ifrs adoption in kingdom of saudi arabia · effects of ifrs adoption (contd) ifrs adoption had...

IFRS adoption in Kingdom of Saudi Arabia

December 2017

Contents

Disclaimer

This document provides a summary of our key observations on the IFRS adoption in KSA.

The contents of this document comprise information published by individual companies in Tadawul website. Our analysis is based on the completeness and accuracy of the facts and figures published on Tadawul website. Other than to the extent required for the purpose of this report, this information has not been independently verified.

The analysis made in this report are based on the published financial statements of the concerned companies for the first quarter under IFRS ended on 31 March 2017. We will not update our report for subsequent changes or modifications to laws, regulations and IFRS.

Introduction 3

Executive summary 5

Effects of IFRS adoption:

• Effects on retained earnings

• Effects on assets

• Effects on liabilities

7

Key IFRS 1 exemptions utilized 11

Early adoption of IFRS 9 and IFRS 15 14

Appendices 16

Introduction

01

IFRS adoption in KSAAll Rights Reserved — EY 4

About this report

Introduction

The International Accounting Standards Board (IASB) is now on track to achieve the vision of one global accounting standard. Adhering to the vision of IASB, the Saudi Organization for Certified Public Accountants (SOCPA) had decided to apply International Financial Reporting Standards as endorsed in Kingdom of Saudi Arabia (referred hereafter as IFRSs) to all listed and unlisted companies.

Mandatory dates of transition

Lis

ted

co

mp

an

ies

Date of transition to IFRS

1 Jan 2016

Comparative information Reporting date

31 Dec 2016 31 Dec 2017

Un

list

ed

co

mp

an

ies*

Unlisted companies have an option to early adopt along with listed companies

Date of transition to IFRS

1 Jan 2017

Comparative information Reporting date

31 Dec 2017 31 Dec 2018

*Unlisted companies not acting in fiduciary capacity can choose either to apply IFRS for SMEs as endorsed in Kingdom of Saudi Arabia or fullset of IFRS.

Based on the transition date decided by SOCPA, listed companies were required to publish their Q1 financial statements for FY17 in accordance with IFRS. As of 31 December 2016, there were 176 listed companies on Tadawul.

124

33

4123

Banking Diversified financials Insurance REIT Other Sectors

107Companies in ‘other sectors’ that had published Q1 results under IFRS

This report is an analysis of the IFRS adoption by the Kingdom of Saudi Arabia (KSA) based on the Q1 financial statements as of 31 March 2017, published on Tadawul by these 107 equity listed companies in fifteen (15) sectors (see Appendix I for detailed description of sectors). The analysis is extended further at the sector level as shown in Appendix VI.

16Q1 IFRS financial statements not available due to Hijri calendar or other than 31 December year end

Executive summary

02


Executive summary

By issuing the Q1 results in IFRS, the listed companies have successfully put their initial step in this transition. It is now time to evaluate the status of IFRS transition and its impact on the overall financial position of the company as well as different sectors based on the published financial statements.This report is evaluating the IFRS adoption in KSA based on the analysis of published financial statements of 107 companies under three focus areas and the major observations are as follows:

Effects of IFRS adoption

Retained earnings:

SAR18,116m (12.4%)

01

02

03

0405

Retained earnings decreased for all sectors except Media, Retailing and Utilities.

Materials sector had the highest decrease of SAR12,162m (31.6%).

There is a net increase in the value of asset by SAR2,986m.

The net increase in liabilities as a result of IFRS adoption is

SR17,615m.

Appendix VI illustrates certain sector-wise impact of IFRS adoption.

Major IFRS 1 exemptions utilized

48 Companies utilized the exemptions

Key exemptions utilized are:

• IFRS 3 (Business combinations)

• IAS 21 (Cumulative translation differences)

• IAS 23 (Borrowing costs)

• IFRIC 4 (Arrangements containing a lease)

Companies10 Companies07

Early adoption of IFRS 9 and IFRS 15

These companies belong to consumer durables and apparels, capital goods, energy, material, real estate, retailing and transportation sectors.

IFRS 9 IFRS 15


03• Effects on retained earnings

• Effects on assets

• Effects on liabilities



Retained earnings SAR18,116m at the date of transition

(2,591) (1,598) (1,009) (669)

773

(861)

Net impactSum of RE (IFRS)Sum of RE on date of transition (SOCPA)

The impact on retained earnings is primarily due to increased liabilities. There was a decrease in retained earnings for all, except media, retailing and utilities sectors. Material sector has the highest impact due to adjustments in Goodwill and PPE. Utilities sector has the highest net increase in retained earnings (SAR773m). IFRS adoption has an insignificant impact on the media, retailing and commercial and professional services sectors.

