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 2022: 60%) of the share capital. As at 31 March 2023, the authorized, issued and fully paid-up share capital of the Company is SAR 1,200 million (31 December 2022: SAR 1,200 million) divided into 120 million shares (31 December 2022: 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 and legal status |
Commercial registration dated | Business activity | Ownership, direct and effective | Paid up share capital | March 2023 | December 2022 |
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
|
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 and legal status |
Commercial registration dated | Business activities | Ownership, direct and effective | Paid up share capital | March 2023 | December 2022 |
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% | 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 2022: 60%) of the share capital. As at 31 March 2023, the authorized, issued and fully paid-up share capital of the Company is SAR 1,200 million (31 December 2022: SAR 1,200 million) divided into 120 million shares (31 December 2022: 120 million shares) of SAR 10 each. | |
Disclosure of basis of preparation of financial statements [abstract] | | |
Disclosure of basis of preparation of financial statements [text block] |
BASIS OF PREPARATION
2.1 Statement of compliance
These interim condensed consolidated interim financial statements for the period ended 31 March 2023 have been prepared in compliance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting” as endorsed in the Kingdom of Saudi Arabia, other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (“SOCPA”) and in compliance with the provisions of the Regulations for Companies in the Kingdom of Saudi Arabia and the by-laws of the Company. The accounting policies in these condensed consolidated interim financial statements are consistent with those in the Group’s annual consolidated financial statements for the year ended 31 December 2022.
These condensed consolidated interim financial statements do not include all information and disclosures required for a complete set of financial statements and should be read in conjunction with the Group’s last annual consolidated financial statements for the year ended 31 December, 2022. In addition, results for the three-month periods ended 31 March 2023 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2023.
2.2 Basis of measurement
These condensed consolidated interim financial statements have been prepared on a historical cost basis, except for financial assets measured at fair value through profit or loss and employees’ end-of-service benefits which is using the projected unit credit method and discounted to their present value.
2.3 Functional and presentation currency
These condensed consolidated interim financial statements are presented in Saudi Arabian Riyals (“SAR”), which is the functional and presentational currency of the Group. All amounts have been rounded to the nearest SAR.
2.4 Critical accounting estimates and judgments
In preparing these condensed consolidated interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual consolidated financial statements for the year ended December 31, 2022. | |
Disclosure of statement of compliance [text block] |
2.1 Statement of compliance
These interim condensed consolidated interim financial statements for the period ended 31 March 2023 have been prepared in compliance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting” as endorsed in the Kingdom of Saudi Arabia, other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (“SOCPA”) and in compliance with the provisions of the Regulations for Companies in the Kingdom of Saudi Arabia and the by-laws of the Company. The accounting policies in these condensed consolidated interim financial statements are consistent with those in the Group’s annual consolidated financial statements for the year ended 31 December 2022.
These condensed consolidated interim financial statements do not include all information and disclosures required for a complete set of financial statements and should be read in conjunction with the Group’s last annual consolidated financial statements for the year ended 31 December, 2022. In addition, results for the three-month periods ended 31 March 2023 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2023. | |
Disclosure of basis of measurement [text block] |
2.2 Basis of measurement
These condensed consolidated interim financial statements have been prepared on a historical cost basis, except for financial assets measured at fair value through profit or loss and employees’ end-of-service benefits which is using the projected unit credit method and discounted to their present value. | |
Disclosure of functional and presentation currency [text block] |
2.3 Functional and presentation currency
These condensed consolidated interim financial statements are presented in Saudi Arabian Riyals (“SAR”), which is the functional and presentational currency of the Group. All amounts have been rounded to the nearest SAR. | |
Disclosure of basis of consolidation of financial statements [text block] |
BASIS OF CONSOLIDATION
These condensed consolidated interim 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 period are included in the condensed consolidated interim financial statements from the date the Group obtains control until the date the Group ceases to control the subsidiary.
BASIS OF CONSOLIDATION (CONTINUED)
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 condensed consolidated interim 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. | |
Other disclosures on basis of preparation of financial statements [text block] |
NEW STANDARDS AND AMENDMENTS ISSUED
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2022, except for the adoption of new standards effective as of 1 January 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. The International Accounting Standard Board (IASB) has issued following accounting standards, amendments, which were effective from periods on or after January 1, 2023. The management has assessed that the amendments have no significant impact on the Group’s interim condensed financial statements.
IFRS 17, ‘Insurance contracts’ This standard replaces IFRS 4, which permits a wide variety of practices in accounting for insurance contracts.
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.
Amendment to IAS 12 – deferred tax related to assets and liabilities arising from a single transaction - requires companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences.
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 and non-current liabilities with covenants. | 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 new and amended standards and interpretations [text block] |
NEW STANDARDS AND AMENDMENTS ISSUED
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2022, except for the adoption of new standards effective as of 1 January 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. The International Accounting Standard Board (IASB) has issued following accounting standards, amendments, which were effective from periods on or after January 1, 2023. The management has assessed that the amendments have no significant impact on the Group’s interim condensed financial statements.
IFRS 17, ‘Insurance contracts’ This standard replaces IFRS 4, which permits a wide variety of practices in accounting for insurance contracts.
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.
Amendment to IAS 12 – deferred tax related to assets and liabilities arising from a single transaction - requires companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences.
