COMPANY’S INFORMATION
BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- BASIS OF PREPARATION
- BASIS OF MEASUREMENT
- FUNCTIONAL AND PRESENTATION CURRENCY
- BASIS OF CONSOLIDATION
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Power over the investee (ie existing rights that give the Group the actual ability to direct the relevant activities of the investee). Consolidation of a subsidiary begins when the Group acquires control of the subsidiary and ceases when the Group loses control of the subsidiary.
Business combinations and goodwill
The significant accounting policies adopted for the preparation of these consolidated financial statements are as follows:
The consolidated income statement reflects the controlling company's share of the associated company's operating results. Any difference between the book value of the associated company upon loss of significant influence and the fair value of the retained financial investment and proceeds from disposal is recognized in the consolidated income statement.
Current versus non-current classification
The carrying amount of investment property is reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If any such indication exists and when the carrying amounts exceed the estimated recoverable amount, the assets are written down to their recoverable amount, being the higher of their fair value less costs to sell and their value in use.
Fair value measurement
Revenue from contracts with customers
The Group uses the requirements of IFRS 15 on the limitation of estimates of variable compensation to determine the amount of variable compensation that can be included in the transaction price. The Group then applies the requirements of limited estimates to the variable consideration and recognizes the liability in relation to future expected discounted returns on volumes.
Expenses
Revenue is recognized when the Group's right to receive payment is exercised, which is usually when shareholders approve a dividend. Income from Murabaha transactions (commissions) and financial assets related to commissions are recognized using the effective rate of return, which is the rate that reduces the expected future cash payments or proceeds in a shorter period than the assumed life of the financial instruments or a shorter period than required according to the net book value of the financial asset or liability.
Zakat and taxes Zakat
Deferred tax assets are recognized for all deductible temporary differences, carryforwards of unused tax credits and potential unused tax losses. Deferred tax items are recognized in correlation with the underlying transaction either in other income or directly in equity.
Foreign currencies
Dividends
Cash or non-cash payments to shareholders of the controlling company are recognized as a liability when the payment is authorized. Any non-cash payments are measured at the fair value of the assets to be distributed, with fair value remeasurement recognized directly in equity. When non-cash assets are distributed, the difference between the book value of the liability and the book value of the distributed assets is recognized in the consolidated income statement.
Property, plant and equipment
Tangible fixed assets cease to be recognized on disposal or when no future financial benefits are expected from their use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net sales proceeds and the carrying amount of the assets) is included in the consolidated income statement when the asset is derecognised. Residual values, useful lives and depreciation methods for property, plant and equipment are reviewed at the end of each financial year and adjusted going forward, if relevant.
Capital Work in Progress
Leases
At the commencement of the lease agreement, the Group recognizes lease liabilities measured at the present value of lease payments to be paid over the lease term. After the commencement of the lease agreement, the lease obligations are increased to reflect the interest and decrease the amount when the lease payments occur. Leasing services, whether short-term leasing agreements or assets of low value, are recognized as an expense on a straight-line basis over the lease term.
Borrowing costs
The lease payments include fixed payments (including substantive fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. When calculating the present value of lease payments, the Group uses the marginal interest rate at the commencement date of the lease because the implicit interest rate of the lease cannot be easily determined. In addition, the carrying amount of lease liabilities is remeasured if there is an adjustment or change in the lease term or payments (any change in future payments resulting from a change in the index or rate used to determine such payments) or a change in the assessment of the lease obligations. purchase option of the underlying asset. 3) Short-term leases and leases for low-value assets.
Intangible assets
Lease payments also include the exercise price of a purchase option, reasonably certain to be exercised by the Group, and penalty payments for terminating a lease if the lease term reflects the Group exercising the option to terminate. Amortization expense for intangible assets with finite lives is recognized in the consolidated statement of income under expense in accordance with the function of the intangible asset. Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the consolidated statement of income when the asset is derecognised.
Financial Instruments
- Financial Assets
- Financial liabilities
- Offsetting of financial instruments
- Derivative financial instruments
Financial assets at fair value through OCI with recovery of cumulative gains and losses (debt instruments). The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through the consolidated statement of comprehensive income. For debt instruments at fair value through OCI, the Group applies a simplified approach for low credit risks.
Inventories
Such derivatives are initially measured at fair value on the date a derivative contract is entered into and are subsequently revalued at fair value. Derivatives are recognized as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Embedded derivatives are measured at fair value, with changes in fair value recognized in the income statement.
Impairment of non-financial assets
Intangible assets with indefinite useful lives are tested for impairment annually at December 31, either individually or at the cash-generating unit level, as appropriate and when conditions indicate impairment of the carrying amount. Impairment is determined by estimating the recoverable amount for each cash-generating unit (or group of units) associated with goodwill. In the event that the recoverable amount of the cash-generating unit becomes lower than the book value, an impairment is recognized and the impairment of goodwill cannot be reversed.
Cash and cash equivalents
Trade accounts receivable
Provisions
Employees’ defined benefits liabilities
Finances are initially recognized at the amounts received and classified according to the amounts due within a year according to current liabilities, except when the Company has the right to delay repayment of the financing for a period greater than one year after the budget date. Gains and losses resulting from derecognition of liabilities plus the amortization method under the effective rate of return method are recognized in the consolidated statement of income. Amortization is recognized at the effective rate of return under financing costs in the consolidated income statement.
