- A decrease in gross profit from continuing operations by approximately 1.2 million SR, mainly due to a decrease in Advertising sector gross profit by approximately 0.9 million SR as a result of drop in the sector’s revenues, due to the expiry of an advertising site lease contract and a decrease in the Distribution sector by approximately 0.5 million SR.

- An increase in general and selling expenses by approximately 4.9 million SR, mainly due to:

Recording financial reorganization expenses of approximately 1.75 million SR, fees for lawsuits and claims amounting to 1 million SR, in addition to expenses for settling employment contract obligations of approximately 2.2 million SR recognised in the current quarter.

- An increase Zakat provision by approximately 1.1 million SR.

This increase was partly offset by:

- An increase in the group's share of the results from associate companies' operations by approximately 1.7 million SR.

- A Gain from the disposal of shares in an associate company amounting to approximately 1.1 million SR, representing the Group’s profit from Integrated Production Company (a subsidiary) disposal of its stake in Qutrob Production Company (an associate).

- The comparative period of prior year also included losses from discontinued operations of around SAR 0.8 million SR (Aventus Global Trading Company - a subsidiary company), where the assets were sold and the liabilities related to its commercial operations transferred to the buyer.

- The decrease in general and selling expenses by approximately 22.1 million SR, mainly due to:

- In the current quarter there was recording of financial reorganization expenses of approximately 1.75 million SR and fees for lawsuits and claims amounting to 1 million SR, in addition to expenses for settling employment contract obligations of approximately 2.2 million SR.

However, the previous quarter of the year included the recording of:

1- Provision for slow moving inventory of approximately 22.6 million SR.

2- Impairment losses in trade receivables and other debit balances of around 5.4 million SR.

- In the current quarter there was a gain from the disposal of shares in an associate company amounting to approximately 1.1 million SR, representing the Group’s profit from Integrated Production Company (a subsidiary) disposal of its stake in (Qutrob Production Company (an associate) and a decrease in Zakat provision by approximately 3.1 million SR.

This decrease in losses was partly offset by:

- The decrease in the in the group's share of the results from associate companies' operations by approximately 2.1 million SR.

As shown in note (6) for investments in associate companies using the equity method in the accompanying interim condensed consolidated financial statements, which indicates that the group’s investment in Wunderman Thompson MENA, an associate company that was acquired in previous years, which was accounted for using the equity method based on financial statements prepared by the company’s management in the amount of SAR 21,228,290 in the group’s interim condensed consolidated statement of financial position as at June 30, 2023, and the group’s share of the company’s comprehensive income was included above based on financial statements prepared by the company’s management, amounting to a comprehensive income of SAR 1,185,290 in the group’s interim condensed consolidated statement of profit or loss and interim condensed consolidated statement of other comprehensive income for the period then ended. We were unable to obtain sufficient evidence directly or through alternative procedures regarding the Group's investment balance in the above company as at June 30, 2023, as well as the Group's share of the net comprehensive income of the above company for the same period, and accordingly, we were not able to determine whether it is necessary to make any adjustments to those amounts.

Material uncertainty relating to going concern:

We draw attention to note (2/4) to the interim condensed consolidated financial statements, which indicates that the Group’s accumulated losses amounted to SAR 119.8 million as at June 30, 2023, representing 30% of the company’s share capital, (31 March 2023: amounted to SAR 82.8 million, representing 166% of the company’s share capital). Also, the group has negative cash flows from operating activities amounted to SAR 7.6 million as at June 30, 2023 (30 June 2022: amounted to SAR 4.7 million), and the total comprehensive loss for the three-month period ended June 30, 2023, amounted to SAR 11.2 million. These circumstances indicate the existence of a material uncertainty that may cast doubt on the Group's ability to continue as a going concern. As disclosed in note (2/4), The management has made an assessment of the Group's ability to continue as a going concern. Accordingly, these interim condensed consolidated financial statements have been prepared on the going concern basis. Our conclusion on this matter has not been modified.

-The accumulated losses as on June 30, 2023, amounted to around 119.8 million SR, or 30% of the capital of 400 million SR as on June 30, 2023 (around 82.8 million SR, or 166% of the Capital of 50 million SR as on March 31, 2023).

The reasons for the decrease in accumulated losses percentage to the company’s capital are mainly due to:

-Increasing the company’s capital by 350 million SR by issuance of 35 million rights priority shares based on the approval of the extraordinary general assembly of shareholders on April 2, 2023. The company’s capital after the increase is 400 million SR as on June 30, 2023 (50 million SR as of March 31, 2023).

This decrease in losses was partly offset by:

-The total costs related to company’s capital increase by a way of issuing priority rights shares, which were approved by the extraordinary general assembly of shareholders, and subscribed in full during the period ended June 30, 2023, amounted to 26,384,139 SR was recorded directly as a deduction from the equity attributable to the shareholders of the parent company in accumulated losses as these costs are related to an equity transaction.

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.