Asset 2,986m (App. III)

Liability (17,615m) (App. IV)

Other components of equity*

(3,487m)

*Adjustments to other components of equity (non-controlling interest, foreign currency translation reserve and other reserves)

35,000

–15,000

30,000

15,000

10,000

70,000

5,000

0

Capital goods UtilitiesMaterialFood andbeverageReal estate

Tele-communication Other sectors

Impact on retained earnings (SARm): App. II

(12,162)


(2,205)

(1,256)(531) (643)

Effects of IFRS adoption (contd)

The following table highlights the net effect on selective categories of assets (all sectors combined).

–3,500

–4,000

–8,500

–2,500

16,500

1.500

1.000

500

0

-500

–1,000

–1,500

–2,000

–3,000

693

(8,099)

15,028

Total adjustments

Other assets

Goodwill

Advances and prepayments

Investment in other companies

PPE

IFRS adoption had a net increase of SAR2,986m on the assets of the companies considered. Utilities sector had the highest net increase and materials sector had the highest net decrease.

SARm

1 PPE 13,371

2 Advances and prepayments 4,651

3 Investment properties 1,948

4 Investment in other companies (4,288)

5 Goodwill (3,131)

1. Utilities sector has a net increase of SAR16,205m in PPE whereas other sectors generally reported a decrease.

2. Utilities sector has the highest increase in assets of SAR4,974m. Other sectors generally had a decreasing effect in advances and prepayments.

3. Retailing (SAR692m), consumer services (SAR544m) and utilities (SAR539m) sectors had an increase on investment property whereas real estate sector noted a decrease by SAR873m.

4. Utilities (SAR1,965m), material (SAR1,326m) and telecommunication (SAR487m) are the mainly affected sectors of investment in other companies.

5. The entire adjustment in goodwill is related one material sector entity.

Real estateFood &

BeveragesMaterial

Tele-communication

Capital goodsOther sectors Utilities

Impact on assets (SARm) at the date of transition: see App. III for detailed analysis


Effects of IFRS adoption (contd)

IFRS adoption had increased the liabilities by SAR17,615m in the financial statements of the companies considered. Utilities sector had the highest net upward movement and real estate sector had the highest downward movement.

SARm

1 Government grants 46,091

2 Loans 9,015

3 Other liabilities 5,503

4 Employee benefits 5,090

5 Payables (49,998)

1. Utilities sector has an increase of SAR46,035m in government grants due to reclassification from long-term governmental payables of SAR42,346m of an entity.

2. Utilities sector has the highest impact of SAR8,683m along with telecommunication (SAR1,294m). Loans in material sector reduced by SAR1,042m.

3. Utilities sector marked the highest increase in other liabilities (SAR12,048m) whereas other sectors reported a reduction in general.

4. Majority of sectors marked an increase in employee benefits and material sector has a considerable increase by SAR3,738m.

5. Decrease in payables was mainly contributed by utilities sector (SAR53,372m).

3,500

1,500

1,000

500

0

–1,000

–53,500

46,500

2,500

–500

2,000

14,194

MaterialFood andbeverages

554

(149)

Real estate UtilitiesTele-communications

Other sectorsCapital goods

Total adjustment to liabilities

Payables

Other liabilities

Government grants

Employee benefits

Loans

Impact on liabilities (SARm) at the date of transition: see App. IV for detailed analysis

3,389

(709)

247 88

The following table highlights the net effect on different categories of liabilities (all sectors combined).

Major IFRS 1exemptions utilized

04


Major IFRS 1 exemptions utilized

48 companies used exemptions

IFRS 1 lists some optional exemptions which companies can use during their first time transition to IFRS. Forty-eight companies used these exemptions. One entity in telecommunication sector used the maximum number of exemptions (six).

Most of the companies had used exemption for IFRS 3 Business Combinations (33 companies).

Optional exemptions utilized

1

33

4

813

13

4

3

11 IFRS 2 (Share-based payments)

IFRS 3 (Business combinations)

IFRS 9 / IAS 39 (Financial instruments)

IAS 16 (Assets deemed cost)

IAS 21 (Cumulative translation differences)

IAS 23 (Borrowing costs)

IAS 28 (Group, subsidiary, associate and jointventure transition dates)

IFRIC 1 (Decommissioning liabilities)

IFRIC 4 (Arrangements containing a lease)

The numbers represent the number of companies using the respective exemptions


Major IFRS 1 exemptions utilized (contd)

IFRIC 4IAS 23IAS 21IAS 16 Other exemptionsIFRS 3

0

1

2

3

4

5

6

7

8

9

10

11

12

Consumer servicesCapital goods Other sectorsTelecommunicationMaterial

All sectors utilized the exemptions except the commercial and professional services sector. Materials sector utilized the maximum number of exemptions as an individual sector (28 exemptions by 15 companies). The exemptions for IFRS 3 (business combinations) was utilized by most of the companies and the least utilized exemption was IFRS 2 (share-based payments). For a detailed analysis of IFRS 1 exemptions utilized, refer Appendix V.