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 and non-current liabilities with covenants. | 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. |
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Disclosure of other notes forming part of accounts [abstract] | | |
Disclosure of bank balances and cash [text block] |
CASH AND CASH EQUIVALENTS
| Notes | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | Cash at banks – current accounts |
| 106,136,154 |
| 49,821,541 | Deposit with SAMA | 11.1 | 16,500,000 |
| 16,500,000 | Time deposits with original maturities equal to or less than three month from the date of acquisition | 11.2 | 1,931,905,086 |
| 2,052,504,555 |
|
| 2,054,541,240 |
| 2,118,826,096 |
11.1 Commission is earned on deposit with SAMA at the prevailing market rates offered by SAMA.
11.2 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 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | Non-current |
|
|
|
| Investments at amortized cost | 7.1 | 171,386,539 |
| 55,809,077 |
|
| 171,386,539 |
| 55,809,077 | Current |
|
|
|
| Investments at FVTPL | 7.2 | 667,094,124 |
| 618,569,219 |
|
| 667,094,124 |
| 618,569,219 |
7.1Investments 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 5.21% per annum as of 31 March 2023 (2022: 2.5%).
The details of these investments are as follow:
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
| Investment in Sukuk – Bank Albilad (Credit rating A3) | 55,862,081 |
| 55,809,283 | Investment in Sukuk – Saudi Government Sukuk (2022-03-15 - Credit rating A3) | 61,441,157 |
| - | Investment in Sukuk – Saudi Government Sukuk (2020-02-15 - Credit ratingA1) | 54,083,567 |
| - | Impairment loss on investments at amortized cost (7.1.1) | (266) |
| (206) | Total | 171,386,539 |
| 55,809,077 |
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
| Investment at amortized cost – non current | 171,386,539 |
| 55,809,077 | Total | 171,386,539 |
| 55,809,077 |
INVESTMENTS (CONTINUED)
7.1.1 The movement of the expected credit losses on investments held at amortized cost is summarized as follows:
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
| Balance as at 1 January | 206 |
| 46,862 | (Reversal) / charge for the period / year | 60 |
| (46,656) | Balance at the end of the period / year | 266 |
| 206 |
Below is the break-up of investment at amortized cost:
31 March 2023 Description | Maturity date | Face value | Classification | Bank Albilad SAR Denominated Tier 2 | 15 April 2031 | 55,000,000 | Non-current asset | Saudi Government SAR Sukuk (2022-03-15) | 17 March 2037 | 61,317,467 | Non-current asset | Saudi Government SAR Sukuk (2020-02-15) | 24 February 2035 | 53,815,777 | Non-current asset |
31 December 2022 Description | Maturity date | Face value | Classification | Bank Albilad SAR Denominated Tier 2 | 15 April 2031 | 55,000,000 | Non-current asset |
7.2 Investments at fair value through profit or loss (“FVTPL”)
This represents investments in units of mutual funds. The cost and fair value of investments held at FVTPL are as follows:
|
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|
|
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | |
| Cost |
| Fair value |
| Cost |
| Fair value | Money market funds | 638,886,817 |
| 659,336,908 |
| 594,704,109 |
| 610,812,003 | Real estate funds | 20,250,000 |
| 7,757,216 |
| 20,250,000 |
| 7,757,216 | Total | 659,136,817 |
| 667,094,124 |
| 614,954,109 |
| 618,569,219 |
| |
Disclosure of trade account receivables [text block] |
ACCOUNTS RECEIVABLE
| Notes | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | Accounts receivable: |
|
|
|
| - Related parties | 28 | 19,067,280 |
| 13,558,085 | - Others |
| 110,710,690 |
| 76,901,108 | Less: allowance for expected credit losses | 8.1 | (28,214,208) |
| (26,110,800) | Total |
| 101,563,762 |
| 64,348,393 |
Receivable balances are non-commission bearing and have payment terms ranging from immediate to thirty days.
8.1 The movement in the allowance for expected credit losses is summarized as follows:
|
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Balance as at 1 January |
| 26,110,800 |
| 25,795,719 | Charge for the period / year |
| 2,103,408 |
| 315,081 | Balance at the end of the period / year |
| 28,214,208 |
| 26,110,800 |
| |
Disclosure of prepayments [text block] |
PREPAID EXPENSES AND OTHER CURRENT ASSETS
| Notes | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Advance against purchase of property | 9.1 | 77,500,000 |
| 77,500,000 | Advanced to vendor |
| 15,266,907 |
| 8,064,317 | Prepaid insurance expenses |
| 9,859,610 |
| 10,997,526 | Accrued operational revenue |
| 7,416,985 |
| 6,589,018 | Advance to employees |
| 4,085,783 |
| 5,020,765 | Value Added Tax (VAT), net |
| 2,711,614 |
| - | Other receivables | 9.2 | 12,368,133 |
| 7,933,818 | Total |
| 129,209,032 |
| 116,105,444 |
9.1 This represents an advance paid to SAMA as partial payment for purchasing part of a property in King Abdullah Financial District.
9.2Other receivable balances are non-commission bearing and have payment terms ranging from immediate to thirty days. | |
Disclosure of other current assets [text block] |
CLEARING PARTICIPANT FINANCIAL ASSETS
Financial assets at amortised cost: | Notes | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Deposits with Saudi Central Bank (SAMA) | 10.1 | 1,637,839,359 |
| 3,061,369,467 | Investment in SAMA Bills | 10.2 | 2,197,008,937 |
| 999,308,737 |
|
| 3,834,848,296 |
| 4,060,678,204 |
10.1 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 24) 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.
|
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
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| Deposits with SAMA - relating to Equities markets |
| 1,606,978,242 |
| 3,030,450,725 | Deposits with SAMA - relating to Derivatives markets |
| 30,861,117 |
| 30,918,742 |
|
| 1,637,839,359 |
| 3,061,369,467 |
10.2 Investment in SAMA Bills:
| Note | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Investment in SAMA Bills | 10.2.1 | 2,197,008,937 |
| 999,308,737 |
CLEARING PARTICIPANT FINANCIAL ASSETS (CONTINUED)
10.2.1 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 24) 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 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Investment in Tadawul Real Estate Company (“TREC “) | 5.1 | 377,594,795 |
| 365,697,523 | Investment in Regional Voluntary Carbon Company (“RVCMC”) | 5.2 | 34,690,948 |
| 35,000,000 | Total |
| 412,285,743 |
| 400,697,523 |
5.1 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 March 2023, the Group owns 33.12% (31 December 2022: 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.
