PARTNERSACCOUNTANTS

o
DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
e
FINANCIAL STATEMENTS
AS OF DECEMBER 31,2015
PARTNERSACCOUNTANTS
License No. 40
o
Chartered Accountants & Consultants
Riyadh - Kingdom of Saudi Arabia
DARFIN CAPITAL
(A SAUDI SOLE PROPIETORSHIP)
FINAIICIAL STATEMENTS
AS OF DECEMBER 31,2015
INDEX
PAGE
Auditor's Report
1
Balance Sheet
2
Statement of Income
3
Statement of Owner's Equity
4
Statement of Cash Flows
5
Notes to the Financial Statements
6-13
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AUDITOR'S REPORT
To the Owner
DARIIN CAPITAL
(A Saudi sole proprietorship)
Riyadh, Saudi Arabia
Scope of Aud it:
We have audited the accompanying balance sheet of DARFIN CAPITAL (a Saudi sole
proprietorship) as of December 31. 2015, and the related statements of income, Owner's equity
and cash flows for the year then ended, and notes lvhich form an integral part ofthese financial
statements as prepared by the Management and presented to us with all the necessary
infonnation and explanations. These financial statements are the responsibility of the DARFIN
CAPITAL's management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
rvhether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting standards used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
Unqualified opinion:
In our opinion, the financial statements present fairly, in all material respects, the financial
position of DAR-FIN CAPITAL as of December 31,2015, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted accounting
standards appropriate to the nature ofthe entity.
Associated Accountants
(License No. 67)
13
Jumada,1l 1437 H
(22 March 201 6 G)
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2290444 Fax r 011 2290335-E-mail :[email protected]
Box
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DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
BALANCE SIIEET
AS OF DECEMBER 31, 2015
Notes
2015
2014
SAR
SAR
2,851,476
3,482,705
ASSETS
Current assets
3
Cash and cash equivalent
Accounts receivable
4
Prepaid expenses and other assets
Total current assets
542,500
298,841
62,6s0
3,,692,817
3,545,355
Non-current assets
Property and equipment
Intangible assets
2&5
3,s90
17,950
2&.6
10,81 0
3,590
Total non-current assets
28,760
J,696,407
TOTAL ASSETS
1,5 74, r r5
LIABILITIES AND OWNER'S EQUITY
Current liabilities
Accounts Payable
Accrued expenses and other liabilities
Provision for Zakat
3,331
7
417,738
404,829
513,730
300,549
82s,898
814,279
End-of-service indemnities
770,394
676,27r
Total non-current liabilities
770.394
676,27).
1,596,,292
1,490,550
Retained eamings
2,000,000
100,11s
2,000,000
83,565
Total owner's equity
2,100,11s
2,083,565
TOTAL LIABILITIES AND OWNER'S EQUITY
3,696,407
_ ];l!]11
Total current liabilities
Non-current liabilities
TOTAL LIABILITIES
Owner's equity
Share capital
The accompanying notes form an integral part ofthese financial statements
-2
-
DARFIN CAPITAL
(A SAUDI SOLE PROPzuETORSHIP)
STATEMENT OF'INCOME
AS OF DECEMBER 31. 2015
Notes
Revenues
General and administrative expenses
2014
SAR
3,705,000
3,846,000
10
(3,s84,170)
8
120,830
(104,280)
Income before Zakat
Zakat Provision
2015
SAR
(3,771,001)
68,999
(100,797)
__l{f5q _ litt2E
NET INCOME (LOSS) FOR THE YEAR
The accompanying notes form an integral part ofthese financial statements
-3-
DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
STATEMENT OF OWNER'S EQUITY
AS OF DECEMBER 31,2OI5
capital
SAR
Share
Retained
earnings
SAR
Total
SAR
2014
Net (loss) lor the year
2,000,000
-
115,363
(31,7e8)
Balance at December 31,2014
2,000,000
83,s6s
Balance at December 3 l, 20 I 3
2,115,363
(3r,798)
2,083,s65
2015
-
Net income for the year
Balance at December 31,2015
2.000.000
16,550
100,115
16,550
2,100,115
The accompanying notes form an integral part ofthese financial statements
-4-
DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
STATEMENT OF CASH FLOWS
AS OF DECEMBER 3I.2015
Dec'2015
SAR
OPERATING ACTIVITIES
Income before Zakat
Adjustments for net income:
Depreciation and amortization
End of Service Provision
Dec'2014
SAR
120,830
68,999
25,170
126,033
94,123
96,396
Changes in operating assets and liabilities:
Accounts receivable
(s42,s00)
(236,191)
Prepaid expenses and other assets
Accounts Payable
Accrued expenses and other liabilities
Zakat Paid
3,331
(
(9s,992)
181,723
10,000)
279,190
(3,15 1)
Net cash from in operating activities
(631,,229)
739-190
Net change in cash and cash equivalents
(631,22e)
739,190
Cash and cash equivalents, January 1, 2015
3,482,705
2,743,515
Cash and cash equivalents, December 31,2015
2,851,476
_ ]4nl9t
The accompanying notes form an integral part ofthese financial statements
-5
DARFIN CAPITAL
(A SAUDI SOLE PROPzuETORSHIP)
NOTES TO THE FINANCIAL STATEMENETS
AS OF DECEMBER 3I.2OI5
1.
