Notes forming part of accounts [line items] | | |
Disclosure of notes and other explanatory information [text block] | | |
Disclosure of general information about reporting entity [abstract] | | |
Disclosure of general information about reporting entity [text block] |
GENERAL
Saudi Tadawul Group Holding Company (formerly “Saudi Stock Exchange Company”) (the Company) is a Saudi joint stock company registered in the Kingdom of Saudi Arabia under Commercial Registration number 1010241733 dated 2/12/1428 H (corresponding to 12 December 2007). The Company was established by the Royal Decree no. M/15 dated 01/03/1428 H (corresponding to 20 March 2007) and the Ministry of Commerce resolution no. 320/k dated 1/12/1428 H (corresponding to 11 December 2007).
On 1 June 2021, the Company announced its restructuring which resulted in transforming the Saudi Stock Exchange Company (Tadawul) into a holding company under the name of Saudi Tadawul Group Holding Company, a parent company of four wholly owned subsidiaries; Saudi Exchange Company (Exchange), Securities Clearing Center Company (Muqassa), the Securities Depository Center Company (Edaa), and Tadawul Advance Solution Company (Wamid). The details of these subsidiaries are given in note 1.1. From 1 June 2021, the operations of the Company, that included listing, trading and dissemination of securities information were transferred to Exchange.
The Company was wholly owned by the Government of the Kingdom of Saudi Arabia (the “Government”) as ultimate controlling party through the Public Investment Fund (“PIF” or “Parent”). On 8 December, 2021, the Company completed its Initial Public Offering (“IPO”) and its ordinary shares were listed on the Saudi Stock Exchange. In connection with the IPO, the Government through PIF sold 30% of their stake representing 36 million ordinary shares. On 13 November 2022, PIF sold an additional 10% of their stake representing 12 million ordinary shares. Accordingly, PIF now holds 60% (31 December 2021: 70%) of the share capital. As at 31 December 2022, the authorized, issued and fully paid-up share capital of the Company is SAR 1,200 million (31 December 2021: SAR 1,200 million) divided into 120 million shares (31 December 2021: 120 million shares) of SAR 10 each.
These consolidated financial statements comprise the financial statements of the Company and its subsidiaries (collectively referred to as “the Group”).
The Company’s main activities, after becoming a holding company, are managing and supporting subsidiaries or participating in the management of other companies in which it owns shares, investing its funds in shares and other securities, owning real estate and other properties in connection with its businesses, granting loans, guarantees and financing to its subsidiaries, and owning and leasing industrial property rights to its subsidiaries or other companies.
The Group’s main activities through dedicated subsidiaries (given in note 1.1) is to provide a listing service, create and manage the mechanisms of trading of securities, providing depository and registration services for securities ownership, clearing of securities trades, dissemination of securities information and engage in any related other activity to achieve the objectives as defined in the Capital Market Law.
The Company’s registered office address is as follows:
6897 King Fahd Road - Al Olaya Unit Number: 15 Riyadh 12211-3388 Kingdom of Saudi Arabia
GENERAL (CONTINUED)
Details of the Company’s subsidiaries:
Name of subsidiaries | Country of incorporation & legal status |
Commercial registration dated | Business activity | Ownership, direct and effective | Paid up share capital | December 2022 | December 2021 |
Securities Depository Center Company (“Edaa”)
| Kingdom of Saudi Arabia, Closed Saudi Joint Stock Company |
27/11/1437 H (corresponding to 30 August 2016 G) |
Depository and registration of securities |
100% |
100% |
400,000,000 | Securities Clearing Center Company (“Muqassa”)
| Kingdom of Saudi Arabia, Closed Saudi Joint Stock Company |
02/06/1439 H (corresponding to 18 February 2018 G) | Clearing services of securities | 100% | 100% | 600,000,000 | Tadawul Advance Solution Company (“Wamid”)
| Kingdom of Saudi Arabia, Closed Saudi Joint Stock Company |
10/02/1442 H (corresponding to 28 September 2020 G) | Financial technology solutions, innovative capital market solutions for stakeholders | 100% | 100% | 75,000,000 | Saudi Exchange Company (“Exchange”) | Kingdom of Saudi Arabia, Closed Saudi Joint Stock Company
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17/08/1442 H (corresponding to 31 March 2021G) | Listing and trading of securities, market information dissemination | 100% | 100% | 600,000,000 |
Details of the Company’s associates:
Name of associates | Country of incorporation & legal status |
Commercial registration dated | Business activities | Ownership, direct and effective | Paid up share capital | December 2022 | December 2021 |
Tadawul Real Estate Company (“TREC”) | Kingdom of Saudi Arabia, Limited Liability Company | 22/02/1433 H (corresponding to 17 January 2012 G) | Buying, selling, renting, managing and operating real estate facilities | 33.12% | 33.12% | 1,280,000,000 | Regional Voluntary Carbon Market Company (“RVCM”), refer Note 6.2 | Kingdom of Saudi Arabia, Limited Liability Company | 28/03/1444 H (corresponding to 24 October 2022 G) | Active market and Auction for Carbon Credits | 20% | - | 175,000,000
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Disclosure of information about major activities of reporting entity [text block] |
The Company’s main activities, after becoming a holding company, are managing and supporting subsidiaries or participating in the management of other companies in which it owns shares, investing its funds in shares and other securities, owning real estate and other properties in connection with its businesses, granting loans, guarantees and financing to its subsidiaries, and owning and leasing industrial property rights to its subsidiaries or other companies.
The Group’s main activities through dedicated subsidiaries (given in note 1.1) is to provide a listing service, create and manage the mechanisms of trading of securities, providing depository and registration services for securities ownership, clearing of securities trades, dissemination of securities information and engage in any related other activity to achieve the objectives as defined in the Capital Market Law. | |
Disclosure of major shareholders of reporting entity [text block] |
The Company was wholly owned by the Government of the Kingdom of Saudi Arabia (the “Government”) as ultimate controlling party through the Public Investment Fund (“PIF” or “Parent”). On 8 December, 2021, the Company completed its Initial Public Offering (“IPO”) and its ordinary shares were listed on the Saudi Stock Exchange. In connection with the IPO, the Government through PIF sold 30% of their stake representing 36 million ordinary shares. On 13 November 2022, PIF sold an additional 10% of their stake representing 12 million ordinary shares. Accordingly, PIF now holds 60% (31 December 2021: 70%) of the share capital. As at 31 December 2022, the authorized, issued and fully paid-up share capital of the Company is SAR 1,200 million (31 December 2021: SAR 1,200 million) divided into 120 million shares (31 December 2021: 120 million shares) of SAR 10 each. | |
Disclosure of basis of preparation of financial statements [abstract] | | |
Disclosure of statement of compliance [text block] |
2.1 Statement of compliance
These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements that are issued by Saudi Organization for Chartered and Professional Accountants (“SOCPA”) and in compliance with the provisions of the Companies’ Law in the Kingdom of Saudi Arabia and the By-laws of the Company. | |
Disclosure of basis of measurement [text block] |
2.2 Basis of measurement
These consolidated financial statements have been prepared on historical cost basis, except for financial assets measured at fair value through profit or loss which are measured at fair value and employees’ end-of-service benefits which are measured at the present value of future obligations using projected unit credit method. | |
Disclosure of functional and presentation currency [text block] |
2.3 Functional and presentation currency
These consolidated financial statements are presented in Saudi Arabian Riyals (“SAR”), which is the functional and presentational currency of the Group and its subsidiaries and associates. All amounts have been rounded to the nearest SAR.
