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Tihama Advertising and Public Relations Co. announces the annual financial results for the period ending on 31-03-2018

TAPRCO 4070 -7.54% 16.18 -1.32
Element Current year Previous year % Change
Net profit (loss) 2.99 -55.7 -
Earning or loss per share, Riyals 0.42 -3.51 -
Gross profit (loss) 29.3 -5.6 -
Operational profit (loss) -15.1 -43.8 65.53
All figures are in (Millions) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of annual financial results The net profits during the current year compared to loss of last year arose from an increase in Advertising sector gross profit by around SAR 34 million as a result of decrease in cost of sales by around SAR 45 million, SAR 32 million as a result of decrease in advertising sites lease contracts cost and SAR 13 million from disposal of Company's stake in Ad Art Median Company (a subsidiary), partially offset by a decrease in sector revenues of around SAR 11 million, SAR 3 million as a result of decrease in advertising sites lease contracts and SAR 8 million from disposal of Company's share in Ad Art Median Company (a subsidiary) ,in addition to an increase in Bookstores and Distribution sector gross profit by around SAR 0.9 million as a result of increase in profit margins and a decrease in Company's obligations for advertising site lease contracts after agreeing the final settlement with Municipalities which resulted in a gain of around SAR 15.9 million, along with recognition of other income of around SAR 2 million from Management fees and other media services. During the current year the Company recognised around SAR 1.1 million as gain from disposal of its stake in Ad Art Median Company (a subsidiary). During last year the Company recognised SAR 19.6 million as an impairment loss in investment in associates. These profits were partially offset by the impact of increase in General and Selling expenses by nearly SAR 6 million, a decrease in share of profits from associates by around SAR 9.2 million and an increase in Zakat provision by around SAR 0.8 million.
External auditor's report containing reservation The Auditor 's Report includes the following qualifications: As disclosed in note (6) We have not been able to determine the impact of the non-issuance of the statutory financial statements of the associates, and the Company did not recognize any profits or losses on investment in United Advertising Limited Company for the years ended 2017, 2016 and 2015, 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 consolidated financial statements are necessary. As disclosed in note (2/5) the 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. As disclosed in note (2/5) the Company's current liabilities exceed its current assets by SAR 10,444,006 as at 31 March 2018, 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 as noted in the above disclosure. As disclosed in note (3/1/5), the 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 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: As shown in Note 23, 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 2015. The management of the subsidiaries has made provisions for Zakat annually.
Reclassifications in annual financial results Certain comparative figures have been reclassified to conform with the current year disclosures.
Other notes Revenues for the year ended 31 March 2018 amounted to SAR 71.5 million compared to SAR 86.6 million for the last year, a decrease of 17% , around 8.7% of the decrease resulted from the disposal of Ad Art Median Company ( a subsidiary). The total shareholders' equity (after excluding the minority interest) as at 31 March 2018 amounted to SAR 57.7 million compared to SAR 50.3 million of last year, an increase of 14%. Accumulated losses as of 31 March 2018 amounted to SAR 17.3 million representing 23.1% of the Company's Capital on the same date amounted to SAR 75,000,000. Total comprehensive income for the year ended 31 March 2018 was SAR 2.8 million, compared to the total comprehensive loss for last year which reached SAR 55.4 million. Earnings per share for the year were calculated on the net profit attributable to equity holders of the parent company of SAR 3.23 million based on the weighted average number of shares issued as of 31 March 2018 of 7,767,123 shares, as on 13 April 2017 the share capital was reduced by canceling 7,500,000 shares. The loss per share for last year was calculated on the net loss attributable to equity holders of the parent company of SAR 52.7 million based on the weighted average number of shares issued as of 31 March 2017 of 15,000,000 shares. The Company has adopted International Financial Reporting Standards effective from 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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