ORGANIZATION AND ACTIVITIES
Dar of Finance and Investment Capital ("DAR-FIN CAPITAL') is a Saudi sole proprietorship
owned by Mr. Abdul Rahman Bin Eid Al Harbi and operating under commercial registration
No. 1010228764 dated Safar 2, 1428H (February 20, 2007c).
DARIIN CAPITAL activity is summarized by provision of advisory and arangement
services related to equity securities according to the letter of Chairman in charge of Saudi
Capital Market Authority ("CMA') No.1267lRH dated Dhul-Qa'da 21,1427H corresponding
to December 12,2006.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in accordance with the Standard
of General Presentation and Disclosure issued by the Ministry of Commerce and in
compliance with the accounting standards issued by the Saudi Organization for Certified
Public Accountants. The following is a summary of significant accounting policies applied
by the DARFIN CAPITAL:
Accounting convention
The financial statements are prepared under the historical cost convention and accrual
convention.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting
standards requires the use of estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the year.
Although these estimates are based on management's best knowledge of current events and
actions, actual final results ultimately may differ from those estimates.
Revenue recognition
Revenues are recognized upon services are rendered to the clients and are stated net
discounts, if any.
Expenses
General and administrative expenses include direct and indirect costs
-6-
of
DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
NOTES TO THE FINANCIAL STATEMENETS (CONT]NUED)
AS OF DECEMBER 3I.2015
Property and equipment
Property and equipment are stated at cost less accumulated depreciation. Expenditure on
maintenance and repairs is expensed, while expenditure for betterment which increases the
useful life of the asset is capitalized. Depreciation is provided over the estimated useful lives
of the applicable assets using the straight line method. The estimated rates of depreciation of
the principal classes ofassets are as follows:
Percentage
Furniture & Fixtures
Office Equipment
Computers Equipment
Communication Equipment
Motor Vehicles
15Yo
15%
l5Yo
1syo
t5Y.
Intangible assets
Intangible assets mainly comprise of leasehold improvements, registration fees with Saudi
capital Market Authority (cMA) and others. Leasehold improvements include the amounts
paid in excess of the fair market values of acquired assets. Leasehold improvement is
amortized using the straight-line method over the lease period, while registration fee is
amortized over 5 years.
Impairment
At
each balance sheet date, DARIIN reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered
an impairment loss. lf any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss. where it is not possible to
estimate the recoverable amount of an individual asset, DAMIN estimates the recoverable
amount ofthe cash generating unit to which the asset belongs.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. lmpairment losses are recognized as an expense immediately in the
consolidated statement of incomc.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cashgenerating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been
determined had no impaiment loss been recognized for the asset (cash-generating unit) in
prior years. A reversal of an impairrnent loss is recognized as income immediately in the
consolidated statement of income.
-1-
DARFIN CAPITAL
(A SAUDr SOLE PROPRTETORSHTP)
NOTES TO THE FINANCIAL STATEMENETS (CONTINUED)
AS OF DECEMBER 31. 2015
Foreign currency translation
Foreign currency transactions are translated into Saudi Riyals at the rates of exchange
prevailing at the time of the transactions. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet date are translated at the exchange rates prevailing at
that date. Gains and losses from settlement and translation of foreign currency transactions
are included in the statement of income.