Non-current assets held for sale and discontinued operations
Segment reporting
A segment is a distinguishable component of the Group that is either involved in the supply of products or services (a business segment) or in the supply of products or services within a particular economic environment (a geographic segment), which is subject to are to gains and losses that are different. from that of other segments. Since the Group carries out part of its activities outside the Kingdom of Saudi Arabia, the Group reports under geographic segment.
Group’s Information
SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the consolidated financial statements requires management to make judgments,
The Group based its assumptions and estimates on the parameters available at the date of preparation of the consolidated financial statements. In the context of the variable price measurement, the Group should use the expected value method or the most probable amount method based on the choice of the best method. The Group's management determines the estimated useful lives of its property, plant and equipment for the calculation of depreciation.
SEGMENTAL INFORMATION
Business segments
Geographical segments
- NET SALES
- COST OF SALES
- SELLING AND DISTRIBUTION EXPENSES
- GENERAL AND ADMINISTRATIVE EXPENSES
- FINANCE COSTS
- ZAKAT AND INCOME TAX
- Zakat status
The company completed its Zakat status for the year ended 31 December 2008 and obtained an unlimited Zakat certificate for the said year. The Company submitted its Zakat Returns for the years ended 31 December 2009 to 2018 and obtained a Limited Zakat Certificate for the year ended 31 December 2018. The Company submitted Zakat Returns for the years ended 31 December 2009 to 2012 and obtained a limited zakat certificate for 2012.
Income Tax
- Tax Status
- Value Added Tax
- Business earning taxes
- Stamp due taxes
- Tax deduction
- Real estate taxes
- Value Added Tax
- EARNINGS / (LOSS) PER SHARE
- PROPERTY, PLANT AND EQUIPMENT
- PROPERTY, PLANT AND EQUIPMENT (continued)
- INVESTMENT PROPERTIES
- INTANGEBLE ASSETS
- LEASES Group as lessee
- INVENTORY
- TRADE RECEIVABLES
- PREPAID EXPENSES AND OTHER ASSETS
- RELATED PARTIES TRANSACTIONS AND BALANCES
The business books and records of the subsidiary until 2019 were reviewed and the tax paid. The business books and records of the subsidiary until 2020 have been reviewed and the tax has been paid. Below is a list of significant related party transactions carried out in the normal course of the Group's operations during the year:
Due from related parties
Due to related parties
Board of directors and executives’ allowances and remunerations
- INVESTMENTS FOR TRADING AT FAIR VALUE THROUGH PROFIT OR LOSS During the year ended 31 December 2022, the Company invested in one of the investment portfolios
- CASH AND CASH EQUIVALENTS
- SHARE CAPITAL
- STATUTORY RESERVE
- NON-CONTROLLING INTRESETS
- ISLAMIC MURABAHA FINANCING CONTRACTS AND LONG-TERM LOANS The movement in Islamic Murabaha and loans during the year is as follows
- EMPLOYEES’ DEFINED BENEFITS
- TRADE PAYABLES AND OTHER ACCRUALS
- SHORT TERM ISLAMIC MURABAHA FINANCING Movement in the Islamic Murabaha financing is as follows
- Derivative financial instruments
- CAPITAL COMMITMENTS, CONTINGENCIES
- FAIR VALUE OF FINANCIAL INSTRUMENTS
During the year 2021, one of the subsidiaries entered into a financing agreement with a local bank of SR 65 million. During the year 2019, one of the subsidiaries entered into a financing agreement (Tawarruq) with a local bank of SR 150 million. One of the subsidiaries entered into short-term Islamic Murabaha (Tawaruq) contracts with local banks in the Kingdom of Saudi Arabia.
Quoted market prices in active markets for identical assets or liabilities
Fair value is the amount for which an asset can be exchanged, or a liability settled between two knowledgeable willing parties in an arm's length transaction. The Group's financial assets consist of investments in financial instruments, cash and cash equivalents, trade accounts receivable and other receivables, amounts due to related parties, and its financial liabilities consist of trade accounts payable, accruals, other payables, Islamic Murabaha contracts , term financing arrangements, lease obligations, lease obligations, bank overdrafts and amounts due to related parties. The Company uses the fair value hierarchy to determine the fair value of financial instruments and disclose it based on the valuation method:.
Other valuation techniques that are significant to the fair value measurement is directly or indirectly observable
Inputs that are significant to the fair value measurement is unobservable
- RISK MANAGEMENT OBJECTIVES AND POLICIES
- SIGNIFICANT EVENTS
- NEW AMENDED STANDARDS AND INTERPREPERATIONS
- SUBSEQUENT EVENTS
- BRANCHES OF SUBSIDIARIES
- APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
Such raw materials are subject to price fluctuations which may affect the business results of the Group. Accordingly, a currency translation adjustment was recorded in relation to the conversion of operations of the subsidiary company in the Arab Republic of Egypt. The consolidated financial statements include assets, liabilities and results of operations of the following branches:
