The Dividend Distribution Policy is prepared as per the requirements of Article (9) of Corporate Governance Regulations, Companies Law and Corporate Bylaws.
The Board shall execute the General Assembly resolution regarding distribution of dividends to the registered shareholders who owned shares on the eligibility date within 15 days from the due date determined in the General Assembly resolution, or Board resolution for distributing interim dividends.
Dividends shall be paid to the shareholders in the place and date determined by Board.
1- Announcement for the Distribution of Interim Dividends.
The company is obliged to make a prompt disclosure and announcement on TADAWUL, whenever a resolution is made by the Board for the distribution of interim dividends on a biannual or quarterly basis. Moreover, it shall provide the CMA with a copy of the Board resolution after the issuance.
2- Announcement for the Distribution of Annual Dividends.
Based on the Board recommendation, the Shareholders General Assembly shall vote for the distribution of annual dividends. The Company is committed to the Board resolution to recommend an annual dividend to the General Assembly for voting and immediately should disclose and announce that on TADAWUL website.
The announcement issued by the company should include the following:
- Date of the Board resolution.
- Distribution period (annual, interim, biannual or quarterly).
- Total distributed amount.
- Number of shares entitled for dividends.
- Distribution amount per share.
- Distribution percentage to the nominal share value.
- Date of entitlement. The eligibility will be to those shareholders who owned shares on the eligibility day, and registered in the Securities Depository Centre on the end of the second trading day following the eligibility day.
- Date of distribution (In case if distribution date is not fixed), “Date to be announced” shall be mentioned.
- a) The company’s annual net profits shall be distributed as follows:
- 10% of the net profits are to be set aside to form the company’s statutory reserve. The Ordinary General Assembly may choose to stop this reserve once it reaches 30% of the capital paid.
- The Ordinary General Assembly based on the proposal of the Board may set aside (10%) of the net profits to form voluntary reserve to be allocated to the determined objective or objectives as per the resolution made by the Shareholders Ordinary General Assembly.
- The Ordinary General Assembly may resolve to form other reserves to meet the interests of the company, or to ensure the distribution of fixed dividends for shareholders, as possible. The mentioned assembly may likewise deduct amounts from the net profits to establish social institutions for the company’s employees or to assist the performance of such institutions.
- The balance thereafter shall be distributed among the shareholders in a proportion representing (5%) of the paid up capital.
- Subject to the provisions laid down in Article 76 of the Companies’ Law and Article 24 of the Company Bylaws, a proportion of (10%) of the balance shall thereafter be allocated to remunerate the Board of Directors, provided that the remunerations and financial benefits for each Board member shall not exceed SAR 500,000.
- b) Distribution of interim dividends:
A Company may distribute interim dividends to its shareholders on a biannual or quarterly basis after fulfilling the following legal requirements:
1) The issuance of annual resolution by the General Assembly authorizing the Board to distribute interim dividends.
2) The company shall enjoy regular positive profitability.
3) The company shall enjoy reasonable liquidity, and able to reasonably foresee the scale of its profits.
4) The Company shall have distributable profits based on the latest audited financial statements. These profits shall be sufficient to cover the proposed dividend distribution, after deducting the amounts distributed and capitalized of the dividends, after the date of these financial statements.
In addition to any official requirements that may be requested by any of the concerned bodies in KSA.
The entitlement of receiving dividends is for shareholders who owned shares in the due date specified in the Board resolution to distribute biannual or quarterly basis interim dividends, which will be announced on TADAWUL. Alternatively, it is for those who owned the shares at the end of trading day of AGM meeting, and AGM approval to distribute annual dividends. The resolution shall highlight the entitlement and distribution dates, provided that this resolution shall be implemented in accordance with the stated rules and procedures issued for the implementation of the Bylaws of the listed joint stock companies.
- The Board shall revise the content of this policy, as may be necessary.
- This policy will be effective and enforceable after the approval of the Board on 27/02/2018
- Texts or rules, whatsoever, not stated in this policy, will be subject to the application of the Saudi Corporates’ Law, its regulations, Capital Market Authority law and its executive regulations, the Company Bylaws and resolutions issued by the concerned bodies.