- The group's revenues increased by 38%.

25% lower cost of revenue

General expenses decreased by 24%.

Finance costs decreased by 82%.

The group's revenue increased by 5%.

Cost of revenue decreased by 3%.

- A decrease in the provision for credit losses by 27%

Finance costs decreased by 64%.

The group's revenue increased by 36%.

25% lower cost of revenue

Finance costs decreased by 59%.

- Not recording subscription expenses compared to the same period of the previous year, when an amount of 3,995,600 subscription expenses was recorded.

With reference to note (4) on the accompanying interim condensed consolidated financial statements, the book value of goodwill amounted to this amount of 22,159,064 Saudi riyals, and we were unable to obtain sufficient and appropriate audit evidence about the recoverable amount of goodwill, and therefore we were unable to determine whether there was any necessary adjustment on the consolidated financial statements as at December 31, 2022 and June 30, 2023, as we were unable to verify this through appropriate review procedures.

The conservative conclusion

Based on our review, and with the exception of the potential effects of what is stated in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that makes us believe that the accompanying unaudited interim condensed consolidated financial statements for the six-month period ended on June 30, 2023 for Al Baha Investment and Development Company - a Saudi joint stock company are not prepared from All material aspects are in accordance with International Accounting Standard No. (34) "Interim Financial Report" approved in the Kingdom of Saudi Arabia.

Draw the attention of

We would like to draw attention to Note (8) on the preliminary condensed unaudited financial statements, which refers to the issue of exchanging assets with the Modern Bright Company for General Contracting, where the company made a provision to meet the losses resulting from the asset exchange contract with the Modern Bright Company for General Contracting in the amount of 74,003,717 Saudi riyals, as the group's management believes that the assets that are supposed to be obtained in exchange for the exchange deal are not important and there is a significant decrease on them as a result of their obsolescence, and accordingly a provision has been formed against them in the book value of the performance obligations that are committed to presenting them to the other party. In addition, the previously issued ruling obliging Al-Baha Investment and Development Company to implement the terms of the contract with the Modern Bright Company was confirmed. Our conclusion has not been modified based on this matter.

The group applied IFRS No. (5) “Non-current Assets Held for Sale and Discontinued Operations”, as this standard requires that assets that meet the criteria for classification as held for sale be measured at book amount or fair value less selling costs, whichever is less And that the depreciation of those assets be stopped, and that the assets that meet the criteria for classification as held for sale be presented separately in the statement of financial position and that the results of non-continuing operations be presented separately in the statement of comprehensive income, and accordingly the group’s management has reclassified these assets (note 8) to a separate item under the name of non-current assets held for sale.

The consolidated financial statements of the Group for the year ending on December 31, 2022 AD were reviewed by another auditor, who expressed a modified opinion with a paragraph drawing attention on the provision for potential claims on 9 Ramadan 1444 AH corresponding to March 31, 2023 AD. In addition, the preliminary condensed consolidated financial statements were examined The group’s unaudited for the three-month period ending on March 31, 2023 AD and the unaudited interim condensed consolidated financial statements for the three-month and six-month periods ending on June 30, 2022 AD by another auditor who expressed a modified conclusion with a paragraph drawing attention to the provision for potential claims item on Dhu Al-Qi’dah 2 1444 AH, corresponding to May 22, 2023 AD, and on Muharram 2, 1444 AH, corresponding to July 30, 2022 AD, respectively.

The company would like to clarify to the shareholders that the accumulated losses as of June 30, 2023 amounted to 85,271,259 Saudi riyals, which is equivalent to 28.71% of the company's current capital, amounting to 297,000,000 Saudi riyals.

Earnings per share during the current period (six months) for the year 2023 AD were calculated on the basis of the parent company’s share of net profit amounting to (347,890) riyals (after excluding the share of minority interests).

The procedures and instructions for companies whose shares are listed on the Saudi Stock Exchange, whose accumulated losses amounted to 20% or more of their capital, will be applied.