Annual financial statement
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT 31 December 2024
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT At 31 December 2024 INDEX PAGES Independent Auditor’s Report 1 - 5 Consolidated Statement of Financial Position 6 Consolidated Statement of Comprehensive Income 7 Consolidated Statement of Changes in Equity 8 Consolidated Statement of Cash Flows 9 – 10 Notes to the Consolidated Financial Statements 11 – 46
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1 Ernst & Young Professional Services (Professional LLC) Paid-Up Capital (SR 5,500,000 - Five Million Five Hundred Thousand Saudi Riyal) Head Office Al Faisaliah Office Tower, 14th Floor King Fahad Road P.O. Box 2732 Riyadh 11461 Kingdom of Saudi Arabia C.R. No. 1010383821 Tel: +966 11 215 9898 +966 11 273 4740 Fax: +966 11 273 4730 ey.ksa@sa.ey.com ey.com
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Nice One Beauty Digital Marketing Company (formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2024 The attached notes 1 to 32 form an integral part of these consolidated financial statements. 6 Notes 31 December 2024 SR 31 December 2023 SR ASSETS NON- CURRENT ASSETS Property and equipment 5 90,769,561 62,972,121 Intangible assets 6 1,195,881 1,422,498 Right-of-use assets 15 12,659,770 11,582,690 ───────── ───────── 104,625,212 75,977,309 CURRENT ASSETS Inventories, net 7 254,540,000 150,784,552 Trade receivables 8 34,315,476 18,871,726 Amounts due from related parties 18 14,830,181 - Prepayments, advances and other receivables 9 71,891,581 33,898,467 Cash and cash equivalents 10 49,976,430 69,705,549 ───────── ───────── 425,553,668 273,260,294 ───────── ───────── TOTAL ASSETS 530,178,880 349,237,603 ═════════ ═════════ EQUITY AND LIABILITIES EQUITY Share capital 11 110,000,000 1,063,000 Statutory reserve 12 318,900 318,900 Retained earnings 75,539,556 84,152,623 Additional contribution to capital 13 - 27,136,000 ───────── ───────── TOTAL EQUITY 185,858,456 112,670,523 ───────── ───────── NON-CURRENT LIABILITIES Long term borrowings 14 7,894,743 13,157,899 Lease liabilities 15 8,446,505 8,008,752 Employees’ defined benefit liabilities 16 6,893,215 4,729,208 ───────── ───────── 23,234,463 25,895,859 CURRENT LIABILITIES Current portion long term borrowings 14 5,263,156 5,263,156 Current portion of lease liabilities 15 3,693,944 3,282,185 Trade payables, accruals and other payables 17 245,136,089 168,200,064 Short-term borrowings 14 61,142,696 23,258,418 Zakat provision 19 4,037,446 2,667,398 Amounts due to related parties 18 1,812,630 - Dividend payable 20 - 8,000,000 ───────── ───────── TOTAL CURRENT LIABILITIES 321,085,961 210,671,221 ───────── ───────── TOTAL LIABILITIES 344,320,424 236,567,080 ───────── ───────── TOTAL LIABILITIES AND EQUITY 530,178,880 349,237,603 ═════════ ═════════ Chief Financial Officer Chief Executive Officer Chairman of the Board of Directors Docusign Envelope ID: D437378F-2EC6-4D7F-BEB9-D1E618201259
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Nice One Beauty Digital Marketing Company (formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2024 The attached notes 1 to 32 form an integral part of these financial statements. 7 Notes 31 December 2024 SR 31 December 2023 SR Revenue 21 1,003,512,887 782,355,101 Cost of sales (734,334,014) (565,800,328) ────────── ────────── GROSS PROFIT 269,178,873 216,554,773 Selling and marketing expenses 22 (141,377,056) (144,093,192) General and administrative expenses 23 (48,850,201) (36,709,931) ────────── ────────── OPERATING PROFIT 78,951,616 35,751,650 Finance cost 24 (4,738,161) (3,125,897) Other income - net 25 852,623 2,998,729 ────────── ────────── PROFIT BEFORE ZAKAT 75,066,078 35,624,482 Zakat charge for the year 19 (3,320,892) (3,000,000) ────────── ────────── NET PROFIT FOR THE YEAR 71,745,186 32,624,482 ────────── ────────── OTHER COMPREHENSIVE INCOME Item that will not be reclassified subsequently to profit or loss: Remeasurement loss on employees’ terminal benefits 16 (799,819) (434,931) ────────── ────────── TOTAL COMPREHENSIVE INCOME FOR THE YEAR 70,945,367 32,189,551 ══════════ ══════════ Basic and diluted earnings per share 30 0.65 0.30 ══════════ ══════════ Chief Financial Officer Chief Executive Officer Chairman of the Board of Directors Docusign Envelope ID: D437378F-2EC6-4D7F-BEB9-D1E618201259
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Closed Joint Stock Company) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2024 The attached notes 1 to 32 form an integral part of these consolidated financial statements. 8 Share capital Statutory reserve Additional contribution to capital Retained earnings Total SR SR SR SR SR Balance as at 1 January 2023 1,063,000 318,900 27,136,000 59,963,072 88,480,972 Net profit for the year - - - 32,624,482 32,624,482 Other comprehensive loss - - - (434,931) (434,931) Total comprehensive income 32,189,551 32,189,551 Dividends (note 20) - - - (8,000,000) (8,000,000) ───────── ───────── ───────── ───────── ───────── Balance as at 31 December 2023 1,063,000 318,900 27,136,000 84,152,623 112,670,523 ═════════ ═════════ ═════════ ═════════ ═════════ Balance as at 1 January 2024 1,063,000 318,900 27,136,000 84,152,623 112,670,523 Net profit for the year - - - 71,745,186 71,745,186 Other comprehensive loss - - - (799,819) (799,819) Total comprehensive income 70,945,367 70,945,367 Increase in capital (note 11) 108,937,000 - (27,136,000) (81,801,000) - Contribution from the shareholders as reimbursement of IPO costs - - - 2,242,566 2,242,566 ───────── ───────── ───────── ───────── ───────── Balance as at 31 December 2024 110,000,000 318,900 - 75,539,556 185,858,456 ═════════ ═════════ ═════════ ═════════ ═════════ Chief Financial Officer Chief Executive Officer Chairman of the Board of Directors Docusign Envelope ID: D437378F-2EC6-4D7F-BEB9-D1E618201259
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2024 The attached notes 1 to 32 form an integral part of these financial statements. 9 Notes 31 December 2024 SR 31 December 2023 SR OPERATING ACTIVITIES Profit before zakat 75,066,078 35,624,482 Non-cash adjustments: Provision for/(reversal of) expected credit losses on trade receivables 8 289,920 (368,955) Provision for inventories obsolescence 7 3,424,362 5,016,915 Depreciation of property and equipment 5 2,408,096 2,331,647 Amortization of right-of-use-assets 15 3,790,719 3,776,476 Amortization of intangible assets 6 432,776 459,127 Loss/(gain) on disposal of property and equipment 74,617 (2,286,625) Gain on lease liability extinguishment 25 (975,706) (349,958) Employees’ defined benefit liabilities 16 1,562,950 1,093,239 Finance charge on lease liabilities 15 1,181,839 1,052,370 Finance cost on borrowings 24 3,556,322 2,073,527 Inventories written off - (5,982,592) ───────── ───────── 90,811,973 42,439,653 Working capital adjustments: Trade receivables (15,733,670) (4,471,792) Prepayments, advances, and other receivables (35,750,548) (17,078,198) Inventories (107,179,810) (2,094,175) Trade payables, accruals, and other payables 76,936,026 33,167,763 Changes in related parties’ balances (13,017,551) - ───────── ───────── (3,933,580) 51,963,251 ───────── ───────── Zakat paid 19 (1,950,844) (2,294,674) Employees’ defined benefit liabilities paid 16 (198,762) (209,889) Finance cost paid on borrowings (3,556,322) (2,073,527) Finance cost paid on leases (1,181,839) (1,052,370) ───────── ───────── Net cash flows (used in)/from operating activities (10,821,347) 46,332,791 ───────── ───────── INVESTING ACTIVITIES Purchase of property and equipment 5 (33,469,473) (21,159,545) Purchase of Intangible assets 6 (206,159) (856,983) Proceeds from disposal of property and equipment 3,189,321 11,789,075 ───────── ───────── Net cash used in investing activities (30,486,311) (10,227,453) ───────── ───────── FINANCING ACTIVITIES Proceeds from long term borrowings 14 - 5,908,649 Repayments of long-term borrowings 14 (5,263,156) (9,456,306) Proceeds from short-term borrowings 14 102,805,234 43,903,951 Repayments of short-term borrowings 14 (64,920,956) (44,794,876) Repayment of principal of lease liabilities 15 (3,042,583) (4,147,466) Dividends paid 20 (8,000,000) (4,493,568) ───────── ───────── Net cash flows from/(used in) financing activities 21,578,539 (13,079,616) ───────── ───────── Net (decrease)/increase in cash and cash equivalents (19,729,119) 23,025,722 Cash and cash equivalents at the beginning of the year 69,705,549 46,679,827 ───────── ───────── Cash and cash equivalents at the end of the year 49,976,430 69,705,549 ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) For the year ended 31 December 2024 The attached notes 1 to 32 form an integral part of these financial statements. 10 Notes 31 December 2024 SR 31 December 2023 SR SIGNIFICANT NON-CASH TRANSACTIONS: Transfer to capital 11 108,937,000 - Addition to lease liabilities and right of use assets 9,029,844 - Contribution of IPO costs 2,242,566 - Chief Financial Officer Chief Executive Officer Chairman of the Board of Directors Docusign Envelope ID: D437378F-2EC6-4D7F-BEB9-D1E618201259