During the period ended 31 March 2023, the Group assessed whether there is any indication that an impairment loss recongnised in prior years may no longer exist or may have decreased. Considering the completion of TREC’s rental building “Tadawul Tower” and committed occupancy, the Group carried out an impairment test and estimated the recoverable amount to be more than the carrying amount and reversed impairment amounting to SAR 20.89 million (31 March 2022: Nil). The Group has recognized its share of loss for the three-month period ended 31 March 2023, based on the management accounts of the associate. Any variance between TREC management accounts and audited financial statements are recorded in the preceding period.
The movement in carrying value of investment is as follows:
| For the three-month period ended 31 March 2023 (Unaudited) |
| For the year ended 31 December 2022 (Audited) |
|
|
|
| Balance as at 1 January | 365,697,523 |
| 375,616,085 | Reversal of impairment | 20,889,120 |
| - | Share of results | (8,991,848) |
| (9,918,562) | Balance at end of the period / year | 377,594,795 |
| 365,697,523 |
The following table summarizes the financial information of the associate as included in the management accounts as at 31 March 2023 and financial statements as at 31 December 2022:
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | Summarized statement of financial position |
|
|
| Total current assets | 161,101,305 |
| 32,825,683 | Total non-current assets | 2,279,331,913 |
| 2,282,712,671 | Total current liabilities | 137,864,326 |
| 85,461,524 | Total non-current liabilities | 1,162,487,993 |
| 1,062,846,629 | Net assets (100%) | 1,140,080,899 |
| 1,167,230,201 |
| For the three-month period ended 31 March 2023 (Unaudited) |
| For the year ended 31 December 2022 (Audited) | Summarized statement of profit or loss and other comprehensive income |
|
|
| Total revenue | 4,137,666 |
| - | Net loss for the period / year | (31,748,270) |
| (29,983,133) | Total comprehensive loss for the period / year | (31,748,270) |
| (29,983,133) |
INVESTMENT IN ASSOCIATES (CONTINUED)
5.2 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 period ended 31 March 2023 (Unaudited) |
| For the year ended 31 December 2022 (Audited) |
|
|
|
| Balance as at 1 January | 35,000,000 |
| - | Investments made during the period / year | - |
| 35,000,000 | Share of results | (309,052) |
| - | Balance at end of the period / year | 34,690,948 |
| 35,000,000 |
The following table summarizes the financial information of the associate as included in the management accounts as at 31 March 2023:
| 31 March 2023 (Unaudited) | Summarized statement of financial position |
| Total assets | 175,507,825 | Total liabilities | 2,053,089 | Net assets (100%) | 173,454,736 |
| For the period 24 October 2022 to 31 March 2023 (Unaudited) | Summarized statement of profit or loss and other comprehensive income |
| Total revenue | - | Net loss for the period / year | (1,545,264) | Total comprehensive loss for the period / year | (1,545,264) |
| |
Disclosure of trade account payable [text block] |
ACCOUNTS PAYABLE
| Note | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | Trade payables: |
|
|
|
| |
| 110,372,761 |
| 30,880,997 | | 28 | 49,383 |
| 47,878 | Total |
| 110,422,144 |
| 30,928,875 |
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 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Accrued employee expenses |
| 45,236,631 |
| 115,362,304 | Payable for General Organization for Social Insurance |
| 1,969,901 |
| 2,079,494 | Value added tax (VAT), net |
| - |
| 457,531 | Board of Directors remuneration payable | 28 | 6,833,332 |
| 9,337,500 | Accrued supplier expenses: |
|
|
|
| | 28 | 9,395,311 |
| 11,836,063 | |
| 121,688,432 |
| 125,699,083 | Total |
| 185,123,607 |
| 264,771,975 |
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 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
| Balance as at 1 January | 67,221,868 |
| 66,663,698 | Provision for Zakat for the period / year |
|
|
| | 18,225,283 |
| 67,221,868 | | - |
| 468,544 | | 741,943 |
| - |
| 18,967,226 |
| 67,690,412 | Zakat paid during the period / year | - |
| (67,132,242) | Balance at the end of the period / year | 86,189,094 |
| 67,221,868 |
The Group is yet to file its consolidated Zakat return for the Company and its wholly-owned subsidiaries with ZATCA for year 2022. The Group is subject to Zakat in accordance with the Zakat regulation issued by GAZT based on Royal Decree 35657 issued on 29/6/1442 effective from 1 January 2020. Zakat assessment for 2020 and 2021 is pending finalization. | |
Disclosure of deferred revenue [text block] |
DEFERRED REVENUE
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
| Balance as at beginning of the period / year | 16,722,361 |
| 3,214,902 | Invoiced during the period / year | 170,282,283 |
| 209,652,633 | Recognised as revenue during the period / year | (65,317,606) |
| (196,145,174) | Balance at the end of the period / year | 121,687,038 |
| 16,722,361 |
| |
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.