15

64 3 2

18

39

12

6 7

11

32

Material Capital goods Health careequipment &

services

Real estate Food & beverages Other sectors

No:of Companies used exemption Total no: of companies

Sector-wise analysis (number of companies)

Sector-wise analysis (exemptions utilised)

Early adoption ofIFRS 9 and IFRS 15

05


Early adoption of IFRS 9 and IFRS 15

IFRS 9

IFRS 15

10 companies

07 companies

In May 2014,the IASB issued IFRS 15 Revenuefrom Contracts with Customers that will supersede virtually all revenue recognitionrequirements under IFRS and become effective from 1 January 2018 with early adoption permitted. In July 2014, the IASB issued IFRS 9 Financial Instruments,replacing IAS 39 Financial Instruments:Recognition and Measurement. The standard is effective for annual periodsbeginning on or after1 January 2018, with earlyadoption permitted.

The companies which early adopted IFRS 9 belongs to consumer durables and apparels, capital goods, energy, material, real estate, retailing and transportation sectors.

IFRS 15 has been early adopted by companies in the consumer durables and apparels, capital goods, material, real estate and transportation sectors.

Appendices

06


Index

Sector descriptionI 18

Retained earnings analysisII 21

Assets analysisIII 22

Liabilities analysisIV 23

Exemptions utilizedV 24

Sector analysisVI 25


Appendix I

Sector descriptionTadawul’s market structure is classified based on the Level 2 classification under Global

Industry Classification Standard (GICS)*. The details of the sectors considered for the analysis

are given in the alphabetical order here:

Capital goods (12 companies)

It consists of:

• Aerospace and defense

• Building products

• Construction and engineering

• Electrical equipment

• Industrial conglomerates

• Machinery

• Trading companies and distributors

Electrical equipment includes: electrical components and equipment, heavy electrical equipment.

Machinery includes: Construction machinery and heavy trucks, agricultural and farm machinery, and industrial machinery.

Commercial and professional services (1 company)

It consists of:

• Commercial services and supplies

• Professional services

Commercial services and supplies includes: commercial printing, environmental and facilities services, office services and supplies, diversified support services, and security and alarm services. Professional services includes human resource and employment services, research and consulting services.

Consumer durables and apparel (4 companies)

It consists of:

• Household durables

• Leisure products

• Textiles, apparel and luxury goods

Household durables includes: commercial printing, environmental and facilities services, office services and supplies, diversified support services, and security and alarm services. Professional services includes human resource and employment services, and research and consulting services.

Consumer services (5 companies)

It consists of:

• Hotels, restaurants and leisure

• Diversified consumer services

Hotels, restaurants and leisure includes: casinos and gaming, hotels, resorts and cruise lines, leisure facilities and restaurants. Diversified consumer services include education services and specialized consumer services.

*The Global Industry Classification Standard (GICS) is an industry taxonomy developed in 1999 by MSCI andStandard & Poor's (S&P) for use by the global financial community.


Appendix I (contd)

Sector descriptionEnergy (4 companies)

It consists of:

• Energy equipment and services

• Oil, gas and consumable fuels

Energy equipment and services includes: oil and gas drilling, oil and gas equipment and services. Oil, gas and consumable fuels includes integrated oil and gas, oil and gas exploration and production, oil and gas refining and marketing, oil and gas storage and transportation, and coal and consumable fuels.

Food and beverages (11 companies)

It consists of:

• Beverages

• Food products

• Tobacco

Beverages includes: brewers, distillers and vintners, and soft drinks. Food products includes agricultural products, and packaged foods and meats.

Food and staples retailing (4 companies)

It includes: drug retail, food distributors, food retail, and hypermarkets and super centers.

Health care equipment and services (6 companies)

It consists of:

• Health care equipment and supplies

• Health care providers and services

• Health care technology

• Pharmaceuticals

• Life sciences tools and services

Health care equipment and supplies includes: health care equipment and health care supplies. Health care providers and services includes health care distributors, health care services, health care facilities and managed health care.

Materials (39 companies)

It consists of:

• Chemicals

• Construction materials

• Containers and packaging

• Metals and mining

• Paper and forest products

Chemicals includes: commodity chemicals, diversified chemicals, fertilizers and agricultural chemicals, industrial gases and specialty chemicals. Containers and packaging includes metal and glass containers and paper packaging. Metals and mining includes aluminum, diversified metals and mining, copper, gold, precious metals and minerals, silver and steel industries. Paper and forest products includes forest products and paper products.


Appendix I (contd)

Sector descriptionMedia (1 company)

Media includes: advertising, broadcasting, cable and satellite, movies and entertainment, and publishing.

