DEFICIT 13 2.1.12 RISKS RELATED TO THE INCREASE IN THE COMPANY’S CURRENT LIABILITIES AGAINST ITS
G. Non-controlling interest
10.2 Company’s activity
10.2.1 The Company’s Subsidiaries
The Company owns a controlling share in a number of companies it has established or acquired or has shares in them in the Kingdom of Saudi Arabia.
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Table No. ( Subsidiaries
Company’s Name Capital Place of
Incorporation
Main Place of Operations
Activity Equity
Country City
Core Subsidiaries
Tihama Modern Bookstores Company 81,671,977 Saudi Riyals KSA KSA Jeddah Stationery and
Libraries 100%
Tihama Distribution Company 3,500,000 Saudi Riyals KSA KSA Riyadh Publication and
distribution 100%
Tihama Education Company* 200,000 Saudi Riyals KSA KSA Riyadh Retail 100%
Integrated Production Company for
Audiovisual Media Production 10,000 Saudi Riyals KSA KSA Riyadh Film and program
production 70%
Non-core Subsidiaries Tihama Holding for Commercial
Investment*** 500,000 Saudi Riyals KSA KSA Riyadh Business
Investment 100%
Estidama International Real Estate
Company*** 500,000 Saudi Riyals KSA KSA Jeddah Real Estate
Investment 100%
Tihama International Advertising
Company*** 500,000 Saudi Riyals KSA KSA Riyadh Advertising 100%
Fast Advertising Company for
Advertising*** 25,000 Saudi Riyals KSA KSA Riyadh Advertising 100%
International Company Advertising
Services**** 1,000,000 Saudi Riyals KSA KSA Riyadh Advertising 51%
Aventus Global Trading Company***** AED 600,000 UAE UAE Dubai Retail 100%
Weaving Company for Audiovisual Media
Production 100,000 Saudi Riyals KSA KSA Riyadh Film production 50%
Tihama New Media for Advertising
Company****** 100,000 Saudi Riyals KSA KSA Riyadh Media and research 100%
Source: The Company.
* During the financial year ending on March 31, 2021G, the Company acquired additional shares from Tihama Education Company (a subsidiary Company), representing 51% of the Company’s capital, so that the equity of the parent Company became 100% of the subsidiary’s capital as on March 31, 2021G. As this transaction relates to the acquisition of an additional share in a subsidiary without a change in control thereover, it was recorded as an equity transaction, and the increase in consideration over the book value of the non-controlling interest amounting to 3,459,628 Saudi Riyals was recognized in the equity of the parent Company.
** During the year ending on March 31, 2019G, the parent Company participated in the establishment of the Integrated Production Company for Audio-visual Media Production, a limited liability Company with a capital of 10,000 Saudi Riyals, owned by 35%, during the financial year ending on March 31, 2021G, the parent Company acquired additional shares representing 35% of the capital of the Integrated Production Company, with an estimated value of 7,250,000 Saudi Riyals. Since this transaction relates to the acquisition of an additional share in a subsidiary without a change in control, it was recorded as a transaction within equity, and the increase in the consideration paid over the book value of the non-controlling interest amounting to 7,231,139 Saudi Riyals was recognized in the equity of the parent Company.
*** It was established for private purposes and is not currently engaged in activities.
**** The partners in the International Advertising Services Co. Ltd.– Intermarkets decided on November 16, 2011, to suspend the Company’s activity for a period of six months, subject to renewal, and not to do any new business during the period to avoid loss. Tihama’s inability to use its legal right to manage this Company because of stopping the Company’s activity since November 16, 2011G, and the Company’s inability to obtain any data and financial information that would enable it to unify the Company and the expiration of the commercial registration and licenses necessary for the Company to perform its work, which led to the parent Company losing control of the investee Company. Accordingly, the parent Company decided to stop compiling the financial statements of the International Advertising Services Co. Ltd.– Intermarkets within the Company’s consolidated financial statements.
**** During the year ending March 31, 2022G, the partners in the International Advertising Services Co. Ltd.– Intermarkets decided to liquidate the Company and appointed a liquidator to take the legal procedures in this regard.