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 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Collateral from clearing members | 15.1 | 3,785,983,146 |
| 4,027,470,603 | Members' contribution to clearing house funds | 15.2 | 4,308,910 |
| 4,304,970 |
|
| 3,790,292,056 |
| 4,031,775,573 |
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 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Balance as at 1 January |
| 79,561,092 |
| 96,876,185 | Current service cost |
| 2,294,790 |
| 10,064,443 | Interest cost | 25 | 1,034,294 |
| 2,241,385 | Amount recognised in profit or loss |
| 3,329,084 |
| 12,305,828 | Re-measurement (gain) / loss recognized in other comprehensive income |
| - |
| (22,650,595) | Benefits paid during the period / year |
| (329,410) |
| (6,970,326) | Balance at the end of the period / year |
| 82,560,766 |
| 79,561,092 |
| |
Disclosure of statutory reserves [text block] |
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 three-month period ended 31 March |
| 2023 (Unaudited) |
| 2022 (Unaudited) | Revenue recognized over-time |
|
|
|
|
|
|
| Post trade services | 37,997,205 |
| 38,549,951 | Data and technology services | 31,461,654 |
| 24,609,817 | Listing services | 21,521,128 |
| 20,252,850 | Membership fees | 869,562 |
| 753,594 | Derivatives services | 451,578 |
| 272,095 |
| 92,301,127 |
| 84,438,307 |
|
|
|
| Revenue recognized at point-in-time |
|
|
|
|
|
|
| Post trade services | 69,017,981 |
| 109,102,321 | Trading services | 49,735,345 |
| 99,020,660 | Listing services | 190,000 |
| 1,375,000 | Derivatives services | 6,656 |
| 12,704 |
| 118,949,982 |
| 209,510,685 | Revenue from contracts with customers | 211,251,109 |
| 293,948,992 |
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 three-month period ended 31 March |
|
| 2023 (Unaudited) |
| 2022 (Unaudited) | Salaries and related benefits |
| 39,777,091 |
| 32,670,150 | CMA fees | 22.1 | 32,500,000 |
| 32,500,000 | Technology and network |
| 13,051,664 |
| 8,842,128 | Depreciation and amortization |
| 13,785,731 |
| 8,579,830 | Consultancy |
| 307,423 |
| 1,070,013 | Accommodation and utilities |
| 1,037,670 |
| 1,282,302 | Others |
| 917,991 |
| 166,198 | Total |
| 101,377,570 |
| 85,110,621 |
22.1 This represents fees payable to the CMA in accordance with the details of the Market Institutions Deputy letter no. (17/268/6) dated 18 January 2017 which includes notification of CMA Board resolution, In addition to CMA Board resolution no. (3-2-2019) dated 7 January 2019. | |
Disclosure of general and administrative expenses [text block] |
GENERAL AND ADMINISTRATIVE EXPENSES
| For the three-month period ended 31 March |
| 2023 (Unaudited) |
| 2022 (Unaudited) | Salaries and related benefits | 36,920,474 |
| 33,502,527 | Technology and network | 4,888,962 |
| 3,455,899 | Depreciation and amortization | 3,819,183 |
| 4,048,674 | Consultancy | 2,096,208 |
| 1,336,627 | Marketing and public relations | 3,644,417 |
| 5,455,092 | Accommodation and utilities | 1,666,301 |
| 1,853,017 | Board of Directors' remuneration | 2,585,275 |
| 2,374,000 | Others | 878,464 |
| 435,561 | Total | 56,499,284 |
| 52,461,397 |
| |
Disclosure of other income, net [text block] |
INVESTMENT INCOME
| For the three-month period ended 31 March |
| 2023 (Unaudited) |
| 2022 (Unaudited) |
|
|
|
| Commission income on time deposits | 23,857,145 |
| - | Realised gain on sale investments, net | 497,599 |
| 152,782 | Commission income on SAMA Bills, net | 10,472,130 |
| - | Unrealised gain on investments, net | 6,124,373 |
| 8,368,971 | Commission income on SAMA deposits, net | 2,569,554 |
| 37,600 | Dividend income | 362,384 |
| 1,003,871 | Commission income on investment at amortised cost | 1,673,557 |
| 355,244 | Total | 45,556,742 |
| 9,918,468 |
| |
Disclosure of other expenses, net [text block] |
FINANCE COSTS
| Note | For the three-month period ended 31 March |
|
| 2023 (Unaudited) |
| 2022 (Unaudited) | Finance cost on employees’ end-of-service benefits liabilities | 14 | 1,034,294 |
| 434,743 | Finance expense on lease liabilities |
| - |
| 248,079 | Total |
| 1,034,294 |
| 682,822 |
| |
Disclosure of earnings per share [text block] |
BASIC AND DILUTED EARNINGS PER SHARE
Basic and diluted earnings per share is computed by dividing profit attributable to the ordinary shareholders of the Company by the weighted average outstanding number of shares for the period ended 31 March 2023, totaling 120 million shares (31 March 2022: 120 million shares).
