• loss arising from fair valuation of biological assets ‎amounts to SAR 33.8 million.‎

• Recognizing provision SR 22.31 million related to ‎Inventory, Zakat, Impairment of an asset under ‎construction ‎

‎1.‎ As of December 31, 2023, the net book value of ‎properties, machinery, and equipment, capital work ‎in progress, and rights-of-use assets (referred to ‎collectively as "assets") disclosed in the company's ‎financial position amounted to SAR 112.45 million, ‎SAR 26.56 million, and SAR 12.51 million, ‎respectively. Due to a significant decrease in cash ‎generated from sales of the fish and shrimp farm and ‎other business operations, as well as the accumulated ‎losses incurred by the company in the current and ‎prior years, the company's management performed ‎an impairment assessment on its assets as of ‎December 31, 2023. This assessment involved ‎comparing the book values of the assets to their ‎recoverable amounts. Based on the company's ‎management assessment, it was concluded that there ‎is no need to recognize an additional impairment loss ‎on its assets as of December 31, 2023. We have ‎examined and tested the judgments, assumptions, ‎and key estimations used by the company's ‎management, including the appropriateness of the ‎valuation methodologies. In our view, some key ‎assumptions and sources of information or inputs ‎used in determining the recoverable amount were ‎not adequately supported. Had the company's ‎management used assumptions and information ‎sources supported with reasonable basis, some items ‎in the accompanying financial statements and related ‎disclosures could have been materially affected. The ‎impact on the financial statements has not been ‎determined.‎

‎2.‎ As stated in Note 11 of the accompanying financial ‎statements, the company's management was unable ‎to access the fair value of the fish as of December 31, ‎‎2022, due to the lack of appropriate tools for ‎inventory valuation. Therefore, it was presented at ‎cost amounting to SAR 12.9 million as of that date. ‎This represents a departure from the financial ‎reporting framework requirements. We were unable ‎to obtain relevant financial information related to the ‎fair value of fish in the financial position as of ‎December 31, 2022, and the change in fair value of ‎fish in the statement of profit or loss and other ‎comprehensive income for the years ended December ‎‎31, 2023, and 2022. Consequently, we were unable ‎to perform the procedures we deemed necessary.‎

Material Uncertainty Related to Going Concern

We draw attention to Note 2-4 in the financial statements, ‎which indicates that the company incurred a net loss of SAR ‎‎91.4 million during the year ended December 31, 2023, and ‎its accumulated losses amounted to SAR 256 million as of ‎that date, representing 64% of the company's capital. ‎Additionally, as of December 31, 2023, the company's ‎current liabilities exceeded its current assets by SAR 44 ‎million. As stated in Note 2-4, these events and conditions ‎indicate the existence of a material uncertainty regarding the ‎company's ability to continue as a going concern. Our ‎opinion has not been modified in respect of this matter.‎

‎- The company has changed its accounting policies by ‎implementing the fair value model for the valuation of ‎investment properties starting from the second quarter of ‎‎2023. The company has followed all guidelines and ‎regulations in accordance with the standards and the Capital ‎Market Authority, including appointing Certified valuers and ‎obtaining two valuations, adopting the lower value.‎

‎- In reference to the qualified opinion (1) in the auditor's ‎report concerning the impairment evaluation on the ‎company's assets as of December 31, 2023, the company ‎wishes to clarify the following:‎

In compliance with International Accounting Standards, ‎specifically International Accounting Standard 36 ‎‎"Impairment of Assets", the company has proactively taken ‎measures in this regard by appointing a certified appraiser for ‎fixed assets (an independent appraiser certified by the Saudi ‎Authority for Accredited Valuers). The aim of this ‎appointment was to ensure that the company's assets are ‎recorded at an amount not exceeding their recoverable ‎amount.‎

Based on the evaluation results conducted by the certified ‎appraiser, it was found that the fair value of the fixed assets ‎exceeds their book value.‎

Therefore, it can be concluded that there is no need to record ‎an impairment of these assets accordingly.‎

‎- Regarding Qualified Opinion (2) mentioned in the attached ‎report with the financial statements regarding biological ‎assets (Fish), the company evaluated the biological assets ‎starting from the third quarter of 2023 according to ‎accounting standards. The company was unable to physically ‎count the fish as of December 31, 2022, due to the absence of ‎means to verify the quantities of fish in the sea at that time. ‎Therefore, the company could not access the fair value of the ‎fish at that date. Hence, this Qualification was made for that ‎period, with the expectation that it will be resolved in the first ‎quarter of 2024.‎