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Disclosure of basis of consolidation of financial statements [text block] |
3.2Basis of consolidation
These consolidated financial statements comprise the financial statements of Saudi Tadawul Group Holding Company and its subsidiaries (collectively referred to as “the Group”). Control is achieved of the Group is exposed to or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: the contractual arrangement with the other vote holders of the investee; rights arising from other contractual arrangements; and the Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group obtains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group losses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in the consolidated statement of income. Any investment retained is recognised at fair value. | |
Disclosure of critical accounting judgements, estimates and assumptions [abstract] | | |
Disclosure of critical accounting judgements, estimates and assumptions, general [text block] |
2.4 Critical accounting estimates and judgments
The preparation of these consolidated financial statements in conformity with the International Financial Reporting Standards (“IFRS”) as endorsed in the Kingdom of Saudi Arabia is requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, profit and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about material assumptions and estimation uncertainties are included in:
- Impairment of investment in associates: As referred to in note 3.7 of these consolidated financial statements, the Group estimates the recoverable amount of its investment for the assessment of impairment. To compute the recoverable amount of investment in associates, the Group applies its judgement in determining the recoverable amount. Based on the evaluation, the Group has concluded that there are no impairment indicators as at year end.
- Valuation of the employees’ end-of-service benefits liability: The costs of defined benefit plans are determined using actuarial valuations. The actuarial valuation involves making assumptions, which are reviewed annually. Key assumptions include discount rates, future salary increases, employee turnover and mortality rates. Due to the complexity of the valuation, the underlying assumptions and the long-term nature of these plans, such estimates are subject to significant uncertainty. Information about amounts reported in respect of defined benefit plans, assumptions applicable to the plans and their sensitivity to changes are presented in note 14. Allowance of expected credit losses are probability-weighted estimate of credit losses. Loss rates are calculated using "roll rate" method based on the probability of a trade debt progressive through successive stages of delinquency to calculate the weighted average loss rate. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. Impairment of property and equipment, intangible and right-of-use assets refer note 3.6 Revenue recognition on time or over period of time refer note 3.11
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Disclosure of summary of significant accounting policies [abstract] | | |
Description of accounting policy for cash and cash equivalents [text block] |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash at banks in current accounts and other short-term liquid investments with original maturities of three months or less and that are subject to an insignificant risk of changes in value, if any, which are available to the Group without any restrictions. | |
Description of accounting policy for current/ non-current classification [text block] |
Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current / non-current classification. An asset is classified as current when:
-expected to be realised or Intended to be sold or consumed in the normal operating; -held primarily for the purpose of trading; -expected to be realised within twelve months after the reporting period; or -cash or cash equivalent, unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
-it is expected to be settled in the normal operating cycle; -it is held primarily for the purpose of trading; -it is due to be settled within twelve months after the reporting period; or -there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
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Description of accounting policy for financial assets [text block] |
Recognition and initial measurement:
Account receivables are in initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is an account receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. An account receivable without a significant financing component is initially measured at the transaction price.
Classification and subsequent measurement of financial assets:
The classification and measurement of financial assets is set out below:
amortised cost; fair value through other comprehensive income (FVOCI) – debt investment; fair value through other comprehensive income (FVOCI) – equity investment; or fair value through profit or loss (FVTPL)
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
Financial assets at amortized cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: it is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Investments in debt securities which meet the above conditions, cash and cash equivalents, accounts receivable and other receivables are carried at amortized cost. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.3Financial instruments (continued)
ii. Classification and subsequent measurement of financial assets: (continued)
Financial assets at FVOCI
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL: it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
Financial assets at FVTPL
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Investments in units of mutual funds are carried at FVTPL.
Financial assets – Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes: the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets; how the performance of the portfolio is evaluated and reported to the Group’s management; the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.3Financial instruments (continued)
ii. Classification and subsequent measurement of financial assets: (continued)
Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:
contingent events that would change the amount or timing of cash flows; terms that may adjust the contractual coupon rate, including variable-rate features; prepayment and extension features; and terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual paramount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
The following accounting policies apply to the subsequent measurement of financial assets.
Financial assets at FVTPL | These assets are subsequently measured at fair value. Fair value changes including any interest or dividend, are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. | Financial assets at amortised cost | These assets are recognized initially at cost and subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest profit, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. | Debt investments at FVOCI | These assets are subsequently measured at fair value. Interest income is calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Fair value changes are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss. | Equity investments at FVOCI | These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Fair value changes are recognised in OCI and are never reclassified to profit or loss. |
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Financial instruments (continued)
Classification and measurement of financial liabilities
Financial liabilities are measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss, unless they are required to be measured at fair value through profit or loss. The Group measure all financial liabilities at amortised cost except employees’ end-of-service benefit liability.
Derecognition
Financial assets A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognized) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in OCI is recognized in profit or loss.
Financial liabilities A financial liability is derecognized when its contractual obligations are discharged or cancelled or expired.
Offsetting
Financial assets and liabilities are offset and reported net in the statement of financial position when there is a currently legally enforceable right to set off the recognised amounts and when the Group intends to settle on a net basis, or to realise the asset and settle the liability simultaneously. Profit and expenses are not being offset in the statement of profit or loss unless required or permitted by any accounting standard or interpretation, and as specifically disclosed in the accounting policies of the Group. | |
Description of accounting policy for associates and joint ventures [text block] |
Investments in investment in associates
An associate is an entity over which the Group has significant influence, but not control or joint control. Significant influence is the power to participate in the financial and operating policy decisions of the investee.
Investments in associates are accounted for using the equity method and are recognized initially at cost. The consolidated financial statements include the Group’s share of the profit or loss and equity movements of associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associates, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Group has a corresponding obligation.
After application of the equity method, the Group determines whether it is necessary to recognize an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is any objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the loss in the profit and loss.
Unrealised gains arising from transactions associates are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. | |
Description of accounting policy for property, plant and equipment [text block] |
Property and equipment
Property and equipment except land are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Land is measured at its cost.
The cost include expenditure directly attributable to the acquisition of the asset including the cost of purchase and any other costs directly attributable to bringing the assets to a working condition for their intended use. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.
When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.4 Property and equipment (continued)
The cost of replacing part of an item of operating fixed assets is recognized in the carrying amount of the item if it is probable the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The cost of the day-to-day servicing of operating fixed assets are recognized in the profit or loss as incurred.
An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the assets (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognized.
Depreciation Depreciation is calculated over depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property and equipment except for the land and capital work-in-progress. Depreciation of an asset begins when it is available for use.
The estimated useful lives for current and comparative periods of different items of property and equipment are as follows:
| Estimated |
| useful lives (years) | Building | 30 | Furniture and fixtures | 10 | Computers | 4 | Office equipment | 6 | Vehicles | 4 |
Depreciation methods, useful lives, impairment indicators and residual values are reviewed at each annual reporting date and adjusted, if appropriate. | |
Description of accounting policy for intangible assets [text block] |
Intangible assets
These represent software held for use in the normal course of business and are stated at cost less accumulated amortization and accumulated impairment losses, if any. Amortization is charged to profit or loss over an estimated useful lives of the software using the straight-line method. The estimated useful lives of softwares ranges from 4 to 10 years.
