Bylaws
of
Almasani
Al Kobra Mining Company
A
Closed Joint Stock Saudi Company
(Issued
pursuant to Ministerial Resolution No. 583 dated 01/05/1385 H. and amendments
thereto, and in conformity with Article 51 of the Companies Law)
Part
“1”
Incorporation
of the Company
Article “1”: A Saudi
Joint-Stock Company shall be incorporated in accordance with the provisions of
these Bylaws and the provisions of the Companies Law, as follows:
Article “2”: The Company’s
Name shall be Almasani Al Kobra
Mining Company, a closed joint stock company.
Article “3”: Production of
silver alloys, gold alloys, copper concentrates, and zinc concentrates pursuant
to SAGIA Licence No. 993/2 dated 16/7/1428 H.
Article
“4”:
The
Company may have an interest in or participate in any manner whatsoever with
corporations or companies engaged in activities which are similar to its
activities or which may help the Company achieve its objects. Further, the
Company may own shares in and merge with or purchase such
companies.
Further
still, the Company may have an interest in or participate in any manner
whatsoever with other companies provided that such interest or participation
shall not exceed 20 % of its free reserves nor 10 % of the capital of companies
in which the Company is participating; and provided further that the total of
such participation shall not exceed the value of such reserves and that the same
be brought before the 1st
Ordinary General Meeting.
Article “5”: The Company’s
Head office shall be located in the city of Jeddah. However, the Board of
Directors may establish branches, offices or agencies for the Company within or
without the Kingdom of Saudi Arabia.
Article “6”: The term of the
Company shall be Ninety Nine (99) Gregorian years commencing from the date of
the Minister of Commerce’s resolution announcing the formation of the Company,
which term may be extended under a resolution adopted by the Extraordinary
General Meeting of Shareholders, at least one year prior to the expiration of
the Company’s Term.
Part
“2”
Capital
and Shares
Article “7”: The declared
Capital of the Company shall be Four Hundred Fifty Million Saudi Riyals
(SR450,000,000.00) divided into 45,000,000.00 shares of equal value of SR 10
each.
Article “8”: The founder
shareholders have subscribed for the entire 45,000,000 shares of the Company and
paid up the amount of Two Hundred Twenty Five Million Saudi Riyals
(SR225,000,000.00) representing 50% of the value of the entire shares, deposited
with Albank Alsaudi Alfransi in the name of the Company under incorporation. The
founder shareholders agree to pay the remaining balance of the Capital amounting
to Two Hundred Twenty Five Million Saudi Riyals (SR225,000,000.00) representing
50% of the value of the entire shares pursuant to the resolution of the Board of
Directors.
Article “9”: Subject to the
approval of the competent authorities, the Company may issue non-voting
preferred shares not exceeding 50% of the Company’s capital. In addition to
their right to share the net dividends distributed on ordinary shares, the
holders of preferred shares shall be entitled to the following:
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a-
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The
right to receive a certain percentage of the net profits, not less than 5%
of the share par value after deduction of the statutory reserve and before
any distribution of the profits of the
Company.
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b-
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The
right of priority to recover the value of their shares in capital upon
liquidation of the Company and to receive a certain percentage of the
liquidation proceeds.
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The
Company may purchase said shares in accordance with such principles and in such
manner as set forth in the Issue Decision. It is however provided that the Issue
Decision shall not include any provision putting the shareholder under the
obligation to sell his shares and that the said shares shall not
count in the quorum required for the Company’s General Meeting provided for in
Articles “37 & 38” of these Bylaws.
Article “10”: Shares shall be
of a nominal value. A share may not be issued in an amount less than the nominal
value thereof; however, a share may be issued in an amount exceeding the nominal
value thereof. In the latter case the difference is added to the statutory
reserve even if such reserve has reached the ceiling. A share is indivisible
vis-à-vis the Company. If a share is held by a number of persons, they shall
elect one from amongst themselves to represent them in exercising the rights
attached to such share, provided that such persons shall be jointly responsible
for all the obligations arising from the acquisition of such share.