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2024 11 1 COMPANY INFORMATION Nice One Beauty Digital Marketing Company (formerly: Product Sea Trading Company) (the “Company") is a Saudi Joint Stock Company (formerly: Limited Liability Company) registered in Riyadh; Kingdom of Saudi Arabia under Commercial Registration numbered 1010705691 dated 4 Shabaan 1438H (corresponding to 30 April 2017). On 21 May 2024, Ministry of Commerce approved the conversion of Limited Liability Company to Joint Stock Company. The registered address of the Group is: P.O 5497, Riyadh 51422, Kingdom of Saudi Arabia. The Shareholders have changed its name from Product Sea Trading Company to Nice One Beauty Digital Marketing Company with effect from 30 March 2024. The objectives of the Company and its subsidiaries (“the Group”) is the retail business of perfumes, cosmetics, soap and incense. The Group is practicing its activities through the following branches: Branch Registration No. Registration Date Product Sea for Accessories Warehouse 1010947279 27 Jumada Al-Alkhirah 1439H (corresponding to 15 March 2018G) Product Sea for Operation & Maintenance Co. 1010581040 23 Ramadan 1440H (corresponding to 28 May 2019G) Product Sea for Trading – Alsala 1010591825 21 Thul-Hijjah 1440H (corresponding to 22 August 2019G) The subsidiaries included in these consolidated financial statements are as follows: Relationship Country of Incorporation Effective ownership Principal Activity 31 December 2024 31 December 2023 Bahr Al-Montajat General Trading Co.* Subsidiary Egypt 100% 100% Retail business of perfumes, cosmetics, soap and incense Nice one Perfumes and Cosmetic Trading LLC** Subsidiary United Arab Emirates 100% 100% Retail business of perfumes, cosmetics, soap and incense Creative Reflection Marketing Co.*** Subsidiary Kingdom of Saudi Arabia 100% - Marketing Activities *On 6 Muharram 1444H (corresponding to 4 August 2022), the Group established a new Subsidiary “Bahr Al-Montajat General Trading Co.”, in which the Group owns 100% capital, for the purpose of opening same retail business as the Group in Egypt and registered under Commercial Registration (“CR”) number 190854. The subsidiary has not commenced yet the commercial business operations. **On 14 Shawwal 1444H (corresponding to 4 May 2023), the Group established a new Subsidiary “Nice one Perfumes and Cosmetic Trading LLC”, in which the Group owns 100% capital, for the purpose of opening same retail business as the Group in the United Arab Emirates and registered under license number 1149849. The subsidiary has not commenced yet the commercial business operations. ***On 24 Jumada Al-Alkhirah 1446H (corresponding to 25 December 2024), the Group established a new Subsidiary “Creative Reflection Marketing Co.”, in which the Group owns 100% capital, for the purpose of marketing business in the Kingdom of Saudi Arabia registered under CR number 1009162765. The subsidiary is recently established and is in its start-up phase. On 29 May 2024, the shareholders of the Company decided to go for an Initial Public Offering (IPO). On 29 September 2024, the Capital Market Authority’s (CMA) Board has issued its resolution approving the Company’s application for the registration and offering of 34,650,000 shares representing 30 % of Company’s share capital post listing in Saudi Stock Exchange (Tadawul).
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 12 1 COMPANY INFORMATION (Continued) On 24 November 2024, the Company announced its intention to proceed with the initial public offering and listing of its ordinary shares through the sale of 29,150,000 ordinary shares of the existing shares by the Company's existing shareholders on a pro-rata basis, and the issuance of 5,500,000 new shares. On 16 December 2024, the Company announced commencement of retail subscription period from 24 December 2024 to 25 December 2024 and institutional investors subscription period from 24 December 2024 to 25 December 2024 at an offer price of SR 35 per share. Allotment of shares to new shareholders completed on 31 December 2024 and the Company’s 5,500,000 new ordinary shares are issued subsequently on 8 January 2025 on listing and commencement of trading on the Saudi Stock Exchange. The Company also changed its legal form from closed joint stock company (“CJSC”) to Saudi joint stock company (“SJSC”) on the same day. Shareholder Pre-Offering Post-Offering No. of shares Ownership (%) Nominal value No. of shares Ownership (%) Nominal value Pre-IPO shareholders 110,000,000 100% 110,000,000 80,850,000 70% 80,850,000 Public - - - 34,650,000 30% 34,650,000 ──────── ───── ───────── ──────── ───── ───────── 110,000,000 100% 110,000,000 115,500,000 100% 115,500,000 ════════ ═════ ═════════ ════════ ═════ ═════════ 2 BASIS OF PREPERATION 2.1 Statement of compliance These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards and its’ interpretations as issued by the International Accounting Standards Board (“IASB”) as endorsed in the Kingdom of Saudi Arabia (“KSA”) and other standards and pronouncements that are endorsed by Saudi Organization for Chartered and Professional Accountants (“SOCPA”) (collectively referred to as “IFRS as endorsed in KSA”). 2.2 Basis of measurement The consolidated financial statements of the Group have been prepared in accordance with IFRS accounting standards as issued by the International Accounting Standards Board (IASB). The consolidated financial statements are prepared under the historical cost convention. 2.3 Functional and presentation currency These consolidated financial statements are presented in Saudi Arabian Riyals (“SR”), which is also the Company's functional currency. 2.4 Basis of Consolidation The consolidated financial statements of the Group comprise the financial information of the Company and its subsidiaries (note 1). Subsidiaries are all entities (including structured entities) over which the Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: • Power over the investee (i.e. Existing rights that give it the current ability to direct the relevant activities of the investee); • Exposure to risk, or rights, to variable returns from its involvement with the investee; • The ability to use its power over the investee to affect its returns. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: • The contractual arrangement(s) with the other vote holders of the investee; • Rights arising from other contractual arrangements; • The Group’s voting rights and potential voting rights.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 13 2 BASIS OF PREPERATION (Continued) 2.4 Basis of Consolidation (Continued) The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group. When necessary, adjustments are made to the consolidated financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: • Derecognizes the assets and liabilities of the subsidiary; • Derecognizes the carrying amount of any non-controlling interest; • Recognizes the fair value of the consideration received; • Recognizes the fair value of any investment retained; • Recognizes any surplus or deficit in profit or loss; • Reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities. 3 USE OF ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses and assets and liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future. These estimates and assumptions are based upon experience and various other factors that are believed to be reasonable under the circumstances and are used to judge the carrying values of assets and liabilities that are not readily apparent from other sources. 3.1 Critical accounting estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material difference in the carrying amounts of assets and liabilities within the next financial period, are presented below. The Group used these assumptions and estimates on the basis available when the financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur. Impairment of inventories Inventories are held at the lower of cost and net realizable value. When inventories become old, slow moving or obsolete, an estimate is made of their net realizable value. For individually significant amounts this estimation is performed on an individual basis. Amounts which are not individually significant, but which are old or obsolete, are assessed collectively and a provision is applied according to the inventory type and the degree of ageing or obsolescence, based on historical selling prices. This valuation requires us to make judgements, based on currently available information, about likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 14 3 USE OF ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (Continued) 3.1 Critical accounting estimates and assumptions (Continued) Provision for expected credit losses The Group reviews its accounts receivable at each reporting date to assess whether a provision for expected credit losses should be recorded in the consolidated statement of comprehensive income. In particular, judgement by management is required in the estimation of the amount and timing of future cash flows when determining the level of provision required. Such estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the provision. Estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of- use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the stand-alone credit rating). Revenue recognition - Estimating variable consideration for returns The Group estimates variable considerations to be included in the transaction price for the sale of goods with rights of return. If the transaction price includes a variable amount, the transaction price is estimated and recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Group updates its assessment of expected returns, and the refund liabilities are adjusted accordingly. Estimates of expected returns are sensitive to changes in circumstances and the Group ’s past experience regarding returns may not be representative of customers’ actual returns in the future. 3.2 Judgements The following critical judgements have the most significant effect on the amounts recognized in the consolidated financial statements: Employees’ defined benefit liabilities Defined benefit obligations to employees are determined using actuarial valuation processes. An actuarial valuation involves making various assumptions, which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation (“DBO”) is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Satisfaction of performance obligation The Group is required to assess each of its contracts with customers to determine whether performance obligations are satisfied over time or a point in time in order to determine the appropriate method of recognizing revenue. Based on the contractual terms and conditions, the Group retains the risks until the goods are delivered to the customer and after the return period has expired (if any). The Group does not take responsibility of the product subsequent to delivery and after the return period has expired and has no control over what the customer intends to do with it. Thus, the performance obligation is satisfied at a point in time upon delivery with an estimate of potential returns from customers. Judgement in accounting for IPO costs The Company has estimated total IPO cost amounting to SR 14.8 million out of which an amount of SR 2.2 million is estimated related to a primary offering (listing new shares).
