DEFICIT 13 2.1.12 RISKS RELATED TO THE INCREASE IN THE COMPANY’S CURRENT LIABILITIES AGAINST ITS
D. Important provisions in determining the lease term for contracts that include renewal options
6.7 Results of the Operations of the Financial Years Ending 31 March 2020G, 2021G, and 2022G
6.7.2 Financial Position
6.7.2.4 Current Liabilities
The following table shows the current liabilities for the financial years ended March 31, 2020, 2021 and 2022.
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Table No. ( Current Liabilities
Thousands of Saudi Riyals
Financial year ended on March 31 Increase/ (Decrease) CAGR 2020G
Restated 2021G
Restated 2022G
Restated March 31,
2021G March 31,
2022G 2020G - 2022G
Trade and other payables 85.588 91.492 93.085 6.9 % 1.7 4.3 %
Required to related parties 1.076 1.070 4.385 (0.6%) 309.8 % 101.9%
Current portion of long-term lease obligations 25.751 28,048 19.871 8.9 % (29.2%) (12.2%)
Current portion of long-term loans 13.611 3.203 20.378 (76.5%) 536.3 % 22.4 %
Zakat due 21.714 30.260 29.906 39.4 % (1%) 17.4%
Total current liabilities 147.740 154.072 167.625 4.3 % 8.8% 6.5%
Source: Management Information
Current liabilities consisted mainly of trade and credit balances, which constituted 57.9%, 59.4% and 55.5% of the total current liabilities as on March 31, 2020G, 2021G and 2022G, respectively.
Current liabilities increased by 4.3% from 147.7 million Saudi Riyals as on March 31, 2020G to 154.1 million Saudi Riyals as on March 31, 2021G, with an additional increase of 8.8% from 154.1 million Saudi Riyals as on March 31, 2021G to 167.6 million Saudi Riyals as on March 31, 2021G, March 31, 2022G. The rise between March 31, 2020G and March 31, 2021 Gwas affected by the increase in the balances of trade and other credit balances, the due Zakat balance and the balance of the current portion of long-term lease obligations. On the other hand, the increase between March 31, 2021G and March 31, 2022G was mainly due to the increase in the balance of current loans after the Company obtained new loans in 2022G.
6.7.2.4.1 Trade Payables and Other Credit Balances
The following table shows trade payables and other credit balances for the financial years ended March 31, 2020G, 2021G and 2022G.
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Table No. ( Trade Payables and Other Credit Balances
Thousands of Saudi Riyals
Financial year ended on March 31 Increase/ (Decrease) CAGR 2020G
Restated 2021G
Restated 2022G
Restated March 31,
2021G March 31,
2022G 2020G - 2022G
Trade Payables 43.194 48.835 47.012 13.1 % (3.7%) 4.3 %
Dividend Payable 8.809 8.809 8.809 - - 0.0%
Accrued Expenses and Other Liabilities 33.586 33.766 37.264 0.8 % 10.4 % 5.3 %
Total 85.588 91.410 93.085 6.9 % 1.7% 4.3 %
Source: Management Information
Trade payables and other credit balances are concentrated in trade payables to the Company’s suppliers, which constituted 505%, 53.4% and 505% of the total balance of trade and other credit balances as on March 31, 2020, 2021 and 2022.
The Company recorded an increase in the balance of trade and other payable balances by 6.9%, or 5.8 million Saudi Riyals, from 85.6 million Saudi Riyals on March 31, 2020G to 91.4 million Saudi Riyals on March 31, 2021G, after the balance of the trade accounts payable account increased by 13.1% between the two periods.
The balance of trade and other payable balances increased by 1.8% to 93.1 million Saudi Riyals on March 31, 2022G, after the balance of accrued expenses and other liabilities increased by 10.4% to 37.3 million Saudi Riyals as on March 31, 2022G.
Trade payable balances include amounts payable to domestic and foreign suppliers. The balance of trade payables increased from 43.2 million Saudi Riyals as on March 31, 2020G to 48.8 million Saudi Riyals on March 31, 2021G, then decreased to 47.0 million Saudi Riyals as on March 31, 2022G. At the end of 2021G, large quantities of products (books, food, etc.) were purchased to keep pace with the increase in trade after the relative recovery from the consequences of the pandemic and in preparation for the opening of shops and commercial sales centers. While the partial decrease in the balance on March 31, 2022G is due to the payments made by the Company.
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Table No. ( Aging of accounts payable as on March 2022 ,31G
Thousands of Saudi Riyals Total 0-90 90-180 180-360 More than 360
Days Days Days Days
Total 47.012 7.201 2.399 3.961 33.451
Source: Management Information
A receivable aging analysis indicates that SAR 33.5 million (71.2% of total receivables as on March 31, 2022) has been outstanding for more than 365 days as on March 31, 2022, compared to a standard credit period of 30 to 90 days. The slow rate of repayment is due to the liquidity problems that the Company has faced in the recent period.