Work-in-progress is stated at cost until the development of software is complete and installed. The software is developed by third parties to the Group’s specification. Upon the completion and installation, the cost together with cost directly attributable to development and installation are capitalized to the intangibles. No amortization is charged on work-in-progress.
An item of intangible asset is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the assets (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognized. | |
Description of accounting policy for impairment of financial and non-financial assets [text block] |
Impairment of financial assets
IFRS 9 uses the ‘expected credit loss’ (ECL) model to assess the impairment of financial assets. The impairment model applies to financial assets measured at amortised cost and contract assets but not to investments in equity instruments.
The expected credit loss shall be measured and provided either at an amount equal to (a) 12 month expected losses; or (b) lifetime expected losses. If the credit risk of the financial instrument has not increased significantly since inception, then an amount equal to 12 month expected loss is provided. In other cases, lifetime credit losses shall be provided. For trade receivables with a significant financing component, a simplified approach is available, whereby an assessment of increase in credit risk need not be performed at each reporting date. Instead, the Group can choose to provide for the expected losses based on lifetime expected losses. The Group has chosen to avail the option of lifetime expected credit losses ("ECL''). For trade receivables with no significant financing component, the Group is required to follow lifetime ECL.
The Group recognizes loss allowances for Expected Credit Losses (ECLs) on: - financial assets measured at amortised cost; and - contract assets
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.3 Financial instruments (continued)
vi. Impairment of financial assets (continued)
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-months ECLs: - debt instruments that are determined to have low credit risk at the reporting date; and - other debt instruments and bank balances for which credit risk has not increased significantly since initial recognition.
Loss allowances for accounts receivables and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the group’s historical experience and informed credit assessment, that includes forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Group considers a financial asset to be in default when: - the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realizing security (if any is held); or - the financial asset is more than 90 days past due.
Measurement of ECLs ECLs are probability-weighted estimate of credit losses. Loss rates are calculated using "roll rate" method based on the probability of a trade debt progressive through successive stages of delinquency to calculate the weighted average loss rate. These rates are multiplied by scalar factors to reflect the difference between economic conditions during the period over which the historical data has been collected, current conditions and the Company's view of economic conditions over the expected lives of the receivables. Credit losses for financial assets other than trade receivables which are current in nature are measured as the present value of all cash shortfalls (i.e. the difference between the cashflows due to the entity in accordance with the contract and the cashflows that the Group expects to receive.)
ECLs are discounted at the effective interest rate of the financial asset.
Presentation of allowance for ECL in statement of financial position Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Impairment losses related to accounts receivables and investments at amortized cost are presented in profit or loss.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off The gross carrying amount of a financial asset is written-off when the group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group has a policy of writing off the gross carrying amount when: - the customer has been deemed bankrupt; - the customer seized to exist as a legal entity; or - the group negotiated a partial payment where the rest of the outstanding balance will be written - off Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”, or “CGU”).
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.6 Impairment of non-financial assets (continued)
The Group’s corporate assets do not generate separate cash inflows. Therefore, a corporate asset is not tested for impairment as an individual asset on a stand-alone basis, unless management has decided to dispose of the asset. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. A portion of a corporate asset is allocated to a CGU when the allocation can be done on a reasonable and consistent basis.
When a portion of a corporate asset cannot be allocated to a CGU on a reasonable and consistent basis, two levels of impairment tests are carried out.
- The first test is performed at the individual CGU level without the corporate asset (bottom-up test), and any impairment loss is recognized. - The second test is applied to the minimum collection of CGUs to which the corporate asset can be allocated reasonably and consistently (top-down test).
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. | |
Description of accounting policy for foreign currencies [text block] |
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate ruling at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the reporting year. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on the retranslation of FVOCI instruments, which are recognized in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. | |
Description of accounting policy for provisions [text block] |
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost in profit or loss. | |
Description of accounting policy for employees' terminal benefits [text block] |
Employees’ end-of-service benefits liability
Employees’ end-of-service benefits are payable to all employees employed under the terms and conditions of the labor laws applicable to the Group.
The Group’s net obligation in respect of employees’ end-of-service benefits is calculated by estimating the amount of future benefits that employees have earned in the current and prior periods. That benefit is discounted to determine its present value.
Re-measurements, comprising of actuarial gains and losses, are recognized immediately in the consolidated statement of financial position with a corresponding debit or credit to retained earnings through other comprehensive income, in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods
The Group recognises the following changes in the defined benefits obligation under ‘operating cost’ and ‘general and administrative expenses’ in the profit and loss account:
The calculation of defined benefits obligation is performed annually by a qualified actuary using the projected unit credit method. | |
Description of accounting policy for zakat [text block] |
Zakat
The Group is subject to Zakat in accordance with the Zakat regulation issued by the General Authority for Zakat and Tax (“ZATCA”) in the Kingdom of Saudi Arabia. Zakat is recognized in the consolidated statement of profit or loss. Zakat is levied at a fixed rate of 2.5% of the zakat base as defined in the Zakat regulations.
Additional zakat calculated by ZATCA, if any, related to prior years is recognized in the year in which final declaration is issued. | |
Description of accounting policy for statutory reserves [text block] |
In accordance with the Company’s by-law and Saudi Arabian Regulations for Companies in the Kingdom of Saudi Arabia, the Company is required to set aside 10% of its net profit each year as statutory reserve. The shareholder in the extraordinary general assembly held on 17th August 2021 has decided to discontinue setting aside such percentage when said reserve reaches 30% of paid-in capital. The Company has reached the required reserve level. The statutory reserve in the consolidated financial statements is the statutory reserve of the Company. This reserve is currently not available for distribution to the shareholders of the Company. | |
Description of accounting policy for revenue recognition [text block] |
Revenue recognition
The main source of the Group’s revenue is through fees for services provided. Revenue is measured based on the consideration specified in a contract with a customer.
The Group recognises revenue under IFRS 15 using the following five steps model:
Step 1: Identify the contract with customer | A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
| Step 2: Identify the performance obligations | A performance obligation is a promise in a contract with a customer to transfer a good or deliver a service to the customer.
| Step 3: Determine the transaction price | The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or deliver services to a customer, excluding amounts collected on behalf of third parties.
| Step 4: Allocate the transaction price | For a contract that has more than one performance obligation, the Group allocates the transaction price to each performance obligation in an amount that depicts the total consideration to which the Group is entitled in exchange for satisfying each performance obligation.
| Step 5: Recognise revenue
| The Group recognises revenue (or as) it satisfies a performance obligation by transferring a promised good or deliver a service to the customer under a contract.
|
The revenue recognition policies for revenue streams under each operating segment are set out below:
Capital Markets
Revenues in the Capital Markets segment are generated from Primary and Secondary market services.
A.1 Primary market initial listing and the ongoing listing services represent a performance obligation from initial listing and additional issuances at over period of time. The Group recognizes the revenue at the time of admission and additional issuance. All initial listing fees are billed to the listed company at the time of admission and become payable when invoiced.
A.2 Primary market annual listing fees, secondary markets membership and subscription fees are collected semi-annually and are recorded as contract liabilities (deferred revenue) and subsequently recognized in profit or loss on a straight line basis over the period of twelve months to which the fee relates, as it reflects the extent of the Group’s progress towards completion of the performance obligation under the contract.
