Notes to the
Consolidated Financial Statements

Kingdom Holding Company (the “Company” or “KHC”) is a Saudi Joint Stock Company (“JSC”) operating in the Kingdom of Saudi Arabia. The Company was previously formed as a limited liability company and operated under commercial registration number 1010142022 dated 11 Muharram 1417H (corresponding to 28 May 1996). The Ministry of Commerce approved, pursuant to resolution number 128/S dated 18 Jumad Awwal 1428H (corresponding to 4 June 2007), the conversion of the Company into a JSC. The majority shareholder of the Company is His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz AlSaud (“Ultimate controlling party”).

The principal activities of the Group are hotel management and operations, commercial services and education and investments.

The shares of the Company commenced trading on the Saudi Stock Exchange on 28 July 2007 after approval by the Capital Market Authority of the Kingdom of Saudi Arabia.

The Company’s head office is located in Riyadh at the following address:

Kingdom Holding Company
66th Floor, Kingdom Centre
P.O. Box 1, Riyadh 11321
Kingdom of Saudi Arabia

Climate Change

The Group has reviewed its exposure to climate related and other emerging business risks and has not identified any risks that could materially impact the financial performance or position of the Group as at 31 December 2024.

Liquidity and financial position

As of 31 December 2024, the Group had net current liabilities of Saudi Riyals 2.1 billion (31 December 2023: Saudi Riyals 1.0 billion), primarily due to the maturity of certain current borrowings amounting to Saudi Riyals 3 billion. To manage its liquidity needs, the Group has access to undrawn borrowing facilities of Saudi Riyals 7.9 billion, along with an existing portfolio of liquid, unpledged investments and the option to roll over revolving credit facilities as they mature. Furthermore, management has conducted a cash flow projection analysis for the upcoming twelve months and remains confident that the Group will be able to meet its obligations as they come due.

Accordingly, these consolidated financial statements are prepared on going concern basis.

These consolidated financial statements were authorized for issue by the Company’s Board of Directors on 16 Ramadan 1445H (corresponding to 16 March 2025).

The Company and its subsidiaries (the “Group”) carry out activities through the entities listed below.

1.1 Kingdom 5-KR-11 Limited (KR-11)

KR-11 is a fully owned limited liability company incorporated in the Cayman Islands. The company’s principal activity represents investments in international quoted securities, through its wholly owned subsidiaries.

1.2 Kingdom 5-KR-100 Limited (KR-100)

KR-100 is a fully owned limited liability company incorporated in the Cayman Islands. The company’s principal activity represents ownership and management of mutual funds, through its equity-accounted investees.

1.3 Kingdom 5-KR-132 Limited (KR-132)

KR-132 is a fully owned limited liability company incorporated in the Cayman Islands. The company’s principal activity includes holding investments in the following subsidiaries and equity-accounted investees that own and manage properties and hotels:

1.4 Kingdom 5-KR-114 Limited (KR-114)

KR-114 is a fully owned limited liability company incorporated in the Cayman Islands. The company holds 58.96% (2023: 58.96%) ownership in Breezeroad Limited, a company which is incorporated in the Cayman Islands which in turn holds a 100% ownership in Savoy Hotels Limited in the United Kingdom.

1.5 Local and regional subsidiaries

The Group also has ownership in the following local and regional subsidiaries and equity-accounted investees:

* Investment of KHC in East Shuraa III is effectively owned through a special purpose vehicle (Sea Front Company Limited) which is 100% owned by KHC.

The principal activities and the various segments of the Group are described in Note 33.

2.1 Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (“SOCPA”).

2.2 Historical cost convention

These consolidated financial statements have been prepared under the historical cost convention, except for the Investments carried at FVOCI and FVTPL, which are measured at fair value.

Further, the employee termination benefits are calculated using the Projected Unit Credit Method (PUCM) and actuarial assumptions.

2.3 New standards and amendments applicable from January 1, 2024

Certain amendments to existing standards became applicable for the current reporting period. The amendments did not have an impact on the consolidated financial statements of the Group and accordingly the Group did not have to change its accounting policies or make any retrospective adjustments.

2.4 Standards, interpretations and amendments issued but not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2024, reporting periods and have not been early adopted by the Group. The standards, interpretations and amendments issued that are relevant to the Group but are not yet effective are disclosed below:

The management is in the process of assessing the impact of these standards, amendments or interpretations on future periods and on foreseeable future transactions.

The preparation of consolidated financial statements in conformity with IFRS, that are endorsed in the Kingdom of Saudi Arabia, requires the use of certain critical estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenue and expenses during the reporting period. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and judgments concerning the future.

The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and judgements that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next twelve-month period are discussed below:

3.1 Significant estimates

Investment in equity accounted investees – impairment testing

The Group assesses at each reporting date whether there is an indication that an interest in equity-accounted investees may be impaired. If any indication exists, the Group estimates the asset’s recoverable amount. For further details refer Note 4.16 and Note 11.

Goodwill and intangible assets – annual impairment testing

The Group tests whether goodwill and other intangible assets with indefinite useful life have suffered any impairment on an annual basis. For the 2024 and 2023 reporting periods, the recoverable amount of the cash-generating units (CGUs) was determined based on fair value less costs of disposal which require the use of assumptions. For further details refer Note 14.

Estimation of fair value - Investment in a social media services company and certain Oil and Gas Companies’ securities

The Group has exercised judgement in estimating the fair value of an investment in a social media services company and certain Oil and Gas Companies’ securities as at 31 December 2024 as part of the level 3 measurements of such financial instruments. For further details refer to Note 10.1 and 10.2.

3.2 Significant judgements

Kingdom School Company Limited

The Group is the largest shareholder in KS while the remaining shares are held by twelve investors. The CEO of the Group is also the CEO of the KS. As a result of shareholder’s agreement, the Group is exposed to, or has rights to, variable returns from its involvement with the company and has the ability to affect those returns through its power to direct the activities of the company. The Group has therefore determined that it has control over KS, even though it only holds 47% of the voting rights.

Further, the Group has advanced funds to various minority shareholders of KS for the purpose of acquiring their respective shareholdings in the company. Upon completion of these transactions, the Group’s effective ownership in KS will increase to 89.8%. While the legal formalities for these transactions are still pending, the Group has recognized its ownership at 89.8%, reflecting the substance of the arrangements, with the formalities expected to be finalized in the near future.

Also see Note 22 increase in effective stake in NCI.

Accor S.A France

The Group has a Board seat and other committee representations and actively participates in the policy making process of the company and it is the second largest strategic investor in the company. The CEO of the hospitality arm of the Group is the representative Board member and actively participates in the decision-making process through his presence on the Board and through significant interaction with key management of Accor Hotels. The Group has therefore determined that it has significant influence over this entity. During the year, the company’s shareholders approved a share buyback. As a result of this transaction, the group shareholding increased slightly from 6.3% to 6.8%.

Banque Saudi Fransi (BSF) – Saudi Arabia

The Group is the largest shareholder of the bank and has a Board seat and other committee representations and participates in the policy making process of the bank. The CEO of the Group is also the Vice Chairman of the Board of Directors of the bank. The Group has therefore determined that it has significant influence over the bank, even though it only holds 16.2% of the voting rights.

The material accounting policies applied by the Group in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

4.1 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). These consolidated financial statements are presented in Saudi Riyals which is the Company’s functional and Group’s presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in the consolidated statement of income.

Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statement of income, within finance costs. All other foreign exchange gains and losses are presented in the consolidated statement of income on a net basis within other gains/(losses).