End-of-sen ice indemnities
End-of-service indemnities are provided in the financial statements based on Saudi Arabian
Labor regulations.
Zzkat
DARFIN is subject to the regulations of the Directorate of Zakat
and lncome Tax ("DZIT") in
the Kingdom ofSaudi Arabia. The Zakat is provided for on the accrual convention. The Zakat
charge
is computed on the Zakat base. Any difference in the estimate and the final
assessment is recorded when the
final assessment is approved, at which time the provision is
cleared.
Leasing
Leases are classified as capital lease whenever the terms ofthe lease transfers substantially all
ofthe rewards and risks of ownership to the lessee at the lower ofthe fair market value ofthe
leased asset at the inception of the lease or the present value of the minimum lease payments.
Lease payments are allocated between finance charges and reduction ofthe lease obligation in
order to produce a constant periodic rate of charge on the remaining balance of the obligation.
Finance charges are charged directly to the income.
Capitalized leased assets are depreciated over the lease period.
Rentals payable under operating leases are charged to the consolidated statement of income
on a straight line basis over the term ofthe operating lease.
3.
CASH ONIIAND AND ATBANKS
Cash on hand
Cash at banks
-8
2015
2014
SAR
SAR
4,502
2,846,974
3,481,059
2,8s1,476
3,482,705
1,646
DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
NOTES TO THE FINANCIAL STATEMEIIETS (CONTINUED)
AS OF DECEMBER 31.2015
4.
PREPAID EXPENSES AIID OTHER ASSETS
20ts
2014
SAR
SAR
179.340
Prepaid Rent
Prepaid fees
Prepaid medical insurance
Employees advances
20,000
97,167
42,650
4,000
_
5.
18,334
_ 2e3$11
__
p,651
PROPERTY&EQUIPMENT
Cost:
Furniture and fixtures
Office equipment
Communication equipment
Computer equipment
Vehicle
Total
Accumulated denreciation:
Fumiture & Fixtures
Office equipment
Communication equipment
Computer equipment
Vehicle
Total
Book Value
2014
Additions
Disposals
201s
9s,700
95,700
104,851
104,851
80,002
80,002
162,244
100,520
543,317
2014
Additions
(9s,699)
(104,851)
(80,002)
(r62,244)
(82,s71)
(s2s,367)
t7,950
-9
162,244
100,520
543,317
-
(14,360)
(14,360)
Disposals
20ts
(95,699)
(104,8s1)
(80,002)
(162,244)
(96,931)
(s39,727)
3,590
DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
NOTES TO THE FINANCIAL STATEMENETS (CONTINUED)
AS OF DECEMBER 3I" 2015
6.
INTANGIBLE ASSETS
Leasehold
improvements
SAR
Registration fees
And others
SAR
Total
SAR
Cost
January 1, 2015
557,861
823,3s1
1,381,2t2
557,861
823,351
1,381,212
l)
(1,370,402)
Additions
December 31, 2015
Accumulated amortization
January
l,
2015
Additions
(547,0s1)
(
December 31, 2015
(823.3s
10,810)
(ss7.861)
(
10.8 r 0)
(1.38r.2r2)
(823.3s1)
Net book value
December
3
l,
201 5
December 31, 2014
7.
10,810
-
10.810
ACCRUED EXPENSES AND OTHER LIABILITIES
2015
2014
SAR
SAR
Accrued vacation and tickets
1s9,648
258,090
Other accrued expenses
417,738
8.
424,060
89,670
-
_jl2t3!