A.3 Secondary market trading and associated capital market services are recognised as revenue on a per transaction basis at the point the service is provided.
A.4 Derivative market trading and associated capital market services are recognised as revenue on a per transaction basis at the point the service is provided.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue recognition (continued)
Post Trade
Revenues in the post trade segment are generated from clearing, settlement, custody and other post trade services.
B.1Clearing, settlement and custody services generate fees from trades or contracts cleared and settled and custody services which are recognised as revenue at a point in time when the Group meets its obligations to complete the transaction or service. In cases where the Group’s performance obligations related to custody services are completed over time, revenue is recognised on a straight-line basis, representing the continuous delivery of services over the period. In cases where there is a fixed annual fee for a service, the revenue is recognised overtime and billed on annual basis.
B.2Other post trade services include revenue from registry services which is collected annually at the start of the year and is recorded as contract liabilities (deferred revenue) and is subsequently recognized in profit or loss on a straight line basis over the period to which the fee relates, as it reflects the extent of the Group’s progress towards completion of the performance obligation under the contract.
Data and technology services
The Data and technology services segment generates revenues from the provision of information and data products including, benchmarks and customized indices, real-time market data, reference data and analytics services.
C.1 Data subscription and index license fees are recognised over the license or usage period as the Group meets its obligation to deliver data consistently throughout the license period. Services are billed on a monthly or annual basis.
C.2Co-location services offer trading participants the opportunity to co-locate their services and rent server space within the Company’s data center to ensure the lowest latency route possible to Saudi Tadawul Group’s trading services and products. This revenue is recognised over time, consistent with the pattern of the service provision and how the performance obligation is satisfied throughout the contract period.
C3. Other information services include licenses to the regulatory news service and reference data businesses. Revenue from licenses that grant the right to access intellectual property are recognised over time, consistent with the pattern of the service provision and how the performance obligation is satisfied throughout the license period.
Other fees
These fees are generated from the provision of events and media services, and are typically recognised as revenue at the point the service is rendered and becomes payable when invoiced.
Dividend income.
Dividend income recognized when the right to receive is established.
Commission income.
Special commission income recognized in profit or loss on an effective yield basis. | |
Description of accounting policy for general and administrative expenses [text block] |
Expenses
General and administrative expenses are those arising from the Group’s efforts underlying the marketing, consultancy, administrative and maintenance functions. Costs that relate directly to operations are classified as operating cost. Allocations of common expenses between operating costs and general and administrative expenses, when required, are made on a consistent basis. | |
Description of accounting policy for accounting of leases [text block] |
Right-of-use assets and lease liabilities
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of identified asset for a period of time in exchange for consideration.
As a lessee:
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred at and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate.
Lease liabilities include the net present value of the following lease payments:
- fixed payments (including in-substance fixed payments), less any lease incentives receivable; - variable lease payments that are based on an index or a rate; - amounts expected to be payable by the lessee under residual value guarantees; - the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and - payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Short-term leases and leases of low-value assets
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise small items relating to office equipment.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.17 Right-of-use assets and lease liabilities (continued)
The lease liability is measured at amortised cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. | |
Description of accounting policy for fair value measurement [text block] |
Fair value measurement
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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The fair value of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 —Quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 2 —Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 3 —Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
At each reporting date, management of the Group analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.16Fair value measurement (continued)
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.
If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures assets and long positions at a bid price and liabilities and short positions at an ask price. The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price – i.e. the fair value of the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out. | |
Description of accounting policy for financial liabilities[text block] |
Financial liabilities A financial liability is derecognized when its contractual obligations are discharged or cancelled or expired. | |
Description of other accounting policies relevant to understanding of financial statements [text block] |
Contingent liabilities
All possible obligations arising from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly with the control of the Group; or all present obligations arising from past events but not recognized because: (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or (ii) the amount of the obligation cannot be measured with sufficient reliability. All are assessed at reporting date and disclosed in the Group’s consolidated financial statements under contingent liabilities. | |
Disclosure of new and amended standards and interpretations [text block] |
3.1New standards and amendments issued
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Various amendments apply for the first time in 2022, but do not have an impact on the consolidated financial statements of the Group. Amendment to IFRS 16, ‘Leases’ – COVID-19 related rent concessions extension of the practical expedient (effective for annual periods beginning on or after 1 April 2021). A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16 (effective for annual periods beginning on or after 1 January 2022): Amendments to IFRS 3, ‘Business combinations’ update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. Amendments to IAS 16, ‘Property, plant and equipment’ prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related cost in statement of income. Amendments to IAS 37, ‘Provisions, contingent liabilities and contingent assets’ specify which costs a company includes when assessing whether a contract will be loss-making. Annual improvements make minor amendments to IFRS 1, ‘First-time Adoption of IFRS’, IFRS 9, ‘Financial Instruments’, IAS 41, ‘Agriculture’ and the Illustrative Examples accompanying IFRS 16, ‘Leases’.
Standards and amendments issued and not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s consolidated financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
Effective for annual financial periods beginning on or after | Standard, amendment or interpretation | Summary of requirements | 1 January 2024
| Amendments to IAS 1, Presentation of financial statements’, on classification of liabilities | These narrow-scope amendments to IAS 1, ‘Presentation of financial statements’, clarify that liabilities are classified as either current or noncurrent, depending on the rights that exist at the end of the reporting period. | 1 January 2023 | Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8 | The amendments aim to improve accounting policy disclosures and to help users of the financial statements to distinguish between changes in accounting estimates and changes in accounting policies. | 1 January 2023 | Amendment to IAS 12- deferred tax related to assets and liabilities arising from a single transaction | These amendments require companies to recognize deferred tax on transactions that, on initial recognition give rise to equal amounts of taxable and deductible temporary differences. | 1 January 2023 | IFRS 17, ‘Insurance contracts’, as amended in June 2020 | This standard replaces IFRS 4, which currently permits a wide variety of practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with discretionary participation features. | 1 January 2023 | Amendments to IAS 8 - Definition of Accounting Estimates | The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates. | 1 January 2024 | Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback | The amendments require seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognise any amount of the gain or loss that relates to the right of use it retains. |
| |
Disclosure of other notes forming part of accounts [abstract] | | |
Disclosure of bank balances and cash [text block] |
CASH AND CASH EQUIVALENTS
| Notes | 31 December 2022 |
| 31 December 2021 | Cash at banks – current accounts |
| 49,821,541 |
| 76,197,458 | Deposit with SAMA | 12.1 | 16,500,000 |
| 10,000,000 | Time deposits with original maturities equal to or less than three month from the date of acquisition | 12.2 | 2,052,504,555 |
| - |
|
| 2,118,826,096 |
| 86,197,458 |
12.1 Commission is earned on deposit with SAMA at the prevailing market rates offered by SAMA.
12.2 These time deposits are placed with financial institutions in the Kingdom of Saudi Arabia with original maturities of less than three months. Commission is also earned on these time deposits as per the prevailing market rates. | |
Disclosure of financial assets [text block] |
INVESTMENTS
Investment securities portfolios are summarized as follows:
|
Notes | 31 December 2022 |
| 31 December 2021 | Non-current |
|
|
|
| Investments at amortized cost | 8.1 | 55,809,077 |
| 55,272,377 |
|
| 55,809,077 |
| 55,272,377 | Current |
|
|
|
| Investments at amortized cost | 8.1 | - |
| 101,292,699 | Investments at FVTPL | 8.2 | 618,569,219 |
| 2,530,440,109 |
|
| 618,569,219 |
| 2,631,732,808 |
8.1Investments at amortized cost:
This represents investment in Sukuks issued by counterparties operating in the Kingdom of Saudi Arabia having sound credit ratings. The Sukuks carry an average commission rate of 4.3% per annum as of 31 December 2022 (31 December 2021: 2.4% - 2.5%).
