3
sixty-six million nine hundred and ninety thousand (66,990,000) Saudi riyals, i.e. Company’s capital was decreased by (34%). Thus, the Company’s shares were decreased from ten million one hundred fifty thousand (10,150,000) shares to six million six hundred and ninety-nine thousand (6,699,000) shares through cancellation of three million four hundred and fifty-one thousand (3,451,000) shares.
y On 16/01/1443H (corresponding to 24/08/2021G), the Company’s board proposed to amend the recommendation for reducing the company’s capital dated 03/09/1442H (corresponding to 15/04/2021G) whereas the new recommendation required that the company’s capital to be reduced from one hundred one million and five hundred thousand (101,500,000) Saudi riyals to fifty two million five hundred sixty- six thousand and nine hundred and thirty (52,566,930) Saudi riyals, i.e. Company’s capital was decreased by (48.21%). Thus, the Company’s shares were decreased from ten million one hundred fifty thousand (10,150,000) shares to five million two hundred fifty-six thousand six hundred and ninety-three (5,256,693) shares through cancellation of four million eight hundred ninety-three thousand three hundred and seven (4,893,307) shares.
y On 16/01/1443H (corresponding to 24/08/2021G), the Board of Directors recommended that the recommendations provided to the Extraordinary General Assembly shall be amended after the completion of the capital reduction whereas the new recommendation required that the company’s capital to be increased from fifty two million five hundred sixty-six thousand nine hundred and thirty (52,566,930) Saudi riyals to three hundred sixty seven million nine hundred sixty eight thousand five hundred and ten (367,968,510) Saudi riyals. Thus, the Company’s shares were increased from five million two hundred and fifty-six thousand six hundred and ninety-three (5,256,693) shares to thirty-six million seven hundred ninety-six thousand eight hundred and fifty-one (36,796,851) shares through increase thirty-one million five hundred and forty thousand one hundred and fifty-eight (31,540,158) shares.
y On 14/07/1443H (corresponding to 15/02/2022G), the Board of Directors recommended that the recommendations provided to the Extraordinary General Assembly shall be amended by adjusting the propose for increasing the capital from fifty-two million five hundred and sixty-six thousand nine hundred and thirty (52,566,930) Saudi riyals to five hundred and seventy-eight million two hundred and thirty-six thousand two hundred and thirty (578,236,230) Saudi riyals. Thus, the Company’s shares were increased from five million two hundred and fifty-six thousand six hundred and ninety-three (5,256,693) shares to fifty-seven million eight hundred and twenty-three thousand six hundred and twenty-three (57,823,623) shares through increase fifty-two million five hundred and sixty-six thousand nine hundred and thirty (52,566,930) shares.
y On 27/03/1443H (corresponding to 03/01/2021G), the Capital Market Authority (CMA) approved an application to decrease the capital.
y On 05/05/1443H (corresponding to 09/12/2021G), the Extraordinary General Assembly approved to amend some provisions of the articles of association (Articles 5, 7, 8, 10, 18, 22, 23, 25, 30, 41, 45 and 46).
y On 05/05/1443H (corresponding to 09/12/2021G), the Extraordinary General Assembly approved the recommendation issued by the Board of Directors dated 16/01/1443H (corresponding to 24/08/2021G) for reducing the Company’s capital from one hundred one million and five hundred thousand (101,500,000) Saudi riyals to fifty-two million five hundred sixty-six thousand and nine hundred and thirty (52,566,930) Saudi riyals in order to amortize the accumulated losses amounted (48,933,070) Saudi riyals. The reduction is made through cancellation of four million eight hundred ninety-three thousand three hundred and seven (4,893,307) shares.
y The company’s current capital is fifty-two million five hundred sixty-six thousand and nine hundred and thirty (52,566,930) Saudi riyals divided into five million two hundred and fifty-six thousand six hundred and ninety-three (5,256,693) equal shares with a nominal value of ten (10) Saudi Riyals per each. All of these shares are ordinary and cash shares.
y On ••/••/••••H (corresponding to ••/••/••••G), the Extraordinary General Assembly approved –based on a recommendation from the Board of Directors dated 14/07/1443H (corresponding to 15/02/2022G)- to increase the company’s capital from fifty-two million five hundred sixty-six thousand nine hundred and thirty (52,566,930) Saudi riyals to five hundred and seventy-eight million two hundred and thirty-six thousand two hundred and thirty (578,236,230) Saudi riyals. The rate of increase is thousand (1,000%) by offering Rights Shares of five hundred twenty-five million six hundred sixty-nine thousand three hundred (525,669,300) shares.
(For more details on the incorporation and history of the company and changes in its capital, please refer to Subsection (10.1.2) “Company organization and stages of development of its capital” of Section (10.1) “Introduction to and highlights of changes in the company” of Section (10) “Legal information” of this Prospectus).
