Jarir Marketing Co. — Capital/Financing Update 2016

Nov 9, 2016

Jarir Marketing Co. announces the expected financial impact on its consolidated financial statements resulting from floatation of the Egyptian Pound

4190 · 09/11/2016 08:23:21 · Announcement #44534 · View on Saudi Exchange

Jarir Marketing Co. announces the expected financial impact on its consolidated financial statements resulting from floatation of the Egyptian Pound

Jarir Marketing Co. announces that there would be an impact on its consolidated financial statements as a result of the decision made by the Central Bank of Egypt to float the Egyptian pound (EGP) on 3 November 2016, and which resulted in the devaluation of EGP against foreign currencies including Saudi Riyal (SAR). Such impact arises from Jarir Egypt Financial Leasing Co., a wholly owned subsidiary of Jarir Marketing Co., and of which the functional currency is the Egyptian Pound.

The financial impact would mainly be on the consolidated statement of financial position at end of 2016, and shall result from exchange differences )loss( on the translation of net assets of the subsidiary and a monetary item that forms part of Jarir Marketing Co. net investment in that subsidiary. In accordance with the accounting principles, such exchange differences shall be presented as a separate (negative) component within shareholders equity on the consolidated statement of financial position. The amount of such exchange differences will be greatly dependent on the exchange rate of EGP against SAR at end of 2016, which is difficult to predict reliably at present. For the sake of assessing the possible financial impact, if the exchange rate is SAR 1 = EGP 4.5 at end of 2016, the negative component within shareholders equity is estimated to be around SAR 64 million.

It is worth noting that when IFRS becomes applicable, the future exchange differences resulting from that subsidiary shall be generally recognized in (other comprehensive income) (not the profit or loss), and accumulated in the same component of shareholders equity in the consolidated statements of financial position, as long as the investment in that subsidiary is maintained.

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.