Real estate (7 companies)

It includes: diversified Real estate activities, real estate operating companies, real estate development andreal estate services.

Retailing (5 companies)

It consists of:

• Distributors

• Internet and direct marketing retail

• Multiline retail

• Specialty retail

Multiline retail includes: department stores and general merchandise store. Specialty retail includes apparel retail, computer and electronics retail, home improvement retail, specialty stores, automotive retail and home furnishing retail.

Telecommunication services (3 companies)

It consists of:

• Diversified telecommunication services

• Wireless telecommunication services

Diversified telecommunication services includes: alternative carriers and integrated telecommunication services.

Transportation (3 companies)

It consists of:

• Air freight and logistics

• Airlines

• Marine

• Road and rail

• Transportation Infrastructure

Road and rail includes: railroads and trucking. Transportation infrastructure includes airport services, highways and rail tracks, and marine ports and services.

Utilities (2 companies)

It consists of:

• Electric utilities

• Gas utilities

• Multi-utilities

• Water utilities

• Independent power and renewable electricity producers

Independent power and renewable electricity producers includes: independent power producers and energy traders, and renewable electricity.


Appendix II

Retained earnings analysis

Sectors

Retained earnings on date of transition

(SOCPA) SARmRetained earning

(IFRS) SARmNet change

SARm

% of net change over retained

earning (SOCPA)

Real estate 2,137 539 (1,598) (74.80)%

Capital goods 5,123 2,531 (2,591) (50.60)%

Material 38,546 26,385 (12,161) (31.55)%

Consumer durables and apparel

275 207 (68) (24.40)%

Energy 2,857 2,416 (441) (15.50)%

Food and beverages 7,992 6,983 (1,009) (12.60)%

Health care equipment and services

1,863 1,685 (178) (9.60)%

Transportation 918 848 (70) (7.60)%

Consumer services 2,005 1,882 (123) (6.10)%

Food and staples retailing

724 703 (21) (2.90)%

Telecommunication 65,894 65,225 (669) (1.00)%

Commercial and professional services

212 211 (1) 0.00%

Media (99) (96) 3 3. 0%

Retailing 1,016 1,054 38 3.70%

Utilities 16,068 16,842 773 4.80%

Total 145,531 127,415 (18,116) (12.45)%


Appendix III

Assets analysis

Sectors PPEAdvances and prepayments

Investment properties Receivables

Available for sale investments

Deferred tax

Held to maturity Cash

Capital goods 487 (163) 8 (19) 88 – – (27)


– – – – – – – –


(3) – – (13) 84 – – –

Consumer services (546) (119) 544 104 – 3 – –

Energy (282) – – (70) – – – –

Food and beverages 941 (40) 368 (247) (28) – – (20)


(216) (56) 170 (18) (1) – – (6)


10 19 – (86) – 18 – (5)

Material (1,658) 143 194 32 149 271 – –

Media (6) – – – – – – –

Real estate (719) (17) (873) (44) 233 – – 2

Retailing (735) (69) 692 63 99 – – –

Telecommunication 221 – – 1,563 (12) – – –

Transportation (327) (22) 307 47 (17) – – –

Utilities 16,205 4,974 539 – 282 – 210 193

Total 13,371 4,651 1,948 1,311 878 292 210 136

All figures are in SARm with rounding off exception

SectorsBiological

assetsIntangible

assets InventoriesLoans to

others Goodwill

Investment in other

companies Other

assets

Total adjustment

to assets

Capital goods – (4) (98) (66) – (78) (1,385) (1,256)


– – (21) – – – – (21)


– – 9 – – (150) – (72)

Consumer services – – – – – (2) – (16)

Energy – – – (37) – – (13) (403)

Food and beverages 36 86 1 – – (371) (35) 693

Food and staples retailing 1 2 (35) – – 43 – (116)


– 4 (67) – – 35 – (73)

Material – (121) (293) (832) (3,131) (1,326) (1,527) (8,099)

Media – 7 (4) – – – – (3)

Real estate (49) 17 – – – (1) (754) (2,205)

Retailing – 3 – – – – (7) 46

Telecommunication – (352) – – – (487) (1,464) (531)

