SISCO announces its conversion plan to international financial reporting standards (phase three)

 Further to our announcements made on 31 August and 25th October 2016, SISCO announces the following in relation to IFRS conversion project: 

1.Accounting policies have been approved by the Board on 18 Jan 2017.

2.Following are the Impact on Consolidated Financial Statements as of 1st January 2016.

 

  • Property, plant and equipment (IAS 16): Due to the componentization of fixed assets, the depreciation expense has increased by SAR 10.6 million resulting in decrease in net book value of fixed assets and value of investment in associate companies is reduced by SAR 0.3 million due to componentization of fixed assets. Correspondingly, retained earnings are reduced by SAR 10.9 million. 
     
  • Employee benefits (IAS 19): IAS 19 states that the measurement of a net defined benefit liability or assets requires the application of an actuarial valuation method, the attribution of benefits to periods of service, and the use of actuarial assumptions. According to the actuarial valuation, there is increase in provision for end of service benefits by SAR 11.1 million and value of investment in associate companies is reduced by SAR 1.6 million due to actuarial valuation. Correspondingly, retained earnings are reduced by SAR 12.6 million.
     
  • Certain assets are reclassified from Fixed Assets to Intangible Assets and Investment Property. However, there is no financial impact.
     
  • Total impact is estimated to be on SISCO group retained earnings is negative SAR 33.9 million reducing the total equity to SAR 1,400 million.
     
  •  Total negative impact is expected to be on equity attributable to SISCO shareholders are SAR 23.6 million reducing consolidated equity to SAR 948.4 million.

3.Income Statement and Balance Sheet comparatives for 2016 will be ready by 28th February 2017.

4.Full year 2016 Special Purpose Audited Financial Statements under IFRS to be ready by 31st March 2017.

5.1st Quarter comparatives under IFRS shall be included in quarterly financial statements for Q1 2017.

6.There are no constraints affecting the company ability to prepare its financial statements in accordance with IFRS.

7.The company confirms its readiness in the application of IFRS and the preparation of its financial statements starting from the first quarter 2017 and during the regular period specified.




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