- 1 -
AGREED-UPON PROCEDURES REPORT RELATED TO STATEMENT OF SOLVENCY (THE
“STATEMENT”) TO BE SUBMITTED TO THE CAPITAL MARKET AUTHORITY, KINGDOM OF SAUDI ARABIA (“CMA”)
To the Shareholders
Saudi Paper Manufacturing Company (A Saudi Joint Stock Company)
Dammam, Kingdom of Saudi Arabia
Purpose of this Agreed-Upon Procedures Report
Our report is solely for the purpose of assisting Saudi Paper Manufacturing Company (“the Company”) in fulfilling its obligation to submit the Statement to the CMA and may not be suitable for another purpose. This report is intended solely for the management of the Company, and should not be used by, or distributed to, any other parties.
Responsibilities of the Engaging Party and the Responsible Party
The management of the Company has acknowledged that the agreed-upon procedures are appropriate for the purpose of the engagement.
The management of the Company is responsible for the subject matter on which the agreed-upon procedures are performed. The management of the Company has prepared the Statement, enclosed as Annexure A, and remains solely responsible for it and for the creation and maintenance of all accounting and other records supporting its contents. The Company’s management is also responsible for identifying and ensuring that the Company complies with the terms of the CMA regulations (Article 12, Section 3), in relation to the proposed buy-back of ordinary shares of the Company.
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, that is endorsed in the Kingdom of Saudi Arabia. An agreed-upon procedures engagement involves our performing the procedures that have been agreed with the management of the 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.
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, that is endorsed in the Kingdom of Saudi Arabia by the Saudi Organization for Chartered and Professional Accountants (“SOCPA”), “referred 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, that 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.
- 2 -
AGREED-UPON PROCEDURES REPORT RELATED TO STATEMENT OF SOLVENCY (THE
“STATEMENT”) TO BE SUBMITTED TO THE CAPITAL MARKET AUTHORITY, KINGDOM OF SAUDI ARABIA (“CMA”) (continued)
Procedures and Findings
We have performed the procedures described below, which were agreed upon with the management of the Company in the terms of engagement dated November 30, 2022, related to the Statement to be submitted to the CMA.
S.no Procedures Findings
1
Obtained the Statement of Solvency prepared by management providing financial information;
- As of December 31, 2021 based on the audited consolidated financial statements of the Company for the year then ended;
- As of December 31, 2022 and December 31, 2023 based on consolidated financial forecasts prepared by the management; And - As of as of September 30, 2022 based on
reviewed condensed consolidated interim financial statements for the period ended September 30, 2022.
Based on the procedure performed, we did not find any exception.
2
Agreed the financial information related to the current liabilities, contingent liabilities, total liabilities, current assets and total assets in the Statement of Solvency with the condensed consolidated interim financial statements of the Company for the nine-months period ended September 30, 2022, the audited consolidated financial statements for the year ended December 31, 2021 and with the consolidated financial forecasts prepared by the management.
Based on the procedure performed, we did not find any exception.
3
Recalculated the amount in statement of solvency to check;
- Sufficiency of working capital for the twelve months following the date of completion of shares buy-back transaction.
- The value of Company’s assets were not less than the value of its liabilities (including contingent liabilities), prior to and immediately upon payment of purchase price, according to latest reviewed financial statements i.e. as of September 30, 2022.
- The amount of treasury shares were not more than retained profits of the Company.
Based on the procedure performed, we did not find any exception.
For Al Bassam & Co.
___________
Ibrahim Ahmed Al Bassam Certified Public Accountant
License No. 337
Al Khobar, Kingdom of Saudi Arabia December 13, 2022
19 Jumada I, 1444H