SAVOLA GROUP COMPANY
(A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS - (UNAUDITED)
For the three-month period and year ended December 31, 2020
together with the Independent Auditors' Review Report
SAVOLA GROUP COMPANY
(A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS - (UNAUDITED) For the three-monthperiod and year ended December 31, 2020
INDEX | Page |
Independent auditor's report on review of the condensed consolidated interim financial | - |
statements | |
Condensed Consolidated Statement of Financial Position | 1 |
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | 2 - 3 |
Condensed Consolidated Statement of Changes in Equity | 4 - 5 |
Condensed Consolidated Statement of Cash Flows | 6 - 7 |
Notes to the Condensed Consolidated Interim Financial Statements | 8 - 31 |
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Expressed in thousands of Saudi Riyal unless otherwise stated)
December 31, | December 31, | |||
Note | 2020 | 2019 | ||
(Unaudited) | (Audited) | |||
ASSETS | ||||
Property, plant and equipment | 6,368,663 | 6,512,256 | ||
Right-of-use assets | 3,912,128 | 4,319,670 | ||
Intangible assets and goodwill | 820,157 | 831,596 | ||
Investment property | 26,677 | 29,881 | ||
Investment in equity accounted investees | 4 | 9,054,136 | 8,625,047 | |
Investments at fair value through other comprehensive income | 5 | 387,196 | 347,590 | |
Long term receivables | 7,547 | 7,268 | ||
Derivative | 2,311 | 1,999 | ||
Deferred tax asset | 29,800 | 12,480 | ||
Total non-current assets | 20,608,615 | 20,687,787 | ||
Inventories | 3,022,295 | 2,752,020 | ||
Trade receivables | 1,197,209 | 1,190,657 | ||
Prepayments and other receivables | 1,124,319 | 1,060,195 | ||
Investments at fair value through profit or loss | 5 | 2,828 | 26,516 | |
Cash and cash equivalents | 1,068,230 | 940,536 | ||
Total current assets | 6,414,881 | 5,969,924 | ||
TOTAL ASSETS | 27,023,496 | 26,657,711 | ||
EQUITY AND LIABILITIES | ||||
EQUITY | ||||
Share capital | 6 | 5,339,807 | 5,339,807 | |
Shares held under employees' share based payment plan | 7 | (16,509) | -- | |
Share premium | 342,974 | 342,974 | ||
Statutory reserve | 8 | 1,774,085 | 1,774,085 | |
General reserve | 4,000 | 4,000 | ||
Other reserves | (94,585) | (179,230) | ||
Effect of transactions with non-controlling interests without | ||||
change in control | (187,979) | (187,979) | ||
Foreign currency translation reserve | (1,966,648) | (1,792,396) | ||
Retained earnings | 3,045,661 | 2,288,979 | ||
Equity attributable to owners of the Company | 8,240,806 | 7,590,240 | ||
Non-controlling interests | 941,432 | 948,830 | ||
TOTAL EQUITY | 9,182,238 | 8,539,070 | ||
LIABILITIES | ||||
Loans and borrowings | 9 | 4,464,301 | 3,905,245 | |
Lease liabilities | 3,773,726 | 3,955,686 | ||
Employee benefits | 781,210 | 747,201 | ||
Long term payables | 248,592 | 204,146 | ||
Derivative | 190,562 | 188,094 | ||
Provision against asset restoration | 146,466 | 139,609 | ||
Deferred tax liability | 133,051 | 114,745 | ||
Total non-current liabilities | 9,737,908 | 9,254,726 | ||
Loans and borrowings | 9 | 2,436,015 | 3,639,250 | |
Lease liabilities | 584,205 | 676,840 | ||
Trade payables | 2,440,161 | 2,304,872 | ||
Accrued and other liabilities | 2,642,969 | 2,242,953 | ||
Total current liabilities | 8,103,350 | 8,863,915 | ||
TOTAL LIABILITIES | 17,841,258 | 18,118,641 | ||
TOTAL LIABILITIES AND EQUITY | 27,023,496 | 26,657,711 |
The accompanying notes 1 to 20 form an integral part of these condensed consolidated interim financial statements.
1
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
(Expressed in thousands of Saudi Riyal unless otherwise stated)
Note | |
Revenues | 14 |
Cost of revenues | 14 |
Gross profit | |
Share of results in investment in | |
equity-accounted investees, net of | |
zakat and tax | |
Administrative expenses | |
Selling and distribution expenses | |
Impairment loss | |
Results from operating activities | |
Finance income | |
Finance cost | |
Net finance cost | |
Reversal of provision no longer | |
required | 10 |
Profit before zakat and income tax | |
Zakat and income tax expense | 10 |
Profit for the period / year
Other Comprehensive Income
Items that will not be reclassified to profit or loss
Re-measurements of the defined benefit liability
Investments at fair value through other comprehensive income - net change in fair value
Items that are or may be reclassified to profit or loss
Foreign operations - foreign currency translation differences
Investment in equity accounted investees - share of Other Comprehensive Income
Cash flow hedges - effective portion of changes in fair value
Other comprehensive (loss) / income Total comprehensive income
for the period / year
Three-month period | Year ended | |||||
ended December 31 | December 31 | |||||
2020 | 2019 | 2020 | 2019 | |||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||
5,183,255 | 5,231,733 | 21,700,491 | 21,406,424 | |||
(4,113,650) | (4,040,233) | (17,064,773) | (16,902,120) | |||
1,069,605 | 1,191,500 | 4,635,718 | 4,504,304 | |||
123,375 | 100,799 | 704,148 | 639,357 | |||
(238,866) | (204,224) | (849,234) | (820,280) | |||
(680,168) | (702,995) | (2,784,360) | (2,941,686) | |||
(49,550) | (72,738) | (49,550) | (72,738) | |||
224,396 | 312,342 | 1,656,722 | 1,308,957 | |||
45,413 | 74,053 | 79,747 | 102,415 | |||
(171,374) | (229,684) | (621,228) | (789,077) | |||
(125,961) | (155,631) | (541,481) | (686,662) | |||
-- | 66,839 | 21,003 | 138,275 | |||
98,435 | 223,550 | 1,136,244 | 760,570 | |||
(32,700) | (38,617) | (114,948) | (103,718) | |||
65,735 | 184,933 | 1,021,296 | 656,852 |
57,112 | 16,448 | 4,044 | 16,448 |
(35,866) (3,304) 39,606 23,386
(20,778) | (22,266) | (206,378) | (61,712) | |||
25,510 | 5,681 | 39,430 | (2,699) | |||
1,458 | (4) | 5,772 | (1,833) | |||
27,436 | (3,445) | (117,526) | (26,410) | |||
93,171 | 181,488 | 903,770 | 630,442 | |||
The accompanying notes 1 to 20 form an integral part of these condensed
consolidated interim financial statements.
2
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)
(Expressed in thousands of Saudi Riyal unless otherwise stated)
Note | Three-month period | Year ended | ||||||||||
ended December 31 | December 31 | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||
Profit for the period / year | ||||||||||||
attributable to: | ||||||||||||
Owners of the Company | 44,727 | 137,314 | 910,802 | 475,630 | ||||||||
Non-controlling interests | 21,008 | 47,619 | 110,494 | 181,222 | ||||||||
Profit for the period / year | 65,735 | 184,933 | 1,021,296 | 656,852 | ||||||||
Total comprehensive income | ||||||||||||
for the period / year | ||||||||||||
attributable to: | ||||||||||||
Owners of the Company | 75,070 | 136,372 | 825,858 | 462,797 | ||||||||
Non-controlling interests | 18,101 | 45,116 | 77,912 | 167,645 | ||||||||
Total comprehensive income | 93,171 | 181,488 | 903,770 | 630,442 | ||||||||
for the period / year | ||||||||||||
Earnings per share attributable to | ||||||||||||
the Owners of the Company | ||||||||||||
(in Saudi Riyals): | ||||||||||||
Basic and diluted | 12 | 0.08 | 0.26 | 1.71 | 0.89 |
The accompanying notes 1 to 20 form an integral part of these condensed
consolidated interim financial statements.