Article “11’: Shares shall be
negotiable once the certificates appertaining thereto are issued. However,
shares given against contributions in kind or cash shares subscribed to by the
incorporators shall not be negotiable before the publication of the balance
sheet and the profit and loss statement for two consecutive years each
consisting of at least twelve months as from the date of incorporation of the
Company. The provisions of this Article shall also apply to such shares as
subscribed to by the incorporators in case the capital of the Company is
increased before the expiry of the period of suspension as to the remaining
period.
An
annotation shall be made on these instruments indicating their type, date of
Company’s incorporation and the period during which they shall remain
non-negotiable. However, during the period of suspension, title to shares in
cash may, in accordance with the legal provisions for the sale of rights, may be
transferred from one incorporator to another, or to a director for the purpose
of submitting same as security to the management, or from the heirs of a
deceased incorporator to a third party.
Article 12: Nominal shares
shall be transferred by entering them into a Shareholders Register including the
Shareholders’ names, nationalities, professions, domiciles, and addresses, the
shares numbers, and the value paid up on such shares. An annotation to that
effect shall be made on the share instrument. The transfer of title to the share
shall be effective vis-à-vis the Company or third parties from the date of its
entry into said Register or from the date of the consummation of transfer
procedures by means of the Electronic Shares System. Subscription or title to
shares shall be interpreted as an acceptance by the Shareholder of the Bylaws of
the Company and as a commitment by the Shareholder toward the resolutions issued
by the Shareholders Meetings pursuant to the provisions of these Bylaws, whether
such resolutions were adopted in the presence of the Shareholder or in his
absence, and regardless whether such resolutions are acceptable or unacceptable
to the Shareholder.
Article 13: The Company shall
issue share certificates serially numbered, signed by the chairman of the
Company’s board of directors, and sealed with the Company’s stamp. In
particular, each certificates shall include the number and date of the
Ministerial Decision approving the incorporation of the Company, its share
capital, the number of shares into which the capital is divided, the share
nominal value, the value paid thereof, a summary of the Company’s objects, the
Company’s Head Office, and the Company’s Term. The share certificates may have
coupons with serial numbers reflecting the number of the shares attached
thereto.
Article “14”: If a shareholder
fails to pay the share value on the due date thereof, the Board of Directors
may, after giving him notice by registered letter, sell such share at a public
auction. Nevertheless, a defaulting shareholder may, up to the date fixed for
the auction, pay the amount due from him plus the expenses incurred by the
Company. The Company shall recover from the proceeds of the sale such amounts as
are due to it and shall refund the balance to the shareholder. If the proceeds
of the sale fall short of the amounts due, the Company shall have a claim on the
entire fortune of the shareholder for the unpaid balance. The Company shall
cancel the share so sold, issue the purchaser a new share bearing the serial
number of the cancelled share and make an annotation to this effect in the share
register.
Article 15: The Extraordinary
Meeting may upon satisfying itself of the feasibility study and subject to the
approval of the competent authorities resolve to increase the Company’s Capital
on one or more occasions by issuing new shares at the same nominal value,
provided however that the entire initial capital shall have been paid up and
that the provisions of the Saudi Companies Law be observed. There shall be
indicated in the increase resolution the manner in which the capital shall be
increased. The shareholders shall have the priority right of subscription to the
new cash shares and they shall announce such priority right in a daily
newspaper, including the increase resolution and the subscription terms, as well
as their desire to exercise their priority right within fifteen days from the
date of publication of said announcement. Such shares shall be distributed
amongst the initial shareholders who subscribed to such shares in proportion to
the initial shares they hold, provided however that the number of shares they
will acquire be not more than the new shares they subscribed to. The remaining
balance of the new shares shall be offered for public subscription.
