I. Definition of Shareholders:
The current shareholders of Al-Tijaria are registered in the records of the Kuwait Clearing Company (KCC) and each share entitles its owner to an equal share to the share of others without discrimination in the ownership of the company's assets and in profits. The Company's shares are nominal, and the last holder alone has the right to receive the amounts due for the share, whether it is a share of profits or a share in the assets of the company.
1. Shareholders' Records:
- The register of shareholders is kept in the KCC, updated with each change, and can be accessed through direct contact and demand from the KCC in accordance with the contract between Al-Tijaria and KCC. At the same time, Al-Tijaria holds an updated record of its shareholders, the number and type of their shares, the value paid for each share, the percentages of their ownership, their identification numbers and their contact information through the Investor and Shareholders Affairs Section.
- If the Company issues bonds or warrants, it shall establish a special register to be deposited with the KCC; listing the names, nationality and domicile of bonds or warrants holders, the number and type of bonds or warrants owned by each of them and the value paid for each bond or warrant. Any data updates is recorded upon receipt of by the company or the KCC, and anyone interested in requesting data from this register shall contact the company or the KCC.
- Shareholders shall have the right to access information and data from the register of shareholders, provided that the data in the register is to be treated according to the highest degree of confidentiality.
Shareholders' Legal Guardians:
Each minor shareholder (less than twenty-one years of age) shall have a legal guardian who shall attend meetings of the General Assembly, vote on resolutions, and receive dividends and distributions on his behalf, and ensuring the preservation of their rights of representation. The guardianship action is ceased and the ward shall enjoy the full capacity of a shareholder to exercise his full rights upon a court ruling assuming superintendence of the minor.
Transparency in Al-Tijaria is a de facto, effective and definite in order to protect shareholders' rights. The principle of transparency is applied in a serious and continuous manner. In order to implement this principle, the management works to communicate with the shareholders by various means available and on a continuous basis as follows:
- Follow up on the delivery of ordinary and extraordinary General Assembly invitations and documents, ensure that cash dividends are delivered by the casual means, invite shareholders and encourage them to exercise their rights through communication and follow-up or by any other means available.
- Open Door Policy to receive any suggestions, comments, and complaints aimed at urging shareholders and stakeholders to contribute to the management of the company, as announced continuously in the letters of the Chairman during the general assembly meetings.
- Send periodicals and invitations to participate and / or review the activities and events held by the company.
- Provide data, announcements and information on the company's official website.
Meetings of the General Assemblies:
The General Assembly shall convene and appoint the BOD, which shall be entrusted with the duties of acting on behalf of shareholders to protect their interests and achieve the objectives and aspirations of the Company. The Chairman of the Board of Directors, the Deputy Chairman, or whoever is delegated by the Board of Directors for this purpose, or who is elected by the General Assembly from shareholders or others, shall preside over the Ordinary General Meeting and the Extraordinary General Meeting. The Board of Directors is therefore committed to:
- Urging shareholders to attend the General Assembly meeting at the time and place specified by the Memorandum of Association, the Articles of Association, or the Board of Directors of the Company so that the date and place of the meeting shall be arranged in such a way as to facilitate and encourage them to attend.
- Any subject on the agenda of the Ordinary or Extraordinary General Assembly shall be accompanied by adequate explanation and review of all its aspects, enabling shareholders to make their informative decisions in a sound and thoughtful manner, and not merely to complete the formalities of the meeting.
- The General Assembly is managed in a manner that allows shareholders to express their views openly and freely.
Meetings of the Ordinary General Assembly:
- Meetings of the General Assembly shall be held at least once a year at the invitation of the Council for one or more of the following reasons:
- At the request of the BOD, to discuss the financial reports and the report of the BOD or whenever necessary.
- At the reasoned request of a number of shareholders holding at least 10% of the company's capital.
- Within fifteen days of the auditor’s request. The agenda shall be prepared by the body calling for the meeting.
- The Ministry of Commerce and Industry may invite the General Assembly to convene in one of the following cases:
- If the General Assembly meeting is not invited by the Board of Directors for any reason.
- If the Ministry finds violations of the law or the contract of the company or any other reason it sees binding.
