Al Madina Investment CO. (S.A.O.G.)

1 Page (7)for the period ended 30 Sept. 20141 Legal status and principal activitiesShareholding percentage as at 31 March 2014 Shareholding percentage as at 31 December 2012 Country of incorporationPrincipal activitiesSubsidiary companiesOrient Dawn Development Brand Company International Marketing companiesAl Madina Real Estate Company estate activitiesFlexible Industrial Packages Company of industrial productsAl Madina Financial and Investment Services Company International Marketing related activitiesThe Parent companySubsidiaries and associated companies2 Summary of significant accounting of preparation(a)Standards and amendments to existing standards effective 1 January 2013 Notes to the parent company and consolidated financial statementsAl Madina Investment CO. ( )Al Madina Investment Company SAOG (previously Transgulf Investment Holding Company SAOG) ( the Company or Parent Company ) was incorporated as an Omani joint stock company on 10 March 1996.

2 The Company commenced operations on 1 September 1996. On 13 May 2013, the shareholders of the Parent Company in Extraordinary General Meeting approved the change of name from Transgulf Investment Holding Company SAOG to Al Madina Investment Company SAOG. The shareholders of the Parent Company also passed a resolution to acquire the business of Al Madina Financial and Investment Services Company SAOC (note 24). The Parent Company The Parent Company and consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, and applicable requirements of the Commercial Companies Law and the Capital Market Authority of the Sultanate of Oman, The Parent Company and consolidated financial statements are prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value and Investment consolidated financial statements include the results and the financial position of the Parent Company and its Subsidiaries (together referred to as the Group ) and the Group s interest in associates.

3 Investments and real estate related activitiesReal estate activitiesRetail food productsReal estate activitiesInvestment and brokerage servicesCorresponding amounts of the Parent Company and the Group are not comparable as the Parent Company and the consolidated financial statements have been prepared for different accounting periods as disclosed below:20142013 Fifteen months period ended 31 March 2014 Nine months period ended 31 December 2013 Twelve months period ended 31 December 2012 Twelve months period ended 31 December 2013 The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years/period s presented, unless otherwise preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.

4 It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note following standard has been adopted by the Group for the first time for the financial year beginning on or after 1 January 2013 and has a material impact on the Group:IFRS 12, Disclosures of interests in other entities includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, structured entities and other off balance sheet , Consolidated financial statements builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the Parent company.

5 The standard provides additional guidance to assist in the determination of control where this is difficult to (8)for the period ended 30 Sept. 2014 Notes to the parent company and consolidated financial statementsAl Madina Investment CO. ( )(b)New and amended standards not yet effective but early adopted by the Group: (c)Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group:Amendment to IAS 19 regarding defined benefit plans (Annual periods beginning on or after 1 July 2014);Amendment to IFRS 9 Financial instruments classification and measurement (Annual periods beginning on or after 1 January 2018);Amendments to IFRS 1, First time adoption - Annual periods beginning on or after 1 July 2014;Amendments to IFRS 3, Business combinations - Annual periods beginning on or after 1 July 2014;Amendments to IAS 40, Investment property - Annual periods beginning on or after 1 July 2014.

6 Amendments to IFRS 13, Fair value measurement Annual periods beginning on or after 1 July 2014;Amendments to IFRS 2, Share-based payment Annual periods beginning on or after 1 July 2014;Amendments to IFRS 3, Business Combinations Annual periods beginning on or after 1 July 2014;Amendments to IFRS 8, Operating segments Annual periods beginning on or after 1 July 2014;Amendments to IFRS 13, Fair value measurement Annual periods beginning on or after 1 July 2014;Amendments to IAS 16, Property, plant and equipment Annual periods beginning on or after 1 July 2014;Amendments to IAS 38, Intangible assets Annual periods beginning on or after 1 July 2014;Amendments to IFRS 9, Financial instruments Annual periods beginning on or after 1 July 2014; of preparation(a)SubsidiariesThe following standards, amendments and interpretations to existing standards have been published and are mandatory for the Company s accounting periods beginning on or after 1 April 2014 or later periods, but the Company has not early adopted them and the impact of these standards and interpretations is not reasonably estimable.

7 The Group has early adopted IFRS 9 effectively from 1 April 2010, as well as the related consequential amendments to other IFRSs, mainly because this new accounting policy provides reliable and more relevant information for users to assess the amounts, timing and uncertainty of future cash 13, Fair value measurement , aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSsAmendments to IAS 37, Provisions, contingent liabilities and contingent assets , Annual periods beginning on or after 1 July 2014; and IAS 39, Financial instruments Recognition and measurement . Annual periods beginning on or after 1 July 2014 Subsidiaries are all entities (including structured entities) over which the Group has control.

8 The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquired entity and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred.

9 Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest s proportionate share of the recognised amounts of acquiree s identifiable net assets. If the business combination is achieved in stages, the acquisition date fair value of the acquirer s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income.

10 Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statement of comprehensive transactions, balances, income and expenses on transactions between the Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated.