• Revenue decreased due mainly to the reduction in production.

• Costs of sales decreased due to the decrease in production.

• Decrease in the selling & distribution expense due to the decrease in quantities sold due to decrease in production.

• Decrease in general and admin expenses due to software license cost incurred in similar quarter in last year.

• Finance charges decreased due to the reduction in interest rate.

• Decrease in other incomes.

• Revenue decreased mainly due to the reduction in production.

• Cost of sales decreased due to decrease in production.

• Decrease in the selling & distribution expense due to the decrease in quantities sold due to the reduction in the production.

• Decrease in general and admin expenses due to HOP adjustment incurred in the previous quarter.

• Finance charges increased due to the increase in the utilization of bank loans.

• Zakat expense decreased mainly due to revised calculation in previous quarter.

• Other incomes decreased compared to the previous quarter as a result of recording Reversal of Impairment of the Plant, Machinery and Equipment in the previous quarter.

As disclosed in note 5 to the interim condensed consolidated financial statements, the Group reversed SR 181 million of previously recognized impairment loss on property, plant and equipment in the consolidated statement of profit or loss and other comprehensive income which resulted in increase in net profit for the year ended December 31,2024 by SR 181 million, a decrease in accumulated losses and an increase in net book value of property, plant and equipment as of March 31, 2025 and December 31, 2024 by SR 181 million, as disclosed in these interim condensed consolidated financial statements, the Group adjusted depreciation as a result of reversing the impairment of property, plant and equipment mentioned above, the difference between depreciation charge based on carrying value and revised carrying value of property, plant and equipment amounted to SR 1.2 million which has been charged to the profit or loss and other comprehensive income for the period ended March 31, 2025.

The impairment loss reversal was determined based on the management’s estimates of the future projections using various assumptions that resulted in a higher recoverable value for the property, plant and equipment to the corresponding carrying value.

Due to the following, we were unable to obtain sufficient appropriate evidence to complete our review procedures for the period ended March 31,2025:

- Lack of supporting evidence of management’s key assumptions for prospective financial information used to determine recoverable value; and

- Insufficient responses to our queries regarding the assumptions that led to reversals of impairment loss and how the current financial performance of the Group supports such impairment loss reversal and mitigates the requirement for any further impairment loss recognition.

Consequently, we are unable to determine whether the impairment loss reversal is appropriate or any further impairment loss is required or not and whether any necessary adjustments are required in the reported results for the period ended March 31, 2025 and the carrying value of property, plant and equipment and accumulated losses as of March 31, 2025 and December 31, 2024, as disclosed in these interim condensed consolidated financial statements.

Our audit opinion on the consolidated financial statements of the Group for the year ended December 31, 2024 was also modified in respect of the same matter.

Qualified Conclusion

Except for the potential effect and adjustments to the interim condensed consolidated financial statements that we might have become aware of had it not been for the matter described in Basis of Qualified Conclusion, based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements have not been prepared, in all material respects, in accordance with IAS 34 as endorsed in the kingdom of Saudia Arabia.

Material Uncertainty Relating to Going Concern

We draw attention to Note 2.4 of the interim condensed consolidated financial statements which indicate that the Group has incurred gross loss and operating loss of SR 25 million and SR 40 million, respectively for the period ended March 31, 2025; further, its negative cashflows from operating activities were SR 0.7 million for the period ended March 31, 2025, mainly due to decline in revenue. The Group’s current liabilities exceeded its current assets by SR 580 million as of March 31, 2025. Additionally, the Group is in breach of SIDF loans’ financial covenants and has defaulted in repaying loans instalments as of March 31, 2025 and December 31, 2024. These conditions, along with other matters as set forth in Note 2.4 indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

Other matter

The interim condensed consolidated financial statements of the Group for the three-month period ended March 31, 2024 were reviewed by another auditor who issued an unmodified review report on those interim condensed consolidated financial statements on 7 Dhual-Qa'dah 1445H (corresponding to May 15, 2024).

As of March 31, 2025, the Accumulated Losses amounted to SAR 43.8 million representing (18.6%) of the Capital; compared to Retained Earning of SAR 5.8 million representing 2.5% of the Capital as of December 31, 2024.

As of March 31, 2025, the Accumulated Losses and Statutory Reserve amounted to SAR 43.8 million and SAR 6.4 million, respectively, in total representing (15.9%) of the Capital; compared to Retained Earning and Statutory Reserve of SAR 5.8 million and SAR 6.4 million, respectively, in total representing 5.2% of the Capital.