3
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
(Expressed in thousands of Saudi Riyal unless otherwise stated)
Equity attributable to the Owners of the Company
Effect of | |||||||||||
Shares | transactions | ||||||||||
held under | with non- | ||||||||||
employees' | controlling | ||||||||||
share | interests | Foreign | |||||||||
based | without | currency | Non- | ||||||||
Share | Share | payment | Statutory | General | Other | change in | translation | Retained | controlling | Total | |
capital | premium | plan | reserve | reserve | reserves | control | reserve | earnings | Total | interests | equity |
Balance at January | |||||||||
1, 2020 | 5,339,807 | 342,974 | -- | 1,774,085 | 4,000 | ||||
Total comprehensive | |||||||||
income / (loss) for the | |||||||||
year | |||||||||
Profit for the year | -- | -- | -- | -- | -- | ||||
Other comprehensive | -- | -- | -- | -- | -- | ||||
income / (loss) | |||||||||
-- | -- | -- | -- | -- | |||||
Charge for equity-settled | |||||||||
employees' share based | |||||||||
payment plan (note 7) | -- | -- | -- | -- | -- | ||||
Purchase of shares held | |||||||||
under employees' share | |||||||||
based payment plan | |||||||||
(note 7) | -- | -- | (16,509) | -- | -- | ||||
Dividends (Note 6) | -- | -- | -- | -- | -- | ||||
Balance at December | 5,339,807 | 342,974 | (16,509) | 1,774,085 | 4,000 | ||||
31, 2020 |
(179,230) | (187,979) | (1,792,396) | 2,288,979 | 7,590,240 | 948,830 | 8,539,070 | ||||||
-- | -- | -- | 910,802 | 910,802 | 110,494 | 1,021,296 | ||||||
83,234 | -- | (174,252) | 6,074 | (84,944) | (32,582) | (117,526) | ||||||
83,234 | -- | (174,252) | 916,876 | 825,858 | 77,912 | 903,770 | ||||||
1,411 | -- | -- | -- | 1,411 | -- | 1,411 | ||||||
-- | -- | -- | -- | (16,509) | -- | (16,509) | ||||||
-- | -- | -- | (160,194) | (160,194) | (85,310) | (245,504) | ||||||
(94,585) | (187,979) | (1,966,648) | 3,045,661 | 8,240,806 | 941,432 | 9,182,238 | ||||||
The accompanying notes 1 to 20 form an integral part of these condensed
consolidated interim financial statements.
4
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (AUDITED) (CONTINUED)
(Expressed in thousands of Saudi Riyal unless otherwise stated)
Equity attributable to the Owners of the Company
Effect of | |||||||||||||||||||||
transactions with | Foreign | ||||||||||||||||||||
non-controlling | currency | Non- | |||||||||||||||||||
Share | Share | Statutory | General | Other | interests without | translation | Retained | controlling | Total | ||||||||||||
capital | premium | reserve | reserve | reserves | change in control | reserve | earnings | Total | interests | equity | |||||||||||
Balance at January 1, 2019 | 5,339,807 | 342,974 | 1,774,085 | 4,000 | (198,084) | (187,979) | (1,744,616) | 1,797,256 | 7,127,443 | 894,498 | 8,021,941 | ||||||||||
Total comprehensive | |||||||||||||||||||||
income / (loss) for the | |||||||||||||||||||||
year | |||||||||||||||||||||
Profit for the year | -- | -- | -- | -- | -- | -- | -- | 475,630 | 475,630 | 181,222 | 656,852 | ||||||||||
Other comprehensive | -- | -- | -- | -- | 18,854 | -- | (47,780) | 16,093 | (12,833) | (13,577) | (26,410) | ||||||||||
income / (loss) | |||||||||||||||||||||
-- | -- | -- | -- | 18,854 | -- | (47,780) | 491,723 | 462,797 | 167,645 | 630,442 | |||||||||||
Dividends | -- | -- | -- | -- | -- | -- | -- | -- | -- | (113,313) | (113,313) | ||||||||||
Balance at December 31, | |||||||||||||||||||||
5,339,807 | 342,974 | 1,774,085 | 4,000 | (179,230) | (187,979) | (1,792,396) | 2,288,979 | 7,590,240 | 948,830 | 8,539,070 | |||||||||||
2019 |
The accompanying notes 1 to 20 form an integral part of these condensed
consolidated interim financial statements.
5
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Expressed in thousands of Saudi Riyal unless otherwise stated)
2020 | 2019 | ||
Cash flows from operating activities | |||
Profit for the year | 1,021,296 | 656,852 | |
Adjustments for: | |||
Depreciation and amortisation | 1,118,046 | 1,201,208 | |
Net finance cost | 541,481 | 686,662 | |
Share of results in investment in equity accounted investees, net of | |||
zakat and tax | (704,148) | (639,357) | |
Reversal of provision no longer required | (21,003) | (138,275) | |
Impairment loss | 49,550 | 72,738 | |
Share based payment expense | 1,411 | -- | |
(Gain) / loss on sale of property, plant and equipment | (962) | 1,971 | |
Zakat and income tax expense | 114,948 | 103,718 | |
2,120,619 | 1,945,517 | ||
Changes in: | |||
Inventories | (440,414) | (131,231) | |
Trade receivables | (97,504) | (138,263) | |
Prepayments and other receivables | (272,025) | (217,199) | |
Trade payables | 250,688 | (61,198) | |
Employee benefits | 46,184 | 48,565 | |
Accrued and other liabilities | 535,435 | 342,975 | |
Cash generated from operating activities | 2,142,983 | 1,789,166 | |
Finance cost paid | (268,703) | (397,320) | |
Zakat and income tax paid | (117,142) | (111,959) | |
Net cash from operating activities | 1,757,138 | 1,279,887 | |
Cash flows from investing activities | |||
Acquisition of property, plant and equipment | (464,064) | (374,295) | |
Proceeds from sale of property, plant and equipment | 7,939 | 41,504 | |
Net investment in FVTPL investments | 23,688 | 4,372 | |
Dividends received | 306,098 | 306,098 | |
Proceeds from investments | 14,097 | 41,138 | |
Net cash (used in) / generated from investing activities | (112,242) | 18,817 | |
Cash flows from financing activities | |||
Net change in loans and borrowings - current | (1,103,514) | (1,068,495) | |
Net change in loans and borrowings - non-current | 555,410 | 619,584 | |
Dividends paid | (160,025) | (2,406) | |
Payment of lease liabilities | (681,979) | (639,266) | |
Purchase of shares held under employees' share based payment | |||
plan | (16,509) | -- | |
Net changes in non-controlling interests | (85,310) | (113,313) | |
Net cash used in financing activities | (1,491,927) | (1,203,896) |
The accompanying notes 1 to 20 form an integral part of these condensed
consolidated interim financial statements.
6
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (CONTINUED) (Expressed in thousands of Saudi Riyal unless otherwise stated)
2020 | 2019 | ||
Net change in cash and cash equivalents | 152,969 | 94,808 | |
Effect of movement in exchange rates on cash and cash equivalents | (25,275) | (55,845) | |
Cash and cash equivalents at beginning of the year | 940,536 | 901,573 | |
Cash and cash equivalents at end of the year | 1,068,230 | 940,536 | |
Supplemental schedule of non-cash financial information: | |||
Fair value reserve | 84,808 | 18,854 | |
Foreign currency translation reserve | (206,378) | (61,712) | |
Actuarial reserve | 4,044 | 16,448 |
The accompanying notes 1 to 20 form an integral part of these condensed
consolidated interim financial statements.
7
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
1. GENERAL INFORMATION
Savola Group Company is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under Commercial Registration No. 4030019708 issued in Jeddah on Rajab 21, 1399H (corresponding to June 16, 1979). The Company was formed under the Regulations for Companies in the Kingdom of Saudi Arabia per Royal Decree number M/21 dated Rabi-ul-Awal 29, 1398H (March 9, 1978).
The Company's registered office is located at the following address:
Savola Tower,
The Headquarter Business Park, Prince Faisal Bin Fahad Street, Jeddah 23511-7333, Kingdom of Saudi Arabia.
These accompanying condensed consolidated interim financial statements comprise the financial statements of Savola Group Company (the "Company" (or) the "Parent Company") and its local and foreign subsidiaries (collectively referred as the "Group"), collectively involved in the manufacturing and sale of vegetable oils and to set up related industries, retail outlets, dairy products, fast foods, exports and imports, commercial contracting, trade agencies, development of agricultural products and real estate related investment activities.