- At the request of any other regulatory body.
- The Ministry may preside over the Council by taking the necessary procedures for holding the meeting unless the Assembly elects one of the shareholders for this purpose.
Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)
The general and extraordinary general assembly settings include several procedures, but not limited to the following:
- Drafting the agenda of the General Assembly.
- Adoption of the agenda of the Ordinary and Extraordinary General Assembly by the BOD.
- Briefing the CMA on the agenda items.
- In the event of the item "Increase or decrease of capital", the approval of the CMA shall be obtained before approval of the Extraordinary General Assembly agenda.
- Obtaining the approval of the Ministry of Commerce and Industry on the agenda, and assigning the date and venue of the General Assembly meeting.
- Disclosure to the CMA and the KSE of the date and place of the General Assembly.
- Addressing the KCC on the date and place of the General Assembly enclosing the meeting’s agenda.
- Declaration in 2 daily newspapers on the agenda, date and place of the General Assembly.
- Ratification of the minutes of the General Assembly by the Ministry of Commerce and Industry.
- Disclosure to the CMA and the KSE of the Ordinary and Extraordinary General Assembly Resolutions.
- Publication of the minutes of the Ordinary and Extraordinary General Assembly meetings in Kuwait Al-Youm newspaper.
- Obtaining a commercial registration approval on the General Assembly resolutions.
- Obtaining a certificate for those interested in forming the BOD and authorized signatories in the event of BOD election article presence.
Agenda of the Ordinary General Assembly Meetings:
The agenda of the Ordinary General Assembly shall include the following items:
- Reading the Governance Report and Audit Committee Report
- Report of the Board of Directors on the activities of the Company and its financial position for the ended financial year.
- Report of the auditor on the financial statements of the company.
- Report of the Shari'a Supervisory Board.
- Recalling the Annual Report of the remuneration granted to the members of the BOD and the Executive Management.
- Report of any irregularities monitored by the regulatory authorities and the penalties impose on the company.
- Discussing and approving the results of the Company's financial statements and approval of net distributable profit.
- Board of Directors' suggestions on dividend distribution.
- Discharge of members of the Board for their financial, administrative and legal actions during the year related to the financial report.
- Transaction report made or to be made with relevant parties (the relevant parties are defined in accordance with IAS).
- Appointing the auditor of the company's accounts and determining his fees or delegating the BOD to do so.
- Appointing the Shari'a Supervisory Board and determining its fees or delegating the BOD to do so.
- Election of the members of the Council or their dismissal and the determination of their remuneration.
- In the event of an amendment to the agenda, an explanatory memorandum shall be prepared detailing each agenda item of the amended General Assembly meeting (to be attached to the agenda), stating the reasons for the amendment. The memorandum shall be published on the Company's website. Adding a note to the newspaper Invitation to the meeting, indicating that the said memorandum is available on the company's website.
Items may also be added to the agenda of the General Assembly at the request of shareholders holding 5% of the Company's shares.
Meetings of Extraordinary General Assemblies:
- EGM meetings shall be held in an extraordinary capacity, upon the invitation of the BOD or in writing by shareholders holding at least 15% of the shares of the Company or at the request of the Ministry of Commerce and Industry.
- The BOD shall call the Association within thirty days from the date of the request. If the BOD does not invite the Association within the stipulated period, the Ministry shall convene the meeting within fifteen days from the end of the period indicated.
Agenda of the Extraordinary General Meetings:
- The agenda of the EGM may include all or some of the following items:
- Increase or decrease the company's capital.
- Any amendment to the Memorandum of Association and the Statute.
- Dissolution, merger, transformation or division.
- Selling the entire project for which the company was created or otherwise disposed of.
- Any decision issued by the EGM shall be effective only after the approval of the regulatory authorities and the adoption of the publicity procedures. The approval of the Ministry shall be obtained if the decision relates to the name of the company, its purposes, or its capital except for the increase of capital through shares for profits realized by the company, or as a result of addition of its reserves which may be used to the capital.
