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Disclosure

Purpose

 

The Company shall comply with the laws, rules and regulations applicable to disclosures. All reports, documents or communications authorized or legally mandated for disclosure to the public shall be full, fair, accurate, timely and understandable.

 

To ensure fair disclosure to all stakeholders at the same time, the Company shall refrain from disclosing any information specifically designated to financial analysts, financial institutions or other parties before disclosing the information to the Saudi Stock Exchange (“Tadawul” or the “Exchange”) as a whole.

 

The Company shall carry out the following disclosure or notification requirements.

 

Disclosure Regarding Major Developments

 

  • The Company shall notify the Capital Market Authority and the public without delay of any major developments in its sphere of activity which are not public knowledge and which may have an effect on the Company’s assets and liabilities or financial position or on the general course of its business and which may:
    • Lead to substantial movements in the price of the listed securities.
    • In case the Company have debt instruments listed, lead to substantial movement in the price of its listed securities, or significantly affect its ability to meet its commitments.

 

  • The major developments referred above which the Company shall disclose include, but are not limited to, the following:
    • The purchase of a long term asset, at a price equal to or greater than 10% of the existing net assets of the Company.
    • Any debt outside the ordinary course of business, in an amount equal to or greater than 10% of the book value of the Company’s net assets.
    • Any losses, equal to or greater than 10% of the book value of the Company’s net assets.
    • Any significant change in the Company’s production environment or trade including but not limited to the availability of resources and the possibility of obtaining them.
    • Any changes in the composition of the Directors or Executive officers of the Company.
    • Any significant legal proceedings (where the amount involved is equal to or greater than 5% of the book value of the existing net assets of the Company).
    • The increase or decrease in the net assets of the Company equal to or greater than 10%.
    • The increase or decrease in the gross sales of the Company equal to or greater than 10%.
    • Any transaction between the Company and a connected person (outside the ordinary course of business of the Company).

 

  • The notification referred to above should be made at least two hours before the first trading period in the Exchange following the occurrence of the development.

 

Disclosure Regarding Financial Information

 

  • The interim and annual accounts shall be approved by the Board of Directors and signed by a Director authorized by the Board of Directors and by the President and the Director – Finance prior to their issuance and circulation to shareholders and third parties.
  • The interim and annual accounts and the Director’s report shall be filed with the Capital Market Authority immediately upon approval by the Board of Directors.
  • The Company shall announce, through the electronic applications that are specified by the Capital / Authority, its interim and annual accounts immediately upon approval by the Board of Directors and such statements must not be published to the shareholders or third parties prior to their announcement in the Exchange.
  • The Company shall provide the Capital Market Authority and announce to the shareholders its interim financial accounts (which must be prepared and reviewed in accordance with the accounting standards issued by SOCPA) as soon as they have been approved and within a period not exceeding 15 days after the end of the financial period to which they relate.
  • The Company shall provide the Capital Market Authority and announce to the shareholders its annual financial accounts (which must be prepared and audited in accordance with the accounting standards issued by SOCPA) as soon as they have been approved and within a period not exceeding 40 days after the end of the annual financial period to which they relate.
  • The Company must provide the Capital Market Authority and announce to the shareholders the annual financial accounts not less than 25 days before the date of the Company’s annual shareholder’s general meeting.

 

Board of Directors’ Report

 