At December 31, 2020, the Company had investments in the following subsidiaries (collectively referred to as the "Group"):
- Direct subsidiaries of the Company
- Operating subsidiaries
Country of | Principal | Direct ownership | ||
Subsidiary name | incorporation | business activity | interest (%) | |
December | December | |||
31, 2020 | 31, 2019 | |||
Savola Foods Company | ||||
("SFC") | Saudi Arabia | Foods | 100 | 100 |
Panda Retail Company | ||||
("Panda") | Saudi Arabia | Retail | 98.87 | 98.87 |
Good Food Company ("GFC") | Saudi Arabia | Holding company | 100 | 100 |
Al Matoun International for | ||||
Real Estate Investment Holding | ||||
Company | Saudi Arabia | Real Estate | 80 | 80 |
Restaurant & | ||||
manufacturing | ||||
Herfy Food Services Company | Saudi Arabia | bakery products | 49 | 49 |
8
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
1. GENERAL INFORMATION (continued)
- Direct subsidiaries of the Company (continued)
- Dormant and Holding subsidiaries
Country of | Principal business | Direct ownership | ||
Subsidiary name | incorporation | activity | interest (%) | |
December | December | |||
31, 2020 | 31, 2019 | |||
Adeem Arabia Company | Saudi Arabia | Holding company | 100 | 100 |
Al Utur Arabian Company for | ||||
Commercial Investment | Saudi Arabia | Holding company | 100 | 100 |
Al Matana Holding Company | Saudi Arabia | Holding company | 100 | -- |
Madarek Investment Company | Jordan | Holding company | 100 | 100 |
United Properties Development | ||||
Company | Saudi Arabia | Dormant company | 100 | 100 |
- Savola Foods Company
The Parent Company has a 100% (December 31, 2019: 100%) ownership interest in Savola
Foods Company ("SFC"), which was incorporated as a closed Saudi joint stock company pursuant to Ministerial Resolution No. 236/G dated Dhul Qadah 21, 1435H (September 16, 2014). Prior to its conversion to a closed joint stock company, SFC was operating as a limited liability company registered in the Kingdom of Saudi Arabia under commercial registration number 4030180782 issued in Jeddah on Rajab 05,1429H (July 08, 2008).
The principle objective of SFC is to deal in wholesale and retail trading of food items. SFC through its direct and indirect subsidiaries is engaged in the manufacturing, marketing and distribution of products including edible oil, pasta, sugar, seafood, confectionery, and agro cultivation, in the local and overseas market.
9
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
1. GENERAL INFORMATION (continued)
- Savola Foods Company (continued)
Subsidiaries controlled through Savola Foods Company:
Country of | Principal business | Direct ownership | ||
Subsidiary name | incorporation | activity | interest (%) | |
December | December | |||
31, 2020 | 31, 2019 | |||
Manufacturing of | ||||
Afia International Company ("AIC") | Saudi Arabia | edible oils | 95.19 | 95.19 |
Savola Industrial Investment | ||||
Company ("SIIC") | Saudi Arabia | Holding company | 100 | 100 |
El Maleka for Food Industries | Manufacturing of | |||
Company | Egypt | pasta | 100 | 100 |
El Farasha for Food Industries | Manufacturing of | |||
Company* | Egypt | pasta | -- | 100 |
Savola Foods Emerging Markets | British Virgin | |||
Company Limited | Islands (BVI) | Holding company | 95.43 | 95.43 |
Afia International Distribution and | Trading and | |||
Marketing Company | Saudi Arabia | distribution | 99 | 99 |
Savola Foods for Sugar Company | Cayman Islands | Holding company | 95 | 95 |
Savola Foods Company | United Arab | |||
International Limited | Emirates (UAE) | Holding company | 100 | 100 |
International Foods Industries | Manufacturing of | |||
Company Limited ("IFI") | Saudi Arabia | specialty fats | 100 | 100 |
Seafood International Two FZCO | Seafood products | |||
trading and | ||||
UAE | distribution | 60 | 60 | |
Afia Foods Arabia | Saudi Arabia | Dormant company | 100 | 100 |
Al Maoun International Holding | ||||
Company | Saudi Arabia | Holding company | 100 | 100 |
Marasina International Real Estate | ||||
Investment Limited | Saudi Arabia | Holding company | 100 | 100 |
Commodities Sourcing Company for | ||||
Trading | Saudi Arabia | Trading Company | 100 | -- |
- In line with the consolidation plans for pasta business, in January 2020, the Group has merged its operation of Pasta segment and consequently El Farasha for Food Industries Company has legally merged into El Maleka for Food Industries Company.
10
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
1. GENERAL INFORMATION (continued)
- Savola Foods Company (continued)
- Subsidiaries controlled through Afia International Company:
Country of | Principal business | Direct ownership | ||
Subsidiary name | incorporation | activity | interest (%) | |
December | December | |||
Savola Behshahr Company | 31, 2020 | 31, 2019 | ||
("SBeC") | Iran | Holding company | 90 | 90 |
Malintra Holdings | Luxembourg | Dormant company | 100 | 100 |
Savola Foods Limited ("SFL") | BVI | Holding company | 100 | 100 |
Afia International Company - | ||||
Jordan (under liquidation) | Jordan | Dormant company | 98.57 | 98.57 |
Inveskz Inc. | BVI | Holding company | 90 | 90 |
Afia Trading International | BVI | Dormant company | 100 | 100 |
Savola Foods International | BVI | Dormant company | 100 | 100 |
KUGU Gida Yatum Ve Ticaret A.S | ||||
("KUGU") | Turkey | Holding company | 100 | 100 |
Aseel Food - Hold Co. | Cayman Island | Holding company | 100 | 100 |
SBeC | ||||
Manufacturing of | ||||
Behshahr Industrial Company | Iran | edible oils | 79.9 | 79.9 |
Trading and | ||||
Tolue Pakshe Aftab Company | Iran | distribution | 100 | 100 |
Trading and | ||||
Savola Behshahr Sugar Company | Iran | distribution | 100 | 100 |
Manufacturing of | ||||
Food and | ||||
Notrika Golden Wheat Company | Iran | confectionery | 90 | 90 |
SFL | ||||
Manufacturing of | ||||
Afia International Company, Egypt | Egypt | edible oils | 99.95 | 99.95 |
KUGU | ||||
Savola Gida Sanayi Ve Ticaret | Manufacturing of | |||
Anonim Şirketi | Turkey | edible oils | 100 | 100 |
11
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
1. GENERAL INFORMATION (continued)
- Savola Foods Company (continued)
- Subsidiaries controlled through Savola Industrial Investment Company:
Country of | Principal business | Direct ownership | ||
Subsidiary name | incorporation | activity | interest (%) | |
December | December | |||
31, 2020 | 31, 2019 | |||
United Sugar Company | Manufacturing of | |||
("USC") | Saudi Arabia | sugar | 74.48 | 74.48 |
USC | ||||
Alexandria Sugar Company, | Egypt | Manufacturing of | 62.13 | 62.13 |
Egypt ("ASCE")* | sugar | |||
Beet Sugar Industries | Cayman Islands | Dormant company | 100 | 100 |
ASCE | ||||
Alexandria United Company | ||||
for Land Reclamation | Egypt | Agro cultivation | 100 | 100 |
c) Subsidiaries controlled through Savola Foods Emerging Markets Company Limited:
Manufacturing of | ||||
Savola Morocco Company | Morocco | edible oils | 100 | 100 |
Savola Edible Oils (Sudan) | Manufacturing of | |||
Ltd. | Sudan | edible oils | 100 | 100 |
Afia International Company - | Manufacturing of | |||
Algeria | Algeria | edible oils | 100 | 100 |
d) Subsidiaries controlled through Savola Foods Company International Limited:
Modern Behtaam Royan | Food and | |||
Kaveh Company | Iran | confectionery | 100 | 100 |
Middle East Technology | Cayman | |||
Ventures Limited | Island | Holding Company | 100 | -- |
e) Subsidiaries controlled through Al Maoun and Marasina | ||||
UAE | Trading and | |||
Alofog Trading DMMC | distribution | 100 | 100 |
- The effective ownership interest in ASCE is 71.66% (December 31, 2019: 71.66%)
12
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
1. GENERAL INFORMATION (continued)
- Panda Retail Company
The Parent Company has a 98.87% (December 31, 2019: 98.87%) ownership interest in Panda Retail Company ("Panda"), which was incorporated as a closed Saudi joint stock company pursuant to Ministerial Resolution No. 235/G dated Rajab 22, 1431H (July 3, 2010). Prior to its conversion to a closed joint stock company, Panda was operating as a limited liability company registered in the Kingdom of Saudi Arabia under commercial registration number 1010137417 issued in Riyadh on Rabi-ul-Awal 1, 1416H (July 28, 1995).