Article “16”: Pursuant to a
resolution by the Extraordinary General Meeting, adopted on the basis of
acceptable justifications and subject to the approval of the Minister of
Commerce, the Company’s capital may be reduced if such capital is in excess of
the Company’s needs, or if the Company incurs losses. The resolution for
reduction shall be adopted only after a reading of the auditor’s report
indicating the reasons necessitating such reduction, the liabilities of the
Company, and the effect of the reduction on such liabilities, and it shall be in
accordance with the Companies Law. The resolution shall also indicate the way
the reduction is effectuated. If the reduction of capital is due to the capital
being in excess over the Company’s needs, the creditors must be invited to raise
their objections thereto within sixty days from the date of publication of the
resolution for reduction in a daily newspaper circulated in the locality of the
head office of the Company. If any creditor objects (to the reduction) and
submits to the Company, within the said period, the documents substantiating his
claim, the Company must pay his debt if it is due and payable or submit adequate
security for payment if it is payable at a future date.
Part
“3”
Board
of Directors
Article “17”: The Company’s
management shall be undertaken by a Board of Directors to be comprised of eight
(8) members appointed by the Ordinary General Meeting for a term not exceeding
three (3) years.
As an
exception, the term of the 1st
Board of Directors shall be five (5) years commencing from the date of the
Ministerial Decision announcing the incorporation of the Company and the
appointment of the Company’s Constituent Assembly.
Article “18”: A director must
be a holder of a number of the Company’s shares of a nominal value not less than
Ten Thousand Riyals. Such shares shall, within thirty days from the date of
appointment of the director, be deposited in a bank designated by the Minister
of Commerce. These shares shall be set aside to cover the directors’ liability,
and shall remain non-negotiable until the lapse of the period specified for
hearing the action in liability provided for in Article “76” of the Companies
Law, or pending the award of a decision on such action. If a director fails to
submit such security shares within the period specified, his membership shall be
forfeited.
Article “19”: Board Membership
shall terminate upon the expiry of the term thereof or upon the director’s
resignation, death, or failure to attend four (4) consecutive meetings without a
justifiable excuse, or on account of disqualification in accordance with the
provisions of any law applicable in Saudi Arabia. If the office of a director
becomes vacant, the board may appoint a temporary director to fill such vacancy,
provided that such appointment be brought before the first Ordinary General
Meeting. The new director shall complete the unexpired term of his predecessor.
If the number of directors falls below the minimum quorum required for its valid
meetings, the Ordinary General Meeting must be convened as soon as possible to
appoint the required number of directors.
Article “20”: Subject to the
authority of the shareholders at a General Meeting, the Board of Directors shall
have the broadest powers to manage the Company and supervise its affairs within
and without the Kingdom. The Board shall, without limitation, have the authority
to:
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1-
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Dispose
of the Company’s assets, properties, estates, effect and approve purchase,
pay the price, to mortgage, to de-mortgage, sell, vacate and receive the
price. The Board minutes of meeting shall include the following within the
recitals, provide that:
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a-
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To
specify the reasons and justifications for such
acts.
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b-
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To
state that the sale price, in the event of sale, shall be close to a price
specified according to the established accounting
practices.
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c-
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The
sale price shall be immediately paid, except where necessary and with
sufficient guarantee.
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d-
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Such
acts will not bring about the obstruction of any of
the Company’s activities, impair its competence or create any
additional obligations.
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2-
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The
Board of Directors shall have the right to obtain loans
for terms not exceeding the Company’s term, subject to the
following conditions:
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a-
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The
value of loans the Board may execute during any one fiscal year shall not
exceed 50 % of the Company’s
capital;
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b-
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The
Board shall specify in its resolution the manner in which the
proceeds of the loan will be used and the manner of payment thereof;
and
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c-
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The
conditions of the loan and the securities provided in relation thereto
shall be without prejudice to the Company, the shareholders and the
general guarantees of creditors.