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 15 3 USE OF ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (Continued) 3.2 Judgements (Continued) Judgement in accounting for IPO costs (continued) The SR 2.2 million has been split between directly attributable and indirect costs, out of which the directly attributable costs will be charged to equity upon listings. As at 31 December 2024, Company estimated SR 1.8 million as directly attributable costs and remaining SR 0.4 million as indirect expenses relating to issuance of shares. Therefore, SR 0.4 million has been recorded in the consolidated statement of comprehensive income and SR 1.8 million has been recorded as deferred IPO cost in the consolidated statement of financial position, which will be charged to equity upon issuance of shares. The remaining SR 12.6 million relates to secondary offering (sale of existing share by shareholders) and will be borne by shareholders. 4 MATERIAL ACCOUNTING POLICY INFORMATION Foreign currencies Functional and presentation currency Items included in the consolidated financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates (the “functional currency”). The Group’s financial statements are presented in Saudi Riyals (“SR”), which is the Company’s functional and presentation currency, and all values are stated in full, except when otherwise indicated. Transactions and balances Foreign currency transactions are translated into SR at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting 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 profit or loss and other comprehensive income. Translation of non-monetary items depends on whether they are recognized at historical cost or at fair value. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Transactions and balances (continued) Non-monetary assets that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognized in consolidated statement of comprehensive income). Current and non–current classification The Group presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification. An asset is current when it is: Expected to be realized or intended to be sold or consumed in the normal operating cycle; Held primarily for the purpose of trading; Expected to be realized within twelve months after the reporting period; or Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: It is expected to be settled in the normal operating cycle; It is held primarily for the purpose of trading; It is due to be settled within twelve months after the reporting period; or There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Group classifies all other liabilities as non-current.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 16 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: In the principal market for the asset or liability, or In the absence of a principal market, in the most advantageous market for the asset or liability. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Revenue from contracts with customers The Group is in the online e commerce business of trading perfumes, cosmetics, soap and incense and other ancillary services to support online commerce business. a Revenue from contracts with customers for sale of goods and services Step 1. Identify the contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met. Step 2. Identify the performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer. Step 3. Determine the transaction price: The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. Step 4. Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Group will allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for satisfying each performance obligation Step 5. Recognise revenue when (or as) the entity satisfies a performance obligation.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 17 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) Revenue from contracts with customers (Continued) The Group satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met: 1. The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; or 2. The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or 3. The Group’s performance does not create an asset with an alternative use to the Group and the entity has an enforceable right to payment for performance completed to date. For performance obligations where one of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied. When the Group satisfies a performance obligation by delivering the promised goods or services, it creates a contract asset/receivable based on the amount of consideration earned by the performance. Where the amount of consideration received from a customer exceeds the amount of revenue recognised this gives rise to a contract liability. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty. The Group assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in its revenue arrangement from supply of goods purchased upfront directly from suppliers. a Revenue from sale of goods Revenue is measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances and promotional discounts. Revenue also excludes any amounts collected on behalf of third parties, including value-added tax. Revenue from sale of goods is recognised at the point in time upon delivery of goods to customers subject to the adjustment for right of return, where applicable. The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Group considers the effects of variable consideration. Transactions are settled by debit cards, credit cards and cash on delivery basis. Variable consideration If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Some contracts for the sale of goods provide customers with a right to return the goods within a specified period. The rights of return give rise to variable consideration.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 18 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) Revenue from contracts with customers (Continued) b Revenue from sale of services The Group earns delivery revenue on orders below a threshold of SAR 300. The thresholds are dynamic in nature and vary from geography to geography. This revenue is recognised on delivery of goods to the customer. c Assets and liabilities arising from rights of return (i) Right of return assets The general terms of the Group’s sales provide the customers with a right to return the goods within a specified period of 14 days. The Group uses the expected value method to estimate the goods that will not be returned because this method best predicts the amount of variable consideration to which the Group will be entitled. The requirements in IFRS 15 on constraining estimates of variable consideration are also applied in order to determine the amount of variable consideration that can be included in the transaction price. For goods that are expected to be returned, instead of revenue, the Group recognises a return liability. A right of return asset for the inventory (and corresponding adjustment to cost of sales) is also recognised for the right to recover products from a customer. (ii) Refund liabilities A refund liability is recognised for the obligation to refund all the consideration received (or receivable) from a customer. The Group’s refund liabilities arise from customers’ right of return. The liability is measured at the amount the Group ultimately expects it will have to return to the customer. The Group updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period. Cost of revenue Cost of revenue primarily consists of the purchase price of goods net of any discounts, inbound shipping costs, distribution, logistics and related cost. Cost of revenue also include provisions for slow moving and obsolete inventory items and differences between net realisable value (“NRV”) and cost, in case NRV is lower. Distribution, logistics and related cost primarily consists of the manpower charges, and any other related costs. General and administrative expenses General and administrative expenses primarily consist of payroll and related expenses; facilities and equipment, such as depreciation expense and rent (short-term and low value); professional fees and litigation costs; and other general corporate costs for corporate functions, including accounting, finance, tax, legal, and human resources, warranty, among others. General and administration expenses include expenses not specifically part of direct cost. Allocations between general and administration expenses and direct cost, when required, are made on a consistent basis. Finance costs Finance costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Finance costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds. The interest component of a lease is included in finance cost and recognized using the effective interest method over the lease term. Other income Other income is recognized when earned.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 19 4 MATERIAL ACCOUNTING POLICY INFORMATION (Continued) Property and equipment Property and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost includes all amounts necessary to bring the asset to the present condition and location to be ready for its intended use by management. Such costs include the cost of replacing part of the property and equipment and borrowing costs for long-term construction projects (qualifying assets), if the recognition criteria are met, and costs incurred during the commissioning period, net of proceeds from sale of trial production. Capital work in progress is stated at cost, net of accumulated impairment losses, if any. When parts of property and equipment are significant in cost in comparison to the total cost of the item, and where such parts/ components have a useful life different from the other parts and required to be replaced at different intervals, the Group shall recognise such parts as individual components of the asset with specific useful lives and depreciate them accordingly. All other repair and maintenance costs are recognised in statement of comprehensive income as incurred. Depreciation is calculated from the date the item of property and equipment is available for their intended use or in respect of self-constructed assets from the date such assets are completed and ready for the intended use. Land and assets under construction, which are not ready for their intended use, are not depreciated. Depreciation of assets is calculated on a straight-line basis over the estimated useful life of the assets as follows: Category of property and equipment Years Lower of the lease period or Leasehold improvements and installations 4 - 10 Vehicles 4 - 5 Furniture and fixture 5 Computers 4 Office equipment 4 Metal shelves 4 Machinery and equipment 4 Building 20 The assets’ residual values, useful lives and methods of depreciation are reviewed, and adjusted prospectively if appropriate, at each reporting date. An item of property and equipment and any significant component initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gains and losses on disposal of retired, sold or otherwise derecognised property and equipment are determined by comparing the proceeds with the carrying amount of the asset, and are recognised within “other income” in consolidated statement of comprehensive income. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Capital work in progress is stated at cost until the construction or installation is complete. Upon the completion of construction or installation, the cost of such assets together with cost directly attributable to construction or installation, including capitalized borrowing cost, are transferred to the respective class of asset. No depreciation is charged on capital work in progress. Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in statement of profit or loss and other comprehensive income in the period in which the expenditure is incurred.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 20 4 MATERIAL ACCOUNTING POLICY INFORMATION (continued) Intangible assets (Continued) The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. Amortization is calculated from the date the when the intangible assets are available for its intended use. It is calculated on a straight-line basis over the useful life of the asset. Useful life of software is 5 years. An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss and other comprehensive income. Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU fair value less costs to sell and its value-in-use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset or CGU is considered impaired and is written down to its recoverable amount. In assessing the value-in-use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses of continuing operations are recognized in the consolidated statement of comprehensive income in those expense categories consistent with the function of the impaired asset. For assets other than above, an assessment is made at each financial year-end as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. This reversal is limited such that the recoverable amount doesn’t exceed what the carrying amount would have been, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of comprehensive income Financial instruments Recognition and initial measurement A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. A financial instrument is recognized in the statement of financial position when the Group becomes party to the contractual provisions of the financial instrument. A financial instrument is measured initially at fair value plus, for an item not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 21 4 MATERIAL ACCOUNTING POLICY INFORMATION (continued) Financial instruments (continued) Financial assets Classification of financial assets On initial recognition, a financial asset is classified as measured at: amortized cost, fair value through other comprehensive income (‘FVOCI’) or FVTPL. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL: a) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-to-investment basis. All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not a FVTPL, transaction costs that are directly attributable to its acquisition. Subsequent measurement Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses are recognized statement of profit or loss and other comprehensive income. Financial assets at amortized cost are subsequently measured at amortized cost using the effective interest rate (“EIR”) method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment losses are recognized in statement of profit or loss and other comprehensive income. Any gain or loss on derecognition is recognized in the statement of profit or loss and other comprehensive income. Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the EIR method, foreign exchange gains and losses and impairment are recognized in the statement of profit or loss and other comprehensive income. Other net gains and losses are recognized in the statement of profit or loss and other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss. Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in the statement of profit or loss and other comprehensive income unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in the other comprehensive income and are never reclassified to profit or loss. Reclassifications Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 22 4 MATERIAL ACCOUNTING POLICY INFORMATION (continued) Financial instruments (continued) Financial assets (continued) Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group’s statement of financial position) when: the rights to receive cash flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Impairment of financial assets The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns based on the customer types and ratings. The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults, the historical default rates are adjusted. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. Financial liabilities Initial recognition and measurement The Group classifies its financial liabilities as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Subsequent measurement Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the EIR method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 23 4 MATERIAL ACCOUNTING POLICY INFORMATION (continued) Financial instruments (continued) Financial liabilities (continued) Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss. Offsetting Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. Inventories Inventories are measured at lower of cost and net realisable value.Cost includes expenditures incurred in acquiring the inventories, and other costs incurred in bringing them to their existing location and condition. Costs are assigned to individual items of inventory on the basis of weighted average method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Goods-in-transit includes the inventory purchased and yet not received in Group’s possession and are recorded at cost when the rights and obligations relating to the goods are transferred to the Group. Cash and cash equivalent For the purposes of the consolidated statement of cash flows, cash and bank balances comprise cash on hand and deposits held with banks, all of which are available for use by the Group unless otherwise stated and have maturities of three months or less, which are subject to insignificant risk of changes in values. Trade receivables Trade receivables are recorded at amortized cost using the effective interest rate method, measured initially at the transaction price, and are non-interest-bearing. At the end of each financial period, the Group determines an allowance for expected credit losses (ECL) by measuring the difference between the contractual cash flows due and the cash flows it anticipates receiving, discounted at an approximation of the original effective interest rate. and any impairment loss is recognised in the profit or loss directly in the statement of comprehensive income. Trade payable Trade payables represent liabilities for goods and services provided to the Group prior to the end of the period which are not settled yet. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 24 4 MATERIAL ACCOUNTING POLICY INFORMATION (continued) Provisions (continued) Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre- Zakat rate that reflects current market assessments of the time value of money and the risks specific to liability. The increase in the provision due to the passage of time is recognised as interest expense. Employee benefits Short-term obligations Liabilities for wages and salaries, including non-monetary benefits and accumulating leaves, air fare and allowances that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employees’ services up to the end of the reporting period and are measured at amounts expected to be paid when the liabilities are settled. The liabilities are presented under accounts payable, accruals and others in the statement of financial position. Employee benefits obligation The Group’s primary defined benefit plan is an end of service lump sum benefits plan. The benefit liability recognized in the consolidated statement of financial position is the present value of the Defined Benefit Obligation (“DBO”) at the reporting date. The plan is unfunded, which means the Group pays benefits as they fall due when employees leave service. The DBO is re-measured on a periodic basis by independent actuaries using the projected unit credit method. The present value of the DBO is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. The rate used to discount post-employment benefit obligations is determined by reference to market yields at the statement of financial position date on high quality corporate bonds. In the absence of deep market of such bonds, the market yields on Government Bonds is used. The DBO also depends on the assumptions for future salary increases and the rate at which employees are expected to leave. The Group has assumed salaries will increase at a rate of 5%pa above the discount rate, in order to provide stability to the OCI account. Employee withdrawal rates are very high but can change quickly from year to year. The Group has therefore assumed updates this assumption from year to year as new experience develops. The net interest cost is calculated by applying the discount rate to the net balance of the DBO. This cost is included in employees’ salaries and other benefits expense in the statement of profit or loss and other comprehensive income. Re- measurement gains and losses arising from changes in actuarial assumptions are recognized in the period in which they occur in OCI. Changes in the present value of the DBO resulting from plan amendments or curtailments are recognized immediately in the statement of profit or loss and other comprehensive income as past service costs. Current and past service costs related to end-of-service benefits and unwinding of the liability at discount rates used are recognized immediately in the statement of profit or loss and other comprehensive income. Any changes in net liability due to actuarial valuations and changes in assumptions are taken as re-measurement in OCI. The actuarial valuation process takes into consideration the provisions of the Saudi Arabian Labour and Workmen Law as well as the Group’s policy. Zakat The Group is subject to the Zakat regulations issued by the Zakat, Tax and Customs Authority (“ZATCA”) in the Kingdom of Saudi Arabia, including the interpretations issued by the authority. The management establishes provisions where appropriate based on amounts expected to be paid to the authority, and periodically evaluates positions taken in the Zakat returns with respect to situations in which applicable Zakat regulations are subject to interpretation. The zakat provision is charged to the statement of comprehensive income. Additional zakat liability, if any, related to prior years’ assessments arising from the authority are accounted for in the period in which the final assessments are finalized.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 25 4 MATERIAL ACCOUNTING POLICY INFORMATION (continued) Withholding tax Withholding tax liability are created either while expense booking or at the time payment of services in accordance with tax law applicable to the countries applicable tax laws. Withholding tax liability are then discharged to government. Value-added tax (“VAT”) Revenues, expenses and assets are recognized net of the amount of VAT, except for: • where the VAT incurred on a purchase of assets or services is not recoverable from the tax authority, in which case the VAT is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • in case of receivables and payables that are stated with the amount of VAT included. The net amount of VAT recoverable from or payable to the tax authority is classified as an asset or a liability, respectively, in the consolidated statement of financial position. Dividends Dividend distribution to the Group’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Group’s shareholders. Leases The Group assess whether a contract contains a lease, at inception of the contract. For all such lease arrangements the Group recognize right of use assets and lease liabilities except for the short term leases and leases of low value assets as follows: Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated amortization and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. The Group generally consider the economic life of the right-of-use assets to be comparable to the useful life of similar owned assets. The Group’s leases generally do not provide a residual guarantee.