Panda together with its subsidiaries is principally engaged in wholesale and retail trading in food supplies and consumable materials. Panda Group operates through its network of hypermarkets and supermarkets.
Subsidiaries controlled through Panda: | ||||
Country of | Principal business | Direct ownership | ||
Subsidiary name | incorporation | activity | interest (%) | |
December | December | |||
31, 2020 | 31, 2019 | |||
Giant Stores Trading Company | Saudi Arabia | Retail | 100 | 100 |
Panda for Operations, | ||||
Maintenance and Contracting | Services and | |||
Services | Saudi Arabia | maintenance | 100 | 100 |
Panda International for Retail | ||||
Trading | Egypt | Retail | 100 | 100 |
Panda Bakeries Company | Saudi Arabia | Dormant company | 100 | 100 |
Giant | ||||
Lebanese Sweets and Bakeries | Saudi Arabia | Dormant company | 95 | 95 |
(IV) Good Food Company |
The Parent Company has a 100% (December 31, 2019: 100%) ownership interest in Good Food Company ("GFC"), which was incorporated as a limited liability company registered in the Kingdom of Saudi Arabia under commercial registration number 4030603674 issued in Jeddah on Rabi-ul-Thani 21, 1439H (January 8, 2018).
GFC through its direct and indirect subsidiaries is principally engaged in the processing, wholesale, retail and distribution of frozen food and seafood in the local and overseas markets.
13
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
1. GENERAL INFORMATION (continued)
(IV) Good Food Company (continued)
Subsidiaries controlled through GFC (collectively referred to as "Al Kabeer Group of companies"):
Country of | Principal | Ownership | ||
Subsidiary name | incorporation | business activity | interest (%) | |
December | December | |||
31, 2020 | 31, 2019 | |||
Manufacturing of | ||||
Variety Food Factory Company | Saudi Arabia | frozen food | 51 | 51 |
Trading and | ||||
Al Ahsan Trading Company | Saudi Arabia | distribution | 51 | 51 |
Al Helal Imports and Exports | Trading and | |||
Company | Bahrain | distribution | 51 | 51 |
Trading and | ||||
Sahar Enterprises Company | UAE | distribution | 51 | 51 |
Manufacturing of | ||||
Sahar Food Industry Company | UAE | frozen food | 51 | 51 |
Holding | ||||
Al Kabeer Holding Limited | UAE | Company | 51 | 51 |
Best Foodstuff Trading | Trading and | |||
Company | UAE | distribution | 51 | 51 |
Subsidiaries controlled through Al Kabeer Holding Limited:
Cascade Investments Limited | Investment | |||
(CIL) | UAE | company | 100 | 100 |
Manufacturing of | ||||
Cascade Marine Foods Company | UAE | frozen food | 100 | 100 |
Al Sabah Foodstuff Enterprises | Trading and | |||
Company | UAE | distribution | 100 | 100 |
Trading and | ||||
Best Foods Company* | Oman | distribution | 100 | -- |
CIL | ||||
Trading and | ||||
Best Foods Company* | Oman | distribution | -- | 100 |
- During December 2020, the ownership of Best Foods Company has been transferred from CIL to Al Kabeer Holding Limited.
2. BASIS OF PREPARATION
- Statement of compliance
The accompanying condensed consolidated interim financial statements of the Group have been prepared in accordance with the International Financial Reporting Standards for Interim Financial Reporting ("IAS 34") as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements that are issued by Saudi Organization for Certified Public Accountants (SOCPA) and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended December 31, 2019 ("last annual financial statements").
14
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
2. BASIS OF PREPARATION (continued)
- Statement of compliance (continued)
These financial statements do not include all of the information required for a complete set of IFRS financial statements, however, accounting policies and selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since last annual financial statements. - Accounting convention / Basis of Measurement
These condensed consolidated interim financial statements have been prepared using accrual basis of accounting, going concern concept and under the historical cost basis, except for investments other than those carried at amortized cost, firm commitments and inventory under fair value hedging relationship, derivative financial instruments, lease liabilities and employee benefits which are recognised at the present value of future obligation using the Projected Unit Method. Certain comparative amounts have been reclassified to conform to the current period's presentation. - Functional and presentation currency
These condensed consolidated interim financial statements are presented in Saudi Riyals (SR) which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
- Accounting convention / Basis of Measurement
- Critical accounting estimates and judgments
The preparation of these condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual consolidated financial statements. However, the Group has reviewed the key sources of estimation uncertainties disclosed in the last annual consolidated financial statements against the backdrop of COVID-19 pandemic. Management believes that other than the expected credit losses arising on the financial assets, impairment assessment on non- financial assets and certain actuarial assumptions for valuation of present value of defined benefit obligations, all other sources of estimation uncertainty remain similar to those disclosed in the annual consolidated financial statements. Management will continue to monitor the situation and any changes required will be reflected in future reporting periods.
15
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in the Group's annual consolidated financial statement as at and for the year ended December 31, 2019, except for the amendment to the basis of revenue recognition relating to the commercial and promotional income from the retail business. Such income has been reclassified to the cost of revenues after re-evaluating the contractual terms with the suppliers based on the interpretation of the IFRS 15 "Revenue from contracts with customers" and to align with related industry best practices. Further, during the year, the Group established a Long-Term Incentive Plan for its employees and applied the accounting policy as per the requirements of IFRS
2 "Share-based payment", as discussed below:
A. Commercial and promotional income
During the year ended December 31, 2020, the management has resolved that such income from suppliers that was historically recognised as part of revenues, does not necessarily represent a distinct performance obligation under interpretations of IFRS 15 "Revenue from contracts with customers". Accordingly, such income has now been recognised as a reduction of cost of revenue with retrospective application on the comparative amounts as per the requirements of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" in order to conform to the current presentation.
This adjustment did not have any impact on the Group's consolidated financial position as at December 31, 2019 or consolidated operating results including gross profit, net profit, basic or diluted earnings per share and consolidated cash flows for the year then ended. Consequently, the reported amounts of Revenues and Cost of revenues for the comparative period have been adjusted as follows:
Three-month period | Year | ||||||||||
ended December 31, 2019 | ended December 31, 2019 | ||||||||||
Previously | Effect of | Adjusted | Previously | Effect of | Adjusted | ||||||
Reported | adjustment | Amount | Reported | adjustment | Amount | ||||||
Revenues | 5,495,647 | (263,914) | 5,231,733 | 22,243,363 | (836,939) | 21,406,424 | |||||
Cost of revenues | (4,304,147) | 263,914 | (4,040,233) | (17,739,059) | 836,939 | (16,902,120) | |||||
Gross Profit | 1,191,500 | -- | 1,191,500 | 4,504,304 | -- | 4,504,304 |
A number of amendments to standards which are effective from January 1, 2020 and certain reclassifications made to the comparative amounts, do not have a material effect on these condensed consolidated interim financial statements.
-
Equity-settledshare-based payment
The grant-date fair value of equity-settledshare-based payment plan granted to employees is recognised as an expense on a straight-line basis in the statement of profit or loss, with a corresponding increase in equity as 'Other reserves', over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service conditions at the vesting date.