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3-
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The
Board of Directors may represent the Company in it relations with third
parties and before the courts, Board of Grievances, Labor Office, Labor
Committees, Securities Committees, Judicial Committees, Arbitration
Authorities, Civil Rights Departments, Police Offices, governmental
authorities, Chamber of Commerce and Industry, various companies and
corporations; participate in bids, receive and make
payments, acknowledge, claim, defend, plead, dispute,
reconcile, accept and reject judgments, arbitrate on behalf of Company,
request execution of judgments, oppose same and receive the proceeds
thereof;
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4-
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The
Board of Directors may sign all contracts, documents and instruments,
including without limitation: articles of association of companies in
which the Company is shareholder, with all amendments and annexes,
amendment resolutions; sign agreements and instruments before the notary
public and governmental authorities, make guarantees to companies for
their loans and those of their subsidiaries, issue powers of attorney on
behalf of the Company, appoint employees and representatives and fix their
remuneration and terminate the services of same, receive and deliver, rent
and lease, open accounts, credits, withdraw, deposit in banks, issue bank
guarantees, sign all checks, documents and bank
transactions.
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5. The
Board of Directors may discharge the debtors of the Company of their liabilities
with a view toward achieving the interests of the Company in conformity with the
accounting principles in case of debts written off, provided however that the
Board resolution shall include in the introduction of its resolution and that
that the following conditions are satisfied:
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a.
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That
such discharge shall take place at least one year after the date on which
the debt has originated,
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b.
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That
such discharge shall be limited to a certain maximum amount for each year
and for each individual debtor; and
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c.
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That
such discharge shall be the right of the Board and may not be delegated to
others.
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6. The
Board of Directors may draw up the Board’s internal rules, and approve the
schedule of financial and administrative powers in the Company;
7. The
Board of Directors may approve the Company’s internal, financial,
administrative, and technical rules and the workmen regulations;
8. The
Board of Directors may authorize the officers in charge of the Company’s
management to sign on behalf of the Company, subject to the limitations set by
the Board.
9. The
Board of Directors may form committees and delegate such powers thereto as the
Board may deem necessary with a view toward speeding up the matters brought up
before them;
10. The
Board of Directors may coordinate among the various Board
committees;
11. The
Board of Directors may prepare the Company’s financial statements and make the
annual report on the Company’s businesses;
12. The
Board of Directors may approve the Company’s work plan and the estimative annual
balance sheets thereof.
The Board
chairman and the managing director shall, jointly or individually, have the
right to represent the Board in exercising the powers vested in them by the
Board, and each of them may, to the extent of his powers, appoint a
substitute/ substitutes from amongst the Board members or from amongst other
persons to perform certain act or acts which are within their
powers.
Article
“21”:
21.1 The
Ordinary General Meeting shall fix the share of the Board Members in
the annual profits which share shall not exceed Two Hundred Thousand (SR200,000)
provided that it will not exceed 10 % of the net profits in
accordance with the Article 48 of these Bylaws.
22.2 The
Ordinary General Meeting shall fix the allowance to be paid to the Board Members
for attending Board Meetings. Such allowance will be paid to the Board member
together with all expenses he has incurred due to attending the Board
Meeting.
22.3 The
Board of Directors’ report to the Ordinary General meeting shall include a
comprehensive statement of all the amounts received by directors during the
fiscal year including salaries, share in profits, attendance allowance,
expenses, and other benefits, as well as of all the amounts received by the
directors in their capacity as officers or executives of the Company, or in
consideration of technical, administrative or advisory services approved by the
Company’s general meeting.
Article “22”: The 7th
Party shall appoint the Chairman of the Board of Directors. The Board of
Directors shall appoint from amongst its members a chairman and a managing
director. A director may hold the offices of a chairman and a managing director.
The Board of Directors shall appoint a secretary from amongst its members or
others, and shall determine his duties and powers and fix his remuneration. The
terms of the chairman, managing director and secretary shall not extend beyond
their respective term as board members, but re-election and re-appointment is
permissible.
