Code of Conduct

1.1. Purpose

This Code of Conduct and Ethics (the “Code”) includes the policies in relation with the standards of ethical practices of the Board members, committee members, executives, directors and employees (jointly referred to as “concerned persons”) are expected to comply with these standards while carrying out their duties before SADAFCO.

Moreover, this policy sets forth certain standards whereby persons are expected to comply with while carrying out the Company’s affairs. In order to facilitate the process of making decisions in conformity with the legal commitments and the competencies stated in the Company’s policy, as well as reinforcing the accountability and honesty.

The concerned persons are expected to be responsible for ensuring SADAFCO’s functions in a way that maximize the Company’s business opportunities, taking into consideration all legal and regulatory requirements and minimize the possibility of encountering unaccepted legal and regulatory risks.

1.2. Values

Concerned persons shall carry out all their duties with care and due diligence as per the Group’s values. All Concerned Persons will conduct themselves in such a way that their honesty is beyond question and will not behave in a manner that has the potential to bring SADAFCO’s image into disrepute.

1.3. Compliance with Laws, Rules, Internal Requirements, and Policies:

The Board members, committee members, and Executive Management members shall comply with all statutory and internal disclosure requirements in a timely manner. There are no such charters that may predict all unexpected situations; however, the Company is expecting the concerned persons to fulfill their duties with due integrity and loyalty and maintain a professional independent judgment, avoiding any harmful and wrongful acts while carrying out all their duties and responsibilities on behalf of the Company.

All concerned persons have to understand and follow the Code. In addition, all concerned persons are expected to perform their work with honesty and integrity in any areas not specifically addressed by this Code. A violation of the Code may result in appropriate disciplinary action including the possible termination from employment, without additional notice. The Code sets out general principles to guide employees in making ethical decisions. As such, nothing in the Code prohibits or restricts the Company from taking any disciplinary action within the law on any matters relative to employee practices, whether or not they are expressly discussed in this policy. SADAFCO’S Board is responsible for the final explanation of this Code of Conduct.

 

1.4. Abusing Position of Authority

All concerned persons shall not use their positions or the Company’s properties for their personal gain. Similarly, they are not allowed to occupy the time of the Company’s employees for their personal benefit.

1.5. Conflict of Interest

All concerned persons shall avoid any conflict of interest between themselves and the Company. A conflict of interest is a situation in which a concerned person has a competing professional or personal interest. Such competing interests can make it difficult to fulfill the employee’s duties effectively and objectively. This might also arise when concerned persons or their relatives receive improper personal benefits as an advantage of the concerned person’s position.

Concerned persons should disclose any potential or actual conflict of interest. Moreover, any actual or potential conflict of interest with the interest of the Board’s and Committees’ members shall be reported to the chairman of the Board and the chairman of the Audit Committee immediately. Accordingly, Executives, managers and employees should report such conflict of interests to their line managers.

Concerned persons may be appointed as SADAFCO’s representatives at the subsidiaries, provided that such appointment shall not affect any role or duty of any concerned person whilst carrying out his/ her competences or duties as a concerned person ethically, thus realizing SADAFCO’s interests.

1.6. Accepting Gifts

All concerned persons shall not receive or offer gifts of significance or personal benefits of any value from external parties doing business with the Company if this could influence their decisions. No gift shall be received from a supplier, vendor, contractor or customer unless if a refusal to accept it would be discourteous or otherwise harmful to the Company and if the gift has unsubstantial value of not more than SAR 2,000. Such acceptance shall be approved by their Management. All directors and employees shall report to their line managers upon receiving such gifts. In the situation of gifts sent to the Board’s and Committees’ members, those members shall report this to the chairman of the Board and the chairman of the Audit Committee. In all cases, the Management shall be informed when receiving gifts without regard to their financial values.

1.7. Invitations & Hospitality

In general, acceptance of an ordinary business invitation such as lunch, dinner, an event, etc., is appropriate if it is of a reasonable nature and is in the course of a meeting or another occasion, with the purpose of discussing a bona fide business or fostering business relations. All concerned persons shall report such invitations. Accordingly, all directors, managers and employees shall inform their line managers about such invitations, similarly, members of the Board and its committees shall report such invitations to the chairman of the Board and the chairman of the Audit Committee.

1.8. Outside Activities

All concerned persons are prohibited from engaging in any “freelance”, “moonlighting” activity or “employment” that adversely affects the quality or quantity of work performed in the Company, competes with the Company’s activities, implies sponsorship or support by the Company of the outside employment or organization, adversely affects the Company’s reputation, or uses of or interferes with the Company’s time, facilities, resources or supplies.