INVESTMENTS (CONTINUED)
The details of these investments are as follow:
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Investment in Sukuk – Bank Albilad (Credit rating A3) | 55,809,283 |
| 55,286,298 | Investment in Sukuk – GACA (Credit rating A) | - |
| 101,325,640 | Impairment loss on investments at amortized cost (8.1.1) | (206) |
| (46,862) | Total | 55,809,077 |
| 156,565,076 |
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Investment at amortized cost – non current | 55,809,077 |
| 55,272,377 | Investment at amortized cost – current | - |
| 101,292,699 | Total | 55,809,077 |
| 156,565,076 |
8.1.1 The movement of the expected credit losses on investments held at amortized cost is summarized as follows:
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Balance as at 1 January | 46,862 |
| 43,865 | (Reversal) / charge for the year | (46,656) |
| 2,997 | Balance as at 31 December | 206 |
| 46,862 |
Below is the break-up of investment at amortized cost:
31 December 2022 Description | Maturity date | Face value | Classification | Bank Albilad SAR Denominated Tier 2 | 15 April 2031 | 55,000,000 | Non-current asset |
31 December 2021 Description | Maturity date | Face value | Classification | General Authority of Civil Aviation (GACA) | 18 January 2022 | 100,000,000 | Current asset | Bank Albilad SAR Denominated Tier 2 | 15 April 2031 | 55,000,000 | Non-current asset |
8.2 Investments at fair value through profit or loss (“FVTPL”)
This represents investments in units of mutual funds which are governed by the regulation issued by the CMA. The cost and fair value of investments held at FVTPL are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 31 December 2022 |
| 31 December 2021 | |
| Cost |
| Fair value |
| Cost |
| Fair value | Money market funds | 594,704,109 |
| 610,812,003 |
| 2,464,606,786 |
| 2,499,724,667 | Real estate funds | 20,250,000 |
| 7,757,216 |
| 40,000,000 |
| 30,715,442 | Total | 614,954,109 |
| 618,569,219 |
| 2,504,606,786 |
| 2,530,440,109 |
| |
Disclosure of trade account receivables [text block] |
ACCOUNTS RECEIVABLE
| Notes | 31 December 2022 |
| 31 December 2021 | Accounts receivable: |
|
|
|
| - Related parties | 30 | 13,558,085 |
| 11,652,168 | - Others |
| 76,901,108 |
| 74,691,162 | Less: allowance for expected credit losses | 9.1 | (26,110,800) |
| (25,795,719) | Total |
| 64,348,393 |
| 60,547,611 |
Receivable balances are non-commission bearing and have payment terms ranging from immediate to thirty days.
9.1 The movement in the allowance for expected credit losses is summarized as follows:
| Note | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Balance as at 1 January |
| 25,795,719 |
| 26,613,594 | Charge / (reversal) for the year | 25 | 315,081 |
| (817,875) | Balance as at 31 December |
| 26,110,800 |
| 25,795,719 |
| |
Disclosure of prepayments [text block] |
PREPAID EXPENSES AND OTHER CURRENT ASSETS
| Note | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Advance against purchase of property | 10.1 | 77,500,000 |
| 77,500,000 | Prepaid insurance expenses |
| 10,997,526 |
| 7,920,038 | Accrued operational revenue |
| 6,589,018 |
| 9,064,755 | Advance to employees |
| 5,020,765 |
| 5,404,641 | Prepaid maintenance expenses |
| 8,064,317 |
| 2,744,593 | Other receivables |
| 7,933,818 |
| 5,425,592 | Total |
| 116,105,444 |
| 108,059,619 |
10.1 This represents an advance paid to SAMA as partial payment for purchasing part of a property in King Abdullah Financial District.
10.2Other receivable balances are non-commission bearing and have payment terms ranging from immediate to thirty days. | |
Disclosure of other current assets [text block] |
11. CLEARING PARTICIPANT FINANCIAL ASSETS
Financial assets at amortised cost: | Notes | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Deposits with Saudi Central Bank (SAMA) | 11.1 | 3,061,369,467 |
| 18,013,567 | Investment in SAMA Bills | 11.2 | 999,308,737 |
| - |
|
| 4,060,678,204 |
| 18,013,567 |
11.1 Deposits with Saudi Central Bank (SAMA):
This represents cash collateral received from clearing participants in the form of initial margin, variation margin and default funds for the equity and derivatives markets. Commission is earned on such deposits at the prevailing market rates offered by SAMA. A portion of the commission is recorded as commission income from SAMA deposits in investment income (refer note 26) by the Group and the clearing members’ share of the commission earned is added to their collateral accounts. These funds are not available for use in the operations of the Group.
CLEARING PARTICIPANT FINANCIAL ASSETS (CONTINUED)
11.1 Deposits with Saudi Central Bank (SAMA):
|
| 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Deposits with SAMA - relating to Equities markets |
| 3,030,450,725 |
| - | Deposits with SAMA - relating to Derivatives markets |
| 30,918,742 |
| 18,013,567 |
|
| 3,061,369,467 |
| 18,013,567 |
11.2 Investment in SAMA Bills:
| Note | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Investment in SAMA Bills | 11.2.1 | 999,308,737 |
| - |
11.2.1 These represent investment in SAMA Bills from deposits received from clearing participants in the form of initial margin, variation margin and default funds for the equity and derivatives markets. Commission is earned on such Bills at the prevailing market rates offered by SAMA. A portion of the commission is recorded as commission income from SAMA Bills in investment income (refer note 26) by the Group and the clearing members’ share of the commission earned is added to their collateral accounts. These funds are not available for use in the operations of the Group.
As of each reporting date, all deposits with SAMA and SAMA Bills are assessed to have low credit risk as these are placed/issued by Government sovereign financial institutions and there has been no history of default with any of the Group’s deposit and investments in bills. Therefore, the probability of default based on forward looking factors and any loss given defaults are considered to be negligible. | |
Disclosure of investment in joint ventures and associates [text block] |
INVESTMENTS IN ASSOCIATES
| Notes | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Investment in Tadawul Real Estate Company (“TREC “) | 6.1 | 365,697,523 |
| 375,616,085 | Investment in Regional Voluntary Carbon Company (“RVCMC”) | 6.2 | 35,000,000 |
| - | Total |
| 400,697,523 |
| 375,616,085 |
6.1 Investment in TREC
This represents the Group’s share of investment in TREC, a company incorporated in the Kingdom of Saudi Arabia, where the Company has significant influence through voting rights. As at 31 December 2022, the Group owns 33.12% (31 December 2021: 33.12%) of the share capital of TREC. The main activities of this associate is to develop a commercial office tower in King Abdullah Financial District, Riyadh, where the Group expects to be headquartered. The Group has recognized its share of loss for the year ended 31 December 2022, based on the management accounts of the associate.
