Al Gassim Holding turns to profit in 2021

Al Gassim Investment Holding Co. has turned to profits of SR 10.9 million in 2021 compared to losses of SR 5.13 million during the year before.

The company reported operational loss at SR 947.18K in 2021 from operational profit of SR 3.09 million in 2020.

Moreover, gross profits declined 3.3% to SR 9.58 million in 2021 from SR 9.91 million in 2020, while loss per share decreased to SR 0.036 against loss per share at SR 0.171.

Turning to profit was mainly driven by the recording of a reversal of losses for a decrease in the value of investment properties during the current year compared to recording a loss during the previous year, despite the presence of an increase in the value of provisions during the current year in relation to financial leasing contracts, as well as the provision for zakat compared to the previous year.

Draw of Attention

We would like to draw attention to Note No. (33) in the financial statements that during 2018, the company decided to enter as a founder with a group of independent investors in a company specialized in the manufacture and marketing of dates with a 40% share of the new company’s capital of SR 100 million, so that the company provides the assets of the dates factory It has other assets, but the incorporation of the new company was canceled based on the decision of the founding committee of Qassim Dates Company on May 19, 2021 AD. Our opinion has not been modified in this matter.

We draw attention to Note No. (31) in the financial statements, which indicated the existence of a case from the company against the branch of the Ministry of Environment, Water and Agriculture (the “Ministry”) in the Qassim region, which relates to the request to cancel the negative decision represented in the failure of the branch of the ministry to submit a property request to the Supreme Court. The company for the entire area that it revived from the land handed over to it. Where an approval was issued by the Supreme Court for the company to own an area of only 74 million square meters of the total area that it revived, the company demands that it be raised to the Supreme Court by requesting that the company own the rest of the area it has revived from that land, which amounts to 116 million square meters. Noting that when the company is assumed to lose the case, it will be fundamentally affected by the company due to the connection of the disputed land with the rental income contracts concluded by the company, which represents the company’s main source of income. The expected losses can only be determined at the final settlement of the case. On March 30, 2021 AD, a preliminary ruling was issued by the Administrative Court in the Qassim region in the case filed by the Qassim Investment Holding Company against the branch of the Ministry of Environment, Water and Agriculture in the Qassim region not to admit the case, and based on the opinion of the company’s legal advisor that the reason for dismissing the case was due to the lack of jurisdiction of the Administrative Court to consider the case and that the specialist is a committee in the Ministry of Environment, Water and Agriculture. The company received the judgment and dismiss it before the Administrative Court of Appeal. The case was registered with No. 446/1442 in the Administrative Court of Appeal in the Qassim region, and the first hearing was set on August 31, 2021 AD.

On May 18, 2021 AD, the company received a letter from the Ministry of Environment, Water and Agriculture, dated Ramadan 24, 1442 AH, regarding a land purchase, in which the Ministry hopes to pay the same fee for the encroached area, which the company revived from the date of the seizure land until the date of Ramadan 24, 1442 AH to the state treasury in favor of the ministry, whereas, existing case filed against the branch of the Ministry of Environment, Water and Agriculture, in which the company demands that the company cancel the decision represented in the Ministry’s refusal to submit to the Supreme Court a request for the company’s ownership of the entire area that the company has revived from the land delivered to it. Therefore, the Ministry is not entitled to demand the rent before adjudicating whether the company owns the land or not. The company objected to the decision on July 14, 2021 AD. The Administrative Court of Appeal in the Qassim region issued a ruling to cancel the ruling issued on 8/17/1442 AH by the First Circuit of the Administrative Court in Buraidah in the case registered in No. 228 (for the year 1442 AH), ruling that the case was not admitted, and the Ministry of Environment, Water and Agriculture’s negative decision of its refusal to the grievance of Al-Qassim Investment Holding Company for not owning the entire area of the land allocated to it was referred to the committee stipulated in Article 10 of the fallow lands distribution system, and the judgment was received on 03/03/1443 AH and a request was submitted to record the case before the committee. Our opinion has not been modified in respect of this matter.

Additional Information:

In accordance with what was stated in Note No. 33 (Previous Years Adjustments) the following has been amended:

1. A) Statement of financial position, the balance at the beginning of the year has been modified for retained losses amounting to SR 2,204,079 representing depreciation of property, plant and equipment, which were previously classified as assets held for the purpose of selling for the previous periods, and assets held for the purpose of sale were returned and transferred to the item of property, plant and equipment.
2. B) Statement of profit or loss and other comprehensive income, the loss item from discontinued operations has been modified for the period compared to the previous year with an amount of SR 964,317, which is the share for the year 2020 of depreciation of property, plant and equipment, which were previously classified as assets held for sale, and the value of this item has been reclassified The item after that settlement and its distribution on the items of the profit and loss statement, and the impact of the net (loss) profit for the period and the total (loss) / profit of comprehensive income with the same value, compared to what was previously announced.