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 26 4 MATERIAL ACCOUNTING POLICY INFORMATION (continued) Leases (Continued) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Statutory reserve The Ministry of Commerce of the Kingdom of Saudi Arabia has issued new Regulations for Companies, effective by 19 January 2023 with a grace period of two years for implementation. During the year, the shareholders approved the amendment to the Company’s Bylaws in accordance with the new Companies Law which does not require to set aside a statutory reserve. Previously, in accordance with the Company's Bylaws, the Company was required to transfer 10% of the net income to the statutory reserve until this reserve reached 30% of the capital. 4.1 New and Amended Standards and Interpretations Following are the standards and amendments effective on 1 January 2024 or after (unless otherwise stated) and do not have a material impact on the Company's financial statements. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. Amendments to IAS (1): Classification of Liabilities as Current or Non-current In January 2020 and October 2022, the Board issued amendments to IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: What is meant by a right to defer settlement That a right to defer settlement must exist at the end of the reporting period That classification is unaffected by the likelihood that an entity will exercise its deferral right That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification Disclosures The standard had no impact on the Group’s consolidated financial statements. Amendments to IFRS (16): Lease Liability in a Sale and Leaseback The amendment to IFRS 16 Leases specifies the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. The standard had no impact on the Group’s consolidated financial statements. Disclosures: Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7 The amendments specify disclosure requirements to enhance the current requirements, which are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. The standard had no impact on the Group’s consolidated financial statements.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 27 4.1 New and Amended Standards and Interpretations New and amended standards and interpretations not yet effective The new amended, issued standards and interpretations, which are not effective yet have not been adopted early by the Group and will be adopted on their effective date as applicable. The adoption of these standards and interpretations is not expected to have any material impact on the Group on the effective date. Standard, Amendment or Interpretation Effective date - Amendments to IAS (21): Lack of exchangeability 1 January 2025 - Amendments to IFRS (9) and IFRS (7): Classification and Measurement of Financial Instruments 1 January 2026 - Volume (11): Annual Improvements to IFRS Accounting Standards 1 January 2026 - Amendments to IFRS (9) and IFRS (7): Power Purchase Agreements. 1 January 2026 - IFRS 19 - reducing subsidiaries` disclosures 1 January 2027 - Amendments to IFRS (10) and IAS (28): Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The effective date of this amendment is postponed indefinitely. IFRS 18 Presentation and Disclosure in Financial Statements In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements (PFS) and the notes. IFRS 18, is effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted and must be disclosed. The adoption is expected to have material impact on the presentation on the effective date.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 28 5 PROPERTY AND EQUIPMENT Land Building Furniture and fixture Computers Motor vehicles Equipment and tools Leasehold improvements and installation Capital work in progress* Total 2024 SR SR SR SR SR SR SR SR SR Cost: As at 1 January 2024 38,617,928 - 1,417,695 2,115,625 1,749,149 2,587,758 5,410,232 18,161,422 70,059,809 Additions - - 137,000 519,712 232,900 685,815 150,634 31,743,412 33,469,473 Transfer out/in - 16,091,549 - 390,676 - - 11,572,850 (28,055,075) - Disposals (3,167,483) - - - (281,287) - - - (3,448,770) ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── As at 31 December 2024 35,450,445 16,091,549 1,554,695 3,026,013 1,700,762 3,273,573 17,133,716 21,849,759 100,080,512 ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── Accumulated depreciation: As at 1 January - - 802,797 1,243,371 923,363 2,456,201 1,661,956 - 7,087,688 Charge for the year - 11,175 187,351 360,616 242,952 152,754 1,453,248 - 2,408,096 Disposals - - - - (184,833) - - - (184,833) ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── As at 31 December - 11,175 990,148 1,603,987 981,482 2,608,955 3,115,204 - 9,310,951 ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── Net book values: At 31 December 2024 35,450,445 16,080,374 564,547 1,422,026 719,280 664,618 14,018,512 21,849,759 90,769,561 ════════ ════════ ════════ ════════ ════════ ════════ ════════ ════════ ════════ *Capital work in progress represents capital expenditure incurred for the purchase and installations of robotics technology for warehouse operations, expected to be completed by February 2025. The amount of borrowing costs capitalised during the year ended 31 December 2024 was SR 1,354,953 (2023: 1,569,623). The rate used to determine the amount of borrowing costs eligible for capitalisation was 8.06%.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 29 5 PROPERTY AND EQUIPMENT Land Leasehold improvements Furniture and fixture Computers Motor vehicles Equipment and tools Capital work in progress* Total 2023 SR SR SR SR SR SR SR SR Cost: As at 1 January 2023 48,120,378 3,039,391 1,231,952 1,674,086 1,749,149 2,587,758 - 58,402,714 Additions - 2,370,841 185,743 441,539 - - 18,161,422 21,159,545 Disposals (9,502,450) - - - - - - (9,502,450) ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── As at 31 December 2023 38,617,928 5,410,232 1,417,695 2,115,625 1,749,149 2,587,758 18,161,422 70,059,809 Accumulated depreciation: As at 1 January - 615,563 568,287 1,018,012 644,725 1,909,454 - 4,756,041 Charge for the year - 1,046,393 234,510 225,359 278,638 546,747 - 2,331,647 ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── As at 31 December - 1,661,956 802,797 1,243,371 923,363 2,456,201 - 7,087,688 ──────── ──────── ──────── ──────── ──────── ──────── ──────── ──────── Net book values: At 31 December 2023 38,617,928 3,748,276 614,898 872,254 825,786 131,557 18,161,422 62,972,121 ════════ ════════ ════════ ════════ ════════ ════════ ════════ ════════ At 31 December 2022 48,120,378 2,423,828 663,665 656,074 1,104,424 678,304 - 53,646,673 ════════ ════════ ════════ ════════ ════════ ════════ ════════ ════════ *Capital work in progress represents capital expenditure incurred on the construction of warehouse on the Company’s owned land. This is completed and transferred to property during December 2024.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 30 5 PROPERTY AND EQUIPMENT (continued) The depreciation for property and equipment is as follows: 31 December 2024 31 December 2023 Note SR SR Cost of revenue 1,444,857 1,398,988 General and administrative expenses 23 963,239 932,659 ──────── ──────── 2,408,096 2,331,647 ════════ ════════ 6 INTANGIBLE ASSETS Intangible assets represent the software used by the Group for its financial and operational management. 31 December 2024 31 December 2023 SR SR Cost At the beginning of the year 2,557,697 1,700,714 Additions 206,159 856,983 ───────── ───────── At the end of the year 2,763,856 2,557,697 ───────── ───────── Accumulated amortisation At the beginning of the year 1,135,199 676,072 Charge for the year (note 23) 432,776 459,127 ───────── ───────── At the end of the year 1,567,975 1,135,199 ───────── ───────── Carrying amounts at the end of the year 1,195,881 1,422,498 ═════════ ═════════ 7 INVENTORIES 31 December 2024 31 December 2023 SR SR Goods for sale 250,686,690 149,034,738 Packing material 11,885,275 6,357,417 Less: Provision for slow moving and obsolete items (8,031,965) (4,607,603) ───────── ───────── 254,540,000 150,784,552 ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 31 7 INVENTORIES (continued) Movement in the provision for slow moving and obsolete items is as follows: 31 December 2024 31 December 2023 SR SR Opening balance 4,607,603 3,278,571 Charge for the year 3,424,362 5,016,915 Write off - (3,687,883) ──────── ──────── Closing balance 8,031,965 4,607,603 ════════ ════════ 8 TRADE RECEIVABLES 31 December 2024 31 December 2023 SR SR Trade receivables 37,153,218 21,419,548 Less: Allowance for expected credit losses (2,837,742) (2,547,822) ──────── ──────── 34,315,476 18,871,726 ════════ ════════ Trade receivables are non-interest bearing and are generally on terms of 30 days. Set out below is the movement in the allowance for expected credit losses of trade receivables: 31 December 2024 31 December 2023 SR SR Balance as at the beginning of the year 2,547,822 2,916,777 Charge for/ (reversal of) expected credit losses (note 22) 289,920 (368,955) ──────── ──────── Balance as at the end of the year 2,837,742 2,547,822 ════════ ════════ All trade receivables are interest free. Unimpaired trade receivables are expected, based on past experience, to be fully recoverable. It is not the practice of the Group to obtain collateral over receivables and the vast majority are, therefore, unsecured. The credit risk analysis of trade receivables is disclosed in Note 28.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 32 9 PREPAYMENTS, ADVANCES AND OTHER RECEIVABLES 31 December 2024 31 December 2023 SR SR Advances to suppliers 62,899,047 23,378,343 Deferred IPO costs* 1,794,053 - Employee receivables 2,351,557 3,087,531 Prepaid expenses 2,274,258 5,540,625 Refundable deposits 414,591 466,616 Other receivables** 2,158,075 1,425,352 ──────── ──────── 71,891,581 33,898,467 ════════ ════════ * This relates to primary offering (listing of new shares) and will be charged to equity upon issuance of shares. ** Include an amount of SR 2,035,976 (2023: SR 1,425,352) represents right of return to the assets against which a refund liability has been booked at year end. 10 CASH AND CASH EQUIVALENTS 31 December 2024 31 December 2023 SR SR Bank balances 48,628,460 69,378,296 Cash on hand 1,347,970 327,253 ──────── ──────── 49,976,430 69,705,549 ════════ ════════ 11 SHARE CAPITAL The Company’s share capital is divided into 110,000,000 shares of SR 1 each (31 December 2023: 1,063 shares of SR 1,000 each). During the meeting held on 26 Shawwal 1445H (corresponding to 5 May 2024), the shareholders decided to increase the number of shares of the Company from 1,063 shares with nominal value of SR 1,000 to 110,000,000 shares with a nominal value of SR 1 (the old shares were also subdivided). The decision is based on transferring an amount of SR 81,801,000 from retained earnings and an amount of SR 27,136,000 from additional contribution to capital. The legal formalities have been completed during the year ended 31 December 2024. On 28 Thul-Hijjah 1445H (corresponding to 4 July 2024), the shareholders resolved to increase the share capital from 110,000,000 ordinary shares to 115,500,000 ordinary shares of SR 1 each by issuing new 5,500,000 ordinary shares. The additional 5,500,000 ordinary shares are issued subsequently on 8 January 2025 on commencement of trading on the Saudi Stock Exchange as part of initial public offering. 