***** On May 9, 2022G, an agreement was signed between Aventus Global Trading Company operating in the United Arab Emirates and NextByte Trading Company to sell a group of assets and transfer obligations related to the business operations of Aventus Global Trading Company. The agreement is subject to and requires obtaining All necessary approvals from shareholders and relevant bodies to complete the transfer of franchise rights and lease contracts
On October 4, 2022, Aventus Global Trading Company obtained the necessary approvals from the stakeholders and relevant bodies to complete the process of transferring franchise rights and lease contracts. Accordingly, the process of transferring assets and liabilities related to the business operations of Aventus Global Trading Company and the procedures for selling the company’s stock to the buyer (Next Byte Trading Company) have been completed.
****** During the year ending on March 31, 2021G, the Company acquired all the shares of the partner in Tihama New Media Company (an associate Company), and accordingly, the ownership of the Company became 100% of the Company’s capital and became a subsidiary Company as of March 31, 2021G.
Below are the details of the Company’s subsidiaries:
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Table No. ( Tihama Modern Bookstores Company
Company Name Tihama Modern Bookstores Company
Address Jeddah-Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Buying, selling and marketing stationery, computers, accessories, furniture and school supplies.
Company’s Capital Eighty-one million six hundred and seventy-one thousand nine hundred and seventy-seven (81,671,977) Saudi Riyals.
Ownership Percentage 100%
Number of shares and nominal
value per share Eight million one hundred and sixty-seven thousand one hundred and ninety-eight (8,167,198) shares at a value of ten (10) Saudi Riyals per share.
Management
- Sari Ibrahim Abdulkarim Al-Mayouf - Ibrahim Mohammed Ibrahim Al-Shabib - Abdulkarim Ibrahim Mohammed Al-Mayouf Commercial Registration
Certificate No. 4030206816
CR Date of issuance 05/01/1432H (corresponding to 11/12/2010G) CR Expiry Date 05/01/1445H (corresponding to 23/07/2023G) Source: The Company
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Table No. ( Tihama Distribution Company
Company Name Tihama Distribution Company
Address Riyadh -Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register)
Publishing paper books, dictionaries, atlases and maps (includes importing and producing written, drawn or illustrated intellectual containers) - retail sale of books, magazines, newspapers and educational aids - retail sale of stationery, newspapers, magazines, and libraries.
Company’s Capital Three million five hundred thousand (3,500,000) Saudi Riyals.
Number of shares and nominal
value per share Three thousand five hundred (3,500) shares at a value of one thousand (1,000) Saudi Riyals per share.
Ownership Percentage 100%
Management Mazen Mohammed Nasser Al-Asmari
Commercial Registration
Certificate No. 1010630677
CR Date of issuance 10/07/1441H (corresponding to 05/03/2020G) CR Expiry Date 10/07/1446H (corresponding to 10/01/2025G) Source: The Company
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Table No. ( Tihama Education Company
Company Name Tihama Education Company
Address King Fahd Road - Riyadh
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Retail sale of stationery, newspapers and magazines (libraries).
Company’s Capital Two hundred thousand (200,000) Saudi Riyals.
Number of shares and nominal
value per share Two thousand five hundred (2,000) shares at a value of one hundred thousand (100) Saudi Riyals per share.
Ownership Percentage 100%
Management Mazen Mohammed Nasser Al-Asmari
Commercial Registration
Certificate No. 1010556302
CR Date of issuance 29/06/1438H (corresponding to 26/02/2017G) CR Expiry Date 29/06/1447H (corresponding to 20/12/2025G) Source: The Company
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Table No. ( Integrated Production for Audio -Visual Media Production Company
Company Name Integrated Production for Audio -Visual Media Production Company
Address Riyadh -Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Movies, video and television program production activities, motion picture production, including traditional animation, television commercials production.
Company’s Capital Ten thousand (10,000) Saudi Riyals.
Number of shares and nominal
value per share One hundred (100) shares at a value of one hundred (100) Saudi Riyals per share.
