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ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
INDEX
PAGES
INDEPENDENT AUDITORS’ REPORT ON REVIEW OF CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS 1-2
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2018 3
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018 4
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018 5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018 6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018 7
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018 8 -26
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
8
1. THE COMPANY, ITS SUBSIDIARIES AND ITS BUSINESS DESCRIPTION
Almarai Company (the “Company”) is a Saudi Joint Stock Company, which was converted from a limited liability company to a
joint stock company on 2 Rajab 1426 A.H. (8 August 2005). The Company initially commenced trading on 19 Dul Hijjah 1411 A.H.
(1 July 1991) and operates under Commercial Registration No. 1010084223. Prior to the consolidation of activities in 1991, the core
business was trading between 1977 and 1991 under the Almarai brand name.
The Company’s Head Office is located at Exit 7, North Ring Road, Al Izdihar District, P.O. Box 8524, Riyadh 11492, Kingdom of
Saudi Arabia (“Saudi Arabia”).
The Company and its subsidiaries (together, the “Group”) are a major integrated consumer food and beverage Group in the
Middle East with leading market shares in Saudi Arabia. It also operates in other Gulf Cooperation Council (“GCC”) countries,
Egypt and Jordan.
Dairy, Fruit Juices and related Food Business is operated under the “Almarai”, “Beyti” and “Teeba” brand names. All raw milk
production, Dairy and Fruit Juice product processing and related food product manufacturing activities are undertaken in Saudi
Arabia, United Arab Emirates (“UAE”), Egypt and Jordan.
Dairy, Fruit Juices and related Food Business in Egypt and Jordan operates through International Dairy and Juice Limited
(“IDJ”), a joint venture with PepsiCo, in which the Company holds controlling interest. The Group manages IDJ operations
through following key subsidiaries:
Jordan - Teeba Investment for Developed Food Processing
Egypt - International Company for Agricultural Industries Projects (Beyti) (SAE)
Bakery products are manufactured and traded by Western Bakeries Company Limited and Modern Food Industries Company
Limited, a joint venture with Chipita in which the Company holds controlling interest, under the brand names “L’usine” and “7
Days” respectively.
Poultry products are manufactured and traded by Hail Agricultural Development Company under the “Alyoum” brand name.
Infant Nutrition products are manufactured by Almarai Baby Food Company Limited and traded by International Pediatric
Nutrition Company under “Nuralac” and “Evolac” brands.
In territories where the Group has operations, final consumer packed products are distributed from manufacturing facilities to
local distribution centres by the Group’s long haul distribution fleet. The distribution centres in Gulf Cooperation Council (GCC)
countries are managed through subsidiaries (UAE, Oman and Bahrain) and Agency Agreements (Kuwait and Qatar) as
follows:
UAE - Almarai Emirates Company L.L.C
Oman - Arabian Planets for Trading and Marketing L.L.C.
Bahrain - Almarai Company Bahrain S.P.C
Kuwait - Al Kharafi Brothers Dairy Products Company Limited
Qatar - Khalid for Foodstuff and Trading Company
In other territories, where permissible by law, Dairy and Juice products are exported through IDJ, other products are exported
through other subsidiaries. Since 6 June 2017, the Group has suspended its operations in Qatar.
The Group owns and operates arable farms in Argentina and in United States of America, collectively referred to as
“Fondomonte”, through following key subsidiaries:
USA - Fondomonte Holdings North America L.L.C
Argentina - Fondomonte South America S.A
The Group’s non GCC business operations under IDJ and Fondomonte are managed through Almarai Investment Holding
Company W.L.L., a Company incorporated in the Kingdom of Bahrain.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
9
Details of subsidiary companies are as follows:
Direct
(a)Effective
Direct
(a)Effective
Almarai Investment Company
LimitedSaudi Arabia Holding Company SAR 100% 100% 100% 100%
SAR
1,000,0001,000 - - -
Almarai Baby Food Company
LimitedSaudi Arabia
Manufacturing
CompanySAR 100% 100% 100% 100%
SAR
200,000,00020,000,000 - 199,993 -
Almarai Agricultural And Livestock
Production CompanySaudi Arabia
Livestock /
Agricultural CompanySAR 100% 100% 100% 100%
SAR
1,000,0001,000 - - -
Almarai Construction Company Saudi ArabiaConstruction
CompanySAR 100% 100% 100% 100%
SAR
1,000,0001,000 - - -
Almarai for Maintenance and
Operation CompanySaudi Arabia
Maintenance and
OperationSAR 100% 100% 100% 100%
SAR
1,000,0001,000 - - -
Agricultural Input Company Limited
(Mudkhalat)Saudi Arabia Agricultural Company SAR 52% 52% 52% 52%
SAR
25,000,000250 - - -
Hail Agricultural Development
CompanySaudi Arabia
Poultry / Agricultural
CompanySAR 100% 100% 100% 100%
SAR
300,000,00030,000,000 - 901,335 -
Hail Agricultural And Livestock
Production CompanySaudi Arabia
Poultry / Agricultural
CompanySAR 100% 100% 100% 100%
SAR
1,000,0001,000 - - -
International Baking Services
Company LimitedSaudi Arabia Dormant SAR 100% 100% 100% 100%
SAR
500,000500 - - -
International Pediatric Nutrition