12 STATUTORY RESERVE The Company’s Bylaws are updated in accordance with the new Companies Law which does not require to set aside a statutory reserve. Previously, in accordance with the Company's Bylaws, the Company was required to transfer 10% of the net income to the statutory reserve until this reserve reached 30% of the capital.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 33 13 ADDITIONAL CONTRIBUTION TO CAPITAL 31 December 2024 31 December 2023 SR SR Omar Ali Alolayan - 11,002,461 Abdulrahman Ali Alolayan - 9,930,295 Wagehat Al Hamraa for Investment Company - 6,203,244 ──────── ───────── - 27,136,000 ════════ ═════════ The above-mentioned additional contributions to capital were transferred to share capital during the year ended 31 December 2024. 14 BANK BORROWINGS a Short-term borrowings 31 December 2024 31 December 2023 SR SR Al Rajhi Bank 28,146,575 14,354,467 SAB Bank 32,996,121 8,903,951 ───────── ───────── 61,142,696 23,258,418 ═════════ ═════════ The Group obtained short-term credit facilities from the two local banks to meet the requirements of working capital, which are guaranteed by personal guarantees provided by shareholders, as stipulated in the loan agreements. Following the IPO, the Group is in the process to revert back the personal guarantees by issuing corporate guarantees. Movement in the short-term borrowings is as follows: 31 December 2024 31 December 2023 SR SR Balance at beginning of the year 23,258,418 24,149,343 Drawn down during the year 102,805,234 43,903,951 Repayment during the year (64,920,956) (44,794,876) ───────── ───────── Balance at end of the year 61,142,696 23,258,418 ═════════ ═════════ b Long-term borrowings 31 December 2024 31 December 2023 SR SR Al Rajhi Bank (Medium term loan) * 13,157,899 18,421,055 ───────── ───────── 13,157,899 18,421,055 Less: current portion of long-term borrowings (5,263,156) (5,263,156) ───────── ───────── Non-current portion of long-term borrowings 7,894,743 13,157,899 ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 34 14 BANK BORROWINGS (continued) b Long-term borrowings (continued) * The Group has obtained medium term loan (MTL) amount to SR 27.1 million in the prior years for the purpose of construction of warehouse. The loan is due for repayment in 20 equal quarterly instalments of SR 1.315 million per instalment, and the last instalment is due in May 2027. These borrowings are secured against personal guarantees provided by shareholders, as stipulated in the loan’s agreement. The borrowings are subject to covenants, which have been met at the year end. Movement in the long-term borrowings is as follows: 31 December 2024 31 December 2023 SR SR Balance at beginning of the year 18,421,055 21,968,712 Drawn down during the year - 5,908,649 Repayment during the year (5,263,156) (9,456,306) Accrued interest during the year 1,747,505 788,796 ───────── ───────── 14,905,404 19,209,851 Less: accrued interest within current liabilities (1,747,505) (788,796) ──────── ──────── Balance at end of the year 13,157,899 18,421,055 ═════════ ═════════ Below is the repayment schedule of the outstanding long-term borrowings: 31 December 2024 31 December 2023 SR SR Within one year 5,263,156 5,263,156 Between two to five years 7,894,743 13,157,899 ───────── ───────── Total 13,157,899 18,421,055 ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 35 15 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES The Group has lease contracts for vehicles and warehouses which are used in its operations. Leases of vehicles have lease terms of 3 to 5 years, and warehouses have lease terms of 5 years. Generally, the Group is restricted from assigning and subleasing the leased assets. Set out below are the carrying amounts of Group’s right- of- use assets and the movements during the year: Cars SR Warehouse SR Total SR Cost As at 1 January 2024 5,565,924 14,022,643 19,588,567 Additions 1,984,565 7,045,279 9,029,844 Disposals - (6,567,574) (6,567,574) ───────── ───────── ───────── As at 31 December 2024 7,550,489 14,500,348 22,050,837 ───────── ───────── ───────── Accumulated amortization As at 1 January 2024 2,628,830 5,377,047 8,005,877 Charge for the year 1,115,934 2,674,785 3,790,719 Disposals - (2,405,529) (2,405,529) ───────── ───────── ───────── As at 31 December 2024 3,744,764 5,646,303 9,391,067 ───────── ───────── ───────── Net carrying value 3,805,725 8,854,045 12,659,770 ───────── ───────── ───────── The allocation of amortization expense is as follows: Cost of revenue 669,560 1,604,871 2,274,431 General and administrative expenses (note 23) 446,374 1,069,914 1,516,288 ───────── ───────── ───────── 1,115,934 2,674,785 3,790,719 ───────── ───────── ───────── Set out below are the carrying amounts of Group’s right- of- use assets and the movements during the prior year: Cars SR Warehouse SR Total SR Cost As at 1 January 2023 5,565,924 8,919,194 14,485,118 Remeasurement - 1,465,875 1,465,875 Additions - 6,962,499 6,962,499 Disposals - (3,324,925) (3,324,925) ───────── ───────── ───────── As at 31 December 2023 5,565,924 14,022,643 19,588,567 ───────── ───────── ───────── Accumulated amortization As at 1 January 2023 1,248,574 3,627,867 4,876,441 Charge for the year 1,380,256 2,396,220 3,776,476 Disposals - (647,040) (647,040) ───────── ───────── ───────── As at 31 December 2023 2,628,830 5,377,047 8,005,877 ───────── ───────── ───────── Net carrying value 2,937,094 8,645,596 11,582,690 ───────── ───────── ───────── The allocation of amortization expense is as follows: Cost of revenue 828,154 1,437,732 2,265,886 General and administrative expenses (note 23) 552,102 958,488 1,510,590 ───────── ───────── ───────── 1,380,256 2,396,220 3,776,476 ───────── ───────── ─────────
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 36 15 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (continued) Lease liabilities have been included in the consolidated statement of financial position as follows: SR As at 1 January 2024 11,290,937 Additions 9,029,844 Accretion of interest (note 24) 1,181,839 Derecognition of lease liability (5,137,749) Payments (4,224,422) ───────── As at 31 December 2024 12,140,449 ───────── Non-current portion of lease liabilities 8,446,505 Current portion of lease liabilities 3,693,944 ───────── 12,140,449 ═════════ SR As at 1 January 2023 9,672,991 Remeasurement 1,465,875 Additions 6,962,499 Accretion of interest (note 24) 1,052,369 Derecognition of lease liability (2,662,961) Payments (5,199,836) ───────── As at 31 December 2023 11,290,937 ───────── Non-current portion of lease liabilities 8,008,752 Current portion of lease liabilities 3,282,185 ───────── 11,290,937 ═════════ The maturity analysis of lease liabilities is disclosed in Note 28.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 37 16 EMPLOYEES’ DEFINED BENEFIT LIABILITIES 31 December 2024 31 December 2023 SR SR Employees’ defined benefit liabilities 6,893,215 4,729,208 ═════════ ═════════ The Group grants employees’ defined benefit liabilities (benefit plan) to its employees taking into consideration the local labor law requirements in the Kingdom of Saudi Arabia. The benefit provided by this benefit plan is a lump sum based on the employees’ final salaries and allowance and their cumulative years of service at the date of the termination of employment. The retirement age is 60 years. The benefit liability recognized in the consolidated statement of financial position in respect of defined benefit end-of- service plan is the present value of the defined benefit obligation (“DBO”) at the reporting date. The DBO is calculated periodically by qualified actuaries using the projected unit credit method. The present value of the DBO is determined by discounting the estimated future cash outflows using yields on high-quality corporate bonds that are denominated in the currency in which the benefits will be paid. In countries where there is no deep market in such bonds, the market rates on government bonds are used. The movement in defined benefit obligation during the year was as follows: 31 December 2024 31 December 2023 SR SR Net liability at the beginning of the year 4,729,208 3,410,927 Current service cost 1,334,237 942,156 Interest cost 228,713 151,083 Benefits paid (198,762) (209,889) Actuarial loss 799,819 434,931 ───────── ───────── Net liability at the end of the year 6,893,215 4,729,208 ═════════ ═════════ Expense recognized in the statement of comprehensive income are as follows: 31 December 2024 31 December 2023 SR SR Current service cost 1,334,237 942,156 Interest cost 228,713 151,083 ───────── ───────── 1,562,950 1,093,239 Remeasurement losses recognized in other comprehensive income Experience adjustments 1,213,628 434,931 Changes in financial assumptions (413,809) - ───────── ───────── 799,819 434,931 ───────── ───────── 2,362,769 1,528,170 ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 38 16 EMPLOYEES’ DEFINED BENEFIT LIABILITIES (Continued) Significant actuarial assumptions The following were the principal actuarial assumptions: 31 December 2024 31 December 2023Disc Discount rate used for year end obligation 5.69% 4.94% Expected rate of increase in salary level (per annum) 4.69% 4.44% Sensitivity Analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amount shown below: Increase (Decrease) In basis points 31 December 2024 31 December 2023 Discount rate + 0.5% 6,521,234 4,491,772 - 0.5% 7,304,952 4,991,764 Salary growth rate + 0.5% 7,307,024 4,991,764 - 0.5% 6,516,138 4,489,602 The sensitivity analyses above have been determined based on a method that extrapolates the impact on the employee terminal benefit as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity analyses are based on a change in a significant assumption, keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the employee terminal benefit as it is unlikely that changes in assumptions would occur in isolation from one another. The average duration of the employee’s defined benefit obligation at the end of the reporting period is 11.87 years (31 December 2023: 10.87 years). The following are the expected undiscounted payments in future years: 31 December 2024 31 December 2023 SR SR Within the next 12 months 866,458 656,575 Between 2 and 5 years 4,259,385 3,213,333 Beyond 5 years 10,594,449 5,257,621 ───────── ───────── 15,720,292 9,127,529 ═════════ ═════════ Defined contribution plan The Group also participates in pension schemes for its employees which are managed by government institutions. The amount recognized as an expense for defined contribution plans for the year ended 31 December 2024 is SR 1.8 million (2023: SR 1.37 million).