Non-monetary items 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. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at FVTPL are recognized in the consolidated statement of income as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as at FVOCI are recognized in consolidated statement of comprehensive income.

(c) Group companies

The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
• income and expenses for each statement of income and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognized in the consolidated statement of comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings are recognized in consolidated statement of comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to the consolidated statement of income, as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

4.2 Principles of consolidation and equity accounting

i. Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group (See Note 4.3).

Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests (‘NCI’) in the results and equity of subsidiaries are shown separately in the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position, respectively.

ii. Associates

Associates are all entities over which the Group has significant influence but not control or joint control. Investments in associates are accounted for using the equity method of accounting (see (iii) below), after initially being recognized at cost.

iii. Equity method

Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses of the investee in the consolidated statement of income, and the Group’s share of movements in other comprehensive income of the investee in consolidated statement of comprehensive income. Dividends received or receivable from associates are recognized as a reduction in the carrying amount of the investment.

When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the other entity.

Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in Note 4.18.

4.3 Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

• fair values of the assets transferred;
• liabilities incurred to the former owners of the acquired business;
• equity interests issued by the Group;
• fair value of any asset or liability resulting from a contingent consideration arrangement; and
• fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the

• consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in the consolidated statement of income as a bargain purchase.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date. Any gains or losses arising from such re-measurement are recognized in the consolidated statement of income.

4.4 Financial instruments

(i) Financial assets

Classification

The Group classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income (OCI) or through profit or loss), and
• those to be measured at amortized cost.

Classification of debt financial assets (long-term receivable) depends on the Group’s business model for managing its financial assets and the contractual terms of the cash flows.

The group holds the debt financial assets with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/ (losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.

For assets measured at fair value, gains and losses are either recorded in the consolidated statement of income or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at FVOCI.

Recognition and de-recognition

Regular way purchases and sales of financial assets are recognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are de-recognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial assets not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in the consolidated statement of income.

The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to the consolidated statement of income following the de-recognition of the investment. Dividends from such investments continue to be recognized in the consolidated statement of income when the Group’s right to receive dividends is established.

Changes in the fair value of financial assets at FVTPL are recognized as revenues in the consolidated statement of income as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment

The Group assesses on a forward-looking basis the Expected Credit Losses (“ECL”) associated with its financial assets carried at amortized cost. ECL reflects an unbiased and probability-weighted amount which is determined by evaluating a range of possible outcomes, the time value of money and reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. The financial assets of the Group subject to ECL are cash and cash equivalents, trade receivables, long-term receivable and due from related parties. Also refer Note 31. For long-term receivable, the Group applies a three-stage model for impairment, based on changes in credit quality since initial recognition. A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12 months or until contractual maturity, if shorter (“12 Months ECL”). If the Group identifies a significant increase in credit risk (“SICR”) since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but considering expected prepayments, if any (“Lifetime ECL”). If the Group determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL.

De-recognition

A financial asset or a part of a financial asset is de-recognized 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:
  • The Group has transferred substantially all the risks and rewards of the asset, or
  • The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

  (ii) Financial liabilities

  Financial liabilities are recognized at the time when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities are recognized initially at fair value less any directly attributable transaction cost. Subsequent to initial recognition, these are measured at amortized cost using the effective interest rate method.

  A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expired. Where 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 a de-recognition of the original liability and the recognition of a new liability, and the difference in respective carrying amounts is recognized in the consolidated statement of income. The Group’s financial liabilities include borrowings, dividends payable, trade payables, accrued expenses and other current liabilities and due to related parties.

  Offsetting financial assets and liabilities

  Financial assets and liabilities are offset, and the net amount reported in the consolidated statement of financial position where the Group currently has a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

  4.5 Cash and cash equivalents

  Cash and cash equivalents include cash on hand, bank balances and short-term deposits with original maturities of three months or less, which are subject to an insignificant risk of changes in value less restricted cash. Restricted balances are excluded from cash and cash equivalents for the purposes of the consolidated statement of cash flows.

  4.6 Trade receivables

  Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognized initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognized at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest rate method.

  4.7 Investment properties

  Investment properties comprise property held for capital appreciation, long-term rental yields or both, and are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Investment properties also include property that is being constructed or developed for future use as investment properties. In addition, land, if any held for undetermined use is classified as investment properties and is not depreciated. When the development of investment properties commences, it is classified as “Assets under construction” until development is complete, at which time it is transferred to the respective category and depreciated using straight-line method at rates calculated to reduce the cost of assets to their estimated residual value over their expected useful lives of 4 to 99 years.

  Maintenance and normal repairs which do not materially extend the estimated useful life of an asset are charged to the consolidated statement of income as and when incurred.

  Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are recognized and presented separately within other losses - net in the consolidated statement of income.

  4.8 Property and equipment

  Initial recognition

  Property and equipment are recognized as an asset when, and only when, it is probable that future economic benefits will flow to the Group, and the cost of the asset can be measured reliably. Property and equipment are recognized and measured initially at cost. Cost includes the fair value of the consideration given to acquire the asset and any directly attributable cost.

  When parts of property and equipment are significant in cost in comparison to the total cost of the item and such parts have a useful life different than other parts, the Group recognizes such parts as individual assets and depreciates them accordingly.

  Subsequent measurement

  The Group adopted the cost model to measure the entire class of property and equipment. After recognition as an asset, an item of property equipment is carried at its cost less any accumulated depreciation and any accumulated impairment losses.

  Subsequent expenditure

  Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

  Depreciation

  Useful lives are determined by management based on the expected usage of the asset, expected physical wear and tear, technical and commercial obsolescence, legal and similar limits on the use of the assets and other similar factors. Depreciation is calculated on a straight-line basis over the below useful lives and is recognized in the consolidated statement of income:

  Description	Number of years
  Buildings (hotels)	20 to 99 years or the lease term
  Equipment	5 to 13
  Furniture and fixtures	4 to 20
  Others	4 to 14

  Land and assets under construction that are not ready for intended use are not depreciated.

  De-recognition

  Property and equipment are de-recognized when they have been disposed or no future economic benefits are expected to arise from their use or disposal. Gains or losses arising from de-recognition of an item of property and equipment is included in the consolidated statement of income at the time the item is de-recognized.

  4.9 Intangible assets

  Intangible assets acquired separately are measured at cost upon initial recognition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.

  The useful lives of intangible assets are assessed to be 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 each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset, are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the consolidated statement of income in the expense category consistent with the function of the intangible asset.

  Goodwill is measured as described in Note 4.3. Goodwill and brands identified on acquisitions of subsidiaries are included in intangible assets. Goodwill and brands are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate that these might be impaired, and are carried at cost less accumulated impairment losses, if any. Gains and losses on the disposal of an entity include the carrying amount of goodwill or brands relating to the entity sold.

  Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.

  4.10 Borrowings

  Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statement of income over the period of the borrowings using the effective interest rate method. Borrowing costs are recognized within finance charges in the period in which they are incurred.

  Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

  General and specific finance costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. There were no borrowings costs that required capitalization during 2023.

  Borrowings are derecognized from the consolidated statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in consolidated statement of income as other income or finance costs.

  4.11 Trade and other payables

  These amounts represent liabilities for goods and services, provided to the Group prior to the end of financial year, which are unpaid. The amounts are unsecured and are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest rate method.

  4.12 Zakat and income tax

  The Group is subject to zakat and income tax in accordance with the regulations of the Zakat, Tax and Customs Authority (“ZATCA”). Zakat, for the Group and its subsidiaries subject to zakat, is calculated based on higher of approximate zakat base and adjusted profit and charged to the consolidated statement of income. Additional amounts, if any, are accounted for when determined to be required for payment.