  • The Company shall include with its annual financial accounts a report issued by the Board of Directors including a review of the operations of the Company during the last financial year and of all relevant factors affecting the Company’s business which an investor requires to assess the assets, liabilities and financial position of the Company.
  • The Board of Directors’ report shall contain the following:
    • The implemented provisions of these Regulations as well as the provisions which have not been implemented, and the justifications for not implementing them.
    • Names of any joint stock company or companies in which the Company Board of Directors member acts as a member of its Board of Directors.
    • Formation of the Board of Directors and classification of its members as follows: Executive Board member, non-Executive Board member, or independent Board member.
    • A brief description of the jurisdictions and duties of the Board's main committees such as the Audit Committee, the Nomination and Remuneration Committee. Indicating their names, names of their chairmen, names of their members, and the aggregate of their respective meetings.
    • Details of compensation and remuneration paid to each of the following:
    • The Chairman and members of the Board of Directors.
    • The Top Five Executives who have received the highest compensation and remuneration from the Company. The President and Director - Finance shall be included if they are not within the top five.
    • Any punishment or penalty or preventive restriction imposed on the Company by the Authority or any other supervisory or regulatory or judiciary body.
    • Results of the annual audit of the effectiveness of the internal control procedures of the Company.
    • A description of the principal activities of the Company and its group. If two or more activities are described, a statement must be included giving for each activity the turnover and contribution to trading results attributable to it.
    • A description of the Company’s significant plans and decisions (including any corporate restructuring, business expansion or discontinuance of operations), the future prospects of the Company and any risks facing the Company.
    • A summary of the assets and liabilities of the Company and of the Company’s business results for the last five financial years.
    • A geographical analysis of the Company’s consolidated turnover and of the consolidated turnover of its subsidiaries outside the Kingdom.
    • An explanation for any material differences between the operating results of the last year and the operating results of the previous year or any announced forecast made by the Company.
    • An explanation for any departure from the accounting standards issued by SOCPA.
    • The name of every subsidiary, its main business, its principal country of operation and its country of incorporation.
    • The particulars of the issued shares and debt instruments of every subsidiary.
    • A description of the Company’s dividend policy.
    • A description of any interest in a class of voting shares held by persons (other than the Company’s Directors, Executive officers and their spouses and minor children) that have notified the Company of their holdings, together with any change to such interests during the last financial year.
    • A description of any interest, options, and subscription rights of the Company’s Directors, Executive officers and their spouses and minor children in the shares or debt instruments of the Company or any of its subsidiaries, together with any change to such interest and rights during the last financial year.
    • Information relating to any borrowings of the Company (whether repayable on demand or otherwise), and a statement of the aggregate indebtedness of the Company and its group together with any amounts paid by the Company as a repayment of loans during the year. In case there are no loans outstanding for the Company, the Company shall provide an appropriate statement.
    • A description of the classes and numbers of any convertible debt instruments, options, warrants or similar rights issued or granted by the Company during the financial year, together with the consideration received by the Company.
    • A description of any conversion or subscription rights under any convertible debt instruments, options, warrants or similar rights issued or granted by the Company.
    • A description of any redemption or purchase or cancellation by the Company of any redeemable debt instruments and the amount of such securities outstanding, distinguishing between those listed securities purchased by the Company and those purchased by its subsidiary.
    • The number of meetings of the Board of Directors held during the last financial year and the attendance record of each meeting.
    • A comprehensive statement of all the amounts received by Directors during the financial year in way of salaries, share in profits, attendance fees, expenses, and other benefits, as well as all the amounts received by the Directors in their capacity as Executives of the Company.
    • Information relating to any contract to which the Company is party and in which a Director of the Company, the President, the Director - Finance or any associate is or was materially interested, or if there are no such contracts, the Company must submit an appropriate statement.
    • A description of any arrangements or agreement under which a Director or a Senior Executive of the Company has waived any emolument or compensation.
    • A description of any arrangements or agreement under which a shareholder of the Company has waived any rights to dividends.
    • A statement of the amount of any outstanding statutory payment on account of any Zakat, taxes, duties or other charges with a brief description and the reasons therefore.
    • A statement as to the value of any investments made or any other reserves set up for the benefit of the employees of the Company.
    • Statements that:
      • “Proper books of account have been maintained”.
      • “The system of internal control is sound in design and has been effectively implemented”.
      • “There are no significant doubts concerning the Company’s ability to continue as a going concern”.
      • If any of the statements above cannot be made, the report must contain a statement clarifying the reasons therefore.
    • If the external auditors’ report on the relevant annual accounts is qualified, and the Capital Market Authority requires additional information, the Director’s report shall include such information as has been provided to the Capital Market Authority.
    • If the Board of Directors recommends that the external auditors should be changed before the elapse of three consecutive financial years, the report must contain a statement to that effect and the reasons for such recommendation.

 

Disclosure Regarding Corporate Governance

 

  • The Company shall disclose material information on corporate governance policies and procedures.
  • Specifically, the Company shall disclose the following:
    • Division of authority between shareholders, Executive officers and Directors.
    • Board nomination policies.
    • Conflicts of interest.
    • Number of Board meetings held annually.
    • Corporate objectives other than shareholder value maximization and their explanation
    • Shareholder voting system.

 

Disclosure Regarding Corporate Social Responsibility Polices

 

  • The Company shall disclose its corporate social responsibility policies and procedures related to employees, community and environment at least once a year.

