Question

The TMA Questions

Jazeera Airways

Jazeera Airways K.S.C.P. (the “Parent Company”) was incorporated by Amiri Decree on 3 March 2004 as a Kuwaiti Public Shareholding Company under the laws of Kuwait and is engaged in the business of air transportation and commercial passenger services under a license from the Directorate General of Civil Aviation.

You can download the 2017 annual report for Jazeera Airways directly from the following web page:

http://investorrelations.jazeeraairways.com/en/about-jazeera/investor-relations/financial-information/#annual

Instructions:

Use the annual report to answer the following questions:

1- What are the consolidated financial statements of Jazeera Airways K.S.C.P. (“the Ultimate Parent Company”) and its subsidiaries (collectively “the Group”)?

[10 marks]

2- What is the basis of preparation of the consolidated financial statements 2017?

3- List five objects of the Ultimate Parent Company?

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4- What are the subsidiaries of the Ultimate Parent Company?

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5- Go through the “INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS” and answer the following questions:

a. Who is responsible for the preparation and fair presentation of these consolidated financial statements?

b. What is the name of the independent auditors?

c. What is the basis for opinion of the independent auditor, and determine the auditor’s responsibilities for the audit of the consolidated financial statements?

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Answer 1

(1): The consolidated financial statements of Jazeera Airways K.S.C.P. (“the Ultimate Parent Company”) and its subsidiaries (collectively “the Group”) are:

• Consolidated statement of financial position as at 31 December 2017
• Consolidated statement of income – year ended 31 December 2017
• Consolidated statement of comprehensive income – year ended 31 December 2017
• Consolidated statement of changes in shareholder’s equity - year ended 31 December 2017
• Consolidated statement of cash flow - year ended 31 December 2017

(2): The statements have been prepared as per IFRS (International Financial Reporting Standards) that has been issued by IASB. The statements have also been prepared as per the interpretations of IFRIC – International Financial Reporting Interpretations Committee. The statements are prepared under the historical cost basis of measurement. All figures are reported in the currency of Kuwaiti Dinar.

(3): Five objects are listed below:

• Air transportation services without the luxury services.
• Carry out all air transportation and other air services and all other related activities in Kuwait and abroad.
• Assist in co-investment processes specialized in the aviation industry.
• Booking tickets and passengers’ services.
• Conducting all air cargo business inside and outside Kuwait within the limits as stipulated by law.

(4): The subsidiary of the Ultimate Parent Company is – Al Sahaab Aviation Services W.L.L. The percentage of holding is 99.99%.

(5): (a): Management is responsible for the preparation and fair presentation of the consolidated financial statements.

(b): Deloitte & Touche

Al-Wazzan & Co.

(c ): The basis for opinion of the independent auditor is in accordance with International Standards on Auditing (ISAs). The auditors are independent as per International Ethics Standards Board for Accountant’s Code of Ethics for Professional Accountants (IESBA code).

The auditor’s responsibility is to obtain reasonable assurance with regards to whether the financial statements are free from material misstatements (or not). It includes determination of any fraud or error (if any) and issuing an audit report containing their opinion. For this the auditors will identify and assess risks of material misstatement, obtain an understanding of internal control at the company and evaluate the appropriateness of accounting policies being used in the company. The auditors will also obtain sufficient appropriate audit evidence with regards to the financial statements and henceforth express an opinion.