  Foreign subsidiaries and foreign branches are subject to income taxes in their respective countries of domicile, such income taxes are charged to the consolidated statement of income.

  Income tax based on the applicable income tax rate is adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

  Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

  Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Group has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

  Withholding tax

  The Company and its Saudi Arabian subsidiaries also withhold taxes on certain transactions with non-resident parties in the Kingdom of Saudi Arabia as required under Saudi Arabian Tax Law.

  4.13 Dividends

  Dividend payable is recognized for the amount of any dividend declared being appropriately authorized and no longer at the discretion of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period. As per the corporate laws in the Kingdom of Saudi Arabia, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

  4.14 Employee benefits and post-employment benefits

  Short-term employee benefits

  Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

  Post-employment obligation

  The Group operates a post-employment benefit scheme plans driven by the local laws of the countries in which the Group entities operate.

  The post-employment benefits plans are not funded. Valuations of the obligations under those plans are carried out using actuarial techniques on the projected unit credit method. The costs relating to such plans primarily consist of the present value of the benefits attributed on an equal basis to each year of service and the interest on this obligation in respect of employee service in previous years.

  Current and past service costs related to post-employment benefits are recognized immediately in the consolidated statement of income while unwinding of the liability at discount rates used are recorded as financial cost.

  Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized directly in other comprehensive income and transferred to other reserves in the consolidated statement of changes in equity in the period in which they occur.

  Changes in the present value of the defined benefit obligations resulting from plan amendments or curtailments are recognized immediately in the consolidated statement of income as past service costs. End of service payments are based on employees’ final salaries and allowances and their cumulative years of service, as stated in the laws of the respective countries in which the Group operates.

  4.15 Share capital

  Ordinary shares are classified as equity.

  4.16 Impairment of non-financial assets

  The Group assesses at each reporting date whether there is an indication that a non-financial asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal 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 is considered impaired and is written down to its recoverable amount. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a 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, an appropriate valuation model is used.

  Impairment losses are recognized in consolidated statement of income in expense categories consistent with the function of the impaired asset.

  For assets excluding goodwill, an assessment is made at each reporting date 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 cash-generating unit’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. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of income.

  4.17 Provisions

  Provisions are recognized 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 recognized 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 recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

  Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-zakat and income tax 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 recognized as interest expense. The expense relating to a provision is presented in the consolidated statement of income.

  4.18 Revenue recognition

  • Revenue from hotel operations

  Revenue is primarily derived from hotel operations, including the rental of rooms, food and beverage sales and other services from owned hotels. Revenue is recognized when rooms are occupied, food and beverages are sold and services are performed.

  Revenue is recognized net of returns, rebates, municipality fees and discounts. Service charges collected from the customers are recorded as revenue, as the Group is the principal / primary obligor and is required to provide the service to the customer in return for the receipt of the service charge.

  A receivable is recognized when the goods are delivered, as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. Usually there are no rights to return attached, therefore no refund liabilities are required to be recognized.

  • Rental income

  The Group owns offices, mall spaces, temporary spaces etc. The revenue is recognized on a straight-line basis over the term of the lease taking into consideration any incentives given, the rent received in advance, if any is recognized as a liability. The rental contracts are relatively simple and are fixed price contracts where the customer pays the fixed amount based on a payment schedule. If the services rendered by the Group exceed the payment, an asset is recognized. If the payments exceed the services rendered, a liability is recognized.

  • Educational services

  Revenue is recognized when the educational services are performed. Revenue is shown net of discounts and scholarships. The Group recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Group and when specific criteria have been met.

  • Retail

  Revenue is recognized when goods are sold and invoices are issued to customers. Revenue is recorded net of discounts.

  • Investment measured at FVTPL

  The fair value gains or losses on investments measured at FVTPL are recognized as operational revenues as the Group invests in those equity investments as its operating activity in its normal course of business.

  Financing component

  The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

  4.19 Earnings per share

  Basic earnings per share

  Basic earnings per share is calculated by dividing:

  • the profit attributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares
  • by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements, if any, in ordinary shares issued during the year and excluding treasury shares.

  The Group does not have any share options, uncalled or partially paid shares, deferred or convertibles notes and therefore there is no difference between basic and diluted earnings per share.

  4.20 Segment reporting

  An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”). Board of Directors (BOD) is identified as CODM of the Group.

  Reportable segments are disclosed separately at least where, total revenue is more than 10% of the total revenue of the Group, or absolute amount of profit or loss is more than 10% of combined reported profit of all segments (excluding loss making segments) and combined reported loss of all segments (excluding profit making segments), or total assets are more than 10% of total assets of the Group.

  4.21 Derivative financial instruments

  The Group utilizes derivative financial instruments to manage certain market risk exposures. The Group does not use derivative financial instruments for speculative purposes; however, it may choose not to designate certain derivatives as hedges for accounting purposes. The use of derivative instruments is subject to limits and the positions are regularly monitored and reported to senior management.

  Written options

  The Group uses ‘European Style’ written options contracts to manage its exposure to fair value movements on its certain investments at fair value. These contracts permit net settlement in cash or other financial assets equivalent to the change in the contract’s fair value and hence these contracts are accounted for as a derivative financial instrument in the period between trade and settlement date. On initial recognition, the net fair value of these contract itself is recognized as a derivative financial liability at the trade date. The Group receives an option premium as consideration for entering written options contracts on the trade date from the counter party (i.e., seller of the written options contract). Any subsequent changes at each reporting date in the fair value of these written options are recognised immediately in consolidated statement of income and are included in other gains / (losses).

  Interest Rate Swaps

  The Group uses interest rate swap contracts to manage its exposure to interest rate movements on its long-term borrowings. Other financial liabilities (excluding long term-borrowings) are primarily non-interest bearing.

  4.22 Dividend Income

  Dividends are received from financial assets measured at fair value through other comprehensive income (FVOCI). Dividends are recognised as dividend income in consolidated statement of income when the right to receive payment is established.

5.1 Cash and cash equivalents include deposit with a related party (associate) amounting to Saudi Riyals 26.2 million (2023: Saudi Riyals 134.2 million).

5.2 Restricted cash and bank balance are related to the restrictions placed by the banks for the utilization of certain funds.

The Group classifies those equity investments at FVTPL for which it has not elected to recognize fair value gains and losses through other comprehensive income at initial recognition. As at 31 December 2024, FVTPL investments consist of unquoted securities.
The movement in FVTPL investments is set out below:

Following is the breakdown of net receivables:

During the year ended 31 December 2024, the receivable related to the sale of Oil and Gas companies, Telefonica securities amounting to Saudi Riyals 255 million, and a long-term receivable of Saudi Riyals 1.3 billion due from a third party was fully settled in cash.

Due to the short-term nature of the trade receivables and determination of the carrying value of the long-term receivable at fair market rate of discount, their carrying amount is not significantly different from their fair value. Also see Note 31.

Trade receivables are expected, on the basis of experience, to be fully recoverable. Generally, it is not the practice of the Group to obtain collateral over trade receivables. Thus, trade receivable balances are unsecured.

The following table shows movement in provision for impairment of trade receivable:

Information about the impairment of trade and other receivables and their credit quality, and the Company’s exposure to credit risk, currency risk and interest rate risk can be found in Note 31.

Related parties comprise the shareholders, directors, associate companies and key management personnel and business over which they exercise control or significant influence. Related parties also include entities in which certain directors or senior management have an interest.