CompanySaudi Arabia Dormant SAR 100% 100% 100% 100%
SAR
41,000,000410,000 - - -
Modern Food Industries Company
LimitedSaudi Arabia Bakery Company SAR 60% 60% 60% 60%
SAR
70,000,00070,000 - 28,429 -
Nourlac Company Limited Saudi Arabia Trading Company SAR 100% 100% 100% 100%SAR
3,000,0003,000 - - -
Western Bakeries Company Limited Saudi Arabia Bakery Company SAR 100% 100% 100% 100%SAR
200,000,000200,000 - 209,343 -
Number of
Shares
Issued
2018 2017Name of Subsidiary
Country of
Incorporation
Business
Activity
Functional
Currency
Ownership Interest
Share
Capital
Conventional
Investment
SAR
'000
Conventional
Borrowing
SAR
'000
Interest Income
SAR
'000
(a) Direct ownership means directly owned by the Company or any of its subsidiaries.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
10
Direct
(a)Effective
Direct
(a)Effective
Agro Terra S.A. Argentina Dormant ARS 100% 100% 100% 100%ARS
475,875475,875 - - -
Fondomonte South America S.A. Argentina Agricultural Company ARS 100% 100% 100% 100%ARS
1,286,096,5981,286,096,598 - 45,419 -
Almarai Company Bahrain S.P.C. Bahrain Trading Company BHD 100% 100% 100% 100%BHD
100,000 2,000 - - -
Almarai Investment Holding
Company W.L.L.Bahrain Holding Company BHD 99% 99% 99% 99%
BHD
250,0002,500 - - -
IDJ Bahrain Holding Company
W.L.L.Bahrain Holding Company BHD 100% 52% 100% 52%
BHD
250,0002,500 - - -
International Dairy and Juice LimitedBritish Virgin
IslandsHolding Company USD 52% 52% 52% 52%
USD
7,583,3347,583,334 - 16,875 -
International Dairy and Juice
(Egypt) LimitedEgypt Holding Company EGP 100% 52% 100% 52%
EGP
1,101,750,000110,175,000 - 395,947 -
International Company for
Agricultural Industries Projects
(Beyti) (SAE)
EgyptManufacturing and
Trading Company EGP 100% 52% 100% 52%
EGP
1,717,250,000171,725,000 - - -
Markley Holdings Limited Jersey Dormant GBP 100% 100% 100% 100% - - - - -
Al Muthedoon for Dairy Production Jordan Dormant JOD 100% 52% 100% 52%JOD
500,000500,000 - - -
Al Atheer Agricultural Company JordanLivestock /
Agricultural Company JOD 100% 52% 100% 52%
JOD
750,000750,000 - - -
Al Namouthjya for Plastic Production Jordan Dormant JOD 100% 52% 100% 52%JOD
250,000250,000 - - -
Al Rawabi for juice and UHT milk
Manufacturing Jordan
Manufacturing
Company JOD 100% 52% 100% 52%
JOD
500,000500,000 - - -
2018 2017Name of Subsidiary
Country of
Incorporation
Business
Activity
Functional
Currency
Ownership Interest
Share
Capital
Number of
Shares
Issued
Conventional
Investment
SAR
'000
Conventional
Borrowing
SAR
'000
Interest Income
SAR
'000
(a) Direct ownership means directly owned by the Company or any of its subsidiaries.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
11
Direct
(a)Effective
Direct
(a)Effective
Teeba Investment for Developed
Food ProcessingJordan
Manufacturing
Company JOD 100% 52% 100% 52%
JOD
49,675,35249,675,352 - 103,984 -
Arabian Planets for Trading and
Marketing L.L.C.Oman Trading Company OMR 90% 90% 90% 90%
OMR
150,000150,000 - 150,156 -
Alyoum for Food Products
Company L.L.C.Oman Dormant OMR 100% 100% 100% 100%
OMR
20,000 20,000 - - -
Fondomonte Inversiones S.L. Spain Holding Company EUR 100% 100% 100% 100%EUR
118,515,547118,515,547 - - -
Hail Development Company Limited Sudan Agricultural Company SDG 100% 100% 100% 100%SDG
100,000100 - - -
Almarai Emirates Company L.L.C.United Arab
EmiratesTrading Company AED 100% 100% 100% 100%
AED
300,000
(Unpaid)
300 - - -
International Dairy and Juice
(Dubai) Limited
United Arab
EmiratesHolding Company USD 100% 52% 100% 52%
USD
22,042,18322,042,183 - - -
BDC international L.L.C.United Arab
Emirates
Operations
Management AED 100% 100% 100% 100%
AED
200,000
(Unpaid)
200
International Dairy and Juice Farm
Egypt (S.A.E.)Egypt Holding Company EGP 100% 52% 100% 52%
EGP
1,000,000100,000
Fondomonte Holding North America
L.L.C.
United States of
AmericaHolding Company USD 100% 100% 100% 100%
USD
500,00050,000 - 113,423 -
Fondomonte Arizona L.L.C.United States of
AmericaAgricultural Company USD 100% 100% 100% 100%
USD
500,00050,000 - - -
Fondomonte California L.L.C.United States of
AmericaAgricultural Company USD 100% 100% 100% 100% - - - - -
Hayday Farm Operation L.L.C.United States of
AmericaAgricultural Company USD 100% 100% Nil Nil - - - - -
Share
Capital
Number of
Shares
Issued
2018 2017Name of Subsidiary
Country of
Incorporation
Business
Activity
Functional
Currency
Ownership Interest Conventional
Investment
SAR
'000
Conventional
Borrowing
SAR
'000
Interest Income
SAR
'000
(a) Direct ownership means directly owned by the Company or any of its subsidiaries.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
12
2. BASIS OF PREPARATION
2.1 Statement of Compliance
These Condensed Consolidated Interim Financial Statements have been prepared in accordance with IAS 34 Interim
Financial Reporting that is endorsed in Kingdom of Saudi Arabia and other standards and pronouncements that are issued
by Saudi Organization for Certified Public Accountants (“SOCPA”) and should be read in conjunction with the Group’s last
annual Consolidated Financial Statements as at and for the year ended 31 December 2017 (“last annual Financial
Statements”). They do not include all of the information required for a complete set of IFRS Financial Statements however,
accounting policies and selected explanatory notes are included to explain events and transactions that are significant to
an understanding of the changes in the Group’s financial position and performance since the last annual Financial
Statements.