The movement in carrying value of investment is as follows:
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Balance as at 1 January | 375,616,085 |
| 378,895,293 | Share of results | (9,918,562) |
| (3,279,208) | Balance as at 31 December | 365,697,523 |
| 375,616,085 |
The following table summarizes the financial information of the associate as included in the management accounts as at 31 December 2022 and audited financial statements as at 31 December 2021:
| 31 December 2022 |
| 31 December 2021 | Summarized statement of financial position |
|
|
| Total current assets | 32,825,683 |
| 86,103,297 | Total non-current assets | 2,282,712,671 |
| 2,233,751,094 | Total current liabilities | 85,461,524 |
| 1,073,045,160 | Total non-current liabilities | 1,062,846,629 |
| 49,595,898 | Net assets (100%)* | 1,167,230,201 |
| 1,197,213,333 |
*During the year ended 31 December 2020, the Group has increased its share of investment in TREC from 20% to 33.12% and has recorded its increased share of results from there on. The Group’s share in net asset value of TREC if calculated directly from TREC outstanding net asset value has to be adjusted for this transaction to arrive at the carrying amount of investment as presented in the consolidated financial statements of the Group.
| For the year ended 31 December 2022 |
| For the year ended 31 December 2021 | Summarized statement of profit or loss and other comprehensive income |
|
|
| Total revenue | - |
| - | Net loss | (29,983,133) |
| (9,900,948) | Total comprehensive loss for the year | (29,983,133) |
| (9,900,948) |
|
|
|
|
INVESTMENT IN ASSOCIATES (CONTINUED)
6.2 Investment in RVCMC
This represents the Group’s share of investment in RVCMC, a company incorporated in the Kingdom of Saudi Arabia on 25 October 2022. RVCMC offers guidance and resourcing to support businesses and industries in the region as they play their part in the global transition to net zero, ensuring that carbon credit purchases go above and beyond meaningful emission reductions in value chains. The RVCMC’s capital amounts to SAR 500 million (paid up capital SAR 175 million), where PIF holds 80% stake and the Company holds 20% stake. RVCMC is headquartered in Riyadh, Kingdom of Saudi Arabia.
The movement of investment carrying value is as follows:
| For the year ended 31 December 2022 |
| For the year ended 31 December 2021 |
|
|
|
| Investments made during the year | 35,000,000 |
| - |
| |
Disclosure of property, plant and equipment [text block] |
| Notes | Land | Buildings | Furniture and fixtures | Computers | Office equipment | Vehicles | Capital work-in-progress | Total | Cost: |
|
|
|
|
|
|
|
|
| Balance as at 1 January 2021 |
| 2,310,985 | 618,248 | 19,985,449 | 118,338,359 | 18,744,035 | 1,656,350 | 2,003,775 | 163,657,201 | Additions |
| - | - | 1,958,298 | 7,042,774 | 1,002,817 | 477,372 | 1,767,262 | 12,248,523 | Reclassification | 5 | - | - | - | 34,322,078 | - | - | - | 34,322,078 | Disposals |
| - | - | - | (14,530) | - | - | - | (14,530) | Balance as at 31 December 2021 |
| 2,310,985 | 618,248 | 21,943,747 | 159,688,681 | 19,746,852 | 2,133,722 | 3,771,037 | 210,213,272 | Additions |
| - | - | 61,650 | 21,031,232 | 505,410 | 86,381 | 32,923,709 | 54,608,382 | Reclassification | 5 | - | - | - | - | - | - | 15,490,746 | 15,490,746 | Disposals |
| - | - | - | (16,808) | - | (29,500) | - | (46,308) | Balance as at 31 December 2022 |
| 2,310,985 | 618,248 | 22,005,397 | 180,703,105 | 20,252,262 | 2,190,603 | 52,185,492 | 280,266,092 |
|
|
|
|
|
|
|
|
|
| Accumulated depreciation: |
|
|
|
|
|
|
|
|
| Balance as at 1 January 2021 |
| - | 109,910 | 17,020,338 | 106,040,851 | 17,448,040 | 1,656,350 | - | 142,275,489 | Charge for the year | 4.1 | - | 20,608 | 786,971 | 10,138,329 | 846,291 | 96,229 | - | 11,888,428 | Disposals |
| - | - | - | (7,029) | - | - | - | (7,029) | Balance as at 31 December 2021 |
| - | 130,518 | 17,807,309 | 116,172,151 | 18,294,331 | 1,752,579 | - | 154,156,888 | Charge for the year | 4.1 | - | 20,609 | 771,169 | 14,169,350 | 602,485 | 180,335 | - | 15,743,948 | Disposals |
| - | - | - | (9,359) | - | (29,500) | - | (38,859) | Balance as at 31 December 2022 |
| - | 151,127 | 18,578,478 | 130,332,142 | 18,896,816 | 1,903,414 | - | 169,861,977 | Net book value: |
|
|
|
|
|
|
|
|
| As at 31 December 2022 |
| 2,310,985 | 467,121 | 3,426,919 | 50,370,963 | 1,355,446 | 287,189 | 52,185,492 | 110,404,115 | As at 31 December 2021 |
| 2,310,985 | 487,730 | 4,136,438 | 43,516,530 | 1,452,521 | 381,143 | 3,771,037 | 56,056,384 |
PROPERTY AND EQUIPMENT
4.1 Deprecation expenses is allocated as follows:
|
| For the year ended 31 December |
|
| 2022 |
| 2021 |
|
|
|
|
| Operating costs |
| 13,348,394 |
| 10,234,593 | General and administrative expenses |
| 2,395,554 |
| 1,653,835 | Total |
| 15,743,948 |
| 11,888,428 |
| |
Disclosure of assets subject to finance lease [text block] |
RIGHT-OF-USE ASSETS
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Balance as at 1 January | 7,120,394 |
| 19,856,726 | Additions | 11,201,872 |
| 672,108 | Depreciation charge for the year | (13,011,821) |
| (13,408,440) | Balance as at 31 December | 5,310,445 |
| 7,120,394 |
| |
Disclosure of intangible assets [text block] |
INTANGIBLE ASSETS
| Notes | Software | Capital work-in-progress | Total | Cost: |
|
|
|
| Balance as at 1 January 2021 |
| 330,629,977 | 98,779,677 | 429,409,654 | Additions |
| 13,132,730 | 18,083,658 | 31,216,388 | Reclassification | 4 | - | (34,322,078) | (34,322,078) | Balance as at 31 December 2021 |
| 343,762,707 | 82,541,257 | 426,303,964 | Additions |
| 44,485,993 | - | 44,485,993 | Transfer to Software |
| 38,782,593 | (38,782,593) | - | Reclassification | 4 | - | (15,490,746) | (15,490,746) | Balance as at 31 December 2022 |
| 427,031,293 | 28,267,918 | 455,299,211 |
|
|
|
|
| Accumulated amortization: |
|
|
|
| Balance as at 1 January 2021 |
| 249,857,372 | - | 249,857,372 | Charge for the year | 5.1 | 31,719,315 | - | 31,719,315 | Balance as at 31 December 2021 |
| 281,576,687 | - | 281,576,687 | Charge for the year | 5.1 | 34,424,139 | - | 34,424,139 | Balance as at 31 December 2022 |
| 316,000,826 | - | 316,000,826 |
|
|
|
|
| Net book value as at 31 December 2022 |
| 111,030,467 | 28,267,918 | 139,298,385 | Net book value as at 31 December 2021 |
| 62,186,020 | 82,541,257 | 144,727,277 |
Amortization expense allocation is as follows: .
