IFRS 16- Leases
6.7 Results of operations
6.7.16 Current liabilities
Table No. (6.36): Current liabilities as at 31 December 2019G, 2020G and 2021G
SAR in 000s As at 31 December 2019G
(Audited) As at 31 December 2020G
(Audited) As at 31 December 2021G (Audited)
Lease liabilities-current portion 9,629 12,234 14,775
Short term loans 69,981 48,136 52,627
Trade payables 8,678 16,035 21,240
Revenue received in advance 723 1,719 1,506
Accruals and other payables 7,895 20,092 19,092
Provision for zakat 5,271 5,171 6,007
SAR in 000s As at 31 December 2019G
(Audited) As at 31 December 2020G
(Audited) As at 31 December 2021G (Audited)
Dividends payable 2,004 - -
Total current liabilities 104,180 103,387 115,246
Key performance indicators
Days payable outstanding 10 12 15
Source: Audited financial statements for the financial years ended as at 31 December 2019G, 2020G and 2021G
Lease liabilities – current portion
As at 31 December, lease liabilities are presented in the statement of financial position as follows:
Table No. (6.37): lease liabilities as presented in the statement of financial position as at 31 December 2019G, 2020G and 2021G
SAR in 000s As at 31 December 2019G
(Audited) As at 31 December 2020G
(Audited) As at 31 December 2021G (Audited)
Current portion 9,629 12,234 14,775
Non-current portion 77,319 85,594 107,107
Total lease liabilities 86,948 97,828 121,882
Source: Audited financial statements for the financial years ended as at 31 December 2019G, 2020G and 2021G
Loans
Table No. (6.38): Short term loans as at 31 December 2019G, 2020G and 2021G
SAR in 000s As at 31 December 2019G
(Audited) As at 31 December 2020G
(Audited) As at 31 December 2021G (Audited)
Short term loans - Current portion 69,981 48,136 52,627
Long term loans – Non-current portion - - -
Total 69,981 48,136 52,627
Source: Audited financial statements for the financial years ended as at 31 December 2019G, 2020G and 2021G
Table No. (6.39): Short term loans by bank as at 31 December 2021G
SAR in 000s
Balance of short- term loans as at 31 December
2021G
Interest rate Loan maturity
date Loan maturity date
Al Rajhi Bank 36,338 Fluctuates
between 2.72%
and 2.74%
Fluctuates between April 2022G, May 2022G and June 2022G.
Promissory note worth one hundred and fifty-one million one hundred and twenty thousand (151,920,000) Saudi riyals. Guarantees of responsibility, performance and commitment are provided by Sulaiman bin Mohammed Al-Saif, Mohammed bin Sulaiman Al-Saif and Haitham bin Sulaiman Al-Saif.
Promissory note worth one hundred and twelve million, nine hundred and seventy-seven thousand seven hundred and seventy-eight (112,977,778) Saudi riyals.
Guarantees of responsibility, performance and commitment are provided by Sulaiman bin Mohammed Al-Saif, Mohammed bin Sulaiman Al-Saif and Haitham bin Sulaiman Al-Saif.
SABB 16,175 Fluctuates
between 2.71%
and 2.77%
Fluctuates between April 2022G, May 2022G and June 2022G.
Promissory note worth sixty million and four hundred (60,400,000) Saudi riyals by the Company and signed by each of Suleiman bin Muhammad bin Saleh Alsaif and Muhammad bin Suleiman bin Muhammed Alsaif as reserve guarantors.
SABB-credit cards 114 0.0% January 2022G
Total 52,627
Source: Management Information
Short-term Murabaha loans were obtained from local banks at SIBOR rate + interest rate agreed in return to purchases agreements and Murabaha contracts. Total short-term loans decreased from SAR70.0 million as at 31 December 2019G to SAR48.1 million as at 31 December 2020G, stemming from the settlement of loans over the same period. Total short-term loans then subsequently increased to SAR52.6 million as at 31 December 2021G, due to the additional loans obtained by the Company to finance its operations. Such loans are classified as short-term as their repayment schedule falls within the range of 6 months (For further details, please refer to Section 12.4.4 “Financing Agreements”).
Trade payables
Trade payables consist of payables to local and foreign suppliers. Trade payables balance increased from SAR8.7 million as at 31 December 2019G to SAR16.0 million as at 31 December 2020G and then to SAR21.2 million as at 31 December 2021G in line with the increase in purchases from suppliers over the historical years to meet the market demand.
Revenue received in advance
Revenue received in advance related to the leasing out of commercial showrooms of the buildings owned or fully leased by the Company. Revenue received in advance increased from SAR723 thousand as at 31 December 2019G to SAR1.7 million as at 31 December 2020G, in line with the increase in the number of tenants over the same period. Revenue received in advance then decreased to SAR1.5 million as at 31 December 2021G, driven by the decrease in the number of tenants over the same period.
