develop solutions to those financial disputes .

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