A decrease in distribution sector revenues by approximately 1.7 million SR, in addition to a decrease in Production sector revenues by approximately 5 million SR, as the same quarter of the previous year included serial production contracts. Advertising sector revenues also decreased by approximately 0.6 million SR as a result of the expiration of a contract. Renting advertising sites.

On the other hand, Retail sector revenues increased by approximately 2.7 million SR after increasing the number of sector branches.

- A decrease in gross profit from continuing operations by approximately 6.5 million SR, mainly due to booking of provision for slow moving inventory by approximately 7.5 million SR.

On the other hand, the Retail sector gross profit increased by approximately 1.7 million SR after an increase in the number of sector branches.

- The comparative quarter of the prior year also included gains from discontinued operations of around SAR 2.6 million SR (Aventus Global Trading Company – a subsidiary company).

This increase was partly offset by:

- An increase in the group’s share of the results from associate companies’ operations by approximately 1.5 million SR.

- Other income increased by approximately 3.8 million SR, mainly from profits on deposits of approximately 5 million SR and 0.7 million SR gains from unclaimed credit balances, while the comparative quarter of prior year included gain from disposal of investment properties of around 1.5 million SR.

A decrease in Distribution sector revenues by approximately 8 million SR, as the previous quarter of the year represents the main supply season for educational institutions in the distribution sector.

- The gross profit from continued operations decreased by approximately 9 million SR, as the prior quarter represents Distribution sector main supply season for educational institutions), in addition to

Increase in provision for slow-moving inventory of approximately 7.5 million SR.

- increase in general and selling expenses of around 2.4 million SR.

- A drop in the group’s share of the results from associate companies’ operations by approximately 2.9 million SR.

This increase in losses was partly offset by:

- Other income increased by approximately 4.6 million SR compared to last quarter, mainly from an increase in profits from deposits of approximately 3.6 million SR and 0.7 million SR from rebates income.

- A decrease in Zakat provision by approximately 1.7 million SR as the previous quarter included recording of 1.9 million SR provision against emended zakat assessment in the parent company.

- A decrease in the revenues of the advertising sector by approximately 1.8 million SR as a result of the decrease in revenues from existing sites and the expiration of the rental contract for advertising sites, and the production sector by approximately 9.7 million SR, as the same period of the previous year included television series production projects. Distribution sector revenues also decreased by approximately 8 million SR after losing a number of major customers during the current period compared to the same period of the previous year.

On the other hand, Retail sector revenues increased by approximately 5.2 million SR after increasing the number of sector branches.

- A decrease in the gross profit from continued operations by approximately 10.3 million SR, mainly due to a decrease in the gross profit of the advertising sector by approximately 2.5 million SR as a result of a decrease in sector revenues and the expiry of advertising sites lease contract and drop of the Production sector gross profit by approximately 0.7 million SR as a result of a drop in sector’s revenues. Although the revenues of the distribution sector decreased by approximately 8 million SR, the sector cost of revenues was not affected by this decrease, as a result of recording a provision for slow-moving inventory during the current period at approximately 7.5 million SR. In addition to slow moving inventory provision in Bookstores sector of around 1.4 million SR.

On the other hand, the Retail sector gross profit increased by approximately 2.3 million SR after an increase in the number of sector branches.

-An increase in general and selling expenses by approximately 6 million SR.

During the current period:

- Recording financial reorganization expenses at approximately 2.8 million SR.

- Recording Impairment losses in trade receivables and other debit balances approximately 0.7 million SR.

-Increase in Zakat allocation by approximately 5.5 million SR.

This increase was partially offset by:

- An increase in the group’s share of the results of the operations of associate companies by approximately 9.5 million SR.

- Other income increased by approximately 5.5 million SR, mainly from increase in profits on deposits of approximately 5 million SR and 1.2 million SR gains from unclaimed credit balances and 0.7 million SR as rebate income, on the other hand comparative period included gain from disposal of investment properties of around 1.5 million SR.