Transportation – 22 – – – 13 (8) 15

Utilities – 157 98 (860) – (1,965) (4,804) 15,028

Total (12) (180) (410) (1,795) (3,131) (4,288) (9,997) 2,986

Net

incre

ase in

assets

Net

decre

ase in

assets


Appendix IV

Liabilities analysisAll figures are in SARm with rounding off exception

Sectors

Government grants

Loans Other

liabilities Employee

benefitsDeferred

income

Provision for decommissioning

liability

Tax liabilities

Capital leases

Capital goods – (114) (256) 95 – 14 21 –

Commercial andprofessional services

– – – – – – – –


– – – 5 – – – –

Consumer services – – (1,431) 40 1,063 – 8 68

Energy – – – 71 – – – –

Food and beverages 14 268 18 219 (181) 97 24 –


– – (16) – – – (1) –


42 (59) 110 46 18 – (3) –

Material – (1,042) 23 3,738 – 174 482 88

Media – – – (3) – – – –

Real Estate – (15) (702) 23 (8) – – –

Retailing – – (110) 43 (2) – – –

Telecommunication – 1,294 (4,054) (329) 198 336 – –

Transportation – – (81) 75 18 – – –

Utilities 46,035 8,683 12,048 1,067 (268) – – –

Total 46,091 9,015 5,503 5,090 837 621 531 156

Net

incre

ase in

lia

bilit

ies

Ne

t d

ecre

ase

in lia

bilit

ies

Sector Dividends due Due to related parties Payables Total adjustment to

liabilities

Capital goods 6 (6) 91 (149)


– – (21) (21)

Consumer durables and apparel – – – 5

Consumer services – – 246 (6)

Energy – – 16 87

Food and beverages – – 97 554

Food and staples retailing – – (43) (59)

Health care equipment and services (10) – (7) 136

Material – (137) 109 3,389

Media – – – (3)

Real estate – – (8) (709)

Retailing – – 95 27

Telecommunication – – 2,644 88

Transportation (85) – 154 81

Utilities – – (53,372) 14,194

Total (90) (143) (49,998) 17,615


Appendix V

IFRS 1 Exemptions utilized

Sectors IFRS 2 IFRS 3IFRS 9/IAS 39 IAS 16 IAS 21 IAS 23 IAS 28 IFRIC 1

IFRIC 4

Capital goods 6 4 1 1



1 1

Consumer services 3 1 2 1 2

Energy 1 1 1

Food and beverages 2 1


1 1 1 1


3 1 2 1

Material 1 10 3 2 2 4 1 2 3

Media 1 1 1

Real estate 1

Retailing 2 1 1 1 1

Telecommunication 2 1 1 1 1 1 1

Transportation 2 1

Utilities 1

Grand total 1 33 4 8 13 13 4 3 11


Appendix VI

Sector analysis

Sl. no. Sector Page no.

1 Capital goods 27

2 Commercial and professional services 29

3 Consumer durables and apparel 30

4 Consumer services 32

5 Energy 34

6 Food and beverages 35

7 Food and staples retailing 38

8 Health care equipment and services 41

9 Material 44

10 Media 48

11 Real estate 49

12 Retailing 51

13 Telecommunication 53

14 Transportation 55

15 Utilities 57


Appendix VI (contd)

Sector analysis

Capital goods

Sl. no Company name Change in RE % Total adjustment

to assets Total adjustment to

liabilities

1 Capital goods A –94% (774,359) 87,777

2 Capital goods B –51% (453,843) (277,848)

3 Capital goods C –36% – –

4 Capital goods D –20% (24,669) 17,423

5 Capital goods E –16% (12,671) 17,613

6 Capital goods F –14% – 8,786

7 Capital goods G –12% (1,105) 3,378

8 Capital goods H 95% 39,566 (1,767)

9 Capital goods I –6% – 8,340

10 Capital goods J –5% (14,807) (1,003)

11 Capital goods K 0% (11,132) (11,577)

12 Capital goods L 1% (3,100) (262)


Appendix VI (contd)

Sector analysis

Impact on retained earnings (SARm): Capital goods

5,123

2,531

(2,591)(4,000)

(2,000)

0

2,000

4,000

6,000

Net impact

Sum of RE (IFRS)

Sum of RE on date of transition (SOCPA)

Impact on assets (SARm): Capital goods

(163)

8

(19)

88

(27)(4)

(98)

(66)(78)

(1,385)

487500

50

0

–50

–100

–150

–1,300

–1,350

–1,400

(1,256)

Total adjustments to assets

Other assets


Loans to others

Inventories

Intangible assets

Cash


Receivables

Investment properties


PPE

Capital goods (contd)


Appendix VI (contd)

Sector analysis

Impact on liabilities (SARm): Capital goods

(114)

(256)

95

14 21 6

(6)

91

(149)

(300)

(250)

(200)

(150)

(100)

(50)

0

50

100

Employee benefits

Loans

Tax liabilitiesOther liabilities Payables

Provision for decommissioning liability


Due to related parties

Dividends due

Capital goods (contd)


Appendix VI (contd)

Sector analysis

Sl. no Company name Change in RE %Total adjustment

to assets Total adjustment

to liabilities

1 Commercial and professional services A –0.20% (21,115) (20,698)

Impact on retained earnings (SARm): Commercial and professional services

212

211

(1)–1.0

212.0

211.5

211.0

0.0

–0.5


Impact on assets (SARm): Commercial and professional services

Impact on liabilities (SARm):Commercial and professional services

(21)

