It is our opinion that the accompanying consolidated financial statements in all material respects give a true and fair view of the group's financial position as of 31 December 2022 and its consolidated financial results and its consolidated cash flows for the financial year ended in accordance with International Financial Reporting Standards (IFRS) adopted in the Kingdom of Saudi Arabia and other standards and statements issued by the Saudi Organization for Chartered and Professional Accountants (SOCPA). Evaluation of car sales information and data used for residual value estimation. The consolidated financial statements as of and for the years ended 31 December 2021 and 31 December 2020 (from which the statement of financial position as at 1 January 2021 is derived), excluding the adjustments described in note 39 to the consolidated financial statements, the statements were audited by another auditor, who expressed for an unchanged conclusion on these consolidated financials.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements.
LEGAL STATUS AND NATURE OF OPERATIONS
LEGAL STATUS AND NATURE OF OPERATIONS (continued) 1 Interest in subsidiaries (continued)
Interest in equity accounted investees
LEGAL STATUS AND NATURE OF OPERATIONS (continued) 3 Branches
LEGAL STATUS AND NATURE OF OPERATIONS (continued) 3 Branches (continued)
STANDARDS, INTERPRETATIONS AND AMENDMENTS TO EXISTING STANDARDS 3.1 New standards, interpretations and amendments effective in the current year.
STANDARDS, INTERPRETATIONS AND AMENDMENTS TO EXISTING STANDARDS 1 New standards, interpretations and amendments effective in current year
New standards, interpretations and amendments not yet effective
BASIS OF PREPARATION 1 Overall considerations
Basis of consolidation
BASIS OF PREPARATION (continued) 2 Basis of consolidation (continued)
Financial year end
Functional and presentation currency
USE OF JUDGEMENT AND ESTIMATES
USE OF JUDGEMENT AND ESTIMATES (continued) Impairment of non-financial assets
Measurement of fair values
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Change in significant accounting policy
Foreign currency translation
Property and equipment Recognition and measurement
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3 Property and equipment (continued)
Assets under construction and development
Intangible assets and goodwill
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 5 Intangible assets and goodwill (continued)
Business combinations
Investment in subsidiaries
Investment properties
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 8 Investment properties (continued)
Impairment testing of non-financial assets
Financial Instruments i Financial assets
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 10 Financial Instruments (continued)
Investment in equity-accounted investees
If the Group has the power to participate (but not control) the decision on the financial and business policy of another entity, it is classified as an associated company. Subsequently, associated companies are accounted for using the equity method, where the Group's share of post-acquisition profits and losses and other comprehensive income is recognized in the consolidated statement of profit and loss and other comprehensive income (except for losses that exceed the Group's investment in the associated company, unless there is an obligation to settle these losses).
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 11 Investment in equity-accounted investees (continued)
Non-current assets held for sale
Cash and cash equivalents
Equity, reserves, dividends and treasury shares
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 14 Equity, reserves, dividends and treasury shares (continued)
Leases
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 15 Leases (continued)
Employees’ end of service benefits Short-term employee benefits
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 17 Zakat and income tax
Provisions
Borrowing costs
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 20 Share-based payments
Revenue
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 21 Revenue (continued)
- Payables and accruals
- Finance income and finance costs
- Operating expenses
- Selling, administrative and other expenses
The hotel applies the revenue recognition criteria set forth below for each separately identifiable component of a sales transaction to reflect the substance of the transaction. Revenue is recognized when the amount of revenue can be reliably measured, when recovery is probable, the costs that have been or will be incurred can be reliably measured, and when the criteria for each of the hotel's various activities are met. Services Nature, timing of obligations and significant payment terms Rooms The Group recognizes revenue from the provision of rooms when the rooms are occupied and otherwise.
The Group recognizes revenue from the provision of food and beverages in the hotel restaurant when food and beverages are sold. The customer typically pays the full amount at check-out, in the case of a hotel guest, and before leaving the restaurant, in the case of a walk-in customer. The Group recognizes the income from the provision of contracted rooms in equal installments in the profit and loss account over the period to which the term relates.