 

Notification Related to Capital

 

  • The Company shall notify the Capital Market Authority without delay of the following information:
    • Any proposed change in the capital of the Company.
    • Any significant change in the holding or identity of those persons holding more than 5% of the Company’s listed securities.
    • Any decision to declare, recommend or pay dividend or to make any other distributions to the shareholders.
    • Any decision not to declare, recommend or pay dividend which would otherwise have been expected to have been declared, recommended or paid in the normal course of events.
    • Any decisions to call, repurchase, draw, redeem or propose to buy any of its securities and the total amount thereof.
    • Any decision not to make payment in respect of listed debt instruments.
    • Any change in the rights attached to any class of listed securities or to any securities into which any listed securities are convertible.

 

Miscellaneous

 

  • The Company shall notify the Capital Market Authority promptly of:
    • Any change in the Company’s by-laws or the location of its principal office.
    • Any change in its external auditors.
    • The presentation of any winding-up petition, the making of any winding-up order or the appointment of a liquidator in respect of the Company, its holding company or any of its subsidiaries under the Companies Regulations, or the commencement of any proceedings under the Bankruptcy Regulations.
    • The passing of a resolution by the Company, or any subsidiary that it will be dissolved or liquidated, or the occurrence of an event or termination of a period of time which would require the Company to be put into liquidation or dissolution.
    • The making of any judgment, order or declaration by a court or tribunal of competent jurisdiction, whether at first instance or on appeal, which may adversely affect the Company’s utilization of any portion of its assets which in aggregate value represents an amount in excess of 5% of the book value of the net assets of the Company; or It becoming aware that the percentage of listed shares which are in the hands of the public or the number of shareholders required by the Capital Market Authority has fallen below the minimum levels required.

 

Provision of documents to the Capital Market Authority

 

  • The Company shall send copies to the Capital Market Authority of the circulars sent to shareholders and all documents relating to take-over, mergers and offers, notices of meetings, reports, announcements or other similar documents, promptly after they are issued.

 

Remuneration and Compensation of Directors and Executive officers

 

  • The Company shall ensure that where the Company or any of its subsidiaries wishes to pay a remuneration or compensation to a Director or proposed Director of the Company or any of the Company’s Executive officers or to any Director or proposed Director of any subsidiary:
    • Full written details of any such proposed remuneration or compensation are sent to all shareholders before the shareholders’ General Assembly in which such proposed remuneration or compensation is to be the subject of a vote.
    • The terms of the remuneration or compensation are approved in advance by the shareholders of the Company in a general meeting at which the relevant Director or the Executive officer, as the case may be, does not vote on such terms.

 

Notification Related to Substantial Shareholdings

 

  • The relevant person related to the following event must notify the Company and the Capital Market Authority at the end of the trading day of the occurrence of any of the following events:
    • He or it becoming the owner of, or interested in, 5% or more of any class of voting shares or convertible debt instrument.
    • The ownership or interest of the person referred to above increasing or decreasing by 1% or more of the shares or debt instruments of the Company.
    • A Director or Senior Executive of the Company becoming the owner of, or interested in, any rights in the shares or debt instruments of that Company (or any of its affiliates).
    • The ownership or interest of any of the Directors or Executive officers of the Company increasing or decreasing by 50% or more in the shares or debt instruments that he or she owns in that Company (or any of its affiliates), or by 1% or more of the shares or debt instruments of that Company (or any of its affiliates) whichever is less.
  • In calculating the total number of shares in which a person is interested, that person will be deemed to be interested in any shares owned by or controlled by any of the following persons:
    • A spouse or minor child of that person.
    • A company controlled by that person (where that person holds 30% or more of the voting power or if the Company or its Directors are accustomed to act in accordance with that person’s directions).
    • Any other persons with which that person has agreed to act in concert to acquire interest in shares of the Company.
  • The notice referred to above must be in accordance with a form prepared by the Capital Market Authority and contain at least the following information:
    • The names of the persons who own or have the right to dispose of the subject shares or debt instruments.
    • Details of the ownership or interest.
    • Details of any loans or financial support that the person has received from any other persons.
    • The ownership or interest objective.
  • In case of a change in the ownership or interest objective that was previously disclosed, the relevant person must promptly notify the Company and the Capital Market Authority of such change and shall not dispose of any shares or debt instruments of that Company except after the expiry of (10) days from the date of that notification.
  • Without prejudice to the provisions of this Article, a person who has become an owner of or interested in 10% or more of any class of voting shares or convertible debt instruments, must not dispose of the same without the approval of the Capital Market Authority.