Article 23: The chairman of
the Board of Directors shall have all powers to represent the Company before
third parties, judicial bodies, notaries public, all government authorities,
disputes settlement committees of various types and grades, and all other
bodies. The chairman shall have the right to sign the articles of association of
companies in which the Company enters as partner and other contracts based on
the resolutions of the Board of Directors. The chairman shall also have the
right to authorize the managing director, the executive officer, or others to
defend and plead on behalf of the Company and to perform the tasks falling
within the competence of the chairman pursuant to this Article.
Article “24”: The Board of
Directors shall convene at the written invitation of the Chairman, which
invitation shall be sent by registered mail not less than 15 days prior to the
meeting date. The Board Chairman shall convene the Board at the request of at
least two directors. The Board shall meet no less than four times per year.
Board meetings shall take place in the principal office of the Company or
elsewhere as may be decided by the Board.
Article “25”: No Board meeting
may be valid unless attended by at least four members. A Board member may give a
proxy to another member to attend the Board meetings on his behalf, provided
that such proxy be given in accordance with the following:
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a-
A member of the Board of Directors may not act on behalf of more than one
Board Member at the same meeting;
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b- The
proxy shall be in writing; and
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c- The
Board member acting by proxy may not vote on resolutions on which his
principal is prohibited from voting under the law.
Resolutions
of the Board shall be passed under the majority vote of the directors present or
represented at the meeting, and in case of impasse, the Chairman or
the acting Chairman shall have a deciding vote.
Article “26”: Deliberations
and resolutions of the board shall be recorded in minutes to be signed by the
chairman and the secretary. Such minutes shall be entered in a special register
signed by the Chairman and the Secretary. The Board may not pass its resolutions
by circulating them to each member individually unless in cases of extreme
necessity, provided that all Board members approve such resolutions in writing
and that such resolutions be brought before the Board in the first succeeding
meeting for approval and recordation in the minutes of Board
meetings.
Article 27: The Board chairman
or any Board member or any other officer in charge of the management of the
Company shall not have any interest, whether direct or indirect, in any of the
Company’s contracts or projects and they shall not participate personally in any
business which may compete with the businesses of the Company.
Article 28: The Company may
not give cash loans of any kind whatsoever to the Board members or guarantee any
loan which either Board member may conclude with third parties.
Article 29: The
Board of Directors may appoint an executive officer from amongst persons other
than the members thereof to run the normal affairs of the Company under the
supervision of the Board. Based upon a proposal by the managing director or the
executive officer, the Board shall appoint one or more deputy to the managing
director or to the executive officer. The powers, responsibilities, and
remunerations of said deputy/deputies shall be determined by the
Board.
Article 30: Without prejudice
to the right of the Board to modify the powers and authorities of the executive
officer of the Company, the executive officer of the Company shall exercise the
following powers under the Board’s control and supervision:
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1.
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Prepare
for Board meetings;
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2.
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Enforce
Board resolutions;
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3.
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Prepare
the estimative annual balance sheets in accordance with the generally
acceptable accounting principles and Board
resolutions;
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4.
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Run
the affairs of the Company, supervise the performance of the officers in
charge of the Company’s management and the Company’s employees in
conformity with the regulations;
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5.
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Issue
and authorize others to issue orders pertaining to the Company’s expenses
as per the approved annual balance
sheets;
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6.
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Exercise
the powers vested in him by Board resolutions and under the Company’s
bylaws and regulations;
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7.
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Delegate
such powers to other officers in charge as he may deem appropriate subject
to the Company’s bylaws and
regulations;
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8.
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Sign
and authorize others to sign contracts, and purchase, sell, transfer, and
accept real estate on behalf of the Company pursuant to the resolutions
issued by the Board approving such
acts;
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9.
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Sell,
purchase, and receive the price of moveable and immovable assets and
conclude or revoke transactions based on resolutions issued by the
Board.
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10.