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 39 17 TRADE PAYABLES, ACCRUALS AND OTHER PAYABLES 31 December 2024 31 December 2023 SR SR Trade payables 210,663,167 145,907,517 Accrued expenses 18,537,233 8,415,686 Shipping expenses payable 6,101,350 6,185,585 VAT payable 4,231,071 3,760,372 Refund liability 2,609,405 2,202,358 Other payables 2,993,863 1,728,546 ───────── ───────── 245,136,089 168,200,064 ═════════ ═════════ 18 RELATED PARTY TRANSACTIONS AND BALANCES In the ordinary course of its activities, the Group transacts business with related parties. Related parties include shareholders, members of Board of Directors (“BOD”), key management executives and entities controlled or significantly influenced by such parties, which are under common ownership. The transactions are carried out on mutually agreed terms approved by the management of the Group. Key management personnel compensation The remuneration of directors and other key management personnel for the year were as follow: 2024 2023 SR SR Short-term employee benefits 9,793,620 7,524,000 Post-employment benefits 769,740 2,520,414 Others 265,554 68,871 Board and other management committees’ remuneration (note 23) 1,812,630 - ───────── ───────── 12,641,544 10,113,285 ═════════ ═════════ Related party transactions: - Following are the related party transactions occurred with related parties during the year, except for key management personnel compensation which is disclosed in above table. Related parties Nature of transactions 2024 2023 SR SR Mr. Abdul Rahman Ali Abdul Rahman Alolayan (Member of BOD) Transfer of a land - 3,495,759 Related parties’ balances The breakdown of amounts due from related parties is as follows: 2024 2023 SR SR Initial Public Offering (“IPO”) costs (*) 14,830,181 - ═════════ ═════════ (*) This amount represents the IPO costs relating to secondary offering (sale of existing shares by shareholders) which is agreed to be reimbursed by the shareholders. This has subsequently been paid in full.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 40 18 RELATED PARTY TRANSACTIONS AND BALANCES (Continued) The breakdown of amounts due to related parties is as follows: 2024 2023 SR SR Board and other management committees’ remuneration payable 1,812,630 - ═════════ ═════════ 19 ZAKAT 31 December 2024 31 December 2023 Zakat provision represents the following: SR SR At the beginning of year 2,667,398 1,962,072 Provided during the year 3,320,892 3,000,000 Paid during the year (1,950,844) (2,294,674) ───────── ───────── At the end of year 4,037,446 2,667,398 ═════════ ═════════ The provision is based on the following: 31 December 2024 31 December 2023 SR SR Equity 185,858,456 88,480,972 Provisions and other adjustments 28,497,619 35,829,807 Book value of long-term assets (104,625,212) (75,977,309) ───────── ───────── Total 109,730,863 48,333,470 Adjusted profits 7,902,616 44,896,410 ───────── ───────── Zakat base 117,633,479 93,229,880 ═════════ ═════════ The differences between the financial and the zakatable results are mainly due to provisions which are not allowed in the calculation of zakatable results. Status of assessments The Group has submitted its zakat returns on consolidated basis for the years up to 31 December 2023. Zakat certificates for all years have been issued and there is no re-assessment from ZATCA as on 31st December 2024 for previous periods. 20 DIVIDENDS PAYABLE On 18 Jumada Al-Alkhirah 1445H (corresponding to 31 December 2023), the shareholders resolved to distribute cash dividends of SR 7,526 per share amounting to SR 8 million. This has been paid in full during the year ended 31 December 2024. 21. REVENUE 2024 SR 2023 SR Revenue from sales of goods 965,462,352 748,201,489 Revenue from rendering services (delivery) 38,050,535 34,153,612 ───────── ───────── 1,003,512,887 782,355,101 ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 41 21. REVENUE (Continued) 21.1 DISAGGREGATION OF REVENUE In the following table, revenue is disaggregated by type of category and timing of revenue recognition as shown below: 2024 SR 2023 SR Category Local sales 956,863,891 749,513,383 International sales 46,648,996 32,841,718 ───────── ───────── 1,003,512,887 782,355,101 ═════════ ═════════ 2024 SR 2023 SR Timing of revenue recognition Sales made at point in time 1,003,512,887 782,255,101 ═════════ ═════════ 22 SELLING AND MARKETING EXPENSES 31 December 2024 SR 31 December 2023 SR Advertisement 114,441,571 125,895,044 Computer software and license charges* 7,962,411 4,881,501 Sales commission 7,138,965 5,088,863 Bank charges 6,240,120 4,087,841 Withholding tax 3,343,993 3,530,729 Provision for/ (reversal of) expected credit losses on trade receivables (note 8) 289,920 (368,955) Others 1,960,076 978,169 ───────── ───────── 141,377,056 144,093,192 ═════════ ═════════ * The comparatives for 31 December 2023 have been reclassified from others. 23 GENERAL AND ADMINISTRATIVE EXPENSES 31 December 2024 31 December 2023 SR SR Employees’ related costs 27,532,054 20,170,605 Governmental and legal fees 5,922,338 3,592,465 Professional fees 2,235,696 4,954,813 Board and other management committees’ remuneration (note 18) 1,812,630 - Insurance 1,736,561 1,105,330 Employees’ benefits liability (note 16) 1,562,950 1,093,239 Utilities* 1,540,888 532,332 Amortization of right-of-use-assets (note 15) 1,516,288 1,510,590 Depreciation on property and equipment (note 5) 963,239 932,659 Amortization of intangible assets (note 6) 432,776 459,127 IPO costs** 448,513 - Others 3,146,268 2,358,771 ───────── ───────── 48,850,201 36,709,931 ═════════ ═════════ * The comparatives for 31 December 2023 have been reclassified from others. ** This represents the costs relating to primary offering (listing of new shares) which have been charged to the consolidated statement of comprehensive income.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 42 24 FINANCE COST 31 December 2024 31 December 2023 SR SR Financing costs on borrowings 3,556,322 2,073,527 Financing costs on lease liabilities (note 15) 1,181,839 1,052,370 ───────── ───────── 4,738,161 3,125,897 ═════════ ═════════ 25 OTHER INCOME - NET 31 December 2024 31 December 2023 SR SR Gain on lease liability extinguishment 975,706 349,958 (Loss)/gain on disposal of property and equipment (74,617) 2,286,625 Others (48,466) 362,146 ───────── ───────── 852,623 2,998,729 ═════════ ═════════ 26 COMMITMENTS Significant capital expenditure contracted for as at the end of the reporting period but not recognized as liabilities is as follows: 31 December 2024 31 December 2023 SR SR Commitments for capital expenditure 1,995,493 14,354,122 ═════════ ═════════ 27 FINANCIAL INSTRUMENTS Financial instruments by category Financial instruments have been categorized as follows 31 December 2024 31 December 2023 SR SR Financial assets At amortized cost Trade receivables 34,315,476 18,871,726 Cash and cash equivalents 48,628,460 69,378,296 Amounts due from related parties 14,830,181 - Employee receivables 2,351,557 3,087,531 Refundable deposits 414,591 466,616 Other receivables 2,158,075 1,425,352 ───────── ───────── 102,698,340 93,229,521 ═════════ ═════════ Financial liabilities At amortized cost Trade payables, accruals and other payables 238,295,613 161,077,205 Short-term borrowings 61,142,696 23,258,418 Long term borrowings 13,157,899 18,421,055 Lease liabilities 12,140,450 11,290,937 Amounts due to related parties 1,812,630 - ───────── ───────── 326,549,288 214,047,615 ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 43 27 FINANCIAL INSTRUMENTS (Continued) Fair value estimation of financial instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. All the financial assets and liabilities, except non-current portion of lease liabilities, of the Group are classified and measured at amortized cost, and the carrying amounts of these financial assets and liabilities are a reasonable approximation of fair value mainly due to the short-term maturities of these instruments. The fair value of non-current lease liabilities has been determined by discounting the expected future cash flows by the current interest rate with similar risk profiles. The Group’s principal financial liabilities comprise bank borrowings, trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial assets include trade and other receivables, bank balances and due from related party that derive directly from its operations. 