16
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
4. INVESTMENT IN EQUITY ACCOUNTED INVESTEES
The details of the Group's investment in equity accounted investees are as follows:
Principal | |||||||
Country of | business | Ownership | |||||
Name | incorporation | sector | interest (%) | Amount | |||
December | December | December December | |||||
31, 2020 | 31, 2019 | 31, 2020 | 31, 2019 | ||||
Fresh food | |||||||
Almarai Company | Saudi Arabia | products | 34.52 | 34.52 | 8,164,051 | 7,733,515 | |
Kinan International for | |||||||
Real Estate | |||||||
Development | |||||||
Company ("Kinan") | Saudi Arabia | Real estate | 29.9 | 29.9 | 388,514 | 400,856 | |
United Sugar Company, | Manufacturing | ||||||
Egypt ("USCE") * | Egypt | of sugar | 33.82 | 33.82 | 280,854 | 254,421 | |
Al-Seera City Company | |||||||
for Real Estate | |||||||
Development | Saudi Arabia | Real estate | 40 | 40 | 144,138 | 145,496 | |
United Edible Oils | Cayman | Holding | |||||
Holding Limited | Islands | company | 51 | 51 | 41,121 | 47,557 | |
Republic of | Fund | ||||||
Intaj Capital Limited | Tunisia | management | 49 | 49 | 13,046 | 27,143 | |
Knowledge Economic | |||||||
City Developers | |||||||
Company | Saudi Arabia | Real estate | 2.07 | 2.07 | 15,905 | 16,059 | |
Seafood | |||||||
Seafood International | products | ||||||
One FZCO | UAE | distribution | 40 | 40 | -- | -- | |
Seafood International | Cayman | Holding | |||||
Holdco. | Islands | Company | 50 | -- | 6,507 | -- | |
9,054,136 | 8,625,047 |
- The direct ownership interest of the Company in USCE is 10.62% (December 31, 2019: 10.62%).
5. | INVESTMENTS | |||
December 31, | December 31, | |||
2020 | 2019 | |||
Investments at fair value through other comprehensive income | ||||
(note 5.1) | 387,196 | 347,590 | ||
Investment at fair value through profit or loss | 2,828 | 26,516 | ||
390,024 | 374,106 |
17
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
5. INVESTMENTS (continued)
5.1 Investments at fair value through other comprehensive income
Principal | |||||||
business | Country of | Ownership | |||||
sector | incorporation | interest (%) | Amount | ||||
December | December | December | December | ||||
31, 2020 | 31, 2019 | 31, 2020 | 31, 2019 | ||||
Quoted investments | |||||||
Knowledge Economic City | Real Estate | Saudi Arabia | 6.4 | 6.4 | 258,033 | 215,897 | |
Emaar the Economic City | Real Estate | Saudi Arabia | 0.9 | 0.9 | 68,555 | 71,085 | |
Arab Phoenix Holdings | |||||||
Company | Real Estate | Jordan | 5 | 5 | -- | -- | |
Unquoted investments | |||||||
Investment | |||||||
Swicorp Company | Management | Saudi Arabia | 15 | 15 | 60,608 | 60,608 | |
Joussour Holding | |||||||
Company (under | Holding | ||||||
liquidation) | Company | Saudi Arabia | 14.81 | 14.81 | -- | -- | |
387,196 | 347,590 | ||||||
- SHARE CAPITAL AND DIVIDEND DECLARATION
At December 31, 2020 and December 31, 2019, the Group's share capital of SR 5.3 billion consists of 533.981 million fully paid shares of SR 10 each.
During the year ended December 31, 2020, the shareholders of the Company approved final dividend amounting to SR 160.19 million representing Saudi Riyal 0.30 per share in the annual general meeting held on April 29, 2020.
Subsequent to year end, the Company's Board of Directors have recommended final dividend amounting to SR 400.49 million representing Saudi Riyal 0.75 per share for the approval by the shareholders. - SHARE BASED PAYMENT PLAN
On April 29, 2020, the shareholders of the Company approved the Employees Long Term Incentive
Program ("Plan") for the benefit of certain eligible senior executives of the Group (the "Participants"). The Plan entitles the Participants a conditional right to receive a number of restricted share units (each unit equal to the value of one share of the Company at the Grant date), following the satisfaction of service condition.
Significant features of the Plan are as follows:
Description | Details |
Grant date | September 10, 2020 |
Total number of shares granted | 341,675 |
Service / vesting period | 3 years |
Fair value per share on grant date | SR 49 |
18 |
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
-
SHARE BASED PAYMENT PLAN (continued)
Fair value per share on grant date is the closing price per share on Tadawul as at the grant date.
The total expense recognised for employees' services received during the year ended December 31, 2020 under the Plan amounted to SR 1.4 million (December 31, 2019: SR Nil) and is included in
'salaries and employee related expenses' with a corresponding increase in the condensed consolidated statement of changes in equity under the 'Other reserves'.
During the year ended December 31, 2020, the Group purchased 341,675 treasury shares amounting to SR 16.5 million in connection with the Plan. This includes shares funded by certain subsidiaries that are held by the Company in fiduciary capacity until vesting. - STATUTORY RESERVE
In accordance with the Company's bylaws and the Regulations for Companies in the Kingdom of Saudi Arabia, the Company transfers 10% of the net income for the year to a statutory reserve until such reserve equals 30% of its share capital. Since the Company has reached the required reserve level, therefore, no additional transfers are required to be made.
The statutory reserve in the condensed consolidated interim financial statements is the statutory reserve of the Company. This reserve currently is not available for distribution to the shareholders of the Company. - LOANS AND BORROWINGS
The following information reflects the contractual terms of the Group's interest-bearing loans and borrowings, which are measured at amortized cost:
December 31, | December 31, | ||
2020 | 2019 | ||
Non-current liabilities | |||
Secured bank loans | 121,757 | 130,218 | |
Unsecured bond issues (Sukuk) (note 9.2) | 1,000,000 | 1,000,000 | |
Unsecured bank loans | 3,342,544 | 2,775,027 | |
4,464,301 | 3,905,245 | ||
Current liabilities | |||
Current portion of secured bank loans | 56,227 | 60,461 | |
Current portion of unsecured bank loans | 502,640 | 679,321 | |
Unsecured bond issues (Sukuk) (note 9.2) | -- | 993,000 | |
Secured bank loan | 21,084 | 69,700 | |
Unsecured bank loans | 1,739,467 | 1,799,495 | |
Bank overdraft | 116,597 | 37,273 | |
2,436,015 | 3,639,250 | ||
6,900,316 | 7,544,495 |
19
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
9. LOANS AND BORROWINGS (continued)
- These represent borrowings obtained from commercial banks and other financial institutions by the Parent Company and its subsidiaries. These borrowings are mainly in Saudi Riyals, Egyptian Pounds, Iranian Riyals, US Dollars, Algerian Dinar, Moroccan Dirham, Turkish Lira, United Arab Emirates Dirhams and Sudanese Pounds. Certain of these borrowings are secured by a charge on the property, plant and equipment of certain overseas subsidiaries. Certain loan agreements include covenants which, amongst other things, require certain financial ratios to be maintained. Some of the borrowings of subsidiaries are secured by corporate guarantees of the Parent Company. As at December 31, 2020, loans and borrowings include sharia-compliant financing facilities amounting to SR 5.9 billion (December 31, 2019: SR 6.5 billion).
- On January 22, 2013, the Group completed its initial offering by issuing Sukuk with a total value of SR 1.5 billion with a tenor of 7 years and carrying an expected variable return to the Sukuk- holders of 6 months SIBOR plus 1.10% payable semi-annually. The covenants required certain financial and other conditions to be complied during the tenure. The Sukuk had matured on January 22, 2020.
On July 9, 2019, the Group completed the offering of its new Sukuk, under the new program, with a total value of SR 1 billion with a tenor of 7 years and carrying an expected variable return to the Sukuk-holders of 6 months SIBOR plus 1.60% payable semi-annually. The Sukuk will mature on July 9, 2026. The issuance included SR 507 million of the previous Sukuk, that has been redeemed and exchanged.
- Property, plant and equipment amounting to SR 252 million (December 31, 2019: SR 286 million) of certain overseas subsidiaries of the Group are pledged as collateral with commercial banks.
- Inventories amounting to SR 98 million (December 31, 2019: SR 62 million) are pledged with foreign banks as collateral against the bank borrowing facilities of certain overseas subsidiaries.
- As at December 31, 2020, the Group has unused bank financing facilities amounting to SR 4.8 billion (December 31, 2019: SR 5.3 billion) to manage short term and long term liquidity requirements.
10. ZAKAT AND INCOME TAXES
- Zakat status
During the year 2019, the Company has finalised its Zakat status for the years 2005 to 2018. The General Authority for Zakat and Tax (GAZT) conducted a field audit on the Company's accounts for the years 2005 to 2012, and claimed additional Zakat difference of SR 85.8 million. Subsequently, the assessment was agreed with the GAZT Settlement Committee and the Company settled the liability with an amount of SR 10.2 million. Moreover, the years from 2013 to 2018 were also finalized based on the amended returns which resulted in an assessment of SR 5.4 million. During the year, the GAZT issued a revised claim for the previously finalized years from 2014 to 2018. The management is in the process of filing an objection against the said claim and believes that the settlement of the claim is not probable, therefore no provision has been recorded in these condensed consolidated interim financial statements. The Company has open years 1999 and 2000, for which there is an ongoing objection of SR 1.9 million against the assessment issued by GAZT.