|
| For the three-month period ended 31 March |
|
| 2023 (Unaudited) |
| 2022 (Unaudited) | Net profit for the period |
| 90,782,485 |
| 140,635,134 | Weighted average outstanding number of shares |
| 120,000,000 |
| 120,000,000 | Earnings per share |
| 0.76 |
| 1.17 |
| |
Disclosure of leases [text block] |
RIGHT-OF-USE ASSETS
| Note | 31 March 2023 |
| 31 December 2022 |
|
|
|
|
| Balance as at 1 January |
| 5,310,445 |
| 7,120,394 | Additions |
| 207,897,014 |
| 11,201,872 | Depreciation charge for the period / year | 6.1 | (6,132,006) |
| (13,011,821) | Balance at the end of period / year |
| 207,075,453 |
| 5,310,445 |
RIGHT-OF-USE ASSETS (CONTINUED)
6.1 Deprecation expenses is allocated as follows:
| Note | 31 March 2023 |
| 31 December 2022 |
|
|
|
|
| General and administrative expenses |
| 1,785,495 |
| 7,812,506 | Operating costs |
| 1,390,450 |
| 5,199,315 | Cost directly attributable to capital work-in-progress under property and equipment | 6.2 | 2,956,061 |
| - | Total |
| 6,132,006 |
| 13,011,821 |
6.2On 1 March 2023, the Group signed a lease agreement for its new head quarter with TREC (an associate company). Initial lease term is for five years and is renewable at Group’s discretion subject to terms and conditions of the agreement. The Group has been provided grace period and it is being utilized to perform fit-out works at the office premises to bring it to condition for its intended use. Consequently, the depreciation and finance cost are considered by the Group as cost directly attributable cost in bringing the office premises in condition necessary to be capable of operating in the manner as intended by Group’s management. These cost hence are capitalized and currently recorded as capital work-in-progress under property and equipment.
LEASE LIABILITIES
This represents amount of lease liabilities as per IFRS 16 for the rented offices of the Group. Following are the classification and maturity analysis of lease liabilities:
| Notes | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
|
| Balance as at 1 January |
| - |
| 982,913 | Additions |
| 207,897,014 |
| 11,201,873 | Finance cost | 6.2 ,13.1 | 755,556 |
| 130,602 | Payment |
| (48,866,327) |
| (12,315,388) | Balance at the end of period / year |
| 159,786,243 |
| - |
13.1 Finance cost incurred for the period ended 31 March 2023 amounting to of SAR 755,556 has been included in capital work-in-progress under property and equipment. Refer note 6.2 for details. | |
Disclosure of related party transactions [text block] |
TRANSACTIONS WITH RELATED PARTIES
During the ordinary course of business, the Company enters into transaction with its related parties. These related parties include: Parent as explained in Note 1; Other related parties that include entities which have either common directors with the Company’s BOD and / or owned by Parent and / or have common directors with the BOD of Parent; Associate companies, refer Note 1.2 for details; and Key Management that includes the Company’s Board of Directors (BOD) and key executives
28.1 Following are the total amount of transactions that have been entered into during the period / year with the related parties:
|
| For the three-month period ended 31 March |
| Notes | 2023 (Unaudited) |
| 2022 (Unaudited) |
|
|
|
|
| Parent
|
|
|
|
| Operating revenue from services rendered |
| 1,267,500 |
| - | Other related parties
|
|
|
|
| Operating revenue from services rendered |
| 58,755,941 |
| 52,962,304 | Commission income |
| 8,944,135 |
| 355,244 | Purchase of services (internet , utilities and others) |
| 2,626,415 |
| 4,134,024 | (Disposals) / purchase of investments at FVTPL |
| (11,720,883) |
| - | Associates
|
|
|
|
| Tadawul Real Estate Company – Share of results
| 5 | (8,991,848) |
| (1,595,097) | Depreciation on right-of-use assets
| 6 | 2,956,061 |
| - | Finance cost on lease liabilities
| 13 | 755,556 |
| - | Investment in RVCM – Share of results
| 5 | (309,052) |
| - | Key management personnel compensation
|
|
|
|
| Salaries and other short-term benefits |
| 6,316,755 |
| 5,458,091 | Post-employment benefits |
| 386,351 |
| 1,113,719 | Board of Directors’ remuneration |
| 2,585,275 |
| 2,374,000 |
Operating revenue from services rendered by the Company to the related parties included services of post trade, trading, listing, data and technology services, derivative and membership.
28.2 Following are the outstanding balances arising from related party transactions:
| Notes | 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | Parent
|
|
|
|
| Accounts receivable | 8 | - |
| - | Other related parties
|
|
|
|
| Investments held at FVTPL | 7.2 | 2,000,023 |
| 13,720,906 | Accounts receivable | 8 | 19,067,280 |
| 13,558,085 | Less: ECL allowance | 8.1 | (179,629) |
| (780,298) | Accounts receivable, net |
| 18,887,651 |
| 12,777,787 | Accrued expenses and other liabilities | 16,18,19 | 27,408,737 |
| 18,102,697 | Cash and cash equivalents | 11 | 783,137,395 |
| 804,234,649 | Clearing participant financial liabilities | 15 | 719,736,944 |
| 866,246,957 | Associates
|
|
|
|
| Accounts receivable - Tadawul Real Estate Company | 8 | - |
| 538,071 | Key management personnel
|
|
|
|
| Board of Directors remuneration payable | 19 | 6,833,332 |
| 9,337,500 |
Outstanding balances at year end arise in in normal course of business. These balances are unsecured, commission free and are recoverable / payable on terms ranging from immediate to thirty days. | |
Disclosure of segments reporting [text block] |
SEGMENT INFORMATION
The Group operates solely in the Kingdom of Saudi Arabia. For management purposes, the Group is organized into business segments based on services provided. The reportable segments of the Group are:
Capital markets The activities of this segment include trading commission for securities and derivative markets, admission fees from initial listing and further capital raises, annual fees charged for securities traded on the Group’s markets and fees from secondary market services.
