Savola : 2021 4rd Quarter Results

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"):

1. Direct subsidiaries of the Company
2. 1. 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)

1. Direct subsidiaries of the Company (continued)
2. 1. 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

1. 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)

1. 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)

1. Savola Foods Company (continued)
2. 1. 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)

1. Savola Foods Company (continued)
2. 1. 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)

1. 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

1. 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)

1. 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.
2. 1. 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.
   2. 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.
3. 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.

1. 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

1. 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.
2. 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)

1. 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.
2. 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.
3. 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)

1. 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).
2. 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.

1. 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.
2. 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.
3. 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

1. 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)

1. 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).

1. 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

25

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

1. 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)

1. 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)

1. 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)

1. 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.
2. 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.

31