This is the first set of Condensed Consolidated Interim Financial Statements where IFRS 15 and IFRS 9 have been applied.
Changes to significant accounting policies are described in Note 5B.
2.2 Preparation of The Financial Statements
These Condensed Consolidated Interim Financial Statements have been prepared on the historical cost basis except for
the following material items in the Consolidated Statement of Financial Position:
Derivative financial instruments are measured at fair value.
Equity investment at FVOCI is measured at fair value.
The defined benefit obligation is recognised at the present value of future obligations using the Projected Unit Credit
Method.
Biological Assets, for which market is available, have been valued at fair value.
2.3 Use of Judgments and Estimates
In preparing these Condensed Consolidated Interim Financial Statements, management has made judgments and
estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and
expense. Actual results may differ from these estimates.
The significant judgments made by management in applying the Group’s accounting policies and the key sources of
estimation uncertainty were the same as those described in the last annual Financial Statements, except for new
significant judgments and key sources of estimation uncertainty related to the application of IFRS 15 and IFRS 9, which are
described in Note 5B.
3. BASIS OF CONSOLIDATION
3.1 These Condensed Consolidated Interim Financial Statements comprising the Condensed Consolidated Statement of
Financial Position, Condensed Consolidated Statement of Profit or Loss, Condensed Consolidated Statement of
Comprehensive Income, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Statement
of Cash Flows and Notes to the Condensed Consolidated Interim Financial Statements of the Group include assets,
liabilities and the results of the operations of the Company and its subsidiaries, as set out in note (1). The Company and its
subsidiaries are collectively referred to as the “Group”. Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control
commences until the date on which control ceases. The Group accounts for the business combinations using the
acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally
measured at fair value, as are the identified net assets acquired. The excess of the cost of acquisition and fair value of Non –
Controlling Interest (“NCI”) over the fair value of the identifiable net assets acquired is recorded as goodwill in Condensed
Consolidated Statement of Financial Position. NCI is measured at their proportionate share of the acquiree’s identifiable net
assets at the date of acquisition. The portion of profit or loss and net assets not controlled by the Group is presented
separately in the Condensed Consolidated Statement of Profit or Loss and within equity in the Condensed Consolidated
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
13
BASIS OF CONSOLIDATION (Continued…)
Statement of Financial Position. Intra-group balances and transactions, and any unrealised income and expenses arising
from intra-group transactions, are eliminated. Accounting policies of subsidiaries are aligned, where necessary, to ensure
consistency with the policies adopted by the Group. The Company and its subsidiaries have the same reporting periods.
4. FUNCTIONAL AND PRESENTATION CURRENCY
These Condensed Consolidated Financial Statements are presented in Saudi Riyal (“SAR”), which is the Company’s functional
and presentation currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
5. SIGNIFICANT ACCOUNTING POLICIES
A. New Standards, Amendments and Standards issued and not yet effective:
New Standards, Amendment to Standards and Interpretations:
The Group has adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments from 1 January
2018, the effect of application of these standards have been fully explained in note 5 B. A number of other new standards,
amendments to standards are effective from 1 January 2018 but they do not have a material effect on the Group’s
Consolidated Financial Statements.
Standards issued but not yet effective
Following are the new standards and amendments to standards which are effective for annual periods beginning after 1
January 2018 and earlier application is permitted; however, the Group has not early adopted them in preparing these
Condensed Consolidated Interim Financial Statements.
a. IFRS 16 Leases
IFRS 16 introduces a single, on-balance lease sheet accounting model for lessees. A lessee recognises a right-of-use
asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease
payments. There are optional exemptions for short-term leases and leases of low value items. Lessor accounting
remains similar to the current standard – i.e. lessors continue to classify leases as finance or operating leases.
IFRS 16 replaces existing leases guidance including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement
contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving
the Legal Form of a Lease.
The standard is effective for annual periods beginning on or after 1 January 2019 and earlier adoption is permitted.
The Group has completed an initial assessment of the potential impact on its Consolidated Financial Statements but
has not yet completed its detailed assessment. The actual impact of applying IFRS 16 on the financial statements in the
period of initial application will depend on future economic conditions, including the Group’s borrowing rate at 1 January
2019, the composition of the Group’s lease portfolio at that date, the Group’s latest assessment of whether it will exercise
any lease renewal options and the extent to which the Group chooses to use practical expedients and recognition
exemptions.
Thus far, the most significant impact identified is that the Group will recognise new assets and liabilities for its operating
leases of depot warehouses. In addition, the nature of expenses related to those leases will now change because IFRS
16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest
expense on lease liabilities.
No significant impact is expected for the Group’s finance leases.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
14
SIGNIFICANT ACCOUNTING POLICIES (Continued…)
Determining whether an arrangement contains a lease
On transition to IFRS 16, the Group can choose whether to:
- Apply the IFRS 16 definition of a lease to all its contracts; or
- Apply a practical expedient and not reassess whether a contract is, or contains, a lease.
Transition
As a lessee, the Group can either apply the standard using a:
- Retrospective approach; or
- Modified retrospective approach with optional practical expedients.
The lessee applies the election consistently to all of its leases. The Group currently plans to apply IFRS 16 initially on 1
January 2019. The Group has not yet determined which transition approach to apply.