20
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
10. ZAKAT AND INCOME TAXES (continued)
- Zakat status (continued)
Certain subsidiaries in the foods processing sector have also received final or provisional zakat certificates until the year 2019. Accordingly, payment plans have been pursued as per the agreement with GAZT and liabilities have been adjusted against the final settlement amounts. Further, the GAZT claimed additional zakat amounting to SR 63 million in relation to a subsidiary for certain years previously finalized. As a result of objection filed by the subsidiary against these claims, the GAZT issued a revised assessment with no additional liability.
Additionally, in one of the Group's subsidiaries, zakat accruals amounting to SR 21 million in relation to the assessment years 2008-2014 were reversed after considering the application of the statute of limitation under the regulations issued by the GAZT.
Also, the Group has pending appeals against assessments of certain subsidiaries with total Zakat differences of SR 7.8 million (December 31, 2019: approximately SR 8.2 million).
-
Income tax status
The Group's foreign subsidiaries are obliged to pay income tax as per applicable tax laws of their countries of incorporation. Tax paying foreign subsidiaries determine their liabilities based on applicable corporate rates to the adjusted taxable income for the year. Certain foreign subsidiaries are also obliged to pay quarterly advance tax determined on prior year tax liability bases.
Certain foreign subsidiaries have received final tax assessments for certain years and provisional tax assessments for other years. They have also received queries from departments of income tax after their assessment or inspections for open years, for which replies have been filed.
The Group management believes that there are no significant amounts under protest with departments of income tax in any foreign operation.
11. CONTINGENCIES AND COMMITMENTS
December 31, | December 31, | |
2020 | 2019 | |
Amounts in millions | ||
Letters of credits | 79 | 71 |
Bank guarantees | 86 | 180 |
Commitments to buy raw sugar | 252 | 189 |
Commitments to sell refined sugar | 450 | 333 |
Capital commitments | 47 | 70 |
Quantity in Metric tonnes | ||
Commitments to buy raw sugar | 211,134 | 174,752 |
Commitments to sell refined sugar | 243,655 | 199,744 |
21
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
12. EARNINGS PER SHARE
Basic earnings per share for the year ended December 31, 2020 and December 31, 2019 have been computed by dividing the net profit attributable to shareholders of the Parent Company for such periods by the weighted average number of shares outstanding 533.874 million (December 31, 2019: 533.981 million) during such periods.
Diluted earnings per share for the year ended December 31, 2020 and December 31, 2019, have been computed by dividing the profit attributable to shareholders of the Parent Company for such periods by the weighted average number of shares outstanding adjusted for the effects of all dilutive potential ordinary shares i.e. 533.981 million (December 31, 2019: 533.981 million).
Weighted average number of ordinary shares for the purpose of computing basic earnings per share are as follows:
Year ended December 31, | |||
2020 | 2019 | ||
Issued ordinary shares | 533,980,700 | 533,980,700 | |
Effect of treasury shares (note 7) | (106,423) | -- | |
Weighted average number of ordinary shares outstanding | 533,874,277 | 533,980,700 |
13. RELATED PARTIES
Related parties include the Group's shareholders, associates and affiliated companies, other entities related to certain consolidated subsidiaries and key management personnel of the Group. Terms and conditions of these transactions are approved by the Group's management.
Transactions with key management personnel Key management personnel compensation
Compensation to the Group's key management personnel includes salaries, non-cash benefits, and post-employment benefits. The Group has recognised an expense of SR 31.0 million for the year ended December 31, 2020 (December 31, 2019: SR 32.5 million).
Board of Directors' remuneration for the year ended December 31, 2020 amounting to SR 2.2 million (December 31, 2019: SR 2.1 million) has been calculated in accordance with the Company's By-laws and is charged to the consolidated statement of profit or loss. Attendance allowances and other expenses to the directors and members of various board committees amounting to SR 2.4 million (December 31, 2019: SR 3.0 million) are charged to expenses and included under administrative expenses.
Other related party transactions
A number of companies transacted with the Group during the period. The terms and conditions of these transactions were no more favourable than those available, or which might reasonably be expected to be available, in similar transactions with non-key management personnel related companies on arm's length basis.
All outstanding balances with these related parties are priced on an arm's length basis and are to be settled in cash within agreed credit period from the date of transaction. None of the balances are secured. No expense has been recognised in the current or prior period for bad or doubtful debts in respect of amounts owed by related parties.
22
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
13. RELATED PARTIES (continued)
The aggregate value of related parties' transactions and outstanding balances including those related to key management personnel, and entities over which they have control or significant influence are as follows:
Nature of | Amount of | ||||||
Name | Relationship | transactions | transactions | Closing balance | |||
December 31 | December | December | |||||
2020 | 2019 | 31, 2020 | 31, 2019 | ||||
Due from related parties - Trade receivables | |||||||
Certain shareholders of | Shareholders of | ||||||
USC | a subsidiary | Trade | 165,721 | 131,021 | 19,506 | 14,295 | |
Certain shareholders of | Shareholders of | ||||||
AIC | a subsidiary | Trade | 75,889 | 70,744 | 17,761 | 21,305 | |
Almarai | Associate | Trade | 33,778 | 49,256 | 4,476 | 1,495 | |
Western Bakeries | |||||||
Company Limited | Affiliate | Trade | 41,796 | 63,377 | 3,068 | 5,449 | |
USCE | Associate | Trade | 2,626 | -- | -- | -- | |
Others | -- | 475 | -- | 590 | |||
44,811 | 43,134 | ||||||
Due from related parties - Prepayments and other receivables | |||||||
Khairat AlSharq for | |||||||
General Trade and | |||||||
Manufacturing | |||||||
Foodstuff Company | Affiliate | Non-trade | 963 | 19,853 | 21,590 | 22,322 | |
Seafood International | |||||||
Holdco. | Joint venture | Non-trade | -- | -- | -- | 6,011 | |
Al Mehbaj Al | |||||||
Shamiyah Trading | |||||||
Company | Affiliate | Non-trade | 8,507 | 7,399 | 3,078 | 3,159 | |
Seafood International | |||||||
One | Affiliate | Non-trade | 2,728 | 147 | -- | -- | |
Waste Collection & | |||||||
Recycling Company | Affiliate | Non-trade | 5,494 | 5,945 | 1,241 | 3,060 | |
Zohoor Alreef | Affiliate | Non-trade | 335 | 482 | 374 | 174 | |
Intaj Capital Limited | Associate | Non-trade | 14,097 | 6,819 | -- | -- | |
Arabian Centers | |||||||
Company | Affiliate | Non-trade | 34,726 | 52,200 | -- | -- | |
26,283 | 34,726 | ||||||
23
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
13. RELATED PARTIES (continued)
Nature of | Amount of | ||||||||||
Name | Relationship | transactions | transactions | Closing balance | |||||||
December 31 | December | December | |||||||||
2020 | 2019 | 31, 2020 | 31, 2019 | ||||||||
Due to related parties - Trade payables | |||||||||||
Almarai | Associate | Trade | 813,686 | 753,422 | 109,769 | 100,516 | |||||
Nestle Group | Affiliate | Trade | 345,209 | 383,240 | 38,563 | 41,152 | |||||
Mayar Food Company | Affiliate | Trade | 105,880 | 134,736 | 22,454 | 38,243 | |||||
Del Monte Saudi Arabia | |||||||||||
Limited | Affiliate | Trade | 131,639 | 70,807 | 8,152 | 5,943 | |||||
Al Mehbaj Al Shamiyah | |||||||||||
Trading Company | Affiliate | Trade | 25,800 | 22,806 | 3,714 | 3,676 | |||||
USCE | Associate | Trade | 23,455 | 14,167 | 29 | -- | |||||
Seafood International | |||||||||||
One | Affiliate | Trade | 17,204 | 28,465 | 9,375 | -- | |||||
Al Manhal Water | |||||||||||
Factory Company | |||||||||||
Limited | Affiliate | Trade | 5,834 | 5,798 | 1,493 | 1,157 | |||||
Al Jazirah Dates & Food | |||||||||||
Factory | Affiliate | Trade | 32 | 164 | 52 | 29 | |||||
Others | -- | 17,379 | -- | 1,112 | |||||||
193,601 | 191,828 | ||||||||||
Due to related parties - Accrued and other liabilities | |||||||||||
USCE | Associate | Non-trade | 34,709 | 49,061 | 73,937 | 52,935 | |||||
Abdul Kader Al | |||||||||||
Muhaidib & Sons Co. | Shareholder | Non-trade | 7,200 | 6,783 | -- | 6,517 | |||||
Kinan | Associate | Non-trade | 33,497 | 31,377 | 295 | -- | |||||
Dur Hospitality | |||||||||||
Company | Affiliate | Non-trade | 10,500 | -- | -- | -- | |||||
Del Monte Saudi Arabia | Affiliate | Non-trade | 555 | 3,300 | -- | -- | |||||
74,232 | 59,452 | ||||||||||
24
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
14. OPERATING SEGMENTS
The Group has five reportable segments, as described below, which are the Group's strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group's Chief Executive Officer (Chief Operating Decision Maker) reviews internal management reports on at least quarterly basis. The following summary describes the operations in each of the Group's reportable segments:
Food processing - includes manufacturing, sale and distribution of Edible oils, Sugar, Pasta and food products.