As shown in Note No. (6) investments in associate companies are accounted for using the equity method in the accompanying interim condensed consolidated financial statements. The group has an investment in an associate company (Wunderman Thomson MENA Company) “Wunderman”, amounting to SR 31,057,474 as at 31 December 2023, which is accounted for using the equity method. The Group has recorded its investment in the associate as well as its share in net result of profit and comprehensive loss of associate amounting to SR 7,783,151 and SR 1,221,139 respectively based on the management accounts of the associate. Accordingly, we were unable to obtain sufficient evidence, directly or through alternative procedures, regarding valuation of the investment balance as of 31 December 2023, as well as the accuracy of the group’s share in profit or loss and comprehensive income for the three- and nine-month periods ending on the same date. Accordingly, we were not able to determine whether adjustments to this amount were necessary as of 31 December 2023.

Material uncertainty relating to going concern:

We draw attention to Note (3.4) to the accompanying interim condensed consolidated financial statements, which states that the group has accumulated losses amounting to SR 141,436,073 as of 31 December 2023, representing 35.4% of the company’s capital on the same date (31 March 2023: amounting to SR 87,629,894 representing 175% of the company’s capital). The group also has negative cash flows from operating activities amounted to SR 28,280,824, and the total comprehensive loss for the nine-month period ending on 31 December 2023, amounted to SR 33,533,391. The group has plans to invest and work on restructuring as mentioned in Note No. (3.4), and it expects that the group will continue, and as a result, The restructuring process has not been completed as of the date of the report and knowing the results of this process, these circumstances indicate the existence of a fundamental uncertainty, which may raise significant doubts about the group’s ability to remain as a going concern. Our conclusion has not been qualified with respect to this matter.

The Auditor report draws the attention to other matter as following:

The group’s interim condensed consolidated financial statements for the three and nine-month period ending on 31 December 2022 were reviewed by another auditor who expressed a modified conclusion on those interim condensed consolidated financial statements on 7 February 2023. The group’s consolidated financial statements for the year ending 31 March 2023 were also audited, by another auditor and expressed a modified opinion on those consolidated financial statements on 22 June 2023. The reason for modifying the previous auditor’s conclusion was as follows:

“ The group investments in associate companies were recorded and accounted for using the equity method based on financial statements prepared by the Company’s management, the balances of investments in the group’s summary and consolidated statement of financial position as of 31 December 2022 amounted to SR 29,015,417, and the group’s share of profits were included in the group’s interim condensed consolidated statement of profit or loss for the period ending on the same date amounting to SR 959,113, and we were not able to obtain sufficient evidence directly or through procedures regarding the group’s investment balances in the above company as of 31 December 2022, as well as the group’s share in the other comprehensive income of the above company for the same period. Accordingly, we were not able to determine whether it was necessary to conduct Adjustments to this amount.”

The group reversed the recording of other income on lease concessions and adjusted the opening balance of short-term lease obligations as of March 31, 2022. The effect of this restatement was booked by adjusting the opening accumulated losses balance as of March 31, 2022, and amending the comparative information for the consolidated statement of financial position as of March 31, 2022, March 31, 2023, and the consolidated statement of profit or loss and statement of cash flows for the comparative financial period ending on December 31, 2022 ant loss per share for the three and nine months period ended December 31, 2022.

-Certain comparative figures have been reclassified to conform with the presentation of the current year and in accordance with the requirements of International Financial Reporting Standard No. (5), non-current assets held for sale and discontinued operations.

-The accumulated losses as on December 31, 2023, amounted to around 141.4 million SR, or 35.4% of the capital of 400 million SR as on December 31, 2023 (around 87.6 million SR, or 175% of the Capital of 50 million SR as on March 31, 2023).

The Group is also working on restructuring some of its subsidiaries and expanding the operations of the retail sector to increase revenues sufficient to cover its expenses and achieve operating profits in subsequent years. The Group expects an improvement in its commercial activities and revenue growth over the next year, driven by the full operation of new branches in the retail sector, the development of operations in the distribution sector, and the austerity plans that have been initiated to raise the profit margin, especially in the production sector.

The Group finalized preparation of the strategy and investment and business plans for the upcoming years, which will be based on expanding in the current main activity sectors and exiting from companies that realize losses. Part of this plan has been implemented by disposing the assets and liabilities of commercial operations to Aventus Global Trading - a subsidiary, the disposal of the Group's investment in Qutrob for Audio and Visual Media Production Company - an associate company.

Procedures and Instructions Applicable on Companies Listed in Saudi Capital Market Whose Accumulated Losses Reach 20% or more out of the Capital Thereof will continue to apply.