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Open,
operate, or close all types of accounts with any Saudi or foreign
financial institutions, subject to the approval of the Board; open
documentary accounts in favour of the Company’s financers; sign, transfer,
accept, deduct, guarantee, warrantee, and pay all transfers; draw cheques
on the accounts of the Company with banks pursuant to the schedule of
powers approved by the Board; and
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11.
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Have
such any other powers as the Board may
determine.
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Part
“4”
Shareholders’
Meetings
Article “31”: A valid general
meeting shall represent all shareholders and is held at the principal office of
the Company. Any shareholder, regardless of the number of his shares, shall have
the right to attend the constituent general meeting in person or on behalf of
other shareholders. Each shareholder holding 20 shares shall have the right to
attend the general meeting and may give proxy to another shareholder, other than
the members of the Board of Directors, to attend the general meeting on his
behalf.
Article “32”: The Constituent
General Meeting shall undertake the following matters:
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1-
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To
verify subscription to the capital and fulfillment of the relevant
provisions in accordance with the Companies Law at the minimum value as
allocated for the share value;
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2-
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To
draw up the final provisions of the Company’s
bylaws;
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3-
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To
appoint the members of the first Board of Directors for a term not
exceeding five years and the first auditor, if these have not been
appointed in the Articles of Association or in the Bylaws of the Company;
and
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4-
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To
deliberate on the incorporators’ report for the operations and expenses
required for the incorporation the
Company.
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The
meeting shall be valid only if attended by a number of subscribers representing
at least half of the Company’s capital. Each subscriber shall have a vote for
each share held or represented by him.
Article 33: Save for the
matters entrusted to the Extraordinary General Meeting, the Ordinary General
Meeting shall be concerned with all the rest of the Company’s affairs, and shall
be held once a year at least during the first six (6) months following the
expiration of the fiscal year. Further, other Ordinary General Meetings may be
held whenever necessary.
Article “34”: The Extraordinary General
Meeting shall be concerned with the amendment of the Company’s Bylaws, save the
provisions expressly excluded. In addition, it may pass resolutions in the
Company’s internal affairs falling within the competence of the Ordinary General
Meeting, under the same terms and conditions approved for the
latter.
Article “35”: The General
Meetings of Shareholder shall be convened at the invitation of the Board of
Directors. The Board of Directors shall invite the Ordinary General Meeting to
convene in case the same is requested by the auditor or by a number of
shareholders representing at least 5% of the Company’s capital. Invitations to
the General Meeting shall be published in the Official Gazette and in a daily
newspaper of general circulation in the city where the Company's head office is
located at least twenty five days prior to the date specified for such meeting.
The invitation shall include the agenda of the meeting and a copy of both the
notice and the agenda shall be forwarded to the Companies General Department at
the Ministry of Commerce & Industry within the time frame specified for
publication.
Article “36”: Once the meeting
is held, a list shall be prepared which shall include the names of the
shareholders present or represented therein, their respective residence
addresses, the number of shares held or represented by them, and the number of
votes to which they are entitled. Any interested party shall have the right to
inspect this list.
Article “37”: The Ordinary
General Meeting shall not be valid unless it is attended by shareholders
representing at least half of the Company’s capital. In case such quorum is not
present, a second meeting shall be convened within the thirty days following the
first meeting pursuant to an invitation. Invitations shall be announced in the
same manner stipulated in Article “35” above. The second meeting shall be valid,
regardless of the number of shares represented therein.
Article “38”: For the
Extraordinary General Meeting to be valid, it shall be attended by Shareholders
representing at least half of the Company’s capital. In case such quorum is not
present, a second meeting shall be convened within the thirty days following the
first meeting pursuant to an invitation. Invitations shall be announced in the
same manner stipulated in Article “35” above. The second meeting shall be valid
if attended by a number of the shareholders representing at least one-quarter of
the Company’s capital.