- The agenda of the ordinary and extraordinary general assembly meeting, and all documents related to the subjects mentioned in the agenda of the meeting, shall be provided to the shareholders at least seven days prior to the date of the meeting so that the shareholders will be able to view and make decisions on the matters to be voted upon. Any reservations to Agenda items shall be noted in the minutes of the meeting.
Place, time and date of meetings of the General Assemblies:
The meeting of the General Assembly shall be held within three months of the end of the fiscal year. The date, time and place of the meetings of the General Assembly shall be determined on the recommendation of the BOD.
Announcement and Invitation to AGM and EGM:
- The dates, times and venue of the Ordinary and Extraordinary General Meetings shall be announced at least two weeks before the date of such meetings and after obtaining the approval of the competent regulatory authorities to enable the shareholders to attend, participate and exercise their rights. The Chairman of the BOD shall send an invitation to attend such meetings by publishing the invitation in two local Arabic newspapers two weeks prior to the date of the meeting. The announcement shall be made the second time after not less than seven days from the date of publication of the first declaration and at least seven days prior to the meeting or by any means of modern advertising specified by the executive regulations of the Companies Law. The declaration shall include the invitation to the meeting, the agenda, and the place where the documents and papers for the meetings can be obtained.
- The following procedures, including the prior notice, should also be adhered to in the event of emergency meetings of the Ordinary and Extraordinary General Assembly. KSE, CMA and the Ministry of Commerce and Industry shall be informed of the results and facts of the Ordinary and Extraordinary General Assembly Meeting after the completion of these associations by providing them with the approved minutes for such meetings.
Minutes of meetings of the General Assemblies:
The Company shall prepare the minutes of the meetings of the Ordinary and Extraordinary General Meetings, provided that the minutes include:
- The date, place and time of commencement and end of the meeting.
- Names and titles of attendance including the head of the meeting, representatives of the company, representative of the external auditor, representative of the Shari'a Supervisory Board and representative of the Ministry of Commerce and Industry.
- Quorum registration indicating the names of the attending shareholders confirming their presence and the proportion of their shares, and whether their presence is in person or by proxy.
- The agenda items of the meeting, the relevant discussions and resolutions, and any reservations thereto (if any), specifying the proportion or names of the conservatives and the reasons for the reservation.
- The minutes of the meeting shall be approved by the head of the meeting and stamped with the Company's seal.
Quorum in Extraordinary General Assemblies:
The Extraordinary General Meeting of the General Assembly shall not be valid unless attended by shareholders representing three quarters of the shares of the Company. If such quorum is not present, a second meeting shall be called and attended by more than half of the shares. Decisions are issued by a majority of more than half of the total shares of the company.
1. Voting Rules:
Each shareholder shall have a number of votes equal to the number of shares. Decisions shall be issued by an absolute majority of the represented shares. The Company shall ensure that all shareholders exercise the right to vote without putting any obstacles leading to the ban of voting by:
- All shareholders shall enjoy the same voting rights granted to them and the same treatment by the Company, regardless of their ownership interests.
- Shareholders shall have the right to vote in person or by proxy, with the same rights and duties as the shareholders in both cases.
- Inform shareholders of all rules governing voting procedures before the Assembly begins.
- Provide all voting information to all existing shareholders and prospective investors, while ensuring that such information is provided on an ongoing basis and to all categories of shareholders.
- To vote for the selection of the members of the Council in the General Assemblies through the mechanisms stipulated in the Articles of Association of the Company and within the framework stipulated in the Companies Law and its Executive Regulations.
- Provide an overview of the candidates for membership of the Board before the voting, giving a clear idea of the professional and technical skills of the candidate and their experience and qualifications.
- No fees are charged for the attendance of any class of shareholders for General Assembly Meetings and no preferential advantage is given to any category of shareholders against another.
2. Attendance and voting:
- Any registered shareholder of the company shall have the right to attend the meeting of the General Assembly by person or by proxy and shall be present at the meeting of the General Assembly on the basis of the certificates of ownership issued by the CMA. The holders of bonds and warrants shall also be entitled to attend the General Assembly in person or by proxy with no right of voting on its decisions.