The transactions with related parties represent rental services, maintenance and other general services rendered to or purchased from related parties of the Group including positions in certain listed entities. Balances due to and due from related parties are outstanding balances in lieu of such transactions. Related party balances, other than those disclosed elsewhere in these consolidated financial statements, as at 31 December are as follows:

See Note 5 and Note 16 for cash and borrowings balances held with a related party that is an equity-accounted investee (Banque Saudi Fransi). There are no other significant related party transactions that warrant separate disclosure in these consolidated financial statements.

Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value through other comprehensive income rather than the consolidated statement of income as these are strategic investments and the Group considered such election to be more relevant. FVOCI investments consist of international, local and regional quoted securities.

(a) FVOCI investments consists of the following:

(b) The movement in FVOCI is set out below:

The investments at FVOCI are denominated in the following currencies:

10.1 Investments in Oil and Gas Companies’ securities

The Group maintains investments in certain Oil and Gas Companies’ securities that were dual-listed on both the London Stock Exchange (LSE) and Moscow Stock Exchange (MSE). The ongoing conflict between Russia and Ukraine led to the suspension of trading on the LSE in the first half of 2022, preventing the Group from trading its shares on the MSE from that point onward.

In the latter half of 2023, the Group successfully liquidated a portion of these securities, generating sales proceeds of Saudi Riyals 1.0 billion and recognized a realized loss of Saudi Riyals 0.27 billion for the year ended 31 December 2023. The remaining securities primarily represent purchase transactions executed by the Group after 1 March 2022. Challenges in disposing of these remaining securities have arisen due to increased regulatory and administrative barriers enacted by the Russian government.

To assess the fair value of the remaining Oil and Gas Companies’ securities, management used the trading price prevalent on MSE as at 31 December 2024, amounting to Saudi Riyals 980 million (2023: Saudi Riyals 1,190 million). This amount was then reduced by 70% (2023: 92%) to account for the regulatory/administrative constraints. The decrease in the discount factor from 92% to 70% reflects an expected improvement in regulatory flexibility concerning the trading and transfer of such securities. A 5% change in this percentage would result in a Saudi Riyal 16 million change in the fair value of these securities as at 31 December 2024.

10.2 Investment in securities of a social media services company

As at 31 December 2024, the Group holds a position in equity securities of a privately held social media services company (‘Tech Company’) amounting to Saudi Riyals 985 million (USD 262.7 million). Given the absence of quoted market prices, the fair value measurement is classified within Level 3 of the IFRS 13 fair value hierarchy, relying significantly on unobservable inputs.

Management determined fair value primarily based on recent observable private transactions involving independent, knowledgeable, and willing market participants. Specifically, the Group referenced recent transactions executed by the majority shareholder of the Tech Company, including an additional equity investment of Saudi Riyals 562.5 million (USD 150 million) at a transaction price approximating the carrying value as at 31 December 2024. Furthermore, the majority shareholder has expressed willingness to acquire additional minority stakes at the same transaction price.

Based on these factors, management concluded that observable market evidence supports the carrying value as representative of fair value. Given the active interest of a market participant to transact at this price, management deemed no adjustments for liquidity or minority discounts necessary.

Sensitivity analysis indicates that a hypothetical 5% discount adjustment would impact fair value by approximately Saudi Riyals 50 million. Management believes the assumptions and valuations employed are reasonable and align with prevailing market practices for similar privately held minority investments.

10.3 Addition to investment at FVOCI – North America (Level 3 Category)

During the year ended 31 December 2024, the Group invested Saudi Riyals 3 billion (USD 800 million) in xAI, a North America-based artificial intelligence company. This investment was part of xAI’s Series B and Series C funding rounds, each of which raised Saudi Riyals 22.5 billion (USD 6 billion), amounting to total proceeds of Saudi Riyals 45 billion (USD 12 billion).

The Series C funding round concluded on 23 December 2024, valuing xAI at SAR 169 billion (USD 45 billion) and establishing a fair valuation of the Group’s stake in xAI at SAR 4.2 billion as of 31 December 2024. Management has assessed that this recent funding round represents the relevant fair valuation for the Group’s investment in xAI at the reporting date.

(a) The movement in investments in equity-accounted investees for the years ended 31 December is as follows:

Details of equity-accounted investees at 31 December are summarized as follows:

11.1 During the year ended, the Group contributed Saudi Riyals 233 million in cash for the joint venture associated with the development of Shura Island resort.

Following is the summary financial information for the equity-accounted investments:

The summarized financial information below represents amounts shown in the equity-accounted investee’s financial statements prepared in accordance with IFRS as applicable to the relevant jurisdiction.

Among the equity-accounted investees mentioned above, BSF and Accor are listed entities. At 31 December 2024, the fair value of the Group’s holding in these associates as per quoted prices amounts to Saudi Riyals 6,415 million (2023: Saudi Riyals 7,352 million) and Saudi Riyals 3,028 million (2023: Saudi Riyals 2,362 million), respectively.

Accor

For the year ended 31 December 2024, Accor reported strong financial performance, with EBITDA increasing to SAR 4.4 billion (2023: SAR 4.0 billion). Revenue grew by 11%, while net profit increased by 1% compared to the previous year. Accor also distributed SAR 1.2 billion in dividends during the year (2023: SAR 1.2 billion).

As at 31 December 2024, the Group did not identify any impairment indicators requiring an impairment assessment of its investment in Accor. However, as part of its ongoing monitoring, the Group conducted a value-in-use assessment using a discounted cash flow model over a 10-year period, which management considers appropriate given Accor’s diversified global presence and the investment lifecycle within the hospitality sector. The assessment indicated sufficient headroom, supporting the recoverability of the investment’s carrying value.

NAS

Previously, the Group held an indirect 37.1% equity stake in Flynas through its investment in NAS Holding, which owned 100% of Flynas. As of 31 December 2024, the ownership structure was reorganized, resulting in a direct transfer of the Group’s stake from NAS Holding to Flynas. Following this restructuring, the Group now holds a direct 37.1% equity stake in Flynas. The transaction was recorded at the net book value of the investment as carried in the Group’s books, with no gain or loss recognized.

The Group’s remaining investment in NAS continues to be carried at its existing value, primarily representing its services of charter and leased flights. No indicators of impairment were identified for NAS, excluding its former Flynas operations, which are discussed below.

Flynas

During 2024, NAS recorded strong topline growth. The revenue for NAS increased by 19% to reach Saudi Riyals 7.6billion (2023: Saudi Riyals 6.4 billion) for the year ended 31 December 2024. NAS also recorded a net profit of Saudi Riyals 438 million (2023: profit of Saudi Riyals 363 million) for the year ended 31 December 2024. The strong financial performance was underpinned by increase in fleet size to 70 aircrafts (2023: 64 aircrafts); increase in passengers by 31.6% to 14.7 million (2023: 11.1 million passengers) and launch of 14 new destinations in 2024 (40 new destinations in 2023).

In light of Flynas’s strong financial performance, the Group reassessed the recoverable amount of investment. The impairment assessment model indicated that the recoverable amount exceeded the carrying value, supporting a reversal of previously recognized impairment. As a result, the Group reversed an impairment loss of Saudi Riyals 200 million (2023: Nil) that had been recorded in prior years.

JEC

On October 2, 2024, JEC entered into a construction contract with Saudi Binladin Group (SBG) to re-engage SBG for the completion of the JEC Tower project. Under this agreement, construction is expected to be completed within 42 months at a revised contract value of Saudi Riyals 7.2 billion, which includes Saudi Riyals 1.059 billion previously paid for completed work.