ZAKAT
a) Adjusted income for the year was calculated as follows:
2015
2014
SAR
SAR
lncome before Zakat
Provisions
Nondeductible expenses
Adjusted income
1,4r4,9s3
-10
120,830
68,999
94,123
96,396
1,200,000
1,200,000
-
1;!I;2L
DARFIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
NOTES TO TIIE FINANCIAL STATEMENETS (CONTINUED)
AS OF DECEMBER 31. 2015
b) Zakat base for the year is comprised ofthe followings:
Share capital
Beginning end of service provision
Adjusted income for the year
Beginning retained earnings
Less:
Property, plant and equipment
Intangible assets
2015
SAR
2014
SAR
2,000,000
2,000,000
676,271
579,875
1,414,953
1,365,395
83,565
115,363
4,174,789
4,060,633
(3,se0)
(
17,950)
(10,810)
Zakatbase
4,171,,199
4,031,873
2015
2014
SAR
c) The movements in Zakat provision for the year are as follows:
SAR
Balance at the beginning ofyear
Additions during the period
Payments during the period
300,549
104,280
Balance at the end of year
404,829
202,903
100,797
(3,1s 1)
300,549
d) Zakat status:
The Establishment and its related branches finalized its Zakat assessment with department
of Zakat and income tax("DZIT") up to the end of Dhul Htjja 1432 H.(Conesponding to
November 26,2011).In the year 1433H, House of Finance and Investment Capital branch
'
9.
was converted into sole proprietorship operating under main C.R and submitted Zakat
retum for the year 1433H and obtained restricted Zakat Certificate.
SHARECAPITAL
-11-
DARFIN CAPITAL
(,\ SAUD] SOLE PROPRIETORSHIP)
\OTES TO THE FINANCIAL STATEMENETS (CONTINUED)
.{S OF DECEMBER 3I.2OI5
DARfIN
share capital is determined at SAR 2,000,000
10. GENERAL AND
ADMINISTRATIVE EXPENSES
2015
SAR
Employees' salaries and benefits
Rental
Business travel
Subscription & fees
Training & Internet
2,830,274
2,972,846
538,020
53 8,014
27,801
40,000
66,076
I1,400
9,202
25,000
Telephone and fax
Professional fees
Stationery and printing
4,274
Maintenance
5 045
8,12;
20,000
6,396
1,055
Amortization
Depreciation
Miscelianeous
10,810
14,360
73,029
Total
I 1.
2014
SAR
3,584,170
94,160
31,873
33,407
3,777,001
FINANCIAL INSTRUMENTS
Fair value
The carrying values for cash and cash at banks, accounts receivable, accounts payable and
other receivables and payables are deemed to approximate their carrying amounts due to their
short-term nature.
DARFIN does not utilize derivative financial instruments to manage commission rate risks
and foreign currency exchange due to factors explained below:
Commission rate risk
This comprises various risks related to the effect ol changes in commission rates on the
Darfin balance sheet and cash flows. DARFIN did not have material assets or liabilities with
floating commission rates on December 31 . DARFIN manages its cash flows by controlling
the timing between cash inflows and outflows. Surplus cash is invested to increase DARFIN
commission income through holding balances in short-term Murabaha investment, but the
related commission rate risk is not considered to be significant.
Currency risk
is the risk that the value of a financial instrument will fluctuate due to changes in foreign
exchange rates. Management monitors fluctuations in foreign currency exchange rates, and
believes that DARFIN is not exposed to significant currency risk since DARFIN functional
currency is the Saudi Riyal, in which the DARFIN transacts, which is currently fixed, within
a narow margin, against the U.S. dollar.
It
-12-
DARIIN CAPITAL
(A SAUDI SOLE PROPRIETORSHIP)
NOTES TO THE FINANCIAL STATEMENETS (CONTINUED)
AS OF DECEMBER 31. 2015
Credit risk
It is the risk that other parties will fail to discharge their obligations and cause DARFIN to
incur a financial loss. Financial instruments that subject DARFIN to concentrations of credit
risk consist primarily of cash balances and accounts receivable. DARFIN deposits its cash
balances with a number of major high credit rated financial institutions and has a policy of
limiting its balances deposited with each institution. DARIIN does not believe that there is a
significant risk of non-performance by these financial institutions. DAR_FIN does not
consider itself exposed to a concentration of credit risk with respect to accounts receivable
due to its diverse customer base operating in various industries and located in many regions.
Liquidity risk
It is the risk that DAMIN will encounter difficulty in raising funds to meet commitments
associated with financial instruments. Liquidity is managed by periodically ensuring its
availability in amounts sufficient to meet any future commitments. DAMIN does not
consider itself exposed to significant risks in relation to liquidity.
DARFIN believes that it is not exposed to any significant risks in relation to the aforementioned
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