|
| For the year ended 31 December |
|
| 2022 |
| 2021 |
|
|
|
|
| Operating costs |
| 28,247,238 |
| 25,279,866 | General and administrative expenses |
| 6,176,901 |
| 6,439,449 | Total |
| 34,424,139 |
| 31,719,315 |
| |
Disclosure of trade account payable [text block] |
ACCOUNTS PAYABLE
| Note | 31 December 2022 |
| 31 December 2021 | Trade payables: |
|
|
|
| Others |
| 30,880,997 |
| 6,701,240 | Related parties | 30 | 47,878 |
| 84,470 | Total |
| 30,928,875 |
| 6,785,710 |
Payables are non-commission bearing and are settled on terms ranging from immediate to sixty days. | |
Disclosure of accrued expenses [text block] |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
| Notes | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Accrued employee expenses |
| 115,362,304 |
| 100,154,729 | Payable for General Organization for Social Insurance |
| 2,079,494 |
| 1,979,001 | Value added tax (VAT), net |
| 457,531 |
| 6,637,535 | Board of Directors remuneration payable | 30 | 9,337,500 |
| 8,376,167 | Accrued supplier expenses: |
|
|
|
| | 30 | 11,836,063 |
| 10,296,790 | |
| 125,699,083 |
| 108,640,852 | Total |
| 264,771,975 |
| 236,085,074 |
Other payables and statutory dues are non-commission bearing and are settled on terms ranging from immediate to sixty days. | |
Disclosure of zakat [text block] |
ZAKAT PROVISION
Zakat is charged at the higher of net adjusted income or Zakat base as required by the ZATCA. The key elements of zakat base primarily includes equity components, net income and liabilities reduced by non-current assets as adjusted for zakat purpose.
The movements in zakat provision are as follows:
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Balance as at 1 January | 66,663,698 |
| 83,561,274 | Provision for Zakat for the year |
|
|
| | 67,221,868 |
| 66,663,698 | | 468,544 |
| (440,338) |
| 67,690,412 |
| 66,223,360 | Zakat paid during the year | (67,132,242) |
| (83,120,936) | Balance as at 31 December | 67,221,868 |
| 66,663,698 |
The Group has already filed and paid its consolidated Zakat return for the year ended 31 December 2021 with ZATCA, however, the 2021 and 2020 Zakat assessment is pending finalization. The Group is yet to file its consolidated Zakat return for the Company and its wholly-owned subsidiaries with ZATCA for year 2022.
Zakat base: | 31 December 2022 |
| 31 December 2021 |
|
|
|
| Share capital | 1,200,000,000 |
| 1,200,000,000 | Statutory reserve | 360,000,000 |
| 376,963,633 | General reserve | - |
| 1,114,180,214 | Retained Earnings | 1,532,440,906 |
| 943,478,532 | Dividends Paid | (360,000,000) |
| (1,120,000,000) | Liabilities and provisions | 118,916,480 |
| 105,554,009 | Non-current assets | (733,210,468) |
| (661,020,140) | Zakat base | 2,118,146,918 |
| 1,959,156,248 | Zakat % | 2.5777 |
| 2.5777 |
| 54,599,126 |
| 50,501,171 |
Adjusted profit | 504,909,646 |
| 646,513,937 | Zakat % | 2.5 |
| 2.5 |
| 12,622,741
|
| 16,162,848
| Zakat charge for the year | 67,690,412 |
| 66,223,360 |
| |
Disclosure of deferred revenue [text block] |
DEFERRED REVENUE
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Balance as at 1 January | 3,214,902 |
| 3,223,464 | Invoiced during the year | 209,652,633 |
| 169,346,097 | Recognised as revenue during the year | (196,145,174) |
| (169,354,659) | Balance as at 31 December | 16,722,361 |
| 3,214,902 |
| |
Disclosure of dividends [text block] |
DIVIDEND
The Board of Directors of the Company in their meeting on 5 March 2022 recommended the General Assembly which approved the distribution of dividends on 12 May 2022 to the shareholders for the fiscal year ended 31 December 2021 with a total amount of 360 million Saudi Riyals, equivalent to 3 Saudi Riyals per share representing 30% of the share par value, provided that the dividend eligibility shall be to the Shareholders who own the Company’s shares and registered in the Company’s register at the Securities Depository Center Company (Edaa) by the end of the second trading day following the date of the Company’s General Assembly (the “Eligibility Date”), and the date of the dividend distribution shall be within fifteen days from the Eligibility Date.
During the year ended 31 December 2021, the Board of Directors of the Company in their meeting dated 18 May 2021 recommended the declaration of dividends amounting to SR 120 million to the PIF which was approved in their fourteenth Ordinary General Assembly held on 02 June 2021 and payment was made.
On 24 June 2021, the Board of Directors of the Company recommended declaration of an additional dividends amounting to SR 1,000 million to the PIF. In their Fifteenth Extra Ordinary General Assembly held on 28 June 2021, PIF approved the dividends declaration and payment was made.
On 25 February 2023, the Board of Directors of the Company recommended dividends to the shareholders for the fiscal year ended 31 December 2022 with a total amount of 277,130,872 Saudi Riyals, equivalent to Saudi Riyals 2.31 per share representing 23.1% of the share par value subject to the approval of the shareholders in the General Assembly of the Company. | |
Disclosure of other current liabilities [text block] |
CLEARING PARTICIPANT FINANCIAL LIABILITIES
Financial liabilities at amortised cost: | Notes | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Collateral from clearing members | 15.1 | 4,027,470,603 |
| 14,386,707 | Members' contribution to clearing house funds | 15.2 | 4,304,970 |
| 3,626,642 |
|
| 4,031,775,573 |
| 18,013,349 |
15.1 The deposits from clearing participants represents amounts received from clearing participants as collateral in lieu of initial margin, variation margin and default funds for the equity and derivatives markets. These deposits are subject to commission, a portion of which is shared and included in the clearing participant financial assets.
15.2 This represents a prefunded default arrangement that is composed of assets contributed by clearing members that may be used by the Group in certain circumstances to cover the losses or liquidity pressure resulting from participant defaults. BALANCE DUE TO CAPITAL MARKET AUTHORITY (CMA)
The Group acts as a collection agent on behalf of CMA where their trading commission share is collected and transferred to them on an agreed mechanism. Such portion is not recognized as Group’s revenue. | |
Disclosure of employees' terminal benefits [text block] |
EMPLOYEES’ END-OF-SERVICE BENEFITS LIABILITY
The movement in employees’ end-of-service benefits is as follows:
| Note | 31 December 2022 |
| 31 December 2021 |
|
|
|
|
| Balance as at 1 January |
| 96,876,185 |
| 91,024,046 | Current service cost |
| 10,064,443 |
| 9,691,734 | Interest cost | 27 | 2,241,385 |
| 1,738,972 | Amount recognised in profit or loss |
| 12,305,828 |
| 11,430,706 | Re-measurement (gain) / loss recognized in other comprehensive income |
| (22,650,595) |
| 9,885,004 | Benefits paid during the year |
| (6,970,326) |
| (15,463,571) | Balance as at 31 December |
| 79,561,092 |
| 96,876,185 |
14.1 Re-measurement (gain) / loss recognized in other comprehensive income for the year is as follows:
| 31 December 2022 |
| 31 December 2021 |
|
|
|
| Effect of changes in financial assumptions | (24,500,236) |
| 4,894,755 | Effect of changes in demographic assumptions | 7,817,710 |
| (813,585) | Effect of experience adjustments | (5,968,069) |
| 5,803,834 | Re-measurement loss recognized in other comprehensive income | (22,650,595) |
| 9,885,004 |
14.2 Principal actuarial assumptions
| 31 December 2022 |
| 31 December 2021 |
|
|
|
|
|
|
|
| Discount rate | 5.20% |
| 2.40% | Future growth in salary | 5.00% |
| 5.00% | Turnover | 16% |
| 19.64% | Mortality rate | WHO SA19 - 75% |
| WHO SA19 - 75% |
Demographic assumptions |
|
|
| Retirement age | 60 years |
| 60 years |
Discount rate The discount rate should be determined by reference to market yields at the end of the reporting period on high quality corporate bonds (or, in countries where there is no deep market in such bonds, government bonds) of a currency and term consistent with the currency and estimated term of the post-employment benefit obligations.
