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Wafrah for Industry and Development Co. announces its Annual Financial Results for the Period Ending on 2020-12-31

ELEMENT LIST CURRENT YEAR PREVIOUS YEAR %CHANGE
Sales/Revenue 83,777,853 82,816,966 1.16
Gross Profit (Loss) 19,414,430 16,758,800 15.846
Operational Profit (Loss) -6,494,577 -10,482,052 -38.04
Net Profit (Loss) after Zakat and Tax -12,379,088 -25,369,733 -51.205
Total Comprehensive Income -13,351,045 -25,825,438 -48.302
Total Share Holders Equity (after Deducting Minority Equity) 62,344,946 75,695,991 -17.637
Profit (Loss) per Share -1.6 -3.29
All figures are in (Actual) Saudi Arabia, Riyals
ELEMENT LIST EXPLANATION
The reason of the increase (decrease) in the net profit during the current year compared to the last year is The decrease in net losses in the current year compared to the previous year is attributed to the decrease in cost of sales, the increase of sales by 1.16%, the decrease in the General and Administrative expenses, and the decrease in sales and marketing expenses, despite the decrease in other revenues, increase in the provisions for expected credit losses, increase in the provisions for slow moving goods, and the formation of provision for impairment of inventory value. It is to be mentioned that losses of last year included provision for decrease in investment values of sister companies by SR 4,354,480 and provision for real estate devaluation by the sum of SR 1,008,252, in addition to provision for loan guarantee given to a sister company to the sum of SR 8,063,390.
Statement of the type of external auditor’s report Qualified opinion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion Basis for qualified opinion:We were not able to obtain sufficient conviction regarding to the validity of the principles and assumptions used in the valuation of the valuation of Property, plant and equipment as of December 31, 2020, whose book value is SAR 95,540,216. Also, through the alternative procedures, we were not able to obtain about the impairment of property, plant and equipment as on December 31, 2020, and as a result we were unable to determine whether it is necessary to make any adjustments related to the balance of property, plant and equipment in the statement of financial position, and the items of statements of comprehensive income, changes in shareholder’s equity and cash flows.

Emphasis of matter:

We draw attention to note (2-d) to the financial statements, which indicates that the company incurred a loss of approximately SAR 12.4 and 25.4 million for the year ended December 31, 2020 and 2019, respectively. In addition to the Company’s current liabilities as on December 31, 2020 exceeding its current assets by SAR 15,836,730. These conditions or events indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of these matters.

Reclassification of Comparison Items N/A
Additional Information In response to the spread of the Covid-19 virus around the world and the resulting disruption of social and economic activities in those markets, the company’s management has proactively assessed its impact on its operations and has taken a series of preventive measures, including forming teams and ongoing crisis management processes, to ensure the health and safety of its employees. And its customers, consumers and society as a wider range as well as ensuring the continuity of supplying its products in all its markets. Whereas, the food industry in general has been exempt from the various bans and restrictions imposed by the various regulatory authorities including the exemption from curfew hours. Based on these factors, the company’s management believes that the Covid-19 epidemic did not have a significant impact on the company’s financial statement results that were reported for the year ended December 31, 2020, with the exception of a decrease in the vegetable factory’s sales about 36.5% of a value approximately SAR 19.5 million compared with the similar period with the previous year. On the other hand, sales of the rest of the other factories increased, especially the products of the meat and breakfast cereal manufacturers, as a result of the expansion of private production, (which compensated for the losses of the company’s main product – the frozen potatoes of the vegetable factory).In view of the continuation of the pandemic, the current economic uncertainty and the slowdown in economic growth, the company is monitoring the situation closely, especially in the next few months, and the company expects the situation to gradually improve and hopes that the outbreak of Covid-19 will end this year.

The Extraordinary General Assembly in its meeting held on 15 Sha’ban 1441H corresponding to April 8, 2020 approved the recommendation of the Board of Directors to reduce the company’s capital in exchange for amortizing the accumulated losses amounting to SAR 122,829,650 to become the capital after the reduction of SAR 77,170,350 with a percentage of 61.4% of the capital by cancelling 12,282,965 shares of the company.

Loss per share

The weighted average number of shares for the two years ended December 31, 2020 and December 31, 2019 was reached by taking the effect of the capital decrease from the beginning of the nearest offered period (January 1, 2019) to comply with the requirements of IAS 33.

ADJUSTMENTS

The company’s management did not calculate the due commission provision for the year 2019, which resulted in a difference of SAR 808,117

and it was not recorded at the end of the fiscal year of 2019.

The impact on the Statement of Comprehensive Income for the year ending 31-12-2019 as sales and marketing expenses reached SR 17,289,675 instead of SR 16,481,558.

It also affected the Statement of Financial Position as the item of Accumulated Losses mounted to SR 123,637,776 instead of 122,829,659 and the item accrued expenses and other Credit Balances that mounted to SR 5,661,893 instead of SR 4,853,776.

SUBSEQUENT EVENTS

On 3 March 2021, the loan restructured by the Saudi Industrial Development Fund, with the first payment due after restructuring on 28/1/2021.