1.9. Interests in Other Businesses

It is a case of potential conflict of interest for any concerned persons, their spouses or any other immediate family members (referred to as “family members”) when they have a directly or indirectly financial interest (e.g., as an investor, lender or Board Member) in a competitor, customer or supplier with whom that concerned person or his/ her managers deal as an employee at the Company. Accordingly, employees must immediately disclose any such interests to their supervisor. Therefore, an employee must disclose to his/ her supervisor any employment or consulting relationship that a family member has with a competitor, customer or supplier with whom the employee has dealings.

1.10. Corporate Opportunities

 

All concerned persons have a duty to advance the Company’s legitimate interests when the opportunity to do so arises. Therefore, concerned persons are prohibited from:

  • Gaining personal interests through the opportunities discovered through the use of the Company’s property, information or position.
  • Competing with the Company.

1.11. Harassment

All concerned persons are committed to a working environment free from harassment, including discrimination, victimization and bullying, and in which there is nothing more important than the dignity of the individual. Based on that, all concerned persons are responsible for helping others to ensure that they do not suffer any form of harassment. Any concerned person who suffers from harassment will receive the full support of the Board and executive directors to put an end to it.

1.12. Nepotism Disclosure

The Company does not prevent the employment of relatives, and it does not wish to take a part in consensual relationships between co-workers. However, precautions shall be taken to ensure that individuals of the Company are not influenced by close personal relationships. Particularly, concerned persons may not directly supervise or participate in decisions regarding the hiring, retention, promotion or compensation of other concerned persons with whom they have a close personal relationship. The Company defines “close personal relationship” as relationships between family members, spouses, fiancés, children, grandchildren, siblings, nieces, nephews, parents, grandparents, aunts, uncles, and their spouses and any other relationships that reasonably might be perceived as potentially compromising a concerned person’s ability to make independent and unbiased decisions on behalf of the Company.

1.13. Employees Relations

This Code requires the concerned persons, regardless their executive levels, to strive to meet the following objectives:

  • To respect every employee, worker, representative, importer, or contractor as an individual with dignity.
  • To equally treat all employees, workers, representatives, suppliers, or contractors, without any discrimination of their race, color, gender (female or male), religion, age, origin, nationality, or disability.
  • To ensure an environment free of harassment based on race, color, gender (female or male), religion, age, origin, nationality, or disability.
  • To afford training opportunities for all employees to improve their skills, consistent with the needs of the Company.
  • To encourage promotions among employees, consistent with the needs of the Company, whenever employees are qualified.
  • To ensure that each manager personally knows his/ her employees, two levels directly below his/her level, personally to enable effective communication between the manager and his/ her employee.
  • To take any suggestion by external consultants as to enhance operations as an opportunity to improve skills rather than as criticism.
  • To provide safe, healthy and orderly workplace.
  • To ensure providing uniformly and fair exercises for compensations and benefits in which to attract, reward, and retain qualified employees.

1.14. Safety

The Company is obliged to provide a safe workplace for all concerned persons. In addition, there are laws and regulations imposed on the Company to provide protection and safety for its employees, thus preventing risks. Accordingly, all concerned persons who are present at the Company’s facilities should follow safety guidelines and procedures adopted by the Company. If employees have any concerns or questions regarding health and safety hazards at any Company facility, they shall bring those concerns to the attention of their managers immediately.

1.15. Confidential Information

All concerned persons are requested to maintain confidentiality of information entrusted to them, unless if the disclosure of such information was authorized or obliged by legal authorities. “Confidential Information” includes all non-public information that might be of use to competitors, or harmful to the Company or its customers if disclosed.

1.16. Fair Dealing

All concerned persons shall endeavor to deal fairly with all Company’s customers, suppliers, competitors, and employees. It is not permissible for any person to take advantage, conceal, manipulate, abuse privilege information, misrepresenting facts or any other unfair dealing practices.

1.17. Bribery and Corruption

Bribery takes place when an employee offers, receives, or accepts anything valuable in exchange of a special privileged favor by a company, government authority or official. It also occurs when the Company’s secures an unfair advantage over its competitors through secret and corrupt dealings with prospective customers. Bribery is illegal and any concerned person, who requests, takes part,  strives for bribery or any kickbacks, or strives to participate in a similar activity, will be subject to a strict disciplinary procedures that my result in termination of employment. The Company reserves the right to refer such matters to the specialized authorities for possible criminal prosecution.

1.18. Protection and Proper Use of the Company’s Information and Assets

All concerned persons shall protect the assets of the Company and use it properly. Theft, carelessness, and waste practices may affect the Company’s profitability directly. Thus, the Company’s assets must be used only for the authorized activities of the Company and its subsidiaries by the authorized employees or their designees. This includes the tangible, including vehicles and office equipment such as, phones, scanners, computers, furniture, and supplies, and intangible assets.