As a lessor, the Group is not required to make any adjustments for leases in which it is a lessor except where it is an
intermediate lessor in a sub-lease.
b. Annual Improvements to IFRSs 2015–2017 Cycle
IFRS 3 Business Combinations and IFRS 11 Joint Arrangements - clarifies how a company accounts for increasing its
interest in a joint operation that meets the definition of a business.
- If a party maintains (or obtains) joint control, then the previously held interest is not remeasured.
- If a party obtains control, then the transaction is a business combination achieved in stages and the acquiring party
remeasures the previously held interest at fair value.
IAS 12 Income Taxes - clarifies that all income tax consequences of dividends (including payments on financial
instruments classified as equity) are recognised consistently with the transactions that generated the distributable
profits – i.e. in profit or loss, other comprehensive income or equity.
IAS 23 Borrowing Costs - clarifies that the general borrowings pool used to calculate eligible borrowing costs excludes
only borrowings that specifically finance qualifying assets that are still under development or construction. Borrowings
that were intended to specifically finance qualifying assets that are now ready for their intended use or sale – or any non-
qualifying assets – are included in that general pool. As the costs of retrospective application might outweigh the
benefits, the changes are applied prospectively to borrowing costs incurred on or after the date an entity adopts the
amendments.
c. IFRIC 23 Uncertainty over Income Tax Treatments
Seeks to bring clarity to the accounting for income tax treatments that have yet to be accepted by tax authorities. The
key test is whether it’s probable that the tax authority will accept the Group’s chosen tax treatment.
d. Other Amendments
The following amendment to standards are not yet effective and neither expected to have a significant impact on the
Group’s Consolidated Financial Statements:
- Prepayment Features with Negative Compensation (Amendments to IFRS 9)
- Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)
- Plan Amendments, Curtailment or Settlement (Amendments to IAS 19)
B. Changes in significant accounting policies:
Except as described below, the accounting policies applied in these Condensed Consolidated Interim Financial Statements
are the same as those applied in the last annual Financial Statements as at and for the year ended 31 December 2017. The
changes in accounting policies are also expected to be reflected in the last annual Financial Statements as at and for the year
ending 31 December 2018.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
15
SIGNIFICANT ACCOUNTING POLICIES (Continued…)
The Group has initially adopted IFRS 15 Revenue from Contracts with Customers (see a) and IFRS 9 Financial Instruments
(see b) from 1 January 2018.
The effect of initially applying these standards is mainly attributed to the following:
–Presentation of Revenue net off sales return (see a below); and
–an increase in impairment losses recognised on financial assets (see b below)
(a) IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It
replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Group recognizes revenue when a
customer obtains controls of the goods at a point in time i.e. on delivery and acknowledgement of goods, which is in line with
the requirements of IFRS 15. Accordingly, there is no material effect of adopting ‘IFRS 15 Revenue from Contracts with
Customers’ on the recognition of Revenue of the Group.
The details of the new significant accounting policies and the nature of the changes to previous accounting policies in
relation to the Group’s sale of goods are set out below.
Type of Product Nature, timing of satisfaction of performance
obligations, significant payment terms
Nature of change in accounting
policy
Consumer Products of
Dairy, Poultry, Bakery, Baby
Foods and Other Segments
Customers obtain control of products when the
goods are delivered to and have been accepted
at their premises. Invoices are generated and
revenue is recognised at that point in time. Credit
invoices are usually payable within 30 - 60 days.
Invoice is generated and recognised as revenue
net off applicable discounts which relate to the
items sold. No customer loyalty points are
offered to customers and therefore there is no
deferred revenue to be recognised for the items
sold.
For contracts that permit the customer to return
an item, under IFRS 15 revenue is recognised to
the extent that it is probable that a significant
reversal in the amount of cumulative revenue
recognised will not occur. Therefore, the amount
of revenue recognised is adjusted for expected
returns, which are estimated based on the
historical data. Returned goods are not useable
and scrapped by the Group and related liability is
recorded in ‘Other Payables’ for Cash sales and
adjusted against ‘Trade Receivables’ in respect
of credit sales.
Under IAS 18, revenue for contracts
with customers was also recognised
when the goods were delivered to
and were accepted by the customers
at their premises and a reasonable
estimate of sales return could be
made. However, estimated sales
return was recognised under Cost of
Sales, instead of netting off against
Revenue, with a corresponding
liability in ‘Other Payables’ for cash
sales and a provision for sales return
against ‘Trade receivables’ for credit
sales.
The impact of this change is that
revenue is decreased with the
amount of expected sales return.
The Group has adopted IFRS 15 using the cumulative effect method, with the effect of applying this standard recognised at
the date of initial application ( i.e. 1 January 2018). Accordingly, the information presented for previous year has not been
restated, as previously reported, under IAS 18 and related interpretations.
The following table summarises the impact of adopting IFRS 15 on the Group’s Condensed Consolidated Statement of
Profit or Loss for the three months period ended 31 March 2018, for the relevant Financial Statement line items affected.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
16
SIGNIFICANT ACCOUNTING POLICIES (Continued…)
Impact on the Condensed Consolidated Statement of Profit or Loss.
For the three months period ended 31
March 2018
As Reported Adjustment Amounts without
adoption of IFRS 15
SAR '000 SAR '000 SAR '000
Revenue 3,232,205 27,096 3,259,301
Cost of Sales (1,979,394) (27,096) (2,006,490)
Gross Profit 1,252,811 - 1,252,811
(b) IFRS 9 Financial Instruments
IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy
or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.
The details of new significant accounting policies and the nature and effect of the changes to previous accounting policies
are set out below.
i) Classification and measurement of financial assets and financial liabilities
IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities.
However, it eliminates the previous IAS 39 categories for financial assets of held to maturity, loans and receivables and
available for sale.
