We have also reviewed the adequacy and appropriateness of the information in notes 2, 5, 23 and 36 of the consolidated financial statements. We have also reviewed the adequacy and appropriateness of the information in notes 5 and 6 to the accompanying consolidated financial statements.
General information
December 2020 Within 1 year 1-2 years 2-5 years Over 5 years
GENERAL INFORMATION (continued) Going concern (continued)
The group is committed to the sale of other plots belonging to the seventh phase. The Group is engaged in negotiations with a lender to restructure a credit facility in the amount of 4,546 million Saudi Riyals as at 31 December 2020.
GENERAL INFORMATION (continued) Name Commencemen
- Statement of compliance
- Basis of Measurement
- Critical accounting estimates, judgments and restatements
- Critical accounting estimates, judgments and restatements (continued) Consolidation of structured entities
- Critical accounting estimates, judgments and restatements (continued) Impairment of non-financial assets
Furthermore, the Group's revenue transactions to the Albilad Makkah Hospitality Fund contained a first right of refusal. Furthermore, the exposure of the Group via the units held in Albilad Fund is not considered significant.
Basis of consolidation
Variable returns should be considered more and can include returns, from dividends, fees and tax benefits to economies of scale and cost savings. If the group has the power to direct the relevant activities, is exposed to the variable returns from its involvement in the investee and has the ability to influence those returns through its power over the investee, the structured entity is consolidated.
Functional and Presentation Currency
Summary of significant accounting policies
- Principles of consolidation and equity accounting a) Subsidiaries
Summary of significant accounting policies (continued)
- Principles of consolidation and equity accounting (continued) Transactions eliminated on consolidation
Summary of significant accounting policies (continued) 2 Foreign currencies
- Current versus non-current classification
- Property, plant and equipment
Summary of significant accounting policies (continued) 4 Property, plant and equipment (continued)
- Intangibles assets
Summary of significant accounting policies (continued) 6 Investment properties
Summary of significant accounting policies (continued) 7 Impairment on non-financial assets
- Financial instruments Classification of financial assets
Summary of significant accounting policies (continued) 8 Financial instruments (continued)
- Leases
Evidence that a financial asset is impaired by credit includes observable data for the following events: a) significant financial difficulties of the issuer or the borrower; For trade receivables, the Group applies the simplified approach allowed by IFRS 9, which requires expected lifetime losses to be recognized upon initial recognition of the receivable. The group acting as lessee recognizes a right-of-use asset and a lease liability for all leases with a term of more than 12 months, unless the underlying asset is of low value.
The right-of-use asset is measured at its cost which is the amount of the initial measurement of the lease obligation, any lease payments made on or before the commencement date (minus any lease incentives received), any initial direct costs incurred by the Group; and an estimate of costs to be incurred by the lessee to dismantle and remove the underlying asset, restore the premises on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease required unless those costs are incurred. produce stock. The lease liability is measured at the present value of the lease payments that have not been paid at the date of the consolidated statement of financial position. Rental payments to be made under reasonable certain extension options are also included in the measurement of the liabilities.
If this interest rate cannot be readily determined, the Group uses the lessee's incremental borrowing rate, which is the interest rate that an individual lessee would have to pay to borrow the funds necessary to acquire an asset of similar value, such as a right-of-use asset in a similar economic environment with similar terms, security and conditions. ii) Depreciation of assets representing the right of use. Right-of-use assets are generally depreciated on a straight-line basis over the shorter of the life of the asset or the term of the lease. If it is reasonably certain that the group will exercise the option to purchase, the right-of-use asset is depreciated over the useful life of the underlying asset.
Summary of significant accounting policies (continued) 9 Leases (continued)
- Development properties
Summary of significant accounting policies (continued) 11 Trade receivables
- Cash and cash equivalents
- Restricted cash
- Borrowings
- Borrowings costs
Summary of significant accounting policies (continued) 16 Employee benefits
- Accounts payable and accruals
- Provisions
Summary of significant accounting policies (continued) 18 Provision (continued)
- Payable to other unitholders of investment fund
- Zakat
- Share capital
- Dividends
- Revenues
Summary of significant accounting policies (continued) 23 Revenues (continued)
- Selling, marketing and general and administrative expenses
- Finance income and finance costs
- Segmental Reporting
Rental income from investment properties is recognized in the consolidated income statement and other comprehensive income linearly over the leasing period. Basic earnings per share is calculated by dividing: the profit attributable to the shareholders in the group. with the weighted average number of ordinary shares outstanding in the financial year. ii) Diluted earnings per stock. CODM assesses the group's financial results and position and makes strategic decisions.
The Group signed an agreement ("the Agreement") with the Central District Cooling Company ("CDCC"), a joint venture for the construction, operation and maintenance of the. This represents amounts transferred from investment properties to property, plant and equipment as a result of the change in the nature of use of long-term rental income and capital growth to own use. In relation to the shareholders who were unable to submit their legal title deeds, Makkah Construction and Development Company (“MCDC”) subscribed for shares in the Company in terms of the transfer arrangement on behalf of those owners.
The company has substantial land use rights in full under the Decree. The group has been in possession of the land for the past few years and has started construction on it. During 2020, the competent authorities have issued a unified title in the name of the Company for the entire area of the Group Project.