3.3 The company’s principal activities
Article (3) of the Company’s Articles of Association stipulates that the Company is engaged and carried out the following purposes:
Building and management of resorts and tourist establishments, including chalets, motels, hotels, parks, restaurants, recreational cities, playgrounds, swimming pools, rest houses, service stations, central markets and all the services that tourist resorts, yacht harbors and boat docks need. The company owns yachts and boats, which are used for tourist purposes and fishing and diving amateur as well as it trades in fishing and marine gear and training on them. It engages also in acquiring commercial agencies from tourism companies and organizing tourism activities within and outside the Kingdom.
The company conducts its activities in accordance with applicable laws and after obtaining the necessary licenses from the competent authorities, if any.
y The Company’s commercial registry data show that its licensed activity is as follows (hotels, furnished residential units, holidays chalets, tourist motels, resorts, management of tourist accommodation facilities, camps, restaurants with service, beverage shops (coffee shop), rental and lease of bicycles, reservation and marketing of tourist accommodation units, amusement parks, entertainment centers, organizing entertainment events, and operating entertainment facilities).
y The Company may establish branches, offices or agencies within or outside the Kingdom by resolution of the Board of Directors. As at the date of this prospectus, the Company has three (3) branches plus the main branch within the Kingdom.
y The Company may establish, by itself, other limited liability or closed joint stock companies, provided that their capital is no less than five (5) million Saudi riyals. The Company may own stocks and shares in other existing companies or merge with them. The Company may participate with others to establish joint stock or limited liability companies after fulfilling the requirements of the laws and instructions followed in this regard. The Company may also dispose of these stocks or shares, provided that this does not include acting as a broker in trading such stocks or shares. On 05/05/1443H (corresponding to 09/12/2021G), the Extraordinary General Assembly approved to amend the Article to be as follows: (“The Company may establish, by itself, other limited liability or closed joint stock companies, provided that their capital is no less than five (5) million Saudi riyals. The Company may own stocks and shares in other existing companies or merge with them. The Company may participate with others to establish joint stock or limited liability companies after fulfilling the requirements of the laws and instructions followed in this regard. The Company may also dispose of these stocks or shares, provided that this does not include acting as a broker in trading such stocks or shares.”). As at the date of this prospectus, the updated Articles of Association have not yet been issued. The Company have no subsidiaries within and outside Kingdom of Saudi Arabia.
(For more information on licenses that are obtained by Tourism Enterprise Company – SHAMS for engaging its activities, please refer to subsection (2.9) “Governmental approvals and licenses” of Section (9) “Legal information”).
y The Company exercises its activities through the head office and branches. The Company’s principal activities are as follows:
3.4 Tourism business
This activity is the main activity of the Company and includes the following Tourism Business:
y Rental and lease of bicycles.
y Management resorts, tourist accommodation facilities and hotels.
y Operating and marketing of tourist accommodation facilities.
y Operating accommodation facilities, amusement parks, furnished residential units and camps.
The company currently manages and operates the Palm Beach Resort, which is located on leased land from the Municipality of Dammam for 40 years ending on 02/08/2030G. The resort consists of (232) chalets spread over an area of 550,000 square meters in addition to a restaurant and three recreational and sports centers.
3.5 Investment activity
In accordance with Article (4) of the Company’s Articles of Association, the Company may establish, by itself, other limited liability or closed joint stock companies, provided that their capital is no less than five (5) million Saudi riyals. The Company may own stocks and shares in other existing companies or merge with them. The Company may participate with others to establish joint stock or limited liability companies after fulfilling the requirements of the laws and instructions followed in this regard. The Company may also dispose of these stocks or shares, provided that this does not include acting as a broker in trading such stocks or shares. On 05/05/1443H (corresponding to 09/12/2021G), the Extraordinary General Assembly approved to amend the Article to be as follows: (“The Company may establish, by itself, other limited liability or closed joint stock companies, provided that their capital is no less than five (5) million Saudi riyals. The Company may own stocks and shares in other existing companies or merge with them. The Company may participate with others to establish joint stock or limited liability companies after fulfilling the requirements of the laws and instructions followed in this regard. The Company may also dispose of these stocks or shares, provided that this does not include acting as a broker in trading such stocks or shares.”). As at the date of this prospectus, the updated Articles of Association have not yet been issued.
As at the issue date of this prospectus, the Company have neither subsidiaries within and outside Kingdom of Saudi Arabia nor investments in other companies.
The company has a commercial residential building classified as real estate investments consisting of (22) vacant residential units and (4) commercial shops fully leased to one lessor under the contract which ends on 03/31/2024G).