Post-trade The activities of this segment include registration of investment portfolios in the filing and settlement system, register and file its ownership, transfer, settlement, clearing and safekeeping its ownership, registering any restriction of ownership on the file securities, and associate with members of the market and settlement agents to filing and settlement system. Furthermore, linking and managing records of securities issuers, organizing general assemblies for issuers including remote voting service for such assemblies, providing reports, notifications and information in addition to providing any other service relating to its activities according to financial market regulations.
Data and technology services The activities of this segment are to grow the business of Data and Technology Services which includes offering high-quality real-time trading data, reference data, market indices, financial information to the financial community, financial technology solutions, research & development in the field of engineering & technology and innovative capital market solutions for stakeholders.
Corporate Corporate manages future corporate development and controls all treasury related functions. All investments are incubated within this category, which also comprises managing strategy for business development, legal, finance, operations, information technology, human resources and customer relations management.
29.1Financial information relating to operating segments:
31 March 2023 (Unaudited) | Capital markets | Data and technology services | Post- trade | Corporate | Total |
|
|
|
|
|
| Segment revenue | 72,266,742 | 31,461,654 | 107,522,713 | - | 211,251,109 | Segment costs excluding depreciation and amortization | (42,097,436) | (15,375,892) | (80,012,111) | (4,889,970) | (142,375,409) | Depreciation and amortization | (4,602,840) | (977,307) | (8,767,846) | (3,256,920) | (17,604,913) | Investment income | - | - | - | 45,556,742 | 45,556,742 | Reversal of impairment in investment in associates | - | - | - | 20,889,120 | 20,889,120 | Share of results of associates | - | - | - | (9,300,900) | (9,300,900) | Finance costs | - | - | - | (1,034,294) | (1,034,294) | Other income, net | - | - | - | 1,626,313 | 1,626,313 | Profit before Zakat | 25,566,466 | 15,108,455 | 18,742,756 | 49,590,091 | 109,007,768 | Zakat provision | - | - | - | (18,225,283) | (18,225,283) | Profit after Zakat | 25,566,466 | 15,108,455 | 18,742,756 | 31,364,808 | 90,782,485 |
SEGMENT INFORMATION (CONTINUED)
29.1 Financial information relating to operating segments (continued):
31 March 2022 (Unaudited) | Capital markets | Data and technology services | Post- trade | Corporate | Total |
|
|
|
|
|
| Segment revenue | 121,280,303 | 24,609,817 | 148,058,872 | - | 293,948,992 | Segment cost excluding depreciation and amortization | (37,491,192) | (10,542,676) | (75,857,631) | (3,212,297) | (127,103,796) | Depreciation and amortization | (4,334,279) | (598,015) | (5,193,708) | (2,502,503) | (12,628,505) | Investment income | - | - | - | 9,918,468 | 9,918,468 | Share of results of associates | - | - | - | (1,595,097) | (1,595,097) | Finance costs | - | - | - | (682,822) | (682,822) | Other income, net | - | - | - | 202 | 202 | Segment profit before Zakat | 79,454,832 | 13,469,126 | 67,007,533 | 1,925,951 | 161,857,442 | Zakat | - | - | - | (21,222,308) | (21,222,308) | Segment profit after Zakat | 79,454,832 | 13,469,126 | 67,007,533 | (19,296,357) | 140,635,134 |
29.2 Operating revenue by operating segments
31 March 2023 (Unaudited) | Capital markets | Data and technology services | Post- trade | Total |
|
|
|
|
| Revenue recognised at a point-in-time |
|
|
|
| Trading services | 49,735,345 | - | - | 49,735,345 | Post trade services | - | - | 69,017,981 | 69,017,981 | Listing services | 190,000 | - | - | 190,000 | Derivatives market | 2,649 | - | 4,007 | 6,656 |
|
|
|
|
| Revenue recognised over-time |
|
|
|
| Data and technology services | - | 31,461,654 | - | 31,461,654 | Post trade services | - | - | 37,997,205 | 37,997,205 | Listing services | 21,521,128 | - | - | 21,521,128 | Derivatives market | 413,058 | - | 38,520 | 451,578 | Membership fees | 404,562 | - | 465,000 | 869,562 | Consolidated revenue | 72,266,742 | 31,461,654 | 107,522,713 | 211,251,109 |
31 March 2022 (Unaudited) | Capital markets | Data and technology services | Post- trade | Total |
|
|
|
|
| Revenue recognised at a point-in-time |
|
|
|
| Trading services | 99,020,660 | - | - | 99,020,660 | Post trade services | - | - | 109,102,321 | 109,102,321 | Listing services | 1,375,000 | - | - | 1,375,000 | Derivatives markets | 3,604 | - | 9,100 | 12,704 |
|
|
|
|
| Revenue recognised over-time |
|
|
|
| Data and technology services | - | 24,609,817 | - | 24,609,817 | Post trade services | - | - | 38,549,951 | 38,549,951 | Listing services | 20,252,850 | - | - | 20,252,850 | Derivatives markets | 227,095 | - | 45,000 | 272,095 | Membership fees | 401,094 | - | 352,500 | 753,594 | Consolidated revenue | 121,280,303 | 24,609,817 | 148,058,872 | 293,948,992 |
| |
Disclosure of risk management [abstract] | | |
Disclosure of credit risk [text block] |
2 Credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s accounts receivables from customers, cash at banks, time deposits and investment in debt securities.