Retail - includes hyper markets, supermarkets and convenience stores operations.
Food services - includes food products and fast food restaurants' chain operated by Herfy.
Frozen Food - includes manufacturing, wholesale and retail distribution of frozen food products operated by Good Food Company.
Investments - includes real estate activities, investments in equity-accounted investees and other investments.
The segments which do not meet any of the quantitative thresholds for determining reportable segments in 2020 and 2019, are classified as "Others / Eliminations", which mainly include the eliminations.
Performance is measured based on segment profit net of income tax and zakat, as included in the internal management reports. Management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis. Information regarding the results of each reportable segment is included below:
Reportable Segments | |||||||||||||||||||||||
Food | Food | Frozen | Others / | ||||||||||||||||||||
December 31, 2020 | Processing | Retail | services | Foods | Investments | Eliminations | Total | ||||||||||||||||
External revenues | 8,377,952 | 11,610,718 | 1,034,114 | 677,707 | -- | -- | 21,700,491 | ||||||||||||||||
Inter segment revenue | 265,607 | 2,581 | 40,519 | 59,090 | 36,077 | (403,874) | -- | ||||||||||||||||
Segment Revenue | 8,643,559 | 11,613,299 | 1,074,633 | 736,797 | 36,077 | (403,874) | 21,700,491 | ||||||||||||||||
Cost of revenues | (7,356,237) | (8,775,749) | (828,161) | (472,423) | -- | 367,797 | (17,064,773) | ||||||||||||||||
Segment net profit / (loss) | 311,172 | 71,866 | 50,963 | 97,993 | 459,677 | (80,869) | 910,802 | ||||||||||||||||
Segment assets | 7,236,506 | 7,237,700 | 1,965,556 | 1,002,298 | 14,105,839 | (4,524,403) | 27,023,496 | ||||||||||||||||
Segment liabilities | 5,068,215 | 6,291,209 | 987,723 | 721,669 | 5,562,595 | (790,153) | 17,841,258 | ||||||||||||||||
Reportable Segments | |||||||||||||||||||||||
Food | Food | Frozen | Others / | ||||||||||||||||||||
December 31, 2019 | Processing | Retail | services | Foods | Investments | Eliminations | Total | ||||||||||||||||
External revenues | 8,904,804 | 10,655,964 | 1,259,294 | 586,362 | -- | -- | 21,406,424 | ||||||||||||||||
Inter segment revenue | 304,409 | 3,802 | 29,016 | 33,693 | 43,599 | (414,519) | -- | ||||||||||||||||
Segment Revenue | 9,209,213 | 10,659,766 | 1,288,310 | 620,055 | 43,599 | (414,519) | 21,406,424 | ||||||||||||||||
Cost of revenues | (7,864,325) | (8,115,341) | (895,673) | (397,702) | -- | 370,921 | (16,902,120) | ||||||||||||||||
Segment net profit / (loss) | 292,380 | (342,412) | 194,354 | 62,368 | 397,779 | (128,839) | 475,630 | ||||||||||||||||
Segment assets | 6,870,235 | 7,510,918 | 2,033,463 | 910,403 | 13,648,202 | (4,315,510) | 26,657,711 | ||||||||||||||||
Segment liabilities | 4,578,329 | 6,648,725 | 1,035,109 | 704,236 | 5,796,953 | (644,711) | 18,118,641 | ||||||||||||||||
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SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
15. HYPERINFLATIONARY ACCOUNTING
The Group has been closely monitoring the economic conditions in Iran and reviewing qualitative considerations prescribed in IAS 29 - Financial Reporting in Hyperinflationary Economies to establish if the country is under hyperinflation and accordingly the reported amounts of their local operations needs to be adjusted for changes in Consumer Price Index (CPI). Among other consumer behaviours; a significant deterioration in the value of Iranian Rial against USD in foreign exchange markets has also been observed over last three years. Moreover, during the period ended September 30, 2020 the cumulative inflation rate over three years also exceeded 100 percent. In this regard, a reference has been made to inflation data published on International Monetary Fund website by World Economic Outlook and the Statistical Centre of Iran.
The Group has applied the requirements of IAS 29 in preparing and presenting its condensed consolidated interim financial statements for the year ended December 31, 2020. Furthermore, the Group has operations in Sudan through its subsidiary Savola Edible Oils (Sudan) Ltd., which had been declared as hyperinflationary economy by International Accounting Standard Board (IASB) in 2018, accordingly, the requirements of IAS 29 also remains applicable for the Group's Sudan operations.
The main effects on the Group's condensed consolidated interim financial statements due to hyperinflationary accounting (which includes both indexing up and using of closing exchange rate) for the years ended December 31 are as follows:
Year ended December 31, 2020 | |||
Iran | Sudan | Total | |
Revenue (decreased) / increased by | (83,388) | 31,093 | (52,295) |
Profit for the year (decreased) / increased by | (5,278) | 4,758 | (520) |
Total non-current assets increased by | 94,728 | 825 | 95,553 |
Currency translation differences impacted by | 92,671 | (4,134) | 88,537 |
Year ended December 31, 2019 | |||
Iran | Sudan | Total | |
Revenue decreased by | -- | (23,934) | (23,934) |
Profit for the year decreased by | -- | (12,697) | (12,697) |
Total non-current assets decreased by | -- | (1,443) | (1,443) |
Currency translation differences impacted by | -- | 8,162 | 8,162 |
The conversion factors used for the CPI adjustment for the year ended are given below:
December | December | |
31, 2020 | 31, 2019 | |
Conversion factor for Iran | 1.4570 | -- |
Conversion factor for Sudan | 3.6244 | 1.5908 |
26
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
16. FINANCIAL RISK MANAGEMENT
- Accounting classification and fair values
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.
When measuring the fair value of an asset or liability, the Group uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or liability falls into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest input level that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. During the year ended December 31, 2020 and December 31, 2019, there were no transfers between fair value categories of level 1 and level 2.
As the Group's financial instruments are compiled under the historical cost convention, except for investments and derivative financial instruments which are carried at fair values, differences can arise between the book values and fair value estimates. Management believes that the fair values of the Group's financial assets and liabilities are not materially different from their carrying values.
The following table shows the carrying amount and fair values of the financial assets and financial liabilities, including their levels and fair value hierarchy. It doesn't include fair value information for financial assets and financial liabilities not measured at fair value if the carrying value is a reasonable approximation of fair value.
