Agreed-Upon Procedures Report on the Decrease in Share Capital of Raydan Food Company
To the shareholders of Raydan Food Company Jeddah, Kingdom of Saudi Arabia
Purpose of this Agreed-Upon Procedures Report and Restriction on Use and Distribution
Our report is solely for the purpose of assisting Raydan Food Company (A Saudi Joint Stock Company) (the “Company”) and its subsidiary (They are collectively referred to as the group) to submit the result of our findings to the Capital Market Authority (“CMA”) regarding issuance of Agreed-Upon Procedures Report on the Decrease in Share Capital of the Company from SAR 337,500,000 to SAR 158,084,670 through the cancellation of 17,941,533 shares of SAR 10 each, by transferring from share capital to carry forward losses by SAR 179,415,330.
We have conducted our engagement in accordance with the International Standard on Related Services (ISRS) 4400 (Revised) “Agreed-Upon Procedures Engagements” approved in the Kingdom of Saudi Arabia applicable to Agreed-Upon Procedures engagements. These procedures were implemented only to assist the Company in reducing the Company's capital.
Accordingly, our report may not be suitable for any other purpose. This report is provided only to the management of the Company and submitted to the Capital Market Authority and should not be used by, or distributed to, any other parties.
Responsibility of the Commissioning Party
The Company has acknowledged that the agreed-upon procedures are appropriate for the purpose of the engagement. The Company is responsible for the subject matters on which the agreed-upon procedures are performed.
Practitioner’s Responsibilities
We have conducted the agreed-upon procedures engagement in accordance with the International Standard on Related Services (ISRS) 4400 (Revised), Agreed-Upon Procedures Engagement, which is endorsed in the Kingdom of Saudi Arabia. An agreed-upon procedures engagement involves our performing the procedures that have been agreed with Raydan Food Company, and reporting the findings, which are the factual results of the agreed-upon procedures performed. We make no representation regarding the appropriateness of the agreed-upon procedures.
This agreed-upon procedures engagement is not an assurance engagement. Accordingly, we do not express an opinion or an assurance conclusion.
Had we performed additional procedures, other matters might have come to our attention that would have been reported.
Agreed-Upon Procedures Report on the Decrease in Share Capital of Raydan Food Company (continued)
To the shareholders of Raydan Food Company Jeddah, Kingdom of Saudi Arabia
Professional Ethics and Quality Control
We have complied with the International Code of Ethics for Professional Accountants, issued by the International Ethics Standard Board for Accountants, which is endorsed in the Kingdom of Saudi Arabia by the Saudi Organization for Chartered and Professional Accountants (“SOCPA”), “referred to as IESBA Code” and the independence requirements in Part 4A of IESBA Code.
Our firm applies International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, which is endorsed in the Kingdom of Saudi Arabia and accordingly, maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements.
Procedures and Findings
We have performed the procedures described below, which were agreed upon with Raydan Food Company in the terms of engagement, in determining the Decrease in Share Capital.
# Procedures Findings
a- Obtaining the minutes of the meeting of the minutes of the Extraordinary General Assembly meeting held on 9 Rabi’ al-Awwal 1444H, corresponding to 5 October 2022, in which the shareholders decided to reduce the Company’s capital by 53.16% from SAR 337,500,000 to SAR 158,084,670 by canceling 17,941,533 shares (“1.06 shares will be reduced for each 2 shares held”) at a nominal value of SAR 10 per share, reducing the accumulated losses by SAR 179,415,330.
Minutes of the meeting were obtained from the Extraordinary General Assembly meeting held on 9 Rabi’ al-Awwal 1444H, corresponding to 5 October 2022, in which the shareholders decided to reduce the Company’s capital by 53.16% from SAR 337,500,000 to SAR 158,084,670 by canceling 17,941,533 shares (“1.06 shares will be reduced). per 2 shares”) with a nominal value of SAR 10 per share, and a reduction in accumulated losses by SAR 179,415,330. No exceptions noted.
b- Obtaining the consolidated financial position of the Company showing the capital as on 30 September 2022, as well as the accumulated losses on that date.
The consolidated financial position of the Company was obtained showing the capital as on 30 September 2022, as well as the accumulated losses on that date. No exceptions noted.
Agreed-Upon Procedures Report on the Decrease in Share Capital of Raydan Food Company (continued)
To the shareholders of Raydan Food Company Jeddah, Kingdom of Saudi Arabia
Procedures and Findings (continued)
# Procedures Findings
c- Verify that the movement was recorded on 6 October 2022, in the Company’s accounting records by writing off the share capital of SAR 179,415,330 against the accumulated losses in accordance with the shareholders’ decision mentioned in the above item.
Verify that the movement was recorded on 6 October 2022, in the Company’s accounting records by writing off the share capital of SAR 179,415,330 against the accumulated losses in accordance with the shareholders’ decision. It was found that the recorded movement is consistent with the shareholders' decision mentioned in Procedure no. (a).
d- Checking the arithmetic accuracy in Appendix
1. The arithmetic accuracy of Appendix 1 was
checked and no exceptions were noted.
e- Verify the calculation of accumulated losses as a
percentage of the capital. The accumulated losses were reduced after reducing the capital and turned into retained earnings by an amount of SAR 912,017 so that the percentage of accumulated losses as a percentage of the capital after the reduction was zero% of the capital.
For Al-Bassam & Co.
Ahmed A. Mohandis Certified Public Accountant License No. 477
Jeddah: 14 Rabi-Al -Thani 1444H Corresponding to: 10 November 2022
Appendix (1)
