Saudi Telecom Co. — Capital/Financing Update 2016

Aug 29, 2016

SAUDI TELECOM COMPANY ANNOUNCES THE PHASES OF ITS CONVERSION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (FIRST PHASE).

7010 · 29/08/2016 08:36:34 · Announcement #43643 · View on Saudi Exchange

SAUDI TELECOM COMPANY ANNOUNCES THE PHASES OF ITS CONVERSION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (FIRST PHASE).

The Saudi Telecom Company (the company) commenced its plan of conversion to International Financial Reporting Standards (IFRS) during 2014, after the adoption of Saudi Organization of Certified Public Accountants (SOCPA) for the IFRS, in cooperation with experts in this field to implement the conversion project, including objectives and clear guidelines and then the adoption of the plan by the company board of Directors and followed up on a regular basis by the audit Committee.

In line with the announced CMA instructions on 20/08/2016, obliging listed companies on the stock market to disclose all phases of its conversion to IFRS starting from 1/1/2017, the company announced that its plan to convert to IFRS the first phase includes the following:

1) Approved the conversion plan to the IFRS, including target dates at this phase which includes the adoption of the company accounting policies in September 2016.

2) The company has allocated the necessary resources and expenditure for this project and contracted with an external consulting companies to work on the project through its various phases, which includes analysis for the gap differences between Saudi Arabian accounting standards and international accounting standards and the impact on the company systems and procedures, and then begin the phases of implementing the IFRS, and as part of the project scope and deliverables for the consulting firms, is knowledge transfer, a multiple awareness and training sessions with regard to IFRS and its implications on the company are arranged for board of directors and top management and IFRS conversion project teams.

3) A high level steering committee has been formed to oversee the Project, and other working groups by the company and consultants has been formed include a qualified experts specializing in this field.

4) Limited to the most important challenges and difficulties faced by the company in the conversion to IFRS is alignment of the accounting policies of its subsidiaries, associates and joint ventures with the company accounting policies, given that the company has local and an international variety investments in subsidiaries, associates and joint ventures. These challenges and difficulties faced by the company have been identified and dealt with successfully and thankfully within the project plan without any impact on the phases of the completion of the conversion project and scheduled timetable.

5) Thankfully it has been prepared a draft of the consolidated financial statements of 2016 semiannual for the company according to IFRS. The company is currently completing the procedures that will enable it to issue the final consolidated financial statements and once its completed, the external auditor of the company will audit it. This additional procedure carried out by the company aims to facilitate the implementation of IFRS process during the first quarter 2017.

Based on what mentioned above, the company confirms its commitment to the conversion to IFRS and its ability to issue 2017 interim quarterly and annually financial statements according to IFRS on time, God willing.

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.