The adoption of IFRS 9 has not had a significant effect on the Group’s accounting policies related to financial liabilities
and derivative financial instruments (for derivatives that are used as hedging instruments, see (iii) below). The impact of
IFRS 9 on the classification and measurement of financial assets is set out below.
Under IFRS 9, on initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt
investment; FVOCI – equity investment; or FVTPL. The classification of financial assets under IFRS 9 is generally based
on the business model in which a financial asset is managed and its contractual cash flow characteristics. Derivatives
embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the
hybrid financial instrument as a whole is assessed for classification.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
FVTPL:
– it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
– it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL.
This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset
that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates
or significantly reduces an accounting mismatch that would otherwise arise.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
17
SIGNIFICANT ACCOUNTING POLICIES (Continued…)
A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the
transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition.
The following accounting policies apply to the subsequent measurement of financial assets.
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including
any interest or dividend income, are recognised in profit or loss. See (iii) below for
derivatives designated as hedging instruments.
Financial assets at
amortised
cost
These assets are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses (see (ii) below).
Interest income, foreign exchange gains and losses and impairment are recognised in
profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income calculated
using the effective interest method, foreign exchange gains and losses and
impairment are recognised in profit or loss. Other net gains and losses are recognised
in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to
profit or loss.
Equity investments at
FVOCI
These assets are subsequently measured at fair value. Dividends are recognised as
income in profit or loss unless the dividend clearly represents a recovery of part of the
cost of the investment. Other net gains and losses are recognised in OCI and are never
reclassified to profit or loss.
The effect of adopting IFRS 9 on the carrying amounts of financial assets at 1 January 2018 relates solely to the new
impairment requirements, as described further below.
The following table and the accompanying notes below explain the original measurement categories under IAS 39 and
the new measurement categories under IFRS 9 for the class of the Group’s financial assets as at 1 January 2018.
NoteOriginal Classification
under IAS 39
New classification
under IFRS 9
Original carrying
amount under
IAS 39
New carrying
amount under
IFRS 9
Financial Assets SAR '000 SAR '000
Trade Receivables b) Loans and Receivables Amortised Cost 1,042,023 1,042,023
Cash and bank
balancesLoans and Receivables Amortised Cost 1,891,697 1,891,697
3,024,431 3,024,431
90,711 FVOCI – equity
instrument
Total
Equity Investment a) Available for Sale 90,711
a) These equity securities represent investments that the Group intends to hold for the long term for strategic purposes.
As permitted by IFRS 9, the Group has designated these investments at the date of initial application as measured at
FVOCI. Unlike IAS 39, the accumulated fair value reserve related to these investments will never be reclassified to
profit or loss.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
18
SIGNIFICANT ACCOUNTING POLICIES (Continued…)
b) Trade and other receivables that were classified as loans and receivables under IAS 39 are now classified at
amortised cost. An increase of SAR 12.6 million in the allowance for impairment over these receivables was not
recognised in the opening retained earnings at 1 January 2018 on transition to IFRS 9 as the amount was not material.
ii) Impairment of financial assets
IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ (ECL) model. The new impairment
model applies to financial assets measured at amortised cost, contract assets and debt investments at FVOCI, but not
to investments in equity instruments. Under IFRS 9, credit losses are recognised earlier than under IAS 39.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A
financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
Presentation of impairment
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the
assets.
Impairment losses related to trade receivables are presented separately in the Condensed Consolidated Statement of
Profit or Loss and OCI. As a result, the Group reclassified impairment losses amounting to SAR 5.1 million, recognised
under IAS 39, from ‘Selling and Distribution Expense’ to ‘impairment loss on trade receivables in the Condensed
Consolidated Statement of Profit or Loss for the three months ended 31 March 2017.
iii) Hedge Accounting
IFRS 9 requires the Group to ensure that hedge accounting relationships are aligned with its risk management
objectives and strategy and to apply a more qualitative and forward-looking approach to assessing hedge
effectiveness.
All hedging relationships designated under IAS 39 at 31 December 2017 met the criteria for hedge accounting under
IFRS 9 at 1 January 2018 and are therefore regarded as continuing hedging relationships.
Under IAS 39, for all cash flow hedges, the amounts accumulated in the cash flow hedge reserve were reclassified to
profit or loss as a reclassification adjustment in the same period as the hedged expected cash flows affected profit or
loss. However, under IFRS 9, for cash flow hedges of foreign currency risk associated with forecast inventory
purchases, the amounts accumulated in the cash flow hedge reserve are instead included directly in the initial cost of
the inventory item when it is recognised. Group is already following the treatment recommended under IFRS 9 for cash
flow hedges.
iv) Transition
The Group has taken an exemption not to restate comparative information for prior periods with respect to classification
and measurement (including impairment) requirements. Differences in the carrying amounts of financial assets and
financial liabilities resulting from the adoption of IFRS 9 are not recognised in retained earnings as at 1 January 2018 as
amount was not material. Accordingly, the information presented for 2017 does not generally reflect the requirements of
IFRS 9 but rather those of IAS 39.
The following assessments have been made on the basis of the facts and circumstances that existed at the date of
initial application.
- The determination of the business model within which a financial asset is held.
