1 09 August 2023
22 Muharram 1445H
Takween Industries Company Saudi joint stock company
Khobar - Kingdom of Saudi Arabia
Dear Sirs,
Agreed-upon procedures report of factual findings in connection with the shareholders’ resolution and journal entry as prepared by the directors of Takween Industries Company (the “Company”) for absorb in accumulated losses of the company through capital reduction.
THE PURPOSE OF AGREED UPON PROCEDURES REPORT
This report is produced in accordance with the terms of our agreement dated 14 May 2023. The procedures were performed solely to assist the Board of Directors of the Company (the “BOD”) in fulfilling its obligation under the Regulations for Companies of the Kingdom of Saudi Arabia and may not be suitable for another purpose.
BOARD OF DIRECTORS’ RESPONSIBILITIES
The BOD of the Company has prepared the Supporting Information for absorb Accumulated losses and remain solely responsible for it and for the creation and maintenance of all accounting and other records supporting its contents. The BOD is also responsible for identifying and ensuring that the Company complies with the terms of the Regulations for Commerce of the Kingdom of Saudi Arabia.
You are responsible for determining that the scope of the services is sufficient for your purposes and for which of the services were engaged.
AUDITOR’S RESPONSIBILITIES
We have performed the procedures agreed upon with you and listed below in the Supporting Information for decrease in Accumulated Losses. Our work was performed in accordance with the International Standards on Related Services (ISRS) 4400 (Revised) “Agreed-Upon procedures Engagements”.
We have complied with the Code of Professional Conduct and Ethics as endorsed in the Kingdom of Saudi Arabia.
An Agreed-upon procedures engagement involves performing the procedures that have been agreed upon with you and reporting the findings, which are the factual results of the Agreed-upon procedures.
We have applied international standards on Quality Controls (ISQC) 1 “Quality Control for Firms that Performed Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements”, as endorsed in the Kingdom of Saudi Arabia. Accordingly, we maintain 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 THE PROCEDURES AND FINDINGS
We have performed the procedures set out below, which were agreed upon procedures with the shareholders of Takween Advanced Industries Company, to the company's capital reduction by amounting to SR 485,353,940 by absorb the accumulated losses according to the resolution of the Company’s extra ordinary general assembly’s meetings for the Capital Reduction dated 26 July 2023 (corresponding to Muharram 08,1445H).
Procedure Finding
1
Obtaining the minutes of the meeting for the extra ordinary general assembly meeting held on July 26, 2023, which includes the approval of capital reduction.
Obtained the relevant extracts Company’s extra ordinary general assembly’s meetings for the Capital Reduction dated July 26,2023 by the Company amounting to Saudi Riyals 485,353,940 by absorb the company’s accumulated losses. No exceptions were noted.
2
Obtaining the supported journal vouchers related to the capital reduction and examining the related supported documents and the accounting accuracy of the recording at the Company’s books.
Obtained the journal entry dated July 31,2023 for the recording of the decrease in the share capital of the Company and checked that it is approved by the Chief Financial Officer of the Company. No exceptions were noted.
3
Obtaining the related general ledger to check the journal entry for the share capital reduction to check the appropriateness of recording in the respective general ledger accounts pertaining to the share capital of the Company.
Obtained the relevant extracts of the general ledger of the Company and checked that the journal entry for the decrease in the share capital was appropriately recorded in the respective general ledger accounts pertaining to the share capital of the Company on July 31,2023. No exceptions were noted.
4
Tracing the balance of accumulated losses to the trial balance as of July 31,2023, before and after the impact of the capital reduction by absorbing the accumulated losses and to check the mathematical accuracy of the percentage computation of accumulated losses to share capital before and after the capital reduction.
Traced the accumulated losses amount to the trial balance as at and for the period ended July 31,2023, before and after the impact of the capital reduction, amounting to Saudi Riyals 950,000,000 and Saudi Riyals 464,646,060, respectively, and as included in Annexure A, and checked the mathematical accuracy of the percentage computation of accumulated losses to share capital before and after the absorb of accumulated losses of 55.24% and 8.48%, respectively, as of July 31,2023. Moreover, we have checked the capital reduction is properly reflect in the balance sheet as of July 31,2023 which prepared based on this trial balance. No exceptions were noted.
3 RESTRICTION ON DISTRIBUTION AND USE
This report is solely for your use in connection with the purpose specified above and as se out in our agreement and is not to be used for any other purpose. No part of this report is to be copied or distributed to any other party except as permitted under the terms of our agreement. We do not accept any liability or responsibility to any third party.
For AlKharashi & Co.
Certified Accountants and Auditors
Abdullah Al-Msned
Certified Public Accountant License No. 456
4 ANNEXURE A
According to the Company’s trial balance which issued on July 31,2023 (unaudited), the accumulated losses of the Company before and after the Capital Reduction was amounted to Saudi Riyals 524,765,434 and Saudi Riyals 39,411,494 respectively.
The summary of the changes in the share capital and accumulated losses, unaudited and unreviewed, are as follows:
Before the reduction (as at 31 July 2023)
After the reduction
(as at 31 July 2023) Change
Share capital (Saudi Riyal) 950,000,000 464,646,060 )485,353,940(
Share capital (Number of Shares) 95,000,000 46,464,606 )48,535,394( (Accumulated losses)
(Saudi Riyal) )524,765,434( )39,411,494( 485,353,940
Accumulated losses percentage against capital share
(Before and after the absorbing) (55.24%) (8.48%) -