- The shareholder may appoint another person to attend under a special power of attorney or a written authorization prepared by the company for this purpose stamped by the Company's seal in accordance with the procedures and according to the laws and regulations in Kuwait. The power of attorney may be for one or more of the General Assembly meetings and valid to attend the meeting postponed due to the lack of quorum.
- The agent shall use the proxy vote on behalf of the concerned shareholder in the General Assembly Meetings. The procuration shall be in writing, signed, dated and legally certified to be valid for purpose.
- The proxy voting mandate shall determine the person authorized to represent the shareholder in his or her absence. The BOD or election observers shall verify the authenticity of the voting procedures by person and proxy before the General Assembly. The observers shall be present throughout the election period for counting votes and announcing the final results.
V. Shareholders' Inquiries:
Each shareholder shall be entitled to participate in the meetings of the General Assembly, to express opinion on the said topics on the meeting’s agenda, to submit appropriate queries and suggestions thereon and to receive information, responses and answers to such inquiries from the Board during the deliberations and discussions of the meeting.
VI. Conflict of Interests:
The shareholder may not vote, for himself or his representative, in matters relating to a special benefit, to him or to any other, existing between him and the company.
VII. The Annual Report:
The annual report is considered to be the most important and comprehensive source of information on the Company and all shareholders and all interested parties who have an interest in accessing such information. The annual report shall include mainly the following:
- Report of the BOD.
- Report of the Shari'a Supervisory Board.
- Reports of external auditors.
- Financial statements prepared in accordance with International Financial Reporting Standards (IFRS) - Statement of Income - Statement of Cash Flows - Statement of Changes in Equity - Company's future plan and strategy - Operating results and associated financial indicators and ratios.
- The date used as a basis for giving shareholders registered in the Company's register of shareholders dividends.
- Authorized and paid-up capital structure and amendments to the capital structure (in case of issuing shares or bonds).
- Any significant sale of the Company's assets made through extraordinary financial transactions.
- Financial analysis reports prepared by independent expert houses and reports of rating agencies, if available.
- Management reviews and analysis of financial and non-financial information.
- Reports of potential risks to the Company.
- Names of members of the Board, Executive Management and Shari'a Supervisory Committee.
- The names of the external auditors and the supervisory authorities which authorize and regulate the Company's business both in Kuwait and abroad.
- The composition of the BOD and the determination of its members from executive members, non-executive members or independent members.
- A brief description of the competences of the main committees of the Council and the tasks assigned to them, including their names, members and the number of their meetings.
- The governance system adopted by the Board of Directors, the distribution and division of powers, and functions between the Executive Management and the Board of Directors, and reports prepared by the Governance Committee on governance requirements.
- Transactions and joint interests between the company and the parties concerned.
- A detailed report on the amounts, benefits and privileges obtained by members of the Board of whatever their nature and description.
VIII. Policy of Cash Dividend Distribution:
A percentage determined by the BOD shall be deducted from the non-net profits after consulting the auditor for the depreciation of Company assets or the compensation for the depreciation of its value. These funds shall be used to purchase, or to maintain, the necessary materials, machinery and equipment. Such funds may not be distributed to the shareholders. The profits shall be distributed as follows:
- 10% shall be deducted for the purpose of calculating the compulsory reserve. The General Assembly may suspend this deduction if the compulsory reserve exceeds half of the company's capital.
- 1% of the net profit allocated to Zakat.
- A deduction of 1% to Kuwait Foundation for the Advancement of Sciences.
- 2.5% of the total profit is deducted to meet the obligations of the Company under the National Labor Support Tax.
- A portion of the net profits by a percentage not exceeding 10% may be deducted to form an optional reserve account by a resolution of the General Assembly on the recommendation of the BOD and allocated for the purposes specified by the General Assembly.
- The amount required to distribute a first dividend of 5% to the shareholders shall be deducted at the recommendation of the BOD and approved by the General Assembly.
- The remuneration of the BOD after the previous deductions shall be allocated to an amount approved by the General Assembly not exceeding 10% of the net profits after deduction of consumption and reserves and the distribution of a profit of not less than 5% of the capital to the shareholders.
- The remaining profits shall then be distributed to the shareholders as additional share of profits or to be transferred for the coming year on the recommendation of the BOD and approval of the General Assembly.