They represent dividends due on previous dividends that were announced before 2009, but were not collected by the previous shareholders, as there was no way at that time to transfer the dividends to the accounts of these shareholders electronically.
Accrued expenses and other liabilities include accrued salaries and benefits, provisions against legal action and other miscellaneous expenses.
Accrued expenses and other liabilities
The following table shows an item of accrued expenses and other liabilities for the financial years ended March 31, 2020, 2021 and 2022.
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Table No. ( Accrued Expenses and Other Liabilities
Thousands of Saudi Riyals
Financial year ended on March 31 Increase/ (Decrease) CAGR 2020G
Restated 2021G
Restated 2022G
Restated 2020G
Restated 2021G
Restated 2022G Restated
Provisions related to lawsuits - 5.320 5.320 - - -
credit loan - 13.800 13.900 - 0.7% -
Salaries and benefits 3.616 2.908 2.490 (19.6%) (14.4%) (17.0%)
Accrued expenses and other liabilities 29.969 11.580 15.117 (61.4%) 30.6% (29.0%)
Total accrued expenses and other liabilities 33.586 33.766 37.264 0.5% 9.6% 4.7%
Source: Management Information
Accrued expenses and other liabilities include a provision for cases and claims in the amount of 5.3 million Saudi Riyals as on March 31, 2022, a provision against a final judgment against the Company in two lawsuits from one of the clients of a subsidiary Company (Thama Distribution Company). The plaintiff, during the year ending March 31, 2022G, the Company filed a petition against the judgment with the Court of Appeal, which rejected the Company’s petition, and the judgment became enforceable on the Company.
It includes accrued expenses and other liabilities amounting to approximately 13.9 million Saudi Riyals as on March 31, 2022 as a debt in favor of an individual. The amount represented in the assignment of a debt right on the Company in favor of a Company owned by the former chairman of the board of directors for a good loan previously granted to the Company in previous years before September 30, 2015. During the financial year ending on March 31, 2022G, the Company’s appeal against the judgment that the Company paid the amount in favor of the plaintiff was rejected and subsequently, the judgment became enforceable on the Company.
Salaries and entitlements include salaries and benefits accrued (airfare and annual holiday expenses) payable. It should be noted that the movement of these salaries and benefits does not follow a certain trend, but is affected by the timing of payment of salaries and the number of employees.
6.7.2.4.2 Due to Related Parties
The following table shows due to related parties for the financial years ending on March 31, 2020, 2021 and 2022.
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Table No. ( Due to Related Parties
Thousands of Saudi Riyals
Financial year ended on March 31 Increase/ (Decrease) CAGR 2020G
Restated 2021G
Restated 2022G
Restated 2020G
Restated 2021G
Restated 2022G Restated
Tihama United Media Company 1.076 1.070 4.385 (0.6%) 309.8 % 101.9 %
Source: Management Information
The balance due to related parties includes a credit balance to Tihama New Media Company. The balance is associated with two types of transactions:
y The first type relates to the collections made on behalf of Tihama for the new advertisement and the payments granted to it.
y The second type is linked to financing payments obtained by the Company from Tihama United Media Company in order to support capital requirements and the requirements of expansion projects.
The balance will be paid in the normal course of business when the Company has liquidity.
6.7.2.4.3 Current Portion of Long-Term Lease Obligations
The following table shows the current and non-current portion of the long-term lease commitments ended as on March 31, 2020, 2021G and 2022G.
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Table No. ( Current and non-current portion of lease contract obligations
Thousands of Saudi Riyals
Financial year ended on March 31 Increase/ (Decrease) CAGR 2020G
Restated 2021G
Restated 2022G
Restated 2020G Restated 2021G Restated 2022G Restated
Balance as at the beginning of the period/year 36.216 38.109 36.354 5.2 % (4.6%) 0.2%
Additions during the period/ year 17.917 12.458 20.972 (30.5%) 68.3% 8.2 %
Financial costs during the period/ year 2.803 1.864 2.135 (33.5%) 14.5% (12.7%)
Rental Adjustments - - 5.089 Not applicable Not applicable Not applicable
Rental discounts - (3.252) (7.960) Not applicable 144.8% Not applicable
Payments of lease obligations during the period/year (18,827) (12.825) (6.116) (31.9%) (52.3%) (43.0%)
Balance at the end of the period/year 38.109 36.354 50.474 (4.6%) 38.8% 15.1 %
Non-current lease commitments 12.358 8.307 30.603 (32.8 %) 268.4 % 57.4%
Current Lease Obligations 25.751 28,048 19,871 8.9 % (29.2%) (12.2%)
Total rental obligations 38.109 36.354 50.474 (4.6%) 38.8% 15.1 %
Source: Management Information
As it was previously mentioned that the financial lease obligations are mainly related to a number of stores, cars, markets and advertising sites owned by the Company and used in its daily activities. The lease periods for these contracts range from one to five years. The decrease in the balance between March 31, 2020G and March 31, 2021G was related to the amortization and the expiry of the contract period of a number of sites. The increase in the year 2022G was related to the stores that opened in commercial centers and airports.