On the same date, JEC also entered into a Final Amendment and Settlement Agreement (the “New Agreement”) with its existing shareholders and SBG. As per the New Agreement, the existing shareholders will initiate the necessary formalities to register SBG as a shareholder of JEC with a 10.66% ownership stake. However, the shares issued to SBG will not carry any economic benefits or variable interest in JEC until specific conditions are met, including but not limited to the completion, testing, and pre-commissioning of the JEC Tower project.

As at 31 December 2024, the Group has accounted for its investment in JEC based on the new Agreement with an effective ownership interest of 35.74%, reflecting the expected dilution. The Group believes that the conditions outlined in the New Agreement are administrative in nature and do not materially impact its economic interest in JEC at this stage. However, it will continue to assess the New Agreement’s conditions and any developments that may affect the accounting treatment, including potential changes in control or economic entitlement.

These new agreements supersede all previous arrangements between SBG, the existing shareholders, and the Group, rendering any prior obligations or outstanding amounts null and void.

BSF

As of 31 December 2024, the market price of KHC’s share of investment in BSF was below the carrying value, which was considered as a potential impairment indicator. The management believes that this decrease in market price is primarily due to the bonus share issuance, and is a temporary impact. Considering BSF’s strong long-term financial and operational performance, management believes there are no underlying issues with BSF’s financial health.

FSH

FSH continue to demonstrate strong topline growth and has been consistently profitable. As such the management of the Group did not identify any triggers for assessment of impairment and accordingly no impairment assessment was performed for the year ended 31 December 2024.

East Shura III Company

During the year ended, the Group contributed Saudi Riyals 233 million in cash for the joint venture associated with the development of Shura Island resort.

12.1 During the year ended 31 December 2021, the Group disposed of land for a total sale consideration of Saudi Riyals 1.5 billion (present value: Saudi Riyals 1.25 billion. Also see Note 7). The sale proceeds were structured to be received in cash over a five-year period. The transaction resulted in a net gain of Saudi Riyals 502 million, after discounting the sale proceeds to present value and deducting related sales expenses, including real estate taxes and sales commissions.

In July 2024, the outstanding long-term receivable balance of Saudi Riyals 1.3 billion, due from the third party, was fully settled in cash. Until settlement, the Group recognized finance income of Saudi Riyals 47 million in 2024 (2023: Saudi Riyals 87 million) using the effective interest rate method. This amount was recorded in the consolidated statement of income under ‘Finance Income’. The difference between the carrying value of the receivable and the consideration received was not considered material.

12.2 Investment properties – Development and Sale of Riyadh land

On 6 July 2020, the Group, through its local subsidiaries, entered into an agreement (the “Agreement”) with Hamad and Ahmed Mohammed Al-Muzaini Real Estate Company (the “Second Party”) for development of a designated parcel of land totaling 4,103,561 Square Meters (‘SQM’).

The land for the project was divided into different sections, with specific areas allocated for residential units, commercial units, and services. The allocation of SQM for each plot of land was as follows:

It was agreed under the Agreement that the Second party will be entitled to ownership of land area designated for residential units i.e. 1,408,619 SQM, as a consideration of development activity carried out on the entire land parcel of 4,103,561 SQM.

Development on such land was completed during the year ended 31 December 2023. As at 31 December 2023, the Group has completed transfer of legal title for all the residential units measuring 1,408,619 SQM.

The Group has accounted for derecognition of residential land as consideration-in-kind for development/construction activity carried out by the Second Party on the remaining parcel of land designated for commercial and services area. The related development activity on the commercial and services area has been capitalized under ‘Investment Property” in the statement of financial position at fair value of the consideration given up amounting to Saudi Riyals 553 million. The difference in the fair value of Saudi Riyals 553 million and carrying value of Saudi Riyals 299 million of the residential land has been recognized under “Other gains, net” in the consolidated statement of income for the year ended 31 December 2023.

The capitalization of development cost of Saudi Riyals 553 million is considered as non-cash investing activity for the purpose of statement of cash flow for the year ended 31 December 2023.

12.3 Certain investment properties have been collateralized against term loans (Note 16).

12.4 As at 31 December 2024, investment properties kept for the purpose of rental yields amounted to Saudi Riyals 1 billion (2023: Saudi Riyals 1.2 billion). The direct attributable expenses associated with the rental income amounts to Saudi Riyals 184 million (2023: Saudi Riyals 210 million) for the year ended 31 December 2024. Rental agreements for these properties are for a maximum period of one year.

The valuation for investment properties which has been performed by real estate valuers accredited by the Saudi Authority for Accredited Valuers (TAQEEM) by using accredited valuation techniques such as Market Method (Comparison Approach), amounted to Saudi Riyals 4 billion (2023: Saudi Riyas 4.5 billion) as at 31 December 2024.

12.5 Investment property - Sale of compound by a subsidiary

During the year ended 31 December 2024, the Board of Directors approved the sale of a compound recognized under ‘Investment Properties’ Financial Statement Line Item and held by one of the subsidiaries (Real Estate Investment Company “REIC”) of the Group.

The sale transaction was completed between REIC and Sakan Al Rabie Real Estate Company (“third party”) on 4 February 2024. This transaction was executed for the consideration amounting to Saudi Riyals 0.9 billion. The carrying amount of this compound in books of Group amounted to Saudi Riyals 0.78 billion. The gain arising from this transaction amounted to Saudi Riyals 0.12 billion which has been recorded in the books of the Group for the year ended 31 December 2024.

Goodwill and intangible assets comprise the following:

Movement in goodwill and other intangible assets is set out below:

Goodwill recognized by the Group mainly represents an amount of Saudi Riyals 1.108 billion (31 December 2023: Saudi Riyals 1.159 billion) recognized on its cash generating unit – George V.

Other intangible assets include an indefinite life brand amounting to Saudi Riyals 680.9 million (2023: Saudi Riyals 680.9 million) recognized on acquisition of Savoy Hotels Limited. The indefinite life is due to the fact that the hotel is considered a trophy asset and management concluded that the benefits will be for an indefinite period. Therefore, the brand is not amortized but tested for impairment annually.

Intangible assets with definite lives are amortized over their useful economic lives ranging from 3 to 5 years.

Impairment of indefinite life assets

The recoverable amounts have been determined based on fair value less costs to disposal, using discounted cash flow analysis. The hotel is the lowest level within the Group at which the intangible asset is monitored for internal management purposes. The cash flow projections are based on financial budgets that are approved by management of the respective entities. These cash flow projections are for a period of 9 years (2023: 9 years) for George V and Savoy.

The following table sets out the key assumptions made in performing the impairment reviews:

For George V, the recoverable amount would equal its carrying amount if the key assumptions were to change, keeping other variables constant, as follows:

For Savoy, the recoverable amount would equal its carrying amount if the key assumptions were to change, keeping other variables constant, as follows:

The outstanding borrowings balance is presented as follows:

The movement in the borrowings is as follows:

Details of borrowings by entity are as follows:

These borrowings are loan facilities from different banks and financial institutions. The management utilize them to settle the facilities which are falling due in the said years and to support the strategic decision making of the Group. Similar to the year ended 31 December 2024, the Group has drawn down to pay off facilities which are falling due during the year from the undrawn facilities. The Group has also entered into certain new loan facilities during the year. The Group has complied with all its covenants.

As at 31 December 2024, the Group had an outstanding loan of Saudi Riyals 970 million from a related party, BSF.