(21)

(24)

(20)

(16)

(12)

(8)

(4)

0

(21)

(21)

(24)

(20)

(16)

(12)

(8)

(4)

0

Total adjustment to assetsInventories Total adjustment to liabilitiesPayables



Appendix VI (contd)

Sector analysis



to liabilities

1 Consumer durables and apparels A –35% (53) 1

2 Consumer durables and apparels B –14% (19) 5

3 Consumer durables and apparels C –1% – (1)

4 Consumer durables and apparels D 0% – (0)

Impact on retained earnings (SARm): Consumer durables and apparels


275

207

(68)(100)

(50)

0

50

100

150

200

250

300

Consumer durables and apparels


Appendix VI (contd)

Sector analysis

Impact on assets (SARm):Consumer durables and apparels

Impact on liabilities (SARm): Consumer durables and apparels

(3)

(13)

9

84

(150)

(72)

55

(1)

0

1

2

3

4

5

6

-10

0

–150

-5

5

85

Total adjustment to assets


PPE

Inventories


Receivables Total adjustments to liabilities

Employee benefits

Consumer durables and apparels (contd)


Appendix VI (contd)

Sector analysis



to liabilities

1 Consumer services A –48% (2) 72

2 Consumer services B –6% (10) (0)

3 Consumer services C –6% 2 5

4 Consumer services D –5% (6) 1

5 Consumer services E –2% 0 (83)

Impact on retained earnings (SARm): Consumer services


(123)

1,882

2,0052,100

2,000

1,900

0

-100

–200

Consumer services


Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Consumer services

(119)

104

3

(2)

(16)

544

(546)

550

100

50

0

–50

–100

–550



Deferred tax

Receivables

Investment prop


PPE

Impact on liabilities (SARm): Consumer services

40

8

68

–1,431

1,063246

–6

1,070

60

50

40

30

20

10

0

–1,440


PayablesTax liabilities

Deferred income Capital leases

Employee benefits

Other liabilities

Consumer services (contd)


Appendix VI (contd)

Sector analysis



to liabilities

1 Energy A –11% (13) 4

2 Energy B –11% (352) 27

3 Energy C 19% (37) 55

4 Energy D 0% – –

Impact on retained earnings (SARm): Energy


(441)

2,857

2,416

0

3,000

–500

2,500

Impact on assets (SARm): Energy Impact on liabilities (SARm): Energy

(282)

(70)(37)

(13)

(403)(450)

(300)

(150)

0

PPE Total adjustmentto assetOther assets

Loans to others

Receivables

71

16

87

0

20

40

60

80

100

Payables


Employee benefits

Energy


Appendix VI (contd)

Sector analysis



to liabilities

1 Food and beverages A –1263% 194 10

2 Food and beverages B –370% 18 2

3 Food and beverages C –31% 480 456

4 Food and beverages D 192% 28 39

5 Food and beverages E –5% (16) (4)

6 Food and beverages F –2% – 3

7 Food and beverages G –1% (2) 46

8 Food and beverages H 0% 1 2

9 Food and beverages I 0% (0) (0)

10 Food and beverages J 4% (0) 0

11 Food and beverages K 5% (10) –

Impact on retained earnings (SARm): Food and beverages


(1,009)

6,983

–1,000

–1,500

0

–500

8,000

7,500

7,000

7,992

Food and beverages


Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Food and beverages

(40)(20)

36

86

1

941

368

(247)

(28)

693

(35)

(371)

1,000

900

800

700

0

–300

–400


Other assets


Inventories

Intangible assets

Biological assets

Cash


Receivables



PPE

Food and beverages (contd)


Appendix VI (contd)

Sector analysis

Impact on liabilities (SARm): Food and beverages

14 18

97

24

97

0

–200

500

600

400

–100

300

Loans Payables

Total adjustment to liabilitiesProvision for decommissioning liability

Tax liabilitiesEmployee benefits

Deferred income

Other liabilities

Government grants

–181

219

268

554

Food and beverages (contd)


Appendix VI (contd)

Sector analysis

Sl. no Co.name Change in RE %Total adjustment


to liabilities

1 Food and staples retailing A 69% (9) 1

2 Food and staples retailing B –1% (106) (66)

3 Food and staples retailing C –6% (1) 6

4 Food and staples retailing D 0% – –

Impact on retained earnings (SARm): Food and staples retailing


(21)

724

703

–20

–30

0

–10

730

720

710



Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Food and staples retailing (contd)

0


Intangible assets

Biological assets

Cash


Receivables



PPE

(56)

(18)

(1)(6)

1 2

(35)

43

–10

–20

–30

–40

–50

–220

40

20

20

10

170

(216)

170

Food and staples retailing (contd)

Investment in other Companies

Inventories

(116)