Ownership Percentage 70%
Management
- Abdulaziz Najeeb Al-Suwailem - Sari Ibrahim Abdulkarim Al-Mayouf - Salman Mohammed Nasser Al-Asmari Commercial Registration
Certificate No. 1010560718
CR Date of issuance 15/06/1440H (corresponding to 20/02/2019G) CR Expiry Date 15/05/1445H (corresponding to 28/12/2024G) Source: The Company
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Table No. ( Tihama Holding for Commercial Investment Company
Company Name Tihama Holding for Commercial Investment Company
Address Riyadh -Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Participation in the establishment of companies with a percentage that enables it to control those companies.
Company’s Capital Five hundred thousand (500,000) Saudi Riyals Number of shares and nominal
value per share Five hundred (500) shares at a value of one thousand (1,000) Saudi Riyals per share.
Ownership Percentage 100%
Management Mazen Mohammed Nasser Al-Asmari
Commercial Registration
Certificate No. 1010179387
CR Date of issuance 25/05/1423H (corresponding to 04/08/2002G) CR Expiry Date 24/05/1445H (corresponding to 07/12/2023G) Source: The Company
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Table No. ( Esidama International Real Estate Company
Company Name Esidama International Real Estate Company*
Address Jeddah-Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Managing and leasing owned or leased real estate (residential or non-residential), and practicing real estate management activities for a commission.
Company’s Capital Five hundred thousand (500,000) Saudi Riyals
Ownership Percentage 100%
Number of shares and nominal
value per share Fifty thousand (50,000) shares at a value of ten (10) Saudi Riyals per share.
Management
- Sari Ibrahim Abdulkarim Al-Mayouf - Reda Mohammed Ibrahim Al-Haider - Khaled Fahd Abdullah Al-Abdul-Jabbar - Ibrahim Mohammed Ibrahim Al-Shabib - Abdulkarim Ibrahim Mohammed Al-Mayouf Commercial Registration
Certificate No. 4030206803
CR Date of issuance 05/01/1432H (corresponding to 11/12/2010G) CR Expiry Date 05/02/1444 AH (corresponding to 01/09/2022 AD) Source: The Company
* Work is underway to update the Articles of Association and then renew the commercial register
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Table No. ( Tihama International Advertising Company
Company Name Tihama International Advertising Company*
Address Riyadh -Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Online wholesale, installation and assembly of neon signs, market research and opinion polls, organization and management of exhibitions and conferences, operation of exhibition and conference centers and facilities.
Company’s Capital Five hundred thousand (500,000) Saudi Riyals
Ownership Percentage 100%
Number of shares and nominal
value per share Fifty thousand (50,000) shares at a value of ten (10) Saudi Riyals per share.
Management
- Sari Ibrahim Abdulkarim Al-Mayouf - Reda Mohammed Ibrahim Al-Haider - Khaled Fahd Abdullah Al-Abdul-Jabbar - Ibrahim Mohammed Ibrahim Al-Shabib - Abdulkarim Ibrahim Mohammed Al-Mayouf Commercial Registration
Certificate No. 1010305626
CR Date of issuance 22/04/1432H (corresponding to 27/03/2011G) CR Expiry Date 22/04/1444 AH (corresponding to 16/11/2022G) Source: The Company
* Work is underway to update the Articles of Association and then renew the commercial register
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Table No. ( Rapid Advertising Company.
Company Name Rapid Advertising Company
Address Riyadh -Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Advertising institutions and agencies.
Company’s Capital Twenty-five thousand (25,000) Saudi Riyals.
Ownership Percentage 100%
Number of shares and nominal
value per share Five hundred (25) shares at a value of one thousand (1,000) Saudi Riyals per share.
Management Mazen Mohammed Nasser Al-Asmari
Commercial Registration
Certificate No. 1010475663
CR Date of issuance 27/02/1440H (corresponding to 05/11/2018G) CR Expiry Date 27/02/1445H (corresponding to 12/09/2023G) Source: The Company
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Table No. ( Aventus Global Trading Company
Company Name Aventus Global Trading Company
Address United Arab Emirates
Legal Entity Single-Member LLC
Activity (according to Commercial
Register) General trade, consumer goods store, consumer goods complex, grocery, book trade, food and beverage trade, greeting and invitation card trade.
