LEGAL INFORMATION
10.5 Summary of Material Contracts
10.5.1 Contracts and Transactions with Related Party
y Paragraph (1) of Article (71) of the Companies Law states that a board member may not have any direct or indirect interest in transactions or contracts made for the company, except with prior authorization from the ordinary General Assembly (GM) and subject to rules set by the competent authority. The board member shall notify the board of directors of any direct or indirect interest he may have in the transactions or contracts made for the company. Such notification shall be recorded in the minutes of the board meeting.
Said members may not participate in voting on the resolution to be issued on this matter by the board of directors and the assembly of shareholders. The chairman of the board shall inform the General Assembly (GM), when it convenes, of transactions and contracts in which a board member has a direct or indirect interest, providing a special report from the external auditor of the company. Paragraph (2) of the same Article adds that If a board member fails to disclose his interest as provided for in paragraph 1 of this Article, the company or any stakeholder may petition the competent judicial authority to invalidate the contract or obligate the member to return any profit or benefit realized therefrom.
y According to the company, there are no commercial transactions with related parties. However, according to the financial statements for the year ending on December 31, 2020G, the value of transactions with related parties during the year in salaries, benefits, and the like for senior management amounted to (1,817,338) Saudi riyals, while in 2019G it amounted to (2,627,813) Saudi riyals.
10.5.2 Lease Contracts
1. Lease Contracts of the company as “Lessor”
y The company has entered into one (1) lease contract in its capacity as a lessor. This contract is considered one of the conventional lease contracts (which state focus on the amount of rent the company pays to the lessor annually), renewable, and it is considered void if the lessee is late in paying the rent. The lessee is not entitled to sub-rent the property without obtaining the written consent of the lessor. Further, the method of using the leased property or the activity may not be changed without the consent of the lessor.
The following is a summary of the most important information about the aforementioned contract
Table NO. (65): List of valid and renewed lease contracts for the sites occupied by the company as a lessor
No Lessor Lessee Loc. Type of
property Contract date Contract
duration Contract end date
Contract Value (SAR)
Renew
status Registration
1
Touristic Enterprise Company - TECO
Lubdah Place restaurant Corporation
Al Khobar - Olaya District
Commercial Exhibits
08/08/1441AH (corre- sponding to 01/04/2020G)
Four (4) years binding on both parties, starting from 01/04/2020G
21/09/1445AH (corre- sponding to 31/03/2024G)
One hundred eighty thousand (180,000) Saudi riyals - excluding value- added tax.
The first six months is a grace period.
- Contract not electronically registered
Source: The Company
2. Lease Contracts of the company as “Lessee”
y The company has entered into one (1) lease contract in its capacity as a lessee. This contract is considered one of the conventional lease contracts (which state focus on the amount of rent the company pays to the lessor annually), renewable, and it is considered void if the lessee is late in paying the rent. The lessee is not entitled to sub-rent the property without obtaining the written consent of the lessor. Further, the method of using the leased property or the activity may not be changed without the consent of the lessor.
The following is a summary of the most important information about the aforementioned contract
Table NO. (66): List of valid and renewed lease contracts for the sites occupied by the company as a lessee
No Lessor Lessee Loc. Type of
property Contract date Contract
duration Contract end date
Contract Value (SAR)
Renew
status Registration
1 Dammam
Amana
Touristic Enterprise Company – TECO
Half Moon Bay - Al Dammam
Shore Land
01/01/1410AH (corresponding to
03/08/1989G) Lease contracts entered into by the company as a lessee Forty years (the lease becomes effective after one year from the date of signing the con- tract)
29/02/1452AH (corre- sponding to 02/08/2030G)
Thirty thousand (30,000) Saudi riyals annually
-
contract not electronically authenti- cated
Source: the Company
y With reference to Cabinet Resolution No. 292, dated 16/5/1438AH (corresponding to 13/02/2017G), which stipulates that non-registered lease contracts on the Ejar Electronic Network shall not be considered valid contracts that produce their administrative and legal effects and that the Ejar Electronic Network for rental services has been launched In cooperation between the Ministry of Justice and Ministry of Housing on 17/05/1439AH (corresponding to 03/02/2018G), a circular was issued by the Ministry of Justice approving the application of this to all contracts concluded after 05/05/1440AH (corresponding to 11/01/2019G). As of the date of this prospectus coming out, the company has not authenticated the two lease contracts.
10.5.3 Supply Contracts
Until the date of this prospectus, the company has not concluded any supply contracts, as it stated that it does not have long-term contracts or written agreement with any of the suppliers where they are dealt with through purchase orders.
Accordingly, there are no long or short-term contracts and agreements, and all current transactions are made through buying and selling orders with all the clients of the company.
10.5.4 Contracts and agreements for services and consulting
The company has entered into agreements with financial advisors, auditing offices, and chartered accountants to audit and examine the financial statements according to the following
Table NO. (67): Service agreement made by the company
No Type of contract or agreement
Purpose of contract or
agreement contracting party Contract date of
signing Contract Value
Duration of the
contract Remarks
1
Consulting and studies agreement for entertainment services for the Touristic Enterprises (TEC) Company.
Providing consultations, studies, designs, and development plans for entertainment services at the Palm Beach Resort, where the first party makes a recommendation for the appropriate facilities, the financial objectives of the project, and the operational guidelines for the property to meet the needs of the resort’s guests.
APOGEE ATTRACTIONS LLC
26/05/1440AH (corresponding to 01/02/2019G)
One hundred and three thousand (103,000) US dollars.
-
An amount of twenty thousand (20,000) US dollars was transferred through Alinma Bank via corporate electronic services from the company’s account to APOGEE ATTRACTIONS LLC on February 21, 2019G
2 External Audit Agreement
Auditing the statement of financial position as of December 31, 2021G, the comprehensive income statement, the statement of changes in equity, the statement of cash flows for the year ended as on the mentioned date and the clarifications notes of financial statements, including a summary of the important accounting policies (financial statements) of the Touristic Enterprises (TECO) Company in addition to examining the statements The interim condensed financial position, which includes the interim financial position statement, the interim income statement, the interim comprehensive income statement, the interim statement of changes in equity and the interim cash flow statement for the period ending on June 30, 2021G, September 30, 2021G, and March 31, 2022G.
PKF Ibrahim Ahmed Al Bassam and Co (Certified Public Accountants)
26/10/1442H (corresponding to 07/06/2021G)
One hundred- fifty thousand (150,000) Saudi riyals.
unlimited -
3 Financial services agreement
Providing consulting services with respect to the capital of the Touristic Enterprises (TECO) Company by (48.2%) as mentioned in the revised recommendation of the Board of Directors on 24/08/2021G.
Adeem Capital 14/02/1443AH (corresponding to 21/09/2021G)
Seventy thousand (70,000) Saudi riyals – exclusive value-added tax.
One year starting from the date of signature
-
Source: the Company
y Except for the contracts mentioned previously, no material contracts entered into by the company in the course of its activity have been reviewed.
10.5.5 Loans and credit facilities
y The company does not have any loans or bank facilities or agreements of the type of finance lease with any of the Saudi and non-Saudi banks that are standing as of the date of preparing this prospectus. Based on what the company has informed us, it has not provided a cash loan of any kind to members of its board of directors, it has not provided any guarantees for any loans to board members or its employees with third parties, and has not opened any letters of credit.
y The company did not also grant loans to any of the employees except for the salaries advance payments, which are calculated from the housing and/or transportation allowance according to the work contract.