Appendix VI (contd)

Sector analysis

Impact on liabilities (SARm): Food and staples retailing

–16

–1

–43

–59

0

–5

–10

–15

–45

–50

–55

–60

PayablesTax liabilitiesOther liabilities Total adjustment to liabilities

Food and staples retailing (contd)


Appendix VI (contd)

Sector analysis



to liabilities

1 Health care equipment and services A –72% (127) 121

2 Health care equipment and services B 15% 61 9

3 Health care equipment and services C –3% (4) 8

4 Health care equipment and services D –2% 6

5 Health care equipment and services E 1% (2) (6)

6 Health care equipment and services F 1% – (2)

Impact on retained earnings (SARm): Healthcare equipment and services


(178)

1,863

1,6851,800

–200

0

2,000



Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Healthcare equipment and services

10

(5)

4

1819

(73)

(67)

(86)

0–5

–70

5

10

35

20

30

25

–80

–90

–75

–85


Total adjustment to AssetsIntangible assetsReceivables

Inventories


PPE

Cash

Deferred tax

35

Health care equipment and services (contd)


Appendix VI (contd)

Sector analysis

Impact on liabilities (SARm): Healthcare equipment and services

42

–59

46

18

–3–10 –7

110

136130

40

30

20

10

0

110

140

120

–30

–40

–10

–20

–60

–50

Government grants


Loans

Other liabilities

Employee benefits

Deferred Income

Tax liabilities

Payables

Dividends due

Health care equipment and services (contd)


Appendix VI (contd)

Sector analysis



to liabilities

1 Material A –1570% (18) 4

2 Material B –629% (115) 3

3 Material C –261% (3)

4 Material D –240% (164) 20

5 Material E –68% (313) –

6 Material F –65% (682) 80

7 Material G –58% (985) 85

8 Material H –57% (2,428) 2,896

9 Material I –50% (434) 24

10 Material J –33% (32) 1

11 Material K –30% (2,573) (312)

12 Material L –27% – 23

13 Material M –27% (113) 236

14 Material N –23% (11) 2

15 Material O –23% (242) (4)

16 Material P –21% (103) 33

17 Material Q –12% (35) 10

18 Material R –10% (92) 5

19 Material S 15% 250 (31)

20 Material T 22% (51) –

21 Material U –4% 148 85

22 Material V –3% (41) 227

Material


Appendix VI (contd)

Sector analysis



to liabilities

23 Material W –9% (5) –

24 Material X –8% (14) (2)

25 Material Y –4% 30 21

26 Material Z –4% – 3

27 Material AA –4% (19) 3

28 Material AB –4% (3) 6

29 Material AC –3% (6) –

30 Material AD –3% – 1

31 Material AE –2% – 2

32 Material AF –1% (5) –

33 Material AG –1% – 8

34 Material AH 0% 2 8

35 Material AI 0% (55) (55)

36 Material AJ 0% – –

37 Material AK 0% – –

38 Material AL 0% – –

39 Material AM 0% 11 9

Material (contd)


Appendix VI (contd)

Sector analysis

Impact on retained earnings (SARm): Material

38,546

26,385

(12,161) 15,000

10,000

5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000


Impact on assets (SARm): Material

143 194

32 149

271

(121)

(293)

(832)

(1,527)

(1,326)

(3,131)(1,658) (8,099)

–8,200

–1,600

–1,400

–800

–600

–400

–200

0

200

400

Receivables



PPE

Goodwill

Loans to others

Inventories

Intangible assets

Deferred tax



Other assets

Investment in other countries

Material (contd)


(1,042)

23174

482

88

–137

109

3,389

3,738

Appendix VI (contd)

Sector analysis

Impact on liabilities (SARm): Material

4,000

3,500

0

Employee benefits

Other Liabilities

Loans

Tax liabilities


Payables

Capital leases Total adjustment to Liabilities

Due to Related Parties

–500

–1,000

–1,500

Material (contd)


Appendix VI (contd)

Sector analysis



to liabilities

1 Media A –2.80% (2,644) (2,816)

Impact on retained earnings (SARm): Media

Impact on assets (SARm): Media Impact on liabilities (SARm): Media

3

(96)

(99)

4

2

0

–100

–98

–96


7

(4)

(3)

(6)

(4)

(2)

0

2

4

6

8

(6)


Inventories

Intangible assets

PPEEmployee benefits


0,0

–0.5

–1.0

–1.5

–2.0

–2.5

–3.0

–3.0

–3.0

Media


Appendix VI (contd)

Sector analysis



to liabilities

1 Real estate A –8551% (2,144) (697)

2 Real estate B –42% (71) 3

3 Real estate C –4% (56) 3

4 Real estate D –2% (2) (8)

5 Real estate E 0% – –

6 Real estate F 0% – –

7 Real estate G 4% 68 (10)

Impact on retained earnings (SARm): Real estate

539

(1,598)