Source: The Company
3.6 Company’s branches
Besides the head office the Tourism Enterprise Company – SHAMS has three (3) branches in Saudi Arabia. The most important details of its existing business records are as follows:
Table NO. (7): Tourism Enterprise Company – SHAMS branches*
No. Branch
name Type of
entity Location Commercial Registration
No. Activity Issue Date Expiry Date Issued by
1
Tourism Enterprise Company – SHAMS
Joint Stock Company (JSC)
Dammam – Half Moon Beach area
2050021572
beverage shops (coffee shop), rental and lease of bicycles, reservation and marketing of tourist accommodation, resorts, management of tourist accommodation facilities, hotels, operating entertainment facilities, entertainment centers, organizing entertainment events, amusement parks, furnished residential units and camps)
20/01/1412H (corresponding to
01/08/1991G)
20/01/1448H (corresponding to
05/07/2026G)
Ministry of Commerce - Commercial Registry Office
in Dammam
2
Palm Beach Resort (Branch of Tourism Enterprise Company)
Branch of JSC
Al Khobar – Half Moon Beach area
2051049490
Building and management of resorts, tourist establishments, jet ski rental, charter boats and marine aquatic games pursuant to Border Guard letter No. 3/26/6484 dated 29/07/1438H
07/08/1433H (corresponding to
27/06/2012G)
06/08/1443H (corresponding to
09/03/2022G)
Ministry of Commerce - Commercial Registry Office
in Al Khobar
3
Branch of Tourism Enterprise Company
Branch of JSC
Al Khobar – Half Moon Beach area
2052103401
organizing entertainment events, operating entertainment facilities, management of tourist accommodation facilities, entertainment centers, amusement parks, hotels, resorts and beverage shops (coffee shop)
06/07/1443H (corresponding to
08/02/2022G)
06/07/1444H (corresponding to
28/01/2023G)
Ministry of Commerce - Commercial Registry Office
in Al Khobar
No. Branch
name Type of
entity Location Commercial Registration
No. Activity Issue Date Expiry Date Issued by
4
Branch of Tourism Enterprise Company
Branch of JSC
Al Khobar – Half Moon Beach area
2052103400
organizing entertainment events, operating entertainment facilities, management of tourist accommodation facilities, entertainment centers, amusement parks, hotels, resorts and beverage shops (coffee shop)
06/07/1443H (corresponding to
08/02/2022G)
06/07/1444H (corresponding to
28/01/2023G)
Ministry of Commerce - Commercial Registry Office
in AlDhahran
Source: The Company
* The company reported that it had written off the sub-registry (Shams Tower for residential units) located in the city of Khobar. The company also had written off its sub-registry located in Riyadh city.
3.7 Company's Major shareholders
As of the date of publication of this Prospectus, no major shareholder owns (5%) or more of the Company's shares.
3.8 Company vision
To contribute actively to the sustainable development of hospitality and accommodation activity by investing in national projects.
3.9 Company mission
Shams hopes to become in the vanguard of leading tourism corporations in the Kingdom and leading in hospitality, accommodation and travel services according to global standards and local spirit.
3.10 Company strategy
The Company’s stated strategic objectives are:
y Implementation of growth plans in the Company’s portfolio, and performance of expansion projects in a number of anticipated strategic enterprises.
y Further consolidation of the “Shams” logo which offers hospitality experiences in a contemporary manner within the resorts and furnished apartments sector.
y Expansion vertically and horizontally, targeting the expected tourism demand to ensure the addition of new sources of revenue generation to serve the expansion plans and enhance the profitability of the company in light of changes in the business environment and high operating costs.
3.11 Company’s strengths and competitive advantages
The company’s strengths and competitive advantages are as follows:
y The company’s experience over 30 years in the tourism, hospitality and entertainment sectors.
y Extensive and varied operations in the tourism, hospitality and entertainment sectors.
3.12 Business interruption
There was no disruption in the Company’s business that may impact or has significantly impacted the financial condition during the last twelve (12) months other than closure of the resort from 15 March 2020G to 20 June 2020G due to the precautionary and preventive measures taken by the State to control the Coronavirus (“COVID-19”) (please refer to Risk 2.1.20) “Risks Related to the Outbreak of the Coronavirus (Covid-19)” in Section (2) “Risk Factors” of this prospectus.
3.13 Employees and saudization
According the “Nitaqat” Program issued by the Saudi Ministry of Human Resources and Social Development, the saudization percentage was (34.58%) as at the date of this Prospectus and is therefore classified under the “low Green” range as “category A” firm as per Nitaqat program. The following table shows the number of Company’s employees for the last three years, i.e.
2019G, 2020G and 2021G:
Table NO. (8): Distribution of the number of Company’s employees for the last three years (2019G, 2020G and 2021G):
Description 2019G 2020G 2021G
Saudis Non-Saudis Saudis Non-Saudis Saudis Non-Saudis
Tourism Enterprise Company – SHAMS 13 37 8 39 18 35
TOTAL 50 47 53
Source: The Company
Table NO. (9): Distribution of the number of Company’s employees as per government agencies data
Description Social Insurance Certificate Nitaqat Resident abstract
Saudis Non-Saudis Saudis Non-Saudis Non-Saudis
Tourism Enterprise Company – SHAMS 17 34 17 35 34
Source: The Company
As at December 2021G, the total number of employees with the Tourism Enterprise Company was 53, of whom 18 were Saudi and 35 were non-Saudi. The variation in the numbers of employees is due to the modernization of the company’s data with various government agencies.