The Company’s email must be restricted primarily to Company business, and any confidential information shall be handled carefully. Passwords must be required to access sensitive documents and data. The Company reserves its right at any time- without notice- to monitor and inspect all electronic communications data and information transmitted on the network and electronic files located on personal computers owned by the Company or computers on the premises used in company business.

Third party software is used to enhance employee’s productivity and performance. Therefore, employees are liable for illegal software use.  To the extent permitted under applicable laws, employees, contractors and temporary employees shall assign to the Company any invention, work of authorship, composition or other form of intellectual property created during the period of employment.

1.19. Advertising and Promotional Activities

False, misleading, and deceptive marketing activities to sell the Company’s products are prohibited. Everyone shall realize that healthy and proper advertising practices are priority to ensure good reputation of the Company with its customers and the public. Therefore, all advertisements attracting actual and potential customers should be truthful and based on facts. In addition, all advertising activities made in catalogues, brochures, leaflets, posters, newspapers, magazines or other prints as well as non-printable media, must be substantiated before publication or dissemination.

1.20. Accurate Record Keeping & Reporting

All concerned persons shall keep record of the Company’s operations in its books, logs, records, and reports and keep it in a comprehensive system subject to internal work and disclosure guidelines to encourage compliance with the Company’s rules, regulations and laws.  All concerned persons must use reasonable endeavors to ensure that the Company’s reports and documents, including financial reports, are clear and true. Falsification of any document  is prohibited. All documents and communications authorized or legally mandated for disclosure to the public shall be fair, full, accurate, understandable and timely. All concerned persons shall comply with the requirements and standards to prepare reports, as well as the internal rules, regulations, and instructions. In addition, all concerned persons shall not enter into agreements on behalf of the Company, when the Company does not wish to be committed with.

1.21. Influence on the Auditing Process

Concerned persons may not circumvent the audit, who is in charge of auditing and reviewing the Company’s financial statements, to force, manipulate, or mislead him. Such improper influencing actions are:

  • Offering a bribe or any other financial benefit, including offering future employments or contracts not in relation with auditing services.
  • Providing inaccurate or misleading information to the audit, including legal analysis.
  • Threatening to cancel or actual cancelation of contracts relevant or irrelevant to auditing if the auditor objected the Company’s accounting practices.
  • Seeking to remove a partner from auditing process if he objected the Company’s accounting.
  • Physical threats or blackmailing.

1.22. Environment

The Company realizes that its business affects the environment. Therefore, the Company is committed to ensure reducing this impact where practicable. In order to fulfill this commitment, the Company will ensure to provide materials and resources that are sustainable and can be recycled, and to use it effectively with the minimum of wastes. Where practicable, the Company will use technologies, materials, and processes that do not have adverse impact on the environment. It will work to minimize the impact when this impact is unavoidable, and will ensure that its suppliers and contractors have the same objectives.

1.23. Contracting with the Government

All rules, laws, and regulations applicable to contracting with the government may impose special requirements.  Failure to comply with such requirements may result in criminal offense. Therefore, all concerned persons must comply with these requirements and refer any questions related to this compliance to the specialized individuals in the Company or outside counsel when necessary.

1.24. Reporting Unethical or Illegal Behavior

All concerned persons shall encourage ethical behavior, and encourage employees to speak up to their supervisors, managers, and other concerned persons, when in doubt about a particular situation. Unethical behavior at work has a serious impact on the Company, which may include imposing fines or warning letters by the Capital Market Authority or any other regulatory bodies, or may affect the Company’s reputation. Concerned persons must report any illegal or unethical behavior the moment they are informed of it. Thus, all executives, managers, and employees must report any illegal or unethical behaviors to their line managers or supervisors. In case if the manager/ supervisor hesitated to raise the employee’s concerns, he/ she can be confidant to speak up with an independent third party to raise their concerns on the Hotline.

Any Board and Committee member shall report any illegal or unethical behavior to the Board Chairman and the Audit Committee Chairman.  Violations will be investigated and actions will be taken by the appropriate personnel or the Board as necessary. The Company will not allow any retaliation for disclosures made in reporting violations.

1.25. Corporate Governance and Accountability

The Company shall be committed to high standards of corporate governance. The Board shall be accountable before the shareholders and others for the Company’s activities, as well as the effective practices performed within the Company. Board members shall ensure that the Company complies with all instructions stated in applicable regulations.

1.26. Review and Amendments

To ensure effectiveness and adequacy, this Code will be assessed periodically. The Company may review and amend the terms of this Code from time to time to ensure compliance with the amendments of applicable laws. An appropriate disclosure will be made in case of any amendments.

In addition, if an amendment to this Code is made or granted, appropriate disclosure will be made as per the requirements of CMA. For further information regarding this Code, you can refer to the Executive Management.

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