A contract liability is recognized when payment is received or payment is due (whichever occurs first) from a customer before the Group transfers the related services. Contract obligations are recognized as revenue when the Group performs under the contract (i.e. transfers control of the related services to the customer). Liabilities are recognized for amounts to be paid in the future for goods or services received, whether or not invoiced by the supplier.
Operating expenses are recognized in profit or loss when the service is used or on the date of their origin. Selling, administrative and other expenses include direct and indirect costs that are not specifically part of the cost of revenue.
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT (continued)
During the year, the management performed a review of the residual value of revenue vehicles, which resulted in a change in the residual value of some revenue vehicles. The effect of these changes on actual and expected depreciation expense included in cost of sales was as follows.
ASSETS UNDER CONSTRUCTION AND DEVELOPMENT
CAPITAL WORK IN PROGRESS – RECOVERABLE ON DISPOSAL
INTANGIBLE ASSETS AND GOODWILL
Impairment test
INTANGIBLE ASSETS AND GOODWILL (continued) Impairment testing for CGUs containing goodwill
INVESTMENT PROPERTIES (continued)
INVESTMENTS IN EQUITY-ACCOUNTED INVESTEES
INVESTMENTS IN EQUITY-ACCOUNTED INVESTEES (continued) Movement of equity accounted investees - Unquoted (continued)
This represents the Group's investment in public funds, equity shares of listed companies, private funds and investment in government sukuks. During the year, the Group recorded a dividend income of SR 12.3 million from its investments in equity shares and private funds (31 December 2021: dividend income SR 6.5 million). Information on the Group's exposure to credit and market risks, and fair value measurement, is included in note 37.
TRADE AND OTHER RECEIVABLES
CASH AND CASH EQUIVALENTS
CAPITAL AND RESERVES (continued) Share premium, statutory reserves and other reserves
The fair value per option is estimated at the grant date based on the Black Scholes Merton pricing model, taking into account the conditions under which the stock options were granted.
NON-CONTROLLING INTERESTS (NCI)
LOANS AND BORROWINGS
In the Kingdom of Saudi Arabia, the plan entitles an employee who has completed more than two but less than five years of service to receive a payment equal to one-third of their final salary for each year of service completed. Similarly, an employee who has completed more than five but less than ten years of service shall receive a payment equal to two-thirds of his final salary for each year of service completed. Further, an employee who has completed more than ten years of service, to benefit from a payment equal to the final salary for each year of service completed.
In Egypt, the plan entitles an employee (management and technicians) who has completed more than five but less than ten years of service to a payment equal to half of his final salary for each completed year of service. Likewise, an employee who has completed more than ten years of service will receive a payment equal to his final salary for each completed year of service. In addition, the plan entitles an employee (drivers) who has completed more than five but less than seven years of service to a payment equal to ten days of their final salary for each completed year of service.
Similarly, an employee who has completed seven years but less than twelve years of service shall receive a payment equal to half of his final salary for each year of service completed. Further, an employee who has completed more than twelve years of service shall receive a payment equal to two months of his final salary for each year of service completed. In the United Arab Emirates, the plan entitles an employee who has completed more than one year but less than three years of service to receive a payment equal to one-third of their final salary for each year of service completed.
Similarly, an employee who has completed more than three years, but less than five years of service, receives payment in the amount of two thirds of his last salary for each completed year of service. In addition, an employee who has completed more than five years of service receives payment in the amount of the final salary for each completed year of service.
EMPLOYEES’ END OF SERVICE BENEFITS (continued) Movement in net defined benefit liability
EMPLOYEES’ END OF SERVICE BENEFITS (continued)
ZAKAT AND INCOME TAXES Movement in provision
Zakat declarations for the company have been submitted with ZATCA up to 2021 and the zakat certificate for the company has been updated. ZATCA regularly assesses the company from a zakat perspective and approved the zakat declarations until 2015. For FY, the company objected to the assessment issued by ZATCA and as a result, ZATCA issued a partial acceptance of the said appeal.
