AnnualReport

otes To The Consolidated Financial Statements

AL MAZAYA HOLDING K.S.C.P. AND ITS SUBSIDIARIES

As At 31 December 2016

ANNUAL REPORT

2016

Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or

Joint Venture

The amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of

a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the

gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3,

between an investor and its associate or joint venture, is recognised in full. Any gain or loss resulting from the

sale or contribution of assets that do not constitute a business, however, is recognised only to the extent of

unrelated investors’ interests in the associate or joint venture. The IASB has deferred the effective date of these

amendments indefinitely, but an entity that early adopts the amendments must apply them prospectively.

IFRS 16 Leases

IFRS 16 was issued in January 2016 and it replaces 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. IFRS 16 sets out the principles for the recognition,

measurement, presentation and disclosure of leases and requires lessees to account for all leases under

a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard

includes two recognition exemptions for lessees – leases of ’low-value’ assets (e.g., personal computers) and

short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a

lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the

right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to

separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-

use asset. Lessees will be also required to remeasure the lease liability upon the occurrence of certain events

(e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate

used to determine those payments). The lessee will generally recognise the amount of the remeasurement of

the lease liability as an adjustment to the right-of-use asset. Lessor accounting under IFRS 16 is substantially

unchanged from today’s accounting under IAS 17. Lessors will continue to classify all leases using the same

classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases.

IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is

effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not

before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective

or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. In 2017, the

Group plans to assess the potential effect of IFRS 16 on its consolidated financial statements.

Amendments to IAS 7 Statement of Cash Flows

In January 2016, the IASB issued amendments to IAS 7 Statement of Cash Flows with the intention to improve

disclosures of financing activities and help users to better understand the reporting entities’ liquidity positions.

Under the new requirements, entities will need to disclose changes in their financial liabilities as a result of

financing activities such as changes from cash flows and non-cash items (e.g., gains and losses due to foreign

currency movements). The amendment is effective from 1 January 2017. The Group is currently evaluating

the impact.

Additional disclosures will be made in the consolidated financial statements when these standards, revisions

and amendments become effective. The Group, however, expects no material impact from the adoption of the

amendments on its consolidated financial position or performance.