Company’s Capital Six hundred thousand UAE dirhams.
Number of shares and nominal
value per share Six hundred (600) shares at a value of one thousand (1,000) UAE dirhams per share.
Ownership Percentage 100%
Management Mazen Mohammed Nasser Al-Asmari
Commercial Registration
Certificate No. 652228
CR Date of issuance 02/05/1432H (corresponding to 06/04/2011G) CR Expiry Date 05/09/1444H (corresponding to 05/04/2023G) Source: The Company
* On May 9, 2022, an agreement was signed between Aventus Global Trading Company (100% owned subsidiary) operating in the United Arab Emirates and NextByte Trading Company to sell a group of assets and transfer liabilities related to the business operations of Aventus Global Trading Company.
The value of the transaction is 3.7 million UAE dirhams, of which 0.7 million dirhams will be used to pay part of Aventus’
liabilities in accordance with the agreement concluded with the buyer. In addition, Aventus’ stock will be sold to NextByte at cost as on the date of completion of the transaction.
The transaction represents the transfer of assets and liabilities related to the business operations of Aventus Global Trading, which operates in the retail sector in the United Arab Emirates and operates branches in Dubai, Abu Dhabi and Sharjah for the sale of books, stationery, magazines, newspapers, entertainment products, confectionery and accessories. The transfer to the buyer will include the transfer of the franchise agreement to use the trademark, in addition to the assets and liabilities under the deal, all the assets of the company’s commercial activity on the date of the deal’s implementation, including property and equipment of branches, projects under implementation, inventory and automated systems, and all obligations will be transferred. The future lease contracts of the branches from the date of completion of the deal and the dues of the contractors of the projects under implementation related to the branches, and the dues of all the company’s employees will be transferred.
The carrying amount of the transferred assets and liabilities depends on the actual date that the transfer of each asset or liability was carried out.
On October 4, 2022G, Aventus Global Trading Company obtained the necessary approvals from stakeholders and relevant bodies to complete the process of transferring franchise rights and lease contracts. Accordingly, the process of transferring the assets and liabilities related to the commercial operations of Aventus Global Trading Company and the procedures for selling the Company’s stock to the buyer (Next Byte Trading Company) were completed.
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Table No. ( Nassaj AlKhayal for Audio-visual Media Production Company
Company Name Nassaj AlKhayal for Audio-visual Media Production Company *
Address Riyadh -Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Providing marketing services on behalf of others Company’s Capital One hundred thousand Saudi Riyals
Number of shares and nominal
value per share One hundred (100) shares at a value of one (1.00) Saudi Riyals per share.
Ownership Percentage 50%
Management Abdulkarim Ibrahim Mohammed Al-Mayouf
Reda Mohammed Ibrahim Al-Haider Commercial Registration
Certificate No. 1010597777
CR Date of issuance 07/02/1441H (corresponding to 07/10/2019G) CR Expiry Date 07/02/1444H (corresponding to 03/09/2022G) Source: The Company
* Work is underway to update the Articles of Association and then renew the commercial register
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Table No. ( Tihama New Media Company
Company Name Tihama New Media Company*
Address Riyadh -Saudi Arabia
Legal Entity A Saudi limited liability Company Activity (according to Commercial
Register) Commercial certification and undertaking, marketing on behalf of others, wholesale and retail of gifts and luxuries, e-marketing, market research and opinion polls.
Company’s Capital One hundred thousand Saudi Riyals Number of shares and nominal
value per share One hundred (100) shares at a value of one thousand (1000) Saudi Riyals per share.