2,500

500

0

–500

–1,000

–1500

–2,000

2,137

Sum of RE on date of transition (SOCPA) Sum of RE (IFRS) Net impact

Real estate


–15

23

–8 –8

–702

–702–709

(17)

(44)

2

(49)

17

(1)

Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Real estate

–10

0

–750

–20

–730

–30

–740

–2,210

–40

–720

10

240

(873)

233

(754)

(719)

(2,205)

Cash



Intangible assetsReceivables

Biological assets

Other assets

PPE




Impact on liabilities (SARm): Real estate

–15

–710

25

20

–10

–705

15

10

5

0-5


PayablesLoans

Deferred incomeOther liabilities

Employee benefits

Real estate (contd)


38

1,054

1,016

Appendix VI (contd)

Sector analysis



to liabilities

1 Retailing A 140% 70 –

2 Retailing B –7% (3) 23

3 Retailing C –4% (6) 1

4 Retailing D –3% (12) 5

5 Retailing E –1% (3) (2)

Impact on retained earnings (SARm): Retailing

1,060

20

1,040

1,020

0

Sum of RE (IFRS)Sum of RE on date of transition (SOCPA) Net impact

Retailing


(69)

63

99

3

(7)

692

(735)

46

Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Retailing

Impact on liabilities (SARm): Retailing

60

700

40

80

20

0

–20

–60

–740

–40

Intangible assets

Other assetsPPE


Receivables




–110

43

–2

95

(150)

(100)

(50)

0

50

100

27

Payables

Deferred income Total adjustment to liabilities

Employee benefits

Other liabilities

Retailing (contd)


(669)

65,225

65,894

Appendix VI (contd)

Sector analysis



to liabilities

1 Telecommunication A 0% (480) (258)

2 Telecommunication B 1% (132) (115)

3 Telecommunication C –7% 82 461

Impact on retained earnings (SARm): Telecommunication


66,000

65,500

0

–500

–1,000

Telecommunication


Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Telecommunication

Impact on liabilities (SARm): Telecommunication

221

1,563

(12)

(352)(487)

(1,464)

2,000

1,500

1,000

500

0

–500

–1,000

–1,500

(531)


Other assets


Intangible assets


Receivables

PPE

200

1,000

2.800

800

1,200

400

600

0

–200

–4,200

1,294

-329

198336

2,644

-4,054

88

Deferred incomeLoans


Employee benefits

Other liabilities


Payables

Telecommunication (contd)


(70)

Appendix VI (contd)

Sector analysis



to liabilities

1 Transportation A –14% (6) 67

2 Transportation B 2% 21 14

3 Transportation C 0% – –

Impact on retained earnings (SARm): Transportation


950

900

850

0

–50

–100

848

918

Transportation


Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Transportation

Impact on liabilities (SARm): Transportation

(22)

47

(17)

22

13

(8)

310

40

30

20

10

0

–10

–20

–330

15

(327)

307

Intangible assets


Receivables



PPE

Total adjustment in assets

Other assets


–81

75

18

–85

154

81

(90)

(60)

(30)

0

30

60

90

120

150

180

Dividends due Total adjustment to liabilities

Deferred income

Employee benefits

PayablesOther liabilities

Transportation (contd)


Appendix VI (contd)

Sector analysis



to liabilities

1 Utilities A –77% – 17

2 Utilities B 5% 15,028 14,177

Impact on retained earnings (SARm): Utilities


773

17,000

16,500

500

0

16,842

16,068

Utilities


8,683

12,048

1,067

–268

14,194

Appendix VI (contd)

Sector analysis

Impact on assets (SARm): Utilities

Impact on liabilities (SARm): Utilities

4,974

539 282 210 193 157 98

(860)

17,000

16,000

4,000

3,000

2,000

1,000

0

–1,000

–5,000 (4,804)(1,965)

16,205

15,028


Other assets


Loans to others

Inventories

Intangible assets

Cash

Held to maturity




PPE

0

–54,000

8,000

14,000

48,000

4,000

2,000

12,000

6,000

10,000

–53,372

46,035

Government grants

Payables


Employee benefits

Other liabilities Deferred income

Loans

Utilities (contd)

EY | Assurance | Tax | Transactions | Advisory

About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities

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The MENA practice of EY has been operating in the region since 1923. For more than 90 years, we have grown to more than 6,000 people united across 20 offices and 15 countries, sharing the same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the region.

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EYG no. 06651-172GBLED NoneThis material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

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Sameh Taher KhalafSenior PrincipalErnst & Young & Co. (Public Accountants) Contact no: +966 1222 [email protected]

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Haider KhanDirectorErnst & Young & Co. (Public Accountants)Contact no: +966 1215 [email protected]

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