Ash-Sharqiyah Development Co. — Capital/Financing Update 2020

Apr 19, 2020

Addendum announcement from Asharqiayh Development Company regarding its announcement of ownership of the Granted Land

6060 · 19/04/2020 15:30:54 · Announcement #58570 · View on Saudi Exchange

Addendum announcement from Asharqiayh Development Company regarding its announcement of ownership of the Granted Land

Element List	Explanation
Introduction	With reference to the announcement of Asharqiyah Development Company on Tadawul platform on 09/06/1441 corresponding to 03/02/2020 AD, which was about the transaction of the company’s ownership of the goveremental grant land, which is located in the Al-Fadhili area , based on the Royal Decree No. 4/1016 of 03/06/1406 AH, on which the Council of Ministers Decision No. 288 issued on 30/05/1441 AH was based on the ownership of what it reveals of the land delivered to it, and with reference to the decision issued by the Ministry of Environment, Water and Agriculture No. 1441/1062/450 dated 06/05/1441 AH to own Asharqiyah Development Company has a total area of (72,178,700 square meters) - seventy two million one hundred and seventy eight thousand seven hundred meters Square .
Date of Posting the Previous Announcement of Development on Tadawul's Website	2020-02-03 Corresponding to 1441-06-09
URL of the Previous Announcement	Click Here
Change on the Development	Asharqiyah Development Company would like to announce to its valued shareholders that the issuance of the land instrument is under implementation with the competent authorities and the company expects to complete the transaction and issue the instrument after resuming work with government agencies after their suspension due to the precautionary measures and preventive measures to confront the new Corona virus .
Financial Impact on the change	As the reflection of the financial impact on this decision was negative in the short term after excluding the value of the difference in tha land recorded in the company’s lists from the retained earnings, knowing that the company had recorded in its accounts an area of 101,254,000 square meters in 2017, based on the surveyed which prepared by Specialized bodies under the supervision of the Environment, Water and Agriculture`s Ministry , where the total value of the land registered at that time was evaluated in the amount of (220,683,053) Saudi riyals, it recorded as retained earnings at that time and accordingly the entire previous and subsequent losses of the company were amortized until 31/12/2019 . so that the retained earnings decreased until they reached ( 130,336,847) Saudi riyals - before add the value of difference`s area - , Given that the ownership decision referred to above was issued during the year 2020, the company had record it in 2019 financial statements based on direct guidance from its legal auditor, who recommended that the financial impact resulting from the issuance of this decision be shown in the lists of fiscal year 2019 based on international standard No. (10) Subsequent events to the balance sheet date, which resulted that difference between what was previously proven and what the company actually owned as it appeared in the Ministry of Environment, Water and Agriculture decision referred to above, which resulted in the need to exclude the difference in area, which is 29075300 square meters from the company’s records ,Where The total value of the excluded land area was valued at (63,369,605) Saudi riyals using the weighted average equation . the company excluded the entire value of the difference from the retained earnings, so this account in the company’s lists decreased to (66,967,242) Saudi riyals, which led to a significant increase in the rate of The company's losses for the fiscal year 2019, as well as the decrease in the book value per share from 28.36 riyals to 19.36 riyals.
Additional Information	The financial impact is expected to be positive in the long run, after allowing listed companies to use the fair value or reassessment model to measure real estate and investment properties for financial periods beginning during or after 2022 according to International Accounting Standards IFRS and approved by the Saudi Organization for Certified Public Accountants (SOCPA). Which allows the company to revalue the land at its fair market price .The company will announce what will happen in a timely manner

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