The below schedule shows the maximum limit for exposure to credit risk of the consolidated statement of financial position elements:
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) | Investments at amortized cost | 171,386,539 |
| 55,809,077 | Advance for purchase of property | 77,500,000 |
| 77,500,000 | Cash and cash equivalents | 2,054,541,240 |
| 2,118,826,096 | Accounts receivable | 101,563,762 |
| 64,348,393 | Accrued operational revenue | 7,416,985 |
| 6,589,018 | Other receivables | 12,368,133 |
| 7,933,818 | Advance to employees | 4,085,783 |
| 5,020,765 | Total | 2,428,862,442 |
| 2,336,027,167 |
Cash and cash equivalents
The Group keeps its surplus funds with banks having sound credit ratings. Currently the surplus funds are kept with banks that have ratings as follows:
30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
30.2 Credit risk (continued) Current accounts
|
| STANDARD & POOR |
| Moody’s |
| Fitch |
Bank name |
| Long term | Short term |
| Long term | Short term |
| Long term | Short term | SABB |
| - | - |
| A1 | P-1 |
| BBB+ | F2 | SNB |
| A- | A-2 |
| A1u | P-1u |
| A- | F1 |
Time deposit
|
| STANDARD & POOR |
| Moody’s |
| Fitch |
Bank name |
| Long term | Short term |
| Long term | Short term |
| Long term | Short term | SABB |
| - | - |
| A1 | P-1 |
| BBB+ | F2 | SNB |
| A- | A-2 |
| A1u | P-1u |
| A- | F1 | Alinma Bank |
| - | - |
| - | - |
| BBB+ | F2 | ANB |
| BBB+ | A-2 |
| A1 | P-1 |
| BBB+ | F2 | SAIB |
| BBB | A-2 |
| A2 | P-1 |
| BBB+ | F2 |
Investments at amortized cost This represents investments in sukuks issued by counter parties operating in the Kingdom of Saudi Arabia having sound credit ratings as disclosed in note 7.
Accounts receivable Accounts receivable are shown net of the allowance for expected credit losses. The Group applies the IFRS 9 simplified approach in measuring expected credit losses which uses a lifetime expected loss allowance. To measure the expected credit losses, account receivables have been grouped based on the days past due. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
Accrued operational revenue Accrued operating revenue represents earned revenue which is yet to be billed to customers. These are short-term in nature and no significant credit risk exists in the balance.
Advance to employees This represents advances provided to employees on their request. Such advances are deducted from their monthly salaries. Therefore, no significant credit risk exists in the balance.
Advance for purchase of property The Group is in the process of acquiring the second floor of the data center in the King Abdullah Financial District in Riyadh (the “Data Centre”) for the purposes of its operations. The payment is made to SAMA which is the central bank of Kingdom of Saudi Arabia. Hence no significant credit risk exists.
Other receivables Other receivables represent receivables from low credit risk counterparties and are short-term in nature.
30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)
30.3 Concentration of credit risk The following table provides information about the exposure to credit risk and expected credit losses for receivables as at 31 March 2023.
| Weighted average loss rate % |
| Gross carrying amount |
| Loss allowance |
|
|
|
|
|
| 0-30 days (not past due) | 0.11 |
| 42,318,917 |
| 48,520 | 30-60 days | 1.32 |
| 37,410,455 |
| 495,134 | 61-90 days | 3.47 |
| 1,522,350 |
| 52,794 | 91-120 days | 4.53 |
| 1,099,608 |
| 49,862 | 121-180 days | 19.86 |
| 535,271 |
| 106,302 | 181-360 days | 49.90 |
| 906,922 |
| 452,524 | More than 360 days past due | 58.74 |
| 45,984,447 |
| 27,009,072 |
|
|
| 129,777,970 |
| 28,214,208 |
The following table provides information about the exposure to credit risk and expected credit losses for receivables as at 31 December 2022:
| Weighted average loss rate % |
| Gross carrying amount |
| Loss allowance |
|
|
|
|
|
| 0-30 days (not past due) | 5.32 |
| 38,500,808 |
| 2,047,362 | 30-60 days | 16.61 |
| 1,571,384 |
| 260,961 | 61-90 days | 17.43 |
| 773,297 |
| 134,770 | 91-120 days | 15.75 |
| 238,742 |
| 37,593 | 121-180 days | 30.26 |
| 507,197 |
| 153,457 | 181-360 days | 25.21 |
| 1,573,163 |
| 396,595 | More than 360 days past due | 48.80 |
| 47,294,602 |
| 23,080,062 |
|
|
| 90,459,193 |
| 26,110,800 |
| |
Disclosure of liquidity risk [text block] |
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The below schedule shows an analysis of financial assets and liabilities based on the contractual maturities:
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
| Carrying amount | Less than 12 months | More than 12 months | Total |
| Carrying amount | Less than 12 months | More than 12 months | Total |
|
|
|
|
|
|
|
|
|
| Financial assets at fair value: |
|
|
|
|
|
|
|
|
| Investments | 667,094,124 | 667,094,124 | - | 667,094,124 |
| 618,569,219 | 618,569,219 | - | 618,569,219 | Financial assets at amortised cost: |
|
|
|
|
|
|
|
|
| Investments | 171,386,539 | - | 171,386,539 | 171,386,539 |
| 55,809,077 | - | 55,809,077 | 55,809,077 | Cash and cash equivalents | 2,054,541,240 | 2,054,541,240 | - | 2,054,541,240 |
| 2,118,826,096 | 2,118,826,096 | - | 2,118,826,096 | Clearing participant financial assets | 3,834,848,296 | 3,834,848,296 | - | 3,834,848,296 |
| 4,060,678,204 | 4,060,678,204 | - | 4,060,678,204 | Account receivables | 101,563,762 | 101,563,762 | - | 101,563,762 |