27
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
16. FINANCIAL RISK MANAGEMENT (continued)
- Accounting classification and fair values (continued)
Carrying amount | Fair Value | ||||||||||||||||||||
Mandatorily | Designated | Fair value | |||||||||||||||||||
at FVTPL - | at fair | hedging | |||||||||||||||||||
December 31, 2020 | others | value | instruments | FVOCI | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets measured | |||||||||||||||||||||
at fair value | |||||||||||||||||||||
Investment at fair value | |||||||||||||||||||||
through profit or loss | 2,828 | -- | -- | -- | 2,828 | -- | -- | 2,828 | |||||||||||||
Future exchange contracts | |||||||||||||||||||||
used for hedging | -- | -- | 30,399 | -- | -- | 30,399 | -- | 30,399 | |||||||||||||
Other future exchange | |||||||||||||||||||||
contracts | -- | -- | -- | -- | -- | -- | -- | -- | |||||||||||||
Call option | -- | 2,311 | -- | -- | -- | -- | 2,311 | 2,311 | |||||||||||||
Equity securities (Note 5) | -- | -- | -- | 387,196 | 326,588 | -- | 60,608 | 387,196 | |||||||||||||
2,828 | 2,311 | 30,399 | 387,196 | 329,416 | 30,399 | 62,919 | 422,734 | ||||||||||||||
Financial liabilities | |||||||||||||||||||||
measured at fair value | |||||||||||||||||||||
Future exchange contracts | |||||||||||||||||||||
used for hedging | -- | -- | 70,521 | -- | -- | 70,521 | -- | 70,521 | |||||||||||||
Other future exchange | |||||||||||||||||||||
contracts | -- | 127,239 | -- | -- | -- | 127,239 | -- | 127,239 | |||||||||||||
Put option | -- | 190,562 | -- | -- | -- | -- | 190,562 | 190,562 | |||||||||||||
-- | 317,801 | 70,521 | -- | -- | 197,760 | 190,562 | 388,322 | ||||||||||||||
Carrying amount | Fair Value | ||||||||||||||||||||
Mandatorily | Fair value | ||||||||||||||||||||
at FVTPL - | Designated | hedging | |||||||||||||||||||
December 31, 2019 | others | at fair value | instruments | FVOCI | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets measured | |||||||||||||||||||||
at fair value | |||||||||||||||||||||
Investment at fair value | |||||||||||||||||||||
through profit or loss | 26,516 | -- | -- | -- | 26,516 | -- | -- | 26,516 | |||||||||||||
Future exchange contracts | |||||||||||||||||||||
used for hedging | -- | -- | 15,606 | -- | -- | 15,606 | -- | 15,606 | |||||||||||||
Other future exchange | |||||||||||||||||||||
contracts | -- | 24,364 | -- | -- | -- | 24,364 | -- | 24,364 | |||||||||||||
Call option | -- | 1,999 | -- | -- | -- | -- | 1,999 | 1,999 | |||||||||||||
Equity securities (Note 5) | -- | -- | -- | 347,590 | 286,982 | -- | 60,608 | 347,590 | |||||||||||||
26,516 | 26,363 | 15,606 | 347,590 | 313,498 | 39,970 | 62,607 | 416,075 | ||||||||||||||
Financial liabilities | |||||||||||||||||||||
measured at fair value | |||||||||||||||||||||
Interest rate swaps used for | |||||||||||||||||||||
hedging | -- | -- | 547 | -- | -- | 547 | -- | 547 | |||||||||||||
Future exchange contracts | |||||||||||||||||||||
used for hedging | -- | -- | 52,303 | -- | -- | 52,303 | -- | 52,303 | |||||||||||||
Other future exchange | |||||||||||||||||||||
contracts | -- | 13,883 | -- | -- | -- | 13,883 | -- | 13,883 | |||||||||||||
Put option | -- | 188,094 | -- | -- | -- | -- | 188,094 | 188,094 | |||||||||||||
-- | 201,977 | 52,850 | -- | -- | 66,733 | 188,094 | 254,827 |
28
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
16. FINANCIAL RISK MANAGEMENT (continued)
- Measurement of fair values
Valuation technique and significant unobservable inputs
The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair value, as well as significant unobservable input used.
Financial instruments measured at fair value
Valuation | Significant | |
Type | technique | unobservable inputs |
Equity securities | Market comparison | Price Earnings |
technique. PE | Multiples, Price to | |
multiple, Price to | Book value and Price to | |
Book value. | Tangible Book Value. | |
Future contracts | Broker quotes | Not applicable |
Call and put | Black Scholes | Strike price |
option | Model | Volatility of Sugar |
index | ||
Spot price (fair value) |
Inter-relationship between significant unobservable inputs and fair value measurements
Not applicable
Not applicable
Increase in fair value will decrease the Put Option and increase the Call option values.
Increase in volatility index will increase the value of Put and Call options.
Interest rate | |||
swaps | DCF | Not applicable | Not applicable |
17. CAPITAL MANAGEMENT
The Group's objective when managing capital is to safeguard the Group's ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and to maintain a strong capital base to support the sustained development of its businesses.
The Group manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders or issue new shares. The Group also monitors capital using a leverage ratio, which is net debt, interest bearing loans and borrowings including finance cost thereon, trade and other payables, less cash and bank balances. The leverage ratio as at December 31, 2020 and December 31, 2019 is as follows:
29
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
17. CAPITAL MANAGEMENT (continued) | |||||||
December 31, | December 31, | ||||||
2020 | 2019 | ||||||
Total liabilities | 17,841,258 | 18,118,641 | |||||
Less: Cash and cash equivalents | (1,068,230) | (940,536) | |||||
Adjusted net debt | 16,773,028 | 17,178,105 | |||||
Total equity | 9,182,238 | 8,539,070 | |||||
Less: Hedging reserve | (4,019) | 547 | |||||
Adjusted equity | 9,178,219 | 8,539,617 | |||||
Adjusted net debt to adjusted equity ratio | 1.83 | 2.01 |
18. AMENDMENTS TO STANDARDS AND STANDARDS ISSUED AND NOT YET EFFECTIVE
There are no new standards issued, however, the adoption of the following amendments to the existing standards had no significant financial impact on the condensed consolidated interim financial statements of the Group on the current period or prior periods and is expected to have no significant effect in future periods:
- Amendments to References to Conceptual Framework in IFRS Standards;
- Definition of a Business (Amendment to IFRS 3);
- Definition of Material (Amendment to IAS 1 and IAS 8); and
- Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
PRONOUNCEMENTS ISSUED AND NOT YET EFFECTIVE
A number of new pronouncements are effective for annual periods beginning on or after January 1, 2021 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these condensed consolidated interim financial statements.
- IFRS 17 Insurance Contracts.
- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
19. IMPACT OF COVID-19
The existence of novel coronavirus (COVID-19) was confirmed in early 2020 and has spread across multiple geographies, causing disruptions to businesses and economic activity. In response to the spread of COVID-19 and its resulting disruptions to the social and economic activities, the Group's management has assigned a task force to assess and monitor the possible impact on its business in Saudi Arabia and other geographies where Group operates. The management has also taken a series of preventive measures to ensure the health and safety of its employees, customers and wider community as well as to ensure the continuity of its operations. The Group's retail, food processing and frozen food segments have reported favorable results and consequently management believes that COVID-19 had limited impact on the reported financial position and results for the year ended December 31, 2020.
30
SAVOLA GROUP COMPANY (A Saudi Joint Stock Company)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the year ended December 31, 2020
(Expressed in thousands of Saudi Riyal unless otherwise stated)
-
IMPACT OF COVID-19 (continued)
Currently, many countries, including countries where the Group is operating, are constantly addressing the continued increase in recorded cases of COVID-19 and the implications to the economy. COVID-19 is an evolving situation, the Group is monitoring closely any material impacts to the operations and continuity of business activities. The priority of the Group remains to protect the health, safety and welfare of employees, customers, and partners, as well as support the Government and its agencies as they work to reduce the impact of the outbreak
At this stage, the Group is unable to reliably estimate the future impact of COVID-19, given the lack of certainty on possible end date of the pandemic or vaccination of large part of community that could continue impacting the world economies. However, the Group is constantly monitoring the situation through its Task Force given with the responsibility to constantly access developing events, mitigate as much as possible negative impact and steer the organisation towards adapting to current realities. Accordingly, the potential risks around supply of material, manpower, inventory levels and minimum interruptions to the production facilities across all geographies are being constantly monitored and the stakeholders are being kept informed for any material deviations on a timely basis. - DATE OF AUTHORISATION FOR ISSUE
These financial statements were authorized for issue by the Company's Board of Directors on 14 Jumada Al-Thani 1442H, corresponding 27 January 2021.
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SAVOLA Group Company SJSC published this content on 28 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 February 2021 09:25:01 UTC.