Ownership Percentage 100%
Management Abdulkarim Ibrahim Mohammed Al-Mayouf
Commercial Registration
Certificate No. 1010893591
CR Date of issuance 25/11/1438H (corresponding to 18/08/2017G) CR Expiry Date 25/11/1443 H (corresponding to 06/25/2022G) Source: The Company
* Work is underway to update the Articles of Association and then renew the commercial register
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Table No. ( International Advertising Services Limited (Intermarkets)*
Company Name Tihama New Media Company*
Address Jeddah-Saudi Arabia
Legal Entity A Saudi mixed limited liability Company Activity (according to Commercial
Register) Implementation of advertising services in accordance with Industry Resolution No. 169 of 14/05/1440 and the Ministry of Information license No. 184/m
Company’s Capital One hundred thousand Saudi Riyals Number of shares and nominal
value per share One hundred (100) shares at a value of one thousand (1000) Saudi Riyals per share.
Ownership Percentage 51%
Management
Fahad Mohammed Ahmed Bakhaider Muhammed Saeed Abdullah Tayeb Irvin Ladellas Grovich
Khalil Malik Bitar Commercial Registration
Certificate No. 4030037855
CR Date of issuance 29/02/1401H (corresponding to 05/01/1981G) CR Expiry Date 30/05/1423H (corresponding to 09/08/2002G) Source: The Company
* The record has not been renewed, as the Company has been suspended for more than 10 years, and is now under the liquidation procedure and a liquidator has been appointed.
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Table No. ( Companies under investment by the Company.
Company Name Capital
(SAR) Place of Establishment
The main place of operations
Activities Ownership Percentage Country City
United Advertising Company Limited* 500,000 KSA KSA Riyadh Advertising 50%
United Journalists Company ** 2,143 UK Middle East Cairo Publication &
Distribution 50%
Saudi for Selling Advertising Materials 1,000,000 KSA KSA Jeddah Advertising 42.5%
Tihama Global Dubai**** 51,000 UAE UAE Dubai Advertising &
Marketing 40%
Gulf Systems Development Company ***** 500,000 KSA KSA Riyadh Financial Solutions
Technology 30%
Renewable Technology Company ***** 500,000 KSA KSA Riyadh Financial Solutions
Technology 30%
Qutrob Production Company****** 10,000 KSA KSA Riyadh Production 35%
National Unified Distribution Company ******* 12,000,000 KSA KSA Riyadh Distribution 8.3%
Fogo Company ******** 3,075,000 USA USA Delaware Advertising 4.0%
J. Walter Thompson MENA Company ********* 3,750,000 Bahrain MENA Manama Advertising and
Public Relations 30%
Source: The Company
* On June 30, 2021G, the company signed an agreement with WBP Group to establish a new company in the Kingdom of Saudi Arabia under the name ICG Saudi Arabia, provided that WBP would own 70% of the new holding company, while Tihama’s share would be 30%. During the year ending March 31, 2022, the period for completing the transfer of legal ownership and all other required regulatory approvals has been extended to be before December 31, 2022 instead of December 31, 2021 as per the original agreement. Subsequently, the structure of the agreement was modified so that the United Advertising Company becomes the new holding company, whereby WPP Group will transfer some of its owned companies to the United Advertising Company and Tihama will waive 20% of its ownership in the United Advertising Company to the WPP Group to become Tihama’s ownership in United Advertising Company after the completion of all relevant official procedures 30%. It should be noted that the period for completing the transfer of legal ownership and all other required regulatory approvals has been extended to be before June 30, 2023 instead of December 31, 2022, according to the appendix to the agreement. Any financial impact arising from the transaction based on the assets and liabilities on that date will be recorded upon completion, and any potential impact cannot be estimated reliably at this time.