6.7.2.4.4 Current Portion of Long-term Loans
The following table shows the current portion of loans for the financial years ending on March 31, 2020, 2021 and 2022.
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Table No. ( Current portion of long-term loans
Thousands of Saudi Riyals
Financial year ended on March 31 Increase/ (Decrease) CAGR 2020G
Restated 2021G
Restated 2022G
Restated 2020G
Restated 2021G
Restated 2022G Restated
Current portion of long-term loans 13.611 3.203 20.378 (76.5%) 536.3% 22.4 %
Non-current portion of long-term loans 4,462 17.143 38 284.2% (99.8 %) (90.7%)
Total 18.076 20.345 20.417 12.6% 0.4 % 6.3%
Source: Management Information
The current portion of long-term loans decreased by 76.5% from 13.6 million Saudi Riyals on March 31, 2020G to 3.2 million Saudi Riyals on March 31, 2021G as a result of the repayments made by the Company. The balance of the current part of long-term loans returned and increased to 20.4 million Saudi Riyals on March 31, 2022, after the Company obtained new loans in order to support business requirements.
6.7.2.4.5 Zakat Payable
The following table shows the Zakat payable for the financial years ending on March 31, 2020, 2021 and 2022.
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Table No. ( Zakat Payable
Thousand Saudi Riyals
Financial year ended 31 March Increase / (Decrease) CAGR 2020G
Restated 2021G
Restated 2022G
Restated 31 March
2021G 31 March
2022G 2020-
2022G Zakat Payable
Opening Balance 20.382 21.714 30.260 6.5% 39.4% 21.8%
Allocation for:
Current Year 2.132 10.079 348 372.8% (96.5%) (59.6%)
Paid during the year (525) (1.533) (702) 201.2% (54.2%) 17.4%
Closing Balance 21.714 30.260 29.906 39.4% (1.2%) 17.4%
Source: Management Information.
The Zakat payable by the Company and its subsidiaries was calculated in accordance with the regulations issued by the Zakat, Tax and Customs Authority (ZATCA) in the Kingdom of Saudi Arabia.
The Company
y The Company submitted its Zakat declarations for the financial year ended 31 December 2010G to the Zakat, Tax and Customs Authority (ZATCA).
y During the financial year ending on March 31, 2021, the Company received the adjusted Zakat assessments from the Zakat, Income and Customs Authority (ZATCA) for the years ending on March 31, 2015 until March 31, 2019. A provision for the adjusted assessment differences has been recorded in the consolidated statement of profit or loss for the financial year ending on March 31, 2021G. The Company also objected to ZATCA assessments before the General Secretariat of Zakat, Tax and Customs Committees after the Company’s objection was rejected by ZATCA.
y During the year ended on March 31, 2022G, the General Secretariat of Zakat, Tax and Customs issued a decision to cancel the ZATCA decision to adjust the Company’s declaration for the financial year ended on March 31, 2015G. Accordingly, the Company reversed the provision formed against the adjusted assessment for the year, which amounted to 2,096,038 Saudi Riyals. In the consolidated statement of profit or loss for the financial year ended 31 March 2022G. The Zakat, Income and Customs Authority has submitted an appeal against the decision. On 06/05/1444H (corresponding to 30/11/2022G), the General Secretariat of the Zakat, Tax and Customs Committees issued a decision rejecting the appeal submitted by the Zakat, Tax and Customs Authority against the decision, and accordingly the decision became effective in favor of the Company.
y During the year ending on March 31, 2023G, a decision was issued by the General Secretariat of the Zakat, Tax and Customs Committees rejecting the Company’s objection to the amended assessments for the years ending on March 31, 2016G until March 31, 2019G. The Company has submitted an appeal against the committee’s decision for the years ending on March 31, 2016G until March 31, 2019. No decision has been issued by the General Secretariat of the Zakat, Tax and Customs Committees regarding the Company’s appeal until the date of this Prospectus.
y During the financial year ending on March 31, 2022G, the Company received the adjusted Zakat assessment from the Zakat, Income and Customs Authority for the year ending on March 31, 2020G, the difference between the revised assessment and the Company’s declaration is an amount of 429,609 Saudi riyals, a restricted provision against it. The Company has objected before the General Secretariat of the Zakat, Tax and Customs Committees on the items that were not accepted by the Zakat, Income and Customs Authority in the Company’s objection.
y No decision has been issued by the General Secretariat of the Zakat, Tax and Customs Committees regarding the Company’s objection until the date of this Prospectus. The Zakat, Tax and Customs Authority did not review the Company’s submitted returns for the fiscal years ending on March 31 in 2022 and 2021G.
