SearchDeclaration Based on Corporate Governance Regulation
Board of Directors Declarations
The Board of Directors acknowledges the following:
– The accounting records were properly prepared.
– The internal control system was founded and implemented effectively.
– There are no doubts on the company’s ability to continue business.
– There are no penalties, disciplinary actions, precautionary measures, or restrictions imposed on the company by the competent body or by any other supervisory, organizing or legal body.
– SABIC company already appointed an internal auditor and there is not any recommendation from the Audit Committee.
– There is no conflict between the recommendations of the Audit Committee and the resolutions of the Board of Directors, which included the appointment of the Auditor of the Company and the determination of his fees for the fiscal year 2019.
– Financial Statements 2019 are prepared according to the standards approved by the Saudi Organization for Certified Public Accountants.
– The company did not issue or grant any convertible debt instruments, contractual securities, preemptive rights or similar rights during the fiscal year 2019.
– The company did not issue or grant any conversion or subscription rights under any convertible debt instruments, contractually based securities, warrants or similar rights.
Company Declarations
The company acknowledges the following:
The company applies all the provisions contained in the Rules of Corporate Governance issued by the Capital Market Authority (CMA), except the provisions below:
– The company did not redeem, purchase or cancel any redeemable debt instruments.
– The company has not concluded any works or contracts of substantial interest to a member of the Board of Directors, or the Senior Executives, or any person related to any of them.
– There are no arrangements or waiver agreements of any salary or compensation by one of the Board members or Senior Executives.
– There are no arrangements or agreements under which a shareholder of the company has waived any rights to dividends.
– Auditors’ report shows that the consolidated financial statements are free of material misstatements, and any reservations toward it.
–– The Board of Directors has not issued a recommendation to change the auditor before the expiry of the term for which he was appointed.
| Article /Clause no. |
|
Provision of Article/Clause | Reason |
|---|---|---|---|
| Article 54: Audit Committee Formation, Clause B | The chairman of the audit committee shall be an Independent member | The Board of Directors is of the opinion that the formation of the Audit Committee consists of four members, including one independent member of the Board of Directors, and two members from outside the Board, which can achieve independence that enhances the efficiency of the Committee’s work. It should be noted that the Committee chose a member from outside the Board as its Chairman based on its approved regulations. | |
| Article 95: Formation of a Corporate Governance Committee | If the Board forms a corporate governance committee, it shall assign to it the competences stipulated in Article (94) of these Regulations. Such committee shall oversee any matters relating to the implementation of governance and shall provide the Board with its reports and recommendations at least annually. | Based on Article 50 of the Corporate Governance Regulations, which stipulates that the Board of Directors shall form specialized committees in accordance with the needs of the company and its conditions to enable it to perform effectively, the Board of Directors does not consider it necessary to form a specialized committee on corporate governance. All the other Board committees formed, in carrying out their duties and achieving their objectives, do inherently realize the corporate governance function and objectives. Therefore, reducing the duty of “governance” to a single Committee on Governance, contravenes the proper governance application and realization. |