- The designation and revocation of previous designations of certain financial assets
- The designation of certain investments in equity instruments not held for trading as at FVOCI.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
19
6. INVESTMENTS
The investments in associates, joint ventures and equity investments at FVOCI comprise of the following:
31 March
2018
(Unaudited)
31 December
2017
(Audited)
31 March
2018
(Unaudited)
31 December
2017
(Audited)
% % SAR '000 SAR '000
Investments in
Agricultural sector
Saudi Arabia 33.0% 33.0% 44,341 63,588
Poultry Saudi Arabia 41.9% 41.9% 63,593 65,637
Almarai Company W.L.L. Dormant Qatar 50.0% 50.0% 204 204
108,138 129,429
31 March
2018
(Unaudited)
31 December
2017
(Audited)
31 March
2018
(Unaudited)
31 December
2017
(Audited)
% % SAR '000 SAR '000
Saudi Arabia - ("Zain") 2.1% 2.1% 88,974 90,711
88,974 90,711
Total 197,112 220,140
Mobile Telecommunications Company
Equity Investment at FVOCI
(Refer note 6.2)
Place of
Incorporation
United Farmers Holding Company
Pure Breed Company
Investments in Associates and Joint Ventures (Refer note 6.1)
Principal activity
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
20
INVESTMENTS (Continued…)
6.1. The investments in associates and joint ventures comprise the following:
31 March
2018
(Unaudited)
31 December
2017
(Audited)
SAR '000 SAR '000
Opening balance 63,588 58,296
Repayment of loan (17,861) -
Share of Other Comprehensive Loss - (5,201)
Share of Results for the period / year (1,386) 10,493
Closing balance 44,341 63,588
31 March
2018
(Unaudited)
31 December
2017
(Audited)
SAR '000 SAR '000
Opening balance 65,637 38,112
Additions - 25,000
Share of Results for the period / year (2,044) 2,525
Closing balance 63,593 65,637
31 March
2018
(Unaudited)
31 December
2017
(Audited)
SAR '000 SAR '000
Opening balance 204 204
Closing balance 204 204
United Farmers Holding Company
Pure Breed Company
Almarai Company W.L.L.
6.2. The equity investment of 12.4 million shares in Zain is measured at fair value based on quoted market price available on the
Saudi Stock Exchange (Tadawul). As permitted by IFRS 9 and fully explained in Note 5B, Group has designated this
investment at initial application of IFRS 9 as equity investment at FVOCI and measured at fair value. The fair valuation
resulted in unrealised loss of SAR 1.7 million for the period ended 31 March 2018 which is presented within other reserves in
Condensed Consolidated Statement of Changes in Equity.
The Company has pledged Zain shares to Banque Saudi Fransi (“BSF”) to secure the BSF loan to Zain KSA.
7. SHARE CAPITAL
The Company’s share capital at 31 March 2018 amounted to SAR 10,000 million (31 December 2017: SAR 10,000 million) consisting
of 1,000 million (31 December 2017: 1,000 million) fully paid and issued shares of SAR 10 each.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
21
31 March
2018
(Unaudited)
31 December
2017
(Audited)
SAR '000 SAR '000
8. LOANS AND BORROWINGS
Notes
Islamic Banking Facilities (Murabaha) 8.1 5,867,853 5,839,187
Saudi Industrial Development Fund 8.2 1,632,906 1,733,511
Banking Facilities of Non-GCC Subsidiaries 8.3 430,817 462,248
International Finance Corporation 8.4 277,383 278,190
Agricultural Development Fund 8.5 188,127 187,912
Banking Facilities of GCC Subsidiaries 8.6 150,156 150,134
8,547,242 8,651,182
Sukuk 8.7 3,382,764 3,895,346
11,930,006 12,546,528
31 March
2018
(Unaudited)
31 December
2017
(Audited)
SAR '000 SAR '000
Short Term Borrowings 155,694 182,455
Current Portion of Long Term Borrowings 945,468 1,820,948
Loans and Borrowings - Current Liabilities 1,101,162 2,003,403
Loans and Borrowings - Non-Current Liabilities 10,828,844 10,543,125
11,930,006 12,546,528
8.1. The borrowings under Islamic banking facilities (Murabaha) are secured by promissory notes given by the Group. The
Islamic banking facilities (Murabaha) with a maturity period of less than two years are predominantly of a revolving nature.
As at 31 March 2018 SAR 6,241.5 million Islamic banking facilities (Murabaha) were unutilised and available for drawdown.
(31 December 2017: SAR 6,462.9 million).
8.2. The borrowings of the Group from the Saudi Industrial Development Fund (SIDF) are secured by a mortgage on specific
assets equivalent to the outstanding borrowings. As at 31 March 2018 the Group had SAR 296.9 million of unutilised SIDF
facilities available for drawdown with maturities predominantly greater than five years (31 December 2017: SAR 267.1
million). Assets held as collateral are subject to restriction of disposal until the loan is settled or the disposal is approved by
SIDF.
8.3. These banking facilities of non GCC subsidiaries represent borrowings from foreign banking institutions. As at 31 March
2018 SAR equivalent 251.8 million (31 December 2017: SAR 248.3 million) facilities were unutilised and available for
drawdown.
8.4. The Group has been granted new Murabaha Facility by International Finance Corporation (IFC- Member of World Bank
Group) of SAR 281.4 million in 2017, committed with maturity period of more than 9 years and SAR 281.4 million uncommitted.
As at 31 March 2018 the Group had no unutilised IFC facilities available.
8.5. The borrowing from Agriculture Development Fund (ADF) is secured by a mortgage on specific land equivalent to the
outstanding borrowings. As at 31 March 2018 the Group had no unutilised ADF facilities available (31 December 2017: Nil).
Assets held as collateral are subject to restriction of disposal until the loan is settled or the disposal is approved by ADF.
8.6. These banking facilities of GCC subsidiaries represent new borrowings of GCC subsidiaries from banking institutions of
SAR equivalent 150.2 million. As at 31 March 2018 the Group had no unutilised facilities available.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
22
LOANS AND BORROWINGS (Continued…)
8.7. On 14 Rabi Thani 1433 A.H. (7 March 2012), the Company issued its first Sukuk – Series I amounting to SAR 1,000.0 million at
a par value of SAR 1.0 million each without discount or premium. The Sukuk issuance bears a return based on Saudi Arabia
Interbank Offered Rate (SIBOR) plus a pre-determined margin payable semi-annually in arrears. The Sukuk will be
redeemed at par on its date of maturity i.e. 30 Jumada Thani 1440 A.H. (7 March 2019).