Article “39”: Each subscriber
shall have one vote for each share he represents in the Constituent General
Meeting. Votes in both the Ordinary and Extraordinary meetings shall be
calculated on basis of one vote for each share. Members of the Board of
Directors may not vote on resolutions of the meeting which relieve them from
their liabilities toward undertaking the management of the Company. However, no
shareholder may, in his name, or on behalf of others or in both capacities, have
votes exceeding 20 % of the total shares of the Company, in respect of
resolutions of the ordinary and extraordinary meetings regarding the appointment
and dismissal of directors and auditors and the amendments to the
Company’s Articles of Association.
Article “40”: Resolutions of
the Constituent General Meeting shall be decided by an absolute majority of the
shares represented therein. However, in case resolutions relate to the
evaluation of in-kind shares or special privileges, it is necessary to obtain
the consent of a 2/3rds
majority of the subscribers of cash shares, not taking into
consideration the contribution made by the subscribers to in-kind shares or
beneficiaries of special privileges, who shall be excluded from voting on said
resolutions, even if they are holders of cash shares.
Resolutions
of the Ordinary General Meeting shall be decided by an absolute majority of the
shares represented therein.
Resolutions
of the Extraordinary General Meeting shall be decided by two-thirds’ majority of
shares represented therein, unless the resolution relates to the increase or
reduction of the Company’s capital, extension of the Company’s term, the
premature winding up the Company, or a merger of the Company into anther entity,
where 3/4th’s
majority shall be required.
Article “41”: Each shareholder
shall have the right to discuss the matters listed on the agenda of a general
meeting, and to pose questions to the directors and the Company’s auditor, who
shall be obliged to provide answers to such questions to the extent that the
Company’s interests are not jeopardized. In case the enquiring shareholder finds
the answers unsatisfactory, he may resort to the General Meeting whose decision
in this respect shall be valid and enforceable.
Article “42”: The General
Meeting shall be chaired by the Board Chairman or his deputy in case of his
absence. The Chairman or his deputy shall appoint a secretary and
vote sorter; and the relevant minutes shall be prepared wherein the names of the
present or represented shareholders shall be entered together with the number of
shares held or represented by them, the number of votes to which they are
entitled, the resolutions adopted and the number of in favor or opposing voters,
in addition to a sufficient summary of the discussions made during the
meeting. The said minutes shall be regularly recorded after each
meeting in a special register to be signed by the Chairman, his deputy, together
with the secretary and vote sorter.
Part
Five
Auditor
Article 43: The Company shall
have one or more auditors from among those licensed to practice the profession
within the Kingdom as appointed by the General Meeting on an annual basis, where
the auditor's remuneration shall also be fixed. The auditor may be
re-elected.
Article 44: No person may hold
the office of auditor and be at the same time a Board member or perform at the
same time any technical or administrative work for the Company. Nor may an
auditor be directly or indirectly a shareholder in any founder shareholder of
the Company or in any Board member.
Article 45: The auditor shall
audit the Company’s accounts and shall in particular verify that the balance
sheets and the statements of profit and loss are in conformity with the
accounting records and reflect fairly the Company’s financial position in
accordance with the acceptable accounting principles. The auditor shall at all
times have access to the Company’s books, records, and other documents; and the
auditor may request such statements and clarifications as he may deem necessary
with a view toward obtaining and verifying the Company’s assets and
liabilities. The managing director or the executive officer shall ensure that
the auditor is enabled to perform his tasks.
The
auditor shall present to the Annual General Meeting a report including the
Company’s position in providing him with necessary information and explanations
together with any irregularities or violations found out by him in respect of
the Companies Law or these Bylaws in addition to his view as to the accuracy of
the Company’s accounts.
Part
Six
Company
Accounts & Distribution of Profits
Article 46: The Company’s
fiscal year shall commence on the first of January and end on the
thirty first of December each year, save for the first fiscal year which shall
commence from the date of the ministerial resolution announcing the
incorporation of the Company and end on the thirty first of December of the
following fiscal year.
