The policy of protecting shareholder’s rights
Al Safat Investment Company
The policy of protecting shareholder’s rights
Al Safat Investment Company
Table of contents
This document is the property of the company where it is impermissible to reuse any part of it in any form, whether it is printing, photocopying or any other means, in whole or in part, or disclosing it to anyone outside the company without obtaining written consent from the Board of Directors.
The words and terms mentioned in this document mean the definitions shown below, unless the context otherwise requires:
Policy: The policy of protecting shareholders’ rights
Company: Al Safat Investment Co. KSCC
BoD: The company’s Board of Directors
Authority: Capital Market Authority
Governance: It is the set of regulations, standards, and procedures that achieve the institutional discipline in the management of the company. This is in accordance with the standards and methods stipulated by the Kuwait Capital Markets Authority (CMA) through defining the responsibilities and duties of the members of the Board of Directors and the executive management of the company and considering the protection of the shareholders and stakeholders’ rights.
Major shareholders: Any shareholder owns 5% or more of the shares of the listed company in accordance with the provisions of Book Ten (Disclosure and Transparency): regulation No. 72 of the year 2015.
Al Safat Investment Company is fully aware that protecting shareholders’ rights is one of the pillars of sound governance. Achieving success for the company is the result of compatibility between the objectives of shareholders and the objectives of the company management. The company’s policy, business model, practices and transactions emphasize that shareholders’ rights shall be respected and recognized as determined by the laws and legislations issued in this regard. Shareholders shall be entitled to take corrective actions for any violations of these rights.
Second: objectives of respecting shareholder’s rights policy
The policy of respecting shareholders’ rights aims at:
1- Ensuring that the shareholders’ objectives match the objectives of the company’s management.
2- Boosting investors’ confidence in the efficiency of the system that protects their rights.
3- Ensuring that shareholders exercise their basic rights in a fair and equal manner to ensure that shareholders are treated equitably.
4- Protecting shareholders’ rights and clarifying the compensation mechanism in case of violating these rights.
5- Protecting shareholders’ capital from misuse that may take place by company managers, Board of Directors, or major shareholders.
Third: The main rights of shareholders
Al Safat Investment Company guarantees the acknowledgment of the shareholders’ rights included in the articles of association of the company, the companies law, the decisions of the Capital Markets Authority and the laws of the regulatory authorities and their executive bylaws. These rights are represented in the following:
Shareholders’ rights related to the General Assembly:
1- The company sends the general assembly invitation to all shareholders regardless of their different levels.
2- The company invites for holding the general assembly upon the request of the shareholders who own not less than 10% of the company’s capital, or upon the request of the auditor. This should take place within 15 days after the date of the request.
3- The company adds the general assembly meeting invitation to the agenda, along with the time and place for the meeting, through the means of announcing specified in the companies` law and its executive regulations, considering the regulations of BoD nomination mechanism.
4- The company should ensure that the shareholder has the right to grant a special power of attorney or a written authorization prepared by the company for this purpose for attending the general assembly meeting.
5- The company should include the agenda in an explanatory note for each of its amended items, if any, explaining the reasons behind the amendment while publishing that note on the company’s website and mentioning it in the general assembly meeting ad in newspapers.
6- The company should enable the shareholders who own 5% of the company’s capital to add items to the agenda of the general assembly meetings.
7- The company notifies the shareholders of the following topics by including them in the agenda of the general assembly:
– Corporate Governance and Audit Committee reports.
– The report of the Board of Directors on the company’s activity, financial position and results of its business.
– Discussing and approving the external auditor’s report and the Sharia auditor’s report on the results of the company’s fiscal year and approving the distributable net profit.
– Dealing with stakeholders
– Any penalties applied to the company due to violations noticed by supervisory authority/authorities and any observations related thereto.
– Dealing with related parties
8- At least seven days before the ordinary general assembly meeting, the company should ensure that the shareholders have obtained the company’s financial statements for the elapsed accounting period, Board of Directors’ report, and auditor’s report.
9- The company shall ensure effective participation of all shareholders during the meetings of the general assembly, including directing inquiries to members of the Board of Directors and to the external auditor and obtain answers to inquiries to the extent that does not jeopardize the interests of the company.
10- The company shall include the reports of the Board of Directors of the general assembly with all the information mentioned in the record of disclosures of the members of the Board of Directors and the executive management.
11- The company shall provide the shareholders with sufficient and sound information about the agenda on the general assembly to help them take their decisions properly.
12- The company shall give all segments of shareholders an opportunity to hold the Board of Directors accountable for the duties assigned to them.