On 19 Jumada Awal 1434 A.H. (31 March 2013), the Company issued its second Sukuk - Series II amounting to SAR 787.0
million at a par value of SAR 1.0 million each without discount or premium. The Sukuk issuance bears a return based on
SIBOR plus a pre-determined margin payable semi-annually in arrears. . The Sukuk will be redeemed at par on its date of
maturity i.e. 7 Shabaan 1441 A.H. (31 March 2020).
On 19 Jumada Awal 1434 A.H. (31 March 2013), the Company issued its second Sukuk – Series III amounting to SAR 513.0
million at a par value of SAR 1.0 million each without discount or premium. The Sukuk was redeemed at par on 12 Rajab 1439
A.H. (29 March 2018).
On 3 Dhul Hijja 1436 A.H. (16 September 2015), the Company issued its third Sukuk amounting to SAR 1,600.0 million at a par
value of SAR 1.0 million each without discount or premium. The Sukuk issuance bears a return based on SIBOR plus a pre-
determined margin payable semi-annually in arrears. The Sukuk will be redeemed at par on its date of maturity i.e. 20 Safar
1444 A.H. (16 September 2022).
The terms of the Sukuk entitle the Company to commingle its own assets with the Sukuk assets. Sukuk assets comprise the
Sukukholders’ share in the Mudaraba assets and the Sukukholders’ interest in the Murabaha transactions, together with
any amounts standing to the credit of the Sukuk account and the reserve retained by the Company from the Sukuk account.
8.8. The loans contain certain covenants. A future breach of covenants may lead to renegotiation. The covenants are monitored
on a monthly basis by Management, in case of potential breach, actions are taken by management to ensure compliance.
9. REVENUE
The Group’s operations and main revenue streams are those described in Note 1 and the last annual Consolidated Financial
Statements for the year ended 31 December 2017. The Group’s revenue is derived from contracts with customers for sale of
consumer products. Control of products is transferred at a point in time and directly sold to customers.
The nature and effect of initially applying IFRS 15 on the Group’s Condensed Consolidated interim Financial Statements are
disclosed in Note 5B.
Dairy and Juice Bakery Poultry Other Activities Total
SAR '000 SAR '000 SAR '000 SAR '000 SAR '000
31 March 2018
Saudi Arabia 1,461,807 342,251 390,147 41,991 2,236,196
Other GCC Countries 644,959 74,030 30,492 615 750,096
Other Countries 239,295 - - 6,618 245,913
Total 2,346,061 416,281 420,639 49,224 3,232,205
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
23
REVENUE (Continued…)
Dairy and Juice Bakery Poultry Other Activities Total
SAR '000 SAR '000 SAR '000 SAR '000 SAR '000
31 March 2017
Saudi Arabia 1,521,086 374,597 303,524 52,388 2,251,595
Other GCC Countries 774,719 94,310 45,468 456 914,953
Other Countries 198,321 - 7,375 11,282 216,978
Total 2,494,126 468,907 356,367 64,126 3,383,526
10. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share as follows:
31 March
2018
(Unaudited)
31 March
2017
(Unaudited)
SAR '000 SAR '000
344,174 328,271
Less: Profit attributable to Sukukholders (16,825) (18,707)
327,349 309,564
Number of shares
990,092 991,317
1,000,000 1,000,000
- Basic 0.33 0.31
- Diluted 0.33 0.31
Profit for the period attributable to the shareholders of the Company
Earnings per Share (SAR), based on Profit for the period attributable
to Shareholders of the Company
Weighted average number of ordinary shares for the purposes of basic earnings
Weighted average number of ordinary shares for the purposes of diluted earning
Earnings for the purposes of basic earnings per share
Weighted average number of shares are retrospectively adjusted to reflect the effect of Bonus Shares and are adjusted to take
account of Treasury Shares held under the Almarai Employee Stock Options Programme.
11. SEGMENT REPORTING
The Group’s principal business activities involve manufacturing and trading of dairy and juice products under Almarai, Beyti and
Teeba brands, bakery products under L’usine and 7 Days brands and poultry products under Alyoum brand. Other activities
include Arable, Horticulture and Infant Nutrition. Selected financial information as at 31 March 2018 categorised by these business
segments, is as follows:
Dairy and Juice Milk production, dairy and fruits juice product processing and distribution
Bakery Bakery products manufacturing and distribution
Poultry Poultry products manufacturing and distribution
Other Activities Arable, Horticulture and Infant Nutrition
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
24
SEGMENT REPORTING (Continued…)
Dairy and Juice Bakery Poultry
Other
Activities Total
SAR '000 SAR '000 SAR '000 SAR '000 SAR '000
31 March 2018
Revenue 2,365,819 416,281 420,639 235,071 3,437,810
Third Party Revenue 2,346,061 416,281 420,639 49,224 3,232,205
(315,744) (61,367) (81,105) (42,308) (500,524)
Share of Results of Associates and Joint -
- - (2,044) (1,386) (3,430)
Profit / (loss) attributable to Shareholders
281,020 39,793 25,402 (2,041) 344,174
Share of Other Comprehensive Loss of Associates
- - - - -
Profit / (loss) 271,122 45,206 25,402 (2,042) 339,688
Total Assets 20,690,053 2,478,285 5,320,259 3,274,018 31,762,615
Total Liabilities 14,204,076 465,604 1,331,399 465,911 16,466,990
Depreciation and Amortisation
Ventures
of the Company
and Joint Ventures
Dairy and Juice Bakery Poultry
Other
Activities Total
SAR '000 SAR '000 SAR '000 SAR '000 SAR '000
31 March 2017
Revenue 2,512,415 468,907 356,367 180,115 3,517,804
Third Party Revenue 2,494,126 468,907 356,367 64,126 3,383,526
(294,926) (50,241) (76,888) (31,407) (453,462)
Share of Results of Associates and Joint
- - 726 (196) 530
Profit / (loss) attributable to Shareholders
343,245 66,751 (29,103) (52,622) 328,271
Share of Other Comprehensive Loss of Associates
- - - (5,201) (5,201)
Profit / (loss) 331,254 72,667 (29,103) (52,622) 322,196
Total Assets 18,656,554 2,461,240 5,478,451 3,136,555 29,732,800
Total Liabilities 14,776,003 288,210 1,233,769 310,321 16,608,303
Depreciation and Amortisation
Ventures
of the Company
and Joint Ventures
The business activities and operating assets of the Group are mainly concentrated in GCC countries. The selected financial
information as at 31 March 2018, categorised by these geographic segments is as follows:
12. FINANCIAL INSTRUMENTS
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Underlying the definition of fair value is the presumption that the Company is a going
concern and there is no intention or requirement to curtail materially the scale of its operations or to undertake a transaction on
adverse terms.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an
exchange dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm's length basis.