28 FINANCIAL AND CAPITAL RISK MANAGEMENT The Group is exposed to market risk, credit risk and liquidity risk. The Group’s Board of Directors oversees the management of these risks. The Group’s senior management is supported by the Board of Directors that advises on financial risks and the appropriate financial risk governance framework for the Group, reviews and agrees on policies for managing each of these risks, which are summarized below. Board of Directors The core of risk governance is the centralised oversight of the Board of Directors providing direction and the necessary approvals of strategies and policies in order to achieve defined corporate goals. Senior management Senior management is responsible for the day-to-day operations towards achieving the strategic goals within the Group’s pre-defined risk appetite. The risks faced by the Group and the way these risks are mitigated by management are summarised below: Market risk Market risk is the risk that changes in market prices, such as currency rates and interest rates that will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. Foreign currency risk Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Group's transactions are principally in Saudi Arabian Riyals. The Group is subject to fluctuations in foreign exchange rates for AED and Euros. Management monitors the fluctuations in currency exchange rates and believes that effect of the currency fluctuation is not material. Credit risk Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk if counterparties fail to make payments as they fall due in respect of payment of trade receivables as invoices fall due 30 days after being raised. The Group’s business involves sales of items with cash on delivery basis. The Group transacts with a large number of customers and manages collections through its third-party service providers. Receivable balance, as at reporting date, represent balances due from customers and such third-party service providers. Trade receivables The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been computed based on shared credit risk characteristics and the days past due. The expected credit loss provision as at the end of reporting period is determined as follows. The expected credit losses below also incorporate forward looking information.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 44 28 FINANCIAL AND CAPITAL RISK MANAGEMENT (Continued) Credit risk (Continued) Trade receivables (continued) 31 December 2024 Current More than 30 days past due More than 60 days past due More than 120 days past due Total Expected loss rate 0% 0% 100% Gross carrying amount 33,654,658 660,818 - 2,837,742 37,153,218 ───────── ───────── ───────── ───────── ───────── Expected credit loss - - - 2,837,742 2,837,742 ═════════ ═════════ ═════════ ═════════ ═════════ 31 December 2023 Current More than 30 days past due More than 60 days past due More than 120 days past due Total Expected loss rate 0% - - 83% Gross carrying amount 18,350,470 - - 3,069,078 21,419,548 ───────── ───────── ───────── ───────── ───────── Expected credit loss - - - 2,547,822 2,547,822 ═════════ ═════════ ═════════ ═════════ ═════════ Credit risk related to financial institutions Credit risk from balances with banks and financial institutions is managed by Group’s treasury in accordance with the Group’s policy. Cash is substantially placed with local banks with sound credit ratings. The Group does not consider itself exposed to a concentration of credit risk with respect to banks due to their strong financial background. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in selling assets upon necessary and in a quick manner to avoid any loss. Liquidity risk is managed by monitoring on a regular basis that sufficient funds are available to meet any future commitments. The Group believes that it is not exposed to any significant risks of liquidity. The table below summarises the maturity profile of the financial liabilities based on contractual undiscounted payments. Carrying Amount Less than one year 1-5 Years Total Cashflows 31 December 2024: Trade and other payables 238,295,613 238,295,613 - 238,295,613 Amounts due to related parties 1,812,630 1,812,630 - 1,812,630 Short- and long-term borrowings 74,300,595 66,405,852 8,524,971 74,930,823 Lease liabilities 12,140,450 3,693,944 8,446,505 12,140,449 ───────── ───────── ───────── ───────── Total 326,549,288 310,208,039 16,971,476 327,179,515 ═════════ ═════════ ═════════ ═════════ Carrying Amount Less than one year 1-5 Years Total Cashflows 31 December 2023: Trade and other payables 161,077,205 161,077,205 - 161,077,205 Short- and long-term borrowings 41,679,473 28,521,574 14,257,848 42,779,422 Lease liabilities 11,290,937 3,209,719 9,047,884 12,257,603 ───────── ───────── ───────── ───────── Total 214,047,615 192,808,498 23,305,732 216,114,230 ═════════ ═════════ ═════════ ═════════
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 45 28 FINANCIAL AND CAPITAL RISK MANAGEMENT (Continued) Capital management Capital pertains to the total equity of the Group. The primary objective of the Group’s capital management is to support its business, able to continue as a going concern and maximise the returns to the shareholders. The Group’s policy is to maintain a strong capital base so as to maintain creditors and market confidence and to sustain future development of the business. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. The management monitors the return on capital and the level of dividends and seeks to maintain a balance capital position. There were no changes in the Group’s management approach to capital management during the year. The Group’s borrowings are subject to certain covenants, which have been met at the year end. 29 SEGMENTAL INFORMATION Currently, the Group’s Chief Operating Decision Maker (which is the Board of Directors) considers the entire operations as one single operating segment. However, for management purposes, the Group monitors revenue as per following categorizations: For the year ended 31 December 2024 Central Region Western Region (*) Eastern Region International Region Total SR SR SR SR SR Revenues 378,567,957 448,036,067 130,259,867 46,648,996 1,003,512,887 For the year ended 31 December 2023 Central Region Western Region (*) Eastern Region International Region Total SR SR SR SR SR Revenues 296,763,916 348,708,051 104,041,416 32,841,718 782,355,101 (*) Western region includes southern and northern regions. 30 EARNINGS PER SHARE Earnings per share is calculated by dividing the net profit for the year over the weighted average number of shares during the year. 2024 SR 2023 SR Net profit for the year 71,745,186 32,624,482 Weighted average number of shares - basic and diluted* 110,000,000 110,000,000 ──────── ──────── Earnings per share 0.65 0.30 ════════ ════════ There has been no item of dilution affecting the weighted average number of shares. * Earnings per share are calculated by dividing the net income by the weighted average number of outstanding shares at 31 December 2024 and the weighted average number of shares outstanding as at 31 December 2023 restated to give a retrospective effect of the change in the number of shares increased as a result of the share split and the bonus share issuance during the year (note 11). The diluted earnings per share is the same as the basic earnings per share. The shares split, bonus issue and additional capital contribution (as disclosed in consolidated statement of changes in equity) have been treated as if no change in the economic resources for the existing (pre-transaction) shareholders. The company has witnessed a simultaneous change in the shareholders upon the capital increase, had this been considered as a change in the existing shareholding, the weighted average number of shares would have been calculated by giving effect on time proportion basis to the aforementioned share transactions (as disclosed previously) that would have resulted in a different earnings per share number.
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Nice One Beauty Digital Marketing Company (Formerly: Product Sea Trading Company) (A Saudi Joint Stock Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended 31 December 2024 46 31 SUBSEQUENT EVENTS Other than as disclosed in notes 1 and 11 to these consolidated financial statements, management believes there are no subsequent events that might have significant impact on these consolidated financial statements. 32 APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS These consolidated financial statements were approved and authorized to issue by the Board of Directors on 3 Ramadan 1446H (corresponding to 3 March 2025G).