Following is a summary of the Group’s significant borrowings:

KHC

Loans in KHC were obtained from commercial banks and consist of several facilities including syndicated loans and revolving credit facilities. These loans carry borrowing costs based on Saudi Inter-Bank Offered Rate (“SIBOR”), Euro Interbank Offered Rate (“EURIBOR”) and Secured Overnight Financing Rate (“SOFR”) plus a spread and are secured against certain investments and cash in certain bank accounts of the Group. The value of these assets pledged as securities amounts to Saudi Riyals 16.5 billion as at 31 December 2024. The aggregate maturities of these loans, based on their respective repayment schedules, are spread over a period of 5 years. Loan agreements include certain financial covenants with respect to minimum tangible net worth, consolidated EBIT, consolidated net commission costs, loan to value ratio, minimum standalone and consolidated total assets, debt service ratio and interest coverage ratio. The carrying values of the borrowings are denominated in following currencies:

Kingdom 5-KR-11 Limited

Loans in Kingdom 5-KR-11 limited carry floating interest rates based on EURIBOR plus a spread. The facilities are secured against certain FVOCI investments. The value of these investments amounts to Saudi Riyals 5.5 billion as at 31 December 2024. The aggregate maturities of these loans, based on their respective repayment schedules, are spread over a period of 3 years. These loans are denominated in Euro. Loan agreements include certain financial covenants with respect to minimum tangible net worth, consolidated EBIT, consolidated net commission costs, loan to value ratio, minimum standalone and consolidated total assets and debt service ratio.

Kingdom 5-KR-35 Group – George V Hotels

In October 2023, the loan associated with Kingdom 5-KR-35 was fully repaid. Additionally, during the current year, the Kingdom 5-KR-35 secured a new loan facility amounting to Saudi Riyals 1.7 billion, which was hedged through an Interest Rate Swap (IRS) derivative. This new facility is backed by a mortgage on the George V hotel property. The carrying value of this property amounts to Saudi Riyals 941 million. The loan agreement includes certain financial covenants such as loan to value ratio (based on the market value of the George V hotel property). The loan carries floating interest rates (based on EURIBOR) and is due to mature on 22 September 2028. The loan is denominated in Euro and has been classified as non-current borrowings as at 31 December 2023.

During 2024, the Kingdom 5-KR-35 has also entered an IRS derivative with certain financial institutions. For IRS related disclosures, refer to Note 36.1.

Kingdom KR-114 Limited – Savoy

Loans in Kingdom KR-114 Limited have different maturities within the next two years and carry interest rates which are either fixed or floating based on the Sterling Overnight Index Average (“SONIA”). These loans are denominated in GBP. The loans are secured through registered mortgages and liens over the Savoy Hotel. The carrying value of this hotel is Saudi Riyals 1.96 billion as at 31 December 2024 and fair value exceeds the carrying value as at that date. Loan agreements include certain financial and cash trap covenants which are based on loan to value ratios. Such loan to value ratios are computed based on market value of the Savoy Hotel property.

For IRS related disclosures, refer to Note 36.2.

Trade Centre Company Limited (TCCL)

The loan facility carries an interest rate based on SIBOR. Loan agreements include certain financial covenants with respect to debt service ratio. The loan facility is secured by a mortgage on tower (Kingdom Tower) land classified under Property and Equipment and Investment Properties Financial Statement Line Items (‘FSLIs’).

As at 31 December 2024, Property and Equipment and Investment Properties pledged as collateral to this loan facility amounted to Saudi Riyals 801 million and Saudi Riyals 643 million respectively. The facility is repayable in 30 quarterly installments, starting from 30 June 2020, and ending on 30 September 2026, with the balance due for repayment on the final maturity date of 31 December 2026.

16.1 Net Debt Reconciliation

Zakat and income tax expense reported in the consolidated statement of income consists of the following:

18.1 Zakat

The zakat obligations for the year represent the estimated zakat due on the Company and its local subsidiaries located in Kingdom of Saudi Arabia (‘KSA’). The movement in the zakat provision is as follows:

Zakat for the year represents the amount due on the Company and its subsidiaries located in KSA. The significant components of zakat base under zakat and income tax regulations are principally comprised of equity, provisions at the beginning of year, long-term borrowings and adjusted net income, less deduction for the net book value of long-term assets and certain other items. The differences between the accounting and adjusted net income are mainly due to provisions and other items which are not allowed in the calculation of adjusted net income subject to zakat.

Status of final assessments

During 2020, the Company settled all of its open assessment years with ZATCA for the years till 2020. However, during 2021, the Zakat, Tax and Customs Authority (“ZATCA”) reopened the assessments for the years 2015 to 2018 claiming additional zakat amounts related to those years. During the year ended 31 December 2023, the Company has closed all its open assessments for such periods (2015 to 2018) with ZATCA and executed a payment of Saudi Riyals 256 million as settlement for open assessments which was in line with the provision recorded by the Company for such years.

The remaining years (2019 and onwards) are under review by ZATCA and management believes that the zakat provision recorded in the books sufficiently covers such years and is based on historical settlements and analysis conducted internally.

The Company has filed its zakat returns up to the years ended 31 December 2023 with ZATCA.

There are no significant pending zakat assessments received in relation to the operations of subsidiaries in the Kingdom of Saudi Arabia by ZATCA.

18.2 Income tax

The Group’s subsidiaries which are incorporated outside the Kingdom of Saudi Arabia are subject to tax laws of the respective country of incorporation.

There are no significant pending income tax assessments or tax notices received in relation to the operations of subsidiaries in foreign countries by their respective taxation authorities.

The Group is subject to withholdings taxes deducted at source on dividend received on certain equity securities registered in foreign jurisdictions.

Deferred tax liabilities and assets relate to the following:

Deferred tax asset primarily relates to tax losses and employee benefit obligations arising related to the operations of George V hotel properties.

The share capital as at 31 December 2024 and 31 December 2023 consists of 3,706 million authorized and issued shares at a par value of Saudi Riyals 10 each. Each ordinary share carries one vote and rank pari passu for dividend distribution.

21 (a) Statutory reserve:

The By-laws of the Company requires to the Company to set aside 10% of net profit for the year as statutory reserve until the reserve reaches 30% of their share capital. The Company has amended its By-laws to align it with the requirements of new Regulation of Companies made effective in January 2023.

21 (b) Other reserves:

The following table shows a breakdown of other reserves and the movement in these reserves during the year:

This balance represents the share of the non-controlling interest in the following subsidiaries:

The summarized financial information below relates to the Group’s subsidiaries and represents amounts before intra-group eliminations as of and for the year ended 31 December 2024:

* Reassessment of Non-Controlling Interests and Related Accounting Adjustments

During the year, the Group increased its stake in various subsidiaries through share purchase agreements (SPAs) and power of attorneys signed in prior years. In certain cases, the revised NCI stake does not necessarily align with the percentages recorded in the Articles of Association (AoA) of the respective subsidiaries. For some subsidiaries, such as Kingdom Schools Company Limited, the Articles of Association are in the process of being updated to reflect the revised ownership structure.

Additionally, for certain entities (TCCL and REIC), the stake identified in the Articles of Association differs from the ownership percentage indicated by various SPAs and powers of attorney executed by minority shareholders. In these cases, the Group has recognized an effective ownership interest that reflects the rights conveyed through these agreements, which, in some instances, result in a higher stake than what is currently documented in the Articles of Association.

From an accounting perspective, advances previously paid to acquire additional stakes from non-controlling shareholders were classified as long-term advances in prior years. In 2024, the Group successfully completed key legal formalities for significant subsidiaries (TCCL and REIC). These formalities included updates to the Articles of Association and registration with the Ministry of Commerce.