Property, plant and equipment (continued)
- Classification of financial assets at fair value through profit or loss The Group classifies the following financial assets at fair value through profit or loss
- Equity investments at fair value through profit or loss
- Amounts recognised in statement of profit or loss and other comprehensive income
- Fair value and risk exposure
- Share capital
- Statutory reserve
- Reserve for advances to certain founding shareholders
This team reports directly to the Chief Financial Officer (CFO) and Chief Risk Officer (CRO) of the Group. The group's management has carried out an exercise to determine the net realizable value of their homes. The group has already collected an advance of 100 million Saudi Riyals including 20 million Saudi Riyals during the year 2020.
As a result, the Group recognized change losses of 9.3 million Saudi Riyals recorded within financial expenses as a result of facilities reallocated during the year. As part of the contract, the group withdrew Saudi Riyals in the amount of 4.5 billion and bears SIBOR plus spread borrowing costs. Due to the restructuring of current payments, the group recognized modification losses of 4.9 million Saudi Riyals during the year.
The Group recognized change losses amounting to Saudi Riyal 36.2 million, due to facilities rescheduled during the year. During the year, the Group recognized change losses amounting to Saudi Riyal 18.5 million as a result of rescheduling during the year. The remaining loans of the Group carry interest costs at SIBOR plus spread varying between 1.75% and 5%. j) The Group has a financial covenant relating to a loan facility with an outstanding principal sum of Saudi Riyal 138 million.
The Group met the requirements of the financial covenant during the 2020 and 2019 reporting years. In addition, as of December 31, 2020, the Group has unused banking facilities amounting to Saudi Riyals 3,681 million (December 31, 2019: Saudi Riyals 4,251 million) to meet its liquidity needs.
Note 31 December
Rental income
- Fair value measurement of financial instruments
- Fair value measurement of financial instruments (continued) b) Fair value hierarchy
- Fair value measurement of financial instruments (continued) d) Valuation process
- Risk management framework
- Risk management framework (continued)
- Risk management framework (continued) b) Liquidity risk
Related parties include the company's shareholders, related and associated companies and key management personnel of the group. The remuneration of the Group's key management personnel includes salaries, non-cash benefits and contributions to a post-employment defined benefit plan. The total profit and the profit or loss of the Group's business segments, which are reported to CODM, are measured in accordance with that in the profit and loss.
When measuring the fair value of an asset or liability, the Group uses observable market data to the extent possible. Loans and borrowings, liabilities against rents, payable to other owners of units in investment funds and other liabilities are financial liabilities of the Group. In accordance with the Group's quarterly reporting dates, the Group's finance department determines the fair value of the valuations of financial instruments required for financial reporting purposes, including level 3 fair values.
Risk management policies and systems are regularly reviewed to reflect changes in market conditions and the Group's activities. The Group Management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks the Group faces. The Board has overall responsibility for establishing and overseeing the Group's risk management framework.
Risk management framework (continued) Liabilities to unitholders
Payments are made by the Company to the Fund on a semi-annual basis of 270 million Saudi Riyals, but payments may be deferred for a period of 2 years. Dividends payable to unitholders according to the terms and conditions of the Fund are two semi-annual payments in a year of the total amount of not less than 90% of the annual net distributable profits (dividend is not discretionary). The fund has been consolidated by the Group on the basis set out in Note 21 and as such dividends payable have been shown in the periods based on the terms and conditions of the fund thereof.
The liquidity risk is managed by continuously monitoring that there are sufficient funds and bank and other credit facilities available to meet the group's future obligations. Refer to note 16 for unused credit facilities and note 10 for closing liquidity in the group. Market risk is the risk that changes in market prices - such as exchange rates, interest rates and share prices will affect the Group's income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control exposure to market risks within acceptable parameters while optimizing returns. Market risk is the risk that the fair value or future cash flows of a financial instrument may fluctuate as a result of changes in market earnings or the market prices of securities resulting from changes in the creditworthiness of the issuer or the instrument, changes in market sentiment, speculative activities, supply and demand of securities and liquidity on the market. Market risk includes three types of risk: currency risk, interest rate risk and other price risk.
Risk management framework (continued) i) Currency risk
Risk management framework (continued) d) Capital management
The Group's share of the capital commitments of the joint venture is nil (31 December 2019: 6.84 million Saudi riyals). The Group accounted for this investment as a financial asset measured at fair value through profit or loss. During the year ended December 31, 2020, the Group reassessed its relationship with the Fund in relation to the requirements of IFRS 10 - Consolidated Financial Statements.
Since the group has control over the fund, the fund should have been consolidated in the group's consolidated accounts. During the year ended 31 December 2020, the Group reclassified these payments to the founding shareholders from "advances to shareholders" to equity. Any payments that may be received from the shareholders must be considered as contributions received by the group.
The terms of this change have affected the group's right to payment for the 2 penthouse units. In relation to the guidance on modification accounting in IFRS 15, the change meant that the group no longer had an enforceable right to payment for the 2 penthouse units. However, the Group did not have the right to postpone the settlement of this obligation beyond 12 months.