Article 47: The Board of
Directors shall, at the end of each fiscal year, prepare an inventory list of
the Company's assets and liabilities as of such date, in addition to the
balance, sheet, profit/loss statement and a report on the Company's activities
and financial position for the last fiscal year together with his
recommendations on the distribution of net profits at least sixty days prior to
the General Meeting. The Board of Directors shall put said documents
under the control of the auditor fifty-five days prior to the General Meeting,
where the Board Chairman shall sign the documents referred to above, with a copy
thereof to be lodged in the Company's head office to be put at the disposal of
the shareholders at least twenty-five days prior to the General
Meeting.
Article 48: The annual net
profits of the Company shall be distributed, after deduction of the general
costs and expenses including Zakat, as follows:
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1.
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An
amount equal to ten per cent (10 %) of the net profits shall be set aside
for the formation of the statutory reserve. The Ordinary General Meeting
may, when such reserve shall have reached one half of the capital,
discontinue the setting aside of said
reserve;
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2.
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The
Ordinary General Meeting may, upon the proposal of the Board of Directors,
set aside a certain percentage of the net profits for the formation of
other reserves intended for a specific purpose or
purposes;
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3.
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Out
of the outstanding balance, an initial payment equal to 5 % of the paid up
capital shall be distributed among the
shareholders;
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4.
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Following
the deduction of expenses, depreciation, and reserves, an amount of SR
200,000.00, not exceeding 10 % of the outstanding balance of profits,
shall be paid to the Board members.
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5.
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The
outstanding balance shall be distributed amongst the shareholders as a
bonus share in the profits or it shall be carried forward to the next
years in such a manner as may be approved by the General
Meeting.
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Article 49: Profits to be
distributed shall be paid to the shareholders at such places and such times as
may be determined by the Board of Directors in accordance with the instructions
issued by the Ministry of Commerce & Industry.
Article 50: In case profits
are not distributed for any fiscal year, no profits pertaining to the subsequent
years may be distributed except after payment of the percentage referred to in
the preceding paragraph 1, Article 9 hereof, to the holders of non-voting shares
which are due for such year. If for three consecutive years the
Company fails to pay said percentage of profits, the Special Meeting of said
shareholders, convened in accordance with the provisions of Article 86 of the
Companies Law, may decide that said shareholders either attend
the meetings of the General Meeting of the Company and participate in
voting, or otherwise, appoint their representatives at the Board of Directors in
proportion to their shareholding in the capital of the Company until the Company
is able to pay all the priority profits designated for the holders of said
shares for the preceding years.
Article 51: In case the
Company losses amount to three quarters of its capital, the Board of Directors
shall invite the Extraordinary General Meeting to convene to determine whether
the Company shall continue to exist or be dissolved prior to the end of its term
which is specified in Article 6 hereof, where the resolution adopted in General
Meeting shall in any event be published in the Official Gazette.
Part
“7”
Disputes
Article “52”: Each shareholder
shall have the right to institute the action in liability against the Board of
Directors if the wrongful act committed by them caused a personal prejudice to
said shareholder. However, the shareholder may institute such action only if the
Company’s right to institute it is still valid and after notifying the Company
of his intention to do so.
Part
“8”
Dissolution
and Liquidation
Article 53: Upon the
expiration of the Company’s term or upon the premature dissolution of the
Company, the Extraordinary General Meeting shall under a proposal by the Board
of Directors determine the method of the Company’s liquidation, appoint a
liquidator/liquidators, and determine their authorities and remunerations. Upon
the termination of the Company, the authorities of the Board of Directors shall
cease to exist. However, the Board of Directors shall remain in control of
management pending the appointment of the liquidator; and the powers of the
bodies of the Company shall remain valid to the extent they are not in conflict
with the liquidator’s powers.
Part
“9”
Concluding
Provisions
Article 54: All
matters not stipulated herein shall be governed by the Companies
Law.
Article 55: These Bylaws shall
be duly filed and published in accordance with the Companies
Law.