| 64,348,393 | 64,348,393 | - | 64,348,393 | Accrued operational revenue | 7,416,985 | 7,416,985 | - | 7,416,985 |
| 6,589,018 | 6,589,018 | - | 6,589,018 | Advance to employees | 4,085,783 | 4,085,783 | - | 4,085,783 |
| 5,020,765 | 5,020,765 | - | 5,020,765 | Advance for purchase of property | 77,500,000 | 77,500,000 | - | 77,500,000 |
| 77,500,000 | 77,500,000 | - | 77,500,000 | Other receivables | 12,368,133 | 12,368,133 | - | 12,368,133 |
| 7,933,818 | 7,933,818 | - | 7,933,818 | Total financial assets | 6,930,804,862 | 6,759,418,323 | 171,386,539 | 6,930,804,862 |
| 7,015,274,590 | 6,959,465,513 | 55,809,077 | 7,015,274,590 |
|
|
|
|
|
|
|
|
|
| Financial liabilities at amortised cost |
|
|
|
|
|
|
|
| - | Clearing participant financial liabilities | 3,790,292,056 | 3,790,292,056 | - | 3,790,292,056 |
| 4,031,775,573 | 4,031,775,573 | - | 4,031,775,573 | Lease liabilities | 159,786,243 | - | 191,269,188 | 191,269,188 |
|
|
|
|
| Accounts payable | 110,422,144 | 110,422,144 | - | 110,422,144 |
| 30,928,875 | 30,928,875 | - | 30,928,875 | Balance due to Capital Market Authority | 22,419,411 | 22,419,411 | - | 22,419,411 |
| 19,375,330 | 19,375,330 | - | 19,375,330 | Accrued expenses and other current liabilities | 185,123,607 | 185,123,607 | - | 185,123,607 |
| 264,771,975 | 264,771,975 | - | 264,771,975 | Total financial liabilities | 4,268,043,461 | 4,108,257,218 | 191,269,188 | 4,299,526,406 |
| 4,346,851,753 | 4,346,851,753 | - | 4,346,851,753 | Net financial assets | 2,662,761,401 | 2,651,161,105 | (19,882,649) | 2,631,278,456 |
| 2,668,422,837 | 2,612,613,760 | 55,809,077 | 2,668,422,837 |
As at 31 March 2023 and 31 December 2022, undiscounted liabilities are repayable within 12 months from the reporting date. | |
Disclosure of interest rate risk [text block] |
Commission rate risk Commission risk is the exposure to multiple risks related to the impact of changes in commission rates in the market on the Group’s financial position and cash flows. The Group monitors the fluctuations in commission rates and believes that the impact of the risk is on certain financial instruments held by the Group.
A 1% change in the commission rates, with all other variables held constant, would impact the consolidated statement of profit or loss and other comprehensive income as set out below:
| For the three-month period ended 31 March |
| 2023
|
| 2022 | Effect on profit for the period | (+/-) 6,910,387 |
| (+/-) 10,148,327 |
| |
Disclosure of currency risk [text block] |
Currency risk Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Group is subject to fluctuations in foreign exchange rates in the normal course of its business. The Group is not exposed to currency risk and it did not undertake significant transactions in currencies other than Saudi Arabian Riyals. | |
Disclosure of subsequent events [text block] |
SUBSEQUENT EVENTS
There is no event subsequent to the period which requires disclosure in these consolidated financial statements. There is no event subsequent to the period which required any adjustment in the condensed consolidated interim financial statements. | |
Disclosure of commitments and contingencies [text block] |
CONTINGENCIES AND COMMITMENTS
Commitments
27.1 Commitments represent the value not yet executed supply contracts of assets and services to the Group as follows:
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
| Capital expenditure commitments | 23,994,603 |
| 25,368,036 | Operating expenditure commitments | 77,470,346 |
| 37,654,733 |
| 101,464,949 |
| 63,022,769 |
27.2 On 18 Muharram 1444H corresponding to 16 August 2022, the Group’s subsidiary Wamid has entered into a non-binding preliminary agreement with Direct Financial Network Company LLC and its indirect majority shareholder National Technology Group in order to begin the due diligence process and to negotiate the definitive agreements in relation to the potential acquisition of 51% of the issued capital of DFNC from its direct and indirect shareholders.
On 30 Jumada Al-Awwal 1444H corresponding to 24 November 2022, the Group singed a sale and purchase agreement between Group’s subsidiary Wamid and National Two Ventures, which currently holds 99% of the share capital of DFNC for the acquisition of 51% of the issued share capital of DFNC. As at 31 March 2023, the acquisition has not been completed.
27.3 During the year end 31 December 2022, the Company entered into a short-term revolving financing facility agreement of SR 28 million to as part of business continuity and contingency liquidity planning. There has been no drawdown against the facility as of 31 March 2023.
Contingencies
| 31 March 2023 (Unaudited) |
| 31 December 2022 (Audited) |
|
|
|
| 27.4 Letters of guarantee | 5,641,700 |
| 1,147,940 |
27.5 The Group, in its ordinary course of business, is subject to proceedings, lawsuits and other claims. However, these matters are not expected to have any material impact on the Group’s financial position or on the results of its operations as reflected in these condensed consolidated interim financial statements. | |
Disclosure of board of director's approval of the financial statements [text block] |
APPROVAL OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The condensed consolidated interim financial statements have been approved by the Board of Directors on 24 Ramadan 1444H corresponding to 15 April 2023. | |
Disclosure of capital management [text block] |
|