| Reasons of increase (decrease) for quarter compared with same quarter last year |
The net profits during the current quarter compared to loss in the same quarter of last year arose from an increase in Advertising sector gross profit by around SAR 7.5 million as a result of decrease in cost of sales, in addition to increase in other revenues by around SAR 6.7 million as a result of the decrease in Company's obligations towards advertising sites lease contracts after receiving the final settlement from Makkah Municipality. These gains were partially offset by the impact of increase in General and Selling expenses by nearly SAR 1.1 million, a decrease in share of profits from associates by around SAR 1.5 million and increase in Zakat provision by around SAR 0.3 million. |
| Reasons of increase (decrease) for quarter compared with previous quarter |
The net profits during the current quarter compared to loss in the last quarter arose from increase in Advertising sector gross profit by around SAR 9 million as a result of decrease in cost of sales, in addition to increase in other revenues by around SAR 6 million as a result of the decrease in Company's obligations towards advertising sites lease contracts after receiving the final settlement from Makkah Municipality, in addition general and administrative expenses decreased by approximately SAR 7.5 due to charging the last quater with allowance for doubtful debts of around SAR 4 million and provision for impairment in unbilled revenues of SAR 2.5 million, Zakat provision decreased by SAR 0.6 million along with finance charges decreasing by SAR 0.7 million. These gains were partially offset by the impact of decrease of share of profit from associates by nearly SAR 7 million. |
| External auditor's report containing reservation |
The Auditor 's Report includes the following qualifications: We have not been able to determine the impact of the non-issuance of the condensed financial statements of the associates. Accordingly, we have relied on the management accounts prepared by the Company's management of the associates, and the Company did not recognize any profits or losses on investment in United Advertising Limited Company for the years ended 2016 and 2015 and the period ended 30 June 2017, and we were unable to obtain adequate and appropriate audit evidence directly or through alternative audit procedures to determine the Company's share of the change in net assets of the entity invested in. Accordingly, we are unable to determine whether any changes to the condensed consolidated financial statements are necessary. The condensed consolidated financial statements were prepared under the Going Concern concept, but the delay in the company renting some Advertising sites and the incurred losses of some of its subsidiaries has led to a deficit in its operational results and of the statement of cash flows for certain subsidiaries such as Tihama Modern Bookstores, Tihama Holding for Commercial Investment, Tihama International Advertising and Istidama International Real Estate Company, the company provided to us it's future plans with respect to the collection of its debts and settlements with creditors and revitalization of operational activities. The Company's current liabilities exceed its current assets by SAR 13,012,994 as at 30 June 2017, this is an indicator of the Company's inability to continue as a going concern. The Management plan is to address these losses and capital deficiency. The condensed consolidated financial statements include an investment in a subsidiary company, International Advertising Services Limited, whose financial statements have not been consolidated as its financial statements has not been issued since the year 2012 due to seizure of the company's operations as of 16 November 2011. We have not been able to obtain sufficient and appropriate audit evidence directly or through alternative audit procedures to determine the validity of the disclosed condensed consolidated financial statements. Accordingly, we are unable to determine whether any changes to the consolidated financial statements are necessary. The Auditor 's Report draws the attention to the following: Some subsidiaries have not yet submitted Zakat declarations such as Tihama Holding for Commercial Investment, Tihama Modern Bookstores Company, Istidama International Real Estate Company and Tihama International Advertising Company. Tihama Distribution Company has not submitted its Zakat declarations for the years since 2014. The management of the subsidiaries has made provisions for Zakat annually. As disclosed in note (2), the consolidated financial statements for the year ended 31 March 2017 which we have issued a qualified opinion on 19 Ramadan 1438H (corresponding to 14 June 2017) have been prepared in accordance with generally accepted accounting standards in the Kingdom of Saudi Arabia. We have also examined the reconciliation of the comparative figures required to be presented in accordance with the International Financial Reporting Standards adopted in Saudi Arabia and other standards and issuance's approved by the Saudi Organization for Certified Public Accountants. |
| Reclassifications in quarterly financial results |
Certain comparative figures have been reclassified to conform with the current period reporting. certain comparative figures were re-stated after the deconsolidation of the financial statements of the International Advertising Services Company. |
| Other notes |
Revenues for the quarter ended 30 June 2017 amounted to SAR 13.9 million compared to SAR 13.4 million for the same quarter of last year, an increase of 3.9%. The total shareholders' equity (after excluding the minority interest) as at 30 June 2017 amounted to SAR 52.3 million compared to SAR 50.5 million as at 31 March 2017, an increase of 3.6%. Total comprehensive income for the quarter ended 30 June 2017 was SAR 1.6 million, compared to the total comprehensive loss for the same quarter last year which reached SAR 11.1 million. The audited financial results have been used to present comparative figures for the previous quarter ended 31 March 2017. Earnings per share for the current period and the losses per share for comparative period were calculated based on net profit attributable to equity holders of the parent Company amounted to SAR 1.8 million for the period ended 30 June 2017 and net losses attributable to equity holders of the parent Company amounted to SAR 10.2 million for the period ended 30 June 2016 based on weighted average number of shares issued as of 30 June 2017 of 8,583,333 shares. On 13 April 2017, the share capital was reduced by canceling 7,500,000 shares. The number of shares issued after the reduction was 7,500,000 shares. The Company has adopted International Financial Reporting Standards effective 1 April 2017. Accordingly, certain changes have been made in the Company's financial statements in the measurement, presentation and disclosure method for the current and comparative periods in accordance with the accounting policies adopted and in accordance with the requirements of the International Financial Reporting Standards adopted in Saudi Arabia. |
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