The Partner Agreement between Tihama and WPP includes an unconditional and irrevocable option for WBP to require Tihama to transfer all of its shares (the “Purchase Option”) at any time after the fifth year of completing the legal title transfer and satisfying all other regulatory approvals to purchase all its shares (the “Put Option”) at any time after the fifth year after the completion of the legal title transfer and all other regulatory approvals have been met, the call option or the put option may be exercised at any time between January 1 and March 31 in any year after the fifth year after the legal title transfer has been completed and fulfill all other regulatory approvals. (“Option Execution Period”). Provided that WBB or Tihama (as the case may be) give written notice to the other party within the option window (“Exercise Notice”), the call option may be exercised only if the put option has not been used and vice versa. Once notice of exercise has been given, which may not be rescinded without the written consent of the receiving party, the consideration payable to Tihama for all of its shares in the Company for the exercise of either option (the “Option Execution Value”) shall be calculated as follows:
(a) in case of a call option, at the discretion of the Tihama, either at the sales revenue multiple or the average earnings multiple (based on audited annual accounts), chosen at the discretion of the Tihama. (b) in the case of the put option, at the average multiple Earnings based on audited annual accounts.
** The United Journalists Company is currently suspended, the company’s investment in the United Journalists Company Limited has been recorded as on March 31, 2022G, nil, and March 31, 2021G, nil, as the accumulated losses of this associate exceeded its capital and the company does not intend to provide financial support to it in excess of its share In its capital, being a limited liability company, and accordingly, the company’s share of the change in the net assets of the associate was not recorded for the two years ending on March 31, 2022 and 2021, and the last financial statements obtained by the company were on December 31, 2009.
*** The partners in the Saudi Company for the Sale of Advertising Materials Limited decided during the year ending on March 31, 2012 to start liquidating it due to its incurring operational losses for successive years and its inability to continue its activities. The legal procedures for this decision are still being completed as on March 31, 2022, The Company’s share in the net equity of the partners in this associate company as of March 31, 2022G was nil and on March 31, 2021G was nil.
**** During the year ending on March 31, 2022, the company filed a compensation claim against the company’s former director and partner in the associate company in the United Arab Emirates, and a final judgment was issued in favor of the company by the Dubai Courts of Appeal after the appeal was rejected. The former director of the company submitted a request to set aside the judgment, which was rejected by the Dubai Court of Cassation, and accordingly, the ruling became final and enforceable in favor of the Company .
***** The company’s investment in J Walter Thompson MENA was recorded based on the accounts prepared by the management of the associate company, as the financial statements of that group as of December 31, 2021G are still under review. On June 30, 2021, the company signed an agreement with WPP to merge J. Walter Thomson Middle East and North Africa (an associate company of Tihama) with Wonderman Middle East and North Africa to establish Wonderman Thomson Middle East and North Africa (a holding group in the Kingdom of Bahrain). The agreement includes the merger of J. Walter Thompson (“GWT”) Middle East and North Africa and Wonderman Middle East and North Africa, to be consolidated into Wonderman Thompson Middle East and North Africa. Tihama will own 25% of Wonderman Thomson MENA after the completion of the stake transfer and all related formal procdures.
Tihama’s share resulting from Wunderman Thompson MENA’s business will be recorded as an associate company in the financial statements. Any financial impact resulting from the transaction will be recorded upon completion, based on the assets and liabilities at that date. No potential impact can be estimated reliably at present. During the financial year ending on March 31, 2022G, the period for completing the transfer of legal ownership and all other required regulatory approvals was extended to be before June 30, 2022G instead of December 31, 2021G, according to the original agreement. It should be noted that the period for completing the transfer of legal ownership and all other required regulatory approvals has been extended to be before February 28, 2023G.******The investments in these two associate companies include the company’s investment share in them, as they have not practiced any activities since their establishment and that no financial information was available regarding the Renewable Technology Company until the date of preparing these consolidated financial statements and based on the study of the decline that was conducted, The company recorded a loss of 100% on these investments during the financial year ended March 31, 2017G.
*******Qutrob for Media Production Company is a company owned by the subsidiary company; Integrated Production for Audio -Visual Media Production Company, which owns 50%
of the company’s capital.
******** The company’s share in the National Unified Distribution Company (a Saudi limited liability company) is through a subsidiary (Tihama Distribution Company)
********* The company’s share in the capital of Fogo, one of the emerging companies in the United States of America, through a subsidiary company (Tihama New Media Company, which was acquired during the fiscal year ending on March 31, 2021G).