Therefore, it is not possible to determine whether it is possible for the Zakat, Tax and Customs Authority to amend the Company’s submitted declaration and assess additional zakat amounts for those years.
Substantial subsidiaries that are subject to the regulations issued by ZATCA Tihama Modern Bookstores Company
y Tihama Modern Bookstores Company has not submitted its zakat returns since its incorporation, noting that the management of the subsidiary company has calculated allocations for zakat annually, as the value of the provision amounts to 20,942,931 Saudi Riyals as of March 31, 2022. During the financial year ending on March 31, 2021G, the Company received the zakat assessments from the Zakat, Tax and Customs Authority for the years ending on December 31, 2011G until December 31, 2019G. The total value of the differences based on the Adjusted assessments from the provision recorded in the books amounted to 3,540,123 Saudi Riyals, and a provision for which was recorded in the consolidated statement of profits or losses for the financial year ending on March 31, 2021G. The company also objected to those assessments before the General Secretariat of the Zakat, Tax and Customs Committees after the Company’s objection was rejected by the Zakat, Tax and Customs Authority. During the year ending on March 31, 2022G, a decision was issued by the General Secretariat of the Zakat, Tax and Customs Committees to reject the Company’s objection to the amended assessment for the years ending on December 31 in 2017G and 2018G. The company submitted an appeal against the committee’s decision, and the appeal was rejected by the General Secretariat of Zakat, Tax and Customs, and accordingly, the amended assessment shall be paid by the Company.
y A decision was issued by the General Secretariat of the Zakat, Tax and Customs Committees to reject the Company’s objection to the revised assessments for the years ending on December 31, 2011G until 2016G, and the financial year ending on December 31, 2019G. The Company has submitted an appeal against the decision before the General Secretariat of the Zakat, Tax and Customs Committees, and no decision has been issued to accept or reject the appeal until the date of this Prospectus.
y During the period ending on September 30, 2022G, the Zakat, Income and Customs Authority issued an assessment for the financial year ending on December 31, 2020G. The Company has submitted an objection to the Authority’s decision before the General Secretariat of Zakat, Tax and Customs after Zakat, Income and Customs Authority rejected the Company’s objection, and no decision regarding the Company’s objection was issued by the General Secretariat of the Zakat, Tax and Customs Committees until the date of this Prospectus.
Tihama Distribution Company
y The Company submitted its Zakat Declarations up to the financial year ended on December 31, 2021G to ZATCA and paid the Zakat payable pursuant to its Zakat Declarations.
y During the financial year ending on March 31, 2022G, Tihama Distribution Company received the adjusted Zakat assessments from ZATCA for the year ending on December 31, 2015G. The total value of the differences based on the adjusted assessment is 357,242 Saudi Riyals, with a provision recorded in the consolidated statement of profit or loss for the financial year ending on March 31, 2021 AD. The Company also objected to the assessment before the General Secretariat of the Zakat, Tax and Customs Committees after rejecting the Company’s objection by ZATCA.
No decision has been issued by the General Secretariat of the Zakat, Tax and Customs Committees regarding the Company’s objection until the date of this Prospectus.
y During the financial year ending on March 31, 2022G, Tihama Distribution Company received the adjusted Zakat assessment from ZATCA for the years ending on December 31, 2016G and 2017G. The total value of the differences based on the adjusted assessment is 564,653 Saudi riyals, with a provision recorded in the consolidated statement of profit or loss for the fiscal year ending on March 31, 2022G. The Company also objected to the assessment before the General Secretariat of the Zakat, Tax and Customs Committees after rejecting the Company’s objection by ZATCA. A decision was issued by the General Secretariat of the Zakat, Tax and Customs Committees to reject the company’s objection to the revised assessments for the years ending on December 31, 2016G and 2017G, and the company submitted an appeal against the decision before the General Secretariat of the Zakat, Tax and Customs Committees, and no decision was issued to accept or reject the appeal until The date of this publication.
Tihama Education Company
The Company submitted the Zakat Declaration for the period from its establishment until December 31, 2021G and paid the Zakat payables according to the Zakat Declaration submitted by the Company. The Company received the Zakat certificate for the financial year ending on December 31, 2021G, and the Zakat, Income and Customs Authority did not issue any adjusted Zakat assessments for the Company as of the date of this Prospectus.
Integrated Production for Audio -Visual Media Production Company
The Company submitted the Zakat Declaration for the period from its establishment until December 31, 2021G and paid the Zakat payables according to the Zakat Declaration submitted by the Company. The Company received the Zakat Certificate for these years, and the Zakat, Income and Customs Authority did not issue any adjusted Zakat assessments for