| Element List | Explanation |
|---|---|
| Introduction | Reference to the Material announcement which was on Monday, 16-08-1442 H corresponding to 29/03/2021 of the uncertainty about some inventory balances considered material |
| Date of Posting the Previous Announcement of Development on Tadawul's Website | 2021-03-29 Corresponding to 1442-08-16 |
| URL of the Previous Announcement | Click Here |
| Change on the Development | - Arabian Pipes Company reports that the consulting firm issued their report about the differences in inventory, which mentioned the following: |
1-Confirming that book stock and physical stock (quantities) are matching both plants (Riyadh- Jubail).
2-Confirming that there are financial differences in the inventory account amounting to SR 239.6 MM. The identified the most important reasons might have caused these differences since the establishment of the factory: -
-Opening balances of the inventory account in Jubail plant.
-Scrap generation theoretical value is automatically accounted and it is not actual based on actual scrap generation.
-Incorrect entries into inventory account for previous periods.
-Re-evaluating the inventory at the fair price according to the evaluation of the consulting firm.
3-The report does not confirm the reasons for these differences and mentioned that there are potential possibilities need to be reviewed more.
The financial impact, the external auditor has reviewed the consulting report, then the external auditor conducted his own auditing way for review the inventory account, after completing the auditing work of the financial statements for 2020, it became clear that there are financial differences estimated by SR 210 MM , Also, there is additional provision was made for inventory by around SR SR59 MM.
Due to that and to protect rights of the company and its shareholders , the board has ordered the following :
1- To use the necessary financial and legal advisory services to review the report of the consulting firm and what is needed to ascertain and verify that there are no violations of the laws and regulations and to complete the necessary procedures for that.
2. The Board also emphasized the following measures:
- Improve and develop the level of the internal controls of the company to avoid such matter in the future.
-Review and develop company's policies and procedures.
-Expedite the implementation of (ERP) project.
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