As a result, these advances, amounting to Saudi Riyals 500 million, have now been adjusted against the respective NCI balances. For other subsidiaries where legal formalities are still in progress, management expects completion by 2025.

The summarized financial information below relates to the Group’s subsidiaries and represents amounts before intra-group eliminations as of and for the year ended 31 December 2023:

23.1 Following is the break-up of hotel and other operating revenues under different streams:

23.2 Disaggregation of revenue from external customers

The Company is domiciled in the Kingdom of Saudi Arabia. The amount of its revenue from the customers, broken down by location of the customers, is mentioned below:

GAIN ON INVESTMENTS AT FVTPL

27.1 Includes the Group’s auditors’ fee of Saudi Riyals 4.64 million (2023: Saudi Riyals 4.31 million) for the audit and review of the consolidated financial statements and Saudi Riyals 0.75 million (2023: Saudi Riyals 0.75 million) for the non-audit services.

Finance charges consist of interest payments on outstanding borrowings net of finance income, which is not material for separate disclosure, arising from cash balance and short-term deposits held at banks.

Hotel segment

The Group has on-going activities to construct and renovate hotels and other properties, with various stages of completion. The total outstanding capital commitments relating to such developments as at 31 December 2024 amounted to Saudi Riyals 231 million (2023: Saudi Riyals 389 million).

NAS

The equity accounted investee (NAS) of the Group has entered into contracts with the aircraft manufacturer for the purchase of certain aircraft. The remaining value of this contract is Saudi Riyals 13,735 million (2023: Saudi Riyals 6,420 million) as at statement of financial position.

30.1 Contingencies

The Group is a defendant in various legal claims arising in the normal course of business. Based on the information presently available, there are no significant claims against the Group requiring a provision. Management believes that the provisions maintained for such claims are adequate. Any additional liabilities including any potential zakat assessments (Note 18) that may result in connection with other claims are not expected to have a material effect on the Group’s financial position or results of operations.

30.2 Letter of Credits and Guarantees

At 31 December 2024, the Group does not have any outstanding letters of guarantee as at 31 December 2024 and 2023. However, the Group’s share in the equity-accounted investees’ letters of guarantees, credits and acceptance as of 31 December 2024 amounted to Saudi Riyals 14 billion (31 December 2023: Saudi Riyals 13.5 billion).

The Group holds the following financial instruments:

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risks and equity price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. Risk management is carried out by senior management under policies approved by the Board of Directors.

Currency risk

The Group’s exposure to foreign currency risk at the end of the reporting period, 31 December was as follows:

Currency risk arises from commercial transactions and recognized assets and liabilities denominated in a currency that is not the functional currency of the relevant Group entity. Majority of the Group’s assets and liabilities are denominated in the functional currency of the respective subsidiaries, therefore the related currency risk is minimal. At the parent entity level, the assets and liabilities are denominated in Saudi Riyals or US Dollars. The Saudi Riyal is currently pegged to the US Dollar, therefore there is no currency risk on US Dollars denominated assets and liabilities.

The Group has exposure for its borrowings in Euros and GBP respectively. A 5% change in the closing exchange rate for borrowings in Euro and GBP will impact the consolidated statement of other comprehensive income by Saudi Riyals 296 million and Saudi Riyals 43 million respectively.

The Group is also exposed to exchange rate fluctuations arising from RR and EUR due to its investments in Russian and European securities. A 5% change in the currencies of such securities will impact OCI by Saudi Riyals 16 million and Saudi Riyals 199 million, respectively.

Interest rate risk

The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. The Group closely monitors the movement in interest rates and manages its risk accordingly. It is not a practice to hedge the interest rate risk except for loan facilities obtained by Kingdom 5-KR-35 limited.

An increase/decrease in interest rate of 1% (excluding hedging relationships), with all other variables held constant, would have resulted in a decrease/increase in the Group’s consolidated total comprehensive income amounting to Saudi Riyals 102 million (2023: Saudi Riyals 133 million).

Equity price risk

The Group’s listed and unlisted equity investments are susceptible to price risk, arising from uncertainties about fair values of investment securities. The Group manages equity price risk through diversification and setting limits on investments. The exposure to equity securities and its impact on equity is detailed in the table below with a % change in equity prices. The Company has historically faced a risk of 1% fluctuation in its equity price risk. The sensitivity is also computed for

Credit risk

The Company is exposed to credit risk as a result of the counterparty’s failure to meet its contractual obligations when due, in respect of:

• Trade receivables
• Long-term receivable
• Due from related parties
• Cash at banks

Credit risk is the risk that the Group will incur a financial loss as a result of the failure of the customer or counterparty to a financial instrument to fulfil its contractual obligations. The carrying amount of financial assets represents their maximum credit exposure. Impairment/(reversal) on financial assets recognized in the statement of income for the year ended 31 December 2024 amounted to Saudi Riyals 1.2 million (2023: Saudi Riyals (5.2) million). Credit risk is managed on an entity level.

Revenue from hotel operations is settled mainly in cash or credit card therefore the related credit risk is minimal. Revenue from educational services is also received in advance therefore resulting in low credit risk.

For other receivables (arising from sale of land, renting of shops, villas and apartments), the Group assesses the credit quality of the customer, considering its financial position, past experience and other factors. Individual risk limits are then assigned.

For banks and financial institutions, only independently rated parties with a minimum rating of A are accepted. Therefore, the ECL on cash and cash equivalents is immaterial.

The Group has kept cash and cash equivalents in reputable banks and financial institutions, so the expected credit losses of cash and cash equivalents as at 31 December 2024 and 2023 is not material. The cash balance as at 31 December 2024 is Saudi Riyals 1.7 billion (31 December 2023: Saudi Riyals 1.9 billion).

The credit ratings of banks in which the Group holds cash as at 31 December are as follows:

Trade receivables are shown net of allowance for impairment. The Group applies the IFRS 9 simplified approach for measuring expected credit losses on trade receivables. To measure the expected credit losses, trade receivables are grouped based on shared credit risk characteristics and the days past due.

A significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment.

A default on a financial asset is when the counterparty fails to make contractual payments within 60 days of when they fall due, or the counterparty meets the unlikeness-to-pay criteria listed as follows:

• the counterparty is deceased;
• the counterparty is insolvent;
• the counterparty is in breach of financial covenant(s); and
• it is becoming likely that the counterparty will enter bankruptcy.

The expected loss rates are based on the payment profiles over a period of 36 and 12 months for regular receivables from tenants and guests respectively before the reporting date and the corresponding historical credit losses experienced within this period. Unless 100% collateralized any receivables beyond the above-mentioned periods of the respective profiles are written off.

The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified GDP and the unemployment rates to be the most relevant factors and has accordingly adjusted the historical loss rates based on expected changes in these factors.

There are no significant concentrations of credit risk, whether through exposure to individual customers and specific industry sectors.

The Group evaluates the concentration risk with respect to trade receivables which are primarily located in the Kingdom of Saudi Arabia (KSA). Trade receivables balance comprises of 79.4% in KSA, 3.2% in Gulf Cooperation Council (GCC) countries (other than KSA) and 17.4% in other countries (2023: 80.6% in KSA, 0.60% in GCC countries (other than KSA) and 2.86% in other countries). The nature of businesses of the Group owned entities does not expose it to credit concentration risk.

Trade receivables from other operations are not material to the consolidated financial statements.

With regard to due from related parties amounting to Saudi Riyals 115 million as at 31 December 2024 (31 December 2023: Saudi Riyals 124 million), the Group has never experienced any default from these related parties. The amount is due on demand and management has no concern over the recoverability of this balance. Hence, no ECL provision was charged against this receivable.