Registration of new case by company or reopening of previous case with TVDRC (based on TVDAC decision) is in process and will be completed soon. For FY 2018, the company filed an objection to the valuation issued by ZATCA, as a result, ZATCA partially granted the said appeal. The group filed an appeal with the First Appellate Board (“TVDRC”) through the GSTC regarding the remaining outstanding disputes, which issued a partial acceptance of the case.
The appeal (on matters decided against the company) was escalated to TVDAC (GSTC-II). Further, ZATCA escalated the case to TVDAC (for the points that were decided in favor of the company by TVDRC) and the company responded to ZATCA's complaint. The company submitted an objection to the assessments issued by ZATCA for FY 2019 and 2021 to the ZATCA Review Committee, which issued a partial acceptance of the said appeal.
The Group appealed to the First Appellate Committee (“TVDRC”) through the GSTC for the outstanding disputes and a hearing was held with the TVDRC and the committee issued the decision which is yet to be taken by the Company. The management received a favorable result from the second appeal commission, after the end of the year, the Company has received a part of the payment from the above receivable balance.
TRADE AND OTHER PAYABLES
All subsidiaries file regular zakat and/or income tax returns in accordance with the regulations of their country of incorporation and there is no dispute requiring additional provisions. The Group filed appeals with the First Appellate Board (“TVDRC”) through the GSTC regarding the remaining outstanding disputes, which were dismissed on formal grounds; therefore, the appeal was referred to another appeals committee ("TVDAC"). TVDAC issued a decision in favor of Seera on the formal aspect and remanded the matter to TVDRC (GSTC-I) for reconsideration.
The Group and its zakat and tax adviser believe that the decisions will benefit the Group. The Group has recorded an additional provision of SR 35 million in 2021 based on its initial assessment in these consolidated financial statements for such ongoing assessments. The total amount of the dispute with ZATCA as of 31 December 2022 is SR 22.3 million, which has been paid to ZATCA and is classified under business and other receivables.
CONTRACT LIABILITIES
PROVISIONS
COMMITMENTS AND CONTINGENCIES Capital commitments
RELATED PARTIES TRANSACTIONS AND BALANCES
Related parties’ transactions Key management remuneration
RELATED PARTIES TRANSACTIONS AND BALANCES (continued) 1 Related parties’ transactions (continued)
Related party balances
REVENUE
Contractual obligations refer mainly to gross reservations, which are advance payments received from contracts with government and legal clients, for which a commission will be recognized when the service is provided in the future.
REVENUE (continued)
COST OF REVENUE
FINANCE INCOME AND COST
EARNINGS PER SHARE (EPS) Basic and diluted EPS
FINANCIAL INSTRUMENTS - RISK MANAGEMENT
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Fair value and fair value hierarchy
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Financial instruments by category
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Financial instruments by category (continued)
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Financial instruments not measured at fair value
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Credit risk (continued)
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Market risk (continued)
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Liquidity risk (continued)
FINANCIAL INSTRUMENTS - RISK MANAGEMENT (continued) Capital management
OPERATING SEGMENTS Basis for segmentation
OPERATING SEGMENTS (continued)
OPERATING SEGMENTS (continued) Other material items
RESTATEMENT OF PRIOR PERIOD ERRORS
RESTATEMENT OF PRIOR PERIOD ERRORS (continued) Group reconciliation of equity as at 1 January 2021
RESTATEMENT OF PRIOR PERIOD ERRORS (continued) Group reconciliation of equity as at 31 December 2021
RESTATEMENT OF PRIOR PERIOD ERRORS (continued)
The net book value of disposed vehicles and additions to vehicles has been reclassified to cash flow from operating activities which were previously reported as additions to property and equipment and proceeds from the sale of property and equipment under cash flow from investing activities. Impact of the above adjustments on basic and diluted loss per share for the year ended December 31, 2021 December 31.
SIGNIFICANT EVENT DURING THE PERIOD
RECLASSIFICATION
SUBSEQUENT EVENTS
APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