Accruals and other payables
Table No. (6.40): Accruals and other payables as at 31 December 2019G, 2020G and 2021G
SAR in 000s As at 31 December 2019G
(Audited) As at 31 December 2020G
(Audited) As at 31 December 2021G (Audited)
VAT payable 2,259 11,089 11,558
Allowance for vacation 1,433 2,897 2,816
Accrued commissions-employees 2,650 3,045 1,181
Allowance for tickets 572 1,045 1,156
Finance cost accrued - 481 704
Rent payable 314 314 588
Accrued expenses 628 710 275
Other credit balances 39 509 814
Total 7,895 20,092 19,092
Source: Audited financial statements for the financial years ended as at 31 December 2019G, 2020G and 2021G
VAT payable
VAT payable relates to the VAT payable to the Zakat, Tax and Customs Authority. VAT payable increased from SAR2.3 million as at 31 December 2019G to SAR11.1 million as at 31 December 2020G, mainly due to the increase in the VAT rate from 5% to 15% in the Kingdom of Saudi Arabia over the same period. VAT payable then increased to SAR11.6 million as at 31 December 2021G, mainly due to the increase in the Company’s sales, namely during Ramadan and at year-end.
Allowance for vacation
Allowance for vacation comprised of the vacation entitled to the employees. Allowance for vacation increased from SAR1.4 million as at 31 December 2019G to SAR2.9 million as at 31 December 2020G, and then decreased to SAR2.8 million as at 31 December 2021G, mainly due to updating the calculation method during this period.
Accrued commissions-employees
Accrued commissions to employees related mainly to the commissions provided to the employees upon attaining the sales target, especially in Ramadan and at year-end. Accrued commissions to employees increased from SAR2.7 million as at 31 December 2019G to SAR3.0 million as at 31 December 2020G, mainly due to the ability of employees to the yearly sales target coupled with good results in the yearly performance feedback during 2020G. Accrued commissions to employees decreased to SAR1.2 million as at 31 December 2021G.
Allowance for tickets
Allowance for tickets comprised of the tickets entitled to the employees excluding the executives or any member of the Board of Directors. Allowance for tickets increased from SAR572 thousand as at 31 December 2019G to SAR1.0 million as at 31 December 2020G, and then to SAR1.2 million as at 31 December 2021G, mainly due to updating the calculation method during this period.
Finance cost accrued
Finance cost accrued relates to letters of credits. Finance cost accrued balance increased from SAR481 thousand as at 31 December 2020G to SAR704 thousand as at 31 December 2021G, driven by the increase in the business operations and purchases from foreign and local suppliers for the Company over the same period.
Rent payable
Rent payable related to rent payable in relation to the leased branches. Rent payable increased from SAR314 thousand as at 31 December 2019G and 2020G to SAR588 thousand as at 31 December 2021G, due to the enhancement of the online store whereby they required additional space to operate.
Accrued expenses
Accrued expense comprised of accrued social security insurance, accrued salaries for employees, accrued phone, electricity, and maintenance expenses, and accrued marketing and advertising expenses. Accrued expense increased from SAR628 thousand as at 31 December 2019G to SAR710 thousand as at 31 December 2020G as a result of the increase in accruals related to social security, salaries, maintenance and electricity. Accrued expense decreased to SAR275 thousand as at 31 December 2021G, mainly due to settlements made by the Company in relation to social security insurance.
Other credit balances
Other credit balances mainly relate to expenses for employee training programs, gifts to customers, and checks payable, in addition to other expenses. Other credit balances increased from SAR39 thousand as at 31 December 2019G to SAR509 thousand as at 31 December 2020G, mainly due to the increase in loyalty program accruals in relation to “Testahel” program that was launched during 2020G. Other credit balances increased further to SAR814 thousand as at 31 December 2021G, driven by accrued payment vouchers with a total amount of SAR300 thousand.
Provision for zakat
Table No. (6.41): Provision for zakat as at 31 December 2019G, 2020G and 2021G
SAR in 000s As at 31 December 2019G
(Audited) As at 31 December 2020G
(Audited) As at 31 December 2021G (Audited)
Opening balance 3,641 5,271 5,171
Zakat charge for the year 5,374 5,597 6,551
Paid during the year (3,745) (5,697) (5,715)
Closing balance 5,271 5,171 6,007
Source: Audited financial statements for the financial years ended as at 31 December 2019G, 2020G and 2021G
The Company submitted its zakat returns to the Zakat, Tax and Customs Authority for all the years up until 31 December 2020G, and obtained a zakat certificate. The latest zakat assessment was made by the Zakat, Tax and Customs Authority in 2018G.
Dividends payable
Dividends payable comprised of dividend distributed to the Company’s shareholders, and amounted to SAR2.0 million as at 31 December 2019G, and then decreased to nil as at 31 December 2020G, as a result of the Company’s settlement of the entire dividends payable over the same period.