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
25
FINANCIAL INSTRUMENTS (Continued…)
When measuring the fair value the Group uses market observable data as far as possible. Fair values are categorised into
different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement
date
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in
the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair
value if the carrying amount is a reasonable approximation of fair value.
Fair Value -
hedging
Instruments
Equity
Investment at
FVOCI
Amortised
Cost
Other
Financial
Liabilities Total Level 1 Level 2 Level 3 Total
Financial Assets measured at fair
value
Derivative Financial Instruments 46,937 - - - 46,937 - 46,937 - 46,937
Equity Investment at FVOCI - 88,974 - - 88,974 88,974 - - 88,974
46,937 88,974 - - 135,911 88,974 46,937 - 135,911
Financial Assets not measured at
fair value
Trade and Other Receivables - - 1,683,239 - 1,683,239 - - - -
Cash and Bank Balances - - 1,286,461 - 1,286,461 - - - -
- - 2,969,700 - 2,969,700 - - - -
Financial Liabilities measured at
fair value
Derivative Financial Instruments 35,024 - - - 35,024 - 35,024 - 35,024
35,024 - - - 35,024 - 35,024 - 35,024
Financial Liabilities not measured
at fair value
Loans and Borrowings - - - 11,930,006 11,930,006 - 11,930,006 - -
Bank Overdrafts - - - 280,460 280,460 - 280,460 - -
Trade and Other Payables - - - 1,917,902 1,917,902 - 1,917,902 - -
- - - 14,128,368 14,128,368 - 14,128,368 - -
31 March 2018
Carrying amount Fair Value
…………….......……………………………………………..………...…………………………………………………….SAR '000……………………………………………………………………………………………………………………….
ALMARAI COMPANY
A SAUDI JOINT STOCK COMPANY
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2018
26
FINANCIAL INSTRUMENTS (Continued…)
Fair Value -
hedging
Instruments
Equity
Investment at
FVOCI
Amortised
Cost
Other
Financial
Liabilities Total Level 1 Level 2 Level 3 Total
Financial Assets measured at fair
value
Derivative Financial Instruments 26,288 - - - 26,288 - 26,288 - 26,288
Equity Investment at FVOCI - 90,711 - - 90,711 90,711 - - 90,711
26,288 90,711 - - 116,999 90,711 26,288 - 116,999
Financial Assets not measured at
fair value
Trade and Other Receivables - - 1,409,230 - 1,409,230 - - - -
Cash and Bank Balances - - 1,891,697 - 1,891,697 - - - -
- - 3,300,927 - 3,300,927 - - - -
Financial Liabilities measured at
fair value
Derivative Financial Instruments 42,504 - - - 42,504 - 42,504 - 42,504
42,504 - - - 42,504 - 42,504 - 42,504
Financial Assets not measured at
fair value
Loans and Borrowings - - - 12,546,528 12,546,528 - 12,546,528 - -
Bank Overdrafts - - 255,585 255,585 - 255,585 - -
Trade and Other Payables - - - 1,893,957 1,893,957 - 1,893,957 - -
- - - 14,696,070 14,696,070 - 14,696,070 - -
31 December 2017
…………….......……………………………………………..………...…………………………………………………….SAR '000……………………………………………………………………………………………………………………….
Carrying amount Fair Value
13. DIVIDEND PROPOSED
The Board of Directors have proposed, for shareholder’s approval at the General Assembly Meeting to be held on 9 April 2018, a
dividend of SAR 750.0 million (SAR 0.75 per share) for the year ended 31 December 2017.
14. SUBSEQUENT EVENTS
On 2 April 2018, Almarai Company, through its subsidiary HADCO, acquired a further 14% of the share capital of Pure Breed
Company for a consideration of SAR 20.3 million making Almarai’s total shareholding in Pure Breed Company 55.9%. This
transaction was fully financed from Almarai’s operating cash flow and Pure Breed Company will be consolidated in Group’s
books from Quarter 2 2018 as control was established subsequent to the period ended 31 March 2018.
In the opinion of the management, there have been no other significant subsequent events since the period end that would have
a material impact on the financial position of the Group as reflected in these Condensed Consolidated Interim Financial
Statements.
15. BOARD OF DIRECTORS APPROVAL
These Condensed Consolidated Interim Financial Statements were approved by the Board of Directors on 22 Rajab 1439 A.H. (8
April 2018).