13- The company shall not charge any fees on any segment of shareholders for attending the general assembly meetings nor have preferential treatment for any segment of shareholders against other.
14- The company shall enable all shareholders to view the minutes of the general assembly meeting or obtain copies of it.
Shareholders’ rights of voting:
1- The company shall ensure that all shareholders exercise the voting rights granted to them without any obstacles.
2- The company shall enable shareholders to vote in person or by proxy of the same rights and duties.
3- The company shall notify the shareholders of all the rules of the voting procedures.
4- The company shall provide all information about voting rights continuously and permanently to all segments of current or potential shareholders.
5- The company shall offer to all segments of shareholders, who own the same type of shares, the right to vote on any changes related to shareholders’ rights by calling for general assembly meeting.
6- The company shall allow shareholders to vote on decisions to amend the company’s articles of association and decisions related to unusual transactions that could affect the future activities of the company, such as the merger decision.
7- The company shall allow shareholders to participate in voting for the election of the members of the board of directors.
8- Before the voting takes place, the company shall provide sufficient information about the candidates for membership in the Board of Directors, their technical and professional skills and experience.
Shareholders’ rights in the shares and profits of the company:
1- The company shall provide the shareholders with the right to dispose of the shares, be it the registration of ownership or transfer of ownership.
2- The company shall clarify its policy for distributing dividends, which would achieve the interests of shareholders and the company and approving this during the general assembly meeting.
3- The company shall enable the shareholders to get the profits according to the determined share and on the approved date of the dividends distribution.
4- The company shall record the value of the shareholder’s ownership in the company’s register and accounting books, as well as enabling the shareholders to view the company’s register of shareholders and its data and information, while adhering to protection and confidentiality policies in a manner that does not conflict with the law and decisions of the regulatory authorities.
Shareholders’ rights in the company’s assets:
1- Upon liquidation, the company shall ensure the equal distribution of the net assets of the company to the shareholders, each according to the number of his/her shares held in the company.
2- The company shall ensure that the shareholder has equally the same rights and obligations in the assets of the company as equal to his/her portion in the company’s shares.
Other shareholders’ rights:
1- The right to participate in the company’s management by running for membership in the Board of Directors.
2- The right to monitor the performance of the company and to participate in evaluating the performance of the Board of Directors.
3- The right to hold members of the executive Board of Directors accountable and to file a liability claim against them if they fail to perform the duties assigned to them.
4- The right for all shareholders to receive equal treatment without any discrimination.
Fourth: The company’s liability towards shareholders’ data
The company shall, for the purpose of constant follow-up of everything related to the data of its shareholders, establish and maintain accurate and continuously updated shareholders’ register and to be kept with Kuwait Clearing Company. This shareholder’s register includes data of the names of the shareholders, the number of their shares, their nationalities, and their identification numbers.
In addition to the share register, the company shall create a record of the bonds and Sukuk, its properties, and the data of its shareholders, all in the event of the issuance. This record shall be constantly updated in accordance with the data received by the company or Kuwait Clearing Company.
The company ensures maintaining the utmost confidentiality and protection of all the data of its shareholders while making shareholders’ register available to review in accordance with the law, executive bylaws and regulations of the regulatory authorities.
Fifth: General conditions
1- The policy of protecting shareholders’ rights is handed over to all members of the Board of Directors. This policy is also accessible to shareholders on the company’s website.
2- Any violation of these policies exposes the violator to the penalties imposed by the company and exposes him/her to any compensation the company deems fit as a result of its exposure to any loss or damage by this violation.
3- The provisions of Decree-Law No. (1) of 2016 regarding the issuance of the Companies Law and its executive bylaws and the rules of the Capital Markets Authority in relation to corporate governance are applied in accordance with Resolution No. (72) for the year 2015, and the decisions issued in this regard unless otherwise mentioned in this policy.
4- The company is entitled to make amendments to the provisions of this policy whenever the need arises. These amendments shall be effective only after being approved by the Board of Directors, providing that they do not conflict with the provisions of the companies’ law and the regulations of the Kuwait Capital Markets Authority.
5- The Audit Committee, along with the Risk Management Committee are the two supervising bodies to implement this policy. The Board of Directors and executive management are responsible for implementing the policy provisions.
6- The Board of Directors has the power to impose penalties on violators of the policy of respecting the rights of shareholders and to file criminal and legal lawsuits to claim compensation of the damages that may result from incompliance with the terms of this policy.
7- The policy is approved by the Board of Directors and is effective from the date of approval. It should be posted on the company’s website. The Board of Directors occasionally reviews this policy as necessary and based on a recommendation from the Audit Committee or from the Risk Management Committee. The policy can’t be amended without the approval of the Board.