The table at the start of Note 31 shows the maximum exposure to credit risk.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses including the servicing of financial obligations. This excludes the potential impact of extreme circumstances that cannot be reasonably predicted, such as natural disasters.
In addition, the Group has access to credit facilities.

Cash flow forecasting is performed by management which monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while always maintaining sufficient headroom on its undrawn committed borrowing facilities so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance and compliance with internal ratio targets. Also see Note 1.

The table below analyses the Group’s financial liabilities into the relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Capital management risk

Total capital is calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt. The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders or sell assets to reduce debt.

The Group’s capital management strategy is to maintain sufficient capital so that the percentage of debt to total assets does not exceed 60% of total assets (i.e. to maintain a 40% headroom).

Capital management

Fair values

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 Group’s financial instruments are measured under the historical cost convention, except for investment carried at FVOCI and FVTPL which are carried at their fair values.

Fair value hierarchy

Level 1: The fair value of financial instruments traded in active markets (such as trading and fair value through other comprehensive income securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The following table presents the Group’s financial assets measured and recognized at fair value on a recurring basis including their levels in the fair value hierarchy at 31 December 2024:

Valuation techniques used to determine fair values

Level 1 and level 2 designated financial instruments

Specific valuation techniques used to value financial instruments include, the use of quoted market prices resulting in level 1 valuations, observable market inputs and latest transaction prices resulting in level 2 valuations.

Level 3 designated financial instruments – Investments at FVOCI/FVTPL

Investments at FVOCI

As at 31 December 2024, Level 3 investments designated under North America and Asia, relate to equity positions held in Tech and Oil and Gas Companies’ securities, respectively. The respective valuation technique used to determine the fair values including the key inputs/assumptions have been disclosed in Note 10.1, 10.2 and 10.3.

Valuation process

The Group has a team that performs/reviews the valuations of non-property items required for financial reporting purposes, including fair values of financial instruments. This team reports directly to the Chief Investment Officer (CIO). Discussions of valuation processes and results are held between the CIO and the valuation team at least once every six months, in line with the Group’s half-yearly reporting periods.

Changes in level 2 and 3 fair values are analyzed at the end of each reporting period during the half-yearly valuation discussion.

Transfer from level 2 to level 3

During the year ended 31 December 2024, there were no transfers carried out between Level 1, Level 2 and Level 3 fair value measurements.

Movement in level 3 designated FVOCI investments

Portfolio Composition and Key Holdings

As of 31 December 2024, the Investments at FVOCI encompasses strategic holdings in Citibank, xAI, M&G, Phoenix, and Telefonica Groups, with their respective fair values constituting 24%, 19%, 6%, 5%, and 5% of the portfolio.

Fair value of other financial instruments

The Group also has a number of financial instruments which are not measured at fair value in the consolidated statement of financial position. For the majority of these instruments, the fair values are not materially different to their carrying amounts, since the interest receivable/payable is either close to current market rates (mostly due to frequent re-pricing) or the instruments are short-term in nature.

In accordance with the provisions of IAS 19 ‘Employee Benefits’, management has carried out an exercise to assess the present value of its obligation at 31 December 2024 and 2023, using the projected unit credit method, in respect of employees’ end of service benefits payable under the local laws applicable to the respective subsidiaries and the parent company. Under this method, an assessment has been made of the employee’s expected service life with the Group and the expected basic salary at the date of leaving the service.

Management has assumed average increment/promotion costs between 5.1% to 5.9% (31 December 2023: 4.9% to 5.5%). The expected liability at the date of leaving the service has been discounted to its net present value using an approximate discount rate between 6% to 7% (31 December 2023: 5% to 6%).

The Group is a diversified organization and derives its revenues and profits from a variety of sources. The investment committee, comprising senior management and the Chief Executive Officer, organize and manage its operations by business segments and have identified the following segments separately for the purposes of monitoring, decision making and performance assessment.

Description of segments and principal activities

The Group’s primary operations are organized into the following segments:

The inter-segment revenues for the Group are insignificant and accordingly have not been disclosed.

Earnings per share for the years ended 31 December 2024 and 2023 have been computed by dividing the profit for the year by the total number of shares outstanding during 2024 of 3,706 million shares (2023: 3,706 million shares).

The General Assembly of the Company, in its annual meeting held on 26 Dhu al-Qa’dah 1445H (corresponding to 3 June 2024), approved the distribution of cash dividends amounting to Saudi Riyals 1,037.6 million (Saudi Riyals 0.28 per share). Payment in respect of the first, second and third dividend distribution of Saudi Riyals 778.2 million, relating to the year ended 31 December 2023, was made during the year ended 31 December 2024

Payment for the fourth dividend distribution of Saudi Riyals 259.4 million, relating to the year ended 31 December 2022, was made during the year ended 31 December 2024.

The put option expired out of the money in the month of June 2024 and a gain of Saudi Riyals 14 million was recorded under “other gains, net” during the year ended 31 December 2024.

During the year ended 31 December 2024, the Group recorded a net unrealized loss of Saudi Riyals 1.6 million in other comprehensive income (2023: Nil), representing the effective portion of interest rate swap (IRS) derivatives, with Saudi Riyals 0.1 million related to Kingdom 5-KR-35 and Saudi Riyals 1.5 million to Kingdom 5-KR-114 (refer to Notes 36.1 and 36.2).

36.1 Interest rate swap derivative – Kingdom-5-KR-35 – George V hotels

As disclosed in Note 16, to hedge the variability in the interest rate on the new loan facility, Kingdom-5-KR-35 entered into an IRS derivative contract (the ‘Contract’) with a counterparty whereby the interest rate was fixed for a determinable rate for the entire period of loan facility due to mature in September 2028.

Under the contract, Kingdom-5-KR-35 agreed to pay a fixed interest rate to the counterparty for 5 years while receiving a variable interest rate based on the EURIBOR.

For the purpose of hedge accounting, IRS derivative contract (hedge item) has been designated as cash flow hedge. The critical terms of the hedge item match with the designated hedge instrument. The fair value and notional amount of the IRS derivative is as follows:

Notional amount of the loan: Saudi Riyals 1.7 billion

Fair value of the derivative: Saudi Riyals 61 million

The hedge is deemed effective, with a net unrealized loss recorded in other comprehensive income.

36.2 Interest rate swap derivative – Kingdom 5-KR-114 – Savoy

As disclosed in Note 16, Kingdom 5-KR-114 Limited entered into an IRS derivative contract (the “Contract”) with a counterparty to hedge against interest rate fluctuations on its new loan facility, which is scheduled to mature in October 2028. The Contract effectively fixed the interest rate for the duration of the loan.

Under the contract, Kingdom 5-KR-11 Limited agreed to pay a fixed interest rate to the counterparty (DBS Bank, OCBC Bank, and National Bank of Kuwait) for five years, while receiving a variable interest rate based on the Sterling Overnight Index Average (SONIA).

For hedge accounting purposes, the IRS derivative contract was designated as a cash flow hedge. The critical terms of the hedge item match those of the designated hedging instrument. The fair value and notional amount of the IRS derivative are as follows:

Notional amount of the loan: Saudi Riyals 650 million

Fair value of the derivative: Saudi Riyals 1.5 million

The hedge is deemed effective, with a net unrealized loss recorded in other comprehensive income.

The Board of Directors on 16 March 2025 proposed a distribution of cash dividends totaling to Saudi Riyals 1,037.6 million, subject to approval in the next Ordinary General Assembly meeting.