AnnualReport

ANNUAL REPORT

2016

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

AL MAZAYA HOLDING COMPANY K.S.C.P.

Report on the Audit of Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of the Al Mazaya Holding Company K.S.C.P.

(the “Parent Company”) and its subsidiaries (collectively the “Group”), which comprise the consolidated

statement of financial position as at 31 December 2016, and the related consolidated statement of

income, consolidated statement of comprehensive income, consolidated statement of changes in equity

and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial

statements, including the summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,

the financial position of the Group as at 31 December 2016, and its consolidated financial performance

and its consolidated cash flows for the year then ended in accordance with International Financial

Reporting Standards (IFRSs).

Basis for Opinion

We conductedour audit inaccordancewith International Standards onAuditing (ISAs).Our responsibilities

under those standards are further described in theAuditors’ responsibilities for the audit of the consolidated

financial statements section of our report. We are independent of the Group in accordance with the

International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA

Code) and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We

believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

opinion.

Key Audit Matters

Key auditmatters are thosematters that, inour professional judgment,wereofmost significance inour audit

of the consolidated financial statements of the current year. These matters were addressed in the context

of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and

we do not provide a separate opinion on these matters. For each matter below, our description of how our

audit addressed the matter is provided in that context.

We identified the following key audit matters:

a) Valuation and impairment of investment securities

Investment securities primarily consist of available for sale investments. These instruments are measured

at fair value with the corresponding fair value change recognised in other comprehensive income.

The valuation of investment securities is inherently subjective, most predominantly for the instruments

classified under level 3 as these are valued using inputs other than quoted prices in an active market.

Key inputs used in the valuation of individual level 3 investments are expected cash flows, risk free rates

and credit spreads. In addition, the Group determines whether objective evidence of impairment exists

for individual investments, whether it represents a significant or prolonged decline. In these cases, the

difference between carrying value and fair value is transferred from other comprehensive income to the

consolidated statement of income. Given the inherent subjectivity in the valuation of the investment

securities classified under level 3, we determined this to be a key audit matter.