|ELEMENT LIST||CURRENT YEAR||PREVIOUS YEAR||%CHANGE|
|Gross Profit (Loss)||-76,625||-57,662||32.886|
|Operational Profit (Loss)||-144,223||-169,811||-15.068|
|Net Profit (Loss) after Zakat and Tax||-194,309||-55,012||253.212|
|Total Comprehensive Income||-204,316||-56,343||262.628|
|Total Share Holders Equity (after Deducting Minority Equity)||81,106||285,422||-71.583|
|Profit (Loss) per Share||-5.39||-1.53|
|All figures are in (Millions) Saudi Arabia, Riyals|
|The reason of the increase (decrease) in the net profit during the current year compared to the last year is||The Group made a net loss of SR 194.3 million as compared to the net loss of SR 55.0 million last year and the change in net losses of the current year compared with net loss of the previous year are mainly due to following impacts:|
• Lower volumes and margins in 2021 as compared to 2020 due to severe working capital constraints resulted in heavy unutilized capacity and thereby unrecovered fixed costs.
• Increased finance cost of the Group during 2021, as most significant restructurings of debt took place mid-year 2020 and thereby were impacted only partially last year, alongside fair value gains of restructured borrowings with a commercial lender and former supplier in 2020.
• Reductions in other income which mainly consisted of foreign currency exchange gains during 2021 as opposed to significant reversal in legal and other provisions in 2020.
• Impairment of deferred tax assets considering the expiry of claimable losses in accordance with tax regulations of Turkey.
• Increased provisions for zakat and income tax which also includes partial impacts as a result of tax assessments.
• Impacts of the above were partly compensated through decreased selling, general & administrative expenses during 2021.
|Statement of the type of external auditor’s report||Disclaimer of opinion|
|Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion||Basis for Disclaimer of Opinion|
• The Group incurred a net loss of SAR 193.7 million for the year ended December 31, 2021 (2020: SAR 55.7 million), and as of that date, the Group’s accumulated losses have reached SAR 256.7 million, representing 71.2% of the Group’s share capital. Further, the Group current liabilities exceeded its current assets by SAR 476.4 million as at December 31, 2021 (As at December 31, 2020: SAR 34.64 million). These events or conditions, along with other matters, indicate a significant doubt about Group’s ability to continue as a going concern and its ability to meet its obligations when it becomes due. The Group has been and still in the process of restructuring its liabilities to its creditors and plan to reduce its payables with future cash flows from its current projects. The Groups management is aware of the risks related to going concern but has prepared the consolidated financial statements under going concern basis. Accordingly, we were unable to obtain a sufficient appropriate audit evidence to satisfy ourselves that the Group will be able to continue its operations in the future and whether using going concern basis in preparing the consolidated financial statements is still appropriate.
• As stated in note 18, the Group received assessments from the Zakat, Tax and Customs Authority (ZATCA), claiming additional Zakat liabilities of SAR 235.9 million (2020: SAR 201.9 million) in respect of the assessment for prior years against which the Group has filed appeals. It is management’s assertion that they have grounds to contest against items included in the assessments raised by ZATCA, that the outcome of the appeals is uncertain at this stage and, therefore, it is not possible to determine the potential Zakat provision. No provision has been made in these consolidated financial statements for the items under appeal and for any potential exposure relating to open years not yet assessed by ZATCA. We have not been provided details or basis of certain appeals the assessments, including details of zakat computation and appeals in respect of certain open years and of certain subsidiaries. We were, therefore, unable to determine whether any adjustments are necessary to the Group’s current or prior years’ zakat charges and corresponding liability.
• The Group has property, plant and equipment amounted of SAR 276.3 million as at December 31, 2021 and there are some indicators that the recoverable value of them is less than the book value, we were unable to obtain sufficient audit evidence regarding the recoverable amount of them as the Group’s management hasn’t provided us with sufficient data related to the recoverable amount of the property, plant and equipment and the extent to recognize any impairment losses the book value of property, plant and equipment as at December 31, 2021. The Group’s management will prepare a future studies to determine the recoverable value subsequently after approval date of the consolidated financial statements of the Group.
• As stated in note 10, the consolidated financial statements include investment in an associate (50% ownership) with a carrying value of SAR 299.17 million and share of results of SAR 7.2 million as at and for the year ended December 31, 2021 (2020: SAR 319.12 million and SAR 1.52 million respectively). The associate had trade receivables amounting to SAR 54.4 million, out of which the Group’s share is SAR 27.2 million; that are overdue for more than one year, against which management has not recognized any allowance for expected credit losses. Management was unable to provide us with sufficient appropriate audit evidence to ensure the recoverability of those trade receivables balances. Consequently, we were unable to determine whether any adjustments to the Group’s share of results of an associate and the carrying value of the associate were necessary for and as of the year ended December 31, 2021.
The consolidated financial statements of the Group for the year ended December 31, 2020 were audited by another auditor who expressed a modified opinion (qualified) on those consolidated financial statements on April 06, 2021.
|Reclassification of Comparison Items||Certain figures have been reclassified in comparative 2020 consolidated financial statements to confirm with the presentation in the current year.|
|Additional Information||Subsequent to year end, the shareholders approved in their meeting held on February 20, 2022 (corresponding to Rajab 19, 1443 H) the reduction of the parent Company’s share capital from SAR 360,614,060 (36, 061,406 shares) to SAR 262,311,060 (26,231,106 shares) by cancelling 9,830,300 of its common stock for the purpose of restructuring the Company’s share capital and to absorb 100% of the accumulated losses as at March 31, 2021.|
On January 19, 2022 (corresponding to Jumada Al-Akhirah 16, 1443), the Group successfully rescheduled its entire outstanding payable balance with Noble Resources International Pte. Ltd., through entering into the amendment to settlement deed. No reclassification has been made in the consolidated financial statements, to reflect amounts due beyond 12 months as the event was deemed to be “”non-adjusting”” in nature, in accordance with IAS 10, Events After the Reporting Period.
Subsequent to year end, the commercial court in Jeddah has issued a final judgement by order of execution was issued on Shab’aan 19, 1443H (corresponding to March 22, 2022), in favor of Saudi Cable Company indicated the termination of the contract concluded between the two parties and enforcing Al-Nawasi Gulf Trading Company repaying to Saudi Cable Company an amount of 6,001,448 SAR.
On March 14, 2022, the Group entered into a sale contract to sell the investment property classified as held for sale for a consideration of SAR 40.9 million.
No significant event occurred since the year end of December 31, 2021 and the date of approval of these consolidated financial statements by board of directors that would have a material impact on the financial position or financial performance of the Group, other than stated above.