Since there is no deep market in Kingdome of Saudi Arabia for government bonds and/or corporate bonds, we have used the yield on US High Quality Market Corporate bonds and US Risk Free Rate and applied a risk premium to arrive at the discount rate.
Salary increases With regards to the past trend, it is assumed that the salaries would increase at a rate of 5.00% per annum compound in the long range.
Turnover The Management assumed the “Heavy” age-wise withdrawal rates. It was assumed that out of the employees that will cease to be employed in a year, other than by normal retirement or death, 90% will be on account of resignation and 10% on account of termination by the Group.
EMPLOYEES’ END-OF-SERVICE BENEFITS LIABILITY (CONTINUED)
14.3 Maturity profile of the defined benefit liability
| 31 December 2022 | 31 December 2021 | Weighted average duration (years) | 5.5 | 7.44 | Distribution of benefit payments: |
|
|
1 | 9,047,175 | 10,945,904 | 2 | 5,505,656 | 12,381,424 | 3 | 4,206,431 | 9,357,298 | 4 | 5,209,599 | 10,147,958 | 5 | 3,976,442 | 11,164,260 | 6-10 | 107,481,325 | 54,052,359 |
14.4Sensitivity analysis Reasonably possible changes as to one of the relevant actuarial assumptions, holding other assumptions constant, the amount of defined benefit obligations would have been:
| 31 December 2022 |
| 31 December 2021 |
| Increase | Decrease |
| Increase | Decrease | Discount rate (1% movement) | 72,966,365 | 87,168,812 |
| 90,111,785 | 104,594,878 | Future salary growth (1% movement) | 87,504,645 | 72,563,970 |
| 104,397,683 | 90,137,489 | Turnover (10% movement) | 79,103,151 | 80,056,320 |
| 95,377,619 | 98,395,166 | Mortality rate (10% movement) | 79,562,576 | 79,559,602 |
| 96,828,192 | 96,924,025 |
14.5Risks associated with defined benefits plan
Longevity risks The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan level over the entire retiree population.
Salary increase risk The most common type of retirement benefit is one where the benefit is linked with final salary. The risk arises when the actual salary increases are higher than expectation and impacts the liability accordingly. | |
Disclosure of statutory reserves [text block] |
In accordance with the Company’s by-law and Saudi Arabian Regulations for Companies in the Kingdom of Saudi Arabia, the Company is required to set aside 10% of its net profit each year as statutory reserve. The shareholder in the extraordinary general assembly held on 17th August 2021 has decided to discontinue setting aside such percentage when said reserve reaches 30% of paid-in capital. The Company has reached the required reserve level. The statutory reserve in the consolidated financial statements is the statutory reserve of the Company. This reserve is currently not available for distribution to the shareholders of the Company. | |
Disclosure of sales [text block] |
OPERATING REVENUE
| For the year ended 31 December |
| 2022 |
| 2021 | Revenue recognized over-time |
|
|
|
|
|
|
| Post trade services | 150,878,440 |
| 130,980,297 | Data and technology services | 100,185,561 |
| 93,264,708 | Listing services | 81,431,485 |
| 72,268,151 | Membership fees | 4,061,813 |
| 3,224,364 | Derivatives services | 1,340,310 |
| 1,218,732 |
| 337,897,609 |
| 300,956,252 |
|
|
|
| Services transferred at point-in-time |
|
|
|
|
|
|
| Post trade services | 411,118,916 |
| 450,070,677 | Trading services | 310,593,521 |
| 406,818,320 | Listing services | 11,737,696 |
| 8,211,800 | Membership fees | 46,800 |
| - | Derivatives services | 35,116 |
| 23,091 |
| 733,532,049 |
| 865,123,888 | Revenue from contracts with customers | 1,071,429,658 |
| 1,166,080,140 |
The Group acts as a collection agent on behalf of CMA where their trading commission share is collected and transferred to them on an agreed mechanism. Such portion is not recognized as Group’s revenue. All of the Group’s revenue is generated within the Kingdom of Saudi Arabia. | |
Disclosure of cost of sales [text block] |
OPERATING COSTS
Operating costs include direct expenses incurred by the Group to provide services to its customers and the Saudi financial market. A breakdown of operating costs is as follows:
| Note | For the year ended 31 December |
|
| 2022 |
| 2021 | Salaries and related benefits |
| 152,498,856 |
| 128,876,587 | CMA fees | 23.1 | 122,000,000 |
| 101,000,000 | Technology and network |
| 52,266,516 |
| 51,919,710 | Depreciation and amortization |
| 46,794,946 |
| 41,491,077 | Consultancy |
| 6,175,826 |
| 1,569,603 | Accommodation and utilities |
| 4,251,774 |
| 4,714,370 | Others |
| 3,737,996 |
| 2,215,391 | Total |
| 387,725,914 |
| 331,786,738 |
23.1 This represents fees payable to the CMA in relation to services provided to the Group in accordance with the council of CMA resolution no. (17/268/6) dated 18 January 2017 and the CMA Board decision no. (3-2-2020) dated 7 January 2020.
| |
Disclosure of general and administrative expenses [text block] |
GENERAL AND ADMINISTRATIVE EXPENSES
| For the year ended 31 December |
| 2022 |
| 2021 | Salaries and related benefits | 154,104,067 |
| 139,138,145 | Technology and network | 14,865,628 |
| 17,234,835 | Depreciation and amortization | 16,384,962 |
| 14,568,623 | Consultancy | 27,961,212 |
| 16,364,627 | Marketing and public relations | 22,827,937 |
| 16,551,195 | Accommodation and utilities | 7,095,481 |
| 6,536,733 | Board of Directors' remuneration | 9,512,309 |
| 8,388,667 | Others | 3,565,961 |
| 2,752,526 | Total | 256,317,557 |
| 221,535,351 |
| |
Disclosure of provisions [text block] |
ALLOWANCE / (REVERSAL) FOR EXPECTED CREDIT LOSSES
| Notes | For the year ended 31 December |
|
| 2022 |
| 2021 | (Reversal) / allowance on investment at amortised cost | 8 | (46,656) |
| 2,997 | Allowance / (reversal) on accounts receivable | 9 | 315,081 |
| (817,875) | |
|