We have audited the consolidated financial statements of the Food Development Business Company - a Saudi joint stock company - (“the Company”) and its subsidiaries, collectively referred to as the “Group”, which include the consolidated statement of financial position as of December 31, 2023, and the consolidated statement of profit or loss and other comprehensive income. The consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and the notes attached to the consolidated financial statements, including material information about accounting policies.

In our opinion, except for the potential effects of the matters described in the “Basis for Qualified Opinion” section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2023, its consolidated financial performance and its consolidated cash flows for the year ended On that date by the International Financial Reporting Standards approved in the Kingdom of Saudi Arabia and other standards and publications complementary to the international standards approved by the Saudi Organization for Auditors and Accountants.

Basis for qualified opinion

As shown in the consolidated statement of financial position and Note No. (9), the balance of the right-to-use assets and leasing obligations as of December 31, 2023 amounted to 28.8 million Saudi riyals and 26.8 million Saudi riyals, respectively. The group's management recorded additions and exclusions from lease contracts under the right-to-use assets clause and the lease obligations clause during the year. We did not reach a degree of certainty about the method of calculation and the correctness of the accounting treatment related to these transactions and their impact on the current year and whether they should be accounted for in previous years in the consolidated financial statements, and we were not able to determine the impact of this on the consumption of improvements to leased buildings included in property and equipment. And the reasonableness of the depreciation rates used by the group and their proportionality to the terms of the lease contracts or not (Note 6). The balance of other income, which appears in the consolidated statement of profit or loss and other comprehensive income for the year ending December 31, 2023, also includes sublease revenues recognized by the group in the amount of 3.2 million Saudi riyals (2022: 3.8 million Saudi riyals) (Note 26). The Group has not assessed whether the sublease contracts represent operating or finance leases following the requirements of IFRS 16 (Leases). Accordingly, we were not able to verify the accuracy of the recognition of other income and the receivables arising against it in the amount of 3.9 million Saudi riyals as of December 31, 2023, and we were not able to determine whether there were any necessary adjustments in the current year or previous years and the impact of these matters on the statements. Consolidated financials.

The company would also like to clarify that about the basis for the reservation by the external auditor, the company did not reverse the registration of the right to use the assets and leasing obligations for the previous year, 2022 AD, and it was registered for the current year, and the company believes that it is applying it correctly. The company has also sought the help of an external expert to review the method of calculating the right. Using the assets and leasing obligations and confirming the validity of the application, and that study has not been completed. The company will take the necessary accounting action immediately upon completion of the expert’s work if required.

The company assures its valued shareholders of its constant keenness to follow best practices by implementing internal policies and procedures, which are reviewed periodically to ensure their effective application.